Latest news with #DanBatrack
Yahoo
11-06-2025
- Business
- Yahoo
TTEK Q1 Earnings Call: Revenue Outperforms, Margins Impacted by Client Shift and One-Time Charges
Environmental engineering firm Tetra Tech (NASDAQ:TTEK) announced better-than-expected revenue in Q1 CY2025, with sales up 4.9% year on year to $1.1 billion. On top of that, next quarter's revenue guidance ($1.15 billion at the midpoint) was surprisingly good and 4.2% above what analysts were expecting. Its GAAP profit of $0.02 per share was 93.3% below analysts' consensus estimates. Is now the time to buy TTEK? Find out in our full research report (it's free). Revenue: $1.1 billion vs analyst estimates of $1.04 billion (4.9% year-on-year growth, 6.6% beat) EPS (GAAP): $0.02 vs analyst expectations of $0.30 (93.3% miss) The company lifted its revenue guidance for the full year to $4.77 billion at the midpoint from $4.57 billion, a 4.4% increase EPS (GAAP) guidance for Q2 CY2025 is $0.38 at the midpoint, beating analyst estimates by 11.1% Operating Margin: 3.6%, down from 11.2% in the same quarter last year Market Capitalization: $9.34 billion Tetra Tech's first quarter results were heavily shaped by a sharp shift in its client portfolio, most notably the loss of its largest revenue source, USAID, within a single quarter. CEO Dan Batrack described this event as unprecedented, but credited the company's broad diversification across clients, services, and geographies for helping offset the impact. Growth in state and local government work, particularly in water and disaster response, and resilience in commercial and international segments helped drive overall revenue gains. Management noted that non-reimbursable costs related to closing out USAID projects and holding staff during the transition period weighed on operating margins, while offsetting strength came from disaster response work and higher-margin municipal programs. Looking ahead, Tetra Tech's raised guidance is underpinned by expanded contract capacity in defense and water infrastructure, as well as the integration of new digital and automation capabilities acquired through recent deals. Management emphasized a sizable pipeline in high-margin areas like data centers and digital systems, with Chief Innovation Officer Leslie Shoemaker highlighting over $5 billion in new Department of Defense contract capacity. CEO Dan Batrack cautioned that while the company expects margin improvement as USAID-related costs roll off, ongoing volatility in international markets and the variable nature of projects in regions such as Ukraine may continue to pose short-term risks. Batrack stated, 'The primary tailwinds that are driving Tetra Tech are not changing—coastal flooding, water supply issues, and digital infrastructure remain key priorities for clients.' Tetra Tech's management attributed quarterly growth to strong state and local government demand, continued expansion in defense and water infrastructure, and the company's ability to quickly reallocate resources after the loss of its largest federal client. State and local surge: State and local government revenues rose 44% year-over-year, with more than half of that growth stemming from episodic disaster response activities. The remainder was driven by ongoing municipal water programs, which management noted were up 19%, reflecting strong demand for infrastructure resilience and water quality projects. Defense contract expansion: Tetra Tech secured $5 billion in new contract capacity with U.S. Department of Defense agencies, including projects supporting military infrastructure worldwide. Management emphasized that recent wins are closely aligned with national security and infrastructure priorities, such as water supply and flood control for military bases. Disaster response offsets: The company was able to redeploy staff to high-utilization disaster response projects, particularly in areas affected by fires and hurricanes, helping to mitigate underutilization from USAID project terminations. CEO Dan Batrack stated this shift ensured continued high overall workforce utilization despite the abrupt change in client mix. Margin dynamics and one-offs: Operating margins were negatively affected by non-reimbursable costs associated with closing out USAID work and the decision to retain staff during the transition. CFO Steve Burdick noted that, excluding these effects, core margin performance would have been 30 to 50 basis points higher. International mixed picture: While Tetra Tech's UK and Irish water businesses delivered double-digit growth, Australian operations saw revenue declines due to delayed infrastructure funding around national elections. Management flagged that international growth rates remain sensitive to changes in trade policy and project funding clarity. Management expects future results to be shaped by accelerating demand for water and digital infrastructure, margin recovery as one-time costs fade, and a growing contribution from recent acquisitions. High-margin business mix shift: With the exit of USAID work, management believes the company's baseline margin profile will improve as more profitable projects in water, environmental, and digital systems become a larger share of revenue. CEO Dan Batrack said, 'Our underlying business has about a 50 basis point increase in overall margin without AID, and growth could be slightly faster going forward.' Digital systems and data center growth: The addition of SAGE Group and ongoing investments in digital automation and high-performance building design are expected to drive double-digit growth in the data center and smart infrastructure markets. Chief Innovation Officer Leslie Shoemaker projected the digital systems practice could reach $500 million in annual revenue by 2030. Backlog rebuilding and project funding: Management highlighted a solid book-to-bill ratio outside of USAID and a growing pipeline in defense and water. However, they cautioned that certain international and federally funded projects remain subject to political and funding volatility, especially in regions such as Ukraine and Australia. In the coming quarters, the StockStory team will monitor (1) the pace at which Tetra Tech rebuilds its backlog outside of USAID, (2) progress in integrating SAGE Group and scaling digital automation offerings, and (3) the sustainability of state and local government demand for water and disaster response projects. Shifts in international funding environments and the impact of new defense contracts on margins will also be important to track. Tetra Tech currently trades at a forward P/E ratio of 24.7×. Should you double down or take your chips? Find out in our full research report (it's free). Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today. Melden Sie sich an, um Ihr Portfolio aufzurufen.
Business Mayor
19-05-2025
- Business
- Business Mayor
Tetra Tech Takes a Hit – Los Angeles Business Journal
Pasadena-based engineering and consulting firm Tetra Tech Inc. took a major hit in the first quarter with the shutdown of its largest client, the U.S. Agency for International Development. But the company still managed to post one of its strongest quarterly earnings results as it found new business elsewhere. In its May 8 quarterly earnings call, Dan Batrack, Tetra Tech's chief executive, said the USAID shutdown cost the company about $1.1 billion worth of contract awards that had been part of the company's project backlog. The shutdown also forced the company to take a $92 million impairment charge. Yet Tetra Tech still managed to post one of its better quarters for earnings, with the third-highest earnings per share and operating revenue marks in the company's history, a feat all the more remarkable considering January through March is typically the slowest time of the year for the company. 'We just had one of the most interesting quarters in the history of the company,' Batrack told analysts at the outset of the earnings conference call. The company's history dates back to 1966. 'Never have we seen our largest client by revenue essentially disappear within just one quarter,' he added. 'If you'd asked me 20 years ago what would have been the impact for quarterly results of this happening, I'm not sure I could have told you, but it certainly wouldn't have been good,' Batrack continued. 'But today, in this quarter, through the incredible diversity of our clients, diversity of the services we provide and the geographies that we operate in, we had one of the best quarters in the company's history.' Indeed, net revenue (not including contract dollars passed through to subcontractors) rose 5% during the quarter to $1.1 billion compared with the same quarter last year, while operating income rose 11% to $130 million – despite the loss of USAID work. Investors reacted favorably, sending Tetra Tech shares up 13% on May 8, the trading session after the earnings release and conference call. The stock has not moved significantly since then. Tetra Tech's challenges began the day President Donald Trump took office for his second term. One of the first executive orders he signed froze all foreign aid and called for a review of aid policy. Batrack said Trump's executive order resulted in immediate 'stop-work' orders for most of its USAID contracts. Its employees working on those contracts were effectively in limbo, though they were still employed by the company. Then, the Elon Musk-led Department of Government Efficiency, or DOGE, went through USAID operations, and in early February cancelled more than 100 contracts, including more than 20 contracts with Tetra Tech. The canceled contracts ranged in size from $10.2 million to $95.5 million. And then on Feb. 27, Secretary of State Marco Rubio announced that approximately 5,200 of USAID's 6,200 programs were being eliminated, with the rest transferred to the Rubio-led State Department. USAID was effectively shuttered. Batrack said that was the day the status of the Tetra Tech workers on those eliminated contracts went to 'termination for convenience.' He noted that the company incurred costs for that five-week period between the Jan. 20 date the stop-work orders went out and the Feb. 27 date when the contracts were terminated. He did not disclose what happened to the workers on those contracts. Tetra Tech took those contracts out of its project backlog, which consists of work that the company has contracts for but not yet begun. And for the first time since the USAID episode began, Batrack put a number on the value of those contracts. 'Tetra Tech's updated backlog is now…$4.31 billion,' he said. 'This $4.3 billion captures the de-obligation of approximately $1.1 billion in USAID and Department of State projects.' The company also took a non-cash, goodwill impairment charge of $92.4 million during the quarter. No specifics were offered. Not all of Tetra Tech's USAID work was eliminated. About $220 million remains, most of that for work in Ukraine that is part of a massive $450 million multi-year contract. USAID had been Tetra Tech's largest single client, representing nearly 10% of all net revenue and about one-third of all the company's work for the federal government. Yet for the first three months of this year, net revenue from federal government work still grew 1% compared to the same period last year as work for other federal agencies grew 16%. Tetra Tech's biggest victory in this sector came in March when the company announced it had won a slice of work on three contracts for environmental engineering services with the U.S. Army Corps of Engineers Honolulu District worth as much as $416 million. Each of these contracts involve multiple companies that are on call for individual projects as they come up. Tetra Tech also announced and added to its backlog four other contracts with the Army Corps of Engineers during the quarter, including one with the Corps' Los Angeles district. Most of this work is for ongoing environmental and engineering services. The Army Corps of Engineers is now Tetra Tech's largest single client. Staff Reporter Mark Madler contributed to this article.
National Post
01-05-2025
- Business
- National Post
Tetra Tech to Advance Its Digital Automation Solutions with the Acquisition of SAGE Group
Article content PASADENA, Calif. — Tetra Tech, Inc. (NASDAQ: TTEK), a leading provider of high-end consulting and engineering services in water, environment, and sustainable infrastructure, announced today that it has signed a definitive agreement to acquire SAGE Group Holdings Ltd (SAGE Group), a premier automation solutions provider known for its expertise in municipal water and industrial manufacturing automation, smart infrastructure, and systems integration. Article content Article content SAGE Group delivers innovative technology and high-quality automation services that optimize operational efficiency and drive digital transformation for commercial and government clients across the municipal water, energy, transportation, defense and manufacturing sectors. This acquisition will expand Tetra Tech's digital systems solutions to a broader suite of clients, and provide advanced electrical and instrumentation design, engineered control systems, cybersecurity, and cloud integration. Article content 'Tetra Tech's deep technical expertise and advanced technology solutions help utilities, and the private sector optimize performance and make effective, data-driven decisions,' said Dan Batrack, Tetra Tech Chairman and CEO. 'The addition of SAGE Group's digital automation capabilities will further enhance our offerings by bringing additional expertise, AI-enabled technology, and demonstrated client solutions to our collective team.' Article content 'Tetra Tech and SAGE Group share complementary expertise, a strong cultural fit, and a shared long-term strategic vision to deliver impactful, future-focused solutions across industrial digitalization, AI and cybersecurity,' said Adrian Fahey, SAGE Group's Managing Director. 'This partnership will position SAGE for long-term growth, broaden its service offering, and provide new global resources — enhancing the value, innovation, and support we deliver to our clients and, expanded opportunities for our employees.' Article content SAGE Group is joining the Commercial International Business Group. The acquisition will be subject to the satisfaction of customary closing conditions. Article content Tetra Tech is the leader in water, environment and sustainable infrastructure, providing high-end consulting and engineering services for projects worldwide. With 30,000 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, design sustainable and resilient infrastructure, and support the clean energy transition. For more information about Tetra Tech, please visit or follow us on LinkedIn and Facebook. Article content SAGE Group comprises four specialist offerings, SAGE Automation, Nukon, Embedded Expertise and Skills Lab. With an extensive footprint across Australia, employing a team of 800 talented people, SAGE is an integrated industrial digitalization services provider with a suite of solutions designed to support clients to accelerate their digital journey. SAGE partners with clients across the water, defense, energy, manufacturing, resources and transport sectors, to create a Smarter Future, Better World. For more information about SAGE Group, please visit or follow us on LinkedIn and Facebook. Article content Any statements made in this release that are not based on historical fact are forward-looking statements. Any forward-looking statements made in this release represent management's best judgment as to what may occur in the future. However, Tetra Tech's actual outcome and results are not guaranteed and are subject to certain risks, uncertainties and assumptions ('Future Factors'), and may differ materially from what is expressed. For a description of Future Factors that could cause actual results to differ materially from such forward-looking statements, see the discussion under the section 'Risk Factors' included in the Company's Form 10-K and Form 10-Q filings with the Securities and Exchange Commission. Article content Article content Article content Article content Article content
Business Wire
24-04-2025
- Business
- Business Wire
Tetra Tech Awarded Contract to Provide Advanced Water Treatment Solutions in Florida
PASADENA, Calif.--(BUSINESS WIRE)-- Tetra Tech, Inc. (NASDAQ: TTEK), a leading provider of high-end consulting and engineering services in water, environment, and sustainable infrastructure, announced today that the City of Cape Coral, Florida, selected Tetra Tech to provide engineering design and technical services to expand its North Reverse Osmosis Water Treatment Plant. Tetra Tech will provide advanced water treatment solutions to expand the plant's production capacity by 50 percent and double existing ground storage reservoir capacity. The $60 million expansion project will incorporate innovative technologies for energy recovery and process optimization of the existing treatment system to support the City in providing reliable service for its growing population while mitigating pressure on local aquifers. Tetra Tech engineers and technical specialists will provide services to transform brackish groundwater into high-quality drinking water, including engineering design, preparation of technical plans and specifications, permitting, and testing and commissioning. 'For almost 40 years, Tetra Tech has provided innovative water treatment solutions to support the resilience of communities throughout Florida,' said Dan Batrack, Tetra Tech Chairman and CEO. 'We look forward to continuing to solve critical water supply challenges, support regional growth, and deliver value to the City of Cape Coral and its residents.' 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 30,000 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, design sustainable and resilient infrastructure, and support the clean energy transition. For more information about Tetra Tech, please visit or follow us on LinkedIn and Facebook. Any statements made in this release that are not based on historical fact are forward-looking statements. Any forward-looking statements made in this release represent management's best judgment as to what may occur in the future. However, Tetra Tech's actual outcome and results are not guaranteed and are subject to certain risks, uncertainties and assumptions ("Future Factors"), and may differ materially from what is expressed. For a description of Future Factors that could cause actual results to differ materially from such forward-looking statements, see the discussion under the section "Risk Factors" included in the Company's Form 10-K and Form 10-Q filings with the Securities and Exchange Commission.
National Post
24-04-2025
- Business
- National Post
Tetra Tech Awarded Contract to Provide Advanced Water Treatment Solutions in Florida
Article content PASADENA, Calif. — Tetra Tech, Inc. (NASDAQ: TTEK), a leading provider of high-end consulting and engineering services in water, environment, and sustainable infrastructure, announced today that the City of Cape Coral, Florida, selected Tetra Tech to provide engineering design and technical services to expand its North Reverse Osmosis Water Treatment Plant. Article content Article content Tetra Tech will provide advanced water treatment solutions to expand the plant's production capacity by 50 percent and double existing ground storage reservoir capacity. The $60 million expansion project will incorporate innovative technologies for energy recovery and process optimization of the existing treatment system to support the City in providing reliable service for its growing population while mitigating pressure on local aquifers. Tetra Tech engineers and technical specialists will provide services to transform brackish groundwater into high-quality drinking water, including engineering design, preparation of technical plans and specifications, permitting, and testing and commissioning. Article content Article content 'For almost 40 years, Tetra Tech has provided innovative water treatment solutions to support the resilience of communities throughout Florida,' said Dan Batrack, Tetra Tech Chairman and CEO. 'We look forward to continuing to solve critical water supply challenges, support regional growth, and deliver value to the City of Cape Coral and its residents.' Article content Tetra Tech is the leader in water, environment and sustainable infrastructure, providing high-end consulting and engineering services for projects worldwide. With 30,000 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, design sustainable and resilient infrastructure, and support the clean energy transition. For more information about Tetra Tech, please visit or follow us on LinkedIn and Facebook. Article content Any statements made in this release that are not based on historical fact are forward-looking statements. Any forward-looking statements made in this release represent management's best judgment as to what may occur in the future. However, Tetra Tech's actual outcome and results are not guaranteed and are subject to certain risks, uncertainties and assumptions ('Future Factors'), and may differ materially from what is expressed. For a description of Future Factors that could cause actual results to differ materially from such forward-looking statements, see the discussion under the section 'Risk Factors' included in the Company's Form 10-K and Form 10-Q filings with the Securities and Exchange Commission. Article content Article content Article content Article content Article content
