Waste Connections Reports Fourth Quarter 2025 Results and Provides 2026 Outlook

Executive Summary

• Waste Connections, Inc. reported strong fourth-quarter and full-year 2025 financial results, driven by price-led organic growth and margin expansion, alongside a record return of capital to shareholders.
• The company announced its 2026 outlook, projecting revenue between $9.90 billion and $9.95 billion, with adjusted EBITDA in the range of $3.300 billion to $3.325 billion and double-digit growth in adjusted free cash flow.
• Operational highlights include a 110 basis point year-over-year increase in Q4 adjusted EBITDA margin to 33.5%, completed acquisitions contributing approximately $330 million in annualized revenue, and multi-year lows in employee turnover and safety incident rates.

Key Details

• Q4 2025 Financials:
  • Revenue: $2.373 billion (up from $2.260 billion in Q4 2024).
  • Net Income: $258.5 million ($1.01 per diluted share), compared to a net loss of $196.0 million ($0.76 per diluted share) in the prior year period.
  • Adjusted EBITDA: $795.6 million (up from $731.9 million), representing a margin of 33.5% of revenue (up 110 basis points year-over-year).
  • Adjusted Net Income: $330.1 million ($1.29 per diluted share), up from $300.6 million ($1.16 per diluted share).
  • Operating Income: $420.8 million, which included $39.1 million in impairments/other items (primarily environmental liability) and $4.3 million in transaction-related expenses.
• Full Year 2025 Financials:
  • Revenue: $9.467 billion (up from $8.920 billion).
  • Net Income: $1.077 billion ($4.17 per diluted share), compared to $617.6 million ($2.39 per diluted share) in 2024.
  • Adjusted EBITDA: $3.125 billion (up from $2.902 billion), representing a margin of 33.0% of revenue (up 50 basis points year-over-year).
  • Adjusted Net Income: $1.328 billion ($5.15 per diluted share), up from $1.239 billion ($4.79 per diluted share).
  • Operating Income: $1.710 billion, including $109.7 million in impairments/other items and $24.2 million in transaction-related expenses.
• 2026 Outlook:
  • Revenue: $9.90 billion to $9.95 billion.
  • Net Income: $1.223 billion to $1.238 billion.
  • Adjusted EBITDA: $3.300 billion to $3.325 billion.
  • Net Cash from Operating Activities: $2.65 billion to $2.70 billion.
  • Capital Expenditures: Approximately $1.25 billion.
  • Adjusted Free Cash Flow: $1.40 billion to $1.45 billion (up 11.2% to 15.1% year-over-year).
• Capital Allocation & M&A:
  • Returned a record $839.3 million to shareholders in 2025, including over $500 million in share repurchases.
  • Completed acquisitions with approximately $330 million in annualized revenue.
  • Debt to Book Capitalization as of Dec 31, 2025: 52%.
• Operational Metrics:
  • Solid Waste Internal Growth (Q4 2025): 2.6% (Core Price +6.4%, Volume -2.7%, Recycling -0.6%).
  • Solid Waste Internal Growth (Full Year 2025): 2.0% (Core Price +6.5%, Volume -2.8%, Recycling -0.5%).
  • Contribution from Acquisitions (Full Year 2025): $377.3 million.
  • Days Sales Outstanding (Q4 2025): 40 days (24 net of deferred revenue).
  • Internalization (Q4 2025): 59%.
• Conference Call: Scheduled for February 12th at 8:30 A.M. Eastern Time.

Notable Quotes

• “Adjusted EBITDA margin expansion of 110 basis points in the fourth quarter capped off a remarkable year for Waste Connections, driven by price-led organic growth in solid waste and strong execution from ongoing improvements in operating trends. For the full year 2025, we delivered industry-leading adjusted EBITDA margin of 33.0%, up 100 basis points year over year, excluding the impact of lower commodities,” said Ronald J. Mittelstaedt, President and Chief Executive Officer.
• “We also completed another year of above-average acquisition activity, with approximately $330 million in acquired annualized revenue, plus returned a record amount to shareholders including through share repurchases of over $500 million."
• “For the third consecutive year, both employee turnover and safety incident rates declined, exiting 2025 at multi-year lows,” continued Mr. Mittelstaedt, “providing ongoing benefits through cost savings, increased productivity, heightened employee engagement and improved customer service. This operating momentum sets up 2026 for another year of outsized underlying solid waste margin expansion, along with upside from any improvement in the broader economy or commodities that are approaching historical cyclical lows.”
• “We are extremely pleased by our 2025 results and our positioning for double-digit growth in adjusted free cash flow in 2026. Further, with leverage at 2.75 times, our balance sheet strength continues to provide significant optionality to execute on our strong acquisition pipeline, along with further increases in return of capital to shareholders, while also pursuing technology-driven initiatives supporting continued growth."