Good day, ladies and gentlemen, and welcome to the MedPhay Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time. As a reminder, this call may be recorded. I would now like to introduce your host for today's conference call, Lauren Morris, Medpace's Associate Director of Investors Relations.
Lauren, you may begin.
Good morning, and thank you for joining Medpace's Q2 2021 earnings conference call. Also on the call today is our President and CEO, August Trundle our CFO and COO of Laboratory Operations, Jesse Geiger and our Executive Director of Finance, Kevin Brady. Before we begin, I would like to remind you that our remarks and responses to your questions during this teleconference may include forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve inherent assumptions with known and unknown risks and uncertainties as well as other important factors that could cause actual results to differ materially from our current expectations. These factors, including the ongoing impact of COVID-nineteen on our business, are discussed in our Form 10 ks and other filings with the SEC.
Please note that we assume no obligation to update forward looking statements even if estimates change. Accordingly, you should not rely on any of today's Forward looking statements as representing our views as of any date after today. During this call, we will also be referring to certain non GAAP financial measures. These non GAAP measures are not superior to or a replacement for the comparable GAAP measures, but we believe these measures help a more complete understanding of results. A reconciliation of such non GAAP financial measures to the most directly comparable GAAP measures is available in our earnings press release and earnings call presentation slides provided in connection with today's call.
The slides are available in the Investor Relations section of our website at investor. Medpace.com. With that, I would now like to turn the call over to August
Thank you, Lauren. Good morning, everyone. In a press release issued yesterday, we announced Several changes to our senior management team. Effective August 1, Jesse Geiger will be elevated to the position of President And Kevin Brady will succeed Jesse as Chief Financial Officer. I will continue to serve as Chairman of the Board and Chief Executive Officer.
Jesse has served as our Chief Financial Officer since 2011, and he expanded that role in 2014 to include the title of Chief Operating Officer of Laboratory Operations. Jesse has played key roles during our rapid growth in the past decade, With oversight of the company's finance function, we are confident that Kevin's current and previous experience in public company finance will And now, I'd like to turn the call over to Jesse.
Thank you, August, and good morning, everyone. In the Q2, the business and funding environment remains strong. We continue to see robust RFP flow And our competitive win rate also remains strong. We did see some improvement in site activity in the quarter despite COVID-nineteen challenges. Our revenue for the Q2 of 2021 was 278,300,000 which represents a year over year increase of 35.8%.
Net new business awards entering backlog in the 2nd quarter increased 52.5 percent from the prior year to 387,600,000 This resulted in a 1.39 net book to bill. Ending backlog as of June 30 was 1,700,000,000 an increase of 29.8 percent from the prior year. And overall, our COVID-nineteen related work represented only 2% of both revenue and net new business awards in the 2nd quarter. We project that approximately $925,000,000 of backlog will convert to revenue in the next 12 months and backlog conversion in the 2nd quarter was 17.1% of beginning backlog. And with that, I will turn the call over to Kevin to review our financial performance in more detail.
Thank you, Jesse, and good morning to everyone listening in. As Jesse mentioned, revenue was $278,300,000 in the Q2 of 20 21, which represented year over year growth of 35.8% on a reported basis and 34.4 percent on a constant currency organic basis. EBITDA of 47,900,000 increased 36.9% compared to $35,000,000 in the Q2 of 2020. On a constant currency basis, 2nd quarter EBITDA increased 41.5% compared to the prior year. EBITDA margin for the 2nd quarter was 17.2 compared to 17.1% in the prior year period.
As expected, EBITDA margin declined sequentially reflecting increased cost related to the robust hiring. In the Q2 of 2021, net income was $39,900,000 compared to net income of $24,100,000 in the prior year period. Net income growth was primarily driven by higher EBITDA as well as a lower effective tax rate. Net income per diluted share for the quarter was $1.06 compared to $0.64 in the prior year period. Regarding customer concentration, Our top 5 and top 10 customers represent roughly 17% 24%, respectively, of our first half of twenty twenty one revenue.
In the second quarter, we generated $62,800,000 and cash flow from operating activities and our net days sales outstanding was negative 39.5 days. During the quarter, we repurchased approximately 343,000 shares at an average price of 163 point $6.1 for a total of $56,100,000 We have $196,400,000 Remaining under our current share repurchase authorization. We ended the 2nd quarter with $339,000,000 of cash, No outstanding debt and $50,000,000 of undrawn capacity on our revolving line of credit. Moving now to our updated guidance for 2021. We are now forecasting total revenue in the range of $1,110,000,000 to $1,150,000,000 for the full year 2021, representing growth of 19.9% to 24.2% Over 2020, total revenue of $925,900,000 Our 2021 EBITDA guidance is unchanged the range of $205,000,000 to $215,000,000 representing growth of 9.2% to 14.5% compared to EBITDA of $187,800,000 in 2020.
We anticipate our 2021 effective tax rate to be in the range of 11% to 12%. We have assumed 37,700,000 fully diluted shares for 2021 and there are no additional share repurchases in our guidance. We forecast 2021 net income in the range of $162,500,000 to $169,500,000 and earnings per diluted share in the range of $4.31 to 4 $0.50 with With that, I will turn the call back over to the operator, so we can take your questions.
Thank you. Thank you. Our first question comes from the line of John Kreger from William Blair. Your line is open.
Hello, good morning. This is Justin Lin speaking on behalf of John Kreger. So just I guess quick question on margins. So we see the margins were softer in Q2 than we expected. I guess, holiday trending versus internal And what exactly is causing the pressure in addition to the increased hiring pressure?
Thank you.
Yes. Justin, this is Kevin. I would say that overall, Dave, it is in line with what we were expecting. As we had stated In the Q1, we were anticipating some robust hiring carryover from the Q1 and Further into the Q2.
Got it. Thank you. And I have a second one, if I can see that in. So just a question on your DCT capabilities. Currently, I guess, what percentage of your clients are asking for this?
And how do you feel about your current capabilities to enroll, interact with and monitor patients remotely?
Yes, Justin, decentralized trial is really a function of or a component of a lot of different trials. I don't have an exact percentage, But we're operating well in a hybrid environment with our activities being Somewhat in person visiting sites and somewhat remote based monitoring, as well as utilizing Technologies wherever we can to connect directly with patients.
Sounds good. Thank you.
Thank you. Next question comes from the line of Dave Windley from Jefferies. Your line is open.
Hi, good morning. Thanks for taking my question. I wanted to ask in broad terms If there are factors that are limiting your ability to execute work and the spear, I'm trying to get at Based on the demand, based on the backlog that you have, could you be growing even faster? It was obviously very fast growth. If sites were fully open or if you were able to hire faster, are those rate limiting steps or are you basically keeping up?
Yes, Dave, maybe I'll take that question. Yes, look, I think we're keeping up well, but we it is So, yes, I think there are opportunities to grow faster if we were to approach other companies, but we'd have to scale more rapidly. And of course, we want to scale in a controlled way. And so I think the environment is In that way, kind of overheated. But we will have found that we can grow at this rate, roughly 20%
+%
and I think that's sustainable for while this environment lasts.
That's very helpful. August, thank you. In your restriction, are Maybe it's all of the above, but are you limiting on more attractive margin or less likely to cancel or what are the factors That are influencing what you take and what you pass on.
Yes, I mean, it's There are a number of factors, but critical is the likelihood of we feel Likelihood of the program progressing. So yes, lack of cancellation risk, good solid Science looks like there's further program ahead. So we may bid on a study that's a Phase 2, but we think there's a Phase 3 program opportunity ahead. But its relationship with the client is also critical. So prior relationship obviously takes higher priority one that we don't have a relationship with.
So it's multiple factors, Generally, what the future potential is for that client.
Very good. Thank you. And on the labor side, You had signaled that you would be hiring fairly aggressively. It sounds like that did happen. Is that a pace that you expect to either continue at or accelerate from for the rest of the year?
And then would you describe The cost pressure in the quarter from that labor, is it simply volume of hires or are you also seeing some wage
Sure. We're continuing to hire in line with The first two quarters, but late in the year does get a little bit more challenging in terms of adding staff just seasonally. But Jesse, go ahead.
No, no, you hit it August. Yes, we continue to plan to continue hiring at a pretty good pace as we move through the year as Best as we can, from a cost pressure standpoint, it is a competitive market as August mentioned earlier. We are seeing some pressures there. So it is a function of both the volume of hiring and some wage rate pressure, Which is both factored into our guidance range.
Got it. And then last question for me. Appreciate the update on the management for progression. Congrats to those with promotions. August, I wondered if you'd be willing to comment on if this influences any very significantly Your thoughts about your longevity in your current role, or not?
Should we Read anything into the announcement yesterday? Thank you.
Yes. Well, I think what you read in the announcements is I feel comfortable that if I were to That the company would be well handled. So I think there isn't a concern of whether I stay. But I have no near term expectation of leaving my role as CEO. And even when I do that, I would continue with involvement with the company, I think.
So, yes, so I think it's a longer term planning and growth of staff that we have.
Very good. Thank you. Appreciate it.
Your next question comes from the line of Sandy Draper from Truist. Your line is open.
Hi, this is Mitchell on for Sandy. Thanks for taking my question. I think you guys have answered it pretty well because it was mostly around the wage inflation. But I'm just wondering if you could add anything else to how you're going about the hiring environment and like what you're doing
The approach to hiring is pretty consistent with what we've done in the past. We target new hires, new grads, a lot of folks fresh out of school. We target to the numbers that we need to add to different departments to keep up with continued growth. So it's a heavy area of focus, but we really haven't changed on strategy as it relates to hiring. And then on retention, We're deploying a number of different strategies, making sure that compensation is well aligned with the market.
And then also the hiring also helps with retention of those that are dealing with the volume of work that we have right now.
Got it. Thank you.
Thank you. And I would like to turn the call over to Lauren Morris for closing remarks.
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 Q3 2021 earnings call.