PPD, Inc (NASDAQ:PPD) Q1 2020 Earnings Conference Call - Final Transcript

May 07, 2020 • 08:30 am ET

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PPD, Inc (NASDAQ:PPD) Q1 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning, and welcome to PPD's First Quarter 2020 Earnings Conference Call. [Operator Instructions] At this time, I'd like to turn the conference over to Nate Speicher, Senior Vice President of Finance for PPD. Mr. Speicher, you may begin.

Executive
Nathan Speicher

Good morning, everyone, and thank you for joining the earnings call. Today, we'll review our financial and operating results for the first quarter of 2020. Joining me on the call today are David Simmons, PPD's Chairman and CEO; Bill Sharbaugh, our COO; and Chris Scully, our CFO.

Please note that today's discussion contains forward-looking statements based on the current business environment and, as such, includes certain risks and uncertainties which could cause our actual results to differ materially from such forward-looking statements. More information about potential risk factors can be found in our 2019 Form 10-K and in our upcoming Form 10-Q filing.

Also, in addition to US GAAP reporting, we will be discussing financial measures that do not conform to GAAP. We believe these non-GAAP measures enhance the understanding of our performance because they are more representative of how we internally measure our business. Please note these non-GAAP financial measures should not be considered in isolation from or as a substitute for GAAP measures. A reconciliation of GAAP to non-GAAP results is available in the press release we issued last night and supplemental investor presentation posted to our Investor Relations website.

Lastly, regarding the basis of presentation for today's discussion, please note that all P&L metrics discussed, including revenue, segment revenue and adjusted EBITDA, are on an ASC 606 basis. For commercial metrics discussed, including net authorizations, net book-to-bill, backlog and backlog conversion, those remain on a historical as-awarded, ASC 605 direct-only basis unless otherwise noted.

With that, I'll turn the call over to David.

Executive
David Simmons

Thank you, Nate. Good morning, everyone, and thank you for joining our Q1 2020 earnings call. I'd like to start by saying I hope you, your families and your colleagues are safe amidst the threat posed by the COVID-19 pandemic.

Given our collective focus on COVID-19, in addition to reviewing our Q1 results, we plan to spend a sizable amount of our time this morning discussing the impact to our business stemming from the virus as well as our ability to minimize the negative impacts and to continue playing a critical role aiding solution development in the form of treatments and vaccines. In light of the uncertainty surrounding the pandemic, we've withdrawn our previously issued guidance for the full year 2020 and today are issuing new guidance for the second quarter, which Chris will cover in his remarks.

Regarding the first quarter results. During the quarter, we saw strong growth across both key commercial and P&L metrics. A few highlights include: net authorizations of $1.06 billion resulting in a Q1 net book-to-bill of 1.30 times, and notably, we did not see any unusual cancellation activity related to COVID-19; a record ending backlog of $7.3 billion, an increase of 11.9% year-on-year; double-digit P&L growth with revenue of