Revenue has trended downward with a 2.3% year-over-year decline in 2026Q1, while gross margins remain compressed at 14.7% as of 2025Q3, significantly trailing larger industry peers.
| Sales/Revenue | 2.71B | 2.72B | 2.7B | 2.84B | 2.84B | 3.06B |
| Revenue Growth % | 0.86% | 1% | -5.14% | 0.19% | -7.21% | - |
| Cost of Goods Sold | 1.74B | 2.3B | 2.16B | 2.25B | 2.11B | 2.45B |
| COGS % of Revenue | - | 84.37% | 80.19% | 79.22% | 74.47% | 80.23% |
| Gross Profit | 328.8M | 425.8M | 534.2M | 590.6M | 724.4M | 604.4M |
| Gross Margin % | 12.14% | 15.63% | 19.81% | 20.78% | 25.53% | 19.77% |
| Gross Profit Growth % | - | -20.29% | -9.55% | -18.47% | 19.85% | - |
| Operating Expenses | 447.3M | 456.4M | 696.1M | 558.6M | 537.3M | 490.1M |
| OpEx % of Revenue | - | 16.76% | 25.82% | 19.65% | 18.94% | 16.03% |
| Selling, General & Admin | 435.1M | 456.4M | 560.7M | 448.1M | 416.1M | 303.1M |
| SG&A % of Revenue | - | 16.76% | 20.79% | 15.76% | 14.67% | 9.91% |
| Research & Development | 0 | 0 | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | - | - | - | - | - |
| Other Operating Expenses | 1000K | 0 | 135.4M | 110.5M | 121.2M | 187M |
| Operating Income | -30.3M | -30.6M | -161.9M | 32M | 187.1M | 114.3M |
| Operating Margin % | -1.12% | -1.12% | -6% | 1.13% | 6.59% | 3.74% |
| Operating Income Growth % | - | 81.1% | -605.94% | -82.9% | 63.69% | - |
| EBITDA | 48M | 47.4M | -75M | 130M | 280.7M | 280.6M |
| EBITDA Margin % | 1.77% | 1.74% | -2.78% | 4.57% | 9.89% | 9.18% |
| EBITDA Growth % | 108.55% | 163.2% | -157.69% | -53.69% | 0.04% | - |
| D&A (Non-Cash Add-back) | 78.3M | 78M | 86.9M | 98M | 93.6M | 166.3M |
| EBIT | -366M | -891.6M | -151.2M | 39.2M | 187.2M | 136.6M |
| Net Interest Income | -69M | -91.4M | -123.8M | -69.7M | -200K | -200K |
| Interest Income | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 49.9M | 91.4M | 123.8M | 69.8M | 200K | 200K |
| Other Income/Expense | -417M | -952.4M | -113.1M | -62.5M | -100K | 22.1M |
| Pretax Income | -447.3M | -983M | -275M | -30.5M | 187M | 136.4M |
| Pretax Margin % | -16.51% | -36.09% | -10.2% | -1.07% | 6.59% | 4.46% |
| Income Tax | -400K | 3.2M | -3.5M | 1.2M | 41.1M | 38.4M |
| Effective Tax Rate % | 0.09% | -0.33% | 1.27% | -3.93% | 21.98% | 28.15% |
| Net Income | -446.9M | -986.2M | -328.5M | -25.2M | 186.2M | 98M |
| Net Margin % | -16.5% | -36.21% | -12.18% | -0.89% | 6.56% | 3.21% |
| Net Income Growth % | 43.46% | -200.21% | -1203.57% | -113.53% | 90% | - |
| Net Income (Continuing) | -446.9M | -986.2M | -271.5M | -31.7M | 145.9M | 98M |
| Discontinued Operations | 0 | 0 | -57M | 6.5M | 40.3M | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | -4.90 | -10.81 | -3.67 | -0.04 | 2.11 | 1.11 |
| EPS Growth % | 44.21% | -194.55% | -9075% | -101.9% | 90.09% | - |
| EPS (Basic) | - | -10.81 | -3.67 | -0.04 | 2.11 | 1.11 |
| Diluted Shares Outstanding | 91.2M | 91.2M | 89.5M | 88.8M | 88.4M | 88.4M |
| Basic Shares Outstanding | 91.2M | 91.2M | 89.5M | 88.8M | 88.4M | 88.4M |
| Dividend Payout Ratio | - | - | - | - | - | - |
Persistent operating margin deficits
According to the latest quarterly financial statements, Fortrea's revenue has trended downward, with the most recent period showing a 2.3% year-over-year decline to $636.5 million, signaling significant challenges in maintaining top-line momentum following the company's separation from its former parent organization, Labcorp.
The consistent revenue deceleration suggests that the company is struggling to replace legacy volume or effectively capture new clinical trial mandates. Investors should monitor whether this contraction reflects a structural loss of competitive positioning or merely the expected volatility associated with the initial post-spin-off period.
Based on reported figures, Fortrea's gross margin has fluctuated significantly, reaching a low of 14.7% in 2025Q3, which highlights a persistent inability to achieve the scale-driven profitability seen in larger industry peers like IQVIA or ICON, whose margins consistently exceed 25%.
The inability to sustain gross margins above 20% suggests that the company's cost structure is heavily burdened by low-margin pass-through expenses or inefficient service delivery models. This margin profile warrants further investigation into whether the current pricing strategy is sufficient to cover the high variable labor costs inherent in clinical research.
As reported in financial filings, Fortrea continues to struggle with operating leverage, as evidenced by negative operating margins in eight of the last ten quarters, indicating that the company has yet to decouple its fixed corporate overhead from its declining revenue base.
The persistent operating losses suggest that the company is still absorbing significant 'dis-synergy' costs related to its independent infrastructure. Until management can demonstrate a clear path to positive operating income, the current cost structure appears to be a significant drag on shareholder value.
Based on the provided income statement data, the quality of earnings is severely compromised by recurring net losses and significant quarterly fluctuations, including a massive $562.9 million net loss in 2025Q2 that underscores the instability of the company's current financial performance.
The frequent reliance on stock-based compensation alongside deep net losses suggests that the company is currently prioritizing talent retention over bottom-line profitability. Investors should be cautious, as these non-operating items and accounting anomalies make it difficult to discern the underlying operational health of the business.
As noted in recent financial disclosures, the company's reliance on an FSP-heavy service model may permanently limit margin expansion, potentially leaving Fortrea at a structural disadvantage compared to competitors that utilize more centralized, higher-margin clinical trial management frameworks.
Short-sellers may focus on the risk that the company's current margin profile is not a temporary transition issue but a permanent feature of its business mix. If the company cannot pivot toward higher-margin technology-driven services, the current valuation may remain under pressure from persistent earnings dilution.
Quick answers to the most common questions about buying FTRE stock.
For fiscal year 2025, Fortrea Holdings Inc. (FTRE) reported total revenue of $2.72B. This represents a 10.9% decline compared to $3.06B in 2021.
Fortrea Holdings Inc. (FTRE) reported a net loss of $986.2M for the fiscal year ending 2025.
Fortrea Holdings Inc. (FTRE) reported an operating income of $-30.6M, resulting in an operating profit margin of -1.1%. This margin reflects the operational efficiency of the business before interest and taxes.
Fortrea Holdings Inc. (FTRE) generated $425.8M in gross profit for the year, representing a gross profit margin of 15.6%. This demonstrates the company's core pricing power and production efficiency.