Tetra Tech : Q4 2024 Earnings Conference Slides

Q4

24

Earnings Call

November 14, 2024

Dan Batrack, Chairman & CEO Steve Burdick, Executive VP & CFO

Leslie Shoemaker, Chief Innovation Officer

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, and any statements regarding future economic conditions or performance, and the expected financial and operational results of Tetra Tech. Although we believe that the expectations reflected in our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. These statements involve risks and uncertainties, such as those related to fluctuations in Tetra Tech's quarterly operating results and stock price, and the other risks detailed from time to time in Tetra Tech's SEC reports. Any forward-looking statements are made as of the date hereof. We do not intend, and undertake no obligation, to update any forward-looking statement.

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 available at tetratech.com/investors.

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Q4-24 Record Results

Revenue

$1.37B

$1.26B

Operating Income

Backlog

$153M	$5.38B
$135M	$4.79B

+9%

+13%

+12%

Q4-23 Q4-24

Q4-23

Q4-24

Q4-23

Q4-24

All-time High Revenue, Earnings and Backlog

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Q4-24 Performance by Segment

Segment	Net Revenue ($M)	OI Margin (%)	Comments
		$513		16.1%
	$457		15.7%
GSG				•	Advanced Water Treatment Up
+12%		+40	•	International Development Up
		bps
	Q4-23	Q4-24	Q4-23	Q4-24
		$632	15.6%
CIG	$601		13.3%	•	U.K. Water Up
		+230	•	RPS Margin Up
	+5%
		bps

Q4-23 Q4-24

Q4-23 Q4-24

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Q4-24 Revenue by Customer

Customer	% of	Rev.	Net Rev.		Comments
Rev.	Y/Y	Y/Y
U.S. Federal	33%	+13%*	+12%*	• Coastal Marine Navigation up
•	Civilian Agencies Environmental Up
U.S. State & Local	12%	+9%	+5%	• Advanced Water Treatment up
•	Water System Modernization up
U.S. Commercial	18%	+3%	+5%	•	Environmental Remediation up
•	Renewable Energy up
International	37%	+6%	+5%	•	Resilient Infrastructure up
•	U.K. Water up

*U.S. Federal up 16% Y/Y with Ukraine

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Q4-24 Backlog

Q4-24 Book to Bill: 1.1x	$5.38B
		$4.79B	+ 12%
		Y/Y
$3.48B	$3.74B
Q4-21	Q4-22	Q4-23	Q4-24

Recent Key Contract Wins

• $12 billion multiple-award contract to deliver innovative technology solutions for Defense Logistics Agency
• $5 billion multiple award contract to address complex resiliency challenges in countries around the world for USAID
• $1 billion framework contract with Northern Ireland Water for support of sustainable water infrastructure projects
• $249 million multiple award contract for environmental assessment and sustainable design services for the U.S. Army Corps of Engineers
• $225 million multiple award contract for environmental remediation services for the U.S. Army Corps of Engineers
• $150 million in single award contracts to increase access for reliable water, electricity, and sustainable infrastructure in Africa for USAID
• $30 million single award contract to provide watershed-focused restoration and resiliency services for the Utah Army National Guard

Increased Orders Across All Our Client End Markets

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FY24 Financial Overview (GAAP)

Revenue ($ in billions)

$4.52	$5.20
	+15% Y/Y
FY23	FY24

Operating Income ($ in millions)

	$501
$358	+40% Y/Y
FY23	FY24

Net Revenue ($ in billions)

	$4.32
$3.75	+15% Y/Y
FY23	FY24

Diluted EPS (Post-split)

$1.02	$1.23	+21% Y/Y
		FY24 Pre-split
		GAAP: $6.17
		ADJ: $6.32
FY23	FY24

All-time High Revenue and Profitability

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FY24 Financial Overview

Cash Flow from Operations ($ in millions)

$368	$359	FY24: 108%
		Cash Flow to
		Net Income
FY23	FY24

Days Sales Outstanding

54.4	54.9	Industry
		leading DSO
FY23	FY24

Net Debt Leverage

1.4x
	1.0x	Reduced from
	2.2x after RPS
		acquisition
		(Q2-23)
FY23	FY24

Strong Cash Flow from Operations and Lower Debt Leverage

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Capital Allocation

Debt Facilities

Cash Flow

$359M	Acquisitions

(FY24)

Dividends &

Stock Buyback

• $800M existing liquidity available
• Balanced debt: fixed (2/3) & variable (1/3)
• FY24 Interest rate of 3.94%, lower by 143 bps Y/Y
• Invest in organic & acquisitive strategic priorities
• Strong strategically aligned pipeline
• Technical innovation
• Water & Environment focus in key geographies
• Q1-25Dividend: $0.058 per share, +12% Y/Y
• Previously approved buyback: $348M available

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