Tetra Tech Reports Strong First Quarter Results and Raises Full Fiscal Year Guidance

Tetra Tech, Inc. (NASDAQ: TTEK), today announced results for the first quarter ended December 31, 2023.

As the pure play global leader in water and environmental consulting and engineering, Tetra Tech produces higher margins, organic growth rates and cash flows than the industry. For fiscal 2024, Tetra Tech is raising guidance for increased EPS growth of 20% with a 20% IFRS EBITDA¹ margin.

In the past 90 days, the Company was awarded more than 1,000 individual high-end consulting projects addressing the entire water cycle. During the first quarter of fiscal 2024, Tetra Tech announced the award of a $5 billion water framework contract for the Republic of Ireland; an $800 million U.S. Army Corps of Engineers PFAS remediation contract; and a $450 million Great Lakes environmental restoration contract.

First Quarter Highlights

• Revenue increased 37% to $1.23 billion with double-digit organic growth
• EBITDA increased 32% to $131 million; on pace to reach $575 million in FY24, doubling in the past 3 years
• Record first quarter EPS of $1.40
• Largest first quarter backlog ever, up 24% year-over-year
• Industry leading DSO of 55 days
• RPS Group integration exceeding expectations:
  - RPS EBITDA margin exceeded 10%, up more than 600 basis points in less than one year
  - RPS revenue synergies with more than $100 million in new contracts won

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¹Non-GAAP financial measures which the Company believes provide valuable perspectives on its business results. Refer to tables in the Regulation G Information for reconciliations to the comparable GAAP metrics.

Executive Management Comments

Dan Batrack, Chairman and CEO, commented, “Tetra Tech began fiscal 2024 with a strong first quarter as revenue was up in all of our key end markets, building on our record performance of the prior year. Based on the strength of our end markets, our strong results in the first quarter, and the increasing realization of revenue synergies with RPS, we have raised our full year guidance for both net revenue and EPS, with a forecasted 20% growth in EPS for fiscal 2024.”

Steve Burdick, Chief Financial Officer, said, “In addition to our record first quarter revenue and earnings, we continue to generate strong positive operating cash flow with $353 million over the trailing twelve months, which is 152% of net income for the same period. This annual cash generation continues our track record of cash flow exceeding net income every year for the last two decades.”