Montrose Environmental Group (MEG) Q4 2025 earnings summary

Executive summary

• Achieved record 2025 revenue of $830.5 million, up 19.3% year-over-year, with 12.7%-13% organic growth and strong cash flow generation, surpassing all strategic objectives and initial guidance.

• Consolidated adjusted EBITDA grew 21.3% to $116.2 million, with margin expansion for the third consecutive year to 14.0%.

• Net loss improved significantly to $0.8 million for the year, compared to $62.3 million in 2024, with adjusted net income rising to $60.7 million.

• Completed full redemption of $122.2 million Series A-2 Preferred Stock, reducing leverage to 2.5x and simplifying the capital structure.

• Entered 2026 with a simplified balance sheet, strong liquidity, and robust demand across all key markets, positioning for resumed bolt-on acquisitions.

Financial highlights

• 2025 revenue reached $830.5 million (+19.3% vs. 2024), with organic growth of 12.7%.

• Full-year adjusted net income was $60.7 million, with diluted adjusted EPS of $1.36, both up from 2024.

• Operating cash flow reached $107–$107.5 million (92.5%–93% conversion of adjusted EBITDA), and free cash flow was $87–$87.2 million (75%–75.1% conversion).

• Leverage ratio reduced to 2.5x, with available liquidity of $225–$225.4 million at year-end.

• Environmental emergency response revenue contributed $77 million in 2025, up from $48 million in 2024.

Outlook and guidance

• 2026 revenue guidance: $840 million–$900 million; consolidated adjusted EBITDA: $125 million–$130 million (~15% margin), with ~8% organic growth at midpoint.

• Targeting 15% adjusted EBITDA margin and high end of 7%-9% organic revenue growth.

• Second half of 2026 expected to contribute 60% of full-year EBITDA due to project timing.

• Free cash flow and operating cash flow conversion expected to remain robust (>60%).

• Guidance assumes no acquisitions in 2026, but plans to resume smaller, highly accretive acquisitions subject to capital allocation.