ICLR ICON PLC

Highlights

• Net business wins in the quarter of $2,579 million, an increase of 6.6% on quarter two 2023. Reflects a net book to bill in the quarter of 1.22, and a trailing twelve month net book to bill of 1.24.

• Closing backlog of $23.8 billion, an increase of 2.0% on quarter one 2024 and 9.9% on quarter two 2023.

• Quarter two revenue of $2,120.2 million representing an increase of 4.9% on prior year revenue and 5.3% on a constant currency basis.

• Quarter two adjusted EBITDA of $450.4 million or 21.2% of revenue, an increase of 8.7% on quarter two 2023.

• GAAP net income for the quarter of $146.9 million or $1.76 per diluted share, an increase of 25.7% on quarter two 2023 diluted earnings per share.

• Quarter two adjusted net income was $312.6 million or $3.75 per diluted share, an increase of 20.6% on quarter two 2023 adjusted diluted earnings per share.

• Successful refinance of $2 billion Term Loan Bond with Investment Grade bond in May 2024. Secures net interest savings of c$110 million for 2024. Net debt balance of $2.9 billion at June 30, 2024 with net debt to adjusted EBITDA ratio of 1.7x.

• Updating full-year 2024 financial revenue guidance in the range of $8,450 - $8,550 million, representing a year over year increase of 4.1% to 5.3%. Updating full-year 2024 adjusted earnings per share* guidance in the range of $15.00 - $15.20, representing a year over year increase of 17.3% to 18.8%. Adjusted earnings per share to exclude amortization, stock compensation, restructuring, foreign exchange and transaction-related / integrated-related adjustments.

ICON plc (NASDAQ: ICLR), a world-leading healthcare intelligence and clinical research organization, today reported its financial results for the second quarter ended June 30, 2024.

CEO, Dr. Steve Cutler commented, “ICON delivered positive results in the second quarter, with revenue growth of 5.3% on a constant currency basis year over year, coupled with continued momentum in bookings performance, as backlog increased 10% over quarter two 2023. Adjusted earnings per share grew an impressive 21% year over year, driven by strong margin delivery in addition to the benefits realized from our debt refinancing. Importantly, we continue to make progress in winning new strategic customer partnerships and are delighted to announce the award of a new full service partnership with a prominent top 30 pharma customer in quarter two.

We are updating our full-year financial revenue guidance range for 2024 to account for the impact of the strengthening US dollar, as well as delayed trial starts related to next-generation COVID vaccine work. We now expect full year revenue to be in the range of $8,450 - $8,550 million, representing growth of circa 5% year over year at the midpoint of the range. We continue to drive better than expected margin performance through efficient delivery of our services and further leveraging our global business services model, and thus are increasing our full year adjusted earnings per share guidance to $15.00 – $15.20, representing high-teens growth on a year over year basis.”

Second Quarter 2024 Results

Gross business wins in the second quarter were $3,072 million and cancellations were $493 million. This resulted in net business wins of $2,579 million and a book to bill of 1.22.

Revenue for the second quarter was $2,120.2 million. This represents an increase of 4.9% on prior year revenue or 5.3% on a constant currency basis.

GAAP net income was $146.9 million resulting in $1.76 diluted earnings per share in quarter two 2024 compared to $1.40 diluted earnings per share in quarter two 2023. Adjusted net income for the quarter was $312.6 million resulting in an adjusted diluted earnings per share of $3.75 compared to $3.11 per share for the second quarter 2023.

Adjusted EBITDA for the second quarter was $450.4 million or 21.2% of revenue, a year-on-year increase of 8.7%.

The effective tax rate on adjusted net income in quarter two 2024 was 16.5%.

Cash generated from operating activities for the quarter was $218.6 million. During the quarter $36.3 million was spent on capital expenditure. At June 30, 2024, the Group had cash and cash equivalents of $506.6 million, compared to cash and cash equivalents of $396.1 million at March 31, 2024 and $270.2 million at June 30, 2023. During the quarter $2.0 billion of cash from the successful Investment Grade bond issue was used to repay $2,014.9 million of Term Loan B. Additionally, $143.0 million of the revolving credit facility was drawn down in the quarter and $193.0 million was repaid. This resulted in a net indebtedness of $2.9 billion at June 30, 2024.

Year to date 2024 Results

Gross business wins year to date were $6,185 million and cancellations were $953 million. This resulted in net business wins of $5,232 million and a book to bill of 1.24.

Year to date revenue was $4,210.5 million. This represents a year on year increase of 5.3% or 5.4% on a constant currency basis.

GAAP net income attributable to the Group year to date was $334.3 million resulting in $4.02 diluted earnings per share. Adjusted net income attributable to the Group was $601.1 million resulting in an adjusted diluted earnings per share of $7.22 compared to $6.01 per share for the equivalent prior year period.

Adjusted EBITDA year to date was $894.4 million or 21.2% of revenue, a year on year increase of 10.0%.

Other Information

In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), this press release contains certain non-GAAP financial measures, including adjusted EBITDA, adjusted net income and adjusted diluted earnings per share. Adjusted EBITDA, adjusted net income and adjusted diluted earnings per share exclude amortization, stock compensation, foreign exchange gains and losses, restructuring and transaction-related / integration-related adjustments. While non-GAAP financial measures are not superior to or a substitute for the comparable GAAP measures, ICON believes certain non-GAAP information is useful to investors for historical comparison purposes.

ICON will hold a conference call on July 25, 2024 at 08:00 EDT [13:00 Ireland & UK]. This call and linked slide presentation can be accessed live from our website at http://investor.iconplc.com. A recording will also be available on the website for 90 days following the call. In addition, a calendar of company events, including upcoming conference presentations, is available on our website, under “Investors”. This calendar will be updated regularly.

This press release contains forward-looking statements, including statements about our financial guidance. These statements are based on management's current expectations and information currently available, including current economic and industry conditions. These statements are not guarantees of future performance or actual results, and actual results, developments and business decisions may differ from those stated in this press release. The forward-looking statements are subject to future events, risks, uncertainties and other factors that could cause actual results to differ materially from those projected in the statements, including, but not limited to, the ability to enter into new contracts, maintain client relationships, manage the opening of new offices and offering of new services, the integration of new business mergers and acquisitions, as well as other economic and global market conditions and other risks and uncertainties detailed from time to time in SEC reports filed by ICON, all of which are difficult to predict and some of which are beyond our control. For these reasons, you should not place undue reliance on these forward-looking statements when making investment decisions. The word "expected" and variations of such words and similar expressions are intended to identify forward-looking statements. Forward-looking statements are only as of the date they are made and we do not undertake any obligation to update publicly any forward-looking statement, either as a result of new information, future events or otherwise. More information about the risks and uncertainties relating to these forward-looking statements may be found in SEC reports filed by ICON, including its Form 20-F, F-1, F-4, S-8, F-3 and certain other reports, which are available on the SEC's website at http://www.sec.gov.

* Our full-year 2024 guidance adjusted earnings per share measures are provided on a non-GAAP basis because the company is unable to predict with a reasonable degree of certainty certain items contained in the GAAP measures without unreasonable efforts. For the same reasons, the company is unable to address the probable significance of the unavailable information.

ICON plc is a world-leading healthcare intelligence and clinical research organization. From molecule to medicine, we advance clinical research providing outsourced services to pharmaceutical, biotechnology, medical device and government and public health organizations. We develop new innovations, drive emerging therapies forward and improve patient lives. With headquarters in Dublin, Ireland, ICON employed approximately 41,100 employees in 97 locations in 55 countries as at June 30, 2024. For further information about ICON, visit: www.iconplc.com.

ICON/ICLR-F

ICON plc

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND JUNE 30, 2023

(UNAUDITED)

 

 

Three Months Ended

 

Six Months Ended

 

June 30, 2024

 

June 30, 2023

 

June 30, 2024

 

June 30, 2023

 

(in thousands except share and per share data)

 

 

 

 

 

 

 

 

Revenue

$

2,120,159

 

 

$

2,020,251

 

 

$

4,210,545

 

 

$

3,998,829

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

Direct costs (excluding depreciation and amortization)

 

1,493,600

 

 

 

1,429,540

 

 

 

2,964,967

 

 

 

2,825,086

 

Selling, general and administrative

 

194,458

 

 

 

187,806

 

 

 

371,808

 

 

 

387,812

 

Depreciation and amortization

 

149,635

 

 

 

145,059

 

 

 

298,816

 

 

 

290,185

 

Transaction and integration related

 

6,820

 

 

 

12,701

 

 

 

13,811

 

 

 

24,083

 

Restructuring

 

45,789

 

 

 

35,661

 

 

 

45,789

 

 

 

45,390

 

Total costs and expenses

 

1,890,302

 

 

 

1,810,767

 

 

 

3,695,191

 

 

 

3,572,556

 

 

 

 

 

 

 

 

 

Income from operations

 

229,857

 

 

 

209,484

 

 

 

515,354

 

 

 

426,273

 

Interest income

 

1,237

 

 

 

949

 

 

 

3,167

 

 

 

2,021

 

Interest expense

 

(60,840

)

 

 

(85,206

)

 

 

(132,505

)

 

 

(171,757

)

 

 

 

 

 

 

 

 

Income before income tax expense

 

170,254

 

 

 

125,227

 

 

 

386,016

 

 

 

256,537

 

Income tax expense

 

(23,344

)

 

 

(9,629

)

 

 

(51,668

)

 

 

(23,902

)

 

 

 

 

 

 

 

 

Income before share of losses from equity method investments

 

146,910

 

 

 

115,598

 

 

 

334,348

 

 

 

232,635

 

Share of losses from equity method investments

 

—

 

 

 

—

 

 

 

—

 

 

 

(383

)

Net income

$

146,910

 

 

$

115,598

 

 

$

334,348

 

 

$

232,252

 

 

 

 

 

 

 

 

 

Net income per Ordinary Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

1.78

 

 

$

1.41

 

 

$

4.04

 

 

$

2.84

 

Diluted

$

1.76

 

 

$

1.40

 

 

$

4.02

 

 

$

2.81

 

 

 

 

 

 

 

 

 

Weighted average number of Ordinary Shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

82,738,765

 

 

 

81,999,746

 

 

 

82,658,984

 

 

 

81,892,662

 

Diluted

 

83,360,841

 

 

 

82,627,933

 

 

 

83,260,144

 

 

 

82,617,391

 

ICON plc

CONDENSED CONSOLIDATED BALANCE SHEETS

AS AT JUNE 30, 2024 AND DECEMBER 31, 2023

(UNAUDITED)

 

 

June 30, 2024

 

December 31, 2023

ASSETS

(in thousands)

Current assets:

 

 

 

Cash and cash equivalents

$

506,553

 

 

$

378,102

 

Available for sale investments

 

—

 

 

 

1,954

 

Accounts receivable, net of allowance for credit losses

 

1,569,642

 

 

 

1,790,322

 

Unbilled revenue

 

1,230,948

 

 

 

951,936

 

Other receivables

 

78,113

 

 

 

65,797

 

Prepayments and other current assets

 

139,244

 

 

 

132,105

 

Income taxes receivable

 

79,216

 

 

 

91,254

 

Total current assets

$

3,603,716

 

 

$

3,411,470

 

 

 

 

 

Non-current assets:

 

 

 

Property, plant and equipment

 

353,844

 

 

 

361,184

 

Goodwill

 

9,016,549

 

 

 

9,022,075

 

Intangible assets

 

3,632,354

 

 

 

3,855,865

 

Operating right-of-use assets

 

149,782

 

 

 

140,333

 

Other receivables

 

87,609

 

 

 

78,470

 

Deferred tax asset

 

74,787

 

 

 

73,662

 

Investments in equity- long term

 

50,220

 

 

 

46,804

 

Total assets

$

16,968,861

 

 

$

16,989,863

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

83,037

 

 

$

131,584

 

Unearned revenue

 

1,602,526

 

 

 

1,654,507

 

Other liabilities

 

999,071

 

 

 

915,399

 

Income taxes payable

 

27,935

 

 

 

13,968

 

Current bank credit lines, loan facilities and notes

 

29,762

 

 

 

110,150

 

Total current liabilities

$

2,742,331

 

 

$

2,825,608

 

 

 

 

 

Non-current liabilities:

 

 

 

Non-current bank credit lines, loan facilities and notes

 

3,408,157

 

 

 

3,665,439

 

Lease liabilities

 

145,464

 

 

 

126,321

 

Non-current other liabilities

 

48,372

 

 

 

45,998

 

Non-current income taxes payable

 

195,778

 

 

 

186,654

 

Deferred tax liability

 

843,633

 

 

 

899,100

 

Commitments and contingencies

 

—

 

 

 

—

 

Total Liabilities

$

7,383,735

 

 

$

7,749,120

 

 

 

 

 

Shareholders' equity:

 

 

 

Ordinary shares, par value 6 euro cents per share; 100,000,000 shares authorized,

 

 

 

82,816,600 shares issued and outstanding at June 30, 2024 and

 

 

 

82,495,086 shares issued and outstanding at December 31, 2023

 

6,720

 

 

 

6,699

 

Additional paid‑in capital

 

6,988,736

 

 

 

6,942,669

 

Other undenominated capital

 

1,162

 

 

 

1,162

 

Accumulated other comprehensive loss

 

(179,559

)

 

 

(143,506

)

Retained earnings

 

2,768,067

 

 

 

2,433,719

 

Total Shareholders' Equity

$

9,585,126

 

 

$

9,240,743

 

Total Liabilities and Shareholders' Equity

$

16,968,861

 

 

$

16,989,863

 

ICON plc

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND JUNE 30, 2023

(UNAUDITED)

 

 

Six Months Ended

 

June 30, 2024

 

June 30, 2023

 

(in thousands)

Cash flows from operating activities:

 

 

 

Net income

$

334,348

 

 

$

232,252

 

 

 

 

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation and amortization expense

 

298,816

 

 

 

290,185

 

Impairment of operating right-of-use assets and related property, plant and equipment

 

12,559

 

 

 

8,613

 

Reduction in carrying value of operating right-of-use assets

 

19,367

 

 

 

23,607

 

Loss on equity method investments

 

—

 

 

 

383

 

Acquisition-related gain

 

—

 

 

 

(6,160

)

Amortization of financing costs and debt discount

 

20,604

 

 

 

7,899

 

Stock compensation expense

 

28,145

 

 

 

31,357

 

Deferred tax benefit

 

(61,239

)

 

 

(59,177

)

Unrealized foreign exchange movements

 

13,761

 

 

 

(3,345

)

Other non-cash items

 

12,463

 

 

 

18,202

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

198,749

 

 

 

(40,675

)

Unbilled revenue

 

(287,183

)

 

 

(27,210

)

Unearned revenue

 

(52,081

)

 

 

65,266

 

Other net assets

 

7,356

 

 

 

(161,816

)

Net cash provided by operating activities

 

545,665

 

 

 

379,381

 

 

 

 

 

Cash flows from investing activities:

 

 

 

Purchase of property, plant and equipment

 

(63,440

)

 

 

(58,880

)

Purchase of subsidiary undertakings (net of cash acquired)

 

(7,831

)

 

 

(5,100

)

Movement of available for sale investments

 

1,954

 

 

 

60

 

Proceeds from investments in equity - long term

 

1,373

 

 

 

—

 

Purchase of investments in equity - long term

 

(5,621

)

 

 

(4,733

)

Net cash used in investing activities

 

(73,565

)

 

 

(68,653

)

 

 

 

 

Cash flows from financing activities:

 

 

 

New Notes issue costs

 

(11,679

)

 

 

—

 

Drawdown of credit lines and loan facilities

 

2,192,480

 

 

 

230,000

 

Repayment of credit lines and loan facilities

 

(2,537,882

)

 

 

(580,000

)

Proceeds from exercise of equity compensation

 

21,645

 

 

 

20,177

 

Share issue costs

 

(14

)

 

 

(9

)

Net cash used in financing activities

 

(335,450

)

 

 

(329,832

)

 

 

 

 

Effect of exchange rate movements on cash

 

(8,199

)

 

 

512

 

Net increase / (decrease) in cash and cash equivalents

 

128,451

 

 

 

(18,592

)

Cash and cash equivalents at beginning of period

 

378,102

 

 

 

288,768

 

Cash and cash equivalents at end of period

$

506,553

 

 

$

270,176

 

ICON plc

RECONCILIATION OF NON-GAAP MEASURES

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND JUNE 30, 2023

(UNAUDITED)

 

 

Three Months Ended

 

Six Months Ended

 

June 30, 2024

 

June 30, 2023

 

June 30, 2024

 

June 30, 2023

 

(in thousands except share and per share data)

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

 

 

 

 

 

 

Net income

$

146,910

 

 

$

115,598

 

 

$

334,348

 

 

$

232,252

 

Share of losses from equity method investments

 

—

 

 

 

—

 

 

 

—

 

 

 

383

 

Income tax expense

 

23,344

 

 

 

9,629

 

 

 

51,668

 

 

 

23,902

 

Net interest expense

 

59,603

 

 

 

84,257

 

 

 

129,338

 

 

 

169,736

 

Depreciation and amortization

 

149,635

 

 

 

145,059

 

 

 

298,816

 

 

 

290,185

 

Stock-based compensation expense (a)

 

14,964

 

 

 

16,598

 

 

 

28,145

 

 

 

31,357

 

Foreign currency (gains)/losses, net (b)

 

3,340

 

 

 

903

 

 

 

(7,474

)

 

 

2,241

 

Oncacare (gain) (g)

 

—

 

 

 

(6,160

)

 

 

—

 

 

 

(6,160

)

Restructuring (c)

 

45,789

 

 

 

35,661

 

 

 

45,789

 

 

 

45,390

 

Transaction and integration related costs (d)

 

6,820

 

 

 

12,701

 

 

 

13,811

 

 

 

24,083

 

Adjusted EBITDA

$

450,405

 

 

$

414,246

 

 

$

894,441

 

 

$

813,369

 

 

 

 

 

 

 

 

 

Adjusted net income and adjusted diluted net income per Ordinary Share

 

 

 

 

 

 

 

Net income

$

146,910

 

 

$

115,598

 

 

$

334,348

 

 

$

232,252

 

Income tax expense

 

23,344

 

 

 

9,629

 

 

 

51,668

 

 

 

23,902

 

Amortization

 

116,489

 

 

 

114,617

 

 

 

232,987

 

 

 

229,295

 

Stock-based compensation expense (a)

 

14,964

 

 

 

16,598

 

 

 

28,145

 

 

 

31,357

 

Foreign currency (gains)/losses, net (b)

 

3,340

 

 

 

903

 

 

 

(7,474

)

 

 

2,241

 

Restructuring (c)

 

45,789

 

 

 

35,661

 

 

 

45,789

 

 

 

45,390

 

Oncacare (gain) (g)

 

—

 

 

 

(6,160

)

 

 

—

 

 

 

(6,160

)

Transaction and integration related costs (d)

 

6,820

 

 

 

12,701

 

 

 

13,811

 

 

 

24,083

 

Transaction-related financing costs (e)

 

16,697

 

 

 

3,401

 

 

 

20,604

 

 

 

7,899

 

Adjusted tax expense (f)

 

(61,768

)

 

 

(46,048

)

 

 

(118,780

)

 

 

(93,517

)

Adjusted net income

$

312,585

 

 

$

256,900

 

 

$

601,098

 

 

$

496,742

 

 

 

 

 

 

 

 

 

Diluted weighted average number of Ordinary Shares outstanding

 

83,360,841

 

 

 

82,627,933

 

 

 

83,260,144

 

 

 

82,617,391

 

 

 

 

 

 

 

 

 

Adjusted diluted net income per Ordinary Share

$

3.75

 

 

$

3.11

 

 

$

7.22

 

 

$

6.01

 

(a)

Stock-based compensation expense represents the amount of recurring expense related to the company’s equity compensation programs (inclusive of employer related taxes).

(b)

Foreign currency (gains)/losses, net relates to gains or losses that arise in connection with the revaluation, or settlement, of non-US dollar denominated assets and liabilities. We exclude these gains and losses from adjusted EBITDA and adjusted net income because fluctuations from period- to- period do not necessarily correspond to changes in our operating results.

(c)

Restructuring relates to charges incurred in connection with the company's realignments of its workforce, with the elimination of redundant positions as well as reviewing its global office footprint and optimizing its locations to best fit the requirements of the company.

(d)

Transaction and integration related costs include expenses associated with our acquisitions and any other costs incurred directly related to the integration of these acquisitions.

(e)

Transaction-related financing costs includes costs incurred in connection with changes to our long-term debt and amortization of financing fees. We exclude these costs from adjusted EBITDA and adjusted net income because they result from financing decisions rather than from decisions made related to our ongoing operations.

(f)

Represents the tax effect of adjusted pre-tax income at our estimated effective tax rate.

(g)

On April 20, 2023, the Company completed the purchase of the majority investor’s 51% majority voting share capital of Oncacare Limited (“Oncacare”). This gave rise to an acquisition-related gain of $6.2 million. This gain was excluded from adjusted EBITDA and adjusted net income.

Source: ICON plc

View source version on businesswire.com: https://www.businesswire.com/news/home/20240724363814/en/

Investor Relations +1 888 381 7923 or Brendan Brennan Chief Financial Officer +353 1 291 2000 Kate Haven Vice President Investor Relations +1 888 381 7923 http://www.iconplc.com All at ICON