Stockholder's Equity (Tables)

6 Months Ended

Jun. 30, 2023

Summary of Issued Shares of Common Stock

The Company issued the following shares of common stock:

	Three Months Ended June 30,
	2023						2022
	Shares		Average Price per Share		Total		Shares		Average Price per Share		Total
Acquisitions		86,577	$	30.01	$	2,598		—	$	—	$	—
Exercise of options		43,538		13.89		605		3,575		15.15		54
Total		130,115	$	24.61	$	3,203		3,575	$	15.15	$	54
	Six Months Ended June 30,
	2023						2022
	Shares		Average Price per Share		Total		Shares		Average Price per Share		Total
Acquisitions		86,577	$	30.01	$	2,598		—	$	—	$	—
Exercise of options		167,993		19.61		3,295		34,182		14.15		483
Restricted shares, net (1)		90,116		66.30		—		25,289		66.58		—
Total		344,686	$	34.43	$	5,893		59,471	$	36.44	$	483

(1) Represents the non-cash release of common shares due to the vesting of restricted stock.

Schedule of Share Authorized to be Issue and Available for Grant

The following number of shares were authorized to be issued and available for grant:

	June 30, 2023
	2017 Plan		2013 Plan		Total
Shares authorized to be issued		6,330,588		2,036,344		8,366,932
Shares available for grant(1)		750,326		—		750,326
	June 30, 2022
	2017 Plan		2013 Plan		Total
Shares authorized to be issued		8,139,987		2,037,144		10,177,131
Shares available for grant(1)		445,244		—		445,244

(1) In January 2023 and January 2022 the Board of Directors ratified the addition of 1,189,801 and 1,185,112 shares of common stock, respectively, to the number of shares available for issuance under the 2017 Plan pursuant to the annual increase provision of such plan. Unless the Board of Directors determines otherwise, additional annual increases will be effective on each January 1, through January 1, 2027. The 2017 Plan permits the company to settle awards, if and when vested, in cash at its discretion. Pursuant to the terms of the 2017 Plan, the number of shares authorized for issuance thereunder will only be reduced with respect to shares of common stock actually issued upon exercise or settlement of an award. Shares of common stock subject to awards that have been canceled, expired, forfeited or otherwise not issued under an award and shares of common stock subject to awards settled in cash do not count as shares of common stock issued under the 2017 Plan. Shares available for grant exclude awards of stock appreciation rights approved in December 2021 that are subject to vesting based on the achievement of certain market conditions, which have not yet been, and may not be, achieved. See footnote 1 to the table in Common Stock Reserved for Future Issuance below for additional information on stock appreciation rights.

Schedule of Stock-based Compensation Expense

Total stock-based compensation expense for the Plans was as follows:

	Three Months Ended June 30,
	2023										2022
	2017 plan						2013 plan				2017 plan						2013 plan
	Options		Restricted Stock		SARs		Options		Total		Options		Restricted Stock		SARs		Options		Total
Cost of revenue	$	466	$	243	$	—	$	—	$	709	$	371	$	—	$	—	$	—	$	371
Selling, general and    administrative expense		1,070		7,021		2,290		—		10,381		2,254		6,017		2,290		—		10,561
Total	$	1,536	$	7,264	$	2,290	$	—	$	11,090	$	2,625	$	6,017	$	2,290	$	—	$	10,932
	Six Months Ended June 30,
	2023										2022
	2017 plan						2013 plan				2017 plan						2013 plan
	Options		Restricted Stock		SARs		Options		Total		Options		Restricted Stock		SARs		Options		Total
Cost of revenue	$	815	$	786	$	—	$	—	$	1,601	$	665	$	—	$	—	$	—	$	665
Selling, general and    administrative expense		2,794		15,175		4,555		—		22,524		4,233		11,809		4,650		—		20,692
Total	$	3,609	$	15,961	$	4,555	$	—	$	24,125	$	4,898	$	11,809	$	4,650	$	—	$	21,357

Summary of Performance Hurdles

The performance hurdles are as follows:

SARs Stock Price Performance Hurdle		Portion of SARs Subject to Performance Hurdle
$	133.58	1/3
$	166.98	1/3
$	200.37	1/3

Summary of Weighted Average Assumptions Used in Black-Sholes Option-pricing Model

The following weighted-average assumptions were used in the Black-Sholes option-pricing model calculation:

	June 30,			June 30,
	2023			2022
Common stock value (per share)	$	32.16		$	44.01
Expected volatility		33.79	%		33.45	%
Risk-free interest rate		3.72	%		1.78	%
Expected life (years)		7.00			6.35
Forfeiture rate	None			None
Dividend rate	None			None

Schedule of Common Stock Reserved for Future Issuance

The Company has reserved certain stock of its authorized but unissued common stock for possible future issuance in connection with the following:

	June 30,
	2023		2022
Montrose 2013 Stock Incentive Plan		812,256		877,689
Montrose 2017 Stock Incentive Plan(1)		8,699,655		7,769,931
Total		9,511,911		8,647,620

(1) In January 2023 and 2022, the Board of Directors ratified the addition of 1,189,801 and 1,185,112 shares of common stock, respectively, to the number of shares available for issuance under the 2017 Plan pursuant to the annual increase provision of such plan. Unless the Board of Directors determines otherwise, additional annual increases will be effective on each January 1, through January 1, 2027. The 2017 Plan permits the company to settle awards, if and when vested, in cash at its discretion. Pursuant to the terms of the 2017 Plan, the number of shares authorized for issuance thereunder will only be reduced with respect to shares of common stock actually issued upon exercise or settlement of an award. Shares of common stock subject to awards that have been canceled, expired, forfeited or otherwise not issued under an award and shares of common stock subject to awards settled in cash do not count as shares of common stock issued under the 2017 Plan. The Company expects to have sufficient shares available under the 2017 Plan to satisfy the future settlement of outstanding awards. Shares reserved for future issuance include 3,000,000 shares underlying the 3,000,000 performance SARs granted in December 2021 that are subject to vesting based on the achievement of certain market conditions. Assuming achievement at the highest price performance hurdle, approximately 2,000,000 shares of common stock would be issued upon vesting of these performance SARs. To date, none of the market conditions have been achieved.

Montrose Amended & Restated 2017 Stock Incentive Plan

Schedule of Restricted Stock Activity

RSAs and RSUs activity was as follows:

	Three Months Ended June 30,
	2023							2022
	Shares			Average Price per Share		Fair Value (in thousands)		Shares		Average Price per Share		Fair Value (in thousands)
Awards granted		177,096		$	37.27	$	6,600		—	$	—	$	—
Awards forfeited		(3,559	)		32.16		114		—		—		—
	Six Months Ended June 30,
	2023							2022
	Shares			Average Price per Share		Fair Value		Shares		Average Price per Share		Fair Value
Awards granted		641,282		$	33.90	$	21,740		106,324	$	46.82	$	4,978
Awards forfeited		(3,559	)		32.16		114		—		—		—
Awards vested		90,116			36.81		3,317		25,289		30.98		783

Summary of Stock Option Activity

The following summarizes the options activity of the 2017 Plan:

	Options to Purchase Common Stock			Weighted- Average Exercise Price per Share		Weighted Average Grant Date Fair Value per Share		Weighted Average Remaining Contract Life (in Years)		Aggregate Intrinsic Value of In-The- Money Options (in Thousands)
Outstanding as of January 1, 2022		2,036,729		$	26	$	14		8.30	$	91,030
Granted		563,084			44		16		—		—
Forfeited/ cancelled		(38,887	)		35		—		—		—
Exercised		(14,197	)		25		—		—		393
Outstanding as of June 30, 2022		2,546,729			30		15		8.22		19,199
Outstanding as of January 1, 2023		2,579,566		$	31	$	15		7.76	$	37,292
Granted		233,955			32		14		—		—
Forfeited/ cancelled		(63,085	)		37		—		—		—
Expired		(1,200	)		25		—		—		—
Exercised		(125,229	)		24		—		—		2,794
Outstanding as of June 30, 2023		2,624,007		$	31	$	16		7.46	$	32,414
Exercisable at June 30, 2023		1,365,861			29		—		6.76		18,892

Montrose Amended and Restated 2013 Stock Option Plan

Summary of Stock Option Activity

The following summarizes the activity of the 2013 Plan:

	Options to Purchase Common Stock			Weighted- Average Exercise Price per Share		Weighted Average Grant Date Fair Value per Share		Weighted Average Remaining Contract Life (in Years)		Aggregate Intrinsic Value of In-The- Money Options (in Thousands)
Outstanding as of January 1, 2022		897,674		$	6	$	2		4.37	$	57,529
Exercised		(19,985	)		6		—		—		859
Outstanding as of June 30, 2022		877,689			6		2		3.88		23,991
Outstanding as of January 1, 2023		855,695		$	6	$	2		3.31	$	32,478
Expired		(675	)		6		—		—		—
Exercised		(42,764	)		7		—		—		1,514
Outstanding as of June 30, 2023		812,256		$	6	$	2		2.83	$	29,030
Exercisable at June 30, 2023		812,256			6		—		2.83		29,030