Waste Connections’ record year of acquisitions drives 11.2 percent revenue increase

Waste Connections, Inc. shared its results for the fourth quarter of 2024 and the financial outlook for the coming year.  

Q4 2024 results

Revenue in the fourth quarter totaled $2.260 billion, up from $2.036 billion in the previous years' period. The operating loss was $199.2 million, which included $601.6 million in impairments, mostly related to the early closure of a landfill, adjustments to landfill closure, post-closure costs, and $0.9 million from transaction-related expenses. 

The operating loss compares to operating income of $224.5 million in the fourth quarter of 2023, which included $172.5 million, primarily in impairments associated with adjustments to landfill closure and post-closure costs and transaction-related expenses. The net loss in the fourth quarter was $196.0 million, or $0.76 per share on a diluted basis of 258.8 million shares. In the last years' period, Waste Connections reported a net income of $126.8 million, or $0.49 per share on a diluted basis of 258.3 million shares.  

The adjusted net income in the fourth quarter was $300.6 million, or $1.16 per diluted share, up from $285.5 million, or $1.11 per diluted share, in the prior years' period. Adjusted EBITDA in the fourth quarter was $731.9 million, as compared to $656.0 million in the prior year period. 

The adjusted net income, adjusted net income per diluted share, and adjusted EBITDA, all non-GAAP measures, primarily exclude impairments and transaction-related items, as reflected in the detailed reconciliations in the attached tables.

Full year 2024 results

For the year ending on December 31, 2024, total revenue was $8.920 billion, up from $8.022 billion in the year ago period. The operating income was $1.068 billion, which included $613.0 million in impairments primarily related to the early closure of a landfill and closure and post-closure costs, $26.1 million in transaction-related expenses and $1.6 million in fair value changes to certain equity awards. 

The net income for the year ended December 31, 2024 was $617.6 million, or $2.39 per share on a diluted basis of 258.7 million shares. In the year ago period, the company reported a net income of $762.8 million, or $2.95 per share on a diluted basis of 258.1 million shares. 

Adjusted net income(b) for the year ended December 31, 2024 was $1.239 billion, or $4.79 per diluted share, as compared to $1.081 billion, or $4.19 per diluted share, in the year ago period. Adjusted EBITDA(b) for the year ended December 31, 2024 was $2.902 billion, up from $2.523 billion in the prior year period.

2025 outlook

Waste Connections also announced its outlook for 2025; the company didn't note a change in the current economic environment. The company's outlook excludes expenses of transaction-related items. The outlook provided below is forward looking, and actual results may differ materially depending on risks and uncertainties detailed at the end of this release and in our periodic filings with the U.S. Securities and Exchange Commission and the securities commissions or similar regulatory authorities in Canada. Certain components of the outlook for 2025 are subject to quarterly fluctuations.

• Revenue is estimated between $9.450 billion and $9.600 billion;
• Net income is estimated between $1.186 billion and $1.224 billion;
• Adjusted EBITDA(b) margin is estimated between 33.0 percent and 33.3 percent of revenue, up 50 to 80 basis points year over year;
• Net cash provided by operating activities is estimated between $2.500 billion and $2.575 billion;
• Capital expenditures are estimated to be between $1.200 billion and $1.225 billion, including $100 million to $150 million for RNG facilities; and
• Adjusted free cash flow is estimated between $1.300 billion and $1.350 billion.

The company thanks employee retention for a strong year

"Q4 provided a solid finish to a year of extraordinary accomplishments for Waste Connections both financially, with double-digit growth in both revenue and adjusted EBITDA, and operationally, with accelerating improvements in employee engagement and retention, along with the integration of record levels of private company acquisition activity, which totaled approximately $750 million in annualized revenues in 2024," said Ronald J. Mittelstaedt, president and chief executive officer.

"Our differentiated results in 2024 include 100 basis points adjusted EBITDA margin expansion for industry-leading margin of 32.5 percent led by 7 percent solid waste core price complemented by outsized acquisition contribution," added Mr. Mittelstaedt. "Most importantly, our continued focus on human capital resulted in multi-year lows for employee turnover, now down over one thousand basis points from 2022, setting up for continued outsized margin expansion." 

Mr. Mittelstaedt concluded, "We are extremely pleased by our industry-leading results in 2024 driven by approximately 24,000 dedicated employees whose efforts truly set us apart as we continued to execute on a proven playbook. We are well-positioned for another year of outsized growth in 2025 from price-led organic solid waste growth, with improving commodities and ongoing acquisition activity positioning us at or above the high end of our range of potential outcomes and normalized adjusted free cash flow in excess of $1.550 billion."