Onterris Reports Third Quarter Results, Reiterates Full-Year 2026 Guidance, Announces Completed Acquisitions, and Provides Update on Board-led Strategic Review Process
Excluding one large prior-year recovery event, quarterly revenue increased approximately 13.1%.
Sentiment and the balance of points
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Ongoing Strategic Review
- Board-led strategic review remains ongoing
- To date, the Company has engaged with a number of strategic and financial parties
- The Company engaged Evercore Group L.L.C. and AEC Advisors LLC as financial advisors and Kirkland & Ellis LLP as legal counsel in connection with the review
Third Quarter 2026 Highlights (comparisons to third quarter 2025)
-
Revenue of
$203.0 million $224.9 million -
Net income increased to
$9.0 million $0.24 $8.4 million $0.21 -
Adjusted Net Income1 increased to
$21.3 million $0.56 $14.2 million $0.36 -
Record third quarter Consolidated Adjusted EBITDA1 of
$35.9 million 17.7% , increased from$33.7 million 15.0% -
Third-quarter operating cash flow increased
46% to$40.9 million $28.1 million
Acquisitions Completed in Second Half of 2026
- Completed three small tuck-in and highly accretive acquisitions, expanding the Company's geographic footprint and supporting the strategy of disciplined investment in integrated environmental solutions and technology-driven growth
Full-Year 2026 Guidance Reiterated
- Onterris continues to focus on strong margin expansion. Midpoints of reiterated guidance represent at least 150 basis points of margin expansion compared to 2025.
-
Onterris continues to expect to convert
60.0% of full-year Consolidated Adjusted EBITDA1 into operating cash flow and generate$30.0 million $40.0 million -
Onterris continues to expect a year-end 2026 leverage ratio of approximately 2.5x, consistent with prior year, which includes the impact of funding of
$13.9 million $30.0 million $15.2 million
Onterris President and Chief Executive Officer, Vijay Manthripragada, commented, “Our third-quarter results demonstrate meaningful progress against our objectives for the year. Compared to prior year, we delivered higher Adjusted EBITDA, record consolidated margins and stronger cash generation despite lower reported revenue due to the normalization of episodic environmental emergency response-related recovery services. Strong growth in core consulting and water treatment services reinforces the underlying demand for our solutions, while improved project execution, favorable business mix and cost discipline are strengthening the profitability of our platform. In addition, we restarted acquisitions, with three small and highly accretive transactions completed during the second half of this year. We expect to continue our acquisition strategy, while maintaining our leverage goals.”
Mr. Manthripragada continued, “Our unique integrated model is increasingly important as clients address more complex environmental requirements. Strong demand from clients is partially why we are now #5 in ENR's global ranking of top environmental firms. Our unique portfolio of solutions continues to resonate in the marketplace. As we look to the future, based on commercial and operational initiatives currently underway, we expect to achieve compound annual growth in revenue and Adjusted EBITDA of ~
Third Quarter 2026 Results
Revenue in the third quarter of 2026 was
Income from operations in the third quarter of 2026 was
Net income in the third quarter of 2026 was
Adjusted Net Income1 and Adj EPS1 in the third quarter of 2026 were
Consolidated Adjusted EBITDA1 in the third quarter of 2026 was
Cash Flow, Liquidity and Capital Resources
Onterris generated
For the nine months ended September 30, 2026, net cash provided by operating activities was
As of September 30, 2026, Onterris reported a leverage ratio under the 2025 Credit Facility of 2.9x, compared with 3.2x at June 30, 2026. Total available liquidity was
Board-led Strategic Review Process
As previously disclosed, on August 5, 2026, Onterris announced a comprehensive Board-led strategic review, which remains ongoing. To date, the Company has engaged with a number of strategic and financial parties. The Company has engaged Evercore and AEC Advisors as financial advisors and Kirkland & Ellis as legal counsel in connection with the review.
The Board has not set a timetable for the conclusion of its process, there can be no assurance that the process will result in any transaction or other outcome, and Onterris does not intend to comment further regarding the process unless and until it determines that further disclosure is appropriate or necessary.
| ___________________________________ |
| 1 Consolidated Adjusted EBITDA, Adjusted Net Income (Loss), Diluted Adjusted Net Income (Loss) per share, and Net Service Revenue are non-GAAP measures. See the appendix to this release for a discussion of these measures, including how they are calculated and the reasons why we believe they provide useful information to investors, and a reconciliation for historical periods to the most directly comparable GAAP measures. |
Webcast and Conference Call
Onterris will host an earnings webcast and conference call on Thursday, November 5, 2026, at 8:30 a.m. Eastern Time. A question-and-answer session will follow the prepared remarks.
A live webcast of the conference call will be available in the Investors section of the Onterris website at ir.onterris.com. To participate in the live call, dial (800) 717-1738 (toll-free in the
About Onterris
Onterris is a global environmental solutions company partnering with organizations to solve complex challenges where environmental pressures, regulatory expectations and operational risks intersect. Guided by our mission to advance the way of life without compromising the integrity of our environment, we believe environmental responsibility and human progress are fundamentally connected. Our scientists, engineers, field teams and consultants apply systems thinking that unites science, data and practical expertise to deliver solutions that strengthen our clients’ resilience, mitigate risk and help protect the air, water and soil that sustain communities, while uncovering responsible paths forward for planet and progress. For more information, visit Onterris.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may be identified by the use of words such as “intend,” “expect”, and “may”, and other similar expressions that predict or indicate future events or that are not statements of historical matters. These forward-looking statements include those regarding Full-Year 2026 Guidance and the benefits of the Board-led strategic review process. Forward-looking statements are based on current information available at the time the statements are made and on management’s reasonable belief or expectations with respect to future events, and are subject to risks and uncertainties, many of which are beyond the Company’s control, that could cause actual performance or results to differ materially from the belief or expectations expressed in or suggested by the forward-looking statements. Factors or events that could cause actual results to differ may also arise from time to time, and the Company cannot predict all of them. These factors and events include (i) general global economic, business and other conditions, including inflationary and interest rate pressures and tariffs and other trade tensions, the cyclical nature of our industry and the significant fluctuations in events that impact our business; (ii) the parts of our business that depend on difficult to predict natural or manmade events and the fluctuations in our revenue and customer concentration as a result thereof; (iii) our ability to adapt to changing technology, industry standards or regulatory requirements, including emerging environmental, social and governance requirements; (iv) the highly competitive nature of our business; (v) significant environmental governmental regulation or de-regulation; (vi) our ability to execute on our acquisition strategy and successfully integrate and realize benefits from our acquisitions; (vii) our ability to maintain and expand our client base; (viii) our ability to attract and retain qualified managerial and skilled technical personnel; (ix) safety-related issues; (x) any failure in or breach of our networks and systems or other forms of cyber-attack; (xi) our ability to promote and develop our new brand; (xii) our ability to maintain necessary accreditations and other authorizations in varying jurisdictions; (xiii) allegations regarding compliance with professional standards, duties and statutory obligations and our ability to provide accurate results; (xiv) the lack of formal long-term agreements with many of our clients; (xv) government clients and contracts; (xvi) our ability to maintain our prices and manage costs; (xvii) our ability to protect our intellectual property or claims that we infringe on the intellectual property rights of others; (xviii) laws and regulations regarding handling of confidential information; (xix) our international operations; (xx) whether the objectives of the strategic review process will be achieved; (xxi) the terms, structure, benefits and costs of any strategic transaction; the timing of any transaction and whether any transaction will be consummated at all; (xxii) the risk that the board review and its announcement could have an adverse effect on our ability to retain and hire key personnel and maintain relationships with partners, suppliers, employees, shareholders and other business relationships and on its operating results and business generally; (xxiii) the risk the board review could divert the attention and time of our management; (xxiv) the risk of any unexpected costs or expenses resulting from the review; and (xxv) the risk of any litigation relating to the review.
Forward-looking statements speak only as of the date on which they are made, and the Company undertakes no obligation to update any forward-looking statement to reflect future events, developments or otherwise, except as may be required by applicable law. Investors are referred to the Company’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2025, as supplemented by its Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, for additional information regarding the risks and uncertainties that may cause actual results to differ materially from those expressed in any forward-looking statement.
ONTERRIS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (In thousands, except per share data) (Unaudited) |
||||||||||||||||
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Revenues |
|
$ |
203,044 |
|
|
$ |
224,888 |
|
|
$ |
558,223 |
|
|
$ |
637,265 |
|
Cost of revenues (exclusive of depreciation and amortization shown below) |
|
|
114,777 |
|
|
|
136,284 |
|
|
|
320,646 |
|
|
|
377,492 |
|
Selling, general and administrative expense |
|
|
63,386 |
|
|
|
65,696 |
|
|
|
187,669 |
|
|
|
205,611 |
|
Fair value changes in business acquisition contingencies |
|
|
— |
|
|
|
13 |
|
|
|
(697 |
) |
|
|
844 |
|
Depreciation and amortization |
|
|
12,599 |
|
|
|
12,958 |
|
|
|
37,932 |
|
|
|
39,015 |
|
Income from operations |
|
|
12,282 |
|
|
|
9,937 |
|
|
|
12,673 |
|
|
|
14,303 |
|
Other income, net |
|
|
4,541 |
|
|
|
10,761 |
|
|
|
6,412 |
|
|
|
19,084 |
|
Interest expense, net |
|
|
(5,564 |
) |
|
|
(5,039 |
) |
|
|
(16,501 |
) |
|
|
(14,872 |
) |
Total other income (expense), net |
|
|
(1,023 |
) |
|
|
5,722 |
|
|
|
(10,089 |
) |
|
|
4,212 |
|
Income before expense from income taxes |
|
|
11,259 |
|
|
|
15,659 |
|
|
|
2,584 |
|
|
|
18,515 |
|
Income tax expense |
|
|
2,273 |
|
|
|
7,281 |
|
|
|
4,922 |
|
|
|
11,140 |
|
Net income (loss) |
|
$ |
8,986 |
|
|
$ |
8,378 |
|
|
$ |
(2,338 |
) |
|
$ |
7,375 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity adjustment from foreign currency translation |
|
|
398 |
|
|
|
(270 |
) |
|
|
(1,496 |
) |
|
|
(1,881 |
) |
Comprehensive income (loss) |
|
|
9,384 |
|
|
|
8,108 |
|
|
|
(3,834 |
) |
|
|
5,494 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
|
35,132 |
|
|
|
35,300 |
|
|
|
35,661 |
|
|
|
35,003 |
|
Diluted |
|
|
38,033 |
|
|
|
39,935 |
|
|
|
35,661 |
|
|
|
39,547 |
|
Net income (loss) per share attributable to common stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
0.26 |
|
|
$ |
0.24 |
|
|
$ |
(0.07 |
) |
|
$ |
0.09 |
|
Diluted |
|
$ |
0.24 |
|
|
$ |
0.21 |
|
|
$ |
(0.07 |
) |
|
$ |
0.08 |
|
Net income (loss) attributable to common stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) |
|
$ |
8,986 |
|
|
$ |
8,378 |
|
|
$ |
(2,338 |
) |
|
$ |
7,375 |
|
Convertible and redeemable series A-2 preferred stock dividend |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(4,150 |
) |
Net income (loss) attributable to common stockholders |
|
$ |
8,986 |
|
|
$ |
8,378 |
|
|
$ |
(2,338 |
) |
|
$ |
3,225 |
|
ONTERRIS, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (In thousands, except share data) (Unaudited) |
||||||||
|
|
|
|
|
|
|
||
|
|
September 30,
|
|
|
December 31,
|
|
||
Assets |
|
|
|
|
|
|
||
Current assets |
|
|
|
|
|
|
||
Cash, cash equivalents and restricted cash |
|
$ |
20,109 |
|
|
$ |
11,223 |
|
Accounts receivable, net |
|
|
129,159 |
|
|
|
155,380 |
|
Contract assets |
|
|
69,951 |
|
|
|
58,831 |
|
Prepaid and other current assets |
|
|
22,170 |
|
|
|
14,959 |
|
Total current assets |
|
|
241,389 |
|
|
|
240,393 |
|
Non-current assets |
|
|
|
|
|
|
||
Property and equipment, net |
|
|
65,489 |
|
|
|
63,853 |
|
Operating lease right-of-use asset, net |
|
|
34,407 |
|
|
|
36,560 |
|
Finance lease right-of-use asset, net |
|
|
36,054 |
|
|
|
37,595 |
|
Goodwill |
|
|
466,196 |
|
|
|
466,786 |
|
Other intangible assets, net |
|
|
112,696 |
|
|
|
126,383 |
|
Other assets |
|
|
9,441 |
|
|
|
9,726 |
|
Total assets |
|
$ |
965,672 |
|
|
$ |
981,296 |
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
||
Current liabilities |
|
|
|
|
|
|
||
Accounts payable and other accrued liabilities |
|
$ |
57,798 |
|
|
$ |
71,778 |
|
Accrued payroll and benefits |
|
|
35,268 |
|
|
|
52,773 |
|
Business acquisitions contingent consideration, current |
|
|
6,182 |
|
|
|
14,883 |
|
Current portion of operating lease liabilities |
|
|
10,959 |
|
|
|
10,735 |
|
Current portion of finance lease liabilities |
|
|
6,825 |
|
|
|
6,602 |
|
Current portion of long-term debt |
|
|
11,295 |
|
|
|
11,230 |
|
Total current liabilities |
|
|
128,327 |
|
|
|
168,001 |
|
Non-current liabilities |
|
|
|
|
|
|
||
Business acquisitions contingent consideration, long-term |
|
|
— |
|
|
|
2,755 |
|
Other non-current liabilities |
|
|
6,014 |
|
|
|
7,088 |
|
Deferred tax liabilities, net |
|
|
21,893 |
|
|
|
21,817 |
|
Operating lease liability, net of current portion |
|
|
25,974 |
|
|
|
28,215 |
|
Finance lease liability, net of current portion |
|
|
22,985 |
|
|
|
25,180 |
|
Long-term debt, net of deferred financing fees |
|
|
311,023 |
|
|
|
277,065 |
|
Total liabilities |
|
$ |
516,216 |
|
|
$ |
530,121 |
|
Commitments and contingencies |
|
|
|
|
|
|
||
Stockholders’ equity: |
|
|
|
|
|
|
||
Common stock, |
|
|
— |
|
|
|
— |
|
Additional paid-in-capital |
|
|
760,029 |
|
|
|
727,927 |
|
Accumulated deficit |
|
|
(275,851 |
) |
|
|
(273,513 |
) |
Accumulated other comprehensive loss |
|
|
(4,735 |
) |
|
|
(3,239 |
) |
Treasury stock, at cost; 1,627,763 and 0 shares at September 30, 2026 and December 31, 2025, respectively |
|
|
(29,987 |
) |
|
|
— |
|
Total stockholders’ equity |
|
|
449,456 |
|
|
|
451,175 |
|
Total liabilities and Stockholders’ Equity |
|
$ |
965,672 |
|
|
$ |
981,296 |
|
ONTERRIS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) |
||||||||
|
|
For the Nine Months Ended
|
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Operating activities: |
|
|
|
|
|
|
||
Net income (loss) |
|
$ |
(2,338 |
) |
|
$ |
7,375 |
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
||
Provision (recovery) for credit loss |
|
|
(1,231 |
) |
|
|
7,038 |
|
Depreciation and amortization |
|
|
37,932 |
|
|
|
39,015 |
|
Non-cash leases expense |
|
|
8,590 |
|
|
|
8,894 |
|
Stock-based compensation expense |
|
|
28,424 |
|
|
|
33,777 |
|
Fair value changes in financial instruments |
|
|
(2,525 |
) |
|
|
(18,394 |
) |
Write off of deferred financing costs |
|
|
— |
|
|
|
913 |
|
Deferred income taxes |
|
|
76 |
|
|
|
(2,266 |
) |
Other operating activities, net |
|
|
(1,345 |
) |
|
|
948 |
|
Changes in operating assets and liabilities, net of acquisitions: |
|
|
|
|
|
|
||
Accounts receivable and contract assets |
|
|
16,194 |
|
|
|
(28,755 |
) |
Prepaid expenses and other current assets |
|
|
(2,684 |
) |
|
|
(2,823 |
) |
Income taxes |
|
|
(2,470 |
) |
|
|
— |
|
Accounts payable and other accrued liabilities |
|
|
(13,897 |
) |
|
|
6,094 |
|
Accrued payroll and benefits |
|
|
(17,505 |
) |
|
|
12,051 |
|
Change in operating leases |
|
|
(8,531 |
) |
|
|
(8,871 |
) |
Other assets |
|
|
423 |
|
|
|
552 |
|
Gain on insurance recovery |
|
|
(3,700 |
) |
|
|
— |
|
Net cash provided by operating activities |
|
$ |
35,413 |
|
|
$ |
55,548 |
|
Investing activities: |
|
|
|
|
|
|
||
Purchases of property and equipment |
|
|
(12,203 |
) |
|
|
(10,934 |
) |
Proceeds from the sale of property and equipment |
|
|
254 |
|
|
|
89 |
|
Proprietary software development and other software costs |
|
|
(2,254 |
) |
|
|
(1,759 |
) |
Acquisition of assets |
|
|
(5,103 |
) |
|
|
— |
|
Proceeds from insurance settlement related to business combination |
|
|
3,700 |
|
|
|
— |
|
Net cash used in investing activities |
|
$ |
(15,606 |
) |
|
$ |
(12,604 |
) |
Financing activities: |
|
|
|
|
|
|
||
Proceeds from revolving line of credit |
|
|
320,093 |
|
|
|
386,397 |
|
Repayment of the revolving line of credit |
|
|
(276,760 |
) |
|
|
(305,518 |
) |
Repayment of aircraft loan |
|
|
(915 |
) |
|
|
(853 |
) |
Proceeds from term loan |
|
|
— |
|
|
|
200,000 |
|
Repayment of term loan |
|
|
(7,500 |
) |
|
|
(189,218 |
) |
Payment of contingent consideration and other purchase price true ups |
|
|
(10,759 |
) |
|
|
(5,458 |
) |
Repayment of finance leases |
|
|
(8,430 |
) |
|
|
(8,923 |
) |
Payments of deferred financing costs |
|
|
— |
|
|
|
(2,189 |
) |
Proceeds from issuance of common stock for exercised stock options |
|
|
3,678 |
|
|
|
405 |
|
Proceeds from building sale leaseback |
|
|
— |
|
|
|
2,500 |
|
Dividend payment to the series A-2 stockholders |
|
|
— |
|
|
|
(4,150 |
) |
Redemption of series A-2 preferred stock |
|
|
— |
|
|
|
(122,235 |
) |
Repurchases of common stock |
|
|
(29,987 |
) |
|
|
— |
|
Net cash used in financing activities |
|
$ |
(10,580 |
) |
|
$ |
(49,242 |
) |
Change in cash, cash equivalents and restricted cash |
|
|
9,227 |
|
|
|
(6,298 |
) |
Foreign exchange impact on cash balance |
|
|
(341 |
) |
|
|
99 |
|
Cash, cash equivalents and restricted cash: |
|
|
|
|
|
|
||
Beginning of year |
|
|
11,223 |
|
|
|
12,935 |
|
End of period |
|
$ |
20,109 |
|
|
$ |
6,736 |
|
SEGMENT REVENUES AND ADJUSTED EBITDA (In thousands) (Unaudited) |
|||||||||||||||||
|
|
Three Months Ended September 30, |
|||||||||||||||
|
|
2026 |
|
|
2025 |
|
|
||||||||||
|
|
Segment
|
|
|
Segment
|
|
|
Segment
|
|
|
Segment
|
|
|
||||
Consulting and Treatment |
|
$ |
141,984 |
|
|
$ |
30,837 |
|
|
$ |
161,930 |
|
|
$ |
29,848 |
|
|
Measurement and Analysis |
|
|
61,060 |
|
|
|
15,961 |
|
|
|
62,958 |
|
|
|
17,283 |
|
|
Total Reportable Segments |
|
$ |
203,044 |
|
|
$ |
46,798 |
|
|
$ |
224,888 |
|
|
$ |
47,131 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Nine Months Ended September 30, |
|||||||||||||||
|
|
2026 |
2025 |
|
|
||||||||||||
|
|
Segment
|
|
|
Segment
|
|
|
Segment
|
|
|
Segment
|
|
|
||||
Consulting and Treatment |
|
$ |
382,168 |
|
|
$ |
78,855 |
|
|
$ |
452,482 |
|
|
$ |
83,932 |
|
|
Measurement and Analysis |
|
|
176,055 |
|
|
|
41,875 |
|
|
|
184,783 |
|
|
|
49,354 |
|
|
Total Reportable Segments |
|
$ |
558,223 |
|
|
$ |
120,730 |
|
|
$ |
637,265 |
|
|
$ |
133,286 |
|
|
| _____________________________________ | ||
(1) |
To evaluate 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. | |
Non-GAAP Financial Information
In addition to our results under GAAP, in this release we also present certain other supplemental financial measures of financial performance that are not required by, or presented in accordance with, GAAP, including Consolidated Adjusted EBITDA, Adjusted Net Income and Basic and Diluted Adj EPS. We calculate Consolidated Adjusted EBITDA as net income (loss) before interest expense, income tax expense (benefit) and depreciation and amortization, adjusted for the impact of certain other items, including stock-based compensation expense and acquisition-related costs, as set forth in greater detail in the table below. We calculate Adjusted Net Income as net income (loss) before amortization of intangible assets, stock-based compensation expense, fair value changes to financial instruments and contingent earnouts, discontinued specialty lab, and other gains or losses, as set forth in greater detail in the table below. Basic Adj EPS represents Adjusted Net Income attributable to stockholders divided by the weighted average number of shares of common stock outstanding during the applicable period. Diluted Adj EPS represents Adjusted Net Income attributable to stockholders divided by the fully diluted number of shares of common stock outstanding during the applicable period. Net Service Revenue represents revenue from our labor services and is calculated as revenue less subconsultants and non-labor direct costs.
Consolidated Adjusted EBITDA is one of the primary metrics used by management to evaluate our financial performance and compare it to that of our peers, evaluate the effectiveness of our business strategies, make budgeting and capital allocation decisions and in connection with our executive incentive compensation. Adjusted Net Income and Basic and Diluted Adj EPS are useful metrics to evaluate ongoing business performance after interest and tax. These measures are also frequently used by analysts, investors and other interested parties to evaluate companies in our industry. Further, we believe they are helpful in highlighting trends in our operating results because they allow for more consistent comparisons of financial performance between periods by excluding gains and losses that are non-operational in nature or outside the control of management, and, in the case of Consolidated Adjusted EBITDA, by excluding items that may differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate and capital investments.
These non-GAAP measures do, however, have certain limitations and should not be considered as an alternative to net income (loss), earnings (loss) per share or any other performance measure derived in accordance with GAAP. Our presentation of Consolidated Adjusted EBITDA, Adjusted Net Income and Basic and Diluted Adj EPS should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items for which we may make adjustments. In addition, Consolidated Adjusted EBITDA, Adjusted Net Income and Basic and Diluted Adj EPS may not be comparable to similarly titled measures used by other companies in our industry or across different industries, and other companies may not present these or similar measures. Management compensates for these limitations by using these measures as supplemental financial metrics and in conjunction with our results prepared in accordance with GAAP. We encourage investors and others to review our financial information in its entirety, not to rely on any single measure and to view Consolidated Adjusted EBITDA, Adjusted Net Income and Basic and Diluted Adj EPS in conjunction with the related GAAP measures.
Additionally, we have provided estimates regarding Consolidated Adjusted EBITDA for 2026. These projections account for estimates of revenue, operating margins and corporate and other costs. However, we cannot reconcile our projection of Consolidated Adjusted EBITDA to net income (loss), the most directly comparable GAAP measure, without unreasonable efforts because of the unpredictable or unknown nature of certain significant items excluded from Consolidated Adjusted EBITDA and the resulting difficulty in quantifying the amounts thereof that are necessary to estimate net income (loss). Specifically, we are unable to estimate for the future impact of certain items, including income tax (expense) benefit, stock-based compensation expense, and fair value changes. We expect the variability of these items could have a significant impact on our reported GAAP financial results.
In this release we also reference our 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
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.
Onterris, Inc. Reconciliation of Net Income (Loss) to Adjusted Net Income (In thousands, except per share data) (Unaudited) |
||||||||||||||||
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Net income (loss) |
|
$ |
8,986 |
|
|
$ |
8,378 |
|
|
$ |
(2,338 |
) |
|
$ |
7,375 |
|
Amortization of intangible assets |
|
|
6,331 |
|
|
|
7,275 |
|
|
|
19,667 |
|
|
|
22,991 |
|
Stock-based compensation(1) |
|
|
9,733 |
|
|
|
9,220 |
|
|
|
28,424 |
|
|
|
33,777 |
|
Acquisition costs(2) |
|
|
151 |
|
|
|
754 |
|
|
|
369 |
|
|
|
1,790 |
|
Fair value changes in financial instruments(3) |
|
|
(1,031 |
) |
|
|
(10,354 |
) |
|
|
(2,273 |
) |
|
|
(18,394 |
) |
Fair value changes in business acquisition contingencies(4) |
|
|
— |
|
|
|
13 |
|
|
|
(697 |
) |
|
|
844 |
|
Rebranding expenses |
|
|
587 |
|
|
|
— |
|
|
|
3,110 |
|
|
|
— |
|
Proceeds from insurance settlement related to business combination(5) |
|
|
(3,700 |
) |
|
|
— |
|
|
|
(3,700 |
) |
|
|
— |
|
Other losses and expenses(6) |
|
|
741 |
|
|
|
372 |
|
|
|
3,356 |
|
|
|
1,857 |
|
Tax effect of adjustments(7) |
|
|
(456 |
) |
|
|
(1,446 |
) |
|
|
(12,749 |
) |
|
|
(5,255 |
) |
Adjusted Net Income |
|
$ |
21,342 |
|
|
$ |
14,212 |
|
|
$ |
33,169 |
|
|
$ |
44,985 |
|
Preferred dividends Series A-2 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(4,150 |
) |
Adjusted Net Income attributable to stockholders |
|
$ |
21,342 |
|
|
$ |
14,212 |
|
|
$ |
33,169 |
|
|
$ |
40,835 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net Income (Loss) per share attributable to stockholders |
|
$ |
0.26 |
|
|
$ |
0.24 |
|
|
$ |
(0.07 |
) |
|
$ |
0.09 |
|
Basic Adjusted Net Income per share(8) |
|
$ |
0.61 |
|
|
$ |
0.40 |
|
|
$ |
0.93 |
|
|
$ |
1.17 |
|
Diluted Adjusted Net Income per share(9) |
|
$ |
0.56 |
|
|
$ |
0.36 |
|
|
$ |
0.86 |
|
|
$ |
1.03 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares outstanding |
|
|
35,132 |
|
|
|
35,300 |
|
|
|
35,661 |
|
|
|
35,003 |
|
Fully diluted shares |
|
|
38,033 |
|
|
|
39,935 |
|
|
|
38,673 |
|
|
|
39,547 |
|
| ____________________________ | ||
(1) |
Represents non-cash stock-based compensation expenses related to option awards issued to employees and restricted stock grants issued to directors and selected employees. | |
(2) |
Includes financial and tax diligence, consulting, legal, valuation, accounting and travel costs and acquisition-related incentives related to our acquisition activity, including direct costs of integration. | |
(3) |
Amounts for the three and nine months ended September 30, 2026 relate to the change in fair value of the interest rate swap instruments. Amounts for the three and nine months ended September 30, 2025 relate to the change in fair value of the interest rate swap instruments and the embedded derivative attached to the Series A-2 preferred stock. | |
(4) |
Amounts reflect the difference between the expected settlement value of acquisition related earn-out payments at the beginning of the relevant period and the expected (or actual) value of earn-outs at the end of the relevant period. | |
(5) |
Proceeds from a representations and warranties insurance settlement related to a previously completed acquisition. | |
(6) |
Amount for the three months ended September 30, 2026 consists primarily of third-party costs associated with a global IT migration and expenses associated with the Board-led strategic review. Amount for the nine months ended September 30, 2026 consists primarily of severance costs related to organizational restructuring of business lines within the Company's former Assessment, Permitting and Response and Remediation and Reuse segments, third-party costs associated with a global IT migration, and expenses associated with the Board-led strategic review. Amount for the three months ended September 30, 2025 consists primarily of severance costs. Amount for the nine months ended September 30, 2025 consists primarily of the aforementioned severance costs, non-recurring costs incurred to restructure the Company's renewable energy business, third-party expenses associated with the independent review and analysis of assertions in a short seller report regarding the Company, and costs to centralize certain back-office functions. | |
(7) |
The Company applied the estimated effective tax rate on portions of the adjustments related to our significant foreign entities, and determined the US portion of the adjustments do not have any tax impact since we are in a full deferred tax asset valuation allowance as of September 30, 2026. | |
(8) |
Represents Adjusted Net Income attributable to stockholders divided by the weighted average number of shares of common stock outstanding. | |
(9) |
Represents Adjusted Net Income attributable to stockholders divided by fully diluted number of shares of common stock. | |
Onterris, Inc. Reconciliation of Net Income (Loss) to Consolidated Adjusted EBITDA (In thousands) (Unaudited) |
||||||||||||||||
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Net income (loss) |
|
$ |
8,986 |
|
|
$ |
8,378 |
|
|
$ |
(2,338 |
) |
|
$ |
7,375 |
|
Interest expense |
|
|
5,564 |
|
|
|
5,039 |
|
|
|
16,501 |
|
|
|
14,872 |
|
Income tax expense |
|
|
2,273 |
|
|
|
7,281 |
|
|
|
4,922 |
|
|
|
11,140 |
|
Depreciation and amortization |
|
|
12,599 |
|
|
|
12,958 |
|
|
|
37,932 |
|
|
|
39,015 |
|
EBITDA |
|
$ |
29,422 |
|
|
$ |
33,656 |
|
|
$ |
57,017 |
|
|
$ |
72,402 |
|
Stock-based compensation(1) |
|
|
9,733 |
|
|
|
9,220 |
|
|
|
28,424 |
|
|
|
33,777 |
|
Acquisition costs(2) |
|
|
151 |
|
|
|
754 |
|
|
|
369 |
|
|
|
1,790 |
|
Fair value changes in financial instruments(3) |
|
|
(1,031 |
) |
|
|
(10,354 |
) |
|
|
(2,273 |
) |
|
|
(18,394 |
) |
Fair value changes in business acquisition contingencies(4) |
|
|
— |
|
|
|
13 |
|
|
|
(697 |
) |
|
|
844 |
|
Rebranding expenses |
|
|
587 |
|
|
|
— |
|
|
|
3,110 |
|
|
|
— |
|
Proceeds from insurance settlement related to business combination(5) |
|
|
(3,700 |
) |
|
|
— |
|
|
|
(3,700 |
) |
|
|
— |
|
Other losses and expenses(6) |
|
|
741 |
|
|
|
372 |
|
|
|
3,356 |
|
|
|
1,857 |
|
Consolidated Adjusted EBITDA |
|
$ |
35,903 |
|
|
$ |
33,661 |
|
|
$ |
85,606 |
|
|
$ |
92,276 |
|
| ____________________________ | ||
(1) |
Represents non-cash stock-based compensation expenses related to option awards issued to employees and restricted stock grants issued to directors and selected employees. | |
(2) |
Includes financial and tax diligence, consulting, legal, valuation, accounting and travel costs and acquisition-related incentives related to our acquisition activity, including direct costs of integration. | |
(3) |
Amounts for the three and nine months ended September 30, 2026 relate to the change in fair value of the interest rate swap instruments. Amounts for the three and nine months ended September 30, 2025 relate to the change in fair value of the interest rate swap instruments and the embedded derivative attached to the Series A-2 preferred stock. | |
(4) |
Reflects the difference between the expected settlement value of acquisition related earn-out payments at the beginning of the relevant period and the expected (or actual) value of earn-outs at the end of the relevant period. | |
(5) |
Proceeds from a representations and warranties insurance settlement related to a previously completed acquisition. | |
(6) |
Amount for the three months ended September 30, 2026 consists primarily of third-party costs associated with a global IT migration and expenses associated with the Board-led strategic review. Amount for the nine months ended September 30, 2026 consists primarily of severance costs related to organizational restructuring of business lines within the Company's former Assessment, Permitting and Response and Remediation and Reuse segments, third-party costs associated with a global IT migration, and expenses associated with the Board-led strategic review. Amount for the three months ended September 30, 2025 consists primarily of severance costs. Amount for the nine months ended September 30, 2025 consists primarily of the aforementioned severance costs, non-recurring costs incurred to restructure the Company's renewable energy business, third-party expenses associated with the independent review and analysis of assertions in a short seller report regarding the Company, and costs to centralize certain back-office functions. | |
Onterris, Inc. Reconciliation of Revenue to Net Service Revenue (In thousands) (Unaudited) |
||||||||||||||||
|
|
For the Three Months Ended
|
|
|
For the Nine Months Ended
|
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Revenue |
|
$ |
203,044 |
|
|
$ |
224,888 |
|
|
$ |
558,223 |
|
|
$ |
637,265 |
|
Subconsultants and non-labor direct costs, including intercompany |
|
|
(46,307 |
) |
|
|
(67,247 |
) |
|
|
(113,114 |
) |
|
|
(168,851 |
) |
Intercompany portion of subconsultants and non-labor direct costs |
|
|
5,762 |
|
|
|
2,842 |
|
|
|
12,642 |
|
|
|
9,530 |
|
Net Service Revenue |
|
$ |
162,499 |
|
|
$ |
160,483 |
|
|
$ |
457,751 |
|
|
$ |
477,944 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20261104779624/en/
Investor Relations
Adrianne D. Griffin
Senior Vice President, Investor Relations & Treasury
(949) 988-3383
ir@onterris.com
Media Relations
Lauren Dowling
Senior Vice President, Marketing & Communications
(214) 514-9809
pr@onterris.com
Source: Onterris, Inc.