Montrose Environmental Group Reports Record 2025 Performance and Strong Outlook for 2026
Montrose Environmental Group, Inc., a leading provider of environmental services committed to protecting air, water, and soil while promoting sustainable economic growth, today announced its financial results for the fourth quarter and full year ended December 31, 2025. The Company’s performance in 2025 reflects its disciplined execution, strong organic growth, and strategic positioning for long-term success in environmental stewardship and client-focused services.
CEO Commentary: Strategic Focus and Strong Execution
Vijay Manthripragada, Chief Executive Officer and Director of Montrose, highlighted the Company’s strategic discipline over the past year. “Over a year ago, we announced a pause in acquisitions to emphasize the quality and durability of our business model. We recognized that US regulatory volatility could create opportunities, and our unique global client focus positioned us to benefit from these dynamics. Reflecting on 2025, our performance exceeded all major objectives. We delivered 13% organic revenue growth, expanded EBITDA margins, and generated record cash flow, achieving a 75% free cash flow conversion,” Mr. Manthripragada said. He emphasized that Montrose’s strong cash flow generation allowed the Company to end 2025 with leverage approximately 0.5x lower than initially forecast.
Mr. Manthripragada continued, “We also accelerated cross-selling across our platform, expanded our intellectual property portfolio, and attracted exceptional talent, positioning Montrose strongly for 2026 and beyond. Looking ahead, we are strategically prepared to resume selective, highly accretive acquisitions that complement our organic growth strategy.”
Strategic Outlook for 2026
For 2026, Montrose projects consolidated adjusted EBITDA of $125.0 million to $130.0 million, representing an approximately 100 basis-point expansion in EBITDA margins as a percentage of revenue compared to 2025. The Company anticipates revenue in the range of $840.0 million to $900.0 million, including expected emergency response revenue of $50.0 million to $70.0 million. Based on the midpoint of guidance, Montrose expects approximately 8% organic revenue growth for 2026. Notably, these projections do not include potential benefits from future acquisitions.
Montrose intends to strategically resume acquisitions in 2026, guided by valuation, balance sheet priorities, and maintaining appropriate leverage. The Company’s strong cash flow positions it to fund a combination of organic growth, capital expenditures, acquisitions, and share repurchases while preserving financial flexibility.
Fourth Quarter 2025 Results: Revenue Growth and Improved Profitability
Montrose reported fourth-quarter 2025 revenue of $193.3 million, an increase of $4.2 million, or 2.2%, over the prior-year period. Organic growth contributed $9.1 million, partially offset by lower environmental emergency response revenue. Growth was primarily driven by the $12.8 million increase in the Assessment, Permitting, and Response segment, while the Measurement and Analysis segment saw a revenue decline of $4.4 million due to project timing variations. Environmental emergency response revenue in the quarter was $3.1 million, down from $7.5 million in the prior-year quarter.
Operating results improved significantly in Q4 2025. Loss from operations decreased, supported by strong revenue growth and a $20.9 million reduction in stock-based compensation expense, largely related to the cancellation of executive stock appreciation rights in the prior year. Lower margins in the Remediation and Reuse segment, primarily from the wind-down of the renewable energy business, and in the Measurement and Analysis segment partially offset these gains. Net loss improved to $8.2 million, or $0.23 per share, compared to a net loss of $28.2 million, or $0.90 per share, in the prior-year quarter. This $20 million year-over-year improvement was primarily attributable to enhanced operating profitability and lower income tax expenses.
Adjusted Net Income for the fourth quarter was $13.5 million, with adjusted EPS of $0.35, compared to $14.7 million and $0.29, respectively, in the prior-year period. While adjusted net income declined slightly due to lower operating margins, EPS benefited from the elimination of the Series A-2 dividend and a reduced number of fully diluted common shares. Consolidated adjusted EBITDA for Q4 2025 was $23.9 million, or 12.4% of revenue, down from $27.2 million, or 14.4% of revenue, in the prior-year quarter, largely due to lower operating margins and a shift in revenue mix.
Full-Year 2025 Results: Strong Growth Across All Segments
For the full year 2025, Montrose reported revenue of $830.5 million, a 19.3% increase compared to $696.4 million in 2024. This growth was driven by strong organic revenue across all three segments, totaling $81.8 million or 12.7%, $29.0 million in environmental emergency response revenue, and $25.5 million from acquisitions completed in 2024. Revenue from environmental emergency responses totaled $77.0 million in 2025, up from $48.0 million in the prior year.
Income from operations increased by $48.4 million, reflecting strong organic growth, favorable segment mix, and operational leverage. Net loss improved dramatically to $0.8 million, or $0.14 per share, from a $62.3 million loss, or $2.22 per share, in 2024. This $61.5 million improvement was driven by operating performance and a $20.2 million gain related to the redemption of Series A-2 preferred stock, partially offset by higher interest and income tax expenses.
Adjusted Net Income for 2025 was $60.7 million, with adjusted EPS of $1.36, compared to $55.8 million and $1.08, respectively, in 2024. Consolidated adjusted EBITDA for the full year was $116.2 million, a $20.4 million increase over 2024, representing 14.0% of revenue, up from 13.8% the prior year. This growth reflects higher revenue, improved operating performance, and incremental environmental emergency response contributions, partially offset by higher corporate expenses and the wind-down of the renewable energy business.
Cash Flow, Liquidity, and Capital Allocation
Montrose generated substantial operating cash flow of $107.5 million in 2025, compared to $22.2 million in the prior year. Free cash flow reached $87.0 million, reflecting strong earnings performance and improved working capital management. The Company used cash and borrowings under its 2025 Credit Facility to fully redeem the remaining $122.2 million of Series A-2 preferred stock, strengthening the balance sheet.
As of December 31, 2025, Montrose maintained a leverage ratio of 2.5x and had $225.4 million in available liquidity, including $11.2 million in cash and $214.2 million in available capacity on its revolving credit line. These liquidity and balance sheet positions provide flexibility to support acquisitions, organic growth initiatives, and potential shareholder returns.
Conclusion: Positioned for Sustainable Growth and Strategic Expansion
Montrose Environmental Group’s 2025 results underscore the resilience and strength of its business model, combining strong organic growth, disciplined cost management, and strategic use of cash flow to enhance shareholder value. With a focus on environmental stewardship, Montrose continues to serve a global client base across air, water, and soil-related services, while positioning itself for selective, accretive acquisitions in 2026.
Looking forward, Montrose expects continued margin expansion, steady organic growth, and disciplined capital allocation, providing a solid foundation for long-term growth and value creation in the environmental services sector.
