Financial Data and Key Metrics Changes - The company reported net revenue of $987 million for the first quarter, an increase of 8% from the prior year [5] - Operating income rose to $131 million, up 12% year-over-year [5] - Adjusted earnings per share (EPS) increased by 17% to $0.34, while GAAP EPS was reported at $0.40 [5][12] Business Segment Performance - The Government Services segment generated $382 million in revenue, growing 5% despite a U.S. government shutdown [6] - The Commercial and International Group segment's revenue increased by 10% to $605 million, driven by growth in the UK and Ireland [6][7] - Margins for both segments improved by 40 basis points, with Government Services at 18% and Commercial International at 13% [6][7] Market Data and Key Metrics Changes - Federal work increased by 7%, primarily due to projects with the U.S. Army Corps of Engineers [8] - U.S. state and local markets grew by 10%, driven by municipal water treatment and digital water modernization [8] - International work accounted for 48% of total revenues, growing at a rate of 13% [9] Company Strategy and Industry Competition - The company focuses on water supply, treatment, flood control, and environmental stewardship, which remain in high demand [3] - Strategic growth areas include technology and automation, with plans for acquisitions to enhance capabilities [17][24] - The company aims to leverage its strong balance sheet for investments in growth opportunities [16][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in revenue growth despite challenges like the government shutdown, expecting federal orders to increase in the second half of the fiscal year [10][11] - The company anticipates continued strong demand in water and environmental services, with a forecasted revenue growth rate of 5%-10% for international markets [25][26] - Management highlighted the importance of bipartisan support for future growth, particularly in federal spending [59] Other Important Information - The company announced a 12% increase in its quarterly cash dividend, marking the 47th consecutive quarterly dividend [17] - A stock buyback program was initiated, with $50 million repurchased in the first quarter [18] - The company divested its Norway operation, which was deemed non-core, while acquiring Halvik and Providence to enhance its consulting services [77][80] Q&A Session Summary Question: Strength in Federal Business - Management noted that the 7% growth in federal business was supported by advanced planning and strong relationships with clients, particularly the U.S. Army Corps of Engineers [35][38] Question: International Business Performance - The UK and Ireland have shown strong double-digit growth, while Canada is performing well with significant infrastructure investments [40][42] - Australia is recovering from previous declines, moving from -15% growth to flat performance [44][46] Question: Guidance and Market Conditions - Management indicated that guidance reflects a midpoint of 9% revenue growth, with potential risks from government shutdowns impacting the low end of the range [56][58] Question: M&A Focus and Strategy - The company is looking for strategic acquisitions that could justify higher leverage, with a focus on partnerships that transform the industry [65][66] - Management emphasized the importance of maintaining shareholder value while pursuing growth through acquisitions [72][74]

Earnings Call Q1 26 January 29, 2026 Dan Batrack, Chairman & CEO Roger Argus, President & CEO-Designate Steve Burdick, Executive VP & CFO Forward-Looking Statements & Non-GAAP Financial Measures All statements in this communication other than statements of historical fact are "forward-looking statements" for purposes of federal and state securities laws, including any statements of the plans, strategies and objectives for future operations, profitability, strategic value creation, risk profile and investmen ...

Core Viewpoint - Tetra Tech (TTEK) reported quarterly earnings of $0.35 per share, exceeding the Zacks Consensus Estimate of $0.31 per share, with a year-over-year comparison showing no change in earnings per share [1] Group 1: Earnings Performance - The quarterly earnings surprise was +12.90%, with the previous quarter also showing a positive surprise of +12.5% [1][2] - Over the last four quarters, Tetra has consistently surpassed consensus EPS estimates [2] Group 2: Revenue Performance - Tetra reported revenues of $1.04 billion for the quarter ended December 2025, which was 6.60% above the Zacks Consensus Estimate, although it represents a decline from $1.2 billion in the same quarter last year [2] - The company has also exceeded consensus revenue estimates in each of the last four quarters [2] Group 3: Stock Performance and Outlook - Tetra shares have increased by approximately 11.3% since the beginning of the year, significantly outperforming the S&P 500's gain of 1.9% [3] - The future performance of Tetra's stock will largely depend on management's commentary during the earnings call and the outlook for earnings estimates [3][4] Group 4: Earnings Estimates and Industry Outlook - The current consensus EPS estimate for the upcoming quarter is $0.30, with expected revenues of $980 million, while the estimate for the current fiscal year is $1.48 on $4.15 billion in revenues [7] - The Engineering - R and D Services industry, to which Tetra belongs, is currently ranked in the top 17% of over 250 Zacks industries, indicating a favorable outlook [8]

Financial Performance - Revenue for Q1 FY26 totaled $1.21 billion, with net revenue of $1.04 billion, representing an 8% increase excluding USAID/DOS and Q1-25 Hurricanes[3][6] - Operating income was $141 million, and adjusted EBITDA was $147 million, with an adjusted EBITDA margin improvement of 80 basis points year-over-year[3][7] - EPS increased by 17% year-over-year to $0.40, while adjusted EPS was $0.35[3][6] - Revenue for the three months ended December 28, 2025, was $1,210.7 million, a decrease of 15% compared to $1,420.6 million for the same period in 2024[22] - Gross profit for the same period was $220.4 million, slightly down from $221.5 million year-over-year[22] - Net income attributable to Tetra Tech for the three months ended December 28, 2025, was $105.0 million, compared to $0.7 million in the prior year, representing a significant increase[22] - Earnings per share attributable to Tetra Tech was $0.40 for the three months ended December 28, 2025, compared to a loss in the same period last year[22] - Adjusted EBITDA for the three months ended December 28, 2025, was $147.3 million, compared to $153.2 million in the prior year[26] Cash Flow and Operations - Cash from operations was $72 million in Q1 and $517 million over the trailing 12 months[3] - Net cash provided by operating activities was $72.3 million, a substantial increase from $13.1 million in the prior year[24] - Net cash provided by investing activities was $37.5 million, compared to a cash outflow of $3.4 million in the same period last year[24] - Cash and cash equivalents at the end of the period were $269.4 million, up from $248.1 million at the end of the same period last year[24] - Tetra Tech's DSO improved to 51 days, reflecting better cash flow management[7] Strategic Initiatives - Tetra Tech is raising its FY26 net revenue guidance to a range of $4.15 billion to $4.30 billion and adjusted EPS guidance to a range of $1.46 to $1.56[11] - The company announced two strategic acquisitions to enhance its front-end consulting services for defense clients[8] - Significant contracts include a $151 billion ten-year contract for the U.S. Missile Defense Agency and a $500 million contract for environmental services for USACE Baltimore District[7] - The company plans to continue focusing on market expansion and new product development to drive future growth[22] Shareholder Returns - The company repurchased $50 million of common stock in Q1, with $548 million remaining under its share repurchase programs[9] - The company reported a gain on the sale of a divested business amounting to $7.7 million during the quarter[24] Backlog and Future Potential - Backlog at the end of Q1 was $3.95 billion, indicating strong future revenue potential[3][6]

Core Viewpoint - Tetra Tech, Inc. has acquired Halvik Corp to enhance its capabilities in high-end analytics and digital solutions, particularly in the areas of advanced data analytics, systems modernization, and cybersecurity for U.S. defense and civilian agencies [1] Group 1: Acquisition Details - The acquisition of Halvik Corp is aimed at expanding Tetra Tech's offerings in high-end consulting and engineering services [1] - Halvik is recognized for its advisory consulting services, which focus on advanced data analytics and cybersecurity [1] Group 2: Strategic Implications - This acquisition positions Tetra Tech to better serve U.S. defense and civilian agencies by integrating Halvik's expertise into its existing service portfolio [1] - The move reflects Tetra Tech's commitment to enhancing its digital solutions and analytics capabilities in the consulting sector [1]

Group 1: Company Overview - Cemex (CX) is a notable stock in the Construction sector, which consists of 93 individual stocks ranked 16 in the Zacks Sector Rank [2] - Cemex currently holds a Zacks Rank of 2 (Buy), indicating a favorable outlook based on earnings estimate revisions [3] Group 2: Performance Metrics - The Zacks Consensus Estimate for Cemex's full-year earnings has increased by 15.7% in the past quarter, reflecting stronger analyst sentiment and an improving earnings outlook [4] - Year-to-date, Cemex has gained approximately 6.8%, outperforming the average gain of 4.7% for the Construction sector [4] Group 3: Industry Comparison - Cemex is part of the Building Products - Concrete and Aggregates industry, which includes 5 companies and is currently ranked 110 in the Zacks Industry Rank [6] - The Building Products - Concrete and Aggregates industry has seen a year-to-date gain of about 24.7%, indicating that Cemex is slightly underperforming its industry peers [6] Group 4: Competitor Analysis - Tetra Tech (TTEK), another stock in the Construction sector, has a year-to-date return of 5.8% and also holds a Zacks Rank of 2 (Buy) [5] - Tetra Tech belongs to the Engineering - R and D Services industry, which is ranked 103 and has moved up by 7.6% year to date [7]

Core Insights - Tetra Tech (TTEK) is experiencing near-term challenges due to the winding down of low-margin work from USAID and the Department of State, but its core markets are showing significant improvement [1] - The company's core revenue remains strong, driven by steady performance in its primary sectors [1] Financial Performance - The article highlights that despite the challenges, Tetra Tech's core revenue is robust, indicating a positive trend in its main business areas [1]

Core Viewpoint - Tetra Tech (TTEK) shows potential for further upside, with a mean price target of $42.4 indicating a 26.3% increase from its current price of $33.58 [1] Price Targets - The average price target consists of five estimates ranging from a low of $38.00 to a high of $48.00, with a standard deviation of $3.65, suggesting a consensus among analysts [2] - The lowest estimate indicates a 13.2% increase, while the highest suggests a 42.9% upside [2] - A low standard deviation indicates greater agreement among analysts regarding price movement [9] Analyst Sentiment - Analysts are optimistic about TTEK's earnings prospects, as evidenced by upward revisions in EPS estimates, which correlate with potential stock price increases [11] - Over the last 30 days, the Zacks Consensus Estimate for the current year has risen by 1.4%, with one estimate increasing and no negative revisions [12] - TTEK holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [13] Caution on Price Targets - While price targets are commonly referenced, they can mislead investors, as empirical research shows they often do not accurately predict stock price movements [7][10] - Analysts may set optimistic price targets due to business incentives, which can inflate expectations [8]

Core Insights - The U.S. Stormwater Management Market is projected to grow from USD 8.25 billion in 2025 to USD 15.05 billion by 2033, with a CAGR of 7.8% [1][6] Market Growth Drivers - There is an increasing demand for eco-friendly stormwater management solutions due to a growing emphasis on sustainability in urban design and construction [1][2] - Local governments are seeking robust infrastructure solutions to comply with environmental regulations, driving market expansion and innovation [2] Market Segmentation By Service Type - In 2024, Installation Services accounted for approximately 43% of total revenue, driven by urban development and infrastructure renewal [7] - The Annual Maintenance Services segment is expected to grow at the largest CAGR during the forecast period [7] By Solution Type - The Detention & Infiltration segment held the largest market share in 2024, essential for managing stormwater runoff [8] - Biofiltration systems are projected to experience the largest CAGR, utilizing vegetation and microorganisms for stormwater treatment [8] By End-user - The Community, Government & Military segment captured the largest market share in 2024, influenced by stringent regulations and environmental mandates [9] - The Commercial segment is expected to grow at the largest CAGR, as businesses adopt stormwater management systems to meet environmental standards [10] Regional Insights - The U.S. held the largest market share in 2024 due to significant infrastructure needs, urbanization, and strict environmental regulations [11] Recent Developments - A survey by Advanced Drainage Systems revealed that over half of Americans are concerned about flooding, with 64% believing stormwater negatively impacts their communities [12] Key Market Players - Leading companies in the U.S. stormwater management market include Advanced Drainage Systems, Contech Engineered Solutions, and Hydro International among others [5]

Core Thesis - Tetra Tech, Inc. (TTEK) is viewed as a compelling investment opportunity due to its resilience as a global engineering and consulting firm focused on water, environmental, and sustainable infrastructure solutions [2][6] Financial Performance - As of December 1st, TTEK's share price was $34.48, with trailing and forward P/E ratios of 37.10 and 22.57 respectively [1] - EPS is projected to grow by 10-11% in 2026, even in a worst-case scenario without USAID recovery [3] - Projected EPS is around $2 by 2027, indicating potential for multiple expansion and sustainable long-term returns [6] Revenue Diversification - The company's revenue is diversified across various sectors: 30% from U.S. federal, 10% from state and local, 10% from commercial, and 40% from international markets [2] - This diversification helps mitigate risks from funding cuts, such as the recent 40% drop in stock value due to USAID funding cuts [2] Operational Strategy - TTEK's asset-light, labor-intensive model generates exceptional free cash flow, supporting continued mergers and acquisitions in digital water and industrial automation [4] - The company is embedded in multi-year, multi-award contracts, which support high-single-digit organic growth and margin improvement [3] Market Position and Competitive Advantage - TTEK's expertise in complex water and environmental projects, along with proprietary digital solutions and strong client relationships, creates a significant competitive moat [5] - The early adoption of digital automation and AI positions TTEK ahead of its peers [5] Growth Catalysts - Near-term catalysts for growth include U.S. federal task-order conversion, UK AMP8 ramp, state and local water funding, PFAS regulatory work, and increased demand for disaster response [6] - Structural tailwinds such as water scarcity, climate resilience, and regulatory compliance support durable demand across U.S. federal, state, and international markets [4]