Syneos Health, Inc. (SYNH) Tops Q2 EPS by 1c, Revenues Miss; Offers Updated FY18 EPS/Revenue Guidance

Syneos Health, Inc. (NASDAQ: SYNH) reported Q2 EPS of $0.62, $0.01 better than the analyst estimate of $0.61. Revenue for the quarter came in at $1.07 billion versus the consensus estimate of $1.09 billion.

Highlights

• GAAP total revenue of $1.07 billion and $2.13 billion for the three and six months ended June 30, 2018, respectively. Combined Company ASC 606 adjusted service revenue of $1.08 billion and $2.14 billion for the three and six months ended June 30, 2018, respectively.
• Combined Company ASC 605 net new business awards of $1.06 billion and $1.93 billion for the three and six months ended June 30, 2018, representing book-to-bill ratios of 1.32x and 1.24x, respectively.
  • Clinical Solutions segment awards of $849.9 million and $1.40 billion, respectively, resulting in three-, six-, and trailing twelve-month book-to-bill ratios of 1.52x, 1.29x, and 1.26x, respectively. Awards grew 18.6% and 13.4% year over year, respectively, on a period-over-period basis for the three and six months ended June 30, 2018, respectively.
  • Commercial Solutions segment net awards of $205.8 million and $528.1 million, representing book-to-bill ratios of 0.86x and 1.12x for the three and six months ended June 30, 2018, respectively.
• Combined Company ASC 605 adjusted service revenue of $797.5 million and $1.56 billion for the three and six months ended June 30, 2018, respectively.
• GAAP diluted earnings per share of $0.13 and loss per share of $0.11 for the three and six months ended June 30, 2018, respectively.
• Combined Company ASC 606 adjusted diluted earnings per share of $0.62 and $1.16, respectively, compared to $0.75 and $1.33, respectively, under ASC 605 for the three and six months ended June 30, 2018.
• Repaid $66.3 million and $97.5 million of term loan debt during the three and six months ended June 30, 2018, respectively.
• Repurchased $37.5 million and $75.0 million of common stock during the three and six months ended June 30, 2018, respectively.
• Updating full year 2018 ASC 606 and ASC 605 guidance.

“We delivered solid second quarter results, which were in line with our expectations and appropriately mark the one-year anniversary of our transformative merger,” said Alistair Macdonald, Chief Executive Officer of Syneos Health. “During the quarter, we successfully leveraged our collaborative cross-selling capabilities to achieve record net awards and revenue in our Clinical business, and achieved the first quarter of sequential quarterly growth in our Commercial business since the closing of the merger. We had significant wins across both SMID and large customers, including a large end-to-end deal, which further validates the relevance of our integrated business model. We believe we are poised to capitalize on our robust pipeline and generate strong results in the second half of the year while continuing to build our unique biopharmaceutical solutions organization.”

GUIDANCE:

Syneos Health, Inc. sees FY2018 EPS of $2.55-$2.83, versus the consensus of $2.67. Syneos Health, Inc. sees FY2018 revenue of $4.4-4.55 billion, versus the consensus of $4.46 billion.

For earnings history and earnings-related data on Syneos Health, Inc. (SYNH) click here.

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