Waste Connections (WCN) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenue increased 7.1% year-over-year to $2.41 billion, with net income up 5.4% to $290.3 million and adjusted EBITDA up 7.5% to $786.4 million (32.7% margin), exceeding expectations despite economic headwinds.

• Growth was driven by acquisitions, price increases, and higher E&P waste revenues in Canada, while lower roll-off, residential, and commercial volumes, as well as construction-linked sluggishness, were headwinds.

• Operational execution improved, with better employee retention, record safety performance, and voluntary turnover below 11% for the 11th consecutive quarter.

• Acquisition activity remains robust, with $200 million in annualized revenue closed and a strong pipeline for further deals.

• The company continued to invest in ESG initiatives, targeting $500 million for long-term sustainability goals.

Financial highlights

• Q2 revenue was $2.407 billion, up 7.1% year-over-year, with acquisitions contributing $113 million net of divestitures.

• Adjusted EBITDA for Q2 was $786.4 million, up 7.5% year-over-year, with a margin of 32.7%.

• Adjusted free cash flow for the first half of 2025 was $699.1 million, with capital expenditures up over $110 million year-over-year.

• Operating income for Q2 2025 rose 8.2% year-over-year to $459.5 million; operating margin increased to 19.1%.

• Cash and equivalents at June 30, 2025 were $110.2 million; working capital deficit was $651.5 million.

Outlook and guidance

• Full-year 2025 outlook maintained: revenue of ~$9.45 billion, adjusted EBITDA of ~$3.12 billion (33% margin), and adjusted free cash flow of ~$1.3 billion.

• Capital expenditures for 2025 forecasted between $1.2 billion and $1.25 billion, including $100–$150 million for renewable natural gas facilities.

• Guidance assumes no change in economic environment and excludes impacts from additional acquisitions or significant tax changes.

• Back half of 2025 expected to see adjusted EBITDA margin average 33.6%, with outsized margin expansion in Q4.

• The One Big Beautiful Bill Act, enacted July 2025, is not expected to materially impact the effective tax rate or cash flows for the current year.