What changed in this filing

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Item 1. Financial Statements

2026-01-30 compared with 2025-08-01 · 250 added, 284 removed, 526 unchanged (50% of the section changed)

3 unchanged sentences

(unaudited - in thousands, except par value)

ASSETS June 29,

ASSETS December 28,

2025 September 28,

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Prepaid expenses and other current assets 112,145 98,768

Assets held-for-sale — 57,502

Total current assets 1,604,439 1,620,889

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Current contingent earn-out liabilities 18,093 24,826

Liabilities held-for-sale — 25,115

Other current liabilities 279,100 288,113

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

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

no shares issued and outstanding at December 28, 2025 and September 28, 2025

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

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

Additional paid-in capital — 35,900

issued and outstanding, 260,811 and 261,418 shares at December 28, 2025 and September 28, 2025, respectively

Accumulated other comprehensive loss ( 76,356 ) ( 95,777 )

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(unaudited – in thousands, except per share data)

Three Months Ended Nine Months Ended

2025 June 30,

2024 June 29,

2025 June 30,

Three Months Ended

2025 December 29,

Revenue $ 1,210,663 $ 1,420,561

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Contingent consideration – fair value adjustments 7,447 366

Impairment of goodwill — — ( 92,416 ) —

Income from operations 140,994 22,526

Interest expense, net ( 7,128 ) ( 7,218 )

Other non-operating income 7,710 —

Income before income tax expense 141,576 15,308

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(unaudited – in thousands)

Three Months Ended Nine Months Ended

2025 June 30,

2024 June 29,

2025 June 30,

Three Months Ended

2025 December 29,

Net income $ 105,222 $ 778

Other comprehensive income, net of tax

Other comprehensive income (loss), net of tax

Foreign currency translation adjustment, net of tax

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Net pension adjustments ( 305 ) ( 33 )

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

Other comprehensive income (loss), net of tax 19,421 ( 108,879 )

Comprehensive income (loss), net of tax 124,643 ( 108,101 )

Comprehensive income attributable to noncontrolling interests, net of tax 194 31

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

Comprehensive income (loss) attributable to Tetra Tech, net of tax $ 124,449 $ ( 108,132 )

See Notes to Consolidated Financial Statements.

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(unaudited – in thousands)

Nine Months Ended

2025 June 30,

Three Months Ended

2025 December 29,

Cash flows from operating activities:

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Deferred income taxes 13,085 767

Provision for losses on accounts receivables 3,406 —

Impairment of goodwill 92,416 —

Gain on sale of divested business ( 7,710 ) —

Fair value adjustments to contingent consideration ( 7,447 ) ( 366 )

Gain on cash surrender value of life insurance policies ( 1,599 ) —

Other non-cash items 1,821 1,141

Changes in operating assets and liabilities, net of effects of business acquisitions:

Changes in operating assets and liabilities, net of effects of divestiture:

Accounts receivable and contract assets 79,945 ( 91,725 )

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Cash flows from investing activities:

Payments for business acquisitions, net of cash acquired ( 97,693 ) ( 93,650 )

Capital expenditures ( 4,152 ) ( 3,433 )

Proceeds from sale of assets 882 666

Proceeds from company-owned life insurance policies 1,934 —

Net cash used in investing activities ( 108,273 ) ( 104,308 )

Proceeds from divested business, net 41,612 —

Net cash provided by (used in) investing activities 37,460 ( 3,433 )

Cash flows from financing activities:

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Repayments on long-term debt — ( 15,000 )

Payment of debt issuance costs ( 2,738 ) —

Repurchases of common stock ( 50,000 ) ( 25,000 )

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Principal payments on finance leases ( 2,083 ) ( 1,719 )

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

Net cash provided by (used in) financing activities ( 10,874 ) 19,394

Effect of exchange rate changes on cash and cash equivalents 2,223 ( 13,609 )

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Excise taxes accrued but not paid $ 2,113 $ —

Reconciliation of cash and cash equivalents at beginning of period:

Cash and cash equivalents $ 167,459 $ 232,689

Cash and cash equivalents included in assets held-for-sale 913 —

Total $ 168,372 $ 232,689

See Notes to Consolidated Financial Statements.

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Consolidated Statements of Stockholders' Equity

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

(unaudited – in thousands)

Common Stock Additional

Capital Accumulated

Comprehensive

Income (Loss) Retained

Earnings Total

Equity Non-Controlling

Interests Total

Shares Amount

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 income — — — 1,857 — 1,857 — 1,857

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

Cash dividends of $ 0.058 per common share

— — — — ( 15,522 ) ( 15,522 ) — ( 15,522 )

Stock-based compensation — — 8,096 — — 8,096 — 8,096

Restricted & performance shares released 8 — ( 125 ) — — ( 125 ) — ( 125 )

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

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

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

Other comprehensive income — — — 88,063 — 88,063 — 88,063

Distributions paid in noncontrolling interests — — — — — — ( 6 ) ( 6 )

Cash dividends of $ 0.065 per common share

— — — — ( 17,092 ) ( 17,092 ) — ( 17,092 )

Stock-based compensation — — 8,762 — — 8,762 — 8,762

Restricted & performance shares released 8 1 ( 95 ) — — ( 94 ) — ( 94 )

Stock options exercised 8 — 45 — — 45 — 45

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

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

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

Three Months Ended December 29, 2024 and December 28, 2025

(unaudited – in thousands)

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Shares Amount

BALANCE AT OCTOBER 1, 2023 266,238 $ 2,662 $ — $ ( 195,295 ) $ 1,596,066 $ 1,403,433 $ 73 $ 1,403,506

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 — — — — 747 747 31 778

Other comprehensive income — — — 40,606 — 40,606 — 40,606

Distributions paid in noncontrolling interests — — — — — — ( 43 ) ( 43 )

Foreign currency translations adjustments — — — ( 108,846 ) — ( 108,846 ) — ( 108,846 )

Net pension adjustments — — — ( 33 ) — ( 33 ) — ( 33 )

Cash dividends of $ 0.058 per common share

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Shares issued for Employee Stock Purchase Plan 458 4 15,303 — — 15,307 — 15,307

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

Stock repurchase ( 600 ) ( 6 ) ( 24,994 ) — — ( 25,000 ) — ( 25,000 )

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

BALANCE AT SEPTEMBER 28, 2025 261,418 $ 2,614 $ — $ ( 95,777 ) $ 1,872,948 $ 1,779,785 $ 379 $ 1,780,164

Net income — — — — 105,028 105,028 194 105,222

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

Foreign currency translations adjustments — — — 19,726 — 19,726 — 19,726

Net pension adjustments — — — ( 305 ) — ( 305 ) — ( 305 )

Distributions paid in noncontrolling interests — — — — — — ( 27 ) ( 27 )

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Stock repurchases ( 1,482 ) ( 14 ) ( 8,890 ) — ( 41,199 ) ( 50,103 ) — ( 50,103 )

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

BALANCE AT DECEMBER 28, 2025 260,799 $ 2,608 $ — $ ( 76,356 ) $ 1,919,840 $ 1,846,092 $ 546 $ 1,846,638

See Notes to Consolidated Financial Statements.

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

On July 29, 2024, our Board of Directors approved a five -for-one stock split of our common stock.

The stock split had a record date of September 5, 2024 and an effective date of September 6, 2024.

The par value per share of our common stock remains unchanged at $ 0.01 per share after the stock split.

All prior-period share or per share amounts presented herein have been retroactively adjusted to reflect the stock split.

Beginning in fiscal 2026, we transferred certain operating units between our two reportable segments and redefined our reporting units to better align our operations with the clients, markets and geographies that they serve.

Prior year amounts for reportable segments have been revised to conform to the current year presentation.

Recent Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which requires that an entity report segment information in accordance with Topic 280, Segment Reporting.

The amendments in the ASU are intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses.

The amendments in this ASU are effective for fiscal years beginning after December 15, 2023 (fiscal 2025 year-end for us), and interim periods within fiscal years beginning after December 15, 2024 (first quarter of fiscal 2026 for us).

In September 2025, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) No.

2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software, which clarifies and modernizes the accounting for costs related to internal-use software guidance in subtopic 350-40.

The guidance removes all references to project stages throughout Accounting Standards Codification ("ASC") 350-40 and clarifies the threshold entities apply to begin capitalizing costs.

The amendments in this ASU are effective for annual periods beginning after December 15, 2027 (fiscal 2029 for us).

Early adoption is permitted.

The adoption of this ASU will not have a material impact on our consolidated financial statements.

We are currently evaluating the impact of this guidance on our consolidated financial statements;

however, we do not plan to adopt it before fiscal 2029.

In July 2025, the FASB issued ASU No.

2025-05, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Loss for Accounts Receivable and Contract Assets, which provides a practical expedient (for all entities) and an accounting policy election (for all entities, other than public business entities, that elect the practical expedient) related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC Topic 606, "Revenue from Contracts with Customers".

The amendments in this ASU are effective for annual periods beginning after December 15, 2025 (fiscal 2027 for us).

Early adoption is permitted.

We are currently evaluating the impact of this guidance on our consolidated financial statements;

however, we do not plan to adopt it before fiscal 2027.

In December 2023, the FASB issued ASU No.

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The amendments in this ASU are effective for annual periods beginning after December 15, 2024 (fiscal 2026 for us).

Early adoption is permitted.

The adoption of this ASU will not have a material impact on our consolidated financial statements.

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

Three Months Ended Nine Months Ended

2025 June 30,

2024 June 29,

2025 June 30,

Three Months Ended

2025 December 29,

Client Sector:

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

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

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

Other than the U.S.

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.

federal government, no single client accounted for more than 10% of our revenue for the first quarters of fiscal 2026 and 2025.

Contract Assets and Contract Liabilities

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Contract liabilities - non-current (2)

( 3,021 ) ( 2,628 )

Net contract liabilities $ ( 297,965 ) $ ( 284,650 )

(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.

(1) Incl udes $ 11.0 million and $ 12.8 million of contract retentions at December 28, 2025 and September 28, 2025, respectively.

(2) Reported under "Other non-current liabilities" on our consolidated balance sheet as of December 28, 2025 and September 28, 2025.

For th e first quarters of fiscal 2026 and 2025, we recognized revenue of approxim ately $ 160 million and $ 116 million, respectively, from the amounts included in the contract liability balances at the end of fiscal 2025 and 2024, respectively.

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

We estimate and measure progress on our contracts over time whereby we compare

our total costs incurred on each contract as a percentage of the total expected contract costs.

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 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 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.

We estimate and measure progress on our contracts over time whereby we compare our total costs incurred on each contract as a percentage of the total expected contract costs.

As a result, in the first quarters of fiscal 2026 and 2025, we recognized net favorable revenue and operating income adjustments of approximately $ 18 million and $ 3 million, respectively.

Accounts Receivable, Net

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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 June 29, 2025 are expected to be billed and collecte d within 12 months.

Substantially all of our unbilled receivables at December 28, 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.

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Other than the U.S.

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

federal government, no single client accounted for more than 10% of our accounts receivable at December 28, 2025 and September 28, 2025.

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

We had $ 3.9 billion of RU PO at December 28, 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 June 29, 2025 over the following periods (in thousands):

We expect to satisfy our RUPO at December 28, 2025 over the following periods (in thousands):

Within 12 months $ 2,775,919

Beyond 1,229,046

Total $ 3,922,284

(1) The majority of this amount is expected to be recognized over the subsequent two-year period.

Although RUPO reflects business that is considered to be firm, cancellations, deferrals or scope adjustments may occur.

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therefore, the remaining performance obligations on such contracts are limited to the notice period required for the termination (usually 30 , 60 , or 90 days).

Acquisition s and Divestitures

In the second quarter of fiscal 2025, we acquired Carron + Walsh ("CAW"), based in the Republic of Ireland.

CAW delivers project and cost management solutions for large-scale commercial, life science, residential and infrastructure programs across Europe.

CAW has valued relationships and framework agreements with life science clients, public sector bodies, housing

authorities, financial lenders and private development companies.

CAW has valued relationships and framework agreements with life science clients, public sector bodies, housing authorities, financial lenders and private development companies.

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.

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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 allocation of the $ 147 million purchase price consists of $ 13 million to net tangible assets, $ 14 million to identifiable intangible assets, $ 4 million to deferred income tax liability and $ 124 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.

federal enterprise technology services and management consulting firm based in Fairfax, Virginia.

LST provides high-end consulting and engineering services including advanced data analytics, cybersecurity and digital transformation solutions to U.S.

government clients.

In the third quarter of fiscal 2024, we also acquired Convergence Controls & Engineering ("CCE"), an industry leader in process automation and systems integration solutions.

Both LST and CCE are included in our Government Services Group ("GSG") segment.

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

Both of the aforementioned acquisitions in fiscal 2025 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 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.

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

The fiscal 2025 goodwill additions from the 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.

Goodwill additions in fiscal 2025 were not tax deductible.

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 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.

In the first quarter of fiscal 2026, 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 Nine Months Ended

2025 June 30,

2024 June 29,

2025 June 30,

Three Months Ended

2025 December 29,

Beginning balance $ 56,961 $ 48,746

Estimated earn-out liabilities for acquisitions 37,977 1,138 43,493 23,038

Payments of contingent consideration — ( 2,865 )

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Ending balance $ 51,392 $ 46,160

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

As of December 28, 2025, the total potential maximum outstanding contingent consideration related to acquisitions was $ 120.2 million.

Subsequent Event.

O n January 16, 2026, we acquired Halvik Corp (“Halvik”) headquartered in Vienna, Virginia.

With 600 employees, Halvik provides high-end advisory consulting services focused on advanced data analytics, systems modernization and cybersecurity for U.S.

federal defense and civilian agencies.

Halvik will be included in our Government Services Group (“GSG”) segmen t.

The results of the Halvik acquisition will be included in our consolidated financial statements beginning on its closing date.

In the first quarter of fiscal 2026, we divested our operations in Norway, which were in our CIG segment.

We received proceeds of $ 41.6 million and recognized a non-operating gain of $ 7.7 million in our consolidated statements of income.

In accordance with FASB ASC Topic 205, “Presentation of Financial Statements,” we determined that the divestiture of our Norwegian operations did not represent a strategic shift that would have a material effect on our consolidated results of operations, and therefore it’s results of operations are not reported as discontinued operations.

We also concluded that the planned divestiture in fiscal 2025 met all the requisite held-for-sale criteria.

Therefore, the related assets and liabilities were reclassified as held-for-sale on our consolidated balance sheet as of September 28, 2025.

Goodwill and Intangible Assets

The following table summarizes the changes in the carrying value of goodwill by reportable segment (in thousands):

As a result, we reallocated goodwill between our GSG and CIG reportable segments on a relative fair value basis.

The followin g table summarizes the changes in the carrying value of goodwill by reportable segment (in thousands):

GSG CIG Total

Balance at September 28, 2025 $ 658,511 $ 1,391,363 $ 2,049,874

Acquisition activity — 115,145 115,145

Goodwill impairment ( 92,416 ) — ( 92,416 )

Goodwill reallocation 83,179 ( 83,179 ) —

Translation adjustments 2,504 13,536 16,040

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

Balance at December 28, 2025 $ 744,194 $ 1,321,720 $ 2,065,914

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 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.

The gross amounts for GSG we re $ 854.3 million and $ 768.6 million at December 28, 2025 and September 28, 2025, respectively, excluding accumulated impairment of $ 110.1 million at each date.

The gross amounts of goodwill for CIG were $ 1,443.2 million and $ 1,512.9 million at December 28, 2025 and September 28, 2025, 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.

Our most recent annual review at July 1, 2024 (i.e.

Our most recent annual review at June 30, 2025 (i.e.

the first day of our fourth quarter in fiscal 2025 ) indicated that we had no impairment of goodwill, and all of our reporting units had estimated fair values that were in excess of their carrying values, including goodwill.

At July 1, 2024, we had no reporting units that had estimated fair values that exceeded their carrying val ues by less than 72 %.

At June 30, 2025, we had no reporting units that had estimated fair values that exceeded their carrying values by less than 38 %, except for our Global Development Services reporting unit ("GDS") as described below.

We also regularly evaluate whether events and circumstances have occurred that may indicate a potential change in the recoverability of goodwill.

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or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods.

During the second quarter of fiscal 2025, events and circumstances occurred that indicated a potential change in the recoverability of the goodwill in our Global Development Services reporting unit ("GDS").

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 has historically been for the United States Agency for International Development ("USAID").

During the second quarter of fiscal 2025, events and circumstances occurred that indicated a potential change in the recoverability of the goodwill in GDS.

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

Although several agencies were supported by this work (primarily for the U.S., Australia and United Kingdom governments), over eighty percent of the activity was historically 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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Subsequently, we were notified that virtually all of our contracts with USAID were terminated for convenience.

As a result of these events and circumstances, we performed an interim impairment review of the goodwill in GDS at our fiscal period end for February 2025.

As a result of these events and circumstances, we performed an interim impairment review of the goodwill in GDS in the second quarter of 2025.

We considered two methods to determine the fair value of the GDS reporting unit:

(i) the Income Approach and (ii) the Market Approach.

While each of these approaches is initially considered in the valuation of the business enterprise, the nature and characteristic of the reporting unit indicates which approach is most applicable.

While each of these approaches were initially considered in the valuation of the business enterprise, the nature and characteristic of the reporting unit indicated which approach was most applicable.

The Income Approach utilizes the discounted cash flow method, which focuses on the expected cash flow of the reporting unit.

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In the similar transactions method, consideration is given to prices paid in recent transactions that have occurred in the reporting unit’s industry or in related industries.

For the interim impairment analysis of GDS, we utilized the Income Approach as it has the most direct correlation to the specific economics of the reporting unit.

The estimated fair value of equity of GDS was made using Level 3 inputs including the estimated discount rate that reflects the level of risk associated with receiving future cash flows and the forecasted long-term growth rates of GDS's revenue and operating income.

For the interim impairment analysis of GDS, we utilized the Income Approach as it had the most direct correlation to the specific economics of the reporting unit.

The estimated fair value of equity of GDS was made using Level 3 inputs including the estimated discount rate that reflected the level of risk associated with receiving future cash flows and the forecasted long-term growth rates of GDS's revenue and operating income.

Based on our analysis, an impairment of $ 92.4 million was calculated as the deficit between the fair value of equity of the GDS reporting unit as compared to its carrying value, including goodwill of $ 130.5 million at our fiscal period end for February 2025.

As a result, we recorded a non-cash goodwill impairment charge of $ 92.4 million included in operating income in the second quarter of fiscal 2025.

The remaining $ 38.1 million of goodwill in GDS is primarily supported by our work for the United Kingdom and Australia foreign aid government agencies.

A future reduction in these governments’ foreign aid budgets could result in additional impairment to the GDS reporting unit.

Long-term assets other than goodwill in GDS are not material.

The remaining $ 38.1 million of goodwill in GDS was primarily supported by our work for the Australia and United Kingdom foreign aid government agencies.

As of the annual impairment review date, the estimated fair value of the GDS reporting unit continued to approximate its carrying value.

Accordingly, a future reduction in these governments’ foreign aid budgets could have resulted in additional impairment.

The related long-term assets other than goodwill were not material.

Effective the first day of fiscal 2026, we eliminated GDS and realigned its remaining operations with other existing reporting units based on their common geographic markets.

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):

June 29, 2025 September 29, 2024

December 28, 2025 September 28, 2025

Remaining Life

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Total $ 250,264 $ ( 136,697 ) $ 113,567 $ 248,531 $ ( 127,371 ) $ 121,160

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.

Amortization expense for the identifiable intangible assets for the first quarter of fi scal 2026 was $ 8.4 million compared to $ 10.7 million for the prior-year period.

Estimated amortization expense for the remainder of fiscal 2026 and succeeding years is as follows (in thousands):

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Property and equipment, net $ 65,395 $ 66,148

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.

For the first quart er of fiscal 2026 , o ur depreciation expense related to property and equipment was $ 5.6 million compared to $ 5.4 million for the fiscal 2025 period.

Stock Repurchase and Dividends

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 :

In the first quarter of fiscal 2026, we repurchased and settled 1,482,116 shares with an average price of $ 33.74 per share for a total cost of $ 50.0 million in the open market.

We repurchased and settled 600,007 shares with an average price of $ 41.67 per share for a total cost of $ 25.0 million in the open market in the first quarter of fiscal 2025.

At December 28, 2025, we had a remaining balance of $ 547.8 million under our stock repurchase programs.

The following table presents dividends declared and paid in the first quarters of fisc al 2026 and 2025:

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

(in thousands)

November 11, 2024 $ 0.058 November 27, 2024 December 13, 2024 $ 15,549

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

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

Total dividend paid as of June 29, 2025

November 10, 2025 $ 0.065 December 1, 2025 December 12, 2025 $ 16,937

November 11, 2024 $ 0.058 November 27, 2024 December 13, 2024 $ 15,549

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

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

Total dividend paid as of June 30, 2024

Subsequent Events.

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.

On January 26, 2026, our Board of Directors declared a quarterly cash dividend of $ 0.065 per share payable on February 27, 2026 to stockholders of record as of the close of business on February 12, 2026.

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

To a much lesser extent, we have operating leases for vehicles and equipment.

Our operating leases have remaining lease terms of one month to ten years , some of which may include options to extend the leases for up to five years .

Our operating leases have remaining lease terms of one month to ten years , some of which may include options to extend the leases for up to seven years .

We determine if an arrangement is a lease at inception.

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

Three Months Ended Nine Months Ended

2025 June 30,

2024 June 29,

2025 June 30,

Three Months Ended

2025 December 29,

Operating lease cost $ 26,778 $ 25,916

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

Nine Months Ended

2025 June 30,

Three Months Ended

2025 December 29,

Operating cash flows for operating leases $ 20,229 $ 18,523

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Operating leases 4.3 % 4.2 %

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):

At December 28, 2025, we h a d $ 13.4 million of operating leases that have not yet commenced.

A maturity analysis of the future undiscounted cas h flows associated with our lease liabilities at December 28, 2025 is as follows (in thousands):

2026 (remaining) $ 58,606

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Total present value of lease liabilities $ 224,125

Employee Benefits

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.

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.

I n the first quarter of fiscal 2024, we distributed approximately $ 10 million to our Canadian employees.

The remainder was distributed in the first quarter of fiscal 2025.

We have no outstanding applications for further government assistance.

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 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.

Stock-based compensation expense for the three months ended December 28, 2025 was $ 8.2 million, compared to $ 8.1 million for the same period last year.

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

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.

In the first quarter of fiscal 2026, we awarded 311,026 performance share units (“PSUs”) to our non-employee directors and executive officers at an estimated fair value of $ 35.54 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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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 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.

For the first quarter of fiscal 2026, our Convertible Notes, described in Note 13, "Long-Term Debt", 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 first quarter of fiscal 2025, the Convertible Notes 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 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 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 Nine Months Ended

2025 June 30,

2024 June 29,

2025 June 30,

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

For the first quarters of fiscal 2026 and 2025, 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 ba sic and diluted EPS (in thousands, except per share data):

Three Months Ended

2025 December 29,

Net income attributable to Tetra Tech $ 105,028 $ 747

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Diluted $ 0.40 $ —

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 describe d in Note 17, "Commitments and Contingencies".

The effective tax rates for the first quarters of fiscal 2026 and 2025 were 25.7 % and 94.9 %, respectively.

Income tax expense was increased by $ 0.1 million of excess tax expenses and reduced by $ 1.0 million of excess tax benefits on share-based payments in the first three months of fiscal 2026 and 2025, respectively.

In addition, in the first quarter of fiscal 2026, we recognized a $ 7.7 million gain from the sale of our operations in Norway as described in Note 4, “Acquisitions and Divestitures”.

The gain is not taxable for income tax purposes.

In the first quarter of fiscal 2025, we also recognized a $ 115.0 million non-recurring charge related to legal contingencies as described in Note 16, "Commitments and Contingencies".

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

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.

Excluding the impact of the excess tax expenses on share-based payments, the gain from sale in the first quarter of fiscal 2026 and the legal contingency charge in the first quarter of fiscal 2025, our effective tax rates in the first three months of fiscal 2026 and 2025 were 27.1 % and 27.8 %, respectively.

At December 28, 2025 and September 28, 2025, the liability for income taxes associated with uncertain tax positions was $ 53.8 million and $ 52.8 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.

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Reportable Segments

We manage our operations under two reportable segments.

Our GSG reportable segment primarily includes activities with U.S.

government clients (federal, state and local) and all activities with development agencies worldwide.

Our CIG reportable segment primarily includes activities with U.S.

commercial clients and international clients other than development agencies.

We manage our operations under two reportable segments, GSG and CIG.

Prior year amounts for reportable segments have been revised to conform to the current year presentation.

GSG provides high-end consulting and engineering services primarily to U.S.

government clients (federal, state and local) and international development agencies worldwide.

government clients (federal, state and local).

GSG supports U.S.

government civilian and defense agencies with services in water, environment, sustainable infrastructure, information technology and disaster management.

government defense and civilian agencies with services in water, environment, sustainable

infrastructure, information technology and disaster management.

GSG also provides engineering design services for U.S.

based federal and municipal clients, especially in water infrastructure, flood protection and solid waste.

GSG also leads our support for development agencies worldwide, especially in the United States, United Kingdom and Australia.

CIG primarily provides high-end consulting and engineering services to U.S.

commercial clients, and international clients inclusive of the commercial and government sectors.

CIG supports commercial clients worldwide in energy, industrial, high performance buildings and aerospace markets.

CIG also provides sustainable infrastructure and related environmental, engineering and project management services to commercial and local government clients across Canada, in Asia Pacific (primarily Australia and New Zealand), Europe, the United Kingdom and South America (primarily Brazil).

Management evaluates th e performance of these reportable segments based upon their respective segment operating income before the effect of amortization expense related to acquisitions, and other unallocated corporate expenses.

We account for inter-segment revenues and transfers as if they were to third parties;

CIG supports commercial clients worldwide in energy, industrial and high performance buildings markets.

Our Chief Executive Officer serves as the chief operating decision maker (“CODM”) and is responsible for evaluating segment performance and allocating resources to our segments.

The CODM assesses segment revenue and segment operating income on a monthly basis by comparing actual results against the annual plan.

This evaluation supports strategic decisions related to segment profitability, resource allocation, pricing strategies, and cost optimization.

The segment operating income is presented before amortization expense associated with acquisitions and other unallocated corporate costs.

It is calculated as revenue less subcontractor costs, and other segment items including other costs of revenue and segment selling, general, and administrative expenses.

Certain expenses are not allocated to GSG and CIG segments for purposes of making operating decisions or evaluating financial performance and are reported under corporate expenses.

These expenses include amortization of intangibles, goodwill impairment charges, contingent consideration gains and losses, acquisition and integration expenses, certain legal contingency costs, as well as other costs and benefits that our CODM deems to be enterprise in nature.

Corporate expenses also include stock-based compensation expense related to corporate employees.

We account for inter-segment revenue and transfers as if they were to third parties;

that is, by applying a negotiated fee onto the costs of the services performed.

All significant intercompany balances and transactions are eliminated in consolidation.

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 Nine Months Ended

2025 June 30,

2024 June 29,

2025 June 30,

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

CIG 715,746 723,617 2,082,818 2,063,879

Our CODM does not use assets by segment to evaluate performance or allocate resources;

therefore, we do not provide disclosure of assets by segment.

The accounting policies for segment reporting are the same as for our consolidated financial statements.

The tables below present financial information of our reportable segments (in thousands):

Three Months Ended December 28, 2025

GSG CIG Total

Revenue from external customers $ 513,478 $ 697,185 $ 1,210,663

Inter-segment revenue 12,030 6,993 19,023

Segment revenue 525,508 704,178 1,229,686

Elimination of inter-segment revenue ( 19,023 )

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

Income from operations

GSG $ 90,726 $ 71,518 $ 246,112 $ 198,652

CIG 96,103 86,465 250,550 233,821

Corporate (1)

Total consolidated revenue 1,210,663

Subcontractor costs - external ( 86,413 ) ( 87,074 ) ( 173,487 )

Subcontractor costs - inter-segment ( 6,993 ) ( 12,030 ) ( 19,023 )

Segment subcontractor costs ( 93,406 ) ( 99,104 ) ( 192,510 )

Elimination of inter-segment subcontractor costs 19,023

Total consolidated subcontractor costs ( 173,487 )

Other segment items (1)

( 360,685 ) ( 526,154 ) ( 886,839 )

Total income from operations $ 164,986 $ 128,630 $ 227,114 $ 357,395

(1) Includes amortization of intangibles, goodwill impairment charges, certain legal contingency costs, as well as other costs and other income not allocable to our reportable segments.

2025 September 29,

GSG $ 703,419 $ 658,493

CIG 1,109,686 1,059,915

Corporate (1)

Segment operating income 71,417 78,920 150,337

Reconciliation of profit (segment operating income):

Other non-operating income 7,710

Contingent consideration - fair value adjustments 7,447

Interest expense, net ( 7,128 )

Other corporate expenses (2)

Income before income tax expense $ 141,576

Three Months Ended December 29, 2024

GSG CIG Total

Revenue from external customers $ 783,981 $ 636,580 $ 1,420,561

Inter-segment revenue 7,371 8,322 15,693

Segment revenue 791,352 644,902 1,436,254

Elimination of inter-segment revenue ( 15,693 )

Total consolidated revenue 1,420,561

Subcontractor costs - external ( 135,656 ) ( 87,575 ) ( 223,231 )

Subcontractor costs - inter-segment ( 8,322 ) ( 7,371 ) ( 15,693 )

Segment subcontractor costs ( 143,978 ) ( 94,946 ) ( 238,924 )

Elimination of inter-segment subcontractor costs 15,693

Total consolidated subcontractor costs ( 223,231 )

Other segment items (1)

( 555,454 ) ( 480,916 ) ( 1,036,370 )

Total assets $ 4,353,447 $ 4,192,676

(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.

Segment operating income 91,920 69,040 160,960

Reconciliation of profit (segment operating income):

Legal contingency costs ( 115,000 )

Contingent consideration - fair value adjustments 366

Interest expense, net ( 7,218 )

Other corporate expenses (2)

Income before income tax expense $ 15,308

(1) These amounts include $ 0.8 million and $ 0.9 million of GSG depreciation expense for the first quarters of fiscal 2026 and 2025, respectively, and $ 4.7 million and $ 4.4 million of CIG depreciation expense for the first quarters of fiscal 2026 and 2025, respectively.

Additionally, our GSG other segment items include the equity in the net income of investees accounted for by the equity method of $ 0.2 million and $ 0.3 million for the first quarters of fiscal 2026 and 2025, respectively.

Our CIG other segment items also reflect the equity in the net income of investees accounted for by the equity method of $ 0.4 million and $ 0.5 million for the first quarters of fiscal 2026 and 2025, respectively.

(2) Other corporate expenses include the amortization expense of intangible assets of $ 8.4 million and $ 10.7 million for the first quarters of fiscal 2026 and 2025, respectively.

These amounts also include $ 5.1 million and $ 4.8 million of stock-based compensation expense for the first quarters of fiscal 2026 and 2025, respectively.

Long-Term Debt

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Thereafter, the Convertible Notes will be convertible at the option of the holders at any time until the close of business on the second scheduled trading day immediately preceding the maturity date.

The initial conversion rate applicable to the Convertible Notes was 25.4275 shares (5.0855 pre-stock split) of our common stock per $1,000 principal amount of the Convertible Notes, which was equivalent to an initial price of approximately $ 39.33 per share ($ 196.64 pre-stock split) of our common stock.

$ 39.33 per share ($ 196.64 pre-stock split) of our common stock.

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

At December 28, 2025, the applicable conversion rate was 25.4709 shares of common stock per $1,000 principal amount of the Convertible Notes (equivalent to an adjusted conversion price of approximately $ 39.26 per share of common stock).

Upon conversion, we will pay cash up to the aggregate principal amount of the Convertible Notes to be c onverted 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.

In addition, upon the occurrence of a "fundamental change" as defined in the indenture governing the Convertible Notes, holders may require us to repurchase for cash all or any portion of their Convertible Notes at a fundamental change repurchase price equal to 100 % of the principal amount of the Convertible Notes to be repurchased plus any accrued and unpaid interest.

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

Three Months Ended Nine Months Ended

2025 June 30,

2024 June 29,

2025 June 30,

Three Months Ended

2025 December 29,

Interest expense $ 3,234 $ 3,234

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If, however, the market price per share of our common stock, as measured under the terms of the Capped Call Transactions, exceeds the cap price of the Capped Call Transactions, there would nevertheless be dilution and/or there would not be an offset of such cash payments, in each case, to the extent that such market price exceeds the cap price of the Capped Call Transactions.

The cap price of the Capped Call Transactions was initially $ 51.91 per share ($ 259.56 pre-stock split), which represented a premium of 65 % over the last reported sale price of our common stock of $ 31.46 per share ($ 157.31 pre-stock split) on the NASDAQ Global Select Market on August 17, 2023.

per share ($ 157.31 pre-stock split) on the NASDAQ Global Select Market on August 17, 2023.

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

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

At December 28, 2025, the adjusted cap price was approximately $ 51.82 per share.

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

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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.

The 5Y Term Loan Facility will be subject to quarterly amortization of principal, based upon the annual percentages of the original stated amount thereof (Year 1:

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The 5Y Term Loan Facility is subject to the same interest rate provisions.

The 3Y Term Loan Facility is subject to a benchmark rate plus a margin that ranges from 0.875 % to 1.625 % per annum.

The 3Y Term Loan Facility was repaid on September 26, 2025.

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.

At December 28, 2025, we had $ 270 million in outstanding borrowings under the Amended Credit Agreement, which consisted of $ 200 million under the 5Y Term Loan Facility and $ 70 million borrowings under the Amended Revolving Credit Facility.

During the three m onths ended December 28, 2025, the weighted-average interest rate of the outstanding borrowings under the credit facilities was 5.25 %.

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

At December 28, 2025, we had $ 529.3 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.

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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.

At December 28, 2025, we were in compliance with these covenants with a consolidated leverage ratio of 1.24 x and a consolidated interest coverage ratio of 17.31 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.

At December 28, 2025, there were no outstanding borrowings under these facilities and the aggregate amount of standby letters of credit outstanding was $ 55.0 million.

As of December 28, 2025, we had no bank overdrafts related to our disbursement bank accounts.

Fair Value Measurements

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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 28, 2025).

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.

The carrying value of our long-term debt under our credit facility approximated fair value at December 28, 2025 and September 28, 2025.

At December 28, 2025, we had $ 270 million in outstanding borrowings under the Amended Credit Agreement, which consisted of $ 200 million under our 5Y Term Loan Facility and $ 70 million 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 first quarter of fiscal 2026 .

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).

The carrying values and estimated fair values of our financial instruments that are not recorded at fair value in our consolidated balance sheets, were as follows (in thousands):

As of December 28, 2025 As of September 28, 2025

Carrying Value Fair Value Carrying Value Fair Value

Credit facilities $ 270,000 $ 270,000 $ 200,000 $ 200,000

Convertible notes 567,091 626,463 566,375 619,735

Total $ 837,091 $ 896,463 $ 766,375 $ 819,735

Reclassifications Out of Accumulated Other Comprehensive Income

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):

The accumulated balances and activities for the three months ended December 28, 2025 and December 29, 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 March 31, 2024 $ ( 159,171 ) $ 2,625 $ ( 156,546 )

Other comprehensive income before reclassifications

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

Other comprehensive loss before reclassifications

( 108,846 ) ( 33 ) ( 108,879 )

Net current-period other comprehensive loss ( 108,846 ) ( 33 ) ( 108,879 )

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 )

Balance at September 28, 2025 $ ( 99,978 ) $ 4,201 $ ( 95,777 )

Other comprehensive income before reclassifications 20,268 ( 14 ) 20,254

Reclassification to earnings from sale of divested business ( 542 ) ( 291 ) ( 833 )

Net current-period other comprehensive income 19,726 ( 305 ) 19,421

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

Nine Months Ended

Adjustments Net Pension Adjustments Accumulated Other Comprehensive Income (Loss)

Balance at October 1, 2023 $ ( 197,933 ) 2,638 $ ( 195,295 )

Other comprehensive income (loss) before reclassifications 40,616 ( 10 ) 40,606

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

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

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

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 )

Balance at December 28, 2025 $ ( 80,252 ) $ 3,896 $ ( 76,356 )

Commitments and Contingencies

We are subject to certain claims and lawsuits typically filed against the consulting and engineering profession, alleging primarily professional errors or omissions.

We carry professional liability insurance, subject to certain deductibles and policy limits, against such claims.

We carry professional liability insurance, subject to certain deductibles and policy

limits, against such claims.

However, in some actions, parties are seeking damages that exceed our insurance coverage or for which we are not insured.

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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.

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

The settlement agreement and consent decree contain no admission of liability by TtEC.

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.

The $ 40 million CERCLA settlement payment was made in 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.

The settlement agreement and consent decree contain no admission of liability by TtEC.

TtEC has initiated litigation with the insurance carrier with which TtEC maintained liability policies regarding the reasonably possible payment or reimbursement of a significant portion of the Settlement Amounts.

TtEC can give no assurances as to what portion, if any, of the Settlement Amounts will be recovered from the insurance carrier.

Several ancillary claims brought by third-party private plaintiffs arising from the same services provided by TtEC at Hunters Point are also ongoing.

The settlement agreement and consent decree do not resolve these ancillary claims.

TtEC can give no assurances as to what portion, if any, of the Settlement Amounts will be recovered from the insurance carrier.

As a result of the settlement agreement and consent decree with the United States and in connection with discussions regarding the ancillary claims, we recorded a $ 115.0 million charge to operating income ($ 97.0 million for the settlement and $ 18.0 million estimated for the ancillary claims, respectively) in the first quarter of fiscal 2025.

2 unchanged sentences

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

Three Months Ended Nine Months Ended

2025 June 30,

2024 June 29,

2025 June 30,

Three Months Ended

2025 December 29,

Revenue $ 15,757 $ 16,479

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