Company Performance and Rankings - Tetra Tech ranked 1 in Water Treatment and Desalination for 12 consecutive years and also achieved top rankings in various consulting and environmental categories in 2025[12]. - In fiscal 2025, Tetra Tech worked on over 100,000 projects across more than 100 countries, employing over 25,000 associates[13]. - The company emphasizes a strong project management culture, delivering over 100,000 projects annually with a focus on client needs[14]. - Tetra Tech's mission is to solve global challenges in water and the environment, positively impacting lives worldwide[14]. Revenue and Financials - Revenue distribution by reportable segment in fiscal 2025: Government Services Group (GSG) at 49.1% and Commercial/International Services Group (CIG) at 52.3%[26]. - U.S. federal government clients accounted for 31.6% of revenue in fiscal 2025, with USAID contributing 10.6% and DoD 11.6%[45]. - Fixed-price contracts represented 43.5% of total revenue in fiscal 2025, an increase from 38.8% in fiscal 2024[46]. - Time-and-materials contracts accounted for 42.6% of revenue in fiscal 2025, down from 45.0% in fiscal 2024[46]. - Revenue from U.S. state and local government clients increased to 14.5% in fiscal 2025 from 11.8% in fiscal 2024[45]. - The backlog at the end of fiscal 2025 was $4.1 billion, with GSG and CIG reporting backlogs of $1.98 billion and $2.22 billion, respectively[77]. - Approximately 70% of the backlog is expected to be recognized as revenue in fiscal 2026[75]. - 37.4% of the company's revenue was generated from international operations, primarily in Australia, Canada, Europe, and the UK[105]. Acquisitions and Growth Strategy - The company acquired Carron + Walsh in Q2 fiscal 2025 and SAGE Group Holdings in Q3 fiscal 2025, enhancing its service offerings in Europe and Australia[67]. - In fiscal 2023, the acquisition of RPS Group plc was completed for $784 million, funded by debt and foreign exchange proceeds[69]. - The company’s growth strategy includes selective acquisitions to enhance service offerings and geographic presence[59]. - The company has made and expects to continue making acquisitions, which could disrupt operations and impact business results[168]. Market and Competitive Environment - The company operates in a competitive market, facing competition from firms such as AECOM, Jacobs Solutions, and WSP Global[74]. - The company operates in a highly competitive environment, which may force price concessions and impact market share[103]. - U.S. government contracts are increasingly awarded through competitive procurement processes, which may lead to smaller and shorter-duration work awards, impacting revenue[142]. Risks and Challenges - The company faces risks related to project completion, which could lead to significant additional costs or loss of profitability if performance standards are not met[101]. - Demand for the company's services is cyclical and vulnerable to economic downturns, which could adversely affect revenue and profits[102]. - Economic and political uncertainties globally may constrain client spending and impact the company's revenue and profitability[108]. - The company may incur liquidated damages if it fails to meet contractual schedules or performance requirements, affecting operating results[113]. - The loss of key personnel could impair the company's ability to provide services effectively and impact future success[110]. - The company may face challenges in obtaining necessary government-granted eligibility, which could hinder its ability to win new business[146]. Compliance and Regulatory Environment - The company’s operations are subject to various government regulations, including environmental laws and government procurement rules[78][82]. - The company must comply with various procurement laws and regulations as a U.S. government contractor, with potential sanctions for violations[173]. - The company has policies to monitor legal and regulatory compliance, but international operations expose it to various risks that could harm financial results[107]. Sustainability and Corporate Responsibility - The company maintains a sustainability program aimed at reducing GHG emissions and improving operational practices, aligning with the UN Global Compact principles[61]. - The company is committed to maintaining a healthy and safe work environment, providing training to all associates[91]. Cybersecurity and Data Privacy - Cybersecurity incidents could adversely impact the company's operations and result in significant costs and reputational harm[133]. - The Board of Directors reviews the adequacy of the company's information security policies and practices, ensuring oversight of cybersecurity risks[204]. - The Chief Information Officer, with over 18 years of experience, manages the assessment and response to material cybersecurity threats[206]. - The company is subject to stringent U.S. and foreign laws related to data privacy and security, with potential adverse consequences for non-compliance[190]. - The California Consumer Privacy Act (CCPA) imposes specific requirements for businesses regarding personal data of California residents, including administrative fines for violations[191]. Financial Obligations and Stockholder Impact - Servicing debt requires significant cash flow, and the company may not generate sufficient cash flow to meet its debt obligations[147]. - The credit agreement includes restrictive covenants that may limit the company's ability to pursue certain business strategies[150]. - The conversion of convertible notes may dilute stockholder ownership and potentially depress the stock price[161]. - The company may not be able to continue paying dividends, which could negatively affect its stock price[197]. - Delaware law may impede or discourage a merger or takeover, even if it would benefit stockholders[198].

Core Insights - American Rare Earths (ARR) has expanded its partnership with Tetra Tech to explore U.S. Government funding opportunities for the Halleck Creek project [1][2][4] - Tetra Tech has been involved in Halleck Creek's mineral processing testing and engineering since 2023, and will continue to provide technical support [2][3] - The collaboration aims to enhance the project's visibility and secure funding to support the U.S. critical minerals supply chain [4][5] Company Overview - American Rare Earths is focused on reshaping the U.S. rare earths industry through its Halleck Creek project in Wyoming, which is a significant rare earth deposit [7][8] - The project is strategically located on Wyoming State land, allowing for cost-efficient open-pit mining and streamlined permitting processes [7][8] - Halleck Creek aims to reduce U.S. reliance on rare earth imports, particularly from China, while addressing the growing demand for these critical elements [8] Industry Context - The U.S. Federal Government is prioritizing the development of critical minerals supply chains to enhance national security and reduce dependence on foreign sources [4][5] - The current U.S. rare earth supply chain is vulnerable due to reliance on a single producing mine, highlighting the need for diversification [5] - Tetra Tech's expertise in securing government contracts and grants will be instrumental in advancing the Halleck Creek project [7]

Core Insights - Tetra Tech, Inc. (TTEK) reported adjusted earnings of 45 cents per share for Q4 fiscal 2025, exceeding the Zacks Consensus Estimate of 40 cents and management's guidance of 38-43 cents, marking an 18.4% year-over-year increase driven by strong segment performance [1][9] Revenue & Segmental Performance - Tetra Tech generated revenues of $1.33 billion, a 3.2% year-over-year decrease, while adjusted net revenues were $1.16 billion, reflecting a 16.2% year-over-year increase, surpassing management's guidance of $1.04-$1.1 billion and the Zacks Consensus Estimate of $1.06 billion [2][9] - The backlog at the end of Q4 was $4.14 billion, down 23% year over year [3] - Revenues from U.S. Federal customers increased by 22% year over year, accounting for 21% of total revenues, while U.S. Commercial sales decreased by 2% due to lower renewable energy sales [4] - U.S. State and Local sales rose by 19% year over year, driven by municipal water infrastructure and digital water automation, and international sales increased by 9% year over year, supported by the UK's water and Canada's clean energy programs [5] Margin Profile - Subcontractor costs totaled $166.8 million, down 27.5% year over year, while other adjusted costs of revenues were $889.2 million, down 1.1% [6] - Adjusted operating income increased by 12.4% year over year to $171.4 million, with the adjusted margin rising by 180 basis points to 12.9% [7] Balance Sheet and Cash Flow - At the end of Q4, Tetra Tech had cash and cash equivalents of $167.5 million, down from $232.7 million a year ago, and long-term debt decreased to $763.4 million from $812.6 million [8] - In fiscal 2025, Tetra Tech generated net cash of $457.7 million from operating activities, up from $358.7 million in the prior year, with capital expenditure at $18.6 million, a 2.7% year-over-year increase [10] Shareholder-Friendly Policies - Tetra Tech distributed dividends totaling $65 million in fiscal 2025, an increase from $58.8 million in the previous year, and repurchased shares worth $250 million [11] Fiscal 2026 Outlook - For fiscal 2026, Tetra Tech anticipates net revenues in the range of $4.05-$4.25 billion, a decrease from $4.62 billion in fiscal 2025, with adjusted earnings projected at $1.40-$1.55 per share, down from $1.56 per share in fiscal 2025 [12] - For Q1 fiscal 2026, management estimates net revenues of $950 million-$1.0 billion and adjusted earnings of 30-33 cents per share [13]

Core Insights - Tetra Tech Inc. (NASDAQ:TTEK) has seen a significant stock price increase of 15.29% to close at $37.41, driven by investor interest ahead of its upcoming dividend payment [1] - The company announced a quarterly dividend of $0.065 per share, representing a 12% year-on-year increase, payable on December 12 [2] - For the fiscal year ending September 2025, Tetra Tech reported a net income of $247.7 million, a 26% decrease from the previous year, but a 33% increase in net income for the fourth quarter [3] Financial Performance - Tetra Tech's net revenues for the full fiscal year grew by 7% to $4.6 billion, while fourth-quarter revenues increased by 1.7% to $1.16 billion [4] - The company projects fiscal year 2026 net revenues between $4.05 billion and $4.25 billion, indicating a year-on-year growth of 5% to 11% [4] - Expected net revenues for the first quarter of fiscal year 2026 are estimated at $950 million to $1 billion [4] Strategic Outlook - The company anticipates increased demand for its high-end services related to water-reliant infrastructure, with a notable backlog growth in its high-voltage engineering practice [5] - Tetra Tech's consulting services are positioned as essential for the expansion and protection of coastal and marine infrastructure, particularly for defense clients globally [5]

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Financial Data and Key Metrics Changes - Tetra Tech reported record net revenue of $1.07 billion for Q4 2025, a 10% increase from the previous year [6] - Operating income reached $168 million, up 23%, with earnings per share growing by 29% to $0.44 for the quarter [6][7] - Fiscal year 2025 revenue increased by 7%, while operating income rose by 18%, and EBITDA increased by 13% [13][14] Business Line Data and Key Metrics Changes - Government Services Group (GSG) revenue grew by 17% to $396 million in Q4, with a margin performance of 22.9%, up 330 basis points from the prior year [8] - Commercial International Group revenue increased by 7% to $676 million, with margins excluding Australia up by about 60 basis points [8] - U.S. federal work accounted for 21% of total business, up 22% from the prior year, primarily driven by contracts with the U.S. Army Corps of Engineers [9] Market Data and Key Metrics Changes - International work constituted about 45% of overall business, growing at a 9% rate, with notable increases in the UK water business and Canadian clean energy [9] - U.S. state and local markets grew by 19%, driven by municipal water treatment and digital water modernization [9] - U.S. commercial work saw a slight decline, impacted by reductions in renewable energy work, but high-voltage transmission work is rapidly growing due to increased energy demand [9] Company Strategy and Development Direction - Tetra Tech focuses on high-end consulting and leadership in water services, which are expected to be in higher demand in the fastest-growing markets [4][20] - The company aims to capitalize on large global investments in water-reliant infrastructure, with a total addressable market in the hundreds of billions [20] - Tetra Tech is positioned to benefit from increased defense budgets and infrastructure projects, particularly in coastal resiliency and flood protection [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate changes in U.S. federal government priorities and maintain record financial performance [4] - The outlook for fiscal year 2026 includes expected growth rates of 5-10% for international and U.S. commercial work, and 10-15% for state and local work [30][32] - The company anticipates a strong start to fiscal year 2026, supported by ongoing demand for high-end water services [33] Other Important Information - Tetra Tech's backlog reached $4.14 billion, with a strong quarter of contract awards, including over $1.2 billion in new contracts with U.S. defense agencies [11] - The company announced a 12% increase in its quarterly dividend, marking the 42nd consecutive quarterly dividend with annual double-digit increases [18] - Tetra Tech's net debt amounted to about $600 million, with a leverage ratio of 0.9 times EBITDA, indicating a strong balance sheet [16] Q&A Session Summary Question: Why is revenue growth expected to decouple from backlog growth this year? - Management explained that the U.S. federal government's funding has become shorter in duration, leading to smaller task orders, while state and local work continues to grow, keeping the backlog flat [36][38] Question: Can you provide details on international business performance? - The strongest growth was seen in the UK and Europe, particularly in water programs, while Canada is expected to improve due to recent infrastructure spending [42][44] Question: How was the fiscal 2026 guidance range built? - The guidance reflects expected growth rates across various sectors, with potential deviations based on clarity in international markets and U.S. state department funding [51][57]

Financial Data and Key Metrics Changes - Tetra Tech reported record net revenue of $1.07 billion for Q4 2025, a 10% increase from the previous year [6] - Operating income reached $168 million, up 23%, with significant operating margin expansion, marking the highest level in over 30 years [6][15] - Earnings per share grew by 29% to $0.44 for the quarter [6] Performance by Business Lines - Government Services Group (GSG) revenue grew by 17% to $396 million in Q4, with a record margin performance of 22.9%, up 330 basis points from the prior year [8] - Commercial International Group (CIG) revenue increased by 7% to $676 million, with margins excluding Australia up about 60 basis points [8] - The overall performance across all business sectors demonstrated strong momentum, contributing to record financial results [6][8] Market Data and Key Metrics Changes - International work accounted for approximately 45% of overall business, growing at a 9% rate, with notable increases in the UK water business and Canadian clean energy [9] - U.S. state and local markets experienced a 19% growth rate, driven by municipal water treatment and digital water modernization [9] - U.S. federal work increased by 22%, now representing 21% of the business, primarily due to contracts with the U.S. Army Corps of Engineers [10] Company Strategy and Development Direction - The company focuses on high-end consulting and leadership in water services, which are expected to be in higher demand in the fastest-growing markets [4][20] - Tetra Tech is well-positioned to capitalize on global investments in water-reliant infrastructure, with a total addressable market in the hundreds of billions [20][21] - The company aims to enhance its fixed-price work, which has increased to nearly 50% of revenue, contributing to higher margins [72] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate changes in U.S. federal government priorities and maintain strong financial performance [4][6] - The outlook for fiscal year 2026 includes expected growth rates of 5-10% for international and U.S. commercial work, and 10-15% for state and local work [30][31] - The company anticipates a strong start to fiscal year 2026, supported by ongoing demand for high-end water services [33] Other Important Information - Tetra Tech's backlog reached $4.14 billion, with a strong quarter of contract awards, including over $1.2 billion in new contracts with U.S. defense agencies [10][11] - The company announced a 12% increase in its quarterly dividend, marking the 42nd consecutive quarterly dividend with annual double-digit increases [18] - Tetra Tech's net debt was approximately $600 million, with a leverage ratio of 0.9 times EBITDA, indicating a strong balance sheet [16] Q&A Session Summary Question: Why is revenue growth expected to decouple from backlog growth this year? - Management explained that the U.S. federal government's funding has become shorter in duration, leading to more frequent but smaller task orders, while state and local work continues to grow, keeping the backlog flat [36][40] Question: Can you provide insights on the performance of international business lines? - The strongest growth was seen in water programs in the UK and Europe, with Canada expected to improve due to recent infrastructure spending, while Australia has stabilized after previous declines [42][44] Question: How did you build out the revenue guidance for fiscal 2026? - The guidance reflects expected growth rates across various sectors, with considerations for potential impacts from government shutdowns and international trade clarity [50][56]

Earnings Call Q4 25 November 13, 2025 Dan Batrack, Chairman & CEO Steve Burdick, Executive VP & CFO Roger Argus, President 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 investment strategies, a ...

Core Points - U.S. stocks experienced a decline, with the Dow Jones index dropping over 100 points on Thursday [1] - Spectrum Brands Holdings Inc reported a quarterly adjusted EPS of $2.61, significantly exceeding the analyst consensus estimate of $0.86 [1] - The company's quarterly sales were $733.500 million, which fell short of the analyst consensus estimate of $741.111 million [1] Company Performance - Spectrum Brands Holdings shares surged 13.2% to $60.28 following the earnings report [2] - Ondas Holdings Inc saw a 24.4% increase in shares to $6.86 after reporting better-than-expected third-quarter results and raising FY25 sales guidance [4] - Firefly Aerospace Inc's shares rose 21.7% to $22.29 after exceeding quarterly financial expectations and raising FY25 sales guidance [4] - Cellebrite DI Ltd shares increased by 21.7% to $19.44 after reporting strong third-quarter results and raising FY25 sales guidance [4] - Sealed Air Corp shares gained 19.9% to $43.60 [4] - Dillard's Inc reported better-than-expected quarterly results, leading to an 18.3% rise in shares to $720.00 [4] - Digi International Inc shares jumped 17.5% to $42.30 following positive quarterly results [4] - Sally Beauty Holdings Inc shares rose 17.5% to $17.27 after reporting upbeat quarterly results [4] - Tetra Tech Inc gained 11.9% to $36.31 following strong quarterly earnings [4] - On Holding AG shares increased by 7.4% to $44.58 after reporting positive third-quarter earnings and issuing FY2025 sales guidance above expectations [4] - Nice Ltd shares rose 6.3% to $132.14 following strong quarterly sales [4]

Core Insights - Tetra Tech reported quarterly earnings of $0.45 per share, exceeding the Zacks Consensus Estimate of $0.40 per share, and showing an increase from $0.38 per share a year ago, resulting in an earnings surprise of +12.50% [1] - The company achieved revenues of $1.16 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 9.12%, and showing a slight increase from $1.14 billion year-over-year [2] Earnings Performance - Tetra Tech has consistently surpassed consensus EPS estimates over the last four quarters, indicating strong performance in earnings [2] - The company also topped consensus revenue estimates four times in the past four quarters, reflecting robust revenue growth [2] Stock Performance and Outlook - Tetra shares have declined approximately 19.7% year-to-date, contrasting with the S&P 500's gain of 16.4%, indicating underperformance in the market [3] - The future performance of Tetra's stock will largely depend on management's commentary during the earnings call and the subsequent revisions of earnings estimates [3][4] Earnings Estimates and Industry Outlook - The current consensus EPS estimate for the upcoming quarter is $0.30 on revenues of $968 million, while for the current fiscal year, it is $1.46 on revenues of $4.08 billion [7] - The Pollution Control industry, to which Tetra belongs, is currently ranked in the top 35% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]