Revenue $755 million and Net Revenue $600 million
Operating Margin up 114 basis points Y/Y
EPS $0.83, up 26% Y/Y
Cash from Operations increased to $124 million, up 23% Y/Y
Increased quarterly dividend by 18% to $0.20

Tetra Tech, Inc. (NASDAQ:TTEK), a leading provider of high-end consulting and engineering services, today announced results for the second quarter ended March 28, 2021.

Second Quarter Results

Revenue in the second quarter totaled $755 million and revenue, net of subcontractor costs (net revenue)¹, was $600 million. Operating income was $61 million, up 28% year-over-year, driven by a 114 basis point increase in operating margin. Earnings per share ("EPS") was $0.83, up 26% year-over-year. Cash generated from operations was a record $124 million, up 23% year-over-year. Backlog at the end of the quarter was $3.15 billion, up 5% year-over-year.

Quarterly Dividend and Share Repurchase Program

On April 26, 2021, Tetra Tech's Board of Directors declared a $0.20 per share quarterly dividend, an 18% increase over the prior year, payable on May 28, 2021 to stockholders of record as of May 12, 2021; the seventh consecutive double-digit annual increase. In the second quarter, Tetra Tech repurchased $15 million of common stock. Additionally, as of March 28, 2021, the Company had $178 million remaining under the approved share repurchase program.

Chairman and CEO Comments

Tetra Tech's Chairman and CEO, Dan Batrack, commented, "Tetra Tech continued to build on its strong start to fiscal year 2021, generating record second quarter revenue and operating income on higher margins in both our government and commercial businesses. We achieved year-over-year double digit revenue growth for our U.S. state & local and U.S. federal water and environmental services by leveraging our Tetra Tech Delta suite of advanced data analytics and digital water technologies. We continued to invest in these strategic growth areas by adding Coanda Research & Development and IBRA-RMAC, leaders in computational fluid dynamics and digital water transformation. Given our results to date and outlook, we are increasing guidance for both net revenue and EPS for fiscal 2021."

¹ Non-GAAP financial measures which the Company believes provide valuable perspectives on its business results. Refer to Reconciliation of GAAP and non-GAAP Item.

Six-Month Results

Revenue for the six-month period was $1.52 billion and net revenue was $1.20 billion. Operating income was $127 million, up 15% compared to the same period in fiscal 2020, and EPS increased 19% to $1.79. Cash flow from operations was $157 million, up 89% year-over-year.

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.

Tetra Tech expects EPS for the third quarter of fiscal 2021 to range from $0.85 to $0.90 and net revenue to range from $600 million to $650 million. For fiscal 2021, Tetra Tech is increasing its guidance outlook and now expects EPS to range from $3.60 to $3.70 and net revenue to range from $2.45 billion to $2.55 billion.²

Webcast

Investors will have the opportunity to access a live audio-visual webcast and supplemental financial information concerning the second quarter fiscal 2021 results through a link posted on the Company's website at tetratech.com on April 29, 2021 at 8:00 a.m. (PT).

Reconciliation of GAAP and Non-GAAP Item
In thousands

	Three Months Ended						Six Months Ended
	March 28, 2021			March 29, 2020			March 28, 2021			March 29, 2020

Revenue	$	754,764		$	734,133		$	1,519,868		$	1,531,756
Subcontractor Costs		(154,939	)		(149,673	)		(314,873	)		(333,274	)
Net Revenue	$	599,825		$	584,460		$	1,204,995		$	1,198,482

² Reconciliation of the net revenue guidance to the most directly comparable GAAP measure is not available without unreasonable efforts because the Company cannot predict the magnitude and timing of all the components required to provide such reconciliation with sufficient precision.

About Tetra Tech

Tetra Tech is a leading provider of high-end consulting and engineering services for projects worldwide. With 20,000 associates working together, Tetra Tech provides clear solutions to complex problems in water, environment, sustainable infrastructure, renewable energy, and international development. We are Leading with Science^® to provide sustainable and resilient solutions for our clients. For more information about Tetra Tech, please visit tetratech.com, follow us on Twitter (@TetraTech), or like us on Facebook.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The use of words such as "anticipate," "expect," "could," "may," "intend," "plan" and "believe," among others, generally identify forward-looking statements. These forward-looking statements are based on currently available operating, financial, economic and other information, and are subject to a number of risks and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results. A variety of factors, many of which are beyond our control, could cause actual future results or events to differ materially from those projected in the forward-looking statements in this release, including but not limited to: the impact of the COVID-19 pandemic; continuing worldwide political and economic uncertainties; the U.S. Administration's potential changes to fiscal policies; the cyclicality in demand for our overall services; the fluctuation in demand for oil and gas, and mining services; risks related to international operations; concentration of revenues from U.S. government agencies and potential funding disruptions by these agencies; dependence on winning or renewing U.S. government contracts; the delay or unavailability of public funding on U.S. government contracts; the U.S. government's right to modify, delay, curtail or terminate contracts at its convenience; compliance with government procurement laws and regulations; credit risks associated with certain clients in certain geographic areas or industries; acquisition strategy and integration risks; goodwill or other intangible asset impairment; the failure to comply with worldwide anti-bribery laws; the failure to comply with domestic and international export laws; the failure to properly manage projects; the loss of key personnel or the inability to attract and retain qualified personnel; the ability of our employees to obtain government granted eligibility; the use of estimates and assumptions in the preparation of financial statements; the ability to maintain adequate workforce utilization; the use of the percentage-of-completion method of accounting; the inability to accurately estimate and control contract costs; the failure to adequately recover on our claims for additional contract costs; the failure to win or renew contracts with private and public sector clients; growth strategy management; backlog cancellation and adjustments; risks relating to cyber security breaches; the failure of partners to perform on joint projects; the failure of subcontractors to satisfy their obligations; requirements to pay liquidated damages based on contract performance; the adoption of new legal requirements; changes in resource management, environmental or infrastructure industry laws, regulations or programs; changes in capital markets and the access to capital; credit agreement covenants; industry competition; liability related to legal proceedings, investigations, and disputes; the availability of third-party insurance coverage; the ability to obtain adequate bonding; employee, agent, or partner misconduct; employee risks related to international travel; safety programs; conflict of interest issues; liabilities relating to reports and opinions; liabilities relating to environmental laws and regulations; force majeure events; protection of intellectual property rights; stock price volatility; the ability to impede a business combination based on Delaware law and charter documents; and other risks and uncertainties as may be described in Tetra Tech's periodic filings with the Securities and Exchange Commission, including those described in the "Risk Factors" section of Tetra Tech's Annual Report on Form 10-K for the fiscal year ended September 27, 2020, and Tetra Tech's Quarterly Reports on Form 10-Q for fiscal year 2021, as well as in Tetra Tech's other filings with the SEC. Readers should not place undue reliance on forward-looking statements since such information speaks only as of the date of this release. Tetra Tech does not intend to update forward-looking statements and expressly disclaims any obligation to do so.

Non-GAAP Financial Measures

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 to the most directly comparable GAAP financial measures is included in this release.

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