Good day, ladies and gentlemen, and welcome to the Medpace third quarter 2023 earnings conference call. At this time, all participants are on a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. As a reminder, this call may be recorded. I would now like to introduce your host for today's conference call, Lauren Morris, Medpace's Director of Investor Relations. You may begin. Good morning, and thank you for joining Medpace's third quarter 2023 earnings conference call. Also on the call today is our CEO, August Troendle, our President, Jesse Geiger, and our CFO, Kevin Brady. 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 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 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 the Investor Relations section of our website at investor.medpace.com. With that, I would now like to turn the call over to Jesse Geiger. Thank you, Lauren. Good morning, everyone. Revenue in the third quarter of 2023 was $492.5 million, which represented a year-over-year increase of 28.3%. Net new business awards entering backlog in the third quarter increased 29.9% from the prior year to $611.5 million, resulting in a 1.24 net book-to-bill. Ending backlog as of September 30th, 2023, was approximately $2.7 billion, an increase of 20.3% from the prior year. We project that approximately $1.46 billion of backlog will convert to revenue in the next twelve months, and our backlog conversion in the third quarter was 19.1% of beginning backlog. Now, with that, I will turn the call over to Kevin to review our financial performance in more detail, as well as our guidance expectations for the balance of 2023 and our initial guidance for 2024. Thank you, Jesse, and good morning to everyone listening in. As Jesse mentioned, revenue was $492.5 million in the third quarter of 2023. This represented a year-over-year increase of 28.3% on a reported basis and 27.6% on a constant currency basis. Revenue for the nine months ended September 30th, 2023, was $1.39 billion and increased 30.2% on a reported basis and 30% on a constant currency basis from the comparable prior year period. EBITDA of $90.2 million increased 1% compared to $89.3 million in the third quarter of 2022. Year-to-date EBITDA was $266.7 million and increased 17.1% from the comparable prior year period. EBITDA margin for the third quarter was 18.3%, compared to 23.3% in the prior year period. Year-to-date EBITDA margin was 19.2% compared to 21.4%. EBITDA margin compared to the prior year period was impacted by higher reimbursable costs, personnel costs, and the foreign exchange benefit in 2022 behind the strong US dollar. In the third quarter of 2023, net income of $70.6 million increased 6.9% compared to net income of $66 million in the prior year period. Net income growth ahead of EBITDA growth was primarily driven by a lower effective tax rate of 15.2%, compared to 19.4% in the prior year period, as well as lower interest expense. Net income per diluted share for the quarter was $2.22, compared to $2.05 in the prior year period. Regarding customer concentration, our top five and top ten customers represent roughly 23% and 29%, respectively, of our year-to-date total revenue. In the third quarter, we generated $114.4 million in cash flow from operating activities, and our Net Days Sales Outstanding was -42.2 days. During the quarter, we paid off our outstanding debt, and we have $95.2 million in cash as of September 30th, 2023. Moving now to our updated guidance for 2023. Full year 2023 total revenue is now expected in the range of $1.87 billion-$1.89 billion, representing growth of 28.1%-29.5% over 2022 total revenue of $1.46 billion. Our 2023 EBITDA is now expected in the range of $353 million-$361 million, representing growth of 14.6%-17.2% compared to EBITDA of $308.1 million in 2022. Guidance is based on foreign exchange rates as of September 30th, 2023. We forecast 2023 net income in the range of $272 million-$276 million. This guidance assumes a full year 2023 effective tax rate of 16.25%-17.25% and 31.8 million diluted weighted average shares outstanding for 2023. There are no additional share purchases in our guidance. Earnings per diluted share is now expected to be in the range of $8.54-$8.66. As Jesse mentioned, we are providing initial 2024 guidance for revenue and EBITDA. For the full year 2024, we expect revenue in the range of $2.15 billion-$2.2 billion and EBITDA to be in the range of $390 million-$415 million. In addition to continued growth in direct service activities, the revenue guidance anticipates investigator site activity and costs remain elevated, similar to what we have seen recently in 2023. We plan to provide additional detailed full year 2024 guidance on our fourth quarter earnings call in February. With that, I will turn the call back over to the operator, so we can take your questions. Thank you. To ask a question, please press star one, one on your phone and wait for your name to be announced. To withdraw your question, please press star one, one again. One moment, please, for our first question. Our first question will come from Max Smock of William Blair. Your line is open. Pardon me, Mr. Max Smock, your line is open. If your phone is on mute, please unmute your line. If you're on a headset, please turn on your headphones. Hello, Mr. Smock of William Blair, are you able to hear me? Operator, we can move on to the next and get Max back in the queue. Thank you. Again, Mr. Smock, if you want to get back in the queue, please hit star one, one again. One moment, please. One moment for our next question. Our next question will come from Dave Windley of Jefferies. Your line is open. Hi, hopefully, you can hear me working. Yeah, we hear you, Dave. Okay, fantastic. Great. Good morning. Thank you, thank you for taking my questions. I wondered if you could comment a little bit on environment. The, you know, kind of the rate of biotech restructuring announcements and things of that sort has attenuated, maybe ever so slightly in 2023. Your, you know, everybody, I think, is aware that your exposure to that part of the customer base is pretty high. So I wondered if you could comment on that, maybe qualitatively and then quantitatively. You know, are you seeing more activity at the beginning of the funnel? Are you seeing your win rates improve? Like, from a metric standpoint, what would you attribute to your booking success? Thanks. Sure. Sure, Dave. Yeah, the environment is kind of hard to comment on because it's pretty variable. I mean, we're still seeing quite a bit of funding challenges by clients. And, you know, we've been through a period of a lot of clients in distress and a number of bankruptcies and challenges. I think that's actually de-risked our backlog quite a bit of those that are going to have a problem. I think most of them have. And on the other side, we're seeing very strong business environment, you know, just surprisingly. You know, to see the disparity is amazing. We have a very strong RFP flow. I think our RFPs, it y ou know, total RFPs pending is the second highest we've ever had. And, you know, to fill the pipeline. You know, new awards, initial awards, as we've talked about, that were awarded in Q3, were a record, highest we've ever had. So we're seeing great business environment and a horrible business environment, so, I don't know. It's just kind of schizophrenic. Yeah. Interesting. So it would suggest that you're able—I mean, that you're taking share. You must be able to, you know, find enough of the positive ones to offset the absence of clients that are being hit by the financial concerns. Any color that you could provide around, you know, sales strategy or investment in sales force more recently? I know you did that years ago, but has there been, you know, further investment to try to cultivate more opportunity? No, I wouldn't say investment in terms of, you know, expanding the size and breadth of the group. I think we're in pretty good shape there. I think we're much better able to address the challenges this time because I think we were scaled. And, you know, there has been, you know, quite a bit of shifting focus to, you know, funding capabilities on the client's part. So we have moved to a, you know, to a somewhat different subset of, you know, small biotech that has, you know, funded programs. But that's really it. It's just kind of been a pivot on that side and found lots of opportunities despite the environment. Okay. Last question for me. The, the pass-through, the elevated pass-throughs, have, have maybe persisted to a greater degree than, than you expected. Can you talk, talk to that a little bit? Has the composition of work changed? Is it more client...? I, I guess I'm, you know, wondering, is it a therapeutic area thing where, you know, where the work that you're doing has just naturally has more pass-through associated with it? Is it an inflationary environment at the site level where, you know, those activities are just costing more, or are you being asked to do that more? I'm just trying to understand, you know, why the significantly elevated pass-through growth and, and your expectations for that to continue. Thank you. Yeah, I think it's kind of a combination of all the above. There's been quite a bit of inflationary changes, particularly in some therapeutic areas, and part of that's competition and all the rest of it. I think investigator fees have gone up as a percent of, you know, budgets and, you know, higher percent than our costs. I think there's obviously, you know, the mix of phase threes and, you know, large studies and, particularly, maybe more expensive patient populations have been a factor, too. But, you know, I think it's really a combination of, therapeutic area, the type of study, the, you know, cost to the patient and, inflationary factors that are all, driving up, you know, the pass-through, the pre-funded investigator costs. I think that may, over time, you know, lessen a little, but I, you know, I think kind of the percent of, investigator, fees as a proportion of the total projects may remain elevated for quite a while. Okay, great. Thank you. Thank you. One moment, please, for our next question. Our next question will come from John Sourbeer of UBS. Your line is open. Thanks for taking the question. You know, I guess just following up there a little bit on the beat in the quarter and just some of the disclosures. You know, it seems like mid-size biotech and metabolism are very strong, and I guess, you know, also coupled with those large pass-throughs. You know, is the beat mostly driven by a couple larger studies, or are you seeing, you know, broad-based strength here currently? It's pretty broad-based. We don't have... Yeah. Jesse, go ahead. Yeah, I was gonna say it's broad. It's not concentrated in any one study, and metabolic has been running pretty hot the past couple of quarters, and it's continuing to contribute, but plenty of good contribution from other therapeutic areas as well in the quarter. Thanks. And you know, funding was pretty good in 2Q, but raise rates are higher again. You know, any additional color you can provide on where you see the funding environment going, maybe in the second half of this, or I guess, for the remainder of this year or into next year? And could there be any impact there on a lag basis? I'm sorry, the funding and how that might play out going forward? Yeah, just what, what are your expectations around maybe for 4Q and then, for next year? Things look strong. As I said, we got, you know, record kind of levels of both RFP and awards, and you know, we had a drop-off in awards, you know, so you know, Q4, Q1, you know, we had kind of a very weak time period, and it was all a question of how quickly we could refill things compared to the food moving through the python kind of thing. I think things look pretty good, and we won't see a drop-off, and you know, we're hoping that the business environment holds up, and we'll have a very strong 2024. Thanks. And, you know, last one here on my end. Just any additional color you can provide on the 2024, even the margin guidance, and just remind us, even over the long term, I guess, you know, what is the margin expansion opportunity there or a target level? Yeah, John, this is Kevin. You know, I don't expect-- I mean, it's gonna be somewhat contingent on, you know, what happens with the reimbursable activities, right? Just given the impact that that has on margin percentage. But I-- if that levels off and kind of remains elevated, consistent to where we were in the past, you know, couple of quarters here, I don't expect there to be a margin expansion. You know, we still have some level of pressure from wage and benefit inflation. So I don't see 2024 as being a huge margin expansion opportunity. Then I guess, you know, even beyond 2024, any, any color on where long-term targets? I mean, it just depends. I mean, we've kind of said it, if things kind of normalize to something in the high teens, but, you know, it remains to be seen just in terms of what the environment and what hiring looks like, too. Great. Thanks for taking the questions. Thank you. One moment, please, for our next question. Our next question will come from Eric Coldwell of Baird. Your line is open. Thank you. Good morning. Just a few quick ones here. On the wage inflation, my understanding was that it had peaked a few quarters ago and was still elevated, but starting to perhaps moderate a bit. Has that continued? Do I understand that correctly? Hey, Eric, that's right. Kind of mid- to high-single-digit. What, Jesse, what do you see on the, you know, next 12 months? Stable at these levels, perhaps some continued moderation? Just any sense on what the outlook is. Yeah, I, I think stable at these levels. You know, at this, at this point, I don't see anything that would drive that, higher or lower. You know, the, the markets, you know, from a hiring standpoint, is, is more stable than it has been in the past. We've also had good success with, lower turnover. So employee base is stable. We're continuing to grow, but, but wage, wage pressures have, have moderated a little bit, and I would expect it to be, you know, fairly consistent. Okay. And then, in terms of cancellation profile, if I missed this, I apologize, but, have you returned fully to normal levels, which I believe are somewhere in the 4%-5% of backlog, or, what's going on with the cancellations? Anything abnormal there? Yeah, we're normal level. Pretty well back to normal, at least for the third quarter and, you know, towards the lower end of that range. Okay. And then, hit rate, you know, my understanding from our visit a month or two ago was that hit rate was back to solid, but normal levels. Has that continued? And have you seen any change in rescue award activity? There was a lot of disruption in this sector over the last couple of years, and some of your peers had, obviously, were giving up some work. I'm just curious what the rescue activity looks like these days. No particular rescue activity. It's been very little. And yeah, it's been pretty mild. Okay. Last one, and I hate to go there. It's unfortunate circumstance, but I am curious about your Middle East exposure, just in case the situation that's unfolding continues to escalate. What kind of concentrations or exposures might you have in the Middle Eastern region? Yeah. Thanks, thanks for asking, Eric. You know, all of our Israeli employees are safe and accounted for. People working remotely at this point. Our concentration there, it's less than 1% of our total headcount and less than 1% of active sites, but activity is continuing, and we're keeping a close eye on it. Okay. Thanks very much, guys. Congrats on the good performance. Thank you. One moment, please, for our next question. Our next question will come from Jack Wallace of Guggenheim Partners. Your line is open. Hey, thanks, and congrats on the quarter. Couple questions here. One around headcount. Looks like we're trending to the mid- to high-teens growth rate this year. And given the strength of the RFP awards in the pipeline you mentioned earlier, do you think this is the right level of headcount growth over the next year or so? Or, you know, maybe said a different way, are we yeah on plan with hiring now? Is there any catch-up that's needed? Thank you. Yeah. Thanks, Jack. Yeah, would expect headcount here for the balance of the year to remain in that mid- to high-teens level. And then for 2024, we anticipate headcount growing in line with revenue. Gotcha. That's helpful. And then just, you know, thinking about the, you know, the comments. You know, on the one hand there's, you know, maybe some of the, you know, the less promising, you know, lead targets and lesser funded companies have kind of sorted themselves out. But it does sound like, you know, promising lead candidates are getting funded, and, you know, there's a good amount of jump balls for you to go after. Have you, I mean, had to have any, you know, changes in your selectivity of trials, and if so, has that played any role in your hiring plan? And just thinking about how much hiring ahead is taking place. Thank you. Yeah, I mean, we continue to be selective always in terms of targets and opportunities. But its impact on hiring plans not too much of an impact. You know, I think we're well-positioned for current work. We're well-positioned with our hiring plans for upcoming work, and we've had really good retention, and that's really helped us as well in terms of the capacity that we have for trials. We've had good employee retention, and that's always easier than hiring and onboarding new people. Yes, the hidden cost of the running the business. It and then just kinda lastly here, just a more of a housekeeping item. It looks like the your customers 6-10 were down sequentially, you know, from a revenue standpoint. Just wondering if there's any just trial roll-offs in there or kinda any kinda noise factors. Just looking historically, yeah, at the top 10 and really the 6-10 category, looks like there's been some trading between, you say, the top five. It didn't look like there's, you know, a graduate this year. So just wondering if there's any kinda timing nuances or anything going on there. Thanks. Yeah. Yeah. I don't think there's anything, and I maybe we shouldn't provide the detail. I don't know. It's like you can't... It's a different subset of companies every time. You know, you're comparing apples to oranges. I guess you're looking at a nine months 2022 versus a nine months 2023. I mean, if you look at it quarter by quarter, you know, which revenue is coming from our sixth to, you know, client six to 10, it's increased sequentially every quarter, you know, over the past year. I really don't, y ou know, it's companies move in and out and up and down, and, you know, it's by the quarter, and you're looking at a three-month, you know, you're looking at a three-quarter, you know, trailing, and it's, I just don't think there's anything there that's meaningful or represents any large roll-off or anything like that. Gotcha. Thank you. Appreciate it. Congrats, congrats again on the quarter. Thanks, Jack. Thank you. As a reminder, to ask a question, please press star one, one on your phone and wait for your name to be announced. To withdraw your question, please press star one, one again. One moment, please, for our next question. And again, we have on the line, Max Smock of William Blair. Your line is open. Hi, thank you for coming back to us. Can you hear me? Yes. Okay, great. Thank you. It's Christine Rains on for Max Smock. So I was wondering now that you've paid off your debt, how should we think about capital allocation moving forward? And then also relatedly, how much interest income could you earn next year? Yeah, the capital allocation policy or kind of our methodology, Christine, will remain the same, continued investment in the organic growth of the business. In 2024, in the next couple of years, we will have some increased capital expenditures related to the expansion of our headquarters here in Cincinnati. But beyond that, we'll opportunistically look for share purchases. To the extent that we're not able to execute that at the levels that we want, we're okay building some cash. And to your question on kinda interest and how to think about that, I think the simplest way is to kinda think of it as, you know, in current rates, a blended rate of kinda 4.5% or so is a reasonable assumption to build into your model. Great. Thank you. And then, not to dig too deep in the details, but it seems like you had a relative jump in your metabolic exposure. It sounds like it wasn't just one larger study, so hoping you can give any color there. Yeah, Christine, a couple studies in the category have been burning really well. You know, it's you know, nothing to call out there other than this year, we've had good success in the space over the past couple of quarters, and that's continuing. Great. Thank you. That's all for us. Thank you. This will end the Q&A portion of today's conference. I would now like to turn the conference back to Lauren Morris for closing remarks. Thank you for joining us on today's call and for your interest in Medpace. We look forward to speaking with you again on our fourth quarter 2023 earnings call. This concludes today's conference call. Thank you all for participating. You may now disconnect and have a pleasant day.