SYNH - Earnings call transcript Q2 2021

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Operator

Good morning and welcome to the Syneos Health Second Quarter 2021 Earnings Conference Call. [Operator Instructions] I would like to hand the conference over to Ronnie Speight, Senior Vice President of Investor Relations. Please go ahead, sir.

Ronnie Speight

Good morning, everyone. With me on the call today are Alistair Macdonald, our Chief Executive Officer; Jason Meggs, our Chief Financial Officer; Michelle Keefe, our President of Commercial Solutions; and Paul Colvin, our President of Clinical Solutions.

press is slide at available the our corresponding investor.syneoshealth.com. to remarks prepared on addition release, presentation a to In our website financial under constitute and obligation forward-looking Remarks plans, for of purposes our about XXXX make Safe statements Securities regarding results Harbor to Litigation the anticipated Act provisions expectations pandemic that any and Private and update we COVID-XX future the disclaim of them. prospects the we growth, expectations, Reform forward-looking from materially a those differ statements may these factors. as of by results important various Actual result indicated These section factors XXXX for ended Risk are and discussed in XX, of the the Factors December filings. XX-K our Form SEC our other year

be we effects a core with operations. outside which will call, be GAAP. non-GAAP certain These exclude non-GAAP this measures of financial a not transactions the and in and should supplement to measures prepared accordance to of During events considered replacement our discuss consider measures for we

comparable For Alistair a please turn non-GAAP with the financial call refer like measures reconciliation most of Alistair? of to presentation. over now I GAAP the to to would measures, Macdonald. appendix our directly the

Alistair Macdonald

in quarter Good XXXX. growth, our quarter We clinical health. the growth year-over-year of to to that thank the product financial for morning, midpoint second everyone both returned most for are powered and joining am exceeded market. balance segments, for importantly, the development expect resonate for today. revenue we and to integrated I our hope all of strong strategy our strong results, guidance of continue and both Ronnie. across product you offerings which your share trend the the differentiated commercial families awards you robust another I backlog metrics excited and to in Thanks, us and good demonstrate continues

quarter, book-to-bill of TTM second XX.X% for award clinical net growth book-to-bill ratios X.XXx X.XXx book-to-bill Now, quarter and solutions and of X.XXx first, for grew commercial commercial. year-over-year, commercial XX.X% clinical ratios solutions and quarter key This of strength robust from awards drove in for of including X.XXx for by overall growth the highlights some XX.X%. clinical for resulting

XX.X% margin of we growth XXX EBITDA the strong adjusted year-over-year second compared adjusted basis gains Second, a to improvement point profitability in quarter achieved and XXXX. with EBITDA

the leadership Thirdly, to addition am our commercialization and attract I continue deep we Development world experience of and class and clinical about in Officer. talent Brooks the connections excited will are Michael’s Chief the as continuum development of our better voice go-to-market product drive Michael strategy, enthusiastic customer we development Wilkes. create of across enhance the Board to level, recent about advance at Also outcomes. innovation the David addition and the patient Dr.

a expertise. healthcare, look champion We Wilkes medical addressing for impressive forward positively shares industry patients’ his experience for Dr. in and impacting to disparities lives. from passion benefiting our As

and the our on growth details from revenue quarter contributions recover further by the year-over-year into Solutions compared of we moving both of projects XXXX accelerating Now, COVID and continue XXXX second revenue and to non-COVID strengthened accelerated XX.X% startup of from of Clinical COVID-XX grew total compared results, to impacts to as second the driven XX.X% our growth to clinical sequential XXXX. company revenue our acquisitions. quarter

are opportunities, and remainder in included services, our second bookings, that a FSP flexibility ending in months XXX growth sales, awards the further up a demonstrating Driven of solutions. competitiveness, team new provides large-scale fueled the where X replacing we Under XX awards X half segment. scale in for net part closed of remains only FSP is XXXX record our Our providers in included quarter the Clinical of even well-positioned also that each backlog growth least though continued and to for by term of beyond. our addition for existing of services strong and awards strong by were also Solutions revenue policy represented agreement at in an clinical backlog. XX.X% These of The reported strength initial these wins, robust record we our fuel pipeline years. SMID

quarter projects, also awards included Our backlog several X% clinical of than at therapeutics, although second remained treatment category, of this related COVID-XX our the end at less quarter. including the

our our studies, Given of limited in COVID non-COVID strength of by backlog. concentration XXXX will growth this backlog the expect we robust driven be revenue

to engage demand and we Given with clinical patients growing enhance the customer sites, continue trials, decentralized for physicians. we way

Our to recently closer while We expanding designed decentralized improved the burden two sign trial patient bring to trials are engagement. in initiatives foster launched solutions diversity. participant to patient, reducing

site we First, data trials technology trials diversity improving participant optimization more capture with accessible along on new focused group make retention. while established advocacy a dedicated and decentralized to

we strategies. set launch trial our design, initiatives that a access Consortium, integrates perspectives throughout clinical communications, patient insights Second, best We launched standard these and efforts the development Voice cross-functional product believe patient strategic practices in the incorporating into Patient lifecycle. hub for

safety, to of realizing distance to We the dynamic Illingworth assembly to stakeholders. DCT the treatments with order with patient life. recent real-world evidence produce of of data services serve customers the significant technology to announcement our lab improving in health relationship for and from our inroads Aetion and analytics vision effectiveness and also Aetion. providers experience shortening and value These our on in patients continue home initiatives, data combination toward of regulatory-grade and the network other represent expand our our best provides with

core growth partially a Commercial to of and even quarter of quarter in of the from Adherence in business by was the Turning offset saw compared second return recovery XX.X% year-over-year we accelerating headwinds to our but XXXX. divestiture to XXXX. the Medication fourth growth the revenue was sequential business Solutions, now our stronger, of Year-over-year

of to a in year-over-year the half and quarter first of resources All public communications medical strength of a Consulting starts businesses reached high. communications a very full number and the return relations businesses. the strong year Deployment and continues of our core posted had commercial Solutions another new growth. strong completed year strong team to deployed see

gross performance success This model, compared highlights Importantly, more full-service our a strategically our across have continued integrated combined commercial these on year-to-date portfolio. where to fueling commercial we the doubled XXXX. capabilities, awards, than growth basis of

Additionally, sales-only future several consistency Deployment These field the more smaller strong the revenue durations. contributing concentration key growth, expect our including toward our the we targeted commercial of evolution ongoing diversification and to to a of the longer project migration therapies sophisticated improve routines business, lower Solutions team and biotech environment. to funding towards the continued are have factors solutions, dynamics of and which average supported sizes, ability deliver

the also dynamic Kinetic, with Our engagement HCP field to commercial innovation product which activities. engagement such expertise as seeks through capabilities face-to-face a continuum continues of to development virtual across team and fuel optimize combination

digital patient of physicians We Additionally, clinical this Kinetic awards. amplifier we by in referrals is by unique capability our customers, differentiates business designed key new into accelerate to enrollment and where driving adoption seeing clinical trials. the a believe our strong by capabilities are and increased driving patient is of Health suite component of factor this engagement Syneos

Lastly, continues Syneos methodology, innovative advantage One, both our competitive end-to-end product across a to development segments. provide

portfolio commercial quarter. the the One first the contribution of Syneos assets begin excited third One particularly set potential the of pipeline growing about in and with to commercialization awards are Syneos revenue to many We

us have over capitalize along innovative service with Kinetic commercial on awards to position commercial and featured we long-term. our prominently demand portfolio, strong assets Although and these One in revenue to-date, integrated to capabilities, well expect market drive or Syneos growth full revenue robust further not the the

ongoing build improve for the our I their the Syneos to customers want to levels delivery of Jason? and call Their resilience, deliver inclusive financial impacts focus and their work innovation continued over worldwide. commitment and we now Jason accelerate our additional use help a as and culture superior for thank comments thinking to our turn Health high of to entire together Before performance that insights guidance. patients. the health community Jason, therapies is will and collaboration, collaboration on provide I of helping to customers

Jason Meggs

and Alistair you, Thank everyone. morning good

quarter XXXX, the in the compared Our impacted COVID-XX billion, XX.X% constant $X.XX was quarter XX.X%, significantly by XXXX up total second the revenue pandemic. which of currency was to second for

the for increases quarter and increased activity million, in XXX across Solutions XX.X% XX.X% projects, compared non-COVID COVID second our to both Clinical up the was second include Our constant currency a startup quarter These XXXX. the headwind revenue $XXX.X of a or of from XXX a point contribution and staffing point by reimbursable XXXX basis from basis in from recovery expenses. offset points acquisitions faster tailwind XX the business. basis was our partially growth contingent of This divestiture

second an currency basis by growth Solutions was in benefits in $XXX.X increase driven second up compared the to partially revenue in adjusted leverage. exchange. XX.X% Our quarter in offset consulting double-digit primarily robust XXX expenses, XXXX. increase operating adjusted adjusted of second quarter margin XX.X%, the core EBITDA by increased revenue particular second of Adherence reimbursable was commercial growth from the quarter The of tailwind constant to points growth businesses, primarily EPS year-over-year EBITDA. margin in basis of EBITDA from point higher second XXXX and This Adjusted our increased program, revenue the the to includes across includes of with savings expansion the increase a ForwardBound foreign driven million, expiration by in XX.X% reimbursable XXX XXXX, by of XXXX. temporary diluted of Adjusted Commercial EBITDA headwind XX XX.X% including These broad the impact the our also commercial instituted impact were quarter a the the costs of or an This compared strength million, for programs was of of representing an expenses. quarter and $XXX.X divestiture from Medication for mix and increased result our business. XX.X% $X.XX of basis point

second flow operations $XX.X quarter. million in for Our generated cash the

total the subside. quarter from our expenditures flow the of and resulting impacts $XX.X level $XXX.X of of million. million debt strong, quarter X.Xx. income net Our We with operations primarily ended million unrestricted were was XXXX net a and $XXX.X of been record for of the XX.X driven DSO by in leverage our billion, year-to-date cash has pandemic very as $X.XX days outstanding capital cash reaching the

our million the reduce increase used and by Term interest the repay expense. outstanding future During in quarter, to further order $XXX agreement our to credit Term A Loan proceeds Loan fully amended to we B

equity We sponsors. during private remaining million in shares of with outstanding our our interest also of quarter the of sales $XX the conjunction ownership the repurchased

XX% tax second was Our for quarter expectations XXXX. year non-GAAP the effective for with our full rate consistent the

view $X.XX range the estimated full from acquisitions midpoint, increase billion Turning of points, COVID-XX and of an to $XX We to unchanged. of from our that both on XXXX recognizing reimbursable an at billion, million change. the and our now higher our this guidance, basis expect now are revenue XXX XX%, XXXX contemplates COVID-XX includes the in of control XXX to of of business, of divestitures factors related contribution our subject of XXX of to to expenses. to year which company’s guidance $X.X impact XX.X% current representing growth XXXX headwind growth due the are a to estimated This points basis primarily outside approximately

million. We higher $XXX reimbursable EBITDA adjusted reflect are XX.X%, narrowing to $XXX XX.X% total This the XX our of compared margin which to range from continues a million of at original to to expected expectations. XXXX incorporates expenses up basis to mix adjusted of our points midpoint, EBITDA now an

primarily are and $X.XX share the EPS to our expense. to we of quarter of repurchases impact year-over-year XX.X% diluted XX.X% reflect increasing growth lower our a $X.XX of interest Lastly, or a adjusted expected second range to to

$XX non-GAAP $XX million to diluted effective expect an range we for income of taxes interest $XX of shares. to outlay cash Our a XXX.X from tax Further, rate million million. count expense $XX and estimated our of to million, continue net guidance share to XX%, million incorporates

the quarter, remains moderate Turning to second both for we recovery businesses. in in that to the given of third half strong year-over-year XXXX, our somewhat began outlook growth sequential the expect but

the $X.XXX of quarter adjusted to is revenue and to $XXX QX from billion pandemic. of that million. midpoint, total adjusted revenue an EBITDA quarter third in the It this due to XX.X% response the note to growth of of $XXX EBITDA expect million We of XXXX. third to as $X.XXX the measures impact XXXX which cost-saving at to instituted is of important reported margin temporary This reflects our XXXX to compared down billion reflects in XX.X% XX.X% COVID-XX

questions. headwind in reflected our includes points remain margin estimated would for growth an year includes XXXX EBITDA This Operator? answer However, a approximately growth XX from guidance. of expansion in of be prepared we acquisitions of divestitures expected XXX tailwind points an expenses. to full of achieving any on contribution as happy due XXX track And This in approximately revenue we our basis basis approximately points. also remarks. to basis completes and This our reimbursable the growth adjusted

Operator

our Jefferies. first [Operator Instructions] from with David Windley you. question comes And Thank

is line open. Your

David Windley

question. commercial Thanks for Hi, good I morning. I taking full-service focus on could. wanted if my to

to in that just that that we you better Alistair, can of early the your little Could to you expectations. amount so how That is one the stayed first mentioned, your bookings a ramp into value And about what have contribute remarks of bit do then launch from they? like quarter. bookings? You do to contribution how deals that’s you on and will How these of time seems is in third types kind slated begin that think Thanks. also to making? or when taken talk understand

Alistair Macdonald

to and long question a Dave start, Yes, one. okay. Good

So, to everybody and Dave. morning good morning good you,

still through. on schedule. still is that So, It’s launch moving

are with We that. pleased

start go to book from work. contributions with we the that probably I and easier think to first how then them it’s

of So, and any contingencies the thing. we and combination that to of a when those the doesn’t FSP of as work it we contract really kind don’t of kind get goes almost approved that so if booked trigger

So But those that. work through as the start for kind preplanning bookings come goes terms projects really. and of team into build the of the we’ve backlog work bookings taken in from to

we contracts So almost are them signed. take when the

we pacing that and of through where we work coming know So that is it, the etcetera. etcetera, – so

the happen the get doesn’t together, don’t or element that of trigger. quite is contingencies, one through, close that If bookings products those which so are approved, ourselves. Syneos funded, backlog, So commercial even product things We the come work one of don’t Michelle’s inflate that artificially growing One of the the channel, get work, the the channel product etcetera. the and doesn’t through then ahead of we get If will of it a full-service etcetera. those start

conservative to So do I it’s a think way very it.

element to additional to comments And it. way build previously. was It a I volatility us backlog helps think best that. helps of it’s of any out that with do of an that? the kind any us Michelle, take on the robust very commercial

Michelle Keefe

Sure, David. Hi, David.

a So of things. couple

time. of commercial feed we really continue that be tied Syneos to pipeline put because that sight together the So going development helpful has that us one with awards road And years. that with of of in things full-service that good it will a we have is doing product milestones the map commercial etcetera. One to about to along everything the upcoming the are over customer approvals, line is

potentially been So the Alistair X know into a things work over good it we fact gives into etcetera. think, then I of the can has us quarter-by-quarter pre-revenue forces, a we sales by then as very years. What we mean in booked product the for pre-revenue the prudent asset. the deploying drop that work. the pre-approval once we was taking start view a, approved, And would revenue we X the or the future take of like And next what actual approach said,

Alistair Macdonald

work the as David, that of planning, into management when field, goes sales taken the the build-out will that of pre-approval case, strategy we it. set that team, market in team. up access team kind work take that’s But So of we’ve more the

So so it bookings terms that can more really come through we billings pace conservatively, the it then into launch of quite too. obviously, side get and in to we on of

David Windley

Thanks. perhaps but annual XQ comment your suggests then pass-throughs becomes little progression the influence on I a I if might fairly to both about with I XQ cadence XQ. like commercial margin some just that and to a is know you up factors think revenue in follow-up have that, progression typically bonus last XQ, payments from XQ inflection. the that one other could If could XQ you steep that cadence bit, contribute

Jason Meggs

Yes, Dave, it’s Jason here.

quarter the on sequentially right you’re side. commercial side of So four, in featuring Deployment is continuing the on Solutions That ramp to certainly up. terms

and anticipate each that also you of normal scale last in side throughout quarter launch see business as teams launched the out you We’ve teams those the a in the seasonality to utilization and number max QX teams get continued consulting where we communications quarter we the And then We progress record and – in QX, year. four. have well in of to really year. continuing and as also significant we

the see clinical So and see on side what to see continuing activations, good that’s enrollment good the we non-COVID. to COVID commercial really continuing and side, site of

We continue to win COVID work.

from into I tailwinds a think in our projects some heard of we remarks XXXX, I think have COVID from you’ve we’re related up XXX that see that mentioned to that, on I clinical frankly, are in are we have tail recovering. other don’t – good the peers. Reimbursables reimbursables. prepared and as

guidance raised the having reimbursables, We’re etcetera. to due

on some on accruals the the QX mentioned, to nothing From in XX% modifications, perspective, you our the as well and we perspective second years, we the and see as look look our the coming was really utilization So when margins, as maxing to seasonality even back plus, growth year, XXXX the that half right, CPO, side. clinical you commercial So And last the where contract that half at tax is back back look you that’s we from on normal bonuses has of out, what business, of to there way. relative prior the our then margin right? were. line changed side, it’s

David Windley

Okay, thank you.

Alistair Macdonald

David. Thanks,

Operator

you. Thank

Patrick from Citi. Donnelly comes question next Our with

Your line is open.

Patrick Donnelly

acted of on more are how kind pushing the with being front? some are out know to Can customer were thanks are still quarter Just about backlog Alistair, of that guys. large just maybe for a being bookings talked you talk things your clients and last things bookings kind pushed Great, near-term? about quarter, window. one that this trending beyond behavior you, XQ on large I out things you relative curious or little

Alistair Macdonald

Yes, good question.

of QX. that didn’t in I see any really think we

a of – the to of but the through seen always activity activity and of very move get getting being expect nothing normal, see from kind of we’d decisions pre-COVID end things if coming return more into ordinary. customers I And with projects being naturally think we’ve like, where what kind expected you the strong that You being large to the pharma from out SMID quarter, customers that continued clinic. made, we’d around

see, strong great very and very One, as very bookings service a quarter, you in as commercial, So clinical we strong well. Syneos in full strong in commercial had

pipelines bringing the sectors. robust sitting. those pleased selling, we’re pleased So and think a in that terms as end-to-end all we’re etcetera, and innovation integrating environment that to as well products full demand as customers good, One with And really strong got really of more doing I we’re button is the very pretty cross-selling, position. QX into we with Syneos go We’ve the in

Patrick Donnelly

And just do Jason, of you general the you on normalization access flow. the helpful. site and also that there? RFP That’s continued half of terms see kind in like on then in then Okay. back things on what what And maybe are in front? assuming recovery

Alistair Macdonald

RFP I’ll commercial, from well. sectors, think Yes, do all as robust are I seeing clinical, large flow. both SMID environment a sectors both in we I and mean, very

good, think healthy And on comments I then, Paul, environment. a So the FSP.

Paul Colvin

Yes. it’s No, and point segments we across and and really see this – been all I really think FSP full to service. strong continue at it’s

continue at partnerships the on, we I couple and we back especially to think this to had volume as new of So go as year those We into that’s quarter this brought will of my partnerships into ‘XX. expand a into from and continue that We’ve fold. continue add half there. perspective, to our we’ve we look, the think as going looked

Alistair Macdonald

site underneath the hit continue of that really levels, I above on is COVID some grow by to strong enrollment activations operational move Patrick, well has as and we to then point, and But a be metrics. pre-COVID trial have. continues Yes, that, continue that, vaccine forward to frankly, well. driven mentioned the the enrollment,

the best more encouraged our moving. get caught trials can by we study quite it. and around we for it’s accelerate So to talk we of as can’t I get benefit think we’re versus cycle And the we started and customers and up this about internally, get as how

critical forward. we think and it’s have well these projects – I can as mass So move

Patrick Donnelly

guys. Thanks Great.

Operator

Our next JPMorgan. Tycho comes question Peterson with from

open. is line Your

Tycho Peterson

physical Hi, questioning, X% permitting line variant. you know that Where perspective? quarter, on you quantify from the half go just where the in be above I to a given you could quarter couple the on it’s Maybe said stands today. then a less you you’re thanks. are curious of last the back of visits. than XX% of the last contribution Delta of revenue remote site backlog. I’m gelling follow-ups of can And sites think you monitoring. accessibility, the year leveraging how COVID going around said in that And

I too? of sites think previously, on you and running said front, about that up XX% were

Alistair Macdonald

let’s with Well, start Illingworth.

continued categories, also think within penetration very with projects project. Illingworth pleased we’re new I into new Syneos’ and

people us the really a in a presence with able number to come being of out year in the with and of I in out So expand terms rather And to to into it’s forward the filling to enabling think actually and new execute see to get footprint QX that home our progression sites, having we rest the looking operationally and of really the of than that visits continuing go. ‘XX, was visits through site. record

So but of balance to trial just people execution the I the you like, not COVID remaining more office. very if of out is that are decentralization of also for work, around trials get therapies where the think innovation important, reluctant new

lived I visit disease miles patient a think Illingworth of example or capture from an we the Russia XXX to trial in rare the a an site. had for patient

forward. without I for to continue trials. the in other is able that with I And to think will with a capture site in patient would think been lost big being that So between to a significant patient us dealing that foreign that land us step execute have gap because

come see able with COVID patients to in. and to to to enable live being sites continue We continue

had saw in the Delta that local really we between what in has with with saw continued. had sites the COVID the hospitalization concern through, vaccination QX, see saw India look is obviously, we impact can rates, QX the stats broken globally. been went and terms in the as rates. it the Delta out countries at etcetera, high you UK We The in think we has UK chain impact But infection I working and through the protocols, if variant variant, a the death. of in the it

So studies placed, sites – up new new through being it’s continue ramp so to as lots the of sites a sign up, continuing continuing year. go open for good rest us to the of to we

Jason Meggs

Tycho, Yes, hey, it’s Jason.

the contribution quarter way when backlog, was that – to consistent is is are talked a COVID than being it of the contribution going think about look both percentage, two less I COVID in revenue growing and about we one that X% that we full On the is right, was in it company higher year when think with as it at and be you I with look broadly would backlog bit total quarter non-COVID at which percentage. line talked revenue about how but a you it that in

about of So think I how would that’s kind it.

Tycho Peterson

momentum FSP helpful. XXX I’m you of is curious Are the That’s context in the how larger put side into backlog? kind could your in if of to kind of putting here? that Okay. XX business. multiyear Alastair, just only the deals You you’re you are mentioned way large-scale this and come called of wins. kind these out building orders three seeing months you

Alistair Macdonald

Yes, absolutely.

globally. very in with not just capable pleased to to function, play FSP, us I but a have very in in that. pharma the mean, sector, be for We’re large you

new in big So or terms of of them our and awards, replacing brand FSP previous customers, with pretty two displacing scale-wise, incumbents. sector three

methodology it’s be able kind grow to very So, large we pharma that, very take something to as pleased with deployment with the as in of our penetration sector that continue to there, need pleased us to a and a for share. we

So, deals. very long-term that, pleased with

are have all them time longer areas. so that think them and some a of in years, of data frame I at across etcetera, X different multiple on least services, clinical, than them

Tycho Peterson

But know last on the one obviously of in next pretty I was the easy are One easy couple had you of still said commercial, quarters. the comps. widespread. benefit relatively They Great. you recovery

So the on as the here kind you’re the on do you path past like you easy recovery feel get commercial? of comps, still

Alistair Macdonald

me, Yes, we do. absolutely, yes, absolutely. Excuse

been packages a So much etcetera. – over the focused several built how and Syneos and looking stronger commercial understands years that now ago we’ve years is us clinical. are continue a the to It We’ve really to see amplifier, The commercial fully helped patient from what build that Kinetic commercial the One, – think enrollment, worked support customers in of shared those come across launch several roost side lot The our we digital cross got team up that us operational. home from engagement, all a the clinical much growth deliver the quarter, of to sell Kinetic. are to including in I the BD dynamic really is conferences, the customers work doing we for lot patient team, was and past platforms, for. this lined integrated products with has We of of got that team. and with starting really X also most line we’ve strategic integrated in in for itself, several contributions more that model to as of still innovations cross-selling, clinical business. a work won in investor we of we’ve terms sell of And when phase. We first we’ve you with at before commercial

but way how in look commercial to those significant the at recovery commercial all a And just come in I think shown the much in we roost. win, much of going we shown itself are that now stronger to commercial, I So starting more in clinical. of that’s as home entity think forward contribution to things and a not also

Tycho Peterson

thank Okay, you.

Alistair Macdonald

Tycho. you, Thank

Operator

Thank you.

Kreger Our Blair. next C. question with William from comes John

Your line open. is

John Kreger

your Hi, follow-up into a sense to give how bookings guys. awards Jason, you Thanks. us can one about QX figured question, Tycho’s COVID Maybe total?

Jason Meggs

line so could which percentage the pipeline I continue, been not to And John, were broadly beginning but continues. with ‘XX, have continues, that the right, is the of COVID. at we as backlog. little bit awards But in flow as higher, it’s we you material. the of to A Hey, nothing some mentioned, work everything believe right, good news it’s headwind, look massive thought if the

out that’s rest So where see playing it it year how the and that’s for we was, and into of ‘XX. the

John Kreger

how impact lot talk Alistair, then heard you adjusting Great, sort those labor about the thoughts about guys, assume given as few less Can to all, we bit at of thanks. over think relating awards, to one, questions if it we’ve you margin FSP tend And little progression And just a to then, larger of next shortages. how Should that’s those a it? profitable. your and impacting does that about And a that I year? being margin, you’re way?

Alistair Macdonald

me let environment well, yes, demand with Well, the – environment. the start resource

I that demand demand and the pushed COVID, the at the to think well. trials, easy coming the the through of of that, see the yes, the in work We going recovery moment, right So COVID high CROs through got recovery there that that to with as work is it’s that sector. see

successful people the I being, think, are organization. very in bringing We into

culture and to people and we a people in there demand is And in in to demand important. gone take left demand But back environment. do and in usual a high for that and FSP. there things very think I the this that bodes people in We of have areas, work our well people. droves. to come well as for good organization is right that’s the oncology, heavy here competitors have bodes yes, is high work has organization, And are for our care who had like we us We their very

that lot demand think large of I out with work pharma places there. as that CROs, a is

a environment. it’s high So demand yes,

We are in it. doing well

the able we in we it And we pressure always to want attract there right we are at that, that. a that is doing team the a have talent and talent time. gainers want, where think great I job. acquisition net we great are that’s But with in

pleased we global. direction. that with heading environment where as demand really in So, is well are That

in successful And as I continue can bringing to seen was have U.S. easily in in days, the and early people U.S. the little we a it that than and really Europe we think move right but an Europe, people. the it Asia as in be more of phenomenon bit well. level positions

Jason Meggs

headcount, costs as side, different on any scale etcetera, don’t other in as it relates see of year terms there growing John, the than are the of and it I margin that. Yes, there. incremental to any

are adding heads. We always

each price in do of we have rates year increase nature. that our always escalation competing. and are things contracts clauses where We We

some just are and businesses And without of talked little not we we versus have that have We full then efficiencies organization to past, service, much we prices reimbursable at have based that forward this help unusually lot bound comes in see can FSP opportunities where this, load the increase too just work high. other via looking offset demand and given anything is for we And does. actually a FSP the the environment. a might service that. about of seeing the that the full on But the we this a bit on

them the grow we to get you just need when XX in just about can past to to between to over accretion we margin same accretion. the time talked feel margin So, we show the that like of and basis EBITDA, and have different continue commercial total that points down all and year as businesses, clinical

Alistair Macdonald

add as well. Let me to FSP that piece

a win, of that – we of top. hybrids delivering So, lot well FSPs a more these as on we the up end lot

So, you the as you the usual margins, in with an you once asked provider, become you but tend service with well. to full get asked our etcetera, work, – preferred pass-through a with through which in, Jason says, get to get you comes that get load FSP, tend – bid door on with as the to

So, and from of kind the traditional into accounts, have expand FSP, FSO, do whether and etcetera, deliver land want get these we points to multiple it’s that. commercial, entry we

John Kreger

guys. Thanks good. sounds It

Alistair Macdonald

Thanks John.

Operator

you. Thank

comes Donald Markets. Our next Hooker Capital with question KeyBanc from

Your line open. is

Donald Hooker

Great. I this for sales was maybe I intrigued pharma just wanted know by the a you comments now, while around the an update guys to but here. hear about talking have been I force.

to a your are – gotten, the You smaller, are at Has post-COVID? we adapted saying view, this sales fully now? across digital. to sense, of we forward industry normal going there has sort which In continuing still this industry going being – new the trend are pharma more teams see sort a have makes the or are of

Alistair Macdonald

Yes.

actually, Michelle will trends to are there as comment there, and two think I get well. I in

is but think, second getting come are digitally So, the There teams more specialty, smaller more going. I digital through, out more norm enabled. two think is trend ones generally trend, of there I to the sales the big hybrid, that the But now. norm or one shift that is is that still

go still that. some We got have to on ways

hybridized are kind that by digital more to HCPs our the provide great to seeing more platform, field customers And we So, and used platform, omnichannel support, that’s of that for Kinetic by being us. support teams. the

technology. have to We got how know great use We it.

better for great to that’s it. return We with ground don’t more sell sales our results customers, well. if using more reps. cover as I can a to seen can product by we enhancement. customers have We them that’s great And think less obviously, a

numbers right rep to get their as need us the don’t the incremental and help place right in at customers that there for So, get and much to expand the revenue out drive time. product

within there of trends I Jason XXXX, model. have we two target do in on to so think So, teams on are to think Like launched a said, and that we the in Michelle? I kind more it. think continuing I are have XXXX, drop again subtle

Michelle Keefe

just in one comment I growing record Yes, those to X in is are around resources of last so is deployed note embarked add things. number types trend I the deployed a thing, are MSO, of patient resources are and presented that’s the will we those will variety and and are they sales fair specialists a are educators. those years, There they and resources are not those important more needs

the teams integrated, are – right. more much So and

specialists team. digitally reimbursement managed on working and see enabled integrated cells folks representatives You and and sales nurses care and

think, deployment important And solutions. diversification a really, what’s so of that’s going around with I on distinction the very

Donald Hooker

Okay. Maybe just a follow-up you on for that. there. your comments Thank

Alistair next are me are seems sounds getting said I we It and to same will and are the going give in what get coming same if like it to to is continue quarters. answer. I the smaller smaller. So, going the They ask from you you quarter, probably like question – teams smaller smaller – you think this sales

industry. like trend. interpretation This ongoing what you So, the of that is was change said? Is big an there it’s not fair in a one

Alistair Macdonald

the think gets infield I team smaller.

because you sales So, platform, you you have dedicated kind a the but whole centers, end got call supporting delivering team, on we well less have that Kinetic as are with the working it. of up hybrid, as delivering got reps, on the the team

got that. You omnichannel of have the pieces

have that that bigger a you you proportion XX the providers sitting out yes, field, traditional don’t field of team terms you direct behind are analysts. the in now with a know, XXX in I directly. in out if But of, got interacting people, docs might healthcare So the had really with have

data didn’t We insights how should crunching to information. we how a to are lot – that do sites patents in we different optimize and who in to and is, at, get be a that so build their we different of that well, use this, doing the we can who prescribing do different show that support do that pattern look have data

working a team got now. that’s have data science on that you So,

center. call got have You

etcetera, have and training. supporting the the got You digital people the producing materials, and

they a rep leader in have through of in in It for innovations for ground of in not But coming heads that than enablement a trend right complex Syneos well difficult to general, replicate in it promising of a territory, technology different that So, deliver the digital with And new stickier reduced are capability, number And terms really of of Pharma is bodes technology. out car. And cover the in makes driving doesn’t I more delivery. right channels, have a it for team in more because we the to that sales the commercial us little continue in to channels, their to us. roll in bit rep kind themselves. Yes, very revenue being territory that’s the digital difficult field replicate. the delivery a they more with able channels. also because tools, is did think A but it’s more for I and terms got the and we around but that more market think just the digitally a a you is for

Michelle Keefe

is a approved, getting is add-on the last lot right. this due products of of that One are complexity to the

gene they are delivery are So, as are the market, much they it’s your are you they orphan they to look are you at more fifth These pipeline, and in race where rare have have the products cell therapy, an oncology, respiratory getting going highly are a anymore. inhaler that disease, not right, products you systems. on specialized like arms the are – complicated and

have to types the support of a to of the them align And trying that’s so to kind to capability teams ultimately patient. to deliver

just is that also pipelines So, what is the like a on sizing. are there looking based also driving need

Donald Hooker

Interesting. Thank you. you Thank the so for much commentary.

Operator

Thank you.

Anderson Elizabeth Evercore ISI. from comes question next Our with

line open. Your is

Elizabeth Anderson

was the in congrats third a if Thanks I and of and that are it clinical the and of how commercial? you regarding also, things between some you guys. the for then and help acquisitions quarter on and between numbers was just out commercial? clinical all pass-throughs terms between divestitures, wondering that breakdown you – on little are of quarter. about just those break in I And Hi just bit revenue so if us so much you doing this thinking the question more provide next could could said clear

Jason Meggs

the on about Elizabeth, of we the M&A be activity the recovery, look, Hi that increases continue do businesses continue the as just to for might better and rather, between XX% launches launches Okay. that commercial just offline. and excited coming come clinical of team a backlog now Syneos in sequential growth, to different win of record quarter quarter, the out Commercial, right particularly on book-to-bill, lot grow to the businesses they But is in both with and a two, coming X.XX up. establishing see last of momentum continue to year lot work and One almost backlog.

I talked We organic to quarter a performance recover. how at on quarter growth XX% half. Clinical high-teens trials normalized we see. Alistair into well continue commercial about as continues are a trial and three really great So, COVID about how little post standing as that a shared business, the recovery. will just little they side, when really longer the back bit term as look thinking seeing vaccine there are carrying well bit are up to and basis, COVID the COVID we that looking good think you right, the is which in at And about four,

we we vaccine in or other we two COVID have those on growing. Although and relationships up But are we would continuing projects did the peak quarter stand large trials. trials are the as thought the likely to

from quarter we can We sales through revenue That’s great trying back are four in again, as to in half. as one, and pull best COVID. well into up catch in SMID We to quarter the in those two. performance had quarter starting

low growth And the you at mid-XXs, at when there so the clinical growth. look right, in to looking

really out the to higher as you are we their if where up going and that But awards with at with look their clinical we some they it backlog in think are their we and how looking are I others that stick that’s Investor pleased it. it. growth other thus were through. really Day industry and the what been coming put December been And low-XX% year, go the hit by I side segment, we And backlog have you there seen in pulling then to really pleased just are So, has guidance COVID at – at and able seen catching we over we burn that. that at on far think have time back we have where our been and unfold, in to projects of COVID our in have

Elizabeth Anderson

Thanks. That’s helpful.

Operator

And a question with Tryhane Credit we Thank you. Katie have from Suisse.

open. line Your is

Katie Tryhane

Hi. my Thanks question. for taking

unusual you or saw speak than the from a those in Is awards, Thanks. nature I perspective? of awards our surprising therapeutic the call customer out So, in of other what maybe three outside there the in the can clinical net terms FSP larger mean, of anything to you larger XXX to awards? three quarter

Alistair Macdonald

Hi it’s really. Not Katie, Alastair.

We SMID. the in got well-balanced distant pretty quarter. a I low think a

in leader the are We sector. SMID the

SMID, shaking but FSP and think his don’t in bias I head, balanced clinical from therapeutic – commercial. quarter their commercial time. and large in So, business say, well all think like units, right. this I Kinetic mentioned, so that’s a guns Paul is the any as was a FSP strong and using we that’s winning us expect cross-selling that, good particularly therapeutically, kind ourselves I for winning of as in differentiate to into there pharma. pretty contribution it. But we yes, the firing Good as and think awards, you

So pretty well with also yes, helps. balanced pleased it how is. that And

the for or asked point win to who – skewing it somewhere resources, resources workload enables I way, are think helps pinch towards when by you that, can’t the resources question but I not and about remember creates a deploy balanced us a to really oncology more like a else, we which therapy. in of balanced kind

And So well yes, balanced also how with therapeutically, but pipeline, not I looks as way pretty a it actually. pleased just globally. well. It’s think was well-balanced pipeline the that still

Katie Tryhane

activity then helpful. shakeout we landscape mean, the can lot Thanks. deal this an terms – Okay, update you of I marketplace, of in great, And you provide are or opportunities on standpoint? seeing of what year. committed seeing saw any in a Are competitive terms earlier in you that’s

Alistair Macdonald

think perspective, M&A you Katie, an From yes? mean, I

Katie Tryhane

some the in you opportunities earlier is any with I how out year. Yes activity terms in with that in all CROs how or the of of are you mean, to seeing what the capitalize competing the deal Are field? seeing impacting are you on?

Alistair Macdonald

Yes, absolutely.

activity. of some of could those I think repercussion be wins FSP one of a our M&A

think pretty our and become well, have opportunities think when that growing into employee work our where ours customers that I you that helps So, like we scale those you an gives like because an that want able organization into before. – – we back go people that work for. hire to are to the talent, stability, being I to fact really come And people

that. and in that. we lot is capability that’s to value hands, as of in in So, that lot of, actually are assets looks a plenty interest on But excited coming think we commercial commercial and that we I seeing are with pretty like are of landscape, There pleased organizations that. changing up still lot that get yes, a well are the It M&A creating the a of people opportunity. going that sector, books we are etcetera, about the see activity of private

around continue we yes, to be that. So opportunistic

to continue the to bring to right use so. continue We we capabilities our in and people, do will

Katie Tryhane

Thanks. Okay, great.

Operator

no back to would I closing Thank in showing you. the call for like I turn remarks. am Macdonald questions Alistair the queue. to And further

Alistair Macdonald

you. Thank

So XXXX our our delivering again, challenging for market profitability to be your to thank and to and forward growth continues. continued Health. circumstances you, from very Health Thank the your as Syneos strong go entire and and positioning investment they great in continue do attendance thanks and day, second customers. through recovery for team be today We half you. manage sincere all look confident in remain while to and the Have Please for interest of you safe. a Thank for COVID-XX Syneos good. the in

Operator

This concludes you today’s for conference participating. Thank call.

now You disconnect. may

Syneos Health (SYNH) 9 Aug 212021 Q2 Earnings call transcript