ICON Reports Fourth Quarter and Full Year 2022 Results

Highlights

• Net business wins in the quarter of $2,350 million; a net book to bill of 1.20. Full year net business wins of $9,450 million; a net book to bill of 1.22.
• Closing backlog in the quarter of $20.7 billion, an increase of 2.4% on quarter three 2022 or an increase of 8.7% on quarter four 2021.
• Quarter four revenue of $1,962 million, representing an increase of 4.3% on quarter four 2021 adjusted revenue and 7.6% on a constant currency organic basis. Full year revenue of $7,741.4 million, representing an increase of 41.2% on full year 2021 revenue or 45.4% on a constant currency basis.
• Record quarter four adjusted EBITDA¹ of $405 million or 20.6% of revenue, an increase of 21.8% on quarter four 2021. Full year adjusted EBITDA of $1,479.5 million or 19.1% of revenue, an increase of 52.5% on full year 2021.
• GAAP net income attributable to the Group for quarter four of $117.4 million or $1.42 per diluted share. Full year GAAP net income attributable to the Group of $505.3 million or $6.13 per diluted share.
• Adjusted net income¹ attributable to the Group for quarter four of $257.7 million or $3.13 per diluted share, an increase of 19% on prior year quarter four. Full year adjusted net income attributable to the Group of $968.7 million or $11.75 per diluted share, an increase of 21.8% on full year 2021. 
• $200 million repayment made on Term Loan B debt during quarter four, bringing full year repayments to $800 million.  Net debt balance of $4.4 billion with net debt to adjusted EBITDA ratio of 2.9x. Hedging solution finalized resulting in proportion of fixed debt amounting to circa 60% of total debt, providing greater certainty on interest expenses going forward.
• Full year 2023 revenue guidance reaffirmed in the range of $7,940 - $8,340 million, representing a year over year increase of 2.6% to 7.7%, and full year 2023 adjusted earnings per share¹ guidance in the range of $12.40 - $13.05, representing a year over year increase of 5.5% to 11.1%.  Adjusted earnings per share to exclude amortization, stock compensation, foreign exchange, restructuring and transaction-related / integration-related adjustments.

Dublin, Ireland, February 22, 2023 – ICON plc (NASDAQ: ICLR), a world-leading healthcare intelligence and clinical research organisation, today reported its financial results for the fourth quarter and year ended December 31, 2022.

CEO, Dr. Steve Cutler commented, “ICON continued its positive momentum in the fourth quarter of 2022, with 7.6% constant currency revenue growth year over year, and delivering on our full-year financial outlook in a dynamic market environment.  We saw solid demand across our portfolio of services, resulting in backlog growth of 8.7% on a year over year basis.  The combination of strong underlying operational performance and focused cost management delivered outstanding adjusted EBITDA¹ growth of 22% and adjusted earnings per share growth of 19% on a year-over-year basis in quarter four.

As we turn to 2023, demand for our services has continued as we remain focused on meeting the evolving needs of our customers and further invest in our comprehensive offering to deliver enhanced outcomes in clinical development. As such, we are reaffirming our previously announced financial outlook for the full year 2023, with revenue guidance in the range of $7,940 - $8,340 million and adjusted earnings per share1 guidance in the range of $12.40 - $13.05.” 

Read the consolidated income statements and summary balance sheet data.

Fourth Quarter 2022 Results

Gross business wins in the quarter were $2,705 million and cancellations were $355 million. This resulted in net business wins of $2,350 million and a book to bill of 1.20.

Revenue for quarter four was $1,962 million. This represents an increase of 4.3% on prior year adjusted revenue or 7.6% on a constant currency organic basis.

GAAP net income attributable to the Group was $117.4 million resulting in $1.42 diluted earnings per share in quarter four 2022 compared to $0.92 diluted earnings per share in quarter four 2021. Adjusted net income¹ attributable to the Group for the quarter was $257.7 million resulting in an adjusted diluted earnings per share1 of $3.13 compared to $2.63 per share in quarter four 2021. 

Adjusted EBITDA¹ for quarter four was $405 million or 20.6% of revenue, a year on year increase of 21.8%.    

Full Year 2022 Results

Gross business wins were $10,991 million and cancellations were $1,542 million. This resulted in net business wins of $9,450 million and a book to bill of 1.22.

Full year revenue was $7,741.4 million. This represents an increase of 41.2% on prior year revenue or 45.4% on a constant currency basis.

GAAP net income attributable to the Group was $505.3 million resulting in GAAP diluted earnings per share of $6.13 for the full year 2022 compared to $2.25 GAAP diluted earnings per share for the full year 2021. Adjusted net income1 attributable to the Group was $968.7 million resulting in an adjusted diluted earnings per share1 of $11.75 compared to $9.65 per share for the equivalent prior year period.

Adjusted EBITDA¹ was $1,479.5 million or 19.1% of revenue, a year on year increase of 52.5%.

Cash generated from operating activities for the year was $563.3 million. During the year, $142.2 million was spent on capital expenditure. At December 31, 2022, the Group had cash and cash equivalents of $288.8 million, compared to cash and cash equivalents of $609.2 million at September 30, 2022 and $752.2 million at December 31, 2021. During the year, $800 million of Term Loan B payments were made resulting in a net indebtedness balance of $4.4 billion at December 31, 2022.  

Other Information

Colin Shannon resigned from the Board of Directors in December 2022, having served as a non-executive director since the completion of the PRA Health Sciences transaction in July 2021. Ciaran Murray, Chairman of the Board, commented, “I would like to thank Colin for his service to ICON, and his support and contribution to the integration of ICON and PRA.”

In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), this press release contains certain non-GAAP financial measures, including adjusted EBITDA, adjusted net income attributable to the Group and adjusted diluted earnings per share attributable to the Group. Adjusted EBITDA, adjusted net income and adjusted diluted earnings per share exclude amortization, stock compensation, foreign exchange gains and losses, restructuring and transaction-related / integration-related adjustments. While non-GAAP financial measures are not superior to or a substitute for the comparable GAAP measures, ICON believes certain non-GAAP information is useful to investors for historical comparison purposes.

ICON will hold a conference call on February 23, 2023 at 08:00 EST [13:00 Ireland & UK].  This call and linked slide presentation can be accessed live from our website at http://investor.iconplc.com.  A recording will also be available on the website for 90 days following the call.  In addition, a calendar of company events, including upcoming conference presentations, is available on our website, under “Investors”.  This calendar will be updated regularly.

This press release contains forward-looking statements, including statements about our financial guidance. These statements are based on management's current expectations and information currently available, including current economic and industry conditions. These statements are not guarantees of future performance or actual results, and actual results, developments and business decisions may differ from those stated in this press release.  The forward-looking statements are subject to future events, risks, uncertainties and other factors that could cause actual results to differ materially from those projected in the statements, including, but not limited to, the ability to enter into new contracts, maintain client relationships, manage the opening of new offices and offering of new services, the integration of new business mergers and acquisitions, the impact of COVID-19 on our business, as well as other economic and global market conditions and other risks and uncertainties detailed from time to time in SEC reports filed by ICON, all of which are difficult to predict and some of which are beyond our control. For these reasons, you should not place undue reliance on these forward-looking statements when making investment decisions. The word "expected" and variations of such words and similar expressions are intended to identify forward-looking statements. Forward-looking statements are only as of the date they are made and we do not undertake any obligation to update publicly any forward-looking statement, either as a result of new information, future events or otherwise. More information about the risks and uncertainties relating to these forward-looking statements may be found in SEC reports filed by ICON, including its Form 20-F, F-1, F-4, S-8, F-3 and certain other reports, which are available on the SEC's website at http://www.sec.gov.

ICON plc is a world-leading healthcare intelligence and clinical research organisation. From molecule to medicine, we advance clinical research providing outsourced services to pharmaceutical, biotechnology, medical device and government and public health organisations. We develop new innovations, drive emerging therapies forward and improve patient lives. With headquarters in Dublin, Ireland, ICON employed approximately 41,100 employees in 111 locations in 53 countries as at December 31, 2022. For further information about ICON, visit: www.iconplc.com.

(1) Refer to “Other Information” for a discussion of the Company’s use of non-GAAP financial measures, and to “Reconciliation of Non-GAAP Measures” for reconciliations of non-GAAP results to applicable GAAP results. Our full-year 2023 guidance adjusted earnings per share measures are provided on a non-GAAP basis because the Company is unable to predict with a reasonable degree of certainty certain items contained in the GAAP measures without unreasonable efforts. For the same reasons, the Company is unable to address the probable significance of the unavailable information.

Source: ICON plc

Contact: Investor Relations +1 888 381 7923 or

Brendan Brennan Chief Financial Officer +353 1 291 2000

Kate Haven Vice President Investor Relations +1 888 381 7923

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