TETRA TECH INC (TTEK)

Tetra Tech, Inc. is a global provider of high-end consulting and engineering services focused on water, environment, sustainable infrastructure, renewable energy and international development. Under its "Leading with Science" approach, it typically begins at the earliest stage of a project by identifying technical solutions and developing execution plans for public and private clients. The company has grown on its reputation in water and environmental management for more than 50 years. In fiscal 2023 it worked on over 100,000 projects in more than 100 countries with about 27,000 associates. It supports its work with analytics, artificial intelligence, machine learning and digital technologies, including proprietary tools called the Tetra Tech Delta, some of which are sold externally as software subscriptions.

Tetra Tech manages its operations under two reportable segments. The Government Services Group (47.7% of fiscal 2023 revenue) serves U.S. federal, state and local government clients and development agencies worldwide. Its work covers water resources and management, environmental monitoring, data analytics, waste management, civil infrastructure design, disaster response and resilience, IT and AI consulting for federal agencies, aviation airspace support for the Federal Aviation Administration, and international development programs. The Commercial/International Services Group (53.6%, before a 1.3% inter-segment elimination) serves U.S. commercial clients and international clients other than development agencies. Its services include renewable energy and utility consulting, industrial water treatment, environmental remediation, high-performance buildings, aerospace and other specialized facilities, and infrastructure design in Canada, Asia Pacific, Europe, the United Kingdom, Brazil and Chile.

By client sector in fiscal 2023, revenue came from international clients (36.7%), the U.S. federal government (30.7%), U.S. commercial clients (19.2%) and U.S. state and local government (13.4%). The U.S. Agency for International Development accounted for 12.2% of revenue and the Department of Defense for 8.9%. International clients are mainly in Canada, Australia, Europe and the United Kingdom and are split fairly evenly between government and commercial. U.S. commercial clients include companies in the chemical, energy, pharmaceutical, retail, aerospace and automotive industries. Many clients are long-term, repeat customers.

Work is performed under fixed-price (36.3% of fiscal 2023 revenue), time-and-materials (48.0%) and cost-plus (15.7%) contracts. U.S. federal contracts can be terminated by the government at any time, may depend on annual funding, and are subject to audit, primarily by the Defense Contract Audit Agency, as well as conflict-of-interest policies. The company emphasizes project management discipline, local proximity to clients, and knowledge sharing through its Tetra Tech Technology Transfer system and Tetra Tech Academy. Engineering News-Record ranked it #1 in Water for 20 consecutive years.