Good day, ladies and gentlemen, and welcome to the Medpace Fourth Quarter and Full Year 2023 Earnings Conference Call. At this time, all participants are in 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 fourth quarter and full year 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. Our revenue for the fourth quarter of 2023 was $498.4 million, which represents a 26.5% year-over-year increase. Full year 2023 revenue was $1.89 billion, a 29.2% increase from 2022. Net New Business Awards entering backlog in the fourth quarter increased 26.7% from the prior year to $614.7 million, resulting in a 1.23 net book-to-bill. For the full year 2023, Net New Business Awards were $2.36 billion, an increase of 28.8%, and ending backlog as of December 31, 2023, was approximately $2.8 billion, an increase of 20.2% from the prior year. We project that approximately $1.53 billion of backlog will convert to revenue in the next twelve months, and backlog conversion in the fourth quarter was 18.5% of beginning backlog. Now, with that, I will turn the call over to Kevin to review our financial performance in more detail and discuss our 2024 guidance. Kevin? Thank you, Jesse, and good morning to everyone listening in. As Jesse mentioned, revenue was $498.4 million in the fourth quarter of 2023. This represented a year-over-year increase of 26.5% on a reported basis and 26% on a constant currency basis. Full year 2023 revenue was $1.89 billion, an increase 29.2% on a reported basis and 28.9% on a constant currency basis from 2022. EBITDA of $95.8 million increased 19.2% compared to $80.4 million in the fourth quarter of 2022. Full year EBITDA was $362.5 million and increased 17.7% from the comparable prior year period. EBITDA margin for the quarter was 19.2%, compared to 20.4% in the prior year period. Full year EBITDA margin was 19.2%, compared to 21.1% in 2022. EBITDA margin compared to the prior year, was impacted by higher reimbursable costs, personnel costs, and the foreign exchange benefit in 2022 behind the strong US dollar. In the fourth quarter of 2023, net income of $78.3 million increased 14% compared to net income of $68.7 million in the prior year period. For the full year 2023, net income was $282.8 million, compared to $245.4 million in 2022, which represents a 15.3% increase. Net income growth lagging EBITDA growth was primarily driven by a higher effective tax rate of 15.8%, compared to 13.3% in the prior year period. Net income per diluted share for the quarter was $2.46, compared to $2.12 in the prior year period....For the full year of 2023, net income per diluted share was $8.88, compared to net income per diluted share of $7.28 in 2022. Regarding our customer concentration, our top five and top 10 customers represent roughly 23% and 30%, respectively, of our full year 2023 revenue. In the fourth quarter, we generated $156.4 million in cash flow from operating activities, and our Net Days Sales Outstanding was -48.3 days. We did not repurchase any shares during the fourth quarter. For the full year 2023, we repurchased approximately 781,000 shares for $144 million. As of December 31, 2023, we had $245.4 million in cash and $308.8 million remaining under our share repurchase authorization program. Moving now to our updated guidance for 2024. Full year 2024 total revenue is expected in the range of $2.15 billion-$2.2 billion, representing growth of 14%-16.7% over 2023 total revenue of $1.89 billion. Our 2024 EBITDA is now expected in the range of $400 million-$430 million, representing growth of 10.3%-18.6% compared to EBITDA of $362.5 million in 2023. We forecast 2024 net income in the range of $326 million-$348 million. This guidance assumes a full year 2024 effective tax rate of 16%-17%, interest income of $18.4 million, and 32 million diluted weighted average shares outstanding for 2024. There are no additional share purchases in our guidance. Earnings per diluted share is now expected to be in the range of $10.18-$10.87. Guidance is based on foreign exchange rates as of December 31, 2023. With that, I will turn the call back over to the operator, so we can take your questions. Thank you. As a reminder, to ask a question, please press star one, one on your telephone and wait for your name to be announced. To withdraw your question, please press star one, one again. Please stand by while we compile the Q&A roster. Our first question comes from David Windley with Jefferies. Your line's now open. Hi, good morning. Thanks for taking my questions, and congrats on another good year. I gather from the absence of August's comments at the top of the call that things must be fairly stable and unchanged, but would invite those comments. What we've heard from some peers is some slowing of activity in the second half of 2023, particularly maybe the last couple of months of 2023 in the biotech space, and I guess wondered if you at Medpace had seen that also, or if you were seeing a different trend. Thanks. Yeah, I did. This is August. Yeah, I think I said last quarter that things were kind of going in a lot of different directions at once, you know, kind of very fast, but you need a lot of difficulty and a lot of very strong business environment. I think, you know, we've kind of in Q4 and coming into, you know, Q1 of 2024, but I think we've got a clear direction on that. I think things are improving from a funding standpoint. A number of stalled projects are now moving forward. You know, things that we thought were kind of just held up with, you know, weren't going to get financing are starting to move. So I think we're, you know, it's still a, you know, a post-volatile period and, you know, there may be more volatility, but I think, we're more and more seeing a trend towards, improvement on the funding side and project progression side. And of course, these things take quite a while to get the backlog and, and to, you know, generate, you know, meaningful revenue. So, you know, I think we're setting up, you know, largely a lot of this, you know, this is set up for 2025, in fact. But, I do think that things have improved quite a bit. I think there was a very volatile time there in Q3, certainly, and, you know, extending into Q4, but I think things have turned a direction. Got it. That's helpful. And then just to follow up, and I'll yield. If I look at what has, for you guys, been a pretty consistent burn rate, you're entering 2024 at a 20% backlog growth. That revenue growth rate that you're projecting is a little lower than that, so it seems like you're allowing for some moderation in the burn rate. But then you also were a little lighter than you have been on hiring in the fourth quarter, and so I just wanted to kind of understand that confluence of issues. A lot of times you would, if you're thinking revenue acceleration, you'd be accelerating hiring, and vice versa. So just the interplay between, you know, your expectations around revenue growth and burn out of backlog versus your hiring status at the moment? Sure. Yeah, yeah, Dave, it. You know, I think our burn rate, our, you know, conversion rate does bounce around a bit, and I, it was, what, 17.6% last, you know, Q4 of 2022. You know, and then kind of, you know, went up quite a bit, I guess, all the way to, you know, over 19% in Q3. And I, you know, I think it kind of is in that sort of band, but, you know, there is a difference. It kind of, you know, moves around a bit. I don't see a as you mentioned, you know, it is relatively stable. In terms of long term, I don't think we see a you know a long-term trend towards it dropping and dropping like many other CROs have. But you know it does it does bounce around a little bit. You know the the staffing is you know need is is gonna be driven by our you know revenue growth. You know kind of looking at direct revenue. You know we're looking -- last year we had you know we were looking at growth above 20%, and this year in 2024 we're looking at growth of you know let's say roughly 15% in on top line and total as well as direct roughly. So that's gonna drive a staffing need of about 10% increase. You know, it's not that they aren't indirectly in line. There's inflation and all the rest of it that you know adds into that, and also productivity. I think you know lower turnover is driving you know quite a bit of savings and productivity gain. So I think we got a bit ahead when we were growing very fast. We have to you know hire quite a bit in advance. And so you know I think we got a bit ahead in terms of staffing. I think we're looking at about 10% growth this year. I think it will accelerate as, you know, backlog grows and we get toward 25, and I think our 15% growth this year is kind of a bottom, you know? I mean, I just think it will move up from there, and so, you know, hiring will then. But I think we have the time to do that, and we don't need to do it in the, you know, next few quarters in anticipation of a, you know, Q2 or Q3 spike. So, you know, I think that's kind of where we are on that, the staffing and conversion. Okay. That's helpful. Thank you. Thank you. One moment for our next question. Our next question comes from John Sourbeer with UBS. Your line's now open. Yeah, this is Lucas on for John Sourbeer. I guess first off, any updates on how RFPs are tracking? I believe those were said to be near record levels at 3Q. Yeah, and you know, we gave a lot of kind of interim metrics in the volatile period, because you know, I think everyone wants more insight into what's going on and, you know, everything we know, and even though, you know, a lot of these metrics are difficult to decipher. So, you know, we're trying to avoid, you know, kind of giving, you know, getting too much into the weeds, what we got before. But yeah, just to, you know, give you an idea, they remain strong. You know, they were very strong last quarter. You know, we, as said, you know, kind of the initial awards were, you know, kind of record and, you know, RFPs were very strong, et cetera. I think things have continued on a certainly on a year-over-year basis, still very strong. You know, coming off of what was a strong business environment in Q3, I think it's kind of continued to be a reasonably strong business environment in Q4. Okay, great. And then just one last question: you know, pass-throughs as a percentage of revenue looked like they were, you know, about the same as last quarter. I guess, any additional color on what's driving the elevated level of pass-throughs, and when you could expect that to normalize? Kevin? Yeah, as we said, kind of in the last quarter, it's really driven by, you know, a couple of things. One is just inflationary costs that we're seeing at investigator sites. Just the activity in investigator sites is picking up, and, you know, really just the mix of projects that we have in place and in some large Phase 3 studies are really driving that acceleration. And we do expect those elevated costs to continue into 2024. Now, you know, when or if we'll see a retraction back to more normal levels, you know, it remains to be seen, but we do expect it to remain elevated here through 2024. Okay, great. That was all I had. Thank you. One moment for our next question.... Our next question comes from Max Smock with William Blair. Your line's now open. Hey, good morning, guys. Thanks for taking my questions. So just following up on Dave's question on headcount earlier. August, you mentioned about 10% growth in 2024, but in the past, I think you've talked about headcount growth being more in line with the mid-teens revenue growth that you're expecting this year. So I know you talked about it some already, but just wondering if there's anything else that's enabled you to pull back some on those hiring plans a little bit. Is it due to a lower outlook for direct fee revenue next year or this year? Or is it more just due to maybe some of the efficiencies you've been able to drive more recently as you've scaled the business? Yeah, I think a lot of it, you know, compared to our first look is turnover. You know, turnover has really come down to a very, very tight level. And, you know, the amount you have to hire in advance, you know, kind of ahead of the curve, you know, depends upon you know keeping staff. You know, I mean, there's a lot of if there's a lot of churn, there's a lot of, you know, hiring, and you gotta, you know, go in with a much higher number in terms of staff to, you know, beginning of the year. I so I think the big, you know, driver is that, you know, productivity increase. I think that we were thinking that turnover, you know, might still be hot, so we'd have to continue to hire at a fast rate. But, you know, turnover's, you know, dropped very nicely, and that is the biggest driver. I think our expectations on direct revenue is the same as it was. We, along with our revenue, we expected it to be about that 15%, both on the top line and and you know, total and direct. And with anything, we see a improvement in the business environment, which would imply greater growth in, you know, in the Q4, you know, next year kind of time frame. You know, these things do take quite a bit of time, but things are looking very good for that. And that's why I say I think we're looking at a low in terms of a growth year of 15%. So I think that will take off, but I think we have time to do that, you know, hiring, you know, as things ramp late in the year. Yeah, makes sense. And maybe just segueing off that. So, wanted to drill in a little bit on some of the drivers behind the increased outlook for EBITDA next year, given you didn't change your outlook for revenue. And it sounds like your expectations for direct fee versus pass-throughs are, are consistent from that initial guide. And so beyond maybe a pullback in hiring relative to your initial expectations, is there anything to call out in terms of what's driving that, increased outlook for EBITDA in 2024? Yeah, yeah, Max, and, and of course, you know, we're not giving guidance on, on 2024, but, you know, things look good in terms... You know, we had a very choppy period and, you know, quite a bit of, cancellations and, you know, funding, difficulties, and that's, that's moving away. Like I said, I think we see a clear direction in the last, you know, three, four months, in terms of, you know, projects starting to install, and that makes us very optimistic. You know, these, again, these things take quite a while to get to, start up and to get to revenue burn. You know, I mean, these are multiple quarters, you know, for things to, to move forward, but, that does make us feel more optimistic on, you know, the, the go forward, next year, et cetera. Yeah, and then maybe just sneaking a final one in here for me. Competition and just thinking about share gains here, August, when, you know, we talked at the end of last year, you mentioned seeing higher quality opportunities maybe than you have in the past and winning a greater share of those than maybe you would have expected historically. Just wondering if that has continued here, given maybe some potential disruptions from one of your competitors recently? And just any thoughts on how your win rate has trended over the last couple quarters in particular. Yeah, our win rate has been very good the last two quarters, above the kind of the long-term trend. So, you know, that looks good. You know, I don't... You know, these things do bounce around, though, and, you know, I look at, if you want to look at share, I look at revenue, you know, and that's the only way I know how to look at it. You know, people have backlog different ways, and, you know, conversion is a major factor. And, you know, I don't know what, you know, it means to be, you know, share gain, to put up a book-to-bill. So I just look at revenue and revenue trend over time. And look, we're, you know, we're growing organically at multiples of, you know, the average of the rest of the industry. So I just, you know, we're clearly, you know, doing a good job in terms of taking, you know, share. Where it's coming from, I don't know, but, you know, we're growing at a rate considerably above the peers, and we will continue to, you know. And, you know, this may be a low year of 15%, but, you know, long term, you know, we've grown well above the industry. Got it. Thank you for taking our questions. Thank you. One moment for our next question. All right, next question comes from Jack Wallace with Guggenheim Partners. Your line's now open. Hey, thanks for taking my questions, and congrats on another great quarter. You know, it sounds like things are getting better on the demand front. Just wondering if you could also just touch on cancellations, how those tracked in the quarter, and, you know, I guess, depending on, you know, the funding environment, it sounds like those should be in a pretty good shape as well. Is, is that, fair to say that it's baked into the outlook, kind of a more normalized, reduced level of cancellations in the last couple of years? ... Cancellations were at a, you know, in a good range, well within our, you know, usual range. You know, I don't know if that's driving any particularly. You know, we had a spike in 2022, but things came down, you know, after, maybe after first quarter, you know, to a, you know, reasonable rate in the, you know, Q2 through Q4. And, you know, as far as I... You know, we kind of expect them to stay in that usual range of less than 4.5%. Yeah, the expectation for 2024 is it stays within our normal range. Thank you. That's helpful. And then, you know, the comments you made earlier, August, about the, you know, kind of acceleration of decisions essentially just around, you know, funding and the like. But I, you know, I did notice that your customers out of your top ten looked like they were down sequentially in the quarter in terms of revenue, and wasn't sure if that combo was aimed more at that cohort or if there was anything else, you'd call out, with that revenue trend. Because it does sound like everything you're saying is that things are going well and seem to get better and expected to get even better than that. So I just wasn't sure if there was anything to call out from a customer cohort standpoint. Thank you. No, I really don't have anything. Of course, if the smaller clients are starting to unfreeze, you know, eventually that leads to a proportional reduction in top 10 revenue because you get other, you know, newer clients coming in. But, I think it's too early to expect that, but I don't, you know, I don't make anything out of it. Excellent. Thank you so much. Appreciate it. Thank you. One moment for our next question. Our next question comes from Eric Coldwell with Baird. Your line's now open. Thanks. Good morning. First question, just hoping for an update on the labs business and maybe early clinical. Just, you recently made some internal expansions, brought some work in-house, microbiology, certain parts of pathology, I believe. I was just curious about the traction there and ability to cross-sell those new solutions. Yeah, Eric, it's Jesse. No, the lab's growing nicely, you know, along with the business. You know, the expansions in terms of investments in the lab, you know, we've been kind of around the globe with different, you know, different parts of our geography, you know, needing expansions, which for the lab tend to be on a more step basis. You know, it's not as linear every year, but, you know, we outgrow areas, and we're always looking at the full suite of offerings, whether that's, you know, standing up a specific test or an assay or bringing in wholesale capabilities. And, you know, the things we've invested in recently and things we've added, you know, have been off to a good start. Good to hear. Next question, revenue phasing. So a bit of a setup here, may be wonky, but hopefully you can muscle through it with me. So on one hand, really tough comps going into 2024. I mean, the first half of last year, you grew over 31%. At the same time, 15% revenue guidance, consistent, very good, excellent compared to the peer group. I'm just curious, you know, 26%-27% growth in the fourth quarter, do we drop immediately here in the first quarter and then recover, or not recover, but reaccelerate in the back half as the funding and the demand is strong and you think things are going to pick up? There was a mention of a better fourth quarter. Or do you start stronger and phase down through the year? I'm just trying to get a sense on how to model this revenue phasing, given, one, tough comps, but two, the most recent quarter, you grew nearly 27%. So where do we go here in Q1 and, and then phase through the year? Yeah, Eric, this is Kevin. You know, I think as you think about the quarters, and you know that we're our quarters can be very lumpy, you know, even from a revenue perspective. And so there's nothing that I would call out necessarily specifically in terms of, you know, do we see an acceleration in Q1 and a drop-off, or do we kind of see steady state, you know, throughout the quarter and you see sequential growth, you know, throughout the quarters? You know, I guess I don't know the answer to that. As August had mentioned, if things do pick up, there's a possibility that you start to see some acceleration in the fourth quarter and into 2025, but nothing specific to call out. I do think the first quarter, you know, from a margin perspective, is likely to be better, you know, than the balance of the year, similar to what we saw this year, just because some of the wage inflation pressures will pick up again in the end of the first quarter, beginning of the second quarter this year. But nothing else specific to call out on that front, Eric. Okay. You know, the market's been extremely focused on this GLP-1 category, and we hear a lot about the big pharmas that are active in that space, but there are lots of trials out there, and Medpace has a notable history in metabolic. I'm just curious, you know, are you seeing some trial demand in GLP-1s? Are you participating in that market? Is it a contributor to any of your, you know, your win rates or your RFPs? I'm just trying to get a sense on how impactful that's been, if at all, to this point. ... Yeah, we're not really have much of any exposure to GLP-1 directly. You know, obesity overall, a little bit more, but you know, GLP-1s are largely a large pharma phenom- Yeah. In terms of the dollar spend and so have not been a meaningful part of our revenue, no. That's actually somewhat reassuring, and good, I think. Last question. We have seen a number of companies this quarter that, we find out, you know, maybe somewhat after the fact that, OpEx looked a little high in the quarter, and we got some pickup below the line. We weren't quite sure why. I wouldn't call it a big, notable item at Medpace this quarter, but I am curious if you had any unusual items running through the PNL or abnormally large changes in the PNL due to things like deferred compensation adjustments or anything else? That'll be my last one. Thank you. Yeah, Eric, nothing on deferred compensation. We don't have a deferred comp program. Yeah. I do. Yeah. The stuff that for us, that's sitting in, in kinda miscellaneous income, you know, it's, it's primarily gonna be foreign exchange or VAT, or, and we do have some investments, you know, that, that roll through there as well. And, and the volatility is typically caused by FX. But nothing, nothing specific to call out in, in that particular area, just kind of the normal fluctuations that we see in those, those three buckets quarter to quarter. All right. But nothing- Well, great stuff. Great job. Thanks, guys. Thanks, Eric. Thank you. This concludes today's conference call. I would now like to turn it 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 first quarter 2024 earnings call. Thank you for participating. You may now disconnect.