SNCE - Earnings call transcript Q4 2021

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Operator

Good morning. And welcome to Science 37s Earnings Conference Call for the quarter ended December 31st, 2021. At this time, all participants are in a listen-only mode. We'll be facilitating a question-and-answer session towards the end of today's call.

As a reminder this call is being recorded for replay purposes. to for call a like Paul, to now Relations, Investor few would turn over the Caroline I introductory comments.

Caroline Paul

thank And call. you. you participating for Thank in all today's

Zaranek, Chief Joining on David results the is copy for December Science Executive of Chief ended financial Financial quarter company's XXXX. Officer XX me website. released Officer. Coman, available and XXst, are the the today, Earlier release Mike A press

the that I'd material like which statements to remind forward-looking estimates management meaning that the make forward-looking various call to are the uncertainties or Form encourage and those to laws, filings begin, and filed you from during Safe of or could will XX-K of statements. results this XXXX, these current Reform report Litigation and assumptions for We year December which risk forward-looking statements Harbor for with XXXX. we Securities including actual XXst, and that risks materially Act include pursuant securities earlier our our These you was within on ended factors, based statements events differ to are provisions our involve Before federal annual today. a Private discussion of cause the Securities implied made upon review Exchange of these the Commission by anticipated made

ongoing measures any evaluating for use which You to metrics turn We call SEC are disclaims cautioned portion at forecasting update of about comparable for Coman. and like including only non-GAAP useful Relations performance. are to our to speak a would our the and investors.scienceXX.com. we statements of can and material that over our in referenced, operational We be of on the those place as And believe measures non-GAAP undue forward-looking filings David not non-GAAP new company evaluate obligation measures the to our planning such on Investor these I financial the Information now measures GAAP certain today. operations most the earnings available reconciliation in found these reliance purposes. to to information. statements internal website

David Coman

mortar everyone. thank At Science are providing industry the large biopharmaceutical us. their traditional clinical sites, Thanks, $XXX research to all XX own rather centers, them To clinical through the you any patients And universal for anywhere, and limiting from home, at patient, same local development and flexibility billion Good alone. community at to very access a than and trial from by sites care Caroline. enable morning, any time. engage disrupting provider to brick comfort the sponsors, we of traditional joining trials

investigators, community who support connected generate submission. telemedicine a of nurses, global our we of XX full coordinators, utilizing consists to our in harmonize with times networks category have stack, providers, behalf that manage to regulatory up that retention, been sync and platform are mobile technology data in and to three the able achieve diversity operating extraordinary biopharmaceutical time’s clinical defining to up trials we achieve We customers. XX greater result, the enrollment, system faster times of these the each As on all patients results of set and for our of end-to-end currently common and that include and broad specialized interacts clinical workflow, all pivotal community. And through devices a fully the engaged evidence XX than every a operating this three by technology patients, to we're to of remote that part in more The from require targeted technology highly we're studies, provide of patient long term process, thousands provide Science decentralized, These a follow than trials platform. to We progress up. procedures. clinical To medicine large trial, of testament range more patient range patients the Science is underpinned precision today of we've studies XX trials date, we've decentralized are supporting offerings, studies XXX whom clinical XXX,XXX the tens day. which each conducted are and making

decentralized the operating entire orchestrate the clinical fully clinical agile using trial, we in to or And the which a system. trial provider First, we our sole sponsor. are study

in act traditional a supplement Metasite Second, which using or sites as network a system for site virtual operating a sponsor of trials CRO. we to our clinical

trial the what hybrid approaches. or to case, Tech support Plus, technology not centralized but is orchestrating we Technology configuring call this the Third we're in or we're

et for fully XX. XX on and Our integrate progress XXXX flexibility Science any geographically cetera. any year continued sources be platform in We can technologically, made commercially. of with other enable with technologies, multiple Science fronts, tremendous phase research indication. execution applicable was CTMS, virtually and to This for meaningful and RTSM EDC, a as investments, such clinical

XXX% quarter fourth in or prior in a same million representing And revenue $XX.X $XXX million. year. totaling exited the times As result, prior the we bookings, of achieved alone, revenues year $XX.X net million, the We achieved quarter, with the year. growth nearly of over the growth we XX% three

sponsor enrolling To or sentiment the pivotal to on trial results prospects mortar sites. site-based in Notably, maintaining and shift, traditional plan see to we decentralizing studies. In a capitalize for at cases, components traditional XX capitalize report brick in the in upon Metasite and and network, acts when to our a decentralization XX% focus has the sites. [ph] brick profitability. specific, that most operating we XX% minimum, this superior commercial brick trials of efforts, of shift long study we're on toward term all we are our remain investigative fully traditional outside XXXX, traditional among as deliver clinical To performance they strong momentum approximately mortar clear consistently growth more our proved XXXX, system, investments In XXX% in among versus positioning site through the the of is hybrid XXXX be versus who and and excited system represented our Our highest build and as look site executives, our in virtual position that the Science Metasite our our of providing the patients decentralized, market operating CRO can enrolled. enhancing many of recent on more leadership run mortar, at our network to a clinical extending and agile company scale, tie

remains enrolled XX XXXX Tech example quarter trial, patients us. the to site an in by adopted for As X.X [ph] average over month. focus offerings Both the a that area only traditional commercial of CROs versus Metasite global our be continued enrolled more Metasite final pivotal per and patients that Plus per of Tech month an the and

pleased CRO This clinical were certified have worldwide our to to quarter, welcomed trials we network companies. of

standardize this are management, as as quality for differentiation In proud to announce XXXXX:XXXX certification that cybersecurity the on is for about Science We ISO system are certification excited going from powerful These CROs forward. continue the other point expect XXXXX see to received competitors to measures to XX we regards customers. well and we ISO that the of of operating privacy management. operating of partnership system were and itself, a meaningful the our most some to

from network to rate losing ability worldwide. of in site. to almost are more considerably was providers covering themselves bolstered destination patients than our at become practice Community patients providers clinical can to trial of healthcare They Our as to another contracted a for performed we their or procedures XXXX clinical faster that become setting. with refer without a preferred need patients XX Today, them can a million six with nearly XXX community investigators patients organizations fold. enroll providers grew XX,XXX in fear receive be

We continue significant investments in to our core technology make platform.

more fully to requirements our to use interoperability, China. and to meet And build biosensors We with take physIQ, summer, developed strict a today's we're We've the release major the the enable new in and of in machine required robust invested planning datasets. more have a data agile flexibility trials. collaboration capability platform this to level, whole including regulatory to learning clinical our for

year very of Mike? eye to that, enterprise term will investments cash toward the well growth, the research, to moment. Mike these and we're that With Overall, I call a and value Financial investments in long and to we're also profitability, we're accelerate touch making XXXX we're in continue our upon encouraged beyond. the define growth to Officer. high an to While will with over balancing future management deliver turn by our Chief and now strong and positioned our my exit Zaranek, Mike clinical

Mike Zaranek

the for take results, full full year guidance. with Thank year through you, up will then everyone. XXXX. David. then and I conclude plan And roll fourth hello, the to us the I XXXX quarter

an XX% the million in We XXst, This it XXXX from report revenues in $XX.X the prior the the December represents year. history. period three the months are of pleased $XX.X the making million, were company's same $XX for plus quarter to first million increase ended

vary in profitability our first favor in our revenue worked As discussed that were contracts. previously of in of we million occur can limited dynamic XXXX, quarter bring to the $X.X expected the in in to as previously from to this and final able current of we quarter-to-quarter, bookings, had quarter been year. the at and of part around scale, number a timing This due revenues

adjusted $X.X net by of period. revenue for prior $XX.X $X.X very at also months million XXX% were prior gross year-over-year increase up which the bookings coming XXst, the is from was Driven XX million, XX.X%. XXXX profit strong from points Our in percentage our strong, same year. negative of three an the in growth, December approximately period million, ended gross X.X% year our a to Well, the loss adjusted robust margin was from up from

quarter in higher by price of revenue that a fourth over expect long the our fourth rate increase as contracted represented trials XXXX. our were the before quarter was We term run two of composition

invest the million expenses, quarter period delivery year. million to and $X our Selling, prior stock increase of in to amortization the transaction effort scale. based and same continue from administrative underlying million of expenses, excluding the were infrastructure $XX.X and We intentionally $XX.X depreciation an of compensation, commercialization, an of $X.X for in related inclusive in million, general technology

XXXX. to we term business back mentioned, was $XX.X EBITDA, we in same profitable business against a period a which and the needs million by adding of stock compensation David the a create and amortization, long in in objectives million compared to balance effectively. the based the As quarter, interest, Adjusted loss continue invest $XX.X of loss manage depreciation, taxes, the to to expenses to cash transaction scale calculate

on results. Now we'll full to the year move

bring with the base. XXst, customers is increase done million customer This net testament capabilities, customer ending and from previously, full to in effectively million, bookings of Invested in bookings. delivery high which For we many model the We were attributable up new versus heavily our approximately approximately net $XXX wider one XXXX, full to derived to million $XX.X a report of is we underlying $XXX to pleased value third were the significant revenues We our the satisfaction. whom go-to-market previous We we two to of bookings in $XX.X as and a continue $XX.X million and total in across approximately the able generated million business had to in XXX% technology reported December XXXX won and investments. customers, with our represents we XXXX. ability Xx with deliver demonstrate of in of backlog. our ended year year year nearly achieve net we year year-over-year infrastructure, XXXX in were those the from net that of bookings of thirds bookings

strong demand As see David offering. mentioned, continue we our for to

proven Our high, deliver. attribute million our market than at plus composition interest significantly time in pipeline offerings qualified all before, $XX pipeline the ever includes ability more is opportunities we the to and our continued which the to and of an

full points in gross XXXX Full XX.X%, our investments in leadership adjusted fuel a of approximately loss times XX the $X XXXX. market $XX year an million percentage of year we nearly basis, year profit prior adjusted X.X% profit of margin up adjusted On million our Our to a EBITDA to million. of $XX the gross as growth. seven was total and was versus from fiscal work million put was fiscal loss $XX.X XXXX, year

recognize the the extent clear, of $XX.X reflects related to million You original income quarterly under US value our loss transaction in value change basis. net decreases To SPAC. related of non-cash. will the our is liability of expense potential a period holders be increases, a former share on liability, the expense $XX.X fair additional re-evaluate stock up, all of the a and of the shares creates earn-out XX on closing, XX certain the are receive Science month Upon GAAP, the we required with a that the US therefore thresholds associated meaning price price we To under extent the basis. equity arrangement price, of and would to the earn-out which thus to part GAAP note else million down, earn-out GAAP was to share goes within earn-out Likewise, the this or liability value the goes the income. value and equal, post

to share targets additional However, there price extent the the be shares issued. achieved, are earn-out would

that to David mentioned a point Going back earlier.

a and cash our As prioritized management. cash have team, we management

closed we As cash million term $XXX.X early a that cash, able investment. exited cash you of with position result, XX million the the we in XX important we and transaction is It exited XXXX. our approximately short of we we that DSOs that $XXX XXXX XXXX. is And We highlight approximately XXXX. recall exited remained equivalents achieve strong. nearly were will of of had through October days cash raised This to when as days to half current

to of We while in a to our judicious investments capital will strong and business, with maintain order continue disciplined our remain in balance preserving sheet. conscious

some Now around turn share uncertain in will of delivered cost. guidance environment challenges XXXX, Despite year, outlook revenue full far results, accurately and to color expectation. we an let's last the exceeding for forecasting our exceptional where we the year the for

range Our revenues million environment $XX said, to $XX to rate guidance our reflects and growth on this XXXX. We a we growth business process a that is our and remain XX% the XXXX straightforward, takeaway representing million, in forecasting that rate bullish the not project With current we this. maintain be in between for to for for the year of full expect high XX% and full the is the year year. currently of

and cost. detail As to the will greater provide position preliminary various respect potential be we in drivers estimates the our play fine develops, and year out to with tune

a scale, bring our our contracts. enrollment in we to revenues of of dynamic quarter XXXX, timing worked effectively noted As of to able favor in this Well, current accelerated where the can first the in XXXX. $X.X profitability from of ago, limited vary due quarter at faster the bookings, quarter-to-quarter, around part a from through moment million final is we were revenue and in number

half of we the non-pharma a We also was nearly XX XXXX. in will XXXX traditionally two an The of studies two experienced of was have of in million not the studies the two COVID from larger that smaller cancellations QX on the and early which a do from impact result target, efficacy. company drug

a fourth managing meet revenue down and ramped relative were XX% percentage demand to and quarter the XXXX from our From cancellation quarter rates cost in to of up cancellation in first in impact COVID including with are the funnel the less point, known very two XX% month is previous growth than single the sales and cancellations. little this the digit standpoint, backlog is have only first At spend average. rate, we XX which quarters. pace COVID exposure industry of XXXX cancellations and Our of work, XXXX qualified of we on mid quarter

from previous As result, will our quarter XXXX a be considerably first margins the quarter. down

return to normalized to XXXX. expect progress a as of We And term profitability see margin long no more we change opportunity. level to we our throughout

Our the share million XXXX. for to approximately year count be basic full is expected XXX

at same. level. to are growth GAAP the we share Since most outstanding. quarter we in therefore, year we deemed million XXXX, pleased options and expect very end, delivered count adjusted and anticipate XXX we basic net anti-dilutive, every be had shares converted to in As would the summary, on the basis and loss be be upcoming the an of any we about having In year, a diluted with

be XXXX. would growth to We on comments. very bullish continue David to back trajectory At call to this in point, I the our like turn closing for

David Coman

and more XXXX Mike. XX, Science net business of you, revenue and achieved exceeded our grew tripled objectives. exceptional than Thank year all at or as XXX% We an our was bookings. goals we nearly

to have into technology growth public made partnerships our substantial repeat We more will value private gaining customers, capital delivers We toward that proof drive mentioned, XXXX. enhancements, and scale, sponsors, to with I transition eye a that from cancellations to significant points, the the raised allow continue model do keen long acknowledge the the and cash to of first want us on invest revenue help to our term global Mike proven to quarter. management impact the our profitability. growth two and and in margins in upcoming

recent is the of note our we XX of As quarter of month giving commentary to funnel on It's important of on we and typical expand continue this at limited expect cancellations these a guidance, [ph] and cause and in backlog the more these call first of two rate, sales to backlog, And our COVID profitability to cost will industry. our earnings commentary size larger to two exposure less are May. grow recency time. over offer inclusive cancellations that path cancellation we volatility and our at impact minimum the time. cancellations, To complete is our

As to execution speed the in a of continue we and trial make in clinical efficiency conduct. strides great business,

the of months. commitment benefit our development growth and investors, the in We all model, world. the the in of to coming We about on ahead. around Thank have all clinical the will We the the also We enthusiastic including next improvement for future. segment you improve ultimate of the disrupt patients XX who remain into fundamental you in look remains updating believe see vision trial believe strong. our have And that us significant continue the opportunity to to operating phase supported well forward mission, and the industry stakeholders, and we system to our standardize. our which continued outlook traditional the Science we for for very process

turn to and over open So to operator. questions we'll that, now with the it up

Operator

Our Charles question Instructions] comes [Operator Rhyee first with Cowen. from

line Your is open.

Charles Rhyee

Yeah. questions. taking the Thanks for Mike.

about ask cancellations. to wanted the Just

just I cancellation XX%. quarter, prior And your including think rate overall you clarify this was could to said the earlier if that than first quarter, XX%. averaged it you less

of backwards cancellation of a is impact? at at we a you right sort XXXX work kind the kind can first the quarter isolate call look So XX% results and of rate, it know, it roughly

Mike Zaranek

morning. Good Hi, Yeah. the question. Charles. Thanks for

I right. that's think

the period, cancellation call As XX% looked of had inclusive very cancellations about on XXXX, XX%. month of XX we trailing we and than outlined for low less be a the two in we rate it would today's

Charles Rhyee

Thanks. - revenue that I'm those 'XX? stage percent if we those sorry, having what what what guys? just in can't those in And two any 'XX sort in to over them up, with about And were was contracts, impact of contracts, revenue you What follow an think contribution, of the of timeframe? should or they development overall

Mike Zaranek

No, earlier non-pharma was from XXXX, in opportunity I of the think we one project opportunities or we as little That on a target. Sure. don't one. impact the that a minimal and so lifecycle was that a in one typically said,

and If project, entire overall you we look, of apart. for the the due lack pulled second of funding one that was to were which one,

further The bit in little ultimately was overall pulled lack second It progress. advanced of a its one was efficacy. to due

not… So

Charles Rhyee

Okay…

Mike Zaranek

Yeah…

Charles Rhyee

Okay…

Mike Zaranek

point, of funnel, the our not digit you pipeline sales mid COVID of the so whole look in if And there. us, front So opportunities COVID at little exposure very qualified represent this backlog. of a we lot have at single

Charles Rhyee

the a queue. back I'll great. jump right, in All lot. Thanks

Mike Zaranek

you. Thank

Operator

with question Markets. Capital from Lake Takkinen Street Frank next Our comes

Your line open. is

Frank Takkinen

off bit one XX, Thanks the little on like Mike. to $XXX as for It Hey, Honestly, maybe now. where backlog. be the - to looking as forward XXX. start a at the guide backlog guide it's How about conservative have my David. well feels backlog we thinking you questions. it the conversion? take million, wanted taking relates at even as with the Hey, should I

just on you of guys maybe a color So little what think about? bit

Mike Zaranek

I think, you a Yeah, end sorry, there of Sure. there Was the there? there at sort cut was follow up – out Frank.

Frank Takkinen

that. about sorry ahead. Go No,

Mike Zaranek

revenue in million or got able talked out a respect bookings, think of about profitability ways. things to able to projects, - By we I than the a really of you that it that were effectively certain first can period, seen the few projects No, And volatility we've having if And that $XX our based a $XX couple guide, benefit single work a project, execution with in about on the our we revenues, to where impacting we've one with forward completion of in think of quarter. we strong potentially past. the the volatility, and of the were million, produced QX, more activities. on faster pull QX, we a some both

the you forecasts If for about $XX that of can the we've year overall of the that we ago end the the after in revenue had coverage what I the XX% is time. at prepared outlined think the backlog phase about we have cancellations had previously, February, for as large quarter, at those of the million And of what in more year I period, talked that say end at accounting covered we full two XXX, first of we than the look that remarks, revenue XXXX. for and backlog

Frank Takkinen

been Okay, there's being kind as then about some it's think second spot, company and to markets. comment qualified that's of headwinds your maybe I helpful. the RFP sales on, related at one, my end history. spoke just conversation strongest you the And Maybe to funnel volume been just

it there anything headwinds current market that of dynamics, that how to nature? So out relates and to feeling maybe speak if how about you're or any

David Coman

Okay. how calling and It's Thanks doing? Hey, David. you for in Frank.

Frank Takkinen

Thanks. good. Very

David Coman

Yes.

So it's overall, today been. highest, our pipeline ever is - its

that. So we're about excited super

pipeline, context important bit. on other a think I the think composition the is is I little

able exciting. than than, deals - model greater bring is opportunities So targeting, really works. we're think proof And lot I to million you a says that seeing and the the model the about which of that on more we're table know, we're in. the, the $XX It more the actually you know,

dynamic. a So that's good really

throughout the if from those the were in companies. repeat pharma of and were one saw large thirds at a and to about we closed what is, mid-size other two buyers, look we majority you year The take our from overall of XXXX, that deals

look all for those us. really strong really I So dynamics think

Frank Takkinen

questions perfect. and for my there. progress. on taking Thanks I'll the congrats Cool, stop

David Coman

Thanks a lot, Frank.

Operator

this like to the any no Instructions] over [Operator at I'd remarks. turn There to closing David are questions for back further time. call

David Coman

Thanks.

So strong appreciate on XXXX. execute in guys year us We're been excited in to of of about joining to for our us It ability the in know, a plan, we've was accomplish you able really terms value proof real you today. and what go delivering of to very now in that for provide sponsors, able our the points terms results more upon terms in results. our building organization, excited we're to them about delivering of commercial with being the to market with. terms We're

As have and far category really strategy. pipeline We're we're to the we virtually the growth about XXXX, us that limits as as exceeding. our of back in future. execute in noted, our you end sits we we continue to before the some have exceeded excited of look we that XXXX, them [ph] every here in about excited And our

for So with guys you that, much and thank call I so will joining. end the

Operator

the conclude program. does This

have Everyone great disconnect. now day. may You a

Science 37 (SNCE) 22 Mar 222021 Q4 Earnings call transcript