By the numbers: Q3 2025
Revenue: $224.9M
Up 25.9% year over year
Net income: $8.4M
Compared with a net loss of $10.6M in Q3 2024
Consolidated adjusted EBITDA: $33.7M
Up 18.9% YoY
- Financial picture: During a Q3 earnings call on Wednesday, Montrose reported a third consecutive quarter of what CEO Vijay Manthripragada described as “record performance,” including in free cash flow generation, noting strong organic growth and key demand from waste industry clients looking for water contamination solutions, as well as demand from the energy sector and semiconductor companies on permitting and water access concerns. “This margin accretion is due to both strong organic growth and operating leverage in our consulting, testing and water treatment businesses in particular,” he said.
- PFAS and water treatment services: Montrose continues to see value in its water treatment, research and testing offerings, particularly for PFAS-related services. When the U.S. EPA announced in April that it planned to roll back some parts of its PFAS drinking water standard, it offered some clarity to businesses that were waiting for regulatory certainty before moving forward with projects, he said. Montrose has since seen a “steady increase” in water treatment business, which Manthripragada expects will result in “elevated” organic growth in the sector into 2026 and beyond. For waste industry clients looking for landfill leachate treatment options, “our technology is also applicable across a broader swath of contaminants” beyond PFAS, he said.
- Government shutdown and federal regulatory impacts: Montrose’s business so far has not been significantly impacted by the ongoing U.S. government shutdown, Manthripragada said, noting less than 5% of overall revenue is tied to government spending. State and local governments “have and continue to step in to address gaps and uncertainties left by the U.S. federal government, creating additional opportunities for growth that we did not anticipate at the start of this year.”
- State policy drivers: Though overall policy fluctuations and economic volatility influence the environmental services industry, Montrose’s clients tend to take “practical long-term views,” and must also still comply with state air and water quality laws that are sometimes more strict than federal regulations, he said. “Federal policy seems to have been more than offset by the impact of state regulations,” he said, noting that recent federal volatility has resulted in only “a handful” of clients make changes to their operating policies as a result.
- Guidance: Montrose is raising its 2025 guidance for the third time this year, due in part to “consistent client feedback about the importance of our services to their operations.” 2025 revenue is now expected to be between $810 million and $830 million, adjusted from a previous range of between $795 million to $835 million. Consolidated adjusted earnings before interest, taxes, depreciation, and amortization is now expected to be between $112 million and $118 million, up from a range of $111 million to $117 million.
- Outlook for 2026: Montrose expects fiscal year 2026 consolidated adjusted EBITDA to be at or above $125 million and anticipates improving EBITDA margins compared to 2025, said CFO Allan Dicks. Montrose “deemphasized” acquisitions in 2025, but expects to restart acquisitions sometime in 2026.
