Tetra Tech (TTEK 0.53%), a leader in high-end consulting and engineering services, unveiled impressive results for its fiscal second quarter on May 1. For the period, which ended March 31, it reported earnings per diluted share of $1.42, topping analysts' consensus expectation of $1.29. Revenue reached $1.25 billion, outstripping estimates of $1.03 billion -- a new record.
| Metric | Q2 2024 Results | Analyst Estimates | Q2 2023 Results | % Change |
|---|---|---|---|---|
| Earnings per share | $1.42 | $1.29 | $0.80 | 77.5% |
| Revenue | $1.25 billion | $1.03 billion | $1.16 billion | 7.9% |
| Backlog | $4.74 billion | N/A | $4.27 billion | 11% |
| EBITDA | $135 million | N/A | $105 million | 28.5% |
Data source: Company results from company. Analyst estimates from FactSet. EBITDA = earnings before interest, taxes, depreciation, and amortization.
Tetra Tech's business overview
Tetra Tech provides engineering and consulting services in the water, environment, and renewable energy arenas. Consistently recognized by industry periodical Engineering News-Record for being a premier service provider in its niches, Tetra Tech's success hinges on its innovative technological solutions and significant international footprint. With over 100,000 projects in 100 countries, it not only showcases global prowess but also emphasizes its commitment to sustainability and advanced engineering solutions.
Quarter highlights
The last quarter was exceptional for Tetra Tech. It reported record revenue and EPS, growth that management attributed to both efficient project execution and robust demand for its specialized services. Its significant growth in earnings highlights the company's ability to not only grow the top line, but to improve profitability even faster.
Its backlog grew 11% year over year, setting a solid foundation for future revenues, as Tetra Tech secured sizable contracts from U.S. government clients including the Army and NASA. Among them was a $464 million multi-award agreement to remediate PFAS contamination at Army installations. These contracts and others, aimed at environmental remediation and climate resilience, tie back to Tetra Tech's core competencies.
Furthermore, financial metrics such as its 17% increase in cash flow from operations and strong dividend payments illustrate fiscal health and a commitment to shareholder returns. Its noteworthy improvement in profit margins across both of its segments -- Government Services Group margin grew by 170 basis points year over year, while Commercial/International Services Group margin was up by 320 basis points -- underscores the business' strength.
Looking ahead
Tetra Tech's leadership raised its fiscal 2024 guidance in anticipation of continued revenue growth and margin expansion. The forecast 22% EPS growth to a range of $6.15 to $6.25 and net revenue guidance range of $4.21 billion to $4.31 billion signal confidence in the company's strategic direction and market opportunities.
