Waste Management (WM) 25 Apr 242024 Q1 Earnings call transcript

Company Profile

Participants

James Fish	executive
Edward Egl	executive
John Morris	executive
Devina Rankin	executive
Patrick Brown	analyst
Bryan Burgmeier	analyst
Jerry Revich	analyst
Tara Hemmer	executive
Sabahat Khan	analyst
Hilary Lee	analyst
Michael Hoffman	analyst
Stephanie Benjamin Moore	analyst
Jack Wilson	analyst
Noah Kaye	analyst
George Bancroft	analyst

Call transcript

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James Fish

Hello, and thank you for standing by. Welcome to WM First Quarter 2024 Earnings Conference Call. [Operator Instructions]

I would now like to hand the conference over to Ed Egl, Senior Director of Investor Relations.

You may begin.

Edward Egl

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

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

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

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

risks uncertainties Form press of XX-K. Some recent in with in most our today's and release and SEC, our filings these the including are discussed

will volume. the or yield from unless or volume, which revenue more areas otherwise, to IRG, our in are John and stated growth, specifically yield of references results discuss internal

adjusted have our results believes operating or operations enhance management fundamental been results operations margin, EBITDA operating by and unless income During from EBITDA, amortization. to and operations. performance expense period. excluding prior and John of business EPS, and income, be year will Net stated, and reflect items income with from the operating will call, comparability margin, not do comparisons, Devina before otherwise which Jim, discuss depreciation is that certain Any the prior period

to and and that may is website to additional EBITDA at most comparable and can on www.wm.com tables, anticipated measures, measures. measures such to earnings be in free refer be and GAAP the use These adjusted determinable non-GAAP be non-GAAP but our cash release which Additionally, flow, of found addition reconciliations for non-GAAP currently Please exclude to measures not are the information to projected future are adjusted significant. margin press operating about items the company's projections.

will replay This hours call, today. a the information beginning be WM access available recorded Time-sensitive Time approximately call call, at To the is p.m. during X:XX day of hear XX, Eastern provided time www.investors.wm.com. without which WM Any form of being a the on redistribution, and today's is is XX this be or of occurring at April consent written rebroadcast no may express a of XXXX, replay. prohibited. accurate in retransmission, call longer any website the

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

James Fish

XXX Ed, to delivered and the collection joining XXXX, All right. and expanded business. The pricing strong team us. and basis Thanks, operating thank first start XX% driven financial nearly on of EBITDA substantial quarter disciplined results Total company operational outstanding optimization quarter, cost performance for by in margin momentum you powered the all on in efforts programs. our and points, by disposal grew another execution WM

QX. quarter, to that of definitely the would of those we the strength XXXX in said XXXX, in and similar case look Last was areas very

we're benefits on exceeded strategy XX.X%, pricing the of of our the led and margin cost initiatives. sustainability the on margin our margin the and This our optimization coming EBITDA our with reflects result costs, year. operating delivering sustained of of third tangible expectations progress effectiveness above traction lowest quarter technology XX.X% Continued operating our on at to substantial quarter historically the in in QX consecutive

from our points positioned midpoint. that of is year to EBITDA our track at margin more us XX.X% highest-ever deliver gives the basis than record we're in XXXX It's between confidence which these and expansion full operating areas XX.X%, XXX

cash outlook for flow more free by flow raise and free cash and revenue allows our earnings operating of us Our to million. each ability $XXX to prior to EBITDA convert dollar both

where cost we we're our structure our and traction technology cost progress to each line reduce our As X of seeing making the where I disciplined runway, Devina on and within customers, and few other our across strategy on priorities, spend further details focus businesses. and growth. in sustainability on John cover investments pricing a permanently we business, to leveraging through more serve progress pricing on X the strategic our will minutes to we're so our have we're want in XXXX, maintaining expanding priorities: executing the sustainability

we're customer value results the we've pleased embracing from model. with lifetime seen Beginning pricing, a with

and value extend is Our both. teams actionable customer are customer a strength found able the confident winning optimizes price and reflect the the will their our We're strategies we commitment improve understand journey design services a where or sustainability. that retention, on the of to to leverage that deliver, approach environmental to that we to of leading to customer-specific analysis asset the profitability decision-making network data-driven

price leverage and Our cover reducing churn. again quarter costs that first also have while margin increases the we results grow ability customer to to show

sustainability Shifting businesses. to our

the upgrade Wisconsin. reduces large renewable product state-of-the-art Germantown, During completing equipment quality. improves labor increases up costs, The we throughput projects to across per material hour, and recycling in This a delivered facility of the updated quarter, and includes that XX businesses. tons recycling by growth on XX%, energy relies

industry-leading this X expanding further. our upgraded and We new completion we'll even facilities year, opening scheduled network for recycling single-stream X facilities have and be another

DFW an sustainability the new with commission in natural facilities just remain in opportunity Canada. team renewable services renewable have professional league Additionally, announce a we in team and natural between new first Worth Baseball. collaboration We're United of gas Dallas-Fort we've another sports kind the MLB work XXXX. XX league. -- to League facility States company is all environmental MLB partnership, its this on services sports track a to clubs WM we market, to also and the of this official offer gas partner and WM's was quarter With Major the completed landfill named the X to excited at that our

to to clubs. improve expect comprehensive its Major League We expertise environmental of impact and build Baseball leverage the our plans to

In dedication strong have their and immensely closing, discuss thank John the all financial to to achieve to which now results. our team such work I for quarter. during turn I'll And proud results. their operational execution, our over of WM want hard call the I'm helped

John Morris

grew in the disciplined our in quarter, process to Thanks, morning. as percentage XXX the operating solutions Jim, expenses optimization, Through operating positive year-over-year of good of collection continuing disciplined we first performance strategic In million, points for quarter, our delivered operating XX.X%, a and particularly of greatly operational expanded middle costs, extracted and and standard revenue costs, trend improved performance of basis the in efficiency, business. improvements new investments P&L. strong with innovative to Combining in described, we management $XXX overall pricing margins. Jim In EBITDA basis operating a XXX the setting margin the disposal the XX.X%. this EBITDA enhanced managing collection and points operating and expense our business first

our maintenance profitability. growth, continue automation and of power expenses. quarter automation further we journey reductions and substantial the In of we reduce harnessing labor in to costs As of to XXXX, remain the to drive improve and costs initiatives and committed both technology our optimization, adoption repair and led first sustainable of technology continued

our as of from quarter On all traction. the labor implementation X XXXX business continues the first our efficiency lines gain improved collection of in front, of to meaningfully

This NDO, of performance day the business. reducing which collection majority and XX% at to our allows efficiency, achieving sites, optimization, exceeding an routing from efficiency have our our to and serve our Currently, is program, As our in example, we next improvements asset nice or and line planning. cost or route efficiency in already dynamically we're us of those of tool our it industrial improving seeing improves NDO targets. deployed are more

Additionally, great XX%. and we residential load we removed Through XX% gain trucks almost automated XXX results has XXXX. a to the residential in XXX have upwards routes. routes are over EBITDA margins approaching efficiency of and since achieving This QX, of led our automation rear

The coupled driver XX%, technology resulted with revenue. a of quarter the labor of investments, XXXX, costs benefits In retention, improved the from in as down basis of a improvement percentage turnover XX% driver have ago. integration about improved to XXX these in over first point year a of

ongoing the we in processes we're moderation expect continued investments as and making the through people as well from We inflation benefits year. progress as our

first Turning maintenance first and XX as for basis points. years, In the and time and revenue quarter, to the in spending spending repair decreased year-over-year several maintenance. a improved repair percentage of

who to asset enabled our strong to technician reduce reduce to are process tools addition discipline, to us portable our hands. downtime, technicians These facilitate have in also improve workflow, In ability technology have of track now utilization. leveraging efficiency, technology all drive work, technologies and and our our assign we costs. of much These beginning with their digitize these

future. we optimize and Our repair maintenance to and costs the further see results runway in encouraging, are

pricing we execution operating our great to through growth primarily to addition In top cost programs. performance, deliver continued disciplined line on

metrics customer are ever continues X.X%. lifetime sales seen growing strong to drive indication model in that we've disposal our profitably Our the rate value and business. the success the and at revenue Churn in our quarter a of near was collection lowest organic clear growth,

year-over-year. lost Rollbacks improved remain almost in New business promoter positive, improved business. Net low digits. double score continues net XX% and remained service XX% to by our outpace and the increases

in MSW this at macro cleanup quarter, roll-off original also our our softness growth, tons collection and homebuilding the quarter. economy. the for a exception has the and With lapping was the the C&D reflects Volume special to to industrial said, volumes uptick were demand, experienced in that expectations, of start our relatively some the revenue in a consistent category Hurricane with temporary we related volume strong The also Looking slowness year last Ian Jim waste X with bellwethers as the pricing. year. with nice in positive in seen been of segments said, we've commercial and of in impacted business. volumes

now expectation for volumes driven from X% the our the the revision The things: year, For expectations. softer roll-off our in growth temporary we to and the diesel revenue a relative energy prior outlook X and surcharge lower cost of decline by expect mentioned; total full X.XX%. given between average revenue, is

expectations. of and remains on pricing business, our lines of Our track, in some ahead original

in outstanding I Our their them first delivered our quarter, all thank success. performance to can't and enough for contributions teams the

call discuss detail. now quarter results further the turn to over I'll to in our financial Devina first

Devina Rankin

WM's John, best start margin the Growing EBITDA XXX adjusted of operating strong quarter as to and first year. out stands the the indicator points good our in morning. by Thanks, basis

costs the from from business, the basis discussed, John repair margin and with maintenance the this and our margin performance company operating total point of efficiency the core. improved lion's XXX labor As in our came optimization expansion of a in improvement driving collection share

XX the continued coming revenue of the about points, Our of by each in office price as margin business. points offset primarily points, expansion the quarter contributed the results managing in also in basis from other fuel quarter, and pricing X.X%. by a about in margin recycling at with commodity margin spending of recycled basis impacts percentage focus as basis back XX XX benefited impacts decreased brokerage on impact our largely SG&A Commodity higher

The points from relates basis remainder headwind drive XXXX margin by of of to the incurred the and combined corporate incentive bridge from adoption QX to our compensation of team optimization costs QX a of of our XX to XXXX about of impacts programs.

growing with from earnings, basis as margin from Our first to over from operations. value revenue payments, lower cash cash flow operations to cash in to We're combined quarter yield. a flow our XX.X%, capital points with benefits demonstrating up cash of the strong starting led expansion company's and the XXX compensation year incentive strong of robust margin the growth working percentage and

both $XXX spending planned. our Capital in as totaled investments business sustainability to support with the and the base tracking capital growth quarter, expenditures million in

our commitment our long-term about we and of maintained at target our We levels to flow allowed and our $XXX million free Our of are still $XXX we million X.Xx. $XXX returns of well across than $XXX and cash repurchasing than dividends capital shareholders, million priorities. With million and flow to sheet stock. this, returned of of cash continue our In all shareholder to strong to all us allocation ratio balance robust our more first quarter outlook, in growth. earnings more positioned invest leverage paying

quarter effective Our credits was in XX.X%, includes which to related the million rate development first from projects. investment of the $XX benefit gas renewable tax tax a natural

earnings And the XXXX quarter for now expectation full fourth the our we that during ITC. year. million in see noted we a $XXX benefit original was would our we expect from million call, $XXX As

to flow We this and tax free expense both cash XXXX. benefit expect our in

start the in can results exceed operating we quarter, great put quarter. reflected first in for XX.X% trajectory full gave on our margin XXXX As strong us Jim EBITDA higher increased initially mentioned, anticipated our year margin. confident than has growth the operating EBITDA year full very the and to our and We're year achieved for when the we guidance a is that that we last outlook

As and margin we pricing think year, in from in the and and about continues the third quarter late earnings of we growth third efficiencies quarters our operating that momentum the in anticipate balance outsized programs that the second of XXXX. began

to as natural begin that back growth renewable more businesses our weighted be year to We expect continue more projects sustainability the the gas half operations. of and will recycling in

price remaining want Pulling these the points improved for cost strong million million our in The for of million $XX to to $XXX team's commodity is to expectations together, to increase that and attributable execution in the higher serve efficiency driving related we year. emphasize on operating the EBITDA the the our recycled business. $XX year is collection guidance

pleased own very quarter to first expectations. up, we're exceeded To high deliver results our that wrap

strong in talent, have investments and over sustained years. are past to results testament assets several made a we technology, the Our the

As their shareholders. to on thank team and always, our and I delivering the communities, entire want customers, focus WM our our to to for our dedication commitments

that, the questions. line let's open With Towanda, for

Operator

[Operator Tyler with of Brown line question comes from the James. Instructions] Our first Raymond

Patrick Brown

here. to to So the got stellar back margin performance we've come

if said million $XXX on So EBITDA, million at I only in disposal just was revenue. $XXX you look up think collection and John, I maybe increase it

any the to outright onetime there just flow-through. want maybe sort items, in that color. I understand else you're clear, reversal such wasn't, a getting So just is incredible of correct? like it just anything And sounds certain impacted quarter, really Devina, or that I be we're accrual more how but little to mean, deflation seeing

Devina Rankin

would perspective of the with margin accrual first climb you the out have from there a one-timer year Ian actually hill I'll storm margins. the start were at because, reversals confirm quarter. volumes prior that as volumes loss come only kind So easy we and from know, in to the one been could no the of onetime a or The is high that items point

in So basis came collection with in the growth disposal in XX.X% and disposal points fact, to business. EBITDA business $XXX the expansion operating million and collection of margin the XXX

John Morris

more a Yes, little color, Tyler.

things prepared uptick the mentioned residential. remarks, in single high few to nice is as my digits is, seeing a One are think good the story. lines I business efficiency mid-single from in we're for a all Residential occurring. in up of I X a digits really

of and If bit you there. look we at traded still balance to I volume made you a And the strike starting think table quarter. in the see down, but more better we the X.X% about we're a back good money for the

I mentioned the the EBITDA approaching residential at remarks, in line. prepared are XX% margins

repairs. about impact. the trucks. and think delivery touching. having about piece labor on took chasing is get X,XXX year, this like to M&R certainly felt Last meaningful and and year, a maintenance I of costs X,XXX We worthwhile we we've that's M&R been related We'll

done years. in we as for And actually year to for costs number us a something, haven't down mentioned, is the tamp I quarter-over-quarter of

robust, it's across and efficiency, discipline, disposal good collection think good remains the I our pricing cost lines. especially been So

lot that. mentioned, a was one-timer in there of QX. And together by that was execution just no really Devina That think the that team strong I the in So benefited field. came as

Patrick Brown

absolutely. Yes,

John, mentioned margin. resi you Now XX%

approach So can us those do you you that more expect where lower? them? they're bit more a or is those a And can of remind would average ago were because think just I kind years few fair this then believe margins you where company

John Morris

Yes.

really a there that that we've not line. started and wanted You're of XX% industrial. would And X.X% journey, we're as think yet, to compete that And the if I've will see little when memory you can business, to what a average that around closer bit happens, recall. point residential that with to we converging. down will, closer to is residential where this gets been get here, while to quite said I off moderate we on trading some as Tyler. of testing commercial kind start my I say we volume X% to rationalize I But And we XX%,

Patrick Brown

we And have make level QX. here, one of just then Devina, set that Okay. a my sure kind to want last on

XXX, if points look basis don't margins back So QX know, rise, from do typically XXX sequentially QX. I historically, to I

that to help shape the QX be us why wouldn't you case expectation? anything or just think Just the about can margin

Devina Rankin

QX I QX. in we're say, coming think potentially from handily great softer even that you north marked to of it's Yes, QX, normal I XX% pretty looking And still QX in in a would We're of in but question. is tell above a would particular. trends QX. and XX% in, currently a I in a XX% little improvement What from the QX QX at north climb sequential expecting and little

James Fish

but Tyler, part here seeing we're I'm thing, of for of numbers in to just any sure about of have a a territory have margin, I talked terms we're we've is softening. guidance that, in not a we that mean, finally with good I X kind It's range uncharted a number a which time, starts in and that includes now long think that that our it's starting a -- with range. X

being we're you as about the did from uncharted So that little being like maybe a the on, a we're to territory. just into saw some QX just bit field. trend We little cautious we but feel cautious we certainly But as mentioned QX and it. get

Operator

Citi. Our next question of line Bryan comes the from Burgmeier with

Bryan Burgmeier

maybe about fuel you've underlying more so of number. last little X role Did bit a the I you a these in the picture, And said $XX you original improvement. to changed view? million than from guidance headwind X maybe in revised raise? anticipated even sort guidance have quicker maybe the just your EBIT guess from it's big a realize may be that months roll-off play to million over allowed would I volume, costs what is underlying believe EBITDA in $XXX there than savings a

Devina Rankin

$XX would that X I predominantly John's is driver the repair is cost oriented you things. talked to much and on serve question. and reducing execution strong great tell And it Yes, terms our of the and labor to efficiency really the maintenance. performance about really biggest cost in million, one, so on

other our moderately came that really that on margin when for fuel, What year, the we our the for rest the respect and impact business. into we think and business. it ahead price, strong hold will XXXX. With of didn't the is did that's for it is impact we had outlook the The to execution of dollar the outlook expectations

lower basis the expect we a full the seasonally potential some some adjusted that basis, wanted on expansion. And second in help so margin really in that QX. year was points of some we in us, saw reflect we quarters could quarter, we of in upticks basis hit gave strong margin the XXX we think until really points executed tell the we quarter that the that confidence quarter. will performance margin XX margin tend in fourth in With how in you, respect a normal now the to of quarter, of not strong preserve third continues our first wait to seasonal raising with would but really But beginning the and QX outlook, because and performance QX. And and the that the into in of margin in saw upside QX, a quarter, really QX that help the QX in to we margin volume us lower I to and XXXX for be business again

James Fish

you're such on already there I that on you're the strong think was, by there a we answered something something? of have risk is raise might call margin Bryan, such not you? as Is didn't we I way, that. margin there are And you We're guidance, so didn't you there, about we're But the questions we anything. And margin was missing much. seeing if after start no. The about, seeing? heels it, this something answer of what that it, that were the we was the that not questions other asking quarters, benefited if Devina we risk been X missing discussed a performance performance, with little that improving a concerned, might had that huge that, mean, was just Devina, the course, raise

Bryan Burgmeier

a detail Got it it. waiting the press you on And comment the release, XQ, me. just know Last Good if kind the turn curious million in bit line we're I of question million $XXX still in kind of investments the in And of investment a for little million more it year. $XXX for expectations. $XX benefit seems tracking for luck credits. tax I'll that I'm are through in I for like put over your quarter. was with course we the a original XXXX? like over. your guess

Devina Rankin

Great, thank you.

expectations million ITC benefit over $XXX our original so is we million our million, regard tracking specifically. toward for XXXX $XXX the full of have we million $XX XXXX of are a range current capture ITC So million. With outlook the increase the $XXX in original that were of the our for to to outlined, high $XXX plan end of outlook development

Operator

of next line Revich Sachs. comes Goldman the from with Our question Jerry

Jerry Revich

margin not into does Really price/cost the performance be And how think quarter. you're this that spread lower of over thinking year thinking like the have we clockwork. because that X XX, unveiled, should expansion consistently I'm year or as X such almost longer-term you per a plan XXXX year? time, months we're margins good folks ago? points long-term here, you about getting plan XX And we what, expanded wondering, from factor basis about Or about as folks nice this by

Devina Rankin

the repair maintenance growth, I that respect and side. tell But and XX being that fundamentals It's be set to would that to really what make some it's for fundamentals a those with little come labor you cautious that repeating are to fundamentals looking year-on-year. a us with seeing while And we're a too some guidance do basis more there XX point margin question. little a there and said, specifically runway I know you would effectively additional and us to great are on for agree to 'XX, we expansion have early

we're So revenue. long repair been below QX, has and X% maintenance, term, X.X%. In at of

basis across XX savings points is EBITDA. of million So of $XXX the year

we ourselves there, see that traction yet, to give could clarity think above don't the that we have based know on our things some I credits but operating a on long term. that's the be basis get headwind, -- of what the one XXXX. benefit us about that's a thing points million we we if do will tax The that expire really And that, annual will of XX to fuel alternative So basis. today been $XX end at that could one incremental is expenses on XX an

could that years But headwind. really a down we that traction and there's than headwind labor strong in and do be that margin more maintenance will tamp that So think offset the would repair our for ahead.

James Fish

it's down shutdowns. $XX neighborhood and maybe we it this to some year a impact, year, pretty we're going tailwind on from in tailwinds. recycled next going year. Tara's when there's a -- the next That impact a a see a mean, think always that plants to shutting of of significantly an drops negative be us somewhere can of talk bit headwinds comes have them. while million, I rebuild about recycled here. to as I these Jerry, off less little She fact combination the we

a of somewhere next year. in you $XX tailwind or pickup neighborhood probably million the have So

of none down just replace kind people. when other folks, I headcount X doing and complete. arbitrary And a through people way, talked so we through not going RIF-ed. just think And were people not those and in I of several attrition. none have those are over 'XX, force. it's it Devina that this reduction John to still reduction heads The but happens. But X,XXX at That's or is we've in not that low-impact X from it's about about categories and about actual our where look those We're a in as we're an of that, thing categories -- of all -- given choosing not different lot

is shift needed load truck. load. you which the from person about, rear the time them talked back is that, on the to there One John longer side of that has automated of is do a Each no

that there of Similarly, we're we through so As somewhere rebuild we business, pretty that these in have there just out Tara's with are a some advantage related high between you and heads the come shop can that. plants, reduction take labor XX% as turnover imagine, costs, attrition. recycling and XX% so we seeing in and

even will in 'XX, come we takes if John, to us that you probably, X,XXX have combine And categories. heads from another X,XXX. So still, X,XXX total out X that those X,XXX,

part that's really to it big, doing of So labor more in is this is that efficient and a this fruition. way, a coming we're big

Jerry Revich

And expand recycling Super. to Jim, maybe just that conversation. on the part of

So we the also year returns are folks the that but CapEx downtime have this you plant delivering. the on

benefit. for Is are 'XX top on that spoke we improvement plan to? of for So the still versus million of year-over-year anticipating a me level that million I what $XX swing so you Correct 'XX 'XX original get $XX called that plan something wrong, versus like 'XX? if I'm you the think the

Tara Hemmer

that. to speak can I

expect next track mentioned, today. remain we have XX another and as year we and on online we So to that XX this year, those plants bring

If XXXX a to headcount, XX% of you XXXX in related we'll the headcount where out point think on our the by be at journey. exit gotten about the end we've automation of

we So operating in and also costs improvement just pickup those from labor from of costs should the benefit expenses but shutdown a not see XX% from plants.

grand celebration. last able to Germantown we example in. bring the capacity bringing We week were great more just is communities. to these differentiate up of that a for great of markets we're opening way a life to operate key And in these how at some in in It's WM

James Fish

Baseball, the with Tara, a League deal we use to baseball analogy Major seventh signed So be inning? since a just in we'll

Tara Hemmer

Exactly, seventh inning stretch.

James Fish

perfect. right, All

Operator

comes line RBC question the Capital Khan next from Markets. Sabahat of with Our

Sabahat Khan

what savings some there bps terms might Is quantify labor you're of much over or efficiencies A investments some tangible the kind the technology expectations? and there the you in to on lot X, to data terms just of kind of seeing relative analytics you're that color X in of any how expect way tools of of the years savings. making, operational of

John Morris

I Well, revenue. at, the of direct look some prepared labor saw the certainly kind can remarks, We there. a had is Devina of one in ratio to think that I line of what her we think nice improvement is

I be X playing continued pricing. We've about very about think value. lifetime that's disciplined long a one, customer game comment we've the things: of combination we're here, and said I to

the was it line landfill post-collection of lines. And all we've the best perspective. noting the and revenue quality So pricing a transfer our is this didn't continued drive the to top I station at think in come worth history quarter collection from line part benefit standpoint is but a across out, frankly,

mentioned line I top the to strong. of technology single-digit what's drive of part the that mid efficiency high is So efficiency. efficiency. driving And to is But use

Our trucks if on are takes And again commenting the we turnover because number's training all folks, about at XX%. people lot friction cost and all-time things. cost, lows pressure of that about you off of a at in worth putting second think the those

is and So doing year-over-year. is that's we by volume. look the another are it you rest less But Part automation the part down work driven of basically can residential. our capital-intensive more year-over-year. of for of the it. industrial XXX lines being And commercial about routes And in at of it we're

James Fish

for optimization roll-off and we on out -- us, rolled this ], of is was fair model yet, truly also, was line and mentioned be that. you could room script have as routing not we there. X to haven't which out the rolled has ago, efficient that And on business [ term commercial still admission in been it mentioned that if it his the But of we our that residential model. really benefit is of an go -- India XX% that John rolled out haven't X, years John, of to used so used technology a as amount by our this all

I think probably case industry. entire that's across the the

fruits now And ago, to seeing we so years change the that decided X that. had X or of that, you're and

Sabahat Khan

the an do data got of you on the value, optimizing at I'm work is of All date, for think how some But you your customer about that test the right right, and believe, telling to to right right price data sure is right sort there's you've you well and element terms What's as working? out the the then figure done I you the and that great. model on based I factors? based in learn. you've you're And using think place? of pricing their do analytics model of the guess, think

James Fish

I price think we've perfected I that when early XXXXs, we improvement in -- was look, there's it's a But always so and the not guy this. back I night that day. tell from room -- you for we're would

number benefit their the using to think done needed we as sure in looking has price customer the the based we and really spectacular to analytics team to metrics. and drives I a driving just who are making purely that a at on decision decision our that job data the opposed hit

we've to would a you we so made there. I used We're progress that tell perfect? ton So of Are but not, be. much than we better

John Morris

PIs, at when to gross would our net metrics, the those Jim, When our and measurements right service I sort on, and you I of at sign net decrease churn, the the customer is. all look customer how are of our promoter you equal think increases effective score, our look program I say, commented and barometer. really that's

Sabahat Khan

And there. one, guidance then update on one guess, revenue I just the quick

that industry? the the in Or evolution the of get seen more the I wanted bit how and to softer in Just homebuilding that issue portion. the year roll-off get Is more to change on bit on just is of a was for little It think came industrial sounds of just slowdown. macro. on color color the specific the macro evolve view what the the a roll-off rest year-to-date? going on of you've based view any like up there the to want and

John Morris

Yes.

we're guiding takeaway is about I were we think to X% now and X.X%. down volume here about probably the to

uptick preparing here So the it's little QX, It April. year, in when too. a looks move meaningful we a we're but tad early It's at an not obviously of you seen like that getting bit in QX. that would today, better. we've I a for of it's tell it's a move. were looking And

a well. sector, of rest we to, what balance gives our volume is particularly still the us little at well, housing look about the MSW conviction that's post-collection performing performing and aside for I that commercial million still the of I Devina softness news our which When the really $XXX think the is the on. you think volume, year commented bigger from spoke in business the

Operator

next of Morgan Our with Kaplan Toni from comes question the line Stanley.

Hilary Lee

guys. Toni. This the on quarter, on Congrats for is Hilary Lee

Just want to touch on pricing a little bit.

So X% around when the rather to you said X% that price you than expecting quarter? closer earlier expect said year, does be mean you're price core you that the the last to hold for of that to rest

James Fish

our it we Well, I little we and mentioned price did that that exceeded actually a of bit for expectations. say -- earlier

anything that up for the changing positive point, we it, where actually full not your but is and this -- that's the set it leave At year, taken, that's guidance point we'll year a higher well little we're than so us. bit a So for originally we ended though.

Hilary Lee

coming follow-up, sustainability the quarter, $XXX about on you Got I just And wanted of last as to talked investments about the it. XXXX. from a sustainability. having EBITDA touch know million for

give to if of wondering of R&D little be kind recycling. details between you help. or split information the a Any on the bit would and of cadence would us able Just potentially kind

Tara Hemmer

whole had $XX The from roughly of that Sure. the from what that or is this And and we, most we increase our is for from XX% volume call, from prices which the during an last our in, commodity at locked that reason was today, which have Devina either of portion not X/X. recycling increase really about the offtake lot referenced, and business. renewable is long-term benefit a significant energy short, of in point, mid, million said

RIN prices we a year. really also we've prices that -- power and we saw RIN some increasing to this winter seen prices mild increased we've more related while offsetting and prices, natural items had seen on are gas So

Devina Rankin

when are in because of time of that back toward and shows online incremental year. the our with of the be coming cadence terms the the will QX to line regard toward weighted And heavily weighted half projects up, is more that it QX

Hilary Lee

the quarter. on again Congrats

Operator

the question from line next comes Our of Michael Hoffman Stifel. with

Michael Hoffman

John, have XX.X% there? can is margins? we baseline grow XX% new in the now new do from Devina, and Jim, say baseline we'll We a to

Devina Rankin

this WM in Everything so that's stop. isn't baseline, culture great way continuous things look that's There's those that a at do the current tells and focused you commitment to think won't I that right the X certainly on that customer is on the nothing focused that, it, and us think that shone know I the Michael. about one year through improvement. And

So upward new here. baseline I can do think go from the

Michael Hoffman

that's and XX% X still sixth and putting everything John think 'XX figure then to they're already. add have inflation that All you with the way if to and XX%, price/cost mouthful. together. I how we then Is is everybody, about, have it's what to your but that X.X% of assumptions, that And self-help is, I we management, the course, to it, last GDP on But points my a -- This that is. without spread of the out supposed is produce increment, XX.X% to price/cost earnings number some then left, self-help. like XX% call think start get model basis trying so have XX number between probably Tara, hours, what If think somewhere still too. GDP, on And should so inflation right spread in running X% we still you said and we the margin.

Devina Rankin

self-help. it I characterized you've think terms in that well of

I think that of out things were like improvement our as control deliveries. that as continuous the it's well mindset some truck of

headwind assets while, really traction strong are from business. to run that we've our starting need and a the see For we past to moved getting that

James Fish

continuous look Michael. alcoholic Self-help as and at I'm like the bottle. coming it I of sounds kind I was improvement, an off

Michael Hoffman

pejoratively. it mean didn't I

that that as you of to as do, things on you macro. think control I it opposed can relying the

James Fish

I know.

a bit a you little hard of giving Just time.

Michael Hoffman

XQ, Does with should first cadence, said Devina, second the But anything growth at what are you half be equal. this about half, drinking juncture? change these you EBITDA performance in days? So

Devina Rankin

The what is business solid were more because and you from solid margin really greater than expecting. that quickly the strong would half up say only I waste what is projected saw we first had showed the growth than growth performance even thing waste we is

toward half the So first lift that of solid the more heavily waste weighted comes year.

Michael Hoffman

more than weighting So to as a opposed little evenly? slightly

Devina Rankin

Correct.

Michael Hoffman

that of how benefit Okay. instead ITC the line? leverage, runs operational And of on through million of much the gross tax the is through $XX that margin

Devina Rankin

None of it, zero.

in tax of line. All it's the

Michael Hoffman

Perfect. would retention, also And improvement at are then metrics safety all-time the I the assume given goods? in

John Morris

seat good safety. there's indicator from of a mean, And of who's do point, seat. who we somebody new a clear a are distinction somebody tenured pretty not. the that's But that's see those who sort take between Michael. are a Yes, who's those operating between in the and matter in leading what a that I not. in are can not that a wide experience. of and we folks tenured having And It's who of a critique vehicle just spread expect

as down, So as to safety we results the we hold continue to improve number continue expect that to well.

James Fish

ASL a we've way, financial safety the this from but not obviously the It's said to the By but most metric. Michael, metric. in are a Financials it's safety metric. rear metric load before, better, -- is a most important move

person our person a from benefit behind us continue significantly. take to entire the back that the truck, continue in we is we as move the dangerous will place, most as cab, so inside And honestly, the operation, truck, of the to which that

Michael Hoffman

for Yes. And the last one me.

park business you the it powers in slow, is roll-off Is the different does cycle? drivers of and One reposition there raise prices. anything when this of that equipment,

John Morris

well. No. mean, very on. Michael, something it I that's I been focused we've think you said

what for, of we handful really deviation benefits getting we corner between the and to quarters handful that Some show last plan the actually really using, planning frankly, very data analytics can at need ago starting tell implemented plan technologies be we've to over see still what we a small a sure we better from that and use predictive we're of very of with didn't history to us that. would capacity and around making around years is the

Michael Hoffman

but adjustments for so part make of see those point. not you if That's So volume you we might a quickly. might anything, EBITDA because hit revenue see much, in the

John Morris

but We for the the the down being about it million. Michael, talked I about off was volume think $X quarter, revenue,

good was trade-off. got from when that standpoint, of a amount quality you from perspective, volume what margin revenue standpoint, the it from at So a look a versus we

Operator

Our Jefferies. comes Moore the from line Stephanie next question with of

Stephanie Benjamin Moore

I are like, been has side-arms the of greater missed mention of did on and maybe automating where side opportunity residential, And within left back the on do? to well. we for the automated in it, you terms if some commercial think left I What the what complete? routes, circle apologize wanted is automation opportunity automation those then I've but to as

So of you kind and accelerate the that just starting opportunity on really those maybe could time of if to efforts. expand line

John Morris

has to want do of XXX that to probably some with and really -- that fleet puts you comment We've pursuing done to started XXX targeted have in to baseball got load to load We've probably We taken say year, And because XXX us analogy. room sixth briefly the XXX this we routes trucks about routes XXX in inning, if go out I the with we got that and when another in about earnestly this truck we 'XX, rear about rear did QX. early roughly I since on some deliveries. that. get continue XXX the there. still

So hopefully, that that. clarifies

James Fish

And in commercial?

John Morris

Commercial.

it. the to got route around see efficiency, I continue in benefit where we Jim to we just driving that is side, it's system the than vehicles commented commercial in commercial sophisticated, think our putting really tools is more capability help is us that. are frankly, -- commercial And We've to some route cases, a some dynamic element dynamic and think the although to roll-off, and, where our route on real-time real-time element traffic less we in to -- have ability another is in, and now. on there

Stephanie Benjamin Moore

the labor just labor. in clearly it. on improvement so Got an touch to And then seeing incredible maybe aspect,

turnover. out called You

seeing what this guess Is actual turnover the fact employee as productive we're is seeing higher just at if of being If down? side Are element average of -- labor because level. come you more So you clearly, is deflationary kind a there is significantly more labor this or the components, you're break I maybe well? could out the -- the seeing of we could on tenure? kind explain a costs

Devina Rankin

down seen low cost its our that a digits wage would wages, that's We're you the in X% question. from have population, currently inflationary great tell terms soften. we for Yes, inflation driver of it's pressure double at I about And peak. and on certainly at

So associated that's the component with labor inflation. that's

is, The whether their retention, that deliveries And front, like the truck about optimization then and they they the talked work, that is assets office the John helps have need order other turnover. driver they customer. it's route really ultimately, and feel improved on technician serve efficiency, too, them, because and piece that appreciated to in

the of seeing in And of aspects help business. we're so those each

on think is I from impact that of the widening inflation labor operating most expense efficiency the headwind. the category on in significant improved the front expansion terms margin but in certainly helps

Operator

comes the from of with Tobey Our next question Truist. line Sommer

Jack Wilson

gains Wilson This efficiency remove is speak Can some capacity-based to that potential be is sort And sort positions? is of we'll on facility maybe Jack for other you or that the Tobey. seeing? to the upgrades of benefits than other some recycling the of

Tara Hemmer

Sure. really There's other X components.

first of able some sell price is material we at improved quality higher so to The the points. the of generated that's material we're really

and the mixed of at paper demonstrated higher brought we so more tie been facilities increasing moving and grades, significantly, MRFs automated all in capacity that premium. quite really online. And we're So then be we're how in volume. going grow recycling that's And able to volumes of customers collection our to bring can too. our we to grow example that a back also great volumes, and also get into we price these a the That's

Operator

question comes the with next Kaye Noah Our line Oppenheimer. of from

Noah Kaye

operating flow-through how on items It strong flow capital tax maybe sounds through and there's we also going can improvements. then working like, we the of cash into walk some just performance, really that some the get performance, So $XXX obviously, improvement free million?

we about delta? the do how Just think

Devina Rankin

Yes.

have tax really don't it million an growth directly of of we And And incremental projecting is EBITDA to expected $XXX flow you So because that the EBITDA we are expected higher the from the ITCs. offset a is through. dollar reason is million earnings $XX story. there have

taxes that offset for outlook So kind X cash of each flat. other those such effectively is our

a outlook flow certainly upside because strong than perspective in drove potentially and what you, from working $XXX we tell a million stronger we I year. quarter is that would expect expected. capital So such EBITDA had from for cash free the for increase some our I do

have we my incorporate whether wait that's to the and didn't timing-related, you in so to So guidance. see capital experience, revised working benefit in any

Noah Kaye

if seems. on And private today? up with although for further it as for answer. it way a have not can solid how regulations X things: really and a stands helpful. of municipal on action PFAS, EPA clear part that might you written two, everything on And to change, then impacts But kind as expectations that your of the have pretty the That's talk of but like congressional waste EPA. might cost thoughts does guess about not inequitable exemptions I it or seems one, the out action question clear kind played whether potentially any your expected,

John Morris

little following I so candidly, we're lot Noah, sub a But a an tell for to it has going both EPA didn't obviously still so the that sites following, as us that. we in sure -- still it the work managed. I right can for I go that around give see I on make that sure on some and that side, topic, tell I'm pragmatic we're you very about on up. to there's topic to start in C we the to post-collection our that some able can language to responsible is on We're DoD be we're side, offices think to going a a it getting doing to predict you the And lot super sites latitude in that the of, the that is considered PFAS, give pass last to manage a very was though, is fund to can we an designation, circle cost bolt some in be then actually, What There us had imagine, far last some for with on So really to the would industry are the because we handling would all find long-term, particular, very we front viable, opportunity. cleaned lastly, to our of effectively close now. And as little I opportunity as we was now. landfills, customer. a going D that that's days, few very approach which stay encouraging, you, technology more repositories an issue from would vocal be you are The see obviously landfill. post-collection we're already team bit this tell closely. security protection that enough whole some hard to language that will in the say cost at of the when release to a

So it captured hopefully, all. I

Operator

comes the line Bancroft Tony with of next Gabelli Funds. Our from question

George Bancroft

Jim, on the quarter. a Congratulations, John, Devina, team great and

any the are longer be business is is different through around maybe -- that -- transformational, on and other maybe What business? Just of other something in what these are regionals of outlook about like in term, there opportunities? your large are everyone there you either line or any -- talks it longer-term sort opportunities a interest still that maybe something

James Fish

Yes.

think I there us. are for certainly opportunities always

years the pipeline that been Over million. with couple opportunities. we've M&A We guidance we the opportunity that of say given in million our of the focused we've that years, was were on internal some and of to to last looked couple that last with $XXX did $XXX But strong. pretty sticking there respect

us but a long-term to there's acquisition it's also on as we've sure make inorganically, talked grow feel the we're like organically, think going good right a do that just strategic to lot opportunity for both I has this we So call, and prospect.

Operator

would queue. Jim for to now I'm the showing turn to closing Fish no remarks. the over back further I questions like in call

James Fish

us appreciate forward you Well, and Okay. you We thank participation, to joining talking quarter. to next for your we all today. look

Operator

you today's participation. Ladies Thank call. conference and gentlemen, for concludes your this

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