Q1 2025 Waste Industry Overview: Growth, Caution, and Consolidation

The first quarter of 2025 brought a mixed bag of expansion, earnings resilience, and operational restructuring across North America’s largest waste management companies. While leaders like Waste Management Inc. (WM) and Clean Harbors (CLH) posted strong EBITDA growth, the quarter also highlighted macroeconomic headwinds, margin pressure, and workforce realignments, as seen with Waste Harmonics Keter.

Waste Management Inc. (NYSE: WM): EBITDA Surge and Strategic Growth

Waste Management (WM) reported a robust Q1 2025, with total company operating EBITDA increasing over 12% year-over-year. Their sustainability divisions—recycling and renewable energy—led the way with over 20% growth, reflecting WM’s continued push into circular economy services.

Highlights:

EBITDA Growth: 12% overall; 20% in sustainability businesses.
Margins: Legacy business margins reached 30% for the fourth consecutive quarter; total company margin was 28.5%.
Revenue Drivers: Collection and disposal yield up 4%; core price growth of 6.5%.
Free Cash Flow: $475 million, despite capital expenditures of $831 million.
Strategic Moves: Integration of WM Healthcare Solutions on track to deliver $250M annual synergies by 2027. Over $500M in tuck-in acquisitions expected for the year.

Challenges:

The end of federal alternative fuel tax credits shaved 30 basis points off margins.
Volumes were impacted by winter weather and the exit from low-margin residential contracts.
Integration of Stericycle’s ERP system has introduced inefficiencies in healthcare services.

Clean Harbors (NYSE: CLH): Growth Through Resilience and Safety

Clean Harbors posted solid results in Q1, with a 4% year-over-year revenue increase to $1.43 billion and adjusted EBITDA reaching $234.9 million. Notably, its Environmental Services segment outpaced weather disruptions, while the Safety-Kleen division adapted well to pricing pressures.

Highlights:

Environmental Services: Field Services revenues surged 32%, Technical Services revenue up 5%.
Incineration Utilization: Reached 88% (excluding the new Kimball facility).
Net Income: $58.7 million, or $1.09 EPS.
Adjusted EBITDA Margin: 16.4%.
Safety Performance: Best quarterly TRIR on record at 0.46.

Forward Guidance:

Full-year Adjusted EBITDA forecast maintained between $1.15B–$1.21B.
Adjusted free cash flow expected to grow nearly 30% YoY to a midpoint of $460 million.

Headwinds:

Industrial Services revenue declined 10% due to refinery customer delays.
Soft U.S. base oil and lubricant demand continues to pressure SKSS, although mitigated by cost control and acquisitions.

Waste Connections (NYSE: WCN): Hidden Strength Beneath the Surface

Although WCN’s Q1 earnings appeared muted at first glance, analysts noted significant unusual items—about $150 million—that distorted statutory earnings. Without these, the company’s underlying profitability may be stronger than reported.

Key Takeaways:

Statutory profits were reduced by one-time charges.
Adjusted figures suggest potential margin recovery and profit growth in subsequent quarters.
Analysts are optimistic that, barring further unusual items, 2025 results will rebound.

Waste Harmonics Keter: Layoffs Amid Restructuring

In contrast to the earnings optimism seen across publicly traded peers, Waste Harmonics Keter, a broker of commercial waste services, announced a significant workforce reduction. The company will lay off 66 of its 125 employees in Victor, NY by July 2025 due to relocation efforts.

This marks a period of transition for the company, which was formed by a 2023 merger between Waste Harmonics and Keter Environmental Services. Leadership changes have followed, with Robert Boucher recently appointed as CEO while founders Michael Hess and Steven Schlussel remain on the board.

Conclusion: An Industry Evolving at Different Speeds

The waste and environmental services sector in Q1 2025 showed strong performance among major players investing in sustainability, infrastructure, and automation. WM and Clean Harbors both showcased resilience and strategic clarity, while Waste Connections wrestled with accounting noise. Meanwhile, Waste Harmonics Keter highlighted the pains of consolidation and restructuring in the private segment of the market.

As 2025 progresses, the industry is set to be shaped by:

Synergies from healthcare and sustainability-focused acquisitions.
Operational efficiency gains from automation and technology.
Margin management amidst inflation, labor costs, and commodity price variability.
A likely increase in M&A, especially among smaller or mid-sized firms.