Fortrea reported third-quarter revenue of $691.5 million, down from a year earlier, while adjusted earnings and operating cash flow improved. The contract research company also reported continued booking momentum, raised the midpoints of its full-year revenue and adjusted EBITDA guidance, and made a large adjustment to reported backlog after reviewing its contracts.
The backlog reduction reflects a reassessment of estimated work and delivery requirements—including for inactive trials—not a change to historical results or the company’s current 2026 guidance, Fortrea said.
Key details
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Revenue was $691.5 million, compared with $701.3 million in the third quarter of 2025, a decline of about 1.4%.
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Profitability improved. GAAP net income was $0.6 million, or $0.01 per diluted share, versus a net loss of $15.9 million, or $0.17 per share, a year earlier. Adjusted net income rose to $27.9 million from $11.7 million, while adjusted diluted earnings per share increased to $0.28 from $0.12.
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Adjusted EBITDA was $58.0 million, up from $50.7 million in the year-earlier quarter.
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Cash generation was positive: Fortrea reported $60.8 million of cash from operations and $52.5 million of free cash flow.
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Bookings exceeded revenue. The quarterly book-to-bill ratio was 1.12, and the trailing 12-month ratio was also 1.12. The quarterly figure was not affected by the backlog adjustment.
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Reported backlog was reduced by $558 million after a detailed review of customer contracts. Backlog stood at $7.316 billion at September 30. The review adjusted estimates of contract scope and study delivery requirements, including for inactive trials. Fortrea said the change does not affect historical financial results, its previously issued or current 2026 guidance, or near-term revenue estimates.
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Fortrea 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.
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Year-to-date revenue was $2.006 billion, compared with $2.063 billion in the same period of 2025. Fortrea reported a year-to-date GAAP net loss of $36.2 million, versus a $953.7 million loss a year earlier; that prior-period loss included a non-cash goodwill impairment charge of $797.9 million.
What changes for investors
The quarter showed better adjusted profitability and cash generation despite lower revenue than a year earlier. The backlog reset changes the reported size of Fortrea’s contracted work, but the company said it does not alter its near-term revenue outlook or 2026 guidance. The raised guidance midpoints signal improved expectations for the full year, though the specific revised targets are not included in the results information provided.