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- Revenue $1.21 billion; Net Revenue $1.04 billion
- Net Revenue up 8% excluding USAID/DOS and Q1-25 Hurricanes
- Operating Income $141 million; Adjusted EBITDA $147 million
- EPS $0.40; Adjusted EPS $0.35
- Raising FY26 Net Revenue and EPS guidance
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PASADENA, Calif. — Tetra Tech, Inc. (NASDAQ: TTEK), a leading provider of high-end consulting and engineering services in water, environment and sustainable infrastructure, today announced results for the first quarter ended December 28, 2025.
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Revenue and revenue, net of subcontractor costs (net revenue)1, in the first quarter totaled $1.21 billion and $1.04 billion, respectively. Operating income was $141 million and adjusted EBITDA1 was $147 million; adjusted EBITDA margin up 140 basis points year-over-year. EPS was $0.40 and adjusted EPS1 was $0.35. Backlog was $3.95 billion at the end of the first quarter. Cash from operations was $72 million in the first quarter and $517 million over the trailing 12 months.
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Q1 FY26 Highlights (Excluding USAID / DOS)
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- Adjusted EBITDA margin improved 80 basis points year-over-year
- EPS up 17% year-over-year
- DSO improved to 51 days
- Halvik acquisition expands high-end data analytics and resilient infrastructure optimization
- Providence acquisition further advances front-end program advisory services
- $151 billion ten-year multiple award contract for the U.S. Missile Defense Agency SHIELD program
- $500 million multiple-award contract for environmental services for USACE Baltimore District
- A$88 million single-award contract for coastal infrastructure planning services for Australia Defense
- $60 million multiple-award contract for waterway design services for USACE Portland District
- A$57 million single-award contract for naval facility resilience for Australia Defense
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Executive Management Comments
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Dan Batrack, Chairman and CEO, commented, “Tetra Tech began fiscal 2026 with a strong first quarter as net revenue was up 8% and EPS up 17%. Subsequent to the first quarter, we announced two strategic acquisitions, further expanding our front-end consulting business for our defense clients. As expected, our margin increased by 80 basis points, with our higher margin front-end advisory and technical consulting business growing at a double-digit rate. With the promotion of Roger Argus to CEO effective after our annual shareholders meeting, I see continued progress toward achieving our 2030 vision and direction and the associated financial targets.”
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Roger Argus, President and CEO-designate, stated, “We continued to see significant demand for our differentiated services in water, environment, and sustainable infrastructure across our global operations. During the quarter, we grew our government business with municipal water and defense clients, and on the commercial side, we saw an increase in power and transmission projects to support energy demand. As a result, we are increasing our guidance for 2026 and are well positioned to achieve our 2030 goals.”
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Quarterly Dividend and Share Repurchase Program
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On January 26, 2026, Tetra Tech’s Board of Directors approved the Company’s 47th consecutive quarterly dividend at an amount of $0.065 per share, a 12% increase year-over-year, payable on February 27, 2026, to stockholders of record as of February 12, 2026. In the first quarter, Tetra Tech repurchased $50 million of common stock. Additionally, as of December 28, 2025, the Company had $548 million remaining under its share repurchase programs.
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Business Outlook
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The following statements are based on current expectations. These statements are forward-looking, and the actual results could differ materially. These statements do not include the potential impact of transactions that may be completed or developments that become evident after the date of this release. The Business Outlook section should be read in conjunction with the information on forward-looking statements at the end of this release.
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For fiscal 2026, Tetra Tech is increasing the full year guidance for net revenue2 to range from $4.15 billion to $4.30 billion and adjusted EPS3 to range from $1.46 to $1.56. For the second quarter of fiscal 2026, Tetra Tech expects net revenue to range from $975 million to $1.025 billion and EPS to range from $0.30 to $0.33.
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Webcast
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Investors will have the opportunity to access a live audio-visual webcast and supplemental financial information concerning the first quarter of fiscal 2026 results through a link posted on the Company’s website at tetratech.com on January 29, 2026, at 8:00 a.m. (PT).
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| _____________________ | ||
1 | Non-GAAP financial measures which the Company believes provide valuable perspectives on its business results. Refer to tables at the end of the release and Regulation G Information for reconciliations to the comparable GAAP metrics. | |
2 | Reconciliation of the net revenue guidance to the most directly comparable GAAP measure is not available without unreasonable efforts because the Company cannot predict the magnitude and timing of all the components, including subcontractor costs, required to provide such reconciliation with sufficient precision. | |
3 | The only adjustments in our guidance for EPS are to exclude the gain on business disposition and contingent consideration in the first quarter of fiscal 2026. | |
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Reconciliation of GAAP and Non-GAAP Items | |||||||
In thousands (except EPS data) | |||||||
Three Months Ended | |||||||
December 28, 2025 | December 29, 2024 | ||||||
Revenue | $ | 1,210,663 | $ | 1,420,561 | |||
USAID/DOS | (56,374 | ) | (283,905 | ) | |||
Revenue excl. USAID/DOS | $ | 1,154,289 | $ | 1,136,656 | |||
Revenue | $ | 1,210,663 | $ | 1,420,561 | |||
Subcontractor costs | (173,487 | ) | (223,231 | ) | |||
Net revenue | $ | 1,037,176 | $ | 1,197,330 | |||
USAID/DOS | (50,606 | ) | (238,517 | ) | |||
Net revenue excl. USAID/DOS | $ | 986,570 | $ | 958,813 | |||
Operating Income | $ | 140,994 | $ | 22,526 | |||
Contingent consideration | (7,447 | ) | (366 | ) | |||
Legal contingency | – | 115,000 | |||||
Adjusted Operating Income | $ | 133,547 | $ | 137,160 | |||
USAID/DOS | (2,746 | ) | (19,987 | ) | |||
Adjusted OI excl. USAID/DOS | $ | 130,801 | $ | 117,173 | |||
EPS | $ | 0.40 | $ | 0.00 | |||
Contingent consideration | (0.02 | ) | – | ||||
Gain on business disposition | (0.03 | ) | – | ||||
Legal contingency | – | 0.35 | |||||
Adjusted EPS | $ | 0.35 | $ | 0.35 | |||
USAID/DOS | (0.01 | ) | (0.06 | ) | |||
Adjusted EPS excl. USAID/DOS | $ | 0.34 | $ | 0.29 | |||
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