WM's Q2 2026 EPS rose 8.3% to $1.95 on 5.7% core price, recycling/RNG gains and Stericycle cost synergies, while volumes fell and full-year revenue guidance was trimmed about 0.6%.
Revenue
$6.7B
+4.0% YoY
Net income
$785M
+8.1% YoY
Diluted EPS
$1.95
+8.3% YoY
Operating margin
18.7%
How WM compares with Industrials peers
Figure
WM
Peer median
Rank
Revenue growth (YoY)
+4.0%
+8.5%
67th of 79
Operating margin
18.7%
17.9%
33rd of 78
EPS growth (YoY)
+8.3%
+13.4%
49th of 77
Rank 1 = fastest revenue growth, highest operating margin, fastest EPS growth. Peers are the other Industrials companies with a 2026 report on this site, each at its latest period we've analyzed; fiscal calendars differ, so periods are not always the same months.
WM (formerly Waste Management) grew second-quarter 2026 revenue 4.0% to $6.68 billion and earnings per share 8.3% to $1.95. The gain came from price increases on trash collection and landfill disposal, a sharp rise in output from its recycling and renewable-gas plants, and cost cuts in the medical-waste business it bought from Stericycle in late 2024. Volumes fell, partly because last year's quarter was boosted by wildfire cleanup work in the West. Management kept its full-year profit and cash-flow targets but cut its revenue forecast by about 0.6%.
At a glance
Core price +5.7%: WM raised prices to existing customers by well above inflation, which is the main reason revenue grew while waste volumes shrank. This was down from 6.3% in the first quarter.
Free cash flow $1.10 billion, up 34.5%: the cash left after running the business and paying for equipment grew much faster than profit. Most of that came from higher operating cash and less spending on new renewable-energy plants.
Healthcare Solutions adjusted EBITDA margin 19.0% vs 17.0%: the Stericycle business is becoming more profitable through cost cuts even though its revenue shrank 1.2%.
The numbers
Metric
Q2 2026
Q2 2025
YoY Change
Revenue
$6,684M
$6,430M
+4.0%
Income from operations
$1,253M
$1,151M
+8.9%
Operating margin
18.7%
17.9%
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Operating margin is the share of revenue left after running the business, before interest and tax. Operating EBITDA is WM's own measure: operating income before depreciation, depletion, amortization and accretion (the accounting charges for wearing out trucks and filling landfills). From 2026 WM moved landfill accretion into that line, and restated 2025 on the same basis. "Adjusted" figures leave out Stericycle integration costs and other items the company treats as unusual.
Price did the work while volume slipped
WM's revenue growth depended on price. Collection and Disposal yield, meaning the average price actually realized per unit of service, added $181 million (+3.6% for that business). Higher energy surcharges and mandated fees added another $102 million, a 38.2% jump caused by higher fuel prices. Volume in the core business took away $22 million, and Healthcare Solutions took away $30 million.
Collection and Disposal volume fell 1.8%. WM gives two reasons:
Wildfire comparison. The 10-Q says special-waste volumes fell against a prior-year quarter that "benefited from wildfire cleanup activities in the West Tier." Excluding that cleanup work, landfill volumes grew 1.7% and total Collection and Disposal volume fell only 0.4%.
Deliberate residential losses. WM is intentionally shedding lower-margin residential contracts. Residential volume fell 2.9% while residential yield rose 6.1%. Management says residential losses "improved sequentially by 210 basis points" (2.1 percentage points) compared with the first quarter.
Commercial collection also lost volume (-1.2%, with +4.0% yield). Industrial volume edged up 0.2%. The weak spot is commercial, not residential: residential shedding is a choice, but commercial volume tends to follow business activity.
Segment by segment
Segment
Revenue Q2 26
Revenue Q2 25
Adj. op. EBITDA Q2 26
Adj. op. EBITDA Q2 25
Adj. margin Q2 26
Adj. margin Q2 25
Collection & Disposal
$5,479M
$5,281M
$2,115M
$2,036M
38.6%
38.6%
Recycling Processing & Sales
$403M
$381M
$92M
$70M
22.8%
18.4%
Renewable Energy
$157M
$115M
$71M
$53M
45.2%
46.1%
Healthcare Solutions
$638M
$646M
$121M
$110M
19.0%
17.0%
Collection and Disposal is still about 82% of revenue and nearly all of the profit. Its adjusted EBITDA rose $79 million with a flat 38.6% margin. The press release says this "overcame a 70-basis point headwind to the segment from wildfire cleanup contributions in the prior year," driven by "favorable price-to-cost spread" (prices rising faster than costs) and lower frontline driver turnover. Excluding wildfire work, the segment's margin would have risen.
Recycling increased EBITDA by 31% even though commodity prices fell. WM received about $75 per ton for single-stream recycled material, down from about $84. The gain came from higher throughput and lower costs at automated facilities. In the quarter WM opened a Denver facility with about 60,000 tons of annual capacity.
Renewable Energy revenue rose 36.5% as new renewable natural gas (RNG) plants came online. Three more opened in the quarter, two in South Carolina and one in Florida, adding about 3.5 million MMBtu of expected yearly production. Prices worked against it: RNG's federal Renewable Fuel Standard credits sold for $2.33 versus $2.53, and natural gas for $2.23 per MMBtu versus $2.81. That explains why the segment's margin slipped slightly even as its profit grew $18 million. This business is exposed to commodity and regulatory prices in a way the trash business is not.
Healthcare Solutions (the former Stericycle) posted $2 million of operating income, compared with a $23 million operating loss a year earlier. Revenue fell 1.2%. The 10-Q says "contributions from pricing activities were more than offset by declines in volumes." All the profit improvement came from cost: the 10-Q credits "a reduction in workforce as we achieved synergies from our acquisitions, particularly Stericycle," plus lower integration costs. Stericycle integration costs were $24 million, down from $37 million.
What the headline numbers hide
Part of the revenue growth is fuel pass-through. The $102 million rise in energy surcharges and mandated fees is WM passing higher diesel costs on to customers. It adds revenue but almost no profit, and WM says it cost 40 basis points of EBITDA margin. Excluding it, revenue grew about 2.4%, not 4.0%.
The EPS gain came from operations, not financial engineering. Pre-tax income rose 10.3% ($1,024M vs $928M). Net interest expense was flat at $233 million. The diluted share count fell only 0.5% (402.4M vs 404.3M), even though WM restarted buybacks this year. The tax rate went up, from 21.7% to 23.2%, because of fewer investment tax credits. At last year's rate, EPS would have been about 4 cents higher. Nearly all of the 8.3% EPS growth came from the business itself.
GAAP grew faster than adjusted because last year had more charges. Adjusted EPS rose only 5.2%, compared with 8.3% on a GAAP basis. The gap is not an accounting trick. Excluded items shrank from $64 million pre-tax a year ago (Stericycle integration plus a charge tied to an oil-recovery and sludge-processing business) to $37 million this year. That makes GAAP growth look better than the underlying trend. The adjusted 5.5% EBITDA growth, or 9.1% excluding wildfire work, is the better guide.
Cash conversion is strong. Operating cash flow was $1.73 billion, 2.2 times net income. This multiple is normal for a business with heavy non-cash depreciation charges. Operating cash rose 11.7%. For the half year it was $3.23 billion against $1.51 billion of net income. Receivables rose 3.7% since December, in line with sales, although the 10-Q notes "higher bad debt expenses."
Part of the free-cash-flow jump is timing. WM spent $75 million on sustainability growth projects, down from $160 million, and $555 million on regular capital spending, down from $572 million. First-half FCF was $2.02 billion, more than half of the $3.75–3.85 billion full-year target. That implies roughly $1.73–1.83 billion in the second half, so the pace is set to slow as capital spending catches up.
A one-off gain sits in the half-year numbers. First-half income includes a $34 million gain from selling a business in the West Tier in the first quarter. It does not affect Q2 itself.
Buybacks are funded partly with debt. WM returned $1.04 billion in the quarter: $659 million in buybacks and $379 million in dividends. Year to date it paid $1.77 billion in buybacks and dividends, against $2.02 billion of free cash flow and acquisitions of $85 million. Total debt rose about $450 million since December, to $23.4 billion. That level is manageable for a business of this cash profile, but it is not free money.
Takeaway: WM is growing profit about twice as fast as its underlying revenue. Adjusted EBITDA rose 9.1% excluding last year's wildfire work, while revenue excluding fuel surcharges rose about 2.4%. That spread depends on two things that can both fade: core price growth, already down from 6.3% to 5.7% in one quarter, and one-time savings from the Stericycle integration.
Guidance and outlook
Management reaffirmed its 2026 targets of $8.15–8.25 billion of adjusted operating EBITDA and $3.75–3.85 billion of free cash flow. It lowered the revenue range to $26.275–26.475 billion, about 0.6% below the prior outlook, "primarily driven by lower volume expectations, partially offset by higher energy surcharges." Because profit guidance held on less revenue, the implied adjusted EBITDA margin rose 20 basis points, to 31.0–31.2%.
We read this as a mixed signal. The margin story is holding up: price is outrunning costs, Healthcare Solutions is past its loss-making phase, and the recycling and RNG plants built in 2024–25 are now adding profit. But the volume cut means waste generation is softer than WM expected in February. Core price is slowing, and the revenue guide came down in the middle of the year. The second half has to deliver without wildfire help and with higher planned capital spending.
Items to watch in the third-quarter report:
Commercial volume. This is the cleanest read on the economy in WM's numbers.
Healthcare Solutions volume. A segment whose revenue keeps shrinking can only grow profit through cost cuts for so long.
RNG pricing. Credit and gas prices set how much the new plants actually earn.
A leadership change is also coming. On August 26, 2026 WM announced that CEO Jim Fish will retire and President John Morris will become CEO on January 4, 2027.
WM plans to release third-quarter results after the market close on October 27, 2026.