Core Viewpoint - A class action lawsuit has been filed against Fortrea Holdings, Inc. for allegedly misleading investors regarding the progress and financial expectations of its Pre-Spin projects [1][2][4]. Company Overview - Fortrea Holdings, Inc. is a global contract research organization (CRO) that provides development solutions for biopharmaceutical products and medical devices [1]. - The company was spun off from Labcorp Holdings Inc. in June 2023 and operates as a standalone publicly traded entity [2]. Financial Performance - On March 3, 2025, Fortrea announced that its revenue and adjusted EBITDA projections for 2025 were not meeting prior expectations, indicating that its Pre-Spin projects were underperforming [3]. - The company reported that its Pre-Spin projects were "late in their life cycle" and had lower revenue and profitability than anticipated for 2025 [3]. - Fortrea's stock price dropped by $3.47 per share, or 25.05%, closing at $10.38 per share following the announcement of disappointing financial results [3]. Allegations and Misstatements - The lawsuit claims that Fortrea overestimated the revenue contributions from its Pre-Spin projects and overstated potential cost savings from exiting transition services agreements (TSAs) [4]. - It is alleged that the company's previously announced EBITDA targets for 2025 were inflated, leading to an overstatement of its post-Spin-Off business model viability and financial prospects [4].

Financial Performance - Fortrea's revenues for Q1 2025 were $651.3 million, a decrease of 1.6% from $662.1 million in Q1 2024, attributed to a 1.1% decline in organic revenues and a 0.5% unfavorable foreign currency translation[97]. - Direct costs for Q1 2025 were $534.8 million, down 3.5% from $554.2 million in Q1 2024, with direct costs as a percentage of revenues decreasing to 82.1% from 83.7%[98][99]. - Selling, general and administrative expenses increased by 1.4% to $121.8 million in Q1 2025, primarily due to higher personnel costs and professional fees[100][101]. - Goodwill impairment for Q1 2025 was $488.8 million, with no impairments reported in Q1 2024[104]. - Interest expense decreased by 35.0% to $22.3 million in Q1 2025, primarily due to the pay down of $70.2 million on term loan A and $412.5 million on term loan B[105]. - Foreign exchange loss for Q1 2025 was $(5.6) million, compared to $(5.3) million in Q1 2024, primarily due to fluctuations in the U.S. Dollar against the British Pound and Euro[106]. - For the three months ended March 31, 2025, the effective tax rate was (2.7)%, an improvement from (5.4)% in 2024, primarily due to goodwill impairment with no tax benefit[107]. - A goodwill impairment of $488.8 million was recorded for the Clinical Development reporting unit due to a decline in share price and macroeconomic uncertainties[121]. Operational Metrics - The company's backlog was $7.7 billion as of March 31, 2025, reflecting anticipated future revenue from business awards[94]. - The company has approximately 15,000 employees operating in around 100 countries, providing comprehensive clinical trial management and consulting services[92]. - Restructuring and other charges increased by 97.0% to $6.5 million in Q1 2025, driven by actions to streamline operations and eliminate redundant positions[104]. Cash Flow and Indebtedness - Cash and cash equivalents increased to $101.6 million as of March 31, 2025, compared to $92.8 million in 2024[112]. - Net cash used for operating activities was $(124.2) million for the three months ended March 31, 2025, compared to $(25.6) million in 2024, reflecting a $98.6 million increase in cash used[113]. - Net cash provided by investing activities was $16.1 million for the three months ended March 31, 2025, a $25.3 million increase from $(9.2) million in 2024, primarily due to a milestone payment related to the sale of the Enabling Services Segment[114]. - Net cash provided by financing activities was $88.4 million for the three months ended March 31, 2025, compared to $21.3 million in 2024, mainly from net proceeds of the revolving credit facility[115]. - The company incurred total indebtedness of $1,640.0 million, with $89.0 million outstanding on the revolving credit facility as of March 31, 2025, and $361.0 million available for borrowing[108]. Capital Expenditures and Interest Rate Sensitivity - Capital expenditures for the three months ended March 31, 2025, were $2.9 million, representing 0.4% of revenues, aimed at supporting growth in core businesses[114]. - A hypothetical 1% increase in interest rates would result in increased interest expenses of $6.6 million, given the $661.0 million outstanding related to variable rate debt[129]. - Approximately 15.9% of revenues for the three months ended March 31, 2025, were denominated in currencies other than the U.S. dollar, with the Euro being the most significant exposure[126].

Financial Data and Key Metrics Changes - For the first quarter, revenues were $651.3 million, a decline of 1.6% year on year, primarily due to varying late-stage clinical service fee wins and a slowing backlog burn rate [34][35] - Adjusted EBITDA for the quarter was $30.3 million, compared to $27.1 million in the prior year period, indicating year-over-year growth in adjusted EBITDA and adjusted EPS for the first time since the spin [34][39] - The net loss for the first quarter was $562.9 million, compared to a net loss of $79.8 million in the prior year, primarily due to a goodwill impairment charge of $488.8 million [40] Business Line Data and Key Metrics Changes - The clinical pharmacology business saw increased service fee and pass-through revenues, although bookings were slightly softer in the first quarter [36][70] - The backlog grew by 4% over the past twelve months, reaching over $7.7 billion, with a book-to-bill ratio of 1.02 for the quarter and 1.14 for the trailing twelve months [39][46] Market Data and Key Metrics Changes - The market environment remains competitive but stable, with larger customers maintaining consistent opportunities and spending [11][48] - Biotech sentiment is mixed, with some companies being cautious due to regulatory confirmations and funding challenges, while others report timely regulatory meetings [12][76] Company Strategy and Development Direction - The company is focused on improving gross margins and reducing SG&A costs, targeting gross cost reductions of $150 million in 2025 [51] - There is a strategic emphasis on enhancing customer relationships and incorporating AI to improve efficiency and quality in proposals and contracts [17][28] - The company aims to achieve a 1.2 times book-to-bill ratio over time, although current economic uncertainties make it difficult to predict new business wins [48] Management's Comments on Operating Environment and Future Outlook - Management acknowledges challenges in the biotech funding environment, noting that while there are delays in decision-making, the pipeline remains solid [92] - The company reaffirms its guidance for 2025, targeting revenues between $2.45 billion and $2.55 billion and adjusted EBITDA between $170 million and $200 million [46][45] Other Important Information - The company has exited all major transition services agreements and is now operating independently, which has contributed to a reduction in one-time spin-related costs [34] - The company has initiated transformation programs to reduce personnel costs and optimize its operational footprint [51] Q&A Session Summary Question: Revenue cadence and margin improvement - The first quarter revenue was better than expected, but guidance suggests revenue may be flat to down for the rest of the year, with margin expansion expected to be gradual [60][66] Question: Clinical pharmacology RFP volume and win rates - The clinical pharmacology business remains strong, with a return of the pipeline, and efforts are being made to convert pass-through work into revenue [69][71] Question: Bookings backdrop and pricing environment - The biotech pipeline is growing, but there is increased caution regarding funding, leading to slower decision-making [75][92] Question: SG&A expectations and margin perspective - Marginal improvement in SG&A is expected in the second quarter, with more significant improvements anticipated in the latter half of the year [82][84] Question: Cash flow improvement and DSOs - DSOs are expected to improve over the year, targeting low to mid-40s by year-end, with cash flow expected to be positive in Q3 and Q4 [88][89]

Financial Data and Key Metrics Changes - For the first quarter of 2025, revenues were $651.3 million, a decline of 1.6% year-over-year, primarily due to varying late-stage clinical service fee wins and a slowing backlog burn rate [32][33] - Adjusted EBITDA for the quarter was $30.3 million, compared to $27.1 million in the prior year period, indicating year-over-year growth [32][37] - The net loss for the first quarter was $562.9 million, significantly higher than the net loss of $79.8 million in the prior year, mainly due to a goodwill impairment charge of $488.8 million [38][39] - The book-to-bill ratio for the quarter was 1.02 times, with a trailing twelve-month ratio of 1.14 times [6][37] - The backlog grew by 4% over the past twelve months, totaling over $7.7 billion [37] Business Line Data and Key Metrics Changes - The clinical pharmacology business saw increases in service fee and pass-through revenues, contributing positively to overall performance [33][37] - The company is experiencing a shift towards biotech, with a solid pipeline of opportunities, although some biotech customers are being more cautious due to funding concerns [10][11][46] - The full-service outsourcing business has shown success, with notable achievements such as completing recruitment for a renal product ahead of schedule and accelerating timelines for cancer studies [19][45] Market Data and Key Metrics Changes - The market environment remains competitive but stable, with larger customers maintaining consistent opportunities and spending [10][46] - There is a noted increase in caution among biotech customers regarding funding and regulatory confirmations, which is impacting decision-making timelines [11][90] - The pricing environment is competitive, but there is no notable lack of discipline around pricing [76] Company Strategy and Development Direction - The company is focused on improving customer relationships and enhancing its commercial strategy, including the incorporation of AI to increase efficiency [15][26] - A transformation year is anticipated for 2025, with goals to improve gross margins and reduce SG&A costs [16][48] - The company aims to achieve a 1.2 times book-to-bill ratio over time, although current economic uncertainties make it difficult to predict new business wins [46] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience and ability to navigate challenges, emphasizing the importance of innovation in drug development [12][51] - The company is targeting operating cash flow to be positive for the remainder of 2025, driven by improving DSO and adjusted EBITDA [41][86] - There is an expectation for SG&A improvements to be more pronounced in the latter half of the year as efficiency programs take effect [80] Other Important Information - The company has reduced its permanent headcount by over 8% in the past year to align costs with revenue [34][48] - A significant goodwill impairment charge was recorded due to uncertain macroeconomic conditions and a decline in share price [38] - The company has initiated transformation programs to reduce personnel costs and optimize operational expenditures [48][50] Q&A Session Summary Question: Revenue expectations and cadence - The first quarter revenue was better than expected, but guidance suggests revenue may be flat to down for the rest of the year, with margin expansion expected to be gradual [58][64] Question: Clinical pharmacology RFP volume and win rates - The clinical pharmacology business remains strong, with a return of the pipeline, and efforts are being made to convert pass-through work into revenue [67][68] Question: Bookings backdrop and competition - The biotech pipeline is growing, but there is increased caution regarding funding and decision-making timelines, with competition remaining disciplined in pricing [70][76] Question: SG&A expectations - Marginal improvement in SG&A is expected in the second quarter, with more significant improvements anticipated in the latter half of the year [78][80] Question: Cash flow improvement and DSO expectations - DSOs are expected to improve over the year, targeting low to mid-40s by year-end, with cash flow expected to be positive in Q3 and Q4 [85][86] Question: Biotech funding concerns - There is caution among biotech customers regarding funding, leading to slower decision-making, but the pipeline remains strong [90][92]

分组1 - Fortrea Holdings Inc. reported quarterly earnings of $0.02 per share, exceeding the Zacks Consensus Estimate of a loss of $0.07 per share, and showing improvement from a loss of $0.04 per share a year ago, resulting in an earnings surprise of 128.57% [1] - The company posted revenues of $651.3 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 6.79%, although this represents a decline from year-ago revenues of $662.1 million [2] - Fortrea Holdings Inc. has underperformed the market, with shares losing about 67% since the beginning of the year compared to the S&P 500's decline of -3.8% [3] 分组2 - The current consensus EPS estimate for the coming quarter is $0.03 on revenues of $610.26 million, and for the current fiscal year, it is $0.39 on revenues of $2.47 billion [7] - The Zacks Industry Rank for Medical - Biomedical and Genetics is in the top 34% of over 250 Zacks industries, indicating that the industry outlook can significantly impact stock performance [8]

Q1 2025 Earnings Presentation FORWARD-LOOKING STATEMENTS & NON-GAAP FINANCIAL MEASURES Forward-Looking Statements Disclosure. Certain information in this presentation contains "forward-looking" statements. You should not place undue reliance on these statements. Forward-looking statements include information concerning our possible or assumed future results of operations, including descriptions of our business strategies. These statements often include words such as "believe", "expect", "approximately", "an ...

[Financial Highlights](index=1&type=section&id=First%20Quarter%202025%20Financial%20Results) Fortrea reported Q1 2025 revenue of $651.3 million, a GAAP net loss of $562.9 million due to goodwill impairment, and increased adjusted EBITDA Q1 2025 Key Financial Metrics | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues ($ millions) | $651.3 | $662.1 | | GAAP Net Loss ($ millions) | $(562.9) | $(79.8) | | Diluted Loss Per Share (GAAP) ($) | $(6.25) | $(0.89) | | Adjusted EBITDA ($ millions) | $30.3 | $27.1 | | Adjusted Diluted EPS ($) | $0.02 | $(0.05) | | Book-to-Bill Ratio | 1.02x | N/A | - The first quarter GAAP net loss included a significant non-cash goodwill impairment charge of **$488.8 million**[6](index=6&type=chunk) - The company's backlog stood at **$7,721 million** as of March 31, 2025[6](index=6&type=chunk) - The trailing 12-month book-to-bill ratio was **1.14x**[9](index=9&type=chunk) [Full Year 2025 Guidance](index=1&type=section&id=Full%20Year%202025%20Guidance) Fortrea reiterates its full-year 2025 guidance, targeting revenues between $2,450 million and $2,550 million and adjusted EBITDA Full Year 2025 Guidance | Metric | Guidance Range | | :--- | :--- | | Revenues ($ millions) | $2,450 - $2,550 | | Adjusted EBITDA ($ millions) | $170 - $200 | - The guidance assumes that foreign currency exchange rates as of December 31, 2024, will remain in effect for the forecast period[7](index=7&type=chunk) [Management Changes](index=1&type=section&id=Other%20Developments) Thomas Pike steps down as Chairman and CEO, with Peter M. Neupert appointed Interim CEO and Board Chair, as a search for a permanent CEO progresses - **Thomas Pike** is stepping down as Chairman and CEO, with **Peter M. Neupert** appointed as **Interim CEO** and **Board Chair**[8](index=8&type=chunk) - A succession planning process is underway, and an executive search for a new CEO is at an advanced stage[8](index=8&type=chunk) - Mr. Pike will continue to serve as a resource to the leadership team through a consulting agreement during the transition[8](index=8&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) The consolidated financial statements for Q1 2025 reflect a significant net loss driven by goodwill impairment, reduced assets, and increased cash usage [Condensed Consolidated Statements of Operations](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Q1 2025 revenues decreased to $651.3 million, with a $488.8 million goodwill impairment leading to a $562.9 million net loss from continuing operations Q1 2025 vs Q1 2024 Statement of Operations | Line Item | Q1 2025 ($ millions) | Q1 2024 ($ millions) | | :--- | :--- | :--- | | Revenues | $651.3 | $662.1 | | Total costs and expenses | $1,171.4 | $699.5 | | Goodwill and other asset impairments | $488.8 | $— | | Operating loss | $(520.1) | $(37.4) | | Loss from continuing operations | $(562.9) | $(79.8) | | Basic and diluted loss per share ($) | $(6.25) | $(1.13) | [Condensed Consolidated Balance Sheets](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) Total assets decreased to $3,121.1 million as of March 31, 2025, primarily due to reduced goodwill, resulting in a significant drop in total equity Balance Sheet Comparison | Line Item | March 31, 2025 ($ millions) | December 31, 2024 ($ millions) | | :--- | :--- | :--- | | Total current assets | $970.3 | $948.2 | | Goodwill, net | $1,242.5 | $1,710.4 | | Total assets | $3,121.1 | $3,579.2 | | Total current liabilities | $999.1 | $949.5 | | Total liabilities | $2,262.3 | $2,216.8 | | Total equity | $858.8 | $1,362.4 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Net cash used for operating activities significantly increased to $124.2 million in Q1 2025, leading to a $16.9 million decrease in cash and cash equivalents Q1 2025 vs Q1 2024 Cash Flows | Cash Flow Activity | Q1 2025 ($ millions) | Q1 2024 ($ millions) | | :--- | :--- | :--- | | Net cash used for operating activities | $(124.2) | $(25.6) | | Net cash provided by (used for) investing activities | $16.1 | $(9.2) | | Net cash provided by financing activities | $88.4 | $21.3 | | Net change in cash and cash equivalents | $(16.9) | $(15.8) | | Cash and cash equivalents at end of period | $101.6 | $92.8 | [Reconciliation of Non-GAAP Measures](index=7&type=section&id=RECONCILIATION%20OF%20NON-GAAP%20MEASURES) The company provides reconciliations for non-GAAP measures, including Adjusted EBITDA of $30.3 million and a negative free cash flow of $127.1 million for Q1 2025 - The company uses non-GAAP measures like Adjusted EBITDA and Adjusted Net Income in its operational and financial decision-making to provide a more meaningful indicator of underlying operating performance[14](index=14&type=chunk) [Net Income to Adjusted EBITDA Reconciliation](index=7&type=section&id=NET%20INCOME%20TO%20ADJUSTED%20EBITDA%20RECONCILIATION) Adjusted EBITDA from continuing operations increased to $30.3 million in Q1 2025, reconciled from a GAAP net loss by adding back significant non-cash charges Adjusted EBITDA Reconciliation | Line Item | Q1 2025 ($ millions) | Q1 2024 ($ millions) | | :--- | :--- | :--- | | Net loss from continuing operations | $(562.9) | $(79.8) | | Goodwill and other asset impairments | $488.8 | $— | | Interest expense, net | $22.3 | $34.3 | | Depreciation and amortization | $19.5 | $21.9 | | Stock based compensation | $14.6 | $13.5 | | One-time spin-related costs | $10.0 | $17.0 | | **Adjusted EBITDA from continuing operations** | **$30.3** | **$27.1** | [Net Income to Adjusted Net Income Reconciliation](index=8&type=section&id=NET%20INCOME%20TO%20ADJUSTED%20NET%20INCOME%20RECONCILIATION) Adjusted net income from continuing operations improved to $1.9 million in Q1 2025, resulting in an adjusted diluted EPS of $0.02 after key non-GAAP adjustments Adjusted Net Income Reconciliation | Line Item | Q1 2025 ($ millions) | Q1 2024 ($ millions) | | :--- | :--- | :--- | | Net loss from continuing operations | $(562.9) | $(79.8) | | Goodwill and other asset impairments | $488.8 | $— | | Stock based compensation | $14.6 | $13.5 | | Amortization | $14.5 | $15.3 | | **Adjusted net income (loss) from continuing operations** | **$1.9** | **$(4.9)** | | **Adjusted diluted EPS from continuing operations ($)** | **$0.02** | **$(0.05)** | [Free Cash Flow Reconciliation](index=10&type=section&id=NET%20CASH%20USED%20FOR%20OPERATING%20ACTIVITIES%20TO%20FREE%20CASH%20FLOW%20RECONCILIATION) Free cash flow for Q1 2025 was a negative $127.1 million, primarily due to $124.2 million in net cash used for operating activities Q1 2025 Free Cash Flow | Line Item | Q1 2025 ($ millions) | | :--- | :--- | | Net cash used for operating activities | $(124.2) | | Capital expenditures | $(2.9) | | **Free cash flow** | **$(127.1)** |

Core Insights - Fortrea reported a solid start to 2025 with a focus on disciplined execution of its strategy and improving efficiency to better serve customers [2][4] Financial Performance - Revenue for Q1 2025 was $651.3 million, a decrease from $662.1 million in Q1 2024 [3] - GAAP net loss for Q1 2025 was $562.9 million, with a diluted loss per share of $6.25, which included a non-cash goodwill impairment charge of $488.8 million [4][9] - Adjusted EBITDA for Q1 2025 was $30.3 million, compared to $27.1 million in Q1 2024 [4][9] - The backlog as of March 31, 2025, was $7,721 million, with a book-to-bill ratio of 1.02x for the quarter [4][9] Guidance - The company reiterated its full-year 2025 guidance, targeting revenues between $2,450 million and $2,550 million and adjusted EBITDA between $170 million and $200 million [5] Leadership Changes - Fortrea announced that Peter M. Neupert will serve as Interim CEO and Board Chair as Tom Pike steps down from his role effective May 13, 2025 [6] Cash Flow and Balance Sheet - Net cash used for operating activities in Q1 2025 was $124.2 million, with free cash flow also reported at $(127.1) million [21][37] - Total assets as of March 31, 2025, were $3,121.1 million, down from $3,579.2 million at the end of 2024 [20]

Core Points - Thomas Pike is stepping down as CEO and Chairman of Fortrea, with Peter M. Neupert appointed as Interim CEO and Board Chair starting May 13, 2025 [1][2] - The transition is part of a succession planning process, with an executive search already in advanced stages [1] - Neupert expressed gratitude for Pike's leadership during a challenging period and noted the company's progress towards independence since its spin-off [2] Company Overview - Fortrea is a leading global contract research organization (CRO) that provides clinical development solutions to the life sciences industry [4] - The company partners with biopharmaceutical, biotechnology, medical device, and diagnostic companies to drive healthcare innovation [4] - Fortrea offers phase I-IV clinical trial management, clinical pharmacology, and consulting services, leveraging over 30 years of experience across more than 20 therapeutic areas [4]

Company Overview - Oculis Holding AG (OCS) is expected to report a year-over-year decline in earnings with a projected loss of $0.51 per share, reflecting a change of -15.9% compared to the previous year [3] - Revenues are anticipated to remain flat at $0.22 million, unchanged from the year-ago quarter [3] Earnings Expectations - The consensus EPS estimate has been revised 5.01% higher in the last 30 days, indicating a reassessment by analysts [4] - The Most Accurate Estimate for Oculis is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -7.32%, suggesting a bearish outlook on earnings prospects [10][11] Historical Performance - Oculis has not been able to beat consensus EPS estimates in any of the last four quarters, with the last reported quarter showing a surprise of -58.33% [12][13] Market Reaction - The stock may experience upward movement if the actual results exceed expectations, while a miss could lead to a decline [2] - The combination of a negative Earnings ESP and a Zacks Rank of 3 makes it challenging to predict an earnings beat for Oculis [11][16]