EX-99.1 2 tm2530975d1_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

NEWS RELEASE

November 12, 2025

 

Tetra Tech Reports Strong Fourth Quarter and Fiscal 2025 Results

 

·Fourth Quarter 2025 Results

‒Record Net Revenue $1.16 billion
‒Record Operating Income of $181 million, up 26% Y/Y
‒Record EPS $0.48, up 37% Y/Y

 

·Fiscal 2025 Results

‒Record Annual Revenue $5.44 billion
‒Record Annual Net Revenue $4.62 billion
‒Annual EPS $0.93; Record Adjusted Annual EPS $1.56, up 24% Y/Y
‒Record Operating Cash Flow $458 million, up 28% 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 fourth quarter and fiscal year ended September 28, 2025.

 

Fourth Quarter 2025 Highlights (Excluding USAID and Dept. of State (DOS))

 

·Revenue increased 6% Y/Y to $1.23 billion
·Net Revenue1 increased 10% Y/Y to $1.07 billion
·Adjusted1 Operating Income increased 23% Y/Y to $168 million
·Adjusted EPS increased 29% Y/Y to $0.44

 

Fiscal 2025 Highlights (Excluding USAID and DOS)

 

·Revenue increased 9% Y/Y to $4.79 billion

 

 

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

 

 

 

 

·Net Revenue increased 10% Y/Y to $4.06 billion
·Adjusted Operating Income increased 24% Y/Y to $563 million
·Adjusted EPS increased 31% Y/Y to $1.45

 

Recent Key Wins

 

·$500 million multiple-award contract for environmental services for USACE Baltimore District
·$249 million multiple-award contract for planning and engineering services for USACE Mobile District
·$240 million single-award contract for environmental assessment services for U.S. Navy
·$240 million multiple-award contract for planning and engineering services for USACE Norfolk District
·$38 million multiple-award contract for transmission and distribution services for an Irish grid operator
·$23 million single-award contract for water engineering services for Portsmouth Water in the U.K.
·$18 million single-award contract for high-voltage energy design services for a U.S. commercial client

 

Quarterly Dividend and Share Repurchase Program

 

On November 10, 2025, Tetra Tech’s Board of Directors approved the Company’s 46th consecutive quarterly dividend at an amount of $0.065 per share, a 12% increase year-over-year, payable on December 12, 2025, to stockholders of record as of December 1, 2025. In the fourth quarter, Tetra Tech repurchased $50 million of common stock. Additionally, as of September 28, 2025, the Company had $598 million remaining under the approved share repurchase programs.

 

Executive Management Comments

 

Dan Batrack, Chairman and CEO, commented, “We finished fiscal 2025 with another strong quarter resulting in record net revenue, record operating income, and significant operating margin expansion. These all-time high results were driven by the continued strong demand for our differentiated high-end consulting services in resilient water management and digital water automation. Our strategy focused on essential water and environmental services has allowed us to successfully navigate the recent changes in U.S. federal government priorities as we achieved record financial performance for 2025.”

 

Roger Argus, President, stated, “Looking forward to fiscal 2026 and beyond, we see increased demand for our high-end services to address the development of water-reliant infrastructure, including data centers and industrial manufacturing. Our high-voltage engineering practice has benefited from these projects with its backlog doubling in the fourth quarter. In addition, our front-end consulting services are critical to the expansion and protection of coastal and marine infrastructure for defense clients around the world.”

 

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 2026, Tetra Tech expects net revenue2 to range from $4.05 billion to $4.25 billion and EPS guidance to range from $1.40 to $1.55. The fiscal 2026 guidance for net revenue projects a range of 5% to 11% year-over-year growth, excluding fiscal 2025 USAID / DOS and episodic disaster recovery activities. For the first quarter of fiscal 2026, Tetra Tech expects net revenue to range from $950 million to $1.0 billion and EPS to range from $0.30 to $0.33.

 

 

2Reconciliation 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.

 

2

 

 

Webcast

 

Investors will have the opportunity to access a live audio-visual webcast and supplemental financial information concerning the fourth quarter of fiscal 2025 results through a link posted on the Company’s website at tetratech.com on November 13, 2025, at 8:00 a.m. (PT).

 

Reconciliation of GAAP and Non-GAAP Items

 

In thousands (except EPS data)

 

   Three Months Ended   Fiscal Year Ended 
  

Sep. 28,

2025

  

Sep. 29,

2024

  

Sep. 28,

2025

  

Sep. 29,

2024

 
Revenue  $1,330,100   $1,374,474   $5,442,590   $5,198,679 
USAID / DOS   (97,771)   (215,267)   (650,344)   (793,029)
Revenue excl. USAID / DOS  $1,232,329   $1,159,207   $4,792,246   $4,405,694 
                     
Revenue  $1,330,100   $1,374,474   $5,442,590   $5,198,679 
Subcontractor costs   (166,791)   (229,989)   (825,230)   (876,817)
Net revenue  $1,163,309   $1,144,485   $4,617,360   $4,321,862 
USAID / DOS   (91,351)   (174,379)   (555,456)   (644,672)
Net revenue excl. USAID / DOS  $1,071,958   $970,106   $4,061,904   $3,677,190 
                     
Operating Income  $181,305   $143,343   $408,419   $500,737 
Contingent consideration   (9,873)   2,064    (12,228)   2,541 
Legal contingency   -    -    115,000    - 
Goodwill impairment   -    -    92,416    - 
Acq. / Integration   -    7,138    -    7,138 
Adjusted Operating Income  $171,432   $152,545   $603,607   $510,416 
USAID / DOS   (3,795)   (16,063)   (40,433)   (55,497)
Adjusted OI excl. USAID / DOS  $167,637   $136,482   $563,174   $454,919 
                     
EPS  $0.48   $0.35   $0.93   $1.23 
Contingent consideration   (0.03)   0.01    (0.03)   0.01 
Legal contingency   -    -    0.35    - 
Goodwill impairment   -    -    0.31    - 
Acq. / Integration   -    0.02    -    0.02 
Adjusted EPS  $0.45   $0.38   $1.56   $1.26 
USAID / DOS   (0.01)   (0.04)   (0.11)   (0.15)
Adj. EPS excl. USAID / DOS  $0.44   $0.34   $1.45   $1.11 

 

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 more than 25,000 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.

 

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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)

 

   September 28,   September 29, 
   2025   2024 
Assets          
Current assets:          
Cash and cash equivalents   167,459    232,689 
Accounts receivable, net   1,158,928    1,051,461 
Contract assets   138,232    129,678 
Prepaid expenses and other current assets   83,434    91,585 
Assets held-for-sale   61,305    - 
Income taxes receivable   15,334    21,970 
Total current assets   1,624,692    1,527,383 
           
Property and equipment, net   66,148    73,065 
Right-of-use assets, operating leases   197,618    177,950 
Goodwill   2,049,874    2,046,569 
Intangible assets, net   121,160    160,585 
Deferred tax assets   106,238    105,529 
Other non-current assets   116,444    101,595 
Total assets   4,282,174    4,192,676 
           
Liabilities and Equity          
Current liabilities:          
Accounts payable   204,725    197,440 
Accrued compensation   346,912    332,096 
Contract liabilities   420,254    351,738 
Short-term lease liabilities, operating leases   69,099    63,419 
Current contingent earn-out liabilities   24,826    26,934 
Liabilities held-for-sale   28,461    - 
Other current liabilities   288,113    247,900 
Total current liabilities   1,382,390    1,219,527 
           
Deferred tax liabilities   21,333    30,162 
Long-term debt   763,363    812,634 
Long-term lease liabilities, operating leases   154,695    140,095 
Non-current contingent earn-out liabilities   32,135    21,812 
Other non-current liabilities   148,094    138,033 
Total liabilities   2,502,010    2,362,263 
           
Equity:          
Preferred stock - authorized, 2,000 shares of $0.01 par value; no shares issued and outstanding at September 28, 2025 and September 29, 2024   -    - 
Common stock - authorized, 750,000 shares of $0.01 par value; issued and outstanding, 261,418 and 267,717 shares at September 28, 2025 and          
September 29, 2024, respectively   2,614    2,677 
Additional paid-in capital   -    35,900 
Accumulated other comprehensive loss   (95,777)   (78,875)
Retained earnings   1,872,948    1,870,620 
Tetra Tech stockholders' equity   1,779,785    1,830,322 
Noncontrolling interests   379    91 
Total stockholders' equity   1,780,164    1,830,413 
Total liabilities and stockholders' equity   4,282,174    4,192,676 

 

6

 

 

Tetra Tech, Inc

Consolidated Statements of Income

(unaudited - in thousands, except per share data)

 

   Three Months Ended   Fiscal Year Ended 
   September 28,   September 29,   September 28,   September 29, 
   2025   2024   2025   2024 
Revenue  $1,330,100   $1,374,474   $5,442,590   $5,198,679 
Subcontractor costs   (166,791)   (229,989)   (825,230)   (876,817)
Other costs of revenue   (889,163)   (899,209)   (3,656,016)   (3,455,422)
Gross profit   274,146    245,276    961,344    866,440 
Selling, general and administrative expenses   (102,714)   (92,731)   (357,737)   (356,024)
Contingent consideration - fair value adjustments   9,873    (2,064)   12,228    (2,541)
Legal contingency costs   -    -    (115,000)   - 
Impairment of goodwill   -    -    (92,416)   - 
Acquisition and integration expenses   -    (7,138)   -    (7,138)
Income from operations   181,305    143,343    408,419    500,737 
Interest expense, net   (6,806)   (7,898)   (30,802)   (37,271)
Income before income tax expense   174,499    135,445    377,617    463,466 
Income tax expense   (46,623)   (39,265)   (129,668)   (130,023)
Net income   127,876    96,180    247,949    333,443 
Net income attributable to noncontrolling interests   (131)   (26)   (225)   (61)
Net income attributable to Tetra Tech  $127,745   $96,154   $247,724   $333,382 
                     
Earnings per share attributable to Tetra Tech:                    
Basic  $0.49   $0.36   $0.94   $1.25 
Diluted  $0.48   $0.35   $0.93   $1.23 
                     
Weighted-average common shares outstanding:                    
Basic   262,184    267,687    264,713    267,364 
Diluted   264,247    271,656    267,123    270,042 
                     
Cash dividends paid  per share   0.065    0.058    0.246    0.220 

 

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Tetra Tech, Inc.

Consolidated Statements of Cash Flows

(unaudited - in thousands)

 

   Fiscal Year Ended 
   September 28,   September 29, 
   2025   2024 
Cash flows from operating activities:          
Net income  $247,949   $333,443 
           
Adjustments to reconcile net income to net cash provided by operating activities:          
Depreciation and amortization   58,276    73,677 
Amortization of stock-based awards   33,946    31,155 
Deferred income taxes   (11,297)   (19,980)
Provision for losses on accounts receivables   3,150    - 
Impairment of goodwill   92,416    - 
Fair value adjustments to contingent consideration   (12,228)   2,541 
Acquisition and integration expenses   -    7,138 
Other non-cash items   9,024    5,369 
Changes in operating assets and liabilities, net of effects of business acquisitions and divestitures:          
Accounts receivable and contract assets   (112,755)   (40,188)
Prepaid expenses and other assets   (30,563)   (20,894)
Accounts payable   2,398    18,091 
Accrued compensation   18,879    6,657 
Contract liabilities   73,489    4,704 
Cash settled contingent earn-out liability   (11,170)   (7,943)
Income taxes receivable/payable   23,227    (35,530)
Other liabilities   72,944    468 
Net cash provided by operating activities   457,685    358,708 
           
Cash flows from investing activities:          
Payments for business acquisitions, net of cash acquired   (97,263)   (93,650)
Capital expenditures   (18,633)   (18,135)
Proceeds from sale of assets   919    742 
Proceeds from company-owned life insurance policies   1,934    - 
Proceeds from divested business, net   2,406    - 
Proceeds from loan repayment from divested business   3,883    - 
Net cash used in investing activities   (106,754)   (111,043)
           
Cash flows from financing activities:          
Proceeds from borrowings   715,000    217,000 
Repayments on long-term debt   (771,027)   (287,000)
Payment of debt issuance costs   (2,738)   - 
Repurchases of common stock   (249,984)   - 
Shares repurchased for tax withholdings on share-based awards   (14,047)   (12,982)
Payments of contingent earn-out liabilities   (15,055)   (46,107)
Stock options exercised   469    3,067 
Dividends paid   (65,039)   (58,828)
Principal payments on finance leases   (7,823)   (6,530)
Net cash used in financing activities   (410,244)   (191,380)
           
Effect of exchange rate changes on cash and cash equivalents   (5,004)   7,573 
           
Net increase (decrease) in cash and cash equivalents   (64,317)   63,858 
Cash and cash equivalents at beginning of year   232,689    168,831 
Cash and cash equivalents at end of year  $168,372   $232,689 
           
Supplemental information:          
Cash paid during the period for:          
Interest  $34,956   $36,855 
Income taxes, net of refunds received of $17.2 million and $4.2 million  $110,830   $180,707 
           
Non-cash financing activities:          
Excise taxes accrued but not paid  $2,010   $- 
           
Reconciliation of cash and cash equivalents to consolidated balance sheets:          
Cash and cash equivalents  $167,459   $232,689 
Cash and cash equivalents included in assets held-for-sale   913    - 
Consolidated cash and cash equivalents  $168,372   $232,689 

 

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Tetra Tech, Inc.

Regulation G Information

September 28, 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    4th Qtr     Total  
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     1,330.1      5,442.6  
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)    (166.8 )     (825.3 ) 
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     1,163.3      4,617.3  
                                                                                   
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     587.7      2,673.9  
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)    (100.5 )     (544.1 ) 
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     487.2      2,129.8  
                                                                                   
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     761.9      2,844.6  
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)    (85.7 )     (357.1 ) 
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     676.2      2,487.5  

 

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    4th Qtr     Total  
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    127,745     247,724  
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    46,624     129,668  
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    6,806     30,802  
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    5,115     21,175  
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    9,524     37,101  
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    195,814     466,470  
                                                                                   
Contingent Consideration   -    12,255    (37)   14    (22)   500    477    2,064    2,541    (366)   (1,931)   (2,297)   (58)   (2,355)   (9,873 )   (12,228 )
Goodwill Impairment   -    -    -    -    -    -    -    -    -    -    92,416    92,416    -    92,416    -     92,416  
Acquisition & Integration Expenses   -    49,554    -    -    -    -    -    7,138    7,138    -    -    -    -    -    -     -  
Legal Contingency Costs   -    -    -    -    -    -    -    -    -    115,000    -    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    185,941     661,658  

 

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