ICON Follows in Medpace Holdings Footsteps With Strong Booking Trends; Supports Continued Strength in Pharma Research
Dublin-based ICON plc recently unveiled its financial results for the third quarter ended September 30, 2023. The company reported Q3 revenues reached $2,055.1 million, signifying a 5.8% increase in comparison to the previous year. Analysts had been expecting $2,050 million.
In Q3 2023, ICON reported net business wins of $2,581 million, reflecting a net book-to-bill ratio of 1.26. This translates to 1.22 on a trailing twelve-month basis, showing a 10% increase compared to Q3 2022. This is consistent with MedPace Holdings report that showed strong backlog trends, a sign biopharma research spending remains robust. The closing backlog stood at $22.2 billion, representing a 2.6% increase from the previous quarter and a 10.0% surge from Q3 2022.
On the profitability front, ICON posted Q3 adjusted EBITDA of $432.5 million, accounting for 21.0% of revenue and marking a 13.9% increase from Q3 2022. Adjusted EBITDA margins expanded from 19.5% of revenue last year in the third quarter. The adjusted net income Q3 reached $273.9 million, equivalent to $3.30 per diluted share, indicating a 10.0% increase in adjusted earnings per share compared to Q3 2022. Analysts had been forecasting adjusted EPS of $3.28.
During the quarter, ICON made a $300.0 million repayment on its Term Loan B debt, resulting in a net debt balance of $3.7 billion and a net debt-to-adjusted EBITDA ratio of 2.3x. Furthermore, S&P Global Ratings upgraded ICON to an investment-grade credit rating in October 2023.
In a notable strategic move, ICON acquired Philips Pharma Solutions in October 2023. Philips Pharma Solutions is a provider of medical imaging and cardiac safety monitoring services.
The company maintained its full-year 2023 financial guidance, anticipating revenues in the range of $8,070 – $8,210 million, reflecting a year-over-year increase of 4.3% to 6.1%. The company also expects adjusted earnings per share to fall within the range of $12.63 – $12.91, representing a year-over-year increase of 7.5% to 9.9%.
Dr. Steve Cutler, CEO of ICON, commented on the impressive Q3 results, emphasizing the company’s remarkable revenue growth of 6% year-over-year. He noted that the double-digit growth in adjusted EBITDA and adjusted earnings per share of 14% and 10%, respectively, was a testament to ICON’s commitment to delivering excellence.