Waste Connections (NYSE:WCN) executives said the company closed out fiscal 2025 with margin expansion and continued progress on operating initiatives, while providing a 2026 outlook that assumes no material improvement in the current economic environment and excludes contributions from additional, unannounced acquisitions.
2025 wrap-up: pricing-led growth and operating gains
President and CEO Ron Mittelstaedt said the company’s performance in 2025 was driven by “price-led organic growth, solid waste, and continued operating improvements.” He highlighted workforce and safety progress as key contributors to productivity and cost savings, noting that employee turnover and safety incident rates declined for a third consecutive year and ended 2025 at multiyear lows. Mittelstaedt added that January safety-related incidents were down almost 20% year-over-year to another record low.
For 2025, Mittelstaedt said solid waste core pricing of 6.5% exceeded the company’s expectations, helping expand an “outsized price-cost spread” and contributing to 100 basis points of underlying margin expansion in solid waste. He acknowledged that reported results faced headwinds from a second straight year of declines in recycled commodity values and renewable energy credits tied to landfill gas sales, as well as “continued sluggishness” in underlying solid waste volumes.
Q4 results: revenue of $2.373B and EBITDA margin up 110 bps
CFO Mary Anne Whitney reported fourth-quarter revenue of $2.373 billion. Acquisitions completed since the year-ago period contributed about $58 million of revenue in the quarter, net of divestitures. Pricing accelerated sequentially to 6.4%, with rates ranging from about 3.7% in the mostly exclusive Western region to over 7% in competitive markets.
Whitney said reported volume was down 2.7% in Q4, consistent with prior quarters, reflecting intentional shedding, the price/volume trade-off, and weakness in more cyclical parts of the portfolio. On a same-store basis, she said roll-off pulls fell 2% and total landfill tons rose 3%, with MSW and special waste both up 4% and construction and demolition (C&D) down 4%. For the full year, C&D tons declined 5%, bringing volumes down about 15% from 2023. Special waste was up 7% for 2025, while MSW tons rose 3%, which Whitney attributed in part to increased internalization in the Northeast and certain Texas markets.
Adjusted EBITDA in Q4 rose 8.7% year-over-year to $796 million, or 33.5% of revenue, with margin expanding 110 basis points. Whitney said Q4 comparisons benefited from lapping the initial wind-down of operations at Chiquita Canyon Landfill and the toughest commodity comparisons, which had “masked the strength of underlying margin expansion” earlier in the year. She also noted risk management costs, previously a headwind, became a benefit in Q4.
For the full year, Whitney reported adjusted EBITDA of $3.125 billion, up 7.7%, with adjusted EBITDA margin of 33%, up 50 basis points. She said that normalizing for Chiquita and lower commodities, margin exceeded 33.6%.
Chiquita Canyon: technical progress, regulatory friction
Mittelstaedt said the company continues to make progress managing the elevated temperature landfill (ETLF) event at Chiquita Canyon, with some timing differences in outlays due to “better-than-expected progress in some areas.” However, he said political and regulatory challenges have exceeded expectations, citing regulatory, permitting, legal, and consulting requirements that have prolonged and increased costs.
Management said it welcomed involvement from the U.S. Environmental Protection Agency (EPA) to help streamline oversight. Mittelstaedt said the company was encouraged by recent meetings with top EPA officials, and that the agency indicated it was finalizing next steps for short- and long-term solutions to assist in mitigating the reaction and streamlining regulatory oversight.
In response to analyst questions, Mittelstaedt provided additional operating metrics, saying leachate production peaked at roughly 400,000 gallons per day in mid-2024 and declined to about 200,000 to 225,000 gallons per day by the end of the fourth quarter. He said wellhead temperatures were cooling and that indicators suggest the reaction is “on the downward slope.” He also said leachate treatment represents about 40% to 45% of total Chiquita costs, with disposal costs varying widely—about $0.50-$0.60 per gallon up to $1.50-$2.50—depending on facility availability and treatment requirements.
Free cash flow and 2026 guidance: margin gains to continue amid commodity drag
Whitney reported 2025 adjusted free cash flow of $1.26 billion, reflecting conversion of adjusted EBITDA of about 50%. She said cash flow strength largely offset higher-than-expected impacts from Chiquita, totaling about $200 million. Capital expenditures were $1.194 billion, including about $100 million of spending on renewable natural gas (RNG) projects.
For 2026, management’s outlook assumes no change in the current economic environment and excludes the impact of future acquisitions and transaction-related expenses. Key elements of the company’s 2026 outlook included:
- Revenue: $9.9 billion to $9.95 billion
- Solid waste organic growth: 3.5% to 4%, driven by core pricing of 5% to 5.5% and expected yields of about 4% (implying volumes flat to down ~0.5 point)
- Acquisition revenue contribution: about $125 million from deals closed to date
- Adjusted EBITDA: $3.300 billion to $3.325 billion
- Adjusted EBITDA margin: 33.3% to 33.4%, up 30 to 40 basis points, with a 20 to 30 basis-point commodity drag
- Adjusted free cash flow: $1.4 billion to $1.45 billion, expected to increase by double-digit percentages
- CapEx: about $1.25 billion, including roughly $100 million for RNG and recycling projects
- Chiquita outlays in free cash flow: $100 million to $150 million
Whitney added that normalized for RNG and Chiquita impacts, 2026 adjusted free cash flow would reflect about 50% conversion of EBITDA, or approximately $1.7 billion. She also cautioned that Q1 could be influenced by “outsized weather events across several geographies,” that Q4 would face the toughest year-over-year comparisons given 2025 outperformance, and that recycled commodity comparisons would be most difficult in the first half of the year.
Executives repeatedly pointed to potential upside drivers not embedded in guidance, including a recovery in commodity values, an improvement in cyclical volumes (such as C&D), and additional acquisitions. Mittelstaedt said the company’s approach is to provide guidance “with what is known today and assuming it doesn’t improve,” with improvement treated as upside.
Capital allocation, acquisitions, and operational initiatives
Management said Waste Connections closed 19 acquisitions in 2025 totaling about $330 million of acquired annualized revenue. Mittelstaedt described the pipeline as active and said there was “no reason to expect” 2026 looks different after three strong years of acquisition activity, while emphasizing discipline on valuation and market selection. The company ended 2025 with leverage of 2.75x debt-to-EBITDA, which Mittelstaedt said supports continued acquisitions alongside shareholder returns.
In 2025, the company returned more than $830 million to shareholders, including over $330 million in dividends and over $500 million in share repurchases. Mittelstaedt said the company has taken an opportunistic approach to buybacks and intends to continue doing so, while declining to outline specific intentions tied to the share price.
On sustainability, management said five RNG facilities are already online, with the remainder expected to be operational around year-end. Whitney told analysts 2026 includes the “final” spend tied to the current group of RNG facilities, alongside incremental spending to “de-risk recycling” through technology and quality improvements. In Q&A, management said it expects RNG-related capital outlays tied to this group of projects to be completed in 2026, setting up improved contribution in 2027 as facilities ramp. When asked about EBITDA contribution, Whitney said $100 million (and potentially $100 million to $120 million) is a fair way to think about the aggregate return once fully operational, noting that about half the projects are already online.
On technology and AI, Mittelstaedt highlighted initiatives aimed at digitizing and automating operations, improving forecasting, and enhancing customer experience. He said the company is focusing on two initiatives during the year: a shift toward more dynamic, real-time routing and a more robust mobile connectivity platform intended to reduce inbound customer service calls over time. He said real-time routing has been beta tested in a small portion of the network, with broader rollout expected by the third and fourth quarters of the year and fuller deployment through 2027.
Management also provided an update on the Northeast rail corridor tied to Arrowhead Landfill in Alabama and intermodal facilities in the Northeast. Mittelstaedt said the network increased from about 2,300 to 2,500 tons per day at the time of acquisition in August 2023 to about 7,500 tons per day at peak, and he expects it to reach 9,000 to 9,500 tons per day into Arrowhead as capacity build-outs progress through 2026.
About Waste Connections (NYSE:WCN)
Waste Connections (NYSE: WCN) is a North American integrated waste services company that provides a range of solid waste and environmental services to municipal, commercial, industrial and residential customers. The company offers collection, transportation, transfer, disposal and recycling services, and operates an extensive network of transfer stations and disposal facilities. Waste Connections positions itself as a provider of infrastructure-driven waste solutions across many regions of the United States and Canada.
The company’s operating activities include routine curbside and commercial collection, roll-off and container services, operation of landfills and transfer stations, and recycling and resource recovery programs.
