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TETRA TECH INC

TETRA TECH INCTTEK财报

Nasdaq · professional service

Tetra Tech, Inc. is an American consulting and engineering services firm based in Pasadena, California. The company provides consulting, engineering, program management, and construction management services in the areas of water, environment, infrastructure, resource management, energy, and international development.

What changed in TETRA TECH INC's 10-K — 2024 vs 2025

Top changes in TETRA TECH INC's 2025 10-K

255 paragraphs added · 297 removed · 202 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

73 edited+8 added−20 removed97 unchanged
We use a disciplined 3 approach to monitoring, managing and improving our return on investment in each of our business areas through our efforts to negotiate appropriate contract terms, manage our contract performance to minimize schedule delays and cost overruns and promptly bill and collect accounts receivable.
We use a disciplined approach 3 to monitoring, managing and improving our return on investment in each of our business areas through our efforts to negotiate appropriate contract terms, manage our contract performance to minimize schedule delays and cost overruns, and promptly bill and collect accounts receivable.
Shoemaker joined us in 1991, and has served in various management capacities, including Tetra Tech President, Chief Strategist, business group president, and water resources project manager. Her technical expertise is in the development models and data analytics that leverage emerging technologies to optimize the management of large-scale complex watersheds.
Shoemaker joined us in 1991, and has served in various management capacities, including Tetra Tech President, Chief Strategist, business group president, and water resources project manager. Her technical expertise is in development models and data analytics that leverage emerging technologies to optimize the management of large-scale complex watersheds.
These rules and regulations: 11 • require certification and disclosure of all cost and pricing data in connection with the contract negotiations under certain contract types; • impose accounting rules that define allowable and unallowable costs and otherwise govern our right to reimbursement under certain cost-based government contracts; and • restrict the use and dissemination of information classified for national security purposes and the exportation of certain products and technical data.
These rules and regulations: • require certification and disclosure of all cost and pricing data in connection with the contract negotiations under certain contract types; • impose accounting rules that define allowable and unallowable costs and otherwise govern our right to reimbursement under certain cost-based government contracts; and • restrict the use and dissemination of information classified for national security purposes and the exportation of certain products and technical data.
Under time-and-materials contracts, we are paid for labor at negotiated hourly billing rates and paid for other expenses. Profitability on these contracts is driven by billable headcount and cost control. Many of our time-and-materials contracts are subject to maximum contract values and, accordingly, revenue related to these contracts is recognized as if these contracts were fixed-price contracts.
Under time-and-materials contracts, we are paid for labor at negotiated hourly billing rates and paid for other expenses. Profitability on these contracts is driven by billable headcount and cost control. Many of our time-and-materials contracts are subject to maximum contract values and, 7 accordingly, revenue related to these contracts is recognized as if these contracts were fixed-price contracts.
We have established company-wide growth initiatives that reinforce internal coordination, track the development of new programs, identify and coordinate collective resources for major bids and bring together high-end interdisciplinary teams that provide innovative solutions for major pursuits. Our growth initiatives provide a forum for cross-sector collaboration, access to technical solutions and the development of interdisciplinary solutions.
We have established company-wide growth initiatives that reinforce internal coordination, track the development of new programs, identify and coordinate collective resources for major bids and bring together high-end interdisciplinary teams 8 that provide innovative solutions for major pursuits. Our growth initiatives provide a forum for cross-sector collaboration, access to technical solutions and the development of interdisciplinary solutions.
We believe that our principal competitors include the following firms, in alphabetical order: AECOM; Arcadis NV; AtkinsRéalis; Black & Veatch Corporation; Booz Allen Hamilton; Brown & Caldwell; CDM Smith Inc.; Chemonics International, Inc.; Exponent, Inc.; GHD; ICF International, Inc.; Jacobs Solutions, Inc.; Leidos, Inc.; SAIC; Stantec Inc.; TRC Companies, Inc.; Weston Solutions, Inc.; and WSP Global Inc.
We believe that our principal competitors include the following firms, in alphabetical order: AECOM; Arcadis NV; AtkinsRéalis; Black & Veatch Corporation; Booz Allen Hamilton; Brown & Caldwell; CDM Smith Inc.; Exponent, Inc.; GHD; ICF International, Inc.; Jacobs Solutions, Inc.; Leidos, Inc.; SAIC; Stantec Inc.; TRC Companies, Inc.; Weston Solutions, Inc.; and WSP Global Inc.
CIG supports commercial clients worldwide in renewable energy, industrial, high-performance buildings and aerospace markets. CIG also provides sustainable infrastructure and related environmental, engineering, and project management services to commercial and local government clients across Canada, in Asia Pacific (primarily Australia and New Zealand), Europe, the United Kingdom, and South America (primarily Brazil).
CIG supports commercial clients worldwide in energy, industrial, high-performance buildings and aerospace markets. CIG also provides sustainable infrastructure and related environmental, engineering and project management services to commercial and local government clients across Canada, in Asia Pacific (primarily Australia and New Zealand), Europe, the United Kingdom, and South America (primarily Brazil).
Climate risk is a consideration in business continuity planning and security in regions that may experience climate-related disruptions due to extreme weather, fires, or flooding. Climate related impacts may also create increased demand for our services for response and longer-term recovery needs.
Climate risk is a consideration in business continuity planning and security in regions that may 11 experience climate-related disruptions due to extreme weather, fires or flooding. Climate-related impacts may also create increased demand for our services for response and longer-term recovery needs.
In addition, we maintain preventative audit programs and mitigation measures to ensure that appropriate control systems are in place. 8 We provide services under contracts, purchase orders or retainer letters. Our policy requires that all contracts must be in writing.
In addition, we maintain preventative audit programs and mitigation measures to ensure that appropriate control systems are in place. We provide services under contracts, purchase orders or retainer letters. Our policy requires that all contracts must be in writing.
To support our employees in reaching their full potential, Tetra Tech offers a wide range of internal and external learning and development opportunities. Education assistance is offered to financially support associates who seek to expand their knowledge and skill base.
To support our employees in reaching their full potential, Tetra Tech offers a wide range of internal and external learning and development opportunities. Education assistance is offered to financially support associates who seek to expand their knowledge and skill base. Professional Development.
These reportable segments allow us to capitalize on our growing market opportunities and enhance the development of high-end consulting and technical solutions to meet our growing client deman d. 4 The following table presents the percentage of our revenue by reportable segment: Fiscal Year Reportable Segment 2024 2023 2022 GSG 47.8% 47.7% 52.0% CIG 53.6 53.6 49.6 Inter-segment elimination (1.4) (1.3) (1.6) 100.0% 100.0% 100.0% For additional information regarding our reportable segments, see Note 19, "Reportable Segments" of the "Notes to Consolidated Financial Statements" included in Item 8.
These reportable segments allow us to capitalize on our growing market opportunities and enhance the development of high-end consulting and technical solutions to meet our growing client deman d. 4 The following table presents the percentage of our revenue by reportable segment: Fiscal Year Reportable Segment 2025 2024 2023 GSG 49.1% 47.8% 47.7% CIG 52.3 53.6 53.6 Inter-segment elimination (1.4) (1.4) (1.3) 100.0% 100.0% 100.0% For additional information regarding our reportable segments, see Note 19, "Reportable Segments" of the "Notes to Consolidated Financial Statements" included in Item 8.
We provide high-end design of sustainable energy, water and GHG decarbonization solutions including civil, electrical, mechanical, structural and hydraulic engineering for buildings, campuses and surrounding developments. We provide high-end services in addressing indoor health and associated assessment, consulting and retrofits of buildings to address indoor air quality and safety.
We provide high-end design of resilient energy, water and GHG decarbonization solutions including civil, electrical, mechanical, structural and hydraulic engineering for buildings, campuses and surrounding developments. We provide high-end services in addressing indoor health and associated assessment, consulting and retrofits of buildings to address indoor air quality and safety.
For developers and owners of renewable energy resources such as solar grid and off-grid, on-shore and off-shore wind, biogas and biomass, tidal, hydropower, conventional power generation facilities, micro-grid and battery or alternative storage facilities, as well as transmission and distribution assets, our services include environmental, electrical, mechanical and civil engineering, procurement, operations and maintenance and regulatory support for all project phases.
For developers and owners of renewable energy resources such as solar grid and off-grid, on-shore and off-shore wind, biogas and biomass, tidal, hydropower, conventional power generation facilities, micro-grid and battery or alternative storage facilities, as well as 6 transmission and distribution assets, our services include environmental, electrical, mechanical and civil engineering, procurement, and regulatory support for all project phases.
Project Examples Project examples are provided on our company website located at tetratech.com, including expert interviews, in-depth articles and project profiles that demonstrate our services acros s water, environment, sustainable infrastructure, renewable energy and international development. Clients We provide services to a diverse base of U.S. federal government, U.S. state and local government, U.S. commercial and international clients.
Project Examples Project examples are provided on our company website located at tetratech.com, including expert interviews, in-depth articles and project profiles that demonstrate our services acros s water, environment and sustainable infrastructure. Clients We provide services to a diverse base of U.S. federal government, U.S. state and local government, U.S. commercial and international clients.
We are often at the leading edge of new challenges where we are delivering one-of-a-kind solutions. These might be a new water treatment technology, a unique solution to addressing coastal erosion, an AI-enabled system for remote assessment of infrastructure assets or a digital twin for real time management of water treatment systems.
We are often at the leading edge of new challenges where we are delivering one-of-a-kind solutions. These might be a new water treatment technology, a unique solution to addressing coastal erosion, an AI-enabled system for remote assessment of infrastructure assets or real-time optimization of water management systems.
Our Tetra Tech Delta program facilitates access and exchange of technology solutions and AI-enabled software solutions across our company, through the use of internal training, inventories and facilitated virtual networking events. Business development activities are implemented by our technical and professional management staff throughout Tetra Tech with the support of company-wide resources and expertise.
Our Tetra Tech Delta program facilitates access and exchange of technology solutions and AI-enabled software solutions across our company, through the use of internal training, communities of practice, and facilitated virtual networking events. Business development activities are implemented by our technical and professional management staff throughout Tetra Tech with the support of company-wide resources and expertise.
Our professional staff includes, but is not limited to, analysts, archaeologists, architects, biologists, chemical engineers, chemists, civil engineers, data scientists, computer scientists, digital engineers, economists, electrical engineers, environmental engineers, environmental scientists, geologists, hydrogeologists, mechanical engineers, software engineers, statisticians, oceanographers, project managers and toxicologists. We consider the current relationships with our employees to be favorable.
Our professional staff includes, but is not limited to, analysts, archaeol ogists, architects, biologists, chemical engineers, chemists, civil engineers, data scientists, computer scientists, digital engineers, economists, electrical engineers, environmental engineers, environmental scientists, geologists, hydrogeologists, mechanical engineers, software engineers, statisticians, oceanographers, project managers and toxicologists. We consider the current relationships with our employees to be favorable.
By Leading with Science® and leveraging our collective technology including advanced data analytics, digital technologies and AI, we create transformational solutions and provide subscription software solutions to our clients. Tetra Tech's proprietary technologies and solutions, referred to collectively as the Tetra Tech Delta, differentiate us in the market and provide us with a competitive advantage.
By Leading with Science® and leveraging our collective technology including advanced data analytics, digital technologies and AI, we create transformational solutions for our clients. Tetra Tech's proprietary technologies and solutions, referred to collectively as the Tetra Tech Delta, differentiate us in the market and provide us with a competitive advantage.
In the second quarter of fiscal 2023, we completed the acquisition of RPS Group plc ("RPS"), a publicly traded company on the London Stock Exchange in an all-cash transaction totaling $784 million.
In fiscal 2023, we completed the acquisition of RPS Group plc ("RPS"), a publicly traded company on the London Stock Exchange in an all-cash transaction totaling $784 million.
We have business continuity planning and processes in place to address any acute impact to locally affected operations and have the ability to rapidly move to remote and flexible working arrangements while restoring or relocating affected operations. We maintain a strong information technology infrastructure to facilitate remote working and provide virtual access to systems.
We have business continuity planning and processes in place to address any acute impact to locally affected operations can rapidly move to remote and flexible working arrangements while restoring or relocating affected operations. We maintain a strong information technology infrastructure to facilitate remote working and provide virtual access to systems.
No single client, except for the U.S. federal government clients, accounted for more than 10% of our revenue in fiscal 2024. 7 Contracts Our services are performed under three principal types of contracts with our clients: fixed-price, time-and-materials and cost-plus.
No single client, except for the U.S. federal government clients, accounted for more than 10% of our revenue in fiscal 2025. Contracts Our services are performed under three principal types of contracts with our clients: fixed-price, time-and-materials and cost-plus.
Backlog We include in our backlog only those contracts for which funding has been provided and work authorization has been received. We estimate that approximately 70% of our backlog at the end of fiscal 2024 will be recognized as revenue in fiscal 2025, as work is being performed.
Backlog We include in our backlog only those contracts for which funding has been provided and work authorization has been received. We estimate that approximately 70% of our backlog at the end of fiscal 2025 will be recognized as revenue in fiscal 10 2026, as work is being performed.
We provide post-disaster response services and may have additional demand for our expertise if there is an increase in the frequency of climate related events. We are able to mobilize rapidly to deploy additional staff and resources to affected areas.
We provide post-disaster response services and may have additional demand for our expertise if there is an increase in the frequency of climate-related events. We can mobilize rapidly to deploy additional staff and resources to affected areas.
We actively engage with our stakeholders, internally and externally, to encourage input on the materiality of various ESG issues to Tetra Tech and have incorporated input into our double materiality analysis and sustainability program. Our 9 annual sustainability reporting and key metrics are aligned with the priorities we have set on ethics, human capital, professional development, and health & safety.
We actively engage with our stakeholders, internally and externally, to encourage input on the materiality of various sustainability issues to Tetra Tech and have incorporated input into our double materiality analysis and sustainability program. Our annual sustainability reporting and key metrics are aligned with the priorities we have set on ethics, professional development, and health & safety.
Hopson joined us as Senior Vice President, General Counsel and Secretary to the Board of Directors in January 2018, was appointed Executive Vice President, Chief Legal and Human Capital officer in November 2024. He also serves as the Chief Ethics and Compliance Officer. Previously, Mr. Hopson served as Vice President, Assistant General Counsel and Assistant Corporate Secretary at AECOM.
Hopson was appointed Executive Vice President, Chief Legal and Human Capital Officer in November 2024, having served as Senior Vice President, General Counsel and Secretary to the Board of Directors since January 2018. He also serves as the Chief Ethics and Compliance Officer. Previously, Mr. Hopson served as Vice President, Assistant General Counsel and Assistant Corporate Secretary at AECOM.
However, we cannot guarantee that the revenue projected in our backlog will be realized or, if realized, will result in profits. In addition, project cancellations or scope adjustments may occur with respect to contracts reflected in our backlog.
However, we cannot guarantee that the revenue projected in our backlog will be realized or, if realized, will result in profits. In addition, proj ect cancellations or scope adjustments may occur with respect to contracts reflected in our backlog.
In the second quarter of fiscal 2024, we acquired LS Technologies ("LST"), an innovative U.S. federal enterprise technology services and management consulting firm based in Fairfax, Virginia. LST provides high-end consulting and engineering services including advanced data analytics, cybersecurity and digital transformation solutions to U.S. government clients.
In fiscal 2024, we acquired LS Technologies ("LST"), an innovative U.S. federal enterprise technology services and management consulting firm based in Fairfax, Virginia. LST provides high-end consulting and engineering services including advanced data analytics, cybersecurity and digital transformation solutions to U.S. government clients.
In the third quarter of fiscal 2024, we also acquired Convergence Controls & Engineering ("CCE"), an industry leader in process automation and systems integration solutions. CCE’s expertise includes customized digital controls and software solutions, advanced data analytics, cloud data integration and cybersecurity applications. Both LST and CCE are included in our GSG segment.
In fiscal 2024, we also acquired Convergence Controls & Engineering ("CCE"), an industry leader in process automation and systems integration solutions. CCE’s expertise includes customized digital controls and software solutions, advanced data analytics, cloud data integration and cybersecurity applications. Both LST and CCE are included in our GSG segment.
Our international clients are primarily focused in Canada, Australia, Europe and the United Kingdom, and consist of a relatively equal sized mix of government and commercial clients. Our U.S. commercial clients include companies in the chemical, energy, pharmaceutical, retail, aerospace and automotive industrie s.
Our international clients are primarily focused in Australia, Canada, Europe and the United Kingdom, and consist of a relatively equal sized mix of government and commercial clients. Our U.S. commercial clients include companies in the chemical, energy, technology, retail, aerospace and automotive industries.
The following table presents the percentage of our revenue by client sector: Fiscal Year Client Sector 2024 2023 2022 U.S. federal government (1) 32.2% 30.7% 30.4% U.S. state and local government 11.8 13.4 17.2 U.S. commercial 17.5 19.2 21.4 International (2) 38.5 36.7 31.0 100.0% 100.0% 100.0% (1) Includes revenue generated under U.S. federal government contracts performed outside the United States.
The following table presents the percentage of our revenue by client sector: Fiscal Year Client Sector 2025 2024 2023 U.S. federal government (1) 31.6% 32.2% 30.7% U.S. state and local government 14.5 11.8 13.4 U.S. commercial 16.5 17.5 19.2 International (2) 37.4 38.5 36.7 100.0% 100.0% 100.0% (1) Includes revenue generated under U.S. federal government contracts performed outside the United States.
(2) Includes revenue generated from non-U.S. clients, primarily in th e United Kingdom, Australia and Canada. U.S. fe deral government agencies are significant clients. The U.S. Agency for International Development accounted for 13.0%, 12.2% and 11.0% of our revenue in fiscal 2024, 2023 and 2022, respectively.
(2) Includes revenue generated from non-U.S. clients, primarily in Australia, Canada and th e United Kingdom. U.S. fe deral government agencies are significant clients. The United States Agency for International Development ("USAID") accounted for 10.6%, 13.0% and 12.2% of our revenue in fiscal 2025, 2024 and 2023, respectively.
The Department of Defense ("DoD") accounted for 8.5%, 8.9% and 9.7% of our revenue in fiscal 2024, 2023 and 2022, respectively. We typically support multiple programs within a single U.S. fede ral government agency, both domestically and internationally. We also assist U.S. state and local government clients in various jurisdictions across the United States.
The Department of Defense ("DoD") accounted for 11.6%, 8.5% and 8.9% of our revenue in fiscal 2025, 2024 and 2023, respectively. We typically support multiple programs within a single U.S. federal government agency, both domestically and internationally. We also assist U.S. state and local government clients in various jurisdictions across the United States.
The following table presents the percentage of our revenue by contract type: Fiscal Year Contract Type 2024 2023 2022 Fixed-price 38.8% 36.3% 37.6% Time-and-materials 45.0 48.0 46.7 Cost-plus 16.2 15.7 15.7 100.0% 100.0% 100.0% Under a fixed-price contract, clients agree to pay a specified price for our performance of the entire contract or a specified portion of the contract.
The following table presents the percentage of our revenue by contract type: Fiscal Year Contract Type 2025 2024 2023 Fixed-price 43.5% 38.8% 36.3% Time-and-materials 42.6 45.0 48.0 Cost-plus 13.9 16.2 15.7 100.0% 100.0% 100.0% Under a fixed-price contract, clients agree to pay a specified price for our performance of the entire contract or a specified portion of the contract.
Our services advance resiliency through the "greening" of infrastructure, design of energy efficiency and resource conservation programs, innovation in the capture and sequestration of carbon, development of disaster preparedness and response plans and improvement in water and land resource management practices. We provide energy management consulting, and greenhouse gas ("GHG") inventory assessment, certification, reduction and management services.
Our services advance the resiliency of infrastructure, including design of energy efficiency and resource conservation programs, development of disaster preparedness and response plans and improvement in water and land resource management practices. We provide energy management consulting, and greenhouse gas ("GHG") inventory assessment, certification, reduction and management services.
Engineering News-Record ("ENR"), the engineering industry's leading magazine, has ranked Tetra Tech #1 in Water Treatment and Desalination for 11 years in a row. In 2024, we were also ranked #1 in consulting studies; environmental management; wind power; hydro plants; offshore and underwater facilities; site assessment and compliance; and green government offices.
Engineering News-Record ("ENR"), the engineering industry's leading magazine, has ranked Tetra Tech #1 in Water Treatment and Desalination for 12 years in a row. In 2025, we were also ranked #1 in consulting studies, environmental management, environmental science, wind power, hydro plants, site assessment and compliance, and green government offices.
However, 12 partially or completely uninsured claims, if successful and of significant magnitude, could have a material adverse effect on our business. Human Capital Management Employees. At fiscal 2024 year-end, we had approximately 30,000 staff worldwide. A large percentage of our employees have technical and professional backgrounds and undergraduate and/or advanced degrees, including the e mployees of recently acquired companies.
However, partially or completely uninsured claims, if successful and of significant magnitude, could have a material adverse effect on our business. Human Capital Management Employees. At fiscal 2025 year-end, we had more than 25,000 staff worldwide. A large percentage of our employees have technical and professional backgrounds and undergraduate and/or advanced degrees, including the employees of recently acquired companies.
CIG's international services, especially in Canada, Europe, the United Kingdom, and Asia Pacific, include high-end analytical, engineering, architecture, geotechnical, project management and advisory services for infrastructure projects, including early project planning, rail and roadway monitoring and asset management services, collection of condition data, optimization of upgrades and long-term planning for expansion; multi-modal design services for commuter railway stations, 6 airport expansions, bridges and major highways and ports and harbors; and designing resilient solutions to repair, replace and upgrade older transportation infrastructure.
CIG's international services, especially in Canada, Europe, the United Kingdom, and Asia Pacific, include high-end analytical, engineering, architecture, geotechnical, project management and advisory services for infrastructure projects, including early project planning, rail and roadway monitoring and asset management services, collection of condition data, optimization of upgrades and long-term planning for expansion; planning and design services for airport facilities, bridges and ports and harbors; and designing resilient solutions to modernize infrastructure.
We develop and implement sustainable solutions that are innovative, efficient and practical. • Excellence. We bring superior technical capability, disciplined project management and excellence in safety and quality to all of our services. • Opportunity. Our people are our number one asset.
We develop and implement sustainable solutions that are innovative, efficient and practical. • Excellence. We bring superior technical capability, disciplined project management and excellence in safety and quality to all of our services. • Opportunity. Our people are our number one asset. Opportunity means new technical challenges that provide advancement within our company and ensure a safe workplace.
Our Government Services Group ("GSG") reportable segment primarily includes activities with U.S. government clients (federal, state and local) and all activities with development agencies worldwide. Our Commercial/International Services Group ("CIG") reportable segment primarily includes activities with U.S. commercial clients and international clients other than development agencies.
Our Commercial/International Services Group ("CIG") reportable segment primarily includes activities with U.S. commercial clients and international clients other than development agencies.
We continuously evaluate the marketplace for acquisition opportunities to further our strategic growth plans. Due to our reputation, size, financial resources, geographic presence and range of services, we have numerous opportunities to acquire privately and publicly held companies or selected portions of such companies.
Due to our reputation, size, financial resources, geographic presence and range of services, we have numerous opportunities to acquire privately and publicly held companies or selected portions of such companies.
Accordingly, from time to time, we may divest or wind-down certain non-core businesses and reallocate our resources to businesses that better align with our long-term strategic direction. In 10 the fourth quarter of fiscal 2024, we agreed to divest a financially immaterial subsidiary in South America and a line of business in Australia.
Accordingly, from time to time, we may divest or wind-down certain non-core businesses and reallocate our resources to businesses that better align with our long-term strategic direction. In fiscal 2025, we divested a subsidiary in South America and a line of business in Australia, both of which were immaterial. We did not divest any businesses in fiscal 2023 and 2024.
Argus is a chemical engineer with 39 years of experience, including over 30 years with us in operational leadership, program and project management and quality assurance for projects encompassing a broad spectrum of environmental, engineering, information technology and disaster management services. Mr.
He is a chemical engineer with 40 years of experience, including over 30 years with us in operational leadership, program and project management and quality assurance for projects encompassing a broad spectrum of environmental, engineering, information technology and disaster management services. Mr. Argus holds a B.S. in Chemical Engineering from California State University, Long Beach. Steven M.
He served as our Senior Vice President, Corporate Controller and Chief Accounting Officer from January 2004 to March 2011. Mr. Burdick joined us in April 2003 as Vice President, Management Audit. Previously, Mr. Burdick served in senior financial and executive positions with Aura Systems, Inc., TRW Ventures, and Ernst & Young LLP. Mr.
Burdick 61 Executive Vice President, Chief Financial Officer Mr. Burdick has served as our Executive Vice President, Chief Financial Officer since April 2011. He served as our Senior Vice President, Corporate Controller and Chief Accounting Officer from January 2004 to March 2011. Mr. Burdick joined us in April 2003 as Vice President, Management Audit. Previously, Mr.
We have reported annually on GHG emissions for more than a decade, significantly reducing our emissions from program inception. In 2021, we expanded our reporting and set new goals for scope 1, 2, and 3 emissions.
We have supplier programs that integrate and emphasize sustainability in the procurement of goods and services and subcontracting for our projects. We have reported annually on GHG emissions for more than a decade, significantly reducing our emissions from program inception. In 2021, we expanded our reporting and set new goals for scope 1, 2, and 3 emissions.
GSG provides a wide range of consulting and engineering services for solid waste management, including landfill design and management, and recycling facility design throughout the United States; providing design, project management and maintenance services to manage solid and hazardous waste; as well as innovative renewable energy projects such as solar 5 energy-generating landfill caps; and providing full-service solutions for gas-to-energy facilities to efficiently use landfill methane gas.
GSG provides a wide range of consulting and engineering services for solid waste management, including landfill design and management, and recycling facility design throughout the United States; providing design, project management and maintenance services to manage solid and hazardous waste; as well as innovative renewable energy projects such as solar energy-generating landfill caps; and providing full-service solutions for gas-to-energy facilities to efficiently use landfill methane gas. 5 We provide high-end advanced analytics and information technology ("IT") consulting and support to various federal clients including AI applications, machine learning, modernization of IT systems and cloud migration.
Batrack 66 Chairman, Chief Executive Officer and President Mr. Batrack joined our predecessor in 1980 and was named Chairman in January 2008. He has served as our Chief Executive Officer and a director since November 2005, and as our President from October 2008 to September 2019. Mr.
He has served as our Chief Executive Officer and a director since November 2005, and as our President from October 2008 to September 2019. Mr.
RPS employs approximately 5,000 associates in the United Kingdom, Europe, Asia Pacific and North America, delivering high-end solutions, especially in energy transformation, water and program management for government and commercial clients. Substantially all of RPS is included in our CIG segment. In the second quarter of fiscal 2023, we also acquired Amyx, Inc.
RPS operates in the United Kingdom, Europe, Asia Pacific and North America, delivering high-end solutions, especially in energy transformation, water and program management for government and commercial clients. Substantially all of RPS is included in our CIG segment. In fiscal 2023, we also acquired Amyx, Inc. (“Amyx”), an enterprise technology services, cybersecurity and management consulting firm based in Reston, Virginia.
Opportunity means new technical challenges that provide advancement within our company, encourage an inclusive and diverse workforce and ensure a safe workplace. We have a strong project management culture that enables us to deliver on more than 100,000 projects per fiscal year. Our client-focused project management is supported by strong fiscal management and financial tools.
We have a strong project management culture that enables us to deliver on more than 100,000 projects per year. Our client-focused project management is supported by strong fiscal management and financial tools.
Our competition varies and is a function of the business areas in which, and the client sectors for which, we perform our services.
We perform a broad spectrum of consulting, engineering and technical services across the water, environment and sustainable infrastructure markets. Our competition varies and is a function of the business areas in which, and the client sectors for which, we perform our services.
We evaluate an acquisition opportunity based on its ability to strengthen our leadership in the markets we serve, the technologies and solutions they provide and the additional new geographies and clients they bring. Also, during our evaluation, we examine an acquisition's ability to drive organic growth, its accretive effect on long-term earnings and its ability to generate return on investment.
We evaluate an acquisition opportunity based on its ability to strengthen our leadership in the markets we serve, the technologies and solutions they provide and the additional new geographies and clients they bring.
We are diverse, equitable and inclusive, embracing the breadth of experience across our talented workforce worldwide with a culture of innovation and entrepreneurship. We are disciplined in our business, and focused on delivering value to customers and high performance for our shareholders.
Our ability to provide innovative and first-of-kind solutions is enhanced by partnerships with our forward-thinking clients. We embrace the breadth of experience across our talented workforce worldwide with a culture of innovation and entrepreneurship. We are disciplined in our business, and focused on delivering value to customers and high performance for our shareholders.
GSG also leads our support for development agencies worldwide, especially in the United States, the United Kingdom and Australia. GSG provides consulting and engineering services for a broad range of water, environment and sustainable infrastructure-related needs primarily for U.S. government clients.
GSG provides consulting and engineering services for a broad range of water, environment and sustainable infrastructure-related needs primarily for U.S. government clients.
Prior to this, he was a corporate and securities lawyer at O’Melveny & Myers LLP and also worked at the U.S. Court of Appeals. Mr. Hopson holds B.A. and J.D. degrees from Yale University. 15 Available Information Our internet website address is www.tetratech.com.
Prior to this, he was a corporate and securities lawyer at O’Melveny & Myers LLP and also worked at the U.S. Court of Appeals. Mr. Hopson holds B.A. and J.D. degrees from Yale University. Leslie Shoemaker 68 Executive Vice President, Chief Innovation and Sustainability Officer Dr.
Our high-end teams connect interdisciplinary experts from across our company's 30,000 staff worldwide. Tetra Tech mobilizes teams that include analysts, statisticians, digital engineers and industry experts who effectively implement value-generating and pragmatic solutions for our clients. These advanced analytical solutions enable us to provide clients with real-time reporting, automated and remote data collection and dashboards for tracking and communicating results.
Our high-end teams connect interdisciplinary experts from across our company's more than 25,000 staff worldwide. Tetra Tech mobilizes teams that include analysts, statisticians, digital engineers and industry experts who effectively implement value-generating and pragmatic solutions for our clients.
He has managed complex programs for many small and Fortune 500 clients, both in the United States and internationally. Mr. Batrack holds a B.A. degree in Business Administration from the University of Washington. Steven M. Burdick 60 Executive Vice President, Chief Financial Officer Mr. Burdick has served as our Executive Vice President, Chief Financial Officer since April 2011.
He has managed complex programs for many small and Fortune 500 clients, both in the United States and internationally. Mr. Batrack holds a B.A. degree in Business Administration from the University of Washington. Roger R. Argus 64 President Mr. Argus was appointed President in October 2025.
We provide technical support for the Federal Aviation Administration to optimize the U.S. airspace system and support related aviation systems integration for the U.S. and other countries' metropolitan airports. We provide specialized software products, modeling and data analytics for airspace acoustic analysis.
We design solutions to manage and analyze data for major federal agency programs including data related to health, security, environment and water programs. We provide technical support for the Federal Aviation Administration to optimize the U.S. airspace system and support for related aviation systems integration for the U.S. and other countries' metropolitan airports.
As a signatory of the United Nations ("UN") Global Compact on human rights, labor, environment and anti-corruption, we embrace the UN Global Compact's Ten Principles as part of the strategy, culture and daily operations of our company.
Through our Sustainability Program, we continue to enhance the sustainability of our daily practices, reduce our GHG emissions, and provide an exceptional working environment for our employees across our global operations. As a signatory of the United Nations ("UN") Global Compact on human rights, labor, environment and anti-corruption, we embrace the UN Global Compact's Ten Principles.
ENR also ranked Tetra Tech in the Top 10 in numerous categories, including dams and reservoirs, marine and port facilities, power, solar power, solid waste, environmental science, chemical and soil remediation, and hazardous waste.
ENR also ranked Tetra Tech in the Top 10 in numerous categories, including dams and reservoirs, marine and port facilities, power, solar power, solid waste, chemical and soil remediation, and hazardous waste. Our reputation for high-end consulting and engineering services and our ability to develop solutions for water and environmental management has supported our growth for more than 50 years.
Generally, we proceed with an acquisition if we believe that it will strategically expand our service offerings, improve our long-term financial performance and increase shareholder returns. We view acquisitions as a key component in the execution of our growth strategy, and we intend to use cash, debt or equity, as we deem appropriate, to fund acquisitions.
We view acquisitions as a key component in the execution of our growth strategy, and we intend to use cash, debt or equity, as we deem appropriate, to fund acquisitions.
To support our employees, we provide a variety of resources and trainings and offer multiple avenues to raise questions or concerns - to help ensure long-term success for our employees, company, clients, and shareholders. Diversity, Equity, Inclusion and Accessibility. Tetra Tech brings together engineers and technical specialists from all backgrounds to solve our clients' most challenging problems.
To support our employees, we provide a variety of resources and training and offer multiple avenues to raise questions or concerns - to help ensure long-term success for our employees, company, clients, and shareholders. 12 Equal Employment Opportunity.
Tetra Tech also supports our employees in discipline specific training, certifications, and accreditation programs across the Company.
Tetra Tech also supports our employees in discipline specific training, certifications, and accreditation programs across the Company. Programs such as specific health and safety programs, hazardous waste investigation, environmental certifications, and professional certifications are encouraged as per client, project and professional development needs.
We use company-wide virtual events to engage Tetra Tech experts world-wide to solve client challenges and identify the best ideas for further development. We also proactively share emerging technology and new ideas through our knowledge transfer system, Tetra Tech Technology Transfer ("T4"). T4 facilitates our innovation culture through webcasts, blogs, multi-media and social media across our global operations.
We actively share information, ideas and resources across our global operations through our network structure, guided subject matter teams and project team building. We use company-wide virtual events to engage Tetra Tech experts world-wide to solve client challenges and identify the best ideas for further development.
Our reputation for high-end consulting and engineering services and our ability to develop solutions for water and environmental management has supported our growth for more than 50 years. Our market leading climate mitigation and adaptation services are solving our clients' most complex challenges related to coastal flooding, water security, energy transition and biodiversity protection.
Our market leading climate mitigation and adaptation services are solving our clients' most complex challenges related to coastal flooding, water security, energy transition and biodiversity protection. Today, we are proud to be making a difference in people’s lives worldwide through our high-end consulting, engineering and technology service offerings.
Carter holds a B.S. in Business Administration from Miami University and is a Certified Public Accountant. Preston Hopson 48 Executive Vice President, Chief Legal and Human Capital Officer Mr.
Burdick served in senior financial and executive positions with Aura Systems, Inc., TRW Ventures, and Ernst & Young LLP. Mr. Burdick holds a B.S. degree in Business Administration from Santa Clara University and is a Certified Public Accountant. 13 Name Age Position Preston Hopson 49 Executive Vice President, Chief Legal and Human Capital Officer and Secretary Mr.
Our backlog at fiscal 2024 year-end was $5.4 billion, an increase of $586 million, or 12.2%, compared to fiscal 2023 year-end. Of this amount, GSG and CIG reported $3.2 billion and $2.2 billion of backlog, respectively, at fiscal 2024 year-end.
Our backlog at fiscal 2025 year-end was $4.1 billion. GSG and CIG reported $1.98 billion and $2.22 billion of backlog, respectively, at fiscal 2025 year-end.
Carter 57 Senior Vice President, Corporate Controller and Chief Accounting Officer Mr. Carter joined us as Vice President, Corporate Controller and Chief Accounting Officer in June 2011 and was appointed Senior Vice President in October 2012. Previously, Mr. Carter served in finance and auditing positions in private industry and with Ernst & Young LLP. Mr.
She was inducted into the United States' National Academy of Engineers in 2022. Brian N. Carter 58 Senior Vice President, Corporate Controller and Chief Accounting Officer Mr. Carter joined us as Vice President, Corporate Controller and Chief Accounting Officer in June 2011 and was appointed Senior Vice President in October 2012. Previously, Mr.
We are Leading with Science® throughout our operations, with domain experts across multiple disciplines supported by our advanced analytics, artificial intelligence ("AI"), machine learning and digital technology solutions. Our ability to provide innovative and first-of-kind solutions is enhanced by partnerships with our forward-thinking clients.
In fiscal 2025, we worked on over 100,000 projects, in more than 100 countries on all seven continents, with more than 25,000 associates. We are Leading with Science® throughout our operations, with domain experts across multiple disciplines supported by our advanced analytics, artificial intelligence ("AI"), machine learning and digital technology solutions.
Tetra Tech Delta is continually expanding and includes cutting-edge tools on interpretive analysis, modeling of physical systems, forecasting and scenario analysis, optimization and operations research. Our subscription solutions provide our clients with extended capabilities for AI-enabled large scale data management, spatial data interpretation, and ability to build and utilize digital twins for land, coastal and structural assets.
These advanced analytical solutions enable us to provide clients with real-time reporting, automated and remote data collection and dashboards for tracking and communicating results. Tetra Tech Delta is continually expanding and includes cutting-edge tools on interpretive analysis, modeling of physical systems, forecasting and scenario analysis, optimization and operations research.
Tetra Tech's Board of Directors reviews and approves the Sustainability Program and evaluates our progress in achieving the goals and objectives outlined in our plan. As part of our membership in the UN Global Compact, we annually report on the Communication on Progress using Tetra Tech's Sustainability Report . Acquisitions and Divestitures Acquisitions.
Tetra Tech's Board of Directors reviews and approves the Sustainability Program and evaluates our progress as outlined in Tetra Tech's annual Sustainability Report . Acquisitions and Divestitures Acquisitions. We continuously evaluate the marketplace for acquisition opportunities to further our strategic growth plans.
(“Amyx”), an enterprise technology services, cybersecurity and management consulting firm based in Reston, Virginia. With over 500 employees, Amyx provides application modernization, cybersecurity, systems engineering, financial management and program management support on over 30 U.S. federal government programs. Amyx is included in our GSG segment.
Amyx provides application modernization, cybersecurity, systems engineering, financial management and program management support on over 30 U.S. federal government programs. Amyx is included in our GSG segment. Divestitures. We regularly review and evaluate our existing operations to determine whether our business model should change through the divestiture of certain businesses.
Our Tetra Tech Learning Hub provides a full suite of training resources including project management, leadership development, and broad technical skills. Learning Hub curriculum is provided through online training, virtual workshops and in-person events. Reportable Segments We manage our operations under two reportable segments.
Learning Hub curriculum is provided through online training, virtual workshops and in-person events. Reportable Segments We manage our operations under two reportable segments. Our Government Services Group ("GSG") reportable segment primarily includes activities with U.S. government clients (federal, state and local) and all activities with development agencies worldwide.
For detailed information regarding acquisitions, see Note 5, "Acquisitions" of the "Notes to Consolidated Financial Statements" included in Item 8. Divestitures. We regularly review and evaluate our existing operations to determine whether our business model should change through the divestiture of certain businesses.
For detailed information regarding acquisitions, see Note 5, "Acquisitions and Divestitures" of the "Notes to Consolidated Financial Statements" included in Item 8. Competition The market for our services is generally competitive. We often compete with many other firms ranging from small regional firms to large international firms.
Our projects also include building capacity and strengthening institutions in areas such as global health, energy sector reform, utility management, education, food security and local governance. Commercial/International Services Group CIG primarily provides high-end consulting and engineering services to U.S. commercial clients, and international clients inclusive of the commercial and government sectors.
We provide specialized software products, modeling and data analytics for airspace acoustic analysis. Our aviation airspace services include data management, data processing, communications and outreach and systems development; and providing systems analysis and information management. Commercial/International Services Group CIG primarily provides high-end consulting and engineering services to U.S. commercial clients, and international clients inclusive of the commercial and government sectors.
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Today, we are proud to be making a difference in people’s lives worldwide through our high-end consulting, engineering and technology service offerings. In fiscal 2024, we worked on over 100,000 projects, in more than 100 countries on all seven continents, with a talent force of 30,000 associates.
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Our subscription solutions provide our clients with extended capabilities for AI-enabled large scale data management, spatial data interpretation, and ability to optimize land, coastal and infrastructure systems. Leading with Science® also means fully leveraging the collective expertise provided by our global workforce of more than 25,000 associates.
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Leading with Science® also means fully leveraging the collective expertise provided by our global workforce of 30,000 associates. We actively share information, ideas and resources across our global operations through our network structure, guided subject matter teams and project team building.
Added
We also proactively share emerging technology and new ideas through our knowledge transfer system, Tetra Tech Technology Transfer ("T4"). T4 facilitates our innovation culture through webcasts, blogs, multi-media and social media across our global operations. Our Tetra Tech Learning Hub provides a full suite of training resources including project management, leadership development, and broad technical skills.
Removed
We provide high-end advanced analytics and information technology ("IT") consulting and support to various federal clients including AI applications, machine learning, modernization of IT systems and cloud migration. We design solutions to manage and analyze data for major federal agency programs including data related to health, security, environment and water programs.
Added
Also, during our evaluation, we examine an acquisition's ability to drive organic growth, its accretive effect on long-term earnings and its ability to generate return on 9 investment. Generally, we proceed with an acquisition if we believe that it will strategically expand our service offerings, improve our long-term financial performance and increase shareholder returns.
Removed
Our aviation airspace services include data management, data processing, communications and outreach and systems development; and providing systems analysis and information management. We support governments in implementing international development programs for developing nations to help them address numerous challenges, including access to potable water, essential energy needs, economic development and climate adaptation.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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If there is no lawful manner for us to transfer personal data from the EEA, the UK or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions (such as Europe) at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business.
If there is no lawful manner for us to transfer personal data from the EEA, the UK or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing 28 activities to other jurisdictions (such as Europe) at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business.
The issuance of additional guidance related to existing or future tax laws, or changes to tax laws, tax treaties or regulations proposed or implemented by the current or a future U.S. presidential administration, Congress, taxing authorities in other jurisdictions, including jurisdictions outside of the United States, or by bodies such as the European Commission or the Organisation for Economic Co-operation and Development ("OECD"), could materially affect our tax obligations (including the cost of compliance) and effective tax rate.
The issuance of additional guidance related to existing or future tax laws, or changes to tax laws, tax treaties or 26 regulations proposed or implemented by the current or a future U.S. presidential administration, Congress, taxing authorities in other jurisdictions, including jurisdictions outside of the United States, or by bodies such as the European Commission or the Organisation for Economic Co-operation and Development ("OECD"), could materially affect our tax obligations (including the cost of compliance) and effective tax rate.
Holders of our convertible notes have the right, subject to certain conditions and limited exceptions, to require us to repurchase all or a portion of their convertible notes upon the occurrence of a fundamental change (as defined in the indenture governing the convertible notes) at a fundamental change repurchase price equal to 100% of the principal amount of the convertible notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change 23 repurchase date.
Holders of our convertible notes have the right, subject to certain conditions and limited exceptions, to require us to repurchase all or a portion of their convertible notes upon the occurrence of a fundamental change (as defined in the indenture governing the convertible notes) at a fundamental change repurchase price equal to 100% of the principal amount of the convertible notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date.
Outside the United States, an increasing number of laws, regulations, and industry standards govern data privacy and security. For example, the European Union's General Data Protection Regulation ("EU GDPR"), the United Kingdom’s GDPR, 29 and Brazil’s General Data Protection Law (Lei Geral de Proteção de Dados Pessoais, or “LGPD”) (Law No. 13,709/2018) impose strict requirements for processing personal data.
Outside the United States, an increasing number of laws, regulations, and industry standards govern data privacy and security. For example, the European Union's General Data Protection Regulation ("EU GDPR"), the United Kingdom’s GDPR, and Brazil’s General Data Protection Law (Lei Geral de Proteção de Dados Pessoais, or “LGPD”) (Law No. 13,709/2018) impose strict requirements for processing personal data.
As a result, we may be required to expend significant resources to protect against the threat of these system disruptions and security breaches or to alleviate problems caused by these disruptions and breaches. We also rely in part on third-party software and information technology vendors to run our critical accounting, project management and financial information systems.
As a result, we may be required to expend significant resources to protect against the threat of these system disruptions and security breaches or to alleviate problems caused by these disruptions and breaches. 19 We also rely in part on third-party software and information technology vendors to run our critical accounting, project management and financial information systems.
In addition, even if holders do not elect to convert their notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of our convertible notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.
In addition, even if holders do not elect to convert their notes, we could be required under 22 applicable accounting rules to reclassify all or a portion of the outstanding principal of our convertible notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.
If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive. Our ability to refinance our indebtedness will depend on the capital markets and our financial condition at such time.
If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional equity capital on terms that may 21 be onerous or highly dilutive. Our ability to refinance our indebtedness will depend on the capital markets and our financial condition at such time.
These amounts are recorded only when they can be reliably estimated and realization is probable; provisions for uncollectible receivables, client claims and recoveries of costs from subcontractors, 19 vendors and others; provisions for income taxes, research and development tax credits, valuation allowances and unrecognized tax benefits; and value of goodwill and recoverability of intangible assets.
These amounts are recorded only when they can be reliably estimated and realization is probable: provisions for uncollectible receivables, client claims and recoveries of costs from subcontractors, vendors and others; provisions for income taxes, research and development tax credits, valuation allowances and unrecognized tax benefits; and value of goodwill and recoverability of intangible assets.
Risks Related to Our Business and Operations If we fail to complete a project in a timely manner, miss a required performance standard or otherwise fail to adequately perform on a project, then we may incur a loss on that project, which may reduce or eliminate our overall profitability. Our engagements often involve large-scale, complex projects.
Risks Related to Our Business and Operations If we fail to complete a project in a timely manner, miss a required performance standard or otherwise fail to adequately perform on a project, then we may incur a loss on that project, which may reduce or eliminate our overall profitability. 14 Our engagements often involve large-scale, complex projects.
We are required to perform a goodwill impairment test for potential impairment at least on an annual basis. We also assess the recoverability of the unamortized balance of our intangible assets when indications of impairment are present based on expected future profitability and undiscounted expected cash flows and their contribution to our overall operations.
We are required to perform a goodwill impairment test for potential impairment at least on an annual basis. We also assess the recoverability of the unamortized balance of our intangible assets when indications of impairment are present based on expected future profitability and undiscounted expected cash flows and their contribution to 24 our overall operations.
U.S. government contract violations could result in the imposition of civil and criminal penalties or sanctions, contract termination, forfeiture of profit and/or suspension of payment, any of which could make us lose our status as 26 an eligible government contractor. We could also suffer serious harm to our reputation.
U.S. government contract violations could result in the imposition of civil and criminal penalties or sanctions, contract termination, forfeiture of profit and/or suspension of payment, any of which could make us lose our status as an eligible government contractor. We could also suffer serious harm to our reputation.
In addition, our insurance policies contain exclusions that insurance providers may use to deny or restrict coverage. Excess liability and professional liability insurance policies provide for coverage on a “claims-made” basis, covering only claims actually made and reported during the policy period currently in effect.
In addition, our insurance policies contain exclusions that insurance providers may use to deny or restrict coverage. Excess liability and professional liability insurance policies provide for coverage on a “claims-made” basis, covering only 25 claims actually made and reported during the policy period currently in effect.
Our industry is highly competitive, and we may be unable to compete effectively, which could result in reduced revenue, profitability and market share. 16 We are engaged in a highly competitive business. The markets that we serve are highly fragmented and we compete with many regional, national and international companies.
Our industry is highly competitive, and we may be unable to compete effectively, which could result in reduced revenue, profitability and market share. We are engaged in a highly competitive business. The markets that we serve are highly fragmented and we compete with many regional, national and international companies.
This may reduce the profit to be realized or result in a loss on a project for which the services or supplies are needed. We also rely on relationships with other contractors when we act as their subcontractor or joint venture partner.
This may reduce the profit to be realized or result in a loss on a project for which the services or supplies are needed. 16 We also rely on relationships with other contractors when we act as their subcontractor or joint venture partner.
As a 18 result, we risk loss of or injury to our employees and may be subject to costs related to employee death or injury, repatriation or other unforeseen circumstances. We may choose or be forced to leave a country with little or no warning due to physical security risks.
As a result, we risk loss of or injury to our employees and may be subject to costs related to employee death or injury, repatriation or other unforeseen circumstances. We may choose or be forced to leave a country with little or no warning due to physical security risks.
If one of these clients terminates 22 their contract for convenience, we may only be able to bill the client for work completed prior to the termination, plus any commitments and settlement expenses such client agrees to pay, but not for any work not yet performed.
If one of these clients terminates their contract for convenience, we may only be able to bill the client for work completed prior to the termination, plus any commitments and settlement expenses such client agrees to pay, but not for any work not yet performed.
If a client 20 determines not to proceed with the completion of the project or if the client defaults on its payment obligations, we may face difficulties in collecting payment of amounts due to us for the costs previously incurred or for the amounts previously expended to purchase equipment or supplies.
If a client determines not to proceed with the completion of the project or if the client defaults on its payment obligations, we may face difficulties in collecting payment of amounts due to us for the costs previously incurred or for the amounts previously expended to purchase equipment or supplies.
We also enter into proprietary information and intellectual property agreements with employees, which require them to disclose any inventions created during employment, to convey such rights to inventions to us, and to restrict any disclosure of proprietary information. Trade secrets are generally difficult to protect.
We also enter into proprietary information and intellectual property agreements with employees, which require them to disclose any inventions created during employment, to convey such rights to inventions to us, and to restrict any disclosure of proprietary information. Trade secrets are generally 27 difficult to protect.
This reclassification could be required even if no holders convert their notes and could materially reduce our reported working capital. 24 Conversion of our convertible notes may dilute the ownership interest of our stockholders or may otherwise depress the price of our common stock.
This reclassification could be required even if no holders convert their notes and could materially reduce our reported working capital. Conversion of our convertible notes may dilute the ownership interest of our stockholders or may otherwise depress the price of our common stock.
In addition, if we expand into new markets, we may not be able to obtain insurance coverage for these new activities or, if insurance is obtained, the dollar amount of any liabilities incurred could exceed our insurance coverage.
In addition, if we expand into new markets, we may not be able to obtain insurance coverage for these new activities or, if insurance is obtained, the dollar amount of any liabilities incurred could 17 exceed our insurance coverage.
However, our ability to make acquisitions is restricted under our credit 25 agreement. Acquisitions involve certain known and unknown risks that could cause our actual growth or operating results to differ from our expectations or the expectations of securities analysts.
However, our ability to make acquisitions is restricted under our credit agreement. Acquisitions involve certain known and unknown risks that could cause our actual growth or operating results to differ from our expectations or the expectations of securities analysts.
If our reports and opinions are not in compliance with professional standards and other regulations, we could be subject to monetary damages and penalties. 28 We issue reports and opinions to clients based on our professional engineering expertise, as well as our other professional credentials.
If our reports and opinions are not in compliance with professional standards and other regulations, we could be subject to monetary damages and penalties. We issue reports and opinions to clients based on our professional engineering expertise, as well as our other professional credentials.
U.S. government contracts are awarded through a regulated procurement process. The U.S. federal government has increasingly relied upon multi-year contracts with pre-established terms and conditions, such as indefinite delivery/indefinite quantity (“IDIQ”) contracts, which generally require those contractors who have previously been awarded the IDIQ to engage in an additional competitive bidding process before a task order is issued.
U.S. government contracts are awarded through a competitive procurement process. The U.S. federal government has increasingly relied upon multi-year contracts with pre-established terms and conditions, such as indefinite delivery/indefinite quantity (“IDIQ”) contracts, which generally require those contractors who have previously been awarded the IDIQ to engage 20 in an additional competitive bidding process before a task order is issued.
If negative market conditions continue to persist, or if we fail to secure adequate financial arrangements or the required government approval, we may not be able to pursue certain projects, which could adversely affect our profitability. Our inability to win or renew U.S. government contracts during regulated procurement processes could harm our operations and significantly reduce or eliminate our profits.
If negative market conditions continue to persist, or if we fail to secure adequate financial arrangements or the required government approval, we may not be able to pursue certain projects, which could adversely affect our profitability. Our inability to win or renew U.S. government contracts during competitive procurement processes could harm our operations and significantly reduce or eliminate our profits.
Our inability to win or renew government contracts during regulated procurement processes could harm our operations and significantly reduce or eliminate our profits. Each year, client funding for some of our U.S. government contracts may rely on government appropriations or public-supported financing. If adequate public funding is delayed or is not available, then our profits and revenue could decline.
Our inability to win or renew government contracts during competitive procurement processes could harm our operations and significantly reduce or eliminate our profits. Each year, client funding for some of our U.S. government contracts may rely on government appropriations or public-supported financing. If adequate public funding is delayed or is not available, then our profits and revenue could decline.
Our revenue and growth prospects may be harmed if we or our employees are unable to obtain government granted eligibility or other qualifications we and they need to perform services for our customers. A number of government programs require contractors to have certain kinds of government granted eligibility, such as security clearance credentials.
Our revenue and growth prospects may be harmed if we or our employees are unable to obtain government granted eligibility or other qualifications we and they need to perform services for our customers. A number of government programs require contractors to have certain kinds of government granted eligibility, such as personnel security clearance and facility clearance credentials.
We cannot predict when or whether any of these various proposals may be enacted or what their effect will be on us or on our customers. 27 We may be subject to liabilities under environmental laws and regulations. Our services are subject to numerous U.S. and international environmental protection laws and regulations that are complex and stringent.
We cannot predict when or whether any of these various proposals may be enacted or what their effect will be on us or on our customers. We may be subject to substantial liabilities under environmental laws and regulations. Our services are subject to numerous U.S. and international environmental protection laws and regulations that are complex and stringent.
Our failure to meet these requirements or our failure to properly implement and comply with our safety program could result in reduced profitability, the loss of projects or clients or potential litigation, and could have a material adverse effect on our business, operating results or financial condition.
Our failure to meet these requirements or our failure to properly implement and comply with our safety program could result in reduced profitability, harm to our reputation, the loss of projects or clients or potential litigation, and could have a material adverse effect on our business, operating results or financial condition.
International business is subject to a variety of risks, including: imposition of governmental controls and changes in laws, regulations or policies; lack of developed legal systems to enforce contractual rights; greater risk of uncollectible accounts and longer collection cycles; currency exchange rate fluctuations, devaluations and other conversion restrictions; uncertain and changing tax rules, regulations and rates; the potential for civil unrest, acts of terrorism, force majeure, war or other armed conflict and greater physical security risks, which may cause us to have to leave a country quickly; logistical and communication challenges; changes in regulatory practices, including trade policies, tariffs and taxes; changes in labor conditions; general economic, political and financial conditions in foreign markets; and exposure to civil or criminal liability under the U.S.
International business is subject to a variety of risks, including: imposition of governmental controls and changes in laws, regulations or policies; lack of developed legal systems to enforce contractual rights; greater risk of uncollectible accounts and longer collection cycles; currency exchange rate fluctuations, devaluations and other conversion restrictions; uncertain and changing tax rules, regulations and rates; the potential for civil unrest, acts of terrorism, force majeure, war or other armed conflict and greater physical security risks, which may cause us to have to leave a country quickly; logistical and communication challenges; changes in regulatory practices, including trade policies, new or increased tariffs on certain imports from other countries and 15 possible retaliatory tariffs, and taxes; changes in labor conditions; general economic, political and financial conditions in foreign markets; and exposure to civil or criminal liability under the U.S.
If our goodwill or other intangible assets become impaired, then our profits may be significantly reduced. Because we have historically acquired a significant number of co mpanies, goodwill and other intangible assets represent a substantial portion of our assets. As of fiscal 2024 year-end, our goodwill was $2.0 billion and other intangible assets were $160.6 million.
If our goodwill or other intangible assets become impaired, then our profits may be significantly reduced. Because we have historically acquired a significant number of co mpanies, goodwill and other intangible assets represent a substantial portion of our assets. As of fiscal 2025 year-end, our goodwill was $2.0 billion and other intangible assets were $121.2 million.
The CCPA provides for administrative fines of up to $7,500 per violation and allows private litigants affected by certain data breaches to recover significant statutory damages. Other states, such as Virginia and Colorado, have also passed comprehensive privacy laws, and similar laws are being considered in several other states, as well as at the federal and local levels.
The CCPA provides for administrative fines and allows private litigants affected by certain data breaches to recover significant statutory damages. Other states, such as Virginia and Colorado, have also passed comprehensive privacy laws, and similar laws are being considered in several other states, as well as at the federal and local levels.
To the extent we cannot obtain or maintain the required security clearances for our employees working on a particular contract, we may not derive the revenue or profit anticipated from such contract.
To the extent we cannot obtain or maintain the required facility clearance and personnel security clearances for our employees working on a particular contract, we may not derive the revenue or profit anticipated from such contract.
Such factors, which include the 21 following, could have a material adverse effect on our revenue or the timing of contract payments from U.S. government agencies: the failure of the U.S. government to complete its budget and appropriations process before its fiscal year-end; changes in and delays or cancellations of government programs, procurements, requirements or appropriations; budget constraints or policy changes resulting in delay or curtailment of expenditures related to the services we provide; and re-competes of government contracts.
Such factors, which include the following, could have a material adverse effect on our revenue or the timing of contract payments from U.S. government agencies: the failure of the U.S. government to complete its budget and appropriations process before its fiscal year-end; changes in and delays or cancellations of government programs, procurements, requirements or appropriations; budget constraints or policy changes resulting in delay or curtailment of expenditures related to the services we provide; uncertainty regarding how future budget and program decisions will unfold; and re-competes of government contracts.
Risks Related to Our Clients We derive a substantial amount of our revenue from U.S. federal, state and local government agencies, and any disruption in government funding or in our relationship with those agencies could adversely affect our business. In fiscal 2024, we generated 44.0% of our revenue from contracts with U.S. federal, and state and local government agencies.
Risks Related to Our Clients We derive a substantial amount of our revenue from U.S. federal, state and local government agencies, and any disruption in government funding or in our relationship with those agencies could adversely affect our business. In fiscal 2025, we generated 46.1% of our revenue from contracts with U.S. federal, and state and local government agencies.
In fiscal 2024, we generated 38.5% of our revenue from our international operations, primarily in Canada, Australia, Europe, the United Kingdom and from international clients for work that is performed by our domestic operations.
In fiscal 2025, we generated 37.4% of our revenue from our international operations, primarily in Australia, Canada, Europe, the United Kingdom and from international clients for work that is performed by our domestic operations.
Although we have historically made reasonably reliable estimates of the progress towards completion of long-term contracts, the uncertainties inherent in the estimating process make it possible for actual costs to vary materially from estimates, including reductions or reversals of previously recorded revenue and profit.
Such revisions could occur in any period and their effects could be material. 18 Although we have historically made reasonably reliable estimates of the progress towards completion of long-term contracts, the uncertainties inherent in the estimating process make it possible for actual costs to vary materially from estimates, including reductions or reversals of previously recorded revenue and profit.
If economic conditions remain uncertain or weakened, or government spending is reduced, our revenue and profitability could be adversely affected. Our backlog is subject to cancellation, unexpected adjustments and changing economic conditions and is an uncertain indicator of future operating results.
If economic conditions remain uncertain or weakened, or government spending is reduced, our revenue and profitability could be adversely affected. Our backlog is subject to cancellation, unexpected adjustments and changing economic conditions and is an uncertain indicator of future operating results. Our backlog at fiscal 2025 year-end was $4.1 billion.
The effects of revisions to estimated revenue and costs, including the achievement of award fees and the impact of change orders and claims, are recorded when the amounts are known and can be reasonably estimated. Such revisions could occur in any period and their effects could be material.
The effects of revisions to estimated revenue and costs, including the achievement of award fees and the impact of change orders and claims, are recorded when the amounts are known and can be reasonably estimated.
For example, certain of our contracts with the U.S. federal government and other clients are terminable at the discretion of the client, with or without cause. These types of backlog reductions could adversely affect our revenue and margins.
For example, certain of our contracts with the U.S. federal government and other clients are terminable at the discretion of the client, with or without cause. These types of backlog reductions could adversely affect our revenue and margins. As a result of these factors, our backlog as of any particular date is an uncertain indicator of our future earnings.
In addition, the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions following the pricing of our convertible notes and prior to the maturity of our convertible notes (and are likely to do so during any observation period related to a conversion of our convertible notes or, to the extent we exercise the relevant election under the capped call transactions, following any repurchase or redemption of our convertible notes).
The capped call transactions are expected generally to reduce the potential dilution to our common stock upon any conversion of our convertible notes and/or offset any cash payments we are required to make in excess of the principal amount of converted notes (if and when we elect to settle the conversion spread value in cash), as the case may be, with such reduction and/or offset subject to a cap. 23 In addition, the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions following the pricing of our convertible notes and prior to the maturity of our convertible notes (and are likely to do so during any observation period related to a conversion of our convertible notes or, to the extent we exercise the relevant election under the capped call transactions, following any repurchase or redemption of our convertible notes).
Such disclosures are costly, and the disclosure or the failure to comply with such requirements could lead to adverse consequences. Any of these events could damage our reputation and have a material adverse effect on our business, financial condition, results of operations and cash flows.
Any of these events could damage our reputation and have a material adverse effect on our business, financial condition, results of operations and cash flows.
As a result of these factors, our backlog as of any particular date is an uncertain indicator of our future earnings. 17 The loss of key personnel or our inability to attract and retain qualified personnel could impair our ability to provide services to our clients and otherwise conduct our business effectively.
The loss of key personnel or our inability to attract and retain qualified personnel could impair our ability to provide services to our clients and otherwise conduct our business effectively.
While we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective. Vulnerabilities in our systems pose material risks to our business. Applicable data privacy and security obligations may require us to notify relevant stakeholders of security incidents.
While we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective. Applicable data privacy and security obligations may require us to notify relevant stakeholders of security incidents. Such disclosures are costly, and the disclosure or the failure to comply with such requirements could lead to adverse consequences.
We canno t guarantee that the revenue projected in our backlog will be realized or, if realized, will result in profits.
We include in backlog only those contracts for which funding has been provided and work authorizations have been received. We canno t guarantee that the revenue projected in our backlog will be realized or, if realized, will result in profits.
Removed
Our backlog at fiscal 2024 year-end was $5.4 billion, an increase of $586 million, or 12.2%, compared to fiscal 2023 year-end. We include in backlog only those contracts for which funding has been provided and work authorizations have been received.
Added
Vulnerabilities in our systems pose material risks to our business. We have not and may not in the future, however, detect and remediate all such vulnerabilities including on a timely basis. Further, we have and may in the future experience delays in developing and deploying remedial measures and patches designed to address identified vulnerabilities.
Removed
The capped call transactions are expected generally to reduce the potential dilution to our common stock upon any conversion of our convertible notes and/or offset any cash payments we are required to make in excess of the principal amount of converted notes (if and when we elect to settle the conversion spread value in cash), as the case may be, with such reduction and/or offset subject to a cap.
Added
Our fiscal 2025 operating income reflects a non-cash goodwill impairment charge of $92.4 million related to our Global Development Services reporting unit due to the cancellation of USAID contracts (see Note 6, "Goodwill and Intangible Assets" of the "Notes to Consolidated Financial Statements" included in Item 8). We had no goodwill impairment in fiscal 2024 and 2023.
Removed
We had no goodwill impairment in fiscal 2024, 2023 or 2022.
Added
For example, on July 4, 2025, the U.S. government enacted legislation commonly referred to as the One Big Beautiful Bill Act, which includes changes to the taxation of business entities, and we are evaluating the future impact of certain of these changes on our financial statements.
Removed
Corporate responsibility, specifically related to environmental, social and governance (“ESG”) matters, may impose additional costs and expose us to new risks. Public ESG and sustainability reporting is becoming more broadly expected by investors, stockholders, and other stakeholders.
Added
Item 1B Unresolved Staff Comments None. Item 1C Cybersecurity Risk management and strategy We have in place certain infrastructure, systems, policies, and procedures that are designed to proactively and reactively address circumstances that arise when unexpected events such as a cybersecurity incident occur. These include processes for assessing, identifying, managing, and reporting material risks from cybersecurity threats and incidents.
Removed
Certain organizations that provide corporate governance and other corporate risk information to investors and shareholders have developed, and others may in the future develop, scores and ratings to evaluate companies and investment funds based upon ESG or “sustainability” metrics.
Added
Our information security management program generally follows processes outlined in frameworks such as the National Institute of Standards and Technology Cyber Security Framework and ISO 27001 international standard for Information Security. Due to the nature and location of the work that we perform, we are often required to obtain certifications required by our clients and regulators.
Removed
Many investment funds focus on positive ESG business practices and sustainability scores when making investments and may consider a company’s ESG or sustainability scores as a reputational or other factor in making an investment decision.
Added
We evaluate and evolve our security measures as appropriate. We consult with external parties, such as cybersecurity firms and risk management and governance experts, on risk management and strategy.
Removed
In addition, investors, particularly institutional investors, use these scores to benchmark companies against their peers and if a company is perceived as lagging, these investors may engage with such company to improve ESG disclosure or performance and may also make voting decisions, or take other actions, to hold these companies and their boards of directors accountable.
Added
Identifying, assessing, and managing cybersecurity risk is integrated into our overall risk management program which includes cybersecurity and data privacy training and policies and procedures designed to (a) respond to new requirements in global privacy and cybersecurity laws and (b) prevent, detect, respond to, mitigate and recover from identified and significant cybersecurity threats.
Removed
We may also face reputational damage in the event our corporate 30 responsibility initiatives or objectives do not meet the standards set by our investors, stockholders, lawmakers, listing exchanges or other constituencies, or if we are unable to achieve an acceptable ESG or sustainability rating from third party rating services.
Added
We also have a vendor risk assessment process consisting of, depending on the nature and sensitivity of the supplier and data they process on our behalf, the distribution and review of supplier questionnaires designed to help us evaluate cybersecurity risks that we may encounter when working with third parties that have access to confidential and other sensitive company information.
Removed
A low ESG or sustainability rating by a third-party rating service could also result in the exclusion of our common stock from consideration by certain investors who may elect to invest with our competition instead. Ongoing focus on corporate responsibility matters by investors and other parties as described above may impose additional costs or expose us to new risks.
Added
We routinely assess our high-risk suppliers’ conformance to industry cybersecurity standards and evaluate them for additional information as circumstances change. Refer to Item 1A.
Added
“Risk Factors” in this annual report on Form 10-K for additional information about cybersecurity-related risks. 29 Governance The Board of Directors reviews the adequacy and effectiveness of the Company’s information security policies and practices and the internal controls regarding information security risks and is informed immediately of any material cybersecurity incident or threat.
Added
Additionally, our Board of Directors receives regular updates on important information security matters from our Chief Information Officer and our Head of our Risk Management Program.
Added
Management oversight of information security matters, including managing and assessing risks from cybersecurity threats fall under the oversight of our Executive Management Team which includes representation of senior leadership from Operations, Legal and Risk Management, Finance and Administration. The Executive Management Team receives regular security updates from our Chief Information Officer.
Added
Our Executive Management team participates in cybersecurity incident response efforts by engaging with the incident response team and helping direct our response to and assessment of certain cybersecurity incidents and subsequent reporting and disclosure requirements.
Added
We have designated our Chief Information Officer who reports to our Chief Executive Officer and Chairman of the Board to manage the assessment and response to material risks from cybersecurity threats. Our Chief Information Officer’s cybersecurity expertise includes over 18 years of experience in information security and technology.

Item 2. Properties

Properties — owned and leased real estate

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Item 2. Properties At fiscal 2024 year-end, we leased approximately 560 operating facilities in domestic and foreign locations. Our significant lease agreements expire at various dates through 2033. We believe that our current facilities are adequate for the operation of our business, and that suitable additional space in various local markets is available to accommodate any needs that may arise.
Item 2. Properties At fiscal 2025 year-end, we leased approximately 570 operating facilities in domestic and foreign locations. Our significant lease agreements expire at various dates through 2035. We believe that our current facilities are adequate for the operation of our business, and that suitable additional space in various local markets is available to accommodate any needs that may arise.
The following table summarizes our ten most significant leased properties by location based on annual rental expenses (listed alphabetically, except for our corporate headquarters): Location Description Reportable Segment Pasadena, CA Corporate Headquarters Corporate Arlington, VA Office Building GSG / CIG Boston, MA Office Building GSG / CIG Irvine, CA Office Building GSG / CIG London, United Kingdom Office Building GSG / CIG Melbourne, Australia Office Building CIG New York, NY Office Building GSG /CIG Orlando, FL Office Building GSG / CIG Pittsburgh, PA Office Building GSG / CIG Portland, OR Office Building GSG / CIG
The following table summarizes our ten most significant leased properties by location based on annual rental expenses (listed alphabetically, except for our corporate headquarters): Location Description Reportable Segment Pasadena, CA Corporate Headquarters Corporate Arlington, VA Office Building GSG Boston, MA Office Building GSG / CIG Irvine, CA Office Building GSG / CIG London, United Kingdom Office Building GSG / CIG Melbourne, Australia Office Building CIG New York, NY Office Building GSG / CIG Oakland, CA Office Building GSG Portland, OR Office Building GSG / CIG Sydney, Australia Office Building CIG

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Act and Item 104 of Regulation S-K is included in Exhibit 95. 31 PART II
Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Act and Item 104 of Regulation S-K is included in Exhibit 95. 30 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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We declared and paid dividends totaling $0.196, $0.172, $0.148 and $0.128 per share in fiscal 2023, 2022, 2021 and 2020, respectively. The comparison in the graph below is based on historical data and is not intended to forecast the possible future performa nce of our common stock.
We declared and paid dividends totaling $0.220, $0.196, $0.172 and $0.148 per share in fiscal 2024, 2023, 2022 and 2021, respectively. The comparison in the graph below is based on historical data and is not intended to forecast the possible future performa nce of our common stock.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the NASDAQ Global Select Market under the symbol TTEK. There were approximately 1,046 stockholders of record at September 29, 2024.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the NASDAQ Global Select Market under the symbol TTEK. There were approximately 1,020 stockholders of record at September 28, 2025.
We declared and paid dividends in the first and second quarters totaling $0.104 per share ($0.052 each quarter) on our common stock and paid dividends in the third and fourth quarters totaling $0.116 per share ($0.058 each quarter) on our common stock.
We declared and paid dividends in the first and second quarters totaling $0.116 per share ($0.058 each quarter) on our common stock and paid dividends in the third and fourth quarters totaling $0.130 per share ($0.065 each quarter) on our common stock.
The graph assumes that the value of an investment in our common stock and in each such index was $100 on September 29, 2019, and that all dividends have been reinvested. Dividends declared and paid in fiscal 2024 totaled $0.220 per share.
The graph assumes that the value of an investment in our common stock and in each such index was $100 on September 27, 2020, and that all dividends have been reinvested. Dividends declared and paid in fiscal 2025 totaled $0.246 per share.
ASSUMES $100 INVESTED ON SEPTEMBER 29, 2019 ASSUMES DIVIDEND REINVESTED FISCAL YEAR ENDED SEPTEMBER 29, 2024 2019 2020 2021 2022 2023 2024 Tetra Tech, Inc. $ 100.00 $ 108.26 $ 181.19 $ 154.26 $ 183.65 $ 281.86 NASDAQ Market Index 100.00 138.78 186.51 136.43 172.05 237.60 S&P 1000 Index 100.00 94.20 145.00 119.23 135.76 171.48 The performance graph above and related text are being furnished solely to accompany this annual report on Form 10-K pursuant to Item 201(e) of Regulation S-K, and are not being filed for purposes of Section 18 of the Exchange Act, and are 32 not to be incorporated by reference into any of our filings with the SEC, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
ASSUMES $100 INVESTED ON SEPTEMBER 27, 2020 ASSUMES DIVIDEND REINVESTED FISCAL YEAR ENDED SEPTEMBER 28, 2025 2020 2021 2022 2023 2024 2025 Tetra Tech, Inc. $ 100.00 $ 167.36 $ 142.49 $ 169.64 $ 260.35 $ 188.31 NASDAQ Market Index 100.00 134.39 98.30 123.97 171.20 213.87 S&P 1000 Index 100.00 153.93 126.58 144.12 182.04 192.10 The performance graph above and related text are being furnished solely to accompany this annual report on Form 10-K pursuant to Item 201(e) of Regulation S-K, and are not being filed for purposes of Section 18 of the Exchange Act, and are 31 not to be incorporated by reference into any of our filings with the SEC, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
In fiscal 2022, we repurchased and settled 6,708,395 shares with an average price of $29.81 per share for a total cost of $200.0 million. At fiscal 2024 year-end, we had a remaining balance of $347.8 million under our stock repurchase program.
In fiscal 2025, we repurchased and settled 7,304,697 shares with an average price of $34.22 per share for a total cost of $250.0 million in the open market. In fiscal 2024 and 2023, we did not repurchase any shares of our common stock. At fiscal 2025 year-end, we had a remaining balance of $597.8 million under our stock repurchase program.
Stock Repurchase Program On October 5, 2021, our Board of Directors authorized a new stock repurchase program under which we could repurchase up to $400 million of our common stock. In fiscal 2024 and 2023, we did not repurchase any shares of our common stock.
Stock Repurchase Program On May 5, 2025, our Board of Directors authorized an additional $500 million stock repurchase program in addition to the previous $400 million stock repurchase program authorized on October 5, 2021.
Added
Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Dollar Value that May Yet be Purchased Under the Plans or Programs (in thousands) September 30, 2024 - October 27, 2024 — $ — — $ 347,813 October 28, 2024 - November 24, 2024 80,973 40.75 80,973 344,513 November 25, 2024 - December 29, 2024 519,034 41.81 519,034 322,813 December 30, 2024 - January 26, 2025 153,591 41.02 153,591 316,513 January 27, 2025 - February 23, 2025 3,203,776 33.88 3,203,776 207,963 February 24, 2025 - March 30, 2025 1,208,341 29.08 1,208,341 172,828 March 31, 2025 - April 27, 2025 292,865 29.84 292,865 164,089 April 28, 2025 - May 25, 2025 262,477 33.30 262,477 655,349 May 26, 2025 - June 29, 2025 212,028 35.47 212,028 647,828 June 30, 2025 - July 27, 2025 203,819 37.09 203,819 640,269 July 28, 2025 - August 24, 2025 505,514 36.61 505,514 621,761 August 25, 2025 - September 28, 2025 662,279 36.14 662,279 597,828

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

69 edited+29 added−59 removed67 unchanged
(2) Includes revenue generated from non-U.S. clients, primarily in the United Kingdom, Australia and Canada. U.S.
(2) Includes revenue generated from non-U.S. clients, primarily in Australia, Canada and the United Kingdom. U.S.
We perform interim goodwill impairment reviews between our annual reviews if certain events and circumstances have occurred, including a deterioration in general economic conditions, an increased competitive environment, a change in management, key personnel, strategy or customers, negative or declining cash flows or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods (se e Note 6, "Goodwill and Intangible Assets" of the "Notes to Consolidated Financial Statements" in Item 8 for further discussion).
We perform interim goodwill impairment reviews between our annual reviews if certain events and circumstances have occurred, including a deterioration in general economic conditions, an increased competitive environment, a change in management, key personnel, strategy or customers, negative or declining cash flows or a decline in actual or planned revenue or 42 earnings compared with actual and projected results of relevant prior periods (se e Note 6, "Goodwill and Intangible Assets" of the "Notes to Consolidated Financial Statements" in Item 8 for further discussion).
In those cases where costs exceed the remaining amounts payable under the contract, we may have recourse to third parties, such as owners, co-venturers, subcontractors or vendors, for claims. • In the ordinary course of business, our clients may request that we obtain surety bonds in connection with contract performance obligations that are not required to be recorded in our consolidated balance sheets.
In those cases where costs exceed the 40 remaining amounts payable under the contract, we may have recourse to third parties, such as owners, co-venturers, subcontractors or vendors, for claims. • In the ordinary course of business, our clients may request that we obtain surety bonds in connection with contract performance obligations that are not required to be recorded in our consolidated balance sheets.
The contingent earn-out payments are not affected by employment termination. We measure our contingent earn-out liabilities at fair value on a recurring basis using significant unobservable inputs classified within Level 3 of the fair value hierarchy (See Note 2, "Basis of Presentation – Fair Value of Financial Instruments" of the "Notes to Consolidated Financial Statements" included in Item 8).
The contingent earn-out payments are not affected by employment termination. 43 We measure our contingent earn-out liabilities at fair value on a recurring basis using significant unobservable inputs classified within Level 3 of the fair value hierarchy (See Note 2, "Basis of Presentation – Fair Value of Financial Instruments" of the "Notes to Consolidated Financial Statements" included in Item 8).
In the event that we determine that our goodwill is impaired, we would be 47 required to record a non-cash charge that could result in a material adverse effect on our results of operations or financial position. We use two methods to determine the fair value of our reporting units: (i) the Income Approach and (ii) the Market Approach.
In the event that we determine that our goodwill is impaired, we would be required to record a non-cash charge that could result in a material adverse effect on our results of operations or financial position. We use two methods to determine the fair value of our reporting units: (i) the Income Approach and (ii) the Market Approach.
Adjustments to the estimated fair value related to changes in all other unobservable inputs are reported in operating income. RECENT ACCOUNTING PRONOUNCEMENTS 48 For a discussion of recent accounting standards and the effect they could have on the consolidated financial statements, see Note 2, "Basis of Presentation" of the "Notes to Consolidated Financial Statements" included in Item 8.
Adjustments to the estimated fair value related to changes in all other unobservable inputs are reported in operating income. RECENT ACCOUNTING PRONOUNCEMENTS For a discussion of recent accounting standards and the effect they could have on the consolidated financial statements, see Note 2, "Basis of Presentation" of the "Notes to Consolidated Financial Statements" included in Item 8.
When the current estimate of total costs indicates a loss, a provision for the entire estimated loss on the contract is made in the period in which the loss becomes evident. 46 Contract Types Our services are performed under three principal types of contracts: fixed-price, time-and-materials and cost-plus.
When the current estimate of total costs indicates a loss, a provision for the entire estimated loss on the contract is made in the period in which the loss becomes evident. Contract Types Our services are performed under three principal types of contracts: fixed-price, time-and-materials and cost-plus.
We believe our operations have not been, and, in the foreseeable future, are not expected to be, materially adversely affected by inflation or changing prices due to the average duration of our projects and our ability to negotiate prices as contracts end and new contracts begin. Dividends.
We believe our operations have not been, and, in the foreseeable future, are not expected to be, materially adversely affected by inflation or changing prices due to the average duration of our projects and our ability to negotiate prices as contracts end and new contracts begin. 39 Dividends.
For contracts containing variable consideration, we allocate the variability to a specific performance obligation within the contract if such variability relates specifically to our efforts to satisfy the performance obligation or transfer the distinct good or service, and the allocation depicts the amount of consideration to which we expect to be entitled.
For contracts containing variable consideration, we allocate the variability to a specific performance obligation within the contract if such variability relates 41 specifically to our efforts to satisfy the performance obligation or transfer the distinct good or service, and the allocation depicts the amount of consideration to which we expect to be entitled.
Our primary uses of cash are to fund working capital, cash dividends, capital expenditures and repayment of debt, as well as to fund acquisitions and earn-out obligations from prior acquisitions.
Our primary uses of cash are to fund working capital, cash dividends, share repurchases, capital expenditures and repayment of debt, as well as to fund acquisitions and earn-out obligations from prior acquisitions.
The following analysis contains forward-looking statements about our future results of operations and expectations. Our actual results and the timing of events could differ materially from those described herein. See Part 1, Item 1A, "Risk Factors" for a discussion of the risks, assumptions and uncertainties affecting these statements. OVERVIEW OF RESULTS AND BUSINESS TRENDS General.
The following analysis contains forward-looking statements about our future results of operations and expectations. Our actual results and the timing of events could differ materially from those described herein. See Part 1, Item 1A, "Risk Factors" for a discussion of the risks, assumptions and uncertainties affecting these statements.
If we default on the Amended Credit Agreement or additional credit facilities, our inability to issue or renew standby letters of credit and bank guarantees would impair our ability to maintain normal operations.
If we default on the Amended Credit Agreement or additional credit facilities, our inability to issue or renew standby letters of credit a nd bank guarantees would impair our ability to maintain normal operations.
Customer payments on contracts are typically due within 60 days of billing, depending on the contract. Fixed-Price . Under fixed-price contracts, clients pay us an agreed fixed-amount negotiated in advance for a specified scope of work. Time-and-Materials .
Customer payments on contracts are typically due within 30 to 45 days of billing, depending on the contract. Fixed-Price . Under fixed-price contracts, clients pay us an agreed fixed-amount negotiated in advance for a specified scope of work. Time-and-Materials .
We may borrow on the Amended Revolving Credit Facility, at our option, at either (a) a benchmark rate plus a margin that ranges from 1.000% to 1.875% per annum, or (b) a base rate for loans in U.S. dollars (the highest of the U.S. federal funds rate plus 0.50% per annum, the bank’s prime rate or the Secured Overnight Financing Rate ("SOFR") rate plus 1.00%, plus a margin that ranges from 0% to 0.875% per annum.
We may borrow on the Amended Revolving Credit Facility, at our option, at either (a) a benchmark rate plus a margin that ranges from 1.000% to 1.750% per annum, or (b) a base rate for loans in U.S. dollars (the highest of the U.S. federal funds rate plus 0.50% per annum, the bank’s prime rate or the SOFR rate plus 1.00%, plus a margin that ranges from 0% to 0.75% per annum).
The Amended Credit Agreement provides for, among other things, (i) refinance indebtedness under our Credit Agreement dated as of July 30, 2018; (ii) finance open market repurchases of common stock, acquisitions and cash dividends and distributions; and (iii) utilize the proceeds for working capital, capital expenditures and other general corporate purposes.
The Amended Credit Agreement provides for, among other things, (i) refinance indebtedness under our Third Amended Credit Agreement; (ii) finance open market repurchases of common stock, acquisitions, and cash dividends and distributions; and (iii) utilize the proceeds for working capital, capital expenditures and other general corporate purposes.
In each case, the applicable margin is based on our Consolidated Leverage Ratio, calculated quarterly. The Amended Term Loan Facility is subject to the same interest rate provisions. The Amended Credit Agreement expires on February 18, 2027, or earlier at our discretion upon payment in full of loans and other obligations.
In each case, the applicable margin is based on our Consolidated Leverage Ratio, calculated quarterly. The 5Y Term Loan Facility is subject to the same interest rate provisions. The Amended Credit Agreement expires on May 5, 2030, or earlier at our discretion upon payment in full of loans and other obligations.
Our last review at July 1, 2024 (i.e., the first day of our fourth quarter in fiscal 2024), indicated that we had no impairment of goodwill, and all of our reporting units had estimated fair values that were in excess of their carrying values, including goodwill.
Our last review at June 30, 2025 (i.e., the first day of our fourth quarter in fiscal 2025), indicated that we had no impairment of goodwill, and all of our reporting units had estimated fair values that were in excess of their carrying values, including goodwill.
In addition, the Amended Credit Agreement includes a $300 million accordion feature that allows us to increase the Amended Credit Agreement to $1.05 billion subject to lender approval.
In addition, the Amended Credit Agreement includes a $400 million accordion feature that allows us to increase the Amended Credit Agreement to $1.5 billion subject to lender approval.
Several jurisdictions in which we operate have enacted these rules, which are effective for the first quarter of fiscal 2025. We are continually monitoring developments and evaluating the potential impacts. At this time, we do not anticipate a material tax charge as a result of implementation of these rules.
Several jurisdictions in which we operate have enacted these rules, which are effective from the first quarter of fiscal 2025. We are continually monitoring developments and evaluating the potential impacts. We did not have a material tax charge as a result of implementation of these rules in fiscal 2025.
At fiscal 2024 year-end, we had $0.7 million in standby letters of credit outstanding under our Amended Credit Agreement and $43.3 million in standby letters of credit outstanding under our additional letter of credit facilities. • From time to time, we provide guarantees and indemnifications related to our services.
At fiscal 2025 year-end, we had $0.7 million in standby letters of credit outstanding under our Amended Credit Agreement and $53.8 million in standby l etters of credit outstanding under our additional letter of credit facilities. • From time to time, we provide guarantees and indemnifications related to our services.
At September 29, 2024, we were in compliance with these covenants with a consolidated leverage ratio of 1.38x and a consolidated interest coverage ratio of 13.94x. In addition to the Amended Credit Agreement, we maintain other credit facilities, which may be used for short-term cash advances and bank guarantees.
At September 28, 2025, we were in compliance with these covenants with a consolidated leverage ratio of 1.13x and a consolidated interest coverage ratio of 17.31x . In addition to the Amended Credit Agreement, we maintain other credit facilities, which may be used for short-term cash advances and bank guarantees.
In fiscal 2023, we repaid the Amended Term Loan Facility in full with the Convertible Notes proceeds. 43 On August 22, 2023, we issued $575.0 million in convertible notes that bear interest at 2.25% per annum payable semiannually in arrears on February 15 and August 15 of each year, beginning on February 15, 2024 with a maturity date of August 15, 2028 (the "Convertible Notes").
On August 22, 2023, we issued $575.0 million in Convertible Notes that bear interest at 2.25% per annum payable semiannually in arrears on February 15 and August 15 of each year, beginning on February 15, 2024 with a maturity date of August 15, 2028.
Our CIG segment's revenue increased $362.1 million, or 14.9%, and revenue, net of subcontractor costs, increased $296.2 million, or 14.0% in fiscal 2024 compared to fiscal 2023. The fiscal 2024 results for GSG and CIG segments are described below under "Government Services Group" and "Commercial/International Group", respectively. The following table reconciles our reported results to non-U.S.
Our CIG segment's revenue increased $57.9 million, or 2.1%, and revenue, net of subcontractor costs, increased $75.7 million, or 3.1% in fiscal 2025 compared fiscal 2024. The fiscal 2025 results for GSG and CIG segments are described below under "Government Services Group" and "Commercial/International Group", respectively. The following table reconciles our reported results to non-U.S. GAAP adjusted results.
The Amended Credit Agreement contains certain affirmative and restrictive covenants, and customary events of default. The financial covenants provide for a maximum Consolidated Leverage Ratio of 3.25 to 1.00 (total funded debt/EBITDA, as defined in the Amended Credit Agreement) and a minimum Consolidated Interest Coverage Ratio of 3.00 to 1.00 (EBITDA/Consolidated Interest Charges, as defined in the Amended Credit Agreement).
The financial covenants provide for a maximum Consolidated Leverage Ratio of 3.50 to 1.00 (total funded debt/EBITDA, as defined in the Amended Credit Agreement) and a minimum Consolidated Interest Coverage Ratio of 3.00 to 1.00 (EBITDA/Consolidated Interest Charges, as defined in the Amended Credit Agreement).
These liabilities represent our current estimates of the additional tax liabilities that we may be assessed when the related audits are concluded. If these audits are resolved in a manner more unfavorable than our current expectations, our additional tax liabilities could be materially higher than the amounts currently recorded resulting in additional tax expense.
If these audits are resolved in a manner more unfavorable than our current expectations, our additional tax liabilities could be materially higher than the amounts currently recorded resulting in additional tax expense.
The Amended Credit Agreement is a $750 million senior secured, five-year facility that provides for a $250 million term loan facility (the “Amended Term Loan Facility”) and a $500 million revolving credit facility (the “Amended Revolving Credit Facility”).
The Second Amended Credit Agreement consisted of a $750 million senior secured, five-year facility that provided for a $250 million term loan facility ("Second Term Loan Facility") and a $500 million revolving credit facility ("Second Revolving Credit Facility").
At September 29, 2024, there were no outstanding borrowings under these facilities, and the aggregate amount of standby letters of credit outstanding was $43.3 million. As of September 29, 2024, we had no bank overdrafts related to our disbursement bank accounts. Inflation.
At September 28, 2025, there were no outstanding borrowings under these facilities, and the aggregate amount of standby letters of credit outstanding wa s $53.8 million. At September 28, 2025 , we had no bank overdrafts related to our disbursement bank accounts. Inflation.
At September 29, 2024, we had $232.7 million of cash and cash equivalents and access to an additional $800 million of borrowing available under our credit facility. We generated $358.7 million of cash from operations in fiscal 2024. Our primary sources of liquidity are cash flows from operations and borrowings under our credit facilities.
At September 28, 2025, we h ad $167.5 million of cash and cash equivalents and access to an additional $999.3 million of borrowing available under our credit facility. We generated $457.7 million of cash from operations in fiscal 2025. Our primary sources of liquidity are cash flows from operations and borrowings under our credit facilities.
Our Board of Directors has authorized the following dividends: Dividend Per Share Record Date Total Maximum Payment (in thousands) Payment Date November 13, 2023 $ 0.052 November 30, 2023 $ 13,873 December 13, 2023 January 29, 2024 $ 0.052 February 14, 2024 $ 13,908 February 27, 2024 April 29, 2024 $ 0.058 May 20, 2024 $ 15,522 May 31, 2024 July 29, 2024 $ 0.058 August 15, 2024 $ 15,525 August 30, 2024 November 11, 2024 $ 0.058 November 27, 2024 N/A December 13, 2024 Income Taxes We evaluate the realizability of our deferred tax assets by assessing the valuation allowance and adjust the allowance, if necessary.
Our Board of Directors has authorized the following dividends: Dividend Per Share Record Date Total Maximum Payment (in thousands) Payment Date November 11, 2024 $ 0.058 November 27, 2024 $ 15,549 December 13, 2024 January 27, 2025 $ 0.058 February 12, 2025 $ 15,351 February 26, 2025 May 5, 2025 $ 0.065 May 23, 2025 $ 17,092 June 5, 2025 July 28, 2025 $ 0.065 August 15, 2025 $ 17,047 August 29, 2025 November 10, 2025 $ 0.065 December 1, 2025 N/A December 12, 2025 Income Taxes We evaluate the realizability of our deferred tax assets by assessing the valuation allowance and adjust the allowance, if necessary.
On October 26, 2022, we entered into a Third Amended and Restated Credit Agreement that provides for an additional $500 million senior secured term loan facility (the "New Term Loan Facility") increasing our total borrowing capacity to $1.55 billion. On January 23, 2023, we drew the entire amount of the New Term Loan Facility to partially finance the RPS acquisition.
On October 26, 2022, we entered into a Third Amended and Restated Credit 38 Agreement (“Third Amended Credit Agreement”) that provided for an additional $500 million senior secured term loan facility ("Third Term Loan Facility") increasing our total borrowing capacity to $1.55 billion.
Highlighted below are the accounting policies that management considers most critical to investors' understanding of our financial results and condition, and that require complex judgments by management. 45 Revenue Recognition and Contract Costs To determine the proper revenue recognition method for contracts under Accounting Standards Codification Topic 606, "Revenue from Contracts with Customers", we evaluate whether multiple contracts should be combined and accounted for as a single contract and whether the combined or single contract should be accounted for as having more than one performance obligation.
Revenue Recognition and Contract Costs To determine the proper revenue recognition method for contracts under Accounting Standards Codification Topic 606, "Revenue from Contracts with Customers", we evaluate whether multiple contracts should be combined and accounted for as a single contract and whether the combined or single contract should be accounted for as having more than one performance obligation.
Fiscal Year Ended September 29, 2024 October 1, 2023 Change $ % ($ in thousands) Income tax expense $ 130,023 $ 127,526 $ 2,497 2.0% The effective tax rates for fiscal 2024 and 2023 were 28.1% and 31.8%, respectively.
Fiscal Year Ended September 28, 2025 September 29, 2024 Change $ % ($ in thousands) Income tax expense $ 129,668 $ 130,023 $ (355) (0.3)% The effective tax rates for fiscal 2025 and 2024 were 34.3% and 28.1%, respectively.
The Amended Revolving Credit Facility includes a $100 million sublimit for the issuance of standby letters of credit, a $20 million sublimit for swingline loans and a $300 million sublimit for multicurrency borrowings and letters of credit. The entire Amended Term Loan Facility was drawn on February 18, 2022.
The Amended Revolving Credit Facility includes a $100 million sublimit for the issuance of standby letters of credit, a $20 million sublimit for swingline loans, and a $400 million sublimit for multi-currency borrowings and letters of credit. The entire 3Y Term Loan Facility and 5Y Term Loan Facility were drawn on May 5, 2025.
The remaining proceeds were used to prepay and terminate the $234.4 million outstanding under the Amended Term Loan Facility, to prepay $89.4 million outstanding under the New Term Loan Facility and to pay down borrowings of $185.0 million under the Amended Revolving Credit Facility.
The remaining proceeds were used to prepay and terminate the $234.4 million outstanding under the Second Term Loan Facility, to prepay $89.4 million outstanding under the Third Term Loan Facility and to pay down borrowings of $185.0 million under the Second Revolving Credit Facility. See Note 9, "Long-Term Debt" of the "Notes to Consolidated Financial Statements" for further discussion.
On November 11, 2024, our Board of Directors declared a quarterly cash dividend of $0.058 per share payable on December 13, 2024 to stockholders of record as of the close of business on November 27, 2024. Cash and Cash Equivalents.
Subsequent Events. On November 10, 2025, our Board of Directors declared a quarterly cash dividend of $0.065 p er share payable on December 12, 2025 to stockholders of record as of the close of business on December 1, 2025. Cash and Cash Equivalents.
The New Term Loan Facility is not subject to any amortization payments of principal and matures in January 2026. On February 18, 2022, we entered into Amendment No. 2 to our Second Amended and Restated Credit Agreement (“Amended Credit Agreement”) with a total borrowing capacity of $1.05 billion that will mature in February 2027.
On February 18, 2022, we entered into Amendment No. 2 to the Second Amended and Restated Credit Agreement (“Second Amended Credit Agreement”) with a total borrowing capacity of $1.05 billion that was scheduled to mature in February 2027.
Both EPS and adjusted EPS were calculated using diluted weighted-average common shares outstanding for the respective periods as reflected in our consolidated statements of income.
We applied the relevant marginal statutory tax rate based on the nature of 35 the adjustment and the tax jurisdiction in which it occurred. Both EPS and adjusted EPS were calculated using the diluted weighted-average common shares outstanding for the respective periods as reflected in our Consolidated Statements of Income.
NM = not meaningful Our revenue growth in fiscal 2024 reflects increases in both of our reportable segments. Our GSG segment's revenue and revenue, net of subcontractor costs, increased $324.5 million, or 15.0%, and $274.5 million, or 16.8%, respectively, in fiscal 2024 compar ed to last y ear.
NM = not meaningful Our revenue growth in fiscal 2025 reflects increases in both our GSG and CIG reportable segments. For fiscal 2025, our GSG segment's revenue and revenue, net of subcontractor costs, increased $190.6 million, or 7.7%, and $219.8 million, or 11.5%, respectively, compared to last year.
In December 2021, the Organisation for Economic Cooperation and Development ("OECD") released Pillar Two Model Rules (also referred to as the global minimum tax or Global Anti-Base Erosion "GloBE" rules), which were designed to ensure large multinational enterprises pay a minimum 15 percent level of tax on the income arising in each jurisdiction in which they operate.
Excluding the impact of the excess tax benefits on share-based payments, the goodwill impairment and the legal contingency charge in fiscal 2025 and the settlement amounts in fiscal 2024, our effective tax rates in fiscal 2025 and 2024 were 27.4% and 28.1%, respectively. 36 In December 2021, the OECD released Pillar Two Model Rules (also referred to as the global minimum tax or Global Anti-Base Erosion "GloBE" rules), which were designed to ensure large multinational enterprises pay a minimum 15% level of tax on the income arising in each jurisdiction in which they operate.
The contingent earn-out arrangements are based upon our valuations of the acquired companies and reduce the risk of overpaying for acquisitions if the projected financial results are not achieved. The fair values of these earn-out arrangements are included as part of the purchase price of the acquired companies on their respective acquisition dates.
The fair values of these earn-out arrangements are included as part of the purchase price of the acquired companies on their respective acquisition dates.
As of October 1, 2023, $560.8 million of the Convertible Notes was included in long-term debt in our consolidated balance sheets, which is net of $14.2 million of unamortized debt issuance costs. The net proceeds from the Convertible Notes were $560.5 million, $51.8 million of which were used to purchase related capped call transactions on the issue date.
The net proceeds from the Convertible Notes were $560.5 million, $51.8 million of which were used to purchase related capped call transactions on the issue date.
Based on future operating results in certain jurisdictions, it is unlikely that the current valuation allowance positions of those jurisdictions could be adjusted in the next 12 months.
Based on future operating results in certain jurisdictions, it is unlikely that the current valuation allowance positions of those jurisdictions could be adjusted in the next 12 months. At the end of fiscal 2025 and 2024, the liability for income taxes associated with uncertain tax positions was $52.8 million and $50.1 million, respectively.
The effective tax rate applied to the adjustments to EPS to arrive at adjusted EPS was 17% and 26% for fisc al 2024 and 2023, r espectively. The fiscal 2024 rate reflects certain integration costs/losses that were not tax deductible.
The effective tax rate applied to the remaining adjustments in fiscal 2025 to arrive at the adjusted earnings per share ("EPS") w as 24.6%. Th e effective tax rate applied to the adjustments to EPS to arrive at adjusted EPS in fiscal 2024 was 17%, which reflects certain integration costs/losses that were not tax deductible.
The table below presents our revenue by client sector (amounts in thousands): Fiscal Year Ended September 29, 2024 October 1, 2023 Change $ % Client sector U.S. federal government (1) $ 1,675,996 $ 1,387,101 $ 288,895 20.8% U.S. state and local government 613,185 607,074 6,111 1.0 U.S. commercial 909,642 869,460 40,182 4.6 International (2) 1,999,856 1,658,915 340,941 20.6 Total $ 5,198,679 $ 4,522,550 $ 676,129 15.0% (1) Includes revenue generated under U.S. federal government contracts performed outside the United States.
The table below presents our revenue by client sector (amounts in thousands): Fiscal Year Ended September 28, 2025 September 29, 2024 Change $ % Client sector U.S. federal government (1) $ 1,718,831 $ 1,675,996 $ 42,835 2.6% U.S. state and local government 789,968 613,185 176,783 28.8 U.S. commercial 899,298 909,642 (10,344) (1.1) International (2) 2,034,493 1,999,856 34,637 1.7 Total $ 5,442,590 $ 5,198,679 $ 243,911 4.7% (1) Includes revenue generated under U.S. federal government contracts performed outside the United States.
In fiscal 2024, our revenue increased 15.0% compared to fiscal 2023 primarily reflecting increased activity in our U.S. federal and international client sectors. This revenue growth includes $332 million from our recent acquisitions, that did not have comparable revenue for all of fiscal 2023. Excluding the impact of these acquisitions, our revenue increased 7.6% compared to the prior-year period.
Our revenue growth of 4.7% i n fiscal 2025 was primarily due to increased activity in the U.S. state and local and U.S. federal government client sectors. The overall growth includes $80 million from our recent acquisitions, that did not have comparable revenue for fiscal 2024.
We expect revenue growth to continue in our U.S. commercial business in fiscal 2025.
We expect our U.S. commercial revenue, excluding renewable energy, to grow in fiscal 2026.
Excluding the lease impairment charge last year, our operating margin, based on revenue, net of subcontractor costs, improved approximately 170 basis points from 11.9% in fiscal 2023 to 13.6% in this fiscal year. The improved operating margin was primarily due to our increased focus on high-end consulting services, and improved project execution, particularly in the RPS operations.
Excluding the integration costs last year, our operating margin, based on revenue, net of subcontractor costs, improved approximately 50 basis points to 14.3% in fiscal 2025 37 compared to 13.8% in fiscal 2024. The improved operating margin was primarily due to our continued focus on high-end consulting services and improved project execution. FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES Capital Requirements.
Excluding our disaster response activities, our U.S. state and local government revenue increased 12.4% in fiscal 2024 compared to fiscal 2023, primarily reflecting continued increased revenue from advanced water treatment projects. Most of our work for U.S. state and local governments relates to critical water and environmental programs, which we expect to continue to grow in fiscal 2025. U.S.
Most of our work for the U.S. state and local governments relates to critical water and environmental programs, which we expect to continue to grow in fiscal 2026. 33 U.S.
At September 29, 2024, we had $499.3 million of available credit under the Amended Revolving Credit Facility, all of which could be borrowed without a violation of our debt covenants. Commitment fees related to our revolving credit facilities were $0.8 million, $0.6 million, and $0.7 million for fiscal year 2024, 2023 and 2022, respectively.
In addition, we had $0.7 million in standby letters of credit under the Amended Credit Agreement. At September 28, 2025, we had $599.3 million of available credit under the Amended Revolving Credit Facility, all of which could be borrowed without a violation of our debt covenants.
For fiscal 2024, our revenue growth also includes approximately $128 million of revenue from our recent acquisitions, that did not have comparable revenue for all of fiscal 2023. Conversely, our revenue growth also includes decreased revenue from disaster response activities, which was approximately $46 million lower in fiscal 2024 compared to fiscal 2023.
The revenue growth also includes approximately $35 million of revenue from recent acquisitions that did not have comparable revenue in fiscal 2024.
On October 5, 2021, our Board of Directors authorized a new stock repurchase program under which we could repurchase up to $400 million of our common stock. In fiscal 2024 and 2023, we did not repurchase any shares of our common stock. At fiscal 2024 year-end, we had a remaining balance of $347.8 million under our stock repurchase program.
In fiscal 2024 and 2023, we did not repurchase any shares of our common stock. At fiscal 2025 year-end, we had a remaining balance of $597.8 million under our stock repurchase program. We declared and paid common stock dividends totaling $65.0 million, or $0.246 per share, in fiscal 2025 compared to $58.8 million, or $0.220 per share, in fiscal 2024.
The following tables summarize information regarding our cash and cash equivalents (amounts in thousands): Fiscal Year Ended September 29, 2024 October 1, 2023 Change $ % Cash and cash equivalents $ 232,689 $ 168,831 $ 63,858 37.8% 42 Fiscal Year Ended September 29, 2024 October 1, 2023 Change $ % Net cash provided by (used in): Operating activities $ 358,708 $ 368,463 $ (9,755) (2.6)% Investing activities (111,043) (771,199) 660,156 85.6 Financing activities (191,380) 382,380 (573,760) (150.0) Effect of exchange rate changes 7,573 4,093 3,480 85.0 Net increase (decrease) in cash and cash equivalents $ 63,858 $ (16,263) $ 80,121 492.7% Operating Activities.
The following tables summarize information regarding our cash and cash equivalents (amounts in thousands): Fiscal Year Ended September 28, 2025 September 29, 2024 Change $ % Cash and cash equivalents $ 167,459 $ 232,689 $ (65,230) (28.0)% Fiscal Year Ended September 28, 2025 September 29, 2024 Change $ % Net cash provided by (used in): Operating activities $ 457,685 $ 358,708 $ 98,977 27.6% Investing activities (106,754) (111,043) 4,289 3.9 Financing activities (410,244) (191,380) (218,864) (114.4) Effect of exchange rate changes (5,004) 7,573 (12,577) (166.1) Net increase (decrease) in cash and cash equivalents $ (64,317) $ 63,858 $ (128,175) (200.7)% Operating Activities.
Income tax expense was reduced by $4.5 millio n and $4.6 million of excess tax benefits on share-based payments in fiscal 2024 and 2023, respectively. In addition, income tax expense in fiscal 2024 included $4.2 million of expense for the settlement of various tax positions that were under audit for fiscal years 2011 through 2021.
Furthermore, income tax expense in fiscal 2024 included $4.2 million of expense for the settlement of various tax positions that were under audit for fiscal ye ars 2011 throug h 2021.
To a lesser extent, the decline in our net cash provided by financing activities was due to $25 million more cash used for contingent earn-out payments in fiscal 2024 compared to last year. Debt Financing.
The overall increase in cash used in financing activities was partially offset by a $31 million decrease in payments for contingent consideration in fiscal 2025 compared to fiscal 2024. Debt Financing.
We expect growth in our international work to continue in fiscal 2025. 35 RESULTS OF OPERATIONS Fiscal 2024 Compared to Fiscal 2023 Consolidated Results of Operations Fiscal Year Ended September 29, 2024 October 1, 2023 Change $ % ($ in thousands, except per share data) Revenue $ 5,198,679 $ 4,522,550 $ 676,129 15.0% Subcontractor costs (876,817) (771,461) (105,356) (13.7) Revenue, net of subcontractor costs (1) 4,321,862 3,751,089 570,773 15.2 Other costs of revenue (3,455,422) (3,026,060) (429,362) (14.2) Gross profit 866,440 725,029 141,411 19.5 Selling, general and administrative expenses (356,024) (305,107) (50,917) (16.7) Acquisition and integration expenses (7,138) (33,169) 26,031 78.5 Right-of-use operating lease asset impairment — (16,385) 16,385 NM Contingent consideration – fair value adjustments (2,541) (12,255) 9,714 79.3 Income from operations 500,737 358,113 142,624 39.8 Interest expense – net (37,271) (46,537) 9,266 19.9 Other non-operating income — 89,402 (89,402) NM Income before income tax expense 463,466 400,978 62,488 15.6 Income tax expense (130,023) (127,526) (2,497) (2.0) Net income 333,443 273,452 59,991 21.9 Net income attributable to noncontrolling interests (61) (32) (29) (90.6) Net income attributable to Tetra Tech $ 333,382 $ 273,420 $ 59,962 21.9 Diluted earnings per share $ 1.23 $ 1.02 $ 0.21 20.6% (1) We believe that the presentation of "Revenue, net of subcontractor costs", which is a non-U.S.
We expect the growth in our international work to continue in fiscal 2026. 34 RESULTS OF OPERATIONS Fiscal 2025 Compared to Fiscal 2024 Consolidated Results of Operations Fiscal Year Ended September 28, 2025 September 29, 2024 Change $ % ($ in thousands, except per share data) Revenue $ 5,442,590 $ 5,198,679 $ 243,911 4.7% Subcontractor costs (825,230) (876,817) 51,587 5.9 Revenue, net of subcontractor costs (1) 4,617,360 4,321,862 295,498 6.8 Other costs of revenue (3,656,016) (3,455,422) (200,594) (5.8) Gross profit 961,344 866,440 94,904 11.0 Selling, general and administrative expenses (357,737) (356,024) (1,713) (0.5) Legal contingency costs (115,000) — (115,000) NM Impairment of goodwill (92,416) — (92,416) NM Acquisition and integration expenses — (7,138) 7,138 NM Contingent consideration – fair value adjustments 12,228 (2,541) 14,769 581.2 Income from operations 408,419 500,737 (92,318) (18.4) Interest expense – net (30,802) (37,271) 6,469 17.4 Income before income tax expense 377,617 463,466 (85,849) (18.5) Income tax expense (129,668) (130,023) 355 0.3 Net income 247,949 333,443 (85,494) (25.6) Net income attributable to noncontrolling interests (225) (61) (164) (268.9) Net income attributable to Tetra Tech $ 247,724 $ 333,382 $ (85,658) (25.7) Diluted earnings per share $ 0.93 $ 1.23 $ (0.30) (24.4)% (1) We believe that the presentation of "Revenue, net of subcontractor costs", which is a non-U.S.
In addition, income tax expense was reduced by $4.6 million and $10.3 million of excess tax benefits on share-based payments in fiscal 2023 and 2022, respectively.
Income tax expense was reduced by $1.6 million and $4.5 million of excess tax benefits on share-based payments in fiscal 2025 and 2024, respectively. In addition, in fiscal 2025, we recognized a $92.4 million goodwill impairment as described in Note 6, “Goodwill and Intangible Assets” of the “Notes to Consolidated Financial Statements”.
See Note 9, "Long-Term Debt" of the "Notes to Consolidated Financial Statements" in Item 8 for further discussion. At fiscal 2024 year-end, we had $250 million in outstanding borrowings under the Amended Credit Agreement, which consisted of $250 million under the New Term Loan Facility and no borrowings under the Amended Revolving Credit Facility.
At fiscal 2025 year-end, we had $200 million in outstanding borrowings under the Amended Credit Agreement, which consisted of $200 million under the 5Y Term Loan Facility and no borrowings under the Amended Revolving Credit Facility. The weighted-average interest rate of the outstanding borrowings under the credit facilities during fiscal 2025 was 5.63%.
Excluding the acquisition and integration expenses, ROU asset impairment, earn-out losses and the ERC's, our adjusted operating income increased $86.0 million, or 25.7% in fiscal 2023 compared to fiscal 2022. These increases reflect improved results in both GSG and CIG segments, which are described below under "Government Services Group" and "Commercial/International Group", respectively.
GAAP financial measure Excluding the non-recurring charges and the earn-out gains, our operating income increased $93.2 million, or 18.3% in fiscal 2025 compared to last year. The increase reflects improved results in both of our reportable segments, which are described below under "Government Services Group" and "Commercial/International Services Group", respectively.
GAAP adjusted results, which exclude acquisition and integration costs and adjustments to contingent consideration liabilities in fiscal 2024. Our fiscal 2023 adjusted results exclude acquisition and integrations costs related to the RPS acquisition and related lease impairment charge and adjustments to contingent consideration liabilities.
Our fiscal 2024 adjusted results exclude acquisition and integration costs and adjustments to contingent consideration liabilities. We determined that there is no tax benefit in fiscal 2025 for $31.3 million of the legal contingency charge and $58.3 million of the goodwill impairment charge.
Excluding the acquisitions, increased activity in Ukraine and the partially offsetting lower disaster response revenue, our revenue increased 6.7% in fiscal 2024 compared to last year. Operating income increased primarily due to the aforementioned revenue growth. Additionally, our fiscal 2023 operating income was reduced by $6.8 million of the aforementioned lease impairment charge.
The growth in the United Kingdom was partially offset by lower infrastructure activities in Australia. Our operating income increased due to the aforementioned revenue growth. Additionally, our operating income in fiscal 2024 was reduced by $3.6 million of integration costs related to RPS.
Segment Results of Operations Government Services Group ("GSG") Fiscal Year Ended September 29, 2024 October 1, 2023 Change $ % ($ in thousands) Revenue $ 2,483,355 $ 2,158,889 $ 324,466 15.0% Subcontractor costs (573,377) (523,449) (49,928) (9.5) Revenue, net of subcontractor costs $ 1,909,978 $ 1,635,440 $ 274,538 16.8 Income from operations $ 281,026 $ 231,762 $ 49,264 21.3% For fiscal 2024, the revenue growth of 15.0% compared to fiscal 2023 primarily reflects higher U.S. federal government activities related to international development, U.S. state and local government activities related to advanced water treatment and contributions from our recent acquisitions.
Segment Results of Operations Government Services Group ("GSG") Fiscal Year Ended September 28, 2025 September 29, 2024 Change $ % ($ in thousands) Revenue $ 2,673,909 $ 2,483,355 $ 190,554 7.7% Subcontractor costs (544,127) (573,377) 29,250 5.1 Revenue, net of subcontractor costs $ 2,129,782 $ 1,909,978 $ 219,804 11.5% Income from operations $ 340,551 $ 281,026 $ 59,525 21.2% The revenue growth in fiscal 2025 of 7.7% compared to last fiscal year primarily reflects increases in the previously described U.S. government activities related to disaster response.
This revenue growth includes approximately $182 million of revenue from our recent acquisitions, that did not have comparable revenue for all of last year. Excluding the impact of these acquisitions, our revenue increased 9.6% compared to fiscal 2023.
Excluding the impact of these acquisitions, our revenue increased 3.2% compared to last fiscal year.
We had no reporting units that had estimated fair values that exceeded their carrying values by less than 72%. Contingent Consideration Certain of our acquisition agreements include contingent earn-out arrangements, which are generally based on the achievement of future operating income thresholds.
Contingent Consideration Certain of our acquisition agreements include contingent earn-out arrangements, which are generally based on the achievement of future operating income thresholds. The contingent earn-out arrangements are based upon our valuations of the acquired companies and reduce the risk of overpaying for acquisitions if the projected financial results are not achieved.
At the end of fiscal 2024 and 2023, the liability for income taxes associated with uncertain tax positions was $50.1 million and $62.0 million, respectively. 44 It is reasonably possible that the amount of the unrecognized benefit with respect to certain of our unrecognized tax positions may not significantly decrease within the next 12 months.
It is reasonably possible that the amount of the unrecognized benefit with respect to certain of our unrecognized tax positions may significantly decrease within the next 12 months. These liabilities represent our current estimates of the additional tax liabilities that we may be assessed when the related audits are concluded.
State and Local Government Fiscal Year Ended September 29, 2024 October 1, 2023 Change $ % ($ in thousands) Revenue $ 613,185 $ 607,074 $ 6,111 1.0% 34 In fiscal 2024, our U.S. state and local government revenue increased compared to last fiscal year due to continued investment by our clients in clean drinking water; this growth was offset by lower disaster response revenue of approximately $46 million primarily due to the wind-down of hurricane related projects in the southeastern U.S. last year.
Excluding the disaster response work, our U.S. state and local government revenue increased 13.3% in fiscal 2025 compared to last fiscal year. This growth was due to continued investment by our clients in water infrastructure, including digital water automation.
Commercial Fiscal Year Ended September 29, 2024 October 1, 2023 Change $ % ($ in thousands) Revenue $ 909,642 $ 869,460 $ 40,182 4.6% Our U.S. commercial revenue growth of 4.6% this fiscal year was primarily due to increased planning and permitting projects related to renewable energy generation and transmission.
Commercial Fiscal Year Ended September 28, 2025 September 29, 2024 Change $ % ($ in thousands) Revenue $ 899,298 $ 909,642 $ (10,344) (1.1)% Our U.S. commercial revenue declined 1.1% in fiscal 2025 primarily due to lower activity related t o renewable ener gy, partially offset by increased environmental services compared to fiscal 2024.
Excluding last year's lease impairment charge, our operating margin, based on revenue, net of subcontractor costs, increased to 14.7% in fiscal 2024 compared to 14.6% in fiscal 2023. 38 Commercial/International Services Group ("CIG") Fiscal Year Ended September 29, 2024 October 1, 2023 Change $ % ($ in thousands) Revenue $ 2,786,731 $ 2,424,649 $ 362,082 14.9% Subcontractor costs (374,847) (309,000) (65,847) (21.3) Revenue, net of subcontractor costs $ 2,411,884 $ 2,115,649 $ 296,235 14.0 Income from operations $ 328,510 $ 243,750 $ 84,760 34.8% For fiscal 2024, the revenue growth of 14.9% compared to fiscal 2023 primarily reflects increased activities related to renewable energy and international sustainable infrastructure in addition to contributions from acquisitions.
Commercial/International Services Group ("CIG") Fiscal Year Ended September 28, 2025 September 29, 2024 Change $ % ($ in thousands) Revenue $ 2,844,647 $ 2,786,731 $ 57,916 2.1% Subcontractor costs (357,069) (374,847) 17,778 4.7 Revenue, net of subcontractor costs $ 2,487,578 $ 2,411,884 $ 75,694 3.1% Income from operations $ 356,865 $ 328,510 $ 28,355 8.6% The revenue growth in fiscal 2025 of 2.1% compared to fiscal 2024, includes a 12.3% increase in our operations in the United Kingdom reflecting higher demand for our water planning and design services.
Both EPS and adjusted EPS were calculated using diluted weighted-average common shares outstanding for the respective periods as reflected in our consolidated statem ents of income. 36 Fiscal Year Ended September 29, 2024 October 1, 2023 Change $ % ($ in thousands, except per share data) Income from operations $ 500,737 $ 358,113 $ 142,624 39.8% Acquisition and integration expenses 7,138 33,169 (26,031) (78.5) Right-of-use operating lease asset impairment — 16,385 (16,385) NM Earn-out adjustments 2,541 12,255 (9,714) (79.3) Adjusted income from operations (1) $ 510,416 $ 419,922 $ 90,494 21.6% EPS $ 1.23 $ 1.02 $ 0.21 20.6% Acquisition and integration expenses 0.02 0.11 (0.09) (81.8) Right-of-use operating lease asset impairment — 0.04 (0.04) NM Earn-out adjustments 0.01 0.04 (0.03) (75.0) Foreign exchange forward contract gain — (0.25) 0.25 NM Non-recurring tax items — 0.08 (0.08) NM Adjusted EPS (1) $ 1.26 $ 1.04 $ 0.22 21.2% NM = not meaningful (1) Non-U.S.
Fiscal Year Ended September 28, 2025 September 29, 2024 Change $ % ($ in thousands, except per share data) Income from operations $ 408,419 $ 500,737 $ (92,318) (18.4)% Legal contingency costs 115,000 — 115,000 NM Impairment of goodwill 92,416 — 92,416 NM Acquisition and integration expenses — 7,138 (7,138) NM Earn-out adjustments (12,228) 2,541 (14,769) (581.2) Adjusted income from operations (1) $ 603,607 $ 510,416 $ 93,191 18.3% EPS $ 0.93 $ 1.23 $ (0.30) (24.4)% Legal contingency costs 0.35 — 0.35 NM Impairment of goodwill 0.31 — 0.31 NM Acquisition and integration expenses — 0.02 (0.02) NM Earn-out adjustments (0.03) 0.01 (0.04) (400.0) Adjusted EPS (1) $ 1.56 $ 1.26 $ 0.30 23.8% NM = not meaningful (1) Non-U.S.
Fiscal Year Ended September 29, 2024 October 1, 2023 Change $ % ($ in thousands) Interest expense – net $ 37,271 $ 46,537 $ (9,266) (19.9)% Net interest expense decreased in fiscal 2024 compared to last fiscal year primarily due to the lower borrowing costs from our convertible notes (the "Convertible Notes") issued in the fourth quarter of fiscal 2023, which we used to refinance the existing higher-cost debt.
Fiscal Year Ended September 28, 2025 September 29, 2024 Change $ % ($ in thousands) Interest expense – net $ 30,802 $ 37,271 $ (6,469) (17.4)% Net interest expense decreased in fiscal 2025 primarily due to lower average interest rates and higher interest income compared to fiscal 2024.
Removed
Federal Government Fiscal Year Ended September 29, 2024 October 1, 2023 Change $ % ($ in thousands) Revenue $ 1,675,996 $ 1,387,101 $ 288,895 20.8% Our 20.8% growth in U.S. federal revenue in fiscal 2024 compared to fiscal 2023 primarily reflects increased international development activity and increased environmental activity for both civilian and defense agencies.
Added
The discussion and analysis for fiscal 2024 compared to fiscal 2023 can be found under Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the fiscal year ended September 29, 2024. 32 OVERVIEW OF RESULTS AND BUSINESS TRENDS General.
Removed
The growth in our international development activity primarily relates to activity in Ukraine to support energy security and other humanitarian needs. In fiscal 2024, our international development revenue increased approximat ely $122 million compa red to fiscal 2023.
Added
Federal Government Fiscal Year Ended September 28, 2025 September 29, 2024 Change $ % ($ in thousands) Revenue $ 1,718,831 $ 1,675,996 $ 42,835 2.6% Our U.S . federal government sector grew 2.6% in fiscal 2025 primarily due to increased disaster response work related to the Palisades and Eaton fires in Southern California, which occurred in early January 2025.
Removed
The overall revenue growth also includes approximately $115 million of revenue from our recent acquisitions, that did not have comparable revenue for all la st year. We expect our U.S. federal government revenue to continue to grow in fiscal 2025.
Added
On January 20, 2025, President Trump signed Executive Order 14169, titled "Reevaluating and Realigning United States Foreign Aid", which initiated a 90-day pause on all U.S. foreign development assistance programs to assess their alignment with U.S. foreign policy objectives with few exemptions. Following a six-week review, on February 27, 2025, U.S.
Removed
Approximately $1 trillion in new U.S. federal funding passed in 2021 through the Infrastructure Investment and Jobs Act, the Inflation Reduction Act and the CHIPS and Science Act. Each of these programs includes substantial planned investments in our key end markets including water, environment and sustainable infrastructure over the next five to ten years. U.S.
Added
Secretary of State Rubio announced the cancellation of 83% of USAID programs, totaling approximately 5,200 contracts. Subsequently, we were notified that virtually all of our contracts with USAID were terminated for convenience with immediate effect. In fiscal 2025, our U.S. federal government revenue included $576.4 million from USAID programs compared to $677.2 million last fiscal year.
Removed
International Fiscal Year Ended September 29, 2024 October 1, 2023 Change $ % ($ in thousands) Revenue 1,999,856 $ 1,658,915 $ 340,941 20.6% For fiscal 2024, our international revenue increased 20.6% compared to last year primarily due to higher renewable energy revenue and commercial activities related to an increased focus on sustainability in addition to contributions from acquisitions.
Added
We currently expect no significant USAID revenue in fiscal 2026. However, we do expect our U.S. federal revenue to grow next fiscal year, excluding USAID and disaster response activities. U.S.
Removed
Our adjusted earnings per share ("EPS") for fiscal 2023 also excludes non-operating gains on a foreign exchange contract of $89.4 million and non-recurring tax expense items. The foreign exchange gain is reported as "Other non-operating income" in our consolidated statements of income.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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We are exposed to interest rate risk under our Amended Credit Agreement. We can borrow, at our option, under both the Amended Term Loan Facility and Amended Revolving Credit Facility.
We are exposed to interest rate risk under our Amended Credit Agreement. We can borrow, at our option, under the 5Y Term Loan Facility and Amended Revolving Credit Facility.
We may borrow on the Amended Revolving Credit Facility, at our option, at either (a) a Eurocurrency rate plus a margin that ranges from 1.000% to 1.875% per annum, or (b) a base rate for loans in U.S. dollars (the highest of the U.S. federal funds rate plus 0.50% per annum, the bank’s prime rate or the SOFR rate plus 1.00%) plus a margin that ranges from 0% to 0.875% per annum.
We may borrow on the Amended Revolving Credit Facility, at our option, at either (a) a benchmark rate plus a margin that ranges from 1.000% to 1.750% per annum, or (b) a base rate for loans in U.S. dollars (the highest of the U.S. federal funds rate plus 0.50% per annum, the bank’s prime rate or the SOFR rate plus 1.00%, plus a margin that ranges from 0% to 0.75% per annum).
We attempt to minimize our exposure to these fluctuations by matching revenue and expenses in the same currency for our contrac ts. We reported $1.8 million of foreign currency losses in fiscal 2024 in “Selling, general and administrative expenses” on our consolidated statement of income. The impact of foreign currency was immaterial in fiscal 2023.
We attempt to minimize our exposure to these fluctuations by matching revenue and expenses in the same currency for our contrac ts. We reported $2.5 million and $1.8 million of foreign currency losses in fiscal 2025 and 2024, respectively, in “Selling, general and administrative expenses” on our consolidated statements of income.
For fiscal 2024 and 2023, 38.5% and 36.7% of our consolidated revenue, respectively, was generated by our international business. For fiscal 2024, the effect of foreign exchange rate translation on the consolidated balance sheets was an increase in equity of $115.1 million compared to an increase in equity of $12.6 million in fiscal 2023.
For fiscal 2025 and 2024, 37.4% and 38.5% of our consolidated revenue, respectively, was generated by our international business. For fiscal 2025, the effect of foreign exchange rate translation on the consolidated balance sheets was a decrease in equity of $17.2 million compared to an increase in equity of $115.1 million in fiscal 2024.
At September 29, 2024, we had $250 million in outstanding borrowings under the Amended Credit Agreement, which was consisted of $250 million under the New Term Loan Facility, and no borrowings under the Amended Revolving Credit Facility. The year-to-date weighted-average interest rate of the outstanding borrowings during fiscal 2024 was 6.70%.
At September 28, 2025, we had $200 million in outstanding borrowings under the Amended Credit Agreement, which consisted of $200 million under the 5Y Term Loan Facility and no borrowings under the Amended Revolving Credit Facility. The year-to-date weighted-average interest rate of the outstanding borrowings under the Amended Credit Agreement during fiscal 2025 was 5.63%.
In each case, the applicable margin is based on our Consolidated Leverage Ratio, calculated quarterly. The Amended Term Loan Facility is subject to the same interest rate provisions. Borrowings at the base rate have no designated term and may be repaid without penalty any time prior to the Facility’s maturity date.
In each case, the applicable margin is based on our Consolidated Leverage Ratio, calculated quarterly. The 5Y Term Loan Facility is subject to the same interest rate provisions. The Amended Credit Agreement ex pires on May 5, 2030, or earlier at our discretion upon payment in full of loans and other obligations.
Removed
Borrowings at a SOFR rate have a term no less than 30 days and no greater than 180 days and may be prepaid without penalty.
Added
These amounts were recognized as an adjustment to equit y through other comprehensive income. 44
Removed
Typically, at the end of such term, such borrowings may be rolled over at our discretion into either a borrowing at the base rate or a borrowing at a SOFR rate with similar terms, not to exceed the maturity date of the Facility. The Facility matures on February 18, 2027.
Removed
These amounts were recognized as an adjustment to equity through other comprehensive income. In the fourth quarter of fiscal 2022, we entered into a forward contract to acquire GBP 714.0 million at a rate of 1.0852 for a total of USD 774.8 million that was integrated with our plan to acquire RPS. This contract matured on December 30, 2022.
Removed
On December 28, 2022, we entered into an extension of the integrated forward contract to acquire GBP 714.0 million at a rate of 1.086 for a total of USD 775.4 million, extending the maturity date to January 23, 2023, the closing date of the RPS acquisition.
Removed
Although an effective economic hedge of our foreign exchange risk related to this transaction, the forward contract did not qualify for hedge accounting. As a result, the forward contract was marked-to-market with changes in fair value recognized in earnings each period.
Removed
The intrinsic value of the forward contract was immaterial at inception as the GBP/USD spot and forward exchange rates were essentially the same. The fair value of the forward contract at October 2, 2022 was $19.9 million, and an unrealized gain of the same amount was recognized in our fourth quarter of fiscal 2022 results.
Removed
On January 23, 2023, the forward contract was settled for cash proceeds of $109.3 million and we recognized additional gains of $89.4 million in fiscal 2023. All gains related to this transaction were reported in “Other non-operating income" on our consolidated income statements for the respective periods. 49

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