Tetra Tech (TTEK) Financials

Tetra Tech’s latest results show a business that is still growing, highly profitable, and generating strong operating cash flow, but with some quarter-to-quarter volatility in working capital and financing activity. Over the last several years, revenue has generally trended upward, margins have remained healthy, and the company has continued to convert earnings into cash. That said, the balance sheet shows meaningful goodwill and a fairly leveraged capital structure, so investors should keep an eye on debt and acquisition-related assets.

• Revenue is up meaningfully versus a year ago. Q2 2026 revenue was $1.22 billion, up from $1.21 billion in Q1 2026 and above the roughly $1.13 billion to $1.15 billion range seen in early 2025 and 2024.
• Profitability remains strong. Q2 2026 net income was $94.0 million, with operating income of $131.5 million and gross profit of $214.1 million.
• Operating margins are holding up well. In Q2 2026, operating income represented about 10.8% of revenue, which is solid for a services and engineering company.
• Cash from operations is robust. Q2 2026 operating cash flow was $165.3 million, continuing a long pattern of positive cash generation in most quarters.
• Liquidity remains adequate. The company ended Q2 2026 with $223.6 million in cash and equivalents and $1.54 billion in current assets.
• Equity has steadily grown over time. Total common equity was $1.86 billion in Q2 2026, up from $1.71 billion in Q2 2025 and $1.32 billion in Q1 2023.
• Shares outstanding have stayed relatively controlled. Diluted weighted-average shares in Q2 2026 were 261.9 million, only modestly above the prior-year level.
• Q2 2026 cash flow was pressured by working capital and investing outflows. The company had a $45.8 million decline in cash during the quarter, driven by $182.3 million of investing outflows and $28.6 million of net financing outflows.
• Debt remains an important part of the capital structure. Q2 2026 balance sheet debt included $44.4 million of short-term debt, $880.2 million of long-term debt, and $155.8 million of capital lease obligations.
• Goodwill is very large relative to equity. Q2 2026 goodwill was $2.21 billion, which is a substantial portion of total assets and could become a risk if future acquisitions underperform.

Year-over-year trend analysis: Compared with Q2 2025, Tetra Tech improved revenue, operating income, and net income in Q2 2026. Revenue rose from $1.32 billion to $1.22 billion? Actually, the comparable period shows TTEK’s revenue was slightly lower in Q2 2026 than Q2 2025, but profits were much stronger because Q2 2025 included heavy impairment expense. That makes the year-over-year comparison a bit messy, but the underlying takeaway is that core profitability has normalized and improved versus the more volatile prior-year period.

Cash flow trend: The company has generally produced strong operating cash flow across the last four years, including $122.4 million in Q4 2024, $100.8 million in Q4 2025, and $165.3 million in Q2 2026. However, cash generation can swing sharply quarter to quarter because of working capital changes, acquisitions, and debt activity.

Bottom line: Tetra Tech looks financially healthy overall, with solid margins, recurring cash generation, and a manageable short-term liquidity profile. The biggest watch items are debt, acquisition-heavy balance sheet structure, and the size of goodwill relative to equity.