Tetra Tech, Inc. (TTEK Quick QuoteTTEK - Free Report) reported second-quarter fiscal 2025 (ended March 2025) adjusted earnings of 33 cents per share, which surpassed the Zacks Consensus Estimate of 31 cents. The company’s adjusted earnings per share matched the management’s upper guided range of 30-33 cents. The bottom line surged 18% year over year, driven by the strong momentum in each of its segments.

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TTEK’s Revenue & Segmental Performance

Tetra Tech generated revenues of $1.32 billion, reflecting a year-over-year increase of 5.6%. Adjusted net revenues (adjusted revenues minus subcontractor costs) were $1.10 billion, up 5% year over year. The quarterly top line surpassed the management’s guided range of $1.0-$1.1 billion.

Tetra Tech’s adjusted net revenues also exceeded the Zacks Consensus Estimate of $1.05 billion.

The backlog at the end of the fiscal second quarter was $4.09 billion, up $127 million year over year.

Segmental Revenues

Revenues from U.S. Federal customers (accounting for 30% of the quarter’s revenues) were up 1% year over year, supported by a solid pipeline of projects from the Defense and U.S. Army Corps of Engineers. U.S. Commercial sales (17% of the quarter’s revenues) increased 5% year over year, driven by increased environmental remediation and high-voltage transmission sales.

U.S. State and Local sales (15% of the quarter’s revenues) increased 44% year over year, driven by strength in disaster response. International sales (38% of the quarter’s revenues) were up 1% year over year, backed by strength in U.K. planning and design.

Tetra Tech reports revenues under the segments discussed below:

Net sales of the Government Services Group segment were $521 million, up 12% year over year. Revenues from the Commercial/International Services Group segment totaled $597 million, representing a year-over-year increase of 2%.

TTEK's Margin Profile

In the fiscal second quarter, Tetra Tech’s subcontractor costs totaled $218.4 million, reflecting an increase of 9.8% from the year-ago quarter. Other costs of revenues (adjusted) were $889.5 million, up 5.3% from the second quarter of fiscal 2024. Selling, general and administrative expenses (adjusted) were $84.09 million, up 6.4% from the year-ago fiscal quarter.

Adjusted operating income increased 10.5% year over year to $130.09 million while the adjusted margin increased 40 basis points to 9.8%.

Tetra Tech’s Balance Sheet and Cash Flow

While exiting the fiscal second quarter, Tetra Tech had cash and cash equivalents of $179.4 million compared with $232.7 million recorded at the end of the fourth quarter of fiscal 2024. Long-term debt was $764.1 million compared with $812.6 million recorded at the end of fourth-quarter fiscal 2024.

In the first six months of fiscal 2025, Tetra Tech generated net cash of $7.24 million from operating activities compared with $112.2 million in the prior fiscal year period. Capital expenditure was $9.37 million, up 25.6% year over year. In the first six months of fiscal 2025, TTEK’s proceeds from borrowings amounted to $215 million while repayments on long-term debt totaled $15 million.

Shareholder-Friendly Policies

Tetra Tech distributed dividends totaling $30.9 million in the first six months of fiscal 2025. This compares favorably with dividends of $27.8 million distributed in the previous fiscal year period. It repurchased shares worth $175 million in the same period.

TTEK’s Fiscal 2025 Outlook

For fiscal 2025 (ending September 2025), Tetra Tech anticipates net revenues to be in the range of $4.400-$4.765 billion compared with $4.365-$4.765 billion expected earlier. The projection is favorably comparable to net revenues of $4.322 billion reported in fiscal 2024. Adjusted earnings are predicted to be $1.42 - $1.52 per share compared with $1.37-$1.52 expected earlier. It reported earnings of $1.26 per share in fiscal 2024.

For the fiscal third quarter (ending June 2025), management estimates net revenues to be in the range of $1.10-$1.20 billion. Adjusted earnings are projected to be in the band of 35-40 cents per share.

TTEK’s Zacks Rank

The company currently carries a Zacks Rank #4 (Sell). 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Companies

AZZ Inc. (AZZ Quick QuoteAZZ - Free Report) came out with quarterly earnings of $0.98 per share in the second quarter of fiscal 2025 (ended March 2025), beating the Zacks Consensus Estimate of $0.95. This compares with earnings of $0.93 per share a year ago.

AZZ reported revenues of $351.88 million, missing the consensus estimate by 3.77%. This compares with year-ago revenues of $366.5 million. 

Valmont Industries (VMI Quick QuoteVMI - Free Report) reported revenues of $969.31 million in the first quarter of 2025, declining 0.9% on a year-over-year basis. Earnings per share of $4.32 for the same period compare with $4.32 a year ago.

The reported revenues compare with the Zacks Consensus Estimate of $975.6 million. The company delivered an earnings surprise of 1.89%, with the consensus estimate being $4.24 per share.

Pentair plc (PNR Quick QuotePNR - Free Report) came out with quarterly earnings of $1.11 per share in the first quarter of 2025, beating the Zacks Consensus Estimate of $1.01. This compares with earnings of $0.94 per share a year ago.

Pentair posted revenues of $1.01 billion for the quarter, surpassing the consensus estimate by 2.68%. This compares with year-ago revenues of $1.02 billion.