Fortrea (FTRE) Q4 2025 earnings summary

Executive summary

• Full-year 2025 revenue reached $2,723.4M and adjusted EBITDA was $189.9M, both in line with guidance, despite a challenging environment.

• Achieved positive operating and free cash flow for both Q4 and the full year, with operating cash flow at $113.5M and free cash flow at $88.3M.

• Exceeded gross and net cost savings targets, with over $153M gross and $93M net savings.

• Strengthened balance sheet through disciplined debt paydown and expanded leadership team.

• Market signals show stabilization and early recovery, especially in biotech funding and client engagement.

Financial highlights

• Q4 revenue was $660.5M, down 5.2% year-over-year; full-year revenue was $2,723.4M, up 1% year-over-year.

• Adjusted EBITDA for Q4 was $54M (vs. $56M prior year); full-year adjusted EBITDA was $189.9M (vs. $202.5M prior year).

• Q4 net loss was $32.5M (vs. $73.9M prior year); full-year GAAP net loss widened to $986.2M due to a $797.9M non-cash goodwill impairment.

• Adjusted net income for the year was $40.4M, or $0.43 per diluted share, up 34% year-over-year.

• Year-end backlog was $7.728B, with a Q4 book-to-bill ratio of 1.14x and trailing 12-month ratio of 1.02x.

Outlook and guidance

• 2026 revenue guidance: $2.55B–$2.65B; adjusted EBITDA: $190M–$220M.

• Anticipates Q1 2026 to be seasonally lower, with gradual margin improvement through the year.

• Targets $70M–$80M gross and $40M–$50M net incremental cost reductions in 2026.

• Expects positive full-year operating cash flow in 2026, with Q1 negative due to compensation payouts and DSO timing.

• Guidance assumes year-end 2025 foreign exchange rates remain constant.