WM · 8-K · 20261027PR119188

Operating Margin Drivers

WASTE MANAGEMENT INC · 2026-10-27 · Importance 18 · Surprise 14

Third-quarter adjusted operating EBITDA increased 5.8% to $2.121 billion, while adjusted operating EBITDA margin declined 10 basis points year over year to 31.0%. Favorable Collection and Disposal price-to-cost spread contributed 40 basis points to adjusted margin, and Healthcare Solutions operating performance added 30 basis points. Higher fuel costs and increased risk management costs each reduced adjusted margin by 40 basis points. Reported operating expenses increased to 59.8% of revenue from 58.9%; Collection and Disposal efficiency improved that ratio by 40 basis points, more than offset by 130 basis points of dilution primarily from fuel and risk-management costs.

Key facts

• WM's adjusted operating EBITDA increased 5.8% in the third quarter, driven by strong price-to-cost spread in Collection and Disposal and growing contributions from healthcare and sustainability businesses. source
• WM's internalization of waste, based on disposal costs, was 72.3% for the first nine months of 2026, compared with 71.4% in the prior-year period. source
• Favorable price-to-cost spread in Collection and Disposal contributed 40 basis points to adjusted operating EBITDA margin, while Healthcare Solutions operating performance contributed 30 basis points. source
• Higher fuel costs and increased risk management costs each reduced WM's adjusted operating EBITDA margin by 40 basis points; overall, adjusted operating EBITDA margin compressed 10 basis points year over year. source