MEDP - Earnings call 3 2023 | Medpace Holdings, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to the Medpace Third Quarter 2023 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

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

remind Before I Reform responses your of statements that during we questions Act and the forward-looking our as teleconference include unknown the would to involve current to with cause may factors begin, this within remarks risks you like Private other and that uncertainties meaning Litigation statements inherent our of These to known XXXX. results well and as important from differ Securities could actual assumptions materially expectations.

update discussed date you forward-looking with our note as statements assume on Please not forward-looking factors XX-K and views of if any to after rely today's we in estimates today. change. statements the are should any even Accordingly, SEC. as other filings of that our These obligation representing Form no

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

Jesse now turn Geiger. over would call to to like I that, With the

Jesse Geiger

to represented new year-over-year was book-to-bill. million, the entering resulting a quarter net in in business $XXX.X the XX.X% prior increase everyone. in of Thank million, you, Good morning, Net year third the quarter from Lauren. of increased third $XXX.X backlog X.XXx awards XX.X%. XXXX a which Revenue

$X.XX billion in backlog XXXX, in of XX prior of to convert We of as quarter approximately revenue September XX, And third from was the backlog billion, the was conversion year. our of project the increase $X.X XX.X% XX.X% will that backlog backlog. approximately next Ending an beginning months.

that, as balance Now to financial well guidance expectations over will Kevin for our as performance turn to XXXX our guidance more for in call and our detail the with review of XXXX. initial I the

Kevin Brady

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

revenue This constant As increase a represented XXXX. million of basis Jesse third on reported of mentioned, a was the a basis. quarter year-over-year $XXX.X XX.X% XX.X% and in on currency

a reported months the third $X.XX XX.X% and Year-to-date XX% XXXX, million to million prior in comparable from ended on basis X% EBITDA Revenue compared EBITDA from of increased period. quarter the prior of and comparable basis XX, for constant was and increased on $XX.X the $XXX.X the was $XX.X year billion million XX.X% September period. currency a X XXXX. increased year

the strong third was the period Year-to-date and costs, margin XX.X% the EBITDA XXXX for XX.X% compared U.S. year to impacted was reimbursable prior prior benefit quarter margin XX.X% behind compared EBITDA in personnel XX.X%. exchange to margin the in the compared higher foreign costs EBITDA year by was dollar. period. to

driven In XXXX, for growth income net period. compared $X.XX interest prior X.X% diluted expense. of share $XX.X period income third Net the of was year quarter to effective $X.XX of the in growth the year income period. to per as income ahead as increased of EBITDA in XX.X% tax million well year Net the the rate XX.X% quarter net prior was compared million of lower prior a in compared $XX primarily lower to by

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

debt, outstanding our off of paid million we September have and cash quarter, $XX.X XX, we the as XXXX. in During

range over for billion to our of now now Full total total XXXX year growth $X.XX the expected of in XXXX revenue is Moving XX.X% XXXX. revenue to updated XX.X% $X.XX billion. $X.XX of to guidance billion, representing

is million growth to $XXX expected EBITDA XXXX. now to million, and the in range XX.X% of XX.X% XXXX $XXX.X of EBITDA Our of representing million to in compared $XXX

Guidance of XX.XX%, of on average million shares is full XX.X a We outstanding XXXX of million XXXX and effective foreign million. diluted based XXXX. $XXX $XXX to net the guidance in as assumes This XXXX. tax XX.XX% rate forecast rates to exchange September XX, year for weighted income range

expected Earnings now $X.XX. There to are per be guidance. no our range in share the $X.XX diluted share in is to of additional repurchases

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

full the $X.X range billion, the in and to range billion of in $XXX we to XXXX, of be to For $XXX $X.XX year million. EBITDA million expect the revenue

plan XXXX growth year service addition In in direct costs our and fourth February. to detailed elevated, additional to remain guidance quarter what in continued activity we the revenue site guidance We anticipates earnings in have activities, full seen provide recently to investigator call on XXXX. similar

With that, questions. can back to I your so the we operator call will turn over take the

Operator

of Our Instructions] Instructions] will Blair. question come [Operator first William from Max Smock [Operator

William able of to hear me? Smock are Blair, you Mr.

August Troendle

Operator, Max we the to get next can move back in on queue. the and

Operator

David from [Operator Instructions] question Our of next will Jefferies. Windley come

David Windley

so base that of The little of maybe restructuring sort high. part of and things that environment. I to biotech I your customer everybody, in attenuated your wondered a kind pretty if of you bit think, rate the the ever -- slightly aware has exposure is is XXXX, that could on comment announcements

if seeing seeing a success? from you at wondered I of Are rates qualitatively. to attribute beginning on booking comment your So funnel. the win would improve? you are you what standpoint, Like activity your that maybe metric quantitatively, the could you And more then

August Troendle

and challenges. it's distress a of in Yes, Dave. of we've still of period comment a clients. variable. Sure, challenges to bankruptcies Sure. of by hard of environment number is And and been seeing the through mean, lot I quite we're bit kind funding on pretty a a clients because

of I strong most those we're think a think, have a that's backlog are to going side, I environment. quite the on And them problem, business have. actually that derisked of seeing bit our other very

see is disparity amazing. the to surprisingly Just

strong very have We RFP a flow.

I RFPs RFPs pending And talked awarded we've second the ever were awards, QX think highest a -- record as total about, our new to that were initial pipeline, we've we've had. in is the fill awards, had. the ever highest the

great seeing horrible we're business business and a So environment environment.

of So don't kind It's I just know. schizophrenic.

David Windley

Yes. Interesting.

share, could years you're the enough the So there that mean, ago, able the strategy did find cultivate absence it more would taking opportunity? I to offset that more investment been to know that but you clients must able that sales try I -- financial you be suggest or ones hit you're further positive sales to force color of has by of concerns. provide that being are around Any investment recently. to in you

August Troendle

say wouldn't in of I No, expanding terms the investment group. and the size of breadth

good we're shape think there. pretty in I

better on time we to to shifting has challenges this the clients' the a I I able bit scaled. think address were funding of there And we're because much focus part. capabilities think been quite

a have really moved somewhat different that subset small it. despite been the found we side But environment. funded and opportunities kind So of of lots of that's just has on biotech It's pivot that programs.

David Windley

degree you -- of I it work you understand -- the more Or naturally pass-through are are area is pass-through that those continue? where significantly work the greater you're just with elevated to just do for environment elevated your a more? Is more? to Is for activities I'm inflationary the it. client has doing you talk why a the costing little an a to bit? where Can pass-throughs changed? to pass-through it I'm that at persisted being and expected. composition Last expectations trying guess more question me. associated that Okay. than growth have it site the wondering, just to therapeutic maybe The that level Has thing asked

August Troendle

bit the think I combination and competition some all of areas of of been kind There's of inflationary of particularly therapeutic rest of part is above. in and all it. a changes, it's the that quite

fees budgets our percent And as of and percent up have a think investigator so higher gone than costs. I

maybe therapeutic study, there's cost populations the are the Phase But investigator pass-through, driving and more the factors up prefunded the it's the been combination of factor mix patient a area, of expensive large the that IIIs costs. I and And of patient all a have inflationary particularly obviously and of really type studies think too.

percent think the fees that the total kind for I over quite a may, of proportion think of time, lessen of investigator little, a but a remain may I elevated while. as projects

Operator

Our next of from come Sourbeer will question UBS. John

John Sourbeer

are driven in couple and currently? with you metabolism the some beat guess those I beat are like midsized also of there and Or just disclosures, by guess, large I it biotech very studies? of bit a the the larger strong. mostly little up And quarter coupled Is strength a following seeing seems broad-based on pass-throughs. just here the

August Troendle

go have ahead. broad-based. Jesses, pretty -- It's don't We yes.

Jesse Geiger

I'd been running in say past but continuing the has not quarter. it's any pretty contribution study it's contribute, it's as metabolic good from quarters, hot plenty just other to couple and Yes, broad, of areas therapeutic well of in concentrated and one

John Sourbeer

half I but you or see was of going or where And can any second into -- again. guess, basis? color XQ, good you maybe provide pretty year a And there year? could there this the additional impact in funding higher be this remainder lag are rates of on in the on the Any environment next funding

August Troendle

out how and funding, the going sorry, I'm play that forward? might

John Sourbeer

Yes.

for maybe for then XQ around expectations your are what year? and next Just

August Troendle

look Things strong.

of levels and of both kind a record had in got we awards. RFP drop-off said, I we award. As And

the think we period. So we'll drop and environment We compared I could it that good. to how pipeline -- and we're strong a very have a And quickly was food refill weak QX, all time kind very things through moving hoping holds look the we QX, pretty of had of a the things won't 'XX. thing of kind business see off, up question

John Sourbeer

my one here on end. last And

there the Just any And can level? a even on remind long provide expansion us, the I margin what color margin the term, XXXX target you is EBITDA over or just opportunity additional guidance? guess,

Kevin Brady

expect given But in that remains expect reimburse margin this -- pressure to benefit the I impact somewhat some John, levels don't of contingent Kevin. to to activities, still the on where we there margin were Just that, I kind with We right? happens expansion. have Yes, quarters ratio. and wage be what past that longwall the couple I from and be don't here. elevated, off, of consistent mean a it's on is going percentage. if has

expansion see a margin So as huge I don't XXXX opportunity. being

John Sourbeer

And then, on beyond color guess, long-term I any targets? even 'XX,

Kevin Brady

kind things kind like I to what environment what just in teens, something high and in -- I mean if looks hiring be down said it normalize, of remains the but it mean, the it's just too. terms we've of of exchange

Operator

Baird. come Eric question next of Our will Coldwell from

Eric Coldwell

here. a quick Just few ones

understand quarters that inflation, a few peaked but and wage my perhaps was to bit. a understanding ago I moderate correctly? still continued? the Has that On it elevated, was had Do that starting

Jesse Geiger

that's kind Eric, high digit. mid- to right, of single

Eric Coldwell

Do the these moderation? Jesse, the do next XX on what you stable outlook you months Just see some any is? continued on -- perhaps what at levels, sense

Jesse Geiger

anything than these would this the in higher -- more from at it I past. stable the that point, levels turnover. think I don't success had been or a at drive lower with We've hiring is lower standpoint see markets has that stable good also

is moderated base pressures a employee it consistent. and little grow, bit, We're to have wage stable. So continuing expect to but be would fairly I

Eric Coldwell

believe Okay. X% the And anything backlog which apologize, in abnormal going normal missed -- with or what's the if I there? in of then you X% to cancellation of returned are have cancellations, fully I but terms profile to this, on I levels, somewhere

Jesse Geiger

quarter normal, at and back that normal least for Yes, well towards third the of the range. lower to level, end pretty

Eric Coldwell

curious visit change hit award activity. month levels. rate then have my that in normal And a of up was was this couple that I'm to over and or X continued? our ago disruption activity days. There hit any understanding work. your Has of And what peers was but a rescue obviously, solid lot like years, rescue some we're these looks you just seen the from Okay. the rate, some last back had sector in of giving

August Troendle

it's And No pretty mild. particular rescue yes, been little. very -- been activity. it's It's

Eric Coldwell

the escalate, exposure, East of and have curious to go what there. It's hate in the am one, case that's circumstance, Eastern region? kind I I or unfolding in Middle continues situation exposures about Okay. your Last unfortunate just concentrations Middle might to you but

Jesse Geiger

Yes. Thanks Eric. for asking,

are employees people for Israeli at remotely point. All accounted our working and this of safe

X% less Our and sites, of keeping we're of there, our less headcount it. total X% active eye and on is close activity a than it's concentration continuing, but than

Eric Coldwell

good Congrats on the performance.

Operator

Partners. Guggenheim will Our Wallace come next question from of Jack

Jack Wallace

the awards looks strength Congrats teens on RFP the quarter. A -- here. we're It couple are needed? with level different any there this mid- around One way, given the on of to the said like is we questions trending growth pipeline, next this now? hiring of catch-up right you maybe year. earlier, to or so? the in the the headcount of rate year Or And plan mentioned high maybe growth a headcount. over Or that's

Jesse Geiger

Thanks, And then expect the for line of Yes. headcount would we level. to . high Jack. we in here remain balance teens with anticipate revenue? headcount mid- growing that in the for Yes, year to XXXX,

Jack Wallace

Got thinking are role funded One is mean just the then getting comments. some your you how you. promising selectivity hand, jump ahead after. maybe good in of like place. go of thinking balls about and had companies does has That's And lead played in But have so, And any a amount your promising of about -- and trials. there's have taking themselves Have out. plan, if hiring sorted I funded, it candidates lead lesser hiring to changes of less for and helpful. any kind the just you much to targets there's that sound

Jesse Geiger

we Yes. be of selective of impact. too to always much in I an mean terms targets not opportunities, hiring its on continue impact plans, but and

think positioned than and our have We've well and well upcoming with the capacity helped We're I retention and for that's trials. had new work. really had hiring current good we really good people. that for we've work. plans as retention, of easier . And onboarding employee positioned well us terms that's always in for we're hiring

Jack Wallace

X of in to And Yes, sequentially factors. It kind any down a [indiscernible] if just standpoint. I any business. customers there's a like from kind the kind looks revenue roll-offs were or or your just running of XX just was wondering item. trial of housekeeping then more noise lastly of there

this X. XX been at X there's there's category the historically, top trading looking like look just a has It say, and the between, some didn't yes, top year. So graduate looks XX the really to like

So of there's nuances if just kind there? wondering any or anything timing going on

August Troendle

maybe I It's a anything there's it's think we shouldn't can't detail. like don't provide every companies the -- of subset I Yes. you don't know. different time.

you're a I guess You're X oranges. 'XX. to the looking comparing versus months 'XX apples at X months

-- increased X it past and I and what mean XX, the at if move is look -- from quarter coming don't it's sequentially -- X I to year. it's revenue to clients quarter-by-quarter, you up looking trailing looking every in -- our companies large really out anything X-quarter it's over and X by there's months, I that. quarter represents meaningful at I like don't the you're -- just and down there that's think a a roll anything and or you're at and it's any off or

Jack Wallace

again the Congrats on quarter.

Operator

on again, Instructions] we Max line, Smock [Operator Blair. And have the of William

Christine Rains

on Max Christine It's Rains Smock. for

was how we moving you've that much And year? about allocation income debt, now how earn you next interest should paid relatedly, wondering forward? off capital I So could think then also your

Kevin Brady

some so will here kind a the that capital current we'll we business. way increased kind blended investment beyond execute years, to of we're The that couple will building your interest Cincinnati. of Yes. think kind assumption want, about kind of I to the or -- able of into at and model. . And headquarters same, allocation or that our continued the okay of of how rates, on at capital is in some the to to to X.X% the have opportunistically of for simplest reasonable extent to it the cash. to our But that, look think and think of growth repurchases we not share is your build of expansion question Christine next levels rate a that, related the the In methodology, remain organic XXXX in we're expenditures

Christine Rains

you relative sounds had It deep X your just a in not exposure. larger to wasn't but it it in then metabolic like dig And jump Great. seems the study. like details, too

you hoping So any can give color there.

Jesse Geiger

It's Yes, couple studies and of nothing in there the category We've past good out couple well. other call in quarters, Christine, been the continuing. this than have of space the a year. over to that's burning really had success

Operator

Q&A the portion Lauren now for to would the turn like conference closing end to conference. today's remarks. will I This back of Morris

Lauren Morris

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

Operator

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

and a day. You pleasant have may now disconnect,

Medpace (MEDP) 24 Oct 232023 Q3 Earnings call transcript