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
ICON (NASDAQ:ICLR)
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