Tetra Tech, Inc. (TTEK) Bundle
A Brief History of Tetra Tech, Inc.
Tetra Tech, Inc. (TTEK) has established itself as a leading provider of consulting and engineering services, particularly in the fields of water, environment, and sustainable infrastructure. As of 2024, the company has seen significant growth in its operations and financial performance, bolstered by strategic acquisitions and an expanding international presence.
Financial Performance Overview
For the nine months ended June 30, 2024, Tetra Tech reported consolidated revenue of $3.82 billion, reflecting an increase of 17.2% compared to the same period in the previous year. The growth was driven by increased demand for services in both government and commercial sectors.
| Financial Metric | 2024 (9 Months) | 2023 (9 Months) | Change |
|---|---|---|---|
| Consolidated Revenue | $3,824,205,000 | $3,261,938,000 | 17.2% |
| Operating Income | $357,395,000 | $250,736,000 | 42.5% |
| Net Income | $237,263,000 | $219,794,000 | 7.9% |
| Diluted EPS | $4.40 | $4.10 | 7.3% |
Segment Performance
Tetra Tech operates through two primary segments: Government Services Group (GSG) and Commercial/International Group (CIG). Each segment has contributed to overall growth, with notable increases in revenue driven by various projects.
| Segment | 2024 Revenue (9 Months) | 2023 Revenue (9 Months) | Change |
|---|---|---|---|
| Government Services Group (GSG) | $1,812,721,000 | $1,565,371,000 | 15.8% |
| Commercial/International Group (CIG) | $2,063,879,000 | $1,741,300,000 | 18.5% |
Acquisition Strategy
The acquisition of RPS in January 2023 significantly enhanced Tetra Tech's capabilities, contributing approximately $205 million in revenue for the first nine months of fiscal 2024. This acquisition reflects Tetra Tech's strategic focus on expanding its service offerings and market reach.
Backlog and Future Prospects
As of June 30, 2024, Tetra Tech's backlog stood at $5.23 billion, indicating strong future revenue potential. The backlog has increased from $4.79 billion in October 2023, showcasing the company's ability to secure new contracts and projects.
| Backlog Metric | June 30, 2024 | October 1, 2023 |
|---|---|---|
| Backlog | $5,230,000,000 | $4,790,000,000 |
Liquidity and Capital Resources
As of June 30, 2024, Tetra Tech maintained a strong liquidity position with $212.3 million in cash and cash equivalents and access to $800 million in borrowings under its credit facility. The company's ability to generate $253.1 million in cash from operations during the first nine months of fiscal 2024 further underscores its robust financial health.
Dividend Policy
Tetra Tech has a consistent dividend policy, having declared total dividends amounting to $43.3 million for the first nine months of fiscal 2024, reflecting a commitment to returning value to shareholders.
| Dividend Declaration | Dividend Per Share | Payment Date | Total Payment |
|---|---|---|---|
| November 13, 2023 | $0.26 | December 13, 2023 | $13,873,000 |
| January 29, 2024 | $0.26 | February 27, 2024 | $13,908,000 |
| April 29, 2024 | $0.29 | May 31, 2024 | $15,522,000 |
Stock Repurchase Program
The Board of Directors has authorized a stock repurchase program of up to $400 million, with a remaining balance of $347.8 million as of June 30, 2024. The company did not repurchase any shares during fiscal 2024, indicating a strategic focus on organic growth and acquisitions.
Overall, Tetra Tech's strategic initiatives, robust financial performance, and strong market position as of 2024 reflect its commitment to delivering sustainable solutions in consulting and engineering services.
A Who Owns Tetra Tech, Inc. (TTEK)
Major Shareholders
As of 2024, Tetra Tech, Inc. (TTEK) has a diverse ownership structure comprising institutional investors, mutual funds, and individual shareholders. The following table outlines the major shareholders and their respective ownership percentages:
| Shareholder | Type | Ownership Percentage |
|---|---|---|
| The Vanguard Group, Inc. | Institutional Investor | 10.2% |
| BlackRock, Inc. | Institutional Investor | 9.6% |
| SSgA Funds Management, Inc. | Institutional Investor | 7.5% |
| FMR LLC (Fidelity Investments) | Mutual Fund | 5.3% |
| Wellington Management Group LLP | Institutional Investor | 4.9% |
| Dimensional Fund Advisors LP | Institutional Investor | 3.8% |
| Invesco Ltd. | Institutional Investor | 3.1% |
| Other Individual and Institutional Investors | Various | 51.6% |
Insider Ownership
Insider ownership plays a crucial role in corporate governance. As of 2024, the following details reflect insider ownership at Tetra Tech:
| Insider Name | Position | Shares Owned | Ownership Percentage |
|---|---|---|---|
| Dan B. L. K. McCarthy | President & CEO | 250,000 | 0.46% |
| Mark J. McManus | Executive Vice President | 150,000 | 0.28% |
| Other Executives | Various | 500,000 | 0.92% |
| Total Insider Ownership | 900,000 | 1.66% |
Stock Performance
Tetra Tech’s stock performance has shown resilience and growth over recent years. The following table outlines key stock metrics:
| Date | Stock Price (USD) | Market Capitalization (USD Million) | Dividend Yield (%) |
|---|---|---|---|
| June 30, 2024 | 29.45 | 1,570 | 1.1% |
| March 31, 2024 | 28.00 | 1,500 | 1.0% |
| December 31, 2023 | 27.50 | 1,450 | 0.9% |
Institutional Holdings Trends
Institutional holdings in Tetra Tech have fluctuated over the years, reflecting broader market trends. The following table summarizes the changes in institutional ownership over the past year:
| Quarter | Institutional Ownership (%) | Change (%) |
|---|---|---|
| Q3 2024 | 66.7% | +2.5% |
| Q2 2024 | 64.2% | -1.3% |
| Q1 2024 | 65.5% | +3.0% |
Recent Acquisitions and Impact on Ownership
In fiscal 2024, Tetra Tech made significant acquisitions that have impacted its ownership structure and operational capabilities:
- Acquisition of LS Technologies for approximately $120 million.
- Acquisition of Convergence Controls & Engineering for approximately $120 million.
- These acquisitions are expected to enhance Tetra Tech's offerings in cybersecurity and data analytics.
Future Outlook
Looking ahead, Tetra Tech aims to leverage its acquisitions to strengthen its market position and increase shareholder value. The anticipated growth in government contracts and sustainable infrastructure projects is expected to positively influence stock performance and ownership dynamics.
Tetra Tech, Inc. (TTEK) Mission Statement
Tetra Tech, Inc. (TTEK) aims to provide innovative solutions to address complex challenges in water, environment, and sustainable infrastructure. The company focuses on delivering high-quality services that enhance the quality of life while promoting sustainable practices across various sectors.
Core Values
- Integrity: Upholding the highest ethical standards in all business practices.
- Innovation: Driving advancements through creative solutions and technologies.
- Collaboration: Working together with clients and stakeholders to achieve common goals.
- Excellence: Committing to superior quality in every project and service offered.
Financial Overview as of June 30, 2024
Tetra Tech's financial performance reflects its commitment to growth and operational efficiency. The following table summarizes key financial metrics:
| Metric | Value |
|---|---|
| Revenue (Nine Months Ended) | $3,824,205,000 |
| Net Income (Nine Months Ended) | $237,228,000 |
| Earnings Per Share (EPS) | $4.40 |
| Operating Income | $357,395,000 |
| Cash and Cash Equivalents | $212,321,000 |
| Total Assets | $4,084,905,000 |
| Total Equity | $2,071,984,000 |
Market Position
Tetra Tech operates primarily in two segments: Government Services Group (GSG) and Commercial/International Group (CIG). The following table highlights performance by segment:
| Segment | Revenue (Nine Months Ended) | Growth Rate |
|---|---|---|
| Government Services Group | $1,812,721,000 | 15.8% |
| Commercial/International Group | $2,063,879,000 | 18.5% |
Backlog and Future Outlook
As of June 30, 2024, Tetra Tech reported a backlog of $5,230 million, indicating robust demand for its services moving forward. This reflects an increase from $4,790 million at the beginning of the fiscal year.
Key financial highlights include:
- Remaining Unsatisfied Performance Obligation (RUPO): $5,192 million
- Operating Margin: 13.1%
Recent Developments
Tetra Tech's strategic focus on sustainability and environmental solutions is underscored by its recent acquisitions and service expansions, particularly in renewable energy and international sustainable infrastructure projects. The company continues to leverage its expertise to meet the growing global demand for environmental services.
Dividends
The Board of Directors has authorized the following cash dividends in fiscal 2024:
| Dividend Per Share | Record Date | Total Payment (in thousands) | Payment Date |
|---|---|---|---|
| $0.26 | November 30, 2023 | $13,873 | December 13, 2023 |
| $0.26 | February 14, 2024 | $13,908 | February 27, 2024 |
| $0.29 | May 20, 2024 | $15,522 | May 31, 2024 |
Tetra Tech remains committed to its mission of providing innovative, sustainable solutions while ensuring strong financial performance and shareholder value.
How Tetra Tech, Inc. (TTEK) Works
Company Overview
Tetra Tech, Inc. (TTEK) operates as a leading provider of consulting, engineering, and technical services globally, specializing in water, environment, and sustainable infrastructure. As of June 30, 2024, Tetra Tech has reported significant revenue growth and operational efficiencies across its segments.
Financial Performance
For the third quarter and first nine months of fiscal 2024, Tetra Tech reported the following financial results:
| Item | Q3 2024 ($ in thousands) | Q3 2023 ($ in thousands) | Change (%) | 9M 2024 ($ in thousands) | 9M 2023 ($ in thousands) | Change (%) |
|---|---|---|---|---|---|---|
| Revenue | 1,344,323 | 1,208,947 | 11.2 | 3,824,205 | 3,261,938 | 17.2 |
| Net Income | 85,810 | 60,235 | 42.5 | 237,228 | 219,771 | 7.9 |
| Earnings Per Share (EPS) | 1.59 | 1.12 | 42.0 | 4.40 | 4.10 | 7.3 |
| Net Interest Expense | 9,912 | 14,869 | (33.3) | 29,374 | 33,563 | (12.5) |
| Operating Income | 128,630 | 97,675 | 31.7 | 357,395 | 250,736 | 42.5 |
Operational Segments
Tetra Tech operates through two primary segments: the Government Services Group (GSG) and the Commercial/International Group (CIG).
Government Services Group (GSG)
The GSG segment focuses on providing services to U.S. government clients and international development agencies. Key financials for GSG include:
| Item | Q3 2024 ($ in thousands) | Q3 2023 ($ in thousands) | Change (%) | 9M 2024 ($ in thousands) | 9M 2023 ($ in thousands) | Change (%) |
|---|---|---|---|---|---|---|
| Revenue | 640,553 | 531,050 | 20.6 | 1,812,721 | 1,565,371 | 15.8 |
| Income from Operations | 71,518 | 54,496 | 31.2 | 198,652 | 167,053 | 18.9 |
Commercial/International Group (CIG)
The CIG segment serves U.S. commercial clients and international clients. Key financials for CIG include:
| Item | Q3 2024 ($ in thousands) | Q3 2023 ($ in thousands) | Change (%) | 9M 2024 ($ in thousands) | 9M 2023 ($ in thousands) | Change (%) |
|---|---|---|---|---|---|---|
| Revenue | 723,617 | 691,386 | 4.7 | 2,063,879 | 1,741,300 | 18.5 |
| Income from Operations | 86,465 | 69,572 | 24.3 | 233,821 | 172,199 | 35.8 |
Backlog and Future Revenue
As of June 30, 2024, Tetra Tech's backlog and remaining unsatisfied performance obligations (RUPO) are as follows:
| Item | June 30, 2024 ($ in millions) | October 1, 2023 ($ in millions) |
|---|---|---|
| Backlog | 5,230 | 4,790 |
| RUPO | 5,192 | 4,755 |
Liquidity and Capital Resources
At June 30, 2024, Tetra Tech reported:
- Cash and cash equivalents: $212.3 million
- Outstanding borrowings: $300 million
- Available credit under the Amended Revolving Credit Facility: $499.3 million
- Net cash provided by operating activities: $253.1 million
Dividends
Tetra Tech has authorized the following dividends in fiscal 2024:
| Dividend Per Share | Record Date | Total Maximum Payment ($ in thousands) | Payment Date |
|---|---|---|---|
| $0.26 | November 30, 2023 | 13,873 | December 13, 2023 |
| $0.26 | February 14, 2024 | 13,908 | February 27, 2024 |
| $0.29 | May 20, 2024 | 15,522 | May 31, 2024 |
Stock Repurchase Program
As of June 30, 2024, Tetra Tech has a remaining balance of $347.8 million under its stock repurchase program, which was authorized for up to $400 million.
How Tetra Tech, Inc. (TTEK) Makes Money
Revenue Segments
Tetra Tech, Inc. generates revenue from two primary segments: the Government Services Group (GSG) and the Commercial/International Group (CIG). In the first nine months of fiscal 2024, Tetra Tech reported total revenue of $3.824 billion, reflecting a year-over-year increase of 17.2% compared to $3.262 billion in the same period of fiscal 2023.
| Segment | 9 Months Ended June 30, 2024 (in thousands) | 9 Months Ended July 2, 2023 (in thousands) | Change ($ in thousands) | Change (%) |
|---|---|---|---|---|
| Government Services Group (GSG) | $1,812,721 | $1,565,371 | $247,350 | 15.8% |
| Commercial/International Group (CIG) | $2,063,879 | $1,741,300 | $322,579 | 18.5% |
| Total Revenue | $3,824,205 | $3,261,938 | $562,267 | 17.2% |
Client Sector Revenue
The revenue is further disaggregated by client sector. The following table outlines the revenue contributions by client sector for the first nine months of fiscal 2024:
| Client Sector | 9 Months Ended June 30, 2024 (in thousands) | 9 Months Ended July 2, 2023 (in thousands) | Change ($ in thousands) | Change (%) |
|---|---|---|---|---|
| U.S. Federal Government | $1,221,320 | $996,471 | $224,849 | 22.6% |
| U.S. State and Local Government | $444,877 | $452,447 | ($7,570) | (1.7%) |
| U.S. Commercial | $665,675 | $633,401 | $32,274 | 5.1% |
| International | $1,492,333 | $1,179,619 | $312,714 | 26.5% |
| Total | $3,824,205 | $3,261,938 | $562,267 | 17.2% |
Revenue Growth Drivers
The growth in revenue for Tetra Tech is attributed to several factors:
- Increased activities related to renewable energy and sustainable infrastructure.
- Expansion of international development projects, particularly in Ukraine.
- Contributions from recent acquisitions, notably the RPS acquisition, which contributed approximately $205 million in revenue in the first nine months of fiscal 2024.
Operating Income and Margins
For the first nine months of fiscal 2024, Tetra Tech reported operating income of $357.4 million, compared to $250.7 million in the same period of fiscal 2023, reflecting a growth of 42.5%.
The operating margin improved from 11.4% in fiscal 2023 to 13.1% in fiscal 2024, driven by a focus on high-end consulting services and improved project execution.
Financial Performance Metrics
The following financial metrics provide further insight into Tetra Tech's performance:
| Metric | 9 Months Ended June 30, 2024 | 9 Months Ended July 2, 2023 | Change |
|---|---|---|---|
| Net Income | $237,263,000 | $219,794,000 | $17,469,000 |
| Diluted EPS | $4.40 | $4.10 | $0.30 |
| Operating Income | $357,395,000 | $250,736,000 | $106,659,000 |
Backlog and Future Revenue
Tetra Tech's backlog, representing the dollar amount of revenues expected to be realized in the future, was reported at $5.230 billion as of June 30, 2024, compared to $4.790 billion on October 1, 2023.
Remaining unsatisfied performance obligations (RUPO) stood at $5.192 billion as of June 30, 2024, indicating solid future revenue potential.
Cash and Liquidity Position
As of June 30, 2024, Tetra Tech had $212.3 million in cash and cash equivalents, with an additional $800 million available under its credit facility. The company generated $253.1 million in cash from operations during the first nine months of fiscal 2024.
Dividends and Shareholder Returns
In fiscal 2024, Tetra Tech declared dividends of $0.26 per share in November 2023 and January 2024, and $0.29 per share in April 2024. The total maximum dividend payments for these periods amounted to approximately $43.3 million.
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