Waste Connections Reports Q2 2026 Results: Full Earnings Call Transcript

Waste Connections (TSX: WCN ) reported second-quarter financial results on Thursday. The transcript from the company's second-quarter earnings call has been provided below. This content is powered APIs. 4% increase year-over-year, exceeding expectations.

8%, overcoming cost pressures such as rising fuel costs. 34 billion. 9% due to macroeconomic uncertainty. Renewable natural gas projects are ahead of schedule, with most capital outlays expected to be complete by year-end 2026.

M&A activity remains strong, with acquisitions totaling approximately $100 million in annualized revenue year-to-date. The company is managing Chiquita Canyon Landfill impacts within expectations, with no change to 2026 free cash flow projections. AI initiatives are contributing to financial performance, with pricing tools already yielding $20 million in EBITDA improvements. Management maintains a positive outlook for the remainder of the year, citing improving commodity trends and potential acquisition synergies.

Full Transcript OPERATOR Hello everyone. Thank you for joining us, and welcome to the Waste Connections Q2 2026 earnings call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad.

To withdraw your question, please press star 1 again. I will now hand the call over to Ron Mittelstadt, President and CEO. Ron, please go ahead. Ron Mittelstadt, President and CEO Okay, thank you, operator, and good morning everyone.

I'd like to welcome everyone to this conference call to discuss our second quarter results and increased outlook for 2026. I am joined this morning by members of our senior management team, including our CFO, Marianne Whitney, who will first provide our forward-looking disclaimer and other housekeeping items. Mary Anne Whitney, EVP - CFO Thank you, Ron, and good morning. S.

Private Securities Litigation Reform Act of 1995, including forward-looking information within the meaning of applicable Canadian securities laws. Actual results could differ materially from those made in such forward-looking statements due to various risks and uncertainties. S. Securities and Exchange Commission and the securities commissions or similar regulatory authorities in Canada.

You should not place undue reliance on forward-looking statements, as there may be additional risks of which we are not presently aware or that we currently believe are immaterial, which could have an adverse impact on our business. We make no commitment to revise or update any forward-looking statements in order to reflect events or circumstances that may change after today's date. On the call, we will discuss non-GAAP measures such as adjusted EBITDA, adjusted net income on both a dollar basis and per diluted share, and adjusted free cash flow. Please refer to our earnings releases for a reconciliation of such non-GAAP measures to the most comparable GAAP measures.

Management uses certain non-GAAP measures to evaluate and monitor the ongoing financial performance of our operations. Other companies may calculate these non-GAAP measures differently. I will now turn the call back over to Ron. Ron Mittelstadt, President and CEO Okay, thank you, Marianne.

We are extremely pleased by the strength of our first half performance, which positioned us for an increase to our full year 2026 outlook, with momentum for upside from improving trends in commodities and ongoing acquisition activity. Q2 growth of over 6% in both revenue and EBITDA exceeded our expectations in spite of the macroeconomic effects related to ongoing uncertainty in the geopolitical environment. Our results reflect continued benefits from both multi-year improvements in employee retention and record safety performance, and more recent investments in AI technology, all underpinned by disciplined operational execution.

8% on 70 basis points of underlying margin expansion, overcoming cost pressures primarily from rapidly spiking fuel and related costs, in addition to ongoing drags from lower commodity values compared to last year's Q2. 6%. 9%, reflecting the ongoing macroeconomic uncertainty which has limited growth in solid waste activity. Further, recent elevated fuel costs have impacted the pace and magnitude of construction-related activity, some of which was paused during Q2.

In addition, customer sensitivity to higher overall pricing resulting from fuel-related surcharges likely exacerbated churn in certain markets. Acknowledging these dynamics, while special waste tons were down year over year in Q2, we have been impressed by activity in July, which may be an indication that the slowdown was temporary. Additionally, we were encouraged to see C&D tons up year over year in Q2 for the first time in 10 quarters, with some projects continuing thus far in Q3. Looking at other lines of business, we