Earnings call transcript Q4 2022

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Operator

Good morning, ladies and gentlemen. Welcome to the Syneos Health Fourth Quarter and Full Year 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time.

I would now like to hand the conference over to Ronnie Speight, Senior Vice President of Investor Relations. sir. ahead, go Please

Ronnie Speight

With CEO; the and Jason our everyone. Michelle Michael today Keefe, COO. our Meggs, me morning, call on are Brooks, Good our CFO;

our a to at website presentation press addition is release, In corresponding on the investor.syneoshealth.com. to prepared our remarks available slide

make the expectations, in COVID-XX the of that obligation for Harbor our the anticipated war and constitute the Litigation growth, pandemic financial forward-looking Private purposes environment, we update to XXXX Reform Remarks regarding the transformation macroeconomic trends, provisions under Act results Ukraine them. statements any expectations and Safe initiatives, about future expectations regarding Securities disclaim we and of

are may a XXXX, Risk Factors discussed forward-looking materially differ XX-K indicated those section statements of results our result by the XX, important as various filings. December Form year ended these SEC factors in Actual of for and the from These other our factors.

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

financial measures, the appendix measures of directly comparable most GAAP For reconciliation our presentation. a please non-GAAP the to refer with of

I Michelle? would over call now Keefe. like to to Michelle turn the

Michelle Keefe

Good Ronnie. us morning, Thanks, everyone, and joining thank for today. you

Clinical remain positive were by We results of are from came encouraged in awards as in and the strong. in focused and our Commercial investments. quarter impacts our early this seeing you release, awards in and signs feedback our As saw expected and on improvement customer particular very are keenly transformation

our company. resetting and by start the expectations priorities to key future my of want the stage for I for the First,

ensure that me we and our that with customers are to them I continue Let priority their exceeding to engage directly expectations. underscore top also remain

realignment. development laser driving structure across As we with operations, on Clinical business team, the a particular and concentration transformation business on leadership focused cost are a

in commitments. retaining projects investing and also customer how are we our ensure talent prioritizing and We on strengthening to delivery resource optimal

continue believe this is margins While in the and success. long-term competitive investments to suppress for strength near-term, will Clinical in foundation these to building a approach our a reestablishing responsible I firmly

our demand net would company for discuss the now X.X% results on currency declined drivers quarter and while the basis. and review by awards. revenue prior our growing to like fourth Total compared constant to a I year, X%

of revenue offset Solutions impact primarily due lower and Clinical by reimbursable to X.X%, foreign net partially declined awards higher expenses. exchange, the

on declined lower expenses reimbursable growth Clinical net to Excluding and including business, X.X% conversion largely delays, revenue a large awards currency constant and in due primarily backlog FSP. by Solutions basis, pharma our offset

compared higher -- by of Commercial Solutions Deployment reimbursable XXXX, to Solutions. grew in revenue driven fourth expenses X.X% quarter by growth and the high

Commercial by currency Syneos One Solutions a basis, expenses Solutions, contribution due Excluding the to constant Deployment portfolio. increased on driven X.X%, reimbursable primarily and revenue from the

continues business customers, XXXX and impact growth Commercial with to over the perform to as expectations, particularly Our macro began our in consulting. course of has although SMID communication environment the in slowed line

pharma, large In in we our new although in segment, progress Now let’s are particularly by underweight pharma. several XX Clinical we review opportunities, demand top drivers. this encouraged remain on

an regional portfolio, we consolidate relationship expanding outsourcing vendors two recently global are sixth former provider XX-plus we two fact, XX relationship helping strategic the into after into them their across a top providers. providers to preferred In a model of where lead now design

example resonating. is an relationship this and important revenue, material not of While on approach, to impact new leadership we do near-term customer expect engagement dedicated our how solutions is this have with developing a awards fit-for-purpose expanded

healthy. remain provider preferred existing Our also relationships

towards over their as the the these second from We strategies. anticipate XXXX of outsourcing awards to slower R&D we see spending customers incremental year. weighted new Clinical pipelines continue half customers these Although, assess course the and of

Clinical development early business very model returns With on and our customers, are our operating the existing we investments. see to beginning SMID

flow RFP from since included down at on of more TTM XXXX high QX customers was remains value highest While and quarter a these its level basis, RFP flow fourth opportunities.

improvement to beginning are see we an other the early customer to increased repeat Additionally, signs customers with win third our as of quarter, indicator of important compared rate satisfaction.

However, to overall amongst to improve we work rate still have our customers. do win SMID

with expected. provider recently future already customer preferred has a that phase early late-stage multiple for won with generated also RFPs a SMID opportunities larger We relationship studies

drive early awards, reinforce these materially yet that not will gradual have our indicators they a to impacted SMID While overall investments continue recovery. confidence our

the this TTM by awards within encouraged basis. the by times, of us expenses on activity quarter, for cancellation affected our normal a including that X.XX continued times Clinical to resulted This net are third quarter ratio in book-to-bill X.XX a we Although fourth in range. progress, and reimbursable excluding dynamics be impacted the

these have trends We the business. and into recent factored our for flow in Clinical awards XXXX outlook RFP

highest a second the awards with on times produced excluding in times expenses. ratio X.XX team X.XX history, our book-to-bill and of the TTM basis, quarter reimbursable for of net Commercial quarter a The

remains pharma flow have on up a remains environment where among seen TTM basis, customers, demand relatively sequentially. softening healthy, has RFP Commercial we the but some While our slowed large

Reduction of Inflation commercialization enhance of commercial innovative We light impact while temporary believe customers the efficiency. for is allocation budgets evaluate as these this Act, looking to their models the in

customers, These continued outlook XXXX business. attributable slower SMID also the for flow were primarily into RFP trends from TTM recent to our have macroeconomic Commercial We the factored to see environment.

primary provide highlighted will two update areas we the I quarter. of Now last investments on an

organizational provide employees, better and roles have deploy solutions fit-for-purpose First, we on Clinical improved each our customers an allowing needs. while processes customer’s recent to our making operating we specific that are experience progress consolidating transforming simplifying and for model. In us to structure, months, streamlined

closing differentiators and and Clinical competitive are ranging investments from of Foundational defenses. showcasing proposals to machine detect site been AI better and issues. learning enrollment and bid accelerated and statistical gaps tools performance our to these improvements investment data have and applications, modeling development of risks to These for development use and

an providers the Commercial by that tools all we and patients under trusted fully unique our further compelling opportunity and of and blending the leveraged We these solutions into of modeling for possible won and data combinations engaging Clinical feature we made and Clinical our deploy statistical therapeutic to will believe for enrollment For recently example, mature site capabilities, tools unique and experts. of capabilities. areas technology, therapeutic as materialize our direction Commercial wins healthcare

site model practices. leveraging and We maintaining local high-touch knowledge site effectively are for to more standards-of-care also while deploying activities, patient related global regulatory of a local requirements, about best performance, country standards global and

we and model startup, and This high improved of our and XXXX. expect customers feedback for sites, new signs and to quality for its an employees. generated more integration automated portfolio largely from our across enrollment streamlined development new mentioned, customers improved delivering Coupled tools operating first complete data customers showing very early Clinical productivity, and be encouraging with applications during I the model half of experience has the is

retention to awards. is employee momentum Clinical engagement, continuity high, performance, build and also strong customers turning conversion customer enabling two-year a us providing and operating for and net and backlog at ultimately,

will factors our believe better new important solutions and capabilities investments patient and and enrollment expertise heritage Commercial of strengthening scientific of design, support protocol in therapeutic Clinical We the and integration business driving be improved and in faster to long-term as outcomes bundled these technology, growth.

leadership teams and the Christian and drive is of of area engagement. working investment development enhanced operations strategic our team with transformation business his with second Our closely Michael customer to focused

expand continue to already veterans are new seasoned relationships BD We our opportunities. hiring with that talent, bringing

and delivery, scientific are improve Clinical talent and our and our process sales expertise bringing these of key forefront development to the account we to the therapeutic activities. expanding customer is ultimately and customer’s leaders to decision-making solutions

organizations Further, to efficiency, across customer’s adapt we while FSP allowing us full to leadership quickly to have and each consistent, quality enabling partnership established outsourcing and aligned each pharma dedicated evolving large strategies. and service

enablement. awards and this aspect management, One important fully more Consulting of win and and participation expertise with and account Another end, have Commercial strategies customers of Clinical driving asset models. support to development strategy prioritization, their our outsourcing sales the Clinical leveraging our funding we Syneos is shaping To Group increased for

operating awards, and win high is consultative generating also new opportunities. incremental our while with expanded creating business improved repeat the opportunities. more this increase expect business Clinical approach Clinical rates approach over we Combined Based recent our already customers, model, development on with progress to on engagements value time

evolving We our cost evaluated environment invest to have and the to continuing drive while also success. for demand to structure efficiencies, our and long-term align organization our current position business with and

and Unify impact various Clinical provide and employees by will value to I senior projects margin and expansion. will Project to have Velocity, ForwardBound, including transformational effort me. how led ramp initiatives consolidate Reimagined and the decided initiative combined will company, that and integrate drive under and a to including directly within reports management these will single underway This bring further details, the long-term customers Jason guidance. be strategic

summary, the benefits programs long-term margin serve improved over quality customers In to expansion, and believe best us we scalability, through yield have performance will enhance I and time. while discussed enabling driving

remain on transformation is compelling ongoing to to best and focused Health this in We a position confident opportunity. strategy senior on market our relentlessly leadership capitalize Syneos long-term

to for Jason’s be dedication will contributions I five as including years, Syneos CFO, and want Health the to this and thank recognize nearly over As nine earnings last years his him last call CFO. as

are and we best. wish him grateful leadership the commitment and all Jason? incredibly for his very We

Jason Meggs

at been and proud Syneos an great have and everyone. accomplished honor Michelle, very Health, I years particularly for words, kind team a morning, thankful of to we these by CFO. the work together. each and supported for a have been you what Thank I to has five past and of am as them privilege good It

compared me down constant XXXX let reported revenue turn Total billion, was that, the XXXX. to currency quarter up With as in and to X.X% $X.XX fourth results. our of X% for

constant declined the quarter a on basis, of revenue compared and to fourth XXXX. expenses reimbursable Excluding currency X.X%

fourth to Solutions constant billion, and quarter in $X.XX currency X.X% X.X% reported revenue compared for up Clinical the as down was XXXX.

and expenses Clinical large X.X% versus net lower the growth XXXX, basis, Solutions reimbursable in offset and delays, largely on by declined conversion quarter fourth primarily awards by backlog constant revenue pharma. currency driven Excluding a

during and due Clinical from above an XX-basis-point revenue the fourth was tailwind reported higher foreign includes Total expenses exchange. our expenses. quarter, revenue primarily reimbursable as to Clinical expectations reimbursable

Fourth X.X% Solutions X.X% quarter in or Commercial compared up $XXX.X million, was revenue currency to XXXX. constant

Syneos One basis, in Commercial increased contribution by from and communications on reimbursable was Commercial portfolio. in was This consulting. Excluding the a headwinds X.X%. partially to our expenses due Growth currency offset revenue primarily Deployment growth Solutions, Solutions by revenue constant driven and

Commercial due higher expenses. reimbursable the and a exchange. our Commercial revenue was fourth reimbursable basis quarter to reported included of from above foreign XXX Total for expectations points also as revenue growth expenses tailwind

continue will to reimbursable is project first One expense in than impact anticipated and expense primarily due Commercial, It XXXX. reimbursable that to is fast four, is two and ramped heavy Clinical note to the were in reimbursable quickly. quarter that burn in important of expenses the burning half higher projects one

quarter decrease fourth and the margin EBITDA compared including of adjusted an favorable quarter result primarily for of million, expenses revenue the XX.X% EBITDA was margin below $XXX.X less the due decline was a the less to Adjusted decreased mix, of basis our primarily in quarter fourth and a quarter to XXXX. reimbursable of The the foreign impact to XX.X%, representing Fourth points investments. adjusted reimbursable EBITDA revenue expectations fourth of adjusted favorable margin for XXX mix, expenses our EBITDA exchange.

XX.X% year expansion adjusted XXXX, XX adjusted of to X.X% represents $XXX.X This the full year-over-year points. EBITDA and EBITDA margin basis million. For increased

the exchange in margin expansion reimbursable foreign incremental anticipated higher than of points. XX expenses was Excluding QX, and basis impacts

by quarter fourth $X.XX, and the rate. the up count diluted EPS higher for was declined partially XX.X% lower adjusted $X.XX XXXX of decline X.X% offset share driven by in expense, and from year-over-year, interest Full adjusted tax and EPS year depreciation diluted EBITDA XXXX. Adjusted

$XXX.X full DSO, for at full $XXX and quarter fourth for Operating primarily cash from year Operating year healthy declined billing due million higher cash and to accounts flow of coupled concentration and receivable higher to due the year. collections. DSO the million the primarily timing larger the and pharma increased related taxes with flow interest. included for was cash the of customers, increased prior

investments primarily fourth due million $XX.X were year, support increased expenditures the strategic $XX.X million platforms in our for analytics to to data, and for technology and the Capital quarter operations. full

voluntarily quarter, prepaid the During accounts expanded facility extended our same receivable $XXX the Loan by maturity amount A. million, we of until XXXX and our the Term securitization October

and while refinanced to $XXX capacity, to $XXX our revolver closing off full Term also expanding billion the facility facility increase primary to pay The loan. the $X credit from available credit November We facilities, revolving at previous to drawn maturities term XXXX. on million the were extending our million A

$X.XX resulted million, transactions at facility. subsequently the our net end quarter year-end additional we billion. million of X.X outstanding Finally, was $XXX.X of an at These repaid Combined times. with of in cash of revolving the leverage $XXX debt credit unrestricted

QX, rate portion at When of to the rate interest exposure end debt making rate. the matures swap our our current with of to a plan XX% continue floating effectively of interest fixed XX% hedge of our to we target

this to XXXX fluctuate. to for some expense anticipated interest conditions expect around We continue provide additional as certainty market

Our the a research year quarter tax down non-GAAP by bringing fourth tax and effective tax development state lower the rate effective credits, driven rate full for increased XX.X%, was for and to XX%, rate. our

Before turning Michelle to guidance, I provide highlighted. to the on initiatives details want more consolidated

right-sizing and streamlining our our realigning Our while near-term cost organizational efforts workforce, management include structure.

hybrid employee environment. approaches also work deploying are while our convincing to global a that for local new We align facilities footprint, engagement better

automation our transformation and technology across business. term initiatives to longer to are innovation certain include our utilizing Our partnering while drive and partner on functions, expected

result activities net the in of cost highlighted. savings in In aggregate, expect have million $XX we XXXX, investments initial funding of these $XX million to we to

to to our investments guidance. incur as as significant activities We expect in $XXX year continue expect transaction and initiatives million Velocity in costs we this $XXX these these integration beyond, restructuring, net To savings increase fuel and reflected million and ramp to to up. XXXX, to

now our XXXX to guidance. Turning

impacts Our XXth. rates exchange and and developments, the of contemplates foreign as current our February estimated guidance view of ongoing of economic reflects geopolitical

revenue exchange expenses. basis contraction $X.XX includes million. of of representing of a reimbursable We estimated to expect an total including to $X.XX XXX X%, $XX of from billion headwind billion, This net points X.X% headwind foreign

XX%, range points XXXX to million. million the $XXX to from to midpoint. from approximately margin adjusted an total $XXX expect We EBITDA reflects XX.X% This adjusted down EBITDA XXX of our basis at

decline representing Lastly, diluted year-over-year to $X.XX, we to XX.X%. EPS XX.X% expect from adjusted to range of $X.XX

is EPS diluted of interest million $XXX forecasts maturity of of adjusted This expense current market increase and based on the over million, guidance our XXXX. an upon Our includes $XX.X XXst. $XXX rate interest swap reflects million March current to

rate. non-GAAP diluted of XXXX, effective over also guidance tax XX-basis-point increase driven a the XX.X%, assumes EPS in adjusted increase Our tax by an a U.K. rate

diluted shares. also Our reflects million guidance share an estimated of count XXX.X

We expect to million. million $XX outlay for net during approximately taxes cash be $XX to income XXXX our

compared XXXX. This billion quarter million includes of $XX billion to EBITDA $X.XX the and first revenue We $XXX XX.X% of to expect million. revenue quarter reflects adjusted $X.XX million. foreign $XXX of first X%, X.X% of a exchange decline to decline total to EBITDA a This adjusted of guidance XX.X% to headwind and of revenue

Importantly, changes significant reflects as expenses, in FX has points the EBITDA approximately the fourth half the on basis tailwind during the by a to to due guidance of revenue impact a This The expense most second the headwind quarter adjusted first us it driven in our to basis a XX points year-over-year the projects results largely also tailwind year. attributed that tailwind XXX reimbursable reimbursable to of margin. quarter. those projects impacted of

QX benefit of more In year. savings will impact being initiatives addition will the we investments quarter, while margin heavily our seasonally highlighted to have throughout low ramp QX the a the

awards burn XXXX we further reflected rate not macroeconomic during backlog low as net in XXXX. single-digit environment, experience guidance and do our growth in and Clinical revenue assuming expect we in deterioration recovered Finally, the

this revenue and savings Given guidance, comparable EBITDA a a adjusted we level reflected EBITDA dollars XXXX to the margin in our in adjusted currently rebound profile, XXXX. initiatives, to investments expect our increased

Michelle comments. to for over back Michelle? it turn to going now am I some final

Michelle Keefe

for enhanced the model I focus encouraged am stress feedback success. by delivery excellent our I our future for our foundation strategy. continued In customer operating as the to on customers our want closing, on differentiated and

awards. scalability to enhance Our I our and other the designed operations new initiatives of investments drive and efficiency and our business strategy, accelerate are further discussed

of all we for their world. and Syneos thank our I world my customers. transformation, on we positive energy together only for around and Health patients impacts around the performance to the colleagues the proud the collaboration want and ongoing I is our of can achieve highest our culture have am

to answer will be we and questions. remarks prepared Operator? our completes happy This any

Operator

[Operator Patrick line Instructions] Citi. the And of from question Donnelly from Thank first coming you. our

open. Your line is

Patrick Donnelly

made Thank one Michelle, -- comments on the there. you of guys. maybe you the Hey, for questions. taking one

on you in calls about the I of just times of look thought definitely and well? comment, are you the what it’s them, other act come this piece, Commercial taking up was things are a new a What much it peer few kind What closer think as of an given I it’s know under be? process from talk kind commentary hearing is pharma, with And there? they large the again, impact being deliberate just could at given there? little how the out Can spend the terms maybe interesting IRA. more

Michelle Keefe

question. the for thanks Patrick,

is Act, So these environment we Inflation have it looking QX Reduction want seeing around being impacts flow portfolios to portfolios, into really the have our the to in pharma large from on XXXX. hearing slowing we are invest just they IRA but seen we when potential are down purposeful at trailing based the their digits sequentially And RFP high-single down macro in the and XX-month of where the up QX. conversations they

the thinking what of invest what activities, in, and are do through the on based of their they they they know in XXXX products are want They future. development in the to have types list or business portfolios products

we conversations lot those pharma actually we and partnership a companies. of -- this part The in of a are our teams team have news work good that is with around does

see do of sure. about part solution decision-making those slowing we we planning take doing they of for as And about more for and profitability as Commercial how it now can we models we that as but assets become well so of of new right driving we their what in they are temporary, it’s think thinking think the think efficient models, are today, have the that, think they advantage tomorrow, some

Patrick Donnelly

perspective side, bit? kind And metrics helpful on and like there around road, a Clinical come of least for that the bit but have there your Can customers firm to similarly like to remained that some you. then on down maybe would of sounds obviously at piece, life what bookings you you is book-to-bill helpful. feeling assortment. there’s you conversations be gives IRA soft give the of just then with that That’s going is the just book-to-bill, customer you back any had little in potential again, signs up can confidence of terms have are a some a inflection little and a us the potential it number that booking Clinical well? Thank as just impact And Okay.

Michelle Keefe

Patrick. Sure,

So customers important have green some shoots. some seen measure. to see awards. in Clinical are quarter very as repeat that that, know, did we really an There as a we We as you indicators last about early us talked for improvement

So awards see repeat we with customers. did improved

our pipeline SMID seen have improved significantly. We RFP

I think have seen SMID it’s that the second flow we in QX. highest RFP

win which important We also was had preferred our we had providership a for really added. Clinical sixth

are about we that. excited So

really there there’s did -- global really partner regards leadership, to used to on providers. And consolidate some our FSP with and to operations some working team senior our consulting really how with along team in we we how Clinical plus to things vendors innovative down XX

preferred excited Commercial that really Solution future with that sixth to about drive and providership. so And opportunity Clinical integrated

Patrick. business, So at we are repeat looking

you who around even feedback We to, are been But will looking the our he’s from very, more very flow. specifics positive. customers Michael, it some what I give has over turn will at seeing. maybe improving RFP

Michael Brooks

Right.

investments Commercial for customers. our help are applications we data scenarios, novel and have data the we consolidate So, looking into from we been feedback Clinical getting Clinical monitoring, enrollment been us into have to model and Patrick, solutions positive capabilities out better to as as putting

long who was a I the he to industry week the been remarks for talking project love me, strategy, and fact, CEO a time, earlier just around the has love to team. In this

help Clinical combined will and are We you what then Commercial together is doing.

we really winning, we Board, it just bullish organization talking last on than green beginning are are very are he’s was where the to we shoots and of we those how the as at And year. across different seeing clients is how going an are

Patrick Donnelly

Michelle? the IRA Thanks. maybe Great. quickly you Clinical, And impact Thank anything just on in see you. there,

Michelle Keefe

Sure.

we the been Clinical the really on heard side So it hasn’t impacting anything now. haven’t That conversation. really right

significant I this But, you side at pharma -- impact think the more have no, seen across to-date. it’s the portfolio. long-term looking of any it we Clinical impact on really have haven’t their the leadership at

Patrick Donnelly

it. Appreciate Thank guys. you,

Operator

coming question line Tucker you. with Jefferies. Thank of from And our the next Remmers

open. is line Your

David Windley

Hi.

that’s Windley. morning. David taking Good think for first Thanks I question. It’s I I guess, me. business around wanted understand my to, development.

that a how a out it and set it probably talked logic heard was about September and maybe cuts critical that from quarter of to I third and about, organization the inability you decision big decision I kind you guess, what -- business cleaned to or that, I make is team in think talk that to seats true in your magnitude I I are Christian house development is the But could born maybe of behind when believe wanted understand think, those about your lack was like in the that, time you of at people have the was that. enough pretty brought full that today? this backfilling and to meaning feel bringing pretty clients you of solution that a where it’s the development were bookings

Michelle Keefe

David. Hi,

the the SMID whether whether people back it’s a market, take a the in in step the seeing So sure took looked for FSP it’s right development us to advantage opportunities. increasing the from time going are impact perspective, locations talent right, to we to of put making in and right whether what to different place business different at have the different globally the we take we market, markets, right that it’s at it’s trends right the

talent business redeploy to did impact roles different and development our our opportunities. we so to And own

team, are about managing strong well project teams, partnership managers and say, that as making our as that within our BD have lot we levels will with We have you heard our relationships, business. how as the between us it’s building pharma really large large most at us really, help have, the sure experts talk repeat partnerships pharma, dedicated a therapeutic senior the we about

our was And so within salespeople aligning our the leaders it with around really business operationally.

is doing business by large sixth improve that, that, partnership. are in we are with SMID why pharma seeing we seeing, right? are are That’s so, we the we customers. And green why we That’s the QX seeing repeat why that seeing shoots our believe

And so, it reframe the be best I capabilities talent and would the looked talent, what extremely our sure along some new bringing we has as did that the to with to way of was what make could at in competitive. that existing mix need market that we needed we

that’s think I frame I how would it.

David Windley

my And related is for of Thanks that. projects. around Okay. I question guess, second your consolidation

of I investors number on. of working the that are welcome you think the reduction will projects probably in names

that. Clinical from of client kind our of and this. model is But to that people a have and maybe So back control, in guess, Clinical impact there and to fundamental bookings? or more more operating is Reimagine operating an further changing specifically client bears now Clinical way, on control reduction the kudos do spans run it gave evaluate think will this the that might that depressing step What of will short in Project to changes that it expansion ask is for -- a spans the the anecdote see? are reports model I I you would the to you need direct about Michael, simply Velocity. The customer

Michelle Keefe

I color. let then Michael will and give So more I you start will

under be closer getting the really I right? think, to So makers umbrella have the, made decision statement, have the been of that the umbrella the That right? we should changes customers,

customers we We single they to the to do the have of things running. trial are want Clinical the makers access to sure achieve every that make are to need to goals who make sure our can we that decision do that able

that’s So the think I first thing.

to into The is, is they that earlier I of that make lot second having trial. journey them brought where technology a think sense doing of a impact in bringing that really customers along and as introducing each of our as is opportunity we we solutions us, well lot are to every thing the are existing where that in Clinical

are as we feasibility, great great sites, trial. the the well positive journey as patient identification, and relationship results feedback patient really some throughout our relationships around enrollment, So patients seeing of with with some our

some we StudyKIK RxDS. and the things along some are business, have as well technology as using developed things automation So of with we solutions, -- the really our of through

a much our think, positive. more customers I bringing, are to streamlined our has approach feedback very, and been we So very

I us Michael will have it David, the worked customer, up how you front the in who positive let have I brand-new a of and but give So, is granularity maybe customers from gotten, the more that extremely long as as customers. shows feedback for around color because with time, well

Michael? So

Michael Brooks

Yeah.

David Windley

Okay.

Michael Brooks

we course implementing been the year. So, David, last as and have this year over the into changes of

doing capabilities our incrementally, and -- been have We it introducing customers. piloting to first then benefit bring introducing new that believe we

like tools use RxDataScience things, our did and tools. of is, quickly. we very have visualization some us close help those gaps some to competitive data statistical Number in modeling We one gaps

us. closed So of get to for in they period nine able those a are months,

from projects like, modeling the benefit to and And into the of seeing site data. so clients out visualization, being see good things, various good got now enrollment a data and activations, able really having

really closing of through. By some our shine those gaps, let differentiators

talking So how capabilities, because we things where better, like about those Commercial our time historically. some our gaps can have take that may of lot spending Customers we StudyKIK, they see had are of bundle a enrollment into solutions.

individuals allocated use to where projects. RxDataScience allocations, across Clinical had to have at look our teams. defragmented load We over us also us our resourcing may to look help we the We entire consolidate at help

or So level, which as them the benefit real our a country customers is a now is well. a a more it’s dedicated functional resources, at benefit to level whether

a center throughout stage the just at through our the brought really kickoff involved the project the have project. and but teams life we medical finally, stage, more bid then, much the of having And expert not our the both scientific business, of management, therapeutic by through in

Our those life of of to the that clients make trial. pivot make have the seen the consistency need to them they help throughout therapeutic insights the

through have good way really state year, all Dave the to upside, a So journey first where all experience steady believe all the really are we customers in this of -- the with our Syneos. to to of will the and from are I half to David they it’s that one wherever we going Reimagined effect by are, day where Clinical

David Windley

company and I it, last around the cadence comments is does every encouraging. or call months even call going of question, IR comfort and is some is That’s lawyers analysts level that responsive something very you guidance to where let just this to which create If appearance with will confidence start this with you and of process. one and kind start visibility that do? XXXX could three the I are ask dispense of, on investors, being to with Is can XXXX, a that kind helpful

Michelle Keefe

yes, goal and decision yes. David, shareholders that our one-on-ones so, have analysts, have are analysts made for ensure next investors doing and we it’s our direct from today some already to be we So, scheduled and I tomorrow, with will we we from feedback the our week. And and think, getting that

David Windley

that. Great. Thank you. to hear Good

Operator

Eric next coming you. our Baird. with Coldwell the of Thank from And question line

is open. line Your

Eric Coldwell

heard a But Thank sort you are I account resourcing have development, of the account terms you Thank David’s of net think get of about you in staffing of business very much. just turnover and are seen a teams, have maybe in business be where I development I add turnover little today skirted to want where and what kind to felt deeper question And some in you. then with management into functions? bit. development has I the versus business also turnover. there. management, and you It follow-ups. wanted his staff you -- like where everybody to you you on kind questions changes could about

Michelle Keefe

you Okay. the thank Eric, for question.

to is we customers. the business We business are more We we be development we regards looked So much competitive really who about the than what going relooked can thought when in sure make developers. that to with approach how are broadly our to in the in at marketplace. people traditionally just work

are to local ensure that what customer along the thing think And that’s is developers our have a seeing lot leads and in expertise scientific whether are looking them understanding making around and they of that sure and is deliver and meet it’s from with marrying cetera. business technology I data, of the we quality for innovative with at, et can looking we that fulsome consistently, for and it’s are our where a scientific a the their with whether impact having solutions journey experts we technical whether we they perspective, project

at So and model, important be account with, truly really they around to again, so felt much share this customers competitive, we that, management fulsomely right? very to operations. with dedicated was more it enhanced able team, Clinical these closely differentiated which that for we customers looked our with teams our operating we our how really account us And right? We have believe is largest management work along and

team market, the have relook was And we a so, it members. whole realigns at existing

So brought in and So we your I that have align we just the many need the with and our experiences, you some here team, have good where to I against been we that’s to new had for we that make while reiterate right? value talent right we think people business that talent doing really we same about wanted been development always also I both some objectives differentiated them greatly still have and are a feel -- them at. and the people of sure who what right are and

Eric Coldwell

potential positive that in you do on willing be see level Commercial you could can guess, the for point? of it’s basis, net book-to-bill a book-to-bill to book-to-bill some around you what obviously, quarters full year with a a like, do but time, share it’s look a year, I in take the I And outlook ramp mean, difficult a by possibility at us forecasts even in is on the -- full and this because this these I even year? it’s similarly, new around end not is that Clinical going I the then, should realm know going high with commentary as year or a year, to bounce lot. the the segments clearly, a But this whether specifics bottomline, of objectives two for for quarter for a And Commercial, and and what give the be At necessarily to for unless you looking it. am have are

I on, historical X.X guidance it’s the give some have take. You think, for or had around year, full

have anticipating I street what bookings the you this am update an if on in year? just about you thinking would are you how curious and the of So steer terms

Michelle Keefe

Sure. Eric, I color that. am some happy to on give you

So when you look at -- let’s start with Clinical.

think to start. I place that’s a good

be have said that. consistent have of gradual of recovery always shared sharing there’s in have We XXXX and course did we and to been over our a going the awards

of the lot awards guidance that believe guidance so year. the you the improve versus gradually that gave pharma do are the the that is we of geared contemplates We as more will believe course XXXX a of it towards we well. half over back in And contemplated and larger the

Commercial, to traditionally range book-to-bill regards to be In X.XX we in. set X.X that would the to like at have target is we

know, trailing XX-month are XXXX As with X.XX we you exiting book-to-bill. a

along funding due are some decision-making are making things decision SMID going what’s we sure macro large that that guidance environment the the take within in that having, align of with decisions and on the longer the in XXXX. reflect IRA, of with in to are pharma the we seeing making, some deliberate But that we SMDs just to -- the that issues might the of some deliberate more

what based is taking, environment. long-term, macro prudent on we Commercial But more year say, approach right would the but I just business, that this in book-to-bill for see the that the we on are going believe we a

Eric Coldwell

et was then a metrics there more detail lot around bookings for the and cetera. rates, me, RFPs And finally quarter, Clinical delays, last on

about a and bit this three on awards, loss issues? delays simply It point, share of you at total. like some you big you deals? feel talk lost deals of curious can preferred clients there’s have to but starting about more six loss if you that about talked have pharma, at timing negative pretty am Now in are with any quarters Clinical obvious tough talk couple looking here. of is quarters clearly, I a signs book-to-bill versus Can share we just

Michelle Keefe

that well. as question thanks Eric, for

hear So I didn’t sorry, new sorry. missed am I the feedback we can really that. I receiving the positive model you just you know customer we, I am clearly. that Eric, end, repeat is and

Eric Coldwell

bit quarters rough I call But Yeah. three quarters bottomline ago share always in is, quarter. Feels now Clinical seeing reluctant am awards, to bad are loss great. after you wasn’t like we I two a mean, one have look, loss. share

wins, we am We delays just shared stats these or saying, fact, can about metrics look, I yes, or have heard new hoping in but aren’t give some you have and it’s on I share that over quarters? you actually it hoping on views Thank few issues, than more have having that could last something you. some was that your timing actually tried customers the

Michelle Keefe

Okay.

large of SMIDs we the rate new have business know, you as shared some our shoots, with partnerships. is So around and repeat improving green pharma

We so, we right feel seeing like we are some rescues and also the direction. going are in

are But we have we and position improve to the RFP we our volume. we understand in know

We really win large have important those add our partnerships. we improve rates and to it’s that pharma

be that’s in As we really to for convert and or you contention this value looking are important more we and need opportunities. know, to year one are the have we high going that got and at we that two

stay competitive those the to marketplace. need know we to, the in So things are we

Operator

next our of next moment One Deutsche from Bank. you. line question coming with please Thank Bowers the question. And Justin our for

open. line Your is

Justin Bowers

I area vendors company Good and been with a more for the I you color for a they two. strategic could us consolidating Hi. six provide that be XX guys little that’s said, the into think partnership morning, on you everyone. Michelle, will priority know you years, several have won?

more, Just related for we ramp to now. I or And a the that verify about or that hybrid and then is this there to a we do -- you service want yeah, when for full pause to going how -- sense that. then just heavy little of, be will FSP have think should and

Michelle Keefe

Thanks the for question. Sure.

are the So, about yeah, excited six partnerships. we

So XX really vendors They efficient really think doing -- be FSP this in us. the to and regional and like, had vendors FSP and have some were well they solution. customer they deploying top globe, they they there could globe effective their how the we was across more about a for small across want

look could on And like to should and of vendors. model them from the and of could it as an that outsourcing like more work regional brought to partnering to one perspective, manufacturer to in their what the made we our so, like we decision consulting team look approach there what global us that shows take with approach a FSP two design and they with instead

strategy that The of so to customers perspective that able strategy able that. decisions being to right? a deliver bring some outsourcing consulting that’s can from are really about And excited in make something around our kind fact and that of I think we that’s about unique us, against and we help then to these their expertise execute and be

to We of it long-term customers don’t what -- believe it’s just a that are We impact think it’s But is kind having was driver. with -- it’s not all impact think establish our awards. important that more to about. we we I near-term going don’t growth of really

pharma want we it’s and I partnerships, know continue continue there’s want don’t that. to one And really that to right? opportunity else grow if, there? on anything large to to That’s you growth important our really, we organic focus our number Michael, add

Michael Brooks

early still days. It’s

any consolidation, increasing plans are the for we around discussions funding in customer increase are to with their going their they for funding. plans So the if

as share on will impact. to more details, and more our XXXX makes So as we us sense. them any just we for information too get it plan, have update It’s XXXX plan the early

Justin Bowers

Got Jason team. it. one for and And then the

the of you the understanding that or that what is anticipate there Is rate getting in implied it’s XXXX. that exit XXXX said then just costs think some this back expanding the to are $XXX $XX like, to an margins that have prepared net can the correctly like, of we result forecast? the will year at you restructuring given yield second I out an that restructuring would trending bookings like, And on are this you us I that into year? the underway savings in where million bookings, think, the you growth be million put that bridge of and and is that incurring you million initial in cost framework level, just to -- But that $XX XXXX. maybe would you high part point, net initiatives then, remarks the for this that help be, in how will it’s exciting

Jason Meggs

Justin. Yeah. Thanks,

noted the the are in are that are investments above question, on the that line the charges were below business we So savings not that into the net the are of restructuring first the line. programs, the that making

just piece. for sake that clarity’s So on

real there, around the include actions those And engagement we looking and well streamlining at related estate as strategy are our current the hybrid as efforts footprint initiatives employee the short-term and operations. that just

to implant well things talked and impact business the that data partner and Michael as we our we that organization, technology with how has have technology the have the about has on, need there longer the we that as Velocity what And streamline into around the as that forward. and all and term move we

bookings as XXXX setup, the back we and inherent half this think mentioned, little absolutely to our throughout in Eric’s have gradually the the back year and into and XXXX of about I our you improving that back getting a bit and think, Clinical XXXX. When north X goes question, guide, and of in I

and XXXX the when technology full the cetera. think won, about the in business data we of FSP or rate year given have you burn whether our mix studies it’s that throughout burning service And be will faster businesses, it’s there an et or increase within

the looking those on then X, Justin, of gets into annualized number. at bookings year that in XXXX -- we the the to line that when full the are as with as XXXX, you somewhat we exit back that do exit things in rate QX what a puts X.X to savings, we of half number gradual you you as exit are all we and built above So recovery see even

Justin Bowers

detail the there. Appreciate it. Got

Operator

Instructions] you. Thank [Operator

Jason Meggs

You are welcome.

Operator

line from [Operator Instructions] the with Sandy Draper of coming question next And Guggenheim. our

is open. Your line

Sandy Draper

A already much. been lot’s very Thanks covered.

just we at growth little the in are saw maybe on just but basis. this, So the Commercial a higher. basically you at but by a on the mid-single-digit that quarter XXXX be to and Commercial ask growth when X% look guidance I to question then higher, slowdown it basically know about giving the I and think in will is fourth look is I low backlog segment, grower in first flat of I again, year-over-year backlog, maybe reasonable side, if not not is ton specific the thinking it could off a coming

that be around digits, So because positive like it thoughts been double me Thanks. first and any that? have able you doesn’t the it numbers just would versus, you but based do would growing sounds to look question. to the So pretty been on that be

Michelle Keefe

does assumption the we In pressures for that macroeconomic demand XXXX that outlined. the recent to question. assume Thanks driven by is Sure. guidance, our Commercial XXXX flat the

contemplated in is the for that So guidance XXXX.

Sandy Draper

on have when given Okay. one and of patterns, I Great. the That’s quarter. follow-up the just a quarter which thinking the all but really appreciate. maybe helpful. just like not third or just quarter, am the quick -- it’s about And on trough Jason, in, quarter is you then like I more second lot my just first But is It certainly, information, inference sounds thinking the pacing, the thoughts you additional fourth know obviously, line sort is so just not it first of but in given full have year, and the I there would quarter, on Thanks. mean, have quarter, a you quarter up specific on the terms as quarter expenses, project offsets I sorry, any the may about trough you revenue guidance in of revenue, EBITDA? the

Jason Meggs

quarter QX that reimbursables A a bit so way, we that a little quarter going about we Sandy, the in positive talked one. QX but Yeah. little impact two, in primarily are in primarily. to bit had

thinking about revenue So in when about is with we thinking it are some I are the on think, given those you dynamics. you of of how side, line look revenue, how it sort at total

well. QX sort initiatives have of And investments, the the savings given are Clinical from year, stay pick of that the are, get then from onward model customers investments off Michael and earlier QX as the business around will then sort that has Clinical tail get through to them we on up as most that that start making onwards some make on in continue new will we and year talked half they the EBITDA into Reimagined some about first and particularly we that we consistent what of QX to side, and throughout but will

not low we year in And So from talking a is start XXXX. are see that in has full due quarter and cost to EBITDA that about investments EBITDA, then two for what little rate headwind ramp. in ramped of of savings year being exit and think line the onwards to bit with we this quarter about always four broadly it quarter the seasonally one, the extra

Sandy Draper

really That’s Great. Okay. Thanks. helpful.

Operator

question Blair. from of the next line Thank our William Max Smock And you. with coming

line Your open. is

Max Smock

Hi. my taking Thanks for question.

to from have am much Clinical discussed. forward? potential of follow backlog backlog cancellations particular much curious into you existing for and the moving Just XXXX you on how up is conversion in wanted some of I coming delays delays visibility do your how and guide

Michelle Keefe

can I I mean mean I will XXXX start rate. start. cancellation cancellation rate was our I lower XXXX cancellations. our with than

to So we give are to our where on backlog. with line But maybe, color want right in little we always Jason, do. a said the expect have you we cancels more

Jason Meggs

Yeah.

recovery? Max, the right think, asking of visibility XXXX, that were the is I you backlog into

Max Smock

Yeah. right. That’s

Jason Meggs

Yeah.

Max Smock

And coming revenue how much of from... is XXXX

Jason Meggs

Okay. Yeah.

think we and XX-month last if are or think, in something you look backlog we that as XX% the year cover, XXXX. I around than we higher at head next roughly I are and So into

good see you cover So there.

year pipeline Michael to and talked that’s the half have bookings in flow on we RFP the the that for fact and and of Michelle the about. change back have doesn’t execute That the the what

the So we Clinical see that’s what currently side. on

review that the includes how and single of our projects terms in we XX-month have every of given and based every accuracy in seen in we what we in that that consistency. feel run past terms period, do very of really on come project out as we a about the year backlog bottoms-up into And month detailed in the good a

Max Smock

Got it. you Thank for that.

for XX you billion translating launched. Syneos the potential $X on quick a launches One. if on to in I about than one more wanted earlier into, year asset follow-up said, comment value this me Just think, your I additional

bit for here? longer be we to Just That wondering taken as that for more term little if a coming you for the us about at Commercial revenue kind consider the a might growth billion. think $X risk adjusted have Thank ever number practical you. of stab

Michelle Keefe

Yeah.

for thanks and the the suggestion. So question

Clinical right? We them are are come going understand to going our at opportunity can assets an get through that become what are for visibility we term in currently us consistently which into looking the how are we So we that business, to actually Commercialize. percentage of sitting pipeline think longer better to

are a on be So saying, having going constantly assets Commercial, and large to how potentially will business. much there our is we still that of meet impact are leadership what feed Clinical will Solutions to into that Commercial side But under amount of so Commercial that quite really to feel at hear the an better opportunity we actually you good that’s visibility looking that. I the continue

couple shift to of a would I things. say

our in Commercial Syneos are different customer meet One in of So a starting One We freight us Commercialization. across that X are Syneos development, to are see we piece continuum area. product assets just business the award interest some therapeutic one in right? of getting Clinical that a We had in currently of Phase

one to starting When the asset. we where that -- it’s matter we to are that. line, we So see them no along not particular with work

Syneos they look how across and are with We think to about in starting portfolio their see model. them work the us One

that So benefit to that know that Syneos think are of we seeing and One. We we benefit. days early additive now get I contemplating were that going didn’t that’s something

Max Smock

it. Got helpful. Very Thank you.

Operator

next question with coming our And from you. JPMorgan. Casey line of Woodring Thank the

open. is now Your line

Casey Woodring

for you questions. taking Thank Hi. my

on to even XQ book-to-bill portion then quarter are in you related last XQ of push-outs So recouped X.X other the that be that and was XXXX. expecting to

of much those number recoup work was XQ pushed how how you and push-outs lost? X.XX then So the just then much that curious of do here out to how XQ ultimately and in in was much

Michelle Keefe

Of for QX, win definitely Thanks rates delays the stabilized. question, QX Casey. the in that designed were our

I more win been in about them went I regards still normal, we rate. and was and think the half think decision to have our to where have we opportunity it about there normally of

improved sequentially side are that decision to continuing to bit on were it’s right the to some going are push-outs but are definitely They outsized. they continue be are way in a making. they regards the making, QX. high to little now, think long-term the deliberate don’t not We that see in but We decision

phenomena that stabilizing. is think we So

Casey Woodring

just around Got it. on of questions And then share. the maybe up one following previous

had at that ICON a in in Just booking same Thermo group XQ. Commentary standpoint. from suggests a Clinical, also look when you across performing quarter PPD your high a IQVIA bookings record level, peer from with

in you curious and Clinical to that larger So presumably you confidence investments players? you as lost just you you win of think can are scale making have to customers to Thank you. of what that kind that the the sort allow back

Michelle Keefe

Thanks, Casey.

So you have Michael bit how the shoots key heard about when of doing speak areas. in some seeing today we that already -- different green things are and are a we little

really confident in our strategy. We are executing

structure We and development business operations realignment. and Clinical are our absolutely concentrating on cost

in are existing all customers, we Health. investment customers strengthening talent, retention really new our We also our with our being things a are retaining for offering we that with having making great compelling believe this experiences two-year a at those creating high. consideration And are also for Syneos and and creating

said, forward our year. rise we the year looking course that are as we for in the are as the And compete to so that doing, and continue Jason continue going will to just business, the we us Clinical to things over predicting that, book-to-bill are customers goes that give to the are on, based we believe to we believe of competitive, on opportunity

Operator

for you One Luke our question line And coming next the next with from our question. moment please Sergott Barclays. Thank

Your open. line is

Luke Sergott

for Hey, question. guys. Thanks the

from, pretty a kind it’s $XXX Just business are mean where think out and that thinking million XXXX one topline of that SG&A above easier for a about on development, going kind coming EBITDA the just that, healthy more too risk of please? that’s XXXX. give us come on to about I you to me sense the to growth. it And obviously, off wanted guide, that that, million, there’s that makes then you big way if And of, be good is a essentially a some get up into at single-digit step more to cutting much much well $XXX for that’s baked of one, framework will conservatism where hinder it the low to coming million and in that? how just really midpoint, hit $XXX

Jason Meggs

It’s Yeah. Hey, start. Jason. will Luke. I

that’s low include single that that growth million initiatives and that digit you better you well incremental in associated the that XXXX, from savings on savings the that and XXXX million, to at when as to in in and year-over-year the million step-up, single-digit of you XXXX. $XXX topline $XXX margin, you think growth XXXX how can margin the a the inherent start because are So to and $XX incremental over million is about on with you add right, are then up get $XX then

incremental that plus margin the growth and associated with So savings that.

magnitude of there of we how there. So that’s rough get sort of orders

through longer a are development, On And are making the development like, fact, bookings that’s that perhaps CFO right? matter we costs cuts, business any move the make business to at you side, you a are believe committed doesn’t we business what’s to BD lens, Michelle of that has of that’s we investing -- as minute, that not look any as that wait up, we if are in the down, said. invest it are and much sense. forward growth and around staying continue and very going Well, are though, drive to term the that,

we move pipeline we Project have always as that’s everything back of initiatives. we where new we the Velocity and initiative, then synergies model XXXX lot start our had work forward, that we and execute and our whether we now our from initiative a with these with ForwardBound can our it’s our For and our initial of our been we have demonstrated sort talked about XXXX guidance, operating success in with through the we start build, backlog and transaction that

execution We a all have error looked the that at typically we perhaps just that and same of risk and type of on macroeconomic it the some there exact bit out sort that’s in given way plus a more thing. margin put uncertainty would

good we are that up step do obviously, right, have and about XXXX feel better in given makes we ranges XXXX the that easier. that the you back guidance So for

Luke Sergott

Great. Thank you.

Operator

is One Sir, you. question. line the now Anderson next Thank with And moment for our coming from Elizabeth open. next your please of our Evercore. question line

Elizabeth Anderson

cleanup -- on answer hedge that much so would rate pricing year accounting both a the the in I the that slightly assumption then bit sort too, in point, trending put on so also be sort just was question. that, comment if unclear does of question, gets the Hi, helpful? guys. Clinical of interest more Thanks your for assume that for sort if and would if is how you that you could on I -- was full wondering on versus again, earlier little Commercial could of year? And secondarily

Michelle Keefe

Sure.

question. the regards thanks question. answer the In rate will interest I Jason to for -- Elizabeth, let So,

Jason Meggs

Yeah.

On the we interest side, current April move the that XX% assumes guidance to as variable rate X. of

assume So there SOFR. new on it it curve that’s out for we hedge, a doesn’t put and assumes currently the forward

Michelle Keefe

just of the beginning repeat And the Elizabeth, question? can you

Elizabeth Anderson

Yeah. Absolutely.

or you pricing little a that’s of Clinical and and how versus ago? quarter on kind more trending bit comment in both just of if could Commercial a sort two So

Michelle Keefe

Great. Yeah. you, Sure. Right. Thank Elizabeth.

we we price you the best heard So that Commercial. get you it’s Clinical going in delivery I that is for operating Clinical say think to the for or we both believe value have and we Commercial think price outcome, and us whether

I think pricing we anybody’s anything And I approach. that don’t seen different stands today, true think around have

decisions the interest these that making they best asset think are in of are I value. customers all maximizing their believe

really So we a haven’t seen change in that.

Elizabeth Anderson

That’s helpful. Great. really you. Thank

Operator

not like Keefe closing back showing Thank you. to remarks. Michelle I over now call further to any I any am the turn would questions. for

Michelle Keefe

Board has and our -- call, for Before service since by has Board to been Directors. of Harty well to XXXX since March her thank our I a on wanted our Board on Linda moment conclude the her Linda her I been of served and Health contributions. take Syneos advice

you today and interest our confident to Syneos Despite for and in by their patients. we us and for am in near-term on positioning to transformation. I Health to Thank customers, joining entire the inspired our our call challenges, forward commitment your investment and our I updating also and sites thank company. our strategy, we the you remain team. want on look our continued market motivated and

Operator

that Ladies Thank you conclude does for and for participation. gentlemen, our your conference today.

You may disconnect. now

Syneos Health (SYNH) 16 Feb 232022 Q4 Earnings call transcript