MEG - Earnings call transcript Q3 2021 | Montrose Environmental Group, Inc.

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Operator

Thank you for standing by. This is the conference operator. Welcome to the Montrose Environmental Group, Inc.

Third Quarter 2021 Earnings Call.

As a reminder, the conference is being recorded. Instructions]. [Operator like conference now Nacier, to turn Relations. Investor to would over the Rodny I ahead. go Please

Rodny Nacier

operator. you, call. earnings our Thank to Welcome third quarter XXXX

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

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

available Our earnings website. release on the is also

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

purposes, the most to from these that, discussing the see now comparable beginning earnings they investors, addition, their non-GAAP on X. of adjusted isolation certain believe GAAP reconciliation thereof including directly informational GAAP adjusted over non-GAAP to to should measures of non-GAAP EBITDA these in or Slide Vijay like EBITDA the useful for not measure. comparable measures release considered our the a margins. a will these discussion we call In and turn would With and earnings limitations presentation to we I of financial measures. be using most are why for appendix results and certain be providing measures today, directly We or Please provide

Vijay Manthripragada

up highlights hand to Allan going for welcome joining over with then and are us all of you business able efforts you their been that from have will that all support we'll not with publicly. to and very our start today. and to you, growing and members X belong quarter I'm to the to continued the we've generally presentation meet listening, you it to of record then provide third few to To And Thank of Rodny, quarter positive these all you These of due review, unwavering of who through solutions Q&A. demand by financial business who it Dicks open working results. the have for serve a you let momentum achieved another solid environmental Montrose both shared speak efforts other, the Pages saying in much. our results results. clients' you. I of me and results each we team Thank without And our clients. are our our are tirelessly would our very, to and of our X

annual and annual results to public on assessed as do like manage managed already our previous I we a annual map tenure Since perspective basis. on and and don't you company, expectations, trends environmental and quarterly our our highlight fiscal the during is services on business demonstrated same. discussed to Montrose short an our we've would and we best how our We urge As on calls, have we quarters view as to business. neatly

is investments addition, already previously already the results defensiveness exceeded support our XXXX, the of updates year growth in to our first we to we as of of of XXXX, ahead first of on annual XX% shared Given and business scaling have our despite in continued you, XX% months of XXXX strong we all revenue in over EBITDA that COVID-related XXXX earlier unwinding X XXXX. in full noted implemented months objective the base substantial X and

and result, a Allan we again shortly, about talk As year are will XXXX increasing guidance. full

year-to-date factors discussed before. you quarterly by were we've results increased driven guidance with Our and and

factor lines, especially service strong perform is well. biogas. those and gas specifically organic continues renewable And business course, treatment greenhouse growth across and focused PFAS first CTH of The our energy, our measurement on very mitigation, to

federal we that factor The of Since second investment ahead acquisitions support call opportunities. ongoing that a in emphasis recent of several on in markets and plan last completed acquisitions. growing state trends services. across and environmental There trajectory our for robust regulators the is key regulatory our from is our continued to and drive growth and our accretive provincial and expected August, our continued have stewardship set earnings are have rationale been or momentum initiatives demand seen strategic for our customers sector private and key organic

storage EPA that broader is These As the processing, covering announced methane an example, it infrastructure of methane oil industry and existing petroleum new recently for before. a and address transmission than U.S. the and production, advancing the proposals would much swath new regulations. gas

the its of Services few and or our continues PER As plan compounds. In other strategy our EPA's The Montrose PFAS another address to PFAS Environmental position impacts unveiled polyfluoroalkyl example, ago, well. U.S. of and further plan measurement business weeks strategy. words, EPA remediation from to and integration a validates stemming

grateful on pleased addressing an I've demand resilience for in I believe with were climate another the politization support soil on as I've a welcome disappointed stewardship I'm yet the to to eye environmental Democratic, infrastructure said our and our clean independent the in together in change third before communities air, impacts update United investment infrastructure are on universally bipartisan to we water and and the Congress States and managing coming from example, desired. building of This Montrose's Congress environmental of a is bill. of the the that been this. for As services. Republican driver potential leaders in very see

focused initiatives boards corporate Perhaps gases, PFAS and investors executing opportunities our to to demand. and are and energy environmental and renewable with pleased partner responses on also regulation, expect their greenhouse customers about environmental stewards continue emergency sector proactive We drive environmental increasingly are to to strategies. who Corporations remediation, on their response investment will for innovate are private that are incredible and to ESG creating as serve. the environmental are more than industry proactively competition and corporate footprint

of While our the grateful the privilege capital sector the design on, time A and resilient year-to-date insulated exciting growth by help is markets. political some of largely to is wanted segment and of touch business It LTM stewardship our due our is increased beyond model private this being and for on on by which the to optimism quarter. numbers environmental on highlights. team. the we first is couple key focus of X I'm point performance and swings, to I'll themes emphasis and an measuring importance Montrose, keep to for from year-to-date

services discontinued the of year-to-date XXXX impact revenue the Excluding in year, increased XX%. prior

path This growth stellar Our crisis new strong and to by QX customers. their where came year-to-date more increased market software, Response pandemic. by is our responses of pandemic-related larger particular. million and put growth X line contracts despite and period position business year XXXX recently CTH from number first infrastructure three, also their driven business of levels most CTEH. on adjusted We exceptional leading given us per for ongoing new performance on another crisis entertainment in Permitting CTEH's by to California the our in Within continues of acceleration prior record contributions of for was this to a has our a source and industries, $XX investments to and CTEH and climate technology segment leadership months of in team segment, year-to-date or example, unwinding spill results. business CTEH XXXX, see XXXX; converting Their revenue experience our were change, do to elevated has a The long-term and helps and business at into MSAs states $XX been compared in another at is very media XX% the . business with Two, industries, revenue. one, a annual strategic million Assessment compared the aging year advice organic oil year continued large defensiveness. CTH has pandemic to value and excluding basis the job grew XXXX in the is of services. The share. yet EBITDA driven administer by: to has been driven perform and The pleased the response more continuity through. driven continues strategic their market

slower saw that to pace in run last approximately through revenue the above produced QX. response of which CTEH rate, in at approximately per relates continue Demand pandemic, to QX XXXX. in $XX originally it into the We elevated million in QX, clients continue expected CTEH modulate revenue said in and quarter support is million first As longer pandemic well QX, for but but their we the we a We quarter surge than is anticipated. half the $XX began demand below their than to supporting QX.

a segment the growth and Within are uptick. nice permitting assessment excluding and ecological organic CTEH, service businesses our seeing higher-margin

certain and of Within decreased for of Analysis to the projects believe we the to is acquisition be revenue fourth to our which trends intelligence mitigation that services. postponements to and in quarterly positions environmental due and Measurement was aren't keep Our QX demand why of better meaningful. what ecosystem capture saying California recent XXXX growing fire quarter, segment, us we versus

in Over this upbeat in you longer will see future. near the growth continued remain segment, about term, we which the

measurement strong across advantages related For software to North America. and example, methane seeing and our mitigation service are demand

Within specifically, averages to example, and services this our testing demand and increasingly strong. great portfolio, we with reason portfolio. are the out strong we and so Margins has This expectation adding it analytical expected. very R&D demand industry within are PFAS for is segment our our been remediation and Vista and panning IP enhanced and team Remediation you water our for and us, closer for is is to was another seeing great. doing analytical remain team as PFAS of segment, higher environmental for than normalization As much our shared Reuse the by normal remains our our

create We points jobs waste We business. help line our There communities. seeing particularly the our and few our note. our carbon create are to for key are for of intensity to continue farmers, should a biogas services, demand natural ag it because negative compelling gas other also find waste-to-energy service strong

software strategy. is capital a and core our growth services our Our to our year-to-date of a our in of broad our strategy our R&D, organic commercialization are and validation allocation which of people, our investments swath all across infrastructure our

level director and our experienced proud individuals the the in retention here professionals the inflation concern positive turnover built and talented focus or culture solid at of I'm market, exceptional we've wage of be above. Montrose. of broader corporate of areas the and higher especially While and remains continue to recruitment at team

strong. Our M&A remains pipeline

exceeded of to ECI are accretive, market. So annual historical cross-selling also water Vista, already far to acquiring squad our of to complete of and cadence. augments the we very us key resource pleased in EI, Coast benefits EBITDA, about were in Water of presence and annualized on happy team on line our water previous our Horizon goal environmental $XX success acquisitions supports We approach we think It SensibleIoT goals helping areas, highlighting Environment million more with have Montrose. this recent our the are and I'm in the our from seeing acquisitions MSE, the The all proactively and XXXX, acquisition our earlier several the West Horizon advisory knowledge. month. have to these and

colleagues the I challenges. want dynamic our environmental our team. last to with raised our Allan very they've the our story, you, excited my the the a is as creating what world and do markets. We of the This and we in and anything, great We and reiterate our to we around done So beyond. the are have challenges hope about the part work or summary, over time many for see in comps course of public XX shareholders and solutions And to don't we to future. remain of have and world's and for in approach, you've the This which More allocate is and be as us the thank you also so constructively. from of are acknowledge of our than continue our context appreciate to my I XXXX tremendous market are talent Those lots capital confidence transparent Montrose. us can reason precedents, time given presents our say. why strategy of know also gratitude opportunities reasons months. have gotten we I outlook you all outperform. for remains there fluent caliber

and we your that, a there, Thank and So you and strong out appreciate a with forward let forward to do Please continue to XXXX to again as safe hand closing it so. we over look while stay you. me support as look great to out we XXXX. Allan. With we speaking

Allan Dicks

you, Thank Vijay.

third performance regulatory quarter come momentum as themes PFAS, we've and for reflects monitoring, discussed and remediation our since fruition in for the Our the strong into the globe. gains year-to-date need environmental particularly across the IPO

core and closing continue recent sixth of our with the we on in to resilient continues our grow, business M&A to Our XXXX. acquisition execute strategy

October. for successful capacity In equity growth addition, through strengthened further of completion follow-on our in the offering we our

XX. on performance revenue our to Moving Slide

strong to continue We growth business. our across drive

and April our a MSE period, The included which of Measurement Revenue it year expected increased the full decrease million XXXX million. drivers segment. $XXX.X or to the January in XXXX, in benefited XX% CTEH year-to-date of Environmental growth similar and offset quarter growth in revenues period also revenue in were in segment, the in revenues quarter. year acquired XXXX. to driver acquisitions prior the remediation the Reuse Year-to-date, our for results XX% of period was and quarter third The response prior July $XXX.X Vista organic benefit business revenue from business largely Intelligence an compared growth were by of our Analysis in the also CTEH, up XXXX. and to was in and June Our primary versus emergency

year-to-date mentioned prior XXXX, we lines of service calls, the comparisons. of As discontinuing on completed our second the partially in process quarter early offset which

on revenues we have continued year-over-year reiterate also XX% year-to-date. growth don't would as basis our quarterly in that a we X% on said, would seeing growth to organic focus generally quarterly this lines, end comparisons strong Excluding expectations. being like the organic annual That are increased organic expected misleading. service on I excluding high be of of can and contributions growth XXXX, CTEH X% to

Looking EBITDA performance at XX. our adjusted on Slide

the for adjusted grew The XX% EBITDA business grew due Third adjusted to of XX.X% points Year-to-date, expected in change to $XX.X revenue. lines, both of EBITDA EBITDA EBITDA margin XXX quarter adjusted points declined XX.X% adjusted and basis and $XX.X to XXX margin XX% declined to million, basis and mix. improvement by margins year-over-year was higher The revenue. business The of in was EBITDA and taken adjusted periods performance hire following revenues. full and actions normalization reversed primarily basis. driven certain business temporary mainly prior have margins to in company planned million the mitigation to the comparable cost the XXXX. in in to COVID-related year, the I'll which that consistent months manage needs evaluate predictability be in in months period assessed for been annually. and compared annual reemphasize Montrose's the X how X company. This business costs due we the public XXXX of is to stronger on an This how is allocate we resources with staff,

segment, adjusted services by and response-related improved Slide from from segments third and in to the EI our segment to $XX.X compared quarter and was Assessment, driven XX. covered work an $XX.X result the has decline the year. CTEH. to provide CTEH were XX.X% in EBITDA prior the The to lower margin our from revenues acquisition. million in EBITDA and $XX.X The which was a in the $XX.X seen performed in Response $X.X to EBITDA million to prior revenue Permitting revenue endemic acceleration margin both adjusted mainly million grew year. demand CTEH, contribution of million million third in quarter by in In significant business $XX.X increases prior year-over-year the Turning adjusted year million on

this our XX%. have pandemic. quarter We adjusted by COVID-XX mix the and of year-over-year expect to Vista the third offset X.X% Measurement outset In XX.X% segment to EBITDA that decreased of normalized partially attributable our declined and million, the at business run $XX.X the suspended Adjusted into and margins in been reinstatement margin temporarily projects from to between certain and postponement primarily the due of segment, XX% to EBITDA and certain quarter fourth revenues revenue to acquisition. costs Analysis

run increased acquisition Remediation expect in margin segment our and anticipation segment adjusted expansion. run we And over quarter geographic elevated remediation year-over-year EBITDA finally, to of The continues margin costs of to the services impact organic We $XX.X At to investments to revenues. and growth continue and in third the adjusted this scale, Remediation to result expect the around to XX% term. reflecting PFAS XXX growing Reuse well margins. of segment, to and the XX% basis higher EBITDA point EBITDA fixed in margins for this as long MSE. XX% EBITDA revenues increase at and waste as million, as reflect Reused a demand in Adjusted in the mid-XX% of adjusted energy segment

Looking business a review our XX. at trajectory on Slide of base

revenue As call, our estimate million $XX earnings that now we $XX million. $XX of CTEH's million, run estimate annual is $XX quarterly previous our in from to to million up rate QX mentioned

is That as level these elevated the the quarterly services said, demand CTEH million revenues continues in expected remain COVID-XX and sequential to $XX.X related and for heightened produce the normalize, elevated and years be COVID-XX demand million were revenue of business. million in in Although in as expected QX, impact for the the same at to revenue recur $XX.X to CTEH's of services. and not result in revenues nature transitory a they QX $XX.X QX coming CTEH's is

expect which business, experience includes and the increasingly continues from to for revenue tailwinds, CTEH given year, is the in from benefiting our the what of revenues which or trend positions see from revenue well us CTEH, we our remainder growth. to base believe would solid trajectory we Excluding further to a a as refer above we

Moving third cash million, receivables. to lower an and of $XX.X $XX.X a flow generation from in XX. and the million of of consideration our which $XX.X of million I'm decrease capital, increase cash from our the proud reflects primarily particularly year quarter operating Year-to-date million respectively. includes by acquisition-related earnings capital cash driven structure prior payment prior the flow Slide year, and operations activities $XX.X current million was Cash of on in in contingent operating working the to period. $X.X robust compared

of cash from in payments, items, these $X.X of $XX.X year an million working consideration partially an prior current in $X.X other million. activities in expenses increase year to an an year-to-date working significantly million million, $X.X Excluding in driven an activities and prepared payments noncash of of the increase liabilities lower of million. million. from increase a prior and $XX.X and operating of as cash million and in assets increase current primarily acquisition-related $X.X versus year increase increase higher current year assets accounts operating the million contract and was in was other in This receivable by accounts $X.X capital capital the in the payable in $XX.X result the accrued in The before current by of year-to-date working offset prepaid contingent earnings increase capital is of year,

and continue long-term with cash growing that the expect of balancing conversion to as in We for company, a focused of we balance continued strong very be investments in to a rate XX%. of R&D ensure to incorporates operations cash excess and technology, from of infrastructure at scalability. the generation expectation into flow will continue operating our This the the adjusted EBITDA cash flow year on

X.Xx offering of quarter. in completed earn-out acquisition-related comparable September impact down In of as of XXXX, the net at approximately end of which million. the a that ratio second includes equity was XX, the we follow-on proceeds leverage raising Our payments $XXX.X October, X.Xx, cash from be may contingent

approximately $XXX.X availability Following million of credit had this of million and $XXX.X liquidity, facility. offering, including we of on on million hand our cash $XXX

The leverage granting invest fund additional working available facilities expand $XXX of enhances us under million of below and the [indiscernible]. Pro X.Xx. We significantly X.Xx, invest leverage ratio operations, credit and business our to also longer-term the below raise capital. our further well equity capital in raise, an forma have development flexibility M&A, liquidity, target in our additional our is for research

value and preferred We for a business given favorable preferred home our the first the not payment A-X in the to As equity creation dynamics. subject its view instrument stock cash, no the but Series the in obligation shares reminder, maturity have years. has X as make option, time we a this redeem potential the at flexible to preferred date, any to

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

increasing to million $XX X estimate Slide XX. of Moving our $XX during months year our year performance to adjusted full $XX of range first up XXXX, we outlook are the million which on guidance EBITDA previous on million of is from to full to Based our a $XX million.

of third implies guidance our prior fourth stream expectation the in from adjusted strong a EBITDA XX% XX% elevated acquisitions. recently our our COVID-XX continued and updated Our from results of some project wins CTEH work results reflects the closed in to range continuation increase response of of quarter growth year-over-year. quarter, The and

plus acquisitions. this double-digit of As a combination completed year, of high to excluding low CTEH, single-digit outlook for contribution organic growth based the reminder, on a the is

in are a have SG&A, margins mentioned mitigation plan cost measures our have in to R&D due reversed XXXX in pandemic. year our fully and mitigation a in to with we calls, as the growth-oriented efforts full year-over-year and response been investing back on accordance current As margin now reflected to taken These we expansion the year, the long-term previous COVID increase temporary company. higher-than-usual

XXXX. incur also will of company-related a full costs public We year in

year-over-year in CTEH typical steady in some to EBITDA the we of a is our That our X- is the resilient in weaken XXXX margin for now to continued mix While resulting to XXXX we spite and and expansion being full had margins surge in unchanged. than margins said, initially for work, the services X-year period versus remains COVID-XX-related remains for are accelerating Demand year consolidated likely margins lower CTEH's year. key which year change expected seeing Overall, full adjusted this, be business our slightly prior of is margins lines. our service at over outlook

thrilled IPO PFAS are we've to point, this us as last continues driving are regulations gases, the business, trends without in since strong rules growth, year and beyond. XXXX on differentiating continued renewables objectives our of see organic discussed to We To solutions to with CTEH both and our accelerate. and in deliver address recent strong momentum and greenhouse news our confidence to give and our additional and

target While some in the quarterly as Analysis segment, in left, and growth timing of XXXX. additional customers year we quarter addressable through in influence for full lines technological market, allow offer more us accretive projects to to the and projects service M&A can the see performance, to our immense our seen We to the thesis and during continue value intact the that third shift our remains Measurement opportunities advancements. an

forward environmental next year updating the we at as We the level continue to you joining solutions operating to quarters we on a appreciate business lines We Operator, global us today. made thank and our interest ready brand. and take your and to to become all coming the sincerely continue are in questions. Montrose, we for We right and team our in leading the high to strategy in you look expect execute we've to have years. progress

Operator

[Operator Instructions].

The from first of America. from Andrew Bank is question Obin

Unidentified Analyst

Shu Emily on is Obin. This [ph] Andrew for

any expected work, could year, provide color-related and you next on XQ given and So -- normalization of color just would CTEH's my if that yes, next be performance in detail great. question is first

related much XQ do you of be covered work to next work normalized CTEH expect a you to Or run then expect XQ? should of that COVID rate would So year? similar be And bit step a also in down? how do

Vijay Manthripragada

It's this it's response-related -- work and what hard be. is will the before, really pandemic to this Emily, really Vijay. said or related you we've to Yes. predict

how think set me Let our opportunities. of we about CTEH of kind reframe

hard reasons revenue performing that's shared anticipate services -- currently of bigger least part more when ebb We going or really million winter to market to to at $XX well before, of will is all continue above it's ongoing predict difficult it's more incidents, For of that exactly a COVID-related $XX We continue. positioned the And they're there's really per think kind the the million fluctuation rate. reason to work because an share, flow. at the expanded We we've predict kind through year to and in team. our and you regulations. run with

Biden out what saw some the the and came court vaccines testing. did stayed that. rules with administration You OSHA of of some

at end first hard back that remain they'll anticipate to share very answer next, elevated, year or So we clients, the course, how this and little can experience that going magnitude advise to this with with of do to you the year, actually half is But stop. that. is and and that. the half hard reasons, our I of the be going struggle the into this positioned start the to really Montrose, which folks well bit of confidence, is when your to for Does really of those Allan including and with leading predict stage. expertise a I to predict team, of exactly implement their CTEH it's And think just all through question? And it's have exactly of to all what I

Unidentified Analyst

that's Measurement And just a Yes, great. and follow-up then on question Analysis.

curious Just else projects availability? because labor customers postponement in Or what projects third the that and just drove the Is inflation there is uncertainty it? around to quarter. of in delaying something

Vijay Manthripragada

really nothing work. the the there's it. of else It's No, nature just to

on Montrose, tests you And do a once us year, do do fiscal to I've but means July lot think you you June to for a it measure example, whether them to in When it the these you. that said this is I client. or folks quarters. and meaningless to

September we make not why our October from sense or no does So QX pushed Montrose. there impact if to is from from saying perspective, keep to Montrose's quarterly that which clients' to you or material move measure perspective QX, from is something

untoward there's the in So remain very nothing business. it. We bullish on

Operator

[Operator from from next William is question Instructions]. Mulrooney Blair. Tim The

Timothy Mulrooney

for questions me. Two

first guide. your is The on

flat the about there at we adjusted implies year well? last factors that guide primarily full that of last want $XX is into because million quarter Or CTEH take about which to with EBITDA with comparison Your other of as year? the are account difficult fourth year. Is midpoint might

Allan Dicks

Alan. -- million XXXX. $XX CTEH of certainly the quarter is back this There's Tim, the did -- of revenue in in

So the right, of the forecast And higher so about we're we CTEH. flat year. terms then are bought are in for costs company certainly public this elevated, comparisons we've you're that what

You've got efforts mitigation of cost for some of in unwinding place the that all year. last the of were

the prepared a organic that's yes, growth the in we But it. remarks, mentioned our of are big accelerating. So part as side, on revenue

side And on comparison be the revenue so to very favorable we expect year-over-year. a

Timothy Mulrooney

Allan, forgot about the know costs in. cost mitigation those You coming efforts and back what, I

So that revenue I of about pandemic CTEH the wanted response-related quarter or third makes And to sense. ask the there revenue was CTEH if lot primarily in If in was a -- Was heard revenue. step-up I from petrochemical related any there disaster while. commission response step-up of taken that was out any Louisiana. there was Ida for infrastructure some then revenue in that in Hurricane a down

be was of I pandemic-related. remarks sounds almost revenue stream? here, adding didn't it's So a mean, all sounds it prepared Or CTEH's there like to know to from that I other -- things it if also your lot

Vijay Manthripragada

team don't Tim, it response pretty No. sorry. having portfolio. do The broad fantastic of job No. perhaps a And justice. does we a

and clients And and so performance. to their incidents many there's contribute many, that projects aggregate

because services people, because result market-leading my there have our of more are because market they because goes is share yes, because oil they across environmental more incidents will response. to have more spill they're they response, they have our position, there that be emergencies clients some And comments, so their there's events this able And portfolio. broader serve to or earlier in more -- some hurricane

the And the If $XX of above think is pandemic about about rate, the XXX million reason year-to-date, million to So so run much we the applies. because you talk -- they've all right, $XX done plus/minus. in

that's of serving here And services. is. clients are health that why of due kind that it, response, it toxicology, robust across safety, industrial There's of team emergency recovery, disaster a we hygiene, a broad very but our so and please across services. a portfolio in pandemic-related the say aggregate And is to lot us all we hear over about don't excess talk time that's

Operator

question Noelle next The from from Dilts is Stifel.

Noelle Dilts

Congrats on the quarter.

Vijay Manthripragada

Thanks.

Noelle Dilts

was So -- go ahead. I sorry,

the if opportunities into that like I and could particular year capture. areas frame talked those And of you of you about acceleration as any on and you're we the sort thinking in if could markets seeing over you've of carbon hoping things comment how years? out past, emerging about next you're few next some So more was biogas the look

Vijay Manthripragada

And a I'm a often really spend why don't we but of great Noelle. you with optimistic. large question, on That's it's part it, time

signal energy biogas driving the from more any kind geopolitically the as transition we clearly coupled necessitate we the some we're of markets which is and think, getting energy transition, being degree macro transition to sphere, the that fact is is kind on a in intensity So biogas the of think political gas of big that, natural side. it. with space, continued from negative And demand of any part markets, with going is carbon client

a so our asking are And clients certainly more. lot for

doing segment. that we're seeing is team is organic opportunity. Reuse more big lot It's market the a the and that acceleration. see part are We in organic And as why result, growth the a a more. you growth Remediation of And seeing

QX You of potential low can into we're effectively into for year. the fact upside that organic with projecting back kind the double-digit for now

of we an that in on is biogas anticipate They're don't and some sustained think generating we are some area especially don't capture, water and infrastructure the increased now term. inroads the some implicitly revenue generate area that. making our market, demand with and nice in. that speak dollars in there's and at allocations PFAS and of there, we that too then remediation have seeing team So way play in. is it's impact our also particular. Noelle, macro immediate research an we explicitly there's are infrastructure is about And involved obviously, development bill, Carbon That P&L. That the play any the and involved on to around but Water factors and actively the early, side. treatment

regulatory the serve. of markets pressures a not put out demand there. and guidance by of companies are ESG just So a seeing and we push. that the we of also is their from the The PF's Demand activity shareholders, document. EPA lot to lot we capital due there because being clients capital themselves, allocation only But driven the see

both seeing ask and for there. That's the real uptick nice is Canada and this there. a but Canadian And bullish the gas measurement our and and the us. pretty also surge that we're That's our U.S. area of impacts you you're of greenhouse U.S. a footprint segment. part is services, organic So then big seeing other advisory we're didn't part a about, in growth the acceleration organic Noel, big

market nice, excited seeing Our And well. the opportunities side, that. IP really more of on expanding we're portfolio, we're European our just team the water and because in is serving about as

biogas would as end both this So those treatment kind beyond. XXXX we're think are going aggregate and our financial have I growth we on at to also XXXX trajectory, in a our and pretty X and and near-term the of that methane year about current characterize primary renewables, as markets back excited, of water impact mitigation,

Noelle Dilts

somewhat mentioned you With you proactive water that's helping the that That pretty great. quick I've Super approach. follow-up markets. they're take Montrose guess a thought thorough. to a question. related always I approach Really Horizon, proactive had more

So you that by there? mean could and just expand importance the on what strategic you just

Vijay Manthripragada

upgrades. that, folks right? infrastructure think our something infrastructure bill, various they a side, capital the about the has amount pockets like with nuanced especially related are They're Yes. highly So the which fair at on help resiliency, treatment, of advisory play, to dollars regulation,

in primarily, about they is water how of and much portfolio, existing broader industrial with clients right? so think around clients So ecological really treat and is mostly helping terms our PFAS. remediation we And PFAS treatment water services water. Noelle, technology are and Horizon DoD contaminated

ways to have. so other potentially given the give fantastic advantages into that also penetrate And water but cross-sell we some will new services, they markets of us insights

that's So what I meant that. by

Operator

next Granda The from [ph] Company. from question is Chris & Needham

Unidentified Analyst

Chris on Congrats results. for the Jim. This on is

Vijay Manthripragada

you. Thank

Unidentified Analyst

capital we of the expect types the of faster do you M&A? a should sounds rich opportunities. like expect of M&A strategy? pretty size the pace in profile continuation we to rationale? the with of of doing there's should the raise, a expect you're And And change terms pipeline Or and a It the of that deals

Vijay Manthripragada

Vijay. is this Chris, Yes,

changing our more of doing hope to we've strategy. not same. think works, been the We we continue doing are what and We

intended be remains to We timely provide. and what are rich Yes, that's market candidly, the really capital really was fragmented. well and look, the opportunistic, to pipeline positioned the raise

of So certainly we've that said this before. assets. market. to There's more been frothy. of dirt also them the are come market have really now valuation expectations But There's no

to multiples, that buying still the remain going single-digit longer Chris, see you we're and thinking discipline to is term. mid- at we're So we that disciplined high because can important are

We not So for expect proactively. for all and deploying those it also we're but really anticipate for we certainly just hear there's opportunities growth, changing our some don't don't strategy. reasons, and here, deployment please organic us, please think us attractive M&A capital say

far. You've seen us do it well so

I doing continue to promise going we you, intend it So well forward.

Unidentified Analyst

the greater by of with very you try years? the will next That's the sense when front have Perfect. that anticipate of clients the which out bill? you And have be helpful. anything you coming of business changes couple passage infrastructure yet down affected with insight over materialize And most any in getting seen of the a could of be pike bill, to or having respect the what's areas might to into

Vijay Manthripragada

Yes.

bit But were this bit a would bill the I pass in clients I we Look, which anticipated given always early. come pieces activities some of would through. believe exactly expectation in mostly air it's our think that candidly, the was Congress. this I the and little certainly, think a

and been teams. system, by way, positive there's of for immediate Permitting through a that in of we expect going that It's so the take some no real business our way will some most be to to And part time flow The change. Chris. its this impacted our Assessment

you or environmental assessments you operations, decommission change the often or downgrade like. or infrastructure kind And of need and as build even permits and so

And AP&R continued in in often infrastructure up also remediation then it. within our demand result. And to increase see so expect demand go to needs as and Testing had due build the this we dollars segment. a

and So benefit I our are of to pick remediation activity, the practice broader fun field the will expect brown steam markets from some remediation that super well. up soil as starting

board it's benefits I across to the too see, So from early but at Montrose, expect this going point. call to we're out

Operator

question-and-answer like the the I turn back closing Manthripragada session. conference for concludes would This remarks. any to over Vijay to

Vijay Manthripragada

we'd gracious support of out beneficiaries set We Allan very your the you been it. for and making Montrose. continued care, all there. Thank well of do really Take much very We I appreciate appreciate time. be have the go a Rock prospects close and the excited Hogs And CTEH in here you. Little into Thank to going just about the in team, saying like our hosts [ph]. to next CTEH gratitude by really year. with team, we're

Operator

call. today's conference concludes This

you for You a have Thank participating, may lines. disconnect pleasant your day. and

Montrose Environmental (MEG) 10 Nov 212021 Q3 Earnings call transcript