WASTE MANAGEMENT INC Q4 FY2025 earnings call

• Jim Fish highlighted 2025 as a year of outstanding results, with operating EBITDA margin improvement in Legacy Business, double-digit cash flow growth, and strong sustainability investments. • John Morris discussed Q4 performance in Legacy Business, including operating EBITDA growth, cost efficiencies in repair and maintenance and labor, and momentum in Healthcare Solutions integration. • David Reed detailed 2025 financial results, including operating EBITDA margin expansion, cash flow generation, and discussed 2026 financial outlook, including operating EBITDA guidance and capital expenditures.

In 2025, the Legacy Business saw operating EBITDA margin expand to 30.1% for the full year, driven by cost optimization in collection and disposal, including improvements in repair and maintenance costs and labor. The collection and disposal business had operating EBITDA growth in Q4, with operating expenses as a percentage of revenue improving. The Healthcare Solutions segment made progress in customer service metrics, with customer call volume trending down and SG&A expenses reduced. The sustainability businesses saw strategic expansion, with 7 new renewable natural gas facilities commissioned and recycling investments delivering over 22% operating EBITDA growth despite lower commodity prices.

• Expect operating EBITDA growth of 6.2% at midpoint or 7.4% normalized for wildfire cleanup volumes in 2025. • Free cash flow expected to grow nearly 30% at midpoint. • Board approved 14.5% increase in quarterly dividend rate in 2026, and authorized $3 billion share repurchase program. • Plan to return about $3.5 billion to shareholders through dividends and repurchases in 2026.

• Macro-economic uncertainties that could impact volume and pricing. • Commodity price fluctuations affecting recycling and other segments. • Weather impacts on volume, particularly in MSW and industrial lines of business. • Complexities in integrating and optimizing Healthcare Solutions business.

Q: Sabahat Khan asked about macro economy impact on industrial activity and Healthcare Solutions pricing.

A: Jim Fish said they are optimistic about the macro economy, industrial activity is showing signs of recovery, and Healthcare Solutions is seeing improved price realization with progress in customer service.

Q: Bryan Burgmeier asked about 2027 financial targets.

A: James Fish said 2027 targets are estimates and detailed guidance will be given a year from now due to accounting changes and dynamic macro environment.

Q: Trevor Romeo asked about Healthcare Solutions EBITDA synergy capture.

A: James Fish said SG&A synergies exceeded initial range, and cross-selling is showing positive traction.

Q: Toni Kaplan asked about Healthcare business resolution of issues and future growth.

A: James Fish said progress made in separating back-office work from customer view, with customer service metrics above Legacy Business.

Q: Faiza Alwy asked about collection and disposal volumes and margin guide.

A: James Fish said weather impacted volume slightly, and David Reed discussed margin expansion components and quarterly cadence.