Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2023 | May 02, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | SYNEOS HEALTH, INC. | |
Entity Central Index Key | 0001610950 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Shell Company | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity File Number | 001-36730 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 27-3403111 | |
Entity Address, Address Line One | 1030 Sync Street | |
Entity Address, City or Town | Morrisville | |
Entity Address, State or Province | NC | |
Entity Address, Postal Zip Code | 27560-5468 | |
City Area Code | 919 | |
Local Phone Number | 876-9300 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Title of 12(b) Security | Class A Common Stock, $0.01 par value per share | |
Trading Symbol | SYNH | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 103,647,164 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Revenue | $ 1,356,800 | $ 1,336,253 |
Costs and operating expenses: | ||
Direct costs (exclusive of depreciation and amortization) | 1,088,549 | 1,044,432 |
Selling, general, and administrative expenses | 161,517 | 140,166 |
Restructuring and other costs | 84,687 | 15,557 |
Depreciation | 23,173 | 20,579 |
Amortization | 38,414 | 41,623 |
Total operating expenses | 1,396,340 | 1,262,357 |
(Loss) income from operations | (39,540) | 73,896 |
Total other expense, net: | ||
Interest income | (528) | (3) |
Interest expense | 26,787 | 15,765 |
Other expense, net | 9,363 | 4,642 |
Total other expense, net | 35,622 | 20,404 |
(Loss) income before provision for income taxes | 75,162 | (53,492) |
Income tax (benefit) expense | (3,013) | 7,316 |
Net (loss) income | $ (72,149) | $ 46,176 |
(Loss) earnings per share: | ||
Basic (USD per share) | $ (0.70) | $ 0.45 |
Diluted (USD per share) | $ (0.70) | $ 0.44 |
Weighted average common shares outstanding: | ||
Basic (in shares) | 103,326 | 103,665 |
Diluted (in shares) | 103,326 | 104,410 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net (loss) income | $ (72,149) | $ 46,176 |
Unrealized (loss) gain on derivative instruments, net of income tax (benefit) expense of $(3,118) and $3,420, respectively | (9,439) | 9,640 |
Foreign currency translation adjustments, net of income tax benefit of $(9) and $(2,711), respectively | 18,589 | (17,386) |
Comprehensive (loss) income | $ (62,999) | $ 38,430 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Income tax expense related to unrealized gain on derivative instruments recorded in other comprehensive loss | $ (3,118) | $ 3,420 |
Other comprehensive income (loss), foreign currency translation adjustment, tax | $ (9) | $ (2,711) |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash, cash equivalents, and restricted cash | $ 111,055 | $ 112,004 |
Accounts receivable and unbilled services, net | 1,650,903 | 1,645,162 |
Prepaid expenses and other current assets | 184,320 | 186,770 |
Total current assets | 1,946,278 | 1,943,936 |
Property and equipment, net | 245,672 | 264,295 |
Operating lease right-of-use assets | 110,947 | 172,794 |
Goodwill | 4,907,070 | 4,897,518 |
Intangible assets, net | 644,843 | 680,863 |
Deferred income tax assets | 48,183 | 50,677 |
Other long-term assets | 195,783 | 189,135 |
Total assets | 8,098,776 | 8,199,218 |
Current liabilities: | ||
Accounts payable | 145,967 | 118,621 |
Accrued expenses | 618,091 | 614,200 |
Deferred revenue | 859,381 | 923,875 |
Current portion of operating lease obligations | 42,718 | 43,984 |
Current portion of finance lease obligations | 21,743 | 24,011 |
Total current liabilities | 1,687,900 | 1,724,691 |
Long-term debt | 2,611,580 | 2,611,166 |
Operating lease long-term obligations | 165,554 | 175,568 |
Finance lease long-term obligations | 38,421 | 44,124 |
Deferred income tax liabilities | 74,903 | 92,155 |
Other long-term liabilities | 65,947 | 56,513 |
Total liabilities | 4,644,305 | 4,704,217 |
Commitments and contingencies (Note 15) | ||
Shareholders’ equity: | ||
Preferred stock, $0.01 par value; 30,000 shares authorized, 0 shares issued and outstanding as of March 31, 2023 and December 31, 2022 | 0 | 0 |
Common stock, $0.01 par value; 600,000 shares authorized, 103,641 and 102,911 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively | 1,036 | 1,029 |
Additional paid-in capital | 3,482,614 | 3,460,152 |
Accumulated other comprehensive loss, net of taxes | (124,724) | (133,874) |
Retained earnings | 95,545 | 167,694 |
Total shareholders’ equity | 3,454,471 | 3,495,001 |
Total liabilities and shareholders’ equity | $ 8,098,776 | $ 8,199,218 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Preferred stock par value (USD per share) | $ 0.01 | $ 0.01 |
Preferred stock shares authorized (in shares) | 30,000,000 | 30,000,000 |
Preferred stock shares issued (in shares) | 0 | 0 |
Preferred stock shares outstanding (in shares) | 0 | 0 |
Class A common stock | ||
Common stock par value (USD per share) | $ 0.01 | $ 0.01 |
Common stock shares authorized (in shares) | 600,000,000 | 600,000,000 |
Common stock shares issued (in shares) | 103,641,000 | 102,911,000 |
Common stock shares outstanding (in shares) | 103,641,000 | 102,911,000 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (72,149) | $ 46,176 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depreciation and amortization | 61,587 | 62,202 |
Share-based compensation | 18,692 | 17,333 |
Provision for (recovery from) doubtful accounts | 374 | (108) |
(Benefit from) provision for deferred income taxes | (12,052) | 1,000 |
Foreign currency transaction adjustments | 4,898 | 434 |
Other non-cash items | 17,748 | (1,945) |
Changes in operating assets and liabilities, net of effect of acquisitions: | ||
Accounts receivable, unbilled services, and deferred revenue | (66,855) | (49,905) |
Accounts payable and accrued expenses | 33,825 | 39,650 |
Operating lease assets and liabilities | 51,085 | (1,752) |
Other assets and liabilities | (6,729) | (42,198) |
Net cash provided by operating activities | 30,424 | 70,887 |
Cash flows from investing activities: | ||
Payments related to acquisitions of businesses, net of cash acquired | 0 | (1,727) |
Purchases of property and equipment | (27,509) | (23,474) |
Investments in unconsolidated affiliates | (113) | (296) |
Net cash used in investing activities | (27,622) | (25,497) |
Cash flows from financing activities: | ||
Proceeds from revolving line of credit | 55,000 | 130,000 |
Repayments of revolving line of credit | (55,000) | 0 |
Payments of finance leases | (3,671) | (2,193) |
Payments for repurchases of Class A common stock | 0 | (149,961) |
Proceeds from exercises of stock options | 11,962 | 11,483 |
Payments related to tax withholdings for share-based compensation | (8,092) | (25,901) |
Net cash provided by (used in) financing activities | 199 | (36,572) |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (3,950) | 3,858 |
Net change in cash, cash equivalents, and restricted cash | (949) | 12,676 |
Cash, cash equivalents, and restricted cash - beginning of period | 112,004 | 106,475 |
Cash, cash equivalents, and restricted cash - end of period | $ 111,055 | $ 119,151 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Total | Common Stock Class A common stock | Additional Paid-in Capital | Additional Paid-in Capital Class A common stock | Accumulated Other Comprehensive Loss | Retained earnings (accumulated Deficit) | Retained earnings (accumulated Deficit) Class A common stock |
Balance at beginning of period at Dec. 31, 2021 | $ 3,412,555 | $ 1,038 | $ 3,474,088 | $ (49,618) | $ (12,953) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Repurchases of common stock | 19 | $ 64,092 | $ 85,850 | ||||
Issuances of common stock | 7 | (16,805) | |||||
Share-based compensation | 17,333 | ||||||
Unrealized (loss) gain on derivative instruments, net of taxes | 9,640 | ||||||
Foreign currency translation adjustment, net of taxes | 17,386 | (17,386) | |||||
Net (loss) income | 46,176 | 46,176 | |||||
Balance at end of period at Mar. 31, 2022 | 3,301,559 | 1,026 | 3,410,524 | (57,364) | (52,627) | ||
Balance at beginning of period at Dec. 31, 2022 | 3,495,001 | 1,029 | 3,460,152 | (133,874) | 167,694 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Repurchases of common stock | |||||||
Issuances of common stock | 7 | $ 3,770 | |||||
Share-based compensation | 18,692 | ||||||
Unrealized (loss) gain on derivative instruments, net of taxes | (9,439) | ||||||
Foreign currency translation adjustment, net of taxes | (18,589) | 18,589 | |||||
Net (loss) income | (72,149) | (72,149) | |||||
Balance at end of period at Mar. 31, 2023 | $ 3,454,471 | $ 1,036 | $ 3,482,614 | $ (124,724) | $ 95,545 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 1. Basis of Presentation Nature of Operations Syneos Health, Inc. (the “Company”) is a global provider of end-to-end biopharmaceutical outsourcing solutions. The Company operates under two reportable segments, Clinical Solutions and Commercial Solutions, and derives its revenue through a suite of services designed to enhance its customers’ ability to successfully develop, launch, and market their products. The Company offers its solutions on both a standalone and integrated basis with biopharmaceutical development and commercialization services ranging from Phase I to IV clinical trial services to services associated with the commercialization of biopharmaceutical products. The Company’s customers include small, mid-sized, and large companies in the biopharmaceutical, biotechnology, and medical device industries. Unaudited Interim Financial Information The Company prepared the accompanying unaudited condensed consolidated financial statements in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information. The significant accounting policies followed by the Company for interim financial reporting are consistent with the accounting policies followed for annual financial reporting. The unaudited condensed consolidated financial statements, in management’s opinion, include all adjustments of a normal recurring nature necessary for a fair presentation. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the “2022 Form 10-K”), filed with the Securities and Exchange Commission on February 16, 2023. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the full year ending December 31, 2023 or any other future period. The unaudited condensed consolidated balance sheet as of December 31, 2022 is derived from the amounts in the audited consolidated balance sheet included in the 2022 Form 10-K. |
Financial Statement Details
Financial Statement Details | 3 Months Ended |
Mar. 31, 2023 | |
Investments Debt And Equity Securities [Abstract] | |
Financial Statement Details | 2. Financial Statement Details Cash, Cash Equivalents, and Restricted Cash Certain of the Company’s subsidiaries participate in a notional cash pooling arrangement to manage global liquidity requirements. As part of a master netting arrangement, the participants combine their cash balances in pooling accounts at the same financial institution with the ability to offset bank overdrafts of one participant against positive cash account balances held by another participant. Under the terms of the master netting arrangement, the financial institution has the right, ability, and intent to offset a positive balance in one account against an overdrawn amount in another account. Amounts in each of the accounts are unencumbered and unrestricted with respect to use. As such, the net cash balance related to this pooling arrangement is included in cash, cash equivalents, and restricted cash in the accompanying condensed consolidated balance sheets. The Company’s net cash pool position consisted of the following (in thousands): March 31, 2023 December 31, 2022 Gross cash position $ 526,949 $ 283,337 Less: cash borrowings ( 526,520 ) ( 283,029 ) Net cash position $ 429 $ 308 Accounts Receivable and Unbilled Services, net Accounts receivable and unbilled services (including contract assets), net of allowance for doubtful accounts, consisted of the following (in thousands): March 31, 2023 December 31, 2022 Accounts receivable billed $ 879,249 $ 898,839 Accounts receivable unbilled 254,274 227,210 Contract assets 529,427 531,234 Less: Allowance for doubtful accounts ( 12,047 ) ( 12,121 ) Accounts receivable and unbilled services, net $ 1,650,903 $ 1,645,162 Accounts Receivable Factoring Arrangement The Company has an accounts receivable factoring agreement to sell certain eligible unsecured trade accounts receivable, at its option, without recourse, to an unrelated third-party financial institution for cash. For the three months ended March 31, 2023 and 2022, the Company factored $ 20.4 million and $ 34.1 million, respectively, of trade accounts receivable on a non-recourse basis and received $ 20.2 million and $ 34.0 million, respectively, in cash proceeds from the sale. The fees associated with thes e transactions were insignificant. Goodwill The changes in the carrying amount of goodwill by segment for the three months ended March 31, 2023 were as follows (in thousands): Clinical Commercial Total Balance as of December 31, 2022 $ 3,405,877 $ 1,491,641 $ 4,897,518 Impact of foreign currency translation 8,165 1,387 9,552 Balance as of March 31, 2023 $ 3,414,042 $ 1,493,028 $ 4,907,070 (a) No impairment of goodwill was recorded for the three months ended March 31, 2023 . Accumulated Other Comprehensive Loss, Net of Taxes Accumulated other comprehensive loss, net of taxes, consisted of the following (in thousands): Three Months Ended 2023 2022 Accumulated other comprehensive loss, net of taxes beginning balance $ ( 133,874 ) $ ( 49,618 ) Derivative instruments: Beginning balance 5,610 ( 2,621 ) Other comprehensive (loss) income before reclassifications ( 1,779 ) 8,612 Reclassification adjustments ( 7,660 ) 1,028 Ending balance ( 3,829 ) 7,019 Foreign currency translation: Beginning balance ( 139,484 ) ( 46,997 ) Other comprehensive income (loss) before reclassifications 18,589 ( 17,386 ) Ending balance ( 120,895 ) ( 64,383 ) Accumulated other comprehensive loss, net of taxes ending balance $ ( 124,724 ) $ ( 57,364 ) Changes in accumulated other comprehensive loss consisted of the following (in thousands): Three Months Ended 2023 2022 Unrealized (loss) gain on derivative instruments: Unrealized (loss) gain during period, before taxes $ ( 2,366 ) $ 11,667 Income tax (benefit) expense ( 587 ) 3,055 Unrealized (loss) gain during period, net of taxes ( 1,779 ) 8,612 Reclassification adjustment, before taxes ( 10,191 ) 1,393 Income tax (benefit) expense ( 2,531 ) 365 Reclassification adjustment, net of taxes ( 7,660 ) 1,028 Total unrealized (loss) gain on derivative instruments, net of taxes ( 9,439 ) 9,640 Foreign currency translation adjustment: Foreign currency translation adjustment, before taxes 18,580 ( 20,097 ) Income tax benefit ( 9 ) ( 2,711 ) Foreign currency translation adjustment, net of taxes 18,589 ( 17,386 ) Total other comprehensive income (loss), net of taxes $ 9,150 $ ( 7,746 ) Other Expense, Net Other expense, net consisted of the following (in thousands): Three Months Ended 2023 2022 Net realized foreign currency loss $ 2,652 $ 2,456 Net unrealized foreign currency loss 4,898 434 Equity investment loss 550 — Other, net 1,263 1,752 Total other expense, net $ 9,363 $ 4,642 |
Long-Term Debt Obligations
Long-Term Debt Obligations | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Long-Term Debt Obligations | . Long-Term Debt Obligations The Company’s debt obligations consisted of the following (in thousands): March 31, 2023 December 31, 2022 Secured Debt Term A Facility due November 2027 $ 1,350,000 $ 1,350,000 Revolver due November 2027 120,993 120,993 Accounts receivable financing agreement due October 2025 550,000 550,000 Total secured debt 2,020,993 2,020,993 Unsecured Debt Senior notes due January 2029 (the “Notes”) 600,000 600,000 Total debt obligations 2,620,993 2,620,993 Less: Term loan original issuance discount ( 3,157 ) ( 3,322 ) Less: Unamortized deferred issuance costs ( 6,256 ) ( 6,505 ) Total long-term debt $ 2,611,580 $ 2,611,166 Credit Agreement The Company is party to an Amended & Restated Credit Agreement (“A&R Credit Agreement”) that matures in November 2027 and includes a $ 1.35 billion term loan A facility (“Term A Facility”) and a $ 1.00 billion revolving credit facility (the “Revolver”). As of March 31, 2023 , the interest rate on the Term A Facility was 6.16 %. Revolver and Letters of Credit The Revolver includes letters of credit (“LOCs”) with a sublimit of $ 150.0 million . As of March 31, 2023, there were $ 121.0 million of outstanding borrowings under the Revolver and $ 14.2 million of LOCs outstanding, leaving $ 864.8 million of available borrowings under the Revolver, including $ 135.8 million available for LOCs. As of March 31, 2023 , the interest rate on the Revolver was 6.15 %. The Notes The Notes bear interest at a rate of 3.625 % per annum, payable semi-annually in arrears that began on July 15, 2021, and will mature on January 15, 2029 . Accounts Receivable Financing Agreement The Company has an accounts receivable financing agreement (the “Receivables Financing Agreement”) with a termination date of October 2025, unless terminated earlier pursuant to its terms. As of March 31, 2023, the Company had $ 550.0 million of outstanding borrowings under this agreement, which were recorded in long-term debt on the accompanying condensed consolidated balance sheet. There was no remaining borrowing capacity available under this agreement as of March 31, 2023. As of March 31, 2023 , the interest rate on the accounts receivable financing agreement was 5.81 % . Maturities of Debt Obligations As of March 31, 2023, the contractual maturities of the Company’s debt obligations (excluding finance leases) were as follows (in thousands): Principal Remainder of 2023 $ — 2024 33,750 2025 617,500 2026 67,500 2027 1,302,243 2028 and thereafter 600,000 Less: Term loan original issuance discount ( 3,157 ) Less: Unamortized deferred issuance costs ( 6,256 ) Total $ 2,611,580 |
Derivatives
Derivatives | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivatives | . Derivatives Interest Rate Swaps The Company has entered into various interest rate swaps to mitigate its exposure to changes in interest rates on its variable rate debt. In March 2020, the Company entered into interest rate swaps with multiple counterparties. The interest rate swaps had an initial aggregate notional value of $ 549.2 million that increased to $ 1.42 billion on June 30, 2021, an effective date of March 31, 2020, and expired on March 31, 2023. In March 2023, the Company entered into interest rate swaps with multiple counterparties. The interest rate swaps had an initial aggregate notional value of $ 650.0 million , an effective date of March 31, 2023, and will expire on March 31, 2026. Fair Values The fair values of the Company’s derivative financial instruments and the line items on the accompanying condensed consolidated balance sheets to which they were recorded were as follows (in thousands): Balance Sheet Classification March 31, 2023 December 31, 2022 Interest rate swaps - current Prepaid expenses and other current assets $ 5,082 $ 10,073 Fair value of derivative assets $ 5,082 $ 10,073 Interest rate swaps - non-current Other long-term liabilities $ 7,567 $ — Fair value of derivative liabilities $ 7,567 $ — |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 5. Fair Value Measurements Assets and Liabilities Carried at Fair Value As of March 31, 2023 and December 31, 2022, the Company’s financial assets and liabilities carried at fair value included cash and cash equivalents, restricted cash, trading securities, accounts receivable, unbilled services (including contract assets), accounts payable, accrued expenses, deferred revenue, contingent obligations, liabilities under the accounts receivable financing agreement, and derivative instruments. The fair values of cash and cash equivalents, restricted cash, accounts receivable, unbilled services (including contract assets), accounts payable, accrued expenses, deferred revenue, and the liabilities under the accounts receivable financing agreement approximate their respective carrying amounts because of the liquidity and short-term nature of these financial instruments. Financial Instruments Subject to Recurring Fair Value Measurements As of March 31, 2023, the fair values of the major classes of the Company’s assets and liabilities measured at fair value on a recurring basis were as follows (in thousands): Level 1 Level 2 Level 3 Investments Total Assets: Trading securities (a) $ 21,895 $ — $ — $ — $ 21,895 Partnership interests (b) — — — 14,930 14,930 Derivative instruments (c) — 5,082 — — 5,082 Total assets $ 21,895 $ 5,082 $ — $ 14,930 $ 41,907 Liabilities: Derivative instruments (c) $ — $ 7,567 $ — $ — $ 7,567 Contingent obligations related to acquisitions (d) — — 16,100 — 16,100 Total liabilities $ — $ 7,567 $ 16,100 $ — $ 23,667 As of December 31, 2022, the fair values of the major classes of the Company’s assets and liabilities measured at fair value on a recurring basis were as follows (in thousands): Level 1 Level 2 Level 3 Investments Total Assets: Trading securities (a) $ 20,465 $ — $ — $ — $ 20,465 Partnership interests (b) — — — 15,367 15,367 Derivative instruments (c) — 10,073 — — 10,073 Total assets $ 20,465 $ 10,073 $ — $ 15,367 $ 45,905 Liabilities: Contingent obligations related to acquisitions (d) — — 16,100 — 16,100 Total liabilities $ — $ — $ 16,100 $ — $ 16,100 (a) Represents the fair value of investments in mutual funds based on quoted market prices that are used to fund the liability associated with the Company’s deferred compensation plan. (b) The Company has committed to invest $ 21.5 million as a limited partner in two private equity funds. The private equity funds invest in opportunities in the healthcare and life sciences industry. As of March 31, 2023 , the Company’s remaining unfunded commitment in the private equity funds was $ 6.9 million. The Company holds minor ownership interests (less than 3 %) in each of the private equity funds and has determined that it does not exercise significant influence over the private equity funds’ operating and finance activities. As the private equity funds do not have readily determinable fair values, the Company has estimated the fair values using each fund’s Net Asset Value, the amount by which the value of all assets exceeds all debt and liabilities, in accordance with Accounting Standards Codification (“ASC”) Topic 946, Financial Services – Investment Companies . (c) Represents the fair value of interest rate swap arrangements (see “Note 4 – Derivatives” for further information). (d) Represents the fair value of contingent consideration obligations related to acquisitions. The fair values of these liabilities are determined based on the Company’s best estimate of the probable timing and amount of settlement. The following table presents a reconciliation of changes in the carrying amount of contingent obligations classified as Level 3 for the three months ended March 31, 2023 (in thousands): Balance as of December 31, 2022 $ 16,100 Additions — Changes in fair value recognized in earnings — Payments — Balance as of March 31, 2023 $ 16,100 During the three months ended March 31, 2023 , there were no transfers of assets or liabilities between Level 1, Level 2, or Level 3 fair value measurements. Financial Instruments Subject to Non-Recurring Fair Value Measurements Certain assets, including goodwill and identifiable intangible assets, are carried on the accompanying condensed consolidated balance sheets at cost and, subsequent to initial recognition, are measured at fair value on a non-recurring basis when certain identified events or changes in circumstances that may have a significant adverse effect on the carrying values of these assets occur. These assets are classified as Level 3 fair value measurements within the fair value hierarchy. Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate a triggering event has occurred. Intangible assets are tested for impairment upon the occurrence of certain triggering events. As of March 31, 2023 and December 31, 2022, assets carried on the accompanying condensed consolidated balance sheets and not remeasured to fair value on a recurring basis totaled $ 5.56 billion and $ 5.59 billion , respectively. Fair Value Disclosures for Financial Instruments Not Carried at Fair Value The estimated fair values of the Term A Facility and the Notes are determined based on the price that the Company would have had to pay to settle the liabilities. As these liabilities are not actively traded, they are classified as Level 2 fair value measurements. The estimated fair values of the Company’s Term A Facility and the Notes were as follows (in thousands): March 31, 2023 December 31, 2022 Carrying Estimated Carrying Estimated Term A Facility due November 2027 $ 1,346,843 $ 1,329,750 $ 1,346,678 $ 1,329,750 Senior notes due January 2029 600,000 501,000 600,000 484,500 (a) The carrying value of the Term A Facility is shown net of original issue discounts. |
Restructuring and Other Costs
Restructuring and Other Costs | 3 Months Ended |
Mar. 31, 2023 | |
Restructuring And Related Activities [Abstract] | |
Restructuring and Other Costs | . Restructuring and Other Costs During the three months ended March 31, 2023 and 2022 , the Company incurred employee severance and benefit costs, leased facility closure and related costs, and other costs related to its restructuring activities. The costs incurred during the current year were primarily related to the Company's real estate optimization initiative to close or reduce office space that is no longer being utilized. This includes $ 54.7 million of accelerated amortization of operating lease right-of-use assets and $ 18.0 million of accelerated depreciation of property and equipment, both of which are non-cash expenses. The costs incurred during the prior year were primarily related to the Company’s margin enhancement initiatives and specific actions focused on streamlining the operations of its Clinical Solutions segment to optimize efficiency and enhance the delivery of customer projects. The Company expects to continue to incur costs related to its business transformation initiatives, including the potential outsourcing of certain administrative functions, during the remainder of 2023 and beyond as the Company continues the ongoing evaluations of its global workforce and facilities infrastructure needs to improve customer engagement, increase innovation, and achieve operating efficiencies. Restructuring and other costs consisted of the following (in thousands): Three Months Ended 2023 2022 Employee severance and benefit costs $ 10,180 $ 14,820 Leased facility closure and related costs 74,313 ( 319 ) Other costs 194 1,056 Total restructuring and other costs $ 84,687 $ 15,557 Accrued Restructuring Liabilities The following table summarizes activity related to employee severance and benefit costs within accrued restructuring liabilities for the three months ended March 31, 2023 (in thousands): Balance as of December 31, 2022 $ 12,804 Expenses incurred (a) 10,180 Payments ( 10,002 ) Balance as of March 31, 2023 $ 12,982 (a) The amount of expenses incurred for the three months ended March 31, 2023 excludes $ 0.2 million of other costs that were paid through accounts payable and $ 74.3 million of leased facility closure and related costs that are primarily reflected as reductions of operating lease right-of-use assets and property and equipment, net on the accompanying condensed consolidated balance sheet. The Company expects the employee severance and benefit costs accrued as of March 31, 2023 will be paid within the next twelve months and are included within accrued expenses on the accompanying condensed consolidated balance sheet |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Shareholders' Equity | . Shareholders’ Equity Shares Outstanding Shares of Class A common stock outstanding were as follows (in thousands): Three Months Ended 2023 2022 Class A common stock shares, beginning balance 102,911 103,764 Repurchases of Class A common stock — ( 1,929 ) Issuances of Class A common stock 730 723 Class A common stock shares, ending balance 103,641 102,558 Stock Repurchase Programs On May 25, 2022, the Company’s Board of Directors (the “Board”) authorized the repurchase of up to an aggregate of $ 350.0 million of the Company’s Class A common stock, par value $ 0.01 per share, to be executed from time to time in open market transactions effected through a broker at prevailing market prices, in block trades, or through privately negotiated transactions through December 31, 2024 (the “2022 Stock Repurchase Program”). The 2022 Stock Repurchase Program replaced a prior repurchase program approved on November 17, 2020, that took effect on January 1, 2021. The 2022 Stock Repurchase Program does not obligate the Company to repurchase any particular amount of the Company’s Class A common stock, and may be modified, extended, suspended, or discontinued at any time. The timing and amount of repurchases will be determined by the Company’s management based on a variety of factors such as the market price of the Company’s Class A common stock, the Company’s corporate cash requirements, and overall market conditions. The 2022 Stock Repurchase Program is subject to applicable legal requirements, including federal and state securities laws and applicable Nasdaq rules. The Company may also repurchase shares of its Class A common stock pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, which would permit shares of the Company’s Class A common stock to be repurchased when the Company might otherwise be precluded from doing so by law. During the three months ended March 31, 2023 , there were no repurchases under the 2022 Stock Repurchase Program. As of March 31, 2023 , the Company had remaining authorization to repurchase up to $ 350.0 million of shares of its Class A common stock under the 2022 Stock Repurchase Program. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | . (Loss) Earnings Per Share The following table provides a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations (in thousands, except per share data): Three Months Ended 2023 2022 Numerator: Net (loss) income $ ( 72,149 ) $ 46,176 Denominator: Basic weighted average common shares outstanding 103,326 103,665 Effect of dilutive securities: Stock options and other awards under deferred share-based compensation programs — 745 Diluted weighted average common shares outstanding 103,326 104,410 (Loss) earnings per share: Basic $ ( 0.70 ) $ 0.45 Diluted $ ( 0.70 ) $ 0.44 Potential common shares outstanding that are considered anti-dilutive are excluded from the computation of diluted (loss) earnings per share. Potential common shares related to stock options and other awards under share-based compensation programs may be determined to be anti-dilutive based on the application of the treasury stock method. Potential common shares are also considered anti-dilutive in periods when the Company incurs a net loss. The number of potential shares outstanding that were anti-dilutive and therefore excluded from the computation of diluted (loss) earnings per share, weighted for the portion of the period they were outstanding, were as follows (in thousands): Three Months Ended 2023 2022 Anti-dilutive stock options and other awards 1,311 165 Anti-dilutive stock options and other awards under share-based compensation programs excluded based on reporting a net loss for the period 438 — Total Class A common stock equivalents excluded from diluted (loss) earnings per share 1,749 165 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | . Income Taxes Income Tax (Benefit) Expense For the three months ended March 31, 2023, the Company recorded an income tax benefit of $ 3.0 million on a pre-tax loss of $ 75.2 million . Income tax benefit for the three months ended March 31, 2023 included discrete tax expense of $ 5.6 million, primarily related to tax shortfalls from share-based compensation. The effective tax rate for the three months ended March 31, 2023 , excluding discrete items, varied from the United States (“U.S.”) federal statutory income tax rate of 21.0 % primarily due to foreign tax credits, foreign income inclusions such as the Global Intangible Low-Taxed Income (“GILTI”) provisions, and research and development credits. For the three months ended March 31, 2022, the Company recorded income tax expense of $ 7.3 million on pre-tax income of $ 53.5 million . Income tax expense for the three months ended March 31, 2022 included a discrete tax benefit of $ 6.1 million, primarily related to excess tax benefits from share-based compensation. The effective tax rate for the three months ended March 31, 2022 , excluding discrete items, varied from the U.S. federal statutory income tax rate of 21.0 % primarily due to foreign income inclusions such as the GILTI provisions, state and local taxes on U.S. income, and research and development credits. Unrecognized Tax Benefits The Company’s gross unrecognized tax benefits, exclusive of associated interest and penalties, were $ 19.4 million and $ 16.8 million as of March 31, 2023 and December 31, 2022 , respectively. The increase of $ 2.6 million was primarily due to new positions related to prior years. The Company believes it is reasonably possible that its unrecognized tax benefits may decrease by approximately $ 3.4 million within the next 12 months as a result of lapses in statutes of limitations. Tax Returns under Audit The Company is not currently under any U.S. federal income tax audits, however, income tax returns are under examination by tax authorities in several state and foreign jurisdictions. The Company’s federal and state tax filings are open to investigations in numerous years due to net operating loss carryforwards. Additionally, the Company currently has an ongoing examination for tax years 2014 to 2020 in the United Kingdom. The United Kingdom is the jurisdiction with the Company’s largest foreign operations. The Company believes that its reserve for uncertain tax positions is adequate to cover existing risks or exposures related to all open tax years and jurisdictions. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2023 | |
Revenue From Contract With Customer [Abstract] | |
Revenue from Contract with Customers | 10. Revenue from Contracts with Customers Unsatisfied Performance Obligations As of March 31, 2023, the total aggregate transaction price allocated to the unsatisfied performance obligations under contracts with contract terms greater than one year and that are not accounted for as a series pursuant to ASC Topic 606, Revenue from Contracts with Customers and all the related amendments was $ 5.68 billion . This amount includes revenue associated with reimbursable out-of-pocket expenses. The Company expects to recognize revenue over the remaining contract term of the individual projects, with contract terms generally ranging from one to five years . The amount of unsatisfied performance obligations is presented net of any constraints and, as a result, is lower than the potential contractual revenue. The contracts excluded due to constraints include contracts that do not commence within a certain period of time or that require the Company to undertake numerous activities to fulfill these performance obligations, including various activities that are outside of the Company’s control. Timing of Billing and Performance During the three months ended March 31, 2023, the Company recognized approximately $ 382.6 million of revenue that was included in the deferred revenue balance at the beginning of the respective period. During the three months ended March 31, 2023, there were reductions of approximately $ 19.6 million in the Company’s revenue recognized related to performance obligations partially satisfied in previous periods. The gross and net amounts of revenue recognized solely from changes in estimates were not material. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | 11. Segment Information The Company is managed through two reportable segments: Clinical Solutions and Commercial Solutions. Each reportable segment consists of multiple service offerings that, when combined, create a leading fully integrated biopharmaceutical solutions organization built to accelerate customer success. The Company translates unique clinical, medical affairs and commercial insights into outcomes to address modern market realities. Clinical Solutions offers comprehensive global services for the development of diagnostics, drugs, biologics, devices, and digital therapeutics that span Phase I to IV of clinical development. The segment is organized around clinical pharmacology and bioanalytical services, workforce deployment, full-service clinical studies, real world evidence, and consulting. This segment offers individual services including regulatory consulting, project management, protocol development, investigational site recruitment, clinical monitoring, technology-enabled patient recruitment and engagement, clinical home health services, clinical trial diversity, biometrics, and regulatory affairs; all across a comprehensive range of therapeutic areas. Commercial Solutions provides the pharmaceutical, biotechnology, and healthcare industries with commercialization services, including deployment solutions, communications solutions (public relations, advertising, and medical communications), and consulting services. The Company’s Chief Operating Decision Maker (the “CODM”) reviews segment performance and allocates resources based upon segment revenue and (loss) income from operations. Inter-segment revenue is eliminated from the segment reporting provided to the CODM and is not included in the segment revenue presented in the table below. Certain costs are not allocated to the Company’s reportable segments and are reported as general corporate expenses. These costs primarily consist of share-based compensation, general operating expenses associated with the Board and the Company’s senior leadership, finance, investor relations, and internal audit functions, and transaction, integration-related, and other expenses. The Company does not allocate depreciation, amortization, asset impairment charges, or restructuring and other costs to its segments. Additionally, the CODM reviews the Company’s assets on a consolidated basis and does not allocate assets to its reportable segments for purposes of assessing segment performance or allocating resources. Information about reportable segment operating results was as follows (in thousands): Three Months Ended 2023 2022 Revenue: Clinical Solutions $ 1,013,665 $ 1,018,370 Commercial Solutions 343,135 317,883 Total revenue 1,356,800 1,336,253 Segment direct costs: Clinical Solutions 787,388 774,668 Commercial Solutions 290,639 260,965 Total segment direct costs 1,078,027 1,035,633 Segment selling, general, and administrative expenses: Clinical Solutions 87,561 89,902 Commercial Solutions 22,124 21,735 Total segment selling, general, and administrative expenses 109,685 111,637 Segment operating income: Clinical Solutions 138,716 153,800 Commercial Solutions 30,372 35,183 Total segment operating income 169,088 188,983 Direct costs and operating expenses not allocated to segments: Share-based compensation included in direct costs 10,522 8,799 Share-based compensation included in selling, general, and administrative expenses 8,170 8,534 Corporate selling, general, and administrative expenses 43,662 19,995 Restructuring and other costs 84,687 15,557 Depreciation and amortization 61,587 62,202 Total (loss) income from operations $ ( 39,540 ) $ 73,896 |
Operations by Geographic Locati
Operations by Geographic Location | 3 Months Ended |
Mar. 31, 2023 | |
Segments Geographical Areas [Abstract] | |
Operations by Geographic Location | 12. Operations by Geographic Location The following table summarizes total revenue by geographic area (in thousands, all intercompany transactions have been eliminated): Three Months Ended 2023 2022 Revenue: North America (a) $ 834,785 $ 781,654 Europe, Middle East, and Africa 320,999 355,593 Asia-Pacific 164,987 160,803 Latin America 36,029 38,203 Total revenue $ 1,356,800 $ 1,336,253 (a) Revenue for the North America region includes revenue attributable to the U.S. of $ 785.8 million and $ 736.4 million , or 57.9 % and 55.1 % of total revenue, for the three months ended March 31, 2023 and 2022 , respectively. No other country represented more than 10% of total revenue for any period. The following table summarizes long-lived assets by geographic area (in thousands, all intercompany transactions have been eliminated): March 31, 2023 December 31, 2022 Property and equipment, net: North America (a) $ 192,992 $ 202,645 Europe, Middle East, and Africa 30,303 33,827 Asia-Pacific 17,454 21,360 Latin America 4,923 6,463 Total property and equipment, net $ 245,672 $ 264,295 (a) Long-lived assets for the North America region include property and equipment, net attributable to the U.S. of $ 186.4 million and $ 196.4 million as of March 31, 2023 and December 31, 2022 , respectively. |
Concentration of Credit Risk
Concentration of Credit Risk | 3 Months Ended |
Mar. 31, 2023 | |
Risks And Uncertainties [Abstract] | |
Concentration of Credit Risk | 13. Concentration of Credit Risk Financial assets that subject the Company to credit risk primarily consist of cash and cash equivalents, accounts receivable, and unbilled services (including contract assets). The Company’s cash and cash equivalents consist principally of cash and are maintained at several financial institutions with reputable credit ratings. The Company's deposits at certain of these institutions exceed insured limits. The Company maintains cash depository accounts with several financial institutions worldwide and is exposed to credit risk related to the potential inability to access liquidity in financial institutions where its cash and cash equivalents are concentrated. In the event of failure of any of the financial institutions where the Company maintains its cash and cash equivalents, there can be no assurance that the Company will be able to access uninsured funds in a timely manner or at all. The Company has not historically incurred any losses with respect to these balances and believes that it bears minimal credit risk. As of March 31, 2023 and December 31, 2022, substantially all of the Company’s cash and cash equivalents were held within the U.S. No single customer accounted for greater than 10 % of the Company’s revenue for the three months ended March 31, 2023 and 2022. As of March 31, 2023 and December 31, 2022 , no single customer accounted for greater than 10 % of the Company’s accounts receivable and unbilled services (including contract assets) balances. |
Related-Party Transactions
Related-Party Transactions | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | 14. Related-Party Transactions For the three months ended March 31, 2023 , the Company had combined revenue of $ 2.3 million from four customers whose board of directors each included a member who was also a member of the Company’s Board. As of March 31, 2023 , the Company had combined receivables of $ 2.4 million from four customers whose board of directors included a member who was also a member of the Company’s Board. On February 8, 2022, the Company completed an insignificant acquisition, which was associated with the 2021 acquisition of RxDataScience, Inc., through an arm’s-length transaction. A member of the Company’s management was a minority shareholder of the acquired company. For the three months ended March 31, 2022, the Company had combined revenue of $ 1.3 million from three customers whose board of directors each included a member who was also a member of the Company’s Board. As of March 31, 2022, the Company had receivables of $ 0.3 million from one customer whose board of directors included a member who was also a member of the Company’s Board. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 15. Commitments and Contingencies Legal Proceedings In the opinion of management, the outcome of any existing claims and legal or regulatory proceedings, other than Vaitkuvienë v. Syneos Health, Inc., et al, No. 18-0029 (E.D.N.C.) (the “Vaitkuvienë action”), if decided adversely, is not expected to have a material adverse effect on the Company’s business, financial condition, results of operations, or cash flows. There have been no updates from the description of the Vaitkuvienë action included in “Note 17 – Commitments and Contingencies” to the consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data” in the 2022 Form 10-K. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | 16. Subsequent Event On May 10, 2023, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Star Parent, Inc., an affiliated entity of Elliott Investment Management, Patient Square Capital and Veritas Capital (“Parent”), and Star Merger Sub, Inc., a wholly owned subsidiary of Parent (“Merger Sub”). The Merger Agreement provides that, at closing (the “Effective Time”), Merger Sub will merge with and into the Company (the “Merger”), with the Company continuing as the surviving corporation and a wholly owned subsidiary of Parent. At closing, each share of Class A common stock of the Company issued and outstanding immediately prior to the Effective Time will be cancelled and extinguished and, except for limited exceptions, automatically converted into the right to receive $ 43.00 in cash (the “Merger Consideration”). The Board has unanimously approved the Merger Agreement and directed that the Merger Agreement be submitted to the stockholders of the Company for their adoption. The closing of the Merger is subject to customary closing conditions as described in the Company’s Current Report on Form 8-K filed on May 10, 2023, including adoption of the Merger Agreement by the Company’s stockholders and receipt of required regulatory approvals. The closing of the Merger is expected to be completed during the second half of 2023. If the Merger is consummated, the Company’s shares of Class A common stock will no longer trade on the Nasdaq Stock Market LLC and will be deregistered under the Securities Exchange Act of 1934, as amended. As a result, the Company will become a private company. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Unaudited Interim Financial Information | Unaudited Interim Financial Information The Company prepared the accompanying unaudited condensed consolidated financial statements in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information. The significant accounting policies followed by the Company for interim financial reporting are consistent with the accounting policies followed for annual financial reporting. The unaudited condensed consolidated financial statements, in management’s opinion, include all adjustments of a normal recurring nature necessary for a fair presentation. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the “2022 Form 10-K”), filed with the Securities and Exchange Commission on February 16, 2023. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the full year ending December 31, 2023 or any other future period. The unaudited condensed consolidated balance sheet as of December 31, 2022 is derived from the amounts in the audited consolidated balance sheet included in the 2022 Form 10-K. |
Revenue from Contracts with Customers | The Company expects to recognize revenue over the remaining contract term of the individual projects, with contract terms generally ranging from one to five years . The amount of unsatisfied performance obligations is presented net of any constraints and, as a result, is lower than the potential contractual revenue. The contracts excluded due to constraints include contracts that do not commence within a certain period of time or that require the Company to undertake numerous activities to fulfill these performance obligations, including various activities that are outside of the Company’s control. |
Financial Statement Details (Ta
Financial Statement Details (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Schedule Of Cash Pool Position | The Company’s net cash pool position consisted of the following (in thousands): March 31, 2023 December 31, 2022 Gross cash position $ 526,949 $ 283,337 Less: cash borrowings ( 526,520 ) ( 283,029 ) Net cash position $ 429 $ 308 |
Schedule of Billed Accounts Receivable, Net | Accounts receivable and unbilled services (including contract assets), net of allowance for doubtful accounts, consisted of the following (in thousands): March 31, 2023 December 31, 2022 Accounts receivable billed $ 879,249 $ 898,839 Accounts receivable unbilled 254,274 227,210 Contract assets 529,427 531,234 Less: Allowance for doubtful accounts ( 12,047 ) ( 12,121 ) Accounts receivable and unbilled services, net $ 1,650,903 $ 1,645,162 |
Schedule of Goodwill | The changes in the carrying amount of goodwill by segment for the three months ended March 31, 2023 were as follows (in thousands): Clinical Commercial Total Balance as of December 31, 2022 $ 3,405,877 $ 1,491,641 $ 4,897,518 Impact of foreign currency translation 8,165 1,387 9,552 Balance as of March 31, 2023 $ 3,414,042 $ 1,493,028 $ 4,907,070 (a) No impairment of goodwill was recorded for the three months ended March 31, 2023 . |
Schedule of Accumulated Other Comprehensive Loss, Net of Tax | Accumulated other comprehensive loss, net of taxes, consisted of the following (in thousands): Three Months Ended 2023 2022 Accumulated other comprehensive loss, net of taxes beginning balance $ ( 133,874 ) $ ( 49,618 ) Derivative instruments: Beginning balance 5,610 ( 2,621 ) Other comprehensive (loss) income before reclassifications ( 1,779 ) 8,612 Reclassification adjustments ( 7,660 ) 1,028 Ending balance ( 3,829 ) 7,019 Foreign currency translation: Beginning balance ( 139,484 ) ( 46,997 ) Other comprehensive income (loss) before reclassifications 18,589 ( 17,386 ) Ending balance ( 120,895 ) ( 64,383 ) Accumulated other comprehensive loss, net of taxes ending balance $ ( 124,724 ) $ ( 57,364 ) |
Reclassification out of Accumulated Other Comprehensive (Loss) Income | Changes in accumulated other comprehensive loss consisted of the following (in thousands): Three Months Ended 2023 2022 Unrealized (loss) gain on derivative instruments: Unrealized (loss) gain during period, before taxes $ ( 2,366 ) $ 11,667 Income tax (benefit) expense ( 587 ) 3,055 Unrealized (loss) gain during period, net of taxes ( 1,779 ) 8,612 Reclassification adjustment, before taxes ( 10,191 ) 1,393 Income tax (benefit) expense ( 2,531 ) 365 Reclassification adjustment, net of taxes ( 7,660 ) 1,028 Total unrealized (loss) gain on derivative instruments, net of taxes ( 9,439 ) 9,640 Foreign currency translation adjustment: Foreign currency translation adjustment, before taxes 18,580 ( 20,097 ) Income tax benefit ( 9 ) ( 2,711 ) Foreign currency translation adjustment, net of taxes 18,589 ( 17,386 ) Total other comprehensive income (loss), net of taxes $ 9,150 $ ( 7,746 ) |
Schedule of Other Expense (Income),Net | Other Expense, Net Other expense, net consisted of the following (in thousands): Three Months Ended 2023 2022 Net realized foreign currency loss $ 2,652 $ 2,456 Net unrealized foreign currency loss 4,898 434 Equity investment loss 550 — Other, net 1,263 1,752 Total other expense, net $ 9,363 $ 4,642 |
Long-Term Debt Obligations (Tab
Long-Term Debt Obligations (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Debt Obligations | The Company’s debt obligations consisted of the following (in thousands): March 31, 2023 December 31, 2022 Secured Debt Term A Facility due November 2027 $ 1,350,000 $ 1,350,000 Revolver due November 2027 120,993 120,993 Accounts receivable financing agreement due October 2025 550,000 550,000 Total secured debt 2,020,993 2,020,993 Unsecured Debt Senior notes due January 2029 (the “Notes”) 600,000 600,000 Total debt obligations 2,620,993 2,620,993 Less: Term loan original issuance discount ( 3,157 ) ( 3,322 ) Less: Unamortized deferred issuance costs ( 6,256 ) ( 6,505 ) Total long-term debt $ 2,611,580 $ 2,611,166 |
Contractual Maturities of Debt Obligations | As of March 31, 2023, the contractual maturities of the Company’s debt obligations (excluding finance leases) were as follows (in thousands): Principal Remainder of 2023 $ — 2024 33,750 2025 617,500 2026 67,500 2027 1,302,243 2028 and thereafter 600,000 Less: Term loan original issuance discount ( 3,157 ) Less: Unamortized deferred issuance costs ( 6,256 ) Total $ 2,611,580 |
Derivatives (Tables)
Derivatives (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Interest Rate Swaps Designated as Hedging Instruments on Consolidated Balance Sheets | The fair values of the Company’s derivative financial instruments and the line items on the accompanying condensed consolidated balance sheets to which they were recorded were as follows (in thousands): Balance Sheet Classification March 31, 2023 December 31, 2022 Interest rate swaps - current Prepaid expenses and other current assets $ 5,082 $ 10,073 Fair value of derivative assets $ 5,082 $ 10,073 Interest rate swaps - non-current Other long-term liabilities $ 7,567 $ — Fair value of derivative liabilities $ 7,567 $ — |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis | As of March 31, 2023, the fair values of the major classes of the Company’s assets and liabilities measured at fair value on a recurring basis were as follows (in thousands): Level 1 Level 2 Level 3 Investments Total Assets: Trading securities (a) $ 21,895 $ — $ — $ — $ 21,895 Partnership interests (b) — — — 14,930 14,930 Derivative instruments (c) — 5,082 — — 5,082 Total assets $ 21,895 $ 5,082 $ — $ 14,930 $ 41,907 Liabilities: Derivative instruments (c) $ — $ 7,567 $ — $ — $ 7,567 Contingent obligations related to acquisitions (d) — — 16,100 — 16,100 Total liabilities $ — $ 7,567 $ 16,100 $ — $ 23,667 As of December 31, 2022, the fair values of the major classes of the Company’s assets and liabilities measured at fair value on a recurring basis were as follows (in thousands): Level 1 Level 2 Level 3 Investments Total Assets: Trading securities (a) $ 20,465 $ — $ — $ — $ 20,465 Partnership interests (b) — — — 15,367 15,367 Derivative instruments (c) — 10,073 — — 10,073 Total assets $ 20,465 $ 10,073 $ — $ 15,367 $ 45,905 Liabilities: Contingent obligations related to acquisitions (d) — — 16,100 — 16,100 Total liabilities $ — $ — $ 16,100 $ — $ 16,100 (a) Represents the fair value of investments in mutual funds based on quoted market prices that are used to fund the liability associated with the Company’s deferred compensation plan. (b) The Company has committed to invest $ 21.5 million as a limited partner in two private equity funds. The private equity funds invest in opportunities in the healthcare and life sciences industry. As of March 31, 2023 , the Company’s remaining unfunded commitment in the private equity funds was $ 6.9 million. The Company holds minor ownership interests (less than 3 %) in each of the private equity funds and has determined that it does not exercise significant influence over the private equity funds’ operating and finance activities. As the private equity funds do not have readily determinable fair values, the Company has estimated the fair values using each fund’s Net Asset Value, the amount by which the value of all assets exceeds all debt and liabilities, in accordance with Accounting Standards Codification (“ASC”) Topic 946, Financial Services – Investment Companies . (c) Represents the fair value of interest rate swap arrangements (see “Note 4 – Derivatives” for further information). (d) Represents the fair value of contingent consideration obligations related to acquisitions. The fair values of these liabilities are determined based on the Company’s best estimate of the probable timing and amount of settlement. |
Reconciliation of Changes in the Carrying Amount of Contingent Consideration | The following table presents a reconciliation of changes in the carrying amount of contingent obligations classified as Level 3 for the three months ended March 31, 2023 (in thousands): Balance as of December 31, 2022 $ 16,100 Additions — Changes in fair value recognized in earnings — Payments — Balance as of March 31, 2023 $ 16,100 |
Schedule of Estimated Fair Value | The estimated fair values of the Company’s Term A Facility and the Notes were as follows (in thousands): March 31, 2023 December 31, 2022 Carrying Estimated Carrying Estimated Term A Facility due November 2027 $ 1,346,843 $ 1,329,750 $ 1,346,678 $ 1,329,750 Senior notes due January 2029 600,000 501,000 600,000 484,500 (a) The carrying value of the Term A Facility is shown net of original issue discounts. |
Restructuring and Other Costs (
Restructuring and Other Costs (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Restructuring And Related Activities [Abstract] | |
Schedule of Restructuring and Related Costs | Restructuring and other costs consisted of the following (in thousands): Three Months Ended 2023 2022 Employee severance and benefit costs $ 10,180 $ 14,820 Leased facility closure and related costs 74,313 ( 319 ) Other costs 194 1,056 Total restructuring and other costs $ 84,687 $ 15,557 The following table summarizes activity related to employee severance and benefit costs within accrued restructuring liabilities for the three months ended March 31, 2023 (in thousands): Balance as of December 31, 2022 $ 12,804 Expenses incurred (a) 10,180 Payments ( 10,002 ) Balance as of March 31, 2023 $ 12,982 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Shares of Common Stock Outstanding | Shares of Class A common stock outstanding were as follows (in thousands): Three Months Ended 2023 2022 Class A common stock shares, beginning balance 102,911 103,764 Repurchases of Class A common stock — ( 1,929 ) Issuances of Class A common stock 730 723 Class A common stock shares, ending balance 103,641 102,558 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table provides a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations (in thousands, except per share data): Three Months Ended 2023 2022 Numerator: Net (loss) income $ ( 72,149 ) $ 46,176 Denominator: Basic weighted average common shares outstanding 103,326 103,665 Effect of dilutive securities: Stock options and other awards under deferred share-based compensation programs — 745 Diluted weighted average common shares outstanding 103,326 104,410 (Loss) earnings per share: Basic $ ( 0.70 ) $ 0.45 Diluted $ ( 0.70 ) $ 0.44 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The number of potential shares outstanding that were anti-dilutive and therefore excluded from the computation of diluted (loss) earnings per share, weighted for the portion of the period they were outstanding, were as follows (in thousands): Three Months Ended 2023 2022 Anti-dilutive stock options and other awards 1,311 165 Anti-dilutive stock options and other awards under share-based compensation programs excluded based on reporting a net loss for the period 438 — Total Class A common stock equivalents excluded from diluted (loss) earnings per share 1,749 165 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | Information about reportable segment operating results was as follows (in thousands): Three Months Ended 2023 2022 Revenue: Clinical Solutions $ 1,013,665 $ 1,018,370 Commercial Solutions 343,135 317,883 Total revenue 1,356,800 1,336,253 Segment direct costs: Clinical Solutions 787,388 774,668 Commercial Solutions 290,639 260,965 Total segment direct costs 1,078,027 1,035,633 Segment selling, general, and administrative expenses: Clinical Solutions 87,561 89,902 Commercial Solutions 22,124 21,735 Total segment selling, general, and administrative expenses 109,685 111,637 Segment operating income: Clinical Solutions 138,716 153,800 Commercial Solutions 30,372 35,183 Total segment operating income 169,088 188,983 Direct costs and operating expenses not allocated to segments: Share-based compensation included in direct costs 10,522 8,799 Share-based compensation included in selling, general, and administrative expenses 8,170 8,534 Corporate selling, general, and administrative expenses 43,662 19,995 Restructuring and other costs 84,687 15,557 Depreciation and amortization 61,587 62,202 Total (loss) income from operations $ ( 39,540 ) $ 73,896 |
Operations by Geographic Loca_2
Operations by Geographic Location (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segments Geographical Areas [Abstract] | |
Total Revenue by Geographic Area | The following table summarizes total revenue by geographic area (in thousands, all intercompany transactions have been eliminated): Three Months Ended 2023 2022 Revenue: North America (a) $ 834,785 $ 781,654 Europe, Middle East, and Africa 320,999 355,593 Asia-Pacific 164,987 160,803 Latin America 36,029 38,203 Total revenue $ 1,356,800 $ 1,336,253 |
Long-Lived Assets by Geographic Area | The following table summarizes long-lived assets by geographic area (in thousands, all intercompany transactions have been eliminated): March 31, 2023 December 31, 2022 Property and equipment, net: North America (a) $ 192,992 $ 202,645 Europe, Middle East, and Africa 30,303 33,827 Asia-Pacific 17,454 21,360 Latin America 4,923 6,463 Total property and equipment, net $ 245,672 $ 264,295 |
Basis of Presentation - Narrati
Basis of Presentation - Narrative (Details) | 3 Months Ended |
Mar. 31, 2023 Segment | |
Accounting Policies [Abstract] | |
Number of reportable segments | 2 |
Financial Statement Details - S
Financial Statement Details - Schedule Of Cash Pool Position (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
Gross cash position | $ 526,949 | $ 283,337 |
Less: cash borrowings | (526,520) | (283,029) |
Net cash position | $ 429 | $ 308 |
Financial Statement Details - A
Financial Statement Details - Accounts Receivable and Unbilled Services, net (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Receivables [Abstract] | ||
Accounts receivable billed | $ 879,249 | $ 898,839 |
Accounts receivable unbilled | 254,274 | 227,210 |
Contract assets | 529,427 | 531,234 |
Less: Allowance for doubtful accounts | (12,047) | (12,121) |
Accounts receivable and unbilled services, net | $ 1,650,903 | $ 1,645,162 |
Financial Statement Details - N
Financial Statement Details - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
Trade receivables sold | $ 20.4 | $ 34.1 |
Proceeds from sale of trade receivables | $ 20.2 | $ 34 |
Financial Statement Details -_2
Financial Statement Details - Schedule of Goodwill (Details) | 3 Months Ended | |
Mar. 31, 2023 USD ($) | ||
Goodwill [Roll Forward] | ||
Beginning balance | $ 4,897,518,000 | |
Impact of foreign currency translation | 9,552,000 | |
Ending balance | 4,907,070,000 | |
Clinical Solutions | ||
Goodwill [Roll Forward] | ||
Beginning balance | 3,405,877,000 | [1] |
Impact of foreign currency translation | 8,165,000 | |
Ending balance | 3,414,042,000 | [1] |
Impairment of goodwill | 0 | |
Commercial Solutions | ||
Goodwill [Roll Forward] | ||
Beginning balance | 1,491,641,000 | [1] |
Impact of foreign currency translation | 1,387,000 | |
Ending balance | $ 1,493,028,000 | [1] |
[1] (a) No impairment of goodwill was recorded for the three months ended March 31, 2023 |
Financial Statement Details -_3
Financial Statement Details - Accumulated Other Comprehensive Loss, Net of Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | $ 3,495,001 | $ 3,412,555 |
Balance at end of period | 3,454,471 | 3,301,559 |
Accumulated Other Comprehensive Loss | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | (133,874) | (49,618) |
Balance at end of period | (124,724) | (57,364) |
Foreign Currency Translation | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | (139,484) | (46,997) |
Other comprehensive income (loss) before reclassifications | 18,589 | (17,386) |
Balance at end of period | (120,895) | (64,383) |
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | 5,610 | (2,621) |
Other comprehensive income (loss) before reclassifications | (1,779) | 8,612 |
Reclassification adjustments | 7,660 | 1,028 |
Balance at end of period | $ 3,829 | $ 7,019 |
Financial Statement Details - T
Financial Statement Details - Tax Effects Allocated to Each Component of Other Comprehensive (Loss) Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Income tax (benefit) expense | $ (9) | $ (2,711) |
Total unrealized gain (loss) on derivative instruments, net of taxes | (9,150) | (7,746) |
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Unrealized (loss) gain during period, before taxes | 2,366 | 11,667 |
Income tax (benefit) expense | 587 | 3,055 |
Unrealized (loss) gain during period, net of taxes | (1,779) | 8,612 |
Income tax (benefit) expense | 9 | 2,711 |
Reclassification adjustment, before taxes | 10,191 | 1,393 |
Reclassification adjustment, net of taxes | 7,660 | 1,028 |
Total unrealized gain (loss) on derivative instruments, net of taxes | (9,439) | 9,640 |
Foreign Currency Translation | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Unrealized (loss) gain during period, before taxes | (18,580) | (20,097) |
Unrealized (loss) gain during period, net of taxes | 18,589 | (17,386) |
Income tax benefit | $ 2,531 | $ (365) |
Financial Statement Details -_4
Financial Statement Details - Schedule of Other Expense (Income) ,Net (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Other (income) expense, net: | ||
Net realized foreign currency loss | $ 2,652 | $ 2,456 |
Net unrealized foreign currency loss | 4,898 | 434 |
Equity investment loss | 550 | 0 |
Other, net | 1,263 | 1,752 |
Total other expense (income), net | $ 9,363 | $ 4,642 |
Investments - Narrative (Detail
Investments - Narrative (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Business Acquisition [Line Items] | ||
Goodwill | $ 4,907,070 | $ 4,897,518 |
Long-Term Debt Obligations - Sc
Long-Term Debt Obligations - Schedule of Debt Obligations (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Less: Term loan original issuance discount | $ (3,157) | $ (3,322) |
Less: Unamortized deferred issuance costs | (6,256) | (6,505) |
Total debt obligations, non-current portion | 2,611,580 | 2,611,166 |
Secured Debt | ||
Debt Instrument [Line Items] | ||
Total debt obligations | 2,020,993 | 2,020,993 |
Secured Debt | Term Loan A - tranche one due March 2024 | ||
Debt Instrument [Line Items] | ||
Total debt obligations | 1,350,000 | 1,350,000 |
Secured Debt | Revolver due November 2027 | ||
Debt Instrument [Line Items] | ||
Total debt obligations | 120,993 | |
Secured Debt | Accounts receivable financing agreement due October 2025 | ||
Debt Instrument [Line Items] | ||
Total debt obligations | 550,000 | 550,000 |
Unsecured Debt | ||
Debt Instrument [Line Items] | ||
Total debt obligations | 2,620,993 | 2,620,993 |
Unsecured Debt | Senior Unsecured Notes due January 2029 | ||
Debt Instrument [Line Items] | ||
Total debt obligations | $ 600,000 | $ 600,000 |
Long-Term Debt Obligations - Na
Long-Term Debt Obligations - Narrative (Details) | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Debt Instrument [Line Items] | |
Debt Instrument, Interest Rate, Stated Percentage | 3.625% |
Due date, description | The Notes bear interest at a rate of 3.625% per annum, payable semi-annually in arrears that began on July 15, 2021, and will mature on January 15, 2029 |
Credit Agreement Amendment No 5 Term Loan A [Member] | Incremental Term Loan A [Member] | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity under accounts receivable financing agreement | $ 6,160 |
Secured Debt | Revolving credit facility | |
Debt Instrument [Line Items] | |
Interest rate on the Revolver | 6.15% |
Secured Debt | Letter of Credit | |
Debt Instrument [Line Items] | |
Line of credit facility, capacity available for trade purchases | $ 135,800,000 |
Secured Debt | 2017 Credit Agreement - Amendment No 2 - Term Loan B Due March 2024 | Term Loan | |
Debt Instrument [Line Items] | |
Term loan facility | 1,350,000,000 |
Secured Debt | 2017 Credit Agreement - Amendment No 2 - Term Loan B Due March 2024 | Revolving credit facility | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity under accounts receivable financing agreement | 1,000,000,000 |
Secured Debt | Revolving Credit Facility Due August 2024 | Revolving credit facility | |
Debt Instrument [Line Items] | |
Outstanding borrowings | 121,000,000 |
Available borrowings | 864,800,000 |
Secured Debt | Revolving Credit Facility Due August 2024 | Letter of Credit | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity under accounts receivable financing agreement | 150,000,000 |
Outstanding borrowings | $ 14,200,000 |
Long-Term Debt Obligations - Ac
Long-Term Debt Obligations - Accounts Receivable Financing Agreement (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Debt Instrument [Line Items] | |
Long-term debt | $ 2,611,580 |
Accounts Receivable Financing Agreement Due September2021 | Secured Debt | Accounts Receivable Securitization | |
Debt Instrument [Line Items] | |
Long-term debt | $ 550,000 |
Interest rate on the accounts receivable | 5.81% |
Weighted average imputed interest rate | 5.81% |
Accounts Receivable Financing Agreement Due September2021 | Secured Debt | Accounts Receivable Securitization | Subsidiaries | |
Debt Instrument [Line Items] | |
Available borrowings | $ 0 |
Long-Term Debt Obligations - Co
Long-Term Debt Obligations - Contractual Maturities of Debt Obligations (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Principal | ||
Remainder of 2023 | $ 0 | |
2024 | 33,750 | |
2025 | 617,500 | |
2026 | 67,500 | |
2027 | 1,302,243 | |
2028 and thereafter | 600,000 | |
Less: Term loan original issuance discount | (3,157) | $ (3,322) |
Less: Unamortized deferred issuance costs | (6,256) | $ (6,505) |
Total | $ 2,611,580 |
Derivatives - Narrative (Detail
Derivatives - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2023 | Mar. 31, 2022 | Jun. 30, 2021 | Mar. 31, 2020 | |
Derivative [Line Items] | ||||
Foreign Currency Forward Loss, Realized | $ (2,652) | $ (2,456) | ||
Interest Rate Swap, expiring March 31, 2023 | ||||
Derivative [Line Items] | ||||
Notional amount | $ 650,000 | $ 1,420,000 | $ 549,200 |
Derivatives - Interest Rate Swa
Derivatives - Interest Rate Swaps Designated as Hedging Instruments on Consolidated Balance Sheets (Details) - Interest Rate Swap - Designated as Hedging Instrument - Cash Flow Hedging - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Current, Statement of Financial Position [Extensible Enumeration] | Prepaid Expense And Other Assets Current | |
Derivative Asset, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other Assets Noncurrent | |
Derivative assets -current | $ 5,082 | $ 10,073 |
Derivative assets - non-current | 7,567 | 0 |
Derivative assets | 5,082 | 10,073 |
Derivative liability | $ 7,567 | $ 0 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Recurring - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | |
Assets: | |||
Trading securities | [1] | $ 21,895 | $ 20,465 |
Derivative instruments | [2] | 5,082 | 10,073 |
Total assets | 41,907 | 45,905 | |
Liabilities: | |||
Derivative instruments | [2] | 7,567 | |
Contingent obligations related to acquisitions | [3] | 16,100 | 16,100 |
Total liabilities | 23,667 | 16,100 | |
Partnership Interests | |||
Assets: | |||
Partnership interests | [4] | 14,930 | 15,367 |
Level 1 | |||
Assets: | |||
Trading securities | [1] | 21,895 | 20,465 |
Derivative instruments | [2] | 0 | 0 |
Total assets | 21,895 | 20,465 | |
Liabilities: | |||
Derivative instruments | [2] | 0 | |
Contingent obligations related to acquisitions | [3] | 0 | 0 |
Total liabilities | 0 | 0 | |
Level 1 | Partnership Interests | |||
Assets: | |||
Partnership interests | [4] | 0 | 0 |
Level 2 | |||
Assets: | |||
Trading securities | [1] | 0 | 0 |
Derivative instruments | [2] | 5,082 | 10,073 |
Total assets | 5,082 | 10,073 | |
Liabilities: | |||
Derivative instruments | [2] | 7,567 | |
Contingent obligations related to acquisitions | [3] | 0 | 0 |
Total liabilities | 7,567 | 0 | |
Level 2 | Partnership Interests | |||
Assets: | |||
Partnership interests | [4] | 0 | 0 |
Level 3 | |||
Assets: | |||
Trading securities | [1] | 0 | 0 |
Derivative instruments | [2] | 0 | 0 |
Total assets | 0 | 0 | |
Liabilities: | |||
Derivative instruments | [2] | 0 | |
Contingent obligations related to acquisitions | [3] | 16,100 | 16,100 |
Total liabilities | 16,100 | 16,100 | |
Level 3 | Partnership Interests | |||
Assets: | |||
Partnership interests | [4] | 0 | 0 |
Investments Measured at Net Asset Value | |||
Assets: | |||
Trading securities | [1] | 0 | 0 |
Derivative instruments | [2] | 0 | 0 |
Total assets | 14,930 | 15,367 | |
Liabilities: | |||
Derivative instruments | [2] | 0 | |
Contingent obligations related to acquisitions | [3] | 0 | 0 |
Total liabilities | 0 | 0 | |
Investments Measured at Net Asset Value | Partnership Interests | |||
Assets: | |||
Partnership interests | [4] | $ 14,930 | $ 15,367 |
[1] (a) Represents the fair value of investments in mutual funds based on quoted market prices that are used to fund the liability associated with the Company’s deferred compensation plan. (c) Represents the fair value of interest rate swap arrangements (see “Note 4 – Derivatives” for further information). (d) Represents the fair value of contingent consideration obligations related to acquisitions. The fair values of these liabilities are determined based on the Company’s best estimate of the probable timing and amount of settlement. (b) The Company has committed to invest $ 21.5 million as a limited partner in two private equity funds. The private equity funds invest in opportunities in the healthcare and life sciences industry. As of March 31, 2023 , the Company’s remaining unfunded commitment in the private equity funds was $ 6.9 million. The Company holds minor ownership interests (less than 3 %) in each of the private equity funds and has determined that it does not exercise significant influence over the private equity funds’ operating and finance activities. As the private equity funds do not have readily determinable fair values, the Company has estimated the fair values using each fund’s Net Asset Value, the amount by which the value of all assets exceeds all debt and liabilities, in accordance with Accounting Standards Codification (“ASC”) Topic 946, Financial Services – Investment Companies . |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Parenthetical) (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) EquityFund | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Commitment to invest a limited partner in private equity funds | $ 21.5 |
Remaining unfunded commitment | $ 6.9 |
Number of private equity funds | EquityFund | 2 |
Healthcare and Life Sciences Industry | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Minority interest ownership percentage | 3% |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of Changes in the Carrying Amount of Contingent Consideration (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Fair Value Disclosures [Abstract] | |
Balance at Beginning of period | $ 16,100 |
Additions | 0 |
Changes in fair value recognized in earnings | 0 |
Payments | 0 |
Balance at End of period | $ 16,100 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fair value assets transferred from level 1 to level 2 | $ 0 | |
Fair value assets transferred from level 2 to level 1 | 0 | |
Fair value liabilities transferred from level 1 to level 2 | 0 | |
Fair value liabilities transferred from level 2 to level 1 | 0 | |
Fair value assets transferred into level 3 | 0 | |
Fair value assets transferred out of level 3 | 0 | |
Fair value liabilities transferred into level 3 | 0 | |
Fair value liabilities transferred out of level 3 | 0 | |
Nonrecurring | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Goodwill and identifiable intangible assets | $ 5,560,000 | $ 5,590,000 |
Fair Value Measurements - Sch_3
Fair Value Measurements - Schedule of Estimated Fair Value (Details) - Level 2 - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | |
Term A Facility due November 2027 [Member] | Secured Debt | Reported Value Measurement | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Long-term debt, carrying value | $ 1,346,843 | $ 1,346,678 | [1] |
Term A Facility due November 2027 [Member] | Secured Debt | Estimate of Fair Value Measurement | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Long-term debt, fair value | 1,329,750 | 1,329,750 | |
Senior Notes Due January 2029 | Unsecured Debt | Reported Value Measurement | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Long-term debt, carrying value | 600,000 | 600,000 | [1] |
Senior Notes Due January 2029 | Unsecured Debt | Estimate of Fair Value Measurement | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Long-term debt, fair value | $ 501,000 | $ 484,500 | |
[1] The carrying value of the Term A Facility is shown net of original issue discounts. |
Restructuring and Other Costs_2
Restructuring and Other Costs (Additional Information) (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Restructuring And Related Activities [Abstract] | |
Accelerated amortization of operating lease right-of-use assets | $ 54.7 |
Accelerated depreciation of property and equipment | $ 18 |
Restructuring and Other Costs -
Restructuring and Other Costs - Schedule of Restructuring and Related Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Restructuring Cost And Reserve [Line Items] | ||
Total restructuring and other costs | $ 84,687 | $ 15,557 |
Employee severance and benefit costs | ||
Restructuring Cost And Reserve [Line Items] | ||
Total restructuring and other costs | 10,180 | 14,820 |
Facility and lease termination costs | ||
Restructuring Cost And Reserve [Line Items] | ||
Total restructuring and other costs | 74,313 | (319) |
Other costs | ||
Restructuring Cost And Reserve [Line Items] | ||
Total restructuring and other costs | $ 194 | $ 1,056 |
Restructuring and Other Costs_3
Restructuring and Other Costs - Employee Severance and Benefit Costs within Accrued Restructuring Liabilities (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Accounts Payable | |
Restructuring Reserve | |
Business exit costs and (gain) loss on termination of lease | $ 74,300 |
Business Restructuring Reserves | |
Restructuring Reserve | |
Balance at the beginning of the period | 12,804 |
Balance at the end of the period | 12,982 |
Business exit costs and (gain) loss on termination of lease | 200 |
Business Restructuring Reserves | Expenses incurred | |
Restructuring Reserve | |
Expenses incurred | 10,180 |
Payments | $ 10,002 |
Shareholders' Equity - Shares o
Shareholders' Equity - Shares of Common Stock Outstanding (Details) - Common Class A [Member] - shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Common stock shares, beginning balance | 102,911,000 | |
Common Stock | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Common stock shares, beginning balance | 102,911 | 103,764 |
Repurchases of common stock | 0 | 1,929,000 |
Issuances of common stock | 730 | 723,000 |
Common stock shares, ending balance | 103,641 | 102,558 |
Shareholders' Equity - Narrativ
Shareholders' Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Dec. 31, 2022 | May 25, 2022 | |
2022 Stock Repurchase Program | |||
Class Of Stock [Line Items] | |||
Stock repurchased during period, shares | 0 | ||
Class A common stock | |||
Class Of Stock [Line Items] | |||
Common stock par value (USD per share) | $ 0.01 | $ 0.01 | |
Class A common stock | 2022 Stock Repurchase Program | |||
Class Of Stock [Line Items] | |||
Stock repurchase program, authorized amount | $ 350 | $ 350 | |
Common stock par value (USD per share) | $ 0.01 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Numerator: | ||
Net (loss) income | $ (72,149) | $ 46,176 |
Weighted Average Number of Shares Outstanding Reconciliation [Abstract] | ||
Basic weighted average common shares outstanding (in shares) | 103,326 | 103,665 |
Effect of dilutive securities: | ||
Stock options and other awards under deferred share-based compensation programs | 0 | 745 |
Diluted weighted average common shares outstanding | 103,326 | 104,410 |
Earnings per share: | ||
Basic (USD per share) | $ (0.70) | $ 0.45 |
Diluted (USD per share) | $ (0.70) | $ 0.44 |
Earnings Per Share - Schedule_2
Earnings Per Share - Schedule of potential shares outstanding excluded from the computation of diluted (loss) earnings per share (Details) - shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Class A common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares outstanding excluded from the computation of diluted earnings per share | 1,749 | 165 |
Option and other awards[Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares outstanding excluded from the computation of diluted earnings per share | 1,311 | 165 |
Share-Based Payment Arrangement, Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares outstanding excluded from the computation of diluted earnings per share | 438 | 0 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Condensed Balance Sheet Statements, Captions [Line Items] | |||
Income tax (benefit) expense | $ (3,013) | $ 7,316 | |
Income before provision for income taxes | (75,162) | 53,492 | |
Discrete tax benefits (expense) | $ 5,600 | $ 6,100 | |
U.S. state and local statutory rate | 21% | 21% | |
U.S. federal statutory rate | 21% | 21% | |
Gross unrecognized tax benefits | $ 19,400 | $ 16,800 | |
Increase in unrecognized tax benefit in foreign jurisdictions | 2,600 | ||
Decrease in unrecognized tax benefits resulting from lapses of applicable statutes of limitations | $ 3,400 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Unsatisfied performance obligations under contracts with a contract term greater than one year | $ 5,680 |
Revenue recognized, included in contract liabilities balance at beginning of period | $ 382.6 |
Minimum [Member] | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Contract term | 1 year |
Maximum [Member] | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Contract term | 5 years |
Increase (decrease) in revenue recognized, allocated to performance obligation partially satisfied in previous periods | $ 19.6 |
Segment Information Narrative (
Segment Information Narrative (Details) | 3 Months Ended |
Mar. 31, 2023 Segment | |
Segment Reporting [Abstract] | |
Number Of Reportable Segments | 2 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 1,356,800 | $ 1,336,253 |
Direct costs (exclusive of depreciation and amortization) | 1,088,549 | 1,044,432 |
Selling, general, and administrative expenses | 161,517 | 140,166 |
Operating income (loss) | (39,540) | 73,896 |
Restructuring and other costs | 84,687 | 15,557 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Direct costs (exclusive of depreciation and amortization) | 1,078,027 | 1,035,633 |
Selling, general, and administrative expenses | 109,685 | 111,637 |
Operating income (loss) | 169,088 | 188,983 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Selling, general, and administrative expenses | 19,995 | |
Share-based compensation expense | 43,662 | |
Restructuring and other costs | 84,687 | 15,557 |
Depreciation and amortization | 61,587 | 62,202 |
Corporate | Direct costs | ||
Segment Reporting Information [Line Items] | ||
Share-based compensation expense | 10,522 | 8,799 |
Corporate | Selling, general, and administrative expenses | ||
Segment Reporting Information [Line Items] | ||
Share-based compensation expense | 8,170 | 8,534 |
Clinical Solutions | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Revenue | 1,013,665 | 1,018,370 |
Direct costs (exclusive of depreciation and amortization) | 787,388 | 774,668 |
Selling, general, and administrative expenses | 87,561 | 89,902 |
Operating income (loss) | 138,716 | 153,800 |
Commercial Solutions | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Revenue | 343,135 | 317,883 |
Direct costs (exclusive of depreciation and amortization) | 290,639 | 260,965 |
Selling, general, and administrative expenses | 22,124 | 21,735 |
Operating income (loss) | $ 30,372 | $ 35,183 |
Operations by Geographic Loca_3
Operations by Geographic Location - Total Revenue by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Revenues by Geographic Location | |||
Revenue | $ 1,356,800 | $ 1,336,253 | |
North America | |||
Revenues by Geographic Location | |||
Revenue | [1] | 834,785 | 781,654 |
Europe, Middle East, and Africa | |||
Revenues by Geographic Location | |||
Revenue | 320,999 | 355,593 | |
Asia-Pacific | |||
Revenues by Geographic Location | |||
Revenue | 164,987 | 160,803 | |
Latin America | |||
Revenues by Geographic Location | |||
Revenue | 36,029 | 38,203 | |
United States | |||
Revenues by Geographic Location | |||
Revenue | $ 785,800 | $ 736,400 | |
United States | Geographic Concentration Risk | Net Service Revenue | |||
Revenues by Geographic Location | |||
Concentration risk percentage | 57.90% | 55.10% | |
[1] Revenue for the North America region includes revenue attributable to the U.S. of $ 785.8 million and $ 736.4 million , or 57.9 % and 55.1 % of total revenue, for the three months ended March 31, 2023 and 2022 , respectively. No other country represented more than 10% of total revenue for any period. |
Operations by Geographic Loca_4
Operations by Geographic Location - Long-Lived Assets by Geographic Area (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | |
Long-Lived Assets by Geographic Location | |||
Total property and equipment, net | $ 245,672 | $ 264,295 | |
North America | |||
Long-Lived Assets by Geographic Location | |||
Total property and equipment, net | [1] | 192,992 | 202,645 |
Europe, Middle East, and Africa | |||
Long-Lived Assets by Geographic Location | |||
Total property and equipment, net | 30,303 | 33,827 | |
Asia-Pacific | |||
Long-Lived Assets by Geographic Location | |||
Total property and equipment, net | 17,454 | 21,360 | |
Latin America | |||
Long-Lived Assets by Geographic Location | |||
Total property and equipment, net | 4,923 | 6,463 | |
United States | |||
Long-Lived Assets by Geographic Location | |||
Total property and equipment, net | $ 186,400 | $ 196,400 | |
[1] Long-lived assets for the North America region include property and equipment, net attributable to the U.S. of $ 186.4 million and $ 196.4 million as of March 31, 2023 and December 31, 2022 , respectively. |
Concentration of Credit Risk -
Concentration of Credit Risk - Narrative (Details) - Customer Concentration Risk - Major Customer | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Revenue | |||
Concentration Risk | |||
Concentration risk percentage | 10% | 10% | |
Accounts Receivable | |||
Concentration Risk | |||
Concentration risk percentage | 10% | 10% |
Related-Party Transactions - Na
Related-Party Transactions - Narrative (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 USD ($) Customer | Mar. 31, 2022 USD ($) Customer | |
Related Party Transaction [Line Items] | ||
Revenue from related parties | $ 2.3 | $ 1.3 |
Receivables from related party | $ 0.3 | |
Number of counterparties | Customer | 1 | |
Director | ||
Related Party Transaction [Line Items] | ||
Receivables from related party | $ 2.4 | |
Number of counterparties | Customer | 4 |
Subsequent Event (Additional In
Subsequent Event (Additional Information) (Details) | May 10, 2023 USD ($) |
Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Right to receive merger consideration | $ 43,000 |