Q2 2025 Waste Management Inc Earnings Call

July 29, 2025

Operator: Good day, ladies and gentlemen. Thank you for standing by. Welcome to the WM Q2 Earnings Conference Call. At this time, all participants are on listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your question has been raised. To withdraw your question, please press star 11 again. Please note that today's conference is being recorded. I will now hand the conference over to your speaker host, Ed Egl, Vice President, Investor Relations. Please go ahead.

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the WM Q2 Earnings Conference Call. At this time, all participants are on listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your question has been raised. To withdraw your question, please press star 11 again. Please note that today's conference is being recorded. I will now hand the conference over to your speaker host, Ed Egl, Vice President, Investor Relations. Please go ahead.

Operator: Welcome to the WM Second Quarter Earnings Conference Call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star-one-one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star-one-one again. Please note that today's conference is being recorded.

Ed Ako: I will now hand the conference over to your speaker host, Ed Ako, Vice President of Investellations. Please go ahead. Thank you, Olivia.

Edward Egl: Thank you, Livia. Good morning, everyone, and thank you for joining us for our second quarter 2025 earnings conference call. With me this morning are Jim Fish, Chief Executive Officer, John Morris, President and Chief Operating Officer, and Davina Rankin, Executive Vice President and Chief Financial Officer. You will 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 Davina 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 schedules of 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.

Ed Egl: Thank you, Livia. Good morning, everyone, and thank you for joining us for our second quarter 2025 earnings conference call. With me this morning are Jim Fish, Chief Executive Officer, John Morris, President and Chief Operating Officer, and Davina Rankin, Executive Vice President and Chief Financial Officer. You will 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 Davina will cover the details of the financials.

Jim Fish: Good morning, everyone. And thank you for joining us for our second quarter 2025 earnings conference call. With me this morning are Jim Fish, Chief Executive Officer, John Morris, President and Chief Operating Officer, and Devina Rankin, 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 Devina will cover the details of the financials.

Daily Sunshine, thank you for standing by. Welcome to the awm, second quarter earnings conference. Call at this time, all participants on the list and only mode after the speaker's presentation, there will be a question and answer session to ask a question during the session. You will need to press star 1, 1 on your telephone. You will then hear an automated message. Advising your hand is raised to withdraw your question. Please press star 1 1 again, please. Note that today's conference is being recorded, I will now hand the conference over to your speaker host and AKO vice president of Investigations, please go ahead.

Thank you, Olivia. Good morning, everyone. And thank you for joining us for our second quarter 2025 earnings conference call.

With me this morning, our Jim fish, chief executive officer, John Morris president and chief operating officer in the Vina Rankin. Executive Vice President, and Chief Financial Officer. You'll hear prepared comments from each of them today.

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 schedules of 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.

Unknown Executive: Before we get started, please note that we have filed a Form 8K that includes the earnings press release and is available on our website at www.wm.com. The Form 8K, the press release, and the schedules for 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-Q.

Jim will cover high-level financials and provide a strategic update. John will cover an operating overview, and Dean will cover the details of the financials.

Before we get started, please note that we file the Form 8K that includes the earnings press release and is available on our website at www.wm.com.

The Form 8K, the press release, and the schedules to the press release include important information.

Edward Egl: 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. John will discuss our results in the areas of yield and volume which, unless stated otherwise or more specifically, references to internal revenue growth or IRG from yield or volume. During the call, Jim, John, and Davina will discuss Operating EBITDA which is income from operations before depreciation and amortization. References to the WM Legacy business are total WM results excluding the WM Healthcare Solutions segment.

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. John will discuss our results in the areas of yield and volume which, unless stated otherwise or more specifically, references to internal revenue growth or IRG from yield or volume. During the call, Jim, John, and Davina will discuss Operating EBITDA which is income from operations before depreciation and amortization. References to the WM Legacy business are total WM results excluding the WM Healthcare Solutions segment.

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.

Unknown Executive: Don't want to 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 Devina will discuss Operating EBITDA, which is income from operations before depreciation and amortization. References to the WM Legacy business or total WM results excluding the WM Healthcare Solutions section. 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.

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, 10K, and form 10 cues.

You're going to discuss our results in the areas of yield and volume, which unless stated otherwise, or more specifically, references to Internal Revenue growth or RG from yield or volume.

During the call Jim John and Devina will discuss operating ibida, which is income from operations, before depreciation and amortization.

Edward Egl: Any comparisons unless otherwise stated will be with the prior year period. Net income, EPS, income from Operations and Margin, Operating EBITDA 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 the earnings press release and tables, which can be found on 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 1:00PM Eastern Time today. To hear a replay of the call, access the WM website at www.investors.wm.com.

Any comparisons unless otherwise stated will be with the prior year period. Net income, EPS, income from Operations and Margin, Operating EBITDA 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 the earnings press release and tables, which can be found on 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 1:00PM Eastern Time today. To hear a replay of the call, access the WM website at www.investors.wm.com.

References to the WM Legacy business are total. WM results. Excluding the WM Healthcare solution segment.

Unknown Executive: These adjusted measures, in addition to free cash flow, are non-GAAP measures.

Any comparisons unless otherwise stated will be with the prior year period net income EPS income from operations and margin. Operating eidon 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.

Unknown Executive: Please refer to the earnings press release and tables, which can be found on 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 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 July 29th, 2025, may no longer be accurate at the time of a recall.

These adjusted measures in addition to free cash, flow are non-gaap measures. Please refer to the earnings press release and tables, which can be found on the company's website at www.wm.com for reconciliation 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,

Edward Egl: Time-sensitive information provided during today's call, which is occurring on 29 July 2025, 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.

Time-sensitive information provided during today's call, which is occurring on 29 July 2025, 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.

To hear a replay of the call access the WM website at www.investors.com.

Unknown Executive: Any redistribution, retransmission, or rebroadcast of this call in any form without the express written consent of WM is prohibited.

Jim Fish: Now I'll turn the call over to WM CEO, Jim Fish. Thanks, Ed. And thank you all for joining us. Coming out of last month's Investor Day, we're energized by WM's strategy, which combines our unreplicable core business with new platforms for growth. Generating consistent, long-term value for years to come. It's our sustained strong results across all market cycles that we believe makes us a forever stock. The type of stock you buy and hold in debt. We continue to deliver strong results, quarter-in and quarter-out, year-in and year-out, driven by a disciplined strategy aligned with secular trends, a proven ability to further execute.

Jim Fish: Thanks Ed, and thank you all for joining us. Coming out of last month's Investor Day, we're energized by WM's strategy which combines our unreplicable core business with new platforms for growth, generating consistent long-term value for years to come. It's our sustained strong results across all market cycles that we believe makes us a forever stock, the type of stock you buy and hold indefinitely. We continue to deliver strong results quarter in and quarter out, year in and year out, driven by a disciplined strategy aligned with secular trends, a proven ability to further execute an implementation of technology to both significantly lower our cost structure and differentiate us from our competition. There's no better evidence of the power of our growth engine than our 19% Operating EBITDA growth in the second quarter.

Time-sensitive information provided during today's call, which is currently on July 29, 2025, 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 Waste Management, Inc. is prohibited. Now I'll turn the call over to WM CEO, Jim Fish.

Thanks Ed, and thank you all for joining us.

Coming out of last month's investor day, we're energized by W's strategy, which combines our unreplicable core business with new platforms for growth.

generating consistent long-term value for years to come.

It's our sustained strong results across all Market cycles, that we believe makes us a forever stock.

The type of stock you buy and hold indefinitely.

We continue to deliver strong results quarter in and quarter out year in and year out.

Jim Fish: and Implementation of Technology to both significantly lower our cost structure and differentiate us from our competition. There's no better evidence of our power, of our growth. that are 19% operating EBITDA growth in the sector. Yet again, our collection and disposal business drove the growth. Contributing more than half of the year-over-year increase in operations. Within our collection and disposal business, our focus remains...

Driven by a disciplined strategy aligned with secular Trends a proven ability to further execute.

An implementation of technology to both significantly lower our cost structure and differentiate us from our competition.

There's no better evidence of our power of our growth engine.

Jim Fish: Yet again, our collection and disposal business drove the growth, contributing more than half of the year-over-year increase in Operating EBITDA. Within our collection and disposal business, our focus remains on growing customer lifetime value, utilizing technology to optimize our cost structure, and leveraging our unreplicable asset network. Landfill items were particularly strong in the quarter, demonstrating the value of our advantaged disposal network. This is best reflected in our MSW volume growth as we continue to capture solid waste volume in key markets across our network. We also saw growth in special waste volumes, which is largely related to wildfire cleanup in California as we're uniquely positioned to be a dependable community partner during times of recovery and rebuilding. Additionally, we continue to identify opportunities to scale the core business through acquisitions.

Yet again, our collection and disposal business drove the growth, contributing more than half of the year-over-year increase in Operating EBITDA. Within our collection and disposal business, our focus remains on growing customer lifetime value, utilizing technology to optimize our cost structure, and leveraging our unreplicable asset network. Landfill items were particularly strong in the quarter, demonstrating the value of our advantaged disposal network. This is best reflected in our MSW volume growth as we continue to capture solid waste volume in key markets across our network. We also saw growth in special waste volumes, which is largely related to wildfire cleanup in California as we're uniquely positioned to be a dependable community partner during times of recovery and rebuilding. Additionally, we continue to identify opportunities to scale the core business through acquisitions.

Than our 19% operating IBA, dog. Growth in the second quarter.

Yet again our collection and Disposal business, drove the growth.

contributing more than half of the year-over-year increase in operating, I

Jim Fish: Name of event 3 4 6 29 Utilizing technology to optimize our cost structure and leveraging our un-replicable asset network. Landfill items were particularly strong in the quarter, demonstrating the value of our advantaged disposal. This is best reflected in our MSW volume growth. as we continue to capture solid waste volume in key markets across our network. We also saw growth in special waste volumes, which is largely related to wildfire cleanup in California. As we're uniquely positioned to be a dependable community partner during times of recovery and rebuilding. Additionally, we continue to identify opportunities to scale the core business through acquisitions.

Within our collection and Disposal business are focused remains on growing customer lifetime, value utilizing technology to optimize our cost structure and leveraging our unreplicable unreplicable.

Set network.

Lancel items were particularly strong in the quarter.

Demonstrating the value of our advantaged. Disposal Network.

This is best reflected in our MSW volume growth.

As we continue to capture solid waste volume in key markets across our network.

We also saw growth in special waste volumes which is largely related to Wildfire Cleanup in California.

As we're uniquely positioned to be a dependable community partner during times of recovery and rebuilding.

Jim Fish: In the quarter Completed the acquisition of a regional solid waste player in the Washington, D.C. area. Adding complementary operations. Geography, and adding a great team to our existing WM operations. We have a very robust pipeline and tuck-in opportunities continue to expect acquisition.

Jim Fish: In the quarter, we completed the acquisition of a regional solid waste player in the Washington, DC area, adding complementary operations in a key geography and adding a great team to our existing WM operations. We have a very robust pipeline of tuck-in opportunities and continue to expect acquisition spending to total more than $500 million for the year. The strength of our sustainability platform continues to distinguish the WM brand in the industry in ways that are difficult for others to replicate. For decades, we've been investing in recycling and renewable energy growth, and we accelerated that investment four years ago, aligning ourselves with key secular drivers of circularity and energy demand. The results we're generating clearly support our investment thesis as both our recycling and renewable energy segments delivered margin-enhanced growth in the quarter.

In the quarter, we completed the acquisition of a regional solid waste player in the Washington, DC area, adding complementary operations in a key geography and adding a great team to our existing WM operations. We have a very robust pipeline of tuck-in opportunities and continue to expect acquisition spending to total more than $500 million for the year. The strength of our sustainability platform continues to distinguish the WM brand in the industry in ways that are difficult for others to replicate. For decades, we've been investing in recycling and renewable energy growth, and we accelerated that investment four years ago, aligning ourselves with key secular drivers of circularity and energy demand. The results we're generating clearly support our investment thesis as both our recycling and renewable energy segments delivered margin-enhanced growth in the quarter.

Additionally, we continue to identify opportunities to scale The Core Business through Acquisitions. In the quarter, we completed the acquisition of a reasonable Solid Waste player in the Washington, DC area adding complimentary operations in a key geography and adding a great team to our existing WM operations.

Jim Fish: Total $500,000,000.00 The strength of our sustainability platform continues to distinguish the WM brand. © The Bulletproof Executive 2013 For decades, we've been investing in recycling and renewable energy growth. And we accelerated that investment four years ago, aligning ourselves... Secular Drivers of Circularity The results were generating clearly Our investment thesis, as both our recycling and renewable energy segments, delivered margin-enhanced growth. Even as recycled commodity prices declined by nearly 15% compared to last year, our recycling segment operating EBITDA grew by 17%. We believe in these high return investments and we continue to... on the remaining projects in our portfolio, having commenced operations on three new projects during this period.

We have a very robust pipeline of tucking opportunities to continue to expect, Acquisitions pending to Total more than 500 million dollars for the year.

The strength of our sustainability platform continues to distinguish the WM brand.

In the industry in ways that are difficult for others to replicate.

For decades, we've been investing in recycling and renewable energy growth.

And we accelerate that investment for years ago, aligning ourselves with key secular drivers of circularity and energy demand.

Jim Fish: Even as recycled commodity prices declined by nearly 15% compared to last year, our recycling segment Operating EBITDA grew by 17%. We believe in these high return investments and we continue to execute on the remaining projects in our portfolio, having commenced operations on three new projects during the quarter, a renewable natural gas facility in Illinois, a recycling automation project in Pennsylvania, and a new market recycling facility in Oregon. Additionally, we're making significant progress in integrating WM Healthcare Solutions into WM. We've positioned ourselves to capitalize on the ongoing growth trends in healthcare and are utilizing our advanced reporting and analytics platform along with our extensive asset network to deliver enhanced value for our customers. We've known this is going to be a needle mover for us and you're starting to see it.

Even as recycled commodity prices declined by nearly 15% compared to last year, our recycling segment Operating EBITDA grew by 17%. We believe in these high return investments and we continue to execute on the remaining projects in our portfolio, having commenced operations on three new projects during the quarter, a renewable natural gas facility in Illinois, a recycling automation project in Pennsylvania, and a new market recycling facility in Oregon. Additionally, we're making significant progress in integrating WM Healthcare Solutions into WM. We've positioned ourselves to capitalize on the ongoing growth trends in healthcare and are utilizing our advanced reporting and analytics platform along with our extensive asset network to deliver enhanced value for our customers. We've known this is going to be a needle mover for us and you're starting to see it.

The results were generating clearly support our investment thesis as both our Recycling and renewable energy. Segments delivered Martin enhanced growth in the quarter,

Even as recycled commodity prices decline by nearly 15% compared to last year, our recycling segment, operating ibida grew by 17%.

We believe in these high return Investments and we continue to execute.

Jim Fish: Recycling Automation Project in Pennsylvania. and a New Market Recycling Facility in Oregon. Additionally, we're making significant progress in integrating WM Healthcare Solutions into WM. We have positioned ourselves to capitalize on the ongoing growth trends in health care and are utilizing our advanced reporting and analytics platform. along with our extensive asset network. To deliver enhanced value for our customers. Unknown Unknown is going to be a needle mover for us. We're starting to see it in our results. Successfully identifying and capturing synergy. on Track to Achieve the Upper End of Targeted... $100 million. There is no doubt that our results to date...

On the remaining projects in our portfolio, having commenced operations on 3 new projects during the quarter. A renewable natural gas facility in Illinois.

A recycling automation project in Pennsylvania.

And a new market recycling facility in Oregon.

Additionally, we're making significant progress in integrating WM Healthcare Solutions into WM.

We've positioned ourselves to capitalize on the ongoing growth Trends in healthcare and are utilizing our Advanced reporting and analytics platform.

Along with our extensive asset Network to deliver enhanced value for our customers.

We've known this.

Jim Fish: In our results, we're successfully identifying and capturing synergies and on track to achieve the upper end of targeted synergies of $80 to 100 million in 2025. There's no doubt that our results to date support the strategic rationale of this acquisition and we see significant opportunities ahead. In closing, WM is exceptionally well positioned for future success. We've deployed a long-term strategy that's delivering and we're executing with discipline to extend our advantages. We're also investing in growth platforms that provide incremental growth, complement our scale, and widen our moat. That's what makes WM a forever stock and that's what you see in our second quarter results. Now I'll turn the call over to John to discuss our operational results. Thanks, Jim, and good morning, everyone.

In our results, we're successfully identifying and capturing synergies and on track to achieve the upper end of targeted synergies of $80 to 100 million in 2025. There's no doubt that our results to date support the strategic rationale of this acquisition and we see significant opportunities ahead. In closing, WM is exceptionally well positioned for future success. We've deployed a long-term strategy that's delivering and we're executing with discipline to extend our advantages. We're also investing in growth platforms that provide incremental growth, complement our scale, and widen our moat. That's what makes WM a forever stock and that's what you see in our second quarter results. Now I'll turn the call over to John to discuss our operational results.

It's going to be a needle mover for us, and you're starting to see it in our results.

We're successfully identifying and capturing synergies and on track to achieve the upper end of targeted. Synergies of 80 to 100 million dollars in 2025.

Jim Fish: In closing, WM is exceptionally well-positioned for future success. Employed a Long-Term Strategy That's delivering, and we're executing with discipline to extend our... We're also investing in growth platforms. Provide incremental growth, complement our scale, and widen That's what makes WMF forever strong. And that's what you see in our second quarter.

There's no doubt that our results to date support the Strategic rationale of this acquisition, and we see significant opportunities ahead.

In closing WM is exceptionally well positioned for future success.

We've deployed a long-term strategy.

That's delivering and we're executing with discipline to extend our advantages.

We're also investing in growth platforms. That provide incremental growth complement our scale and widen our moat

That's what makes WM A forever stock.

John Morris: Now I'll turn the call over to John to discuss our operation. Thanks, Jim. And good morning, everyone. The second quarter of 2025 marked another period of strong consistent performance for our business, continuing a multi year trend of steady execution and standout results. The performance we're delivering is the direct result of long-term investments we've made in technology, in infrastructure, and most importantly, in our... As we discussed at Investor Day last month, we are using the WM way, which is our framework to drive operational excellence, to build a more modern, more connected WM. And the results we've delivered in Q2 continue to reflect that strategy.

And that's what you see in our second-quarter results.

John Morris: Thanks, Jim, and good morning, everyone. The second quarter of 2025 marked another period of strong, consistent performance for our business, continuing a multi-year trend of steady execution and standout results. The performance we're delivering is the direct result of long-term investments we've made in technology, in infrastructure, and most importantly, in our people. As we discussed at Investor Day last month, we are using the WM Way, which is our framework to drive operational excellence to build a more modern, more connected WM. The results we've delivered in Q2 continue to reflect that strategy. We saw solid margin expansion and revenue growth across nearly all lines of business, with particular strength in landfill, commercial collection, and transfer operations. Our second quarter collection and disposal Operating EBITDA improved 60 basis points to 37.9%.

Jim Fish: The second quarter of 2025 marked another period of strong, consistent performance for our business, continuing a multi-year trend of steady execution and standout results. The performance we're delivering is the direct result of long-term investments we've made in technology, in infrastructure, and most importantly, in our people. As we discussed at Investor Day last month, we are using the WM Way, which is our framework to drive operational excellence to build a more modern, more connected WM. The results we've delivered in Q2 continue to reflect that strategy. We saw solid margin expansion and revenue growth across nearly all lines of business, with particular strength in landfill, commercial collection, and transfer operations. Our second quarter collection and disposal Operating EBITDA improved 60 basis points to 37.9%.

Now, I'll turn the call over to John to discuss our operational results. Thanks, Jim. And good morning, everyone.

Continuing a multi-year trend of steady execution and standout results.

The performance we're delivering is the direct result of long-term investments we've made in technology and infrastructure, and most importantly, in our people.

John Morris: We saw solid margin expansion and revenue growth across nearly all lines of business, with particular strength in landfill, commercial collection, and transfer operations. Our second quarter collection and disposal operating EBITDA improved 60 basis points to 37.9%. These results were driven by our strong landfill volumes, the team's focus on customer lifetime value, and the investments we've made in new trucks that help reduce downtime and maintenance costs. We continue to see strong pricing discipline across the board. Core price remained healthy in the second quarter at 6.4%, with collection and disposal yield improving sequentially to 4.1%. Regarding volume, second quarter collection and disposal volume increased by 1.6%, influenced by two notable events.

As we discussed at Investor Day last month, we are using the WMA, which is our framework to drive operational excellence, to build a more modern, more connected WM. The results we've delivered in Q2 continue to reflect that strategy.

We saw solid margin expansion and revenue growth at Cross, nearly all lines of business, with particular strengths in landfill, commercial collection, and transfer operations.

Jim Fish: These results were driven by our strong landfill volumes, the team's focus on customer lifetime value, and the investments we've made in new trucks that help reduce downtime and maintenance costs. We continue to see strong pricing discipline across the board. Core price remained healthy in the second quarter at 6.4% with collection and disposal yield improving sequentially to 4.1%. Regarding volume, second quarter collection and disposal volume increased by 1.6%, influenced by two notable events. Landfill volume benefited from peak contribution of wildfire cleanup, while the loss of a relatively large franchise contract had a negative effect on residential and commercial volumes. But overall, our full year volume expectations remain between 0.25% and 0.75%. Turning to operating expenses, one of the clearest indicators of the progress we're making is our ability to consistently reduce operating costs as a percentage of revenue.

These results were driven by our strong landfill volumes, the team's focus on customer lifetime value, and the investments we've made in new trucks that help reduce downtime and maintenance costs. We continue to see strong pricing discipline across the board. Core price remained healthy in the second quarter at 6.4% with collection and disposal yield improving sequentially to 4.1%. Regarding volume, second quarter collection and disposal volume increased by 1.6%, influenced by two notable events.

Our second quarter collection and Disposal operating ibida improved 60 basis points to 37.9%.

These results were driven by our strong landfill volumes. The team's focus on customer lifetime value and the investments we've made in new trucks that help reduce downtime and maintenance costs.

We continue to see strong pricing discipline across the board.

The core price remained healthy in the second quarter at 6.4% with collection and Disposal yield, improving sequentially to 4.1%.

Landfill volume benefited from peak contribution of wildfire cleanup, while the loss of a relatively large franchise contract had a negative effect on residential and commercial volumes. But overall, our full year volume expectations remain between 0.25% and 0.75%. Turning to operating expenses, one of the clearest indicators of the progress we're making is our ability to consistently reduce operating costs as a percentage of revenue.

John Morris: Landfill volume benefited from peak contribution of wildfire cleanup, while the loss of a relatively large franchise contract had a negative effect on residential and commercial volumes. But overall, our full-year volume expectations remain between 0.25% and 0.75%. Returning to operating expenses, one of the clearest indicators of the progress we're making is our ability to consistently reduce operating costs as a percentage of revenue. As we shared at Investor Day, structurally lowering our cost base isn't about temporary cuts, it's about using technology and process discipline to build a more efficient, scalable model for the long term, and our team delivered that in Q2.

Regarding volume second, quarter collection and Disposal volume increased by 1.6% influenced by 2 notables.

Landfill volume benefited from Peak contribution of wildfire cleanup, while the loss of a relatively large franchise. Contract had a negative effect on residential and Commercial volumes. But overall our full year, volume expectations remain between 0.25% and 75%.

Jim Fish: As we shared at Investor Day, structurally, lowering our cost base isn't about temporary cuts, it's about using technology and process discipline to build a more efficient, scalable model for the long term, and our team delivered that in Q2. The second quarter marks a record period in which we achieved operating expenses below 60% of revenue. This reflects the significant progress we've made in connecting the full value chain of WM from routing and fleet management to customer communication and maintenance. Our connected fleet continues to serve as a key differentiator. We achieved a 70 basis points improvement in repair and maintenance costs as a percentage of revenue in the second quarter. As real-time telematics are helping us anticipate and resolve vehicle issues faster, reduce downtime, and streamline maintenance scheduling.

As we shared at Investor Day, structurally, lowering our cost base isn't about temporary cuts, it's about using technology and process discipline to build a more efficient, scalable model for the long term, and our team delivered that in Q2. The second quarter marks a record period in which we achieved operating expenses below 60% of revenue. This reflects the significant progress we've made in connecting the full value chain of WM from routing and fleet management to customer communication and maintenance. Our connected fleet continues to serve as a key differentiator. We achieved a 70 basis points improvement in repair and maintenance costs as a percentage of revenue in the second quarter. As real-time telematics are helping us anticipate and resolve vehicle issues faster, reduce downtime, and streamline maintenance scheduling.

Turning to operating expenses 1 of the clearest indicators of the progress, we're making is our ability to consistently reduce operating costs as a percentage of Revenue.

John Morris: The second quarter marks a record period in which we achieved operating expenses below 60% of revenue. This reflects the significant progress we've made in connecting the full value chain of WM from routing and fleet management to customer communication and maintenance. Our connected fleet continues to serve as a key differentiator. We achieved a 70 basis point improvement in repair and maintenance costs as a percentage of revenue in the second quarter, as real-time telematics are helping us anticipate and resolve vehicle issues faster, reduce downtime, and streamline maintenance schedules. This allows us to provide great service to our customers by helping to make sure each route is run as safely, efficiently, and predictably as possible.

As we shared investor day, structurally, lowering our cost base isn't about temporary Cuts. It's about using technology and process discipline to build a more efficient. Scalable model for the long term and our team delivered that in Q2.

The second quarter marks a record period in which we achieved operating expenses below 60% of Revenue.

This reflects the significant progress, we've made in connecting the full value chain of WM.

From routing and Fleet Management to customer communication and maintenance.

Jim Fish: This allows us to provide great service to our customers by helping to make sure each route is run as safely, efficiently, and predictably as possible. Looking ahead we believe we're still in the early innings of what this integrated technology can do for our operations, and we're excited about what's to come. As always, none of this happens without our people. Turnover improved 370 basis points this quarter to 18.8% for drivers and technicians combined. And it's no coincidence that we're seeing parallel improvements in safety, service, and operational consistency. We focused on modernizing the work environment, whether it's upgrading maintenance shops to be digitally enabled, refining coaching programs for our drivers, or building pathways for new talent to grow in their careers with us. And it's making a difference.

This allows us to provide great service to our customers by helping to make sure each route is run as safely, efficiently, and predictably as possible. Looking ahead we believe we're still in the early innings of what this integrated technology can do for our operations, and we're excited about what's to come. As always, none of this happens without our people. Turnover improved 370 basis points this quarter to 18.8% for drivers and technicians combined. And it's no coincidence that we're seeing parallel improvements in safety, service, and operational consistency. We focused on modernizing the work environment, whether it's upgrading maintenance shops to be digitally enabled, refining coaching programs for our drivers, or building pathways for new talent to grow in their careers with us. And it's making a difference.

Our connected Fleet continues to serve as a key. Differentiator, we achieved a 70 basis, point Improvement, and repair maintenance costs, as a percent of percentage of Revenue. And the second quarter as real-time telematics are helping us, anticipate, and resolve vehicle issues, faster, reduce downtime and streamline maintenance scheduling.

John Morris: Looking ahead, we believe we're still in the early innings of what this integrated technology can do for our operations and we're excited about what's to come.

This allows us to provide great service to our customers by helping to make sure each route is run as safely and predictably as possible.

John Morris: As always, none of this happens without our people. Turno improved 370 basis points this quarter to 18.8% for drivers and technicians combined, and it's no coincidence that we're seeing parallel improvements in safety, service, and operational consistency. We focused on modernizing the work environment, whether it's upgrading maintenance shops to be digitally enabled, refining coaching programs for our drivers, or building pathways for new talent to grow in their careers with us. And it's making a difference. We're attracting the next generation of skilled workers by showing them that WM is a place where innovation and impact.

Looking ahead. We believe, we're still in the early Innings of what this integrated technology can do for our operations. And we're excited about what's to come.

As always none of this happens. Without our people

Jim Fish: We're attracting the next generation of skilled workers by showing them that WM is a place where innovation and impact meet. To wrap up, our Q2 results reinforce the effectiveness of our long-term strategy. WM is not just operating from a position of strength; we're actively expanding our lead through focused execution and long-term thinking. I want to thank our team members for their dedication, their innovation, and their commitment to doing the job right every day. Their efforts are creating lasting value for customers, communities, and shareholders. With that, I'll turn the call over to Davina to walk through our financial results in more detail.

We're attracting the next generation of skilled workers by showing them that WM is a place where innovation and impact meet. To wrap up, our Q2 results reinforce the effectiveness of our long-term strategy. WM is not just operating from a position of strength; we're actively expanding our lead through focused execution and long-term thinking. I want to thank our team members for their dedication, their innovation, and their commitment to doing the job right every day. Their efforts are creating lasting value for customers, communities, and shareholders. With that, I'll turn the call over to Davina to walk through our financial results in more detail.

John Morris: To wrap up, our Q2 results reinforce the effectiveness of our long-term strategy. WM is not just operating from a position of strength, we're actively expanding our lead through focused execution and long-term... I want to thank our team members for their dedication, their innovation, and their commitment to doing the job right every day. Their efforts are creating lasting value for customers, communities, and shareholders.

Turno improved 370 basis points this quarter to 18.8% for drivers and technicians combined, and it's no coincidence that we're seeing parallel improvements in safety, service, and operational consistency. We focused on modernizing the work environment, whether it's upgrading maintenance shops to be digitally enabled, refining coaching programs for our drivers, or building pathways for new talent to grow in their careers with us. It's making a difference. We're attracting the next generation of skilled workers by showing them that WM is a place where innovation and impact meet.

To wrap up our Q2 results, reinforced the effectiveness of our long-term strategy.

WM is not just operating from a position of strength. We're actively expanding our lead through focused execution and long-term thinking.

Devina Rankin: And with that, I'll turn the call over to Devina to walk through our financial results in more detail. Thanks, John, and good morning. In the second quarter, we drove profitable growth in each segment of our business and delivered total company operating EBITDA margin of almost 30%, quickly approaching historical best levels despite the known headwinds from the acquisition of the healthcare solutions business. This result was achieved because our legacy business continues to deliver margin expansion and because we are quickly improving the cost structure of healthcare solutions. WM's legacy business delivered 130 basis points of margin expansion in the quarter, resulting in an operating EBITDA margin of 31.3%.

Devina Rankin: Thanks, John, and good morning. In the second quarter we drove profitable growth in each segment of our business and delivered total company Operating EBITDA margin of almost 30%, quickly approaching historical best levels despite the known headwinds from the acquisition of the Healthcare Solutions business. This result was achieved because our legacy business continues to deliver margin expansion and because we are quickly improving the cost structure of healthcare solutions. WM's legacy business delivered 130 basis points of margin expansion in the quarter, resulting in Operating EBITDA margin of 31.3%. The improvement was driven by strong landfill volumes, the growth of our sustainability business, and our continued focus on improving the price to cost spread in the collection and disposal business. These positives were slightly offset by the expiration of alternative fuel tax credits, which had a negative 30 basis point impact for the quarter.

I want to thank our team members for their dedication, their innovation, and their commitment to doing the job right every day. Their efforts are creating lasting value for customers, communities, and shareholders. And with that, I'll turn the call over to Devina to walk through our financial results in more detail.

Thanks John and good morning in the second quarter. We drove profitable growth in each segment of our business and delivered total company operating IBA doll margin of almost 30% quickly approaching historical best levels despite the known headwind from the acquisition of the healthcare Solutions business.

WM's legacy business delivered 130 basis points of margin expansion in the quarter, resulting in Operating EBITDA margin of 31.3%. The improvement was driven by strong landfill volumes, the growth of our sustainability business, and our continued focus on improving the price to cost spread in the collection and disposal business. These positives were slightly offset by the expiration of alternative fuel tax credits, which had a negative 30 basis point impact for the quarter.

This result was achieved because our legacy business continues to deliver margin expansion and because we are quickly improving the cost structure of Healthcare Solutions.

Devina Rankin: The improvement was driven by strong landfill volumes, the growth of our sustainability business. and our continued focus on improving the price-to-cost spread in the collection and disposal business. These positives were slightly offset by the expiration of alternative fuel tax credits, which had a negative 30 basis point impact for the quarter. The key takeaway from the Margin Bridge is that strong contributions from our core solid waste business and the results of our sustainability growth investments provided meaningful margin uplifts. Turning to WM Healthcare Solutions, our focus on optimizing this business, including through Synergy Capture, has led to a 190 basis point improvement in operating EBITDA margins since the acquisition.

WMS Legacy business delivered 130 basis points of margin expansion. In the quarter resulting in operating ibitta margin of 31.3%.

The Improvement was driven by strong landfill volumes, the growth of our sustainability business.

And our continued focus on improving the cost of price to cost spread in the collection and Disposal business.

Devina Rankin: The key takeaway from the margin bridge is that strong contributions from our core solid waste business and the results of our sustainability growth investments provided meaningful margin uplift. Turning to WM Healthcare Solutions, our focus on optimizing this business, including through Synergy Capture, has led to a 190 basis points improvement in operating EBITDA margin since the acquisition. This progress has been particularly swift in reducing SG&A costs as we work to optimize the sales and back office functions of the combined organization. We're pleased with our progress, and as Jim noted, we're on track to achieve the high end of our full year Synergy expectations of between $80 and 100 million in 2025. Moving to our cash flow results, operating cash flow was $2.75 billion in H1 2025, an increase of 9% compared to the same period in 2024.

The key takeaway from the margin bridge is that strong contributions from our core solid waste business and the results of our sustainability growth investments provided meaningful margin uplift. Turning to WM Healthcare Solutions, our focus on optimizing this business, including through Synergy Capture, has led to a 190 basis points improvement in operating EBITDA margin since the acquisition. This progress has been particularly swift in reducing SG&A costs as we work to optimize the sales and back office functions of the combined organization.

These positives were slightly offset by the expiration of alternative fuel tax credits, which had a negative -30 basis point impact for the quarter.

From our core Solid Waste business and the results of our sustainability growth Investments provided meaningful margin uplift.

Devina Rankin: This progress has been particularly swift in reducing SG&A costs as we work to optimize the sales and back office functions of the combined organization. We're pleased with our progress. And as Jim noted, we're on track to achieve the high end of our full year synergy expectations of between 80 and $100 million in 2025.

Turning to WM Healthcare Solutions. Our focus on optimizing this business including through Synergy capture has led to a 190 basis. Point Improvement in operating IBA margin since the acquisition.

We're pleased with our progress, and as Jim noted, we're on track to achieve the high end of our full year Synergy expectations of between $80 and 100 million in 2025. Moving to our cash flow results, operating cash flow was $2.75 billion in H1 2025, an increase of 9% compared to the same period in 2024.

This progress has been particularly Swift in reducing sgna costs as we work to optimize the sales and back office functions of the combined organization.

Devina Rankin: Moving to our cash flow results. Operating cash flow was $2.75 billion in the first half of 2025, an increase of 9% compared to the same period in 2024. The increase was driven by our strong earnings growth, partially upset by higher cash interest primarily due to the additional debt issued last year to fund the acquisition of Stericycle. Through the first six months of the year, capital expenditures totaled $1.56 billion. Capital Spending to Support the Business and our Sustainability Growth Investments are both tracking in line with our expectations. Our capital expenditures are typically more heavily weighted toward the back half of the year.

We're pleased with our progress and as Jim noted, we're on track to achieve the high-end of our full year, Synergy expectations of between 80 and 100 million dollars in 2025.

Moving to our cash flow results.

Devina Rankin: The increase was driven by our strong earnings growth, partially offset by higher cash interest, primarily due to the additional debt issued last year to fund the acquisition of Stericycle. Through the first six months of the year, capital expenditures totaled $1.56 billion. Capital spending to support the business and our sustainability growth investments are both tracking in line with our expectations. Our capital expenditures are typically more heavily weighted toward the back half of the year, but in 2025 we successfully pulled forward some of our truck deliveries, which has provided benefits to the business and our operating expense margins. Putting this together, Free Cash Flow in the first half of the year was $1.29 billion and we're on track to achieve our upwardly revised Free Cash Flow guidance for the year.

The increase was driven by our strong earnings growth, partially offset by higher cash interest, primarily due to the additional debt issued last year to fund the acquisition of Stericycle. Through the first six months of the year, capital expenditures totaled $1.56 billion. Capital spending to support the business and our sustainability growth investments are both tracking in line with our expectations. Our capital expenditures are typically more heavily weighted toward the back half of the year, but in 2025 we successfully pulled forward some of our truck deliveries, which has provided benefits to the business and our operating expense margins. Putting this together, Free Cash Flow in the first half of the year was $1.29 billion and we're on track to achieve our upwardly revised Free Cash Flow guidance for the year.

Operating cash flow was 2.75 billion dollars in the first half of 2025, an increase of 9% compared to the same period in 2024.

The increase was driven by our strong earnings growth.

Partially upset by higher cash interest, primarily due to the additional debt issued last year to fund the acquisition of Steros Cycle.

Through the first six months of the year, capital expenditures totaled $1.56 billion.

Capital spending to support the business and our sustainability growth investments is both tracking in line with our expectations.

Devina Rankin: But in 2025, we successfully pulled forward some of our track delivery, which has provided benefits to the business and our operating expense margin. Putting this together, free cash flow in the first half of the year was $1.29 billion. And we're on track to achieve our upwardly revised free cash flow guidance for the year. Through the first two quarters of 2025, we returned $669 million to shareholders in dividends and allocated $378 million to solid waste acquisition. Our leverage ratio at the end of the quarter was 3.5 times. We remain focused on quickly getting back to targeted leverage levels through a combination of earnings growth and debt reduction, and we currently project we will achieve our target in the first half of 2026.

Our Capital expenditures are typically more heavily weighted toward the back half of the year. But in 2025, we successfully pulled forward, some of our track deliveries, which has provided benefits to the business and our operating expense margins.

Devina Rankin: Through the first two quarters of 2025, we returned $669 million to shareholders in dividends and allocated $378 million to solid waste acquisitions. Our leverage ratio at the end of the quarter was 3.5x. We remain focused on quickly getting back to targeted leverage levels through a combination of earnings growth and debt reduction, and we currently project we will achieve our target in H1 2026. With H1 2025 complete and confidence in our continued ability to deliver on strategic priorities, we're confirming and updating our 2025 guidance. We've always said that Operating EBITDA and Free Cash Flow are the two best measures of performance, and we're positioned to deliver results that need meet or exceed our initial guidance for each of these measures.

Through the first two quarters of 2025, we returned $669 million to shareholders in dividends and allocated $378 million to solid waste acquisitions. Our leverage ratio at the end of the quarter was 3.5x. We remain focused on quickly getting back to targeted leverage levels through a combination of earnings growth and debt reduction, and we currently project we will achieve our target in H1 2026. With H1 2025 complete and confidence in our continued ability to deliver on strategic priorities, we're confirming and updating our 2025 guidance. We've always said that Operating EBITDA and Free Cash Flow are the two best measures of performance, and we're positioned to deliver results that need meet or exceed our initial guidance for each of these measures.

Putting this together, free cash flow in the first half of the year was $1.29 billion, and we're on track to achieve our upwardly revised free cash flow guidance for the year.

Through the first two quarters of 2025, we returned $669 million to shareholders in dividends and allocated $378 million to Solid Waste acquisitions.

Our leverage ratio, at the end of the quarter was 3.5 times.

Devina Rankin: With half of 2025 complete and confidence in our continued ability to deliver on strategic priorities, we're confirming and updating our 2025 guidance. We've always said that operating EBITDA and free cash flow are the two best measures of performance, and we're positioned to deliver results that meet or exceed our initial guidance for each of these measures in 2025. We're affirming the midpoint of operating EBITDA guidance of $7.55 billion and increasing our expectations for 2025 free cash flow to between $2.8 and $2.9 billion. Revenue for the year will be about 1% below our initial expectations due to a couple of factors outside of our control, recycled commodity prices and the harsh winter weather of the first quarter.

We remain focused on quickly getting back to targeted leverage levels through a combination of earnings growth and debt reduction. We currently project we will achieve our target in the first half of 2026.

With half of 2025, complete and confidence. In our continued ability to deliver on strategic priorities. We're confirming and updating our 2025 guidance.

We've always said that operating Ibiza and free cash flow are the 2 best measures of performance.

Devina Rankin: In 2025, we're affirming the midpoint of Operating EBITDA guidance of $7.55 billion and increasing our expectations for 2025 free cash flow to between $2.8 and $2.9 billion. Revenue for the year will be about 1% below our initial expectations due to a couple of factors outside of our control, recycled commodity prices, and the harsh winter weather of the first quarter. Our team's focus on optimizing what we control, delivering on our top strategic priorities, and reducing our cost to serve, position us to overcome this small revenue headwind and deliver more than 15% EBITDA growth in the year. Our strong collection and disposal operating expense margin, SG&A, synergy capture in the healthcare solutions business at the high end of our initial outlook, and lower recycled commodity prices are expected to position us to generate even stronger Operating EBITDA margins in 2025 than we initially expected.

In 2025, we're affirming the midpoint of Operating EBITDA guidance of $7.55 billion and increasing our expectations for 2025 free cash flow to between $2.8 and $2.9 billion. Revenue for the year will be about 1% below our initial expectations due to a couple of factors outside of our control, recycled commodity prices, and the harsh winter weather of the first quarter.

And we're positioned to deliver results that meet or exceed our initial guidance for each of these measures in 2025.

We're affirming the midpoint of operating Eva dog guidance of 7.55 billion dollars and increasing our expectations for 2025 free cash flow to between 2.8 and 2.9 billion dollars.

Our team's focus on optimizing what we control, delivering on our top strategic priorities, and reducing our cost to serve, position us to overcome this small revenue headwind and deliver more than 15% EBITDA growth in the year. Our strong collection and disposal operating expense margin, SG&A, synergy capture in the healthcare solutions business at the high end of our initial outlook, and lower recycled commodity prices are expected to position us to generate even stronger Operating EBITDA margins in 2025 than we initially expected.

Devina Rankin: Our team's focus on optimizing what we control, delivering on our top strategic priorities, and reducing our cost to serve position us to overcome this small revenue headwind and deliver more than 15% EBITDA growth in the year. Our strong collection and disposal operating expense margin, SG&A's synergy capture in the healthcare solutions business at the high end of our initial outlook, and lower recycled commodity prices are expected to position us to generate even stronger operating EBITDA margins in 2025 than we initially expected. And so we are also increasing our full year expectations for operating EBITDA margin by 40 basis points at the midpoint.

Revenue for the year will be about 1% below our initial expectations due to a couple of factors outside of our control: recycled commodity prices and the harsh winter weather of the first quarter.

Our teams focus on optimizing, what we control delivering on our top, strategic priorities, and reducing our cost to serve position us to overcome this. Small revenue headwind and deliver more than 15% ebiz dog. Growth in the year

Devina Rankin: We are also increasing our full year expectations for Operating EBITDA margin by 40 basis points at the midpoint. We're pleased with our performance in the first half of the year, which positions us to achieve another year of strong earnings margin and cash flow growth. In closing, I want to extend my appreciation to the entire WM team. The strength of our results is a direct reflection of their commitment to our customers and our community. It's their continued focus that positions us for success throughout the rest of the year. With that, Livia, let's open the line for questions.

We are also increasing our full year expectations for Operating EBITDA margin by 40 basis points at the midpoint. We're pleased with our performance in the first half of the year, which positions us to achieve another year of strong earnings margin and cash flow growth. In closing, I want to extend my appreciation to the entire WM team. The strength of our results is a direct reflection of their commitment to our customers and our community. It's their continued focus that positions us for success throughout the rest of the year. With that, Livia, let's open the line for questions.

Our strong collection and Disposal operating expense margin sgna. Synergy capture in the healthcare Solutions business at the high end of our initial Outlook. And lower recycled commodity, prices are expected us to position our expected to position us to generate even stronger. Operating ibid down margins in 2025 than we initially expected.

Devina Rankin: We're pleased with our performance in the first half of the year, which positions us to achieve another year of strong earnings, margin, and cash flow growth.

and so we are also increasing our full year expectations for operating ibida margin by 40 basis points at the midpoint,

Devina Rankin: In closing, I want to extend my appreciation to the entire WM team. The strength of our results is a direct reflection of their commitment to our customers and our community, and it's their continued focus that positions us for success throughout the rest of the year.

we're pleased with our performance in the first half of the year, which positions us to achieve another year of strong, earnings margin and cash flow growth.

In closing, I want to extend my appreciation to the entire WM team. The strength of our results is a direct reflection of their commitment to our customers.

Operator: With that, Livia, let's open the line for questions. Thank you. To ask a question at this time, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, simply press star 11 again. We stand by while we compile the Q&A roster.

And our community and it's their continued Focus. That positions us for Success throughout the rest of the year.

Operator: Thank you. To ask a question at this time, you will need to press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, simply press star 1 1 again, please. Stand by while we compile the Q&A roster. And our first question coming from the lineup, Brian Bergmeier with Citi. Your line is now open.

With that, Livia, let's open the line for questions.

Thank you.

Just a question. At this time, you will need to press *1, 1, 1 on your telephone and wait for your name to be announced.

To enjoy your questions. Simply press star, 1 1 1 again.

Bryan Burgmeier: And our first question coming from the line of Bryan Burgmeier with City, your line is now open. Good morning. Thank you for taking the questions.

Please stand by while we compile Kiana roster.

Brian Bergmeier: Good morning. Thank you for taking the questions. You know, one for your Davina. You know, just kind of thinking about the cadence in the back half of the year. You know, last year we talked about WM maybe striving for like a 31% peak margin in Q3. Is that sort of back on the table for this year or should we think about margins being maybe closer to flattish year on year similar Q2? I know the Stericycle synergies are going to continue to ramp. So just trying to think about that cadence in Q3 and Q4.

Bryan Burgmeier: Good morning. Thank you for taking the questions. You know, one for your Davina. You know, just kind of thinking about the cadence in the back half of the year. You know, last year we talked about WM maybe striving for like a 31% peak margin in Q3. Is that sort of back on the table for this year or should we think about margins being maybe closer to flattish year on year similar Q2? I know the Stericycle synergies are going to continue to ramp. So just trying to think about that cadence in Q3 and Q4.

Devina Rankin: You know, one for you, Devina, you know, just kind of thinking about the cadence in the back half of the year, you know, last year, we talked about WM, maybe striving for like a 31% peak margin in 3Q. Is that sort of back on the table for this year? Or should we think about margins being maybe closer to flat-ish year on year, similar to 2Q? I know the stair cycle synergies are going to continue to ramp, so just trying to think about that cadence in 3Q and 4Q.

Devina Rankin: Yeah, it's a great question. What I would say is that when you normalize for the alternative fuel tax credit, margin expansion was 120 basis points in the first half in the legacy business, and that exceeds what we were expecting. We've always talked about 50 to 100 basis points of margin expansion in collection and disposal being the target, and to have exceeded that in the first half of the year really makes us bullish about margins for the back half of the year in the collection and disposal business. We're projecting that that will be about 110 basis points for the full year. And some of that has to do with the landfill volume impact in Q2. That doesn't repeat in the second half.

Devina Rankin: Yeah, it's a great question. What I would say is that when you normalize for the alternative fuel tax credit, margin expansion was 120 basis points in the first half in the legacy business. And that exceeds what we were expecting. We've always talked about 50 to 100 basis points of margin expansion in collection and disposal being the target. And to have exceeded that in the first half of the year, really makes us bullish about margins for the back half of the year in the collection and disposal business. We're projecting that that will be about 110 basis points for the full year.

Good morning. Thank you for taking the questions. Um, you know, 1 for you deina. You know, just kind of thinking about the, the Cadence in the back half the year. Um, you know, last year we talked about WM maybe striving for, like a 31% peak margin in in 3Q. Um, is, is that sort of back on the table for this year? Or should we think about margins being maybe closer to flattish year on year, similar to queue? Um, I know, I know the, the stair cycle synergies are going to continue to ramp. So, just trying to think about that Cadence in 3 q and 4 q.

Devina Rankin: And some of that has to do with the landfill volume impact in 2Q that doesn't repeat in the second half. In terms of the specific margins, it's really important to focus in on the fact that the healthcare solutions business had 140 basis point headwind to consolidated margins in the quarter. We think that that normalizes and starts to reduce. As we ramp the synergy contributions to the business, as well as just the base business performance, which we are still optimistic about. So all in all, I would say we're going to have less of less pressure from the healthcare solutions business in the second half of the year than in the first half of the year by probably 10 to 20 basis points.

Devina Rankin: In terms of the specific margins, it's really important to focus in on the fact that the healthcare solutions business had 140 basis point headwind to consolidated margins in the quarter. We think that that normalizes and starts to reduce as we ramp the synergy contributions to the business as well as just the base business performance, which we are still optimistic about. So all in all, I would say we're going to have less pressure from the healthcare solutions business in the second half of the year than in the first half of the year by probably 10 to 20 basis points. And then the collection and disposal business will be about 10 basis points less in the back half of the year than it was in the first half of the year.

In terms of the specific margins, it's really important to focus in on the fact that the healthcare solutions business had 140 basis point headwind to consolidated margins in the quarter. We think that that normalizes and starts to reduce as we ramp the synergy contributions to the business as well as just the base business performance, which we are still optimistic about. So all in all, I would say we're going to have less pressure from the healthcare solutions business in the second half of the year than in the first half of the year by probably 10 to 20 basis points. And then the collection and disposal business will be about 10 basis points less in the back half of the year than it was in the first half of the year.

Yeah it's a great question. What I would say is that when you normalize for the alternative fuel tax credits, um margin expansion was 120 basis points in the first half in the Legacy business and that exceeds what we were expecting. We've always talked about 50 to 100 basis points of margin expansion, in collection and Disposal being the Target and um, to have exceeded that in the first half of the year really makes us bullish about margins for the back, half of the year and the collection and Disposal business. We're projecting that that will be about 110 basis points for the full year and some of that has to do with the landfill volume impact in 2 queue that doesn't repeat in the second half. Um in terms of the specific margins, it's really important to focus in on the fact that the healthcare Solutions business had 140 basis points. Um headwind to Consolidated margins.

Devina Rankin: And then the collection and disposal business will be about 10 basis points less in the back half of the year than it was in the first half of the year. Got it.

Brian Bergmeier: Got it, got it. Appreciate that detail. Then maybe just a follow-up on your volume expectations for the year. Are we still kind of maybe looking in the range of 50 basis points growth year on year? I know Q1 was kind of weak, but then Q2 had kind of a benefit from the wildfire cleanup. But you also shed a contract and underlying construction activity probably isn't great. So just curious what your updated expectations are there. Thank you. I'll turn it over.

Bryan Burgmeier: Got it, got it. Appreciate that detail. Then maybe just a follow-up on your volume expectations for the year. Are we still kind of maybe looking in the range of 50 basis points growth year on year? I know Q1 was kind of weak, but then Q2 had kind of a benefit from the wildfire cleanup. But you also shed a contract and underlying construction activity probably isn't great. So just curious what your updated expectations are there. Thank you. I'll turn it over.

In uh, the quarter, we think that that normalizes and starts to reduce as we ramp the Synergy contributions to the business as well as just the base business performance, which we are are still optimistic about. Um, so all in all I would say we're going to have less of, um, pre less pressure from the healthcare Solutions business in the second half of the year than in the first half of the year, um, by probably 10 to 20 basis points. And then, uh, the collection and Disposal business will be about 10 basis points, Less in the back, half of the year than it was in the first half of the year.

Unknown Executive: Appreciate that detail.

Unknown Executive: And then maybe just a follow up on your volume expectations for the year. Are we still kind of maybe looking in the range of 50 basis points of growth year on year? And, you know, I know 1Q was kind of weak, but then 2Q had kind of a benefit from the wildfire cleanup, but you also shed a contract and underlying construction activity probably isn't great. So just curious what your updated expectations are there.

Unknown Executive: Thank you. I'll turn it over. Yeah, Brian, I think you're right. I mentioned that in my prepared remarks. There was a little bit of the headwind in Q1 and then obviously the some of the landfill volumes in Q2 and then the one franchise agreement I mentioned in my prepared remarks. So netting that all out that we said between 0.25 and 0.75. So your number 0.5 is right in the middle of where we expect. Thank you.

Jim Fish: Yes, Brian, I think you're right. I mentioned that in my prepared remarks. There was a little bit of the headwind in Q1 and then obviously some of the landfill volumes in Q2 and then the one franchise agreement I mentioned in my prepared remarks. So, netting that all out, that we said between 0.25 and 0.75. So your number of 0.5 is right in the middle of where we expect to be.

Appreciate that detail. Um, and and then maybe just a follow-up on on your volume expectations for the year. Are we still kind of maybe looking in the range of 50 basis points of growth year on year? You know, I I know 1 Q was kind of weak but then 2 Q had kind of a benefit from the Wildfire cleanup. But you also shed a contract and underlying construction activity probably is a great. So, just curious what your updated expectations are there. Thank you, I'll turn it over. Yeah, Brian, I think you're right. I mentioned that my prepared remarks. There was a little bit of the headwind in q1, and then obviously, the, the, the some of the landfill volumes in Q2, uh, and then the 1 franchises. So your number of 0.5 is right in the middle of where we expect to be.

Operator: Thank you. Our next question coming from the lineup, Toni Kaplan with Morgan Stanley. Your line is now open.

Toni Kaplan: And our next question coming from the lineup, Toni Kaplan with Morgan Stanley. Your line is now open. Thanks so much. I wanted to ask about volume as well. Really strong performance in the quarter. I know you called out wildfires, but outside of that, you know, maybe could you just give some incremental color on the strength and volume that you're seeing? And I know you mentioned the on the flip side, the large resi loss, maybe sounded perhaps like a planned strategic exit. Just any more color on on that loss as well.

Toni Kaplan: Thanks so much. I wanted to ask about volume as well. Really strong performance in the quarter. I know you called out wildfires, but outside of that, maybe could you just give some incremental color on the strength in volume that you're seeing. And I know you mentioned on the flip side, the large resi loss maybe sounded perhaps like a planned strategic exit. Just any more color on that loss as well.

Thank you. And our next question coming from the lineup, Tony Kaplan with Morgan. Stanley yelling us now open.

Unknown Executive: Yeah, I'll let John touch on the resi piece. But I will tell you that volume was encouraging for us. And when you look at June being the last month of the quarter, June was the strongest month of the quarter from a volume standpoint, really kind of across the board. June was the strongest month of the quarter. Volume for the quarter was particularly strong in the MSW waste stream and C&D. And so when we talk about fire volume, that really was limited to our special waste. Waste Stream, not MSW or C&D. And so when we look at MSW and C&D being strong, that's encouraging.

Jim Fish: I'll let John touch on the resi piece. But I will tell you that volume was encouraging for us. And when you look at June being the last month of the quarter, June was the strongest month of the quarter from a volume standpoint, really kind of across the board. June was the strongest month for the quarter. Volume for the quarter was particularly strong in the MSW waste stream and C&D. And so when we talk about fire volume, that really was limited to our special waste waste stream, not MSW or C&D. And so when we look at MSW and C&D being strong, that's encouraging. And then when you look at the collection lines of business, you know, we did have a bit of an impact in commercial from that contract that John will talk about.

Thanks so much. Um, I wanted to ask about volume as well. Really strong performance in the quarter. I know you called out wildfires, but outside of that, you know, maybe could you just give some incremental color on the strengths and volume that you're seeing? And I know you mentioned, on the flip side, the large residential loss, maybe it sounded, perhaps like a planned strategic exit. Um, just any more color on that loss as well.

I'll I'll let John touch on the rosie piece, um, but I will tell you that that volume was uh, encouraging for us. And and when you look at June, uh, being the last month with a quarter, June was the strongest month of the quarter from a volume standpoint, really kind of across the board. June, was the strongest month for the quarter, uh, volume for uh, the quarter was was particularly strong in the mwa stream and c and d and and so when we talk about fire volume that that really was limited to our special waste

Unknown Executive: And then when you look at the collection lines of business... We did have a bit of an impact in commercial from that contract that John will talk about, but our roll-off industrial line of business has been weak on the volume front for quite some time, for probably a couple of years now, and it's improved pretty significantly. Still it was negative for the quarter, but quite a bit less negative for the quarter than previous quarters, so we're encouraged by that. All of that would start to tell us that 2025, first of all, we don't see a downturn in 2025.

Uh, waste stream. Uh, not MSW or c and d. And and so when we look at MSW and C and D, being strong, that's encouraging. And then when you look at the collection lines of business,

Jim Fish: But our roll-off industrial line of business has been weak on the volume front for quite some time, for probably a couple of years now. And it's improved pretty significantly. Still was negative for the quarter, but quite a bit less negative for the quarter than previous quarters. So we're encouraged by that. All of that would start to tell us that 2025, I mean, first of all, we don't see a downturn in 2025. We see that the economy seemed to be reasonable at this point. I wouldn't say it's a space shuttle, but it seems to be pretty reasonable. And those waste streams that are predictive of that are performing pretty well, I think. Toni, specific on the franchise loss in Florida, which was fairly significant to put in context.

But our roll-off industrial line of business has been weak on the volume front for quite some time, for probably a couple of years now. And it's improved pretty significantly. Still was negative for the quarter, but quite a bit less negative for the quarter than previous quarters. So we're encouraged by that. All of that would start to tell us that 2025, I mean, first of all, we don't see a downturn in 2025. We see that the economy seemed to be reasonable at this point. I wouldn't say it's a space shuttle, but it seems to be pretty reasonable. And those waste streams that are predictive of that are performing pretty well,

Unknown Executive: We see that the economy seems to be... Well, I think it's pretty reasonable at this point. I wouldn't say it's a space shuttle, but it seems to be pretty reasonable. And those waste streams that are predictive of that are performing well. I think, Toni, specific on the franchise loss in Florida, which was fairly significant, to put in context, it was about 185 basis points of the volume loss in residential, and about 35 basis points. So you net those two out and you think about our commentary about us still being confident in our volume projection for the full year.

Um you know we did have a bit of an impact in commercial from that contract that John will talk about. But our role off uh industrial line of business has been weak uh, on the volume front for quite some time for probably a couple of years now and it's improved. Pretty significantly. Still it was negative uh for the quarter but but quite a bit less negative for the quarter than uh than previous quarters. So we're encouraged by that all of that would start to tell us that that uh you know, 2025 I mean, first of all we don't see uh a a downturn in 2025. We see that the the the economy seems to be

John Morris: I think. Toni, specific on the franchise loss in Florida, which was fairly significant to put in context. It was about 185 basis points of the volume loss in residential, and about 35 basis points. So you net those two out, and then you think about our commentary about us still being confident in our volume projection for the full year.

Jim Fish: It was about 185 basis points of the volume loss in residential, and about 35 basis points. So you net those two out, and then you think about our commentary about us still being confident in our volume projection for the full year.

Unknown Executive: And was that planned? Or I guess what was the situation there? What I would tell you is the the this particular franchise was not performing at a level we thought acceptable. So we, we positioned ourself if we were going to retain it to do it at the right margins and returns and that did not work out. So it's I would sort of addition by subtraction. Yep, understood.

Toni Kaplan: Was that planned or I guess what was the situation there?

And uh, I wouldn't say it's a, it's a, a space shuttle, but it, but it seems to be pretty reasonable. And those waist streams that are predictive of that, uh, are performing pretty well. I think Tony specific on the, uh, on the franchise loss in Florida, which was fairly significant uh to put in context was about 185 basis points of the volume loss in residential and about 35 basis points. So, you know, those 2 out and then you think about our commentary about us still being, uh, confident in our, in our volume projection for for the full year. Um,

Toni Kaplan: Was that planned or I guess what was the situation there?

Jim Fish: What I would tell you is this particular franchise was not performing at a level we thought acceptable. So we positioned ourselves, if we were going to retain it, to do it at the right margins and returns and that did not work out. So I would sort of addition by subtraction, if you, if you will.

John Morris: What I would tell you is this particular franchise was not performing at a level we thought acceptable. So we positioned ourselves, if we were going to retain it, to do it at the right margins and returns and that did not work out. So I would sort of addition by subtraction, if you, if you will.

Toni Kaplan: Yep, understood. Just lastly, just hoping to get a little more color on the delta between core price and yield. Seemed like it widened again, you know, anything to call out on the yield side and how we should think about that going forward. Thanks.

Unknown Executive: Just lastly, just hoping to get a little more color on the delta between core price and yield seem like it widened again, you know, anything to call out on the yield side and how we should think about that going forward. Thanks. But when you look at core price, I mean, core price is right on track for us, pretty much across the board, whether you look at collection or landfill, or core price was right on track, yield was was a little bit under the middle of that range. And we expect it to finish under the the middle of the range, the range, I think we gave us four to 4.2.

And was that planned or or I guess what? What was the situation there? What I would tell you is the the this particular franchise was not performing at a level we thought acceptable. So we we, uh, positioned ourselves. If we were going to retain it to do it at the right margins and returns and uh, that did not work out. So it's, I would sort of addition by subtraction, if you will.

Jim Fish: Well, when you look at Core Price, I mean Core Price is right on track for us pretty much across the board. Whether you look at collection or landfill, Core Price was right on track. Yield was a little bit under the middle of that range, and we expect it to finish under the middle of the range. The range I think we gave was 4% to 4.2%, and we'll probably end up in that 4% range. But what that does tell you is that this is really a mix issue between Core Price and Yield, and John's going through a few of those kind of mixed components. So we're pleased with how price performs, particularly as you look at Core Price.

Yep. Understood um just lastly uh just hoping to get a little more color on the Delta between core price and yield. Um, seemed like it widened again, you know, anything to call out on the yield side and how we should think about that going forward. Thanks.

But when you look at core price, I mean, core Price Is Right on track for us, um, pretty much across the board. Uh, whether you look at collection or or landfill or core price was right on track, uh, yield was was

Unknown Executive: And we'll probably end up, you know, in that 4% range. But what that does tell you is that this is really a mixed issue between core price and yield. And, and John's gone through a few of those kind of mixed components. So we're pleased with how Price performs, particularly as you look at CorePrice. Thank you.

a little bit under the middle of that range and we expected to finish under the the, uh, the middle of the range, the range, I think we gave us 4 to 4.2 and and we'll probably end up, uh, you know, in that 4% range. But what that does tell you is that this is really a mix issue between core price and yield and uh, and John's gone through a few of those, uh, kind of mixed components.

Toni Kaplan: Thank you.

So we're we're pleased with how price performs particularly as you look at the core price.

Operator: Thank you. Our next question comes from the line of Sabahat Khan with RBC Capital Markets. The line is now open.

Sabahat Khan: Our next question, coming from the Line Hub, Sabahat Khan with RBC Capital Markets. The line is now open. Great, thanks and good morning. Maybe if I could just follow up on the conversation about the residential kind of the volume that was lost there. I think you've been on this journey to optimize the resi business for a few years now, there's route optimization, truck, You know, getting the business at the right margin.

Thank you.

Our next question, coming from the line of

Sabahat Khan: Great, thanks, and good morning. Maybe if I could just follow up on the conversation about the residential kind of the volume that was lost there? I think even on this journey to optimize the resi business for a few years now, whether it's route optimization, trucks getting the business at the right margins. Can you just maybe update us on where you are on the resi improvement journey and maybe how much might be left there?

K with RBC Capital Markets. The line is now open.

Great, thanks and good morning. Um maybe if I could just follow up on the conversation about the residential, kind of the the the volume that was lost there. I think you've been on this journey to optimize already business for a few years now whether it's throughout optimization trucks.

Unknown Executive: Can you just maybe update us on where you are on the RESI improvement journey and maybe how much might be left there? Thanks. Yeah, sure. Good question. So, I think Jim commented a few quarters ago, we look at this business in a few different buckets to sort of what's performing at an acceptable level and then all the tranches down and we've made really good progress. About 70% of that business now is up in a margin that we see that's certainly one that we're pleased with. So, we've got a little bit of work to do, but the ratio of revenue that's really below that threshold now has improved a good bit.

Jim Fish: Yes, sure, good question. So I think Jim commented a few quarters ago, we look at this business in a few different buckets, sort of what's performing at an acceptable level and then all the tranches down, and we've made really good progress. And about 70% of that business now is up at a margin that we see. That's certainly one that we're pleased with. So we've got a little bit of work to do. But the ratio of revenue that's really below that threshold now has improved a good bit. What I would tell you is we've talked about moderation in the residential losses, and I took a look at it in advance of the call, and you look at about 3.7% this quarter. We think by the end of the year, in 2025, that number will be somewhere south of 3%, somewhere around the 2.7% range.

John Morris: Yes, sure, good question. So I think Jim commented a few quarters ago, we look at this business in a few different buckets, sort of what's performing at an acceptable level and then all the tranches down, and we've made really good progress. And about 70% of that business now is up at a margin that we see. That's certainly one that we're pleased with.

So we've got a little bit of work to do. But the ratio of revenue that's really below that threshold now has improved a good bit. What I would tell you is we've talked about moderation in the residential losses, and I took a look at it in advance of the call, and you look at about 3.7% this quarter. We think by the end of the year, in 2025, that number will be somewhere south of 3%, somewhere around the 2.7% range.

Um you know getting the business at the right margin. Can you just maybe update us on where you are on the resi Improvement journey and maybe how much might be left there? Thanks yeah sure. Good question. So I think Jim commented a few quarters ago we look at this business in a few different buckets, just sort of sort of what's the performing at an acceptable level and then all the tranches down and we've made really good progress and about 70% of that business. Now is up in a margin that we see that's uh, certainly 1 that we're

Unknown Executive: What I would tell you is, is we've talked about moderation in the residential losses and I took a look at it in advance of the call and you look at about 3.7% this quarter. We think by the end of the year in 25, that number will be somewhere south of 3, somewhere around the 2.7% range. So, we are starting to hit the peak of that and we're going to see some moderation in the back half of the year, which aligns with my earlier commentary about the margin of return improvement we're seeing in that line of business.

Jim Fish: So we are starting to hit the peak of that and we're going to see some moderation in the back half of the year, which aligns with my earlier commentary about the margin and return improvement we're seeing in that line of business.

So we are starting to hit the peak of that and we're going to see some moderation in the back half of the year, which aligns with my earlier commentary about the margin and return improvement we're seeing in that line of business.

Pleased with the progress. So, we've got a little bit of work to do, but the ratio of revenue that's really below that threshold now is improved a good bit. What I would tell you is that we've talked about moderation in the residential losses. I took a look at it in advance of the call, and you look at about 3.7% this quarter. We think by the end of the year in 2025 that number will be somewhere south of 3%, around the 2.7% range. So, we are starting to hit the peak of that, and we're going to see some moderation in the back half of the year, which aligns with my earlier commentary about the margin and return improvement we're seeing in that line of business.

Sabahat Khan: Great. And then just maybe one on the EBITDA margin side, with the revenue guide update and the EBITDA margin maintained, can you just give us some of the puts and takes to get the EBITDA margin still back into that midpoint of the initial range? I'm assuming MIX might have helped a little bit. Maybe if we could just get all the puts and takes on the EBITDA margin.

Unknown Executive: Great.

Unknown Executive: And then just maybe one on the EBITDA margin side, you know, with the revenue guide update and the EBITDA margin maintained, can you just give us some of the puts and takes to get the EBITDA margin still back into that midpoint of the initial range? I'm assuming mix might have helped a little bit, but maybe if we could just get all the puts and takes on the EBITDA margin. Thank you. Sure. And just to clarify there, we actually had an update to reduce revenue and increase margin by 40 basis points at the midpoint. And that increase of 40 basis points is about 30 basis points from collection and disposal and 10 basis points from recycling.

Devina Rankin: Sure. Just to clarify there, we actually had an update to reduce revenue and increase margin by 40 basis points at the midpoint. That increase of 40 basis points is about 30 basis points from collection and disposal, and 10 basis points from recycling. That 10 basis points from recycling really is the commodity price impact that we've talked about, because lower recycling commodity prices help the margin, particularly on the brokerage side in terms of thinking about collection and disposal. As you mentioned, MSW is a big contributor there with the landfill volume contribution exceeding our expectations slightly, but our sustainability businesses are also performing well, and that's helped. Then price cost spread contributed about 25 basis points in the second quarter, which is a little above our initial expectations.

Great. And then um, just maybe 1 on the with the margin side, you know, with the, the revenue guide update and David, the margin maintained, can you just give us some of the puts and takes to get the margin? Still back into that midpoint of the initial range. I'm assuming mix might have helped a little bit, but maybe if we just get all the puts and takes on the ebit, the margin, thank you.

Unknown Executive: That 10 basis points from recycling really is the commodity price impact that we've talked about because lower recycling commodity prices help the margin, particularly on the brokerage side. In terms of thinking about collection and disposal, as you mentioned, mix is a big contributor there with the landfill volume contribution exceeding our expectations slightly. But our sustainability businesses are also performing well. and and that's help. And then price cost spread contributed about 25 basis points in the second quarter, which is a little above our initial Great.

Sure. And just um to clarify there we actually had an update to reduce revenue and increase margin by 40 basis points at the midpoint. And that increase of 40 basis points is about 30 basis points from collection and Disposal and 10 basis points from recycling. That 10 basis points from recycling, really is the commodity price impact that we've talked about because lower recycling, commodity prices, help the margin, particularly on The Brokerage side, um, in in terms of thinking about collection and Disposal as you mentioned, mix is a big contributor.

Go there with the landfill volume contribution exceeding our expectations slightly. Um, but our sustainability businesses are also performing well. Um,

Brian Bergmeier: Great.

Sabahat Khan: Great. If I could just maybe squeeze in a quick one. Obviously, the industrial kind of the backdrop has been good, and I think Jim mentioned earlier it's been a drag for a few years. Maybe if you just look a little bit closely, Q2 is obviously a bit of a step down there. Just from a macro perspective. What are you seeing into Q3 and maybe expectations for the back half? The understanding you're reiterating the guide, but just curious what you're seeing on the ground level. Thanks.

Sabahat Khan: If I could just maybe squeeze in a quick one. Obviously, the industrial kind of the backdrop has been good, and I think Jim mentioned earlier it's been a drag for a few years. Maybe if you just look a little bit closely, Q2 is obviously a bit of a step down there. Just from a macro perspective. What are you seeing into Q3 and maybe expectations for the back half? The understanding you're reiterating the guide, but just curious what you're seeing on the ground level. Thanks.

Unknown Executive: If I could just maybe squeeze in a quick one. Obviously, the industrial kind of the backdrop hasn't been good, and I think you mentioned earlier it's been a drag for a few years. Maybe if you just look a little bit closely, Q2 is obviously a bit of a step down there just from a macro perspective. What are you seeing into Q3 and maybe your expectations for the back half of your understanding? You know, you're reiterating the guide, but just curious to what you're seeing on the ground level. Thanks. All right. So talking about roll-off here, the industrial line of business, yeah, I mentioned June was the strongest volume month of the year.

And and that's helped. Um and then price cost. Spread contributed about 25 basis points in the second quarter which is a little above our initial expectations

Great. If I could just maybe squeeze in a quick 1, obviously the industrial kind of the

Jim Fish: So talking about roll-off here, the industrial line of business. Yeah, I mentioned June was the strongest volume month of the quarter. Roll-off was still negative for the month of June, but 310 basis points improved versus the second quarter, and 300 basis points improved year to date. So we are seeing a rebound in roll-off kind of similar to what what you just heard from John about resi. I think you do get to a point where your year over year comparisons become easier, and I think we're starting to see that. But at the same time, I think you actually are seeing a little bit of strength in the economy that we haven't had. We've talked about kind of an industrial recession over the last probably five or six quarters, and I think that's largely kind of dissipated.

But just curious to what you're seeing on the ground level. Thanks.

Here are the the industrial line of business.

Unknown Executive: The quarter roll-off was still negative for the month of June, but 310 basis points improved versus the previous quarter. https://www.youtube.com.uk https://www.youtube.com.uk In the economy that we haven't had, we've talked about kind of a, an industrial recession over the last probably five or six quarters. And I think that's largely kind of dissipated. And we're seeing it in roll off and in C and D, by the way, our C and D This was a positive 9.4%, and as I mentioned, that has nothing to do with any of that fire volume, it was just 9.4%, and that's been building incrementally, 4.9% last quarter.

roll off was still negative for the month of June, but, but, uh, 310 basis points improved versus

Jim Fish: We're seeing it in roll-off and in C&D. By the way, our C&D was a positive 9.4%. As I mentioned, that has nothing to do with any of that tire volume. It was just 9.4% and that's been building incrementally. 4.9% last quarter, 2.6% in Q4. We've seen C&D start to build incrementally and that's a positive for us and a positive for the economy.

We're seeing it in roll-off and in C&D. By the way, our C&D was a positive 9.4%. As I mentioned, that has nothing to do with any of that tire volume. It was just 9.4% and that's been building incrementally. 4.9% last quarter, 2.6% in Q4. We've seen C&D start to build incrementally and that's a positive for us and a positive for the economy.

Unknown Executive: So we've seen C&D start to build incrementally, and that's a positive for us, a positive. Thanks very much. Thank you.

Sabahat Khan: Thanks very much.

The second quarter and 300 basis points improved year to date. So so we are seeing a rebound and roll off a kind of similar to what you what what you just heard from John about resi. I think you, you do get to a point where where you know, your year-over-year comparisons become easier, and I think we're starting to see that, uh, but it's the same time. I think, you know, you, you actually are seeing a, a little bit of strength in, in the economy that we haven't had. We've talked about kind of a, an industrial recession over the last probably 5 or 6 quarters. And and I, I think to that's largely kind of dissipated, uh, and we're seeing it in roll off and in C and D. By the way, our C and D was, uh, was a positive 9.4%. And as I mentioned that, that has nothing to do with any of that fire volume. It was just 9.4%. Uh, and that's that's been building incrementally. 4.9% last quarter, 2.6%, the quarter of 4. So we've seen CND start to build incrementally and that's, that's a positive uh, for us and a positive for the economy.

Operator: Thank you. Our next question coming from the line of Noah Kaye with Oppenheimer. Your line is now open.

Noah Kaye: And our next question coming from the line of Noah Kaye with Oppenheimer. Your line is now open. Thank you for taking the questions. So WMHS confident in the upper end of the 80 to 100 million synergies capture for the year.

Thanks very much.

Thank you.

Brian Bergmeier: Thank you for taking the questions. So WMHS confident in the upper end of the $80 to 100 million synergies capture for the year. Talk a little bit about what you got in the first half of the year. The exit rate as we look at Q4 in terms of the run rate on synergies there, and then kind of how you square that up with the $250 million targeted over a longer period of time.

Noah Kaye: Thank you for taking the questions. So WMHS confident in the upper end of the $80 to 100 million synergies capture for the year. Talk a little bit about what you got in the first half of the year. The exit rate as we look at Q4 in terms of the run rate on synergies there, and then kind of how you square that up with the $250 million targeted over a longer period of time.

In our next question, coming from the line of know, okay, with Open Hymn, Elon is now open.

Rafael Carrasco: Talk a little bit about what you got in the first half of the year, the exit rate as we look at 4Q in terms of the run rate on synergies there, and then kind of how you square that up with the 250 million targeted over a longer period of time. Yeah, no, this is Rafa. I'll take a crack at that. So you correctly addressed it, right, we're still targeting that upper range of $100 million. That seems to be coming in kind of pro rata evenly, maybe a little bit weighed heavily to the SG&A portion in the first half of the year, that'll continue to be the bigger contributor.

Uh, thank you for taking questions. Um, so WMHS, uh, confident in the upper end of the $80 million to $100 million synergies capture for the year. Uh, we talked a little bit about what you got in the first half of the year, kind of the exit rate. As we look at Q4 in terms of the run rate on synergies there. And then.

Rafa: Yeah, no, this is Rafa. I'll take a crack at that. So you correctly addressed it, right? We're still targeting that upper range of $100 million that seems to be coming in kind of pro rata evenly, maybe a little bit weighted heavily to the SG&A portion in the first half of the year. That'll continue to be the bigger contributor. If you remember, when we first kind of laid out our expectations for synergies, we were going to have equal parts contributions from SG&A, from OpEx, and from internalization. Internalization is just going to start hitting in the back half of the year. SG&A has been hitting throughout the first half of the year. And then OpEx could have sort of scattered throughout.

Rafa Carrasco: Yeah, no, this is Rafa. I'll take a crack at that. So you correctly addressed it, right? We're still targeting that upper range of $100 million that seems to be coming in kind of pro rata evenly, maybe a little bit weighted heavily to the SG&A portion in the first half of the year. That'll continue to be the bigger contributor. If you remember, when we first kind of laid out our expectations for synergies, we were going to have equal parts contributions from SG&A, from OpEx, and from internalization. Internalization is just going to start hitting in the back half of the year. SG&A has been hitting throughout the first half of the year. And then OpEx could have sort of scattered throughout.

Kind of how you square that up with the $250 million targeted over a longer period of time.

Rafael Carrasco: If you remember, when we first kind of laid out our expectations for synergies, we were going to have equal parts contributions from SG&A, from OPEX, and from internalization. Internalization is just going to start hitting in the back half of the year, SG&A has been hitting throughout the first half of the year, and then OPEX could have sort of scattered throughout.

And we're still targeting that upper range of hundred million dollars. Um, that seems to be coming in kind of Prada evenly, um, maybe a little bit. Um, we weighed heavily to the sgna portion in the first half of the year that will continue to be the bigger. Contributor, if you remember, when we first kind of laid out our expectations for synergies, we were going to have equal parts contributions from um, sgna from Opex. And from internalization internalization is just going to start hitting in the back. Half of the year sg&a has been hitting throughout the first half of the year and then opix sort of scattered throughout

Rafael Carrasco: Thanks, Rafa. But just to follow up, so you said it's kind of coming in pro-rata, meaning sort of we're getting kind of growth in the run rate synergies each quarter of the year, right? And so the implication is that you're, you're entering 26 with a higher level of run rate synergies versus 100 million. That is correct. Should we just like, should we just plus that up by 50 percent? That's a good estimate.

Brian Bergmeier: Thanks, Rafa. Just to follow up. So you said this kind of coming in pro rata, meaning sort of we're getting kind of growth in the run rate synergies each quarter of the year. Right. And so the implication is that you're entering 2026 with a higher level of run rate synergies versus $100 million.

Noah Kaye: Thanks, Rafa. Just to follow up. So you said this kind of coming in pro rata, meaning sort of we're getting kind of growth in the run rate synergies each quarter of the year. Right. And so the implication is that you're entering 2026 with a higher level of run rate synergies versus $100 million.

Rafa: That is correct.

Rafa Carrasco: That is correct.

Brian Bergmeier: Should we just plus that up by 50%?

Noah Kaye: Should we just plus that up by 50%?

Thanks Robert but just to follow up. Um, so you said this kind of coming in Pro rata. Meaning sort of, we're getting kind of growth uh in the Run rate. Synergies each quarter of the year, right? And so the implication is that you're you're entering 26 with a higher level of run rate synergies versus 100 million. Um, that is correct, like we just passed that up by 50%.

Devina Rankin: That's a good estimate, Noah. We'll spend some more time giving you specific exit rate when we get to Q3 earnings. But what I would tell you is, as Rafa mentioned, in terms of the internalization benefits, really becoming more of a H2 2025 impact. That's one of the things that will really amplify synergy capture going into 20 from day one.

Rafael Carrasco: Now, I will spend some more time giving you specific exit rate when we get to Q3 earnings. But what I would tell you is, as Rafa mentioned, in terms of the internalization benefits really becoming more of a second half of 2025 impact, that's one of the things that will really amplify synergy capture going into 2026 from day one.

That's a good estimate.

Brian Bergmeier: Great. I want to ask a question on the sustainability side. It's great to see the really strong increase in margins in the renewable energy line of business. Maybe you talk a little bit about expectations for margins there moving throughout the year, and in particular kind of where you sit with contracting for perhaps even next year on the RNG offtake.

Noah Kaye: Great. I want to ask a question on the sustainability side. It's great to see the really strong increase in margins in the renewable energy line of business. Maybe you talk a little bit about expectations for margins there moving throughout the year, and in particular kind of where you sit with contracting for perhaps even next year on the RNG offtake.

Exit rate. Um, when we get to Q3 earnings but what I would tell you is as Rafa mentioned, um in terms of the internalization benefits really becoming more of a second half of 2025 impact. That's 1 of the things that will really amplify Synergy capture going into 2026 from day 1.

Toni Kaplan: Noah, it's Tara Hemmer. We are really pleased with the performance of our sustainability related businesses, and you can see that ramp very clearly in our Q2 results. So I want to unpack your R and D question first. For 2025, we have 90% of our offtake locked up, and our team has done a fantastic job of selling forward. You can see what our RIN price for this quarter was about 255, which is above market. And that's a direct result of us selling forward some of our RINs. So our team really does know how to contract in the marketplace. We expect margins to be similar throughout the balance of 2025 in the renewable energy business, primarily because we have 90% of our offtake locked up for this year.

Tara Hemmer: Noah, it's Tara Hemmer. We are really pleased with the performance of our sustainability related businesses, and you can see that ramp very clearly in our Q2 results. So I want to unpack your R and D question first. For 2025, we have 90% of our offtake locked up, and our team has done a fantastic job of selling forward. You can see what our RIN price for this quarter was about 255, which is above market. And that's a direct result of us selling forward some of our RINs. So our team really does know how to contract in the marketplace. We expect margins to be similar throughout the balance of 2025 in the renewable energy business, primarily because we have 90% of our offtake locked up for this year.

Tara Hemmer: Noah, it's Tara Hemmer. We are really pleased with the performance of our sustainability related businesses. And you can see that ramp very clearly in our Q2 results.

Great, great. Um, I want to ask a question on sustainability size. It's great to see the, uh, really strong increase in, uh, margins in the renewable energy line of business. Um, maybe you can talk a little bit about, uh, you know, expectations for margins there, moving throughout the year and, in particular, kind of where you sit with contracting for, uh, perhaps even next year on, uh, the RNG optic.

Tara Hemmer: So I want to unpack your R&D question first. For 2025, we have 90% of our offtake locked up. And our team has done a fantastic job of selling forward. You can see what our RIN price for this quarter was about 255, which is above market. And that's a direct result of us selling forward some of our RINs. So our team really does know how to contract in the market. We expect margins to be similar throughout the balance of 2025 in the renewable energy business, primarily because we have 90% of our offtake locked up for this year.

No, it's Tara Hammer. We are really pleased with the performance of our sustainability initiatives, particularly in relation to businesses. You can see that ramp very clearly in our Q2 results.

So I want to unpack your RNG question first. For 2025, we have 90% of our offtake locked up, and our team has done a fantastic job of selling forward. You can see that our Ren price for this quarter was about $255, which is above market, and that's a direct result of us selling forward. Some of our wins show that our team really does know how to contract in the marketplace.

We expect.

Tara Hemmer: And then, as we look forward to 2026, we still are at about 30%, which is what we had outlined in Investor Day, at roughly $26 for that contracted offtake. But you have to remember, we have most of our RINs yet to sell, and we're able to tap into our fleet that we have. an incredible advantage for WM compared to anybody else.

Toni Kaplan: And then as we look forward to 2026, we still are at about 30%, which is what we had outlined in Investor Day, at roughly $26 for that contracted offtake. But you have to remember we have most of our RINs yet to sell, and we're able to tap into our fleet that we have, which is an incredible, incredible advantage for WM compared to anybody else in the marketplace. On the recycling side, despite the fact that commodity prices were down substantially year over year, you saw us drive EBITDA growth of 17%. And a lot of that has to do with our automation investments coming online. We're seeing volume growth related to those automation investments, and that clearly is us differentiating in the marketplace where we're able to add more customers in those key geographies.

And then as we look forward to 2026, we still are at about 30%, which is what we had outlined in Investor Day, at roughly $26 for that contracted offtake. But you have to remember we have most of our RINs yet to sell, and we're able to tap into our fleet that we have, which is an incredible, incredible advantage for WM compared to anybody else in the marketplace. On the recycling side, despite the fact that commodity prices were down substantially year over year, you saw us drive EBITDA growth of 17%. And a lot of that has to do with our automation investments coming online. We're seeing volume growth related to those automation investments, and that clearly is us differentiating in the marketplace where we're able to add more customers in those key geographies.

5 in the renewable energy business, primarily because we have 90% of our off-take locked up for this year. As we look forward to 2026, we still are at about 30%, which is what we had outlined on Investor Day at roughly $6 for that contracted off-take. But you have to remember,

Tara Hemmer: On the recycling side, despite the fact that commodity prices were down substantially year over year, you saw us drive EBITDA growth of 17%, and a lot of that has to do with our automation investments. coming online. We're seeing volume growth related to those automation investments. And that clearly is us differentiating in the marketplace where we're able to add more customers in those.

We have um most of our winds yet to sell and we're able to tap into our Fleet that we have which is an incredible Advantage for WMS compared to anybody else in the marketplace.

And the recycling side, despite the fact that commodity prices were were down substantially year-over-year. You saw us in uh, Dr. Eva dog, growth of 17% and a lot of that has to do with our automation Investments coming online. We're seeing volume growth related to those automation Investments. And that clearly Is Us differentiating in the marketplace where we're able to add more customers in those teams to geography.

Brian Bergmeier: Great. Thanks Tara. I'll pass it on.

Noah Kaye: Great. Thanks Tara. I'll pass it on.

Unknown Executive: Thanks, Tara.

Unknown Executive: I'll pass it on.

Operator: Thank you. Our next question coming from Delina. James Schumm's line is now open.

James Schumm: Thank you. Our next question coming from the line of James Schumm with TD Cowen. Your line is now open. Hey, thanks and good morning. I was wondering if you would be willing to provide the revenue split between medical waste and secure information destruction. And how should we think about the longer term EBITDA growth for WM Healthcare?

Great, thanks. Tara, uh, I'll pass it on.

Thank you.

Brian Bergmeier: Hey, thanks and good morning. I was wondering if you would be willing to provide the revenue split between medical waste and secure information destroyer. How should we think about the longer term EBITDA growth for WM Healthcare?

Jim Schumm: Hey, thanks and good morning. I was wondering if you would be willing to provide the revenue split between medical waste and secure information destroyer. How should we think about the longer term EBITDA growth for WM Healthcare?

Our next question coming from the lineup, Jim?

Hey, thanks and good morning.

Rafa: Yeah, Jim, this is Rafa. So that revenue split continues to hover right around 2/3 on the healthcare solutions side and 1/3 on the information destruction side. In terms of kind of revenue growth, you know, we continue to look at that 5% to 6% as sort of the long-term aspirational growth on top line for both businesses. You know, we think that right now though we're focused on the customer relationships. We're improving the quality of the revenue as we agree, as we renew agreements, and we're ensuring that we prioritize the customer lifetime value. Right now, as I mentioned during the investor day, it's going to take a little bit of time to acclimate the customers to a more rigorous cadence of pricing, and they've not been seen or hadn't seen implemented even though their contracts actually permitted it.

Rafa Carrasco: Yeah, Jim, this is Rafa. So that revenue split continues to hover right around 2/3 on the healthcare solutions side and 1/3 on the information destruction side. In terms of kind of revenue growth, you know, we continue to look at that 5% to 6% as sort of the long-term aspirational growth on top line for both businesses.

Rafael Carrasco: Yeah, Jim, this is Rafa. So that that revenue split continues to hover right around two thirds on the healthcare solution side, and a third on the information destruction side. In terms of kind of revenue growth, you know, we continue to look at that five to 6% as sort of a long term aspirational growth on top line for both businesses. You know, we think that right now, though, we're focused on the customer relationships, we're improving the quality of the revenue. As we agree, as we renew agreements, and we're ensuring that we prioritize the customer lifetime value right now.

Um I was wondering if you would be willing to provide the revenue split between medical waste and secure information destruction and how should we think about the longer term ibida growth for WM Healthcare?

yeah, um Jim, this is Rafa so um that that Revenue split continues to hover right around 2/3 on the healthcare solution side and a third on the information destruction side, um,

You know, we think that right now though we're focused on the customer relationships. We're improving the quality of the revenue as we agree, as we renew agreements, and we're ensuring that we prioritize the customer lifetime value. Right now, as I mentioned during the investor day, it's going to take a little bit of time to acclimate the customers to a more rigorous cadence of pricing, and they've not been seen or hadn't seen implemented even though their contracts actually permitted it.

Rafael Carrasco: As I mentioned, during the investor day, it's going to take a little bit of time to acclimate the customers to a more rigorous cadence of pricing, and they've not been seen or haven't seen implemented, even though their contracts actually permitted it. So I think the takeaway here is that we're very conscious about our customer relationships right now. The initial phase, we're really focused on kind of building out our reporting suite also to adopt sort of the new WM revenue KPIs that we can then use to plan and execute long term. And then in terms of the dog growth over the years, I think it's really important to note that we're still in a period where we're focused on a combination of optimizing the business and running the business and then realizing the tremendous value of synergies between the two organizations.

Rafa: So I think the takeaway here is that we're very conscious about our customer relationships right now. The initial phase, we're really focused on kind of building out our reporting suite also to adopt sort of the new WM revenue KPIs that we can then use to plan and execute long term.

So I think the takeaway here is that we're very conscious about our customer relationships right now. The initial phase, we're really focused on kind of building out our reporting suite also to adopt sort of the new WM revenue KPIs that we can then use to plan and execute long term.

In terms of kind of Revenue um, growth, you know, we continue to look at that 5 to 6% as sort of a long-term aspirational growth on Topline for both businesses. Um, you know, um, we think that right now though we're focused on the customer relationships. We're we're improving the quality of the revenue. Um, as we agree as we renew agreements, and we're ensuring that we prioritize, the customer lifetime value right now. As I mentioned during the investor day, um, it's going to take a little bit of time to acclimate the customers to a more rigorous Cadence of pricing and uh, they've not been seen or haven't seen implemented even though their contracts actually permitted. It. So I think the takeaway here is that we're very conscious about our customer relationships right now. The initial phase, we're really focused on kind of building out, our reporting Suite. Also to adopt sort of the new WM Revenue kpis. Um that

Devina Rankin: Then in terms of EBITDA growth over the years, I think it's really important to note that we're still in a period where we're focused on a combination of optimizing the business, running the business, and then realizing the tremendous value of synergies between the two organizations. So splitting those two becomes art versus science in some ways because they really do blend into one another. Specifically giving you a growth rate of the business right now becomes more. What I would say is give us some time in terms of owning this business and optimizing this business to specifically give you what we think that long term growth rate of the business is beyond 2027.

We can then use to plan and execute long-term.

Rafael Carrasco: And so splitting those two becomes art versus science in some ways, because they really do blend into one another. So specifically giving you a growth rate of the business right now becomes murky.

Rafael Carrasco: And so what I would say is give us some time in terms of owning this business and optimizing this business to specifically give you what we think that long term growth rate of the business is beyond 2027. I think looking to the information that we provided at Investor Day for 25, six and seven is a good benchmark for what we'll realize in the near future.

Devina Rankin: I think looking to the information that we provided at Investor Day for 2025, 2026, and 2027 is a good benchmark for what we'll realize in the near term.

I think looking to the information that we provided at Investor Day for 2025, 2026, and 2027 is a good benchmark for what we'll realize in the near term.

Jim Fish: Jim, I think I'm going to mention one thing here. When we bought this business, there were some real problems with the interconnectivity of the systems, and not a surprise to anybody on this call, but whether it's Salesforce and SAP or whatever. But that resulted in some issues with customer onboarding, with reporting, billing, and routing, for instance. And so what we've done is put the right people on it and dedicated the right amount of resources to it. And we're making significant progress here on this front. And that's why we're comfortable with this top line growth that Rafa mentioned for the long term. You know, but we do have to get that ERP fixed. And we're, we feel like we're in a good place as we make progress on that with the right people.

Jim Fish: Jim, I think it's also worth, I'm going to mention one thing here, when we bought this business, there were some real problems with the interconnectivity of the systems and not surprised anybody on this call, but whether it's, you know, Salesforce and SAP or whatever, but that resulted in some issues with customer onboarding, with reporting and billing and routing, for instance. And so what we've done is put the right people on this. and dedicated the right amount of resources, and we're making significant progress here on this front. And that's why we're comfortable with this top-line growth that Rafa...

And then in terms of the dog growth over the years, I think it's really important to note that we're still in a period where we're focused on a combination of optimizing, the business and running the business and then realizing the tremendous value of synergies between the 2 organisms. And so splitting those 2 becomes ART versus science in some ways because they really do blend into 1 another. So specifically giving you a growth rate of the business right now becomes murky. And so what I would say is give us some time in terms of owning this business and the optimizing this business to specifically, give you what we think that long-term growth rate of the business is beyond 2027. I think looking to be information that we provided at investor day for 256 and 7 is a good Benchmark for what we'll realize in the near term.

Jim I think it's also worth that I mentioned 1 thing here. Um it when we bought this business there were some some real problems with the interconnectivity of the systems and and not a surprise to anybody on this call. But whether it's, you know, Salesforce and sap or whatever. But um,

but that resulted in some, in some issues, with customer onboarding with reporting and and billing and routing for instance,

And so what we've done is put the right people on this.

Uh, and dedicated the right amount of resources to, and we're making significant progress here on this front.

Jim Fish: for the long term, you know, but we do have to get that air. Fixed and we're we feel like we're in a good place as we make progress on that with the right people. And once we do that, then I think you'll start to see us focus more on that top line and talk more about that top line on this call.

Jim Fish: Once we do that, then I think you'll start to see us focus more on that top line and talk more about that top line. On this call right now, we're talking about more the bottom line for Stericycle because of the synergy capture.

Once we do that, then I think you'll start to see us focus more on that top line and talk more about that top line. On this call right now, we're talking about more the bottom line for Stericycle because of the synergy capture.

And that's why we're comfortable with this this uh, Topline growth that Rafa mentioned, uh, for the long term, you know. But we do have to get that Erp fixed and we're, we feel like we're in a, a good place as we make progress on that with the right people. Uh, and and once we do that, then I think you'll start to see us

Unknown Executive: Right now we're talking about more of the bottom line for StairCycle because of the scenario. Right.

Brian Bergmeier: Right, okay, great. Thank you. And then just as a follow up, with the top line growth of 5% to 6%, how do we think about the price volume mix within that?

Jim Schumm: Right, okay, great. Thank you. And then just as a follow up, with the top line growth of 5% to 6%, how do we think about the price volume mix within that?

Unknown Executive: Okay, great. Thank you.

Unknown Executive: And then just as a follow up, with the with the top line growth of five to 6%, like how do I how do we think about the the price volume mix within that? Yeah, Jim, long term, as I said, I mean, the aspiration is to get to a really balanced top line growth of 50% price 50% volume. Is that what you were asking? Got it. Okay. Yes. Yeah, that's what I was asking. Okay. Great. Thank you very much. Thank you.

focus more on that Top Line and and talk more about that Top Line on this call right now. We're talking about more of the bottom line for, for stair cycle because of the Synergy capture.

Right. Okay, great. Thank you. And then just as a follow up with the with the Top Line growth of 5 to 6%, like, how do I, how do we think about the the

Rafa: Yeah, Jim, long term, as I said, I mean, the aspiration is to get to a really balanced top line growth. 50% price, 50% volume. Is that what you were asking?

Rafa Carrasco: Yeah, Jim, long term, as I said, I mean, the aspiration is to get to a really balanced top line growth. 50% price, 50% volume. Is that what you were asking?

Price volume. Mix within that.

Brian Bergmeier: Got it. Okay. Yes. Yeah, that's what I was asking. Okay, great. Thank you very much.

Jim Schumm: Got it. Okay. Yes. Yeah, that's what I was asking. Okay, great. Thank you very much.

Yeah, uh, Jim, long-term, as I said, I mean, the aspiration is to get to a really balanced topline growth of 50% price and 50% volume.

Operator: Thank you. Our next question coming from the lineup, Tyler Brown with Raymond James. The line is now open.

Tyler Brown: Our next question coming from the lineup, Tyler Brown with Raymond James. Your line is now open. Hey, good morning. Can y'all hear me? I can't speak to the crazy thing, but here's what I would tell you, Tyler, about lifetime value. I mean, our focus is not related to price, specifically price is kind of the end result of that. I mean, our focus is on how do we differentiate ourselves versus our competition. I mentioned it kind of in the first paragraph of my prepared remarks that using technology, for example, to differentiate ourselves really helps set these customers up to be longer lifetime customers.

Is that what you were asking? Got it. Okay, yes, yeah, that's what I was asking. Okay, great. Thank you very much.

Thank you.

Our next question coming from the lineup.

Brian Bergmeier: Hey, good morning. Can y'all hear me?

Tyler Brown: Hey, good morning. Can y'all hear me?

Devina Rankin: We can. Good morning.

Brian Bergmeier: Yeah. Hey, Jim, John. So you guys mentioned lifetime customer value a couple times in the script, and I just want to understand what you're messaging there. So are you messaging that you're being a little more aggressive on price to hold churn? Are you saying that you're being a little more aggressive on price to improve lifetime economics? Am I just completely crazy and there's just really no change? I just want to be clear on the messaging.

Tyler Brown: Yeah. Hey, Jim, John. So you guys mentioned lifetime customer value a couple times in the script, and I just want to understand what you're messaging there. So are you messaging that you're being a little more aggressive on price to hold churn? Are you saying that you're being a little more aggressive on price to improve lifetime economics? Am I just completely crazy and there's just really no change? I just want to be clear on the messaging.

Jim Fish: Well, I can't speak to the crazy thing, but here's what I would tell you, Tyler, about lifetime value. I mean, our focus is not related to price specifically. Price is kind of the end result of that. I mean, our focus is on how do we differentiate ourselves versus our competition. I mentioned it kind of in the first paragraph of my prepared remarks that using technology, for example, to differentiate ourselves really helps set these customers up to be longer lifetime customers. And then price ends up being kind of a byproduct of that. I mean, you're able to, if you have a differentiated service offering, then you're able to charge more for it on the price line.

Y'all hear me? We can. Good morning. Yeah. Hey, Jim. John, so you guys mentioned lifetime customer value a couple times in the script. Um, and I just want to understand what your message in there. So, are you messaging that you're being a little more aggressive on price to hold churn? Are you saying that you're being a little more aggressive on price to improve lifetime economics? Am I just completely crazy, and there's just really no change? I just want to be clear on the messaging.

Jim Fish: And then price ends up being kind of a byproduct of that. I mean, you're able to, if you have a differentiated service offering, then you're able to charge more for it on the price.

Well, I mean, I can't speak to the crazy thing, um, but I, here's what I would tell you Tyler about about lifetime value. I mean, our focus is not not not related to price, specifically prices is kind of the end result of that. I mean, our focus is on how do we differentiate ourselves, uh, versus our competition? I mentioned it, you know, kind of in the first paragraph of my prepared remarks that, that using technology, for example, to to differentiate ourselves, really helps set these customers up to be longer lifetime customers and then price ends up being kind of a byproduct of that. I mean, you're you're able to if you have a different

Brian Bergmeier: Okay. Crazy. Seems like the right outcome. Okay, so, and then this one again for Jim and Rafa. And I kind of want to go back to Noah's question and maybe I misread it, but didn't you raise the $27 Stericycle synergies to $300 million? And it sounds like some of that might be revenue cross-sell, which I surmise will be a gift that kind of keeps giving. But it also seems that there's maybe more cost opportunity. Is that correct? And then two, has there been any change in the CapEx profile of that business now that it's under your control? Are there proving to be some synergies there?

Tyler Brown: Okay. Crazy. Seems like the right outcome. Okay, so, and then this one again for Jim and Rafa. And I kind of want to go back to Noah's question and maybe I misread it, but didn't you raise the $27 Stericycle synergies to $300 million? And it sounds like some of that might be revenue cross-sell, which I surmise will be a gift that kind of keeps giving. But it also seems that there's maybe more cost opportunity. Is that correct? And then two, has there been any change in the CapEx profile of that business now that it's under your control? Are there proving to be some synergies there?

Unknown Executive: Okay, crazy seems like the right outcome.

Ated service offering, then you're able to charge more for it, uh, on the price line.

Rafael Carrasco: Okay, so, and then this one, again, for Gemma Rafa, and I kind of want to go back to Noah's question. And maybe I misread it, but didn't you raise the 27 Stericycle Synergies to $300 million? And it sounds like some of that might be revenue cross sell, which I surmise will be a gift that kind of keeps giving. But it also seems that there's maybe more cost opportunity. Is that correct? And then two, has there been any change in the control? Are there proving to be some synergies there?

Rafael Carrasco: Yeah, Tyler, maybe Rafa, this is Rafa, I'll take the first part and then maybe hand it to Davina for the second part of the question. So yeah, you're correct. The $50 million on the cross sell side, that's additive to $250 million in cost synergies primarily. And that is across through the three year horizon that we have for the synergies. I did say during yesterday that those $50 million are heavily weighed towards year two and three of the horizon. On the capital side, you know, I do think, Tyler, it's a good thought in terms of there being optimization opportunities between the two businesses for us to optimize their capital.

Okay, crazy. Seems like the the right outcome. Okay. So uh, and then this 1 again for Gemma Rafa and I kind of want to go back to Noah's question and maybe I misread it, but didn't you raise the 27, Sarah cycle, synergies to 300 million and it sounds like some of that might be Revenue crosselle which I surmise will be a gift that kind of keeps giving, but it also seems that there's maybe more cost opportunity is that correct. And then 2 has there been any change in the capex profile of that business. Now that it's under your control

Rafa: Yeah, Tyler, maybe. Ralph, this is Rafa. I'll take the first part and then maybe hand it to Davina for the second part of the question. So, yeah, you're correct. The $50 million on the cross-sell side, that's additive to $250 million in cost synergies primarily. And that is across through the three-year horizon that we have for the synergies. I did say during investor day that those $50 million are heavily weighted towards year two and three of the horizon.

Rafa Carrasco: Yeah, Tyler, maybe. Ralph, this is Rafa. I'll take the first part and then maybe hand it to Davina for the second part of the question. So, yeah, you're correct. The $50 million on the cross-sell side, that's additive to $250 million in cost synergies primarily. And that is across through the three-year horizon that we have for the synergies. I did say during investor day that those $50 million are heavily weighted towards year two and three of the horizon.

Devina Rankin: On the capital side. You know, I do think, Tyler, it's a good thought in terms of there being optimization opportunities between the two businesses for us to optimize their capital. But I think it's important to point out that pre-acquisition, the business funded its capital largely through the P and L in that it leased its fleet. And in WM, you know, we've got the best cost of capital in the industry, and we are going to ensure that we acquire the fleet and that we have a really strong lifetime utilization approach to optimizing the fleet over the long term. But those are less complex assets and therefore less expensive. And they also have a different disposal cost to the business, which we all know the landfill capital intensity, that is collection and disposal.

Are there proving to be some Center there? Yeah, Tyler maybe Ralph. This is Ralph. I'll take the first part and then maybe hand it to the Vina for the second part of the question. Um, so yeah, you're you're correct the $50 million on the cross sell side. Um, that's additive to 250 million dollars in cost synergies primarily and that is across um, through the 3 year Horizon that we have for the synergies. Uh, I did say to our investor today that those 50 million dollars are heavily weight towards the year 2 and 3 um of the horizon.

Rafael Carrasco: But I think it's important to point out that pre-acquisition, the business funded its capital largely through the P&L, in that it leased its fleet. And in WM, you know, we've got the best cost of capital in the industry, and we are going to ensure that we acquire the fleet and that we have a really strong lifetime utilization approach to optimizing the fleet over the long term. But those are less complex assets and therefore less expensive, and they also have a different disposal cost to the business, which we all know the landfill capital intensity that is collection and disposal.

On the capital side, I do think, Tyler, it's a good thought in terms of there being optimization opportunities between the two businesses for us to optimize their capital. However, I think it's important to point out that, pre-acquisition, the business funded its capital largely through the P&L and that, at least its fleet.

Jim Fish: So what I would say is that long term, we expect their capital probably to be in the 8.5% range versus our 10-ish plus range, and so that will be a return on invested capital benefit to the business that we anticipate over the long term. Yeah, and Tyler, maybe one last thing, because I think it speaks to the symbiosis between the capital deployment to the business and the synergies is, you know, when we own that fleet, we're going to be able to maintain and repair that fleet much more efficiently and effectively. And we do anticipate synergies there on maintaining.

Devina Rankin: So what I would say is that long term we expect their capital probably to be in the 8.5% range versus our 10ish plus range. And so that will be a return on invested capital benefit to the business that we anticipate over the long term.

So what I would say is that long term we expect their capital probably to be in the 8.5% range versus our 10ish plus range. And so that will be a return on invested capital benefit to the business that we anticipate over the long term.

Rafa: Yeah. And Tyler, maybe one last thing, because I think it speaks to the symbiosis between the capital deployment to the business and the synergies, is, you know, when we own that fleet, we're going to be able to maintain and repair that fleet much more efficiently and effectively. And we do anticipate synergies there on maintenance and repair.

Rafa Carrasco: Yeah. And Tyler, maybe one last thing, because I think it speaks to the symbiosis between the capital deployment to the business and the synergies, is, you know, when we own that fleet, we're going to be able to maintain and repair that fleet much more efficiently and effectively. And we do anticipate synergies there on maintenance and repair.

And in WM, you know, we've got the best cost of capital in the industry and we are going to ensure that we acquire the fleet, um, and that we have a really strong lifetime utilization approach to optimizing the fleet over the long term, but those are less complex assets and, and therefore less expensive. And they also have a different disposal cost, um, to the business which we all know the landfill uh Capital intensity, that is collection and Disposal. So what I would say is that long-term we expect their Capital probably to be in the 8 and a half percent range, versus our 10-ish plus um range and and so that will be a return on invested Capital benefit to the business um that we anticipate over the long term. Yeah, and Tyler. Maybe 1 last thing because I think it's speak speak to the symbiosis between the the capital deployment to the business and the synergies is, you know, when we own that

Unknown Executive: Okay, okay. So eight and a half longer term, maybe it's actually hotter first and then cools off. We'll see about that. Okay, that's helpful.

Brian Bergmeier: Okay. Okay, so eight and a half longer term, maybe it's actually hotter first and then cools off.

Tyler Brown: Okay. Okay, so eight and a half longer term, maybe it's actually hotter first and then cools off. We'll see about that. Okay, that's helpful. And then my last one here. So, Davina, I don't want to rehash the whole analyst day, but I do want to talk about the long-term Free Cash Flow guidance, because I want to just kind of make sure that I have it. So I know that that Free Cash Flow guide did not include bonus depreciation, but did that guidance also assume that the statutory tax rate would go back up? I'm just really trying to understand how tax policy has changed that number, basically.

that Fleet we're going to be able to maintain and repair that Fleet much more efficiently and effectively and we we do anticipate synergies there on maintenance and repair.

Jim Fish: We'll see about that.

Brian Bergmeier: Okay, that's helpful. And then my last one here. So, Davina, I don't want to rehash the whole analyst day, but I do want to talk about the long-term Free Cash Flow guidance, because I want to just kind of make sure that I have it. So I know that that Free Cash Flow guide did not include bonus depreciation, but did that guidance also assume that the statutory tax rate would go back up? I'm just really trying to understand how tax policy has changed that number, basically.

Devina Rankin: And then my last one here. So Devina, I don't want to rehash the whole analyst day, but I do want to talk about the long term free cash guidance, because I want to just kind of make sure that I have it. So I know that that free cash guide did not include bonus depreciation. But did that guidance also assume that the statutory tax would go back up? I'm just really trying to understand how tax policy has changed that number, basically. Yeah, it's a great question, Tyler, what I would tell you is that we were retaining the statutory rate in our guide, but we were not assuming the upside of bonus depreciation.

Okay. Okay. So 8 and a half longer term, maybe it's actually hotter first and then cools off. We'll we'll see about that. Okay, that's helpful. And then my last 1 here so it's been I don't want to rehash the whole analyst day but I do want to talk about the long term free cash guidance.

Devina Rankin: Yeah. It's a great question, Tyler. What I would tell you is that we were retaining this statutory rate in our guide, but we were not assuming the upside of bonus depreciation. And the ballpark of the upside of bonus depreciation in 2027 is $200 million. So we have about $120 million in 2025, and that ramps to $200 million by 2027.

Because I want to just kind of make sure that I have it. So I know that that free cash guide did not include bonus depreciation but did that guidance also assume that the statutory tax rate would go back up. I'm just really trying to understand how tax policy has changed. That number basically

Yeah, it's a great question, Tyler.

tell you, is that

We're.

Tyler Brown: And the ballpark of the upside of bonus depreciation in 2027 is $200 million. So we have about $120 million in 2025. And that ramps to $200 million by 2020. Okay, so the delta is the 200. Okay. All right. Very good. Thank you.

Depreciation and the ballpark of the upside of bonus depreciation in 2027 is million dollars.

So, we have about 120 million dollars.

Brian Bergmeier: Okay, so the delta is the 200. Okay. All right. Very good. Thank you.

Tyler Brown: Okay, so the delta is the 200. Okay. All right. Very good. Thank you.

Operator: Thank you. And our next question coming from the lineup, Trevor Romeo with William Blair. Line is now open.

Trevor Romeo: And our next question, coming from the line of Trevor Romeo with William Blair, the line is now open. Morning, everyone. Thanks for taking the questions.

In 5, and that ramps to a million dollars by 2027. Okay, so the delta is 200. Okay. All right, very good. Thank you.

Brian Bergmeier: Morning, everyone. Thanks for taking the questions. I just wanted to go back to, I guess, the landfill volume strength even outside of the wildfire cleanup. Specifically wanted to ask about, I guess, internalization, just because it was up, I think, another 120 basis points sequentially. Just trying to dig in a bit more. I don't know if you had, you know, temporary volume benefits that boosted that, but doesn't sound like you've done much on the medical waste side yet. So I guess, what would you say about the drivers of that, you know, continuing to increase now nicely above 70, and then how much can you continue to increase it moving forward?

Trevor Romeo: Morning, everyone. Thanks for taking the questions. I just wanted to go back to, I guess, the landfill volume strength even outside of the wildfire cleanup. Specifically wanted to ask about, I guess, internalization, just because it was up, I think, another 120 basis points sequentially. Just trying to dig in a bit more. I don't know if you had, you know, temporary volume benefits that boosted that, but doesn't sound like you've done much on the medical waste side yet. So I guess, what would you say about the drivers of that, you know, continuing to increase now nicely above 70, and then how much can you continue to increase it moving forward?

and our next question coming from the lineup driver Romeo with William Blair Illinois,

Trevor Romeo: I just wanted to go back to, I guess, the landfill volume strength, even outside of the wildfire cleanup, specifically wanted to ask about, I guess, internalization, just because it was up, I think, another 120 basis points sequentially, just trying to dig in a bit more. I don't know if you had temporary volume benefits that boosted that, but it doesn't sound like you've done much on the medical waste side yet. So, I guess, what would you say about the drivers of that continuing to increase now, nicely above 70, and then how much can you continue to increase it moving forward?

Jim Fish: I think it's a great observation, Trevor. I think, as Rafa mentioned, the internalization benefits are just starting to hit now. So you're not really seeing any meaningful amount in our landfill volumes. I think Jim made the comment in his prepared remarks. I mean, the MSW volume at 4.5% for the quarter and 4.1% year to date does not include any of the event work. Right. And I think that's worth highlighting. And the internalization rate of 71% and change, which historically we're talking about that before the call was like 65%, 66%. I think that really speaks to the value of the network that we've all been talking about for the last, you know, handful of years, quarter in and quarter out, because there is a level of complexity of moving this material that continues to increase.

John Morris: I think it's a great observation, Trevor. I think, as Rafa mentioned, the internalization benefits are just starting to hit now. So you're not really seeing any meaningful amount in our landfill volumes. I think Jim made the comment in his prepared remarks. I mean, the MSW volume at 4.5% for the quarter and 4.1% year to date does not include any of the event work. Right. And I think that's worth highlighting. And the internalization rate of 71% and change, which historically we're talking about that before the call was like 65%, 66%. I think that really speaks to the value of the network that we've all been talking about for the last, you know, handful of years, quarter in and quarter out, because there is a level of complexity of moving this material that continues to increase.

Thanks for taking the question. I just wanted to go back to, um, I guess the, the landfill volume strength even outside of the, the Wildfire cleanup. Um, specifically wanted to ask about, I guess, internalization just because it was up. I think another 120 Pace. Just point sequentially, just trying to dig in a bit more. Um, I don't know if you had, you know, temporary volume benefits. That boosted that but doesn't sound like you've done much on the medical waste side yet. So I guess, what would you say about the drivers of that, you know, continuing to increase now, nicely above 70? And then how much can you continue to increase it moving forward? I think it's a great observation Trevor, I think it's a Rafa mentioned. The internalization benefits are just starting to hit now so you're not really seeing any meaningful amount in our, in our landfill volumes. I think Jim made the comment in his preferred remarks. I mean, the MSW volume at 4 and a half uh percent for the quarter and 41 year to date, does not include any of the event work, right? And I think that's worth highlighting and the the the internalization rate of 71 and change, which historically we're talking about

Jim Fish: I think the investments I mentioned in infrastructure in my prepared remarks, part of that's related to exactly what you picked up on. So that's, I think, I think it's great momentum. I think we're going to continue to build on it. And as you know, Jim used the word differentiated. We see our post collection network, including our T stations and our recycling assets, et cetera, as all being something that's going to differentiate us over the long term.

I think the investments I mentioned in infrastructure in my prepared remarks, part of that's related to exactly what you picked up on. So that's, I think, I think it's great momentum. I think we're going to continue to build on it. And as you know, Jim used the word differentiated. We see our post collection network, including our T stations and our recycling assets, et cetera, as all being something that's going to differentiate us over the long term.

John Morris: So I think it's great momentum. I think we're going to continue to build on it, and as Jim used the word differentiated, we see our post-collection network, including our T stations, our recycling assets, et cetera, as all being something that's going to differentiate us over the long term. Thanks, John. That's really helpful.

About that before the call was like 65 66%. I think that really speaks to the value of the network that I we've all been talking about for the last, you know, handful of years quarter and a quarter out because there is a level of complexity of moving, this material that continues to increase. And I think the Investments I mentioned in infrastructure in my prepared remarks, part of that's related to exactly what you picked up on. So that's, I think I think it's great in momentum. I think we're going to continue to build on it and as, you know, Jim used the word differentiated we see our post collection Network

Including our T stations and our recycling assets. Etc, is all being something that's going to differentiate us over the long term.

Brian Bergmeier: Thanks, John, that's really helpful. And then maybe a follow-up for Rafa. Trying to keep you busy here. Just one from a human capital perspective on the Healthcare Solutions business, how much voluntary workforce turnover have you seen at Healthcare Solutions since the acquisition, and is that kind of more or less in line with what you would have expected at this point?

Trevor Romeo: Thanks, John, that's really helpful. And then maybe a follow-up for Rafa. Trying to keep you busy here. Just one from a human capital perspective on the Healthcare Solutions business, how much voluntary workforce turnover have you seen at Healthcare Solutions since the acquisition, and is that kind of more or less in line with what you would have expected at this point?

Rafael Carrasco: And then maybe a follow up for for Rafa trying to keep you busy here. Just one from from a human capital perspective on the healthcare solutions business. How much voluntary, you know, workforce turnover have you seen at healthcare solutions since the acquisition? And is that kind of more or less or in line with what you would have expected at this point? Well, if you're talking about sort of the hourly workforce, actually, we've seen an improvement in turnover since with the since the acquisition, I think that has a lot to do with sort of the human centered approach to leadership that we're driving down throughout the organization, obviously, sort of on the managerial corporate support ranks and all that that's somewhat impacted by, you know, the attainment of some of our SG&A targets, etc.

Thanks, John, that's really helpful. And then maybe a follow-up for, um,

Rafa: Well, if you're talking about sort of the hourly workforce, actually we've seen an improvement in turnover since the acquisition. I think that has a lot to do with sort of the human centered approach to leadership that we're driving down throughout the organization, obviously sort of in the managerial corporate support ranks, and all that, that's somewhat impacted by, you know, the attainment of some of our SG&A targets, et cetera. But overall it's a good story. I think during Investor Day I talked about the continued receptivity to sort of qualitative approach and the accountability we're driving in the business. A lot of them are really eager for that integration into the areas that I spoke about as well, where we're going to then have a culture of ownership of the business, much more at the site level.

Rafa Carrasco: Well, if you're talking about sort of the hourly workforce, actually we've seen an improvement in turnover since the acquisition. I think that has a lot to do with sort of the human centered approach to leadership that we're driving down throughout the organization, obviously sort of in the managerial corporate support ranks, and all that, that's somewhat impacted by, you know, the attainment of some of our SG&A targets, et cetera. But overall it's a good story. I think during Investor Day I talked about the continued receptivity to sort of qualitative approach and the accountability we're driving in the business. A lot of them are really eager for that integration into the areas that I spoke about as well, where we're going to then have a culture of ownership of the business, much more at the site level.

For Rafa trying to keep you busy here. Um just 1 from from a human capital perspective on the healthcare Solutions business how much voluntary uh you know Workforce turnover have you seen at Healthcare Solutions since the acquisition and is that kind of more or less in line with what you would have expected at this point?

Rafael Carrasco: But overall, it's a good story. I think during Investor Day, I talked about the continued receptivity to sort of the qualitative approach and the accountability we're driving into business. A lot of them are really eager for that integration into the areas that I spoke about as well, where we're going to then have a culture of ownership of the business much more at the site. Got it. All right.

Well, if if you're talking about sort of the hourly Workforce, actually we've seen an improvement in turnover since the, since the acquisition. I think that has a lot to do with sort of the human-centered approach to leadership that we're driving down throughout the organization, obviously, sort of in the managerial corporate support ranks and all that. That's somewhat impacted by, you know, the uh, attainment of some of our sgna targets, Etc. But overall, it's a good story. I think. During an investor day, I talked about the continued receptivity to sort of the quality.

Ative approach and the accountability would drive it in the business. A lot of them, um, are really eager for that, uh, in integration into the areas that I spoke about as well, where we're going to then, um, have a culture of ownership of the business, much more at the site level.

Brian Bergmeier: Got it. All right, thank you very much.

Trevor Romeo: Got it. All right, thank you very much.

Unknown Executive: Thank you very much. Thank you.

Operator: Thank you. Our next question coming from the lineup, Konark Gupta with Scotiabank. Your line is now open.

Konark Gupta: Our next question coming from the lineup, Konark Gupta with Scotiabank, your line is now open. Thanks, and good morning. I just wanted to follow up on the volume set of things. The residential contract loss you talked about. I mean, I'm just wondering if there's a domino effect you would expect from these things in that market, considering obviously, the customer could be price sensitive, perhaps. So do you expect any more follow-ons with this? Oh, actually, I mentioned earlier, what I've looked at, we're going to we're going to lap a handful of contracts in July, and then later in the year in October, which is one of the reasons why I think we feel confident about the volume loss to moderate by the end of the year Q4, the exit rate will be sub three, 3%.

Got it. All right. Thank you very much.

Thank you.

Brian Bergmeier: Thanks and good morning. Just wanted to follow up on the volume side of things. The residential contract loss you talked about. I mean, I'm just wondering if there's.

Konark Gupta: Thanks and good morning. Just wanted to follow up on the volume side of things. The residential contract loss you talked about. I mean, I'm just wondering if there's. A dominant effect you would expect from. These things in that market, considering obviously the customer could be price sensitive. Perhaps. So do you expect any more follow ons with this?

Our next question comes from the line of Canard Gupta with Scotia Bank. Canard, you may go ahead.

Jim Fish: A dominant effect you would expect from.

Brian Bergmeier: These things in that market, considering obviously the customer could be price sensitive. Perhaps. So do you expect any more follow ons with this?

Jim Fish: Well, actually I mentioned earlier what I've looked at. We're going to lap a handful of contracts in July and then later the year in October, which is one of the reasons why I think we feel confident about the volume loss to moderate by the end of the year. Q4, the exit rate will be sub 3%. And the other comment I mentioned is worth repeating is when you look at the quality of the business we have; we've got about 70% of that revenue addressed at an EBITDA margin that's acceptable today. So we've certainly shrunk the opportunity here while we're improving the overall business. And I think over the next half, full quarters, as I mentioned, you're going to see moderation in the volume losses. Okay. No, thanks for that.

John Morris: Well, actually I mentioned earlier what I've looked at. We're going to lap a handful of contracts in July and then later the year in October, which is one of the reasons why I think we feel confident about the volume loss to moderate by the end of the year. Q4, the exit rate will be sub 3%. And the other comment I mentioned is worth repeating is when you look at the quality of the business we have; we've got about 70% of that revenue addressed at an EBITDA margin that's acceptable today. So we've certainly shrunk the opportunity here while we're improving the overall business. And I think over the next half, full quarters, as I mentioned, you're going to see moderation in the volume losses.

Hey, good morning. Um, just wanted to follow up on, on the volume set of things. Um, the residential contract allows to talk about, um, I mean I'm just wondering if there is a domino effect you would expect from these things in in that market. Um, considering obviously the customer could be price sensitive perhaps. Uh, so do you expect any more? Follow follow, follow on with this.

Unknown Executive: And the other comment I mentioned is worth repeating is when you look at the quality of the business we have, we've got about 70% of that revenue addressed at an EBITDA margin that's acceptable today. So we've certainly shrunk the opportunity here while we're improving the overall business. And I think over the next handful quarters, like as I mentioned, you're going to see moderation in the volume Again, thanks for that. Yeah. I don't see that. I think these are all kind of stand-alone contracts. And this one, as John said earlier, this is one that, you know, we bid it at a certain price.

Konark Gupta: Okay. No, thanks for that.

No, actually, uh, I mentioned earlier what I've looked at. We're going to we're going to lap a handful of contracts in July. And then, later in the year in October, which is 1 of the reasons why, I think we feel confident about the volume loss to moderate by the end of the year. Q4 the exit rate will be sub 3, uh, 3%. And the other comment I mentioned is worth repeating, is when you look at the quality of the business, we have. We've got about 70% of that Revenue addressed at a at an ebit margin. That's acceptable today. So we've certainly Shrunk the opportunity here, while we're improving the overall business. And I think over the next handful of quarters, you're like, as I mentioned, you're going to see moderation in the volume losses.

Jim Fish: No, yeah. I don't see that as – I think these are, these are all one by one standalone contracts. That and this one, as John said earlier, this is one that you know, we bid it at a certain price. It was not a positive for us. And so when it came out for RFP, we bid at a certain price and to the extent that it doesn't hit that price and we lose the contract. Okay. It's as you said John, it's kind of addition by subtraction. We really don't mention these individually except for this one was fairly significant and it really was what drove the difference between the historic revenue, excuse me, volume loss and residential and where we were. But again we'll see that return to normal and improve through the balance of the year. Again I appreciate the color on that.

Jim Fish: No.

Konark Gupta: Yeah.

Jim Fish: I don't see that as – I think these are, these are all one by one standalone contracts. That and this one, as John said earlier, this is one that you know, we bid it at a certain price. It was not a positive for us. And so when it came out for RFP, we bid at a certain price and to the extent that it doesn't hit that price and we lose the contract. Okay. It's as you said John, it's kind of addition by subtraction.

Okay, and thanks for that domino effect.

Necessarily know. Yeah.

I think these are all standalone contracts.

Unknown Executive: It was not a positive for us. So when it came out for RFP, we bid at a certain price and We really don't mention these individually, except for this one was fairly significant and it really was what drove the difference between the historic revenue, excuse me, volume loss in residential and where we were. But again, we'll see that return to normal and improved. Again, I appreciate the color on that.

Does. John said earlier, this is 1. That's, you know, we, we bid it at a certain price it was it was it was not a positive for us and so when they came out for for RFP, we bid it at a certain price.

John Morris: We really don't mention these individually except for this one was fairly significant and it really was what drove the difference between the historic revenue, excuse me, volume loss and residential and where we were. But again we'll see that return to normal and improve through the balance of the year.

Konark Gupta: Again I appreciate the color on that. Just to follow up on Stericycle, the SG&A seems like. It's tracked down further to about like 20% and change. How do you see the bridge to the full $250 million synergy you expect? Over the next three years or two years maybe now from 20% to the guidance you had?

Jim Fish: Just to follow up on Stericycle, the SG&A seems like.

Okay. It's as you said, John, it's kind of auditioned by some, and we really don't mention these individually, except for this one, which was fairly significant and really was what drove the difference between the historic revenue, uh, excuse me, volume loss in residential and where we were. But again, we'll see that return to normal and improve through the balance of the year.

Rafael Carrasco: And then just to follow up on the start cycle, the SG&A seems like it's it's tracked down further to about like 20% and change. How do you see the bridge to the full $250 million synergy you expect over the next three years or two years, maybe now, from 20% to the guidance you had? Yeah, so again, Rafa here, Konark. So you're right, we hit I think 20.9% is the number that on an adjusted basis for the quarter. We're driving that number to continue to lower it and finish hopefully below 20% at the end of this year.

Brian Bergmeier: It's tracked down further to about like 20% and change. How do you see the bridge to the full $250 million synergy you expect?

Jim Fish: Over the next three years or two.

Brian Bergmeier: Years maybe now from 20% to the guidance you had?

Again, I appreciate the call on that. And then just to follow up on the start side, um, the SG&A seems like it's tracked down further to about 20% and change. Um, how do you see the bridge to the full $250 million synergy you expect over the next 3 years or 2 years, maybe now?

Rafa: Yeah, so again, Rafa here, Konark, so you're right, we hit I think 20.9% is the number that on that adjusted basis for the quarter, we're driving that number to continue to lower it and finish hopefully below 20% at the end of this year. The aspiration is to be at 17% at the end of the three year horizon. And if you think about that, just to kind of give you some perspective, the average in 2023 and 2024 for the legacy business was approaching 25%. So what we're talking about here is a nearly 800 basis points reduction over that three year horizon. But we continue to think and be positive about the aspiration long term beyond that three years to lower it closer to the legacy business that 10% or lower.

Rafa Carrasco: Yeah, so again, Rafa here, Konark, so you're right, we hit I think 20.9% is the number that on that adjusted basis for the quarter, we're driving that number to continue to lower it and finish hopefully below 20% at the end of this year. The aspiration is to be at 17% at the end of the three year horizon. And if you think about that, just to kind of give you some perspective, the average in 2023 and 2024 for the legacy business was approaching 25%. So what we're talking about here is a nearly 800 basis points reduction over that three year horizon. But we continue to think and be positive about the aspiration long term beyond that three years to lower it closer to the legacy business that 10% or lower.

From 20% up to the guidance, you end.

Rafael Carrasco: The aspiration is to be at 17% at the end of the three year horizon. And if you think about that, just to kind of give you some perspective, the average in 23 and 24 for the legacy business was approaching 25%. So what we're talking about here is a nearly 800 basis points reduction over that three year horizon. But we continue to think and be positive about the aspiration long term beyond that three years to lower it closer to the legacy business, that 10% or lower. And that's because by then once we get past the ERP issues, we're going to be able to leverage some of the platforms and self service capabilities that we've leveraged for the WM business as a whole.

Rafa: That's because, by then, once we get past ERP issues, we're going to be able to leverage some of the platforms and self-service capabilities that we've leveraged for the WM business as a whole. So a lot more runway there.

That's because, by then, once we get past ERP issues, we're going to be able to leverage some of the platforms and self-service capabilities that we've leveraged for the WM business as a whole. So a lot more runway there.

Unknown Executive: And so a lot more runway there. I appreciate the time. Thank you.

Yeah, so the again Rafa here Kumar. So, um, you're right. We, we, we hit, I think 20.9%, is the number that on an adjusted basis, for, for the quarter, we're driving that number to continue to lower it and finish. Hopefully, below 20% at the end of this year, the aspirations is to be at 17% at the end of the 3 year Horizon and if you think about that just to kind of give you some perspective, the average in 23 and 24 for the Legacy business was approaching 25%. So what we're talking about here is a nearly 800 basis points of reduction over that 3 year Horizon. But we continue to think, uh, and and be positive about the aspiration long term, beyond that 3 years to lower it closer to the Legacy business that 10% or, or or lower. And that's because by, then once we get past the Erp issues, we're going to be able to leverage some of the platforms and self-service capabilities that we've leveraged for the w.

Brian Bergmeier: I appreciate the time. Thank you.

Konark Gupta: I appreciate the time. Thank you.

Business as a whole and so a lot more Runway there.

Operator: Thank you. Our next question coming from the line of Tobey Sommer with Truist. Line is now open.

Yeah, I appreciate the time. Thank you.

Unknown Executive: Our next question coming from the lineup, Tobey Sommer with Truist. Your line is now open. Thank you very much. I wanted to ask sort of a follow up on your Investor Day themes. One of them was related to the landfill advantage because of the useful life. When do you think that starts to manifest? And how do you see the initial years impacting the company in terms of pricing and other financial impacts? Well, I think it's I think it's kind of manifesting itself already, which was part of my points earlier. And and I think that only continues the chart we showed does show that as you get into 25 and beyond Atlanto capacity for the industry really does.

Brian Bergmeier: Thank you very much. Wanted to ask sort of a follow-up on your investor day themes. One of them was related to the landfill advantage because of the useful life. When do you think that starts to manifest, and how do you see the initial years impacting the company in terms of pricing and other financial impacts?

Tobey Sommer: Thank you very much. Wanted to ask sort of a follow-up on your investor day themes. One of them was related to the landfill advantage because of the useful life. When do you think that starts to manifest, and how do you see the initial years impacting the company in terms of pricing and other financial impacts?

Thank you. Our next question is coming from the lineup. It will be from Truist, Neil, and is now open.

Thank you very much. Um, I wanted to ask sort of a follow-up on your Investor Day themes. One of them was related to the landfill advantage.

Um, because of the useful life when

you think that starts to manifest and

How do you see the?

Years. Uh,

Jim Fish: Well, I think it's kind of manifesting itself already, which was part of my point earlier. And I think that only continues. The chart we showed does show that as you get into 2025 and beyond, that landfill capacity for the industry really does start to get constrained. We're in a better position both geographically and also length of life than the rest of the industry. So that's why we feel that that is a separator for us. But I do think you're starting to see that already.

Impacting the company in terms of pricing and other financial impacts.

Well, I think it's, I think it's kind of manifesting itself already, which was part of my points, uh, earlier.

And and I think that only continues the the chart we showed does show that as you get into 25 and Beyond.

That landfill capacity for the industry, really does?

Unknown Executive: We're in a better position both geographically and also length of life than the rest of the industry. So that's why we feel that that is a separator for us. But I do think you're starting to see that already.

Start to to get constrained. We're in a better position both geographically and and also uh length of life than the rest of the industry. So that's why we feel that that is a separator for us. But I do think you're starting to see that already.

Unknown Executive: And is there a year in which you think that that sort of impact becomes most, most acute or most visible externally? I think that well, sorry, John, the one year I forget what the one year was on the slide that showed the biggest reduction in capacity, it might have been 20. So that may be, if I were to point to a year, and I'm not sure that it's easy to point to a year, but certainly the biggest year on the chart was kind of early. I think what I would point to is, I mentioned the internalization rate kind of ticking up the last couple of years.

Brian Bergmeier: Is there a year in which you think that that sort of impact becomes most acute or most visible externally?

Tobey Sommer: Is there a year in which you think that that sort of impact becomes most acute or most visible externally?

Jim Fish: I think. Well, sorry, John, the one, I forget what the one year was on the slide that showed the biggest reduction in capacity. It might have been 2030 or 2032, something like that. So that may be if I were to point to a year, and I'm not sure that it's easy to point to a year, but certainly the biggest year on the chart was kind of early 2030s. I think what I would point to is I mentioned the internalization rate kind of ticking up the last couple of years. There's a handful of markets on the West Coast, in Florida, in the Mid-Atlantic, and Northeast, where we're actually moving volumes differently than we did a couple of years ago. And it's because of the value of our network and our, in a lot of cases, our intermodal capabilities.

John Morris: I think what I would point to is I mentioned the internalization rate kind of ticking up the last couple of years. There's a handful of markets on the West Coast, in Florida, in the Mid-Atlantic, and Northeast, where we're actually moving volumes differently than we did a couple of years ago. And it's because of the value of our network and our, in a lot of cases, our intermodal capabilities. To Jim's point, while the peak might be 2033, we're investing in it now because it doesn't happen overnight. It's an incremental shift. That's why I think you're seeing us benefit on the volume and on the price side.

And is there a year in which you think that that sort of impact becomes most uh most acute or most visible externally? I think the well sorry John the 1 you I forget what the 1 year was on the slide that showed the, the biggest reduction in capacity, it might have been 2030 or 2032 something like that. So that may be uh, if I were to point to a year and I'm not sure that it's it's easy to point to a year, but but certainly the, you know, the the biggest year on the chart was, was kind of early 2030s

Unknown Executive: There's a handful of markets on the West Coast, in Florida, in the Mid-Atlantic and Northeast where we're actually moving volumes differently than we did a couple of years ago, and it's because of the value of our network and our, in a lot of cases, our intermodal capabilities.

I I think excellent but I would point to is I mentioned the internalization rate and kind of ticking up the last couple of years. There's a handful of markets on the west coast in Florida. Uh

Jim Fish: To Jim's point, while the peak might be 2033, we're investing in it now because it doesn't happen overnight. It's an incremental shift. That's why I think you're seeing us benefit on the volume and on the price side.

Unknown Executive: And to Jim's point, while the peak might be 2033, we're investing in it now because it doesn't happen overnight. It's an incremental shift, and that's why I think you're seeing us benefit on the volume and on the price. Understood.

Brian Bergmeier: Understood. And then last question for me on the WMHS side, what's your current thinking about internalizing the fleet and other incremental things you can do for the business that aren't part of your synergy target presently?

Tobey Sommer: Understood. And then last question for me on the WMHS side, what's your current thinking about internalizing the fleet and other incremental things you can do for the business that aren't part of your synergy target presently?

We're actually moving volumes differently than we did a couple of years ago, and it's because of the value of our network and, in a lot of cases, our intermodal capabilities. To Jim's point, while the peak might be 2033, we're investing in it now because it doesn't happen overnight. It's an incremental shift, and that's why I think you're seeing us benefit on the volume and on the price side.

Unknown Executive: And then last question for me on the WHS side.

Unknown Executive: What's your current thinking about that internalizing the fleet and other incremental things you can do for the business that aren't part of your synergy target presently? Well, Devina kind of referenced kind of the internalization of the fleet, right? And then there's really no benefit in accelerating the payment of those leases, we would have had to basically pay full price anyway. So what we've done is kind of create a similar fleet strategy to what we have a WM legacy business, which is to smooth out the capital kind of intensity of that year over year. And then in the meantime, we're laying down the groundwork to be able to actually support the maintenance and repair at the local level of that fleet, that's going to start showing itself in the OPEC synergy sometimes towards the beginning of 2020.

Rafa: Well, Davina kind of referenced kind of the internalization of the fleet. Right. And then there's really no benefit in accelerating the payment of those leases. We would have had to basically pay full price anyway. So what we've done is kind of create a similar fleet strategy to what we have at WM legacy business, which is to smooth out the capital kind of intensity of that year over year. And then in the meantime, we're laying down the groundwork to be able to actually support the maintenance and repair at the local level of that fleet. That's going to start showing itself in the OpEx synergies sometimes towards the beginning.

Rafa Carrasco: Well, Davina kind of referenced kind of the internalization of the fleet. Right. And then there's really no benefit in accelerating the payment of those leases. We would have had to basically pay full price anyway. So what we've done is kind of create a similar fleet strategy to what we have at WM legacy business, which is to smooth out the capital kind of intensity of that year over year. And then in the meantime, we're laying down the groundwork to be able to actually support the maintenance and repair at the local level of that fleet. That's going to start showing itself in the OpEx synergies sometimes towards the beginning of 2026.

Understood. And then, uh, last question for me on the WHS side. What's your current thinking about internalizing the fleet and other, uh, incremental things you can do for the business that aren't part of your Synergy Target presently?

Jim Fish: Of 2026, maybe the other place, Rafa, then. And I don't know how much we have built in on this front, but if you think about real estate, I mean, all of these trucks. Trucks sit on property. And so as I look at Houston, for example, we're opening a new hauling company, a large facility that's replacing an old one here in town. And so that has a fair amount of open space to it. It's possible. I don't know that we baked this in necessarily, but it's possible that you can relocate fleet from and save on real estate cost. That's not something I think we've spent a lot of time, time and effort on, you know, quantifying, but I do think there's that. That's a second or third benefit that we could see.

Jim Fish: Maybe the other place, Rafa, then. And I don't know how much we have built in on this front, but if you think about real estate, I mean, all of these trucks. Trucks sit on property. And so as I look at Houston, for example, we're opening a new hauling company, a large facility that's replacing an old one here in town. And so that has a fair amount of open space to it. It's possible. I don't know that we baked this in necessarily, but it's possible that you can relocate fleet from and save on real estate cost. That's not something I think we've spent a lot of time, time and effort on, you know, quantifying, but I do think there's that. That's a second or third benefit that we could see.

Unknown Executive: Maybe the other place, Rafael, and I don't know how much we have built in on this front, but if you think about real estate, all of these trucks sit on property, and so as I look at Houston, for example, we're opening a new hauling company, a large facility that's replacing an old one here in town, and so that's got, that has a fair amount of open space to it. It's possible, and I don't know that we've baked this in necessarily, but it's possible that you can relocate fleets from and save on real estate costs. That's not something I think we've spent a lot of time and effort on.

Well, uh, Davina kind of referenced kind of the internalization of the fleet, right? And then we there's really no benefit in accelerating the payment of those leases we would have had to basically pay full price anyway. So what we've done is kind of create a similar Fleet strategy to what we have at WM Legacy business, which is to smooth out, the capital kind of intensity of that year-over-year. And then in the meantime, we're laying down the groundwork to be able to actually support the maintenance and repair. The local level of that Fleet, that's going to start showing itself in the opic Synergy sometimes to towards the beginning of 2026.

Uh, Hauling Company, a large facility, is replacing an old one.

Unknown Executive: Quantifying, but I do think there's, that's a second or third.

Here in town, and so that's got, that has a fair amount of open space to it. It's possible. I don't know that we've baked this in necessarily, but it's possible that you can relocate Fleet from and save on real estate costs. That's not something I think we've spent a lot of time and effort on.

Unknown Executive: Yeah, that's fair, Jim. And I think I think maybe just overarchingly, you can think about us beginning to put the WM way across every facility that we do consolidate. And as we bring fleet forward, we're going to have that WM way approach also in maintenance and repairs.

Rafa: Yeah, that's fair, Jim. And I think maybe just overarchingly, you can think about us beginning to put the WM Way across every facility that we do consolidate. And as we bring fleet forward, we're going to have that WM Way approach also in maintenance and repairs.

Rafa Carrasco: Yeah, that's fair, Jim. And I think maybe just overarchingly, you can think about us beginning to put the WM Way across every facility that we do consolidate. And as we bring fleet forward, we're going to have that WM Way approach also in maintenance and repairs.

Unknown Executive: Thank you.

Brian Bergmeier: Thank you.

Tobey Sommer: Thank you.

Finding. But I do think there's, that's a a second or third benefit that we can see. Yeah, that that's fair Jim. And I think, I think maybe just overarching you can think about us being in, to put the WM away across every facility that we do consolidate and as we bring Fleet forward, we're going to have that W approached also in maintenance and repairs.

Operator: Thank you. Our next question coming from the lineup. Stephanie Moore with Jefferies. Your line is now open.

Stephanie Moore: Our next question coming from the line of Stephanie Moore with Jeffreys. Your line is now open. Hi, good morning. Thank you.

Thank you.

Toni Kaplan: Hi, good morning. Thank you. Maybe just a follow-up to a question that was asked earlier, but as you think about maybe the puts and takes to normal seasonality in terms of the margin cadence in the second half of the year, I think there's a couple things that we need to work through in terms of just ramping of synergies, volume, environment, and the like. So, you know, the best that you can, maybe Davina, just talk through how you kind of expect the second half cadence to look in light of normal seasonality and the events this year. Thanks.

Stephanie Moore: Hi, good morning. Thank you. Maybe just a follow-up to a question that was asked earlier, but as you think about maybe the puts and takes to normal seasonality in terms of the margin cadence in the second half of the year, I think there's a couple things that we need to work through in terms of just ramping of synergies, volume, environment, and the like. So, you know, the best that you can, maybe Davina, just talk through how you kind of expect the second half cadence to look in light of normal seasonality and the events this year. Thanks.

Thank you. Our next question, coming from the line of Stephanie Moore with Jeffreys, your line is now open.

Devina Rankin: Maybe just a follow up to a question that was asked earlier, but as you think about the maybe the puts and takes to normal seasonality in terms of the margin cadence in the second half of the year, I think there's a couple of things that we need to work through in terms of just ramping of synergies, you know, the volume environment and the like. So, you know, to the best that you can, maybe Devina just talk through how you kind of expect the second half cadence to look in light of normal seasonality and the events this year.

Devina Rankin: Thanks. Sure, so the way that I think you can think about it is usually we have a 70 to 100 basis point benefit going from first half into second half. And I expect that to be slightly muted in the collection and disposal business because of landfill volumes that we've discussed, but then it should increase, as I mentioned earlier, on the WM Healthcare Solutions side, the drag associated with the acquisition of a business on the consolidated results should lessen. In the first half of the year, it's been about 145 basis points and we think that that could improve to call it 125, 35 basis points in the second half of the year.

Devina Rankin: Sure. So the way that I think you can think about it is usually we have a 70 to 100 basis point benefit going from first half into second half. And I expect that to be slightly muted in the collection and disposal business because of landfill volume that we've discussed, but then it should increase as I mentioned earlier on the WM Healthcare Solutions side, the drag associated with the acquisition of the business on the consolidated results should lessen. In the first half of the year it's been about 145 basis points and we think that that could improve to call it 125 to 132 basis points in the second half of the year. And then the recycling business, which I mentioned, you should have a 10 basis point help in the second half of the year from lower commodity prices.

Hi, good morning, thank you. Um, muted the follow up to a question that was asked earlier. But as you think about the, maybe the puts and takes to normal seasonality in terms of the margin Cadence in the second half of the year, I think there's um a couple things that we need to work through. In terms of just ramping up Synergy, you know, the volume environment and the like. So you know this is the best that you can maybe deina just talk through how you kind of expect the second half Cadence to to look um in light of normal seasonality and and the events of this year, thanks.

In the first half of the year it's been about 145 basis points and we think that that could improve to call it 125 to 132 basis points in the second half of the year. And then the recycling business, which I mentioned, you should have a 10 basis point help in the second half of the year from lower commodity prices. I think that will help you understand first half versus second half.

Jim Fish: And then the recycling business, which I mentioned, you should have a 10 basis point help in the second half of the year from lower commodity prices. So I think that will help you understand first half versus second half. Well, and then to be in also the eight plants, the renewable energy plants, and those are definitely margin accretive and those we knew going in that these plants that that that we're building are pretty much back in loaded. So we have, we still have eight plants. I think one of those might bleed into first half, but it doesn't, it doesn't affect the EBITDA really, but, but eight plants that tears opening at the end of the year.

Devina Rankin: I think that will help you understand first half versus second half.

Brian Bergmeier: Well.

Jim Fish: Well, and then, Davina, also the eight plants, the renewable energy plants, those are definitely margin accretive, and those we knew going in that these plants that we're building are pretty much back-end loaded. So we still have eight plants. I think one of those might bleed into first half, but it doesn't affect the EBITDA really. But eight plants that are opening at the end of the year between Q3 and Q4, those will have more so in 2026. But have a margin accretive impact.

Sure. So, the way that I think you can think about it is usually we have a 70 to 100 basis point benefit going from first half into second half and I expect that to be slightly muted in the collection and Disposal business because of landfill volumes that we've discussed, but then it should increase. As I mentioned earlier on the WM Healthcare Solutions, side, the drag associated with, um, the acquisition of a business on the Consolidated result should lessen. Um, in the first half of the year, it's been about 145 basis points, and we think that that could improve to call it 125.35 basis points in the second half of the year. Um, and then the recycling business, which I mentioned, you should have a 10 basis point help in the second half of the Year from, uh, lower commodity prices. So I, I think that will help you understand.

Jim Fish: And then, Davina, also the eight plants, the renewable energy plants, those are definitely margin accretive, and those we knew going in that these plants that we're building are pretty much back-end loaded. So we still have eight plants. I think one of those might bleed into first half, but it doesn't affect the EBITDA really. But eight plants that are opening at the end of the year between Q3 and Q4, those will have more so in 2026. But have a margin accretive impact.

Um, first half versus the second half. Well and then deina.

so the the 8 plants the renewable energy,

Unknown Executive: Those will have a more so at 26, but have a. Got it.

They're definitely margin of creative. And and those I mean we we knew going in that these plants that that uh that were building are pretty much back in loaded so we have we still have 8 plants. I think 1 of those might bleed into the first half but it does, it doesn't affect the iot really? But uh, but 8 plants that the tears opening at the end of the year would stay between the third quarter and fourth quarter and those will have a more so in 26. But

Devina Rankin: Exactly.

Toni Kaplan: Got it. No, that's helpful. And then just lastly, again, clarification, if you could talk a little bit about the M and A environment in particular, you know, anything that you can speak to in terms of pipeline, then just give us an update of what's embedded in the new and the updated FY guidance based on M and A year to date. Thank you.

Stephanie Moore: Got it. No, that's helpful. And then just lastly, again, clarification, if you could talk a little bit about the M and A environment in particular, you know, anything that you can speak to in terms of pipeline, then just give us an update of what's embedded in the new and the updated FY guidance based on M and A year to date. Thank you.

I would have a margin of Creative Impact.

Stephanie Moore: No, that's helpful. And then just lastly, again, clarification, if you could talk a little bit about the M&A environment in particular, you know, anything that you can speak to in terms of pipeline, and then just give us an update of what's embedded in the updated failure guidance based on M&A year-to-date. Thank you. Yeah, Stephanie, I'll address the pipeline. You know, Jim talked in his prepared remarks, we've got about $500 million in for this year. We did a fairly significant size regional acquisition in D.C. last quarter. We've done some other normal tuck-in acquisitions, and we have one fairly sizable one that we're hopeful we're going to get closed probably between Q3 and Q4.

Exactly.

Jim Fish: Yeah, Stephanie, I'll address the pipeline. You know, Jim talked in his prepared remarks. We've got about $500 million in for this year. We did a fairly significant size regional acquisition in D.C. last quarter. We've done some other normal tuck in acquisitions, and we have one fairly sizable one that we're hopeful we're going to get closed probably between Q3 and Q4, but as usual we remain disciplined. But to your question on pipeline, the pipeline remains strong. We've talked about last year being probably one of our strongest years, and a lot of that's carried over into this year. So we feel good about where we're at at this point in the year. And then in terms of what's embedded, Davina, I'll let you maybe on the.

John Morris: Yeah, Stephanie, I'll address the pipeline. You know, Jim talked in his prepared remarks. We've got about $500 million in for this year. We did a fairly significant size regional acquisition in D.C. last quarter. We've done some other normal tuck in acquisitions, and we have one fairly sizable one that we're hopeful we're going to get closed probably between Q3 and Q4, but as usual we remain disciplined. But to your question on pipeline, the pipeline remains strong. We've talked about last year being probably one of our strongest years, and a lot of that's carried over into this year. So we feel good about where we're at at this point in the year. And then in terms of what's embedded, Davina, I'll let you maybe on the revenue.

Got it. No, that's helpful. And then just lastly, again, clarification if you could talk a little bit about the, the m&a environment in particular, um, you know, anything that you can speak to, in terms of Pipeline and then just give us an update of what's embedded in the new, in the updated, fill your guidance, um, based on m&a year to date. Thank you.

Unknown Executive: But as usual, we remain disciplined. But to your question on pipeline, the pipeline remains strong. We've talked about last year being probably one of our strongest years, and a lot of that's carried over into this year. So we feel good about where we're at at this point in the year. And then in terms of what's embedded to me, I'll let you know. I don't have that number specifically.

Devina Rankin: Revenue, I don't have that number specifically, so. Heather will get back to you.

Devina Rankin: I don't have that number specifically, so Heather will get back to you.

Yeah, Stephanie, I'll I'll address the pipeline. I, you know, Jim, we talked to this prepared a more because we've got about 500 million in, uh, in for this year. Uh, we did a, a fairly, uh, significant size Regional uh, acquisition in DC, uh, last quarter, we've done some other normal tucking Acquisitions and we have 1 fairly sizeable 1. That we're hopeful we're going to get close to, uh, probably between Q3, uh, and Q4. But as usual, we remain disciplined. But to your question on Pipeline, the pipeline remains remains, uh strong. We've talked about last year, being probably 1 of our strongest years and a lot of that's carried over uh into this year. So we feel good about where we're at at this point in the year and then in terms of what's embedded in, I'll let you maybe on the revenue.

Faiza Alwy: And Heather, we'll get back to you. Thank you guys. Appreciate it. Thank you.

I, I don't have that number specifically, so.

Toni Kaplan: Thank you guys, appreciate it.

Stephanie Moore: Thank you guys, appreciate it.

Well, we'll, and Heather, we'll get back to you.

Operator: Thank you. Our next question coming from the lineup, Faiza Alwi with Deutsche Bank. Your line is now open.

Devina Rankin: Our next question coming from the lineup, Faiza Alwy with Deutsche Bank. Your line is now open. Yes, hi, thank you. I wanted to follow up on the collection and disposal margins. I think you mentioned 110 basis points improvement year over year in those margins. So I want to make sure I'm getting that right. And that sort of suggests, you know, stronger margin growth in the back half than I would have thought considering, you know, you're saying that landfill, this was sort of the quarter for landfill volume. So could you talk about some of the, you know, maybe if there's other drivers around better margin performance in the collection and disposal business?

Thank you guys. Appreciate it.

Toni Kaplan: Yes, hi. Thank you. I wanted to follow up on the collection and disposal margins. I think you mentioned 110 basis points improvement year over year in those margins. So I want to make sure I'm getting that right. That sort of suggests, you know, stronger margin growth in the back half than I would have thought, considering, you know, you're saying that landfill, this was sort of the peak quarter for landfill volume. So could you talk about some of the, you know, maybe if there's other drivers around, better margin performance in the collection and disposal business.

Faiza Alwy: Yes, hi. Thank you. I wanted to follow up on the collection and disposal margins. I think you mentioned 110 basis points improvement year over year in those margins. So I want to make sure I'm getting that right. That sort of suggests, you know, stronger margin growth in the back half than I would have thought, considering, you know, you're saying that landfill, this was sort of the peak quarter for landfill volume. So could you talk about some of the, you know, maybe if there's other drivers around, better margin performance in the collection and disposal business.

Thank you. Our next question. Coming from the line of fisa. I will be do Bank.

Devina Rankin: Sure, so the collection and disposal business margin improvement was 110 basis points in the quarter, and about 40 basis points of that is efficiency and price cost spread, and the remaining portion really is mix and landfill volumes in particular. And that's before the impact of the alternative fuel tax credit, so the alternative fuel tax credit was a headwind to that of 30 basis points, so you put all of that together and you're at 80 basis points margin expansion for collection and disposal. I actually expect that to moderate in the second half because of the mix and landfill volume impact that I just mentioned being about 70 basis points in Q2, so you'll have some moderation of that into the second half.

Devina Rankin: Sure. So the collection and disposal business margin improvement was 110 basis points in the quarter, and about 40 basis points of that is efficiency and price cost spread. And the remaining portion really is mix and landfill volumes in particular. And that's before the impacts of the alternative fuel tax credit. So the alternative fuel tax credit was a headwind to that of 30 basis points. So you put all of that together, and you're at 80 basis points margin expansion for collection and disposal. I actually expect that to moderate in the second half because of the mix and landfill volume impact that I just mentioned, being about 70 basis points in Q2. So you'll have some moderation of that in Q2 into the second half.

In the collection and disposal business,

Devina Rankin: However, going from first half to second half, you normally have a 70 to 100 basis point improvement in collection and disposal volume just because of seasonality.

Devina Rankin: However, going from first half to second half, you normally have a 70 to 100 basis point improvement in collection and disposal volume just because of seasonality. So hopefully that helps clarify what the bits and pieces are. But we're really happy because all of this pulls together to say that the traditional solid waste business is going to have 30 basis points better margin in 2025 than we expected coming into the year.

However, going from first half to second half, you normally have a 70 to 100 basis point improvement in collection and disposal volume just because of seasonality. So hopefully that helps clarify what the bits and pieces are. But we're really happy because all of this pulls together to say that the traditional solid waste business is going to have 30 basis points better margin in 2025 than we expected coming into the year.

Sure. So the collection and Disposal business margin Improvement was 110 basis points in the quarter. Um and about 40 basis points of that is efficiency and price cost spread and the remaining portion really is mixed and landfill volumes in particular. Um, when and and that's before the impacts of the alternative fuel tax credit, so the alternative fuel tax credit was a headwind to that of 30 basis points. So you put all of that together and you're at 80 basis points margin expansion for collection and Disposal. I actually expect that to moderate in the second half because of the mix and landfill volume impact that I just mentioned being about 70 basis points in Q2. So you'll have some moderation of that into the second half. However, going from first half to second half, you normally have a 70 to 100 basis, point Improvement in

Devina Rankin: So hopefully that helps clarify what the bits and pieces are, but we're really happy because all of this pulls together to say that the traditional solid waste business is going to have 30 basis points better margin in 2025 than we expected. Understood. And then when you initially gave the guide for 25, you've given us, you know, a lot of color around your expectations for EBITDA for the, you know, various pieces of the business. So I'm curious with the, you know, with the update today, and just given the change in commodity prices, if you could perhaps update us on, you know, what you're expecting for EBITDA from EBITDA contribution from Stericycles specifically this year, and maybe the sustainability projects.

Collection and disposal volume, just because of seasonality.

Toni Kaplan: Understood. And then when you initially gave the guide for 25, you'd given us a lot of color around your expectations for EBITDA for the various pieces of the business. So I'm curious with the update today and just given the change in commodity prices, if you could perhaps update us on, you know, what you're expecting for EBITDA from EBITDA, contribution from Stericycle specifically this year, and maybe the sustainability projects. I think you said $270 to 290 million previously. So just any update on the other pieces would be really helpful.

Faiza Alwy: Understood. And then when you initially gave the guide for 25, you'd given us a lot of color around your expectations for EBITDA for the various pieces of the business. So I'm curious with the update today and just given the change in commodity prices, if you could perhaps update us on, you know, what you're expecting for EBITDA from EBITDA, contribution from Stericycle specifically this year, and maybe the sustainability projects. I think you said $270 to 290 million previously. So just any update on the other pieces would be really helpful.

So hopefully that helps clarify what the bits and pieces are, but we're really happy because all of this pulls together to say that the traditional Solid Waste business is going to have 30 basis points that are margin in 2025 than we expected coming into the year.

Devina Rankin: I think you said 270 to 290 million previously. So just any update on the other pieces would be really helpful. Sure. So what I would tell you is that with us confirming $7.55 billion in EBITDA for the total company for the year, really the only take that we've had in the entire mix has been from the recycling part of our business. And there's about a $15 million decrease expected in the EBITDA associated with commodity prices, and another $10 million associated with some cost increases that we've had in that part of our business. And that's really the only part of the business where there was any sort of decrease in the expectations.

Devina Rankin: Sure. So what I would tell you is that with us confirming $7.55 billion in EBITDA for the total company for the year, really the only take that we've had in the entire mix has been from the recycling part of our business. And there's about a $15 million decrease expected in the EBITDA associated with commodity prices, and another $10 million associated with some cost increases that we've had in that part of the business. And, and that's really the only part of the business where there was any sort of decrease in the expectations. And the increase is coming from the strength of collection and disposal, and a little bit of benefit from higher than expected synergy realization. So going from the midpoint of $90 million to the high end of that of $100 million indicates incremental value that we're retaining.

Understood and then when you initially gave the guide for 25, you would given us, you know, a lot of color around your expectations for IBA for the, you know, various pieces of the business. So I'm curious with the, you know, with the update today. Um, and just given the change in commodity prices. If you could perhaps update us on, you know what you're expecting for ebida from ibida contribution. From Styles specifically this year, and maybe the sustainability projects, I think you said 270 to 290 million previously. Um, so just any update on the other pieces would be really helpful. Sure. So, what I would tell you is that with us confirming 7.555 billion in ibida for the total company for the year. Really, the only take that we've had in the entire mix has been from the recycling part of our business, and

And, and that's really the only part of the business where there was any sort of decrease in the expectations. And the increase is coming from the strength of collection and disposal, and a little bit of benefit from higher than expected synergy realization. So going from the midpoint of $90 million to the high end of that of $100 million indicates incremental value that we're retaining.

Devina Rankin: And the increase is coming from the strength of collection and disposal, and a little bit of benefit from higher than expected synergy realization. So going from the midpoint of $90 million to the high end of that of $100 million indicates incremental value that we're retaining. Some of that shows up in the healthcare solutions business, but some of it also shows up in collection and disposal. So I would say all of the pieces that come to the total are really in hand with the exception of the recycling business, which I mentioned at $25 million. All right, thank you very much.

There's about a 15 million dollar decrease expected in the EAA associated with commodity prices and another 10 million dollars associated with some cost red cost increases that we've had in that part of our business. Um, and that's really the only part of the business where there was any sort of decrease in the expectations. And the increase is coming from the strength of collection and Disposal and, um, a little bit of benefits from higher than expected.

Devina Rankin: Some of that shows up in the healthcare solutions business, but some of it also shows up in collection and disposal. So I would say all of the pieces that come to the total are really in hand with the exception of the recycling business, which I mentioned at $25 million.

Some of that shows up in the healthcare solutions business, but some of it also shows up in collection and disposal. So I would say all of the pieces that come to the total are really in hand with the exception of the recycling business, which I mentioned at $25 million.

Toni Kaplan: All right. Thank you very much.

Faiza Alwy: All right. Thank you very much.

With Synergy realization so going from the midpoint of 90 million to the high end of that of of a hundred million dollars, indicates incremental value that we're retaining. Some of that shows up in the healthcare Solutions business, but some of it also shows up in collection and Disposal. So I would say all of the pieces that come to the total are really in hand, with the exception of the recycling business, which I mentioned at 25 million.

Unknown Executive: Thank you.

Operator: Thank you. And I'm showing no further questions at this time. I'll now turn the call back over to Mr. Jim Fish, CEO, for any closing remarks.

All right. Thank you very much.

Operator: And I'm showing no further questions at this time.

Thank you.

Jim Fish: I will now turn the call back over to Mr. Jim Fisk, CEO, for any closing remarks. Okay, well, thank you so much for your questions this morning, very good questions. We certainly look forward to next quarter and talking to you again.

Jim Fish: Okay. Well, thank you so much for your questions this morning. Very good questions, and we certainly look forward to next quarter and talking to you again after Q3.

And I'm showing over the questions at this time. I'll now turn the call back over to Mr. Jim fits CEO for any closing remarks

Operator: This concludes today's conference. Thank you for your participation. You may now disconnect.

Operator: This concludes today's conference. Thank you for your participation and you may now disconnect.

Okay, well, thank you so much for, uh, your questions this morning. Very good questions and and we uh, we certainly look forward to uh, next quarter and talking to you again, uh, after 2:30.

today's conference, thank you for your participation and you may now disconnect

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