Fortrea Holdings Inc (FTRE) 2024 Q3 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to Fortrea's third-quarter 2024 earnings conference call. (Operator instructions) Please be advised that today's conference is being recorded.

女士們、先生們，感謝你們的支持。歡迎參加 Fortrea 2024 年第三季財報電話會議。（操作員指示）請注意，今天的會議正在錄音。

I would like now to turn the conference over to Hima Inguva, Head of Investor Relations and Corporate Development. Please go ahead.

現在，我想將會議交給投資者關係和企業發展主管 Hima Inguva。請繼續。

Good morning. Thank you for joining Fortrea's third-quarter 2024 earnings conference call. I am Hima Inguva, Head of Investor Relations and Corporate Development at Fortrea. On the call with me today are our CEO, Tom Pike and CFO, Jim McConnell. The call is being webcasted, and the slides accompanying today's presentation have been posted to the Investor Relations page of our website fortrea.com.

早安.感謝您參加 Fortrea 2024 年第三季財報電話會議。我是 Hima Inguva，Fortrea 投資者關係和企業發展主管。今天與我一起參加電話會議的有我們的執行長湯姆派克 (Tom Pike) 和財務長吉姆麥康奈爾 (Jim McConnell)。該電話會議正在進行網路直播，今天演示的幻燈片已發佈到我們網站 fortrea.com 的投資者關係頁面上。

During this call, we'll make certain forward-looking statements within the meaning of 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.

在本次電話會議中，我們將根據 1995 年私人證券訴訟改革法案做出某些前瞻性陳述。這些聲明受重大風險和不確定性的影響，可能導致實際結果與我們目前的預期有重大差異。

We strongly encourage you to review these reports we 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 we posted to the website.

我們強烈建議您查看我們向美國證券交易委員會提交的有關這些風險和不確定性的報告。特別是我們在網站上發布的新聞稿和介紹中關於前瞻性陳述和風險因素的警示聲明中所描述的內容。

Please note that any forward-looking statements represent our views as of today, November 8, 2024, and that we assume no obligation to update the forward-looking statements even if estimates change. During this call, we'll also be referring to certain non-GAAP financial measures. These non-GAAP measures are not superior to or replacement for the comparable GAAP measures, but we believe these measures help investors gain a complete understanding of results.

請注意，任何前瞻性聲明均代表我們截至 2024 年 11 月 8 日的觀點，即使估計發生變化，我們也不承擔更新前瞻性聲明的義務。在本次電話會議中，我們也會參考某些非 GAAP 財務指標。這些非公認會計準則指標並不優於或取代可比較的公認會計準則指標，但我們相信這些指標有助於投資人全面了解結果。

A reconciliation of such non-GAAP financial measures to the most directly comparable GAAP measures is available in the earnings press release and earnings call presentation slides provided in connection with today's call.

這些非 GAAP 財務指標與最直接可比較的 GAAP 指標的對帳表可在今天的電話會議中提供的收益新聞稿和收益電話會議簡報幻燈片中找到。

With that, I'd like to turn it over to our CEO, Tom Pike. Tom?

接下來我想把發言權交給我們的執行長湯姆派克 (Tom Pike)。湯姆？

Good morning, everyone. Welcome to the call. Let me start by saying that Fortrea had a solid quarter of execution and progress on our strategic objectives. Our bookings landed well, and we delivered on other key metrics as anticipated. Fortrea, as you probably know, the pure play CRO serving Phases 1 through 4.

大家早安。歡迎來電。首先我要說的是，Fortrea 本季在執行和實現我們的策略目標方面表現穩健。我們的預訂情況良好，我們也達到了預期的其他關鍵指標。您可能知道，Fortrea 是一家服務於第 1 至第 4 階段的純粹 CRO。

We're a leading global provider of clinical pharmacology or Phase 1 development, functional service provision, which we call FSP and full-service outsourcing. Fortrea is broad and deep in how we address the market. We have preferred relationships with some large pharmaceutical firms and have broad exposure to biotech.

我們是全球領先的臨床藥理學或第一階段開發、功能服務提供供應商，我們稱之為 FSP 和全方位服務外包。Fortrea 在應對市場方面具有廣泛而深入的知識。我們與一些大型製藥公司建立了優先合作關係，並在生技領域擁有廣泛的經驗。

Our business overall is about 50, 50 between large pharma and biotechs. Our large pharma partners appreciate that we have sufficient scale to conduct clinical services almost anywhere in the world. The biotech customers value that were small enough to give our customers the personal attention they need to drive agile solutions.

我們的業務總體上是大型製藥公司和生物技術公司各佔一半。我們的大型製藥合作夥伴欣賞我們擁有足夠的規模，可以在世界幾乎任何地方開展臨床服務。生物技術客戶的價值足夠小，以便為我們的客戶提供推動敏捷解決方案所需的個人關注。

Both types of customers value our 30 years of experience and expertise. Since Fortrea spun out of our parent, our customer and Net Promoter Scores have improved, especially recently. We're getting external recognition too.

這兩類客戶都看重我們 30 年的經驗和專業知識。自從 Fortrea 從母公司分離後，我們的客戶和淨推薦值都有所提高，尤其是最近。我們也得到了外界的認可。

This quarter, PharmaTimes recognized a number of (inaudible) for the great work, including an in-house CRA Global Project Manager and other roles. In addition, Fortrea has just been named a finalist in Fierce Healthcare's excellence and data-driven DEI award for our DEI dashboard.

本季度，PharmaTimes 表彰了許多 (聽不清楚) 的傑出工作，包括內部 CRA 全球專案經理和其他職位。此外，Fortrea 剛剛憑藉我們的 DEI 儀表板被提名為 Fierce Healthcare 卓越和數據驅動 DEI 獎的決賽入圍者。

We're also a finalist in the CRO of the Year category in the annual script awards. Both awards will be announced in early December. All that is pretty incredible, given we've only been independent for 16 months. Now here are some highlights for execution and progress during the quarter.

我們也是年度劇本獎年度 CRO 類別的決賽入圍者。兩個獎項將於 12 月初公佈。考慮到我們獨立才 16 個月，這一切都太不可思議了。以下是本季度執行和進展的一些亮點。

We achieved a book-to-bill of 1.23 for the quarter. We closed a number of important projects with larger pharmaceutical customers, and we had success with biotechs. Our pipeline of opportunities for the next two quarters is solid. Our exit from our foreign parent is nearly in sight with over 90% of the servers and application systems migrated to our independent Fortrea environment.

本季度，我們的訂單出貨比達到 1.23。我們與大型製藥客戶完成了許多重要項目，並且在生物技術方面也取得了成功。我們未來兩個季度的機會管道非常充足。我們退出海外母公司的日子已近在眼前，超過90%的伺服器和應用系統已遷移到我們獨立的 Fortrea 環境。

Our EBITDA and revenue were in line with our expectations. And finally, we continue to uncover why this business has underperformed financially and the people, process and technology required to fix that.

我們的 EBITDA 和收入符合我們的預期。最後，我們繼續揭示該企業財務表現不佳的原因，以及解決該問題所需的人員、流程和技術。

As usual, I'll provide some detail on some of these highlights and Joe will fill in with others. Last quarter, I discussed a new large pharma relationship and some footholds, as we call them, of work in other larger companies. This quarter, we made progress getting started with these customers, including responding to some early requests for proposals.

像往常一樣，我將詳細介紹其中一些亮點，而喬則會補充其他內容。上個季度，我討論了一種新的大型製藥公司關係以及我們所說的在其他大型公司工作的立足點。本季度，我們在與這些客戶的合作方面取得了進展，包括回應一些早期的提案請求。

For instance, one of the footholds resulted in an attractive full service engagement. This project is a significant Phase 3 trial that Fortrea one based on our therapeutic expertise in the specific area and our deep investigator relationships. Some other larger projects also came through as planned from long-time larger customers.

例如，其中一個立足點帶來了頗具吸引力的全方位服務。該計畫是 Fortrea 的一項重要的 3 期試驗，基於我們在特定領域的治療專業知識和與研究人員的深厚關係。一些其他較大的項目也按計劃由長期大客戶完成。

Biotech companies also featured strongly in our full service wins in the third quarter across a number of therapeutic areas. We have key biotech wins in oncology, diabetes, dermatology and autoimmune disease. While we're known for our oncology expertise across our customer mix, we continue building a strong position in other areas such as ophthalmology, where expertise in wet AMD and gene therapy skills are seen as a strong differentiator.

生物科技公司在我們第三季度在多個治療領域的全方位服務中也表現出色。我們在腫瘤學、糖尿病、皮膚病學和自體免疫疾病領域取得了重要的生物技術成果。雖然我們在整個客戶群中以腫瘤學專業知識而聞名，但我們仍在眼科等其他領域繼續建立強勢地位，在這些領域，濕性 AMD 和基因治療技能方面的專業知識被視為強大的差異化因素。

Fortrea's real-world evidence consultants and scientists won several virtually designed observational studies in the Asia Pac region for different pharma customers. Our consulting and science help us differentiate. Our clinical pharmacology business continues to have strong bookings with attractive book-to-bills, customers and indications.

Fortrea 的真實世界證據顧問和科學家在亞太地區為不同的製藥客戶贏得了幾項虛擬設計的觀察性研究。我們的諮詢和科學幫助我們脫穎而出。我們的臨床藥理學業務繼續擁有強勁的訂單，具有誘人的訂單出貨比、客戶和適應症。

As we've discussed in the past and with analysts, our lead executive for CPS saw some softness in biotech around the time of the spin and has successfully transformed the mix to ensure a strong pipeline of attractive opportunities.

正如我們過去和分析師討論過的那樣，我們的 CPS 執行長在分拆期間看到了生物技術領域的一些疲軟，並成功地改變了組合，以確保擁有強大的吸引力機會。

That team has been particularly successful with larger pharmaceutical firms who are spending. Our CPS business also continues to have a solid pipeline of qualified new business with biotech customers. For instance, this quarter, we secured an important contract with a new biotech customer for a Phase 1 study supporting its Alzheimer's program. What was significant about this award is that we are initially not selected for the program, but were able to unseat the incumbent CRO because of our solutions focus and expertise in the area.

該團隊在與大型製藥公司的合作中取得了特別大的成功。我們的 CPS 業務也繼續與生物技術客戶保持穩定的合格新業務管道。例如，本季度，我們與一家新的生物技術客戶簽訂了一份重要合同，為支持其阿茲海默症計畫的第一階段研究。該獎項的重要意義在於，我們最初並未被選中參與該項目，但由於我們專注於解決方案且在該領域擁有專業知識，我們得以取代現任 CRO。

Our experience with complex programs in CPS helps us transition our strong relationships in Phase 1 into Phase 1b and 2. As we discussed last time, we're making progress there with an increasing win rate. We also continue to press ahead with some productivity and innovative technology projects. We have a nice tool that's used by Fortrea and a couple of pharmaceutical firms for study oversight and optimization. We showed our road map to customers and several prospects this quarter and generated a lot of excitement.

我們在 CPS 中處理複雜專案的經驗幫助我們將第 1 階段的牢固關係過渡到第 1b 階段和第 2 階段。正如我們上次討論的那樣，我們正在取得進展，勝率不斷提高。我們也持續推進一些生產力和創新技術項目。我們有一個很好的工具，Fortrea 和一些製藥公司用它來進行研究監督和優化。本季度，我們向客戶和一些潛在客戶展示了我們的路線圖，並引起了極大的興奮。

AI and ML is being added to try to improve predictability and utility to that tool. We're also looking at some other interesting applications of technology made tools, AI tools in practical complex areas such as protocols and amendments, SOPs, CRA copilot tool and continuous data cleaning.

正在添加 AI 和 ML，以嘗試提高該工具的可預測性和實用性。我們也正在研究技術工具、人工智慧工具在實際複雜領域中的一些其他有趣的應用，例如協議和修正案、SOP、CRA副駕駛工具和持續資料清理。

Now let me address the questions I anticipate you will ask about our second half bookings. As we told you, going into the third quarter, our pipeline was higher than the average of the prior three quarters with a nice mix of large pharma and biotech.

現在，讓我來回答一下我預計您會問到的有關我們下半年預訂的問題。正如我們所說的，進入第三季度，我們的產品線高於前三個季度的平均水平，其中大型製藥公司和生物科技公司的組合非常好。

Coming into the fourth quarter, the same metric held and the pipeline was greater than the average of the prior three quarters. Consistent with our Q2 commentary, we continue to target a 1.2times book-to-bill for the second half. We know that we need to execute through the quarter. Regarding revenue and adjusted EBITDA in light of the backdrop of spin-related complexity, I'm pleased with our execution.

進入第四季度，指標保持不變，且通路數量高於前三個季度的平均值。與我們第二季的評論一致，我們繼續將下半年的訂單出貨比目標定為 1.2 倍。我們知道我們需要在整個季度內完成。至於收入和調整後的 EBITDA，考慮到與分拆相關的複雜背景，我對我們的執行情況感到滿意。

In addition to a strong quarter for new business, we delivered on expectations of revenues. We also continued to expand our margin, delivering EBITDA as we expected. We know that we have continued work to do, but we're making progress.

除了本季新業務表現強勁之外，我們的營收也達到了預期。我們的利潤率也持續提高，實現了預期的 EBITDA。我們知道我們還有很多工作要做，但我們正在取得進展。

Let me hand over to Jill, then I'll wrap up with some comments about the remainder of the year. Jill?

讓我把時間交給吉爾，然後我會總結一下今年剩餘時間的一些評論。吉爾？

Thank you, Tom, and thank you to everyone for joining us today. As a reminder, all my remarks relate to continuing operations of Fortrea following the divestiture of our enabling services businesses, unless I note otherwise.

謝謝你，湯姆，也謝謝大家今天的參加。提醒一下，除非另有說明，我的所有言論均與 Fortrea 在我們的支援服務業務剝離之後繼續運作有關。

I'll start by saying that this quarter has delivered as we expected. Revenues of $674.9 million declined 5.4% year-on-year. The reduction versus the prior year was driven by lower service fee and pass through revenues. Our service fee revenue continues to be impacted by a combination of factors, primarily lower new business awards in the pre-spin period along with the mix of later stage and longer duration studies in our portfolio.

首先我想說的是，本季的表現符合我們的預期。營收6.749億美元，年減5.4%。與前一年相比，收入減少是由於服務費和轉嫁收入下降。我們的服務費收入繼續受到多種因素的影響，主要是旋轉前時期的新業務獎勵較低以及我們投資組合中後期和長期研究的組合。

The pass-through decline is driven by lower pass-throughs on the biomarker study we have previously called out, which is continuing to normalize given its stage in the project life cycle. On a GAAP basis, direct costs in the quarter decreased 6.6% year-over-year primarily due to lower personnel costs as well as lower pass-through costs, partially offset by an increase in stock compensation and professional fees.

傳遞率下降是由於我們先前提到的生物標記研究的傳遞率較低所致，考慮到其在專案生命週期中的階段，該研究的傳遞率正在繼續正常化。根據 GAAP 計算，本季直接成本年減 6.6%，主要原因是人員成本和轉嫁成本降低，但股票薪資和專業費用的增加部分抵消了下降。

SG&A in the quarter was higher year-over-year by 27.6%, primarily due to an increase in professional fees and incremental onetime costs incurred for exiting the TSA along with the yield costs related to the receivable securitization program we initiated in the second quarter. The company reclassified $39 million from direct costs to SG&A expense in the prior year comparison period primarily related to information technology costs and certain non-clinic facility charges.

本季的銷售、一般及行政費用年增 27.6%，主要原因是專業費用增加和退出 TSA 產生的增量一次性成本以及與我們在第二季度啟動的應收帳款證券化計劃相關的收益成本。該公司將去年同期的 3,900 萬美元從直接成本重新歸類為銷售、一般及行政費用，主要與資訊科技成本和某些非診所設施費用有關。

For the third quarter, you will see SG&A as a percent of revenue on a GAAP basis at 20.2%. However, if you exclude the impact of approximately $27 million of onetime costs related to the continued separation from our former parent and the incremental impact of a full quarter's worth of expense related to the yield cost, underlying SG&A as a percent of revenue was consistent with the last two quarters.

對於第三季度，您將看到銷售、一般及行政開支佔 GAAP 計算的收入的百分比為 20.2%。但是，如果排除與前母公司持續分離產生的約 2700 萬美元一次性成本的影響，以及與收益成本相關的整個季度費用的增量影響，則銷售、一般及行政開支佔收入的百分比與前兩個季度一致。

Net interest expense for the quarter was $22.4 million, a decrease of $12.2 million versus the prior year. Benefiting from the repayments we made on the Term Loan A and Term Loan B during the second quarter. When looking at annualized interest expense using outstanding debt, securitization usage and rates in effect during the third quarter 2024, annual total cash interest and securitization costs are estimated to be approximately 18% lower compared to the annualized costs we were incurring at the start of 2024.

本季淨利息支出為 2,240 萬美元，較上年減少 1,220 萬美元。受益於我們第二季償還的定期貸款 A 和定期貸款 B。當使用未償還債務、證券化使用情況和 2024 年第三季有效的利率來查看年度化利息支出時，估計年度總現金利息和證券化成本與我們在 2024 年初產生的年度化成本相比低約 18%。

Turning to our tax rate. The effective tax rate for continuing operations for the quarter was a benefit of 48.3%, reflecting an updated split of domestic versus foreign earnings relative to our latest forecast. During the third quarter, we recognized a tax benefit of $17.3 million in continuing operations, primarily due to this update and forecasted pretax loss, partially offset by a valuation allowance on our deferred tax asset related to the carryforward of disallowed interest expense.

談談我們的稅率。本季持續經營的有效稅率為 48.3%，反映了相對於我們最新的預測，國內與國外收益的最新分配。在第三季度，我們確認了持續經營業務中 1730 萬美元的稅收優惠，主要由於此次更新和預測的稅前虧損，但部分被與結轉不允許的利息費用相關的遞延所得稅資產的估值準備金所抵消。

We continue to consider initiatives that we expect could improve our overall tax position over time. Our book-to-bill for the quarter was 1.23 times and for this trailing 12 months is 1.15 times. Our backlog at around $7.6 billion has grown 6.2% over the past 12 months. Adjusted EBITDA for the quarter of $64.2 million decreased 5.9% year-over-year compared to adjusted EBITDA of $68.2 million in the prior year period.

我們將繼續考慮一些預計可以隨著時間的推移改善我們的整體稅收狀況的措施。我們本季的訂單出貨比為 1.23 倍，過去 12 個月的訂單出貨比為 1.15 倍。我們的積壓訂單約為 76 億美元，過去 12 個月成長了 6.2%。本季調整後 EBITDA 為 6,420 萬美元，較去年同期的 6,820 萬美元下降 5.9%。

Note that adjusted EBITDA increased 16.3% on a sequential basis, in line with our expectations. Adjusted EBITDA margin for the third quarter was 9.5%, compared to 9.6% in the prior year period. Adjusted EBITDA margin in the quarter was negatively impacted by the lower service fee revenues in the quarter, along with higher SG&A costs post spin to support operations as a public company. These were partially offset by the benefit from the restructuring program we initiated in the third quarter of 2023, which was continued into 2024.

請注意，調整後的 EBITDA 環比增長 16.3%，符合我們的預期。第三季調整後 EBITDA 利潤率為 9.5%，去年同期為 9.6%。本季調整後的 EBITDA 利潤率受到本季服務費收入下降以及分拆後為支持上市公司營運而增加的銷售、一般及行政費用的負面影響。這些收益被我們在 2023 年第三季啟動的重組計劃所帶來的收益部分抵消，該計劃將持續到 2024 年。

In the third quarter of 2024, adjusted net income of $20.7 million increased 3% compared to adjusted net income of $20.1 million in the prior year period. Adjusted and net income for both basic and diluted share for the current quarter and the prior year period was $0.23.

2024 年第三季度，調整後淨收入為 2,070 萬美元，較去年同期的調整後淨收入 2,010 萬美元成長 3%。本季度和去年同期的基本和稀釋每股淨利潤調整後均為 0.23 美元。

Turning to customer concentration. Our top 10 customers represented 51% of third quarter 2024 revenues. One customer accounted for 15.1% of revenues. As I comment on cash flow, note these relate to Fortrea in total as we have not segregated cash flows from discontinued operations. For the nine months ended September 30, 2024, we reported $245.7 million in cash flow from operating activities compared to $150 million generated in the prior year.

轉向客戶集中度。我們的十大客戶佔 2024 年第三季營收的 51%。一位客戶貢獻了15.1%的收入。當我評論現金流時，請注意這些與 Fortrea 總體相關，因為我們沒有將現金流與已停止的經營業務分開。截至 2024 年 9 月 30 日的九個月，我們報告的營運活動現金流為 2.457 億美元，而前一年為 1.5 億美元。

Cash flow benefited from the sale of receivables under the securitization facility and an increase in unearned revenue, partially offset by the decrease in net income. Free cash flow was $217 million compared to $119.1 million in the first nine months of 2023. Net accounts receivable and unbilled services for continuing operations were $689.1 million as of September 30, 2024, compared to $988.5 million as of December 31, 2023.

現金流受益於證券化工具下應收帳款的出售和未賺取收入的增加，但部分被淨收入的減少所抵銷。自由現金流為 2.17 億美元，而 2023 年前 9 個月為 1.191 億美元。截至 2024 年 9 月 30 日，持續經營的淨應收帳款和未開票服務為 6.891 億美元，而截至 2023 年 12 月 31 日為 9.885 億美元。

Days sales outstanding from continuing operations was 50 days as of September 30, 2024, 4 days lower than June 30, 2024. The reduction versus the second quarter is primarily due to reductions in our unbilled services balance if we continue to enhance our contracting terms and processes.

截至 2024 年 9 月 30 日，持續經營應收帳款天數為 50 天，比 2024 年 6 月 30 日減少 4 天。與第二季度相比的減少主要是由於如果我們繼續加強合約條款和流程的話，我們的未開票服務餘額會減少。

We continue to make changes to our contracting and order to cash processes to enable further improvement to our DSO profile over time. We are fully compliant with the financial maintenance covenant of our credit agreement as of the end of the quarter. We ended the quarter with more than $0.5 billion of liquidity.

我們將繼續對我們的合約和訂單到現金流程進行改變，以便隨著時間的推移進一步改善我們的 DSO 狀況。截至本季末，我們完全遵守信用協議的財務維護契約。本季結束時，我們的流動資金超過 5 億美元。

Our capital allocation priorities are unchanged, focusing in the near term on infrastructure investments for timely exit of the transition services agreement with our former parent, targeting investments to drive organic growth and improve productivity and then debt repayment.

我們的資本配置重點保持不變，短期內將重點放在基礎設施投資，以便及時退出與前母公司達成的過渡服務協議，投資目標是推動有機成長、提高生產力，然後償還債務。

Now, I will provide an update on our transformation program. We continue to make progress on our journey towards improving the longer-term growth and profitability of Fortrea. Our competitive approach to winning new business awards is a primary objective of our entire leadership team and we regularly leverage their relationships and experiences to enhance our partnerships with our customers.

現在，我將介紹我們轉型計劃的最新進展。我們在提高 Fortrea 的長期成長和獲利能力方面不斷取得進展。我們以競爭性的方式贏得新業務獎項是我們整個領導團隊的主要目標，我們定期利用他們的關係和經驗來加強與客戶的合作關係。

On operational execution, our first priority is delivering high-quality work for our customers. We continue to execute on productivity improvements and actions that speed our time to study start-up and milestone delivery.

在營運執行方面，我們的首要任務是為客戶提供高品質的工作。我們將繼續執行生產力改進措施並採取行動，以加快我們研究啟動和里程碑交付的時間。

At the same time, there are specific areas that we believe require measured investments to ensure revenue growth and enhance operational effectiveness. For example, we are making select investments in our commercial organization, certain operational areas and parts of SG&A.

同時，我們認為有些特定領域需要適度的投資，以確保收入成長並提高營運效率。例如，我們對我們的商業組織、某些營運領域和部分銷售、一般及行政開支進行選擇性投資。

We know that given our current margins, we need to deliver savings elsewhere to fund these investments. We expect to exit the vast majority of the TSA services by year-end, with a limited number being exited early in 2025 to ensure business continuity through 2024 year-end. We are continuing with targeted programs to reduce costs, including programs intended to better align our resources with the needs of specific projects while reducing pockets of lower productivity.

我們知道，鑑於我們目前的利潤率，我們需要從其他地方節省開支來資助這些投資。我們預計在年底前退出絕大多數 TSA 服務，並在 2025 年初退出有限數量服務，以確保業務連續性到 2024 年底。我們將繼續實施有針對性的計劃來降低成本，包括旨在使我們的資源更好地與具體項目的需求相匹配，同時減少生產力較低的環節的計劃。

The improvement in overall adjusted EBITDA this quarter is attributable largely to these programs. We are continuing with our plans to reduce SG&A costs across our supporting functions. We expect the benefit from these to ramp up during 2025, as we believe that full independence from our former parent will enable us to deliver these functions in more efficient ways versus how they were historically delivered.

本季整體調整後 EBITDA 的改善主要歸功於這些計劃。我們將繼續執行計劃，降低所有支援職能部門的銷售、一般及行政費用。我們預計這些利益將在 2025 年期間增加，因為我們相信，完全獨立於前母公司將使我們能夠以比過去更有效的方式履行這些職能。

Regarding 2024 guidance, we have updated our revenue guidance range to $2.7 billion to $2.725 billion. The reduction in the top end of the range is primarily driven by lower trends in pass-throughs, consistent with what I discussed earlier.

關於 2024 年指引，我們已將收入指引範圍更新為 27 億美元至 27.25 億美元。範圍高端的減少主要是由於傳遞趨勢的下降所致，這與我之前所討論的一致。

Our adjusted EBITDA guidance range of $220 million to $240 million remains unchanged. There are a number of moving parts that we are navigating and managing closely, such as the transition of key internal IT systems and devices in and around the fourth quarter. These technology transitions do not impact customer facing systems.

我們的調整後 EBITDA 預期範圍為 2.2 億美元至 2.4 億美元，維持不變。我們正在密切關注和管理許多活動部件，例如第四季度及前後關鍵內部 IT 系統和設備的過渡。這些技術轉變不會影響面向客戶的系統。

We expect to provide 2025 guidance in the first quarter of 2025. Building our backlog, along with efforts to drive margin expansion, continue to be the primary focus of our leadership team. I'm not commenting specifically on 2025 targets as they will be informed by the exact timing of exiting the TSA services from our former parent, along with having more certainty on fourth quarter net new business awards and a better sense of the pipeline of opportunities heading into 2025.

我們預計在 2025 年第一季提供 2025 年指引。增加訂單量以及努力提高利潤率仍然是我們領導團隊的首要關注點。我並沒有特別評論 2025 年的目標，因為它們將取決於我們前母公司退出 TSA 服務的具體時間，以及對第四季度淨新業務獎勵的更多確定性和對 2025 年機遇渠道的更好了解。

Before I conclude, I want to take a moment to acknowledge the significant progress our teams are making towards fully exiting the transition services agreement, as well as to build the new infrastructure that will enable us to operate more efficiently and effectively. As Tom mentioned, more than 90% of our IT applications and servers have been transitioned and the teams leading our HCM and ERP implementations are on track for their respective December and January go live date.

最後，我想花點時間來承認我們的團隊在全面退出過渡服務協議以及建立新的基礎設施以使我們能夠更有效率、有效地運作方面所取得的重大進展。正如湯姆所提到的，我們的 90% 以上的 IT 應用程式和伺服器已經完成轉換，領導我們的 HCM 和 ERP 實施的團隊正在按計劃完成 12 月和 1 月的上線工作。

It's easy to think, okay, what's next? But this demonstrates that our teams have the determination and agility to execute difficult tasks under challenging circumstances. This effort, combined with the work we've done to strengthen our capital position is laying the foundation for the long-term growth and profitability of Fortrea.

很容易想到，好吧，下一步是什麼？但這顯示我們的團隊有決心和敏捷性，能夠在充滿挑戰的情況下執行艱鉅的任務。這項努力加上我們為加強資本狀況所做的工作為 Fortrea 的長期成長和利潤奠定了基礎。

There is still work to be done, but we are putting building blocks in place to create long-term value for all of our stakeholders. With the solid foundation we have laid in the past year, attractive backlog of nearly $7.6 billion and a talented global team of more than 15,500 professionals, we are committed to longer-term growth and margin expansion.

仍有工作要做，但我們正在奠定基礎，為所有利害關係人創造長期價值。憑藉過去一年打下的堅實基礎、近 76 億美元的可觀積壓訂單以及由 15,500 多名專業人員組成的全球優秀團隊，我們致力於實現更長期的增長和利潤率的提高。

Our commitment to execution, along with our focus on innovation and customer satisfaction, as shown by our improving NPS scores, are unlocking new opportunities, enhancing our position in the market. We are confident in our ability to improve margins and deliver significant value for our customers, employees and shareholders over time.

我們致力於執行，注重創新和客戶滿意度，這從我們不斷提高的 NPS 分數可以看出，正在釋放新的機遇，增強我們在市場上的地位。我們相信，我們有能力隨著時間的推移提高利潤率並為我們的客戶、員工和股東創造巨大的價值。

Now I'll turn it back to Tom for the remainder of his remarks.

現在我將把剩餘發言權轉回給湯姆。

Thank you, Jill. In closing, let me provide a few thoughts about the remainder of the year. Regarding the fourth quarter of 2024, as I mentioned, our pipeline of opportunities has grown and has sufficient large pharma, which should be more predictable.

謝謝你，吉爾。最後，讓我談談對今年剩餘時間的一些想法。關於 2024 年第四季度，正如我所提到的，我們的機會管道已經成長並且擁有足夠的大型製藥公司，這應該是更可預測的。

We're targeting a 1.2 book-to-bill in the second half. We have looked at qualified opportunities for Q1 and feel it is solid at this point. Our customer systems, such as Veeva and Medidata, are already transitioning in production in Fortrea's environment.

我們的目標是下半年訂單出貨比達到1.2。我們已經研究了第一季的合格機會，並認為目前它是可靠的。我們的客戶系統，例如 Veeva 和 Medidata，已經在 Fortrea 的環境中投入生產。

I'll be excited to see our new ERP system implemented this quarter. Next year, our hardworking teams will turn their attention to making improvements for Fortrea. Moving to customers. I had a number of senior level meetings with our larger pharma customers this quarter and got consistent reports of the strong job our teams are doing.

我很高興看到我們本季實施的新 ERP 系統。明年，我們勤奮的團隊將致力於 Fortrea 的改進。轉向客戶。本季度，我與我們較大的製藥客戶舉行了多場高層會議，並獲得了關於我們團隊出色工作的一致報告。

While the environment is uncertain for some larger pharma organizations causing companies to increase or decrease their spend in R&D, we're doing our best to help them through whatever they need to do. I've also met with many biotech prospects and customers and the Fortrea teams are delivering their well as well.

雖然一些大型製藥公司面臨的環境不確定，導致公司增加或減少在研發方面的支出，但我們正在盡最大努力幫助他們完成他們需要做的一切。我還會見了許多生物技術潛在客戶和客戶，Fortrea 團隊也表現出色。

They're bullish on their therapeutic assets and know Fortrea can provide top quality data packages for regulators. We provide multiple executive touch points to help them achieve their goals, often complex goals with clinical research.

他們對自己的治療資產充滿信心，並知道 Fortrea 可以為監管機構提供最優質的數據包。我們提供多個執行接觸點來幫助他們實現目標，通常是透過臨床研究實現的複雜目標。

In Q3, we published our inaugural corporate social responsibility report, underscoring our commitment to safety, environmental stewardship, fairness and ethical governance in everything that we do. In summary, Fortrea had a solid quarter of execution progress, we're well positioned for growth and value creation in the future.

在第三季度，我們發布了首份企業社會責任報告，強調了我們在所做的每一件事中對安全、環境管理、公平和道德治理的承諾。總而言之，Fortrea 本季的執行進展穩健，我們為未來的成長和價值創造做好了準備。

I would like to recognize our Fortrea team around the world. It can be challenging to balance the competing demands of working in a 30-year-old company with the needs and energy of a startup. Our team is committed to customers and the important work of developing solutions that bring treatments to patients sooner. I'm proud of what we've achieved so far and remain excited about what we can deliver in the years ahead. Operator, can you please open the line up for questions? Thank you.

我想表揚我們遍布世界各地的 Fortrea 團隊。平衡一家擁有 30 年歷史的公司的工作需求與新創公司的需求和活力，是一項挑戰。我們的團隊致力於客戶和開發解決方案的重要工作，以便更快地為患者提供治療。我對我們迄今所取得的成就感到自豪，並對我們在未來幾年所能取得的成就感到興奮。接線員，您可以打開熱線來回答問題嗎？謝謝。

Thank you. (Operator instructions)

謝謝。（操作員指令）

Eric Coldwell, Baird.

埃里克·科爾德威爾，貝爾德。

Thanks very much. Good morning. Good job to pull in 3Q as you did. I wanted to ask about clinpharm in particular. You have quite a few studies going in your various units. They're not all diabetes and weight loss, but there are quite a few of them.

非常感謝。早安.能夠像你一樣取得 3Q 成績，真是不錯。我想特別詢問有關 clinpharm 的問題。你們各部門都有相當多的研究正在進行中。它們並不全都與糖尿病和減肥有關，但也有很多是相關的。

I'm curious if you could talk about what the nature of studies of, how that's transitioned this year? Is clinpharm really getting a lift because of the GLP-1 type category or are you seeing strength in other therapeutic categories as well? What's your overall read on how strong the overall Phase 1 market is?

我很好奇，您能否談談研究的性質以及今年的研究如何轉變？Clinpharm 是否真的因為 GLP-1 類型類別而獲得提升，還是您也看到了其他療程類別的優勢？您對第一階段的整體市場表現如何有什麼看法？

Yes, I think I'd start by saying that One of the things we think about here at Fortrea is given our size and given our breadth, we do have a different kind of exposure than the largest CROs to the marketplace. And the exposure we have is to some attractive large pharmaceutical firms in Phase 1 in particular as well as the biotech around the world.

是的，我想首先要說的是，在 Fortrea 我們考慮的事情之一是，鑑於我們的規模和廣度，我們與市場上最大的 CRO 相比，有著不同的風險敞口。我們的投資對象主要是第一階段的一些具有吸引力的大型製藥公司以及世界各地的生技公司。

And so the combination of those two, we've kind of replaced that business in terms of how we target ourselves in the market. And we're really trying to target those organizations that are spending well. Interestingly, Eric, it's, we do some work on GLP-1, but we also have broad exposure across the business.

因此，從我們的市場定位來看，將這兩者結合起來，我們在某種程度上取代了那項業務。我們確實在努力瞄準那些支出充足的組織。有趣的是，Eric，我們在 GLP-1 方面做了一些研究，但我們在整個業務領域也有廣泛的接觸。

As I mentioned, and actually, I had another point that I didn't add in an interesting autoimmune compound that we have. in the UK that we're working on. We have a wide variety of things that we work through. So it's actually less GLP-1 oriented, and it's more oriented across a wide array of sophisticated scientific therapies.

正如我所提到的，實際上，我還有另一點，我沒有添加我們所擁有的有趣的自身免疫化合物。我們正在英國進行這項工作。我們要處理各種各樣的事情。因此，它實際上不太注重 GLP-1，而更注重各種複雜的科學療法。

That's good to hear. And Tom, you mentioned the win rate was up, the Net Promoter scores up. Are there any stats or metrics you could give us around those?

我很高興聽到這個消息。湯姆，您提到勝率上升了，淨推薦值也上升了。您能為我們提供相關統計數據或指標嗎？

That specifics because then you'll ask me next time and (Laughter). But we basically have win rates that are up since the spin year, our CPS win rates are quite good and in particular, as we were talking about it. And, so I think, and the Net Promoter Scores have also taken returns for the better since we spun. So we're pretty proud of those things as we move forward.

那具體一點，因為下次你會問我（笑聲）。但基本上，自旋轉年以來，我們的勝率一直在上升，我們的 CPS 勝率相當不錯，特別是正如我們所談論的那樣。所以我認為，自從我們旋轉以來，淨推薦值也獲得了更好的回報。因此，我們對未來前進的這些事情感到非常自豪。

Great. If I could squeeze one last one in with Jill, just a technical one. A lot of moving pieces with the the TSA is the facility and the rates changing, just a lot moving on here with your interest expense. You gave some metrics on the improvements year-over-year. I'm curious if you could give us a sense on where you see sort of normalized interest expense quarterly. What's the exit rate on that as we go into '25?

偉大的。如果我可以和吉爾擠出最後一個時間，那隻是一個技術性的問題。TSA 的許多變動包括設施和費率的變化，您的利息支出也會發生很大的變化。您給了一些同比改進的指標。我很好奇，您能否告訴我們，您認為每季的利息支出的正常化情況如何。當我們進入25年時，退出率是多少？

Yes. I think what you saw this quarter, Eric, is pretty consistent because you remember, Q2 was a little bit unusual in that we had, well, the debt paydown happened during the quarter, but we also had the yield cost from the original debt that we were amortizing and we had to take a portion of that as a write-off in the quarter, which impacted interest expense.

是的。艾瑞克，我認為你本季看到的情況相當一致，因為你記得，第二季度有點不尋常，因為我們在本季度償還了債務，但我們也有原始債務的收益成本，我們正在攤銷，我們不得不將其中的一部分作為本季度的註銷，這影響了利息支出。

So what you saw this quarter is generally representative and it will depend on how rates move. And it also would depend on what we might do if we need to be in and out of the revolver a bit in the quarter. But I think somewhere in this range, plus or minus 10%, 15% is a decent approximation going forward.

因此，您本季看到的情況通常具有代表性，並且取決於利率如何變動。而且這也取決於如果我們需要在本季稍微進出左輪手槍時我們可能會做什麼。但我認為在這個範圍內，正負 10%、15% 是一個不錯的近似值。

Hopefully minus, but we'll see.

希望是減去，但我們拭目以待。

Thanks very much, guys.

非常感謝大家。

Sure. Thank you.

當然。謝謝。

Patrick Donnelly, Citi.

花旗銀行的 Patrick Donnelly。

Hey guys, thank you for taking the questions. Tom, maybe just on the bookings environment, it's really nice to see the book-to-bill come in at the (inaudible) level. I think the prior commentary was one, two in the back half with kind of a build right, with 3Q lower building into a higher 4Q.

嘿夥計們，感謝你們回答問題。湯姆，也許僅就預訂環境而言，看到訂單出貨比達到（聽不清楚）水平真是太好了。我認為之前的評論是，後半部是一、二，有點建構的意思，第三季較低，第四季較高。

Can you just talk about, I guess, what changed that, what you saw in the quarter that was that much better? And then it sounds like still one, two for the second half maybe just frame up for us what you've seen so far this quarter would be helpful.

您能否談談是什麼改變了這種情況，您在本季度看到了哪些更好的變化？然後聽起來下半年仍然會有一、二，也許只是為我們概括一下本季迄今所看到的情況會有所幫助。

Yes. Thanks, Patrick. Good morning. We feel good about the back half. I think given what the uncertainty we saw in Q1 and Q2, we've decided to stick with our prior commentary that we're looking for a one. two average in the second half. But as I mentioned in the prepared remarks, we do have a nice mix of large and biotech, which gives us a little bit more predictability in Q4.

是的。謝謝，派崔克。早安.我們對後半部分感覺很好。我認為，鑑於我們在第一季和第二季看到的不確定性，我們決定堅持我們先前的評論，即我們正在尋找一個。下半場平均每場得2分。但正如我在準備好的演講中提到的那樣，我們確實擁有大型企業和生物技術的良好組合，這使我們對第四季度的可預測性更高一些。

But as you know, with Q4, given the holiday schedule that many large pharmaceutical firms have, you really have to get a lot done given that holiday period we have there. But I think overall, we feel pretty comfortable with Q4. And I'll also add that we've looked at Q1, and we feel pretty comfortable with Q1 as well.

但正如您所知，考慮到第四季度許多大型製藥公司的假期安排，您確實必須在假期期間完成很多工作。但我認為總體而言，我們對第四季感到非常滿意。我還要補充一點，我們已經研究過第一季的情況，我們對第一季的表現也感到非常滿意。

So as we look out, I'd stick with my prior remarks, but we feel pretty comfortable that if we execute, we can deliver at 1.2 average.

因此，當我們展望未來時，我會堅持我先前的言論，但我們感到非常放心，如果我們執行，我們可以達到 1.2 的平均水平。

Okay. That's helpful. And then, Jill, maybe just on the margin front. I know the prior commentary was around kind of this 11% to 12% EBITDA margin for next year. Very much contingent on the (inaudible) book-to-bill in the second half, which obviously we just kind of talk through, you guys feel good about that. It would be helpful just at least at a high level to talk through the confidence level in that EBITDA.

好的。這很有幫助。然後，吉爾，也許只是在邊緣方面。我知道之前的評論是明年的 EBITDA 利潤率約為 11% 至 12%。很大程度取決於下半年的（聽不清楚）訂單出貨比，顯然我們剛剛討論過，你們對此感覺很好。至少在高層次上討論一下對 EBITDA 的信心程度是有幫助的。

Again, I know it's the bookings were the big piece, at least one quarter through the second half looking pretty good. So maybe just talk through the moving pieces and again, just the confidence level in the prior EBITDA commentary.

再說一次，我知道預訂量是最重要的部分，至少下半年有一個季度的情況看起來相當不錯。因此，也許只是討論一下變動的部分，並再次討論一下對先前 EBITDA 評論的信心程度。

Sure, Patrick. We specifically are saying, we're going to not give 2025 guidance right now. I think it's important, yes. We're very pleased, obviously, with the 1.23 that we achieved in the third quarter, but we have to deliver in Q4 again, and it will depend very much on the mix and also what we see going into the first quarter because you'll recall from earlier this year, we have had to change our guidance based on the fact where we landed in the first half. So I think it's important for us also to understand what that pipeline really looks like. It looks good at the moment, but the mix is also important.

當然，派崔克。我們特別指出，我們現在不會提供 2025 年的指引。是的，我認為這很重要。顯然，我們對第三季度取得的 1.23 的成績感到非常高興，但我們必須在第四季度再次實現這一目標，這在很大程度上取決於產品組合以及我們對第一季的預期，因為您會記得，今年早些時候，我們不得不根據上半年的業績情況改變我們的預期。因此我認為，了解該管道的真實面貌對我們來說也很重要。目前看起來不錯，但混合也很重要。

And the timing of those TSA exits is really critical because they are essential. We believe we're on track for year-end, but there's still a lot of work. And obviously, as I mentioned, two big systems getting ready to go live, and those are absolutely essential for us in terms of moving into the next generation of SG&A improvement.

這些 TSA 出口的時機非常關鍵，因為它們至關重要。我們相信，我們將按計劃完成年底的目標，但仍有許多工作要做。顯然，正如我所提到的，兩個大型系統已準備好上線，這對於我們進入下一代銷售、一般和行政管理費用 (SG&A) 改進絕對至關重要。

So we would rather wait and have more clarity on what things look like rather than, say, something now that they still have a lot of moving parts in it. So I'm going to refrain from answering that one directly, but explain a little bit of eye of we're going to take the pause and give you that feedback or update in the first quarter.

因此，我們寧願等待，等到事情發展到更清晰的階段，而不是說現在還存在許多未確定因素。因此，我將避免直接回答這個問題，但稍微解釋一下我們將暫停一下，並在第一季給你回饋或更新。

Understood. Okay. We'll stay tuned on that. Thanks.

明白了。好的。我們將持續關注。謝謝。

Justin Bowers, Deutsche Bank

德意志銀行賈斯汀·鮑爾斯

Hi, good morning, everyone. Tom, just one for you. You've been in the industry just as long as anyone. And could you help characterize the environment, especially with what we're seeing in large pharma now. And do you have a sense of maybe where we are in terms of some of the restructurings and reprioritizations. Are we closer to the finish line here? Or is this something that we think endures for the next year or two?

大家早安。湯姆，只給你一個。您在這個行業工作的時間和其他人一樣長。您能否幫忙描述一下環境，特別是我們現在在大型製藥公司看到的情況。您是否知道我們在一些重組和重新排序方面處於什麼位置？我們距離終點線更近了嗎？或者我們認為這種情況將在未來一兩年內持續下去？

Hey, Justin, good morning. I guess a few things I'd say, we mentioned last time that we've started to categorize the top 20, and they are so much of the spend of the industry into three groups. They are those who are very successful and growing rapidly and frankly, spending rapidly on R&D. And you even heard some of our competitors talk about it that it's spilling out into new full-service outsourcing projects and opportunities for the industry.

嘿，賈斯汀，早安。我想說幾件事，我們上次提到過，我們已經開始對前 20 名進行分類，並且他們將該行業的大部分支出分為三類。他們是非常成功、快速成長的公司，坦白說，他們在研發上投入也非常多。你甚至聽到我們的一些競爭對手談論它正在蔓延到新的全方位服務外包專案和行業機會。

And then we have two other groups that are kind of easily described. One is the really flat to declining group and the other ones have slower growth or they're flat. And both of those other groups are doing some level of restructuring. So a huge amount depends who you're exposed to.

然後我們還有另外兩個比較容易描述的組別。一個群體是真正持平或下降的群體，另一個群體則是成長較慢或持平的群體。這兩個集團都在進行一定程度的重組。所以很大程度取決於你接觸的人。

If you're one of the largest CROs, you're probably exposed to most of that mix. So you have a fairly complex puzzle. If you're somebody like us, we're exposed to some of it, and we're, we've been able to manage it to date, I think, would be a way to say it. So, and I'd also, Justin, I saw your report associated with the market growth and comments.

如果您是最大的 CRO 之一，那麼您可能會接觸到大部分此類產品。因此，你面臨的是一個相當複雜的難題。如果你像我們一樣，我們就會接觸到其中的一些，而且，我們至今為止已經能夠管理它，我想，可以這樣說。所以，賈斯汀，我也看到了您有關市場成長和評論的報告。

And I generally agree with what you said in there, I think. I think there are certain pharmaceutical firms where R&D is accelerating and the general backdrop, it seems solid on the biotech front. We said that in prior quarters. I think the recent September funding numbers, for instance, have indicated that as well. So it seems solid, not spectacular, but solid. And so I think that firms can execute against this if their commercial organizations manage well.

我認為我大體上同意你在那裡所說的內容。我認為某些製藥公司的研發正在加速，而且整體背景表明，生物技術方面的情況比較穩健。我們在前幾個季度就說過這一點。我認為最近九月的融資數據也顯示了這一點。因此它看起來很堅固，雖然不引人注目，但很堅固。所以我認為，如果商業組織管理得當，企業就能實現這個目標。

Got it. And then, maybe one for Jill. I appreciate the EBITDA bridge that you guys provided in the deck. With respect to the bridge from 3Q to 4Q. You have two buckets, one for service fee revenue growth and one for cost savings. Which one has the greatest variability? And what's the interrelationship between the two, if any?

知道了。然後，也許還有一個給吉爾。我很欣賞你們在演講中提供的 EBITDA 橋樑。關於從3Q到4Q的橋樑。你有兩個桶，一個用於服務費收入成長，一個用於成本節約。哪一個變化最大？如果有的話，兩者之間的相互關係是什麼？

Yes. Let me start, I think, the two buckets. When you look at the SG&A bucket, well margin optimization, generally, I think, as you saw in this quarter, that was a big contributor really to the improvement quarter-on-quarter. There's a piece of really related to variable comp and where we end up landing for the year that's still on the table, and that kind of will drive how big we are in that range.

是的。我想，讓我先從這兩個桶子開始。當您查看銷售、一般及行政開支項目時，利潤率優化通常是一個很大的貢獻者，正如您在本季度看到的那樣，這對季度環比改善確實起到了很大的作用。確實有一部分與可變薪酬有關，而我們今年的最終目標仍在討論中，這將決定我們在這個範圍內的規模。

But the margin improvement that you saw this quarter, you'll probably also note, I called out 15,500 people. That's come down a little bit from where we were in the past quarter or two. And so it's a combination of the work that we've been doing in a very thoughtful way to manage the business and set ourselves up for future success, all while making sure that we prioritize our customers needs and think about the needs of the projects.

但是，您可能還會注意到，本季的利潤率有所提高，我召集了 15,500 人。與過去一兩個季度相比，這一數字略有下降。因此，這是我們以非常周到的方式進行的各項工作的結合，以管理業務並為未來的成功做好準備，同時確保我們優先考慮客戶的需求並考慮專案的需求。

On the revenue side, as I had mentioned at Q2, some of the step-up in the second half was going to be related to a large suite of projects that we had won in the clinical pharmacology business as we've been talking about earlier. And we did see that as we headed into Q3, and we're expecting that to continue into Q4, although sometimes with the volunteers and things around the holidays, things can be a little bit variable. So we wanted to just provide that little bit of range there because I do think there could be a little bit of movement just depending on where we land.

在收入方面，正如我在第二季度提到的那樣，下半年的部分成長將與我們在臨床藥理學業務中贏得的大量項目有關，正如我們之前談到的。我們在進入第三季度時確實看到了這一點，我們預計這種情況將持續到第四季度，儘管有時由於志工和假期前後的情況，情況可能會有些變化。所以我們只想在那裡提供一點範圍，因為我確實認為可能會有一點點移動，這取決於我們降落在哪裡。

We feel good about it at the moment, but it will very much depend on how things play out over the next couple of months. So those are some of the big drivers in terms of what's driving those two buckets in the range that we provided.

我們目前對此感覺良好，但這在很大程度上取決於未來幾個月事態的發展。所以就我們提供的範圍內的這兩個桶而言，這些是一些主要驅動因素。

Understood. Thank you so much.

明白了。太感謝了。

Sure.

當然。

Luke Sergott, Barclays,

巴克萊銀行的 Luke Sergott

Great. Thanks guys. I guess can we talk about some of the pricing dynamics here? And for the recently one award that you guys have. The fear is that the feedback has been like pricing has been extremely competitive. And so how much of this your wins are associated with coming in as one of the lower-cost providers?

偉大的。謝謝大家。我想我們可以討論一下這裡的一些定價動態嗎？還有你們最近獲得的一個獎項。令人擔心的是，回饋顯示定價競爭非常激烈。那麼，你們的勝利有多少是與成為低成本供應商之一有關的呢？

Yeah, good morning, Luke. Yes, as we said on prior calls, we recognize the situation that this organization needs to improve its margins. And in general, our belief is that we can price at market and based on our capabilities and experience, we can win projects. And so I know there's been some noise out there about different organizations.

是的，早上好，路克。是的，正如我們在之前的電話會議中所說的那樣，我們認識到該組織需要提高利潤率的情況。總的來說，我們相信我們可以按市場定價，並且憑藉我們的能力和經驗，我們可以贏得專案。所以我知道外面針對不同的組織存在一些討論。

But in general, for us, we're trying to price that market because we don't believe our customers make a decision based solely on price. They base it on, if you think about the strategy we have, how long the duration is that we propose. The probability that we can deliver patients in the time frames that are required for the study.

但總體而言，對於我們來說，我們正試圖為該市場定價，因為我們不相信我們的客戶僅根據價格做出決定。如果你考慮我們的策略，你就會知道我們提出的持續時間是多久。我們能夠在研究要求的時間範圍內接收患者的可能性。

So they're looking at quite a number of things and our customers really aren't short sighted enough to make choices on that. Now, I will say FSP continues to be competitive. You'll hear this everywhere. There's less differentiation there. But again, the size of our business, at this moment in those most competitive top pharma FSP clinical situations, we're, that's not a focus for us right now. So I think you'll hear from people who are in that area, you'll hear an intense focus on price.

所以他們考慮了相當多的事情，而我們的客戶確實不會短視到在這方面做出選擇。現在，我想說 FSP 繼續保持競爭力。您隨處都會聽到這個消息。那裡的差異化較小。但是，就我們業務的規模而言，在目前最具競爭力的頂級製藥 FSP 臨床情況下，這不是我們目前的重點。因此，我認為您會從該地區的人們那裡聽到對價格的高度關注。

Okay. And then just a follow-up here. I mean the, just talk about, you guys talked about biotech strength and larger strategic strength that you guys saw that's driving the bookings. Can you talk about like from a biotech perspective, is this mostly like from the recent or the public raises that we've seen this year? Or is it mostly broad-based?

好的。然後這裡只是後續內容。我的意思是，剛才你們談到了生物技術實力和更大的戰略實力，你們看到這些推動了預訂量。您能否從生物技術的角度談談，這是否主要類似於我們今年看到的最近的或公開的加薪？或者說它主要是廣泛的？

So just trying to figure out like the rest of the CROs have been really choppy and then you guys kind of have really avoided a lot of the bookings and other issues that others have seen. So could you talk about like how you're positioned in the market differently than the others that you guys aren't really seeing this pressure exposure?

所以只是想弄清楚，其他 CRO 的情況一直很不穩定，而你們確實避免了其他人遇到的許多預訂和其他問題。那麼，您能否談談您在市場中的定位與其他公司有何不同，以至於您並沒有真正看到這種壓力暴露？

Yes. I think I acknowledge that with the biotechs and you saw this for us in quarters one and two. There is some uncertainty around their decision-making process that is the nature of the beast over there. And the question is really how well can the commercial organizations manage that. You heard us talk last time, Luke, that we have put a lot of intense effort around our commercial organization trying to understand those decision processes better, trying to, we actually created a new process for forecasting. So we had a prior process. But in terms of forecasting book-to-bill, we added a new process after really late in the second quarter, starting in the third quarter.

是的。我認為我承認生物技術有這樣的問題，您在第一季和第二季就看到了這一點。他們的決策過程存在一些不確定性，這是事情的本質。真正的問題是商業組織能夠如何管理好這一點。盧克，你上次聽到我們說過，我們為商業組織付出了很多的努力，試圖更好地理解這些決策過程，試圖，我們實際上創建了一個新的預測流程。所以我們有一個先前的流程。但在預測訂單出貨比方面，我們在第二季末之後、從第三季開始增加了一個新流程。

And so I think that's helping us manage those expectations and make sure we point our resources at the most likely situations and really try to manage the decision process. One of the things you get with Fortrea is you get the entire management team involved where we need to be involved with customers, not just in the back offices administering the business.

因此，我認為這有助於我們管理這些期望，並確保我們將資源用於最有可能的情況，並真正努力管理決策過程。Fortrea 的優點之一就是讓整個管理團隊參與進來，我們需要參與客戶事務中，而不僅僅是在管理業務的後台。

So we're trying to put not only the sales teams, but the operations team and the leadership, when necessary and get them directly involved with customers. And frankly, I think that makes a difference. That being said, again, what we've seen at our size, given our exposure is a solid biotech environment. We've been saying this for several quarters, and it really is how does your commercial organization execute against that, that can help you create some consistency there. Does that help, Luke on that?

因此，我們不僅嘗試讓銷售團隊參與進來，而且在必要時還讓營運團隊和領導層直接參與客戶活動。坦白說，我認為這是有區別的。話雖如此，考慮到我們的規模和我們所處的環境，我們看到的是堅實的生物技術環境。我們已經說了好幾個季度了，而事實上，你的商業組織如何執行這一點，可以幫助你在那裡創造一些一致性。盧克，這有幫助嗎？

It does. Thank you.

是的。謝謝。

Thanks.

謝謝。

David Windley, Jefferies.

傑富瑞（Jefferies）的戴維·溫德利（David Windley）。

Hi, thanks for taking my questions. Impressive progress in the quarter. What we've heard in addition to what some of the other folks have asked already, One of the key themes we've heard in the quarter has been cancellations.

你好，謝謝你回答我的問題。本季取得了令人矚目的進展。除了其他人已經問到的問題之外，我們還聽到的是，本季我們聽到的一個關鍵主題是取消。

So choppiness in the environment, difficulty to predict decision-making time lines, things like that, but predominantly cancellations. Can you talk about what you are seeing or maybe not seeing from the standpoint of clients changing their mind about intention to move forward on projects.

因此，環境不穩定，難以預測決策時間表，諸如此類，但主要還是取消。您能否從客戶改變主意、不再考慮繼續推進專案的角度談談您所看到或可能沒有看到的情況？

Yes. Thanks, David. I can take that one. We've looked at this really closely because we obviously hear what our peers are saying, and we have not seen any increase in cancellations. We had called out the one. You remember that late in the first quarter, that kind of impacted the first quarter book-to-bill, but we have not had any uptick.

是的。謝謝，大衛。我可以拿走那個。我們對此進行了非常仔細的研究，因為我們顯然聽到了同行的呼聲，而且我們沒有看到取消的數量有任何增加。我們已經叫了那個。您記得，在第一季末，這種情況對第一季的訂單出貨比產生了一定影響，但我們並未出現任何上漲。

We looked across the portfolio very carefully. We've seen it be kind of our normal rate obviously, it can be situational from customer to customer. But fortunately, for us, this doesn't seem to be an issue.

我們非常仔細地審查了整個投資組合。顯然，我們已經看到這屬於我們的正常費率，但具體費率可能因客戶不同而有所差異。但幸運的是，對我們來說，這似乎不是一個問題。

Yes. Dave, I'd add just because sort of in full disclosure, and Jill and I have talked about it in our clinical pharmacology business. There's almost what I'd call a churn where there are cancellations, but it's usually just pulling back a project to restrategize how to deal with it, and then it's going to come back later and so we've seen that.

是的。戴夫，我想補充一點，因為這是一種完全公開的情況，吉爾和我已經在我們的臨床藥理學業務中討論過這個問題。這幾乎就是我所說的客戶流失，即取消項目，但通常只是撤回一個項目，重新制定應對策略，然後項目稍後還會再次出現，我們已經看到了這種情況。

And I think the industry talks about what happened with CRL and what's happening in the early development stuff and whether it spills into clinical pharmacology. But for us, I'd almost call it a churn. It's not really a cancellation rate. It's things moving in and out based on different strategies that customers are taking. And so, but overall, Jill is absolutely right. When you look at our numbers overall, they're at sort of historical norms.

我認為業界正在討論 CRL 發生了什麼、早期開發過程中發生了什麼以及它是否會影響臨床藥理學。但對我們來說，我幾乎稱之為客戶流失。這實際上不是一個取消率。貨物的進出取決於客戶所採取的不同策略。但總的來說，吉爾是完全正確的。當你看我們的整體數字時，它們處於歷史標準水平。

Got it. And Tom, while I have you, on this concept of qualified pipeline, I appreciate you've talked about your comfort there. I think to Justin's question, you talked about kind of the triage of top 20 and how you think about it. I'm going to assume, but I'm going to let you confirm that when you think about what's in your qualified pipeline and what's moving forward that more of that, maybe not all of it, but more of that leans toward these folks that are spending more, moving more, maybe less mired in restructuring and things like that, maybe flesh out a little bit more of what gives you the comfort that you expressed in the qualified pipeline that you're looking at internally?

知道了。湯姆，當我和你討論合格管道這個概念時，我很感激你談到了你在這方面的舒適感。我認為對於賈斯汀的問題，你談到了前 20 名的分類以及你對此的看法。我會假設，但我會讓你確認，當你考慮你的合格管道中有什麼以及未來的發展時，更多的，也許不是全部，但更多的傾向於那些花費更多，行動更多，可能更少陷入重組和諸如此類的事情的人，也許會充實一點讓你感到舒服的東西，你在內部關注的合格管道中表達了這一點？

Yes. I'd say interestingly, Dave, we do have a mix. So I'd love to say that our exposures highly to that top segment. But we do have a mix. But given the exposure that we have, we, they are moving ahead with projects. Everybody in the industry is moving ahead with projects, even the folks who've talked about restructuring have important projects that they're driving.

是的。我想說有趣的是，戴夫，我們確實有混合。所以我想說，我們對這頂級細分市場的曝光率很高。但我們確實有混合。但考慮到我們的曝光度，他們正在推進專案。業內每個人都在推進項目，甚至那些談論重組的人也在推動重要的項目。

So right now, what we're involved in, how we're delivering, I got some excellent feedback this quarter from some of our large pharma customers with some terms like that we are doing excellent work and phrases like that. That are helping us. So we may not be as large, but what we are doing in larger pharma, we're getting symacolades for.

所以現在，我們參與的工作以及我們的交付方式，本季我從一些大型製藥客戶那裡得到了一些非常好的回饋，他們說我們做得非常出色，諸如此類。這些都在幫助我們。因此，我們的規模可能沒有那麼大，但我們在大型製藥公司所做的事情就是獲得 symacolades。

Got it. If I could sneak one more in. Jill, on the TSA exits, I appreciate that you said that the timing is critical. I just want to make sure, I understand as you've kind of emphasized to me that the TSA, the kind of removal of the check that you're writing to LabCorp for the TSA support services they are providing.

知道了。如果我可以再偷偷溜進去一個。吉爾，關於 TSA 出口，我很感激你說時機至關重要。我只是想確保，我明白，正如您向我強調的那樣，TSA 取消了您為 LabCorp 提供的 TSA 支援服務開出的支票。

That in and of itself is not what drives your margin expansion, but rather your ability to manage the business on your own systems and identify areas to take SG&A cost out? Is that correct? Is my understanding correct? Can you flesh that out a little bit?

這本身並不是推動您利潤率擴大的因素，而是您在自己的系統上管理業務和確定削減銷售、一般和行政費用 (SG&A) 成本的領域的能力？那正確嗎？我的理解正確嗎？能稍微詳細說明一下嗎？

Yes. No, your understanding is correct, David. And I do think that's important. I know we have talked about it before. So getting at this TSA access is really critical. Obviously, there's additional costs associated there and the onetime costs. And you will see, I've shared this before, but for everyone's benefit, the way those things are paid and build, you're going to see onetime costs through the first quarter, just by the nature of how things go.

是的。不，你的理解是正確的，大衛。我確實認為這很重要。我知道我們之前談過這個。因此，獲得 TSA 存取權限非常關鍵。顯然，這其中涉及額外成本和一次性成本。你們會看到，我之前已經分享過這一點，但為了大家的利益，這些東西的支付和建設方式，你們將在第一季度看到一次性成本，這只是事情發展的本質。

But we still believe that we're on track to exit the vast majority of it all by the end of this year, right around the end of this year, certainly by the time we're coming out, talking about Q4 results with all of you. And that is then really important. We'll go live on the new systems, and then that allows us to bring in different processes, new structures and ways of working, be able to do more volume of transactions in a more efficient and effective way.

但我們仍然相信，我們將在今年年底前退出絕大部分業務，就在今年年底左右，肯定是在我們出來與大家討論第四季度業績的時候。這確實非常重要。我們將啟用新系統，這樣我們就可以引入不同的流程、新的結構和工作方式，能夠以更有效率、更有效的方式完成更多的交易。

So that is really critical. It's not an immediate switch that you exit a TSA and we get massively reduced SG&A. There are some places, as we've talked about, particularly with our IT infrastructure, where because of the work that we're doing with Cognizant. We've talked about that before, there will be some improvements, but you'll see more of those come out over the course of next year, and we'll provide a lot more detail about that journey when we give our guidance for 2025.

所以這真的很關鍵。退出 TSA 並不會立即帶來銷售、一般及行政費用的大幅減少。正如我們所討論的，有些地方，特別是我們的 IT 基礎設施，是由於我們與 Cognizant 合作的工作。我們之前已經討論過這個問題，會有一些改進，但您會在明年看到更多改進，當我們給出 2025 年的指導時，我們會提供有關這一歷程的更多細節。

Fantastic. Thanks for taking my questions and the extra one. Appreciate it

極好的。感謝您回答我的問題和額外的問題。感謝

Sure.

當然。

Thanks, Dave.

謝謝，戴夫。

Elizabeth Anderson, Evercore.

伊麗莎白·安德森（Elizabeth Anderson），Evercore。

Hi guys. Congrats on a nice quarter and thanks for the question. Maybe just to start out, a shorter-term question on the cost side. Traditionally, you've seen, or at least in the last two years, a nice step down in SG&A in the fourth quarter. Could you talk a little bit (inaudible) why that happens in sort of your expectations? Obviously, it's in your embedded guidance. So I just want to kind of (inaudible) understand what that is. And then I have a follow-up.

嗨，大家好。恭喜您度過了一個愉快的季度，感謝您的提問。也許只是開始，關於成本的短期問題。傳統上，或至少在過去兩年中，您會看到第四季度的銷售、一般及行政開支大幅下降。您能否稍微談一下（聽不清楚）為什麼會發生這種情況，這是否符合您的預期？顯然，它在你的嵌入式指導中。所以我只是想（聽不清楚）去了解那是什麼。然後我有一個後續問題。

Yes. Sure, Elizabeth. Thanks for the question. We typically do. And oftentimes, over the course of the year, you're managing things, right, as you get, I mean, most folks would understand that in an organization, you get to the end of the year, you tend to get a little bit tighter on things. So you see some of that that comes through.

是的。當然，伊麗莎白。謝謝你的提問。我們通常都會這麼做。通常，在一年的時間裡，你都在管理各種事情，對吧，我的意思是，大多數人都會明白，在一個組織中，到了年底，你往往會對事情變得更加嚴格。因此您會看到其中的一些情況已經實現。

I do think for us, as I mentioned, one of the drivers there is around some variable comp and where the year lands in terms of how that plays out. But I also highlight the changes we've been making over the course of this year, and I called out the change in headcount, that's not just operations. That's also parts of SG&A as well, where we can do it a bit more thoughtfully.

我確實認為，正如我所提到的那樣，對我們來說，其中一個驅動因素是一些可變的薪酬，以及今年的薪酬如何變化。但我也強調了我們今年所做的改變，我指出了員工人數的變化，這不僅僅是營運方面的變化。這也是銷售、一般及行政費用 (SG&A) 的一部分，我們可以更周到地處理。

So it's the cumulative impact of those as they've been happening over the course of the year. You get the full quarter of benefit in the fourth quarter and then some of the other things that we mentioned. But that I think there is a bit of a most organizations over the course of the year, you get closer to the end, you tighten up a bit, and that you see that.

所以這是這些事件在一年內發生的累積影響。您將在第四季度獲得整整一個季​​度的收益，然後還會獲得我們提到的一些其他收益。但我認為，大多數組織在一年的時間裡都會有這樣的情況，當你接近年底時，你會收緊一點，你就會看到這一點。

But that is generally what's driving the improvements as we go into the fourth quarter. Having said that, I think as a percent of revenue, it's not going to be, it will be broadly in line with what we've seen over the course of this year because we really do need to exit those TSAs in SG&A to start to be able to drive the really different model.

但一般來說，這正是我們進入第四季時推動業績改善的因素。話雖如此，我認為以收入的百分比來算，它不會與我們今年看到的情況大致一致，因為我們確實需要退出銷售、一般和行政費用中的那些 TSA，才能開始推動真正不同的模式。

Got it. That's very helpful. Thank you. And then I know earlier in the year, you talked about some variability in terms of trial starts and sort of maybe sort of pivoting off of Dave's question a little bit, just sort of like slower decision-making in biotech. But it seems like maybe what you're saying and I just want to make sure we're understanding this correctly, is that you're not, you're seeing that is perhaps like (inaudible) be even a little bit better. Is that a fair characterization?

知道了。這非常有幫助。謝謝。然後我知道今年早些時候，您談到了試驗開始方面的一些變化，也許有點偏離了戴夫的問題，就像生物技術領域的決策速度較慢一樣。但似乎您所說的也許正是我想確保我們正確理解的，您不是，您看到的也許就像（聽不清楚）甚至會更好一點。這是一個公正的描述嗎？

Let me take that one, Elizabeth. Good morning. I think we would say we really tried to manage that hard this quarter. So, we had two factors. We talked about this a little bit last and one is that can you manage the biotech decision processes better. And our commercial team worked really hard to try to do that, try to make sure we have the right interactions with executives, understood the processes, had less stuff at the last minute.

讓我來接手這個，伊莉莎白。早安.我想我們可以說本季我們確實盡力了。因此，我們有兩個因素。我們最後討論了這個問題，其中之一就是你能否更好地管理生物技術決策過程。我們的商業團隊非常努力地嘗試做到這一點，確保我們與高階主管進行正確的互動，了解流程，減少最後一刻出現的問題。

So we worked hard on that. And then the other thing, frankly, is that we just had a little bit more large pharma in the mix. And that does have predictability. So because they have a tendency to stay on schedule. They don't make decisions. They don't have the board intervene or things that can happen with biotechs.

所以我們在這方面付出了很大的努力。坦白說，另一件事是，我們的合併中加入了更多大型製藥公司。這確實具有可預測性。因為他們有按時完成任務的傾向。他們不做決定。他們沒有董事會幹預，也不會發生生物技術方面可能發生的事情。

So it's really the combo of those two in the second half that makes us feel better about our second half numbers. But we're, I think as an industry, we all, as biotech continues to grow, as a proportion and continues to be targeted by various CROs beside us, everyone has to get used to and get better at managing those decision cycles.

所以下半年這兩人的組合確實讓我們對下半年的數據感覺更好。但我認為，作為一個行業，隨著生物技術的不斷發展，作為一個比例，並繼續成為我們身邊的各種 CRO 的目標，我們每個人都必須習慣並更好地管理這些決策週期。

Alright, thank you very much.

好的，非常感謝。

Thank you.

謝謝。

Max Smock, William Blair.

馬克斯·斯莫克，威廉·布萊爾。

Hi, Tom. Hi, Jill. Thanks for taking our questions. I wanted to follow up on some of your commentary on the pipeline here. I know you mentioned the environment or the pipeline for the next two quarters is strong. But, just wondering if you think it's healthy enough to support a 1.2 book-to-bill beyond the next couple of quarters here. I mean you had those decisions in 2Q that got pushed out to 3Q on average the last couple of quarters, book-to-bill about 1.1, how much of the solid bookings this quarter do you think was the pushout of those opportunities from 2Q? Or do you really think the environment is healthy enough to kind of support that 1.2 book-to-bill moving forward? Thank you.

嗨，湯姆。你好，吉爾。感謝您回答我們的問題。我想跟進您對此處管道的一些評論。我知道您提到未來兩個季度的環境或管道很強勁。但是，我只是想知道您是否認為它足夠健康，可以支撐未來幾季內 1.2 的訂單出貨比。我的意思是，您在第二季度做出的那些決定在過去幾個季度平均被推遲到第三季度，訂單出貨比約為 1.1，您認為本季度的穩定訂單量中有多少是第二季度的那些機會推遲的？或者您真的認為環境足夠健康，可以支持未來 1.2 的訂單出貨比？謝謝。

Good morning, Max. We, as I said, we've got a process that we have initiated here where we try to look out and we look at essentially what's in a stage where it's been awarded and not contracted, what still will be awarded and contracted. We look at the size, we look at the likelihood that there'll be some kind of issue with the process.

早安，馬克斯。正如我所說的，我們已經啟動了一個流程，在這個流程中，我們會盡力觀察並重點關注哪些項目處於已授予但尚未簽訂合約的階段，哪些項目仍將被授予和簽訂合約。我們會考慮規模，也會考慮在這個過程中出現某種問題的可能性。

And so we've done that in quite a bit of detail. And so when we look out over the next two quarters, we feel comfortable that if we execute, we can be in that range of that targeted 1.2. Now it's, frankly, it's a little difficult for us to look out that much further. This is such a funny industry. We do have things in the pipeline for next year, but it's such a funny industry because so many things come in on short-term RFPs, where there's a 10 day response time. For those who don't know the industry that well, it's , the good news is there's so much volume of this and it's fairly well structured that it's consistent, you can manage around it.

我們已經相當詳細地完成了這項工作。因此，當我們展望未來兩個季度時，我們感到很放心，只要我們執行，我們就能達到 1.2 的目標範圍。坦白說，現在我們要想看得更遠有些困難。這是一個非常有趣的行業。我們確實在為明年做一些準備，但這是一個非常有趣的行業，因為很多事情都是透過短期 RFP 來完成的，而回應時間只有 10 天。對於那些不太了解該行業的人來說，好消息是，這個行業的數量很大，而且結構相當良好，可以保持一致，你可以對其進行管理。

The bad news is you have these short cycle RFPs that you deal with all the time. And so I think we feel comfortable saying the next two quarters are, have a solid pipeline. What Jill was referring to around 2025, think we'd like to get a little bit further in the quarter and frankly, because we'd be reporting during the first quarter on Q4 results and providing guidance.

壞消息是，你總是需要處理這些短週期的 RFP。因此我認為我們可以放心地說接下來的兩個季度將會有穩健的銷售管道。吉爾 (Jill) 指的是 2025 年左右，我們認為我們希望在本季度取得更大進步，坦率地說，因為我們將在第一季度報告第四季度的業績並提供指導。

We'd like to get further along, finish out the year, understand these TSAs, understand where our systems are at and then really talk about that full pipeline for next year. So I realize that's probably not what you want to hear, Max, but I, what I can tell you is we have a very rigorous process. And what we see among our large and small customers looks solid for the next two quarters.

我們希望取得進一步的進展，在今年年底前了解這些 TSA，了解我們的系統處於什麼位置，然後真正討論明年的完整管道。所以我意識到這可能不是你想聽到的，馬克斯，但我可以告訴你的是，我們有一個非常嚴格的流程。我們看到，未來兩個季度，我們大客戶和小客戶的表現都很穩健。

Yes, that was helpful, Tom. Thank you for that color. Also, I just wanted to follow up on some of your commentary on small biotech. Tom, you mentioned there's still some uncertainty around small biotech decision-making time lines. But just wanted to clarify whether you've actually seen those decision-making time lines get better at all over the last few months?

是的，這很有幫助，湯姆。謝謝你的色彩。此外，我只是想跟進您對小型生物技術的一些評論。湯姆，你提到小型生物技術決策時間表仍然存在一些不確定性。但只是想澄清一下，在過去的幾個月裡，您是否真的看到這些決策時間軸有所改善？

And if so, what do you think were the drivers behind that improvement? I guess my question really is do we need to see funding get better from here? Or do you think the funding environment is actually okay now that we're past the election and just had another rate cut. Does that give the smaller innovators some more confidence to go ahead and start spending again?

如果是的話，您認為這種改善的推動因素是什麼？我猜我真正的問題是我們是否需要看到資金狀況從現在開始改善？或者您認為，既然我們已經結束選舉並且又進行了一次降息，那麼融資環境實際上還不錯。這是否會給較小的創新者更多信心繼續前進並開始支出？

Yes. I think on the second part, I was thinking about in case we get near this question, Max. And we're still kind of in battlefield fog from this election this week. But there is no question that in general, biotech funding is correlated with lower rates. And if we have an SEC that's more comfortable with mergers and acquisitions, you could see some tailwinds to the biotech sector.

是的。我想在第二部分，我在考慮如果我們接近這個問題，馬克斯。我們仍然處於本週選舉的戰場迷霧之中。但毫無疑問的是，總體而言，生技融資與較低的利率有關。如果我們的證券交易委員會對併購更加熟悉，你會看到生技領域將迎來一些順風。

What we, if you, my father-in-law used to talk about, assume the positive because it is a better way to live. And so if we assume the positive, we did see some good things last time, like a guy like Scott Gottlieb put in this FDA Commissioner and we did see Project Warp Speed, which I think we were all hoping would give us the same kind of tailwinds for decision-making that you saw during the HIV crisis.

我們，例如我的岳父曾經談論過的，都認為這是正面的，因為這是一種更好的生活方式。因此，如果我們做積極的假設，我們上次確實看到了一些好事，比如斯科特·戈特利布 (Scott Gottlieb) 這樣的人任命的 FDA 局長，以及我們確實看到的“曲速計劃”，我想我們都希望它能給我們帶來與艾滋病毒危機期間看到的同樣的決策助力。

So, and we won't see the IRA expansion or we may not see the IRA expansion that was discussed. So I think they're, right now, we're in Battlefield fog. It's very early, but if things continue to progress the way they are, it's possible that we'll see more attractive biotech environment in the coming months here.

所以，我們不會看到 IRA 擴張，或者我們可能不會看到所討論的 IRA 擴張。所以我認為，現在，我們正處於戰場迷霧之中。現在還為時過早，但如果事情繼續按照目前的方式發展，我們可能會在未來幾個月看到更具吸引力的生物技術環境。

I actually don't think for Fortrea, it needs to be increased. I think, given our size and our exposure, if we execute well as a commercial team, I think the solid funding we've seen, the numbers that have come out in August, September are solid enough for us in the beginning of IPOs again. But for the industry overall, certainly more funding is always better.

我實際上不認為 Fortrea 需要增加。我認為，考慮到我們的規模和曝光率，如果我們作為一個商業團隊表現良好，我認為我們所看到的穩健的融資，以及 8 月份和 9 月份公佈的數字對於我們再次進行 IPO 來說已經足夠穩健。但對於整個產業來說，資金越多當然越好。

Thanks again for. (multiple speakers) No, not at all. That was very helpful. Thank you again for taking our questions.

再次表示感謝。（多位發言者）不，一點也不。這非常有幫助。再次感謝您回答我們的問題。

Thank you.

謝謝。

Matt Sykes, Goldman Sachs.

高盛的馬特·賽克斯 (Matt Sykes)。

Good morning. Thanks for taking our question. This is Will Ortmayer on for Matt. Just wanted to touch on the burn rate, given the higher conversion in the quarter and step up that's implied for the fourth quarter, what are your expectations for backlog burn going into 2025?

早安.感謝您回答我們的問題。這是威爾·奧特梅爾 (Will Ortmayer) 代替馬特 (Matt) 報道的。我只是想談談燒錢率，考慮到本季度的轉換率更高，以及第四季度隱含的成長，您對 2025 年積壓訂​​單燒錢率的預期是什麼？

I thought you were going to talk about fourth quarter and you tried to sneak in one on 2025 (inaudible), but I will say you did see a little bit of a step-up in the in the burn rate from Q2 to Q3, we'd expect that to be consistent. I did talk at Q2 about the fact that some of the improvement we see in the back half would be due to the improvement in the clinical pharmacology business, which has so far come in generally as we expected, and it is a bit faster burning.

我以為你要談論第四季度，而你試圖偷偷提到 2025 年（聽不清楚），但我要說的是，你確實看到從第二季度到第三季度的燒錢率有所上升，我們預計這將是一致的。我在第二季度確實談到過，我們在下半年看到的一些改善將歸因於臨床藥理學業務的改善，到目前為止，該業務的進展總體上符合我們的預期，並且發展速度更快。

I don't think at this point, I can comment on 2025 burn rate, except to say that we are continuing to look at ways to improve productivity and get projects started faster and focus on improving the time lines on milestone delivery. So it's a focus for us. But I'm going to hold off on commenting on '25 burn until we give '25 guidance.

我認為目前我無法對 2025 年的資金消耗率發表評論，只能說我們將繼續尋找提高生產力、更快啟動專案的方法，並專注於改善里程碑交付的時間表。所以這是我們關注的重點。但在我們給予『25』指導之前，我將暫時不對『25』燒錢發表評論。

That's helpful. I had to try in 2025.

這很有幫助。我必須在 2025 年嘗試。

I appreciate it. You did well there. That was clever, yes.

我很感激。你在那裡做得很好。是的，這很聰明。

I guess just one more from our side. When you think about the drivers of the gross margin improvement, how should we be thinking about that between mix and cost efficiencies as you grow that backlog? And are there any mix dynamics to call out that we should think about moving forward?

我想我們這邊還剩下一個。當您考慮毛利率提高的驅動因素時，隨著積壓訂單的增加，我們應該如何考慮產品組合和成本效率之間的平衡？是否存在什麼混合動態值得我們考慮向前發展？

Yes. I do think we've been really clear from the beginning that prior to the spin, the mix wasn't necessarily in the places. We really want to grow the full-service clinical business. We all know that, that is the strongest from a margin delivery. And so we're still focused on that. We have really seen great strength in clinpharm, as we talked about earlier.

是的。我確實認為我們從一開始就很清楚，在旋轉之前，混合物不一定在位。我們確實希望發展全方位臨床服務業務。我們都知道，這是保證金交付中最強的。因此我們仍然關注這一點。正如我們之前談到的，我們確實看到了 clinpharm 的強大實力。

And we still like the FSP business, although as Tom mentioned, it is getting more and more price competitive. We still like it, though. It's very steady revenue, and we've learned to navigate that business really well. So we welcome it all.

儘管正如湯姆所說，FSP 業務的價格競爭力正在越來越強，但我們仍然看好該業務。但我們仍然喜歡它。這是非常穩定的收入，而且我們已經學會如何很好地駕馭這項業務。因此，我們歡迎這一切。

But I do think that mix is really important. And even within late stage clinical the therapeutic mix is. You've heard, we've talked about, some of our peers have talked about the fact that the oncology programs do tend burn a little bit slower as they get more and more specialized, some of them are longer because you have longer-term follow-up requirements. So the mix is critical.

但我確實認為這種混合確實非常重要。即使在後期臨床中，治療組合也是如此。您已經聽說了，我們已經討論過了，我們的一些同行也談到了這樣一個事實：隨著腫瘤學項目變得越來越專業化，其進程往往會變得更慢一些，有些項目的時間會更長，因為您需要更長期的隨訪。因此，混合至關重要。

We want to be in all of it. We've talked about going into, we've got really strong therapeutic breadth, but we've talked about areas we want to continue to focus on cardiovascular and neurology, some of these things with the obesity drugs and we're making great inroads on all of those, but that mix really does drive.

我們希望參與其中。我們已經討論過深入研究，我們擁有非常強大的治療廣度，但是我們也討論過我們希望繼續關注的領域，即心血管和神經病學，其中一些領域與肥胖症藥物有關，我們在所有這些領域都取得了很大進展，但這種結合確實具有推動作用。

So I think that's also part of why we want to be really thoughtful as we go into '25 because in a quarter, you can have a great book-to-bill. But if it's all long duration, slower burning studies, it's going to impact your revenue rates for the next year. So we are looking at all of that. But the focus is clearly broad balance, but we really do want to grow more of that late-stage clinical.

所以我認為這也是我們在進入25年時要深思熟慮的部分原因，因為在一個季度內，你就可以獲得很高的訂單出貨比。但如果都是長期的、進展較慢的研究，它將影響你明年的收入率。所以我們正在關注這一切。但重點顯然是廣泛的平衡，但我們確實希望發展更多的後期臨床。

That's helpful. Thanks, Jill.

這很有幫助。謝謝，吉爾。

Sure.

當然。

Michael [Ryskyn], Bank of America.

麥可[Ryskyn]，美國銀行。

This is John Kim on for Michael. So you've talked about the SG&A and the TSA exit seem to be on track. But without giving us the margin details if you think about the investments and investments you still have to make the parts of the SG&A, that involves IT infrastructure, but you also mentioned commercial organization today.

我是約翰金 (John Kim)，代替麥可。所以您談到了銷售、一般和行政費用 (SG&A) 以及 TSA 退出似乎正在按計劃進行。但是，如果您考慮投資和投資，而無需向我們提供利潤細節，您仍然必須進行銷售、一般和行政費用的部分，其中包括 IT 基礎設施，但您今天也提到了商業組織。

So I wonder what that entails. And earlier, you mentioned that SG&A as a percentage of revenues would be consistent. But at least for the next two quarters, I'm wondering what the percentage would be for those onetime costs is fairly high as a percentage of EBITDA.

所以我想知道這意味著什麼。之前您提到銷售、一般及行政費用佔收入的百分比將保持一致。但至少在接下來的兩個季度裡，我想知道這些一次性成本佔 EBITDA 的比例會相當高。

Okay. Sure. I think two things there. The, in terms of the investments, I did call that out because it is really important to understand, as we've come out of the spin. One of the reasons you did this was so that we could focus and have the right attention on the things we need to do to grow Fortrea. And so the commercial investments are very much about, and we've talked about this previously, certain therapeutic areas or locations in our sales organization, where we might feel like we're slightly underrepresented and we want to have more opportunities to go after the great portfolio of work that's out there and really focus on the pipeline. So that's the commercial investment we're talking about, particularly in the biotech space.

好的。當然。我認為有兩件事。就投資而言，我確實提到了這一點，因為理解這一點非常重要，因為我們已經走出了困境。您這樣做的原因之一是讓我們能夠集中精力並把注意力放在發展 Fortrea 所需做的事情上。因此，商業投資非常關注，我們之前也討論過這個問題，我們銷售組織中的某些治療領域或地點，我們可能會覺得我們的代表性略有不足，我們希望有更多的機會去追求現有的優秀工作組合，並真正專注於管道。這就是我們所談論的商業投資，特別是在生技領域。

I think the other areas, I mentioned operational investments in SG&A. Operationally, we've talked about really wanting to focus on better resource management tools, which also help with our margin longer term, even though there's a bit of an upfront investment. And SG&A is a very small amount. I'll just, I'll say personally, within finance, there are a couple of technical expertise areas that we've had to invest in.

我認為其他領域，我提到了銷售、一般及行政開支的營運投資。在營運方面，我們真正希望專注於更好的資源管理工具，儘管需要一些前期投資，但這也有助於我們長期提高利潤。銷售、一般及行政費用 (SG&A) 只是很小的開支。我個人只想說，在金融領域，我們必須在幾個技術專業領域進行投資。

But generally, within SG&A, it's not so much significant systems or changes there. It might be around how do you think about places where you can do work and making sure you invest in the best technology to drive that work. So those are the types of investments we're making.

但一般來說，在銷售、一般和行政開支中，並沒有太多重要的系統或變更。它可能取決於您如何考慮可以開展工作的地方，以及如何確保投資最佳技術來推動這項工作。這些就是我們正在進行的投資類型。

In onetime costs, we will see those, especially the spin related ones come down. We did expect Q2, it was the highest. It's come down this quarter, probably step down a little bit again in Q4, and it should, it's not going to completely go away in the first quarter because there are still some things that happen. But truly as you get through the first half, those onetime spend related costs will disappear.

在一次性成本中，我們將看到這些成本，特別是旋轉相關的成本下降。我們確實預期第二季的業績是最高的。本季已經下降，可能在第四季會再次略有下降，但應該不會在第一季完全消失，因為仍有一些事情會發生。但實際上，當你度過前半段時，那些一次性支出的相關成本就會消失。

And we are on track, really and really pleased. I do, there's a lot of focus on this and it might not be as obvious to the outside, but the effort to stand up in HCM, stand up in ERP, rebuild your entire infrastructure. It's significant. So I do think the teams have done a phenomenal job and we feel really good about where we are.

我們一切進展順利，我非常高興。我確實如此，人們非常關注這一點，也許對外界來說並不那麼明顯，但人們努力在 HCM、ERP 中站起來，重建整個基礎設施。這很有意義。因此我確實認為團隊做出了非凡的成績，我們對目前的狀況感到非常滿意。

We have to get a few things over the line, and it's a lot of moving parts in the quarter. Thankfully, they're all internal moving parts. So hopefully, it doesn't have any impact on our customers. But there's a lot to navigate here, but we're excited about the fact that once we turn that corner, it really allows us to focus on how we take Fortrea forward in the right way for our organization in '25 and beyond.

我們必須解決一些問題，本季有很多活動。值得慶幸的是，它們都是內部活動部件。所以希望它不會對我們的客戶造成任何影響。但這裡有很多事情需要解決，但我們很高興，一旦我們度過這個難關，它就真的讓我們能夠專注於如何在25年及以後以正確的方式推動 Fortrea 為我們的組織向前發展。

Got you. And then sorry if I missed it, but in terms of the pharma versus biotech mix, it's, I think Tom mentioned earlier that it's a 50, 50 split there and the large, it seems like the awards are coming in evenly. But how is the RFP flow trending looking ahead, what's your expectation there?

明白了。然後很抱歉我錯過了，但就製藥業與生物技術的組合而言，我認為湯姆之前提到過，這是 50，50 的分配，而且總的來說，似乎獎項是均勻的。但是，展望未來，RFP 流程的趨勢如何？

Good morning, John, I think it's consistent with the prior discussions here. It's solid. We carefully choose our words and we continue to see opportunities that are adequate for us to be able to grow. So we just have to sustain our win rate against those and deliver well and what we see as a solid pipeline for the targets that we have.

早上好，約翰，我認為這與之前的討論一致。它很堅固。我們謹慎選擇自己的言辭，並不斷尋找足以讓我們成長的機會。因此，我們只需要保持我們的勝率，並提供良好的服務，為我們的目標建立堅實的管道。

So I think we're out of time, operator. I think, I'll just close out by saying that we had a solid quarter of execution and progress. And we thank all of you for your time.

所以我覺得我們的時間已經不夠了，接線生。我想，最後我想說的是，我們本季的執行和進展都很穩健。我們感謝大家抽出時間。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。