Tetra Tech Q3 Earnings Beat Estimates on Core Market Growth

On a GAAP basis, TTEK reported revenues of $1.31 billion compared with $1.37 billion in the year-ago quarter.

Tetra Tech Benefited From CIG Growth Offset by GSG

Revenues from U.S. federal customers, accounting for 20% of the quarter’s net revenues, increased 12% year over year, excluding USAID, Department of State and episodic disaster-response activities. Growth was supported by higher activity with the Navy and U.S. Army Corps of Engineers. U.S. commercial revenues, representing 20% of the total, rose 1% as gains in power transmission offset lower renewable-energy activity.

U.S. state and local revenues, accounting for 13% of net revenues, increased 5% year over year, driven by strength in municipal water treatment, partly offset by lower flood-protection work. International revenues, representing 47% of the total, advanced 12% on growth in U.K. water and digital water automation programs.

Tetra Tech reports revenues under the segments discussed below:

The Commercial/International Services Group delivered net revenues of $634.2 million, up 9.3% year over year. Government Services Group net revenues were $474.3 million, down 17.2% from the prior-year quarter on a reported basis. Excluding USAID, Department of State and episodic disaster-response activities, GSG net revenues increased 7%, reflecting strength in water infrastructure and defense programs.

TTEK's Margin Profile

TTEK continued to manage its costs while maintaining capacity for growth investments. In the fiscal third quarter, Tetra Tech’s subcontractor costs totaled $200 million, down 7.8% from the year-ago quarter. Other costs of revenues (adjusted) were $865.4 million, down 4% from the third quarter of fiscal 2025. Selling, general and administrative expenses (adjusted) declined 1.6% year over year to $85.2 million.

Adjusted operating income decreased 4.2% year over year to $158 million, while the adjusted operating margin remained unchanged at 14.3%.

Tetra Tech’s Balance Sheet and Cash Flow

While exiting the fiscal third quarter, Tetra Tech had cash and cash equivalents of $230.8 million compared with $167.5 million recorded at the end of fiscal 2025. Long-term debt was $801.1 million compared with $763.4 million at fiscal 2025-end.

In the first nine months of fiscal 2026, Tetra Tech generated net cash of $466.6 million from operating activities compared with $356.8 million in the prior-year period. Capital expenditures were $14.1 million, up 5.4% year over year. TTEK’s proceeds from borrowings totaled $245 million, while repayments on long-term debt were $210 million.

Shareholder-Friendly Policies

Tetra Tech distributed dividends totaling $52.5 million in the first nine months of fiscal 2026, up from $48 million in the prior-year period. The company also repurchased shares worth $202 million compared with $200 million in the first nine months of fiscal 2025.

TTEK’s Fiscal 2026 Outlook

For fiscal 2026 (ending September 2026), Tetra Tech expects net revenues in the range of $4.315-$4.365 billion. At the midpoint, the outlook implies 8% year-over-year growth after excluding USAID, Department of State and episodic disaster-response activities.

Adjusted earnings are projected in the range of $1.56-$1.59 per share. The company expects adjusted EBITDA margin to expand 70 basis points year over year.

For the fiscal fourth quarter, management forecasts net revenues of $1.12-$1.17 billion. Adjusted earnings are expected in the range of 45-48 cents per share.

TTEK’s Zacks Rank

The company currently carries a Zacks Rank #3 (Hold). 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Companies

Constellium SE CSTM came out with quarterly earnings of $1.04 per share in the second quarter of 2026, beating the Zacks Consensus Estimate of $0.91 per share. This compares with earnings of $0.25 per share a year ago.

Constellium posted revenues of $2.75 billion for the quarter ended June 2026, missing the Zacks Consensus Estimate by 3.5%. This compares with year-ago revenues of $2.1 billion.

Generac Holdings Inc. GNRC came out with quarterly earnings of $2.91 per share in the second quarter of 2026, beating the Zacks Consensus Estimate of $1.95 per share. This compares with earnings of $1.65 per share a year ago.

Generac Holdings posted revenues of $1.17 billion for the quarter ended June 2026, missing the Zacks Consensus Estimate by 0.37%. This compares with year-ago revenues of $1.06 billion.

Graco Inc. GGG reported second-quarter 2026 adjusted earnings of 91 cents per share, up 17% from 78 cents in the year-ago quarter. The bottom line surpassed the Zacks Consensus Estimate of 81 cents by 12.4%.

The company’s net sales rose 3% year over year to $590.6 million but lagged the consensus estimate of $609 million by 3%. Organic order backlog (excluding acquisitions) rose 28% from the end of 2025.

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