WM announced financial results for the fourth quarter and year ended December 31, 2025.
“2025 was a year of disciplined execution for WM,” said Jim Fish, WM’s chief executive officer. “We delivered record performance in operating expenses as a percentage of revenue for both the fourth quarter and the full year, resulting in our best full-year adjusted operating EBITDA margin. Our investments in technology and automation continue to generate meaningful efficiencies, contributing to structurally enhanced margins and stronger cash generation. We are also building momentum in the strategic growth of our recycling, renewable energy and healthcare solutions businesses as we position WM as the leading provider of comprehensive environmental solutions.”
Fish continued, “As we carry our momentum into 2026, we expect to grow free cash flow by nearly 30 percent at the midpoint of our guidance. This growth is underpinned by our unreplicable solid waste network as well as the intentional investments we have made in recycling and renewable energy projects, our fleet, and a premier medical waste network. We plan to harvest the benefits of our investments and return to shareholders approximately $3.5 billion in 2026 through dividends and share repurchases while also returning our leverage ratio to our long-term target range of between 2.5x and 3.0x.”
2026 Expectations
- Strong growth in the collection and disposal business is expected to be driven by disciplined pricing and continued cost optimization. The outlook for revenue growth is based on core price in 2026 of between 5.4 percent and 5.8 percent, yield of between 3.2 percent and 3.6 percent, and volumes between 0.2 percent and 0.6 percent, overcoming a 50-basis point headwind from wildfire volume in 2025.
- Rollover from solid waste acquisitions is expected to contribute about $65 million of revenue and $25 million of adjusted operating EBITDA.
- Growth in the company’s sustainability businesses is expected to be driven by increased contributions from growth projects, partially offset by lower commodity prices. Together, adjusted operating EBITDA for the recycling processing and sales and renewable energy segments combined with the landfill gas royalties realized by the collection and disposal segment are expected to grow between $235 and $255 million in 2026.
- The company expects its healthcare solutions business to grow revenue by around three percent primarily driven by price. Margin expansion is expected to be driven by further SG&A synergies and cost optimization now that operations are locally managed.
- WM’s strong balance sheet and cash flow growth outlook position the company to continue its commitment to sound capital allocation. The company’s outlook includes $100 to $200 million of investment in solid waste acquisitions and estimated annual dividends paid to shareholders of $1.5 billion.
The board of directors has indicated its intention to increase the annual dividend by $0.48 per share to $3.78 in 2026, though all future dividends will be declared at the discretion of the board prior to payment. As announced in December, the company expects to resume share repurchases during the first quarter of 2026 and repurchase approximately $2 billion of its shares during 2026 while remaining committed to returning to its targeted leverage ratio of between 2.5x and 3.0x during the year.
Published March 2026
