Waste Connections Raises Outlook as Pricing Offsets Falling Volumes
Waste Connections (WCN) lifted its full-year revenue guidance to $10.02 billion-$10.05 billion after second-quarter revenue rose 6.4% to $2.562 billion, even as unit volumes fell for a second straight quarter.
Waste Connections (WCN) raised its full-year 2026 outlook after second-quarter revenue climbed 6.4% to $2.562 billion, matching the growth rate posted in the first quarter. The solid-waste hauler now expects full-year revenue of $10.02 billion to $10.05 billion and adjusted EBITDA of $3.33 billion to $3.34 billion, up from the $9.90 billion–$9.95 billion revenue and $3.300 billion–$3.325 billion adjusted EBITDA range it set alongside fourth-quarter results.
The steady top-line growth masks a shift in how Waste Connections is getting there. Total internal growth in the solid-waste business reached 3.6% in the quarter, made up of 4.6% in yield and pricing against a 1.9% decline in unit volume, worse than the 1.7% six-month volume decline the company had already flagged. Waste Connections began breaking out unit volume as a separate metric only this year, and the widening gap shows core pricing, up 5.6%, increasingly carrying growth that used to come from both price and volume.
Adjusted EBITDA rose 6.8% to $840.1 million from $786.4 million a year earlier, a slower pace than the 8.0% growth logged in the first quarter and the 8.7% growth in the fourth quarter of 2025. Adjusted EBITDA margin came in at 32.8%, up 70 basis points from a year ago but still nearly a full point below the 33.8% and 33.5% margins posted in the third and fourth quarters of 2025, respectively. Margin expansion has continued on a year-over-year basis even as the sequential trend has reversed.
Operating income fell to $437.6 million from $459.5 million a year earlier, pressured by a $58.5 million landfill closure and post-closure impairment charge. That followed an $80.4 million impairment in the first quarter and a $39.1 million charge in the fourth quarter of 2025, marking three consecutive quarters of elevated landfill-related charges compared with the smaller adjustments the company had historically recorded.
Acquisition activity contributed far less to the top line than a year ago. Acquisitions net added $45.8 million to second-quarter revenue, down from $112.9 million in the year-earlier period, and $101.0 million over the first six months versus $242.2 million a year earlier. Waste Connections has characterized 2026 as an outsized year for deal activity, pointing to more than $100 million in annualized acquired revenue closed so far, suggesting the slower reported contribution reflects timing rather than a pullback in dealmaking.
Cash generation improved. Adjusted free cash flow margin rose to 17.9% of revenue from 15.2% a year earlier, a reversal from the 14.3% six-month figure that had been running below the prior year's 15.1%. The jump came largely from higher operating cash flow, $733.3 million versus $638.2 million a year earlier.
Waste Connections took on more debt to fund the quarter's activity. Long-term debt rose to $9.28 billion at June 30 from $8.81 billion at the end of 2025, following a senior notes offering of more than $1.5 billion in March that was used to repay revolver borrowings. Interest expense rose to $91.2 million from $82.8 million a year earlier as a result.
The company also raised its quarterly dividend to $0.350 a share from $0.315, an 11% increase consistent with the 11.1% increase disclosed a year earlier, and stepped up share repurchases to a record $614.5 million year-to-date, roughly 1.5% of shares outstanding, up from $360 million disclosed at the end of the first quarter.