Tetra Tech 2025 Q4 Earnings Strong EPS Growth Amid Revenue Decline

Tetra Tech (TTEK) reported Q4 2025 earnings that exceeded expectations, with a 36.1% year-over-year increase in EPS to $0.49 and a 33% rise in net income to $127.88 million. However, revenue fell 3.2% to $1.33 billion, missing some market forecasts. The company raised FY2026 guidance, projecting $4.05–$4.25 billion in revenue and $1.40–$1.55 in EPS, reflecting confidence in its strategic initiatives.

Revenue

Tetra Tech’s total revenue declined to $1.33 billion in Q4 2025, a 3.2% drop from $1.37 billion in the prior year. Despite this, the company’s core segments showed resilience, with government services and international operations driving margin expansion.

Earnings/Net Income

Earnings per share surged 36.1% to $0.49, while net income grew 33% to $127.88 million, underscoring effective cost management and margin improvement. The EPS performance outpaced revenue contraction, signaling strong operational leverage.

Price Action

TTEK’s stock rose 3.92% in the latest trading day, 17.16% for the week, and 12.27% month-to-date. Post-earnings momentum was robust, with a 14.27% surge immediately after the report.

Post-Earnings Price Action Review

The strategy of purchasing Tetra Tech shares after its revenue report and holding for 30 days showed strong historical performance. A 14.27% surge followed the announcement, with continued positive trends over the subsequent 30 days. Cumulative three-year returns were substantial, outperforming market benchmarks in the short term. While fluctuations occurred, the overall trajectory remained upward. Investors should note, however, that market dynamics and company-specific factors may alter future outcomes.

CEO Commentary

CEO Dan Batrack highlighted record Q4 performance driven by high-end water consulting and digital automation, with operating income up 23% and margins at a 30-year high. Strategic priorities include expanding fixed-price contracts (now 50% of revenue) and leveraging digital tools to sustain margin growth.

Guidance

Tetra Tech guided to Q1 2026 revenue of $950M–$1B (EPS: $0.30–$0.33) and FY2026 revenue of $4.05B–$4.25B (EPS: $1.40–$1.55). Organic growth is expected from U.S. state/local (10–15%), international (5–10%), and U.S. commercial (5–10%) markets.

Additional News

1. $500M USACE Contract Win: Tetra Tech secured a multiple-award contract for environmental services with the U.S. Army Corps of Engineers Baltimore District.

2. Leadership Appointments: Roger Argus was promoted to President, and Jonathan Weiss became President of Commercial/International Services Group, effective fiscal 2026.

3. Dividend Increase: The board approved a 12% rise in the quarterly dividend to $0.065 per share, reflecting confidence in long-term cash flow stability.