- Record Revenue $1.25 billion and Record Net Revenue $1.05
billion
- Record Q2 EBITDA $135 million, up 28% Y/Y
- Record Q2 EPS of $1.42, up 34% Y/Y
- Increasing Fiscal Year 2024 Net Revenue and EPS full year
guidance
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
- Net Revenue1 increased 9% to $1.05 billion
- EBITDA1 increased 28% to $135 million
- EPS increased 34% Y/Y to $1.42
- Largest second quarter backlog ever of $4.74 billion, up 11%
Y/Y
- Cashflow from operations of $103 million, up 17% Y/Y
- Industry-leading DSO of 55 days
Recent Key Wins
- $464 million multiple-award U.S. Army Environmental
Remediation Services contract, investigating and remediating
harmful contaminants, including PFAS at Army installations
throughout the U.S.
- $375 million multiple-award NASA Environmental contract,
providing technical consultation and assessing innovative
approaches to restore contaminated sites and improve climate
resiliency
- $150 million multiple-award U.S. Army Corps of Engineers
contract, providing architect-engineering services to support
sustainable infrastructure
- $55 million single-award Environmental Services
contract, closing and dewatering ponds and remediating
combusted coal residuals
- $22 million single-award U.K. Government Project Management
and Design Services contract, designing building
systems to reduce emissions and increase energy efficiency
_____________________________
1Non-GAAP financial measures which the Company believes provide
valuable perspectives on its business results. Refer to tables in
the Regulation G Information for reconciliations to the comparable
GAAP metrics.
Executive Management Comments
Dan Batrack, Chairman and CEO, commented, “Tetra Tech continued
our strong performance through the second quarter, including the
expansion of our margins in GSG by 170 basis points and CIG by 320
basis points over the second quarter of last year. With increased
profitability and record second quarter backlog, we are raising our
full year guidance for net revenue and earnings, which represents
forecasted EPS growth of 22% for fiscal 2024. We are looking
forward to sharing our long-term strategy and 2030 vision for
further revenue growth and margin expansion at our upcoming
inaugural Investor Day on May 14th.”
Dr. Leslie Shoemaker, Chief Innovation and Sustainability
Officer, stated, “As the leading high-end water consultancy in
North America, we will highlight the newest market drivers for
water and environment at our upcoming Investor Day, including our
strategy for assisting our government and commercial clients in
addressing EPA’s recent national PFAS regulations. Tetra Tech is an
industry-leading expert for investigating and assessing the impacts
of PFAS, including groundwater characterization work for the
Department of Defense, award-winning municipal PFAS treatment
designs, and removal of PFAS from fire-fighting foam in facilities
world-wide. Tetra Tech’s Leading with Science® approach provides
cost-effective, technology driven, multi-contaminant treatment
solutions across the entire water cycle.”
Sustainability Report Issued on Earth Day 2024
Tetra Tech uses our Leading with Science® approach to develop
innovative, sustainable solutions that support our clients in
developing safe and resilient water supplies, net zero energy
programs, and biodiversity protection. Our sustainability program
and associated goals align with our ongoing commitment to the
United Nations (UN) Global Compact, the UN Sustainable Development
Goals, and the Science Based Targets Initiative.
Tetra Tech’s 2024 Sustainability Report, released on Earth Day,
highlights progress on our environmental, social, and governance
goals and our commitment to improving the lives of 1 billion people
by 2030. Our Sustainability Report shows that cumulatively we have
provided beneficial impacts for 625 million people and contributed
to a reduction of 153 million metric tons of CO2e since our 2021
baseline assessment.
Quarterly Dividend and Share Repurchase Program
On April 29, 2024, Tetra Tech’s Board of Directors approved the
Company’s 40th consecutive quarterly dividend at an amount of $0.29
per share, a 12% increase year-over-year, payable on May 31, 2024,
to stockholders of record as of May 20, 2024. Tetra Tech has $348
million remaining under its $400 million share repurchase
program.
Six-Month Results
Revenue for the six-month period was $2.48 billion and net
revenue was $2.07 billion, each up 21%, respectively, over the same
period in fiscal 2023. EBITDA was $266 million, up 27%. EPS was
$2.81, an increase of 17% over last year.
Business Outlook
The following statements are based on current expectations.
These statements are forward-looking, and the actual results could
differ materially. These statements do not include the potential
impact of transactions that may be completed or developments that
become evident after the date of this release. The Business Outlook
section should be read in conjunction with the information on
forward-looking statements at the end of this release.
For fiscal 2024, Tetra Tech is raising EPS guidance to range
from $6.15 to $6.25 and is raising net revenue guidance to range
from $4.21 billion to $4.31 billion2. Tetra Tech expects EPS for
the third quarter of fiscal 2024 to range from $1.50 to $1.55 and
net revenue to range from $1.05 billion to $1.10 billion.
Second Quarter Earnings Webcast
Investors will have the opportunity to access a live
audio-visual webcast on the Company’s Investor Relations website at
tetratech.com/investors on May 2, 2024, at 8:00 a.m. (PT). The
webcast replay will be available following the call.
Investor Day 2024
Tetra Tech will host its inaugural Investor Day on May 14, 2024
at 9:00 a.m. Eastern Time. A live webcast will be available on the
Company’s Investor Relations website at tetratech.com/investors. To
participate in the webcast, please register at
https://www.tetratech.com/investorday2024.
About Tetra Tech
Tetra Tech is the leader in water, environment and sustainable
infrastructure, providing high-end consulting and engineering
services for projects worldwide. With 28,000 employees working
together, Tetra Tech provides clear solutions to complex problems
by Leading with Science® to address the entire water cycle, protect
and restore the environment, design sustainable and resilient
infrastructure, and support the clean energy transition. For more
information about Tetra Tech, please visit tetratech.com or follow
us on LinkedIn and Facebook.
___________________________
2Reconciliation of the net revenue guidance to the most directly
comparable GAAP measure is not available without unreasonable
efforts because the Company cannot predict the magnitude and timing
of all the components required to provide such reconciliation with
sufficient precision.
Forward-Looking Statements
This release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
The use of words such as "anticipate," "expect," "could," "may,"
"intend," "plan" and "believe," among others, generally identify
forward-looking statements. These forward-looking statements are
based on currently available operating, financial, economic and
other information, and are subject to a number of risks and
uncertainties. Readers are cautioned that these forward-looking
statements are only predictions and may differ materially from
actual future events or results. A variety of factors, many of
which are beyond our control, could cause actual future results or
events to differ materially from those projected in the
forward-looking statements in this release, including but not
limited to: continuing worldwide political and economic
uncertainties; the U.S. Administration’s potential changes to
fiscal policies; the cyclicality in demand for our overall
services; the fluctuation in demand for oil and gas, and mining
services; risks related to international operations; concentration
of revenues from U.S. government agencies and potential funding
disruptions by these agencies; dependence on winning or renewing
U.S. government contracts; the delay or unavailability of public
funding on U.S. government contracts; the U.S. government’s right
to modify, delay, curtail or terminate contracts at its
convenience; compliance with government procurement laws and
regulations; the impact of global pandemics like COVID-19; credit
risks associated with certain clients in certain geographic areas
or industries; acquisition strategy and integration risks; goodwill
or other intangible asset impairment; the failure to comply with
worldwide anti-bribery laws; the failure to comply with domestic
and international export laws; the failure to properly manage
projects; the loss of key personnel or the inability to attract and
retain qualified personnel; the ability of our employees to obtain
government granted eligibility; the use of estimates and
assumptions in the preparation of financial statements; the ability
to maintain adequate workforce utilization; the use of the
percentage-of-completion method of accounting; the inability to
accurately estimate and control contract costs; the failure to
adequately recover on our claims for additional contract costs; the
failure to win or renew contracts with private and public sector
clients; growth strategy management; backlog cancellation and
adjustments; risks relating to cyber security breaches; the failure
of partners to perform on joint projects; the failure of
subcontractors to satisfy their obligations; requirements to pay
liquidated damages based on contract performance; the adoption of
new legal requirements; changes in resource management,
environmental or infrastructure industry laws, regulations or
programs; changes in bank and capital markets and the access to
capital; credit agreement covenants; industry competition;
liability related to legal proceedings, investigations, and
disputes; the availability of third-party insurance coverage; the
ability to obtain adequate bonding; employee, agent, or partner
misconduct; employee risks related to international travel; safety
programs; conflict of interest issues; liabilities relating to
reports and opinions; liabilities relating to environmental laws
and regulations; force majeure events; protection of intellectual
property rights; stock price volatility; the ability to impede a
business combination based on Delaware law and charter documents;
and other risks and uncertainties as may be described in Tetra
Tech’s periodic filings with the Securities and Exchange
Commission, including those described in the “Risk Factors” section
of Tetra Tech’s Annual Report on Form 10-K for the fiscal year
ended October 1, 2023. Readers should not place undue reliance on
forward-looking statements since such information speaks only as of
the date of this release. Tetra Tech does not intend to update
forward-looking statements and expressly disclaims any obligation
to do so.
Non-GAAP Financial Measures
To supplement the financial results presented in accordance with
generally accepted accounting principles in the United States
(“GAAP”), we present certain non-GAAP financial measures within the
meaning of Regulation G under the Securities Exchange Act of 1934,
as amended. We provide these non-GAAP financial measures because we
believe they provide a valuable perspective on our financial
results. However, non-GAAP measures have limitations as analytical
tools and should not be considered in isolation and are not in
accordance with, or a substitute for, GAAP measures. In addition,
other companies may define non-GAAP measures differently which
limits the ability of investors to compare non-GAAP measures of
Tetra Tech to those used by our peer companies. A reconciliation of
these non-GAAP financial measures to the most directly comparable
GAAP financial measures is included in this release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240501302814/en/
Jim Wu, Investor Relations Charlie MacPherson, Media &
Public Relations (626) 470-2844
Tetra Tech (NASDAQ:TTEK)
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