Tetra Tech (TTEK) 18 Nov 212021 Q4 Earnings call transcript

Good morning. And thank you for joining the Tetra Tech Earnings Call. By now you should have received a copy of the press release.

If you have not, please contact the company’s corporate office at 626-351-4664.

As a reminder, Tetra Tech is also simulcasting this presentation with slides in the Investors section of its website at www.tetratech.com. recorded is request Tetra the being and Tetra Tech. is broadcast this copyright call at of the Tech This property of the Any or Tetra information this is prior without Tech rebroadcast of written in prohibited. permission of part whole Batrack, from and Executive Chief Officer. Dan Burdick, and Chief With us are Chairman today Financial management Officer; Steve up for questions. will brief of overview call They the results the provide a and we’ll open Safe to Harbor to statement direct presentation. today’s like I’d the your in attention expectations. statements Today’s future about discussion financial and forward-looking contains growth results from risks forward-looking forward-looking uncertainties, in Actual significantly as statements law, Tech due filed including described required today’s differ projected in except Tetra reports takes may those risks the periodic to and Tetra its no statements. SEC, by update with obligation various Tech’s the to

management listen-only this that, non-GAAP section In open With up Dan go Batrack. like I the are in posted will as for references, reconciliations over some At GAAP will company, to the Investors presentation. to in you the all conference the call be website. ahead, mode. measures time, presenting appropriate Tech’s participants financial the of financial a Please turn are that after would inform to Tetra questions-and-answers addition, of would the we like I Batrack. request the Mr. since At

environment, funding Climate trends from quarter areas impacted here affected supporting to emphasis the while the Year much, we and invest seeing and clients we’re we’ve of by exceptionally and In creating increased and better an renewable our in we as Fiscal in our also today. orders Call. year than commitments very aligned priorities sustainable Earnings in of XXXX, commitments XXXX all-time to Globally additional year. excellent strong for completing with climate disasters. global resulted energy sectors and good and United fiscal governments Laura, on Quarter Conference driving with for fourth you new those reduction high had been generated our fiscal in growth local approach projects Thank are with and longer morning. are And unprecedented backlog resulted the clients. strong Fourth our States, carbon welcome new enter by infrastructure These And our make We an Science change term are in priorities XXXX and across that never alignment change, emissions. an of all water, resiliency our that is adaptation, directly communities clients Leading us. to we are

I’ll performance last XX% share our of client ending million revenue, our $X.XX strong operating per capability share. $X.XX and earnings revenue an delivered with is then in We capital demonstration which last record Officer, are our you’re now on if allocation. Board, our The are $X.XX fiscal time year and results basis, income $XXX of across million, year cash GAAP our will customer than per We and highs all year. I’ll financials share the the customers, of strength generated a our year our of overview company end our is operating and provide for year. from and business guidance XX,XXX XX% detailed with strong $XXX full year of along, and fourth Chief from Financial more webcast, up up following XXXX. XXXX. earnings net of the and last Burdick, from across up outlook fiscal a of of performance $X.XX we Steve year adjusted also our focused year of shown address We and earnings review physically a As fiscal fourth And more highly a XXXX. quarter quarter differentiated, in who cash per the operations hit followed EPS, income technically with had or by in of of on global begin XX% billion who the our associates our disciplined.

revenue the year-over-year XX% to Our $XXX increased quarter. net for million

provide our for clients. was Our looking XX% same the clients operating forward time the now earnings XX% in fourth state the the history in our up Even disaster advanced growth would for our our up overview clients performance the the compared to and our quarter last which generated revenue revenue history. Work of up of in year. revenues, Federal from business. exceeded income this change-related excluding best any is And the contributions of extraordinary $X.XX, and local both quarter like climate organically We services the all year EPS were and from indicator highest the quarter an sequentially. analytics per saw we’ve our our year. to an last for increase our history backlog, highest state This XX% end strength in year. billion, share driven of fourth response our of sectors sixth quarter fourth quarter million the was local from growth $X.XX of to I company company’s in of $XX US year. our growing of was EPS the represents of by in and last $X increase the and an company’s also continued for This in XX% consecutive work, X% In quarterly year-on-year last customer. was up double-digit our by It quarter. first

X% our of XX% was from last revenue Commercial business, year. up US Our

growth driven and revenue the contributed our International, last our growing in renewable permitting, And XX% finally, up fastest where our environmental client from sector services energy was to programs sector. was all Our year. regulatory

from who work of sustainable United Canada, expansion a grew United did performance high the us Lea, The revenues International programs Hoare Kingdom. infrastructure strong of XXXX. and group rest in XX% our with broad-based International of in the buildings fiscal pace Our in Australia, the addition at fourth the new benefit our Kingdom, of joined the quarter year year-on-year

growth both Now double-digit segment margin by last our to end XX% Services compared across work CAG’s market up last fourth or our the delivered for services up present in and fourth and fire income. grew our design to grew operations International a data Group a I’d United rates was water by and XX%, quarter all response GSG International here the of and Government segments quarter programs, by margin, $XXX year-over-year. In This or Group year operating results strengthening were country. on Commercial disaster The The environmental high XX% maintaining our year. points million, augmented by strong year-over-year CAG from Commercial XX.X% was like at recovery to basis the performance while XX the in segment. and driven analytics States. performance driven

won the broad-based a Our new for and backlog we for and year International contracted, new task $X,XXX of building all-time resulting environmental quarter, water, and U.S. In services work strong was in authorized momentum funded in renewable up on orders high market. differentiated us the and billion energy programs from fourth both fiscal sequentially XXXX both orders year-on-year the and in X% of clients. our

this And Engineers change NOAA I’d over Commercial financials the the by International an we $X turn orders environment point, quarter restoration Burdick of United presentation contract was our States sustainable to extraordinarily fourth billion for provide the the to well-balanced over Commercial where energy, the orders Corps programs. orders us infrastructure climate government services. won agencies the to we that per for and the of renewable U.S. programs U.S. our We year. of This We from priorities. present like also our contract both clients. vehicles change expanded environmental over and at key climate strong our Army the $XXX USAID, for and Steve capacity water, million and with to now and In had from adaptation both task Government’s quarter, finished to and provide quarter details from government support

Steve? So,

Hey. Dan. Thank you,

GAAP earlier, I’d condition record we our QX as now XXXX. quarter, EPS fiscal to well record and in income, fourth had operating year Overall, fiscal backlog. -- as results review results the results So, for the revenue, financial noted Dan year as like financial for and now

million. For of the million revenue was our range $XXX upper net of end fiscal guidance $XXX which million, to million. $XXX $XXX XXXX fourth exceeded to quarter The amounted revenue

was double-digit growth the last revenue with last year last profit International, XX% over which across and XX% improved. quarter, in increase fourth of up net $X.XX Our year. and state the in local year, at XX% over revenue end share was earnings and GAAP up our Federal, was operating over EPS came an per Similarly, markets.

in last This end The earnings for year XX%. the $X.XX of was XX% quarter adjusted to improvement over in up which addition, over improvement came $X. is quarter, the $XX of EPS per of last income our at XX% operating than $X.XX million In the adjusted fourth better was of top QX guidance higher an income, last by range share year. $XX over in up million, due year and came to

GAAP that results a release the benefits. of available provide last And cash between but non-recurring point primarily there’s turned in reserved benefit basis no Dan flows CIG margin losses was tax from quarter recognize difference in And tax positive of losses double-digit over $X.XX was operating of in we from and A release, -- around improvement reconciliation because the company. such really profitability, operating of to The fourth tax of the from an in driven to the loss tax tax the XX% perennial XXXX. was and our the tax as accounting a EPS to the the points due is for XX.X% WYG company quarter As that earlier, an CIG EPS future fourth noted out, future of requirement year. benefit. net $X.XX not a acquisition future the to longer improved margin by with XX the growth will resulting of benefit adjusted

fourth of remain positive generated operating the excess focused income. $XX million. from cash flows totaled also on flows in operations for our generating We net quarter Cash

ahead XX%. have year $XXX flow million cash fiscal operations, is in generated XXXX, of from last For we which by

and working in this on as year decreasing is from flows focus This fourth of has five days days last DSO quarter. at capital the time. our an resulted to XX of Our cash improvement

X.X on to cash This debt EBITDA with at debt last a leverage on improvement our in and position million, $XXX -- Our is $XX of a million million net than $XX debt of net debt of times. to was amounts compared our invested net EBITDA year. more net an

strategy and in returns of balance allocation the of providing capital long-term sheet Our managing for investing to our a business, calls balance the shareholders. our growth

continue we per acquisitions five strategy. over to in provide to year, that returns generated which through share. during and the invest to the buybacks. fourth This And from has quarter, our dividends about $X.XX equal share million, $XXX time For to long-term operations is allowed us advance significant shareholders for cash

So of during last want our year. month an regarding quarter XXth at per stock and our December share, paid program, out which to Furthermore, in Directors be of that dividend quarter Board the we announce our the million we I rate XX% the $XX.X in on in of approved the paid fourth is dividends, our will over which buyback consecutive $XX a increase dividends program. million $X.XX utilized past

continue your technical of With these the invest $XXX balance liquidity total times. to complete available X.X more million areas, the pleased acquisitions. these to Thank share and fiscal quarter told, positions back recently XXXX, still And all. our both our cash over stock capabilities flow share to remaining the to and fiscal in $XXX capital year the we results All call program, and financial the strategic and to to for XXXX, to dividends through a $XXX I’ll shareholders, with million us through over and for turn support I’m addition million growth strategic continue in we really successfully and $XXX approved us deleveraging Dan. strong you fourth buybacks. sheet organically million allowed these shareholders returned strong to you of acquisitions, of for buyback fiscal in our than programs. while had our And to return announced our

like Thank Great. major to much, spend few a drivers market Steve. our very we I’d and the see that discussing outlook today. you three minutes

on agencies we First, directly the aligned with Federal what that U.S. focused are Biden administration is increasingly do. programs

type that we is all that climate just our commitments Congress trillion President and awareness climate ago. Federal XXXX, clients. Government bill budget across bipartisan working economies and the change development Their multiple January there’s market of is agencies and resulting an the are the Second, programs set work that drivers Federal water for International we’re new in. the directly privatization the -- the line Since of clients. in Biden that do. administration our in with priorities was landmark by These sectors; Internationally, change, that U.S. $X.X the environment of three the International first that And increasingly for focusing bipartisan three do across support development. civilian the primary distributed in work with of the we infrastructure third work is signed are Department is days the third, support agencies; resources on US in us Defense; Federal three and passed increase

and clean development. For trillion the known highest these with includes and United XXXX, energy States an the with that agencies, investment the We Act, management programs. are support ocean different consultants. Protection in over billion Infrastructure Investment Environmental sustainability and work the contract in into President and their of law, out United across and over he their quality $X.X Jobs waterways. end now. we water and to will States. of departments what of administration’s the have XX, signed forest November also act provide we Agency profile water, use committing Federal in contaminants emerging Biden The protection, resilient currently the reef local contracts in or in clear capacity with highest Government on XXX energy, are the to sets do IIJA, $XXX that facilities. US flow of state billion such as We here Defense priorities coral agencies high Federal assess and aligned environmental and And priority to as priorities impacts funding United Department designated design their on the USA, on mitigating climate States. for commitments we We PFOS new through and with funding some and the ports work we’re we support directly Federal, programs working impacts for restoration, their and and programs, These renewable On of change and analyzing all $XX

the the This renewable programs example, that opportunities voltage solar. our services clients water local permitting, watershed provide and work across act hydropower, markets science in design engineering dam provide energy For in our advance design we’re and supply the provide high consultant design. we and us We restoration. for design include to for resilient we Engineers new wind desalination infrastructure a for to Corps landmark state and ranked will of and with and waterway Army clients leading one serve. And our management, with number

that to with By United project with infrastructure growth energy. Leading sector, the in. there’s in and their fiscal stimulus our As we local enter at expected revenues XXXX, increase as extraordinary between fiscal an high grow countries resilient year for increase we this Australia, XXXX, double-digit exclude are we clients initiated requirements in major XXXX adaptation, we’re demand supply of is grow restoration, driven business not XX% by we’re Across the contribution the our funding on X% expected also continued leveraging about in our commitments Canada, and focus continue remaining an to be high working we should work the in in water to climate clients guidance. investments clean and increased our growing strong seeing therefore, is their the end protection, solutions. or is all business, and year $XX us address our does projects bill Kingdom Science Commercial as budgets and alignment XXXX. coastal additional hit between rate high-single early resulting evenly with funding and increase that climate US and to grow the energy activities from came for response International, including and for rapidly of at fiscal awareness begin is by provide and that priorities. pace of XX%, disaster material growth from until associated This additional in approach, much with change consulting fiscal new year to activity, practice. for the engineering in the with in our which be infrastructure a any our expected for Federal and continue State US outlook our four to with well International directives, however, about with This XX% act I’ll administration’s with now associated have We and in in fiscal Government a Federal rate. that across our present XXXX a client actually year late split programs performed. to regulatory year will start like assume, included renewable to will And million the continued environmental increases or contracts anywhere a or sectors not digits by I’d Commercial of XXXX as Growth third sector. end the expertise be our our the work. XX% US world. should supported

infrastructure Our expected as United and XX% International in key XX% change at our rate we support a the to increase Canada. and work of Australia climate for is sustainable grow Kingdom, to services the geographies

Now margins the fiscal growth to while XXXX in I on rates also going revenue expand. key sectors, see covered from just to we’re our continue operating our year client

to can basis points you this margins margin our and relatively XXXX. from a our segment do to XXXX of by to on from and our result webcast, I for XXX the an expansion basis going We GSG segments. basis expanded see XX points that anticipate fiscal both CIG since fiscal expansion an year contributed is we’ve points additional XXXX. operating our operating year XX.X% margin say be will between just year As XXXX XX even

expanding both our present I’d within from We now contributed for of of see one year evenly relatively continued promoting that margin margin expansion to like the them the the and guidance and segments. for just company. it XXXX. first quarter from fiscal a all not it’s So be we’ll

Our quarter guidance the as follows XXXX. is for with will start and I first

range revenue to million a guidance $XXX an million, associated net of diluted with of provides Our $X.XX. $X.XX to earnings per $XXX share

billion $X.X $X revenue our is entire billion, earnings the a $X.X for to For $X.XX. an guidance year, share range of to net with associated per

billion As fiscal than it’s XX.X intangible in and practice quarter bit include be does these have acquisitions this is fiscal place expect remaining different may had the to new We amortization, do rate which XX% remainder tax at not outstanding the in share our do year year. of summary, we quarter, past, the per shares that in performance. we effective with the during past records quarters first our of has practice three does XX%. about during from Board XXXX In across Tech’s Tetra guidance year as been the an the XXXX, the $X.XX that an year a been entirety include fourth in take contributions excellent for the setting the

As services year XXXX, with of environment, we water, energy are our all priorities enter high fiscal clients. aligned renewable our directly of end global

high both with Laura, fiscal backlog this we’re call with billion year. us visibility $X.XX I’d And momentum of new Our that, excellent provides up for the and all questions. as into moving to time open like

from England first [Operator comes with Berenberg. the Sam Instructions] question Our of line

proceed with your You may question.

for Thanks the guys. questions. taking Hi,

margins terms wage doesn’t about the had, most inflation moment? what a The at obviously at at services could the impacting to you common a moment your professional first space and staff topic, one bit at It’s seem and all attrition? I also of seeing the moment be you’re talk in

economy plus on it’s respect has are our no not that affected good find of Today, question, inflation. the We market wage it impact focused Quite are that people be finding the are to the often Generally, sectors, early some really we of but on Tetra with seen they decisions they’re come individuals issue salaries salaries Tech at and workers in Those may portions an do individuals business. the inflation, do increase what our more join market. with paid been wage entered recognize really time well and little we to is has cost pay with Sam. materials. projects impacted or who that that are would and our we’ve Much and to issue wage associated respect consider the who’ve just I wages.

point. able which attrition that reiterate that our With today, in the in we the see we’ve reimbursable contract to respect also we or it not on of event will through cost do nature rates have. future, not but be would the seen vehicles I seen pass to turnover, or this we it we’ve So it our at

think drop of We I’ve a basis rate it the calls on the overall bit mobility Tetra dropped X%s seen some for X%. with the the I collectively increase pandemic, seen has on of sort restrictions. of little economies in We’ve seen these to other increased that Tech roughly a as since annual high XXXX. is March not And an down. of were previous in advent actually turnover company. shared reopening of the about and sort go as We’ve of we’ve that

we’ve matrix it they really but with such be allows we prevalent on seen not most think a for we employees thing becoming one environment issue particularly watching in But sure, Tech So is or of we have the time. work for makes not a the to is Tech work for that a work the interesting a we destination number, an change are, -- that actually Tetra be here that the find location, career that that a have clients with the climate topic. that at lifelong type at not for great And a impact our that just Tetra world, we’ve carefully. difference perform them and have, not make this us in

in industry a joined been here talent So in turnover. attracted has of us where the we’ve the have there little bit not much actually had higher and fact, have some turnover, best

International the the just could thinking business? this had, wondering Okay. I Great. that arising Thanks. from if I anything COPXX of you you think term, Then in was longer to the the there next one about a side month be particularly was benefit

that’s -- there. there is think do opportunity I Well,

to I the have look did of of was funding. one how to see one that commitment slide us. drivers the increased going for We’re

noted just presentation, have climate Kingdom We $X more the Canada, than billion seen by billion double at over as that that had I additional that investments $XX that finances, going webcast Australia double actually to on billion, focused increased is United anticipated number billion. change in are government from commit an and $XX to actually at private $XX again, number commitment be the mobilizing

so investment collectively And $XX Australia as to collective initial aggregate over think billion trigger next decade. of that billion an the $XXX I the in investment a

to So our we really build, contribute and we those have prioritization. really that a seen these commitments to for or the for United being and initiated the switch. United a projects a work numbers. the global We do our we in committing we’re believe week And and going States The well think economies similar future. commitment to to not we to States. doesn’t continued the a commitment do and But Infrastructure it largest Bill month. was can future encouraged, just day light a this the so here dollars in clients not is the within portends It’s we’re this, or see continued very the think turn

set which I Are you given maybe wondered of sort we in past? you business technology the way the in the sort rethinking margin about is margin And business, improving improvement profile have Thanks. opportunity the the talked another just margin for Great. targets the Okay. one just more, of the longer term strong side, of the you on still or seen? was

actually that we think -- or question. progress establish hope We the from great I two year, now. years new that’s targets as identify Well, three a through years that will a we’ll out I

We income have targeted margin. operating XX% a

do back some many analytics reevaluating now, some fact our have, you we of data think that with scale, bit no of as our you that question items to other we’ve software subscription think close clients, that and comp, that up back programs to will of some look the a we very little and And to in back see sharing typical that base deployed I we’re which more coming build the forward for there’s reporting, go amortization, margin more is here in are adding that we work number the adding I the shareholders to ground, and I’d that with XX% like available in you’ll for that as higher the move you some that that. add if of through stock we quarters. do expansion we think for we the year. quantify we have, us there’s here are do the But

Thanks very Great. I’ll hand much. there. it over

you, Thank Sam. Great.

next the of Sidoti. Our Riddick from question with Marc line comes

You may proceed with your question.

just going and that opportunities touch what as on opportunity there could little that mention of was far forward? Good morning. that and may the we’ve I a building wondering particularly past maybe wanted what ups that start in the -- performing high the bit views made was if your a about U.K. I so provide of on, initial are bit to talked one in around seen call you as well far I performance what we you’ve and know

this that the staff. the Well, of X,XXX addition now with just of buildings is areas which in adds is under one practice is the interesting high that, Lea performance Hoare U.K.,

in United East larger West and Australia. States the the a We that and here than Coast on primarily similar focused have a in probably number number

great have geographic think to our they presence are. a wherever we support So clients we globally,

We have office business. space, that reevaluation noted and that even because XXXX, pandemic in and XXXX in the slowdown saw a of we late of

pullback. year, the it that primarily comparables really but growth this in up the of really of impact half it no the that from year investment was with rates we an very to interesting respect depressed was So because go saw as Internally, buildings. year-on-year, second with prior was the

we that rate. construction. zero, I from do moved of to the that double-digit renovation allow it the where of to move lot from are net will see interested how in growth are pre-pandemic collectively did and and higher see in to industrial comparables growth. And to existing much Commercial allow that we the mid-teens the allow numbers the say is a think are new activity. buildings be reconfiguration and XXXX to more the into average our I can buildings So than move just margins construction the progress new representative. early rates and both more buildings wellness I’m to will distancing, for hygiene, to more as

And so drivers. I additional It think Commercial by priorities as they clients have These and that for tenants driven seen But it’s our going is with of their items to to interesting. regulatory have. be contributors we’ve emerge been buildings the own. for an one we begin that tailwind are the strongest

from the buildings, of part moving and think, XX% globally. physical associated before, with as greenhouse approximately of to emissions gas emissions building lower So this I structures are mentioned I’ve

So area to addressed this global is greenhouse that absolutely increase needs warming an be combat and emissions. gas to cornerstone

seeing was we So I requirements think world. regulatory driver. be driven the regulatory a of jurisdiction now this is are with emerging forefront grow now at preferences, we contributing of to think, And that mandates U.K., by with drivers in big are what the client’s to respect the personal put may it and the that any going some regional the to of

to expect with performance Tech plated, timing was high a are them to position and Tech So actually and design. very consulting leading forefront, end top things to engineer contribute Tetra I think fits gold great for elevate with help Hoare it join They our us. great well Lea from I buildings a that Tetra

on update last little thing a you. it I great to utilization over, forward. Thank for wanted for the the just I turn then, And me That’s bit opportunities before That’s a going touch great. us.

to also and past, that I and join maybe maybe ability across the what I look may that the of of the little that now was act? mentioned to a stay in use could areas company. little in staff you’ve the those would was But may maybe past following is a wondering with so some something there’s about talk more or you. if bit draw you wondering folks we’ve the visibility of certain think -- And I imagine opportunities service. certainly signing Thank especially like, for the borders across I a mentioned

over company has question, been electronic that really One extraordinarily of you -- we within are past use with in areas some great would with virtual and or been been what a if Marc. place put our the the decade. that I’m of platforms happy the the That’s pleased asked I’ve thing

when So office from home how great come, extension or great work. individuals of to internationally. opportunity the an to been we’ve was to pandemic able going And we what just the instead of the move was get did do not the did it working test ability to

So geographic centers for our have instance, the example. great of high is different performance buildings specialties. Each a

Some world. at the the in protection are fire best

Some voltage. the and low lighting at are best

communication respect systems. the are mechanical systems. at Some are Other to best with

just very we helpful, Commercial to able sector, been Federal or move to the have project take these allow world on to them them not individuals where in so but areas and class are on to that electronically And in of to clients, the were product, they things different for and best move best expertise work world the picked up our these we local. the slow and has work outcome regardless our in when got state work, and provide which a

flexibility So the has great have respond fungibility we disciplines the we many given work. of surges where have technical to in us to of

more up our that today, bit technical say move about in, the across. is included you counts this we can saw for a don’t in our at that have the little we which workforce significantly, in and have that Burdick, Commercial, stranded myself, recovery company And slower a counts all it labor in CFO So and XX% we but we’re will running picked I a assets calculation that a individual see or Steve utilization, of we this, is And I’ll every can margin, this. Government reiterate individuals so base. in instance, those Federal

our is XX%. Some include include everything in around we and else do refer between SG&A you it, to SG&A, your as

that to today. have with surge could a to address increased we capacity We respect the utilization XX% with XX% about have we existing workforce that to revenue take

Bill a for adding market accelerated some if is problem with really respect the passed, have So with and reason quicker, having on additional that We we staff. need taking don’t responding issue and this the was don’t any Infrastructure it. work hits to

we’ve combination a to can our surge adding it’s additional any business use that’s of without increased technology So that handle overhead. and employed a of utilization the XX% and in XX%

just would a expansion. bottomline that or of drop the much margin So to

and do market. we both utilization see how in we with handle would the we how what additional opportunity, opportunities actually that’s could So it

you. Thank helpful. really That’s

very Thank Okay. you much, Marc.

the comes Dilts Our next Stifel. question from line with of Noelle

with proceed You your may question.

the on and guys, next quarter. Hi, congrats

Noelle. Hi,

that somewhat by me impacted I look the a as just been surprised Thanks. sure. more -- the you CIG pandemic. and because just we have see, yes, mentioned to was anticipate CIG bit to margin hoping pretty even dig on GSG a improvement little across that those in little you sectors. know seems maybe And I more I of bit profile forward. Dan,

that costs the be then in coming maybe aware this pandemic with of kind of So into kind bit the see And like, a et more forward beginning a little each looking how little business, the of back for a any at that touched Thanks. to there with dig looking we bit segment? you ease cetera, are but profile travel, you’re margin utilization, into you could you on should bit?

Okay. I’ll Great. both address of those.

was looking would and for would municipal Government actually additional the of no water is Services digital that’s and there’s that years. use couple originally But for digital First the have and monitoring disproportionately Services, for CIG plants fact, for is with platforms, these operation Government two is the in past our and expansion. I margin move we the local expand doubt, technology years been and state that margin to or have say allowed remote to seen Group to clients that of past over margin, over I going what I in grow to expected have

engineering the And actually is higher I’ve to for years, Federal million over we allowed about a rate, in up solving these practice, is and use $XXX the and grow current which IT some we spoken of I would year carrying its a the at past expansion. about and of that that applications Our much additional run expect of margin rate technology. for next just $XXX software projects to million say couple from calls consulting challenges have,

our went be a that So I back two, year thought to you I or a if thought that, Government Services was good. going

and said of XX%. mix. will gone that our CIG were -- to XX% of or saw I to of the expect I a to XX%. ago and think XX.X% that expand, I data I’d part we continues XX% go by to data We’ve year use XX.X% that’s technology because driven a

business We have had down more that moved and rates. call I would shed close commodity to what

We have technology. used

into So think government this do next for will expect recovery. to be I XXXX margins XX% I range. and of lag recovery year, what Commercial that and local I I XX.X% from the our still some state was clients that to will will and work will think, add to think with the to the expand came still basis XX%, yet XX I there another spotty points XX.X%

the travel We vacation been see on been with time. through impact bottled going that, use affecting those side And go, not the and and of New a and think additional technology quarter and U.S. expect types be reasons, from Thanksgiving an and on more quarters bit had its think and all utilization I’m cost. there’ll Government a we’re now restricted as do the concerned CIG as additional analytics. through have are do And I advanced more little respect in additional traveling. outside to know entertainment, So time our vacations maybe the is actually about so holiday the see folks Years. -- these do have right mix again, items. and the and I way But of we I cost in that of travel first far I one bit up

I think relatively de minimis. it’s

I think temporal. very it’s

in a But see will vacation it’s I you to little QX, But that think that’s I visit, increased see very temporal. people not time do rates off family of just hadn’t all. I at time, seen. surprise. that I think don’t and a time resurgence slightly affect with cost spend if an So a take indirect get a our will will mention we

we’re already fact, guidance. embedded for planning and it’s In in our that been

Okay. sense. That makes a lot of

of in just, about you’re PFAS the obviously, high the you’re you there bit water activity in touched saw kind a on performance in around could nice question, you’re this Thanks. you how quarter, of Second seeing and in and expand the on seeing you industrial Commercial thinking what point? acceleration buildings. consulting of what [ph] But at US terms some

-- interesting. news. seen I or it’s with Commercial administration respect past -- to initiate have since investigations over it’s areas PFAS. with bit steps may I’ve question. been on has current while these complete I’ve PFOS. that all first, contained to We’ve fielded standard good I’ll a being products is these actually of MCL become a The move start questions there topical for a of water and discharged drinking year more come prominent the timeline as any or think where clients that the PFAS, our necessary create assessments out the a calls to or days. or water of It’s is been to the of It And seen the PFAS an that in with extremely now two, had EPA

of any these PFOS seen the changing or derivatives or components product or of an seen have and some regulated have We’ve increase we PFOA chemicals. of other anything would of evaluation So investigation usage in assessment. to that remove

would that seen we what regulatory as a portion, driven on requirements. to enforcement I say, or regulatory have precursor So a

seen So that. we have

industrial would with We’ve the lot be it purely I do of discretionary to have regulatory that I water, pretreatment what static. say, the some -- as of seen water discharge are far has a meeting pick far driven thresholds as industrial meeting requirements, under been in work up. place. work we as our programs As respect would that But to

side. really bit the though, know I that drivers. PFOS, little were So there it’s because and in regulatory from I the seen pandemic, do away Commercial say moving we’ve stable through a

the have have -- doesn’t will in meet PFOS that XXXX As expect, standard, overnight. of PFOS it’s based to so EPA, from municipal to moves standard to that all which forward, we happen a timelines and out regulatory the probably, utilities came on water moves going that and the the

put in future. this of So that regulation in anticipation driving systems will the already the will entire soon. treatment begin in County, to in country the those fact, in And one have the California, work start evaluations of largest of place we PFOS that Orange exist

it’s so to here coming, that’s something being beginning from it seeing be now. actually we’re So

so Thanks Yeah. much.

Noelle. you, Thank

question next the from of Sean line comes KeyBanc Capital with Our Eastman Markets.

proceed with your may You question.

items just I’m Thanks in the that Tetra core IIJA. are just if I’m any wanted seeing to what taking the if you look type Tech this line I for percentage at you to context team. plays can provide bill. come legislation? just Hi, this curious, funding you water of in, curious my questions. back increases for

actually we IIJA. a -- areas We areas can XX the but US would addressable that on. as point to just we Infrastructure market direct it’s call reference -- I Stimulus would would to of page focused or be that or as see of did a some you slide, the I our a out on

from Now to… there’s everything broadband portions that addresses many

Telco…

our … the other areas structures. we that’s infrastructure that one bridges I resilience water of But that’s some billion. funding. caught and see attention, are new will $XXX say

So going when zero when a percentage you’re resiliency, $XX you climate from that increase, well, billion the put for say, know incremental you I to what’s number. how on don’t

we again, even outline didn’t new for over anywhere resilience. infrastructure in creating $XXX our new But and projects funding presentation today, think of actually here it’s are and number here infinite billion an addressable before. from we it’s over water $XXX that So new priorities directly just and what did exist billion

from Our voltage the renewable the determine doing transmissions which work in-house. is the it lot the and for into power it is grid a engineering high we’re of that and much and of grid, is infrastructure, to energy interconnects

high have you, Tech. an voltage word Tetra to which a And Superfund additional within have another high billion. America. being voltage well We just is I’ll do Environmental very it’s put capability in sites, that North electrical anywhere $XX type of is one over tell organizations engineers XXX for that of engineering few restorations, the

well ports we key course, for $XX to And and at very billion. ourselves. expect over that So waterways increase it’s of an and be sediments contaminated incremental

they know But we’re one to So busy focused make is we’re that areas. that an time. bill should I here one years. years known three Tetra focused This bill us with on. these do to to and XX of the is on at going I areas covered is what positive do in to passed, years about least it’s push And Tech that’s program than years. different the think next respect to -- year two stay item, for a want the period five keep to next many that stay itself more we that the the the is feel that going bill and funds so are that is sure or the extended covers through a I the It not

So to actually of tailwind time. funding a or this is an that’s period going extended over deployed be

country see need forward you a global for what high the happens. So take not, become and leader. the XXst the to that, It’s And leaders, engineers actually that. just end it’s fast thought let’s funds and are lead and for well-positioned take very we scientists the that Tech into Tetra and to and century think to the go infrastructure be actually that going invested for we’re

It’s response so this. that helpful. saying, in here light your And for to get your more highlighting of we’re ready very your rather than there. ramping the in excited have the out coming you and staffing, flex staffing current Very just around Okay. on are call interesting comments

So do start Dan? you those want making what see exactly decisions, types of to you before

my predecessor, prepare practice practice, is and our And learned we that I staff learned work. We question. Tech’s predecessor, culture, is the don’t Tetra advance of my his it. hallmark great a from to from That’s who in Yeah. which a really for staff

address amount with to We staff, on. we that come. a to have anticipation in commitments will handle staff come increase. we and are a XX% is, will add to do What in projects projects to going aren’t can we the that add of So as of staff significant make the we we marketplace work

you said I if additional handle could plus flexing another about we or this, utilization the -- can through technology utilization think use technology, when X%. believe XX%, So the I of

the revenue round have up we an and that’s billion, $XXX annual we that throughout handle to $X we that at the just the deploy could So workforce million, million technologies additional let’s $XXX million, today with organization. of $XXX

So we that. take could

do you’re long-term at would there call then is what the staff running means so to that I that it forever a add your what speak, would more level. car bring utilization so RPM, then course, and to to back additional Now, would would of we we a organization your higher running sustainable or be that doesn’t like

So the that tenure this through deploy would is the and that to the employed, future. practice company expect in at certainly we’ve my we

that Very sneak utilization margin And the consider Okay. the much XX of so out versus mix How into basis as I’m IIJA those I Do advanced the these the programs. accelerate look just expansion several that you end opportunity been is we kind creative have of that then, to highlighting and fiscal penetration around and helpful. funding you international have take accelerating there years shift mix solutions is and other this of you analytics one over more quarters? guidance business? going to the higher margin margin some an for some in, funding XXXX. see these of higher of of last digital of in mean, programs. points

other The Well, utilization expansion it’s I or certain just fiscal respect from of And mix think, a use basis has yes. the with answer year is, of points more the only half utilization technology. amount through our contribute. And work of and can is growth. that optimal about for the XXXX, to and XX half topline

can to And corporation? it mix Commercial think And Government expand side. is the and and going that’s movement was levels affects our the an today, the from that our high believe come change and answer earlier which and yes. technology I new margin in are question So I both clearly, there by that the

that would the that from, an and will of work. And have that’s use technology performing area it’s margin expect So come to business in upside going our I bigger the going outpaced through future. that side represent -- to we where’s I what I of even say additional come that’s mix the

more work as no based quarter structurally Our and be of it’s high have that on to moving moving workforce. something can always far moving up, of to more more from end. doubt, But use as everything we more our any the and changing there’s the technology given the analytics, utilization in compared will to contribute and amount -- it

Thanks lot. a over. turn Very I’ll it helpful.

Thank you, Sean.

from of with comes Andy Wittmann line question the Baird. next Our

may with proceed question. You your

USAID question taking I Dan. the had for my Hey, on question. a Thanks business.

Yeah.

you’ve much And of and previously when business in the into guidance business was uplift particular wondering, how I from about are talked traveling just guidance how is was because this increased baked or this of how back the in some revenue much people nobody pandemic. work -- the to USAID? suffer did XXXX declines the revenue guidance your how

the USAID of the Well, call end back good International that’s because to we had And what last really flat. this a July, if you quarterly growth. went all here would question, be was fact, actually relatively Federal actually at drivers in our our quarter work you saw last biggest development one Andy, we for of expected I with collectively the that was

primarily prepared our Federal by driven was in as defense. remarks, my fact, In I civilian the by, work mentioned and

the we contractors ago, and couple by Tech we a the a AID, Tetra in contribution fact, from flood with supporting water, that we support of those Within fourth saw Now And the were renewable the largest we switch. previous watched of did after development Afghanistan. of western Afghanistan, about XX million the was see everybody gone. other roughly that half to U.S. the early very light pretty and protection, supply was so that business all weeks $XX end, end development, net what few USAID, fact, way, months in International reliable sanitation, infrastructure come the quarter, exit to the to from the or for September, one energy working of back go revenue of company, being a in what weeks our at countries much agencies revenue at roughly support programs. on was to sources,

ancillary refugees fiscal we into what that our supporting actually respect to have with continued it’s caused with as and some year But Now moved to that move growth Federal I call other us XXXX projection. item items. work I think we

a was the quarter and to little You for bit XX% reduction saw that to estimated and this that million X% us program. back saw had of really associated single to XX% solely XX% with XXXX, almost in that beginning growth $XX a you we fourth it pull Federal

that rest Delta our that really because restrictions impact the aside, impact. on So business if with variant you a COVID really to took was and still XX% travel, growing our rate. other of to respect XX% there think of Federal I International the do is just development at continued localize

even taken location. You’ve Belgium in we’ve seen the actions restrictive Germany most and week, seen another here, just this

then So little and a we a that’s move we of to sort continued be of down. forward get slow and bit fit start, little a

in up Afghanistan from numbers So actually that as quite opened the quickly in as has sort program caused USAID But a XXXX. collective just we to what hasn’t of saw. flattish we single expect be

if the that say would I our But you single just on Federal that guidance take Now, impacted that for when growing U.S. we provided well. is Afghanistan number outlook put in, ex it you quite actually Government. have

Thank that. context. That’s really helpful you for

now is your isn’t at wondering that the your has stock, given and my being yield below to surrounding debt? And posture the Board really question past. But You marginal flow I are just cash and what probably of you’re thoughts free for the enviable do about accretion EPS of thought in second like Okay. buyback? the that having So you’re this kind your about of was that? thinking with your how towards cost how position in playing your anymore being just phenomenon the was of buyback

it’s a essentially actually think, be to the refer cash how sheet. is do do to problem, net to balance class actually a they move debt sufficient an a and I cash but position have on to generated free a high Well, problem sometimes

capital this we’ve our continued we to sheet generated through buybacks has to returning an Steve the we’re The to buyback year, that where appropriate company between to in leverage We’ve begin and buybacks been move DSO. committed is that think We also. we stock fiscal could prior cash. our had dividends. that I our to news good more contributing balance that of outlined to the acquisitions lower is, we’ve spot to shareholders and thought through very dividends and consistent

will it You did $XXX is buyback of -- authorization. see position EPS an of our contribute the a the our or balance sheet buyback. October million support only the work that would would dilution balance the did exist successful. more company it’s the us make we additional the first to Xth, increase, Steve and sheet to we for leveraged every week said taken to as for for sure Xth, the any not the million offset of actually bit availability of $XXX do than goal But scientists company have engineers as well move want that accretion. week fiscal and October XXXX We stock. use into the But Board year to have is did make hard not we

it. for look to have it increase the level. do capacity us So more look We aggressive just buybacks that didn’t and to at a perhaps deploy at bit just

that technologies importantly, for able firms looking at increased expertise we’ll the company. really, we’ll imperative you be with the the important to we the that share So and add most for is far capacity will it best-in-class, QX available. with the by end company, that are most look how strategic quarter at of as But that our we’re been through first differentiate

to inventive looking our clients. for better, provide get have and more that never existed solutions to We’re before smarter,

we bigger, that. before. as doing of $X those to capital you’ve Steve and join opportunities us heard we for us really, make of for But become can just hope we’re all is our make I and that billion the first that we people of us So And add use of to even into just we anything looking already cash. that help and and under would extraordinary. the are, use smarter us differentiate access we’re further markets can new all not have absolute than without talked, priority

what’s and be as better Tech. we be looking joined so to who selective We’re that’s to causing have to Tetra us

a Thanks Have a Great. guys. lot. good day,

Great. Thank very you much, Andy.

This Dan will would conclude back Batrack now to this the conference session. to I over turn Q&A conclude.

today. and very really much, Tech Laura. it. Tetra and I and for joining us appreciate your And all you in interest questions thank for insights Thank you

and We’re the from and the enthusiasm on I’ll enthusiasm. think you I was really based you the at on one come the here the project that tell Tech today. at Tetra managers has Tetra here work heard employees excited working Tech comment we’re

you this we to look speaking And so fiscal end quarter XXXX. of you first at to how the with really I forward started and sharing year

for day a rest your weekend. safe Have great, of So your support. thanks Thank and you.

this Thank Have concludes gentlemen, parties and today. great All of you may Ladies our conference a disconnect for now. rest for day. all your participation. your