01—Abstract
Summary
Summary of the 10-Q filed July 29, 2025. Cited figures are marked; the original filing is the authoritative source.
Waste Management, Inc. (WM) reported a solid financial performance for the quarter ending June 30, 2025, demonstrating revenue growth and improved operating income, largely driven by the recent acquisition of Stericycle, Inc. (now WM Healthcare Solutions segment) and continued strength in its core Collection and Disposal businesses.
Revenue increased significantly year-over-year, primarily due to the inclusion of Stericycle's operations and higher volumes across landfill, recycling, and renewable energy segments, albeit partially offset by lower residential volumes and recycled commodity prices. Despite increased operating expenses and SG&A, largely attributable to integration costs and labor from acquisitions, Waste Management successfully grew its operating income. Net income and diluted earnings per share also saw a healthy increase, reflecting strong operational execution and favorable tax impacts.
The company also reported a substantial increase in net cash provided by operating activities and free cash flow, indicating robust liquidity, though increased interest expenses due to acquisition financing were noted. Overall, WM shows resilience and strategic progress, with the Stericycle integration appearing to be a key driver of recent financial results.
02—Key points
Key Highlights
- Total revenue surged by 19.0% to $6,430 million in Q2 2025, largely driven by the Stericycle acquisition and increased volumes in landfill, recycling, and renewable energy segments.
- Operating income increased by 14.1% to $1,151 million, demonstrating effective cost management and revenue growth, despite higher operating expenses.
- Net income attributable to Waste Management, Inc. rose to $726 million ($1.80 per diluted share), up from $680 million ($1.69 per diluted share) in the prior year period.
- Net cash provided by operating activities increased by $232 million to $2,753 million for the first six months of 2025, signaling strong cash generation.
- Free cash flow improved significantly to $818 million in Q2 2025, supporting dividend payments and strategic investments.
- The integration of Stericycle into the new WM Healthcare Solutions segment is progressing, contributing to revenue growth but also increasing SG&A and operating expenses due to associated costs.
- The company's effective income tax rate decreased due to federal tax credits from renewable energy and low-income housing investments.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2025, Waste Management Inc kept $0.11.
- Revenue$6.43B100.0%
- Cost of revenue−$3.84B59.7%
- Gross profit$2.59B40.3%
- Operating costs−$1.44B22.4%
- Operating income$1.15B17.9%
- Interest, other & tax−$425.0M6.6%
- Net income$726.0M11.3%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2025filed July 29, 2025Financial Statements
Q2 FY2025 against Q2 FY2024
| Line item | Q2 FY2025Q2 FY2024 | Change |
|---|---|---|
| Revenue | $6.43B$5.40B | +19.0% |
| Cost of Revenue | $3.84B$3.29B | +16.7% |
| Gross Profit | $2.59B$2.11B | +22.7% |
| SG&A Expenses | $696.00M$501.00M | +38.9% |
| Operating Expenses | $5.28B$4.39B | +20.2% |
| Operating Income | $1.15B$1.01B | +14.1% |
| Net Income | $726.00M$680.00M | +6.8% |
| EPS (Basic) | $1.80$1.70 | +5.9% |
| EPS (Diluted) | $1.80$1.69 | +6.5% |
| Shares Outstanding (Basic) | 402.60M401.30M | +0.3% |
| Shares Outstanding (Diluted) | 404.30M403.20M | +0.3% |
05—Questions
Frequently Asked Questions
What was the primary driver of revenue growth in the quarter?
The primary driver of revenue growth was the acquisition of Stericycle, Inc., which contributed significantly to the top line through its WM Healthcare Solutions segment. Additionally, higher volumes in landfill, recycling, and WM Renewable Energy businesses also contributed to the revenue increase.
How are the integration costs of Stericycle impacting the company's expenses?
The integration of Stericycle has led to increased operating expenses and selling, general, and administrative (SG&A) expenses. These increases are attributed to labor costs from acquired employees, consulting fees for integration support, and other associated operational adjustments. While these costs impact profitability in the short term, the company expects to realize synergies and cost efficiencies in the long run.
What is the company's outlook on its debt levels following the Stericycle acquisition?
The Stericycle acquisition was financed with a significant amount of debt, leading to an increase in interest expense. The company's leverage has increased, and it has temporarily suspended its share repurchase program. Waste Management expects to resume share repurchases once its leverage returns to targeted levels, which is currently projected for the second quarter of 2026.
Are there any significant environmental or legal matters that investors should be aware of?
The company is involved in several environmental matters and litigation, including those related to Superfund sites and past operations of Stericycle. While the company does not currently believe the ultimate outcome of these matters will have a material adverse effect on its financial condition, results of operations, or cash flows, these are ongoing situations that warrant monitoring. Stericycle's deferred prosecution agreement with the DOJ was terminated early in April 2025, which is a positive development.
06—Continue