Fortrea Holdings 2025 Q2 Earnings Deepening Losses Despite Raised Revenue Guidance

Fortrea Holdings (FTRE) reported its fiscal 2025 Q2 earnings on August 7th, 2025. The results showed a deepening net loss, driven by a non-cash goodwill impairment charge, but revenue growth of 7.2% and an upward revision of full-year revenue guidance.

The company reported a GAAP net loss of $374.9 million, or $4.14 per share, compared to a $138.4 million, or $1.55 per share, loss in the prior year period. The loss widened by 170.9% year-over-year, primarily due to a $309.1 million goodwill impairment charge in the quarter. Excluding non-recurring items, adjusted net income was $17.6 million, or $0.19 per share, compared to an adjusted loss of $2.3 million, or $0.03 per share, in the same period in 2024. The EPS results indicate a deteriorating performance, with the GAAP loss per share widening significantly year-over-year.

Revenue
Fortrea Holdings reported total revenue of $710.30 million for the quarter, representing a 7.2% increase compared to $662.40 million in the same period last year. The company raised its full-year 2025 revenue guidance to $2.6 billion to $2.7 billion.

Earnings/Net Income
Fortrea Holdings reported a GAAP net loss of $374.9 million, or $4.14 per share, for 2025 Q2, compared to a $138.4 million, or $1.55 per share, loss in 2024 Q2. The widening loss was primarily driven by a non-cash goodwill impairment charge of $309.1 million. Adjusted net income, which excludes the impairment and other charges, was $17.6 million, or $0.19 per share, compared to an adjusted loss of $2.3 million, or $0.03 per share, in the prior year.

Price Action
The stock of Fortrea Holdings experienced significant volatility, with a 11.68% drop during the latest trading day. However, the stock has rebounded over the past week with a 6.13% gain during the most recent full trading week and a 47.87% surge month-to-date.

Post Earnings Price Action Review
A trading strategy of buying Fortrea Holdings shares following an earnings beat and holding for 30 days performed poorly, returning -91.34%, underperforming the benchmark by 132.94%. The strategy exhibited a maximum drawdown of 0.00% and a Sharpe ratio of -1.07, indicating high risk with minimal returns. These figures highlight the significant market uncertainty and the risk associated with the stock following the earnings report.

CEO Commentary
Anshul Thakral, Fortrea’s CEO, expressed confidence in the company's long-term prospects, emphasizing its strong value proposition and commitment to innovation and disciplined execution. He acknowledged the challenges posed by the recent leadership transition, particularly its impact on new customer engagement, but expressed optimism about turning this trend around. The CEO outlined a strategic focus on enhancing commercial, financial, and operational excellence to regain customer trust.

Guidance
Fortrea Holdings raised its full-year 2025 revenue guidance to a range of $2.6 billion to $2.7 billion and reaffirmed its adjusted EBITDA guidance of $170 million to $200 million. The company anticipates operating cash flow to be marginally negative for 2025 but expects positive cash flow in the remaining quarters. CFO Jill McConnell noted that $150 million in gross cost reductions are on track, with $90 million to $100 million in net savings expected, including $30 million in EBITDA contributions year-to-date. The company expects to maintain strong liquidity, with $400 million available on its revolver and more than $80 million in cash on hand.

Additional News
Fortrea announced that Anshul Thakral joined as CEO on August 4, 2025, succeeding Interim CEO Peter M. Neupert, who remains chairman of the board. Thakral also serves as a director, bringing extensive leadership experience and a strong commitment to patient-centered innovation. Additionally, the company’s spin-off transition is now complete, allowing Fortrea to focus entirely on its long-term growth and value creation. The leadership transition has been highlighted as a key strategic shift, with Thakral expressing confidence in the company’s ability to support customers in an increasingly complex development landscape.