Tetra Tech, Inc. (NASDAQ:TTEK) shares are trading higher on Thursday after the company reported better-than-expected fourth-quarter results on Wednesday. Baird also raised its price target on the stock to $40 from $37.
• Tetra Tech stock is among today’s top performers. What’s behind TTEK gains?
Earnings Snapshot
Tetra Tech reported fourth-quarter adjusted EPS of 49 cents, beating analyst estimates of 47 cents. Revenue came in at $1.340 billion, exceeding expectations of $1.151 billion.
Funded backlog increased 13% year-over-year (Y/Y) to $4.67 billion, marking the third consecutive quarter with a book-to-bill ratio above 1.1 times. New orders exceeded $1.6 billion, including $600 million in global commercial orders.
Operating cash flow rose 14% to $523 million in fiscal 2026.
Adjusted EBITDA margin expanded 90 basis points to 15.2%. Tetra Tech increased its quarterly dividend by 11% and repurchased $300 million in shares during fiscal 2026, with $798 million remaining under its buyback authorization. Net debt-to-EBITDA leverage stood at approximately 1.0 times.
Segment Performance
Government Services Group revenue grew 8% to $513 million, with an 18.8% operating margin, supported by municipal water and U.S. federal infrastructure projects.
Commercial International Group revenue increased 3% to $640 million, while its operating margin expanded 140 basis points to 16.2%. Growth was supported by water programs in the U.K. and Ireland, as well as digital automation, defense and infrastructure projects in Australia and Canada.
End-Market Growth
U.S. federal revenue rose 9%, accounting for 26% of quarterly revenue. U.S. state and local revenue and U.S. commercial revenue each increased 6%, supported by water treatment, digital automation, data center, power and transmission projects.
International revenue, which represented 43% of quarterly revenue, grew 3%. Excluding the Norway divestiture, growth was approximately 5%-6%, led by the U.K., Ireland and Canada.
Major Contract Wins
Tetra Tech secured a $1.4 billion NASA technical support contract, $145 million in additional U.S. Navy contract capacity and an $85 million increase in its U.S. Army Corps of Engineers contract capacity in Europe.
Other wins included a $49 million NOAA contract and more than $220 million in additional contract capacity with the EPA.
Guidance
For fiscal 2027, Tetra Tech expects GAAP earnings of $1.65-$1.80 per share, compared with analyst estimates of $1.71. The company projects revenue of $4.425 billion-$4.625 billion, versus expectations of $4.497 billion.
Tetra Tech expects U.S. commercial revenue to grow 10%, U.S. federal revenue to increase 5% and international revenue to rise approximately 5%. State and local revenue is expected to remain flat.
Growth opportunities include Canada’s planned increase in infrastructure funding to C$73.7 billion by FY28, the U.K.’s 105 billion pound AMP8 water program and Ireland’s 13.6 billion euros water investment plan through 2029. Australian defense spending is expected to reach A$80 billion by FY2030.
TTEK Stock Price Activity: Tetra Tech shares were up 3.86% at $39.09 at the time of publication on Thursday.
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