Tetra Tech Q3 Earnings & Revenues Top Estimates, Increase Y/Y

Tetra Tech, Inc. TTEK reported third-quarter fiscal 2025 (ended June 2025) adjusted earnings of 43 cents per share, which surpassed the Zacks Consensus Estimate of 37 cents. The company’s adjusted earnings per share outperformed the management’s guided range of 35-40 cents. The bottom line surged 34.4% year over year, driven by the strong momentum in each of its segments.

TTEK’s Revenue & Segmental Performance

Tetra Tech generated revenues of $1.37 billion, reflecting a year-over-year increase of 1.9%. Adjusted net revenues (adjusted revenues minus subcontractor costs) were $1.15 billion, up 3.9% year over year. The quarterly top line surpassed the management’s guided range of $1.10-$1.20 billion.

Tetra Tech’s adjusted net revenues also exceeded the Zacks Consensus Estimate of $1.14 billion.

The backlog at the end of the fiscal third quarter was $4.28 billion, down 18.2% year over year.

Segmental Revenues

Revenues from U.S. Federal customers (accounting for 25% of the quarter’s revenues) were up 46% year over year, supported by a solid pipeline of projects from the Defense and U.S. Army Corps of Engineers. U.S. Commercial sales (19% of the quarter’s revenues) decreased 4% year over year, due to decreased renewable energy sales.

U.S. State and Local sales (14% of the quarter’s revenues) increased 30% year over year, driven by strength in disaster response. International sales (42% of the quarter’s revenues) were down 1% year over year, owing to softness in Australia's infrastructure.

Tetra Tech reports revenues under the segments discussed below:

Net sales of the Government Services Group segment were $429 million, up 29% year over year. Revenues from the Commercial/International Services Group segment totaled $633 million, representing a year-over-year increase of 2%.

TTEK's Margin Profile

In the fiscal third quarter, Tetra Tech’s subcontractor costs totaled $216.8 million, reflecting a decrease of 7.6% from the year-ago quarter. Other costs of revenues (adjusted) were $901.5 million, up 1.7% from the third quarter of fiscal 2024. Selling, general and administrative expenses (adjusted) were $86.6 million, down 7.9% from the year-ago fiscal quarter.

Adjusted operating income increased 37.2% year over year to $159.4 million while the adjusted margin increased 300 basis points to 11.6%.

Tetra Tech’s Balance Sheet and Cash Flow

While exiting the fiscal third quarter, Tetra Tech had cash and cash equivalents of $242.8 million compared with $232.7 million recorded at the end of the fourth quarter of fiscal 2024. Long-term debt was $862.5 million compared with $812.6 million recorded at the end of fourth-quarter fiscal 2024.

In the first nine months of fiscal 2025, Tetra Tech generated net cash of $356.8 million from operating activities compared with $253.1 million in the prior fiscal year period. Capital expenditure was $13.4 million, up 18.3% year over year. In the first nine months of fiscal 2025, TTEK’s proceeds from borrowings amounted to $715 million while repayments on long-term debt totaled $665 million.

Shareholder-Friendly Policies

Tetra Tech distributed dividends totaling $48 million in the first nine months of fiscal 2025. This compares favorably with dividends of $43.3 million distributed in the previous fiscal year period. It repurchased shares worth $200 million in the same period.

TTEK’s Fiscal 2025 Outlook

For fiscal 2025 (ending September 2025), Tetra Tech anticipates net revenues to be in the range of $4.454- $4.554 billion compared with $4.400-$4.765 billion expected earlier. The projection is favorably comparable with net revenues of $4.322 billion reported in fiscal 2024. Adjusted earnings are predicted to be $1.49-$1.54 per share compared with $1.42 - $1.52 expected earlier. It reported earnings of $1.26 per share in fiscal 2024.

For the fiscal fourth quarter, management estimates net revenues to be in the range of $1.04-$1.1 billion. Adjusted earnings are projected to be in the band of 38-43 cents per share.

TTEK’s Zacks Rank

The company currently carries a Zacks Rank #3 (Hold). 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Companies

Dover Corporation DOV reported earnings of $2.44 per share in second-quarter 2025, beating the Zacks Consensus Estimate of $2.39. This compares with earnings of $2.36 per share a year ago.

Dover posted revenues of $2.05 billion in the quarter, surpassing the Zacks Consensus Estimate by 0.6%. This compares with year-ago revenues of $2.18 billion.

Teck Resources Limited TECK came out with earnings of $0.27 per share in the second quarter of 2025, beating the Zacks Consensus Estimate of $0.2. This compares with earnings of $0.58 per share a year ago.

Teck Resources posted revenues of $1.46 billion in the quarter, missing the Zacks Consensus Estimate by 8.7%. This compares with year-ago revenues of $2.83 billion. 

Packaging Corporation of America PKG reported earnings of $2.48 per share, beating the Zacks Consensus Estimate of $2.44. This compares with earnings of $2.2 per share a year ago.

Packaging Corp. posted revenues of $2.17 billion in the quarter, surpassing the Zacks Consensus Estimate by 0.5%. This compares with year-ago revenues of $2.08 billion.

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This article originally published on Zacks Investment Research (zacks.com).

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