Jonathan Curtain - IR Brendan Brennan - CFO Steven Cutler - CEO and Director Ciaran Murray - Executive Chairman.

Ross Muken - Evercore ISI Jack Meehan - Barclays PLC Tycho Peterson - JPMorgan Chase & Co. Donald Hooker - KeyBanc Capital Markets Inc. Erin Wright - Credit Suisse AG David Windley - Jefferies LLC Tim Evans - Wells Fargo Securities Adam Noble - Goldman Sachs Group Inc. John Kreger - William Blair & Company LLC.

Welcome to the ICON plc Quarter 2 2017 Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Jonathan Curtain. Please go ahead, sir..

Thank you, Lynn. Good day, ladies and gentlemen. Thank you for joining us on this call covering the quarter ended June 30, 2017. Also on the call today, we have our CEO, Dr. Steve Cutler; and our CFO, Mr. Brendan Brennan.

I would like to note that this call is webcast and that 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 discusses 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'll be limiting the call today to 1 hour. [Operator Instructions] I would now like to hand over the call to our CFO, Mr. Brendan Brennan..

Thank you, Jonathan. In quarter 2, we achieved gross business awards of $649 million and incurred $86 million of cancellations. As a result, net awards for the quarter were $563 million and net book-to-bill of 1.31x. Net revenue in quarter 2 was $421 million. This represents year-on-year growth of 5% or 6% on a constant currency basis.

On a constant dollar organic basis, year-on-year revenue growth was 2.6%. Our client concentration continued to improve in the quarter with our top client representing 19.9% of revenue compared to 28% last year. Our top 5 clients represented 42% compared to 46% last year.

Our top-10 represented 54% compared to 59% last year, while our top-25 clients represented 72% compared to 77% last year. This continued diversification of our cost investment that outside our top account revenue grew 17% year-on-year. Group gross margin for the quarter was 42% in line with quarter 1 and same quarter last year.

We continue to leverage our global business support model and as a result, SG&A was 18.8% of revenue in the quarter, as compared to 18.8% last quarter and 19.5% in the comparable period last year. Operating income for the quarter before nonrecurring charges was $85.8 million and operating margin of 19.9%.

This compared to 19.8% last quarter and 19% in comparable quarter last year. The net interest expense for the quarter was $2.6 million and the effective tax rate was 14%. Net income for the quarter was $71.5 million before nonrecurring charges, a margin of 16.6%, equating to diluted earnings per share of $1.31.

This compares to earnings per share of $1.29 last quarter and $1.14 in comparable quarter last year, an increase of 15%. DSOs in the quarter were 53 days which compared to 47 days last quarter and 46 days in the comparable quarter last year.

Cash generated from operating activities for the quarter was $9.1 million and capital expenditures was $6.9 million. During the quarter, we spent $11.7 million on share repurchases. At June 30, 2017, the company had net debt of $24 million compared to net debt of $97 million at June 30, 2016 and net debt of $30 million at the end of March 2017.

During the quarter, we also took a restructuring charge of $7.8 million, as we continue to improve the efficiency of our operating model. This restructuring plan reflected rationalization across the business to improve resource utilization. With all that said, I'd now like to hand the call over to Steve..

Thank you, Brendan. Quarter 2 was another strong quarter for ICON with a number of very positive trends continuing. We continue to see healthy levels of demand in market, as customers across all the market segments looked to outsource more of their development work to ICON.

We made progress on our go to develop our strategic customer alliances and as a result of this and a strong performance by our BD and operations teams, quarter 2 net business wins were a record $563 million, representing a net book-to-bill of 1.31x. We also grew our backlog by 10% year-on-year.

Particularly pleasing is the continuing strength of our business wins outside of our top-revenue customer which are a trailing 12-month basis have a book-to-bill of 1.44x. Net revenue grew by 5% year-over-year and over the same period, revenues outside of our top account grew by 17%.

Consequently, revenue from our top customer reduced to less than 20% in the quarter for the first time since quarter 2, 2012. Further, backlog concentration for the same customer is now around 11%. Hence, we expect revenue concentration to reduce moving forward, as we continue to grow and diversify our customer base.

We remain focused on operational efficiency by leveraging our global business support model and made further good progress in this area during the quarter. As a result, our operating margin increased to 19.9% from 19% this time last year.

Through this combination of revenue growth and margin improvement, our earnings per share grew from $1.14 to $1.31, an increase of 15% year-over-year.

We continue to strengthen and broaden our service capabilities and today, I am delighted to announce the acquisition of the MAPI Group, a leading health outcomes, research and commercialization company.

With over 700 employees in 12 countries, MAPI has over 40 years of experience in helping biopharma and medical device companies to gain maximum value from their drugs and devices.

The late phase market is valued at around $10 billion and it's projected to grow at something like 10% per annum over the next 3 years, as customers face greater scrutiny by regulators and reimbursement bodies around the product value and safety.

Our new combined late phase group will have in excess of 1,400 professionals operating throughout our global network and will significantly enhance our key offerings in real-world evidence, health economics and market access, language services and strategic regulatory services.

The additional scale and capabilities means that ICON will be the world's second-largest provider of late-phase solutions. This acquisition is part of our continuing string of strategy that focuses on improving our market position in key segments.

However, we will remain opportunistic, when an asset meets our criteria delivering increased shareholder value and improved solutions to customers. We continue to advance the use of innovative data and technology solutions that will take time and cost out of clinical development.

During the quarter, we were awarded a number of projects with large pharma customers, focused on the collection and management of patient data using wearables and other mobile devices. We're also accessing the growing set of pacing data to our collaborations with EHR4CR and TriNetX.

And we're utilizing this data to enhance the trial process particularly around feasibility and site selection. The combination of our having access to electronic health records as well as associated site networks enabled us to identify specific patient populations that are eligible for our trials.

Through our acquisition of the PMG Network, we have seen the and if it's of this model. Importantly, these patients are already connected to the physician and health practice which announces recruitment base. While the effective tax rate for the quarter 2 was 14%, we estimate that our full year tax rate will be 12%.

And as a result of this and the acquisition of MAPI, our full year guidance is being updated with earnings to be in the range of $5.18 to $5.38 and revenue to be in the range of $1.74 billion to $1.77 billion. Before moving to Q&A, I'd like to thank the entire ICON team for all their hard work and commitment during the quarter.

In particular, I'd like to congratulate the FIRECREST team, who recently won the e-Learning and digital animation award at the recent International Awards. And the ICON and teams, who won best partnership in clinical research award from Pharma Times. Thank you, everyone. And we're now ready for questions..

[Operator Instructions]. And we will now take our first question from Ross Muken from Evercore ISI..

So I guess, maybe first on the strategic front. So help us sort of understand in your mind, obviously, you did another tuck-in deal today. And historically certainly been the strategy.

Help us understand, what a larger transaction which sort of halve to bring to table in your review to make that something that would be interesting and something that certainly would add value to the business and balance the risks?.

Hi, Ross. It's Steve. I think the larger transaction, I think I mentioned on my prepared remarks, it will need to bring significant shareholder value. It would need to bring solutions and better solutions to our customers and potentially growth opportunities to our employees.

We remain, as I said, opportunistic about larger transactions, that certainly something that I'm and the team here are happy to look at and review look at. However, our core strategies really around, as I but we look at all the opportunities that come to the market. We assess them the criteria that we have and we make a judgment on those criteria..

It's helpful. And maybe today, obviously, large pharma company and Astra had some pretty mix data on domestic studies. There's been a lot of volatility in the I was space which is clearly pretty important in general, for the pharma companies.

Help us understand, when the sort of events happen, obviously whether you have exposure are not greater applications across the category. Help us understand how that sort of translates their business, because obviously, we went through period of more elevated cancellations, we're coming out of that.

That can cause associativity again are was that more sponsor and pharma specific in some of the cases?.

I haven't caught up the specific result that AstraZeneca came out. But I understand they have failed. There has been a failure on there in terms of the drugs. I haven't bought a specific example or the specific information on time, I would really beside we have very limited exposure to that particular situation.

And I don't see that the failure of the issues with 1 particular compound is going to necessarily set off a class cancellation or impact across the business. These areas are complex.

The way oncology is treated these days is typical in combination with number of drugs that inhibitors are and important classroom in oncology certainly going through the revolution, not an evolution. And there is a lot of work being done. And we're doing significant work in that area.

But I don't certainly see the challenges with 1 particular compound necessarily impacting the whole class. This is much broader than 1 particular class of compounds..

We will now take our next question from Jack Meehan from Barclays..

Wanted to follow-up on the MAPI acquisition. Congrats there. I think I caught 1,400 professionals. Can you just from a revenue perspective, give us the size there? And great to see you continue to broaden the offering.

Is the scenario that you would like to continue adding to in terms of tuck-in M&A?.

Yes. Thanks, Jack. The quarter brings to us a number of areas, I think I mentioned, particularly around the real-world evidence data analytics around real-world evidence. And that's where the bulk of the people are. However, they have a significant chunk of their business in the strategic regulatory space which complements very nicely with what we have.

And we have a language services group. They have language services group, but that is a market that's growing as well. So we feel good about bringing in a team of professionals and experts that MAPI represents going forward. That brings us to #2 in the market.

They really fill us out in Europe, particularly, where we don't have quite the footprint that we do in the U.S. from a data point of view. So as we come together, we have a really strong global group around these key areas. And so, it's an area that we feel, as I said, very good about. We have, an integration process being planned.

We have brought people in that. We have potential agreements in place with their key executives. So it's a process we've been planning for some time, where we believe we get some complementarity on the customer base as well.

There's not a lot of overlap certainly in terms of the work that they have been doing with their customers and what we have been doing in likewise, space with our customers. So we feel there is some nice connections there with some large pharma customers in the late phase space. And so it's an area that we're extremely interested in growing.

We will be #2 in the market. We certainly have the #1 segment - #1 company in the market in our sights. They are not that far ahead, as we understand the market led by there. And this late-phase market is as I said, a growing market. 1 I think that can actually grow very significantly going forward. So we think it is lots of opportunity.

There's good growth. We have a strong offering now. And we're looking forward to really moving making that work very well..

And Jack, if I just add 1 clarification to your earlier comment there. Our combined organization will have 1,400 people. So the MAPI organization are bringing about 700 of those into the organization..

Great, that's really helpful. And then, just wanted to follow-up on the top client. Obviously, you're working through the ramp down of PCSK9 through the end of the year. But it's little early to give 2018 look. But could you maybe can you talk about new work there. Is it perhaps that you're 1 of the few members of strategic partnership.

You talk about the commitment to that.

You could actually see that return to growth in 2018 in your mind from a revenue prospective?.

From revenue perspective, I doubt it will grow in 2018, Jack. I think we've been on little bit of ramp down, as you know, on the top customer. We expect that will probably continue, that's not quite as fast in 2017, but we'll reach our steady state, I think as we come out back end of this year at a sensible level.

And the new business wins that we've had over the last 12 months from that customer kind of reflect that steady-state at roundabout, what we will exit the fourth quarter at. So we feel good about our relationship with that customer. We're 1 of very small number. We have a good with them. We work very well with them.

And they've indicated that they're comfortable and happy with the partnership as it stands. So we believe we're in good place with them. Obviously, the work we're doing has reduced over the last couple of years. I think that's certainly has been a strategic point that they want to implement and we've been happy to move along that path.

But we have some significant trials with them. The continue to win work from them, but we think it will flatten out at the back of the year, say the exit level for 2017..

We will now have our next question from Tyco Peterson from JPMorgan..

Obviously, lot of moving dynamics in this space right now, as multiple mergers in process are set to take place. Just wondering to the degree to which this disruptions kind of open up the door to newer customers for you guys may be having done a lot of work with.

Can you talk to a degree maybe share some business market and the degree with which your engagement with customers that you hadn't before?.

Yes, we ask ourselves that question too, Tyco fairly regularly. If I think I just look at the lab space, our lab business has benefited from the consolidation in the lab, in that space over the last couple of years.

So I don't think it's reasonable to hypothesize that we could have some benefits from the clinical and the larger mergers that are happening. However, - and I think the evidence we have is from our connection with customers from the customers you're talking to now in terms of new work and from new work that we brought into the backlog.

We feel we're in good place there. I don't think it's all because of some disruption on consolidation of market, there may be a factor there. I do think it actually probably be more because we have invested in and ramped up our business development organization.

We've brought in some good people, the people, who are in that business are also performing extremely well. And that combining very well with our operation.

So we've taken a view that we're focusing in on the largest part of the market around and we've doubled down in particularly in our large pharma space, while we continue to win business in the midsize and small biotech. We see solid uptake in terms of the RFP dollars that are coming through to us.

And so I would like to thing, it's more our performance and our effort and our investment in the space in winning business as it is anything external..

And anything different on the pricing front, you can call out. We've heard a little bit more about competitors experiment with fixed-price deals being on look for time cost that are kind of inherent in a fixed-price structure.

Are you seeing any of that in the market from some of the competition?.

Yes, we're seeing the outcome based on contracts fixed price contracts, it's something that we're happy to engage with customers in. And we believe we have the financial scale and stability of the operational now, so ultimately to deliver on those contracts. We feel confident that we can do that. So we think that's a differentiator.

And we can certainly play in that space. In terms of the pricing environment as a whole. No, I don't think we see anything particularly different to normal. We, as you all know, working a very competitive space and that will continue. We need to be our game and way to be continue driving efficiencies for our customers which we certainly aiming to do.

And that continues, but there is nothing - but we're seeing any cutthroat particularly in the market from a pricing perspective at the moment..

Okay. Maybe last one on the restructuring, I know you kind of called that out.

Are you kind of done at this stage? Or is there kind of ongoing process here? On the front?.

Hi, Tyco. It's Brendan here. Yes, related to our organization, as we're coming into the back end of this year. Particularly with the revenue profile, as I supposed we talked about earlier in the year. You guys are aware of the fact that yes, still ramping down through in the first half of the year. And that I suppose a bit of a tidy operating.

It's hard to describe it in terms of the restructuring that we did do, really kind of just make sure, we right size, as we go into Q3. And obviously, then we'll be ramping back in Q4 from a revenue perspective. So I think it's I think should be done at this stage, doing more at the back end of the year..

[Operator Instructions]. We'll now take our next question from Donald Hooker with KeyBanc..

So you guys are having great success in this small, midsize biopharma space, it sounds like in recent quarters, can you maybe walk through what you're doing differently there. Because I always think of that part outsourcing market as being more kind of interested in working with smaller CROs.

It seems like you guys ever had some success, as a larger CRO competing for those smaller sponsor relationships.

Is there a changing appetite or dynamic there, can you talk about that a little bit?.

I think there's a bit of a miss that the small CROs like to pedal to be honest to justify their existence. So I think this - inevitably, you to hear that from customer.

But we have been very successful in that, so our success just to sort of clarify in terms of new business us is not just in small, we have been very successful over the last - the last quarter or 2 in the larger pharma space. To the extent we have been able to connect well with smaller customers.

It really comes down to having the right project team in place, having our key executives engaged with them, so that they don't feel lost within - we're a relatively large company. If there is a criticism, I suppose that smaller companies tend to put towards larger CROs, is that they get lost and they don't get the attention.

We found a way to be able to have our key executives connect with the smaller customers. And they feel comfortable in awarding us a significant amount of their business. And of course, that makes it very much worthwhile for us. So there is a various things.

There is a multitude of things you do when you're engaging with a smaller company and a smaller customer. They typically have only 1 or 2 compounds and you need to make sure that they get the sort of visibility within your organization that allows them to feel comfortable with outsourcing their babies to us.

And that's how we seem to be able to make that happen. So it's certainly, as I said, a multitude of things. I probably need an hour or 2 to explain them all..

Okay. And you do feel like you are gaining share there. So it's not just a market ground, but you are gaining share.

I mean, it seems like from the that would be a fair resolution, right?.

I think we're gaining share in all of the segments. It's not just a small and medium size, it's in the larger areas as well.

I think, for us as a large organization, it's important that we build in terms of the alliances that we bring on board in terms of the larger companies that comes to us, who of course, has got many alliances with some of our competitors. So that's a very competitive market as you can project.

The smaller customers and the smaller companies have opportunity and they typically aren't aligned exclusively with 1 or other CROs, so there is plenty of opportunity. But we're making good progress in those areas. But we're making good progress across the board..

Real last quick question.

In the medical device space, how big is that business for you? Can you provide some color, because I think that's another rapidly growing area?.

We don't typically call out specific segments, Donald. But I would say it's a growing - very fast growing. We have a very good group on board that came in through the active acquisition. There been extremely good job for us, not just in winning new business, but value business.

So it's a relatively small part of our portfolio, but certainly a significantly growing part of our portfolio. And again, I would say the outsourcing market in that area is relatively massive and is building and maybe 10 years behind the pharmaceutical companies as such.

But they certainly are getting it very quickly and looking to outsource increasingly. And so we're the beneficiaries of that, because - as I said, we have a very strong group in that area. So I'd say it's a very significant part of our business, but it's relatively small all the moment, just growing fast..

Our next question comes from Erin Wright from Credit Suisse..

Can you describe kind of the mix of new business wins in terms of size or type or therapeutic area? Were there any sizable contracts that you would point to?.

I would say for this quarter, again, we were strong across the board, Erin. We're certainly well in the large pharma space. There's certainly some of our key customers were very generous with us in terms of awards. But that was also the case in the midsize and the biotech. So it was pretty uniform across the board.

If we see - we certainly see RFPs and opportunities increasing across the board. Sort of low - benefit about 10% to 15% rate. We've seen the dollar value increase. So we're seeing opportunity again, across the board.

If you like to be sort of very specific on the quarter 2, large pharma was very strong for us, that's where we're happy to be very much in that area..

Okay, great.

And then, what's embedded in your guidance in terms of share repurchases? And a quick question on 2018, what sort of normalized tax rate should we be taking out to?.

Hi Erin. I'll take those. It's Brendan here. In terms of the buyback. At the moment, obviously we did $108 million in first chunk of the year. You saw a little bit of that in Q2. There is no additional outside EPS-wise from what we did in the first quarter. As you recall, we raised our guidance at that point to take account of that share buyback.

In terms of the tax rate then, you also so that we're moving to a 12% rate for the full year. So that obviously indicates first half roundabout 14%. So it means back half will be about 10% which you know at this stage kind of equally evenly over Q3 and 4.

So that kind of hopefully, give us better color as to what we're thinking about for '17 at this stage..

Our next question comes from David Windley from Jefferies..

This is a follow-up to clarify on Erin's question there.

Is that 12% or even 10% durable beyond 2017 on tax rate?.

Yes, yes. Hi, David. How are you? It's a question. It's a dynamic changing environment. Certainly 12% is the lowest we've seen. And I think one we think I, would say, David, over the last couple of years, Actually, in most years, the last couple of years, reacted ended up lower than 14%.

So we've had an idea that we might be able to move down a little bit. So as I said, it's early days, Dave. We certainly think 12% is the right rate for '17. And looking ahead into the future, we probably like to keep at that range, but of course, we'll give you more color on that, as we go through the year..

Okay. So broadening out, Steve, around M&A, I think my sense, you obviously announced today which I would view is very much like your historical ICON's historical pattern string-type acquisition.

I think your commentary expressions from management in general and Steve from you in particular, has been somewhat more welcoming of more aggressive acquisition activity. Obviously, Simon is kind of dedicated to that activity full time instead of handing the IR Head off to Jonathan.

I'd be interested in your comments about whether that is a more frequent periodic acquisition strategy of smaller deals like MAPI? Or whether your appetite is to move into say fewer larger acquisitions?.

Let me try to clarify a little bit. I would say to you that we will be continuing this string of The frequent, more modest sized deals, I would say, that is something that I'm certainly committed to. However and I think I made this clear, a number of - when I spoke on a number of times. We do remain opportunistic in terms of larger transactions.

And so we will certainly consider larger transactions, as they come to the market. And as they offer an opportunity for us to demonstrate clear value for our shareholders for and clear value for our customers ultimately.

the unrecognized each transaction has its front opportunity and risk and we intend to evaluate each of them on the basis of its merits. And so I hope that gives you of flavor. We're going to continue with the MAPI-type deals, that is something that we're going to focus on key segments and key segments, where we would like to be stronger.

And this is a perfect example, in the light-phase area. We have a strong group, but we weren't strong in Europe, as we would like them to be. And we've now moved up to be #2 in the market. So that's an area we feel strongly that it's a good place to be and the acquisition is really a good one for us.

However, as I said, we'll be opportunistic because there are large deals come up, we'll certainly evaluate them on their merits and make a decision as to whether we want to be involved. Because certainly from an M&A point of view, we're anxious to deploy our capital in that way.

We probably do that more so in the M&A area than we will in the longer term on the share buyback side of things. But..

That helps a lot. If I can just follow-up on the topic. So I think people well understand and appreciate the desire to deploy capital and drive toward, what we might view is more efficient balance sheet.

I think the questions that I get from time-to-time are how we to interpret the perceived change in tone about the operational challenges of acquiring a bigger deal? My sense is, I'm trying not put too many words into your mouth.

But my sense is that I expand kind of many years spending in operational structure, SG&A support structure that is now much your to a stage that perhaps is more ready to take on bigger chunks of revenue. But I'd ask you to correct me, if I'm wrong there..

I think that's part of it, Dave. Yes, I'm a different leader as well. Kieron was a part of company, led the company very well throughout different phase.

I think, as I believe we're moving into a different phase now, where we have strong global business services group, we have a strong infrastructure and we have the opportunity now to consider larger acquisitions, notwithstanding the risks that we all know there are risks involved in larger transactions.

But there are risk involve a small transactions. It is to say that 5 small transactions isn't just as risky, if not perhaps more risky than 1 large 1. So we look at it in terms of what we believe we can driving in terms of value.

What we believe we can take on where of us things are, where our weaknesses are and the stage of development that our company at. We believe we're in a good place. We have a strong management team. We're able to - we have a strong balance sheet. We have a right tax rate.

We have a good reasons financially and we have some great opportunities and we will assess some great opportunity that are out there in the marketplace..

Next up, we have Tim Evans from Wells Fargo Securities..

So it looks like you took up your revenue guidance by about $30 million at the midpoint.

How much of this is MAPI? How much is FX and how much of this is organic?.

Hi Robert. Yes. Brendan here. The primary driver of that was the MAPI acquisition. We haven't remodel our P&L account too much for FX at this stage. It's a continuum dynamic. We'll keep looking at that, as we get into third quarter. It wouldn't have really significantly move the dial from what trades we're seeing now.

It's obviously it's continue to seem to be one way traffic, so we will keep a close eye as we get into Q3. But right now, it's not having a big impact there. The predominant driver was the acquisition of midpoint. You can see midpoint we're going up by $30 million. So I'd say that's mainly in relation to the MAPI acquisition..

Got it. And apologies, if you mentioned something on this of earlier. But a couple of larger pharmas have recently announced some pipeline reprioritizations.

Do you anticipate this will impact the business at all?.

Rob, the pharmas are always reprioritizing their pipelines and portfolios. It's a regular day-to-day event for us. So I don't anticipate that it is going to have any major impact on our performance going forward..

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

This is Adam Noble in for Robert. Congrats for the stellar book-to-bill in the non-Pfizer revenue segment which you've been putting a for a while this point.

I will just wondering and when you look at your pipeline, how sustainable is a 1.4 level? Would you expect it to moderate pretty soon or do you think that there is business - enough business out there that you keep that momentum for the foreseeable future?.

I don't have my crystal ball handy at the moment, Adam. But as you say, we have been posting these number for several quarters now. We're very focused on that. We, the said, made some investments in our business team, who are performing very well and operations team very well.

It's not just business development, just operational folks connect to people we put in front of them. We have some great executives and great people on that front, who get out there every day and do a terrific job in this area. So I'm confident that we can continue that. There is no indication from RFP volume of opportunity that, that would fall away.

We're certainly seeing plenty of growth on the RFP front. We have certainly seen plenty of opportunity in terms of strategic these. We have been successful in both of those areas. We of been successful, the said, across the board, large-size, midsize and small.

And so I do anticipate, we'll be able to - of course, depends upon the solid execution, that solid foundation and integration of delivery and we're very focused on that. And ICON, it's something we talk about every day. We measure what we do and where we don't do as good as we want to. So we go and fix it. So there's a number of things that we do.

But there is no reason to suggest that the 1.4 or so that we've been delivering on that front won't continue. So I would certainly say that - I certainly said that challenge to my guys every day and they've been responding very well to it..

Terrific. And just ask around the cadence on the revenue and margins for the backup of the year. I know you talked about 3Q being the trough from a top line standpoint. I'm just wondering if that's still the case. And considering you did expand operating margin in the second quarter.

Are you expecting a decline next quarter? Or do you think you could hold margins steady for the remainder of the year?.

Hi, Adam. It's Brendan here. We did indicate that the market had, if you go back to the revenue prior to the MAPI acquisition, the market did a good job on really working out there is a trough coming in the third quarter. I think we're really spoken about those cancellation really to work on that concludes during Q2.

So I don't think that's fundamentally changed from what we spoke about last quarter. Obviously, you'll need to stagger in on top of that the MAPI acquisition which will have a positive impact on the quarter. But as I said, that's probably remainder of the year, it's of the uplift of the revenue, to work out how that's going to uplift the backend.

And when you do see revenue drop-off, it is - we're flexible business and we will certainly look to maintain or maximize our ability to drive our margin profile. But even in our gross margin terms, you would imagine that if you had a drop of revenue, that it will have a kick on effect.

We will minimize that as much as possible when it gets to bottom line, but that's inappropriate way to look at. But again, we'll see that recovering good revenue, as we go into the fourth quarter..

[Operator Instructions]. We will now take our next question from John Kreger, William Blair..

So if you look at the recent awards you had or even some of the RFPs that are still out there.

Are you seeing any interesting shift between kind of traditional full service work and FSP work?.

John, the short answer would be, no. If any, I think last quarter or so, we have probably seen a bit more of a shift back to full service work, rather than the FSP work. Let's not to say that our FSP type business, our DOCS business is not doing well. there growing in mid-teens year-to-year on easy basis. So there haven't had some big wins.

It does tend to be a little bit lumpy, so you can appreciate the large FSP contracts that we've been, coming 1 quarter and not next. But I don't think we see a significant trend towards as FSP or away from FSP. I think the market is continues to develop. FSP is very important part of a market.

We service it well through our ICON functional services team, as a said recently, the full service team. So we see customers even moving, perhaps who have been traditional FSP users, if that's the right word, are shifting back towards more of an FSP work. And then I was going the other way.

And all in all, net-net, I would say it's much of the much, I don't see a much of that trend going either way. To be honest, I do see overall though, the opportunities increasing in the market, opportunities increasing..

Great, thanks. And then can you update us on your efforts to improve kind of clinical trial efficiency. And just curious, what you're finding to be working and resonating with clients, some of your sort of data sources perhaps or your site management initiatives. Just what's working.

And we think it is a lot of additional opportunities you think over the next couple of years?.

Yes, as I indicated, John in my comments. We're seeing progress on our and the TriNetX sources of data. They have particularly been helpful for us. We're seeing opportunities to go approach our application around startup. We have been improving our startup times.

So there is number of those sort of technologies that have been increasingly used and we've been successful with. We're also evaluating others. It's to be able to say until be fully evaluate those but we're doing that.

I would say our PMG network is growing and is building year-on-year in terms of number of patients recruited and the connections we're able to make with the technology in the PMG network and making sure that those patients coming to our trials really starting to pay dividends.

We'd like to expand that and obviously will that, but of that's proven to be successful. And don't on the variable side of things, as I mentioned we have a lot of interest. We believe we're one of the industry leaders in wearable category.

There is no lot of interest around that from a number of large pharma companies and they're engaging us in sort of consulting agreements as well as implementing variable approach on the clinical trials and given some of the challenges with particularly in the CNS area on the movement disorder-type indications, the variables are a real opportunity there and we see those plans as being very significant revenue drivers for us coming up as CNS business move up.

We typically do not of oncology business with our CNS business is on the move. And we're seeing a significant opportunity. The technology that we're deploying, we're starting to - really starting to bring some advantages. Our PMG network bring some advantages to us.

There is a lot of opportunity out there from a technologies point of view and we look to evaluate all of it and to work with and develop for the relationships with the was that work for us. We're not going down 1 particular track or betting on 1 particular horse. We have a number of horses in the race.

And we'll hopefully stay on the winners or stay on the ones that are appropriate for the particular situations and the particular indications that we tend to do most working..

As there are no further questions, I would like to turn the call back to Steve Cutler for closing comments and remarks..

Okay. So thank you all very much. We believe quarter 2 was a very strong quarter for ICON and we look forward to building on this during the rest of the year, as we build on our position as the CRO partner of choice in drug development. Thank you, everyone..

Ladies and gentlemen, this concludes today's call. Thank you for your participation. You may now disconnect..