Tetra Tech Q1 Earnings & Revenues Top Estimates, Increase Y/Y

Core Viewpoint - Tetra Tech, Inc. reported strong financial performance for the first quarter of fiscal 2025, with adjusted earnings and revenues exceeding expectations, driven by robust growth across all segments [1][2]. Financial Performance - Adjusted earnings per share for the first quarter were 35 cents, surpassing the Zacks Consensus Estimate of 34 cents and management's guidance of 32-34 cents, marking a 25% year-over-year increase [1]. - Total revenues reached $1.42 billion, reflecting a 16% year-over-year increase, and adjusted net revenues were $1.2 billion, up 18% year over year, exceeding management's guidance of $1.09-$1.15 billion [2]. Backlog and Segment Performance - The backlog at the end of the fiscal first quarter was $5.44 billion, representing a 15% year-over-year increase [3]. - Revenues from U.S. Federal customers, which accounted for 34% of total revenues, increased by 32% year over year, while U.S. Commercial sales rose by 7% [4]. - U.S. State and Local sales surged by 47% year over year, and international sales grew by 4% [5]. Margin and Cost Analysis - Subcontractor costs totaled $223.3 million, up 4.8% year over year, while other adjusted costs of revenues were $975.9 million, an 18.3% increase [6]. - Adjusted operating income increased by 23.9% year over year to $137.5 million, with an adjusted margin of 11.5%, up 60 basis points [7]. Balance Sheet and Cash Flow - At the end of the fiscal first quarter, cash and cash equivalents were $248.1 million, up from $232.7 million at the end of the previous quarter, while long-term debt increased to $888.4 million from $812.6 million [8]. - The company generated net cash of $13.1 million from operating activities, compared to $9.2 million in the prior year, with capital expenditure remaining stable at $3.4 million [9]. Shareholder Returns - Tetra Tech distributed dividends totaling $15.5 million in the first three months of fiscal 2025, an increase from $13.9 million in the previous year, and repurchased shares worth $25 million [10]. Fiscal 2025 Outlook - For fiscal 2025, Tetra Tech anticipates net revenues in the range of $4.365-$4.765 billion, with adjusted earnings projected at $1.37-$1.52 per share [11]. - For the fiscal second quarter, management estimates net revenues of $1.0-$1.1 billion and adjusted earnings of 30-33 cents per share [12].