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    William Ortmayer • Goldman Sachs

    William Ortmayer's questions to Fortrea Holdings Inc (FTRE) leadership

    William Ortmayer's questions to Fortrea Holdings Inc (FTRE) leadership • Q4 2024

    Question

    William Ortmayer, on for Matt Sykes, asked about the expected cadence of operating expenses and gross margin throughout 2025, considering the various moving parts like TSA roll-offs and restructuring.

    Answer

    CFO Jill McConnell indicated that margins will improve over the course of 2025, but the progression will be more gradual than in the prior year. She noted that the benefit from SG&A reductions will be minimal in Q1 and will ramp up through the year. More detailed quarterly guidance will be provided on the Q1 earnings call, after the company has more time operating on its new standalone systems.

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    William Ortmayer's questions to Fortrea Holdings Inc (FTRE) leadership • Q3 2024

    Question

    William Ortmayer, on for Matt Sykes, asked about expectations for the backlog burn rate into 2025 and the primary drivers of gross margin improvement, specifically the impact of business mix versus cost efficiencies.

    Answer

    CFO Jill McConnell noted the burn rate stepped up in Q3 and should be consistent in Q4, driven partly by faster-burning clinpharm business, but declined to comment on 2025. She emphasized that growing the higher-margin, full-service clinical business is a key focus for margin improvement, acknowledging that therapeutic mix is a critical factor.

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