August Troendle: Yes, I think it’s kind of combination of all of the above. There’s been quite a bit of inflationary changes, particularly in some therapeutic areas and part of that is competition and all the rest of it. And so I think investigator fees have gone up as a percent of budgets and higher percent than our costs. And there’s obviously the mix of Phase IIIs and large studies and particularly maybe more expensive patient populations have been a factor too. But I think it’s really a combination of therapeutic area, the type of study, the cost of the patient and inflationary factors that are all driving up the pass-through prefunded investigator cost. I think that may, over time, lessen a little, but I think kind of the percent of investigator fees as a proportion of the total projects may remain elevated for quite a while.
David Windley: Okay, great. Thank you.
Operator: Thank you. [Operator Instructions] Our next question will come from John Sourbeer of UBS. Your line is open.
John Sourbeer: Thanks for taking the question. I guess just following up there a little bit on the beat in the quarter and just some of the disclosures, it seems like midsized biotech and metabolism are very strong, and I guess, also coupled with those large pass-throughs. Is the beat mostly driven by a couple of larger studies or are you seeing broad-based strength here currently?
August Troendle: It’s pretty broad-based. We don’t have – yes, Jesses, go ahead.
Jesse Geiger: Yes, I’d just say it’s broad, it’s not concentrated in any one study and metabolic has been running pretty hot past couple of quarters and it’s continuing to contribute, but plenty of good contribution from other therapeutic areas as well in the quarter.
John Sourbeer: Thanks. And your funding was pretty good in 2Q, but rates are higher again. Any additional color you can provide on where you see the funding environment going maybe in the second half of this – or I guess, remainder of this year or into next year, and could there be any impact there on a lag basis?
August Troendle: I’m sorry, the funding, and how that might play out going forward?
John Sourbeer: Yes. Just what are your expectations around maybe for 4Q and then for next year?
August Troendle: Things look strong. As I said, we got record kind of levels of both RFP and awards. And we had a drop-off in award. So Q4, Q1, we had kind of a very weak time period. And it was all a question of how quickly we could refill things compared to the food moving through the pipeline kind of thing. I think things look pretty good. We won’t see a drop off and we’re hoping that the business environment holds up and we’ll have a very strong ’24.
John Sourbeer: Thanks. And last one here on my end. Just any additional color you can provide on the 2024 EBITDA margin guidance? And just remind us, even over the long term, I guess, what is the margin expansion opportunity there or a target level?
Kevin Brady: Yes John, this is Kevin. I don’t expect – I mean it’s going to be somewhat contingent on what happens with the reimbursable activities, right? Just given the impact that, that has on margin percentage. But if that level is off, and kind of remains elevated, consistent to where we were in the past couple of quarters here. I don’t expect there to be a margin expansion. We still have some level of pressure from wage and benefit inflation. So, I don’t see 2024 as being a huge margin expansion opportunity.
