Syneos Health, Inc.

Good morning and welcome to the Cineos Health'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 Ronnie Spate, Senior Vice President of Investor Relations. Please go ahead, sir.

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. In addition to the press release, a slide presentation corresponding to our prepared remarks is available on our website at investor.cineoshealth.com. 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 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. 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. 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 McDonald. Alistair?

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. 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 position our business for long-term growth. Dynamic assembly investments that are fueling growth include Kinetic, our modern customer engagement capability, and the expansion of our DCT solutions through Ealingworth and StudyKick. 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. 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. 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. Jason will go into further detail on these adjustments and the additional information we are providing to improve your visibility into these trends. 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. 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 and 1.15 times for commercial. 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. Second, our commercial solutions business continues to demonstrate strong performance. With our full service approach resonating with customers, and the CINEOS 1 portfolio beginning to achieve commercialization milestones, resulting in 19.8% revenue growth. With deployment solutions ending backlog growth of 20.9% for 2021, our commercial business remains well positioned for low teens growth in 2022. 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. 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. In clinical solutions, revenue grew 20.7% compared to the fourth quarter of 2020, including the impact 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. 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%. 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, and the biotech funding environment. Our growth remains broad-based, with our highest growth rates in deployment solutions and consulting, including continued strength in our SMID customer segment. 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 businesses, 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. Full-service commercial gross awards remained robust through the fourth quarter, resulting in full-year growth of over 70% compared to 2020. With the continued success of these offerings, the impact of Cineos One and our strong backlog, we expect commercial revenue growth rates to lead the way for the total company in 2022. As we drive innovation, we see continued customer adoption of integrated product development solutions that work across our clinical to commercial capabilities. 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. 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. Today, 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. 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. 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. 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. In addition to the substantial awards, the growing CINEOS 1 portfolio is already driven into our clinical business. We expect it to increasingly contribute to commercial awards and revenue over the coming years. 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. 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. In closing, I want to thank all of my 28,000-plus Cineos 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. Jason will now provide additional comments on our financial performance and guidance. Jason?