Q4-23 EARNINGS CALL
November 16, 2023
Dan Batrack, Chairman & CEO
Steve Burdick, Executive VP & CFO
Jill Hudkins, President
WATER | ENVIRONMENT | SUSTAINABLE INFRASTRUCTURE |
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. 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 is available in the Appendix at the end of this communication.
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Tetra Tech 2023 Highlights
#1 In Water | #1 In Environment | |
20 consecutive years by | 15 consecutive years by | |
ENGINEERING NEWS | ENGINEERING NEWS | |
RECORD | RECORD | |
$1BIncrease | +19 | U.K. Major |
Water Utilities |
in backlog | major water |
utility clients | |
#1In Human Capital
for human resources, productivity, H&S
545M Lives Improved
One Billion People Challenge by 2030
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Record Results in Q4-23 and 2023
Revenue
Net Revenue
Operating Income
Adjusted EPS
Backlog
Q4-23 | RECORD HIGH |
$1.26B
$1.06B
$135M
$1.78
$4.79B
FY-23
$4.52B
$3.75B
$420M
$5.58
$4.79B
RECORD HIGH
Note: Operating income and EPS presented on adjusted basis. Refer to appendix for reconciliation summary.
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Q4-23 Tetra Tech Consolidated Results
Revenue | EBITDA |
$1.26B | $153M |
$903M | $101M |
+40% | |
+51% | |
Q4-22 | Q4-23 | Q4-22 | Q4-23 |
Note: Refer to appendix for reconciliation summary.
All-time High Revenue, Profitability, and Backlog
Backlog
$4.79B
$3.74B
+28%
Q4-22Q4-23
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Net Revenue by Customer (Q4-23)
Customer | % of | Y/Y | Comments | |
Net Rev. | ||||
U.S. Federal | 29% | +46% | • | Federal IT up |
• | 19% growth excluding Ukraine | |||
U.S. State & Local | 12% | +15% | • | Digital Water up |
• | Resilience Planning up | |||
U.S. Commercial | 19% | +13% | • | Clean Energy up |
• | Environmental Services up | |||
International | 40% | +78% | • | Infrastructure up |
• | 14% growth excluding RPS | |||
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Performance by Segment (Q4-23)
Segment | Net Revenue ($M) | OI Margin (%) | Comments | ||||||
$457 | 15.7% | ||||||||
$336 | 15.1% | • | Federal IT up | ||||||
GSG | |||||||||
+36% | +60 | • | Environmental Services up | ||||||
• | Digital Water up | ||||||||
bps | |||||||||
Q4-22 | Q4-23 | Q4-22 | Q4-23 | ||||||
$601 | 14.7% | ||||||||
CIG | $400 | 13.6% | • | Clean Energy up | |||||
+110 | • | International Infrastructure up | |||||||
+50% | • CIG margin was 13.3% w/ RPS | ||||||||
bps | |||||||||
Q4-22Q4-23
Q4-22Q4-23
Note: CIG margin excludes RPS
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EBITDA Margin Trend on U.S. and International Reporting Basis
20.0%
Q4-23 Margin | 21.0% |
17.5%
15.1% | Margin | 15.0% |
12.5% |
10.0%
17.9%
11.7%
18.7%
IFRS
12.7%
U.S. - As reported
19.5%
13.5%
As reported | IFRS | FY21 | FY22 | FY23 |
Continuous Margin Expansion
Refer to Appendix: Reconciliation summary for calculation of IFRS-Based EBITDA as a % of Net Service Revenue
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Backlog (Q4-23)
Record High | ||||
$4,790M | ||||
4,800 | +28% Y/Y | |||
4,500 | Q4 Orders +45% Y/Y | |||
4,200 | ||||
3,900 | ||||
M | 3,600 | |||
$ in | ||||
3,300 | $3,480M |
3,000
2,700 | Funded and | |||||||||
Authorized Work | ||||||||||
2,400 | ||||||||||
2,100 | ||||||||||
Q4-21 | Q1-22 | Q2-22 | Q3-22 | Q4-22 | Q1-23 | Q2-23 | Q3-23 | Q4-23 |
Significant Awards
U.S. Army Corps of Engineers PFAS Environmental Contract
Commercial Task Orders
U.S. EPA Environmental
Restoration Contract
U.S. Army Corps of Eng. IIJA A-E Services Contract
U.S. DoD Task Orders
U.S. EPA Task Orders
U.S. Army Corps of Engineers Resilience Contract
International Development Task Orders
USAID Land and Resource Governance Contract
U.S. Dept. of Energy Task Orders
Australia Offshore Wind
Services Contract
Contract
Ceiling
$800M
-
$450M
$200M
-
-
$45M
-
$34M
-
A$22M
Funded
Value
-
$514M
-
$33M
$109M
$58M
-
$595M
$5M
$31M
A$22M
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Financial Overview FY-23 (GAAP)
Revenue ($ in billions)
$3.50 | $4.52 |
+29% Y/Y | |
FY-22 | FY-23 |
Operating Income ($ in millions)
$358 | |
$340 | Adj. EBITDA |
FY23: $481M | |
FY22: $361M | |
+33% Y/Y | |
FY-22 | FY-23 |
Net Revenue ($ in billions)
$3.75 | |
$2.84 | +32% Y/Y |
FY-22 | FY-23 |
Diluted EPS
$4.86 | $5.10 |
Adj. EPS w/ IA | |
FY23: $5.21 | |
FY22: $4.50 | |
+16% Y/Y | |
FY-22 | FY-23 |
All-time High Revenue and Profitability
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Disclaimer
Tetra Tech Inc. published this content on 04 December 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 December 2023 15:51:39 UTC.