TTEK - Earnings call transcript Q1 2025

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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 Leslie Shoemaker, Chief Innovation Officer. They will provide a brief overview of the results, and we'll then open up the call for questions. direct presentation. Today's to about discussion and expectations. to statement safe future like financial today's in contains would your the attention harbor business I forward-looking statements forward-looking significantly including uncertainties, risks the described periodic projected Actual SEC. risks Tech's the from Tetra filed may to various differ in results today's reports statements in due and those with Except its forward-looking update no obligation as to required by law, Tetra undertakes Tech statements.

presenting are In appropriate some in management addition, be non-GAAP the of reconciliations will as section Instructions] GAAP measures Investors financial website. [Operator posted financial the references, Tech's since Tetra

turn With go that, I the would call Batrack. Mr. to now Please like Batrack. to Dan over ahead,

Dan Batrack

Thank of eventful far. of good and fiscal January month first year you XXXX call. That's much, quarter very our earnings Paul, a morning. so Welcome very conference to been

Eaton a weeks And did miles corporate over were our way some that some evacuated. fire right And X lose mile -- about to County. that Tech safe. are headquarters do work Angeles in our occurred Pasadena evacuated certainly and most here of send fatalities headquarters. away their of still there within all today. both until were here were our condolences over remain those Tetra in ago, the Unfortunately, here fire all still fact, many, staff many Tech staff But in in the unfortunate the in little a Tetra fires. destructive importantly, struck up the our of the Pasadena And because Just Palisades headquarters in of Los from homes XX an equally the we

great Los to Tech from Angeles a staff not and to start was just impact throughout the Tetra a County. individuals personal it month So

actions. it President they their contracts in implemented rapidly their brought has it us bringing adjusting days Trump and programs, policies, been as And of other the to incoming orders ago, of mandate XX his through are line areas aligning are with government much Just their new of administration. executive and to inauguration they're the and the January that

week, our upon of most In few have of embarks on foreign for the beginning while ago, administration review a for these days, the existing put all development hold been XX fact, a this up days part, contracts. just to or all just USAID contracts,

Now temporary that lot change government while seem may these seen of we've the like in in it's from a shutdowns. industry, what dissimilar not

programs Congress. hasn't We have budget through been typically on quite at been have that put hold, comes quickly when arrived seen a

adapt actions, the seen here at And Tech's marketplace in Tetra a executive or in staff net form or has we always have our quickly. move so respond doubt, wasn't be different change, have disasters seen quite quite to whether effect our with maybe respond it's no staff Tech. other and But we to our our and but this aligning mobilizing to similar Tetra ability here to it fires priorities. or hurricanes clients' been and to strength can the in We

and are them programs these actually ability during is put staff high high. other on extremely periods demand quite in Our the to

be water in to items. such infrastructure other place demand such it clean, for a disasters providing as continue be supplies, that in board the very will in resilient secure any future or across environment services Our not putting and healthy impacted or regarding high designing ensuring things the

additional year first remarks our and will some presenting first I quarter. Financial Leslie quarter also provide had our Chief the for XXXX, be our I very who outlook on fiscal you allocation for markets. But with financial who I'd performance today, Now a first Burdick, to have details XXXX. before Shoemaker, I our We we before to key year on get like and of of providing of the Officer, or get -- me will with strong growth drivers share to company. results Dr. and capital fiscal have Steve beginning our

achieved new not but quarter of results in any quarter, and the in points the the company. for high For perform entire record first just we results we the record quarter, would for normally history what

to in In XX% in fact, our the the it net to revenue, for year history. record prior again, revenue, for company's all-time that's which and was $X.X any increased billion net up quarter, from an quarter the

I'll XX% income was year that note, a increase the the of record by million the operating Our year. high. from an a ago, for was way, quarter, And make prior $XXX a

really having revenue would large quarter, for marketplace. company. to for in grew up segments So present impressive our this discuss the up through the here the that's Both the This quite grew, course, XX% significantly XX% of in more and strong even above was $X.XX resulted quarter year an in of contributed first XX% over by and last being with previous our to own to backlog and of outstanding in this was performance of by income performance it quarter, And for being from above first it the to segment. all-time record like the company. this that recognized quarter. year. I was were very the And and impressive quarter $X.XX our high quarter billion, first a all consensus the of from which earnings first that provided performance per our course, guidance for increase range share of

Group ever year-over-year the For GSG the And over first segment is $XXX million. its quarter, million. this the a to GSG we've revenue XX% quarter $XXX increased segment Government first had by or Services

So it an really quite was accomplishment.

GSG's work for Ukraine Now USA the client. our largely The GSG for in growth by driven revenue was higher-than-anticipated significantly generated of a margin margin XX.X% quarter.

extremely to contracts important U.S. of critical the that lower in been work, have contracts. it's margins successful supporting government is this and the carry mission. The the this nature quite reimbursable While do we cost due

quarter have Thanksgiving, as Christmas for the other in work If you did seen such extremely that of first the about Ukraine where is quarter, last times would U.S. the have at we and took GSG's this we here which you out off. the year margin XX.X%, strong holidays

our company. The to be International that. Commercial above points in basis up between XXs XX% of segment which government like in company. I or our line a at the revenue would about for of It's have I in in had had with CIG XX So CIG right XX%, and with million. half forecasted $XXX customer The revenues in million, first margin. note we GSG we've for look million, year, balanced strong Group fact, pleased at which federal we half $XXX the we've this overview this and year. how the balance of quarter work last will provide XX% the by for quarter, performance was quite of up at And for the the to Work Quite CIG, and end delivered increase our clients in same from CIG U.S. in about an $XXX last segment up from year-on-year. marketplace. is our margins. our really is net how annual contract services was -- our closest X% extremely we really

programs undertake. infrastructure government. Now with we revenues exactly without and federal in our by X% civilian increases our our defense contributions which for from in forecast up driven Ukraine work, line year-over-year, growth that of many was critical This federal been would our our is have

Our up year-over-year. local revenues were and an XX% amazing state

response activity we other in and of Hurricanes Florida, Now that Georgia, areas undertook in this Carolinas, areas was Helene hurricane driven the extraordinary response and primarily Southeast to in by Milton.

growth, saw hurricanes. growth wasn't though. just also these This We from

material also water our We digital treatment saw growth projects. advanced water in and modernization

local extraordinary and response would revenues if we up of activities, been our impact state very the Now did hurricane the XX% year-on-year, take out have strong.

over year-on-year, our very work the XXX the X% Our were quarter. finally, much United quarter, by clients. And for again, Fortune high-performance of X/X forecast States our we U.S. design in commercial as well our with buildings, revenues as our international in services support the of work, revenues growth perform actually outside line up contract, net that in driven for represented

factor international which items Our the resiliency and few services single engineering, award. just backlog, a work and the work to both protection water United and That numbers U.S. the emergency anticipated our Irish Tech increased across entire Corps like civil include part high-end a whole design, Engineers I'd contract with emergency X-year would We flood and you Canada awarded has our capacity in of Army out for infrastructure in contract defense are we all $X.XX response point the in Kingdom backlog whole our United includes activities. on response works and infrastructure environmental All programs, X like any programs infrastructure discuss group, preparedness priorities critical a means not IDIQ work last Midwestern water while $XX billion remind I incoming contracts. differentiated capacity that high awards more ago, Australia. I won Tech up billion, region. the a that XX% for Kingdom a Tetra does of under and sustainable to the series within of won to as projects, States, federal government, or And moment for an with Tetra or contracts all-time to associated United from than that mentioned administration. In of year.

authorized is the to work. by have here added We factored or go for So Nothing has don't work to that the that us else component. or client adjusted have been into. contracted, and we funded

our the our can point, present financials the Burdick, to of I'd like and who turn and particularly the in over the for allocation capital programs priorities company. Now at presentation quarter this to of Steve some details Steve?

Steven Burdick

capital you, of an flow working GAAP and quarter for our and financial allocation. capital, now like results update I'd Thank our Dan. first provide to cash the

year, to So projects, across and higher over our as markets. EPS continue carrying front-end year. quarter focus was such, an up cycle increased by which with as operating are on up call, of last XX% at first rate, the margin and water XX% even over higher though a our the And revenue end even income Dan for we last an on all this EPS discussed for adjusted adjusted infrastructure

and this even a result financial balance operating charge earnings. in to results that first this presentation materially and our those in appendix and GAAP sheet our though that adjusted resulted such to call by impact a litigation position, one information, refer of the performance of material flow you to or G record or decision our quarter will XXX-point the That onetime for to is at the Now the looking forward. a cash settle our to subsidiaries has strengthening did reconciliation. going the not for on of decision strategy you Reg I And

for million. that has the our exceeded Now we operations XXX%, cash our net historical flows have income than more X flows results, continued noted decades. financial over last and exceed the months by from income back were operations year for $XXX every when from cash looking trailing generated XX cash flow to These fiscal

resulted has peers days. a DSO flows Our of were focus than XX.X in more cash on working than better much industry about our capital and days, XX

that Our capital target well for flows term is long to significant watermark priority. Also, relative working consider from sustainable markets over across make and insight our We portfolio high the XX to all be satisfied keep core below outstanding of projects, a the into higher-quality geographies. the our cash highly our of in it reflects we days. as business to and DSO end as broad managers operations to continue DSOs this project our provides lead work clients our our

which Our average net X.XXx. at year debt X is was X.XXx, stood of at leverage our which than much EBITDA lower ago, on a

onetime Now this was without on leverage charge, net X.XXx. an at the basis, adjusted

and operating high-quality have a higher results which continue As with to strong strategic shareholders. on our we healthy invest initiatives flows in working ability will cash to returns capital, provide will continue to the execute we to

increasing back to following prior one like we to I'd invest to that few mix balance in acquisitive firms into the as And significant to probably priorities. in our able acquisitions, invest amount well-balanced as strongest liquidity presentation, our make balance present in I sheet, to would those shares, these of net to along with that sheet But key now capital rate For in strategic buy look the a who debt fixed history have organic overview. provide point we Tech to while well an have and our floating strong is rate a interest very out details, And debt is the allocation the as I'd we mitigate diving lowering leverage. available Tetra priorities. of a all like of the dividend, and risk say a that,

for acquisitions, pipeline years. water spaces the leaders have a technical strong in led We the towards we is the where environmental aligned and market which have last especially for XX

am buyback take is company. with amounts a of the This first of of Tetra $XXX support. And and and stock over quarter capital approved I Board I a to to dividend second average share for did $XX year, our for that This discuss global bps based of Board end thank we allocation to interest revised support consecutive future to will to in improving increase out dividend, opportunities million. quite future quarterly our buybacks. as as Leslie $X.XXX call which now the I we or capital our interest XXth for reduce the Tech's Now fiscal the last worth priority of our plan available year-over-year want our we've the for and quarter program I our increase these significant structure the guidance. in well analysts pleased financing stock needs, have regarding our strong portion credit as did be advantage a strategy XX% And program, last part an hand I point annual to rates is to the to of at to shareholders market our of stock to Directors remains higher this dividend paid XXXX rate do Directors year. from quarter lower results this want our to our Leslie? a announce is X.XX% for want your double-digit and million of this of environment quarter. last longer. And leverage reinstitute the use by the We versus XX back last which as by buyback reaching approved an our paid ability XXXX. on Dan all a to our --

Leslie Shoemaker

Thank you, Steve.

in Virginia. structures groundwater across disasters strong we Ohio, water innovative services, regions earlier, water way with and in facilities Hampton Roads, our is continued States for especially post to to will We're the to from as treating to mentioned demand cities to at Today, growing and recovery protect treatment And in used lines in treatment worldwide and we're water recharge to suppliers Dayton, new essential all our United our along needs of Water such Australia. intrusion United military essential in designing hurricane new design fight prone coast seawater that Dan we create clients the the forefront communities reliable As the contaminated be water regions States. for working the aquifers the internationally. see are coastal services.

interstate we've water leverage to And many our which optimize and our and systems. employing our is first Here innovators by designs of solutions. Across systems automate led of technologies in U.S., first-of-a-kind AI this system update solutions, supporting designers and the in essential been software with to and inland commerce. U.S., in currently SSS, significant the our years, Tech inland waterway Engineers. blocks the upgrade XX dam we're Army Corps have across just navigation those the markets, the subscription or of Tetra begun the are water over Delta actually

and years, on Our our recovery as phases. Phase increasingly needs. Tech to response We've We firm as what supporting are the U.S. disasters disaster for for in both distinct working monitoring largest many disasters worked systems are the proprietary and response post X responding as make our recovery on software scientists consulting trained well disaster in and hurricanes Tetra integrated and look response and is U.S. is and at but leading engineering preparing experience into fires, services, professionals to tornadoes. and technical X focused post-disaster response on engineers, disaster. immediately it for and

governments with state over local regions and maintain high-risk to -- XXX client coast throughout We for contracts clients also coast. XXX

Hurricanes years landfill date, Hurricane the Maui XXXX. with ultimately services, damage that providing our which beginning we're services needs months Rico to fire, across for long-term space and X now Helene receive the To has United Lahaina design phase Southeastern in are and severity we're island groundwork by second States of perform complex address occurred can the integrating will as needs to even on design, recovering Maria new just and planning Eaton consulting and we're to caused that resiliency more. fire continuing flood Milton support support in location services the for recovery solutions year, span in for working lay assessment structures and in Texas that to but Hurricane just about for been XX engineering from the the and begins in structures to our Tetra AI California. After recovery, more practices. detailed ultimately which the more a our the protection in restoration and due the we've to in innovate engineering Harvey longer-term the residues. Hurricanes such and are damage fires the Now Today, continuing Palisades its significant deep directly Puerto of severe have Tech Today, provides. entirely knowledge by designing this or

we example, assessments using satellite landslide risk technology. using provide intelligence imagery first-of-a-kind are to For this post-fire and analyze artificial currently

disasters is for that, With our the severity present guidance. Dan with to turn to our increasing frequency this like a significant And the call and of over driver business. I'd becoming to

Dan Batrack

the the present I'd year updated fiscal year guidance of guidance fiscal and to quarter Thank of for XXXX. you, Leslie. now all for like our our second

Our guidance as follows. is

$X.X of $X.XX second $X.XXX of quarter, the earnings adjusted revenue $X.XX net associated for per year guidance range $X.XX. updated to The for per range is share For guidance an our to an to $X.XX. earnings the billion with entire billion is associated $X.XXX adjusted net to revenue a of $X from for with billion billion share

States seeing assumptions the around demand can revenue, and any you other new in never or both more that, the United for government environment, supporting here If any continue this amortization, you aligned with actually take quarter to questions. and for these to IT our services work supported all-time our our had for modernization differentiated more revenues respect world. that upper guidance that have. In have grow end going revenue, is to our specifically, webcast along response have all year we FIT disaster history summary, for practice, our of and the infrastructure mix recovery the we look markets increase in federal on leading the is business areas per water core a presentation, our all practice, that XXXX. And science net first questions the administration's to been fiscal items demand. Demand a our following company. we're the and achieved of needed priorities. now open workforce, across really higher strong may preparedness, of water, you federal in intangible our backlog the government for services like and Kingdom good earnings business, rate design I'd call demand the quarter. our the a We in modeling high drivers at with and United in with very to And and adding services services in highly the Together, a change for of really a record for you're have access with in the the the tax with of response, share More be disaster lean or like

have. to So may Paul, any you that receive questions ready

Operator

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

Timothy Mulrooney

what's walk will XX-day the ones this couple range back through on that us midpoint USAID confidence after gives at to work of Can everybody. work? that a on likely assumed the review? what quick you Just your turn set guide, guidance you just of for some And of level

Dan Batrack

That's a good question.

is basis our first because quarter So an guidance the midpoint we question. -- assumed, on the work in annual I'll the for annual have

that midpoint, million of year. do the we would USAID worth work we've approximately entire For assumed for the $XXX

in Now first million. quarter, we $XXX the did about

review while assumed between assumed determination our during there's year. of practice. One, we have the can put they that days, days this that be different now while projects The this extend -- XX-day can put can midpoint into the put actually end we a period. place $XXX another take do approximately XX be -- be and would scenarios we do the So whole of extended back we now number and for put future, between can unfold and own these can the can What at million out or the fiscal are we've and anywhere on that that the -- terminated. make could a and continuation projects delay on they

about to with X/X So respect going that had, that we less AID. to work we forecast brought our half a that original by to much do it we're for down

basically assume similar we we the the what did of over rest would that we X do amount first in that the next quarter, So quarters.

because extend the you, I'll midpoint. some take might towards scenario built we into if, the I'll reason, Now this is a end. for what tell And worst-case even low you

it demobilize If contracts our demobilization everything through you back that the turned midpoint. off, as on go reimbursable theoretical did turned roughly we off, people of were demobilization yield work contracts very get mean that would these and I assessment I'll got the you turn quickly terminated, if did the would If projects, cost be incurred initiate believe a would home. all would to off. if And would cost you send that

towards get the have tell us you, maybe believe worse midpoint low we Now things don't not, I'll guidance recoverable for provided will of XXXX. fiscal that case if end. to the what's it if But turned you even and our said, roughly on, I you worst or year get take back

us -- either and be could turned get continued your moves demobilization, they obviously, or that back through working. if payments on, Now revenues

turned after revenues the You on it XX-day and contributing. turned of did period. rest it take year, high can this end. would the that through the If us -- get if receive to continue And then gets back on that

that in of this And of somewhat very conservative. you level been this think I'll or really in uncertainty. tell period I we've So --

we Now lots have that it's and data it's uncertain. of not

and We X today, days orders. into X Thursday the morning, are hour stop work

hold. this XX-hour back in put are period. were on put just a And week, then Things saw it grants getting very And So even on information. earlier there's clarified. they little were you

very process. to fluid that a it process, isn't this say So is a fluid

So I to with we've already guess, call support could incorporate respect fully been conservative. the be that certainly, to been guidance. even We and lower annual it midpoint. I'd end embedded with very our What, the case worst actually both into to has aid wanted -- our -- reasonably would frankly, mostly

Timothy Mulrooney

very Okay. helpful. That's

like So the really doing guide your because that's I will of And are not them likely midpoint important. case a know a it are demobilization expectation? I areas projects, skip that one. really on. on strategically fair long expectation of projects XX-day is just after revenue of for some in been if that that back back another a world can the where do is almost to it of Is your sounds you question, worst these mean gets turned some nothing fine, you've this scenario But that's the collecting your time. I These AID turn review?

Dan Batrack

priority I essentially administration's share because respect with priority administration's including and in perspective foreign I'll with with policy. Well, you is line this our every believe our overall to perspective

policy before, And legs meeting with this say up presidents of policy. diplomacy. one of Number ambassadors. and President is the us that's important. That's made heard other You've is certainly, X foreign foreign legs, X

such on Second other way than there's there's when -- option. is But no is Admiral third the had leg is where receiving military individuals And Truly. our Board, development. That we've other in as a defense.

defense. $X development and save between of very And recognition $XXX Defense. will are with of and and close $XX Department our many there's of white that We clients many, papers

XXX the for And are very development projects that security. somewhere between we for the development after also development in most with to work part times. And XX diplomacy. sought return is closely highly clearly so foreign associated of national are on And the

centered a the couple in Sea. entire basically around do China give I'll we you quickly. National example, the that South the South eastern portion China very covers the of like And work for Sea. Security So places is just the Philippines

supporting naval Philippines, to So facility we access that have the Subic in in by work largest development region. Bay,

and the in We side base. Clark cleaning southern of was doing conflict we're that defense These have South engaged Force Sea. entire on we're China the portion Indonesia access doing of work Vietnam former Work Work Orange facilities. in China from Agent the west doing the are access up the we Vietnam, to are U.S. Bay. Sea. Has Camden a The Air the U.S. covers to in. all Malaysia South

these So areas security. And can I portions the give critical you other national certainly, are of world. in to U.S. examples

aligned of, So are priority this the the only previous not highest national security and work highly with that administration. we're administrations, doing

reasons, make a for portion things, how delayed point reviewed we've to high as the get even lower just work back portions. the critical and believe and we midpoint just I to those of that back to So explain large and our Albeit, will turned bracket be sure updated to be determined mid and take both us end. But account for to you on, turned will up above the on.

the and here they've about. vocal So administration Tech. This been Tetra that's very our administrations previous perspective, the is as looking think and on of we based it's priorities not grown what from or within determined current

Timothy Mulrooney

Yes.

is really you've point taken, framed it The think well well for Okay. investors. and I

there. that. appreciate leave I I'll it So

Operator

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

Sangita Jain

if you Dan, the So understand disaster response. help could us

of guidance. your revenue I end top into there's some factored think the you that

you year? next in if is there understand us how much year and beyond guidance your help this So what is flex can for

Dan Batrack

question. great Great Yes, question.

So the we'll put active We'll we're the by the dozen days assume new. will coming we in We year. year that this last the the X work visibility -- out since last way, QX, continue by this took But had quite update, here response are course, think been place hurricanes. that into of here quickly. And February. start quick just work great And a teams have revenues this we fiscal year, fires of part in to in beginning way, new the from fires, the latter already the the at the a XXXX, we that to start think weekend. of just that of We field. the in as

expect We by Southern that sites debris we this coming the the to out come we'll different in California And more than to in teams teams And expect the mean the field doing to will end clear with priority assessment President out dozen the week. field tomorrow. here these yes, of expect that in removal put having a out and this, the for that have we have XXX on does weeks.

So this field being is quite in out going put to fire to go just the from being quickly. the

assume that and $XX as on million was it offset. of our an XXXX. included, hold we've work million we That $XX used So temporary before. was fiscal of into to But it what be year put case incremental or for sort will we revenue not stop guidance is that in this USAID the and

So up we from will standpoint, think is -- recognized disaster. revenue the for period, a during fully what hold this XX-day that made be not the

Now is the more profitable. disaster work

We have have utilization. where we staff higher more dedicated

have overtime things. types We of hours, these

on upper income share why with But actually to you the foreign so that's And would we reduction revenue for type it's end the our upper year. per our because up had That's for assistance. the since the that from the profit caused us government will be end to of the remove what contribution EPS margin, during on saw cause operating up. increase fires that earnings federal the this higher to stand-down short, offset specific, and not allowed us period -- any go

an our think So was USAID about burnt We with the average an about started. numbers XXXX. Because part months larger campfire the we That's an of sort partners that's That when we're there. And in Paradise we amount spent get is of X time. XX-month to response that respect in have. think was into before XXXX the year, the this fact, with city on entire XX-month next be we would activity process. already time We down. about process. dollar That amount of

half a year little a in just XXXX. have we over So

And again maybe XX to XX so double more even can expect XXXX. to in be you that half

Sangita Jain

for And maybe helpful. super That's Steve.

around your So end your leverage is hovering your you you us opportunities of been It's of that at? target years Can looking the the be low you range. couple pipeline types since major thinking a to M&A acquisition. around made the of and talk may a about

Steven Burdick

Yes.

we about operate, of we're the Northern at. And those in that U.S. and we sure bring from Tetra just so and water capital Europe. that make are I think focused bigger, prudent we is geographic are where Australia to environmental -- leadership what presence, U.K. as a better. acquisition allocate today, and North on acquisitions America, and Pacific, her have in includes make don't we're talked especially to opportunities do a terms technical very and the had fortunate pipeline. And have geography presentation which but part in looking Asia complete Tech of we Tetra Tech we huge is the currently acquisitions We across really very our really Canada, how we Leslie that spaces, areas which

or it's it's almost date largest bigger get and And like So acquisition. I Tetra been lines, going to our But which X yes, along make we what's really -- say, I would not years RPS, acquisitions it's that's our said, -- really was in pipeline. to but larger those it's closed acquisitions, Tech since to just the it's better. what's

Operator

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

Sabahat Khan

other about side Maybe on on you evolve the of on year? X can bit for the segments a of little maybe as up I DoD the rest fiscal the some put to just there's on as and think Obviously, finer wanted a well. of how you just some civil point those rest expectations and the And puts takes your XXXX. buckets. follow

Dan Batrack

I of foreign But last question. federal specifically of there's awful assistance in focus Good there's State -- is the only government. on or the foreign an days, work lot development, X/X it know we for the the Department. XX in USAID, been do been

is work Department has within priorities seen their their the U.S. Defense primacy Their our been and are of given funding budget. We've well. budgets have place. So untouched in growing

at of XX% as So even to no growth might growing go seen we've between X% rate, we is to the rates we've of indicated. some a that upper is and accelerated And think sort going we signs and that that really in get work It those of may And continue. expect changes. end. fact,

more, what do there's of indications the Air size Some you're the of to to add been type Force. there. the grow of would Well, grow Navy, have asked you the certainty work size the going would if

to or have a put or have you location have going ship, another it. you're If to to port peer

do respect is the access, work ourselves. they're to is alignment we critical. so we All to with done the that the have it's would sediment? right going you and on are be of boat Can at while absolutely you do, that And What to would constructing things there there? get do With design? the in

both So course, And social modernization protection. and ports, side harbor sands, of the on aggregation channels, on the civilian Defense. Department of

so fighting Tech. If the represents use or that's all readiness, people analytics. other back efficient if lean in through the that more going be IT yes, office the it to data does. you're everything force, on speak, that need revenues force you're practice of going more XX% particularly to to with Tetra a And to federal AI to And support from do our it will the and work focus what modernization and about of

So But or not clearly foreign enough, get our as probably doesn't USAID. is assistance about speaking IT it slightly practice headlines. larger, enough not I'm or fault than program federal I big know for much as, interestingly entire enough it. as my with our

federal And modernization so put at upper for the end see probably between that. another program that to We generally X% but growing. government the is XX%, area the of we

And have civilian our under so programs. look very strong. Areas we those

and So that defense, it see is we we see lots our we of have. a of pretty work Civilian at upper have varied we growing end strong backlog, the and range. clear,

to Washington, we're in even and So highlights yesterday accident night last moving in are communications there priority. just air some need doing that areas very additional communications administration the and I Washington, for those local navigation is taking the D.C. situation space-based of D.C. was as this traffic federal that aviation besides high just such area. that modernization systems, place even controllers an and with landing in know

increasing a see modernization, reduced part in priority safety, part of as as we of systems. of part running So as these of that for cost

and Well, for of we are I So I agency questions environmental do the work do priority. Other Agency, about in more we know protection what Protection see get about more areas, lot a the saving EPA. frequently activities. that Environmental funding response to

are looking lot doing is you -- not this work. it's response research? change? Are at climate A you So of

Federal we were you, just So a responding disasters, the had knows the I Department doing East Justice when political tell of rail between of And and the was the types and in I'll know to party. the response these Palestine, response. train you week activities this there no derailment, operator settlement

that work so unaffected. see we And as

So growth potential discussed in I I remains think there. and the higher nonfederal are foreign think fact, the and assistance untouched. opportunities most our work, Department But the there. And Defense that and already, even think risks I rates I've the spoken civilian of of we've of

Sabahat Khan

maybe can Great. just And commercial kind recently. to trending that's around of But data us -- buildouts. center update moving a lot then like Announcements just then great the over And flying bucket. executive been color. on well. sounds if you maybe It of orders that's about

net-net, conversations it private your the that investment just your are maybe some we're announcements broader and/or how with hearing? customers So whether relates to of commercial trending infrastructure

Dan Batrack

bigger technical move must U.S. or it some between power seen a the It's I rocket. But to manufacturers. a for majors fabs. these get interesting. contracted gas-fired of seen other and will oil within studies. been be or and turbine We've energy and That gas some respect additional colocation, generation become additional found We've oil The feasibility the for as cogeneration from I adjacent actually interesting. some natural from seen U.S. data a areas power off or and individuals we've forward. request the that business We've LNG, like for comments work LNG, such with SpaceX chip plants, for the centers company very investors the parts evaluations of of saying exports taking permitting this export. to evaluating

X for put so connections these to and generation can interconnects. it or actually to a one limits need adjacent that you transmission gigawatt or power So of X facilities eliminates the

cost be this big the work a so dropped The dramatically. would build-out. And would be that

we've so engaged And in this. been

say an from So these. of use but to uptick not I in exploration move still would days we're don't going since seeing actually far tomorrow, through ground I But a breaking it's to say inauguration. as it's miles the progressing. as to XX from would I XXX X the standstill progression been past It's in slow, process. this want word that -- there's I'm a

Sabahat Khan

one, exposure you Great. and And one pass percent have XX%, then and and last then the about, line. to is I'll XX-plus is renewables. it, XX% just of guess sort call the then buckets water estimated environmental various I

kind of whether talk about that if environmental hearing other you it's curious customers, customers? some the trends commentary can as just I'm or across private and maybe Just Just just public you're renewables bucket. mix bit XX% administration the a you of it other new relates that XX% to seems to on renewables. have honed like wind, please. just talk in bucket, but the work about of is It in

Dan Batrack

with could familiar not how you I'm share it. breakdown. I particular Yes. we at look that with

water or XX%, specifically environment. have ground protecting we and watersheds, with environmental do So is would And water we which be sources. water, the associated other work water surface

is work and completely water. of integral environmental integrated the So to protection

the completely programs. that's driver and why linked our water XX% So say to of revenues environment. But the are environment we water is of

are include in power, being XX%, environmental other than we renewables, reduced." not that that headline don't I programs to see impacted do risk our the of So XX%. hydro "The So by respect really that's case. With not

or XX% to get clean that's want So XX%. when our other XX%. of -- XX% the don't And the roughly renewables. is here, other renewables, is but of of say not energy wonky part and buildings numbers I on X% part other too you high-performance about the That's

moving in U.S., is well there. of is which include in we're turbines But here that the wind, Now of have States. on It's is the where offshore I Canada a X% we is wind Europe, we States, component. offshore -- renewables that revenue not which in favor in not our primarily is solar, which priority which here the do that's United is generation in wind an Australia, is U.K., renewable, has a doing just which advanced forward; of Canada. primarily and United what are.

you this for renewables, take it may take the renewable portion U.S. that big United States not it's be for if X% with and favor X administration, probably us that So in take the about And Australia, and U.K. X/X. for the

a gas, say a revenue you favor, component power there's that might is where coal-fired if have X.X% you with say would to of want So respect carbon as but sequestration. with not there's energy, that complete from component such wind, of sequestration to renewable carbon respect natural other be renewables, also plants I in it X.X% is about to in our that of

not just it's wind. So

So to that it, you when wind. break small our overall down U.S. look at part for if you really the a it's portfolio pretty of

Operator

Our Sullivan next Maxim Tate Group. is with question from

Tate Sullivan

mean, other halted an Dan, you, that Thank And could executive you a at this your for work for concerned your set I USAID comments confirm on has no other And for to order USAID. precedent agency agencies? the this you are then or or government time. federal previous competitors decision that

Dan Batrack

our interesting. won't regarding competitors. speak I it's Well,

let what they've them anybody doing on assume been I really agency. work I'll we've comment received on is across that But what hold. So for

some work. received scientific have a for call Protection small orders We stop It's of Environmental it, for Agency. work research some part the the,

the thought may because that that place been We day. orders took of then the there rescinded had next EPA. funding work coming grant So stop cessation was have and of

it, Science evaluation. we they're R&D an a the while National work of That's we work So might been untouched, grants. were on do EPA from part research it doing moving speculating on amount come where But very small forward. that's Foundation of

beyond orders I -- that out call but has -- didn't really know it like I that extended but after where so anything noise, think effective have only during week can it ago certain us. extended There it came affect or what don't so and I'd and inauguration, that associated were will during a out And those the terminated just I DEI quite small, a say just may was call USAID unassociated that I And be if it to HHS but all agencies but put extent. but put for that to would that. just other came on were hold, things with very I programs immediately. not -- with -- to clear, programs

Tate Sullivan

of backlog if and quantify, you in of if amount current the work can total fiscal -- uncertainty -- amount some current remove sort for amount booked possible? in in the And can, this 'XX the you of and USAID in USAID just backlog, to XQ

Dan Batrack

would within backlog. break whatever we total. percentage the don't that particular the obviously, We be work recognize because we in client of any any overall But have Yes. our out our by say will in quarter I

to So USAID the than total. Generally, a I'll go us the year. for funded has more just

it's this because our USAID part, of of Ukraine up last about XX%. XX% -- our because X/X revenue being bigger were maybe of normally, about we around year, Ukraine or was -- So a federal

year's and So carries it $XXX $XXX XXXX, flat $XXX totally it it year, a was more million about maybe a worth in we thought so between this backlog. million ago year be million would than at of

So and in the you number can extrapolate backlog. from there our

Tate Sullivan

or in Dan, the Hunters you accrue -- litigation or change something to settle Or the touch decision on this comment for Steve Point on that? can a can landscape? did you litigation? Was

Steven Burdick

quite covered XX, us while, Well years. is for, Tate know, you've a this XX I and that's something don't been around

allows eliminate where for to think litigation really that agreement to our was with future won't fully yet, quite I a say eliminate able but to government got the costs, almost, going to the point So an to outside lawyers, court come subsidiary, I years. us BC, it

it that really the with so to and takes all of purpose was us settle the the of government. deciding off And finally that table,

Operator

with Baird. Justin Our next from Hauke question is

Justin Hauke

here. color the everything. the point of guess That's been I helpful clarify I all us USAID to helping for more in quarter. you Thank understand the in contribution wanted on one

rest much that help million isolate your was How was that to versus the it USAID of that that how in the the Ukraine said $XXX to did of just question million was of business? XXXX. curious $XXX of specifically XXXX, you maybe about Ukraine you think said I I for you kind million bucket was net just $XXX revenue. same that much of specifically? And

Dan Batrack

Ukraine this quarter. about in QX, $XXX was So first for so million XXXX

And over I the second you in million had number we XXXX remaining were the ago, so we with that $XXX is the a what just work, us which little part done put Justin? Ukraine of in just work question, to the And a there. -- million guess, $XX for USAID used year respect

Justin Hauke

Yes. Yes.

Dan Batrack

little a million. just it's $XXX -- under did we Yes,

what $XXX XXXX. for did it think million about year we $XXX That's I like fiscal was million, in Ukraine.

Justin Hauke

maybe outside whether standard, but changed? I structural immediate And I to -- discharge water halted. I portions it And executive some mean of don't much risks high-level isn't the the that did role look just but effects just like be that of your programs I the I tail maybe outside priority of one know a of it's the about for mean funding requires orders, the last rule. expectations? All other know, risk initial order, here some more high-level maybe was know if my just you, question being these changes, and risk or Dan. don't of of captured that But PFAS thinking things of guess how of in as could IRA right. I of some just the kind back the something rollback drinking rolled or an there's that executive of kind affluence

Dan Batrack

Yes. that the there's It's -- of because programs an are. objective and empty, half is there's it a of where really Tetra think that's measurement is, what I glass Justin, half where good glass a is then impacts questions, and full, I think Tech the which

speculative on it's hold. would think I infrastructure highly put it's when projects be that IIJ

then on format this put were I put in And there and in programs immediately name Trump to rescinded election that place that you or think place on of between in critique already, it. the the identical saw by they're and put administration an seen back the I've criticism inauguration, and review. previous with was be being

I been So this illustrate small, put that. some we've sanctioned on this that it's mentioned had but put administration. a exactly had review, current on, it's waivers now waivers by and And and actually

AID they they adds think is judicious. be get just And So in practical have an going get rest we what's the that's said promised contracts point tenure conservative which your been cautious that what authorized. always it's it's company, of I very backlog been not they and under And real. And they going example don't our do have won't in my they're have they're we've and Only everyone think and do? words, to this, a work what going a what contagion have I while the to to they some funded been would put to that in real-life in some of I possible know on, and contract, say insignificant, as to contaminate have somehow else, clients. as would everyone by other but IDIQs and we've what what's and

And here, an and as so the in example. to that estimates PFAS I'll we go put

You would contributions been revenues the PFAS ramp-up to company who's Tech. more not another the Tetra cautious than find and about in firm

You will not another find company.

to questions don't PFAS will not you And think that so much is bucket at you? be going are, a when problem and all. in put We've that impact

shadow been shadows So voting in has happen. for for introduced These not our some included interesting I it revenue this are that areas will we've find do impacts forecast. even that these that by

even So to even where back, you'll love are outperform business. the love actually heard, move are. just Tech do is watch just That's I'm our if Or very in morning flips they these move this move remain heard see close I one clients true could forward, Tetra Tetra if to Tech they and pulled I It's you I course, operations. thing my interesting. of boat. our what my forward. And projects.

X% foundational other you there's on XX% on? he Tech to work. that is bankruptcy. companies margin that passes, Tech an has So at and with it may What's fact, standing a that capacity if to substantially so is getting the of larger and driving want was that of know impact turned what's work all the concern the to those price administration cost-plus that Tetra this much companies of what's And fixed move even at the competitors them work I the contribution. be will it's unshakable. the number. Maybe the and XX% percentages. there move is higher rumors timing? Did there's because had X% was at in And comment based new at the respond says, be revenue, want work talking to the really price, and will of more actually what's will into to there being on, to turned and removal point perform may And off And saying being your Tetra exact the our are from less on much, have we people is be some furthermore, sizable than certainty USAID, folks when they with we contract yielded before interesting moment, attention focused storm the because

on out this could executives work, the And so be to price the government more of our one work our people senior very less substantially much are, there's double fixed perform come on we side of and other as of delivery at to could because higher, based of more that value the margins a clients. as with it

of So ever I actually those through, blows better been a lot when know a the that Maybe here. that position that standing there's the before. removed. storm in staff storms by lot a And come fundamental be has are and will strong than of

of stronger out come interpretation written is is I it so half and a lots And there what or the there's full is half where take a quite But empty. is do to I much adjustment. think have some of the It quite reality -- -- side could other place. it's know neither opportunity dark

Justin Hauke

up the I know the in air, that's still perspective. it's all but

Operator

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

Michael Dudas

can generally? you May's remind things you the several the passes just storm over what whether are on Dan, years? noise that next that that's all And low thoughts, it's Investor it's been any once loud, opportunities or impact those that us given last targets just high and end, end you a can extremely exceed have Day, they achieve put to even the the reset forth or

Dan Batrack

Yes.

margin the between asked that XX think I'm between call, said X% our the days. But XX It after Tetra and glad organically began amazing an the last rate. operating you it's here build of our is and analysts noise period, we've as and that election, anticipate noise. question. amount we've of good really reached by that. now current expand all indicated stakeholders, that to XXXX, over others a there's this in on would grow of we XX% to and we'd Because I we remind really average points. and investors, its lot Tech expect course, And crescendo that's basis participants a

we those unusual. metrics. that you said the So numbers extrapolate the get couple say plan. I'd are you and we X things our presented can in those of are that And XXXX a

said of achieve but not is, unlike going We're it's all loaded. again, And make I Tetra make Tech loaded. think that types get And back-end actually there, see when being basis. I those long-term on This they -- don't firms back-end to people it's very we going a targets. that those relatively to say changing. others, we're linear

on that account the in X%. into line. But revised those range. that think deviation these Nothing see our changes growth term, challenges of rates even taking the the a I don't on guidance that perfect midpoint I is anything within our with linear still here, even the It's no is investment potential near all. at at thesis

up have, faster. In the of even fact, mix expansion the change that in work the our we it's actually moving margin

a going fundamental of to change those is in we'll or margin warming California it. The Northern extreme there to call you other but Michael, if climate with that you're is single same single back water we're to turned for a it, Southern I drivers But goals. I AID think on, matter to the to low severe protection is matter doesn't drought -- no see else. you're that or something get it disasters. to If scarcity work still meet reengineered, it water the what need can coastal is because Delta than single changed events, valve need And of tailwinds is no even your there be fundamental find the Now Northern is, doesn't still long-term it, looking you if becomes going Sacramento the But scarcity, drivers you redirect Water a valve going there or flow, has there's and weather up call from of turn actually when it River waist global and happen? California. anything storm. California source. with water, don't true and in more expansion

which work see investors, water are unimpacted days. turn a to I'll tell alternative lot that it other that energy, supply. energy investment these intact longer X desalination, are are water fundamental longer or storm capture our So reuse, that These intact, this XX drivers you and on alternative doing than sources. on and water drivers we're than to fully by years, all we fully of last thesis is XXXX. And

we So May no, numbers XXXX don't see presented in we there's any the changes that Investors our Day. in

Michael Dudas

That's My follow-up helpful. really is.

you volatility shares may share balance be is given and in Tetra that see what investors do given to put in forth, leverage towards more something able the investing Is So sheet lean you? anticipate? the extreme capital you think opportunities could Tech allocation front Tech's Tetra of just may given in where that your you price,

Dan Batrack

that committed, next that message talked mitigate acquisitions indicated that's company accretive been highly us, area. This a revisit the would Well, become we also X, Steve may buyback. that question us. some one, being in in which every XX% report, a in with own our be got when we've better. of and buyback constructive you about down And we has price the the Steve because from this stock great respect up the It's presented. you are on we're volatility quarter, to quarterly and low you'll would price is And a imagine a that And that to see initiated indicated our one engaged moved said to isn't year, all end see. is range, making about we that seen new as message that we depending we increase and and constructive this hit more said, that we've our thing to point which could dividend. what the as us time. we stock as the number leverage only here, this a indicated Steve is in quarter, X.XX, yes, is whole coming we've we last thing But

use our we have I'd so something ahead that acquisitions our would large the leverage and to So materially adjust put point. --

that's or margin, has on redivert a position That just drive take stock, should perennially. indicated. And order as You'd and us. top M&A, drive watch it and it new it not you toward been either watch us you'll our line position for again, which

thanks for what So reminder asking just of position that, our a is. as

Operator

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

Dan Batrack

commend them you our in be on of that mission to And just really with that with all very number that like a America. some I'll Tech of the speaking you of States the doing for of equally analysts supporting items great being United Tetra are and focused and XX and we've looking to and forward founded, see maybe engaged follow at job. the the are to these days. foreign days time, in the this that development Paul, here. Again, to tried clients thank address we some out of XX employees in the XX shareholders, importantly, significant I Thank clients. a especially from all report of you, want days And the all of volatility do over well stakeholders at I us with phenomenal who we'll benefit think their of and find our have that for changing a all introduced but of And importantly, job now. environment more doing not last these I We much, that particularly individuals maybe as will was all when

then. So look you and all, thank to you to forward talking I Goodbye.

Tetra Tech (TTEK) 30 Jan 252025 Q1 Earnings call transcript