Fortrea reported higher adjusted earnings and EBITDA in the third quarter despite a modest year-over-year decline in revenue, and raised the midpoint of its full-year revenue and adjusted EBITDA outlook. The contract research company also cut $558 million from its reported backlog after reviewing the scope and delivery requirements of customer contracts, including inactive trials.
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 year-ago quarter.
- Adjusted net income rose to $27.9 million, or $0.28 per diluted share, from $11.7 million, or $0.12 per share.
- Adjusted EBITDA increased to $58.0 million from $50.7 million, up about 14%.
- 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. A ratio above 1 means bookings exceeded revenue over the relevant period.
Backlog review and outlook
- Fortrea reduced backlog by $558 million following a detailed review of contracted work. The company said the adjustment reflects estimated study scope and delivery requirements, including work on inactive trials.
- Backlog after the adjustment was $7.316 billion as of Sept. 30. Fortrea said the revision did not affect its book-to-bill ratio, historical results, current 2026 guidance or near-term revenue estimates.
- The company raised the midpoints of its full-year revenue and adjusted EBITDA guidance and narrowed both ranges. The release information provided did not include the revised dollar ranges.
- CEO Anshul Thakral pointed to stronger bookings, operational improvements and investments in early clinical development and technology as parts of Fortrea’s growth strategy.
Year-to-date results
- Revenue for the first nine months of 2026 was $2.006 billion, compared with $2.063 billion in the same period of 2025, a decline of about 2.7%.
- 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, making the year-over-year comparison less representative of changes in underlying operations.
The backlog reduction is a recalibration of previously reported contracted work, not a change to Fortrea’s stated near-term revenue estimates or 2026 guidance. The company’s quarterly results showed improved adjusted profitability and cash generation even as revenue remained below the year-ago level.