Waste Connections Q2 Earnings Call Highlights

Waste Connections raised its full-year 2026 outlook after second-quarter revenue rose 6.4% to $2.562 billion and adjusted EBITDA increased 6.8% to $840.1 million. Management said stronger pricing and margin execution helped offset macro headwinds like higher fuel costs and weaker construction activity. Pricing gains are outweighing softer volumes , with solid waste organic growth driven by 6.7% total pricing in the quarter. Volumes fell 1.9%, but management noted early signs of improvement in special waste and construction and demolition activity. The company sees upside from commodities, RNG projects, acquisitions and AI initiatives . Waste Connections is benefiting from improving recycled commodity trends and progressing renewable natural gas projects, while also planning about $100 million in EBITDA improvement from AI programs as they mature. Waste Connections NYSE: WCN raised its full-year 2026 outlook after second-quarter revenue and adjusted EBITDA grew more than 6%, with management citing stronger-than-expected pricing, margin execution, acquisition activity and improving commodity trends. President and CEO Ron Mittelstaedt said the company was “extremely pleased” with its first-half performance, which he said positioned Waste Connections for an increased outlook despite macroeconomic pressures tied to geopolitical uncertainty, elevated fuel costs and softer construction-related activity in some markets. Second-quarter revenue rose 6.4% year over year to $2.562 billion, exceeding management’s expectations, according to EVP and CFO Mary Anne Whitney. Adjusted EBITDA was $840.1 million, up 6.8% from the prior-year period. Adjusted EBITDA margin was 32.8%, up 10 basis points year over year, as underlying margin expansion offset headwinds from fuel and lower commodity values. Solid waste organic growth was driven by total price of 6.7% in the quarter, including core pricing of 5.6% and fuel and material surcharges of 1.1%. Whitney said the company remains on track for full-year core price “at or above 5.5%,” with most 2026 pricing already completed or otherwise known. Volumes, however, remained pressured. Waste Connections reported solid waste volumes down 1.9%, reflecting ongoing macroeconomic uncertainty and a slowdown in construction-related activity. Mittelstaedt said recent elevated fuel costs appeared to have affected the timing and magnitude of some projects, with certain activity paused during the quarter. He also said customer sensitivity to higher pricing, including fuel-related surcharges, likely contributed to churn in some markets. Still, management pointed to early signs of improvement. Mittelstaedt said special waste activity in July had been encouraging and may indicate that the second-quarter slowdown was temporary. Construction and demolition tons were up year over year in the second quarter for the first time in 10 quarters, with some projects continuing into the third quarter. Waste Connections increased its full-year 2026 outlook based on first-half results, recent values for recycled commodities, RINs and fuel, and acquisitions completed to date. The company now expects: Revenue of $10.02 billion to $10.05 billion, up $100 million to $120 million from its February outlook. Adjusted EBITDA of $3.33 billion to $3.34 billion, up from the prior range of $3.30 billion to $3.325 billion. Full-year adjusted EBITDA margin of 33.2% to 33.3%. Adjusted free cash flow of $1.4 billion to $1.45 billion, unchanged from the prior outlook. Whitney said second-half a.