Justin Bowers: Hi, good afternoon/ morning, everyone. Just taking a step back. Can you sort of paint the landscape for, large pharma customers and biotech customers and maybe sort of like contrast that to, this time last year or maybe even earlier this year, just trying to get a sense of how the environment evolved?
Steven Cutler: Yes, Justin. I mean, we’ve seen pretty constructive, positive RFP numbers for certainly for the last two quarters over all the segments across biotech, large pharma in our more sort of ancillary services, labs, early phase, etc., etc., and obviously FSP as well. So I talked about high single digits as being sort of across the landscape, and it’s fairly consistently across those segments. So overall, we see a very constructive, a very positive sort of business environment. Obviously, there are some challenges out there in the macroeconomic environment. We’re very aware of that. But I think we talked about cautiously optimistic as being our sort of watchwords for the, for this present time. And there’s nothing that we’ve seen certainly from an RFP point of view or from an awards point of view that would change that. It’s a constructive, solid, positive environment. We feel we’re well placed to benefit from it.
Justin Bowers: Got it. And then just a quick follow-up. In terms of the burn rate, when you look at the backlog now and sort of the awards over the last 12 months, is sort of the go-forward burn rate, we think it’s similar in that nine and a half plus or minus corridor, over the next 12 months or anything in the backlog that would change the sort of trajectory of that.
Brendan Brennan: Hey, Justin, it’s Brandan here. I might take that one. Yes, obviously, we’ve talked about 9.5% for the full year this year. That’s our forecast position for 2023. As we look into our business winds as they came in the back end of the year, Steve made the comments there that we’re, cautiously optimistic about the future here. So that applies to Q4 as well. And we want to see good development. So we’ll obviously give a much more fulcrum update when we do our guidance. But at this stage, yes, it’s in that corridor is probably not a bad way of thinking about things, albeit we will give further color, as I said, when we get to our guidance, which we are planning to do in January in JPM.
Justin Bowers: Got it. Thank you.
Operator: Thank you. We will take our next question. Your next question comes from the line of Derik De Bruin from Bank of America. Please go ahead. Your line is open.
Derik De Bruin: Hi. Good morning. And thank you for taking my question. So as you noted, you’ve done great work on the EBITDA margin and you’re ahead. You basically have hit your target ahead of schedule. I have to be the jerk and ask, where do we go from here? How much expansion do we continue to see going forward? Just any color on that?
Steven Cutler: Yes, sure, Derik. As we’re ahead of schedule on the EBITDA margin at 21% for the quarter. So we’re very pleased with how we’ve been able to do that. That’s been a combination of both improvements in the operational side of things, gross margin, and also on the SG&A front with our world-class global business services group. I think going forward, given some of the market dynamics, probably any further uptick, and we’re certainly aiming for that going forward into ’24-’25, will probably come in the SG&A region. We continue to push hard in the robotics, AI, machine learning sort of space. We’ve got a significant amount of resource deployed in that area now, and that’s increasing. We’ve got some fairly aggressive targets in that space.
We’re also looking at where our workforce is located in the longer term and making sure we’re maximizing benefits in that position, in that case. There are a few more levers we can continue to pull, probably more in the SG&A space than in the operational space, where we can possibly make some modest improvements, but it’ll be more challenging, I think, in that area in the median term.
Derik De Bruin: Great. I’ve had a number of investors asking questions about the CRO competitive dynamics in the market, given that you just had one company got spun out, you had another one taking private equity, maybe a little bit more focus on those businesses now than they were in the past. What’s your take on the CRO competitive landscape and how that evolves, given you’ve got some of these smaller players that have had seen some changes?
Steven Cutler: Yes, it’s been an interesting time in our industry over the last several years, I suppose, with some companies going private and spinning out and the rest of it. We do see the top three starting to differentiate or move away from that middle tier. That, I think, is being evidenced in the data that’s coming out in terms of our revenues and profitability, et cetera. scale, I think, represents an important differentiating advantage for those top three. I think that will continue. Some of our competitors at more the lower levels have got some challenges and some work to do, and they’re going to do it more in a private setting in one or two cases, and that’s for them to do. I’m not going to get too specific on that, but it has, I think, offered us some opportunity to improve our market share or to put ourselves in a better position competitively, and that’s usually a relatively short-term thing.
They’ll get their act together at some point. For us, as a stable, committed organization focused in the clinical space and being very stable from a management point of view, it’s probably offered us some opportunity. We’re certainly keen to take that, and we’ve been, I think, benefiting from it.
Derik De Bruin: Thank you very much.
Operator: Thank you. We will take our next question. Your next question comes from the line of Elizabeth Anderson from Evercore ISI. Please go ahead. Your line is open.
Elizabeth Anderson: Hey, guys. Thanks so much for the question. Maybe just circling back to some of the pharma commentary. I think, obviously, investors have been a bit nervous because of sort of what’s happening on tools and maybe on the early development side, which I understand, obviously, you don’t plan. But how do we think about, like, from your conversations with pharma, like, where are they prioritizing the spending? And I guess I’m sort of like a back way of trying to figure out, like, how are you guys continuing to sort of outperform what we’ve seen as sort of worse results on some of the earlier stage stuff?
