Tetra Tech Inc (TTEK) Reports Record Financial Results for Q4 and Fiscal Year 2023
Fourth-quarter revenue increased by 40% year-over-year to $1.26 billion, with net revenue up 44%.
Adjusted Earnings Per Share (EPS) for Q4 rose by 41% year-over-year to $1.78.
Fiscal year 2023 revenue reached $4.52 billion, a 29% increase from the previous year.
Backlog climbed to a record $4.79 billion, marking a 28% year-over-year growth.
On November 15, 2023, Tetra Tech Inc (NASDAQ:TTEK) released its 8-K filing, announcing record-breaking results for the fourth quarter and the fiscal year ended October 1, 2023. The company, a leading provider of high-end consulting and engineering services, reported significant growth in revenue, net revenue, operating income, EBITDA, adjusted EPS, and backlog.
Financial Highlights and Performance
Tetra Tech's fourth-quarter revenue soared to $1.26 billion, a 40% increase compared to the same period last year. Net revenue, which excludes subcontractor costs, also saw a remarkable rise, reaching $1.06 billion, up 44% year-over-year. The adjusted EBITDA for the quarter was $153 million, reflecting a 51% increase from the previous year. The GAAP EPS stood at $1.00, while the adjusted EPS, excluding final RPS integration costs and non-recurring tax charges, was $1.78, up 41% year-over-year. The company's cash flow from operations was notably strong, with a 103% increase to $122 million over the same period last year.
For the fiscal year 2023, Tetra Tech achieved record annual results with revenue reaching $4.52 billion and net revenue at $3.75 billion, marking increases of 29% and 32%, respectively, over fiscal 2022. The adjusted EBITDA for the year was $481 million, up 33% compared to the previous year. The GAAP EPS for the fiscal year was $5.10, with an adjusted EPS of $5.58, representing a 24% increase over the last fiscal year. The company also reported a record low days sales outstanding (DSO) of 54 days, contributing to an all-time high cash provided by operations of $368 million.
Strategic Milestones and Outlook
Tetra Tech's Chairman and CEO, Dan Batrack, highlighted the company's strategic achievements, including the completion of its largest transaction in history, enhancements to its capital structure, and the expansion of Tetra Tech Delta Technologies. Batrack emphasized the company's Leading with Science approach and its market leadership in addressing water security, coastal flooding, energy transition, and biodiversity protection. With nearly $2 billion in new orders for the fourth quarter and a backlog increase of over $1 billion from the previous year, Tetra Tech anticipates double-digit revenue growth and further margin expansion in fiscal 2024.
"Our clients are continuing to increase funding for water and environmental programs, including climate change mitigation and adaptation to address water security, coastal flooding, energy transition and biodiversity protection. With our market leadership in these key areas, we booked nearly $2 billion in new orders in the fourth quarter and increased our backlog by more than $1 billion over last year. Building on this momentum, we expect double-digit revenue growth in fiscal 2024 and further margin expansion." - Dan Batrack, Chairman and CEO of Tetra Tech
The company's business outlook for the first quarter of fiscal 2024 includes an EPS range of $1.30 to $1.38 and net revenue projections between $950 million to $1.00 billion. For the full fiscal year 2024, EPS is expected to range from $5.70 to $6.00, with net revenue forecasts between $4.05 billion to $4.25 billion. These projections represent an 11% and 15% year-over-year increase at the midpoint for net revenue and EPS, respectively.
Dividend and Shareholder Returns
Tetra Tech's Board of Directors approved the company's 38th consecutive quarterly dividend at $0.26 per share, a 13% increase year-over-year, payable on December 13, 2023, to stockholders of record as of November 30, 2023.
Investors and interested parties can access a live audio-visual webcast and supplemental financial information concerning the fourth quarter of fiscal 2023 results through a link posted on the company's website on November 16, 2023, at 8:00 a.m. (PT).
For a detailed analysis of Tetra Tech's financials, including the reconciliation of GAAP and non-GAAP items, readers are encouraged to review the full 8-K filing.
Tetra Tech's robust financial performance, strategic milestones, and optimistic outlook for fiscal 2024 underscore the company's resilience and leadership in the consulting and engineering services sector. With a record backlog and strong market demand, Tetra Tech is well-positioned for continued growth and shareholder value creation.
Explore the complete 8-K earnings release (here) from Tetra Tech Inc for further details.
This article first appeared on GuruFocus.
