01—Abstract
Summary
Summary of the 8-K filed October 23, 2024. Cited figures are marked; the original filing is the authoritative source.
Waste Connections, Inc. (TSX/NYSE: WCN) reported third quarter 2024 revenue of $2.338 billiona, up 13.3% year over year from $2.065 billion.
Net income attributable to Waste Connections was $308.0 millionb, or $1.19 per diluted share, compared with $229.0 million, or $0.89 per diluted share, a year earlier. Adjusted EBITDA was $787.4 million, up 17.3%, and the adjusted EBITDA margin was 33.7%, up 120 basis points. Adjusted net income was $350.0 million, or $1.35 per diluted share.
Solid waste core price was 6.8%c in the quarter, and the company cited a 90 basis point sequential improvement in solid waste volumes. Management said margin was affected by acquisitions closed during the quarter and by storm-related impacts at quarter-end. For 2024, the company raised its full-year outlook.
Revenue is now estimated at approximately $8.9 billiond, up $150 million from the original outlook. Net income is estimated at approximately $1.082 billion, and adjusted EBITDA at approximately $2.910 billion, up $50 million. Capital expenditures are estimated at approximately $1.150 billion and adjusted free cash flow at approximately $1.200 billion, both in line with the original outlook.
Year-to-date net cash provided by operating activities was $1.660 billion. The company also increased its regular quarterly dividend by 10.5%, to $0.285 per share in the quarter, and is on pace for acquisitions totaling over $700 million in annualized revenue. It expects approximately 2% revenue carryover into 2025.
The outlook excludes the effect of additional acquisitions that may close during 2024. The company said it expects high single-digit adjusted EBITDA growth in 2025 on mid to high single-digit revenue growth. The filing states that a press release announcing the results is attached as Exhibit 99.1, and that a conference call will be held on October 24, 2024 at 8:30 A.M.
Eastern Time. Management also said the company will file a Form 8-K before market open on October 24 with its fourth-quarter 2024 outlook for revenue, solid waste price plus volume growth, and adjusted EBITDA.
02—Key points
Key Highlights
- Q3 2024 revenue of $2.338 billion, up 13.3% year over year; solid waste core price of 6.8%.
- Q3 net income of $308.0 million ($1.19 per diluted share) versus $229.0 million ($0.89) a year earlier; adjusted net income of $350.0 million ($1.35 per diluted share).
- Adjusted EBITDA of $787.4 million, up 17.3%, with a 33.7% margin, up 120 basis points year over year.
- Full-year 2024 revenue outlook raised to approximately $8.9 billion, up $150 million; adjusted EBITDA outlook raised to approximately $2.910 billion, up $50 million.
- Regular quarterly dividend increased by 10.5%; cash dividends per share were $0.285 in Q3 2024 versus $0.255 in Q3 2023.
- On pace for acquisitions totaling over $700 million in annualized revenue, with an estimated 2025 rollover revenue contribution of approximately 2%.
- Nine-month 2024 net cash provided by operating activities of $1.660 billion and adjusted free cash flow of $1.044 billion.
03—Questions
Frequently Asked Questions
How did Waste Connections perform in the third quarter of 2024?
Revenue was $2.338 billion, up 13.3% from $2.065 billion a year earlier. Net income attributable to Waste Connections was $308.0 million, or $1.19 per diluted share, compared with $0.89 per diluted share in the prior-year period. Adjusted EBITDA rose 17.3% to $787.4 million, and the adjusted EBITDA margin was 33.7%.
What changed in the company's 2024 outlook?
The company increased its full-year 2024 revenue estimate to approximately $8.9 billion, up $150 million from the original outlook. It increased its net income estimate to approximately $1.082 billion and its adjusted EBITDA estimate to approximately $2.910 billion, up $50 million. Capital expenditures of approximately $1.150 billion and adjusted free cash flow of approximately $1.200 billion were in line with the original outlook. The outlook excludes additional acquisitions that may close during the year.
What did management say about the margin and 2025?
Management said the 33.7% adjusted EBITDA margin was as expected and overcame margin dilution from acquisitions closed during the quarter and storm-related impacts at quarter-end. It said the company should be positioned for high single-digit adjusted EBITDA growth in 2025 on expected mid to high single-digit revenue growth, including approximately 2% revenue carryover from acquisitions completed in 2024.
What are the capital return and acquisition plans?
The regular quarterly dividend was increased by 10.5%, and cash dividends per share were $0.285 in the third quarter of 2024 versus $0.255 a year earlier. The company is on pace for acquisitions totaling over $700 million in annualized revenue. Management described the dividend increase as demonstrating the compatibility of funding its growth strategy and acquisitions with increasing returns of capital to shareholders.
When will the company provide its fourth-quarter 2024 outlook?
The company stated it will file a Form 8-K on EDGAR and SEDAR before markets open on October 24, 2024, providing its fourth-quarter 2024 outlook for revenue, solid waste price plus volume growth, and adjusted EBITDA. A conference call on third-quarter results is scheduled for October 24, 2024 at 8:30 A.M. Eastern Time.
04—Continue