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August Troendle

Good day. Backlog cancellations in Q3 were above our usual range, making for three consecutive quarters of elevated cancellations. The magnitude of cancellations in Q3 were comparable to Q1 and improved relative to Q2. As a net result of the elevated cancellations experienced in Q1 through Q3. Net new business awards were depressed in Q3 generating a net book to bill ratio of 1.0 for the quarter.
As mentioned last quarter, the elevated cancellations we've experienced are not limited to studies previously recognized in the backlog but rather span our entire pipeline of awarded future work and therefore, impact current and anticipated future backlog recognition.
This is expected to depress our reported net backlog awards in Q4 as well as in Q1 of 2025. Assuming cancellations return to a normal range and the business environment remains stable. We will be able to rebuild our pipeline of opportunities and our reported book to bill numbers should approach a more usual range that is greater than 1.15 in the second half of 2025. The business environment apart from the elevated cancellations remains decent.
RFPs were down modestly in on year over year and sequential basis but quality appears good. We remain optimistic about future growth. Although as I indicated, it will take several quarters to replenish the flow of opportunities converting into backlog.
I will now turn the call over to Jesse to provide narrative on the quarter.

Jesse Geiger

Thank you, August. Good morning, everyone. Revenue for the third quarter of 2024 was $533.3 million which represents a year over year increase of 8.3%.
Net new business awards entering backlog in the third quarter decreased 12.7% from the prior year to $533.7 million representing a 1.0 net book to bill. Ending backlog as of September 30, 2024 was approximately $2.9 billion an increase of 8.8% from the prior year.
We project that approximately $1.62 billion of backlog will convert to revenue in the next 12 months. And backlog conversion in the third quarter was 18.2% of beginning backlog.
Now with that, I will turn the call over to Kevin to review our financial performance in more detail as well as our guidance expectations for the balance of 2024. Kevin?

Kevin Brady

Thank you, Jesse and good morning to everyone listening in. As Jesse mentioned, revenue was $533.3 million in the third quarter of 2024. This represented a year over year increase of 8.3%. Revenue for the nine months ended September 30, 2024 was $1.57 billion and increased 13.3%.
EBITDA of $118.8 million increased 31.7% compared to $90.2 million in the third quarter of 2023. Year-to-date EBITDA was $346.7 million and increased 30% from the comparable prior year. Even a margin for the third quarter was 22.3% compared to 18.3% in the prior year period.
Year-to-date even the margin was 22% compared to 19.2% in the prior year. Even a margin for the quarter was favorably impacted by reimbursable costs which decreased by 350 basis points from the prior year.
EBITDA also benefited from the direct service activities and productivity. In the third quarter of 2024, net income of $96.4 million increased 36.7% compared to net income of $70.6 million in the prior year period. Net income growth ahead of EBITDA growth was primarily driven by interest income partially offset by a higher effective tax rate in the quarter.
Net income per diluted share for the quarter was $3.01 compared to $2.22 in the prior year. Regarding customer concentration, our top five and top 10 customers represent roughly 22% and 29% respectively of our year-to-date revenue.
In the third quarter, we generated $149.1 million in cash flow from operating activities and our net days sales outstanding was negative 62 days. We did not repurchase any shares during the second quarter. As of June 30, 2024 we had $656.9 million in cash and $308.8 million remaining under our share purchase authorization program.
Moving now to our updated guidance for 2024. Full year 2024 total revenue is now expected in the range of $2.09 billion to $2.13 billion. Representing growth of 10.8% to 12.9% over 2023 total revenue of $1.89 billion.
Our 2024 EBITDA is now expected in the range of $450 million to $470 million. Representing growth of 24.1% to 29.7% compared to EBITDA of $362.5 million in 2023.
We forecast 2024 net income in the range of $376 million to $388 million. This guidance assumes a full year 2024 effective tax rate of 15.5% to 16.5%, interest income of $24.4 million and 32.1 million diluted weighted average shares outstanding for 2024.
There are no share repurchases in our guidance. Earnings per diluted share is now expected to be in the range of $11.71 to $12.09. Guidance is based on foreign exchange rates as of September 30, 2024. We plan to provide 2025 guidance on our fourth quarter call in February.
With that, I will call -- turn the call back over to the operator so we can take your questions.

Question and Answer Session

Operator

(Operator Instructions)
David Windley, Jefferies.

David Windley

Hi, good morning. Thank you for taking my questions. I wanted to start August with the cancellations and perhaps if you could, I don't know, quantify what you're seeing, talk about if you're seeing, I think last quarter you said there wasn't really a trend in those cancellations.
I wondered if a trend has emerged in terms of either therapeutic area or otherwise the nature of the cancellations and how they -- if you can, how they break down between the cancellations of the actual backlog that we're seeing run through the book to bill versus the amount that's kind of being pulled out of your pre-backlog.

August Troendle

Yeah. Sure, Dave. Well, first the cancellations we've seen -- I guess usually cancellations are a wild card and they come out of the blue it's kind of product performance. Occasionally, company has financial difficulty but they're kind of random and unexpected.
The cancellation, we've never seen a period in which we had just across the board kind of elevated cancellations that weren't just kind of one off. So I mean, you have to kind of associate them all. And no, I don't see any trend across therapeutic areas or anything like that.
I think it's -- the only common factor is these are companies that were funded during the COVID high. And I have -- run out of money it was kind of the one common kind of element. And you have the usual routine cancellations that are random, et cetera.
But I do think that the environment, we've had a great deal of cancellations that are many of them related to running out of funding and not being able to refresh from the capital markets. So it is an unusual situation, but no, I don't see any particular trend in terms of therapeutic areas. It's kind of just type of company and when they were funded and lack of future funding would be the elevated level of cancellations that are unexpected. And then you've got the backline -- background kind of stuff.
In terms of backlog, recognized portion of the cancellations versus that has is part of the pipeline, but not yet in the backlog either that the amount of revenue was part of a project that was in backlog but was not because of a regulatory, threshold where there was withholding because either time or some event that prevent us from recognizing the remainder of the amount of that award or just things that hadn't gotten to start up. And so we're in the awarded status but hadn't started.
The breakout between the two backlog versus the rest of it, is probably roughly equal, maybe even a little bit higher in the amount that is not with is pipeline, not in backlog. So it's been across the board and I don't have the numbers, I think maybe numerically a little bit larger in the non-recognized backlog portion, but across the portfolio.

David Windley

Got it. Thank you for that. And then the follow up question is around pricing. It sounds like as you said, the RFP flow may have been down a little bit generally holding up okay, and quality good. I'm wondering what you are seeing in the competitive environment and actions by competitors in an environment where it seems like there's maybe a less opportunities to go around for everybody.
And how folks might be chasing those fewer opportunities either by getting more aggressive about how fast they think their time lines can be or more direct pricing or offering better payment terms of the things that CROs tend to do. I just wonder if you're seeing any change in the pricing environment.

August Troendle

No, I'd say if anything we've seen improvement. I think that if you look back toward early in the year, we might have seen a little bit of that, but I actually think the business environment is pretty normalized. If you take out the cancellations of stuff that was awarded during the COVID, it is a pretty normalized business environment.
I would think that we can get back to robust growth in the future. It's just going to take some time. But no, I've not seen lately any sort of trend toward dropping pricing or aggressive, overly aggressive pricing. I mean, look, it's a competitive environment but nothing unusual in the last quarter, I don't think

David Windley

That's, interesting. Good to hear. Thank you for the answers.

Operator

Max Smock, William Blair.

Max Smock

Hey, good morning. Thanks for taking my questions. Maybe just following up on Dave's first question there around the size of the cancellations in total. Last quarter, you mentioned double the normal range. I think if they had been within the range, you quoted a book to bill of about 1.24.
Just wondering if you can give us a similar level of detail this quarter in terms of the difference between gross and net bookings and what book to bill would have looked like if cancellations were within that kind of normal 4% to 5% range that you've seen historically.

August Troendle

Yeah. No, look, I don't have a kind of an analysis of that. Certainly, even if we didn't have elevated cancellations this quarter, which were not massively, they were outside of our range, but it wasn't a large diversion like last quarter. And we still would have had relatively, bookings somewhat below kind of what we've been running at sort of 1.2 sort of range.
It would have been well below that just because of the prior, the cumulative prior cancellations in Q1 and Q2. So it's a mix of the cancellations over that entire period, Q1 through Q3 that causes the reduced bookings. Again, if you cancel stuff that's in the pipeline, that hasn't got the backlog. It's going to show up in future backlog awards and book to bill and that's what we've seen.

Max Smock

Yeah, it makes sense. So it's basically, it's just a little tougher to come up with that metric this quarter because you're also working off the elevated cancellations in the prior quarter. Is that the right way to think about it?

August Troendle

It's sorting it out between the two is -- but it would have been, I don't know, you could say, look, if we even if we had very low cancellations this quarter, we wouldn't have gotten to a 1.2 so that's the kind of.

Max Smock

Maybe following up on that, on the gross booking side, August. Have you seen any change in terms of your win rate or competitive dynamics, to Dave's point around pricing or just any other factors that would cause a shift one way or another maybe be causing a little bit of pullback or maybe even a step up in your run rate here in the back half of the year.

August Troendle

Yeah. No, look, our win rate was actually really strong in late last year, the second half of last year, entire second half, it was very strong. Q1 was a -- Q4 in terms of opportunities were pretty weak in Q1, we had a very low kind of awards. You kind of put it in that kind of context in terms of new authorizations.
And then subsequently, we've had win rights that are really right in the middle of kind of the range. And so we're doing fine the last couple quarters. Winning something and then having a cancel though it doesn't do you a lot of good in the long term.
But so it's really the cancellations. It's not our win rate, it's not the amount of awards, it's not the driver has been a lot of stuff that was awarded in that kind of 2,000 -- 2,001 maybe early 2002 to '20, '21 and '22 that we've seen a lot of cancellations from things awarded in that time frame.

Max Smock

I'll leave it there and hop back in the queue. Thanks for taking our questions.

Operator

Eric Coldwell, Baird.

Eric Coldwell

Thanks very much. On average over time, how much of your quarterly gross awards have come from awards that were previously made in prior periods, whether we call that pre backlog or pipeline backlog stuff that you had won in the past but would put into backlog and into bookings and backlog in a future period. What was the normal cushion over time when you entered a quarter?

August Troendle

I mean, basically nothing gets into backlog that is first awarded in that same quarter. So everything comes in from -- I think across the industry, you get an award and often you don't even know how much it is really still, you're refining the -- there's still change in specs and it takes a while before from award to get to a point where you've got it locked down.
And for us, get it started, for others, it might be under contract. The contract our -- if we did our backlog based on contract versus study start, it'd be about the same time frame. We get a contract that you're often working under a letter of intent or startup agreement and you don't really have a contract until, about when the studies entering patients in the field, which is kind of our criteria for entering backlog.
But that takes multiple quarters usually, I can, it's some things, yes, we'll hit the same quarter, but they're the unusual opportunities.

Eric Coldwell

Okay. And then, I guess the -- look at the elephant in the room here is that the market has this impression that you've had growth strains on the organization that have led to quality issues and that these cancels are actually being caused by unhappy clients were not out of money, but in fact, leaving you to go to another CRO you've not indicated that on this call or prior calls. But do you have a sense on how much of the cancellations actually are projects that will still go on, but they're just going to go on with another vendor.

August Troendle

So we've had -- you said that the number of things that we've lost because of client dissatisfaction with our performance in the last year is not a small number, it's zero. There have been years ago, there might have been a case where, client was dissatisfied and moved to another CRO, but that hasn't happened.
We have had a fair number of clients that have run out of funding, have had a great deal of difficulty and we've provided notice of termination and they've moved it to another CRO. And some of those have subsequently been funded.
And so maybe we made the wrong choice at the time. But in the kind of early in the year, things were looking pretty bad in terms of funding. We couldn't -- didn't feel we could just except running the program continuing it without payment.
And I would not expect that a company that is given notice of termination by their CRO is going to go to another CRO and say, we'd like you to take over this work. And the reason is because the prior CRO has, is terminating on us, I suspect they spin it in some different way.
But the fact is that is, what has happened. So it isn't even necessary that if you hear this from another CRO that they don't actually believe that this was a performance based move. But that's just not true.

Eric Coldwell

All right. That's a good response. And then on the last one, I'll squeeze in one more if you don't mind. Did I hear you say that you expected to get back to a quote normal 1.15-plus netbook to build next year in the second half?

August Troendle

Correct.

Eric Coldwell

Yeah, because your average book to bill since the IPO through the fourth quarter of '23 was 1.25. So I'm just curious on the disconnect between what you see as normal at 1.15, whereas history would say more like 1.25.

August Troendle

Yeah, I mean, I'm not targeting 1.15. I'm kind of putting that as the floor for expectations and that we would expect to see that, and hopefully, based on the business environment it, gets to 1.2, 1.25.

Eric Coldwell

Okay. Thanks very much. I appreciate it.

Operator

Ann Hynes, Mizuho.

Ann Hynes

Hi, good morning. I know the past couple of years you have provided for your guidance. Is there anything directionally you want to say about 2025 from maybe a merger perspective? So like for example, if we're in a maybe mid-single digit revenue growth environment, how do we view margins in that environment?

Kevin Brady

Yeah, and we're not going to provide any context on 2025 at this point just given, just the uncertainty around cancellations, we really want to have another quarter under our belts so that we can provide some good perspective and guidance on the fourth quarter call.

Ann Hynes

All right. And then how should we think about margins? Like for example, if you only grow mid-single digits, how should we view -- this quarter, you had a lot of cost savings. Can those continue in a lower revenue environment?

Kevin Brady

Yeah, I mean, certainly they can continue. But remember there's a lot of other factors that come into play on margins, reimbursable cost. What's going on with utilization, what's going on with retention levels. We're kind of operating in a pretty optimal spot right now across all those different metrics and it just depends on how those progress throughout this quarter and then the 2025 as well.

Ann Hynes

Great. And one last question, did you -- I might have missed this, but did you talk about gross bookings, were they actually up in the quarter and the issue is just cancellations?

August Troendle

Gross bookings were not up in the quarter. But again, the reason they weren't -- the reason they were low was because of cancellations in the prior few quarters. So I mean, it's, cancellation of pipeline work and so I should separate what I'm saying by cancellation.
We report the cancellation of backlog and gross bookings and backlog would have been lower, but the gross bookings and backlog this quarter were lower because of cancellations in non-backlog work prior to that, which we generally do not provide the non-backlog cancellation magnitude. That makes sense.

Ann Hynes

Yeah. Thank you.

Operator

Dan Leonard, UBS.

Dan Leonard

Thank you. First off the dynamic you're describing where companies were funded during the sugar high of COVID are now running out of money. Any sense for when that will be completely washed out of the system. I mean, the funding peak was three years ago at this point.

August Troendle

Yeah, I keep hoping that's true. But look, we still have some clients that are kind of taking it quarter to quarter, and continuing programs that really were funded in that period and are not, well-funded companies. Again, we've a number of them have, gone bankrupt, we gave term noticed to a fair number of companies because of inability to pay and terminated.
Most of those didn't make it, some of them eventually did get some funding and have continued on. But there's still a number of projects that we have that are a challenged funding type situations. I'm hoping that that's done but it kind of depends on the future business environment. If things turn south again, you get more of these cancellations, potentially. Certainly the overhang is less, I guess you'd say, but I can't say it's entirely eliminated.

Dan Leonard

And just a quick follow up. Possible you could frame your expectations on what book to bill could look like in the fourth quarter. I'm trying to triangulate your various comments on pre backlog and RFPs being down and thought it would just be easier to ask

August Troendle

What we expect our book to bill to be in Q4?

Dan Leonard

Yeah, and I understand you don't want to give an explicit number, but maybe you could just, offer some framing thoughts around that.

August Troendle

Okay. So better than this past quarter, better than one. Look a lot of things do happen during the quarter. Like I say most things are in that pipeline but what makes it the backlog and what gets canceled and all kinds of other things have a rather large effect on that between 1 and a 1.2.
But I think it's not going to be a 1.2 and it's not going to be a 1.0. It's going to be somewhere above a 1. And look, kind of, if you look at it like it's going to be depressed. So if I -- if it was going to be 1.2, I wouldn't say that was, they're going to be depressed. So we're talking about probably under 1.1.

Dan Leonard

Appreciate that. Thank you.

Operator

Justin Bowers, DB.

Justin Bowers

Thank you. Good morning. And thanks for the question. So just one on backlog. Can you give us this is related to Dan's question. But can you give us a sense of how much of the backlog is from that vintage from 2020 up to let's say 2020 and 2021?
And then the second part of that would be of the sort of that not yet awarded but impacting the go forward bookings. Is there a way to quantify what the impact of that is or frame how much of your typical bookings historically have reflected some of that not awarded, but it shows up in the gross.

August Troendle

I'm sorry. I don't -- I'm not understanding exactly what you're looking for. How much of the unrecognized backlog is going into backlog or --

Justin Bowers

Yeah. So part one is just like if you look at the current backlog, how much of that is from the '20 to '21 vintage. And then the second --

August Troendle

That's an easier part. Let me just take that, I don't know, I don't have it broken out. It's like I say, I think there still is an amount there. And I do point to that is because we've never seen an environment where there was, three quarters in a row of, kind of this high bit cancellation.
And I do put it together to, there was a disproportionate number that we kind of funded during that period. But look this is a -- I don't want to make it sound like that's the only -- it's only the post COVID sugar high that we're coming there. This is an ongoing thing of course, we do have a lot of clients that are dependent upon the capital markets to complete a project, okay. So just even in normal time, okay.
So I think it was exacerbated though because there were a fair number of projects, funded during that period. And they still represent a chunk of our backlog, I don't think it's a majority of the backlog, but I just don't have a breakout of just, when things were awarded, et cetera.
But it enhances the issue in terms of the great rise in funding that was available and then the acute drop off, that's the issue. And this happens all the time even now we're getting projects that are funded because things are better than they could be for that company a year from now.
So I don't want to make it, into it just an all one-time event. But I do think that contributed to the size and duration of these cancellations.

Justin Bowers

Understood. And then with -- so just trying to part two of that would just be okay historically, in any given quarter, if what percentage of your bookings are related to this dynamic of in the pipeline, but not yet awarded for example, is that like 10% or 20%?

August Troendle

Virtually 100%. I mean, I thought I answered that just a little bit ago. The -- almost, it's very rare that a project is awarded in a quarter. And then it is recognized in the backlog in the same quarter. It generally takes a few to several quarters for that to happen.
Because our backlog recognition is the project really, beginning to enrol patients in that -- within the next quarter. So -- and that usually takes, you can say six months or whatever, but it's very rare that it's only a month or two.

Justin Bowers

Okay. Understood. And then with -- just based on what you're seeing now with the current backlog, how does that impact your view on employee growth over the next quarter or so? And can you give us a sense of maybe like reimbursable costs now? Are we at like steady state given what you're seeing or would there be any change with sort of the mix there?

Jesse Geiger

Yeah, I can speak to employee growth. We did increase head count it's about 1.8% from the prior year. That's likely where we're going to end the year given that Q4 is historically a slower hiring, period for us. We do expect accelerated growth in 2025. Putting a finer point on that is something we'll do as we issue our 2025 guidance on the next quarter call. Kevin, you want to speak to reimbursable cost?

Kevin Brady

Yeah. And in terms of reimbursable and we'll provide more context on 2025 next quarter. But historically, we've been in this 33% to 35%, it's always been volatile. Certainly, our ability to predict it has been challenged of late. It was very high in the last three quarters of 2023 approaching 40% and then it dropped in Q1 and then back up in Q2 and back down in Q3.
I don't think it's going to get back to that 33% to 35% range. The fourth quarter, our modeling would suggest it picks back up not to the levels that we saw a year ago, but higher than what we saw in the third quarter.
I think costs are stabilizing and normalizing. There's still stress on sites, but likely 2025 is still somewhat elevated but perhaps not as high as what we had expected exiting 2023 but we'll try to provide some more color on the fourth quarter call.

August Troendle

Understood. Thank you.

Operator

Charles Rhyee, TD Cowen.

Charles Rhyee

Oh, yeah. Thanks for taking the questions. I just wanted to follow up. August, you talked about, I know it's not all of your backlog, but when we think about that period and during COVID of funding and these companies running out of money, what about the kind of significant amount of funding we had in the first half of this year?
Did that not go to some of these clients or has that money not been released? It could be that some of that comes back for these companies that they're waiting on funding. Anything if you connect sort of the companies that you're talking about here that are kind of running out of money versus maybe those that did get funding in the first part of this year, were they not necessarily the same?

August Troendle

Yeah. No, it's -- look there's a lot of overlap, a fair number of companies that we work with did get funding and their projects are continuing and they're the ones that didn't cancel. And there's a fair number that didn't get funding and a few actually, two that I'm aware of that, we -- they had a great deal of difficulty.
We served them kind of notice of our plans to move on because they were unable to pay us and they eventually did get some of that funding. So some of them with us, some of them without us and some did not get funding but it's not like that funding was just evenly distributed, it was given to specific companies and not everybody got funded.

Charles Rhyee

Got it. That's helpful. Maybe as a follow up, last quarter, I think you guys talked about, looking to be opportunistic with share repurchase, shares. Since earnings, since last quarter, right have been, under pressure.
But then when we look, I don't think you guys bought any stock back in the -- in this last quarter. Any reason not to have been more opportunistic this past quarter. Can you talk about sort of your thoughts on buying back shares? Thanks.

Kevin Brady

Yeah, I mean, our Charles, our strategy hasn't changed. And we try to put plans in place and we're somewhat limited in terms of timing on when we can put things in place and we've got certain restrictions as well.
And unfortunately, those plans did not trigger, we'll continue to be disciplined in our approach and opportunistically rebuying and to the extent that we're able to execute on that plan, we'll buy shares. If not, we'll continue to build some levels of cash here.

Charles Rhyee

Great. Thank you.

Operator

Jailendra Singh, Truist Securities.

Jailendra Singh

Jailendra Singh. Just want to make sure I hear the name.

Lauren Morris

Yeah, sorry, you go ahead.

Jailendra Singh

Yeah. Hi, thanks. Good morning. Thanks for taking my questions. So I just want to go back to cancellations. You called out Q3 trends were similar to Q1 but better than what experienced in Q2. I want you to put a finer point on the intra quarter trends in terms of cancellation last quarter, you called out trends were soft in June but had shown signs of some stabilization in July.
Did that not just actually happen as you wrapped up a month or was it really that trends got worse in August and September? It looks like you're expecting book to bill to improve in Q4. Does that mean trends were better exiting Q3 and likely continued in October versus what a book to bill of one might imply, just trying to understand the trend, recent trends and maybe something about October.

August Troendle

Yeah, I don't have the exact dates, I think at the time of our last call, we only had a couple of weeks data into July and it looked fine and probably looked like it was going to be within the sort of usual range. But over the quarter, it's not like it's just all ramped in the last month or it suddenly spiked at any given time.
But we did have a number of cancellations through the quarter that pushed us out of what, we consider the normal range. But again, it wasn't -- that wasn't the reason, we have a 1.0 book to bill that was more driven by the gutted pipeline from prior cancellations.

Jailendra Singh

Okay. And then my follow up, I want to go back to Eric's question around market competitiveness with some of your peers making a big push in EVP and biotech space with an argument that they are focused on providing specialized services to meet the unique demands of this customer segment.
Just trying to understand, like, have you seen this market getting more competitive? I understand you might not have lost any client to a competitor due to client dissatisfaction. But what are your thoughts on your potential clients having more choices today versus Medpace being the partner of choice for these customers in the past?

August Troendle

Jesse?

Jesse Geiger

Yeah. I'll jump in on that. We haven't -- I mean, the win rates been good. But as August mentioned earlier on the call, it is a competitive environment. we're seeing good competition in the field. But nothing that we'd point to in terms of any, irrational behavior or irrational or aggressive pricing, competition in the market, competitive space but no change really that we're seeing.

Jailendra Singh

Okay, great. Thanks a lot.

Operator

(Operator Instructions)
Max Smock, William Blair.

Max Smock

Hey, thanks for speaking me into the follow up. I wanted to ask going back to kind of the front end demand environment. I think last quarter, you pointed to RFP flow up about 16% year over year. Biotech funding maybe took a little bit of a step back in the third quarter, but still overall, September was strong.
Just wondering if you could comment on what you're seeing in terms of RFP flow so far in the fourth quarter as well as give an initial kind of update on how that initial words, that pre backlog or bookings number has triggered over the last couple of months.

August Troendle

So RFP numbers in the fourth quarter to date?

Max Smock

Well, or third quarter and then, yeah, any sort of look at how those flows have trended in fourth quarter would be great as well.

August Troendle

Okay. So fourth quarter, they were down a little bit sequentially. Not a great deal but they did tick down. July, I'm sorry -- October, we wouldn't really have anything yet. It takes standard turnaround for RFP coming in is 10 days. So you don't have any information on it until at least 10 days after it arrives because you don't have any numbers on it.
You could just count them and of course, what I'm talking about is a dollar RFP flow. So we really -- we just have numbers for September, just very recently. So I really don't have any kind of trend. Certainly, the RFPs have continued to come in. I just don't know how dollar wise that would translate into in Q4, but Q3 was -- it was down on more than 10% but not a great deal.

Max Smock

So sorry, I just, just to clarify on that. So down 10% sequentially off a strong Q2 number. But were they up year over year in the third quarter?

August Troendle

They were down slightly year over year.

Max Smock

Got it. Thank you.

August Troendle

And they were down less than probably, I don't know, maybe similar kind of, pop down that they were had popped up in Q2.

Max Smock

Thank you.

August Troendle

Some were similar.

Operator

David Windley, Jefferies.

David Windley

I missed the name. Was that Dave Windley?

Operator

Yeah.

David Windley

Okay. All right. Great, thanks. So follow up, appreciate Eric's question on kind of addressing some rumor that's been out there head on. Another one is that you are pursuing or have one big pharma contracts. And I suppose if those -- if a big pharma opportunity was a full service opportunity and fit your model, that would be good.
But the odds of that are fairly low. And so I guess my basic question here is for to ask you to discuss your go to market discipline. And is that still consistent in terms of your focus on biotech and your focus on full service work?

August Troendle

Yeah, I will not run if nominated, I will not serve. I don't -- I'm not aware of it being on more large form of work. No, our go to market is remains the same. We're not jumping and trying to do large farm. We're not doing partial service, we're not doing functional.
We're not doing staffing, we're not doing any that kind of stuff. I think our core business is good and strong. I think that there's been some funding difficulties that have translated into a number of cancellations here, but I think longer term, we're on the winning strategy and we don't plan on changing it.

David Windley

Got it. And further on clarification. So I think your commentary is largely answered this around the kind of the nature and source of the cancellations. One of the perhaps explanatory theories that we offered last night was that because your -- excuse me, your pass throughs have come in light of your expectations, a couple of the three quarters year-to-date that maybe some of this was a lowered forward expectation around your pass throughs.
And therefore, maybe calling out some amount of pass through sizing pass through estimating in the backlog. From your commentary, it doesn't sound like that is actually part of this, but I thought I'd give you an opportunity to clarify and confirm.

August Troendle

Kevin, do you have any kind of --

Kevin Brady

Yes, David, it's not related to some kind of an adjustment on future forward pass through activity if that's your question.

David Windley

Yeah, it is. Okay. Thank you. And then lastly on labor, appreciate Jesse your answer sounds like if I understood correctly that your Q3 ending head count is what you expect to end 4Q. And in terms of kind of utilization of those staff, I presume that your margins have benefited from not having continual flow of new employees coming in and not being billable or being underproductive, is that correct? And is there still some of that benefit that you could squeeze out of the organization or is that kind of at a peak?

Jesse Geiger

Yeah, you're right, Dave. There is continued efficiency, we got low turnover and good utilization of staff. So plenty of staff in terms of the individuals that we're sourcing and putting onto new projects. And then also just good efficiency of existing seasoned staff because we're not hiring as much right now or haven't been hiring as much the burden then on the existing employee base, in terms of training and mentoring and bringing up to speed.
Those newer individuals is lower and therefore their productivity on billable work is higher. So in a good spot now, as I mentioned, we do expect to accelerate hiring as we move through next year. But the rate of that and the size of that will largely be dependent upon what the bookings look like and what the future opportunities turn out to be.

David Windley

And I'm so sorry. Thanks for that, Jesse. Oh, I'm sorry,

August Troendle

I'd just add, yeah, our turnover is the lowest, the last two quarters been the lowest possibly ever. Certainly in the last five years. So it's just -- it's really, in the past year just come down to record lows.

David Windley

Thanks for that. And I was just going to clarify, Jesse, on the productivity point. So is there actually still even room for productivity for further productivity to lead to even higher margin in the near term? And I guess you've kind of guided to that, but I just wanted to ask.

Jesse Geiger

Yeah, I don't think a great deal. I mean, I think we're at good efficiency now. I don't think there's a lot more of margin expansion in terms of leveraging, lower turnover and greater productivity than we currently are experiencing.

David Windley

Got it. That's very helpful. Thank you for taking my follow up.

Operator

Eric Coldwell, Baird.

Eric Coldwell

Thanks. Can you hear me?

Kevin Brady

We can hear you, Eric.

Eric Coldwell

Great. Yeah, great. I wanted to just wrap up here with the backlog burn. You've over the last couple of years, you've had a range from the mid-16% on a quarterly basis, up to over 19%. Last three quarters, you've run consistently at 18.2%.
What dynamics might be in play that would shift that burn rate up or down over the next 12 months. I'm just thinking about all the moving pieces of these cancellations and then pass through volatility et cetera. I'm just -- I'm trying to get a sense on whether you're expecting a similar low-18s rate going forward or if you have reasons to believe that could go back to the lows of a couple of years ago or the highs of last year.

Kevin Brady

Yeah. Good question, Eric. I mean, certainly, we continue to progress of studies continues and it's very healthy for active programs. I think the burn rate is more influenced by what's going on with bookings.
So when the period that you were stating where it was kind of in the 16%, that was in the period where our bookings were closer to [1.4%] and you're putting all of the programs in the backlog and these are programs that are starting to burn, but it takes a while for those programs to burn up.
Now here lately, you've seen the reverse of that where the burn rate started to pick up is kind of the bookings have slowed down. So it's not a function of how programs are progressing necessarily more in our case, as much as it is just the calculation on how bookings are progressing. So I think the burn rate you'll see just kind of stay at this level depending on what happens with the future bookings.

Eric Coldwell

And then last one for me, just a technical one. Would you mind sharing how many projects or trials you're working on in the moment? Just maybe on an annual basis, maybe quarterly. I'm just, I get a lot of questions about how many studies or different programs you're running at a given time. I'd love to get an update for the total number if you have that.

Kevin Brady

I mean it's in the hundreds, Eric.

August Troendle

It's in the 500 or so.

Eric Coldwell

Yeah, 500 range?

August Troendle

Yeah, I think last time --

Jesse Geiger

Yeah.

Eric Coldwell

Perfect. Okay. Thank you very much.

Operator

Charles Rhyee, TD Cowen.

Charles Rhyee

Oh, yeah. Thanks for taking this follow up. Just a question on the pass throughs then. Is some of the issue with pass throughs, is that really from delays and trials? So the service revenues because you're still overseeing the project, so you're billing for them continues.
But have you seen, I think you've talked about in the past is that just a function of delays in study starts or other things that are kind of slowing that process. So the past due revenues, you haven't been, expended yet. But arguably, those would come back as those projects get ramped back up. Yeah, they're just curious on that dynamic if that plays into it at all. Thanks.

Kevin Brady

Yeah, I mean, it can be a number of things, it can be slower start up activities than expected, it can be a mix of programs across the portfolio. It can be the timing of when sites are submitting their data files and their invoices.
There's a number of different factors that can contribute to that, as I've said in previous calls. I mean, we're dealing with thousands of sites in hundreds of programs and some of these things are somewhat out of our control in terms of when the data is submitted to us.
So it's a number of different factors and it's very difficult to predict from quarter to quarter. And we've seen this volatility in the past it's not something Charles, that's new. We've seen this quarterly volatility in the past as well.

Charles Rhyee

Great. And actually Kevin one last for you, you said before, you're looking for certain triggers to buying back shares. Can you kind of dive into a little bit? What are generally the triggers for you to be able to go in and repurchase shares? Thanks.

Kevin Brady

Yeah, I mean, look, I mean, we're not going to kind of divulge our strategy, but we try to pick different levels where we see value and put plans in place at those different levels. Certainly, the timing of when we do that, we've got some narrow windows to be able to execute that. And again, if those plans trigger they trigger but it's something that we continue to evaluate and remain pretty disciplined in our approach.

Charles Rhyee

Great. I appreciate it. Thank you.

Operator

Thank you. This does conclude the Q&A session. I would like to turn the call back over to Lauren for closing remarks. Please go ahead.

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 fourth quarter 2024 earnings call.

Operator

This does conclude today's conference call. Thank you for joining. You may all disconnect.