PPD, Inc (NASDAQ:PPD) Q2 2020 Earnings Conference Call - Final Transcript

Aug 05, 2020 • 08:30 am ET


PPD, Inc (NASDAQ:PPD) Q2 2020 Earnings Conference Call - Final Transcript


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Good morning, and welcome to PPD's Second 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.

Nathan Speicher

Good morning, everyone, and thank you for joining the earnings call. Today, we will review our financial and operating results for the second 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, include 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 filing 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 in the 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.

David S. Simmons

Thank you, Nate. Good morning, everyone, and thank you for joining our second quarter 2020 earnings call. I hope everyone's well.

Despite the headwinds that COVID-19 posed to our business this quarter, we were able to exceed our Q2 guidance, delivering a positive year-on-year growth. I am very pleased with the resilience of our business and the adaptability of our management team and colleagues to face this challenge and to minimize its negative impacts.

As we did in our first quarter earnings call, we will provide an update on the impacts to our business stemming from the virus. I'll start with our Q2 performance and then turn to the future, giving some color on the positive signs of recovery we are seeing and the impact on our ability to convert our growing backlog into profitable revenues.

Regarding guidance, the fluid nature of the operating environment amidst COVID-19 makes it more difficult to guide with precision, in particular, the further you go out. For this reason, we are only providing quantitative guidance for the third quarter on today's call. However, as Chris will expand upon in his remarks, should key operating metrics continue to improve at the same pace that they have over