Fortrea Holdings Inc (NASDAQ:FTRE), a prominent global contract research organization, stock rose 1.62% (As on March 12, 12:19:29 AM UTC-4, Source: Google Finance) after the company posted mixed results for the fourth quarter of FY 23. However, the company faced a GAAP net loss of $(36.0) million in Q4 2023, compared to a net income of $33.4 million in Q4 2022. Adjusted EBITDA for the year was $267.3 million, down from $405.1 million in 2022. Despite these challenges, the company’s book-to-bill ratio stood at a robust 1.30x for the fourth quarter, indicating a healthy pipeline of future revenue.

Fortrea’s backlog as of December 31, 2023, was a substantial $7,392 million, providing visibility into future revenues. The backlog grew 3.6% sequentially. The company’s cash and cash equivalents were reported at $108.6 million, with gross debt at $1,624.7 million. Operating cash flow for the year was $167.4 million, and free cash flow was $127.1 million.

The company also announced the planned divestiture of its Endpoint Clinical and Fortrea Patient Access businesses to Arsenal Capital Partners, with a purchase price of $345 million, subject to adjustments. This transaction is expected to close in the second quarter of 2024.

FTRE in the fourth quarter of FY 23 has reported the adjusted earnings per share of 19 cents, missing the analysts’ estimates for the adjusted earnings per share of 23 cents. The company had reported the adjusted revenue growth of 1.8 percent to $775.4 million in the fourth quarter of FY 23, beating the analysts’ estimates for revenue of $768.3 million. However, the company experienced a GAAP net loss of $36.0 million, or -$0.41 per diluted share, a stark contrast to the net income of $33.4 million, or $0.38 per share, reported in Q4 of 2022. The adjusted EBITDA for the quarter was $67.2 million, down from $109.8 million YoY. Clinical services revenues of $709.7 million grew 1.7% year-on-year driven by higher pass-through revenues, partially offset by lower service fee revenues. The lower service fee revenues were due to the reduced quantity of new business wins during the spin year that ran from July 2022 through June 2023, along with a mixed shift of some studies moving to longer duration.

Looking ahead to 2024, Fortrea has set revenue targets ranging from $3,140 million to $3,205 million and adjusted EBITDA guidance between $280 million and $320 million.