The company posted a loss of $5.7 million, or 33 cents per share, compared to a profit of $2.2 million in the same quarter a year ago. It attributed the year-over-year change primarily to higher stock-based compensation expenses.
Total revenue in the period was $130.3 million, down from $132.6 million a year ago.
The results missed Wall Street expectations. The average estimate of five analysts surveyed by Zacks Investment Research was for a loss of 20 cents per share.
Montrose, which aims to help its business clients understand, measure and manage their environmental footprint or risk, said revenue decreased on lower demand for COVID-related services. The decline was partially offset by stronger demand in the firm's water treatment, renewable energy and greenhouse gas measurement businesses, along with growth in the its measurement and analysis and remediation and reuse segments.
CEO Vijay Manthripragada stressed that Montrose is "not a quarterly business."
"Given the nature of our projects, there is often variance in any given quarter, but on an annual basis our outlook remains unchanged," he said in a statement. "Demand for our services has never been as strong and our conviction in organic growth opportunities has deepened."
Manthripragada also noted that the company has limited exposure to a higher interest rate environment, which adds to optimism about the trajectory of the business "this year and into the foreseeable future."
Montrose acquired two companies in the quarter. In September, it purchased AirKinetics Inc., a small emissions testing services provider in the western U.S. AirKinetics is part of the company’s measurement and analysis segment.
In August, Montrose acquired TriAD Environmental Consultants, a small environmental consulting firm with a focus on the southeast U.S. TriAD is part of the company’s remediation and reuse segment.
Montrose didn't disclose the cost of the transactions, but it reported $21.3 million in cash paid for acquisitions through the first three quarters of 2022.
Montrose entered Arkansas in 2020 with the purchase of privately held CTEH of North Little Rock, a scientific consulting firm specializing in emergency preparedness, response and recovery, then moved its headquarters there in 2021.
Shares of the company were down 6% Wednesday morning. For the year to date, shares were down 46%.