Fortrea Holdings (NASDAQ: FTRE) raised the midpoint of its full-year 2026 revenue and adjusted EBITDA guidance while narrowing both ranges, as it reported third-quarter results on October 29, 2026. Revenue fell 1.4% year-over-year to $691.5 million, mainly because pass-through backlog converted more slowly. Adjusted EBITDA margin rose 120 basis points from a year earlier to 8.4%. The company booked a $558 million backlog adjustment, cutting backlog to $7.3 billion. Free cash flow reached $52.5 million, and net leverage fell to 3.9x. Book-to-bill was 1.12x. Fortrea also completed its purchase of Worldwide Clinical Trials' early phase services business, lifting clinical pharmacology capacity to more than 570 beds. It gave no 2027 guidance.

What Fortrea (FTRE) said on its Q3 earnings call. October 29, 2026 Key points. * Q3 performance improved: Revenue rose 2.0% sequentially to $691.5 million, while adjusted EBITDA increased 14.4% year over year to $58.0 million, lifting the margin to 8.4%. Net income, adjusted EPS and free cash flow also improved substantially. * Bookings strengthened, but backlog was reduced: Net new business awards reached $773 million, producing a 1.12x book-to-bill ratio. However, Fortrea's backlog fell to $7.3 billion after a cumulative $558 million adjustment for inactive studies and work the company no longer expects to deliver; management said the adjustment does not affect reported results or near-term revenue plans. * Outlook raised and capabilities expanded: Fortrea increased its 2026 outlook to $2.665-$2.690 billion in revenue and $210-$218 million in adjusted EBITDA. Its acquisition of Worldwide Clinical Trials' Early Phase Services business expands its clinical pharmacology network and is expected to become EBITDA-profitable in 2027. * MarketBeat previews the top five stocks to own by November 1st. Fortrea NASDAQ: FTRE reported third-quarter 2026 revenue of $691.5 million, down 1.4% from a year earlier but up 2.0% sequentially, as the contract research organization cited improving demand, stronger operational execution and continued cost discipline. Adjusted EBITDA totaled $58.0 million, rising 14.4% from $50.7 million in the prior-year quarter. Adjusted EBITDA margin expanded 120 basis points year over year to 8.4%, though it declined 30 basis points sequentially from approximately 8.7% in the second quarter. CEO Anshul Thakral said the company's return-to-growth strategy is centered on commercial, operational and financial execution. "The market is becoming more supportive, but our progress is not simply a function of market recovery," Thakral said, pointing to changes in the company's go-to-market model and greater coordination across teams. Bookings and backlog adjustment. Fortrea recorded net new business awards of $773 million during the quarter, producing a book-to-bill ratio of 1.12 times, compared with 1.06 times in the second quarter. Its trailing 12-month book-to-bill ratio also stood at 1.12 times. Backlog was $7.3 billion at quarter-end, down from $7.8 billion at the end of the second quarter and $7.6 billion a year earlier. CFO Jason Knoblauch said the company recorded a cumulative $558 million adjustment to backlog to better reflect its estimate of remaining revenue expected from contracts in its portfolio. The adjustment included inactive-study dynamics and what the company internally calls "not to deliver" dynamics, Knoblauch said. He described it as an accumulation of ordinary-course changes in contract scope, including trials that can become inactive over time. The adjustment was not included in reported net book-to-bill and did not affect reported financial results or near- and medium-term revenue planning, according to the company. Cancellations were within normal ranges but were "slightly elevated" during the quarter, Knoblauch said. He added that cancellations and negative contract amendments that closed in the quarter were within one standard deviation of normal levels. Margins, cash flow and balance sheet. Fortrea's year-over-year margin expansion reflected a more favorable portfolio mix and cost-management and efficiency initiatives, which together contributed more than 300 basis points of benefit, Knoblauch said. Those gains were partly offset by increased investments in employee compensation, including incentive compensation. Discover more Stock Market News Stock Market Holidays Track Stock Market Net income was $0.6 million, compared with a net loss of $15.9 million in the third quarter of 2025 and a $13.2 million loss in the preceding quarter. Adjusted net income was $27.9 million, versus $11.7 million a year earlier. Adjusted diluted earnings per share were $0.28, compared with $0.12 in the prior-year quarter. Operating cash flow was $60.8 million and free cash flow was $52.5 million, improving from $28.9 million and $19.9 million, respectively, in the second quarter. Net days sales outstanding improved to 15 days at Sept. 30, from 20 days at the end of June and 33 days a year earlier. The company ended the quarter with approximately $668 million of available liquidity, no revolver borrowings, gross debt of $1.066 billion and net debt of $845.7 million. Net leverage was 3.9 times, representing an improvement of 1.4 turns over the preceding 12 months, driven by EBITDA growth, debt repayment and cash accumulation. Early-phase acquisition expands capabilities. Fortrea completed its acquisition of the Early Phase Services business from Worldwide Clinical Trials on Oct. 19. The transaction expands the company's clinical pharmacology network to more than 570 beds across the U.S. and U.K. and adds bioanalytical and safety laboratory capabilities. Thakral said the acquired business includes a 200-bed facility in San Antonio, Texas, and a bioanalytical laboratory in Austin. Together with Fortrea's existing Dallas unit, the facilities create a 300-bed Texas network. The Austin laboratory allows Fortrea to perform certain testing internally rather than through third parties, which Thakral said can give the company more control over execution and convert certain pass-through activity into service-fee revenue. The company said the acquired business is expected to be EBITDA-profitable in 2027. Knoblauch said initial integration efforts are focused on commercial activity and incorporating the acquired capabilities into Fortrea's clinical pharmacology services pipeline. Guidance raised and narrowed. Fortrea raised the midpoint and narrowed its full-year outlook. The company now expects 2026 revenue of $2.665 billion to $2.690 billion and adjusted EBITDA of $210 million to $218 million. For the fourth quarter, Knoblauch said the company expects a modest sequential revenue slowdown because the period has fewer working days than the third quarter. He also cited a sequential increase in information-technology operating expense investments as a secondary factor affecting the quarterly outlook. Management did not provide 2027 guidance. Thakral said the company is seeing a recovery in both biotech and biopharma demand, with biotech bookings showing nearly double-digit growth in 2026 and biopharma request-for-proposal activity increasing. He said Fortrea continues to target mid-teens adjusted EBITDA margins over time through revenue growth, portfolio mix, utilization improvements, technology-enabled efficiencies and operating leverage. About Fortrea (NASDAQ:FTRE). Fortrea Holdings Inc is a global contract research organization (CRO) that provides services to pharmaceutical, biotechnology and medical device companies. The company helps clients plan, manage and execute clinical development programs, supporting the testing of new medicines and therapies from early-stage research through regulatory approval and post-approval activities. Its services include Phase I through Phase IV clinical trials, clinical operations, patient recruitment and access, data management, biostatistics, medical monitoring, pharmacovigilance and regulatory support. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. Before you consider Fortrea, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Fortrea wasn't on the list. While Fortrea currently has a Hold rating among analysts, top-rated analysts believe these five stocks are better buys. 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Fortrea Holdings (NASDAQ:FTRE), a clinical research company, reports third-quarter results before the bell on Thursday. The market expects revenue to fall 4.3% year on year, against a 3.9% rise in the same quarter last year. Last quarter, Fortrea beat revenue expectations with $678.2 million, down 4.5% year on year, and also beat analysts' EPS estimates. It has missed Wall Street's revenue estimates multiple times over the last two years. Fortrea shares are up 23.2% over the last month, against an average 3.6% gain for its segment. The average analyst price target is $21.71, below the current share price of $24.71. Peers have reported already. Repligen's revenue rose 10.9%, while Medpace's rose 8.5%, in line with estimates.