Tetra Tech's Q4 Earnings & Revenues Surpass Estimates, Rise Y/Y

Core Insights - Tetra Tech, Inc. reported adjusted earnings of 38 cents per share for Q4 fiscal 2024, exceeding the Zacks Consensus Estimate of 37 cents, with a year-over-year increase of 15% driven by strong segment performance [1] - The company generated revenues of $1.37 billion, reflecting a 9% year-over-year increase, and adjusted net revenues were $1.14 billion, up 8% year over year, meeting the upper end of management's guidance [2] - The backlog at the end of Q4 was $5.38 billion, a 12% increase year over year, with U.S. Federal customer revenues up 12% and international sales up 6% [3][4] Revenue & Segmental Performance - U.S. Federal revenues accounted for 33% of total revenues, increasing 12% year over year, while U.S. Commercial sales rose 3% [3] - U.S. State and Local sales increased 9% year over year, and international sales were up 6%, supported by infrastructure sector strength [4] - Government Services Group segment net sales were $513 million, up 12% year over year, while Commercial/International Services Group revenues totaled $632 million, representing a 5% increase [4] Margin Profile - Subcontractor costs totaled $230 million, up 13.2% year over year, while other adjusted costs of revenues were $899.2 million, up 6.4% [5] - Operating income increased 33.4% year over year to $143.3 million, with an adjusted margin increase of 50 basis points to 13.3% [6] Balance Sheet and Cash Flow - Cash and cash equivalents at the end of Q4 were $232.7 million, up from $168.8 million a year ago, while long-term debt decreased to $812.6 million from $879.5 million [7] - Net cash generated from operating activities was $358.7 million, down from $368.5 million in the prior year, with capital expenditure down 32.7% to $18.1 million [8] - Tetra Tech distributed $58.8 million in dividends, an increase from $52.1 million in the previous fiscal year, and repurchased shares worth $12.9 million [8] Fiscal 2025 Outlook - For fiscal 2025, Tetra Tech anticipates net revenues between $4.565 billion and $4.765 billion, higher than the $4.322 billion reported in fiscal 2024, with adjusted earnings projected at $1.40-$1.50 per share [9] - For Q1 fiscal 2025, management estimates net revenues in the range of $1.09-$1.15 billion and adjusted earnings of 32-34 cents per share [9]