Medpace Holdings, Inc. Q3 FY2024 Earnings Call

Good day, ladies and gentlemen, and welcome to the Medpace Third Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder this call may be recorded. I would now like to introduce your host for today's conference call, Lauren Morris, Medpace's Director of Investor Relations. You may begin.

Good morning, and thank you for joining Medpace's third quarter 2024 earnings conference call. Also on the call today is our CEO, August Troendle; our President, Jesse Geiger; and our CFO, Kevin Brady. Before we begin, I would like to remind you that our remarks and responses to your questions during this teleconference may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve inherent assumptions with known and unknown risks and uncertainties, as well as other important factors that could cause actual results to differ materially from our current expectations. These factors are discussed in our Form 10-K and other filings with the SEC. Please note that we assume no obligation to update forward-looking statements even if estimates change. Accordingly, you should not rely on any of today's forward-looking statements as representing our views as of any date after today. During this call, we will also be referring to certain non-GAAP financial measures. These non-GAAP measures are not superior to or a replacement for the comparable GAAP measures, but we believe these measures help investors gain a more complete understanding of results. A reconciliation of such non-GAAP financial measures to the most directly comparable GAAP measures is available in the earnings press release and earnings call presentation slides provided in connection with today's call. The slides are available in the Investor Relations section of our website at investor.medpace.com. With that, I would now like to turn the call over to August Troendle.

Good day. Backlog cancellations in Q3 were above our usual range, making for three consecutive quarters of elevated cancellations. The magnitude of cancellations in Q3 were comparable to Q1, up and improved relative to Q2. As a net result of the elevated cancellations experienced in Q1 through Q3, net-new business awards were depressed in Q3, generating a net book-to-bill ratio of 1.0 for the quarter. As mentioned last quarter, the elevated cancellations we've experienced are not limited to studies previously recognized in the backlog, but rather span our entire pipeline of awarded future work and therefore impact current and anticipated future backlog recognition. This is expected to depress our reported net backlog awards in Q4, as well as in Q1 of 2025. Assuming cancellations return to a normal range and the business environment remains stable, we will be able to rebuild our pipeline of opportunities and our reported book-to-bill numbers should approach a more usual range. That is greater than 1.15 in the second-half of 2025. The business environment, apart from the elevated cancellations, remains decent. RFPs were down modestly on a year-over-year and sequential basis, but quality appears good. We remain optimistic about future growth, although, as I indicated, it will take several quarters to replenish the flow of opportunities converting into backlog. I will now turn the call over to Jesse to provide narrative on the quarter.

Thank you, August, and good morning, everyone. Revenue for the third quarter of 2024 was $533.3 million, which represents a year-over-year increase of 8.3%. Net-new business awards entering backlog in the third quarter decreased 12.7% from the prior year to $533.7 million, representing a 1.0 net book-to-bill. Ending backlog as of September 30, 2024 was approximately $2.9 billion, an increase of 8.8% from the prior year. We project that approximately $1.62 billion of backlog will convert to revenue in the next 12 months. And backlog conversion in the third quarter was 18.2% of beginning backlog. Now with that, I will turn the call over to Kevin to review our financial performance in more detail, as well as our guidance expectations for the balance of 2024. Kevin?

Thank you, Jesse, and good morning to everyone listening in. As Jesse mentioned, revenue was $533.3 million in the third quarter of 2024. This represented a year-over-year increase of 8.3%. Revenue for the nine months ended September 30, 2024 was $1.57 billion and increased 13.3%. EBITDA of $118.8 million increased 31.7%, compared to $90.2 million in the third quarter of 2023. Year-to-date EBITDA was $346.7 million and increased 30% from the comparable prior year. EBITDA margin for the third quarter was 22.3%, compared to 18.3% in the prior year period. Year-to-date EBITDA margin was 22%, compared to 19.2% in the prior year. EBITDA margin for the quarter was favorably impacted by reimbursable costs, which decreased by 350 basis points from the prior year. EBITDA also benefited from the direct service activities and productivity. In the third quarter of 2024, net income of $96.4 million increased 36.7%, compared to net income of $70.6 million in the prior year period. Net income growth ahead of EBITDA growth was primarily driven by interest income, partially offset by a higher effective tax rate in the quarter. Net income per diluted share for the quarter was $3.01, compared to $2.22 in the prior year. Regarding customer concentration, our top five and top 10 customers represent roughly 22% and 29% respectively of our year-to-date revenue. In the third quarter, we generated $149.1 million in cash flow from operating activities and our net days sales outstanding was negative 62 days. We did not repurchase any shares during the second quarter. As of June 30, 2024, we had $656.9 million in cash and $308.8 million remaining under our share repurchase authorization program. Moving now to our updated guidance for 2024. Full-year 2024 total revenue is now expected in the range of $2.09 billion to $2.13 billion, representing growth of 10.8% to 12.9% over 2023 total revenue of $1.89 billion. Our 2024 EBITDA is now expected in the range of $450 million to $470 million, representing growth of 24.1% to 29.7% compared to EBITDA of $362.5 million in 2023. We forecast 2024 net income in the range of $376 million to $388 million. This guidance assumes a full-year 2024 effective tax rate of 15.5% to 16.5%, interest income of $24.4 million and 32.1 million diluted weighted-average shares outstanding for 2024. There are no share repurchases in our guidance. Earnings per diluted share is now expected to be in the range of $11.71 to $12.09. Guidance is based on foreign exchange rates as of September 30, 2024. We plan to provide 2025 guidance on our fourth quarter call in February. With that, I will turn the call back over to the operator, so we can take your questions.

Thank you. And our first question today is coming from David Windley of Jefferies. Your line is open.

Hi, good morning and thank you for taking my questions. I wanted to start, August, with the cancellations and perhaps, if you could, quantify what you're seeing—talk about if you're seeing, I think last quarter you said there wasn't really a trend in those cancellations. I wondered if a trend has emerged in terms of either therapeutic area or otherwise the nature of the cancellations and how they break down between the cancellations of actual backlog that we're seeing run through the book-to-bill versus the amount that's kind of being pulled out of your pre-backlog?

Yes. Sure. Sure, Dave. Well, first, the cancellations we've seen—usually cancellations are a wildcard and they come out of the blue. It's kind of product performance. Occasionally a company has financial difficulty, but they're kind of random and unexpected. We've never seen a period in which we had just across-the-board elevated cancellations that weren't just one-offs. You have to kind of associate them all. And no, I don't see any trend across therapeutic areas or anything like that. I think the only common factor is these are companies that were funded during the COVID high and have run out of money. That was kind of the one common element. And you have the usual routine cancellations that are random, etc. But I do think that the environment—we've had a great deal of cancellations that are many of them related to running out of funding and not being able to refresh from the capital markets. So it is an unusual situation, but no, I don't see any particular trend in terms of therapeutic areas. It's kind of just the type of company and when they were funded and lack of future funding would be the elevated level of cancellations that are unexpected. And then you've got the background kind of stuff. In terms of the backlog-recognized portion of the cancellations versus that which is part of the pipeline but not yet in backlog—either the amount of revenue was part of a project that was in backlog but was not recognized because of a regulatory threshold, withholding, timing, or some event that prevented us from recognizing the remainder of the amount of that award, or just things that hadn't gotten to start-up and so were in the awarded status but hadn't started. The breakout between the two—backlog versus the rest of it—is probably roughly equal, maybe even a little bit higher in the amount that is not recognized in backlog. So it's been across the portfolio. And I don't have the exact numbers. I think maybe numerically a little bit larger in the non-recognized backlog portion but across the portfolio.

Got it. Thank you for that. And then the follow-up question is around pricing. It sounds like, as you said, the RFP flow may have been down a little, but generally holding up okay, and quality good. I'm wondering what you are seeing in the competitive environment and actions by competitors in an environment where it seems like there are fewer opportunities to go around for everybody? How might competitors be chasing those fewer opportunities—by getting more aggressive about timelines, pricing, or offering better payment terms? I just wonder if you're seeing any change in the pricing environment.

No, I'd say if anything, we've seen improvement. If you look back toward early in the year, we might have seen a little bit of that, but I actually think the business environment is pretty normalized if you take out the cancellations of stuff that was awarded during the COVID high. It is a pretty normalized business environment. I would think that we can get back to robust growth in the future. It's just going to take some time. But no, I've not seen lately any sort of trend toward dropping pricing or overly aggressive pricing. It's a competitive environment, but nothing unusual in the last quarter, I don't think.

That's interesting and good to hear. Thank you for the answers.

Thank you. And our next question for the day will be coming from Max Smock of William Blair. Your line is open.

Hi, good morning. Thanks for taking my questions. Maybe just following up on Dave's first question around the size of the cancellations in total. Last quarter, you mentioned double the normal range. I think if they had been within the range, you quoted a book-to-bill of about 1.24? Just wondering if you can give us a similar level of detail this quarter in terms of the difference between gross and net bookings and what book-to-bill would have looked like if cancellations were within that kind of normal 4% to 5% range that you've seen historically?

Yes. No, look, I don't have an analysis of that. Certainly, even if we didn't have elevated cancellations this quarter, which were outside of our range but not massive, we still would have had bookings somewhat below the sort of 1.2 range. It would have been well below that because of the cumulative prior cancellations in Q1 and Q2. So it's a mix of the cancellations over that entire period Q1 through Q3 that causes the reduced bookings. Again, if you cancel stuff that's in the pipeline that hasn't gotten into backlog, it's going to show up in future backlog awards and book-to-bill and that's what we've seen.

Yes, makes sense. So it's basically a little tougher to come up with that metric this quarter because you're also working off the elevated cancellations in the prior quarter. Is that the right way to think about it?

Sorting it out between the two is difficult, but even if we had very low cancellations this quarter, we wouldn't have gotten to a 1.2. So that's the kind of point.

Maybe following up on that on the gross bookings side, August, have you seen any change in terms of your win rate or competitive dynamics to Dave's point around pricing or just any other factors that would cause a shift one way or another—maybe causing a little bit of pullback or maybe even a step-up in your win rate here in the back half of the year?

Yes and no. Our win rate was actually really strong in late last year, the second half of last year. Q1 was weak in terms of new authorizations. Subsequently, we've had win rates that are right in the middle of the range. We're doing fine the last couple of quarters. Winning something and then having it cancel doesn't help in the long term, so it's really the cancellations, not our win rate, driving the issue. A lot of the cancellations have come from work awarded in 2021 and 2022 that were funded during that period.

Got it. I'll leave it there and hop back in the queue. Thanks for taking my questions.

Thank you. And our next question will be coming from Eric Coldwell of Baird. Your line is open.

Thanks. On average, over time, how much of your quarterly gross awards have come from awards that were previously made in prior periods—whether we call that pre-backlog or pipeline backlog—stuff that you had won in the past, but would put into backlog and into bookings in a future period? What was the normal cushion over time when you entered a quarter?

Basically, very little gets into backlog that was first awarded in that same quarter. Across the industry, you get an award and often you don't know exactly how much it is yet. It takes a while to refine specs and get it locked down and started. For us, backlog recognition is tied to a steady start. For others, contract timing might be similar. Often you're working under a letter of intent or startup agreement, and you don't really have a contract until studies are entering patients in the field, which is our criteria for entering backlog. That usually takes several quarters. Some things can hit in the same quarter, but those are the unusual opportunities.

Okay. And then I guess the elephant in the room here is that the market has the impression you've had growth strains on the organization that have led to quality issues and that these cancels are actually being caused by unhappy clients who are not out of money but in fact leaving you to go to another CRO. You've not indicated that on this call or prior calls, but do you have a sense on how much of the cancellations actually are projects that will still go on but are just going to go on with another vendor?

So the number of things that we've lost because of client dissatisfaction with our performance in the last year is zero. There have been years ago where a client might have been dissatisfied and moved to another CRO, but that hasn't happened. We have had a fair number of clients that have run out of funding, and we've provided notice of termination and they've moved it to another CRO. Some of those have subsequently been funded and continued. In early parts of the year, things looked bad in terms of funding and we didn't feel we could continue the programs without payment. If a company is given notice of termination by their CRO, it's unlikely they would move to another CRO and say, 'please take this work.' The reality is many were funding-driven cancellations rather than performance-driven.

All right. That's a good response. And then one last one: did I hear you say you expected to get back to a 'normal' 1.15 plus net book-to-bill next year in the second half?

Correct.

Yes, because your average book-to-bill since the IPO through the fourth quarter of '23 was 1.25. So I'm just curious on the disconnect between what you see as normal at 1.15, whereas history would say more like 1.25.

I'm not targeting 1.15; I'm putting that as a floor for expectations and that we would expect to see that. Hopefully, based on the business environment, it gets to 1.2 or 1.25.

Okay. Thanks very much. I appreciate it.

Thank you. And our next question for the day will be coming from Ann Hynes of Mizuho. Your line is open.

Hi, good morning. I know the past couple of years you have provided forward year guidance. Is there anything directionally you want to say about 2025 from maybe a margin perspective? For example, if we're in a mid-single-digit revenue growth environment, how do we view margins in that environment?

Ann, we're not going to provide any context on 2025 at this point, given the uncertainty around cancellations. We really want to have another quarter under our belts so that we can provide good perspective and guidance on the fourth quarter call.

All right. And then how should we think about margins? For example, this quarter you had a lot of cost savings. Can those continue in a lower revenue environment?

Certainly, they can continue. But remember, there's a lot of other factors that come into play on margins: reimbursable cost, utilization, and retention levels. We're operating at a pretty optimal spot right now across those metrics, and it depends on how those progress into the next quarter and into 2025.

Great. And one last question. Did you— I might have missed this—talk about gross bookings? Were they actually up in the quarter and the issue was just cancellations?

Gross bookings were not up in the quarter. The reason they weren't up was cancellations in the prior few quarters. Cancellation of pipeline work affects gross bookings and backlog this quarter. We generally do not provide the non-backlog cancellation magnitude. Does that make sense?

Yes. Thank you.

Thank you. And our next question will be coming from Dan Leonard of UBS. Your line is open.

Thank you. First, the dynamic you're describing where companies were funded during the sugar high of COVID are now running out of money—any sense for when that will be completely washed out of the system? The funding peak was three years ago at this point.

I keep hoping that's true, but we still have clients taking it quarter-to-quarter and continuing programs that were funded in that period and are not well funded. A number have gone bankrupt and we've terminated others due to inability to pay. Some eventually got funding and continued; some did not. There's still a number of projects with challenged funding. I'm hoping this is done, but it depends on the future business environment. If things turn south again, you could see more cancellations. The overhang is less, but it's not entirely eliminated.

And a quick follow-up: could you frame expectations on what book-to-bill could look like in the fourth quarter? I understand you don't want to give an explicit number, but maybe offer some framing thoughts?

Better than this past quarter—better than one. A lot of things happen during the quarter; pipeline, cancellations, and other factors have a large effect. I don't think it will be 1.2 and it won't be 1.0. It will be somewhere above 1. If I had to frame it, it's probably under 1.1.

Appreciate that. Thank you.

Thank you. And our next question will be coming from Justin Bowers of Deutsche Bank. Your line is open.

Thank you. Good morning and thanks for taking my questions. So one on backlog—related to Dan's question—can you give a sense of how much of the backlog is from that vintage from 2020 to 2021? And second, of the sort of that not yet awarded but impacting the go-forward bookings, is there a way to quantify what the impact of that is or frame how much of your typical bookings historically have reflected some of that not awarded but that shows up in the gross?

I'm not understanding exactly what you're looking for on the second part, but on the first part regarding the current backlog, I don't have it broken out by vintage. I do think there still is an amount there from the period you mentioned—2020 and 2021—and it contributed to the cancellations. I don't think it's a majority of backlog, but it did exacerbate the issue because of the rise in funding during that period and the subsequent drop off.

Understood. And part two: historically in any given quarter, what percentage of your bookings are related to this dynamic of in the pipeline but not yet awarded? For example, is that 10% or 20%?

I answered this a bit earlier: it's very rare that a project is awarded in a quarter and then recognized into backlog in the same quarter. It generally takes a few to several quarters for that to happen because our backlog recognition threshold is around starting to enroll patients, which usually takes time.

Okay, understood. And then based on what you're seeing now with the current backlog, how does that impact your view on employee growth over the next quarter or so? Can you give a sense of reimbursable costs—are we at steady-state given what you're seeing? Or would there be any change with sort of the mix there?

I can speak to employee growth. We did increase headcount about 1.8% from the prior year. That's likely where we're going to end the year, given Q4 is historically a slower hiring period for us. We do expect accelerated growth in 2025. We'll put a finer point on that when we issue 2025 guidance on the next quarter call.

In terms of reimbursable, we'll provide more context on 2025 next quarter. Historically, we've been in the 33% to 35% range, but it's volatile and difficult to predict. It was very high in the last three quarters of 2023, approaching 40%, then it dropped in Q1, back up in Q2, and down in Q3. I don't think it will get back to the 33% to 35% range immediately. Our modeling suggests it picks back up in Q4, not to the levels a year ago, but higher than Q3. Costs are stabilizing and normalizing. There's still stress on-site, but 2025 may still be somewhat elevated. We'll provide more color on the fourth quarter call.

Understood. Thank you.

Thank you. And our next question will be coming from Charles Rhyee of TD Cowen. Your line is open.

Yes, thanks for taking the questions. I just want to follow up, August: you mentioned a portion of your backlog relates to companies funded during COVID that are running out of money. What about the significant amount of funding in the first half of this year—did that not go to some of these clients or has that money not been released? Could some of that come back for these companies that are waiting on funding? Anything that connects the companies you're talking about here to those that got funding in the first half of this year?

There's a lot of overlap. A fair number of companies did get funding and their projects are continuing; they didn't cancel. A fair number didn't get funding and some we've given notice to and terminated. Some eventually got funding and continued with us, some did not. Funding was not evenly distributed; it went to specific companies and not everyone got funded.

Got it. That's helpful. As a follow-up: last quarter you talked about being opportunistic with share repurchase since earnings were under pressure. I don't think you bought stock back in this past quarter. Any reason not to have been more opportunistic this past quarter? Can you talk about your thoughts on buying back shares?

Our strategy hasn't changed. We put plans in place and we're somewhat limited in timing on when we can put things in place and have certain restrictions. Unfortunately, those plans did not trigger. We'll continue to be disciplined and opportunistically repurchase. If we're able to execute, we'll buy shares; if not, we'll continue to build cash balances.

Okay, thank you.

Thank you. One moment for the next question. And our next question will be coming from Jailendra Singh of Truist Securities. Your line is open.

Thanks. Good morning. I just want to go back to cancellations. You called out Q3 trends were similar to Q1 but better than Q2. Can you put a finer point on intra-quarter trends in terms of cancellations? Last quarter you called out trends were soft in June but showed signs of stabilization in July. Did that not just happen as you wrapped up the month or did trends get worse in August and September? It looks like you're expecting book-to-bill to improve in Q4. Does that mean trends were better exiting Q3 and likely continued in October versus what a book-to-bill of one might imply? Just trying to understand recent trends and perhaps something about October.

I don't have the exact dates. At the time of our last call we only had a couple weeks into July and it looked fine. Over the quarter we had a number of cancellations that pushed us out of the normal range. It wasn't that something suddenly spiked in the last month; we had cancellations through the quarter. That wasn't the only reason we have a 1.0 book-to-bill; it was more driven by the gutted pipeline from earlier cancellations.

Okay. And my follow-up: some peers are making a push in the biotech space claiming specialized services to meet unique customer demands. Have you seen this market get more competitive? I understand you might not have lost any client due to dissatisfaction, but what are your thoughts on potential clients having more choices today versus Medpace being the partner of choice in the past?

I'll jump in on that. We haven't seen a change to our win rate; it has been good. We are seeing competition in the field, but nothing irrational or aggressively priced. No material change that we'd point to in the competitive landscape.

Okay, great. Thanks a lot.

Thank you. And our next question will be coming from Max Smock of William Blair.

Hi, thanks for sneaking me in for the follow-up. I wanted to ask, going back to the front-end demand environment: last quarter you pointed to RFP flow up about 16% year-over-year. Biotech funding may have taken a step back in the third quarter but still overall September was strong. Just wondering what you're seeing in terms of RFP flow so far in the fourth quarter as well as an initial update on how that initial award or pre-backlog number has trended over the last couple months?

RFP numbers in the fourth quarter to date were down a little sequentially, not a great deal, but they did tick down. October information takes time because RFP turnaround averages about 10 days; you don't have full visibility immediately. For Q3, RFPs were down slightly year-over-year and down more than 10% sequentially versus Q2 but not by a great deal. We continue to see RFPs come in but the dollar-wise translation into Q4 is not yet clear.

So to clarify: down 10% sequentially off a strong Q2 number, but were they up year-over-year in the third quarter?

They were down slightly year-over-year.

Got it. Thank you.

Thank you. And we have a follow-up question from David Windley of Jefferies. Your line is open.

Hi again. A follow-up: I appreciate Eric's question addressing some rumors. Another is that you are pursuing or have won big pharma contracts. If a big pharma opportunity was full-service and fit your model that would be good, but odds are low. My basic question: can you discuss your go-to-market discipline? Is that still consistent in terms of your focus on biotech and full-service work?

I will not run if nominated, I will not serve—I'm not aware of us being on large pharma work. Our go-to-market remains the same. We're not jumping into large pharma, partial service, functional service, or staffing. Our core business is full-service and remains our focus. We don't plan on changing that strategy.

Got it. Okay. Further clarification: one thought was that your pass-throughs have come in light of your expectations in prior quarters and maybe part of this was a lowered forward expectation around pass-throughs affecting backlog estimates. From your commentary, it doesn't sound like that is part of this, but could you confirm?

David, it's not related to an adjustment on forward pass-through activity.

And on labor—Jesse, you said Q3 ending headcount is what you expect to end Q4. Regarding utilization, I presume margins benefited from not having continual inflow of new hires being non-billable. Is that correct? Is there still room for productivity gains to lead to higher near-term margin?

You're right, Dave. There is continued efficiency. We have low turnover and good utilization. We have plenty of staff sourcing and putting onto new projects and good efficiency from seasoned staff because we're not hiring as much. The burden of training and mentoring is lower, so productivity on billable work is higher. We're in a good spot now. We expect to accelerate hiring next year, and the rate will depend on bookings and opportunities.

Our turnover has been the lowest the last two quarters—possibly ever, certainly in the last five years. It's come down to record lows.

Thanks for that. On productivity, is there actually still room for further productivity that would increase margin in the near term? You've guided to some margin benefits, but is there more to squeeze out?

I don't think a great deal. We're at good efficiency now. I don't think there's a lot more margin expansion from lower turnover and greater productivity than we currently are experiencing.

Thank you. And our next follow-up question will be coming from Eric Coldwell of Baird. Your line is open.

Can you hear me? I wanted to wrap up with backlog burn. Over the last couple years you've had a range from mid-16% quarterly to over 19%. The last three quarters you've run consistently at 18.2%. What dynamics might shift that burn rate up or down over the next 12 months? I'm trying to get a sense whether you expect similar low 18s going forward or if it could return to the lows of a couple years ago or the highs of last year.

Good question. Progress of active studies continues and that's healthy. The burn rate is more influenced by bookings. When bookings were closer to 1.4, the burn rate was lower; when bookings slow, burn rate picks up. So it's less a function of how programs progress and more a function of the calculation of bookings. I think you'll see the burn rate stay at this level depending on future bookings.

Last one: how many projects or trials are you working on currently? I'm often asked how many studies you're running at a given time.

It's in the 500 or so range.

Perfect. Okay, thank you very much.

Thank you. And the last question of the day will be coming from Charles Rhyee of TD Cowen. Your line is open.

Yes, thanks for taking this follow-up. One question on pass-throughs: is some of the issue with pass-throughs falling related to delays in trials? Are service revenues because you're still overseeing the project and billing for them continuing, but the pass-through expenses haven't been expended yet and could come back as projects ramp? I'm curious if that dynamic plays into it at all.

It can be a number of things: slower startup activities than expected, mix of programs across the portfolio, timing of when sites submit their data files and invoices. We're dealing with thousands of sites and hundreds of programs; some of this is out of our control in terms of timing. It's a number of factors and it's difficult to predict quarter to quarter. We've seen this volatility in the past; it's not new.

Great. And one last: you mentioned looking for certain triggers to buy back shares. Can you dive into a little bit about what generally triggers you to repurchase shares?

We're not going to divulge our strategy in detail, but we pick different levels where we see value and put plans in place at those levels. Timing can be narrow and if those plans trigger, they trigger. We continue to evaluate opportunistic buybacks and remain disciplined in our approach.

Great. Appreciate it. Thank you.

Thank you. This does conclude the Q&A session. I would like to turn the call back over to Lauren for closing remarks. Please go ahead.

Thank you for joining us on today's call and for your interest in Medpace. We look forward to speaking with you again on our fourth quarter 2024 earnings call.

This does conclude today's conference call. Thank you for joining. You may all disconnect.