Fortrea Reports First Quarter 2025 Results
Fortrea (FTRE) reported its Q1 2025 financial results, showing revenues of $651.3 million, down from $662.1 million in Q1 2024. The company posted a significant GAAP net loss of $(562.9) million, largely due to a non-cash goodwill impairment charge of $488.8 million. Adjusted EBITDA improved to $30.3 million from $27.1 million year-over-year.
The company maintained a positive book-to-bill ratio of 1.02x for the quarter and 1.14x for trailing 12 months, with a backlog of $7,721 million. Fortrea reaffirmed its 2025 guidance, projecting revenues of $2,450-$2,550 million and adjusted EBITDA of $170-200 million. Additionally, the company announced a leadership change, with Lead Independent Director Peter M. Neupert replacing Thomas Pike as Interim CEO and Board Chair effective May 13, 2025.
Fortrea (FTRE) ha comunicato i risultati finanziari del primo trimestre 2025, con ricavi pari a 651,3 milioni di dollari, in calo rispetto ai 662,1 milioni di dollari del primo trimestre 2024. La società ha registrato una significativa perdita netta GAAP di (562,9) milioni di dollari, principalmente a causa di una svalutazione non monetaria dell'avviamento di 488,8 milioni di dollari. L'EBITDA rettificato è migliorato, passando da 27,1 milioni di dollari a 30,3 milioni di dollari su base annua.
La società ha mantenuto un rapporto book-to-bill positivo di 1,02x nel trimestre e di 1,14x negli ultimi 12 mesi, con un portafoglio ordini pari a 7.721 milioni di dollari. Fortrea ha confermato le previsioni per il 2025, prevedendo ricavi tra 2.450 e 2.550 milioni di dollari e un EBITDA rettificato tra 170 e 200 milioni di dollari. Inoltre, è stato annunciato un cambiamento nella leadership: il Lead Independent Director Peter M. Neupert sostituirà Thomas Pike come CEO ad interim e Presidente del Consiglio di Amministrazione a partire dal 13 maggio 2025.
Fortrea (FTRE) informó sus resultados financieros del primer trimestre de 2025, mostrando ingresos de 651,3 millones de dólares, una disminución respecto a los 662,1 millones de dólares del primer trimestre de 2024. La compañía registró una pérdida neta GAAP significativa de (562,9) millones de dólares, debido principalmente a un cargo no monetario por deterioro de fondo de comercio de 488,8 millones de dólares. El EBITDA ajustado mejoró a 30,3 millones de dólares desde 27,1 millones año con año.
La empresa mantuvo una relación book-to-bill positiva de 1,02x para el trimestre y 1,14x en los últimos 12 meses, con un backlog de 7.721 millones de dólares. Fortrea reafirmó sus previsiones para 2025, proyectando ingresos de 2.450 a 2.550 millones de dólares y un EBITDA ajustado de 170 a 200 millones de dólares. Además, anunció un cambio en la dirección, con Peter M. Neupert, Director Independiente Principal, reemplazando a Thomas Pike como CEO interino y presidente del consejo a partir del 13 de mayo de 2025.
Fortrea (FTRE)는 2025년 1분기 재무 실적을 발표했으며, 매출은 6억 5,130만 달러로 2024년 1분기의 6억 6,210만 달러에서 감소했습니다. 회사는 주로 4억 8,880만 달러의 무형자산 손상차손에 기인한 (5억 6,290만 달러)의 상당한 GAAP 순손실을 기록했습니다. 조정 EBITDA는 전년 동기 대비 3,030만 달러로 개선되었습니다.
회사는 분기 동안 1.02배, 최근 12개월 동안 1.14배의 긍정적인 book-to-bill 비율을 유지했으며, 수주 잔고는 77억 2,100만 달러입니다. Fortrea는 2025년 가이던스를 재확인했으며, 매출은 24억 5,000만~25억 5,000만 달러, 조정 EBITDA는 1억 7,000만~2억 달러로 전망하고 있습니다. 또한, 2025년 5월 13일부터 피터 M. 노이퍼트 독립 이사가 토마스 파이크를 대신해 임시 CEO 겸 이사회 의장으로 선임된다고 발표했습니다.
Fortrea (FTRE) a publié ses résultats financiers du premier trimestre 2025, affichant un chiffre d'affaires de 651,3 millions de dollars, en baisse par rapport à 662,1 millions de dollars au premier trimestre 2024. L'entreprise a enregistré une perte nette GAAP importante de (562,9) millions de dollars, principalement en raison d'une charge de dépréciation non monétaire de l'écart d'acquisition de 488,8 millions de dollars. L'EBITDA ajusté s'est amélioré à 30,3 millions de dollars contre 27,1 millions d'une année sur l'autre.
L'entreprise a maintenu un ratio book-to-bill positif de 1,02x pour le trimestre et de 1,14x sur les 12 derniers mois, avec un carnet de commandes de 7 721 millions de dollars. Fortrea a confirmé ses prévisions pour 2025, anticipant un chiffre d'affaires entre 2 450 et 2 550 millions de dollars et un EBITDA ajusté entre 170 et 200 millions de dollars. De plus, la société a annoncé un changement de direction, avec Peter M. Neupert, administrateur principal indépendant, remplaçant Thomas Pike en tant que PDG par intérim et président du conseil d'administration à compter du 13 mai 2025.
Fortrea (FTRE) veröffentlichte seine Finanzergebnisse für das erste Quartal 2025 und erzielte einen Umsatz von 651,3 Millionen US-Dollar, was einem Rückgang gegenüber 662,1 Millionen US-Dollar im ersten Quartal 2024 entspricht. Das Unternehmen verzeichnete einen erheblichen GAAP-Nettogewinn von (562,9) Millionen US-Dollar, hauptsächlich aufgrund einer nicht zahlungswirksamen Wertminderung des Firmenwerts in Höhe von 488,8 Millionen US-Dollar. Das bereinigte EBITDA verbesserte sich im Jahresvergleich auf 30,3 Millionen US-Dollar gegenüber 27,1 Millionen US-Dollar.
Das Unternehmen hielt im Quartal ein positives Book-to-Bill-Verhältnis von 1,02x und über die letzten 12 Monate von 1,14x, mit einem Auftragsbestand von 7.721 Millionen US-Dollar. Fortrea bestätigte seine Prognose für 2025 und erwartet Umsätze von 2.450 bis 2.550 Millionen US-Dollar sowie ein bereinigtes EBITDA von 170 bis 200 Millionen US-Dollar. Zusätzlich wurde ein Führungswechsel bekanntgegeben: Peter M. Neupert, Lead Independent Director, ersetzt Thomas Pike ab dem 13. Mai 2025 als Interims-CEO und Vorstandsvorsitzender.
- Adjusted EBITDA increased to $30.3 million from $27.1 million year-over-year
- Strong backlog of $7,721 million with positive book-to-bill ratio of 1.02x
- Company reaffirmed full-year 2025 guidance, showing confidence in future performance
- Revenue declined to $651.3 million from $662.1 million in Q1 2024
- Significant GAAP net loss of $562.9 million, including $488.8 million goodwill impairment charge
- Unexpected CEO departure and transition to interim leadership
Insights
Fortrea's Q1 shows mixed results with considerable challenges, including a major goodwill impairment and leadership transition amid flat performance metrics.
Fortrea's Q1 2025 results present a complex financial picture that requires careful analysis. The headline
On a positive note, adjusted EBITDA improved to
The abrupt leadership change announced simultaneously with these results adds another layer of uncertainty. CEO Tom Pike's immediate departure and replacement with Lead Independent Director Peter Neupert as interim CEO, despite mentioning an "advanced stage" search process, raises questions about corporate governance and strategic direction. The timing of this transition alongside disappointing results and a massive impairment charge suggests potential board dissatisfaction with performance.
Despite these challenges, management has maintained full-year 2025 guidance of
For the three months ended March 31, 2025, from continuing operations:
- Revenues of
$651.3 million - GAAP net loss of
$(562.9) million , inclusive of a non-cash goodwill impairment charge - Adjusted EBITDA of
$30.3 million - GAAP and adjusted net (loss) income per diluted share of
$(6.25) and$0.02 , respectively - Book-to-bill ratio of 1.02x, resulting in 1.14x book-to-bill for the trailing 12 months
DURHAM, N.C., May 12, 2025 (GLOBE NEWSWIRE) -- Fortrea (Nasdaq: FTRE) (the “Company”), a leading global contract research organization (CRO), today reported financial results for the first quarter ended March 31, 2025.
“Fortrea’s first quarter performance represents a solid start to 2025,” said Tom Pike, Chairman and CEO of Fortrea. “We are focused on the disciplined execution of our strategy, strengthening our business model to improve our efficiency, and better serving our customers.”
All commentary in this press release relates to continuing operations unless otherwise noted.
First Quarter 2025 Financial Results
Revenue for the first quarter was
First quarter GAAP net loss was
Backlog as of March 31, 2025 was
The Company reiterated its guidance for the full year 2025, targeting revenues in the range of
Other Developments
On May 12, 2025, the Company announced that Fortrea’s Lead Independent Director, Peter M. Neupert, will serve as Interim Chief Executive Officer and Board Chair as Thomas Pike is stepping down from his role beginning May 13, 2025. As part of a succession planning process, an executive search is already at an advanced stage. Mr. Pike has entered into a consulting agreement with the Company to serve as a resource to its leadership team through the transition.
Earnings Call and Replay
Fortrea will host a conference call at 9:00 am ET on May 12, 2025 to review its first 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).
Cautionary Statement Regarding Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, without limitation, the Company’s 2025 financial guidance. In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as “guidance,” “expect,” “assume,” “anticipate,” “intend,” “plan,” “forecast,” “believe,” “seek,” “see,” “will,” “would,” “target,” similar expressions, and variations or negatives of these words that are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Actual results may differ materially from the Company’s expectations due to a number of factors, including, but not limited to, the following: the duration and results of the search for a new chief executive officer; the Company’s ability to successfully implement the Company’s business strategies and execute the Company’s long-term value creation strategy; risks and expenses associated with the Company’s international operations, tariff policies, trade sanctions and other trade restrictions and currency fluctuations; the Company’s customer or therapeutic area concentrations; any further deterioration in the macroeconomic environment or further changes in government regulations and funding, which could lead to defaults or cancellations by the Company’s customers; the risk that the Company’s backlog and net new business may not be indicative of the Company’s future revenues and that the Company might not realize all of the anticipated future revenue reflected in the Company’s backlog; the Company’s ability to generate sufficient net new business awards, or if net new business awards are delayed, terminated, reduced in scope, or fail to go to contract; if the Company underprices its contracts, overruns its cost estimates, or fails to receive approval for, or experiences delays in documentation of change orders; and other factors described from time to time in documents that the Company files with the SEC. For a further discussion of the risks relating to the Company’s business, see the “Risk Factors” Section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the Securities and Exchange Commission (the "SEC"), as such factors may be amended or updated from time to time in the Company’s subsequent periodic and other filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in the Company’s filings with the SEC. Comparisons of results for current and any prior periods are not intended to express any future trends, or indications of future performance, unless expressed as such, and should only be viewed as historical data. All forward-looking statements are made only as of the date of this release and the Company does not undertake any obligation, other than as may be required by law, to update or revise any forward-looking statements to reflect future events or developments.
Note on Non-GAAP Financial Measures
This release includes information based on financial measures that are not recognized under generally accepted accounting principles in the United States ("GAAP"), such as Adjusted EBITDA, Adjusted Net Income, Adjusted Basic and Diluted EPS, and Free Cash Flow. Non-GAAP financial measures are presented only as a supplement to the Company’s financial statements based on GAAP. Non-GAAP financial information is provided to enhance understanding of the Company’s financial performance, but none of these non-GAAP financial measures are recognized terms under GAAP, and non-GAAP measures should not be considered in isolation from, or as a substitute analysis for, the Company’s results of operations as determined in accordance with GAAP.
The Company uses non-GAAP measures in its operational and financial decision making and believes that it is useful to exclude certain items in order to focus on what it regards to be a more meaningful indicator of the underlying operating performance of the business. For example, in calculating Adjusted EBITDA, the Company excludes all the amortization of intangible assets associated with acquired customer relationships and backlog, databases, non-compete agreements and trademarks, trade names and other from non-GAAP expense and income measures as such amounts can be significantly impacted by the timing and size of acquisitions. Although the Company excludes amortization of acquired intangible assets from the Company’s non-GAAP expenses, the Company believes that it is important for investors to understand that revenue generated from such intangibles is included within revenue in determining net income attributable to the Company. As a result, internal management reports feature non-GAAP measures which are also used to prepare strategic plans and annual budgets and review management compensation. The Company also believes that investors may find non-GAAP financial measures useful for the same reasons, although investors are cautioned that non-GAAP financial measures are not a substitute for GAAP disclosures.
The non-GAAP financial measures are not presented in accordance with GAAP. Please refer to the schedules attached to this release for relevant definitions and reconciliations of non-GAAP financial measures contained herein to the most directly comparable GAAP measures. The Company’s full-year 2025 guidance measures (other than revenue) are provided on a non-GAAP basis without a reconciliation to the most directly comparable GAAP measure because the Company is unable to predict with a reasonable degree of certainty certain items contained in the GAAP measures without unreasonable efforts. Such items include, but are not limited to, acquisition-related expenses, restructuring and related expenses, stock-based compensation and other items not reflective of the Company's ongoing operations.
Non-GAAP measures are frequently used by securities analysts, investors and other interested parties in their evaluation of companies comparable to the Company, many of which present non-GAAP measures when reporting their results. Non-GAAP measures have limitations as an analytical tool. They are not presentations made in accordance with GAAP, are not measures of financial condition or liquidity and should not be considered as an alternative to profit or loss for the period determined in accordance with GAAP or operating cash flows determined in accordance with GAAP. Non-GAAP measures are not necessarily comparable to similarly titled measures used by other companies. As a result, you should not consider such performance measures in isolation from, or as a substitute analysis for, the Company’s results of operations as determined in accordance with GAAP.
Fortrea Contacts
Hima Inguva (Investors) – 877-495-0816, hima.inguva@fortrea.com
Sue Zaranek (Media) – 919-943-5422, media@fortrea.com
Kate Dillon (Media) – 646-818-9115, kdillon@prosek.com
| FORTREA HOLDINGS INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share data) (unaudited) | |||||||
| Three Months Ended March 31, | |||||||
| 2025 | 2024 | ||||||
| Revenues | $ | 651.3 | $ | 662.1 | |||
| Costs and expenses: | |||||||
| Direct costs, exclusive of depreciation and amortization | 534.8 | 554.2 | |||||
| Selling, general and administrative expenses, exclusive of depreciation and amortization | 121.8 | 120.1 | |||||
| Depreciation and amortization | 19.5 | 21.9 | |||||
| Goodwill and other asset impairments | 488.8 | — | |||||
| Restructuring and other charges | 6.5 | 3.3 | |||||
| Total costs and expenses | 1,171.4 | 699.5 | |||||
| Operating loss | (520.1 | ) | (37.4 | ) | |||
| Other income (expense): | |||||||
| Interest expense | (22.3 | ) | (34.3 | ) | |||
| Foreign exchange loss | (5.6 | ) | (5.3 | ) | |||
| Other, net | — | 1.3 | |||||
| Loss from continuing operations before income taxes | (548.0 | ) | (75.7 | ) | |||
| Income tax expense | 14.9 | 4.1 | |||||
| Loss from continuing operations | (562.9 | ) | (79.8 | ) | |||
| Loss from discontinued operations, net of tax | — | (21.2 | ) | ||||
| Net loss | $ | (562.9 | ) | $ | (101.0 | ) | |
| Loss per common share | |||||||
| Basic and diluted loss per share from continuing operations | $ | (6.25 | ) | $ | (0.89 | ) | |
| Basic and diluted loss per share from discontinued operations | — | (0.24 | ) | ||||
| Basic and diluted loss per share | $ | (6.25 | ) | $ | (1.13 | ) | |
| FORTREA HOLDINGS INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in millions) (unaudited) | |||||||
| March 31, 2025 | December 31, 2024 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 101.6 | $ | 118.5 | |||
| Accounts receivable and unbilled services, net | 729.0 | 659.5 | |||||
| Prepaid expenses and other | 139.7 | 170.2 | |||||
| Total current assets | 970.3 | 948.2 | |||||
| Property, plant and equipment, net | 150.2 | 156.3 | |||||
| Goodwill, net | 1,242.5 | 1,710.4 | |||||
| Intangible assets, net | 651.3 | 655.7 | |||||
| Deferred income taxes | 5.4 | 5.2 | |||||
| Other assets, net | 101.4 | 103.4 | |||||
| Total assets | $ | 3,121.1 | $ | 3,579.2 | |||
| LIABILITIES AND EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 110.2 | $ | 138.2 | |||
| Accrued expenses and other current liabilities | 347.2 | 369.8 | |||||
| Unearned revenue | 364.4 | 353.3 | |||||
| Current portion of long-term debt | 163.8 | 74.8 | |||||
| Short-term operating lease liabilities | 13.5 | 13.4 | |||||
| Total current liabilities | 999.1 | 949.5 | |||||
| Long-term debt, less current portion | 1,049.9 | 1,049.7 | |||||
| Operating lease liabilities | 59.1 | 60.6 | |||||
| Deferred income taxes and other tax liabilities | 117.9 | 121.7 | |||||
| Other liabilities | 36.3 | 35.3 | |||||
| Total liabilities | 2,262.3 | 2,216.8 | |||||
| Commitments and contingent liabilities | |||||||
| Equity: | |||||||
| Common stock, 90.5 and 89.7 shares outstanding at March 31, 2025 and December 31, 2024, respectively | 0.1 | 0.1 | |||||
| Additional paid-in capital | 2,056.8 | 2,042.2 | |||||
| Accumulated deficit | (959.9 | ) | (397.0 | ) | |||
| Accumulated other comprehensive loss | (238.2 | ) | (282.9 | ) | |||
| Total equity | 858.8 | 1,362.4 | |||||
| Total liabilities and equity | $ | 3,121.1 | $ | 3,579.2 | |||
| FORTREA HOLDINGS INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) (unaudited) | |||||||
| Three Months Ended March 31, | |||||||
| 2025 | 2024 | ||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
| Net loss | $ | (562.9 | ) | $ | (101.0 | ) | |
| Adjustments to reconcile net loss to net cash used for operating activities: | |||||||
| Depreciation and amortization | 19.5 | 23.5 | |||||
| Stock compensation | 14.6 | 15.1 | |||||
| Credit loss expense | 4.5 | 5.8 | |||||
| Operating lease right-of-use asset expense | 3.0 | 6.2 | |||||
| Operating lease right-of-use asset impairment | 3.2 | — | |||||
| Goodwill and other asset impairments | 488.8 | 24.0 | |||||
| Deferred income taxes | (6.6 | ) | 4.2 | ||||
| Other, net | 0.3 | (12.1 | ) | ||||
| Changes in assets and liabilities: | |||||||
| (Increase) decrease in accounts receivable and unbilled services, net | (70.5 | ) | 34.7 | ||||
| Decrease (increase) in prepaid expenses and other | 17.6 | (25.5 | ) | ||||
| Decrease in accounts payable | (28.4 | ) | (0.9 | ) | |||
| Increase in deferred revenue | 10.4 | 26.4 | |||||
| Decrease in accrued expenses and other | (17.7 | ) | (26.0 | ) | |||
| Net cash used for operating activities | (124.2 | ) | (25.6 | ) | |||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
| Capital expenditures | (2.9 | ) | (9.3 | ) | |||
| Proceeds from sale of business, net | 19.0 | — | |||||
| Proceeds from sale of assets | — | 0.1 | |||||
| Net cash provided by (used for) investing activities | 16.1 | (9.2 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
| Proceeds from revolving credit facilities | 166.5 | 271.0 | |||||
| Payments on revolving credit facilities | (77.5 | ) | (242.0 | ) | |||
| Debt issuance costs | (0.6 | ) | — | ||||
| Principal payments of long-term debt | — | (7.7 | ) | ||||
| Net cash provided by financing activities | 88.4 | 21.3 | |||||
| Effect of exchange rate changes on cash and cash equivalents | 2.8 | (2.3 | ) | ||||
| Net change in cash and cash equivalents | (16.9 | ) | (15.8 | ) | |||
| Cash and cash equivalents at beginning of period | 118.5 | 108.6 | |||||
| Cash and cash equivalents at end of period | $ | 101.6 | $ | 92.8 | |||
The cash flows related to discontinued operations have not been segregated and are included in the condensed consolidated statements of cash flows.
| RECONCILIATION OF NON-GAAP MEASURES | |||||||||||
| FORTREA HOLDINGS INC. NET INCOME TO ADJUSTED EBITDA RECONCILIATION (in millions) (unaudited) | |||||||||||
| Trailing Twelve Months Ended March 31, 2025 | Three Months Ended March 31, | ||||||||||
| 2025 | 2024 | ||||||||||
| Adjusted EBITDA from continuing operations: | |||||||||||
| Net loss from continuing operations | $ | (754.6 | ) | $ | (562.9 | ) | $ | (79.8 | ) | ||
| Income tax expense | 7.3 | 14.9 | 4.1 | ||||||||
| Interest expense, net | 111.8 | 22.3 | 34.3 | ||||||||
| Foreign exchange loss | 10.9 | 5.6 | 5.3 | ||||||||
| Depreciation and amortization (a) | 82.9 | 19.5 | 21.9 | ||||||||
| Goodwill and other asset impairments | 488.8 | 488.8 | — | ||||||||
| Restructuring and other charges (b) | 54.6 | 6.8 | 3.4 | ||||||||
| Stock based compensation | 58.3 | 14.6 | 13.5 | ||||||||
| Disposition-related costs (c) | 17.2 | 3.8 | — | ||||||||
| One-time spin-related costs (d) | 123.0 | 10.0 | 17.0 | ||||||||
| Customer matter (e) | 2.1 | — | 3.9 | ||||||||
| Enabling Services Segment costs (f) | 2.5 | — | 4.8 | ||||||||
| Other (g) | 0.9 | 6.9 | (1.3 | ) | |||||||
| Adjusted EBITDA from continuing operations | $ | 205.7 | $ | 30.3 | $ | 27.1 | |||||
(a) Includes amortization of intangible assets acquired as part of business acquisitions.
(b) Restructuring and other charges represent amounts incurred in connection with the elimination of redundant positions to reduce overcapacity, align resources and facilities, and restructure certain operations.
(c) Disposition-related costs are short-term incremental costs to support the transition services agreement associated with the sale of the Enabling Services Segment.
(d) Represents one-time or incremental costs required to implement capabilities to exit the Transition Services Agreement with former parent.
(e) As part of working with a customer, the Company agreed to make concessions and provide discounts and other consideration to the customer as part of a multi-party solution. There were no related adjustments in the first quarter of 2025 as the agreed upon amounts had been satisfied.
(f) These adjustments remove the impact of certain Enabling Services costs not included in discontinued operations. The Enabling Services Segment was sold in the second quarter of 2024.
(g) Includes adjustments to estimated contingent consideration on a sale of a facility, income related to services provided under Transition Services Agreements, settlements related to litigation initiated prior to the Spin, the yield expense incurred on amounts received under the Company’s Receivables Securitization Program, and amortization of implementation costs deferred in connection with cloud computing arrangements.
| FORTREA HOLDINGS INC. NET INCOME TO ADJUSTED NET INCOME RECONCILIATION (in millions) (unaudited) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Adjusted net income (loss) from continuing operations: | ||||||||
| Net loss from continuing operations | $ | (562.9 | ) | $ | (79.8 | ) | ||
| Foreign exchange loss | 5.6 | 5.3 | ||||||
| Amortization (a) | 14.5 | 15.3 | ||||||
| Restructuring and other charges (b) | 6.8 | 3.4 | ||||||
| Stock based compensation | 14.6 | 13.5 | ||||||
| Disposition-related costs (c) | 3.8 | — | ||||||
| One-time spin-related costs (d) | 10.0 | 17.0 | ||||||
| Customer matter (e) | — | 3.9 | ||||||
| Enabling Services Segment costs (f) | — | 4.8 | ||||||
| Goodwill and other asset impairments | 488.8 | — | ||||||
| Other (g) | 6.9 | (1.3 | ) | |||||
| Income tax impact of adjustments (h) | 13.8 | 13.0 | ||||||
| Adjusted net income (loss) from continuing operations | $ | 1.9 | $ | (4.9 | ) | |||
| Basic shares | 90.1 | 89.2 | ||||||
| Diluted shares | 91.2 | 89.2 | ||||||
| Adjusted basic EPS from continuing operations | $ | 0.02 | $ | (0.05 | ) | |||
| Adjusted diluted EPS from continuing operations | $ | 0.02 | $ | (0.05 | ) | |||
(a) Includes amortization of intangible assets acquired as part of business acquisitions.
(b) Restructuring and other charges represent amounts incurred in connection with the elimination of redundant positions to reduce overcapacity, align resources and facilities, and restructure certain operations.
(c) Disposition-related costs are short-term incremental costs to support the transition services agreement associated with the sale of the Enabling Services Segment.
(d) Represents one-time or incremental costs required to implement capabilities to exit the Transition Services Agreement with former parent.
(e) As part of working with a customer, the Company agreed to make concessions and provide discounts and other consideration to the customer as part of a multi-party solution. There were no related adjustments in the first quarter of 2025 as the agreed upon amounts had been satisfied.
(f) These adjustments remove the impact of certain Enabling Services costs not included in discontinued operations. The Enabling Services Segment was sold in the second quarter of 2024.
(g) Includes adjustments to estimated contingent consideration on a sale of a facility, income related to services provided under Transition Services Agreements, settlements related to litigation initiated prior to the Spin, the yield expense incurred on amounts received under the Company’s Receivables Securitization Program, and amortization of implementation costs deferred in connection with cloud computing arrangements.
(h) Income tax impact of adjustments calculated based on the tax rate applicable to each item.
| FORTREA HOLDINGS INC. | ||||
| NET CASH USED FOR OPERATING ACTIVITIES TO FREE CASH FLOW RECONCILIATION (in millions) (unaudited) | ||||
| Three Months Ended March 31, 2025 | ||||
| Net cash used for operating activities | $ | (124.2 | ) | |
| Capital expenditures | (2.9 | ) | ||
| Free cash flow | $ | (127.1 | ) | |
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