Fortrea (FTRE) Q1 2026 earnings summary

Executive summary

• Achieved Q1 2026 revenue of $636.5 million, with adjusted EBITDA of $47.0 million and adjusted net income of $15.2 million, reflecting margin expansion and operational discipline.

• Book-to-bill ratio was 1.15x for Q1 and 1.05x trailing twelve months, marking three consecutive quarters above 1.1x and indicating stable demand.

• Net loss narrowed to $23.6 million from $562.9 million in the prior year, which included a large goodwill impairment.

• Launched Fortrea Intelligent Technology (FIT), an AI-powered platform to enhance trial execution and operational efficiency.

• CRO demand is stabilizing, with biotech funding and clinical trial starts rebounding.

Financial highlights

• Revenue declined 2.3% year-over-year to $636.5 million, mainly due to lower pass-through costs and FSP headwinds.

• Adjusted EBITDA rose to $47.0 million from $30.3 million, with margin improving by 270 bps to 7.4% year-over-year.

• Adjusted net income increased to $15.2 million from $1.9 million, with adjusted EPS at $0.16.

• Operating cash flow for Q1 was -$17 million, a marked improvement from -$124.2 million in the prior year.

• Backlog as of March 31, 2026, was $7.8 billion, up 1.6% year-over-year.

Outlook and guidance

• Full-year 2026 revenue guidance reaffirmed at $2.55–$2.65 billion, with adjusted EBITDA expected between $190–$220 million.

• Expects modest sequential revenue and adjusted EBITDA increases in Q2, with gradual margin improvement through the year.

• On track to achieve FY 2026 cost optimization targets of $70–80 million gross and $40–50 million net.

• Management expects existing cash, cash flows from operations, and available credit facilities to be sufficient for at least the next 12 months.