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My current understanding of reports is that each row replicates the formatting from whatever sheet it pulls from. Is it possible to create conditional formatting rules within the report itself?
You can't do this directly in the report as far as I know but you can copy all the data from the report into a predefined normal Smartsheet that is already set up to apply conditional formats to data in the expected format. When you copy and paste data from a report to another sheet using keyboard commands any formatting in cells generated from the report process gets left behind.