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F500-2020-207-Waste-Management

Creeping six spots up this year's ranking, Waste Management collects, recycles, and disposes of garbage in the United States and Canada. It also owns and operates landfill gas-to-energy facilities via subsidiaries in the U.S.

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Waste Management is an environmental solutions and waste management company that provides collection services for residential, commercial, industrial, and municipal customers. It owns and operates hundreds of active landfills and transfer stations and offers materials processing and recycling; it also operates landfill gas-to-energy facilities for renewable electricity and gas. Waste Management completed a $7.2 billion acquisition of Stericycle in 2024.

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Waste Management (WM): Company Profile, Stock Price, News, Rankings

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Waste Management

waste management

A reminder, today's program is being recorded. Now I'd like to introduce your host for today's program, Ed Egl, Vice President, Investor Relations. Please go ahead, sir.

Thank you, Jonathan. Good morning, everyone, and thank you for joining us for our Q1 2026 earnings conference call. With me this morning are Jim Fish, Chief Executive Officer, John Morris, President and Chief Operating Officer, and David Reed, Executive Vice President and Chief Financial Officer. You'll hear prepared comments from each of them today. Jim will cover high-level financials and provide a strategic update. John will cover an operating overview, and David will cover the details of the financials.

Before we get started, please note that we have filed a Form 8-K that includes the earnings press release and is available on our website at www.wm.com. The Form 8-K, the press release, and the schedule to the press release include important information. During the call, you will hear forward-looking statements which are based on current expectations, projections, or opinions about future periods.

All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Some of these risks and uncertainties are discussed in today's press release and in our filings with the SEC, including our most recent Form 10-K and Form 10-Qs. Jim and John will discuss our results in the areas of yield and volume, which unless stated otherwise, are more specifically references to internal revenue growth or IRG from yield or volume.

During the call, Jim, John, and David will discuss Operating EBITDA, which is income from operations before depreciation, depletion, amortization, and accretion. Beginning this year, landfill accretion expense was moved from operating expense to depreciation, depletion, amortization, and accretion to enhance comparability and better reflect operating performance. For comparability purposes, 2025 actuals have been updated to reflect that change.

Any comparisons, unless otherwise stated, will be with the prior year period. Net income, EPS, income from operations and margin, Operating EBITDA and margin, operating expense and margin, and SG&A expense and margin have been adjusted to enhance comparability by excluding certain items that management believes do not reflect our fundamental business performance or results of operations. These adjusted measures, in addition to free cash flow, are non-GAAP measures.

Please refer to our earnings press release and tables, which can be found at the company's website at www.wm.com for reconciliations to the most comparable GAAP measures and additional information about our use of non-GAAP measures. This call is being recorded and will be available 24 hours a day, beginning approximately 1:00 P.M. Eastern Time today. To hear a replay of the call, access the WM website at www.investors.wm.com.

Time-sensitive information provided during today's call, which is occurring on April 29th, 2026, may no longer be accurate at the time of a replay. Any redistribution, retransmission, or rebroadcast of this call in any form without the express written consent of WM is prohibited. Now I'll turn the call over to WM CEO, Jim Fish.

All right. Thanks, Ed, and thank you all for joining us. The WM team again delivered strong quarterly results with earnings and cash flow results that achieved our expectations. What continues to set us apart is our ability to consistently achieve strong performance regardless of external factors. Q1 Operating EBITDA grew by nearly 6% compared to the Q1 of 2025, driven by solid performance in our collection and disposal business and further supported by growth in our sustainability businesses and ongoing optimization of healthcare solutions.

This momentum to start the year, combined with our proven operational execution and resilient business model, reinforces our confidence in achieving our full-year financial guidance. In the Q1, our results clearly advanced each of our four strategic priorities for 2026. First, we grew our collection and disposal business, achieving 6.4% Operating EBITDA growth, supported by our focus on customer lifetime value, operational excellence, and network advantages.

Our strategically positioned post-collection network is driving profitable MSW volume growth, while our technology leadership leads to differentiated services and lower costs. Additionally, our people-first culture and disciplined approach to retention are driving meaningful improvements in safety, service reliability, and operational efficiency.

As we look ahead, we continue to see opportunities for tuck-in acquisitions that complement our existing portfolio that we expect to close in 2026. Second, our sustainability investments continue to generate meaningful returns, underscoring the value of the capital we've deployed over time. In renewable energy, Operating EBITDA more than doubled in the quarter, driven by the completion of seven new renewable natural gas facilities since the Q1 of 2025.

In the recycling segment, even though pricing for single-stream commodities declined to 27%, Operating EBITDA grew by 18% as we realized automation benefits that lower labour costs and higher quality material and processed 9% more volume. In 2026, we're on track to substantially complete the sustainability capital expenditure program we laid out in 2023.

Third, in Healthcare Solutions, we continue to advance the business towards scalable accretive growth. While revenue was impacted by volume losses from last year, effective cost management and synergy capture drove Operating EBITDA growth of nearly 12% in the quarter. Importantly, we expect an inflection in revenue growth in the H2 of 2026 as the ERP is stabilized and the benefits of our integrated offering become more evident. Finally, turning to capital allocation.

Our strong operating performance translated into significant free cash flow generation, with Q1 free cash flow of $920 million, nearly doubling from the prior year. This enabled us to return about $730 million to shareholders through dividends and share repurchases. As we close out the Q1, our performance reinforces both the strength of our strategy and its alignment with the long-term trends shaping our business.

We're delivering consistent results in our core operations, realizing returns from years of disciplined investment and sustainability, advancing Healthcare Solutions towards scalable growth, and pairing that execution with a thoughtful shareholder-focused approach to capital allocation. As we progress through 2026, we're well-positioned to continue to produce strong results and harvest the benefits of our investments. I want to thank our employees for their continued dedication and hard work. Now I'll turn the call over to John to discuss our operational results.

Thanks, Jim, and good morning. The Q1 once again demonstrated the strength and resilience of our operating model and the progress we continue to make in optimizing our business. Despite a softer volume environment driven largely by winter weather impacts and the absence of last year's wildfire-related volumes, we delivered strong financial performance by remaining focused on disciplined price execution, technology-enabled efficiency, and cost control.

This is clearly visible in our collection and disposal business, where we delivered Operating EBITDA growth of more than 6% year-over-year, with margin expanding approximately 110 basis points. From a cost perspective, our focus on operational excellence continues to drive meaningful results. Operating expenses as a percentage of revenue improved 70 basis points and came in below 60% for the consecutive Q5, underscoring the durability of the structural changes we're making across the business.

Automation and technology continue to help us flex costs and drive efficiency as volumes fluctuate. As an example, total repair and maintenance costs were actually lower year-over-year and improved by approximately 30 basis points as a percentage of revenue. This improvement reflects innovative solutions and disciplined fleet actions, including the use of augmented reality tools to improve technician efficiency and continued benefits from rightsizing the fleet.

Together, these initiatives are improving asset utilization and delivering sustainable cost savings. Equally important, our people-first approach continues to show up in our results. Total driver and technician turnover, both voluntary and involuntary, remained low at 17.2%, improving 130 basis points year-over-year. The strong retention supports safer operations, higher service reliability, and greater efficiency across the business.

Notably, our Q1 safety performance was our best ever Q1 performance for safety-related incidents, which is particularly impressive given the challenging winter weather conditions. Together, these results reflect the engagement, consistency, and dedication our teams bring to executing our strategy every day. Turning to the top line, pricing execution remained strong.

Each of collection and disposal's core price of 6.3% and yield of 3.9% exceeded our expectations, with pricing dollars up year-over-year. Core price growth in our commercial and landfill lines of business each exceeded 7.5%, reflecting the value of our service offerings, consistent execution in the field, and focus on price to cost spread. Shifting to volumes, we began the year softer than expected, with about half of the shortfall in collection and disposal volumes driven by severe winter weather.

We did see several areas of underlying strength and stability. MSW volumes were 2.7%, and special waste volumes were 6.7% when excluding wildfire volumes from the prior year. Industrial collection volumes returned to modest growth in the quarter, supported by continued internalization of solid waste from healthcare solutions customers. While volumes were a headwind early in the year, we expect improvement from seasonality as well as the lapping of a couple of larger low-margin contract losses in the balance of the year.

In Q1, our energy surcharge program recovered the increase in both direct and indirect fuel costs we saw in the Q1. Higher revenue from fuel recovery created a 20 basis point drag on Operating EBITDA margin. Putting together these pieces on pricing, volume, and energy surcharges, we expect to achieve our full-year revenue guidance in 2026. Turning to WM Healthcare Solutions, we continue to see the benefits of integration into our core operating structure.

Operating EBITDA margin improved by 200 basis points in the quarter, while SG&A costs decreased roughly 20% year-over-year, reflecting discipline, operational alignment, and the benefits of WM's integrated business model. We remain on track to achieve a run rate of $300 million of total synergies at the end of 2027, with results reflected across all of our business segments.

In closing, I want to thank our teams for their continued focus, discipline, and commitment to serving our customers. The strong start to the year reinforces our confidence in our strategy, operating model, and ability to perform consistently in a dynamic operating environment. `With that, I'll turn the call over to David to walk through our financial results in more detail.

Thanks, John, and good morning. We are pleased with our strong start to 2026, particularly when looking at the drivers of our Q1 Operating EBITDA margin expansion, which reflects solid contributions from across the business. The collection and disposal business expanded margin by 110 basis points, driven by strong pricing and our success using technology and automation to reduce costs.

This growth includes the 20 basis point headwind John mentioned from the impact of higher fuel prices. Our recycling and renewable energy businesses together contributed approximately 50 basis points of margin expansion, reflecting accretive growth from investments in renewable natural gas facilities and recycling automation and new market projects. WM Healthcare Solutions contributed another 20 basis points of margin expansion due to effective cost management and synergy capture.

These contributions Partially offset by 40 basis points of increased spending on technology initiatives and 70 basis points related to higher cost and timing-related impacts from incentive compensation and employee benefit costs. The strong execution translated into robust cash generation. Operating cash flow was $1.5 billion in the quarter, an increase of nearly $300 million compared to the Q1 of 2025.

The increase was driven by working capital improvements and our strong earnings growth. Capital expenditures totalled $650 million in the quarter, including $61 million directed to sustainability growth investments. Capital spending was approximately 22% lower year-over-year, as expected, reflecting normalized spend on collection vehicles and lower sustainability capital as several projects reached completion during 2025.

Combining all of this, Q1 free cash flow nearly doubled to $920 million, putting us on track to achieve our full-year guidance. As Jim mentioned, we allocated the majority of our free cash flow to shareholder returns in the Q1. We returned $385 million to shareholders in dividends, and we resumed share buybacks, repurchasing $344 million of our shares. Our leverage ratio at the end of the quarter was 2.94x, returning to within our target range of between 2.5x and 3x. Our effective tax rate was approximately 18% in the Q1, lower than planned, driven largely by the benefit of production tax credits related to our renewable natural gas business.

During the quarter, the IRS clarified the qualification for these credits, and we now expect to realize benefits during the next several years, another value add from our strategic decision to grow our renewable natural gas portfolio. That benefit is approximately $27 million for the 2025 tax year and $30 million-$35 million annually from this year through 2029. As a result of receiving 2025 and 2026 production tax credits, we now expect a full-year effective tax rate of approximately 23% in 2026. In closing, I want to thank the entire WM team for their continued focus and execution.

Their dedication has driven a strong start to the year and positions us well to deliver on our full-year financial guidance.  Through our disciplined approach to operations, capital allocation, and investment, we remain confident in our ability to create long-term value for shareholders. With that, Jonathan, let's open up the line for questions.

Certainly. Our first question comes from the line of Jerry Revich from Wells Fargo. Your question, please.

I just want to unpack the really strong margin performance, despite the lower volumes in the quarter, really nice price cost. As we think about the volume cadence over the balance of the year, can we just double-click on what gives us confidence that volume trends will be better in the H2 of the year? Can we just expand on how you would quantify the weather impact? I don't know if you want to talk about it month by month or just give us more visibility on that point.

Yeah, just in terms of the margin trajectory for the H2 of the year, I mean, you do know that Q2 will be a tough comp for us with the wildfire volumes. But we do expect EBITDA margin to lift nicely from there in the H2, and follow a pattern similar to what we saw in 2025. We had, obviously, a strong start to our pricing plan for the year, and that also gives us confidence, you know, with the margin trajectory.

Yeah. Jerry, as far as volume goes, for the remainder of the year, I mean, if Q1 because of the weather impact and look, we don't normally talk about weather 'cause it happens every year, but this year, in particular along that East Coast, you know, three feet of snow in Boston is, I don't think they've had that in, you know, 15 years. It did impact us, and we had a number of facilities that were shut down. John could tell you the more direct numbers, but I think some of our facilities were shut down for as many as 10 days, including, by the way, our Stericycle facilities that were shut down. It did have a significant impact on volume.

As we look at volume going forward, there's a couple of things that give us, give us, you know, reason to be optimistic. Specifically, and John mentioned it, special waste, which we knew was going to be a difficult comp because of Southern California fire volume last year. Including the fire volume, it was down, I think about 1.5%, but excluding it, as John mentioned, it was actually up 6.7%. The reason that's meaningful is because it gives us an indication of what special waste will look like. What's the pipeline look like? And what will special waste volumes look like when we anniversary this fire volume, which is for the most part, at the end of Q2.

We did get some fire volume in Q3 in the month of July, and then it almost all went away at the end of July. We will get to kind of a clean year-over-year for special waste by the time we get to the month of August, and this gives us a bit of an indication that that special waste volume should be pretty strong for us. 6.7% is a pretty decent number. John also mentioned MSW volume. Just looked at the numbers for last week. MSW volume was over +4%  for us. That's a positive for us. The other one that I would mention is industrial volumes, which have finally shown a reversal of probably a six or seven-quarter trend.

We've been negative on roll-off volumes for, you know, at least a year and a half. We finally got to a point where we're showing. I think the real number was like +0.2% , so it was just slightly positive. Last year's was, you know, like -1.5% . I think we're fairly encouraged with volume numbers. Are we going to hit our guidance for the year? Don't know. We'll really kind of take a refresh of our guidance numbers at the end of Q2, but we are encouraged with what we're seeing on the volume side.

Okay. I appreciate the color. Just to unpack the comments about the tough margin comp in 2Q, David, I think normally you folks are up somewhere around 150-200 basis points margins, 2Q versus 1Q. You know, given the weather that you just stepped through, it does look like you should be in a position for good year-over-year margin expansion in 2Q, even with the tough comps from the wildfire standpoint, just given the run rate in 1Q. I just want to make sure we're on the same page with you and not missing any moving pieces in the 1Q results when we think about the normal seasonality for 2Q.

Yeah, Jerry, I would say, as John, I think the outsized impact of the wildfires in Q2 is really worth noting again. I think the revenue number was $85 million-ish and probably strong flow-through on that EBITDA. If you take that out, what I would point you to, if you look back in the tables, you can see whether it's collection, disposal, recycling, renewable energy, healthcare, you can see the margin improvement in Q1. I think net of the fire headwinds, we're going to see good margin improvement Q1 and Q2, but it will be muted somewhat by that volume not repeating in the landfill line of business.

Our next question comes from the line of Brian Butler. Your line is open.

Okay. Yep, good morning. Thanks for taking the question. Yeah, overall, you know, really strong margin expansion in the quarter. You know, the only item that sort of jumped out at us in a negative way was just the magnitude of the increase in corporate expense. You know, I think you had been flagging that that was going to be up because of some technology-related investments. Just curious if the level of increase in 1Q is, you know, sort of appropriate for 2Q, or if maybe we think about that sort of moderating throughout the year.

Yeah, no, thanks for the question. Like you said, we did expect Q1 to be a tougher comp in this segment. I'll break it down into two pieces. There was a health and welfare cost aspect to an unusually favourable Q1 last year. It had some one-time benefits, and so that made the year-over-year comp a bit difficult. We also had higher annual incentive compensation and annual wage increases, along with the increased technology costs that you mentioned. Those costs are to support strategic initiatives of other that benefits other segments.

If you look at the overall performance of those other segments, I think you're seeing some of the returns on those investments. In terms of your question about kind of the cadence for the rest of the year, it... Q1 is indicative. It's a normalized rate for the remainder of the year. It's pretty flat throughout the rest of the year at that level in Q1.

Okay. Understood. Thank you. Then just, you know, John, you mentioned some surcharges for rising fuel costs. You know, do you anticipate any drag on EBITDA in 2Q given maybe potential timing differences between rising costs and surcharge implementation, or is this sort of happening in real time?

It's almost real time, Brian. There's a little bit of drag. We said 20 basis points on the margin side. Based on the way our billing cycles work, you know, you said it's about a month lag, but it's really from an EBITDA standpoint, it's not going to be anything material.

Okay. Got it. Thank you. I will turn it over.

Thank you. Our next question comes from the line of James Schumm from TD Cowen. Your question please.

Hey. Good morning, guys. just looking at the solid waste volumes up quite a bit and transfer station volumes down, what's driving that? Does that have something to do with WM Healthcare?

No, Jim. The transfer volume, honestly, that's just probably as much about the Northeast and the weather. I know that in, for instance, in the New York Metro area, there was obviously significant impact due to the weather. That's really what's driving the transfer volume, not the healthcare business.

Okay. I see. On the healthcare business, can you just give us a sense of, I know you talked about some customer credits in the past. What did that look like in Q1? What does it look like in Q2? How's that trending?

We know that customer credits, we said they peaked in Q4, which they did, and then fell off a little bit in Q1 and Q2, and then they will really reverse when we get to Q3 and Q4. The year-over-year comp becomes quite a bit different, quite a bit easier in Q3 and Q4. I think overall, Jim, as I look at the healthcare business, it's really turning out to be exactly what we hoped it would be, you know, with EBITDA improving by, you know, almost 12%. We're better than our own business plan by about 3%.

Just about everything we look at, whether it's, whether it's pricing, which we did say, you know, back last quarter that the year on the top line was largely going to be about price, not about volume. The volume would be negative, that was mostly a function of losing, I think we projected to lose three hospitals. We, you know, actually only ended up losing one, so that was a real positive for us. I think the reason we only lost one is because our customers are now getting a very payable invoice.

All the work that continues to happen, by the way, we're still working on ERP, but all of that is behind the scenes, and so it's kind of invisible to the customers, and that's a real positive for them. The ERP is progressing, but what we really wanted to make sure was that it was not visible to the customer, and then we would continue to do the technology work, the systems work, and the process work, which is ongoing. We think a lot of that will be done by the end of the year. Some of it will carry over into next year. My biggest concern was with the customer, and now the customer is getting a good bill.

That's why I think we only ended up losing one of the three hospitals. As I think about, you didn't ask about the cross-selling or synergies, I'll go ahead and as I'm talking about WMHS, cross-selling has been a positive for us. We had two big cross-selling closes for the quarter that kind of benefited. Half of it benefited Healthcare Solutions, half of it benefited Solid Waste. Pricing is right on track with where we thought it would be, that's a good thing, we think pricing continues to improve even as we get into the rest of the year. Synergies are at or even potentially ahead of plan. We're moving fleet maintenance in-house. That should be a positive on the cost line.

I think overall, we're very pleased with this. You mentioned the credit memos. I mean, look, that in large part was, in Q4, was really kind of cleaning up the mess from prior periods. That mess should, for the most part, I mean, we will always have credit memos. We have credit memos on our regular business, on the Solid Waste business. If you look at things like DSO down 14 days, that is a major change for us. If you look at past due receivables down by two-thirds, I mean, the balance has come down two-thirds over less than a year. All of those are positive signs, and we think that the Healthcare Solutions business is shaping up to be exactly what we hoped it would be when we bought it.

Great. Jim, since you brought it up, on the synergies on the path to 300, like roughly where are you now? Are you at 130, 140, or where are you?

The total number, which we think we said would be 300, I think 50 of that was cross-selling benefits. As I said, I think we're on track with that number, and you could argue that maybe we're even ahead of that number a little bit. Right now we're, you know, targeting 300 still, we think that Potentially we could end up ahead of that number, at maybe as high as, you know, 325.

Thank you. Our next question comes from the line of Faiza Alwy from Deutsche Bank. Your question please.

Yes. Hi, thank you so much. I wanted to ask what you're seeing from a recycling commodity pricing perspective. You know, just given higher oil prices, I'm curious if you're expecting, you know, an improvement in those prices, and if you could help sort of frame that for us in terms of upside. I know you're typically hedged, just want to understand, you know, potential upside to revenue, and EBITDA.

Sure. This is Tara Hemmer. We were pleased with where we exited the quarter. March was at about $69 a tonne, as you recall, what we guided to was $70 a tonne. We feel positive about where that's heading. Two things I just want to point out. One is about 80% of our commodities stay domestic between the U.S. and Canada, we do have some exposure to what's happening globally, which really is about freight disruptions given what's going on in the Middle East.

We have no qualms about demand for our products. It's really about us tracking what those freight costs might look like, that's going to be really a function of how long this goes on in the Middle East. That being said, we feel really positive about the $70 a tonne that we guided on. We'll give more of an update in Q2 on where we think it could head up or down.

All right, thank you. Then just to follow up on the healthcare cross-selling, you know, opportunities, could you frame for us, you know, how much of the, you know, improvement that you're seeing on the, you know, industrial volume side is kind of related to, you know, the cross-selling benefits? Kind of how much better are you doing relative to, like, the underlying market there?

That's a good question. I don't know the answer to that, so we'll have to get back to you on how much of that cross-selling actually impacts the industrial line of business. I can tell you that, you know, the number in terms of an annualized EBITDA benefit was about $27 million from cross-selling, but I can't, I don't know offhand how much of it was in the industrial line of business.

Thank you. Our next question comes from the line of Trevor Romeo from William Blair. Your question please.

Morning. Thank you for taking the questions here. I wanted to ask one on collection disposal pricing. I think you said both, core price and yield were coming in a little bit ahead of what you'd expected. Maybe first, you know, where are you kind of seeing pricing stick a little better than you thought? What are the drivers of that? Then if you think about, you know, CPI maybe starting to trend higher, we'll see what happens with the Middle East, and maybe it takes a while for some of your contracts to reset, you know, higher than CPI. Would you just

Ability to price, you know, if we get into a little bit of a higher inflationary environment, could we see those, you know, pricing and spread metrics sort of move up maybe moving into 2027?

Sure. I'll take the second part of your question first. On CPI, we tend to say that there's about a two quarter lag, one-two quarter lag on the adjustments for CPI. As CPI trends up, which it has a bit, that tends to be most of our resets there in terms of price, and abouts I think about 40%-45% of our total revenue is based on an index, and those indexes tend to reset on a quarterly basis, and it often takes two quarters for that reset to take place.

So any movement in CPI that we would've seen in Q1 probably won't have much of an impact on us until we get to the H2 of the year. That's the H2 of your question. The H1 of your question is really about price as a whole. Two of the lines of business that I think first off, everything was on track for us with two exceptions, which are resi and MSW, and those were actually ahead of our expectations. Resi yield was up 110 basis points versus Q1 of 2025, and yield was 6.3%. That's really strong for residential.

We've been talking about residential for quite a long time as we've really tried to pare down some of the unprofitable business there. That is certainly part of that exercise. MSW was another. MSW might have been the single most, you know, kind of impressive performer for the entire quarter, both on the volume line and on the price line. The MSW yield was 6.9%. I think what you're seeing with MSW yield, and this takes place slowly over a period of years, we talked about it last June, on Investor Day.

As you see landfill capacity slowly come offline for the industry or some of it doesn't come offline, but it moves to more center, more kind of center of the U.S. locations away from these big cities. As you see that happening, we end up in a better position because our lives, our landfill lives are a bit longer than the rest of the industry. It gives us the ability to raise price to preserve airspace, really. That's what you're seeing with MSW going up by 6.9% is a bit of cost recovery, but also airspace preservation. Those were both, you know, surprises to the upside. The rest were pretty much on track.

Okay, thanks, Jim. That is helpful color. Then I would love to get your, maybe your perspective or John Morris' perspective on AI and new technologies. Obviously, WM's been leaning into automation for a long time at this point. Just in terms of AI, you know, there's a lot of hype out there, so would love your views on, you know, whether there are any new tools you're looking at that could accelerate your efficiency going forward. Thank you.

Yeah, that's a good question. I think, obviously we've spoken to where we've embedded technology into the business, right? A lot of what we're doing on the, in the recycling facilities that Tara and team have talked about with AI and robotics and automation, what we're doing from a routing and logistics perspective with the now, call it 19,000 trucks we have on the street with the healthcare business. By the way, worth noting that a lot of the technology benefits that we've, we're seeing in our traditional collection and disposal business are yet to show up in the healthcare business, so we see some other upside there.

I would tell you, we still feel like we're in the early innings in terms of our ability to embed technology to drive not only efficiency, but if you think about things like making these jobs more palatable. Look at our turnover at 17+% . That's the lowest it's ever been. I think part of it is we're changing the scope of these roles and making them less labour-dependent, if you will. If you look at our safety results, I mentioned in my earlier comments that those are that's the best Q1 safety numbers we've posted.

Part of what's helping us do that is we're using, you know, AI as one example from a coaching perspective with, you know, 20,000+ drivers we have. As much benefit as we've seen that's showing up in our OpEx numbers and our collection and disposal margins, I think we still see a good bit of runway there that continue to accelerate those investments.

Thank you. Our next question comes from the line of Noah Kaye from Oppenheimer. Your question please.

Well, that last question took a little bit of the thunder, I'm going to continue on the same thread, John. You know, we're sitting here with risk management at, you know, 1.5% of sales, which is very good. You know, we think about that as a lagging indicator of safety performance. Just how sustainable are kind of some of these gains on safety in your view? Could we get further benefit? How should we think about that translating to kind of risk management going forward?

Well, I think, Noah, what I would tell you is, you know, this is not something that happens over a quarter or two or a year. I think what you've seen is slow and steady improvement in our safety results. To your point, you're starting to see it show up in the risk numbers over time. So while I think our recordable injury rate for the quarter was about 2.7, it was under three, which is a big milestone for us, we still see plenty of opportunity with respect to that. I think to your point, it's going to translate to our risk going forward in a positive way.

Thanks, John. Question on renewable energy segment contributions, maybe for David or Tara. Just, you had the projects come online, but how did sort of the mix of lower RIN and higher energy commodities impact results in the quarter?

Well, if you look at the quarter, we almost doubled our renewable energy production from our renewable natural gas plants, which was excellent and what we were anticipating coming out of 2025 with the plants that had come online in that year. We didn't have any new plants come online in Q1. We expect three more to come online in Q2, and then the rest of them in the H2 of the year.

Waste Management (WM) Q1 2026 Earnings Call Transcript

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