Environmental services provider Onterris (NYSE: ONT) fell short of the market’s revenue expectations in Q2 CY2026, with sales falling 20.4% year on year to $186.7 million. The company’s full-year revenue guidance of $765 million at the midpoint came in 10.9% below analysts’ estimates. Its non-GAAP profit of $0.51 per share was 33.2% above analysts’ consensus estimates.
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Onterris (ONT) Q2 CY2026 Highlights:
- Revenue: $186.7 million vs analyst estimates of $199.3 million (20.4% year-on-year decline, 6.3% miss)
- Adjusted EPS: $0.51 vs analyst estimates of $0.38 (33.2% beat)
- Adjusted EBITDA: $31.88 million vs analyst estimates of $32.45 million (17.1% margin, 1.8% miss)
- EBITDA guidance for the full year is $118.5 million at the midpoint, below analyst estimates of $126.1 million
- Operating Margin: 3.5%, down from 6.7% in the same quarter last year
- Free Cash Flow Margin: 0.3%, down from 8.5% in the same quarter last year
- Market Capitalization: $825.8 million
Company Overview
Founded to protect a tree-lined two-lane road, Onterris (NYSE: ONT) provides air quality monitoring, environmental laboratory testing, compliance, and environmental consulting services.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years. Luckily, Onterris’s sales grew at an impressive 10.8% compounded annual growth rate over the last five years. Its growth surpassed the average industrials company and shows its offerings resonate with customers, a great starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Onterris’s annualized revenue growth of 8.1% over the last two years is below its five-year trend, but we still think the results were respectable. 
This quarter, Onterris missed Wall Street’s estimates and reported a rather uninspiring 20.4% year-on-year revenue decline, generating $186.7 million of revenue.
Looking ahead, sell-side analysts expect revenue to grow 14.6% over the next 12 months, an improvement versus the last two years. This projection is healthy and implies its newer products and services will catalyze better top-line performance.
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Operating Margin
Although Onterris was profitable this quarter from an operational perspective, it’s generally struggled over a longer time period. Its expensive cost structure has contributed to an average operating margin of negative 1.7% over the last five years. Unprofitable industrials companies require extra attention because they could get caught swimming naked when the tide goes out.
On the plus side, Onterris’s operating margin rose by 2.5 percentage points over the last five years, as its sales growth gave it operating leverage. Still, it will take much more for the company to show consistent profitability.
This quarter, Onterris generated an operating margin profit margin of 3.5%, down 3.2 percentage points year on year. Since Onterris’s operating margin decreased more than its gross margin, we can assume it was less efficient because expenses such as marketing, R&D, and administrative overhead increased.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Onterris’s full-year EPS flipped from negative to positive over the last five years. This is a good sign and shows it’s at an inflection point.
Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.
Onterris’s EPS grew at an astounding 31.9% compounded annual growth rate over the last two years, higher than its 8.1% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
Diving into Onterris’s quality of earnings can give us a better understanding of its performance. While we mentioned earlier that Onterris’s operating margin declined this quarter, a two-year view shows its margin has expanded. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.
In Q2, Onterris reported adjusted EPS of $0.51, down from $0.63 in the same quarter last year. Despite falling year on year, this print easily cleared analysts’ estimates. Over the next 12 months, Wall Street expects Onterris’s full-year EPS to grow 25% from $1.34 to $1.67.
Key Takeaways from Onterris’s Q2 Results
It was good to see Onterris beat analysts’ EPS expectations this quarter. On the other hand, its full-year revenue guidance missed and its full-year EBITDA guidance fell short of Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 17.5% to $18.73 immediately following the results.
The latest quarter from Onterris’s wasn’t that good. One earnings report doesn’t define a company’s quality, though, so let’s explore whether the stock is a buy at the current price. What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).
