Fortrea — Third Quarter 2026 Earnings Summary

Financial Performance:

• Third quarter 2026 revenue was $691.5 million, compared to $701.3 million in the third quarter of 2025.
• Year-to-date 2026 revenue was $2,006.2 million, compared to $2,062.9 million in the same period of 2025.
• Third quarter GAAP net income was $0.6 million ($0.01 per diluted share), compared to a GAAP net loss of $(15.9) million ($(0.17) per share) in the third quarter of 2025.
• Year-to-date 2026 GAAP net loss was $(36.2) million ($(0.38) per share), compared to a net loss of $(953.7) million ($(10.53) per share) in 2025, which included a non-cash goodwill impairment charge of $797.9 million.
• Third quarter adjusted net income was $27.9 million ($0.28 per diluted share), compared to $11.7 million ($0.12 per share) in the third quarter of 2025.
• Year-to-date 2026 adjusted net income was $65.8 million ($0.66 per diluted share), compared to $31.2 million ($0.34 per share) in 2025.
• Third quarter adjusted EBITDA was $58.0 million, compared to $50.7 million in the third quarter of 2025.
• Year-to-date 2026 adjusted EBITDA was $163.7 million, compared to $135.9 million in 2025.
• Cash provided by operations for the third quarter was $60.8 million, resulting in free cash flow of $52.5 million.
• Year-to-date 2026 net cash provided by operating activities was $72.7 million, compared to $(15.6) million in 2025.
• Year-to-date 2026 free cash flow was $47.4 million.
• Total assets were $2,738.2 million as of September 30, 2026, compared to $2,715.7 million as of December 31, 2025.
• Long-term debt was $1,031.9 million as of September 30, 2026, compared to $1,048.0 million as of December 31, 2025.
• Cash and cash equivalents were $220.6 million as of September 30, 2026, compared to $174.6 million as of December 31, 2025.

Guidance and Future Outlook:

• The Company raised the midpoints and narrowed the ranges for full-year 2026 revenue and adjusted EBITDA guidance.
• Updated full-year 2026 revenue guidance is now $2,665 million to $2,690 million.
• Updated full-year 2026 adjusted EBITDA guidance is now $210 million to $218 million.
• The Company stated it remains focused on translating stronger demand into revenue growth, margin expansion, and long-term shareholder value.

Business Segments and Product Lines:

• The Company reported a book-to-bill ratio of 1.12x for the third quarter and 1.12x for the trailing 12 months.
• The Company performed a detailed review of contracts in its backlog, reducing it by $558 million to reflect the cumulative impact of estimated scope and study delivery requirements, including inactive trials.
• Adjusted backlog as of September 30, 2026, was $7,316 million.
• The backlog adjustment had no impact on historical financial results, previously issued guidance, or near-term revenue estimates.
• The Company highlighted targeted investments in early clinical development and technology to enhance value delivery to clients.

Market and Competitive Landscape:

• Fortrea is described as a leading global contract research organization (CRO) providing clinical development solutions to the life sciences industry.
• The Company partners with emerging and large biopharmaceutical, biotechnology, medical device, and diagnostic companies.
• Fortrea's solutions leverage three decades of experience spanning more than 20 therapeutic areas and a strong investigator site network.
• The Company operates in approximately 100 countries.

Risks and Challenges:

• Forward-looking statements are subject to risks including dependence on third parties, ability to execute business strategies, and risks associated with international operations, tariffs, trade sanctions, and currency fluctuations.
• Risks include the anticipated benefits of the acquisition of the Early Phase Services division of Worldwide Clinical Trials, customer or therapeutic area concentrations, and technology adoption risks.
• Potential risks include deterioration in the macroeconomic environment, changes in government regulations, defaults or cancellations by customers, and the risk that backlog may not grow or convert to revenue as anticipated.
• Risks also include underpricing contracts, cost overruns, delays in documentation of change orders, and the impact of pending or future litigation.

Management Commentary and Tone:

• CEO Anshul Thakral stated the quarter reflected progress on the return-to-growth strategy, driven by stronger commercial execution, operational improvements, and financial discipline.
• Management expressed confidence in raising full-year guidance midpoints while narrowing ranges due to sustained bookings momentum and continued execution against priorities.
• The CEO noted that teams are embracing the future direction while delivering for clients today.

Other Key Points:

• The Company reduced backlog by $558 million during the third quarter to reflect estimated scope and study delivery requirements across customer contracts, including inactive trials.
• The Company will host a conference call on October 29, 2026, at 8:00 am ET to review results and conduct a Q&A session.
• A supplemental slide presentation will be available on the Investor Relations website prior to the call.
• The Company's full-year 2026 guidance measures (other than revenue) are provided on a non-GAAP basis without a reconciliation to GAAP measures due to the inability to predict certain items with reasonable certainty.