The following is a summary of the Fortrea Holdings, Inc. (FTRE) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Revenues of $674.9 million declined 5.4% year-on-year.

• Book-to-bill ratio was 1.23 for the quarter.

• Adjusted EBITDA for the quarter was $64.2 million, a decrease of 5.9% year-over-year.

• Net interest expense for the quarter was $22.4 million, a decrease of $12.2 million versus the prior year.

Business Progress:

• Fortrea is focusing on improving the mix of its project portfolio, primarily aiming to grow its full-service clinical business.

• Key therapeutic areas with successful bookings include oncology, diabetes, dermatology, and autoimmune disease, with notable biotech wins.

• Investments in IT infrastructure and commercial organization enhancements are ongoing, especially post-spin to drive efficiency and growth.

• System implementation milestones like ERP are expected by the end of the year.

Opportunities:

• Significant Phase 3 trial won based on therapeutic expertise, indicating strength and recognition in specific therapeutic areas.

• Robust pipeline of opportunities for the next two quarters, exhibiting potential for sustained growth.

• Efforts to expand margin and drive margin optimization are ongoing, with targeted programs to reduce SG&A costs.

Risks:

• Uncertainty around biotech decision-making timelines remains, although management strategies have improved project forecasting.

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