Tetra Tech Reports Record Fiscal 2024 and Fourth Quarter Results

• Record Annual Revenue $5.20 billion, up 15% Y/Y
• Record Annual Net Revenue $4.32 billion, up 15% Y/Y
• Record Annual Operating Income of $501 million, up 40% Y/Y
• Record Annual EPS, up 21% Y/Y
• Record Backlog of $5.38 billion, up 12% Y/Y

Tetra Tech, Inc. (NASDAQ:TTEK), a leading provider of high-end consulting and engineering services in water, environment and sustainable infrastructure, today announced record results for both the fiscal year and fourth quarter ended September 29, 2024.

Fiscal Year Highlights

• Revenue increased 15% Y/Y to $5.20 billion
• Net Revenue¹ increased 15% Y/Y to $4.32 billion
• Operating Income increased 40% Y/Y to $501 million
• EPS of $1.23 and Adjusted EPS¹ of $1.26, both increased 21% Y/Y
• Backlog increased 12% Y/Y to $5.38 billion
• Net Debt / EBITDA improved Y/Y from 1.4x to 1.0x

Fourth Quarter Highlights

• Revenue increased to $1.37 billion
• Net Revenue increased to $1.14 billion
• Operating Income increased 33% Y/Y to $143 million
• EPS increased 75% Y/Y to $0.35; Adjusted EPS increased 15% Y/Y to $0.38
• Industry-leading DSO of 55 days

Recent Key Wins

• $12 billion multiple-award contract to deliver innovative technology solutions for Defense Logistics Agency's most critical requirements in cybersecurity and systems modernization
• $5 billion multiple award contract to address complex resiliency challenges in countries around the world for USAID
• $1 billion framework contract with Northern Ireland Water for support of sustainable water infrastructure projects
• $249 million multiple award contract to provide environmental assessment and sustainable design services for the U.S. Army Corps of Engineers
• $225 million multiple award contract to provide environmental remediation services including site investigations, design, monitoring, and feasibility studies for the U.S. Army Corps of Engineers
• $150 million in single award contracts to increase access for reliable water, sanitation, electricity, and sustainable infrastructure in Africa for USAID
• $30 million single award contract to provide watershed-focused restoration and resiliency services for the Utah Army National Guard

Chairman and CEO Comments

Tetra Tech Chairman and CEO, Dan Batrack, commented, "We completed the fourth quarter and fiscal year 2024 with another record year with 15% annual revenue growth and 21% annual EPS growth. Our all-time high fourth quarter and annual results were driven by increasing demand for our differentiated high-end consulting services for managing water resources and resilient infrastructure. In 2024, we held our inaugural investor day establishing 2030 targets which include expanding our leading global water consultancy and growing our recurring revenue software business.

"We continue to see strong demand for our high-end services in coastal flood protection and recovery, security of water supplies, and digital modernization of water infrastructure. Over this past year, we received increasing orders across all our client end-markets which drove backlog up 12% to an all-time high of $5.38 billion. With strong momentum in contract wins and a record backlog, we are initiating our full year fiscal 2025 guidance for net revenue and earnings, which represents forecasted EPS growth of 15% for fiscal 2025."

Quarterly Dividend and Share Repurchase Program

On November 11, 2024, Tetra Tech's Board of Directors approved the Company's 42^nd consecutive quarterly dividend at an amount of $0.058 per share, a 12% increase year-over-year, payable on December 13, 2024, to stockholders of record as of November 27, 2024. Tetra Tech has $348 million remaining under its $400 million share repurchase program.

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 the first quarter in fiscal 2025, Tetra Tech expects net revenue to range from $1.090 billion to $1.150 billion² and EPS to range from $0.32 to $0.34. For fiscal 2025, Tetra Tech expects net revenue to range from $4.565 billion to $4.765 billion and EPS to range from $1.40 to $1.50.

Webcast

Investors will have the opportunity to access a live audio-visual webcast and supplemental financial information concerning the fourth quarter of fiscal 2024 results through a link posted on the Company's website at tetratech.com on November 14, 2024, at 8:00 a.m. (PT).

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 30,000 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.

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¹ Non-GAAP financial measures which the Company believes provide valuable perspectives on its business results. Refer to tables at the end of the release and Regulation G Information for reconciliations to the comparable GAAP metrics.

² Reconciliation 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 current expectations and beliefs of Tetra Tech's management and 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; 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 available at tetratech.com/investors.

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