MEDP - Earnings call transcript Q1 2021

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Operator

Good day, ladies and gentlemen, and welcome to the Medpace First Quarter 2021 Earnings Conference Call [Operator Instructions].

As a reminder, this call may be recorded. I would now like to introduce your host for today's conference call, Kevin Brady, Medpace's Executive Director of Finance.

You may begin.

Kevin Brady

Good morning, and thank for joining Medpace's first quarter 2021 earnings conference call. today CFO President Operations, and call Troendle; CEO, Jesse the our and COO on is and our August Geiger. Also of Laboratory

current as that uncertainties, Securities to inherent to and after no begin, our in important any remarks views COVID-XX could statements our of including teleconference as from to statements other even statements obligation note within with change. we ongoing discussed on I involve of like and assumptions as Act statements forward-looking representing remind Before XX-K our unknown cause impact the Please of other meaning filings Private These update would may you on include forward-looking expectations. known of and today. Reform that rely risks questions your factors, estimates results you should responses These well the not during Form the Litigation date of and if this are assume with our Accordingly, as factors forward-looking to actual our we business, today's SEC. the materially that any XXXX. differ

Web to discuss With would Investor to Relations the results. to slides the to in available reconciliation These our measures believe release During call will non-GAAP of a earnings like measures. referring guidance. results most not to A call. non-GAAP connection our help also investors our is Geiger comparable non-GAAP and the provided presentation with call in measures measures and today's site now are these that, comparable directly complete available for slides The or Jesse superior of measures of more to turn press investor.medpace.com. this financial the in financial over replacement I at understanding section GAAP earnings measures are we GAAP certain be we call, but financial a gain such

Jesse Geiger

compared $XX.X EBITDA EBITDA increased per net net in of The XX.X% XX.X% million backlog in of $XX.X prior March awards $XXX a lower compared pocket year. basis, income a was prior million, $X.XX the first as to from represents first period. attributable book for rate. compared to bill. prior reported million the to organic increased from margin XX.X% everyone. XXst Revenue the year was period. XXXX, as EBITDA quarter the and to quarter the to basis XX.X% the revenue. Net the in good on prior primarily the percentage increase quarter of on XXXX. increase X.XX a currency quarter constant well entering Thank first of which billion, first a income new margin and out the In by currency morning, as year-over-year in XXXX, XX.X% basis. you, increased backlog tax the XX.X% $X.XX $XX income was $XX.X On effective prior in growth of in higher a an of of XX.X% first was to compared Ending expenses Kevin, XX.X% Net $XXX.X share million business as primarily $X.X to year a in Net quarter quarter of period. constant higher million the lower diluted net first year. reimbursed driven compared was income million to was resulting EBITDA of prior year for of quarter year was the

activities $XX.X of net ended fourth flow line compared customers the XX% the our no and cash, XX.X debt We top five and credit. to outstanding on days the top of from cash million undrawn million quarter, capacity $XXX.X days. day and revolving first our of our negative million In XX% XX concentration, operating customer represent quarter first respectively of XX.X generated our decreased Regarding roughly revenue. we negative $XX sales and with from quarter to first outstanding quarter in

to Moving now guidance XXXX. our for

in $X.XX investigator XXXX, total representing reimbursed now billion slower costs total our the of of range related revenue full to are a revenue of XX.X% associated over billion of year revenue $XXX.X and site the to million. the for $X.XX growth XX.X% view to forecasting current This return of reflects out We payments. XXXX pocket of slightly

and $XXX of growth EBITDA XXXX Our to X.X% is guidance of strong representing XX.X% our first to reflects to our updated anticipate $XXX.X the rate expected XX% EBITDA the quarter of tax million, XX%. range of in effective robust million in compared EBITDA headcount the related to million XXXX. in $XXX continued This increased to range expectations to in cost anticipated hiring XXXX growth. We be

to share million to $X.XX, net diluted shares have increased earnings We $XXX. the with diluted guidance. the range our $XXX.X that, to earnings forecast and share so assumed We are income $XX.X can Operator? we operator rate. lower turn XXXX in in by your per tax income back and $X.XX there repurchases in million no of I fully and questions. over expectations the take for per range anticipated With the will million driven for diluted the of net share the X XXXX call

Operator

line first of Truist Securities. Sandy Instructions] [Operator the question Draper comes Your from with

Sandy Draper

sounds I top due revenue, solely think, through confirm. Jesse, for that looking the lower to right, service guidance lower expectation revenue. like at pretty question, of of I end heard It much not you're to pass off you Is trimming is a just the correct? First

Jesse Geiger

the influenced slightly the particular site particularly cost, through in slower just it's pass We're by payment That's activity… burn largest the Sandy. return of a driver, and rate seeing

Sandy Draper

ahead -- go So that August… is somewhat

August Troendle

a bit a to disproportionately that want slows to understand, it you throughs bit, in overall our overall activity obviously, but reflects also an is that expected pass little just but does I slowdown service sites it slows things at extent. revenue

Sandy Draper

to proposals, and back RFPs that pandemic? running, up coming or is backend slowdown obviously broad term a demand, But just it's of dynamic you're a sites or seeing and indicative sort it's of of we're still more that the not in getting related still as a near

August Troendle

Correct.

Jesse Geiger

seeing still still business funding seeing biotech, still good those we're in fundamentals a RFP flow, are dynamics environment, good intact. good We’re

Sandy Draper

And like it then follow-up, your just the same Is happening or that? thoughts try ask the strategy? approach? the this I terms lot. aggressive you success still know did got Have is looks just same hiring Obviously, plan. of about to accelerate unrelated to people. you on market But go it pretty said strategy good to changed for you still much hiring, hiring. anything But but the my in an Is I a it you follow-up a job

August Troendle

think hiring, we throughout will any think. in change I got be we’ve real don’t hiring we the year,

Operator

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

John Kreger

that. on to Just follow up

your guidance year, hiring sort think or revenue what you of for staff increase would end? If full year the you by about expect

August Troendle

to project out. hiring relatively But we're try to I hire be first a continue to think going continue don't We through again, to rapidly rate pretty the but year. we'll quarter’s match But to that think really higher I don't it'll strongly.

John Kreger

catching maybe So up revenue quite there? getting not of sort growth but to

August Troendle

It's possible.

John Kreger

rest trend conversion just more a there's I move down your up would back through variability but about to question. as the the bit? what the to the that just we of backlog comments little in revenue you Can follow Sandy's August, it know up quarter general a bit you in metric, first And year? talk to on to to little then, caused come expect And

August Troendle

just than hasn't cetera. of has fundamentally, little run think that from to We studies there. quarter there hoping of sites lot activity Yes, But little lift were was the hoped thing were that down, been at and to things this moved that still first et going know year a to is don't the COVID a of dynamic, delay predict. the more to for headwind it sites, actually anticipated, think at and volatility change we were to much this but it's we reasons. I a drug held really you're I point. think hard greater but to COVID. related in months. quickly. of things It the have over And been kind going several biggest go is availability up is reasons going right, later And had there's little have bit at for going last other We're things you couple in But I bit a a bit be

John Kreger

And seeing maybe you follow-up sort Is more comment one disparity a in are the that. just accessibility of on Europe that Asia? one, or versus site a US versus and global

August Troendle

statement But this did we region. bit is by a broad slowing more they it Certainly, that we've little pretty generally seen with. than differ

Operator

next Jefferies. line comes Dave of Your from question with Windley the

Dave Windley

margin try clarify a I bit to wanted just first. on to the little

big the a a margin just driving margin on positive which through magnitude mix pass balance understanding for the at So understand toward mean revenue, it's revenue. have about predominantly on hiring. but parts your down I slight the I understand your But moving not impact comments there? Can bit least of is the would impact, more impact little you help a on the change, of to year

August Troendle

didn't a but we're quarter, in hired first hiring hire. continuing and We're that lot hit late were first of and they to quarter

of the kind go you year. address? I so And through in Jesse, want as to layers it But think you

Jesse Geiger

really strong We right driver QX. is hiring on, a the hiring. it's in you're elevated had margin Yes, on the

through sequentially driving are But ratably continuing hiring mentioned, on it quarter. literally we related August move and personnel of strong that As aggressive we market as these next in its the make the couple margin happened we or demand as investments. didn't based quarters the necessarily across then the costs

Dave Windley

quarter backlog. out to like burn accelerating that relative or year was revenue rapid Can ticks revenue. seem for really thinking that but balance to basically your the to And not the say doesn't the does question least ever rate aggressively you're expecting, but the me John at at But it change. it might return least in sounds conversion on rate Sandy's you pretty you're and been answer at suggest of understand August, maybe let's maybe, say midpoint guidance to down or your burn a it of have first slightly the so -- service higher help hiring,

to so expect which the to just revenue need And at hiring understand trying come you the again, versus pace out.

August Troendle

get And towards very substantial revenue is it’s we'll growing, that XX% hired the backlog in a back. growth. will surge term strong will unwind come is needs. environment the year-over-year where rate conversion We and business for longer things And

So we of hire do curve. ahead the

our eventually we we've running good convert utilization rate. is think it do of at We're will think to But a mid got lot while staff. XXs, in in the and and environment need us. given going place fact, that backlog we it, normalized a rates for will to more kind up the pent which of a for a low I continue the

in it not at to out But well not front the next have so this we So to get look of, activity like well, quarter, of terms we're in that. we let's hire. going

margin. of ways I think quite to have and able defend not particular the we we're a being a trying to luxury out look

Dave Windley

And last question. then maybe

inflection year trying Your pas ask steeper to very are immediate outer more that ticks quarters that XQ a the you're up backlog few Certainly, of coverage that of revenues metric as was the timeframe? sense impact the a that Or describing in as quarter, the and we what fourth maybe were of is improved get you where is, impact cadence. fairly Just above an looking of of we way of Should another payments, seeing maybe after first question because coverage cadence gradual, for interpret the by points. ratio of to or quarter Thanks. kind result then kind of is a the percentage it a that? impacted through nicely. through of

Jesse Geiger

still we through expect we of back slightly be to half Dave, year. from think half standpoint, about movement do a the of kind second as end the revenue first weighted cadence versus it

Operator

Credit of with line question Suisse. next the from Your comes Erin Wright

Erin Wright

or already unique you is a several But right sharing anything response benefit promotion you're CRO or you from the potentially front. of obviously are see to I'm your in and win customers dynamics, terms lot pending transactions. seeing been have There focus. the I strategic you're your reviews on curious in that that from seeing? now, disruption number customer anything don't of resumes space assume rates of some competitive any seeing or if

August Troendle

think anything. I don't we've seen

can't came hire say from And activity deals. that but that The -- we We because any on that. strong and recruitment. there from our our disruptions have And in the whether not individuals of concerns some we first of being anything any of in anyway. of any brought is and we like relation got work pretty for companies, did have the it kind or geared or of is competing I us recruitment, way to up quarter kind strongly environment heard pending the terms of was

Erin Wright

a first out And speak the the there's new like call customer mix outside then therapeutic front. to could quarter mix? curious contracts disproportionately wins? wins to on of or bit larger influencing anything at you there looking the Was business nature that anything little business the that I'm new in the if that were was

August Troendle

anything area, don't oncology size terms No, terms awards. think therapeutic unusual I in led of there's kind of of our or in

So kind I don't of really to it. see any nature unusual

Operator

Donald [Operator KeyBanc. with Hooker Instructions] Your from next question comes

Donald Hooker

from would particularly Maybe What recommend on year the sure for looks you some a parts a normalized favorable. this, It pretty but you kind not tax benefiting if beyond the of expect moving more granular I'm rate year like current this some we questions. rate. through missed low the basis? more there? I you're Can looks walk tax of

Jesse Geiger

is rate that options QX for IPO latter deduction last the influenced deduction vested employee issued exercises. of at highly quarter largely time and discrete stock that our in take the exercise year. we the are in of The part These the by these are the of option the items

we that our any Longer right the to to based I do does of XX% being laws some anticipate in down longer to analysis XX% range. considered. that term, continue, rate changes say, term XX% from current lowered tax on that’s of now that impact tax guidance we've the to law so around our And why would assumption are current XX%, XX% any rate early proposed is of not and that's tax

Donald Hooker

me. last, And from one another maybe

probably clinical terms concepts. those broader the is this love topical telehealth decentralized could In question quarter. a of area use clinical another every -- you obviously, kind and very asking of is Would we trials, trials, of your perspective, virtual be maybe

and use there terms acceptance your seeing In respect of terms you're of the some with any to in these business technologies changes of and of virtual industry?

Jesse Geiger

we've nothing changing changed that Don, Yes, we're seeing that from quarter. of last or really kind

decentralized we're think hybrid a environment. I operating in well

of making We enhancements and sort data the one capture, of need. to continue remote of that's data have different technologies, investments, think kind versus major review, We're are our any platforms investment. the ongoing costs, that factored of for some but themes is the kind we nothing those into in we But investing tools technology we’re that’s active all remote things hybrid of wearable operating we're in some environment see there like for always is going had what sort style be been that I to it pre pandemic. where

Operator

[Operator questions like Instructions] Kevin now turn I the to no back further at I Brady. would time. am conference this showing to

Kevin Brady

continued joining your and for you with our a on look today's good and on interest speaking call. us Medpace. day. again XXXX in Thanks, for second you Thank call forward earnings quarter to We have

Operator

conclude this have gentlemen, and conference. and Ladies day. wonderful for you today's your a Thank participation,

disconnect. may all You

Medpace (MEDP) 27 Apr 212021 Q1 Earnings call transcript