Montrose Environmental(US:MEG)2025-11-04 21:30Financial Performance - Revenue for Q3 2025 was $224.9 million, a 25.9% increase from $178.7 million in Q3 2024, driven by strong organic growth and acquisitions[4] - Net income for Q3 2025 improved to $8.4 million, or $0.21 EPS, compared to a net loss of $10.6 million, or $0.39 LPS, in the prior year[4] - Adjusted Net Income for Q3 2025 was $14.2 million, with an Adj EPS of $0.36, down from $19.1 million and $0.41 in Q3 2024, primarily due to higher income tax expenses[10] - Consolidated Adjusted EBITDA for Q3 2025 was $33.7 million, a 18.9% increase from $28.3 million in Q3 2024, with a margin of 15.0%[11] - Revenue for the first nine months of 2025 reached $637.3 million, a 25.6% increase from $507.3 million in the prior year[12] - Net income for the first nine months of 2025 was $7.4 million, or $0.08 EPS, compared to a net loss of $34.1 million, or $1.30 LPS, in the prior year[14] - Adjusted Net Income for the first nine months of 2025 was $45.0 million, with an Adj EPS of $1.03, up from $38.6 million and $0.80 in the prior year[15] - Total revenues for the three months ended September 30, 2025, were $224.888 million, an increase from $178.687 million in the same period of 2024, representing a growth of 25.8%[31] - Adjusted EBITDA for the three months ended September 30, 2025, was $47.131 million, with a margin of 21.0%, compared to $36.213 million and a margin of 20.3% in 2024[31] - For the nine months ended September 30, 2025, total revenues reached $637.265 million, up from $507.337 million in 2024, indicating a year-over-year increase of 25.6%[31] Guidance and Expectations - The company increased its full-year 2025 revenue guidance to a range of $810.0 million to $830.0 million, representing an 18% growth at the midpoint compared to 2024[6] - Full-year 2025 Consolidated Adjusted EBITDA guidance was raised to a range of $112.0 million to $118.0 million, indicating a 20% growth at the midpoint compared to 2024[6] - The company expects to continue organic growth, excluding revenues from environmental emergency response and acquisitions for the first twelve months following acquisition[39] - The company anticipates variability in certain items impacting future GAAP financial results, including stock-based compensation and income tax expenses[38] Balance Sheet and Liquidity - As of September 30, 2025, Montrose's leverage ratio was 2.7x, with $198.5 million of available liquidity[19] - Total assets as of September 30, 2025, were $985.7 million, slightly down from $990.4 million at the end of 2024[27] - Cash and cash equivalents decreased to $6.7 million from $12.9 million at the end of 2024[27] - Total liabilities increased to $527.0 million as of September 30, 2025, compared to $451.2 million at the end of 2024[27] - The company’s total stockholders' equity increased to $458.7 million as of September 30, 2025, from $446.3 million at the end of 2024[27] Operational Performance - Net cash provided by operating activities for the nine months ended September 30, 2025, was $55.5 million, a significant recovery from a net cash used of $9.7 million in the same period of 2024[29] - EBITDA for the nine months ended September 30, 2025, increased to $72,402,000, up from $19,217,000 in 2024, reflecting a significant improvement in operational performance[48] - Free cash flow for the nine months ended September 30, 2025, was $38,794,000, a turnaround from a negative free cash flow of $38,590,000 in 2024[52] - Net cash provided by operating activities for the nine months ended September 30, 2025, was $55,548,000, a significant increase from a cash outflow of $9,721,000 in 2024[52] Income Statement Details - The company reported a basic net income per share of $0.24 for Q3 2025, compared to a loss of $0.39 per share in Q3 2024[25] - The company’s accumulated deficit improved to $(265.3) million as of September 30, 2025, from $(272.7) million at the end of 2024[27] - The company reported a net income of $8.378 million for the three months ended September 30, 2025, compared to a net loss of $10,564 million in the same period of 2024[42] - The Adjusted Net Income for the three months ended September 30, 2025, was $14.212 million, compared to $19.057 million in 2024, reflecting a decrease of 25.0%[42] - The Adjusted Net Income attributable to stockholders for the nine months ended September 30, 2025, was $40.835 million, an increase from $30.261 million in 2024, representing a growth of 35.0%[42] Expenses and Costs - Interest expense for the three months ended September 30, 2025, was $5,039,000, compared to $4,137,000 in 2024, reflecting an increase in borrowing costs[48] - Income tax expense for the three months ended September 30, 2025, was $7,281,000, significantly higher than $1,368,000 in the same period of 2024[48] - Depreciation and amortization for the nine months ended September 30, 2025, totaled $39,015,000, compared to $37,408,000 in 2024, indicating a slight increase in asset depreciation[48] - Acquisition costs for the three months ended September 30, 2025, were $754,000, down from $2,764,000 in 2024, suggesting a reduction in acquisition-related expenses[48] - The company reported a fair value change in financial instruments of $(10,354,000) for the three months ended September 30, 2025, compared to a gain of $3,946,000 in 2024, indicating volatility in financial instruments[48]