Tetra Tech, Inc. · NASDAQ:TTEK
Tetra Tech — Q4 2024 Earnings Presentation
19 slides from Tetra Tech's earnings presentation, Nov 14, 2024
Slide 1: Q4 Earnings Call
Q4 Earnings 24 Call November 14, 2024 Dan Batrack, Chairman & CEO Steve Burdick, Executive VP & CFO Leslie Shoemaker, Chief Innovation Officer
Slide 2: Forward-Looking Statements & Non-GAAP Financial Measures
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 opera
Slide 3: Record Results in Q4-24 and Fiscal 2024
Record Results in Q4-24 and Fiscal 2024 Q4-24 RECORD HIGH FY24 RECORD HIGH Revenue $1.37B ✓ $5.20B ✓ Net Revenue $1.14B ✓ $4.32B ✓ Operating Income $153M ✓ $510M ✓ Adjusted EPS (Pre-split) $1.91 ✓ $6.32 ✓ Adjusted EPS (Post-split) $0.38 ✓ $1.26 ✓ Backlog $5.38B ✓ $5.38B ✓ Note: Operating income and
Slide 4: Q4-24 Record Results
Q4-24 Record Results Revenue Operating Income Backlog $1.37B $153M $5.38B $1.26B $135M $4.79B +9% +12% +13% Q4-23 Q4-24 Q4-23 Q4-24 Q4-23 Q4-24 All-time High Revenue, Earnings and Backlog 4
Slide 5: Q4-24 Performance by Segment
Q4-24 Performance by Segment Segment Net Revenue ($M) OI Margin (%) Comments $513 16.1% $457 15.7% • Advanced Water Treatment Up GSG GSG +12% +40 • International Development Up bps Q4-23 Q4-24 Q4-23 Q4-24 $632 15.6% $601 13.3% • U.K. Water Up CIG CIG +230 • RPS Margin Up +5% bps Q4-23 Q4-24 Q4-23 Q4
Slide 6: Q4-24 Revenue by Customer
Q4-24 Revenue by Customer % of Rev. Net Rev. Customer Comments Rev. Y/Y Y/Y • Coastal Marine Navigation up U.S.U.S. Federal State and Local 33% +13%* +12%* • Civilian Agencies Environmental Up • Advanced Water Treatment up U.S. State & Local 12% +9% +5% • Water System Modernization up • Environmenta
Slide 7: Q4-24 Backlog and Recent Key Contract Wins
Recent Key Contract Wins Q4-24 Backlog • $12 billion multiple-award contract to deliver innovative technology solutions for Defense Logistics Agency • $5 billion multiple award contract to address complex resiliency Q4-24 Book to Bill: 1.1x $5.38B challenges in countries around the world for USAID +
Slide 8: FY24 Financial Overview (GAAP)
FY24 Financial Overview (GAAP) Revenue ($ in billions) Net Revenue ($ in billions) $5.20 $4.32 $4.52 $3.75 +15% Y/Y +15% Y/Y FY23 FY24 FY23 FY24 Operating Income ($ in millions) Diluted EPS (Post-split) $501 $1.23 +21% Y/Y $1.02 $358 FY24 Pre-split +40% Y/Y GAAP: $6.17 ADJ: $6.32 FY23 FY24 FY23 FY24
Slide 9: FY24 Financial Overview
FY24 Financial Overview Cash Flow from Operations ($ in millions) Days Sales Outstanding Net Debt Leverage 1.4x $368 54.9 Reduced from $359 FY24: 108% 54.4 Industry 1.0x 2.2x after RPS Cash Flow to leading DSO acquisition Net Income (Q2-23) FY23 FY24 FY23 FY24 FY23 FY24 Strong Cash Flow from Operati
Slide 10: Capital Allocation
Capital Allocation • $800M existing liquidity available • Balanced debt: fixed (2/3) & variable (1/3) Debt Facilities • FY24 Interest rate of 3.94%, lower by 143 bps Y/Y • Invest in organic & acquisitive strategic priorities Cash Flow • Strong strategically aligned pipeline $359M Acquisitions • Tech
Slide 11: Global Priority Water Programs
Global Priority Water Programs U.K. Water Utilities U.S. Municipal Water AMP 8: Triple Investment in New Water Funding Passed in Nov. 2024 Infrastructure Recent Wins: Recent Wins: • $1 billion to support key water and wastewater • $56 million to design advanced water treatment and PFAS infrastructur
Slide 12: Coastal Resilience
Coastal Resilience Market Drivers • Ninety-eight $1B+ flooding events since 2020* Tetra Tech Differentiation • 50-year leading position in shoreline protection design • Nature-based solutions such as hybrid reefs, marsh restoration, and barrier island creation • Subscription software solutions for e
Slide 13: 2025 U.S. Federal Spending Outlook
2025 U.S. Federal Spending Outlook U.S. Commercial Forecasted Federal Spending Priorities 20% • Infrastructure Defense resiliency U.S. Federal 30% Civilian • Coastal resiliency • Reset of funding USAID priorities International U.S. State & Local 40% 10% 2025 U.S. Federal Growing 5% to 10% Y/Y 13
Slide 14: Fiscal 2025 Outlook
Fiscal 2025 Outlook % of Customer Growth Rate Drivers Rev. • Defense Environmental U.S.U.S. Federal State and Local 30% 5% to 10% • Critical Infrastructure • Modernization of Water Treatment Plants U.S. State & Local 10% 10% to 15% • Treatment of Emerging Contaminants • Water Used in Advanced Manufa
Slide 15: FY25 Guidance
FY25 Guidance Net Revenue EPS Q1 2025 Growth* Net Revenue EPS Q1-25 $1.090B - $1.150B $0.32-$0.34 +10% +18% +15% FY-25 $4.565B - $4.765B $1.40-$1.50 Assumptions FY-25 Q1-24 Q1-25 Q1-24 Q1-25 • Intangible amortization of $35M or $0.09 per share *Midpoint of the range o Q1-25: $10M, Q2-25: $9M, Q3-25:
Slide 16: Summary
Summary • Strong demand for high-end water and environmental services • All-time high revenue, operating income, and EPS • Record backlog $5.4B entering FY25 • FY25 EPS guidance up 15% Y/Y 16
Slide 17: Questions & Answers
[Te] TETRA TECH Questions & Answers
Slide 18: FY24 GAAP Reconciliation Summary
FY24 GAAP Reconciliation Summary ($ in millions, except EPS) Operating EPS EPS Q4-24 Income EBITDA (Post-split) (Pre-split) GAAP $143 $160 $0.35 $1.77 Earn-out adjustments 2 2 - 0.03 Acquisition & Integration 7 7 0.03 0.11 Adjusted $153 $169 $0.38 $1.91 Operating EPS EPS FY24 Income EBITDA (Post-spl
Slide 19: FY23 GAAP Reconciliation Summary
FY23 GAAP Reconciliation Summary ($ in millions, except EPS) Operating EPS EPS Q4-23 Income EBITDA (Post-split) (Pre-split) GAAP $107 $124 $0.20 $1.00 Earn-out adjustments 4 4 0.01 0.06 Integration Costs 24 24 0.07 0.35 Tax Related Items - - 0.05 0.25 Adjusted $135 $153 $0.33 $1.66 FY23 Operating In