Operating income rose 23.2%, helped by a Q3 2025 base that carried $63.5M of charges 8-K. Management raised 2026 revenue and adjusted EBITDA guidance for a second time, to about $10.09B and about $3.345B; adjusted free cash flow is guided at $1.40B to $1.45B 8-K.
Waste Connections, Inc. · Q3 2026 · Reported 21 Oct 2026 · US
Key figures
Million USD | Q3 2026 | Q3 2025 | Change |
|---|---|---|---|
Revenue | 2,638.08 | 2,458.38 | +7.3 % |
Operating income | 541.75 | 439.59 | +23.2 % |
Net income | 359.22 | 286.27 | +25.5 % |
Diluted EPS | 1.43 USD/share | 1.11 USD/share | +28.8 % |
Operating cash flow | 691.92 | 677.45 | +2.1 % |
Operating margin | 20.5 % | 17.9 % | +2.7 pp |
Net margin | 13.6 % | 11.6 % | +2.0 pp |
Figures in USD, as reported. Margins are computed from the reported lines. Operating cash flow for the quarter are derived by subtracting year-to-date periods.
Operating income rose 23.2%, helped by a year-earlier base with $63.5M of charges
Revenue rose 7.3% to $2.638 billion, while operating income rose to $541.7 million from $439.6 million and operating margin widened to 20.5% from 17.9% a year earlier 8-K. The year-earlier figure included $63.5 million, mainly from the write-down of contracts and a non-operating E&P waste facility permit, an environmental liability at an operating facility and transaction-related expenses 8-K. Q3 2026 carried only $3.0 million of transaction costs and $1.9 million of impairments and other operating items 8-K.
Excluding the $3.0 million of transaction costs, operating income would have risen 23.9%, and excluding the $1.9 million of impairments, 23.7% (calculations that exclude each item, not company figures) 8-K. The 2026 items therefore barely change the result. Much of the reported margin gain reflects the lighter charge load against Q3 2025.
The underlying margin gain was smaller: 50 basis points, despite a late diesel spike
On the company-defined measure, adjusted EBITDA was $895.8 million, or 34.0% of revenue, against $830.3 million a year earlier 8-K. Management put underlying margin expansion at 50 basis points and said the result came despite a late-quarter surge in diesel pricing 8-K. It credited landfill volumes, commodity-related revenues, employee retention and safety performance 8-K.
Solid waste unit volumes improved 70 basis points sequentially, led by landfill volumes 8-K. The report gives no volume or price split of the 7.3% revenue growth. It does say that year-to-date acquisitions closed represent about $130 million of annualized revenue, so some growth is acquired rather than organic 8-K.
Per-share growth outran net income because of buybacks
Net income rose 25.5% to $359.2 million, and diluted EPS rose 28.8% to $1.43 on 251.9 million diluted shares, against 257.6 million a year earlier 8-K. Year-to-date repurchases passed $1 billion, or 2.5% of outstanding shares 8-K. Adjusted EPS, a company-defined measure that excludes impairments and acquisition-related items, rose less, to $1.58 from $1.44, because the year-earlier charges are excluded from it 8-K.
Cash flow grew far less than profit
Operating cash flow was $691.9 million against $677.5 million a year earlier, up 2.1% (derived from year-to-date figures). Cash conversion, operating cash flow as a share of net income, was 193% against 237% a year earlier. The report does not give the drivers of the quarterly change. The full-year operating cash flow outlook is $2.64 billion to $2.69 billion 8-K.
What to watch next
Delivery against the raised outlook: revenue of about $10.09 billion, adjusted EBITDA of about $3.345 billion and adjusted free cash flow of $1.40 billion to $1.45 billion, which management expects to exceed on revenue and adjusted EBITDA 8-K.
Diesel costs and landfill volumes: whether the 50 basis points of underlying margin expansion holds after the late-quarter diesel surge, and whether the 70 basis point sequential volume gain continues 8-K.
Outlook scope: guidance excludes additional acquisitions and assumes no change in the economic environment 8-K.
Sources
Produced by Clarifo Research with the Clarifo financial research engine from the company's public filings. AI was used in parts of the analysis and drafting. Figures are checked automatically against the filings they come from. This is not investment advice.