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Waste Management’s 35% Cash Flow Surge — Can Its $300 Million SmartTruck Engine Deliver More?

Waste Management, Inc. reported second quarter results demonstrating continued earnings growth, margin expansion, and robust cash flow generation, underscoring the consistency of its integrated operating model. Operating EBITDA increased 5.5%, or 9.1% excluding last year’s elevated wildfire cleanup activity, with margin expanding by 40 basis points. This improvement overcame notable headwinds including a 60 basis point drag from wildfire-related volumes and a 40 basis point impact from higher energy surcharges. The collection and disposal segment was a primary driver, benefitting from pricing discipline, cost optimization, and improved business mix. Free cash flow grew 35% in the quarter, supported by lower capital expenditures and working capital efficiencies, contributing to strong operating cash flow and high EBITDA-to-free cash flow conversion. Key growth areas include recycling and renewable energy, which collectively grew operating EBITDA by nearly 33%, aided by a 12% increase in processed recyclables and a 1.