WM reported strong Q2 2026 results with EBITDA growth, margin expansion, and robust free cash flow, though volumes were softer than expected, particularly in commercial due to lost national accounts. The company raised its margin guidance while lowering its revenue guidance, reflecting strong price/cost control offsetting volume weakness. Non-core growth areas like Healthcare Solutions and Recycling/RNG showed strong progress but RNG volume was held back by pipeline connection delays. Q2 operating EBITDA grew 5.5% (9.1% ex-wildfire), margin expanded 40 bps despite 100 bps of combined headwinds.
Buzzberg readVolumes softer; full-year revenue guide cut ~1.5%WM reported strong Q2 2026 results with EBITDA growth, margin expansion, and robust free cash flow, though volumes were softer than expected, particularly in commercial due to lost national accounts. The company raised its margin guidance while lowering its revenue guidance, reflecting strong price/cost control offsetting volume weakness. Non-core growth areas like Healthcare Solutions and Recycling/RNG showed strong progress but RNG volume was held back by pipeline connection delays. Q2 operating EBITDA grew 5.5% (9.1% ex-wildfire), margin expanded 40 bps despite 100 bps of combined headwinds.Read full analysisCollapse analysis
WM reported strong Q2 2026 results with EBITDA growth, margin expansion, and robust free cash flow, though volumes were softer than expected, particularly in commercial due to lost national accounts. The company raised its margin guidance while lowering its revenue guidance, reflecting strong price/cost control offsetting volume weakness. Non-core growth areas like Healthcare Solutions and Recycling/RNG showed strong progress but RNG volume was held back by pipeline connection delays. Q2 operating EBITDA grew 5.5% (9.1% ex-wildfire), margin expanded 40 bps despite 100 bps of combined headwinds.
Full-year revenue guide lowered ~1.5% to $26.275B-$26.475B on softer collection/disposal volumes and RNG delays.
Full-year operating margin guide raised 20 bps to 31.0%-31.2%; EBITDA and FCF guidance maintained.
Healthcare Solutions margins improved 200 bps to 19% and is fully integrated; SG&A is improving.
Revenue$6.684B
+7% QoQ
EPS$2.02
+12% QoQ
Gross margin40.83%
reported
Op margin18.75%
reported
What changed this quarter
01
Guidance
Volumes softer; full-year revenue guide cut ~1.5%
Guidance · revenue to $26.375B
02
Margins
Healthcare Solutions margins expand 200 bps to 19%
Reported gross margin was 40.83%, reinforcing the quarter's better-than-guided profitability.
Management highlighted their technology investments, including AI and machine learning across operations, and the Smart Truck platform which generates more than $300 million of annual run rate EBITDA. They noted they are in the early innings of capturing full value from these…
04
Pricing
Core price expected to exit 2026 above 5.5%
Full-year operating margin guide raised 20 bps to 31.0%-31.2%; EBITDA and FCF guidance maintained.
AI, capex & demand read
AI
Platform & monetization
Management highlighted their technology investments, including AI and machine learning across operations, and the Smart Truck platform which generates more than $300 million of annual run rate EBITDA. They noted they are in the early innings of capturing full value from these capabilities, with future innovations expected to support revenue capture, lower costs, and margin expansion.
Demand
Bookings & conversion
Management is confident in its margin trajectory and free cash flow, but revenue was trimmed due to softer volumes, resulting in a neutral overall tone.
Capex
Investment and capacity
Capital spending was down more than 18% in the first half, reflecting normalized vehicle spending and lower sustainability capital as planned investments near completion. Management expects free cash flow growth to continue, with margin expansion driven by cost controls rather than increased capex.
Tone · Confident
Management expressed confidence in the strength and consistency of the business model, reiterating full-year EBITDA and free cash flow guidance despite revenue headwinds, and highlighted strong margin expansion and technology-driven efficiencies.
Bottlenecks
Logistics & labor
Logistics or labor availability is delaying throughput
“Despite ongoing inflationary pressures, including labor cost increases of approximately 4%, we limited the increase in collection operating costs to less than 1.7% compared to the second quarter of 2025.”
WM's volume softness is attributed to lost national accounts in commercial, not a broad macro slowdown; industrial volumes (roll-off) are actually turning positive after five quarters of decline.
“we did see a fairly nice pickup in industrial volumes... to see that kind of get back to flat and slightly positive, as I mentioned, over the last four weeks, that's a good news picture for us.”
WM's renewable natural gas (RNG) volume is being held back by third-party pipeline interconnection delays at two newly built plants, which are expected to be resolved by year-end.
“the other half was related to R&G, specifically a couple of plants. Those two plants are built, so they're standing ready, but we're not able to push gas into the pipeline yet and that's related to a couple of third parties... We do think…”
WM's technology and automation investments are driving a 30% improvement in labor costs per ton at recycling facilities, allowing them to offset lower commodity prices and process 12% more recyclables.
“our recycling automation projects are driving a sustained 30% improvement in labor costs per ton compared to legacy facilities. And in the second quarter, we processed 12% more recyclables year over year.”
WM's volume softness is attributed to lost national accounts in commercial, not a broad macro slowdown; industrial volumes (roll-off) are actually turning positive after five quarters of decline.
WM's renewable natural gas (RNG) volume is being held back by third-party pipeline interconnection delays at two newly built plants, which are expected to be resolved by year-end.