[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Unaudited consolidated financial statements for Q1/H1 FY2025 are presented, detailing financial position and performance, impacted by impairment and legal costs [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) The balance sheet as of March 30, 2025, shows total assets of $4.18 billion, a slight decrease, with reduced cash and goodwill, and increased liabilities Consolidated Balance Sheet Highlights (in thousands) | Account | March 30, 2025 | September 29, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $179,433 | $232,689 | | Goodwill | $1,913,134 | $2,046,569 | | Total Assets | $4,184,304 | $4,192,676 | | Total Current Liabilities | $1,516,515 | $1,219,527 | | Total Stockholders' Equity | $1,573,781 | $1,830,413 | [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) H1 FY2025 revenue grew 10.6% to $2.74 billion, but net income plummeted due to significant impairment and legal costs Statement of Income Summary (in thousands, except per share data) | Metric | Six Months Ended Mar 30, 2025 | Six Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Revenue | $2,742,674 | $2,479,883 | | Gross Profit | $435,659 | $397,993 | | Income from Operations | $62,129 | $228,764 | | Net Income Attributable to Tetra Tech | $6,135 | $151,418 | | Diluted EPS | $0.02 | $0.56 | - Significant charges in the six months ended March 30, 2025 include a **$115.0 million** legal contingency cost and a **$92.4 million** goodwill impairment, which severely impacted income from operations and net income[9](index=9&type=chunk) [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly decreased to $7.2 million in H1 FY2025, impacted by a legal settlement and working capital changes Cash Flow Summary (in thousands) | Activity | Six Months Ended Mar 30, 2025 | Six Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $7,240 | $112,181 | | Net cash used in investing activities | ($12,768) | ($79,161) | | Net cash provided by (used in) financing activities | ($37,437) | $5,633 | | Net decrease in cash and cash equivalents | ($53,256) | $41,463 | [Notes to Unaudited Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Detailed notes explain financial results, including revenue growth, goodwill impairment, a major legal settlement, and stock repurchase activities - On July 29, 2024, the Board of Directors approved a five-for-one stock split, effective September 6, 2024. All prior-period share and per-share amounts have been retroactively adjusted[24](index=24&type=chunk) Revenue by Client Sector (Six Months Ended, in thousands) | Client Sector | March 30, 2025 | March 31, 2024 | | :--- | :--- | :--- | | U.S. federal government | $915,270 | $789,078 | | U.S. state and local government | $410,425 | $298,476 | | U.S. commercial | $444,676 | $423,837 | | International | $490,168 | $495,656 | - A non-cash goodwill impairment charge of **$92.4 million** was recorded in Q2 2025, triggered by the cancellation of most USAID contracts impacting the Global Development Services (GDS) reporting unit[52](index=52&type=chunk)[53](index=53&type=chunk)[55](index=55&type=chunk) - A **$115.0 million** charge was recorded in Q1 2025 related to a settlement agreement with the U.S. government over claims at the Hunters Point Naval Shipyard, including **$97.0 million** for the settlement and an **$18.0 million** estimate for ancillary claims[102](index=102&type=chunk)[103](index=103&type=chunk)[108](index=108&type=chunk) - In H1 FY2025, the company repurchased **5.2 million** shares for **$175.0 million**. Subsequently, on May 5, 2025, the Board authorized an additional **$500 million** stock repurchase program[58](index=58&type=chunk)[59](index=59&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses 10.6% revenue growth, operating income impact from impairment and legal charges, and changes in backlog and liquidity Revenue by Client Sector (Six Months Ended, in thousands) | Client Sector | March 30, 2025 | March 31, 2024 | Change $ | Change % | | :--- | :--- | :--- | :--- | :--- | | U.S. federal government | $915,270 | $789,078 | $126,192 | 16.0% | | U.S. state and local government | $410,425 | $298,476 | $111,949 | 37.5% | | U.S. commercial | $444,676 | $423,837 | $20,839 | 4.9% | | International | $972,303 | $968,492 | $3,811 | 0.4% | | **Total** | **$2,742,674** | **$2,479,883** | **$262,791** | **10.6%** | - The cancellation of **83%** of USAID programs following Executive Order 14169 led to the termination of nearly all of the company's USAID contracts, which had accounted for **$409.3 million** in revenue in H1 FY2025[128](index=128&type=chunk) Reconciliation of GAAP to Non-GAAP Adjusted EPS (Six Months Ended) | Metric | March 30, 2025 | March 31, 2024 | Change $ | Change % | | :--- | :--- | :--- | :--- | :--- | | **GAAP Diluted EPS** | **$0.02** | **$0.56** | **($0.54)** | **(96.4)%** | | Legal contingency costs | $0.35 | - | | | | Impairment of goodwill | $0.31 | - | | | | **Adjusted EPS (Non-GAAP)** | **$0.68** | **$0.56** | **$0.12** | **21.4%** | - Backlog decreased by **$1.07 billion** (**19.9%**) from fiscal year-end 2024 to **$4.3 billion** at March 30, 2025, primarily due to the cancellation of USAID contracts[145](index=145&type=chunk) - Subsequent to the quarter end, on May 5, 2025, the company entered into a new Fourth Amended and Restated Credit Agreement, increasing total borrowing capacity to **$1.5 billion** and extending the maturity to May 2030[159](index=159&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces interest rate risk on variable-rate debt and foreign currency risk from international operations, with mitigation efforts in place - The company is exposed to interest rate risk on its **$450 million** in outstanding borrowings under the Third Amended Credit Agreement, which have variable rates tied to SOFR or a base rate. The weighted-average interest rate for H1 FY2025 was **5.78%**[172](index=172&type=chunk) - Foreign currency exposure exists from operations in Canadian dollars, Australian dollars, the Euro, and British Pound. In H1 FY2025, foreign exchange rate translation resulted in a **$74.3 million** decrease in equity[173](index=173&type=chunk)[174](index=174&type=chunk) [Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of March 30, 2025, with no material changes to internal controls - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[176](index=176&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[177](index=177&type=chunk) [PART II. OTHER INFORMATION](index=38&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) Legal proceedings information is incorporated by reference, detailing a $115.0 million charge for a settlement related to the Hunters Point Naval Shipyard - Information regarding legal proceedings is incorporated by reference from Note 17, "Commitments and Contingencies" in the financial statements[178](index=178&type=chunk) [Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors from the 2024 Annual Report on Form 10-K are reported, with updated interest and exchange rate risk disclosures - There have been no material changes in risk factors from those disclosed in the 2024 Annual Report on Form 10-K[179](index=179&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details of stock repurchase activity are provided, including 5.2 million shares repurchased for $175.0 million in H1 FY2025 Stock Repurchase Summary (H1 FY2025) | Metric | Value | | :--- | :--- | | Shares Repurchased | 5,165,715 | | Average Price Paid per Share | $33.87 | | Total Cost | $175.0 million | | Remaining Authorization (at Mar 30, 2025) | $172.8 million | [Mine Safety Disclosures](index=39&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Information concerning mine safety violations, as required by the Dodd-Frank Act, is included in Exhibit 95 - Information concerning mine safety violations required by the Dodd-Frank Act is included in Exhibit 95[182](index=182&type=chunk) [Other Information](index=39&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, modified, or terminated any Rule 10b5-1 trading plans during the second quarter of fiscal 2025 - No directors or officers adopted, modified, or terminated any Rule 10b5-1 trading plans during the second quarter of fiscal 2025[183](index=183&type=chunk) [Exhibits](index=39&type=section&id=Item%206.%20Exhibits) This section lists filed exhibits, including CEO/CFO certifications, mine safety disclosures, and financial data in Inline XBRL format - Filed exhibits include CEO and CFO certifications (Exhibits 31.1, 31.2, 32.1, 32.2), Mine Safety Disclosure (Exhibit 95), and financial statements formatted in Inline XBRL (Exhibits 101, 104)[184](index=184&type=chunk)[186](index=186&type=chunk)

Financial Data and Key Metrics Changes - The company achieved record results for revenue, net revenue, operating income, and earnings per share in the second quarter, with net revenue increasing to $1.1 billion, up $51 million year-over-year, and operating income rising to $130 million, an 11% increase from the prior year [9][10] - Earnings per share for the quarter was $0.33, reflecting an 18% increase from the previous year [10] Business Line Data and Key Metrics Changes - The Government Services Group (GSG) segment saw a 12% year-over-year revenue increase to $521 million, with a margin of 13.8% [10][11] - The Commercial International Group (CIG) segment's revenue was $597 million, up approximately 2%, with a margin of 13.2% [11] - U.S. Federal client work (excluding USAID) increased by 16%, representing about 20% of total revenues, driven by disaster response activities and new programs for the Army Corps of Engineers [11][12] Market Data and Key Metrics Changes - International work accounted for about 38% of revenues, with slight growth on a constant currency basis, although Australian infrastructure work saw a reduction of over 10% due to a recent election [12][13] - The company reported a backlog of $4.31 billion, which includes $220 million in ongoing work with USAID, primarily in Ukraine [13][14] Company Strategy and Development Direction - The company is focusing on high-end data centers and water and environmental projects, which are expected to carry higher margins [16][31] - The addition of the Sage Group is expected to enhance capabilities in digital systems and automation, positioning the company for growth in these areas [34][35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the funding streams from the U.S. Federal Government, particularly in defense-related services, and noted that the Department of Defense is expected to spend what they contract for [72][74] - The company anticipates continued strong demand for its services in water supply and environmental projects, driven by ongoing challenges such as drought and aging infrastructure [86] Other Important Information - The company announced a 12% increase in its quarterly dividend and reinstated its stock buyback program, with $150 million in stock repurchased in the second quarter [22][23] - A new credit facility of $1.5 billion was secured, providing more liquidity and favorable terms for future investments [20][39] Q&A Session All Questions and Answers Question: Concerns about federal expenditure reductions affecting state and local business - Management noted that they have not seen any near-term pressure on state and local projects, which are often funded through multi-year bonds [42][44] Question: Impact of proposed EPA deregulation on the company - Management indicated that most of their environmental work is driven by state and local regulations, and they do not foresee a direct impact from proposed federal regulations [49][52] Question: Core margin progression post-USAID cancellations - Management expects margins to grow slightly faster than the previously targeted 50 basis points annually, with a new higher baseline established [59][60] Question: Visibility and confidence from government partners for future projects - Management reported positive feedback from federal clients regarding funding commitments, particularly in defense and infrastructure projects [72][74] Question: Capital allocation preferences between share buybacks and M&A - Management stated that they have the ability to pursue both share buybacks and acquisitions simultaneously, with a focus on maintaining double-digit dividend increases [88][89] Question: Utilization rates of staff previously working with USAID - Management acknowledged a decrease in utilization rates for USAID staff but noted that overall staffing levels remained high due to disaster response projects [96]

Financial Data and Key Metrics Changes - The company achieved record results for revenue, net revenue, operating income, and earnings per share in Q2 2025, with net revenue increasing to $1.1 billion, up $51 million year-over-year, and operating income rising to $130 million, an 11% increase from the prior year [7][8] - Earnings per share for the quarter was $0.33, reflecting an 18% increase from the previous year [8] Business Segment Performance - The Government Services Group (GSG) segment saw a 12% year-over-year revenue increase to $521 million, with a margin of 13.8% [9] - The Commercial International Group (CIG) segment's revenue was $597 million, up approximately 2%, with a margin of 13.2% [10] Market Data and Key Metrics Changes - U.S. Federal client work (excluding USAID) increased by 16% year-over-year, now representing about 20% of total revenues [11] - State and local revenues grew by 44% year-over-year, driven by disaster response activities and ongoing municipal water programs [11][12] - International work represented about 38% of revenues, with slight growth on a constant currency basis, although Australian infrastructure work saw a reduction of over 10% [12] Company Strategy and Industry Competition - The company is focusing on high-end water and environmental projects, which are expected to carry higher margins across all end markets [17] - The addition of the Sage Group enhances the company's capabilities in digital systems and automation, positioning it to capitalize on the growing demand for data centers and smart infrastructure [34][35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the funding streams from the U.S. Department of Defense and noted that the clarity within the DoD has improved, with commitments to spend contracted amounts [70] - The company anticipates continued growth in defense-related services and high-end water treatment projects, driven by increasing demand for infrastructure improvements [27][28] Other Important Information - The updated backlog stands at $4.31 billion, reflecting a solid book-to-bill ratio of 1.1 for the quarter [13] - The company has a new credit facility of $1.5 billion, providing more liquidity and favorable terms for future investments [22] Q&A Session Summary Question: Concerns about federal expenditure reductions affecting state and local business - Management indicated no current signs of pressure on state and local projects, citing strong funding in populous states like Florida and Texas [41][44] Question: Impact of proposed EPA deregulation on the company - Management noted that most of their environmental work is driven by state and local regulations, with minimal direct impact expected from federal regulatory changes [48][52] Question: Core margin progression post-USAID cancellations - Management expects margins to grow slightly faster than the previously targeted 50 basis points annually, indicating a new higher baseline for margins without USAID work [54][56] Question: Visibility and confidence from government partners for future projects - Management reported improved visibility and confidence from federal clients, particularly in defense and FAA projects, with a commitment to funding [66][70] Question: Capital allocation preferences between share buybacks and M&A - Management stated that there is sufficient capital to pursue both share buybacks and strategic acquisitions simultaneously [83]

Financial Performance - Q2-25 net revenue increased by 5% to $1.10 billion compared to $1.05 billion in Q2-24[5] - Q2-25 operating income increased by 11% to $130 million compared to $118 million in Q2-24[5] - Q2-25 EPS increased by 18% to $0.33 compared to $0.28 in Q2-24[5] - First half of 2025 net revenue increased by 11% year-over-year to $2301 million from $2068 million[14] - First half of 2025 EBITDA increased by 12% year-over-year to $297 million from $266 million[15] - First half of 2025 EPS increased by 21% year-over-year to $0.68 from $0.56[16] Segment Performance - CIG segment net revenue increased by 12%[7] - GSG segment net revenue increased by 2% based on constant currency[7,8] Backlog and Contracts - Total backlog reached $4.31 billion with a book-to-bill ratio of 1.1x, excluding USAID + DoS[10]

Group 1: Earnings Performance - Tetra Tech reported quarterly earnings of $0.33 per share, exceeding the Zacks Consensus Estimate of $0.31 per share, and up from $0.28 per share a year ago, representing an earnings surprise of 6.45% [1] - The company posted revenues of $1.1 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 4.82%, compared to year-ago revenues of $1.05 billion [2] Group 2: Stock Performance and Outlook - Tetra shares have declined approximately 23.3% since the beginning of the year, while the S&P 500 has decreased by 4.7% [3] - The current consensus EPS estimate for the upcoming quarter is $0.34 on revenues of $1.06 billion, and for the current fiscal year, it is $1.37 on revenues of $4.37 billion [7] Group 3: Industry Context - The Pollution Control industry, to which Tetra belongs, is currently ranked in the bottom 18% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor sentiment [5]

Credit Agreement Details - Tetra Tech, Inc. has entered into a Fourth Amended and Restated Credit Agreement as of May 5, 2025[15] - The agreement includes a revolving credit facility, a letter of credit subfacility, a swing line loan subfacility, and term loan facilities[17] - The existing revolving credit loans will continue under the new agreement, maintaining the respective applicable percentages for each lender[19] - The swing line subfacility and letter of credit subfacility from the existing credit agreement will be preserved in the new agreement[19] - The agreement amends and restates the terms of the existing credit agreement, superseding previous terms[20] - Bank of America, N.A. serves as the Administrative Agent and Swing Line Lender under the new agreement[15] - The agreement allows for multicurrency subfacility provisions[17] - The outstanding amounts of revolving credit loans will be deemed to continue under the new terms[19] - The agreement includes provisions for sustainability adjustments[6] - The company has requested and received agreement from lenders to extend certain credit facilities[18] - The 3-Year Maturity Date is set for May 5, 2028, and the 5-Year Maturity Date is set for May 3, 2030[23][27] - The 3-Year Term Loan Commitment is limited to the amounts specified for each lender, adjustable as per the agreement[24] - The 5-Year Term Loan Commitment is similarly defined with specific amounts for each lender, also adjustable[28] - The total amount of the 5-Year Term Loan Facility equals the aggregate principal amount of the 5-Year Term Loans outstanding at any time[29] - The Alternative Currency Sublimit is capped at $400,000,000, which is part of the Aggregate Revolving Credit Commitments[44] - The transactions outlined do not create any new payment obligations under the existing credit agreement[21] Financial Metrics and Definitions - "Consolidated EBITDA" includes net income plus various expenses such as interest charges, tax expenses, and depreciation, with specific limits on add-backs for extraordinary losses[96] - "Consolidated Funded Indebtedness" encompasses all obligations for borrowed money, including bonds and letters of credit, as well as certain guarantees[97] - The "Consolidated Interest Coverage Ratio" is calculated as Consolidated EBITDA divided by Consolidated Interest Charges over the previous four fiscal quarters[99] - The "Consolidated Leverage Ratio" is determined by the ratio of adjusted Consolidated Funded Indebtedness to Consolidated EBITDA for the most recent four fiscal quarters[101] - "Consolidated Net Income" refers to the net income of the Company and its subsidiaries, excluding extraordinary gains and losses[102] - "Commitment Fee" is defined in Section 2.09(a) of the agreement, indicating costs associated with credit commitments[87] - "Control" refers to the ability to direct the management or policies of a person, either directly or indirectly[104] - "Default Rate" is an interest rate that includes a base rate plus an additional 2% for various types of loans[111] - The term "Defaulting Lender" is defined, outlining conditions under which a lender may be classified as such, including failure to fund loans within two business days or notify the company of non-compliance[112] - "Designated Borrower" and related terms are specified, indicating the framework for borrower designation and associated agreements[113] Legal and Compliance Terms - "Environmental Liability" is described, detailing potential liabilities related to environmental laws and hazardous materials[134] - "Equity Interests" are defined, encompassing various forms of ownership and profit interests in a person or entity[135] - The term "Division" is explained, referring to the division of assets and liabilities among multiple entities[122] - "Effective Date" is specified as the date when all conditions precedent are satisfied or waived[127] - "EEA Financial Institution" is defined, including types of institutions subject to EEA regulations[126] - "Disqualified Equity Interests" are outlined, specifying conditions under which equity interests may be considered disqualified[119] - The definition of "ERISA Event" includes various scenarios such as withdrawal from a Pension Plan and events leading to termination of a Pension Plan, which could impact the company's financial obligations[137] - "Excluded Taxes" refers to specific taxes imposed on the recipient, including net income taxes and backup withholding taxes, which may affect the company's cash flow[144] - The term "Federal Funds Rate" is defined as the rate calculated by the Federal Reserve Bank of New York, which influences the company's borrowing costs[153] - "Guarantee" encompasses obligations that the company may have to ensure the payment of debts or obligations of other parties, impacting its financial liabilities[163] Borrowing and Loan Terms - The "Facility Termination Date" is contingent upon the termination of Aggregate Commitments and payment of all obligations, which is crucial for the company's financial planning[150] - "FATCA" refers to regulations that may impose additional compliance costs on the company, affecting its international operations[152] - The "Incremental Commitment" allows the company to increase its borrowing capacity, which is essential for funding growth initiatives[166] - The "Excluded Swap Obligation" indicates potential limitations on the company's ability to engage in certain financial contracts, impacting its risk management strategies[142] - "Existing Credit Agreement" outlines the terms under which the company can access credit, which is vital for its liquidity management[145] - "Hedge Bank" refers to entities that may engage in financial contracts with the company, influencing its exposure to market risks[165] - The definition of "Indebtedness" includes all obligations for borrowed money, contingent obligations under letters of credit, and net obligations under any Swap Contract[173] - "Indemnified Taxes" refers to taxes imposed on payments made by any Loan Party under any Loan Document, excluding Excluded Taxes[174] - Capital Leases and Synthetic Lease Obligations are included in the definition of Indebtedness[175] - "Investment" encompasses any direct or indirect acquisition or investment by a Person, including capital stock purchases and loans[179] - The "Letter of Credit Sublimit" is set at $100,000,000, with no more than $25,000,000 available for financial Letters of Credit[198] - "L/C Obligations" include the aggregate amount available to be drawn under all outstanding Letters of Credit plus all Unreimbursed Amounts[190] - "Limited Condition Transaction" refers to any Acquisition or Investment that is not conditioned on third-party financing and completed within 120 days of the purchase agreement[200] - The "Interest Payment Date" varies based on the type of loan, with specific dates outlined for different loan types[178] - "Lender" includes the Swing Line Lender and is defined in the introductory paragraph of the document[193] - "IP Rights" is defined in Section 5.21, indicating the importance of intellectual property in financial agreements[180]

Core Insights - Tetra Tech, Inc. (TTEK) has secured an extended One Acquisition Solution for Integrated Services (OASIS+) contract from the Government Services Administration (GSA) for broad service areas, with financial terms undisclosed [1] - The five-year, multiple-award Indefinite Delivery Indefinite Quantity contract includes various technical service areas to support federal agencies, building on Tetra Tech's previous success under the OASIS contract, where the company earned over $725 million in project awards [2] Recent Contracts and Growth Drivers - Tetra Tech has recently received multiple contracts that are expected to drive growth, including a contract from the U.S. Army Corps of Engineers (USACE) for architect-engineer services [3] - In March 2025, Tetra Tech secured a contract from United Utilities for managing flooding and stormwater control in the UK, along with three contracts worth $416 million from USACE for technical services in the Indo-Pacific region [4] - In October 2024, Tetra Tech obtained a $249 million contract from USACE Omaha District for environmental evaluation and design services across the U.S. [5] Financial Performance and Challenges - Tetra Tech currently holds a Zacks Rank 4 (Sell), with shares declining by 27.1% over the past year, compared to a 20.5% decline in the industry [6] - The company is facing rising operating costs and expenses, which may impact margins, alongside high debt levels that could affect profitability [6]

Core Viewpoint - Tetra Tech, Inc. has secured multiple significant contracts, indicating a strong growth trajectory despite facing challenges such as rising operating costs and high debt levels [1][3][7]. Group 1: Recent Contracts and Projects - Tetra Tech has been awarded a contract from the U.S. Army Corps of Engineers (USACE) for architect-engineer services, capped at $46 million [1]. - The three-year deal involves providing engineering and design solutions for various projects, including road improvements, building upgrades, and safety checks for dams and levees [2]. - In March 2025, Tetra Tech secured a contract from United Utilities for flood management in the UK, and three contracts worth $416 million from USACE for technical services in the Indo-Pacific region [3]. - In October 2024, the company received a $249 million contract from USACE for environmental evaluation and design services across the U.S. [4]. - Additionally, Tetra Tech secured a $39.3 million contract from USAID to support the Engendering Industries program [4]. Group 2: Financial Performance and Market Position - Tetra Tech currently holds a Zacks Rank of 4 (Sell), with shares declining by 22.3% over the past year, compared to an 11.5% decline in the industry [5]. - The company is facing increasing operating costs and high debt levels, which may impact its profit margins in the future [7].

Core Viewpoint - Tetra Tech, Inc. has completed the acquisition of Carron + Walsh, a management consulting company, to enhance its market share and client base in the infrastructure sector [1][2]. Group 1: Acquisition Details - The financial terms of the acquisition have not been disclosed [1]. - Carron + Walsh specializes in project and cost management services across various sectors, including residential, commercial, life sciences, and infrastructure [1]. - The company has a robust client base, particularly in European markets, including housing authorities and public sector bodies [1]. Group 2: Strategic Rationale - The acquisition aligns with Tetra Tech's strategy to expand its market presence and customer network [2]. - It is expected to create cross-selling opportunities for large infrastructure projects in Ireland [2]. - The integration of Carron + Walsh's capabilities will enhance Tetra Tech's "Leading with Science" approach and improve its technology offerings in project management [3]. Group 3: Financial Performance and Challenges - Tetra Tech currently holds a Zacks Rank of 4 (Sell), with shares declining by 22.6% over the past year, compared to a 12.9% decline in the industry [5]. - The company is facing rising operating costs and high debt levels, which may impact its profit margins [6]. - Despite these challenges, Tetra Tech is benefiting from increased project activity in various client sectors, including U.S. Federal and International [6].

Group 1 - Tetra Tech, Inc. (TTEK) and its joint venture partner have secured three contracts worth $416 million from the U.S. Army Corps of Engineers (USACE) for technical services in the Indo-Pacific region [1] - The five-year contracts involve civil works, military base infrastructure, and planning projects, including advanced computer modeling and engineering design services [2] - TTEK will conduct detailed facility assessments and focus on optimizing water resources infrastructure to enhance sustainability [3] Group 2 - Recently, Tetra Tech has received several contracts that are expected to drive growth, including a $249 million contract from the USACE Omaha District for environmental evaluation and design services [4] - In addition, TTEK secured a $39.3 million contract from USAID for the Engendering Industries program and a $73 million deal to enhance electricity availability in West Africa [5] - The company also obtained a $375 million contract from NASA for environmental restoration and compliance services at NASA facilities [5] Group 3 - Tetra Tech currently has a Zacks Rank of 4 (Sell) and its shares have declined by 18% over the past year, compared to an 8.4% decline in the industry [6] - The company is facing rising operating costs and high debt levels, which may impact its margins and profitability [7]