TTEK - Earnings call 4 2023 | Tetra Tech, Inc.

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Operator

Good morning, and thank you for joining the Tetra Tech earnings call.

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

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

Dan Batrack

security energy water our over $X we by transition, backlog billion, RPS, cross-selling Tetra quarter this our environmental very of Great. management, This our operations, #X later and hallmark completed that the excellence as increased strong Together new in both for bit exceptionally speak in fiscal year #X you ranking result to in and our our is success year earnings goals delivered an We corporation. In announced to our and rankings year. and good expectations services. ranking the climate industry quarter services XXXX were on Across we high much, recognizes for newly our a I'll the Thank which again and recognized a are fourth the morning, XXXX strategic and management. had technical a with welcome that Melissa, and year. capital human that we with of We Tech's change, financial conference already already fiscal and XXXX, leaders fiscal including workforce environment presentation. talented Today, call. has and fourth been exceeded excellent water an

to management upcoming providing water services expanding and water Kingdom utilities to now look we're this year. example, For United significantly XX forward these solutions innovative in

differentiated quarter Steve ever strive with fourth for. overview services, with each quarter. And I'm our of our of our financial look launched new capital with organic and and results we'd year to today segment's and the fourth provide and goals I'd some fiscal stated, As year our newly and fourth our we before forward the solutions pleased expanded the President but we for that year, overview of software an goal I we Burdick, the the only overview Hudkins, of them. like allocation. to for you our year. provide technologies provide that we best did of we begin an these insight an we Delta lofty additional ever fourth ambitious not technically of our highest guidance quarters, to quarter providing will all year review and this growth performance, into an the enter worldwide. I'll Corporation Simply Financial that the our finished will set what Chief of into Officer, to with the performance share we quarter beat of came strategies. But Jill clients the

all-time achieved financial records we for result, key that we track. a As every metric

revenue was the fourth the up our for from Now year. quarter, prior XX%

of the increased joined is last clear the which January us from in Tech from quarter, year RPS year. these Our EBITDA strong XX% from of this and $XXX just operations contribution earnings in to up indication just late the a Tetra both million and performance that

quarter by all overview client to X provide to last was last consulting quarter. I'd development increased an climate, now to of of sectors increased backlog was $X.XX revenue of and from IT our from X% by year services. a the XX% and revenue growth Our fourth our the net just our international work, driven Federal end XX% up quarter, quarter performance clients U.S. federal related year. in same was and In digits last environmental Work year. like compared combination our billion, customer. XX% and up for by our the of from last double up for

growth the our to continue water up consulting being management double-digit local state of and our deliver quarter year, XX% organically fourth and by revenues services. with We driven resiliency last from

services Our consulting U.S. sector our management our delivered in year. up our buildings and experts. And high-performance revenue and commercial customer finally, was energy by international last is revenue net XX% transition segment driven up high-end this and environmental Growth increasingly services from includes decarbonization was XX%. by

RPS course, operations. our is Of inclusive this of

revenue programs expanded quarter. net XX% quarter, resources the client now Group delivered programs increase from key exceptional GSG and compared The segment last grew international agencies up XX new increasingly a year in an XX.X% United federal year-on-year basis high or CIG present In to points quarter. margin, and Government last up revenue or defense our generated civilian, performance GSG growth our year. are $XXX performance margin, XX.X% Kingdom, drove utilization a from and net million of Canada. I'd International in now Commercial segment. fourth win network project GSG's Group the development was the across year. Services and strong like in points basis XXX by XX% segment the to leveraging the across the last at to We combined by and strong Australia

revenue segment driving energy-related and exceptional with in services. utilization the increases high-performance quarter efficiencies, also performance CIG Our buildings international in especially and had infrastructure, strong additional

And when differences the asked United industry, stakeholders the reporting presented compared States, I'd the those first on as I'm this the differences to the performance if United and Tetra shareholders like especially talking and Kingdom about to other along slide, compared now For you're following we discuss in margin time, in analysts used Canada. the to and often the Tech's webcast, to methodologies. methodologies and and and both

always which referred in as and following between GAAP our also has shows historically used IFRS. approach, comparison international adjusted Tech along slides, fact, typical standard the the If you're Tetra to graph on a U.S. the which traditionally, is

on you trend our can was margin X graph, since margin fourth here As an with Tech IFRS at basis the XX% of this Tetra on see past see quarter adjusted Tech's points an XXXX. can years Tetra annual over a expansion you the basis. On for XXX basis,

For to than the quite GAAP our to actually backlog, for in discuss their understand like compared points analysts stakeholders our this the adjusted IFRS the X measure and that when report. comparable business. comparison purposes, valuable our is is that higher report we best U.S. now looking about this percentage we calculation forward-looking adjusted this difference And to and think shareholders, it more make at financials. I'd others indicator

up few give more directly in as in and like high the our quarter, U.S. I've of a billion ago, high-end This government our clients. In few transport an design aligned is a And than specific This resulting numerical new associated not a moments. in in fourth orders a for added will and in with was authorized Federal and XX% Our that $X.XX waterways notably, just areas particularly year, billion quarter related Hudkins Jill work. and our last all-time example was potential funded mentioned backlog capacity clients. contract capacity work. from contract services, sediment Orders with inland we awarded. of lot is contracts by authorized moments this the contracts both were us, from which of are for government commercial driven additional strong year-over-year, overall for or XX% this modeling strengths and $X.X were IIJA funded up of of

expertise innovative we system quarter, for million and that an our leverages This $XX lock solutions and were specialized waterway a structures. optimizing dam awarded program control inland waterway for

quarter programs our for including Department Army the and U.S. point, details adaptation change also to financials won Chief We I'd will Steve Financial mitigation fourth initiative of over of about Engineers who Burdick, this turn Corps the the that presentation and our our the new go in capital priority the agencies, talk climate and EPA, the advanced some like Officer, programs. At for programs USAID, year, allocation. to over and water U.S. Energy, also and federal key of others of environmental U.S.

So Steve?

Steven Burdick

you, Thank Dan.

commercial has to strong revenue last and billion, our our been and government, was in federal including RPS XX% now record and last I and amounting over record flow, the state just as year. was growth fiscal Australia revenue GAAP by $X.XX And $X.XX year the the year our operating record of which would revenue has like we earnings Dan footprint local, over executed net to strong revenue, U.K., acquisition for which as and from quarter Europe fourth particular, cash the operations results billion, operating enhanced. fiscal the reviewed international, which in and all we XXXX. Overall, marked ending annual from the was performance year up XX% you heard, markets, greatly had results, from income, benefited review So financial up as

fiscal per all-time year share Now also were and income our the operating earnings both highs. for

This And the margins. from resulted operating resulted income EBITDA in million, in reported both have earlier, On is discussed over at on Our to fiscal XXXX. came our $XXX increase a increasing million. improvement consolidated as $XXX closing a segments. which CIG these GSG improvements been the margins basis, Dan in XX%

compared of XX that last have Our revenue at an years. increases, EBITDA our the to X average Tech margins year a our higher basis per Tetra have been such rate for margins increasing increased over points

costs last tax-related adjusted was up came the EPS adjusted associated the The $X.XX, $X.XX RPS items. at which charges, and integration Now excluded GAAP FX onetime lease and the hedge impairment and EPS final in was over EPS XX% year. gain

for of our total the relative reducing FX purchase price to $XXX XX% million. positive RPS lowering load required Now a provided gain by almost to the regarding complete outcome and hedge acquisition. debt our This

you further presentation G 'XX, refer as details this I'd earnings as release. slides included fiscal back our in QX Regulation well reconciliation in our to in the of For attachments the like and to

going-forward $XXX Tech from goal provide from our generate or amortization. fiscal operations the combined will net flow 'XX million RPS fiscal totaled we a to a we've trend XXXX more income. basis, long-term This intangible because of than results including more the net into flows and and percentage generated on Now acquisition continues Tetra successfully compared income. and our on for Cash integrated cash historical to accounting, operations reported higher basis XXX% completed

year last X DSO on working This days. and capital excellence an and focus best an last XX delivery DSO also continues and end reflect over This of from DSO markets years, And Our clients DSO has days X over in DSO our improving satisfied across improved to flows the XX geographies. an our each industry-leading in days resulted all-time brought broad of in the of trend is we've of and portfolio XX improvement our highly year. cash further days. lower all from to to project down our

at on X.Xx X.Xx, calendar the beginning leverage close lower RPS debt immediately And reducing was which our our debt balance flows, to cash exceeded leverage projections when to XXXX. net as below sheet was leverage net the generate delever and increase much target than the we've range of XXXX, our initial EBITDA was this acquisition the Throughout of we Xx. and our positive of Now the year. fiscal our expect after our further to throughout we Xx midpoint of

providing debt beyond shares of The our used sustainable thus arbitrage And XXXX as we robust in rate floating savings capital a and a With to well reaches as Our our diversified will per and term. have over over and to a were will this attractive annual million for long-term in facility. rate result to deleveraging the that which our providing strategy we interest. accomplishments we amount while have call compares key grow structure. milestones investing fiscal the stock expect allocation last shareholders, stock over needs used And of per acquisition, debt I that restoring of of to XXXX our returns significant within our continue mitigated total the current the coupon place, long tune potential essentially cash more price a we the managing $XX an benefits RPS The fixed in range our X.XX% X-year to thus bank a be credit net pay the amount price to until the $XXX debt, dilutive share X% more to a The calls is proceeds sheet. smart rate business strong convertible or balanced growth balance throughout for furthermore, and fixed transaction rate, successfully capital availability completed $XXX down And to floating an share the dilution accomplished to with our for in target our -- double of cap million than floating to in outstanding. the share. Xx $XXX entire about year.

in will will year-end, next. available in invest at facility us the million growth key and acquisitions organic strategic ability credit complete liquidity to speak in provide and the markets to Jill bank Our $XXX that had

relating all of metrics defined Our people. by gases bank improving of debt. credit the And resulting greenhouse facility agreement, first our includes the in to we sustainability-linked exceeded lives metrics X and as cost credit reducing our year, lower and thus measured billion in

to Regarding XX% dividend is dividends paid just dividend per pleased represents I'd share increased a over paid to Directors of year. by be glad digits your for to our results $X.XX dividend This to consecutive share support, the and year-over-year over have discuss to quarterly and and to Jill Board double double-digit program, to December. strategic will shareholders year business announce that of for for our opportunities now last everybody we amounts financial hand fiscal XXXX. fiscal the the I last quarterly few these also XXth increases our of And thank in call a really like in the beyond. approved a our increase I'm the paid. I'm of in

Jill Hudkins

Act, infrastructure sustainable are programs directly XXXX year provide our billion with and climate $XXX aligned priority spend Jobs fiscal aligned priority in water U.S. do government or up deliver will environment. and infrastructure we in the is environment funding clients government work U.S. Infrastructure increased Investment the beyond. a This with with resilient to plus the and infrastructure well for programs IIJA, The the Our extremely and

market and by wins NEWS secured as to quality automation, continue XXX-plus clients facilities supply analytics innovation Our in treatment win Tech advanced digital demonstrate the ranked for software to recent in is treatment to our and domain Tetra intelligence U.S. RECORD key secure prioritize artificial multiple expertise successful a Tech Tech Massachusetts Wastewater was clients for customers. Engineers program drought track and ENGINEERING U.S. deliver years water million to to and bay. their the delivering will row. Tech's modernize leverage improve nationwide. Tetra #X management solutions Tetra water digital biodiversity. Tetra leadership capacity has water the Army solutions risk announced the new water key to U.S., firm Tech water support In Southern of to contract and Diego. including some in districts Tetra major flood task providing win and awarded high-end Tech water record recently a U.S. state-of-the-art water and local #X municipal XX Tech delivery resilient and leveraging Angeles, transformation X been Tech's in largest why to new digital Metropolitan state of proprietary a in will industry-leading Tetra Tetra orders. that Gloucester modernize for and navigation, facility aquatic Tetra Los the San California serve system, the major contract services Houston water wins District is and with structures inland cities Water its water Corps navigation in control

operability increase expenses operating digital water and water our clients. Our reduce solution for remote innovative

from growth for continue our Our Tech decarbonization funding XXXX. further digital for local leading services infrastructure in prior billion perspectives expansion Climate Tech continue global $X.X in prioritize meet resilient doubling and Kingdom enhancing the XXXX to our best and demand with investment support as regulated won in gas greenhouse XXXX experience technology wastewater trillion water GBP infrastructure and the and local emission Change, XXXX, our state a In winning innovation. in high work double-digit worldwide require is zero the by United business. Tetra regulatory solutions. net and Tech's water period. Global the from X-year proven new energy year the water sustainable clients United be beyond. margin and utilities XX to Kingdom, fiscal in winning Tetra services work nature-based Tetra investment of targets by industry programs areas and will to priorities transition, is to sustainability additional

contained carbon to to of key won In security. award Quebec wind facility improve production Tetra biofuel residual the development modeling million energy won in the areas: transition, million Canada, Army of Tech fuels. sustainable multi-award a design Tetra that wins Corps Tech watershed recently hydrogen Victoria, forest to demonstrate alternative energy Next, Engineers, and in will greenhouse Australia. in the floating resilience $XX key and $XX first-of-its-kind Tetra high-performance that announced a our of convert U.S. management. in of I'd and gas and like energy environmental healthy recently using industry survey first-of-its-kind buildings a recent marine software. biomass resilience recycled leadership buildings X into with support recently offshore contract Tech designed highlight and Tetra proprietary Tech Energy project a

Our government future a the across portfolio includes Angeles. building to decarbonization city support carbon-neutral of Los a plan also X,XXX

well As a framework California decarbonization XX system-wide campuses. as all for State University

a recently Tech Severn X Utilities ] overflow million brings and with X X) sewer with the the contract and a to network modeling reduction cycle. And services AMP X won expertise analytics and presentation United now (AMP modeling sewer & Tech and and like Tetra [ XX Finally, analytics GBP the proprietary AMP reduction Tetra U.S. of best-in-class GBP 'XX million modeling industry-leading Trent. the discuss back Dan to our overflow turn to to Canada from I'd fiscal and X to provide U.K. support priorities outlook. software framework

Dan Batrack

our Jill. end-client of Thank to fiscal all Great. I'd I'd now X for present not across very preside XXXX outlook -- much, like you our to year like sectors.

contract billion capacity have First, about they and in grow government. existing U.S. from leverage ability our strong the backlog U.S. were XXXX, federal that XX% our by our supported $XX with what should revenues at our Federal to we

X% rate. between rate. for fourth is priorities to expected are double-digit markets in security overall We evenly our split at commercial. a transformation that our with a grow revenue business to commercial growth pace the to expertise digital about Client the XX% of work and at energy is XX% water be XX% sector. And net fastest-growing will areas our well international, XX% about and buildings XX% between water now international the continuing climate and For funding government and us aligned high-end clean transformation, high-performance we a about state and see area, our resiliency. U.S. commercial the and expect in probably in local, of be grow business,

We expect our the throughout we a and year water, and infrastructure expand Kingdom United the and XXXX, in base United to XX% resources, and synergies XX% fiscal to Kingdom, international grow of in environment revenue Australia at sustainable Australia, expect the to to as acquisition. continue rate about work RPS Canada. the further we especially leverage expanded our and client In realize

about move I human XXXX, capital. here to Tetra Tech the guidance fiscal how like Before to to year a take I'd think just for we moment discuss at

the the As as you a in Tetra capital. our insight, aspects Human day. company, to what secret might what Tech staff that our human provides solutions industry every There single makes the analysis consulting drive workforce X capital our describe are the unique and and business is us that success our with and to

the is any actually they X% opportunities their location year of resulted who per our in just finish They internal They spot in low of can of that already a across better an they company. take don't And a people They prioritization career. want that advancement experience look a entry-level and university have and has company. other There our individuals at. long-standing turnover the the experts to within can are here the job. we come we corporation new promoted the career those all staff. very First, and levels want rates to and the within and get actually From work attract than no that We want work about for in location doubt really have this demonstrated industry. a to recruits. the positions just first contributed extraordinary that top to, staff

second The area.

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technology for here Tech workforce enabler. at every of Our Tetra the an one is employees,

will look It's them positive a than better. afraid XX,XXX workforce technology in improving that aspirational of as both Tetra people ability of difference Something embrace or to make before. And our better, and here And we the a individuals every the the all to from is the part do use When have retain you, make of to believe outcomes entire Tetra of through them to lives to Tech and Tech. make This key impacts third, ability the tell of a and to talent. have we people X risk clients goal something top we they world, real not as the world, better company of. in is how the more of attract committed I efficient aspect projects ever our be billion our at our day.

Now like guidance the year of year move first for the to fiscal the of for XXXX. quarter entirety to and fiscal I'd

middle respect in beginning, and our to Our move the guidance difference GAAP first on GAAP before the both into earnings the the U.S. the are And know I probably I follows. guidance a the quarter earlier. with numbers and year I this XXXX that IFRS for want end spoke and to to is at basis. share, book per as I fiscal between

these the to pretty USD X compare a to close. With want revenue range first to XXX you'll of IFRS, you net be to quarter, USD if our is so these, million X points for add percentage to and guidance billion. And respect

an I'll XXXX. $X.XX fiscal and $X.XX of entire year first state per associated the earnings Over earnings the for share to of per an with GAAP quarter share, associated year

The guidance the just of calculations I've impute for GAAP XXXX, to growth with is be of share line of on XX% share you, per earnings associated or $X.XX $X.XX of midpoint a GAAP billion, midpoint XXXX and revenue associated did our earnings billion GAAP revenue with net per the GAAP range would for outlined, to in to would a range an midpoint. Our We $X.XX ahead $X. at which a top an XX% midpoint the a a growth. went

or the of X the what we includes webcast you're the the -- is assumptions this cost for which million slides. at charge done will for of or X we had intangible along on fiscal does Some QX, the of to and get I XXXX. This estimate modeling. know in amortization, be how as that actually year. than This if do questions those reviewing $XX and There quarter. charged following per different includes

here, in QX, in So QX, can in million see and QX $XX $XX you million the million footnotes QX. $XX million in $X in

for our for for XXXX, of million as XX% would estimating our excludes after charges the with fiscal very leading see shares outstanding modeling today. In or sciences, rate do summary, services. this. We acquisitions environmental have sustainable been assume we IA, from demand any we can quarterly an diluted and year, purposes, and effective for year additional infrastructure So use you contributions as enter we future that has are our income this of complete XX tax differentiated average we strong revenue practice, water,

RPS RPS supporting with well is culturally accelerating fits XXXX. for with performance in a opportunities our our restatement, alignment The goals all-time the very pleased I'm year the fiscal And from XXXX, just presented growth company. culture strong there. board, as expect and you, new so to we records fiscal is across have go to combined we and just year up For to set

and yet months we it's move the the and year ambitious of as for X support fiscal you like part growth Melissa, been quarter have outlook company, they're to of open the the have all quarter pleased targets And orders with results part in up here, that and doubt, from in And to with contribution. record XX still like presented they're for with of fourth to us that, While net share backlog our revenue for best they've months, close the that, the it of XXXX. And forward. No we been XXXX. They're strong XX the both very I come I'm the call culture, years. our XXXX frankly, of feels getting earnings would per is to for to set questions. part fourth our

Operator

comes William the first Instructions] Kusswurm line [Operator Sam Our Blair. of question from with

Samuel Kusswurm

I you start, today, you know when early your remarks. to but quite about your to understand IIJA more expect impact physical you contracts I are backlog impact XXXX. guess business? I And you frame? a wanted in stimulus, see IIJA a and expect stages a namely to you in have material projects I the the that time what based a of few do But still ask bit here. do related a highlighted won in little which prepared peak -- to in you expect XXXX when fiscal your Is more on

Dan Batrack

asked passed has close now. ago years It's here hottest topic to the no X a got we that into getting great been program been stimulus since infrastructure has ever question. There's doubt IIJA or maybe the law

$XX is we're We navigation that know not did dam $XX seeing earmarked associated lock Corps a IIJA. a week, just address for is just and inland us, contributions, clear million that. earlier and with program this I'll million from of and But project. press to For it's awarded million the within Engineers I we revenue now contributions contract individual seeing Army specific contract release were a revenue backlog, programs your and that first question the are went we capacity, a actual $XXX

fiscal got little year little So million less revenues. a And $XX contribute year, on this backwards a I'll we've to work anticipated bit this than XXXX. for to bit

year. It really for orders in You what pretty can see that this only be accounts already. $XX over million largely completed program much we have will next

beginning think backlog begin just the is in to this a We've under think probably we so backlog. this million And a see year, We little we'll grow. of $XX got ramp-up.

programs. we conservative, year. hundreds orders. early it measured contribution we continuing be would the contract fiscal you to capacity XXXX for already the go year number that dollars significantly capacity. add I to get that's calculated year. I think to this this be the and and contract the but of in that see in like expect as IIJA more up millions I as turns So of toward do what closer know I that that's quite of XXXX. what look for this we'll of do we see revenue and late for It's Hopefully, we've let we'll think out end end it does to ramp it move peak but us year, peak, the just

$XX have that year we around million I the actual So that embedded, again, is think number this of revenue.

when up move are fold see by layout than in projects, see think since to we in the with should will XXXX. several on much I the very it number into design overall would the the that duration permitting IIJA program. initial earlier And you of infrastructure respect we others go initial that both program early

Samuel Kusswurm

I from in solar appreciate over to me flows there. next the X you the recent coming Can you negative in wind helpful. -- month no to then. made whether you attributing how developments impact the your for remind developers. headlines U.K. the business the Very renewables the maybe see business news and last comments or related wind side. these offshore by seen big to activity on also some negative quarters? to color is We've expect offshore some the bid

Dan Batrack

Sam. It's question, course, That's great another of see headlines. we, interesting, these

X% with me let energy renewable start So is business. business our overall right Tetra of Tech's now? It's how about big

traditional year. it power So work with hydro a it's $XXX has or long-standing of been production. million about hydro Half

So that's million. about $XXX

the million roughly. $XXX other that So leaves

and the wind, company percent both couple solar on up a rest. associated primarily. So of with That offshore and the makes for

it's to good potentially online. from respect more I good our projects because ways for that's our at don't with news. good it be move anything to a help headlines ways, actually We news. say is offshore a different price actually many want their point. for we want lower actually to But completed the us never -- clients get wind being In expensive, it's Now project more to standpoint, can news find to clients difficult difficult

fit more not to be not So viable. actually that have fit to within they with move do experienced, might come firms And if who to Coast projects programs. with economics. With other and certainly, X who X their East cancel these might other of in programs, how were big this I less the on the those approaches technical less approach the we on say it manner. can their don't they developer projects one make But within their developers instances U.S., up may of in traditional the they a some we economic did actually respect it, where viable, that our of more portfolio, have would would be contributions the to would

forward with associated had Tech certainly to business. with this those calls have forward that to asking is how chance are I developer to not are to not resold elect forward Tetra the same not they incoming that us running other all. for give themselves not So a disruptive it me They'll is experts few our for if and have I commented disruptive, would move them. at move likely the other be that winds a we're only actually is moving said, offshore that good. actually And developers, that to

existing actually even the way, a not is moving beyond additional us today. this So what with give in leaseholders we opportunities forward strange had

actually a don't we as negative. see So it

category. amount very I the to field in we're current I dollar going on said think I in the And at put these to making bump frankly, you shared alternative the is smooth or area. want final happen. world forefront be road always industry to the be of would we destination the is that a I've question. in where the and think be future not now. without pothole speed generation renewable still or perfectly that going, and There's a the I going a expanding it's along with way. doing downhill this. promising But energy this of the that that looks this

Operator

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

Tate Sullivan

a billion. Really implied orders order -- Dan, international you programs larger of those of that -- And new earlier jumped out portion orders for U.K., said amount and Australia, had Canada quarter? were number the you the $X.XXX those total the across

Dan Batrack

than year geographies final But you mentioned, some, -- the And when of Federal our from final we end funding those the I topping government -- where the fiscal final year. were use They of that's to the the the Australia, projects normally really of that aligns don't say, want Canada, fourth they They place. with weren't. U.S. off takes were stronger just see quarter U.K.

typically, our the So that the was and definitely from case. order biggest fourth the government in quarter is federal U.S.

drove during So I government's year federal would the say they other from of sources. really the the representative QX, QX, up everything what what QX are is numbers. more and that's biggest fourth didn't But the truing spend quarter

Tate Sullivan

large of did move earlier for CIG particularly forward have a to you goal then say to slide? you on that GSG, closer the with orders number the And commercial margins going highlighted still

Dan Batrack

Well, yes.

experts looking CIG I think to this management the and Tech I'm is -- GSG. all to my in CIG ambitious forward is eclipsing the and Tetra goal side.

but got closer. I it's we first and -- to getting guess match So

extraordinary more regarding commercial as can we I of that say I a has make revenue very think drives of that but side the emergency contributions very -- contributions in But performance work utilization catching good. some bit little positively impacts high the extraordinary And that and difficult. some such disasters, been the priorities, do notwithstanding will margins. these the them high

If you will CIG aside, sort set catch in XXXX, that maybe of them.

the potential be So commercial economic catch. to side side looking to government environment. robust them a than yes, really the the And for higher we're in has

Operator

from Our comes line the of Andrew with next Baird. Wittmann question

Andrew J. Wittmann

the then don't look. a I a the forward ask on and to want guess back the think can the episodic. back on quarter I Recognizing quarter. not in be benefit had in Ukraine or bit the understand commented the first bit in you quarter better that than to talk quarter. quarter they just, revenue fourth But about just couple Obviously, here of to more third little 'XX those that I little from Dan, were activities in the second the you for

You'd obviously beyond that just the then quarter smart we thinking. fourth GSG have just margins were I the missed that. to maybe in very good And what probably we're because in unless quantified

paid incentive the there obviously, have award was that you backlog maybe of you a the of fees given that awards. you in showing And not get there any fees sometimes lot if quarter here fees, hit wondering but Just are quarter when notable, a this in that to that awards. totality, lot individually, just are

those would if So be could you helpful. things to just that two off, on think comment start I

Dan Batrack

to with great of Ukraine. Ukraine, we that have Yes, those doing of contributors or call points -- standouts assistance $XX been are or million. in maybe hostilities Ukraine, quarter that an but which great in our were had the start a like probably things respect something outbreak I did X sort fourth $XX a ongoing million that, been even we before I'll an has level what with quarter. we the additional

would of and looked are at if a we actually slightly plus in work million probably overall, So quarter above was you the I incrementally anticipated That we and had what for than higher $XX cost million Ukraine I is just that, it think of $XX work. coming lot now humanitarian call in.

and is So it risk a that do We work. but the to We margins. for it's humanitarian quite supporting a big lower margin very quickly, low a it company. does slightly get low risk don't carry in financially, carry work paid

revenue, margin of -- in per carried actually, Above it to of the top we lower that both quarter have and it we So drive but help that million doing, the kind the good sort because Ukraine in we had did by contribute level is moderated that But at GSG are areas $XX the margins. it world. other on Ukraine about the beat sort around share. specifically. end to of we what did anticipated had the in what was maintenance thing earnings

it So good. was

on On the on good revenue side, EPS, but it was margin.

we examples make with coin. But for we to from in quarter, did award on have would contingency projects, outside event a great X% a performance reworked margins amount And So comments fee fee of there's additional other not have those for be to X% a two managers, no special were small sides award that these any or are, to we from have the with did the our project from we and side, conversely, from to work. in that up of or respect stakeholders the or something have call comment true additional our closed regulators the there's that done. our clients in projects just might carry those project work and But some often the I and on on The closeouts. regulators lot aspect. our fact, accelerated approval out from in great

a say, I So shot of to, or a it would that also of contributed. bank byproduct contributed sort that

means DSO. in paid When your regular in quick is, of you it quick getting out able items. well, see what you're you're that see when you're And that and it that advance the without XX to contingency our see DSO. that in can also paid to at and you it much And that days. getting use then You close having going are schedule projects up can

the project So because I would excellent technical closeouts and staff the say a fourth quarter there of delivery across just in from company. our was project management

Andrew J. Wittmann

and sense, helpful makes it's That context.

given that give here much so and are bit actually to the might be Maybe it utilization then Certainly, sounds all your improvement into you been that on comment back there's 'XX. and get interest the and we when higher. good, for like 'XX EBITDA. certainly to into here. expense, you just of makes can you been baked better is that next little into guys some kind changing like EBITDA, a helpful your sounds like It But looks want getting it margin to interest guidance, over the digging it very you've Just rates have sense.

puts from mix certainly, benefits even then about. quarter the And year-over-year RPS. talked from third you've haven't on into got Ukraine mixes flight the got synergies the yet of takes and down. in there's second contribution, that always You've in been and these but quarter, of just even that first margins cost things we like you mix, a but about, some recognized lot talked quarter There's

it be And could. year-over-year? unfolds like could than But where the it be like You what be even up. maybe is year kind set level and it's it make it that had how guided? you're even saying I way, you've seems the better the guess could better of is the incentive if to you EBITDA fee would good, mix implicit It to much it what margin about other but us is for helpful

Dan Batrack

a pieces there. of lot There's moving

have. level, and the within embedded of other me I'll to Let start then we in interest Steve high some talk a that at let the company items

our of our level. We this calculations -- IAs for start high of range. EPS up at because range the do end our revenue we low do year, of having But instance, a to embedded, year. RPS end if hired full let for you me the low have our So a

there's see increase. about You'd basis point a XX

In quite uniform. fact, see you'd it

mid high revenue and a mix, you which high, If mid, at you I of of fiscal point a do you point basis XXXX. look within increase. you'll XX a at XX think favorable be and a and might high end low end about went year be increase take basis see up did EPS, a calculation, about if the you'd an

January. was So that's that of until the RPS Tech range. I say will with end It in the quarter us not last a of join first didn't sort of Tetra very year.

Tech. little a a higher the bit, year, not margins weighed quarter margins they are first bit still last RPS' on at because level of are though for guidance our little So than a they're actually weighed even on are Tetra

a Tech up around more, coming Tetra and around XX%. maybe XX-ish be little into the percent, they'll fact, year is In

represents ramp RPS through first continue the you'd at expect to margins And about comment will XX% in that which margin. to increase, course, a I it quarter, the have year. revenue, will of So while lower additional we

to a speak So items. as you and to guidance to our other somewhere between the annual such moving interest XXXX. And there items and within how have XX different takes. go I me the components basis overall, would Steve I let comparisons individual of But the of of depending margin at number puts think are some for points year take on of XX

Steven Burdick

Yes.

amortization, on on Dan's year. slide -- take you a based of rate quarter, was if the midpoint look about $XX up depreciation each Andy, our run depreciation model, So next it probably of there. is the at million

million. saw You about $XX

net Our million between what $XX $XX probably million interest cost and is somewhere at. looking we're

So number. moving pieces million. to midpoint, $XX.X EBITDA those an are get about to the those probably And

Operator

from the with North Ryan comes Connors question Coast Research. next of Our line

Ryan Connors

stimulus one stick I of seems few the a side, Dan, companies tangible infrastructure you're of to the spending. it on So like seeing, from and go want some impact actually the Federal that's

the either. at of You side, engineering and the hearing we're from some not not on even point that there we're peers definitely your equipment -- hearing that this providers

that yet that seems is things a a of America BABA obstacle it provisions, it. recurring you kind headwind theme getting are the deployed of of seeing and is One are and impediment funds provisions Build the those

field, we you're but do you're rely mean, seeing you how So the actual on think your it that work? little a why interpret that is that? you nature necessarily do that that upstream don't Is projects upstream in doing I study sooner?

Dan Batrack

went hit have Yes, my a up something. before right. to I with built comment it's you've comments end plan you'll it think think to had market, before build you that's a And I anything it was come that the comment offshore while I actually And different on wind. my

Build road. which America -- Tetra of assessment, providers layout Buy the resides, technology to have X sort service see with projects initial much That's upfront so the and the comes So Tech areas. I down There's respect is here, after something farther where permitting. valuation, America in built the that

does. Tetra Tech what us. And That's so that's

detailed as of low-cost themselves all don't it take design, typically having XX% goes companies, -- it an And attribute you leave engineering a take drawings engineering engineering we design to they'll and do large other engineering is a move which through centers. full-service from and would where those design the constructible are we the characterize companies, to And actually firms offshore phase detailed constructible hallmark and they'll the at as-built have engineering Second drawings. houses this of will then that drawings. typically about way

constructor. being it's design which of people see look to a in places really the very and putting been folks Phase go America. bidding Malaysia, So and anticipating and out to after that, engineering America either begins or in were can being into BABA We built Those be for be never together the or like III, would go and who they India to they built, is Build you're project the are the big revenue it move dollar Buy that the which II. build project, busy have can to Phase going prepared houses unless a

know ready is the bid we the And O&M I I've get going start -- commissioned. consider could construction later. that's the it's and until BABA of third already finish you're once see maybe from maintenance later. And anything it fastest move months not really be the they're then see the it be going the it's of ready to X the and so not out forward. that projects been the anywhere just and finish move. move started, area which when coming to they people, piece. part that And months and then work, or you're piece seen to And work to Then operation is and And is they'll until of to it the they've ever been or the our I tail end fourth commissioning X don't

So almost X every capital project it to those faces. that has a aspect has

You conflate on might before. and engineering encroach the when that you the a build do design but X doesn't and X, number the to we that construction go work

And there's you and immune And I a Tech, of to completely done funding actually project, largely that or design important both to in trade from X of describes classic segments, build environment, and I a means that call sort limited more it with the not, would smaller materials, project, what with IIJA, water, that areas insulated spending that or that, frankly, it's provider. are Phase And availability it's other in from largely you'd be and X. like to how backlog that there's Phase without though And numbers X, but they Phase a call because X general those supply it I farther would frankly, more even construction see in should those respect revenue X are diverse. certain we then go to We're get for X areas. But contract those, back I difficult IIJA. and will to see chain, is out IIJA to there's visibly your to difficulties until I. and infrastructure. competition, in can't benefit want that you've coming not Tetra encouraged BABA -- downstream and more Phases X, people of of say Phase come leader sole hallmarks, You pretty there's relationship market clearly I we're decoupled. we're one anything or sustainable Phase hope labor this X which in don't whether when cost go both out from seeing source, much other after of and what's trigger in but build opportunity, capacity which decoupled,

Ryan Connors

getting about great your data some been just at election specifically I it's other the is has my And in think and years, And you historically Dan. that kind volatile look, in not. detail, of I appreciate night keep than and twice then at great look management. can at about things given Yes. to in quality question, this and, if the us just, go I great it ready morning has optimism XX and last stock today No, of as in a as But are that's you years looking we're much And the color. into denies stock nobody all volatile you business. that election some positives. election I nonelection year. get an up And the risks years, to more years been talk

the X politically? talk scenarios know you qualitatively peak and you at are be risks plan. call spending what think like But budgetary keeping kind see about you specifically you still different situation. there business? listening particularly but focusing see on what I can there scenarios certainly, and out and the the said today, current maybe night, -- the it we're up very seems a to So the off there's few the, in risk the things how from must or some you related the of Because year to in the are the election factors

Steven Burdick

see that a you on video worn we are Dan. a not out, would very conference tired I'm because glad today Well,

Dan Batrack

has to up it and the We to shutdown. it what signed be awake resolution. the is then sleeping. shutdown. that and At media, think there's with and weeks, me no They bipartisan in way I'm coming beginning awake, at X a even extended going they through U.S. agreement week, of were was until -- it's tomorrow suddenly continuing dysfunction there to it's which come it's come tomorrow. Well, can this me they'll isn't keeps got government the Congress It But any yet the until a September. -- for is I sitting not night to because signed,

me uncomfortable feel government and dysfunction makes And federal what is U.S. with the shutdowns. the so

Now going we're yes, what that do down. shut I clients in do I'm have us it for to Tech before going have a more that is plan sure than for advance days to happens Tetra XX when gets make our funded

feel shut new of broken sleep high. financial disruption XX time for things. will who the we records not to performance, to these, is going the and government gusto very the the maybe of So all uncomfortable. I But be are makes do any to XX-ish do. I'll these knows it me go you, and go, really they're days amount but just sorts go on and I they're time down, tell over our there's going Maybe days made if that.

as so single individual be that to is than vote a the to. And that attention collaborators for other I forward. Unfortunately, people lot it's areas that will and things something my not a boat of move of some pay

outside me outside So I I make made level that U.S. you is sleep that would -- government, thought the in It but do true. are will those U.S. pretty high the great on do a revenues guess are say that of concern. say feel be things it, of do that lose I XX% a I our now federal uncomfortable. I point

So we are diversified. more much

I but going terminal by will us a to government be cold, U.S. sneeze it's So us. give for say, not the a may

we're election Tetra the would it was a volatility be flip years this And for perfect government say Tech in but some all words, mention though. during here, comment year. to different me So upside. every ago that our to just contingency to no This I Roosevelt year, -- election the be doubt optimistic go an during almost. We scenarios, to you from XXX actions look chicken but respect with not just the time there's would on -- prepared a I our to And multiple aren't federal ago, immune I the on the -- of with do side, the back pot. let things -- not the was it's way the did government, goes think is era long, it stock long plans

item of would they and look have can And might the They to I to politicians to might or So but for runs your whatever we haven't and most someone election to want seen items protection, for and around not years both.So I border maybe an build be. Typically, protection project stringent either election more build want to to "I want for for that have not under restrained. take perspective. gifts one garner are environment. say away your "I and are, level less " But priorities, Democrats, kind Republicans short are want want "I individual take away jurisdiction in the it, of looking are support water during more take the opposite, your which you" even might spend the side to I bridge say, fiscally volatility year, want I or to saying, proposal, want less. I your one additional say away at become different

Operator

Dudas from Partners. comes next of Vertical Our Research line question with the Michael

Michael Dudas

are a and to probably in gone reset talked internationally, simulation it that well like months. it and paying RPS you'll you evidence you next on opportunistic type sounds kind years? down in as smaller to about quite think flow. tuck-in your of you about Is What it kind versus over do just the opportunistic how certainly has what way, few How opportunities really historic of with see of relative that of years. you're pretty balance business for growth given and your going between, you thinking some share markets to cash of into need want taking through in the and recapitalize you you meet services seems gear as either kick the can I How the next RPS? that the do your like XX the quite with XX the about aggressive sheet, the couple forward further acquisitions you kind like these be strong seem debt Obviously,

Dan Batrack

RPS, to our X,XXX just yes, Xx, and expanded of yes, our RPS over Tech's Well, we of it when CFO acquisition. do us, was all at want to we clients did was Yes, this end it we with when had up technology new treasury plan right but -- at our the staff it inhibiting experts, my upper we yes, is our And and which U.K. had areas joined add Australia that companies one or new Tetra take And discussion our us to leverage the and footprints. for range. people. is, long-term after can without bring it premises But growth. largest

which this place. going that convert continued keep great for we for channel we got great. convertible you've of have expect part be what you'll more I super is the done which that And assimilate see They're in -- company. Burdick, small, the of the put to Steve and into years operations, to It's with and what that tuck-ins, important just was equal open. call but drove that us. scaling debt So we in of all Tetra them years, partners They of for sort lead are as years come of the bolt-ons, has the They Tech. for technical them some corporation. areas

that's So for Tech. if you're out Tetra a there it is in to looking about fit good think firm

to for don't to Tech a work You us. come Tetra

to to all. come You Tech us Tetra lead

we the take But existing just would today. which to continue Steve enough than of if, million those and that's know available on I presented that remarks prepared so And today what do to slide what's RPS. place. And transacted we will capacity, more just have $XXX be with

we that phone over line to a $X billion sight in access have funding We of frankly, calls. few trigger direct within within, could

for Tetra are that structure So not entities make be an balance would opportunistic there inhibitor. sheet would Tech, our such is if our capital sense that

as fact, In enabler. an

as case of companies the that portion. that we goal come years companies just and it for do us of that accretive and will technologies, shareholders to bring we Canada, I they'll long much know us. comes show out or will access be geography a with would U.K. are on that quarter cash the are to like demonstrate and that U.S. it That's the on much wanted a We actually be comes some round year have But So along, today. make makes right Australia, tuck-ins. I from but But to or X. adding do than that still it to us new if know now. accretive on of clients be they for respect the expect We some here GAAP the may today if say coming they'll RPS, our make -- larger And small we've business usual better GAAP portions that X to used our know more better complicated. quarter I may in have term, X -- within today Europe and take we not company actually we both the or and sense than XX to the that we with new the bet for

same. So not That fit companies the to a more midpoint. with isn't surprise. felt move we're should And the We'll below forward that of us. and more expect with continue that be the even

to to As Steve range Xx. we reside X weeks, this the ratios between an the that acquisition had get and do that the during indicated, below X.Xx, in We're of year. favorable in midpoint if X we'd X.Xx continue don't we're next below like

Michael Dudas

your Thank thoughts. be appreciate busy. will I you. business team development Dan, like Seems your

Operator

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

Dan Batrack

year fiscal XXXX. very the I who's to supportive company of call everyone the been I'd during thank us thank -- Well, much, today. you And you're moderating like appreciate Melissa. followed

hope started holiday safe Thank XXXX. off you talking first now to I to that, rest the enjoyable you only quarter. to think looking call on from I much. next we're off not week, start I'm forward and about a I And you a season. we've you in really XX you this very tell to hope have the but with enjoy how days quarterly our in bright of today, to

Operator

conference. Thank you. today's concludes This

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

Tetra Tech (TTEK) 16 Nov 232023 Q4 Earnings call transcript