Tetra Tech Awarded $37.5 Million USAID Urban Water, Sanitation, and Solid Waste Management Services Contract

Rhea-AI Summary

Tetra Tech, Inc. (NASDAQ: TTEK) has been awarded a $37.5 million contract by the U.S. Agency for International Development (USAID) to improve urban water, sanitation, and solid waste management services in Southern Africa. The 5-year contract focuses on the Limpopo River basin, which is facing challenges due to rapid population growth and climate variability.

Through the USAID Resilient Cities Limpopo program, Tetra Tech will:

• Partner with local governments and regional stakeholders
• Develop data-driven, climate-resilient approaches to enhance public service delivery
• Leverage private sector investment to strengthen waste management operations
• Promote sustainable recycling practices

This contract builds on Tetra Tech's 40-year history of partnering with USAID to improve access to safe, sustainable water supplies in developing countries.

Positive

• Secured a $37.5 million contract from USAID
• 5-year contract duration provides stable revenue stream
• Expands Tetra Tech's presence in Southern Africa
• Leverages company's expertise in water and waste management
• Aligns with long-term partnership with USAID spanning over 40 years

Negative

• None.

Insights

Environmental Engineer

This contract represents a significant opportunity for Tetra Tech to leverage its expertise in water management and urban resilience. The $37.5 million award over 5 years will bolster the company's revenue stream in the Environmental and Infrastructure segment. The focus on climate-resilient approaches aligns with growing global demand for sustainable urban solutions.

Key points to consider:

• The contract's scope addresses critical infrastructure needs in a rapidly growing region, potentially leading to follow-on work.
• Tetra Tech's long-standing relationship with USAID (40+ years) demonstrates its strong position in the international development sector.
• The project's emphasis on data-driven solutions and private sector engagement could yield innovative approaches that Tetra Tech can replicate in other markets.

While positive, this contract alone is not transformative given Tetra Tech's $13.1 billion market cap. However, it reinforces the company's strategic focus on climate change adaptation and urban resilience, areas likely to see increased investment globally.

Financial Analyst

This $37.5 million contract win is a positive development for Tetra Tech, though its impact on the company's overall financial picture is moderate. To put it in perspective:

• The contract value represents approximately 0.29% of Tetra Tech's current market capitalization.
• Assuming even distribution over 5 years, it would contribute about $7.5 million annually to revenue, a small but steady income stream.
• Tetra Tech's trailing twelve-month revenue is approximately $3.8 billion, making this contract's annual contribution about 0.2% of current revenue.

While not a game-changer, this contract reinforces Tetra Tech's strong position in the environmental consulting sector and its ability to secure long-term government contracts. It also aligns with the company's strategic focus on high-end consulting services in water and environmental management, which typically carry higher margins. Investors should view this as a positive indicator of Tetra Tech's continued competitiveness in its core markets.

PASADENA, Calif.--(BUSINESS WIRE)-- Tetra Tech, Inc. (NASDAQ: TTEK), a leading provider of high-end consulting and engineering services, announced today that the U.S. Agency for International Development (USAID) has awarded the Company a $37.5 million, single-award contract for 5 years to increase access to safe and reliable water, sanitation, and solid waste management services for urban communities in Southern Africa.

The Limpopo River basin is experiencing rapid population growth and increasing climate variability, intensifying pressures on water and waste management systems. Through the USAID Resilient Cities Limpopo program, Tetra Tech will partner with local governments and regional stakeholders to develop data-driven, climate-resilient approaches to enhance public service delivery. Our experts also will leverage private sector investment to strengthen waste management operations and promote sustainable recycling practices.

“Tetra Tech has partnered with USAID to improve access to safe, sustainable water supplies in developing countries for more than 40 years,” said Dan Batrack, Tetra Tech Chairman and CEO. “We look forward to using our Leading with Science^® approach to support the people of the Limpopo River basin in creating more resilient urban communities.”

About Tetra Tech

Tetra Tech is the leader in water, environment and sustainable infrastructure, providing high-end consulting and engineering services for projects worldwide. With 28,000 employees working together, Tetra Tech provides clear solutions to complex problems by Leading with Science^® to address the entire water cycle, protect and restore the environment, design sustainable and resilient infrastructure, and support the clean energy transition. For more information about Tetra Tech, please visit tetratech.com or follow us on LinkedIn and Facebook.

Any statements made in this release that are not based on historical fact are forward-looking statements. Any forward-looking statements made in this release represent management’s best judgment as to what may occur in the future. However, Tetra Tech’s actual outcome and results are not guaranteed and are subject to certain risks, uncertainties and assumptions ("Future Factors"), and may differ materially from what is expressed. For a description of Future Factors that could cause actual results to differ materially from such forward-looking statements, see the discussion under the section "Risk Factors" included in the Company’s Form 10-K and Form 10-Q filings with the Securities and Exchange Commission. The contents of this press release are the sole responsibility of Tetra Tech and do not necessarily reflect the views of USAID or the United States Government.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241014775906/en/

Jim Wu, Investor Relations

Charlie MacPherson, Media & Public Relations

(626) 470-2844

Source: Tetra Tech, Inc.

FAQ

What is the value of the USAID contract awarded to Tetra Tech (TTEK)?

Tetra Tech (TTEK) has been awarded a $37.5 million contract by USAID for urban water, sanitation, and solid waste management services in Southern Africa.

How long is the duration of Tetra Tech's (TTEK) USAID contract for the Limpopo River basin project?

The USAID contract awarded to Tetra Tech (TTEK) for the Limpopo River basin project has a duration of 5 years.

What services will Tetra Tech (TTEK) provide under the USAID Resilient Cities Limpopo program?

Under the USAID Resilient Cities Limpopo program, Tetra Tech (TTEK) will develop climate-resilient approaches to enhance public service delivery, leverage private sector investment for waste management, and promote sustainable recycling practices.

What challenges is the Limpopo River basin facing that Tetra Tech (TTEK) will address?

The Limpopo River basin is experiencing rapid population growth and increasing climate variability, which are intensifying pressures on water and waste management systems. Tetra Tech (TTEK) will address these challenges through the USAID contract.