01—Abstract
Summary
Summary of the 8-K filed July 24, 2024. Cited figures are marked; the original filing is the authoritative source.
Waste Connections, Inc. (TSX/NYSE: WCN) reported second quarter 2024 results on July 24, 2024 and raised its full year 2024 outlook.
Q2 revenue was $2.248 billiona, up from $2.021 billion a year earlier. Operating income was $424.7 million, and net income attributable to Waste Connections was $275.5 million, or $1.07 per diluted share, compared with $0.81 in the prior-year quarter. Adjusted EBITDA was $731.8 million, up from $628.9 million, and adjusted net income was $1.24 per diluted share versus $1.02.
The company stated that adjusted EBITDA margin was 32.6% of revenue in the quarter. For the six months ended June 30, 2024, revenue was $4.321 billionb and net income attributable to Waste Connections was $505.5 million, or $1.96 per diluted share. Adjusted free cash flow was $727.4 million, or 16.8% of revenue, and net cash provided by operating activities was $1.102 billion.
Acquisition spending was $1.436 billionc in the six-month period, and the company said year-to-date closed and signed acquisitions had over $650 million of total annualized revenue, with another $150 million under definitive agreement expected to close later in the year. The updated 2024 outlook calls for revenue of approximately $8.850 billion, up $100 million from the original outlook, and adjusted EBITDA of approximately $2.900 billion, or about 32.8% of revenue, versus an original $2.860 billion. Net income is estimated at approximately $1.087 billion, capital expenditures at approximately $1.150 billion, and adjusted free cash flow at approximately $1.200 billion.
The outlook excludes the effect of additional acquisitions that may close during the year. The company also said it expects to file a Form 8-K before market open on July 25, 2024 with its third quarter 2024 outlook.
02—Key points
Key Highlights
- Q2 2024 revenue of $2.248 billion, up from $2.021 billion in Q2 2023
- Q2 2024 net income attributable to Waste Connections of $275.5 million, or $1.07 per diluted share, versus $0.81 a year earlier
- Q2 2024 adjusted EBITDA of $731.8 million (32.6% of revenue), up from $628.9 million
- Six-month adjusted free cash flow of $727.4 million, or 16.8% of revenue, on operating cash flow of $1.102 billion
- Full year 2024 adjusted EBITDA outlook raised to approximately $2.900 billion from $2.860 billion; revenue outlook raised by $100 million to approximately $8.850 billion
- Year-to-date acquisitions with over $650 million of total annualized revenue, plus $150 million under definitive agreement expected to close later this year
- Long-term debt rose to $7.696 billion at June 30, 2024 from $6.725 billion at December 31, 2023
03—Questions
Frequently Asked Questions
How did Waste Connections perform in the second quarter of 2024?
Revenue was $2.248 billion, up from $2.021 billion a year earlier. Net income attributable to Waste Connections was $275.5 million, or $1.07 per diluted share, compared with $209.2 million, or $0.81 per share, in Q2 2023. Adjusted EBITDA was $731.8 million, compared with $628.9 million, and the company said it was above its outlook.
What changed in the company's full year 2024 outlook?
Revenue is now estimated at approximately $8.850 billion, up $100 million from the original outlook. Adjusted EBITDA is estimated at approximately $2.900 billion, or about 32.8% of revenue, compared with an original $2.860 billion, or 32.7%. Capital expenditures (about $1.150 billion) and adjusted free cash flow (about $1.200 billion) are in line with the original outlook.
What is driving the company's growth according to management?
The CEO attributed the quarter to solid operational execution, incremental acquisitions and increased commodity values. He cited price-led organic solid waste growth and a 100 basis point sequential improvement in volumes, augmented by accretive acquisitions. Solid waste internal growth for Q2 2024 was 4.6% in total, with core price contributing 7.0% and volume a negative 2.8%.
Does the outlook include future acquisitions?
No. The company stated that its outlook excludes any impact from additional acquisitions that may close during the year, as well as the expensing of transaction-related items. Management said it is positioned for a record year of private company acquisition activity in 2024.
How is the company's balance sheet and debt position?
Long-term portion of debt and notes payable rose to $7.696 billion at June 30, 2024, from $6.725 billion at December 31, 2023, and total assets increased to $19.302 billion. Debt to book capitalization was 49% as of June 30, 2024. Management said continued balance sheet strength provides flexibility to fund acquisitions and an increasing return of capital to shareholders.
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