WM Reports Strong Q3 2025 Adjusted EPS Amidst Revenue Growth

WM (WM.US) announced its financial results for the third quarter of 2025, reporting adjusted diluted EPS of $1.98. This figure compares to $1.96 in the prior year's third quarter, indicating a year-over-year increase of 1.02%. Revenue for the quarter reached $6.443 billion, marking a substantial increase of 14.87% from $5.609 billion in the third quarter of 2024. While the reported adjusted EPS was slightly below the analyst estimate of $2.01, the company demonstrated solid revenue growth.

Strong Operating Performance and Strategic Investments

The company's third-quarter results demonstrated significant momentum in earnings growth and free cash flow conversion. WM's Collection and Disposal business achieved a record-setting operating EBITDA margin of 37.5%, or 38.4% on an adjusted basis, driven by continuous improvements in technology, strategic asset network utilization, and disciplined pricing programs. Adjusted operating EBITDA for the WM Legacy Business grew 8.7%, contributing to overall adjusted operating EBITDA of $1.970 billion, up from $1.711 billion in the prior year period.

Despite commodity price headwinds, both the Recycling Processing and Sales and Renewable Energy segments saw adjusted operating EBITDA growth. WM continued to advance its integration of WM Healthcare Solutions, enhancing service breadth and value. The company's strategic investments in recycling and renewable natural gas facilities are progressing, with four growth projects commencing operations during the quarter, including new renewable natural gas facilities in Texas and California, and recycling projects in Texas and California.

Management's Confident Outlook

Management expressed confidence in achieving its full-year earnings and free cash flow guidance, as well as its long-term financial objectives and strategic priorities. The company affirmed its adjusted operating EBITDA guidance to be between $7.475 billion and $7.625 billion, and free cash flow guidance between $2.8 billion and $2.9 billion for 2025. Total company revenue is now anticipated to be approximately $25.275 billion, at the lower end of prior guidance, mainly due to a decline in recycled commodity pricing and slightly lower revenue expectations from WM Healthcare Solutions.

The projected adjusted operating EBITDA margin guidance has been increased to between 29.6% and 30.2% from an earlier range of 29.6% and 29.9%. WM expects 2026 to be a year of outsized free cash flow growth, with results projected to approach $3.8 billion. This outlook underscores the company's commitment to disciplined capital allocation and generating strong shareholder returns.