Core Viewpoint - Tetra Tech, Inc. reported strong financial performance for the third quarter of fiscal 2024, with adjusted earnings and revenues exceeding expectations, driven by robust growth across all segments [1][2]. Revenue & Segmental Performance - Tetra Tech generated revenues of $1.34 billion, reflecting an 11% year-over-year increase, and adjusted net revenues were $1.11 billion, up 12% year over year [2] - The backlog at the end of the fiscal third quarter was $5.23 billion, representing a 19% increase year over year [2] - Revenues from U.S. Federal customers increased by 34% year over year, while U.S. Commercial sales rose by 7% [3] - U.S. State and Local sales increased by 8% year over year, and international sales were up 5% [4] - The Government Services Group segment reported net sales of $488 million, up 25% year over year, while the Commercial/International Services Group segment totaled $621 million, representing a 4% increase [4] Margin Profile - Tetra Tech's operating income increased by 32% year over year to $129 million, with an adjusted margin rising by 150 basis points to 11.6% [5] Balance Sheet and Cash Flow - At the end of the fiscal third quarter, Tetra Tech had cash and cash equivalents of $212.3 million, up from $168.8 million at the end of the previous fiscal year [6] - Long-term debt decreased to $861.8 million from $879.5 million [6] - In the first nine months of fiscal 2024, net cash generated from operating activities was $253.1 million, compared to $246.1 million in the prior year [7] Shareholder-Friendly Policies - Tetra Tech distributed dividends totaling $43.3 million in the first nine months of fiscal 2024, an increase from $38.3 million in the same period last year [8] - The company repurchased shares worth $12.9 million during the same period [8] Fiscal 2024 Outlook Raised - For fiscal 2024, Tetra Tech anticipates net revenues in the range of $4.27-$4.32 billion, an increase from the previous guidance of $4.21-$4.31 billion [9] - Adjusted earnings are projected to be $6.23-$6.28 per share, up from the earlier estimate of $6.15-$6.25 [9] - For the fiscal fourth quarter, net revenues are estimated to be between $1.09-$1.14 billion, with adjusted earnings projected at $1.82-$1.87 per share [9]

While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise. Revenues are expected to be $1.09 billion, up 10.4% from the year-ago quarter. Earnings Whisper The earnings report, which is expected to be released on July 31, 2024, might help the stock move higher if these key numbers are better than expectations ...

Have you been searching for a stock that might be well-positioned to maintain its earnings-beat streak in its upcoming report? It is worth considering Tetra Tech (TTEK) , which belongs to the Zacks Pollution Control industry. This consulting and engineering services company has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. The average surprise for the last two quarters was 6.05%. For the most recent quarter, Tetra was expected to post earnings of $1.3 ...

Other Notable Contracts Zacks Rank and Price Performance Other Stocks to Consider Tetra Tech, Inc. (TTEK) announced that it secured an additional $84 million to its single-award contract from the U.S. Agency for International Development ("USAID"). The deal aims to strengthen energy security in the Republic of Moldova. Tetra Tech currently carries a Zacks Rank #2 (Buy). Shares of the company have risen 30.7% in a year compared with the industry's 5.6% growth. Tetra Tech benefits from its focus on providing ...

Tetra Tech, Inc. (TTEK) is poised to gain from strength in the Government Services Group (GSG) segment, accretive acquisitions and shareholder-friendly moves. Let's delve into the factors that make this Zacks Rank #2 (Buy) company a smart investment choice at the moment. Business Strength: Tetra Tech expects key factors, including U.S. administration priorities, U.S. infrastructure stimulus and its focus on climate change on a global basis, to drive markets in the quarters ahead. The U.S. administration tar ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The unaudited consolidated financial statements for the period ended March 31, 2024, show an increase in total assets to $4.07 billion from $3.82 billion at the start of the fiscal year. Revenue for the first six months grew to $2.48 billion from $2.05 billion year-over-year, though net income slightly decreased to $151.4 million from $159.6 million. Cash flow from operations remained stable at $112.2 million [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2024, total assets increased to $4.07 billion, driven by growth in goodwill to $1.98 billion and accounts receivable to $1.04 billion. Total liabilities saw a slight decrease in current liabilities to $1.19 billion, while long-term debt rose to $951 million. Total stockholders' equity grew to $1.58 billion from $1.40 billion at the end of fiscal 2023 Balance Sheet Highlights (in thousands) | Balance Sheet Highlights (in thousands) | March 31, 2024 | October 1, 2023 | | :--- | :--- | :--- | | **Total Assets** | **$4,070,574** | **$3,820,477** | | Cash and cash equivalents | $210,294 | $168,831 | | Goodwill | $1,977,688 | $1,880,244 | | **Total Liabilities** | **$2,485,724** | **$2,416,971** | | Long-term debt | $951,031 | $879,529 | | **Total Stockholders' Equity** | **$1,584,850** | **$1,403,506** | [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) For the six months ended March 31, 2024, revenue increased by 20.8% year-over-year to $2.48 billion. Income from operations grew significantly to $228.8 million from $153.1 million in the prior year period, which was impacted by acquisition expenses. However, net income attributable to Tetra Tech decreased to $151.4 million from $159.5 million, primarily due to a large non-operating income gain in the prior year. Diluted EPS for the six-month period was $2.81, down from $2.98 Income Statement Highlights (in thousands, except EPS) | Income Statement Highlights (in thousands, except EPS) | Six Months Ended Mar 31, 2024 | Six Months Ended Apr 2, 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | $2,479,883 | $2,052,991 | +20.8% | | Gross Profit | $397,993 | $324,091 | +22.8% | | Income from Operations | $228,764 | $153,061 | +49.5% | | Net Income attributable to Tetra Tech | $151,418 | $159,536 | -5.1% | | Diluted EPS | $2.81 | $2.98 | -5.7% | - **The significant increase in income from operations for the six-month period is largely due to the absence of $23.7 million in acquisition and integration expenses and $8.5 million in contingent consideration adjustments that were present in the prior-year period**[9](index=9&type=chunk) [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of fiscal 2024, net cash provided by operating activities was $112.2 million, nearly flat compared to $113.1 million in the prior year. Net cash used in investing activities decreased significantly to $79.2 million from $755.2 million, as the prior year included a major acquisition payment. Net cash provided by financing activities was $5.6 million, a sharp decrease from $680.5 million in the prior year, which included substantial borrowings to fund the acquisition Cash Flow Summary (in thousands) | Cash Flow Summary (in thousands) | Six Months Ended Mar 31, 2024 | Six Months Ended Apr 2, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $112,181 | $113,123 | | Net cash used in investing activities | ($79,161) | ($755,219) | | Net cash provided by financing activities | $5,633 | $680,491 | | **Net increase in cash and cash equivalents** | **$41,463** | **$46,294** | [Notes to Unaudited Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) The notes detail key accounting policies and financial activities. Revenue from the International client sector grew to 39.1% of total revenue for the first six months of FY2024. The company completed the acquisition of LS Technologies for $102 million. Goodwill increased to $1.98 billion, primarily from this acquisition. Long-term debt stands at $951 million, including $575 million in convertible notes. The company maintains two reportable segments: Government Services Group (GSG) and Commercial/International Services Group (CIG), with CIG generating slightly more revenue Revenue by Client Sector (Six Months Ended) | Client Sector | Revenue (in thousands) - FY2024 | Revenue (in thousands) - FY2023 | % of Total - FY2024 | | :--- | :--- | :--- | :--- | | U.S. federal government | $789,078 | $658,449 | 31.8% | | U.S. state and local government | $298,476 | $300,985 | 12.0% | | U.S. commercial | $423,837 | $407,494 | 17.1% | | International | $968,492 | $686,063 | 39.1% | | **Total** | **$2,479,883** | **$2,052,991** | **100.0%** | - **The company's Remaining Unsatisfied Performance Obligation (RUPO), a measure of future work, was $4.7 billion at March 31, 2024, with approximately $3.3 billion expected to be recognized as revenue within 12 months**[33](index=33&type=chunk)[34](index=34&type=chunk) - **In Q2 2024, the company acquired LS Technologies for a total fair value of $102 million, which included $76 million in cash and $22 million in contingent earn-out obligations. This resulted in $71 million of goodwill allocated to the GSG segment**[36](index=36&type=chunk) Segment Performance (Six Months Ended Mar 31, 2024) | Reportable Segment | Revenue (in thousands) | Income from Operations (in thousands) | | :--- | :--- | :--- | | GSG | $1,172,168 | $127,134 | | CIG | $1,340,262 | $147,356 | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the 20.8% revenue growth in the first half of fiscal 2024 to increased activity in U.S. federal and international sectors, bolstered by recent acquisitions which contributed $266 million. Excluding acquisitions, revenue grew 7.9%. The International sector saw the largest growth at 41.2%, while U.S. State and Local revenue slightly declined due to the wind-down of disaster response projects. Adjusted operating income increased 23.5% to $228.8 million. The company maintains a strong liquidity position with $210.3 million in cash and over $729 million available under its credit facility [Overview of Results and Business Trends](index=31&type=section&id=Overview%20of%20Results%20and%20Business%20Trends) Revenue for the first half of fiscal 2024 increased 20.8% to $2.48 billion. U.S. Federal revenue grew 19.8%, driven by international development in Ukraine and contributions from acquisitions. International revenue surged 41.2%, reflecting higher renewable energy activity and acquisitions. U.S. Commercial revenue grew 4.0% from renewable energy projects. U.S. State and Local revenue saw a slight 0.8% decline, as a 19.9% increase in advanced water treatment projects was offset by a $41 million reduction in disaster response revenue Revenue by Client Sector (Six Months Ended) | Client Sector | H1 FY2024 Revenue (in thousands) | H1 FY2023 Revenue (in thousands) | YoY Growth | | :--- | :--- | :--- | :--- | | U.S. federal government | $789,078 | $658,449 | 19.8% | | U.S. state and local government | $298,476 | $300,985 | (0.8)% | | U.S. commercial | $423,837 | $407,494 | 4.0% | | International | $968,492 | $686,063 | 41.2% | | **Total** | **$2,479,883** | **$2,052,991** | **20.8%** | - **Excluding the impact of recent acquisitions, total revenue increased by 7.9% compared to the first half of fiscal 2023**[120](index=120&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) For the first half of fiscal 2024, consolidated revenue grew 20.8% to $2.48 billion, and revenue net of subcontractor costs grew 21.2% to $2.07 billion. Gross profit increased 22.8% to $398.0 million. Income from operations rose 49.5% to $228.8 million, benefiting from the absence of prior-year acquisition costs. Adjusted EPS for the first half increased 17.1% to $2.81 from an adjusted $2.40 in the prior year. The Government Services Group (GSG) saw revenue grow 13.3%, while the Commercial/International Group (CIG) revenue grew 27.7%, with CIG's operating margin improving by 150 basis points Adjusted EPS Reconciliation (Six Months Ended) | Metric | H1 FY2024 | H1 FY2023 (Adjusted) | YoY Growth | | :--- | :--- | :--- | :--- | | Adjusted EPS | $2.81 | $2.40 | 17.1% | - **The GSG segment's revenue growth was driven by advanced water treatment and international development activities, partially offset by lower disaster response revenue. Its operating margin slightly decreased due to the contract mix**[135](index=135&type=chunk)[136](index=136&type=chunk) - **The CIG segment's revenue growth was driven by renewable energy, international infrastructure, and the RPS acquisition. Its operating margin improved significantly due to a focus on high-end consulting and better project execution**[138](index=138&type=chunk)[139](index=139&type=chunk) [Financial Condition, Liquidity and Capital Resources](index=37&type=section&id=Financial%20Condition%2C%20Liquidity%20and%20Capital%20Resources) As of March 31, 2024, the company had a strong liquidity position with $210.3 million in cash and an additional $729.3 million available under its credit facilities. Cash from operations for the first half of fiscal 2024 was $112.2 million. The company's debt includes $390 million outstanding under its Amended Credit Agreement and $575 million in convertible notes. The company was in compliance with all debt covenants, with a consolidated leverage ratio of 1.73x against a maximum of 3.25x - **Primary sources of liquidity are cash from operations and borrowings under credit facilities, used for working capital, dividends, capital expenditures, debt repayment, and acquisitions**[141](index=141&type=chunk) - **The company is in compliance with its debt covenants, with a consolidated leverage ratio of 1.73x (covenant: max 3.25x) and an interest coverage ratio of 10.98x (covenant: min 3.00x)**[150](index=150&type=chunk) - **The stock repurchase program, authorized at $400 million, had a remaining balance of $347.8 million as of March 31, 2024, with no shares repurchased in fiscal 2024**[153](index=153&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to interest rate risk through its variable-rate Amended Credit Agreement, under which $390 million was outstanding with a weighted-average interest rate of 6.75% for the first half of fiscal 2024. It is also exposed to foreign currency risk, primarily from the Canadian and Australian dollars, the Euro, and the British Pound. For the first half of fiscal 2024, 39.1% of revenue was generated internationally. The company attempts to mitigate this risk by matching revenue and expenses in the same currency - **The company has interest rate exposure on its $390 million in borrowings under the Amended Credit Agreement, which have variable rates tied to benchmarks like SOFR**[162](index=162&type=chunk) - **Foreign currency translation risk exists as 39.1% of H1 FY2024 revenue was generated internationally. A strengthening U.S. dollar would reduce reported revenue and earnings from foreign subsidiaries**[164](index=164&type=chunk) [Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2024. No material changes were made to the internal control over financial reporting during the quarter - **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**[166](index=166&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, these controls**[167](index=167&type=chunk) [PART II. OTHER INFORMATION](index=42&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) The company's subsidiary, Tetra Tech EC, Inc. ("TtEC"), is involved in a legal proceeding regarding a complaint filed by the U.S. Attorney's Office alleging False Claims Act violations and breach of contract related to environmental remediation services at the former Hunters Point Naval Shipyard. TtEC disputes the claims and the company is currently unable to determine the outcome or potential loss - **A subsidiary, Tetra Tech EC, Inc., is defending against a U.S. government complaint alleging False Claims Act violations related to environmental remediation at the Hunters Point Naval Shipyard**[100](index=100&type=chunk) - **The company is currently unable to determine the probability of the outcome or the range of reasonably possible loss for this matter**[100](index=100&type=chunk) [Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors disclosed in the company's Annual Report on Form 10-K for the fiscal year 2023 - **No material changes in risk factors have occurred since the company's 2023 Annual Report on Form 10-K**[170](index=170&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase any shares of its common stock during fiscal 2024. As of March 31, 2024, $347.8 million remained available for repurchase under the existing stock repurchase program authorized in October 2021 - **No shares of common stock were repurchased in fiscal 2024. The remaining authorization under the stock repurchase program is $347.8 million**[171](index=171&type=chunk)

Tetra Tech, Inc. (NASDAQ:TTEK) Q2 2024 Earnings Conference Call May 2, 2024 11:00 AM ET Company Participants Dan Batrack – Chairman and Chief Executive Officer Steve Burdick – Chief Financial Officer Leslie Shoemaker – Chief Sustainability Officer Conference Call Participants Tim Mulrooney – William Blair Sangita Jain – KeyBanc Capital Markets Sabahat Khan – RBC Capital Markets Tate Sullivan – Maxim Group Operator Good morning, and thank you for joining the Tetra Tech Earnings Call. As a reminder, Tetra Tec ...

Exhibit 99.1 NEWS RELEASE May 1, 2024 Tetra Tech Reports Record Second Quarter Results and Raises Full Fiscal Year Guidance Pasadena, California. Tetra Tech, Inc. (NASDAQ: TTEK), a leading provider of high-end consulting and engineering services in water, environment and sustainable infrastructure, today announced results for its second quarter ended March 31, 2024. Second Quarter Highlights Recent Key Wins Non-GAAP financial measures which the Company believes provide valuable perspectives on its business ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 0-19655 TETRA TECH, INC. (Exact name of registrant as specified in its charter) Delaware 95-4148514 (State or other jurisdiction ...

Financial Data and Key Metrics Changes - In Q1 2024, net revenue increased by 38% to $1.02 billion, with EBITDA rising by 32% to $131 million, resulting in an EPS of $1.40, the highest for a first quarter [8][7][8] - The company raised its full-year guidance for net revenue and earnings per share, projecting a 20% year-over-year growth rate [7][8] Performance by Business Lines - The Government Services Group (GSG) revenue grew by 25% to $443 million, with a margin of 14.3%, driven by inland waterways and coastal flood protection programs [11] - The Commercial International Group (CIG) saw a 49% revenue increase with a margin of 12.5%, with significant contributions from the RPS acquisition and a 10% organic growth rate [12] Market Data and Key Metrics Changes - Revenue from US Federal clients surged by 49%, primarily due to the Department of Defense and USAID Resiliency Consulting [9] - International revenue increased by 74%, particularly in the UK and Australia, contributing to the overall growth [36] Company Strategy and Industry Competition - Tetra Tech focuses on the entire water cycle, with approximately 85% of annual revenue derived from water-related services, emphasizing its leadership in the water and environmental consulting sector [21][20] - The company is actively pursuing acquisitions aligned with its technical leadership in water and environmental services, indicating a strong pipeline for future growth [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand for differentiated services in water and environmental markets, with Q1 results setting new records for revenue and profitability [60] - The company anticipates continued growth in federal revenues regardless of the political administration, supported by long-term contracts [56][58] Other Important Information - Cash flows from operations exceeded net income by over 152%, with a DSO metric of 55 days, reflecting strong operational efficiency [15][41] - The Board approved a 13% increase in dividends, marking the 35th consecutive quarterly dividend with double-digit increases [44] Q&A Session Summary Question: What is driving the confidence behind the raised guidance? - Management highlighted new contract wins, including significant awards from the Army Corps of Engineers, contributing to increased contract capacity and revenue expectations [90] Question: Can you elaborate on the margin improvement from RPS integration? - The margin uplift of 600 basis points was primarily due to cost synergies and operational efficiencies achieved through the integration of RPS into Tetra Tech's systems [103][118] Question: How is the utilization for the combined business trending? - Utilization rates for RPS employees who transitioned to Tetra Tech's ERP system have improved and are approaching Tetra Tech's levels, with further integration planned [123]