Waste Connections, Inc. WCN

The company highlighted its tenth consecutive quarter of improved employee retention, with voluntary turnover falling 60 basis points sequentially to below 12%. This improvement, coupled with record-low safety incident rates (down 40% YoY in recent months), is translating into reduced overtime, lower vehicle wear and tear, and enhanced customer satisfaction, positioning the company for continued growth and margin expansion. Management emphasized that this cultural shift is 90% behavioral change through coaching, rather than technology.

Core pricing reached 6.9% in Q1, exceeding expectations due to strong pricing retention, particularly in competitive markets where it exceeded 8.5%. Total price of 6.7% was slightly offset by a 20 basis point reduction from fuel and material surcharges. Volumes were down 2.8%, impacted by 50 basis points from weather events and ongoing shedding of unprofitable contracts, but showed sequential improvement when normalized for^📎 these factors and the Chiquita Canyon closure.

Waste Connections continues its aggressive acquisition strategy, having already closed over $125 million in annualized revenues in the first four months of the year, including a strategic state-of-the-art recycling facility in New Jersey. With a debt-to-EBITDA leverage of 2.3x (2.73x as defined in credit agreement) and a recent Moody's A3 rating upgrade, the company is well-positioned for further M&A and value creation. The recent HSR filing changes are not expected to impact WCN's typical acquisitions, as 99% are under $125 million.

Management confirmed the projected cost estimate for the Chiquita Canyon landfill for FY25 remains $100 million to $150 million. The reaction is reported as contained and stable, with odor complaints down over 90% and production levels from the reaction down approximately 30% from their peak. The area has been completely sealed with approximately 50 acres of synthetic material, indicating the situation is progressing as expected.

The Arrowhead Landfill, acquired in August 2023, has significantly ramped up its daily tonnage from 2,700 to 7,500-8,000 tonnes on peak days. The company expects to process 2 million tonnes this year, with plans to exceed that in 2026 and beyond, pushing towards 9,000+ tonnes per day. This expansion is largely driven by internal redirection of waste from other Eastern Seaboard sites, allowing those sites to open up to third-party volumes, which WCN is actively pursuing.

Despite broader macroeconomic uncertainty^🌐 and concerns about tariffs, Waste Connections has not observed any noteworthy impacts on its Q1 results or solid waste organic growth. The company has no significant exposure to tariffs for its 2025 CapEx, with only 10 chassis remaining to be built that could be subject to a potential $3,500 per chassis tariff. WCN is proactively shifting some parts inventory to domestic manufacturers to mitigate future risks.