Tetra Tech topped Q4 expectations with adjusted EPS of $0.45 (vs. $0.40 consensus) and $1.33bn in revenue (down 3.2% YoY) while adjusted net revenues rose 16.2% to $1.16bn; backlog fell to $4.14bn (-23%). Operational leverage—subcontractor costs down 27.5% and SG&A down 10.8%—lifted adjusted operating income 12.4% to $171.4m and expanded margins 180 bps to 12.9%, aided by strong U.S. federal (+22%), state/local (+19%) and international (+9%) demand offsetting a 2% decline in U.S. commercial. The company generated $457.7m of operating cash, returned capital via $65m of dividends and $250m of buybacks, and reduced long-term debt, but issued cautious fiscal 2026 guidance (net revenues $4.05–4.25bn vs. $4.62bn in FY25; adj. EPS $1.40–1.55), suggesting near-term topline headwinds despite improved profitability and cash flow.
Tetra Tech reported fiscal Q4 adjusted EPS of $0.45 versus a Zacks consensus of $0.40 and above management guidance of $0.38–$0.43, an 18.4% year‑over‑year increase. Revenue was $1.33 billion, down 3.2% YoY, while adjusted net revenues rose 16.2% to $1.16 billion, exceeding both management guidance ($1.04–$1.10 billion) and consensus ($1.06 billion); backlog declined 23% YoY to $4.14 billion, signaling potential top‑line pressure. U.S. Federal (+22%, 21% of quarter revenue), U.S. State & Local (+19%, 14%) and International (+9%, 45%) strength offset a 2% decline in U.S. Commercial driven by lower renewable energy sales; Government Services net sales were $396 million (+17%) and Commercial/International were $676 million (+7%). Operational leverage supported margin expansion: subcontractor costs fell 27.5% to $166.8 million and adjusted SG&A declined 10.8% to $102.7 million, driving adjusted operating income to $171.4 million (+12.4%) and adjusted margin to 12.9% (+180 bps). Cash and cash equivalents were $167.5 million (versus $232.7 million a year earlier) while long‑term debt declined to $763.4 million; operating cash flow was $457.7 million and the company returned capital via $65 million of dividends and $250 million of buybacks. Management guided fiscal 2026 net revenues of $4.05–$4.25 billion (vs. $4.62 billion in FY25) and adjusted EPS of $1.40–$1.55 (vs. $1.56), with Q1 revenue/EPS at $950 million–$1.0 billion and $0.30–$0.33, reflecting a cautious near‑term outlook that makes backlog cadence and execution the primary catalysts and risks.
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Overall Sentiment
mildly positive
Sentiment Score
0.28
Ticker Sentiment
