Waste Management Q3 2025: Stericycle Acquisition Boosts Revenue, Hits Profits

Waste Management (WM), a titan in the North American environmental services industry, recently released its financial results for the third quarter of 2025. This report offers a clear look at a company in transition, digesting its massive acquisition of Stericycle while navigating a complex economic landscape. Let's break down the key details from their latest 10-Q filing to understand the story behind the numbers.

Acquisition Fuels Revenue Growth

At first glance, Waste Management's top line looks robust. The company reported $6.44 billion in revenue for the quarter, a significant 14.9% increase from the $5.61 billion reported in the same period last year.

What's driving this growth? The primary engine is acquisitions, which contributed $674 million to the year-over-year revenue increase. The most notable of these is the November 2024 purchase of Stericycle, which now forms the company's "WM Healthcare Solutions" segment. This new division alone brought in $628 million in revenue for the quarter.

Beyond the acquisition, WM's core business showed resilience. The "Collection and Disposal" segment saw its revenue grow, driven by a combination of price increases (referred to as yield) and higher waste volumes, particularly from landfill and industrial collection services.

Profitability Takes a Hit from Integration and Impairments

While revenue soared, profitability tells a different story. Net income fell to $603 million, or $1.49 per diluted share, down from $760 million, or $1.88 per diluted share, in the third quarter of 2024.

This decline was caused by several key factors:

• Impairment Charges: The company recorded significant one-time charges totaling $213 million. This included a $152 million impairment related to a plastic film recycling business, citing deteriorating market prices and demand, and a $45 million charge for the accelerated closure of a landfill.
• Higher Operating Costs: The integration of Stericycle brought higher costs. Selling, general, and administrative (SG&A) expenses rose to $665 million (10.3% of revenue) from $525 million (9.4% of revenue) a year ago. Depreciation and amortization expenses also jumped by over 30% to $729 million, largely due to the assets acquired from Stericycle.
• Increased Interest Expense: To finance the Stericycle acquisition, WM took on additional debt. This resulted in net interest expense climbing to $225 million for the quarter, up from $131 million in the prior-year period.

The following flow diagram provides a visual breakdown of Waste Management's revenues and expenses for the third quarter, illustrating how the top-line revenue translates into bottom-line profit.

In the diagram, the "Corporate and Other" segment represents revenues and costs not assigned to a specific business line, such as certain corporate-level activities. For this quarter, it represents a very small portion of the company's overall financial picture.

The flow diagram also highlights a significant negative cost of nearly $1.5 billion labeled as "unallocated." This is a standard accounting adjustment for what's known as intercompany eliminations. When one WM division provides services to another (for example, a landfill charging a collection division a disposal fee), it's treated as an internal transaction. For the company's consolidated report, these internal sales and associated costs are removed to avoid double-counting and to ensure the financials only reflect business with outside customers.

Looking Ahead

Waste Management's Q3 2025 results paint a picture of a company executing a major strategic pivot. The Stericycle acquisition has successfully boosted its revenue base and expanded its footprint into the specialized healthcare waste market. However, this growth has come with the expected short-term pains of integration costs, higher debt service, and one-off charges that have squeezed profitability.

As a sign of its focus on deleveraging, the company has temporarily suspended its share repurchase program, planning to resume once its leverage returns to target levels. This highlights a disciplined approach to capital allocation during this transformative period. Investors and analysts will be closely watching how quickly WM can realize synergies from the acquisition and restore its profit margins in the coming quarters.