Fortrea reported higher adjusted earnings and stronger cash generation in the third quarter, even as revenue edged lower from a year earlier. The contract research company also raised the midpoint of its full-year revenue and adjusted EBITDA outlook, while narrowing the guidance ranges.
A review of customer contracts led Fortrea to cut its reported backlog by $558 million. The company said the adjustment reflects updated estimates of the work required under contracts, including inactive trials, and does not affect past results, its current 2026 guidance or near-term revenue estimates.
Third-quarter results
- Revenue was $691.5 million, down from $701.3 million a year earlier, a decline of about 1.4%.
- GAAP net income was $0.6 million, or $0.01 per diluted share, compared with a net loss of $15.9 million, or $0.17 per share, in the third quarter of 2025.
- Adjusted net income rose to $27.9 million, or $0.28 per diluted share, from $11.7 million, or $0.12 per share, a year earlier.
- Adjusted EBITDA increased to $58.0 million from $50.7 million.
- Cash provided by operations was $60.8 million, and free cash flow was $52.5 million.
- Fortrea’s book-to-bill ratio was 1.12x for the quarter and for the trailing 12 months. The ratio was not affected by the backlog adjustment.
Backlog review and outlook
- After reducing backlog by $558 million, Fortrea reported backlog of $7.316 billion as of September 30. The company attributed the reduction to its updated estimates of contract scope and study-delivery requirements.
- Fortrea said the backlog change does not alter its historical financial results, current 2026 guidance or near-term revenue estimates.
- The company raised the midpoints and narrowed the ranges of its full-year revenue and adjusted EBITDA guidance. The results provided here do not include the revised guidance figures.
Year-to-date performance
- Revenue for the first nine months of 2026 was $2.006 billion, compared with $2.063 billion in the same period of 2025.
- Fortrea recorded a year-to-date GAAP net loss of $36.2 million, or $0.38 per diluted share, versus a $953.7 million loss, or $10.53 per share, a year earlier. The prior-year loss included a $797.9 million non-cash goodwill impairment charge.
- Year-to-date adjusted net income was $65.8 million.