Executive Summary

Record Q4 results with revenue of $189.1M (+14.1% YoY) and Consolidated Adjusted EBITDA of $27.2M (14.4% margin); GAAP net loss of $(28.2)M reflects a one-time $18.0M SARs cancellation plus higher taxes and interest .
2025 guidance introduced: revenue $735–$785M and Consolidated Adjusted EBITDA $101–$108M; organic growth reiterated at 7–9% per year; ER revenue expected $50–$70M; operating cash flow conversion targeted at >50% .
Balance sheet and liquidity strengthened via new $500M credit facility (Term Loan $200M + Revolver $300M) maturing 2030; pro forma liquidity ~$296.7M at year-end; leverage ratio 2.1x .
Management actions aimed at transparency and earnings power: executive SARs canceled (removing ~$10M noncash expense annually in 2025–2026), and Board strengthened with addition of Vincent Colman; independent reviews found no material issues from short seller claims .
Catalysts flagged by management include cross-selling momentum (53% of revenue), 96% revenue retention, PFAS/methane tailwinds, and preferred stock redemption plan ($60M in April, $62M by year-end) .

What Went Well and What Went Wrong

What Went Well

Delivered highest-ever quarterly revenue ($189.1M) and record Q4 Consolidated Adjusted EBITDA ($27.2M; +55.8% YoY), with margin expansion to 14.4% .
Measurement & Analysis segment outperformed: Q4 revenue +21.3% to $65.5M and segment Adjusted EBITDA +88.7% to $18.3M; margin up ~1,000 bps to 27.9% on operating leverage and acquisitions .
Matrix Canada turnaround: exited Q4 at annualized mid- to high-teen EBITDA run rate, validating acquisition and integration playbook; management reiterated multi-segment operating leverage and innovation benefits .
Quote: “We remain confident and optimistic in our growth trajectory… focus on continued margin expansion and significantly improved operating cash flow” .

What Went Wrong

GAAP net loss widened to $(28.2)M in Q4 (LPS $(0.90)), driven by $18.0M one-time SARs cancellation and higher tax (+$7.3M) and interest (+$2.2M) expenses YoY; ER revenue declined by $8.4M and treatment technology revenue was lower .
Operating cash flow for FY24 decreased to $22.2M (from $56.0M), pressured by AR increases tied to Q4 revenue growth and delayed collections on a large U.S. government-related project (City of Tustin, ~$13.5M receivable outstanding at release) .
AP&R segment Q4 margin compressed to 15.6% (from 18.3%) due to ER revenue decline; treatment technology softness tempered Remediation & Reuse mix despite acquisition contribution .

Financial Results

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($USD Millions)	$173.3	$178.7	$189.1
Net Loss Per Share (GAAP LPS) ($)	$(0.39)	$(0.39)	$(0.90)
Diluted Adjusted EPS ($)	$0.20	$0.41	$0.29
Consolidated Adjusted EBITDA ($USD Millions)	$23.3	$28.3	$27.2
Consolidated Adjusted EBITDA Margin (%)	13.5%	15.8%	14.4%

Segment Revenues ($USD Millions)	Q2 2024	Q3 2024	Q4 2024
Assessment, Permitting & Response (AP&R)	$53.4	$52.0	$50.8
Measurement & Analysis	$54.8	$58.6	$65.5
Remediation & Reuse	$65.1	$68.1	$72.8

Segment Adjusted EBITDA ($USD Millions)	Q2 2024	Q3 2024	Q4 2024
AP&R	$12.6	$11.2	$7.9
Measurement & Analysis	$12.4	$13.4	$18.3
Remediation & Reuse	$8.9	$11.7	$12.7

KPIs and Balance Sheet	Value
FY24 organic revenue growth	8.3%
Cross-selling contribution to revenue (FY24)	53%
Revenue retention (FY24)	96%
Leverage ratio (12/31/24)	2.1x
Pro forma liquidity (12/31/24)	$296.7M (Cash $12.9M; Revolver availability $283.8M)
City of Tustin outstanding receivable (approx.)	$13.5M

Note: No 8-K Item 2.02 filing was listed for Q4 2024; the company issued an earnings press release and held a call which are the primary sources above .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Millions)	FY 2024	$690–$740	N/A	Maintained (FY24)
Revenue ($USD Millions)	FY 2025	N/A	$735–$785	Introduced, higher vs FY24 midpoint
Consolidated Adjusted EBITDA ($USD Millions)	FY 2024	$95–$100	N/A	Maintained (FY24)
Consolidated Adjusted EBITDA ($USD Millions)	FY 2025	N/A	$101–$108	Introduced; margin enhancement expected
Organic Revenue Growth	Long-term	7–9%	7–9% reiterated	Maintained
ER Revenue ($USD Millions)	FY 2025	N/A	$50–$70	Introduced
Operating Cash Flow Conversion	FY 2025	N/A	>50%	Introduced
Balance Sheet Actions	2025	N/A	Redeem Series A-2 pref: $60M in Apr, $62M by YE	New detail

Notes: Guidance excludes future M&A contributions . Management provided quarterly cadence for 1H/2H 2025 similar to 2024 and indicated Q1 EBITDA ~1/3 of 1H EBITDA .

Earnings Call Themes & Trends

Topic	Q2 2024 (Previous Mentions)	Q3 2024 (Previous Mentions)	Q4 2024 (Current Period)	Trend
Organic growth	Strong across segments; reaffirm 10–12% FY24 organic expectation	~7% YTD; reiterated strong organic drivers	FY24 organic +8.3%; 7–9% reiterated for 2025	Stable to strong
Margin trajectory	Consolidated adj EBITDA margin +20 bps YoY; Matrix improving	Margin up 190 bps YoY; back-half margin stronger	14.4% in Q4; midpoint FY25 implies steady, with accretion in R&R and corporate	Gradual improvement
Emergency response (ER)	Down YoY in Q2; full-year expected $50–$70M	Lower in Q3; full-year $50–$70M	Outlook steady at $50–$70M; no outsized projects currently	Stable
PFAS momentum	EPA rules (NPDWR; CERCLA) catalyzing demand; labs/testing growth	Continued tailwinds; PFAS revenue growth across segments	Narrative unchanged; broader contaminants drive ~85% of business	Consistent
Methane regulation	$850M EPA funding supports monitoring/reduction	Stable thesis despite macro/political shifts	State-level regs drive ~2/3 of methane revenue; 9 states cited	Expanding state-led
Capital structure	Equity raise; M&A pipeline robust	Deemphasize near-term M&A; redeem preferred	New $500M facility; full preferred redemption planned	Optimization
Cash flow conversion	Back-half ramp; target >50% long-term	Improved in Q3; expected to increase in Q4	FY24 conversion below target due to timing; expect rebound in 2025	Recovering
International mix	~20% of revenue ex-U.S.; strong tailwinds	~20%; Canada/Australia/Europe strong	~20% continues; mix to remain predominantly North America	Stable

Management Commentary

“We are pleased to report another record year and record quarter… driven by continued demand for our uniquely integrated environmental expertise and technology” .
“The executive team voluntarily canceled all outstanding executive stock appreciation rights… This eliminates approximately $10 million in noncash expenses from our P&L annually in 2025 and 2026” .
“We are introducing guidance of $735 million to $785 million in revenue and $101 million to $108 million in consolidated adjusted EBITDA… reiterate 7% to 9% expected annual organic growth and 50% plus operating cash flow conversion” .
“Pro forma… approximately $300 million of liquidity… leverage ratio as of December 31, 2024, was 2.1x” .
“Independent third-party reports… did not identify any material issues… no amendment or restatement… needed” .

Q&A Highlights

Margin trajectory: At FY25 guidance midpoint, EBITDA margins are essentially flat YoY; management expects continued accretion, especially in Remediation & Reuse and corporate leverage over a multi-year view .
Cash flow conversion: FY24 below 50% due to timing (Q4 growth working capital and Tustin payments); collections subsequent to year-end; expect to rebound to >50% in 2025 .
Project timelines and macro: No changes in timelines seen; private sector activity normalizing post-election; federal revenue <3% reduces sensitivity to administration shifts .
Cross-selling traction: Deepening relationships with clients buying 2+ service lines; cross-selling now 53% of revenue, reinforcing organic growth outlook .
ER revenue and international mix: ER steady at $50–$70M; international ~20% to remain stable, with Australia/Europe demand influenced by water treatment .

Estimates Context

S&P Global/Capital IQ Wall Street consensus estimates for Q4 2024 and FY 2025 were unavailable due to request limits at the time of analysis; therefore, we cannot quantify beats/misses vs consensus in this report. Values retrieved from S&P Global.
Near-term estimate revisions may reflect: Q4 margin outperformance vs prior year, one-time SARs impact on GAAP EPS, and higher FY25 revenue/EBITDA guidance ranges .

Key Takeaways for Investors

Q4 underscores momentum: revenue and EBITDA records, with Measurement & Analysis driving margin mix; watch for sustained operating leverage in 2025 .
Balance sheet actions are a near-term catalyst: new $500M facility and full redemption of preferred stock should simplify capital structure and highlight underlying cash generation .
Organic growth durability: 7–9% reiterated, backed by 53% cross-selling and 96% revenue retention; diversified end-markets and state-level regulatory drivers reduce federal policy risk .
ER revenue normalization and treatment technology cadence matter for quarter-to-quarter variability; full-year ER expected $50–$70M; treatment demand building in Australia/EU and U.S. .
Matrix integration is a case study: margin uplift to mid/high teens run rate supports continued margin accretion in Remediation & Reuse .
Cash flow conversion expected to rebound (>50%) as Q4 AR unwinds (including Tustin); monitor collections trend through 1H 2025 .
With consensus unavailable, investors should update models using company guidance and segment mix signals; focus on Measurement & Analysis margin trajectory and FY25 cadence commentary .

Montrose Environmental Group, Inc. (MEG)·Q4 2024 Earnings Summary