Fortrea Holdings Reports 7.2% Revenue Growth in Q2 2025 Amid Increased Operating Loss

Fortrea Holdings Inc. reported its financial results for the second quarter of 2025, revealing a revenue increase of 7.2% to $710.3 million compared to $662.4 million in the same period of 2024. For the first half of 2025, revenues reached $1.36 billion, a 2.8% rise from $1.32 billion in the prior year. The growth was attributed to a 6.6% increase in organic revenues, primarily driven by the clinical pharmacology segment, although clinical development revenue remained relatively flat due to a mix of complex studies and lower functional service provider revenue.

The company's operating loss for the second quarter was $330.3 million, significantly higher than the $50.9 million loss reported in the same quarter last year. This increase was largely due to a goodwill impairment charge of $309.1 million, reflecting a decline in the fair value of the Clinical Development reporting unit. Total costs and expenses surged to $1.04 billion, up from $713.3 million in the previous year, driven by higher direct costs and restructuring charges. Selling, general, and administrative expenses decreased by 20.1% to $124.8 million, primarily due to lower transition service agreement costs.

Fortrea's balance sheet showed total assets of $2.84 billion as of June 30, 2025, down from $3.58 billion at the end of 2024. The decline in total assets was influenced by a significant reduction in goodwill, which fell to $965.2 million from $1.71 billion. The company's equity also decreased to $589.2 million, down from $1.36 billion, primarily due to the accumulated deficit increasing to $1.33 billion. The company reported cash and cash equivalents of $81.2 million, a decrease from $118.5 million at the end of 2024.

In terms of operational developments, Fortrea's workforce comprised over 14,500 employees, and the company operates in approximately 100 countries. The company has a backlog of $7.5 billion, reflecting anticipated future revenue from business awards. Fortrea's strategic focus includes enhancing its clinical development services and expanding its market presence, particularly in North America and Europe, where it generated $653.8 million and $419 million in revenues, respectively, for the first half of 2025.

Looking ahead, Fortrea anticipates continued growth in its clinical pharmacology business, although it acknowledges challenges in clinical development due to the complexity of projects. The company plans to leverage its existing cash flows and credit facilities to support operational needs and potential strategic investments. Fortrea remains committed to improving its financial performance and addressing the impacts of market conditions on its operations.