Good day, ladies and gentlemen, and welcome to the Medpace fourth quarter and full year 2024 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's remarks, there will be a question-and-answer session. If you'd like to ask a question, please press star 11 on your phone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 11 again. As a reminder, this call is being recorded. And now I'd like to introduce your host for today's conference call, Lauren Morris, Medpace Director of Investor Relations. You may begin. Good morning, and thank you for joining Medpace's fourth quarter and full year 2024 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 August Troendle. Thank you, Lauren. Good day. Backlog cancellations in Q4 were within our normal range. Our book-to-bill ratio was 0.99, influenced by prior pipeline cancellations as well as the delay of some projects previously expected to enter backlog. RFPs were down slightly in Q4 compared to Q3 as the overall business environment weakened somewhat but remained up relative to Q4 2023. For the 2024 calendar year, backlog increased 3%. However, total awards and outstanding unperformed work, considering both backlog and pre-backlog awards, was down slightly. This reflects the high level of cancellations we experienced in 2024. All this provides a challenging backdrop to growth in 2025. Assuming cancellations remain in our historical range and the business environment does not continue to deteriorate, we remain hopeful that we can achieve growth in bookings with a book-to-bill ratio above 1.15 in the second half of the year. Revenue growth for 2025 is expected to be in the low single digits. I will now turn things over to Jesse for comments on Q4. Thank you, August. Good morning, everyone. Our revenue in the fourth quarter of 2024 was $536.6 million, which represents a year-over-year increase of 7.7%, and full year 2024 revenue was $2.11 billion, an 11.8% increase from 2023. Net new business awards entering backlog in the fourth quarter decreased 13.8% from the prior year to $529.7 million, resulting in a 0.99 net book-to-bill. For the full year 2024, net new business awards were $2.23 billion, a decrease of 5.4%, and ending backlog as of December 31, 2024, was approximately $2.9 billion, an increase of 3.2% from the prior year. We project that approximately $1.63 billion of backlog will convert to revenue in the next 12 months, and backlog conversion in the fourth quarter was 18.3% 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 2025 guidance. Kevin. Thank you, Jesse, and good morning to everyone listening in. As Jesse mentioned, revenue was $536.6 million in the fourth quarter of 2024. This represented a year-over-year increase of 7.7%. Full year 2024 revenue was $2.11 billion and increased 11.8% from 2023. EBITDA of $133.5 million increased 39.3% compared to $95.8 million in the fourth quarter of 2023. Full year EBITDA was $480.2 million and increased 32.5% from the comparable prior year period. EBITDA margin in the fourth quarter was 24.9% compared to 19.2% in the prior year period. Full year EBITDA margin was 22.8% compared to 19.2% in 2023. EBITDA margin for the quarter and for the full year were favorably impacted by reimbursable cost, which decreased by 400 basis points and 180 basis points respectively from the comparable prior year periods. EBITDA margin also benefited from direct service activities and productivity on slower headcount growth. The fourth quarter saw additional benefit from foreign exchange behind the strengthening of the U.S. dollar in the quarter. In the fourth quarter of 2024, net income of $117 million increased 49.5% compared to net income of $78.3 million in the prior year period. For the full year 2024, net income was $404.4 million compared to $282.8 million in 2023, which represents a 43% increase. Net income growth ahead of EBITDA growth was driven by interest income and a lower effective tax rate. Net income per diluted share for the quarter was $3.67 compared to $2.46 in the prior year period. For the full year 2024, net income per diluted share was $12.63 compared to net income per diluted share of $8.88 in 2023. Regarding customer concentration, our top five and top ten customers represent roughly 22% and 29%, respectively, of our full year 2024 revenue. In the fourth quarter, we generated $190.7 million in cash flow from operating activities, and our net day sales outstanding was negative 71 days. As of December 31, 2024, we had $669.4 million in cash. During the fourth quarter and full year 2024, we repurchased approximately 527,000 shares for $174.2 million. At the end of the quarter, we had $134.6 million remaining under our share repurchase authorization program. Moving now to our guidance for 2025, full year 2025 total revenue is expected in the range of $2.11 billion-$2.21 billion, which represents flat to 4.8% growth over 2024 total revenue of $2.11 billion. Our 2025 EBITDA is expected in the range of $462 million-$492 million, representing a decline of 3.8% to growth of 2.5% compared to EBITDA of $480.2 million in 2024. We forecast 2025 net income in the range of $378 million-$402 million. This guidance assumes a full year 2025 effective tax rate of 18%-19%, interest income of $30.5 million, and $31.7 million diluted weighted average shares outstanding for 2025. There are no additional share repurchases reflected in our guidance. Earnings per diluted share is expected to be in the range of $11.93-$12.69. Guidance is based on foreign exchange rates as of December 31, 2024. With that, I will turn the call back over to the operator so we can take your questions. Certainly. And our first question for today comes from the line of Dan Leonard from UBS. Your question, please. Thank you. A couple of questions. First off, on the service gross margins in the quarter, I understand the pass-through mix component. I was hoping you could elaborate on some of the other factors that drove the outperformance on that line, whether they be headcount related or otherwise. Hey, Dan, this is Kevin. No, it's really just the productivity of our existing staff and the programs that are in backlog progressing very nicely. And so it's really the kind of the second quarter that we've seen great progress on the direct service side. Okay. And then as a follow-up, what are the assumptions that would get you to the high end of your revenue guidance in 2025? Say that again, Dan. Sorry. Yeah. What are the assumptions that would get you to the high end of your revenue guidance in 2025? Yeah, I mean, really just the business environment improving a bit and your programs that kind of are sitting in that pre-backlog bucket progressing into backlog as awards and those programs continuing. Understood. Thank you. Thank you. And our next question comes from the line of Max Smock from William Blair. Your question, please. Hey, good morning, everyone. Thanks for taking our questions. August, you mentioned the business environment deteriorated some over the last couple of months here. I guess my question is, are you surprised by that given the better funding environment that we saw in 2024? And what do you think is behind that deterioration? Do you think it could just be some of these companies maybe taking a little bit of a pause to digest, I guess, some of the uncertainty caused by the election, or is there something else going on that you would call out that is really driving that weakness? Yeah, I don't really have an explanation for it, and it was just a, this is a subjective thing. I think RFP flow was fine. It's the qualitative aspects of the type of size and type of projects we're getting and likelihood of them moving forward, and I just thought it wasn't quite as robust as what we'd seen in the prior couple of quarters, which was really kind of accelerating, and it seemed to decelerate some, and yeah, I don't know if it's because of the election and just concerns about where things are going or what the situation is, whether it's going to turn around soon, but I did note that it wasn't as robust as it had been the prior couple of quarters in terms of core business environment. Now, cancellations, on the other side, have abated some, so there's kind of two sides to this environment. One is kind of new opportunities, and that is maybe weakening a bit. The cancellations were down in Q4 relative to the prior three quarters, really. It was the first quarter of the year that we had kind of a closer to normalized cancellation rate, although I think the cancellations were still toward the high side. Cancellations improving, business environment maybe just a little bit weaker. We'll have to see Q1. Understood. Thank you for that helpful commentary. And then just following up on your comments about some of those delays, I think you called out a couple of projects that were expected to hit bookings in the quarter. Is there any color you can provide around what was behind those delays and how much visibility you have into those projects hitting bookings in the next couple of quarters here? And then how do you think about the risk that those delays eventually turn into cancellations in the first half of this year? Thank you. Yeah, I do expect those studies that I mentioned being delayed but progressing, just being a little bit slightly delayed, not greatly delayed. We do have some projects that are on a longer kind of holding pattern. And there's always a risk that anything cancels. I can't hedge that. Cancellations are still top of my mind in terms of risks of us performing this year. But I think that most of what was kind of pushed out of Q4, I think, will hit here in the first half of 2025. Understood. Thanks again for taking the questions. I'll hop back in the queue. Thank you. And our next question comes from the line of Eric Caldwell from Baird. Your question, please. Thanks very much. Good morning. I'm curious about the revenue phasing expectations through the year with a 0-5% growth range. Are you anticipating a big drop-off here in the beginning of the year and then a ramp towards the back half? Is it more linear through the year? And then what is the indirect revenue mix component or growth component? Is it down like you saw here in the fourth quarter and the deceleration we've seen over the last year? Are you expecting it to stabilize at this percent of revenue, go back up? What's the mix between direct and indirect fees, please? Yeah, Eric, as it relates to the indirect, our modeling would suggest that 2025 is a percentage of revenue will be somewhere around where we landed in the fourth quarter here. So you're down from where we were in total year 2024 at levels similar to what we saw in the fourth quarter here. What was the first part of your question? Phasing on revenue, the 0%-5% range, are we starting at the low end and moving to a higher level in the back half? Is it more linear growth through the year or just the thought process on timing the revenue production? Yeah, it'll somewhat depend on how those programs progress into awards throughout the year. Certainly, we've got a pipeline of those backlog opportunities. So I would expect there to be some linear progression throughout the year. I wouldn't expect a major step up in the first quarter here, but hopefully sequentially growing revenues throughout the year from there. But it will depend on how the bookings progress as well. And then, if I could just squeeze in one more, advanced billings, kind of an intriguing topic, doesn't get a lot of airtime, but you did show quarter-to-quarter increases in advanced billings Q2, Q3, Q4. You finished the year with advanced billings up 27% year over year. I'm not quite sure what drove that and how that happens in a year where bookings were down, what, 5% plus and down 14% in the fourth quarter, revenue slowed. What's keeping these advanced billings at such a high level and actually improving a little bit sequentially through the last three quarters? Yeah, good question, Eric. I mean, a lot of that is going to be timing based on the active programs that are in backlog and how those programs are progressing. I mean, you saw the nice growth rates that we've seen on the direct side of the business. And we try to create payment schedules and milestone payments that kind of stay a bit ahead of the work that we're doing. And so a lot of it's just timing related on how the mix of programs is going and our ability to bill according to those milestone payments and collect against those. As you know, we stay on top of kind of sponsors and credit and making sure that we're getting paid as we're doing the work. Yeah, fewer clients that are not paying us and we continue work. Yeah. Maybe that's it. Thanks very much. Thank you. And our next question comes from the line of David Windley from Jefferies. Your question, please. Hi. Good morning. Thank you for taking my questions. I wanted to focus on the cost side a little bit. I wondered when we were together in November, you talked about retention being at very high levels, much higher than historical norms, and that was leading to greater levels of productivity. I think the expectation was that it was probably at a peak and couldn't get much better. The fourth quarter was better, and it seems like at least some of your margin expectation next year assumes that that continues, so I wondered if you could maybe provide a little bit more precision around the productivity levels of the staff and when you would anticipate or if you are anticipating kind of restarting hiring at any point during the 2025 calendar year or if the guidance basically assumes that staff continues to be relatively flat. Thanks. Yeah. Hey, David, it's Jesse. Yeah, and in terms of productivity, it does remain at a very high level. Good productivity continues. Good retention continues. A lot of experienced staff just continuing to work diligently on projects. The headcount growth was fairly flat in 2024. We do anticipate accelerating hiring here in 2025. So we are targeting at the moment headcount growth in the mid to maybe upper mid single-digit level for the year. How that progresses throughout the year will be somewhat determined by what the business environment looks like and how that progresses. But we do anticipate hiring and kind of restarting the hiring engine a little bit more aggressively as we work through the year. And that will have likely a little bit of an impact on margins. Got it. And Dave, just to build on that, we do expect headwinds on margins if you look at the guidance that's out there. And the other thing to call out on the question I answered previously is it relates to the indirect and reimbursable cost. We do expect 2025 to be at a level similar to what we saw in the fourth quarter, which would mean that as a percentage of revenue in 2025 comes down a little bit. Right. On other cost actions, one of the things that I think you had talked about, I can't remember if it was last quarter or two quarters ago, is the beginnings of investment in offshoring, some back office functions, maybe data management, things like that. Where do those stand? And are some of the benefits of that activity beginning to show through in your financial expectations? Yeah, I don't think we're. Go ahead, August. I was going to say I still think it's early times, but yeah, go ahead, Jesse. Yeah. And I just said we're just getting started there. I mean, that's more of a long-term play there. We haven't really seen any of the positive impact of that just yet. We are continuing to hire in India in a couple of back office functions and administrative functions. But I think any sort of tailwind that that creates or margin help will be some, but it won't be a major margin driver if you think about just the overall picture of margin profile. But it is a longer-term play more so than anything that we're expecting to materialize here in 2025. Got it. And then last question for me is just, I guess, around competition. It kind of comes back to a bookings question, but I'm thinking about it more again from a margin sustainability standpoint. And what we hear in the market is I know you would normally say that you typically see the bigger competitors, but it sounds like in the absence of a stronger demand environment broadly, that they are moving down into what would be your more traditional space more aggressively. So I wonder if you're seeing that. And I would assume your reaction would be to not sacrifice price, but maybe August, you could speak to that. Sure. Look, I think the environment has tightened everybody's belts some. I think clients are funding challenged frequently in our, at least in our clients. And I think there is heightened competition, and pricing is a part of that. And I think you have to be as efficient as possible. Certainly, we have to be competitive and bring value to the table. And yeah, price is part of that. And we've had to defend our volume as well as our margin. Got it. That's helpful. Thank you very much. Thank you. And our next question comes from the line of Jailendra Singh from Truist Securities. Is your question, please? Thank you, and good morning, everyone. So going back to the comment around biotech slow decision-making and delays, etc., I understand it is tough to know what might be driving that. But based on your conversation with these companies, are there any key catalysts they're watching for before they're comfortable going forward with the project? And related to that, have you seen any signs that sponsors are putting pressure on these companies to put dollars into play? Because it seems like funding is not an issue. And if that's the case, it could create some pent-up demand in the near term. Any thoughts on that? Yeah. I think for our clients, funding is the issue. I can't speak to clients that have cash and just don't want to spend it. So yeah, I just don't know. I mean, look, there's also things do take time, and the clients that do have cash may not be ready with their IP to move forward for other reasons. So I don't think, I mean, I don't perceive a significant number of our clients holding on to cash despite they have a program that's ready to move forward and don't want to spend it. I just don't see that, but I don't know. Okay. That makes sense. And then my follow-up on the RFP trends in the quarter being down slightly sequentially versus Q3. Can you guys speak a little bit more to the quality of RFPs? Are you seeing customers kind of prioritizing research on drugs with more promising data on drugs in later-stage trials or mix of RFPs and focus still pretty consistent? And to that point, can you remind us where your mix is across phase one to four? Yeah. Okay. So I think RFPs were okay in Q4. Q4 just tends to be a little bit lighter in general. So I think the volume, the dollar volume of RFPs was fine from my perspective. So it was the qualitative side that I didn't think there was quite as many opportunities that looked promising in terms of size and likelihood of moving forward, etc. So a little bit more maybe churn in the RFP bucket than I would like. So that was kind of just my qualitative assessment, which is difficult to quantify. In terms of our breakout phase one through four, phase one itself is a very small part of our business. We're talking about a couple%, 1%. If you talk about our CPU type operations. Now, generally, other phase ones in oncology, etc., you throw in with phase two and three. That's the majority of the business. And dollar numbers, phase two and then the phase three are somewhat comparable type of size of the business. And we don't have a lot of very late-phase type trials. Good. Thanks a lot. Thank you. And our next question comes from the line of Justin Bowers from Deutsche Bank. Your question, please. Hi. Good morning, everyone. Can you talk about the trends that you're seeing in your pre-backlog awards and how cancellations are trending there? Is there a similar pattern that you're seeing in the bookings or sort of in line above, below what you're seeing in the backlog? I'm sorry. The cancellation in the pre-backlog? The pre-backlog awards, yeah. Okay, so our new award notification, you're just asking what the kind of volume was there? Volume was. And then, are you seeing, is there any divergence in the cancellations there versus what you're seeing in your net business, right? Okay. In the new backlog. Yeah. And then kind of that awards that have been awarded, awards that we have that are not yet in backlog. Yeah. So I think the flow is still okay. Again, I think that the business environment did soften a little bit in Q4, but our win rate was fine. And so I think that things moving into our kind of awarded but not backlog yet is still looking okay and good enough to kind of get what we want to get second half of this year if everything else remains the same. Cancellations came down both across the portfolio, so both in more into our normal range for backlog cancellations as well as a reduction in our cancellations in that pre-backlog kind of phase. So those came down quite a bit also. They were actually the bigger part of cancellations in 2024 and drove most of our booking difficulty were from that pre-backlog group rather than the backlog group itself. They came down nicely also along with the backlog cancellations. Understood. And then just in terms of the demand environment and piecing together some of the other questions, it seemed like quality started to improve late last year and pricing was at least stabilizing, maybe improving a smidge. Is that still the trajectory or has that sort of changed direction as well? And then maybe just comments on decision-making, like there's been a lot of delays throughout 2024. Is that sort of a persistent trend or is the velocity changed there at all? I think the business environment was much improved for the first three quarters of 2024. So I think 2024 came out with accelerating kind of opportunities. And aside from the cancellations, so if we looked at just new opportunities and not what was happening in our business environment with things being pulled or funding problems of many of our clients, there was a lot of opportunities and they were kind of accelerating. Q4 was a little bit weaker maybe. But the environment is still not horrible. So I don't know which direction it's going. Could just be maybe a little bit of a slowdown in Q4 and then things are going to re-accelerate. Or it could be the signs of things are slowing down more. Delays and things like that wasn't delays unreal. It was funding, really. We've had a few delays in pushing things out of Q4, but it hasn't really been just quarter-to-quarter delays earlier in the year. It was more financial difficulty and cancellations. Does that answer your question? Thank you. Yes. Yes. Thank you, August. Thank you. And as a reminder, ladies and gentlemen, if you do have a question at this time, please press star 11 on your telephone. Our next question comes from the line of Charles Rhyee from TD Cowen. Your question, please. Yeah. Thanks for taking the questions. Maybe just maybe a little bit more clarification as we think about sort of the cancellation rates. You're saying that it's kind of come back to normal. I know we've talked about sort of cancellations from pre-backlog. How much longer should we expect that kind of these kind of dynamics to be impacting book to bill as we move through the course of the year? Do you feel like we're kind of getting at the end of that? And so when we think about the difference between, let's say, the 0.99 book to bill in the fourth quarter and sort of getting to this 1.15 as we get to the back half of the year, how would you kind of characterize that as a mix between sort of reducing sort of these pre-backlog cancellations or just expectations for RFP growth and awards? Yeah. So I think the elevated pre-backlog cancellations throughout 2024 will have an impact throughout 2025. And I expect weak bookings in the first couple quarters of 2025. And then hopefully in the second half, we will get bookings that are accelerating and getting above that 1.15 sort of threshold that I look at, hopefully moving in 2026 to 1.2, etc. But that's kind of the trajectory seeing based upon the cancellations in our portfolio of pre-backlog work, which can take up to a year to translate into backlog. Okay. So just to follow up there, so if we assume that that kind of activity sounds like you're saying is kind of you feel it's going to be relatively constant. When we think about the weaker first-half bookings, is that a function where you think you said RFP activity in the fourth quarter was down slightly. We should expect you're seeing RFP activity here in the first quarter lower. And so is it right to think that book to bill? I'm not projecting future RFPs. I'm projecting the bookings. I thought that's what you were asking about. Are you expecting bookings to be book-to-bill here to be sort of lower in the first half than the fourth quarter and then kind of ramping back up? No, I do not. I hope nothing is lower than Q4 in terms of book-to-bill. So I'm hoping that that is improved, but still well below that 1.15. So I'm looking for rather weak bookings in the first couple quarters here of 2025. I certainly hope that's above 1.0, and I have every reason to believe it will be, but just not anywhere near our kind of more longer-term run rate. Got it. Appreciate that. Okay. Thank you. Thank you. And our next question comes from the line of Ann Hynes from Mizuho. Your question, please. Great. Thank you. So I know this is an uncertain environment, but I guess given your guidance, do you think your revenue guidance encompasses just the uncertainty? And when you talk to your customers, how much visibility do they have in the funding environment? So I'm just trying to figure out with this new guidance, how confident are you in the visibility you have at this point in time? And maybe what do you think at this point in time would drive upside versus downside? That'd be great. Thank you. Okay. That's a little bit tough. How confident am I in? I have no idea where the business is going. The business environment in 2025, I think we've tried to make reasonable assumptions about the future path. And that's the guidance we came out with. I think there's substantial downside potential with further cancellations and a weakening business environment and substantial upside opportunities if cancellations really drop to well into our normal range and the business environment strengthens as it had been in most of 2024. So I think we're kind of equally poised here. I think we've got a good guidance that reflects the environment we're in. But there's certainly quite a bit. And look, this is a business that has a lot of it is established backlog for this 2025 is already in place. It's a matter of cancellations. And cancellations can completely destroy those hopes. But there's also the opportunity that cancellations are very low. And that's going to be the big driver. Yeah. I don't know what else I can say to get you comfortable with the guidance we have. Maybe on the cancellation part, were there any trials canceled that surprised you? Meaning, is the industry acting different than historical drivers of cancellations? And then that would be great. And then just on the competitive environment, are there any notable changes sequentially that you would call out? No real changes. On cancellations, for this past year, it's been very largely funding-related. Now, look, cancellations come for a number of reasons. We've had products fail, various reasons for a cancellation to occur, competitive environment change substantially. There's a broad number of reasons for cancellations. But overwhelmingly, they've been at least linked in good part to funding. So that is the primary kind of driver that we see in terms of cancellations. All right. Thank you. Thank you. And our next question is a follow-up from the line of Max Smock from William Blair. Your question, please. Hi. Thanks for squeezing in a follow-up here. I just wanted to ask a clarifying question on gross margin. One of the questions we've been getting is around whether there's any sort of tailwind to gross margin from the elevated cancellations that you saw in 2024. So just hoping you can walk through the payments that you received for those cancellations. And I guess the way I think about it, just for work completed and then for wind-down costs. But I wanted to confirm that there's not any sort of incremental payments in there that would have artificially inflated your margins this year. And then therefore would be a bit of a headwind to margins in 2025 given that cancellations seem to be normalizing a bit. Thank you. Kevin, I don't know if you want me to let me take a stab at that first. I think that cancellations historically have been something of a tailwind for margin, and often it kind of accelerates a lot of work on closeout, etc., and also just I think our routine monitoring of percent completion, and I think we're reasonably conservative about revenue accrual that sometimes catches up some aspects at closeout, so I think that in general, there is something of a tailwind from cancellations. Kevin, I don't know if you have any quantification to that. Yeah. No, it's nothing that I can quantify. But I would say while there is some slight tailwind from that, the core tailwind on margins this year has again been just the productivity of the existing employee base. It's been tremendous. Again, headcount is flat year over year. And the organization and the employee base continues to be productive and advancing programs. And that's really what's driving margins. Yeah, there might be a slight tailwind from some of these cancellations and, as August mentioned, closing out those programs. But by and large, it's just the retention of the employee base and good utilization and just great execution. Understood. Thanks again for squeezing in a follow-up. Thank you. And our next question is a follow-up from the line of Eric Coldwell from Baird. Your question, please. Thanks. I was hoping you could help us with performance obligations. Your performance obligations as reported in SEC filings actually grew at a nice and accelerating clip all year. Third quarter was up 25% year over year. It was up over 9% quarter over quarter. So I'm struggling a bit with trying to triangulate between what should be and has historically been an extremely high positive correlation to future revenue growth, which was a number that spiked dramatically in 3Q versus what you're telling us on the bookings and the revenue outlook for this year, which obviously are much lower. So how did that come to pass that performance obligations were up 25% in the third quarter? And why is that not as correlated to revenue growth in 2025 as it has been historically? Those look very far out. We have a five-year project. And all of it goes into performance obligation. But only a portion of that is near-term that is included in our backlog, even if it reaches backlog. I mean, so you get backlog. Okay, we get an award. Usually, by the time we've got to sign a contract and it's an obligation, it's usually in backlog. But it's only a part of it that's in backlog. And you'd expect if you have a lot of projects canceling and a lot of new stuff being added in that the average duration goes up. And that would increase the gap between performance obligations and backlog. But that's I don't know that I can quantitatively break that down into exactly. But it's not something I think that would be unexpected. Your revenue growth is going to be based upon late-stage projects. You don't have your fastest conversion. And it's all in backlog. And early-stage stuff, there's still a lot of stuff held out. Would there be any on top of the timing nuance of cancels now, awards for later, is there any other more structural shift in the nature of the programs or the average duration of an incremental program coming in today as longer than what you would have seen in the past? Is there anything like that occurring? And then finally, I don't know if you could help us with this, but would you be willing to foreshadow what the performance obligations look like in the 10-K that will be coming later? Kevin. Yeah. I mean, in terms of the foreshadowing, I mean, we'll publish that later today. I don't think the difference will be dramatically different than what you saw in the third quarter. Again, as August had mentioned, the tail on studies is really the largest driver of that delta. Because remember, we only put in the first three years of a program in the backlog. And there's other factors. Like if there's an interim analysis, we only put the study in up to that interim analysis. There's a lot of differences between the accounting version versus the backlog version, but it's consistent from period to period. No structural changes, I guess, in other words, Eric. Okay. Thank you very much. I do think backlog is a better reflection of what we think is. We do have that obligation. Look, we've given them a price. We've given them what we do. And we're obligated to do it even if they go into that next phase of the study. But sometimes those are really just options that the client holds. And it's not likely to even get there. I mean, I think our backlog is a better reflection of what we think is qualified stuff that we're likely to perform. Yeah. I agree. Thank you. Thank you. And our next question comes from the line of David Windley from Jefferies. Your question, please. Hi. The beauty of a short conference call is we get to have multiple follow-ups here. Maybe I don't know if you'd like that or not. But I wanted to ask one as well. First of all, to clarify an answer you just gave to Eric. So August, you said late-stage programs are, I think your point was burning more directly into revenue versus early-stage programs. I want to clarify by that that you mean the late stage of programs, right? So not the difference between phase one and phase three, but the latter part of a phase three rather than the earlier part of a phase three. Correct. Correct. It's all in backlog so that it's equal to the performance obligation, and it's going to burn all in the next year or two. Right. So just for kind of purposes of transcript, so we get that clear. Not a reference to clinical trial phase, early stage versus late stage, but a comment on trials in the latter part of their progression as opposed to trials that are starting earlier. That's what we're talking about. Right. Appreciate that. And then, Kevin, I think you mentioned on margin some benefit, I believe, from FX. And I didn't hear a quantification of that. Wondered if you might quantify that. And then what is your FX assumption in the guidance for 2025? Thanks. Yeah. The guidance assumes FX rates as of December 31st. And in terms of the impact in the fourth quarter, it was probably about $4 million EBITDA impact for the fourth quarter net. Okay. All right. Great. That's all for me. Thank you. Thank you. This does conclude the question and answer session of today's program. I'd like to hand the program back to Lauren Morris for any further 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 2025 earnings call. Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.