Fortrea Holdings Inc.

Good day and thank you for standing by. Welcome to the Fortriot Q4 and full year 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised, that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Tracey Crumie, Senior Vice President of Investor Relations. Please go ahead.

Thank you. Good morning, everyone, and welcome to Fortria's fourth quarter and full year 2025 earnings conference call. With me today on the call is Anshul Thakral, Chief Executive Officer and Director, and Joe McConnell, Chief Financial Officer. Before we begin, Please note this call is being webcast. There is an accompanying slide presentation, which can be found on the investor relations section of our website for TRIA.com. During this call, we'll make certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to significant risks and uncertainties that could cause actual results to differ materially from our current expectations. We strongly encourage you to review the reports filed with the FCC regarding these risks and uncertainties. In particular, those are described in the cautionary statement concerning forward-looking statements and the risk factors in our press release and presentation that are posted on our website. Please note that any forward-looking statements represent our views as of today, February 26, 2026, and that we assume no obligation to update the forward-looking statements even if estimates change. During this call, we will also be referring to certain non-GAAP financial measures. These non-GAAP measures are not superior to or a replacement for the comparable GAAP measures, but we believe these measures provide investors with a more complete understanding of results. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures is available in the earnings press release and the earnings call presentation slides that are provided in connection with today's call. Lastly, I would like to add that Anshul, Jill, and I will be attending the Barclays Global Healthcare Conference on March 10th in Miami. If anyone would like to meet with us on these dates, please contact me or a sales representative from the firm. And with that, I'd like to turn the call over to Anshul Bikral, Chief Executive Officer and Director. Anshul, please go ahead.

Thank you, Tracy. Good morning, everyone, and thank you for joining us today. I'm pleased to report our fourth quarter and full year 2025 results. Before I begin, I want to express my sincere appreciation to our colleagues across Fortria, our board of directors, our clients, and our broader stakeholder community. This was my first full quarter here, hard as that is to believe given how deeply rooted I feel at Fortria. The progress we will cover today reflects a tremendous amount of dedication across our entire global community, and I'm proud to share it with you today. We delivered solid fourth quarter and full year performance in line with our guidance, despite a challenging and uneven operating environment. Jill will walk through the financials in more detail, but I want to highlight a few key points up front. We delivered revenue and adjusted EBITDA in line with our full year expectations. We closed the year with a Q4 book to bill of 1.14 times and a trailing 12 month book to bill of 1.02 times, reflecting improvement in demand during the second half of the year. We generated positive operating and free cash flow in Q4, resulting in positive operating and free cash flow for the full year. Importantly, we exceeded our gross and net savings targets, delivering approximately $153 million in gross savings and $93 million in net savings for the year. We continued to strengthen our balance sheet through disciplined debt pay down using cash on hand, reinforcing our commitment to improving our capital structure. We expanded our leadership team, welcoming Aggie Gallagher as general counsel in the fourth quarter. More recently, we appointed Dr. Scott Dove to lead our clinical pharmacology business. Dr. Oren Cohen, who previously led this business, is now fully dedicated to his role of chief medical officer, where he is focused on strengthening our clinical development and medical expertise as we continue to leverage our scientific and therapeutic experience with customers. Stepping back to the broader environment, the macro backdrop remains cautious, but importantly, it continues to show signs of stabilization and early recovery. Funding activity rebounded meaningfully in the second half of 2025, with the strongest activity in the fourth quarter. Large pharma budgets have largely stabilized following pipeline reprioritizations, and the market is currently signaling improving biotech funding flow through 2026. With this backdrop, we are seeing higher client engagement levels, shorter decision-making timelines, and more concrete customer conversations, particularly within biotech. we continue to expect our recovery to be somewhat uneven in the first half of 2026, which reflects the new business wins we saw earlier in 2025. Looking further ahead, we're cautiously optimistic about building momentum in the second half of the year as outsourcing trends remain steady and access to capital looks to improve. Through all of this, our focus remains unchanged. disciplined execution, and positioning for TRIA to win as demand continues to recover. Our solid performance is built upon three pillars of excellence, commercial, operational, and financial. We use these pillars to prioritize our actions and measure our progress in our journey to growth and margin expansion. I'll provide an update on our commercial excellence and operational excellence pillars while Jill will discuss the financial excellence pillar. Starting with commercial excellence, we secured significant new and repeat wins in the quarter, underscoring both our differentiated capabilities and the strength of our client relationships. Q4 notable wins included a long-term clinical pharmacology partnership award for the top five large pharma company, several FSP renewals from longstanding large pharma clients, and a healthy balance of phase two and phase three global clinical development wins across biotech, midsize pharma, and large pharma, as well as across various therapeutic areas. Overall, I really like the mix of our current pipelines. As I said last quarter, we have a commercial framework to expand our commercial opportunities, which we call the three R's. reach, relevance, and repeat. These three R's guide how we're rebuilding growth, strengthening execution, and improving consistency across the organization. First, reach, expanding the top of the funnel and increasing access to customers. Over the last several quarters, we've taken deliberate actions to broaden our aperture. We've restructured our global sales organization to increase capacity and capabilities focused on hunting new client relationships. We're building our inside sales, otherwise known as our reach engine, focused on early stage qualification, new to Fortrea prospects, and general biotech outreach. And we've made executive-led customer engagement a standard part of our go-to-market discipline. Second, relevance. creating bespoke solutions that leverage our recognized therapeutic and scientific expertise in ways that are relevant and resonate with clients. Our clients have come to expect that Fortria leads with science. Now we are infusing our medical expertise deeper into how we deliver our clinical programs. As I mentioned earlier, Dr. Oren Cohen is now spending all of his time as Chief Medical Officer to deepen relationships with clients. He's engaging earlier in the scientific dialogue and collaborating closely with our physicians and therapeutic leaders to ensure Fortrea's solutions address the complex development challenges our clients face. We also have been sharpening our focus on biotech opportunities, assembling biotech-ready teams that understand the unique constraints and needs of the biotech sector as they advance scientific innovation. On the flip side, we maintain strong discipline, including a willingness to walk away if opportunities do not meet our strategic or margin criteria. Third, repeat. Earning the next study by delivering consistently and creating long-term relationships. We've strengthened the interface between sales, delivery, and project management to ensure seamless handoffs, improved visibility, and streamlined client experience. This focus is showing up in execution, and our clients are noticing the difference. Our net promoter score, which is how we track client satisfaction, improved year over year. Now, let me share some progress we've made under our operational excellence pillar. As a provider of professional services, operational excellence is baked in how we manage projects. We continue to optimize our approach to project management with a relentless focus on the client experience based on reliable and predictable delivery. Let me share some recent updates. We have created a stronger alignment to evolving regulatory requirements with risk-based quality management embedded as a cornerstone of how we deliver quality and oversight across the development lifecycle. Notably, We've streamlined the design of our project management capabilities, reducing touch points for customers, and creating more direct interaction with our therapeutic and scientific leads. We have also streamlined our planning and global processes, removing repeat actions and simplifying workflows. These process changes are enabled by technology. Now, given technology underpins so much of operational excellence, let me take a pause here from the quarterly updates and address the topic of technology more holistically, particularly as it relates to AI in our industry. I'm very aware that there has been a great deal of discussion and, frankly, concerns raised in the recent weeks about how AI will impact the CRO sector. So, here's how we're thinking about it. Speaking broadly, we see AI as a force multiplier that can accelerate execution and ultimately can drive more science, more trials, and more growth. AI is a way to advance science faster, which ultimately expands demand for CROs rather than shrinking it. AI is a margin and productivity lever, not a people replacement or a cost cutter. AI will automate specific task-level work rather than replace core CRO roles. It eliminates routine and repeatable work and improves throughput and standards. It is part of a broader push to compress trial timelines and costs, but with a hard boundary. Quality is non-negotiable. Examples of AI in use across our industry today include case intake and reporting in pharmacovigilance, central monitoring documentation checks and alert triggers, site selection, and study design optimization. At Fortrea, more specifically, we are making focused investments in AI, machine learning, and other advanced technologies, and workflow automation and orchestration to drive speed, reduce cost, and improve quality in clinical research. Our industry-leading Accelerate platform remains central to that strategy. By integrating real-time, role-based insights across the trial ecosystem, we are able to reduce manual effort, accelerate decision-making, and improve quality at scale. You may recall last quarter, I reported that the AI-enabled risk radar update to Accelerate was in production. and we are beginning to roll out the CRA mobile app, digital assistant, and our Start My Day platform to increase CRA productivity. We advanced deployment of these tools in the fourth quarter and introduced further innovation. Currently, we're wrapping up a pilot of our new feasibility intelligence engine, which enables Fortrea to partner with clients at the beginning of a program to make better informed feasibility decisions that improve operational outcomes. With all of our investments in technology, we are ultimately driven to improve the efficiency of drug development, streamline the experience for clients and investigator sites, and improve the overall quality of clinical trials. From project management to streamline processes to phase deployment of AI-enabled tools, we track our operational excellence progress in terms of outcomes. Are we delivering faster, better, or changing the experience for our clients? That is the key question. For example, we recently accelerated recruitment by three months in a complex respiratory study and completed enrollment in a phase two Alzheimer's study. These achievements matter to our clients and make a meaningful difference to the patients who will eventually benefit from new treatments. As a service-driven organization, our people are the foundation of operational excellence. Beyond adoption of new technology and processes, we prioritize employee engagement and development. I'm pleased to report that in our recent annual engagement survey, our overall scores improved year over year, alongside a significant increase in response rate. Scores increased across all categories, with most exceeding cross-industry benchmarks. I said earlier that I'm proud of Fortrea's performance in recent progress, but I'm even more proud of the impact our work has on patients. I continue to make time to meet with our team and clients in person around the world. A few weeks ago, I had the pleasure of visiting our clinical research unit in Dallas, Texas, just days after a significant winter storm disrupted the region. While the weather created disruptions, our research did not stop. Members of our team stayed overnight to ensure study volunteers were cared for and that planned dosing continued on schedule. During the visit, I met with our principal investigator and observed an ethno-bridging study in progress. Demand for these studies is growing as the global regulatory environment evolves, and our global clinical network has earned a tremendous reputation for delivering this critical work. Moments like this reinforce what sets Fortrea apart. the dedication of our physicians and clinical operations teams united by our shared purpose of bringing new treatments to patients faster. Before I turn it over to Jill, let me close with a few key points. Portria is executing against a clear strategy and building momentum. This is a high-quality business with strong fundamentals now operating with greater discipline, focus, and accountability. We've taken meaningful steps to strengthen our commercial engine and improve our cost structure. We are advancing operational excellence from streamlining project delivery to transforming our processes and tools and we're innovating in ways that are meaningful to clients. These actions position us well to benefit from an improving market. While this remains a journey The direction is clear. Early proof points are in place, and we are confident in our ability to deliver consistent long-term value creation. With that, I'll turn the call over to Jill.