Tetra Tech : Q4 2023 Earnings Conference Slides

Q4-23 EARNINGS CALL

November 16, 2023

Dan Batrack, Chairman & CEO

Steve Burdick, Executive VP & CFO

Jill Hudkins, President

WATER	ENVIRONMENT	SUSTAINABLE INFRASTRUCTURE

Forward Looking Statements &

Non-GAAP Financial Measures

All statements in this communication other than statements of historical fact are "forward-looking statements" for purposes of federal and state securities laws, including any statements of the plans, strategies and objectives for future operations, profitability, strategic value creation, risk profile and investment strategies, and any statements regarding future economic conditions or performance, and the expected financial and operational results of Tetra Tech. These statements involve risks and uncertainties, such as those related to fluctuations in Tetra Tech's quarterly operating results and stock price, and the other risks detailed from time to time in Tetra Tech's SEC reports. Any forward-looking statements are made as of the date hereof. We do not intend, and undertake no obligation, to update any forward-looking statement.

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 is available in the Appendix at the end of this communication.

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Tetra Tech 2023 Highlights

#1 In Water	#1 In Environment
20 consecutive years by	15 consecutive years by
ENGINEERING NEWS	ENGINEERING NEWS
RECORD	RECORD
$1BIncrease	+19	U.K. Major
		Water Utilities

in backlog	major water
utility clients

#1In Human Capital

for human resources, productivity, H&S

545M Lives Improved

One Billion People Challenge by 2030

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Record Results in Q4-23 and 2023

Revenue

Net Revenue

Operating Income

Adjusted EPS

Backlog

Q4-23

RECORD HIGH

$1.26B

$1.06B

$135M

$1.78

$4.79B

FY-23

$4.52B

$3.75B

$420M

$5.58

$4.79B

RECORD HIGH

Note: Operating income and EPS presented on adjusted basis. Refer to appendix for reconciliation summary.

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Q4-23 Tetra Tech Consolidated Results

Revenue

EBITDA

$1.26B	$153M
$903M	$101M
+40%
+51%

Q4-22

Q4-23

Q4-22

Q4-23

Note: Refer to appendix for reconciliation summary.

All-time High Revenue, Profitability, and Backlog

Backlog

$4.79B

$3.74B

+28%

Q4-22Q4-23

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Net Revenue by Customer (Q4-23)

Customer	% of	Y/Y		Comments
Net Rev.
U.S. Federal	29%	+46%	•	Federal IT up
•	19% growth excluding Ukraine
U.S. State & Local	12%	+15%	•	Digital Water up
•	Resilience Planning up
U.S. Commercial	19%	+13%	•	Clean Energy up
•	Environmental Services up
International	40%	+78%	•	Infrastructure up
•	14% growth excluding RPS

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Performance by Segment (Q4-23)

Segment	Net Revenue ($M)		OI Margin (%)		Comments
			$457				15.7%
	$336		15.1%			•	Federal IT up
GSG
	+36%			+60		•	Environmental Services up
					•	Digital Water up
				bps
		Q4-22	Q4-23		Q4-22	Q4-23
			$601				14.7%
CIG	$400		13.6%			•	Clean Energy up
			+110	•	International Infrastructure up
		+50%		• CIG margin was 13.3% w/ RPS
				bps

Q4-22Q4-23

Q4-22Q4-23

Note: CIG margin excludes RPS

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EBITDA Margin Trend on U.S. and International Reporting Basis

20.0%

Q4-23 Margin

21.0%

17.5%

15.1%	Margin	15.0%
		12.5%

10.0%

17.9%

11.7%

18.7%

IFRS

12.7%

U.S. - As reported

19.5%

13.5%

As reported

IFRS

FY21

FY22

FY23

Continuous Margin Expansion

Refer to Appendix: Reconciliation summary for calculation of IFRS-Based EBITDA as a % of Net Service Revenue

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Backlog (Q4-23)

				Record High
				$4,790M
	4,800			+28% Y/Y
	4,500		Q4 Orders +45% Y/Y
	4,200
	3,900
M	3,600
$ in
	3,300	$3,480M

3,000

2,700							Funded and
							Authorized Work
2,400
2,100
Q4-21	Q1-22	Q2-22	Q3-22	Q4-22	Q1-23	Q2-23	Q3-23	Q4-23

Significant Awards

U.S. Army Corps of Engineers PFAS Environmental Contract

Commercial Task Orders

U.S. EPA Environmental

Restoration Contract

U.S. Army Corps of Eng. IIJA A-E Services Contract

U.S. DoD Task Orders

U.S. EPA Task Orders

U.S. Army Corps of Engineers Resilience Contract

International Development Task Orders

USAID Land and Resource Governance Contract

U.S. Dept. of Energy Task Orders

Australia Offshore Wind

Services Contract

Contract

Ceiling

$800M

-

$450M

$200M

-

-

$45M

-

$34M

-

A$22M

Funded

Value

-

$514M

-

$33M

$109M

$58M

-

$595M

$5M

$31M

A$22M

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Financial Overview FY-23 (GAAP)

Revenue ($ in billions)

$3.50	$4.52
	+29% Y/Y
FY-22	FY-23

Operating Income ($ in millions)

	$358
$340	Adj. EBITDA
FY23: $481M
	FY22: $361M
	+33% Y/Y
FY-22	FY-23

Net Revenue ($ in billions)

	$3.75
$2.84	+32% Y/Y
FY-22	FY-23

Diluted EPS

$4.86	$5.10
Adj. EPS w/ IA
	FY23: $5.21
	FY22: $4.50
	+16% Y/Y
FY-22	FY-23

All-time High Revenue and Profitability

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