TETRA TECH INC (TTEK): Results of Operations and Financial Condition
TETRA TECH INC (TTEK) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 NEWS RELEASE July 29, 2026 Tetra Tech Reports Strong Third Quarter 2026 Results · Revenue $1.31 billion; Net Revenue $1.11 billion · Operating Income $158 million; EBITDA $173 million · EPS $0.42 · Backlog $4.49 billion, up 5% sequentially · YTD performance drives in
How this was made
The 30-second read
Why it matters
Traders can update models immediately using the provided Q4 net revenue and EPS ranges and the revised FY26 adjusted EPS and net revenue midpoint, plus assess quality via operating cash flow and DSO.
Market read
Raised and narrowed FY26 guidance, strong backlog growth, and record cash flow are the core catalysts for near-term repricing and estimate revisions.
What to watch
Net revenue growth is stated excluding USAID/DOS and episodic disaster response, so headline growth may overstate underlying run-rate; also guidance includes non-GAAP adjustments and excludes certain items for EPS.
Tetra Tech Reports Strong Third Quarter 2026 Results
Third-quarter net revenue was $1.11 billion, with 8% Y/Y growth excluding USAID / DOS and episodic disaster response; backlog reached $4.49 billion and increased 5% sequentially. The Company increased fiscal 2026 adjusted EPS guidance and narrowed its fiscal 2026 net revenue range to an increased midpoint.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $1.31 billion | – | – |
| Revenue, net of subcontractor costs (net revenue)non-GAAP | $1.11 billion | – | increased 8% Y/Y excluding USAID / DOS and episodic disaster response |
| Operating incomeGAAP | $158 million | – | – |
| EBITDAnon-GAAP | $173 million | – | – |
| EPSother | $0.42 | – | – |
| Backlogother | $4.49 billion | up 5% sequentially | – |
| Cash from operationsGAAP | $229 million | – | – |
| Cash from operations, trailing twelve monthsGAAP | $567 million | – | – |
| DSOother | 56 days | – | – |
| Nine-month revenueGAAP | $3.74 billion | – | – |
| Nine-month revenue, net of subcontractor costs (net revenue)non-GAAP | $3.20 billion | – | increased 8% Y/Y excluding USAID / DOS and episodic disaster response |
| Nine-month operating incomeGAAP | $430 million | – | – |
| Nine-month adjusted EBITDAnon-GAAP | $466 million | – | – |
| Nine-month EPSother | $1.18 | – | – |
| Nine-month cash flows generated from operationsGAAP | $467 million | – | – |
| Cash and cash equivalentsGAAP | $ 230,835 | – | – |
fourth quarter of fiscal 2026 and fiscal 2026 outlook
- RevenueFourth quarter net revenue: $1.12 billion to $1.17 billion; fiscal 2026 net revenue: $4.315 billion to $4.365 billion
- NoteFourth quarter EPS: $0.45 to $0.48
- NoteFiscal 2026 adjusted EPS: $1.56 to $1.59
Capital returns
- Quarterly dividend of $0.072 per share, an 11% increase year-over-year, payable on August 27, 2026, to stockholders of record as of August 13, 2026.
- Repurchased $100 million of common stock in the third quarter of fiscal 2026.
- $398 million remaining under the share repurchase program as of June 28, 2026.
What drove it
- Growth was primarily driven by U.S. federal and international end markets, both increasing at a double-digit rate.
- Significant new orders included commercial orders for data center and sediment restoration projects.
- Recent wins included U.S. Army Corps of Engineers engineering and water infrastructure contracts, a U.S. EPA water quality and ecological monitoring contract, an FAA airspace redesign task order, and a hyperscale AI data center power system digital automation and cybersecurity contract.
- Net revenue increased 8% Y/Y excluding USAID / DOS and episodic disaster response.
Concerns
- Reported net revenue growth is presented excluding USAID / DOS and episodic disaster response.
- The release identifies concentration of revenues from U.S. government agencies and potential funding disruptions, along with the government's ability to modify, delay, curtail, or terminate contracts.
- The release cites backlog cancellation and adjustments, contract-cost estimation, workforce utilization, acquisition integration, and international-operations risks.
What to watch
- Fourth-quarter net revenue guidance of $1.12 billion to $1.17 billion.
- Fourth-quarter EPS guidance of $0.45 to $0.48.
- Fiscal 2026 adjusted EPS guidance of $1.56 to $1.59.
- Fiscal 2026 net revenue guidance of $4.315 billion to $4.365 billion.
- Backlog conversion following the $4.49 billion quarter-end backlog and 5% sequential increase.
- Cash generation and capital deployment after $467 million of cash flows generated from operations through the first nine months.
Balance sheet and cash flow
- Cash from operations was $229 million in the third quarter.
- Cash from operations was $567 million over the trailing twelve months.
- Cash flows generated from operations were $467 million for the nine-month period.
- Cash and cash equivalents were $ 230,835 as of June 28, 2026, compared with $ 167,459 as of September 28, 2025.
- DSO was 56 days.
Analysis
Tetra Tech reported third-quarter revenue of $1.31 billion and net revenue of $1.11 billion. Net revenue increased 8% Y/Y excluding USAID / DOS and episodic disaster response. Operating income was $158 million, EBITDA was $173 million, and EPS was $0.42. For the first nine months, revenue was $3.74 billion, net revenue was $3.20 billion, operating income was $430 million, adjusted EBITDA was $466 million, and EPS was $1.18.
Management identified U.S. federal and international end markets as the primary growth contributors, with both increasing at a double-digit rate. Commercial orders for data center and sediment restoration projects helped drive backlog to $4.49 billion, up 5% sequentially. The recent-wins list also points to demand across water infrastructure, water quality monitoring, aviation, environmental and digital automation, hydropower modernization, PFAS treatment, and hyperscale AI data center work.
Cash conversion was a prominent feature of the release. Cash from operations was $229 million in the quarter, $467 million through the first nine months, and $567 million over the trailing twelve months. DSO was 56 days. The Company reported cash and cash equivalents of $ 230,835 as of June 28, 2026, versus $ 167,459 as of September 28, 2025. Management stated that operating cash generation supported acquisitions, increased buybacks, higher dividends, and deleveraging of net debt.
Capital returns included $100 million of common-stock repurchases during the third quarter and $398 million remaining under the repurchase program as of June 28, 2026. The Board approved a $0.072 per-share quarterly dividend, an 11% increase year-over-year. The dividend is payable on August 27, 2026, to stockholders of record as of August 13, 2026.
The outlook was raised for fiscal 2026 adjusted EPS to $1.56 to $1.59, while the fiscal 2026 net revenue range was narrowed to $4.315 billion to $4.365 billion and characterized as having an increased midpoint. For the fourth quarter, the Company expects net revenue of $1.12 billion to $1.17 billion and EPS of $0.45 to $0.48. The key reported execution markers for the next period are conversion of the expanded backlog, sustained federal and international growth, and maintenance of cash generation.
Management, verbatim
We delivered a strong third quarter with growth primarily driven by U.S. federal and international end markets, both increasing at a double-digit rate. We received significant new orders during the quarter, including commercial orders for data center and sediment restoration projects, driving our backlog up by more than $200 million. The Company’s performance year-to-date resulted in our increasing guidance for fiscal 2026.
Roger Argus, Chief Executive Officer
Tetra Tech generated its strongest cash flow on record with $467 million from operations through the first three quarters of fiscal 2026. Our ability to consistently generate more cash than net income has allowed the Company to fund acquisitions, increase the stock buybacks, and pay higher dividends, while still deleveraging our net debt.
Steve Burdick, Chief Financial Officer
Not in the filing
stated, not guessed- Prior-year and prior-quarter revenue values
- Prior-year and prior-quarter net revenue values
- Prior-year and prior-quarter operating income values
- Prior-year and prior-quarter EBITDA values
- Prior-year and prior-quarter EPS values
- GAAP versus non-GAAP basis for reported third-quarter and nine-month EPS
- GAAP net income
- Non-GAAP adjusted EPS actual result
- Gross profit and gross margin
- Operating expenses
- Free cash flow
- Debt and net debt balances
- Segment revenue, segment growth, and segment profitability
- Prior guidance, which was not provided
- Fourth-quarter and fiscal 2026 guidance for gross margin, operating expenses, and tax rate
- Reconciliation of net revenue and EBITDA to comparable GAAP measures in the supplied filing text
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
This is an SEC Form 8-K (Item 2.02) with a company news release covering Q3 2026 results, backlog, cash flow, dividend/buyback updates, and FY26 outlook.
Ticker impact
Tetra Tech reported Q3 results with net revenue $1.11B, EPS $0.42, backlog $4.49B, and increased FY26 adjusted EPS guidance to $1.56-$1.59.
Likely positive bias for the stock as guidance is increased and backlog/cash flow trends are strong, though magnitude depends on Street expectations.
The release provides concrete quarterly datapoints (revenue, EPS, backlog, operating cash flow) and explicit FY26 guidance changes, which are direct inputs to valuation and forward earnings models.
Market effects
Supports the narrative of resilient demand for U.S. federal and water/environment engineering services, potentially read-across to peers with similar government exposure.
Emphasizes U.S. federal and state/local infrastructure spending, with potential sentiment spillover to U.S. government services contractors.
International end markets are cited as growing at double-digit rates, modestly improving global demand sentiment for engineering services.
Counterpoint
Despite raised guidance, the company still flags risks like government funding disruptions and contract modification/termination at the government’s convenience.
Key entities
- companyTetra Tech, Inc.
NASDAQ-listed engineering services provider reporting Q3 results and raising/narrowing FY26 guidance.
