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• Revenue: $697 million for Q4 2024, a decline of 1.8% year over year.

• Full Year Revenue 2024: $2,696.4 million, a decrease of 5.1% compared to 2023.

• Adjusted EBITDA: $56 million for Q4 2024; $202.5 million for full year 2024.

• Adjusted EBITDA Margin: 7.5% for full year 2024, down from 8.6% in 2023.

• Net Loss: $73.9 million for Q4 2024; $271.5 million for full year 2024.

• Adjusted Net Income: $16.6 million for Q4 2024; $30.1 million for full year 2024.

• Book-to-Bill Ratio: 1.35 times for Q4 2024; 1.16 times for the trailing 12 months.

• Backlog: $7.7 billion, a growth of 4.2% over the past 12 months.

• Cash Flow from Operating Activities: $262.8 million for the 12 months ended December 31, 2024.

• Free Cash Flow: $237.3 million for 2024.

• Days Sales Outstanding: 40 days as of December 31, 2024.

• 2025 Revenue Guidance: $2.45 billion to $2.55 billion.

• 2025 Adjusted EBITDA Guidance: $170 million to $200 million.

• SG&A Increase: 16.9% year over year for Q4 2024.

• Net Interest Expense: $21.9 million for Q4 2024, a decrease of $12.6 million year over year.

• Warning! GuruFocus has detected 2 Warning Sign with FTRE.

Release Date: March 03, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Fortrea Holdings Inc (NASDAQ:FTRE) achieved a strong book-to-bill ratio of 1.35 in the fourth quarter, indicating robust demand and successful sales efforts.

• The company's backlog has grown to $7.7 billion, reflecting a solid pipeline of future work.

• Fortrea's phase one clinical pharmacology services business experienced its most successful quarter ever, driven by significant repeat awards and investments in clinic capacity.

• The company successfully exited most of its Transition Service Agreement with its former parent, reducing associated costs and improving operational independence.

• Fortrea has implemented a comprehensive customer relationship feedback program, resulting in significantly improved net promoter scores, indicating enhanced customer satisfaction.

Negative Points

• Fortrea's revenue and adjusted EBITDA projections for 2025 are below prior expectations due to the impact of pre-spin projects with lower revenue and profitability.

• The company's fourth-quarter revenues declined by 1.8% year-over-year, primarily due to lower late-stage clinical service fee revenue.

• SG&A expenses increased by 16.9% year-over-year, driven by professional fees and one-time costs related to exiting TSA services.

• The adjusted EBITDA margin for full year 2024 decreased to 7.5% from 8.6% in 2023, impacted by lower late-stage clinical service fee revenues and higher SG&A costs.

• Fortrea's net loss for full year 2024 was $271.5 million, a significant increase from the net loss of $31.7 million in 2023, highlighting financial challenges.