Fortrea (FTRE) Q4 2025 Earnings Call Transcript

The Motley Fool

by newsfeedback@fool.com (Motley Fool Transcribing)

February 26, 2026

AI-Generated Deep Dive Summary

Fortrea (FTRE) reported its Q4 2025 earnings with a mix of positive and challenging results. While the company faced headwinds from lower pass-through costs and ongoing FSP (Full Service Provider) revenue declines, it demonstrated strong operational efficiency and cost management. Revenue for the quarter came in at $660.5 million, a 5.2% year-over-year decrease, but full-year revenue reached $2.723.4 billion, up 1% from the prior year, driven by growth in Clinical Pharmacology. Adjusted EBITDA fell slightly to $54 million for the quarter but remained near guidance at $189.9 million for the year. Despite these challenges, Fortrea highlighted significant cost savings achievements, including $153 million in gross and $93 million in net savings, exceeding original targets. The company’s SG&A expenses saw a 30.5% year-over-year decline, reflecting its ongoing cost optimization efforts. This was supported by improved cash flow metrics, with operating cash flow at $129.1 million for the quarter and free cash flow at $121.6 million. Fortrea also made progress on its balance sheet, repaying $75.7 million in senior notes during the quarter, bringing total debt reduction since spin-off to 35%. With over $600 million in liquidity at quarter end, the company maintained strong financial health. Looking ahead, Fortrea provided guidance for 2026, targeting revenue between $2.55 billion and $2.65 billion and adjusted EBITDA between $190 million and $220 million. The company plans further cost reductions of up to $80 million gross and $50 million net. Strategic initiatives like AI adoption and enhanced project management capabilities were noted as key drivers for future growth, particularly among biotech clients. Despite challenges such as persistent FSP headwinds and macroeconomic uncertainties, Fortrea’s improved demand pipeline and stable backlog ($7.7 billion) suggest a path toward

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Originally published on The Motley Fool on 2/26/2026