Business Context and Reporting Period
Company: Waste Connections, Inc.
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal year ended December 31, 2025
Business Overview: Waste Connections is the third-largest solid waste services company in North America, operating in 46 U.S. states and six Canadian provinces. The company provides non-hazardous waste collection, transfer, and disposal services, along with resource recovery (recycling and renewable fuels) and oil and natural gas exploration and production (E&P) waste treatment. The company operates through six geographic segments: Southern, Western, Eastern, Central, Canada, and MidSouth.
Key Financial Metrics
| Metric | 2025 | 2024 | Change |
|---|---|---|---|
| Total Revenues | $9.467 billion | $8.920 billion | +6.1% |
| Net Income (Attributable to Waste Connections) | $1.077 billion | $617.6 million | +74.0% |
| Adjusted EBITDA | $3.125 billion | $2.902 billion | +7.7% |
| Adjusted EBITDA Margin | 33.0% | 32.5% | +0.5 pp |
| Operating Income | $1.710 billion | $1.068 billion | +60.2% |
| Operating Margin | 18.1% | 12.0% | +6.1 pp |
| Net Cash from Operating Activities | $2.414 billion | $2.229 billion | +8.3% |
| Total Indebtedness | $8.889 billion | $8.152 billion | +9.0% |
| Leverage Ratio (Debt/EBITDA) | 2.75x | 2.67x | +0.08x |
| Cash and Equivalents | $46.0 million | $62.4 million | -26.3% |
Material Changes Versus Prior Period
- Revenue Growth: Driven by a 6.4% increase in core pricing and $377.2 million in incremental revenue from acquisitions. Organic growth was partially offset by a 2.8% decline in volumes due to the intentional shedding of lower-quality revenue and lower recycled commodity prices.
- Profitability Surge: Net income increased significantly (74%) primarily due to a substantial reduction in "Impairments and other operating items," which dropped from $613.0 million in 2024 to $109.7 million in 2025. The 2024 figure included a $480.8 million charge related to the Chiquita Canyon Landfill closure and a $116.1 million impairment.
- Cost Management: Cost of operations as a percentage of revenue decreased from 58.2% to 57.6%, aided by lower fuel costs and increased internalization of waste streams.
- Acquisitions: The company completed 19 acquisitions in 2025 with a net fair value of $966.8 million, compared to 24 acquisitions valued at $2.228 billion in 2024.
Guidance, Outlook, and Risks
- Capital Allocation: The company returned $839.3 million to shareholders in 2025 via dividends ($333.8 million) and share repurchases ($505.5 million). The quarterly dividend was increased to $0.35 per share in October 2025. A Normal Course Issuer Bid (NCIB) is active to repurchase up to 12.86 million shares through August 2026.
- Capital Expenditures: 2025 capital expenditures were $1.179 billion. The company expects 2026 capital expenditures to be approximately $1.250 billion, funded by cash on hand, internal funds, and borrowings.
- Key Risks and Contingencies:
- Chiquita Canyon Landfill: Active waste disposal operations ceased at the Chiquita Canyon Landfill (Western segment) as of December 31, 2024, due to regulatory constraints and an Elevated Temperature Landfill (ETLF) event. The company faces ongoing litigation, including mass tort actions with approximately 11,700 plaintiffs, and regulatory enforcement actions regarding odors and leachate. The company states it cannot reasonably estimate the potential loss.
- Regulatory Environment: Significant exposure to evolving regulations regarding PFAS (per- and polyfluoroalkyl substances), methane emissions, and landfill permitting. New Canadian Landfill Methane Regulations came into force in December 2025.
- Commodity Prices: Results are sensitive to recycled commodity prices and renewable fuel credit (RIN) values, both of which have been volatile.
- Debt and Interest Rates: Approximately $2.182 billion of debt is at variable rates, exposing the company to interest rate fluctuations.
Investor Verification Checklist
- Chiquita Canyon Litigation Status: Verify the latest developments in the mass tort litigation and regulatory penalties associated with the Chiquita Canyon Landfill ETLF event, as the company has stated it cannot estimate the potential loss.
- Acquisition Integration: Assess the integration progress and financial performance of the 19 acquisitions completed in 2025, which contributed significantly to revenue growth.
- Landfill Permitting: Review the status of the six probable landfill expansion projects mentioned in the filing, as permitting delays could impact future capacity and growth.
- PFAS Liability Exposure: Monitor regulatory updates regarding PFAS, as new rules could significantly increase closure and post-closure costs and remediation liabilities.
- Debt Maturity Profile: Examine the maturity schedule of the $8.889 billion debt portfolio, noting the $2.382 billion revolver maturing in 2029 and various senior notes maturing between 2028 and 2052.