What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-08-01 compared with 2025-05-08 · 188 added, 199 removed, 622 unchanged (38% of the section changed)

3 unchanged sentences

(unaudited - in thousands, except par value)

ASSETS March 30,

ASSETS June 29,

2025 September 29,

18 unchanged sentences

Short-term lease liabilities, operating leases 64,109 63,419

Current portion of long-term debt 250,000 —

Current contingent earn-out liabilities 35,362 26,934

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Preferred stock - authorized, 2,000 shares of $ 0.01 par value;

no shares issued and outstanding at March 30, 2025 and September 29, 2024

no shares issued and outstanding at June 29, 2025 and September 29, 2024

Common stock - authorized, 750,000 shares of $ 0.01 par value;

issued and outstanding, 263,503 and 267,717 shares at March 30, 2025 and September 29, 2024, respectively

issued and outstanding , 262,752 and 267,717 shares at June 29, 2025 and September 29, 2024, respectively

Additional paid-in capital — 35,900

9 unchanged sentences

(unaudited – in thousands, except per share data)

Three Months Ended Six Months Ended

2025 March 31,

2024 March 30,

2025 March 31,

Three Months Ended Nine Months Ended

2025 June 30,

2024 June 29,

2025 June 30,

Revenue $ 1,369,816 $ 1,344,323 $ 4,112,490 $ 3,824,205

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Tetra Tech, Inc.

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Comprehensive Income

(unaudited – in thousands)

Three Months Ended Six Months Ended

2025 March 31,

2024 March 30,

2025 March 31,

Three Months Ended Nine Months Ended

2025 June 30,

2024 June 29,

2025 June 30,

Net income $ 113,883 $ 85,824 $ 120,073 $ 237,263

Other comprehensive income (loss), net of tax

Other comprehensive income, net of tax

Foreign currency translation adjustment, net of tax

1 unchanged sentence

Net pension adjustments — 3 ( 33 ) ( 10 )

Other comprehensive income (loss), net of tax 34,574 ( 24,344 ) ( 74,305 ) 38,749

Comprehensive income (loss), net of tax 39,986 52,115 ( 68,115 ) 190,188

Other comprehensive income, net of tax 88,063 1,857 13,758 40,606

Comprehensive income, net of tax 201,946 87,681 133,831 277,869

Comprehensive income attributable to noncontrolling interests, net of tax 39 14 94 35

Comprehensive income (loss) attributable to Tetra Tech, net of tax $ 39,962 $ 52,102 $ ( 68,170 ) $ 190,167

Comprehensive income attributable to Tetra Tech, net of tax $ 201,907 $ 87,667 $ 133,737 $ 277,834

See Notes to Consolidated Financial Statements.

2 unchanged sentences

(unaudited – in thousands)

Six Months Ended

2025 March 31,

Nine Months Ended

2025 June 30,

Cash flows from operating activities:

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Repayments on long-term debt ( 665,000 ) ( 200,000 )

Payment of debt issuance costs ( 2,738 ) —

Repurchases of common stock ( 199,984 ) —

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Principal payments on finance leases ( 5,742 ) ( 4,827 )

Net cash provided by (used in) financing activities ( 37,437 ) 5,633

Net cash used in financing activities ( 234,987 ) ( 107,458 )

Effect of exchange rate changes on cash and cash equivalents ( 3,434 ) 2,146

Net increase (decrease) in cash and cash equivalents ( 53,256 ) 41,463

Net increase in cash and cash equivalents 10,144 43,490

Cash and cash equivalents at beginning of period 232,689 168,831

10 unchanged sentences

Consolidated Statements of Stockholders' Equity

Three Months Ended March 31, 2024 and March 30, 2025

Three Months Ended June 30, 2024 and June 29, 2025

(unaudited – in thousands)

7 unchanged sentences

Shares Amount

BALANCE AT DECEMBER 31, 2023 267,329 $ 2,672 $ 9,971 $ ( 132,202 ) $ 1,657,165 $ 1,537,606 $ 81 $ 1,537,687

BALANCE AT MARCH 31, 2024 267,486 $ 2,674 $ 18,963 $ ( 156,546 ) $ 1,719,703 $ 1,584,794 $ 56 $ 1,584,850

Net income — — — — 85,810 85,810 14 85,824

Other comprehensive loss — — — ( 24,344 ) — ( 24,344 ) — ( 24,344 )

Other comprehensive income — — — 1,857 — 1,857 — 1,857

Distributions paid in noncontrolling interests — — — — — — ( 5 ) ( 5 )

4 unchanged sentences

Stock options exercised 168 2 1,226 — — 1,228 — 1,228

Shares issued for Employee Stock Purchase Plan — — 2 — — 2 — 2

BALANCE AT JUNE 30, 2024 267,662 $ 2,676 $ 28,160 $ ( 154,689 ) $ 1,789,991 $ 1,666,138 $ 65 $ 1,666,203

BALANCE AT MARCH 30, 2025 263,503 $ 2,635 $ — $ ( 153,180 ) $ 1,724,203 $ 1,573,658 $ 123 $ 1,573,781

BALANCE AT DECEMBER 29, 2024 268,028 $ 2,680 $ 21,153 $ ( 187,754 ) $ 1,855,818 $ 1,691,897 $ 122 $ 1,692,019

Net income — — — — 113,844 113,844 39 113,883

7 unchanged sentences

Stock repurchases ( 767 ) ( 8 ) ( 8,712 ) — ( 16,526 ) ( 25,246 ) — ( 25,246 )

BALANCE AT MARCH 30, 2025 263,503 $ 2,635 $ — $ ( 153,180 ) $ 1,724,203 $ 1,573,658 $ 123 $ 1,573,781

BALANCE AT JUNE 29, 2025 262,752 $ 2,628 $ — $ ( 65,117 ) $ 1,804,429 $ 1,741,940 $ 156 $ 1,742,096

Tetra Tech, Inc.

Consolidated Statements of Stockholders' Equity

Six Months Ended March 31, 2024 and March 30, 2025

Nine months ended June 30, 2024 and June 29, 2025

(unaudited – in thousands)

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Shares issued for Employee Stock Purchase Plan 522 5 14,672 — — 14,677 — 14,677

BALANCE AT MARCH 31, 2024 267,486 $ 2,674 $ 18,963 $ ( 156,546 ) $ 1,719,703 $ 1,584,794 $ 56 $ 1,584,850

BALANCE AT JUNE 30, 2024 267,662 $ 2,676 $ 28,160 $ ( 154,689 ) $ 1,789,991 $ 1,666,138 $ 65 $ 1,666,203

BALANCE AT SEPTEMBER 29, 2024 267,717 $ 2,677 $ 35,900 $ ( 78,875 ) $ 1,870,620 $ 1,830,322 $ 91 $ 1,830,413

Net income — — — — 119,979 119,979 94 120,073

Other comprehensive loss — — — ( 74,305 ) — ( 74,305 ) — ( 74,305 )

Other comprehensive income — — — 13,758 — 13,758 — 13,758

Distributions paid in noncontrolling interests — — — — — — ( 29 ) ( 29 )

6 unchanged sentences

Stock repurchases ( 5,933 ) ( 59 ) ( 63,260 ) — ( 138,178 ) ( 201,497 ) — ( 201,497 )

BALANCE AT MARCH 30, 2025 263,503 $ 2,635 $ — $ ( 153,180 ) $ 1,724,203 $ 1,573,658 $ 123 $ 1,573,781

BALANCE AT JUNE 29, 2025 262,752 $ 2,628 $ — $ ( 65,117 ) $ 1,804,429 $ 1,741,940 $ 156 $ 1,742,096

See Notes to Consolidated Financial Statements.

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These financial statements reflect all normal recurring adjustments that are considered necessary for a fair statement of our financial position, results of operations and cash flows for the interim periods presented.

The results of operations and cash flows for any interim period are not necessarily indicative of results for the full fiscal year or for future fiscal yea r s.

The results of operations and cash flows for any interim period are not necessarily indicative of results for the full fiscal year or for future fiscal yea rs.

Certain prior year amounts have been reclassified to conform to the current year presentation in the accompanying notes.

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The following tables present our revenue disaggregated by client sector and contract type (in thousands):

Three Months Ended Six Months Ended

2025 March 31,

2024 March 30,

2025 March 31,

Three Months Ended Nine Months Ended

2025 June 30,

2024 June 29,

2025 June 30,

Client Sector:

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(2) Includes revenue generated from non-U.S.

clien ts, primarily in Australia, Canada, and the United Kingdom

clien ts, primarily in United Kingdom, Australia and Canada.

Other than the U.S.

federal government, no single client accounted for more than 10% of our revenue for the three and six months ended March 30, 2025 and March 31, 2024.

federal government, no single client accounted for more than 10% of our revenue for the three and nine months ended June 29, 2025 and June 30, 2024.

Contract Assets and Contract Liabilities

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Net contract liabilities $ ( 253,691 ) $ ( 222,060 )

(1) Includes $ 9.5 million and $ 7.9 million of contract retentions at March 30, 2025 and September 29, 2024, respectively.

(2) Reported under "Other non-current liabilities" on our consolidated balance sheet as of March 30, 2025.

Our contract assets and contract liabilities increased in the first half of fiscal 2025 compared to fiscal 2024 year-end, due to the timing of our milestone billings on fixed-price contracts which were different from the timing of revenue recognition on those contracts.

For the first halves of fiscal 2025 and 2024, we recognized revenue of approximately $ 175 million and $ 177 million, respect ively, from the amounts included in the contract liability balances at the end of fiscal 2024 and 2023, respectively.

(1) Incl udes $ 11.7 million an d $ 7.9 million of contract retentions at June 29, 2025 and September 29, 2024, respectively.

(2) Reported under "Other non-current liabilities" on our consolidated balance sheet as of June 29, 2025.

Our contract assets and contract liabilities increased in the third quarter of fiscal 2025 compared to fiscal 2024 year-end, due to the timing of our milestone billings on fixed-price contracts which were different from the timing of revenue recognition on those contracts.

For th e first nine months of fiscal 2025 and 2024, we recognized revenue of approximately $ 213 million a nd $ 214 million, respect ively, from the amounts included in the contract liability balances at the end of fiscal 2024 and 2023, respectively.

Revenue is recognized by measuring progress over time under Accounting Standards Codification Topic 606, "Revenue from Contracts with Customers".

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Changes in those estimates could result in the recognition of cumulative catch-up adjustments to the contract’s inception-to-date revenue, costs and profit in the period in which such changes are made.

As a result, for the second quarters and first halves of fiscal 2025 and 2024, we recognized net favorable revenue and operating income adjustments of $ 3.9 million and $ 4.1 million, respectively, and $ 6.6 million and $ 9.9 million, respectively.

As a result, for the third quarter and first nine months of fiscal 2025, we recognized net favorable revenue and operating income adjustments of $ 9.9 million and $ 16.5 million, respectively, compared to $ 6.5 million and $ 16.4 million, respectively, for the fiscal 2024 periods.

C hanges in revenue and cos t estimates could also result in a projected loss, determined at the contract level, which would be recorded immediately in earnings.

At March 30, 2025 and September 29, 2024, our consolidated balance sheets included liabilities for anticipated losses of $ 12.6 million and $ 15.1 million, respectively.

The estimated cost to complete these related contracts was approximately $ 82 million and $ 101 million at March 30, 2025 and September 29, 2024, respectively.

At June 29, 2025 and September 29, 2024, our consolidated balance sheets included liabilities for anticipated losse s of $ 12.8 million and $ 15.1 million, respectively.

The estimated cost to complete these related contracts was approximately $ 73 million and $ 101 million at June 29, 2025 and September 29, 2024, respectively.

Accounts Receivable, Net

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Total accounts receivable, net $ 1,127,519 $ 1,051,461

Billed accounts receivable represent amounts billed to clients that have not been collected.

Billed accounts receivable represent amounts billed to clients that have not yet been collected.

Unbilled accounts receivable, which represent an unconditional right to payment subject only to the passage of time, include unbilled amounts typically resulting from revenue recognized but not yet billed pursuant to contract terms or billed after the period end date.

Substantially all of our unbilled receivables at March 30, 2025 are expected to be billed and collecte d within 12 months.

Substantially all of our unbilled receivables at June 29, 2025 are expected to be billed and collecte d within 12 months.

The allowance for doubtful accounts represents amounts that are expected to become uncollectible or unrealizable in the future.

We determine an estimated allowance for uncollectible accounts based on management's consideration of trends in the actual and forecasted credit quality of our clients, including delinquency and payment history;

We estimate the allowance for uncollectible accounts based on management's consideration of trends in the actual and forecasted credit quality of our clients, including client delinquency and payment history;

type of client, such as a government agency or a commerci al sector client;

and general economic and industry conditions , which may affect our clients' ability to pay.

and general economic and industry conditions that may affect our clients' ability to pay.

Other than the U.S.

federal government, no single client accounted for more than 10% of our accounts receivable at March 30, 2025 and September 29, 2024.

federal government, no single client accounted for more than 10% of our accounts receivable at June 29, 2025 and September 29, 2024 .

Remaining Unsatisfied Performance Obligation (“RUPO”)

Our RUPO represents a measure of the total dollar value of work to be performed on contracts awarded and in progress.

We h ad $ 4.3 billion of RUPO at March 30, 2025 .

We h a d $ 4.2 billion of RUPO at June 29, 2025 .

Our RUPO increases with awards from new contracts or additions on existing contracts, and decreases as work is performed and revenue is recognized on existing contracts.

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We include a contract within our RUPO when the contract is awarded and an agreement on contract terms has been reached.

We expect to satisfy our RUPO at March 30, 2025 over the following periods (in thousands):

We expect to satisfy our RUPO at June 29, 2025 over the following periods (in thousands):

Within 12 months $ 3,010,726

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authorities, financial lenders and private development companies.

CAW is a financially immaterial acquisition with an initial purchase price of € 5.3 million ($ 5.7 million) and is included in our Commercial/International Services Group ("CIG") segment.

As a result, no additional disclosures have been provided.

In the third quarter of fiscal 2025, we also acquired SAGE Group Holdings ("SAGE"), an Australian consulting firm that provides innovative technology and high-quality automation services that optimize operational efficiency and drive digital transformation for commercial and government clients across the municipal water, energy, transportation, defense and manufacturing sectors.

Both CAW and SAGE are included in our Commercial/International Services Group ("CIG") segment.

The aggregate fair value of the purchase price of these two acquisitions was $ 147 million.

This amount consisted of $ 104 million in initial cash payments and $ 43 million of the estimated fair value of contingent earn-out obligations, with a maximum of $ 60 million, based on the achievement of specified operating income targets in each of the three years following their respective acquisition dates.

The $ 147 million purchase price was allocated $ 13 million to net tangible assets, $ 22 million to identifiable intangible assets, $ 6 million to deferred income tax liability, $ 3 million to purchase price receivable and $ 115 million to goodwill.

The purchase price allocations for these acquisitions are preliminary and subject to adjustment as the estimates, assumptions, valuations and other analyses have not yet been finalized in order to make a definitive allocation.

In the second quarter of fiscal 2024, we acquired LS Technologies ("LST"), an innovative U.S.

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The aggregate fair value of the purchase price of these two acquisitions was $ 120 million.

This amount consisted of $ 93 million in initial cash payments, $ 4 million of cash holdback related to a tax reserve, and $ 23 million for the estimated fair value of contingent earn-out obligations, with a maximum of $ 60 million, based upon the achievement of specified operating income targets in each of the three years following the acquisition dates.

The $ 120 million purchase price was allocated $ 12 million to net tangible assets, $ 23 million to identifiable intangible assets, and $ 85 million to goodwill.

All of these acquisitions were not considered material, individually or in aggregate, to our consolidated financial statements.

All of the aforementioned acquisitions in fiscal 2025 and 2024 were not considered material, individually or in aggregate, to our consolidated financial statements.

As a result, no pro forma information has been provided.

The fiscal 2025 goodwill addition from the CAW acquisition relates to anticipated synergies related to proven systems and technology in program management, cost management and project controls which will provide superior project outcomes to defense, government and commercial customers, as delivered by a workforce with extensive technical exper tise.

The fiscal 2025 goodwill additions from CAW and SAGE acquisitions reflect the anticipated synergies related to proven systems and technology in project management, cost management, project controls and automation services which will provide superior project outcomes and drive digital transformation for defense, government and commercial customers, as delivered by a workforce with extensive technical expertise.

Our fiscal 2024 goodwill additions from the LST and CCE acquisitions reflect the extensive technical knowledge of the acquired workforces, the anticipated syne rgies in data analytics, cybersecurity and digital transformation services, and collective reputations of these acquisitions in providing mission critical solutions to both commercial and government customers.

The fiscal 2024 goodwill additions are deductible for tax purposes, and the fiscal 2025 goodwill addition is not.

Goodwill additions in fiscal 2024 are tax-deductible, whereas those in fiscal 2025 are not.

Intangible assets with finite lives arise from business acquisitions and are amortized based on the period over which the contractual or economic benefit of the intangible assets are expected to be realized on a straight-line basis over the useful lives of the underlying assets, ranging from one to 12 years.

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Ultimately, the liability will be equivalent to the amount paid, and the difference between the fair value estimate and amount paid will be recorded in earnings.

The amount paid that is less than or equal to the contingent earn-out liability on the acquisition date is reflected as cash used in financing activities in our consolidated statements of cash flows.

The amount paid that is less than or equal to the contingent

earn-out liability on the acquisition date is reflected as cash used in financing activities in our consolidated statements of cash flows.

Any amount paid in excess of the contingent earn-out liability on the acquisition date is reflected as cash used in operating activities in our consolidated statements of cash flows.

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Adjustments to the estimated fair value related to changes in all other unobservable inputs are reported in operating income .

In the first half of fiscal 2025, we evaluated our estimates for contingent consideration liabilities for the remaining earn-out periods for each individual acquisition, which included a review of their financial results to-date, the status of ongoing projects in their RUPO and the inventory of prospective new contract awards.

In the third quarter of fiscal 2025, we evaluated our estimates for contingent consideration liabilities for the remaining earn-out periods for each individual acquisition, which included a review of their financial results to-date, the status of ongoing projects in their RUPO and the inventory of prospective new contract awards.

The following table summarizes the changes in the fair value of estimated contingent consideration (in thousands):

Three Months Ended Six Months Ended

2025 March 31,

2024 March 30,

2025 March 31,

Three Months Ended Nine Months Ended

2025 June 30,

2024 June 29,

2025 June 30,

Beginning balance $ 31,270 $ 74,579 $ 48,746 $ 73,422

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Ending balance $ 69,731 $ 70,283 $ 69,731 $ 70,283

At March 30, 2025, there was a total potential maximum of $ 90.6 million of outstanding contingent consideration related to acquisitions.

As of June 29, 2025, the total potential maximum o utstanding contingent consideration related to acquisitions was $ 124 million .

Goodwill and Intangible Assets

5 unchanged sentences

Translation adjustments 1,730 13,844 15,574

Balance at March 30, 2025 $ 656,130 $ 1,257,004 $ 1,913,134

Balance at June 29, 2025 $ 660,131 $ 1,424,741 $ 2,084,872

Translation adjustments resulted from our goodwill amounts in foreign subsidiaries with functional currencies that are different than our reporting currency.

Th e goodwill amoun ts presented in the table above are net of reductions from historical impairment adjustments.

The gross amounts for GSG were $ 766.2 million and $ 768.5 million at March 30, 2025 and September 29, 2024, respectively, excluding accumulated impairment of $ 110.1 million and $ 17.7 million, respectively, at each date.

The gross amounts of goodwill for CIG were $ 1,378.5 million and $ 1,417.3 million at March 30, 2025 and September 29, 2024, respectively, excluding accumulated impairment of $ 121.5 million at each period end.

The gross amounts for GSG we re $ 770.2 million and $ 768.5 million at June 29, 2025 and September 29, 2024, respectively, excluding accumulated impairment of $ 110.1 million and $ 17.7 million, respectively, at each date.

The gross amounts of goodwill for CIG were $ 1,546.3 million and $ 1,417.3 million at June 29, 2025 and September 29, 2024, respectively, excluding accumulated impairment of $ 121.5 million at each period end.

We perform our annual goodwill impairment review at the beginning of our fiscal fourth quarter.

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GDS provides consulting and engineering services for international development agencies supporting humanitarian programs worldwide.

Although several agencies are supported by this work (primarily for the U.S., Australia and United Kingdom governments), over eighty percent of the activity is for the United States Agency for International Development ("USAID").

Although several

agencies are supported by this work (primarily for the U.S., Australia and United Kingdom governments), over eighty percent of the activity has historically been for the United States Agency for International Development ("USAID").

On January 20, 2025, President Trump signed Executive Order 14169, titled "Reevaluating and Realigning United States Foreign Aid", which initiated a 90-day pause on all U.S.

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The following table presents the gross amount and accumulated amortization of our acquired identifiable intangible assets with finite useful lives included in “Intangible assets, net” on the consolidated balance sheets ($ in thousands):

March 30, 2025 September 29, 2024

June 29, 2025 September 29, 2024

Remaining Life

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Total $ 287,708 $ ( 129,956 ) $ 157,752 $ 314,846 $ ( 154,261 ) $ 160,585

Amortization expense for the identifiable intangible assets for the second quarter and first half of fiscal 2025 was $ 8.6 million and $ 19.3 million, compared to $ 12.1 million and $ 24.6 million, respectively, for the prior-year periods.

Amortization expense for the identifiable intangible assets for the third quarter and first nine months of fi scal 2025 was $ 8.3 million and $ 27.6 million, compared to $ 13.8 million and $ 38.4 million, respectively, for the prior-year peri ods.

Estimated amortization expense for the remainder of fiscal 2025 and succeeding years is as follows (in thousands):

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Property and equipment, net $ 70,302 $ 73,065

For the second quart er and first half of fiscal 2025 , o ur depreciation expense related to property and equipment was $ 5.2 million and $ 10.6 million, respectively, compared to $ 5.6 million and $ 12.6 million, respectively, for the fiscal 2024 periods.

For the third quart er and first nine months of fiscal 2025 , o ur depreciation expense related to property and equipment wa s $ 5.4 million and $ 16.1 million, r espectively, compared to $ 5.7 million and $ 18.3 million, respectively, for the fiscal 2024 periods.

Stock Repurchase and Dividends

On October 5, 2021, our Board of Directors authorized a stock repurchase program under which we could repurchase up to $ 400 million of our common stock.

In the first half of fiscal 2025, we repurchased and settled 5,165,715 shares with an average price of $ 33.87 per share for a total cost of $ 175.0 million in the open market.

We did not repurchase any shares of our common stock in the first half of fiscal 2024.

At March 30, 2025, we had a remaining balance of $ 172.8 million under our stock repurchase program.

The following table presents dividends declared and paid in the first halves of fisc al 2025 and 2024 :

On May 5, 2025, our Board of Directors authorized an additional $ 500 million stock repurchase program in addition to the previous $ 400 million stock repurchase program authorized on October 5, 2021.

In the first nine months of fiscal 2025, we repurchased and settled 5,933,085 shares with an average price of $ 33.71 per share for a total cost of $ 200.0 million in the open market.

We did not repurchase any shares of our common stock in the first nine months of fiscal 2024.

At June 29, 2025, we had a remaining balance of $ 647.8 million under our stock repurchase programs.

The following table presents dividends declared and paid in the first nine months of fisc al 2025 and 2024 :

Declare Date Dividend Paid Per Share Record Date Payment Date Dividend Paid

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January 27, 2025 0.058 February 12, 2025 February 26, 2025 15,351

Total dividend paid as of March 30, 2025 $ 30,900

May 5, 2025 0.065 May 23, 2025 June 5, 2025 17,092

Total dividend paid as of June 29, 2025

November 13, 2023 $ 0.052 November 30, 2023 December 13, 2023 $ 13,873

January 29, 2024 0.052 February 14, 2024 February 27, 2024 13,908

Total dividend paid as of March 31, 2024 $ 27,781

April 29, 2024 0.058 May 20, 2024 May 31, 2024 15,522

Total dividend paid as of June 30, 2024

Subsequent Events.

On May 5, 2025, our Board of Directors declared a quarterly cash dividend of $ 0.065 per share payable on June 5, 2025 to stockholders of record as of the close of business on May 23, 2025.

On May 5, 2025, our Board of Directors also authorized an additional $ 500 million stock repurchase program.

On July 28, 2025, our Board of Directors declared a quarterly cash dividend of $ 0.065 per share payable on August 29, 2025 to stockholders of record as of the close of business on August 15, 2025.

Our operating leases are primarily for corporate and project office spaces.

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The components of lease costs are as follows (in thousands):

Three Months Ended Six Months Ended

2025 March 31,

2024 March 30,

2025 March 31,

Three Months Ended Nine Months Ended

2025 June 30,

2024 June 29,

2025 June 30,

Operating lease cost $ 25,408 $ 24,562 $ 76,147 $ 73,580

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Supplemental cash flow information related to leases is as follows (in thousands):

Six Months Ended

2025 March 31,

Nine Months Ended

2025 June 30,

Operating cash flows for operating leases $ 56,941 $ 56,379

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Operating leases 4.0 % 3.6 %

At March 30, 2025, we h ad $ 12.7 million of op erating leases that have not yet commenced.

A maturity analysis of the future undiscounted cash flows associated with our lease liabilities at March 30, 2025 is as follows (in thousands):

At June 29, 2025, we h a d $ 7.1 million of o p erating leases that have not yet commenced.

A maturity analysis of the future undiscounted cash flows associated with our lease liabilities at June 29, 2025 is as follows (in thousands):

2025 (remaining) $ 19,175

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In fiscal 2020, the Canadian federal government implemented the Canadian Emergency Wage Subsidy ("CEWS") program in response to the negative impact of the coronavirus disease 2019 pandemic on businesses operating in Canada.

of our Canadian legal entities qualified for and applied for these CEWS cash benefits to partially offset the impacts of revenue reductions and on-going staffing costs.

Some of our Canadian legal entities qualified for and applied for these CEWS cash benefits to partially offset the impacts of revenue reductions and on-going staffing costs.

The $ 21 million total received was initially recorded in "Other long-term liabilities" until all potential ame ndments to the qualification criteria, including some that were proposed with retroactive application, were finalized in fiscal 2022.

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Stockholders’ Equity and Stock Compensation Plans

We recogniz e the fair value of our stock-based awards as compensation expense on a straight-line basis over the requisite service peri od in which the award vests.

Stock-based compensation expense for the three and six months ended March 30, 2025 was $ 8.9 million and $ 17.0 million, compared to $ 8.0 million and $ 15.6 million for the same periods last year.

We recogniz e the fair value of our stock-based awards as compensation expense on a straight-line basis over the requisite service period in which the award vests.

Stock-based compensation expense for the three and nine months ended June 29, 2025 was $ 8.8 million and $ 25.8 million, compared to $ 8.1 million and $ 23.7 million for the same periods last year.

Most of these amounts were included in our selling, general and administrative expenses on our consolidated statements of income.

In the first half of fiscal 2025, we awarded 236,928 performance share units (“PSUs”) to our non-employee directors and executive officers at an estimated fair value of $ 49.85 per share on the award date.

In the first nine months of fiscal 2025, we awarded 233,789 performance share units (“PSUs”) to our non-employee directors and executive officers at an estimated fair value of $ 49.82 per share on the award date.

All PSUs are performance-based and vest, if at all, after the conclusion of the three-year performance period.

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Additionally, we awarded 488,093 restricted stock units (“RSUs”) to our non-employee directors, executive officers and employees at a fair value of $ 40.24 per share on the award date.

All exe cutive officer and employee RSUs have time-based vesting over a four-year period, and the non-employee director RSUs vest after one year .

All executive officer and employee RSUs have time-based vesting over a four-year period, and the non-employee director RSUs vest after one year .

Earnings per Share (“EPS”)

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Potential common shares include the weighted-average dilutive effects of stock-based awards and shares underlying our Convertible Senior Notes (the "Convertible Notes").

For the first half of fiscal 2025, our Convertible Notes, described in Note 15, "Long-Term Debt", had a dilution impact on the dilutive potential common shares, which was calculated using the if-converted method.

For the third quarter of fiscal 2024 and the first nine months of fiscal 2025 and 2024, our Convertible Notes, described in Note 14, "Long-Term Debt", had a dilution impact on the dilutive potential common shares, which was calculated using the if-converted method.

The dilution impact was due to the price of our common stock exceeding the conversion price.

For the second quarter and first half of fiscal 2024, and the second quarter of fiscal 2025, the Convertible Notes had no impact on the calculation of dilutive potential common shares, as the price of our common stock did not exceed the conversion price.

For the third quarter of fiscal 2025, the Convertible Notes had no impact on the calculation of dilutive potential common shares, as the price of our common stock did not exceed the conversion price.

The related capped call transactions (the "Capped Call Transactions") for all of these periods were excluded from the calculation of dilutive potential common shares as their effect is anti-dilutive.

For the second quarters and first halves of fiscal 2025 and 2024, no options were excluded from the calculation of dilutive potential common shares.

For the third quarters and first nine months of fiscal 2025 and 2024, no options were excluded from the calculation of dilutive potential common shares.

The following table presents the number of weighted-average shares used to compute basic and diluted EPS (in thousands, except per share data):

Three Months Ended Six Months Ended

2025 March 31,

2024 March 30,

2025 March 31,

Three Months Ended Nine Months Ended

2025 June 30,

2024 June 29,

2025 June 30,

Net income attributable to Tetra Tech $ 113,844 $ 85,810 $ 119,979 $ 237,228

6 unchanged sentences

Diluted $ 0.43 $ 0.32 $ 0.45 $ 0.88

The effective tax rates for the first halves of fiscal 2025 and 2024 were 86.7 % and 27.6 %, respectively.

Income tax expense was reduced by $ 1.0 million and $ 1.9 million of excess tax benefits on share-based payments in the first halves of fiscal 2025 and 2024, respectively.

In addition, in the first half of fiscal 2025, we recognized a $ 92.4 million goodwill impairment as described in Note 5, “Goodwill and Intangible Assets”.

The effective tax rates for the first nine months of fiscal 2025 and 2024 we re 40.9 % and 27.7 %, respectively.

Income tax expense was reduced by $ 1.0 million and $ 2.9 million of excess tax benefits on share-based payments in the first nine months of fiscal 2025 and 2024, respectively.

In addition, in fiscal 2025, w e recognized a $ 92.4 million goodwill impairment as described in Note 5, “Goodwill and Intangible Assets”.

We determined that $ 58.3 million of goodwill impairment is not deductible for income tax purposes.

We also recognized a $ 115.0 million non-recurring charge related to legal contingencies as described in Note 17, " Commitments and Contingencies ".

We also recognized a $ 115.0 million non-recurring charge related to legal contingencies as describe d in Note 17, "Commitments and Contingencies".

We determined that $ 31.3 million of this charge is not tax deductible.

Furthermore, income tax expense in the first half of fiscal 2024 (all in the second quarter) included $ 2.8 million of expense for the settlement of various tax positions that were under audit for fiscal years 2018 through 2021.

Excluding the impact of the excess tax benefits on share-based payments, the goodwill impairment and the legal contingency charge in the first half of fiscal 2025 and the settlement amounts in the first half of 2024, our effective tax rates in the first halves of fiscal 2025 and 2024 were 27.8 % and 27.1 %, respectively.

At March 30, 2025 and September 29, 2024, the liability for income taxes associated with uncertain tax positions was $ 52.2 million and $ 50.1 million, respectively.

It is reasonably possible that the amount of the unrecognized benefit with respect to certain of our unrecognized tax positions may not significantly decrease within the next 12 months.

Furthermore, income tax expense in the first nine months of fiscal 2024 included $ 4.3 million of expense for the settlement of various tax positions that were under audit for fiscal years 2018 through 2021.

Excluding the impact of the excess tax benefits on share-based payments, the goodwill impairment and the legal contingency charge in th e first nine months of fiscal 2025 and the settlement amounts in the first nine months of 2024, our effective tax rates in the first nine months of fiscal 2025 and 2024 we re 27.6 % and 27.2 %, r espectively.

At June 29, 2025 and September 29, 2024, the liability for income taxes associated with uncertain tax positions was $ 52.3 million and $ 50.1 million, respectively.

It is reasonably possible that the amount of the unrecognized benefit with respect to certain of our unrecognized tax positions may significantly decrease within the next 12 months.

These liabilities represent our current estimates of the additional tax liabilities that we may be assessed when the related audits are concluded.

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All significant intercompany balances and transactions are eliminated in consolidation.

Our Corporate Segment's operating income in the first half of fiscal 2025, includes a non-recurring charge of $ 115.0 million related to legal contingencies as described in Note 17, "Commitments and Contingencies".

This charge is reported separately as "Legal contingency costs" in our consolidated statement of income for the first half of fiscal 2025.

We paid $ 57 million in the second quarter of fiscal 2025, and we expect to pay the remainder within the next 12 months with our cash on hand and by drawing on our credit facilit y.

For the second quarter and first half of fiscal 2025, we recorded a non-cash goodwill impairment charge of $ 92.4 million related to our GDS reporting unit, which resulted from the cancellation of USAID programs in the second quarter of fiscal 2025.

In the first nine months of fiscal 2025, our Corporate Segment's operating income includes a non-recurring charge of $ 115.0 million related to legal contingencies as described in Note 17, "Commitments and Contingencies".

This charge is reported separately as "Legal contingency costs" in our consolidated statement of income for the first nine months of fiscal 2025.

Of this amount, we paid $ 57 million in the second quarter of fiscal 2025.

Subsequent to the end of the third quarter of fiscal 2025, we paid an additional $ 40 million, and we expect to pay the remainder of these legal contingency costs within the next 12 months.

In the first nine months of fiscal 2025, we also recorded a non-cash goodwill impairment charge of $ 92.4 million related to our GDS reporting unit, which resulted from the cancellation of USAID programs in the second quarter of fiscal 2025.

The following tables summarize financial information regarding our reportable segments (in thousands):

Three Months Ended Six Months Ended

2025 March 31,

2024 March 30,

2025 March 31,

Three Months Ended Nine Months Ended

2025 June 30,

2024 June 29,

2025 June 30,

GSG $ 673,022 $ 640,553 $ 2,086,229 $ 1,812,721

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(1) Corporate assets consist of intercompany eliminations and assets not allocated to our reportable segments including goo dwill, intangible assets, deferred income taxes and certain other assets.

Fair Value Measurements

We classified our assets and liabilities that were carried at fair value in one of the following categories:

Quoted market prices in active markets for identical assets or liabilities.

Observable market-based inputs or unobservable inputs that are corroborated by market data.

Unobservable inputs that are not corroborated by market data.

Contingent Consideration.

We measure our contingent earn-out liabilities at fair value on a recurring basis usin g significant unobservable inputs classified within Level 3 of the fair value hierarchy (see Note 4 , " Acquisitions " for further information).

The fair value of long-term debt under our credit facility was determined using the present value of future cash flows based on the borrowing rates currently available for debt with similar terms and maturities (Level 2 measurement, as described in “Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K for the fiscal year ended September 29, 2024).

The carrying value of our long-term debt under our credit facility approximated fair value at March 30, 2025 and September 29, 2024.

At March 30, 2025, we had $ 450 million in outstanding borrowings under the Third Amended and Restated Credit Agreement, which consiste d of $ 250 million under our term loan facility and $ 200 million under our revolving credit facility .

The estimated fair value of our $ 575 million Co nvertible Notes, which were used to fund our business acquisitions, working capital needs, dividends, capital expenditures and contingent earn-outs, was determined based on the trading price of the Convertible Notes as of the last trading day of our second quarter of fiscal 2025.

We consider the fair value of the Convertible Notes to be a Level 2 measurement as they are not actively traded in markets.

The carrying amounts and estimated fair values of the Convertible Notes were approximately $ 565 million and $ 592 million, respectively, at March 30, 2025, and $ 564 million and $ 743 million, respectively, at September 29, 2024 (see Note 15 , " Long-Term Debt " for further information).

Long-Term Debt

4 unchanged sentences

Debt issuance costs and discount ( 12,517 ) ( 12,366 )

Total 1,014,189 812,634

Current portion of long-term debt ( 250,000 ) —

Long-term debt $ 862,483 $ 812,634

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The conversion rate is subject to adjustment for certain events, including stock splits and issuance of certain stock dividends on our common stock.

At March 30, 2025, the applicable conversion rate was 25.4382 shares of common stock per $1,000 principal amount of the Convertible Notes (equivalent to an adjusted conversion price of approximately $ 39.31 per share of common stock).

At June 29, 2025, the applicable conversion rate was 25.4522 shares of common stock per $1,000 principal amount of the Convertible Notes (equivalent to an adjusted conversion price of approximately $ 39.29 per share of common stock).

Upon conversion, we will pay cash up to the aggregate principal amount of the Convertible Notes to be converted and pay or de liver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election, in respect of the remainder, if any, of our conversion obligation in excess of the aggregate principal amount of the Convertible Notes being converted.

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We used approximately $ 51.8 million of the net proceeds to pay the cost of the Capped Call Transactions described below.

We used the remaining net proceeds to repay all $ 185.0 million principal amount outstanding under our revolving credit facility, the remaining $ 234.4 million principal amount outstanding under our senior secured term loan due 2027 and approximately $ 89.4 million principal amount outstanding under our senior secured term loan due 2026.

We used the remaining net proceeds to repay all $ 185.0 million principal amount outstanding under our revolving credit facility and the remaining $ 234.4 million principal amount outstanding under our senior secured term loan due 2027 under the Second Amended and Restated Credit Agreement, as well as approximately $ 89.4 million principal amount outstanding under our senior secured term loan due 2026 under the Third Amended and Restated Credit Agreement.

The Convertible Notes were recorded as a single unit within "Long-term debt" in our consolidated balance sheets as the conversion option within the Convertible Notes was not a derivative that would require bifurcation, and the Convertible Notes did not involve a substantial premium.

Transaction costs to issue the Convertible Notes were recorded as direct

deductions from the related debt liabilities and are amortized to interest expense using the effective interest method over the terms of the Convertible Notes resulting in an effective annual interest rate of 2.79 %.

Transaction costs to issue the Convertible Notes were recorded as direct deductions from the related debt liabilities and are amortized to interest expense using the effective interest method over the terms of the Convertible Notes resulting in an effective annual interest rate of 2.79 %.

The net carrying amount of the Convertible Notes was as follows (in thousands) :

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The following table sets forth the interest expense recognized related to the Convertible Notes (in thousands) :

Three Months Ended Six Months Ended

2025 March 31,

2024 March 30,

2025 March 31,

Three Months Ended Nine Months Ended

2025 June 30,

2024 June 29,

2025 June 30,

Interest expense $ 3,234 $ 3,234 $ 9,703 $ 9,631

6 unchanged sentences

The cap price is subject to adjustment for certain events, including stock splits and issuance of certain stock dividends on our common stock.

At March 30, 2025, the adjusted cap price was approximately $ 51.89 per share.

At June 29, 2025, the adjusted cap price was approximately $ 51.86 per share.

We recorded the Capped Call Transactions as separate transactions from the issuance of the Convertible Notes.

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On February 18, 2022, we entered into Amendment No.

2 to Second Amended and Restated Credit Agreement (“Second Amended Credit Agreement”) with a total borrowing capacity of $ 1.05 billion that will mature in February 2027.

The Second Amended Credit Agreement is a $ 750 million senior secured, five-year facility that provides for a $ 250 million term loan facility (the “Amended Term Loan Facility”) and a $ 500 million revolving credit facility (the “Amended Revolving Credit Facility”).

In addition, the Second Amended Credit Agreement includes a $ 300 million accordion feature that allows us to increase the Second Amended Credit Agreement to $ 1.05 billion subject to lender approval.

The Second Amended Credit Agreement provides for, among other things, (i) refinance indebtedness under our Credit Agreement dated at July 30, 2018;

(ii) finance open market repurchases of common stock, acquisitions, and cash dividends and distributions;

and (iii) utilize the proceeds for working capital, capital expenditures and other general corporate purposes.

The Second Amended Credit Agreement provides for a reduction in the interest grid for meeting certain sustainability targets related to the (i) reduction of greenhouse gas emissions through the Company’s projects and operational sustainability initiatives and (ii) improvement of peoples’ lives as a result of the Company’s projects that provide environmental, social and governance benefits.

The Amended Revolving Credit Facility includes a $ 100 million sublimit for the issuance of standby letters of credit, a $ 20 million sublimit for swingline loans and a $ 300 million sublimit for multicurrency borrowings and letters of credit.

The entire Amended Term Loan Facility was drawn on February 18, 2022.

We may borrow on the Amended Revolving Credit Facility, at our option, at either (a) a benchmark rate plus a margin that ranges from 1.000 % to 1.875 % per annum, or (b) a base rate for loans in U.S.

dollars (the highest of the U.S.

federal funds rate plus 0.50 % per annum, the bank’s prime rate or the Secured Overnight Financing Rate ("SOFR") rate plus 1.00 %, plus a margin that ranges from 0 % to 0.875 % per annum.

In each case, the applicable margin is based on our Consolidated Leverage Ratio, calculated quarterly.

The Amended Term Loan Facility is subject to the same interest rate provisions.

The Second Amended Credit Agreement expires on February 18, 2027, or earlier at our discretion upon payment in full of loans and other obligations.

In fiscal 2023, we repaid the Amended Term Loan Facility in full from the Convertible Notes proceeds.

On October 26, 2022, we entered into a Third Amended and Restated Credit Agreement (“Third Amended Credit Agreement”) that provided for an additional $ 500 million senior secured term loan facility (the "New Te rm Loan Facility") increasing our total borrowing capacity to $ 1.55 billion.

On January 23, 2023, we drew the entire amount of the New Term Loan Facility to partially finance the RPS acquisition.

The New Term Loan Facility is not subject to any amortization payments of principal and matures in January 2026.

At March 30, 2025, we had $ 450 million in outstanding borrowings under the Third Amended Credit Agreement, which consiste d of $ 250 million under the New Term Loan Facility and $ 200 million under the Amended Revolving Credit Facility.

During the three months ended March 30, 2025, the weighted-average interest rate of the outstanding borrowings under the Third Amended Credit Agreement was 5.78 %.

In addition, we had $ 0.7 million in standby letters of credit under the Third A mended Credit Agreement.

At March 30, 2025, we had $ 299.3 million of available credit under the Amended Revolving Credit Facility, all of which could be borrowed without a violation of our debt covenants.

The Third Amended Credit Agreement contains certain affirmative and restrictive covenants, and customary events of default.

The financial covenants provide for a maximum Consolidated Leverage Ratio of 3.25 to 1.00 (total funded debt/EBITDA, as defined in the Third Amended Credit Agreement) and a minimum Consolidated Interest Coverage Ratio of 3.00 to 1.00 (EBITDA/Consolidated Interest Charges, as defined in the Third Amended Credit Agreement).

Our obligations under the Third Amended Credit Agreement are guaranteed by certain of our domestic subsidiaries and are secured by first priority liens on (i) the equity interests of certain of our subsidiaries, including those subsidiaries that are guarantors or borrowers under the Third Amended Credit Agreement, and (ii) the accounts receivable, general intangibles and intercompany loans and those of our subsidiaries that are guarantors or borrowers.

At March 30, 2025, we were in compliance with these covenants with a consolidated leverage ratio of 1.63 x and a consolidated interest coverage ratio of 15.81 x.

In addition to the Third Amended Credit Agreement, we maint ain other credit facilities, which may be used for short-term cash advances and bank guarantees.

At March 30, 2025, there were no outstanding borrowings under these facilities and the aggregate amount of standby letters of credit outstanding was $ 39.9 million.

As of March 30, 2025, we had no bank overdrafts related to our disbursement bank accounts.

Subsequent Event .

2 to the Second Amended and Restated Credit Agreement (“Second Amended Credit Agreement”) with a total borrowing capacity of $ 1.05 billion that was scheduled to mature in February 2027.

The Second Amended Credit Agreement consisted of a $ 750 million senior secured, five-year facility that provided for a $ 250 million term loan facility ("Second Term Loan Facility") and a $ 500 million revolving credit facility ("Second Revolving Credit Facility").

On October 26, 2022, we entered into a Third Amended and Restated Credit Agreement (“Third Amended Credit Agreement”) that provided for an additional $ 500 million senior secured term loan facility (Third Term Loan Facility") increasing our total borrowing capacity to $ 1.55 billion.

On January 23, 2023, we drew the entire amount of the $ 500 million term loan facility which was scheduled to mature in January 2026.

On May 5, 2025 we repaid all facilities in full as detailed below.

On May 5, 2025, we entered into a Fourth Amended and Restated Credit Agreement (“Amended Credit Agreement”) with a total borrowing capacity of $ 1.5 billion that will mature in May 2030.

The Amended Credit Agreement is a $ 1.1 billion senior secured, five-year facility that provides for a $ 250 million 3-year term loan facility (the “3Y Term Loan Facility”), a $ 250 million 5-year term loan facility (“the 5Y Term Loan Facility”), and a $ 600 million revolving credit facility (the “New Amended Revolving Credit Facility”).

In addition, the Amended Credit Agreement includes a $ 400 million accordion feature that allows us to increase the Amended Credit Agreement to $ 1.5 billion subject to lender approv al.

In addition, the Amended Credit Agreement includes a $ 400 million accordion feature that allows us to increase the Amended Credit Agreement to $ 1.5 billion subject to lender approval.

The 3Y Term Loan Facility will not be subject to any scheduled amortization of principal.

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and (iii) utilize the proceeds for working capital, capital expenditures and other general corporate purposes.

The Amended Credit Agreement provides for a reduction in the pricing levels of the Consolidated Leverage Ratio and the removal of the SOFR credit spread adjustment.

The New Amended Revolving Credit Facility includes a $ 100 million sublimit for the issuance of standby letters of credit, a $ 20 million sublimit for swingline loans, and a $ 400 million sublimit for multicurrency borrowings and letters of credit.

The Amended Credit Agreement provides for a reduction in the pricing levels of the Consolidated Leverage Ratio and the removal of the Secured Overnight Financing Rate ("SOFR") credit spread adjustment.

The Amended Revolving Credit Facility includes a $ 100 million sublimit for the issuance of standby letters of credit, a $ 20 million sublimit for swingline loans, and a $ 400 million sublimit for multicurrency borrowings and letters of credit.

The entire 3Y Term Loan Facility and 5Y Term Loan Facility were drawn on May 5, 2025.

The proceeds from these term loans were used to pay down our New Term Loan Facility and the Amended Revolving Credit Facility in full on May 5, 2025.

We may borrow on the New Amended Revolving Credit Facility, at our option, at either (a) a benchmark rate plus a margin that ranges from 1.000 % to 1.750 % per annum, or (b) a base rate for loans in U.S.

The proceeds from these term loans were used to pay down our Third Term Loan Facility and the Second Revolving Credit Facility in full on May 5, 2025.

We may borrow on the Amended Revolving Credit Facility, at our option, at either (a) a benchmark rate plus a margin that ranges from 1.000 % to 1.750 % per annum, or (b) a base rate for loans in U.S.

dollars (the highest of the U.S.

4 unchanged sentences

The Amended Credit Agreement expires on May 5, 2030, or earlier at our discretion upon payment in full of loans and other obligations.

At June 29, 2025, we had $ 300 million in outstanding borrowings under the Amended Credit Agreement, which consisted of $ 100 million under the 3Y Term Loan Facility, $ 200 million under the 5Y Term Loan Facility and no borrowings under the Amended Revolving Credit Facility.

For the first nine months of fiscal 2025, the weighted-average interest rate of the outstanding borrowings under the credit facilities was 5.66 %.

I n addition, we had $ 0.7 million in standby letters of credit under the Amended Credit Agreement.

At June 29, 2025, we had $ 599.3 million of available credit under the Amended Revolving Credit Facility, all of which could be borrowed without a violation of our debt covenants.

The Amended Credit Agreement contains certain affirmative and restrictive covenants, and customary events of default.

The financial covenants provide for a maximum Consolidated Leverage Ratio of 3.50 to 1.00 (total funded debt/EBITDA, as defined in the Amended Credit Agreement) and a minimum Consolidated Interest Coverage Ratio of 3.00 to 1.00 (EBITDA/Consolidated Interest Charges, as defined in the Amended Credit Agreement).

Our obligations under the Amended Credit Agreement are guaranteed by certain of our domestic subsidiaries and are secured by first priority liens on (i) the equity interests of certain of our subsidiaries, including those subsidiaries that are guarantors or borrowers under the Amended Credit Agreement, and (ii) the accounts receivable, general intangibles and intercompany loans and those of our subsidiaries that are guarantors or borrowers.

At June 29, 2025, we were in compliance with these covenants with a consolidated leverage ratio of 1.31 x and a consolidated interest coverage ratio of 16.67 x.

In addition to the Amended Credit Agreement, we maintain other credit facilities, which may be used for short-term cash advances and bank guarantees.

At June 29, 2025, there were no outstanding borrowings under these facilities and the aggregate amount of standby letters of credit outstanding was $ 43.9 million.

As of June 29, 2025, we had no bank overdrafts related to our disbursement bank accounts.

Fair Value Measurements

We classified our assets and liabilities that were carried at fair value in one of the following categories:

Quoted market prices in active markets for identical assets or liabilities.

Observable market-based inputs or unobservable inputs that are corroborated by market data.

Unobservable inputs that are not corroborated by market data.

Contingent Consideration.

The carrying value of our long-term debt under our credit facility approximated fair value at June 29, 2025 and September 29, 2024.

At June 29, 2025, we had $ 300 million in outstanding borrowings under the Amended Credit Agreement, which consisted of $ 100 million under our 3Y Term Loan Facility, $ 200 million under our 5Y Term Loan Facility and no borrowings under our revolving credit facility.

The estimated fair value of our $ 575 million Convertible Notes was determined based on the trading price of the Convertible Notes as of the last trading day of our third quarter of fiscal 2025.

We consider the fair value of the Convertible Notes to be a Level 2 measurement as they are not actively traded in markets.

The carrying amounts and estimated fair values of the Convertible Notes were approximately $ 566 million and $ 644 million, respectively, at June 29, 2025, and $ 564 million and $ 743 million , respectively, at September 29, 2024 (see Note 14 , " Long-Term Debt " for further information).

Reclassifications Out of Accumulated Other Comprehensive Income

The accumulated balances and activities for the three and six months ended March 30, 2025 and March 31, 2024 related to reclassifications out of accumulated other comprehensive income are summarized as follows (in thousands):

The accumulated balances and activities for the three and nine months ended June 29, 2025 and June 30, 2024 related to reclassifications out of accumulated other comprehensive income are summarized as follows (in thousands):

Three Months Ended

Adjustments Net Pension Adjustments Accumulated Other Comprehensive Income (Loss)

Balance at December 31, 2023 $ ( 134,827 ) $ 2,625 $ ( 132,202 )

Other comprehensive loss before reclassifications ( 24,344 ) — ( 24,344 )

Balance at March 31, 2024 $ ( 159,171 ) $ 2,625 $ ( 156,546 )

Other comprehensive income before reclassifications

1,854 3 1,857

Net current-period other comprehensive loss 1,854 3 1,857

Balance at June 30, 2024 $ ( 157,317 ) $ 2,628 $ ( 154,689 )

Balance at March 30, 2025 $ ( 157,085 ) $ 3,905 $ ( 153,180 )

Balance at December 29, 2024 $ ( 191,659 ) $ 3,905 $ ( 187,754 )

Other comprehensive income before reclassifications 88,063 — 88,063

Net current-period other comprehensive income 88,063 — 88,063

Balance at March 30, 2025 $ ( 157,085 ) $ 3,905 $ ( 153,180 )

Six Months Ended

Balance at June 29, 2025 $ ( 69,022 ) $ 3,905 $ ( 65,117 )

Nine Months Ended

Adjustments Net Pension Adjustments Accumulated Other Comprehensive Income (Loss)

2 unchanged sentences

Net current-period other comprehensive income (loss) 40,616 ( 10 ) 40,606

Balance at March 31, 2024 $ ( 159,171 ) $ 2,625 $ ( 156,546 )

Balance at June 30, 2024 $ ( 157,317 ) $ 2,628 $ ( 154,689 )

Balance at September 29, 2024 $ ( 82,813 ) $ 3,938 $ ( 78,875 )

Other comprehensive loss before reclassifications ( 74,272 ) ( 33 ) ( 74,305 )

Net current-period other comprehensive loss ( 74,272 ) ( 33 ) ( 74,305 )

Balance at March 30, 2025 $ ( 157,085 ) $ 3,905 $ ( 153,180 )

Other comprehensive income (loss) be fore reclassifications

13,791 ( 33 ) 13,758

Net current-period other comprehens ive income (loss)

13,791 ( 33 ) 13,758

Balance at June 29, 2025 $ ( 69,022 ) $ 3,905 $ ( 65,117 )

Commitments and Contingencies

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On January 17, 2025, TtEC entered into a settlement agreement with the United States of America, acting through the USAO and on behalf of the Department of the Navy (collectively, the "United States") an d also fil ed a proposed consent decree with the Court, to resolve this litigation.

Under the terms of the settlement agreement and consent decree, TtEC agreed to pay the United States $ 57 million and $ 40 million for FCA claims and CERCLA claims, respectively (the "Settlement Amounts").

In the second quarter of fiscal 2025, we paid the $ 57 million settlement, and we expect to pay the remaining $ 40 million with cash on hand and by drawing on our credit facility within the next 12 months.

Upon entry of the consent decree by the Court and the United States' receipt of the Settlement Amounts, the United States will release TtEC from any, and all civil or administrative monetary claims for the Covered Conduct under the civil FCA, the CERCLA, and other specified civil statutes and common law theories of liability.

The consent decree is subject to a number of contingencies that could prevent it from being finalized with its current terms.

In particular, and without limitation, (i) the consent decree is required to be lodged with the Court for a period of 30 days for public notice and comment, and the United States has reserved the right to withdraw or withhold its consent if the comments regarding the consent decree disclose facts or considerations that indicate the consent decree is inappropriate, improper or inadequate;

and (ii) the Court might determine not to enter the consent decree as currently written or as approved by the United States.

There can be no assurance that the contingencies will not preclude entry of the consent decree.

Under the terms of the settlement agreement and consent decree, TtEC agreed to pay the United States $ 57 million and $ 40 million for FCA and CERCLA claims, respectively (the "Settlement Amounts") .

In the second quarter of fiscal 2025, we paid the $ 57 million settlement related to the FCA claim.

The $ 40 million CERCLA settlement was paid at the beginning of the fourth quarter of fiscal 2025.

U pon entry of the consent decree by the Court and the United States' receipt of the Settlement Amounts, the United States released TtEC from any, and all civil or administrative monetary claims for the Covered Conduct under the civil FCA, the CERCLA, and other specified civil statutes and common law theories of liability.

TtEC entered into the settlement agreement and consent decree to avoid delay, uncertainty and expense of protracted litigation.

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The table below presents revenue and reimbursable costs related t o services we provided to our unconsolidated joint ventures (in thousands):

Three Months Ended Six Months Ended

2025 March 31,

2024 March 30,

2025 March 31,

Three Months Ended Nine Months Ended

2025 June 30,

2024 June 29,

2025 June 30,

Revenue $ 16,267 $ 16,753 $ 48,764 $ 50,157

6 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements