Onterris — Third Quarter 2026 Earnings Summary

Financial Performance:

• Revenue for Q3 2026 was $203.0 million, a decrease from $224.9 million in Q3 2025, primarily due to the absence of a $45.4 million environmental emergency response event in the prior year.
• Excluding the prior-year emergency event, consolidated revenue increased approximately 13.1% year-over-year.
• Net Service Revenue (NSR) increased to $162.5 million in Q3 2026 from $160.5 million in Q3 2025.
• Net income increased to $9.0 million ($0.24 diluted EPS) in Q3 2026 from $8.4 million ($0.21 diluted EPS) in Q3 2025.
• Adjusted Net Income increased to $21.3 million ($0.56 diluted Adj EPS) in Q3 2026 from $14.2 million ($0.36 diluted Adj EPS) in Q3 2025.
• Consolidated Adjusted EBITDA reached a record $35.9 million in Q3 2026, up from $33.7 million in Q3 2025, representing 17.7% of revenue compared to 15.0% in the prior year.
• Operating cash flow for Q3 2026 increased 46% to $40.9 million from $28.1 million in Q3 2025.
• For the nine months ended September 30, 2026, net cash provided by operating activities was $35.4 million, compared to $55.5 million in the prior-year period.
• Leverage ratio as of September 30, 2026, was 2.9x, down from 3.2x at June 30, 2026.
• Total available liquidity was $192.0 million as of September 30, 2026, including $20.1 million in cash and $171.9 million available on the revolving line of credit.
• Income from operations was $12.3 million in Q3 2026, compared to $9.9 million in Q3 2025.

Guidance and Future Outlook:

• Onterris reiterated full-year 2026 guidance, projecting at least 150 basis points of margin expansion compared to 2025.
• The Company expects to convert 60.0% of full-year Consolidated Adjusted EBITDA into operating cash flow.
• Onterris expects to generate $30.0 million to $40.0 million in operating cash flow in Q4 2026.
• The Company expects a year-end 2026 leverage ratio of approximately 2.5x, consistent with the prior year.
• Management expects to achieve compound annual growth in revenue of ~15% and Adjusted EBITDA of ~25% through 2030.

Business Segments and Product Lines:

• Consulting and Treatment Segment: Generated $141.984 million in revenue and $30.837 million in Adjusted EBITDA for Q3 2026.
• Measurement and Analysis Segment: Generated $61.060 million in revenue and $15.961 million in Adjusted EBITDA for Q3 2026.
• The Company completed three small, accretive acquisitions in the second half of 2026 to expand its geographic footprint.
• Strong growth was reported in core consulting and water treatment services.
• Improved project execution and favorable business mix contributed to profitability.

Market and Competitive Landscape:

• Onterris is ranked #5 in ENR's global ranking of top environmental firms.
• The Company cites strong demand from clients addressing complex environmental requirements.
• The market is described as highly competitive.

Risks and Challenges:

• Revenue volatility is linked to the cyclical nature of the industry and unpredictable natural or manmade events.
• Customer concentration risks exist due to reliance on specific large events.
• The Board-led strategic review process carries risks regarding the ability to retain key personnel and maintain business relationships.
• Risks include the potential for the strategic review to divert management attention and incur unexpected costs.
• Other risks include inflationary pressures, interest rate fluctuations, trade tensions, regulatory changes, and cyber-attacks.

Management Commentary and Tone:

• CEO Vijay Manthripragada stated that results demonstrate meaningful progress against objectives, with higher Adjusted EBITDA and record margins despite lower reported revenue.
• Management highlighted that the unique integrated model is increasingly important as clients face more complex environmental requirements.
• The tone was confident regarding underlying demand, cost discipline, and the restart of the acquisition strategy.

Other Key Points:

• A Board-led strategic review remains ongoing, with Evercore Group L.L.C. and AEC Advisors LLC engaged as financial advisors and Kirkland & Ellis LLP as legal counsel.
• The Company repurchased 1.6 million shares of common stock in the current year.
• The Series A-2 Preferred Stock was fully redeemed in the prior year.
• The Company recorded a $3.7 million insurance gain in the current year, compared to a $10.6 million fair value gain related to the Series A-2 redemption in the prior year.
• Incremental bonus payments of $16.0 million were made in Q1 2026 for accrued 2025 bonuses.
• The Company expects to fund $13.9 million for recently completed acquisitions, $30.0 million in share repurchases, and $15.2 million in expected contingent consideration payments in 2026.