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Yahoo
20 hours ago
- Business
- Yahoo
C.H. Robinson Worldwide (NASDAQ:CHRW) Misses Q2 Sales Targets
Freight transportation intermediary C.H. Robinson (NASDAQ:CHRW) fell short of the market's revenue expectations in Q2 CY2025, with sales falling 7.7% year on year to $4.14 billion. Its non-GAAP profit of $1.29 per share was 11.4% above analysts' consensus estimates. Is now the time to buy C.H. Robinson Worldwide? Find out in our full research report. C.H. Robinson Worldwide (CHRW) Q2 CY2025 Highlights: Revenue: $4.14 billion vs analyst estimates of $4.16 billion (7.7% year-on-year decline, 0.6% miss) Adjusted EPS: $1.29 vs analyst estimates of $1.16 (11.4% beat) Adjusted EBITDA: $217.6 million vs analyst estimates of $219.1 million (5.3% margin, 0.7% miss) Operating Margin: 5.2%, up from 4% in the same quarter last year Free Cash Flow Margin: 0%, down from 3.3% in the same quarter last year Market Capitalization: $11.85 billion "When the current transformation of C.H. Robinson began in early 2024 with the implementation of a new Lean operating model, we recognize that some people had doubts and didn't understand how this would enable the company to change its trajectory. Now, with six consecutive quarters of consistent outperformance through the disciplined execution of the strategy that we shared at our 2024 Investor Day, there is no doubt in our minds that we are on the right path to deliver sustainable outperformance in all market cycles," said President and Chief Executive Officer, Dave Bozeman. Company Overview Engaging in contracts with tens of thousands of transportation companies, C.H. Robinson (NASDAQ:CHRW) offers freight transportation and logistics services. Revenue Growth Reviewing a company's long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Regrettably, C.H. Robinson Worldwide's sales grew at a sluggish 2.4% compounded annual growth rate over the last five years. This was below our standards and is a rough starting point for our analysis. Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. C.H. Robinson Worldwide's performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 8% annually. C.H. Robinson Worldwide isn't alone in its struggles as the Air Freight and Logistics industry experienced a cyclical downturn, with many similar businesses observing lower sales at this time. C.H. Robinson Worldwide also breaks out the revenue for its most important segments, North American surface transportation and Global Forwarding, which are 70.5% and 19.3% of revenue. Over the last two years, C.H. Robinson Worldwide's North American surface transportation revenue (transportation brokerage) averaged 8.6% year-on-year declines while its Global Forwarding revenue (worldwide ocean, air, customers ) was flat. This quarter, C.H. Robinson Worldwide missed Wall Street's estimates and reported a rather uninspiring 7.7% year-on-year revenue decline, generating $4.14 billion of revenue. Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months. Although this projection indicates its newer products and services will spur better top-line performance, it is still below the sector average. Software is eating the world and there is virtually no industry left that has been untouched by it. That drives increasing demand for tools helping software developers do their jobs, whether it be monitoring critical cloud infrastructure, integrating audio and video functionality, or ensuring smooth content streaming. Click here to access a free report on our 3 favorite stocks to play this generational megatrend. Operating Margin Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It's also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes. C.H. Robinson Worldwide's operating margin has been trending up over the last 12 months and averaged 4.3% over the last five years. The company's higher efficiency is a breath of fresh air, but its suboptimal cost structure means it still sports lousy profitability for an industrials business. This result isn't too surprising given its low gross margin as a starting point. Looking at the trend in its profitability, C.H. Robinson Worldwide's operating margin might fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company's expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. C.H. Robinson Worldwide's performance was poor, but we noticed this is a broad theme as many similar Air Freight and Logistics companies saw their margins fall (along with revenue, as mentioned above) because the cycle turned in the wrong direction. This quarter, C.H. Robinson Worldwide generated an operating margin profit margin of 5.2%, up 1.2 percentage points year on year. Since its gross margin expanded more than its operating margin, we can infer that leverage on its cost of sales was the primary driver behind the recently higher efficiency. Earnings Per Share We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company's growth is profitable. C.H. Robinson Worldwide's EPS grew at an unimpressive 7.8% compounded annual growth rate over the last five years. This performance was better than its flat revenue but doesn't tell us much about its business quality because its operating margin didn't improve. Diving into the nuances of C.H. Robinson Worldwide's earnings can give us a better understanding of its performance. A five-year view shows that C.H. Robinson Worldwide has repurchased its stock, shrinking its share count by 10.8%. This tells us its EPS outperformed its revenue not because of increased operational efficiency but financial engineering, as buybacks boost per share earnings. Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business. For C.H. Robinson Worldwide, its two-year annual EPS growth of 2.7% was lower than its five-year trend. We hope its growth can accelerate in the future. In Q2, C.H. Robinson Worldwide reported adjusted EPS at $1.29, up from $1.15 in the same quarter last year. This print easily cleared analysts' estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects C.H. Robinson Worldwide's full-year EPS of $4.95 to stay about the same. Key Takeaways from C.H. Robinson Worldwide's Q2 Results It was encouraging to see C.H. Robinson Worldwide beat analysts' EPS expectations this quarter. We were also glad its Global Forwarding revenue topped Wall Street's estimates. On the other hand, its consolidated revenue slightly missed and its EBITDA also fell slightly short of Wall Street's estimates. Zooming out, we think this was a mixed quarter. The stock remained flat at $97.40 immediately after reporting. Should you buy the stock or not? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Cision Canada
a day ago
- Business
- Cision Canada
GFL Environmental Reports Second Quarter 2025 Results and Raises Full Year 2025 Guidance
Revenue, Adjusted EBITDA 1 and Adjusted Free Cash Flow 1 all ahead of expectations, overcoming multiple external headwinds 8.3% organic price and volume growth excluding the impact of divestitures 2, a 170 basis point acceleration over the previous quarter Adjusted EBITDA 1 of $515.1 million, increase of 14.6% 3; Adjusted Net Income from continuing operations 1 of $101.5 million; Net income from continuing operations of $274.2 million Adjusted EBITDA margin 1 of 30.7%, 230 basis points increase over the prior year period 3, Solid Waste Adjusted EBITDA margin 1 of 34.7%, highest Q2 margin in Company's history Year-to-date completed acquisitions generating approximately $105.0 million in annualized revenue Raised full year 2025 Adjusted EBITDA 4 guidance approximately $50.0 million before considering the effect of foreign currency translation VAUGHAN, ON, July 30, 2025 /CNW/ - GFL Environmental Inc. (NYSE: GFL) (TSX: GFL) ("GFL", "we" or "our") today announced its results for the second quarter of 2025. "Our exceptional start to the year continued into the second quarter, thanks to the hard work and commitment of our over 15,000 employees," said Patrick Dovigi, Founder and Chief Executive Officer of GFL. "Our continued focus on execution drove top line growth of 9.5% 2 and industry leading Adjusted EBITDA margin 1 expansion of 230 basis points over the prior year period 3. Our strong performance, achieved amid continued macroeconomic uncertainty and headwinds from lower commodity prices, underscores the resiliency of our business model." Mr. Dovigi continued, "The success of our first half results sets us up to increase our full year 2025 guidance. We are increasing our guidance for Adjusted EBITDA 4 to between $1.950 billion and $1.975 billion and Adjusted EBITDA margin 4 expansion of 120 basis points year-over-year at the mid-point to reflect stronger organic financial performance in the base business inclusive of foreign currency translation. Any incremental M&A, improvement in commodity prices or macroeconomic variables provide potential upside to our guidance. Our M&A pipeline remains robust and we are highly confident in our ability to meet or exceed our M&A capital deployment targets for 2025. The expected back-end weighting of this year's M&A activity results in lower current year contribution but sets us up for a larger roll over amount in 2026." Mr. Dovigi concluded, "We remain laser focused on executing on our strategic plan that we laid out at Investor Day including driving industry leading growth and improving Adjusted Free Cash Flow 1 conversion through continued optimization of our existing platform. In addition, our returns focused capital deployment strategy allows for the flexibility to execute on accretive M&A, strategic reinvestments and return of capital to shareholders." Second Quarter Results 3 Revenue of $1,675.2 million in the second quarter of 2025, increase of 9.5% excluding the impact of divestitures 2 (5.9% including the impact of divestitures), including 5.8% from core pricing 2 and 2.5% from positive volume 2. Adjusted EBITDA 1 increased by 14.6% to $515.1 million in the second quarter of 2025, compared to $449.4 million in the second quarter of 2024. Adjusted EBITDA margin 1 was 30.7% in the second quarter of 2025, compared to 28.4% in the second quarter of 2024. Net income from continuing operations was $274.2 million in the second quarter of 2025, compared to net loss from continuing operations of $531.9 million in the second quarter of 2024. Adjusted Free Cash Flow 1 was $137.1 million in the second quarter of 2025, compared to $111.0 million in the second quarter of 2024. The increase of $26.1 million was predominantly due to an increase in Adjusted EBITDA 1 and reduction in cash interest paid, partially offset by an increase in cash capex net of incremental growth investments and investment in working capital. During the second quarter of 2025, we repurchased 3,470,158 subordinate voting shares under our normal course issuer bid. We intend to continue to be opportunistic on further share repurchases going forward. Year to Date Results 3 Revenue of $3,235.3 million for the six months ended June 30, 2025, an increase of 10.9% excluding the impact of divestitures 2 (7.4% including the impact of divestitures), including 5.8% from core pricing 2 and 1.8% from positive volume 2. Adjusted EBITDA 1 increased by 14.3% to $941.2 million for the six months ended June 30, 2025, compared to $823.8 million in the six months ended June 30, 2024. Adjusted EBITDA margin 1 was 29.1% for the six months ended June 30, 2025, compared to 27.3% for the six months ended June 30, 2024. Net income from continuing operations was $60.3 million for the six months ended June 30, 2025, compared to net loss from continuing operations of $727.7 million for the six months ended June 30, 2024. Adjusted Free Cash Flow 1 was $150.8 million for the six months ended June 30, 2025, compared to $129.5 million for the six months ended June 30, 2024. The increase of $21.3 million was predominantly due to an increase in Adjusted EBITDA 1 and reduction in cash interest paid, partially offset by an increase in cash capex net of incremental growth investments and investment in working capital. 4 GFL also provided its updated guidance for 2025 assuming a USD/CAD exchange rate of 1.37 for the remainder of the year (compared to 1.41 provided in our original guidance on February 24, 2025). Revenue is estimated to be between $6,550 million and $6,575 million, up compared to original guidance by approximately $110 million before considering the effect of foreign currency translation. Adjusted EBITDA is estimated to be between $1,950 million and $1,975 million, up compared to original guidance by approximately $50 million before considering the effect of foreign currency translation. Full year Adjusted EBITDA margin is expected to be approximately 29.9% at the mid-point of the range, increase of 120 basis points compared to the prior year. Adjusted Free Cash Flow is reaffirmed at approximately $750 million. Net Leverage is estimated to be in the low 3.0x range by the end of 2025. The 2025 updated guidance includes the expected contribution of acquisitions completed as of August 1, 2025, net of divestitures completed to date, but excludes any impact from acquisitions not yet completed. Implicit in forward-looking information in respect of our expectations for 2025 are certain current assumptions, including, among others, no changes to the current economic environment, including fuel and commodities. The 2025 updated guidance assumes GFL will continue to execute on our strategy of organically growing our business, leveraging our scalable network to attract and retain customers across multiple service lines, realizing operational efficiencies and extracting procurement and cost synergies. See "Forward-Looking Information". ______________________ (1) A non-IFRS measure; see accompanying Non-IFRS Reconciliation Schedule; see "Non-IFRS Measures" for an explanation of the composition of non-IFRS measures. (2) Reflects pro forma adjustments to remove the contribution of one divestiture in Fiscal 2024. Refer to "Supplemental Data" for details. (3) On March 3, 2025, we announced the completion of the divestiture of our Environmental Services line of business ("GFL Environmental Services"), effective March 1, 2025. Certain revenue disaggregation and segment reporting balances in prior periods have been re-presented for consistency with the current period presentation in relation to GFL Environmental Services which has been presented as discontinued operations. For additional information, refer to Note 2 and Note 17 in our Unaudited Interim Financial Statements. (4) Information contained in the section titled "Updated Full Year 2025 Guidance" includes non-IFRS measures and ratios, including Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Free Cash Flow and Net Leverage. Due to the uncertainty of the likelihood, amount and timing of effects of events or circumstances to be excluded from these measures, GFL does not have information available to provide a quantitative reconciliation of such projections to comparable IFRS measures. See "Non-IFRS Measures" below. See Second Quarter Results for the equivalent historical non-IFRS measure. Q2 2025 Earnings Call GFL will host a conference call related to our second quarter earnings on July 31, 2025 at 8:30 am Eastern Time. A live audio webcast of the conference call can be accessed by logging onto our Investors page at or by clicking here. Listeners may access the call toll-free by dialing 1-833-950-0062 in Canada or 1-833-470-1428 in the United States (access code: 117324) approximately 15 minutes prior to the scheduled start time. We encourage participants who will be dialing in to pre-register for the conference call using the following link: Callers who pre-register will be given a conference access code and PIN to gain immediate access to the call and bypass the live operator on the day of the call. Participants may pre-register at any time, including up to and after the call start time. For those unable to listen live, an audio replay of the call will be available until August 14, 2025 by dialing 1-226-828-7578 in Canada or 1-866-813-9403 in the United States (access code: 782967). About GFL GFL, headquartered in Vaughan, Ontario, is the fourth largest diversified environmental services company in North America, providing a comprehensive line of solid waste management services through its platform of facilities throughout Canada and in 18 U.S. states. Across its organization, GFL has a workforce of approximately 15,000 employees. For more information, visit the GFL web site at To subscribe for investor email alerts please visit or click here. Forward-Looking Information This release includes certain "forward-looking statements" and "forward-looking information" (collectively, "forward-looking information") within the meaning of applicable U.S. and Canadian securities laws, respectively. Forward-looking information includes all statements that do not relate solely to historical or current facts and may relate to our future outlook, financial guidance and anticipated events or results and may include statements regarding our financial performance, financial condition or results, business strategy, growth strategies, budgets, operations and services. Particularly, statements regarding our expectations of future results, performance, achievements, prospects or opportunities, the markets in which we operate, or potential share repurchases are forward-looking information. In some cases, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "targets", "expects" or "does not expect", "is expected", "an opportunity exists", "budget", "scheduled", "estimates", "outlook", "forecasts", "projection", "prospects", "strategy", "intends", "anticipates", "does not anticipate", "believes", or "potential" or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might", "will", "will be taken", "occur" or "be achieved", although not all forward-looking information includes those words or phrases. In addition, any statements that refer to expectations, intentions, projections, guidance, potential or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts nor assurances of future performance but instead represent management's expectations, estimates and projections regarding future events or circumstances. Forward-looking information is based on our opinions, estimates and assumptions that we considered appropriate and reasonable as of the date such information is stated, is subject to known and unknown risks, uncertainties, assumptions and other important factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to certain assumptions set out herein in the section titled "Updated Full Year 2025 Guidance"; our ability to obtain and maintain existing financing on acceptable terms; our ability to source and execute on acquisitions on terms acceptable to us; currency exchange and interest rates; commodity price fluctuations; our ability to implement price increases and surcharges; changes in waste volumes; labour, supply chain and transportation constraints; inflationary cost pressures; fuel supply and fuel price fluctuations; our ability to maintain a favourable working capital position; the impact of competition; the changes and trends in our industry or the global economy; changes to trade agreements, restrictions on trade, including sanctions, export controls, import duties, quotas, treaties, tariffs, trade wars, changes to trade and investment policies and other governmental actions; and changes in laws, rules, regulations, and global standards. Other important factors that could materially affect our forward-looking information can be found in the "Risk Factors" section of GFL's annual information form for the year ended December 31, 2024 and GFL's other periodic filings with the U.S. Securities and Exchange Commission and the securities commissions or similar regulatory authorities in Canada. Shareholders, potential investors and other readers are urged to consider these risks carefully in evaluating our forward-looking information and are cautioned not to place undue reliance on such information. There can be no assurance that the underlying opinions, estimates and assumptions will prove to be correct. Although we have attempted to identify important risk factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors not currently known to us or that we currently believe are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking information. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. The forward-looking information contained in this release represents our expectations as of the date of this release (or as the date it is otherwise stated to be made), and is subject to change after such date. However, we disclaim any intention or obligation or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable U.S. or Canadian securities laws. Non-IFRS Measures This release makes reference to certain non-IFRS measures. These measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. Rather, these non-IFRS measures are used to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. We also believe that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Our management also uses non-IFRS measures in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts and to determine components of management compensation. EBITDA represents, for the applicable period, net income (loss) from continuing operations plus (a) interest and other finance costs, plus (b) depreciation and amortization of property and equipment, landfill assets and intangible assets, plus (less) (c) the provision (recovery) for income taxes, in each case to the extent deducted or added to/from net income (loss) from continuing operations. We present EBITDA to assist readers in understanding the mathematical development of Adjusted EBITDA. Management does not use EBITDA as a financial performance metric. Adjusted EBITDA is a supplemental measure used by management and other users of our financial statements including, our lenders and investors, to assess the financial performance of our business without regard to financing methods or capital structure. Adjusted EBITDA is also a key metric that management uses prior to execution of any strategic investing or financing opportunity. For example, management uses Adjusted EBITDA as a measure in determining the value of acquisitions, expansion opportunities, and dispositions. In addition, Adjusted EBITDA is utilized by financial institutions to measure borrowing capacity. Adjusted EBITDA is calculated by adding and deducting, as applicable from EBITDA, certain expenses, costs, charges or benefits incurred in such period which in management's view are either not indicative of underlying business performance or impact the ability to assess the operating performance of our business, including: (a) (gain) loss on foreign exchange, (b) (gain) loss on sale of property and equipment, (c) share of net (income) loss of investments accounted for using the equity method, (d) share-based payments, (e) (gain) loss on divestiture, (f) transaction costs, (g) acquisition, rebranding and other integration costs (included in cost of sales related to acquisition activity), (h) Founder/CEO remuneration and (i) other. We use Adjusted EBITDA to facilitate a comparison of our operating performance on a consistent basis reflecting factors and trends affecting our business. As we continue to grow our business, we may be faced with new events or circumstances that are not indicative of our underlying business performance or that impact the ability to assess our operating performance. Adjusted EBITDA margin represents Adjusted EBITDA divided by revenue. Management and other users of our financial statements including our lenders and investors use Adjusted EBITDA margin to facilitate a comparison of the operating performance of each of our operating segments on a consistent basis reflecting factors and trends affecting our business. Acquisition EBITDA represents, for the applicable period, management's estimates of the annual Adjusted EBITDA of an acquired business, based on its most recently available historical financial information at the time of acquisition, as adjusted to give effect to (a) the elimination of expenses related to the prior owners and certain other costs and expenses that are not indicative of the underlying business performance, if any, as if such business had been acquired on the first day of such period and (b) contract and acquisition annualization for contracts entered into and acquisitions completed by such acquired business prior to our acquisition (collectively, "Acquisition EBITDA Adjustments"). Further adjustments are made to such annual Adjusted EBITDA to reflect estimated operating cost savings and synergies, if any, anticipated to be realized upon acquisition and integration of the business into our operations. Acquisition EBITDA is calculated net of divestitures. We use Acquisition EBITDA for the acquired businesses to adjust our Adjusted EBITDA to include a proportional amount of the Acquisition EBITDA of the acquired businesses based upon the respective number of months of operation for such period prior to the date of our acquisition of each such business. Adjusted Cash Flows from Operating Activities represents cash flows from operating activities adjusted for (a) operating cash flows from discontinued operations, (b) transaction costs, (c) acquisition, rebranding and other integration costs, (d) Founder/CEO remuneration, (e) cash interest paid on early termination of long-term debt and (f) distribution received from joint ventures. Adjusted Cash Flows from Operating Activities is a supplemental measure used by investors as a valuation and liquidity measure in our industry. For the six months ended June 30, 2025, cash interest paid on early termination of long-term debt has been added back to Adjusted Cash Flows from Operating Activities. This amount was not paid in the prior period. Adjusted Cash Flows from Operating Activities is a supplemental measure used by management to evaluate and monitor liquidity and the ongoing financial performance of GFL. Adjusted Free Cash Flow represents Adjusted Cash Flows from Operating Activities adjusted for (a) proceeds on disposal of assets and other, (b) purchase of property and equipment and (c) incremental growth investments. Adjusted Free Cash Flow is a supplemental measure used by investors as a valuation and liquidity measure in our industry. Adjusted Free Cash Flow is a supplemental measure used by management to evaluate and monitor liquidity and the ongoing financial performance of GFL. Adjusted Net Income (Loss) from continuing operations represents net income (loss) from continuing operations adjusted for (a) amortization of intangible assets, (b) ARO discount rate depreciation adjustment, (c) amortization of deferred financing costs, (d) (gain) loss on foreign exchange, (e) share of net (income) loss of investments accounted for using the equity method, (f) loss on termination of hedged arrangements, (g) (gain) loss on divestiture, (h) transaction costs, (i) acquisition, rebranding and other integration costs, (j) Founder/CEO remuneration, (k) other and (l) the tax impact of the foregoing. Adjusted income (loss) per share from continuing operations is defined as Adjusted Net Income (Loss) from continuing operations divided by the weighted average shares in the period. We believe that Adjusted income (loss) per share from continuing operations provides a meaningful comparison of current results to prior periods' results by excluding items that GFL does not believe reflect its fundamental business performance. Net Leverage is a supplemental measure used by management to evaluate borrowing capacity and capital allocation strategies. Net Leverage is equal to our total long-term debt, as adjusted for fair value, deferred financings and other adjustments and reduced by our cash, divided by Run-Rate EBITDA. Run-Rate EBITDA represents Adjusted EBITDA for the applicable period as adjusted to give effect to management's estimates of (a) Acquisition EBITDA Adjustments (as defined above) and (b) the impact of annualization of certain new municipal and disposal contracts and cost savings initiatives, entered into, commenced or implemented, as applicable, in such period, as if such contracts or costs savings initiatives had been entered into, commenced or implemented, as applicable, on the first day of such period ((a) and (b), collectively, "Run-Rate EBITDA Adjustments"). Run-Rate EBITDA has not been adjusted to take into account the impact of the cancellation of contracts and cost increases associated with these contracts. These adjustments reflect monthly allocations of Acquisition EBITDA for the acquired businesses based on straight line proration. As a result, these estimates do not take into account the seasonality of a particular acquired business. While we do not believe the seasonality of any one acquired business is material when aggregated with other acquired businesses, the estimates may result in a higher or lower adjustment to our Run-Rate EBITDA than would have resulted had we adjusted for the actual results of each of the acquired businesses for the period prior to our acquisition. We primarily use Run-Rate EBITDA to show how GFL would have performed if each of the acquired businesses had been consummated at the start of the period as well as to show the impact of the annualization of certain new municipal and disposal contracts and cost savings initiatives. We also believe that Run-Rate EBITDA is useful to investors and creditors to monitor and evaluate our borrowing capacity and compliance with certain of our debt covenants. Run-Rate EBITDA as presented herein is calculated in accordance with the terms of our revolving credit agreement. All references to "$" in this press release are to Canadian dollars, unless otherwise noted. Three months ended June 30, Six months ended June 30, 2025 2024 (1) 2025 2024 (1) Revenue $ 1,675.2 $ 1,581.6 $ 3,235.3 $ 3,013.4 Expenses Cost of sales 1,303.2 1,290.8 2,575.8 2,480.2 Selling, general and administrative expenses 223.2 210.0 509.4 441.3 Interest and other finance costs 121.1 184.8 331.5 335.8 (Gain) loss on sale of property and equipment (2.8) 0.3 0.4 (2.2) (Gain) loss on foreign exchange (266.4) 5.4 (272.1) 79.9 Loss on divestiture — 494.1 — 494.1 Other (24.4) 0.9 (16.4) (3.6) 1,353.9 2,186.3 3,128.6 3,825.5 Share of net (loss) income of investments accounted for using the equity method (19.1) 15.7 (70.8) (14.9) Income (loss) before income taxes 302.2 (589.0) 35.9 (827.0) Current income tax expense 30.9 26.5 64.1 58.8 Deferred tax recovery (2.9) (83.6) (88.5) (158.1) Income tax expense (recovery) 28.0 (57.1) (24.4) (99.3) Net income (loss) from continuing operations 274.2 (531.9) 60.3 (727.7) Net income from discontinued operations — 59.6 3,620.8 78.9 Net income (loss) 274.2 (472.3) 3,681.1 (648.8) Less: Net loss attributable to non-controlling interests (2.1) (1.1) (4.8) (4.8) Net income (loss) attributable to GFL Environmental Inc. $ 276.3 $ (471.2) $ 3,685.9 $ (644.0) Items that may be subsequently reclassified to net income (loss) Currency translation adjustment (442.5) 60.6 (452.9) 201.3 Reclassification to net income (loss) of fair value movements on cash flow hedges, net of tax 1.0 — 7.0 — Fair value movements on cash flow hedges, net of tax 16.0 0.6 23.3 (14.7) Share of other comprehensive loss of investments accounted for using the equity method, net of tax (16.2) (1.2) (16.2) (1.2) Reclassification to net income (loss) of foreign currency differences on divestitures — (26.5) — (26.5) Other comprehensive (loss) income (441.7) 33.5 (438.8) 158.9 Comprehensive loss from continuing operations (167.5) (498.4) (378.5) (568.8) Comprehensive income from discontinued operations — 59.6 3,444.3 78.9 Total comprehensive (loss) income (167.5) (438.8) 3,065.8 (489.9) Less: Total comprehensive (loss) income attributable to non-controlling interests (14.4) 0.9 (17.3) 2.7 Total comprehensive (loss) income attributable to GFL Environmental Inc. $ (153.1) $ (439.7) $ 3,083.1 $ (492.6) Basic income (loss) per share (2) Continuing operations $ 0.72 $ (1.47) $ 0.10 $ (2.05) Discontinued operations — 0.16 9.57 0.21 Total operations $ 0.72 $ (1.31) $ 9.67 $ (1.84) Diluted income (loss) per share (2) Continuing operations $ 0.70 $ (1.47) $ 0.10 $ (2.05) Discontinued operations — 0.16 9.34 0.21 Total operations $ 0.70 $ (1.31) $ 9.44 $ (1.84) Weighted average number of shares outstanding 365,815,712 376,598,000 378,517,656 374,792,781 Diluted weighted average number of shares outstanding 383,211,513 376,598,000 387,599,076 374,792,781 ______________________ (1) Comparative figures have been re-presented, refer to Note 2 and 17 in our Unaudited Interim Financial Statements. (2) June 30, 2025 December 31, 2024 Assets Cash $ 139.7 $ 133.8 Trade and other receivables, net 840.6 1,175.1 Income taxes recoverable 12.4 86.0 Prepaid expenses and other assets 207.4 300.7 Current assets 1,200.1 1,695.6 Property and equipment, net 6,834.8 7,851.7 Intangible assets, net 1,634.6 2,833.2 Investments accounted for using the equity method 1,966.4 344.4 Other long-term assets 302.1 207.4 Deferred income tax assets — 209.3 Goodwill 6,589.1 8,065.8 Non-current assets 17,327.0 19,511.8 Total assets $ 18,527.1 $ 21,207.4 Liabilities Accounts payable and accrued liabilities 1,567.9 1,880.2 Income taxes payable 8.9 — Long-term debt 60.6 1,146.5 Lease obligations 112.8 69.4 Due to related party — 2.9 Landfill closure and post-closure obligations 51.2 51.7 Current liabilities 1,801.4 3,150.7 Long-term debt 6,635.1 8,853.0 Lease obligations 401.0 477.2 Other long-term liabilities 33.4 41.6 Deferred income tax liabilities 749.4 464.5 Landfill closure and post-closure obligations 1,019.3 998.7 Non-current liabilities 8,838.2 10,835.0 Total liabilities 10,639.6 13,985.7 Shareholders' equity Share capital 7,532.1 9,938.0 Contributed surplus 173.1 151.3 Retained earnings (deficit) 96.5 (3,573.5) Accumulated other comprehensive (loss) income (140.2) 462.6 Total GFL Environmental Inc.'s shareholders' equity 7,661.5 6,978.4 Non-controlling interests 226.0 243.3 Total shareholders' equity 7,887.5 7,221.7 Total liabilities and shareholders' equity $ 18,527.1 $ 21,207.4 GFL Environmental Inc. Unaudited Interim Condensed Consolidated Statements of Cash Flows (In millions of dollars) SUPPLEMENTAL DATA You should read the following information in conjunction with our audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2024, as well as our Unaudited Interim Financial Statements and notes thereto for the three and six months ended June 30, 2025. The following tables summarize the revenue growth in our segments for the periods indicated: ____________________________ (1) Reflects pro forma adjustments to remove the contribution of one divestiture in Fiscal 2024. Detail of Organic Growth The following table summarizes the components of our organic growth for the periods indicated: ____________________________ (1) Reflects pro forma adjustments to remove the contribution of one divestiture in Fiscal 2024. Operating Segment Results The following tables summarize our operating segment results for the periods indicated, excluding the results of GFL Environmental Services which has been presented as discontinued operations: ________________________ (1) Comparative figures have been re-presented, refer to Note 2 and 17 in our Unaudited Interim Financial Statements. (2) A non-IFRS measure; see accompanying Non-IFRS Reconciliation Schedule; see "Non-IFRS Measures" for an explanation of the composition of non-IFRS measures. (3) See "Non-IFRS Measures" for an explanation of the composition of non-IFRS measures. Net Leverage The following table presents the calculation of Net Leverage as at the dates indicated: __________________________ (1) Total long-term debt includes derivative asset reclassified for financial statement presentation purposes to other long-term assets, refer to Note 7 in our Unaudited Interim Financial Statements. (2) A non-IFRS measure; see accompanying Non-IFRS Reconciliation Schedule; see "Non-IFRS Measures" for an explanation of the composition of non-IFRS measures. (3) See "Non-IFRS Measures" for an explanation of the composition of non-IFRS measures and ratios. Shares Outstanding The following table presents the total shares outstanding as at the date indicated: Adjusted EBITDA The following tables provide a reconciliation of our net income (loss) from continuing operations to EBITDA and Adjusted EBITDA for the periods indicated, excluding the results of GFL Environmental Services which has been presented as discontinued operations: ($ millions) Six months ended June 30, 2025 Six months ended June 30, 2024 (1) Net income (loss) from continuing operations $ 60.3 $ (727.7) Add: Interest and other finance costs 331.5 335.8 Depreciation of property and equipment 520.0 477.6 Amortization of intangible assets 122.2 142.0 Income tax recovery (24.4) (99.3) EBITDA 1,009.6 128.4 Add: (Gain) loss on foreign exchange (2) (272.1) 79.9 Loss (gain) on sale of property and equipment 0.4 (2.2) Share of net loss of investments accounted for using the equity me thod (3) 78.5 26.0 Share-based payments (4) 75.1 69.4 Loss on divestiture (5) — 494.1 Transaction costs (6) 30.4 19.4 Acquisition, rebranding and other integration costs (7) 3.9 2.2 Founder/CEO remuneration (8) 31.8 10.2 Other (9) (16.4) (3.6) Adjusted EBITDA $ 941.2 $ 823.8 ________________________ (1) Comparative figures have been re-presented, refer to Note 2 and 17 in our Unaudited Interim Financial Statements. (2) Consists of (i) non-cash gains and losses on foreign exchange and interest rate swaps entered into in connection with our debt instruments and (ii) gains and losses attributable to foreign exchange rate fluctuations. (3) Excludes share of Adjusted EBITDA of investments accounted for using the equity method for RNG projects. (4) This is a non-cash item and consists of the amortization of the estimated fair value of share-based payments granted to certain members of management under share-based payment plans. (5) Consists of losses resulting from the divestiture of non-core businesses. (6) Consists of acquisition, integration and other costs such as legal, consulting and other fees and expenses incurred in respect of acquisitions and financing activities completed during the applicable period. We expect to incur similar costs in connection with other acquisitions in the future and, under IFRS, such costs relating to acquisitions are expensed as incurred and not capitalized. This is part of SG&A. (7) Consists of costs related to the rebranding of equipment acquired through business acquisitions. We expect to incur similar costs in connection with other acquisitions in the future. This is part of cost of sales. (8) Consists of cash payments to the Founder and CEO, which payment had been previously satisfied through the issuance of restricted share units. (9) The three and six months ended June 30, 2025 includes a $24.4 million gain on sale of a portion of GFL's equity investment in Green Infrastructure Partners Inc. ("GIP"). Adjusted Net Income (Loss) from Continuing Operations The following tables provide a reconciliation of our net income (loss) from continuing operations to Adjusted Net Income (Loss) from continuing operations for the periods indicated, excluding the results of GFL Environmental Services which has been presented as discontinued operations: ($ millions) Six months ended June 30, 2025 Six months ended June 30, 2024 (1) Net income (loss) from continuing operations $ 60.3 $ (727.7) Add: Amortization of intangible assets (2) 122.2 142.0 ARO discount rate depreciation adjustment (3) — 4.3 Amortization of deferred financing costs 26.9 12.0 (Gain) loss on foreign exchange (4) (272.1) 79.9 Share of net loss of investments accounted for using the equity method (5) 78.5 26.0 Loss on termination of hedged arrangements (6) 30.5 17.2 Loss on divestiture (7) — 494.1 Transaction costs (8) 30.4 19.4 Acquisition, rebranding and other integration costs (9) 3.9 2.2 Founder/CEO remuneration (10) 31.8 10.2 Other (11) (16.4) (3.6) Tax effect (12) (29.0) (106.6) Adjusted Net Income (Loss) from continuing operations $ 67.0 $ (30.6) Adjusted income (loss) per share from continuing operations, basic $ 0.18 $ (0.08) Adjusted income (loss) per share from continuing operations, diluted $ 0.17 $ (0.08) _________________________ (1) Comparative figures have been re-presented, refer to Note 2 and 17 in our Unaudited Interim Financial Statements. (2) This is a non-cash item and consists of the amortization of intangible assets such as customer lists, municipal contracts, non-compete agreements, trade name and other licenses. (3) This is a non-cash item and consists of depreciation expense related to the difference between the ARO calculated using the credit adjusted risk-free discount rate required for measurement of the ARO through purchase accounting compared to the risk-free discount rate required for quarterly valuations. (4) Consists of (i) non-cash gains and losses on foreign exchange and interest rate swaps entered into in connection with our debt instruments and (ii) gains and losses attributable to foreign exchange rate fluctuations. (5) Excludes share of Adjusted EBITDA of investments accounted for using the equity method for RNG projects. (6) Consists of gains and losses on the termination of hedged arrangements associated with the 3.750% 2025 Secured Notes, the 5.125% 2026 Secured Notes, the 4.250% 2025 Secured Notes and the 4.750% 2029 Notes. (7) Consists of losses resulting from the divestiture of non-core businesses. (8) Consists of acquisition, integration and other costs such as legal, consulting and other fees and expenses incurred in respect of acquisitions and financing activities completed during the applicable period. We expect to incur similar costs in connection with other acquisitions in the future and, under IFRS, such costs relating to acquisitions are expensed as incurred and not capitalized. This is part of SG&A. (9) Consists of costs related to the rebranding of equipment acquired through business acquisitions. We expect to incur similar costs in connection with other acquisitions in the future. This is part of cost of sales. (10) Consists of cash payments to the Founder and CEO, which payment had been previously satisfied through the issuance of restricted share units. (11) The three and six months ended June 30, 2025 includes a $24.4 million gain on sale of a portion of GFL's equity investment in GIP. (12) Consists of the tax effect of the adjustments to net income (loss) from continuing operations. The following tables provide a reconciliation of our cash flows from operating activities to Adjusted Cash Flows from Operating Activities and Adjusted Free Cash Flow for the periods indicated: ($ millions) Three months ended June 30, 2025 Three months ended June 30, 2024 (1) Cash flows from operating activities $ 306.1 $ 364.6 Less: Operating cash flows from discontinued operations (2) — 109.1 Cash flows from operating activities (excluding discontinued operations) 306.1 255.5 Add: Transaction costs (3) 9.2 14.1 Acquisition, rebranding and other integration costs (4) 2.4 1.8 Founder/CEO remuneration (5) 11.0 10.2 Distribution received from joint ventures 1.7 2.0 Adjusted Cash Flows from Operating Activities 330.4 283.6 Proceeds on disposal of assets and other 9.4 0.3 Purchase of property and equipment (289.0) (261.9) Adjusted Free Cash Flow (including incremental growth investments) 50.8 22.0 Incremental growth investments (7) 86.3 89.0 Adjusted Free Cash Flow $ 137.1 $ 111.0 ($ millions) Six months ended June 30, 2025 Six months ended June 30, 2024 (1) Cash flows from operating activities $ 479.6 $ 627.8 Less: Operating cash flows from discontinued operations (2) 69.6 180.1 Cash flows from operating activities (excluding discontinued operations) 410.0 447.7 Add: Transaction costs (3) 30.4 19.4 Acquisition, rebranding and other integration costs (4) 3.9 2.2 Founder/CEO remuneration (5) 31.8 10.2 Cash interest paid on early termination of long-term debt (6) 68.9 — Distribution received from joint ventures 5.3 8.3 Adjusted Cash Flows from Operating Activities 550.3 487.8 Proceeds on disposal of assets and other 13.1 8.0 Purchase of property and equipment (585.5) (516.9) Adjusted Free Cash Flow (including incremental growth investments) (22.1) (21.1) Incremental growth investments (7) 172.9 150.6 Adjusted Free Cash Flow $ 150.8 $ 129.5 _________________________ (1) Comparative figures have been re-presented, refer to Note 2 and 17 in our Unaudited Interim Financial Statements. (2) Consists of operating cash flows from discontinued operations. As at June 30, 2025, GFL Environmental Services was presented as discontinued operations. Refer to Note 17 in our Unaudited Interim Financial Statements. (3) Consists of acquisition, integration and other costs such as legal, consulting and other fees and expenses incurred in respect of acquisitions and financing activities completed during the applicable period. We expect to incur similar costs in connection with other acquisitions in the future, and, under IFRS, such costs relating to acquisitions are expensed as incurred and not capitalized. This is part of SG&A.
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Fortive Reports Second Quarter 2025 Results
EVERETT, Wash.--(BUSINESS WIRE)--Fortive Corporation ('Fortive') (NYSE: FTV) today announced financial results for the second quarter of 2025. 'The second quarter of 2025 was pivotal for Fortive,' said Olumide Soroye, President and CEO. 'We completed our spin-off of Ralliant and launched a new chapter at Fortive with a clear value creation plan to accelerate profitable growth and enhance shareholder returns. Despite uncertainty related to trade, healthcare and government spending policy impacting demand in the second quarter, we delivered strong earnings and free cash flow, reflecting the strength of our market-leading operating brands and the power of the Fortive Business System. The medium-term financial framework we shared at our recent Investor Day remains firmly intact.' 'The third quarter marks the beginning of our new chapter, and we are moving the pieces into place to drive accelerated growth. Our new leadership team is focused on executing our Fortive Accelerated strategy, including our disciplined capital allocation approach and focus on building investor trust, which will drive meaningful shareholder value creation in the years ahead,' Mr. Soroye concluded. Financial Highlights for Second Quarter 2025 Consolidated Results, Including Precision Technologies Segment GAAP diluted net EPS of $0.49; adjusted diluted net EPS of $0.90, at high-end of guidance range Deployed $345 million towards share repurchases in first half of 2025 Fortive Results, Continuing Operations* Revenue of $1.02 billion, down 0.4% year-over-year; core revenue decline of 0.7% GAAP net income of $112 million, 11.0% margin; adjusted EBITDA of $288 million, 28.4% margin GAAP diluted net EPS of $0.33; adjusted diluted net EPS of $0.58 GAAP operating cash flow of $205 million, Trailing Twelve Months (TTM) GAAP operating cash flow of $1,029 million; Free Cash Flow of $180 million, TTM Free Cash Flow of $939 million Full Year 2025 Outlook, Fortive Continuing Operations* For the full year 2025, Fortive anticipates adjusted diluted net earnings per share of $2.50 to $2.60. This outlook reflects Fortive, on a continuing operations basis. Summary Financial Results, Fortive Continuing Operations* Summary Segment Financial Results, Fortive Continuing Operations* Intelligent Operating Solutions Q2-25 Q2-24 Variance Revenue $697M $697M $—M Reported / core growth 0.1% / (0.2)% 3.8% / 3.3% GAAP Operating profit $171M $173M (1.2)% GAAP Operating margin 24.5% 24.9% (40) bps Adj. EBITDA $236M $232M 1.7% Adj. EBITDA margin 33.8% 33.3% 50 bps Expand Advanced Healthcare Solutions Q2-25 Q2-24 Variance Revenue $320M $324M $(4)M Reported / core growth (1.3)% / (1.9)% 3.4% / 5.0% GAAP Operating profit $36M $36M —% GAAP Operating margin 11.2% 11.0% 20 bps Adj. EBITDA $86M $86M —% Adj. EBITDA margin 26.9% 26.6% 30 bps Expand * Ralliant will be reclassified as discontinued operations in the third quarter of 2025. For the purposed of this release, Fortive Continuing Operations results for the second quarter of 2025 and 2024 assume that Ralliant had been classified as discontinued operations for such earlier periods. RALLIANT SEPARATION On June 28, 2025 (the 'Distribution Date'), Fortive completed the separation (the 'Separation') of its former Precision Technologies segment by distributing to Fortive shareholders on a pro rata basis all of the issued and outstanding common stock of Ralliant Corporation ('Ralliant'), the entity incorporated to hold such businesses. To effect the Separation, Fortive distributed to its stockholders one share of Ralliant common stock for every three shares of Fortive's common stock outstanding held on June 16, 2025, the record date for the distribution. Beginning with the third quarter of 2025, the Company will classify Ralliant as a discontinued operation in its financial statements, as a result of the Separation. The results of the Precision Technologies segment are included in the consolidated results of Fortive for the second quarter of 2025 and 2024. However, results for the second quarter of 2025 and 2024 indicated in this document as 'continuing operations' reflect Fortive results, with the Precision Technologies segment treated as discontinued operations for such prior periods. CONFERENCE CALL DETAILS Fortive will discuss results and outlook during its quarterly investor conference call today starting at 12:00 p.m. ET. The call and an accompanying slide presentation will be webcast on the 'Investors' section of Fortive's website, under 'Events/Presentations.' A replay of the webcast will be available at the same location shortly after the conclusion of the presentation. The conference call can be accessed by dialing 877-407-3110 within the U.S. or by dialing 215-268-9915 outside the U.S. a few minutes before 12:00 p.m. ET and notifying the operator that you are dialing in for Fortive's earnings conference call. A digital recording of the conference call will be available two hours after the completion of the call until Wednesday, August 13, 2025. You can access the conference call replay on the 'Investors' section of Fortive's website, under 'Events/Presentations,' or by dialing 877-660-6853 within the U.S. or 201-612-7415 outside the U.S (Access ID: 13754694). ABOUT FORTIVE Fortive innovates essential technologies to keep our world safe and productive. Fortive's strategic segments - Intelligent Operating Solutions and Advanced Healthcare Solutions - include iconic inventor brands with leading positions in their markets. The company's businesses design, develop, manufacture, and market products, software, and services, building on leading brand names, innovative technologies, and strong market positions. Fortive is headquartered in Everett, Washington and employs a team of more than 10,000 research and development, manufacturing, sales, distribution, service, and administrative team members in approximately 50 countries around the world. With a culture rooted in continuous improvement, the core of our company's operating model is the Fortive Business System. For more information please visit: NON-GAAP FINANCIAL MEASURES In addition to the financial measures prepared in accordance with United States generally accepted accounting principles (GAAP), this earnings release also references 'adjusted net earnings,' 'adjusted diluted net earnings per share,' 'adjusted EBITDA', 'adjusted EBITDA margin', 'free cash flow,' and 'core revenue growth,' which are non-GAAP financial measures. The reasons why we believe these measures, when used in conjunction with the GAAP financial measures, provide useful information to investors, how management uses such non-GAAP financial measures, a reconciliation of these measures to the most directly comparable GAAP measures and other information relating to these measures are included in the supplemental reconciliation schedule attached. The non-GAAP financial measures should not be considered in isolation or as a substitute for the GAAP financial measures, but should instead be read in conjunction with the GAAP financial measures. The non-GAAP financial measures used by Fortive in this release may be different from similarly-titled non-GAAP measures used by other companies. With respect to forward-looking non-GAAP measures, we have not reconciled with, or presented, corresponding forward-looking GAAP measures since doing so would require us to make assumptions with precision about acquisitions, currency translations, capital and other expenses and other similar adjustments during the future periods. FORWARD-LOOKING STATEMENTS Statements in this presentation that are not strictly historical, including the statements regarding anticipated financial results, impact of trade policies, including tariffs and the application thereof, global and regional economic conditions, industry trends, geopolitical events, the impact of the Separation, the anticipated U.S. federal income tax treatment of the distribution, anticipated prospects and strategies of Fortive and Ralliant, future opportunities for Fortive and Ralliant, capital allocation strategies, interest rate and current exchange rate impact, future prospects, shareholder value, and any other statements identified by their use of words like 'anticipate,' 'expect,' 'believe,' 'outlook,' 'guidance,' "target", or 'will' or other words of similar meaning, are 'forward-looking statements' within the meaning of the United States federal securities laws. Factors that could cause actual results to differ materially from those in the forward-looking statements include, among other things: deterioration of or instability in the economy, the markets we serve, international trade policies and deteriorating trade relations with other countries, including imposition of tariffs and retaliatory tariffs between United States and China and other countries, responsive economic nationalism, trade restrictions, and enhanced regulation, the financial markets, geopolitical conditions and conflicts, security breaches or other disruptions of our information technology systems, supply chain constraints, our ability to adjust purchases and manufacturing capacity to reflect market conditions, reliance on sole sources of supply, contractions or lower growth rates and cyclicality of markets we serve, competition, changes in industry standards and governmental regulations, our ability to recruit and retain key employees, our ability to successfully identify, consummate, integrate and realize the anticipated value of appropriate acquisitions and successfully complete divestitures and other dispositions, our ability to develop and successfully market new products, software, and services and expand into new markets, the potential for improper conduct by our employees, agents or business partners, contingent liabilities relating to acquisitions and divestitures, impact of changes to tax laws, our compliance with applicable laws and regulations and changes in applicable laws and regulations, risks relating to international economic, geopolitical, including war and sanctions, legal, compliance and business factors, risks relating to potential impairment of goodwill and other intangible assets, currency exchange rates, tax audits and changes in our tax rate and income tax liabilities, the impact of our debt obligations on our operations, litigation and other contingent liabilities including intellectual property and environmental, health and safety matters, our ability to adequately protect our intellectual property rights, risks relating to product, service or software defects, product liability and recalls, risks relating to product manufacturing, our relationships with and the performance of our channel partners, commodity costs and surcharges, adverse effects of restructuring activities, our plans to separate into two independent, publicly-traded companies, risk related to tax treatment of our prior separations, impact of our indemnification obligation to Ralliant and Vontier, impact of changes to U.S. GAAP, labor matters, and disruptions relating to man-made and natural disasters and climate change. Additional information regarding the factors that may cause actual results to differ materially from these forward-looking statements is available in our SEC filings, including our Annual Report on Form 10-K for the year ended December 31, 2024 and Quarterly Reports on Form 10-Q for the quarters ended March 28, 2025 and June 27, 2025. These forward-looking statements speak only as of the date of this presentation, and Fortive does not assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events and developments or otherwise. This information is presented for reference only. A complete copy of Fortive's Form 10-Q financial statements is available on the Company's website ( Three Months Ended Six Months Ended June 27, 2025 June 28, 2024 June 27, 2025 June 28, 2024 Sales: Intelligent Operating Solutions $ 675.7 $ 677.0 $ 1,347.1 $ 1,342.7 Precision Technologies 523.6 551.8 1,024.2 1,110.8 Advanced Healthcare Solutions 319.5 323.6 621.7 623.4 Total $ 1,518.8 $ 1,552.4 $ 2,993.0 $ 3,076.9 Operating Profit: Intelligent Operating Solutions $ 166.7 $ 173.2 $ 340.4 $ 337.3 Precision Technologies 93.2 115.3 180.5 264.4 Advanced Healthcare Solutions 39.1 40.2 65.4 67.7 Other (a) (76.8 ) (26.9 ) (130.5 ) (65.4 ) Total $ 222.2 $ 301.8 $ 455.8 $ 604.0 Operating Margins: Intelligent Operating Solutions 24.7 % 25.6 % 25.3 % 25.1 % Precision Technologies 17.8 % 20.9 % 17.6 % 23.8 % Advanced Healthcare Solutions 12.2 % 12.4 % 10.5 % 10.9 % Total 14.6 % 19.4 % 15.2 % 19.6 % (a) Operating profit amounts in the Other category consist of unallocated corporate costs and other costs not considered part of our evaluation of reportable segment operating performance. Expand This information is presented for reference only. A complete copy of Fortive's Form 10-Q financial statements is available on the Company's website ( This information is presented for reference only. A complete copy of Fortive's Form 10-Q financial statements is available on the Company's website ( This information is presented for reference only. A complete copy of Fortive's Form 10-Q financial statements is available on the Company's website ( BASIS OF PRESENTATION The financial information for Fortive presented below is prepared on a continuing operations basis with Ralliant presented as discontinued operations. Discontinued operations reporting will be reflected retrospectively in the Company's future filings, but in no way revises or restates any Consolidated Statements of Earnings, Consolidated Balance Sheets, Consolidated Statements of Shareholders' Equity or Consolidated Statements of Cash Flows for the Company for any period previously filed with the U.S. Securities and Exchange Commission. Segment Information Reflecting Ralliant as Discontinued Operations ($ in millions) (unaudited) Three Months Ended Six Months Ended June 27, 2025 June 28, 2024 June 27, 2025 June 28, 2024 Sales: Intelligent Operating Solutions $ 696.9 $ 696.6 $ 1,387.8 $ 1,381.0 Advanced Healthcare Solutions 319.5 323.6 621.7 623.4 Total $ 1,016.4 $ 1,020.2 $ 2,009.5 $ 2,004.4 Operating Profit: Intelligent Operating Solutions $ 170.8 $ 173.4 $ 345.4 $ 338.2 Advanced Healthcare Solutions 35.8 35.7 57.5 59.1 Other (a) (36.8 ) (26.8 ) (67.8 ) (65.2 ) Total $ 169.8 $ 182.3 $ 335.1 $ 332.1 Operating Margins: Intelligent Operating Solutions 24.5 % 24.9 % 24.9 % 24.5 % Advanced Healthcare Solutions 11.2 % 11.0 % 9.2 % 9.5 % Total 16.7 % 17.9 % 16.7 % 16.6 % (a) Operating profit amounts in the Other category consist of unallocated corporate costs and other costs not considered part of our evaluation of reportable segment operating performance. Expand Unaudited Consolidated Condensed Balance Sheet for Fortive Assuming Ralliant as Discontinued Operations ($ and shares in millions, except per share amounts) As of June 27, 2025 December 31, 2024 ASSETS Current assets: Cash and equivalents $ 1,827.4 $ 808.1 Other current assets 1,205.1 1,164.7 Current assets, discontinued operations 650.9 619.5 Total current assets 3,683.4 2,592.3 Other assets 10,234.1 10,327.8 Other assets, discontinued operations 4,326.7 4,096.0 Total assets $ 18,244.2 $ 17,016.1 LIABILITIES AND EQUITY Current liabilities: Current portion of long-term debt $ 1,905.7 $ 376.2 Other current liabilities 1,301.8 1,293.7 Current liabilities, discontinued operations 538.1 568.5 Total current liabilities 3,745.6 2,238.4 Other long-term liabilities 771.6 847.2 Long-term debt 1,758.1 3,331.1 Long-term liabilities, discontinued operations 1,579.7 403.8 Equity: Common stock: $0.01 par value, 2.0 billion shares authorized; 368.4 and 366.6 issued; 338.2 and 341.2 outstanding; respectively 3.7 3.7 Additional paid-in capital 4,106.0 4,035.0 Treasury shares, at cost (1,952.2 ) (1,612.3 ) Retained earnings 8,511.9 8,227.6 Accumulated other comprehensive loss (287.3 ) (465.4 ) Total Fortive stockholders' equity 10,382.1 10,188.6 Noncontrolling interests 7.1 7.0 Total stockholders' equity 10,389.2 10,195.6 Total liabilities and equity $ 18,244.2 $ 17,016.1 Expand Unaudited Consolidated Condensed Statement of Cash Flows for Fortive Reflecting Ralliant as Discontinued Operations ($ in millions) Six Months Ended June 27, 2025 June 28, 2024 Cash flows from operating activities: Total operating cash provided by continuing operations $ 396.8 $ 396.1 Total operating cash (used in) provided by discontinued operations 156.1 169.5 Net cash provided by operating activities 552.9 565.6 Cash flows from investing activities: Purchases of property, plant and equipment (46.1 ) (41.9 ) Proceeds from sale of property 0.2 — Cash paid for acquisitions, net of cash received — (3.7 ) All other investing activities 10.8 (0.9 ) Total investing cash used in continuing operations (35.1 ) (46.5 ) Total investing cash used in discontinued operations (15.7 ) (1,735.7 ) Net cash used in investing activities (50.8 ) (1,782.2 ) Cash flows from financing activities: Net proceeds from (repayments of) commercial paper borrowings (253.2 ) (571.5 ) Repurchase of common shares (344.5 ) (152.9 ) Payment of common stock cash dividend to shareholders (54.2 ) (56.1 ) Proceeds from borrowings (maturities greater than 90 days), net of issuance costs — 1,733.5 Repayment of borrowings (maturities greater than 90 days) — (1,000.0 ) Distribution from discontinued operations 1,150.0 — All other financing activities 14.4 31.9 Total financing cash (used in) provided by continuing operations 512.5 (15.1 ) Total financing cash used in discontinued operations (3.2 ) — Net cash provided by (used in) financing activities 509.3 (15.1 ) Effect of exchange rate changes on cash and equivalents 8.0 (13.0 ) Net change in cash and equivalents 1,019.4 (1,244.7 ) Beginning balance of cash and equivalents 813.3 1,888.8 Ending balance of cash and equivalents $ 1,832.7 $ 644.1 Expand FORTIVE CORPORATION AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES AND OTHER INFORMATION Management believes that each of the non-GAAP financial measures described below provide useful information to investors by reflecting additional ways of viewing aspects of our operations that, when reconciled to the corresponding GAAP measure, help our investors to understand the long-term profitability trends of our business, and facilitate comparisons of our operational performance and profitability to prior and future periods and to our peers. The information presented below reflect GAAP to non-GAAP reconciliations for the non-GAAP measures for Fortive including the results of the Precision Technologies segment ('total Fortive') and Fortive on a continuing operations basis ('new Fortive'). These non-GAAP measures should be considered in addition to, and not as a replacement for or superior to, the comparable GAAP measures, and may not be comparable to similarly titled measures reported by other companies. Adjusted Net Earnings, Adjusted Diluted Net Earnings per Share, Adjusted EBITDA, and Adjusted EBITDA Margin We disclose for total Fortive and new Fortive, on a consolidated basis, the non-GAAP measures of historical adjusted net earnings, historical adjusted diluted net earnings per share, and for Fortive on a continuing operations basis, the non-GAAP measures of historical adjusted earnings before income taxes, interest, depreciation, and amortization ('adjusted EBITDA'), and adjusted EBITDA margin, which to the extent applicable, make the following adjustments to GAAP net earnings, and GAAP diluted net earnings per share: Excluding on a pretax basis amortization of acquisition related intangible assets; Excluding on a pretax basis acquisition, divestiture, and separation related items; Excluding on a pretax basis the costs incurred pursuant to discrete restructuring plans that are fundamentally different from ongoing productivity improvements in terms of the size, strategic nature, planning requirements and the inconsistent frequency of such plans as well as the associated macroeconomic drivers which underlie such plans (the 'Discrete Restructuring Charges'); and Excluding on a pretax basis the gain on sale of property; Excluding on a pretax basis the effect of gains and losses from our equity investments; and Excluding on a pretax basis (to the extent there is a tax effect) gains and losses from divestitures. In addition, for new Fortive on a consolidated basis, with respect to the non-GAAP measures of historical adjusted EBITDA and adjusted EBITDA margin, we make the following adjustments to GAAP net earnings before income taxes: Excluding on a pretax basis net interest expense; Excluding on a pretax basis depreciation expense; and Excluding income taxes. In addition, for total Fortive and new Fortive, on a consolidated basis, with respect to the non-GAAP measures of historical adjusted net earnings and historical adjusted diluted net earnings per share, we make the following adjustments to GAAP net earnings and GAAP diluted net earnings per share: Excluding the tax effect (to the extent tax deductible) of the pretax adjustments noted above. The tax effect of such adjustments was calculated by applying our overall estimated effective tax rate to the pretax amount of each adjustment (unless the nature of the item and/or the tax jurisdiction in which the item has been recorded requires application of a specific tax rate or tax treatment, in which case the tax effect of such item is estimated by applying such specific tax rate or tax treatment). We expect to apply our overall estimated effective tax rate to each adjustment going forward; and Excluding the discrete tax expense resulting from the Separation of Ralliant. We also disclose for each segment of Fortive on a continuing operations basis, the non-GAAP measures of historical adjusted EBITDA and adjusted EBITDA margin, which to the extent applicable, make the following adjustments to GAAP operating profit for the corresponding segment, which is deemed to be the most comparable GAAP measure given interest and taxes are not incurred at the segment level: Excluding on a pretax basis amortization of acquisition related intangible assets; Excluding on a pretax basis acquisition and divestiture; Excluding on a pretax basis the Discrete Restructuring Charges; and Excluding on a pretax basis depreciation expense. Amortization of Acquisition Related Intangible Assets As a result of our acquisition activity, we have significant amortization expense associated with definite-lived intangible assets. We adjust for amortization expense of acquisition related intangible assets incurred in each period, and impairment charges incurred, if any. We believe that this adjustment provides our investors with additional insight into our operational performance and profitability as such impacts are not related to our core business performance. Acquisition, Divestiture, and Separation Related Items While we have a history of acquisition and divestiture activity, we do not acquire and divest businesses or assets on a predictable cycle. The amount of an acquisition's purchase price allocated to inventory fair value adjustments are unique to each acquisition and can vary significantly from acquisition to acquisition. In addition, transaction costs, which include acquisition, divestiture, integration, restructuring, and separation costs related to completed or announced transactions, and the non-recurring gains on divestitures of businesses or assets are unique to each transaction and are impacted from period to period depending on the number of acquisitions or divestitures evaluated, pending, or completed during such period, and the complexity of such transactions. In connection with the Separation, we also incurred costs primarily related to professional fees for legal, tax, accounting and finance, information technology services, and other general and administrative costs, including compensation related expenses, as well as costs to stand up the new company to operate as a stand alone entity. We adjust for transaction costs, costs related to the Separation, acquisition related fair value adjustments to inventory, integration costs and corresponding restructuring charges related to acquisitions, in each case, incurred in a given period. Discrete Restructuring Costs We will exclude costs incurred pursuant to discrete restructuring plans that are fundamentally different in terms of the size, strategic nature and planning requirements, as well as the inconsistent frequency, of such plans originating from significant macroeconomic trends or material disruptions to operations, economy or capital markets from the ongoing productivity improvements that result from application of the Fortive Business System or from execution of general cost saving strategies. Because these restructuring plans will be incremental to the fundamental activities that arise in the ordinary course of our business and we believe are not indicative of our ongoing operating costs in a given period, we exclude these costs to facilitate a more consistent comparison of operating results over time. Restructuring costs related primarily to an acquisition are not included in this adjustment but are instead included in acquisition and divestiture related items. In the fourth quarter of 2024, we initiated a discrete restructuring plan related to the Separation that is expected to be completed by December 31, 2025, we adjusted for the related discrete restructuring charges. Gains and Losses from Equity Investments We adjust for the effect of earnings and losses from our equity method investments over which we do not exercise control over the operations or the resulting earnings or losses. We believe that this adjustment provides our investors with additional insight into our operational performance. However, it should be noted that earnings and losses from our equity method investments will recur in future periods while we maintain such investments. In addition, we adjust for remeasurement gains and losses, including impairment loss, on equity investments. We believe such adjustments facilitate comparison of our performance with prior and future periods and provides our investors with additional insight into our operational performance. Gains and Losses from Divestitures In May 2025, we recorded a gain resulting from an immaterial divestiture in our IOS segment. In June 2024, we divested and transferred ownership of Invetech, excluding the Motion Solution Business, to its management team (the 'Invetech Divestiture'). We adjust for gains and losses from divestitures because we believe the adjustment facilitates comparison of our performance with prior and future periods and provides our investors with additional insight into our operational performance. Gain on Sale of Property and Charitable Contribution Expense On March 14, 2024, we completed a transaction to sell land and certain office buildings in the Precision Technologies segment for $90 million, for which we received $20 million cash proceeds and a $70 million promissory note secured by a letter of credit, with principal received in August and November 2024. During the three-month period ended March 29, 2024, we recorded a gain on sale of property of $63.1 million in the Consolidated Condensed Statements of Earnings. Concurrently, during the first quarter of 2024, we pledged to make a charitable donation of $20 million to the Fortive Foundation ('the Foundation'), a related party, without any donor imposed conditions or restrictions. In the third quarter of 2024, $20 million of the promissory note due in November 2024 was reassigned to the Foundation. We recorded a charitable contribution expense of $20 million within the 'Other non-operating expense, net' line in the Consolidated Condensed Statements of Earnings. We adjust for the gain on sale of property and charitable donation expense because we believe the adjustment facilitates comparison of our performance with prior and future periods and provides our investors with additional insight into our operational performance. Discrete Tax Expense Resulting from the Separation of Ralliant We adjust for discrete tax expense items that resulted from the Separation of Ralliant. These discrete items are non-recurring expenses that resulted from the US GAAP calculation of income taxes from continuing operations and do not reflect our current or future cash tax obligations. Management believes that each of the non-GAAP financial measures noted above provide useful information to investors by reflecting additional ways of viewing aspects of our operations that, when reconciled to the corresponding GAAP measure, help our investors to understand the long-term profitability trends of our business, and facilitate comparisons of our operational performance and profitability to prior and future periods and to our peers. These non-GAAP measures should be considered in addition to, and not as a replacement for or superior to, the comparable GAAP measures, and may not be comparable to similarly titled measures reported by other companies. Core Revenue Growth We use the term 'core revenue growth' when referring to a corresponding year-over-year GAAP revenue measure, excluding (1) the impact from acquired or divested businesses and (2) the impact of foreign currency translation. References to sales attributable to acquisitions or acquired businesses refer to GAAP sales from acquired businesses recorded prior to the first anniversary of the acquisition less the amount of sales attributable to certain divested businesses or product lines that have been divested or, at the time of reporting, are pending divestiture but are not, and will not be, considered discontinued operations prior to the first anniversary of the divestiture. The portion of sales attributable to the impact of currency translation is calculated as the difference between (a) the period-to-period change in sales (excluding sales impact from acquired businesses) and (b) the period-to-period change in sales (excluding sales impact from acquired businesses) after applying the current period foreign exchange rates to the prior year period. This non-GAAP measure should be considered in addition to, and not as a replacement for or superior to, the comparable GAAP measure, and may not be comparable to similarly titled measures reported by other companies. Management believes that this non-GAAP measure provides useful information to investors by helping identify underlying growth trends in our business and facilitating comparisons of our revenue performance with prior and future periods and to our peers. We exclude the effect of acquisition and divestiture-related items because the nature, size and number of such transactions can vary dramatically from period to period and between us and our peers. We exclude the effect of currency translation from sales measures because currency translation is not under management's control and is subject to volatility. We believe that such exclusions, when presented with the corresponding GAAP measures, may assist in assessing the business trends and making comparisons of long-term performance. Free Cash Flow We use the term 'free cash flow' when referring to net cash provided by operating activities calculated according to GAAP less payments for capital expenditures. Management believes that such non-GAAP measure provides useful information to investors in assessing our ability to generate cash without external financing, fund acquisitions and other investments and, in the absence of refinancing, repay our debt obligations. However, it should be noted that free cash flow as a liquidity measure has material limitations because it excludes certain expenditures that are required or that we have committed to, such as debt service requirements and other non-discretionary expenditures. Such non-GAAP measure should be considered in addition to, and not as a replacement for or superior to, the comparable GAAP measure, and may not be comparable to similarly titled measures reported by other companies. Core Revenue Growth Reflecting Ralliant as Discontinued Operations (unaudited) % Change Three Months Ended June 27, 2025 vs. Comparable 2024 Period % Change Three Months Ended June 28, 2024 vs. Comparable 2023 Period Total Revenue Growth (GAAP) (0.4 )% 3.7 % Excluding impact of: Divestitures 0.4 % (0.8 )% Currency exchange rates (0.7 )% 1.0 % Core Revenue Growth (Non-GAAP) (0.7 )% 3.9 % Expand EBITDA and Adjusted EBITDA Margin Reflecting Ralliant as Discontinued Operations (unaudited) Three Months Ended June 27, 2025 June 28, 2024 Revenue (GAAP) $ 1,016.4 $ 1,020.2 Net Earnings from Continuing Operations (GAAP) $ 111.6 $ 112.0 Interest expense, net 32.1 38.7 Income taxes 28.0 23.1 Depreciation 17.6 15.1 Amortization 91.6 92.5 EBITDA from Continuing Operations (Non-GAAP) 280.9 281.4 Pretax acquisition and divestiture related items 1.6 1.4 Pretax discrete restructuring charges 8.0 — Pretax losses from equity investments — 8.5 Pretax gain from divestiture (2.1 ) — Adjusted EBITDA from Continuing Operations (Non-GAAP) $ 288.4 $ 291.3 Net Earnings Margin from Continuing Operations 11.0 % 11.0 % Adjusted EBITDA Margin from Continuing Operations (Non-GAAP) 28.4 % 28.6 % Expand Continuing Operations: Segment Adjusted EBITDA, Segment Adjusted EBITDA Margin (unaudited) Three Months Ended June 27, 2025 Three Months Ended June 28, 2024 $ in millions Intelligent Operating Solutions Advanced Healthcare Solutions Intelligent Operating Solutions Advanced Healthcare Solutions Revenue (GAAP) $ 696.9 $ 319.5 $ 696.6 $ 323.6 Operating Profit (GAAP) $ 170.8 $ 35.8 $ 173.4 $ 35.7 Amortization of acquisition-related intangible assets 46.6 45.0 47.2 45.3 Acquisition and divestiture related items 0.4 — 1.4 — Discrete restructuring charges 5.9 — — — Adjusted Operating Profit (Non-GAAP) 223.7 80.8 222.0 81.0 Depreciation 12.0 5.3 10.0 5.1 Adjusted EBITDA (Non-GAAP) $ 235.7 $ 86.1 $ 232.0 $ 86.1 Operating Profit Margin (GAAP) 24.5 % 11.2 % 24.9 % 11.0 % Adjusted Operating Profit Margin (Non-GAAP) 32.1 % 25.3 % 31.9 % 25.0 % Adjusted EBITDA Margin (Non-GAAP) 33.8 % 26.9 % 33.3 % 26.6 % Expand Adjusted Net Earnings from Continuing Operations and Adjusted Diluted Net Earnings Per Share from Continuing Operations Reflecting Ralliant as Discontinued Operations (unaudited) Three Months Ended ($ in millions, except per share amounts) June 27, 2025 June 28, 2024 Per share values Per share values Net Earnings and Net Earnings Per Share from Continuing Operations (GAAP) $ 111.6 $ 0.33 $ 112.0 $ 0.32 Pretax amortization of acquisition related intangible assets 91.6 0.27 92.5 0.26 Pretax acquisition, divestiture, and separation related items 1.6 — 1.4 — Pretax discrete restructuring charges 8.0 0.02 — — Pretax losses from equity investments — — 8.5 0.02 Pretax gain from divestiture (2.1 ) (0.01 ) — — Tax effect of the adjustments reflected above (12.9 ) (0.03 ) (15.8 ) (0.04 ) Adjusted Net Earnings and Adjusted Net Earnings Per Share from Continuing Operations (Non-GAAP) $ 197.8 $ 0.58 $ 198.6 $ 0.56 Average Common Diluted Stock Outstanding (shares in millions) 341.7 354.8 The sum of the components of adjusted diluted net earnings per share may not equal due to rounding. Expand Free Cash Flow from Continuing Operations Reflecting Ralliant as Discontinued Operations - Trailing Twelve Months (unaudited) ($ in millions) Three Months Ended Trailing Twelve Months June 27, 2025 March 28, 2025 December 31, 2024 September 27, 2024 Operating Cash Flows (GAAP) $ 205.0 $ 191.8 $ 327.7 $ 304.7 $ 1,029.2 Less: Purchases of property, plant & equipment (capital expenditures) (GAAP) (25.0 ) (21.1 ) (22.6 ) (21.6 ) (90.3 ) Free Cash Flow (Non-GAAP) $ 180.0 $ 170.7 $ 305.1 $ 283.1 $ 938.9 Expand ($ in millions) Three Months Ended Trailing Twelve Months June 28, 2024 March 29, 2024 December 31, 2023 September 29, 2023 Operating Cash Flows (GAAP) $ 217.5 $ 178.6 $ 259.8 $ 256.4 $ 912.3 Less: Purchases of property, plant & equipment (capital expenditures) (GAAP) (19.6 ) (22.3 ) (23.4 ) (20.6 ) (85.9 ) Free Cash Flow (Non-GAAP) $ 197.9 $ 156.3 $ 236.4 $ 235.8 $ 826.4 Expand
Business Wire
3 days ago
- Business
- Business Wire
WM Announces Second Quarter 2025 Earnings
HOUSTON--(BUSINESS WIRE)--WM (NYSE: WM) today announced financial results for the quarter ended June 30, 2025. 'As we described at our recent Investor Day, WM is building distinctive platforms to drive competitive differentiation and fuel a powerful, long-term growth engine to create shareholder value. Our second quarter results are a strong demonstration of our progress on all fronts,' said Jim Fish, WM's CEO. 'Our Collection and Disposal business produced robust organic revenue growth and margin expansion, achieving the Company's best-ever operating expense margin. We also grew operating EBITDA by double digits in both our Recycling Processing and Sales and WM Renewable Energy segments, as the earnings contributions from investments we have made in our sustainability businesses accelerate. Additionally, we continue to integrate our newest segment, WM Healthcare Solutions, and benefit from the impact of WM's culture and operational excellence on customer relationships, cost efficiency, and financial results.' Fish continued, 'We released our 2025 Sustainability Report, We're Driving Sustainability, earlier this month, highlighting our progress toward our sustainability ambitions, including an impressive 22% reduction in greenhouse gas emissions since 2021. We're proud of the work our team is doing to advance a more sustainable future for our communities and the environment.' KEY HIGHLIGHTS FOR THE SECOND QUARTER OF 2025 Adjusted operating EBITDA for the WM Legacy Business grew 12.1% and margin was 31.3%. (a) The Company's Collection and Disposal business led the way with an adjusted margin of 37.9% driven by organic revenue growth, continued cost discipline, and optimized business mix. (a) The Company's Recycling Processing and Sales and WM Renewable Energy businesses together contributed $36 million to adjusted operating EBITDA growth, primarily due to sustainability growth projects. (a)(f) WM Healthcare Solutions contributed $110 million of adjusted operating EBITDA, in line with expectations. (a) The Company is on track to achieve the upper end of its targeted synergies of $80 to $100 million in 2025. Expand Revenue growth of 7.1% in the WM Legacy Business was driven by core price of 6.4% and Collection and Disposal yield of 4.1% as the Company continues its focus on customer lifetime value. (e) Volumes in the Collection and Disposal business grew 1.6% as compared to the second quarter of 2024, with robust growth in landfill volumes more than offsetting the Company's loss of a relatively large residential contract. Expand Adjusted operating expenses as a percentage of revenue for the WM Legacy Business improved 150 basis points, reflecting the margin benefits of additional landfill volumes as well as the Company's disciplined cost focus, demonstrated by improved driver turnover and safety performance, routing technology benefits, the strategic exit from low-margin residential collection business, and the benefit of capital investments made in the fleet. (a) Expand Adjusted SG&A results in the WM Legacy Business demonstrate the Company's commitment to cost discipline. The slight increase in SG&A margin compared to the prior year quarter is primarily related to intentional spending to support technology and optimization initiatives. SG&A as a percentage of revenue for WM Healthcare Solutions improved 200 basis points sequentially, or 270 basis points on an adjusted basis, reflecting the contribution of synergies from the Company's efforts to integrate and streamline its sales and back-office processes. (a) Expand Cash Flow and Investments Through the first six months of the year, the Company generated $2.75 billion of net cash provided by operating activities, driven by strong operating EBITDA growth partially offset by higher cash interest related primarily to the funding of the Stericycle acquisition. Free cash flow in the first half of the year was $1.29 billion, driven by robust operating EBITDA growth partially offset by a planned increase in capital expenditures. (a) Expand Sustainability and WM Healthcare Solutions Update The Company continues to progress its strategic investments in recycling and renewable natural gas facilities that drive economic and environmental value. During the quarter, three growth projects commenced operations, including a new renewable natural gas facility in Illinois, a recycling automation project in Pennsylvania and a new market recycling facility in Oregon. These additions bring total renewable natural gas projects completed to eight out of 20 planned facilities and total recycling automation and new market projects completed to 29 out of 39 planned. Integration of WM Healthcare Solutions continues to advance, and as announced during the June Investor Day, the Company has identified $50 million of operating EBITDA opportunities from cross-selling solid waste and medical waste solutions to existing customers, with $11 million of annualized operating EBITDA already secured. Including the cross-selling opportunities, anticipated run-rate synergies are expected to total $300 million of operating EBITDA by 2027. Expand 2025 Outlook With two quarters of the year complete, the Company is confident in its ability to deliver upon its full-year outlook for adjusted operating EBITDA and is positioned to deliver free cash flow in excess of its initial target. The Company delivered adjusted operating EBITDA in the first six months of the year in line with its expectations and initial guidance. The Company is affirming its adjusted operating EBITDA guidance midpoint of $7.550 billion and narrowing its range slightly to $7.475 and $7.625 billion. (a) Free cash flow is now projected to be between $2.8 and $2.9 billion, an increase of $125 million from the Company's initial guidance. (a) The increase in the free cash flow outlook is driven by recently enacted tax policy that restores bonus depreciation to 100%. Total Company revenue is now expected to be between $25.275 and $25.475 billion. The decrease from prior expectations is primarily related to the recent decline in recycled commodity prices which has an outsized impact on the Company's low-margin recycling brokerage business, as well as the impacts of a decline in certain Collection and Disposal volumes in the first quarter of 2025 due to the particularly harsh winter weather. (g) Adjusted operating EBITDA margin is now expected to be between 29.6% and 29.9%, an increase from the prior guidance of between 29.2% and 29.7%. (a) Fish concluded, 'We set a high bar in 2025, and through the first half of the year we have met those high expectations. Our team is focused on serving our customers, optimizing our costs, and innovating to support differentiation and growth. Executing on these priorities is expected to drive strong results in the back half of 2025 and position us to deliver on our guidance, achieve attractive returns on investments and grow shareholder value.' The Company will host a conference call at 10 a.m. ET on July 29, 2025, to discuss the Second Quarter 2025 results. Information contained within this press release will be referenced and should be considered in conjunction with the call. Listeners can access a live audio webcast of the conference call by visiting and selecting 'Events & Presentations' from the website menu. A replay of the audio webcast will be available at the same location following the conclusion of the call. Conference call participants should register to obtain their dial in and passcode details. This streamlined process improves security and eliminates wait times when joining the call. ABOUT WM WM ( is North America's leading provider of comprehensive environmental solutions. Previously known as Waste Management and based in Houston, Texas, WM is driven by commitments to put people first and achieve success with integrity. The company, through its subsidiaries, provides collection, recycling and disposal services to millions of residential, commercial, industrial, medical and municipal customers throughout the U.S. and Canada. With innovative infrastructure and capabilities in recycling, organics and renewable energy, WM provides environmental solutions to and collaborates with its customers in helping them pursue their sustainability goals. In North America, WM has the largest disposal network and collection fleet, is the largest recycler and is a leader in beneficial use of landfill gas, with a growing network of renewable natural gas plants and the most landfill gas-to-electricity plants, as well as the largest heavy-duty natural gas truck fleet in the industry. WM Healthcare Solutions provides collection and disposal services of regulated medical waste and secure information destruction services in the U.S., Canada and Western Europe. To learn more about WM and the company's sustainability progress and solutions, visit FORWARD-LOOKING STATEMENTS The Company, from time to time, provides estimates or projections of financial and other data, comments on expectations relating to future periods and makes statements of opinion, view or belief about current and future events, circumstances or performance. This press release contains a number of such forward-looking statements, including all statements under the heading '2025 Outlook' and all statements regarding future performance and results of our business; achievement of targets, financial guidance or outlook; growth and optimization of our business; integration of the Stericycle business (which is reported as the WM Healthcare Solutions segment) and related contributions, results and benefits, including amount and timing of synergies; amount and timing of sustainability investments, upgrades and project completions and related returns, contributions, and benefits; future capital allocation and acquisition spending; drivers of performance, including pricing programs and volume; and assumptions regarding commodity prices, natural gas production, tax credits and renewable fuel programs. You should view these statements with caution. They are based on the facts and circumstances known to the Company as of the date the statements are made. These forward-looking statements are subject to risks and uncertainties that could cause actual results to be materially different from those set forth in such forward-looking statements, including but not limited to, failure to implement our optimization, automation, growth, and cost savings initiatives and overall business strategy; failure to obtain the results anticipated from strategic initiatives, investments, acquisitions, or new lines of business; failure to identify acquisition targets, consummate and integrate acquisitions, including our ability to integrate the acquisition of Stericycle and achieve the anticipated benefits therefrom, including synergies; legal, regulatory and other matters that may affect the costs and timing of our ability to integrate and deliver all of the expected benefits of the Stericycle acquisition; failure to maintain an effective system of internal control over financial reporting; existing or new environmental and other regulations, including developments related to emerging contaminants, gas emissions, renewable energy, extended producer responsibility and our natural gas fleet; significant environmental, safety or other incidents resulting in liabilities or brand damage; failure to obtain and maintain necessary permits due to land scarcity, public opposition or otherwise; diminishing landfill capacity, resulting in increased costs and the need for disposal alternatives; exposure to different regulatory, legal, financial and economic conditions in international jurisdictions; failure to attract, hire and retain key team members and a high quality workforce; increases in labor costs due to union organizing activities or changes in wage- and labor-related regulations; disruption and costs resulting from severe weather and destructive climate events; failure to achieve our sustainability goals or execute on our sustainability-related strategy and initiatives, including within planned timelines or anticipated budgets due to disruptions, delays, cost increases or changes in environmental or tax regulations and incentives; focus on, and regulation of, environmental and sustainability-related disclosures, which could lead to increased costs, risk of non-compliance, brand damage and litigation risk related to our sustainability efforts; macroeconomic conditions, geopolitical conflict and large-scale market disruption resulting in labor, supply chain and transportation constraints, inflationary cost pressures and fluctuations in commodity prices, fuel and other energy costs; increased competition; pricing actions; impacts from international trade restrictions and tariffs; competitive disposal alternatives, diversion of waste from landfills and declining waste volumes; changing conditions in the healthcare industry; weakness in general economic conditions and capital markets; instability of financial institutions; adoption of new tax legislation; fuel shortages; failure to develop and protect new technology; failure of technology to perform as expected; failure to prevent, detect and address cybersecurity incidents or comply with privacy regulations; inability to adapt and manage the benefits and risks of artificial intelligence; negative outcomes of litigation or governmental proceedings, including those acquired through transactions; and operational or management decisions or developments that result in impairment charges. Please also see the Company's filings with the SEC, including Part I, Item 1A of the Company's most recently filed Annual Report on Form 10-K, as updated by subsequent Quarterly Reports on Form 10-Q, for additional information regarding these and other risks and uncertainties applicable to its business. The Company assumes no obligation to update any forward-looking statement, including financial estimates and forecasts, whether as a result of future events, circumstances or developments or otherwise. NON-GAAP FINANCIAL MEASURES To supplement its financial information, the Company has presented, and/or may discuss on the conference call, adjusted measures including adjusted earnings per diluted share, adjusted net income, adjusted income from operations and margin, adjusted operating EBITDA and margin, adjusted operating expense and margin, and adjusted SG&A expenses and margin. All adjusted measures and free cash flow are non-GAAP financial measures, as defined in Regulation G of the Securities Exchange Act of 1934, as amended. The Company reports its financial results in compliance with GAAP but believes that also discussing non-GAAP measures provides investors with (i) financial measures the Company uses in the management of its business and (ii) additional, meaningful comparisons of current results to prior periods' results by excluding items that the Company does not believe reflect its fundamental business performance and are not representative or indicative of its results of operations. In addition, the Company's projected adjusted operating EBITDA is anticipated to be adjusted to exclude the effects of other events or circumstances that are not representative or indicative of the Company's results of operations. Such excluded items are not currently determinable, but may be significant, such as asset impairments and one-time items, charges, gains or losses from divestitures or litigation, and other items. Due to the uncertainty of the likelihood, amount and timing of any such items, the Company does not have information available to provide a quantitative reconciliation of such projection to the comparable GAAP measure. The Company discusses free cash flow and provides a projection of free cash flow because the Company believes that it is indicative of its ability to pay its quarterly dividends, repurchase common stock, fund acquisitions and other investments and, in the absence of refinancings, to repay its debt obligations. The Company believes free cash flow gives investors useful insight into how the Company views its liquidity, but the use of free cash flow as a liquidity measure has material limitations because it excludes certain expenditures that are required or that the Company has committed to, such as declared dividend payments and debt service requirements. The Company defines free cash flow as net cash provided by operating activities, less capital expenditures, plus proceeds from divestitures of businesses and other assets (net of cash divested); this definition may not be comparable to similarly-titled measures reported by other companies. The quantitative reconciliations of non-GAAP measures to the most comparable GAAP measures are included in the accompanying schedules, with the exception of projected adjusted operating EBITDA. Non-GAAP measures should not be considered a substitute for financial measures presented in accordance with GAAP. WASTE MANAGEMENT, INC. (In Millions) (Unaudited) June 30, December 31, 2025 2024 ASSETS Current assets: Cash and cash equivalents $ 440 $ 414 Receivables, net 3,931 3,687 Other 613 673 Total current assets 4,984 4,774 Property and equipment, net 19,963 19,340 Goodwill 13,886 13,438 Other intangible assets, net 3,964 4,188 Other 2,925 2,827 Total assets $ 45,722 $ 44,567 LIABILITIES AND EQUITY Current liabilities: Accounts payable, accrued liabilities and deferred revenues $ 4,852 $ 4,899 Current portion of long-term debt 964 1,359 Total current liabilities 5,816 6,258 Long-term debt, less current portion 23,056 22,541 Other 7,648 7,514 Total liabilities 36,520 36,313 Equity: Waste Management, Inc. stockholders' equity 9,201 8,252 Noncontrolling interests 1 2 Total equity 9,202 8,254 Total liabilities and equity $ 45,722 $ 44,567 Expand WASTE MANAGEMENT, INC. (In Millions) (Unaudited) Six Months Ended June 30, 2025 2024 Cash flows from operating activities: Consolidated net income $ 1,364 $ 1,387 Adjustments to reconcile consolidated net income to net cash provided by operating activities: Depreciation, depletion and amortization 1,364 1,057 Other 292 166 Change in operating assets and liabilities, net of effects of acquisitions and divestitures (267 ) (89 ) Net cash provided by operating activities 2,753 2,521 Cash flows from investing activities: Acquisitions of businesses, net of cash acquired (366 ) (243 ) Capital expenditures (1,563 ) (1,335 ) Proceeds from divestitures of businesses and other assets, net of cash divested 103 58 Other, net (89 ) (839 ) Net cash used in investing activities (1,915 ) (2,359 ) Cash flows from financing activities: New borrowings 9,135 9,180 Debt repayments (9,234 ) (8,752 ) Common stock repurchase program — (262 ) Cash dividends (669 ) (608 ) Exercise of common stock options 50 36 Tax payments associated with equity-based compensation transactions (49 ) (48 ) Other, net (14 ) (10 ) Net cash used in financing activities (781 ) (464 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents 8 (4 ) Increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents 65 (306 ) Cash, cash equivalents and restricted cash and cash equivalents at beginning of period 487 552 Cash, cash equivalents and restricted cash and cash equivalents at end of period $ 552 $ 246 Expand WASTE MANAGEMENT, INC. SUMMARY DATA SHEET (In Millions) (Unaudited) Three Months Ended June 30, 2025 2024 Gross Intercompany Net Gross Intercompany Net Operating Operating Operating Operating Operating Operating Revenues Revenues Revenues Revenues (a) Revenues (a) Revenues Commercial $ 1,618 $ (220 ) $ 1,398 $ 1,526 $ (196 ) $ 1,330 Industrial 1,013 (223 ) 790 978 (199 ) 779 Residential 894 (22 ) 872 886 (23 ) 863 Other collection 864 (68 ) 796 781 (52 ) 729 Total collection 4,389 (533 ) 3,856 4,171 (470 ) 3,701 Landfill (a) 1,446 (410 ) 1,036 1,262 (389 ) 873 Transfer 681 (292 ) 389 618 (270 ) 348 Total Collection and Disposal $ 6,516 $ (1,235 ) $ 5,281 $ 6,051 $ (1,129 ) $ 4,922 Recycling Processing and Sales 482 (101 ) 381 475 (70 ) 405 WM Renewable Energy 115 — 115 70 (1 ) 69 WM Healthcare Solutions 647 (1 ) 646 — — — Corporate and Other (a) 15 (8 ) 7 14 (8 ) 6 Total $ 7,775 $ (1,345 ) $ 6,430 $ 6,610 $ (1,208 ) $ 5,402 Six Months Ended June 30, 2025 2024 Gross Intercompany Net Gross Intercompany Net Operating Operating Operating Operating Operating Operating Revenues Revenues Revenues Revenues (a) Revenues (a) Revenues Commercial $ 3,212 $ (434 ) $ 2,778 $ 3,027 $ (381 ) $ 2,646 Industrial 1,953 (422 ) 1,531 1,912 (386 ) 1,526 Residential 1,788 (44 ) 1,744 1,762 (45 ) 1,717 Other collection 1,689 (140 ) 1,549 1,532 (105 ) 1,427 Total collection 8,642 (1,040 ) 7,602 8,233 (917 ) 7,316 Landfill (a) 2,639 (763 ) 1,876 2,414 (749 ) 1,665 Transfer 1,273 (548 ) 725 1,178 (521 ) 657 Total Collection and Disposal $ 12,554 $ (2,351 ) $ 10,203 $ 11,825 $ (2,187 ) $ 9,638 Recycling Processing and Sales 947 (182 ) 765 911 (138 ) 773 WM Renewable Energy 207 (1 ) 206 140 (2 ) 138 WM Healthcare Solutions 1,274 (9 ) 1,265 — — — Corporate and Other (a) 25 (16 ) 9 25 (13 ) 12 Total $ 15,007 $ (2,559 ) $ 12,448 $ 12,901 $ (2,340 ) $ 10,561 Expand (a) In the fourth quarter of 2024, the Company adjusted gross and intercompany operating revenues to reflect the 15% royalty paid by WM Renewable Energy to Collection and Disposal and Corporate and Other businesses for the purchase of landfill gas. There was no change to net operating revenues. The three months and six months ended June 30, 2024 were recast to conform to the current presentation. Expand WASTE MANAGEMENT, INC. SUMMARY DATA SHEET (In Millions) (Unaudited) Internal Revenue Growth Period-to-Period Change for the Period-to-Period Change for the Three Months Ended Six Months Ended June 30, 2025 vs. 2024 June 30, 2025 vs. 2024 As a % of As a % of As a % of As a % of Amount Business (a) Amount Company (b) Amount Business (a) Amount Company (b) Collection and Disposal $ 191 4.1 % $ 370 4.0 % Recycling Processing and Sales and WM Renewable Energy (c) (25 ) (5.3 ) (25 ) (2.7 ) Energy surcharge and mandated fees 9 4.2 7 1.7 Total average yield (d) $ 175 3.3 % $ 352 3.4 % Volume (e) 115 2.1 119 1.1 Internal revenue growth 290 5.4 471 4.5 Acquisitions 746 13.7 1,440 13.6 Divestitures (6 ) (0.1 ) (10 ) (0.1 ) Foreign currency translation (2 ) — (14 ) (0.1 ) Total $ 1,028 19.0 % $ 1,887 17.9 % Expand Period-to-Period Change for the Period-to-Period Change for the Three Months Ended Six Months Ended June 30, 2025 vs. 2024 June 30, 2025 vs. 2024 As a % of Related Business (a) As a % of Related Business (a) Yield Volume Yield Volume (f) Commercial 5.3 % (0.1 ) % 5.5 % — % Industrial 3.8 (1.2 ) 3.5 (1.3 ) Residential 5.7 (5.7 ) 5.4 (4.6 ) Total collection 4.7 (1.7 ) 4.7 (1.4 ) MSW 7.0 4.5 5.6 4.1 Transfer 4.0 (3.0 ) 4.8 (3.5 ) Total Collection and Disposal 4.1 % 1.6 % 4.0 % 0.8 % Expand (a) Calculated by dividing the increase or decrease for the current year period by the prior year period's related business revenues adjusted to exclude the impacts of divestitures for the current year period. (b) Calculated by dividing the increase or decrease for the current year period by the prior year period's total Company revenues adjusted to exclude the impacts of divestitures for the current year period. (c) Includes combined impact of commodity price variability in both our Recycling Processing and Sales and WM Renewable Energy segments, as well as changes in certain recycling fees charged by our collection and disposal operations. (d) The amounts reported herein represent the changes in our revenue attributable to average yield for the total Company. (e) Includes activities from our Corporate and Other businesses. (f) Workday adjusted volume impact. Expand WASTE MANAGEMENT, INC. SUMMARY DATA SHEET (In Millions) (Unaudited) Free Cash Flow (a) Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 Net cash provided by operating activities $ 1,545 $ 1,154 $ 2,753 $ 2,521 Capital expenditures to support the business (572 ) (445 ) (1,275 ) (947 ) Proceeds from divestitures of businesses and other assets, net of cash divested 5 43 103 58 Free cash flow without sustainability growth investments 978 752 1,581 1,632 Capital expenditures - sustainability growth investments (160 ) (222 ) (288 ) (388 ) Free cash flow $ 818 $ 530 $ 1,293 $ 1,244 Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 Supplemental Data Internalization of waste, based on disposal costs 71.9 % 69.5 % 71.3 % 68.9 % Landfill depletable tons (in millions) 34.7 32.0 64.0 61.0 Acquisition Summary (b) Gross annualized revenue acquired $ 131 $ 77 $ 142 $ 78 Total consideration, net of cash acquired 404 237 411 240 Cash paid for acquisitions consummated during the period, net of cash acquired 363 231 370 233 Cash paid for acquisitions including contingent consideration and other items from prior periods, net of cash acquired 365 232 378 250 Landfill Depletion and Accretion Expenses: Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 Landfill depletion expense: Cost basis of landfill assets (c) $ 182 $ 162 $ 332 $ 308 Asset retirement costs 38 39 71 69 Total landfill depletion expense (c) 220 201 403 377 Accretion expense 36 33 71 66 Landfill depletion and accretion expense $ 256 $ 234 $ 474 $ 443 Expand (a) The summary of free cash flow has been prepared to highlight and facilitate understanding of the principal cash flow elements. Free cash flow is not a measure of financial performance under generally accepted accounting principles and is not intended to replace the consolidated statement of cash flows that was prepared in accordance with generally accepted accounting principles. (b) Represents amounts associated with business acquisitions consummated during the applicable period except where noted. (c) For both the second quarter of 2025 and the six months ended June 30, 2025, the increase in landfill depletion expense was driven by higher volumes, particularly at sites within our West Tier. Expand (a) For purposes of this press release table, all references to 'Net income' refer to the financial statement line item 'Net income attributable to Waste Management, Inc.' (b) Includes acquisition and integration-related costs, severance and retention costs, and WM Healthcare Solutions Enterprise Resource Planning (ERP) system costs. (c) The three months ended June 30, 2025 includes net charges primarily related to a business engaged in oil recovery and sludge processing services. The three months ended June 30, 2024 includes net charges primarily related to an investment in a waste diversion technology business. (d) The Company calculates its effective tax rate based on actual dollars. When the effective tax rate is calculated by dividing the Tax Expense amount in the table above by the Pre-tax Income amount, differences occur due to rounding, as these items have been rounded in millions. The second quarter 2025 and 2024 adjusted effective tax rates were 21.8% and 23.9%, respectively. Expand WASTE MANAGEMENT, INC. (In Millions) (Unaudited) Three Months Ended June 30, 2025 Gross operating revenues, as reported $ 6,516 $ 482 $ 115 $ 15 $ 7,128 $ 647 $ 7,775 Intercompany operating revenues (1,235 ) (101 ) — (8 ) (1,344 ) (1 ) (1,345 ) Net operating revenues, as reported $ 5,281 $ 381 $ 115 $ 7 $ 5,784 $ 646 $ 6,430 Income from operations, as reported $ 1,461 $ 24 $ 38 $ (349 ) $ 1,174 $ (23 ) $ 1,151 Depreciation, depletion and amortization 517 45 15 26 603 105 708 Operating EBITDA, as reported $ 1,978 $ 69 $ 53 $ (323 ) $ 1,777 $ 82 $ 1,859 Adjustments: Stericycle acquisition and integration-related costs (c) — — — 9 9 28 37 Loss from asset impairments, unusual items and other, net (d) 25 1 — 1 27 — 27 25 1 — 10 36 28 64 Adjusted operating EBITDA $ 2,003 $ 70 $ 53 $ (313 ) $ 1,813 $ 110 $ 1,923 Operating EBITDA margin, as reported 37.5 % 18.1 % 46.1 % N/A 30.7 % 12.7 % 28.9 % Adjusted operating EBITDA margin 37.9 % 18.4 % 46.1 % N/A 31.3 % 17.0 % 29.9 % Three Months Ended June 30, 2024 Collection Processing Renewable Corporate Adjusted Operating EBITDA and Adjusted Operating EBITDA Margin Gross operating revenues, as reported $ 6,051 $ 475 $ 70 $ 14 $ 6,610 Intercompany operating revenues (1,129 ) (70 ) (1 ) (8 ) (1,208 ) Net operating revenues, as reported $ 4,922 $ 405 $ 69 $ 6 $ 5,402 Income from operations, as reported $ 1,359 $ 29 $ 18 $ (397 ) $ 1,009 Depreciation, depletion and amortization 475 31 9 28 543 Operating EBITDA, as reported $ 1,834 $ 60 $ 27 $ (369 ) $ 1,552 Adjustments: Stericycle transaction costs — — — 7 7 Collective bargaining agreement costs 1 — — — 1 Loss from asset impairments, unusual items and other, net (d) 3 — — 55 58 4 — — 62 66 Adjusted operating EBITDA $ 1,838 $ 60 $ 27 $ (307 ) $ 1,618 Operating EBITDA margin, as reported 37.3 % 14.8 % 39.1 % N/A 28.7 % Adjusted operating EBITDA margin 37.3 % 14.8 % 39.1 % N/A 30.0 % Expand (a) Certain fees related to the processing of recycled material we collect are included within our Collection and Disposal businesses. The amounts in Income from Operations for the three months ended June 30, 2025 and 2024 are $20 million and $26 million, respectively. (b) WM Renewable Energy pays a 15% intercompany royalty to our Collection and Disposal and Corporate and Other businesses for landfill gas. The total amount of royalties in Income from Operations for the three months ended June 30, 2025 and 2024, are $17 million and $11 million, respectively. (c) Includes acquisition and integration-related costs, severance and retention costs, and WM Healthcare Solutions Enterprise Resource Planning (ERP) system costs. (d) The three months ended June 30, 2025 includes net charges primarily related to a business engaged in oil recovery and sludge processing services. The three months ended June 30, 2024 includes net charges primarily related to an investment in a waste diversion technology business. Expand WASTE MANAGEMENT, INC. (In Millions) (Unaudited) Three Months Ended Three Months Ended June 30, 2025 June 30, 2024 WM WM Legacy Healthcare Business Solutions Total WM Total WM Gross operating revenues, as reported $ 7,128 $ 647 $ 7,775 $ 6,610 Intercompany operating revenues (1,344 ) (1 ) (1,345 ) (1,208 ) Operating revenues, as reported $ 5,784 $ 646 $ 6,430 $ 5,402 Operating expenses, as reported $ 3,433 $ 406 $ 3,839 $ 3,291 As a % of net revenues 59.4 % 62.8 % 59.7 % 60.9 % Adjustments: Stericycle acquisition and integration-related costs — (4 ) (4 ) — Collective bargaining agreement costs — — — (1 ) Operating expenses, as adjusted $ 3,433 $ 402 $ 3,835 $ 3,290 As a % of net revenues 59.4 % 62.2 % 59.6 % 60.9 % Three Months Ended Three Months Ended Three Months Ended June 30, 2025 June 30, 2024 March 31, 2025 (a) WM WM WM Intercompany operating revenues (1,344 ) (1 ) (1,345 ) (1,208 ) (8 ) Operating revenues, as reported $ 5,784 $ 646 $ 6,430 $ 5,402 $ 619 SG&A expenses, as reported $ 546 $ 150 $ 696 $ 501 $ 156 As a % of net revenues 9.4 % 23.2 % 10.8 % 9.3 % 25.2 % Adjustment: Stericycle acquisition and integration-related costs (9 ) (15 ) (24 ) (7 ) (10 ) SG&A expenses, as adjusted $ 537 $ 135 $ 672 $ 494 $ 146 As a % of net revenues 9.3 % 20.9 % 10.5 % 9.1 % 23.6 % 2025 Projected Free Cash Flow Reconciliation (b) Scenario 1 Scenario 2 Net cash provided by operating activities $ 5,860 $ 6,025 Capital expenditures to support the business (2,575 ) (2,625 ) Proceeds from divestitures of businesses and other assets, net of cash divested 115 150 Free cash flow without sustainability growth investments $ 3,400 $ 3,550 Capital expenditures - sustainability growth investments (600 ) (650 ) Free cash flow $ 2,800 $ 2,900 Expand (a) WM Healthcare Solutions Q1 2025 results are included to provide a reconciliation for the sequential improvement in adjusted SG&A as a percentage of revenue. (b) The reconciliation includes two scenarios that illustrate our projected free cash flow range for 2025. The amounts used in the reconciliation are subject to many variables, some of which are not under our control and, therefore, are not necessarily indicative of actual results. Expand WASTE MANAGEMENT, INC. (In Millions) (Unaudited) Diversity in the structure of recycling contracts results in different accounting treatment for commodity rebates. In accordance with revenue recognition guidance, our Company records gross recycling revenue and records rebates paid to customers as cost of goods sold. Other contract structures allow for netting of rebates against revenue. Additionally, there are differences in whether companies adjust for accretion expense in their calculation of EBITDA. Our Company does not adjust for landfill accretion expenses when calculating operating EBITDA, while other companies do adjust it for the calculation of their EBITDA measure. The table below illustrates the impact that differing contract structures and treatment of accretion expense has on the Company's adjusted operating EBITDA margin results. This information has been provided to enhance comparability and is not intended to replace or adjust GAAP reported results. Expand
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Robinhood's Lofy Valuation: A Vote of Confidence or Cautionary Tale?
Robinhood Markets' HOOD shares are trading at a massive premium to the industry. At present, the company has a forward price/earnings (P/E) of 67.23X compared with the industry average of 14.81X. Price-to-Earnings F12M Image Source: Zacks Investment Research Further, HOOD stock looks expensive compared with its peers -- Charles Schwab SCHW and Interactive Brokers IBKR. Schwab and Interactive Brokers have a forward P/E of 19.40X and 32.26X, the stock trading at a premium, this has raised a question in everyone's mind: whether the valuation is rooted in optimism over its long-term growth or detached from its current fundamentals. With expanding product offerings and a growing user base, is the market right to bet big on HOOD? Let's find out. Robinhood: A Global Innovative Player Robinhood has evolved significantly since the meme stock frenzy of early 2021, emerging as a serious competitor to established online brokerage players like Interactive Brokers and Schwab. The company intends to become a one-stop shop for building generational wealth align with its goal of becoming an international player, the company has unveiled several products and services, including tokenized U.S. stock and exchange-traded fund (ETF) for European Union (EU) investors and an advanced desktop platform, Robinhood Legend, in the U.K., following its launch in the United States in October 2024. Moreover, in May, HOOD announced an agreement to acquire Canada-based WonderFi Technologies Inc. Besides granting regulatory footing in Canada, the transaction strengthens the company's position in a rapidly growing crypto market. These efforts align with Robinhood's ambition to become a global player as the company looks to expand its presence beyond the Americas and Europe into the Asia-Pacific region. During its first Investor Day conference in December 2024, CEO Vlad Tenev mentioned that the company will set up a new office in Singapore in 2025, which will serve as HOOD's headquarters for the company is likely to launch digital asset trading in Singapore soon, having completed the acquisition of Luxembourg-based Bitstamp, a globally recognized cryptocurrency exchange. The deal provides Robinhood with the requisite regulatory approvals, positioning the company to enter Singapore's expanding digital assets market. HOOD's Business Diversifying Efforts Robinhood has evolved from a brokerage firm primarily trading in digital assets to a more mature and diversified entity, striving to widen its market and reach. Looking at the numbers, in 2021, it mainly relied on transaction-based revenues (almost 75% of total revenues) to generate income. In 2024, this came down to nearly 56%.Other initiatives by Robinhood reflect its ambition to become a comprehensive financial services provider. In March, the company launched Robinhood Strategies, Robinhood Banking and Robinhood Cortex, a suite of new features, to boost the wealth management offerings for its Robinhood Gold members. Further, it launched the prediction markets hub, allowing customers to trade on the outcomes of several major global events. Initially, the hub will be available across the United States through KalshiEX LLC, a Commodity Futures Trading Commission-regulated contracts gained traction when Robinhood launched them in October 2024, just before the U.S. Presidential elections. Similarly, Interactive Brokers has been actively expanding its event contract offerings to capitalize on rising demand. In April, it launched prediction markets in Canada. Like HOOD, it first introduced event contracts in October 2024, starting with the U.S. election in February, Robinhood acquired Gainesville, FL-based TradePMR, a custodial (having $40 billion in assets under administration) and portfolio management platform specializing in services for Registered Investment Advisors. The company gained immediate credibility and resources to cater to wealthier investors seeking advisory solutions. By foraying into the advisory space, the company now directly competes with established players like Schwab and Fidelity in July 2024, Robinhood acquired Pluto Capital Inc. With the integration of Pluto's advanced capabilities, HOOD is set to revolutionize the investment experience for its users. Also, as part of a diversification effort, the company launched a credit card (expanding into the consumer finance space). Cryptocurrencies: A Vital Tailwind for Robinhood Robinhood's focus on the cryptocurrency space, through increased tokenization, enhanced platform capabilities and expansion into EU markets, is expected to drive greater cost efficiency and revenue growth. The company is actively pursuing Markets in Crypto-Assets Regulation (MiCA) licenses, which would enable it to offer crypto services across the European Economic Area, expanding its reach to 27 acquisition of Bitstamp and the impending WonderFi deal align with this broader strategy. Bitstamp's core spot exchange, offering more than 85 tradable assets, will significantly strengthen Robinhood's crypto product suite. Meanwhile, WonderFi brings two of Canada's leading regulated crypto platforms — Bitbuy and Coinsquare — with more than C$2.1 billion in assets under custody. These will enable Robinhood to provide trading, staking and custody the platform diversifies and enhances its offerings, Robinhood's cryptocurrency revenues are well-positioned for growth, supported by increasing investor interest in crypto as both a return-generating and diversification tool. Currently, Robinhood supports many major cryptocurrencies — Bitcoin, Ethereum, Dogecoin, Litecoin, Solana and Toncoin. HOOD Rewards Shareholders In 2024, Robinhood announced a share buyback plan (for the first time) to repurchase up to $1 billion of its outstanding common stock. In April, the company increased its existing authorization by $500 million to $1.5 billion. As of April 30, 2025, approximately $833 million worth of shares remained available for repurchase. HOOD plans to complete the remainder of its total authorization over roughly the next two is on solid ground, with significant cash reserves. As of March 31, 2025, it reported cash and cash equivalents of $4.42 billion. Litigation & Probes Surrounding Robinhood Robinhood operates in a highly regulated industry and is subject to the scrutiny of numerous authorities. This exposes the company to regulatory risks, resulting in hefty fines and restrictions that may affect its growth this month, Florida Attorney General James Uthmeier initiated an investigation into Robinhood Crypto, LLC, a subsidiary of Robinhood, for alleged violation of the state's Deceptive and Unfair Practices Act by falsely promoting its platform as the most affordable one to buy crypto. The company is also under investigation by Lithuania's central bank, its lead regulator in the EU, regarding its newly launched tokenized equity products. Moreover, between 2023 and 2025, Robinhood faced multiple regulatory setbacks, including a $45 million fine in January 2025 for securities law violations and a $26 million FINRA settlement in March over identity verification failures. It also paid $3.9 million in 2024 for crypto withdrawal issues and $7.5 million in 2023 after losing a Massachusetts court case tied to product oversight and marketing regulatory actions highlight ongoing compliance and oversight challenges faced by Robinhood. HOOD's Earnings Estimates & Price Performance Over the past month, the Zacks Consensus Estimate for 2025 and 2026 has been revised upward to $1.31 and $1.68, respectively. This reflects a bullish sentiment among analysts. Estimate Revision Trend Image Source: Zacks Investment Research The Zacks Consensus Estimate for HOOD's earnings implies 20.2% and 28.1% year-over-year growth in 2025 and 2026, respectively. Further, Robinhood shares have surged an impressive 173.65% this year, driven by rising investor confidence in its strategic growth initiatives and a more favorable regulatory outlook for cryptocurrencies. The rally also reflects broader optimism around the mainstream adoption of digital assets and Robinhood's positioning to capitalize on that such, HOOD stock has outperformed the industry's rally of 22.4%. Meanwhile, shares of Schwab gained 30.4%, while Interactive Brokers jumped 46.5%. HOOD's YTD Price Performance Image Source: Zacks Investment Research Making Sense of Robinhood's Premium Valuation Robinhood's premium valuation can be justified by its rapid transformation into a diversified, global financial services platform. The company has moved well beyond its roots in retail brokerage, expanding into wealth management, advisory services and consumer finance. Its growing international footprint has been bolstered by tapping into high-growth crypto and fintech markets. Robinhood's evolving product suite caters to a younger, tech-savvy investor base, while its declining reliance on transaction-based revenue reflects increasing business maturity. Solid liquidity, a $1.5 billion buyback program and robust user growth amid rising digital asset adoption further reinforce investor confidence. Although regulatory scrutiny remains a headwind, Robinhood's innovation-driven growth strategy and expanding global presence suggest that its lofty valuation reflects more than just hype; it's a bet on the company's long-term potential to reshape modern present, Robinhood sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Charles Schwab Corporation (SCHW) : Free Stock Analysis Report Interactive Brokers Group, Inc. (IBKR) : Free Stock Analysis Report Robinhood Markets, Inc. (HOOD) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
