Revenue Guidance Range
Q: What's driving your wide revenue guidance range?
A: The guidance range reflects market uncertainties, including potential additional vaccine work that could move us to the higher end and the risk of cancellations that could push us lower. As we gain more certainty, we expect to narrow the range during the year. Midpoint is a good place for modeling. "

Gross Margin Outlook
Q: How do you expect gross margins to trend?
A: We anticipate maintaining gross margins around 30% for 2024, despite gradual shifts to FSP. Efficiency improvements through technology and automation help offset any mix impact, keeping us confident in achieving our margin targets. " "

Book-to-Bill Target
Q: What gives you confidence in the 1.25 book-to-bill target?
A: Our target of 1.25 is based on strong opportunities, especially with strategic partnerships in midsize and large pharma. Stabilization and improvement in biotech funding also support our expectations, putting us in a good position to meet this target. " "

RFP Uptick and Demand
Q: What are you seeing in recent RFP trends?
A: We've observed mid-teens growth in RFPs early in the year, particularly from large pharma, where we have higher win rates. There's also a modest uptick in biotech opportunities, indicating improved demand and a constructive outlook. " "

Impact of FSP Shift
Q: How does the shift to FSP affect your margins?
A: The shift to FSP is gradual and not expected to materially impact gross margins. While FSP contributes similarly at the bottom line, any modest impact is offset by efficiencies and automation. We remain comfortable maintaining gross margins around 30%. " "

Capital Deployment Plans
Q: How are you balancing M&A and share buybacks?
A: M&A is our priority for capital deployment as we aim to strengthen areas like our site network and labs. Share buybacks are authorized and will be used opportunistically if we don't find suitable M&A opportunities that fit our strategic goals. "

Staffing and Automation
Q: What are your hiring needs given revenue growth?
A: We'll grow revenue at a greater rate than headcount by enhancing efficiency through automation. Retention has improved, and we're targeting to increase automated hours to 3.5 million, reducing the need to add headcount while improving utilization. " "

Strategic Partnerships Impact
Q: Can you size the opportunity from new strategic partnerships?
A: While not sizing specifics, strategic partnerships with top pharma companies can be at least $200 million annually. We're now strategic with a majority of top 20 pharma companies, which enhances our growth prospects and drives RFP improvements. " "

IRA Impact on R&D Spend
Q: How is the IRA affecting customers' R&D spending?
A: We haven't seen significant changes due to the IRA. Customers remain concerned but are exploring different development approaches, like concurrent developments, which can present opportunities for us to work differently and more efficiently. "

Direct Fee vs. Pass-Through Revenues
Q: How are pass-through revenues affecting growth and margins?
A: Pass-through revenues have been a headwind due to shifts toward longer-duration therapies like oncology. Direct fee revenue grew in the high single digits, and we expect the headwind from pass-throughs to lessen in 2024, improving overall growth. " "

COVID Work Percentage
Q: What's the current percentage of COVID-related work?
A: COVID work represents about 3% to 4% of our backlog and revenue for the full year, similar to previous periods, and we expect this to remain consistent going forward. "

Interest Expense Reduction
Q: How should we model interest expense for the year?
A: We expect a $100 million reduction in interest expense year-over-year, with more impact in the second half as we address debt. We'll work to restructure and gain certainty on our interest payments throughout the year. " "