Core Insights - Tetra Tech Inc. (NASDAQ:TTEK) has seen a significant stock price increase of 15.29% to close at $37.41, driven by investor interest ahead of its upcoming dividend payment [1] - The company announced a quarterly dividend of $0.065 per share, representing a 12% year-on-year increase, payable on December 12 [2] - For the fiscal year ending September 2025, Tetra Tech reported a net income of $247.7 million, a 26% decrease from the previous year, but a 33% increase in net income for the fourth quarter [3] Financial Performance - Tetra Tech's net revenues for the full fiscal year grew by 7% to $4.6 billion, while fourth-quarter revenues increased by 1.7% to $1.16 billion [4] - The company projects fiscal year 2026 net revenues between $4.05 billion and $4.25 billion, indicating a year-on-year growth of 5% to 11% [4] - Expected net revenues for the first quarter of fiscal year 2026 are estimated at $950 million to $1 billion [4] Strategic Outlook - The company anticipates increased demand for its high-end services related to water-reliant infrastructure, with a notable backlog growth in its high-voltage engineering practice [5] - Tetra Tech's consulting services are positioned as essential for the expansion and protection of coastal and marine infrastructure, particularly for defense clients globally [5]

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Financial Data and Key Metrics Changes - Tetra Tech reported record net revenue of $1.07 billion for Q4 2025, a 10% increase from the previous year [6] - Operating income reached $168 million, up 23%, with earnings per share growing by 29% to $0.44 for the quarter [6][7] - Fiscal year 2025 revenue increased by 7%, while operating income rose by 18%, and EBITDA increased by 13% [13][14] Business Line Data and Key Metrics Changes - Government Services Group (GSG) revenue grew by 17% to $396 million in Q4, with a margin performance of 22.9%, up 330 basis points from the prior year [8] - Commercial International Group revenue increased by 7% to $676 million, with margins excluding Australia up by about 60 basis points [8] - U.S. federal work accounted for 21% of total business, up 22% from the prior year, primarily driven by contracts with the U.S. Army Corps of Engineers [9] Market Data and Key Metrics Changes - International work constituted about 45% of overall business, growing at a 9% rate, with notable increases in the UK water business and Canadian clean energy [9] - U.S. state and local markets grew by 19%, driven by municipal water treatment and digital water modernization [9] - U.S. commercial work saw a slight decline, impacted by reductions in renewable energy work, but high-voltage transmission work is rapidly growing due to increased energy demand [9] Company Strategy and Development Direction - Tetra Tech focuses on high-end consulting and leadership in water services, which are expected to be in higher demand in the fastest-growing markets [4][20] - The company aims to capitalize on large global investments in water-reliant infrastructure, with a total addressable market in the hundreds of billions [20] - Tetra Tech is positioned to benefit from increased defense budgets and infrastructure projects, particularly in coastal resiliency and flood protection [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate changes in U.S. federal government priorities and maintain record financial performance [4] - The outlook for fiscal year 2026 includes expected growth rates of 5-10% for international and U.S. commercial work, and 10-15% for state and local work [30][32] - The company anticipates a strong start to fiscal year 2026, supported by ongoing demand for high-end water services [33] Other Important Information - Tetra Tech's backlog reached $4.14 billion, with a strong quarter of contract awards, including over $1.2 billion in new contracts with U.S. defense agencies [11] - The company announced a 12% increase in its quarterly dividend, marking the 42nd consecutive quarterly dividend with annual double-digit increases [18] - Tetra Tech's net debt amounted to about $600 million, with a leverage ratio of 0.9 times EBITDA, indicating a strong balance sheet [16] Q&A Session Summary Question: Why is revenue growth expected to decouple from backlog growth this year? - Management explained that the U.S. federal government's funding has become shorter in duration, leading to smaller task orders, while state and local work continues to grow, keeping the backlog flat [36][38] Question: Can you provide details on international business performance? - The strongest growth was seen in the UK and Europe, particularly in water programs, while Canada is expected to improve due to recent infrastructure spending [42][44] Question: How was the fiscal 2026 guidance range built? - The guidance reflects expected growth rates across various sectors, with potential deviations based on clarity in international markets and U.S. state department funding [51][57]

Financial Data and Key Metrics Changes - Tetra Tech reported record net revenue of $1.07 billion for Q4 2025, a 10% increase from the previous year [6] - Operating income reached $168 million, up 23%, with significant operating margin expansion, marking the highest level in over 30 years [6][15] - Earnings per share grew by 29% to $0.44 for the quarter [6] Performance by Business Lines - Government Services Group (GSG) revenue grew by 17% to $396 million in Q4, with a record margin performance of 22.9%, up 330 basis points from the prior year [8] - Commercial International Group (CIG) revenue increased by 7% to $676 million, with margins excluding Australia up about 60 basis points [8] - The overall performance across all business sectors demonstrated strong momentum, contributing to record financial results [6][8] Market Data and Key Metrics Changes - International work accounted for approximately 45% of overall business, growing at a 9% rate, with notable increases in the UK water business and Canadian clean energy [9] - U.S. state and local markets experienced a 19% growth rate, driven by municipal water treatment and digital water modernization [9] - U.S. federal work increased by 22%, now representing 21% of the business, primarily due to contracts with the U.S. Army Corps of Engineers [10] Company Strategy and Development Direction - The company focuses on high-end consulting and leadership in water services, which are expected to be in higher demand in the fastest-growing markets [4][20] - Tetra Tech is well-positioned to capitalize on global investments in water-reliant infrastructure, with a total addressable market in the hundreds of billions [20][21] - The company aims to enhance its fixed-price work, which has increased to nearly 50% of revenue, contributing to higher margins [72] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate changes in U.S. federal government priorities and maintain strong financial performance [4][6] - The outlook for fiscal year 2026 includes expected growth rates of 5-10% for international and U.S. commercial work, and 10-15% for state and local work [30][31] - The company anticipates a strong start to fiscal year 2026, supported by ongoing demand for high-end water services [33] Other Important Information - Tetra Tech's backlog reached $4.14 billion, with a strong quarter of contract awards, including over $1.2 billion in new contracts with U.S. defense agencies [10][11] - The company announced a 12% increase in its quarterly dividend, marking the 42nd consecutive quarterly dividend with annual double-digit increases [18] - Tetra Tech's net debt was approximately $600 million, with a leverage ratio of 0.9 times EBITDA, indicating a strong balance sheet [16] Q&A Session Summary Question: Why is revenue growth expected to decouple from backlog growth this year? - Management explained that the U.S. federal government's funding has become shorter in duration, leading to more frequent but smaller task orders, while state and local work continues to grow, keeping the backlog flat [36][40] Question: Can you provide insights on the performance of international business lines? - The strongest growth was seen in water programs in the UK and Europe, with Canada expected to improve due to recent infrastructure spending, while Australia has stabilized after previous declines [42][44] Question: How did you build out the revenue guidance for fiscal 2026? - The guidance reflects expected growth rates across various sectors, with considerations for potential impacts from government shutdowns and international trade clarity [50][56]

Earnings Call Q4 25 November 13, 2025 Dan Batrack, Chairman & CEO Steve Burdick, Executive VP & CFO Roger Argus, President Forward-Looking Statements & Non-GAAP Financial Measures All statements in this communication other than statements of historical fact are "forward-looking statements" for purposes of federal and state securities laws, including any statements of the plans, strategies and objectives for future operations, profitability, strategic value creation, risk profile and investment strategies, a ...

Core Points - U.S. stocks experienced a decline, with the Dow Jones index dropping over 100 points on Thursday [1] - Spectrum Brands Holdings Inc reported a quarterly adjusted EPS of $2.61, significantly exceeding the analyst consensus estimate of $0.86 [1] - The company's quarterly sales were $733.500 million, which fell short of the analyst consensus estimate of $741.111 million [1] Company Performance - Spectrum Brands Holdings shares surged 13.2% to $60.28 following the earnings report [2] - Ondas Holdings Inc saw a 24.4% increase in shares to $6.86 after reporting better-than-expected third-quarter results and raising FY25 sales guidance [4] - Firefly Aerospace Inc's shares rose 21.7% to $22.29 after exceeding quarterly financial expectations and raising FY25 sales guidance [4] - Cellebrite DI Ltd shares increased by 21.7% to $19.44 after reporting strong third-quarter results and raising FY25 sales guidance [4] - Sealed Air Corp shares gained 19.9% to $43.60 [4] - Dillard's Inc reported better-than-expected quarterly results, leading to an 18.3% rise in shares to $720.00 [4] - Digi International Inc shares jumped 17.5% to $42.30 following positive quarterly results [4] - Sally Beauty Holdings Inc shares rose 17.5% to $17.27 after reporting upbeat quarterly results [4] - Tetra Tech Inc gained 11.9% to $36.31 following strong quarterly earnings [4] - On Holding AG shares increased by 7.4% to $44.58 after reporting positive third-quarter earnings and issuing FY2025 sales guidance above expectations [4] - Nice Ltd shares rose 6.3% to $132.14 following strong quarterly sales [4]

Core Insights - Tetra Tech reported quarterly earnings of $0.45 per share, exceeding the Zacks Consensus Estimate of $0.40 per share, and showing an increase from $0.38 per share a year ago, resulting in an earnings surprise of +12.50% [1] - The company achieved revenues of $1.16 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 9.12%, and showing a slight increase from $1.14 billion year-over-year [2] Earnings Performance - Tetra Tech has consistently surpassed consensus EPS estimates over the last four quarters, indicating strong performance in earnings [2] - The company also topped consensus revenue estimates four times in the past four quarters, reflecting robust revenue growth [2] Stock Performance and Outlook - Tetra shares have declined approximately 19.7% year-to-date, contrasting with the S&P 500's gain of 16.4%, indicating underperformance in the market [3] - The future performance of Tetra's stock will largely depend on management's commentary during the earnings call and the subsequent revisions of earnings estimates [3][4] Earnings Estimates and Industry Outlook - The current consensus EPS estimate for the upcoming quarter is $0.30 on revenues of $968 million, while for the current fiscal year, it is $1.46 on revenues of $4.08 billion [7] - The Pollution Control industry, to which Tetra belongs, is currently ranked in the top 35% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Revenue and Earnings - Revenue increased 9% year-over-year to $4.79 billion for fiscal 2025[3] - Fourth quarter net revenue reached a record $1.16 billion, with operating income up 26% year-over-year to $181 million[4] - Annual EPS was $0.93, with adjusted annual EPS at a record $1.56, reflecting a 24% increase year-over-year[4] - Total revenue for 2025 reached $5,442.6 million, a 4.7% increase from 2024's total of $5,198.7 million[26] - Net revenue for 2025 was $4,617.3 million, up from $4,321.9 million in 2024, reflecting a growth of 6.9%[26] - Adjusted EBITDA for 2025 increased to $661.7 million, a rise of 13.4% from $584.0 million in 2024[27] - The GSG segment generated $2,673.9 million in revenue for 2025, up from $2,483.4 million in 2024, marking an increase of 7.7%[26] - The CIG segment reported revenue of $2,844.6 million in 2025, compared to $2,786.7 million in 2024, reflecting a growth of 2.1%[26] Cash Flow and Dividends - Operating cash flow for the year was a record $458 million, up 28% year-over-year[4] - The company paid cash dividends of $0.065 per share in the three months ended September 28, 2025, compared to $0.058 in the prior year, an increase of 12.1%[21] - Tetra Tech's Board approved a quarterly dividend of $0.065 per share, a 12% increase year-over-year[7] - Cash flows from operating activities for the fiscal year ended September 28, 2025, were $457,685, an increase of 27.6% compared to $358,708 in 2024[24] Financial Position - Cash and cash equivalents decreased to $168,372 at the end of the fiscal year 2025 from $232,689 in 2024, a decline of 27.6%[24] - Total assets increased to $4,282,174 as of September 28, 2025, compared to $4,192,676 in 2024, representing a growth of 2.1%[19] - Total liabilities rose to $2,502,010 in 2025, up from $2,362,263 in 2024, indicating an increase of 5.9%[19] - Long-term debt decreased to $763,363 in 2025 from $812,634 in 2024, a reduction of 6.1%[19] Profitability - Net income attributable to Tetra Tech for the fiscal year ended September 28, 2025, was $247,724, down 25.7% from $333,382 in 2024[21] - Basic earnings per share attributable to Tetra Tech for the three months ended September 28, 2025, was $0.49, up from $0.36 in the same period of 2024, reflecting a growth of 36.1%[21] - The company reported a net income tax expense of $129.7 million for 2025, compared to $130.0 million in 2024, a slight decrease of 0.2%[27] - Interest expense for 2025 was $30.8 million, up from $37.3 million in 2024, indicating a decrease of 17.4%[27] Future Outlook - For fiscal 2026, net revenue is expected to range from $4.05 billion to $4.25 billion, indicating a year-over-year growth of 5% to 11%[10] - The company plans to continue expanding its market presence and investing in new technologies to drive future growth[26] - The backlog for high-voltage engineering projects doubled in the fourth quarter, indicating strong demand for services[8] Stock Repurchase - The company repurchased $50 million of common stock in the fourth quarter, with $598 million remaining under approved repurchase programs[7] Subcontractor Costs - Subcontractor costs for 2025 totaled $825.3 million, an increase from $876.8 million in 2024, showing a decrease of 5.9%[26]

Core Insights - Tetra Tech, Inc. (TTEK) is set to announce its fourth-quarter fiscal 2025 results on November 12, with expected revenues of $1.07 billion, reflecting a 6.9% decline year-over-year, while adjusted earnings are projected at 40 cents per share, indicating a 5.3% increase from the previous year [1][9]. Group 1: Financial Performance Expectations - The consensus estimate for Tetra Tech's earnings has remained stable over the past 60 days, with a history of outperforming estimates in the last four quarters, averaging a surprise of 7.1% [2]. - The company anticipates overall revenues for the fourth quarter to be between $1.0 billion and $1.1 billion, with the Commercial / International Services Group (CIG) segment expected to see a 6.2% year-over-year revenue increase to $619 million [4]. Group 2: Factors Influencing Performance - Increased activity in U.S. Federal and State & Local client sectors is expected to positively impact Tetra Tech's quarterly results, particularly through its Government Services Group (GSG) segment, which benefits from a strong pipeline of advanced water infrastructure projects and disaster response programs [3]. - The CIG segment is likely to benefit from higher planning and design activities in water programs in the UK and Ireland, as well as strength in the high-performance buildings market [4]. - Recent acquisitions, including SAGE Group Holdings and Carron + Walsh, are expected to enhance Tetra Tech's digital automation solutions and expand its European presence, contributing positively to revenues [5]. Group 3: Challenges and Risks - Rising input costs and expenses are anticipated to negatively impact Tetra Tech's performance, with significant exposure to overseas markets potentially leading to foreign currency headwinds affecting profitability [6][9].

Core Insights - Sarasin & Partners LLP sold 4,273,853 shares of Tetra Tech, valued at approximately $155.35 million, during Q3 2025, reducing its holdings to 409,723 shares worth $13.8 million, which is 0.14% of its $10.2 billion U.S. equity portfolio [2][3] Company Overview - Tetra Tech provides consulting and engineering services, focusing on water resources, climate change, energy management, and infrastructure, generating revenue from government contracts, commercial clients, and international development agencies [4][6] - The company reported a total revenue of $5.20 billion and a net income of $333.38 million for the trailing twelve months (TTM) [3] Market Performance - Tetra Tech's stock price as of October 9, 2025, was $34.30, reflecting a 30.7% decline over the past year and underperforming the S&P 500 by 47.6 percentage points [3] - The stock has seen a recovery of 16% since April 2025, following a strong fiscal third quarter where earnings per share increased by 34% year over year [10] Client Base - Primary customers include federal, state, and local governments, utilities, natural resource companies, and organizations focused on sustainable infrastructure and environmental solutions [5][6] Investment Implications - The significant reduction in Sarasin's position in Tetra Tech, by over 90%, suggests a lack of confidence in the company's future business prospects, potentially due to headwinds from government spending cuts and increased scrutiny on government contracts [9][10]