WM · Earnings call · 2026Q3T · Full report

Operating Margin Drivers

WASTE MANAGEMENT INC · 2026-10-27 · Importance 31 · Surprise 32

Third-quarter operating EBITDA margin was 31%, with company operating expenses remaining below 60% of revenue despite a 70-basis-point fuel-cost headwind. Favorable price-to-cost spread in collection and disposal added 40 basis points of underlying margin expansion, and health care solutions cost management and pricing added 30 basis points. Higher fuel costs reduced margin by 40 basis points, while increased risk management costs reduced it by another 40 basis points; the latter included a $63 million year-over-year increase in risk costs, of which $40 million was in corporate and other and $23 million in collection and disposal.

Key facts

• WM's third-quarter 2026 operating EBITDA grew 5.8%, driven by strong price-to-cost spread in collection and disposal and growing contributions from health care and sustainability.
• WM's third-quarter 2026 operating EBITDA grew 5.8%.
• WM maintained a third-quarter 2026 operating EBITDA margin of 31% despite strong fuel headwinds.
• WM's collection and disposal business had 40 basis points of underlying margin expansion from favorable price-to-cost spread in the third quarter of 2026.
• WM's health care solutions business contributed 30 basis points of margin expansion from cost management and pricing growth in the third quarter of 2026.
• Waste Management said recycling volumes were up and more volume was being directed to its recycling plants, contributing to a higher internalization rate.