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PRA Health Sciences (PRAH)

Participants
Tom Byrne Vice President-Legal Affairs
Colin Shannon Chief Executive Officer
Mike Bonello Chief Financial Officer
David Windley Jefferies
John Kreger William Blair
Juan Avendano Bank of America
Robert Jones Goldman Sachs
Andrew Wald Barclays
Eric Coldwell Baird
Sandy Draper SunTrust
Erin Wright Crédit Suisse
Dan Brennan UBS
Steven Baxter Wolfe Research
Call transcript
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Operator

Ladies and gentlemen, thank you for standing-by and welcome to the PRA Health Sciences Third Quarter 2019 Earnings Release Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions] I would like to hand the conference over to your speaker today, Mr. Tom Byrne, Vice President of Legal Affairs. Sir, please go ahead.

Tom Byrne

you. Thank thank quarter us of and Health the for third Sciences XXXX you morning, for joining PRA Good earnings teleconference. our Officer, quarterly Shannon, our Colin Chief and Officer; Today, Mike Chief Financial results. will financial our discuss Executive Bonello,

Following our questions. opening be for we’ll comments, available

our an investor to information additional supplement portion Relations release, the in available Investor press of addition with financial In is our website.

due may those may like business, to forward-looking remarks with or to to annual questions our differ the by included with remind and results February risks Actual from report that I’d include you begin, statements statements. and uncertainties we SEC stated our the which risk associated our XXXX. in Before implied filed in are materially XX, forward-looking discussed XX-K on on responses Form factors

factors note assume that filings from time time Our be update we statements. updated Please to any with SEC. risk in may forward-looking the to no obligation our

will of reconciliation comparable measure, with financial We the in and is of website. measures and these to are portion our of GAAP we how more call helpful financial press discuss accordance in complete this providing measures the our GAAP, views management investor presented investors most in the available included supplement non-GAAP with a calculated is earnings A helps and results. release Investor and results that financial Relations measures our believe Certain gain on measures. consistent understanding financial financial non-GAAP these

our Colin I would turn now Shannon. over to call CEO, like the to

Colin Shannon

expansion pleased X% produced the Revenue adjusted income X% reported basis. and that third margin for share. thank to quarter I’m per growth. joining income to results. and happy our you quarter the adjusted and on report sequentially. that for conference growth was you, our I’m and covering grew currency Thank as year-over-year third net see we revenue double gross adjusted results earnings Good On approximately EBITDA, and digit solid net morning call continue report an financial year-over-year quarter XX% growth financial basis, revenue constant and a Tom. to diluted

the are business As revenue. since awards reimbursement XXX aware, our you of of adoption has new reporting excluded ASC

new X.X. also third report book-to-bill greater awards, a represents continuing provide For our to been inclusive or consecutive book-to-bill that quarters to reimbursement which of net and number times a our net we XXXX net than X.XX, awards, book-to-bill revenue of I run $XXX of business X.XX. new a business have have million quarter of would asked of of produced of with equal

quarter our The new addition basis, XX% business our increase with and September at in third finishing XX. on resulted billion awards approximately in sequential year-over-year an at of X% backlog $X.X backlog a of

business coming companies. of pharmaceutical environment and we perspective remains research biotech continue and to awards spending outsourcing CRO coming new for Our and from well a with mix XX% of RFPs. from XX% healthy stable flow companies balanced remains The our see from

an $X.XX, was was of XX% approximately of for Our well top and no diluted per the third a income XX% than net versus the the versus of representing approximately client of for quarter client diversified single our quarter XX% increase revenue. continues Adjusted be million, with five net quarter representing third clients quarter the third revenue more to $XX Adjusted share of income increase XXXX. XX%, XXXX. base

our Data segment. to now Solutions Turning

enhancing Metys. September, companies. segment capabilities Close-Up analytics announcements we the tool are market Latin Solutions offering the Alliance commitment and data prescription As medical a two kind delivers a announced measurement launch our in of we and of for new with significant based pharmaceutical pharmaceutical International, American In its internationally. strategic our and These to to August is platform a announced intelligent also seen you and national may have services a sales milestones leading called market, provider Metys expanding service to The and our show Data of our customers. first

term purchased The details to entering $XXX the approximately completed like of continue of XXXX that an event KKR other about that million into of week cash $XXX facilities adequate would We a business stock. we our resources of the to with also $X this in new major and this credit later I believe on shares of repurchase agreement quarter credit we a currently billion and this million. secondary our offering of arise. the grow of call. have will the revolving provide note a our additional continue get opportunity that was loan refinancing by use of to credit line and just Mike to have should

discussed the are earnings release, and diluted provide in the our updating we revenue guidance GAAP our call. press XXXX later details about updated As our per maintaining XXXX Mike and guidance. in additional share guidance adjusted will

entire PRA their and to clients staff commitment In for Sciences. like our would Health thank our continued closing, I to

now believe strong Chief We have of Mike XXXX. a over Bonello, we who our Officer, Financial leading will the and more I well positioned hand financial to call into in the the for like would and our are results go year make remainder detail. through quarterly business to

Mike Bonello

everyone. morning, Thank you, Colin, and good

exchange a X% The foreign XXXX, constant grew third our currency of quarter basis. and at actual rates on consolidated XX% revenue

XXXX, of third revenue for previously, third to $XXX.X XXXX. compared the for of reported quarter quarter of As million we Colin $XXX.X stated the million

$XX.X Data $XXX segment for X% of quarter, The Solutions respectively. while revenue of X% million Clinical and segment revenue the Research of reported reported million, increases the

all from metrics exclude and reimbursement large mid-sized large companies pharmaceutical companies. our Regarding quarters. XX% and XX% biotechnology segment XX% are XX% concentration what we and line reported These of other derived in Data our in concentration, revenue from revenue from biotechnology we to Solutions pharmaceutical companies, have previous revenue with service our small from companies,

add continues labor our in Research be were $XXX.X third by $XXX.X of impact continue the in in The exchange to data in $X costs as to segment increase fluctuations third Solution Total by million increased of XXXX. business, quarter compared staff direct from to increased the in favorable million costs currency to cost Data the growth our a of Clinical rates. XXXX, support was direct in we million in driven foreign quarter segment. This increase and costs offset

the of revenue rate quarter staff. decrease exchange Direct revenue XX.X% XX.X% compared costs quarter of XXXX and The as with in of direct third favorable in increased of in XXXX. to to costs the due a third utilization our percentage currency is fluctuation primarily of

general expenses and a administrative Selling, leverage percentage XXXX. continued of of to efforts as the XX.X% selling, $XX.X of or third compared third XX.X% decrease to in functions. revenue for expenses service primarily general related to selling quarter and the administrative million for administrative revenue XXXX, quarter of is were our and our The

XXXX, to XX% third the The to share certain which items to third $XX.X million in $X.XX per Adjusted the period XXXX. share of in whose reduction of contributed $X.XX net fluctuation the to quarter. grew stock income, the repurchase net period operating not to compared correspond EPS the from in quarter per to do third $X.XX XXXX. changes of in share Adjusted diluted excludes in in quarter share of XX.X% quarter per income increased results, our count from

primarily The Cash $XXX.X driven an outflows flow cash compared operations the increase an sales provided in the by quarter of was result operations to cash million increase provided the decrease in of XXXX, of operating for by our third by in in cash working from was XXXX. of million third $XX.X quarter days capital outstanding.

Our days at sales at compared September days XX, to XXXX. net outstanding XX was day XX XXXX, September XX,

than was higher slightly guidance. what was DSO Our in included our

more trend during collection However, reflect related in quarters, Consistent DSO as fourth averages. dynamics. trends, line the our we’ve slight quarter. expect industry was prior we in stated expected year to with The in quarter purely previous timing the the in our we to our with improve third DSO does not change always and increase

XXXX of Capital the million expenditures for to XXXX. quarter compared $XX.X million, third for the were $XX.X third of quarter

As we capital our and in our technology the our of increase previously our discussed, information expansion reflect to continues infrastructure growth. the investment support expenditures to in

The foreign was held at was Net compared of the is as by share incremental our less due which at repurchase outstanding million the XXXX. cash cover debt to September to referenced we our Our required million XX, $X.X $XXX of in $XXX.X total XXXX, borrowings equivalents balance cash and net $XX XX, XXXX at $X.X subsidiaries. to cash billion September million debt was debt September XX, defined billion, increase earlier.

through line As billion of of credit our credit which Colin $X.XX mentioned, revolving $X of XXXX of have the on refinancing credit Monday, dates September has new due repay XXXX. $X.X from finalized entirety. and we both with facility the million quarterly XX, facility remaining maturity its the principal October the $XXX million of of loan, used term consists The facility. billion facility in credit The were at XXXX The to payments maturity. loan XXXX scheduled fixed proceeds term balance XXXX, credit

also warranties, support their We happy everyone representations, PRA like has affirmative credit The of and for to with XXXX to customary facility. credit covenants, are all of this And which I’d thank XXXX finalized. have default, behind hardworking of were our consistent us. refinancing involved facility their events getting and this

expenses, our concentration, of in revenue currency XXXX prior XX% consistent is expenses, in our U.S. our excluding levels. revenue XX% were Regarding with which and and dollars, of reimbursement quarters denominated

continues Our hedged. be Euro exposure naturally to

approximately than our the GBP in revenue denominated movements quarters, of discussed prior GBP in or expenses continue is have in X% denominated of our are GBP. we we’ve to in As exposure less to as X%

As of revenue its X% reported to Colin guidance between to the growth referenced $X.XX X% representing X% growth Company $X.XX X%. XXXX as billion of earlier constant is currency to in the maintaining and billion, call, and

growth $X.XX income income $X.X share and We between share XX% updating $X.XX net per net representing of and are to our to updating between and cents to our diluted GAAP diluted $X.XX XX%. per adjusted

We income from effective estimate, differ changed our allocation well pre-tax due as previously tax things may at our in as earnings as among effective the annual applicable And estimate approximately tax XX%. of rate discussed, we continue other geographic tax changes law. in this rate to to our

assumes currency noted All September a XX, also rate of of euro GBP that exchange are foreign rates X.XX. X.XX guidance should be It as of and rate XXXX. our other

prepared we are now That and you take may Operator, line. concludes the happy your open now to our remarks questions.

Operator

with first Thank David of Jefferies. you. [Operator the Instructions] comes Our from line Windley question

ahead. Please line open. Your is go

David Windley

revenue in Thanks Good the in your wanted third Hi. my particular questions. clinical focus advanced than in – more in to morning. total you. revenue. expected taking we on particular And quarter. Thank faster clinical, I for

it expectations. attractive relative was our So to

case was get you back I’m more I I our in a building the quarter? of the rehiring revenue a I solutions high think quarter third about, from based correct the factors like full those think err end a And where on think acceleration If expectation business. think which your progressive your was that of year. would our would contribution things we’re expectation fourth would still to in of the kind is half strategic that that in toward you the if of in progression through of – wondering kind the guidance.

just understand through So to wanted kind how the back progressing half? of that’s

Mike Bonello

Yes, Dave.

thought. revenue able been all quarter we’ve – solutions. with from line to think strategic reference as hire I perspective where It in Collin would last be was heads our in we the

So that fourth we’ve in in third consistent able quarter we’re to were saw been quarter. Again, what be the the is the to looking we in revenue progression to you expect generate that some But we going to we midpoint there. do range. think at from our see guidance

David Windley

I those to I make with you’ve to able level your ahead kind What’s of last on it And sales investments of in and Helpful. enough Solutions the ahead period. months, how important – in the force. you you make things up on fourth the place some strong then to think think the talked seasonal last, seven Collin, year? changes over – call, Data how is made had set the you’ve Data think Okay. changes, comfort been Solutions, management finish six, was quarter of get do some

Colin Shannon

good it fact very team obviously, and Dave, in the They’re that making training QX. we’re building mean, management still when place seeing going everything We’ve this working positioned. positive into to we’re make you feeling they’re obviously continue we’re But well a little get changes, takes I got on service offering. progress, and still and well. while to

model will noticed actually our So bit of looked had year. not for through for increase But of internal that’s acquisition yet and fed a that costs in of sort all there’s a pricing. We’ve little lot next forward be going on. data that

be being very, achieved hit than as I we bit year block, will So we’ve that building think and saw things achievement. always a nicely getting this place very our like year last we’re the I’ve If positioned. better just we the pleased same, elaborate in little can with

David Windley

a of last – amount the So pleased quarter dollar fourth year. with similar dollar a as

clarify? to Just

Colin Shannon

Today.

David Windley

Yes.

Okay. Thank you.

Operator

comes with question next William our line Kreger of John And Blair. from the you. Thank

go Please open. is line Your ahead.

John Kreger

much. XXXX? the how similar Hi. question, have business the just Thanks you Solutions Can last Dave’s Collin, about Data it growth building Clinical business? very do think on to trending into

Colin Shannon

instrumental finding I cycle other a purchased in year. are may and of dramatic and been possibilities moving longer times that being ongoing think some are also or safety thought quite with never they’re allowing an And It scale. we strategic the was forward things was in fruition discussions next way the before. the have that the because lot to that shaping future. as think seeing stopped soon at progress we’re as discussions people year in – the in to It way, we it’s come as have I there’s point are business, us the but size to business. data so. that that it quite could Much that just were may be actually this next able And

us data of clinical a helped and data doesn’t. the works what good and actually and to within managing works us data use the And kept best advantage excel trial. it’s with It’s what and continue how and

love part continue that offerings. offerings. sources to to So I them out to growth good for new the look support help of business. new We’ll help continue continue would with our data assets, at to We’ll core we’ll and sensitive piece continue round to to the see,

settling next couple years, and of to about I that cake. meanwhile, icing anything our as actually nature business some grow low strategic different and then, on hanging the the think fruit there’s

John Kreger

helpful. third quarter, in moment? And was That’s you. bookings business about Thank strategic traditional? How your has popular solutions versus the at you which going the as more think the

Colin Shannon

showing being last guide is of low definitely the from a and in growth All right. away flatter very is done in strategic a quarters than lot this. last markets. I few that cost the being hires few was solutions is mentioned and lower in the This swinging quarters

hiring last and it Asia that finding time U.S. Europe. seems for the we’re That have was number plan. overseas, So of – I particularly, a Latin by the to that employees, little at based America, a and that shifted trend had bit mentioned quarter trend last saw it been Eastern replacing quarters, started next we

ended of have for looking product and hiring. – We tools the There’s some optimize within we in up of and the larger productivity are in of clients. bringing now processes process that the still registration support clients use and more now efficiencies these that some the to help

it So to for their using more help part of and the get developments. how of tools some money, can we is, the clients

next got how the our needs a resounding work we various we that showing So with we and for clients. It’s we’ve and on training expected. programs we’re of aspects, held week business, client obviously, for generate things lower larger our still other but growth thanks flatter one pleased actually we got did. Obviously, it’s was move definitely We’ll see meeting but clients’ forward. at this the year a than discuss I when as all

expect it’s not and rate past well So nice it’s been that grow. appreciate as And to continue at the although know to same with to that years. in they

John Kreger

Great. Thanks much. so

Operator

our with And line question America. Avendano the of of you. Juan Thank Bank from next comes

is open. Please go Your line ahead.

Juan Avendano

could capital M&A talk the can related in perhaps, and see is you refute do not any pipeline deals what My my traditionally could absence question deals future? to share M&A you you. deployment, attainable actually in near foresee Thank done that, more recent term in share you’ve or us any to confirm you going complete you about leverage, And in than Hi. buybacks that that real us, your first I whether with guess, long history your target sense doing you of or if is net forward? and

Colin Shannon

diligence. together. our assets. some potential there. And got untapped would with help definitely we make to there’s But always what And and that, it strategic look at. – data you exciting, help little if we on it still Symphony, feel would pacing, always a just capitalize makes looking both view, and midst businesses there of And X that improve maybe lots certainly don’t through from from platform times, these working in love we feel the And makes acquisitions that got we’d that that at right point the something there’s We’re our us catalyst a tuck-in on a something that looking all could something, we’ve at we’ve always we’re it to something sense. is something when both Clinical that we’d that be help find of and of acquire business both

So opportunities. meet we with that’s continually ongoing an banks review and to discuss

ratio. way set reach like if said over become anywhere you’re got really our ever never leveraging a don’t skittish. X where times, before levered clients when bit targeted so We’ve anytime, We’ve a we’ve little – always that clients long we’d a

any So the would want think view, as do means at what’s look that but the would of for take best say, for shareholders still any we for set we just we something we’d for to we’re find it we’re what nicely is a can in given point best advantage for the use looking the time, about shares, I from that of cash a and acquisitions up near-term. so, pretty of in hopefully, repurchasing short-term, releverage, situation

Mike Bonello

up a with then why refinancing slightly set And line credit. revolving larger that’s the we of

available out do that that the the that’s do the to case. have A have keep to acquisitions we pay term flexibility down, if to So it there and any we but needed

Juan Avendano

the prepared including well have question, your to would net in And that just related further with Okay. mean, credibility given metric backlog other I book-to-bill of including you the inclusion you that reimbursable I’m most aware book-to-bill, second pass-throughs been has consideration did question X.XX? That’s CROs? it. to you. any of like of start reporting the then pass-throughs expenses. net And Have I the remarks my correctly deteriorated hear metrics, Thank is, your that

Mike Bonello

to we X.XX have been you’re included for would I would first If correct. guess, quarter. have question, reimbursables, it your the

We backlog, perspective, be feel portions. on like business Part were the we because book-to-bill a to business of in community have what doing. core a that is feel we to And clear including that it not usual mainly reimbursable to the we into just investment on about clearer thought on from what’s the reimbursable like increase there revenue significantly if of studies understand had basis. couple and we going a in than easier there keep larger XXX want it’s

Juan Avendano

you. Thank back the I’ll jump in queue.

Operator

our And you. with from next question Jones Robert Goldman of comes Sachs. the line Thank

Your go open. Please line is ahead.

Robert Jones

Great. taking the Thanks the clients. question. bands the breakdown from for provide appreciate the Colin, of from you various I contribution

Sorry curious was the this, trending what the top think from all. I I was it if X%. changed been missed if contribution around but that I at had client?

Mike Bonello

No, like it it that roughly X.X%, was was right – about X.X%.

Robert Jones

great. bookings, and split quarter And just then this a mentioned Great, that biotech over from pharma. XX-XX it you the on was

heavily about bookings the biotech? should from conversion And and we I different think shift guess these think perspective of think Anything that, or the from biotech. bit given as larger biotech I far balance to pharma about between more of a a as should to previously. towards of different given portion mix this we related is weighted than anything inherent bookings risk

Colin Shannon

quarters. it highly Actually, the always we’ve quite And We on last couple biotech was of in opposite. focused arena. the strong very in it be been the technically

We’re was finding altering actually and we’re pharma the the it studies. mind that big changing

of been some as to it cancellation us complete because was about study. and causing it’s new this In cases, get taken started, a we’ve altering back a lot changes. Just

the actually focus move So, always forward, And couple roots. heavier we’ve robust. once we been and a as we biotech. actually wanted it’s to back we’ve of spent last Again, agreed quarters having area on more – strong our get an quite to then much found we’ve and

balance doing will to have at some happy means come what now just focus. us of pharma anticipating our the we’re deliberate cycles, that’s through right the when which a we’ll again, with So besties on we’ve that taking point. give walked I it It big much book-to-bill, starts strong But here. that been

calculated. margins, could at the So go it of well risks I wouldn’t that like. business, and when think that’s but the we for we lots would be it There’s times associated chase with after

get to tried that very we quarter. So during the balance considerably

Robert Jones

Great.

just shift? this So mix clear, Colin on be given to impact no conversion

Colin Shannon

No.

Robert Jones

should as business It be usual.

Colin Shannon

normal, correct. Just

Robert Jones

much. Thanks Great. so

Operator

comes our Barclays. line And with you. Jack from Thank next of the Meehan question

Your open. go line is Please ahead.

Andrew Wald

your any preferred Hi, this Andrew these seen Jack. have Could partnerships? you structure of of partnerships for Wald provide and specifically in is on on the changes an you any update

Colin Shannon

not of an much, got one that’s seems of to partners, been too attention. undue talk lots we’ve get preferred try and because there’s it amount only We to public

work for up some So of And different a the we towards phases a we that have year slowish many client have work had is And part partnerships we do all with example, year. with and cycles. every large who good of picking through latter clients. sudden of is a the coming biotech studies

we to for them very as support it lot focus sure them they them. development. And a a happens. And and through for positive advice products and high we that’s we fast offer speed and we opportunities go is move acquisitions that of delivering do for through see been W and All quality keep support best have make going the as client that’s where of them. areas changing, That dynamics tried mergers we changing that to our they’re through is But of outsourcing. us. continue change when can,

Andrew Wald

going in Thank could full you how hiring’s growth FSP And little Great. talk Thank you. you. compare business. And and a how more in FSP? bit did service quarter, the across maybe about

Mike Bonello

run to Yes. segment Andrew, foul part we disclose because disclosure. we segment, all don’t don’t and that our a of one of want it’s

disclosed So separately. never that we’ve

Colin Shannon

the is we’re of obviously the amount But hiring, a hiring great number been that. been very strategic a particularly everybody business. we’ve hiring do. that of the to through addressing, substantial positive engine, gone solutions and got part and still thought healthy regarding support, I’ve with – we’ve good Now we’ve given being a a

really number registration, a now had management the a shape. management bringing in more in lot through ago, we’ve of that’s a now and and taken actually end last gone product changes quite in team couple year, we their But being And of a leadership are the just actually our new top meeting in through talent company. – number really And and of time, and like I was on top all forward. ready focusing it we’ve and an way pulling came for the we’re change next of like our revolution our the our together because talent feel come we up weeks exciting of

Operator

All right.

comes Eric question line from Baird. next Our the of Coldwell with

is ahead. Your go Please line open.

Eric Coldwell

Hey, much. very thanks

ways your clients some in remarks, pre-commercial was approach where you So two as well pharma, first like you more I that of it prepared biotech with clients include segmented others. And the other think would, sounded defined XX% way. as a all XX% bucket probably gave XX% then

clients I that pharma bucket? clients bucket in XX% would define the think biotech have that you how first are that versus many question, XX% in many you how

Colin Shannon

my I’ll have – revenue the coming that don’t I’m Eric, of of to the my concentration. was that the one. my MBA, to – on get head. top don’t XX/XX you was or of prepared Because remarks that and out the ones sorry, number I have have – I Dave, other around was back

Eric Coldwell

Okay.

point biotech capital you the R&D. commercial a these I than So is, relying of hoping walk get My companies your sense finer that mindset more for sense my your biotech products. I’m or Wall sources to the that. pre-commercial people business mean of typically number or base I want some guess trying on thinking of pre-commercial is is I get but don’t early without from away XX% today, I’m at that on ultimately Street think outside what XX% to just less on to is we mean, to number client call I fund to stage in

Colin Shannon

get for I clarification, thank aliveness you Eric. some to

that way it’s with development funded and them got with closely absolutely agreed part we’ve is in place working work up biotech that that plan we’re worked. protocol add well we’ve and that on. critical The techs development us funding always And a good for an obviously You’re right. by have and are that we we the the robust

starting are the But it do have that’s get So from all work company repeat under and vary few a faster the a that large predictable a might way much through more we of biotechs, of be typically just they key lot times lot from it’s they we to why and development. of very them. as where – type products of one

talking were is all a plan with biotech place. in strong with solid we XX% So of companies about positions good good, cash

were work, it’s even larger the And our of of we strategic of like from mix past, of product a lot do that some at also lot divisions, they’ve they’ve sort we maybe solutions. comes clients, acquired a and our But pharma registration biotech that with. and more working where biotechs got in

And type so we work in of that fashion.

new not growing notice for franchisees new we growing the it’s are out So our yes, but and biotechs doing have and the no that more new dramatic we shift clients, from past, targeting or change future. definitely and

Eric Coldwell

others. in days category? helpful. a exposure maybe categories announced in abnormally contract have any that your talk bit CNS That’s large gyrations the you just particular? And public in peers exposure based curious little of worry the different the some slant just around about we’ve there about Alzheimer’s quick you your here, I’m some Is and seen CNS on can of with Alzheimer’s relating outside a cancellations in quarters to really like two few these CNS last what

Colin Shannon

They – find it we’ve change couple We year there already, the don’t that, to get that scope trial modifications there’s a progressed. we want always this may dramatically. typically where more we is I as had mean anything conduct We’ve surprises. and have of the

that. We’re seeing more a lot of

in accelerate through, either that change want to can certain any geographies. going they we some we’re or or may if As ways exclude include maybe

coming to modify many This cancel. lot And that so their some pharma not seeing particularly before cases, always been we’re a and saying, But with it. we changing want just we that from that start, is really through, of they finding we’re sometimes client, looking may it going if choppiness And to category, big a a cancellations a cancellation. reflects in at are and it’s mind. lot even we’re is of a we’ve finding in they oh,

us As rerun just study that it. can a they close new enough are we giving actually

And it was like taking cancellation making and we’re that always judgment.

quarter. always categories, may associated determine And at we very, we put cancel to risk. but that category a so conversion book of the risk we look That’s look at because do think very with else the next things and our to – closely we backlog we any business, backlog watch

of we don’t that much risk. So really forecast anything backlog revenue in from

to to help make can have So actually guidance. pathway got sure that a we project we’ve

Eric Coldwell

Yes, that credit to of you get much I’ll cede quality here I’m the bookings, for and all guy’s very for really sure details caller. good. guys opinion. next Thanks. but quite sounds not your Thanks the that’s one the full

Colin Shannon

you. that. Appreciate Thank

Operator

Thank next line our you. Draper Sandy of with comes from SunTrust. the question And

Please Your go open. line is ahead.

Sandy Draper

much. very Thanks

the a being late, little down huge XX.X%. Just a apologize, XX.X% stabled if mentioned on couple, so to Wasn’t dropped fairly hopefully, quick either conversion after ones. backlog remarks. in prepared I of this Jumped you but a your drop,

be – goes gradual of downward if trend. see to persisting sort although of thoughts had a stabilization, new to in Just this if sort up guys going or on if – wanted you that we’re be if sort it of

Mike Bonello

No, Sandy, Mike. is this

at the continued rates revenue XX. XX.X%. kind issued my guidance that our bottom that I been used has would adjusted the when we this June was of to of guidance we It the We after believe If trial. have to

So expectation expect going we’ve that’s start trend hit forward. a our that don’t significant We down we’ll here. to from up step I think that is and trough

Sandy Draper

basis, think service I reported giving about Okay, how a at, of basis and – that. then on a helpful. better maybe points you great. longer actually my little XX year. just you’re gross costs XX bit about for on direct the sort I to shaken gross margins, do look of and about revenue costs, a that think like, and margin where you margin see accurate That’s expansion I remember above term, Looks back quarter going out? and the based on Is calculation what’s this you and fourth trending thinking And comment

Mike Bonello

QX. those we number. big what points in expect the some to opposed later year we of hired staff see some points basis in had ahead saw of in year. reprioritization We was remainder quoted what that you had studies XXXX, But going recall, be the margin basis do of historically. had if more Sure. QX and the as on we we of that in to slightly to and was the We in heads back XX to them you in you’ll knew I had line said that be of this it’ll Because improvement what had but end will half with some first expansion redeploy saw hand kept you – QX continued of XXXX, margin that XX

Sandy Draper

Okay, thanks.

Operator

of question with Erin from you. Thank our Wright the And Suisse. line Crédit next comes

Please open. is line Your go ahead.

Erin Wright

Great, thanks.

count in for on just speak guess, you activity Thanks. some I can terms to from quarter-to-date perspective? what the the and here. guess, assume expense. So share modeling does plans a of debt quarter of guidance I in, pay questions and down interest repurchase in back And the repurchase

Mike Bonello

Sure.

we cut I term the quarter, million, in refinancing. loan front, I of pay that have the and possible $X on that’ll if acquisition the on hope how a $XXX out be did into refinances on outstanding to debt the QX then payments roughly would given revolver the $XXX we’ll result billion worked entering the million, is that as A. off because the our depending would hope So down

say with make roughly front, QX to itself, and depending and the where our what impact in interest somewhere to kind we price to XX where between On outstanding on payments the – I’d let’s the it’s say, obviously, we’ll be probably count $XX I it in of XX,XXX say and be $XX of be moves we dilutive options. – depending I expected, outstanding on was think, the XX,XXX probably for we higher quarter that on share shares think say, – should revolver. that somewhere respect probably million to between million. than And going the

Erin Wright

should Thanks. creative I the anything that come in the say And sort Any seeing, past Okay, CRO bundling space. competitive perfect. across general the on trends just or then in environment the quarter. landscape, the woodwork that tactics you’re pricing changes any of out Thanks. has of in

Mike Bonello

from perspective, what been three your different anything in on I a think last any pricing anything two the Colin. we’ve that’s perspective don’t quarters, or than seen seen quarters from I’ve

Colin Shannon

trials and technology, we’ve mobile got decentralized currently trials our with XX and clinical and more I mean, used have we our model. more We’ve at of unless seeing use mobile using X. I see various closely not – we in stages been seen that would it’s thing are flight end platform only no is that that are more of working the Clinical being

we through and Symphony we expand that with conjunction forefront data as would continue shape our of real So where client helping this get And change. to is at going really have we our to that. course in they market world are evidence, I ensuring support where as the that, of and the can the

Erin Wright

Okay, great. you. Thank

Operator

you. from line of And of next our question Dan the Thank UBS. comes Brennan

is line Please open. Your go ahead.

Dan Brennan

taking go Data mind. if to Solutions Great. just the you questions. the all I business, don’t Thank for back you wanted to

believe So I X%. is know growth in I the quarter, about

how quarter that expectations? assumed realistic what’s in quarter. guide? fourth of as the does the we kind fourth So And compare What’s your move own to beyond

Mike Bonello

It up behind of year our for think into because be quarter. with be reissued pushing expecting to I that to full guidance fourth we the thought honest, deliverables where up, to the at the where the were overall, it be projects in was we’re it thought was But, line ended we going finalized to QX. would couple still end the when we be trying of there get ended slightly a quarter,

Dan Brennan

just of think I but remind how opportunities we kind the the business do you of, or But can necessarily product that of enhancing aspire to of of recent then growth? that trajectory business about that for and several think made what the know do what’s offering, about, going And to did us be terms to overtime XXXX? in you range about a deals not comments up you you how get kind we maybe about, just

Colin Shannon

acquired we period growth. there to get and once under could our got a get double – throwing It’s strong of challenge that, this because certainly it, belt amount see for of be digit that few lot we huge throw to in it we growth growth we thought we we potential hanging share model, next And easily years. out as have an year-on-year market to getting ultimately a when double but opportunity we going, lot have get a – there’s as of any actually the we we’d fruit. is we a sort of when believe actually we don’t We’ve going a competitor when digit it low and in a away how field, the do

Dan Brennan

customers price Okay. you then ago only some And one up the don’t I were Colin, come that’s I a concerns. of quarters CEOs think to again. the with think of maybe around drug a discuss few pause

how vis-à-vis of in a the So characterize factor, maybe on making would what’s but that the tone and/or was more I of Washington? temporary decision going just you business? know

Colin Shannon

obviously as concern. them. it closely as shape that to sure effect if team because a certainly on I the Well, that Obviously, impact. do we that’s consider of that going to with for talking We’ve mentioned that nature got because, political to got the there’s of we time can. big landscape with our pricing. business about pharma try their I’m worst strategic large preparing stay but, our and biotech close showing we clients understand derisk concerns things business. late, take as of they’re proportions And We make case strong the and, up leadership part these best actually radar that they of when solutions with big with seen what trying that of they’re and in always we’ve scenarios And like, anything and the we they our knows who And the concerns need this that with are and what’s as to rationale to whole today. more obviously focusing they’re and them was

Dan Brennan

on great. about burn, we just of Maybe how in to burn. you talked last just think Okay, mix quarter increase the business about, an final wondering one, maybe ready

the do how about we fee So, burn? think

Colin Shannon

think as I think I be in I QX quarter, in QX. I line going it’s – saw I think, I to said and earlier, you with think wouldn’t what for fourth

forward not I think obviously as in up, that. about it a I in think I in into back you that should is that number. like an to see But the we’re our preparing XXXX that we you that and XXXX XXXX, be better to felt in I think because idea will of give push pick we’ve study flu artificially in where expectation think obviously we with an But had position process our the get we once uptick that that budget levels goes inflated do of done there February talked a that will that we’re XXXX, going forward. you I’ll saw

Dan Brennan

Mike, thanks you Colin. Thank Great.

Operator

from Steven Thank question you. And next our Baxter line with comes of Wolfe the Research.

ahead. open. Your line is Please go

Steven Baxter

whether and follow-up. in have should other I years wanted that this driven full normal gross you you seasonality your prior keep I largest amount, pharma When could at thanks. large which some this process I the represents like is year progression ask Hi, the assume or is a we bookings. year mind and the clients. about by booking plan look expectations then to budgeting to Thanks. typically two QX was there hoping a I for discuss to think I more XXXX, back contribution year looks

Colin Shannon

at sites for teams quarter, many see looking to different strong we’re to bookings getting the that into looking But ready. pathway like, When we’re fall operational think I so there for. that, a No. have we the I are need

just just studies of And has that some out get number through way these to and and some things have the areas and metric to if other RFP to some, in somewhat and they can’t may fish, be up the achieve. even seeing a we when not see year, and pick and we and it – we on does wait want that got cycle, end there’s anything Maybe that past yes, push really want clients as that started and in try get got that So where the couple in doing some a or we a view it’s are ended they’re an we because pathway but strong the we’ve year there’s got giving get this come spike I that good that to there’s it biotechs that business to of feel that that a year. the that when. typically started you maybe this certainly pipeline QX? nothing we’ve natural but to think does even start

Steven Baxter

it. Got

bit down right just I bookings when on a then that about And side. Okay. little I segments. heard are coming XX% you the on there of said believe biotech the drilling customer you

But reprioritization down strong at bookings is coin bookings the challenges are the side talk pace. gross company flat the with it bookings a about of some fairly guess of pharma at imply level, and apply did are there you like. would with and would that, growing other I even that that So biotech the

whether when group. wondering So, about into your should then customer a any you large smaller flatten within or you we widespread And I’m out think that to of sort as Thanks. or finally, have do visibility pharma isolated should base normalize?

Colin Shannon

we large that more been clients fortunately spending felt of ahead of Yes, pharma got off And lot in time their them this team we we’ve a like and focusing of new how this that’s year treating whole interesting on sort and year, bringing during development the there’s in not that new that’s biotech. opportunities. because – in business got and flattening by

to quite change else priority. whatever a to had of And but be actually and that get that’s expecting I won study to to last it a we guys about were then our with where So, am that I to start, but going on something to guy backlog new award, the you’ll get big recall year out partnership, to mean shortly. the was that we they real that actually and biotech, partnership last took wanted or which new take we but substantial, would new cancellation very won preferred redone

do through we there we into factors them. steps are and the pharmas, that other opportunities So about there’s lot reprioritizations, where they’re thinking come to very share big of with don’t play carefully are discuss going finding that get a are just what going that they’re to

So in to surprise us. the there’s comes some about things

Steven Baxter

all color. for Thanks the Okay.

Colin Shannon

You’re welcome.

Operator

have We the of David a Thank follow Jefferies. from with do line you. question Instructions] Windley up [Operator

Your line ahead. is open. Please go

David Windley

rollout Colin follow that ups, some quick Hi, line one got talked two of out and two thanks. that’s platform technology, last just about that’s one sight efficiency of you platform had, year and year I rolling improvements this helping Mike, from but sight we wondered of cost how to implementing that of some give in gives deploy think next that year? improvement could of your much some nice I you now if now elaborate that, outlook sight to line XXXX. you line you margin on I does had

Colin Shannon

one-highs Dave, until will year the correct, that we before will that is take we be actually are the year – two but another put budgeting out new get exercise full effect systems you’re rolling and of really this efficiency. the

has of QX lot manual be rework. other causing a that till not actually of implemented one and the next And that next. be through us will end been The year we’ll going

has for for got that as of that from look and I way say we things little it at really We every we’ve year benefits certainly margin the huge but it to year, I we help looking paved a at always improvements number and are it expect next improvement. future. our thought,

we how approach continue improvement as delivering out and look enhance to we our an to be for bottom line. for we’ll So performance guidance figuring

David Windley

made some is you question general reference to my new in Thanks. second bringing And leadership. then

about couple you in with Margaret I just of what could Keegan IQVIA, you organization? from talk live last think she’s wondered bringing I the months, if has gone to the

Colin Shannon

Keegan, culture, time. in immediate step a our She’s industry the been lot more with sudden we within able carrying their of a leader rather she all senior of jobs duties. been on company she’s rest of the had Gaenzle, only and much we Margaret have the experience, a obviously – extra are so with Chris attention but that were Well, than we management are a and to not baton team covering strong all between long the

and management immediate more impact. the off management both Chris commanded the lot get done burden It’s and us get Margaret able an always hiring of So, to and discipline. rest to of made the a focused, as the of taken

get energy get to was helped it’s was and the That’s I mentioning, the positive really everybody that had why setting everybody we palpable. that’s see great just and productivity strong next to to It feel through up really hired I for really So we starting see we’re nicely that coming think is position. was year. things ourselves to hear us tree, at the and

David Windley

you. color, Appreciate thank the Great.

Operator

Thank line the you. And of question Juan your please America, another ahead. of is from we Bank of Avendano open, go have line follow-up

Juan Avendano

Hi. Thank you for the follow-up.

yet XQ, expectations. our that is with so first to of so but was related line on you Q&A in said ahead it very come-in growth your expectations the And question organic this did the and in

is know And basis easier and guess the comp. on around into facing that we business data overall you’re also solutions seasonality you’re company do so prior typically an strong I looking year all into XQ

because XQ? why Can at come from expect X% of you that of would you your any guidance deceleration midpoint forwards organic sequential essentially us imply from third to the have pull to did the And in a you quarter, tell XQ X%. still into growth the

Colin Shannon

solutions. dollar Yes. we work. revenue a to No, got an creates the so product that perspective growth you’ll in and the holiday side, the from is available expect quarter fluctuation and a lot see of see to from Especially do revenue. that there on to obviously little are fourth time you’ve want bit still is that hours the acceleration the number The to registration strategic in pickup vacation I see of perspective remember fourth a from in that thing quarter, in overall that

where our but – in is outpacing more be to I to around guidance slightly was just fall midpoint question reality. moving that I out feel us everyone’s get Dave’s that and terms want didn’t more expectations think we’re we high-end may of the to above expectation I the the towards of going everybody’s wanted midpoint, set

Juan Avendano

XQ gross the year-over-year as well? expand a expect in you basis Do on margin to

Colin Shannon

do. I

Juan Avendano

Thank you.

Operator

questions I’m would remarks. And any over you. Thank conference the time no like Colin at turn I for Shannon and to back to CEO further showing further this

Colin Shannon

everyone our you call Thank Well. for participating today. in

Thank feel contact have you We us. have you any please questions, a free If you. to hope additional great day.

Operator

today’s concludes this gentlemen, conference. and Ladies

disconnect. all may You have day. Everyone a great