Executive Summary

Q4 revenue was $5.89B (+13.0% YoY) with adjusted operating EBITDA of $1.71B and adjusted EBITDA margin of 28.9%; diluted EPS was $1.48 GAAP and $1.70 adjusted (vs. $1.74 in Q4’23) .
Management guided to a 2025 “step change”: revenue $25.55–$25.80B, adjusted EBITDA $7.45–$7.65B (≈15% growth) and free cash flow $2.68–$2.78B; WM Legacy Business margin expected at 30.7% and Healthcare Solutions at 17.6% .
Stericycle integration progressing; synergy target doubled to $250M run-rate by 2027 with up to $100M in 2025; WM Healthcare Solutions expected to grow ~9% EBITDA pre-synergies in 2025 .
Capital allocation: dividend raised 10% to $3.30 for 2025; buybacks suspended to prioritize de-levering to ~3.1x by YE25 .
Street estimates comparison was unavailable due to a temporary S&P Global request limit; results should be compared to consensus once accessible (see Estimates Context).

What Went Well and What Went Wrong

What Went Well

Collection & Disposal drove record profitability: WM Legacy Business achieved a 30.0% full-year adjusted operating EBITDA margin for the first time; Q4 adjusted C&D EBITDA margin was 37.4% .
Cost discipline and technology: OpEx/revenue was 60.3% in Q4 and 60.7% for 2024 (both sub-61% for the first time); annualized driver turnover reached a company-best ~15% as of December, aided by route automation and retention initiatives .
Sustainability momentum: four RNG facilities were commissioned in Q4 (7 of 20 now online), with RNG production expected to more than double in 2025; ~50% of 2025 RNG volumes already contracted; recycling automation projects continue to lift throughput and margin .

Quote (CEO): “We expect to deliver a second consecutive year of double-digit growth in adjusted operating EBITDA in 2025… combining strong operational performance… strategic investments in growth” .
Quote (CFO): “We expect to deliver total company operating EBITDA growth of 15% at the midpoint… translating into robust cash from operations and free cash flow” .

What Went Wrong

EPS optics: Adjusted EPS declined to $1.70 from $1.74 in Q4’23 largely on mix and integration costs; GAAP EPS was $1.48; Q4 included $113M Stericycle-related transaction/integration costs (EPS impact ~$0.22) .
EBITDA margin compression vs. Q3: Adjusted EBITDA margin was 28.9% in Q4 vs. 30.5% in Q3, reflecting WM Healthcare Solutions mix and seasonal factors; WM Healthcare Solutions Q4 adjusted EBITDA margin was 15.1% (as-reported 1.0% including purchase accounting and integration items) .
2025 headwinds: expiration of the CNG/alternative fuel tax credit expected to be a ~$63M EBITDA and ~30 bps margin headwind; interest expense to rise $350–$400M in 2025 (≈$300M from Stericycle) .

Financial Results

Metric	Q4 2023	Q2 2024	Q3 2024	Q4 2024
Revenue ($B)	$5.22	$5.40	$5.61	$5.89
Adjusted Operating EBITDA ($B)	$1.56	$1.62	$1.71	$1.71
Adjusted EBITDA Margin (%)	29.9%	30.0%	30.5%	28.9%
Diluted EPS (GAAP)	$1.22	$1.69	$1.88	$1.48
Diluted EPS (Adjusted)	$1.74	$1.82	$1.96	$1.70

YoY (Q4’24 vs Q4’23): Revenue +13.0%; Adj. EBITDA +9.5%; adj. margin -100 bps; adj. EPS -2.3% .
QoQ (Q4’24 vs Q3’24): Revenue +5.1%; Adj. EBITDA roughly flat; adj. margin -160 bps; GAAP EPS down on mix and integration costs .

Segment revenue (net) and margins:

Net Operating Revenue ($M)

Segment	Q3 2024	Q4 2024
Collection & Disposal	$5,084	$4,994
Recycling Processing & Sales	$432	$398
WM Renewable Energy	$87	$93
WM Healthcare Solutions	—	$403
Corporate & Other	$6	$5
Total	$5,609	$5,893

Adjusted Operating EBITDA Margin (%)

Segment	Q3 2024	Q4 2024
Collection & Disposal	37.4%	37.4%
Recycling Processing & Sales	12.7%	14.6%
WM Renewable Energy	50.6%	N/A (intercompany royalties)
WM Healthcare Solutions	—	15.1%
Total (Adjusted)	30.5%	28.9%

KPIs and cash generation:

KPI	Q2 2024	Q3 2024	Q4 2024
Total Average Yield (%)	5.2%	5.3%	3.7%
Volume (%)	0.1%	1.4%	0.3%
Internalization (%)	69.5%	69.6%	70.1%
Free Cash Flow ($M)	$530	$618	$455

Non-GAAP adjustments (Q4 2024):

Adjusted EPS excludes $113M Stericycle transaction/integration costs, certain asset items and debt extinguishment, reducing GAAP EPS by ~$0.22; adjusted EBITDA was $1.706B (28.9%) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2025	N/A	$25.55–$25.80B	Initiated
Adjusted Operating EBITDA	FY 2025	N/A	$7.45–$7.65B	Initiated
Adjusted EBITDA Margin	FY 2025	N/A	29.2%–29.7%; Legacy 30.7%; WMHS 17.6%	Initiated
Core Price	FY 2025	N/A	5.8%–6.2%	Initiated
Yield	FY 2025	N/A	4.0%–4.2%	Initiated
Volume	FY 2025	N/A	0.25%–0.75%	Initiated
Capex to support business	FY 2025	N/A	$2.575–$2.625B	Initiated
Sustainability Growth Capex	FY 2025	N/A	$600–$650M	Initiated
Free Cash Flow	FY 2025	N/A	$2.675–$2.775B	Initiated
RNG sales contracted	FY 2025	N/A	~50% at ~$28.80/MMBtu	Initiated
Recycled commodity price assumption	FY 2025	N/A	~$85/ton	Initiated
WM Healthcare Solutions	FY 2025	N/A	~9% EBITDA growth pre-synergies; up to $100M synergies	Initiated
Synergy Target	Run-rate by 2027	$125M (prior view)	$250M	Raised
Dividend	2025	$3.00	~$3.30	Raised
Buybacks	2025	Authorized	Suspended (de-lever to ~3.1x YE25)	Suspended

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 & Q3 2024)	Current Period (Q4 2024)	Trend
Technology/automation	Automation lifted margins; Q3 adj. EBITDA margin 30.5% record; route automation, retention improved	OpEx/revenue 60.3% in Q4; driver turnover ~15%; 900+ residential routes exited or automated to lift margins	Continued positive execution
Pricing vs. cost spread	Strong pricing discipline; spread aided margins in Q3	2025 core price 5.8–6.2%, yield 4.0–4.2%; spread supported by cost initiatives despite wage pressure	Stable to improving
RNG (sustainability)	7 projects online by YE’24; large 2027 EBITDA target	4 new RNG plants in Q4; ~50% 2025 volumes contracted; sensitivity provided (RFS credit, gas)	Scaling; de-risked via contracting
Recycling commodities	Q3 upside from commodities but volatile	2025 assumption $85/ton; January uptick noted; sensitivity ≈$25M EBITDA per $10/ton	Conservative assumptions
WM Healthcare Solutions (Stericycle)	Pending close; M&A rollovers expected	Synergies doubled to $250M by 2027; ~$460M 2025 WMHS EBITDA implied; SG&A optimization focus	Upside increased; integration underway
Macro/industrial	MSW and landfill volumes strong in Q3; industrial soft	Industrial haul remains soft; volumes guided 0.25%–0.75% in 2025; cautious on macro	Cautious

Management Commentary

Jim Fish, CEO: “We expect to deliver total company operating EBITDA growth of 15% at the midpoint… nearly $1 billion of growth in 2025 compared to 2024” .
John Morris, COO: “Operating expenses as a percentage of revenue were 60.3%… fifth consecutive quarter below 61%… annualized driver turnover… lowest ever at 15%” .
Devina Rankin, CFO: “Cash interest to be $350–$400 million higher in 2025 (≈$300 million Stericycle)… total cash taxes up $75–$100 million, partly offset by higher ITCs” .
Rafael Carrasco, WMHS: “Synergies now $250M by 2027… larger SG&A and OpEx opportunities; cross-sell ramps in 2026” .

Q&A Highlights

CNG/Alternative fuel tax credit headwind: ~$63M EBITDA and ~30 bps margin in 2025 .
WM Healthcare Solutions bridge: Q4 WMHS run-rate ~~$61M EBITDA (~~$4M synergies in Q4); 2025 plan ~9% EBITDA growth plus ~$85–$90M synergies → ≈$460M 2025 WMHS EBITDA .
Recycling assumptions and sensitivity: 2025 blended commodity ~$85/ton; ~$25M EBITDA per $10/ton move ; management sees early-year upticks post-holiday .
RNG commercialization: ~50% of 2025 RNG volumes contracted; some 2025 RINs pre-sold at ~$2.70; longer-term 80/40/20 hedge approach targeted .
Cadence: Collection & Disposal margins may be muted in 1H25; WMHS synergies back-half weighted; sustainability pressures earlier in 2025 due to YoY comps .
Working capital/ERP: ERP program and receivables efforts could unlock ~$150M cash improvement, likely early 2026 .
Leverage and capital allocation: YE25 leverage ~3.1x; long-term target 2.5–3.0x; buybacks paused; dividend ~$3.30 .

Estimates Context

S&P Global consensus for Q4 2024 EPS, revenue and EBITDA was not retrievable due to a temporary request limit on our side; as a result, we cannot quantify beats/misses at this time. We recommend comparing reported revenue of $5.89B, adjusted EPS of $1.70, and adjusted EBITDA of $1.71B to S&P Global consensus once available .

Key Takeaways for Investors

2025 outlook calls for a clear “step change” in revenue, EBITDA and FCF; guidance implies ~15% EBITDA growth with Legacy margins above 30% and WMHS mid-teens, supported by pricing, cost optimization and sustainability ramp .
Integration of Stericycle is tracking ahead on synergies (doubled to $250M by 2027; up to $100M in 2025) and should be a meaningful earnings driver as SG&A and OpEx are optimized and cross-selling begins in 2026 .
Q4 margins stepped down vs. Q3 as WMHS was added and seasonality kicked in; however, core C&D margins remain robust (37%+) and full-year WM Legacy hit 30% adjusted EBITDA margin for the first time .
Sustainability engines are scaling with reduced capex intensity: ~50% of 2025 RNG volumes are already locked; recycling automation lifts throughput and lowers unit costs, dampening commodity sensitivity .
2025 modeling watch items: ~$63M EBITDA headwind from CNG credit expiry; $350–$400M higher interest expense; recycling commodity base case $85/ton; synergy cadence back-half weighted .
Capital returns: 10% dividend hike to $3.30 underscores cash flow confidence; buybacks paused to prioritize de-levering to ~3.1x by YE25, leaving optionality for tuck-ins and sustainability projects .
Near-term trading catalysts: confirmation of early-2025 operational cadence, WMHS synergy execution updates, RNG commissioning progress and commodity trajectory vs. $85/ton assumption .

WASTE MANAGEMENT INC (WM)·Q4 2024 Earnings Summary