Company Announcements

• Record Second Quarter Revenue $1.322 billion
• Record Second Quarter Net Revenue $1.104 billion
• Record Second Quarter Adjusted Operating Income $130 million
• Increasing Quarterly Dividend +12% Y/Y
• Raising FY25 EPS Guidance

PASADENA, Calif.--(BUSINESS WIRE)--May 7, 2025-- Tetra Tech, Inc. (NASDAQ: TTEK), a leading provider of high-end consulting and engineering services in water, environment and sustainable infrastructure, today announced results for the second quarter ended March 30, 2025.

Year to Date Highlights

• Revenue increased 11% Y/Y to $2.74 billion
• Net Revenue increased 11% Y/Y to $2.30 billion
• Adjusted Operating Income increased 17% Y/Y to $267 million
• Adjusted EPS increased 21% Y/Y to $0.68

Second Quarter Highlights

• Revenue increased 6% Y/Y to $1.322 billion
• Net Revenue increased 5% Y/Y to $1.104 billion
• Adjusted Operating Income increased 11% Y/Y to $130 million
• Adjusted EPS increased 18% Y/Y to $0.33
• Book-to-Bill: 1.1x (excluding USAID and Dept. of State)
• Backlog $4.09 billion, up $127 million Y/Y (excluding USAID and Dept. of State)

Recent Key Wins

• $416 million five-year multiple awardcontracts to deliver environmental engineering services for USACE Honolulu District
• $249 million five-year multiple award contract for planning and engineering services for USACE Mobile District
• $240 million five-year multiple award contract for planning and engineering services for USACE Middle East District
• £42 million five-year multiple award contract for stormwater management services for a U.K. water utility
• $48 million five-year multiple award contract for environmental engineering services for USACE Huntsville District
• $46 million three-year multiple award contract for planning and engineering services for USACE Los Angeles District
• £36 million three-year multiple award contract for water infrastructure services for Severn Trent Water in the U.K.

Capital Allocation, Quarterly Dividend and Share Repurchase Program

On May 5, 2025, Tetra Tech’s Board of Directors approved the Company’s 44^th consecutive quarterly dividend at an amount of $0.065 per share, a 12% increase year-over-year, payable on June 5, 2025, to stockholders of record as of May 23, 2025.

In the second quarter, Tetra Tech repurchased $150 million of common stock. Furthermore, the Board approved an additional $500 million share repurchase program. Together with the $173 million remaining under the previously approved program at the end of the second quarter of fiscal 2025, the Company had $673 million available for share repurchase.

Subsequent to the end of the second quarter, on May 5, 2025, Tetra Tech entered into an Amended and Restated Credit Agreement with a total borrowing capacity of $1.5 billion that will mature in May 2030.

Chairman and CEO Comments

Dan Batrack, Chairman and CEO, commented, “We generated record second quarter results for revenue and net income despite the decrease in revenue associated with the reorganization of USAID. Our growth in State and Local, U.S. Commercial, and International revenues more than offset this headwind, which resulted in net revenue and EPS exceeding consensus and the upper end of our guidance range for the quarter. We are seeing significant demand for our differentiated Leading with Science^® services in our water and environmental markets, including our high-end digital automation services for our municipal and commercial clients.

“In the last month, we announced strategic acquisitions expanding our global digital technology and program management businesses. Based on our strong performance, we increased our dividend by 12% and expanded our stock buyback program by an additional $500 million. With record year-to-date performance and a strong outlook, we are raising our FY25 guidance for net revenue and EPS.”

Business Outlook

The following statements are based on current expectations. These statements are forward-looking, and the actual results could differ materially. These statements do not include the potential impact of transactions that may be completed or developments that become evident after the date of this release. The Business Outlook section should be read in conjunction with the information on forward-looking statements at the end of this release.

During the quarter, we were notified that virtually all our contracts with USAID were terminated for convenience. Consequently, we performed an interim impairment review of the goodwill in our Global Development Services division. As a result, we reduced backlog by the value of the terminated contracts and recorded a non-cash goodwill impairment charge of $92.4 million in the second quarter of fiscal 2025. Tetra Tech has updated its guidance for fiscal year 2025 based on its current outlook, which includes the expected impact of the ongoing U.S. federal government review process.

For fiscal 2025, Tetra Tech is increasing full year guidance for net revenue² to range from $4.400 billion to $4.765 billion and is increasing adjusted EPS³ guidance to range from $1.42 to $1.52. For the third quarter in fiscal 2025, Tetra Tech expects net revenue to range from $1.10 billion to $1.20 billion and EPS to range from $0.35 to $0.40.

Webcast

Investors will have the opportunity to access a live audio-visual webcast and supplemental financial information concerning the second quarter of fiscal 2025 results through a link posted on the Company’s website at tetratech.com on May 8, 2025, at 8:00 a.m. (PT).

About Tetra Tech

Tetra Tech is the leader in water, environment and sustainable infrastructure, providing high-end consulting and engineering services for projects worldwide. With 30,000 employees working together, Tetra Tech provides clear solutions to complex problems by Leading with Science^® to address the entire water cycle, protect and restore the environment, and design sustainable and resilient infrastructure. For more information about Tetra Tech, please visit tetratech.com or follow us on LinkedIn and Facebook.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The use of words such as "anticipate," "expect," "could," "may," "intend," "plan" and "believe," among others, generally identify forward-looking statements. These forward-looking statements are based on current expectations and beliefs of Tetra Tech’s management and currently available operating, financial, economic and other information, and are subject to a number of risks and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results. A variety of factors, many of which are beyond our control, could cause actual future results or events to differ materially from those projected in the forward-looking statements in this release, including but not limited to: continuing worldwide political and economic uncertainties; the U.S. Administration’s potential changes to fiscal policies; the cyclicality in demand for our overall services; the fluctuation in demand for oil and gas, and mining services; risks related to international operations; concentration of revenues from U.S. government agencies and potential funding disruptions by these agencies; dependence on winning or renewing U.S. government contracts; the delay or unavailability of public funding on U.S. government contracts; the U.S. government’s right to modify, delay, curtail or terminate contracts at its convenience; compliance with government procurement laws and regulations; the impact of global pandemics; credit risks associated with certain clients in certain geographic areas or industries; acquisition strategy and integration risks; goodwill or other intangible asset impairment; the failure to comply with worldwide anti-bribery laws; the failure to comply with domestic and international export laws; the failure to properly manage projects; the loss of key personnel or the inability to attract and retain qualified personnel; the ability of our employees to obtain government granted eligibility; the use of estimates and assumptions in the preparation of financial statements; the ability to maintain adequate workforce utilization; the use of the percentage-of-completion method of accounting; the inability to accurately estimate and control contract costs; the failure to adequately recover on our claims for additional contract costs; the failure to win or renew contracts with private and public sector clients; growth strategy management; backlog cancellation and adjustments; risks relating to cyber security breaches; the failure of partners to perform on joint projects; the failure of subcontractors to satisfy their obligations; requirements to pay liquidated damages based on contract performance; the adoption of new legal requirements; changes in resource management, environmental or infrastructure industry laws, regulations or programs; changes in bank and capital markets and the access to capital; credit agreement covenants; industry competition; liability related to legal proceedings, investigations, and disputes; the availability of third-party insurance coverage; the ability to obtain adequate bonding; employee, agent, or partner misconduct; employee risks related to international travel; safety programs; conflict of interest issues; liabilities relating to reports and opinions; liabilities relating to environmental laws and regulations; force majeure events; protection of intellectual property rights; stock price volatility; the ability to impede a business combination based on Delaware law and charter documents; and other risks and uncertainties as may be described in Tetra Tech’s periodic filings with the Securities and Exchange Commission, including those described in the “Risk Factors” section of Tetra Tech’s Annual Report on Form 10-K for the fiscal year ended September 29, 2024. Readers should not place undue reliance on forward-looking statements since such information speaks only as of the date of this release. Tetra Tech does not intend to update forward-looking statements and expressly disclaims any obligation to do so.

Non-GAAP Financial Measures

To supplement the financial results presented in accordance with generally accepted accounting principles in the United States (“GAAP”), we present certain non-GAAP financial measures within the meaning of Regulation G under the Securities Exchange Act of 1934, as amended. We provide these non-GAAP financial measures because we believe they provide a valuable perspective on our financial results. However, non-GAAP measures have limitations as analytical tools and should not be considered in isolation and are not in accordance with, or a substitute for, GAAP measures. In addition, other companies may define non-GAAP measures differently which limits the ability of investors to compare non-GAAP measures of Tetra Tech to those used by our peer companies. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is set forth above in this release.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250507369932/en/

Jim Wu, Investor Relations
Charlie MacPherson, Media & Public Relations
(626) 470-2844

Source: Tetra Tech, Inc.