Q4 2021 Syneos Health Inc Earnings Call

Okay.

Speaker 1: Good morning and welcome to the city of health fourth quarter and full year 2021 earnings conference call at the time all participants are to listen only mode. Later we will conduct a question and answer session and instructions will be given at that time. I would now like to hand the conference over to Ronny Speight, Senior Vice President of Investor Relations. Please go ahead, sir.

Good morning, and welcome to the city itself fourth quarter and full year 2021 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 be given at that time.

I'd now like to turn the conference over to Ronnie Speight Senior Vice President of Investor Relations. Please go ahead Sir.

Okay.

Good morning, everyone with me on the call today are Alistair Macdonald, our Chief Executive Officer, Jason Meggs, Our Chief Financial Officer, Michelle Keefe, President of Medical Affairs, and commercial solutions, and Michael Brooks, Chief Development Officer, and global head of clinical development solutions.

Speaker 2: Good morning, everyone. With me on the call today are Alistair McDonald, our Chief Executive Officer, Jason Meigs, our Chief Financial Officer, Michelle Keefe, President of Medical Affairs and Commercial Solutions, and Michael Brooks, Chief Development Officer and Global Head, Clinical Development Solutions.

Speaker 2: In addition to the press release, a slide presentation corresponding to our prepared remarks is available on our website at investor.cineoshealth.com.

In addition to the press release, a slide presentation corresponding to our prepared remarks is available on our website at investor <unk> Dot com.

Speaker 2: Remarks that we make about future expectations, plans, growth, trends, anticipated financial results and prospects, and our expectations regarding the COVID-19 pandemic constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995, and we disclaim any obligation to update.

Remarks that we make about future expectations plans growth.

<unk> anticipated financial results and prospects and our expectations regarding the COVID-19 pandemic constitute forward looking statements for purposes of the Safe Harbor provisions under the private Securities Litigation Reform Act of 1995 and.

And we disclaim any obligation to update them.

Actual results may differ materially from those indicated by these forward looking statements as a result of various important factors. These factors are discussed in the risk factors section of our Form 10-K for the year ended December 31, 2021, and our other SEC filings.

Speaker 2: Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors. These factors are discussed in the Risk Factors section of our Form 10-K for the year ended December 31, 2021, and our other SEC filings.

Speaker 2: During this call, we will discuss certain non-GAAP financial measures which exclude the effects of events and transactions we consider to be outside of our core operations.

During this call, we will discuss certain non-GAAP financial measures, which exclude the effects of events and transactions, we consider to be outside of our core operations.

Speaker 2: These non- GAAP measures should be considered a supplement to, and not a replacement for, measures prepared in accordance with GAP.

These non-GAAP measures should be considered a supplement to and not a replacement for measures prepared in accordance with GAAP.

For a reconciliation of non-GAAP financial measures with the most directly comparable GAAP measures. Please refer to the appendix of our presentation I would now like to turn the call over to Alistair Macdonald Alastair.

Speaker 2: For a reconciliation of non-GAAP financial measures with the most directly comparable GAAP measures, please refer to the appendix of our presentation.

Speaker 2: I would now like to turn the call over to Alistair McDonald. Alistair?

Speaker 3: Thanks Ronnie, good morning everyone and thank you for joining us today. The strong fundamentals and ongoing execution across our business drove over 20% revenue growth in the quarter and 18% growth for the full year, accompanied by robust earnings and cash flow growth. We are pleased with how our unique product development strategy and mindset continue to resonate in the market and drive strong demand for our innovative solutions.

Thanks, Ronny and good morning, everyone and thank you for joining us today.

The strong fundamentals and ongoing execution across our business drove over 20% revenue growth in the quarter and 18% growth for the full year accompanied by robust earnings and cash flow growth. We are pleased with how our unique product development strategy and mindset continue to resonate in the market and drive strong demand for our innovative solutions.

Yes.

Speaker 3: The demand environment remains healthy, both in terms of macro market dynamics and robust new business pipelines across our organization. We are proud of the progress we have made over the past several years, as we have continued to evolve our business model by developing innovative, integrated offerings, enabled by data and technology, to position our business for long-term growth.

The demand environment remains healthy both in terms of macro market dynamics and robust new business pipelines across our organization.

Im proud of the progress we have made over the past several years as we have continued to evolve our business model by developing innovative integrated offerings enabled by data and technology to position our business for long term growth dynamic assembly investments that are fueling growth include kinetic a modern customer engagement capability and they expand.

Speaker 3: Dynamic assembly investments that are fueling growth include Kinetic, our modern customer engagement capability and the expansion of our DCT solutions through Ellingworth and StudiKick.

<unk> of our DCT solutions through anything with Citi cake.

Speaker 3: Specifically in our clinical business, we've expanded our digitally-enabled delivery in response to the pandemic, which catalyzed the rapid deployment of decentralized trial capabilities and drove greater acceptance of these methods by regulators, customers, sites, and patients.

Specifically in our clinical business, we've expanded our digitally enabled delivery in response to the pandemic, which capitalized the rapid deployment of decentralized trial capabilities and drove greater acceptance of these methods by regulators customers sites and patients.

Speaker 3: While these innovations streamline the clinical development process for our customers, they also result in a lower mix of reimbursable expenses, a dynamic that we now expect to have a lasting impact on our revenue profile. We saw the continuation of this revenue mix change in the fourth quarter, which, along with reduced COVID work and foreign exchange headwinds, caused revenue to come in below our expectations.

While these innovations streamline the clinical development process for our customers. They also result in a lower mix of Reimbursable expenses, a dynamic that we now expect to have a lasting impact on our revenue profile. We saw the continuation of this revenue mix change in the fourth quarter, which along with reduced COVID-19 work and foreign exchange headwinds.

As the revenue to come in below our expectations.

Speaker 3: To better reflect this dynamic, we've adjusted our future expectations for reimbursable expenses, which impacted our total book-to-bill, net awards and backlog metrics for the fourth quarter and full year 2021.

To better reflect this dynamic we've adjusted our future expectations for Reimbursable expenses, which impacted our total book to Bill net awards and backlog metrics for the fourth quarter and full year 2021.

Speaker 3: Jason will go into further detail on these adjustments and the additional information we are providing to improve your visibility into these trends.

Jason will go into further detail on these adjustments and the additional information we are providing to improve your visibility into these trends.

Speaker 3: Importantly, we remain confident in our expectations for low double-digit clinical revenue growth for 2022, excluding the impact of reimbursable expenses along with continued margin expansion.

Potently, we remain confident in our expectations for low double digit clinical revenue growth for 2022, excluding the impact of Reimbursable expenses, along with continued margin expansion.

Speaker 3: Now for some key highlights from the quarter. First, we reported solid book-to-bill ratios of 1.26 times for clinical solutions and 1.48 times for commercial solutions for the fourth quarter, excluding the impact of reimbursable expenses, resulting in trailing 12-month book-to-bill ratios of 1.34 times for clinical and 1.15 times for commercial.

Now for some key highlights from the quarter first we.

We reported solid book to Bill ratios of 126 times for clinical solutions, and 148 times for commercial solutions for the fourth quarter, excluding the impact of Reimbursable expenses, resulting in trailing 12 month book to Bill ratios of 134 times, the clinical and 115 times for commercial.

Speaker 3: Total company net awards for full-year 2021 grew 19.4% compared to 2020, excluding reimbursable expenses, driven by a 17.5% increase in clinical and a 25.6% increase in commercial.

Company Net awards for full year, 2021 group 19, 4% compared to 2020, excluding Reimbursable expenses, driven by 17, 5% increase in clinical and 25, 6% increase in commercial.

Speaker 3: Second, our commercial solutions business continues to demonstrate strong performance, with our full-service approach resonating with customers and the Cineos One portfolio beginning to achieve commercialization milestones, resulting in 19.8% revenue growth.

Second our commercial solutions business continues to demonstrate strong performance with our full service approach resonating with customers and the <unk> portfolio beginning to achieve commercialization milestones, resulting in 19, 8% revenue growth.

Speaker 3: With deployment solutions ending backlog growth of 20.9% for 2021, our commercial business remains well positioned for low-teens growth in 2022.

With deployment solutions, ending backlog growth of 29% for 2021, our commercial business remains well positioned for low teens growth in 2022.

Speaker 3: Third, we generated operating cash flow of $186 million during the fourth quarter, resulting in a record level of $450.3 million for the full year. This enabled $120 million of net debt reduction during Q4, reducing our net leverage ratio to 3.6 times.

Third we generated operating cash flow of $186 million.

During the fourth quarter, resulting in a record level of $453 million for the full year. This enabled a $120 million of net debt reduction during Q4, reducing our net leverage ratio to three six times.

Speaker 3: Now, moving into further details on our results. In the fourth quarter, we delivered total company revenue growth of 20.5% year over year as we continue to manage through the recovery from the pandemic.

Now moving into further details on our results in the fourth quarter. We delivered total company revenue growth of 25% year over year as we continue to manage through the recovery from the pandemic.

Speaker 3: In clinical solutions, revenue grew 20.7% compared to the fourth quarter of 2020, including the impact of acquisition.

In clinical solutions revenue grew 27% compared to the fourth quarter of 2020, including the impacts of acquisitions, our organic growth was driven by our full service portfolio, primarily the ongoing ramp in our larger pharma relationships accompanied by continued strength in our smid customer segment and our oncology business.

Speaker 3: Our organic growth was driven by our full-service portfolio, primarily the ongoing ramp in our larger farmer relationships accompanied by continued strength in our SMID customer segment and our oncology business.

Speaker 3: Including reimbursable expenses and the impact of the related backlog adjustment, our clinical book-to-bill ratio for the fourth quarter was 0.34 times, resulting in a trailing 12-month book-to-bill ratio of 1.09 times. Excluding reimbursable expenses, our clinical book-to-bill ratio was 1.26 times for the fourth quarter and 1.34 times for the trailing 12-month period, resulting in year-over-year ending backlog growth of 15.4%.

Including Reimbursable expenses and the impact of the related backlog adjustment, our clinical book to Bill ratio for the fourth quarter was 0.34 times, resulting in a trailing 12 month book to Bill ratio of 1.09 times, excluding Reimbursable expenses, our clinical book to Bill ratio was one six times for the fourth quarter and one.

Three four times for the trailing 12 month period, resulting in year over year, ending backlog growth of 15, 4%.

Speaker 3: Turning to commercial solutions, revenue growth accelerated to 19.8% compared to the fourth quarter of 2020. The market for our commercial services remains significant, driven in part by the pace of innovation, new drug approvals, and the biotech funding environment.

Turning to commercial solutions revenue growth accelerated to 19, 8% compared to the fourth quarter of 2020, the market for our commercial services remained significant driven in part by the pace of innovation, new drug approvals in the biotech funding environment.

Speaker 3: Our growth remains broad-based, with our highest growth rates in deployment solutions and consulting, including continued strength in our SMID customer segment.

Growth remains broad based with our highest growth rates in deployment solutions and consulting including continued strength in our estimated customer segment.

Speaker 3: Deployment solutions reached a new five-year high in deployed resources and record-ending backlog, along with record new team starts during the full year 2021. We also saw strong growth in our public relations and medical communications business.

Deployment solutions reached a new five year high in deployed resources on record ending backlog along with record new teams thoughts during the full year 2021. We also saw strong growth in our public relations and medical communications businesses the.

Speaker 3: The commercial team had another strong quarter of net awards with a book-to-bill ratio of 1.47 times for the quarter and 1.14 times for the full year 2021, when including the impact of reimbursable expenses.

The commercial team had another strong quarter of net awards with a book to Bill ratio of 147 times for the quarter and 114 times for the full year 2021, when including the impacts of Reimbursable expenses for.

Speaker 3: Full-service commercial growth awards remained robust through the fourth quarter, resulting in full-year growth of over 70% compared to 2020.

Full service commercial gross awards remained robust through the fourth quarter, resulting in full year growth of over 70% compared to 2020 with.

Speaker 3: With the continued success of these offerings, the impact of CineoSwan and our strong backlog, we expect commercial revenue growth rates to lead the way for the total company in 2022.

With the continued success of these offerings the impact of <unk> and our strong backlog, we expect commercial revenue growth rates to lead the way for the total company in 2022.

Speaker 3: As we drive innovation, we see continued customer adoption of integrated product development solutions that work across our clinical to commercial capabilities.

As we drive innovation, we see continued customer adoption of integrated product development solutions that work across our clinical to commercial capabilities.

Speaker 3: We recently introduced a full-service medical affairs offering, which will be under the leadership of Michelle Keefe, who has deep expertise in developing integrative solutions.

We recently introduced the full service medical affairs, offering which will be under the leadership of Michelle Keefe, who has deep expertise in developing integrated solutions similar in concept to sending a swan. This unique approach combines our medical affairs capabilities from across all parts of our business into an integrated offering connecting our real world evidence.

Speaker 3: Similar in concept to Cineos One, this unique approach combines our medical affairs capabilities from across all parts of our business into an integrated offering, connecting our real world evidence, health economics, outcomes and research, medical science liaisons, medical communications and specialized consulting to Cineos One.

Health Economics outcomes research medical Science, Liaisons medical communications and specialized consulting disciplines.

Speaker 3: To date, customers have had limited access to medical affairs outsourcing alternatives, which are growing in importance as better evidence is required to ensure relevance with payers, providers and patients.

<unk> customers have had limited access to medical affairs outsourcing alternatives, which are growing in importance as better evidenced as required to ensure relevance with payers providers and patients.

<unk> health is ideally situated to grow this high value category as we believe our breadth of clinical and commercial capabilities combined with our integrated product development mindset positions us to become a leading brand in the medical office space.

Speaker 3: Cineos Health is ideally situated to grow this high value category as we believe our breadth of clinical and commercial capabilities combined with our integrated product development mindset positions us to become a leading brand in the medical affairs space.

Speaker 3: Continuing the integration focus, our end-to-end fully integrated product development offering, Cineos One, continues to resonate with our customers, providing an attractive alternative to traditional limited outsourcing options.

Continuing the integration focus our end to end fully integrated product development offering sending a swan continues to resonate with our customers, providing an attractive alternative to traditional limited outsourcing options. The second commercial loans from this portfolio is now underway following receipt of FDA approval for the underlying product and.

Speaker 3: The second commercial launch from this portfolio is now underway following receipt of FDA approval for the underlying product in January . Planning activities have also started for other product launches in 2022, subject to final regulatory approval, with additional launches expected in 2023 and beyond.

January planning activities have also started for other product launches in 2022 subject to final regulatory approval with additional launches expected in 2023 and beyond.

Speaker 3: In addition to the substantial awards, the growing CINEOS One portfolio is already driven into our clinical business. We expect it to increasingly contribute to commercial awards and revenue over the coming years.

In addition to the substantial awards the growing <unk> portfolio has already driven into our clinical business, where I expect it to increasingly contribute to commercial awards and revenue over the coming years.

Speaker 3: Finally, before I hand over to Jason, I wanted to highlight the recent additions to our Board of Directors, along with our other areas of ESG progress. We are pleased to welcome Barbara Bodum and Alfonso Zulueta, and are excited about the additional depth of biopharma expertise and unique perspectives they add to our already strong Board.

Finally, before I hand over to Jason I wanted to highlight the recent additions to our board of directors along with our other areas of ESG progress. We're pleased to welcome Barbara motive and Alfonzo Zillow Axa and are excited about the additional debt to biopharma expertise and unique perspectives, they add to our already strong board.

Speaker 3: Our other notable ESG accomplishments include our recent commitment to net zero emissions by 2040 and our participation in the Human Rights Campaign's Corporate Equality Index.

Other notable ESG accomplishments include our recent commitment to net zero emissions by 2040, and our participation in the human rights campaign's corporate equality index.

Speaker 3: In closing, I want to thank all of my 28,000 plus Sineos Health colleagues for their innovation and dedication as they continue to work tirelessly to provide new solutions and excellent service to our customers, sites and patients.

In closing I want to thank all of my 28000, plus cineaste, how colleagues for their innovation and dedication as they continue to work tirelessly to provide new solutions and excellent service to our customers sites and patients.

Speaker 3: Jason will now provide additional comments on our financial performance and guidance.

Jason will now provide additional comments on our financial performance and guidance Jason.

Thank you Alastair and good morning, everyone.

Speaker 4: Before I discuss the details of our results, I want to provide some additional context on the trends in reimbursable expenses that Alistair highlighted.

Before I discuss the details of our results I want to provide some additional context on the trends in reimbursable expenses that Alastair highlighted.

Speaker 4: Since the start of the COVID-19 pandemic, we have experienced lower reimbursable expenses as remote monitoring and other DCT approaches have become a more prevalent part of our clinical trials.

Since the start of the COVID-19 pandemic, we've experienced lower reimbursable expenses as remote monitoring and other DCT approaches have become a more prevalent part of our clinical trials.

Speaker 4: This decrease in reimbursable expenses is primarily due to items such as lower travel expenses for our staff, due to sustained levels of remote monitoring, investigator meetings remaining virtual, and reduced costs for study medication.

This decrease in Reimbursable expenses is primarily due to items such as lower travel expenses for our staff due to sustained levels of remote monitoring investigator meetings remaining virtual and reduced cost per study medications.

Speaker 4: We are at the forefront of this transition with our customers and sites, and given the long-term benefits it provides, we expect this trend to continue.

We are at the forefront of this transition with our customers and sites and given the long term benefits. It provides we expect this trend to continue.

Speaker 4: As such, we have proactively adjusted our ending backlog to reflect our expectation of reduced reimbursable expenses going forward, mirroring what we are seeing across our existing portfolio as well as in our new award.

As such we have proactively adjusted our ending backlog to reflect our expectation of reduced reimbursable expenses going forward.

What we are seeing across our existing portfolio as well as in our New awards. These.

Speaker 4: These adjustments only impact our outlook for reimbursable expenses, not our view of underlying demand or profitability.

And these adjustments only impact our outlook for Reimbursable expenses, not our view of underlying demand or profitability.

Speaker 4: We therefore remain confident in our expectations for strong growth and profitability in 2022.

We therefore remain confident in our expectations for strong growth and profitability in 2022.

Speaker 4: Further, in response to feedback we've received from investors asking for deeper insights into key business drivers, we are providing additional information on our awards, book-to-bill, and backlog metrics, excluding the impact of reimbursable expenses.

Further in response to feedback we've received from investors asking for deeper insights into key business drivers. We are providing additional information on our awards book to Bill and backlog metrics, excluding the impact of Reimbursable expenses.

We are also including.

The amount of quarterly Reimbursable expenses in the appendix of our earnings presentation.

Speaker 4: the amount of quarterly reimbursable expenses in the appendix of our earnings presentation.

Speaker 4: Although there is diversity in practice across our industry regarding these disclosures, we believe they improve investors' visibility into the underlying strength of our business and the leading indicators and revenue trends that continue to drive the expansion of our adjusted EBITDA margins.

Although there is diversity and practice across our industry regarding these disclosures, we believe they improve investors visibility into the underlying strength of our business and the leading indicators and revenue trends that continue to drive the expansion of our adjusted EBITDA margins.

Now moving to the details of our financial results. Our total revenue for the fourth quarter of 2021 was $137 billion.

Speaker 4: Our total revenue for the fourth quarter of 2021 was $1.37 billion, up 20.5% and 20.8% in constant currency compared to the fourth quarter of 2020.

Up 25% and 28% in constant currency compared to the fourth quarter of 2020.

Speaker 4: This included continued strong growth with SMIC customers across both clinical and commercial, bringing full-year growth for this customer segment to over 30 percent.

This included continued strong growth with smid customers across both clinical and commercial bringing full year growth for this customer segment to over 30%.

Speaker 4: Revenue came in below our expectations due to foreign exchange headwinds, lower reimbursable expenses, and clinical solutions driven by the DCT trends we highlighted earlier, and the faster-than-anticipated wind-down of certain COVID-related projects.

Revenue came in below our expectations due to foreign exchange headwinds.

Lower reimbursable expenses and clinical solutions, driven by the DCT trends, we highlighted earlier and the faster than anticipated wind down of certain COVID-19 related projects.

Speaker 4: However, this also resulted in an improved revenue mix, driving higher than expected adjusted EBITDA margins.

However, this also resulted in an improved revenue mix driving higher than expected adjusted EBITDA margin.

Our clinical solutions revenue for the fourth quarter was $1 4 billion up 27% as reported or 21% in constant currency compared to the fourth quarter of 2020.

Speaker 4: Our clinical solutions revenue for the fourth quarter was $1.04 billion, up 20.7% as reported, or 21% in constant currency compared to the fourth quarter of 2020.

Speaker 4: These increases were driven by growth in our full-service portfolio, including the ramp in our large farmer relationships, and strength in our oncology business.

These increases were driven by growth in our full service portfolio, including the ramp in our large pharma relationships and strengthen our oncology business.

This total growth includes a 1000 basis point contribution from acquisitions, and a 70 basis point tailwind from Reimbursable expenses.

Speaker 4: This total growth includes a 1,000 basis point contribution from acquisitions and a 70 basis point tailwind from reimbursable expenses.

Speaker 4: This reflects the recovery of reimbursable expenses compared to 2020, although not to the level we anticipated in our guide.

This reflects the recovery of Reimbursable expenses compared to 2020, although not to the level, we anticipated in our guidance.

Speaker 4: Our fourth quarter commercial solutions revenue was $330.9 million, up 19.8% or 20.2% in constant currency compared to the fourth quarter of 2020.

Our fourth quarter commercial solutions revenue was $330 9 million.

Up 19, 8% or 22% in constant currency compared to the fourth quarter of 2020.

Speaker 4: Growth in commercial revenue is driven by expansion across our core commercial businesses with particular strength in deployment solutions and consulting.

Growth in commercial revenue was driven by expansion across our core commercial businesses with particular strength in deployment solutions and consulting.

This growth includes a 260 basis point tailwind from Reimbursable expenses, and a 300 basis point headwind from the 2020 divestiture of our medication adherence business.

Speaker 4: This growth includes a 260-basis-point tailwind from reimbursable expenses and a 300-basis-point headwind from the 2020 divestiture of our medication adherence business.

Speaker 4: Adjusted EBITDA increased 21.6% to $237 million, representing an adjusted EBITDA margin of 17.3%, an increase of 20 basis points compared to the fourth quarter of 2020.

Adjusted EBITDA increased 21, 6% to $237 million, representing an adjusted EBITDA margin of 17, 3% an increase of 20 basis points compared to the fourth quarter of 2020.

Speaker 4: The increase in adjusted EBITDA margin for the fourth quarter was primarily the result of the benefits of revenue growth and the cost management initiatives in our Forward Bound Program, partially offset by a higher mix of contract labor and a less favorable revenue.

The increase in adjusted EBITDA margin for the fourth quarter was primarily the result of the benefits of revenue growth and cost management initiatives and our four bound program, partially offset by a higher mix of contract labor and less favorable revenue mix.

Speaker 4: For the full year 2021, Adjusted EBITDA increased 20.8% to $765.3 million.

For the full year 2021, adjusted EBITDA increased 28% to $765 $3 million.

Speaker 4: This represents 14.7% adjusted EBITDA margin and year-over-year expansion of 40 basis points.

This represents 14, 7% adjusted EBITDA margin and year over year expansion of 40 basis points.

Speaker 4: In addition, it is important to note that our unadjusted EBITDA grew by 21.9% in 2021.

In addition, it is important to note that our unadjusted EBITDA grew by 21, 9% in 2021.

Speaker 4: This was primarily driven by growth in operating income and related margins given the benefits of robust revenue growth and our forward-bound initiative.

This was primarily driven by growth in operating income and related margin given the benefits of robust revenue growth and our forward bound initiatives.

Speaker 4: We expect this growth trend to continue in 2022 as we maintain our focus on driving cash flow conversion.

We expect this growth trend to continue in 2022, as we maintain our focus on driving cash flow conversion.

Adjusted diluted EPS of $1 48 for the fourth quarter increased by 33, 3% year over year, primarily driven by the increase in adjusted EBITDA and lower interest expense.

Speaker 4: Adjusted diluted EPS of $1.48 for the fourth quarter increased by 33.3% year-over-year, primarily driven by the increase in adjusted EBITDA and lower interest expenses.

Speaker 4: This resulted in full year 2021 adjusted diluted EPS of $4.46, up 30.8% from 2020.

This resulted in full year 2021, adjusted diluted EPS of $4 46 up.

Up 38% from 2020.

Speaker 4: Our operations generate a strong operating cash flow of $186 million for the fourth quarter, bringing our 2021 total to a record level of $450.3 million.

Our operations generated strong operating cash flow of $186 million for the fourth quarter, bringing our 2021 total to a record level of $453 million.

Speaker 4: This performance was driven by strong cash, net income, and billing and collections activity, partially offset by deferred payroll tax payments under the CARES Act.

This performance was driven by strong cash net income and billing and collections activity, partially offset by deferred payroll tax payments under the cares Act.

DSO for the quarter declined to 44 days.

Speaker 4: Our capital expenditures were $26.9 million for the fourth quarter.

Our capital expenditures were $26 9 million for the fourth quarter.

During the fourth quarter, we reduced our outstanding debt by $120 million consistent with our balanced approach to capital deployment.

Speaker 4: During the fourth quarter, we reduced our outstanding debt by $120 million, consistent with our balanced approach to capital deployment.

Speaker 4: This was accomplished through voluntary repayments on our revolving credit facility and our Terminal A, partially offset by the expansion of our lower-cost AR securitization facility.

This was accomplished through voluntary repayments on our revolving credit facility and our term loan a partially offset by the expansion of our lower cost AR securitization facility.

Speaker 4: We ended the quarter with $106.4 million of unrestricted cash and total debt outstanding of $2.84 billion, with net leverage declining to 3.6 times at the lower end of our targeted range for year-end.

We ended the quarter with $106 4 million of unrestricted cash and total debt outstanding of $2 eight 4 billion.

With net leverage declining to three six times at the lower end of our targeted range for year end.

Our non-GAAP effective tax rate for the fourth quarter was 22, 5% to reflect our lower full year rate of 23, 5% driven by increased growth and earnings outside of the U S.

Speaker 4: Our non-GAAP effective tax rate for the fourth quarter was 22.5% to reflect our lower full year rate of 23.5% driven by increased growth in earnings outside of the U.S.

Speaker 4: Given the benefit of our NOL deductions, our actual net cash outlay for income taxes in 2021 was approximately $35 million.

Given the benefit of our NOL deductions, our actual net cash outlay for income taxes in 2021 was approximately $35 million.

Turning now to our updated 2022 guidance. This guidance contemplates our current view of the estimated impact of COVID-19 on our business recognizing the factors related to COVID-19 are outside of the company's control and subject to change.

Speaker 4: This guidance contemplates our current view of the estimated impact of COVID-19 on our business, recognizing that factors related to COVID-19 are outside of the company's control and subject to change.

Speaker 4: We expect our total revenue for 2022 to range from $5.6 billion to $5.75 billion, representing growth of 7.4% to 10.3%, including a foreign exchange headwind of approximately $40 million.

We expect our total revenue for 2022 to range from $5 6 billion.

To $5 75 billion.

Presenting growth of seven 4% to 10, 3%, including a foreign exchange headwind of approximately $40 million.

Speaker 4: This also reflects the expected revenue headwind in clinical solutions from reimbursable expenses.

This also reflects the expected revenue headwind and clinical solutions from Reimbursable expenses excluding.

Speaker 4: Excluding this headwind, we expect clinical revenue growth in low double-ditches.

Excluding this headwind, we expect clinical revenue growth and low double digits.

Speaker 4: It also reflects the continued strength in our commercial business for which we expect revenue growth in the low teens.

It also reflects the continued strength in our commercial business for which we expect revenue growth in the low teens.

Total revenue growth also includes a contribution from acquisitions of approximately 100 basis points and an estimated net headwind of 190 basis points from Reimbursable expenses.

Speaker 4: Total revenue growth also includes a contribution from acquisitions of approximately 100 basis points.

Speaker 4: and an estimated net headwind of 190 basis points from reimbursable expenditures.

Speaker 4: We expect our total adjusted EBITDA to range from $840 million to $880 million.

We expect our total adjusted EBITDA to range from $840 million to $880 million.

Speaker 4: This reflects an adjusted EBITDA margin of 15% to 15.3%, up approximately 45 basis points from 2021.

This reflects an adjusted EBITDA margin of 15% to 15, 3% up approximately 45 basis points from 2021.

Speaker 4: Lastly, we expect adjusted diluted EPS to range from $4.98 to $5.24 for a year-over-year growth of 11.7% to 17.5%.

Lastly, we expect adjusted diluted EPS to range from $4 98.

To $5 24.

Our year over year growth of 11, 7% to 17, 5%.

Our guidance incorporates interest expense of $70 million to $72 million, our non-GAAP effective tax rate of 23, 5% and an estimated diluted share count of $105 7 million shares.

Speaker 4: Our guidance incorporates interest expense of $70 to $72 million, a non-GAAP effective tax rate of 23.5 percent, and an estimated diluted share count of 105.7 million shares.

Speaker 4: Further, we expect our net cash outlay for income taxes during 2022 to range from $70 to $75 million.

Further we expect our net cash outlay for income taxes during 2022 to range from $70 million to $75 million.

We expect first quarter revenue of $1 315 billion to $1 33 5 billion.

Speaker 4: We expect first quarter revenue of $1.315 billion to $1.335 billion.

Speaker 4: and total adjusted EBITDA of $163 million to $173 million.

And total adjusted EBITDA of $163 million to $173 million.

Speaker 4: This reflects as-reported revenue growth of 8.8 percent to 10.4 percent and adjusted EBITDA growth of 7.9 percent to 14.5 percent compared to the first quarter of 2021.

This reflects as reported revenue growth of eight 8% to 10, 4% and adjusted EBITDA growth of seven 9% to 14, 5% compared to the first quarter of 2021.

Speaker 4: This revenue growth includes an estimated contribution from acquisitions of approximately 90 basis points, an FX headwind of approximately $14 million, and a headwind of approximately 200 basis points due to reimbursable expenses.

This revenue growth includes an estimated contribution from acquisitions of approximately 90 basis points and FX headwind of approximately $14 million and a headwind of approximately 200 basis points due to reimbursable expenses.

Speaker 4: This reflects modest pressure related to the impact of the Omicron variant on staff and site productivity, along with normal seasonality.

This reflects modest pressure related to the impact of the omicron variant on staff and site productivity along with normal seasonality.

We expect the quarterly pacing of 2020 to be similar to that of 2021 as the impact of omicron subside and we see an accelerating ramp in our clinical large pharma partnerships as well as sending us one product launches and commercial.

Speaker 4: We expect the quarterly pacing of 2022 to be similar to that of 2021, as the impacts of Omicron subside, and we see an accelerating ramp in our clinical large pharma partnerships, as well as Sineus One product launches in commercial.

This completes our prepared remarks, and we would be happy to answer any questions operator.

Speaker 4: This completes our prepared remarks and we would be happy to answer any questions.

Thank you to ask a question you will need to press star one on your telephone to withdraw your question press the pound key.

Speaker 1: Thank you. To ask a question, you'll need to press star 1 on your telephone. To withdraw your question, press the pound key. Our first question comes from Eric Coldwell with Baird. Your line is open.

First question comes from Eric Coldwell with Baird. Your line is open.

Speaker 5: Thank you. Good morning. Not sure which CRO optical headwind we're supposed to focus on today, so I'm sure there will be a lot of Q&A on the pass-through situation, but I want to focus on the prior industry concern, which is small biotech exposure. In a nutshell, you guys report SMID clients at about half of your total revenue. I was curious if you could give us

Thank you good morning, not sure, which CRO optical headwind, we're supposed to focus on today. So.

I'm sure there will be a lot of Q&A on the pass through situation, but.

I wanted to I wanted to focus on the prior.

Industry concern.

Which is.

Small biotech exposure.

In a nutshell you guys report smid clients at about half of your total revenue I was curious if you could give us more detail on the client mix within the company, maybe even by division, but in total have you taken a look at truly small biotech.

Speaker 5: more detail on the client mix within the company, maybe even by division, but

Speaker 5: In total, have you taken a look at truly small biotech, even if it's pre-commercial accounts?

Even if its pre pre commercial accounts and what that might represent as a percent of your total revenue mix.

Speaker 5: And what that might represent is a percent of your total revenue, mix, bookings, backlog, whatever. We'd love to get some details on that. Yeah. Well, good morning, Eric.

Bookings and backlog whatever.

We'd love to get some details on that.

Yes.

Eric.

Sure.

Will impact from that as we go through it but yes, we have looked at that obviously I think with.

Speaker 3: We'll unpack some of that as we go through it, but yeah, we have looked at that obviously. I think with the earnings comments earlier in the week, we've taken a good walk through all of that element, expecting questions on that today. So, you know, we've been very strong in this mid, and I'll start from kind of where the environment sits.

With the.

Earnings comments earlier in the week.

Technical walk through all of the element I expect some questions on that today. So we have been very strong in the smid and.

I will start from kind of where the environment sits.

Speaker 3: You know, we see great strength in the SMIDT at the moment. We've seen that across both kind of ends of the SMIDT as well. The emerging biotech, as well as the more mature, larger customers in the SMIDT that we've kind of do the majority of work, the majority of our work in.

We see great strength in the estimate at the moment.

We've seen that across both kind of ends of the Smith as well the emerging biotech as well as the more mature logic of service in the estimate that we've kind of do the majority of work the majority of our work.

Speaker 3: I think across the company, when we look at where we sit with that, we're sub-15% on what we would, I think what you would call pre-revenue, Smith.

Across the company when we look at.

Where we sit with that with some 15%.

What we would roughly what you would call pre revenue.

Smith, but not for US includes people who have.

Speaker 3: But that for us includes people who have, you know, incredibly strong funding through funding partners, you know, private equity houses that appoint money through clinical development, etc. So we look at that, see very healthy trends.

Credibly strong funding through funding partners private equity houses that are pulling money through clinical development et cetera. So we look at that see very healthy trends.

Speaker 3: It's the good solid RFP flow and I think the tool set that we take to that market, you know the go-to-market approach we have for that, the kind of transactional go-out-win standard project that we do through kind of a Sinterac model as well as the old Cineos kind of SMID model.

See good solid RFP flow and I think the toolset that we take to that market. The go to market approach we have for that.

Kind of transactional let's go out win Standalone project, we do through kind of a <unk> model as well as the Sydney ice.

Smith model you've.

Speaker 3: You've got that, but also it's very attractive to Cineoswap because they don't bring the infrastructure. They want to keep it light.

<unk> got that but also it's very attractive to <unk>, because they don't bring me infrastructure they want to keep it light but.

Speaker 3: They can use it for clinical development, medical affairs, for commercial. So I think we have a very attractive proposition to that sector in the market, both here domestically in the US.

You can use it for clinical development Medical affairs for commercial so I think we have a very attractive proposition to that sector in the market. Both here domestically in the U S as well as internationally and a lot of that work that come through when we look at our pipelines its diverse not just by market sector.

Speaker 3: as well as internationally. And a lot of our work that comes through when we look at our pipelines is diverse, not just by market sector, but also by jurisdiction. So we're seeing a lot of work that we're winning in Asia-Pac, Europe , you know, where we've always been strong, and the U.S. So we see a healthy environment. We don't see...

Also by jurisdiction. So we're seeing a lot of work we are winning in Asia Pac Europe , where we've always been strong and the U S. So we see a healthy environment, we don't see it.

Speaker 3: you know, problems in that sector. You know, when we look at where we were last year, we're actually well positioned against where we were at this time last year, which was very strong as well.

Problems in that sector.

Okay.

We look at where we were last year, we're actually well positioned against this time last year, which was very strong as well so I.

Speaker 3: So, you know, I hear the concerns around funding, we're not seeing that.

I hear the concerns around funding, we're not seeing that.

Speaker 3: We're seeing good, strong, healthy pipelines, good engagement with those customers, cash on the balance sheets for them, a well-funded environment.

We're seeing good strong healthy pot lines, good engagement with those customers cash on the balance sheets that for them.

Well funded environment.

Alastair.

Speaker 5: I was sure that's a great response. I think your pre-commercial mix is probably a lot less than people feared or thought. Ironic to say fear when that has been a big growth driver in the past, but any chance you could break that out between clinical and commercial and then just any, you've made.

Great response, I think your pre commercial mix is probably a lot less than people feared or thought.

Ironic to say fear when that was and has been a big growth driver in the past but.

Any chance you could break that out between clinical and commercial and then just any you've made some.

Speaker 5: Qualitative comments on what sounds like a strong environment, no change in demand, but any update on what you've seen for pipeline overall, volumes, values, any additional commentary? Yeah, well, I'll start you on the volume of the pipeline, the values of the pipeline. They're very strong. I mean, I think when you look back at where we were Q1 last year, you had a lot of the COVID catch up in that.

Qualitative comments on what sounds like a strong environment no change in demand, but any.

Any update on what Youre seeing for pipeline overall volumes values any additional commentary.

Yes, well give you I'll start you on the volume the volume of the pipeline the values of the pipelines are very strong.

When you look back to where we were Q1 last year you had a lot of the COVID-19 catch up in that.

Speaker 3: kind of time period, so there were record levels. We're not far off of that. You know, it's a healthy environment across the space, SMID, large and small SMID, and in the large pharma. We see, you know, we have a go-to-market philosophy that attacks all parts of that market, like our big competitors, and, you know, we see a strong, healthy environment. We see...

Kind of time.

Time period, so there were record levels, we're not far off of that.

It's a healthy environment across the space Smith Bulge on small suite and in the large format and we see.

We have a go to market philosophy that the attacks all parts of that market like Capex competitors, and we see a strong healthy environment, we see.

Speaker 3: A lot of compounds going through, well, probably record levels of compounds going through development, devices, et cetera, biologics.

A lot of compounds, Scott probably record levels of compounds going through development devices et cetera biologics.

We don't see a problem.

Speaker 3: So, you know, Jason, I think you've got thoughts on the split of the pre-revenue? Yeah. I mean, Eric, if you remember back during 2020, we...

So Jason on your thoughts on the on the split of the.

The pre revenue, yes, I mean, Eric if you remember back during 2020, we.

Speaker 4: For a different reason, we were looking at liquidity and being able to pay on time, but we were providing metrics around pre-revenue biotech by segment.

For a different reason, we were looking at liquidity and being able to pay on time, but we were providing metrics around pre revenue biotech by segment. So.

Speaker 4: In 2020, we continuously said pre-revenue biotech in commercial is less than 5% and in clinical is less than 10%.

In 2020, we continuously said you know pre revenue biotech and commercial is less than 5% and clinical is less than 10%.

Speaker 4: Fast forward now, and obviously we acquired Center Act, and that's been a strong market. Those numbers have ticked up a bit, but commercial is still well below 5% in clinicals.

Fast forward now and obviously, we acquired Center Act and that's been a strong market those numbers have ticked up a bit but commercial is still well below 5% and clinical's.

Speaker 4: going to be below 15% or right at 15% as well. So, that's how you get to the math of overall. And just a data point from 2020 when we were talking about this as well.

To be below 15% or right at 15% as well so that's how you get to the.

The math of overall and just a data point from 2020, when we were talking about this as well.

Speaker 5: Thanks very much. I'll let others handle the backlog adjustment. Thank you guys.

Thanks, very much I'll, let I'll, let others handle the.

Backlog adjustments. Thank you guys.

Alright.

Speaker 1: Thank you. Our next question comes from David Windley with Jeffries. Your line is open.

Thank you. Our next question comes from David Windley with Jefferies. Your line is open.

Hi, Good morning, Thank you picking up on Erik's question could could you elaborate alastair on.

Speaker 5: Hi, good morning. Thank you. Picking up on Eric's question, could you elaborate, Alistair, on...

Speaker 5: the year-over-year part of your response where, you know, you commented on last year had a lot of COVID catch-up in it, and so it sounds like you're down a little bit from that level, but you still view that as strong. Maybe help us a little bit more to understand.

The year over year part of your response, where you commented on last year had a lot of COVID-19 catch up in it and so yes, it sounds like youre down a little bit from that level, but you still view that as strong maybe help us a little bit more to understand.

Speaker 5: why you know not above last year is still ok

Why not above last year is still okay.

Speaker 3: Well, I think you've got to look at the trends over the last two or three years.

Well I think you've got to look you've got to look at the trends over the last two or three years.

Speaker 3: and you've got a big, when COVID.

You've got a big when when Covid started to go away.

Speaker 3: start to go away. You know, we know, right, if you go back into the middle of the COVID pandemic in kind of the middle of 2020, people put programs on hold. Larger farmer put programs on hold. Smith kind of carried on because time isn't really money for them. So we didn't see much much of a difference in in kind of that Smith pacing, but we did in large farmer. Then as you came out of the pandemic kind of Q4 of 20.

If you go back into the middle of the Covid pandemic and kind of the middle of 2020 people programs on hold.

Roger volatile programs on hold.

Smith's kind of carried on because time is really money for them. So we didn't see much of a difference in kind of that smid pacing, but we did in large pharma Ben as you came out of the pandemic kind of Q4 'twenty Q1 in 'twenty. One you saw those programs coming back through the through the pipes.

Speaker 3: Q1 and 21, you saw those programs coming back through the pipes, right, to get into the market and caught up.

To get into the market in coal.

Speaker 3: So you don't have that catch-up, so to speak, as we go into 2022.

So you don't have that catch up so to speak as we go into 2022.

Speaker 3: But when you look at where we were in 2020 at this time,

But when you look at where we were in 2020 at this time just.

Speaker 3: before we went into the pandemic and the quarters beyond that, we are seeing great pipelines across all sectors, large pharma, larger SMID, emerging SMID, biotech, whatever you want to call them, so we don't see an issue with that. We expected that peak of catch-up to be the peak and it was the kind of record.

Before we went into the pandemic and the quarters beyond that.

We are seeing great pipelines.

Across all sectors large pharma largest smith emerging smid biotech whatever you want to call them.

So we don't see an issue with that we expected that peak of casual to be the peak.

Was that kind of record.

Speaker 3: But when I say we're not far off that, I mean we're not far off that at all. So we have strong pipes, strong throughput of RFPs.

But when I say, we're not far off that I mean, we are not far off that at all so we have shrunk pipes.

Strong throughput of Rfps.

Speaker 3: and uh... you know we don't the it was a big concern i mean i think we were surprised to some of the commentary earlier in the week that anybody

We don't see it as a big concern I mean, I think we were surprised with some of the commentary earlier in the week Theres anybody soon.

Speaker 5: Got it, got it. Okay, appreciate the additional color there. So pivoting then, the first thing I want to ask, just to confirm the guidance that you're giving today, and particularly on the revenue line, is that consistent? Is that basically exactly on top of what you told us to expect in early

Got it got it okay I appreciate the additional color there. So pivoting then.

The first first thing I wanted to ask just to confirm the guidance that youre, giving today.

And particularly on the revenue line.

Is that consistent is that basically exactly on top of what you told us to expect.

And early.

Early January at Tyco's Congress.

Yes, yes.

Speaker 4: Yes, yes, Dave. I mean, there's been a little bit of change in terms of the FX headwind, but yeah, that's exactly, you know, as we said then, we obviously had line of sight to what, you know, was going on in the pipe, in the backlog build, in the phasing, and also in, and, you know, the reimbursable expense flow.

There has been a little bit of change in terms of the FX headwind.

But yes.

Yes. This is exactly as we said then we obviously had line of sight to what.

What's going on in the pipe and the backlog build and the phasing and also in <unk>.

The reimbursable expense floating.

Speaker 5: So, to say it differently, the significant adjustment to backlog that we're seeing today is really not incremental information or incremental action to you relative to your expectations for 22.

So the.

To say it differently the significant adjustment to.

Backlog that we're seeing today is really not incremental information or incremental action to you relative to your expectations for 'twenty two.

Speaker 4: Correct. That's correct. I mean, if you know, if you look at the trends that we've seen, Dave, if you just take clinical reimbursable expenses, and you go back pre COVID, right, we were as a percentage of our direct fee revenue, our net service revenue, right, we were in a 50-55% range.

Correct that's correct.

If you look at the trends that we've seen David can you just take critical Reimbursable expenses and you go back pre Covid right. We were as a percentage of our direct fee revenue. Our net service revenue right. We were in a $50 55% range.

Speaker 4: COVID hit, you go down into low 40s.

Does it hit you go down into the low forty's per quarter.

Speaker 4: per quarter. And then, you know, we came out of that and we sort of saw it in the mid to high 40 range. And then you dump a vaccine on top of it. And that kind of shields what's happening in 2021 on the reimbursable. So we knew the underlying portfolio was in that mid to high 40%. And that's what we're that's what we're looking at as we go forward. And the adjustment reflects.

And then we came out of that and we sort of solid in the mid to high 40% range.

And then you dump a vaccine on top of it and that kind of shields, what's happening in 2021 on the Reimbursable. So we knew the underlying portfolio within that mid to high 40% and that's what we're that's what we're looking at as we go forward and the adjustment reflects.

Speaker 5: OK, and then I guess finally, in terms of.

Okay.

And then I guess finally in terms of.

Speaker 5: the the nuance i think this is the second time that you've made an adjustment to the backlog relative to your reimbursement uh... estimate

The nuance I think this is the second time that you have made an adjustment to the backlog relative to your reimbursement.

Estimates.

Speaker 5: You kind of answered where you're triangulating to. Do you think that your go-to-market strategy and your execution strategy is different than your peers as it relates to remote and DCT that would be influencing how much reimbursement load you have that might be different than your peers?

You kind of answered where youre triangulating to do you think.

That your go to market strategy and your execution strategy is different than your peers as it relates to remote and DCT that would be influencing how much reimbursement load you have that that might be different than your peers.

Yes, I think there's two factors actually Dave I think we do have we've put some things in house that were instrumental fundamentally in delivering DCT properly city cake hurling with etc, and that counted converse.

Speaker 3: Yeah, I think there's two factors to that, actually, Dave. I think we do have, you know, we've bought some things in-house that are instrumental or fundamental in delivering DCT properly. So the kick, illingworth, et cetera. And that kind of converts revenue that would have been 606 pass-throughs to actually 605 direct, so that's good for us and we're driving profitability off of that.

Revenue that would have been six six pass throughs to actually 605 direct so that's good for us because we're driving profitability off of that.

Speaker 3: The other factor, I think, is we were probably behind the eight ball in terms of overall DCT provision when we went into the pandemic. So I think we started from a lower level.

The other factor I think as we were.

Probably be behind the April in terms of overall DCT provision when we went into the pandemic. So I think we started from a lower level.

Speaker 3: I know I've caught up and I'm probably one of the leaders now in that delivery.

Core to open a probably one of the leaders now in that delivery.

Speaker 3: And so some of this adjustment is taking that, it kind of bridges some of that gap where we started from an inferior position, have moved faster, caught up, overtaken, but it reflects higher in our reimbursables because it shifts the model more.

So some of this adjustment is taking that.

Rick just some of that gap, where we started from.

An inferior position have moved faster.

So <unk> taken and but it reflects higher.

<unk> because it shifts the multiple.

Speaker 5: OK. All right. That's helpful. I'll leave it at that. Thank you. OK. Sure thing.

Okay, Alright, that's helpful I'll leave it at that thank you.

Okay.

Speaker 1: Thank you. Our next question comes from Tycho Peterson with J.P. Morgan. Your line is open.

Thank you. Our next question comes from Tycho Peterson with Jpmorgan. Your line is open.

Speaker 6: Hey, good morning. Maybe just following up on that theme, Alistair, can you just talk a little bit about, you know, on decentralization and where, you know, you think we are today and where you think we're headed here in the near term in terms of kind of percentage of trials?

Hey, good morning, maybe just following up on that theme Alistair can you just talk a little bit about decentralization, then where you think we are today and where you think we are headed.

Here in the near term in terms of kind of percentage of trials.

Yes, good morning talk yes.

Speaker 3: Yeah, morning, Tycho. Yeah, we, I think about...

Yes.

Think about.

Speaker 3: probably half of our trials have some form of decentralization on it on them now either you know heavily or partial elements and that's you know that's a big uptick from where we used to be. I think people are

Probably half of our trials have some form of decentralization on it on them now either.

Heavily or partial elements.

That's a big uptick from where we used to be.

I think people are.

Speaker 3: We're kind of in an evaluation phase, I think, across the industry, where people are thinking about what their delivery platform will look like for their trials as they bring them into the market. You know, what they're comfortable with in terms of decentralization. As it's kind of become easier to do, people are thinking about it more. We certainly get a lot more questions about what kind of operational footprint would we put together for a trial. We have a DCT wizard that we can pump information in, and it kind of...

Kind of we're kind of in an evaluation phase I think across the industry, where people are thinking about what their delivery platform will look like for beta trials is to bring them into the market. While they are comfortable with in terms of decentralization.

It's kind of become easier to do people.

Thinking about it more we get certainly got a lot more questions about what kind of operational footprint would be put together for a trial. We have a decentralized we have a DCT with it that we can pull that information in and it kind of.

Speaker 3: Pops out the the most kind of ideal operational setup most implementable, you know, most pragmatic kind of setup

Pops out.

The most kind of ideal operational setup, most implementable, most pragmatic kind of setup.

Speaker 3: So I think it's here to stay, you know, we certainly believe that. I think it drives better execution, it certainly opens up the trials to more potential participants which should then drive...

So I think it's here to stay we certainly believe that I think it drives better execution. It certainly opens up the trials to more potential participants which should drive.

Speaker 3: better enrolment, better engagement, etc, more diversity, more inclusive, more diversity as well. So I think they're all very good things.

Better enrollment better engagement et cetera, more diversity include more inclusive.

Diversity as well so I think they are all very good things.

Speaker 3: And I think we're long overdue for modernization of clinical trials in terms of technology and being able to engage with patients and sites more remotely. So I think it's a very good thing. I think it's here to stay.

What is long overdue for modernization of clinical trials in terms of technology and being able to engage with patients and sites more remotely. So I think is a very good thing I think is here to stay.

Speaker 3: you know, where it goes from here, I don't think it will be a sudden overnight, everything is fully decentralised, I think it will be a slow progress now, but certainly that first big step has been made right across the sector, regulators, customers, as patients, etc, people are keen to try it and less kind of suspicious about it on the regs.

Where it goes from here I think it will be I don't think it will be a sudden overnight everything is fully decentralized I think it'll be a slow progress now, but certainly that first big step has been made right across the sector regulators customers as patients et cetera people are keen to try it in.

Less kind of suspicious about it on the regulatory side.

Speaker 6: And then how should we think about the adjustments, you know, you're doing today in terms of the long-range, you know, guidance you gave at the December annual state, you know, 10% top line and 11 to 14% EBITDA growth through 2023.

And then how should we think about the adjustments you're doing today in terms of the guidance you gave at the December analyst day.

Comprehend topline and 11, 40% EBITDA growth through 'twenty three.

Speaker 3: Sorry, Tycho, we missed the start of the question. The guidance from your December 20th annuals date, you know, you had given guidance through 23. How do we think about the adjustments you're making today in context of that prior longer-term guidance?

Sorry, Taco we missed the question.

The guidance from your December 20th Analyst Day, you had given guidance to 23, how do we think about the job that youre, making today in context of that net prior longer term guidance.

Speaker 4: Yeah, I mean, if you look at 2022, obviously we're at the upper end of that range despite this reimbursable headwind.

Yes, I mean, if you look at Hey, Tycho.

Look at 2022, obviously, where we're at.

Upper end of that range. Despite this reimbursable headwind.

Speaker 4: that we're talking about and that is now flowing through the numbers. When you look overall at the position of the company, and as Alistair mentioned, right, we had

That we're talking about and that is now flowing through the numbers. When you look overall at the position of the company and as Alastair mentioned right we had.

Speaker 4: In clinical, we have very strong pipelines, we have a very robust in-market, that's right across all customer cohorts. We have 15 plus percent backlog growth, excluding reimbursables in clinical, 20 plus percent in deployment.

And clinical we have very strong pipelines, we have a very robust end market.

Thats right across all customer cohorts, we have 15 plus percent backlog growth. Excluding reimbursable is in clinical 20 plus percent.

And deployment solutions book to bills are one three for TTM.

Speaker 4: Book-to-bills are 134 TTM and 114 TTM.

<unk> for TTM.

Speaker 4: in both businesses. So we feel very well positioned to continue our journey on that 7 to 10 percent through 2023.

And both businesses, so we feel very.

Very well positioned to continue our.

Our journey on that 7% to 10% through 2023.

Yes, let me add something to that so I'll talk.

Speaker 3: If you think about a 6.05 world, we used to shoot for a 1.2 book to bill, and we were all happy with that. We're at 1.34.

If you think about 605 world we used to shoot for one two book to Bill and we were all happy with that 134.

Speaker 3: We're very happy with that, it's driving strong growth. You know, the reimbursable adjustment, it's zero calorie revenue. And, you know, that's spread across the whole of our backlog that goes out, what, five, six years. So, you know, it'll pace in over time. You'll see that difference in the reimbursables over time.

We're very happy with that is driving strong growth the reimbursable adjustment zero calorie revenue.

And that's spread across the whole of our backlog that goes out five six years. So.

It's pacing.

Pacing over time Youll see that difference in the Reimbursable is over time.

Speaker 3: But the backlog, the book-to-bills that we're driving across both sectors, are super healthy compared to where we need them to be to drive that revenue growth and that EBITDA growth. So we're very comfortable with that.

But.

The backlog book to bills that we're driving across both sexes super healthy compared to where we need them to be to drive that revenue growth and that EBITDA growth. So we're very comfortable with that.

Speaker 3: We've made this adjustment. We've given you more visibility into the reimbursables, the pasting of those over the last two years in the materials that we've posted.

We made this adjustment we are giving you more visibility into the reimbursable pacing of those over the last two years in the materials that we posted so gives you better visibility as to how we handle that you're seeing there the variability in pass throughs and wider so tricky to kind of manage through and handle so I.

Speaker 3: gives you better visibility into how we handle it. You see in there the variability in pass-throughs and why they're so tricky to kind of manage through and handle, so.

Hopefully you guys see that as we as we.

We move forward.

Underlying business, the real kind of revenue and EBIT generating whether we do it.

So at a very healthy.

Oprah swing.

Great.

Lastly, you are guiding to 45 bps of EBITDA margin expansion this year and our wage inflationary environment. That's been the other topic can you maybe just comment on some of the levers you're pulling to get that expansion this year.

Speaker 3: Yeah, I mean, we continue with the forward bound program that we've had. That's been really productive, very good for us in terms of handling increases in the cost base.

Yes, I mean, we continue with a full rebound.

Program that we've had that's been really productive.

Barry.

Good for us in terms of handling increases in our cost base.

Speaker 3: You know, we have a big portion of our revenue comes through FSP and deployment solutions, etc. So that's a cost-plus model. So it adjusts as it goes through. We're able to sit down with customers.

Have a big portion of our revenue comes through FSP in deployment solutions et cetera. So that's a cost plus model. So just as it goes through we're able to sit down with customers.

Speaker 3: and have a sensible conversation about, you know, the rate adjustments, etc. As we go through the year, we visit that a couple of times a year. We've been working on that since, well, since we started to see this at the start of 2021.

And have a sensible conversation about.

The rate adjustments etcetera, as we go through the year, we visit that couple of times, a year and we've been working on that since well since we started to see this at the start of 2021.

Speaker 3: We're an attractive employer, we're on the Forbes list, we're on the Fortune list, we've been noted for our approach to D&I.

We are an attractive employer on the Forbes list on the Fortune list were been noted for our approach.

We're in a good place to work we are a good culture people want to compare a high of 3300 people.

Speaker 3: We're a good place to work, we have a good culture, people want to come here. We hired 3,300 people net into clinical last year alone, plus commercial on top of that.

Net into clinical last year alone plus commercial on top of that.

Speaker 3: You know, we've got powerful recruitment and reasons for people to want to be at Cineos Health in terms of the culture we provide, the benefits, et cetera, et cetera. So we're handling it. It is a tough environment, but it's steady. You know, it's not swinging up and down. It's just steady. The level of turnover in our business and everybody else's, not just our sector, but you know, it seems to be across the...

We've got a powerful recruitment and reasons for people to want to be it's just help.

In terms of the culture, we provide the benefits et cetera et cetera.

So we are handling it just tough environment, but it's steady.

Swinging up and down its just steady level of turnover in our business and everybody else's not just not a factor, but it seems to be across the board.

Speaker 3: The rest of the world is higher, and we've adjusted to it. Our talent recruitment engines are in place. We bring people straight out of college into great careers, and they do well. So we're, I think, very well equipped to handle it. Great. Thank you very much.

Westwood is higher and we've adjusted our.

Our recruitment engines are in place, we bring people straight out of college, and so great careers and they do well.

I think very well equipped to handle it.

Great. Thank you very much.

Yes.

Okay.

Thank you. Our next question comes from John Kreger with William Blair. Your line is open.

Speaker 1: Thank you. Our next question comes from John Krieger with William Blair. Your line is open.

Speaker 6: Hey, thanks very much. I had two kind of follow-ups, again, relating to this sort of pass-through, Alistair. So I guess the first, and this one might be more for Jason, since it seems like this sort of shift in the business is picked up a layer, is accelerating.

Hey, thanks very much.

To kind of follow ups again relating to the sort of pass through Alastair. So I guess, the first and this one might be more for Jason.

It seems like this sort of shift in the business has picked up of later is accelerating as you think about how this filters through the P&L as you move through 'twenty two and.

Speaker 6: As you think about how this filters through the P&L as you move through 22 and beyond, does the impact kind of get larger in the second half of 22 versus the first half? And should we assume the impact is maybe larger in 23 relative to 22? If you could just speak to that.

And beyond does the impact kind of get larger.

In the second half of 'twenty two versus the first half and should we assume the impact is maybe larger in 'twenty three relative to 'twenty. Two if you could just speak to that.

Speaker 6: And then the other question is from an operational standpoint, what does this mean to you? And is it really only clinical, is it commercial, does this change the way you think about sort of staffing or really building the operations of the business? Thanks.

And then the other question is from an operational standpoint, what does this mean to you and is it really only clinical is a commercial does this change the way you think about sort of staffing are really building the operations of the business.

Yeah, Hey, John when you look at the sort of sequencing of the Reimbursable.

Speaker 4: Yeah, hey, John , when you look at the sort of sequencing of the reimbursables next year in the clinical side.

Next year on the clinical side.

Speaker 4: You know, you're going to see the most pressure, you know, in the probably in the second and third quarters of the year relative, you know, to 2021.

Youre going to see.

The most pressure.

Probably in the second and third quarters of the year relative to 2021.

Speaker 4: Just because we did have we still had some pressure in quarter one of last year at the most pressure from up from the pure Pandemic impact right so lowest travel and all that but

Just because we did have we still have some pressure in quarter one of last year. The most pressure from a from a pure pandemic impact right. So the lowest travel and all of that.

But.

Speaker 4: by and large, you know, you're going to be, you know, flattish down a little bit in the first three quarters, and then we'll start to get back to a little bit of growth, I would imagine, on the reimbursables in quarter four. By the time we work through all that into 2023, and some of this depends on what happens with COVID vaccine-type work, right? Because that type of work does continue.

By and large you're going to be flattish to down a little bit.

The first three quarters, and then we'll start to get back to a little bit of growth I would imagine on the reimbursable in quarter four.

By the time, we worked through all of that into 2023 and some of this depends on what happens with Covid vaccine type work right because that type of work does continue.

Speaker 4: But we expect it to sort of trend out and flatten out and just be consistent. But we'll have to continue to monitor it, but that's how we think about 2023.

But we expect it to sort of trend out and flatten out and just be consistent but we'll have to continue to monitor it but thats, how we think about 2023.

Speaker 4: And what was the second part of the question, John ? Operational. So it sounds like you're communicating that this is a relatively significant change in the business and a durable change. Does that impact the way you think about where you want to add staff, what sort of staff you're adding? I guess I'm going to go for different things. An accounting shift and really running the business.

And what was the second part of the question John operational so it sounds like you are communicating that this is a <unk>.

Relatively significant change in the business and a durable change does that impact the way you think about where you want to add staff what sort of staff you are adding.

The different yes.

An accounting shift and.

And.

Turning to the business.

Speaker 3: Yeah, it does. I mean, fundamentally, as trial designs change and trial execution changes more technically, more digitally, more remotely, you do need different skill sets. And I think we've been bringing them in, training people in them, there's more vendor management, there's more kind of, you know, dealing with more...

Yes.

Yes, it does I mean fundamentally as trial designs change in trial execution changes more technically more digitally more remotely you do need different skill sets and I think we've been bringing them in training people in them as more vendor management is more kind of.

Dealing with more.

Aspects of the trial, because it's not just one model I mean, when I think about the trials kind of trials of the future.

Speaker 3: know aspects of the trial because it's not just one model. I mean when I think about trials, kind of trials of the future.

What we've seen in the past you've found a bunch of investigation you maybe went to.

Speaker 3: You know what we've seen in the past, you've found a bunch of investigators and you, they went out and found your patients and you kind of had one model in each trial. What I think we'll see as we now move into the future is you'll have that piece, you know there are jurisdictions where that will always probably remain, there's certain therapies where that will remain but then you'll have an arm in the trial or a piece of your trial will come through a DCT channel and a piece of your trial might come through community sites, something like Aligo or you know a delivery model like that.

500 patients in your contract we're modeling in each trial I think we will see as we now move into the future as Youll have that piece. There are jurisdictions without always probably remain so therapies without will remain but then you'll have an arm in the trial or a piece of the trial will come through a DCT channel and a piece of your trial might come through community.

<unk> something like that to go.

We live in a model like that.

Speaker 3: So you're gonna have to have project managers who can handle those different streams. You're gonna have to have clinical staff who can work in a stream. We deploy the Illingworth Home Health folks. So we've already changed that model by buying some of that in-house.

So youre going to have to have project managers, who can handle those different streams youre going to have to have clinical staff, who can work in a stream.

We deploy the ending with home health folks. So we've already changed that model by buying some of that in house.

Speaker 3: to deliver, you know, before we just dispatched.

Deliver before we just dispatched.

Speaker 3: You know, we plugged somebody in from Inlingworth when they weren't part of Cineos and away they went. Now we own that organization, we cross-train them, you know, we're deploying them from within the company. So yeah, it does change the nature. It doesn't change it overnight. It's an evolution, not a revolution in that sense, but it does change the way that you think about people bringing in things like RxDS, RxData solutions.

We put somebody in for milling with when they werent part of Sandy.

And the way they went and now we own that organization, we cross train them deploy.

Deploying them.

From within the company. So yes, it does change the nature it doesn't change it overnight, it's an evolution not revolution in that sense, but it does change the way that you think about people, bringing in things like Rx, Yes, alright space solutions.

Speaker 3: you know, how do we look for patients differently? How do we design things that are more productive, et cetera, et cetera? So it becomes a more complicated market, but you know, we're already on that transition.

How do we look for patients differently, how do we design things more productive et cetera et cetera. So.

<unk> becomes a more complicated market, but.

We're already on that transition.

Great. Thank you.

Thanks, Joe.

Speaker 1: Thank you. Our next question comes from Patrick Donnelly with Citi. Your line is open.

Thank you. Our next question comes from Patrick Donnelly with Citi. Your line is open.

Speaker 7: Hey, thanks for taking the questions. I guess on the remote monitoring and decentralized trials, I mean, it certainly sounds like those are here to stay. Obviously, Alastair, you talked a little bit about the percentage that they are making up. I guess, how does that change in terms of the structure of some of those orders, even on the margin side, financially? I'm just wondering how that changes, you know, relative to the orders of old versus this, you know, if you can give us any metrics around it.

Hey, thanks for taking the questions.

I guess on the remote monitoring and decentralized trials I mean, it certainly sounds like those are here to stay obviously, Alison you talked a little bit about the percentage that they are making up I guess, how does that change in terms of the structure of some of those orders even on the margin side financially I'm, just wondering how that changes relative to the orders of old.

Versus this if you can give us any metrics around it would be helpful.

Speaker 3: Yeah, I'm not sure I have any metrics to handle that, but you know, when I look at where we're at on those decentralized trials or those elements of it, I don't see any real difference in margin. Actually, I see a little bit of an improvement in the margin.

Yes, Im not sure I have any metrics to handle that but.

Look where we're at on those decentralized trials. So there's elements of it I don't see any real difference in launch assay.

A bit of an improvement in the margin.

Speaker 4: Yeah, I mean, you know, Patrick, we've talked about, you know, over time and maybe and Michael Brooks is here with us. He can comment as well, but reimbursable expenses obviously come down, right? So that is a margin help. And that's what we saw in quarter four. That's what you know, that that certainly is a part of our margin story in 2022 as well with these reimbursables coming down in clinical. I do think it shifts some of the.

Yes.

Patrick we've talked about.

Todd and Navy and Michael Brooks is here with us he can comment as well but.

<unk> expenses, obviously come down right. So that is a margin help and thats. What we saw in quarter. Four that's what that certainly is a part of our margin story in 2022 as well with these reimbursable is coming down and clinical I do think it shifts.

Some of the.

Speaker 4: On the lower end of the margin side of the traditional clinical trial around monitoring and perhaps moves a little bit more into.

On the lower end of the margin side of the of the traditional clinical trial around monitoring and perhaps moves a little bit more into <unk>.

Speaker 4: higher margin data capture, data management, services that we provide to enable that, home health probably a little bit better than the traditional monitoring, et cetera. So I do think there's some benefit on the direct fee side, the net service revenue as well, but more to learn there. I don't know, Michael, if you want to comment, but... Yeah. When I look at the service fee revenue side...

Higher margin data capture data management services that we provide to enable that home health, probably a little bit better than the traditional monitoring et cetera. So I do think there's some benefit on the direct fee side. The net service revenue as well, but more to learn there I don't know Michael if you want to comment, but when I look at <unk>.

The revenue side, we are seeing the dollars of these shifts in different types of solutions.

Speaker 8: We are seeing the dollars are being shifted into different types of solutions. So if you're a data scientist from.

Data science is remote monitoring.

Speaker 8: our medical needs, things like that. There are some benefits to our customers that we're able to return to them, but the margin of those I think will be higher over time, particularly as automation comes into play and more sophisticated tools that we're deploying into those.

Medically things like that there are some benefits to our customers that we are able to return to them, but the margins as I think we will be higher over time, particularly as automation comes into play more sophisticated tools that we're deploying into those.

Speaker 8: into those trials. We have some really good examples when we've been able to work with our clients over the last year to help shape their clinical trials using that product development mindset. It's brought real good value to them, but also gave us benefits at the exact same time. And I agree with Jason. I think on the indirect side, our customers are gonna see a lot of benefit from that as well.

For this trial, we have some really good examples when we can also work with our clients over the last year has helped shape.

The trial is using that product development mindset.

Real good value to them, but also gave us the exact same time and I agree with Jay.

Direct side, our customers are going to see a lot of it Matt.

That's helpful and then Alastair maybe just to circle back on the biotech funding.

Speaker 7: That's helpful. And then, Alastair, maybe just to circle back on the biotech funding, apologize, but obviously a lot of focus there. I mean, it sounds like, you know, you're pretty confident on the durability of cash on the balance sheet.

But obviously a lot of focus there I mean, it sounds like you are pretty confident on the durability of cash on the balance sheet and maybe the public market might be a little bit quiet here, but the elevated levels of fundings in the last couple of years I guess are sufficient to continue to execute on it I guess can you just talk about particularly the small biotech that you talked about the Durham.

Speaker 7: Maybe the public market might be a little bit quiet here, but the elevated levels of funding from the last couple of years, I guess, are sufficient for you to continue to execute on it. Can you just talk about, particularly that small biotech that you talked about, the durability of cash and balance sheets, visibility that you guys have, your relatives, maybe past quarters, visibility maybe even into 23, it would be helpful just to touch on that. I appreciate it.

<unk> cash and the balance sheet visibility that you guys have relative maybe past quarters visibility may be even into 'twenty. Three we helpful. Just to touch on that I appreciate it.

Speaker 3: Yeah, you broke up a little bit there, John , but I think I got the gist of it. Yeah, I mean, you know, I think when we look at the biotech funding index as an indicator, it captures a part of the funding that comes into this market, right? So we have a truly global business development team that are bringing in projects that are coming out of Asia-Pac, Europe , and America, like I said before. You know, we're working with companies.

Yes, you broke up a little bit, but I think we've got the gist of it.

Yes.

I think when we look at the biotech funding index is an indicator it catches a part of the funding that comes into this market right. So.

We have a truly global business development team, bringing in projects that are coming out of Asia Pac Europe and America like I said before.

We are working with <unk>.

Companies.

Speaker 3: You know, Blackstone and Bain and people like that who fund clinical development through biotechs, etc., through portfolios.

Black.

Blackstone and pain in people who.

Clinical development through biotechs et cetera through portfolios.

Speaker 3: And we see a lot of money going into the emerging biotechs, you know, they've got great science, they are driving things forward. You know, when we, we obviously do, you know, credit checks and all that kind of stuff on customers, we don't have any problems at the moment that I'm aware of anyway, looking at Jason, but he's shaking his head on cash collection and things like that from that sector and all the indicators that we look at and think about.

And we see a lot of money going into the emerging biotechs.

They've got great science, they are driving things forward.

We obviously do credit checks and all that kind of still phone customers. We don't have any problems at the moment. The I'm aware of anyway, looking adjacent but you're shaking your head on cash collection and things from that sector.

The case that we look at and think about that.

Speaker 3: that kind of raise a flag to you that somebody might be having problems we're not seeing.

It kind of raise a flag to you that somebody might be having problems, we're not seeing.

Speaker 3: You know, I mean, I remember back in the financial crisis, 2009, wasn't it?

I mean, I remember back in the financial crisis.

Nine 2000 phenomenon.

Speaker 3: We saw problems then, for sure, but we don't see any of that now and it's good science.

We saw problems then for sure, but we don't see any of that now and its good science.

<unk>.

Speaker 3: incredible amount of assets that are coming through for development, cell and gene therapy, you know, you've got now, obviously, with the COVID tech, you know, the vaccine technologies, mRNA, people are looking at, well, can our product be delivered through an mRNA technology, etc.

Credible amount of assets.

Coming through the development Southern gene therapy, you've got now obviously with the Covid.

The vaccine technologies mrna people are looking at won't come up product be delivered through an mrna technology et cetera, we've seen a lot of investment and that kind of stuff. So we're just not seeing it.

Speaker 3: We're seeing a lot of investment in that kind of stuff. So we're just not seeing it. And I can assure you, we look at our pipelines.

<unk>.

I can assure you we look at our pipelines.

Speaker 3: a lot because it's the tip of the spear and also we look at where we're at in the early phase with the early phase businesses, translational science guys, our early phase science team in the clinics and we have record demand in that.

A lot.

The tip of the spear.

<unk>.

And also we look at where we are at an early phase with the early phase business as translational science guys.

The early phase science team in the clinics and we have record demand in that sector and that Bakken area in the coal mine is looking at that.

Speaker 3: And that's our canary in the coal mine is looking at that, you know, it's looking as far forward in the process as you can of compounds, where they're going to go from one to, you know, phase one to phase two and onwards.

Looking forward in the processes count of compounds, where they're going to go from one to.

Phase one phase two and onwards.

We maintain a problem.

Great. Thanks Alastair.

Thank you and as a reminder, if you would like to ask a question press. The Star then the one key on your Touchtone telephone.

Speaker 1: And as a reminder, if you would like to ask a question, press the star, then the one key on your touchtone telephone. Please stand by while we compile the Q&A roster.

Please standby, while we compile the Q&A roster.

We have a follow up from Eric Coldwell with.

Speaker 1: We have a follow-up from Eric Caldwell with Baird, your line is open.

Baird Your line is open.

Speaker 9: Hey, thank you for bearing with me, and I apologize if I somehow missed it. If I had more time and more brain cells, I'd probably be able to figure it out, but did you quantify the backlog adjustment separate from the quarterly pass-through bookings in 4Q? So, you know, there's kind of a couple of components here to, I think, to get to the math, but maybe you could just spoon-feed it.

Hey, thanks.

With me and I apologize if I somehow missed it if I had more time and more brain cells, it'd probably be able to figure it out but.

Did you quantify the backlog adjustment separate from the quarterly pass throughs.

Q, so theres kind of a couple of components here too I think to get to the math, but.

Maybe you could just spoon feed us on that a little bit.

Speaker 4: Yeah, hey, Eric, Jason, no, we didn't quantify it. And at this point, not thinking.

Yeah, Hey, Eric Jason No we didn't quantify it.

And.

At this point not thinking that.

Speaker 4: that we will. I think if you, and Dave mentioned this, if you think back to quarter three of twenty when we made our first adjustment, you know, we talked about sort of the size of that at the time.

That we will I think if you and Dave mentioned this if you think back to quarter three of 'twenty. When we made our first adjustment.

We talked about sort of the size of that at the time.

I think.

Speaker 4: you know, in the $2.50 range, this is going to be, you know, well above that because we're, you know, as we continue to look at 2021 and the new awards and the trends that we're seeing in the existing portfolio, we just wanted to take...

And the $2 50 range. This is going to be well above that because we're as we've continued to look at 2021, and the new awards and the trends that we're seeing in the existing portfolio.

Wanted to.

Take.

All of it out that we believe that we can so.

Speaker 4: all of it out that we believe that we can. So, you know, and just so everybody's on the same wavelength, excluding the reimbursables, right? We still had a really, a really strong quarter, a book to build one, two, six in clinical and a one, three, four TTM. But that's the way to think about it, Eric, in terms of sizing.

Yeah.

Just so everybody is on the.

The same wavelength, excluding the Reimbursable right, we still had a really really strong quarter in the book to Bill of 126 in clinical and a one 3% for TTM, but that's the way to think about it Eric in terms of sizing it.

Speaker 9: Okay, I just thank you for that. I wasn't sure if you did or would, but I think we get the optics part of it. So thanks again.

Okay. Thank.

Thank you for that I wasn't sure if you did or what but.

I think we get the I think we get the optics part of it so thanks again.

Speaker 9: Okay. Have a good day. Thanks, Eric. Thanks, Eric.

Yes.

Okay have a good day thanks, Eric.

This.

Thank you and there are no other questions in the queue I'd like to turn the call back to Alistair Macdonald for closing remarks.

Speaker 1: Thank you and there are no other questions in the queue. I'd like to turn the call back to Alastair MacDonald for closing remarks.

Speaker 3: Thank you. So again, our sincere thanks to the entire Cineos Health team for all they continue to do to manage through the pandemic while delivering for our customers. We remain very confident in our market positioning and look forward to a strong growth and profitability in 2022 and beyond as we execute on our value creation plan. So thank you for your attendance today, your interest and investment in our organisation and please be safe. Have a great day and be good. Thank you very much.

Thank you. So again, thanks to the entire finance health team for all they continue to do to manage through the pandemic, while delivering for our customers. We remain very confident in our market positioning and look forward to a strong growth and profitability in 2022, <unk> as we execute on our value creation plan. So thank you for your attendance today.

Your interest and investment in our organization and please be safe have a great day and be good. Thank you very much.

Speaker 1: This concludes today's conference call. Thank you for participating. You may now disconnect.

This concludes today's conference call. Thank you for participating you may now disconnect.

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Speaker 1: Good morning and welcome to the CineoSell's fourth quarter and full year 2021 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 be given at that time. I would now like to hand the conference over to Rodney Spate, Senior Vice President of Investor Relations. Please go ahead, sir. Thank you, Connie. Thank you, Connie. Thank you, Rodney. Thank you, Connie. Thank you, Rodney. Thank you, Connie. Thank you, Connie. Thank you, Rodney. Thank you, Connie. Thank you, Connie.

Good morning, and welcome to the city as health fourth quarter and full year 2021 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 be given at that time I would now like to hand, the conference over to Ronnie Speight Senior Vice President of Investor Relations. Please go.

Go ahead Sir.

Okay.

Speaker 2: Good morning, everyone. With me on the call today are Alistair McDonald, our Chief Executive Officer, Jason Meggs, our Chief Financial Officer, Michelle Keefe, President, Medical Affairs and Commercial Solutions, and Michael Brooks, Chief Development Officer and Global Head, Clinical Development Solutions.

Good morning, everyone with me on the call today are Alistair Macdonald, our Chief Executive Officer, Jason Meggs, Our Chief Financial Officer, Michelle Keefe, President of Medical Affairs, and commercial solutions, and Michael Brooks, Chief Development Officer, and global head of clinical development solutions.

Speaker 2: In addition to the press release, a slide presentation corresponding to our prepared remarks is available on our website at investor.cineoshealth.com.

Additionally, the press release, a slide presentation corresponding to our prepared remarks is available on our website at investor <unk> Dot com.

Speaker 2: Remarks that we make about future expectations, plans, growth, trends, anticipated financial results and prospects, and our expectations regarding the COVID-19 pandemic constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995, and we disclaim any obligation to update.

<unk> that we make about future expectations plans growth trends anticipated financial results and prospects and our expectations regarding the COVID-19 pandemic constitute forward looking statements for purposes of the Safe Harbor provisions under the private Securities Litigation Reform Act of 1995.

And we disclaim any obligation to update them.

Speaker 2: Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors. These factors are discussed in the Risk Factors section of our Form 10-K for the year ended December 31, 2021, and our other SEC filings.

Actual results may differ materially from those indicated by these forward looking statements as a result of various important factors. These factors are discussed in the risk factors section of our Form 10-K for the year ended December 31, 2021, and our other SEC filings.

Speaker 2: During this call, we will discuss certain non-GAAP financial measures which exclude the effects of events and transactions we consider to be outside of our core operations.

During this call, we will discuss certain non-GAAP financial measures, which exclude the effects of events and transactions, we consider to be outside of our core operations.

Speaker 2: These non- GAAP measures should be considered a supplement to, and not a replacement for, measures prepared in accordance with GAP.

These non-GAAP measures should be considered a supplement to and not a replacement for measures prepared in accordance with GAAP.

Speaker 2: For a reconciliation of non-GAAP financial measures with the most directly comparable GAAP measures, please refer to the appendix of our presentation.

For a reconciliation of non-GAAP financial measures with the most directly comparable GAAP measures. Please refer to the appendix of our presentation I would now like to turn the call over to Alistair Macdonald Alastair.

Speaker 2: I would now like to turn the call over to Alistair McDonald. Alistair?

Speaker 3: Thanks, Ronnie. Good morning, everyone, and thank you for joining us today. The strong fundamentals and ongoing execution across our business drove over 20% revenue growth in the quarter and 18% growth for the full year, accompanied by robust earnings and cash flow growth. We are pleased with how our unique product development strategy and mindset continue to resonate in the market and drive strong demand for our innovative solutions.

Thanks, Brian Good morning, everyone and thank you for joining us today.

The strong fundamentals and the ongoing execution across our business drove over 20% revenue growth in the quarter and 18% growth for the full year accompanied by robust earnings and cash flow growth. We are pleased with how our unique product development strategy and mindset continue to resonate in the market and drive strong demand for our innovative solutions.

Yes.

Speaker 3: The demand environment remains healthy, both in terms of macro market dynamics and robust new business pipelines across our organization. We are proud of the progress we have made over the past several years, as we have continued to evolve our business model by developing innovative, integrated offerings, enabled by data and technology, to position our business for long-term growth.

The demand environment remains healthy both in terms of macro market dynamics and robust new business pipelines across our organization.

I'm proud of the progress we have made over the past several years as we have continued to evolve our business model by developing innovative integrated offerings enabled by data and technology to position our business for long term growth dynamic assembly investments that are fueling growth include kinetic a modern customer engagement capability and they expand.

Speaker 3: Dynamic assembly investments that are fueling growth include Kinetic, our modern customer engagement capability, and the expansion of our DCT solutions through Ellingworth and StudiKick.

<unk> of our DCT solutions thrilling with Citic.

Speaker 3: Specifically in our clinical business, we've expanded our digitally-enabled delivery in response to the pandemic, which catalyzed the rapid deployment of decentralized trial capabilities and drove greater acceptance of these methods by regulators, customers, sites, and patients.

Specifically in our clinical business, we've expanded our digitally enabled delivery in response to the pandemic, which capitalize the rapid deployment of decentralized trial capabilities and drove greater acceptance of these methods by regulators customers sites and patients.

Speaker 3: While these innovations streamline the clinical development process for our customers, they also result in a lower mix of reimbursable expenses, a dynamic that we now expect to have a lasting impact on our revenue profile. We saw the continuation of this revenue mix change in the fourth quarter, which, along with reduced COVID work and foreign exchange headwinds, caused revenue to come in below our expectations.

While these innovation streamline the clinical development process for our customers. They also result in a lower mix of Reimbursable expenses, a dynamic that we now expect to have a lasting impact on our revenue profile. We saw the continuation of this revenue mix change in the fourth quarter, which along with reduced COVID-19 work and foreign exchange headwinds.

Cost of revenue to come in below our expectations.

Speaker 3: To better reflect this dynamic, we've adjusted our future expectations for reimbursable expenses, which impacted our total book-to-bill, net award and backlog metrics for the fourth quarter and full year 2021.

To better reflect this dynamic and we've adjusted our future expectations for Reimbursable expenses, which impacted our total book to Bill net awards and backlog metrics for the fourth quarter and full year 2021.

Speaker 3: Jason will go into further detail on these adjustments and the additional information we are providing to improve your visibility into these trends.

Jason will go into further detail on these adjustments and the additional information we are providing to improve your visibility into these trends.

Speaker 3: Importantly, we remain confident in our expectations for low double-digit clinical revenue growth for 2022, excluding the impact of reimbursable expenses along with continued margin expansion.

Importantly, we remain confident in our expectations for low double digit clinical revenue growth for 2022, excluding the impact of Reimbursable expenses, along with continued margin expansion.

Speaker 3: Now for some key highlights from the quarter. First, we reported solid book-to-bill ratios of 1.26 times for clinical solutions and 1.48 times for commercial solutions for the fourth quarter, excluding the impact of reimbursable expenses, resulting in trailing 12-month book-to-bill ratios of 1.34 times for clinical and 1.15 times for commercial.

Now for some key highlights from the quarter first we reported solid book to Bill ratios of 126 times for clinical solutions and 148 times for commercial solutions for the fourth quarter, excluding the impact of Reimbursable expenses, resulting in trailing 12 month book to Bill ratios of 134 times for clinical.

And 1.15 times for commercial.

Speaker 3: Total company net awards for full year 2021 grew 19.4% compared to 2020, excluding reimbursable expenses, driven by a 17.5% increase in clinical and a 25.6% increase in commercial.

Total company net awards for full year, 2021 growth 19, 4% compared to 2020, excluding reimbursable expenses, driven by 17, 5% increase in clinical and a 25, 6% increase in commercial.

Speaker 3: Second, our commercial solutions business continues to demonstrate strong performance, with our full-service approach resonating with customers and the Cineos One portfolio beginning to achieve commercialization milestones, resulting in 19.8% revenue growth.

Second our commercial solutions business continues to demonstrate strong performance with our full service approach resonating with customers and the <unk> one portfolio beginning to achieve commercialization milestones, resulting a 19, 8% revenue growth.

Speaker 3: With deployment solutions ending backlog growth of 20.9% for 2021, our commercial business remains well positioned for low-teens growth in 2022.

With deployment solutions, ending backlog growth of 29% for 2021, our commercial business remains well positioned for low teens growth in 2022.

Speaker 3: Third, we generated operating cash flow of $186 million during the fourth quarter, resulting in a record level of $450.3 million for the full year. This enabled $120 million of net debt reduction during Q4, reducing our net leverage ratio to 3.6 times.

Third we generated operating cash flow of $186 million during the fourth quarter, resulting in a record level of $453 million for the full year. This enabled a $120 million of net debt reduction during Q4, reducing our net leverage ratio to three six times.

Speaker 3: Now moving into further details on our results, in the fourth quarter we delivered total company revenue growth of 20.5% year over year as we continue to manage through the recovery from the pandemic.

Now moving into further details on our results in the fourth quarter. We delivered total company revenue growth of 25% year over year as we continue to manage through the recovery from the pandemic and.

Speaker 3: In clinical solutions, revenue grew 20.7% compared to the fourth quarter of 2020, including the impact of acquisition.

In clinical solutions revenue grew 27% compared to the fourth quarter of 2020, including the impact of acquisitions.

Speaker 3: Our organic growth was driven by our full-service portfolio, primarily the ongoing ramp in our larger pharma relationships accompanied by continued strength in our SMID customer segment and our oncology business.

Our organic growth was driven by our full service portfolio, primarily the ongoing ramp in our larger pharma relationships accompanied by continued strength in our smid customer segment, and our oncology business <unk>.

Speaker 3: Including reimbursable expenses and the impact of the related backlog adjustment, our clinical book-to-bill ratio for the fourth quarter was 0.34 times, resulting in a trailing 12-month book-to-bill ratio of 1.09 times. Excluding reimbursable expenses, our clinical book-to-bill ratio was 1.26 times for the fourth quarter and 1.34 times for the trailing 12-month period, resulting in year-over-year ending backlog growth of 15.4%.

Including Reimbursable expenses and the impact of the related backlog adjustment, our clinical book to Bill ratio for the fourth quarter was <unk> three four times, resulting in a trailing 12 month book to Bill ratio of 109 times.

Excluding reimbursable expenses, our clinical book to Bill ratio was 126 times for the fourth quarter and 134 times for the trailing 12 month period, resulting in year over year, ending backlog growth of 15, 4%.

Speaker 3: Turning to commercial solutions, revenue growth accelerated to 19.8% compared to the fourth quarter of 2020. The market for our commercial services remains significant, driven in part by the pace of innovation, new drug approvals, and the biotech funding environment.

Turning to commercial solutions revenue growth accelerated to 19, 8% compared to the fourth quarter of 2020, the market for our commercial services remained significant driven in part by the pace of innovation, new drug approvals in the biotech funding environment.

Speaker 3: Our growth remains broad-based, with our highest growth rates in deployment solutions and consulting, including continued strength in our SMID customer segment.

Growth remains broad based with our highest growth rates in deployment solutions and consulting including continued strength in our estimated customer segment <expletive> .

Speaker 3: Deployment solutions reached a new five-year high in deployed resources and record-ending backlog, along with record new team starts during the full year 2021. We also saw strong growth in our public relations and medical communications business.

Deployment solutions reached a new five year high in deployed resources on record ending backlog along with record new teams stalled during the full year 2021. We also saw strong growth in our public relations and medical communications businesses.

Speaker 3: The commercial team had another strong quarter of net awards with a book-to-bill ratio of 1.47 times for the quarter and 1.14 times for the full year 2021, when including the impact of reimbursable expenses.

The commercial team had another strong quarter of net awards with a book to Bill ratio of 147 times for the quarter and one four times for the full year 2021, when including the impacts of Reimbursable expenses full service commercial gross awards remained robust through the fourth quarter, resulting in full year growth of over 70% compared to <unk>.

Speaker 3: Full-service commercial gross awards remained robust through the fourth quarter, resulting in full-year growth of over 70% compared to 2020.

20.

Speaker 3: With the continued success of these offerings, the impact of CineoSwan and our strong backlog, we expect commercial revenue growth rates to lead the way for the total company in 2022.

With the continued success of these offerings the impact of <unk> and our strong backlog, we expect commercial revenue growth rates to lead the way for the total company in 2022.

Speaker 3: As we drive innovation, we see continued customer adoption of integrated product development solutions that work across our clinical to commercial capabilities.

As we drive innovation, we see continued customer adoption of integrated product development solutions that work across our clinical to commercial capabilities.

Speaker 3: We recently introduced a full service medical affairs offering, which will be under the leadership of Michelle Keefe, who has deep expertise in developing integrated solutions.

We recently introduced the full service medical affairs, offering which will be under the leadership of Michelle Keefe, who has deep expertise in developing integrated solutions similar in concept to sending a swan. This unique approach combines our medical affairs capabilities from across all parts of our business into an integrated offering connecting our railroad evidence.

Speaker 3: Similar in concept to Cineos One, this unique approach combines our medical affairs capabilities from across all parts of our business into an integrated offering, connecting our real world evidence, health economics, outcomes and research, medical science liaisons, medical communications and specialized consulting disciplines.

Health Economics outcomes research medical Science, Liaisons medical communications and specialized consulting disciplines.

Speaker 3: To date, customers have had limited access to medical affairs outsourcing alternatives, which are growing in importance as better evidence is required to ensure relevance with payers, providers and patients.

<unk> customers have had limited access to medical affairs outsourcing alternatives, which are growing in importance as better evidenced as required to ensure relevance with payers providers and patients.

Speaker 3: Sineos Health is ideally situated to grow this high value category as we believe our breadth of clinical and commercial capabilities combined with our integrated product development mindset positions us to become a leading brand in the medical affairs space.

<unk> is ideally situated to grow the high value category as we believe our breadth of clinical and commercial capabilities combined with our integrated product development mindset positions us to become a leading brand in the medical affairs space.

Speaker 3: Continuing the integration focus, our end-to-end fully integrated product development offering, Cineos One, continues to resonate with our customers, providing an attractive alternative to traditional limited outsourcing options.

Continuing the integration focus our end to end fully integrated product development offering sending a swan continues to resonate with our customers, providing an attractive alternative to traditional limited outsourcing options.

Speaker 3: The second commercial launch from this portfolio is now underway, following receipts of FDA approval for the underlying product in January . Planning activities have also started for other product launches in 2022, subject to final regulatory approval, with additional launches expected in 2023 and beyond.

The second commercial loans from this portfolio is now underway following receipt of FDA approval for the underlying product in January planning activities have also started for other product launches in 2022 subject to final regulatory approval with additional launches expected in 2023 and beyond and.

Speaker 3: In addition to the substantial awards, the growing CINEOS One portfolio is already driven into our clinical business. We expect it to increasingly contribute to commercial awards and revenue over the coming years.

In addition to the substantial awards the growing <unk> portfolio has already driven into our clinical business were expected to increasingly contribute to commercial awards and revenue over the coming years.

Speaker 3: Finally, before I hand over to Jason, I wanted to highlight the recent additions to our Board of Directors, along with our other areas of ESG progress. We are pleased to welcome Barbara Bodum and Alfonso Zulueta, and are excited about the additional depth of biopharma expertise and unique perspectives they add to our already strong Board.

Finally, before I hand over to Jason I wanted to highlight the recent additions to our board of directors along with our other areas of ESG progress. We're pleased to welcome Barbara boating, and Alfonzo Zillow Axa and are excited about the additional debt to biopharma expertise and unique perspectives, they add to our already strong board.

Speaker 3: Our other notable ESG accomplishments include our recent commitment to net zero emissions by 2040 and our participation in the Human Rights Campaign's Corporate Equality Index.

Other notable ESG accomplishments include our recent commitment to net zero emissions by 2040, and our participation in the human rights campaign's corporate equality index.

Speaker 3: In closing, I want to thank all of my 28,000 plus Sineos Health colleagues for their innovation and dedication as they continue to work tirelessly to provide new solutions and excellent service to our customers, sites and patients.

In closing I want to thank all of my 28000, plus cineaste, how colleagues for their innovation and dedication.

I continue to work tirelessly to provide new solutions and excellent service to our customers sites and patients.

Speaker 3: Jason will now provide additional comments on our financial performance and guidance.

Jason will now provide additional comments on our financial performance and guidance Jason.

Thank you Alastair and good morning, everyone.

Speaker 4: Before I discuss the details of our results, I want to provide some additional context on the trends in reimbursable expenses that Alistair highlighted.

Before I discuss the details of our results I want to provide some additional context on the trends in reimbursable expenses that Alastair highlighted.

Speaker 4: Since the start of the COVID-19 pandemic, we have experienced lower reimbursable expenses as remote monitoring and other DCT approaches have become a more prevalent part of our clinical trial.

Since the start of the COVID-19 pandemic, we have experienced lower reimbursable expenses as remote monitoring and other DCT approaches have become a more prevalent part of our clinical trials.

Speaker 4: This decrease in reimbursable expenses is primarily due to items such as lower travel expenses for our staff, due to sustained levels of remote monitoring, investigator meetings remaining virtual, and reduced costs for study medication.

This decrease in Reimbursable expenses is primarily due to items such as lower travel expenses for our staff due to sustained levels of remote monitoring investigator meetings remaining virtual and reduce cost per study medications.

Speaker 4: We are at the forefront of this transition with our customers and sites, and given the long-term benefits it provides, we expect this trend to continue.

We are at the forefront of this transition with our customers and sites and given the long term benefits. It provides we expect this trend to continue.

Speaker 4: As such, we have proactively adjusted our ending backlog to reflect our expectation of reduced reimbursable expenses going forward, mirroring what we are seeing across our existing portfolio as well as in our new award.

As such we have proactively adjusted our ending backlog to reflect our expectation of reduced reimbursable expenses going forward.

What we are seeing across our existing portfolio as well as in our New awards. These.

Speaker 4: These adjustments only impact our outlook for reimbursable expenses, not our view of underlying demand or profitability.

And these adjustments only impact our outlook for Reimbursable expenses, not our view of underlying demand or profitability.

Speaker 4: We therefore remain confident in our expectations for strong growth and profitability in 2022.

We therefore remain confident in our expectations for strong growth and profitability in 2022.

Speaker 4: Further, in response to feedback we've received from investors asking for deeper insights into key business drivers, we are providing additional information on our awards, book-to-bill, and backlog metrics, excluding the impact of reimbursable expenses.

Further in response to feedback we've received from investors asking for deeper insights into key business drivers. We are providing additional information on our awards book to Bill and backlog metrics, excluding the impact of Reimbursable expenses.

We are also including.

The amount of quarterly Reimbursable expenses in the appendix of our earnings presentation.

Speaker 4: the amount of quarterly reimbursable expenses in the appendix of our earnings presentation.

Although there is diversity and practice across our industry regarding these disclosures, we believe they improve investors visibility into the underlying strength of our business and the leading indicators and revenue trends that continue to drive the expansion of our adjusted EBITDA margins.

Speaker 4: Although there is diversity in practice across our industry regarding these disclosures, we believe they improve investors' visibility into the underlying strength of our business and the leading indicators and revenue trends that continue to drive the expansion of our adjusted EBITDA margins.

Now moving to the details of our financial results. Our total revenue for the fourth quarter of 2021 was $1 $37 billion.

Speaker 4: Our total revenue for the fourth quarter of 2021 was $1.37 billion, up 20.5% and 20.8% in constant currency compared to the fourth quarter of 2020.

Up 25% and 28% in constant currency compared to the fourth quarter of 2020.

Speaker 4: This included continued strong growth with SMID customers across both clinical and commercial, bringing full-year growth for this customer segment to over 30 percent.

This included continued strong growth with smid customers across both clinical and commercial bringing full year growth for this customer segment to over 30%.

Speaker 4: Revenue came in below our expectations due to foreign exchange headwinds, lower reimbursable expenses, and clinical solutions driven by the DCT trends we highlighted earlier, and the faster-than-anticipated wind-down of certain COVID-related projects.

Revenue came in below our expectations due to foreign exchange headwinds.

Lower reimbursable expenses and clinical solutions, driven by the DCT trends, we highlighted earlier and the faster than anticipated wind down of certain COVID-19 related projects.

Speaker 4: However, this also resulted in an improved revenue mix, driving higher than expected adjusted EBITDA models.

However, this also resulted in an improved revenue mix driving higher than expected adjusted EBITDA margin.

Our clinical solutions revenue for the fourth quarter was $1 4 billion up 27% as reported or 21% in constant currency compared to the fourth quarter of 2020.

Speaker 4: Our clinical solutions revenue for the fourth quarter was $1.04 billion, up 20.7 percent as reported, or 21 percent in constant currency compared to the fourth quarter of 2020.

Speaker 4: These increases were driven by growth in our full service portfolio, including the ramp in our large farmer relationships, and strength in our oncology business.

These increases were driven by growth in our full service portfolio, including the ramp in our large pharma relationships and strengthen our oncology business.

Speaker 4: This total growth includes a 1,000 basis point contribution from acquisitions and a 70 basis point tailwind from reimbursable expenses.

This total growth includes a 1000 basis point contribution from acquisitions, and a 70 basis point tailwind from Reimbursable expenses.

Speaker 4: This reflects the recovery of reimbursable expenses compared to 2020, although not to the level we anticipated in our guide.

This reflects the recovery of Reimbursable expenses compared to 2020, although not to the level, we anticipated in our guidance.

Speaker 4: Our fourth quarter commercial solutions revenue was $330.9 million, up 19.8% or 20.2% in constant currency compared to the fourth quarter of 2020.

Our fourth quarter commercial solutions revenue was $330 9 million up 19, 8% or 22% in constant currency compared to the fourth quarter of 2020.

Speaker 4: Growth in commercial revenue is driven by expansion across our core commercial businesses, with particular strength in deployment solutions and consulting.

Growth in commercial revenue was driven by expansion across our core commercial businesses with particular strength in deployment solutions and consulting.

This growth includes a 260 basis point tailwind from Reimbursable expenses, and a 300 basis point headwind from the 2020 divestiture of our medication adherence business.

Speaker 4: This growth includes a 260-basis-point tailwind from reimbursable expenses and a 300-basis-point headwind from the 2020 divestiture of our medication adherence business.

Adjusted EBITDA increased 21, 6% to $237 million, representing an adjusted EBITDA margin of 17, 3% an increase of 20 basis points compared to the fourth quarter of 2020.

Speaker 4: Adjusted EBITDA increased 21.6% to $237 million, representing an adjusted EBITDA margin of 17.3%, an increase of 20 basis points compared to the fourth quarter of 2020.

Speaker 4: The increase in adjusted EBITDA margin for the fourth quarter was primarily the result of the benefits of revenue growth and the cost management initiatives in our Forward Bound Program, partially offset by a higher mix of contract labor and a less favorable revenue mix.

The increase in adjusted EBITDA margin for the fourth quarter was primarily the result of the benefits of revenue growth and cost management initiatives and our four bound program, partially offset by a higher mix of contract labor and a less favorable revenue mix.

Speaker 4: For the full year 2021, Adjusted EBITDA increased 20.8% to $765.3 million.

For the full year 2021, adjusted EBITDA increased 28% to $765 $3 million. This represents 14, 7% adjusted EBITDA margin and year over year expansion of 40 basis points.

Speaker 4: This represents 14.7% adjusted EBITDA margin and year-over-year expansion of 40 basis points.

Speaker 4: In addition, it is important to note that our unadjusted EBITDA grew by 21.9% in 2021.

In addition, it is important to note that our unadjusted EBITDA grew by 21, 9% in 2021 this.

Speaker 4: This was primarily driven by growth in operating income and related margin, given the benefits of robust revenue growth and our forward-bound initiative.

This was primarily driven by growth in operating income and related margin given the benefits of robust revenue growth and our forward bound initiatives.

Speaker 4: We expect this growth trend to continue in 2022 as we maintain our focus on driving cash flow conversion.

We expect this growth trend to continue in 2022, as we maintain our focus on driving cash flow conversion.

Adjusted diluted EPS of $1 48 for the fourth quarter increased by 33, 3% year over year, primarily driven by the increase in adjusted EBITDA and lower interest expense.

Speaker 4: Adjusted diluted EPS of $1.48 for the fourth quarter increased by 33.3% year-over-year, primarily driven by the increase in adjusted EBITDA and lower interest expense.

Speaker 4: This resulted in full year 2021 adjusted diluted EPS of four dollars and 46 cents up 30.8% from 2020.

This resulted in full year 2021, adjusted diluted EPS of $4 46.

Up 38% from 2020.

Speaker 4: Our operations generate a strong operating cash flow of 186 million dollars for the fourth quarter, bringing our 2021 total to a record level of 450.3 million dollars.

Our operations generated strong operating cash flow of $186 million for the fourth quarter, bringing our 2021 total to a record level of $453 million.

Speaker 4: This performance was driven by strong cash, net income, and billing and collections activity, partially offset by deferred payroll tax payments under the CARES Act.

This performance was driven by strong cash net income in billing and collections activity, partially offset by deferred payroll tax payments under the cares Act.

DSO for the quarter declined to 44 days or.

Speaker 4: Our capital expenditures were $26.9 million for the fourth quarter.

Our capital expenditures were $26 9 million for the fourth quarter.

During the fourth quarter, we reduced our outstanding debt by $120 million consistent with our balanced approach to capital deployment.

Speaker 4: During the fourth quarter, we reduced our outstanding debt by $120 million, consistent with our balanced approach to capital deployment.

Speaker 4: This was accomplished through voluntary repayments on our revolving credit facility and our Terminal A, partially offset by the expansion of our lower-cost AR securitization facility.

This was accomplished through voluntary repayments on our revolving credit facility and our term loan a partially offset by the expansion of our lower cost AR securitization facility.

Speaker 4: We ended the quarter with $106.4 million of unrestricted cash and total debt outstanding of $2.84 billion, with net leverage declining to 3.6 times at the lower end of our targeted range for year-end.

We ended the quarter with $106 4 million of unrestricted cash and total debt outstanding of $2 $84 billion.

With net leverage declining to three six times at the lower end of our targeted range for year end.

Our non-GAAP effective tax rate for the fourth quarter was 22, 5% to reflect our lower full year rate of 23, 5% driven by increased growth and earnings outside of the U S.

Speaker 4: Our non-gap effective tax rate for the fourth quarter was 22.5% to reflect our lower full year rate of 23.5% driven by increased growth in earnings outside of the U.S.

Speaker 4: Given the benefit of our NOL deductions, our actual net cash outlay for income taxes in 2021 was approximately $35 million.

Given the benefit of our NOL deductions, our actual net cash outlay for income taxes in 2021 was approximately $35 million.

Turning now to our updated 2022 guidance. This guidance contemplates our current view of the estimated impact of COVID-19 on our business recognizing the factors related to COVID-19 are outside of the Companys control and subject to change.

Speaker 4: This guidance contemplates our current view of the estimated impact of COVID-19 on our business, recognizing that factors related to COVID-19 are outside of the company's control and subject to change.

Speaker 4: We expect our total revenue for 2022 to range from $5.6 billion to $5.75 billion, representing growth of 7.4% to 10.3%, including a foreign exchange headwind of approximately $40 million.

We expect our total revenue for 2022 to range from $5 6 billion.

To $5 75 billion representing.

Representing growth of seven 4% to 10, 3%, including a foreign exchange headwind of approximately $40 million.

Speaker 4: This also reflects the expected revenue headwind in clinical solutions from reimbursable expenses.

This also reflects the expected revenue headwind and clinical solutions from Reimbursable expenses.

Speaker 4: Excluding this headwind, we expect clinical revenue growth in low double-ditches.

Including this headwind, we expect clinical revenue growth and low double digits.

Speaker 4: It also reflects the continued strength in our commercial business for which we expect revenue growth in the low teens.

It also reflects the continued strength in our commercial business for which we expect revenue growth in the low teens.

Total revenue growth also includes a contribution from acquisitions of approximately 100 basis points.

Speaker 4: Total revenue growth also includes a contribution from acquisitions of approximately 100 basis points.

Speaker 4: and an estimated net headwind of 190 basis points from reimbursable expenditures.

And an estimated net headwind of 190 basis points from Reimbursable expenses.

Speaker 4: We expect our total adjusted EBITDA to range from $840 million to $880 million.

We expect our total adjusted EBITDA to range from $840 million to $880 million.

This reflects an adjusted EBITDA margin of 15% to 15, 3% up approximately 45 basis points from 2021.

Speaker 4: This reflects an adjusted EBITDA margin of 15% to 15.3%, up approximately 45 basis points from 2021.

Speaker 4: Lastly, we expect adjusted diluted EPS to range from $4.98 to $5.24 for a year-over-year growth of 11.7% to 17.5%.

Lastly, we expect adjusted diluted EPS to range from $4 98.

To $5 24.

Our year over year growth of 11, 7% to 17, 5%.

Speaker 4: Our guidance incorporates interest expense of $70 to $72 million, a non-GAAP effective tax rate of 23.5 percent, and an estimated diluted share count of 105.7 million shares.

Our guidance incorporates interest expense of $70 million to $72 million, our non-GAAP effective tax rate of 23, 5% and an estimated diluted share count of $105 7 million shares.

Speaker 4: Further, we expect our net cash outlay for income taxes during 2022 to range from $70 to $75 million.

Further we expect our net cash outlay for income taxes during 2022 to range from $70 million to $75 million.

We expect first quarter revenue of $1 315 billion to $1 33 5 billion.

Speaker 4: We expect first quarter revenue of $1.315 billion to $1.335 billion.

Speaker 4: and total adjusted EBITDA of $163 million to $173 million.

And total adjusted EBITDA of $163 million to $173 million.

Speaker 4: This reflects as-reported revenue growth of 8.8 percent to 10.4 percent and adjusted EBITDA growth of 7.9 percent to 14.5 percent compared to the first quarter of 2021.

This reflects as reported revenue growth of eight 8% to 10, 4% and adjusted EBITDA growth of seven 9% to 14, 5% compared to the first quarter of 2021.

Speaker 4: This revenue growth includes an estimated contribution from acquisitions of approximately 90 basis points, an FX headwind of approximately $14 million, and a headwind of approximately 200 basis points due to reimbursable expenses.

This revenue growth includes an estimated contribution from acquisitions of approximately 90 basis points and FX headwind of approximately $14 million and a headwind of approximately 200 basis points due to reimbursable expenses.

Speaker 4: This reflects modest pressure related to the impact of the Omicron variant on staff and site productivity, along with normal seasonality.

This reflects modest pressure related to the impact of the omicron variant on staff and site productivity along with normal seasonality.

Speaker 4: We expect the quarterly pacing of 2022 to be similar to that of 2021, as the impacts of Omicron subside, and we see an accelerating ramp in our clinical large pharma partnerships, as well as Sineus One product launches in commercial.

We expect the quarterly pacing of 2022 to be similar to that of 2021 as the impact of omicron subside and we see an accelerating ramp in our clinical large pharma partnerships as well as sending us one product launches and commercial.

Speaker 4: This completes our prepared remarks and we would be happy to answer any questions.

This completes our prepared remarks, and we would be happy to answer any questions operator.

Thank you to ask a question you will need to press star one on your telephone to withdraw your question press the pound key our first question comes from.

Speaker 1: Thank you. To ask a question, you'll need to press star 1 on your telephone. To withdraw your question, press the pound key. Our first question comes from Eric Coldwell with Baird. Your line is open.

Eric Coldwell with Baird. Your line is open.

Thank you good morning, not sure, which CRO optical headwind, we're supposed to focus on today. So.

Speaker 9: Thank you. Good morning. Not sure which CRO optical headwind we're supposed to focus on today, so I'm sure there will be a lot of Q&A on the pass-through situation, but I want to focus on the prior industry concern, which is small biotech exposure. In a nutshell, you guys report SMID clients at about half of your total revenue. I was curious if you could give us

I'm sure there will be a lot of Q&A on the pass through situation, but.

I wanted to I wanted to focus on the prayer cash.

Industry concern.

Which is.

Small biotech exposure.

In a nutshell you guys report smid clients at about half of your total revenue I was curious if you could give us more detail on the client mix within the company, maybe even by division, but in total have you taken a look at truly small biotech.

Speaker 9: more detail on the client mix within the company, maybe even by division, but

Speaker 9: In total, have you taken a look at truly small biotech, you know, even if it's pre-commercial accounts?

Even if its pre pre commercial accounts and what that might represent as a percent of your total revenue mix.

Speaker 9: And what that might represent is a percent of your total revenue, mix, bookings, backlog, whatever. We'd love to get some details on that. Yeah. Well, good morning, Eric.

Bookings and backlog whatever we'd love to get some details on that.

Yes, good morning, Eric.

Good morning.

Speaker 3: We'll unpack some of that as we go through it. But yeah, we have looked at that, obviously. I think with the earnings comments earlier in the week, we've taken a good walk through all of that element, expecting questions on that today. So, you know, we've been very strong in this mid, and I'll start from kind of where the environment is.

Well impacts from that as we go through it but yes, we have looked to that obviously I think with.

With.

Earnings comment so we've taken a good walk through all of the element I expect some questions on that today. So we've been very strong in the smid.

And I'll start from kind of where the environment sets.

Speaker 3: You know, we see great strength in the SMID at the moment. We've seen that across both kind of ends of the SMID as well. The emerging biotech, as well as the more mature, larger customers in the SMID that we've kind of do the majority of work, the majority of our work in.

We see great strength in the estimate at the moment.

We've seen that across both kind of ends of the Smith as well the emerging biotech as well as the more mature logic of service in the estimate that we've kind of do the majority of work the majority of our work in.

Speaker 3: I think across the company, when we look at where we sit with that, we're sub-15% on what we would, I think what you would call pre-revenue, Smith.

Across the company when we look at where we sit with that with sub 15% on what we would roughly what you would call pre revenue.

Smith, but that for US includes people who have.

Speaker 3: But that for us includes people who have, you know, incredibly strong funding through funding partners, you know, private equity houses that appoint money through clinical development, etc. So we look at that, see very healthy trends.

Credibly strong funding through funding partners private equity houses that are putting money through clinical development et cetera. So we look at that see very healthy trends.

Speaker 3: It's the good solid RFP flow and I think the tool set that we take to that market, you know the go-to-market approach we have for that, the kind of transactional go-out-win standard project that we do through kind of a Sinterac model as well as the old Cineos kind of SMID model.

See good solid RFP flow and I think the toolset that we take to that market. The go to market approach we have for that.

Kind of transactional let's go out win Standalone project that we do through kind of a <unk> model as well as the Sydney ice Smid model you've.

Speaker 3: You've got that but also it's very attractive to Cineoswap because they don't bring the infrastructure. They want to keep it light.

<unk> got that but also it's very attractive scenario as well because they don't bring the infrastructure they want to keep it light.

Speaker 3: They can use it for clinical development, medical affairs, for commercial. So I think we have a very attractive proposition to that sector in the market, both here domestically in the U.S.

You can use it to clinical development medical affairs for commercial so I think we have a very attractive proposition to that sector in the market. Both here domestically in the U S as well as internationally and a lot of that work that come through when we look at our pipelines its diverse not just by market sector.

Speaker 3: as well as internationally. And a lot of our work that comes through when we look at our pipelines is diverse, not just by market sector, but also by jurisdiction. So we're seeing a lot of work that we're winning in Asia-Pac, Europe , you know, where we've always been strong and the US. So we see a healthy environment. We don't see

Also by jurisdiction. So we're seeing a lot of work we are winning in Asia Pac Europe , where we've always been strong and the U S. So we see a healthy environment, we don't see it.

Speaker 3: you know, problems in that sector. And you know, when we look at where we were last year, we're actually well positioned against where we were at this time last year, which was very strong as well.

Problems in that sector.

Okay.

We look at where we were last year, we're actually well positioned against where we were at this time last year, which was very strong as well so I.

Speaker 3: So, you know, I hear the concerns around funding, we're not seeing that.

I hear the concerns around funding, we're not seeing that.

Speaker 3: We're seeing good, strong, healthy pipelines, good engagement with those customers, cash on the balance sheets for them, a well-funded environment.

We're seeing good strong healthy pot lines, good engagement with those customers cash on the balance sheets that for them.

Well funded environment.

Speaker 9: I was sure that's a great response. I think your pre-commercial mix is probably a lot less than people feared or thought. Ironic to say fear when that has been a big growth driver in the past, but any chance you could break that out between clinical and commercial and then just any, you've made.

Alastair.

Great response, I think your pre commercial mix is probably a lot less than people feared or thought.

Ironic to say fear when that was and has been a big growth driver in the past but.

Any chance you could break that out between clinical and commercial and then just any you've made some.

Speaker 9: qualitative comments on what sounds like a strong environment, no change in demand, but any update on what you're seeing for pipeline overall volumes, values, any additional commentary? Yeah, well, I'll give you, I'll start you on the value, the volume of the pipeline, the values of the pipeline. They're very strong. I mean, I think when you look back at where we were Q1 last year, you had a lot of the COVID catch up in that.

Qualitative comments on what sounds like a strong environment no change in demand, but any.

Any update on what Youre seeing for high pipeline overall volumes values any additional commentary.

Yes, well I'll give you I'll start you on the volume the volume of the pipeline is always in the pipeline they are very strong.

When you look back to where we were Q1 last year you had a lot of the COVID-19 catch up in that.

Speaker 3: kind of time period, so there were record levels. We're not far off that. You know, it's a healthy environment across the space, SMID, large and small SMID, and in the large pharma. We see, you know, we have a go-to-market philosophy that attacks all parts of that market, like our big competitors. And, you know, we see a strong, healthy environment. We see...

Kind of time.

Time period, so there were record levels, we're not far off of that.

It's a healthy environment across the space smid large on small slate and in the large pharma and we see.

We have a go to market philosophy that the attacks all parts of our market cap at competitors and we see a strong healthy environment, we see.

Speaker 3: A lot of compounds going through, well probably record levels of compounds going through development, devices, et cetera, biologics.

A lot of compounds, probably record levels of compounds going through development devices et cetera biologics.

We don't see a problem.

Speaker 3: So, you know, Jason, I think you've got thoughts on the split of the pre-revenue. Yeah. I mean, Eric, if you remember back during 2020, we...

So Jason on your thoughts on the on the split of the.

The pre revenue, yes, I mean, Eric if you remember back during 2020, we for a different reason, we were looking at liquidity and being able to pay on time, but we were providing metrics around pre revenue biotech by segment.

Speaker 4: For a different reason, we were looking at liquidity and being able to pay on time, but we were providing metrics around pre-revenue biotech by segment.

Speaker 4: In 2020, we continuously said pre-revenue biotech in commercial is less than 5% and in clinical is less than 10%.

In 2020, we continuously said you know pre revenue biotech and commercial is less than 5% and clinical is less than 10%.

Speaker 4: Fast forward now, and obviously we acquired Center Act, and that's been a strong market. Those numbers have ticked up a bit, but commercial is still well below 5% in clinicals.

Fast forward now and obviously, we acquired Center Act and that's been a strong market those numbers have ticked up a bit but commercial is still well below 5% and clinical's.

Speaker 4: going to be below 15% or right at 15% as well. So, that's how you get to the math of overall, and just the data point from 2020 when we were talking about this as well.

To be below 15% or right at 15% as well so that's how you get to the <unk>.

The math of overall and just a data point from 2020, when we were talking about this as well.

Speaker 7: Thanks very much. I'll let others handle the backlog adjustment. Thank you, guys.

Thanks, very much I'll, let I'll, let others handle the.

Backlog adjustments. Thank you guys.

Alright.

Speaker 1: Thank you. Our next question comes from David Windley with Jeffries. Your line is open.

Thank you. Our next question comes from David Windley with Jefferies. Your line is open.

Speaker 5: Hi, good morning, thank you. Picking up on Eric's question, could you elaborate, Alistair, on...

Hi, Good morning, Thank you pick it up on Erik's question could could you elaborate alastair on.

Speaker 5: the year-over-year part of your response where, you know, you commented on last year had a lot of COVID catch-up in it, and so it sounds like you're down a little bit from that level, but you still view that as strong. Maybe help us a little bit more to understand.

The year over year part of your response, where you commented on last year had a lot of COVID-19 catch up for that and so it sounds like youre down a little bit from that level, but you still view that as strong maybe help us a little bit more to understand.

Speaker 5: why you know not above last year is still ok

Why not above last year is still okay.

Speaker 3: Well, I think you've got to look at the trends over the last two or three years.

Well I think you've got to look you've got to look at the trends over the last two years or three years.

Speaker 3: and you've got a big, when COVID.

And you've got a big when when Covid started to go away.

Speaker 3: start to go away. You know, we know, right, if you go back into the middle of the COVID pandemic in kind of the middle of 2020, people put programs on hold. Larger pharma put programs on hold. Smith's kind of carried on because time isn't really money for them, so we didn't see much of a difference in kind of that Smith pacing, but we did in large pharma. Then as you came out of the pandemic, kind of Q4 of 20.

Right. If you go back into the middle of the Covid pandemic and kind of the middle of 2020 people programs on hold.

<unk> program is on hold.

Smith's kind of carried on because time is really money for them and so we didn't see much of a difference in kind of that smid pacing, but we did in large pharma Ben as you came out of the pandemic kind of Q4 'twenty Q1 in 'twenty. One you saw those programs coming back through the through the pipes.

Speaker 3: Q1 and 21, you saw those programs coming back through the pipes, right, to get into the market and caught up.

To get into the market in coal.

Speaker 3: So you don't have that catch-up, so to speak, as we go into 2022.

So you don't have that catch up so to speak as we go into 2022.

Speaker 3: But when you look at where we were in 2020 at this time,

But when you look at where we were in 2020 at this time just.

Speaker 3: um before we went into the pandemic and the quarters beyond that we are seeing great pipelines you know across all sectors large pharma larger smid emerging smid biotech whatever you want to call them um so we don't see an issue with that you know we expected that peak of catch-up to be the peak and it and it was the kind of record

Before we went into the pandemic and the quarters beyond that.

We are seeing great pipelines.

Across all sectors large pharma largest smith emerging smid biotech whatever you want to call them.

So we don't see an issue with that we expect to that peak of casual to be the peak.

Was that kind of record.

Speaker 3: But when I say we're not far off that, I mean we're not far off that at all. So we have strong pipes, strong throughput of RFPs.

But when I say, we're not far off I mean, we're not far off that at all so we have shrunk pipes.

Strong throughput of Rfps.

Speaker 3: and uh... you know we don't the it was a big concern i mean i think we were surprised some of the commentary earlier in the week that anybody

We don't see it as a big concern I mean, I think we were surprised with some of the commentary earlier in the week Theres anybody so.

Speaker 5: Got it, got it. Okay, appreciate the additional color there. So pivoting then, the first thing I want to ask, just to confirm, the guidance that you're giving today, and particularly on the revenue line, is that consistent? Is that basically exactly on top of what you told us to expect in early

Got it got it okay I appreciate the additional color there. So pivoting then.

The first first thing I wanted to ask just to confirm the guidance that youre, giving today.

And particularly on the revenue line.

Is that consistent is that basically exactly on top of what you told us to expect.

And early.

Early January at Tyco's Congress.

Speaker 4: Yes, yes, Dave. I mean, there's been a little bit of change in terms of the FX headwind, but yeah, that's exactly, you know, as we said then, because we obviously had line of sight to what, you know, was going on in the pipe, in the backlog build, in the phasing, and also in, and, you know, the reimbursable expense flow.

Yes, yes.

Theres been a little bit of change in terms of the FX headwind.

But yes.

Yes. This is exactly as we said then we obviously had line of sight to what.

What's going on in the pipe and the backlog build and the phasing and also in <unk>.

The reimbursable expense floating.

Speaker 5: So to say it differently, the significant adjustment to backlog that we're seeing today is really not incremental information or incremental action to you relative to your expectations for 22.

And then just say it differently the significant adjustment to.

Backlog that we're seeing today is really not incremental information or incremental action to you relative to your expectations for 'twenty two.

Speaker 4: Correct. That's correct. I mean, if you know, if you look at the trends that we've seen, Dave, if you just take clinical reimbursable expenses, and you go back pre COVID, right, we were as a percentage of our direct fee revenue, our net service revenue, right, we were in a 50-55% range.

Correct, that's correct I mean, yes.

If you look at the trends that we've seen David can you just take critical Reimbursable expenses and you go back pre Covid right. We were as a percentage of our direct fee revenue. Our net service revenue right. We were in a 50% 55% range.

Speaker 4: COVID hit, you go down into low 40s.

It hit you go down into the low forty's per quarter.

Speaker 4: per quarter. And then, you know, we came out of that and we sort of saw it in the mid to high 40 range. And then you dump a vaccine on top of it. And that kind of shields what's happening in 2021 on the reimbursable. So we knew the underlying portfolio was in that mid to high 40%. And that's what we're that's what we're looking at as we go forward. And the adjustment reflects.

And then we came out of that and we sort of solid in the mid to high 40% range.

And then you dump a vaccine on top of it and that kind of shields, what's happening in 2021 on the Reimbursable. So we knew the underlying portfolio was in that mid to high 40% and that's what we're that's what we're looking at as we go forward and the adjustment reflects.

Speaker 5: OK, and then I guess finally, in terms of.

Okay.

And then I guess finally in terms of.

Speaker 5: the the nuance i think this is the second time that you've made an adjustment to the backlog relative to your reimbursement uh... estimate

The nuance I think this is the second time that you have made an adjustment to the backlog relative to your reimbursement.

Estimates.

Speaker 5: You kind of answered where you're triangulating to. Do you think that your go-to-market strategy and your execution strategy is different than your peers as it relates to remote and DCT that would be influencing how much reimbursement load you have that might be different than your peers?

On.

You kind of answered where youre triangulating to do you think.

That your go to market strategy and your execution strategy is different than your peers as it relates to remote and DCT that would be influencing how much reimbursement load you have that that might be different than your peers.

Speaker 3: Yeah, I think there's two factors to that actually, Dave. I think we do have, you know, we've bought some things in-house that are instrumental or fundamental in delivering DCT properly. So the kick, pilling with etc. And that kind of converts revenue that would have been 606 pass-throughs to actually 605 direct. So that's good for us and we're driving profitability off of that.

Yes, I think there's two factors that actually David we do have we bought some things in house that were instrumental fundamental and delivering DCT properly. So the cake illingworth etcetera in that county converse.

Revenue that would have been six six pass throughs to actually takes out five direct so that's good for us and we're driving profitability off of that.

Speaker 3: The other factor, I think, is we were probably behind the eight ball in terms of overall DCT provision when we went into the pandemic. So I think we started from a lower level.

The other factor I think is we would probably be behind the April in terms of overall DCT provision when we went into the pandemic. So I think we started from a lower level.

Speaker 3: I know I've caught up and I'm probably one of the leaders now in that delivery.

Of course open up probably one of the leaders now in that delivery.

Speaker 3: And so some of this adjustment is taking that, it kind of bridges some of that gap where we started from an inferior position, have moved faster, caught up, overtaken, but it reflects higher in our reimbursables because it shifts the model more.

So some of this adjustment is taking back.

Rick just some of that gap, where we started from.

An inferior position have moved faster.

So <unk> taken and but it reflects higher.

<unk> because it shifts the multiple.

Speaker 5: Okay. All right. That's helpful. I'll leave it at that. Thank you. Okay. Cheers, Mike.

Okay, Alright, that's helpful I'll leave it at that thank you.

Okay.

Yes.

Speaker 1: Thank you. Our next question comes from Tycho Peterson with J.P. Morgan. Your line is open.

Thank you. Our next question comes from Tycho Peterson with Jpmorgan. Your line is open.

Speaker 11: Hey, good morning. Maybe just following up on that theme, Alistair, can you just talk a little bit about, you know, on decentralization and where, you know, you think we are today and where you think we're headed here in the near term in terms of kind of percentage of trials?

Hey, good morning, maybe just following up on that theme Alistair can you just talk a little bit about decentralization, then where you think we are today and where we're headed.

Here in the near term in terms of kind of percentage of trials.

Yes, good morning Tycho.

Speaker 3: Yeah, morning, Tycho. Yeah, we, I think about...

Yes, we I think about it.

Speaker 3: probably half of our trials have some form of decentralization on them now, either heavily or partial elements and that's a big uptick from where we used to be.

Probably half of our trials have some form of decentralization on it on them now either heavily or partial evidence.

That's a big uptick from where we used to be.

I think people are.

Speaker 3: We're kind of in an evaluation phase, I think, across the industry where people are thinking about what their delivery platform will look like for their trials as they bring them into the market. You know, what they're comfortable with in terms of decentralization. As it's kind of become easier to do, people are thinking about it more. We certainly get a lot more questions about what kind of operational footprint would we put together for a trial. We have a DCT wizard that we can pump information in and it kind of,

We're kind of in an evaluation phase I think across the industry, where people are thinking about what their delivery platform will look like for their trials with agreements in the market.

They are comfortable with in terms of decentralization as it's kind of become easier to do people are thinking about it more we get certainly got a lot more questions about what kind of operational footprint would be put together for a trial. We have a decentralized we have a DCT was it that we can pull in information and then it kind of.

Speaker 3: Pops out the the most kind of ideal operational setup the most implementable, you know most pragmatic kind of setup

Pops out.

The most kind of ideal operational setup, most implementable, most pragmatic kind of setup.

Speaker 3: So I think it's here to stay, you know, we certainly believe that. I think it drives better execution, it certainly opens up the trials to more potential participants which should then drive...

So I think it's here to stay we certainly believe that I think it drives better execution. It certainly opens up the trials to more potential participants which should drive.

Speaker 3: better enrolment, better engagement, etc, more diversity, more inclusive, more diversity as well. So I think they're all very good things.

Better enrollment better engagement et cetera, more diversity include more inclusive more diversity as well. So I think they are all very good things.

Speaker 3: And I think we're long overdue for modernization of clinical trials in terms of technology and being able to engage with patients and sites more remotely, so I think it's a very good thing. I think it's here to stay.

I think we are long overdue for modernization of clinical trials in terms of technology and being able to engage with patients and sites more remotely. So I think is a very good thing I think is here to stay.

Speaker 3: you know, where it goes from here, I think it will be a, I don't think it will be a sudden overnight. Everything is fully decentralized. I think it will be a slow progress now. But certainly that first big step has been made right across the sector, regulators, customers, as patients, et cetera, people are keen to try it and less kind of suspicious about it on the regs.

Where it goes from here I think it will be I don't know.

It will be a sudden overnight everything is fully decentralized with youll be a slow progress now, but certainly that first big step has been made right across the sector regulators customers as patients et cetera people.

Keith.

Try it in.

Less kind of suspicious about it on the regulatory side.

Speaker 11: And then, how should we think about the adjustments, you know, you're doing today in terms of the long range, you know, guidance you gave at the December annual state, you know, 10% top line and 11 to 14% EBITDA growth through 23.

And then how should we think about the adjustments you're doing today in terms of the guidance you gave at the December analyst day.

Understand topline and 11, 40% EBITDA growth through 'twenty three.

Speaker 3: Sorry, Tycho, we missed the start of the question. The guidance from your December 20th annual state, you know, you had given guidance through 23. How do we think about the adjustments you're making today in context of that prior longer-term guidance?

Oh, sorry, Taco we missed the question.

The guidance from your December 20th Analyst Day, you had given guidance to 23, how do we think about the job that youre, making today in context of that net prior and longer term guidance.

Speaker 4: Yeah, I mean, if you look at 2022, obviously we're at the upper end of that range despite this reimbursable headwind.

Yes, I mean, if you look at Hey, Tycho if you if you look at 2022, obviously, where we're at.

Upper end of that range. Despite this reimbursable headwind.

Speaker 4: that we're talking about and that is now flowing through the numbers. When you look overall at the position of the company, and as Alistair mentioned, we had.

That we're talking about and that is now flowing through the numbers. When you look overall at the position of the company and as Alastair mentioned right we had.

Speaker 4: In clinical, we have very strong pipelines, we have a very robust in-market, that's right across all customer cohorts. We have 15 plus percent backlog growth excluding reimbursables in clinical, 20 plus percent in deployment.

And clinical we have very strong pipelines, we have a very robust end market.

Thats right across our customer cohorts, we have 15 plus percent backlog growth, excluding reimbursable and clinical 20 plus percent.

And deployment solutions book to bills are one three for TTM and one for TTM.

Speaker 4: Book-to-bills are 134 TTM and 114 TTM.

Speaker 4: in both businesses, so we feel very well positioned to continue our journey on that 7 to 10% through 2023. Yeah, let me add something to that as well.

And both businesses so we feel.

Very well positioned to continue our journey on that 7% to 10% through 2023.

Yes, let me add something to that so I'll talk.

Speaker 3: If you think about the 605 world, we used to shoot for a 1.2 book to bill and we were all happy with that. We're at 1.34.

If you think about 605 world we used to shoot for a one two book to Bill and we were all happy with that we're at 134.

Speaker 3: We're very happy with that, it's driving strong growth. You know, the reimbursable adjustment, it's zero calorie revenue. And you know, that's spread across the whole of our backlog that goes out, what, five, six years. So, you know, it'll paste in over time, you'll see that difference in the reimbursables over time.

We're very happy with that is driving strong growth the reimbursable adjustment zero calorie revenue.

And that's spread across the whole of our backlog that goes out five six years. So.

It's pacing.

Pacing over time Youll see that difference in the Reimbursable is over time.

Speaker 3: But the backlog, the books of bills that we're driving across both sectors are super healthy compared to where we need them to be to drive that revenue growth and that EBITDA growth. So we're very comfortable with that.

But that's.

The backlog book to bills that we're driving across both sexes super healthy compared to where we need them to be to drive that revenue growth and that EBITDA growth. So we're very comfortable with that.

Speaker 3: We've made this adjustment. We've given you more visibility into the reimbursables, the pasting of those over the last two years in the materials that we've posted.

We made this adjustment we are giving you more visibility to the reimbursable about pacing of those over the last two years in the materials that we posted so gives you better visibility as to how we handle that you're seeing there the variability in pass throughs and wider so tricky to kind of manage through and handle so.

Speaker 3: gives you better visibility into how we handle it. You see in there the variability in pass-throughs and why they're so tricky to kind of manage through and handle, so.

Speaker 3: Hopefully, you guys see that as we move forward, that the underlying business, that real kind of revenue and EBITDA generating work that we do is on a very healthy, you know, alternative

Hopefully you guys see that as we as we move forward.

The underlying business.

<unk> kind of revenue and EBIT dollar generating whether we do so at a very healthy.

Oprah swing.

Speaker 11: Great. You know, just lastly, you are guiding the 45 bits of EBITDA market expansion this year in a wage inflationary environment and, you know, that's been the other topic of yours. So can you maybe just comment on some of the levers, you know, you're pulling to get that expansion this year?

Great.

Just lastly, you are guiding to 45 bps of EBITDA margin expansion this year and our wage inflationary environment. That's been you haven't topic.

Maybe just comment on some of the levers you're pulling to get that expansion this year.

Speaker 3: Yeah, I mean, we continue with the forward-bound program that we've had. That's been really productive, very good for us in terms of handling increases in the cost base.

Yes, I mean, we continue with a full rebound.

Program that we've had that's been really productive.

Very good.

Good for us in terms of hand labor increases in the cost base.

Speaker 3: You know, we have a big portion of our revenue comes through FSP and deployment solutions, etc. So that's a cost-plus model. So it adjusts as it goes through. We're able to sit down with customers.

We have a big portion of our revenue comes through FSP in deployment solutions et cetera. So that's a cost plus model. So it adjusts as it goes through we're able to sit down with customers.

Speaker 3: and have a sensible conversation about, you know, the rate adjustments, etc. As we go through the year, we visit that a couple of times a year. We've been working on that since, well, since we started to see this at the start of 2021.

And have a sensible conversation about.

Adjustments etcetera as we go through the year, we visit that couple of times, a year and we've been working on that since well since we started to see this at the start of 2021.

Speaker 3: We're an attractive employer, we're on the Forbes list, we're on the Fortune list, we've been noted for our approach to D&I.

We are an attractive employer on the Forbes list around the Fortune list were been noted for our approach the.

Speaker 3: We're a good place to work, we have a good culture, people want to come here. We hired 3,300 people net into clinical last year alone, plus commercial on top of that.

We're in a good place to work we are a good culture people wants comparably high of 3300 people.

Net into political last year alone plus commercial on top of that.

Speaker 3: You know, we've got powerful recruitment and reasons for people to want to be at Cineos Health in terms of the culture we provide, the benefits, et cetera, et cetera. So we're handling it. It is a tough environment, but it's steady. You know, it's not swinging up and down. It's just steady. The level of turnover in our business and everybody else's, not just our sector, but you know, it seems to be across the...

We've got powerful recruitment and reasons for people to want to be financed.

In terms of the culture, we provide the benefits et cetera et cetera.

So we are handling tough environment, but it's steady.

<unk> opened down its just steady level of turnover in our business and everybody else's not just not a factor, but it seems to be across the the.

Speaker 3: The rest of the world is higher, and we've adjusted to it. Our talent recruitment engines are in place. We bring people straight out of college into great careers, and they do well. So we're, I think, very well equipped to handle it. Great. Thank you very much.

The rest of World is higher and we've adjusted our cone recruitment engines are in place, we bring people strategy college into great careers and they do well.

Very well equipped to handle it.

Great. Thank you very much.

Yes.

Yeah.

Thank you. Our next question comes from John Kreger with William Blair. Your line is open.

Speaker 1: Thank you. Our next question comes from John Krieger with William Blair. Your line is open.

Speaker 6: Hey, thanks very much. I had two kind of follow-ups, again, relating to this sort of pass-through, Alistair. So I guess the first, and this one might be more for Jason, since it seems like this sort of shift in the business is picked up a layer, is accelerating.

Hey, Thanks, very much I had two kind of follow ups again relating to the sort of pass through Alastair. So I guess, the first and this one might be more for Jason.

It seems like this sort of shift in the business has picked up of late Eric is accelerating as you think about how this filters through the P&L as you move through 'twenty two and.

Speaker 6: as you think about how this filters through the P&L as you move through 22 and beyond, does the impact kind of get larger in the second half of 22 versus the first half, and should we assume the impact is maybe larger in 23 relative to 22? If you could just speak to that.

And beyond does the impact kind of get large here.

In the second half of 'twenty two versus the first half and should we assume the impact is maybe larger in 'twenty three relative to 'twenty. Two if you could just speak to that.

Speaker 6: And then the other question is from an operational standpoint, what does this mean to you? And is it really only clinical, is it commercial, does this change the way you think about sort of staffing or really building the operations of the business? Thanks.

And then the other question is from an operational standpoint, what does this mean to you and is it really only clinical is a commercial does this change the way you think about sort of staffing are really building the operations of the business.

Speaker 4: Yeah, hey, John , when you look at the sort of sequencing of the reimbursables next year in the clinical side.

Yeah, Hey, John when you look at the sort of sequencing the reimbursable.

Next year on the clinical side.

Speaker 4: You know, you're going to see the most pressure, you know, in the probably in the second and third quarters of the year relative, you know, to 2021.

Youre going to see.

The most pressure.

Probably in the second and third quarters of the year relative to 2021.

Speaker 4: Just because we did have we still had some pressure in quarter one of last year at the most pressure from up from the pure Pandemic impact right so lowest travel and all that but

Just because we did have we still have some pressure in quarter one of last year. The most pressure from a from a pure pandemic impact right. So the lowest travel and all of that.

But.

Speaker 4: by and large, you know, you're going to be, you know, flattished down a little bit in the first three quarters, and then we'll start to get back to a little bit of growth, I would imagine, on the reimbursables in quarter four. By the time we work through all that into 2023, and some of this depends on what happens with COVID vaccine-type work, right, because that type of work does continue.

By and large you're going to be flattish to down a little bit.

The first three quarters, and then we will start to get back to a little bit of growth I would imagine on the reimbursable in quarter four.

By the time, we worked through all of that into 2023 and some of this depends on what happens with Covid vaccine type work right because that type work does continue.

Speaker 4: But we expect it to sort of trend out and flatten out and just be consistent. But we'll have to continue to monitor it, but that's how we think about 2023.

But we expect it to sort of trend out and flatten out and just be consistent but we'll have to continue to monitor it but thats, how we think about 2023.

And what was the second part of the question John operational so it sounds like you are communicating that this is a relatively significant change in the business and a durable change does that impact. The way you think about where you want to add staff what sort of staff you are adding.

Speaker 4: And what was the second part of the question, John ? Operational. So it sounds like you're communicating that this is a relatively significant change in the business and a durable change. Does that impact the way you think about where you want to add staff, what sort of staff you're adding? I guess I'm going to go for different things. An accounting shift and really running the business.

I guess.

Yes.

The accounting shift and.

Turning the business yes.

Speaker 3: Yeah, it does. I mean, fundamentally, as trial designs change and trial execution changes more technically, more digitally, more remotely, you do need different skill sets. I think we've been bringing them in, training people in them, there's more vendor management, there's more kind of, you know, dealing with more.

Yes.

Yes, it does I mean fundamentally as trial designs change in trial execution changes more technically more digitally more remotely you do need different skill sets and I think we've been bringing them in training people in them as more vendor management is more kind of.

Dealing with more.

Speaker 3: know aspects of the trial because it's not just one model. I mean when I think about trials, kind of trials of the future.

Aspects of the trial, because it's not just one model I mean, when I think about the trials kind of trials of the future.

Speaker 3: You know what we've seen in the past, you've found a bunch of investigators and you, they went out and found your patients and you kind of had one modeling in each trial. What I think we'll see as we now move into the future is you'll have that piece, you know there are jurisdictions where that will always probably remain, so therapies where that will remain but then you'll have an arm in the trial or a piece of your trial will come through a DCT channel and a piece of your trial might come through community sites, something like Aligo or you know a delivery model like that.

What we've seen in the past.

You can find a bunch of investigators and you maybe went to 500 patients in your contract. We're modeling in each trial I think we will see as we now move into the future as Youll have that piece there are jurisdictions without always probably remain.

So therapies without will remain but then you'll have an arm in the trial or PCB trial will come through a DCT channel and a piece of your trial might come through community size something like <unk>.

Our deliberate model like that.

Speaker 3: So you're gonna have to have project managers who can handle those different streams. You're gonna have to have clinical staff who can work in a stream. We deploy the Illingworth Home Health folks. So we've already changed that model by buying some of that in-house.

So youre going to have to have project managers, who can handle those different streams youre going to have to have clinical staff, who can work in a stream.

We deploy the Elizabeth home health folks so we've already changed our model by buying some of that in house.

Speaker 3: to deliver, you know, before we just dispatched.

To deliver before we just dispatched.

Speaker 3: You know, we plugged somebody in from Illingworth when they weren't part of Cineos, and away they went. Now we own that organisation, we cross-train them, you know, we're deploying them in the

We put somebody in for milling with when they werent part of Sandy.

And the way that way and now we own that organization, we cross train them.

Pulling them from.

Speaker 3: from within the company. So yeah, it does change the nature. It doesn't change it overnight. It's an evolution, not a revolution in that sense, but it does change the way that you think about people bringing in things like RxDS, RxData solutions.

From within the company. So yes, it does change the nature it doesn't change overnight.

Evolution not revolution in that sense, but it does change the way that you think about people, bringing in things like Rx Gx Rx data solutions.

Speaker 3: you know, how do we look for patients differently? How do we design things that are more productive, et cetera, et cetera? So it becomes a more complicated market, but you know, we're already on that transition.

How do we look for patients differently, how do we design things that are more productive et cetera et cetera.

It becomes more complicated market, but.

Already on that transition.

Great. Thank you.

Thanks, John .

Speaker 1: Thank you. Our next question comes from Patrick Donnelly with Citi. Your line is open.

Thank you. Our next question comes from Patrick Donnelly with Citi. Your line is open.

Speaker 7: Hey, thanks for taking the questions. I guess on the remote monitoring and decentralized trials, I mean, it certainly sounds like those are here to stay. Obviously, Alastair, you talked a little bit about the percentage that they are making up. I guess, how does that change in terms of the structure of some of those orders, even on the margin side, financially? I'm just wondering how that changes, you know, relative to the orders of old versus this. You know, if you can give us any metrics around it, it would be helpful.

Hey, thanks for taking the questions.

<unk>.

On the remote monitoring and decentralized trials I mean, it certainly sounds like those are here to stay obviously, Alex can you talk a little bit about the percentage that they are making up I guess, how does that change in terms of the structure of some of those orders even on the margin side financially I'm, just wondering how that changes relative to the orders of old versus new.

If you can give us any metrics around it would be helpful.

Speaker 3: Yeah, I'm not sure I have any metrics to handle that, but when I look at where we're at on those decentralized trials or those elements of it, I don't see any real difference in margin. Actually, I see a little bit of an improvement in the margin.

Yes, Im not sure I have any metrics to handle that but when I look at where we're at on those decentralized trials. So there's elements of it I don't see any real difference in laundry I'd say, a little bit of an improvement in the margin yes.

Speaker 4: Yeah, I mean, you know, Patrick, we've talked about, you know, over time, and maybe, and Michael Brooks is here with us, he can comment as well, but reimbursable expenses obviously come down, right? So that is a margin help, and that's what we saw in quarter four. That's what, you know, that certainly is a part of our margin story in 2022 as well with these reimbursables coming down in clinical. I do think it shifts some of the...

Yes.

Patrick we've talked about.

<unk> in Navy and Michael brokers here with us he can comment as well but.

Reimbursable expenses, obviously come down right. So that is a margin help and thats. What we saw in quarter. Four that's what that certainly is a part of our margin story in 2022 as well with these reimbursable is coming down and clinical I do think it shifts.

Some of the on.

Speaker 4: On the lower end of the margin side of the traditional clinical trial around monitoring and perhaps moves a little bit more into.

On the lower end of the margin side of the of the traditional clinical trial around monitoring and perhaps moves a little bit more into <unk>.

Speaker 4: higher margin data capture, data management, services that we provide to enable that, home health probably a little bit better than the traditional monitoring, et cetera. So I do think there's some benefit on the direct fee side, the net service revenue as well, but more to learn there. I don't know, Michael, if you want to comment, but... Yeah. When I look at the service fee revenue side...

Higher margin data capture data management services that we provide to enable that home health is probably a little bit better than the traditional monitoring et cetera. So I do think there's some benefit on the direct fee side. The net service revenue as well, but more to learn there I don't know Michael if you want to comment, but yes, when I look at <unk>.

The revenue side, we are seeing the dollars of these shifts into different types of solutions.

Speaker 8: We are seeing the dollars are being shifted into different types of solutions. So if you're a data scientist from.

Data science is remote monitoring our medical lead things like that there are some benefits to our customers that we are able to return to them, but the margins as I think we will be higher over time, particularly as automation comes into play more so.

Speaker 8: our medical needs, things like that. There are some benefits to our customers that we're able to return to them, but the margin of those I think will be higher over time, particularly if automation comes into play and more sophisticated tools that we're deploying into those.

Just to get it tools that we're deploying into the <unk>.

Speaker 8: We have some really good examples when we've been able to work with our clients over the last two years to help shape their clinical trials using that product development mindset that brought real good value to them, but also gave us benefits at the exact same time. And I agree with Jason, I think on the indirect side, our customers are going to see a lot of benefit from that as well.

This trial, we have some really good example, when we can also work with our clients over the last year has helped shape.

The trial is using that product development mindset.

Real good value to them, but also gave us.

Exact same time.

I think on the indirect side, our customers are going to see a lot of it.

Matt.

Speaker 7: That's helpful. And then, Alastair, maybe just to circle back on the biotech funding. Apologize, but obviously a lot of focus there. I mean, it sounds like, you know, you're pretty confident on the durability of cash and the balance sheet.

That's helpful and then Alastair maybe just to circle back on the biotech funding.

Jazz, but obviously a lot of focus there I mean, it sounds like you are pretty confident on the durability of cash on the balance sheet and maybe the public market might be a little bit quiet here, but the elevated levels of funding from the last couple of years I guess are sufficient to continue to execute on it I guess can you just talk about partnering that small biotech, but you talked about the durability.

Speaker 7: Maybe the public market might be a little bit quiet here, but the elevated levels of funding from the last couple of years, I guess, are sufficient for you to continue to execute on it. Can you just talk about, particularly that small biotech that you talked about, the durability of cash and balance sheets, visibility that you guys have relative to maybe past quarters, visibility maybe even into 2023? It would be helpful just to touch on that. I appreciate it. Thank you.

We have cash on the balance sheet visibility that you guys have relative maybe past quarters not visibility maybe even into 'twenty. Three we helpful. Just to touch on that I appreciate it.

Speaker 3: Yeah, you broke up a little bit there, John , but I think I got the gist of it. Yeah, I mean, you know, I think when we look at the biotech funding index as an indicator, it captures a part of the funding that comes into this market, right? So we have a truly global business development team that are bringing in projects that are coming out of Asia-Pac, Europe , and America, like I said before. You know, we're working with companies.

Yes, you broke up a little bit John but I think I got the gist of it.

Yes.

I think when we look at the biotech funding index is an indicator it catches a part of the funding that comes into this market right.

We have a truly global business development.

Team, bringing in projects that are coming out of Asia Pac Europe and America like I said before.

We are working with <unk>.

Companies.

Speaker 3: You know, Blackstone and Bain and people like that who fund clinical development through biotechs, etc., through portfolios.

Black.

Blackstone and pain in people who.

Clinical development through biotechs et cetera through portfolios.

Speaker 3: And we see a lot of money going into the emerging biotechs, you know, they've got great science, they are driving things forward. You know, when we, we obviously do, you know, credit checks and all that kind of stuff on customers, we don't have any problems at the moment that I'm aware of anyway, looking at Jason, but he's shaking his head on cash collection and things like that from that sector and all the indicators that we look at and think about.

And we see a lot of money going into the emerging biotechs.

They've got great science, they are driving things forward.

We obviously do credit checks and all that kind of still phone customers. We don't have any problems at the moment Im aware of anyway looking at Jason, but he's shaking his head on cash.

Cash collection and things from that sector and all the indicators that we look at and think about.

Speaker 3: that kind of raise a flag to you that somebody might be having problems we're not seeing.

Kind of raise a flag to you that somebody might be having problems we don't see.

Speaker 3: You know, I mean I remember back in the financial crisis, 2009 wasn't it?

I mean, I remember back in the financial crisis.

<unk> 2000 and Amazon.

Speaker 3: We saw problems then, for sure, but we don't see any of that now and it's good science.

We saw problems then for sure, but we don't see any of that now and its good science.

Speaker 3: incredible amount of assets that are coming through for development, cell and gene therapy, you know, you've got now, obviously, with the COVID tech, you know, the vaccine technologies, mRNA, people are looking at, well, can my product be delivered through an mRNA technology, etc. We're seeing a lot of investment in that kind of stuff. So we're just not seeing it. And, you know, we can assure you, we look at our pipelines.

Incredible amount of assets.

<unk> coming through for the development of cell and gene therapy, you've got now obviously with the Covid.

The vaccine technologies mrna people are looking at won't come out product be delivered through an mrna technology et cetera.

We've seen a lot of investment and that kind of stuff. So we're just not seeing it.

<unk>.

I can assure you we look at our pipelines.

Speaker 3: lot because it's you know the tip of the spear and you know and also we look at where we're at in the early phase with the early phase businesses, translational science guys, the you know our early phase science team in the clinics and we have record demand in that.

A lot because.

The tip of the spear.

And also we look at where we are at an early phase with the early phase business as translational science guys.

Early phase science team in the clinics and we have record demand in that sector.

Speaker 3: And that's our canary in the coal mine is looking at that, you know, it's looking as far forward in the process as you can of compounds, where they're going to go from one to, you know, phase one to phase two and onwards.

And that's our Canadian coal mine is looking at that.

Looking forward in the processes count of compounds, where they're going to go from one to.

Phase one phase two and onwards.

And we understand the problem.

Great. Thanks Alastair.

Speaker 1: And as a reminder, if you would like to ask a question, press the stars and the one key on your touch-tone telephone. Please stand by while we compile the Q&A roster.

Thank you and as a reminder, if you would like to ask a question Press Star then the one key on your Touchtone telephone.

Please standby, while we compile the Q&A roster.

Speaker 1: We have a follow-up from Eric Caldwell with Baird. Your line is open.

We have a follow up from Eric Coldwell with.

Baird Your line is open.

Speaker 9: Hey, thanks for bearing with me and apologize if I somehow missed it. If I had more time and more brain cells, I'd probably be able to figure it out, but did you quantify the backlog adjustment separate from the quarterly pass-through bookings in 4Q? So, you know, there's kind of a couple of components here to, I think, to get to the math, but maybe you could just spoon-feed it.

Hey, Thanks for bearing with me and I apologize if I somehow missed it if I had more time and more brain cells, it'd probably be able to figure it out but.

Did you quantify the backlog adjustment separate from the quarterly pass throughs.

So there's kind of a couple of components here to I think to get to the math, but.

Maybe you could just spoon feed us on that a little bit.

Speaker 4: Yeah. Hey, Eric, Jason. No, we didn't quantify it. And, you know, at this point, not thinking.

Yeah, Hey, Eric Jason No we didn't quantify it.

And.

At this point not thinking that.

Speaker 4: that we will. I think if you and Dave mentioned this, if you think back to quarter three of 20 when we made our first adjustment, um, you know, we talked about sort of the size of that at the time. Uh, I think

That we will I think if you and Dave mentioned this if you think back to quarter three of 'twenty. When we made our first adjustment.

We talked about sort of the size of that at the time.

I think.

Speaker 4: you know, in the $2.50 range, this is going to be, you know, well above that because we're, you know, as we've continued to look at 2021 and the new awards and the trends that we're seeing in the existing portfolio, we just wanted to take.

And the $2 50 range. This is going to be well above that because we're as we've continued to look at 2021, and the new awards and the trends that we're seeing in the existing portfolio.

Wanted to.

Take.

Speaker 4: all of it out that we believe that we can. So, you know, and just so everybody's on the same wavelength, excluding the reimbursables, right? We still had a really strong quarter, a book to build one, two, six in clinical and a one, three, four TTM. But that's the way to think about it, Eric, in terms of sizing.

All of it out that we believe that we can so.

Yeah.

Just so everybody on the same wavelength, excluding the Reimbursable right. We still had a really really strong quarter in the book to Bill of 126 in clinical and a one 3% for TTM, but that's the way to think about it.

Eric in terms of sizing it.

Speaker 9: Okay, I just thank you for that. I wasn't sure if you did or would, but I think we get the optics part of it. So thanks again.

Okay, Alright, thank you for that I wasn't sure if you did or what but.

I think we get I think we get the optics part of it so thanks again.

Speaker 9: Okay. Have a good day. Thanks, Eric. Thanks, Eric.

Okay.

Good day, Thanks, Eric.

Eric.

Thank you and there are no other questions in the queue I would like to turn the call back to Alistair Macdonald for closing remarks.

Speaker 1: Thank you, and there are no other questions in the queue. I'd like to turn the call back to Alistair MacDonald for closing remarks.

Speaker 3: Thank you. So again, our sincere thanks to the entire Cineos Health team for all they continue to do to manage through the pandemic while delivering for our customers. We remain very confident in our market positioning and look forward to a strong growth and profitability in 2022 and beyond as we execute on our value creation plan. So thank you for your attendance today, your interest and investment in our organization, and please be safe. Have a great day and be good. Thank you very much.

Thank you.

Our sincere thanks to the entire seniors health team for all they continue to do to manage through the pandemic, while delivering for our customers.

I am very confident in our market positioning and look forward to a strong growth and profitability in 2022 and beyond.

Execute on our value creation plan. So thank you for your attendance today your interest and investment in our organization and please be safe have a great day and be good. Thank you very much.

Speaker 1: This concludes today's conference call. Thank you for participating. You may now disconnect.

This concludes today's conference call. Thank you for participating you may now disconnect.