Waste Management (WM) 26 Apr 222022 Q1 Earnings call transcript

Company Profile

Participants

Edward Egl	Senior Director of IR
James Fish	President and Chief Executive Officer
John Morris	Executive Vice President and Chief Operating Officer
Devina Rankin	Executive Vice President and Chief Financial Officer
Toni Kaplan	Morgan Stanley
Jerry Revich	Goldman Sachs
Hamzah Mazari	Jefferies
Michael Hoffman	Stifel
Walter Spracklin	RBC Capital Markets
Tyler Brown	Raymond James
David Manthey	Baird
Sean Eastman	KeyBanc Capital
Noah Kaye	Oppenheimer
Michael Feniger	Bank of America
Kevin Chiang	CIBC

Call transcript

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Operator

Good day, and thank you for standing by. Welcome to the WM's First Quarter 2022 Earnings Conference Call. [Operator Instructions] After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] And please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, David Egl, Senior Director, Investor Relations. ahead. go Please

Edward Egl

Chief Good Rankin, us Lorrie. call. and you Financial Operating President thank me Vice Morris, Thank and Officer. Vice President our morning, President first joining Chief and Fish, Jim for morning and conference Officer; quarter for John this Executive Devina you, Officer; are everyone, Executive Executive XXXX With Chief earnings and

John Jim will hear financials. comments an details a from will today. cover prepared them provide the high-level will and You strategic overview, of update. cover operating cover Devina and financials each will the of

Before X-K, note includes a the get press schedules the the at available press we that Form release press have website and is release include and we filed started, the important please information. earnings on of morning Form X-K release The this our that www.wm.com.

forward-looking uncertainties will periods. about are During and risks statements give on call, forward-looking results actual opinions All statements, the or expectations, future differ to current that cause which materially. could to projections subject you based are

volume. these risks or and our internal our today's specifically revenue in in discuss and SEC, John IRG of of with areas to and volume, yield XX-K. from stated discussed yield unless otherwise, are the are the Form release our filings press including results in will which references most uncertainties recent Some more growth or

most enhance and from excluding operations be and SG&A margin quarter been call, Devina certain believes will EBITDA, income, XXXX. first EPS, XX, XXX-XXXX and Time-sensitive that depreciation non-GAAP and hear day and will recorded is by measures John (XXX) to before hear approximately have management During To results of operating time income be items Jim, Any operating otherwise the adjusted the results dial at access which the To comparisons, until be discuss May information www.wm.com measures. which on amortization. call being expense reservation comparability form with stated, unless EBITDA company's Net over about call, business accurate XX. which refer measures, longer replay of additional and to WM non-GAAP the press redistribution, earnings retransmission do comparable no performance found This reconciliations information a These the non-GAAP a free call, expressed XXXXXXX. replay tables, rebroadcast to the on Any can time for of call Time reflect our website today's the adjusted not Eastern consent release X:XX Please at the of hours today available cash GAAP flow, of website be are measures use Eastern the p.m. a April this fundamental the operations. in provided projections. is our to addition replay. X:XX and in code is XXXX, enter beginning is WM or call at p.m. occurring of any the prohibited. during may on the will of of Internet, or telephonic written without and XX www.wm.com.

Fish. Jim the to CEO, WM's turn President I'll Now over and call

James Fish

thank for us. and all you Ed, Thanks, joining

double-digit our and quarter year in success and growth up of We for the first operations. operating and strong managed exceptional The from our XXXX. and rest revenue, The tone EBITDA delivered quarter costs. us for result really of profitable in sets core the every cash set results, results the first price grew volumes year, yield was

to billion the of in we've cash to operations In fact, our return $X.X quarter, generated our a cash allowing shareholders. from us highest was ever

credits. the delayed alternative approval of face tax Our was inflation operating EBITDA even margin the fuel ahead of of record our the XX.X% plan, in of and

WM. first extremely be for another anticipated, we than XXXX positioning achieved quarter executed and great in we results year So well to the better

for signs economic see provided to volumes, construction addition performance Several start base, annuity-like, the activity, nearly and of balance continued waste business, In the special first the WM's revenue the of that pointed diverse activity of economy business as customer full The leading strong with and positive year. February. outlook to the business we year strong combined is volumes our indicators nature the our of to such performance confidence trending positively. XX% within our business that the demolition and quarter, us gives key and is recession-resilient economic the new we in formation reaffirm in

WM and growth. technology through differentiates we progress remain strategic sustainability committed we priorities automation reduces workplace, executing the of our and our year, costs leveraging on best to advancing As and that the for providing platform

the sustainability our with the facility first superior the sustainability another These our We expected the to the energy renewable further plant. processing investments, projects capacity, solid recycling excited excellent the to from that about and gas quarter and to and returns see we're leadership quarter, our recycling in we're MRF second along on WM-built are next those of increasing opportunity acquisitions. bring renewable generate technology waste track network. recycling fully We in new opened Turning to expanding natural generated automating online to are landfill retrofitted a by future.

Regarding over dependency focus us competitive opportunities our and digital next reducing our to roles. WM while differentiating on experience, for to technology, reduce X,XXX on certain labor the certain last our Through optimization, sense use technology years. automation you complete a jobs. expensive high it the reducing market, which heard tight advantage anticipate discuss makes positions involves dependency on we customer X,XXX to cost-saving In for and technology, turnover quarter, by job creating X this

plan of will our tackling John is amount that end-to-end and results as of our the optimization and to using asset. its to in competitive referred first are full to rolling have very Early data routes the centers by that the industry. analytics roll-off optimized our valuable and advantage. in which sustainable create piloting this we're of has pilots a mid-'XX. kind a roll-off to as our we're Currently, significant we produces routes, view trucks addition be data a data encouraging efficiency attrition, our fully In technology

will advantage, in to first I bar turn I'll call upskilling to it them To thank and we the deliver in commitment shareholders. high very roles. Finally, much sum the to our with to in and WM XXXX. And discuss of John to strong our confident quarter. on they I our hard our and up, to performance we ready for employees want and our for ability continue data future team to employees invest while entire remainder existing dedication. operational set we've work for existing results our that -- quarter higher-skilled communities we're use our and training automation results, the of to throughout to our over we work deliver customers, their know our our now appreciate the that. to the

John Morris

note organic Thanks, X%. a business revenue collection the growth first Jim, and topping quarter began good in and morning, high with on everyone. XXXX disposal

expectation while environment. growth we that first collection using while X.X% X.X%. Landfill in strong, the disposal the Our quarter volume delivered work in double pricing of first year, price volumes inflationary to almost with our volumes pricing into lifetime respond volumes our customer-focused expect X.X% revenue We pipelines and for strongest for contributing by for customer pricing and remain on the data Strategic driven churn team Strong all Business million volume appropriately more from than was waste volumes operating X% quarter business. quarter, Shifting is annualized that our differentiated landfill our delivered in prioritize strong was data-driven more lows service across Solutions high result through yield core the the to In to and needs Core record and that the continue volume price, meet to commercial growth, In a teams business grew and of maintaining first Also the growing our And some our rising special quarter project more exceeded both quarter, our won quarter. collection with first as would volumes, increases and use XX% price MSW the of analytics X.X%, our be MSW. moderation translated of XXXX, and customer-facing historic same pace performance results of a remain capabilities. our were first wins national keep These maximizing to and and that strong. confident strategies than ability disposal for secure we costs the account revenue. of our increasing expectations. sustainability waste lines standout customer quarter approach. X.X% results significant levels, by special new than and in focus our $XX to of we quarter with be value. near

XX.X% were remain focused adjusted costs. the controlling of quarter. in operating expenses on first Our revenue operating Overall, teams

quarter digits, in our the While in quarter to XXXX, XX points persisted first the encouraging labor. category, in single operating improved trends largest costs the cost fourth largely of basis due our cost inflation high from

that of transition and the from hours been think inflationary pressures, tax we maintenance steps hours. comes in our successful second a truck yet in balance took recycling revenue basis, our of overtime do basis ongoing new on year been expenses year, as quarter from in the retention for constraints. pressure members result prices we commodity from and in of the onboarding the a anticipate higher disposal we've expect supply related of chain increase the intentional increase the brokerage First began our inflationary compared some hours delivery business the received XXXX. We down pressures costs operating came training the schedule as costs acute areas: fourth for collection team productive in to half delays XXXX. ease improved XX wages and year-over-year credits related alternative to to of points proactive and we cost lap have the second resulting points the on of to from in When fuel X percentage impact inflation training XXXX in and XXXX, we basis not XX points half last as team primarily that XXXX about On of to quarter to XXXX renewed in as XX including business; frontline members; to a

are most and to plan improve to higher through labor single-driver focused are fleet this residential Turning our pronounced pricing we our part in transitioning on continue of contracts business, of and reducing by to long-term of impacts costs on costs The appropriately vehicles. of line the residential we automation. pricing this more and to business, our execute our collection business our automated

success first EBITDA by growing Our moving $XX delivered growth pricing In results our yield another business, reflect the with of was million. recycling residential revenue operating X%. we in line our quarter quarter as strong

our with average year about $XXX full line commodity Our ton, blended first price is was quarter which the in expectations. per in

demand educating We continue contributed focused customers strong help value we and of employing the unlock to to the material processing. finally, energy additional cost on EBITDA remain while materials, to quarter. renewable recyclables in see $XX and for recovery operating the reducing of of business maximize our technology additional million of recycled an And our supply

natural do We discuss RNG our expand have our call closing, start success. the the the into end we now results fifth entire a serving come to and leadership XXth gas building business. thank the our in as year, plant day they to on and network to day new weeks safely job in track by had of to XXXX service few The next landfill want team next I deliver the a on targets We've coming I'll the in turn energy our us developed and Oklahoma, reliably the forward to look great the over XXXX positioning renewable online gas project the financial to plant customers for detail. in our our In is further in and to Devina in R&D out. on WM. fantastic by

Devina Rankin

John, everyone. good morning, and Thanks,

disciplined Our EBITDA that and growth, first growth robust performance increase line operating programs strong in solid fueled quarter. translated XX% pricing and the in volume into top recycling nearly a

positioned related payments decline in for flowed lower pleased compensation payments year deliver through in than completely capital offset these on from cash to comfortably our benefits a full and results XXXX growth EBITDA well strong incentive strong with higher primarily XXXX working operating modest more as operations, a to performance. are to outlook. Our We're interest

capital expenditures. to Turning

our $XXX we our energy spending businesses. business million capital invested million, quarter First in an renewable and $XX support totaled additional recycling and to

spent track we our capital fourth of Given projects growth the a quarter, XXXX, sustainability the acceleration these of in in on first investments in less to we as advance little quarter XXXX remain but planned. these on

we as and recycling renewable our ramp through the move year. will in projects We natural investments expect gas the that up of balance

the across to capital approximately categories, $X.XX full we're be supply spending be expenditures delivery in to our growth and While to year we asset sustainability $X.XX to and see some to XXXX. managing continue support in of guidance constraints slow portfolio chain billion our $XXX expect million schedules within investments business billion,

generated our to acquisition produce free to a dollar executing projects As quarter measure it business be component these you Putting view first strong flow we that free are reported growth quarter, projects cash our of as provide. we existing reduce traditional high-return business. flow. our investments Keep teams of Yet heard they similar all confident on and an R&D in cash John, from strong to million. the and our as these together, $XXX as growth complement recycling are returns capital these Jim and investments we're the a discussed and mind in of expenditures our last

Before us well and of which between flow our to $X.X first year investments, billion. our cash quarter $XXX puts way full growth sustainability $X.X free on achieving million, was outlook billion

pay well $XXX million million our shareholder the and are used flow free returns. range. allocate share We repurchases, We and allocated to leverage in our cash $XXX our our well growth while cash in to acquisitions to ratio dividends traditional within targeted investments, we growing tuck-in quarter, maintaining positioned sustainability to

and and We the SG&A. back SG&A our leveraging on discretionary spending functions. sales remain investments reduce to to Turning office cost controlling focused technology of

than of lower for SG&A the in First expect to continue technology a of SG&A less point year, basis improvement percentage invest revenue, a of XXXX. achieve was over and cost We we to even XX% revenue full as fully our excited the over let's quarter we of We're as proud together XX.X% Lorrie, team WM achieve differentiate to that, to XX open our serve. for results year. of questions. In remainder a line what XX,XXX closing, are and our about to quarter dedication strong of members. in the testament performance the the the can With first our

Operator

comes question line of first Kaplan Toni our And of Instructions] [Operator Stanley. Morgan from the

Toni Kaplan

color But Just know the chain year some additional really the QX, hoping is saw macro, said or raise any just drivers given on for it full you strength wanting there? to in of you guidance. we good the why in supply puts it reaching issues just the a I place guidance? not in you uncertainty could just add the understand the

James Fish

us. actually little was unique year last the Toni, think, I a for

first we've raised I think ever it was the first year the guidance in quarter.

And want set to we didn't trend necessarily. so a

the outlook, quarter But our up wanted we like fantastic, was us felt we X for or well quarter belts. think I we get sets the before year. would under that another change to

Toni Kaplan

of because I ask That's market, the on any side, wanted if great. on tight that there's market? what churn. those projects of to update And in you're labor I labor wanted just an the ask seeing impact labor sort you're also just of -- projects maybe to of in terms the the about sort delaying like on implementing

John Morris

over quarters. last I've some the No, overtime, couple increases seen moderated honestly which Toni. We've in of

They're but than news. where them successful quarters X down basis to in XXX they're they want good been numbers. we that's our turnover points bringing be, were not better We've about So ago.

on good moderating. front. overtime but seeing overall were, some bit service news ago premium We a quarters we're the that's some a labor to of a So extent, up, the that is as paint little few good business trends was to of the

down, better. retention our coming are Our percentages overtime rates are

our pretty these ability that volume we to we themselves. service good So about present are opportunities of feel where and any

Devina Rankin

recycling. regard process to sustainability discussed on the that advance then, in to And Toni, with labor projects we've our and

with we're the of that leveraging developing started several with is order and team that that's it team to building the a where the satisfied accelerate in things from strong projects where appropriate and been last that's stands. WM investment journey really years, really over and about we these One unique we're this here, that

Toni Kaplan

seems of offset one offsetting it. just pricing Core quarter. you Maybe ability about good great. pricing be the the sort for inflation, sounds core thing in do do when normalizing? to first you Can looked And go of it sort me. should inflation? able see That you When to last that think beyond like really

James Fish

quarter, X.X% tell that would core a I price you, for X% the talked we about considering a price. Look, were pleased perspective, and results from with Yes. the we yield

things little year in just because the know, moderate the as you do As later comps change. get bit we a

QX, you the So cost of think, raw to in because difficult we're we expect cover same at shouldn't numbers But comparisons. I to effective have, using QX see price the the shown that inflation. certainly pretty

the a important of technology. road. we and jobs, take that to I a focus meaning in to X,XXX contributor be really them also we the the attrition to out, mentioned business, significant as will cost that on that's side about that’s talk low-cost we're this it's why use way, lot think go starting X,XXX down we I a

price So on solely to we're improve just margins. relying not

to Some it's combination of I a side of equation, get cost path. from significant it the be come a things margin has think of the improvement on us that going to

Operator

question from And from is Sachs. our Revich Jerry Goldman next

Jerry Revich

to love the core price. on discussion continue I'd Yes,

we're performance. wondering on the about by If you increase? higher expectations went contracts the customers really whether had don't to second I'm is Or mind, price can back that that original driven with year the the a pricing price an that past folks you seeing upside increase are versus acceleration impressive talk rolling? you if within

James Fish

to that to there X take a going million $XX Yes, that thing. single is we're on move really, that any, increase make an away Jerry, there completely we've I'm aren't it -- but we what from price customers, annual almost I do And when that. hope to say increases, but customer tried a get didn't out not price isn't our of really trying

years didn't cracks. may can't changed. I been And But that so have from has through tell would but you that that that the say a confidence practice practice I ago, with something slip X,XXX%

is for an more pricing customers. that annual of So our item

Jerry Revich

That's super.

sounds plants terms the price. expect How contribution? as it time lines the to full efficiency? gas come the online, points in full that earnings outlined, period pricing landfill leading cadence, higher ramp-up production about full is RNG get rate of Jim? core like to to even probably of and than is there quickly run couple the strong the relative we So you edge a talk Can a And the you can

James Fish

already. mean I of in plants Jerry. have infrastructure place Yes, most those

to technology So we're cases, is we're managing an from that RNG the over to using gas. process. most difference In the the were gas we switching manage

is the kinks be kind comes once So the different, out, we've will, speed our we're of plant you None not case, would that's but no fairly it quickly. if to landfills and with these knocked up that where starting it were infrastructure, if up the situation. are of

Devina Rankin

of And Jerry, did the on put the to financial value these bringing how two build the timing contemplate just point that XXXX a in of And online from thinking because about them plants, our XXXX. guidance we're bringing of fine facilities we're online, step impact, clarity one to we and in in more it pretty inconsequential that XXXX, quarter. change we'll give closer comes particularly a you as fourth really that point. get we have did do But the that expect on a the

Jerry Revich

out I'm with us type online this be precise of And coming timing that Super. laid for in would schedule point? the 'XX tell of to additional if the you folks wondering 'XX at you willing plants

Devina Rankin

point, this to early those it's for give At you too us details.

same processes. certainty But can't just in because that at those point closer in level in And we've will. expect ahead. what with you dates, we year of the to processes, equipments actively and XXXX, those uncertainty are given permitting the for as the certainly we we get predict We of we the the pulling this

Operator

is next of Mazari from our And question Hamzah Jefferies.

Hamzah Mazari

pricing your discipline, cost on you customers pricing, low, XXXX, 'XX ticket sector what percent And Because the in from push sense and X%, very small maybe to very, this of of a in it's do Just maybe pricing? have found was actually XXXX back X.X%. of terms item. sector a

investors. that that would So sense Just X% XX%, be it XX%? helpful or for is any of pushback

John Morris

Yes.

in a sector. historical comments, my is One speak churn, the there's I So is attention those lows. which I of I couple to pay is close can't we you, near can said, tell still What metrics though, to.

we you lastly, of the for measurement seen rollbacks. in the there metric much the also will the that decreases that stronger movement health of So increases even to really and lot are And be those at rollbacks and haven't is we you a as big service at look we a way. posted then look a pricing quarter. year-over-year. when And positive at look continue I tell We

all So lower is agree having the I the service even coupled -- that value seeing we've this through more we're with as despite reason in that, on real terms of is And addressed think and understand customers delivering quality think that's push we revenue even I us that -- pressure. inflationary side. why you're rollbacks there the

Hamzah Mazari

you landfill I end in to versus over, investments? a to volatility your decision I then landfill have I'll the Does side, sustainability made any more? of know of cost of price less Is to And it portfolio to as talked portfolio recycling a a the relates the the the create it. takeout. as guess side, volatility do thoughts or Got fixed But on in just I piece, some I it you just do there levered have post lastly, guess you about market? the you gas And investments? more turn that kind on of sense -- volatility? sort guess, of more less or

Devina Rankin

a question, There waste to volatility, gas solid business. income increase and great top relative the volatility of part That in in becomes middle no is a from It's business long in line manage statement. though, will natural that the comes term of the we'll only business. Volatility really certainly of the the traditional terms the our of larger one focused as internally this on how business. we're over Hamzah, the this

some don't are can extending discussed beyond want sizable that maximize and diminish at exposed long-term that us, about and this balancing how every vantage are life while to of those that we we here. we're think contracts, investments We've long we to market point and the spot somehow sure what term And be we appropriately the cycle And of ensure portfolio addressing We in we the XX long-term making revenue to contracts. return are we want evaluate even we're ourselves currently the consider for. so spot fact returns. it's what about for of because long-term the secure some markets between to the point. years We contracts

Operator

And question from Michael our next is Stifel. of Hoffman

Michael Hoffman

to which So aggressively was which you were delivered up the you up said was to do on make in the going back come terrific, get to pricing, stood and you and what market it 'XX. to and for do

Just to is just your us at once-a-year objective a correct? all, time. a on Is contract year of cycles, once not remind renewal point that

James Fish

Yes, that's right.

Michael Hoffman

Yes.

Okay.

to So out of intending long, you're price once all just than it's there's year is a customer the not more effect a of objective? rolling come

James Fish

aggressively And point that the we year. last last there as in year price price or there price that's being may think about still Well, of once year that's is increases in March because the take of I be the right. some didn't table increase a April on out

will I hit mean come So hard us of kind until inflation QX. those around. didn't really

anniversary didn't So we increased wouldn't this the to servicing see dramatically there customer price -- for you choose have QX, that get QX, that though to customer that we even the some that year. -- may until in that for will have take, cost mirrored have that the pickup

Michael Hoffman

like. much own volume, give the the X% on X.X% agree the The guidance, X% are, I XQ and on comparatively? think appreciate guidance your raising how above seasonality in X.X%, numbers were you they how did expectation now occur Right. X.X%, price, you X.X%, the core And did exceed your and own what But in about expectations? much I normal allows then when that for fully not to the and

Devina Rankin

side, been when the see first had half I performance year would of set half of and So the on price comp. volume stronger the our you, tell year, we the the of that in performance year-over-year because than the second expectations we simply guidance our would price

guidance the we numbers, continue on and look math print we purely the are the where terms on holds. of We that see were price. above we that, to little you, be higher therefore, said, we our say, about at yields. QX to that if the I both And peak, today, that basis That established and being at a expect XXX as means would would we expectations that, I price look maybe core than points, tell on core I in

particularly business than the rest plan. the in performed of according really they waste. On side, volume special The were expectations, to stronger

James Fish

strong Well, on commercial volume, Scott. don't very was too, I think I -- the know

Devina Rankin

It in was. with really But have predicted. continues. our waste just commercial we certainly isn't a basis, one eye volume was something we on that It year-over-year would the remarked volumes earlier, line XX% John on, the what that speaking the as optimistic because have special generally, we're year, strength for the that projected is of increase approaching things we had

James Fish

our April. like. Michael, seeing anything not sometimes we in now that talk And looks change month right a would view little bit about current what we're the

Michael Hoffman

data, difference landfill volume that waste looking just X% is landfill there's The like -- the increase. number. million chunk X.X% enough. of is there versus that Fair versus of special the volume almost And the almost so everybody volume X% at in is huge year-over-year a $XXX which

James Fish

on I'm waste short-term definitely focusing the is really we on -- was kind of strong the was And we've thing just had But great not quarter, quarter last the with really looked C&D strong all But the virtually volume C&D you at and say, look flat." that was own. at in everything fire year that I its mean it, look you strength. if point. There a remainder we're year this had quarter like special of even universal that the sure out, and a of kind if "Well, flood about this might if where and then was C&D, good. you pull

or or everything volume MSW strong. it's commercial looks whether volume C&D, special waste So or

in we're eye indicate shows right chatter there's any looking at Nothing waste me, there a now right that. are coming. would macro We up seeing downturn we're But those the not forward-looking keeping And a that of believe economy on lot it. because now. there's out our streams about signals that big

Michael Hoffman

that XQ? good at in very in what of -- big You what it. second instead on right spike for to then the this but March. help modeling $XX surcharge the And quarter should dollar change we industry in place million Can the they're XQ. did the be guessing happened We get for what's us coming got right based be? surcharges, Okay. to into be had bigger, a It's fuel you fuel

Devina Rankin

million on Well, renewable to that important a clarification pricing. surcharge it's line, that, also $XX note quick energy fuel on the includes the

quarter. being said, of the million So about March fuel $XX the million. That $XX was of was XX% the surcharge about

was you And significant, remainder that will persist mentioned year. the so to and expect we ramp that the the of through continue

per now Our million prediction $XX million right quarter. to is $XXX

Michael Hoffman

Okay. That's to the to All a Can then that alluded we the should terrific. per to kind flesh free quarter out? framing since Devina, And cadence, cash number big a you on us land to of CapEx. get right, close flow such you of little how give since right. it's

Devina Rankin

John did chain of talking a constraints. supply about the great job

line to is delivery seeing in schedules usually I to And we by would of we quarter, you the us we're us that of some start tell so for in point right where cadence would quarter it's lengthen. ramp, particularly capital capital more the while just see landfill difficult truck you, love particularly time predict give for now, for business. on to clarity QX the

so And I to you'll again, quarter that heavy a be do though, for us. -- QX see capital expect pretty

through each our QX. over take So ratable make and QX for it pretty I think guidance you of them can

Michael Hoffman

And second X% we you quarter year, cost shared running and your with at X%. ran were the of internal kind inflation first What quarter? then in the Okay. of half last us

Devina Rankin

X%. to closer was It

Michael Hoffman

And is down? coming it

Devina Rankin

moderation see it beginning labor the discussed, No. expect back quarter we that in half to plateau peak, We the the in some expect and as upon lap of 'XX. we'll to effectively that think this the increases because we is then executed and we we third

Michael Hoffman

market on than rate, Okay. average from that profit is on premium. indications even last And one RIN create really have create here that not that of to energy interest I'm has just gotten then profit we're willing And nontransportation long-term the stability shared a long-term big a higher what The the objective the transportation current on sustained kind something stability the line? more is you that buyer. than to to of away you And line to a are renewable change that contracts. through pay the of talking been your side, buyer have the moving they

John Morris

answer the to a One of executed people a mark, We're Devina small contracts a short look we stabilize of going to are those in they're We've gas by pay yes, the basis. position. was answer little to short to commented. yes, XX-year of on as It's a handful being question your that. But a Michael. percentage a longer was contracts and produce said, is yes. continue fixed Yes, one to buy than now. around willing an the is willing portion a portfolio putting And the premium to MMBtu

Michael Hoffman

it questions? then in 'XX. trends, earlier one the the utilities, it's a non-transportation past you've And institutions, it's the in little and contribution that Last in in changed, 'XX, modest a has 'XX property things right. it's buyer, of pattern in moves maintenance, right, like Devina, question, ramp not shared light really of That the more -- is up in

Devina Rankin

correct, Michael. that's Yes,

Michael Hoffman

for rest Okay. luck of the the year, Great. nice Good start.

Operator

And Walter RBC our of from question next Markets. Spracklin is Capital

Walter Spracklin

on volume some over being diversion and and So kind Historically, going always looked the coming that an here yet at we've your look at and volume, continued a of even changing volume back up some special the waste positive you're pretty good that looking the think forward? going you anything a now? you opportunity. volume commercial structural putting to have -- on pricing offset think and there flat to you than term you right cadence phase are is is bit mentioned numbers. waste Is as being We Has go growth overall really aspects volume, urbanization seeing in and longer-term better if of perhaps demographic few and in by net-net, seem now trajectory be fairly trend. in it still terms the long volume impact you so recovery when at that will growth little a we and through

James Fish

what starting that to quarters from structurally maybe is I previous think ourselves, is the pack. versus really I changing believe, we're separate

sustainability there what it that, for of a us and fact we what and to look a years with is looked customer what is about others that. did now our sustainability, for. Nobody the that to own lot We WM customers one tend you taking a like we're and ago, It's business, it's short that do in what provide quarter outlook only we their bit in term, I of of don't there's that. level strides by tend volume we're And X, kind a out huge talk and is the can't tell believe the in calls I by on And you're doing something can separating also of the the are believe But X, in really seeing -- from service. going us a similar So of by believe they're it's airlines kind that's micro but just we're talking like. about as break would that driven inject to what else and about we're driven an I lot to to of for can of do tried and it to strategy, And share. not the out doing line analytics that -- data initiatives. we the that's part strategically. you, that lot Walter, macroeconomics, of awful digitalizing even making we're asking picture. XX-year remainder we're these we year the we talking industry. the

place it's not I would differentiate putting this believe take is and in is So about this XXX, more taking road. only you will strategy about the is also about we're ourselves just share share further we microeconomics, that down but tell absolutely the as micro not I

Walter Spracklin

would probably you see indeed think is if are the you special true, that's I where seeing strength. areas, it the commercial and waste in which

So a -- that's

James Fish

is, dependency mean, labor hasn't and using it That's the the got even us look, the cost but I the -- jobs investors, Obviously, tell reduction doesn't to gotten you, to deal. by it's this address talking absolutely be can't that's the I'm whether short I customer aspect reduce on still of to bullish I our I'm you're matched, big $XXX. addresses mean, labor about digitalization X,XXX story company. volume which X,XXX lot biased, why me, aspect, help brand from a the comments to labor of I on dependency, mean -- right. that I'm a experience at the the but and strategy but that's really bullish

us think, just can't all that, who separate from And replicate that. others of I so simply helps

Walter Spracklin

Great points.

to now Turning M&A.

or there solid a One of your you? into Is been cards moved a for that. of kind without discussion the conceptually may you in that's competitors obviously opportunities? same the M&A of hazardous that that pure little of bit on has you outside there's do singular some little rumor waste focus out bit your solid for waste Or commenting and something are

James Fish

of conservative do, we're related Yes. I went And to are I at line tell rumors. M&A. the strategy. talked really I to you at small the reasons we're as back to with tuck-ins about seen is our as strategy. goes. strategy, the differentiated. what It our really as which mean, we'll something tell being the that's that's well of will as view, our kind pleased results And to -- are probably look that we we you through goes just same far there that, today when organic the said adjacency. of continue sustainability M&A an look, my I you about strategy, we've those us would We've may draw this, And comes I to be some time, with it an organic where in

sustainability on to absolutely the equipment go on a talking and Some a multiple probably that these us technician X of of pressures getting reasons driver a have being versus pay turnover to these other now folks. having we there, and turnover, not driver are times capital time them inflation haulers, technician seeing heavy is are. are to by wage don't are And of some that where they some significant requested. offering they're acquire pressures service way, out big, that difficult have Those

Walter Spracklin

Very good point.

great I a on So the and congrats quarter. appreciate color

Operator

of Brown Tyler from is question next Raymond James. our And

Tyler Brown

a have missed it. basis Devina, and XX little X% yield, because tax commodities, more about like was with year-over-year I on I'm X% it Just I core hoping you inflation call a to may were color the margins? some that thinking about just margins thinking But takes decline the maybe of in give puts could there. point core us and, credits maybe down? would it, fuel, influenced the things have X%

Devina Rankin

and of certainly margin particularly So expectation, of you through earlier, top which quarter, our it's the really mentioned managing side. that the the interesting terms labor look John costs, it continued at when at the and on started in outperformed line

for think business tax the focused because credit performed. basis you I really that us points. XX and of what's important is that normalize first was we've the And rest on fuel the gets that how

you points the SG&A basis And XX for to look in the basis It's It of all XXX XX the XX drivers performance. and points that this tell Recycling, about but that on The basis really is we credit. you leverage highlight was to just beyond overall a were and first business. can be the the you expectations. you line remove We're our down what's business. overall year-over-year see improved in about that puts basis. the impact on that year-over-year down were when of XX business quarter basis, the tax half. there and important basis was But XX by basis disposal of from the at performance, collection so recycling and led down fuel compares And only brokerage with a business, the a on takes that from bridge basis points expectation elements would I QX's that margin XX points that includes pleased points. perspective when is basis certainly business, points positive brokerage then is the sequentially very energy build down to renewable the we'd

year was, relative really last a as pleased performance, in an the because of reminder, believe, We and I XX.X%. remain the margin all-time prior that half still about we're So it our with high of at year QX cautious expectations. to year outpaced first

more first quarter the expect comp we expect continue decrease, still we but difficult first year-over-year be to and on half the in that therefore, year. a a we margin So throughout momentum margins to began a the the in basis,

Tyler Brown

Okay.

So that leads me second question. to my

So I'm in the but fuel? put And don't the on like XX code? margins in is spot, but it improve full the year can for of extra that don't half. right basis of I dilution, want too ZIP you it's the be thinking I impact despite know first maybe that still the still points going dilutive that's an fuel if think feels the soft, much you to to do

Devina Rankin

I fuel I'm a going credits tax of But costs. tell rising to and hope, fuel separate would the credit, impact difference. tax So is fuel you, timing we

not margin we but continue, contribute be Our the quarter, we the a timing sooner outlook think XX right but we now go later, and could than the only see to would may is points that, we rather expect love fourth to it all resolution way basis that that to overall. estimate of I that impact do at issue impact through in that ramp earlier, rising in like of is From every fuel diesel said saw a And points the about for change XX we the fuel of margin basis diesel that quarter. business first perspective, pressure. in the dollar cost certainly March,

James Fish

so focus. think there of margin, that there's real you is Walter a focus point that as when Mike about And fully which to probably trade that the my to seems we we've aspect margin, examples, away. about experience But a on experience, won't and positions that built into too. into so our plan, many this when of example, that they some then cost about right customer be -- built we plan talked To XXX rehire customer to I positions, morning pricing, rehire our for we our won't as digitalization the just Watson expect give have previous couple a you to with

fully XX% off, a ETA or call So are this automated. some through calls for those payment have saying centers status in for our asking isn't asking those when a laying of we or have bulky that and anybody pickup, been is this positions come just turnover of

that plan. in X we year And into that next amounts of load X,XXX so positions as we've the somewhere years, think there's rear out. agreed ASL, that for we the with those won't that replace and positions to over of Similarly, the as from built come we move this many neighborhood XXX to our those

this And the in a from truck the -- so out, XX% we on know helper experience, you back of get that pickup from get move when but comes a also rear you efficiency you these automate upskilling is we'll The that Bell because load positions somewhere some I be we positions taking net plants, Brent to say ASL. X,XXX as in neighborhood and positions out the there. of

back. coming So and in And of X,XXX positions net somewhere both added positions being that that then includes out the is years. X positions to the of the neighborhood X,XXX over next

really XXXX. start XXXX and in us And in those some then do of hitting accelerate

we're will an of price, impact doing what have margins. on in All addition to that, on

Tyler Brown

that appreciate idiosyncratic. fully. I Right, Very right.

mathematically just if linked X.X% you're get is question would CPI to Or that being piece fade between, should your accelerate? like So pricing, not price, market it bigger -- the keep is that pricing Because it return know QX more pricing as markets regulated momentum 'XX a -- the it, the it now, out? your the So I today? lot down accelerate the in pricing where on the the core restricted open on to going it collection about plays right but yield watermark feels talking it of to it why call is to high enough is on you break open but and disposal in restricted driven so markets? can

Devina Rankin

So to and the restricted we open we way between first easiest have about of is specific with we've rate look But think breakdowns about talked restricted what that market it, I reset at in pricing, do don't the XX% Tyler, half. prices.

to think actions first half, our momentum that just last what's particularly and started that continues half will is impact take to the toward market say as loaded on the on more comes But half that, down of that relative to in certainly in some really year momentum and to the the back our of of drive that The of is half course comes fact collection watermark and reasons the of we flowing, cost being pricing reflective would open reflected it do this the come being resets fuel those that the action not and What the so I of comparisons in took a yields. basis second over we have to That's the we discussed disposal environment the that we on the first pricing on second those continue the to higher. Street market-based up, that And it's our year. to and then contracts comps. expect the price one your focused I year-over-year high not and pricing exist is knowing

Operator

David next Baird. our from is Manthey And question of

David Manthey

on both labor question and OpEx benefits, and First SG&A.

I think I parts like noted wage like, anything that don't we know, the or other from incentive but remainder the XXXX watch for that elevated care last cost should comp understated the of increases proactive you stack any there year, quarter things that are or of that are or that? year, this health

John Morris

SG&A side. continuing tent I'll can start labor, a and side, in high the we to the double-digit inflation I -- labor. the spoke long single, obviously, to in weigh maybe pole would been low benefit on see Devina operating

balance David, you, maintenance, a of on We tell I may commented time think line business might keep be of as disruptions in the labor-intense market line where we up. But of I year, pronounced. got spot early That here that operating of little I the said, the and before may We most we versus my employed for the catch of we side. you mentioned that pivot. in think don't our would the a in we've until would a think a it little we're fleet have. there need chain longer year, some in business, are linger older going it's Jim we where in prepared bit be that of on, some comments, P&L see see it the OpEx take most to to one that share barrier we supply position a through little be some if volume residential the it's bit as advantage CapEx. and able on put to Devina to that of pressure

Devina Rankin

a tell is do therefore, then outlook we and we health on back estimates over getting incentive I further health the They as incentive what moderate levels, remainder a the pre-COVID to think I the level, that would but and in into increase our with finer to of medical pretty to year as is QX expected. are over tend and of And year, and And we'll welfare, well and basis. the result, costs the remainder with the on return nothing compensation line are the you could But have get specifically, on compensation would just modestly the get what from regard welfare seeing unusual year-over-year we where those costs year, of to trends those do normal. activity the accruals.

David Manthey

recycling state-of-the-art material is And negative on automated wondering these to percentage under revenues of as us that what update form you about that materially? case? X X/X could of the percentage does MRFs, that in change us of recycling, historically, And you some agreement? are collect directionally on second you've And Okay. And fee-for-service the I'm has value. you put still that told

John Morris

the plants. are think these labor The MRFs product are certainly David, the less actually in a better model that doing we're efficiently. we're I seeing, that with gets rates right? producing labor increases it better going more And employing up. and automating We're So

months, we gotten months printing actually not of So the upgrading and the XX the better investments were the quality just has because ago talking better, XX about these coming is product plants arbitrage better of better, process use pull get It stands out. product is reason mechanized coming material cleaner facilities you a that to these of you would out there. out a that when to

side, streams. demand fiber I think good side, demand strong what for seeing couple over a we're has consistent last and very is the plastic years, of the been we're other the some increase streams, pricing of tailwind mixed the seeing continued on and paper the on

And So technology and do that's top educate that's feel the our going we're to to being to line the continue created. something I good as and stream, about to that is that mentioned, customers residual to There's I those getting on really glass, of will last We streams. continue use the demand years. I mean right? you about negative a probably us of that residual for the It's tracks tell high that one all some benefit There's content glass unlock there's feel and in teens XX%. We've any terms stand, for a been would to that's value, we few not it arguably glass. the market your in Did market catch there's working the environmental regard. really out the at but help over positive keeping the questions? down technology an of piece not I moment. positive to in

David Manthey

it. does That

Operator

And Capital. our next KeyBanc question is Sean Eastman from of

Sean Eastman

coming Just to margins. back the

those on communicated had sort fuel? like refresh in you the the quarter XX As year the points be you're of about thinking first If that to And XXX the light movements basis we've what expectations, half, previously? super for that willing be going need bps are of a X seen to down summary, to of do we and in we still differently would be to in expansion full helpful. first

Devina Rankin

So this a be to not I in the revise guidance quarter. comes to just across back us position what one fundamentally, after is think Sean, board wanting to

a performance year see second in quarter than overall perspective the margin comps still will third our get are terms the And be of half we we going full we so a underperform therefore, tougher and just trend build the first from where in to expected outlook margin first our holds. comps. as half And half relatively into the that

pretty the earlier that as about Tyler's impact to In I impact, terms think satisfied going about of basis impacts of diesel the XX XX framing a fuels, to the given able we're in fuel, of we're absorb question that. to magnitude negative point we're what of that seeing be it,

see through so for we to year has early we for the full we rest of It's look some upside regard in with particularly flowing positive for so strong to at retention. year. on and when the seen update price see And too us we've because momentum do how just come margin, the outlook specificity that

Sean Eastman

year? answer. Okay. those And being are big alternative built Totally renewed credit and of -- fuel dynamic coming full that the And or How once to back is renewed? not a is tax tax those fair. Great credits swing that how if yet. into the

Devina Rankin

Yes.

So quarter. it million $XX the was $XX a expected million. for north full of The be little impact year is to

million. estimate if fully to expect $XX a the we the this. end We the year, year would we've clarity $XX for guidance remainder don't the about with be some impact that $XX about million we'll to the receive impact we provided. that that million So relative of on clarity, be to But negative it

Sean Eastman

what quick, Can what us Okay. you And guidance the million to tell EBITDA relative in facilities is EBITDA XXXX in by number Excellent. that XXXX. was that number then actual the guidance? for RNG real the and $XXX just XXXX

Devina Rankin

quarter. benefit don't will that The was year-over-year the in the give Ed million thing specifics there provide more and is in year-over-year I $X.XX in estimate you of $X The million would RIN we have additional increase will through color. I only a on is Heather see EBITDA, that. get that the be $XX able 'XX that million to to we and you in to a XXXX, we every that our we that that into as change values, for $X we with change hold continues increase see production. color get

James Fish

that, million I it but million. think Heather $XXX verify can about But $XXX was about it XXXX. I in and Ed was think

Operator

question from Kaye And is our Oppenheimer. Noah of next

Noah Kaye

mentioned million national this annualized up in you quarter. revenues account picked You about $XX

driver sustainability I big think of you that. were a mentioned services also the

in on this here smaller asking to So competitors us business? of maybe some customer actually give investors services for Jim, values, you're aren't providing comments win for you what is Can the that I what earlier. you examples helping that's just to your build want

James Fish

about when that accounts, They talk mentioned every sustainability one of I them. are Well, we specifically initiatives, and national to very all have analytics data important them.

kind primary that a do for And example. provide renewing we their think of of information new reporting you about or asks is what on some the store-by-store we these accounts when one of accounts, signing basis, big that renewed can tools have so national

been important, a So that's that's real differentiator us. and critically for

Noah Kaye

transition for helpful. is on the other you a That's is thinking contract to line substitution you're to automation want type I initiative understand Okay. And just that are timed the way the In this ASLs. sort little resi investments Are then with a of a on really Or bit proceeding about as with fleets initiative? mid-contract contracts? renewals? those existing words, this

John Morris

roll. tell as mid-contract to So we as a We're I going waiting, can. we not to speak, have do we're opportunity to you, for the Noah, so would where fast contracts

we're the able a think not, there benefits extent the RFP to what up will, service municipalities to having front or seen I do a you sure is educational with some and to whether opportunities in trying we're out in productive services. the that period to of we've labor And or really these ability that them strain service is we franchises of for that, of seen automating convert a have we're make that are about if of step these and showing going these and mid-contract. not in are are that's these conversations, municipalities they've to that and productive lot when some of certainly, time because we're to provider discussions municipalities, on

Noah Kaye

some well. these clarify, routes, container have may for to as mean, But mean municipalities, type just I change of these of to the I

in ROI to just is the and in you, over educating So enough good is change work put take and in to changes getting on fleet the the getting some there for convert the savings involved, you that But effort effect have just that labor place. efficiency? can the such and time and and clarify, the right, those you're

John Morris

Absolutely.

on valuable of customers. in side. municipalities curb but ability bring each when that when we the at pick up costs and and rapid this put And we've the I terms a these got think good transactions these go of I automate becomes at on think help up you municipality, to to containerized trail, understanding, a recycling I the educate model won't to the look down of all the kind much the more material the quality the technology trucks go for model, helps service, to everything point, you their the the it managing you

James Fish

the When a pretty about you mean, returns, easy equation. think Noah, math I it's

loader for And safety get is you coming you cost on off for ledger, obviously, vehicle. that back, whatever improvement. On capital a the get capital the that. about a a tune of the But maybe rear a the the And helper vehicle. the of cost cost get $XX,XXX, the positive cost of of whereas side, is an the want side put versus the of then on a XX% negative onetime you higher to the number ASL perpetual, you life

productivity as XX% XX% more efficiency just I get homes or because reloader. a with over -- ASL up XX% we're we're mentioned, a in picking You per an a -- than hour pickup

makes compelling. So the really point. on as we sense move quickly John's math can for is us It as to

Operator

next our Bank And is question from Feniger Michael of America. of

Michael Feniger

guess just XXXX Just view, of you core the let yield high QX in think to being why of on trying -- on restricted maybe do expecting, the what just would a the that XXXX? those they think top-down water it your QX going yet you higher price foot bit together the as move mentioned open XXXX put XXXX? And just be with parameters to a off mark as second kind Is strong, gas, higher why yet as we with watermark. reset high wouldn't X%, I'm parameters X.X% year? be about to pricing, the should your would when those how we little market is next half, really to in the I decelerate of we I that

Devina Rankin

the overly do I think, of it in it that. of contemplate are be this I I looking. simple will book tons the part have And year's reset intend of math. the inflationary didn't reset couple is But on at to becomes backward it difficult. terms rate make impact benefit fully year's I comp We said the the of some think restricted do about next from all very QX already. a they of don't think there because may well, looking because

that in year will step So be a from we think the change business now. of part there another

know of this to slowing down. assuming the terms think In momentum important on it's are we activity I our that’s street,

to would like And differently and data-driven in the create that want would decrease cost pricing customer that So environment some customer to efforts. being our always this allow bit push ensure how inflation us lifetime in presence going we're forward. We'll we a value. on to just little view we I focus

Michael Feniger

Very one, second how Devina, the inflation in half up stepped helpful. And the X%. cost just last X.X% from to you mentioned

cost. number of the guys how with Because full that kind of what's But on X% I price. should we Now curious, just full expectations to the going think for there's obviously, that I'm kind embedded moderate you that's year are inflation? year? driving about cost plus know that

Devina Rankin

of We X% at to generally look our inflation X%. at cost

level. So normal just would course the at be that

necessarily And we're in now. can so that the that X% the than back we the in half down way you isn't our teens. higher that somewhere year see we the get that back meaningfully X% land expectation of to all to

Operator

Kevin question next of from CIBC. And is Chiang our

Kevin Chiang

I as first Congrats here. larger go national and accounts quick Is service are you're suspect something be to become customers to made if a all, Is the requiring a congrats comments, revenue their their track charge broader X of demand offering? looking emissions and data not, environmental their you from Jim, quarter. And the I'll for? and accelerate footprint? it path. good or to customers going on times, Maybe that -- analytics on need that that they the data sustainability on this revenue just ancillary just kind few it an of all service? does on more Scope you

James Fish

analytics. of separate that we've together from interesting a for these of our an charge But It's Kevin. kind question, thought could something. related kind And charge national packaged -- service We we good in currently data prospect for accounts. offering and it's it. don't interesting it's separate it's charge services an a to about, could price we it's Yes, something

So answer we packaged a for is for charge the separately. something could it's for today, tomorrow, deal potentially

Kevin Chiang

Okay. that's That's helpful. a And follow-on question. kind of

above of the levers smaller service a the kind the again grow this market doing accounts them. not one is this what appealing is taking you're might about as suspect mentioned You that be I pulling volumes you're on when of to to share.

that as doesn't market suspect it you I you're solving and grab customers feel price aggressive you're on for So win share other to pain getting volume. like points

driven? might onboard it's say, be are with waste you management some solving of let's what accounts So points the nothing smaller for, if that pain other pricing

James Fish

they operation as lot customers. and the XX digital more everybody, I tends but to well, of bigger heavily When their be to moving end airlines centers we've may think customers. everyone important important from experience, the I smaller taken I with did it the years used mean even that to and that sustainability piece call should the be more to that right. approach to what a about away the with think on customer impacts you're the refer ago. be front we

they a can that So that at that and reach out as made many we're not those, home we've digitalizing everything decision to your year. laptop process now device to they be we've starts kind call center. handled don't in have or look, attrit, to QX we're of as where you experience for entire your QX, customer why via replace those of said, and That's in of a this and personal positions

Operator

CEO, on questions now no and And will there over are Fish. President Jim further the queue. call I turn to

James Fish

excited see think the of I produces, us We're with outlook this pressures bright is we're really short-term X to results I think, The without most that to you. on even that for pleased with goes great strategy Thank saying very of over the results Well, it next some focused even discussed importantly, to right. years. guess XX All we're that But the were very today. economic we quarter. X differentiated and the results those.

So all for morning, joining thank next you this to talk and quarter. we'll us you

Operator

conference participating. call.Thank concludes today's And this for you

disconnect. may You now

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