Montrose Environmental Group Reports Another Record Quarter and Record First Nine Months; Increases 2025 Guidance

Third Quarter 2025 Highlights (comparisons to third quarter 2024)

• 25.9% revenue growth to $224.9 million, a $46.2 million increase
• Net income and net income per diluted share attributable to common stockholders (EPS) improved to $8.4 million, or $0.21 EPS, compared to a net loss of $10.6 million, or $0.39 net loss per diluted share attributable to common stockholders (LPS)
• Adjusted Net Income¹ and Diluted Adjusted Net Income per share¹ (Adj EPS) were $14.2 million and $0.36, respectively, compared to $19.1 million and $0.41, respectively
• 18.9% Consolidated Adjusted EBITDA¹ growth to $33.7 million, a $5.3 million increase
• Consolidated Adjusted EBITDA¹ as a percentage of revenue was 15.0%

First Nine Months 2025 Highlights (comparisons to first nine months 2024)

• 25.6% revenue growth to $637.3 million, a $129.9 million increase
• Net income and EPS improved to $7.4 million and $0.08 EPS, respectively, compared to a net loss of $34.1 million, or $1.30 LPS
• Adjusted Net Income¹ and Adj EPS¹ increased to $45.0 million and $1.03, respectively, compared to $38.6 million and $0.80, respectively
• 34.6% Consolidated Adjusted EBITDA¹ growth to $92.3 million, a $23.7 million increase
• 100 bps increase in Consolidated Adjusted EBITDA¹ as a percentage of revenue to 14.5%
• $65.3 million improvement in operating cash flow to $55.5 million, or 60.2% of Consolidated Adjusted EBITDA¹
• 2.7x leverage as of September 30, 2025; redeemed remaining the $62.2 million of Series A-2 Preferred Stock in third quarter 2025, simplifying capital structure and eliminating future Series A-2 dividends—six months earlier than expected due to strong results

Increased Full-Year 2025 Guidance

• Increased expected Consolidated Adjusted EBITDA¹ to a range of $112.0 million to $118.0 million, representing 20% growth at the midpoint compared to full-year 2024
• Increased expected revenue to a range of $810.0 million to $830.0 million, representing 18% growth at the midpoint compared to full-year 2024

Montrose Environmental Group, Inc. (the "Company," "Montrose" or "MEG") (NYSE:MEG) is on a mission to help protect the air we breathe, the water we drink, and the soil that sustains us to enhance environmental stewardship while supporting economic development. Today, the Company announced results for the third quarter and first nine-month periods ended September 30, 2025.

Montrose Chief Executive Officer and Director, Vijay Manthripragada, commented, "I am thrilled to announce another outstanding quarter as our record 2025 continues. The credit goes to our ~3,500 colleagues around the world to whom I am incredibly grateful. Demand for our services is elevated, driven by broader market forces, increased domestic industrial production in our key geographies and state and provincial regulations. This is our third consecutive quarter of record results, including free cash flow¹ generation that exceeded expectations. Our outperformance year to date is primarily due to strong organic growth across all three of our segments and the resultant operating leverage, which continues to drive margin accretion."

Mr. Manthripragada continued, "Due to our strong performance, we are increasing our guidance for 2025. At the midpoint of our increased guidance for 2025, we expect 18% revenue growth and 20% Consolidated Adjusted EBITDA¹ growth over 2024. In addition, given the momentum in the business, we are providing a preliminary Consolidated Adjusted EBITDA¹ outlook for 2026, which continues our attractive organic growth trajectory and continued margin accretion."

Full Year 2025 Outlook

The Company announced an increase for the third consecutive quarter in expected full-year 2025 Consolidated Adjusted EBITDA¹ to a range of $112.0 million to $118.0 million. For the second consecutive quarter, the Company announced an increase in expected full-year 2025 revenue to a range of $810.0 million to $830.0 million. The Consolidated Adjusted EBITDA¹ and revenue outlook do not include any benefit from future acquisitions.

Full Year 2026 Outlook

The Company expects full-year 2026 Consolidated Adjusted EBITDA¹ to be at or above $125.0 million with an expansion of Consolidated Adjusted EBITDA¹ as a percentage of revenue in full year-2026 as compared to full-year 2025 Guidance.

Third Quarter 2025 Results

Revenue in the third quarter of 2025 was $224.9 million compared to $178.7 million in the prior year quarter, an increase of $46.2 million, or 25.9%. This increase was primarily due to strong organic revenue growth totaling $44.9 million and contributions from acquisitions of $2.4 million. Revenue from environmental emergency responses was $11.5 million in the third quarter of 2025, compared to $12.0 million in the prior year quarter.

In the third quarter of 2025, increased income from operations resulted from strong revenue growth and improved margins in the Assessment, Permitting, and Response segment and the Measurement and Analysis segment. Net income in the third quarter of 2025 improved to $8.4 million, or $0.21 EPS, compared to a net loss of $10.6 million, or $0.39 LPS, in the prior year quarter. This $18.9 million year-over-year improvement in net income primarily resulted from strong revenue growth, margin expansion, and a $10.6 million fair value gain related to the Series A-2 redemption, partially offset by incremental interest and tax expense. The $0.60 comparative period increase in EPS was due to improved net income and the elimination of the Series A-2 dividend following earlier than expected and full redemption of the preferred equity instrument on July 1, partially offset by an increase in weighted average diluted common shares outstanding.

In the third quarter of 2025, Adjusted Net Income¹ and Adj EPS¹ were $14.2 million and $0.36, respectively, compared to the prior year quarter Adjusted Net Income¹ and Adj EPS¹ of $19.1 million and $0.41, respectively. Both Adjusted Net Income¹ and Adj EPS¹ decreased primarily due to higher income tax expense in the current period, with Adj EPS¹ in the current period benefiting from the elimination of the Series A-2 dividend.

Third-quarter 2025 Consolidated Adjusted EBITDA¹ was $33.7 million, compared to $28.3 million in the prior year quarter. The $5.3 million increase in Consolidated Adjusted EBITDA¹ was primarily due to higher revenue. Consolidated Adjusted EBITDA¹ as a percentage of revenue decreased 80 basis points to 15.0% due to incremental corporate costs, primarily higher bonus expenses driven by outperformance, partially offset by improved margins in the Assessment, Permitting, and Response and Measurement and Analysis segments due to improved operating performance and operating leverage.

First Nine Months 2025 Results

Revenue in the first nine months of 2025 was $637.3 million, compared to $507.3 million in the prior year period, an increase of $129.9 million, or 25.6%. This increase was primarily due to strong organic revenue growth in all three segments totaling $73.3 million; incremental revenue from environmental emergency responses of $33.3 million; and $25.0 million in contributions from acquisitions. Revenue from environmental emergency responses was $73.9 million in the first nine months of 2025, compared to $40.6 million in the prior year period.

In the first nine months of 2025, higher income from operations resulted from strong revenue growth, contributions from acquisitions, and operating leverage. Net income in the first nine months of 2025 was $7.4 million, or $0.08 EPS, compared to a net loss of $34.1 million, or $1.30 LPS, in the prior year period. This $41.5 million year-over-year improvement in net income primarily resulted from strong revenue growth, margin expansion, and a $20.2 million fair value gain related to the Series A-2 preferred stock redemption, partially offset by incremental interest and tax expenses. The $1.38 comparative period improvement in EPS primarily resulted from higher net income and lower Series A-2 dividends, partially offset by an increase in weighted average diluted common shares outstanding.

In the first nine months of 2025, Adjusted Net Income¹ and Adj EPS¹ were $45.0 million and $1.03, respectively, compared to the prior year period Adjusted Net Income¹ and Adj EPS¹ of $38.6 million and $0.80, respectively. Both Adjusted Net Income¹ and Adj EPS¹ increased primarily due to strong revenue growth and margin expansion, partially offset by higher income tax expense, with Adj EPS¹ in the current period also benefiting from lower dividends on the then outstanding Series A-2.

Consolidated Adjusted EBITDA¹ for the first nine months of 2025 was $92.3 million, compared to $68.5 million in the prior year period. The $23.7 million increase in Consolidated Adjusted EBITDA¹ was primarily due to higher revenue in all three segments. Consolidated Adjusted EBITDA¹ as a percentage of revenue increased 100 bps to 14.5% primarily due to strong operating performance in the Measurement and Analysis and Assessment, Permitting, and Response segments, and incremental environmental emergency response revenue, partially offset by higher corporate expenses, primarily due to higher bonus expenses, and losses associated with exiting the renewable energy service within the Remediation and Reuse segment.

Operating Cash Flow, Liquidity and Capital Resources

On July 1, 2025, the Company voluntarily fully redeemed all remaining issued and outstanding shares of Series A-2 held by an affiliate of Oaktree Capital. The Company used cash on hand and borrowings under its 2025 Credit Facility to redeem the outstanding stated value of Series A-2 Preferred Stock of $62.2 million and paid $1.4 million of accrued and unpaid dividends thereon through the redemption date.

Net cash provided by operating activities for the nine months ended September 30, 2025, was $55.5 million compared to cash used in operating activities of $9.7 million in the prior year period. This $65.3 million improvement was primarily due to an increase in earnings before non-cash items of $41.5 million and improved working capital performance. Free cash flow¹ generation during the nine months ended September 30, 2025, was $38.8 million, or 42.0% of Consolidated Adjusted EBITDA¹.

As of September 30, 2025, Montrose's leverage ratio under the 2025 Credit Facility was 2.7x. As of September 30, 2025 Montrose had $198.5 million of available liquidity, including $6.7 million of cash and $191.7 million of availability on its revolving line of credit.

Webcast and Conference Call

The Company will host a webcast and conference call on Thursday, November 5, 2025, at 8:30 a.m. Eastern Time to discuss third quarter results. A question-and-answer session will follow the prepared remarks. A live webcast of the conference call will be available in the Investors section of the Montrose website at www.montrose-env.com. Alternatively, to participate in the live call, dial (800) 715-9871 (toll-free in North America) or +1 (646) 307-1963 (international) approximately ten minutes before the scheduled start. When prompted, please provide the Conference ID: 8690520 to join the Montrose Third Quarter 2025 Earnings Conference Call. For those unable to listen to the live broadcast, an audio replay of the conference call will be available on the Montrose website for 30 days.

About Montrose

Montrose is a leading environmental solutions company focused on supporting commercial and government organizations as they deal with the challenges of today and prepare for what's coming tomorrow. With ~3,500 employees across approximately 120 locations worldwide, Montrose combines deep local knowledge with an integrated approach to design, engineering, and operations, enabling Montrose to respond effectively and efficiently to the unique requirements of each project. From comprehensive air measurement and laboratory services to regulatory compliance, environmental emergency response, permitting, engineering, and remediation, Montrose delivers innovative and practical solutions that keep its clients on top of their immediate needs – and well ahead of the strategic curve. For more information, visit www.montrose-env.com.

Forward‐Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may be identified by the use of words such as "intend," "expect", and "may", and other similar expressions that predict or indicate future events or that are not statements of historical matters. Forward-looking statements are based on current information available at the time the statements are made and on management's reasonable belief or expectations with respect to future events, and are subject to risks and uncertainties, many of which are beyond the Company's control, that could cause actual performance or results to differ materially from the belief or expectations expressed in or suggested by the forward-looking statements. Additional factors or events that could cause actual results to differ may also emerge from time to time, and it is not possible for the Company to predict all of them. Forward-looking statements speak only as of the date on which they are made, and the Company undertakes no obligation to update any forward-looking statement to reflect future events, developments or otherwise, except as may be required by applicable law. Investors are referred to the Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2024 as supplemented by its Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, for additional information regarding the risks and uncertainties that may cause actual results to differ materially from those expressed in any forward-looking statement.

Non-GAAP Financial Information

In addition to our results under GAAP, in this release we also present certain other supplemental financial measures of financial performance that are not required by, or presented in accordance with, GAAP, including, Consolidated Adjusted EBITDA, Adjusted Net Income and Basic and Diluted Adj EPS. We calculate Consolidated Adjusted EBITDA as net income (loss) before interest expense, income tax expense (benefit) and depreciation and amortization, adjusted for the impact of certain other items, including stock-based compensation expense and acquisition-related costs, as set forth in greater detail in the table below. We calculate Adjusted Net Income as net income (loss) before amortization of intangible assets, stock-based compensation expense, fair value changes to financial instruments and contingent earnouts, discontinued specialty lab, and other gain or losses, as set forth in greater detail in the table below. Basic Adj EPS represents Adjusted Net Income attributable to stockholders divided by the weighted average number of shares of common stock outstanding during the applicable period. Diluted Adj EPS represents Adjusted Net Income attributable to stockholders divided by the fully diluted number of shares of common stock outstanding during the applicable period. Free cash flow is defined as net cash provided by (used in) operating activities plus net cash used in investing activities, adjusted for the impact of certain other items, including purchase price true ups, minority investments, cash paid for acquisitions, net of cash acquired; and dividend payments to the Series A-2 holders.

Consolidated Adjusted EBITDA is one of the primary metrics used by management to evaluate our financial performance and compare it to that of our peers, evaluate the effectiveness of our business strategies, make budgeting and capital allocation decisions and in connection with our executive incentive compensation. Adjusted Net Income and Basic and Diluted Adj EPS are useful metrics to evaluate ongoing business performance after interest and tax. These measures are also frequently used by analysts, investors and other interested parties to evaluate companies in our industry. Further, we believe they are helpful in highlighting trends in our operating results because they allow for more consistent comparisons of financial performance between periods by excluding gains and losses that are non-operational in nature or outside the control of management, and, in the case of Consolidated Adjusted EBITDA, by excluding items that may differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate and capital investments. Free cash flow is used by management as one of the means by which it assesses cash generation in excess of ongoing capital needs of the business.

These non-GAAP measures do, however, have certain limitations and should not be considered as an alternative to net income (loss), earnings (loss) per share or any other performance measure derived in accordance with GAAP. Our presentation of Consolidated Adjusted EBITDA, Adjusted Net Income and Basic and Diluted Adj EPS should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items for which we may make adjustments. In addition, Consolidated Adjusted EBITDA, Adjusted Net Income and Basic and Diluted Adj EPS may not be comparable to similarly titled measures used by other companies in our industry or across different industries, and other companies may not present these or similar measures. Management compensates for these limitations by using these measures as supplemental financial metrics and in conjunction with our results prepared in accordance with GAAP. We encourage investors and others to review our financial information in its entirety, not to rely on any single measure and to view Consolidated Adjusted EBITDA, Adjusted Net Income and Basic and Diluted Adj EPS in conjunction with the related GAAP measures. Free cash flow has certain limitations and should not be considered as an alternative to or in isolation net cash provided by (used in) operating activities or any other measure of cash flow generation calculated in accordance with GAAP. In evaluating Free cash flow, you should be aware that Free cash flow does not represent residual cash flow available for discretionary expenditures.

Additionally, we have provided estimates regarding Consolidated Adjusted EBITDA for 2025. These projections account for estimates of revenue, operating margins and corporate and other costs. However, we cannot reconcile our projection of Consolidated Adjusted EBITDA to net income (loss), the most directly comparable GAAP measure, without unreasonable efforts because of the unpredictable or unknown nature of certain significant items excluded from Consolidated Adjusted EBITDA and the resulting difficulty in quantifying the amounts thereof that are necessary to estimate net income (loss). Specifically, we are unable to estimate for the future impact of certain items, including income tax (expense) benefit, stock-based compensation expense, and fair value changes. We expect the variability of these items could have a significant impact on our reported GAAP financial results.

In this release we also reference our organic growth. We define organic growth as the change in revenues excluding revenues from i) our environmental emergency response business, ii) acquisitions for the first twelve months following the date of acquisition, and iii) businesses held for sale, disposed of or discontinued. Management uses organic growth as one of the means by which it assesses our results of operations. Organic growth is not, however, a measure of revenue growth calculated in accordance with U.S. generally accepted accounting principles, or GAAP, and should be considered in conjunction with revenue growth calculated in accordance with GAAP. We have grown organically over the long term and expect to continue to do so.

In a given reporting period, when we refer to revenue changes driven by acquisitions, we are referring to the revenue contribution from any acquisition from its closing date through the first 12 months of that acquisition, at which point any subsequent contribution therefrom would be organic.

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(949) 988-3383

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Director, Corporate Communications

(917) 520-2751

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