Financial Analysis

COMMITMENTS AND CONTINGENT LIABILITIES The Company is involved from time to time in various claims and legal actions arising in the ordinary course of business. These matters may include commercial and contract disputes, employee-related matters, and professional liability claims. In accordance with FASB ASC 450, Contingencies , the Company establishes reserves for claims and legal actions when those matters present loss contingencies that are both probable and estimable. When loss contingencies are not both probable and estimable, the Company does not establish reserves. The outcomes of such proceedings are inherently unpredictable and subject to significant uncertainties. When the Company determines that it has a meritorious defense to any claims asserted, the Company defends itself vigorously; however the Company also considers and enters into discussions regarding settlement of disputes, and may enter into settlement agreements, if in managements judgment, it is in the best interest of the Company to do so. For the three and six months ended June 30, 2025, the Company recorded legal expenses of $ and $1.9 related to the settlement of legal matters initiated prior to the Spin. Legal settlement expenses for the three and six months ended June 30, 2026 we re not significant. The Company does not believe that any liabilities resulting from claims and legal actions will have a material effect on its financial condition, results of operations or cash flows. On July 6, 2026, The …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

DEBT The current portion of long-term debt consisted of the following: June 30, 2026 December 31, 2025 Current portion of senior secured term loan A facility due 2028 $ 17.3 $ 4.8 Debt issuance discount and fees (0.2) Total current portion of long-term debt $ 17.1 $ 4.8 Long-term debt consisted of the following: June 30, 2026 December 31, 2025 7.5% senior notes due 2030 $ 494.3 $ 494.3 Senior secured term loan A due 2028 400.0 412.5 Senior secured term loan B due 2030 154.7 154.7 Debt issuance discount and fees (11.8) (13.5) Total long-term debt $ 1,037.2 $ 1,048.0 Senior Notes On June 27, 2023, the Company issued $570.0 aggregate principal amount of 7.50% senior notes due 2030 (the Notes). Interest on these notes is payable semi-annually on January 1 and July 1 of each year. Net proceeds from the offering of the Notes were $560.2 after deducting expenses of the offering. Credit Facilities On June 30, 2023, Fortrea entered into a credit agreement (as amended, the Credit Agreement) providing for (i) a senior secured revolving credit facility in the principal amount of up to $450.0; (ii) a five-year $500.0 first lien senior secured term A loan facility; and (iii) a seven-year $570.0 first lien senior secured term B loan facility. The initial revolving facility includes a $75.0 swingline sub-facility and a $75.0 letter of credit sub-facility. The Company drew on the term loan A and term loan B on June 30, 2023. The net proceeds received for the term A and term B loans were $491. …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The Companys revenues by geography for the three and six months ended June 30, 2026 and 2025 are as follows: Three Months Ended June 30, 2026 Three Months Ended June 30, 2025 North America Europe Other Total North America Europe Other Total Revenues $ 319.7 $ 219.7 $ 138.8 $ 678.2 $ 344.3 $ 218.7 $ 147.3 $ 710.3 Six Months Ended June 30, 2026 Six Months Ended June 30, 2025 North America Europe Other Total North America Europe Other Total Revenues $ 616.5 $ 433.6 $ 264.6 $ 1,314.7 $ 653.8 $ 419.0 $ 288.8 $ 1,361.6 …

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STOCK COMPENSATION PLANS The Company granted 0.4 and 2.3 restricted stock units, respectively, during the three and six months ended June 30, 2026 with weighted average grant date fair values of $15.45 and $10.54 per share. The Company granted and 0.9 performance stock units, respectively, during the three and six months ended June 30, 2026 with weighted average grant date fair values of $ and $11.66 per share. Total stock-based compensation expense and the associated income tax benefits recognized by the Company in the condensed consolidated statements of operations were as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Direct costs $ 8.2 $ 17.2 $ 16.3 $ 28.8 Selling, general and administrative expenses 4.4 5.5 7.7 8.5 Total stock compensation expense $ 12.6 $ 22.7 $ 24.0 $ 37.3 Income tax benefits $ 2.0 $ 3.1 $ 3.9 $ 5.4 …

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INCOME TAXES For the three months ended June 30, 2026 and 2025, the Company recognized income tax expenses of $12.0 and $4.2, respectively, which resulted in effective tax rates of (1000.0)% and (1.1)%, respectively. The effective tax rate for the three months ended June 30, 2026 was lower than the Companys statutory tax rate primarily due to an increase in valuation allowance, non-deductible compensation expenses, earnings taxed in jurisdictions with higher tax rates and withholding taxes for 2026 non-U.S. earnings that are not permanently reinvested. For the three months ended June 30, 2025, the Companys effective tax rate was lower than the Companys statutory tax rate primarily due to impairment of goodwill that has no tax benefit, an increase in valuation allowance of deferred tax assets, BEAT, non-deductible compensation expenses and withholding taxes for 2025 non-U.S. earnings that are not permanently reinvested. For the six months ended June 30, 2026 and 2025, the Company recognized income tax expense of $23.3 and $19.1, respectively, which resulted in effective tax rates of (172.6)% and (2.1)%, respectively. The effective tax rate for the six months ended June 30, 2026 was lower than the Companys statutory tax rate primarily due to an increase in valuation allowance, non-deductible compensation expenses, earnings taxed in jurisdictions with higher tax rates and withholding taxes for 2026 non-U.S. earnings that are not permanently reinvested. For the six months ended J …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Recently Issued and Adopted Accounting Standards In November 2024, the Financial Accounting Standards Board (FASB) issued ASU 2024-03, Income StatementReporting Comprehensive IncomeExpense Disaggregation Disclosures (Subtopic 220-40), Disaggregation of Income Statement Expenses. The new guidance requires disclosure of certain costs and expenses in the notes to the financial statements. This guidance is effective for fiscal years beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The disclosures required under the guidance can be applied either prospectively to financial statements issued for reporting periods after the effective date or retrospectively to any or all periods presented in the financial statements. The Company is currently evaluating the impact this guidance will have on its financial statement disclosures. In September 2025, the FASB issued ASU 2025-06, IntangiblesGoodwill and OtherInternal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The new guidance simplifies the accounting for internally developed software by replacing the existing phase-based capitalization model with a principles-based approach that focuses on managements authorization and the probability of project completion. The guidance is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years. Entities may apply t …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

RESTRUCTURING AND OTHER CHARGES In the fourth quarters of 2024 and 2025, the Company approved restructuring plans to streamline its operations and eliminate redundant positions. These plans, which relate primarily to severance benefits, were accounted for under ASC 712, Compensation - Nonretirement Postemployment Benefits . Actions under these restructuring plans are expected to continue through 2026. The following represents the Companys restructuring accrual activities for the periods indicated: Severance and Other Employee Costs Facility and Other Costs Total Balance as of December 31, 2025 $ 22.9 $ 0.5 $ 23.4 Restructuring charges 5.7 1.1 6.8 Cash payments and other adjustments (21.1) (1.1) (22.2) Balance as of June 30, 2026 $ 7.5 $ 0.5 $ 8.0 Severance and Other Employee Costs Facility and Other Costs Total Balance as of December 31, 2024 $ 23.1 $ 0.6 $ 23.7 Restructuring charges 8.8 1.4 10.2 Cash payments and other adjustments (17.9) (1.4) (19.3) Balance as of June 30, 2025 $ 14.0 $ 0.6 $ 14.6 The current portion of the restructuring liabilities is included in the condensed consolidated balance sheets in accrued expenses and other current liabilities. The non-current portion of the restructuring liabilities is included in the condensed consolidated balance sheets in other liabilities. The non-current portion of the restructuring liabilities as of June 30, 2026 and December 31, 2025 was $0.5 and $, respectively. …

RestructuringAndRelatedActivitiesDisclosureTextBlock · excerpt; the full note is in the filing

REVENUES The Companys revenues by geography for the three and six months ended June 30, 2026 and 2025 are as follows: Three Months Ended June 30, 2026 Three Months Ended June 30, 2025 North America Europe Other Total North America Europe Other Total Revenues $ 319.7 $ 219.7 $ 138.8 $ 678.2 $ 344.3 $ 218.7 $ 147.3 $ 710.3 Six Months Ended June 30, 2026 Six Months Ended June 30, 2025 North America Europe Other Total North America Europe Other Total Revenues $ 616.5 $ 433.6 $ 264.6 $ 1,314.7 $ 653.8 $ 419.0 $ 288.8 $ 1,361.6 Revenue from the United States comprises substantially all revenue in North America. Contract Costs The following table provides information about contract asset balances: June 30, 2026 December 31, 2025 Sales commission assets $ 18.7 $ 21.4 Deferred contract costs 0.2 0.4 Total $ 18.9 $ 21.8 Amortization related to sales commission assets for the three months ended June 30, 2026 and 2025 was $2.8 and $2.8, respectively, and for the six months ended June 30, 2026 and 2025 was $6.1 and $5.9, respectively. Amortization related to deferred contract costs for the three months ended June 30, 2026 and 2025 was $0.1 and $0.2, respectively, and for the six months ended June 30, 2026 and 2025 was $0.2 and $0.4, respectively. Th e Company applies the practical expedient to not recognize the effect of financing in its contracts with customers when the difference in timing of payment and performance is one year or less. Accounts Receivable, Unbilled Services and Unearne …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

BUSINESS SEGMENT INFORMATION The following table is a summary of segment information for the three and six months ended June 30, 2026 and 2025. The segment information is based upon the way the management of the Company organizes segments within an enterprise for making operating decisions and assessing performance. Financial information is reported on the basis that it is used internally by the chief operating decision maker (CODM) for evaluating segment performance and deciding how to allocate resources to segments. The Fortrea Chief Executive Officer has been identified as the CODM. The CODM allocates resources and assesses performance based on the underlying businesses which determines the Company's operating segments. When determining the reportable segments, the Company aggregated operating segments based on their similar economic and operating characteristics. The Company reports its business in one reportable segment: Clinical Services, which provides phase I-IV clinical trials, including clinical pharmacology and comprehensive clinical development capabilities. The measure of segment profit or loss that the CODM uses to evaluate performance and allocate resources is segment operating income. The CODM uses segment operating income to monitor budget versus actual results and to make decisions about resources to be allocated to the segment and assess its performance. In accordance with ASU 2023-07, Improvements to Reportable Segment Disclosures , significant expenses in …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

PREFERRED STOCK AND COMMON SHAREHOLDERS EQUITY The Company is authorized to issue up to 265.0 shares of common stock, par value $0.001 per share. The Company is authorized to issue up to 30.0 shares of preferred stock, par value $0.001 per share. There were no preferred shares outstanding as of June 30, 2026 and December 31, 2025. Stockholder Rights Plan On June 11, 2025, the Companys Board of Directors adopted a limited duration stockholder rights plan (the Rights Agreement). Pursuant to the Rights Agreement, on June 11, 2025, the Companys Board of Directors declared a dividend of one preferred share purchase right (a Right) for each share of common stock, par value $0.001 per share, of the Company (the Common Shares) outstanding on June 23, 2025 to the stockholders of record on that date. Each Right entitles the registered holder to purchase from the Company one one thousandth of a share of Series A Preferred Stock, par value $0.001 per share, of the Company (the Preferred Shares) at a price of $50.00 per one one thousandth of a Preferred Share represented by a Right, subject to adjustment. The Rights Agreement expired in accordance with its terms at the close of business on June 10, 2026. Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss are as follows: Foreign Currency Translation Adjustments Net Benefit Plan Adjustments Unrealized Gain (Loss) on Derivative Instruments Accumulated Other Comprehensive Loss Balance at December 31, 2 …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing