Simon Holmes - EVP, IR & Corporate Development Ciaran Murray - CEO Brendan Brennan - CFO Steven Cutler - COO.

Eric Coldwell - Robert W. Baird Tim Evans - Wells Fargo Securities John Kreger - William Blair Dave Windley - Jefferies Jeff Bailin - Credit Suisse Douglas Tsao - Barclays Robert Jones - Goldman Sachs Steven Valiquette - UBS Todd Van Fleet - First Analysis Donald Hooker - KeyBanc.

Good day and welcome to the ICON Q3 Results Conference Call. (Operator Instructions). At this time I would like to turn the conference over to Mr. Simon Holmes. Please go ahead, sir..

Thank you, Tarlee. Good day ladies and gentlemen thank you for joining on this call for the quarter ended 30th September, 2014. Also on the call today we have our CEO, Ciaran Murray; our CFO, Mr. Brendan Brennan, and COO, Dr. Steven A. Cutler.

I would just like to note that this call is webcast and there are slides available to download on our website to accompany today’s call. Certain statements in today’s call will be forward-looking statements.

Actual results may differ materially from those stated or implied by forward-looking statements due to risks and uncertainties associated with the company’s business and listeners are cautioned that forward-looking statements are not guarantees of future performance.

The company’s filings with the Securities and Exchange Commission discuss the risks and uncertainties associated with the company’s business. This presentation includes selected non-GAAP financial measures.

For a presentation of the most directly comparable GAAP financial measures, please refer to the press release statement headed Consolidated Income Statements unaudited U.S. GAAP.

While non-GAAP financial measures are not superior to or a substitute for the comparable GAAP measures, we believe certain non-GAAP information is more useful to investors for historical comparison purposes.

We will be limiting the call today to one hour and would therefore ask participants to keep their questions to one each with an opportunity to ask one related follow-up question. I would now like to hand over the call to our CFO, Mr. Brendan Brennan..

Thank you Simon. Net revenue in Quarter 3, 2014 was $388 million. This represents year-on-year growth of 14.1%. On a constant dollar organic basis year-on-year revenue growth was 7%. Year-to-date our top client represented 21% of revenue compared to 25% in the comparable period last year. Our Top 5 clients represented 52% compared to 53% last year.

Our Top 10 clients represented 64% compared to 65% last year and our Top 25 clients represented 79% compared to 79% again last year.

Consistent trend of gross margin expansion that we have driven over the past number of years continued in Q3, group gross margin for the quarter was 40.7% which compared to 39.6% in Q2 of ’14 and 37.1% in the comparable quarter last year. We continue to achieve good head count leverage and we ended the quarter with approximately 10,700 staff.

SG&A for the quarter was 21.8% of revenue compared to 23.3% last quarter. This includes a foreign exchange revaluation gain that had a positive 100 bps, excluding this gain our run-rate SG&A was 22.8% which in-line with our expectation for the remainder of the year. Operating income for the quarter was $59.4 million and operating a margin of 15.3%.

Again excluding the revaluation gain, our operating margin was 14.3% compared to 12.8% in Q2 and 9.8% in the comparable quarter last year. The net interest income for the quarter was a $109,000 and the effective tax rate was 15.5%.

Net income for the quarter was $50.4 million, a margin of 13% equated to earnings per share of $0.79 which compared to earnings per share of $0.64 in Q2 and $0.45 in the comparable quarter last year. Earnings per share excluding the revaluation gain that I mentioned in the quarter were $0.74.

DSOs in the quarter were 38 days compared to 40 days which was achieved in both Q2 and the comparable quarter last year. At the end of September 2014 we had net cash of $249 million compared to a $175 million at the end of March of this year. And with all that said I would like to hand over to Ciaran..

Thank you Brendan and good day everyone. I'm pleased that in Q3 we have continued the good progress we have made in the first half of 2014. Gross bookings for the quarter were 504 million, cancellations were 36 million and this resulted in net bookings of $468 million which is a net book-to-bill of 1.21.

These business wins now mean that our backlog stands at over $3.5 billion, a 19% increase compared to this time last year. The business wins in the quarter reflects a continuing healthy levels of demand that we’re seeing across all market segments.

With outsourcing penetration increasing and customer seeking partners with a broad capabilities and scale to manage global programs, we believe that ICON is well-positioned to capitalize in these market opportunity.

We have continued to make progress in improving our gross margin which increased 40.7% in the quarter while reducing our SG&A costs to 21.8% of revenue.

All of this resulted in an operating margin of 15.3% in quarter, and as a result of the strong margin performance in the quarter and the recent strength of the dollar over the euro we’re updating our full year guidance for 2014.

Revenue will be in the range of $1.495 billion to $1.515 billion and we’re increasing full year EPS guidance from a range of $2.62 to $2.68 to a new range of $2.74 to $2.79. During the course of this year we have deployed a considerable amount of cash.

In Q2 we acquired Aptiv Solutions for a $143.5 million and during Q3 we completed an initial $40 million share buyback following that in September we announced a further share buyback of upto 100 million and to-date we have repurchased shares worth $42 million of that amount.

We’re always looking for ways to enhance the range and depth of our services and to ensure that we have innovative technology and solutions in order that we can assist our customers to further improve efficiency and productivity of the development effort.

So we will continue to pursue our successful M&A strategy of bolt on acquisitions to add to our capabilities as we move forward. We will also keep all capital deployment options under view to ensure that our balance sheet is best used to drive long term shareholder value.

Before I move to our Q&A I would like to thank the whole ICON team for their hard work and commitment that has contributed to our Q3 performance. We’re now ready for questions..

(Operator Instructions). We will now take our first question from Eric Coldwell of Robert W. Baird. Please go ahead..

I just have a couple of quick questions. First off on the head count we noticed or it looked like it was actually down a little bit year-over-year or a period-to-period if I'm not mistaken.

I'm just curious was there anything -- was there anything unusual in that number in terms of perhaps a small riff or something related to the recent acquisition or certain geography or service areas, is there anything you can point to on that head count leverage that you mentioned..

I would point to two things, some of it is related to the recent acquisition and as we integrate the companies we’re eliminating areas of duplication so there is some synergies coming through that and some of it just ongoing efficiency and improving our productivity and centralizing some of our central support services and our global business model..

You had mentioned earlier this year that there had actually been some new strategic deal activity and that you’ve been successful at least in a couple of engagements although certainly not named accounts but at one point I was under the impression that perhaps we could see some growth from one of those newer wins later this year.

I'm curious if you’ve had any success in either bookings or revenue with one of those newer strategic relationships or if that’s still something that really is on the comments we go into the fourth quarter and into next year..

Eric, I think at the time when we talked about it we felt that it was something would most likely come next year and it will be next year before we start to see any significant bookings or revenue flow from those events. We’re working through them in building the relationships and it's going the way it should go at this stage.

It always takes time in our experience to do these things..

But still targeting perhaps a start early in the year or any change in that schedule?.

I could say that preciously whether it will be early in the year, the (indiscernible) for these things is you reach agreement on terms and then you know a consent planning and when people want to do the work and exactly how their pipeline and their own scheduling goes.

So, there is no clear kind of cut-off or through what we did [ph] in this kind of thing, it will depend on what studies people want to do. It's that part of the year where our customers tend to be going through their budget cycle and prioritization of projects and things that they want to do next year.

So we know that the work will start to flow on the back (indiscernible) just the timing is always uncertain but that’s not new for us, so it doesn’t cause any issue..

Thank you. We will now take our next question from Tim Evans of Wells Fargo Securities. Please go ahead..

Can we assume that you plan to use the share authorization, the share buyback authorization, it's not just kind of an opportunistic place holder in another words?.

Well given that we only announced it short time ago and we have already used 42% of it and that really means that we have been buying this prudently as to counter the market. And yes you can assume that we’re going to use it, we’re in the middle of the program. We go into the market and buyback when it's right.

Obviously, we have certain restrictions and we’re prudent about how we do it because we don’t want to move market prices or do anything like that. So, it has progressed and since we have announced that there has hardly been a day when we haven't bought some level of stock at some price. So yes that’s why it's there..

And one along just on the longer term picture, your revenue growth this year saw in the kind of the 7% range which I guess I kind of view as kind of the middle of industry growth range.

Should we expect that to accelerate at all or you just in the long term or should we kind of be thinking of this as the normalized growth rate going forward?.

It depends how much business we win, Tim. I can't think -- our recent commentary we have tend to say and looking at our direct competitors that growth is in that kind of mid to high-single digits range.

I think if you look at our last few quarters and strip out the impact of acquisitions and foreign exchange this is sort of a CDO 7% growth coming from, and looking at our backlog, current level of business wins -- they are trailing 12 months book-to-bill.

That kind of feels about right, but of course we do have a history of making bolt on acquisitions. We’re seeing that roles of consolidation of smaller companies in the sector and bigger companies adding services ranges in that.

So I think that kind of feels like the right growth rate, it will be adjusted to some extent and depended on where the dollar exchange rate goes over the next year. Yes but it feels right and then as we have done in the past we will probably pump it up a little bit by continuing our bolt on acquisition strategy as I said in the commentary..

Thank you. We will now take our next question from John Kreger of William Blair. Please go ahead..

Ciaran you just mentioned FX, could you maybe just expand a little bit on how the strengthening dollar will sort of flow through your P&L and impact numbers potentially in the next couple of quarters?.

Well the strengthen in dollar tends to impact our revenue and more than it does in earnings generally.

And we’re fairly well-hedged at a cost revenue earnings level, so we tend to find is -- as the dollar strengthens it doesn’t really impact on the bottom line, but what it does do is that the Euro revenue stream that we have which in our business is traditionally around 40% of our total revenue and directly at the times you have seen at 50%.

So it depends in the point in time, so it's variable there. But as the dollar strengthens those euros turn into less dollars in revenue. So, we have seen -- we have tightened our guidance range to reflect that in Q4. I think there is an impact of about 5 million which represented the move from the kind of 134 bps to probably 127 at the current level.

So it's often our top line growth by a 100 or 200 bps depending on the exact quantum of the Forex movement and the exact Quantum of how our dollar-euro revenue split but generally it doesn’t have a significant impact on EPS.

This year we picked up some onetime benefits on the EPS, it was just technical accounting by retranslating various period end balances on the balance sheet and the difference that flows through the P&L but those kind of variances are -- don’t happen that often and they are rarely that significant..

Just one other question, if you think about your new business wins in this quarter, maybe the last quarter also.

Any observations about any sort of changes in business mix as we think about the next year or two either in terms of client type or geography?.

Yes some encouraging signs over the last couple of quarters for us and some of our larger accounts are maturing, so they haven't been contributing quite the same amount to the new business as they might have done say this time last year earlier in the year.

And despite that we’re still posting good healthy numbers because we have sort of expanded our customer base a bit and we have -- a few new segments that we targeted over the last year or two that are starting to come to fruition.

We have probably higher percentage of our wins now from the kind of biotech, mid-sized, small pharma segments than we did a year ago.

Our business wins probably are splitting about 55ish% large pharmas, the balanced biotech, small pharma, whereas if you went back 12 months or more that could have been 65:35 or even 70:30 at some points in time, you know we saw 70:30.

So some good trends in broadening the customer base and moving into new segments, that encourages but nothing particularly on the geographic side that hasn’t changed significantly over the past year..

Thank you. We will now take our next question from Dave Windley of Jefferies. Please go ahead..

Brennan you had talked earlier in the year about wanting to dive deeper into the Aptiv backlog that you are inheriting and get a sense for kind of quality invisibility of that. I think you’ve progressively become more comfortable.

I just wanted to get an update on that how does that look? How does it affect burn-rate and maybe also without breaking it out just how has the addition of Aptiv influenced your pipeline and bookings traction?.

Yes you are right, I mean we were going to I supposed we brought in that acquisition last quarter and we were getting our heads around the backlog at that stage. I think we’re pretty happy with you know it's burning [ph] well -- it's in-line with our expectation this quarter.

You know it's not a relatively small piece of the pie, I think we have brought in about $200 million and $3.5 billion backlog. So it doesn’t really move conversion usually, Dave. But I think we have seen that without a coverage on the back of kind of 75% now over the last couple of quarters.

So I'm happy that we’re kind of -- it's in the right range now and it's betting down well. I actually might ask you to comment on how our customers are receiving that as a platform..

I think Dave; we’re seeing a lot of interest from customers particularly around the adaptive trial space. Its watch worth [ph] the industry at the moment in terms of helping customers to make sure they plan their trials and get the best results out of the trials. So the adaptive stuff we’re getting a lot of traction with.

Although I would have to say, we haven't had a huge number of significant wins. There is always a burn (indiscernible), there is a sort of lead time with sort of stuff but a lot of interest in that and the areas -- the device area, we’re seeing some interest -- a lot of interest -- working to develop that part of our business as well.

So I think it has certainly bought a lot of -- a number of areas to us that we feel good about and it's really supporting our business development strategy..

Super. And if I can follow-up and just clarify one thing, Ciaran you had talked about some of the larger accounts maturing. One of the competitors as it has seen it's very large accounts mature, the backlog burn rate has risen fairly steadily. You guys have said 11 to 11.5, and that’s in fact where it was.

I guess I'm wondering is there an opportunity for that burn rate to rise as these larger accounts are maturing and those studies are getting into kind of their meaty [ph] revenue recognition stage?.

I suppose the short answer Dave is no, no, I don’t see that based on the composition of our backlog.

We do fairly detailed -- very detailed analysis and forecast at a project level and when we talk of the accounts maturing, I suppose we talk about reaching steady straight levels of business which is constantly replenished by new trials which you start-up all over again and then I'm understanding the vagaries of therapies you’re working in and how long studies are and the complexity.

So I don’t foresee it at this stage any uplift in our burn rate..

Our next question comes from Jeff Bailin of Credit Suisse. Please go ahead..

Just a follow-up Ciaran on the point you made about some of the maturation with some of the larger clients, I guess could you give any commentary on what's driven assuming strengthen that your top client year-to-date, are they just seemingly outsourcing or accelerating their pipeline or are there maybe any market share things going on there and then if you look at clients 2 through 5 what might be happening if those -- the revenues there seem to be down a little bit year-over-year..

Jeff, we don’t talk about specifics -- it matters on the call, so from our perspective it's really just a question of math. Our top clients have been busy and there is a lot of project activity going through the pipeline for where it is and we’re on-boarding the work of doing it.

Beneath that as you find with all clients, there are just various timing issues but when certain project is scheduled where the pipeline is in any point in time. So there is nothing significant there our level of activity just reflects our client decisions on the investment and prioritization and how the work flows through.

So there is not really any color I can give you beyond that..

And maybe just one quick follow-up, you know with several clinical CRO peers publically filing for some IPOs.

Is there anything that you’re noticing in terms of changing competitive behavior in the markets or anything around the pricing environment?.

No there is nothing that we have noticed..

Our next question comes from Douglas Tsao of Barclays. Please go ahead..

Ciaran, could you perhaps provide a comment in terms of the revenue performance as well as the margin performance in the central lab business right now?.

We anticipated that -- I don’t back in another time, it seems like at this stage and the logic behind the integration was to pull it much closer to business and to make it part of our integrated service and be able to cross allied [ph] and integrate the data between labs and clinical trials.

So we don’t really measure that precisely, at that level but at that level we look at our revenues healthy and it's profitability is better that has ever been before because we are seeing some of the benefits of the rationale behind that integration. So it's pretty small amount of our total revenue in any quarter.

So it doesn’t really move the needle but we’re happy with what we have done and we’re happy with what the results that the lab is doing, albeit, the revenue level is certainly not super precise at their contribution level. We’re happy with what they are doing..

Okay and then you provide a little commentary and I know it's a challenge because you don’t necessarily breakout exactly the possibility of each individual study but when you think about the relative contribution that you could get from some of the smaller companies which has become an increasing focus for your business development and on a go-forward basis and your growth on a go-forward basis.

Do you find that work with those clients is as profitable with the big companies or more profitable? You know just given the kinds of types of mix of services you’re looking for; any details you can provide there would be appreciated..

I suppose all I would say is all of our clients are equally important to us, Doug. If you like choosing between your children, you know so we try and have a very even-handed pricing model and we have long established relationships with the clients that are built in that kind of trust.

So our costing and pricing model is really based on quantifying a better work and seeing how much work goes into that in terms of time and materials and placing it that way so there is no fundamental reason why pricing will be different.

What you might tend to see is with certain larger projects there will be inherent efficiencies to that project just due to the fact that you know it might go longer, you have more visibility, your resources can be deployed a little bit but that isn't really changing the pricing, that’s just productivity and efficiency.

So I would say at a kind of a pricing mix level, there is no real difference but there is uncertain scaled projects you can get certain economies of scale this flow through but that’s more dense [ph] to size and the scope of the project rather than the customer. So to us it's pretty much equal across the Board..

Our next question comes from Robert Jones of Goldman Sachs..

I just wanted to go back Brendan to the comment you made around SG&A and the benefit I think you said it was about 100 basis points. If I take that out and look at the operating margin, there is still a very healthy somewhere around 14% you know especially relative to your long term guidance range.

It would seem that the progression even ex-that item is still coming mostly from SG&A leverage.

I was wondering if you guys just talk about if the 14% is the right starting point as we look at '14, as we look at 4Q I should say in 2015 and then maybe if you could just share a little bit more about the trajectory and drivers of getting deeper into that long term range that would be helpful for us..

I talked about this in some detail on the last earnings call so I will take this question. And because I'm going to say to you exactly the same thing that we had told in the last earnings call. Yes the underlying margin this quarter was about 14.3% FX benefit.

In the last call we said our guidance implied that we would exit the year in about 14% hence we said 14% to 16% would be our sort of medium term or longer term ambition for the margin.

We have arrived at a 14% little bit earlier than we perhaps expected this quarter due to better operational efficiency substantially and some SG&A control and so it is a starting point for next year but I would say pretty we’re holding to the fact that that our margin will be in that 14% to 16% range next year.

And we have looked at it only a quarter ago; there is nothing fundamental that has happened to change that. Trajectory wise, you know start of '14 and I would point to our progress over the last couple of years of very gradual enhancement of the margin based on sort of fundamental changes in the way we do things.

It's upon the technology, our managers perform very well and their skillsets and the focus and just the way we have organized the business. So nothing has changed there. So, and I think you have said that so far the margin growth come from SG&A.

I wouldn’t say you’re actually characterizing that correctly, I don’t know the numbers exactly in front of me but I would say if you go back to a point in time, 2 or 3 years ago, probably half of the margin growth has come from SG&A and the other half has come from improvement in gross margin which we saw back up upto 40.7% and this quarter as I can recall it, you know at the end of say 35%, they are about in Q4, 2011.

So what we have seen is a mixture of cost control on SG&A and improved productivity and gross margin arising from the way we run and organ size and manage the business. That’s the going to continue to yield incremental improvements hence our kind of longer term range.

But margin won't grow forever and we have made a lot of progress in the last three years, so we will see it has continued to increase in that range but increase at a lower rate than it did in the past.

Obviously we went from sort of zero to 14 over the last three years, and now we’re saying we are going to 14 to 16 range over the next year or a year or so..

And then I just sticking with the theme of asking questions you get repeatedly, if I look at the balance sheet of about 250 million net cash, you know understanding you know you guys have been active with the buyback, you obviously have been active with bolt ons.

You know I guess just curious again if there is any update you know why not get a little bit more aggressive on the deployment front, maybe on the leverage front. You certainly have the capacity it would appear to do so..

Hope I can show you friend of the bankers [ph], why not? The answer is we believe that we have gotten very sustainable shareholder value and progress over the last number of years (indiscernible) strategy and that’s to add long term sustainable growth through the improvement of our capabilities and our services.

So yes I’ve said before we’re not adverse to leverage but not leverage for leverage's sake you know -- 250 million of balance sheet isn't a lot of money in a business this size and you can see our last acquisition cost is a $150 million.

We have an appetitive to continue that, that was the most we would ever spent on an acquisition in our history and looking at where we’re in the market the capabilities you want to add where the opportunities are. I would imagine it's not the last time we will spend money of that order if not more.

So we’re still pretty active, we think there is opportunity in the market and the industry is still in a good place where outsourcing, penetration is increasing, our customer demands are evolving and changing. We have to constantly refresh and build an organization that’s fit for purpose today and not last year or the year before.

So while we have done a lot of work over the last few years it's a never ending story. So we just think we will drive more value by continuing to add to our capability which will make us a very attractive Top Tier CRO. We prefer to do that historically as we have done -- as we have always done and we prefer to do it by generating cash.

I think we have bought back 40 million of shares from the initial buyback scheme this year. We have already executed a further 42 million on the $100 million authorization. I imagine that will be finished sometime before the end of the year at the current rate that we’re buying. At that point as I said, we will be looking at it.

We want to drive long term shareholder value and we will do whatever you think is sustainable and is in-line with our kind of values and culture that we have always displayed in the past that have kind of worked this far, so I'm reluctant to mess with them too much..

Ladies and gentlemen our next question comes from Steven Valiquette of UBS. Please go ahead..

So really for me I guess just a quick follow-up question, first on the currency exposure. I know you mentioned that shifts in the U.S.

dollar don’t really impact your bottom-line that much which is obviously encouraging but if I'm reading your 20-F filing correctly, the last one just over the past few years it looks like overall currency translation, like it hurt your net income by $11 million in 2011 and it hurt your net income by 4 million or 5 million in 2012 and hurt by another 10 million or 11 million last year in 2013 and looks like unfortunately these net income impact numbers are not provided in the quarterly 6-Ks but just for that line that you disclosed, the "currency translation" adjustment to net income and I guess is there any update on the approximate number for that so far here in 2014 through the first nine months?.

Steve, it's a fairly technical question. So I might back offline to get some kind of deeper down into the weeds on what line you’re looking at in the 20-F on an annual basis.

The revaluation impact that we talked about this quarter was a big enough number, the 100 bps as we said, as Ciaran said and I said in the prepared remarks and that’s why we specifically called that out. Generally that line doesn’t bounce about too much.

It's a $100,000 this way or the other but it doesn’t move around a lot and so we specifically hold it out this quarter because it was -- it had moved a bit more significantly and that’s really just as we said the revaluation of those third party exposures and the balance sheet that are in a different underlying currency.

That’s just a part of life I suppose and we account for it in a normal way within the SG&A line. I know some of our peers split that out separately and we’re pretty sure we’re in-line with GAAP on this one. So we’re happy with -- the quantum's that you’re talking about 10 million - 11 million on an annual basis don’t sound right to me.

So I might just take all hand. I wouldn’t have thought that we were more than that. Over the course of the year maybe a $1 million, you know maybe but in our previous but those quantum seem a bit out of wax. So I will come back to you separately on that one that would be my initial reaction..

Okay, I’ve a follow-up. There is definitely different net income impact versus balance sheet impact so we will do that offline; it's obviously easier that way.

Then the other just quick one for you though for your sales mix with your largest customer, that somebody mentioned earlier obviously it has gone up here a little bit, it was 28% back in June and now you’re disclosing 31% year-to-date through September which obviously implies an even bigger number you know 3Q in isolation but really just my question around that is just simply is that a fairly apples-to-apples comparison or does currency impact that in any material way.

I just want to see if that’s sort of a clean comparison as we try to look at that quarter-over-quarter..

It's a clean comparison Steve..

Thank you. Our next question comes from Todd Van Fleet of First Analysis..

Just high level thinking here, is there any -- what's on the minds of your customers these days. I mean is there any shift over the past several quarters, or are they thinking more about reimbursement environments and how that’s going to impact their pipeline and the development process.

Just kind of looking for maybe some higher level industry topics that might affect how you guys are thinking about the business you know over the next 12 to 24 months? Thanks..

No it's pretty much the same old Todd in the space that we work with our clients. The job is to execute high quality clinical trials, doing as fast as we can, highest quality that we can, good value you know, mind the budget, mind the cost.

And you know if trials aren't working well we get good data which helps our customers to collect quickly and maximize their return on investment. So that’s what we do..

Our next question comes from Donald Hooker of KeyBanc. Please go ahead..

So somebody asked a question earlier about the central lab and I know you seem to be downplaying that but I'm just thinking, can you maybe just talk a little bit more about that business model and so far that I would assume there is a lot of incremental drop-through as you’re growing revenues from a couple of years back when you were reporting it separately and I would assume that incremental margin is pretty high.

I'm incorrect in assuming that?.

It depends on your volume.

I mean the lab account to what 5% or 6% of our revenue?.

Just over 6%..

Over 6%, so even if it does have high incremental margin it doesn’t really have much scope to the overall needle. It's got more fixed cost in the lab than say the core let's call it clinical business. So obviously there is a marginal cost and impact that you can observe overheads further when you get incremental revenue.

But it's too small to move the EPS needle for the group..

I just have one last quick one, the cancellations are obviously really low and I know there is a lot of randomness in that but I can't help notice that for several years it seems to be a pretty steady downward trend in cancellation rates and can you maybe talk about that because you’ve mentioned sort of some of the new adaptive clinical trial technologies you’ve and maybe that’s impacting or is there something else?.

I would love to think so Donald, I really would, we would love to think we can get a handle on this and somewhat control. I don’t know what few years you’re looking at but I still in my memory, there is some (indiscernible) translations in the last sort of four or six or eight quarters.

They seem like yesterday; maybe we will remember the bad ones more vividly and don’t remember the good ones. So no I don’t see any change based on our data on the long term cancellation rate. We’re happy that this quarter was lighter but we will be very fool hardy or brave indeed to say that’s a start of a trend..

Our final question comes from Tycho Peterson of JPMorgan. Please go ahead..

This is Jordan on for Tycho.

Lot of good questions were already have been answered, I was just wondering if you could talk about Aptiv and if you’ve seen or how well you’ve seen their ability to kind of cross sell some of your significant client base and then also maybe if you could just talk about the role of risk-based monitoring in terms of margin expansion. Thanks..

I think as I’ve said before we have been able to present to our customers a number of the options that Aptiv bring us in terms of adaptive drug, devices, experience in regulatory, medical etcetera.

Well a lot of interest there and it's an ongoing discussion, as I’ve said I wouldn’t say we have won a huge amount of business because of it at this stage but it's an area that we’re engaging in from -- both from a strategic and a tactical level. So the Aptiv folks that come on-board they are contributing well.

We have integrated them I think nicely within our businesses, within our alliance management group, within our business development group. And the story they are telling and the story that as it integrates with ICON's largest scale is a good one and the one that our customers are I think being very receptive to.

So we expect over the next realistically 12 months that we will really get some traction in that area. Now your second question have gone over my head. Yes, risk-based monitoring, and again it's -- we work in a conservative industry. So there is a lot of interest, there is a lot of discussion.

There is a lot of talk about it and we’re seeing a number of projects moving forward in that way. You know we think the margins in that area are potentially fed-up but that’s yet to be proven. Those studies are really just starting out and we’re fairly early in the whole process.

We would probably got around the dozen studies in that -- however they tend to be our largest studies and as Ciaran said those tend to be our better margin studies anyway. So it's certainly a potential for us to help to continue our margin expansion as we get more and more into risk-based monitoring.

We see that process allowing our customers to do more trials, to deploy their capital on more trials, to be more efficient, to get more productive. So it's clearly a focus for us and it's something that we feel we’re in a good place at the moment..

I would now like to turn the call back over to Mr. Ciaran Murray for any additional or closing remarks..

Okay, we’re pleased with our continued progress in Q3 and we’re looking forward to keeping working hard for the remainder of the year and keeping and positioning ICON as a global partner of choice for the CRO industry. So thank you very much everyone for tuning in today..

That will conclude today's conference call. Thank you for your participation ladies and gentlemen. You may now disconnect..