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 highest backlog entering FY2025.

• Backlog reached an all-time high of $5.38 billion, up 12% year-over-year, positioning the company strongly for FY2025.

• Business resilience highlighted across political transitions, with critical services in water, defense, and infrastructure remaining in high demand regardless of administration.

• Strategic focus on water (approaching 90% of business), high-end manufacturing, renewable energy, and expansion of subscription software solutions (3S) and AI-enabled services.

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

Financial highlights

• FY2024 revenue increased 15% to $5.20 billion; operating income up 40% to $501 million; EPS up 23% to $1.26 (post-split).

• Q4 revenue reached $1.37 billion (up 9% YoY), operating income $153 million (up 13% YoY), and backlog at $5.38 billion (up 12% YoY).

• Net income for FY2024 was $333 million, up from $273 million in 2023.

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

• Adjusted EBITDA margin improved by 70 basis points; DSO at 54.4–55 days, reflecting strong working capital management.

Outlook and guidance

• FY2025 net revenue guidance: $4.565–$4.765 billion; EPS: $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 YoY.

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