TTEK - Earnings call transcript Q2 2022

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Operator

Good morning, and thank you for joining the Tetra Tech earnings call. By now, you should have received a copy of the press release.

If you have not, please contact the company’s corporate office at (626) 351-4664.

As a reminder, Tetra Tech is also simulcasting this presentation with slides in the Investors section of its website at www.tetratech.com. This call is being recorded at the request of Tetra Tech, and this broadcast is the copyright property of Tetra Tech. information of or Tetra this prior without of permission written Tech rebroadcast in part whole the Any is prohibited. from and Financial today Chief us management Batrack, Dan With Chairman Executive Officer; Steve Officer. Chief Burdick, are and They we’ll for up and the open a will the brief provide of results, overview questions. call to direct statement safe in today’s I’d like the to presentation. your attention harbor Today’s financial expectations. discussion contains forward-looking statements about future growth and described statements in from due differ Tech’s results significantly those including projected the today’s uncertainties, may filed risks various to reports forward-looking Tetra risks periodic SEC. with and Actual in the obligation as update law, Except by Tetra required forward-looking Tech takes no to statements. its

website. In references, Instructions] would I to be the will posted ahead, With presenting turn as financial like over to Batrack. the GAAP go financial Tech’s reconciliations Please are measures section addition, Dan [Operator since appropriate Mr. Investors Batrack. in that, some management the call non-GAAP Tetra of

Dan Batrack

good year call. welcome an revenue, very Thank and record second and to Melissa, net conference earnings morning, quarter quarter revenue fiscal and operating our We quarter second with income. Great. much, excellent you had XXXX

and is and of successful growth the water local services differentiated of with long-term in for environmental to leading for science grew This than XX% at state the result and year-over-year, net driving XX% international Our company year. provide high-end last revenue a more direct an performance overall markets strategy our that are markets.

the critical consecutive consultancy addressing our put #X programs Recognizing in proud of Our of are global all the to adaptation world’s News-Record of year on very that as United resiliency our been Water strategy publication has in focus this and States. climate the again Engineering across largest week, challenges named us center at the many just we’re change, water, operations. the by the XXth for have

overview with will review Officer, strength XXXX. of followed of Burdick, both then all-time and our the I both and capital year our share begin fiscal revenue, allocation today of earnings revenue for hit customers, quarter, net increasing income. of Chief for year all the for our outlook, by XXXX. and I’ll for earnings who net for Financial operating guidance provide the for detailed our performance an address performance are a our we more in and we customer In second quarter Steve quarter per Given our outlook year-to-date. guidance and fiscal financials and And will for highs revenue new our

quarter for from also million Our for company net any which history. revenue million, the XX% $XXX increased in to net second-highest $XXX year-over-year our revenue is the

to faster like operating we increased of now from of finally, our an our million. second at Our per earnings end year’s results. And delivered share, which is record a in even income by up an performance last from our XX% year, $X.XX $XX I’d overview previous rate, up quarter XX% reaching provide customers.

Kingdom. We United sustainable continued were state local which in sector XX%, grew was saw and the last our quarter Lea the quarter the was revenues, from our XX% Our the year. Canada, XX% Australia with acquisition, international, in where of expansion fastest-growing at strength client in international Hoare programs of which revenue included second last this and year. infrastructure work addition about our Without net up up

in state a across U.S. all continued extraordinary response quarter, the double-digit still and strength rate we local excluding with had municipal the at that our business Now water contributions in from work disaster work grew the

double year, that saw was net business, growth commercial U.S. last is quarter. from XX% we rate about X% revenue the which Our up of our XX% last

stable revenue And growth all our the XX% government this and Our in services U.S. work sector. same in contributed sector, our to quarter which and was and client federal net of last design year. clean buildings the services, sustainability, fourth high-performance for from was the permitting, include our quarter environmental energy

by Now X% of to of by international excluding commercial expansion and basis comparison, was quarter. also margin or This expansion to international present a in The XX development from goals which growth U.S. markets line segment our margin is our segment. work, I’d season, its the Services. driven Afghanistan with our winter for year-on-year across of improves performance Canadian while grew lower within the federal during Defense was XX up onetime Commercial/International points we Agency like work civilian XX% impact both margins X with Group, generated aligns as year-on-year, the this on Department both our now and for wind-down seasonally by point increasing strong margin CIG, year. by the basis our the business it our segments. and growth second in on each referred last The our

the margins approximately base Northern The group. into which We year, our Latitude by Government GSG this be our second basis continue for expect expanded Services to the CIG to of will many points. as locations business we in Group, the also expand XX of move half spring and months the or for summer segment, both

its of in quarter. disaster Backlog. a revenue quarter. points XXX the by GSG for and resulting basis margin benefit the net work extraordinary overall increase, the Overall, response in a the delivered With closeouts, X% favorable segment GSG XX.X% project grew

indicator quarter. for was came of out us as the also a good backlog Our very we

clients. expended the key our on new global federal backlog both notable the broad-based we billion the of all-time are up billion business backlog company. X% $XX In the orders also Our and record an high company. relationships more of for resulting expanded amount $XXX of in for for than won more across our leveraged task authorized and quarter to strong million. the contract year-over-year increased revenue by quarter capacity cover than long-term X.X our that quarter, XX% during ending We in sequentially and contracted, company second funded we had in with the and and is the up programs growth and with $X.XX in The book-to-bill strong was work revenue particularly the in orders, a backlog

We also and new with added U.S. Mozambique. won programs and Army programs water with new the USAID

and Development Steve the to of point, turn Department DFAT, Trade, the International of like Affairs Foreign continued Our Burdick our work new I’d the addition this presentation over also At present to Agency, to now Australia’s Steve? Indonesia. financials. expand with details to for in programs or the of

Steve Burdick

Dan. you, Thank

over revenue to earlier, operations So guidance I’d the second year to million of our and were which was revenue our strong with net million, results million. $XXX and Overall, with upper the of quarter last revenue end as and for both resulted strong range, above international, growth which now from earnings. $XXX to amounted line The financial of The XX%, -- revenue QX $XXX commercial we performance local like markets. net Dan second $XXX growth review revenue results Overall, strong XXXX. XX% state for GAAP and from was the and top and end noted in up respectively, quarter had million. revenue

per second operating last share GAAP in for year. at the Our last improved EPS over which increase $X.XX year. in earnings over profit of the came quarter is quarter, XX% and an second

operating came of last was $XX XX% in which than was $X.XX higher of in year. EPS which guidance due $X.XX $X.XX. EPS better end in reported GAAP to this over This at million income, the range, top the quarter, Our came to our improvement up

like basis, XX year. over driven second income in I CIG Further, on a equates second improvement tax is that GSG would improved regarding improvement of the these of of than last CIG income resulting margin is in improvements this GSG quarter XX.X% by in our operating of of an an largely our of year which about year, an to margin over XX.X%, segment was EBITDA the headwind operating in XX% consolidated year-over-year XX.X% last income. $X.XX to XX.X%, tax note this basis a rate XX a year’s a quarter. XX% growth quarter resulted year’s XX.X% points our segment The which of the is margin was higher last basis EPS, current Our last and operating And over points rate for basis XXX of year. and the growth points

from of the is cash million, flows the operations generated The totaled from second last $XXX from first year-to-date half of increase to which $XX cash operations million. year. Now an XX% for quarter amounts

year DSO a further is on flows no days. cash more at resulted a for and Our capital this to time. us This to last been has days of while, again our once an And our for days. generate of X working was long-term improving in many improvement from of XX focus that following of you XX who’ve low DSO than remember all-time you goal a

higher-quality to portfolio reflects and now and believe lead of lower DSO sustainable all and work sustainable our our our managers relative project broad better we we a in can below satisfied This highly days. XX markets trend do generate end outstanding the DSO However, clients across geographies. projects

$XX million. Our net debt amounts to

returns. along to shown EBITDA been of debt with business of on Our was and high-quality strong strong leverage able Tech position improved flows capital higher and with presented margins, a that total very cash Tetra working the EBITDA results and more $XXX an here we And has lower million. net generate today, as requirements, than cash the X.Xx a invest has continued in with

on at trailing return As over is the XX capital XX%. our months, invested

to balance as our allocation business, I now growth for and strategy calls providing of a returns balance will investing shareholders. our long-term capital of present, Our in the the managing sheet,

For buybacks. we the XX and shareholders operations share quarter, $XXX share. months, the second million through to during returns trailing provide cash about continued generated per or to from our And dividends $X significant

a month paid So to Directors would the regarding this we dividend, started that the in out rate dividend increase May we be dividends. announce program. consecutive in since XX% our million will today of past our our on at the quarter last million dividend of I Board of stock our consecutive Also, eighth which program. is a XXnd utilized paid $XX share, during quarter, which $XX.X approved second over double-digit the year. Further, annual is program, buyback our And in we increase like $X.XX per

And we first stock remaining to for more programs. returned a $XXX shareholders than both our fiscal the have total all of We $XXX through share of million buyback XXXX, half dividends buyback our told, million and in approved these programs.

net capital allowed which areas. later, us shareholders the to facility growth credit-linked acquisitions, positions your share to $X results for continue the while and and I’ll our holding to flow technical capabilities will complete and and the back year-to-date. billion strong successfully Our over our over several to quarter for strategic in liquidity available to fiscal strong sustainability investing Thank of you strategic us leverage balance And I’m return hand with our really Dan cash continue support, call and sheet X.Xx. to to second pleased our inaugural financial Dan. these discuss

Dan Batrack

the for of demand high-end work. Canada. environmental fastest-growing increased includes the some for with associated United discussing is federal water, to new broad-based in pleased mid-March. with start company, engineering seeing the to multinational development programs with in like finally international key our in our funding regional operations large we’re see budget that now an our biodiversity all an drivers Across differentiated climate critical throughout international and priorities. The work for year, international international resulting increase was change in focus in associate I’d and Steve. Kingdom, the budgets a This our you, increases new approved and companies such our buildings. and and ocean . and programs consulting This as protection, key management decarbonizing quite services we’re in Thank Great. market funding on land markets, and Australia

Army these We clients contract orders that we of task in expect Corps funds long-term billion capacity. $XX $X.X projects. which waterways U.S. programs convert an to to than previous have for coastal budget leverages a federal protection our over see their U.S. key that new billion, more our The of include and has X% in levees, of Engineers execute dams the increase is year, navigable to

to expertise world-class Corp years’ with expect the service in We more support throughout technical experience than areas. XX all design our these of

in acquisitions, and with acquisitions water skills expand talented and announce you bring added in to investments have share programs. those and the in X of further includes specialized environmental high-end that Tetra focus pleased we to the staff will to and capabilities I’m been that our growth Tech. second excellent firms identify quarter, Our and the strategy that

change half environmentally differentiated that essential is management of joined firms sensitive. are I’d programs have sustainable leaders with operations outlook more markets. first announce assessments global global projections commercial to technologies rate very and across our us, modeling Their Associates, massive our are have our we proud of investigations. commercial include Science expertise further for who and capabilities the hydraulic Data our into of of for that staying data The rapidly quarter’s for the sectors. to same are in client brought clients. both Science addressing for X climate that make integrated data essential also that present sets analytics these of Leading as in water growth to observations and provide Piteau they and saw Axiom like firms delta I’m billions in help analysis fiscal cutting-edge Both second technology Tetra X that unique last often XXXX solutions see We our big of outlook year and Tech’s the strategy. to now these sustainable each

XX% at local Our work which are state highest represent XX% be and rate. U.S. a growth growing about international, markets expected of and half company to the to

year’s all year U.S. X% forecasts our purposes of expected And present week, fiscal extra and both of for third I’ve unchanged our quarter remain modeling included outlooks guidance rate. XXXX. or that commercial for are like I as XX% quarter quarter. will note federal the and we’ve now at our Our to last comparisons. adjusted markets which to these last from to I’d fourth a for year-to-year grow noted, an U.S. for

for to with revenue, guidance guidance an $X.XX. per quarter Our as net from million ranges the $XXX earnings share follows: million $XXX diluted $X third of associated to for is our

share. in my for revenue both full we’re As and earnings for year remarks, per noted guidance net our increasing opening

and million upper of the end our For million. end by net of $XX the bottom by our guidance increasing revenue, $XX guidance we’re increasing

guidance range new a Our share, $X.XX fiscal year XXXX per billion by share of is for bottom billion. Earnings increasing the $X.XX guidance net to of end for revenue earnings $X.XX. the $X.XX by upper we’re our and end per

the flow-through that If the $X.XX, QX midpoint in our result you math, beat. of guidance an would this our which increase earnings by do of in exceeds

year, is of each of Our per $X upper guidance -- assumptions new end a for share for tax does which estimate of we share. include earnings $X.XX $X.XX. be it for This guidance has quarters: an per of remainder about the range year the for we’ll to the that following amortization, the it year to fiscal intangible have We XX% XXXX includes this rate. expense do $X.XX our estimate as a

quarter successive excludes would calculation. records revenue past, we’ve QX diluted completed April the shares We In approximately from are for that in that the second on in And the XX, quarter the be new income. as guidance and with energy this any the with Day, year’s forward. for XX.X that, and for point of our quarter have Leading the sustainable acquisitions in call setting I’d increased first-of-its-kind the average questions. summary, sustainability revenue, report, second net had just our included used impact like of for of water, to the the the operating Data Science with an strategy high-end excellent our year contributions We million year. quantitative guidance which this released from this remainder Earth Melissa, quarter, third which addition Science. and of and we up reporting And environment, infrastructure clean was open a We Piteau Axiom our this advanced And projects.

Operator

[Operator Markets. Sean Eastman Instructions] line Capital Our of comes question with from first the KeyBanc

Sean Eastman

job Nice quarter. this

guidance updated kind the is because level. into week headline extra at quarter think the quarter in the slowing the growth for important call-out an implies of half second a fourth I dynamic the fourth

and into us of from what in And go guidance we this growth So you through to on terms second some as the of take you the maybe if maybe what adjustment next looks advance year pace for year. context that away could comment like. want half

Dan Batrack

question, and for year the extra extra or a that fiscal you week Thank X in X of aware every pointing Sean. That’s good fourth being About has out the week. quarter. an our years,

of when So week have the from XX, always under But weeks our to in instead It X%. we of included you It year. take X XX guidance XX. out quarter. of in beginning X%, about was just the XX weeks, fourth it’s lands the the

difference. represent it about does X% an So

for that, actual the an year-over-year. a then would for you as the guidance QX, equivalent . remaining QX impute and QX if add the X% and that would get comparison take our and amount So you to we call something for for actual and basis for QX

quarter, a the into the the third take double fourth you in the you at well seen. quarter in look They’re our the you’ll digits, remaining into are if Now we’ve rates, see especially actually in just midpoint, both at if fact, a in the similar look and teens. fact, to what upper take point, that growth

like we’ve see strong. to we’d that guidance we with remaining what communicate So things the updated,

our seeing saw growth second in what the consistent rates quarter. We’re to we and remaining first

finished quarter, at increased guidance. share moments earnings increased quarter, for and we’ve the for guidance second rate. second quarter the came is second we first the the we’re expand both our second first margins on the in of We’re what greater our in my at earnings guidance very in just did projecting it that into you see share, ago we a strong per a that actually can year. percentage -- of a quarter. We in we our in increase and through And fact, our the share. And or a the earnings revenue increased those the just rest even our guidance. and further that comments in had per is through our than per even We’ve which seeing we’ve of that bigger year. and this than in even And We both provided revenue quarter that time few the guidance increase

we’ve twice that guess year, X And this be so it’s X. our it but shouldn’t it overlooked guidance I out make of I want clear, increased to

opportunity to an of increase having this of the proud it performance each company really that quarter I’m so we’ve reported be and every to the year. And

Sean Eastman

Good And revenue commercial bookings new helpful, this starting at uptick nice quarter. Dan. about could commercial we’d potential we’ve get worried there. coming expect recession we’re it’s think prior the this drivers It’s big and Very a most commercial cycles? durable summary see you and business economic in the scenario being where model. are when in of people to sort to see recession more in time Do than of that seeing this to in the growth the sensitivity seen Tech a Tetra be interesting

Dan Batrack

Well, I I within cycle commercial that, just would of reasons. some been driven area. through be will It’s many asked think I’ve for by start us, first one the better for economic this performance all, the certainly by company.

buildings the increase. So for -- been instance, environmental and both been energy board. clean our with not facilities, We’ve the recovering is it’s fab possible. yes, yes. high industrial And broad as ESG seen seen We’ve not programs, but it the tech seen contributor. the with support and in sustainability high-performance a and and renewable design basis that’s contributor a We’ve clients to as success chip I’ve contributor. had it more well? commercial is asked, we answer our We’ve And large to but seen We’ve energy. both is new clean be our It’s answer clients. a from contributor, And across the a up. energy area. our prospective high-performance is our on in yes, refer quite performing as the buildings

So it’s based. broad very been very,

based, more confident not commercial single on growth and it’s based contributing on very single I on and to where feel that recovery a leg area broad or it’s one it. component the So is

broad when gas in driven past most second and especially very on area that came ourselves we’ve by commercial it’s oil the numbers. for the into mentioned. you or out, periods had particularly mining, $XX these saw the industry, saw downturn and just move it to by for orders portfolio we X not of seen that coming particularly area low And of really been in driven recovered and commercial were changes other large that the XX% taken work prices oil where number from that oil has fluctuation areas or you our all, commodity to you slower We the from not volatility, for most but gas out back I very of very a down down sectors. commodity work So in our and part, significantly $XX, took saw

of the So with just volatility markets, the side. associated all portfolio. end variable as on overall And our highly a these much that’s commercial part smaller

just economic or to So that vulnerability exposure potential impact see I challenged of and negative don’t this environment. a in other level big or recession

Operator

Noelle question next from Stifel. of with comes line Our the Dilts

Noelle Dilts

margin of Congrats on changes strong for revisit how results. the previously half the the back sort then hoping, you’re provided profile was any could you’re I you And you by on margins segment the that or CIG commentary also the that rate the thinking division. growth thinking year how about Dan, and platform by for by about in of and GSG. longer-term the

Dan Batrack

measure. we’ve would indicated basis, annual Great. on XX Well, it up. basis annual coming on Government into go year, it was We an an thought the expect did to expand going by Services, we points roughly

I thought first think margin. I know operating in, points. XX% XXX XX% do that almost in that a I this and know between above basis we’ve we’d year both we’ve that the above been coming be And been quarter. income we a

upper of quarter. this last end that, me basis range above the by points here Let that XX overstate not

So margin us. front up expect are really it’s going quarters our well. highest I in coming that of do

expect don’t range I the margins But bit our Government I QX, of to for want the for end and QX provide little to insight XXXX be quite the and spring yet. is summer, us certainly a into So upper that for Services. at which

in CIG. the our does happy We for international in in second business. more far the by have is it our basis toughest for year, Commercial/International points every tell Canada. our particularly in But We I you us make activities quarter Group, the I’m largest is really difference. CIG work. a the had big XX with expansion very margins field

training, do largest mobilizing most our work our preparation maintenance that’s of clients. We spring in in And have the in we headcount, the for and our for the the continuing middle most project. when the revenue, winter, the education, the

are it the margins summer. to that expect do for I going and expand naturally, and I’ll seasonally spring So call

we you’ll think CIG’s in progress. I the as So see margins a increase notable

I it’s bit think that roughly on want to work. And which to our structurally, happen, margin, only slow XX think up. down go all it to just GSG seasonal it’s would its we’re see that basis going little points. not But up a if see don’t gap we matter is the I And CIG actually of it of government the here will I close on separation of the end move mix as year. margin a

the And timing so up of and a expansion, I of -- less That contributions as be upside higher with from CIG will margin to additional move the other the on a big summer. has basis range. and if could we But is respect there’s higher throughout should even still work, events movement hurricanes less into because or relative and expect think government we go see utilization I summer. disaster

Noelle Dilts

how sort you’re additional just about Very And the toward that to more platform. you could how as to think of need to sort advanced you the staff or with how the in current the And support about much -- investment you then staff add revenue that across you past, your the federal dynamic growth? the thinking analytics around you’re does of Maybe about on you growth that change the shift need comment strong also how work, second, add today. revenue seeing essentially of talked support you helpful. given labor can

Dan Batrack

But consistent time that through that’s more growing but have, have. through company my part hires, with adding that. really the the only how with first previous question. not XX%, with the the labor, utilization. more can workforce handle we The we a lot current about here through staff. I’ll through additional answer and We a we staff way, handle, acquisitions. adding good much we we’re straight That’s observations just through can spent work are new By we staff is with existing an of on and

say, I other say, say, would lower basis, overall, a because the the I basis. on entire get around little But tied There’s a use decoupled XX% financial higher But and the to to of charge is Steve, to that’s items. let’s can upper XX%. so of a The on hours of amount everybody, that would that of few winter, XX% the that. data XXs, actual a counting analytics, than we’re we’re of up revenue the actually the we use XX% utilization computer utilized revenue we programs, use Canada to We’re, a probably technology the amount generate. counting We increase. bit of financial company during growth myself, has

currently, we’re I that. And so say, would X.Xx about,

for works XX%. may technology use hour of individual on the each a project, another So an allow

a So I efficiency. think about turn what goal into XX% associate to our has or XX% XX% a with And X:X. growth, technology I would with that labor, been

that labor be is we our target our through double whatever contribution So would be. technology, to able would produce, the use of efficiency and productivity,

generate an of had we increase we in if XX%. could revenue a So XX%,

how we up. toward moving a staff goes makes partial or be It it to company moral staff be. makes corporation. productive that’s decoupling heads having much really being without grow Honestly, how so added our to And it the can of for we can the individual difference

-- technology cutting-edge a the some that that or not that’s in program say the for our we’re bringing exists replaced most being computer, by a It’s that say I’m to the clients. You’d world the would marketplace case.

in to We satisfaction and work up. geographic or teams projects of the in job U.K. allows us U.S., on if staff Australia really agnostic. projects work these they’re on be use South using electronic from The going can Folks can America. the across in the is platforms collaboration So world

fungible make all So not the markets. of our ability technology staff only use the across increased the opens productivity, different it up to but end

technology Yes, closely? big barriers made issue very watching and the where have to staff we drop a people use we’re the an move So is but has really the of work to difference. ability

can how have? we can We perhaps we much we right rates the sustain back do your staff growth the with So and question, to XX%. now have another

Operator

Our the of comes from with Maxim Tate Group. question Sullivan next line

Tate Sullivan

will in And -- how billion the facility please? world this credit mentioned sustainability-linked reduced? going that of your of your as forward remarks, the the facility. And sustainability forward the end is -- what for at to industry, that’s terms your going you leads consulting around all you a in of Dan, track in lower those from credit emissions in Is of cost projects result, kind are its facility the metrics of a first $X the report.

Dan Batrack

the certainly, Well, is few measurements Steve words I’ll speak it to a establishment say in of can kind, the It was industry. our just of about specifics let -- and first but I it. facility, yes, the its the of credit

you actually you’ll its better. read Lots and statements. say we’ll to first that gases as we’ll and precisely, respect And step or with continual our I see If such kind, qualitatives, want-to-be have the do associates to common reports, consistent the or of we’re actually the first subjectives, find only when phrases world will other of improvement, greenhouse XX,XXX improve sustainability and euphemism around quantified reduce carbon quantify how through not projects. ones our what up our footprint we’ll

the through challenge our also or it the interest to significant actually our this. the for to. on the perhaps XX But per make year, meaningful the X we’re to word Now both respect financial actually rates, lives a can respect a with we’ve individuals’ exposed the projects GHG that live reductions, person to Steve a -- reduction, and set that reduction that’s the but billion with environments they translates in represents are XX,XXX impact improvement costs taken of how most think we’ll lives for around I with world. to of say and that quality over And up impact the carbon

Steve Burdick

Sure.

and see a to the you we So meet person goals a for to worked if metrics. we that related this. X the those we’ve X% Sustainability One we tell see will last it’s determine and one would to X Shoemaker, on metric. items our probably our this improvements, different Leslie trying Chief And up based track -- to And year do rates. about I is is related reduction interest and Officer, how billion in with GHG so closely certain I

Dan Batrack

goal quantitative a that letters, of Yes. add or don’t only soft, their Tate working with And I it’s it’s words in numbers. It’s bankers. columns squishy qualitative. our or one take item, They have that a spreadsheets is Steve, not to would

And so of audit trail audit through quantified. our that process this as the and have we in an the that it sure is And costs. reduction has for interest quantified, provided make fact, in goes basis been and an internal supported

Tate Sullivan

Steve, confirm, this your -- replaces Is And true? facility credit to just facility completely? does does that this previous

Steve Burdick

Correct.

Tate Sullivan

Dan, that kind can tracking is to then doing speculation? own this that then or of your facilities. facilities, own turn already imagine banks get them the they And customers potentially themselves just happened sustainability-linked I you’re future? in their take their I facility in their to helps credit mean Has secure the for Okay. or

Dan Batrack

benefits the metrics and that Well, the a are very have are countries. clients we the to have. And U.S. these tracking sustainability good that with there the that’s and developing quantified metrics for certain associated of deliverables that nature included as Development of Agency by we’re projects has Tate, instance, work for mostly that goals of providing that question, scope International we

will work our that bring have that providing. can that that many clients I is we to have But from yet However, the say harvested them. not it of something we’re or that requested

through with incremental or always service and go actually item baseline. And additional by a differences necessarily that’s of I an week, say we which that of being say we was would and high-performance quantify at last our pulled buildings I additional clients this that course, a time. will is one assignment, have year. it’s utilized just interesting. asked all something available is that’s component. at the that of an practices establishing our as the deliverable not sustainability starts biggest but And So I it us But it’s from per can

say right will would clients. But to it it’s be yes, what’s out sought being only our a I part helpful So now, them. from still of small

Operator

next from Alexander with Our Capital of line the Berenberg Leach question comes Markets.

Alexander Leach

quarters just employees accounting gained and over change given and could talk been couple active? of yield market hiring to was back retention If before employees we bit conversation has any the a Can around so you the Axiom? What consultant for jump employee net the the about first. from last attrition Piteau

Dan Batrack

do on our year. fiscal We mostly Yes. this

were it’s full in months back to year. back, ago. ago, X some numbers have a trailing in XX%. would world respects, XXXX, that most different long But not we XXXX, a go to changed So some consider we is a the we so be. target under week we quickly specifically Go that is just we universe. In a on the which And respects like like that

is Our the I’m years are individuals what do talking period of turnover X%, have way, by have been intended voluntary finite projects at depart about brought with and turnover. the and here were have we that for more and is on project. We respect to includes a roughly a to certain that they X staff that that -- than completion

to we we’ve includes and hurricane individual quarters disaster many second as So ran and it response that disaster the of quarter response response on type few we a it on possible activities. because or additional during individuals what X,XXX revenue we or the fire a bring for X,XXX activities for quarter, natural fact, respond activity approximately for And to these staff other disaster, imagine people order worth excluded a in is you in of takes. or in to as million that bring can those $XX can in

same activities. call to item, to just we’re -- sure project-related voluntary defining make So our the of it turnover Alex, we non-transitory

science-based too individuals So the not say, the technically folks on are X% is for a for call said is it’s too just let’s calls, Is in important -- in before just X that these company I’ve turnover. to high to first Turnover people performance so roughly X%. X% and X that will about the it low? is XX%. X XX% right minus numbers over unclear is years it determine is years us them. And I first under for or years, right culture. company, because maybe A the It’s this

on also fit And academia us, they or for other do they to in. locations. It’s actually so move

healthy first that to them, included period for come people be way, that. out X-year And in So staying. leave, that actually turnover we’re that sabbatical, retirements, for process if fact, individuals I medical that. in company, matchmaking ends think with sorting by determine up that includes for that anything And anything is through the would the X% seeing it’s the right culture

important consider we best-in-class a that for number. say of couple And a that us. So will I are really things

for are career, For here job. us, individuals that not a looking come a

here you’re for which a the here and selling team. looking quite So that and exceptional individuals turnover depart And And work our are in you. come People for meaningful and right colleagues, do cars and career, with to keep talented those or transitory is the a is X fine-dining company if low. that a probably come being work extremely it’s interested low. it’s really chef, they’re not for

you would If you. you you’re And and people? escalation? the really, can that housing are so a second seen question, commodity other more and a respect And every in best inflation at for one, highest bonuses is are market. performance. is, but why to The the inflation. So not for salary, natural profit you or the detailed we’ve cost class looking work course, rates our question you compensation next meaningful the erode not staff that career Those with And change which fuel single seen the is how is overall looking -- design And you’re a items, to And driven a that’s probably actually turnover. creative much margins? long-term based them? wage is get our or combination really by if of for be we’ve are right the on it’s going the and here them see. yes. increases But -- and have that such most really, to really to do course, ability your performance seen come of low not salaries with of you keep come of not engineer, answer will for people we have are collectively, few But call compensation, the will company opportunities, and pay the world headline the people being benefits here, of competitive. in day be I industry

little that’s our think another reason I we turnover company. relatively senior So see the of staff of

Alexander Leach

as going rolling off the to strength state ‘XX, could If Okay, any to in it’s there we and business lot imagine well. the local I go to Are net year. But fiscal disaster the of I it’s how cadence we response? given great. revenues next know thoughts the of in risks too event-driven here? any there. call work from a about early think

Dan Batrack

to respect we’ve state as good state in and double-digit been to disaster fortunate question. been of a local, much been and our be growth -- response. quarter, we has This rate by to tried with last as growth that’s Well, how transparent exclusive we’ve in We’ve possible were had contributed disaster. of very quarterly And XX%. local we’ve

municipal between and because items. running growth work. lower real state what been other we’ve receipts budgets, tax recovery estate and XX% with call in So XX% of That’s we by underlying driven local been unemployment, our rising and

we federal for We’ll that other billion optimal out. on. level, see contribute. to to We has infrastructure it’s and local a going fiscal joint of budgets funding and infrastructure make projects bill provide. which passed, or translation and to we’re from means passed federal funding calendar we significant technical and $XXX or would going is the which would else That’s XXXX, services portion the had the XXXX, incremental then fall year. think which a late Act Jobs next state or government least the its the will Some into law at coming the engineering actually come. being actually the funding the at we’ve or of And to grants, levels comment local for state point IIJA way what out stimulus, the to that

health budgets still the for to go forward So funding additional we these us, the state with in of and see XXXX. local infusion programs

source to XXXX seen. do funding But not of dedicated bolster yet all-time move Now or that and to the to is type to continue we be whether highs. work will that’s earlier late of funds think that, we or really

XXXX So as underpinning percentage into without that’s basis. we later see what guidance getting on a a detailed

Alexander Leach

next impact Were roll-off Great. from from And if And one just year those there could on HX? very recognized the so, revenues what’s more Afghanistan in if I in any slip Afghanistan revenues? quickly.

Dan Batrack

had revenues. half, first minimal the In we

into the it local in be staff payroll hired to turned departure little answer in position winter. Afghanistan not quickly, or that very think an some or of It on country that the be October. thought from which that in X development There be had just demobilization they X a back in in the bit, wouldn’t basically aid the like wouldn’t some out take we nationals QX, true. agreement coming to from some going the There to USAID. was I go we would is this very of -- In QX. of be agencies country the that to close because there keep was thought out development not a appeared was

was so de it And very minimis in QX.

would say would I fact, I comp In call our not QX headwind. year-on-year

will for we’re roughly even million relatively in, that to an it So revenue per headwind, be XXXX. $X million quarter XXXX in $XX

the are roughly comps $XX $XX million, $XX and So million. million, million $XX

to essentially after revenue that, around think minimis. it So total XXXX. it in then really overall, was But really million I dropped $XX de

for is on that Afghanistan So the a just headwind comparison artifact. XXXX

Operator

and Mr. session. Ladies Batrack question-and-answer for back comments. turn any final I’ll concludes gentlemen, floor to the that our

Dan Batrack

to day productive next the quarter. and you our or all a and insight, I XX through second the look X I’ll the and areas in hope month rest both lower, third to And next Thank you. all interest of quarter to And closing, and programs it’s really in for us where the associates up had setting want quarter. commend into. very and I folks safe forward your were for their Tech. about Tetra really and questions at thank support week, quarter, progress you good our which quarter. you in much. from we of have very you efficient really results talk year a fantastic all of Melissa, this with we’re in now days about a of Tech. And Tetra And presenting even you thank a We third

Operator

today’s Thank conference. concludes you. This

You may for participation. at your you Thank your lines disconnect this time.

Tetra Tech (TTEK) 8 May 222022 Q2 Earnings call transcript