Icon cuts forecast, mulls staff changes after Q3 revenue slides

Icon has cut its full-year sales forecast and is mulling staffing changes after headwinds from two large customers reduced its third quarter revenue.

The Dublin, Ireland-based CRO reported revenue of $2,030 million for the three months ended Sept. 30, down from the $2,055 million it posted in the equivalent period last year.

CEO Steve Cutler said, “Icon’s results for the third quarter did not meet the expectations we had previously provided due to specific customer and division-level impacts.

“Our revenue shortfall was attributable to more material headwinds from two large customers undergoing budget cuts and changes in their development model, lower than anticipated vaccine-related activity, and ongoing cautiousness from biotech customers resulting in award and study delays,” he said.

Cutler went on to say the headwinds would continue for the rest of the year, adding that “we are taking decisive action to realign our resources to forecasted activity.”

He expanded on this in the Q&A section of Icon’s third quarter call, telling analysts the firm is “looking at where we have an excess of people in certain areas.”

Icon now expects revenue for the full year to be between $8,260 million and $8,300 million, representing a year over year increase of 1.7% to 2.2% but down from the $8,450 million to $8,550 million range it predicted earlier in the year.

Q3 deals

For the medium-term, Cutler remained upbeat, citing deals signed in Q3 as a source of optimism.

“The fundamentals of our business remain strong, and we saw further success in the quarter with a new top 10 pharma strategic partnership win, which has already started contributing to our pipeline of awards.

“This win, coupled with other recently executed partnerships, supports our outlook for growth over the medium term,” he said.

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