Fortrea Holdings Inc.FTRE
Fortrea Holdings Inc. Revenue Disclosure
REVENUES
The Company’s revenues by geography for the years ended December 31, 2025, 2024 and 2023 are as follows:
| Years Ended December 31, 2025 | |||||||||||||||||||||||
| North America | Europe | Other | Total | ||||||||||||||||||||
| Revenues | $ | 1,289.6 | $ | 851.7 | $ | 582.1 | $ | 2,723.4 | |||||||||||||||
| Years Ended December 31, 2024 | |||||||||||||||||||||||
| North America | Europe | Other | Total | ||||||||||||||||||||
| Revenues | $ | 1,269.5 | $ | 800.0 | $ | 626.9 | $ | 2,696.4 | |||||||||||||||
| Years Ended December 31, 2023 | |||||||||||||||||||||||
| North America | Europe | Other | Total | ||||||||||||||||||||
| Revenues | $ | 1,398.4 | $ | 827.5 | $ | 616.6 | $ | 2,842.5 | |||||||||||||||
Revenue from the United States comprises substantially all revenue in North America.
Contract costs
The following table provides information about contract asset balances:
| December 31, 2025 | December 31, 2024 | ||||||||||
| Sales commission assets | $ | 21.4 | $ | 22.1 | |||||||
| Deferred contract costs | 0.4 | 1.1 | |||||||||
| Total | $ | 21.8 | $ | 23.2 | |||||||
Amortization related to sales commission assets for the years ended December 31, 2025, 2024 and 2023, was $11.9, $12.0 and $11.5, respectively. Amortization related to deferred contract costs for the years ended December 31, 2025, 2024 and 2023, was $0.7, $1.9 and $2.1, respectively. The 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 Unearned Revenue
The following table provides information about accounts receivable, unbilled services, and unearned revenue from contracts with customers:
| December 31, 2025 | December 31, 2024 | ||||||||||
| Accounts receivable | $ | 113.6 | $ | 156.5 | |||||||
| Unbilled services | 517.3 | 542.3 | |||||||||
| Less: allowance for credit losses | (41.2) | (39.3) | |||||||||
| Total | $ | 589.7 | $ | 659.5 | |||||||
| Unearned revenue | $ | 473.8 | $ | 353.3 | |||||||
Revenue recognized during the period, that was included in the unearned revenue balance at the beginning of the period, was $232.4, $155.5 and $176.4 for the years ended December 31, 2025, 2024 and 2023, respectively. Additionally, as of the year ended December 31, 2025, the Company had sold $300.0 of receivables as described in the Receivables Securitization Program section below.
Credit Loss Rollforward
The Company estimates future expected losses on accounts receivable and unbilled services over the remaining collection period of the instrument.
The rollforward for the allowance for credit losses for the years ended December 31, 2025 and 2024, is as follows:
| Allowance for credit losses as of December 31, 2023 | $ | 31.7 | |||
| Credit loss expense | 22.2 | ||||
| Write-offs | (14.6) | ||||
| Allowance for credit losses as of December 31, 2024 | 39.3 | ||||
| Credit loss expense | 12.0 | ||||
| Write-offs | (10.1) | ||||
| Allowance for credit losses as of December 31, 2025 | $ | 41.2 | |||
Performance Obligations Under Long-Term Contracts
As of December 31, 2025, approximately $4,632.1 of revenues are expected to be recognized in the future from remaining performance obligations. The Company expects to recognize approximately 29.3% of the remaining performance obligations as revenue over the next 12 months, and the remaining balance thereafter. The Company’s long-term contracts generally range from to eight years.
During the year ended December 31, 2025, there were reductions of approximately $16 in revenue related to performance obligations partially satisfied in previous periods. For the year ended December 31, 2025, the majority of the change was associated with changes in estimated effort to complete customer contract obligations and a smaller portion related to changes in scope or price. For the year ended December 31, 2025, the change in estimate resulted in an estimated reduction to revenue of $17, and an increase in loss from continuing operations of $17 and in loss per share of $0.19.
During the year ended December 31, 2024, there were reductions of approximately $61 in revenue related to performance obligations partially satisfied in previous periods. For the year ended December 31, 2024, the change was associated with both changes in estimated effort to complete customer contract obligations and changes in scope
or price. For the year ended December 31, 2024, the change in estimate resulted in an estimated reduction to revenue of $29, and an increase in loss from continuing operations of $29 and in loss per share of $0.33.
During the year ended December 31, 2023, there were reductions of approximately $60 in revenue related to performance obligations partially satisfied in previous periods. For the year ended December 31, 2023, substantially all of the change was associated with changes in scope or price for full service clinical studies. The gross and net amount of revenue recognized solely from changes in estimates was not material.
The Company applies the practical expedient and does not disclose information about remaining performance obligations where (i) the performance obligation is part of a contract that has an original expected duration of one year or less or (ii) when the Company recognizes revenue from the satisfaction of the performance obligation in accordance with the right-to-invoice practical expedient.
Accounts Receivable Purchase Program
On June 23, 2023, Fortrea entered into an accounts receivable purchase program (“ARPP”) with a financial institution (the “Financial Institution”). The ARPP established a receivables factoring facility whereby the Company could sell up to $80.0 in customer receivables based on the availability of certain eligible receivables and the satisfaction of certain conditions. Under the facility, the Company could sell eligible receivables and retain no interest in the transferred receivables other than collection and administrative functions for the Financial Institution.
The Company accounted for these receivable transfers as sales and derecognized the sold receivables from its balance sheets. The fair value of the sold receivables approximated their book value due to their short-term nature. The Company continued to service, administer and collect the receivables on behalf of the Financial Institution and did not receive a servicing fee as part of the arrangement. On June 28, 2023, $17.5 of receivables were sold with net proceeds of $17.3. The ARPP was terminated in May 2024, and there were no receivables outstanding as of the date of termination.
Receivables Securitization Program
On May 6, 2024, the Company entered into a three-year $300.0 accounts receivable securitization program (the “Receivables Facility”). Under this program, Fortrea Inc. conveys receivable balances to a wholly-owned, bankruptcy-remote special purpose entity (“SPE”), who in turn, may sell receivables to a third-party financial institution in exchange for cash. The facility is without recourse to the Company or any subsidiaries of the Company, other than with respect to limited indemnity obligations of Fortrea Inc., in respect to the character of the receivables sold and as to the performance of its duties as servicer and a limited performance guaranty by the Company. All unsold accounts receivables held by the SPE are pledged as collateral to secure the collectability of the sold receivables. The Receivables Facility is scheduled to terminate on May 6, 2027, unless terminated earlier pursuant to its terms.
As of December 31, 2025, the Company had sold $300.0 of receivables, which were derecognized from the Company’s consolidated balance sheet as described in the Accounts Receivable, Unbilled Services and Unearned Revenue section above. Total costs associated with the sale were $17.8 and $12.3 for the years ended December 31, 2025 and 2024, respectively, and are included within selling, general and administrative costs in the consolidated and combined statement of operations. The proceeds related to the Receivables Facility are reflected in cash from operating activities in the consolidated and combined statement of cash flows.
On February 24, 2026, the Company amended its Receivables Facility, which had been scheduled to terminate on May 6, 2027. The amended Receivables Facility is scheduled to terminate on February 23, 2029, unless terminated earlier pursuant to its terms.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Mar 3, 2025 | |
| 2023 | Mar 13, 2024 | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.