Tetra Tech (TTEK) 1 Feb 242024 Q1 Earnings call transcript

Company Profile

Participants

Dan Batrack	executive
Steven Burdick	executive
Leslie Shoemaker	executive
Jill Hudkins	executive
Timothy Mulrooney	analyst
Sangita Jain	analyst
Sabahat Khan	analyst
Tate Sullivan	analyst
Andrew J. Wittmann	analyst
Michael Dudas	analyst

Call transcript

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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 a 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; Jill Hudkins, President; and Leslie Shoemaker, Chief Sustainability Officer. They will provide a brief overview of the results, and then we'll open 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

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

Dan Batrack

Great. of to you the Tetra Thank and we're quarter fiscal happier morning, how year good since Tech's first year XXXX we RPS sharing and with performance. We XXXX quarter call. on their record-breaking much, with our you successful forward Tetra Paul, results couldn't earnings and building just looking us, first first celebrated welcome into to group our greater and conference very be Tech. joined the our We're transition

leader full high-end you're to pure-play our Shoemaker. global today this the Hudkins hear from to lot Jill of and our the It speaks in is Leslie And a water to success consulting, and strategy on more about focus future water As cycle. outlook entire environmental strong. a going from both

data analysts work solutions who with is tool every talented engineers Our of led and approach Science scientists, our our day. Leading their Delta Tetra by leverage performing in digital Tech workforce

also on fiscal year-over-year. earnings rest share full guidance include outlook quarter are our a reflect see with will applications include of analytic financials international raised some to our strong the tools Chief our first Delta our our our net for make capital begin Officer, going while being a clients. Based only rate best-in-class for quarter. by to included we an Hudkins U.S. that overview performance Financial And an allocation metrics Steve that our Our overview investors, provide year, an and we the our report we've technologies but reference. I'll are and basis, on IFR our us of software and financial that strategy. water XX% per their GAAP for Jill revenue and Leslie increased subscribed the to today not we've our Dr. for services. guidance Shoemaker of of growth provide year And differentiated and overview the Burdick,

had the quarter a on represents first increased growth we first Our year. last $X.XX or performance year rate. our organic XXXX, double-digit that build $X quarter In results of XX% which results just fiscal billion, revenue the record billion to net

million the of per EBITDA quarter, in XX% high Our increased $X.XX. to an quarter share which earnings first all-time $XXX generated

in had of is strong from also which quarter resulted This which $X.X last largest new up XX% first billion, of our quarter backlog orders billion, year. $X.XX

now from like mentioned to you and driven for digits RPS well. the last by exceeds our alignment was from XX% less really joined than basis margin clients year. Department our of the end revenue growth XX%, client compared was RPS' year, providing that Work I an and of resiliency Defense all our us for extremely last quarter, quarter Tetra our last proceeding when you X increased by year. to Federal sectors X announce in of is more Tech consulting. As the of U.S. overview performance customers. USAID In double Federal first XX to XXX same pleased the I'm with share by up they on earlier, start EBITDA rising than January year. I'd And points by with of

and that grew and local Our we're this from areas treatment by call. you're work later be that about to Leslie lot hear more water the Jill XX%, supply a continuing revenues driven to in going the about organically and doing state in

up about mostly decarbonization, services. And revenues in and and buildings last practice, consulting infrastructure our our net high-performance year. finally, up This performed increases Commercial U.S. XX% environmental revenue Our growth from were permitting by is was XX%. was energy high-end which driven transition international in

Kingdom the Group to million operations, growing by In to coastal the the GSG our with Australia. I'd compared flood in the first international our Government the Commercial Now and performance energy with end International our revenue segment generated of our well quarter. together last protection inland $XXX water and continued Services energy the strong the like each in our are geographies it X as services, share Government RPS up to clean our Services included and you especially segments, a in segment. quarter, Key United of as margin for to programs support USAID growth was and as Group, XX% waterways programs. year drivers refer we and XX.X%

quarter all Florida, drove were first quarter across or year. last last busy across first of I'll responding XXXX Tetra which of were purposes, we the comparison Tech of margins For of than to Ian more the to year extremely in that went that the because our impacts note Hurricane XX%

year. at so least compare performance to was And a our a high of on very it basis, margin comp this

in Commercial revenue we a the Group, the net XX% segment segment, grew margin and delivered by for this XX.X% our or quarter. International On and CIG the

the the contributed to XX% the our like indicator RPS best a our of rate. I'd in organic about line forward-looking to see top did or revenue growth, grow backlog, discuss segment now significantly business. While at addition CIG we

on signed, already been before we receive we contracts As I where are X these of our that required backlog dollars are quarterly any our previously and funded from clients investor in on that's are authorization noted received these All here in-house. report include backlog. projects calls, we that based

Corp estimates hold quarter wins awards we orders included in than an Army remediation more just we and across contract program, U.S. our about include for AMPX environmental Now, billion $XXX of to PFAS backlog contract contract $XXX capacity the in the in United billion first restoration financial booked Better of future that Great capacity we program on of Utilities not the recent quarter orders XXXX. a the contract. Overall, do $X.X $XX million Engineers Lakes in or $XXX in million the company. Key Rivers added million

XX%, resulting As authorized was we that a new quarter up billion in a work and last result, in-house. high our year, first funded from backlog of $X.XX of have

the Now who from our Financial the more Burdick, I like the of over turn financials Chief first details some quarter. will Steve to over our would presentation Officer, of to go

Steven Burdick

Thank you, Dan.

cash now first the So to provide I'd flow an on like for our quarter. and working capital update

positive $XXX million, which for trailing up XX totaled from generated flows quarter and XX% cash months the So operations the for is year-over-year. were first

the key Now, income cash flow cash I other to And of further than year XXX% our from every by not same I and historical who X and companies many flows I'm found operations months, over say, the has XX for I results about exceeded got record. this have last as thought track actually exceeded decades. same researched metric, financial net our that income aware net our that more

So I'm has Tech really proud of do. what to been Tetra able

X markets last long first focus clients capital cash XX operations for we satisfied over significant projects over term priority. industry-leading average DSO our has over as in days. industry to also be core of and the quarter high-quality our on This are the metric lower results versus of days relative project we insight year. improvement resulted and working all in to working this as broad end Our our across that our consider And outstanding days at our an sustainable to all cash the standard a it highly from into high and geographies. reflecting continue XX an portfolio The make business flows of capital watermark DSO flows reflects perform work provides managers our of

million than Our net was net $XXX on a well ago. and leverage we when a much RPS year debt our and X.Xx, debt acquired EBITDA amounted lower to within target of the

addition, cash the have positions In of end quarter. $XXX at about million of we the total

continue range. strong sales industry-leading present high-quality leverage with on cash the well results and as within to operating So today, we we target our flows, execute days outstanding here

presentation, like along to present XXXX. following allocation in the overview capital those For now for I'd our

We both invest well-balanced and have have mitigate we in rate debt as to available a organic we significant and priorities. strategic to floating risk in invest a key look to in and liquidity rate to amount fixed mix interest acquisitive priorities

a technical We dividend the approved for have and double-digit dividend $X.XX a paid. XXth Directors a especially is in which where paid towards increases water which be increase is strong dividend want second the Board market leaders quarter, our in we and year-over-year with that to pipeline amount spaces environmental quarterly consecutive the our to XX% announce the this in our of aligned years. And are of regarding program, I the acquisitions, led last have XX

your support As for market in we I really a to buyback of have we was the the advantage do of revised significant that our available capital last shareholders our financing back in year the million our to XXXX that approved by portion want structure hand allocation these to you part support. want now quarter differentiated results water for discuss will really the credit still means, Board take plan $XXX share remind capital our to of with to for as Shoemaker consideration in Tech's leadership environmental I you to and our future forward. I'm the Leslie over going strategy to sector. thank call the all. pleased I Tetra And

Leslie Shoemaker

the water Tetra water watershed XXXX, industry-leading developed water that Leslie over flood protected set our first-of-a-kind Tetra the is across Shoemaker, this our to Tech and Tech spent solutions that worldwide. It advancement the has then rankings held Science Delta environment. in in water over scale. work, the analytics and models well company. Tetra our research very that with clients practical #X Tech's of growth environment on from scaling differentiated Hello. simulation, years Tech #X provided focus have for earliest Tech for and Tetra pure-play led our of clients the Tetra bodies have and protection across XXX,XXX in has critical years simulation rapid our Steve. the treatment, has has Leading and ranking consecutive standard is as Thank of as and to watershed in structures solutions we implementation from XX studies hydro the at water of us behavior water government commercial you, Since watershed XX with My development cycle beginning. and I've and for the protection name founding with offerings and entire

So Tetra watershed and followed treatment major by across and research think cycle protection work, flood Tech development, in and the phases. of full it We then and as climate works X water water navigation.

our services, like these programs regional Bay, essential Our $X.XX solutions. on of most helps ideas drive the at but climate analytical that represents phase, quality development important to Lakes the investigate $X XX% software revenue X opportunities Applying water Great in or degradation new water of us practical billion new we and we causes distributed largest the worldwide. phase, into as our contaminants, work that climate the the our by with the research climate bodies to of actually water the in root provide this cycle can Mexico phases. and watershed as in the the annual year, do, approximately decipher across the clients our essential large revenue, unlock distinct phase and new the Gulf scale work In well watershed of of far a Chesapeake our that ideas. In phase side-by-side of smallest approximately and with bodies. billion revenue working and and even It's revenue new water on the research impact research water the solutions of and

adapt Now, science increasing changes. the and specific these watershed has to of climate design underpinning further increased also risk-based the for our analysis variability to behavior in solutions demand

the water Tetra Science it of has at intelligence that scalable data new with other the scaling to and Tetra has Delta Leading provide Tech's we by platforms been It's the over market. I'll the that of our solutions speak managing the now solutions water-related to the differentiate that and of built Our success scale apply of Jill are the we success. Today, approach are also the ability application make artificial water practical Tech solutions technology to development we us. new our leverage do research providing it turn and in flywheel and water risk. cycle. The phases useful to in hallmark

Jill Hudkins

Leslie. you, Thank

and designs the the largest for is cycle, programs advanced and desalination the Although my industry and designing reuse Tech $X supply facilities. in most its me programs treatment passion water for navigation protection and for with in technologies of the Tech's consulting includes clients. water, by billion services and design barrier work Corps award-winning the and the of Tech's federal dams, advanced and as surge program, years first-of-their-kind reuse. Tetra of facility Tech deep optimization Tetra treatment in desalination have This Tetra you removal, using flood water Orange potable data which municipal, engineering federal the our the U.S. Continuing sewer to of of digital and XX local services with with of clients. Tetra PFAS District largest Tetra kind spent Tech Tech revenue Water I County Engineers. I've drinking includes including billion may constructed revenue Army create primarily design for levees planning, networks treatment value President, and water design for digital with including PFAS Tetra leader state, our phase and our treatment led commercial and is market water our high-end water We a of water for water for permitting leader know $X developed clients. locks, XX PFAS provide treatment for ever

We from has discuss designing cycle Act. to also local markets a research the to in phases and are water infrastructure government of market communities client-funded all the of competitors adapt many the multiple events. Tech's augmented we limited that funding development. new IRA the for all a lot or benefiting while like help increased and from opportunities, market funding our the frequency to federal our and cycle. When been cycle, across state, water of cycle spoke airtime to commercial drivers flood is perform sometimes work end X given of leader CHIPS early federal Tech X and water the are leader of solutions funding Tetra that water the of parts IIJA. Leslie the X Science by Clients IIJA, position in only is Tetra for

and as spend for NASA Tetra annual funding contaminant protection for in and such as as Department Tech include watershed NOAA for from estimated well of development. Market the clients billion federal distribute combination programs as River. Tetra global an more Defense, research Our billion $XXX $XXX sometimes funding These fund the supplemented restoration clients for and sources. loan than projects financing programs $X.X restoration by emerging user watersheds Tech's drivers established environmental of cleanup water estimated such the Passaic fee utility program billion a site-specific federal programs. are or These and revenues, their debt through receipts. include removal tax

U.K. water AMPX For will user program example, and billion funded debt the through GBP revenues be XX fee financing.

funded modernizing from protect presentation Los state $X $X.X and Dan. While continue billion to like I'd the of Florida's billion state to the and $X coast $X billion Texas Water high-end Fund services. through of turn has for XXX% spend storm events Florida navigation a protection back and now state is for of to demand The been Long appropriation. Climate Tech's billion the estimates level flood extreme Angeles multiple sea drive investing California ports change Beach. And and the Tetra to rise,

Dan Batrack

our water you and within and Leslie, entire the thank the market, differentiation very Jill, over our Thank for going water you, entire position cycle. much, specifically Great.

XX% the distributed of in federal the them which come civilian this a few place the election election be across United quite walk enter November. Tetra questions how pretty of we U.S. business how be clients about administration State recently revenues. may the Tetra we States, election to we impacted impact, depending briefly ] to the [ just represent see be cycle may And the about presidential in USAID company's up As Tech's coming by United to here each outcome evenly this with there with these of overall States next U.S. the outcome they're Tech's would Defense, components start when an on we agencies like of and the November. the Department. I'd Department of and through received

with a an priority So increase administration approximately to support to party our or due stable security. that national I'll current either are under and the have XX% high from defense with start growth typically the need essential revenues administration to a political likely under their have Republican of

XX%. second second or The the area

largely programs Our essential. civilian are agency

services bipartisan we the are they Air and no provide our optional, in the example, Aviation just not require impact client, funding we and For on and we support, the areas and largest have Federal Administration. programs have these see funding really traffic programs. civilian that consistent to civilian growth of that

international historically timing Now are to direct USAID to national contracts or the seen administration. of that a by and security duration a years long we've linkage potential contract be we tempered is it the to change long U.S. State X that we When highly of interest. Department, have interesting typically does impact awards have the have. impacted the these is by XX in But locations, to the go

not discretionary as they're might as So many consider.

the the and Of unaffected not course, XX% any of relatively are for revenues are the of see international U.S. U.S. which that we and state the each comprised our government of presidential local XX%, but by that's these, the outcome XX% with commercial, work, of remaining election. associated federal

Republican we year So and services continued the administration basis, outsourcing second revenues elected, our either funding increase in regardless in of government the present to of up the collective increased Tetra for an administration guidance through increase a quarter now or a on XXXX. our Tech's administration. I'd under like guidance under fiscal from a for see federal Democratic

range revenue per $X.XX to the diluted to for million First, of year fiscal $X.XX XXXX, $XXX guidance $X.XX associated quarter is billion of second earnings our share. a an per for of net with share

$X.XX. And represent midpoint to on look the for if X an entire a at over XX% this take I've guidance GAAP of sorry, guidance of per of the range you increase diluted a the net $X.XX and midpoint and with the year a billion For following -- earnings over a just at $X.XX $X.X I revenue XXXX to midpoint our associated of along to fiscal on a would a of XXXX billion if graph, the note, net revenue you're year, our is record share high does increased earnings XX% midpoint webcast, the of shared.

assumptions webcast we that see do on the have Now, you can here.

intangible entire charges we and share, a $XX of the our of included in quarter do million provided per For are the anticipate on or year, and a of those that summary, breakdown amortization demand per XX outstanding. In presentation estimate the with we approximately do effective $X.XX We guidance. see year a in markets. and tax Leading XXXX, our differentiated for as shares strong Science diluted XX% services the we and year fiscal rate we environmental for begin the water million total both

Our focus results strong strategic with new environmental drive records set services water long-term today. and profitability And growth. share. And first revenue margin today that shared on up that pure-play you are call quarter the for and have continuing pleased net Paul, raised entire entire the our performance XXXX with our year to shared And per we've both with and and guidance you questions. open I'm for we've to like would I revenue earnings that, to for markets fiscal

Operator

first Our Instructions] question with Tim William Mulrooney Blair. is [Operator from

Timothy Mulrooney

guide. I the on have morning X this

raised one, you by midpoint about range The your of net quarter it looks the beat like million. first first noticed We you revenue full $XX the million. for year $XX by about guidance

you talk beat head full you're about the than year strong what's about So by or demand into excited raised as XXXX? businesses that you you you seeing confidence? are the What just quarter. driving that first more Can

Dan Batrack

more in our that thank the backlog quarter. point to in than and that have did I the I that reports backlog, show Tim, commentary these commented Corps based on Tech question, our new and the yet full like revenue. was a gave $XX fact, raise commented were orders our while tabulation its to the that that up billion, contract had beat included or I tracks to Tetra And of not and the won our examples our million. our for the new we gone what noticing tell we representative first added comment of would book our Army you much backlog, our capacity out on would contract are $XXX new U.K. work first in Great $XXX awards. new in a $X.X backlog the over it's don't much even few of single in how we on with quarter, And at you I quarter. of new in -- capacity Engineers way award wins into sheet those on And our of on our of billion our contract I presentation, million, win in backlog I'll while added nearly that

of to of federal are primary won in number programs very the with with Australia local programs a contributing the large going States others, and government, both as the we through United state, new many we so begin really And the these the to year. awards, large U.K. and the being move rest across revenue

So records continue to to through and We actual I things insight are we Tetra better. are see feeling things and some new programs to up hitting or going particularly will is pretty clients think awards, be new going that year. with not tangible our We've starting the awards, to that a new begin all-times us, RPS. synergies these the that as just clear with new getting of got build move by based contribute high that to new backlog that Tech single are on with for that the awards we're seeing clients executed solely

way, cause quarter. that the together you the even So more it's the than XX%. the outlook really in had come the us see And we to those by for raise growth have the items rates first year to upper in

than it Just better we felt adding those that. numbers, was even

Timothy Mulrooney

Interesting.

midpoint, the Staying ask, looks in revenue by have is Very just guide, EPS guide. what would from mean I than wanted Okay. about this on at like full we increase the clear. the about it the guide which expected greater to idea $X.XX you year raised your I

I this that assume expecting of that implies helping differentiated, about kind you what maybe I doing, think which also Can just talk that's some you're guide? is year. drive margins stronger higher-margin work that you're that

Dan Batrack

good Yes, question. that's a really

years, higher for provide continued followed know engineering Tech and that the we not of I do for we're But the the on the is and because our seen clients. would work and the there maybe allow large moving and very that more engineers. more by we're we work of E for we've leaders, have. consulting, thought many I consulting to front providing earlier it's Tetra discussed shape differentiated And a for business technical you and to isn't if for services we scientists, number more being a support, work, very end the us billing that C rates consulting necessarily the engineering put you've by lower but a to markets which of that general it's our think our earlier have the on more quite professionals individuals really, and different often that engineering -- in exist I

average approaches their actually our on are move ever We're And value not expensive. by our rates evaluations the up that we to earlier So than of charge-out the clients more as portion. outcome programs. their to going and providing more we're it's and way,

The carry second say going margins. would a it's differentiated and they I up, item, so is billing rate slightly higher more service our average

and internal tools, differentiation I digital use say we utilize the between cycle. the of So in water area And the that's have the coming revenue in that we is second tools would the margin.

speak those. Leslie both to and Jill heard You

the do more a work higher we So as converting to margins. efficiently, fixed it's price basis on

put that I early through item an uptake. it Christmas -- for we the very present is them services. actually an final and say directly year for December. services At Tech have down and of treatment subscribed areas it have its on the software did me to the specialized was optimization had And where for come one water get clients is are have not website phase. Tetra services to beginning this contribution. And And to seeing managing out website, go "marketing" And was reported become so our had seen watersheds, systems we've larger actually and -- subscription packages clients, do did trying We subscription team I that's to other a on would that we've for but being nascent and a helpful. them in these we're these payments different our sell that

So small, increase see begin -- take don't increasing, for a year. earnings I'm it's call it, to this EPS certainly, revenues for but quite that's expansion that know subscription I but glad self-filling organic, to this reflected margin it to that in if you actually does an contribute still I'd our see

Timothy Mulrooney

I because back that some it's know questions others builds a at after excited itself. the on I'd first ask traction lot you're interesting. that but get but then that, to to I'll and others to love That's see of gain questions. I'll harder traction, you ask But the -- it gain let in queue let

Operator

question Sangita is from with Jain KeyBanc next Our Capital Markets.

Sangita Jain

these on bit still PFAS -- year is the with ramp a the can peak the ask had a and quarter if you Are little awards little thinking some it this of faster? Dan, I year? slow Can you're seeing AMPX nice this Or you bit you pace awards how materialize? on amongst recent wins. of happening next you a elaborate

Dan Batrack

a I'll peak Well, next make year. a late regarding next overall year comment or

on XXXX, think previous the probably in we a and did call, that particularly expect a Jill I programs, quarterly have both We spoken, I've IIJA, stimulus U.S. see know late spoken, now. peak I to little of so peak water a is a and next for or it's management But over a United their from year U.K.-wide to asset year. unrelated really AMPX a utilities program Kingdom

in maybe essentially can beginning to the to our our U.S. certainly, years in both bring in just the case, leadership before to, of we than the going hold And but making of that Utilities and all is the herself have client many under presentation U.K. And I United to for the here think all that technical this maybe is more you words Jill way Jill the with for will tracking a first I on successes AMP it's over was to say but cycle. which XX lessons U.K. in this this cycle, I importantly, Friday there Utilities, we best Christmas, those really just shortly. share few participating presentation bring United we and the and more clients quite is hope, Eve, commitments learned I'm Christmas to I of that program, of, of closely, their X-year has So different just pleased up here have RPS can -- continue the Jill the the It's see would all AMPX this. a contracting IIJA, have until the

Jill Hudkins

Dan. AMPX U.K Sangita, great water. And Thanks, Yes. question, on

U.K. what the be procurement funding water the in frameworks the as U.K. XXXX, and lot mentioned they my contracts multiple cycle. water our utilized the start planning ready cycle going for XX spend, Although AMPX. in April historic billion, remarks, we're call from is AMPX to also being AMPX seeing is planning AMPX are officially in or water existing A the starts clients acceleration which of out I start Xx which or for is the GBP spend the U.K. to them for

capabilities high-end client that So we're very relationships and water and both of resources the talked services and and with about earlier overflow bringing management call. I along excited on Tech's the in leadership industry wastewater Leslie RPS, water about Tetra reductions

Sangita Jain

but shorter-term much I the one elections Great. you can avoided full the That's very helpful. a is budget. passing on we've It more. ask thank outcomes. more and question. shutdown, If breakdown looks the that still possible I a like But a can if on Dan, ask for not clarity there

what a hurt full point get several Like a short-term CR opportunities? we worry do sight don't we next of at So over if months start budget? into funding does situation this the line your to of continuation

Dan Batrack

at Tech, dysfunction of I've spoken this, resolution I the we -- good this I That's a times the of pretty process. continuing quite in really personally a here And a to few over years ongoing is funding past think good outcome. an Tetra few because unfortunately, question. bit

outcome. In good really fact, a

to of resolution the of to environment, means climate continuing that areas fact, the change water, So agree and we'll before. And include clean And have for the different have described in or tailwinds same existed the that for for the us. that a fund executing was in the areas administration do mitigation very flooding they it we at extreme administration much strategies. disagree at appointees as that year that or events that case, allows Biden before, a the with clean year this in highs. many Democrats priorities further -- it for XXXX the priorities are for Those they record in level

one just resolution. between and see any they where and CR But that continuing resolution. actually end that the a do now a milestones a they have don't or So do of fiscal continuing negative assume us. I these various would the has year don't resolution impact for continuing I September XX we

each how take years to a place of But before ago. might this?" that our it's do In can these XXth But funding threats favorable one a outside if go back have place, adept at pretty have so number We'll where the taken see own that funding you for a -- fact, government frequent the in drama more all they But we've comment their of this, respects. issue. The dysfunction of shutdown. temporary I I We restrictions. that in really more this has the I and there them. will well lot they when different disappointed prepared working facilities at that's approve look back years, don't put become go that's see thing first been all we're time as much surprised to Gingrich goes You it authorized, of to were was "Really? quite a we on one remotely clients with already that work have way the many would an and hour

impact that minimis of think activities uncomfortable another do these one de our or do go short-term the so, to actually in or that impact be unfortunate impact a short-term ongoing month to may with through and we very be shutdown. in event the respect so And they would measured

it on, So implications to not can bring hate different I want the we're about a that company. what go I do say as or we unaware uninformed of to but never far,

Operator

next is Capital Sabahat with from RBC Our Khan question Markets.

Sabahat Khan

so some a as contributors I XXX-basis some color maybe the maybe of in you've -- uplift bit far to earlier guess RPS around bigger you of about and margin integration the talk of then the what bigger are you And Can margin the point provided that maybe the as of of improvement? in seen. over and than materials the end because next which comment can add X, Tech. even to legacy margin years? Tetra do that, maybe X think profile that that buckets the been like still maybe on margins to tail what the are And the past longer-term RPS maybe I the things go, has higher just can well are

and so I long margin just of the So out kind want acquired term, please? medium kind of platform to story to you -- for on lay near the if maybe us, the can

Dan Batrack

which they to them Phase which structure, I'll mostly our with efficient kind to us. mid it, the call and year term, mostly office, cost I'll Yes. We and of I'll and near, X, more having move systems, it last ERP year, on this Tetra cost I'll X Phase And were X. really X, was on moving their so back -- was synergies, it call long first X go focused was moving Tech. were

was cost them to So up XXX synergies, to with year. X% this mostly somewhere entered the margin the XX% points, basis between say, I from moved would associated and that X% that we

So pretty operation, them ERP portion took and moved really discrete, which U.S., entire U.S. X/X about those and of their small finite. We U.K., our onto the system. were very is

doing are we busy quite that. So

finished most process cost X/X with say I'd X. that So we're side, I'd what's and on of the that call Phase

running changing yield contracts. takes basis and having from cost, the on systems, to will Tetra programs take similarly more run So -- Tech, them the from that's portfolio the actually it XXX us is X actually points. Phase our of their

continue actually and and basis actual had and with have may that I've from on that look that of revenue or revenue comment contracting not you've margin before on exited EBITDA dollars respect some that's first type work. we is the made relatively an fact, say is to not acquired gone one we the but would addition flat with when carry And in And through basis the has from And business we them. past what I unusual the in risk the down, RPS been that carries to contributed areas work that dramatically, that's why have would margins think I mechanism, seen. a have that they've up subtraction. quite because

high-end think helped top which it bottom you in line. that I revenue the it revenue focus that for to not we've them our having believe will on seen I contract the is saw wins, drive synergies differentiated process we're X with spoken Phase both -- increase services And is. I've by guidance in carry higher continue yet, portfolio going think and along I but And what margins. shaping that seen our in we've to

margin what X would federal RPS is We're collectively together that RPS and where XX% at call is So from this I first call have, actually we'll and the think actually a overall high end moving Australia work recognize we in industry at the higher, not Sullivan, the I advisory the technologies inherently to example, that's going as up, Phase the I who's I over have I this to leader, X. I'd from start that here with do Tetra the does to lower of in led on we that -- we'll an have leaders business XX% services. end one say more government, that's consulting Phase but are RPS work and one operationally of And year. cost move really some be in is bringing dampened single to subscription the cost that year, of as higher our and margins do think the synergies which with off think of have watch the I we XX% Meegan advisory going margins company. expect phenomenal margins believe including that Tech. in this have. operationally, Delta Tech consulting. And just I entire by X so them Phase grow to with XX% executing than end even that that as a region, execute quarter. Then we're to and not technologies another good move division seamlessly plus not I'll I that and the front-end They this particularly that in higher to that will business well far what have we Tetra carry help, respect think, Tech's they that Tetra

So company. with I think, associated very Phase I if at it's I out the want XXXX, you revenues to will think would the that contributions think fundamental call term, move X it, margins to going be that you to the on it RPS, a consulting big the of to be in longer

Sabahat Khan

the improved opportunities you related can there the the some to then trending? side, business kind margin of is what maybe maybe track of kind the improve combined you how or have combined to the are Just perspective at for give Were maybe an RPS? on the initial maybe utilization for been utilization on sort for And your business? utilization Great. And of improved the that's combined plan to how going understanding platform? might of --

Dan Batrack

say we the activity. operations Tetra I because from we legacy operationally, don't would don't Well, Tech, collective the differentiate at we --

we built. XX% So we've about entire take if target, and when that's you what company's payroll the talked

would with system, respect up utilization Tetra we it Tech's But ERP level. still I have it's Tetralinx actually system Tech's to ERP have seen another we go go So the approach that on to beginning say transition. in and X/X have that call RPS, those the here. Tetra that to migrated But to

not a system. utilization. do as they are Their so have common not one And as systems Tetra complete state-of-the-art on They're lower Tech.

So lot they integration have that that of utilization. down a take place activities bring

move the So the platforms. move -- throughout would RPS I onto XXXX Tech we've as year Tetra watched rest we we of as our to fiscal the of rest say company utilization remove up level the the

would Tech what of I want pretty say our and about XX% to highly for RPS points make to call basis. would to a say margin legacy systems still investors I'd use a XX% to you moved or X/X just if the use XXX we're make way, XX% has by remains IFRS typically Tetra utilized. of up a if international a GAAP Tech EBITDA the about translates and comment Tetra X to basis. a I GAAP basis probably it's percentage difference. I NSR, on points clear, you So

as -- XX% RPS standards. But of transfer some you systems I add full international numbers our our to over end don't we get take basis business. if compare want can them their ERP and of this points them using utilization to so our move the will you the it until So XXX last year onto and in think

sort So timing utilization staff. of the on our transition that's and about the

Sabahat Khan

here. could one Okay. I more Great. sneak if in And

your years? alluded you're that making just subscription X you indicated for maybe you're You outlook and or can. some you X, some that model meaningful next the much the to support are a if expected. years, now, tracking sort And than next You of share thoughts to just what the marketing maybe How doing plan of not Can but big over be maybe strategy few that with or for the on growth? business. could digital you progress doing better its

Dan Batrack

that our IP typically picked and growing or technology -- products up, number of It without will has has a clients software is clients. well I to software these the I the Well, want to I've platforms that funding patents of become we're of to think and paid But a develop. a spoken it say, out they retain other growth funded applications for rate We research that by our Shoemaker the applications, reference clients want pushing work and taken anchor clients have the to have it. I were call the we a develop itself. And expand We more, it and on to by growing to development that's company. organically our spoke that own, Leslie very on the well. software trademarks you're sort to us pointed thing the investors. one mature do we to would software bit is as nature the this its use clearly "Boy, truth." not that some And it, the

our referred out and without market the industry, fact, it it it. up state have gone interesting, other and That's to what's anchor is clients colleagues the in In subscription having our clients. local of some picked

So to we're we're own -- catch-up maybe growth. playing our

the roll as I recurring expect XX% to with the subscription all come of of X% services, our company. and along overall out far talking metrics somewhere about As EBITDA that to and subscriptions of between earnings rest or visibility the of

X,XXX first it's instance, I with translate selling in some revenue. the in selling would And XXX,XXX. But that in the see more well over say than next think areas, million I've $XXX shared subscriptions first to others, I $XX million some is, XX% X,XXX about that I'd think difficult we're although -- already. a margin. selling We the to

this to we're to of so [ the transparency part of that a in all my it's the X sharing business. to And say formulaic be before And personally, indicators, segment disclosing, we with have in hit of ] individual we on would X years all the metrics first period. and like financially I'd key tracking complete or goal respect performance that the industry. KPIs it's would that financial and that performance metrics our

XXXX So end I we're earlier, own. that if it don't towards think I growing its be had this to but hope it's because level. that able maybe to we And would on it's at is a we'll how disclosure, the with respect play of full catch-up XXXX

Operator

Our is with Tate Group. Sullivan next Maxim question from

Tate Sullivan

you a funded, for the treatment about Okay. in talk PFAS And -- a question Jill County mentioned a Orange started -- bit opportunity was And of facility? terms and can your in facility do the of that please? orders I a PFAS the Great. actually, think on U.S. to be how you lot

Jill Hudkins

Sure.

water treatment I water the -- treatment U.S. my our actually comments, to that County mentioned. programs, Water largest District prepared directly comments, multiple program the including facilities, Speaking facility the includes Orange multiple

water work. had much between the and water leadership really for thought we And state with I in of So program. $XX municipal in been District and revenues for predominantly and as will and Water Orange annual like have $XX historically, growing to Defense the our somewhere local we opportunities at federal-level see million us more or expertise. Relative revenues, of Department and bodies. and regulations, That's million PFAS PFAS forefront opportunities that puts of finalize contemplate think County facilities, we characterization remediation the

Tate Sullivan

billion? you is U.S. watershed and of ago, I $XXX management think, market still market watershed of just And billion the -- or that that presentations -- $XXX a a PFAS opportunity maybe couple of highlighted of is the that part

Jill Hudkins

Tech not contaminants. just but in refers in emerging microplastics and leader multiple -- other on Well, is billion compounds. Tetra and to a pharmaceuticals Yes. emerging PFAS, the also $XXX

So the you're -- the was see for referred $XXX the and market side. billion just and billion the not emerging on what the future we but the municipal that opportunities we market, the to, treatment also watershed enhancement $XXX as multiple for combination PFAS of correct, see compounds protection

Tate Sullivan

it? sort you opportunity PFAS expected summarize as or expected? work, of Or you if this any Is than could you delays getting moving in faster

Jill Hudkins

as as on myself, when the has whole move my spent would treatment as Dan final I is career which is commented a in water regulation. on once expected, forward our well arena, as programs there calls having clients prior say,

there's And be going utilities to. so be the conversation final U.S. until requested or continued for PFAS, there EPA to will treat levels to a required that about is regulation

so side are XX point, I it's the And another another at on for months And to be typically the think be -- compliance. EPA mostly expected. for established. as It's watershed U.S. going there will also that characterization regulations until final

Tate Sullivan

press Dan the in Okay. or Great. the you either And a capacity. Steve, sentence put just one in, to you mentioned release about repurchase fit -- more please

a Just on thinking repurchases year relative please? point RPS, from this are to at how acquisitions you about

Steven Burdick

as range, value share long-term complete X.X on sense No, and And we've do allocation, capital to once starting where years Yes. about does as think of from leverage or as for RPS, I over our we're as figuring think hold. financing we for a that the were the we our out kind little a our down brought noted a to preparing people again and make ago midpoint explained our repurchases to to shareholders. put many between we

we starting is to bit. are quite we've think down that something that now a that that So about paid

why that's so that's there. And

Operator

Andy question Wittmann next Our from Baird. W. with is Robert

Andrew J. Wittmann

just guess ask on I'll last Dan. that build one and I

would there You mentioned doing? you're time else the pipeline, if take that as way that asked guess that it's do I'm are that guess because that management to far you is larger I are the in in there the bigger deals typically you enough look M&A that pipeline curious, RPS can I deals that an just opportunities along at something would is do. strong. larger I consider implication willing now

Dan Batrack

of great a X,XXX an XXX record have That's track between question. companies and people. said I incredible we've got

XXX if normal diet, you'd XXX what's people, people. people, X,XXX So we've ask people, hundred our had

of in then acquisitions, that had X sort few range. our X size year been we've are that to that's larger. So acquisitions And X a a

X-plus Young about with a that out, X,XXX, So that X,XXX White U.K. X, us thousand people, had rounded Coffey Australia, people Green, X,XXX years ago, then was we've in few and people.

are respect largest, Actually, RPS RPS. This execution of of smoothest the moved has with all has the minimis the arguably of with but it's gone each to to of operations. it's different areas. gone our the them, within integration out been have these fit is that of the sort say this. I are I So time and de to say X would management's -- means in that years. Steve's and my actually time every time there that X There out that relatively would others smoothest, actually respect into

in And time. know haven't are many wouldn't Our together. they here respects, working for a period of people they long, been long

us. And we've something at integrate means with whatsoever inhibition no two will either I respect got be $X RPS even and a say billion of than manage more So there'd that they larger, entities the resources. ready, management's if to successful would which make to of and year else the it, tell you joined of size ability there's the I it we're before or were revenue, it sort

So we're to ready up go.

happen, SpaceX. our strategic to X shoes, X We're actually fit It's to does to it direction. we're to compete going needs to criteria. got to -- it going going fit maybe our to respect making not start criteria. strategic with Now got fit with It's and not

So global #X leader in respect we water, to to want we we are environment, the we want to today, know we infrastructure. our be further that sustainable And We as with the have what do. ranking. distance

company, task that strategically, one, solutions adds bar holds that returns best scientists want culturally, in. Number and me and clients, shareholders. fit we support it to which to engineers our as got to structure we've the last they financial then it so and to the for criteria the So that needs that those with make our X differentiated technical fit be Steve and accretive that best culturally none. They to providing are are of the to needs want the the technical it company criteria, be to our time sense value by two, if shareholders people to aligned, front-end, the for financial actually all corporation they're

to, we are that are X, if we So find but companies that make out X, the those like busy anything to did are RPS else, with will it respect there right go. with so them actionable. But we ready X. with include we we're or opportunities, meet I'd intent. There still here Steve's And comments,

the company. no the the -- entity buybacks for down we to going intent we're to company have shareholders back a in leverage its take We don't entities there's to through our the join will to right strategic move find either through action that M&A the we event on, to that dividends deploy have sub-X%. If don't we capital or no

goes capital it allocation we ensure back going use are to So shareholders. that our to to

Andrew J. Wittmann

that I kind there's least but That space. for while, the to equity and I'm haven't it that the environmental because private answer. moved was at before one another just thorough or asked going a consulting ask angle a consulting has just of I guess been into on in

the regarded has buyer, your grown larger while you companies I'm these buyer curious, a pretty look could I'm do are banker, to from companies. I -- today, that of of some the in a to highly thought they more just think to an just we've your as think? grown transact, never inside you've size. Tetra company a company curious last seen on as good process a auction now they Tech? than kind be Or fit has candidates, that while, been

Dan Batrack

know a been that industry it while. really was in fortune yesterday, have only didn't stood We professional a had PE good for a -- that million the license. It's fortune in ever years. do great thing I was And That's to recall seems the engineering like Yes. this equity good a question. when for I've private changed.

nobody it's private knows equity. engineering, it for that -- professional only PE Nowadays, wouldn't stands

far seen Now back, over the I but it's want to the increased equities if go there They remarkable. you the roll too don't wander required on XX%. could rates, They lever over teams few past I saw pre was cost some That management Xx, up thing I've Xx. no of this, capital. interest go private to XXx. to years,

different in would it changed that that based attractive that look And to metrics, dollars become and what's think sell you're going and past that go you're no I Xx it years, more, X leverage up out-of-pocket or to they I've in seen in Rollover see companies on even it the But less. industry these what off-line all buying may are. think or valuations to if have who take I all may call the are smaller, happened for I the make not and this -- dollars. familiar is X with dramatically. And see are us. maybe fact, with entities as up private appropriate essentially have some equity become And industry, dramatically. would not what equity into of The So down I less. break and through has sorts could details, components the end having for you'd those overpaid

seen I actually go that don't team Now, think try they'll I've say to management's X. auctions, but I to want

it say a overpaid it out could is of equity they destination good and to management to private portions a need company want can with nobody say a investment a think when can shareholders, where Tetra an we help I where to So be the Tech. go And for period. Tech, they win-win actually interact equity be they where career, actually Tetra private seeing also monetize for And than a have for go. us I'm teams better has

a not where number auction as was may sub-X%. yield that So be they it interest were and as return, to pay you straight-up because it when a some higher want large flip rates viable

Tetra we does it So maybe at, you were here than at perspective the Tech. detail little but have looking bit reflect a more

Andrew J. Wittmann

appreciate for one. I that the thanks and indulging on context

guidance? question, to up wrap you amount for Ukraine second as in Steve, from Can me. quarter of quantify you technical Ukraine the any in maybe the that for you well net a quarter contribution Just revenue the expected as

Steven Burdick

Ukraine. right that last the was... it $XX was probably quarter, In around Yes. in million is from came what And

Andrew J. Wittmann

That's Sorry. gross or net revenue?

Steven Burdick

about expected just what because was won than into that $XX late million after we quite released a And had more earnings. Net. the were going was quarter there that few contracts we

Andrew J. Wittmann

Got from any expectation second it. Ukraine? quarter contribution there revenue And then is for

Steven Burdick

are we included continuing, contracts -- in that Yes. There's guidance. our that's have and

around is Now -- million million-ish estimate. there, to $XX our right $XX

Operator

Dudas Michael Our with Research last question is Partners. Vertical from

Michael Dudas

assess doing and of and renewable pushed in Just on some wind talked and 'XX the pulled energy work and the you -- it you you're kind call bit of space. RPS in some quickly about lens on going on updated that volatility of here the some assessment, that's -- what's and of been Maybe offshore thoughts your about a as in been the last internationally what some the through with North America.

Dan Batrack

start four really one overall us big energy one. is renewable I'll small Yes, question. a it, call and, ones for good with it's

hydro solar, of bit wind, onshore geothermal. and little it's offshore a So wind,

supply on. And environmental labor, is items truly of energy, that towers, We that's So their We've on and monitoring of for compliance a no volatility, availability increased portfolio code primarily has that's our turbines, sure. things other costs created water that which they're -- do and doubt, our some the we're of construction that much areas chain, focused activities. on-site and has permits the renewable up and quality engaged really like do not for the support meeting gone this.

doing permitting of most we're upfront the work work. So on the

them, canceled if support to it don't programs of them tabled to -- have better. the So looking of I been that other make number developers sell -- some word the actually provide call I'd interesting. We measure financial is know that and or did offload, or may a the they're but their it

that over work the given so a us all And has to do again. chance

over two projects So been what project turn into may rolls projects or one if has it three again.

So turn through don't what us. pretty good as impact was it a the item. much that solar. a help big for challenges changing upfront a can the turned think is on permitting economic I we difficult power into lemons that because locations. We've a into respect not of lemonade or that clients can been But It's us, do generation certainly seen something developer say seen the actually number We've interesting to misfortune of into to for good interestingly value fortune want work. for not enough. on yield that we a hydro. It's process with situation different actually quite

comes power has half hydro. renewable overall about know, generated just of hydro from you As across generation energy it the America, North half about of

like the most think recent is I number XX%.

impacts course, gone for fisheries with of associated And impacts us. push well others. to So the that's big environmental and for

taking Some TAMs have said down.

imagine the to of something to number technical endangered hardly advocate. are can everything You we with taking things respect species evaluations, big respect else, down or permitting fisheries, what with

can a it work be win-win. think doing I with fish We're lot passages. hydro a of on

river you generation the actually systems power along you that maintaining across or while for and passages North expand fisheries can restore such how So major habitat can include fish still flood control America.

really RPS in gone us We've here number Phenomenal released that's of either won or by actually the believe, in not we was with the for and we've Australia had onshore RPS offshore a wind alone. a been some U.S. we us. where leaders U.K., of well that have initiated, really advent the of Tetra people Tech we've lot Australia the in thought the done joining wins and So would well biggest in of that press big wind have

a guess being saying kind And more and But renewable for I as online renewable little through for studied does as being on about us. I I'd that generation more wondered power not of I into around evaluated say bit. constructed. I'm up work the So translate bringing sources. -- energy see balance, there energy

Operator

the This now to conference the session. Dan Batrack will Q&A to over conclude. conclude turn I will

Dan Batrack

translate water flooding all and to are to remain know following into analogous been environmental forward appreciate aspect of and that quarterly I the do I the process the for expect day you following Tech forward I in, and today. getting water treatment industry week. research there's morning in some Tetra we it may Tech's team. the and on questions. you new and plant individuals systems Thanks you. sharing great other you of the our application to us really entire hope and I one cycle. I to little somehow the all or or evolve Tetra appreciate and and as introducing one entire Tetra in and we in that treatment confusion current shareholders. water with they rest programs Shoemaker from navigation for development presented are a to dedicate and with professionals assure bit to Thank sharing to you have a the others higher and for call and for pure-play here. to today's their your that have thank business our margins and we of a just to they're next appreciate those Paul. And hope thousands And how water all I magically that the turning shareholders continue insight collective of that, of on technology we on to coastal back to way for much, that, look the Dr. value interested up you Jill, Tech, on and for careers this and entire going and and cycle, call to of being we call, this have exactly across being very by really board. And heights us higher into details and transform thousands to I our your which look Well, report that I that talking to you thought growth Leslie clients more our details leader, it

Operator

this gentlemen, today. our participating, have Thank and day. all and disconnect. parties a nice for Ladies you conference All may now concludes for

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