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Waste management company Waste Connections (NYSE:WCN) in Q2 CY2026, with sales up 6.4% year on year to $2.56 billion. The company expects the full year’s revenue to be around $10.04 billion, close to analysts’ estimates. Its non-GAAP profit of $1.50 per share was 10.7% above analysts’ consensus estimates.
Is now the time to buy Waste Connections? Find out by accessing our full research report, it’s free.
Waste Connections (WCN) Q2 CY2026 Highlights:
・Revenue: $2.56 billion vs analyst estimates of $2.54 billion (6.4% year-on-year growth, 0.9% beat)
・Adjusted EPS: $1.50 vs analyst estimates of $1.35 (10.7% beat)
・Adjusted EBITDA: $840.1 million vs analyst estimates of $831.3 million (32.8% margin, 1.1% beat)
・Operating Margin: 17.1%, down from 19.1% in the same quarter last year
・Free Cash Flow Margin: 16.8%, up from 14.7% in the same quarter last year
・Market Capitalization: $42.79 billion
Company Overview
Operating a network of municipal solid waste landfills in the U.S. and Canada, Waste Connections (NYSE:WCN) is North America's third-largest waste management company providing collection, disposal, and recycling services.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Thankfully, Waste Connections’s 11.3% annualized revenue growth over the last five years was impressive. Its growth beat the average industrials company and shows its offerings resonate with customers.
Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Waste Connections’s annualized revenue growth of 7.7% over the last two years is below its five-year trend, but we still think the results were respectable.
This quarter, Waste Connections reported year-on-year revenue growth of 6.4%, and its $2.56 billion of revenue exceeded Wall Street’s estimates by 0.9%.
Looking ahead, sell-side analysts expect revenue to grow 5.3% over the next 12 months, a slight deceleration versus the last two years. This projection doesn’t excite us and suggests its products and services will see some demand headwinds.
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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.
Waste Connections’s operating margin has risen over the last 12 months and averaged 15.8% over the last five years. On top of that, its profitability was elite for an industrials business thanks to its efficient cost structure and economies of scale. This result isn’t surprising as its high gross margin gives it a favorable starting point.
Analyzing the trend in its profitability, Waste Connections’s operating margin might have 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.
In Q2, Waste Connections generated an operating margin profit margin of 17.1%, down 2 percentage points year on year. Since Waste Connections’s operating margin decreased more than its gross margin, we can assume it was less efficient because expenses such as marketing, R&D, and administrative overhead increased.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions.
Waste Connections’s EPS grew at 13.4% compounded annual growth rate over the last five years, higher than its 11.3% annualized revenue growth. However, this alone doesn’t tell us much about its business quality because its operating margin didn’t improve.
We can take a deeper look into Waste Connections’s earnings to better understand the drivers of its performance. A five-year view shows that Waste Connections has repurchased its stock, shrinking its share count by 2.9%. 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 shorter period to see if we are missing a change in the business.
For Waste Connections, its two-year annual EPS growth of 9.4% was lower than its five-year trend. We hope its growth can accelerate in the future.
In Q2, Waste Connections reported adjusted EPS of $1.50, up from $1.29 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 Waste Connections’s full-year EPS to grow 6.1% from $5.46 to $5.79.
Key Takeaways from Waste Connections’s Q2 Results
It was good to see Waste Connections beat analysts’ EPS expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. Overall, this print had some key positives. The stock traded up 1.2% to $169.81 immediately after reporting.
Waste Connections may have had a good quarter, but does that mean you should invest right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
