Tetra Tech (TTEK) Q2 2026 earnings summary

Executive summary

• Achieved strong Q2 and first half performance with net revenue up 8% year-over-year, record EBITDA of $146 million, and significant new contract wins, especially in defense and water infrastructure.

• Adjusted EPS was $0.34, exceeding guidance; reported EPS was $0.36, including a $0.02 gain from the Norwegian divestiture.

• Backlog increased 8% sequentially to $4.28 billion, reflecting robust demand and improved revenue visibility.

• International operations expanded, with notable growth in water utility and digital water projects.

• Recent acquisitions contributed approximately $105 million in revenue, while the Norway divestiture reduced revenue.

Financial highlights

• Q2-26 net revenue was $1.05B, up 8% year-over-year, excluding USAID/DOS and disaster response.

• EBITDA reached $146M, with margin up 90 basis points year-over-year.

• Cash flow from operations for the first half was a record $238M, with DSO improving by nine days to 58 days year-over-year.

• Net debt stood at $657M, with a leverage ratio of 1.0x, down from 1.36x a year ago.

• Dividend increased 11% year-over-year, marking the 44th consecutive quarterly dividend.

Outlook and guidance

• FY26 net revenue guidance raised to $4.25B–$4.40B; adjusted EPS guidance increased to $1.50–$1.58.

• Q3 net revenue guidance is $1.05B–$1.10B; adjusted EPS guidance is $0.38–$0.41.

• U.S. federal and commercial sectors expected to grow 8–12% in the second half; international and state/local growth forecast at 5–10%.

• FY26 net revenue growth projected at 9% year-over-year at midpoint, with 70 basis points margin expansion.

• U.S. federal revenue expected to grow in the remainder of FY26, excluding USAID/DOS and disaster response activities.