Fortrea, a leading global contract research organization (CRO), recently reported its financial results for the second quarter of 2024. The company's revenue for the quarter was $662.4 million, compared to $725.1 million in the second quarter of 2023. This represented a decrease of approximately 8.6% in revenue year-over-year.
Fortrea's GAAP net loss for the second quarter of 2024 was $(99.3) million, while the GAAP net income for the same period in 2023 was $25.0 million. The diluted loss per share for the second quarter of 2024 was $(1.11), reflecting a significant decrease from the diluted earnings per share of $0.28 in the second quarter of 2023.
Adjusted EBITDA for the second quarter of 2024 was $55.2 million, down from $71.9 million in the second quarter of 2023, representing a decrease of approximately 23.2% year-over-year. However, it's worth noting that adjusted EBITDA increased sequentially by 103.7% in the quarter.
The company's backlog as of June 30, 2024, was reported to be $7.366 billion, with a book-to-bill ratio for the quarter of 0.96x.
Looking at the first half of 2024, Fortrea's revenue was $1,324.5 million, down from $1,419.0 million in the first half of 2023, indicating a decrease of approximately 6.7% year-over-year.
The first half of 2024 also saw a GAAP net loss of $(179.1) million and diluted loss per share of $(2.01), compared to a GAAP net income of $33.0 million and diluted earnings per share of $0.37 in the first half of 2023.
During the first half of 2024, the company's adjusted EBITDA was $82.3 million, down from $118.7 million in the first half of 2023, marking a decrease of approximately 30.7% year-over-year.
Fortrea's full-year 2024 guidance has been revised, with the company expecting revenue in the range of $2,700 million to $2,750 million and adjusted EBITDA in the range of $220 million to $240 million.
The company attributed the reduction in revenue primarily to lower pass-through revenues and lower service-fee revenues in the second half of 2024 due to lower net new business in the first half of the year.
Fortrea's operating cash flow for the six months ended June 30, 2024, was reported to be $248.1 million, with free cash flow at $227.6 million.
Despite the challenging financial results, Tom Pike, Chairman and CEO of Fortrea, expressed confidence in the company's direction and its ability to deliver value to stakeholders. Fortrea is a leading global provider of clinical development solutions to the life sciences industry, offering phase I-IV clinical trial management, clinical pharmacology, and consulting services.
The company's full-year 2024 guidance reflects the anticipated performance and the impact of lower service-fee revenues. Fortrea is set to host its quarterly conference call to review its second-quarter performance on Monday, August 12, 2024. As a result of these announcements, the company's shares have moved 2.2% on the market, and are now trading at a price of $25.16. For more information, read the company's full 8-K submission here.
