Waste Connections Reports First Quarter 2026 Results

Better than expected Q1 results, with improving trends positioning for upside to 2026 outlook Revenue of $2.371 billion, above expectations and up 6.4% year over year Net income of $219.3 million and adjusted EBITDA(a) of $769.5 million, above expectations and up 8.0% year over year Adjusted EBITDA margin(a) of 32.5%, above expectations and up 50 basis points year over year Net income and adjusted net income(a) per share of $0.86 and $1.23, respectively Year-to-date share repurchases of 1% of outstanding shares Waste Connections, Inc. (TSX/NYSE: WCN) (“Waste Connections” or the “Company”) today announced its results for the first quarter of 2026. “We’re extremely pleased by the strong start to 2026 and remain well-positioned for the full year, with upside potential from commodity-related impacts, solid waste organic growth and additional acquisitions. On revenue and adjusted EBITDA above our expectations, we delivered adjusted EBITDA(a) margin of 32.5% in spite of outsized weather events and in advance of recovering higher fuel costs,” said Ronald J. Mittelstaedt, President and Chief Executive Officer. “In spite of geopolitical instability, our results reflect consistency of execution as we continue to benefit from operating momentum from improved employee engagement, with safety performance at record levels and voluntary turnover now below 10%,” continued Mr. Mittelstaedt. “Moreover, we should be well-positioned for incremental benefits from higher fuel and other commodities, as well as strong pricing retention and increased special waste activity, and also longer term as a result of our expanding use of A.I. through technology-related investments.” Mr. Mittelstaedt concluded, “Finally, we continue to anticipate another outsized year of acquisition activity, given a robust pipeline, along with increasing return of capital to shareholders, including year-to-date share repurchases of over $360 million or approximately 1% of shares outstanding.” Q1 2026 Results Revenue in the first quarter totaled $2.371 billion, up from $2.228 billion in the prior year period. Operating income was $364.1 million, which included $80.4 million primarily in impairments related to adjustments to landfill closure and post closure costs. This compares to operating income of $390.2 million in the prior year period, which included $20.2 million primarily in transaction-related expenses, impairments and other operating items and fair value accounting changes associated with certain equity awards. Net income in the first quarter was $219.3 million, or $0.86 per share on a diluted basis of 255.9 million shares. In the prior year period, the Company reported net income of $241.5 million, or $0.93 per share on a diluted basis of 258.9 million shares. Adjusted net income(a) in the first quarter was $314.9 million, or $1.23 per diluted share, up from $293.1 million, or $1.13 per diluted share, in the prior year period. Adjusted EBITDA(a) in the first quarter was $769.5 million, up from $712.2 million in the prior year period. Adjusted net income, adjusted net income per diluted share and adjusted EBITDA, all non-GAAP measures, primarily exclude impairments and transaction-related items, as reflected in the detailed reconciliations in the attached tables. Q1 2026 Earnings Conference Call Waste Connections will be hosting a conference call related to first quarter earnings on April 23rd at 8:30 A.M. Eastern Time. A live audio webcast of the conference call can be accessed by visiting investors.wasteconnections.com and selecting "Events & Presentations" from the website menu. Alternatively, conference call participants can preregister by clicking here. Registered participants will receive dial-in instructions and a personalized code for entry to the conference call. Shortly after the conclusion of the conference call, a webcast replay will be available on the Waste Connections investor website or by clicking here. About Waste Connections Waste Connections (wasteconnections.com) is an integrated solid waste services company that provides non-hazardous waste collection, transfer and disposal services, including by rail, along with resource recovery primarily through recycling and renewable fuels generation. The Company serves approximately nine million residential, commercial and industrial customers in mostly exclusive and secondary markets across 46 states in the U.S. and six provinces in Canada. Waste Connections also provides non-hazardous oilfield waste treatment, recovery and disposal services in several basins across the U.S. and Canada, as well as intermodal services for the movement of cargo and solid waste containers in the Pacific Northwest. Waste Connections views its Environmental, Social and Governance (“ESG”) efforts as integral to its business, with initiatives consistent with its objective of long-term value creation and focused on reducing emissions, increasing resource recovery of both recyclable commodities and clean energy fuels, reducing reliance on off-site disposal for landfill leachate, further improving safety and enhancing employee engagement. Visit wasteconnections.com/sustainability for more information and updates on our progress towards targeted achievement. Safe Harbor and Forward-Looking Information This press release contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 ("PSLRA"), including "forward-looking information" within the meaning of applicable Canadian securities laws. These forward-looking statements are neither historical facts nor assurances of future performance and reflect Waste Connections' current beliefs and expectations regarding future events and operating performance. These forward-looking statements are often identified by the words "may," "might," "believes," "thinks," "expects," "estimate," "continue," "intends" or other words of similar meaning. All of the forward-looking statements included in this press release are made pursuant to the safe harbor provisions of the PSLRA and applicable securities laws in Canada. Forward-looking statements involve risks and uncertainties. Forward-looking statements in this press release include, but are not limited to, statements about expected 2026 financial results, outlook and related assumptions, and potential acquisition activity. Important factors that could cause actual results to differ, possibly materially, from those indicated by the forward-looking statements include, but are not limited to, risk factors detailed from time to time in the Company's filings with the SEC and the securities commissions or similar regulatory authorities in Canada. You should not place undue reliance on forward-looking statements, which speak only as of the date of this press release. Waste Connections undertakes no obligation to update the forward-looking statements set forth in this press release, whether as a result of new information, future events, or otherwise, unless required by applicable securities laws. – financial tables attached – (a) Non-GAAP measure; see accompanying Non-GAAP Reconciliation Schedule. WASTE CONNECTIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME THREE MONTHS ENDED MARCH 31, 2025 AND 2026 (Unaudited) (in thousands of U.S. dollars, except share and per share amounts) Three months ended March 31, 2025 2026 Revenues $ 2,228,176 $ 2,370,631 Operating expenses: Cost of operations 1,291,443 1,361,099 Selling, general and administrative 250,134 251,119 Depreciation 242,307 267,485 Amortization of intangibles 47,642 47,264 Impairments and other operating items 6,440 79,584 Operating income 390,210 364,080 Interest expense (80,875 ) (87,719 ) Interest income 1,770 3,113 Other income, net 1,872 4,085 Income before income tax provision 312,977 283,559 Income tax provision (71,467 ) (64,215 ) Net income $ 241,510 $ 219,344 Earnings per common share: Basic $ 0.94 $ 0.86 Diluted $ 0.93 $ 0.86 Shares used in the per share calculations: Basic 258,193,975 255,347,786 Diluted 258,904,806 255,873,686 Cash dividends per common share $ 0.315 $ 0.350 WASTE CONNECTIONS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands of U.S. dollars, except share and per share amounts) December 31, 2025 March 31, 2026 ASSETS Current assets: Cash and equivalents $ 45,968 $ 112,447 Accounts receivable, net of allowance for credit losses of $21,402 and $27,828 at December 31, 2025 and March 31, 2026, respectively 1,024,992 1,033,086 Prepaid expenses and other current assets 240,603 230,786 Total current assets 1,311,563 1,376,319 Restricted cash 183,612 210,199 Restricted investments 80,757 80,397 Property and equipment, net 8,733,327 8,714,069 Operating lease right-of-use assets 312,508 324,034 Goodwill 8,392,249 8,414,577 Intangible assets, net 2,006,200 1,959,957 Other assets, net 109,147 106,803 Total assets $ 21,129,363 $ 21,186,355 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 765,227 $ 712,423 Book overdraft 14,674 8,560 Deferred revenue 416,025 424,835 Accrued liabilities 810,367 745,013 Current portion of operating lease liabilities 44,272 46,335 Current portion of contingent consideration 65,029 61,945 Current portion of long-term debt and notes payable 8,667 8,355 Total current liabilities 2,124,261 2,007,466 Long-term portion of debt and notes payable 8,811,104 9,093,831 Long-term portion of operating lease liabilities 267,000 278,167 Long-term portion of contingent consideration 19,667 19,216 Deferred income taxes 1,085,613 1,113,470 Other long-term liabilities 576,337 616,586 Total liabilities 12,883,982 13,128,736 Commitments and contingencies Shareholders’ equity: Common shares: Unlimited shares authorized; 255,661,011 shares issued and 255,614,663 shares outstanding at December 31, 2025; 254,260,257 shares issued and 254,213,909 shares outstanding at March 31, 2026 2,783,431 2,502,503 Additional paid-in capital 373,239 366,546 Accumulated other comprehensive loss (111,044 ) (141,783 ) Treasury shares: 46,348 and 46,348 shares at December 31, 2025 and March 31, 2026, respectively - - Retained earnings 5,199,755 5,330,353 Total shareholders’ equity 8,245,381 8,057,619 Total liabilities and shareholders’ equity $ 21,129,363 $ 21,186,355 WASTE CONNECTIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS THREE MONTHS ENDED MARCH 31, 2025 AND 2026 (Unaudited) (in thousands of U.S. dollars) Three months ended March 31, 2025 2026 Cash flows from operating activities: Net income $ 241,510 $ 219,344 Adjustments to reconcile net income to net cash provided by operating activities: Loss from disposal of assets, impairments and other 7,778 2,519 Adjustments to closure and post-closure liabilities - 76,845 Depreciation 242,307 267,485 Amortization of intangibles 47,642 47,264 Deferred income taxes, net of acquisitions 36,165 28,537 Current period provision for expected credit losses 2,470 12,105 Amortization of debt issuance costs 2,034 2,163 Share-based compensation 23,438 17,587 Interest accretion 12,737 11,200 Adjustments to contingent consideration (1,500 ) - Other (1,013 ) 127 Net change in operating assets and liabilities, net of acquisitions (72,029 ) (139,578 ) Net cash provided by operating activities 541,539 545,598 Cash flows from investing activities: Payments for acquisitions, net of cash acquired (380,417 ) (63,087 ) Capital expenditures for property and equipment (212,455 ) (296,596 ) Proceeds from disposal of assets 969 1,779 Other (11,308 ) 2,203 Net cash used in investing activities (603,211 ) (355,701 ) Cash flows from financing activities: Proceeds from long-term debt 782,904 1,156,176 Principal payments on notes payable and long-term debt (541,737 ) (843,898 ) Payment of contingent consideration recorded at acquisition date (20,137 ) (4,108 ) Change in book overdraft (110 ) (6,114 ) Payments for repurchase of common shares - (283,959 ) Payments for cash dividends (81,477 ) (88,746 ) Tax withholdings related to net share settlements of equity-based compensation (28,981 ) (24,515 ) Debt issuance costs - (4,008 ) Proceeds from issuance of shares under employee share purchase plan 2,593 3,031 Proceeds from sale of common shares held in trust 324 - Net cash provided by (used in) financing activities 113,379 (96,141 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash (434 ) (690 ) Net increase in cash, cash equivalents and restricted cash 51,273 93,066 Cash, cash equivalents and restricted cash at beginning of period 198,173 229,580 Cash, cash equivalents and restricted cash at end of period $ 249,446 $ 322,646 ADDITIONAL STATISTICS (in thousands of U.S. dollars, except where noted) Solid Waste Internal Growth: The following table reflects a breakdown of the components of our solid waste internal growth for the three months ended March 31, 2026: Three months ended March 31, 2026 Yield(a) 4.7 % Surcharges (0.1 %) Unit Volume(a) (1.5 %) Recycling (0.5 %) Foreign Exchange Impact 0.5 % Total 3.1 % Core Price(b) 6.0 % ____________________________ (a) In the first quarter of 2026, WCN began providing a breakdown of organic growth in solid waste collection, transfer and disposal to include Yield and Unit Volume, which are performance metrics used by management to evaluate the effectiveness of our pricing and organic growth strategies. Yield, or change in average price per unit of service, reflects the impacts of customer churn and new business activity and the resulting mix by line of business and by geographic segment; Unit Volume reflects estimated change in units of activity. (b) Core Price is defined as the revenue growth attributable to price increases, net of rollbacks, on solid waste collection, transfer and disposal customers. This definition is consistent with Core Price references provided in prior periods. Revenue Breakdown: The following table reflects a breakdown of our revenue for the three-month periods ended March 31, 2025 and 2026: Three months ended March 31, 2025 Revenue Inter-company Elimination Reported Revenue % Solid Waste Collection $ 1,621,077 $ (4,536 ) $ 1,616,541 72.5 % Solid Waste Disposal and Transfer 658,023 (296,282 ) 361,741 16.2 % Solid Waste Recycling 61,341 (2,084 ) 59,257 2.7 % E&P Waste Treatment, Recovery and Disposal 150,899 (6,374 ) 144,525 6.5 % Intermodal and Other 46,549 (437 ) 46,112 2.1 % Total $ 2,537,889 $ (309,713 ) $ 2,228,176 100.0 % Three months ended March 31, 2026 Revenue Inter-company Elimination Reported Revenue % Solid Waste Collection $ 1,709,628 $ (5,182 ) $ 1,704,446 71.9 % Solid Waste Disposal and Transfer 714,624 (328,515 ) 386,109 16.3 % Solid Waste Recycling 53,649 (2,061 ) 51,588 2.2 % E&P Waste Treatment, Recovery and Disposal 187,572 (8,013 ) 179,559 7.6 % Intermodal and Other 49,346 (417 ) 48,929 2.0 % Total $ 2,714,819 $ (344,188 ) $ 2,370,631 100.0 % ADDITIONAL STATISTICS (continued) (in thousands of U.S. dollars, except where noted) Contribution from Acquisitions: The following table reflects revenues from acquisitions, net of divestitures, for the three- month periods ended March 31, 2025 and 2026: Three months ended March 31, 2025 2026 Acquisitions, net $ 129,298 $ 55,253 Other Cash Flow Items: The following table reflects cash interest and cash taxes for the three-month periods ended March 31, 2025 and 2026: Three months ended March 31, 2025 2026 Cash Interest Paid $ 84,154 $ 108,244 Cash Taxes Paid 22,176 21,873 Debt to Book Capitalization at March 31, 2026: 53% Internalization for the three months ended March 31, 2026: 60% Days Sales Outstanding for the three months ended March 31, 2026: 39 (23 net of deferred revenue) Share Information for the three months ended March 31, 2026: Basic shares outstanding 255,347,786 Dilutive effect of equity-based awards 525,900 Diluted shares outstanding 255,873,686 NON-GAAP RECONCILIATION SCHEDULE (in thousands of U.S. dollars, except where noted) Reconciliation of Adjusted EBITDA: Adjusted EBITDA, a non-GAAP financial measure, is provided supplementally because it is widely used by investors as a performance and valuation measure in the solid waste industry. Management uses adjusted EBITDA as one of the principal measures to evaluate and monitor the ongoing financial performance of Waste Connections’ operations. Waste Connections defines adjusted EBITDA as net income, plus income tax provision, plus interest expense, less interest income, plus depreciation and amortization expense, plus closure and post-closure accretion expense, plus or minus any loss or gain on impairments and other operating items, plus other expense, less other income. Waste Connections further adjusts this calculation to exclude the effects of other items management believes impact the ability to assess the operating performance of its business. This measure is not a substitute for, and should be used in conjunction with, GAAP financial measures. Other companies may calculate adjusted EBITDA differently. Three months ended March 31, 2025 2026 Net income $ 241,510 $ 219,344 Plus: Income tax provision 71,467 64,215 Plus: Interest expense 80,875 87,719 Less: Interest income (1,770) (3,113) Plus: Depreciation and amortization 289,949 314,749 Plus: Closure and post-closure accretion 11,874 10,291 Plus: Impairments and other operating items 6,440 79,584 Less: Other income, net (1,872) (4,085) Adjustments: Plus: Transaction-related expenses(a) 11,970 2,360 Plus/(Less): Fair value changes to equity awards(b) 1,770 (1,536) Adjusted EBITDA $ 712,213 $ 769,528 As % of revenues 32.0% 32.5% ____________________________(a) Reflects the addback of acquisition-related transaction costs. (b) Reflects fair value accounting changes associated with certain equity awards. NON-GAAP RECONCILIATION SCHEDULE (continued) (in thousands of U.S. dollars, except where noted) Reconciliation of Adjusted Free Cash Flow: Adjusted free cash flow, a non-GAAP financial measure, is provided supplementally because it is widely used by investors as a liquidity measure in the solid waste industry. Waste Connections calculates adjusted free cash flow as net cash provided by operating activities, plus or minus change in book overdraft, plus proceeds from disposal of assets, less capital expenditures for property and equipment. Waste Connections further adjusts this calculation to exclude the effects of items management believes impact the ability to evaluate the liquidity of its business operations. This measure is not a substitute for, and should be used in conjunction with, GAAP liquidity or financial measures. Other companies may calculate adjusted free cash flow differently. Three months ended March 31, 2025 2026 Net cash provided by operating activities $ 541,539 $ 545,598 Less: Change in book overdraft (110 ) (6,114 ) Plus: Proceeds from disposal of assets 969 1,779 Less: Capital expenditures for property and equipment (212,455 ) (296,596 ) Adjustments: Transaction-related expenses(a) 2,392 1,614 Pre-existing Progressive Waste share-based grants(b) 16 - Executive separation costs(c) 449 - Tax effect(d) (725 ) (404 ) Adjusted free cash flow $ 332,075 $ 245,877 As % of revenues 14.9 % 10.4 % (a) Reflects the addback of acquisition-related transaction costs. (b) Reflects the cash settlement of pre-existing Progressive Waste share-based awards during the period. (c) Reflects the cash component of severance expense associated with an executive departure from 2023. (d) The aggregate tax effect of footnotes (a) through (c) is calculated based on the applied tax rates for the respective periods. NON-GAAP RECONCILIATION SCHEDULE (continued) (in thousands of U.S. dollars, except per share amounts) Reconciliation of Adjusted Net Income and Adjusted Net Income per Diluted Share: Adjusted net income and adjusted net income per diluted share, both non-GAAP financial measures, are provided supplementally because they are widely used by investors as valuation measures in the solid waste industry. Management uses adjusted net income and adjusted net income per diluted share as one of the principal measures to evaluate and monitor the ongoing financial performance of Waste Connections’ operations. Waste Connections provides adjusted net income to exclude the effects of items management believes impact the comparability of operating results between periods. Adjusted net income has limitations due to the fact that it excludes items that have an impact on the Company’s financial condition and results of operations. Adjusted net income and adjusted net income per diluted share are not a substitute for, and should be used in conjunction with, GAAP financial measures. Other companies may calculate these non-GAAP financial measures differently. Three months ended March 31, 2025 2026 Reported net income $ 241,510 $ 219,344 Adjustments: Amortization of intangibles(a) 47,642 47,264 Impairments and other operating items(b) 6,440 79,584 Transaction-related expenses(c) 11,970 2,360 Fair value changes to equity awards(d) 1,770 (1,536 ) Tax effect(e) (16,212 ) (32,136 ) Adjusted net income $ 293,120 $ 314,880 Diluted earnings per common share: Reported net income $ 0.93 $ 0.86 Adjusted net income $ 1.13 $ 1.23 (a) Reflects the elimination of the non-cash amortization of acquisition-related intangible assets. (b) Reflects the addback of impairments and other operating items. (c) Reflects the addback of acquisition-related transaction costs. (d) Reflects fair value accounting changes associated with certain equity awards. (e) The aggregate tax effect of the adjustments in footnotes (a) through (d) is calculated based on the applied tax rates for the respective periods. Source: Waste Connections, Inc.