MEDP - Earnings call transcript Q3 2021

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Operator

Good day, ladies and gentlemen, and welcome to the Medpace Third 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, Lauren Morris, Medpace's Director of Investor Relations.

You may begin.

Lauren Morris

Good morning, and thank you for joining Medpace's Third Quarter 2021 Earnings Conference Call. today and CEO, our call President, Troendle; the Geiger; Jesse CFO, on is August our our Also Kevin Brady.

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

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

August Troendle

from the billion to future a diversified of quarter XX% up end three comments. from book and of Thank COVID would three last and XXXX. end work. of our backlog $X.XX I programs At you, small only quarter component quarter was This three, year few well the contains just Lauren. a XX% make end is up like of the of of of

is All organic. change this of

several have in the clinical with global a CRO footprint competitive Over on we our overall improved years, and technology, the focus last biotechnology firms. position industry

Jesse above organic Our our superior been peers. growth next our revenue less firms as trial the over now on you. years, organic Thank a growth historically results that clinical COVID And review backlog biotechnology driver of characteristics evident. will as well has then more few remarks and our make from performance, of detail the becomes business of some Kevin will will in guidance. and become our the all quarter's more as our

Jesse Geiger

remains and environment Thank good the In the solid. morning, you, August, and business third funding quarter, everyone.

competitive and We in third strong. see continued improved our remains good quarter to translated strong results flow This win rate guidance the RFP XXXX. into for and a

guidance initial XXXX We and performance expectations our to take also into will approximately XXXX. that, was X.X% a balance of our to third XXXX. XX% in as $XXX $XXX.X guidance year-over-year the will in a for from of awards robust year-to-date business quarter moment, Kevin over revenue in million, detail. represented Overall, quarter Revenue third And backlog the increased an less our was the Net related business Kevin I the prior months. COVID-XX will was of million, Kevin? September third the backlog that of $X.X in net billion, of for of our net 'XX increase with new continue the entering X% billion XXth XX.X% $X.XXX than expect financial conversion which quarter you And increase X.XX convert project only of turn prior revenue year backlog we of call represented XX.X%. Ending of book-to-bill. for the growth the through more in XX to new from awards. to resulting the in year. work to Backlog and backlog review XX% beginning next and

Kevin Brady

Thank everyone in. and Jesse, you, good to morning listening

a reflecting prior year, Jesse third reimbursed of as organic $XXX.X on million XX.X% million Net period. On quarter $XX.X tax revenue EBITDA EBITDA $X.XX basis. increased $XX.X for a on in compared $XX.X and reported $XX.X year. EBITDA the million the million quarter the the growth third was of year income rate. $X.XX driven period. third basis Net share EBITDA compared As third the In higher and quarter of for constant XX.X% a diluted expenses. per net the in mentioned, lower from margin period. quarter EBITDA income was XX.X% to out-of-pocket which to XXXX, compared in the employee by higher was compared year-over-year was to was growth income compared currency to in basis, of XX.X% increased prior related year costs as the increased in year declined quarter net of constant XXXX. million XX.X% effective represented quarter well prior prior third of income currency prior XXXX, XX.X% primarily a margin to the the

cash our and represent top sales Regarding days. customer in negative XX%, outstanding five concentration, our customers XX.X operating days we In was million quarter, activities XX $XX.X respectively, of roughly top XXXX revenue. and flow third year-to-date from XX% net generated and our the

$X.X a During the approximately at of of shares we an for quarter, repurchased XX,XXX average price million. $XXX.XX total

remaining million cash, repurchase line million on revolving of debt outstanding We of undrawn capacity the million credit. our our no $XXX ended with and have third We quarter $XX authorization. of current share $XXX.X under

now for our Moving guidance updated to XXXX.

total We of to XX.X% are year $X.XXX full the now growth in XXXX billion of for to range XXXX, revenue million. representing $XXX.X forecasting $X.XXX total of billion XX.X% the over revenue

repurchases million of million to XXXX. share in there in our in $XXX in by no range to $X.XX our expectations in million share million anticipate tax are be in of income We range increased net the anticipated to of diluted to and X.X% of rate $X.XX $XXX earnings the $XXX XXXX and to representing XXXX with net range to compared XX% additional the the per income XX.X%, Our of We guidance. XXXX diluted million, to lower $XXX.X EBITDA driven for EBITDA and the earnings of effective rate. $XXX tax forecast share, the growth guidance XX.X% per is range

XXXX EBITDA. we and mentioned, Jesse are providing for As guidance initial revenue

the to of range EBITDA plan full year the million expect $XXX billion For $X.XX $X.X detailed to million. $XXX We February. and revenue year so in to the take in quarter With provide range full I the earnings the back our guidance will to additional fourth questions. your on billion over can XXXX XXXX, to call call of that, we we be operator in turn

Operator

Our from the John Kreger of from Blair. Instructions] question comes line [Operator William first

John Kreger

A the guidance. 'XX question about

levels implied part have I feel rate in you about in or activity certainly in a higher line like more and the guided you the a what broader higher market? the is just that what is past. more think the top Can win which your that? guys driving growth than on robust XX% range, Does impressive talk is bit

Kevin Brady

of existing environment, in those things. on flow, good those that, combination really all growth a along RFP business current really expectations. of to And our The really we'll top XXXX. hire position, well position backlog It's continue for us

John Kreger

might And just other you the then to to you high and ability investment hiring a the execute deliver growth? need talk infrastructure are Can terms in sort follow-up. any growth? about of how you How of that on utilization doing staff

Jesse Geiger

our been the to slightly we're have the employees. aggressively good positioned quarter to projects. and hire softer in We as positioned and hiring think and year-end. we're candidate doing intend Yes, against I approach in into current see had We in to do pipeline. growth in for quarter, pretty we But reflected -- we're historically, that now well fourth continue We've have We're the well. positioned a hire that we're that of no, work, we and for fourth both well anticipate. continue to seen retention the well good recruiting although support flow pretty success do guidance, we here upcoming

John Kreger

one. And one last

all -- kind development are that of your we are any thoughts You've drug in from have to likely XX changes been on the structural months. for latest COVID What with last this? with living as emerge

Jesse Geiger

obvious think is I A is of stay. to were and the made think accelerations lot a in one. I technology mean, lot that pandemic I adaptations throughout the here of technology

into there. is future, the clinical important an we technology continue going to role believe think I about as now trials So play and decentralized to

in positioned well we're think I to this environment. operate

changes that on to and changing We of make of made technology environment, as the lot into during far ongoing the the some stick support think a in future. around it to how but continue the as those going investments be technology-driven to is pandemic were I

Operator

from comes Your next from KeyBanc. Hooker question of the line Donald

Donald Hooker

results. great the on Congrats

-- might the you was So with overlap I this guidance, your you know did to you now what point, guidance more as wondering at XXXX to caused things just do I'm COVID. this providing are -- a terms I providing But just of on is maybe last is of in guess sort versus something just can stable it I'm but you last can -- you're which really head get that? elaborate bold. trying to in thinking bit XXXX year it your question. of

Jesse Geiger

least rest based that the to is, February that behind reason going now are that make final the as make have the our of rationale beyond that one February at of business we the we had QX Yes, earlier and be do models wanted guidance to environment this and everyone's what pretty the the Don, fine providing based aligned had good as And end I out on year. year. sure cited is we everyone sure we the in of we going able a enhance we're into into And is end results our to guidance baseline and feel we backlog, in in the tune report visibility the think Kevin to time. opposed February, like at want on to fill on that guidance for well

August Troendle

next ago, of didn't years between there a and we looking just disconnect kind at And our anticipated a analyst I models. year's bit And think models we because thinking. weren't of was

a course, we've a last We years, and conservative but believe, a a projections over growing COVID bit disconnect. growth clarity we think very with that and we now of if And give could there's we rapid a -- we that disconnect. decided thought few out of with guidance put also, are prevent to So reasonably the environment. have help

Donald Hooker

terms in thing the revenues. always thinking pass-through we look as hard guidance what your guidance us other give revenues to and XXXX as of the you outside at and versus we with in year, XXXX? on think this next expenses some respect year to maybe directional guess about there I and terms the And you're that's in of XXXX pass-through model Can

Kevin Brady

historical say low expect closer to as increased get towards to from think the that year-to-date you kind I more see that a head it we is continue influenced kind XXXX heavily I the probably from of basis points at of base XXX about kind into XXXX want in by progression average. to progression COVID, look we XXXX, as you and can I would to our XXXX we'll think average historical of

Donald Hooker

term, on one guys clinical And look them, decentralized your pricing of having XXXX call but whatever -- in guidance. like would trials, about upside and can't it's we context impact does clinical any your do virtual and to then margins? one obviously, doesn't think for about to I longer last want me. margins? talked How just maybe you it negative I be trials effect, you DCTs the that that think But might pressure it economics? think as might we pricing

Jesse Geiger

think it I don't impact. an big of has that

Operator

question next comes from Our line the Dave of Instructions] [Operator Jefferies. Windley from

Dave Windley

been if already last kind technical robust what your fourth guess, would guess wondering factors. in funnel. last a I'm how of the it to I'm sure funding that, a systems what commented your perhaps the backing as kind XX has has enough so does business you've slowed event on, then putting I I wanted five for RFP touched close projects of about tabs few funding had their this pursuing strategically, in morning, some three You been but those I I more good strong on as low are the folks as apologize strong enter to have months. development to your you you pandemic than through sheets. high last that revenue have the at stay more as I pretty focus months. on in very XX things the the flows in has are that difficulties you biotech clients indicators, It And the asking balance so not that if funding quarter? to and And leading clients keep longer place I'm certainly characterize level, months,

Jesse Geiger

has RFP the be continued Dave, environment to good.

studies has rate very are do been lot upfront biotech And to on we funding keep end strong access through quarters. access, over with We're as the analysis clients a money BD to access to as to on we see engage as to good in in as front win money. our far from as development we're takes financial or standpoint, the get that status they're where the Our process. key clients. indicators seeing companies funding they get past on of we're slowdown their progressing several funding good tabs not continuing put you awarded We questions ask signals of a the System group, as opportunity. starting their long companies the And to how then with place when us. prospective and mentioned we continue assess to they're with of process of and bidding it

Dave Windley

do of would little to maybe bit mentioned think continue toward contribute level. you more guidance. you on would more granular to a Don's then that to Kevin, normal I questions rate. pass to some recover throughs And burn that a expect

here also impacted that burn opened in 'XX? of have normal really is that what been probably your sites the has punchline normal rate work running COVID historically being burn Medpace say, your had to Is think I is below fully not but you benefit has expect for anyway, not still you. rate been would by, influencing recover to something

Kevin Brady

it had at row a mean, a we've you depends. in been in where We've and five X.XX got where we're think of think together. I conversion really book-to-bill Dave, book-to-bill kind to kind I of not position X.XX, quarters numbers. about

degree to And a our conversion so rate. that's influencing

conversion historical like. growth rate I look XXXX. Now future of how say think that we expect I to kind it quickly back bouncing necessarily it come levels, awards in what to more comes depends on wouldn't back and that

Dave Windley

suggests forward. question, high maybe I current So simple going expecting you I guess, I that conversely, the are book-to-bills mean, level continued is that sustainable? guess,

Jesse Geiger

capital. could this had a of as we're seeing level It as the book-to-bills good on and little if outside environment environment previous business and If mentioned new than biotech it business mentioned, the been but this but Dave, I level, depends to in access biotech, depends see at environment, a continues, you certainly, we've quarters good really softer, had of funding win continues, kind on still it we this albeit development rate, markets. a continuing

August Troendle

could that's strong so it couple next but But never near are but a we You really looks term. bookings. expect the future can don't in softening look, soften change next currently, far to about as look in the too can the like at environment as next it quarter, the we of far quarters out Things be can year going bookings.

Operator

I have Lauren would the We any conference Morris to hand like questions. further to remarks. now closing no for back

Lauren Morris

your on to Thank again call. and call you our fourth for We us on look interest in speaking with forward joining today's you quarter Medpace. XXXX earnings for

Operator

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

may You now disconnect.

Medpace (MEDP) 26 Oct 212021 Q3 Earnings call transcript