Montrose Environmental Group, Inc.

pressing the star key followed by zero. After today's remarks, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Adrienne Griffin, Senior Vice President, Investor Relations and Treasury. Please go ahead.

Thank you, Operator. Welcome to our first quarter 2025 earnings call. Joining me on the call are Vijay Montapregada, our President and Chief Executive Officer, and Alan Dix, our Chief Financial Officer. During our prepared remarks today, we will refer to our earnings presentation, which is available on the Investors section of our website. Our earnings release is also available on the website. Moving to slide two, I would like to remind everyone that today's call will include forward-looking statements, subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially due to known and unknown risks and uncertainties that should be considered when evaluating our operating performance and financial outlook. We refer you to our recent SEC filings, including our annual report on Form 10-K for the fiscal year ended December 31, 2024, which identify the principal risks and uncertainties that could affect any forward-looking statements and our future performance. We assume no obligation to update any forward-looking statements. On today's call, we will discuss or provide certain non-GAAP financial measures such as consolidated adjusted EBITDA, adjusted net income, and adjusted net income per share. We provide these non-GAAP results for informational purposes. and they should not be considered in isolation from the most directly comparable GAAP measures. Please see the appendix to the earnings presentation or our earnings release for a discussion of why we believe these non-GAAP measures are useful to investors, certain limitations of using these measures, and a reconciliation to their most directly comparable GAAP measure. With that, I would now like to turn the call over to Vijay, beginning on slide four.

Thank you, Adrian, and welcome to everyone joining us today. I will provide you with an update on the health of our business, explain our strengthened outlook and raised guidance, and speak generally about the first quarter presentation shared on our website. Alan will provide the financial highlights, and following our prepared remarks, we will host a question and answer session. Before I begin, I'd like to acknowledge the exceptional work of our approximately 3,400 colleagues around the world. The Montrose team's dedication to leading environmental science and technology furthered our mission of helping to protect the air we breathe, the water we drink, and the soil that feeds us. Montrose continues to demonstrate that we can protect our environment while simultaneously driving economic value and development. As we discuss our results today, I want to remind everyone that our business is best evaluated on an annual basis since demand for environmental science-based solutions does not follow consistent quarterly patterns. This is how we manage our operations and how we recommend viewing our performance. With that, I'm extremely pleased to discuss our outstanding first quarter. In the first quarter, we achieved revenue of $177.8 million, consolidated adjusted EBITDA of $19 million, and operating cash flow of $5.5 million. These record results mark our highest ever performance metrics for a first quarter, setting new standards for our future achievements. These accomplishments underscore a growing universal demand for clean air clean water, and clean soil, an opportunity that spans across all of our geographies. There are differing opinions on how to achieve these essential goals, and we believe that such market dislocations create opportunities for us. Our team is strategically positioned to navigate these complexities and capture a disproportionate share of growth which will further our leadership position in the environmental industry. In November 2024, we announced a temporary pause in acquisitions to focus on consistent high single-digit organic revenue growth, enhanced EBITDA margins, improved cash flow generation, and balance sheet optimization with ample liquidity. I am pleased to report on our progress. Given our strong first quarter results and confidence in our 2025 outlook, we are increasing our full year 2025 EBITDA guidance. We now expect consolidated adjusted EBITDA to be in the range of 103 to 110 million and increase from 101 to 108 million. We are reaffirming our full year revenue range of 735 to 785 million. This updated guidance represents continued consolidated adjusted EBITDA margin expansion. We further reiterate our organic growth expectation of 7% to 9%. This demand outlook is supported by strong tailwinds. First, our private sector clients are increasing domestic industrial activity, a trend supported by President Trump's administration. This drives demand for our solutions. As one example, a public multinational energy company recently selected Montrose to support its emissions monitoring needs at scale. Montrose will deploy one of the largest air quality teams in North America across multiple operating basins in three U.S. states. Our ability to provide this service is because of our unique strategy of integrated services and capabilities, and the project also highlights how our clients continue to stay the course despite federal US regulatory volatility. Our clients are staying the course because of the longer-term nature of their planning and because of the continued influence and consistency of state regulations. Second, state governments in the United States are gaining more influence, which presents incremental opportunities for our success. We are actively collaborating with several states and clients to tackle some of the most challenging contamination issues in soil and the plumes affecting drinking water sources. We anticipate U.S. Administrator Zeldin's recent PFAS policy announcement will further support these initiatives. Montrose invested in innovative PFAS treatment solutions long before PFAS was this widely recognized. Our proven patent protected technology and our subject matter experts have successfully reduced contamination levels to meet various state and local requirements, including to non-detect levels, which means for all PFAS the state was monitoring, they could no longer detect it. Because our technology can be dialed up or dialed down as needed, we are well positioned regardless of where thresholds settle and we are encouraged that this remains a priority for the current administration and for the states in which we operate. We are proud to report five consecutive quarters of revenue growth from our PFAS services from across our diverse offerings. Third, our international operations continue to thrive. We recently announced an award from a major public mining company in Australia supporting the world's growing demand for steel. This announcement reflects our expanding global footprint, our commitment to helping our industry partners transition to more sustainable practices, and continued demand for our services. Our long-term success fundamentally hinges on our ability to serve our over 6,000 clients. In discussions with many of our clients, one consistent theme emerges. The overwhelming majority are not changing course at this time though they are closely monitoring policy and trade developments. We view our clients as embedded partners and aim to strengthen our relationships with them through our integrated business model, emphasis on cross-selling, commitment to technology, and our focus on innovation. These elements are essential to our continued organic growth. As we think about the opportunities and risks that could drive us to either end of the guidance range, we wanted to provide some additional context. We have considered the anticipated impacts of recent announcements from the U.S. EPA, changes in tariff policy, and broader macroeconomic and geopolitical factors. We do not expect tariffs to meaningfully affect our margins, and our clients have been very constructive in discussions related to tariff policy. Additionally, our exposure to fluctuations in currency and interest rates is significantly hedged. Also, the impact of political dynamics on our international client relationships has been minimal and is expected to remain so thanks to our strong local presence and domestic workforce with unique technical capabilities. Based on our current visibility into 2025, we believe our guidance appropriately reflects all of these considerations. Transitioning now to prioritizing balance sheet optimization, in April, we redeemed 60 million of the Series A2 preferred as we said we would. And we anticipate completing the redemption of the remaining 62 million in 2025. Last night, We announced Montrose's inaugural stock repurchase program. Considering the ongoing disconnect between the company's strong financial and operating performance, near and long-term outlook, and public stock valuation, the Board has approved up to $40 million in stock repurchases. We will continue to carefully evaluate options for deploying capital to maximize returns to our stockholders. Next, I want to address our commitment to enhancing margins and our expectation for EBITDA margin improvement this year. Our approach has three primary components. First, we expect to leverage our existing back office infrastructure to support continued growth. Second, by optimizing processes and implementing automation, we expect to improve operating efficiency. We expect segment margins to align with our stated long-term targets with most of the benefit coming from the remediation and reuse segment. In short, we delivered what we said we would. We reported strong first quarter results. We progressed our capital allocation strategy. We improved operating and cash flow generation. We are well on track for high single-digit organic revenue growth. and we continue to enhance EBITDA margins, which is evident from our raised EBITDA guidance. All this while remaining true to our vision for planet and for progress. 2025 is off to an excellent start, and we do expect momentum to continue. With that, I'll hand it over to Alan. Thank you.