Tetra Tech (TTEK) Q4 2024 earnings summary

Executive summary

• Achieved record results in revenue, net revenue, operating income, EPS, and backlog for both Q4 and FY2024, with the strongest performance in the fourth quarter and robust demand in water, environmental, and infrastructure sectors.

• FY2024 revenue reached $5.20 billion, up 15% year-over-year, with net revenue of $4.32 billion and operating income up to $510 million.

• Backlog hit an all-time high of $5.38 billion, up 12% year-over-year, providing strong visibility into FY2025.

• Growth driven by robust demand in water, environmental, defense, and high-end manufacturing sectors, with significant expansion in software subscription solutions.

• CEO set 2030 targets for global water consultancy and recurring revenue software growth.

Financial highlights

• FY2024 revenue: $5.20 billion, up 15% year-over-year; Q4 revenue: $1.37 billion, up 9% from a record prior Q4.

• Operating income for FY2024: $510 million, up 22%; Q4 operating income: $153 million, up 13%.

• EPS for FY2024: $1.26 (post-split), up 23%; Q4 EPS: $1.23 (all-time high).

• Adjusted EBITDA margin improved by 70 basis points year-over-year.

• Cash flow from operations: $359 million, exceeding net income for the 20th consecutive year.

Outlook and guidance

• FY2025 net revenue guidance: $4.565–$4.765 billion; EPS guidance: $1.40–$1.50, targeting 15% EPS growth at midpoint.

• Q1 FY2025 net revenue guidance: $1.09–$1.15 billion; EPS: $0.32–$0.34, representing 10% revenue and 18% EPS growth.

• Federal client growth expected at 5–10%, state/local at 10–15%, U.S. commercial at 5–10%, and international at 5–10%.

• Guidance excludes contributions from future acquisitions.