Waste Connections Q1 2025 Earnings Call Highlights

Waste Connections ((TSE:WCN)) has held its Q1 earnings call. Read on for the main highlights of the call.

Waste Connections, Inc. showcased a strong performance in its Q1 2025 earnings call, highlighting significant achievements in pricing, employee retention, safety, and acquisition activity. Despite facing challenges such as volume declines and commodity headwinds, the company maintained robust margins and received a Moody’s rating upgrade. The positive aspects significantly outweighed the negatives, positioning the company well for the rest of the year.

Strong Start to 2025

Waste Connections reported a robust start to 2025, driven by price-led organic solid waste growth and successful acquisition activity. This resulted in a top-to-bottom beat in Q1, with the adjusted EBITDA margin reaching an impressive 32%. The company’s strategic focus on pricing and acquisitions has clearly paid off, setting a solid foundation for the year.

Improvement in Employee Retention and Safety

The company marked its tenth consecutive quarter of improvement in employee retention, with voluntary turnover dropping to below 12%. Additionally, Waste Connections achieved record safety performance during the period, underscoring its commitment to maintaining a safe and stable work environment.

Significant Acquisition Activity

Annualized revenues from acquisitions closed to date have surpassed $125 million, including a strategic recycling facility in New Jersey. Waste Connections is on pace for another busy year in mergers and acquisitions, with high levels of seller interest indicating continued growth opportunities.

Moody’s Rating Upgrade

Reflecting its strong track record, Waste Connections received a rating upgrade from Moody’s to A3. This upgrade provides further support for the company’s continued growth and underscores its financial stability and operational excellence.

Volume and Pricing Trends

Core pricing increased to 6.9%, exceeding the company’s outlook, despite a 2.8% decline in volume. Favorable trends in volumes and pricing were observed, which increased sequentially, normalized for weather impacts, demonstrating the company’s resilience in challenging conditions.

Volume Decline

Solid waste volumes were down 2.8% in Q1, consistent with recent quarters, primarily due to weather-related impacts and the strategic shedding of poor-quality contracts. This included a 50 basis point impact from outsized weather events, indicating a strategic approach to managing volume.

Chiquita Canyon Landfill Closure Impact

The closure of the Chiquita Canyon landfill at the end of 2024 continued to impact volumes and results, contributing to the negative volume trend. This closure is a significant factor in the company’s current volume challenges.

Commodities and FX Headwinds

Lower commodity-driven revenues and foreign exchange impacts resulted in a combined 30 basis point margin drag. Year-over-year declines of about 20% in values for OCC and RINs contributed to these headwinds, reflecting broader market challenges.

Forward-Looking Guidance

During the earnings call, Waste Connections highlighted a robust start to the fiscal year, driven by price-led organic solid waste growth and strategic acquisition activities. For Q2 2025, the company projects revenue between $2.375 billion and $2.4 billion, with an adjusted EBITDA margin of approximately 32.7%. Waste Connections remains well-positioned for continued growth, leveraging its strong balance sheet and maintaining a focus on operational excellence and safety.

In summary, Waste Connections, Inc. delivered a strong Q1 2025 performance, with significant achievements in pricing, employee retention, safety, and acquisitions. Despite challenges such as volume declines and commodity headwinds, the company maintained robust margins and received a Moody’s rating upgrade. These positive aspects have positioned the company well for the rest of the year, with a promising outlook for continued growth.