ttek-20241229

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 29, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 0-19655

TETRA TECH, INC.

(Exact name of registrant as specified in its charter)


Delaware						95-4148514
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)

3475 East Foothill Boulevard, Pasadena, California 91107

(Address of principal executive offices) (Zip Code)

(626) 351-4664

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.01 par value

TTEK

The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

At January 20, 2025, 268,036,087 shares of the registrant’s common stock were outstanding.

TETRA TECH, INC.

INDEX


PART I.	FINANCIAL INFORMATION	PAGE NO.

Item 1.	Financial Statements (Unaudited)	3

	Consolidated Balance Sheets as of December 29 , 2024 and September 2 9 , 202 4	3

	Consolidated Statements of Income for the Three Months Ended December 29 , 2024 and December 31 , 2023	4

	Consolidated Statements of Comprehensive Income for the Three Months Ended December 29 , 2024 and December 31 , 2023	5

	Consolidated Statements of Cash Flows for the Three Months Ended December 29 , 2024 and December 31 , 2023	6

	Consolidated Statements of Equity for the Three Months Ended December 29 , 2024 and December 31 , 2023	7

	Notes to Unaudited Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34

Item 4.	Controls and Procedures	35

PART II.	OTHER INFORMATION	35

Item 1.	Legal Proceedings	35

Item 1A.	Risk Factors	36

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36

Item 4.	Mine Safety Disclosures	36

Item 5.	Other Information	36
Item 6.	Exhibits	36

SIGNATURES		38

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Tetra Tech, Inc.

Consolidated Balance Sheets

(unaudited - in thousands, except par value)


	As of
ASSETS	December 29, 2024		September 29, 2024
Current assets:
Cash and cash equivalents	$	248,104	$	232,689
Accounts receivable, net	1,117,666		1,051,461
Contract assets	122,310		129,678
Prepaid expenses and other current assets	143,768		113,555

Total current assets	1,631,848		1,527,383

Property and equipment, net	67,102		73,065
Right-of-use assets, operating leases	172,080		177,950
Goodwill	1,968,684		2,046,569
Intangible assets, net	142,097		160,585
Deferred tax assets	96,916		105,529
Other non-current assets	100,457		101,595
Total assets	$	4,179,184	$	4,192,676

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	238,157	$	197,440
Accrued compensation	222,549		332,096
Contract liabilities	359,957		351,738
Short-term lease liabilities, operating leases	61,184		63,419

Current contingent earn-out liabilities	24,153		26,934
Other current liabilities	361,345		247,900
Total current liabilities	1,267,345		1,219,527

Deferred tax liabilities	24,902		30,162
Long-term debt	888,450		812,634
Long-term lease liabilities, operating leases	134,759		140,095
Non-current contingent earn-out liabilities	22,007		21,812
Other non-current liabilities	149,702		138,033

Commitments and contingencies (Note 17)

Equity:
Preferred stock - authorized, 2,000 shares of $0.01 par value; no shares issued and outstanding at December 29, 2024 and September 29, 2024	—		—
Common stock - authorized, 750,000 shares of $0.01 par value; issued and outstanding, 268,028 and 267,717 shares at December 29, 2024 and September 29, 2024, respectively	2,680		2,677
Additional paid-in capital	21,153		35,900
Accumulated other comprehensive loss	(187,754)		(78,875)
Retained earnings	1,855,818		1,870,620
Tetra Tech stockholders’ equity	1,691,897		1,830,322
Noncontrolling interests	122		91
Total stockholders' equity	1,692,019		1,830,413
Total liabilities and stockholders' equity	$	4,179,184	$	4,192,676

See Notes to Consolidated Financial Statements.

Tetra Tech, Inc.

Consolidated Statements of Income

(unaudited – in thousands, except per share data)


	Three Months Ended
	December 29, 2024		December 31, 2023
Revenue	$	1,420,561	$	1,228,267
Subcontractor costs	(223,231)		(213,098)
Other costs of revenue	(975,853)		(824,671)
Gross profit	221,477		190,498
Selling, general and administrative expenses	(83,951)		(79,417)
Legal contingency costs	(115,000)		—

Income from operations	22,526		111,081
Interest expense, net	(7,218)		(9,577)
Income before income tax expense	15,308		101,504
Income tax expense	(14,530)		(26,524)
Net income	778		74,980
Net income attributable to noncontrolling interests	(31)		(8)
Net income attributable to Tetra Tech	$	747	$	74,972
Earnings per share attributable to Tetra Tech:
Basic	$	—	$	0.28
Diluted	$	—	$	0.28
Weighted-average common shares outstanding:
Basic	267,854		266,585
Diluted	271,886		268,690

See Notes to Consolidated Financial Statements.

Tetra Tech, Inc.

Consolidated Statements of Comprehensive Income (Loss)

(unaudited – in thousands)


	Three Months Ended
	December 29, 2024		December 31, 2023
Net income	$	778	$	74,980

Other comprehensive (loss) income, net of tax
Foreign currency translation adjustment, net of tax	(108,846)		63,106

Net pension adjustments	(33)		(13)
Other comprehensive (loss) income, net of tax	(108,879)		63,093

Comprehensive (loss) income, net of tax	(108,101)		138,073
Less: Comprehensive income attributable to noncontrolling interests, net of tax	31		8
Comprehensive (loss) income attributable to Tetra Tech, net of tax	$	(108,132)	$	138,065

See Notes to Consolidated Financial Statements.

Tetra Tech, Inc.

Consolidated Statements of Cash Flows

(unaudited – in thousands)


	Three Months Ended
	December 29, 2024		December 31, 2023
Cash flows from operating activities:
Net income	$	778	$	74,980
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	16,063		19,484
Amortization of stock-based awards	8,142		7,641
Deferred income taxes	767		(1,624)


Other non-cash items	775		123
Changes in operating assets and liabilities, net of effects of business acquisitions:
Accounts receivable and contract assets	(91,725)		(22,288)
Prepaid expenses and other assets	(26,186)		(28,615)
Accounts payable	44,194		33,790
Accrued compensation	(101,641)		(80,069)
Contract liabilities	27,527		41,862
Income taxes receivable/payable	(1,538)		(15,941)
Cash settled on contingent earn-out liabilities	(2,720)		—
Other liabilities	138,627		(20,097)
Net cash provided by operating activities	13,063		9,246
Cash flows from investing activities:


Capital expenditures

SEC Form 10-Q filed by Tetra Tech Inc.