MEDP - Earnings call 4 2023 | Medpace Holdings, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, ladies and gentlemen, and welcome to the Medpace Fourth Quarter and Full Year 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

Good morning, and thank you for joining Medpace's Fourth Quarter and Full Year 2023 Earnings Conference Call. Also on the call today is our CEO, August Troendle; our President, Jesse Geiger; and our CFO, Kevin Brady.

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

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

Jesse Geiger

and morning, good everyone. Lauren, you, Thank

$XXX.X million, in revenue the year-over-year XX.X% business net which new resulting increase Our revenue quarter was backlog XXXX. XX.X% a for a year year the quarter entering prior in the billion, X.XX from represents fourth awards $XXX.X of was to from increased $X.XX million, XX.X%. XXXX increase a book-to-bill. of Full fourth XXXX Net

$X.XX of from XX, increase net new XX.X% full billion, of an as XX.X% was of year were the and XXXX, December approximately For billion, ending backlog an $X.X awards business increase backlog revenue months the prior the backlog next will that to of and approximately beginning conversion fourth backlog. XX.X% quarter We billion was in convert in of project year. XXXX, the XX $X.XX

will our over turn Kevin? I our in Now review XXXX the with more Kevin to to performance call that, detail and guidance. discuss financial

Kevin Brady

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

was period. year compared the to in the quarter compared higher As Jesse basis This XXXX and on of costs, and costs period. net XXXX, in constant XX% million increased year XX% XX.X% basis reimbursable fourth in year strong mentioned, increased XX.X% on quarter a EBITDA billion the EBITDA on behind XXXX. XX.X% the foreign XX.X% the increased income personnel prior million represented in increased of year the currency margin for year net on $XXX.X to exchange income XXXX XX.X% XX.X% Full basis a XX.X% basis. constant XXXX. EBITDA fourth margin of compared million $XX.X year-over-year XXXX. period. compared increase $X.XX was in compared in a was and prior was the quarter and revenue of revenue U.S. the a quarter XX.X%, the currency million reported was the from of XX.X% to comparable from EBITDA XXXX. $XX.X a was and $XX.X $XX.X $XXX.X to fourth million year EBITDA of year margin prior of dollar. In to reported Full prior by benefit million Full impacted

income compared by effective was per the a prior for rate compared was $XXX.X represents to higher the For share which in year full primarily to gross XX.X% the compared driven growth diluted lagging period. year XXXX, in year Net XX.X% increase. XXXX, $XXX.X to net tax EBITDA $X.XX quarter was million million the prior of income XX.X% a income $X.XX in period. Net

per diluted $X.XX diluted share full the XXXX, in year net XXXX. per income income share $X.XX of to net For was compared

fourth concentration, XX%, generated and year X respectively, days. not revenue. In shares our of net our days negative sales Regarding the flow $XXX.X XX customer full million XX% did XXXX was and top roughly represent we fourth operating and our quarter, XX.X outstanding during top customers repurchase from We cash quarter. activities, any our in the

the $XXX we repurchased year approximately For full XXX,XXX XXXX, for shares million.

As December share million and $XXX.X XX, of program. under we had cash XXXX, million our authorization remaining $XXX.X in repurchase

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

representing million guidance. million December is XXXX. based diluted over share the in repurchases $XX.X in of to of XXXX. We million, Earnings million the of back tax our rates XXXX Our to take operator that, growth XXXX. With XX XX% Guidance income weighted XXXX guidance net $XXX forecast $XXX per be of $XX.XX. XX, questions. range are and range a EBITDA expected to the XX%, XX.X% in interest shares to to range to average will to million diluted income $XXX This year is XXXX million. outstanding foreign exchange call of of effective your share full of now we XX.X% as the assumes $XXX EBITDA compared of to rate $XX.XX no now I can million is so the in expected $XXX.X There on in additional for turn

Operator

first from Our with Windley Jefferies. David question Instructions] [Operator comes

David Windley

year. good another on Congrats

You're top gather a of heard What And would from last guess, at Medpace comments. things space. if of wondered or from but you fairly of couple and those stable peers August's particularly biotech of seeing be I 'XX, the I also had in some absence seen must at is slowing the -- we've invite unchanged that if different you 'XX were second that I the some the call, of of activity comments months the half the in trend? maybe

August Troendle

this Dave, Yes. August. Yes. is

but unreadable. last I fast quarter very of different kind once, in think things kind lot were of I said that of going at directions a

business of difficulty have a and environment. strong might You a very lot

into QX direction I think clear think of we've and coming XXXX, I of a got that. we've -- kind on QX in

I we with of a thought that funding standpoint. moving improving weren't held kind financing going forward, up think things are things get or to installed number of were projects move. now from A to starting are just

think and I side we're -- but it's I to seeing get generate think to project progression meaningful a and trend And and revenue. more backlog funding course, more may volatility a post-volatile we're improvement more the the quite period, and there still of take be So towards while side. these things on

we're So up have things do of bit. largely, it lot set in think But quite a this fact. that is a I I -- XXXX, up for think setting improved

QX, QX. But a was extending volatile have into think shown things there direction. in certainly I and time very there I think the

David Windley

what a for rate That's a you that burn it. then you're Got been And revenue rate, little you're growth, that. is projecting 'XX entering just guys lower that look pretty at helpful. backlog and is than growth If I a consistent yield. at XX% I'll has a follow-up

the it So some the you you seems like you're have lighter But were fourth quarter. burn for been little rate. a than in allowing also on moderation then hiring in

vice -- times, A just acceleration, confluence be of revenue wanted of to issues. lot so And of hiring understand you're you'd versa. if thinking and would accelerating kind you that I

backlog So your out just growth and status the of at around burn hiring interplay between versus expectations revenue moment. the your

August Troendle

you And Dave, does quite XX.X% what, rate fell And kind 'XX. bit. kind -- bounce it last around XX% it but Yes, was, in of moves QX of to there difference, a Sure. bit. of bit, don't the I it's is think I conversion mentioned, it a think over of of sort went stable. our -- QX. is I see guess, I way a a burn then -- band And relatively our as kind rate in up a that around

term, of line think is we say, our looking long-term last and other a kind looking revenue staffing see above -- and well In looking terms we have. dropping growth going revenue. -- this let's We're to as bit. The trend towards at year, as driven many it CROs a dropping direct, growth direct does at be is and roughly. of, -- of growth, 'XX, roughly little we in XX% at need bounce like total don't long XX% were we're But on top year, had by around I looking

about inflation need So aren't into the XX% that's and also that directly a productivity. all There's staffing that going that increase. and they in not line. a It's of to rest adds drive of it

I think of lower quite is a savings bit driving gain. turnover in productivity

we a So our bit I got fast. ahead very think growing -- we're when

to in a advance. hire We have quite bit

ahead terms in And we staffing. of got so a I bit think

looking at about this think we're XX% year. I growth

will we I kind as of our move think from mean, year accelerate I backlog towards growth think bottom. I a And get will there. grows it is this think it and XX% up I 'XX.

the or have spike. we don't think in so to And will few next need then to it do I QX but -- do And time of anticipation in that. a QX we hiring quarters the

So I on think where of we the staffing and that's conversion. kind are

Operator

And Sourbeer our UBS. next comes from with question John

Lucas Baranowski

at John were those be is on said how record to This first I believe any updates off, are I guess, RFPs Lucas XQ. Sourbeer. on tracking? near for levels

August Troendle

kind metrics are everything lot into wants on because gave more everyone I metrics what's Yes. to we And insight think going a the of a of we lot though and and even interim know of decipher. in difficult period volatile these

they got initial our yes, the very we're weeds, just give much avoid of kind et But record trying to an fees awards were of into kind strong, kind were said, idea, of to cetera. -- last strong strong. were remain They very quarter. I -- giving you So getting we too where before. I and

strong, in of to I what kind -- on of environment very strong continued it's have a QX. strong reasonably be on in basis, things think environment off a continued was coming think business still year-over-year I a certainly QX, business

Lucas Baranowski

just looked driving then could were Pass-throughs like that elevated quarter. to X they what's Okay. it on as additional normalize? last you the color Great. question. pass-throughs revenue, as of percentage same expect and I when And guess any of about level last the a

August Troendle

Kevin?

Kevin Brady

Yes.

just kind of sites. said costs by One in seeing we're a we inflationary investigator really last things. of driven at quarter, the that is As the couple it's

and Just that those really place the XXXX. is some into we costs and have to large mix elevated the we in do expect projects picking activity studies of sites driving in And are up, Phase continue just investigator that III really acceleration.

it to we'll if be more retraction we or normal remain through elevated levels, do XXXX. but back expect when Now remains it to here a seen to see

Lucas Baranowski

Okay. Great. all That I had. was

Operator

with Our next question Blair. Smock Max from William comes

Max Smock

you about XX% expecting just about with mid-teens growth being in I but year. past, revenue more on earlier. question Dave's you're that headcount up headcount 'XX in line talked the think you've So the mentioned following this in on growth August, growth

year wondering back some pull bit? know to next revenue this hiring enabled year? been Or to Is maybe some the already direct it talked it as a due So you some recently for outlook if is the I or on efficiencies you've but more you there's able of little just lower due about to else those you that's business? it just more drive to anything scale a plans

August Troendle

Yes.

a mean depends staff. and I there's lot think the ] of there's a level. to beginning really tight hiring it to lot to of look I got first upon to is in of of of you've the a keeping a staff number to compared our you kind year. a in come of turnover. if down advance, in the with Turnover much [ has higher terms curve, of very go hire lot churn, And amount have ahead

that the increase. driver So productivity is big think I

to be still I continue driver. might is turnover fast think thinking has And that were high very have that to nicely. so hire turnover dropped at we biggest the But a we rate. that

our I with along it think direct the our as is expectations revenue. revenue same was on

bit things a things These XX%. a in very time the growth which And direct. but and to top QX it next line on an we and anything, frame. in I time looking of would terms expected at kind think are that imply growth we're see looking And that. total of quite good of year in be business of year do I environment, for improvement say greater We that's XX%, about why take low the if our the both

will do hiring things that, off time think take late ramp So have year. to I but think that we I in as the

Max Smock

And sense. just off that. maybe segueing Makes

of revenue. outlook change So expectations versus it I the in for some pass-throughs wanted to bit you for direct from your year the given that drivers EBITDA increased outlook didn't drill are guide. for a behind sounds And consistent your on like fee next initial little

hiring increased in pullback call is terms a maybe beyond expectations, anything so initial And what's to in of to outlook EBITDA your out in driving relative for XXXX? there that

August Troendle

These said, very good the look a months see and I clear giving projects away. that's but moving had burned. things us I And period multiple think Yes. makes X choppy -- we direction year, install, guidance quarters things to a a to feel that that course, we these difficulties. cancellations of next on forward get and to and of we're to starting in Like while quite bit up us to revenue more of start in take and the to 'XX -- terms very go-forward I make last mean, things optimistic. for X, et a on not these does cetera. are And move optimistic get again, terms funding but quite in

Max Smock

opportunities past than then the winning would gains the August, sneaking here in a maybe have of historically. it. year, just Got and and maybe higher-quality have we thinking share maybe greater at end expected for about than mentioned talked those share one a in And just you of Competition final last seeing me. you here. when you

Just your And from here on your particular? any given wondering thoughts quarters disruptions couple of rate the one recently? maybe win how trended potential in competitors over last continued that some has if just of has

August Troendle

Yes.

the last win very X the quarters, above Our good -- was long-term kind has trend. rate of been the

you put know to is way gain these that a it I look the have do it. backlog a know to I means factor. look major I share, And book-to-bill. People at don't ways and I how conversion I only be to around what that's share -- bounce And at And at different revenue. though. up things don't looks to So -- look look at good. want

I revenue time. look and at So trend over revenue just

-- average of industry. at the at growing we're rest the look, of organically And multiples the of

share. above considerably may the continue of peers, this from, I will year So we low XX% know it's doing term, taking be we've I And just long the Where good a rate industry. -- above we're in a of clearly well don't we're coming growing job but terms but to. and a at grown

Max Smock

Got it.

Operator

from comes Jack next Our Guggenheim question Partners. Wallace with

Jack Wallace

of you great good another I And quarter? getting to things in be on of more like, outlook, depending sounds how fair front. pretty the tracks guess the last like I well. should a into demand quarter. also on touch in shape environment it's those of that in normalized a the are just could kind It funding if on wondering the cancellations as say Is baked sounds Congrats the cancellations, that level couple better on years? those reduced was

August Troendle

but in in a -- our after were a usual within I after than good if in less that's expect as as QX. first to we range, -- -- usual range. had the I Cancellations stay know quarter through kind to far a well maybe reasonable down came don't XXXX driving of And any in QX particular things that of X.X%. them we range spike rate

Kevin Brady

stays Yes, range. within the 'XX expectation for it is our normal

Jack Wallace

get But and sequentially of or even earlier, That's any helpful. better of wasn't were going you the just that out to August, like sure out then better continue with quarter funding in potentially at it that call like. in that. you're around is that your that and to kind XX look does customers more was if and made revenue of about they sound if decisions trend and expected like get are top of did anything I things down your the comments revenue, terms there's that saying everything acceleration to I because the well comp than And cohort else the notice

out from standpoint? cohort anything I wasn't there just was if a to So sure call customer

August Troendle

I have don't really No, anything.

starting because to get make eventually you -- top early that of too think leads that coming if out other to it's clients proportional I smaller Of But in. clients don't revenue anything in you unfreeze, course, XX newer to reduction expect but are the if it. I

Operator

comes from question with next Our Baird. Coldwell Eric

Eric Coldwell

in-house brought ability of hoping maybe I just traction you parts and I an solutions? about clinical, was believe. internal labs new and made to there question, business cross-sell certain just the curious some -- First expansions, on for those work update the early some just recently pathology, microbiology,

Jesse Geiger

not essay have growing in wholesale as or up with linear along around we've of the the And different off every or we've things test And geography we're be at basis. lab a on needing whether our an year for suite And but to step we've lab The capabilities. It's Yes, full outgrow Eric, the a nicely of we lab, areas. specific with and a Jesse. offerings, always in standing good kind things tend looking in the added which parts been business. start. invested expansions, been of the a in recently expansions bringing it's that's of the investments more globe terms is to the

Eric Coldwell

Good to hear.

Next question, revenue phasing.

So here, wonky, with can setup a it but a bit hopefully, maybe through of me. muscle you

do quarter, through I'm given model phase as to a you a things the recent is mention and quarter you sense phasing, better pick the or nearly you comps to to fourth hand, tough At XX%, going So good, XX% group. in the the first into compared in back of guidance, mean, curious, you the really half grew two, growth the revenue year? XX% on grew very trying get There reaccelerate half 'XX. just in demand was of think are one but this I tough fourth going and but we revenue down XX%. recover comps quarter, one, here the year, XX%. last and excellent consistent, quarter strong up? just same how not start or a funding peer time, to stronger and recover first the the then do immediately on I'm the most over

here the and So year? phase where through do QX we then in go

Kevin Brady

is this Eric, Yes, Kevin.

can lumpy that about even you revenue perspective. be quarters quarters very and from I know the think we're -- a you our think as

so throughout there's that nothing acceleration August of into a things steady possibility in answer throughout sequential growth as quarters? the if terms And we a state that and acceleration start the the had know out guess Or see the mentioned, we do of XXXX. kind QX quarter to to do that, in you up, I call don't necessarily in I fourth do pick some there's see an you and see and I specifically would drop-off? see quarter

be the do likely this to specific better of balance nothing pressures again of the front, to margin first perspective, pick inflation what the the specific nothing wage quarter saw quarter, end similar on think from of out out. we up some year. call I the quarter, will to than Eric. to year just because the beginning But a first But the and this year, of else second call it's that

Eric Coldwell

you extremely seeing in has curious, trying sense that on are big and lots -- Medpace demand been, are I'm point. of to this in the it a how category. hear lot just any you a trials a Okay. just that that your or about metabolic. trial all, a history to win in on there some get if at contributor active this notable GLP-X The market in RFPs? I'm market? but been your has GLP-Xs? Is rates participating Are to we focused there impactful pharmas space And that's are out of it's

August Troendle

been not are of pharma a part dollar much largely bit GLP-Xs of Not. in the have revenue meaningful spend, now. Yes. more overall, -- but phenom have our a little to large of any and not exposure GLP-X so directly. terms really Obesity a We're

Eric Coldwell

That's good, Last question. actually I and somewhat think. reassuring

fact deferred my Medpace a pick changes quarter, else? large seen curious the you call through anything last it OpEx a but after weren't that we notable of We this in one. below [indiscernible] that high P&L or quarter little P&L We had or the That if any the item adjustments like due line. companies why. I some running we wouldn't the out things up big quite will maybe at unusual sure I be items a am somewhat abnormally in got find looked the and to compensation have quarter this number

Kevin Brady

that's And a deferred exchange primarily be sitting compensation. area, in Eric, roll FX it's by call don't X And those some that volatility we normal through that typically particular out The in the caused of that Yes, foreign comp deferred the income, nothing on just kind is buckets stuff there have well. investments VAT. We kind to specific miscellaneous have of program. for or in quarter-to-quarter. fluctuations see to going nothing we as us do but that

Eric Coldwell

right. All job. Great

Kevin Brady

Eric. Thanks,

Operator

would you. it This Morris now Thank closing turn back to concludes I today's to for Lauren remarks. call. conference like

Lauren Morris

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

Operator

you Thank for participating.

You may disconnect. now

Medpace (MEDP) 13 Feb 242023 Q4 Earnings call transcript