Fortrea Holdings Inc.

Good day and thank you for standing by. Welcome to the Forturia second quarter 2026 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'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised today's conference is being recorded. I would now like to turn the conference over to your speaker today, Tracy Krumme, Senior Vice President, Investor Relations. Please go ahead.

Thank you. Good morning, everyone, and welcome to Fortria's second quarter 2026 earnings conference call. Before we begin, please note that this call is being webcast. There is an accompanying slide presentation, which can be found in the investor relations section of our website, fortria.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 SEC regarding these risks and uncertainties, in particular, those that are described in the cautionary statement concerning forward-looking statements and 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, July 29, 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 nor a replacement for the comparable GAAP measures, but we believe these measures provide assessors 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 prep release and presentation slides provided in connection with today's call. With that, I would like to turn the call over to Anshul Thakral, Chief Executive Officer. Anshul, please go ahead.

Thank you, Tracy. Good morning, everyone, and thank you for joining us to discuss Fortria's second quarter 2026 results. Before discussing the quarter, I would like to take a moment to reflect as it's been nearly one year since I joined Fortria as CEO. During that time, I've had the privilege of meeting with colleagues, clients, investors, and partners around the world. What has stood out most consistently is the strength of this organization, our deep scientific and operational capabilities, our patient-inspired mission, and a team that is increasingly focused on execution and accountability. We also recently celebrated Fortria's Founders Day, marking three years as an independent company. This milestone is meaningful. It serves as an important reminder of how much has been accomplished and reinforces our focus on restoring sustainable growth and margin expansion. Today, we are pleased to report another quarter of steady progress on that journey, improving our full-year revenue and adjusted EBITDA guidance. Our second quarter results reflect continued execution against the priorities we have outlined. First, improving commercial traction. Second, strengthening operational delivery. And third, maintaining financial discipline. I would like to address a recent matter. Our new CFO, Jason Nadlock, is not currently able to act as a CFO for Fortria due to an ongoing proceeding relating to restrictive covenants with his former employer. While I will not comment on the specifics, we believe you've acted appropriately in connection with Jason's appointment and plan to support Jason as we work through this matter. What I can share is that our finance function and team are in excellent hands until this matter is resolved. Our board member, David Smith, is serving as our chief financial officer on an interim basis and is on the call today. David has served as audit committee chair since Fortria was established as an independent company. He previously served as CFO at Charles River Laboratories, a global CRM. His familiarity with Fortria will support continuity in our finance and executive leadership. David has stepped down from his committee assignments in connection with this interim role and Aaron Russell will chair the audit committee. I would like to personally thank David and Aaron for their support of Fortria. I would also like to thank Jill McConnell who is on the call today and will review our second quarter financial update. Jill has helped guide Fortria through an important period of transition and transformation. I will share a bit more about Jill before turning the call over to her. First, let me share further details about the quarter. As we discussed over the past several quarters, we are managing the business through a disciplined framework of three pillars, commercial excellence, operational excellence, and financial excellence. This framework continues to guide How we measure progress, what we prioritize, and how we create value for clients, employees, and shareholders. Starting with commercial excellence, we have continued to be cautiously optimistic about the market environment. The broader demand backdrop has continued to improve with more constructive customer engagement across both pharma and biotech. Biotech funding has continued to strengthen and large pharma procurement processes are more normalized than they were in the recent past. With that environment, I've remained pleased with the mix of clients and projects across our portfolio and the progress we are making on our commercial strategy. Large pharma has remained a cornerstone for Fortrea, and our relationships with strategic customers are important sources of work across multiple service lines and development models. At the same time, we've continued to see encouraging growth with new and existing biotech clients. Our commercial strategy remains grounded in the three Rs, reach, relevance, and repeat. Reach means expanding the aperture of our customer relationships and bringing more opportunities into our pipeline. Relevance means showing up with differentiated scientific, operational, and therapeutic expertise. And repeat means earning follow-on work through consistent execution and a better client experience. In the second quarter, that strategy continued to produce tangible progress. With $720.4 million in net new business weighted towards biotech, our book-to-bill was 1.06 tons, representing our fourth consecutive quarter above 1.0 times and resulting in a trailing 12-month book-to-bill of 1.12 times. Importantly, first half 2026 net new business awards increased 19% year over year, reinforcing that our progress is not limited to a single quarter but reflects sustained commercial momentum, particularly within biotech. We continue to see healthier activity levels across the pipeline and increased momentum as we engage our new biotech customers. The volume and value of RFPs issued in the second quarter increased across large pharma and biotech, including both new to Fortria and existing biotech clients. While book to bill can vary from quarter to quarter, The broader trend of elevated bookings gives me continued confidence that our commercial execution is improving. I want to highlight that our clinical pharmacology services business, or CPS, was an area of strength in the quarter. CPS continues to benefit from strong scientific capabilities, an integrated global network, and increasing demand from customers. As we have said before, this business burns faster than most later phase programs. So CPS Momentum continues to support revenue conversion as later phase program awards move through the project lifecycle. More importantly, it reinforces the value of differentiated scientific and operational expertise in helping sponsors advance therapies from the earliest stages of development. Stepping back, I would like to describe our commercial progress this way. The environment has become more supportive, but our results are not simply the result of market recovery. These are the results of deliberate action we have taken to strengthen commercial execution, including better coordination across our global teams, sharper focus on where we can win, and a clearer understanding of how we create value for different customer segments. Our second pillar is operational excellence. In a services business, consistency is paramount. Clients judge us not only for our ability to innovate, but for our ability to execute and deliver results. We help them with critical development questions. Can I move faster? Can I make better decisions? Can I see around the corner? Can you help us get to milestones with fewer surprises? That is where Fortria is focused. We are one of a small number of truly global CROs with the scaling capabilities to manage complex clinical development challenges. But scale alone is not enough. What matters is how we use that scale to deliver greater predictability, better quality, and a differentiated customer experience. We made continued progress in operations during the second quarter. We remained focused on project management, site activation, Enrollment Performance and Quality because those are the areas where consistent execution matters most. Our on-time delivery performance has remained a key differentiator, demonstrating our continued focus on execution quality and predictability for customers. Our customer satisfaction trajectory has continued to improve, reflecting the work our teams are doing every day to strengthen delivery discipline and client experience. A central part of our operational strategy is Fortrea Intelligent Technology, or FIT. FIT is our clinical trial intelligence ecosystem that integrates data, analytics, and machine learning. Risk Analytics, and AI across the clinical trial lifecycle. Since launching FIT externally in April, we have continued to expand its use across ongoing studies and new project starts. For example, our CRM mobile app is now deployed in more than 50 countries, with early results showing some meaningful efficiency gains, including reducing site visit preparation time, for example, by nearly 30 minutes per visit in one study in Spain. We are encouraged by the early adoption and remain confident as we scale the benefits globally. Our goal with AI is not automation for the sake of automation. It is to create a force multiplier for our people and our clients. Automation improves efficiency. Judgment improves outcomes. It does not replace the accountability Domain expertise and leadership that are essential to clinical development. That is why FIT is designed as an integrated platform strategy, bringing together trial execution, oversight, and intelligence. Our goal is to improve predictability, reduce cost to serve, safeguard quality, strengthen the way we partner with clients. Over time, we believe this will become an increasingly important differentiator Not because AI is separate from operations, but because it is embedded in how we execute. This is also why our people remain at the center of the strategy. We are a people business, and I am pleased about how strong our level of employee engagement remains across Portria. Our revenue stream, our quality, our client relationships, and our ability to innovate all depend on the expertise and judgment of our colleagues. We've equipped our nearly 14,000 employees with Microsoft Copilot on their desktops, and we've recently launched a comprehensive company-wide AI literacy program. These investments are not about replacing people. These investments are about giving our teams better tools so they can deliver with speed, consistency, and insight. We are taking a deliberate and responsible approach to AI adoption that meets our high standards and to enable every individual S4 Trader to be ready to develop their careers in an AI era. Now, let me turn to our third pillar, financial excellence. We continue to make progress on our journey to growth and margin expansion. In the second quarter, we delivered revenues of $678.2 million and adjusted EBITDA of $58.7 million. Results were supported in part by strong CPS performance, and we delivered adjusted EBITDA through a disciplined balance of cost management and targeted investment. We continue to drive the business with financial rigor. Some of our margin improvement is a result of cost actions and efficiency initiatives, but increasingly, the next phase of margin expansion will come from growth, mix improvement, and operating leverage. That is why commercial execution matters so much. Thank you for joining us. Let me address our improved financial guidance. Given the CFO transition, I will talk to her this quarter and Jill will focus her remarks on our second quarter performance. We increased our full year 2026 guidance and now expect revenue in the range of $2.62 billion to $2.69 billion and adjusted EBITDA in the range of $205 million These improvements reflect our solid performance in the first half of the year, driven by execution against an improving mix in our backlog, continued operational optimization, and our confidence in the business. Our capital allocation priorities remain unchanged, investing in organic growth, improving productivity, and continuing to delever. In short, we are strengthening Fortrea's financial position while investing in the capabilities that support sustainable growth. In closing, as I reflect on the quarter and nearly a year in the role, there are three takeaways I would like to emphasize. First, commercial excellence. Our momentum continues to build. We are seeing stronger engagement across pharma and biotech, continued progress on our three Rs, and solid new business wins that reflect the improving execution. Second, operational performance is strengthening the foundation of sustained profitable growth. We remain focused on delivering quality, predictability, and efficiency at scale, while embedding fit and AI-enabled capabilities as force multipliers across our workflows to enhance productivity, insight, and client outcomes. Third, financial discipline remains central to our transformation. We are on track to achieve our improved full-year guidance Managing costs carefully while investing with discipline to support growth and margin expansion. We also remain focused on the balance sheet and capital allocation, and we continue to expect positive free cash flow for the remainder of 2026 and for the full year. As we enter the second half of 2026, I'm encouraged by what we are seeing across the business. While there is still work to do, we are executing against a clear strategy, operating with greater discipline, and building momentum across our commercial, operational, and financial priorities. Most importantly, none of this would be possible without the dedication of our colleagues around the world. The progress we are making reflects their focus, resilience, and commitment to our clients and to patients. We are asking a great deal of this organization as we return to growth and our teams continue to respond with dedication, accountability, and energy. Now, before I turn the call over for our review of our second quarter financial results, I would like to recognize Jill for her exceptional leadership and the many contributions she has made to Fortrea over the past eight years, including leading the spin and building the financial foundation which sets Fortria up for further and future success. We are deeply grateful for her dedication, sound judgment and commitment to Fortria. Jill, I'll turn the call over to you to walk us through the results of the quarter.