ICON Public Limited (ICLR) 28 Jul 222022 Q2 Earnings call transcript

Good day and thank you for standing by. Welcome to the ICON’s Second Quarter 2022 Results Conference call. At this time, all participants are in listen-only mode. After the speaker’s presentation, there will be a question-and-answer session [Operator instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Kate Haven. ahead. go Please

Dr. Certain call. call management's day These that this expectations conditions. that of Good to business download not company's including uncertainties XXXX. today's today's you joining by that would differ statements slides are and statements our for on Mr. are our are Thank Brennan. there statements forward-looking listeners implied and call Brendan statements and covering and are or may economic our is forward-looking the on accompany on I available, and statements. CEO, associated have we call in call to materially XX, due to Cutler, forward-looking quarter us with website be will and stated the future guarantees CFO, note risks cautioned from you. currently based like the today, performance. thank Steve industry this ended current on available results current Also those and Actual June information to webcast

financial Form the future are More non-GAAP relating about remarks. filed selected on prepared publicly be they statements either filed XXXX. be as the a statements which and found the presentation any of referencing may company, Brendan to will includes including XX-F new to do date their any forward-looking otherwise. by March these in statements Forward-looking Steve SEC the in reports This and we X, forward-looking are measures made, update of result uncertainties as events, not undertake or only information, and obligation risks information

please Condensed comparable the of directly Consolidated refer to titled release For a press presentation of most GAAP Operations. Statements section financial the measures,

respective Included certain to information purposes. financial or non-GAAP for a compensation stock the believe non-GAAP transaction-related more reconciliation earnings comparable the substitute amortization excludes adjusted press currency gains and not tax foreign and losses, GAAP historical is measures, useful measures, note comparison we in EBITDA expense, will slides, and restructuring investors release superior a for benefits. to you non-GAAP and their are While of measures costs, the costs

be with Brennan. to to to related would the opportunity to we ask and questions each our follow-up hand Brendan one keep to participants call now limiting We their an question. over will one one-hour, to therefore CFO, like the call today Mr. I ask

Kate. achieved gross of you, business of X, Thank resulted basis, cancellations. million $XXX of net a X.XX. billion] net quarter book of in in in a Quarter bill ICON and X.X. On net trailing billion [ph] $X.XX worth wins the book-to-bill awards XX-month In recorded This was [$X.XX to our

With increase of quarter basis. year-over-year new the X, company grew XX.X% $XX to in an or representing an our of a increase the awards combined Xof record quarter XXXX addition of backlog a on on X.X% billion,

rates backlog year. currency quarter The combined a or currency impact revenue X. year-over-year was X X.X% X.X% approximately the was in Our On foreign revenue constant basis. in This consistent by on on a period last in quarter currency burn or increased from million resulted X.X% of from quarter billion. a year-on-year with a quarter $X.XXX increase constant XXX.X% company in X. XXX.X% of basis, Revenue represents basis XX exchange a changes comparable headwind in

in revenue. expense was quarter XX% $XXX.X margin in Total was compared to X for Top XX XX our represented X customer from Adjusted Gross represented XX.X%, operational growth. Top fee sequentially revenue, while or margin gross revenue of Top to XX Top represented XX.X%, our X. due slightly X.X% quarter Our concentration top increased of customer and XX.X%. as X of represented XX.X% quarter strong decreased our the customers our increased million efficiency XX.X% quarter revenue, direct SG&A

of level expected adjusted dollar rate We the of revenue. represents EBITDA $XX through XX%. anticipating we adjusted now initial This the the X, interest $XX.X XX.X% for to expect expense the total was net operating or the progress The absolute The through year. XX% representing quarter. million tax for quarter comparable of expense Adjusted million. In margin our duration as a the similar of adjusted million guidance period rate was effective we year-on-year approximately the year, interest $XXX.X SG&A the $XXX was company was EBITDA expense to $XXX.X are in year, half XX.X%. the basis, million from quarter XX.X% continue of second a to X or an income was last total interest due increase million, quarter $XXX.X expense interest on Adjusted combined a million of revenue a for full-year approximately of increasing full-year January. assumptions for for issued increase when environment was at

for and an operations XX the XXXX at Net the million effective $X.XX, related earnings [ph] quarter full-year $XXX.X a of XXXX. Adjusted $XXX the collection attributable million. XXXX. days at company transaction This XXXX, expect equating for share, recorded XX, generated In strong debt operating the X March account to approximately comparable million from [start tax be net net of X.X% of to rate up $XXX balance net XXXX, remains of on million XX.X% payment the share year quarter or X. or million of of repayments our from cash million in of XX, This costs. $X.XX our per down in bringing net of term, as Cash X, amounted with XX, net to [ph] was XXXX. quarter million integration At B adjusted XXXX. income during balance compared [$X.XXX $XXX of at activities margin basis during ratio the efforts [$X.XXX in of DSOs comparable continue quarter, $XXX XX $XXX.X our to Loan capital quarter, of from $X.X billion] on June to million, June] XX billion], receivable March XX, GAAP prior XXX Cash $XXX.X group receivable June at a we a trailing from perspective, to on XX the to a was in to total net days equivalent the continue diluted EBITDA June compares million million. a with XX, with the was to and a and quarter our accounts debt second the of debt XXXX quarter million We facility, U.S. Capital moving compares revenue company year-over-year. a of $XX.X share and XX.X% per was Group to days $X.XX had $X.XXX the of at year increase U.S. was months debt and From such net the quarter income the $XXX.X income the from expenditure attributable diluted made cash to per be adjusted XX.X%. March debt $XXX.X GAAP position, deployment in ended We a billion. basis paydown million priority a near periods. to date. Term quarter of X.Xx. XX

[ph] flow track of to cash strong on generation, turns] XXXX well remain [X below exit continued adjusted we EBITDA. net our debt to Given

to be our hand current course more will if now structure And actively to changes not said, our but determine the can that call over We with are structure, of we options capital like mix optimal evaluate continue to to through a all I We've attained. to yet evaluating potential would QX. any the made Steve.

impacting continuing X Brendan, ICON employees, macroeconomic strong present and continues whilst good patients to manage affected business. the quarter our war results in to delivered day are supporting ongoing customers, as in Thank number we on currently of in operational countries. global that challenges The everyone. and focus through a you, Ukraine our factors

ensuring the on for Our customers' on the of priorities our well trials. employees, patients as remain effective as and monitoring our programs our safety continuity of

a the recruiting are During or any the impact to in we in new are or countries. At both possible. patients the any not studies step-up to the Ukraine, continuing our of [trial in both and in-flight for Russia this [ph] business we new but future, we saw support wherever time, starting countries work] foreseeable quarter,

China sites to on challenges presented expect most to the and new lockdowns approximately X, spread. of also Number mandated was as have Ukraine variants to approximately $XX lockdowns to Additionally, million for operations of be in capacity from some access, to COVID-XX COVID-related quarter in quarter staffing, an in laboratory in our $XX at second the in We country. site the significantly, end impact continues place impact the Most the restricted XX% war of million. in and full-year the China, now the business. were revenue which

the conditions we month, more in challenges. XXXX. macroeconomic biotech further the lockdowns, demand public funding to in segment and impact remained conflict for underlying which environment our as due Europe these dollar In provided market the customers emerging clinical quarter, challenges seen rate solid. addition deliberate the look past they China the rising select current in spending Despite prioritize from during challenges, In to results full-year strengthening to will interest U.S. the development and have

additional this challenging Given budget. as macro seek we to their trial clinical strategic companies, development companies see input the an the to further opportunity plans and more efficient for most maximize segment penetrate environment emerging clinical biopharma

their fund what due also our the trials with to are vigilant and phase. working to before consistent customers perform on contracting We we remain on continue diligence ability

are rates. trailing was XX-month we broader unusual report their in in-line to or large continuing by have believe companies pleased R&D trials. any and to fundamentals are with anchored mid-sized well market market cancellation the that RFP a with grow basis, result, On we intact, spend up We with seen in-line mid-single-digits, total historic biopharma growth. in As activity industry ongoing a backlog our not our value

addition, small We evidence that continue science. development a XX.X% an to basis. biopharma devices confident good our on against as company fund companies private In basis bill to deliver and in outlook financial supporting to of developing X.X accelerated growth performance our venture goals good on of backlog a to continues and X.X business meet drugs to ability we to our combined impressive capital year-over-year book are remain our the see of and our

revenue backlog biotech from customer companies. $XXX than total of and prior million remained as Approximately approximately periods, XX% XX% annual midsized and companies, our well and of our spend. emerging biopharma large define with we with of of the Our less small those revenue with in approximately mix derived XX% is R&D which company in balanced revenue consistent

decentralized number and service pipeline technologies biopharma, expertise, and our by models development. clear as analytics our encouraged the The of are customers. functional service, scale, that benefits of strategic currently existing and in are and breadth of opportunities mid-sized are depth, differentiated hybrid with as designed new services we a consent our and studies offerings resonating and as new purpose partnership with and are of trial well and of full large as analytics, ICON's platform, built in platform, completed well Additionally, investment enabling including specifically advanced release well the we digital the included to ICON electronic clinical technology future. as on solutions such release outcome that areas clinical the clinical This of trials. latest decentralize electronic features delivered functionalities. In innovative assessments and enhanced quarter,

We way, and continue assessments, to will Mapi a [indiscernible], further we services to related clinical manner. compelling technologies. us enable integration provide flexible services, harmonized sites, that our and solution service efficient clinical and a more and a In trial integrate Accellacare and customized our all faster this services customers. provide support others patient to in data to will of home health

performance results, combined the X% very quarter, financial currency approximately a company resulting our basis to good X.X% constant Turning growth in on of or revenue year-over-year. was second in

SG&A growth growth COVID EBITDA XX% on approximately with was performance XX% company basis. fee was Operational quarter basis, same year-over-year by Excluding as strong year-over-year management. particularly well and strong efficient the continued resourcing on direct revenue combined growth, a adjusted as in the revenue, driven cost

grew share year-over-year. an per XX% earnings impressive addition, In

approximately basis. at updated X.X% to the assumes are million since current second XXXX an The our rates spot This anticipated on on of reflect to for of in approximately XXXX, expected million million the an negative impacts of financial our be $XXX to combined guidance factors a full-year revenue $XXX updating incremental earnings reflects company to X.X% call revenue rates XX.X% million, expected war to headwind and ongoing X,XXX April, X,XXX or COVID-related additional the from half expectation. per same We is our and range a foreign the of as exchange combination range. Further, in year-over-year full-year our remaining the an company well $XX.XX of share results. in range XX% on XX.X% increase now guidance macroeconomic previous to to revenue expects earnings to as synergies narrowing of impact driving of midpoint margin lockdowns of of is China. range The at an for the are in and our realized previous fee adjusted full-year, our EBITDA margin above cost which Ukraine result $XX.XX to points earnings share XXX our basis combination accelerated revenue as direct expansion, we per in growth the

celebrating transformational We capital at in quarter, adjusted with by payment strategy Earlier the with of of our X.Xx new we our EBITDA. aspirational this deployment one-year believe down our making facility on at are EBITDA of another adjusted in launch end Health the approximately passed continue by to our on track X. to PRA quarter, X.Xx our leverage exiting XXXX of target quarter a expected B debt the Sciences ICON end further the We net of X.Xx from Loan to month, ICON. million of $XXX leverage anniversary hit union as Term a reducing ratio the milestone the

and have made with past minimizing ICON's integration over our by the world's from year. and the become highly execution of proud as in progress effective which the our to while have focus challenge leading The met attention, note been particularly commitment disruption our our response customers. We execution the all that testament has ICON continuing that I'm for relationships of in operational customer have over achievements from very to to large significant healthcare bringing customers. intelligence customers our evidenced year continued the customer for formed delivery to expanded two organizations integration numerous positive past be continue has on together has organization. number our project new organizational on a and new There past the our this progressed over team excellent team been to journey as to years,

a One platforms, as and development career experience of as on this the of priorities and benefits our and our shared ICON, at areas employee harmonization to achieving to and well such way training outset enable are rollout the systems throughout was through we well as programs. key in

the or and reducing XX increased closures our we year, have integrations engagement. of the quarter X, of and together completed optimizing facility over office end our costs, staff collaboration to bringing As footprint for past allow

growth reduced programs focusing our in in are target be stabilizing translating $XXX employer for we career now the employees. over Due diversity to targeted of previous on XXXX, of full-year. on million We synergies progress of acquisition, have year. to are accelerated levels throughout the inclusion, ambitious increase this in an to We goal seeing recognized results efforts, believe to choice areas talent and the million our realize and the expect industry and cost our we of attrition turnover first development that opportunities retention investments for such $XX integration the as an half in

synergies efforts revenue million implement remain cross success as we respectively and to $XXX continue our in services place global synergies to total million cost model for further business in opportunities. drive and sell focus targets of $XXX our Our and

customers. while XXXX, expected our synergies the as continuing With cost the achieving synergy ahead the great XXXX, of ICON best-in-class made acceleration we of of million our now we deliver our organization, exiting realized our year to over previous scale strides $XXX cost has doubled guidance. performance anticipate past XX-months target in to

customers' technologies, offer. changing enhance further we to With We remain and need the evolving critical and continued macro to committed further talent solutions of of importance to the clinical and ever investing flexible complexity the our in data, service trial, integrated needs. innovation growing the for recognize environment and meet

Q&A, thank past to moment ongoing I to now efforts new take our their questions. employees significant moving customers, like the of in commitment to would dedicated driving our to we ICON. the company, their recognize for to a and for and Before quarter success are ready over Operator, patients.

to And take Instructions] [Operator first we're going question. now you. Thank our

question Evercore comes from from ISI. Anderson of The line Elizabeth first the

question. open. is ask line Please your Your

the a Hi, in of more I the you bit the the of it you I detail for to, picked sort can win [indiscernible], question. the types sort rate also quarter talk looks I and cancellations, you two said [ph] by, feel things know little but about, nothing unusual a there in of with talk like was bit in little was you guys. translation wondering up [effort] One, about, Thanks on think that else can like in much to specific about something RFP of customer I forward? sort so didn't things. and you provide changes don't run sort could you. terms rate in And sort or sort of know going alluded there we and Thank a program the in then terms that that you quarter, think biotech of know was perhaps some of on go if of potential out can funding? sort in

Sure.

Let me second one, take the one first first. the sorry,

In cancellations, really did terms on a studies starting working but down putting and planned. work these forward. fact, was were are of changeable wasn't significant to a around couple somewhat scoping vaccines they up just completely large, It's they it as get the cancel. slightly, or in tick vaccine It that we of studies to they with, anything of

patients, came side gone the uptick they of major on cancellation scope. couple that of moving a the That a they're things. for but got actually at still within have into a sort backlog the had uptick stocked, out we So, forward, or was because reduced fewer the driver down

stuff that terms there taking really in So, we out. nothing material of saw as

I longer-term with think quite the can going be about can as be look do of We really, careful little somewhat terms RFP. numbers, when they volatile. and you quite they I at them business RFP, vary quarterly significantly performance, to correlated a think In we're but directionally see

into large a quarter, which can the a a with be numbers we careful quoting ballpark the start on particular skew want a lot. quite little RFP. I just You get to when

on they XX-month. said, up trailing were a I As

I take think us. COVID out, trailing look at for on way these you We're that about to if a XX-month And flat. is sort of probably up were the mid-single-digits. things. best pretty –

certainly positive In wins, [ph], as have I bit a and sort say, of our proportion you terms bit were cancellations of midsize. But pharma the or year-on-year. the to There's we RFPs little decision. any of environment. the and to RFPs, you in pretty suppose a have a And solid seeing a large little careful more and the and The have, sort losses, forward [genuine] of down segments, of you biotech’s a be you little to positive a have see move business a lot overall, within mid-teens really RFPs. percentage that don't actually get we're I

so, how think you you little do this a data I interpret to have RFP And careful about in industry. be

if Okay, give missed quick I one] just super the one [ph]. Did helpful. Maybe in cross-sell sorry the quarter? it. I'm number [factual you

We give in No, we number specific didn't on cross-sell the that. the weren't quarter.

Would you to? like

I I'm that. Do have it. not if we have sure

off far not the annual on basis. an [indiscernible] We're expectation

I about at we're XXX from up million the date cross-sell in think think overall, to I close.

So, do. that's what year. in-line much to expected in the pretty with That's we

those cross-sell. in course, terms track So, but the on longer a flow terms to through year on little we're The bit track. sales, on of we're of – we're cross of with date, to on takes, sales, revenue

much, Thank perfect. you Okay, so guys.

Elizabeth. you, Thank

question The of Rains our line to the Blair. comes going standby. take question. William Now next Christine Please we're next from from

question. ask your Please line is Your open.

for thanks question. morning the Good and

your mix how You made your targeting change strategy customers? these And in trying ideal but XX% at what is you're are you're that small them? comment solutions to penetrated with you're does now, become biotech, resonating And when smaller here? what the Thanks. more

questions of Christine. there, Good. Lot

is capital we the XX% Just the those revenue. about million in define or annually be The in biotech R&D. call, of spend XX% we biotech. clear, business market, that of biotech, what them less about our as companies That's XXX small our –

business little is. clarify where terms to just in So, a of our bit

– in have in so getting our opportunity. – those and ones, contract there in a to lot [vet] answer [good businesses of mean, terms doing that do terms [ph] we some more So, in [ph] – signs] penetrated, is see opportunities of large of and a question them, companies in And with do forward have [ph] them third there in space. including There of [slow] and of real and we very I very we about biotech, half there's and what we are about with as we as they your pharma. I've move many we them. we how some indicated, them carefully are midsized

have we're their drugs would and efficient strong and that. ability bit way somebody develop devices left we And a their it’s to them have We or to help they finding done, working opportunity on in that a that more maybe have perhaps a do that else. with own

in group. put We clinical companies look development We more a registration more see can spend like their see and plans plans, spends and we runs have way efficiently. programs, a their at studies money we'd as essentially more we strong more drug effectively opportunity more their money That's and their it. space. together deliberately plan the development their wanting to the That's the effectively. that effectively, to Plans

you. Great. Thank

Thank you.

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your Your line question. ask is open. Please

little growth potentially side? just on remains setup. on talked versus what next you muted, guys what had maybe high-single. pretty funding what plays the taking talk could still that more the into, a Steve, your guess, the mid-single in about, a mean, next look saying, side. I just seeing intra-quarter of a set scenario generally like is about little currently, scenario one year the on year you Thanks being of solid, XX maybe little you're into about kind the Can you I guys. maybe I questions. Hey, a talked know biotech for backdrop bit bit the

you're for? Patrick, growth for the looking On ICON,

Yes, Yes. absolutely.

Yes.

Okay.

the are So, at X% basis. – we for standing longer-term we're moment, our plan I behind to X% the a mean, on

to plan billion XXXX. to get a have XX We by

we in current that And us into talked about. high-single-digits and year. that. the moving as we sort about direction We've environment that's don't get thinking of anything this see the going that should number would we the of stop back-end be in So,

years. about they're down thinking next in the over levels, the but attenuated it's good The in a absolute are a in lot it, and about the few norm place. look environment, still quarters, a of basis, – last funding there's it's We as and couple of come a we talk from at if through historical pretty you go clearly still

probably years really You to the XX if an is very of we've average be extraordinary over go there years, of the five solid. basis got at still last four, back three, to last XX, out few sort had the period Difficulty] on you and money or a look but it really there over amount that's [Technical

of that who We three opportunity with. And plenty a still RFPs seeing we're million to so, raised engaging over well of to we had and customers. them Xs, recently, $XXX talked Phase customer with see we're opportunities their space helping which yesterday, and just and in prosecute

drive and we there outlined and out science] [good can we can expectations, our fuel we've our continue that feel obviously previously. [ph] money which growth remain as customers that is there that help for So, to

pull you're forward the kind numbers synergy for then talk well. margin That's bit. pull then one I confidence guess, a jump the bit seem helps half level increasing and the cost given And just as your like Brendan, the synergies, helpful. year. doesn't that you you incrementals this forward then work up Can of in as of kind on as through a terms Obviously, year Obviously, earnings true guidance And the kind maintaining in way just about, obviously it second the well. the the maybe you synergies on a next that of guide. year of

trending you're better obviously how kind to deliver So, as can this the about able and then and year year you savings of talk what's just there next well?

pace – in second his mean, No, need to set progression think We've to half, comments, I'll our around plan back Sure. we've even our progression as continue pleased an QX, big very certainly, we're execute and a in moment. we And to to a in margin saw, realized And we with obviously. do in XXX. I of organization. to our We good efficient We execute moving through were that the Yes. before, or yes, that, we continue QX. we're Steve mentioned from XXXX a our [XX] need up to but [ph] get got additional about come on getting I well synergies I like margin QX. that XX you plan we as on think the the to be feel spoken continue need in in to QX, ambition as to as we're a for with in

use and well. the as from good given I'm And with and think underlying solid as quarter. solid So, business margin go efficient of current our we our a particularly strong staff good fee projects profile very debt, mix through again, very we comes good happy the our quarter second in gross the from that of a direct perspective, a

of solid. our synergies. in able good we've on pipeline working to said, profile of visibility margin as and to kind half the the continue to And deliver that I on good got that year. the So, We're be business remains will second

I were pretty pleased to that $XXX I'm from harder and announced of that, you we've guys our think going visibility just back be we've Nick, course we're savings the good, obviously, I external XXXX certainly we million very know from got cost and many then on now realize and feel to And to feel good have on always able timing implement synergies XXXX. of drive years that that million of think we're we we synergies look of deliver the specifically, so target as will we the we'll the going interaction. of in kind managers that to We $XXX there. And during that those to onwards. totally good to realized

update We've you And running one. through made. as there. position try course We'll now, this So, guys of go we're a that, do continue making of year, to yes, we'll as ahead in the on with we curve the to go obviously through if been we good like that. right we we're the progress we've course, feel happy the progress but on better we're of

Helpful. Thank you.

you. Thank

going to Please the Now the question. next we're question standby. Draper take of Guggenheim. Sandy line from comes from our And next

is open. line Your Please question. ask your

Thanks picture. very of and two I sort maybe then much. If housekeeping in just one bigger sneak can

just Brendan. I have it On the housekeeping, make sure correctly to

other the are is that? that Is to coming Steve the the it million a looks total of Ukraine other it of just is to like one the notable then probably question pipeline, build time, And So, driving to sounds strategic get compared is, there that's commentary trying great? those replace before was make X.X% now up different to any just is would there I it I past? that now $XX questions. sneaking or sure $XX additional it's for those incremental it? people then in [ph]. and XXX] million – Is things assuming headwind the FX make for And or X% looking headwind for [XXX Russia, the housekeeping And be and to to vendors, thanks strategic China X.X% to want strategic increase just the opportunities revenue the that's first

one I'll first Sandy. take housekeeping the

to headwind. guidance said chance foreign [ph] about million think call identify there to I of a of midpoint We the had them that to to the exchange once by we quickly is, way be $XXX maybe look is [XXX our able moved think the you've this on best XXX] up. to obviously about

bigger other more in we about be it $XX Obviously, of kind and probably the less Ukraine its I talked is then is think quantum. relation in fact about, or call of the issues And to Russia, a Russia remainder that the in which China. up mentioned own we terms. there of would macroeconomic environment that I that percentage you're Steve does XXX million. Ukraine, the the a numbers mix on think tie talking to Albeit,

So again, some the you numbers. that we're of about can talking that continuing our see still to fact headwind in offset

adding every it's years tend much or player the Sandy, these probably In So, buckets. really others, opportunities refresh expanding idea some the that cases, And I to into there's cases, we kind of a of three an of the on terms In market. things in are the happening. component case we customer. number a to think are. many question, in a very up come parts In what replacing. In some different for now in discussions and of cases, a it's you fall that gives of four strategic that's

of And either so, in space to we've past wouldn't that in capability predominant, it's have that as course lasted then is areas, Interestingly, talk well. service there a into not the large to because mid-pharma of who functional perhaps that are the the of in important some a and both And but model, been service just those happening of very about customers the able sort full fact the come hybrid also as the be case. with some functional component. discussions been the number we space, tends they're us to although pharma to organization want individual have full

of number pleased come longer-term well-positioned partnerships. a don't place our with board, strategic strategic service view in do that a view time we good point a a And these of on bit take feel – a of they but little with from where you company. we these we're to these They we're offering to we're discussions feel and of for they discussions to So, yourself, a go. be growth part know with

Great thanks.

Thank you.

from next Baird. from to Eric standby. Now, question question. And of we're next Coldwell going the comes Please line take our the

open. the Your question. line ask is Please

synergies, acceleration very And what Thanks, were cancellations, the cost my actually the versus and recent PRA service past. sounds below which in an above this like model, morning. there's average. ticked revenue little some but impressive. maybe on anticipated you maybe and possibly up good improvement. a in but the wanted to do you hit mentioned have margin you Obviously, I expansion it It's actions also

I related were to if that with might have COVID lower those said wondering margin more are start that such revenues You just you the to vaccine one have the been pass-throughs that Thanks. than follow-up. pass-through benefiting anticipated optics perhaps from I'll I'm question and start year? studies. on the of some

actually Yes. a Eric, on it's a down And quite vaccine, might give right I study, crack it's you're vaccine not although but scope. a your – at here. COVID it's Brendan it's this. a

as business always talk know, On pass-through. wins right. a and you biggest principle revenue of studies, you're always pass-through we in our vaccine element, So, our and there's

in that little me make the in correct. terms of That's giving hint on I I probably a – little constant on just there the a quarter here uptick our that Kate’s ex-COVID, cancellation We've XX% called an out direct is fee call a happy been point. basis, mean, perspective. plays quantum yes, to clarify the a it quite sure year-over-year to put revenue absolutely us growth currency there basis, that up in. So, from against XXX bit with really it's in our we

suppose through been talking with we've that's year nice of mix and and year, back performance. year. from the non-COVID we of And course I margin a pass-through as and visibility terms in strong been playing course this into that expansion When that strong the then a a it step of about perspective very margin comes to proportional So, good it's came our the of over well. through dilemma go proportional the of business the in business, that's been we so positive down or obviously, as the is

So, with with to earlier I comment expectations. pleased on. said, point, as in-line it's very make probably I margin that think To our gross this

utilization business. good of are we So, seeing our

a anticipated as good non-COVID utilization headcount COVID, So, I year. we things. the strong half that and mix through of of suppose of went It's it's an perspective a really, as from of first headcount then with efficiency delivery revenue and couple the really better operational

with at of So, wouldn't expectations happy this where our progressing. line say yes, I we're stage, but we're out with certainly

about talk net a bit turnover accelerated my question, side hiring, environment, broad the Can you of Thanks stroke the just headcount business? then addition very And little seeing situation, you're labor have headcount capital number. the your addition, about a on again it's great. very a on human much. the this recruiting you quarter, Okay, big what other on

continue that Eric, we Steve. one. take Maybe pretty Sure. it’s aggressively. I'll to hire Certainly,

of rate. a rapid people pretty at work lot in to bringing do we're and a have We

The think In terms And of as I but bit or a able and bringing the month the labor it's we're say, people easier. attenuation two significant more labor in market market cost they ago. is seems relatively not the itself, as to that ago. or much words, then rocketing costs months be, that short significantly to crazy. certainly it's some a year little early, In the other even we're similar, over seen challenging. of we've be two There it's are the But meet of modifying certainly are some are perhaps I our than seeing certainly, last of that. think of and perhaps It's a – XX were to in the period, goals becoming they let's little terms impression but sky not recruitment. recruitment in were, costs

is point shape. So, I of view, our from that recruitment think good in

best able I'm from for would constructive, positive but feel is things to doing programs, the the salaries place, Our have retention interested that repaying pricing right moved terms quarter we're or making in negotiations they than constructive to that is the seen that last the really it, bps, improved so. a it's we hundred over market and time progress over people with understand for if certainly it and any to say, in the market bit in whatever sure – XX to that's perspective, development years. Again, you're last good been now a be number be We're making up able of We've basis. training people. XX% margin in also the well And modifying in little more way probably labor to I the industry quarter-by-quarter on that several sure a a over customers month-by-month, pay direction have we in us. interest do opportunities programs put of retention our I've people

the on those and we with can surveys. discussions. So, that are our with independent honest have that We We – that partnership sort customers helps really of customers I discussions. angles very have our get think help board

data We help customers. and good those have are available pricing to those with salaries does it now on have us discussions what

quarter] all-in-all, overall, would from the be So, from improving is whether recruitment market it I or and say [ph]. labor [the retention

much. very you Thank

Thank you.

JPMorgan. Please Woodring to Casey of next from line we're Now, question take the from going standby. question. our next The comes

your Your question. line Please is ask open.

Hi, guys. Thanks for question. the

So, DSO been days. looks just It it XX noticed full-year, that comment can reiteration to sequentially the guide XX% had of I like DSO which you quarter? the days on was to in no the the for there XX% and increased prior XX

on the have there's you updated that wondering just and around balances SMID that's if concern side expectations there So, number if any driving any cash up?

quarter. It’s below QX. take of course was want We picture year back here. backend it and as Hi listen, in XG Casey, to a Yes. the No, think the Brendan of we one. that certainly I'll the it the into see about

at using. We location a are but the terms management our also heads, lot in change doing finance the of we're moment. of That's in systems organization of both that

So, there lot on focus that. was a of

is book cohort worries We any than DSO we give bit was second debtors was that write that more anywhere elements great any a were that then of of perspective there debtor upshot in – year. of thought little It quite from other there focus of any there me the frankly aging our or need So, an else. base customer and on in nothing a or the [pause] to me particular and half triple doesn't the our a of that is lack [ph].

any So, a that. still cash very of very, collections solid revise profile, wouldn't

we a course as cash up I QX. that go pick again to always a that And year. expect quarter in the to from through terms of QX that cash the in We our I into of and dip flow expect So, but expect in bit see second operations, nicely. would again, of

organization to on get here [ph] [XX] end making of Certainly, spinning the a good and the to we So, come to we the at would no, by moment. generally We're in this the little a speaking, progress, the of more back lot finance the bit played see done. work time be like year.

Got flow, just RFP down SMID was cap it year-on-year. a the on it. bit helpful. And you That's said then

of how CROs. other are if customers One just of the be RFP time inflated talked may this peers fishing between price from flow for day artificially as your these about SMID during smaller a biotech, lot

of customer of cap out base, dynamics? you those flow your for believe than SMID a you this is called normal given is do that little and RFP higher true you. So, Thank kind some maybe

seeing Casey, that. not we're

some, get with number ones you the you that categories, indicated three be some in or get really of the canceled. never some, tend hasn't and there gone least other for we at RFPs, canceled sort indication. And pricing sort been any that not I intention to pricing that had some the I up. We're discussions As lose in words, ones basically – get of win outsourcing. submitted have of seeing

As said, the across it's business. I fairly consistently in mid-teens, the

seen customers I in that our successful moves general, of the just last out an there not any them haven't towards of believe that's throwing there [ph]. or up over valid XX% the of are [not] it biotech award. stuff go don't for the or that are I We I would award don't sake award, stuff putting say it. evidence unsuccessful see quarter an but out

just have I confirm, may Casey, with your finished questions? you

you. Thank great. Yes. That was

Thank you.

next line Bowers The to Deutsche Justin question from going the Please our next we're take from Now, of question. standby. comes Bank.

question. line is Your Please open. your ask

Hi, good everyone. afternoon

to customers were Just to And shift of type something solutions of revenue? up enter if service DCT, couple can are when following more the quarters, awards, and kind full the you us in think in now of any the burn help last has backlog full the seeking FSP the in it's would through over actually been etcetera? clinical, of of whether up mix, on how start and that the show what backlog context service kind

Okay.

answer part of trial. clinical more shift the demand we're or our Justin, in for mean, seeing an these components So, increased to solutions, within certainly question, first I decentralized your decentralized of terms

solution of we're all but whole to platform not and able that components. their feel place very a many platform. still because provide, trials, decentralized not We're we decentralized the good services there around are our as So, decentralized a do we develop have we fully in if

probably more that's think the shift play. more that's monitoring a to come we I pandemic. A happened really So, seems out be in risk-based of as approach

of We're demand, on care have the moving e-consent, – call been with home sites. our over the sort services in areas. health Our [indiscernible]

So that a say, would would trend. be, I

we don't I service, full versus FSP of think way. terms either see In any move particular

to partnership the as a As service full in who to our mentioned provider. well want as the functional are option looking of with of terms have provider, of discussions, partner I a service companies us many

do together. their parts Some portfolio, want of or want their a of the to in-house may – other service, to or or functions part provide full have it portfolio of they they oversee their functional they have [indiscernible]

both areas we're those to of So, business. able sort provide of of the

So, a position good that's puts and around those in discussions. I partnership think very positive for us us

and burn, backlog the vary. of terms in In timing of terms that can

you get If a you you you and Friday – start Monday. could get rescue it be project,

into we have On a hand, put the there's to goes in we're it decision what no to months. into other it's if about a careful pretty a first also our go our – go things program. projects in made We – XX backlog put in don't be we backlog. that X don't don't months about think put beyond, And patient I

into months It goes would X at months average, would till times. So, a times, can start say that say. of To you longer it can it's little a That's but ballpark. be managed, than I probably would award of give our indication, at we little conservatively it's to some on sort from fairly sort I backlog X work. faster than is sort that be of – I that's say what

backlog few like you're how growth of on follow-up next that. much That's in quarters? helpful. to over the ex-COVID expecting it just has Thank one you. still And COVID then It And the roughly? accelerate sounds

in maybe year. We be the around to expect our about COVID X% the of second half less the revenues

that certainly some in No there. in about the COVID backlog. still work there's So, question

growing In to is faster mean, through, number going to XX% excluding of and going on able COVID ex-COVID, I'm that terms not a growth I on basis. we've the currency I studio a Justin. constant you the that stay think good sure that's acceleration, we're of get tell XX%, to pretty I'm rate be been than

certainly said, with margins. to sure already non-COVID we've faster And our for as us faster, we I revenue see continuing certainly our So, said, I we provide grow. continuing but as I'm that, opportunities improve to not to than see said, continuing

is of we Justin, of in that revenue and that work And around Steve that similar around just that to percentage is expect, COVID which it and backlog, the on level X%. percentage quoted

So certainly And year. the revenue work that's year. reminder part as the of terms second year was of a QX just in last go percentage through COVID highest that as expectation our the last then we of

So, toughest comp. that was our

Yes.

Yes. Appreciate all Thank the questions. you.

you. Thank

from standby. of question comes are question. going Please we line next next And to Windley take from David Now, Jefferies. the our the

question. is Please ask open. your Your line

shift for both sure a emphasis seems Hi, kind question. wanted my Thank the fee on you in of growth, what to are bit you little understand, I maybe Eric but elements down about taking on good morning of highlighted then direct DCT mix parts demanded. of toward of would in modestly and what pass-through talking then change and asked fee, in direct make elements, I solutions are scoping kind but good that also incorporate to drill the it being afternoon.

And of, that's through direct mix how as if evolving? so to are that coming better feel of I Thanks. wanted bookings And your, of and how mix expectations it forward kind you just like relates the understand demand fee appropriately of through pass set? are to backlog versus

wouldn't were we come crack pass-through like last I to completely and continue take a might a and of very what downplaying Hi, year outsized. Brendan is will the one. at revenue really I extraordinary where pass-through. to It’s first makes a it's obviously David. half big obviously suppose be, I to of in was here. element period we've our Yes. this mean, I that think just

is the did to definitely before back going COVID. represents less think way or that it I no to we where now are pass-through about think than it more period though a

mixes the So, we're not COVID big of studies on probably that, like go is same COVID as back we proportionality we're made X% and to but studies you of business kind seeing if Vaccine outsized about backlog of the forward. Kate point the supersized revenue kind that those and wins we're during obviously saw of era. both trials. element an that of we

profile but But seeing course, of something and is changing back perspective, year. important a they a we were bit lag back we're revenue margin the is but of as that margin think elements probably from half pass-through move mix in it's that to margin quite where numbers the So seeing is I and be XXXX up. bear as mind, in a because over the about of certainly COVID-bubble the profile said, really the the really will that's

Okay.

around I different the to think your question risk base. just David, second and of add part DCTs to

here I and I more tell longer-term to think think relatively that the but more in source margins, a the you short-term, driving that's And will fuel our margin wouldn't of of I the a that I do that's real that's in want longer-term. plan. think sit

the continue to I'm old looks as know ways, XXXX, the – if if constant the wondering of a year, you in of manifest you could middle completely in [XXXX] SG&A of the it of just maybe on comments But XX back might on kind relatively the Okay. kind continue million, to about a dollars of SG&A continuing doesn't said, in in stability Brendan positive the half on your through dollars that ways, the beyond [indiscernible]? incremental the back you [ph] remaining realization curious that like SG&A to SG&A line. did how kind XX second can ratio kind of with way, an synergy the you scale million I'm through old or

mean, become Yes. become I floor. I the floor. target every mean, every will like, to be will the [indiscernible] honest,

to a we We targets. think So, can don't We as get don't conservative we're if them. we our and bunch. target generally about talk hit

talk next don't target about we first before the the one. also We do

it's visibility we that. So, good fair say, I think do have to to

continued our as leverage through significant go we probably the leverage And to SG&A to to we probably ballpark about that yes, leverage on when to XXXX. on Analyst continue within when over and of it's see the big X% as in about XX%. down I And a from think to on going time. will I think February means do our that back X% that of we ambition SG&A in said chunk SG&A SG&A. coming it a talked base Day, continue We – our I ability even talked our were to that path we

for absolute our dollar So, our how I and that's about XXXX. our within within ambition XXXX SG&A. certainly into of we're and scope flat dollar Will think deliver certainly thinking that

this do wait lot point, I think we'll that's continued to have about and ambition at see certainly, one, but leverage. David of we a have

you I of care not own If labor Got labor I just comments stress Steve, your increasing it. your Network, the the we of the the, one I for comment recruiting, I of and on at might the owns the can or hear kind that for, its that kind site of throughput site how rising, Because unique be have your would you perhaps And a on somewhat level? wondered level chain out still etcetera. more might into boots if in with site the consistent trials of And affecting system that ask is force that the kind are throughput and level. at ICON what the maybe supply Accellacare appreciate could more. on health general. hearing a retention feedback we ground think view

good point, Yes, absolutely right. it's a really Dave. you're And

our people coordinate to And by an some at terms seeing they're have more we place and of level, staffed front the that of than own availability that are own and in of by site Accellacare feel in a in better manage have of labor. ability challenges on cases most and labor we're course people. most we that. We or supported particularly We because site our our

been, their that more enhanced. the we're already have finding than labor force because of the been starting they sites we're of I part provide. perform So, is And Accellacare able but the of are performance think to it has to stability even disproportionately

of some of the is be some One home obviously health care actually the but these within network, not deploying and may we we support. Accellacare resource have that that opportunities of with resources needs our other to sites believe our

can pursuing a until some we there So, because resources have. get are those benefit business actively opportunity we we there's of well that as from

don't and they home, to As I the they the patient's say, in the help go go site home the to healthcare, site. obviously

is a there there, opportunity so but And challenge. it is some

we and Study nurses cases. I right many a that very lot CRAs sites under recruiting in coordinators, across from are been brethren good have our the doing study think is industry, pressure, of the site of sites. many make

us represents forward. And so the sites going but are it's pressure under for a opportunity that, challenge, I as significant also some and something say,

much. you Thank the very answers. appreciate I

Thank you.

Please question Luke of going from question. we're take And standby. the Now next the comes Barclays. to next from our Sergott line

Your line is open. ask Please question. your

Hi, half. had Salem We just for this have COVID headwinds is in a Do question second Luke. any there? color on on the you

sentiments, just talked ago. we there think, I about a moment

most year-over-year of the think of the the be in comparative first year. the headwind half I going to was on always

of it. see the mean, away it's but the not gone to obviously climb in QX. entirely year, had You'll most I the significant half was deal in second we

So, extent a bit we've of the QX, an QX. element of same that that in QX, seen QX, but not in to

Got you.

redundant the question. Sorry for

color pricing there give on us question well? you guys any on RFPs, could We environment as the have another

changes and of major conversations to around in-line increases. the any and not from had and see just think have we've terms but I current the previously our as there. them to and we an been pricing environment, spoke in the current in our we with in ability rate us the view, their move that's think alluded staff manner up market an don't customers constructive market for for of have I a I to rates amount inflation, with in on challenges the point or with pricing I

be particular don't challenge pricing a But competitive it any That's very be. always how discussions see mean our we – in it's are with I think, I a industry, industry. So, should at challenge challenge and I or driving always space any particular issue expect to soon. competitive, the It's moment. to change continues of that's it's that more going don't in competitive anytime a

That's helpful. you. Thank

Thank you.

ask now line next the open. from your from standby. And line take America. question. Please are last We Bank of going the is to our question. question Please Derik The De comes Bruin of

on your EBITDA, good good previously your just, down targeting from Now, gone X.Xx targeting but M&A leverage, site you are bringing more is have in progress net on you're afternoon. talk now the down? well maybe networks? as This Xx continue that in you Derik. make do was Where as to you're the Hi, sub you for could and it you [Sean] you've pay to pipeline aspirational your debt? or leverage market continue [ph] morning you On terms data how X.Xx assets, there, and to share pursuing repurchases Are to is? about of starting in-bound discussions additional

at a the Sure. are point we view, on share From buyback focused really share of moment. buybacks

are debt down. We out focused laser on paying

and [indiscernible] the are expecting we're scenarios percent very is in interest doing at and price on down of rate use of debt an is forward with As share focused you say, at that think best modeled on paying the I capital was into what very, I our know, going and interest yesterday we're as we our is it further Fed the moment, that. rate likely the our our from increases. the where company the we've rates, basis, think point put to raised where it moment view And

moment, a into that review good get to more down have some year. get as the but to of the and basis. So, our such that of in there real or progress as the starting industry. At X.X we obviously, go we the us, also mentioned, [indiscernible], could data front, our of target least and next often buying bit network talk macro M&A of obviously aspirational we're opportunities are there's Brendan we seeing they pipeline. to that environmental And around start and back at at that on of on about, the as our moment, that under thought think we we're we lead be as or be X the site through consider shares. Well, we obviously We'll – making be will probably business. And to we as challenges, in about all economic in parts you for whether think opportunistic a other look no

faster us better. that. business. We around some clinical We do get patients opportunities are very continue into in see clinical want and the to helping trials to focused We

next are site data at. – quite that's areas so but consider, the not where – Data, pull around on trigger we're a would those networks we area to are those at the on opportunities looking focus but the the and We're moment, paying scan I really in And available the sites analytics we're those so, ready starting months at environment. or may looking [indiscernible]. as to the at the the rule XX We're be is the laser moment. said, what on

surrounding XQ, talked chain supply ongoing Great. you there? And you. Thank supplies] [kids challenges some any [ph], issues guys about

did as alluded to. [Sean] resolved we much No, pretty those have some are challenges now. I [ph],

our previous are on now in on hard As in [indiscernible] a better front. we've on we call, row front I the get and worked a place mentioned that that much to

that situation is resolved. So,

Okay, great to hear. Thank you.

are There for Cutler closing remarks. and questions like over Steve to the no further you. to Thank would conference hand

Thanks, operator. Thank joining the you everyone for call today.

for extend of of and are to across We financial drugs performance their XX,XXX have a you our continued quarter Thank of mission gratitude day. over delivered and to our pleased devices. customers' accelerating another our solid development globe to employees have the operational and good and contributions all,

conference Difficulty] Have nice today's call. day. disconnect. a concludes This [Technical