Waste Management Inc delivered a solid sequential and positive year-over-year revenue trajectory in QQ4 2024, underpinned by resilient volumes and a diversified asset base across collection, transfer, MRFs, and landfills. Revenue rose to USD 5.893 billion in the quarter, up 12.96% year over year and 5.06% quarter over quarter, with gross profit of USD 1.689 billion and a gross margin of 28.6%. Operating income reached USD 0.941 billion, translating to an operating margin of ~16.0%, while net income stood at USD 598 million and diluted EPS at USD 1.48–1.49. These metrics reflect a favorable top-line trajectory even as the business contends with higher operating costs and strategic investments.
Cash flow and capital allocation were clearly directional but mixed. Operating cash flow (OCF) was robust at USD 1.511 billion, supporting USD 1.115 billion of capital expenditures and yielding a free cash flow of USD 396 million for the quarter. However, investing cash flow was heavily negative (USD -7.762 billion for the four quarters) driven by acquisitions, while financing activities contributed USD 6.058 billion, including substantial debt repayments (USD 6.413 billion). Net of these activities, cash declined modestly to USD 0.487 billion at period end. The balance sheet remains asset-heavy with elevated goodwill and intangible assets (Goodwill USD 13.438 billion; intangibles USD 4.188 billion; total assets USD 44.567 billion) and a high debt burden (total debt USD 23.9 billion; net debt USD 23.486 billion).
From a risk/return perspective, Waste Management exhibits durable, regulated cash flows and a scalable platform, but the leverage burden and heavy capital deployment on acquisitions introduce balance-sheet and coverage challenges. The company trades at elevated valuation multiples (e.g., P/E around 33.8x, P/B ~9.8x) relative to peers, reflecting its size, franchise, and relatively predictable cash generation. Absent material shifts in debt levels, cost optimization, or portfolio rationalization, the near-term investment thesis centers on steady volume growth, margin stabilization, and disciplined capital allocation to de-lever or improve free cash flow generation over time.