Waste Connections outlines mid- to high single-digit 2027 revenue growth framework as it lifts 2026 outlook to ~$10.09B revenue
View original at seekingalpha.comWaste Connections outlines mid- to high single-digit 2027 revenue growth framework as it lifts 2026 outlook to ~$10.09B revenue Earnings Call Insights: Waste Connections (WCN) Q3 2026 MANAGEMENT VIEW * "We are extremely pleased to deliver third quarter results above expectations, setting up another increase to our full…
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60% confidenceWaste Connections should be positioned for mid- to high single-digit revenue growth in 2027, assuming no change in the economic environment.
60% confidenceThe company has seen some diesel cost creep and has had little opportunity to lock in hedges for 2027.
60% confidenceInterest expense has risen by about $40 million after $1 billion of repurchases, explaining why the free cash flow guide is largely unchanged despite higher EBITDA.
60% confidenceChiquita remediation is following a typical curve of a decelerating ETLF, with actions including covering about 41 acres and drilling about 300 wells.
60% confidenceFuture events like Chiquita would be different because they would not be in California, with learnings including centralized well monitoring and more rapid leachate extraction.
60% confidenceUnit volume declines eased to 1.2%, and some decline in the amount of contract shedding continues.
60% confidenceAbout $75 million of Chiquita spending this year largely does not repeat, and free cash flow conversion should return to 48% to 50% from about 42% now.
60% confidenceExcluding about 30 basis points of margin drag from higher fuel costs, underlying adjusted EBITDA margin was up 50 basis points.
60% confidenceQ3 results were above expectations, setting up another increase to the full-year outlook and showing the durability of the model regardless of the macroeconomic environment.
60% confidenceFull year 2026 outlook raised to revenue of about $10.09 billion and adjusted EBITDA of about $3.345 billion or 33.2%.
60% confidenceNo incremental benefit from AI is baked into 2027; benefits should start to appear in 2028.
60% confidenceArrowhead is peaking between 7,000 and 7,500 tonnes a day and is expected to reach 8,500 to 9,000 tons over the next 24 months.
60% confidenceThe outlook assumes no change in underlying economic trends.
60% confidenceFuel and material surcharges of about $30 million, or 1.3% of revenue, rose about 20% sequentially from Q2 on higher diesel costs.
60% confidenceInternalization should stay in the 58% to 60% range.
60% confidence60% of locations had positive special waste tons in Q3 and 4 of 6 regions were up.
60% confidence$200 million of annual acquisitions is a more normalized low watermark, and activity over time should look much more similar to 2022-2025.
60% confidenceDebt is about 80-20 fixed to floating with an average cost of debt of about 4%.
60% confidenceLandfill gas sales rose 35% year-over-year on higher volumes from new RNG facilities and RIN values up about 10% to an average of about $2.50.
60% confidenceQ4 will be the toughest quarterly comparison, and it is a little too early to assume landfill volume strength continues.
60% confidenceYear-to-date adjusted free cash flow of $1.09 billion was in line with expectations, and the company remains on pace for a full year 2026 outlook of at least $1.4 billion.
60% confidenceUnderlying margin expansion of 50 basis points drove adjusted EBITDA margin of 34% despite surging diesel costs late in the quarter.
60% confidenceA similar step down in Chiquita outlays should be expected for 2027.
60% confidence