• Record Net Revenue $737 million
• Record EPS $2.18; Record Adjusted EPS $1.34, up 13% Y/Y
• Record Backlog of $3.81 billion, up 11% Y/Y

PASADENA, Calif. — (BUSINESS WIRE) — February 1, 2023 — Tetra Tech, Inc. (NASDAQ: TTEK), a leading provider of high-end consulting and engineering services, today announced results for the first quarter ended January 1, 2023.

First Quarter Results

Tetra Tech achieved record high quarterly results in key financial metrics, including net revenue, operating margin, EPS and backlog. Revenue in the first quarter totaled $895 million and revenue, net of subcontractor costs (net revenue)¹, was $737 million. Operating income was $92 million; adjusted operating income was $97 million, up 17% year-over-year, which reflects a 90-basis point increase to an all-time high adjusted EBITDA¹ margin of 14.0%. Earnings per share (“EPS”) was $2.18; adjusted EPS was $1.34, up 13% over first quarter fiscal 2022. Backlog increased to $3.81 billion, up 11% year-over-year, and up 14% on a constant currency basis.

Quarterly Dividend

On January 30, 2023, Tetra Tech’s Board of Directors approved a $0.23 per share dividend, payable on February 24, 2023, to stockholders of record as of February 13, 2023. This represents a 15% increase year-over-year and the 35^th consecutive quarterly dividend.

Chairman and CEO Comments

Tetra Tech Chairman and CEO Dan Batrack commented, “Tetra Tech began fiscal 2023 with record high net revenue and earnings as a result of our strong operations where we are Leading with Science^® in the areas of water, environment and sustainable infrastructure. On a year-over-year basis, we saw double-digit top line growth across both our government and commercial end markets. We also had new orders approaching $1 billion in the quarter contributing to an all-time high backlog of $3.81 billion which further improves our outlook for fiscal 2023 and beyond.”

Mr. Batrack further stated, “We are very pleased to announce that we successfully closed the RPS Group transaction at the end of January. The addition of RPS aligns with our strategy to be the premier global high-end consulting and engineering firm addressing the impacts of climate change. RPS brings 5,000 staff that significantly expand our position in U.K. water programs, and add energy transformation expertise in the U.K., Europe and Australia.”

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1} Non-GAAP financial measures which the Company believes provide valuable perspectives on its business results.

Business Outlook

The following statements are based on current expectations. These statements are forward-looking, and the actual results could differ materially. These statements do not include the potential impact of transactions that may be completed or developments that become evident after the date of this release. The Business Outlook section should be read in conjunction with the information on forward-looking statements at the end of this release.

Excluding RPS, Tetra Tech expects EPS for the second quarter of fiscal 2023 to range from $1.03 to $1.08 and net revenue to range from $685 million to $735 million. For fiscal 2023, Tetra Tech is increasing EPS guidance to now range from $4.90 to $5.05 and is increasing net revenue guidance to range from $3.00 billion to $3.15 billion.²

RPS is expected to contribute additional net revenue of approximately $100 million in the second quarter and $400 million for fiscal 2023. The impact to adjusted EPS, excluding transaction, integration and intangible amortization expenses, is expected to be approximately $0.10 dilutive for the second quarter and $0.10 accretive in the second half of the year, resulting in neutral impact for fiscal 2023.³

Webcast

Investors will have the opportunity to access a live audio-visual webcast and supplemental financial information concerning the first quarter of fiscal 2023 results through a link posted on the Company’s website at tetratech.com on February 2, 2023, at 8:00 a.m. (PT).