Montrose Environmental (MEG) 1 Mar 232022 Q4 Earnings call transcript

Greetings, and welcome to the Montose Environmental Group, Inc. Fourth Quarter 2021 Earnings Call. [Operator Instructions].

It is now my pleasure to introduce your host, Rodny Nacier, Investor Relations. Thank you, Mr. begin. may you Nacier,

to quarter Welcome XXXX full earnings call. our you. and fourth year Thank

the Vijay Financial call and on me Joining are Officer; Allan Chief Manthripragada, and Dicks, Chief Officer. Executive President our

we will available is Investors During our the discussion be to presentation, on website. our our of referring section which earnings today,

available Our also website. on earnings release the is

including provisions Securities Moving X. that and I outlook. subject affect on that Reform operating update in include report will as call that any forward-looking you the XXXX. our Form to no our XX-K may would are everyone considered Actual Private to We and which Slide differ filings, statements material forward-looking to the risks and forward-looking to We of Act future of harbor could latest in financial that uncertainties evaluating safe performance. today's risks and be unknown Litigation uncertainties assume way like identify to annual the known to statements performance well results refer as should principal remind any SEC due our statements. recent a obligation

reconciliation earnings or certain thereof these a GAAP directly for appendix non-GAAP In addition, comparable presentation non-GAAP investors, adjusted these measures useful the discussion adjusted the directly they and our are GAAP certain to considered adjusted isolation or we measure. most using their be discussing limitations in consolidated these and measures share. including release from net most the of measures. for Please be net income per comparable We we informational purposes, providing EBITDA, measures income see a today, provide financial results will non-GAAP to earnings of should why not and believe to

Slide would I turn call beginning now Vijay, to on that, like the X. With over to

open before you for Rodny, business it financial will review to welcome joining question-and-answer a and Allan over today. up of our to to then it highlights you session. all Thank we provide us with you, and hand I

speak to presentation earnings the our website. will I generally updated shared on

I the like take of begin, They took is and helping for which in I colleagues acknowledge the to there way before Little moment one to our their of a clients, on of to crash week. So last X would this those unthinkable our were Rock, Arkansas, no lives which are plane words. events

also prayers handling your poise lost CTEH their ones our come us and Our who jumped the the has the who and that fortitude our shock. the am mourning how am team of out to we to with I you. those CTEH To CTEH go thank team at and is in thoughts all and which sudden grace unwavering deep deep, collective families amazed to you are colleagues, loss. and are colleagues, proud I for clients our together. and our to Thank remember and lost. help and unexpected joining partners to leaders of loved

Montrose, and all execution I to for really grateful also with our Australia efforts in colleagues I the for America business. from the levels am results to North have around another incredible the resulted and of our of Europe. across efforts world Their remain year pleased

as specific As recommend an demand is our on results you quarterly assessed This given business for business how we before, or basis, manage driven environmental is well. and we noted view have annual not we our our services patterns. by best is predictable how

themes. another results. in our now financial Let a few go and report key pleased We XXXX, me I'll year highlight to to were exceptional

the on Page organic X presentation. revenue XX% First, in blue achieved approximately representing business, our record growth growth in the of core X/X the of we of bars

represented our our over growth contributor a growth growth more IPO X% than the to XX% years to Historically, of X% been been to the compared our average past of at annual revenue acquisitions greater organic revenue has result, growth, recently, overall X but organic half a time trajectory. has As the in our approximately mid-XXXX.

anticipated Second, decline million CTEH-COVID-XX-related revenue the our to in from revenues organic growth XXXX XXXX. outperformance the impact services helped core $XXX in mitigate of

to revenue is the held CTEH back incredible organic but in the growth Given XXXX, broad-based of organic that in treatment see for demand our services. we surge for in customer was increased and expect energy greenhouse across and It encouraging Customer in also us of increased businesses. XX% down be outperformance is the our and in cross-selling outperformance thrilled we strong retention Three, and to primarily growth it on segments. to steady levels. is XXXX, revenue water revenues what measurement rest XXXX. record revenues gas technology, our by retention renewable to driven PFAS Fourth, mitigation were particularly revenue

As a reminder, but isn't X% a lost of necessarily revenue, frequency. the function more project

customer as Our remain as relationships strong ever.

revenues. the defined which and clients Montrose revenues XX% total about In than are as from less about reflects offerings. integrated service, existing Growth success In outperformance is importantly, organic addition, our these our customer customer of development to our service business as essence, in cross-selling revenues, growth and of using deepening nearly doubled acquisition metrics more more one relationships. efforts

and our Finally with we fifth, of the cash are happy balance sheet continued also generation. and strong strength

flows. funded to cash continue and our were acquisitions be through Our operating

innovation. our against us continue in consolidating rising effectively with industry Our investing hedged and interest provides balance ample it flexibility rates, environmental and to sheet remains

As strategy, to growth accelerating on opportunities. our pace acquisitions, focused was a as against prudent core we XXXX our remain during of believe it organic executing we slower relates which our part

XXXX, believe pleased Frontier from very very So in mantras, are added M&A to alliance to our family. increased our far we and have and the environmental small, we consulting Gluco teams are to cadence of Labs, though additive have we activity, they and

to start the announcements our more historical be in of expect to We back expect future. strategic we XXXX year, And can cadence see you near this as the quick acquisitions. to

total what in from, XXXX. EBITDA adjusted X core X each from shares our our it in to is and outlook, seen Slides IPO is operating very strong are about we and business highlight segment important which more our Allan growth sequential where meant year As XXXX think have I debit. Revenues since to came

in our During time, more public corporate and of to status than growth same life we transition that transition out anticipated. to company to quickly our infrastructure emerging invested

Regarding due outperformance a expectations, than lower consistent reasons. to organic XXXX our But with in little was expectations, discussed for primarily primary operating X growth EBITDA revenues earlier. as came our segment expectations

very First, immature to as opportunities. and though this is capture our biogas their profile, levels invest water growth at rate scale, run services as treatment time we at organic margin attractive

from CTEH So though I am revenues COVID-XX XXXX lower margin in oversimplifying, that replaced short the term. was revenue the the

and margins faster the grew it higher and recent consulting it we Second, have acquisitions our service represents strategically our margin in consistency engineering very opportunity additive. been more importantly, and but mid-teens expected, However, lower, lines long than in

purchased addition, In few small we lower testing that businesses were a also margins.

mantras years. expect We accretive. These been also acquisitions the of businesses coming margins part have very for as over will increase these financially

finally, outperformance. last CTEH so And XXXX, had quarter we October fourth November, we spoke when record XXXX in expected a near of

quarter on core overall and as the business year, challenging CTEH over fourth as can ended remains see we Slides months Montrose had or The the before. we lower expected. CTEH strategy a quarters, noted than to spectacular However, and is have X. you X predict to

a short-term more phenomenon. So this of is

outlook our factors, Pages these services. X XXXX and all core bullishness our reflects X particularly our on Given with

the will particularly the offset in COVID-XX core business services revenue continued organic of services. double-digit which for remain XXXX. early expect our XXXX CTEH down growth in wind We Those meaningful,

We for in decline double-digit operating growth which strong CTEH. services, segment also EBITDA offset expect will adjusted core our a slight

Allan cadence back to our a expect be and M&A we to will remains regular these unchanged. Overall, trends. strategy Finally, further on expand long-term

to ability our strong our have on solutions. shareholder ability innovate in doing, been create confident demand we as and are We environmental value our to capitalize for given

regulatory will industry and discuss Next, trends. I broader

on as well with market these public drivers see are private government to We and initiatives demand to up stewardship. for tailwinds. continue positioned remain better policy We sector environmental catching capitalize

likely demand U.S. EPA January. focused future regarding Specifically consulting and on the services EPA both concern, PFAS in increase of our proposed chemicals The chemicals also on of for PFAS to issue inventory to several release toxic PFAS, first, testing special in for lower and be added the more rules continues particular. and thresholds the

publish recent of the of PFAS Montrose In testing least both final and testing recommendations which are capabilities. for at and for addition, treatment, drinking treatment driving by quarterly U.S. wastewater water Their includes technology-based fall EPA plans also of to demand expected the continue XXXX. memo limits for to

time. other With emission proposal of to to late reduction for requirements gas regards among for emissions, of The proposal a emissions and last hundreds from to methane year, EPA states supplemental the requirements. natural the scope the existing and methane facilities require nationwide reduce from emissions thousands methane of sources the expands reduce first released oil sector

methane. and for federal emissions monitoring Management the addition, a services. avoid Land U.S. If In expect to gas requires waste see of the our oil to steps leases assessment adopted, published that demand and increased of proposal of we operators and Bureau measurement, take tribal

Third America the pollution, various demand in address availability January, Rescue to our and aspects EPA emissions which in from $XXX climate and services, finally, announced Plan environmental communities. projects the investments of regarding U.S. on support consulting builds that disadvantaged previous for matters million, of

rescue started new document a consulting considered how and If emergency plan, January, air This have ensure and communities in proposal are on in decisions. impacts other increased as permitting, tailwinds our particular. the partnering cumulative U.S. efforts our we across American also clients, result monitor demand released response for to of from waste help demand to from expect demand EPA this with to will industrial testing to these services. the increase remediation, we services. environmental addition management, environmental Also the In a have see implemented, we with quality seen creates

demand with services the represent phase, these is greater and trends the highlighting the drivers true as regulations we our of growth in rise. of environmental in will though we are stellar percentage are given regulations, while of Australia, in business, which the expect opportunities. that general macro collectively Europe, are the same And coming most years, early So in revenue a our actions rule-making U.S. on for many remain essence, Canada

our Next, to and I services the see solid Response were in organic by would we pleased excluding segment. like in segment, performance to other discuss Within revenue Permitting our CTEH, growth assessment segment.

organic reduce expect in the variability business long-term related growth through The remain mix primarily acquisitions. we CTEH. shift Margins acquisitions. very segment team bullish CTEH as overshadowed recent decline opportunities so of Also our impacted strong, and in were acquisitions segment. to building in on nonresponse of margins a the the These are were services other which trends see harder addition, able within segment. forward, see the million lot CTEH We segment. add to going expected COVID-XX $XXX accretive small we services financially strategically of to the the given In revenues, opportunity future this and we to to in their investments in the but as is by well lower

Within and and segment, our the services for analysis very remained testing organic Demand growth. measurement solid strong drove

growth leader. momentum regulatory position just our given segment upbeat a we about the I continued in discussed, Given as this market remain

Our in high remain as to margins the teens expected. XX%

Finally, PFAS water organic our our year our growth driven by reuse treatment and services. was the primarily remediation for within full and energy outperformance demand segment, for renewable

on see this sequential margin we As into normalized prior given we've fourth expected. as investments remain calls, the were this below business. improvement ongoing in consider during what to margins our segment We quarter, reiterated also levels pleased

In and respectively. and for development we X patents, XX terms of and filed were technology have research our achievements, and awarded

excited PFAS and carbon particularly about are We dioxide with capture. destruction progress our

to show these and long-term our opportunities early promise they not Given team's of for innovations, may ability our succeed they clients. to nature speak identify capture but the in and environmental they the field,

creation In contribute working will believe for growth. technologies next-generation actively and to monitoring our real-time waste-to-energy addition, with which services, we continued partnering air value on long-term we are and

to continued for X,XXX and our and investors, congratulations colleagues to that of for results these the for clients giving your to employees. our listening, you on approximately belong another year. summary, world thank opportunity To us the In are for create solid value those around for Montrose you you, our support

Montrose track objectives achieve optimistic As remain Environmental. in we for our look the ever record. strong as forward our to positioned to well we given XXXX, as We are we believe future

over to Allan. that, me hand let Thank With it you.

Vijay. you, Thank

customer another We are the customer year have relationships, cross-selling with organic strong solid nature in-demand closed exceptional our pleased our out business, success. expanding benefiting unique and of in core our retention environmental to from growth solutions,

of beginning also closing accretive the and the our of and encouraged of in XXXX. are of our one execution cadence acquisition with we are far pipeline by of in the prospective with since M&A second, We resumption typical growth the acquisitions sixth key XXXX robust so remains XXXX. recent pillars, our of pleased M&A Successful

were organic Slide to growth fourth revenues Full year see year. the XXXX. XX. continued million happy on in million lines our compared of most performance $XXX.X strong and the service across year We during prior revenue to Moving to $XXX.X were quarter full our

CTEH and However, X.X%. revenue was excluding from offset line of in when the year-over-year the COVID-XX-related exit entirely revenues acquisitions. almost biogas legacy by our as the This in planned the well O&M contracts, remainder the from resilience of $XXX top of considering treatment revenue growth decline headwind wastewater impact million. exceptional positive contributions was the XX% COVID-XX as organic business up was This

well the For and the were our assessment, of our driven prior decrease year as acquisitions. segment, revenues CTEH offset to and million from revenue, compared contributions permitting the fourth measurement quarter, This $XXX.X by growth lower in million, the Response significantly as by total $XXX.X positive remainder was partially in and organic quarter. revenues analysis segment in

consolidated extent, consolidated consolidated to land our EBITDA supplies was consolidated mix in or the significant costs The or of Return strong revenue $XX.X consolidated consolidated costs. travel, growth percentage or adjusted on year year-over-year of CTEH compared a and, decline change instituted this benefit EBITDA direct million business the million year. earlier adjusted in to Fourth in EBITDA EBITDA in of performance traction prior million Full of revenue pricing the by and to we pleased primarily Slide of lesser see adjusted year. XX.X% and to adjusted year-over-year. $XX.X of driven grew quarter EBITDA in quarter business earnings That X% our prior dollars of XX. initiatives revenue XX.X% other year compared year-over-year variable pricing and EBITDA favorable at driven XX.X% and during higher to revenue $XX.X in adjusted field were the was impacting as of Looking by XX% a was metric revenue to full or million $XX.X taken adjusted said, a with mix. and Europe.

the Slide and respectively. full adjusted The million, remainder segments revenue on in reflected segment was Turning a standards, in XX. business mix In and businesses year Horizon both plus and permitting at XX%, in year-over-year of of year of to our segment EBITDA. lower million $XXX.X than assessment, provided in segment is as savings. operating all the of Organic and the prior at of than or Operating segments to $XX.X decreased environmental a adjusted our and environmental business was as operate revenue the Response acquisitions acquisitions this CTEH the segment, which which growth percentage partial business EBITDA lower result adjusted EBITDA intelligence margins decreases entirely is and and in segment. revenue other the our

In disrupted which labs a analysis as in to organic and revenue strong ability some Measurement as growth of revenue operate. mix business In of growth well our as XX.X% increased attack increase services. as in adjusted increased $XXX.X a treatment strong percentage business as year-over-year higher million, revenue in the increase PFAS related and of revenues EBITDA demand was of a result to to and technology and our adjusted organic from for as mix. reflecting reuse water the EBITDA million, our temporarily acquisitions. to Analysis segment, result the $XXX.X cyber Europe, biogas & attributable XX.X% revenues of to and Measurement revenues as The acquisitions. XX.X% to segment, significantly impact well percent primarily decreased of segment a our remediation

XX. in contingent from the the Full the $XX.X from the year. respectively. cash of $XX.X to $XX.X $XX.X Moving year payment million to of activities capital operating prior prior in flow structure activities and of our on operations consideration million year Slide current compared cash million includes was year, million operating Cash acquisition-related from flow in

investments Excluding technology, million $XX.X to million operating due generation initiatives an year earnings XXXX compared current This These flows prior increase the adjusted was and primarily $X from year. compared cash in of to our year-over-year cash focus to start-up of XXXX. continued the full capital reflect cash ongoing the year R&D, the activities these payments, in operational acquisition-related million capital on with of for full to scalability. working ensure $XX.X $XX.X corporate infrastructure noncash working million an in and year items before of strong for in balancing increase lower million $XX.X in was change

cash position $XX.X Our of million December XXXX, our liquidity XX, on with revolving million hand strong an also of remains credit additional $XXX availability facility. on as and of

in cash and As we place quarters, in the exposure resulted current swap we've few levels. interest borrowing rate sheet highlighted rates XXXX almost to we over put solid at the position rising on have have in the no balance interest past January the

XX, December of in X.Xx. the as obligations cash which was earn-out of impact ratio payable contingent XXXX, leverage Our acquisition-related includes at

AX the shares this We XXXX. at interest fixed Our preferred potential if any we the and its stock in rising obligation of dynamics option value the the the for cash, has dividend date, as the given a view redeem rate time creation Series payment flexible in subject nature but not no favorable maturity to prior to April and preferred have an make-whole equity to to business, preferred prepaid instrument environment. a

at If include the Series million $XXX in our AX total market balance you capitalization equity $X.X our the cap, approximately billion. equity stands of

our are core And $XXX be solid of the XXXX to revenue the XX. $XX outlook traction million. $XX our to initiating consolidated Based to million. year on to growth XXXX, the on business full range to year in in in for Moving we range Slide EBITDA a and adjusted million through be million for outlook full $XXX of into

reflects forecast growth continued in XXXX. Our expectation double-digit revenue our organic for

mid-teens is million to Within primarily COVID-XX-related million which cessation in Slide year-on-year, consolidated to EBITDA. rate, on expect to the reduction X of EBITDA expected expected of CTEH than outlook, we core in to EBITDA a million $XX midpoint, presentation. million XXXX. to our adjusted $XX expansion $XX in from its $XX due million see business more adjusted our CTEH offset year-over-year $X detailed estimated to operating expect to the as the margin $X be growth segment's million to At is lower adjusted and increase the services approximately within EBITDA run $XX million We $XX million

expected for to the expect with to during acquisitions consolidated remain of revenue, the X% corporate adjusted higher is results which EBITDA costs together, drop We expected roughly the of in completion pieces Putting percentage year. the year. at

Additionally, on does benefit from presentation. in EBITDA revenue We It's and in that that of completed. acquisitions we acknowledge a any dynamic future I'd not further surged outlook as not our the CTEH reflecting began services. highlight saw then consolidated pieces the moving of a earlier include Slides X worth like adjusted XXXX details to outperformance X result COVID-XX decline XXXX. significant and have been QX the upon of of of and that the XXXX, significant This in shared

XX%. Since in XX% segment's growth from of still excluding compounded is through at levels. annual of and of operating services, elevated mid-teen significant an anticipated organically percent CAGR. Core the growth created in revenue business expected Inclusive our to expected above IPO growth a a Again, expected compounded transparency Although annual our revenue to important business has percentage adjusted organic XX% our performance, well at above excluding core it levels our noise XXXX. XXXX, with has core grown with at of to and additional expectations provide a our margins. it XXXX, an XXXX. rate at XX% performance business but we XXXX cease has time CTEH. grown our Accordingly, around XX% double-digit around rate believe XXXX, EBITDA be core XXXX Since acquisitions, XXXX, business, to for in annual pre-IPO the growth discontinued growth of is at additional in growth

core operating driven as and and are our acquisitions EBITDA adjusted particularly margins mix, in to lower result start-up Although from in expected treatment business biogas higher by XXXX XXXX. infrastructure, business operating water increase segment's of to margin a activities, margins declined in investments XXXX, businesses, investments in

business. core environmental demonstrate need solutions. our conclusion, non-cyclicality with In our our unique resiliency and the XXXX of along ongoing results the for

answer market drove double-digit to those of focused organic M&A [Technical upon to were execution pleased regulatory execute occur. on once tailwinds growth accretive to year and transactions Our Does most across business. of Difficulty] your question, revenue capitalize that end another our Chris? We expand

at to And you that where Yes. do now And longer see continue of -- the cross-selling term? that guess, with potential that? XX% -- where going what's revenues, is to increase I

on That's where attention of most the Chris. our side, is business development

one about client And talked the a site. with It focusing metric our service consistent come it's It the client the historically multiple same forms. is to of can cleanest for the can additional be that presenting have is several with And across be to a allow client can relationships in services service. we're over one that at sites. time one deepening more We on challenges measurement than customers.

it in if so metric. that count And or third doesn't a second a Chris, add we service,

deepening Allan Montrose of as north So no customers. we And by than easily more share long-term about existing sustained our why think over our time, continuing be the service. our organic mentioned before, acquisition across wallet growth more about more reason using horizon, has for and That go us there's capture shouldn't customer of It's all one to relationships. opportunities measurement, customers less over XX%. should

Tim comes from Blair. with William question Our next Mulrooney

time a as it expansion remediation 'XX scales expansion around of some XXXX all? has at year-over-year. that margin elaborate you as we XX% about And my in if those could And you frame bit EBITDA margin of the get on on those talk type maybe your to guide, question. margin or in costs things business only range? kind target flattish target your last margin So year long-term That's some some changed margin the that were little that up, back and of are holding implies can expansion corporate you leverage so maybe fixed flattish of layered in expecting

in. jump want you do with Allan, to you me start then and can that

Yes. Yes, please.

this take know perhaps let this. great pieces the and let thanks me question question. Tim, for me -- addresses your and if question, me let with a in start It's

of forgive to a bit a be lengthy it's me, So little going answer.

long-term about by and factors. expenses EBITDA around Our and of second XX% outlook we've the as is X not has talked revenue. operating is driven, as it's changed, a One percentage corporate

so to of the XX% down come need And and operating Tim, would range, that you'll XX%, corporate XX% X% down be to corporate to this to would X% revenue. will absolutely EBITDA to to to get get in and year. margins tick need there, see

And with on that's as get visibility we continue. about that -- that tightly our to our managed, run we we've so Measurement range. and bear us out, is segment through EBITDA XX% very margin have the think operating that. to we also and to & our rate, being Analysis If will demonstrated that years, at will over XX%,

Biogas maturity, and to in getting water back the increased CTEH, remediation getting see to then advisory the the practices Our the at their XX%. and the to to -- margin you can mid-XXs teens post-COVID business mid-XXs getting has being

Tim, about to think outlook from X we you been and can XXXX. if macro And X, are operating exactly that changed. bars, for us of blue hasn't some our you're in challenging right. But perspective, So Slide pace the has predict. the see that expecting leverage a you

reason also success I'll surprised us And I'll profiles. on to well. as twofold. predict Tim I the been R&D mean hard that And the by by second. in for that we've expand And what and the acquisition efforts, of It's our is explain for a that

assets long accretive are examples off the term, X in of the throw So term. us in I'll very give Tim, that you short on but acquisitions,

and Air of year. very it's a purchased the zero at an air called time towards EBITDA. it into back plugs business. our customers was It's company last Kinetics So But half it infrastructure. effectively excellent the we purchase, additive strategically testing of right

those infrastructure We need contribution and XX-plus on customers obviously is percent. corporate their the variable don't

So short of very kind in take of financially but us to off harvest us that a term. throws couple accretive, it's the that, going quarters to

environmental is a is the fire this example. utilities mid-teens. organic CTEH, strategic large in a the in part asset. very It's risk segment, an business States the business surge runs That Western example, our portfolio. that synergistic Rockstar But another As seeing manage that mantras. growth client Intelligence, to They additional with struggled as in that of excluding runs bases, Montrose help But off And mid-teens, cost profile. businesses Tim, the management. we're it margin to at throws broader very the strong excellent in short-term pipeline, these there's the market, it because very to brands, have come historically assets United

increases pricing the done line in just the price synergies to Montrose and continue again, But margins not and an into share environment. their top lift do bring inflationary as well. really to we the them They haven't harvest. think side, it several harvest we If So can we capture but fold, only on labor quarters that, us well. will we nicely take

And as a as patents the PFAS ask to to so that's come time of and we reason And having R&D fruition we're our will clients hard side, think of what themes some as carbon of that, on articulating of like the be. about all then capture Tim, part why capture. and exactly the cadence us these destruction that accretion margin

But answer that that's question, technologies going in we obviously invest that, additive. be we very the treatment water ECT think several very, Does your that X margins. As and like depresses also years, over temporarily to Tim? with

Yes.

that, You Vijay? me add to want to

Yes.

in no example. we just And tight on what losses it margins. add, seeing more at back we that and some elevated We're seeing. ability a grow me we're require margins really had add let an has and Tim. time. don't opportunities margin And inflationary anticipated. labor because as it's the growth double-digit maintain for think an Yes, expand above lot X, term, prudent Many organically the levels we ago. that wave market short-term organic demonstrated is a start-up European When But of revenue environment expansion, in impact longer like slows, those expand tough opportunities at We're also and a growing expansion a focus desire upfront obviously the of investments so of our X the to than to in short given margins to we XXXX, quality same on quickly. did years

Okay.

following double-digit what that just continue margin we point farther expansion EBITDA years Allan, were away plan in is will then, -- we thinking? and margin if that So if XX% it grow that than see to organically, indeed unlikely the to is target that coming you

It right? you guidance X. depends I'd look on a for number 'XX, of our again point and Again, you factors, Page at to if

core so XXX margins. point operating If 'XX. at is out in segment you our and on There business, improvement a pulling 'XX focusing versus about look basis

time. So what margin the growth, we're above organic also seeing we you're but double-digit for some recording is at which at had certainly IPO expansion, midpoint, expected

margin teens So is high XX% getting still absolutely the to achievable.

of just the come As we off change. temporarily, temporarily doesn't our we of business sort margin the growth the sense can When we so XX% of mix businesses said, get have will Corporate with of end goal costs, that outside sizes, have mentioned, profile at the achievable. acquisitions where absolutely have but is down market that absolutely we the achievable. a settle can portfolio and we and underlying off that the will as Vijay should mix out, It's look and throw acquisitions.

in You'll see down that come 'XX.

is growth that going In driving prioritizing years? a faster growth years? to X to it It's is than revenue in quality we be Is it's to growth revenue X very hard just it little we're over contract. anticipated. -- goal because had and we it say really than slow we So years? opportunistic Is gate continue had But also anticipated. the out believe is -- still, of the X again, revenue

of back, around horizon, our And our articulation XXXX, to alluding just kind at in I expectations of $XXX IPO right? over you're stepping went million X-year of public that So were revenue. we we when think because

XX% fair -- XX% should where say right? a expect X% us that So be X% said we year, grow at what a to way to is started? to to organic, Would and that we you

Yes, that's exactly.

Yes.

about at growth you That's of $XXX years, X million So XX% if do of just the so that we the fly, you if me At triple end margins, $XXX, around million it doing the that -- to on forgive kind it's about revenue. I'm just, just of right? Let's math and over a should right? top at on starting XX% take million of EBITDA. $XXX $XXX be

what and question our we're we're we're on trying to no that. and outpacing EBITDA saying targets. expectations say both think our we're to going that I about also hit milestones earnings is revenue. There's What is actually achieve

additive may us year X-year profile it be So beyond should and the very up to in shareholders margin sets different that year but horizon. and be our out,

that So by potential it's virtue just potential absolute built It's earnings the business of model with we're all our make cash on like that our different. or hesitant of saying cash with expectations And in not margin and confident absolute that line absolute top but it's we're is that we're Does very technology. not EBITDA sense? so hitting. advantages any we're about we've the and the anchoring our outpacing some

Instructions]. [Operator

with Bank America. question next from of Andrew comes Obin Our

Andrew Ridley-Lane is Obin. This on David for

Looking you end would at guidance, that? factors the the driving some that of drive towards XXXX of revenue or are end CTEH, that XX%. driving factors what the upper lower excluding the XX% of What's

Yes.

Let me start with in. and that, jump certainly Allan

of starting and projects. the One there's biogas is a So in variables there. phasing couple water our and various of David,

exactly lot As we've said for predict. of those projects tougher in has But and the stop little us of start seeing both been markets when interest end to really and attractive. demand is we're a before, a

that's that to fall one on dictates digits. digits low So that high we variable double be or double macro where either trajectory, going

The of very regulatory reduction the some we've of EPA. flux been technology, technology occurred the partially gas to was another that really by other watch best our cadence the deemed variable to function the one year, one, the a to that's greenhouse the of which at going recently is measurement where up. And emissions going years that's practitioners last end we're picks imaging that practice of and be the for that's need that technology at

in also clients that our So partially will how dictate ability share capture market. part to adopt the that quickly of

even So on those make to the that. low variables are the But that end the whether dictate compared depending is cadence end Does on sense? we're our of or low levels. end that the high ones will regardless, elevated historical

been to last the CTEH then revenue. understand Yes, the rate to bridge $XXX $XX the of meaningful of levels trying 'XX just that sense. million quarters in $XX run second the guidance. million I'm have at million COVID-related of X perfect And you've half about makes to

that? -- do you mean to look take I want at Allan, you Yes. if

as certainly QX, still 'XX. them Sure. for by expect get meaningful has significantly Yes. The completely into that and in terms shrunk Montrose we of -- overall away go we to

those X/X winding in are about So revenue but their up. sequential declines, of QX, contracts largely

in new expect to don't year. we So of more it see the much

core even traditional the was don't their for a that's why just The pick CTEH, side. David, the that, million of with already pivoting has independent overall really nice business team the of job core team and cadence and than -- business environmental can And less to -- this work. far and away part has drop, business that nicely done has had the just their add an $XXX started so, in on to to And they very the year, see on you to so been has that, so done from XXXX. far up certainly COVID the the reduction because response exceptional

Got it.

the include CTEH to in million is does So just that to or it? way the the right COVID-related $XX target think not the revenues. growth and $XX core million ending sort about Is of number of

and right I a -- an very about a million. it's a the it's is of talented the And deployed. but their of where team matter $XX work down, is it flex the way they to million up think ability have of to $XX mix cadence they're to and matter think and

to work. winds So as reallocate they resources down, more traditional those their COVID

JPMorgan. Stephanie Yee with from question next Our

you of Can of CTEH synergies COVID-related between work? the outside remind its the and business Montrose us

part critical a our Yes. overall really of story, They are Stephanie.

and with at just to various challenges. a environmental opportunities clients ways about So macro as think deal level,

various due dealing climate aging changes incidents in occur those to infrastructure. One or of is that with our

is services, something additive. is So which the demand our independently clients macro very need their for

In Incident occurs there a because is hurricane flood work working it's right, fire work and happens, something or remediation a or are when the downstream addition to when something advisers advisory whether health Command work, then and work public that, happens, with they work, a monitoring that unfortunate impact in toxicology testing derailment. substantive or a

helping communities flow synergistic. mantra those these they're as it of that so -- services incident command, very and event helping that initial make the And downstream

monitoring that resource at 'XX recent in the damage far and certainly addition part case of of to talked different natural how is referenced the XXXX. and assessments, of support oil spill California So of one the to response the and it incidents early some occurred maybe ago, teams doing in synergistic years of indications about have when Montrose that we that we how the early as Stephanie, end was, the well deployed CTEH X alongside with client X so

Okay, was that to COVID-related just okay. hoping I I makes asking a revenues bit rolling XXXX. sense. I CTEH in off there's That know But little be of talking that like to because lot a was XXXX. in guess XXXX. we wouldn't it looks the we're tied about still explained in that

wanted first I just for reminded companies together, why be was coming the the X So in to of a good they're thank So that. place? you deal

We COVID Yes. really start And forgive a those time again, services us, having we're had exactly will when to the hard hard time. predicting a stop.

But and didn't the behind and would it 'XX, early down, continue back 'XX, slow thought it really certainly of it Stephanie. substantive Going it's now, 'XX. us in into we to part was

so that's we far. guidance, XXXX nonfactor. what the a at With know look we As

the intention it's if uncertainty. seems and at question. factors your talk increasing one by about of How in environment, maybe employing how little that XXXX, pace all? of Can it into you acquisitions the Okay, other just bit economic a of

doesn't. it doesn't, It

Stephanie, to targets more In impacted our and we're than that fact, saying macroeconomic the what what following is impacted alluding us. challenges they've acquisition we Tim's were have on question,

that talked of because an And broadly economic pressures comments, be we've of us. on cost the cost end in shifts pressures with able any to fortunate upside discipline inflation-related markets, the so prices we're have major take from downside. our really to or As not about his diversification our been Allan pricing insulated to up impact had the

it's have So profile some attractive it But which buying off the attractive but that we're long a a will We really but our think of business. -- see the battered. companies candidly very steady term. we been again, be that throws opportunity, smaller very short-term certainly as

And not we're increased balance those a while. sheet and worried rate hedged about it. environments is So that our all has been for against

it's a matter more us, and it's really of making strategically sure being So us for additive opportunistic.

would add? there is anything Allan, else you

with agree all. I No,

are the at [Operator Instructions]. comments. ahead. Vijay questions back Manthripragada to would this There like for time. no floor go Please over to further closing turn I

be talking Montrose. and your time, all your you, for We're of again excited XXXX, I'm soon. we'll care. your support for Take about thrilled interest thank and you Thank and and for sure

a This teleconference. calculates to

your You have great lines for and time. day. Thank may you disconnect your participation, at this a