WM (WM) Q3 2026 Earnings: Healthcare Waste Revenue Returns to Growth

WM's Q3 2026 earnings showed its healthcare waste business returning to revenue growth, the clearest change in a quarter that came in ahead of earlier expectations. The company reported results for the quarter ended September 30 through its third-quarter earnings call and 10-Q on October 28, 2026 [1][2]. Healthcare Solutions revenue swung from a 1.2% year-over-year decline in the second quarter to 3.7% growth [1][3]. In the core collection business, core price held at 5.8%, but no verifiable standalone quarterly volume figure was available. Recycling and renewable natural gas profits kept growing quickly, while production and pipeline connection progress were not disclosed [1][2]. WM kept full-year operating EBITDA within its original guidance range and expects revenue and free cash flow at the high end of guidance [1].

WM is North America's largest solid waste company, with 257 landfills. It collects waste from commercial, industrial and residential customers and sends it to its own landfills for disposal [4]. Stericycle, acquired in 2024, forms the Healthcare Solutions segment, which handles regulated medical waste for hospitals and clinics and provides document destruction services [5].

Healthcare waste revenue turned to growth in the second half

Healthcare Solutions revenue turned positive year over year in the third quarter. Segment net revenue was $651 million, compared with $628 million a year earlier; second-quarter revenue was $638 million, down 1.2% year over year [2][3]. In the second quarter, management said customer credits would become a significant tailwind for revenue and profit in the second half, and this quarter's result is consistent with that view [6].

Pricing drove most of the revenue growth, and the drag from volume narrowed. Management said healthcare core price was 5.5% in the third quarter, in line with plan [1]. Revenue growth of 3.7% was below the price increase, which means volume, customer credits and currency together still subtracted about 1.8 percentage points. The company did not separately disclose internal revenue change excluding currency. A low prior-year base helped the year-over-year turn, but sequential growth of about 2% shows the improvement did not come only from the base.

Margin improvement was larger. Management said segment operating EBITDA rose 33% year over year [1]. Based on the 10-Q segment table, operating EBITDA was about $136 million, a margin of about 20.9%, versus about 15.6% on the same basis a year earlier and a company-reported 19.0% in the second quarter [2][7]. Management said the segment's SG&A ratio fell to 15.2%, already inside the 15% to 16% year-end target range, and that the integration phase is nearing completion [1]. This means profit improvement after the acquisition is starting to shift from cost cuts toward revenue growth, although cross-selling revenue and synergy progress were not disclosed this quarter.

Collection and disposal: price held, volume still unconfirmed

Collection and disposal pricing was stable. Third-quarter core price was 5.8%, and segment net revenue was $5.579 billion, up 4.8% year over year [1][2]. WM still expects full-year volume to decline about 1%, or about 0.5% excluding the prior-year wildfire cleanup, consistent with its second-quarter outlook, and it did not cut revenue guidance again [1][8].

Volume and costs remain the pressure points for the core business. Management attributed the volume decline to intentionally shed residential contracts, national commercial accounts lost to brokers, and softness in construction and housing [1]. Higher diesel prices added about 70 basis points of pressure on operating expenses, and risk management costs rose $63 million year over year [1]. Based on the 10-Q segment table, the segment margin was about 38.2%, down about 0.15 percentage points year over year [2]. The company did not split revenue growth between energy surcharges and acquisitions.

Recycling and renewable energy: profit growth accelerated

Recycling and renewable energy profits grew faster than in the second quarter. Recycling Processing and Sales operating EBITDA rose 40% year over year to $91 million; Renewable Energy operating EBITDA grew more than 35%, with segment net revenue of $167 million [1][2]. Management cited a recovery in renewable energy production and stronger recycling commodity prices as possible fourth-quarter upside [1]. Recycling throughput, commodity prices and the pipeline connection status of delayed plants were not disclosed, so the growth cannot be split between new capacity and price.

Conclusion

The third-quarter report strengthens the view of WM's growth and profit conversion. The healthcare revenue inflection has arrived, the segment margin rose sharply, and recycling and renewable energy profits also grew, offsetting the pressure that fuel and risk management costs put on core collection margins [1][2]. On cash, the company expects full-year free cash flow at the high end of guidance [1]. The main uncertainties are that part of the healthcare growth relies on a low base, collection volume lacks quarterly data, and some segment profits are derived from the 10-Q segment table. Management expects fourth-quarter margins to improve sequentially; whether healthcare revenue keeps growing without the low base, and whether collection volume stops falling, will decide whether this view holds [1].

Sources

[1] WM Q3 2026 earnings call 2026-10-28 · Drillr earning_call_summary · 2026-10-28 · earnings-call · https://gateway.drillr.ai/mcp/private [2] WM 10-Q filed 2026-10-28 · Q3 2026 segment information (accession 0001628280-26-067830) · 2026-10-28 · 10-Q · https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000823768&type=10-Q [3] WM 8-K filed 2026-07-28 · Q2 2026 revenue by line of business · 2026-07-28 · 8-K · https://www.sec.gov/Archives/edgar/data/823768/000110465926087575/tm2621414d1_ex99-1.htm [4] WM 10-K filed 2026-02-09 · business overview and disposal network · 2026-02-09 · 10-K · https://www.sec.gov/Archives/edgar/data/823768/000110465926012049/wm-20251231x10k.htm [5] WM 10-K filed 2026-02-09 · Healthcare Solutions services · 2026-02-09 · 10-K · https://www.sec.gov/Archives/edgar/data/823768/000110465926012049/wm-20251231x10k.htm [6] WM Q2 2026 earnings call 2026-07-29 · Q&A on Healthcare Solutions and revenue guidance · 2026-07-29 · earnings-call · https://gateway.drillr.ai/mcp/private [7] WM 8-K filed 2026-07-28 · Q2 2026 segment adjusted operating EBITDA · 2026-07-28 · 8-K · https://www.sec.gov/Archives/edgar/data/823768/000110465926087575/tm2621414d1_ex99-1.htm [8] WM Q2 2026 earnings call 2026-07-29 · guidance · 2026-07-29 · earnings-call · https://gateway.drillr.ai/mcp/private