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- **Revenue and Margin Expansion**: Q3 revenue of $701.3 million (+3.9% YoY) with improved book-to-bill of 1.13x. Biotech win rates doubled, driving new client pipeline growth.
- **Operational Efficiency**: 33% faster site selection and 5 months early enrollment in key studies, supported by AI tools like Accelerate Risk Radar.
- **Financial Discipline**: $95 million in gross cost savings, $87 million in operating cash flow, and DSO reduction to 33 days. Raised 2025 revenue guidance to $2.7-$2.75 billion.
- **Strategic Focus**: Biotech operating model with bespoke client solutions, FSP pricing discipline, and clinical pharmacology growth through complex studies.

**【CEO Summary Section】**
- **Revenue and EBITDA Growth**: Q3 revenue of $701.3 million, up 3.9% YoY, with adjusted EBITDA of $50.7 million. Book-to-bill ratio improved to 1.13x, and trailing 12-month book-to-bill remained stable at 1.07x.
- **Biotech Win Rates**: Biotech win rates doubled QoQ, with a focus on Phase II and III studies. New client wins included a rare neuromuscular disease Phase II study and a respiratory disease Phase III trial.
- **Operational Excellence**: Net Promoter Scores (NPS) improved, driven by efficiency gains like 33% faster site selection and 5 months early enrollment in an Alzheimer's study.
- **AI and Technology**: Launched tools like Accelerate Risk Radar and Start My Day to enhance workflow efficiency, with early pilots showing 5-10% productivity gains.
- **Financial Strategy**: Completed a $75.7 million note repurchase and maintained a strong cash position of $25 million from a milestone payment.

**【CFO Financial Commentary】**
- **Profitability Metrics**: GAAP net loss of $15.9 million, with adjusted net income of $11.7 million. GAAP EPS of -$0.13 and adjusted EPS of $0.12.
- **Cash Flow Management**: Generated $87 million in operating cash flow and $80 million in free cash flow, reducing DSO to 33 days (down 17 days YoY).
- **Cost Optimization**: Achieved $95 million in gross cost savings (vs. $150 million target), with $53 million net savings contributing to EBITDA. SG&A reduced 21.6% YoY.
- **Guidance Update**: Raised 2025 revenue guidance to $2.7-$2.75 billion and narrowed adjusted EBITDA to $175-$195 million.

**【Q&A Highlights】**
- **Client Mix and Pricing**: Focused on direct fee revenue growth to improve margins, with cautious FSP pricing to avoid unattractive margins. Biotech RFPs up 40% QoQ, with faster decision-making timelines.
- **Operational Leverage**: Emphasized bespoke approaches for biotech clients, leveraging therapeutic expertise and executive engagement. Clinical pharmacology growth driven by complex studies requiring external sites.
- **Future Outlook**: Targeting 2026 growth through disciplined backlog building and cost management, with no structural barriers to achieving industry-standard margins.

Fortrea Holdings Inc. (FTRE) Q3 2025 Earnings Call Transcript

Revenue

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FTRE

FTRE fundamentals

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