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What changed in Montrose Environmental Group, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Montrose Environmental Group, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+348 added−393 removedSource: 10-K (2026-02-26) vs 10-K (2025-03-03)

Top changes in Montrose Environmental Group, Inc.'s 2025 10-K

348 paragraphs added · 393 removed · 275 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThroughout the year, our business leaders lead quarterly virtual town hall meetings to communicate corporate initiatives, reinforce key messages, and recognize employee achievements while also encouraging feedback from our teams. Our monthly newsletter serves as an additional communication channel, allowing us to showcase ongoing projects, share key initiatives, and provide updates from functional areas such as HR and cybersecurity.
Biggest changeIn 2025, our Chief Executive Officer held quarterly global town halls and our business segment leaders led quarterly all-hands meetings to communicate corporate initiatives, reinforce key messages, and recognize employee achievements, while also soliciting and encouraging feedback from our teams.
Afsari was an attorney in the corporate practice of Paul Hastings LLP, an international law firm, from September 2007 to October 2014. At Paul Hastings, Ms. Afsari represented a variety of business entities in all aspects of corporate and business law, including domestic and cross-border mergers and acquisitions, venture capital financing, private placements and joint venture transactions.
Afsari was an attorney in the corporate practice of Paul Hastings LLP, an international law firm, from September 2007 to October 2014. At Paul Hastings, Ms. Afsari represented a variety of business entities in all aspects of corporate and business law, including domestic and cross-border mergers and acquisitions, venture capital financing, private placements and joint venture transactions. Ms.
Public Demands, Industrial Activity, Climate Change and Regulations Each Drive Needs for Environmental Services Heightened public awareness and increasing stakeholder demand for environmental responsibility and sustainability have led to a growing need for environmental services. Many companies worldwide have implemented environmental, social, and governance stewardship initiatives focused on managing potential future risks, rather than merely complying with regulations.
Public Demands, Industrial Activity, Climate Change and Regulations Each Drive Needs for Environmental Services Heightened public awareness and stakeholder demand for environmental responsibility and sustainability have led to a growing need for environmental services. Many companies worldwide have implemented environmental, social, and governance stewardship initiatives focused on managing potential future risks, rather than merely complying with regulations.
However, we do not principally rely on any single piece of intellectual property, nor is any single piece of intellectual property material to our financial condition or results of operations. 10 Seasonality Because demand for environmental services is not driven by specific or predictable patterns in one or more fiscal quarters, our business is better assessed based on yearly results.
However, we do not principally rely on any single piece of intellectual property, nor is any single piece of intellectual property material to our financial condition or results of operations. Seasonality Because demand for environmental services is not driven by specific or predictable patterns in one or more fiscal quarters, our business is better assessed based on yearly results.
These efforts are aimed at creating better solutions for our clients. We believe that these investments, 4 along with our focus on geographic expansion, sales and marketing initiatives, environmental service offerings, and strategic acquisitions, will continue to distinguish us in the marketplace. Our revenue and earnings are highly resilient.
These efforts are aimed at creating better solutions for our clients. We believe that these investments, along with our focus on geographic expansion, sales and marketing initiatives, environmental service offerings, and strategic acquisitions, will continue to distinguish us in the marketplace. Our revenue and earnings are highly resilient.
Manthripragada also joined our Board of Directors and, since February 2016, he has served as our President and Chief Executive Officer. Before joining Montrose Environmental, Mr. Manthripragada most recently served as the Chief Executive Officer of PetCareRx, Inc., from 2013 to 2015. Prior to PetCareRx, Mr. Manthripragada was at Goldman Sachs where he held various positions from 2006 to 2013.
Manthripragada also joined our Board of Directors and, since February 2016, he has served as our President and Chief Executive Officer. Before joining Montrose, Mr. Manthripragada most recently served as the Chief Executive Officer of PetCareRx, Inc., from 2013 to 2015. Prior to PetCareRx, Mr. Manthripragada was at Goldman Sachs where he held various positions from 2006 to 2013. Mr.
In accordance with industry practice, most of our contracts, both in the private and public sector, are subject to termination at the discretion of the client. In such situations, our contracts typically provide for reimbursement of costs incurred and payment of fees earned through the date of termination. See Item 1A.
In accordance with industry practice, most of our contracts, both in the private and public sector, are subject to 8 termination at the discretion of the client. In such situations, our contracts typically provide for reimbursement of costs incurred and payment of fees earned through the date of termination. See Item 1A.
We believe we have a variety of sustainable competitive advantages in this market, including: • preeminent brands; • one of the most prominent air testing companies in North America with vertically integrated testing and analytical capabilities, including ultra-trace analysis; • comprehensive laboratory network in the United States, offering a complete suite of analytical solutions for virtually all environmental projects; • one of the most experienced providers of advanced optical gas imaging “OGI” testing used to detect hydrocarbon gas leaks; and • our proprietary software, technologies, processes and applications, including the ability to detect air contaminants in real time at ultra-trace concentrations.
We believe we have a variety of sustainable competitive advantages in this market, including: • one of the most prominent air testing companies in North America with vertically integrated testing and analytical capabilities, including ultra-trace analysis; • comprehensive laboratory network in the United States, offering a complete suite of analytical solutions for virtually all environmental projects; • one of the most experienced providers of advanced optical gas imaging “OGI” testing used to detect hydrocarbon gas leaks; and • our proprietary software, technologies, processes and applications, including the ability to detect air contaminants in real time at ultra-trace concentrations.
Revuelta has served as our Chief Strategy Officer since June 2017, prior to which he was our Vice President and served in several other interim executive positions with Montrose Environmental since March 2014. Prior to joining Montrose Environmental, Mr.
Revuelta has served as our Chief Strategy Officer since June 2017, prior to which he was our Vice President and served in several other interim executive positions with Montrose since March 2014. Prior to joining Montrose, Mr.
Compliance with Federal, State/Provincial and Local Laws Our operations subject us to environmental, health and safety laws and regulations in jurisdictions where we operate, including the United States, Canada, Australia and Europe.
Compliance with Federal, State/Provincial and Local Laws Our operations subject us to environmental, health and safety laws and regulations in jurisdictions where we operate, including the United States, Canada, and Australia.
In addition, the SEC maintains an Internet site that contains our reports, proxy statements and other information that we electronically file with, or furnish to, the SEC at www.sec.gov.
In addition, the SEC maintains an Internet site that contains our reports, proxy statements and other information that we electronically file with, or furnish to, the SEC at www.sec.gov. 12
In the United States, Canada, Australia, and Europe, the federal, state, provincial and local 5 regulations targeting air and water quality management, waste and contaminated soil management or reductions in greenhouse gas emissions, each of which drives portions of our business, have been implemented over many decades, and are subject to change.
In the United States, Canada, and Australia, the federal, state, provincial and local regulations targeting air and water quality management, waste and contaminated soil management or reductions in greenhouse gas emissions, each of which drives portions of our business, have been implemented over many decades, and are subject to change.
To help promote compliance with these and other laws and regulations, our employees are sometimes required to complete tailored ethics and other compliance training relevant to their position and our operations. Information About Our Executive Officers Vijay Manthripragada, 48 – Mr. Manthripragada joined Montrose Environmental as our President in September 2015. In June 2016 Mr.
To help promote compliance with these and other laws and regulations, our employees are sometimes required to complete tailored ethics and other compliance training relevant to their position and our operations. Information About Our Executive Officers Vijay Manthripragada , 49 – Mr. Manthripragada joined Montrose as our President in September 2015. In June 2016 Mr.
“Risk Factors.” Competition We operate in a competitive, but fragmented, market. No single company or group of companies dominates across the entire environmental services market in which we operate.
“Risk Factors.” Competition We operate in a competitive and fragmented market. No single company or group of companies dominates across the entire environmental services market in which we operate.
We do not rely upon any single service, product, political approach or regulatory framework. We serve a diverse set of approximately 6,300 clients across a wide variety of end markets and geographies in both the private and public sectors, with the majority of clients being in the private sector.
We do not rely upon any single service, product, political approach or regulatory framework. We serve a diverse set of clients across a wide variety of end markets and geographies in both the private and public sectors, with the majority of clients being in the private sector.
Clients We provide environmental services to approximately 6,300 clients operating in a number of sectors and industries, including but not limited to oil & gas, utilities, local, state, provincial and federal government entities, technical services, industrial manufacturing, transportation, chemicals, renewable energy generation, aerospace, telecommunications and engineering. We have long-term, and through our legacy companies, decades-old relationships.
Clients We provide environmental services to clients operating in a number of sectors and industries, including but not limited to oil & gas, utilities, local, state, provincial and federal government entities, technical services including engineering, industrial manufacturing, chemicals, transportation, renewable energy generation, and telecommunications. We have long-term, and through our legacy companies, decades-old relationships.
Mr. Manthripragada received his Master of Business Administration from The Wharton School, University of Pennsylvania and his Bachelor of Science in Biology from Duke University. Allan Dicks, 52 – Mr. Dicks has been our Chief Financial Officer since August 2016. Before joining Montrose Environmental, Mr.
Manthripragada received his Master of Business Administration from The Wharton School, University of Pennsylvania and his Bachelor of Science in Biology from Duke University. Allan Dicks , 53 – Mr. Dicks has been our Chief Financial Officer since August 2016. Before joining Montrose, Mr.
He is a Chartered Accountant in South Africa and is a Certified Public Accountant (inactive) in the State of California. Nasym Afsari, 42 – Ms. Afsari has been our General Counsel since November 2014 and our Secretary since August 2015. Before joining Montrose Environmental, Ms.
He is a Chartered Accountant in South Africa and is a Certified Public Accountant (inactive) in the State of California. Nasym Afsari , 43 – Ms. Afsari has been our General Counsel since November 2014 and our Secretary since August 2015. Before joining Montrose, Ms.
EBI concludes that strong tailwinds of infrastructure funding, energy security, energy transition, Environmental, Social and Governance, or ESG, and climate resilience, in addition to traditional drivers of air quality, water quality, responsible waste management, resource recovery, remediation and restoration are leading to positive growth across all environmental sectors in the global market.
EBI concludes that strong tailwinds of infrastructure funding, energy security, energy transition, and climate resilience, in addition to traditional drivers of air quality, water quality, responsible waste management, resource recovery, remediation and restoration are leading to positive growth across all environmental sectors in the global market.
Dicks first served as a consultant interim Chief Financial Officer from February 2015 to April 2015 and then Chief Financial Officer from April 2015 to June 2016 of Convalo Health International, Corp., a public Canadian healthcare company. Prior to that, Mr.
Dicks first served as a consultant interim Chief Financial Officer from February 2015 to April 2015 and then Chief Financial Officer from April 2015 to June 2016 of Convalo Health International, Corp., a public Canadian healthcare company.
Dicks held a number of finance-focused executive positions starting in 2000, including Chief Financial Officer of Universal Services of America, Chief Financial Officer of Moark, LLC, a division of Land O’ Lakes, Inc., Vice President of Finance of White Cap Construction Supply, a division of HD Supply, and first as assistant Corporate Controller and subsequently as a division Chief Financial Officer of Dole Food Company, Inc.
Prior to that, Mr. 11 Dicks held a number of finance-focused executive positions starting in 2000, including Chief Financial Officer of Universal Services of America, Chief Financial Officer of Moark, LLC, a division of Land O’ Lakes, Inc., Vice President of Finance of White Cap Construction Supply, a division of HD Supply, and first as assistant Corporate Controller and subsequently as a division Chief Financial Officer of Dole Food Company, Inc.
Instead, each of our segments has competitors with narrower service offerings and/or geographies. Our Assessment, Permitting and Response segment competitors include the environmental divisions of ERM, Ramboll, Geosyntec, Exponent, WSP and other large engineering companies and small businesses.
Each of our segments has competitors with narrower service offerings and/or geographic breadth. Our Assessment, Permitting and Response segment competitors include the environmental divisions of ERM, Ramboll, Geosyntec, Exponent, WSP and other large engineering companies and small businesses.
As a result of the nature of our environmental emergency response business, our Assessment, Permitting and Response segment may at times experience higher customer concentration levels based on the severity, duration and outcome of certain types of environmental emergencies for which we provide response services, as was the case in 2024 when 31.4% of our Assessment, Permitting and Response segment revenues were attributable to three customers.
As a result of the nature of our environmental emergency response business, our Assessment, Permitting and Response segment may at times experience higher customer concentration levels based on the severity, duration and outcome of certain types of environmental emergencies for which we provide response services, as was the case in 2025 when 56.9% of our Assessment, Permitting and Response segment revenues were attributable to three customers.
This segment, which is primarily based on a time and materials, or T&M, revenue model, generated approximately 30.9% of our revenue for the fiscal year ended December 31, 2024. Measurement and Analysis . Our Measurement and Analysis segment is one of the largest providers of environmental testing and laboratory services in North America.
This segment, which is primarily based on a time and materials, or T&M, revenue model, generated approximately 37.0% of our revenue for the fiscal year ended December 31, 2025. Measurement and Analysis . Our Measurement and Analysis segment is one of the largest providers of environmental testing and laboratory services in North America.
We believe this segment maintains a number of competitive advantages, including: • strong brands and market leadership, particularly with environmental preparedness and response; • strong relationships with key private and public sector clients with needs for multiple environmental services, facilitating cross selling opportunities; • a core team of approximately 1,817 employees, including well-known technical experts with longstanding client relationships and significant experience across the key disciplines in the segment; • technology, software and data management capabilities, particularly within our response segment; • our proven ability to help clients navigate regulatory, public and legal scrutiny; and • a national reach established by having successfully assessed and permitted hundreds of projects in jurisdictions across the United States.
We believe this segment maintains a number of competitive advantages, including: • strong relationships with key private and public sector clients with needs for multiple environmental services, facilitating cross selling opportunities; • a core team comprised of well-known technical experts with longstanding client relationships and significant experience across the key disciplines in the segment; • technology, software and data management capabilities, particularly within our emergency response service line; • our proven ability to help clients navigate regulatory, public and legal scrutiny; and • a national reach established by having successfully assessed and permitted hundreds of projects in jurisdictions across the United States.
This segment, which is primarily based on a fixed price and, for out-of-scope work, a T&M revenue model, generated approximately 32.2% of our revenue for the fiscal year ended December 31, 2024. Remediation and Reuse .
This segment, which is primarily based on a fixed price and, for out-of-scope work, a T&M revenue model, generated approximately 29.6% of our revenue for the fiscal year ended December 31, 2025. 6 Remediation and Reuse .
These small firms face challenges in expanding offerings or geographic reach given the technical expertise, accreditations and licenses necessary to serve a broad array of clients and industries across geographies and service lines. These dynamics create significant barriers to entry in our industry.
These small firms face challenges in expanding offerings or geographic reach given the technical expertise, accreditations and licenses necessary to serve a broad array of clients and industries across geographies and service lines.
See Item 1A. “Risk Factors.” For the fiscal year ended December 31, 2024, 53.3% of our revenue came from customers engaging us to provide more than one service, an increase of 2.3 percentage points from the 51.0% we generated from customers buying more 9 than one service in the fiscal year ended December 31, 2023.
See Item 1A. “Risk Factors.” For the fiscal year ended December 31, 2025, 62.1% of our revenue came from customers engaging us to provide more than one service, an increase of 8.8 percentage points from the 53.3% we generated from customers buying more than one service in the fiscal year ended December 31, 2024.
We believe this segment’s competitive advantages include: • strong brands; • advanced technologies and our owned and licensed intellectual property portfolio, such as our patented water treatment systems and proprietary process to optimize the generation of renewable energy from waste; • a team with industry-leading experts and several patent-generating scientists; and • local expertise and capabilities with respect to unique soil, sediment and water table characteristics and contamination types.
We believe this segment’s competitive advantages include: • advanced technologies and our owned and licensed intellectual property portfolio, such as our patented water treatment systems; • a team with industry-leading experts and several patent-generating scientists; and • local expertise and capabilities with respect to unique soil, sediment and water table characteristics and contamination types.
As clients increasingly prioritize environmental solutions to mitigate their impact on the environment, we believe they place a high value on environmental solutions providers that offer scale, advanced technology and comprehensive service capabilities.
These dynamics create significant barriers to entry in our industry. 5 As clients increasingly prioritize environmental solutions to mitigate their impact on the environment, we believe they place a high value on environmental solutions providers that offer scale, advanced technology and comprehensive service capabilities.
Our carefully designed and comprehensive compensation package is a key element of our talent retention strategy. We strive to maintain a fair and equitable compensation program for comparable roles, experiences, and performance, regardless of employee’s race, ethnicity, gender, sexual orientation, or other personal characteristics. We also have incentive plans in place to reward division and employee performance with cash bonuses.
Our carefully designed and comprehensive compensation package is another key element of our talent retention strategy. We strive to maintain a fair and equitable compensation program for comparable roles, experiences, and performance, regardless of employee’s race, ethnicity, gender, sexual orientation, or other personal characteristics.
Differentiated Technology, Processes and Applications Advanced technology, innovative processes, and applications are key competitive advantages in the environmental services industry. Our team of industry leaders plays a vital role in driving our investments in differentiated services.
This table illustrates a summary of our segments as of December 31, 2025: Differentiated Technology, Processes and Applications Advanced technology, innovative processes, and applications are key competitive advantages in the environmental services industry. Our team of industry leaders plays a vital role in driving our investments in differentiated services.
We serve a diversified client base in both the private and public sectors, with the vast majority of revenue being generated from clients in the private sector. Our largest client represented approximately 4.6% of revenue for fiscal year ended December 31, 2024, with these revenues derived from over 14 separate projects.
We serve a diversified client base in both the private and public sectors, with the vast majority of revenue being generated from clients in the private sector. Our largest client represented approximately 17.8% of revenue for fiscal year ended December 31, 2025, with these revenues derived from over 285 separate projects, which included a large emergency response event.
Funding for our services is typically non-discretionary given regulatory drivers and public health concerns. As a result, our business is positioned to be less susceptible to political and economic cycles. Our client activities can occur at different times for different industries, regardless of economic cycles.
Funding for our services is typically non-discretionary given regulatory drivers and public health concerns. As a result, our business is positioned to be less susceptible to political and economic cycles.
We have expanded our relationships with our existing customer base with our vertically integrated business model. Our maturing client relationships coupled with our integrated structure across all our business lines has increased the level of client engagement.
We have expanded our relationships with our existing customer base with our vertically integrated business model. Our maturing client relationships coupled with our integrated structure across all our business lines has increased the level of client engagement. Contracts Our client contracts are fixed price, including milestone-based fixed price contracts, and T&M based.
Although we are temporarily slowing our cadence of consummating acquisitions, it remains a core part of our growth strategy. 8 Since January 1, 2022 we have acquired the following businesses: Acquired Business Date of Acquisition Segment Location 2024 Acquisitions Epic Environmental Pty Ltd (Epic) January 31, 2024 Remediation and Reuse Brisbane, Australia Two Dot Consulting, LLC (2DOT) February 29, 2024 Remediation and Reuse Denver, Colorado Engineering & Technical Associates, Inc.
Since January 1, 2023 we have acquired the following businesses: Acquired Business Date of Acquisition Segment Location 2024 Acquisitions Epic Environmental Pty Ltd (Epic) January 31, 2024 Remediation and Reuse Brisbane, Australia Two Dot Consulting, LLC (2DOT) February 29, 2024 Remediation and Reuse Denver, Colorado Engineering & Technical Associates, Inc.
This segment, which is primarily based on a fixed price and, for out-of-scope work, a T&M revenue model, generated approximately 36.9% of our revenue for the fiscal year ended December 31, 2024 primarily through project-based work. 7 This table illustrates a summary of our segments.
This segment, which is primarily based on a fixed price, including milestone-based fixed price contracts, and, for out-of-scope work, a T&M revenue model, generated approximately 33.4% of our revenue for the fiscal year ended December 31, 2025 primarily through project-based work.
We seek to acquire businesses at disciplined valuation levels that: • are led by high quality scientists and management teams, • expand our portfolio of services, • provide access to differentiated technologies or processes, and • extend our geographic coverage. We have personnel specifically dedicated to identifying acquisition targets, exploring acquisition opportunities, negotiating terms and overseeing acquisition and post-acquisition integration.
We seek to acquire businesses at disciplined valuation levels that: • are led by high quality scientists and management teams, 7 • expand our portfolio of services, • provide access to differentiated technologies or processes, and • extend our geographic coverage.
Our in-house acquisition team has established extensive relationships throughout the industry and maintains and regularly re-evaluates a pipeline of potential acquisition opportunities, largely driven by word of mouth and personal introductions.
We have personnel specifically dedicated to identifying acquisition targets, exploring acquisition opportunities, negotiating terms and overseeing acquisition and post-acquisition integration. Our in-house acquisition team has established extensive relationships throughout the industry and maintains and regularly re-evaluates a pipeline of potential acquisition opportunities, largely driven by word of mouth and personal introductions.
We have continued to improve our talent retention efforts by incorporating talent retention metrics into business leaders' annual incentive plans, expanding our existing mentorship programs to facilitate knowledge transfer, offering ongoing professional development opportunities with our Montrose Leadership Excellence (MLE) program and Montrose Sales Leadership Development Program (MSLDP), and supporting flexible work arrangements to support unique situations and work-life balance.
We continue to strengthen our talent retention efforts by incorporating talent retention metrics into business leaders' annual incentive plans, expanding our existing mentorship programs to facilitate knowledge transfer, offering ongoing professional development opportunities with our Montrose Leadership Excellence program and Montrose Sales Leadership Development Program, and supporting flexible work arrangements to accommodate unique situations and promote work-life balance. 10 Health and Safety The health and safety of our employees is part of our culture and supported by a dedicated team of health and safety professionals.
According to EBI, this $540.0 billion U.S. environmental market is expected to grow at a CAGR of 3.8% per year from 2025 through 2026, up from its previous forecast of 3.6% per year from 2024 through 2026.
According to EBI, this $620.0 billion U.S. environmental market is expected to grow at a CAGR of approximately 4.0% per year from 2026 through 2028.
In total, our research and development team has been awarded 24 patents. Our research and development team continued to innovate in the following areas: water treatment, particularly PFAS and selenium removal, PFAS destruction, PFAS testing, foam fractionation, vapor treatment and removal, wastewater treatment, CO 2 capture, and resource recovery.
Our research and development team continued to innovate in the following areas: water treatment, particularly PFAS and selenium removal, PFAS destruction, PFAS testing, foam fractionation, vapor treatment and removal, wastewater treatment, resource recovery, soil vapor sampling, capture and measurement of methane and other gaseous emissions, and enhanced biological treatment.
By focusing solely on environmental solutions, we believe we are uniquely positioned to become a leading platform in the environmental industry.
Examples of our services include: Our industry is highly fragmented with no single market leader. By focusing solely on environmental solutions, we believe we are uniquely positioned to become a leading platform in the environmental industry.
Clients generating approximately 96.0% of revenue in the fiscal year ended December 31, 2023 repeated in the fiscal year ended December 31, 2024. Our financial success is driven by both strong organic and acquisition-driven growth, and as a result, our total revenue has grown at a compounded annual growth rate of 24.4% since 2019.
Our financial success is driven by both strong organic and acquisition-driven growth, and as a result, our total revenue has grown at a compounded annual growth rate of 20.4% since 2020.
We also encourage our employees to obtain professional licenses and certifications to stay current in their fields. Employee Retention and Rewards We recognize that high-potential and high-performing employees seek meaningful career growth in impactful organizations; this, in turn, helps foster a sense of belonging and supports overall employee retention.
Employee Retention and Rewards We recognize that high-potential and high-performing employees seek meaningful career growth in impactful organizations; this, in turn, helps foster a sense of belonging and supports overall employee retention. Our business managers engage directly with employees to identify career aspirations, establish goals and action plans for achieving those goals, and support professional development.
As we continue to grow and expand into new geographies and service lines, quarterly variability in our Measurement and Analysis and Remediation and Reuse segments may deviate from historical trends. Human Capital Resources Our employees are our most valuable asset and are committed to innovation and providing exceptional service to our clients.
As we continue to grow and expand into new geographies and service lines, quarterly variability in our Measurement and Analysis and Remediation and Reuse segments may deviate from historical trends. Human Capital Resources As of December 31, 2025, we had approximately 3,500 employees (which includes permanent and temporary full-time and part-time personnel).
Item 1. Bu siness. Since our inception in 2012, our mission has been to help clients and communities meet their environmental goals and needs.
Item 1. Bu siness. Since our inception in 2012, our mission has been to help clients and communities meet their environmental goals and needs. We service complex and often non-discretionary environmental needs of our diverse clients across our three business segments: Assessment, Permitting and Response; Measurement and Analysis; and Remediation and Reuse.
Our offerings include source and ambient air testing and monitoring, leak detection, and advanced multi-media laboratory services, including air, soil, stormwater, wastewater and drinking water analysis.
Our highly credentialed teams test and analyze air, water and soil to determine concentrations of contaminants, as well as the toxicological impact of contaminants on flora, fauna and human health. Our offerings include source and ambient air testing and monitoring, leak detection, and advanced multi-media laboratory services, including air, soil, stormwater, wastewater and drinking water analysis.
Approximately 241 of our employees, including engineers, scientists and consultants, provide these services to assist our clients in designing solutions, managing products and mitigating environmental risks and liabilities at their locations.
Our Remediation and Reuse segment provides clients with engineering, design, and implementation services, primarily treatment technologies that treat contaminated water and remove contaminants from soil. Our employees, including engineers, scientists and consultants, provide these services to assist our clients in designing solutions, managing products and mitigating environmental risks and liabilities at their locations.
Ms. 13 Afsari earned her Juris Doctorate from the University of California at Los Angeles and a dual Bachelor of Arts degree in Economics and Psychology from the University of California at Berkeley. Jose M. Revuelta, 43 – Mr.
Afsari earned her Juris Doctorate from the University of California at Los Angeles and a dual Bachelor of Arts degree in Economics and Psychology from the University of California at Berkeley. James Laws , 46 – Mr. Laws joined Montrose as our Chief Operating Officer in January 2026. Mr. Laws has 25 years of experience in the environmental industry.
Global Environmental Industry is Large and Growing According to EBI and research commissioned by Montrose, as of 2024 the global environmental industry is estimated to generate approximately $1.6 trillion in revenues, with $540.0 billion concentrated in the United States.
Federal, state, provincial and local environmental regulations dictate compliance requirements that create demand for environmental services. Global Environmental Industry is Large and Growing According to the 2025 Environmental Industry Study prepared by EBI, the global environmental industry is estimated to generate approximately $1.9 trillion in revenues in 2026, with $620.0 billion concentrated in the United States.
Contracts Our client contracts are generally fixed price, including milestone-based fixed price contracts in our Remediation and Reuse segment, and, for out-of-scope work, T&M based. Our Assessment, Permitting and Response client contracts are generally T&M based. Our client contracts vary from purchase-order based contracts utilizing standard terms and conditions to comprehensive master services agreements with terms of multiple years.
See ‘Segments’ above for a discussion of how these contracts relate to each business segment. Our client contracts vary from purchase-order based contracts utilizing standard terms and conditions to comprehensive master services agreements with terms of multiple years.
We regularly review and update our training and development programs based on employee feedback and industry advancements with a goal of improving and evolving our programs. Beyond our in-house training, we also offer other avenues for continued learning, including mentoring, on-the-job training, external training courses, and tuition reimbursement.
These programs provide the essential resources our teams need to succeed and thrive. We regularly review and update our training and development programs based on employee feedback and industry advancements with a goal of improving and evolving our programs.
A third party occupational medical provider is available to employees 24/7/365 to provide full access to discuss occupational health and safety concerns. Finally, all of our employees have complete stop work authority and can stop any project or task if there is any concern about a safety issue without any fear of retribution.
Our health and safety team meets regularly to review performance and identify areas for improvement to strengthen our health and safety management system. Finally, all of our employees have stop-work authority and can halt any project or task if they have concerns about a safety issue, without fear of retribution.
(Matrix) June 1, 2023 Remediation and Reuse Calgary, Canada Vandrensning ApS. (Vandrensning) July 31, 2023 Remediation and Reuse Copenhagen, Denmark 2022 Acquisitions Environmental Standards, Inc. (Environmental Standards) January 31, 2022 Assessment, Permitting and Response Valley Forge, PA Industrial Automation Group, Inc. (IAG) January 31, 2022 Remediation and Reuse Atlanta, GA TriAD Environmental Consultants, Inc.
(Matrix) June 1, 2023 Remediation and Reuse Calgary, Canada Vandrensning ApS. (Vandrensning) (1) July 31, 2023 Remediation and Reuse Copenhagen, Denmark (1) Business was disposed of in 2025.
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According to data derived from a 2024 Environmental Industry Study prepared by Environmental Business International, Inc., or EBI, which we commissioned and update annually, the global environmental industry is estimated to be approximately $1.6 trillion, with $540.0 billion concentrated in the United States.
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Our client activities can occur at different times for different industries, regardless of economic cycles. 4 Clients generating approximately 96% of revenue in the fiscal year ended December 31, 2024 repeated in the fiscal year ended December 31, 2025.
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We service complex and often non-discretionary environmental needs of our diverse clients across our three business segments: Assessment, Permitting and Response; Measurement and Analysis; and Remediation and Reuse. Examples of our services include: Our industry is highly fragmented with no single market leader.
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In total, our research and development team has been awarded 31 patents.
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Our environmental focus and reputation have enabled us to attract and retain some of the most highly sought-after employees in our industry. These employees have contributed to our organic growth, differentiated brand, reputation and culture.
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Although we did not consummate any acquisitions in 2025, acquisitions remain a core component of our long-term growth strategy.
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Federal, state, provincial and local environmental regulations dictate compliance requirements that create demand for environmental services. Increasingly, public and stockholder interest in environmental sustainability are also driving prudent management of our shared and finite environmental resources.
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Approximately 2,650 employees, or 76%, of our workforce, are based in the U.S., with the remaining employees based in Canada (approximately 730) and Australia (approximately 120). None of our facilities are covered by collective bargaining agreements. 9 We invest in our employees’ success by implementing people-centric strategies focused on engagement, training and development, and retention.
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Supported by approximately 1,210 employees across 6 the US and Canada, our highly credentialed teams test and analyze air, water and soil to determine concentrations of contaminants, as well as the toxicological impact of contaminants on flora, fauna and human health.
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We strive to protect the health and safety of our people, integrating safety into our daily operations. Employee Engagement We believe that employee engagement is critical to fostering a positive work culture. In late 2024, we launched a company-wide employee engagement survey designed to understand and improve our workplace culture.
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Our Remediation and Reuse segment provides clients with engineering, design, and implementation services, primarily treatment technologies that treat contaminated water, remove contaminants from soil or create renewable energy from waste.
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In early 2025, we analyzed the survey results and identified key focus areas for targeted improvement. Action plans were developed and implemented throughout the year that were designed to enhance the employee experience and strengthen our employee value proposition.
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(TriAD) August 1, 2022 Remediation and Reuse Nashville, TN AirKinetics, Inc. (AirKinetics) September 1, 2022 Measurement and Analysis Anaheim, CA Huco Consulting, Inc.
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Our monthly all-employee newsletter serves as an additional communication channel, allowing us to showcase ongoing projects, share key initiatives, and provide updates from human resources and cybersecurity. Employee Training and Development We are dedicated to empowering our employees by supporting skills development and investing in comprehensive training and development programs.
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(Huco) November 30, 2022 Assessment, Permitting and Response Houston, TX We strive to add value to acquired businesses by emphasizing a team-centric culture focused on innovation and investment, expanding career opportunities for new employees from smaller businesses, enhancing front and back-office support to facilitate an enhanced focus on project delivery and growth, providing a larger eco-system of environmental services and capabilities to further client relationships, and implementing award-winning safety programs and operating processes.
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In addition to our in-house training, we also provide various avenues for continued learning, including mentoring, on-the-job training, external training courses, and tuition reimbursement. We also encourage our employees to obtain professional licenses and certifications to stay current in their fields.
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Each business we acquire is systematically integrated into our systems and processes, thereby creating meaningful revenue synergy opportunities and operating leverage.
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Our health and safety management system provides the framework for our health and safety program. Aligned with globally recognized standards, it is designed to promote compliance with health and safety regulations, support risk management and drive improvement. Key pillars include management oversight, well-defined processes, and employee participation, engagement, and empowerment.
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We prioritize fostering a diverse, fair and inclusive workplace that values respect, trust and a sense of belonging. We invest in our employees’ success by implementing people-centric strategies for recruiting, engagement, development, and retention. Our SVP of Human Resources (HR) leads the HR function and is responsible for the development and execution of our human capital strategy.
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We have developed company-wide procedures designed to establish safe work practices. Employees are expected to understand and follow these procedures, while project managers assess and mitigate job hazards throughout a project’s lifecycle using a range of controls, including hazard elimination, administrative controls and personal protective equipment.
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The SVP is supported by a robust HR team, consisting of both corporate-level resources as well as business-specific HR partners. The Board of Director’s Compensation Committee actively oversees our human capital programs, initiatives, and performance and receives regular updates from the SVP of HR .
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Beyond our standard procedures, we are focused on proactively identifying workplace hazards and implementing controls to mitigate the associated risks. Every Montrose employee is required to complete annual health and safety training, reinforcing our attentiveness to workplace safety. Training is tailored to each division’s work activities, better enabling employees to learn about the most relevant risks and mitigation strategies.
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Employees As of December 31, 2024, we had approximately 3,410 employees (which includes full-time, part-time and stand-by environmental emergency response personnel). Approximately 2,560, or 75%, of our employees, work in our U.S. operations and approximately 850 or 25% work in foreign operations. Other than in Sweden, none of our facilities are covered by collective bargaining agreements.
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Beyond training, we actively engage employees in safety matters. Safety is a core topic in our company-wide town halls and business segment all-hands meetings, and employees are encouraged to start meetings with a safety moment. We share timely updates and lessons learned via email or web-based alerts, promoting a proactive safety culture.
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Talent Attraction In 2024, we engaged with over 20 top-tier universities in the United States and Canada. These outreach efforts have strengthened our partnerships with these institutions, allowing us to connect with skilled individuals and identify top talent for both internships and full-time positions. Furthermore, we expanded our workforce in 2024 through six strategic acquisitions.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSome of the more significant risks include: • general global economic, business and other conditions and the cyclical nature of some of our end markets; • the highly competitive nature of our business; • rapidly changing technology and industry and regulatory standards; • our ability to execute on our acquisition strategy and successfully integrate and realize benefits of our acquisitions; • the parts of our business that depend on difficult to predict natural or manmade events; • our work on high profile projects and the risks related thereto; • our ability to maintain necessary accreditations and other authorizations; • significant environmental governmental regulation or de-regulation; • our ability to attract and retain qualified managerial and skilled technical personnel; 14 • safety-related issues; • our ability to expand our client base; and • lack of compliance with prescribed organizational policies and procedures may result in poor performance or suboptimal transactions.
Biggest changeSome of the more significant risks include: • general global economic, business and other conditions, including inflationary and interest rate pressures, the cyclical nature of our industry; • the competitive nature of our business; • our ability to adapt to changing technology, industry standards or regulatory requirements, including emerging environmental, social and governance requirements; • the parts of our business that depend on difficult to predict natural or manmade events and the fluctuations in our revenue and customer concentration as a result thereof; • our ability to attract and retain qualified managerial and skilled technical personnel; • significant environmental governmental regulation or de-regulation; • our ability to execute on our acquisition strategy and successfully integrate and realize benefits from our acquisitions; • our ability to maintain and expand our client base; • safety-related issues; • any failure in or breach of our networks and systems or other forms of cyber-attack; and • our ability to promote and develop our brands; If any of the risks described below actually occurs, our business, financial condition and results of operations could be materially and adversely affected and the trading price of our common stock could decline, causing you to lose all or part of your investment in our common stock.
The discussion of these risks is organized by the following sections: Risks Related to Our Industry and the Broader Economy, Risks Related to Our Acquisition Strategy, Risks Related to the Nature of Our Business, Risks Related to Our Contracts and Revenue Streams, Technology and Privacy Related Risks, Risks Related to Our Indebtedness, Risks Related to Ownership of Our Common Stock, Risks Related to Provisions in Our Charter Documents, and General Risks.
The discussion of these risks is organized by the following sections: Risks Related to Our Industry and the Broader Economy, Risks Related to the Nature of Our Business, Risks Related to Our Acquisition Strategy, Risks Related to Our Contracts and Revenue Streams, Technology and Privacy Related Risks, Risks Related to Our Indebtedness, Risks Related to Ownership of Our Common Stock, Risks Related to Provisions in Our Charter Documents, and General Risks.
Increased regulatory requirements may be more aggressive than any sustainability measures we may be currently undertaking or may implement in the future may cause disruptions in supply chains or an increase in operating and compliance costs.
Increased regulatory requirements may be more aggressive than any sustainability measures we may be currently undertaking or may implement in the future and may cause disruptions in supply chains or an increase in operating and compliance costs.
The threats we face vary from attacks common to most industries, such as ransomware, to more advanced and persistent threats, highly organized adversaries, including nation state actors, which target us and other defense contractors and other companies. These threats can cause disruptions to our business operations.
The threats we face vary from attacks common to most industries, such as ransomware, to more advanced and persistent threats and highly organized adversaries, including nation state actors, which target us and other defense contractors and other companies. These threats can cause disruptions to our business operations.
Others may independently develop similar intellectual property or designed-around ours. Our intellectual property may also be replaced by new technologies to which we have no right of use or can only acquire such use at unreasonable or unsustainable costs.
Others may independently develop similar intellectual property designed around ours. Our intellectual property may also be replaced by new technologies to which we have no right of use or can only acquire such use at unreasonable or unsustainable costs.
If we identify material weaknesses in our internal control over financial reporting or are unable to comply with the requirements of Section 404 or assert that our internal control over financial reporting are effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting or issues an adverse report in the event it is not satisfied with the level at which our controls are documented, designed or operating, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected, and we could become subject to investigations by the SEC or other regulatory authorities, which could require additional financial and management resources.
If we identify material weaknesses in our internal control over financial reporting or are unable to comply with the requirements of Section 404 or assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting or issues an adverse report in the event it is not satisfied with the level at which our controls are documented, designed or operating, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected, and we could become subject to investigations by the SEC or other regulatory authorities, which could require additional financial and management resources.
We have a limited history in offering products and designing and building systems as compared to the services we offer, and this expansion subjects us to new and different risks generally associated with offering products manufactured by third parties, including but not limited to: 23 • production difficulties of third-party manufacturers, including problems involving changes in their production capacity and yields, quality control and assurance, component supply and shortages of qualified personnel; • failure to establish or maintain supplier relationships; • supply chain issues of third-party manufacturers and the failure of suppliers to produce components to specification or supply us with a sufficient amount or adequate quality of materials; • increases in the cost of raw materials, components or the overall cost of production passed to us; • failure to adequately design new or improved products or respond to changing regulatory requirements; • use of defective materials or workmanship in the manufacturing process; • improper use of our products; • failure to satisfy any warranty or performance guarantee; • product liability claims; and • lack of market acceptance, delays in product development and failure of products to operate properly.
We have a limited history in offering products and designing and building systems as compared to the services we offer, and this expansion subjects us to new and different risks generally associated with offering products manufactured by third parties, including but not limited to: • production difficulties of third-party manufacturers, including problems involving changes in their production capacity and yields, quality control and assurance, component supply and shortages of qualified personnel; • failure to establish or maintain supplier relationships; • supply chain issues of third-party manufacturers and the failure of suppliers to produce components to specification or supply us with a sufficient amount or adequate quality of materials; • increases in the cost of raw materials, components or the overall cost of production passed to us; • failure to adequately design new or improved products or respond to changing regulatory requirements; • use of defective materials or workmanship in the manufacturing process; • improper use of our products; • failure to satisfy any warranty or performance guarantee; • product liability claims; and • lack of market acceptance, delays in product development and failure of products to operate properly.
Our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum for any stockholder (including any beneficial owner) to bring (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or employees to us or to our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL or our certificate of incorporation or bylaws or (iv) any action asserting a claim governed by the internal affairs doctrine, is a state court located within the State of Delaware (or, if no state court located within the State of Delaware has jurisdiction or declines to accept jurisdiction, the federal district court 33 for the District of Delaware); in all cases subject to such court having personal jurisdiction over the indispensable parties named as defendants.
Our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum for any stockholder (including any beneficial owner) to bring (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or employees to us or to our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL or our certificate of incorporation or bylaws or (iv) any action asserting a claim governed by the internal affairs doctrine, is a state court located within the State of Delaware (or, if no state court located within the State of Delaware has jurisdiction or declines to accept jurisdiction, the federal district court for the District of Delaware); in all cases subject to such court having personal jurisdiction over the indispensable parties named as defendants.
Additionally, to the extent our clients draw regulatory or media scrutiny regarding their environmental impact or other areas where we may provide services to them, we may as a consequence also draw scrutiny. We are also investing more in brand development and there can be no assurances that this investment will generate additional revenues or business.
Additionally, to the extent our clients draw regulatory or media scrutiny regarding their environmental impact or other areas where we may provide services to them, we may as a consequence also draw scrutiny. We are also investing more in brand development and brand consolidation and there can be no assurances that this investment will generate additional revenues or business.
Our independent registered public accounting firm is required to formally attest to the effectiveness of our internal control over financial reporting. To comply with the requirements of being a public company, we have undertaken and may need to undertake in the future various actions, such as implementing additional internal controls and procedures and hiring additional accounting or internal audit staff.
Our independent registered public accounting firm is required to formally attest to the effectiveness of our internal control over financial reporting. 33 To comply with the requirements of being a public company, we have undertaken and may need to undertake in the future various actions, such as implementing additional internal controls and procedures and hiring additional accounting or internal audit staff.
Liabilities related to contamination or violations of these laws and regulations could result in material costs to us, including clean-up costs, fines, civil or criminal sanctions and third-party claims for property damage or personal injury, any of which could have a material adverse effect on our business, financial condition and results of operations.
Liabilities related to contamination or violations of these laws and regulations could result in material costs to us, including clean-up costs, fines, civil or criminal sanctions and third-party claims for property damage 20 or personal injury, any of which could have a material adverse effect on our business, financial condition and results of operations.
Failure to maintain effective controls and procedures and comply with Section 404 could also delay or otherwise adversely affect our 38 ability to timely produce accurate financial statements and related information, which could restrict our access to capital markets and cause the price of our common stock to fall. Item 1B. Unresolved Staff Comments. None.
Failure to maintain effective controls and procedures and comply with Section 404 could also delay or otherwise adversely affect our ability to timely produce accurate financial statements and related information, which could restrict our access to capital markets and cause the price of our common stock to fall. Item 1B. Unresolved Staff Comments. None.
If we fail to secure or maintain any such authorizations, or if the relevant bodies place burdensome restrictions or limitations on our ability to obtain or maintain the necessary authorizations, we may not be able to operate in one 19 or more jurisdictions and our business, financial condition and results of operations may be materially adversely affected as a result.
If we fail to secure or maintain any such authorizations, or if the relevant bodies place burdensome restrictions or limitations on our ability to obtain or maintain the necessary authorizations, we may not be able to operate in one or more jurisdictions and our business, financial condition and results of operations may be materially adversely affected as a result.
Our contracts typically include provisions to limit our exposure to legal claims relating to our services, but these provisions may not protect us or may not be enforceable in all cases. Further, we maintain professional liability insurance and such other coverage as we believe appropriate based on our experience to date, this coverage may prove insufficient.
Our contracts typically include provisions to limit our exposure to legal claims relating to our services, but these provisions may not protect us or may 18 not be enforceable in all cases. Further, we maintain professional liability insurance and such other coverage as we believe appropriate based on our experience to date, and this coverage may prove insufficient.
Further, our use of contractual provisions, confidentiality procedures and agreements and other registrations may not be sufficient to protect our intellectual property rights, these protective measures may be circumvented or our rights may be misappropriated, disparaged, diluted or stolen, particularly in countries where intellectual property rights laws are not highly developed, protected or enforced.
Further, our use of contractual provisions, confidentiality procedures and agreements and other registrations may not be sufficient to protect our intellectual property 31 rights, these protective measures may be circumvented or our rights may be misappropriated, disparaged, diluted or stolen, particularly in countries where intellectual property rights laws are not highly developed, protected or enforced.
The loss of the services of one or more members of our management team or of qualified employees and other key personnel, or the 20 inability to identify, hire and retain the key personnel that may be necessary to grow our business, could have a material adverse effect on our business, financial condition and results of operations.
The loss of the services of one or more members of our management team or of qualified employees and other key personnel, or the inability to identify, hire and retain the key personnel that may be necessary to grow our business, could have a material adverse effect on our business, financial condition and results of operations.
If we are unable to address the changing needs of our clients in a timely manner, or at all, demand for our services may decrease, which would have a material adverse effect on our financial condition, results of operations and liquidity.
If we are unable to address the changing needs of our clients in a timely manner, or at all, demand for our services may decrease, which would have a material adverse effect on our business, financial condition, results of operations and liquidity.
If we are unable to develop or, in the event of a disaster or emergency, successfully execute on, adequate plans to ensure that our business functions continue to operate during and after a disaster, our business, results of operations, financial condition and reputation would be harmed.
If we are unable to develop or, in the event of a disaster or emergency, successfully execute on, adequate plans to ensure that our business functions continue to operate during and after a disaster, our business, financial condition and results of operations would be harmed.
However, demand for our services is uncertain, and there can be no assurance that clients will purchase our offerings, or that we will be able to continually expand our client base within existing geographies or into new geographies, whether we expand organically or through acquisition.
However, demand for our services is uncertain, and there can be no assurance that clients will purchase our offerings, or that we will be able to maintain or continually expand our client base within existing geographies or into new geographies, whether we expand organically or through acquisition.
Expanding our client base is also subject to external factors, many of which are beyond our control, including the overall demand for the services we offer, the actions of our competitors and the finite number of prospective clients in a given market.
Maintaining and expanding our client base is also subject to external factors, many of which are beyond our control, including the overall demand for the services we offer, the actions of our competitors and the finite number of prospective clients in a given market.
Risks Related to the Nature of Our Business Parts of our business may depend on certain natural or manmade events which are impossible to predict, and our revenue and customer concentration resulting from these businesses may fluctuate significantly based on the frequency and scale of these events.
Risks Related to the Nature of Our Business Parts of our business may depend on certain natural or manmade events which are impossible to predict, and our revenue and customer concentration resulting from these businesses has and may fluctuate significantly based on the frequency and scale of these events.
Moreover, depending on the severity of an incident, our customers’ data, our employees’ data, our intellectual property (including trade secrets and research, development, and engineering know-how), and other third-party data (such as subcontractors, suppliers and vendors) could be compromised.
Moreover, depending on the severity of an incident, our customers’ data, our 24 employees’ data, our intellectual property (including trade secrets and research, development, and engineering know-how), and other third-party data (such as subcontractors, suppliers and vendors) could be compromised.
Any claim that we have misappropriated the intellectual property of others, whether or not valid, could have a material adverse effect on our business, financial condition and results of operations. 36 Legal and regulatory claims and proceedings could have a material adverse effect on us.
Any claim that we have misappropriated the intellectual property of others, whether or not valid, could have a material adverse effect on our business, financial condition and results of operations. Legal and regulatory claims and proceedings could have a material adverse effect on us.
We experience seasonal demand with respect to certain of the services we provide, particularly in our Measurement and Analysis segment, and, following the acquisition of Matrix in Canada, the Remediation and Reuse 24 segment, as demand for those services can follow weather trends.
We experience seasonal demand with respect to certain of the services we provide, particularly in our Measurement and Analysis segment, and, following the acquisition of Matrix in Canada, the Remediation and Reuse segment, as demand for those services can follow weather trends.
If we fail to increase our revenue to offset the increases in our operating expenses, we may not achieve or sustain profitability in the future. We may not be successful in promoting and further developing our brands, which could adversely affect our business.
If we fail to increase our revenue to offset the increases in our operating expenses, we may not achieve or sustain profitability in the future. 30 We may not be successful in promoting and further developing our brands, which could adversely affect our business.
We have a limited operating history as a company and, as a result, the Montrose Environmental brand is not fully established, although many of the brands we use, including those acquired through our acquisition activity, have a longer and more well-established history.
We have a limited operating history as a company and, as a result, the Montrose brand is not fully established, although many of the brands we use, including those acquired through our acquisition activity, have a longer and more well-established history.
The exercise by any governmental entity 26 of one or more of these rights under its agreements with us could have a material adverse effect on our business, financial condition and results of operations.
The exercise by any governmental entity of one or more of these rights under its agreements with us could have a material adverse effect on our business, financial condition and results of operations.
Our future growth rate depends upon our ability to compete successfully, which is impacted by a number of factors, including our ability to identify emerging technological trends in our target end markets, develop and maintain a wide range of competitive and appropriately priced services and solutions, defend our market share against competitors, including new and non-traditional competitors, expand into new markets and attract, develop and retain individuals with the requisite technical expertise and understanding of clients’ needs to develop and sell new services.
Our future growth rate depends upon our ability to compete successfully, which is impacted by a number of factors, including our ability to identify emerging technology trends in our target end markets, develop and maintain a wide range of competitive and appropriately priced services and solutions, defend our market share against competitors, including new and non-traditional competitors, expand into new markets and attract, develop and retain individuals with the requisite technical expertise and understanding of clients’ needs to develop and sell new services.
We may find it difficult or costly to update our services and to develop new services quickly enough to work effectively with new or changed technologies, to keep the pace with evolving industry standards or to meet our clients’ needs.
We may find it difficult or costly to update our services and to develop new services quickly enough to work effectively with new or changed technologies, to keep pace with evolving industry standards or to meet our clients’ needs.
We rely on a combination of patents, trademarks, trade names, confidentiality and nondisclosure clauses and agreements and other unregistered rights to define and protect our rights to our brand and the intellectual property used in our business.
We rely on a combination of patents, trademarks, trade names, trade secrets, confidentiality and nondisclosure clauses and agreements and other unregistered rights to define and protect our rights to our brand and the intellectual property used in our business.
For certain of our businesses, there may be a limited number of qualified people to fulfill roles in such businesses, particularly given the recent competition in the job market.
For certain of 16 our businesses, there may be a limited number of qualified people to fulfill roles in such businesses, particularly given the recent competition in the job market.
Any failure by us to compete or to generally maintain and improve our competitive position could have a material adverse effect on our business, financial condition and results of operations. If we are unable to develop successful new services or adapt to rapidly changing technology and industry standards or changes to regulatory requirements, our business could be harmed.
Any failure by us to compete or to generally maintain and improve our competitive position could have a material adverse effect on our business, financial condition and results of operations. 14 If we are unable to develop successful new services or technologies or adapt to rapidly changing technology and industry standards or changes to regulatory requirements, our business could be harmed.
In addition, our 2021 Credit Facility includes, and other debt instruments we may enter into in the future may include, provisions entitling the lenders to demand immediate repayment of all borrowings upon the occurrence of certain change of control events relating to our company, which also could discourage, delay or prevent a business combination transaction.
In addition, our 2025 Credit Facility includes, and other debt instruments we may enter into in the future may include, provisions entitling the lenders to demand immediate repayment of all borrowings upon the occurrence of certain change of control events relating to our company, which also could discourage, delay or prevent a business combination transaction.
Our margins, and therefore our profitability, is largely a function of the rates we are able to charge for our services and the costs incurred to provide such services.
Our margins, and therefore our profitability, are largely a function of the rates we are able to charge for our services and the costs incurred to provide such services.
Some of the factors that could negatively affect the market price of our common stock or result in significant fluctuations in price, regardless of our actual operating performance, include: • actual or anticipated variations in our quarterly operating results; • changes in market valuations of similar companies; • changes in the markets in which we operate; • additions or departures of key personnel; • actions by stockholders, including sales of large blocks of our common stock; • short selling of our common stock or related derivative securities or hedging activities; • general market, economic and political conditions, including an economic slowdown; • changes to the regulatory and legal landscape that drives a portion of our revenue; • the continuation of an active trading market in our common stock or any significant volatility in the liquidity of that market; • speculation in the press or investment community; • inflation and changes in interest rates; • our operating performance and the performance of other similar companies; • our ability to accurately project future results and our ability to achieve those or meet the expectations of other industry and analyst forecasts; and • new legislation or other political or regulatory developments that adversely affect us, our markets or our industry.
Some of the factors that could negatively affect the market price of our common stock or result in significant fluctuations in price, regardless of our actual operating performance, include: • actual or anticipated variations in our quarterly operating results; • changes in market valuations of similar companies; • changes in the markets in which we operate; • additions or departures of key personnel; • actions by stockholders, including sales of large blocks of our common stock or sales of common stock by any of our officer or directors; • short selling of our common stock or related derivative securities or hedging activities; • general market, economic and political conditions, including an economic slowdown, inflation or changes in interest rates; • changes to the regulatory and legal landscape that drives a portion of our revenue; • any significant volatility in the liquidity of the trading market for our common stock; • speculation in the press or investment community; • our operating performance and the performance of other similar companies; • our ability to accurately project future results and our ability to achieve those or meet the expectations of other industry and analyst forecasts; and • new legislation or other political or regulatory developments that adversely affect us, our markets or our industry.
Rapid and/or important changes in current regulations or less stringent enforcement of regulation may in the future have a significant adverse effect on our business, financial position and results of operations. Federal and state, provincial legislatures may review and consider legislation that could impact our business and our industry.
Rapid and/or important changes in current regulations or less stringent enforcement of regulations may in the future have a significant adverse effect on our business, financial position and results of operations. Federal, state, provincial, and local legislatures may review and consider legislation that could impact our business and our industry.
In addition, as we increase the number of our technical personnel and execute both our strategy for growth, we may not be able to manage a significantly larger workforce, control our costs or improve our efficiency. 34 We have a history of losses and may not be able to achieve or sustain profitability in the future.
In addition, as we increase the number of our technical personnel and execute our strategy for growth, we may not be able to manage a significantly larger workforce, control our costs or improve our efficiency. We have a history of losses and may not be able to achieve or sustain profitability in the future.
The market for our services is characterized by rapid technological change and evolving industry standards and, to a lesser extent, changing regulatory requirements. This constant evolution may reduce the effectiveness of or demand for our services or render them noncompetitive or obsolete.
The market for our services, including technologies, is characterized by rapid technological change and evolving industry standards and, to a lesser extent, changing regulatory requirements. This constant evolution may reduce the effectiveness of or demand for our services or render them noncompetitive or obsolete.
A failure or perceived failure to meet our goals and targets or to satisfy various reporting standards with respect to these matters could negatively impact our reputation, our ability to attract or retain employees, and our attractiveness as an investment, business partner, or as an acquirer could be negatively impacted.
Our pursuit of or a failure or perceived failure to meet our goals and targets or to satisfy various reporting standards with respect to these matters could negatively impact our reputation and our ability to attract or retain employees, and our attractiveness as an investment, business partner, or as an acquirer could be negatively impacted.
Maintaining and improving our competitive position will require successful management of these factors, including continued investment by us in research and development, sales, marketing, technology, customer service and support, personnel and our professional networks.
Maintaining and improving our competitive position will require successful management of these factors, including continued investment in research and development, sales, marketing, technology, customer service and support, personnel and our professional networks.
This scrutiny and demand could require additional transparency, due diligence and reporting, or lead to scrutiny for such practices, and could cause us to incur additional costs or to make changes to our operations to comply with these demands.
This scrutiny and demand could require additional transparency, due diligence and reporting, or lead to scrutiny of such practices, and could cause us to incur additional costs or to make changes to our operations to comply with these demands.
For example, our amended and restated certificate of incorporation and amended and restated bylaws include provisions that: • permit us to issue, without stockholder approval, preferred stock in one or more series and, with respect to each series, fix the number of shares constituting the series and the designation of the series, the voting powers, if any, of the shares of the series and the preferences and other special rights, if any, and any qualifications, limitations or restrictions, of the shares of the series; • prevent stockholders from acting by written consent; • limit the ability of stockholders to amend our certificate of incorporation and bylaws; • require advance notice for nominations for election to the board of directors and for stockholder proposals; • do not permit cumulative voting in the election of our directors, which means that the holders of a majority of our common stock may elect all of the directors standing for election; and • establish a classified board of directors with staggered three-year terms.
For example, our amended and restated certificate of incorporation and amended and restated bylaws include provisions that: • permit us to issue, without stockholder approval, preferred stock in one or more series and, with respect to each series, fix the number of shares constituting the series and the designation of the series, the voting powers, if any, of the shares of the series and the preferences and other special rights, if any, and any qualifications, limitations or restrictions, of the shares of the series; • prevent stockholders from acting by written consent; • limit the ability of stockholders to amend our certificate of incorporation and bylaws; • require advance notice for nominations for election to the board of directors and for stockholder proposals; and • do not permit cumulative voting in the election of our directors, which means that the holders of a majority of our common stock may elect all of the directors standing for election.
See Notes 13 and 22 to our audited consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data." Despite our current level of indebtedness, we may incur more debt. We may be able to incur significant additional indebtedness in the future. For example, we may incur additional indebtedness in connection with future acquisitions.
See Note 13 to our audited consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data." Despite our current level of indebtedness, we may incur more debt. We may be able to incur significant additional indebtedness in the future. For example, we may incur additional indebtedness in connection with future acquisitions.
See Notes 13 and 22 to our audited consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data." We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.
See Note 13 to our audited consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data." We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.
There is no way for us to predict the occurrence of these events, nor the significance, duration or outcome of the events. As a result, this segment may experience revenues one year that are not indicative of future results due to the occurrence of an incident that was neither typical nor predictable.
There is no way for us to predict the occurrence of these events, nor the significance, duration or outcome of the events. As a result, this segment may realize revenues one period that are not indicative of future results due to the occurrence of an incident that was neither typical nor predictable.
If we fail to successfully maintain and continue to grow the Montrose Environmental brand and our other brands through promotion and other efforts, incur excessive unanticipated expenses in attempting to promote and maintain our brands, or lose clients as a result, our business, financial condition and results of operations may be adversely affected.
If we fail to successfully maintain and continue to grow our brands through promotion and other efforts, incur excessive unanticipated expenses in attempting to promote and maintain our brands, or lose clients as a result, our business, financial condition and results of operations may be adversely affected.
Strengthening our brand will require significant time, expense and the attention of management, and any success will depend largely on our marketing efforts and ability to provide our clients with high-quality services.
Strengthening and consolidating our brands will require significant time, expense and the attention of management, and any success will depend largely on our marketing efforts and ability to provide our clients with high-quality services.
Our efforts to minimize the likelihood and impact of adverse cybersecurity incidents and to protect data and intellectual property may not be successful and our business could be negatively affected by cyber or security threats or other disruptions.
Our efforts to minimize the likelihood and impact of adverse cybersecurity incidents and to protect data and intellectual property may not be successful and our business has in the past been and could be negatively affected by cyber or security threats or other disruptions.
Our industry is highly fragmented and we believe that our future success depends in part on our ability to maintain and further strengthen our core brands, including the Montrose Environmental brand across the diverse range of environmental services that we provide.
Our industry is highly fragmented and we believe that our future success depends in part on our ability to maintain and further strengthen and consolidate our core brands across the diverse range of environmental services that we provide.
Certain of our businesses depend on specific environmental circumstances, including both naturally occurring and manmade events. Our Assessment, Permitting and Response segment, in particular, which includes our environmental emergency response business that engages in response activities following an environmental incident or a natural disaster.
Certain of our businesses depend on specific environmental circumstances, including both naturally occurring and manmade events. Our Assessment, Permitting and Response segment, in particular, which includes our environmental emergency response business that engages in response activities following an environmental incident or a natural disaster, is subject to this uncertainty.
See Notes 13 and 22 to our audited consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data.” 30 Risks Related to Ownership of Our Common Stock The trading price of our common stock has been and may continue to be volatile and could decline substantially.
See Note 13 to our audited consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data.” 27 Risks Related to Ownership of Our Common Stock The trading price of our common stock has been and may continue to be volatile and could decline substantially.
We provide environmental services to clients operating in a number of sectors and industries, including the oil & gas, utilities, local, state, provincial and federal government entities, technical services, industrial manufacturing, transportation, chemicals, renewable energy generation, aerospace, telecommunications and engineering.
We provide environmental services to clients operating in a number of sectors and industries, including but not limited to oil & gas, utilities, local, state, provincial and federal government entities, technical services including engineering, industrial manufacturing, chemicals, transportation, renewable energy generation, and telecommunications.
Any determination to pay dividends to holders of our common stock will be at the discretion of our board of directors and will depend upon many factors, including our financial condition, results of operations, projections, liquidity, earnings, legal requirements, restrictions in our 2021 Credit Facility, the terms of our Series A-2 Preferred Stock, agreements governing any other indebtedness we may enter into and other factors that our board of directors deems relevant.
Any determination to pay dividends to holders of our common stock will be at the discretion of our board of directors and will depend upon many factors, including our financial condition, results of operations, projections, liquidity, earnings, legal requirements, restrictions in our 2025 Credit Facility agreements governing any other indebtedness we may enter into and other factors that our board of directors deems relevant.
Although our 2025 Credit Facility and our Series A-2 Preferred Stock contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and the additional indebtedness incurred in compliance with these restrictions could be substantial. These restrictions also do not prevent us from incurring obligations that do not constitute indebtedness.
Although our 2025 Credit Facility contains restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and the additional indebtedness incurred in compliance with these restrictions could be substantial. These restrictions also do not prevent us from incurring obligations that do not constitute indebtedness.
If we do not adapt to or comply with these and other new regulations or if we are perceived to have not responded appropriately to the growing concern for ESG matters, we may face legal or regulatory actions or the imposition of fines, penalties, or other sanctions and adverse publicity, any of which could materially harm our reputation or have a material adverse effect on our business, financial condition or results of operations.
If we do not adapt to or comply with these and other new regulations or if we are perceived to have not responded appropriately, we may face legal or regulatory actions, including enforcement actions or investigations, or the imposition of fines, penalties, or other sanctions and adverse publicity, any of which could materially harm our reputation or have a material adverse effect on our business, financial condition or results of operations.
If stricter laws or regulations are delayed or are not enacted, are enacted with prolonged phase-in periods, or not enforced, if existing laws and regulations are repealed or amended to be less strict or if a generally less restrictive regulatory framework develops, as is anticipated with the new presidential administration, demand for our services may be reduced.
If stricter laws or regulations are delayed or are not enacted, are enacted with prolonged phase-in periods, or not enforced, if existing laws and regulations are repealed or amended to be less strict or if a generally less restrictive regulatory framework develops, as has been pursued by the current presidential administration, demand for our services may be reduced.
Our global operations subject us to additional risks that could adversely affect our business. We have activities outside of the United States. Our operations, as well as those of our clients, are therefore subject to regulatory, economic, political and other events and uncertainties in countries where these operations are located.
Our global operations subject us to additional risks that could adversely affect our business. We have activities outside of the United States. Our operations, as well as those of our clients, are therefore subject to regulatory, economic, political and other events and uncertainties in countries where these operations are located. Further, our growth strategy includes expansion into additional international markets.
We derive, and expect to continue to derive in the future, revenues from federal, state, provincial or local government clients, which accounted for approximately 16.3% of our revenues for the fiscal year ended December 31, 2024.
We derive, and expect to continue to derive in the future, revenues from federal, state, provincial or local government clients, which accounted for approximately 8.9% of our revenues for the fiscal year ended December 31, 2025.
Some of the risks and uncertainties discussed below may have occurred in the past, and the disclosures below are not representations or warranties as to whether or not any risks or uncertainties have occurred in the past, but are discussed herein because future occurrences of such risks and uncertainties could have a material adverse effect on our business, financial condition and results of operations.
Some of the risks and uncertainties discussed below may have occurred in the past, and the disclosures below are not representations or warranties as to whether or not any risks or uncertainties have occurred in the past, but reflect our beliefs and opinions as to the risks and uncertainties that could have a material adverse effect on our business, financial condition and results of operations in the future.
Our existing and any future indebtedness could have important consequences, including: • making it more difficult for us to make payments on our existing indebtedness; • increasing our vulnerability to general economic and industry conditions; • requiring a substantial portion of our cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness, thereby reducing our ability to use our cash flow to fund our operations, capital expenditures and future business opportunities; • exposing us to the risk of increased interest rates on our borrowings under our 2025 Credit Facility, which is at variable rates of interest; • restricting us from making strategic acquisitions or causing us to make non-strategic divestitures; 28 • limiting our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes; and • limiting our ability to adjust to changing market conditions and placing us at a competitive disadvantage compared to our competitors who are less highly leveraged.
“Financial Statements and Supplementary Data." We also may enter into new borrowing arrangements and incur significant indebtedness in the future to continue to support our organic and acquisition-related growth. 25 Our existing and any future indebtedness could have important consequences, including: • making it more difficult for us to make payments on our existing indebtedness; • increasing our vulnerability to general economic and industry conditions; • requiring a substantial portion of our cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness, thereby reducing our ability to use our cash flow to fund our operations, capital expenditures and future business opportunities; • exposing us to the risk of increased interest rates on our borrowings under our 2025 Credit Facility, which is at variable rates of interest; • restricting us from making strategic acquisitions or causing us to make non-strategic divestitures; • limiting our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes; and • limiting our ability to adjust to changing market conditions and placing us at a competitive disadvantage compared to our competitors who are less highly leveraged.
“Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities—Dividend Policy.” Accordingly, you may need to sell your shares of our common stock to realize a return on your investment, and you may not be able to sell your shares at or above the price you paid for them. 31 Oaktree may have conflicts of interest with other stockholders.
See Item 5. “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities—Dividend Policy.” Accordingly, you may need to sell your shares of our common stock to realize a return on your investment, and you may not be able to sell your shares at or above the price you paid for them.
If we are unable to do so, we may need to reduce or delay our planned capital expenditures or execution of our acquisition strategy, seek additional capital, sell assets or refinance all or a portion of our indebtedness on or before maturity, any of which could materially and adversely affect our future revenue prospects.
If we are unable to do so, we may need to reduce or delay our planned capital expenditures or execution of our acquisition strategy, seek additional capital, sell assets or refinance all or a portion of our indebtedness on or before maturity, any of which could materially and adversely affect our future revenue prospects. 26 Our ability to restructure or refinance our indebtedness will depend on the condition of the capital markets and our financial condition at such time.
These goals and targets reflect our current plans and do not constitute a guarantee that they will be achieved. Our ability to achieve any stated goal or target is subject to numerous factors and conditions, many of which are outside of our control.
We have developed near-term targets and a long-term goal for reducing our GHG emissions. These goals and targets reflect our current plans and do not constitute a guarantee that they will be achieved or maintained. Our ability to achieve any stated goal or target is subject to numerous factors and conditions, many of which are outside of our control.
We experienced net losses in each year since inception, including net losses of $62.3 million and $30.9 million for the fiscal years ended December 31, 2024 and 2023, respectively, and we may incur net losses in the future. As of December 31, 2024, we had an accumulated deficit of $272.7 million.
We experienced net losses in each year since inception, including net losses of $0.8 million and $62.3 million for the fiscal years ended December 31, 2025 and 2024, respectively, and we may incur net losses in the future. As of December 31, 2025, we had an accumulated deficit of $273.5 million.
If our research and development activities are unsuccessful, our technologies and offerings may not keep pace with the market, and we may lose clients and one or more competitive advantages, any of which could have a material adverse effect on our business, financial condition and results of operations. 37 Failure to comply with anti-corruption and similar laws could subject us to penalties and other adverse consequences.
If our research and development activities are unsuccessful, our technologies and offerings may not keep pace with the market, and we may lose clients and one or more competitive advantages, any of which could have a material adverse effect on our business, financial condition and results of operations.
General Data Protection Regulation; • laws and business practices that favor local competitors or prohibit foreign ownership of certain businesses; • potential for privatization and other confiscatory actions; and • other dynamics in international jurisdictions, any of which could result in substantial additional legal or compliance costs, liabilities or obligations for us or could require us to significantly modify our current business practices or even exit a given market. 35 Foreign operations bring increased complexity and the costs of managing or overseeing foreign operations, including adapting and localizing services or systems to specific regions and countries, can be material.
General Data Protection Regulation; • laws and business practices that favor local competitors or prohibit foreign ownership of certain businesses; • potential for privatization and other confiscatory actions; and • other dynamics in international jurisdictions, any of which could result in substantial additional legal or compliance costs, liabilities or obligations for us or could require us to significantly modify our current business practices or even exit a given market.
We cannot, however, predict the extent and severity of any additional future attacks that may occur. 27 Laws and regulations regarding the handling of client confidential data and information may have a negative impact on our business.
We cannot, however, predict the extent and severity of any additional future attacks that may occur. Laws and regulations regarding the handling of client confidential data and information may have a negative impact on our business. Certain aspects of our business rely on the processing of our clients’ confidential data in several jurisdictions and the movement of data across borders.
Pursuant to the 2025 Credit Facility, the Company also has the option to borrow incremental term loans or request an increase in the aggregate commitments under the revolving credit facility up to an aggregate amount of $200.0 million subject to the satisfaction of certain conditions.
Pursuant to the 2025 Credit Facility, the Company also has the option to borrow up to an aggregate of $200.0 million in incremental term loans or increased commitments under the revolving line of credit subject to the satisfaction of certain conditions. The revolving line of credit includes a $20.0 million sublimit for the issuance of letters of credit.
In addition, our industry may be slow to accept new technologies that we develop because of, among other things, 16 existing regulations or standards written specifically for older technologies and general unfamiliarity of clients with new technologies. As a result, any new services that we may develop may not be successful for a number of years, if at all.
In addition, our industry may be slow to accept new technologies that we develop because of, among other things, existing regulations or standards written specifically for older technologies and general unfamiliarity of clients with new technologies.
Our involvement with these high-profile projects exposes us to the risk of reputational damage which may have a material adverse effect on our business, financial condition and results of operations. In addition, such high-profile projects often lead to an enhanced risk of litigation, and we may be brought into such litigation regardless of our role in the project.
In addition, such high-profile projects often lead to an enhanced risk of litigation, and we may be brought into such litigation regardless of our role in the project. Any such litigation proceedings are inherently costly and uncertain, and could have a material adverse effect on our business, financial condition and results of operations.
For example, in 2023, we experienced higher labor costs as a result of inflation. If we are not able to raise the rates we charge for our services to offset the impact of any cost increases, we will not be able to sustain our margins and our profitability will suffer.
If we are not able to raise the rates we charge for our services to offset the impact of any cost increases, we will not be able to sustain our margins and our profitability will suffer.
Our acquisition strategy exposes us to significant risks and additional costs. Acquisitions involve risks that the businesses acquired will not perform as expected and that judgments concerning the value, strengths and weaknesses of acquired businesses will prove wrong.
Acquisitions involve risks that the businesses acquired will not perform as expected and that judgments concerning the value, strengths and weaknesses of acquired businesses will prove wrong.
Any extended period without these types of events or other downturn in activity for these business lines may negatively impact our business, financial condition and results of operations. 18 In addition, as a result of the nature of these services, our Assessment, Permitting and Response segment may at times experience higher customer concentration levels based on the severity, duration and outcome of environmental emergencies (e.g. those caused by natural disasters and industrial accidents) for which we provide response services.
In addition, as a result of the nature of these services, our Assessment, Permitting and Response segment may at times experience higher customer concentration levels based on the severity, duration and outcome of environmental emergencies (e.g. those caused by natural disasters and industrial accidents) for which we provide environmental emergency response services.
Acquisitions have required, and in the future will require, that we integrate into our existing operations separate companies that historically operated independently or as part of another, larger organization, and had different systems, processes and cultures.
Any inability to successfully integrate our recent or future acquisitions, or realize their anticipated benefits, could have a material adverse effect on us. Acquisitions have required, and in the future will require, that we integrate into our existing operations separate companies that historically operated independently or as part of another, larger organization, and had different systems, processes and cultures.
We may also not be able to manage our growth through acquisitions due to the number and the diversity of the businesses we have acquired or for other reasons.
We may also not be able to manage our growth through acquisitions due to the number and the diversity of the businesses we have acquired or for other reasons. If any of these risks were to occur, our business, financial condition and results of operations may be adversely affected.
In addition, our amended and restated certificate of incorporation provides that the federal district courts of the United States are the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act but that the forum selection provision does not apply to claims brought to enforce a duty or liability created by the Exchange Act.
In addition, our amended and restated certificate of incorporation provides that the federal district courts of the United States are the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act but that the forum selection provision does not apply to claims brought to enforce a duty or liability created by the Exchange Act. 29 Although we believe these provisions benefit us by providing increased consistency in the application of Delaware law for the specified types of actions and proceedings, the provisions may have the effect of discouraging lawsuits against us or our directors and officers.
Challenges to our current or future government contracts or to our eligibility to serve government clients could result in a loss of government sales and have a material adverse effect on our business, financial condition and results of operations.
Challenges to our current or future government contracts or to our eligibility to serve government clients could result in a loss of government sales and have a material adverse effect on our business, financial condition and results of operations. 23 Our contracts with federal, state, provincial and local governments may be terminated or adversely modified prior to completion, which could adversely affect our business.
A loss of one or more clients, a meaningful reduction in their purchases from us or an adverse change in the terms on which we provide our services and solutions could have a material adverse effect on our business, financial condition and results of operations. 25 Public clients involve unique policy, contract and performance risks, and we may face challenges to our government contracts or our eligibility to serve government clients, any of which could materially adversely impact our business.
A loss of one or more clients, a meaningful reduction in their purchases from us or an adverse change in the terms on which we provide our services and solutions could have a material adverse effect on our business, financial condition and results of operations.
In addition, our tax obligations and effective tax rates could be adversely affected by recognizing tax losses or lower than anticipated earnings in jurisdictions where we have lower statutory rates and higher than anticipated earnings in jurisdictions where we have higher statutory rates, varying tax rates in the different jurisdictions in which we operate, changes in foreign currency exchange rates or changes in the valuation of our deferred tax assets and liabilities.
If any applicable tax authorities were to successfully challenge the tax treatment or characterization of any of our transactions, it could have a material adverse effect on our business, financial condition or results of operations. 32 In addition, our tax obligations and effective tax rates could be adversely affected by recognizing tax losses or lower than anticipated earnings in jurisdictions where we have lower statutory rates and higher than anticipated earnings in jurisdictions where we have higher statutory rates, varying tax rates in the different jurisdictions in which we operate, changes in foreign currency exchange rates or changes in the valuation of our deferred tax assets and liabilities.
We cannot predict from period to period whether we will experience risks associated with high customer concentration, including the inability of such customers to pay for our services, and such concentration could have a material adverse effect on our business, financial condition and results of operations.
We cannot predict from period to period whether we will experience risks associated with high customer concentration, including the inability of such customers to pay for our services or our ability to collect the amounts due, and such concentration could have a material adverse effect on our business, financial condition and results of operations. 15 We may work on high-profile projects, and any negative publicity or perceived failures of those projects, or litigation resulting from such projects, could damage our reputation and harm our operating results.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeFurthermore, the Council reviews project implementation status for targeted cybersecurity measures and tracks employee cybersecurity training completion and phishing email response rates. Council members have extensive cybersecurity experience and hold certifications including CISM, Certified Information Systems Security Professional (CISSP), Certified Ethical Hacker (CEH) and Cisco Certified Network Associate (CCNA).
Biggest changeMembers possess extensive cybersecurity experience and hold certifications such as Certified Information Security Manager (CISM), Certified Information Systems Security Professional, Certified Ethical Hacker, and Cisco Certified Network Associate. The Board oversees Montrose’s processes for assessing and mitigating risk, including cybersecurity risk.
In accordance with our Incident Response Plan, in the event of a potentially material cybersecurity event, the Audit Committee as well as our General Council, Chief Financial Officer, and CEO would be notified, briefed, and involved in oversight of mitigation, reporting, and recovery measures as appropriate. 40
In accordance with our Incident Response Plan, in the event of a potentially material cybersecurity event, the Audit Committee as well as our General Council, Chief Financial Officer, and CEO would be notified, briefed, and involved in oversight of mitigation, reporting, and recovery measures as appropriate.
As of December 31, 2024, we were not aware of any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition.
As of December 31, 2025 , we were not aware of any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition. Governance In December 2025, Montrose welcomed a new Chief Information Officer (CIO) .
Item 1C. Cybersecurity Cybersecurity Risk Management and Strategy Our cybersecurity risk management program is designed to assess, identify, and manage material risks from potential unauthorized breaches of or access to our electronic information systems, and the information we store on our systems.
Item 1C. Cybersecurity Risk Management and Strategy We maintain a cybersecurity risk management program designed to assess, identify, and manage material risks from cybersecurity threats, including unauthorized access to our information systems and the confidential, proprietary, business, and personal information we process and store.
The Board of Directors oversees management’s processes for identifying and mitigating risks, including cybersecurity risks. The Audit Committee maintains delegated oversight of cybersecurity risks, bringing in third-party expertise as needed to advise on cybersecurity infrastructure, policies, and practices.
The Audit Committee maintains delegated oversight of cybersecurity risks, engaging third-party expertise as it determines is needed to advise on infrastructure, policies, and practices. Our CIO briefs the Audit Committee quarterly on cybersecurity and data privacy risks, incidents, and ongoing projects.
The full Board of Directors receives quarterly updates from the Audit Committee regarding its oversight of cybersecurity risks and is also periodically briefed on our cybersecurity risk management program directly by our CIO and CISO.
The full Board receives quarterly updates from the Audit Committee and periodic briefings from the CIO on cybersecurity and data privacy risk management.
As part of our risk management process, our cybersecurity risk management team oversees our vulnerability management practices and conducts routine application security assessments, yearly penetration testing, periodic security audits and ongoing risk assessments designed to identify cybersecurity risks to our environment.
As part of our cybersecurity risk management processes, we periodically conduct ongoing risk assessments, vulnerability management activities, application security assessments, penetration testing, and security audits to identify and manage cybersecurity risks. We also maintain an enterprise-wide cybersecurity training and awareness program for employees.
The information we store includes confidential, proprietary, business, and personal information of ours, our customers, our employees and other third parties that we collect, process, store and transmit as part of our business. Our program is aligned with the National Institute for Standards and Technology Risk Management Framework (NIST RMF), other industry-recognized standards and our contractual requirements.
Our cybersecurity risk management processes are integrated into our enterprise risk management framework and are aligned with the National Institute for Standards and Technology Risk Management Framework (NIST RMF), other industry-recognized standards, and contractual requirements.
At the management level, Montrose’s Enterprise Cybersecurity Council, consisting of our CIO, CISO, Director of Information Security, Director of Infrastructure, and senior security architects and engineers, meets monthly to review and assess cybersecurity risks and evaluate performance metrics to identify areas for continual improvement and system strengthening.
Additionally, a third-party cybersecurity advisor meets with the CIO and cybersecurity team leaders to review strategies and progress. Montrose’s Enterprise Cybersecurity Council, consisting of the CIO, Information Security Director, Infrastructure Director, and senior security architects and engineers, is responsible for identifying, assessing, and managing material risks from cybersecurity threats.
Removed
Our program includes a wide variety of mechanisms, controls, technologies, methods, systems and other processes as further described below that are designed to prevent, detect, or mitigate unauthorized access, data loss, theft, misuse or other security incidents and vulnerabilities affecting our systems and the information we store on our systems.
Added
These processes are led under the oversight of our Chief Information Officer (CIO) and implemented by a dedicated information security team in coordination with senior management and other business functions.
Removed
We also leverage government partnerships, industry and government associations, third-party benchmarking, the results from regular internal and third-party audits, threat intelligence feeds and other similar resources to inform and guide our cybersecurity processes and resource allocation.
Added
We engage third parties in connection with our cybersecurity risk management processes, including a managed security service provider that supports security monitoring and incident response in coordination with our internal team.
Removed
Additionally, we use processes and third-party technologies to oversee and minimize impact to our data, including two-factor authentication, encryption, Company secured email and dedicated cybersecurity support personnel.
Added
We also engage assessors, consultants, and auditors from time to time to assist with cybersecurity risk assessment, threat identification, and remediation, and we participate in government and industry information-sharing initiatives. We have processes to oversee and manage cybersecurity risks associated with third-party service providers, including through monitoring activities and the use of security controls and technologies.
Removed
Our cybersecurity risk management strategy is led by our Chief Information Security Officer (CISO) and a team of information security and other professionals, as detailed further below, who are responsible for implementing and maintaining our cybersecurity data protection practices.
Added
We maintain an incident response plan aligned with NIST RMF that provides for the investigation, containment, escalation, and remediation of cybersecurity incidents, including procedures to assess materiality and escalate potentially material incidents to senior management and the Audit Committee.
Removed
This team works in close coordination with the Audit Committee of our Board of Directors, which is responsible for oversight of cybersecurity risk, senior management and other business functions and teams across the Company to identify threats by performing risk assessments and analyzing effectiveness of controls against identified risks.
Added
Our CIO brings deep expertise in cybersecurity and data privacy, supported by more than 20 years of experience leading technology, security, and digital transformation functions across multiple organizations.
Removed
We continue to leverage third-party services for security operations through a dedicated managed security service provider to monitor and respond to cyber threats. This provider plays a critical role in, mitigating threats to our environment, as well as alerting and responding to events and incidents in close coordination with our internal team.
Added
His background includes overseeing enterprise security programs, implementing large‑scale infrastructure modernization initiatives, and driving the adoption of industry‑standard cybersecurity frameworks designed to enhance organizational resilience. 34 Montrose has a dedicated cybersecurity team under the oversight of our CIO that is responsible for defining and overseeing the implementation of Montrose’s cybersecurity and data privacy strategies, policies, and procedures.
Removed
For example, this provider performs searches across live and historical data to provide analysis based on threat intelligence and use cases to develop trends and data models to reduce false positives and enhance search criteria for future use.
Added
The council meets monthly to review cybersecurity risks, evaluate performance metrics, and identify areas for improvement. The council monitors progress on cybersecurity-related projects, employee training completion, and phishing response rates. Additionally, the council monitors the prevention, detection, mitigation, and remediation of cybersecurity incidents .
Removed
In addition to our routine practices, we also conduct testing, audits and assessments in connection with acquisitions, the implementation of new software, processes or activities requiring changes in our information technology environment, new cybersecurity events or developments and receipt of new risk intelligence.
Removed
Further, we have adopted an enterprise-wide cybersecurity training and awareness program requiring all employees to complete annual cybersecurity training. The program is supported with monthly education and simulations with remedial training assignments to increase user awareness. We maintain an incident response plan (IRP) aligned with NIST RMF when responding to incidents.
Removed
The IRP sets out a coordinated approach to investigating, containing documenting and mitigating incidents.
Removed
Our CISO, with oversight from our Chief Information Officer (CIO), is responsible for executing the relevant cybersecurity incident response plan, which includes response criteria for materiality, applicable requirements for incident disclosure and reporting and escalation procedures to various individuals and departments, including our Audit Committee, key 39 stakeholders, and senior management, including our General Counsel, Chief Financial Officer and Chief Executive Officer, for risks with a potentially material impact for responding to cybersecurity incidents.
Removed
In addition to our in-house team and third-party security operations services, we also engage assessors, consultants, auditors and other third parties from time to time to assist with assessing, identifying, and managing cybersecurity risks. For example, we leverage third-party security and compliance companies with subject matter expertise in these areas for threat identification and remediation.
Removed
We continue to work with the U.S. Department of Defense on assessing cybersecurity risk and on policies and practices aimed at mitigating these risks, including through participation in the Department of Defense’s collaborative information sharing.
Removed
We also partner with other work groups to support understanding and deployment of the Cybersecurity Maturity Model Certification (CMMC) to promote readiness in complying with cybersecurity requirements for handling CUI and federal contract requirements.
Removed
Cybersecurity and Data Privacy Oversight Montrose maintains a dedicated cybersecurity team, led by our CISO and reporting to our CIO . Our CIO has deep expertise in cybersecurity and data management, as well as technical strategy and infrastructure, as part of his over 20 years of experience serving in this and similar roles across multiple organizations.
Removed
Furthermore, our CISO is a Certified Information Security Manager (CISM) and brings over 25 years of experience in information technology, governance, compliance, and risk management. The CISO is responsible for developing and deploying Montrose’s overall cybersecurity and data privacy strategy, policies, procedures, and threat detection and response actions, with the support of Montrose’s cybersecurity team.
Removed
The cybersecurity team implements Montrose’s cybersecurity and data privacy policies and procedures, including governance, compliance, and risk management practices, to safeguard Montrose’s information systems and data. Collectively, the CISO and the cybersecurity team manage and evolve Montrose’s cybersecurity posture with the objective of preventing cybersecurity incidents and increasing system resiliency to minimize business impact should an incident occur.
Removed
Our CIO and CISO brief the Audit Committee quarterly, at a minimum, on Montrose’s cybersecurity risks, business-impacting incidents, and ongoing and future cybersecurity project implementations. In addition, the Audit Committee’s third-party cybersecurity advisor meets regularly with the CIO and CISO to review our cybersecurity strategy and our continued progress toward meeting our objectives.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Pro perties. Our principal executive offices are located at 5120 Northshore Drive, North Little Rock, Arkansas. We currently operate out of approximately 120 locations across North America, Australia and Europe, all of which are leased locations other than our corporate headquarters and one environmental laboratory in Richmond, Virginia used in our Measurement and Analysis segment.
Biggest changeItem 2. Pro perties. Our principal executive offices are located at 5120 Northshore Drive, North Little Rock, Arkansas. We currently operate out of approximately 120 locations across North America, Canada, and Australia, all of which are leased locations other than one owned building for an environmental laboratory in Richmond, Virginia used in our Measurement and Analysis segment.
Our lease terms vary from month-to-month to multi-year current commitments of generally up to 10 years, with our average commitment being 4 years. We believe that our existing facilities are adequate to meet our current requirements and that comparable space is readily available in similar locations.
Our lease terms vary from month-to-month to multi-year current commitments of up to 20 years, with our average commitment being 4 years. We believe that our existing facilities are adequate to meet our current requirements and that comparable space is readily available in similar locations.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeRegardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. Item 4. Mine Saf ety Disclosures. Not applicable. 41 PART II
Biggest changeRegardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. Item 4. Mine Saf ety Disclosures. Not applicable. 35 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDate Montrose Environmental Group Russell 2000 Index MSCI USA ESG Leaders 12/31/2020 $ 206.00 $ 133.00 $ 116.00 12/31/2021 470.07 153.03 152.66 12/31/2022 295.93 121.75 121.81 12/31/2023 214.20 142.37 157.30 12/31/2024 123.67 158.79 194.41 Securities Authorized for Issuance Under Equity Compensation Plans For information on securities authorized for issuance under our equity compensation plans, see Item 12.
Biggest changeDate Montrose Environmental Group Russell 2000 Index MSCI USA ESG Leaders 12/31/2020 $ 100.00 $ 100.00 $ 100.00 12/31/2021 227.75 114.82 131.73 12/31/2022 143.38 91.35 105.11 12/31/2023 103.78 106.82 135.74 12/31/2024 59.92 119.14 167.75 12/31/2025 80.20 134.40 200.03 Securities Authorized for Issuance Under Equity Compensation Plans For information on securities authorized for issuance under our equity compensation plans, see Item 12.
The graph assumes an initial investment of $100.00 at the close of trading on July 23, 2020 and that all dividends paid by companies included in these indices have been reinvested. The performance shown in the graph below is not intended to forecast or be indicative of future stock price performance.
The graph assumes an initial investment of $100.00 at the close of trading on December 31, 2020 and that all dividends paid by companies included in these indices have been reinvested. The performance shown in the graph below is not intended to forecast or be indicative of future stock price performance.
In addition, under Delaware law, our board of directors may declare dividends only to the extent of our surplus, which is defined as total assets at fair market value minus total liabilities, minus statutory capital, or, if there is no surplus, out of our net profits for the then current and immediately preceding year. Unregistered Sales of Equity Securities None.
In addition, under Delaware law, our board of directors may declare dividends only to the extent of our surplus, which is defined as total assets at fair market value minus total liabilities, minus statutory capital, or, if there is no surplus, out of our net profits for the then current and immediately preceding year.
“Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.” Item 6. [Re served.] 43
“Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.” Item 6. [Re served.] 37
Item 5. Market for Registrant’s Common Equity, Related Stock holder Matters and Issuer Purchases of Equity Securities. Market Information for Common Stock Our common stock is traded on the New York Stock Exchange under the symbol “MEG”. Holders of Record As of February 21, 2025, there were approximately 169 stockholders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stock holder Matters and Issuer Purchases of Equity Securities. Market Information for Common Stock Our common stock is traded on the New York Stock Exchange under the symbol “MEG”. Holders of Record As of February 20, 2026, there were approximately 148 stockholders of record of our common stock.
Stock Performance Graph The following performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, or otherwise subject to the liabilities under the Securities Act or Exchange Act, except to the extent that we specifically incorporate it by reference into such filing. 42 The following graph depicts the total cumulative stockholder return on our common stock from July 23, 2020, the first day of trading of our common stock on the NYSE, through December 31, 2024, relative to the performance of the Russell 2000 Index and MSCI USA ESG Leaders.
Stock Performance Graph The following performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, or otherwise subject to the liabilities under the Securities Act or Exchange Act, except to the extent that we specifically incorporate it by reference into such filing. 36 The following graph depicts the total cumulative stockholder return on our common stock, for the five-year period through December 31, 2025, relative to the performance of the Russell 2000 Index and MSCI USA ESG Leaders.
The agreements governing our existing indebtedness and the terms of our Series A-2 Preferred Stock contain, and debt instruments that we enter into in the future may contain, covenants that place limitations on the amount of dividends we may pay.
The agreements governing our existing indebtedness contain, and debt instruments that we enter into in the future may contain, covenants that place limitations on the amount of dividends we may pay.
Removed
Additionally, holders of our Series A-2 Preferred Stock are entitled to receive cumulative dividends, accruing daily and compounded quarterly, at a rate of 9% per annum on the then-stated value of each share, whether or not earned or declared by our board of directors, and in preference to the holders of any and all other series or classes of our capital stock, including our common stock.
Added
Unregistered Sales of Equity Securities On December 30, 2025, we issued an aggregate of 10,680 shares of common stock to the former owners of Spirit as purchase price consideration related to an earnout payment.
Added
These issuances of common stock were exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof as transactions by an issuer not involving any public offering.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

79 edited+29 added−31 removed47 unchanged
Biggest changeSegment Adjusted EBITDA Segment Adjusted EBITDA Segment Adjusted EBITDA Margin Year Ended December 31, Year Ended December 31, Change (in thousands, except %) 2024 2023 2024 2023 $ Margin % Assessment, Permitting and Response $ 48,020 $ 52,148 22.4 % 23.6 % $ (4,128 ) (1.2 )% Measurement and Analysis 50,521 37,217 22.5 18.9 13,304 3.6 Remediation and Reuse 38,339 27,087 14.9 13.1 11,252 1.8 Total Operating Segments $ 136,880 $ 116,452 19.7 % 18.7 % $ 20,428 1.0 % Corporate and Other $ (41,092 ) $ (37,876 ) (5.9 )% (6.1 )% $ (3,216 ) 51 Assessment, Permitting and Response Segment Adjusted EBITDA and Segment Adjusted EBITDA margin for the year ended December 31, 2024 decreased compared to the year ended December 31, 2023 primarily due to a reduction in certain higher margin emergency response revenues that did not recur from the prior year.
Biggest changeSegment Adjusted EBITDA Year Ended December 31, Year Ended December 31, Change 2025 2024 2025 2024 $ Margin % (in thousands, except %) Segment Adjusted EBITDA (1) Segment Adjusted EBITDA (1) Segment Adjusted EBITDA Margin (2) Segment Adjusted EBITDA Margin (2) Segment Adjusted EBITDA (1) Segment Adjusted EBITDA Margin (2) Assessment, Permitting and Response $ 68,455 $ 48,020 22.3 % 22.4 % $ 20,435 (0.1 )% Measurement and Analysis 64,351 50,521 26.2 22.5 13,830 3.7 Remediation and Reuse 36,278 38,339 13.1 14.9 (2,061 ) (1.8 ) Total Reportable Segments $ 169,084 $ 136,880 20.4 % 19.7 % $ 32,204 0.7 % Corporate and Other $ (52,920 ) $ (41,092 ) (6.4 )% (5.9 )% $ (11,828 ) (1) For purposes of evaluating segment profit, the Company’s chief operating decision maker reviews Segment Adjusted EBITDA as a basis for making the decisions to allocate resources and assess performance.
Investing Activities For the year ended December 31, 2024, net cash used in investing activities was $138.0 million, driven by cash paid for the acquisitions of EPIC, 2DOT, ETA, Paragon, Spirit, and Origins, net of cash acquired, of $113.1 million, $21.3 million in purchases of property and equipment, $3.3 million in payment of other purchase price obligations. and $2.5 million of proprietary software development costs, partially offset by $2.1 million proceeds received from the sale of property and equipment.
For the year ended December 31, 2024, net cash used in investing activities was $138.0 million, driven by cash paid for the acquisitions of EPIC, 2DOT, ETA, Paragon, Spirit, and Origins, net of cash acquired, of $113.1 million, $21.3 million in purchases of property and equipment, $3.3 million in payment of other purchase price obligations. and $2.5 million of proprietary software development costs, partially offset by $2.1 million proceeds received from the sale of property and equipment.
Financing Activities For the year ended December 31, 2024, net cash provided by financing activities was $106.0 million.
For the year ended December 31, 2024, net cash provided by financing activities was $106.0 million.
For the year ended December 31, 2023, net cash used in investing activities was $101.6 million, driven by cash paid for the acquisitions of Matrix, GreenPath, Vandrensning, Frontier and EAI, net of cash acquired, of $66.2 million, 53 as well as $29.6 million in cash consideration for purchases of property and equipment (which included the purchase of a $12.2 million replacement aircraft for use in emergency responses following an aircraft crash in February 2023), $3.4 million in proprietary software development costs, $2.6 million related to the minority investment in certain companies and the payment of assumed purchase price obligations of $1.4 million, partially offset by proceeds received from the sale of property and equipment of $1.0 million.
For the year ended December 31, 2023, net cash used in investing activities was $101.6 million, driven by cash paid for the acquisitions of Matrix, GreenPath, Vandrensning, Frontier and EAI, net of cash acquired, of $66.2 million, as well as $29.6 million in cash consideration for purchases of property and equipment (which included the purchase of a $12.2 million replacement aircraft for use in emergency responses following an aircraft crash in February 2023), $3.4 million in proprietary software development costs, $2.6 million related to the minority investment in certain companies and the payment of assumed purchase price obligations of $1.4 million, partially offset by proceeds received from the sale of property and equipment of $1.0 million.
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 45 U.S. generally accepted accounting principles, or GAAP, and should be considered in conjunction with revenue growth calculated in accordance with GAAP.
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. Discontinued Service Lines and Contracts Periodically, or when circumstances warrant, we evaluate the performance of our business services to ensure that performance and outlook are consistent with expectations, and that the services offered are consistent with the Company’s mission.
We have grown organically over the long term and expect to continue to do so. 39 Discontinued Service Lines and Contracts Periodically, or when circumstances warrant, we evaluate the performance of our business services to ensure that performance and outlook are consistent with expectations, and that the services offered are consistent with the Company’s mission.
Revenue Mix Our segments and our business lines within each segment generate different levels of profitability and, accordingly, shifts in the mix of revenues between segments can impact our consolidated reported net income, net loss margin, Segment Adjusted EBITDA and Segment Adjusted EBITDA margin from quarter to quarter and year to year.
Revenue Mix Our segments and our business lines within each segment generate different levels of profitability and, accordingly, shifts in the mix of revenues between segments can impact our consolidated reported net income or loss, net income or loss margin, Segment Adjusted EBITDA and Segment Adjusted EBITDA margin from quarter to quarter and year to year.
These investments should allow us to improve our margins over time. Seasonality Due to the field-based nature of certain of our services, weather patterns generally impact our field-based teams’ ability to operate in the winter months.
These investments should allow us to improve our margins over time. 40 Seasonality Due to the field-based nature of certain of our services, weather patterns generally impact our field-based teams’ ability to operate in the winter months.
This increase was partially offset by an increase in accounts payable and other accrued liabilities (including accrued payroll) of $2.1 million, due to the timing of payments and growth in the company.
This increase was partially offset by an increase in 46 accounts payable and other accrued liabilities (including accrued payroll) of $2.1 million, due to the timing of payments and growth in the company.
As a result, our operating results could experience quarterly variability with generally lower revenues and lower earnings in the first and fourth quarters and higher overall revenues and earnings in the second and third quarters.
As a result, our operating results experience quarterly variability with generally lower revenues and lower earnings in the first and fourth quarters and higher overall revenues and earnings in the second and third quarters.
Net cash provided by operating activities was $22.2 million for the year ended December 31, 2024, compared to $56.0 million for the year ended December 31, 2023.
For the year ended December 31, 2024, net cash provided by operating activities was $22.2 million, compared to net cash provided by operating activities of $56.0 million for the year ended December 31, 2023.
Certain contracts in our Measurement and Analysis have multiple performance obligations, most commonly due to the contracts providing for multiple laboratory tests which are individual performance obligations. 55 For the Measurement and Analysis contracts with multiple performance obligations, we allocate the transaction price to each performance obligation based on the relative standalone selling price of each performance obligation.
Certain contracts in our Measurement and Analysis segment have multiple performance obligations, most commonly due to the contracts providing for multiple laboratory tests which are individual performance obligations. For the Measurement and Analysis contracts with multiple performance obligations, we allocate the transaction price to each performance obligation based on the relative standalone selling price of each performance obligation.
Variable costs of revenues generally follow the same trends as revenue, while fixed costs tend to change primarily as a result of acquisitions. Cost of revenues for the year ended December 31, 2024 increased from the year ended December 31, 2023 driven primarily by an increase in revenues.
Variable costs of revenues generally follow the same trends as revenue, while fixed costs tend to change primarily as a result of acquisitions. Cost of revenues for the year ended December 31, 2025 increased from the year ended December 31, 2024 driven primarily by an increase in revenues.
See Item 7A. “Quantitative and Qualitative Disclosures About Market Risk” for additional information regarding the impact of inflation on our business and Note 17 to our audited consolidated financial statements included in Item 8. "Financial Statements and Supplementary Data." for details on the SARs cancellation.
“Quantitative and Qualitative Disclosures About Market Risk” for additional information regarding the impact of inflation on our business and Note 17 to our audited consolidated financial statements included in Item 8. "Financial Statements and Supplementary Data." for details on the SARs cancellation.
Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 For a discussion of our segment results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022, please refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2023 Annual Report.
Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 For a discussion of our segment results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023, please refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2024 Annual Report.
Historically, we have financed our operations and acquisitions from a combination of cash generated from operations, periodic borrowings under senior secured credit facilities, and proceeds from the issuance of common stock and our Series A-2 Preferred Stock.
Historically, we have financed our operations and acquisitions from a combination of cash generated from operations, periodic borrowings under senior secured credit facilities, and proceeds from the issuance of common and preferred stock.
We consider liquidity in terms of cash flows from operations and other sources, including availability under our credit facility, and their sufficiency to fund our operating and investing activities.
We 45 consider liquidity in terms of cash flows from operations and other sources, including availability under our 2025 Credit Facility, and their sufficiency to fund our operating and investing activities.
The difference between our effective tax rate and the federal statutory rate of 21.0% is primarily attributable to items recorded for GAAP but permanently disallowed for U.S. federal income tax purposes, change in valuation allowance, and state and foreign income tax provisions.
The difference between our effective tax rate and the federal statutory rate of 21.0% is primarily attributable to items recorded for GAAP but permanently disallowed for U.S. federal income tax purposes, change in valuation allowance, research and development tax credits and state and foreign income tax provisions.
See “—Key Factors that Affect Our Business and Our Results—Financing Costs” and Note 7 and 13 to our audited consolidated financial statements included in Item 8.
See “—Key Factors that Affect Our Business and Our Results—Financing Costs” and Notes 7 and 13 to our audited consolidated financial statements included in Item 8.
As part of this evaluation, during the first quarter of 2023, we determined to sell one of our specialty lab testing businesses, the Discontinued Specialty Lab, whose service offering was non-core to our business. On December 29, 2023, we sold the assets of the Discontinued Specialty Lab for a total sales price of $4.8 million.
During the first quarter of 2023, we determined to sell one of our specialty lab testing businesses, the Discontinued Specialty Lab, whose service offering was non-core to our business. On December 29, 2023, we sold the assets of the Discontinued Specialty Lab for a total sales price of $4.8 million.
The period-over-period decrease of $33.8 million, was primarily due to a higher increase in working capital in the current period of $40.4 million versus $3.3 million in the prior year period, as well as higher interest payment of $6.7 million and higher tax payments of $3.2 million, partially offset by higher cash from operating activities before changes in working capital, interest, tax and contingent earnout payment of $4.3 million, and lower contingent earnout payment of $0.6 million.
The period-over-period decrease of $33.8 million, was primarily due to a higher increase in working capital of $40.4 million in 2024 versus $3.3 million in 2023, as well as higher interest payments of $6.7 million and higher tax payments of $3.2 million, partially offset by higher cash from operating activities before changes in working capital, interest, tax and contingent earnout payment of $4.3 million, and lower contingent earnout payments of $0.6 million.
Earnings Volatility In addition to the impact of seasonality on earnings, our emergency response business exposes us to potentially significant revenue and earnings fluctuations tied to large environmental emergency response projects following an incident or natural disaster or more broad scale events such as the COVID-19 pandemic.
Earnings Volatility In addition to the impact of seasonality on earnings, our environmental emergency response business exposes us to potentially significant revenue and earnings fluctuations tied to large environmental emergency response projects following an incident or natural disaster or more broad scale events.
“Business—Strategic Acquisitions.” The table below sets forth the number of acquisitions completed in each of the last three fiscal years, fiscal year revenues contributed by those acquisitions in the year of acquisition, and the percentage of total annual revenues attributable to those acquisitions: (Revenues in thousands) Acquisitions Completed Fiscal Year Revenues Attributable to Acquisitions Percentage of Fiscal Year Revenues Fiscal year 2024 6 $ 44,590 6.4 % Fiscal year 2023 5 69,059 11.1 % Fiscal year 2022 5 20,154 3.7 % Revenues from acquired companies exclude intercompany revenues from revenue synergies realized between business lines within operating segments, as these are eliminated at the consolidated segment and Company level.
“Business—Strategic Acquisitions.” The table below sets forth the number of acquisitions completed in 2024 and 2023, fiscal year revenues contributed by those acquisitions in the year of acquisition, and the percentage of total annual revenues attributable to those acquisitions: (Revenues in thousands) Acquisitions Completed Fiscal Year Revenues Attributable to Acquisitions Percentage of Fiscal Year Revenues Fiscal year 2024 6 $ 44,590 6.4 % Fiscal year 2023 5 69,059 11.1 % Revenues from acquired companies exclude intercompany revenues from revenue synergies realized between business lines within operating segments, as these are eliminated at the consolidated segment and Company level.
Total revenue from emergency response related services was $48.0 million, $91.4 million, and $88.0 million in the years ended December 31, 2024, 2023 and 2022, respectively.
Total revenue from emergency response related services was $77.0 million, $48.0 million, and $91.4 million in the years ended December 31, 2025, 2024 and 2023, respectively.
We made earn-out payments of $1.5 million in March 2024 in connection with our acquisition of Huco Consulting, Inc. (Huco), of which, $0.4 million was paid in cash, and the remaining $1.1 million in the Company's common stock.
During the year ended December 31, 2024, we made earn-out payments of $1.5 million in connection with our acquisition of Huco Consulting, Inc. (Huco) of which, $0.4 million was paid in cash, and the remaining $1.1 million in the Company's common stock.
The amount of each for the last three fiscal years is: Year Ended December 31, (in thousands) 2024 2023 2022 Amortization expense $ 34,943 $ 30,130 $ 36,053 Acquisition-related costs 7,827 6,930 1,891 Fair value changes in business acquisition contingencies 534 84 (3,227 ) We expect that amortization of identifiable intangible assets and other acquisition-related costs, assuming we continue to acquire, will continue to be significant.
The amount of each for the last three fiscal years is: Year Ended December 31, (in thousands) 2025 2024 2023 Amortization expense $ 29,929 $ 34,943 $ 30,130 Acquisition-related costs 1,825 7,827 6,930 Fair value changes in business acquisition contingencies 900 534 84 We expect that amortization of identifiable intangible assets and other acquisition-related costs, assuming we continue to acquire, will continue to be significant.
Corporate activities not directly related to segment performance, including general corporate expenses, interest and taxes, are reported separately. 44 Key Factors that Affect Our Business and Our Results Our operating results and financial performance are influenced by a variety of internal and external trends and other factors. Some of the more important factors are discussed briefly below.
Corporate activities not directly related to segment performance, including general corporate expenses, interest and taxes, are reported separately. Key Factors that Affect Our Business and Our Results Our operating results and financial performance are influenced by a variety of internal and external trends and other factors.
Our principal sources of liquidity have been cash generated by operating activities, borrowings under our credit facilities, other borrowing arrangements, and proceeds from the issuance of common and our Series A-2 Preferred Stock.
Our principal sources of liquidity have been cash generated by operating activities, borrowings under our senior secured credit facilities, other borrowing arrangements, and proceeds from the issuance of common stock.
The Discontinued Specialty Lab, which was part of our Measurement and Analysis segment, generated revenues of $8.8 million and $17.0 million in the years ended December 31, 2023 and 2022, respectively.
The Discontinued Specialty Lab, which was part of our Measurement and Analysis segment, generated revenues of $8.8 million in the year ended December 31, 2023.
Acquisitions We have been, and expect to continue to be, an acquisitive company. Acquisitions have expanded our environmental service capabilities across all three segments, our access to technology, as well as our geographic reach in the United States, Canada, Europe and Australia. See Item 1.
Acquisitions have expanded our environmental service capabilities across all three segments, our access to technology, as well as our geographic reach in the United States, Canada, Europe and Australia. See Item 1.
Other income for the year ended December 31, 2023 of $4.4 million was driven by a $6.7 million gain related to fair value adjustments on the Series A-2 Preferred Stock conversion option and a $0.3 million gain from other income, partially offset by a $2.6 million loss related to fair value adjustments on our interest rate swap.
Other expense, net for the year ended December 31, 2024 of $1.7 million was driven by a $1.9 million loss related to fair value adjustments on our interest rate swaps and a $1.2 million loss related to fair value adjustments on the Series A-2 Preferred Stock conversion option, partially offset by $1.4 million gain from other income.
Working capital (which excludes contingent consideration payments and changes in right-of-use assets) increased by $40.4 million in the year ended December 31, 2024, primarily due to an increase in accounts receivable of $42.0 million driven by higher revenues in the fourth quarter versus the prior year, and the previously disclosed receivables from a large US government project for the City of Tustin, CA.
Working capital increased by $40.4 million in the year ended December 31, 2024, primarily due to an increase in accounts receivable of $42.0 million driven by higher revenues in the fourth quarter versus the prior year, and the previously disclosed receivable from a large U.S. government project for the City of Tustin, CA.
In connection with certain of our acquisitions, we may make up to $57.6 million in aggregate earn-out payments between the years 2025 and 2026, of which up to $22.1 million may be paid only in cash, up to $13.6 million may be paid only in common stock and up to $21.9 million may be paid, at our option, in cash or common stock.
In connection with certain of our acquisitions, we may make up to $17.6 million in aggregate earn-out payments between the years 2026 and 2027, of which up to $5.1 million may be paid only in cash, up to $2.8 million may be paid only in common stock and up to $9.7 million may be paid, at our option, in cash or common stock.
We may make up to $57.6 million in aggregate earn-out payments between the years 2025 and 2026 in connection with certain of our acquisitions of which up to $22.1 million may be paid only in cash, up to $13.6 million may be paid only in common stock and up to $21.9 million may be paid in cash or, at our option, in common stock.
We may make up to $17.6 million in aggregate earn-out payments between the years 2026 and 2027 in connection with certain of our acquisitions of which up to $5.1 million may be paid only in cash, up to $2.8 million may be paid only in common stock and up to $9.7 million may be paid in cash or, at our option, in common stock.
Selling, General and Administrative Expense Year Ended December 31, Change (in thousands, except %) 2024 2023 $ % Selling, general and administrative expense $ 261,627 $ 222,861 $ 38,766 17.4 % Selling, general and administrative expense consists of general corporate overhead, including executive, legal, finance, safety, risk management, human resource, marketing and information technology related costs, as well as indirect operational costs of labor, rent, insurance and stock-based compensation.
Selling, General and Administrative Expense Year Ended December 31, Change (in thousands, except %) 2025 2024 $ % Selling, general and administrative expense $ 270,806 $ 261,627 $ 9,179 3.5 % Selling, general and administrative expense consists of general corporate overhead, including executive, legal, finance, safety, risk management, human resource, marketing and information technology related costs, as well as indirect operational costs of labor, rent, insurance and stock-based compensation.
Credit Facilities In February 2025, we replaced the 2021 Credit Facility with a new senior secured credit facility, the 2025 Credit Facility (and jointly the Senior Credit Facilities). Refer to Note 22 to our audited consolidated financial statements included in Item 8. "Financial Statements and Supplementary Data." for details on the new facility.
Credit Facilities In February 2025, we replaced our existing senior secured credit facility with a new senior secured credit facility, the 2025 Credit Facility. Refer to Note 13 to our audited consolidated financial statements included in Item 8. "Financial Statements and Supplementary Data." See Note 13 to our audited consolidated financial statements included in Item 8.
See Note 8 to our audited consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data." As of December 31, 2024, the Company had $149.8 million available under its 2021 Credit Facility (without giving effect to any outstanding letters of credit, and subject to borrowing base limitations), and $12.9 million of cash on hand.
See Note 8 to our audited consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data." As of December 31, 2025, we had $214.2 million available under the 2025 Credit Facility (after giving effect to any outstanding letters of credit, and subject to borrowing base limitations), and $11.2 million of cash on hand.
We expect to continue to finance our liquidity requirements, including any cash earn-out payments that may be required in connection with acquisitions, through cash generated from operations and borrowings under our credit facility.
We expect to continue to finance our liquidity requirements, including any cash earn-out payments that may be required in connection with acquisitions, through cash generated from operations and borrowings under our 2025 Credit Facility. We believe these sources will be sufficient to fund our cash needs in the short-term and long-term.
“Financial Statements and Supplementary Data.” Income Tax Expense (Benefit) Year Ended December 31, Change (in thousands, except %) 2024 2023 $ % Income tax expense (benefit) $ 7,996 $ (980 ) $ 8,976 (915.9 %) Income tax expense (benefit) was $8.0 million and $(1.0) million for the years ended December 31, 2024 and 2023, respectively.
“Financial Statements and Supplementary Data.” Income Tax Expense Year Ended December 31, Change (in thousands, except %) 2025 2024 $ % Income tax expense $ 12,064 $ 7,996 $ 4,068 50.9 % 43 Income tax expense was $12.1 million and $8.0 million for the years ended December 31, 2025 and 2024, respectively.
We believe these sources will be sufficient to fund our cash needs in the short-term and long-term. 52 Cash Flows The following table summarizes our cash flows for the periods presented: Year Ended December 31, (in thousands) 2024 2023 2022 Net cash provided by (used in): Operating activities $ 22,235 $ 56,022 $ 20,649 Investing activities (138,045 ) (101,624 ) (38,687 ) Financing activities 106,002 (20,110 ) (38,764 ) Change in cash, cash equivalents and restricted cash $ (9,808 ) $ (65,712 ) $ (56,802 ) Operating Activities Cash flows from operating activities can fluctuate from period-to-period as earnings, working capital needs and the timing of payments for contingent consideration, taxes, bonus payments and other operating items impact reported cash flows.
Cash Flows The following table summarizes our cash flows for the periods presented: Year Ended December 31, (in thousands) 2025 2024 2023 Net cash provided by (used in): Operating activities $ 107,476 $ 22,235 $ 56,022 Investing activities (15,842 ) (138,045 ) (101,624 ) Financing activities (93,122 ) 106,002 (20,110 ) Change in cash, cash equivalents and restricted cash $ (1,488 ) $ (9,808 ) $ (65,712 ) Operating Activities Cash flows from operating activities can fluctuate from period-to-period as earnings, working capital needs and the timing of payments for contingent consideration, taxes, bonus payments and other operating items impact reported cash flows.
“Financial Statements and Supplementary Data.” Other (Expense) Income Year Ended December 31, Change (in thousands, except %) 2024 2023 $ % Other (expense) income, net $ (1,735 ) $ 4,374 $ (6,109 ) n/a Other expense for the year ended December 31, 2024 of $1.7 million was driven by a $1.9 million loss related to fair value adjustments on our interest rate swap and a $1.2 million loss related to fair value adjustments on the Series A-2 Preferred Stock conversion option, partially offset by $1.4 million gain from other income.
“Financial Statements and Supplementary Data.” Other Income (Expense), Net Year Ended December 31, Change (in thousands, except %) 2025 2024 $ % Other income (expense), net $ 19,063 $ (1,735 ) $ 20,798 (1198.7 %) Other income, net for the year ended December 31, 2025 of $19.1 million was driven by a $20.2 million fair value gain related to the Series A-2 Preferred Stock conversion option and $0.8 million of other non-operating income, partially offset by a $2.0 million loss related to fair value adjustments on our interest rate swaps.
For the year ended December 31, 2022, net cash used in financing activities was $38.8 million.
Financing Activities For the year ended December 31, 2025, net cash used in financing activities was $93.1 million.
These embedded derivatives are bifurcated, accounted for at their estimated fair value, which is based on certain estimates and assumptions, and presented separately on the consolidated statements of financial position.
Embedded Derivatives Embedded derivatives that are required to be bifurcated from the underlying host instrument are accounted for and valued as a separate financial instrument. These embedded derivatives are bifurcated, accounted for at their estimated fair value, which is based on certain estimates and assumptions, and presented separately on the consolidated statements of financial position.
According to data derived from a 2024 Environmental Industry Study prepared by Environmental Business International, Inc., or EBI, which we commissioned, the global environmental industry is estimated to be approximately $1.6 trillion, with $540.0 billion concentrated in the United States.
According to data derived from a 2025 Environmental Industry Study prepared by Environmental Business International, Inc., or EBI, the global environmental industry is estimated to generate approximately $1.9 trillion in revenues in 2026, with $620.0 billion concentrated in the United States.
The discontinuation of this specialty service line did not represent a strategic shift that had a major effect on our operations and financial results, therefore it did not meet the requirements to be classified as discontinued operations. During the fourth quarter of 2022, we determined to exit our lab in Berkeley, California and terminate the related positions.
The discontinuation of this specialty service line did not represent a strategic shift that had a major effect on our operations and financial results, therefore it did not meet the requirements to be classified as discontinued operations.
These uncertainties primarily impact our contracts in the Remediation and Reuse segment. Time-and-materials contracts contain variable consideration. However, performance obligations qualify for the “Right to Invoice” practical expedient. Under this practical expedient, we recognize revenue, over time, in the amount to which we have a right to invoice.
These uncertainties primarily impact our contracts in the Remediation and Reuse segment. Time-and-materials contracts contain variable consideration. However, performance obligations qualify for the “Right to Invoice” practical expedient.
Emergency response revenue was $48.0 million and $91.4 million for the year ended December 31, 2024 and December 31, 2023, respectively.
Emergency response revenue was $77.0 million and $48.0 million for the years ended December 31, 2025 and December 31, 2024, respectively.
“Financial Statements and Supplementary Data.” Interest Expense, Net Year Ended December 31, Change (in thousands, except %) 2024 2023 $ % Interest expense, net $ (15,862 ) $ (7,793 ) $ (8,069 ) 103.5 % Interest expense, net incurred in the year ended December 31, 2024, was $15.9 million, compared to $7.8 million for the year ended December 31, 2023.
“Financial Statements and Supplementary Data.” Interest Expense, Net Year Ended December 31, Change (in thousands, except %) 2025 2024 $ % Interest expense, net $ 19,567 $ 15,862 $ 3,705 23.4 % Interest expense, net incurred in the year ended December 31, 2025, was $19.6 million, compared to $15.9 million for the year ended December 31, 2024.
Certain of the performance based restricted stock units will only meet the requirements for establishing a grant date when the final calculated financial performance metrics and the amount of awards have been approved by our Board of Directors, which will then trigger the service inception date, the fair value of the awards, and the associated expense recognition period.
ASC 505 requires that the fair value of the equity instruments issued to a non-employee be measured on the earlier of: (i) the performance commitment date or (ii) the date the services required under the arrangement have been completed. 49 Certain of the performance based restricted stock units will only meet the requirements for establishing a grant date when the final calculated financial performance metrics and the amount of awards have been approved by our Board of Directors, which will then trigger the service inception date, the fair value of the awards, and the associated expense recognition period.
“Financial Statements and Supplementary Data.” for details on the 2021 Credit Facility and our new credit facility. Series A-2 Preferred Stock In January 2024, we repaid $60.0 million of the outstanding principal balance of the Series A-2 Preferred Stock.
“Financial Statements and Supplementary Data.” for details on the 2025 Credit Facility and 2021 Credit Facility. Series A-2 Preferred Stock In January 2024, the Company redeemed $60.0 million in aggregate stated value of the Series A-2 Preferred Stock in cash.
Measurement and Analysis Segment Adjusted EBITDA and Segment Adjusted EBITDA margin for the year ended December 31, 2024 increased compared to the year ended December 31, 2023 primarily due to operating leverage driven by higher revenues.
Measurement and Analysis Segment Adjusted EBITDA for the year ended December 31, 2025 increased compared to the year ended December 31, 2024 primarily as a result of higher revenues driven by organic growth.
We have made and expect to continue to make investments in our business platform that we believe have laid the foundation for continued growth. Investments in logistics, quality, risk management, sales and marketing, safety, human resources, research and development, finance and information technology and other areas, enable us to support continued growth.
Investments in logistics, quality, risk management, sales and marketing, safety, human resources, research and development, finance and information technology and other areas, enable us to support continued growth.
The weighted average interest rate on the 2021 Credit Facility for the years ended December 31, 2024 and 2023 was 7.2% and 6.7%, respectively, before the benefit of our interest rate swaps. Weighted average interest rates, net of the benefit of our interest rate swaps, as of December 31, 2024 and 2023 were 5.8% and 4.1%, respectively.
Weighted average interest rates as of December 31, 2025 and December 31, 2024 were 6.1% and 7.2%, respectively, before the benefit of interest rate swaps, and 5.5% and 5.8%, respectively, after the benefit of interest rate swaps.
No dividend rates are used in the calculation as these are not applicable to us. Forfeitures are recognized as incurred. Employee options are accounted for in accordance with the guidance set forth by ASC 718. The fair value of stock appreciation rights is estimated at the grant date using the geometric Brownian motion model. 57
No dividend rates are used in the calculation as these are not applicable to us. Forfeitures are recognized as incurred. Employee options are accounted for in accordance with the guidance set forth by ASC 718. 50
Selling, general and administrative expense for the year ended December 31, 2024 increased $38.8 million or 17.4% compared to the year ended December 31, 2023.
Selling, general and administrative expense for the year ended December 31, 2025 increased by $9.2 million or 3.5% compared to the year ended December 31, 2024.
These proceeds partially offset the estimated $1.5 million cost of the cyber-attack recognized in the second and third quarters of 2022. 47 Results of Operations Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 Year Ended December 31, (in thousands, except per share data) 2024 2023 Revenues $ 696,395 $ 624,208 Cost of revenues (exclusive of depreciation and amortization) 418,193 383,903 Selling, general and administrative expense 261,627 222,861 Fair value changes in business acquisition contingencies 534 84 Depreciation and amortization 52,762 45,780 Loss from operations (36,721 ) (28,420 ) Other (expense) income, net (1,735 ) 4,374 Interest expense, net (15,862 ) (7,793 ) Loss before income taxes (54,318 ) (31,839 ) Income tax expense (benefit) 7,996 (980 ) Net loss (62,314 ) (30,859 ) Series A-2 dividend payment (11,064 ) (16,400 ) Net loss attributable to common stockholders $ (73,378 ) $ (47,259 ) Weighted average number of shares — basic and diluted 33,061 30,058 Loss per share — basic and diluted $ (2.22 ) $ (1.57 ) Revenues Year Ended December 31, Change (in thousands, except %) 2024 2023 $ % Revenues $ 696,395 $ 624,208 $ 72,187 11.6 % For the year ended December 31, 2024, we generated revenues of $696.4 million, an increase of $72.2 million or 11.6% from the year ended December 31, 2023.
Results of Operations Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 Year Ended December 31, (in thousands, except per share data) 2025 2024 Revenues $ 830,538 $ 696,395 Cost of revenues (exclusive of depreciation and amortization) 496,192 418,193 Selling, general and administrative expense 270,806 261,627 Fair value changes in business acquisition contingencies 900 534 Depreciation and amortization 50,915 52,762 Income (loss) from operations 11,725 (36,721 ) Other income (expense), net 19,063 (1,735 ) Interest expense, net (19,567 ) (15,862 ) Income (loss) before income taxes 11,221 (54,318 ) Income tax expense 12,064 7,996 Net loss $ (843 ) $ (62,314 ) Series A-2 dividend payment (4,150 ) (11,064 ) Net loss attributable to common stockholders $ (4,993 ) $ (73,378 ) Weighted average common shares outstanding Basic 35,120 33,061 Diluted 35,120 33,061 Net loss per share attributable to common stockholders Basic $ (0.14 ) $ (2.22 ) Diluted $ (0.14 ) $ (2.22 ) Revenues Year Ended December 31, Change (in thousands, except %) 2025 2024 $ % Revenues $ 830,538 $ 696,395 $ 134,143 19.3 % 41 For the year ended December 31, 2025, we generated revenues of $830.5 million, an increase of $134.1 million or 19.3% from the year ended December 31, 2024.
Cash used in financing activities was driven by the payment of the quarterly dividends on the Series A-2 Preferred Stock of $16.4 million, the payment of acquisition-related contingent consideration of $11.1 million, term loan amortization payments of $8.8 million related to our 2021 Credit Facility, and the repayment of finance leases of $4.0 million, partially offset by proceeds received from the exercise of stock options of $1.6 million.
Cash used in financing activities was driven by net repayments of borrowing of $612.6 million, redemption of the Series A-2 Preferred Stock of $122.2 million, contingent consideration payments of $11.0 million, repayments of finance leases of $11.1 million, taxes paid related to net share settlement of equity awards of $10.7 million, dividends on the Series A-2 Preferred Stock of $4.2 million, and payment of financing cost of $2.4 million, partially offset by borrowing under our credit facility of $677.6 million.
We expect to pay the $60.0 million on or before April 13, 2025 from cash on hand and debt. Following the redemption, approximately $62.2 million of A-2 Preferred Stock will remain outstanding. See Note 16 and 22 to our audited consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data.” for details regarding the Series A-2 Preferred Stock.
Following the July 2025 redemption, no A-2 Preferred Shares remained outstanding. 47 See Note 16 to our audited consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data.” for details regarding the Series A-2 Preferred Stock.
Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 For a discussion of our consolidated results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022, please refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 29, 2024, or the 2023 Annual Report. 50 Segment Results of Operations Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 Year Ended December 31, 2024 2023 Segment Revenues Segment Adjusted EBITDA (1) Segment Adjusted EBITDA Margin (2) Segment Revenues Segment Adjusted EBITDA (1) Segment Adjusted EBITDA Margin (2) Assessment, Permitting and Response $ 214,850 $ 48,020 22.4 % $ 220,727 $ 52,148 23.6 % Measurement and Analysis 224,366 50,521 22.5 197,095 37,217 18.9 Remediation and Reuse 257,179 38,339 14.9 206,386 27,087 13.1 Total Operating Segments $ 696,395 $ 136,880 19.7 % $ 624,208 $ 116,452 18.7 % Corporate and Other $ (41,092 ) (5.9 )% $ (37,876 ) (6.1 )% (1) For purposes of evaluating segment profit, the Company’s chief operating decision maker reviews Segment Adjusted EBITDA as a basis for making the decisions to allocate resources and assess performance.
Segment Results of Operations Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 Year Ended December 31, 2025 2024 (in thousands, except %) Segment Revenues Segment Adjusted EBITDA (1) Segment Adjusted EBITDA Margin (2) Segment Revenues Segment Adjusted EBITDA (1) Segment Adjusted EBITDA Margin (2) Assessment, Permitting and Response $ 307,428 $ 68,455 22.3 % $ 214,850 $ 48,020 22.4 % Measurement and Analysis 245,860 64,351 26.2 224,366 50,521 22.5 Remediation and Reuse 277,250 36,278 13.1 257,179 38,339 14.9 Total Reportable Segments $ 830,538 $ 169,084 20.4 % $ 696,395 $ 136,880 19.7 % Corporate and Other $ (52,920 ) (6.4 )% $ (41,092 ) (5.9 )% (1) For purposes of evaluating segment profit, the Company’s chief operating decision maker reviews Segment Adjusted EBITDA as a basis for making the decisions to allocate resources and assess performance.
Our primary cash needs are for day-to-day operations, to fund working capital requirements, to fund our acquisition strategy and any related cash earn-out obligations, to pay interest and principal on our indebtedness and dividends on our Series A-2 Preferred Stock, and to make capital expenditures.
Our primary cash needs are for day-to-day operations, to fund working capital requirements, to fund our acquisition strategy and any related cash earn-out obligations, to pay interest and principal on our indebtedness, and to make capital expenditures. Additionally, in connection with certain acquisitions, we agree to earn-out provisions and other purchase price adjustments that may require future payments.
Measurement and Analysis segment revenues for the year ended December 31, 2024 increased compared to the year ended December 31, 2023 as a result of strong organic growth of 15.2% or $28.2 million and the impact of acquisitions, which contributed $8.5 million, partially offset by the sale of the Discontinued Specialty Lab in December 2023, which contributed $8.8 million to revenues in 2023.
Measurement and Analysis segment revenues for the year ended December 31, 2025 increased compared to the year ended December 31, 2024 as a result of organic growth of 5.4% or $12.0 million and $11.6 million additional revenue from acquisitions completed in 2024, partially offset by a decrease in revenue of $2.3 million related to a lab sold in the fourth quarter of 2024.
Financing Costs Total debt at December 31, 2024 was $222.7 million net of deferred debt issuance costs, which was an increase of $59.5 million compared to December 31, 2023.
Total debt, net of deferred debt issuance costs, at December 31, 2025 was $288.3 million, which was an increase of $65.6 million compared to December 31, 2024. The increase was primarily driven by an increase of $59.5 million outstanding under our revolving line of credit.
Our employees, including engineers, scientists and consultants, provide these services to assist our clients in designing solutions, managing products and mitigating environmental risks and liabilities at their locations. We do not own the properties or facilities at which we implement these projects or the underlying liabilities, nor do we own material amounts of the equipment used in projects.
We do not own the properties or facilities at which we implement these projects or the underlying liabilities, nor do we own material amounts of the equipment used in projects.
For the year ended December 31, 2022, net cash used in investing activities was $38.7 million, primarily driven by cash paid for the acquisitions of Environmental Standards, IAG, Triad, AirKinetics and Huco, net of cash acquired of $28.6 million and purchases of property and equipment for cash consideration of $9.6 million.
Investing Activities For the year ended December 31, 2025, net cash used in investing activities was $15.8 million primarily driven by $16.3 million in purchases of property and equipment.
Working capital increased by $3.3 million in the year ended December 31, 2023, primarily due to a decrease in accounts payable and other accrued liabilities of $8.9 million, an increase in accounts receivable and contract assets of $2.9 million and an increase in prepaid expenses and other current assets of $0.9 million, partially offset by an increase in accrued payroll and benefits of $9.5 million.
Working capital (which excludes contingent consideration payments and changes in right-of-use assets) decreased by $14.8 million in the year ended December 31, 2025, primarily due to an increase in accounts payable and other accrued liabilities of $8.3 million and accrued payroll and benefits of $18.5 million, due to the timing of payments and growth in the company, partially offset by an increase in accounts receivable of $10.1 million driven by an increase in revenue.
See Notes 13 and 22 to our audited consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data.” Corporate and Operational Infrastructure Investments Our historical operating results reflect the impact of our ongoing investments in our corporate infrastructure to support our growth.
“Financial Statements and Supplementary Data.” Corporate and Operational Infrastructure Investments Our historical operating results reflect the impact of our ongoing investments in our corporate infrastructure to support our growth. We have made and expect to continue to make investments in our business platform that we believe have laid the foundation for continued growth.
Remediation and Reuse Segment Adjusted EBITDA for the year ended December 31, 2024 increased compared to the year ended December 31, 2023 due to higher revenues. Improved Segment Adjusted EBITDA margin in 2024 was driven primarily by improved operating efficiency and higher margin acquisitions.
Remediation and Reuse Segment Adjusted EBITDA for the year ended December 31, 2025 decreased compared to the year ended December 31, 2024 primarily due to losses incurred in our renewable energy business in the current year, partially offset by higher revenues in our water treatment business.
Remediation and Reuse Remediation and Reuse segment provides clients with engineering, design, and implementation services, primarily (i) treatment technologies which treat contaminated water or create renewable energy from waste, or (ii) soil remediation.
Remediation and Reuse Remediation and Reuse segment provides clients with engineering, design, and implementation services, primarily (i) treatment technologies which treat contaminated water, or (ii) soil remediation. Our employees, including engineers, scientists and consultants, provide these services to assist our clients in designing solutions, managing products and mitigating environmental risks and liabilities at their locations.
We expect interest expense to remain a significant cost as we continue to leverage the 2021 Credit Facility to support our operations, partially fund the redemption of the Series A-2 Preferred Stock, and to fund future acquisitions. In February 2025, we refinanced our 2021 Credit Facility and replaced it with a new 2025 Credit Facility.
Our 2025 Credit Facility funded a portion of the redemption of the Series A-2 Preferred Stock in April and July 2025. In February 2025, we refinanced our 2021 Credit Facility and replaced it with a new 2025 Credit Facility. See Note 13 to our audited consolidated financial statements included in Item 8.
Depreciation and Amortization Year Ended December 31, Change (in thousands, except %) 2024 2023 $ % Depreciation and amortization $ 52,762 $ 45,780 $ 6,982 15.3 % 49 The increase in depreciation and amortization expense was driven primarily by $4.8 million of additional amortization related to intangibles acquired through acquisition, and $1.7 million higher depreciation related to equipment purchases.
Depreciation and Amortization Year Ended December 31, Change (in thousands, except %) 2025 2024 $ % Depreciation and amortization $ 50,915 $ 52,762 $ (1,847 ) (3.5 %) The decrease in depreciation and amortization expense was primarily due to lower amortization of intangibles due to the absence of acquisitions in 2025, partially offset by increased depreciation expense due to higher property and equipment balances.
Accounting for Acquisitions and Business Acquisition Contingencies We account for acquisitions using the acquisition method of accounting.
Under this practical expedient, we recognize revenue, over time, in the amount to which we have a right to invoice. 48 Accounting for Acquisitions and Business Acquisition Contingencies We account for acquisitions using the acquisition method of accounting.
Revenues Year Ended December 31, Change (in thousands, except %) 2024 2023 $ % Assessment, Permitting and Response $ 214,850 $ 220,727 $ (5,877 ) (2.7 )% Measurement and Analysis 224,366 197,095 27,271 13.8 Remediation and Reuse 257,179 206,386 50,793 24.6 Total Operating Segments $ 696,395 $ 624,208 $ 72,187 11.6 % Assessment, Permitting and Response segment revenues for the year ended December 31, 2024 decreased compared to the year ended December 31, 2023 due to a decline in emergency response revenues of $43.3 million, partially offset by strong organic growth of 25.0% or $32.3 million, mainly within our consulting and advisory services, and the impact of acquisitions, which contributed $5.1 million.
Revenues Year Ended December 31, Change (in thousands, except %) 2025 2024 $ % Assessment, Permitting and Response $ 307,428 $ 214,850 $ 92,578 43.1 % Measurement and Analysis 245,860 224,366 21,494 9.6 Remediation and Reuse 277,250 257,179 20,071 7.8 Total Reportable Segments $ 830,538 $ 696,395 $ 134,143 19.3 % Assessment, Permitting and Response segment revenues for the year ended December 31, 2025 increased compared to the year ended December 31, 2024 due to organic growth within our non-response consulting and advisory services of 34.6% or $57.8 million driven by remediation consulting work cross sold from an initial emergency response incident, an increase in revenues from environmental emergency responses of $29.0 million, and $5.8 million additional revenue from acquisitions completed in 2024.
Corporate and other costs for the year ended December 31, 2024 increased $3.2 million primarily due to increased investments in IT and cybersecurity infrastructure as well as an increase in professional fees. Corporate costs as a percentage of revenues were 5.9% in 2024 compared to 6.1% in the prior year.
Corporate and other costs for the year ended December 31, 2025 increased compared to the year ended December 31, 2024 primarily due to higher bonus expense of $7.2 million, driven by an outperformance in the current year versus the prior year, higher outside service costs of $2.7 million primarily related to an IT migration, and higher non-bonus related payroll costs.
See “—Discontinued Service Lines and Contracts ” above. 48 Cost of Revenues Year Ended December 31, Change (in thousands, except %) 2024 2023 $ % Cost of revenues (exclusive of depreciation and amortization) $ 418,193 $ 383,903 $ 34,290 8.9 % Cost of revenue as a % of revenue 60.1 % 61.5 % Cost of revenues consists of all direct costs required to provide services, including fixed and variable direct labor costs, equipment purchases and rental, and other outside services, field and lab supplies, vehicle costs and travel-related expenses.
Revenue by segment, and as a percentage of total revenues, was as follows: Year Ended December 31, 2025 2024 (in thousands, except %) Revenues % of Total Revenues Revenues % of Total Revenues Assessment, Permitting and Response $ 307,428 37.0 % $ 214,850 30.9 % Measurement and Analysis 245,860 29.6 224,366 32.2 Remediation and Reuse 277,250 33.4 257,179 36.9 $ 830,538 $ 696,395 Cost of Revenues Year Ended December 31, Change (in thousands, except %) 2025 2024 $ % Cost of revenues (exclusive of depreciation and amortization) $ 496,192 $ 418,193 $ 77,999 18.7 % Cost of revenue as a % of revenue 59.7 % 60.1 % Cost of revenues consists of all direct costs required to provide services, including fixed and variable direct labor costs, material parts and components, and other outside services, field and lab supplies, vehicle costs and travel-related expenses.
If a qualitative assessment indicates it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we will proceed to the quantitative second step (generally referred to as a "step 1" analysis) where the fair value of a reporting unit is calculated based on weighted income and market-based approaches.
The results of our analysis indicated that it is not more likely than not that the fair value of any reporting unit was less than its carrying amount, and thus, a quantitative analysis was not performed. As part of our assessment, we evaluated macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, and other relevant reporting unit-specific events.
The period-over-period increase of $16.5 million, excluding the impact of contingent consideration, was primarily due to a lower increase in working capital in the current period of $3.3 million versus an increase in working capital in the prior year period of $14.1 million, as well as higher earnings before non-cash items of $6.5 million.
Net cash provided by operating activities was $107.5 million for the year ended December 31, 2025, compared to $22.2 million for the year ended December 31, 2024. The period-over-period increase of $85.2 million, was primarily due to an increase in earnings before non-cash items of $29.8 million, and improved working capital performance, reflecting a $55.2 million lower cash outflow.
These increases were partially offset by $43.3 million lower environmental emergency response revenues, which we exclude from organic growth, and the December 2023 sale of the Discontinued Specialty Lab, which generated $8.8 million of revenue in 2023. Environmental emergency response revenues were $48.0 million and $91.4 million for the years ended December 31, 2024 and 2023, respectively.
The period over period increase in revenues was primarily driven by strong organic growth of 12.7% or $81.8 million across all three segments, $29.0 million higher emergency response revenue, and $25.0 million from acquisitions completed in 2024. Revenue from environmental response was $77.0 million and $48.0 million for the years ended December 31, 2025 and 2024, respectively.
This increase was primarily driven by an increase of $16.6 million related to acquisitions, an increase of $15.9 million in stock based compensation expense, primarily related to the expensing of the unamortized value of executive team stock appreciation rights (SARs), which were canceled on December 31, 2024, with the remaining changes due to inflationary increases and investments in IT infrastructure.
These increases were partially offset by a decrease of $22.5 million in stock based compensation expense, primarily related to the expensing of the unamortized value of executive team stock appreciation rights (SARs) in the prior year. 42 See Item 7A.
Remediation and Reuse segment revenues for the year ended December 31, 2024 increased compared to the year ended December 31, 2023, primarily driven by acquisitions which contributed $68.0 million to the increase in revenues in 2024. These increases were partially offset by $17.2 million revenue decrease in our existing business, primarily attributable to lower treatment technology revenues.
Organic growth was driven primarily by growth in our water treatment business partially offset by lower revenues in our renewables business, which we are winding down due in part to regulatory uncertainty and declining demand. Renewables revenue was $2.8 million and $12.6 million for the years ended December 31, 2025 and December 31, 2024, respectively.
Removed
This discontinued lab, which was included in our Measurement and Analysis segment, did not generate any material revenue during the year ended December 31, 2022. During the second quarter of 2022, we determined to exit all legacy water treatment and renewable energy operations and maintenance contracts, collectively, the Discontinued O&M Contracts.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

6 edited+0 added−0 removed4 unchanged
Biggest changeWe expect to continue to raise prices if direct costs continue to increase, and although inflation has increased our Selling, general and administrative expense in the year ended December 31, 2024, we do not believe over a longer period of time that inflation will have a material effect on our business, financial condition or results of operations.
Biggest changeWe expect to continue to raise prices if costs continue to increase, and as a result, we do not believe over a longer period of time that inflation will have a material effect on our business, financial condition or results of operations.
When the U.S. dollar strengthens, the opposite situation occurs. Additionally, previously invoiced amounts can be positively or negatively affected by changes in exchange rates in the course of collection. A 1.0% increase or decrease in the U.S. dollar exchange rate would impact revenues by approximately $1.5 million and would have a negligible impact on annual net (loss) income. 58
When the U.S. dollar strengthens, the opposite situation occurs. Additionally, previously invoiced amounts can be positively or negatively affected by changes in exchange rates in the course of collection. A 1.0% increase or decrease in the U.S. dollar exchange rate would impact revenues by approximately $1.5 million and would have a negligible impact on annual net (loss) income. 51
In the year ended December 31, 2024, we also experienced, and continue to experience, higher labor costs as a result of inflation. We believe we have successfully raised prices in businesses with short term contracts to offset these inflationary effects.
In the year ended December 31, 2025, we also experienced, and continue to experience, modestly higher labor costs as a result of inflation. We believe we have successfully raised prices in businesses with short term contracts to offset these inflationary effects.
Inflation Risk We experienced, and continue to experience, higher labor and significantly higher travel and other direct costs in the fiscal year ended December 31, 2024 and December 31, 2023 as a result of inflation, particularly in our Measurement and Analysis and Remediation and Reuse segments.
Inflation Risk We experienced higher labor and significantly higher travel and other direct costs in the fiscal year ended December 31, 2024 as a result of elevated inflation, particularly in our Measurement and Analysis and Remediation and Reuse segments.
Based on our overall interest rate exposure to variable rate debt outstanding as of December 31, 2024, which factors in our interest rate swaps on $150.0 million of debt, a 1.0% increase or decrease in interest rates on the term loan, aircraft loan, and revolver would impact our annual income (loss) before income taxes by approximately $0.7 million.
Based on our overall interest rate exposure to variable rate debt outstanding as of December 31, 2025, which factors in our interest rate swaps on $200.0 million of debt, a 1.0% increase or decrease in interest rates on the term loan, aircraft loan, and revolving line of credit would impact our annual income (loss) before income taxes by approximately $0.9 million.
Foreign Exchange Risk Foreign exchange risk exposure arises because we sell our services throughout the United States, Canada, Australia and Europe. Our exposure to this risk has increased significantly due to our acquisitions of Paragon and Matrix in Canada, EPIC in Australia, and to a lesser extent, Vandrensning in Europe.
Foreign Exchange Risk Foreign exchange risk exposure arises because we sell our services throughout Canada and Australia. Our exposure to this risk increased significantly due to our acquisitions of Paragon and Matrix in Canada and Epic in Australia.

Other MEG 10-K year-over-year comparisons