On August 12, 2024, Fortrea Holdings Inc (FTRE, Financial) released its 8-K filing detailing the financial results for the second quarter ended June 30, 2024. Fortrea Holdings, a global contract research organization (CRO) specializing in clinical trial management and patient access solutions, reported revenues of $662.4 million and a GAAP net loss of $99.3 million for the quarter.
Company Overview
Fortrea Holdings Inc (FTRE, Financial) is a late-stage CRO that provides comprehensive Phase I through IV clinical trial management, clinical pharmacology, and patient access solutions. The company collaborates with both emerging and large biopharma, medical device, and diagnostic companies to manage their clinical trials. Formed in 2023 as an independent, publicly traded company after LabCorp spun off its clinical development business, Fortrea operates with a workforce of 19,000 staff members across 90 countries.
Performance and Challenges
For the second quarter of 2024, Fortrea Holdings Inc (FTRE, Financial) reported revenues of $662.4 million, falling short of the analyst estimate of $689.08 million. The company also posted a GAAP net loss of $99.3 million, translating to a GAAP loss per share of $1.11. This is a significant decline compared to the second quarter of 2023, where the company reported a GAAP net income of $25.0 million and diluted earnings per share of $0.28.
The adjusted EBITDA for the quarter was $55.2 million, down from $71.9 million in the same period last year. Despite these challenges, Fortrea's chairman and CEO, Tom Pike, emphasized the company's ongoing transformation and focus on margin improvement actions. He stated,
Fortrea continues to make progress with customers and our business, which is not reflected in the headline numbers."
Financial Achievements
Despite the overall decline in revenue and earnings, Fortrea Holdings Inc (FTRE, Financial) achieved several financial milestones. The company completed the divestiture of assets related to the Endpoint Clinical and Patient Access businesses, resulting in a debt paydown of $504 million during the quarter. Additionally, the book-to-bill ratio for the quarter was 0.96x, contributing to a trailing 12-month book-to-bill ratio of 1.16x.
Key Financial Metrics
Below is a summary of key financial metrics from Fortrea Holdings Inc (FTRE, Financial)'s earnings report:
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Revenue | $662.4 million | $725.1 million |
| GAAP Net Income (Loss) | $(99.3) million | $25.0 million |
| Adjusted EBITDA | $55.2 million | $71.9 million |
| GAAP Loss Per Share | $(1.11) | $0.28 |
Income Statement Highlights
For the first half of 2024, Fortrea Holdings Inc (FTRE, Financial) reported revenues of $1,324.5 million, compared to $1,419.0 million in the first half of 2023. The GAAP net loss for the first half was $179.1 million, with a diluted loss per share of $2.01. This is a stark contrast to the first half of 2023, where the company reported a GAAP net income of $33.0 million and diluted earnings per share of $0.37.
Balance Sheet and Cash Flow
As of June 30, 2024, Fortrea Holdings Inc (FTRE, Financial) had cash and cash equivalents of $126.2 million and gross debt of $1,142.0 million. Operating cash flow for the six months ended June 30, 2024, was $248.1 million, and free cash flow was $227.6 million. The company's total assets stood at $3,565.4 million, with total liabilities amounting to $2,104.3 million.
Full-Year 2024 Guidance
Fortrea Holdings Inc (FTRE, Financial) has revised its full-year 2024 guidance, projecting revenues in the range of $2,700 million to $2,750 million and adjusted EBITDA between $220 million and $240 million. The reduction in revenue guidance is attributed to lower pass-through revenues and lower service-fee revenues in the second half of the year.
For more detailed insights and analysis, visit GuruFocus.com.
Explore the complete 8-K earnings release (here) from Fortrea Holdings Inc for further details.
