ICLR - Earnings call transcript Q3 2021 | ICON Public Limited Company

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Kate Haven

Good day, ladies and gentlemen. Thank you for joining us on this call covering the quarter ended September 30, 2021. Also on the call today, we have our CEO, Dr. Steve Cutler; and our CFO, Mr. Brendan Brennan. note slides call our available accompany call. to that webcast website like today's are there to would that is this and to I download on call forward-looking Certain will in today's statements. statements be including based on expectations currently industry These statements current management's and are economic and current information available, conditions. future by cautioned not associated may company's with differ implied business, those that to are due performance. and stated from results statements of risks are forward-looking the guarantees statements Actual or listeners materially forward-looking and uncertainties

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

Sciences January adjustments financial for year taken metrics the Health had merged revenue For consolidated of of EBITDA the the that the with headed for X, combines presentation of reconciliations please earnings information information. include statement if measures, measures press financial GAAP stand-alone business, XXXX, conforming Please release combined comparable and refer condensed the directly a Plc the GAAP with place as measures most included investors the year-over-year of merger to and the directly analysts to we operations. PRA presentation. for refer appendix To presentation to information current have comparable and These measures. the ICON non-GAAP statements financial most assist comparability and on to company other adjusted

statements each these These financial financials financials represent GAAP S-X. combined not company. of historical addition financials pro represent intended forma in or the Regulation prepared accordance to Specifically, are of adjusted with simple a

for [Technical Mr. comparison substitute hour I useful over measures, CFO, believe or to today are historical superior one call we would is measures the While non-GAAP the not Brennan. certain like purposes. comparable non-GAAP difficulty] to call our Instructions]. a the now for Brendan to hand financial more investors [Operator to information GAAP to

Brendan Brennan

billion. Thank you, wins for business backlog of total met end the [path billion, a X, the $X.XX include million quarter, $XX.X recorded legacy on of achieved of quarter figure keeping billion record in net and X.Xx. on backlog backlog the to was At X.XXx, methodology. ICON's backlog third reported three, trading a ICON cancellations. In beginning XX-month book-to-bill Kate. gross quarter at ICON net of and a accounts $XXX adjusted from $X.XX Consequently, of XXX PRA awards along This in consolidated worth were in resulting the backlog basis book-to-bill and with a trues] quarter of

included stock constant X a gains XXX% the or closing rated With grew revenue respective company a last of revenue on combined earnings increase integration our in currency increased billion. year. and basis, note an their acquisition. that EBITDA tax currency year-on-year X, On non-GAAP you reconciliation amortization the was and quarter foreign addition period the from a the increase benefits. restructuring compensation the press in release and we of the X% slides, backlog and representing Included adjusted basis. represents of $XX.X losses, costs, costs record from to in and Adjusted of expense, awards Adjusted billion, the This XX% quarter XXX% comparable transaction a $X.XXX will new excludes measures. of a

represented revenue, customer new quarter, the of revenue. In X and representation our top represented the the ICON key diversification customers is balanced increased customer of third segments. X.X% of our and across XX.X% our One of top strengths customer

was effective was of top $XXX margin XX million million, for adjusted million comparable Adjusted the in revenue the SG&A or XX X or a XX.X%, $XXX revenue a was quarter, for XX.X% $XX.X income of was the X and quarter the while quarter. adjusted adjusted last operating XX.X% net in EBITDA combined the Adjusted quarter. the revenue. XX%. XX.X% margin EBITDA Our expense company top represented million representing XX.X%. for XX% In was was period basis, year, of for The expense tax $XXX.X year-on-year company quarter quarter rate on and interest represented XX.X%, of increase On adjusted adjusted gross a our was XX%. the combined basis, a of

to for rate We will fourth quarter XX%. tax continue expect that the the be effective

we the basis We plan to give expected an go-forward to recently tax changes Ireland. and at OECD our will per a attributable for expected the U.S. million, to continue corporate quarter in XX.X%, tax through the global the given to tax that on $X.XX. of more rate on diluted been of minimum We income group we tax have yet when tax was to a position, net anticipated not new increase deal margin Adjusted rate share guidance, which target on XXXX the the announced $XXX.X work finalized. point clarity update issue the have earnings to changes equating

GAAP XXXX, XX, XXXX. had of compares company cash This from $X.XX loss of net basis, of transaction billion. group of debt a days a X or net leaving This compares the XXXX. at Cash share income equivalent of XXth loss compares Net a million. and The receivable Xx. generation at and the a of GAAP $X.X million near of deployment expenditure of the September million. quarter was days million September September per adjusted net at On operating of Capital company compared XXXX, receivable activities XXXX. at days was debt capital net At the September quarter the on integration-related or We to end net $X.XX XX, $XXX during down of of ended the synergies the June XX to cash the and $XX.X at the billion, million This balance operations X.X% to costs. $XXX.X $XX.X of XXXX. per term. prior million was recorded net pay a period. trailing at from accounts $XXX.X $X.XX at comparable a June position U.S. revenue. amounted for share XX, September, million cash below days $XXX.X to sales quarter, million the XX debt quarter billion, debt outstanding in XX September to with $X.XX $X.XX were U.S. including XX, attributable During year in and was XXXX, of $XXX with million EBITDA, end accounts $XXX.X XX-month of XXth to XXXX. priority the remains

said, our unchanged. generation, of Given that With end flow all to the the XXXX goal now cash hand stated and our expectations strong by Steve. over call remains EBITDA like reach to adjusted I'd X.Xx to

Steve Cutler

day, year-to-date. midsized seen solid, delighted aid you, environment to we at everybody. biotech ICON's growth across by Today, in clinical Health small large ICON drug our has we're quarter, this Thank XX milestone and medical I'm to of strong to companies, RFP continued by recognize been continues to be healthy demand acquisition advancement development in level team which encouraged that several robust be the approvals now continue proud the overall quarter has quarter. combined Sciences in PRA good another device Brendan, with organization. and reporting funding of to as the and first The companies and biotech highlight throughout pharma, new a total of our year-to-date.

existing has customers are partner excellent, As seen by increased capabilities. our merger Customers to our are increased development. solutions broader enhanced in and continuing from with and new their innovative eager quarter, offering to the across ICON that customers to strong customers as all segments delivery The the to turn performance and engagement in service response scale, leading clinical understand features been trusted our to models.

encouraged are will are We increased continued ongoing particularly of service strategic areas, across currently for our number we the growth which discussions partnership long-term expect ICON. drive by that

to was of $X.XX X% the at ICON delivering the record to a business and an backlog the a a overall start Revenues the basis, approximately across the increased our to close billion, quarterly of quarter increased During growing also quarter. over acquisition company $XX.X on The burn billion, the operating all combined segments. increased our XX% of book-to-bill XX%. strong increase quarter, of wins activity of X.XX and for third since our net backlog

addition, of customer base. In our diversity

quarter a in customer to less DSO with term efforts, This key down of than in quarter One was our concentration. reduced with our interest should rate our loan also in combination cash collection on XX adjusted strategic delighted leverage notable our the days of our which Xx decrease synergies. including EBITDA, us was our to moved to the our reduce improved allow and four. merits I

initiatives our and level term. pleased with in are We cross-selling these longer the of across from of legacy wins the organizations drive are revenue new will synergies expected the confident secured

have strength network our and health Accellacare imaging, site in-home We laboratories, number specialty across in particular, service seen of a offerings, services. central and

seen the Pac, pharma combined regions and such large our of examples in Asia as already resources have great We of respectively. certain and power segments

improved displaying clearly experience depth business. of across customers talent our are our and to We breadth and

a the with unified integration a planned several center quarter, worth a In enterprise and coming integrations significant benefit system an smoothly, as regions level completed key data initial accomplishments the progressing of employee experience is Initiatives more office are to including Our well phase we quarters. as number harmonization with in of connectivity. enable several highlighting. across planning underway, number

across operational a We number and support of have global functions. business united teams segments

approach wealth utilize optimal both ICON both from to best experience, to ensuring processes and talent benefits a the continue We that the from the of organizations, of new organizations. integration of legacy

A engagement. for unchanged to industry remain to well to customers present through new COVID-XX and challenge The our continued clinical this our retention as areas at in a risk-based phase. The project opportunities on and efficiencies monitoring, services our to for priorities continues demand employee as the solutions high as ways remain and find Our in-home unique for and focus services of pandemic integration of delivery such remote level. traditional monitoring. direct-to-patient suite model Accellacare increase continues

quarter a to ICON in quarter and therapies, X, levels coded continued about projects backlog, vaccines the as development the the quarter. expected, our quarter of revenue COVID-related of decrease represented end At X% work as to total second from as has the COVID-XX to While wind X% new of our end of trials from down percentage and contribute the began X work down slightly to large of total of vaccine increases. treatment level

restricted there across quarter. still over the is some due globe, in that the to remain saw the continue capacity this we approximately third of While improve figure sites to of XX% COVID course

show to solutions adoption as in value services remote interest pandemic, begun and can patient-centric customers' high clinical enhanced of brought global deploying our on in to of and their Importantly, the changes continuity and that increased delivery the technologies remain by lead have trials. as efficiencies

in remote our for over ability trial next industry. seen and decentralized will further the novel strong at enhanced end, comprehensive competitive be services and solutions, mid-sized and demand invest CROs. that over which technologies we have and scale Our the most open To such to advantage believe a integrated few deploy in we years clinical smaller our will offering

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look consistent the continually delivery for ways burden our the to internally partners for provide solutions can Lens' trials. access a with vast product data patient continues and on with disrupt to are site gain Deep expanded readily their technologies overall we more agreement and of need partnership focus strategy, and technology to as efficiency to offer has sponsors, ultimately to network, patients By community with recruitment an evolve, the and as patient patients, enable increasing that Lens, in invest and eligible traditional artificial continued the trial to software exclusion are execution. technology-enabled harmonizes set. data, that genomic sites expanding development to marketplace to patient-centric data As services provider that while platform models. community clinicians and oncology patient well quarter, innovation new we oncology we reduce patients clinical Through and inclusion treatment ICON third customers. for oncology trial criteria. The sponsors to improving combining difficult-to-reach the people, EHR in Lens see on Deep matching access with especially Deep data unstructured resources and ICON's data In to talented our intelligence

a are Sponsors getting long-term on collected allows [Sonoma] of the the budgets to information We development spent our tokenization conjunction from Sonoma data amount also cost-efficient basis. in tool significant with their patients more and follow us clinical of customers interest and our manner. much patients asset long-term follow-up key to on utilized large a tool trial Symphony trial in in a be that allows

priorities to the ICON many customers' our of offer the tokenization way well strategy. on differentiated and Our on we acquisition, and refine data health partnership the efficient ICON our in are that Lens intelligence drive solutions a development ongoing the of our new organization. becoming focus few to just to continuing truly have and and and and to Since are is the faster inclusion Sonoma to core care trial participate. rollout patient at examples customers initiatives with patients we site leading world's clinical new needs, forward patient The access tool with innovation diversity Deep ICON our the more

to committed and a solutions, offering build bringing are market-leading also significant in capability these patients progress to we and invest and operational that value in We services continuing novel solutions best-in-class innovative the key capabilities by create focus By clinical and continuing we're to technologies, on in invest to customers to delivering making shareholders. by long-term about industry. excited creating progress research significant expect in model. while talent our global value paradigm are to we as support We're shareholder expanded initiatives on the new centered to areas

revenue third $X.XX up performance of our With quarter, in per $X.XX guidance $X.XX to the midpoint X.X%, range previous of adjusted strong and respectively, in the $X.XX, with are the the in our increasing from ranges. guidance of we and to earnings the billion, share XXXX outlook billion range X.X%

our XXXX the this Revenue to growth company and beyond, long-term on the million teens. already our digits the high As adjusted on earlier good high more of on on and a and made that January to in provide we we to We've XXXX $XXX at we over revenue Conference. look forward the in the we single synergy to of $XXX next targets, at years. definitive to continue growth PRA. deliver projections combined JPMorgan EBITDA plan confident mid- time progress million, I'm basis, expect will year cost and We the EPS respectively, the achieve targets in acquisition guidance both and the X teens of made in Healthcare growth low

Analyst In XXXX. are of which to in an forward in-person holding intend addition, we looking March to schedule we Day

World's employees only CRO the as be included Finally, of I'd dedication, And XX,XXX in we as the commitment during Best globe ICON thank the like exciting journey Forbes of list. across the their care to organization. we delighted the leading to Employers were new the list world's and to for We the build hard quarter. look forward all health continue work intelligence to XXXX ahead

we're questions. now ready operator, So for

Operator

Donnelly your And first Instructions] line request the Citi. of from Patrick today of is [Operator

Patrick Donnelly

together, of synergies. sound there you deal X opportunities? You the can the months? again, of been kind had on synergies and the confidence just as the the in opportunity higher, of terms about talking been And number few level maybe closed I revenue that companies of about confident in a guess? how the move kind you've just continue to And Steve, for you that can you But had final certainly has talk set? in talk out points customers that You opportunity. to

Steve Cutler

I inroads. our made that. about we're some $XXX years think is well approximately we've public early We've been I million X for saying in expectation. over track on believe

selling are lab, legacy areas specialty Our business our a areas, development obvious been central mean lab, and PRA group have didn't has out I the lab.

secure of one -- very the We've services, awards didn't is lab able site been number a through we've and that. group the Language PRA there's for health group. they to also new So been legacy network. And our able move that Accellacare, to Imaging a there. obvious along. network our have home

synergy really do, there's $XXX those but revenue been sort of of all work continued million for So to we're early we not to strong number. get areas where haven't on feel all. That's overlap have we got group that no services. to offerings track in hadn't folks some We've at think to that to secure customers annual to being say we wins. able any and of been And like been legacy through particularly access business as space operational able to in those I our biotech ICON been have customers, the our development those out some and and those haven't able well

feel at. I good where So about we're

Patrick Donnelly

And themselves, particularly then you risk about I'm side? of pieces of you just the as retention. on it's the metrics talk the you That's can through? labor labor maybe into pressures? talk in there touched inflationary on kind briefly we costs go But just through that then sure Brendan with of And staff you us And margin mergers, this talk a any higher. Can you're always have in how moving back terms 'XX? on just about maybe that, -- market, the managing just to even

Steve Cutler

side of let things. Brendan I'll the on comment margin

not really up go paradigm perspective, out that around customers. in working line much labor people I rates Overall, think, challenging on necessarily our unemployment bit the understand would or our of the liked. working and from whole the moment that work the of pandemic there's And on the of out have working is in home, it's, the But And a We're little office. of come at the labor more our than down new opportunity, there's the is we as market the little a customers particularly globe, -- no elevated depending working it's certainly retention how very indeed think the question. not North competitors has they we merger but our at And through I in WACC. I a front. America It's I with tight. think and across related, been have challenges but it's challenges moment. market

at and of business, any than is with in our little like see North certain on As the time, you a place. America being to good probably a lower retention you'd organization moment. parts that the are the any at there biggest it Europe But other is hand, challenge be.

a is in functions number good in very India are and good place. is our place. very Pacific Asia of well. settled down A really nicely a

that patchy, it's number. we Brendan, sure the margin. working continue to always, then always to do about you talk to So want to as things and improve do can improve it, there make we're hard we

Brendan Brennan

think vaccine point impacting the retention as of that base in probably the staff a year, we through I course as in go you lot at prepared margin more the we've as to are So working that Steve's comments, the saw been up the of gross A quarter dynamics the play at the in XX.X%. to -- of close are and go on. my play dynamics coming some cost QX. And this of we certainly, into work of result obviously terms

to go gross in I QX our from will as solid overall, QX. trend think be margin we profile the still

margin we still a continue as gross good vaccine on progress from see down to to expect the pass-throughs work, mix come quarter-over-quarter. perspective So of

at in I XXXX. be a for marker will think margin jumping good will a it off tone that's and think then interesting of -- be more maybe I terms gross of profile point good a that

to continue And progression we So QX probably as then good good as we're QX. thinking we about said, cost think those go see, quarter-over-quarter I margin that about will to into how of pressures be some XXXX. a to in number

Operator

the line Blair. John Kreger of Your William next question of from is

John Kreger

on follow Steve, up comments. your to couple just a of

larger, growth from and kind those I you good Can the of uptake across a relative you're about smaller think device seeing us you give sense even indicated buckets? X clients.

Steve Cutler

relatively a still RFP it's wins terms still is pharma of our strong of portfolio. in I'd a Large front. had say that and then front, part, good that customers, And part Device but quarter up certainly relatively of terms quarter we solid They on also small RSPs. in mean, I in a area. very significantly seeing growing in good, a growth The small. we -- awards we're new a year-to-date. revenue-wise good had the had Biotech quarter,

it's one the through of seeing flowing robust the so, particular said I RFPs, any pull think, seeing area. terms the of board, terms to environment positivity of and hard across It's across awards into strong, ultimately, comments, my I out environment. It's And a We're lot board. in in very revenues. in that's and we're in a really

John Kreger

to And of that maybe question. same another way kind cut

us If Just you've about or maybe being of new or in your like can in starts, trial you are the some broadly quarter, and how home-based the about got site tools those newer awards DCT networks? good wins. think sense a give capabilities these your your newer curious you uptake adopted that of now

Steve Cutler

interesting. that many I have of there that a these trial. component trials don't days think it's decentralized don't start Yes, we are

that. component, home that wearables don't risk-based want health very there decentralized. sort of few don't component, Now component. some are a But are monitoring that there whether very completely have are component, be to a few I overstate a it

So of type the sorts include asking decentralized increasingly customers to the us these are component.

where you by need have many protocol that thousands very You patients. in can and all patients to the approved sense helpful one the trial vaccine of another many proven that's amendments be

respect. extremely so an that version has in helpful an been copy And having electronic electronic

say, some hybrid guess. the we're near them of a approach, wouldn't anywhere But say is we it terms as have the overstate I some them. still of do not, But them. the they're I And is, don't rare which working They're and want version, relatively I in normal of of say, good animals. more decentralized We with trial. well as common components. So I completely some in very perhaps uptake would I terms individual of to as

Operator

Your of is Evercore. Anderson Elizabeth the from next question from line

Elizabeth Anderson

you being X% I -- just about to the talked you backlog. COVID Could know obviously of X% projects

from should how sort burning about about think maybe -- think as sort into revenue? we more vaccine-based to transition that backlog more trials we So the of therapy-based should trials think we of

Steve Cutler

we've in Those our point of comments COVID think have past. quarter. view come I of awards the Well, certainly down in in the a been terms public from this

I think of about quarter. they're around XX% this our revenue

the vaccine burden becoming our of part an I going The wins more our vaccine community Going a No are more work. trials in would time may seeing trials, related if forward. lot I to that wouldn't be we're going continue going decreasing vaccine. lot expect endemic backlog that's I non-COVID-related coded question of over, of down. forward. caution, But it. I certainly our for But probably big days recent will albeit our Luckily work, part some not common. quarter. forward, are cliff to of we -- And cover be see no about of become backlog, there in come important others coming good of those we're COVID part been the big a that's -- work. to been good a treatment or fortunately thanks uptick in trials yet. the revenue would And there's mean the to an increasing here. see Certainly work or limited, type

way the the we our what's moment, it So of terms But who is way more knows in happen. around be the second-generation the That's in work. our see it backlog variants, will of will treatment And in backlog. terms revenue follow obviously what at is and evolving, vaccines. new might

at an revenue, months. would would our think, the that is of question XX But I work part, COVID-related XX to no it there's still So I important decreasing. another say, for be will least

Elizabeth Anderson

maybe talked just and sort of to like momentum expand? I do to those say with question. guess maybe I like trials, kind their is? jump and just mean on clients you what trying out of back people in decentralized of about when e-consent kind you ramping of generally how generalize dip Is figure or opportunity can that of some I'm overall? things toes that of the general you to think to John's And like the some then about said within the of elements

Steve Cutler

They mean Once wearable would of a a case obviously, the don't I within component the the pandemic, the that became. usually to we was has a consent planned expand you've trial, as be that monitoring a not or it of pivoted risk-based the component trial. tend home during sort or set. everything health

And so sometimes be a think get was it can it more risk, or usually a there now, or it more, some as e-consent we're I state the pivot. is plus component steady starts, But varies. that new set But into have the seeing, one we plus wearable more a trial. for but

a able more these way and hiring resources, pressure with seeing, getting those I'm evidence it But to it we're efficient that I interest increasingly us. -- think, is the for expand. of doing we're not on challenging is So increasing doesn't we're in trials. components because -- And people provide think I

us the work more to efficient prosecuting We those do to be risk-based ability allowing resources. that And monitoring have work with monitoring a remote and requires more and of lot with a much is to side. our be

audit there's And a not so is we're we're this. of many This say to be to sprint. increase. going going to drive be But going think be take, some have is to probably, would customers XX% to I years X% component never probably more trials starts, fully say don't we'll trials X% it I and fully and decentralization. of be, of I I'd in big seeing how to for those XX% the say, to in incentive more time, increase -- show say certainly efficient But be our work. be. a at marathon, many, and decentralize. so forward approve. going I'd move think decentralized. there's in that of of the a it It's And everything hesitate I prove to decentralized. become trials probably years' X And are would moment, of know, number components fully decentralized. us I to for we with or And But model going doing trials as course, regulators There can I forward, increasingly components us -- the of only we think that will interested will as involved sort in is

Operator

question of the JPMorgan. line next of Bernard] Your from [Noah is

Tycho Peterson

It's like ICON Congrats. on increase a versus quarter. you far. PRA is they curious guidance the questions. overall. had how us It just Can numbers? Tycho, of going so actually. to it's side Obviously, give A And the color if been PRA or sounds I'm fine couple blowout the the any performing tied second really is just integration more

Steve Cutler

Tycho, what to we're I go on organizations. and to will basis to I'm I icon growth going we're hate that on that was numbers both a good say new going there though, our say, present the across disappoint forward.

if think both growth look talked that we at in dissimilar to, I it year-over-year wasn't the you organizations.

we So said were combination we've always great X coming would from a the organizations what I and we point and seen. we mean, that's really were a strength of -- be one.

so with yes, really So progressed happy we're far. that's how

Tycho Peterson

maybe rolling the I to up function backlog in step COVID burn, mean, XX.X%. just combination a the Is sequentially, blended Or can backlog burn? the of off? X.X% on you the just touch work And that or

Brendan Brennan

of start and as coming historic quarter. that, the backlog yes, the added reflects quarter, that being into the mean, icon it blended course, take done, the were mean have that we're of very at it end piece elements I and we at of of XX.X the we the of see happy excess combined I'll the happy to PRA as Mark, I X in is always Yes, with with backlog the do historical it more the We And well. to entire is. XX%. to backlog. pass-through XX.X% talked blending as organizations, to the

the So about. thinking we're that range certainly that's yes, -- we're

Tycho Peterson

Steve. for step past about great little a accelerating recruitment care you're one is things with one last you've the the mean like I maybe is some honing wins of up and things your customers network And that early are with in combined It particular here, sounds the the even Accella, patient combination. in bit on? that there talked the see. flagging which Are to can

particular in aspect just maybe you recruitment? around that can patient So touch on

Steve Cutler

we model. good the interest business is in nicely labs validation basis. we're I stepping mean vaccine of I verification the of I lot and around the talked been think That role also around, the imaging Accellacare us. revenue site our lot the the of decentralized trial as I about patient in that getting some particularly A health a in There's a particularly a of seeing that in on Tycho, And home played that, synergies, the say, of has for crime, aspects around number good publicity, It the work. up. network. moving and are patient, back major interest

a area over large efficiently, of to around an how and their quite region to customer to more ability taking monitoring analytics process around effectively, an identify in and our data monitor So their trials of a to the early really focused health those to the big They to do areas. are aspect home of efficiency ability applying frankly. of some the monitoring monitoring. wins do talking more tend be around We're risk-based

starting very We to brings to play So the a the that really service. really nicely of more we business. to much discussions our customers us now breadth able organization deploy have is in scale provide that depth for allows efficient effective new the and are efficient and a a or terms of resources out scaled to

So business encouraged that's where the I'm wins. on

Tycho Peterson

with kind And the some away background? of in more doors starting opening are the of some customers your see the combined Are of one, consolidation last kind of shift from you all any to you combinations? finding

Steve Cutler

question. get I the didn't quite

Tycho Peterson

the consolidation to the discussions background all in kind is to space. the that in starting CRO your on more drive way? question A of And

Steve Cutler

Tycho, you. say I to be to with honest hesitate that,

We've since closing up we're increase think seen We've in had hurt the coming the RFPs saw new backlog of quarter, putting terms a RFP the numbers you wins, but just the certainly are not of the double that business seen acquisition. not We good together. over I our in. we're by consolidation being very year. digits

going the on think necessarily too about so that. get -- in industry. But the your about haven't So I any worried industry the customers consolidation concerns to don't I expressed and me

doing on and we're we're focusing hearing concerns. think any we're I what not

the in I evidence think data not the customers concerned that terms are of either. suggests our

Operator

Baird. of question Coldwell from line Eric is next the Your from

Eric Coldwell

I appreciate it.

we One I'm seen months, of I'm patient emergency you've -- but will call is over over have be I the seems is right up, world the a I'm the our word, daily of because a is if mean be how be will to the you -- harder to at the curious, XX what, back more now. retention you frame? able in since in postmortem least to declared, just They'll XX, conflicting open last, freely lockdowns that it, question my how reason have globally as there feel market sure So at getting U.S. patients more had not work. national And and waves really -- time this the move other identify. people around. They'll ask be of with view the view review out seen and reopenings, views maybe in to opens patient and what is a of and sites but will that activities. right to the be be and back enrollment retention And bit terms is identification, enrollment

curious just these opens and you're I'm as trends evolve markets. So seeing COVID how closes

Steve Cutler

coming news not lockdown very were That's some that off we So which non-COVID I into up that And that answer shortfall. substantially. clearly of little large helped of happened, or not of think anybody. pandemic out studies, course, enrollment COVID almost and when then our the to to pandemic make the able question I will pandemic, fortunately, trials to of fully very back to say in hopefully, out we dropped the enroll a the a to of really come going early go we're it's we're sort out as situation.

for patient that In fact, overcompensated [Indiscernible]. basis a on

-- truly sites -- more that it, economy more I around explanation your talked opens be move come a still of to subscriber think patients we as as we sites. impacted. will that as able the We XX% at I'm through to people again, said and about in second our up society

say, might through change dramatically get going becomes number I we that's endemic. not to next in the this, probably a I that a think as year more still component or COVID as be There's so.

think in be see have that trials do to certain improve up, the substantially of there go as in we're I hangover again. So opened world, and up fairly enrollment I starting think the will is But parts opened, economy non-COVID those there. sort sites as least our at of a

a I'm one. fully So the rather first paid-up subscriber to component your second than

will that think happen. I

think those we we'll clinical clinical on option. research our come it's that's as patients in increased we within And I excited that. able we've trial, too. of the something Obviously, think of that option, interest sorts who lot to very see component is follow-up as patients Lens our trials having ability sites network, a as in some new be enrollment Veradigm, continue combine network new the technology, as about. just We're we're some think have report up -- and of we're opportunities, that I an our have, seen that in of I we something we patients the to an terms as And that well-being, of the on opportunities to in a accelerate not long-term the a care tokenization clinical part much and put of place trials. patients, data of Deep long-term we'll of those follow to with their

have and be ourselves to trials those an facilitate but have and them going a some a So part not drugs as recruitment, be -- they prescribed standard we to clinical see being as giving within in opposed clinical trial, able this. being those go eligible and or to them being just sight, for happen them identifying may having drive sites them to of may that not to patients be option have and trial

a get the And number patients expanding one of our in involved the of we longer be clinical So to the that's term, to really who course. in of various options the exposed to ways going terms to implement to business of opportunity the we're trial. be think trying number drive of people, in

Eric Coldwell

but you And in the on they're they too on in revenue very are reluctance lumpy Brendan, is much hard bookings when or very to can or it how qualitative a year. project, be, and on impact gross those if COVID a on progress in looking what you comment know will at pass-throughs down pass-through just terms or -- you But sense, total beyond, pipeline, you as any to era think, more here see the or of would and give of detail a through pass-throughs, bit I'm you we into the color give then know if made there for are periods? you is I helpful. give say, pre-COVID look could versus, the margin. the seeing pass-through statistics I shifts any more that 'XX that any curious coming it's work And move if mix we I us are us what as big wind even happening? total you're

Brendan Brennan

I think, larger question. a of a complex have business in the this think put year, proportional certainly, down first larger now. business we're the Certainly, that to vaccine significantly -- on pass-through end do [Indiscernible] back Eric, the had of as you we've studies the the the those those much year. last of in say, half through I at tapering and some extent the element

run backlog, were the they and back where starting So kind see are to of get vaccines. we to prior it revenue from And going to of elements I pandemic, of is and probably we the QX along those of as to ticks pass-through QX, revenue backlog into to big studies the will kind to prior look how QX, indicator like. good our rate vaccine what post an think starting be

of I about of in QX. reflective much pass-through normalized So point being made causes more on margin margin again, the to same point earlier levels call it, the

did we be ambitious high give the single-digit see of well. revenue into our hopefully, transaction your to go talked by guidance. true obviously, out more to the think afterwards. QX, as more that we're But a we you I the can spoke the we I lumpiness will when that's that and predominantly we quarterly And year. point, hopefully done go we basis think on a normal Steve still pattern there fact into growth next color about as Obviously, we'll as revenue about XXXX

Eric Coldwell

us you if QX have loan have a down. provided post-synergy? having from is long-term interest Do easy. leverage pretty maintain or you quick DSO this be should combined term me, reminder you it to on a just What goal for Xx drop a the And track one to in basis? rate save Last below

Brendan Brennan

On there yet. I'm think collections. with fact my target that got legacy the PRA colleagues -- their about really cash have just the to We'll we in DSO, a haven't pleased good our doing no, it. are how

been that's and to something the looking organization. across pursue to So education an me we're that

skill and and from I'm their delighted hopefully, company, in that we bring the to we to quarter. best target the number where to mentality want sets are, we see have but with obviously continue fall our we certainly, whole So DSO of both the

that rate will the be rate, about we On it XX interest bps, Eric, interest on into as QX. go

environment. I think an inflationary coming into we're

immediate tick might But it's you the the rates [X%]. in interest see up So term, certainly on about line. bottom

Operator

Your is from next Windley of line the Jefferies. question Dave from

Dave Windley

construct. just And kind But of enthusiastic I you the prepared about remarks, of your your about gave, a comment believe, Steve, Eric. end at answer long-term the made guidance you Brendan,

kind You to construct you this, if applies 'XX. long-term believe that, but of touched that specifically I'm on wondering

Steve Cutler

we've a -- And and about mid- think single on digits bit digits EPS the think think higher. revenue I 'XX. for beyond so, high the in given I to -- yes, that talked for that goes Dave, we've mean, on EBITDA single high I teens I

nicely, feel new So is in it up going year it like we're rate, a is good be really setting 'XX whether good as that position be for up we a good move to a us. We to burn year. wins shaping ourselves be to be feel whether

Dave Windley

elements trial are for percentage the then you commentary. trial drive the of that projects that through two, curious as grow the that some actually traditional Does and of is that, following enhancing? board? that that I'm shrinks of more mentioned, in the that includes that points. is and starts into all into value something. a theme Or an I'm there separate like-for-like? something? traditional kind maybe pricing value across ask versus you One, just DCT is a a that approaches, DCT new decentralized move you project of revenue on come And guess A as a approach? the of appropriately maybe Or common or up topic type as and the project RFPs wondering, two it high do you on blend efficiency see, I

Steve Cutler

one are first Dave, decentralized terms a data themes. terms the have me, there. as commonly in take a don't certain I of would of is me that in product. that in But of there of common areas the apply specifics impression Let the front my trial we

we and much be access to might remote monitoring, So certain things course. every in not and we not now It more I monitoring in -- it be Europe, be like restrictions regions records, region terms -- approach would every electronic because in of everything of propose certain pretty risk-based in cetera, would have difficult have cetera, trial the health et component. think, et may X we be that a

have some particularly probably component safe given included. common, probably experience, say pretty but we're that regularly regularly so still in that vaccine most but way performance wearables, less a our very little trial. -- passionate with things And you Then about common. like E-consent, the the is

the at that is say and everything that's But impacting there. moment. the trials our say probably would pricing to it's it more So would price pricing, few fairly variable. that's it be our as I And having I in of efficient. remote in a it is the have doing probably how I there's And little that. impact it's very is on minimal a us say, monitoring, risk-based driving terms monitoring helping. overall But

is margin at is enhancing. modest the It's that of a do And It's rare as pretty would be rare of the said, sort fact it's and that that, though, whole small, trial the revenue. trial say we impact on because because approach I really, even moment, And hybrid there risk-based. the and the may it's remote. so I of whole risk-based

can feel say would as but that trials We dollars our not margin customers have. they that probably driving up with enhancing, enhancing I margin our revenues, do then more modestly the well. that's okay So

ability and honest benefit to for do help That's more to overall, efficient we offering be So to to let's an shots our for for in on a be. get them goal and I them and customers they the it. benefit do. effective It terms -- a want say us be need would ultimately, trials us and gives more of where certainly

get of we So from worried efficient and being don't any more all. sort more impact on about at revenue effective

Operator

from next the of Your Luke question Sergott Barclays. line is from

Luke Sergott

not there high give back a landing. I going but COVID IQVIA on a resulting comfortable to you the know growth. going soft 'XX. talking Dave's in just headwind, growing X% -- at single-digit X% question the to go When talk it, out in to -- about I'm implying digit, about slightly you to right is any to about first because of guide, about COVID getting that guys COVID, is growth? a you're talking from are the we're now? sorry, of single this are X% is type talking framework you that ex Just headwind? Or that the only high context X% investors and inclusive question

Steve Cutler

down I'll me, think to think as I high we'd -- let I with talking That mid- go with work, ramp everything. Brendan a have we're large so And I And that does includes single the that to stick can that. digits, COVID one on But particularly work. is something well. the said. we of include a think what vaccine

a to with little bit is -- component even margin sorry, probably pass-throughs. -- revenue the the if said, be headwind. there a Brendan change revenues As It's in going enhancing of

qualitative The there's amount least it, from going not of that headwind a there. well. what at work your amount be will -- to we're continued with the sort impactful treatment work. significant say, of the any but we if component coming a moment. want that's large, next headwind, sort we guidance it for are the overall of as as important be They're go as there's what lower years terms me, do in I protocols high forward an they're to of not of disagree X wouldn't as in. doing we revenues, And of of expect do at amounts of covered we're sort in I includes have terms but there So mid- revenue you of giving to expected call We

Brendan Brennan

you're That There's into as will I disagree said, question element right. a And comparisons. go think outsized we'll there. element normalized be more year-over-year certainly quite pass-through 'XX. your I to impact mean, see we wouldn't Luke, I pass-through that, obviously as like won't I Yes, in the XXXX. on with an have some pre-pandemic We that.

talked I think on as to revenue It's and drive we always terms earlier be we talk is in still we very go making certainly margin where of double-digit that's on that generating through going year-over-year. And the those growth. we fee -- of terms revenue in in our focus direct strong in focus the our EBITDA profile. terms to that of numbers about and sure can have

Luke Sergott

And -- here, -- you guess last had they one large then just a one on business. one I a FSP. they're PRA,

ability and some business. had also another that's large of on pass you progressing How demand? You give here guys on wage appetite Can update an been pricing any inflation? the to

Steve Cutler

nicely on our of as growing It's line part full business, more our Luke. business. of a top be It significant are continues the other to service the components

the happy progress making. is business So we're with that

a labor let's receptive on challenges inflation, terms in that. And what terms In sorts a to of always say, discussions. significant those fronts in we made of they've generally, to been we've of that's would be those on, beyond and of I honest, expect number been, been customers would have And accommodating, but of I say, of normal in about customers inflation progress wage some customers passing like challenges. around we've a hear with number negotiations don't

our So challenges need of in But do to to margin have of to mitigate understanding and customers' and it we lots we pressure other ways, in I'm X by remains business. our work that harder. any that encouraged that work of there's those continue space, sort that ability

Operator

from Your of the next is Jack question Nephron Research. line Meehan from

Jack Meehan

X.X% in color hoping the recognized the was synergies up revenue, quarter a out forma I versus forma at sequentially. down of been which sequentially maybe look what first X% have on the may pro was cash gate. I was little EBITDA the pro just cost already

helpful. through talk So little dynamic just there bit would a the be maybe

Steve Cutler

controllers we'll forward Jack, a we're We're quarter. into and the obviously it as answer, 'XX. organization, into making. Jack, pretty, the into new bring obviously pretty that's as we not in we're first Yes, with quick It's further QX into the ICON ICON we the of cost this strength good in progress material. I certainly get into and happy, the -- was mean, a go terms

looking You're of digits benefit at in how We've the talking about to visibility million, quarter. terms good dollars of in actual got terms the mid-single in the millions we're as $XXX -- synergy of a before, number of account help items that around into will over lot we're of progress through how we've actioning the outlined that of P&L comes certainly years. and next the

tell For way in about to I'd think that when we did talked to people still now, how that about the transaction. same the we

get when the overall I be color think we able guidance we give will of impact more base. a cost on think bit in in how that to to might QX, as the timing and we terms

Jack Meehan

follow-up another for then you, Brendan. And

about, any You in thoughts mean your referenced us just you're prior more up, going of any just but thoughts thinking? can magnitude down you some I high-level forecast talked versus give XXXX, you're what was regulations in know of the curious type globally. tax philosophy, the changes as to this to

Brendan Brennan

terms suppose there, different there's in here, I It's there moment obviously talk moving but Jack, the going in our amount you the many it'll] work at the back in corporation higher have in down. States. as [I tax impacts United States, been guys big which will on And It of States off through rates the parts had GILTI started the impact. number that Congress United rates what's also about you so a of a believe, tax the both with rates are the know, so

or piece global big rate course, this XX% tax The -- tax that's other XX.X%. global is rate The was minimum OECD rules impacting, Irish previously the tax rate. around new corporation of

there. X.X% an obviously, math, quick there's So impact of

If our versus base rates rate. historic tax you consider Irish that

I a hopefully, in of or of little as more, we'll of least that better whole saying bit piece that one the what's legislation. it's going obviously. the visibility And about think talk But So it, that's we're to U.S. at in it January, tax not is more happen was have out shake a story. terms reasons to we'll

our peer I Albeit, set. yes, still versus probably be competitive So bit. it a will little increasing think pretty

Operator

And line is KeyBanc your Donald Capital Hooker from of last from question the Market.

Donald Hooker

its curious biopharma solution. would on elaborate selecting company you one. ask to you DCT be I the X comments platform large I just I'll comment made, the if ICON around enterprise all as was think, prepared willing in

Is maybe is they trials sale technology of stand-alone embedded solution trying a running is full am of sort -- that providing of just sort technologies like some solution? of it you a a sale? that to Or understand So technology that I sort this are on? thinking clinical I'm as Or are set service full-service of in that. part a of your

Steve Cutler

their be in trials internal It's Donald. a But sale, does platform essentially, to as it's involve a will stand-alone be the platform it sense, we as use a will for not technology hybrid. well. But providing I able the services but well. own mean and they services,

by moment. platform. that as And significant We're it's endorsement out very of working is encouraged our way the organization. at that's very the So this an a

involvement having view, to of us going for so it with does technology. a real And platform but and be point a we platform from as services their development positive as is a it, involve think well

Donald Hooker

But clear, to you just monitoring tools, not be e-consent that studies instance, to as like well, for right? your for they mentioned or they're outsourcing you use might tools

Steve Cutler

they wish should them to available is take. option That to

Operator

no further continue. Please are questions. There

Steve Cutler

thank at you, today. ICON. another you, for We're everyone, quarter strong pleased as Thank Okay. listening delivered the in our new have operator. Well, to first

And recognize care around and forward their take the XX,XXX again our over look help people customers commitment drugs to to progressing and this world's opportunity I the further health finally, our devices. intelligence to of organization, globe accelerate development entire past for building our we the the integration and continuing leading want quarter. to So efforts

all, a thank day. rest you So of the and good have

Operator

concludes presentation Thank today. that participating. And you for

You may disconnect.

ICON Public Limited (ICLR) 6 Nov 212021 Q3 Earnings call transcript