Fortrea Holdings (NasdaqGS:FTRE) FY 2025 Conference December 02, 2025 01:00 PM ET Company ParticipantsJill McConnell - CFOAnshul Thakral - CEOConference Call ParticipantsNone - Analyst 2None - Analyst 1Patrick Donnelly - AnalystPatrick DonnellyAll right. We can look to get started. Thank you for joining us. I'm Patrick Donnelly, the tools diagnostics CRO analyst here at Citi. Happy to have Anshul and Jill with us from Fortrea, and we can just dive in. Anshul, I guess to start, 3Q obviously saw a nice bounce ...

Fortrea Holdings (NasdaqGS:FTRE) FY 2025 Conference December 02, 2025 01:00 PM ET Company ParticipantsJill McConnell - CFOAnshul Thakral - CEOConference Call ParticipantsNone - Analyst 2None - Analyst 1Patrick Donnelly - AnalystPatrick DonnellyAll right. We can look to get started. Thank you for joining us. I'm Patrick Donnelly, the tools diagnostics CRO analyst here at Citi. Happy to have Anshul and Jill with us from Fortrea, and we can just dive in. Anshul, I guess to start, 3Q obviously saw a nice bounce ...

Financial Data and Key Metrics Changes - The company reported a book-to-bill ratio of 1.13 times in Q3, indicating a recovery from Q2 [3] - The management highlighted a significant improvement in cash flow and a reduction in debt, having paid down approximately $77 million of senior secured notes [38][39] Business Line Data and Key Metrics Changes - The company has seen an increase in RFP volumes, particularly from new clients across various phases of clinical trials, including small biotech and large pharma [5][6] - The phase one business has continued to grow, contributing positively to the overall performance [50] Market Data and Key Metrics Changes - The biotech funding environment is showing signs of improvement, although it has not yet returned to the levels seen in 2018 and 2019 [12] - The company has not experienced significant cancellations, maintaining a consistent cancellation rate in line with historical norms [85][86] Company Strategy and Development Direction - The company is focusing on operational excellence, project management, and financial discipline to enhance profitability and growth [20][21] - A bespoke go-to-market strategy is being implemented to better serve biotech clients, emphasizing the right resource allocation and project-level profitability [10][11][72] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the market, noting a return to growth and improved customer sentiment following a leadership transition [2][3] - The company is committed to continuous improvement in project management and operational efficiency, with a focus on long-term growth [20][21][72] Other Important Information - The company has set a revenue guidance of $2.7-$2.75 billion for the year, with a focus on maintaining margins despite the impact of pass-throughs [58][60] - Cost-saving initiatives are on track, with a target of $150 million in gross savings, of which a portion is being reinvested in employee development [52][53] Q&A Session Summary Question: How does the company view the current debt situation? - The company has focused on debt repayment since the spin-off, successfully reducing debt by approximately 30% and continuing to prioritize debt pay down alongside targeted investments for growth [38][39][44] Question: What is the company's approach to pricing in the competitive landscape? - The company has chosen not to engage in aggressive pricing strategies, focusing instead on maintaining healthy margins and project profitability [30][31][32] Question: How does the company plan to manage operational changes moving forward? - Management emphasized the importance of project-level profitability and the need for the right systems and processes to manage projects effectively [72][73][74] Question: What is the outlook for cancellations in the industry? - The company has maintained a consistent cancellation rate, with no significant deviations from historical norms, unlike some competitors facing higher cancellation rates due to specific market exposures [85][86] Question: How is the company responding to the evolving pharma landscape? - Management noted a shift in customer willingness to move forward with trials, indicating a more stable operating environment following recent policy changes [87][89]