Fortrea Reports Second Quarter 2025 Results (Form 8-K)

Fortrea Reports Second Quarter 2025 Results

For the three months ended June 30, 2025, from continuing operations:

•Revenues of $710.3 million

•GAAP net loss of $(374.9) million, inclusive of a non-cash goodwill impairment charge

•Adjusted EBITDA of $54.9 million

•GAAP and adjusted net (loss) income per diluted share of $(4.14) and $0.19, respectively

•Book-to-bill ratio of 0.79x, resulting in 1.10x book-to-bill for the trailing 12 months

•Cost saving initiatives remain on track

•Raising 2025 revenue guidance to a range of $2,600 million to $2,700 million; affirming 2025 adjusted EBITDA guidance

DURHAM, N.C., August 06, 2025- Fortrea (Nasdaq: FTRE) (the "Company"), a leading global contract research organization (CRO), today reported financial results for the second quarter ended June 30, 2025.

"As Fortrea marked two years of independence at the end of June, the last remaining demands of the spin-related transition are firmly in the rear-view mirror," said Fortrea Chief Financial Officer, Jill McConnell. "Fortrea is now positioned to fully focus on our future, with an unwavering dedication to creating value for our customers, employees and shareholders. Our second quarter performance demonstrated that our business fundamentals are sound, our cash flow is positive, and we delivered on our operational commitments. As we look ahead, we're excited to welcome Anshul Thakral as our CEO and we're looking forward to his leadership and the passion for patients that he will bring to Fortrea."

As announced on June 11, 2025, Anshul Thakral joined Fortrea as CEO on August 4, 2025, succeeding Interim CEO Peter M. Neupert, who remains chairman of Fortrea's Board of Directors (the "Board"). Thakral also serves as a director of the Board.

"My first impressions at Fortrea have underscored my confidence that we are well positioned to help customers navigate a complicated development landscape," said Thakral. "Our team at Fortrea is engaged and experienced. Our customers have expressed to me how highly they value our people, our value proposition and our commitment to operational excellence. I'm looking forward to working with our team as we partner with our customers and strengthen a platform for growth that drives shareholder value and ultimately benefits the patients we serve."

All commentary in this press release relates to continuing operations unless otherwise noted.

Second Quarter 2025 Financial Results

Revenue for the second quarter was $710.3 million, compared to $662.4 million in the second quarter of 2024.

Second quarter GAAP net loss was $(374.9) million and diluted loss per share was $(4.14), inclusive of a non-cash goodwill impairment charge of $309.1 million which impacted diluted loss per share by $(3.41), compared to second quarter of 2024 GAAP net loss of $(99.3) million and diluted loss per share of $(1.11). Second quarter adjusted net income, which excludes the goodwill impairment and other charges, was $17.6 million and diluted income per share was $0.19 compared to second quarter of 2024 adjusted net

loss of $(2.3) million and diluted loss per share of $(0.03). Second quarter adjusted EBITDA was $54.9 million, compared to second quarter of 2024 adjusted EBITDA of $55.2 million.

Backlog as of June 30, 2025 was $7,547 million, and the book-to-bill ratio for the quarter was 0.79x.

First Half 2025 Financial Results

Revenue for the first half was $1,361.6 million, compared to $1,324.5 million in the first half of 2024.

First half GAAP net loss was $(937.8) million and diluted loss per share was $(10.37), inclusive of a non-cash goodwill impairment charge of $797.9 million which impacted diluted loss per share by $(8.83), compared to first half of 2024 GAAP net loss of $(179.1) million and diluted loss per share of $(2.01). First half adjusted net income, which excludes the goodwill impairment and other charges, was $19.5 million and diluted income per share was $0.21 compared to first half of 2024 adjusted net loss of $(7.2) million and diluted loss per share of $(0.08). First half adjusted EBITDA was $85.2 million, compared to first half of 2024 adjusted EBITDA of $82.3 million.

The goodwill impairments primarily resulted from declines in the Company's share price. The second quarter was also impacted by a market-driven increase to the discount rate.

Full-Year 2025 Guidance

The Company is increasing its revenue guidance for the full year 2025, to a range of $2,600 million to $2,700 million and affirming adjusted EBITDA guidance in the range of $170 million to $200 million. The guidance assumes foreign currency exchange rates as of December 31, 2024, remain in effect for the forecast period.

Earnings Call and Replay

Fortrea will host a conference call at 8:00 am ET on August 6, 2025 to review its second quarter financial results and conduct a question and answer session. To participate in the earnings call, participants should register online at the Fortrea Investor Relations website. To avoid potential delays, please join at least 10 minutes prior to the start of the call. The conference call can also be accessed through the following earnings webcast link. A replay of the live conference call will be available shortly after the conclusion of the event and accessible on the events and presentations section of the Fortrea website. A supplemental slide presentation will also be available on the Investor Relations website prior to the start of the call.

About Fortrea

Fortrea (Nasdaq: FTRE) is a leading global provider of clinical development solutions to the life sciences industry. We partner with emerging and large biopharmaceutical, biotechnology, medical device and diagnostic companies to drive healthcare innovation that accelerates life changing therapies to patients. Fortrea provides phase I-IV clinical trial management, clinical pharmacology and consulting services. Fortrea's solutions leverage three decades of experience spanning more than 20 therapeutic areas, a passion for scientific rigor, exceptional insights and a strong investigator site network. Our talented and diverse team working in about 100 countries is scaled to deliver focused and agile solutions to customers globally. Learn more about how Fortrea is becoming a transformative force from pipeline to patient at Fortrea.com and follow us on LinkedIn and X (formerly Twitter).