Good day, ladies and gentlemen, and welcome to the Medpace Q1 2021 earnings conference call. At this time, all participants are in a listen only mode. Later, we will conduct question-and-answer session and instructions will follow at that time. If anyone should require operator assistance, please press star then zero on your touch-tone telephone. As a reminder, this call may be recorded. I would now like to introduce your host for today's conference call, Kevin Brady, Medpace Executive Director of Finance. You may begin. Good morning and thank you for joining Medpace's Q1 2021 earnings conference call. On the call today is our President and CEO, August Troendle, and our CFO and COO of Laboratory Operations, Jesse Geiger. Before we begin, I would like to remind you that our remarks and responses to your questions during this teleconference may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve inherent assumptions with known and unknown risks and uncertainties, as well as other important factors that could cause actual results to differ materially from our current expectations. These factors, including the ongoing impact of COVID-19 on our business, are discussed in our Form 10-K and other filings with the SEC. Please note that we assume no obligation to update forward-looking statements even if estimates change. Accordingly, you should not rely on any of today's forward-looking statements as representing our views as of any date after today. During this call, we will also be referring to certain non-GAAP financial measures. These non-GAAP measures are not superior to or a replacement for the comparable GAAP measures, but we believe these measures help investors gain a more complete understanding of results. A reconciliation of such non-GAAP financial measures to the most directly comparable GAAP measures is available in the earnings press release and earnings call presentation slides provided in connection with today's call. The slides are available in our investor relations section of our website at investor.medpace.com. With that, I would now like to turn the call over to Jesse Geiger to discuss our financial results and guidance. Thank you, Kevin. Good morning, everyone. Net new business awards entering backlog in the Q1 increased 44.2% from the prior year to $356.2 million, resulting in a 1.37 net book-to-bill. Ending backlog as of March 31st was $1.6 billion, an increase of 26.1% from the prior year. Revenue was $260 million in the Q1 of 2021, which represents a year-over-year increase of 12.6% on a reported basis and 11.6% on a constant currency organic basis. EBITDA of $53.6 million increased 32.1% compared to $40.6 million in the Q1 of 2020. On a constant currency basis, Q1 EBITDA increased 34.1% compared to the prior year. EBITDA margin for the Q1 was 20.6% compared to 17.6% in the prior year period. The higher margin was primarily attributable to lower reimbursed out-of-pocket expenses as a percentage of revenue. In the Q1 of 2021, net income was $43.3 million compared to net income of $29 million in the prior year period. Net income growth was primarily driven by higher EBITDA as well as a lower effective tax rate. Net income per diluted share for the quarter was $1.14 compared to $0.76 in the prior year period. Regarding customer concentration, our top five and top 10 customers represent roughly 16% and 24%, respectively, of our Q1 revenue. In the Q1, we generated $57.3 million in cash flow from operating activities, and our net days sales outstanding decreased compared to the fourth quarter from -33.6 days to -40.8 days. We ended the Q1 with $332.9 million of cash, no outstanding debt, and $50 million of undrawn capacity on our revolving line of credit. Moving now to our guidance for 2021. We are now forecasting total revenue in the range of $1.09 -$1.15 billion for the full year 2021, representing growth of 17.7%-24.2% over 2020 total revenue of $925.9 million. This reflects our current view of a slightly slower return of reimbursed out-of-pocket costs and the associated revenue related to investigator site payments. Our 2021 EBITDA is expected in the range of $205 -$215 million, representing growth of 9.2%-14.5% compared to EBITDA of $187.8 million in 2020. This updated EBITDA guidance reflects increased cost expectations related to our strong hiring in the Q1 and anticipated continued robust headcount growth. We anticipate our 2021 effective tax rate to be in the range of 12%-13%. We have assumed 37.9 million fully diluted shares for 2021, and there are no share repurchases in our guidance. We forecast 2021 net income in the range of $160.6 -$167.6 million, and earnings per diluted share in the range of $4.24-$4.42, with the increased expectations for net income and earnings per diluted share driven by the anticipated lower tax rate. With that, I will turn the call back over to the operator so we can take your questions. Operator? Ladies and gentlemen, if you have a question at this time, please press star then the number one key on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. Your first question comes from the line of Sandy Draper with Truist Securities. Your line's open. Good morning. The first question, Jesse, I think I heard you right but just confirm. It sounds like the trimming off of the top end of guidance is pretty much solely due to lower passthrough revenue. You're not looking at a lower expectation for service revenue. Is that correct? That's the largest driver, Sandy. Yeah. We're just seeing a slightly slower return of the burn rate, and it's particularly, you know, influenced by the passthrough cost, in particular, site payment activity. That's right. Okay. Is that? Go ahead, August. Sorry. I just wanted you to understand that obviously that reflects a little bit slowdown in our expected overall activity at sites. That does slow things overall a bit. It is disproportionately pass-throughs, but it also slows service revenue to an extent. Got it. It's not indicative that you're seeing a slowdown of RFPs or proposals or broad demand. It's just more of a near-term dynamic related to, you know, getting sites back and running and that, you know, we're still sort of, obviously, you know, coming up out of the back end, but still in a pandemic. Correct. That's right. Yep. Okay, great. We're still seeing a good business environment. We're still seeing good RFP flow, you know, good, you know, good funding dynamics in biotech. Those fundamentals are still intact. Okay, great. My, my follow-up or unrelated follow-up, I know I ask about this a lot, just in terms of the hiring, obviously you said you did a good job hiring. You got aggressive plans. Is it still the same strategy? Have you changed anything to try to accelerate that? It looks like the success is happening, just, you know, thoughts on, you know, your go-to-market strategy for hiring people. Is it still pretty much the same approach? That's correct. Got it. I don't think we've had any real change in hiring. You know, we will be hiring throughout the year, we think. Great. Those are my two questions. Thanks so much. Your next question comes from the line of John Kreger with William Blair. Your line's open. Hi. Thanks very much. Just to follow up on that, if you think about your revenue guidance for the full year, what sort of hiring or staff increase would you expect by year-end? We don't really try to project that out, but I think, you know, I think we're going to continue to you know, to hire relatively rapidly through the year. I don't think it'll match the Q1's hiring rate, but we'll continue to hire pretty strongly. Sort of catching up to revenue growth, but maybe not quite getting there. That's possible. Okay, thanks. August, maybe just to follow up on your comments to Sandy's question, can you just talk a little bit more about what caused the backlog conversion to revenue in the Q1 to come down a little bit? I know there's just general variability in that metric, but would you expect it to trend back up as we move through the rest of the year? Yeah. I don't think it's going to go down. But I, it's hard to predict, and you're right, there's a lot of volatility there. I think fundamentally there has been a greater delay related to, you know, COVID. We have had a couple of studies that, you know, were held up in Q1 for other reasons, for actually drug availability reasons. You know, the biggest thing I think is just a little bit of headwind from COVID activity at sites, et cetera, that is a little bit more than we had anticipated at this point. We kind of hoped that things were going to lift and, you know, things were really going to run quickly. We're still hoping that as you get later in the year, this is going to be the dynamic, but things have moved a little bit. You know, there hasn't been much, much change at sites over the last, you know, several months. Maybe just one more follow-up on that. Is that comment sort of a global one, or are you seeing a disparity in site accessibility in the U.S. versus Europe versus Asia? I mean, certainly they differ by region, but it is generally pretty broad statement that we've seen a little bit more slowing than we'd anticipated. Okay. Thank you. Your next question comes from the line of Dave Windley with Jefferies. Your line's open. Hi, good morning. Thanks for taking my questions. Wanted to try to clarify a little bit on the margin first. Understand your comments about predominantly pass-through impact on revenue, which, I mean, I understand it's not a big change, but would have at least a slight impact, positive impact on mix toward, you know, toward margin driving revenue. Your margin for the balance of the year is down on the hiring. Can you just help to understand a little bit more the magnitude of the moving parts there? We're hiring, and a lot of that didn't hit Q1, but, you know, they were hired late in the Q1, and we're continuing to hire. I think it kind of its layers in as you go through the year. Jesse, you want to address? You're right on. It's the driver on margin is really the elevated hiring. You know, we had strong hiring in Q1. As August mentioned it, you know, it didn't necessarily happen literally or sequentially, you know, ratably across the quarter. We are continuing aggressive hiring as we move through these, you know, these next couple of quarters, based on view of strong demand in the market. It's a personnel-related cost driving the margin as we make investments. Got it. On that, relative to burn rate and maybe August your answer to John or Sandy's question might have been thinking service revenue. The revenue guidance does seem to suggest that at least at the midpoint, your burn rate maybe ticks down ever so slightly for the balance of the year, but let's say it basically doesn't change. Can you help me understand? It sounds like you're aggressively accelerating hiring or at least in the Q1 it was pretty rapid. You're not really expecting say a return to higher conversion out of backlog. Again, just trying to understand the hiring need versus the pace at which you expect revenue to come out. Yeah, sure, Dave. You know, we hire towards the longer-term needs. You know, the business environment is very strong. Our backlog is growing. You know, it's what, 26%, you know, year-over-year. You know that conversion rate will come back and, you know, things will unwind. We'll, you know, we'll get a substantial surge in, you know, revenue growth. I, you know, we do hire ahead of the curve. You know, I think our utilization rate's running in the low to mid 70s, so which is a good place for us. We, we do think it, you know, given the environment, and it will continue for a while, and in fact, we've got a lot of pent-up backlogs that will eventually convert at a more normalized rate. We're going to need the staff, so we like to get, you know, well out in front of that. We, we don't, you know, look at it in terms of, "Well, we're not going to have the activity this next quarter." You know, let's not hire. I, you know, think we have the luxury of being able to look out quite a way, and, you know, we're not trying to defend a particular margin. Got it. Then maybe last question. Your backlog coverage metric improved very nicely. Certainly, was above where we were looking for kind of the, you know, the coverage ratio, as a result of that ticks up a few percentage points. Should we interpret that as a cover, you know, maybe impacted by Q4, Q1, kind of the outer quarters of that timeframe? Or maybe another way to ask the question is the cadence of revenue through the year fairly gradual, or are you seeing because of the impact of what you're describing, pass-through payments, is that more of an immediate impact in 2Q and then a steeper inflection after that? Just trying to get a sense of cadence. Thanks. Yeah, Jesse, you want to? Yeah, Dave, from a cadence standpoint, we still do expect revenue to be slightly back-end weighted, kind of H2 versus H1, as we think about the movement of it through the year. Got it. Thank you. Appreciate the answers. Your next question comes from the line of Erin Wright with Credit Suisse. Your line's open. Great, thanks. There's obviously a lot of commotion in the CRO space right now, several pending strategic reviews and transactions. I assume you don't see a need for a competitive response given your unique focus. Have you already been seeing some benefit potentially from disruption in terms of win rates or customer dynamics or hearing anything from your customers or the number of resumes that you're seeing? I'm curious if you're seeing anything on that front. Thanks. Yeah, sure. I don't think we've seen anything. I think, yeah, we have not heard of any kind of disruptions or work being brought our way because of, you know, concerns or anything like that. The environment is, you know, strong for us anyway. You know, in terms of activity on the recruitment, you know, we have kind of geared up our recruitment. Whether there's, you know, we did hire pretty strongly in the Q1, and we, you know, we got some individuals from that came from competing companies, but I can't say that it was any relation to any of the pending deals. Okay. All right. Then can you speak a little bit to the nature of the new business wins in the Q1, looking at the therapeutic mix or customer mix? Was there anything that was disproportionately like outsized larger contracts that were influencing the new business wins? I'm curious if there's anything to call out on that front. No, I don't think there's anything unusual in terms of size or a therapeutic area. Oncology, you know, kind of led in terms of our awards. I, you know, I don't really see any kind of unusual nature to it. Okay. Perfect. Thank you. Again, ladies and gentlemen, if you have question at this time, please press star then the 1 key on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. Your next question comes from the line of Donald Hooker with KeyBanc. Your line's open. Great. Good morning. Maybe some more granular questions. I'm not sure if I missed this, but the tax rate for this year looks pretty favorable. Can you walk through some of the moving parts there? It looks like you're benefiting from a particularly low tax rate. What would you recommend we expect beyond the current year, kind of on a more normalized basis? Jesse? Yeah. Thanks, Don. Yeah, the Q1 rate is highly influenced by our deduction for employee stock option exercises. Gotcha. T hese are discrete items that we take the deduction in the quarter of the exercise, and these are options largely issued at the time of the IPO that vested in the latter part of last year. We do anticipate some of that to continue. you know, that's why we've lowered our tax rate guidance, you know, from 15% - 16% down to the 12% - 13% range. longer term, you know, I would say, you know, our current, you know, our current longer term tax rate assumption right now is around 20%. That's based on current laws. That does not impact any, you know, early analysis of any of the proposed, you know, changes in tax law that are being considered. Okay. Super. Maybe last, maybe another one from me. In terms of obviously another very topical area, is the use of, you know, virtual clinical trials, decentralized clinical trials, you know, telehealth and those concepts. Would love your kind of maybe broader perspective. This is a question we could probably be asking you every quarter, in terms of any changes you're seeing there in terms of acceptance and use of some of these virtual technologies, with respect to your business and the industry. Jesse, you want to talk about that? Yeah, Don. Nothing that we've really changed, or that we're seeing changing, you know, kind of from last quarter. I think we're operating well in a, you know, hybrid, you know, decentralized environment. You know, we have the tools we need. We're always investing in technology enhancements, you know, for different things like, you know, remote data capture, remote data review, platforms for wearable technologies. You know, those are the themes of kind of where we're, you know, where we're making, you know, some investments, but that's all kind of factored into our ongoing, our ongoing costs. Nothing that we see there that's, you know, any sort of major investment. You know, we're active, and I think, you know, the environment's going to continue to be one, you know, that is operating in some sort of hybrid style, versus what it had been, pre-pandemic. super. Thanks so much. Yeah. Thanks, Don. Again, ladies and gentlemen, if you have question at this time, please press star then the 1 key on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. I am showing no further question at this time. I would now like to turn the conference back to Kevin Brady. Thank you for joining us on today's call and for your continued interest in Medpace. We look forward to speaking with you again on our Q2 2021 earnings call. Thanks, and have a good day. Ladies and gentlemen, this concludes today's conference. Thank you for your participation and have a wonderful day. You may all disconnect.