Waste Connections’ fourth quarter results were marked by operational improvements and disciplined pricing, but the market reacted negatively to the report. Management attributed margin gains to enhanced employee retention and declining safety incident rates, which CEO Ronald Mittelstaedt described as reaching “historic company record levels in safety.” The company also overcame commodity headwinds and the closure of the Chiquita Canyon Landfill through cost savings, productivity efforts, and solid waste core pricing, while noting continued sluggishness in core volume growth. Ongoing challenges in recycling commodity values and regulatory issues at Chiquita remained notable drags.
Is now the time to buy WCN? Find out in our full research report (it’s free for active Edge members).
Waste Connections (WCN) Q4 CY2025 Highlights:
- Revenue: $2.37 billion vs analyst estimates of $2.37 billion (5% year-on-year growth, in line)
- Adjusted EPS: $1.29 vs analyst estimates of $1.27 (1.5% beat)
- Adjusted EBITDA: $795.6 million vs analyst estimates of $791.6 million (33.5% margin, 0.5% beat)
- Operating Margin: 17.7%, up from -8.8% in the same quarter last year
- Market Capitalization: $41.23 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Waste Connections’s Q4 Earnings Call
- Sabahat Khan (RBC Capital Markets) asked about sustainability CapEx spending and Chiquita outlays; CFO Mary Anne Whitney clarified that both are expected to step down in 2027, with sustainability investments tapering and Chiquita costs gradually subsiding as remediation progresses.
- Tami Zakaria (JPMorgan) questioned which cost buckets are sustainably trending downward; CEO Ronald Mittelstaedt responded that labor and other costs are moderating, and maintaining the price-cost spread is more important than the headline price increase.
- Noah Duke Kaye (Oppenheimer & Co.) inquired about the timeline for renewable natural gas investments and Chiquita spending; Mittelstaedt confirmed 2026 is expected to be the last year of major outlays, with significant EBITDA and free cash flow benefits materializing in 2027.
- Jerry Revich (Wells Fargo) asked about the progress in ramping up Arrowhead Landfill and internalization rates; Mittelstaedt reported strong growth in internal tons and improved margin contributions from the Northeast rail corridor and related acquisitions.
- James Joseph Schumm (TD Cowen) pressed for updates on leachate production and costs at Chiquita; Mittelstaedt detailed the decline in daily leachate volumes and noted regulatory streamlining by the EPA could further reduce costs.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will monitor (1) the pace of renewable natural gas project completions and the ability to ramp up efficiency and profitability, (2) the progress of AI and technology-driven initiatives such as dynamic routing and mobile customer platforms, and (3) regulatory developments and cost trends related to the Chiquita Canyon Landfill closure. Any pickup in commodity prices or acceleration in acquisition activity will also be key signposts for potential upside.
Waste Connections currently trades at $161.33, down from $171.70 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).
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