Medpace(US:MEDP)2023-07-25 17:54Financial Data and Key Metrics Changes - Revenue for the second quarter of 2023 was $460.9 million, representing a year-over-year increase of 31.2% on a reported basis and 31% on a constant currency basis [84] - Net income for the quarter was $61.1 million, an increase of 23.7% compared to $49.4 million in the prior year period, driven by higher EBITDA and a lower effective tax rate [15][29] - EBITDA for the second quarter was $83.6 million, up 22.8% from $68.1 million in the second quarter of 2022, with an EBITDA margin of 18.1% [29][90] - Earnings per diluted share increased to $1.93 from $1.46 in the prior year period [30] Business Line Data and Key Metrics Changes - Ending backlog as of June 30, 2023, was approximately $2.57 billion, an increase of 18.6% from the prior year, with an expected conversion of approximately $1.42 billion to revenue in the next 12 months [13] - Net new business awards entering backlog in the second quarter increased 27.6% from the prior year to $574.8 million, resulting in a net book-to-bill ratio of 1.25 [27] Market Data and Key Metrics Changes - The business environment continues to improve, with RFP volume in Q2 up sequentially over a strong Q1, and award notifications rebounding strongly [27] - The company is experiencing good growth across all business lines, with a notable increase in both pass-through and direct revenue [68] Company Strategy and Development Direction - The company anticipates full-year 2023 total revenue in the range of $1.84 billion to $1.88 billion, representing growth of 26% to 28.8% over 2022 [90] - The guidance for 2023 assumes continued growth in direct service activities and higher investigator site activity and costs [90] Management's Comments on Operating Environment and Future Outlook - Management noted that staffing at sites is improving and operations are becoming more normalized, which is expected to positively impact trial performance [20] - There are expectations for elevated pass-through costs for the remainder of the year, which are incorporated into the guidance [43][65] Other Important Information - The company repurchased approximately 126,000 shares for a total of $23.9 million during the quarter, with $308.8 million remaining under the share repurchase program [2] - The net debt position at the end of the quarter was $15.9 million, composed of $55 million in debt and $39.1 million in cash [16] Q&A Session Summary Question: What is the impact of inflation on direct revenue? - Management indicated that inflationary effects are present, but staffing improvements and normalized operations are also contributing positively to revenue [20][21] Question: How do you see pass-throughs affecting margins? - Management acknowledged that pass-throughs have a dilutive effect on margins, but they expect to maintain a normalized level moving forward [37][63] Question: Are you taking market share versus peers? - Management stated that while they have outstripped growth in revenue and EBITDA compared to peers, quantifying market share is challenging [55] Question: What are the hiring targets for the year? - Management is tracking towards high-teens to 20% growth in hiring, with turnover returning to pre-pandemic levels, making staffing easier to manage [52][53]