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Onterris, Inc. (ONT)

CIK: 0001643615. SIC: 8742 Services-Management Consulting Services. Latest 10-K as of: 2026-02-26.

SIC breadcrumb: Services > SIC Major Group 87 > SIC 8742 Services-Management Consulting Services

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1643615. Latest filing source: 0001193125-26-076511.

Selected Fundamentals

MetricValueUnitFYFiled
Revenue830,538,000USD20252026-02-26
Net income-843,000USD20252026-02-26
Assets981,296,000USD20252026-02-26

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-26. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001643615.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Metric201720182019202020212022202320242025
Revenue188,805,000233,854,000328,243,000546,413,000544,416,000624,208,000696,395,000830,538,000
Net income-16,491,000-23,557,000-57,949,000-25,325,000-31,819,000-30,859,000-62,314,000-843,000
Operating income-10,639,000-8,945,000-23,011,000-9,455,000-28,013,000-28,420,000-36,721,00011,725,000
Diluted EPS-6.48-1.56-1.62-1.57-2.22-0.14
Operating cash flow-2,845,00017,042,0001,850,00037,581,00020,649,00056,022,00022,235,000107,476,000
Capital expenditures3,772,0004,692,0007,756,0006,885,0009,583,00029,578,00021,333,00016,317,000
Dividends paid6,970,00016,400,00016,400,00016,400,00011,064,0004,150,000
Assets331,838,000602,726,000833,094,000791,914,000816,786,000990,353,000981,296,000
Liabilities229,307,000312,653,000363,665,000325,799,000342,606,000451,161,000530,121,000
Stockholders' equity5,601,0006,900,000-26,291,000137,145,000316,501,000313,187,000321,252,000446,264,000451,175,000
Cash and cash equivalents6,411,00034,386,000146,254,00089,828,00023,240,00012,935,00011,223,000
Free cash flow-6,617,00012,350,000-5,906,00030,696,00011,066,00026,444,000902,00091,159,000

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Metric201720182019202020212022202320242025
Net margin-8.73%-10.07%-17.65%-4.63%-5.84%-4.94%-8.95%-0.10%
Operating margin-5.63%-3.83%-7.01%-1.73%-5.15%-4.55%-5.27%1.41%
Return on equity-239.00%-42.25%-8.00%-10.16%-9.61%-13.96%-0.19%
Return on assets-7.10%-9.61%-3.04%-4.02%-3.78%-6.29%-0.09%
Liabilities / equity2.281.151.041.071.011.17
Current ratio1.001.201.992.221.591.501.43

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-07. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001643615.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

QuarterEnd DateRevenueNet IncomeDiluted EPSMethod
2021-Q22021-06-30-0.71reported discrete quarter
2022-Q32022-09-30-0.33reported discrete quarter
2023-Q12023-03-31-0.63reported discrete quarter
2023-Q22023-03-31-14,719,000reported discrete quarter
2023-Q22023-06-30159,101,000-0.38reported discrete quarter
2023-Q32023-06-30-7,174,000reported discrete quarter
2023-Q32023-09-30167,937,000-0.39reported discrete quarter
2023-Q42023-12-31165,742,000-1,441,000derived Q4 = FY annual - nine-month YTD
2024-Q12024-03-31155,325,000-13,357,000-0.53reported discrete quarter
2024-Q22024-03-31-13,357,000reported discrete quarter
2024-Q22024-06-30173,325,000-0.39reported discrete quarter
2024-Q32024-06-30-10,170,000reported discrete quarter
2024-Q32024-09-30178,687,000-0.39reported discrete quarter
2024-Q42024-12-31189,058,000-28,223,000derived Q4 = FY annual - nine-month YTD
2025-Q12025-03-31177,834,000-19,359,000-0.64reported discrete quarter
2025-Q22025-03-31-19,359,000reported discrete quarter
2025-Q22025-06-30234,543,0000.42reported discrete quarter
2025-Q32025-06-3018,356,000reported discrete quarter
2025-Q32025-09-30224,888,0000.21reported discrete quarter
2025-Q42025-12-31193,273,000-8,218,000derived Q4 = FY annual - nine-month YTD
2026-Q12026-03-31168,518,000-12,690,000-0.35reported discrete quarter

Quarterly Charts

Macro Cross-References

Latest quarter (10-Q)

Latest 10-Q source: 0001193125-26-211815.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Published MD&A gate trimmed front/tail over-capture. Confidence: high. Filing date: 2026-05-07. Report date: 2026-03-31.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our historical audited and unaudited consolidated financial statements and related notes and other information included elsewhere in this filing and our other filings with the SEC, including our unaudited condensed consolidated financial statements and the accompanying notes as of and for the three months ended March 31, 2026 and 2025 included in Part I, Item 1. “Financial Statements” in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from such forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those identified below and those discussed in the section entitled “Forward-Looking Statements”, and elsewhere in this filing and our other filings with the SEC, including in Item 1A. Risk Factors in the 2025 Form 10-K.

Overview

Since our inception in 2012, our mission has been to help clients and communities meet their environmental goals and needs. According to data derived from a 2025 Environmental Industry Study prepared by Environmental Business International, Inc., or EBI, the global environmental industry is estimated to generate approximately $1.9 trillion in revenues in 2026, with $620.0 billion concentrated in the United States.

Our Segments

Historically, the Company had three business segments—Assessment, Permitting and Response, Measurement and Analysis and Remediation and Reuse. Effective in the first quarter of 2026, we realigned two of our reportable segments to reflect updates made to our organizational structure and operating model. As a result of these changes, we aggregated the Assessment, Permitting and Response and Remediation and Reuse segments into a newly created Consulting and Treatment segment. The Company's Measurement and Analysis and corporate segments were not affected by the realignment.

We have conformed our presentation for all prior periods presented to reflect its revised segment reporting. See Notes 1 and 19 to our unaudited condensed consolidated financial statements included in Part 1, Item 1 “Financial Statements.”

Consulting and Treatment

The Consulting and Treatment segment provides environmental consulting, engineering, and implementation services to support clients in managing environmental objectives and regulatory requirements.

Measurement and Analysis

The Measurement and Analysis segment provides environmental testing and laboratory services, including the analysis of air, water, and soil.

These segments collectively support clients across the lifecycle of their operations, from assessment and compliance to monitoring and remediation. These operating segments have been structured to align with how we view and manage the business with the full lifecycle of our clients’ targeted environmental objectives in mind. Within each segment, we cover service offerings within similar regulatory frameworks, internal operating structures and client types. Corporate activities not directly related to segment performance, including general corporate expenses, interest and taxes, are reported separately.

Key Factors that Affect Our Business and Our Results

Our operating results and financial performance are influenced by a variety of internal and external trends and other factors. Some of the more important factors are discussed briefly below.

Acquisitions

Although we did not consummate any acquisitions in the three months ended March 31, 2026, or the year ended 2025, we have been, and expect to continue to be, an acquisitive company. Acquisitions expanded our environmental service capabilities across our segments, our access to technology, as well as our geographic reach in the United States, Canada, and Australia.

24

As a result of our acquisitions, goodwill and other intangible assets represent a significant proportion of our total assets, and amortization of intangible assets has historically been a significant expense. Our historical financial statements also include other acquisition-related costs, including costs relating to external legal support, diligence and valuation services and other transaction and integration-related matters. In addition, in any year gains and losses from changes in the fair value of business acquisition contingencies such as earn-outs could be significant. The amount of each for the three months ended March 31, 2026 and 2025, was:

Three Months Ended March 31,

(in thousands)

2026

2025

Amortization expense

$

6,674

$

8,390

Acquisition-related costs

81

711

Fair value changes in business acquisition contingencies

(838

)

477

We expect that amortization of identifiable intangible assets and other acquisition-related costs, assuming we continue to acquire, will continue to be significant.

During the three months ended March 31, 2026, we made a contingent consideration cash payment of $8.0 million for Origins Laboratory, Inc. During the three months ended March 31, 2025, we made contingent consideration payments of $6.6 million in the Company's common stock, of which $4.8 million related to deferred consideration payments for the acquisition of Epic Environmental Pty Ltd (Epic), and $1.8 million related to earn-out payments for SensibleIoT, LLC.

In connection with certain of our acquisitions, we may make up to $9.6 million in aggregate earn-out payments between the years 2026 and 2027, of which up to $5.1 million may be paid only in cash, up to $2.8 million may be paid only in common stock and up to $1.7 million may be paid, at our option, in cash or common stock. See Note 7 to our unaudited condensed consolidated financial statements included in Part I, Item 1. “Financial Statements.”

Organic Growth

We define organic growth as the change in revenues excluding revenues from (i) our environmental emergency response business, (ii) acquisitions for the first twelve months following the date of acquisition, and (iii) businesses held for sale, disposed of or discontinued. Management uses organic growth as one of the means by which it assesses our results of operations. Organic growth is not, however, a measure of revenue growth calculated in accordance with U.S. generally accepted accounting principles, or GAAP, and should be considered in conjunction with revenue growth calculated in accordance with GAAP. We have grown organically over the long term and expect to continue to do so.

Revenue Mix

Our segments and our business lines within each segment generate different levels of profitability and, accordingly, shifts in the mix of revenues between segments can impact our consolidated reported net income or loss, net income or loss margin, Segment Adjusted EBITDA and Segment Adjusted EBITDA margin from quarter to quarter and year to year. Inter-company revenues between business lines within segments have been eliminated. See Note 19 to our unaudited condensed consolidated financial statements included in Part 1, Item 1 “Financial Statements.”

Our revenues and certain expenses, including selling, general and administrative expense, vary from period to period due primarily to changes in organic growth, the incremental contribution from recent acquisitions and strategic decisions we may make from time to time. When we refer to changes driven by organic growth, we are referring to the contribution from businesses that have been part of Onterris for more than 12 months, with certain limited exclusions as discussed in greater detail above. In a given reporting period, when we refer to revenue changes driven by acquisitions, we are referring to the revenue contribution from any acquisition from its closing date through the first 12 months of that acquisition, at which point any subsequent revenue contribution therefrom would be organic.

Financing Costs

Financing costs are driven by interest incurred on our outstanding borrowings under the 2025 Credit Facility, as well as fees paid on the unutilized capacity of the facility and outstanding letters of credit issued under the facility. Interest is also incurred on outstanding borrowings under the Aircraft Loan and amounts outstanding under our capital lease facilities. Financing costs also include the amortization or write-offs of deferred debt issuance costs and amounts paid under our interest rate swaps. Amounts received related to our interest rate swaps are netted against financing costs.

Total debt, net of deferred debt issuance costs, at March 31, 2026 was $321.4 million, which was an increase of $33.1 million compared to December 31, 2025. The increase was primarily driven by an increase of $35.8 million outstanding under our revolving line of credit.

25

Interest expense, net was $5.5 million in the three months ended March 31, 2026 and $5.1 million in the three months ended March 31, 2025. We expect interest expense to remain a significant cost as we continue to leverage our 2025 Credit Facility to support our operations and future acquisitions. Our 2025 Credit Facility funded a portion of the redemption of the Series A-2 Preferred Stock in April and July 2025.

In February 2025, we refinanced our 2021 Credit Facility and replaced it with a new 2025 Credit Facility. See Note 12 to our unaudited condensed consolidated financial statements included in Part 1, Item 1 “Financial Statements” and “Liquidity and Capital Resources.”

Corporate and Operational Infrastructure Investments

Our historical operating results reflect the impact of our ongoing investments in our corporate infrastructure to support our growth. We have made and expect to continue to make investments in our business platform that we believe have laid the foundation for continued growth. Investments in logistics, quality, risk management, sales and marketing, safety, human resources, research and development, finance and information technology and other areas enable us to support continued growth. These investments should allow us to improve our margins over time.

Seasonality

Due to the field-based nature of certain of our services, weather patterns generally impact our field-based teams’ ability to operate in the winter months. As a result, our operating results experience quarterly variability with generally lower revenues and lower earnings in the first and fourth quarters and higher overall revenues and earnings in the second and third quarters. As we continue to grow and expand into new geographies and service lines, quarterly variability may deviate from historical trends.

Earnings Volatility

In addition to the impact of seasonality on earnings, our environmental emergency response business exposes us to potentially significant revenue and earnings fluctuations tied to large environmental emergency response projects following an incident or natural disaster or more broad scale events. Total revenue from emergency response related services was $8.1 million and $13.9 million for the three months ended March 31, 2026 and 2025, respectively. Demand for environmental emergency response services remains difficult to predict and as a result, we may have experienced revenues and earnings in prior years that are not indicative of future results, making those periods particularly difficult comparisons for future periods. Earnings volatility is also driven by the timing of large projects, particularly in our Consulting and Treatment segment, and the impact of acquisitions. As a result of these factors, and because demand for environmental services is not driven by specific or predictable patterns in one or more fiscal quarters, our business is better assessed based on annual results.

26

Results of Operations

The Three Months Ended March 31, 2026 Compared to the Three Mon

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high. Filing date: 2026-02-26. Report date: 2025-12-31.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and related notes and other information included in Item 8. “Financial Statements and Supplementary Data.” This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from such forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those identified below and those discussed in Item 1A. “Risk Factors” and elsewhere in this Annual Report on Form 10-K. See “Forward-looking Statements.”

Overview

Since our inception in 2012, our mission has been to help clients and communities meet their environmental goals and needs. According to data derived from a 2025 Environmental Industry Study prepared by Environmental Business International, Inc., or EBI, the global environmental industry is estimated to generate approximately $1.9 trillion in revenues in 2026, with $620.0 billion concentrated in the United States.

Our Segments

We provide environmental services to our clients through three business segments—Assessment, Permitting and Response, Measurement and Analysis, and Remediation and Reuse. For more information on each of our operating segments, see Item 1. “Business” and our audited consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data.”

Assessment, Permitting and Response

Assessment, Permitting and Response segment provides scientific advisory and consulting services to support environmental assessments, environmental emergency response and recovery, toxicology consulting and environmental audits and permits for current operations, facility upgrades, new projects, decommissioning projects and development projects. We work closely with clients to navigate the regulatory process at the local, state, provincial and federal levels, identify the potential environmental and political impacts of their decisions and develop practical mitigation approaches, as needed. In addition to environmental toxicology and given our expertise in helping businesses plan for and respond to disruptions, our scientists and response teams have helped clients navigate their preparation for and response to emergency response situations.

Measurement and Analysis

Measurement and Analysis segment is one of the largest providers of environmental testing and laboratory services in North America. Our highly credentialed teams test and analyze air, water and soil to determine concentrations of contaminants, as well as the toxicological impact of contaminants on flora, fauna and human health. Our offerings include source and ambient air testing and monitoring, leak detection, and advanced multi-media laboratory services, including air, soil, stormwater, wastewater and drinking water analysis.

Remediation and Reuse

Remediation and Reuse segment provides clients with engineering, design, and implementation services, primarily (i) treatment technologies which treat contaminated water, or (ii) soil remediation. Our employees, including engineers, scientists and consultants, provide these services to assist our clients in designing solutions, managing products and mitigating environmental risks and liabilities at their locations. We do not own the properties or facilities at which we implement these projects or the underlying liabilities, nor do we own material amounts of the equipment used in projects.

These operating segments have been structured and organized to align with how we view and manage the business with the full lifecycle of our clients’ targeted environmental concerns and needs in mind. Within each segment, we cover similar service offerings, regulatory frameworks, internal operating structures and client types. Corporate activities not directly related to segment performance, including general corporate expenses, interest and taxes, are reported separately.

Key Factors that Affect Our Business and Our Results

Our operating results and financial performance are influenced by a variety of internal and external trends and other factors. Some of the more important factors are discussed briefly below.

38

Acquisitions

Although we did not consummate any acquisitions in 2025, we have been, and expect to continue to be, an acquisitive company. Acquisitions have expanded our environmental service capabilities across all three segments, our access to technology, as well as our geographic reach in the United States, Canada, Europe and Australia. See Item 1. “Business—Strategic Acquisitions.” The table below sets forth the number of acquisitions completed in 2024 and 2023, fiscal year revenues contributed by those acquisitions in the year of acquisition, and the percentage of total annual revenues attributable to those acquisitions:

(Revenues in thousands)

Acquisitions

Completed

Fiscal Year

Revenues

Attributable

to Acquisitions

Percentage

of Fiscal

Year

Revenues

Fiscal year 2024

6

$

44,590

6.4

%

Fiscal year 2023

5

69,059

11.1

%

Revenues from acquired companies exclude intercompany revenues from revenue synergies realized between business lines within operating segments, as these are eliminated at the consolidated segment and Company level. We expect our revenue growth to continue to be driven in significant part by acquisitions. See Note 8 to our audited consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data.”

As a result of our acquisitions, goodwill and other intangible assets represent a significant proportion of our total assets, and amortization of intangible assets has historically been a significant expense. Our historical financial statements also include other acquisition-related costs, including costs relating to external legal support, diligence and valuation services and other transaction and integration-related matters. In addition, in any year gains and losses from changes in the fair value of business acquisition contingencies such as earn outs could be significant. The amount of each for the last three fiscal years is:

Year Ended December 31,

(in thousands)

2025

2024

2023

Amortization expense

$

29,929

$

34,943

$

30,130

Acquisition-related costs

1,825

7,827

6,930

Fair value changes in business acquisition contingencies

900

534

84

We expect that amortization of identifiable intangible assets and other acquisition-related costs, assuming we continue to acquire, will continue to be significant.

During the year ended December 31, 2025, we made contingent consideration payments of $17.8 million for Epic, SensibleIoT, LLC (Sensible), Vandrensning, and Spirit, of which $10.0 million was paid in cash, and $7.7 million was paid in the Company's common stock. During the year ended December 31, 2024, we made earn-out payments of $1.5 million in connection with our acquisition of Huco Consulting, Inc. (Huco) of which, $0.4 million was paid in cash, and the remaining $1.1 million in the Company's common stock. In connection with certain of our acquisitions, we may make up to $17.6 million in aggregate earn-out payments between the years 2026 and 2027, of which up to $5.1 million may be paid only in cash, up to $2.8 million may be paid only in common stock and up to $9.7 million may be paid, at our option, in cash or common stock. See Note 8 to our audited consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data.”

Organic Growth

We define organic growth as the change in revenues excluding revenues from i) our environmental emergency response business, ii) acquisitions for the first twelve months following the date of acquisition, and iii) businesses held for sale, disposed of or discontinued. Management uses organic growth as one of the means by which it assesses our results of operations. Organic growth is not, however, a measure of revenue growth calculated in accordance with U.S. generally accepted accounting principles, or GAAP, and should be considered in conjunction with revenue growth calculated in accordance with GAAP. We have grown organically over the long term and expect to continue to do so.

39

Discontinued Service Lines and Contracts

Periodically, or when circumstances warrant, we evaluate the performance of our business services to ensure that performance and outlook are consistent with expectations, and that the services offered are consistent with the Company’s mission.

During the first quarter of 2023, we determined to sell one of our specialty lab testing businesses, the Discontinued Specialty Lab, whose service offering was non-core to our business. On December 29, 2023, we sold the assets of the Discontinued Specialty Lab for a total sales price of $4.8 million. Proceeds from the sale were paid in cash of $0.5 million, and a promissory note receivable of $4.3 million. We recorded a gain on the sale of the assets of approximately $1.8 million and recorded a current expected loss of $2.2 million against the promissory note receivable. The Discontinued Specialty Lab, which was part of our Measurement and Analysis segment, generated revenues of $8.8 million in the year ended December 31, 2023. The discontinuation of this specialty service line did not represent a strategic shift that had a major effect on our operations and financial results, therefore it did not meet the requirements to be classified as discontinued operations.

Revenue Mix

Our segments and our business lines within each segment generate different levels of profitability and, accordingly, shifts in the mix of revenues between segments can impact our consolidated reported net income or loss, net income or loss margin, Segment Adjusted EBITDA and Segment Adjusted EBITDA margin from quarter to quarter and year to year. Inter-company revenues between business lines within segments have been eliminated. See Note 19 to our audited consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data.”

Our revenues and certain expenses, including selling, general and administrative expense, vary from period to period due primarily to changes in organic growth, the incremental contribution from recent acquisitions and strategic decisions we may make from time to time. When we refer to changes driven by organic growth, we are referring to the contribution from businesses that have been part of Montrose for more than 12 months, with certain limited exclusions as discussed in greater detail above. In a given reporting period, when we refer to revenue changes driven by acquisitions, we are referring to the revenue contribution from any acquisition from its closing date through the first 12 months of that acquisition, at which point any subsequent contribution therefrom would be organic.

Financing Costs

Financing costs are driven by interest incurred on our outstanding borrowings under the 2025 Credit Facility, as well as fees paid on the unutilized capacity of the facility and outstanding letters of credit issued under the facility. Interest is also incurred on outstanding borrowings under the Aircraft Loan and amounts outstanding under our capital lease facilities. Financing costs also include the amortization or write-offs of deferred debt issuance costs and amounts paid under our interest rate swaps. Amounts received related to our interest rate swaps are netted against financing costs.

Total debt, net of deferred debt issuance costs, at December 31, 2025 was $288.3 million, which was an increase of $65.6 million compared to December 31, 2024. The increase was primarily driven by an increase of $59.5 million outstanding under our revolving line of credit.

Interest expense, net was $19.6 million, $15.9 million and $7.8 million in the years ended December 31, 2025, 2024 and 2023, respectively. We expect interest expense to remain a significant cost as we continue to leverage our 2025 Credit Facility to support our operations and future acquisitions. Our 2025 Credit Facility funded a portion of the redemption of the Series A-2 Preferred Stock in April and July 2025.

In February 2025, we refinanced our 2021 Credit Facility and replaced it with a new 2025 Credit Facility. See Note 13 to our audited consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data.”

Corporate and Operational Infrastructure Investments

Our historical operating results reflect the impact of our ongoing investments in our corporate infrastructure to support our growth. We have made and expect to continue to make investments in our business platform that we believe have laid the foundation for continued growth. Investments in logistics, quality, risk management, sales and marketing, safety, human resources, research and development, finance and information technology and other areas, enable us to support continued growth. These investments should allow us to improve our margins over time.

40

Seasonality

Due to the field-based nature of certain of our services, weather patterns generally impact our field-based teams’ ability to operate in the winter months. As a result, our operating results experience quarterly variability with generally lower revenues and lower earnings in the first and fourth quarters and higher overall revenues and earnings in the second and third quarters. As we continue to grow and expand into new geographies and service lines, quarterly variability in our Measurement and Analysis and Remediation and Reuse segments may deviate from historical trends.

Earnings Volatility

In addition to the impact of seasonality on earnings, our environmental emergency response business exposes us to potentially significant revenue and earnings fluctuations tied to large environmental emergency response projects following an incident or natural disaster or more broad scale events. Total revenue from emergency response related services was $77.0 million, $48.0 million, and $91.4 million in the years ended December 31, 2025, 2024 and 2023, respectively. Demand for environmental emergency response services remains difficult to predict and as a result, we may have experienced revenues and earnings in prior years that are not indicative of future results, making those periods particularly difficult comparisons for future periods. Earnings volatility is also driven by the timing of large projects, particularly in our Remediation and Reuse segment, and the impact of acquisitions. As a result of these factors, and because demand for environmental services is not driven by specific or predictable patterns in one or more fiscal quarters, our business is better assessed based on annual results.

Results of Operations

Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024

Year Ended December 31,

(in thousands, except per share data)

2025

2024

Revenues

$

830,538

$

696,395

Cost of revenues (exclusive of depreciation and amortization)

496,192

418,193

Selling, general and administrative expense

270,806

261,627

Fair value changes in business acquisition contingencies

900

534

Depreciation and amortization

50,915

52,762

Income (loss) from operations

11,725

(36,721

)

Other income (expense), net

19,063

(1,735

)

Interest expense, net

(19,567

)

(15,862

)

Income (loss) before income taxes

11,221

(54,318

)

Income tax expense

12,064

7,996

Net loss

$

(843

)

$

(62,314

)

Series A-2 dividend payment

(4,150

)

(11,064

)

Net loss attributable to common stockholders

$

(4,993

)

$

(73,378

)

Weighted average common shares outstanding

Basic

35,120

33,061

Diluted

35,120

33,061

Net loss per share attributable to common stockholders

Basic

$

(0.14

)

$

(2.22

)

Diluted

$

(0.14

)

$

(2.22

)

Revenues

Year Ended December 31,

Change

(in thousands, except %)

2025

2024

$

%

Revenues

$

830,538

$

696,395

$

134,143

19.3

%

41

For the year ended December 31, 2025, we generated revenues of $830.5 million, an increase of $134.1 million or 19.3% from the year ended December 31, 2024. The period over period increase in revenues was primarily driven by strong organic growth of 12.7% or $81.8 million across all three segments, $29.0 million higher emergency response revenue, and $25.0 million from acquisitions completed in 2024. Revenue from environmental response was $77.0 million and $48.0 million for the years ended December 31, 2025 and 2024, respectively. Revenues from the exited European operations were $3.8 million for the year ended December 31, 2025, compared to $3.2 million for the year ended December 31, 2024.

Revenue by segment, and as a percentage of total revenues, was as follows:

Year Ended December 31,

2025

2024

(in thousands, except %)

Revenues

% of Total Revenues

Revenues

% of Total Revenues

Assessment, Permitting and Response

$

307,428

37.0

%

$

214,850

30.9

%

Measurement and Analysis

245,860

29.6

224,366

32.2

Remediation and Reuse

277,250

33.4

257,179

36.9

$

830,538

$

696,395

Cost of Revenues

Year Ended December 31,

Change

(in thousands, except %)

2025

2024

$

%

Cost of revenues (exclusive of depreciation and amortization)

$

496,192

$

418,193

$

77,999

18.7

%

Cost of revenue as a % of revenue

59.7

%

60.1

%

Cost of revenues consists of all direct costs required to provide services, including fixed and variable direct labor costs, material parts and components, and other outside services, field and lab supplies, vehicle costs and travel-related expenses. Variable costs of revenues generally follow the same trends as revenue, while fixed costs tend to change primarily as a result of acquisitions.

Cost of revenues for the year ended December 31, 2025 increased from the year ended December 31, 2024 driven primarily by an increase in revenues. Cost of revenues as a percentage of revenue dropped to 59.7% from 60.1% in 2024, primarily due to favorable segment revenue mix. Revenue in our Assessment, Permitting and Response segment which has our lowest cost of revenues as a percentage of revenue, increased to 37.0% of total revenues for the year ended December 31, 2025 from 30.9% in the prior year. Cost of revenues as a percentage of revenue also benefited from operating leverage in our Measurement and Analysis segment, partially offset by higher sub-contract costs in our Assessment, Permitting and Response segment attributable to higher external lab spending on higher emergency response revenues.

Selling, General and Administrative Expense

Year Ended December 31,

Change

(in thousands, except %)

2025

2024

$

%

Selling, general and administrative expense

$

270,806

$

261,627

$

9,179

3.5

%

Selling, general and administrative expense consists of general corporate overhead, including executive, legal, finance, safety, risk management, human resource, marketing and information technology related costs, as well as indirect operational costs of labor, rent, insurance and stock-based compensation.

Selling, general and administrative expense for the year ended December 31, 2025 increased by $9.2 million or 3.5% compared to the year ended December 31, 2024. This increase was primarily driven by an increase of $22.1 million in labor costs, mainly driven by a $10.8 million increase in bonus expenses, as well as an increase in headcount, $6.7 million increase in bad debt expense, primarily driven by an increase in aged receivables from the City of Tustin, and $2.0 million increase in severance costs. These increases were partially offset by a decrease of $22.5 million in stock based compensation expense, primarily related to the expensing of the unamortized value of executive team stock appreciation rights (SARs) in the prior year.

42

See Item 7A. “Quantitative and Qualitative Disclosures About Market Risk” for additional information regarding the impact of inflation on our business and Note 17 to our audited consolidated financial statements included in Item 8. "Financial Statements and Supplementary Data." for details on the SARs cancellation.

Depreciation and Amortization

Year Ended December 31,

Change

(in thousands, except %)

2025

2024

$

%

Depreciation and amortization

$

50,915

$

52,762

$

(1,847

)

(3.5

%)

The decrease in depreciation and amortization expense was primarily due to lower amortization of intangibles due to the absence of acquisitions in 2025, partially offset by increased depreciation expense due to higher property and equipment balances.

See Notes 6, 7, 8 and 9 to our audited consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data.”

Other Income (Expense), Net

Year Ended December 31,

Change

(in thousands, except %)

2025

2024

$

%

Other income (expense), net

$

19,063

$

(1,735

)

$

20,798

(1198.7

%)

Other income, net for the year ended December 31, 2025 of $19.1 million was driven by a $20.2 million fair value gain related to the Series A-2 Preferred Stock conversion option and $0.8 million of other non-operating income, partially offset by a $2.0 million loss related to fair value adjustments on our interest rate swaps.

Other expense, net for the year ended December 31, 2024 of $1.7 million was driven by a $1.9 million loss related to fair value adjustments on our interest rate swaps and a $1.2 million loss related to fair value adjustments on the Series A-2 Preferred Stock conversion option, partially offset by $1.4 million gain from other income.

See Notes 13, 14 and 16 to our audited consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data.”

Interest Expense, Net

Year Ended December 31,

Change

(in thousands, except %)

2025

2024

$

%

Interest expense, net

$

19,567

$

15,862

$

3,705

23.4

%

Interest expense, net incurred in the year ended December 31, 2025, was $19.6 million, compared to $15.9 million for the year ended December 31, 2024. The increase in interest expense was primarily due to a higher debt balance outstanding during the year, partially offset by lower interest rates. Interest expense in 2025 was also impacted by the write-off of deferred debt issuance costs of $0.9 million as a result of the refinancing of our senior secured credit facility in February 2025.

Weighted average interest rates as of December 31, 2025 and December 31, 2024 were 6.1% and 7.2%, respectively, before the benefit of interest rate swaps, and 5.5% and 5.8%, respectively, after the benefit of interest rate swaps. See “—Key Factors that Affect Our Business and Our Results—Financing Costs” and Notes 7 and 13 to our audited consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data.”

Income Tax Expense

Year Ended December 31,

Change

(in thousands, except %)

2025

2024

$

%

Income tax expense

$

12,064

$

7,996

$

4,068

50.9

%

43

Income tax expense was $12.1 million and $8.0 million for the years ended December 31, 2025 and 2024, respectively. The difference between our effective tax rate and the federal statutory rate of 21.0% is primarily attributable to items recorded for GAAP but permanently disallowed for U.S. federal income tax purposes, change in valuation allowance, research and development tax credits and state and foreign income tax provisions.

Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023

For a discussion of our consolidated results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023, please refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 3, 2025, or the 2024 Annual Report.

Segment Results of Operations

Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024

Year Ended December 31,

2025

2024

(in thousands, except %)

Segment Revenues

Segment Adjusted EBITDA(1)

Segment Adjusted EBITDA Margin(2)

Segment Revenues

Segment Adjusted EBITDA(1)

Segment Adjusted EBITDA Margin(2)

Assessment, Permitting and Response

$

307,428

$

68,455

22.3

%

$

214,850

$

48,020

22.4

%

Measurement and Analysis

245,860

64,351

26.2

224,366

50,521

22.5

Remediation and Reuse

277,250

36,278

13.1

257,179

38,339

14.9

Total Reportable Segments

$

830,538

$

169,084

20.4

%

$

696,395

$

136,880

19.7

%

Corporate and Other

$

(52,920

)

(6.4

)%

$

(41,092

)

(5.9

)%

(1)
For purposes of evaluating segment profit, the Company’s chief operating decision maker reviews Segment Adjusted EBITDA as a basis for making the decisions to allocate resources and assess performance. See Note 19 to our audited consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data.”

(2)
Represents Segment Adjusted EBITDA as a percentage of revenues.

Revenues

Year Ended December 31,

Change

(in thousands, except %)

2025

2024

$

%

Assessment, Permitting and Response

$

307,428

$

214,850

$

92,578

43.1

%

Measurement and Analysis

245,860

224,366

21,494

9.6

Remediation and Reuse

277,250

257,179

20,071

7.8

Total Reportable Segments

$

830,538

$

696,395

$

134,143

19.3

%

Assessment, Permitting and Response segment revenues for the year ended December 31, 2025 increased compared to the year ended December 31, 2024 due to organic growth within our non-response consulting and advisory services of 34.6% or $57.8 million driven by remediation consulting work cross sold from an initial emergency response incident, an increase in revenues from environmental emergency responses of $29.0 million, and $5.8 million additional revenue from acquisitions completed in 2024. Emergency response revenue was $77.0 million and $48.0 million for the years ended December 31, 2025 and December 31, 2024, respectively.

Measurement and Analysis segment revenues for the year ended December 31, 2025 increased compared to the year ended December 31, 2024 as a result of organic growth of 5.4% or $12.0 million and $11.6 million additional revenue from acquisitions completed in 2024, partially offset by a decrease in revenue of $2.3 million related to a lab sold in the fourth quarter of 2024. Organic growth was primarily driven by cross selling efforts and an increase in certain state regulatory requirements.

44

Remediation and Reuse segment revenues for the year ended December 31, 2025 increased compared to the year ended December 31, 2024 as a result of organic growth of 4.7% or $12.0 million and $7.6 million additional revenue from acquisitions completed in 2024. Organic growth was driven primarily by growth in our water treatment business partially offset by lower revenues in our renewables business, which we are winding down due in part to regulatory uncertainty and declining demand. Renewables revenue was $2.8 million and $12.6 million for the years ended December 31, 2025 and December 31, 2024, respectively. Revenues from the exited European operations were $3.8 million for the year ended December 31, 2025, compared to $3.2 million for the year ended December 31, 2024.

Segment Adjusted EBITDA

Year Ended December 31,

Year Ended December 31,

Change

2025

2024

2025

2024

$

Margin %

(in thousands, except %)

Segment Adjusted EBITDA(1)

Segment Adjusted EBITDA(1)

Segment Adjusted EBITDA Margin(2)

Segment Adjusted EBITDA Margin(2)

Segment Adjusted EBITDA(1)

Segment Adjusted EBITDA Margin(2)

Assessment, Permitting and Response

$

68,455

$

48,020

22.3

%

22.4

%

$

20,435

(0.1

)%

Measurement and Analysis

64,351

50,521

26.2

22.5

13,830

3.7

Remediation and Reuse

36,278

38,339

13.1

14.9

(2,061

)

(1.8

)

Total Reportable Segments

$

169,084

$

136,880

20.4

%

19.7

%

$

32,204

0.7

%

Corporate and Other

$

(52,920

)

$

(41,092

)

(6.4

)%

(5.9

)%

$

(11,828

)

(1)
For purposes of evaluating segment profit, the Company’s chief operating decision maker reviews Segment Adjusted EBITDA as a basis for making the decisions to allocate resources and assess performance. See Note 19 to our audited consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data.”

(2)
Represents Segment Adjusted EBITDA as a percentage of revenues.

Assessment, Permitting and Response Segment Adjusted EBITDA for the year ended December 31, 2025 increased compared to the year ended December 31, 2024 primarily as a result of higher revenues. Segment Adjusted EBITDA margin for the year ended December 31, 2025 decreased compared to the year ended December 31, 2024 primarily as a result of a bad debt expense of $4.9 million related to the City of Tustin, partially offset by favorable emergency response revenue.

Measurement and Analysis Segment Adjusted EBITDA for the year ended December 31, 2025 increased compared to the year ended December 31, 2024 primarily as a result of higher revenues driven by organic growth. Segment Adjusted EBITDA margin for the year ended December 31, 2025 increased compared to the year ended December 31, 2024 primarily as a result of improved operating performance and operating leverage.

Remediation and Reuse Segment Adjusted EBITDA for the year ended December 31, 2025 decreased compared to the year ended December 31, 2024 primarily due to losses incurred in our renewable energy business in the current year, partially offset by higher revenues in our water treatment business. Segment Adjusted EBITDA margin for the year ended December 31, 2025 decreased compared to the year ended December 31, 2024 primarily as a result of losses incurred in our renewables business. Adjusted EBITDA in our renewable energy business was a loss of $4.4 million in the year ended December 31, 2025, compared to Adjusted EBITDA of $0.9 million in the prior year.

Corporate and other costs for the year ended December 31, 2025 increased compared to the year ended December 31, 2024 primarily due to higher bonus expense of $7.2 million, driven by an outperformance in the current year versus the prior year, higher outside service costs of $2.7 million primarily related to an IT migration, and higher non-bonus related payroll costs.

Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023

For a discussion of our segment results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023, please refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2024 Annual Report.

Liquidity and Capital Resources

Liquidity describes the ability of a company to generate sufficient cash flows to meet the cash requirements of its business operations, including working capital needs, debt service, acquisitions, other commitments and contractual obligations. We

45

consider liquidity in terms of cash flows from operations and other sources, including availability under our 2025 Credit Facility, and their sufficiency to fund our operating and investing activities.

Our principal sources of liquidity have been cash generated by operating activities, borrowings under our senior secured credit facilities, other borrowing arrangements, and proceeds from the issuance of common stock. Historically, we have financed our operations and acquisitions from a combination of cash generated from operations, periodic borrowings under senior secured credit facilities, and proceeds from the issuance of common and preferred stock. Our primary cash needs are for day-to-day operations, to fund working capital requirements, to fund our acquisition strategy and any related cash earn-out obligations, to pay interest and principal on our indebtedness, and to make capital expenditures. Additionally, in connection with certain acquisitions, we agree to earn-out provisions and other purchase price adjustments that may require future payments. We may make up to $17.6 million in aggregate earn-out payments between the years 2026 and 2027 in connection with certain of our acquisitions of which up to $5.1 million may be paid only in cash, up to $2.8 million may be paid only in common stock and up to $9.7 million may be paid in cash or, at our option, in common stock. See Note 8 to our audited consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data." As of December 31, 2025, we had $214.2 million available under the 2025 Credit Facility (after giving effect to any outstanding letters of credit, and subject to borrowing base limitations), and $11.2 million of cash on hand. In April and July 2025, we redeemed the remaining $122.2 million in aggregate stated value of the outstanding Series A-2 Preferred Stock using cash and borrowings under our revolving line of credit.

We expect to continue to finance our liquidity requirements, including any cash earn-out payments that may be required in connection with acquisitions, through cash generated from operations and borrowings under our 2025 Credit Facility. We believe these sources will be sufficient to fund our cash needs in the short-term and long-term.

Cash Flows

The following table summarizes our cash flows for the periods presented:

Year Ended December 31,

(in thousands)

2025

2024

2023

Net cash provided by (used in):

Operating activities

$

107,476

$

22,235

$

56,022

Investing activities

(15,842

)

(138,045

)

(101,624

)

Financing activities

(93,122

)

106,002

(20,110

)

Change in cash, cash equivalents and restricted cash

$

(1,488

)

$

(9,808

)

$

(65,712

)

Operating Activities

Cash flows from operating activities can fluctuate from period-to-period as earnings, working capital needs and the timing of payments for contingent consideration, taxes, bonus payments and other operating items impact reported cash flows.

Net cash provided by operating activities was $107.5 million for the year ended December 31, 2025, compared to $22.2 million for the year ended December 31, 2024. The period-over-period increase of $85.2 million, was primarily due to an increase in earnings before non-cash items of $29.8 million, and improved working capital performance, reflecting a $55.2 million lower cash outflow.

Working capital (which excludes contingent consideration payments and changes in right-of-use assets) decreased by $14.8 million in the year ended December 31, 2025, primarily due to an increase in accounts payable and other accrued liabilities of $8.3 million and accrued payroll and benefits of $18.5 million, due to the timing of payments and growth in the company, partially offset by an increase in accounts receivable of $10.1 million driven by an increase in revenue.

For the year ended December 31, 2024, net cash provided by operating activities was $22.2 million, compared to net cash provided by operating activities of $56.0 million for the year ended December 31, 2023. The period-over-period decrease of $33.8 million, was primarily due to a higher increase in working capital of $40.4 million in 2024 versus $3.3 million in 2023, as well as higher interest payments of $6.7 million and higher tax payments of $3.2 million, partially offset by higher cash from operating activities before changes in working capital, interest, tax and contingent earnout payment of $4.3 million, and lower contingent earnout payments of $0.6 million.

Working capital increased by $40.4 million in the year ended December 31, 2024, primarily due to an increase in accounts receivable of $42.0 million driven by higher revenues in the fourth quarter versus the prior year, and the previously disclosed receivable from a large U.S. government project for the City of Tustin, CA. This increase was partially offset by an increase in

46

accounts payable and other accrued liabilities (including accrued payroll) of $2.1 million, due to the timing of payments and growth in the company.

Investing Activities

For the year ended December 31, 2025, net cash used in investing activities was $15.8 million primarily driven by $16.3 million in purchases of property and equipment.

For the year ended December 31, 2024, net cash used in investing activities was $138.0 million, driven by cash paid for the acquisitions of EPIC, 2DOT, ETA, Paragon, Spirit, and Origins, net of cash acquired, of $113.1 million, $21.3 million in purchases of property and equipment, $3.3 million in payment of other purchase price obligations. and $2.5 million of proprietary software development costs, partially offset by $2.1 million proceeds received from the sale of property and equipment.

For the year ended December 31, 2023, net cash used in investing activities was $101.6 million, driven by cash paid for the acquisitions of Matrix, GreenPath, Vandrensning, Frontier and EAI, net of cash acquired, of $66.2 million, as well as $29.6 million in cash consideration for purchases of property and equipment (which included the purchase of a $12.2 million replacement aircraft for use in emergency responses following an aircraft crash in February 2023), $3.4 million in proprietary software development costs, $2.6 million related to the minority investment in certain companies and the payment of assumed purchase price obligations of $1.4 million, partially offset by proceeds received from the sale of property and equipment of $1.0 million.

Financing Activities

For the year ended December 31, 2025, net cash used in financing activities was $93.1 million. Cash used in financing activities was driven by net repayments of borrowing of $612.6 million, redemption of the Series A-2 Preferred Stock of $122.2 million, contingent consideration payments of $11.0 million, repayments of finance leases of $11.1 million, taxes paid related to net share settlement of equity awards of $10.7 million, dividends on the Series A-2 Preferred Stock of $4.2 million, and payment of financing cost of $2.4 million, partially offset by borrowing under our credit facility of $677.6 million.

For the year ended December 31, 2024, net cash provided by financing activities was $106.0 million. Cash provided by financing activities was driven by proceeds from borrowing of $453.1 million, net proceeds from the issuance of common stock through a public offering of $121.8 million, and proceeds from the exercise of stock options of $2.1 million, partially offset by repayment of borrowing of $393.7 million, a partial redemption of the Series A-2 Preferred Stock of $60.0 million, and dividends on the Series A-2 Preferred Stock of $11.1 million.

For the year ended December 31, 2023, net cash used in financing activities was $20.1 million. Cash used in financing activities was driven by the payment of the quarterly dividends on the Series A-2 Preferred Stock of $16.4 million, amortization payments on the 2021 Credit Facility term loan and the aircraft loan of $12.2 million and $0.6 million, respectively, the repayment of finance leases of $4.6 million and the payment of acquisition-related contingent consideration of $1.9 million, partially offset by proceeds received from the aircraft loan of $10.9 and proceeds from the exercise of stock options of $4.7 million.

Credit Facilities

In February 2025, we replaced our existing senior secured credit facility with a new senior secured credit facility, the 2025 Credit Facility. Refer to Note 13 to our audited consolidated financial statements included in Item 8. "Financial Statements and Supplementary Data."

See Note 13 to our audited consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data.” for details on the 2025 Credit Facility and 2021 Credit Facility.

Series A-2 Preferred Stock

In January 2024, the Company redeemed $60.0 million in aggregate stated value of the Series A-2 Preferred Stock in cash. The Company redeemed $60.0 million and $62.2 million in aggregate stated value of the outstanding Series A-2 Preferred Stock on April 1, 2025 and July 1, 2025, respectively. The Company funded the redemptions with cash on hand and, with respect to the 2025 redemptions, borrowings under its senior secured credit facilities. Following the July 2025 redemption, no A-2 Preferred Shares remained outstanding.

47

See Note 16 to our audited consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data.” for details regarding the Series A-2 Preferred Stock.

Stock Repurchase Program

On May 7, 2025, the Company announced that its Board of Directors has approved a stock repurchase program of up to $40.0 million. The repurchase program does not have a set expiration date. The Company has not made any repurchases under the program to date.

Critical Accounting Policies and Estimates

The Company's significant accounting policies and estimates are described in Notes 2 and 3 to our audited consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data.”, which were prepared in accordance with U.S. GAAP. Critical accounting policies are those that we believe are both most important to the portrayal of our financial condition and results of operations, and require complex, subjective judgments, often as a result of the need to make estimates and assumptions about the effect of matters that are inherently uncertain. Management bases its estimates and judgments on historical experience and various other factors that are believed to be reasonable under the circumstances and judgments and uncertainties affecting the application of those policies may result in materially different amounts being reported under different conditions or using different assumptions. The Company considers the following policies and estimates to be the most critical in understanding the judgments that are involved in preparing its consolidated financial statements:

Use of Estimates

U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the audited consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates inherent in the preparation of the audited consolidated financial statements include, but are not limited to, management’s forecast of future cash flows used as a basis to assess recoverability of long-lived assets, the allocation of purchase price to tangible and intangible assets, allowances for doubtful accounts, the estimated useful lives over which property and equipment is depreciated and intangible assets are amortized, subsequent measurement of goodwill, fair value of contingent consideration payables, fair value of embedded derivatives, equity-based compensation expense and deferred taxes. Actual results could materially differ from those estimates.

Revenue Recognition

Revenue is recognized in accordance with Financial Accounting Standards Board Accounting Standards Codification, or ASC, Topic 606, Revenue from Contracts with Customers. The following is considered in the recognition of revenue under ASC 606:

We account for individual promises in contracts as separate performance obligations if the promises are distinct. The assessment requires judgment. The majority of our contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and is, therefore, not distinct. Certain contracts in our Measurement and Analysis segment have multiple performance obligations, most commonly due to the contracts providing for multiple laboratory tests which are individual performance obligations.

For the Measurement and Analysis contracts with multiple performance obligations, we allocate the transaction price to each performance obligation based on the relative standalone selling price of each performance obligation. The standalone selling price of each performance obligation is generally determined by the observable price of a service when sold separately.

On the majority of fixed fee contracts, we recognize revenue, over time, using either the proportion of actual costs incurred to the total costs expected to complete the contract performance obligation (cost to cost method), or the time-elapsed basis.

There are inherent uncertainties in the estimation process for cost to cost contracts, as the estimation of total contract costs and estimates to complete is complex, subject to many variables, and requires judgment. It is possible that estimates of costs to complete a performance obligation will be revised in the near-term based on actual progress and costs incurred. These uncertainties primarily impact our contracts in the Remediation and Reuse segment.

Time-and-materials contracts contain variable consideration. However, performance obligations qualify for the “Right to Invoice” practical expedient. Under this practical expedient, we recognize revenue, over time, in the amount to which we have a right to invoice.

48

Accounting for Acquisitions and Business Acquisition Contingencies

We account for acquisitions using the acquisition method of accounting. The most critical areas of judgment in applying the acquisition method include selecting the appropriate valuation techniques and assumptions that are used to measure the acquired assets and assumed liabilities at fair value, particularly for intangible assets, contingent consideration, acquired tangible assets such as property, plant and equipment. We may use independent valuation specialists to assist in determining the estimated fair values of assets acquired and liabilities assumed.

Subsequent changes in the fair value of contingent consideration are recognized as a gain or loss in our consolidated statements of operations. Payments of contingent consideration are reflected in financing activities in our consolidated statements of cash flows to the extent included as part of the initial purchase price, or in operating activities if the payment exceeds the amount included in the initial purchase price.

Impairments of Long Lived Assets and Goodwill

Goodwill is not amortized but is tested for impairment annually, or more often if impairment indicators are present, at the reporting unit level. We estimate the fair value of our reporting units based on the income approach utilizing the discounted cash flow method and the market-based approach utilizing the public company market multiple method. The valuation techniques we use are the discounted cash flow method and the guideline public company method, which are equally weighted, with key assumptions including estimated future cash flows, discount rates, peer public company group selection and financial performance of reporting units relative to the peer public company group.

We test our goodwill for impairment annually as of October 1. For the October 1, 2025 impairment test, all reporting units were tested using a qualitative approach. Under this approach, we assess qualitative factors and relevant events and circumstances to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The results of our analysis indicated that it is not more likely than not that the fair value of any reporting unit was less than its carrying amount, and thus, a quantitative analysis was not performed.

As part of our assessment, we evaluated macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, and other relevant reporting unit-specific events. Based on this analysis, we concluded that no indicators of impairment were present as of October 1, 2025.

We will continue to closely monitor actual results against expectations and assess whether any significant changes in current events or conditions alter our projections for estimated future cash flows, discount rates, and market multiples. No triggering events were identified during the year that required an interim impairment test.

While we believe our conclusions regarding the fair value estimates of our reporting units are appropriate, these estimates are inherently uncertain and involve various judgments and assumptions. Factors influencing these estimates include the growth rate and extent in the markets served by our reporting units, the realization of future sales price and volume increases, fluctuations in exchange rates, fluctuations in price and availability of key materials, future operating efficiencies and, with respect to discount rates, volatility in interest rates and the cost of equity.

Embedded Derivatives

Embedded derivatives that are required to be bifurcated from the underlying host instrument are accounted for and valued as a separate financial instrument. These embedded derivatives are bifurcated, accounted for at their estimated fair value, which is based on certain estimates and assumptions, and presented separately on the consolidated statements of financial position. Our valuation of embedded derivatives follows the With and Without method of the income approach, where the value of the derivative is derived by comparing projected cash flows with and without the embedded feature. The discount rate reflects the level of risk associated with these cash flows and is determined based on and evaluation of the Company’s credit risk and market required yields for comparable securities with similar credit risk. To derive a credit rating indication, the Company utilizes the Synthetic Credit Rating Model, and the recovery rate method is employed to establish the Company’s discount rate. Changes in fair value of the embedded derivatives are recognized as a component of other income/ expense on our consolidated statements of operations.

Stock-based Compensation

We sponsor stock incentive plans that allow for issuance of employee stock options and other forms of equity incentives.

Awards that are issued to non-employees in exchange for their services are accounted for under ASC 505, Equity-Based Payments to Non-Employees. ASC 505 requires that the fair value of the equity instruments issued to a non-employee be measured on the earlier of: (i) the performance commitment date or (ii) the date the services required under the arrangement have been completed.

49

Certain of the performance based restricted stock units will only meet the requirements for establishing a grant date when the final calculated financial performance metrics and the amount of awards have been approved by our Board of Directors, which will then trigger the service inception date, the fair value of the awards, and the associated expense recognition period.

The fair value of the remaining stock-based payment awards is expensed over the vesting period of each tranche on a straight-line basis. Any modification of an award that increases its fair value will require us to recognize additional expense. The fair value of stock options under its employee stock incentive plan are estimated as of the grant date using the Black-Scholes option valuation model, which is affected by its estimates of the risk-free interest rate, its expected dividend yield, expected term and the expected share price volatility of its common shares over the expected term. No dividend rates are used in the calculation as these are not applicable to us. Forfeitures are recognized as incurred. Employee options are accounted for in accordance with the guidance set forth by ASC 718.

50