Q1 2023 IQVIA Holdings Inc Earnings Call

April 27, 2023

Ari Bousbib: Recently, we introduced a new cloud-based platform within our research site network that will streamline document workflows and allow real-time collaboration among study teams. We already deployed this new technology to approximately 15% of IQVIA network sites across 28 countries, and we expect to deploy to 40% of our sites in the next 12 months. The goal of deploying this technology at the site is to increase site productivity, which frees up more time for site support, compliance reviews, and continuous monitoring of patient safety and study quality, all of which are very important, especially in an environment where we experience staff shortages at the site. Finally, a couple of nice accolades for our global IQVIA team.

Speaker 1: We introduced a new cloud-based platform within our research site network that will streamline document workflows and allow real-time collaboration among study teams.

Speaker 1: We already deployed this new technology to approximately 15% of IQVIA network sites across 28 countries and we expect to deploy to 40% of our sites in the next 12 months. The goal of deploying this technology at the site is to provide the best quality technology for our industry.

Speaker 1: is to increase site productivity, which frees up more time for site support, compliance reviews, and continuous monitoring of patient safety and study quality, all of which are very important, especially in an environment where we experience staff shortages at the site.

Ari Bousbib: First, I am proud to share that our lab business received the prestigious Singaporean President's Certificate of Commendation, which is awarded to organizations that had a significant impact in the fight against COVID-19. In fact, five of our employees in Singapore received the Public Service Medal Award for their outstanding contributions to manage the impact of the pandemic. This is a nice recognition of the unique role we play in supporting public health. Second, our Scotland-based lab business recently achieved a global green lab certification for its commitment to practicing sustainable science. This certification is recognized by the United Nations, quote unquote, "Race to Zero Global" campaign as the international gold standard for lab sustainability best practices towards a zero-carbon future. I will now turn it over to Ron for more details on our financial performance.

First, I am proud to share that our lab business received the prestigious Singaporean President's Certificate of Commendation, which is awarded to organizations that had a significant impact in the fight against COVID-19. In fact, five of our employees in Singapore received the Public Service Medal Award for their outstanding contributions to manage the impact of the pandemic. This is a nice recognition of the unique role we play in supporting public health. Second, our Scotland-based lab business recently achieved a global green lab certification for its commitment to practicing sustainable science. This certification is recognized by the United Nations, quote unquote, "Race to Zero Global" campaign as the international gold standard for lab sustainability best practices towards a zero-carbon future. I will now turn it over to Ron for more details on our financial performance.

Speaker 1: Finally, a couple of nice accolades for our global IQVIA team. First, I am proud to share that our lab business received the prestigious Singaporean President's Certificate of Commendation, which is awarded to organizations that had a significant impact here.

Speaker 1: in the fight against COVID-19. In fact, five of our employees in Singapore received the Public Service Medal Award for their outstanding contributions to manage the impact of the pandemic.

Speaker 1: This is a nice recognition of the unique role we play in supporting public health.

Speaker 1: Second, our Scotland-based lab business recently achieved a global Green Lab certification for its commitment to practicing sustainable science.

Speaker 1: This certification is recognized by the United Nations' Race to Zero Global Campaign as the international gold standard for lab sustainability best practices towards a zero carbon future.

Ronald Bruehlman: Thanks, Ari, and good morning, everyone. Let's start by reviewing revenue. Q1 revenue of $3.652 billion grew 2.4% on a reported basis and 4.7% at constant currencies. In the quarter, COVID-related revenues were approximately $150 million, which was down about $230 million versus Q1 2022. In our base business, that is excluding all COVID-related work from both this year and last, organic growth at constant currency was 11%. Technology and Analytics Solutions revenue was $1.444 billion, up 0.3% reported and 2.9% at constant currency. Excluding all COVID-related work, organic growth at constant currency in TAS was 6%.

Speaker 1: I will now turn it over to Ron for more details on our financial performance.

Speaker 2: Thanks, Ari, and good morning, everyone. Let's start by reviewing revenue.

Speaker 2: First quarter revenue of $3,652,000,000 grew 2.4% on a reported basis and 4.7% at constant least.

Speaker 2: In the quarter, COVID-related revenues were approximately $150 million, which was down about $230 million versus the first quarter of 2022.

Speaker 2: In our base business, that is excluding all COVID-related work from both this year and last, organic growth at constant currency was 11%.

Speaker 2: Technology and analytics solutions revenue was $1,444,000,000, up 0.3% reported and 2.9% at constant currency.

Speaker 2: Excluding all COVID-related work, organic growth at constant currency in TAS was 6%. R&D solutions revenue of $2 billion, $26 million was up 4.8% reported and 6.5% at constant currency and excluding all COVID-related work, organic growth at constant currency in R&DS was 17%.

Ronald Bruehlman: R&D Solutions revenue of $2.026 billion was up 4.8% reported, and 6.5% at constant currency, and excluding all COVID-related work, organic growth at constant currency in R&DS was 17%. Finally, Contract Sales & Medical Solutions, or CSMS, revenue of $182 million declined 6.7% reported, and 1% at constant currency. Excluding all COVID-related work, the organic growth decline at constant currency was also 1% in CSMS. Let's move down to P&L. Adjusted EBITDA was $851 million for Q1. That's growth of 4.8%. GAAP net income was $289 million, and GAAP diluted earnings per share was $1.53.

R&D Solutions revenue of $2.026 billion was up 4.8% reported, and 6.5% at constant currency, and excluding all COVID-related work, organic growth at constant currency in R&DS was 17%. Finally, Contract Sales & Medical Solutions, or CSMS, revenue of $182 million declined 6.7% reported, and 1% at constant currency. Excluding all COVID-related work, the organic growth decline at constant currency was also 1% in CSMS. Let's move down to P&L. Adjusted EBITDA was $851 million for Q1. That's growth of 4.8%. GAAP net income was $289 million, and GAAP diluted earnings per share was $1.53.

Speaker 2: Finally, contract sales and medical solutions or CSMS revenue of $182 million declined 6.7% reported and 1% at constant currency. And excluding all COVID-related work, the organic growth declined at constant currency with also 1% in CSMS.

Speaker 2: Smooth down the P and L adjusted to EBITDA was 851Million dollars for the 1st quarter. That's growth at 4.8%.

Ronald Bruehlman: Adjusted net income was $462 million, and adjusted earnings per share diluted was $2.45. Now, as Ari highlighted, R&D Solutions continues its strong momentum. This graph shows the growth of our backlog over the past three years, which demonstrates the sustained growth of our clinical business. Our backlog at 31 March stood at a record $27.9 billion, which was up over 40% over the last three years and growing 10% year over year. Okay, reviewing the balance sheet. At 31 March, cash and cash equivalents totaled $1.494 billion. Gross debt was $13.176 billion, and that resulted in net debt of $11.682 billion. Our net leverage ratio ended the quarter at 3.4x trailing twelve-month adjusted EBITDA.

Adjusted net income was $462 million, and adjusted earnings per share diluted was $2.45. Now, as Ari highlighted, R&D Solutions continues its strong momentum. This graph shows the growth of our backlog over the past three years, which demonstrates the sustained growth of our clinical business. Our backlog at 31 March stood at a record $27.9 billion, which was up over 40% over the last three years and growing 10% year over year. Okay, reviewing the balance sheet. At 31 March, cash and cash equivalents totaled $1.494 billion. Gross debt was $13.176 billion, and that resulted in net debt of $11.682 billion. Our net leverage ratio ended the quarter at 3.4x trailing twelve-month adjusted EBITDA.

Speaker 2: Gap net income was $289 million and gap diluted earns per share was $1.53.

Speaker 2: adjusted net income was $462 million and adjusted earnings per share diluted was $2.45.

Speaker 2: Now, as Ari highlighted, R&D Solutions continues its slung-run manner.

Speaker 2: This graph shows the growth of our backlog over the past three years, which demonstrates the sustained growth of our clinical business.

Speaker 2: $27.9 billion.

Speaker 2: which was up over 40% over the last three years and growing 10% year over year.

Speaker 2: Cash and cash equivalents total $1,494,000,000. Gross debt was $13,176,000,000. And that resulted in net debt of $11,682,000,000. Our net leverage ratio ended the quarter 3.4 times trailing 12 months adjusted to the dot.

Ronald Bruehlman: First quarter cash flow from operations was strong at $417 million, and CapEx was $164 million, resulting in free cash flow of $253 million. In the quarter, we repurchased $129 million of our shares, and that leaves us with slightly over $1.2 billion remaining under the current program. Okay, let's go now to guidance. Guidance for the full year of 2023 remains unchanged. We continue to expect revenue, excluding COVID-related work, to grow organically at constant currency between 9% and 11%. Now, this revenue guidance continues to assume about 100 basis points of contribution from acquisitions and approximately $600 million of COVID-related revenue step down versus 2022.

First quarter cash flow from operations was strong at $417 million, and CapEx was $164 million, resulting in free cash flow of $253 million. In the quarter, we repurchased $129 million of our shares, and that leaves us with slightly over $1.2 billion remaining under the current program. Okay, let's go now to guidance. Guidance for the full year of 2023 remains unchanged. We continue to expect revenue, excluding COVID-related work, to grow organically at constant currency between 9% and 11%. Now, this revenue guidance continues to assume about 100 basis points of contribution from acquisitions and approximately $600 million of COVID-related revenue step down versus 2022.

Speaker 2: First quarter cash flow from operations was strong at $417 million and CapEx was $164 million, resulting in free cash flow of $253 million.

Speaker 2: In the quarter, we repurchased $129 million in those shares.

Speaker 2: And that leaves us with slightly over 1.2 billion dollars remaining under the current program.

Speaker 2: Let's go now to guidance. Guidance for the full year 2023 remains unchanged.

Speaker 2: We continue to expect revenue.

Speaker 2: excluding COVID-related work to grow organically at constant currency between 9 and 11 percent.

Speaker 2: Now this revenue guidance continues to assume about 100 basis points of contribution from acquisitions.

Speaker 2: And approximately 600M dollars of COVID related revenue step down versus 2022.

Ronald Bruehlman: We're also reaffirming our guidance on adjusted EBITDA of $3.625 billion to $3.695 billion, and that represents year-over-year growth of 8.3% to 10.4%. Lastly, we're reaffirming our guidance on adjusted diluted EPS of $10.26 to $10.56. This adjusted diluted earnings per share guidance includes a year-over-year impact of the step up in interest rates and the increase in the UK corporate tax rate. Together, these non-operational items impact the year-over-year growth rate by approximately 10 percentage points. Excluding these items, adjusted diluted earnings per share is expected to grow 11% to 14%. Let's move to our Q2 guidance.

We're also reaffirming our guidance on adjusted EBITDA of $3.625 billion to $3.695 billion, and that represents year-over-year growth of 8.3% to 10.4%. Lastly, we're reaffirming our guidance on adjusted diluted EPS of $10.26 to $10.56. This adjusted diluted earnings per share guidance includes a year-over-year impact of the step up in interest rates and the increase in the UK corporate tax rate. Together, these non-operational items impact the year-over-year growth rate by approximately 10 percentage points. Excluding these items, adjusted diluted earnings per share is expected to grow 11% to 14%. Let's move to our Q2 guidance.

Speaker 2: We're also reaffirming our guidance on adjusted EBITDA of 3,625,000,000 dollars to 3,695,000,000 dollars. And that represents year-over-year growth of 8.3 to 10.4 percent.

Speaker 2: Lastly, we're reaffirming our guidance on adjusted diluted EPS of $10.26 to $10.56.

Speaker 2: And this adjusted diluted earnings per share guidance includes a year over year impact of the step up in interest rates in the increase in the UK corporate tax rate. Together these non-operational items impact the year over year growth rate by approximately 10 percentage points.

Speaker 2: excluding these items, adjusted diluted earnings per share.

Ronald Bruehlman: Now, in Q2, we expect revenue to be between $3.675 billion and $3.75 billion. That's growth of 3.7% to 5.8% on a constant currency basis, and 3.8% to 5.9% on a reported basis. Adjusted EBITDA is expected to be between $850 million and $875 million, which would be up 6.3% to 9.4%. Adjusted diluted EPS is expected to be between $2.30 and $2.44, declining 5.7% to flat on a year-over-year basis.

Now, in Q2, we expect revenue to be between $3.675 billion and $3.75 billion. That's growth of 3.7% to 5.8% on a constant currency basis, and 3.8% to 5.9% on a reported basis. Adjusted EBITDA is expected to be between $850 million and $875 million, which would be up 6.3% to 9.4%. Adjusted diluted EPS is expected to be between $2.30 and $2.44, declining 5.7% to flat on a year-over-year basis.

Speaker 2: is expected to grow 11 to 14 percent.

Speaker 2: Let's move to our second quarter guidance. In Q2, we expect revenue to be between $3,675,000,000 and $3,750,000,000. That's growth of 3.7 to 5.8% on a constant currency basis.

Speaker 2: And 3.8 to 5.9% on a reported basis.

Speaker 2: Adjusted EBITDA is expected to be between $850 million and $875 million.

Speaker 2: which would be up 6.3 to 9.4 percent.

Speaker 2: And adjusted diluted EPS is expected to be between $2.30 and $2.44, declining 5.7% to flat on a year-over-year basis.

Ronald Bruehlman: Now, keep in mind that the second quarter is the toughest compare for interest expense, because we had a very favorable $1 billion swap roll-off on 31 March, and it was also a year ago that rates started rising. So excluding the step-up in interest expense and the increased UK tax rate, we expect adjusted diluted EPS to grow between 8% and 13% in the second quarter. Now, all of our guidance assumes that foreign currency rates as of 25 April continue for the balance of the year. So to summarize, Q1 was another solid quarter of financial performance. We delivered revenue growth of 11% organic, excluding the impact of foreign exchange and COVID-related work. Underlying demand in the industry and in our business remains healthy, with our RFPs accelerating in Q1, up 15% sequentially versus Q4 2022.

Now, keep in mind that the second quarter is the toughest compare for interest expense, because we had a very favorable $1 billion swap roll-off on 31 March, and it was also a year ago that rates started rising. So excluding the step-up in interest expense and the increased UK tax rate, we expect adjusted diluted EPS to grow between 8% and 13% in the second quarter. Now, all of our guidance assumes that foreign currency rates as of 25 April continue for the balance of the year. So to summarize, Q1 was another solid quarter of financial performance. We delivered revenue growth of 11% organic, excluding the impact of foreign exchange and COVID-related work. Underlying demand in the industry and in our business remains healthy, with our RFPs accelerating in Q1, up 15% sequentially versus Q4 2022.

Speaker 2: And keep in mind the second quarter is the toughest compare for interest expense because we had a very favorable 1Billion dollar swap Woe off on March 31, and it was also a year ago that rates started rising. So excluding the step up of an interest expense and the increased UK tax rate, we expect.

Speaker 2: adjusted the rate of EPS to grow between 8 and 13 percent in the second quarter. Now, all of our guidance assumes that foreign currency rates as of April 25th continue for the balance of the year.

Speaker 2: So to summarize, Q1 was another solid quarter of financial performance. We delivered revenue growth of 11% organic, excluding the impact of foreign exchange and COVID-related work.

Speaker 2: Underlying demand in the industry and in our business remains healthy with our RFPs accelerating in Q1 up 15% sequentially versus Q4 2022.

Ronald Bruehlman: Quarterly net new bookings were $2.6 billion, and our industry-leading backlog reached a new record of $27.9 billion, representing growth of over 10% year-over-year. We've been navigating well through the choppy macro environment and delivering on our numbers. Despite some of the cautiousness we've observed in the short cycle discretionary spend, thanks to the resilience and the rest of the portfolio, which is mostly long cycle and thus less affected by macro turbulence. Therefore, we are reaffirming our full year guidance of 9% to 11% organic revenue growth at constant currency, excluding COVID-related work, and 11% to 14% adjusted EPS growth, excluding non-operational items. And with that, let me hand it back over to the operator for Q&A.

Quarterly net new bookings were $2.6 billion, and our industry-leading backlog reached a new record of $27.9 billion, representing growth of over 10% year-over-year. We've been navigating well through the choppy macro environment and delivering on our numbers. Despite some of the cautiousness we've observed in the short cycle discretionary spend, thanks to the resilience and the rest of the portfolio, which is mostly long cycle and thus less affected by macro turbulence. Therefore, we are reaffirming our full year guidance of 9% to 11% organic revenue growth at constant currency, excluding COVID-related work, and 11% to 14% adjusted EPS growth, excluding non-operational items. And with that, let me hand it back over to the operator for Q&A.

Speaker 2: Quarterly net new bookings were $2.6 billion, and our industry-leading backlog reached a new record of $27.9 billion.

Speaker 2: representing growth of over 10% year over year.

Speaker 2: We've been navigating well through the choppy macro environment and delivering on our numbers. Despite some of the cautiousness we've observed in the short cycle discretionary span, thanks to the resilience and the rest of the portfolio, which is mostly the long cycle and that's less affected by macro turbulence. Therefore, we've been navigating well through the choppy macro environment and delivering on our numbers.

Speaker 2: We are reaffirming our full year guidance of 9 to 11% organic revenue growth at constant currency, excluding coded related work and 11 to 14% adjusted EPS growth, excluding non operational items.

Speaker 2: And with that, let me hand it back over to the operator for Q&A.

Operator: Thank you. At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. We request that you please limit yourself to just one question so that others in the queue may participate as well. We'll pause for a moment to compile the Q&A roster. Your first question comes from the line of Shlomo Rosenbaum at Stifel. Your line is open.

Speaker 3: Thank you. At this time, I would like to remind everyone in order to ask a question, press star, then the number one on your telephone keypad. We request that you please limit yourself to just one question so that others in the queue may participate as well.

Shlomo Rosenbaum: Hi, thank you very much for taking my questions. Ari, can you talk a little bit about the nature of the backlog burn? You had very strong bookings, you got strong book-to-bill, but the amount of revenue expected to or backlog to convert to revenue, it seems kind of consistent for this quarter to last quarter. Or is there a change of mix over there? Is that a rounding item, or is there something else that might be going on over there?

Speaker 4: Hi, thank you very much for taking my questions. Ari, can you talk a little bit about the nature of the backlog burn? You had very strong bookings, you got strong book to bill, but the amount of revenue expected to – or backlog to convert to revenue seems kind of consistent for this quarter to last quarter. Is there any –

Ari Bousbib: Yeah, thank you, Shlomo. No, look, we had very strong bookings. It was one of our highest bookings quarter. And there's. I wouldn't read anything. It's not the first time, by the way, that Q1 next twelve months revenue from bookings is essentially flat to Q4 next twelve months bookings. I can't detect any seasonality to that, but it's not the first time it happened, so I wouldn't read anything into it at all. It's just a question of mix, you know, months of pass-throughs that are, you know, taken into the quarter and/or or delayed. And, you know, we're reverting to more regular mix of projects with, as you know, an increasing share in oncology, which typically burn a little slower.

Speaker 1: from bookings is essentially flat to Q4 next 12 months bookings. I can't detect any seasonality to that, but it's not the first time it happens. So I wouldn't read anything into it at all. It's just a question of mixed...

Speaker 1: You know, months of pass-throughs that are taken into the quarter or delayed. And we're reverting to more regular mix of projects with, as you know, an increasing share in oncology, which typically burn a little slower. I might have a little bit at the margins.

Ari Bousbib: You know, that might have a little bit at the margins of an impact, but I wouldn't read anything into it.

You know, that might have a little bit at the margins of an impact, but I wouldn't read anything into it.

Shlomo Rosenbaum: Okay. Thank you.

Ari Bousbib: Thanks, Shlomo.

Speaker 1: of an impact, but I wouldn't read anything into it. OK, thank you.

Operator: Thank you. Your next question comes from the line of Anne Samuel at J.P. Morgan. Your line is open.

Speaker 3: Thanks, Salma. Thank you. Your next question comes from the line of Ann Samuel at JP Morgan. Your line is open.

Ronald Bruehlman: Hi, thank you so much for taking the question. I was hoping maybe you could speak to some of the dynamics within the TAS business. You know, in the Q4, the analytics and consulting business was impacted, but some of that maybe seemed like it was unique to December purchasing patterns. So how much of this is carryover from what you saw in the Q4? And then, you know, what's driving your confidence that it's gonna come back in the remainder of the year so that you can hit your guidance?

Anne Samuel: Hi, thank you so much for taking the question. I was hoping maybe you could speak to some of the dynamics within the TAS business. You know, in the Q4, the analytics and consulting business was impacted, but some of that maybe seemed like it was unique to December purchasing patterns. So how much of this is carryover from what you saw in the Q4? And then, you know, what's driving your confidence that it's gonna come back in the remainder of the year so that you can hit your guidance?

Speaker 5: Hi, thank you so much for taking the question. I was hoping maybe you could speak to some of the dynamics within the TAS business. You know, in the fourth quarter, the analytics and consulting business was impacted, but some of that maybe seemed like it was unique to December purchasing patterns. So how much of this is carryover from what you saw in the fourth quarter? And then, you know, what's driving your confidence that it's going to come back in the...

Ari Bousbib: Yeah. Thank you, Anne. It's a good question. Look, TAS growth in the first quarter was within the range we expected. You are correct that the guidance we gave on an organic, constant currency, ex-COVID basis, for the year, I think our guidance is 7% to 9%, and therefore, 6% clearly is right under that. But we did, you know, tell you that we did fully expect Q1 to be just under that. So our expectations were more in the 6% to 7%, 6% to 8% for the first quarter. And we expected a slower start, as you suggest, due to the cautiousness we saw in December, in customers' discretionary spending.

Speaker 1: on an organic constant currency ex-COVID basis.

Speaker 1: for the year, I think our galaxy is 7 to 9 percent. And therefore, 6 percent clearly is right under that. But we did tell you that we did fully expect Q1 to be just under that. So our expectations were more in the 6 to 7, 6 to 8 percent for Q1.

Speaker 1: the first quarter and we expected a slower start, as you suggest, due to the cautiousness we saw in December in customers discretionary spending. And so we assumed this was going to spill over, as you suggest, into the Q1 and that's why we assumed a slower start.

Ari Bousbib: And so we assumed this was gonna spill over, as you suggest, into the Q1, and that's why we assumed a slower start in the year for this business. The reason why it's a little lower than our long-term growth expectation is due to the analytics and consulting business piece of TAS. That is about, I wanna say, just under 25% of the total business in TAS. And as we said many times before, it's the shortest cycle and contains the most discretionary spend activity of the entire TAS portfolio. So what we are seeing is not cancellations of projects, not decisions to not conduct the projects. For the most part, these are projects that need to be done, you know, pricing and market access studies, as an example, have to be done at some point.

And so we assumed this was gonna spill over, as you suggest, into the Q1, and that's why we assumed a slower start in the year for this business. The reason why it's a little lower than our long-term growth expectation is due to the analytics and consulting business piece of TAS. That is about, I wanna say, just under 25% of the total business in TAS. And as we said many times before, it's the shortest cycle and contains the most discretionary spend activity of the entire TAS portfolio. So what we are seeing is not cancellations of projects, not decisions to not conduct the projects. For the most part, these are projects that need to be done, you know, pricing and market access studies, as an example, have to be done at some point.

Speaker 1: in the year for this business. The reason why it's a little lower than our long-term growth expectation is due to the analytics and consulting business.

Speaker 1: piece of TAZ. That is about, I want to say, just under 25% of the total business in TAZ. And as we said many times before, it's the shortest cycle and contains the most discretionary spend.

Speaker 1: activity of the entire task portfolio. So what we are seeing is not

Speaker 1: cancellations of projects, not decisions to not conduct the project. For the most part, these are projects that need to be done. Pricing and market access studies, as an example, have to be done at some point. The discretionary...

Ari Bousbib: But the discretionary aspect applies to timing, for the most part, okay? No one does projects that they don't need to do. These are projects that need to be done, but they don't need to be done right this second. And we are seeing customers delaying decisions and pushing things to the right. That is what gives us confidence that in the latter part of the year, those projects will have to be done. So that's why we maintain our 7% to 9% organic constant currency ex-COVID guidance for the year. Now, we expect that cautiousness to continue into Q2, and we are assuming growth so far in line with Q1. Again, we're not seeing any customers walking away from projects or canceling anything. It's just consistent with what we saw at the end of Q4, delaying a project.

But the discretionary aspect applies to timing, for the most part, okay? No one does projects that they don't need to do. These are projects that need to be done, but they don't need to be done right this second. And we are seeing customers delaying decisions and pushing things to the right. That is what gives us confidence that in the latter part of the year, those projects will have to be done. So that's why we maintain our 7% to 9% organic constant currency ex-COVID guidance for the year. Now, we expect that cautiousness to continue into Q2, and we are assuming growth so far in line with Q1. Again, we're not seeing any customers walking away from projects or canceling anything. It's just consistent with what we saw at the end of Q4, delaying a project.

Speaker 1: aspect applies to timing for the most part. Okay, no one does projects that they don't need to do. These are projects that need to be done, but they don't need to be done right this second. And we are seeing customers delaying decisions and pushing things to the right.

Speaker 1: That is what gives us confidence that in the latter part of the year, those projects will have to be done. That's why we maintain our 7-9 percent organic constant currency ex-COVID guidance for the year. The next step is to maintain the 5-9 percent organic constant currency ex-COVID guidance for the year. That's why we maintain our 7-9 percent organic constant currency ex-COVID guidance for the year.

Speaker 1: Now, we expect that consciousness to continue into the second quarter, and we are assuming growth so far in line with the first quarter.

Speaker 1: Again, we're not seeing any customers walking away from projects or canceling anything. It's just consistent with what we saw at the end of the field for delaying a project. We do expect the situation to improve in the second half because the pipelines are stronger and the customers eventually need to actually spend on those projects.

Ari Bousbib: We do expect the situation to improve in the second half because the pipeline are stronger, and the customers eventually need to actually spend on those projects.

We do expect the situation to improve in the second half because the pipeline are stronger, and the customers eventually need to actually spend on those projects.

Elizabeth Anderson: That's extremely helpful, caller. Thank you so much.

Anne Samuel: That's extremely helpful, caller. Thank you so much.

Ari Bousbib: Thank you.

Speaker 5: That's extremely helpful, Kaller. Thank you so much. Thank you.

Operator: Your next question comes from the line of David Windley at Jefferies. Your line is open.

David Windley: Well, thanks for taking my question. Good morning. Ari, I wondered if you could talk in the R&D business, as you highlight strong bookings, I guess, seasonally different from the fourth quarter. The thing that we're seeing, I guess, in our data review, is that a lot of studies, similar to what you're describing in TAS, in consulting, that a lot of studies are kind of sitting in a limbo point and not moving forward into first patient in and kind of more productive revenue stages of the trial. I wondered if you have some insights into that, and if you know, any of your tools can help to move those forward, or is it kind of a funding and financial issue that is keeping them from moving forward? I'd be curious for your views there.

Speaker 4: Your next question comes from the line of David Windley at Jefferies. Your line is open. Thanks for taking my question. Good morning. Ari, I wondered if you could talk in the R&DS business as you highlight strong bookings, I guess seasonally different from the fourth quarter.

Speaker 4: The thing that we're seeing, I guess, in our data review is that a lot of studies similar to what you're describing in TAS in consulting, that a lot of studies are kind of sitting in a limbo point and not moving forward into first patient in and kind of more productive revenue stages of the trial. And I wondered if you have some insights into that and if

Speaker 4: any of your tools can help to move those forward? Or is it a funding and financial issue that is keeping them from moving forward? We'd be curious your views there.

Ari Bousbib: Okay. Well, David, good morning, and thanks for the question. I wanna use the opportunity to state as clearly and definitively as I can, we simply are not, I repeat, we are not seeing any of what you suggest. And no one is. First of all, on the funding question, I don't know how many times I'm going to repeat it. I've been doing this for five quarters in a row. We are not seeing any funding issues. In my introductory remarks, I share some of the statistics, that actually everything is up on the funding front. So we are not seeing any delays, any unusual cancellations, any postponing of decision-making within our portfolio. It could be that others are seeing that, we just are not seeing it. Once again, the overall RFP flow is at a record high.

Speaker 1: use the opportunity to state as clearly and definitively as I can. We simply are not, I repeat we are not seeing any...

Speaker 1: on the funding front.

Speaker 1: So we are not seeing any delays, any unusual cancellations, any postponing of decision-making within our portfolio. It could be that others are seeing that we just are not seeing it. Once again, the overall RSP flow.

Ari Bousbib: It's up 15% sequentially versus Q4 of 2022. Both the mid and the EBP segments are up strong double digits. I said before, it's up 15%. The qualified pipeline, which is again an even earlier indicator, is up almost, you know, 8%. It's actually over 8% year over year, and it's almost $15 billion with, again, a record qualified pipeline. The total pipeline is over $25 billion, but also mid, more than 5% growth year over year. $2.6 billion of net bookings in the quarter. You know, it's more than the entire backlog of, you know, some of our smaller competitors out there.

It's up 15% sequentially versus Q4 of 2022. Both the mid and the EBP segments are up strong double digits. I said before, it's up 15%. The qualified pipeline, which is again an even earlier indicator, is up almost, you know, 8%. It's actually over 8% year over year, and it's almost $15 billion with, again, a record qualified pipeline. The total pipeline is over $25 billion, but also mid, more than 5% growth year over year. $2.6 billion of net bookings in the quarter. You know, it's more than the entire backlog of, you know, some of our smaller competitors out there.

Speaker 1: both the need that the EBP segments are strong double digits.

Speaker 1: It's actually over 8% year over year, and it's almost $15 billion with, again, a record qualified pipeline. The total pipeline is over $25 billion, but also with more than 5% growth year over year. 2.6 billion dollars of net bookings in the quarter.

Speaker 1: It's more than the entire backlog of some of our smaller competitors out there. Our book to build 128 is extremely strong in the current environment. I think from what I've seen, the highest of any of our peers.

Ari Bousbib: Our Book-to-Bill 1.28 is extremely strong in the current environment, and I think from what I've seen, the highest of any of our peers. Backlog is up more than 10% year over year. That's on a reported basis. Excluding FX, it's up 11.3%. So, you know, again, what I'm trying to share some metrics with you here. If we look at by segment, again, it's across the board, large, mid, EBP. I've got a lot of numbers here, but they everything is, honestly, everything is green here. Nick, you have any other color to add to this?

Our Book-to-Bill 1.28 is extremely strong in the current environment, and I think from what I've seen, the highest of any of our peers. Backlog is up more than 10% year over year. That's on a reported basis. Excluding FX, it's up 11.3%. So, you know, again, what I'm trying to share some metrics with you here. If we look at by segment, again, it's across the board, large, mid, EBP. I've got a lot of numbers here, but they everything is, honestly, everything is green here. Nick, you have any other color to add to this?

Speaker 1: Our backlog is up more than 10% year over year. That's on a reported basis, excluding FX, it's up 11.3%. So I, you know, again, I'm trying to share some metrics with you here. If we look at by segment, again, it's across the board, large, mid, EDP.

Speaker 1: I've got a lot of numbers here, but everything is, honestly, everything is green here. Nick, you have any other color to add to this? Yeah, I guess, Dave, I think the only thing I would say there is, you know, we saw your question sort of earlier this week and talked to the team, and we're not seeing any...

[Company Representative] (IQVIA Holdings Inc.): Yeah, I guess, Dave, I think the only thing I would say there is, you know, we saw your question sort of earlier this week and talked to the team, and we're not seeing any sort of slowdown in terms of clients not wanting to start trials. I mean, as soon as they're signing and pushing, you know, and like getting ready, they are pushing trials forward. So, you know, we're not seeing any delays, clients trying to slow down starts. You know, we are seeing trials move forward and not, you know, and not seeing the dynamics that you're asking about.

Speaker 2: clients trying to slow down starts. You know, we are seeing trials move forward and not seeing the dynamics that you're asking about. Yeah, and Dave, if there's any slowness anywhere, it's just in some of the execution because of the.

Ronald Bruehlman: Yeah, and Dave, if there's any slowness anywhere, it's just in some of the execution because of the labor issues at some of the sites. But that would be the one place where we could burn faster and the industry could burn faster if there weren't the labor issues at the sites.

Speaker 1: labor issues at some of the sites. That would be the one place where we could burn faster and the industry could burn faster if there weren't the labor issues at the sites. Right. As I mentioned in my introductory remarks, we have been able to offset some of that unfavorable impact, the stock shortages that Ron just brought up and we talked about before.

[Company Representative] (IQVIA Holdings Inc.): Right.

Ari Bousbib: As I mentioned in my introductory remarks, we have been able to offset some of that unfavorable impact, the staff shortages that Ron just brought up and we talked about before, because site selection has been accelerating. I mentioned it was up double digits year over year, and that increased productivity helped us in the quarter, and we expect will continue to do so the rest of the year. We also, I mentioned also in my introductory remarks, are introducing rapidly more technology at the site in order to free up personnel time and increase productivity. Thank you.

Speaker 1: because site selection has been accelerating. I mentioned it was up double digits year over year, and that increased productivity helped us in the quarter, and we expect we'll continue to do so the rest of the year. We also, I mentioned also in my introductory remarks, are introducing rapidly more technology at the site in order to free up companies' functionality andinging much more quickly than the last one once the PRIOT thing slowly has being … Kavanaugh that needs to be()

David Windley: Yeah, very, very fulsome answer. If I could just add to that. I mean, there's been a lot of companies this week that have attributed, you know, weakness to bio- I mean, there are a lot of other companies seeing, you know, dramatic slowdowns. Maybe you could talk about how your positioning or your stage of the pipeline is different, that also protects you from what they are seeing, Thermo, Danaher, Sartorius, etc.

Speaker 4: Thank you. Yeah, very, very fulsome answer. If I could just add to that, I mean, there's been a lot of companies this week that have attributed weakness to biotech. I mean, there are a lot of other companies seeing dramatic slowdowns.

Speaker 4: Maybe you could talk about how your positioning or your stage of the pipeline is different that also protects you from what they are seeing. Thermo, Danver, Tartorias, etc.

Ari Bousbib: Yeah. I mean, the answer is in your question. We have a very strong momentum. We operate. The vast majority of what we do is in the sweet spot of the clinical trial process. You know, it's phase three stuff. We're not affected by the primate issue, zero, zero. And even if the primate issue continues for the next three years, you wouldn't see it at all in our numbers. We've already looked at that. And we continue to gain share. I know I gave examples on the FSP segment. It's true across the board. In oncology, we just are winning in the marketplace. We displaced incumbents in a number of occasions with large clients.

Speaker 1: Yeah, I mean the answer is in your question. We have a very strong momentum. We operate the vast majority of what we do in the sweet spot of the clinical trial process. You know, it's pastry stuff.

Speaker 1: We're not affected by the primate issue zero, zero. And even if the primate issue continues for the next three years, you wouldn't see it at all in our numbers. We've already looked at that. And we continue to gain share. I know I gave examples on the FSP segment, it's true across the board in oncology.

Ari Bousbib: I think, you know, I don't see any really no issues whatsoever on the R&DS front, no, save for the execution and operational issues we have encountered. I mentioned that the attrition levels are coming down. I mean, I said before that the peak of the attrition, you know, a year ago or so, we had more than 20% attrition, which is horrendous. And we're now back to, I said, pre-pandemic levels, actually, we're below that, which is barely over 10%, which is amazing, and very good. And that enables us to do a lot more work a lot faster. Thank you, David.

I think, you know, I don't see any really no issues whatsoever on the R&DS front, no, save for the execution and operational issues we have encountered. I mentioned that the attrition levels are coming down. I mean, I said before that the peak of the attrition, you know, a year ago or so, we had more than 20% attrition, which is horrendous. And we're now back to, I said, pre-pandemic levels, actually, we're below that, which is barely over 10%, which is amazing, and very good. And that enables us to do a lot more work a lot faster. Thank you, David.

Speaker 1: are on the S front, they're not safe for the execution and operation issues we have encountered. I mentioned that the attrition levels are coming down. I mean, I said before that the peak of the attrition, you know, a year ago or so, we had more than 20% attrition, which is horrendous. And we're now back to, I said, pre-pandemic levels, actually we're below that.

Speaker 1: which is barely over 10%, which is amazing and very good. And that enables us to do a lot more work a lot faster. Thank you, David. Yeah, thank you.

David Windley: Yeah, thank you.

Operator: Your next question comes from the line of Eric Coldwell at Baird. Your line is open.

Speaker 3: Your next question comes from the line of Eric Coldwell at Baird. Your line is open.

Eric Coldwell: Thanks. Good morning. I want to hit on reimbursables on a couple of fronts. First off, on revenue. With such a big COVID comp this quarter, I would have expected less reimbursable revenue. It looks like it actually grew quite a bit faster than service revenue. So, you know, what is the dynamic there? We're seeing mixed bag all over the industry in terms of the pass-through volatility. With that big COVID headwind, I would have expected less, you did more. Is there something underlying or outside of COVID exposure that's driving the reimbursables higher, or is it just company-specific contract timing?

Speaker 6: Thanks good morning. I want to hit on reimbursables on on a couple of fronts. 1st off on revenue was such a big cobit comp this quarter. I would have expected. Less reimbursable revenue, it looks like it actually grew quite a bit faster. Than service revenue so.

Speaker 6: You know, what is the dynamic there? We're seeing mixed bag all over the industry in terms of the pass through volatility with that big cobit headwind. I would have expected less. You did more. Is there something underlying or outside of cobit? Exposure that's driving the reimbursable tire, or is it just company specific contract timing?

Ari Bousbib: Oh, okay. Well, look, on a full year basis, we're expecting actually, obviously, less, reimbursable expenses, because of the disappearance of the, of the COVID work, which was, as you suggest, very high, pass-through expenses, for those COVID vaccine trials. You know, I wouldn't read much in the quarter because there's volatility, and depends on the mix of what you executed. So I don't- I'm not... To be honest, the book-to-bill is more or less similar to- we, we- I think you, I read your note, right, as I religiously do that before the call, your first flash note, and you know, ask why we only reported our 606 book-to-bill at 1.28.

Speaker 1: Oh, okay. Well, look, on a fuller basis, we're expecting actually obviously less.

Speaker 1: reimbursable expenses because of the disappearance of the COVID work, which was, as you suggest, very high pass-through expenses.

Speaker 1: for those COVID vaccine trials. I wouldn't read much in the quarter because this volatility depends on the mix of what you executed. So I don't.

Speaker 1: To be honest, the book to read is more or less similar. I read your note Friday, I religiously do that before the call, your first flash note, and you ask why we only reported our 606, our...

Ari Bousbib: By the way, I asked the same question to the team when they gave me the first draft, and I agree with their rationale. You know, as you've seen in recent quarters, essentially the numbers have tended to converge, which is essentially what we expected to happen. We will give you the breakdown or the ex-reimbursable expenses book-to-bill, when we think there is a big discrepancy, and it is significant and helps give you understanding of what happened in the quarter in terms of bookings. But if it's very close, as it was last quarter, as it is this quarter, we're just not gonna do that.

By the way, I asked the same question to the team when they gave me the first draft, and I agree with their rationale. You know, as you've seen in recent quarters, essentially the numbers have tended to converge, which is essentially what we expected to happen. We will give you the breakdown or the ex-reimbursable expenses book-to-bill, when we think there is a big discrepancy, and it is significant and helps give you understanding of what happened in the quarter in terms of bookings. But if it's very close, as it was last quarter, as it is this quarter, we're just not gonna do that.

Speaker 1: Book to be that 128 and I by the way, I asked the same question to the team when they when they gave me the first draft and I agree with their rationale. You know, as you've seen in recent quarters, essentially the numbers have tended to converge, which is essentially what we expected to happen. We will give you.

Speaker 1: the breakdown or the X, reimbursable expenses, book to bill, when we think there is a big discrepancy and it is significant and helps give you understanding of what happened in the quarter in terms of bookings.

Ari Bousbib: The change to 606 standards happened more than five years ago, and none of our competitors actually disclose that level of granularity or report any extra reimbursable expenses at book-to-bill. But again, I wouldn't read any much more here in the quarter. Nick or Ron, any commentary or color on Eric's question?

The change to 606 standards happened more than five years ago, and none of our competitors actually disclose that level of granularity or report any extra reimbursable expenses at book-to-bill. But again, I wouldn't read any much more here in the quarter. Nick or Ron, any commentary or color on Eric's question?

Speaker 1: But if it's very close, as it was last quarter, as it is this quarter, which is not going to do that, the change to 606 standards happened more than five years ago, and none of our competitors actually disclosed that level of granularity or report any

Speaker 2: extra reimbursable expenses a book to be but again, I would have read any much more here in the quarter but Nico Ron any commentary or color on Eric's question. Yeah, look we we did have a little bit higher Revenue from past Thursday in the quarter, but as Ari says I wouldn't read too much into the quarter to quarter and in a second

Ronald Bruehlman: Yeah. Look, we, we did have a little bit higher revenue from pass-throughs in the quarter, but as Ari said, I wouldn't read too much into the quarter to quarter. Over a longer time period, your analysis is correct. With COVID work rolling off, there should be a decline in pass-through revenues. And yeah, exactly on the book-to-bill, we just. You know, we're what? You know, five years in, six, seven years in now since the change in the accounting. And, you know, we'll only talk to, on the book-to-bill, the services versus pass-through book-to-bill, or the 605 versus 606, when there's a significant difference to talk about, and there wasn't this quarter.

Speaker 2: the change in the accounting and.

Speaker 2: We'll only talk to on the book that bill, the services versus pass-through book that bill, or the 605 versus 606, when there's a significant difference to talk about, and there wasn't this course. Eric, just on the process again, I mentioned we did execute faster.

Ari Bousbib: Yeah, and Eric, just on the pass-through again, I mentioned we did execute faster this past quarter on our R&D backlog. It's true, we burnt, we accelerated. That's, you know. This is why we recognize more revenue, and as a result, there was more pass-through during the first quarter. I don't know that it's going. I don't think you'll see the same in the next few quarters based on the modeling I saw. Thank you.

Speaker 1: this past quarter on our NDS backlog. We accelerated.

Speaker 1: This is why we recognize more revenue and as a result there was more pass-through.

Eric Coldwell: Could I have one follow-up?

Ari Bousbib: Normally, no, but it's you, so what, you know, go ahead.

Speaker 2: Thank you. If I, yeah, could I have one follow-up? Normally no, but it's you, so go ahead. Go ahead. Thank you. I just wanted to hit on cash flow and expectations for the year and we're juggling three overlapping reports here, so I'm sorry if I missed this. Did you mention what the DSO was in the quarter? No, we didn't give an explicit DSO number. In fact, we don't typically give a DSO number. We were happy with the cash flow in the quarter. One thing I would want to remind everyone is in the first quarter it's typically a week quarter for cash flow because most of our incentive comp

Eric Coldwell: Thank you. I just wanted to hit on cash flow, and expectations for the year, and we're juggling three overlapping reports here, so I'm sorry if I missed this. Did you mention what the DSO was in the quarter?

Ronald Bruehlman: No, we didn't, we didn't, give an explicit DSO number. In fact, we don't typically give a DSO number. You guys can back calculate. We were happy with the cash flow in the quarter. One thing I would wanna remind everyone is, in the first quarter, it's typically a weak quarter for cash flow because most of our incentive comp, annual incentive comp, is paid in the first quarter.

Ari Bousbib: Tax as well, mm-hmm.

Ronald Bruehlman: Yeah, there's some tax impacts, too. Incentive comp is probably the biggest, but,

Ari Bousbib: That was very strong.

Ronald Bruehlman: Yeah, it was strong. We were happy with our cash flow. And not quite as strong as last year, but last year was an unusually strong first quarter for cash flow.

Eric Coldwell: Okay.

Ari Bousbib: DSO, then if we were to understand DSO, is it improved? It's it's flattish, right?

Ronald Bruehlman: DSO's on a quarter-to-quarter basis, it's fairly flattish. On a year-over-year basis, it's up a little bit, and a lot of that has to do with the burning through the COVID-related advances that we got. It was fully expected.

Speaker 2: burning through the COVID-related advances that we got. So it was fully expected.

Eric Coldwell: Got it. Thanks very much. I appreciate it.

Ari Bousbib: Thank you.

Operator: Your next question comes from the line of Max Smock at William Blair. Your line is now open.

Speaker 3: Got it. Thanks very much. I appreciate it. Thanks, Ryan. Your next question comes from the line of Max Smock at William Blair. Your line is now open. I just wanted to clarify your comment in response to one of Dave's questions earlier about the NHP situation.

Max Smock: I just wanted to clarify your comment in response to one of Dave's questions earlier about the NHP situation. And just wanted to clarify that you said that you would not see any impact from the NHP shortage, even if it continues for the next three years. Just wondering, at some point, wouldn't it limit the number of drugs getting into later-stage trials here? Just would be great to hear more about the work you've done internally to kind of evaluate your potential exposure over the next couple years. Thanks.

Speaker 3: Just want to clarify that you said that you would not see any impact from the NHP shortage even if it continues for the next three years. Just wondering at some point wouldn't it limit the number of drugs getting into later stage trials here? It just would be great to hear more about the work you've done internally to kind of evaluate your potential exposure over the next couple of weeks. Thanks. Yeah, again in theory, yes. But you know we don't expect that to happen. I mean there'll be a... Thank you.

Ari Bousbib: Yeah, it's, again, in theory, yes, but, you know, we don't expect that to happen. I mean, there'll be eventually other models and they'll become available. I mean, I don't... We're not worried about this at all.

Speaker 1: eventually other models and they will become available.

Ronald Bruehlman: Yeah, the three years just related to the length of time it takes to get from the discovery work into phase two and phase three trials. And there's a long delay between that. So yeah, of course, theoretically, if there's a protracted issue, it affects everybody in the industry. We don't expect that to happen.

Speaker 2: We're not worried about this at all. Yeah, the three years just related to the length of time it takes to get from the discovery work into phase two and phase three trials. And there's a long delay between that. So yeah, of course, theoretically, if there's a protracted issue, it affects everybody in the industry. We don't expect that to happen. you

Max Smock: Okay, great. Thank you.

Operator: Your next question comes from the line of Sandy Draper at Guggenheim Securities. Your line is now open.

Speaker 7: Okay, great. Thank you. Your next question comes from the line of Sandy Draper at Guggenheim Securities. Your line is now open.

Sandy Draper: Thanks very much. I think it sounds like I need to get on Eric's distribution list, so I can get his quick flash notes. I can't process fast enough to, to do that. So my question, Ari, or maybe Ron, is on the backlog burn. I'm trying to reconcile with what you were talking about in answering his question. On my calculations, it looked like the backlog burn stepped down a little bit from the fourth quarter, from 8% to 7.4%. My assumption was there's a little bit less sequentially in terms of reimbursables, so I just wanted to verify that.

Speaker 2: Thanks very much. I think it sounds like I need to get on Eric's distribution list so I can get his quick flash notes. I can't process fast enough to do that. My question, Ari, or maybe Ron, is on the backlog burn. I'm trying to reconcile what you were talking about and answer his question. My calculation did look like the backlog burn.

Speaker 2: stepped down a little bit from the fourth quarter from 8% to 7.4. My assumption was there's a little bit less sequentially in terms of reimbursables. So I just wanted to verify that, but then thinking about how you're expecting the backlog burn to play out as you have less COVID work, etc.

Sandy Draper: But then, thinking about how you're expecting the backlog burn to play out as you have less COVID work, et cetera, which is faster burning, do you think, is it reasonable to think stable off of this seven point four, or would it sort of trend down over the course of the year? Thanks.

But then, thinking about how you're expecting the backlog burn to play out as you have less COVID work, et cetera, which is faster burning, do you think, is it reasonable to think stable off of this seven point four, or would it sort of trend down over the course of the year? Thanks.

Speaker 2: Which is fast for Bernie, do you think, is it reasonable to think stable after this 7.4? Or would it sort of trend down over the course of the year? Thanks. Look, um, So I think what you're saying is right now, um,

Ronald Bruehlman: Look, I wouldn't put a lot of emphasis on quarter-to-quarter backlog burn as you calculate it there. It's not something that we pay a lot of attention to internally, I can tell you. You'll get variations like in the, you know, fourth quarter, we had very strong pass-through bookings, which, you know, pushes up the backlog some, but then those tend to burn later in the trial. You'll see impacts like that affect, you know, any one quarter's, like, particularly the next quarter's, burn rate. So, overall, as Ari made the point, we tend to work on more complicated trials, and oncology trials, in particular, tend to be longer, slower burn trials.

Speaker 2: I wouldn't put a lot of emphasis on quarter to quarter backlog, Bern, as you calculate it there. It's not something that we pay a lot of attention to internally, I can tell you. You'll get variations like in the fourth quarter, we had very strong pass through booking.

Speaker 2: So overall, as Ari made the point, we tend to work on more complicated trials. And oncology trials in particular tend to be longer, slower burn trials. So we may have slower burn on average than some of the others in the industry based upon our particular mix of projects. But.

Ronald Bruehlman: So we may have slower burn on average than some of the others in the industry based upon our particular mix of projects. But, that's more a macro long-term consideration than it is a quarter-to-quarter sort of variation driver.

So we may have slower burn on average than some of the others in the industry based upon our particular mix of projects. But, that's more a macro long-term consideration than it is a quarter-to-quarter sort of variation driver.

Speaker 2: That's more a macro long-term consideration than it is a quarter-to-quarter sort of variation driver. Okay, great. That's helpful. Thanks, Ron. Thanks mark.

Sandy Draper: Okay, great. That's helpful. Thanks, Ron.

Operator: Your next question comes from the line of Charles Riley with TD Cowen. Your line is now open.

Speaker 7: Your next question comes from the line of Charles Wright of TD Callum. Your line is now open. Your line is now open.

[Analyst] (TD Cowen): Hi, this is Lucas on for Charles. Want to dig into the TAS segment. You guys talked about consulting and analytics seeing some softness in Q1. You guys also called out some wins in real-world evidence. Can you talk more about the performance of the other offerings?

Speaker 4: Hi, this is Lucas on for Charles. Want to dig into the task segment. You guys talked about consulting and analytics, seeing some softness in one queue. You guys also called out some wins in real world evidence. Can you talk more about the performance of the other offerings within tasks and how they performed in one queue, more specifically real world evidence.

Justin Bowers: ... within tasks and how they performed in one queue, more specifically, real-world evidence and technology platforms?

... within tasks and how they performed in one queue, more specifically, real-world evidence and technology platforms?

Ronald Bruehlman: Look, our real-world in technology, we tend to talk about them together because they're the faster growers and continue to be very solid growers in the quarter. As Ari pointed out, it was the analytics and consulting business that really slowed down in the quarter, because a lot of that is shorter cycle business and can be delayed. You know, we've always talked about information being a slower grower, so you know, you know about that. So you kind of piece it together. The difference versus prior quarters really relates to the analytics and consulting business, some of that shorter cycle business being delayed. It's really as simple as that. That's why we saw a little bit of a slowdown in the underlying core growth rate in the TAS business. Next question?

Speaker 2: technology platforms? Well, our real world in technology we tend to talk about them together because they're the faster growers and continue to be very solid growers in the quarter as Ari pointed out it was the analytics and consulting.

Speaker 2: business that really slowed down in the quarter because a lot of that is shorter cycle business and can be delayed. You know we've always talked about information being a slower grower so you know about that. So you kind of piece it together, the difference versus prior quarter.

Speaker 2: growth rate in the TAS business.

Operator: Your next question comes from the line of Derek Debruin at Bank of America. Your line is now open.

Speaker 8: Next question.

Speaker 7: Your next question comes from the line of Derek DeBruin at Bank of America. Your line is now open. Hi, this is Wolf Chanoff on for Derek. Thanks for taking our questions. So, in the prepared remarks, you flagged that there's been a pickup of biotech M&A, which obviously is helping the funding environment. But I'm wondering what you're seeing in terms of Marion.

[Analyst] (Bank of America): Hi, this is Wolf Shannon on for Derek. Thanks for taking our questions. So I know in the prepared remarks, you flagged that there's been a pickup of biotech M&A, which obviously is helping the funding environment. But I'm wondering what you're seeing in terms of the larger of the acquirer then reducing the R&D spend at the target. Is there any impact to you from that? Yeah, if you could just explore those dynamics, that'd be great. Thank you.

Wolf Chanoff: Hi, this is Wolf Shannon on for Derek. Thanks for taking our questions. So I know in the prepared remarks, you flagged that there's been a pickup of biotech M&A, which obviously is helping the funding environment. But I'm wondering what you're seeing in terms of the larger of the acquirer then reducing the R&D spend at the target. Is there any impact to you from that? Yeah, if you could just explore those dynamics, that'd be great. Thank you.

Speaker 7: the larger of the acquirer than reducing the R&D spend at the target. Is there any impact to you from that? Yeah, if you could just explore those dynamics, that'd be great. Thank you.

Ari Bousbib: Yeah, thank you. Just to clarify, the M&A spend has nothing to do with funding. It's not included in the funding numbers. So these are two different and independent points. The heightened M&A activity is a plus, obviously, and is a tailwind for us, as you know, the large clients that are buying molecules for which work needs to be done. So this is generally a favorable trend for us. Thank you.

Speaker 1: Thank you. Just to clarify, the M&A span has nothing to do with funding. It's not included in the funding numbers. So these are two different and independent points.

Speaker 1: The heightened M&A activity is a plus, obviously, and is a tailwind for us as we've got large clients that are buying molecules for which work needs to be done. So this is generally favorable.

Speaker 1: heightened M&A activity is a plus obviously and is a tailwind for us as you know the large clients that are buying molecules for which work needs to be done so this is generally a favorable

Ronald Bruehlman: Next question, please.

Operator: Your next question comes from the line of Dan Leonard at Credit Suisse. Your line is now open.

Speaker 8: Thank you. Next question, please.

Dan Leonard: Thank you. I was just hoping you could revisit that comment you made that RFPs grew 15% sequentially. I assume that's a volume number. Is there any difference between RFP volume trends and value trends? Thank you.

Speaker 7: Your next question comes from the line of Dan Leonard at Credit Suisse. Your line is now open.

Speaker 4: I was just hoping you could revisit that comment you made that RFPs grew 15 percent sequentially. I assume that's a volume number. And is there any difference between RFP volume trends and value trends? Thank you.

Ari Bousbib: Thank you. No, your assumption is incorrect. The growth numbers we mentioned are in dollars.

Speaker 1: Thank you. No, your assumption is incorrect. The growth numbers we mentioned are in dollars. Yes. So all of the growth numbers that we've given Dan on the call are all dollar-based. It's not a volume. Perfect discussion. And that's how we tend to track it because that's what's in.

Ronald Bruehlman: Yeah. Yeah, so all the growth numbers that we've given Dan on the call are all dollar-based. It's not a volume.

Dan Leonard: Got it. Perfect.

Ronald Bruehlman: That's how we tend to track it, 'cause that's what's important. Yes.

Dan Leonard: Thank you.

Operator: Your next question comes from the line of Elizabeth Anderson at Evercore ISI. Your line is now open.

Speaker 7: Yes. Thank you. Your next question comes from the line of Elizabeth Anderson at Evercore ISI. Your line is now open.

Elizabeth Anderson: Hi, guys. Thanks so much for the question. I know you said you just talked about it in terms of total dollar volumes. I was just wondering if you could comment on the contribution in terms of pricing and R&D to the dollars this year. And then secondly, just in terms of the pacing of CAS revenue over the back half of the year, are you still thinking we should see that continue to accelerate and be sort of in that, like, sort of mid to high single digit type range? Thank you.

Speaker 9: Hi guys, thanks so much for the question. I know each of you just talked about it in terms of total dollar value. I was just wondering if you could comment on the contribution in terms of pricing in R&DS to the dollars this year. And secondly, just in terms of the total dollar value, I'm going to go ahead and go ahead and

Ari Bousbib: Yeah. The comment on CAS is just correct. That's our expectation currently, based on the pipeline. What was the first question? I'm sorry.

Ronald Bruehlman: Yeah, I didn't hear your first question, Elizabeth. I'm sorry.

Elizabeth Anderson: Sure. It was just in terms of the contribution of sort of increases in pricing that could have contributed to the first quarter revenue results on a year-over-year basis.

Ari Bousbib: Nothing. It was negligible.

Ronald Bruehlman: Yeah, I mean, I wouldn't say it's anything large, Elizabeth. I mean, again, you gotta remember, trials are, you know, can anywhere from three to five years. It takes a while for all the pricing to, you know, pick up. You know, we don't get that all up, you know, and get it all up front. So, you know, the pricing has a, you know, leads in over the course of the trials.

Elizabeth Anderson: Got it. Thank you.

Ronald Bruehlman: Okay. And, we will take one more question, please.

Operator: Thank you. Your final question comes from the line of Justin Bowers at Deutsche Bank. Please go ahead.

Justin Bowers: Okay, thank you and good morning. Just sort of a two-parter, one with RWE. Are you seeing any change in the velocity of demand there for that business? Hearing in the marketplace that IRA might be a bit of a tailwind for that. And then, can you also sort of educate us a little bit on the lead time between when market access and pricing studies are done and you know, with respect to FDA approvals? Thank you.

Ari Bousbib: Yeah, thank you, Justin. On the first question, Nick Giovanni?

Ronald Bruehlman: He said the growth on real-world evidence.

Ari Bousbib: Nothing different.

Ronald Bruehlman: Yeah.

Ari Bousbib: No.

Ronald Bruehlman: Remains strong. Remains very strong.

Ari Bousbib: Same, same. Nothing really nothing changed on the real-world side. On the... It does, it really, really varies. There are clients who like to start even before FDA approval, sometimes well before, you know, when the early results are strong, the data is good in the trial, you know, they want to get prepared. And we do those studies early. Sometimes it's around the time of the FDA approval, sometimes it's a little later. Again, it depends. By the way, it depends on the market. Sometimes it may decide to introduce a drug in Europe or in some markets in Europe before others, et cetera. And it has to do, you know, with when the approvals in specific geographies occur. So it really varies.

Ari Bousbib: There's no set lead time, and that's why, again, quote-unquote, "It's discretionary," it's gonna have to be done, but you could delay when you do it.

There's no set lead time, and that's why, again, quote-unquote, "It's discretionary," it's gonna have to be done, but you could delay when you do it.

Justin Bowers: Yeah, I appreciate it. And just on RWE-

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