HighGravityData

Tetra Tech — Jul 30, 2025 release

Fiscal 2025 third-quarter results · 8-K Item 2.02 · Exhibit 99.1 · 0001104659-25-072237
Open on SEC.gov ↗
Showing in the filing
Adjusted EPS
“$1.49 to $1.54”
Period
FY2025
Measure
Company-defined measure
Source
Prose
All guidance in this release · 5
Quarterly dividend
“$0.065 per share”
Net revenue for FY2025
“$4.454 billion to $4.554 billion”
Adjusted EPS for FY2025
“$1.49 to $1.54”
Net revenue for Q4 FY2025
“$1.0 billion to $1.1 billion”
EPS for Q4 FY2025
“$0.38 to $0.43”
Exhibit 99.1 · full document
EXHIBIT 99.1   Exhibit 99.1   NEWS RELEASE July 30, 2025   Tetra Tech Reports Strong Third Quarter 2025 Results   · Revenue $1.37 billion and Net Revenue $1.15 billion · Net Revenue of $1.06 billion, up 11% Y/Y excluding USAID and DOS · Operating Income $165 million, up 28% Y/Y · EPS $0.43, up 34% Y/Y · Operating Cash Flow $350 million, up 148% Y/Y   Pasadena, California . 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 third quarter ended June 29, 2025.       Q3 FY25     YTD FY25   $ million (except EPS data)   Reported     Excluding USAID / DOS     Adjusted 1     Excluding USAID / DOS   Revenue   $ 1,370     $ 1,264     $ 4,112     $ 3,560   Net Revenue 1   $ 1,153     $ 1,062     $ 3,454     $ 2,990   Operating Income   $ 165     $ 159     $ 432     $ 396   EPS   $ 0.43     $ 0.41     $ 1.11     $ 1.01   Backlog   $ 4,277     $ 4,149     $ 4,277     $ 4,149     Third Quarter Highlights (Excluding USAID and DOS)   · Revenue increased 10% Y/Y to $1.26 billion · Net Revenue increased 11% Y/Y to $1.06 billion · Operating Income increased 37% Y/Y to $159 million · EPS increased 46% Y/Y to $0.41 · Backlog $4.15 billion, up Y/Y and sequentially · Days sales outstanding: 54 days   Year to Date Highlights (Excluding USAID and DOS)   · Revenue increased 10% Y/Y to $3.56 billion · Net Revenue increased 10% Y/Y to $2.99 billion · Adjusted Operating Income increased 24% Y/Y to $396 million · Adjusted EPS increased 31% Y/Y to $1.01     1 Non-GAAP financial measures which the Company believes provide valuable perspectives on its business results. The reported adjusted operating income and EPS exclude non-cash goodwill impairment related to USAID in Q2-25 and legal contingency in Q1-25. Refer to tables at the end of the release and Regulation G Information for reconciliations to the comparable GAAP metrics.         Recent Key Wins   · $990 million multiple-award contract for engineering design for NAVFAC Pacific · $249 million multiple-award contract for energy resilience for USACE Huntsville District · $248 million multiple-award contract for planning and engineering services for USACE Europe District · $190 million multiple-award contract for planning and engineering services for USACE Honolulu District · $94 million single-award contract for emergency preparedness and response services for U.S. EPA · $45 million multiple-award contract for environmental services for U.S. Department of the Interior · $22 million single-award contract for disaster recovery services for the State of Georgia · $10 million single-award contract for water digital automation systems for Los Angeles County   Quarterly Dividend and Share Repurchase Program   On July 28, 2025, Tetra Tech’s Board of Directors approved the Company’s 45 th consecutive quarterly dividend at an amount of $0.065 per share, a 12% increase year-over-year, payable on August 29, 2025, to stockholders of record as of August 15, 2025. In the third quarter, Tetra Tech repurchased $25 million of common stock. Additionally, as of June 29, 2025, the Company had $648 million remaining under the approved share repurchase programs.   Chairman and CEO Comments   Dan Batrack, Chairman and CEO, commented, “Tetra Tech delivered another strong quarter with increasing revenue, record operating income, and significant operating margin expansion over the third quarter of last year. This performance is being driven by our high-end water, environmental and sustainable infrastructure services, which includes our clients’ increased funding for preparing and responding to natural disasters. Although the financial results for fiscal 2025 to date have exceeded our initial expectations, we are continuing to navigate the near-term financial impacts from the changes in U.S. federal government priorities and the related secondary impacts to our end markets.”   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.   For fiscal 2025, Tetra Tech expects net reven ue 2 to range from $4.454 billion to $4.554 billion and adjusted EPS 3 g uidance to range from $1.49 to $1.54. For the fourth quarter of fiscal 2025, Tetra Tech expects net revenue to range from $1.0 billion to $1.1 billion and EPS to range from $0.38 to $0.43.     2 Reconciliation of the net revenue guidance to the most directly comparable GAAP measure is not available without unreasonable efforts because the Company cannot predict the magnitude and timing of all the components, including subcontractor costs, required to provide such reconciliation with sufficient precision. 3 The adjustments in our guidance for EPS exclude legal contingency of $0.35 in Q1-25 and goodwill impairment of $0.31 in Q2-25.   2     Webcast   Investors will have the opportunity to access a live audio-visual webcast and supplemental financial information concerning the third quarter of fiscal 2025 results through a link posted on the Company’s website at tetratech.com on July 31, 2025, at 8:00 a.m. (PT).   Reconciliation of GAAP and Non-GAAP Items In thousands (except EPS data)       Three Months Ended     Nine Months Ended       June 29, 2025     June 30, 2024     June 29, 2025     June 30, 2024   Revenue   $ 1,369,816     $ 1,344,323     $ 4,112,490     $ 3,824,205   USAID / DOS     (106,084 )     (194,753 )     (552,572 )     (577,762 ) Revenue excl. USAID / DOS   $ 1,263,732     $ 1,149,570     $ 3,559,918     $ 3,246,443                                     Revenue   $ 1,369,816     $ 1,344,323     $ 4,112,490     $ 3,824,205   Subcontractor costs     (216,800 )     (234,742 )     (658,439 )     (646,828 ) Net revenue   $ 1,153,016     $ 1,109,581     $ 3,454,051     $ 3,177,377   USAID / DOS     (91,305 )     (154,503 )     (464,104 )     (470,294 ) Net revenue excl. USAID / DOS   $ 1,061,711     $ 955,078     $ 2,989,947     $ 2,707,083                                     Operating Income   $ 164,986     $ 128,630     $ 227,114     $ 357,395   Legal contingency     -       -       115,000       -   Goodwill impairment     -       -       92,416       -   Contingent consideration     (58 )     500       (2,355 )     477   Adjusted Operating Income   $ 164,928     $ 129,130     $ 432,175     $ 357,872   USAID / DOS     (5,492 )     (12,918 )     (36,638 )     (39,434 ) Adjusted OI excl. USAID / DOS   $ 159,436     $ 116,212     $ 395,537     $ 318,438                                     EPS   $ 0.43     $ 0.32     $ 0.45     $ 0.88   Legal contingency     -       -       0.35       -   Goodwill impairment     -       -       0.31       -   Adjusted EPS   $ 0.43     $ 0.32     $ 1.11     $ 0.88   USAID / DOS     (0.02 )     (0.04 )     (0.10 )     (0.11 ) Adj. EPS excl. USAID / DOS   $ 0.41     $ 0.28     $ 1.01     $ 0.77     3     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 .   CONTACTS: Jim Wu, Investor Relations Charlie MacPherson, Media & Public Relations (626) 470-2844   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.   4     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.   5     Tetra Tech, Inc Balance Sheet - Unaudited (unaudited - in thousands, except par value)       As of       June 29,     September 29,       2025     2024   Assets             Current assets:                 Cash and cash equivalents   $ 242,833     $ 232,689   Accounts receivable, net     1,127,519       1,051,461   Contract assets     142,852       129,678   Prepaid expenses and other current assets     106,592       113,555   Total current assets     1,619,796       1,527,383                     Property and equipment, net     70,302       73,065   Right-of-use assets, operating leases     186,145       177,950   Goodwill     2,084,872       2,046,569   Intangible assets, net     157,752       160,585   Deferred tax assets     109,477       105,529   Other non-current assets     125,103       101,595   Total assets   $ 4,353,447     $ 4,192,676                     Liabilities and Equity                 Current liabilities:                 Accounts payable   $ 234,591     $ 197,440   Accrued compensation     313,335       332,096   Contract liabilities     389,856       351,738   Short-term lease liabilities, operating leases     64,109       63,419   Current contingent earn-out liabilities     35,362       26,934   Other current liabilities     338,868       247,900   Total current liabilities     1,376,121       1,219,527                     Deferred tax liabilities     30,673       30,162   Long-term debt     862,483       812,634   Long-term lease liabilities, operating leases     145,045       140,095   Non-current contingent earn-out liabilities     34,369       21,812   Other non-current liabilities     162,660       138,033   Total liabilities     2,611,351       2,362,263                     Equity:                 Preferred stock - authorized, 2,000 shares of $0.01 par value; no shares issued and outstanding at June 29, 2025 and September 29, 2024     -       -   Common stock - authorized, 750,000 shares of $0.01 par value; issued and outstanding, 262,752 and 267,717 shares at June 29, 2025 and September 29, 2024, respectively     2,628       2,677   Additional paid-in capital     -       35,900   Accumulated other comprehensive loss     (65,117 )     (78,875 ) Retained earnings     1,804,429       1,870,620   Tetra Tech stockholders' equity     1,741,940       1,830,322   Noncontrolling interests     156       91   Total stockholders' equity     1,742,096       1,830,413   Total liabilities and stockholders' equity   $ 4,353,447     $ 4,192,676     6     Tetra Tech, Inc Consolidated Statements of Income (unaudited - in thousands, except per share data)       Three Months Ended     Nine Months Ended       June 29,     June 30,     June 29,     June 30,       2025     2024     2025     2024   Revenue   $ 1,369,816     $ 1,344,323     $ 4,112,490     $ 3,824,205   Subcontractor costs     (216,800 )     (234,742 )     (658,439 )     (646,828 ) Other costs of revenue     (901,477 )     (886,409 )     (2,766,854 )     (2,556,212 ) Gross profit     251,539       223,172       687,197       621,165   Selling, general and administrative expenses     (86,611 )     (94,042 )     (255,022 )     (263,293 ) Legal contingency costs     -       -       (115,000 )     -   Contingent consideration - fair value adjustments     58       (500 )     2,355       (477 ) Impairment of goodwill     -       -       (92,416 )     -   Income from operations     164,986       128,630       227,114       357,395   Interest expense, net     (8,288 )     (9,912 )     (23,996 )     (29,374 ) Income before income tax expense     156,698       118,718       203,118       328,021   Income tax expense     (42,815 )     (32,894 )     (83,045 )     (90,758 ) Net income     113,883       85,824       120,073       237,263   Net income attributable to noncontrolling interests     (39 )     (14 )     (94 )     (35 ) Net income attributable to Tetra Tech   $ 113,844     $ 85,810     $ 119,979     $ 237,228                                     Earnings per share attributable to Tetra Tech:                                 Basic   $ 0.43     $ 0.32     $ 0.45     $ 0.89   Diluted   $ 0.43     $ 0.32     $ 0.45     $ 0.88                                     Weighted-average common shares outstanding:                                 Basic     263,026       267,575       265,589       267,255   Diluted     264,855       270,260       268,113       269,503     7     Tetra Tech, Inc. Consolidated Statements of Cash Flows (unaudited - in thousands)       Nine Months Ended       June 29,     June 30,       2025     2024   Cash flows from operating activities:                 Net income   $ 120,073     $ 237,263                     Adjustments to reconcile net income to net cash provided by operating activities:                 Depreciation and amortization     43,636       56,718   Amortization of stock-based awards     25,789       23,713   Deferred income taxes     (7,656 )     (9,736 ) Provision for losses on accounts receivables     3,406       -   Impairment of goodwill     92,416       -   Fair value adjustments to contingent consideration     (2,355 )     477   Gain on cash surrender value of life insurance policies     (1,599 )     -   Other non-cash items     3,781       3,769                     Changes in operating assets and liabilities, net of effects of business acquisitions:                 Accounts receivable and contract assets     (65,886 )     (54,286 ) Prepaid expenses and other assets     (21,720 )     (18,437 ) Accounts payable     27,539       18,991   Accrued compensation     (15,991 )     (7,982 ) Contract liabilities     44,486       33,011   Income taxes receivable/payable     32,818       (16,436 ) Cash settled contingent earn-out liability     (7,420 )     -   Other liabilities     85,521       (13,955 ) Net cash provided by operating activities     356,838       253,110                     Cash flows from investing activities:                 Payments for business acquisitions, net of cash acquired     (97,693 )     (93,650 ) Capital expenditures     (13,396 )     (11,324 ) Proceeds from sale of assets     882       666   Proceeds from company-owned life insurance policies     1,934       -   Net cash used in investing activities     (108,273 )     (104,308 )                   Cash flows from financing activities:                 Proceeds from borrowings     715,000       180,000   Repayments on long-term debt     (665,000 )     (200,000 ) Payment of debt issuance costs     (2,738 )     -   Repurchases of common stock     (199,984 )     -   Shares repurchased for tax withholdings on share-based awards     (13,942 )     (12,906 ) Payments of contingent earn-out liabilities     (14,805 )     (29,112 ) Stock options exercised     216       2,690   Dividends paid     (47,992 )     (43,303 ) Principal payments on finance leases     (5,742 )     (4,827 ) Net cash used in financing activities     (234,987 )     (107,458 )                   Effect of exchange rate changes on cash and cash equivalents     (3,434 )     2,146                     Net increase in cash and cash equivalents     10,144       43,490   Cash and cash equivalents at beginning of period     232,689       168,831   Cash and cash equivalents at end of period   $ 242,833     $ 212,321                     Supplemental information:                 Cash paid during the period for:                 Interest   $ 23,837     $ 26,867   Income taxes, net of refunds received of $13.6 million and $4.0 million   $ 55,523     $ 115,933                     Noncash financing activities:                 Excise taxes accrued but not paid   $ 1,513     $ -     8     Tetra Tech, Inc. Regulation G Information June 29, 2025     Reconciliation of Revenue to Revenue, Net of Subcontractor Costs ("Net Revenue")   (in millions)                   2024     2025       2022     2023     1st Qtr     2nd Qtr     6 Mos     3rd Qtr     9 Mos     4th Qtr     Total     1st Qtr     2nd Qtr     6 Mos     3rd Qtr     9 Mos   Consolidated                                                                                                                 Revenue     3,504.0       4,522.6       1,228.3       1,251.6       2,479.9       1,344.3       3,824.2       1,374.5       5,198.7       1,420.6       1,322.1       2,742.7       1,369.8       4,112.5   Subcontractor Costs     (668.5 )     (771.5 )     (213.1 )     (199.0 )     (412.1 )     (234.7 )     (646.8 )     (230.0 )     (876.8 )     (223.3 )     (218.4 )     (441.7 )     (216.8 )     (658.5 ) Net Revenue     2,835.5       3,751.1       1,015.2       1,052.6       2,067.8       1,109.6       3,177.4       1,144.5       4,321.9       1,197.3       1,103.7       2,301.0       1,153.0       3,454.0                                                                                                                     GSG Segment                                                                                                                 Revenue     1,820.9       2,158.9       575.0       597.1       1,172.2       640.6       1,812.7       670.6       2,483.4       751.8       661.4       1,413.2       673.0       2,086.2   Subcontractor Costs     (484.4 )     (523.4 )     (132.3 )     (130.6 )     (263.0 )     (152.3 )     (415.3 )     (158.1 )     (573.4 )     (150.6 )     (140.5 )     (291.1 )     (152.6 )     (443.6 ) Net Revenue     1,336.5       1,635.5       442.7       466.5       909.2       488.3       1,397.4       512.5       1,910.0       601.2       520.9       1,122.1       520.4       1,642.6                                                                                                                     CIG Segment                                                                                                                 Revenue     1,738.4       2,424.6       669.1       671.2       1,340.3       723.6       2,063.9       722.9       2,786.7       688.2       678.9       1,367.1       715.8       2,082.8   Subcontractor Costs     (239.3 )     (309.0 )     (96.6 )     (85.1 )     (181.7 )     (102.2 )     (283.9 )     (90.9 )     (374.8 )     (92.1 )     (96.1 )     (188.2 )     (83.2 )     (271.4 ) Net Revenue     1,499.1       2,115.6       572.5       586.1       1,158.6       621.4       1,780.0       632.0       2,411.9       596.1       582.8       1,178.9       632.6       1,811.4     Reconciliation of Net Income Attributable to Tetra Tech to Adjusted EBITDA (in thousands)                   2024     2025       2022     2023     1st Qtr     2nd Qtr     6 Mos     3rd Qtr     9 Mos     4th Qtr     Total     1st Qtr     2nd Qtr     6 Mos     3rd Qtr     9 Mos   Net Income Attributable to Tetra Tech     263,125       273,420       74,972       76,446       151,418       85,810       237,228       96,154       333,382       747       5,388       6,135       113,844       119,979   Income Tax Expense     85,602       127,526       26,523       31,341       57,864       32,894       90,757       39,266       130,023       14,530       25,700       40,230       42,815       83,045   Interest Expense     11,584       46,537       9,578       9,883       19,461       9,912       29,374       7,897       37,271       7,218       8,491       15,709       8,287       23,996   Depreciation     13,859       19,980       6,951       5,637       12,588       5,713       18,301       5,421       23,722       5,402       5,248       10,650       5,410       16,059   Amortization     13,174       41,226       12,533       12,094       24,627       13,790       38,417       11,538       49,955       10,660       8,629       19,289       8,287       27,577   FX Hedge Gain     (19,904 )     (89,402 )     -       -       -       -       -       -       -       -       -       -       -       -   EBITDA     367,440       419,287       130,557       135,401       265,958       148,119       414,077       160,276       574,353       38,557       53,456       92,013       178,643       270,656                                                                                                                     Contingent Consideration     -       12,255       (37 )     14       (22 )     500       477       2,064       2,541       (366 )     (1,931 )     (2,297 )     (58 )     (2,355 ) Goodwill Impairment     -       -       -       -       -       -       -       -       -       -       92,416       92,416       -       92,416   Acquisition & Integration Expenses     -       49,554       -       -       -       -       -       7,138       7,138       -       -       -       -       -   Legal Contingency Costs     -       -       -       -       -       -       -       -       -       115,000       -       115,000       -       115,000   COVID-19 Credits     (6,486 )     -       -       -       -       -       -       -       -       -       -       -       -       -   Adjusted EBITDA     360,954       481,096       130,520       135,415       265,936       148,619       414,554       169,478       584,032       153,191       143,941       297,132       178,585       475,717     9
the item shown at left
other guidance in this release
Text is the filed exhibit, verbatim.