Montrose at 45th Annual William Blair Growth Stock Conference: Strategic Growth Insights

On Wednesday, June 4, 2025, Montrose Environmental Group (NYSE:MEG) presented its strategic vision at the 45th Annual William Blair Growth Stock Conference. Led by CEO Vijay Mantraphicata and CFO Alan Dix, the discussion highlighted Montrose’s robust growth trajectory and strategic priorities amidst evolving political and economic landscapes. While the company has paused acquisitions, it remains optimistic about organic growth and regulatory tailwinds.

Key Takeaways

• Montrose has achieved an average annual growth of 25% since its IPO in 2020.
• The company projects 7-9% organic revenue growth, with EBITDA growth expected to surpass this rate.
• Montrose’s customer retention rate is a strong 96%, with significant cross-selling opportunities.
• The company is focusing on debt repayment and strategic acquisitions as part of its capital allocation strategy.
• Recent policy changes are viewed as favorable, with potential growth in the PFAS treatment segment.

Financial Results

• Growth Metrics:

- Average annual growth since IPO: 25%

- Organic growth contribution: ~13% annually

- EBITDA growth exceeding organic revenue growth

- Customer retention rate: 96%

• Revenue Composition:

- US Federal revenue: 2.5-3% of total revenue

- International business (Canada, Europe, Australia): 20% of revenue

• Growth Outlook:

- Projected organic revenue growth: 7-9%

- Organic EBITDA growth: more than 7-9%

- Cash flow conversion: over 50% of adjusted EBITDA

• Margin Improvement:

- Remediation reuse segment (treatment): Target margin of over 20% (currently in mid-teens)

• Debt Repayment:

- $182 million of preferred stock repaid in the last two years, maintaining leverage below 3x

Operational Updates

• Customer Base:

- 6,000 customers with no single dominant client year-over-year

• Cross-Selling:

- Only 2% of customers use more than two services, indicating potential for growth

• Acquisitions:

- Paused for the current year to focus on internal operations

• Technology Investment:

- 24 patents with pending applications

- Software for predicting air and water quality issues

Future Outlook

• Growth Strategy:

- Focus on deepening penetration within the existing customer base

- Target high single-digit organic revenue growth

• Margin Expansion:

- Driven by operating leverage and process optimization

• Capital Allocation:

- Debt repayment

- Strategic acquisitions

- Growth CapEx

- Potential stock repurchases

• PFAS Opportunity:

- Significant potential, not included in the 7-9% growth forecast

Q&A Highlights

• Policy Impact:

- More tailwinds than headwinds from recent policy changes, especially regarding PFAS regulation

• PFAS Regulations:

- EPA’s four part per trillion level for PFAS and PFOA provides clarity for clients

• Regulatory Environment:

- State regulations are increasingly influential

- Supreme Court Chevron decision acts as a stabilizing factor

• Competition:

- Montrose differentiates itself by integrating consulting, testing, and treatment services, unlike competitors with fragmented offerings

For further details, readers are encouraged to refer to the full conference call transcript.

Full transcript - 45th Annual William Blair Growth Stock Conference:

Tim Mulrooney, Research Analyst, WilliamBlair.com: Alright. I think we’re gonna get it kicked off here. It’s 04:00. Good afternoon, everyone, and welcome. My name is Tim Mulrooney.

I’m the research analyst here that covers Montrose. I’m required to inform you that for a complete list of research disclosures or potential conflicts of interest, please visit our website at WilliamBlair.com. So Montrose is a provider of integrated environmental solutions across three segments, consulting, testing, and remediation. And I’m really excited to be hosting the company today because I think it’s an interesting time. There’s been a lot of noise in the marketplace, which can be difficult sometimes to separate from, the noise from all the signals.

And there’s also been a lot of change at the company near term, a pause on m and a, focusing on cash flow, focusing on organic growth. But if you take a step back and you look at it, core organic growth was high single digits last year, looks to be high single digits this year. So I’m really excited to get CEO Vijay Mantraphicata and CFO Alan Dix here so we can dig into all of this with them. This format’s a formal presentation followed by a a breakout session, which will be held in the Adler Room. We’ll probably do this a little bit differently, maybe take ten minutes, on on a overview of the company and then do more of a fireside chat q and a.

So with that, we’ll get started. Welcome, Vijay and Alan.

Vijay Mantraphicata, CEO, Montrose: Great. Thanks, Tim. Thanks, Tim. It’s wonderful to see all of you, and thank you so much for joining us kinda right before drinks. We really do appreciate you being here and listening to us.

I thought in the interest of just providing a quick overview of who we are and what we do, we’d give you a quick synopsis. And then as Tim said, open it up to Q and A. We’ve had some incredible conversations with some of you already. A few of you know us quite well, and other faces look new. So just bear with me if some of this is redundant for those of you that know the Montrose story.

I thought I’d break it up into kind of four key questions. What is Montrose, which for folks that are new to the story, we get that a lot. How do we drive economic value, especially in this day and age and given a lot of the questions we got earlier today? How do we do through political and economic cycles? And why do we have conviction?

And what does our outlook look like for this year and into the next couple of years given what we’re seeing out in the marketplace. So I’ll start with what is Montrose, and I would just kind of give you three themes to kind of keep in mind. One is that we are a pure play environmental science and technology company. And what I mean by that is that our revenue and our earnings come from helping our clients address environmental challenges primarily related to air quality, water quality and soil quality. And, we have, over the last couple of months, repeatedly been told that we bring a practical environmentalism, that folks are pretty excited about as we look to see how environmental stewardship and value creation and economic development go hand in hand, right, for Planet, for Progress.

The other theme that I think is important that I wanna make sure, you hear loud and clear is that we are we are a unique integrator of services, in the environmental space, specifically consulting services, testing services, and treatment services. That combination of services does not really exist in the marketplace today. It is something our clients are repeatedly saying they’re looking for, and that is unique in what is a very large addressable market. And that combination of services matters, as you’ll see in subsequent slides, because our clients say they want it. Right?

So when we when we surveyed prospective clients, 85% of them said they’re looking for this kind of integration of services. Interestingly for us, 75% said they have no idea where to find it. So our brand is not well known, but the opportunity set and the and the opportunity in front of us because of our business model is real, and it’s there. The other dynamic I think that’s important to to share with you is that we are primarily private sector oriented, which is relatively unique in the industry. And so our client base is, you know, call it the Fortune 500 type of companies.

It’s diversified, and we’ll talk more about that in a second. And then the last theme that I think is worth noting is that we are pretty heavily invested in and have accrued the benefits of investments in IP and software. On the intellectual property side, we have 24 patents, a slew of them, still pending, which we’re excited about. On the software side, we are starting to see the early benefits of a move we made several years ago using the combination of sensors, software, and machine learning to predict air quality and water quality issues that our clients may face. So that’s kinda Montrose in a nutshell.

As you think about what drives our value, I’d kinda give you a couple of highlights. The first is that we’ve been growing on average since our IPO in 2020 approximately 25% a year, which which we are excited about. And as we look forward, we continue to see some real opportunities. Our organic growth of that 25 ish percent is about 13, so it’s about half, per year. And our EBITDA has been growing even faster than that organically.

And that organic growth is driven by strong customer retention, and so we we publish this data every year, and the numbers have been kind of increasing steadily since we’ve been public. But we’re about 96% of revenue from our clients from the prior year repeats in the next year. It’s not necessarily customer loss that makes up the last 4%, but the nature of some of projects that we do. Our customer retention rates tend to be very strong unless we have a quality lapse or a safety lapse, and we can talk more about that if it’s of interest. It also, that organic growth is also driven by some of the success we’ve been seeing on the cross selling side.

So because of that unique combo of consulting, testing, and treatment, we’ve been able to service our customers kind of individually, per service or per segment at the beginning and then to transform that into a broader opportunity set. So so said otherwise, our organic growth is largely coming from our existing customer base. We have about 6,000 customers. And this is a question we get often. No one customer is ever are the same top customer year in and year out.

So if you kinda go back to 2020 when we started disclosing this information publicly, the top customer every year since then has been different, which we find encouraging because it suggests that the diverse business model and our end market diversity is really starting to is starting to accrue to our benefit. And not only is our customer retention strong, but part of the reason we’re excited, and this is perhaps more of an opportunity than is something to to talk about as a strength of ours, our customers don’t know that we exist. So when we think about this combination of lack of brand awareness and the fact that when we look at our 6,000 customers, only 2% of them use more than two of our services, and we have over a dozen technical service offerings that we could provide to them. We’re sitting on a pretty large addressable opportunity that is really ours to tap into and a function of how well we execute against that. So we don’t really need new customers, and Tim alluded to this in his seven to 9%.

Of our optimism, which you’ll which we’ll get into in a few minutes, we don’t really need new customers to continue to grow at this pace into the foreseeable future. New customers are all upside optionality for us. Our seven to nine is predicated largely on getting deeper into our existing incumbent customer base. And then from a value creation perspective, we’ve talked about this historically. It is less of a a dynamic for us this year, but we’ve been consolidating a very fragmented industry.

So we’ve been acquiring small companies. We tend to buy them at, mid to high single digit EBITDA multiples and, in our hands, grow revenue and EBITDA quite attractively. We’re pausing acquisitions this year, but they have historically been quite accretive to our story, both financially and strategically. So those are kind of the, you know, strong organic growth for all the reasons I talked about, both top line and and EBITDA, but also from a consolidation and acquisition perspective. So that’s that’s our value engine.

And then the last two themes that I’ll touch on before we head to q and a, and Ali will certainly jump in, is we get a lot of questions around the Trump administration and what the current economic dynamics and political dynamics look like. And I think, you know, this slide is important just to put some of that history in context. We grew solidly through Trump one point o. In fact, we went public at the end of the first Trump administration. We do expect solid organic growth this year.

I said this publicly, and some folks laughed when I said it. It is certainly starting to prove out. We expected and we are seeing more tailwinds than headwinds from some of the administration’s actions, which for our industry has surprised many of our followers. And so we are quite optimistic, and we do see the current set of policies continuing to create tailwinds for our business. Not only are at the federal level are we seeing more tailwinds than headwinds, but state regulations are taking on a more prominent role.

They’re staying quite steady. And if you kinda combine the opportunities from the federal side with the steadiness and the increased importance of the state side, you can see why in The United States, in particular, we are quite upbeat about what the next couple of years looks like for us. That has been further validated as we’ve talked about, in our public comments, through our conversations with many, many customers who have almost to a customer said they are largely staying the course. So no major shifts in their strategy, their approach. They are obviously paying a lot of close attention to the what’s happening from a regulatory perspective and in the marketplace, but we’re not really seeing from them nor are they saying to us that they’re shifting their cadence or outlook at this point, which for us is very encouraging.

And then something that came up quite a bit today, I jotted this down in my notes, despite all of the political rhetoric, the regulations that underpin most of our work are not really in the political crosshairs. So there’s kind of broad bipartisan support around the importance of a lot of this. And, not only are the regulations continuing apace, but the adherence to the regulations by our client base is continuing apace. So kind of a certainly a different dynamic than many folks expected, right, kind of as we approach the election last year and as we looked out at the beginning of this year, but we’re starting to see a lot of that manifest. We did get a fair number of questions around the Supreme Court Chevron decision on the overturn last June.

That is actually proving to be, as we said it would, a fantastic governor of some of that political whipsawing. It’s created more certainty as to exactly how the courts are gonna rule on some of these matters. It’s going on as expected, and it is actually serving as a governor against some of the whipsawing from the Biden to the Trump administration. It is a large part of why the regs haven’t really changed because they have to be statutorily adjusted and why, therefore, our clients are not really changing behavior. And then last but not least, sorry, we did get some questions around what a lot of the onshoring and the industrial activity pickup means for us, and it means tailwinds.

So we didn’t anticipate some of that. When we have guidance, we’re starting to see some of the benefits of that as this year unfolds. So that’s kind of what the administration currently means for us here in The United States. Our ex US business, which represents around 20% of Montrose, is growing really nicely in Canada, Europe, and Australia. There is certainly a little bit of an anti American sentiment we’re seeing in some of our markets, which we’re trying to navigate through, but all of that’s already baked in to our assumptions.

And because of our highly local presence, we’re largely insulated from a lot of that, which I can talk through if it’s of interest. Which leads me to our outlook, and then we’ll kind of Alan, you should share a couple of thoughts, we could open up to q and a, which is look. I talked about us growing about 13% organically. Our public, commentary speaks to seven to 9%, organic revenue growth and organic EBITDA that’s gonna grow in excess of that seven to 9% organic revenue. We will, and expect to deliver margin accretion this year.

Cash flow, both operating and free cash, should be a nice step up, twenty four to ’20 ’5. You you’ll see a clean balance sheet given some of the feedback we had gotten from many of you, and we’re excited about how that’s gonna progress. We’ve already announced our changes some of the changes we made at the beginning of q two. You’ll see more in q three and q four. And if you kinda put all that together, right, solid top line growth organically, strong performance on the margin side, cash flow, and clean balance sheet.

That’s a you know, with the acquisition pause, we’ve got a fantastic opportunity to look inward and really continue to tweak our operations internally to kinda show what this engine can create, and we’re pretty excited to share that with you as the quarters progress. So that’s kinda Montrose in a nutshell. Alan, is there anything else you think we should touch on?

Alan Dix, CFO, Montrose: Yeah. I can just talk about capital allocation and and kind of a longer term outlook. We’ve publicly said we’re gonna pause acquisitions this year. That’s allowing us to really focus on the core business, how we operate the organization structure, a lot of the margin and revenue opportunities, simplify the balance sheet. Vijay mentioned fully repaying the pref.

We will have repaid all of the hundred and $82,000,000 of pref in the last two years without levering above three times. So we should exit 2025 in a very strong balance sheet position, which will then allow us to get back to acquisitions if they make strategic sense, growth CapEx, or if neither of those opportunities are there and there continues to be a dislocation in the stock price, we have a stock repurchase program that’s been authorized. We should continue to grow at seven to 9% over the foreseeable future. That excludes what could be a sizable PFAS opportunity over that time frame. We expect cash flow conversion to be above 50% of adjusted EBITDA, and we expect free cash flow as a percentage of operating cash flow continue to improve year on year over that five year period.

And then margins, which have improved over the last few years, will be better this year than last year, will continue to improve over the five year period benefiting from both operating leverage. Our corporate infrastructure is largely fixed. The operating process optimization will improve our operating margins. And then our remediation reuse segment or our treatment segment runs at subscale margins, runs mid teens, should run north of 20% margins, and should be by far the largest growth engine over a five year period. So we’ll benefit from both margin improvement and revenue mix.

Those four levers should enable us to get margins up substantively from where they are today.

Vijay Mantraphicata, CEO, Montrose: Tim, that’s it. That was a great overview of it is there.

Tim Mulrooney, Research Analyst, WilliamBlair.com: Yeah. Well, I mean, you front run all my questions, so I guess we’re done. No. That was really helpful. Thanks, guys.

That was a great overview. I guess, Vijay, one of the things I wanna double click on is the comment that you made several times that the recent, you know, policies that are being proposed in past are creating more tailwinds than headwinds. I I I do agree. Like, when people hear that, I think they scratch their head a little bit. I understand it a little bit because we’ve had some time to talk about it, but I think it is there could you maybe give some examples

Vijay Mantraphicata, CEO, Montrose: of where Got you.

Tim Mulrooney, Research Analyst, WilliamBlair.com: The the those, you know, tailwinds are emerging that may not be so obvious?

Vijay Mantraphicata, CEO, Montrose: Yeah. We, I mean, one of the topics, Tim, that we got a lot of questions around, so I presume it’s of interest to most folks here, during kind of our one on ones or, you know, two on ones, three on ones today, was around PFAS, right, as an example. So just looking back at the history, and you’re obviously intimately familiar with this, from, call it, mid twenty twenty three to today, there’s been this relatively large question mark as to what the federal government’s gonna do. It was expected that the EPA would promulgate regulations in that q three twenty three time frame. They didn’t.

It came out April of twenty four. ’2 months later, the Chevron decision got overturned. Four months later, right, we have a new president. There’s this huge deregulatory push, and there was just lots of, you know, what is gonna happen type of dynamic. And our clients, as a result, many of them are in wait and see mode, doing more assessment and testing, but not really jumping to to start making decisions.

With administrator Zeldin’s the the the administrator of the US EPA with his recent press release around PFAS, a couple of dynamics came out. One is they are gonna keep the four part per trillion level for PFAS and PFOA. They’re removing the Haas index, but, they are likely gonna continue regulating it under the circular regulations. And what that’s effectively signaled is that, and and we were surprised that they kept it at four. We thought that that was likely gonna get lifted.

And there seems to be kind of bipartisan consensus that this is an issue. The fact that they’re keeping it at very stringent levels was, surprising to us, but surprising to the upside. And as a result of that, the trains effectively now clearly left the station. Right? And folks feel comfortable starting to make decisions around what that treatment process looks like.

We are upstream of those drinking water regulations, so we’re dealing with everyone kind of leading up to that. And so now they know. Right? Like, the treatment thresholds are gonna be pretty stringent. You’re gonna need some scalability and the ability to dial up the ability to treat, and state regs are much more pronounced now with some states like Illinois at two part per trillion.

And and all of that kind of benefits our technology. And so when we say tailwinds, that clarity, right, or relative clarity has created tailwinds for our business, which we’re seeing not only in the growth we expect year on year on the treatment side, which we’ve talked about publicly, but we’re also seeing a much larger activity set at the top of our funnel. So the client inbounds and types of conversations, requests for information, requests for pilots has really started to pick up notice.

Tim Mulrooney, Research Analyst, WilliamBlair.com: Okay. Yeah. So you are starting to see more activity now that there’s that

Vijay Mantraphicata, CEO, Montrose: Yes.

Tim Mulrooney, Research Analyst, WilliamBlair.com: Certainty more certainty in place.

Vijay Mantraphicata, CEO, Montrose: Yeah. And as another example, we, you know, when I say the administration’s policies are creating more tailwinds, industrial activity, and that word doesn’t just mean more CapEx, it could also mean shifts in activity. Right? So foreign, ex US companies either pulling back or investing more in depending on the industry or American companies stepping up production. All of that activity drives demand for our services, and we’re seeing that in ways we didn’t forecast because we didn’t know, right, pre president Trump getting inaugurated and having policies getting implemented.

So we’re seeing, really nice tailwinds, and projects start that weren’t really in our crosshairs nine months ago. That is incremental to what we expected when we came out with our guidance. So those are two examples of more tailwinds than headwinds. When I say headwinds, when we saw the first Trump administration in ’20 kind of, you know, the seventeen to twenty time frame, we saw a lot of the regulatory pullback resulted in the testing part of our business slowing down relative to historical growth rates. And so we thought we would see something similar this year.

We have not seen any indications of that really happening. And you saw kind of our you know? And I do think it’ll take some time to truly manifest, but that segment is as hot as it’s ever been.

Tim Mulrooney, Research Analyst, WilliamBlair.com: That’s growing Yeah. What, mid teens, double digits? Yeah. So

Vijay Mantraphicata, CEO, Montrose: so those are kind of quantitative and illustrative examples of what I’m talking about.

Tim Mulrooney, Research Analyst, WilliamBlair.com: Okay. That’s helpful.

Vijay Mantraphicata, CEO, Montrose: Is that fair? Yeah. Else you’d to Yeah.

Tim Mulrooney, Research Analyst, WilliamBlair.com: And another, I think, misconception is this idea that you know? Because I think you get grouped together with the comps, some of the other players in the space that have significant exposure to federal revenue. Can you talk a little bit about what your mix is for federal revenue? What the because, you know, sometimes you see these headlines about, oh, cuts to federal, and your stock will will react to that. So I think it’s it probably worthwhile to take a moment to talk about what is your exposure to federal revenue, and then maybe what is your exposure to some of the other end markets like energy, for example, if we do go through this unleashing America’s energy independence?

What would it look like for you? It’s a

Vijay Mantraphicata, CEO, Montrose: great question. So when we think of federal, just to be specific, I guess you’re asking a US federal.

Tim Mulrooney, Research Analyst, WilliamBlair.com: US federal.

Vijay Mantraphicata, CEO, Montrose: Us, we have we kind of bucket it all into a category of public sector, which includes the Australians, the Canadians, right, the Europeans, and the state governments, local governments, because we don’t do a lot of public sector work. The US government, in all of the publicly disclosed data, I think, is low single digit percent of revenues at two and a half, 3%. Okay. So de minimis impact, we don’t really whipsaw one way or the other depending on what the federal government does. On top of that, our work is largely nondiscretionary.

So, you know, if if a if water quality on an air force base is contaminated and our servicemen and women are drinking contaminated water, that doesn’t really get impacted by, kind of the the spending cuts that folks are proposing, and that is we have not seen any pullback in any of that activity. In fact, we’ve actually seen awards come out and requests for work to continue. That is not in any of our numbers, Tim. We’ve gotten, you know, some of these recent wins, which we’ve disclosed publicly. Yep.

We’re one of a group of folks that have gotten them, so it’s not just us. You know, if they if those come through, that’s that’s great, and that’s upside. If they don’t, it’s not in our any of our forecasts or numbers to begin with. What we are excited about is that as we mature, as our technology and our capabilities become more recognized, we’re winning these as kind of prime providers. Whereas, historically, we were always a sub to someone else.

Tim Mulrooney, Research Analyst, WilliamBlair.com: Interesting. Okay. That’s helpful. And maybe we could also, while we’re talking about this, dig into the cross sell. You talked about, like, a lot of the growth could come from cross selling your 6,000 customers.

Yeah. One example I think about is the fact that now all the drinking water systems, all, what, 60,000 drinking water systems in The United States, they all need to have some sort of insight into what their PFAS exposure is because it looks like the four parts per trillion is here to stay.

Vijay Mantraphicata, CEO, Montrose: Yep.

Tim Mulrooney, Research Analyst, WilliamBlair.com: I know you don’t do a lot of treatment with those folks, but I imagine you’re gonna help support some of them as they with their testing and the consulting. Maybe. I I don’t know. You could talk about that. But then would that lead into cross selling some of your treatment later on, or maybe you could give some other examples of where you think the low hanging fruit is on the cross selling for your business more broadly even outside of PFAS?

Vijay Mantraphicata, CEO, Montrose: Yeah. No. It’s a it’s a great question. So we, on PFAS that’s right. So we’ve seen a fair amount of activity.

In fact, a lot of the organic growth we referenced in our testing segment, a good chunk of it was a function of this uptick in drinking water related measurements that our labs were doing. Even though we don’t treat that water by design. That’s not a focus. We are seeing a fair amount of activity from it. And we are you know, we’ve talked about this.

We’ve seen kind of five consecutive quarters of growth in our PFAS, as a as a market, right, market, and performance. And we certainly expect all three of those consulting, testing, and treatment to grow year on year for all the reasons we talked about. Mhmm. And, yes, we are already seeing the benefits of us having helped measure or assess the risks or contamination levels. Now the question is natural, which is can you guys help us clean it up, which includes, in select instances, some of the larger municipalities or drinking water public drinking water systems that have either higher concentrations or an appetite to think about kinda long term, life cycle costs of something as opposed to just the upfront.

So it’s been really encouraging to see that dynamic. And, again, we’re really cautious about whether we wanna really dive into that, but those conversations are also opening up. Yeah. And then a lot of them what we talked about historically with three m and building the largest, treatment facilities in the world for PFAS, those are examples of cross sell. Right?

That those opportunities came to us through cross selling efforts.

Tim Mulrooney, Research Analyst, WilliamBlair.com: Okay. And what about, you know, a question I get a lot is around all these proposed cuts, you know, Lee Zeldin’s list of 31 or 35 priorities. I noticed that, basically, only one are around water. Most of them are around air. Yeah.

And, you know, you guys have a large air practice. So, you know, we’ve talked about some of the opportunities. Let’s talk about some of the risks. The likelihood of these things passing, I think I don’t know. Maybe you have some insight on that.

But, you know, how how do you think about that potentially impacting your business or not? Because I know that some of these are kind of baseline regs where the state regs are higher, but I think that’s another common misconception we could talk about.

Vijay Mantraphicata, CEO, Montrose: Yeah. Yeah. We, so if you kinda think about the underpinnings of the Clean Air Act or the underpinnings of some of the hazardous air pollutants, those those most of those have been around a long, long time. Yeah. And that’s most of what makes up our revenue.

Most lot of the attention we get and the discussions we have is usually around greenhouse gases because that’s clearly in, you know, president Trump’s and and administrator Zeldin’s crosshairs, and then some of the recent rules that target specific industries, whether it’s the coal industry or selected parts of the energy industry. We have not seen any material pullback in any of our key air testing work streams. Areas where we’ve seen some movement or, you know, it was an interesting, work choice by one of our conversations earlier today, air pockets. As an example, Tim, would be the ethylene oxide regulations. Right?

They they the implementation of which were pushed out. And those are examples of when administrator zealots has reconsider. Right? It has to be reconsidered because it has to be changed if it’s statutorily defined, and that’s not up to the administration. But the administration can dictate for newer regs what the the compliance deadlines are, and they have in some instances done that.

So in those instances, we may see some pullback in terms of how quickly folks adopt technology to to measure or, address, emissions. But that is overwhelmingly overshadowed by the tailwinds, which is just a continuation of and then all the demand cycles we talked about now. So everything we talk about is net of those types of potential pressure points. So it’s not that it’s not there. It’s just there’s more tailwinds than headwinds, if that makes sense.

Yep. That makes sense. Interestingly, with greenhouse gases, our energy clients who have certainly stepped up activity have not pulled back at all, neither in Canada nor in The United States with their greenhouse gas emissions measurements. So whether it’s source emissions testing, leak detection and and testing, sensor based monitoring, none of that has really slowed down. And our labs, which do a lot of air quality work, have also started to see continued are continuing to see continued organic growth opportunities there.

So on the air side, we are a dominant player. And for all the reasons I talked about earlier, right, the rules are the rules. The the state regulations continue to hold. Everyone’s kinda know? And but in every conversation with clients, including our major energy clients, we just met a couple of weeks ago with the general counsel of one of the largest ones.

And it was like, look. Until we’re told not to, we gotta plan over a longer life cycle and time frame, and we’re just staying the course. We’ve already invested the capital. Right? We’re already doing the work.

Like, we’re not stopping till someone tells us we have to stop.

Tim Mulrooney, Research Analyst, WilliamBlair.com: Makes sense. Okay. Well, in the short time we have left, you know, is there anything out in the crowd? Any question before we head to the breakout? Go ahead, Yokim.

Alan Dix, CFO, Montrose: Yeah. Sorry.

Vijay Mantraphicata, CEO, Montrose: Sort of slightly for the

Alan Dix, CFO, Montrose: revenue, it’s about, like, 25%. The stock price is flat. Change that. This is what needs to happen.

Vijay Mantraphicata, CEO, Montrose: Yeah. It’s a great question. We we took a pummeling. Well, there’s a couple dynamics. We we went public in the middle of twenty twenty at ’15.

And from 2020 to the end of twenty twenty one, the price ran north of 75 on the back of our response business really surging and taking advantage of a pretty unique market opportunity that we were very clear about would not repeat. Once that finished, even though we said it would not repeat, right, there was certainly some disappointment that it did not repeat, which was natural, and we certainly dealt with that. And then as we kind of approached June of last year, right, the price was starting to come back up on the back of Ray’s guidance, and we were around $50 48, 50 bucks a share. And then when the Supreme Court decision came out June, from that point to the July, we lost 70% of our market cap, and we had no business news that came out on the back of it. We got hit with a short attack shortly thereafter.

Right? We got downgraded, as a result of the Trump election before our results came out. And, you know, so we effectively to your point, you’re exactly right. We saw a fair amount of pressure and pain kind of from June to call it, right, the early part of this year. We announced results in February.

There seemed to have been a really solid reaction to that, then there were some kind of negative news or perceived negative news related to a lot of what we talked about with administrator Zeldin, and then we announced q one. And it feels like we’re on the back end of a lot of that noise as we continue to deliver the quarters predictably and candidly beat and raise and beat and raise. Right? I think some of that credibility and our ability to show all the things we’re saying are actually manifesting and coming true. I think you guys

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.