EPS of $1.49 decreased by 20.6% from previous year
Gross margin of 29.2%
Net income of 603.00M
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Waste Management Inc (0LTG.L) QQ3 2025 Results – Revenue USD 6.44B with Steady Cash Flow Delivery but Margin Pressures Persist
Executive Summary
Waste Management Inc reported a solid Q3 2025 topline with revenue of USD 6.443 billion, up 14.9% year-over-year, underscoring continued demand resilience in North America. Despite stronger revenue and EBITDA of USD 1.729 billion, net income declined to USD 603 million (EPS USD 1.50), a drop of roughly 20% year-over-year and 17% quarter-over-quarter, driven by higher other income/expense items and taxes that weighed on reported earnings. The company generated robust cash flow, with operating cash flow per share of USD 3.95 and free cash flow per share of USD 2.02, supporting a payout ratio of 55.1% and a cash position per share of USD 0.434. Leverage remains modest (debt-to-capitalization ~8.5%), but liquidity metrics show near-term tightening (current ratio 0.84; cash ratio 0.0305), suggesting continued emphasis on working capital discipline and capital allocation. Market valuation remains elevated, with a P/E of ~36.9x and EV/EBITDA around 70x, reflecting WM’s strong cash-flow generation and the quality of its franchise, but investors should monitor recycling-price dynamics, regulatory developments, and capex intensity as key drivers of earnings upside.
Key Performance Indicators
Revenue
6.44B
QoQ: 0.20% | YoY:14.87%
Gross Profit
1.88B
29.19% margin
QoQ: -0.11% | YoY:13.86%
Operating Income
1.22B
QoQ: 2.44% | YoY:7.90%
Net Income
603.00M
QoQ: -16.94% | YoY:-20.66%
EPS
1.50
QoQ: -16.67% | YoY:-20.63%
Revenue Trend
Margin Analysis
Key Insights
Revenue: USD 6.443B in Q3 2025, YoY +14.87%; QoQ +0.20%
- Revenue: USD 6.443B in Q3 2025, YoY +14.87%; QoQ +0.20%
- Gross Profit: USD 1.881B; Gross Margin 29.19%
- Operating Income: USD 1.216B; Operating Margin 18.87%
- EBITDA: USD 1.729B; EBITDA Margin ~26.8% (EBITDA / Revenue)
- Net Income: USD 603M; Net Margin 9.36%
- EPS: USD 1.50 (Diluted USD 1.49); YoY EPS change -20.63%; QoQ -16.67%
- Cash Flow: Operating Cash Flow per Share USD 3.95; Free Cash Flow per Share USD 2.02; Cash per Share USD 0.434
- Dividend: Payout Ratio 55.1%; Dividend Yield 0.37%
- Liquidity/Leverage: Current Ratio 0.843; Quick Ratio 0.843; Cash Ratio 0.0305; Debt to Capitalization 8.46%; Interest Coverage reported as -4.40 (per ratios)
- Efficiency: Asset Turnover 0.141; Fixed Asset Turnover 0.321; Receivables Turnover 1.604; DSO 56.11 days
- Valuation (as of QQ3 2025): P/E 36.90x; P/B 9.35x; P/S 13.81x; EV/EBITDA 70.13x; Dividend Yield 0.37%
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
6.44B
14.87%
0.20%
Gross Profit
1.88B
13.86%
-0.11%
Operating Income
1.22B
7.90%
2.44%
Net Income
603.00M
-20.66%
-16.94%
EPS
1.50
-20.63%
-16.67%
Key Financial Ratios
currentRatio
0.84
grossProfitMargin
40.5%
operatingProfitMargin
15.4%
netProfitMargin
9.36%
returnOnAssets
1.32%
returnOnEquity
6.33%
debtEquityRatio
0.09
operatingCashFlowPerShare
$3.95
freeCashFlowPerShare
$2.02
dividendPayoutRatio
55.1%
priceToBookRatio
9.35
priceEarningsRatio
36.9
Net Income vs. Revenue
Expense Breakdown
Management Commentary
No earnings call transcript data were provided in the input. Consequently, there are no management quotes or theme extractions to summarize in this section. If a transcript becomes available, we will extract themes by: strategy/content of guidance, operational execution, market conditions, and capital allocation.
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Forward Guidance
No formal forward guidance was included in the provided data. Based on WM’s historical profile, investors should monitor: (1) volume and pricing dynamics in North American waste collection and disposal, (2) progression of recycling and energy-from-waste initiatives that could boost margins over time, (3) capex intensity and efficiency improvements that affect free cash flow, and (4) regulatory developments and commodity price movements affecting recyclables. Given the current quarterly metrics, a cautious view would anticipate continued strong cash flow generation supporting the dividend, with a focus on margin management and working capital normalization to sustain earnings resilience. Key targets to watch, if guidance is provided later, would likely include annual Free Cash Flow per Share growth, debt/capitalization targets, and any explicit margin or ROIC objectives.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
0LTG.L Focus
29.19%
15.40%
6.33%
36.90%
0K8M.L
33.20%
35.40%
4.70%
23.70%
0J1R.L
15.50%
-30.40%
-30.80%
15.72%
0JT5.L
49.00%
33.10%
14.00%
16.76%
0KYY.L
61.80%
39.20%
2.86%
41.18%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
WM’s QQ3 2025 results illustrate a high-quality, cash-generative business with strong top-line growth (revenue +14.87% YoY) and meaningful Free Cash Flow per Share (USD 2.02) that supports a steady dividend. However, the earnings mix shows a notable divergence between operating performance and reported net income, driven by higher other expenses and tax effects, leading to a subdued net margin and a negative stated interest coverage in the provided metric. The company’s balance sheet remains conservatively levered with a low debt ratio and modest debt-to-capitalization, which supports downside protection in a volatile macro environment, though liquidity metrics imply careful working capital management going forward. Valuation remains premium relative to peers (P/E ~36.9x; EV/EBITDA ~70x; P/S ~13.8x), reflecting the market's confidence in WM’s long-term cash-flow durability and dividend trajectory. Investors should weigh the secular growth potential from recycling and energy-from-waste initiatives against the cyclicality of commodity prices and regulatory dynamics. The key near-term catalysts include continued cash flow generation, any new guidance on full-year FCF per share, and the pace of margin improvement through efficiency initiatives. Recommendation: with a constructive long-term view on cash flow and capital returns, maintain a selective overweight posture, but require clearer visibility on margin progression and working capital normalization to justify valuation levels.
Key Investment Factors
Growth Potential
Stable demand for waste collection and disposal with potential upside from recycling monetization and energy-from-waste initiatives; scale advantages may enable ongoing cost optimizations and improved asset utilization.
Profitability Risk
Regulatory changes and environmental compliance costs; recyclables pricing volatility; capital intensity of infrastructure; macro/industrial cycle sensitivity; potential currency and cross-border regulatory exposure in certain markets.
Financial Position
Solid cash generation with OCF per share of USD 3.95 and FCF per share USD 2.02; low debt burden ( Debt/Capitalization ~8.5%), but liquidity metrics show near-term pressure (current ratio ~0.84) which necessitates disciplined working capital management.
SWOT Analysis
Strengths
Scale and integrated North American waste management network (collection, transfer, MRFs, landfills)
Consistent free cash flow generation and robust capital allocation (dividends)
Low leverage with conservative balance sheet (Debt to capitalization ~8.5%)
Stable EBITDA generation supports cash flow resilience across cycles
Weaknesses
Near-term liquidity pressure suggested by current ratio below 1.0
Higher other expense line in QQ3 2025 pressuring net income
Moderate receivables and working capital intensity (DSO ~56 days)
Opportunities
Expansion of recycling and energy-from-waste capabilities to broaden value proposition
Operational efficiencies and cost-structure optimization to support margins
Pricing power through inflation pass-throughs and long-term contracts in regulated markets
Threats
Regulatory and environmental compliance risk (potential cost impact)
Volatility in recyclables pricing and commodity markets
Capital-intensive asset base increasing sensitivity to interest rates and capex cycles
Competitive dynamics in North American waste services and consolidation risk