Medpace (MEDP) 23 Jul 242024 Q2 Earnings call transcript

Company Profile

Participants

Lauren Morris	executive
August Troendle	executive
Jesse Geiger	executive
Kevin Brady	executive
Eric Coldwell	analyst
Max Smock	analyst
David Windley	analyst
Daniel Leonard	analyst
Ann Hynes	analyst
Charles Rhyee	analyst
Jack Wallace	analyst
Justin Bowers	analyst

Call transcript

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Operator

Good day, ladies and gentlemen, and welcome to Medpace's Second Quarter 2024 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 Director of Investor Relations.

begin. may You

Lauren Morris

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

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

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

would the to I like Troendle. call that, over turn now With August to

August Troendle

net project the the been average Net everyone. had elevated XXXX. XXXX. quarter equal to calendar quarterly of result including Gross to bookings were more the was provider. same with cancellation Cancellations in in Good our quarter. and quarterly backlog for book-to-bill of were backlog Xx the compared subsequent than for move rate sponsor average line June the of May in our XXXX, large impaired that awards primarily in cancellations have down significantly disproportionately rate included by the cancellations strong cancellations been strong new X with This entering QX were with expectations day, business year the of and were to pharma April month cancellations Reasons liquidity a work an the reprioritization, high would and existing decision to preferred of sponsor X.XX. an acquisition

more involved also growth cancellations recognized awarded environment depressed stress backlog to anticipate not work organic a take backlog, remains ratio about but may converting optimistic the the of flow normalized and it and to quarters our QX. that profitability. future few in a into challenge be of several continue we business industry-leading book-to-bill the yet growth, we revenue rate. As backlog at in I despite robust, should to opportunities replenish anticipate The we continue growth a

are will discussed XXXX we as fact, guidance by our raising EPS be In Kevin.

call over the to turn will Jesse. I that, With

Jesse Geiger

backlog. This prior influenced XX.X% quarter was backlog second will of $X.X of entering in Thank business quarter in morning, the you, $XXX increase backlog of which was approximately XXXX We book-to-bill. year. the beginning of XX, the an June in conversion the a quarter, next convert $XXX.X in prior good months approximately from from billion billion, for XX.X% backlog to XXXX, project August, second $X.XXX and year as XX new revenue to backlog X.XX and Ending net that increase awards XX.X%. resulted of decreased the second Revenue which everyone. Net was million, the higher a year-over-year represents were cancellations, X.X% million. of by

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

Kevin Brady

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

As period. service XX.X% year-over-year XX.X% EBITDA months Jesse increased period. million June $X.XX XXXX. $XXX.X prior second of $XXX.X mentioned, activities was second compared for year. EBITDA was compared revenue the a quarter was increase increased to prior prior from year margin second million to foreign increased XX.X%. This XX.X% million XX.X% was and X productivity ended in $XXX.X the the was compared Revenue XX, XX.X%. continued XXXX, XXXX. EBITDA in quarter the EBITDA for exchange. benefited from to the year billion, XX.X% million and quarter direct comparable Year-to-date the Year-to-date of margin EBITDA and in XX.X% in of $XX.X represented the of margin

In of EBITDA growth the was in income $XX.X prior XX.X%, net net $XX.X the by compared of offset per increased quarter. Net of ahead Net prior compared was effective of income million income tax $X.XX in higher quarter the income period. second XXXX, the for to diluted quarter period. EBITDA to driven in income higher the year million and growth interest share year rate $X.XX, primarily by partially a

XX our respectively, and XX% our customer XX%, represent Regarding concentration, of top X customers and year-to-date revenue. top roughly

In the the sales from $XXX.X any negative repurchase days. second not was million during We quarter. second shares cash quarter, operating day and in outstanding activities our did generated we flow XX.X net

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

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

of $XXX This to $XXX compared million in XX.X% of EBITDA net to $XXX.X XX%. of tax in expected of range XX% to EBITDA XX.X% million. XXXX XXXX. the assumes of We forecast income $XXX rate XXXX in million, the XXXX year of Our is to a range to $XXX full effective million growth representing million now guidance

the guidance. $XX to $XX.XX outstanding. is share XX, $XX.XX. Earnings XX.X our in expected additional as and foreign in Interest range exchange rates is no million diluted based of of per average repurchases Guidance diluted June of shares now XXXX. million are income on weighted to be There share

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

Operator

Instructions] Our the from with Eric Baird. Coldwell first comes [Operator line question of

Eric Coldwell

wanted what experience maybe was cancels maybe dive hopeful been I'm and if obviously not placed a some could are any the sizing. perhaps you XQ that net for of for frame of into or your provide juncture around that help cancels there's backlog? expecting relative or this us at the I range previously that you expectations book-to-bill the given reasonable large could had number these more cancellations awards for some you're I here Were to cancellations. into particularly details there were any curious way

August Troendle

was off. Eric, Sure. It large. It's It cancellations. were drive have you very several it that quarter. Yes. don't just surprised was far a large August. couple I it's wasn't X X usually, cancellation a And But think this or things. big

the in meeting what was reprioritization just in kind of if that the the of some of yes, the have bigger our the rationale sort again, and cancellation gotten backlog, kind although And under we of it. way, ones programs are don't were in to other it expectations, were on was? a terms across involve pretty recognized drive were the very on So a compound, not of distributed that And to lot that's policy. of hadn't for focus board cancellations there want and do projects. And they were but but were we all kind backlog things getting backlog, didn't awarded, close of yet of things that that cancellations primarily,

I should depends kind rate don't will good the that our the reason of upon why So there a cancellations. gap QX that see run elevated, don't of have bookings. it But kind in they QX. in that does why QX. why I cause twice impact kind but They a -- were of continue also they rationale focused a are continuation cancellations have we a for of

that of cancellations point. I are at can happen any So think unknown and always kind

we canceled on the in visibility coming We getting impair along that surprise, caught by cancellations already can backlog and that that was to in quarter. looked awards cancellations awards now. and that good see challenge they a But recognition to that of recognition. yes, us and QX QX we're on point have projects another It we always backlog the had were from based of will reasonable

Eric Coldwell

I you we at are something cancellation a gross quarter lower this talking this XQ's quite is experienced well this X, experienced than are that similar experience, as ZIP look to could level not as at help this difficult very bookings could your initially remaining typical set, something XQ's but reasonably it's that that X-plus maybe to least forecast thinking experience. the quarter. juncture, a at Or code? to like book-to-bill realize book-to-bill little point, But just better, a in

August Troendle

-- booking early a X.X. of June, thought I look, to in going at we're a have least book-to-bill Well,

things So out kind the that they you quarter really round and where know it's are. in late of

that's it's really the say. current So difficult above hope would to I quarter.

X.X getting is X.X. not of booked this to think But setting you're quarter, so -- range the where I I probably kind like closer I cards. we to is kind expect that of current in think somewhere would X.XX in hopefully the

Operator

next [Operator question Max of Smock with Instructions] Blair. William Our from comes the line

Max Smock

on me win Maybe here X rate. for

you sort shortfall bookings the any, in win tied down were But a said you a cancellations sponsor a of associated in if any you player gross moving of And in bit I the and solid improvement to you you can of acquisition step back quarter some, sort larger of ended mentioned that seems did much where was how mentioned the around after here. up some that give see with win to you first us maybe had rate. You update step an in quarter. work took rate the think any bookings the

August Troendle

-- environment long-term came of in outstanding, The nicely. of here. got we're a position QX. don't the I issue. I a a looks little are -- It rate back, we that win was down really it again is good, but was kind rebuild we gap snapback a think was -- No. It's I good. bit to business win from in bit our But see -- very -- rate not And pipeline good. it

are good. Our opportunities

it, reflect. I the than look who optimistic. always -- look, a am of fluff lot do bookings guy think really tends stronger into I -- put are really the things but CEOs unfortunate not kind it's lot this a I'm of to hard

Max Smock

kind are then to here on third flows more seeing initial That's of these that of some initial business the XQ turned guess, give you frame in on quarter? on color far so how helpful. in just trended? in I Can metrics And an the update you're how sort what Maybe environment awards in any us out side. RFP putting look,

August Troendle

strong. Yes. RFPs were

XX%, they and think were sequentially both about I up year-over-year.

So it was strong. really

have can you never lot RFP and and to a because isn't don't project I -- of them in have and forward. discussing to it when RFPs of good that a looks RFPs like -- numbers, up is very pipeline lousy things RFPs discuss again, rehashed line way searching go for lot RFPs. But going have we a a funding to support numerically because I trying numerically We the to RFPs good of unlikely

-- I RFPs, or but qualified RFPs. at if quality the kind not of So -- -- we're them, numeric think it's think the you graded you in of only them a I if look increase

Again, our the a always were on and I But normalize, back strong a everything look, growth downside. rate mean good, think will looks cancellations possible up difficult it. we're there always And is in all the initial meantime. things But And else to great we put look will everything and backlog going metrics I quarter. too. the -- GAAP get good. other on numbers I basis awards mean -- to as that's this except that growth are difficult basically -- cancellations. in

Max Smock

here Yes, X final absolutely. And just maybe sneaking X for me.

any should about going we revenue of depressed, next give taking third that above you out And for the can book-to-bill us the table to step I'm quarter there But area year. time what to of commentary is can thinking off for next range to is a touched time obviously bookings back called XXXX X.X? obviously in line for it just maybe you on the that about be assuming means revenue move X.XX. you frame be outcomes You up But your the year, rebuild given backlog. some about how step-up for

August Troendle

out And have we and I we a too at like kind of wild line what where next line. card, across year. I say, looks you to kind shake up but possible I about of to in line. always see look And get think quarter. quarter, of the think next you get that on can up we -- will next early kind getting is it's see like are lined course, likely to it Cancellations across what for the view -- of talk what is things the

early still have things problem bit in good growth, to to of it's too that tell a we'll XXXX to be end hope except think that at on in reasonable the you industry as -- insight we continue I perform normalizing I little having I QX, and able QX, I least to well. QX. but to talk a I the going to think to about anticipate than anticipate better we're continue say impact at

don't not we some things do think that's it is that's continue. just an We've situation. of we're don't group in predictive concerning was term. pullback that opportunities pattern to projects I prolonged and a I this if I think more going that's I drying is and a but random awards a got mean long the think upswing. up, of mean moved, I that are cancellations anything. a got were much

Operator

Instructions]. [Operator

line with question comes Tucker next Our from of the Remmers Jefferies.

David Windley

Dave Jefferies. be might Windley with That

If hear you me. hear you me? can Can

August Troendle

We can hear you.

Okay.

David Windley

Great.

So number, A wrong few code questions. sorry.

So about some conversion revenue near-term of the guess fact about in impact these that the light does guided I'm your generating? I that impact revenue? revenue revenue. bookings sounds you've either and should cancellations it wondering we or were backlog be like to how revenue-generating think of How to

August Troendle

Kevin, you take do to that. want

Kevin Brady

Kevin. Yes, is Dave, this

finish how Certainly, good with But Just still of about tail in We'll of XXXX, terms bit do of a feel those about associated programs off of we feel revenue. and little up. those we cancels. pretty kind good it. see some headwind there's

of at that it guidance we the second quarter. headwind time, that associated still particular Now That where decline saw good the saw direct in in the the in bit. service the kind guidance a decline and midpoint same the the there on overcome we a the the we could of revenue of no, of a little was more indicative quarter. the did we range pass-through the feel feel balance But of take these and are. that wasn't bit about did in we we down first first bit bounce was But but quarter. activity something It with good Again, about back the cancels, side. the year,

David Windley

Okay.

credit we that wondering And CROs of by first of we I'm that seeing been discount up. volatile back highly I some oncology as quite seen area pipeline, crowded. I of right about more kind the that talked and things the had heard on space hear exactly among how guess, that one-off bounced bigger then rate there's to the are that couple think put perhaps On of a bit sure of now, like them therapeutic has deals not is we've a invested most also jockeying win perhaps deep more quarter. been that programs much kind little and competitiveness. price in And the a in around if and a some you're intentions of you bit that of sounds

But to fronts, competitive? X of encouraging a specifically? more any oncology on that's price theme there theme there so those And relative is in is players large that. And being

August Troendle

tighter, back, But our for In better exact are cancellations. if in think look, they cancellations, a was cases of coming of lot oncology don't our a the we I percentage-wise, things overall, of part competitive was maybe I I we're terms for lot now. have things things given and big a were obviously a don't numbers relative aggressive think, some work, it factor. really overly the think Pricing, oncology. I'm oncology But big it's part not of -- a there to pricing. a a of some but of, few looking out that's things, the mean a -- overall very of I a groups, sure really lot market. aggressive were But now. have our I quarters and actually is I not, not it's environment whether think, seen concentrated driver

David Windley

for Last Okay. question me.

-- mean, at don't first at certainly count flat. productivity talked than that's think, net growth I'm those preclude or hiring guessing the quarter that basically about head was, all. quarter, this Your lower I it's you've any hiring in initiatives, in I but expected some all

So the today help you're increase in guidance think margin to the this influenced hiring should and of and front, that lack resumes us growth thoughts. showing your of how sustainability we by with hiring the I'm resume positively kind the about the sure have hiring when that of you

Jesse Geiger

it's mean, to I perhaps low, count growth for Dave, kind Productivity mid-single-digit expecting mid, anticipate some head mid- the Yes, has been has good, good retention we we're be Yes, of net hiring. but still Jesse. efficiency do good. year. to The continued

despite still efficiency. and cancellations the productivity So and hiring despite continued

David Windley

Okay.

anticipate that's so still the as -- hiring balance And absorb and so baked that year, and the that up for margin you can your into the of guiding. go you're

Jesse Geiger

the I guidance. into think

Operator

Dan next Our line comes Instructions] [Operator the question Leonard from UBS. with of

Daniel Leonard

I follow-up hiring any the your reflective that response the of with was was in you the question. Or that to have took muted last countermeasures plan? bookings? to quarter a that Is consistent in weaker

Jesse Geiger

consistent of came are the level through we to with The to very the quarter. the cancellations elevated plan plan. and late and primarily Dan, in at kind according hire continuing quarter

Daniel Leonard

And moving was factor whether just that clarify and flight or Could was by be a that you that the large biggest work a separately, would know of pharma, already that also was acquisition that trial X in then that many. customer cancellations type because elevated that in clarify unusual. of of the I

August Troendle

And That near near was early, was the just running, significant very revenue. but project X many. of

So in been was have -- pipeline the was should late it backlog. in

field. was already was running it the in So --

wasn't it But operationalized -- yet. fully very recruited. broadly being patients had wasn't So it

Daniel Leonard

be you impact typical. compared remind cancellation could the I so of the doubling is of do the question. normal math love quantify to me to final better able on Can own then that? what double I'd cancellation my And rate rate, to

August Troendle

Yes. below Well, normally talked about we've X.X%. been cancellation rates that our run

Operator

from line next of Instructions] Hynes comes [Operator the question Ann Our Mizuho Securities. with

Ann Hynes

you comment in just believe on that XX% year-over-year. actual know update what's got RFPs? in since made My a activity I just an July question it's happening later is the said you that RFP Is you activity. represent June. worse that the us Could I cancellations around RFP second terms. is does give in Or in month. revenue up

the year-over-year, tell if up total So perspective, activity would you can revenue a be us RFP it doesn't, from great. that

August Troendle

So what the we're value the percent in have a about that's talking on terms of RFP, don't dollars. actual numbers but of dollar I percentage as

up So called in And XX% disclosing responded up value, about that's were that think the XX%. the -- don't actual We but unless we're relevant. I of about to value. RFPs We specifically means dollar dollar value you those are dollar the talk numbers not really cancellations. don't then out. I'm quarter not asked

Ann Hynes

In days. July, the me get

August Troendle

Nothing unusual, in June. not like

July. in So no. No unusual activity

Ann Hynes

maybe then your just Can be can of EBITDA great the as about strong. we the that, drivers was well. book-to-bill talk you would And that obviously, very about just guide EBITDA, despite talk

Kevin Brady

it's mean I continued direct in service our activity. good Yes. progression

improved year low As just continued digits, as previously, that on had to the digits seeing productivity existing do single in quarter. somewhat Again, kind the we've we of Jesse we're the year. that mid-single end -- for slower mid- mentioned second improved we'll mentioned, kind of think hiring and staff

the from well might little the strengthening bit the that dollar. year. pick up in balance we benefit a quarter in And FX the So of as have the of of

Operator

of the TD comes question from [Operator with Charles Instructions] Cowen. Rhyee Our line next

Charles Rhyee

the -- direct the of I terms revenue? and down revenue wanted in reduction pass-through of with in sort right, is much to -- of of first, of the function step cancellations a versus backlog service maybe you maybe backlog, how if ask the maybe terms the in guidance,

August Troendle

again. cancellation Yes,

Charles Rhyee

I guess we're...

August Troendle

versus cancellation? direct of don't. Percentage We indirect

Jesse Geiger

the tell that quarter percentage passed through can cancellations XX%, I around of was were XX%. you the

Charles Rhyee

you Okay. back Is of know And in proxy? that them kind backlog is there? good that well of kind reduction as for into -- I of a a terms

Kevin Brady

what of Charles? terms In

Charles Rhyee

have more obviously, because about at think for if I of question we and revenue has actually more about this service pass-through, like the we're think we seems remains really because just plus guess we And EBITDA expect it guide. if up. burn material rate the it's in a guide what I'm $X revenue, burn instead, look function guide the been backlog Should reaching stable billion taking to reduction uptick is because out the that ask gone when year, rate anyways? trying the we than the which in to a the revenue getting When is, the would

Kevin Brady

to will in you revenue somewhat I in of light see cancellations. in And in Yes. the little saw in as Jesse increase the primarily then terms mentioned first cancellations related year probably of which No, I quarter, balance of that we also think pass-throughs those the pointed on is to reduced bit had burn than guidance the call, both you're of an on pass-through reduction the the pass-throughs, what the the the rate, the earlier heavier the direct. in but is out, cancellations a

Charles Rhyee

X.XX. biotech, I we relative overall, first still second half, to when the in piece at you first year. for look quarter. funding we that guess -- in very yet Is just overall And And obviously, quarter translate prior strong funding had an to very perspective, Okay. quarter a the do the terms say is strong that a funding mentioned you you in through? gross bookings at you to you're activity? of through? think, come without a -- still, Are cancellations flow You would we kind from the yet of that seeing this book-to-bill that looking of Or are

August Troendle

and I business about to going is don't through remain I the environment environment the flowing strong. strong but is is strong. where, know remains business think what's

indirect. of converting I pipeline And projects direct that faster course, backlog. into backlog, we it are to will gets anything that think our replenish burn to than tends of

tied a direct replenish they to know cancel. is I about to going the environment of think tend funding don't indirect pipeline. up But our cetera. what and is But cancellations et when have higher we'll keep I so percentage And what to to opportunities,

Charles Rhyee

could one I if sneak Okay. Great. just And more.

kind by due getting How a help that pharma Can cancellations? acquired size that you to the business. large moved the much castration, of to you was overall mentioned client in was to acquisition an related of cancellation cloud relative that? Just X

August Troendle

it a the of No, the most cancellation, not driving but ones, not it. sizable not of anything was that. It larger like but overwhelmingly was cancellation X but or

Operator

comes line Wallace Jack Securities. [Operator Instructions] the Guggenheim question from of Our next with

Jack Wallace

cancellation I to event. wanted the a kind M&A to the about related ask just of broader question

in Just lost been we as you company's has maintain biotech M&A. larger the acquired clients a history they've of Have post to business acquisition. you've been those your through -- the looking back cycles industry pharma, most of typically have able gone when higher by decent amount of

August Troendle

Yes. Losing the unusual. backlog a in in and is project is running field that highly

reason the it was it, But that is client frequent. from losing work almost mentioned the like So it's very I never happens. that future

pharma, So but bring large that if usually and it. pull acquired and they rare a get for that into it's their work, decided study future very we're systems they a is cut they actually out started it by move to

So that was very unusual.

Jack Wallace

kind coming market -- environment. Got in seen of you most any some thinking question pricing, kind they're price bit. of just larger terms about helpful. down from business? around activity competitive of or on most how it. then have formative change And which posture of a new actors competitive CROs there the That's attacking just Have just been your And the aggressive have of types another in been

August Troendle

anecdotal. Yes. kind No, of that largely be would

dynamic. players. by that And so the big don't in much large the -- -- environment same. and see a is see larger overall a a change most don't certainly change is think there really remains of our I competitive I competition I

and things was terms about very moves normalized larger competitive I talk competitors I time worse of when relatively few competitive back . a a some was environment much little the environment pricing think But in think we're some a is I think there funding when possibly. of more a and a our aggressive bit making quarters there environment. maybe in

Operator

Our Bank. Instructions] from Deutsche with Bowers comes question line next of the Justin [Operator

Justin Bowers

Can the made is XQ? of your to enter us What's some how would remarks, your you XQ gist comments that you question trying backlog And policy? prepared into in in XQ backlog the visibility on. bookings understand as your coming the impact you remind out of based and on of

Kevin Brady

Yes, Justin. This is Kevin.

Jesse Geiger

ahead, Kevin. Go

Sorry.

Kevin Brady

any be program pending, that patients. There terms hurdles that issues. there's the couple in actively have in that to to a be or started backlog get it in items and start any can't of still be Just ready are be got put can't to backlog. will in gating have regulatory has to our of it's place There be policy, funding before recruiting the criteria place

got So a funding before we'll going that of come that to to from funding be line there's to clear sight backlog. is into where and put

so after put generate revenue And are that they in actively relatively to put the that we programs the do backlog, starting shortly we programs the those in backlog.

that happened backlog finish eventually And seen. as be that were fill backlog there's that light that so mentioned to on we nearer then But there had impact in down revenue, does pipeline. potentially QX to that not into a term wind out. of up how a -- programs programs cancellation funnel were the as awarded yet that backlog have cancellations and out continue is for and mentioned, of and on a of depending those August remain as how And up well, as fill going some in to August bit convert to We do be fill opportunities little have and kind awards new pipeline that gap. were

Jesse Geiger

quarters the X a years top backlog of first is bleeds of criteria other over time kind on progress. project put beyond as X then the we the years and And balance of in only for that into recognition

also backlog some that and portion backlog would had of straddling some QX so was like pre-backlog active cancellations those and also that then a And impact beyond. quarters future

Justin Bowers

Okay.

like... sounds cancellations So

August Troendle

also a your it. to address kind you little of visibility bit, question, on give To our

the time. because and funding. they're things get or backlog they rest some awarded out start for and look kind don't of project things be they early going don't and we're up doing to like are things have hold of And Sometimes the it be but quite the long because they're lining may looking start-up funding for they're on could a for

might And go to forward -- and as of so like forward. looks ready be to It they've They're quarter. looks to the And run going money. the kind going like we're it's they move to as it in coming raised greenlight funding. soon on you're close next it get

have quarter. do you could pattern quite into be of bit stuff go So forward that a or that that's could pulled in the whole

Justin Bowers

Understood. Okay. That's helpful.

So that there period, backlog in were backlog going were cancellations, into in were not were there the and that were answering backlog -- current you some some of into but the XQ. in

on this new for in of What's level the some based -- right. hiring revenue envelope be all That's of -- And FTEs of sort every productivity growth on think you've just back the gist to some these us productivity is of then you've the there programs. had terms And gist for like, Okay. of go XX% a a at sort hiring, then example, to instituted revenue of of that or going about measures, year. the there's growth, in some the for sounds question. the of And forward like It rule -- X% way Okay. thumb right? now growth

Jesse Geiger

to some time too utilization much up do excess on determine level we needs looking where revenue. aggressively catch at ongoing at to time. We're the we be it sitting We're we can volatile. of it mean hire estimating on people time need to time Are basis, I of Or to depend we are have gotten trying where looking with from a a how have? Justin, can and capacity? We're buffer Yes, we to from the near-term pipeline. high staffing funnel. an versus

those X really revenue time, depends so versus needs. kind how And projection on sit, sits staffing over of it how

more need of move hiring retention how largely by in kind XXXX We we be reducing but of move versus rate gross dictated kind and low we terms growth revenue up been for hiring, the year. and then progresses, as rate revenue looks progresses we've into good of and the the that how has fortunate, have as lately of into how award the how through the as mentioned the will shapes which turnover, pipeline been

Operator

We Instructions] Baird. with from line question [Operator Coldwell a have of the Eric follow-up

Eric Coldwell

did if cancels QX. if a XQ's impact mention us did year-to-date And of did on XQ you the to cancels makes X.X higher curious cancellations, I'm of limited could some a tell obviously, sense quarter, amount. but Last these still heightened you that you revenue. mention impact in book-to-bill,

Kevin Brady

significant were were QX, elevated they in the And August the wasn't had it enough Eric, mentioned, somewhat as that impact that cancellations on elevation we saw QX QX. was a June, while it in major June. primarily And in

Eric Coldwell

more that probably a Is fair? not So than, the correct? $X million, million most, at say, $X

Kevin Brady

amount. quantify I like don't said, wanted a it know, always I Eric. I we it, not didn't significant mean, but

Eric Coldwell

$XXX million here let's Yes. ZIP What call I'm this million would million of of code incremental book-to-bill. to $XXX abnormal in at in net trying had have to of get to is, a cancels $XXX XQ the awards X.XX

or cancels million.So you did pass-through total. somewhat were code of disproportionate XXX, $XXX said the the You indirect to ZIP of XX% XX%

fee take, or million, thinking million this So I'm $XX of deemed cancellations $XX as abnormal give direct were that quarter.

of million $X fee million, would cancels indirect not take little a duration a be on backlog side, something million, XX it quarters. divide in have these obviously, maybe the X closer across Your case all a tail put I you That's equally to the split you fee and $X and of next impact X is were which the by if is to revenue beyond the years $X direct on million the years, I up I'm going backlog. the over of like side X years. XX. coming quarter with $XX

$XX start just by directionally the Is a more behind more process process? with quarter Or but thinking the speaking, by that, revenue that's like balanced? truly thought these million cut little get I for a it. I'm the revenue cancellations start coming and we I'm directionally you just trying how skew something going But do up million, a X%. get understand over the -- the guidance why you thought you're about do trying XX correct to cutting on to we -- months if million, in about $X dynamic fact, headwind on if million. to or are to theme that, they, of need to the $XX not $XX first I'm million to you're guide $XX year, next

get here. where to with models a trying sense go of we our So

Kevin Brady

up. A ahead, of August. lot pieces Go moving

August Troendle

on going therefore, a sounds of based to think it's was don't and everything it's say, buildup just math of I our what fine. that's it, this out really by your with mean Yes, projections of looks we're to I is like again. come going this how doing help I forward it down kind lost amount. we going

is so think thing of drop-off are bigger that we've an have have I calculations the just bigger an some had in seen been mean, don't but impact had revenue. we would expenses -- pass-through I And the quantify true, a the have that your amount there on the was upside. probably maybe lost,

have moment. whatever. we beat would -- means remember, the sometimes always ceases had We and It Now at cancellations. we cancellations hadn't they next quarter, that aren't have if immediate just over or would probably see upside. had an revenue revenue possibly But

quarter So it may farther it may out. current impact not and be even the

drop the generally, can quarters a that yes, ask quarters, all yet several for going mean, headwind to of I But it's revenue big X off cancellation. it's Sometimes isn't I from that next But revenue in the affect. you're next whatever the out project that in backlog the that a forward. quarter backlog right, is or overall. something

Eric Coldwell

like -- there think I And is get to do just as get next was was the what down, to X if next couple cetera. been of I the and into these be $XX million cancels XQ. million wind that the because something anything this and $XX payments in impact math down there arguably us was sense for incorrect or left including get of revenue life months very built a year, to some have if Yes. trying or wind before how impact from reduction potential hasn't was their cancels ultimately, was I million, follow-up -- impact to simple date, in and down those $XX my again, do this much you few question events get to trying a would more et may quarter quarter would or payments, you the very of wind that I transitory

just get it if or about wrong? -- in to And trying $XX built I'm extra so some quite on if million a with just thinking sense if frankly, cushion the you I'm you

Kevin Brady

mentioned, of of rebounding as saw the in the had really It's of logically call on to half it that mentioned, bit twofold. and the quarter first not it kind is as is cancellations. I second on year, mentioned the mean, the lowering I but So be maybe of coming some right range think number terms of of faster of revenue the to I a in And first helpful. with be expected I it, reimbursables that if the range of as those a going quarter, to just That's the side Eric, quarter, one, it It's with in the lower, lower potentially much combination part But as in be there the I in particular had I piece headwind of there it's about as is on the that's a then thinking it. I going anticipated. you're that's we had that, challenge. now other headwinds always quantifying lower the in the these activities first

Eric Coldwell

is. it Yes, Okay.

Operator

Jefferies. Windley a Instructions] We with follow-up line Dave the question [Operator from of have

David Windley

up of questioning Eric's pass-through. the on line Following on

jump that, your year, and quarter of about expectation revenue but first my part could described, total level. was the wrong end. it last I the you of was answer run up at low back about not XX%, that pass-throughs. would -- and just XX% gave, still is Kevin, recollection last that remembering lower your similar you something And as to be So on

XX% of than saying last that remember, is to It revenue, sounds total you're year. today similar like lower that. is trending But what

reset some this a of pass-throughs. of so around And expectations is

how point I XX%. Several is -- changed to that on ago, what? stabilization. Where the it is could, confirm drops it to XX% years XX%, year. guess, up So of if It magnitude where got that, was put XX%, you it, going? And last then

Kevin Brady

Yes. it's I expect I of in and to to terms I going quarter. first do in mentioned in where ability increase, the our second Dave, the mean, nothing's predict changed go. quarter, as to did it Certainly, it

quarter. we think finished at the revenue like XX.X% of second in I

it these modeling slightly rebound that see And finishes on here. did the above in so that's out, in quarter balance to the modeling but first provide would And from try call at or and it's it for going suggest what year. be of to at levels to like more of how the third we'll the time. quarter this point I'd XXXX the color kind suggest would

David Windley

headed as a is rate like inflation instead the of long normalizing the term have little like we And we're post-COVID as whether a So there's that. a and things it view back -- feels like just to general you statement, don't XX% something and over sites that maybe like to XX%. at

Kevin Brady

historical term, wait, provide levels. long It's going trend color third probably those it's XXXX quarter. know. will to mean, I'll I the to I in I the know go In that don't But more don't back again, those back levels. to on

David Windley

billion. is intent you talk use please? sheet, for me. us balance at to the Balance Okay. now about for Last Can sheet of your $X.X question

Kevin Brady

opportunistic same. be will the Dave, had the priority. campus elevated as mean, mentioned kind to our here to of extent ahead that of we'll you for do more to go executed. some that, some growth We'll have at get we're just But to expenditures continue dribble We business. able expand that look -- to That's beyond the building of really value, the as I that happen and previously. levels Yes. going And we're levels we continue and those first the invest in not, is capital if okay, organic repurchases share cash. see I we

Operator

I'm call Lauren to queue. would the gentlemen, and the for back I turn now in further questions Ladies remarks. to closing like showing no

Lauren Morris

in to Medpace. today's call our Thank XXXX Third you your for for interest and on Earnings speaking on We forward Call. joining again with you look us Quarter

Operator

and for that Ladies your participation. call. gentlemen, concludes conference Thank today's you

disconnect. now You may

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