Core Viewpoint - Fortrea Holdings Inc. reported quarterly earnings of $0.19 per share, significantly exceeding the Zacks Consensus Estimate of $0.06 per share, and showing a turnaround from a loss of $0.03 per share a year ago, indicating strong performance in the latest quarter [1][2] Financial Performance - The company achieved revenues of $710.3 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 12.60% and reflecting an increase from $662.4 million in the same quarter last year [2] - Over the last four quarters, Fortrea has exceeded consensus EPS estimates two times and topped revenue estimates three times [2] Stock Performance - Fortrea Holdings Inc. shares have declined approximately 64.8% since the beginning of the year, contrasting with the S&P 500's gain of 7.1% [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it is expected to perform in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.14 on revenues of $607.87 million, while for the current fiscal year, the estimate is $0.42 on revenues of $2.5 billion [7] - The outlook for the Medical - Biomedical and Genetics industry, where Fortrea operates, is currently in the bottom 42% of over 250 Zacks industries, which may impact stock performance [8]

Financial Performance - Q2 2025 revenue increased to $710.3 million, a 7.2% increase compared to $662.4 million in Q2 2024 [13] - Adjusted EBITDA for Q2 2025 was $54.9 million, a 0.5% decrease compared to $55.2 million in Q2 2024 [13] - Net loss for Q2 2025 was $(374.9) million, including a non-cash goodwill impairment charge of $309.1 million [13] - Adjusted net income for Q2 2025 was $17.6 million, compared to a loss of $(2.3) million in Q2 2024 [13] - The company is raising 2025 revenue guidance to $2.6 billion - $2.7 billion and reaffirming Adjusted EBITDA guidance of $170 million - $200 million [7, 20] Cash Flow and Liquidity - Free cash flow for QTD Q2 2025 was $14.3 million [16] - Gross debt as of June 30, 2025, was $1.192 billion [16] - Net debt as of June 30, 2025, was $1.1108 billion [16] - Net leverage was 5.4x based on a TTM Adjusted EBITDA of $205.4 million [16, 18] Other Key Metrics - Q2 Book-to-Bill was 0.79x, impacted by the CEO transition period [7] - Trailing 12 months Book-to-Bill was 1.10x [7]

[Highlights and Management Commentary](index=1&type=section&id=Highlights%20and%20Management%20Commentary) Fortrea appointed Anshul Thakral as CEO, completed its spin-related transition, and reported sound Q2 fundamentals - Anshul Thakral joined Fortrea as CEO on August 4, 2025, succeeding the Interim CEO[4](index=4&type=chunk) - The company stated that the demands of the spin-related transition are now complete, allowing for a full focus on future value creation[4](index=4&type=chunk) Q2 2025 Key Highlights | Metric | Value | | :--- | :--- | | Revenues ($ millions) | $710.3 | | GAAP Net Loss ($ millions) | $(374.9) | | Adjusted EBITDA ($ millions) | $54.9 | | GAAP Diluted EPS ($) | $(4.14) | | Adjusted Diluted EPS ($) | $0.19 | | Book-to-bill (Quarter) | 0.79x | | Book-to-bill (TTM) | 1.10x | [Financial Performance](index=1&type=section&id=Financial%20Performance) Fortrea reported Q2 and H1 2025 revenue growth, with GAAP results impacted by goodwill impairment, while adjusted metrics improved [Second Quarter 2025 Results](index=1&type=section&id=Second%20Quarter%202025%20Results) Q2 2025 revenue increased to **$710.3 million**, but a **$(374.9) million** GAAP net loss resulted from goodwill impairment, with adjusted net income improving Q2 2025 vs Q2 2024 Financial Results | Metric | Q2 2025 ($ millions) | Q2 2024 ($ millions) | | :--- | :--- | :--- | | Revenue | $710.3 | $662.4 | | GAAP Net Loss | $(374.9) | $(99.3) | | GAAP Diluted Loss per Share ($) | $(4.14) | $(1.11) | | Adjusted Net Income (Loss) | $17.6 | $(2.3) | | Adjusted Diluted Income (Loss) per Share ($) | $0.19 | $(0.03) | | Adjusted EBITDA | $54.9 | $55.2 | - The Q2 GAAP net loss included a significant non-cash goodwill impairment charge of **$309.1 million**, which impacted diluted loss per share by **$(3.41)**[7](index=7&type=chunk) [First Half 2025 Results](index=2&type=section&id=First%20Half%202025%20Results) H1 2025 revenue grew to **$1,361.6 million**, but a substantial **$(937.8) million** GAAP net loss was recorded due to goodwill impairment, with adjusted net income improving H1 2025 vs H1 2024 Financial Results | Metric | H1 2025 ($ millions) | H1 2024 ($ millions) | | :--- | :--- | :--- | | Revenue | $1,361.6 | $1,324.5 | | GAAP Net Loss | $(937.8) | $(179.1) | | GAAP Diluted Loss per Share ($) | $(10.37) | $(2.01) | | Adjusted Net Income (Loss) | $19.5 | $(7.2) | | Adjusted Diluted Income (Loss) per Share ($) | $0.21 | $(0.08) | | Adjusted EBITDA | $85.2 | $82.3 | - The goodwill impairments recorded during the year were primarily a result of declines in the Company's share price and a market-driven increase in the discount rate[12](index=12&type=chunk) [Backlog and Book-to-Bill](index=2&type=section&id=Backlog%20and%20Book-to-Bill) Fortrea's backlog was **$7,547 million** as of June 30, 2025, with a Q2 book-to-bill ratio of **0.79x** and a trailing twelve-month ratio of **1.10x** - Backlog was **$7,547 million** as of June 30, 2025[9](index=9&type=chunk) - The book-to-bill ratio was **0.79x** for the second quarter and **1.10x** for the trailing 12 months[8](index=8&type=chunk)[9](index=9&type=chunk) [Full-Year 2025 Guidance](index=2&type=section&id=Full-Year%202025%20Guidance) Fortrea raised its full-year 2025 revenue guidance while affirming its adjusted EBITDA forecast, indicating higher expected revenues with maintained profitability Full-Year 2025 Guidance | Metric | Guidance Range ($ millions) | | :--- | :--- | | Revenue | $2,600 to $2,700 | | Adjusted EBITDA | $170 to $200 | - The revenue guidance was increased, while the adjusted EBITDA guidance was affirmed[13](index=13&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) The consolidated financial statements reflect significant GAAP net losses from goodwill impairments, reduced assets and equity, and a shift to cash used in operations for H1 2025 [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 operating loss widened to **$(330.3) million** due to a **$309.1 million** goodwill impairment, resulting in a **$(374.9) million** loss from continuing operations Q2 2025 Statement of Operations Highlights | Line Item | Q2 2025 ($ millions) | Q2 2024 ($ millions) | | :--- | :--- | :--- | | Revenues | $710.3 | $662.4 | | Total costs and expenses | $1,040.6 | $713.3 | | Goodwill and other asset impairments | $309.1 | $— | | Operating loss | $(330.3) | $(50.9) | | Loss from continuing operations | $(374.9) | $(99.3) | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets decreased to **$2,835.1 million** from **$3,579.2 million** due to a goodwill reduction, leading to a sharp decline in total equity Balance Sheet Highlights | Line Item | June 30, 2025 ($ millions) | Dec 31, 2024 ($ millions) | | :--- | :--- | :--- | | Cash and cash equivalents | $81.2 | $118.5 | | Goodwill, net | $965.2 | $1,710.4 | | Total assets | $2,835.1 | $3,579.2 | | Total liabilities | $2,245.9 | $2,216.8 | | Total equity | $589.2 | $1,362.4 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used for operating activities was **$(102.4) million** for H1 2025, a reversal from the prior year, primarily due to net loss partially offset by non-cash charges Six Months Ended June 30 Cash Flow Highlights | Line Item | 2025 ($ millions) | 2024 ($ millions) | | :--- | :--- | :--- | | Net cash (used for) provided by operating activities | $(102.4) | $248.1 | | Net cash provided by investing activities | $8.6 | $256.2 | | Net cash provided by (used for) financing activities | $49.4 | $(482.7) | | Net change in cash and cash equivalents | $(37.3) | $17.6 | | Cash and cash equivalents at end of period | $81.2 | $126.2 | [Non-GAAP Financial Measures and Reconciliations](index=3&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section reconciles GAAP to non-GAAP measures like Adjusted EBITDA and Net Income, explaining their use to reflect underlying business performance by excluding non-recurring or non-cash items [Explanation of Non-GAAP Measures](index=3&type=section&id=Explanation%20of%20Non-GAAP%20Measures) Fortrea uses non-GAAP measures like Adjusted EBITDA and Net Income to provide a more meaningful view of core operating performance by excluding non-recurring and non-cash items - The company uses non-GAAP measures to focus on what it considers a more meaningful indicator of underlying operating performance[19](index=19&type=chunk) - Non-GAAP measures should not be considered in isolation or as a substitute for GAAP results[18](index=18&type=chunk)[22](index=22&type=chunk) [Net Income to Adjusted EBITDA Reconciliation](index=8&type=section&id=Net%20Income%20to%20Adjusted%20EBITDA%20Reconciliation) Q2 2025 GAAP net loss of **$(374.9) million** was adjusted for a **$309.1 million** goodwill impairment to yield an Adjusted EBITDA of **$54.9 million**, similar to Q2 2024 Q2 Adjusted EBITDA Reconciliation | Line Item | Q2 2025 ($ millions) | Q2 2024 ($ millions) | | :--- | :--- | :--- | | Net loss from continuing operations | $(374.9) | $(99.3) | | Goodwill and other asset impairments | $309.1 | $— | | One-time spin-related costs | $10.4 | $53.9 | | Other adjustments | $63.3 | $45.4 | | **Adjusted EBITDA ($ millions)** | **$54.9** | **$55.2** | [Net Income to Adjusted Net Income Reconciliation](index=9&type=section&id=Net%20Income%20to%20Adjusted%20Net%20Income%20Reconciliation) The Q2 2025 GAAP net loss of **$(374.9) million** was reconciled to an Adjusted Net Income of **$17.6 million**, primarily by excluding the **$309.1 million** goodwill impairment Q2 Adjusted Net Income Reconciliation | Line Item | Q2 2025 ($ millions) | Q2 2024 ($ millions) | | :--- | :--- | :--- | | Net loss from continuing operations | $(374.9) | $(99.3) | | Goodwill and other asset impairments | $309.1 | $— | | One-time spin-related costs | $10.4 | $53.9 | | Other adjustments | $77.8 | $47.8 | | **Adjusted net income (loss) ($ millions)** | **$17.6** | **$(2.3)** | [Free Cash Flow Reconciliation](index=11&type=section&id=Free%20Cash%20Flow%20Reconciliation) Fortrea's Free Cash Flow for the six months ended June 30, 2025, was negative **$(112.8) million**, derived from net cash used for operating activities and capital expenditures Free Cash Flow for Six Months Ended June 30, 2025 | Line Item | Amount ($ millions) | | :--- | :--- | | Net cash used for operating activities | $(102.4) | | Capital expenditures | $(10.4) | | **Free cash flow ($ millions)** | **$(112.8)** |

Core Insights - Fortrea reported a revenue of $710.3 million for Q2 2025, an increase from $662.4 million in Q2 2024, indicating a year-over-year growth of approximately 7.5% [4][21] - The company experienced a GAAP net loss of $(374.9) million in Q2 2025, which included a non-cash goodwill impairment charge of $309.1 million, compared to a net loss of $(99.3) million in Q2 2024 [5][21] - Adjusted net income for Q2 2025 was $17.6 million, with diluted earnings per share of $0.19, contrasting with an adjusted net loss of $(2.3) million and a diluted loss per share of $(0.03) in Q2 2024 [5][34] - The backlog as of June 30, 2025, was $7,547 million, with a book-to-bill ratio of 0.79x for the quarter [6][9] - The company raised its revenue guidance for the full year 2025 to a range of $2,600 million to $2,700 million, while affirming adjusted EBITDA guidance between $170 million and $200 million [11][9] Financial Performance - For the first half of 2025, Fortrea reported revenues of $1,361.6 million, up from $1,324.5 million in the first half of 2024 [7][21] - The GAAP net loss for the first half of 2025 was $(937.8) million, which included a non-cash goodwill impairment charge of $797.9 million, compared to a net loss of $(179.1) million in the first half of 2024 [8][21] - Adjusted EBITDA for Q2 2025 was $54.9 million, slightly down from $55.2 million in Q2 2024 [5][29] Leadership Transition - Anshul Thakral joined Fortrea as CEO on August 4, 2025, succeeding Interim CEO Peter M. Neupert, who remains chairman of the Board [2][3] - Thakral expressed confidence in the company's position to assist customers in navigating the development landscape and emphasized the value of the company's team and operational excellence [3][2] Operational Highlights - The company is on track with cost-saving initiatives, which are expected to enhance operational efficiency [9] - Fortrea's leadership is focused on creating value for customers, employees, and shareholders, as stated by CFO Jill McConnell [2][3]

Core Insights - Fortrea has appointed Tracy Krumme as the new senior vice president of investor relations, succeeding Hima Inguva, who is leaving for other career opportunities [1][2] - Krumme brings over 30 years of experience in investor relations and capital markets, with a strong background in the CRO, life sciences, and healthcare sectors [2][3] - The company aims to enhance its investor relations strategy and communicate its vision and value proposition effectively to the investment community [3] Company Overview - Fortrea is a leading global contract research organization (CRO) that provides clinical development solutions to the life sciences industry [3] - The company partners with biopharmaceutical, biotechnology, medical device, and diagnostic companies to accelerate healthcare innovation and deliver life-changing therapies [3] - Fortrea offers services including phase I-IV clinical trial management, clinical pharmacology, and consulting, leveraging three decades of experience across more than 20 therapeutic areas [3]

Core Points - Fortrea has granted employment inducement awards to Anshul Thakral, the newly appointed President and CEO, effective August 4, 2025 [1] - The awards include 1,250,000 performance share units (PSUs) and 1,250,000 restricted stock units (RSUs), with specific vesting conditions [2] - The grants were made under the Company's 2025 Inducement Award Plan and comply with Nasdaq Listing Rules [3] Company Overview - Fortrea is a leading global provider of clinical development solutions for the life sciences industry, partnering with biopharmaceutical, biotechnology, medical device, and diagnostic companies [4] - The company 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] - Fortrea operates in approximately 100 countries, providing agile solutions to its global customers [4]

Core Viewpoint - A class action lawsuit has been filed against Fortrea Holdings Inc. for allegedly misleading investors regarding its financial performance and projections following its spin-off from Labcorp Holdings Inc. [1][3][5] Company Overview - Fortrea Holdings was spun off from Labcorp Holdings in June 2023 and operates as a standalone publicly traded company [3]. - The company entered into transition services agreements with Labcorp, which include IT, finance, HR, and marketing support [3]. Financial Performance - On March 3, 2025, Fortrea announced that its revenue and adjusted EBITDA targets for 2025 were not aligned with prior expectations, leading to a significant stock price drop of $3.47 per share, or 25.05%, closing at $10.38 [4]. - The company indicated that its Pre-Spin projects were underperforming, with less revenue and profitability than anticipated for 2025 [4]. Allegations in the Lawsuit - The complaint alleges that Fortrea overestimated revenue contributions from Pre-Spin projects and overstated cost savings from exiting transition services agreements [5]. - It is claimed that the company's previously announced EBITDA targets for 2025 were inflated, impacting the perceived viability of its post-Spin-Off business model [5].

Core Viewpoint - Rosen Law Firm is reminding investors who purchased Fortrea Holdings, Inc. securities during the specified class period of the upcoming lead plaintiff deadline on August 1, 2025, and the potential for compensation without out-of-pocket costs [1][2]. Group 1: Class Action Details - Investors who purchased Fortrea securities between July 3, 2023, and February 28, 2025, may be eligible for compensation through a class action lawsuit [1]. - A class action lawsuit has already been filed, and interested parties must act by the lead plaintiff deadline to represent other class members [2]. - The lawsuit alleges that Fortrea made false and misleading statements regarding its revenue projections and cost savings, leading to inflated EBITDA targets for 2025 [4]. Group 2: Rosen Law Firm's Credentials - Rosen Law Firm emphasizes the importance of selecting qualified legal counsel with a successful track record in securities class actions [3]. - The firm has achieved significant settlements, including the largest securities class action settlement against a Chinese company at the time, and has consistently ranked highly in securities class action settlements [3]. - In 2019, the firm secured over $438 million for investors, showcasing its capability in recovering funds for clients [3].

Core Viewpoint - A class action lawsuit has been filed against Fortrea Holdings Inc. for allegedly misleading investors regarding its financial performance and projections following its spin-off from Labcorp Holdings Inc. [1][3][5] Group 1: Company Background - Fortrea Holdings was spun off from Labcorp Holdings in June 2023 as a standalone publicly traded company [3] - The company entered into transition services agreements with Labcorp, which include various administrative and IT support services [3] Group 2: Financial Performance - On March 3, 2025, Fortrea announced that its revenue and adjusted EBITDA expectations for 2025 were not aligned with prior forecasts, leading to a significant stock price drop of 25.05% [4] - The company indicated that its Pre-Spin projects were underperforming, contributing less revenue and profitability than anticipated for 2025 [4] Group 3: Allegations in the Lawsuit - The complaint alleges that Fortrea overestimated revenue contributions from Pre-Spin projects and overstated cost savings from exiting transition services agreements [5] - It is claimed that the company's previously announced EBITDA targets for 2025 were inflated, impacting the perceived viability of its post-Spin-Off business model [5]

Core Viewpoint - Fortrea Holdings Inc. is facing a class action lawsuit for allegedly misleading investors regarding its financial projections and business model following its spin-off from Labcorp [3][4]. Company Overview - Fortrea is a global clinical research organization (CRO) that assists in the development of pharmaceutical and medical device products. It was spun off from Labcorp in June 2023 and had ongoing long-term projects at that time [3]. Allegations and Financial Misrepresentation - The lawsuit claims that Fortrea overestimated the revenue from its Pre-Spin Projects for 2025, overstated cost savings from phasing out transition service agreements (TSAs), and inflated its EBITDA targets for 2025, leading to a misleadingly positive outlook on its post-spin-off business model [5]. - Specific allegations include: 1. Overestimation of revenue from Pre-Spin Projects for 2025 [5]. 2. Overstatement of cost savings from the elimination of TSAs [5]. 3. Inflated EBITDA targets for 2025 [5]. Market Reactions and Stock Performance - Following a downgrade by Jefferies on September 25, 2024, which cited weaknesses in Fortrea's CRO model and the misleading nature of its cost savings, the stock dropped over 12% [5]. - A subsequent downgrade by Baird Equity Research on December 6, 2024, after the cancellation of two conferences, led to an additional 8% decline in stock price due to concerns over Fortrea's inconsistent performance and communication [5]. - On March 3, 2025, Fortrea reported disappointing Q4 and full-year 2024 results, admitting that its revenue and EBITDA goals for 2025 were unrealistic, resulting in a stock drop of more than 25% [5].