Fortrea Holdings Inc. (FTRE1) Q3 2026 Earnings Report
MX:FTRE1 Q3 2026 EPS Results
- Actual EPS
- MXN 5.26
- Consensus EPS
- MXN 4.08
- Beat/Miss
- Beat by +MXN 1.18
- One Year Ago EPS
- MXN 2.25
MX:FTRE1 Q3 2026 Revenue Results
- Actual Revenue
- MXN 12.99B
- Expected Revenue
- MXN 12.62B
- Beat/Miss
- Beat by +MXN 374.38M
- YoY Revenue Growth
- -1.40%
Earnings Announcement Details
- Quarter
- Q3 2026
- Date
- 10/29/2026
- Time
- Before Open
- Conference Call
- Thursday, October 29, 2026
MX:FTRE1 Upcoming Earnings
Fortrea Holdings Inc.'s next earnings date is estimated for March 15, 2027, based on past reporting schedules.
Q3 2026 Earnings Call Audio
MX:FTRE1 Q3 2026 Earnings Call
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Q3 2026 Earnings Slide Deck
Q3 2026 Earnings Call Summary
Earnings Call Sentiment|Positive
The call was broadly optimistic. Fortrea reported stronger bookings, improved profitability, positive cash flow, better working capital, raised full-year guidance and expanding demand across biotech, biopharma and China. The main concerns were the year-over-year revenue decline, the $558 million backlog adjustment, slightly elevated cancellations, a projected fourth-quarter revenue slowdown, ongoing compensation investments and still-elevated leverage. Management characterized the business as being in recovery and focused on converting improving demand into sustainable growth and margin expansion.
Company Guidance
Fortrea now expects full year 2026 revenue of $2.665 billion to $2.690 billion and adjusted EBITDA of $210 million to $218 million, after raising the midpoint and narrowing both ranges; it continues to expect positive free cash flow in the fourth quarter and for the full year, with low single-digit service fee revenue growth expected to begin to produce incremental drop-through, operating leverage becoming even more apparent as growth moves towards the mid-single digits, and a continued objective of reaching mid-teens adjusted EBITDA margins. The company is not giving any guide on 2027 at this particular juncture.
- Positive Third-Quarter Bookings and Book-to-BillNet new business awards were $773 million, producing a third-quarter book-to-bill ratio of 1.12x versus 1.06x in the second quarter of 2026 and 1.13x in the third quarter of 2025. The trailing 12-month book-to-bill ratio was also 1.12x.
- Adjusted EBITDA Growth and Margin ExpansionAdjusted EBITDA was $58.0 million, up 14.4% year-over-year from $50.7 million, although down 1.2% sequentially from $58.7 million. Adjusted EBITDA margin increased to 8.4% from 7.2% a year earlier, a 120-basis-point improvement. Portfolio mix, cost management and efficiency initiatives contributed more than 300 basis points of impact, partially offset by compensation investments.
- Raised and Narrowed Full-Year GuidanceThe company raised the midpoint and narrowed the ranges of its full-year 2026 guidance. Revenue is now expected to be $2.665 billion to $2.690 billion, and adjusted EBITDA is expected to be $210 million to $218 million.
- Early Phase Services Acquisition Expands CapabilitiesFortrea completed its acquisition of the Early Phase Services business from Worldwide Clinical Trials. The transaction increased total beds across the U.S. and U.K. to more than 570, added dedicated bioanalytical and safety laboratory capabilities, and created a 300-bed Texas network through the San Antonio and Dallas facilities.
- Initial Commercial Traction from the AcquisitionThe company said commercial conversion for the acquired Early Phase Services business has begun, and Fortrea received its first award for bioanalytical laboratory services from an existing Fortrea client after closing the transaction.
- Improving Demand Across Biotech and BiopharmaFortrea reported almost double-digit growth in biotech bookings during 2026 and said biopharma RFP activity is increasing. The company has also been invited into new biopharma refreshes, RFP models and outsourcing processes, including one process it has already won that is expected to begin converting into awards in 2028.
- Broader Commercial Pipeline and Customer ReachThe value of the commercial pipeline increased both sequentially and year-over-year. Management said the company is competing across a broader customer set and is seeing opportunities across large pharma, biotech, China-based innovators and new-to-Fortrea clients.
- China Business Provides a Positive TailwindFortrea said its China pipeline, RFP activity and bookings were positive during 2026. Demand came from multinational companies conducting clinical trials in China and Chinese biotech companies seeking to run trials for innovative medicines in the U.S. and Europe.
- Technology and AI Adoption at ScaleFortrea Intelligent Technology combines its data foundation and Xcellerate platform with analytics, machine learning, risk intelligence and AI. The CRA mobile app is deployed across more than 49 countries, and more than 95% of colleagues have integrated AI into their weekly routines through the Felix program.
- Operational Efficiency Initiatives Are Improving DeliveryManagement reported progress in project management, site activation, enrollment, quality and predictability. The company said the CRA mobile app is producing greater monitoring efficiency, and that technology-enabled process improvements are beginning to support productivity and consistency.
- Improved Net Income and Adjusted EarningsThird-quarter net income was $0.6 million versus a net loss of $15.9 million in the prior-year quarter and a net loss of $13.2 million in the second quarter of 2026. Adjusted net income increased to $27.9 million from $11.7 million a year earlier and $22.7 million sequentially. Adjusted diluted EPS rose to $0.28 from $0.12 in the prior-year quarter and $0.23 in the second quarter.
- Cash Flow Turned Positive and ImprovedThird-quarter operating cash flow was $60.8 million and free cash flow was $52.5 million, compared with $28.9 million and $19.9 million, respectively, in the second quarter. For the first nine months of 2026, operating cash flow was positive $72.7 million versus negative $15.6 million a year earlier, while free cash flow was positive $47.4 million versus negative $33.3 million.
- Working Capital and Liquidity ImprovementNet DSO improved to 15 days from 33 days a year earlier and 20 days in the second quarter, reflecting continued execution in the order-to-cash process. Fortrea had no borrowings outstanding on its revolver and reported approximately $668 million of available liquidity at quarter-end.
- Deleveraging ProgressGross debt was $1.066 billion and net debt was $845.7 million at quarter-end. Net leverage was 3.9x, an improvement of 1.4 turns over the last 12 months due to EBITDA growth, debt paydown and cash accumulation.
- Reduced Customer ConcentrationThe top 10 customers represented 53.5% of quarterly revenue, down from 60.0% in the third quarter of 2025 and 55.4% in the second quarter of 2026. The largest customer represented 17.6% of revenue versus 19.8% a year earlier.
- Lower Operating Costs and Interest Expense Year-over-YearGAAP direct costs decreased 4.6% year-over-year and SG&A decreased 2.8%, driven by operating expense management, the nonrecurrence of certain credit loss provisions and lower one-time spin-related costs. Interest expense declined to $20.2 million from $22.6 million in the prior-year quarter due to debt paydowns.
- Long-Term Margin Expansion Strategy Remains on TrackManagement said its objective remains reaching mid-teens adjusted EBITDA margins. The stated drivers are revenue growth, favorable business mix, improved utilization, technology-fueled efficiencies and operating leverage as service fee revenue grows.
MX:FTRE1 Earnings History
| Report Date | Fiscal Quarter | Forecast / EPS | Last Year's EPS | EPS YoY Change | Press Release |
|---|---|---|---|---|---|
| Mar 15, 2027 | 2026 (Q4) | 3.85- | 1.69 | ― | ― |
| Oct 29, 2026 | 2026 (Q3) | 4.085.26 | 2.25 | 133.33% (+3.01) | |
| Jul 29, 2026 | 2026 (Q2) | 3.384.32 | 3.57 | 21.05% (+0.75) | |
| May 05, 2026 | 2026 (Q1) | 1.153.01 | 0.38 | 700.00% (+2.63) | |
| Feb 26, 2026 | 2025 (Q4) | 3.171.69 | 3.38 | -50.00% (-1.69) | |
| Nov 05, 2025 | 2025 (Q3) | 3.012.25 | 4.32 | -47.83% (-2.07) | |
| Aug 06, 2025 | 2025 (Q2) | 1.433.57 | -0.56 | 733.33% (+4.13) | |
| May 12, 2025 | 2025 (Q1) | -1.010.38 | -0.75 | 150.00% (+1.13) | |
| Mar 03, 2025 | 2024 (Q4) | 6.863.38 | 3.57 | -5.26% (-0.19) | |
| Nov 08, 2024 | 2024 (Q3) | 4.704.32 | 4.51 | -4.17% (-0.19) |
The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.
Beat Missed