Rubio's X Post Dims Prospects for Tetra Tech's USAID Revenue
Six weeks after Tetra Tech reported that it had $200M in USAID contracts at risk, the Secretary of State announced most consulting contracts were eliminated. Photo: Zerbor/Getty Images
Secretary of State Marco Rubio's March 10 post on X that 83% of U.S. Agency for International Development consulting contracts have been canceled raises doubts on the status of up to $290 million in anticipated combined agency revenue in 2025 for consultants Tetra Tech Inc. and ICF International.
The canceled contracts, Rubio claimed, "spend tens of billions of dollars in ways that did not serve (and in some instances even harmed) the core national interests of United States."
Rubio said that 5,200 contracts were eliminated and 1,000 contracts were being continued by the U.S. Dept. of State.
Exactly how much Tetra Tech (NASDAQ:TTEK) revenue may be lost is not clear yet.
The company announced Jan. 29 that it was pausing some U.S. government work, "particularly USAID," while assisting clients with their review of programs in various agencies.
In an earnings conference call Jan. 30, Tetra Tech executives said the Pasadena, Calif.-based company had already performed in the first quarter of fiscal 2025 about $200 million of the $400 million in USAID work it was anticipating for the entire year. CEO Dan L. Batrack told analysts that the firm estimated it would perform the remaining $200 million during the rest of the year.
For the first quarter ending Dec. 29, Tetra Tech reported adjusted operating income of $137 million on $1.4 billion in net revenue, compared to $111 million on $1.2 billion in the prior year. The firm's net income for the quarter was down substantially to $747,000, compared to $74.9 million in the year prior.
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The slide in net income comes as Tetra Tech had to set aside $115 million in legal contingencies. The company in January agreed to pay $97 million as part of a deal to settle civil claims brought by federal authorities who accused the firm of wrongdoing in its environmental cleanup work for the U.S. Navy of the former Hunters Point Naval Shipyard in San Francisco.
Four days after the financial report and earnings conference call, Elon Musk, head of the group known as the Dept. of Government Efficiency, proclaimed in an X post that "we spent the weekend feeding USAID into the woodchipper."
Tetra Tech has not yet announced which of its contracts survived administration review. In May, USAID awarded the company a five-year, $439-million contract to provide strategic technical and procurement assistance to improve the “resilience, reliability, affordability and security” of Ukraine's electric, natural gas and district heating sectors.
More recently, ICF International said it had lost $90 million in anticipated 2025 revenue from USAID consulting contracts.
