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Tetra Tech’s Hidden Advantage — A 56-Day Collection Cycle And 0.88x Leverage!

Tetra Tech reported a strong third quarter in fiscal year 2026, with net revenue of $1.1 billion exceeding the high end of guidance, driven primarily by growth in U.S. federal and international markets. Both business segments performed well; the Government Services Group increased revenue by 7% year-over-year with a margin of 17.5%, supported by stable demand in water, environment, and defense sectors. The Commercial International Group grew 9% with a margin of 15.1%, benefiting from diversified client engagement across water, power, energy, and mining markets worldwide. International revenue increased 12%, representing 47% of total business, with notable growth in water-related projects in the U.K., Ireland, and Netherlands, infrastructure activity in Canada, and mining and digital automation work in Australia. Tetra Tech’s backlog rose sequentially for the second consecutive quarter, increasing 5% to nearly $4.5 billion, attributed to new contract wins including significant orders from the U.S.