Montrose Environmental Group (MEG) Q4 2024 earnings summary

Executive summary

• Achieved record 2024 revenue of $696.4 million, up 11.6% year-over-year, with 8.3% organic growth and a 96% revenue retention rate for the third consecutive year.

• Consolidated adjusted EBITDA grew 21.9% to $95.8 million, with margin expansion to 13.8% of revenue; adjusted net income reached $55.8 million.

• Q4 2024 delivered highest-ever quarterly revenue of $189.1 million (up 14.1%) and adjusted EBITDA of $27.2 million (up 55.8%), driven by organic growth and acquisitions.

• International revenue grew to 20% of total, up from 4% in 2021, with strong performance in Canada, Australia, and Europe.

• No material issues found in independent review of short report allegations; no amendments or restatements required.

Financial highlights

• Q4 revenue reached $189.1 million, up 14.1% year-over-year; full-year revenue up 11.6% from 2023.

• Q4 consolidated adjusted EBITDA was $27.2 million (14.4% margin), up from $17.5 million (10.5%) in prior year quarter.

• Diluted adjusted net income per share was $1.08 for 2024, up slightly from $1.07 in 2023; Q4 adjusted EPS was $0.29, up from $0.27.

• Cash flow from operating activities was $22.2 million, down from $56 million in 2023, mainly due to increased working capital and delayed collections.

• Corporate costs reduced to 5.9% of revenue (from 6.1% in 2023).

Outlook and guidance

• 2025 revenue guidance set at $735 million–$785 million; consolidated adjusted EBITDA expected at $101 million–$108 million.

• Organic growth expected to remain at 7%–9% annually, with over 50% EBITDA-to-operating cash flow conversion.

• Environmental emergency response revenue projected at $50 million–$70 million, similar to 2024.

• Guidance incorporates steady margin performance and continued focus on cash generation.

• Guidance excludes potential benefits from future acquisitions.