Kevin Brady: Yes, Sandy, you’re right. We do expect things to slow down a little bit in the back half or the rest of the balance of the year. For the year, book-to-bill somewhere in the 1.25x range. with a burn rate for the year of kind of 17.5% to 18%. So it’s kind of going back to where we were in the third and fourth quarter of 2022. The first quarter really just accelerated with less funding challenges than anticipated with clients and lower cancellations as August had pointed out in his prepared remarks. We’ve kind of had a perfect setup for us in the first quarter with reimbursable activities and direct service activities that really drove that first quarter revenue, but we expect that to come back to ranges that we saw in the third quarter and fourth quarter of 2022.
Sandy Draper: Okay. Great. That’s really helpful. And then my next question, when I just — when I look at the first quarter EBITDA and then the full year guide, it obviously assumes there’s some EBITDA reduction over the next 3 quarters. I just wanted to — I guess a 2-part question. One, is that more gross margin driven or margins are expected to come down some or SG&A is going to go up because of hiring? And then I guess, if it is the margin, is that more on the mix of pass-through revenue staying higher increasing? Or is it expecting the service margins to come back down because you’re hiring aggressively? Thanks.
Kevin Brady: Yes. Good question. The raise that we had was really driven by the first quarter revenue and the leverage that it enabled on our cost structure. So if you think about the balance of the year, we expect our cost structure to remain pretty much the same in that we do expect headwinds the rest of the year, headwinds from a couple of things. One is hiring that we pointed out in the last quarter when you intend to continue aggressive hiring. The balance of the year, we made some progress in the first quarter. The second quarter typically is our highest hiring quarter. We got wage inflation pressures. But then as you pointed out, we do expect our reimbursable cost as a percentage of revenue to continue to be elevated the balance of the year. So it’s a combination of those three factors really.
Sandy Draper: Okay. Great. And then my last question is probably for August or maybe Jesse. I’m not sure it’s really a fair question because this is about competitors and just breaking news. But obviously, August, that was — your commentary about the environment RFP flow awards was, to me, notably more positive than what we’ve seen the last 3, 4 quarters. It sounds like things are better. But when I look at some comments out of Danaher and LabCorp/Covance and Wuxi, there was definitely seem to more concerned and calling out the biotech funding environment. Just any thoughts you can think of — do you think you guys are winning more share, operating just, obviously, different spaces just because it’s a little bit confusing when, to me, you had a positive total shift, but other folks out there seem to be calling out some concerns. So I’d just love any commentary there. Thanks.
August Troendle: Yes. I don’t know. Everyone’s client base is a bit different and profile, etcetera. We certainly have seen the funding difficulty and drop off of things. And I would characterize this quarter as less bad than we anticipated. Things have certainly come down over time. And our growth this year is not like the last year and — last few years. But we have seen a turn through the quarter through Q1 of improving profile in both RFPs and programs not getting stalled. The clients that we’re kind of on a cash basis accrual. We thought they were going under and continue to pay us and have things have just seem to improve over the quarter. But there’s certainly still a number of our clients that are having funding difficulty installed programs. And so I think we’re — we think we’ve seen the low in the near term, things could always turn again. But things are in the right direction as far as we can see at this point.
Sandy Draper: Okay, great. That’s really helpful. Thanks.
Operator: Your next question comes from the line of John Sourbeer from UBS. John, please go ahead.
John Sourbeer: Hi, thanks for taking the question. I guess just maybe digging in a little bit deeper just on what Sandy asked there in. So it sounds like RFP is up quarter-to-quarter, year-over-year. I guess just — I mean is it despite the funding environment? Where do you think that this strength has come down? Is there like additional specific indications? Is it going into larger customers? I guess just any additional color there, just despite some of the commentary that peers have out there?
August Troendle: Yes. So I because I said it. RFPs have kind of still mirrored our usual client profile. We have had stronger awards and programs that are moving forward from the larger companies. And so in our breakout that we provide, it shows you’d see a larger number coming from midsized pharma rather than smaller biotech. But it’s been kind of moving up the chain even within the biotech. So it tends to be the better funded companies. There’s still a lot of very small companies that are challenged and having much more funding difficulty than they have in the past. But our RFP flow is actually not very predictive of that in terms of — it tends to have the same breakout as historically with a lot of biotech is our largest client and the proportions have remained about the same. I don’t know if that helps.
John Sourbeer: Appreciate it. And also, I know you mentioned, I think, pipeline cancellations down 50%. Just any additional color there? Why do you think you might have seen that spike in the 4Q and what’s normalizing here? And then just any anecdotal color you can provide since the SBB takeover and maybe how that’s trended into early April here?
August Troendle: Yes. Well, we had a lot of clients that were having difficulty raising funding. And we had some that declared bankruptcy and stop their programs. And largely, that was a Q4 phenomenon. And we haven’t seen as much as we kind of anticipated seeing more of that and have not seen as much in Q1 and things — I don’t know the clients that had challenged profile are now not part of it and remaining companies are able to raise funds, but that’s just been the profile we’ve seen.
John Sourbeer: Great. Well thanks for taking the questions.
Operator: There are no further questions at this time. I would now like to turn the conference back to over to Lauren Morris, Medpace’s Director of Investor Relations, for closing remarks.
Lauren Morris: Thank you for joining us on today’s call and for your interest in Medpace. We look forward to speaking with you again on our second quarter 2023 earnings call.
Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.
