Q2 2023 IQVIA Holdings Inc Earnings Call

August 1, 2023

Operator: Please stand by. We're about to begin. Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to the IQVIA Q2 2023 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad, and if you would like to withdraw your question, simply press star one again. Just as a reminder, this call is being recorded. I would now like to turn the call over to Mr. Nick Childs, Senior Vice President, Investor Relations and Treasury. Mr. Childs, please begin.

Speaker 1: Please stand by. We're about to begin.

Speaker 1: Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to the IQDS second quarter 2023 earnings conference call.

Speaker 1: All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. And if you would like to withdraw your question, simply press star one again. And just as a reminder, this call is being recorded. I would now like to turn the call over to Mr. Nick Childs, Senior Vice President in domestic relations and treasury. Mr. Childs, please begin.

Nick Childs: Good morning, everyone. Thank you for joining our second quarter 2023 earnings call. With me today are Ari Bousbib, Chairman and Chief Executive Officer; Ron Bruehlman, Executive Vice President and Chief Financial Officer; Eric Sherbet, Executive Vice President and General Counsel; Mike Fedock, Senior Vice President, Financial Planning and Analysis, and Gustavo Perrone, Senior Director, Investor Relations. Today, we'll be referencing a presentation that will be visible during this call for those of you on our webcast. This presentation will also be available following this call in the Events and Presentations section of our IQVIA Investor Relations website at ir.iqvia.com. Before we begin, I would like to caution listeners that certain information discussed by management during this conference call will include forward-looking statements.

Speaker 2: Good morning, everyone. Thank you for joining our second quarter of our 2023 earnings call.

Speaker 2: With me today are Ari Boosby, Chairman and Chief Executive Officer, Ron Bruhlmann, Executive Vice President and Chief Financial Officer.

Speaker 2: Eric Sherbet, Executive Vice President and General Counsel.

Speaker 2: Mike Fiedock, Senior Vice President, Financial Planning and Analysis.

Speaker 2: Gustavo Peron, Senior Director, Investor Relations.

Speaker 2: Today we will be referencing a presentation that will be visible during this call for those of you on our webcast. This presentation will also be available following this call in the events and presentations section of our IQVIA Investor Relations website at ir.iqvia.com.

Speaker 2: Before we begin, I would like to caution listeners that certain information discussed by management during this conference call will include forward-looking statements.

Nick Childs: Actual results could differ materially from those stated or implied by forward-looking statements due to risks and uncertainties associated with the company's business, which are discussed in the company's filings with the Securities and Exchange Commission, including our annual report on Form 10-K and subsequent SEC filings. In addition, we will discuss certain non-GAAP financial measures on this call, which should be considered a supplement to, and not a substitute for, financial measures prepared in accordance with GAAP. A reconciliation of these non-GAAP measures to the comparable GAAP measures is included in the press release and conference call presentation. I would now like to turn the call over to our chairman and CEO.

Actual results could differ materially from those stated or implied by forward-looking statements due to risks and uncertainties associated with the company's business, which are discussed in the company's filings with the Securities and Exchange Commission, including our annual report on Form 10-K and subsequent SEC filings. In addition, we will discuss certain non-GAAP financial measures on this call, which should be considered a supplement to, and not a substitute for, financial measures prepared in accordance with GAAP. A reconciliation of these non-GAAP measures to the comparable GAAP measures is included in the press release and conference call presentation. I would now like to turn the call over to our chairman and CEO.

Speaker 2: Actual results could differ materially from those stated or implied by forward-looking statements due to risks and uncertainties associated with the company's business, which are discussed in the company's filings with the Securities and Exchange Commission, including our annual report on Form 10-K and subsequent SEC filings.

Speaker 2: In addition, we will discuss certain non-GAAP financial measures on this call, which should be considered a Supplement 2 and not a Substitute 4 financial measures prepared in accordance with GAAP.

Speaker 2: A reconciliation of these non-GAT measures to the comparable GAT measures is included in the press release and conference call presentation. I would now like to turn the call over to our chairman and CEO .

Ari Bousbib: Thank you, Nick, and good morning, everyone. Thank you for joining us today to discuss our second quarter results. IQVIA delivered another quarter of strong operational results, with 9% organic revenue growth, excluding the impact of foreign exchange and COVID-related work. The demand environment for the industry continues to be healthy, which supports our confidence in the long-term outlook for our businesses. Emerging biotech funding continued its healthy trend. According to BioWorld, second quarter EBP funding was $17.1 billion, up 33% versus prior year, and up 10% sequentially versus Q1. Clinical trial starts were up over 10% sequentially compared to Q1, 2023. FDA approvals continued their strong momentum, which is a positive indicator for our commercial businesses going forward.

Speaker 3: with 9% organic revenue growth, excluding the impact of foreign exchange and COVID-related work. The demand environment for the industry continues to be healthy, which supports our confidence in the long-term outlook for our businesses. Emerging biotech funding continued its healthy trend. According to BioWorld, second quarter EVP funding was 17.1 billion dollars, up 33% versus prior year, and up 10% sequentially versus Q1.

Speaker 3: Clinical trial starts were up over 10% sequentially compared to Q1223.

Speaker 3: FDA approvals continue their strong momentum, which is a positive indicator for our commercial businesses going forward.

Ari Bousbib: There were 26 approvals in the first half of the year, and that's up 30% versus the average of the prior 5 years. M&A activity in the biopharma sector remains strong, with over $90 billion spent in the first half. 2023 is on pace to be one of the largest years in the last decade in both value of transactions and number of deals, and that is with a high interest rate environment. Our Q2 demand metrics showed continued healthy growth. Net new bookings were just under $2.7 billion, which was our second largest quarter ever, and represented a quarterly book-to-bill of 1.28. By the way, before I move on, I know that some of you inquired last quarter about our services book-to-bill, and I think some of you were concerned about what that may have implied about our performance.

There were 26 approvals in the first half of the year, and that's up 30% versus the average of the prior 5 years. M&A activity in the biopharma sector remains strong, with over $90 billion spent in the first half. 2023 is on pace to be one of the largest years in the last decade in both value of transactions and number of deals, and that is with a high interest rate environment. Our Q2 demand metrics showed continued healthy growth. Net new bookings were just under $2.7 billion, which was our second largest quarter ever, and represented a quarterly book-to-bill of 1.28. By the way, before I move on, I know that some of you inquired last quarter about our services book-to-bill, and I think some of you were concerned about what that may have implied about our performance.

Speaker 3: There were 26 approvals in the first half of the year, and that's up 30% versus the average of the prior five years.

Speaker 3: 2023 is on pace to be one of the largest years in the last decade in both value of transactions and number of deals and that is with a high interest rate environment. Our Q2 demand metrics showed continued healthy growth. Net new bookings were just under 2.7 billion dollars which was our second largest quarter ever.

Speaker 3: and represented a quarterly book to bill of 1.28. By the way, before I move on, I know that some of you inquired.

Ari Bousbib: So just to remove any concern, our services book-to-bill this quarter was, Nick, 1.34?

Speaker 3: and I think some of you were concerned about what that may have implied about our performance. So just to remove any concern our services booked to bill this quarter was Nick 1-1-1-34? 1-1-1-1-34 and our trailing 12 months booked to bill is 134 overall and again for those who asked it's the same on a services basis. So do we use any meaningful deviation

Nick Childs: Correct.

Ari Bousbib: 1.34. Our trailing twelve-month book-to-bill is 1.34 overall. Again, for those who asked, it's the same on a services basis. Once again, going forward, if there is any meaningful deviation between our total book-to-bill ratio and the services book-to-bill, then we will let you know. Otherwise, you can assume they are roughly the same. Now, as a result of these bookings, our backlog reached $28.4 billion, growing 11% versus prior year on both reported and constant-currency basis. Another metric we track is our quarterly RFP flow, and this past quarter it was the largest ever. It was up 8% year over year, and 6% sequentially. For the longer term, fundamentals of the industry are certainly very positive.

Speaker 3: book to bill ratio and the services book to bill then we will let you know otherwise you can assume they are roughly the same. Now as a result of these bookings our backlog reached 28.4 billion dollars growing 11% versus

Speaker 3: It was up 8% year over year and 6% sequentially. The longer-term fundamentals of the industry are certainly very positive. In the short term, our clients have continued to be cautious with their spending due to the uncertain macroeconomic conditions. And that's reflected primarily, I would say only, in some subsegments of our commercial business segments, that is TAAS and CSMS. In the second quarter, these businesses were stable.

Ari Bousbib: Now, in the short term, our clients have continued to be cautious with their spending due to the uncertain macroeconomic conditions, and that's reflected primarily, I would say, only in some subsegments of our commercial business segments, that is, TAS and CSMS. In Q2, these businesses were stable, with the TAS segment growing in Q2 at a rate consistent with Q1, as we had anticipated in our guidance. Of course, the last time we spoke, we expected clients' spending in these commercial businesses to show signs of acceleration by now, but unfortunately, they have continued to delay decisions. Our pipeline is still there, however, decisions keep being moved to the right.

Now, in the short term, our clients have continued to be cautious with their spending due to the uncertain macroeconomic conditions, and that's reflected primarily, I would say, only in some subsegments of our commercial business segments, that is, TAS and CSMS. In Q2, these businesses were stable, with the TAS segment growing in Q2 at a rate consistent with Q1, as we had anticipated in our guidance. Of course, the last time we spoke, we expected clients' spending in these commercial businesses to show signs of acceleration by now, but unfortunately, they have continued to delay decisions. Our pipeline is still there, however, decisions keep being moved to the right.

Speaker 3: with the task segment growing in the second quarter at a rate consistent with the first quarter, as we had anticipated in our guidance. Of course, last time we spoke, we expected clients spending in these commercial businesses to show signs of acceleration by now.

Speaker 3: But unfortunately, they have continued to delay decisions. A pipeline is still there.

Ari Bousbib: As a result, we now expect these commercial businesses to perform for the balance of the year, similarly to what we saw in the first half. For the TAS segments, that represents approximately 6% growth organically, excluding the impact of FX effects and the COVID shut down. That 6% growth organically for the year is actually very strong in the current environment. With that, let's review the second quarter results. Revenue for the second quarter grew 5.3% on a reported basis and 5.5% at constant currency compared to last year, and again, excluding COVID-related works from both periods, we grew the top line 9% at constant currency on an organic basis. Second quarter Adjusted EBITDA increased 8%, driven by the revenue growth and ongoing cost management discipline.

As a result, we now expect these commercial businesses to perform for the balance of the year, similarly to what we saw in the first half. For the TAS segments, that represents approximately 6% growth organically, excluding the impact of FX effects and the COVID shut down. That 6% growth organically for the year is actually very strong in the current environment. With that, let's review the second quarter results. Revenue for the second quarter grew 5.3% on a reported basis and 5.5% at constant currency compared to last year, and again, excluding COVID-related works from both periods, we grew the top line 9% at constant currency on an organic basis. Second quarter Adjusted EBITDA increased 8%, driven by the revenue growth and ongoing cost management discipline.

Speaker 3: However, decisions keep being moved to the right.

Speaker 3: And as a result

We now expect this commercial business to perform for the balance of the year, similarly to what we saw in the first half.

For the tab segments, that represents approximately 6% growth organically.

and that 6% growth organically for the year is actually very strong in the current environment. With that, let's review the second quarter results. Revenue for the second quarter grew 5.3% on a reported basis and 5.5% at constant currency compared to last year, and again, excluding COVID-related work from both periods, we grew the top line 9% at constant currency on an organic basis. Second quarter adjusted EBITDA increased 8%.

Ari Bousbib: Q2 adjusted diluted EPS of $2.43, as expected, faced the headwind of the step-up in interest expense and the UK corporate tax rate change. Excluding the impact of these non-operational items, our adjusted diluted EPS growth would have been 14%. A few highlights of business activity. IQVIA has been awarded a significant contract with the top 10 pharma to implement our full commercial data and analytic solution suite. This suite of offerings will benefit our clients by utilizing insights powered by AI, such as personalized engagements with HCPs, leveraging our multi-channel capabilities, including digital, precise geographical sales targeting, and better cost efficiency by reducing the number of resources that are manually generating insights. This initiative positions IQVIA as a strategic partner with this large top 10 pharma client for AI-powered data and analytic solutions.

Q2 adjusted diluted EPS of $2.43, as expected, faced the headwind of the step-up in interest expense and the UK corporate tax rate change. Excluding the impact of these non-operational items, our adjusted diluted EPS growth would have been 14%. A few highlights of business activity. IQVIA has been awarded a significant contract with the top 10 pharma to implement our full commercial data and analytic solution suite. This suite of offerings will benefit our clients by utilizing insights powered by AI, such as personalized engagements with HCPs, leveraging our multi-channel capabilities, including digital, precise geographical sales targeting, and better cost efficiency by reducing the number of resources that are manually generating insights. This initiative positions IQVIA as a strategic partner with this large top 10 pharma client for AI-powered data and analytic solutions.

expected face the headwind of the step up in

and the UK corporate tax rate change.

excluding the impact of these non-operational items, our adjusted mularger icons andphones.

A few highlights of business activity.

IQVIA has been awarded a significant contract with the top 10 pharma to implement our full commercial data and analytics solution suite.

This suite of offerings will benefit our clients by utilizing insights powered by AI, such as personalized engagements with HCPs, leveraging our multi-channel capabilities including digital,

precise geographical sales targeting, and better cost efficiency by reducing the number of resources that are manually generating insights. This initiative positions IQVIA as a strategic partner with its LAV top 10 pharma client for AI-powered data analytics

Ari Bousbib: Another top ten pharma extended and broadened an analytics project to track the sales performance of their top-selling immunotherapy oncology drug in Europe. The project allows commercial teams to continuously track brand performance, factor in AI-generated insights, and improve, as a result, execution across seven cancer indications in over 25 countries. In another win, IQVIA was awarded a significant contract from another top ten pharma client to deploy our OCE Optimizer application globally. This is an AI-powered, multi-channel sales management application that optimizes HCP engagement in real time. IQVIA was selected over two other competitor solutions because of the seamless integration that OCE offers with the client's current ecosystem, the superior AI capability, and our successful history with these clients in previous global system implementations. Also, in the quarter, IQVIA was selected by multiple clients to deliver regulatory mandated post-approval safety studies in Europe.

Another top ten pharma extended and broadened an analytics project to track the sales performance of their top-selling immunotherapy oncology drug in Europe. The project allows commercial teams to continuously track brand performance, factor in AI-generated insights, and improve, as a result, execution across seven cancer indications in over 25 countries. In another win, IQVIA was awarded a significant contract from another top ten pharma client to deploy our OCE Optimizer application globally. This is an AI-powered, multi-channel sales management application that optimizes HCP engagement in real time. IQVIA was selected over two other competitor solutions because of the seamless integration that OCE offers with the client's current ecosystem, the superior AI capability, and our successful history with these clients in previous global system implementations. Also, in the quarter, IQVIA was selected by multiple clients to deliver regulatory mandated post-approval safety studies in Europe.

The project allows commercial teams to continuously track brand performance, factor in AI generated insights and improve as a result execution across seven cancer indications in over 25 countries. In another win.

IQVIA was awarded a significant contract

to deploy our OCE optimizer application globally.

This is an AI-powered multi-channel sales management application that optimizes HTTP engagement in real time.

Iqya was selected over two other competitor solutions.

because of the seamless integration that OC offers with the client's current ecosystem, the superior AI capability, and our successful history with this client in previous global system implementations. Also in the quarter, IQVA was selected by multiple clients to deliver regulatory mandated post-approval safety studies in Europe .

Ari Bousbib: In each case, IQVIA was selected over preferred providers due to our deep expertise in sourcing data from the local health systems in Europe, and our ability to bring multiple databases together in a harmonized manner for research. We were awarded a five-year pregnancy exposure study from an EBP customer to collect and analyze health information from women who take prescription medicines or vaccines during pregnancy and compare results with women who have not taken them. We won this award because of our rich experience in post-approval safety studies in pregnancy and deep experience in epidemiology. In the quarter, IQVIA has been recognized by the Artificial Intelligence Breakthrough Awards with the prestigious Best AI-Based Solution for Healthcare award.

In each case, IQVIA was selected over preferred providers due to our deep expertise in sourcing data from the local health systems in Europe, and our ability to bring multiple databases together in a harmonized manner for research. We were awarded a five-year pregnancy exposure study from an EBP customer to collect and analyze health information from women who take prescription medicines or vaccines during pregnancy and compare results with women who have not taken them. We won this award because of our rich experience in post-approval safety studies in pregnancy and deep experience in epidemiology. In the quarter, IQVIA has been recognized by the Artificial Intelligence Breakthrough Awards with the prestigious Best AI-Based Solution for Healthcare award.

In each case, IQVIA was selected over preferred providers due to our deep expertise in sourcing data from the

and our ability to bring multiple databases together in a harmonized manner for research.

We were awarded a five-year pregnancy exposure study from an EBP customer.

To collect and analyze health information from women who take prescription medicines

and compare results with women who have not taken them. We won this award because of our rich experience in post-approval safety studies in pregnancy and deep experience in epidemiology.

In the quarter, IQUVIA has been recognized by the Artificial Intelligence Breakthrough Awards.

Ari Bousbib: IQVIA was recognized for its AI software, including natural language processing and proprietary large language models technology, which analyzes complex and unstructured patient data to provide unique insight into patient care and disease states. This technology is helping clinicians identify and screen at-risk patients, enabling targeted intervention to patients in need. IQVIA continues to differentiate in the application of AI analytics with two of the top 10 pharma companies designating their use of IQVIA AI as their innovation of the year. In addition, both Databricks and Snowflake separately named IQVIA their 2023 Health and Life Sciences Partner of the Year. These awards recognize AI and tech partners for their exceptional accomplishments and joint collaboration. There's a lot going on at IQVIA with generative AI, and we will likely be discussing this at the appropriate time at a future investor meeting.

IQVIA was recognized for its AI software, including natural language processing and proprietary large language models technology, which analyzes complex and unstructured patient data to provide unique insight into patient care and disease states. This technology is helping clinicians identify and screen at-risk patients, enabling targeted intervention to patients in need. IQVIA continues to differentiate in the application of AI analytics with two of the top 10 pharma companies designating their use of IQVIA AI as their innovation of the year. In addition, both Databricks and Snowflake separately named IQVIA their 2023 Health and Life Sciences Partner of the Year. These awards recognize AI and tech partners for their exceptional accomplishments and joint collaboration. There's a lot going on at IQVIA with generative AI, and we will likely be discussing this at the appropriate time at a future investor meeting.

with the prestigious

Best AI-Based Solution for Healthcare Award.

IKULIA was recognized for its AI software including natural language processing and proprietary large language

which analyzes complex and unstructured patient data.

to provide unique insight into patient care and disease states.

This technology is helping clinicians identify and screen at-risk patients.

enabling targeted intervention to patients in need.

IQVIA continues to differentiate in the application of AI analytics with two of the top 10 pharma companies designating their use of IQVIA AI as their innovation of the years.

In addition,

Both Databricks and Snowflake, separately, named IQVIA their 2023 Health and Life Sciences Partner of the Year.

These awards recognize AI and tech partners for their exceptional accomplishments and join collaboration.

There's a lot going on at IQVIA with generative AI, and we will likely be discussing this at the appropriate time at the future investor meeting.

Ari Bousbib: Let me now move to R&DS segment, which had another strong quarter, including several key wins. Our expertise in oncology continues to be a differentiator for us. In the quarter, a mid-sized pharma company awarded IQVIA two large phase 3 trials for gastric and prostate cancer, which are expected to last about six years. The client selected IQVIA due to our therapeutic expertise and infrastructure to run global complex oncology studies, as well as our global data assets. Also this quarter, a large FSP client renewed their partnership with IQVIA as a preferred provider, this time without soliciting competing bids. This client was a historical lockout account for the historical Quintiles legacy company. We won here due to our FSP expertise, scale, and delivery capabilities.

Let me now move to R&DS segment, which had another strong quarter, including several key wins. Our expertise in oncology continues to be a differentiator for us. In the quarter, a mid-sized pharma company awarded IQVIA two large phase 3 trials for gastric and prostate cancer, which are expected to last about six years. The client selected IQVIA due to our therapeutic expertise and infrastructure to run global complex oncology studies, as well as our global data assets. Also this quarter, a large FSP client renewed their partnership with IQVIA as a preferred provider, this time without soliciting competing bids. This client was a historical lockout account for the historical Quintiles legacy company. We won here due to our FSP expertise, scale, and delivery capabilities.

Let me now move to R&DS segment, which had another strong quarter, including several key wins.

Our expertise in oncology continues to be a differentiator for us.

In the quarter, a mid-sized pharma company awarded IQVIA two large phase 3 trials for gastric and prostate cancer.

which are expected to last about six years.

The client selected IqDia due to our

infrastructure to run global complex oncology studies as well as our global

Also this quarter, a large FSP client renewed their partnership with Iqvia as a preferred provider this time without soliciting competing bids.

This client was a historical lockout account for the historical quintiles legacy company.

Ari Bousbib: In our lab business, a top 10 pharma awarded us a large study in the quarter for a novel drug that improves the quality of life of patients suffering from a serious autoimmune disease that impacts one out of 50 people worldwide. This study is our client's top R&D program, and it has positioned IQVIA as the largest laboratory service provider for these clients. Lastly, I'm proud to share that Sheetal Telang, Vice President of Therapeutic Strategy at IQVIA, has been honored with the 2023 Rising Star Award by the Healthcare Businesswomen's Association. Sheetal earned the award for a strong and innovative leadership of critical industry initiatives, including by increasing diversity and inclusion levels among patients enrolled in clinical trials. I will now turn it over to Ron for more details on our financial performance.

In our lab business, a top 10 pharma awarded us a large study in the quarter for a novel drug that improves the quality of life of patients suffering from a serious autoimmune disease that impacts one out of 50 people worldwide. This study is our client's top R&D program, and it has positioned IQVIA as the largest laboratory service provider for these clients. Lastly, I'm proud to share that Sheetal Telang, Vice President of Therapeutic Strategy at IQVIA, has been honored with the 2023 Rising Star Award by the Healthcare Businesswomen's Association. Sheetal earned the award for a strong and innovative leadership of critical industry initiatives, including by increasing diversity and inclusion levels among patients enrolled in clinical trials. I will now turn it over to Ron for more details on our financial performance.

We want here due to our FSP expertise

In our lab business, the top 10 pharma awarded us a large study in the quarter for a novel drug that improves the quality of life of patients suffering from a serious autoimmune disease that

This study is our client's top R&D program and it has positioned like QVIA as the largest laboratory service provider for this client.

Lastly, I'm proud to share that Shekal Telang, Vice President of Therapeutic Strategy at Iqvia, has been honored with the 2023 Rising Star Award by the Healthcare Business Women's Association

Sheetal earned the award for a strong and innovative leadership of critical industry initiatives, including by increasing diversity and inclusion levels among patients enrolled in clinical trials.

Ron Bruehlman: Thanks, Ari, and good morning, everyone. Let's start by reviewing revenue. Q2 revenue of $3.728 billion grew 5.3% on a reported basis, and 5.5% at constant currency. In the quarter, COVID-related revenues were approximately $120 million, which is down about $140 million versus Q2 2022. Excluding all COVID-related work from both this year and last, organic growth at constant currency was 9%. Technology and Analytics Solutions revenue was $1.456 billion. That was up 3.4% on both a reported and constant currency basis. Excluding all COVID-related work, organic growth at constant currency in TAS was 6%.

I will now turn it over to Ron for more

Thanks, Ari, and good morning, everyone.

Let's start by reviewing revenue.

Second quarter revenue of $3,728,000,000 grew 5.3% on a reported basis and 5.5% at constant currency.

In the quarter, COVID-related revenues were approximately $120 million, which is down about $140 million versus the second quarter of 2022.

Excluding all COVID-related work from both this year and last, organic growth at constant currency was 9 percent.

Technology and analytic solutions revenue was $1,456,000,000. That was up 3.4% on both a reported and constant currency basis.

Excluding all COVID-related work, organic growth at constant currency in tabs with 6%.

Ron Bruehlman: R&DS revenue of $2.096 billion was up 7.5% reported and 7.6% constant currency. Excluding all COVID-related work, organic growth at constant currency in R&DS was 12%. Lastly, Contract Sales and Medical Solutions, or CSMS, revenue of $176 million, declined 3.8% reported and was flat at constant currency. Total company first half revenue was $7.38 billion, which was up 3.8% on a reported basis and 5.1% at constant currency. Excluding all COVID-related work, organic growth at constant currency for the first half was 10%. Technology and Analytics Solutions revenue for the first half was $2.9 billion. That's up 1.9% reported and 3.2% at constant currency.

R&DS revenue of $2.096 billion was up 7.5% reported and 7.6% constant currency. Excluding all COVID-related work, organic growth at constant currency in R&DS was 12%. Lastly, Contract Sales and Medical Solutions, or CSMS, revenue of $176 million, declined 3.8% reported and was flat at constant currency. Total company first half revenue was $7.38 billion, which was up 3.8% on a reported basis and 5.1% at constant currency. Excluding all COVID-related work, organic growth at constant currency for the first half was 10%. Technology and Analytics Solutions revenue for the first half was $2.9 billion. That's up 1.9% reported and 3.2% at constant currency.

R&D Solutions revenue of $2,096 million was up 7.5% reported and 7.6% at constant currency.

Excluding all COVID-related work, organic growth at constant currency and R&DS was 12%.

Lastly, contract sales and medical solutions or CSMS revenue of $176 million, declined 3.8% reported and was flat, sponsored currency.

Total company first half revenue was $7,380,000,000, which was up 3.8% on a reported basis and 5.1% of constant currency.

Excluding all COVID-related work, organic growth of constant currency for the first half was 10%.

Acknowledging analytic solutions revenue for the first half was $2,900,000,000. That's up 1.9% reported in 3.2% at constant currency.

Ron Bruehlman: Excluding all COVID-related work, organic growth at constant currency in TAS was 6% for the first half. R&D Solutions' first half revenue of $4.122 billion was up 6.1% at actual FX rates and 7.1% at constant currency. Excluding all COVID-related work, organic growth at constant currency in R&DS was 14% in the first half. Contract Sales and Medical Solutions, or CSMS, first half revenue of $358 million declined 5.3% reported, and 0.5% at constant currency. Let's move down to P&L now. Adjusted EBITDA was $864 million for the second quarter, which represented growth of 8%, while first half adjusted EBITDA was $1.715 billion, which was up 6.4% year over year.

Excluding all COVID-related work, organic growth at constant currency in TAS was 6% for the first half. R&D Solutions' first half revenue of $4.122 billion was up 6.1% at actual FX rates and 7.1% at constant currency. Excluding all COVID-related work, organic growth at constant currency in R&DS was 14% in the first half. Contract Sales and Medical Solutions, or CSMS, first half revenue of $358 million declined 5.3% reported, and 0.5% at constant currency. Let's move down to P&L now. Adjusted EBITDA was $864 million for the second quarter, which represented growth of 8%, while first half adjusted EBITDA was $1.715 billion, which was up 6.4% year over year.

and excluding all COVID-related work, organic growth at constant currency and tax with 6% for the first half.

R&D Solutions first half revenue of $4,122,000,000 was up 6.1% at actual FX rates and 7.1% at constant currency.

and excluding all COVID-related work, organic growth at constant currency in R&DS was 14% in the first half.

Contract sales and medical solutions or CSM, that's first half revenue of $358 million decline, 5.3% reported and 0.5% constant currency.

Let's move down the P&L map.

Adjusted EBITDA was $864 million for the second quarter, which represented growth of 8%, while the first half adjusted EBITDA was $1,715,000,000, which was up 6.4% year over year.

Ron Bruehlman: Q2 GAAP net income was $297 million, and GAAP diluted earnings per share was $1.59. For the first half, we had GAAP net income of $586 million, or $3.12 of earnings per diluted share. Adjusted net income was $454 million for Q2, and adjusted diluted earnings per share was $2.43. For the first half, adjusted net income was $916 million, or $4.88 per share. Now, excluding the year-over-year impact of the step-up in interest rates and the increase in the UK corporate tax rate, adjusted diluted earnings per share grew 14% in Q2 and 11% for the first half. As Ari reviewed, R&D Solutions delivered another quarter of excellent bookings.

Q2 GAAP net income was $297 million, and GAAP diluted earnings per share was $1.59. For the first half, we had GAAP net income of $586 million, or $3.12 of earnings per diluted share. Adjusted net income was $454 million for Q2, and adjusted diluted earnings per share was $2.43. For the first half, adjusted net income was $916 million, or $4.88 per share. Now, excluding the year-over-year impact of the step-up in interest rates and the increase in the UK corporate tax rate, adjusted diluted earnings per share grew 14% in Q2 and 11% for the first half. As Ari reviewed, R&D Solutions delivered another quarter of excellent bookings.

Second quarter gap net income was $297 million and gap diluted earnings per share was $1.59.

For the first half, we had GAAP net income of $586 million, or $3.12 of earnings per diluted share.

Adjusted net income was $454 million for the second quarter and adjusted diluted earnings per share was $2.43.

For the first half, adjusted NAA income was $916 million or $4.88 per share.

Now, excluding the year-over-year impact of the stuff up in interest rates and the increase in the UK corporate tax rate, adjusted diluted earnings per share grew 14% in the second quarter and 11% for the first half.

Ron Bruehlman: Backlog at June 30 stood at a record $28.4 billion, which is up 11% year over year and up approximately 40% in the last three years. Reviewing the balance sheet, as of June 30, cash and cash equivalents totaled $1.382 billion, and gross debt was thirteen billion, $13.777 billion, which resulted in net debt of $12.395 billion. Our net leverage ratio ended the quarter at 3.59x trailing twelve-month adjusted EBITDA. Q2 cash flow from operations was $402 million, and capital expenditures were $160 million, resulting in free cash flow of $242 million.

As already review R&D Solutions delivered another quarter of excellent bookings. Backlog June 30th stood at a record $28.4 billion which is up 11% year over year.

Backlog at June 30 stood at a record $28.4 billion, which is up 11% year over year and up approximately 40% in the last three years. Reviewing the balance sheet, as of June 30, cash and cash equivalents totaled $1.382 billion, and gross debt was thirteen billion, $13.777 billion, which resulted in net debt of $12.395 billion. Our net leverage ratio ended the quarter at 3.59x trailing twelve-month adjusted EBITDA. Q2 cash flow from operations was $402 million, and capital expenditures were $160 million, resulting in free cash flow of $242 million.

Ron Bruehlman: As we previously announced, in May, we issued $1.25 billion of senior secured and unsecured notes. The proceeds from these notes were used to pay down our revolving credit facility. We also took advantage during the quarter of our stock price multiples falling to 2017 levels, and deployed $490 million to repurchase 2.5 million shares at an average price of $194 per share. In the first half, share repurchases totaled $619 million.

As we previously announced, in May, we issued $1.25 billion of senior secured and unsecured notes. The proceeds from these notes were used to pay down our revolving credit facility. We also took advantage during the quarter of our stock price multiples falling to 2017 levels, and deployed $490 million to repurchase 2.5 million shares at an average price of $194 per share. In the first half, share repurchases totaled $619 million.

for $160 million resulting in free cash flow of $242 million. As we previously announced in May, we issued $1,250,000,000 of senior secured and unsecured notes.

The proceeds from these notes were used to pay down our revolving credit facility. We also took advantage during the quarter of our stock price multiples falling to 2017 levels.

Ron Bruehlman: Now, we ended the quarter with $736 million of share repurchase authorization remaining under the program, but our board of directors just authorized a $2 billion increase to our share repurchase plan, which brings the authorization to $2.736 billion as of today. Let's turn to the guidance. We're updating our guidance to address the impact of the continued client cautiousness we've been experiencing in the commercial business. We now anticipate this cautiousness persisting for the balance of the year. And reflecting the reduced expectations for both TAS and CSMS, we currently expect revenue to be between $15.05 billion and $15.175 billion, which represents year-over-year growth of 4.4% to 5.3%.

Now, we ended the quarter with $736 million of share repurchase authorization remaining under the program, but our board of directors just authorized a $2 billion increase to our share repurchase plan, which brings the authorization to $2.736 billion as of today. Let's turn to the guidance. We're updating our guidance to address the impact of the continued client cautiousness we've been experiencing in the commercial business. We now anticipate this cautiousness persisting for the balance of the year. And reflecting the reduced expectations for both TAS and CSMS, we currently expect revenue to be between $15.05 billion and $15.175 billion, which represents year-over-year growth of 4.4% to 5.3%.

Ron Bruehlman: Total company organic growth at constant currency, excluding COVID-related work, is now expected to be between 8% and 9% for the year. This revenue guidance continues to assume about 100 basis points of contribution from acquisitions and a step down in COVID-related revenue of approximately $600 million versus 2022. By segment, we now expect TAS to grow approximately 6%, consistent with what we saw in the first half. Our expectations for the R&DS segment are unchanged and consistent with our previous guidance. Finally, we now expect CSMS revenue to decline approximately 3%, and all of these growth rates are organic at constant currency, excluding COVID-related work.

Total company organic growt h at constant currency, excluding COVID-related work, is now expected to be between 8% and 9% for the year. This revenue guidance continues to assume about 100 basis points of contribution from acquisitions and a step down in COVID-related revenue of approximately $600 million versus 2022. By segment, we now expect TAS to grow approximately 6%, consistent with what we saw in the first half. Our expectations for the R&DS segment are unchanged and consistent with our previous guidance. Finally, we now expect CSMS revenue to decline approximately 3%, and all of these growth rates are organic at constant currency, excluding COVID-related work.

Ron Bruehlman: Now, to reflect these changes in revenue, we're also updating our guidance for full-year Adjusted EBITDA to $3.6 billion to $3.635 billion, which represents year-over-year growth of 7.6% to 8.6%. Lastly, we're updating our guidance for adjusted diluted EPS to $10.20 to $10.45, representing year-over-year growth of 0.4% to 2.9%. 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 reduce the year-over-year growth rate by approximately 12 percentage points. Excluding these items, adjusted diluted earnings per share is expected to grow 12% to 15%. Let's move to our Q3 guidance.

Now, to reflect these changes in revenue, we're also updating our guidance for full-year Adjusted EBITDA to $3.6 billion to $3.635 billion, which represents year-over-year growth of 7.6% to 8.6%. Lastly, we're updating our guidance for adjusted diluted EPS to $10.20 to $10.45, representing year-over-year growth of 0.4% to 2.9%. 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 reduce the year-over-year growth rate by approximately 12 percentage points. Excluding these items, adjusted diluted earnings per share is expected to grow 12% to 15%. Let's move to our Q3 guidance.

Ron Bruehlman: In Q3, we expect revenue to be between $3.76 billion and $3.81 billion, or growth of 3.9% to 5.3% on a constant currency basis, and 5.6% to 7% on a reported basis. Adjusted EBITDA is expected to be between $880 million and $895 million, up 8.1% to 10%. And adjusted diluted EPS is expected to be between $2.39 and $2.49, declining 3.6% to growing 0.4% year over year. Excluding the step up in interest expense and the increase in the UK tax rate, this translates into third quarter adjusted diluted EPS growth of between 11% and 15%.

In Q3, we expect revenue to be between $3.76 billion and $3.81 billion, or growth of 3.9% to 5.3% on a constant currency basis, and 5.6% to 7% on a reported basis. Adjusted EBITDA is expected to be between $880 million and $895 million, up 8.1% to 10%. And adjusted diluted EPS is expected to be between $2.39 and $2.49, declining 3.6% to growing 0.4% year over year. Excluding the step up in interest expense and the increase in the UK tax rate, this translates into third quarter adjusted diluted EPS growth of between 11% and 15%.

Ron Bruehlman: Now, I should note that all of this this guidance assumes that foreign currency rates as of 31 July continue for the balance of the year. So let me summarize. We, we delivered another strong quarter of financial performance, including organic revenue growth of 9%, excluding the impact of foreign exchange, and COVID-related work. Our quarterly net new bookings were the second highest ever at just under $2.7 billion, and our industry-leading backlog reached a new record of $28.4 billion, up 11% year over year. Underlying demand in the industry and our business remains healthy, with our RFP flow reaching a new record high in the quarter, up 6% sequentially versus Q1 2023.

Now, I should note that all of this this guidance assumes that foreign currency rates as of 31 July continue for the balance of the year. So let me summarize. We, we delivered another strong quarter of financial performance, including organic revenue growth of 9%, excluding the impact of foreign exchange, and COVID-related work. Our quarterly net new bookings were the second highest ever at just under $2.7 billion, and our industry-leading backlog reached a new record of $28.4 billion, up 11% year over year. Underlying demand in the industry and our business remains healthy, with our RFP flow reaching a new record high in the quarter, up 6% sequentially versus Q1 2023.

Ron Bruehlman: We took advantage of the stock price multiples falling to 2017 levels during the quarter and bought back almost $500 million worth of shares at an average of $194 per share. On top of this, our board of directors authorized a $2 billion increase to our share repurchase authorization. And finally, while client cautiousness in their discretionary spending has slightly reduced our short-term outlook on the commercial side of the business, that is TAS and CSMS, the fundamentals of both the clinical and commercial markets continue to be healthy and support our confidence in the longer-term outlook for our company. And with that, let me hand it back over to the operator to open the phones for Q&A.

We took advantage of the stock price multiples falling to 2017 levels during the quarter and bought back almost $500 million worth of shares at an average of $194 per share. On top of this, our board of directors authorized a $2 billion increase to our share repurchase authorization. And finally, while client cautiousness in their discretionary spending has slightly reduced our short-term outlook on the commercial side of the business, that is TAS and CSMS, the fundamentals of both the clinical and commercial markets continue to be healthy and support our confidence in the longer-term outlook for our company. And with that, let me hand it back over to the operator to open the phones for Q&A.

Operator: ... Thank you. Ladies and gentlemen, 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, and we do request that you please limit yourself to just one question so that others in queue may participate as well. We'll pause for just a moment to compile the Q&A roster. We'll go first this morning to David Windley at Jefferies.

Operator: Thank you. Ladies and gentlemen, 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, and we do request that you please limit yourself to just one question so that others in queue may participate as well. We'll pause for just a moment to compile the Q&A roster. We'll go first this morning to David Windley at Jefferies.

David Windley: Hi, good morning. Thanks for taking my question. Ari, you talked about a pretty substantial increase in trial start activity, which is encouraging, certainly. And the bookings, as you highlighted, are also pretty strong. I'm wondering if, kind of on two points, if that is reflective of, maybe pharma companies, pharma and biotech companies, kind of getting about business after some period of evaluation of pipelines. And then two, if there's any improvement in the operational environment, you know, thinking about site staffing, labor turnover, things like that, that would help throughput on the operational side. Thanks.

Ari Bousbib: Yeah. Thank you, Dave. Look, the environment from what we have been able to see over the past year and a half, two years, has not changed. I know there have been rumblings about EBP funding on one hand, and you know, concerns about the impacts of the IRA on the other hand. It's true, large pharma is evaluating the longer term impact of the IRA. In that context, taking another look at their portfolio of studies, both in flight and to come, and some of them reprioritize some of the studies. But fundamentally, our business has been sound, strong, growing sequentially every quarter.

Ari Bousbib: Our bookings have been beating record after record, so we really did not experience any tremor at all in the market on the R&DS side, and this quarter was just a continuation of what we had experienced. With respect to your second question about staffing and site startup, the... You know, attrition rates are back to pre-pandemic levels, which is about 10 to 12%. So from our-- On our end, things are good. We continue to actively recruit and hire because we're growing organically at a very high rate, and therefore, we need the people to execute the work. So that's, that recruiting is targeted at meeting the incremental demand.

Our bookings have been beating record after record, so we really did not experience any tremor at all in the market on the R&DS side, and this quarter was just a continuation of what we had experienced. With respect to your second question about staffing and site startup, the... You know, attrition rates are back to pre-pandemic levels, which is about 10 to 12%. So from our. On our end, things are good. We continue to actively recruit and hire because we're growing organically at a very high rate, and therefore, we need the people to execute the work. So that's, that recruiting is targeted at meeting the incremental demand.

Ari Bousbib: Obviously, there's always competition for talent and, you know, right now we have about 87,000 employees, and we continue to recruit thousands of people a year. So, that's on our end. With respect to the sites, staffing issues, frankly, we continue to see some staffing issues at some sites, but it's really to a lesser degree than, you know, in prior, let's say, probably half year or three quarters, and it's already dramatically reduced. So, really, we are essentially getting back. I'm not gonna say to 100% staffing levels at the sites, because there still, again, are sporadic issues here and there, but it's not... You're correct. It's not the severe issues we experienced perhaps six months or nine months ago. So it's much improved.

Obviously, there's always competition for talent and, you know, right now we have about 87,000 employees, and we continue to recruit thousands of people a year. So, that's on our end. With respect to the sites, staffing issues, frankly, we continue to see some staffing issues at some sites, but it's really to a lesser degree than, you know, in prior, let's say, probably half year or three quarters, and it's already dramatically reduced. So, really, we are essentially getting back. I'm not gonna say to 100% staffing levels at the sites, because there still, again, are sporadic issues here and there, but it's not. You're correct. It's not the severe issues we experienced perhaps six months or nine months ago. So it's much improved.

Ari Bousbib: Thank you, David.

David Windley: Yeah, thank you.

Operator: We'll go next now to Ann Hynes at Mizuho.

Ann Hynes: Hi, good morning. I just want to dig into TAS a little bit more. Within TAS, I know there's several sub-segments. Can you just give us growth rates or declines within those sub-segments, like consulting, technology, and real-world evidence? And also, I think most of the pressure is coming from the consulting segment. Can you tell us just what the margin drop through is that? So if consulting is maybe, like, 25% of revenue, I think it is, what's the margin, a negative margin drop through? That'd be great. Thank you.

Ari Bousbib: Okay. I don't think we disclose by sub-segments the margins, but it's very good margin, put it this way. The consulting is good margin, and the analytics piece is also very strong margin. A lot of our analytics work is delivered out of offshore centers in Bangalore, in Manila, and we generate good margins. It's a lot of standardized work. We have workflows that we use and processes that over the years we've refined. And that work, you know, when we say consulting, don't think, you know, McKinsey-type consulting. Consulting is really, you know, again, a pricing market access study, a launch study, a sales force optimization study.

Ari Bousbib: So these are operationally geared consulting services that our clients utilize to support often the launch of new drugs or the reprioritization of geographic markets or, you know, specific restructuring of their sales organization in certain geographies or in certain therapies, those types of projects. It's not like they are not going to do them. You know, those must or must-do projects, but the environment, the climate, the higher interest rates has, you know, kind of put people on sort of on an on-hold pattern, if you will. You know, the pipeline is there. You know, no one is telling us, "I am just not doing the project," and therefore, you know, we would say, well, the prospects are lower.

So these are operationally geared consulting services that our clients utilize to support often the launch of new drugs or the reprioritization of geographic markets or, you know, specific restructuring of their sales organization in certain geographies or in certain therapies, those types of projects. It's not like they are not going to do them. You know, those must or must-do projects, but the environment, the climate, the higher interest rates has, you know, kind of put people on sort of on an on-hold pattern, if you will. You know, the pipeline is there. You know, no one is telling us, "I am just not doing the project," and therefore, you know, we would say, well, the prospects are lower.

Those must or must do projects, but.

The environment the climate the higher interest rates.

Kind of with people on settlement.

On a whole pattern if you will.

The pipeline is that no. One is spending is I am just not doing the project and therefore.

We would say well the prospects how wrong no. We we have that the projects are still there, but the decision making.

Ari Bousbib: No, we have the project are still there, but the decision-making keeps being pushed to the right. We were hoping, frankly, up to, you know, up two, three months ago, that things would recover by now in terms of the decision-making and accelerate. And that's why we frankly, we were hoping that we would get back to the, you know, 8% or so growth, higher single digit growth for the task segment for the year. We were expecting a strong acceleration, but we haven't seen it materialize in Q2.

No, we have the project are still there, but the decision-making keeps being pushed to the right. We were hoping, frankly, up to, you know, up two, three months ago, that things would recover by now in terms of the decision-making and accelerate. And that's why we frankly, we were hoping that we would get back to the, you know, 8% or so growth, higher single digit growth for the task segment for the year. We were expecting a strong acceleration, but we haven't seen it materialize in Q2.

<unk> pushed to the right we were hoping frankly.

Up to.

Two or three months ago that things would recover by now in terms of the decision making and accelerate.

And that's why we frankly, we were hoping that we would get back to the.

You know, 8% or so growth higher single digit growth for VITAS segment for the year, we were expecting a strong acceleration, but we haven't seen it materialize in the second quarter and so as of now based on what we've seen I think is prudent.

Ari Bousbib: And so as of now, based on what we've seen, I think it's prudent to say that, you know, this, the type of growth rates we've seen for the segment as a whole, which is 6% organically at constant currency and not including the COVID impacts. It should be, you know, should continue the rest of the year. Thank you. All right. Thanks.

And so as of now, based on what we've seen, I think it's prudent to say that, you know, this, the type of growth rates we've seen for the segment as a whole, which is 6% organically at constant currency and not including the COVID impacts. It should be, you know, should continue the rest of the year. Thank you. All right. Thanks.

To say.

Say that you know this.

The type of growth rates, we've seen for the segment as a whole which is 6% organically.

Constant currency and nothing smoothing the COVID-19 impacts.

You should be should continue the rest of the year.

Thank you alright. Thanks.

Operator: Thank you. The next now to Eric Coldwell at Baird, excuse me.

Thank you and the next now to Eric Coldwell.

Excuse me.

Eric Coldwell: Thank you very much. I had the same question as Anne, and I just wanted to follow up on that. The way we think about TAS is four broadly defined subsegments: data, analytics, consulting, real-world evidence, and technology. I'm curious, did any of this, you know, cautiousness or sluggishness, did it expand beyond the analytics and consulting side? What are the growth trends in data, real-world evidence, tech, any nuances or changes there? And then I have one quick follow-up, if I might. Thank you.

Thank you very much I I had the same question is Ann and I just wanted to follow up on that the.

The way, we think about Tad this.

Force broadly defined sub segments data analytics consulting real world evidence and in technology.

Curious did.

Any of this.

Cautiousness or sluggishness did it expand beyond the analytics and consulting side.

What are what are the the growth trends in data real world evidence Tech.

Any nuances or changes there and then I have one one quick follow up if I might thank you Ara show of course, Eric. Thank you. So let's start with data right. The core of the business that has not changed.

Ari Bousbib: All right. Sure. Of course, Eric. Thank you. So let's start with data, right? The core of the business. That has not changed. You know, I would say 90+% of our business for the year, on the data side is just locked in, you know, by the month of December for the following year. So there's no, no, no change there. That's our recurring revenue and not much has happened there. The level of discretion in terms of data buys here from the clients is much less than the analytics and consulting segment that we were just discussing. For the faster growing businesses, real-world and commercial tech, now let's take, you know, the technology suites. You know, it's not like the revenue is a reflection of the sales in the year.

No.

I would say 90 plus percent of our business for the year.

On the data side is just locked in.

By the month of December for the following year. So there's no real change there.

Sure.

Recurring revenue and not much has happened there.

The.

Level of discretion in terms of data buys a year from the clients is much less than the analytics and consulting segment that we were just discussing.

For the faster growing businesses real world and commercial take let's take.

Technology.

Suites.

You know it's not like.

The revenue is a reflection reflection of the sales in the year. It's you know the revenue generated in technology.

Ari Bousbib: It's, you know, the revenue generated in technology is longer cycle, corresponds to technology awards from prior periods, from prior years. So nothing has changed there on the revenue side. There is cautiousness similar to consulting and analytics on the technology side in terms of new buys and new transitions. There's a number of dislocation in technology going on now, right now, by the way, both on the clinical side and on the commercial side. You know, the main CRM competitor decided to change their platform, so as a result, clients are kind of reviewing their technology decisions. On the technology side, we've got new innovations. We've got the main competitors there, Medidata and others, and Oracle are launching a new suite. So there is dislocation.

It's, you know, the revenue generated in technology is longer cycle, corresponds to technology awards from prior periods, from prior years. So nothing has changed there on the revenue side. There is cautiousness similar to consulting and analytics on the technology side in terms of new buys and new transitions. There's a number of dislocation in technology going on now, right now, by the way, both on the clinical side and on the commercial side. You know, the main CRM competitor decided to change their platform, so as a result, clients are kind of reviewing their technology decisions. On the technology side, we've got new innovations. We've got the main competitors there, Medidata and others, and Oracle are launching a new suite. So there is dislocation.

It is longer cycle corresponds to technology awards.

From prior periods from prior years, So nothing has changed there on the revenue side.

There is cautiousness.

<unk> to consulting and analytics on the technology side in terms of new buys and new transactions as a number of dislocation in technology going on right now by the way both on the clinical side and on the commercial side.

The main CRM competitor.

Decided to change their platforms. So as a result clients are kind of reviewing.

Technology decisions.

Technology side, and you've got new innovations, we get there.

The main competitors there are many data and all there is an oracle or launching new suites. So that means dislocation so because of that clients are kind of taking.

Ari Bousbib: So because of that, clients are kind of taking their time to review decisions, but that's not impacting our revenue in year. On the real-world side, again, you know, some of these are longer term studies. There is a little bit, a little bit, but again, I don't think that we've seen it affect our revenue in year that much. A little bit of cautiousness and, and perhaps a little bit of delaying on the late phase real-world studies that we've seen. Again, I'm just giving you really high-level commentary here on just to really scratch the business. But fundamentally, it is a 25% piece of the TAS segment that's consulting and analytics, that is essentially down year over year by, I think, about 5%, if I recall.

So because of that, clients are kind of taking their time to review decisions, but that's not impacting our revenue in year. On the real-world side, again, you know, some of these are longer term studies. There is a little bit, a little bit, but again, I don't think that we've seen it affect our revenue in year that much. A little bit of cautiousness and, and perhaps a little bit of delaying on the late phase real-world studies that we've seen. Again, I'm just giving you really high-level commentary here on just to really scratch the business. But fundamentally, it is a 25% piece of the TAS segment that's consulting and analytics, that is essentially down year over year by, I think, about 5%, if I recall.

Taking the time to easy decisions, but that's not impacting our revenue in U.

On the real World side again, some of these are longer term studies, there is a little bit a little bit, but again I don't think we've seen it affect our revenue EUR that much.

A little bit of cautiousness, and perhaps a little bit of delaying on the need phase real World studies that we've seen.

Again, I'm, just giving you a high level comment to rehear on just two to resist crush the business, but fundamentally it is a 25% piece of the task segment, that's true that's consulting and analytics that essentially down year.

Year over year.

By I think about 5%, if I recall and so everything else is.

Ari Bousbib: Everything else is, you know, pretty much stable, as expected.

Everything else is, you know, pretty much stable, as expected.

Pretty much stable as.

As expected.

Eric Coldwell: Thank you for that.

Ari Bousbib: What's your follow-up?

Thank you Paulo.

Eric Coldwell: Yeah, thank you for the follow-up. I know you don't tend to get into details on M&A in the quarter, with... You know, typically, these are smaller, smaller companies, sometimes at higher revenue multiples. But I did notice $426 million, I believe, spent on acquisitions this quarter. Was hoping to get some sense of, directionally, what that might have been-

Thank you for the follow up.

I know you don't tend to get into details on M&A in the quarter.

Typically these are smaller smaller companies.

Sometimes it's higher revenue multiples, but I did notice 426 million I believe spend on acquisitions. This quarter was hoping to get some sense of.

Directionally, what that might've been yen yesterday and I. Thank you.

Ari Bousbib: Yes.

Eric Coldwell: Yeah.

Ari Bousbib: And I think-

Eric Coldwell: Yeah.

Ari Bousbib: You know, it was done towards the end of the quarter. I mean, I can tell you, it's a company called Cognitive, for which we paid almost $300 million. It's a clinical site network. As we know, as part of our strategy overall, we are, we've been acquiring certain assets in that have strong patient enrollment capability in specific, in specific, therapies. So, Cognitive, in particular, is strong in internal medicine, in CNS, in vaccines as well, and has some large pharma customers. So the company is headquartered in Arizona. It's obviously a significant multiple of revenue, but. And we acquired that towards the end of the quarter.

We've done that towards the end of the quarter.

I mean I can tell you, it's a company called cognitive, but which we paid almost $300 million. So clinical site network as we know as part of our strategy overall.

We are we've been acquiring certain assets that have strong patient enrollment capability in specific.

In specific.

Therapies.

So.

Cognate Tvs in particular.

Strong in internal medicine in CNS.

In vaccines as well.

And has.

Some large pharma customers so we.

The company's headquartered in Arizona.

Obviously, it's a significant multiple of revenue, but and we acquired that towards the end of the quarter.

Ari Bousbib: We have a bunch of our smaller stuff over here, but that's the, what else do we have here? We have a $36 million investment in a small-

We have a bunch of our smaller stuff over here, but that's the, what else do we have here? We have a $36 million investment in a small-

And we have a bunch of smaller stuff.

Over here, but that's the.

What else do we have here we have a.

36 million dollar investment in a small vault we.

Ron Bruehlman: Yeah, we had one other site network-

We've had one other.

Site network right, we've bench wire backlog right.

Ari Bousbib: Right

Ron Bruehlman: - that we acquired.

Ron Bruehlman: that we acquired.

Ari Bousbib: Benchmark.

Ron Bruehlman: Benchmark, that we acquired, during-

You acquired <unk>.

Ari Bousbib: Site management organization, yeah. That was in psychiatry and smoking cessation. So again, highly specialized site management organizations, and we've done a couple this past quarter.

Right management organization Yeah.

That was that's what we do in psychiatry and smoking cessation, so again highly specialized.

The site management organizations locally we've done a couple these possible.

Eric Coldwell: So you are starting to follow the path of what PPD and Icon have done in prior years, with moving into opening up the marketplace for actually being, you know, a hybrid SMO, but probably still at a very small scale, I would assume.

Do you are you are.

Turning to follow the path of what PPD and icon have done in prior years with moving into the opening up the marketplace for actually been fine.

Being a hybrid SMO, but probably still at a very small scale over to assume yeah. Yeah. No. So we had already we do have.

Ari Bousbib: Yeah. Yeah. No, so we had already. We do have. We had a network that we had started ourselves, but we, you're correct, I don't think we have. We bought maybe one other one last year, if I remember, Nick. You're correct. Again, these are. It's not like we are buying dozens of these, but it happens to be that, coincidentally, we bought two in the quarter, and that's basically the bulk of the spend that you see there.

We had the network that we had to stop that ourselves.

But we.

Youre correct I don't think we are I mean, we bought maybe one other one last year if I remember.

He can youre correct again. These are it's not like we are buying dozens of these but.

It happens to be going.

Coincidentally, we bought two in the quarter and that's basically the bulk of.

I'll just spend that you see there.

Eric Coldwell: Perfect. Thank you so much.

Thank you so much thank you.

Ari Bousbib: Thank you.

Operator: We'll go next now to Tejas Savant at Morgan Stanley.

We'll go next now to pay off the bond at Morgan Stanley .

Tejas Savant: Hey, guys, good morning, and thanks for the time this morning. Ron, maybe one for you, and a quick follow-up on the M&A side for Ari as well, if I may. So Ron, first for you, I mean, margins in the midpoint look to be expanding nicely here into the fourth quarter, as implied by our third quarter guide. Can you just walk us through sort of what drives your confidence in that sort of margin expansion into year-end? And then on the M&A side, Ari, you know, we noticed that the Propel Media acquisition from earlier in the year is, you know, being blocked by the FTC at the moment. We had some new merger review guidelines, you know, draft guidelines admittedly, put out a couple of weeks ago as well.

Hey, guys. Good morning, and thanks for the time this morning.

Ron maybe one for you and a quick follow up on the M&A side Ferrari as well if I may. So firstly, you I mean margins in the mid point looks to be expanding nicely here into the fourth quarter as implied by your third quarter Guide.

So can you just walk us through sort of what drives your confidence in that sort of margin expansion until year end and then on the M&A side already.

We noticed that the propel media acquisition from earlier in the yard.

Being being blocked by the FTC at the moment, we have some new luxury view guidelines draft guidelines admittedly put out a couple of weeks ago as well does it concern you that you need to sort of reject your M&A strategy here in light of like some of these recent developments.

Tejas Savant: Does it concern you that you need to sort of rejig your M&A strategy here, in light of, like, some of these recent developments?

Does it concern you that you need to sort of rejig your M&A strategy here, in light of, like, some of these recent developments?

Ron Bruehlman: I'll take the margin question first, Tejas. Look, there were a couple of things here. Number one, we've had margin expansion all year, so it's a pretty good indicator that it's credible to say we're gonna have it in the back half of the year. We have a number of productivity initiatives underway to reduce cost, and those tend to be, of course, more back-end loaded. You get more benefit as you go through the year, so that's certainly gonna support margins in the back half of the year. I think you have another thing that's happening is some of the labor cost pressure that we've been feeling over time on a year-over-year basis. You're starting to, you know, kind of lap that and get more pricing benefit in as well.

I'll take the.

The margin question for JJ.

Look there were a couple of things here number one we've had margin expansion all year, so pretty good indicator that it's credible to say, we're going to have in the back half of the year, we have a number of productivity initiatives underway to reduce cost.

And those tend to be of course more back end loaded you get more benefit as you go through the year. So that's certainly going to support margins in the back half of the year I think another thing that's happening is the some of the labor cost pressure that we've been feeling.

Over time on a year over year basis Youre starting.

Kind of lap that and get more.

More pricing benefit in as well so it's a combination of factors now all of those factors.

Ron Bruehlman: So it's a combination of factors, and all those factors overcome a little bit of drag from mix. You know, for instance, the info business, which tends to be a profitable business, never grows as fast as the rest of the business. So, you know, we're very confident in the margin outlook for the back half of the year, and those are the reasons.

So it's a combination of factors, and all those factors overcome a little bit of drag from mix. You know, for instance, the info business, which tends to be a profitable business, never grows as fast as the rest of the business. So, you know, we're very confident in the margin outlook for the back half of the year, and those are the reasons.

Overcome a little bit of drag from mix for instance, the info business, which is tends to be a profitable business never grows as fast as the rest of the business stuff.

We're very confident in the margin outlook for the back half of the year and those are the reasons.

Ari Bousbib: Yeah, and, the question on the acquisition that we're trying to do, that we really, it's, I think, about a year, you know, that we have a strategy to continue to grow in the digital space. Our strategy remains intact. We've seen those merger guidelines. Look, I'm not gonna comment on the pending litigation with the FTC, pending litigation. We continue to believe strongly that there is absolutely zero logic to blocking this transaction, but, we are aware that there are a few novel theories that are being promoted by, this administration of the FTC. And, listen, administrations come and go, and, we are not gonna change our, M&A strategy. We believe that, you know, we are still a very small player in a hugely massive digital, promotional market.

Yeah and the.

The question on the on.

On the acquisition that we're trying to do that we need so I think about the year.

You know that we have a strategy to continue to grow in the digital space our strategy remains intact.

We've seen those merger guidelines look I'm not going to comment on the pending litigation with the FTC group pending litigation. We continue to believe strongly that there is absolutely zero.

Jeep to blocking these transaction.

But we are aware that there are a few novel theories that are being promoted.

By this administration of the FTC and listened administrations come and go.

And we're not going to change our M&A strategy.

We believe we are.

Still a very small player in it.

Hugely massoud digital.

Promotional market I mean, you've got the googles of this world.

Ari Bousbib: I mean, you've got the Googles of this world, giants, that also participate in this market, and we have a right to participate in this market, and we are serving the life sciences industry and their needs, and our customers welcome that development and our ability to offer those services. We believe that this acquisition actually increases the degree of intensity of competition in this market, and actually allows all other participants to counter the essential, you know, strong behemoths that dominate the digital space today. So we just simply do not understand the FTC's arguments, and I'll leave it at that.

<unk>.

That also participate in these market and new we have a right to participate in these markets and we are serving the life sciences industry and their needs and our customers welcome.

That development and our ability to offer those services, we believe that this equity acquisition actually we did it.

Agree or intensity of competition in this market.

And it actually allows the other participants to.

To counter the.

Essential strong Bam was that dominates the.

The digital space today, So we just simply do not understand.

The FTC's arguments and I'll leave it at that.

Nick Childs: Thanks, guys. Appreciate the color.

Thanks, guys I appreciate the color.

Ari Bousbib: You're welcome.

You're welcome.

Operator: We'll go next now to Luke Sergott at Barclays.

We'll go next now to loops you got at Barclays.

Luke Sergott: Awesome. Good morning, guys. Thanks again for the questions. So when you were talking about a little bit about decision-making getting elongated, and I know that that was on parts of the TAS business, but can you talk... can you give us a sense of how much longer that has gotten? You know, what does it typically take, for you guys, like, you know, like, let's say two, two months or three months to close a certain deal, and now that that's six months? Just give us some type of framework on how long that has gotten. And then as you guys think about things recovering, I assume that there's also some delayed decision-making on the big, you know, the, the RDS side.

Luke Sergott: Awesome. Good morning, guys. Thanks again for the questions. So when you were talking about a little bit about decision-making getting elongated, and I know that that was on parts of the TAS business, but can you talk can you give us a sense of how much longer that has gotten? You know, what does it typically take, for you guys, like, you know, like, let's say two, two months or three months to close a certain deal, and now that that's six months? Just give us some type of framework on how long that has gotten. And then as you guys think about things recovering, I assume that there's also some delayed decision-making on the big, you know, the, the RDS side.

Good morning, guys. Thanks again for the questions.

So when you were talking about a little bit about decision, making getting elongated I know that that was on parts of the test business, but can you talk or can you give us a sense of how much longer that has gotten.

Does it typically take for you guys like you know like let's say to two months three months to close a certain deal and now that that six months just give us some type of framework on how.

Long that has gotten and then.

As you guys think about things recovering I assume that Theres also some delayed decision making on the big.

Luke Sergott: So, when things start to turn around, is it safe to assume that the RDS side comes back before the TAS side when on this decision-making process?

So, when things start to turn around, is it safe to assume that the RDS side comes back before the TAS side when on this decision-making process?

Rds side so.

When things start to turn around is it safe to assume that the Rds side comes back before the test side when on this decision making process.

Ari Bousbib: Well, thanks for the question, Luke. I'm not sure what you mean by R&DS coming back. I mean, it's very strong. The R&DS segment is not experiencing any delays in decision-making that we can see, frankly. Again, we had another record quarter of bookings. Nothing's changed there. And our RFP flow, again, is at a record level. You know, I could spend time giving you stats on our leading indicator metrics on the R&DS side, you know, a qualified pipeline, and the pipeline overall and so on, are at a record high, and we continue our sales activities as before. Again, nothing, no sign of delayed decision-making on the R&DS side. I want to be very clear on that.

Well. Thanks for the question look I am not sure what you mean by RMB, yes, coming back very strong.

The the Rds segment, he is not experiencing any delays in decision, making that we can.

Frankly, again, we had another record quarter of bookings.

Nothing's changed there.

And our RFP flow.

Again is at a record level.

I could spend time, giving you the stats on the.

On our leading indicators metrics on the R&D side.

Sure.

Our qualified pipeline and the pipeline overall and so on the auto at a record high and we continue our sales activities as before again nothing.

No sign.

Delaying as you've been making on the R&D side I want to be very clear on that on the pads segment and see SMS and again, it's largely affected the consulting and analytics segment and I would say almost exclusively the issue is.

Ari Bousbib: On the TAS segment and CSMS, and again, it's largely affecting the consulting and analytics segment, and I would say almost exclusively. The issue is, you know, I can't quantify in months. I mean, there's stuff that's in our pipe that we've had since the end of last year, and here we are, August 1, and the clients on that specific opportunity still hasn't decided to... You know, everything is negotiated, and they know they have to do a study, but, you know, they could do the study next year.

On the TAS segment and CSMS, and again, it's largely affecting the consulting and analytics segment, and I would say almost exclusively. The issue is, you know, I can't quantify in months. I mean, there's stuff that's in our pipe that we've had since the end of last year, and here we are, August 1, and the clients on that specific opportunity still hasn't decided to... You know, everything is negotiated, and they know they have to do a study, but, you know, they could do the study next year.

Yes.

I can't quantify many months they stopped that scene.

In our pipe that we've had seen at the end of last year and here. We are August one and the clients on that specific opportunity.

She hasn't decided to everything is negotiated and they know they have to do the study, but they could do this study next year.

Ari Bousbib: So whatever, you know, clients on that side of the business, clients are basically saying to themselves: Well, do I need to do this now, or can I kick the can, another few months? But this stuff has been in our pipeline six months, and we haven't taken it out because the client still is telling us that they want to do it. They just haven't signed, yet. So yeah, I mean, it's a bit in the time frame that you're talking about. You know, it would have taken a month or two, and it's taking six months or more.

So whatever, you know, clients on that side of the business, clients are basically saying to themselves: Well, do I need to do this now, or can I kick the can, another few months? But this stuff has been in our pipeline six months, and we haven't taken it out because the client still is telling us that they want to do it. They just haven't signed, yet. So yeah, I mean, it's a bit in the time frame that you're talking about. You know, it would have taken a month or two, and it's taking six months or more.

So whatever.

Clients are on that side of the business clients are basically saying to themselves well do I need to do this now or can I keep the can.

Another few months.

Well they started as being our pipeline six months and we haven't taken it out because the clients finished telling us that they wanted to do it.

They just haven't signed.

Yet so yeah, I mean, it's a bit in the timeframe that you were talking about it would have taken a month or two and.

And he's taking six months or more.

Luke Sergott: Okay. And I guess I. Sorry for implying that you guys were seeing the RDS weakness or delays there in decision-making. Just going more of an overall pharma comment. And on that decision-making on the TAS, is that more due to them, like, your customers focusing more on where they're going to place their bets and deploy that capital for the clinical trials, and then kind of the TAS stuff is like a secondary knock-on or secondary benefit that you guys offer?

Okay, and I guess.

Sorry, if you are implying that you guys are seeing there rds weakness or.

Delays, there and decision, making just going more of a overall pharma comment.

On that decision, making on the task is that more due to them.

Your customers focusing more on where.

Where theyre going to place, our bets and deploy that capital for the for the clinical trials and then kind of the stuff is like a secondary knock on or secondary benefit that you guys offer.

Ari Bousbib: You know, it's really all over. Every client has. You know, it weighs on everyone, you know. Is there gonna be a recession? Is there gonna be a recession? Maybe we should delay the launch in Portugal. Maybe we should, you know, not look at our sales force now. We should do this next year. Maybe that project that we were planning to do to evaluate whether we should adjust pricing, you know, in consideration of maybe IRA implications and so on, on this drug, in that market, in that therapy, you know, we push it back. So it's not like I can give you a blanket answer. It's just, you know, it's just the environment.

You know, it's it's really all over every client has.

It's hard to it weighs on everyone is there going to be a recession is that going to be a recession.

Maybe we should delay the launch in Portugal, maybe we should.

Not.

Look at our sales force now we should do this next year, maybe that project that we were planning to do.

Two to evaluate whether we should adjust pricing.

You bet.

Consideration of there'll be I R. A.

And vacations and so on on these draw in that market in that therapy.

<unk>.

We pushed it back so it's not like.

Can give you a blanket answer each system.

It just it's just the environment, yet MOSFET rigs are such that look.

Ari Bousbib: The atmospherics are such that. Look, I'm sure someone is gonna ask me a question, and I'm assuming it's gonna be Shlomo, but, you know, our cash flow, our cash flow wasn't too special, this past quarter, and it's the same thing. You know, why are large pharma companies that are sitting on massive piles of cash not paying their bills on time? Our collections are not what they should be, and it's just, you know, it's a high-interest environment, so people tend to just, find all kinds of reasons why there was a comma missing in an invoice, and therefore we can't pay you, and hand me back the invoice in two weeks, you know? It's just the environment, you know, I don't have another answer.

The atmospherics are such that. Look, I'm sure someone is gonna ask me a question, and I'm assuming it's gonna be Shlomo, but, you know, our cash flow, our cash flow wasn't too special, this past quarter, and it's the same thing. You know, why are large pharma companies that are sitting on massive piles of cash not paying their bills on time? Our collections are not what they should be, and it's just, you know, it's a high-interest environment, so people tend to just, find all kinds of reasons why there was a comma missing in an invoice, and therefore we can't pay you, and hand me back the invoice in two weeks, you know? It's just the environment, you know, I don't have another answer.

I'm sure someone's going to ask me a question and I'm, assuming it's going to be Shlomo.

Our cash flow our cash flow wasn't to special.

This past quarter and is the same thing.

Why all large pharma companies that are sitting on massive piles of cash not paying their bills on time.

Our collections are not where they should be.

And it's just you know its a high interest environment. So people tend to just.

Final kinds of reasons why there was a commonly seen in invoice and therefore, we can't pay you and send me back the invoice in two weeks you know it's a it's just the environment.

I don't have another answer.

Luke Sergott: Gotcha. That's helpful. Thank you.

Got you that's helpful. Thank you.

Ari Bousbib: Thank you, Luke.

Luke.

Operator: We'll go next now to Shlomo Rosenbaum at Stifel.

And we'll go next now to Shlomo Rosenbaum of Stifel here, we go.

Nick Childs: Here we go.

Shlomo Rosenbaum: ... Ari, I still get a question, even though you asked that one, right?

Shlomo Rosenbaum: Ari, I still get a question, even though you asked that one, right?

CRE I still get a question, even though you asked that one right yeah yeah.

Ari Bousbib: Yeah.

Shlomo Rosenbaum: All right, thank you. Actually, just I wanted to touch on one, just, just a metric, and then, maybe follow up with another one, just more, a little more broad. Just if you could talk to. Just tell us what the growth rate on real world evidence was in the quarter. And then, Ari, maybe just, if you could talk a little bit about, you know, in terms of, AI, you gave us a little bit of a teaser. But can you talk a little bit about just, you know, where you might have unique advantages, either because of the investments you've made in AI over the last, bunch of years, or, you know, just because of the, uniqueness of the information that you've aggregated? Is there anything that's out there in market that's really unique right now?

Alright. Thank you actually just I wanted to touch on one just just a metric and then maybe follow up with another one just more a little more broad just if you could talk to.

With the growth rate on a real world evidence was in the quarter and then maybe just if you could talk a little bit about.

In terms of AI, you give us a little bit of a teaser, but can you talk a little bit about just.

You might have unique advantages.

Either because of the investments you've made in AI over the last bunch of years or just because of the.

Uniqueness of the information that you've aggregated is there anything thats out there in market Thats really unique right now or is this really stuff that's going to be on the come. Thank you.

Shlomo Rosenbaum: Or is this really stuff that's gonna be on the come? Thank you.

Or is this really stuff that's gonna be on the come? Thank you.

Ari Bousbib: Thank you. So quickly on the real-world evidence, you know, it's been double digits for a while, and it's still strong double digits, so nothing changed there. With respect to AI, we're obviously very excited by the opportunity. This is not new for us, right? I mean, we've been working on this for a long time. We've invested since 2015, 2016, and we own a number of market-leading and, you know, proprietary AI software engines. We've dedicated AI, ML resources, you know, for a long time. And we are extremely well positioned. You know, we apply AI in drug development, discovery, clinical development, safety, market access, medical affairs, and of course, in commercialization to inform, you know, promotional and sales and targeting activities.

Thank you so quickly on the real world evidence, it's been double digits for what and students strong double digits. So nothing changed there.

With respect to AI, we're obviously very excited by the opportunity. This is not new for US right. I mean, we've been working on this for an old Guy.

We've invested since 2015, 16, and we own a number of market leading in.

Proprietary AI software engines, we've dedicated am amount of resources.

For a long time.

And we are extremely well positioned we apply AI in drug development.

Discovery clinical development safety market access medical affairs and of course in commercialization to inform.

Promotional and sales and targeting activities.

Ari Bousbib: We are using AI in NLP processes in translations of medical documentations and protocols. You know, that's for the offerings part of the business, if you will. On the internal side, you know, we've applied AI to many of our own internal processes, for example, lead to cash. We've really across a set of processes to create efficiencies operationally. So it is a great opportunity for us, and has been for the past few years. Now, you know, how do you use AI to gain competitive advantages? You know, it helps optimize site identification based on the patient populations that we derive from our-- that we mine in our databases. Helps optimize patient recruitment techniques based on data and analytical footprint.

We are using AI in NLP processes in translations of medical documentations and protocols. You know, that's for the offerings part of the business, if you will. On the internal side, you know, we've applied AI to many of our own internal processes, for example, lead to cash. We've really across a set of processes to create efficiencies operationally. So it is a great opportunity for us, and has been for the past few years. Now, you know, how do you use AI to gain competitive advantages? You know, it helps optimize site identification based on the patient populations that we derive from our-- that we mine in our databases. Helps optimize patient recruitment techniques based on data and analytical footprint.

We are using data and then it would be.

<unk> processes and translations of medical documentation and protocols.

That's.

For the offering part of the business. If you will on the on the internal side.

We've applied AI to many of our own internal processes for example.

Two cash.

You read across a set of processes to create efficiencies operation. So it is a great opportunity for us.

Okay.

And it has been for the past few years now.

How do you use AI to gain competitive advantages helps optimize site identification based on the patient populations that we derived from our that we mine.

That's our bases.

Helps optimize patient recruitment techniques based on data and analytical footprint.

Ari Bousbib: It helps optimize development, drug development protocols. We can, you know, it helps build predictive enrollment models based on all the protocol criteria thresholds. You're familiar with the next best application in our OCE suite, which leverages the know-how and the historical data to create predictive models of engagement with customers. We also been developing a novel biomarker database with IQVIA's own natural language processing tools. You know, we've used this in Alzheimer's studies to have an early identification recruitment of patients with most likely to develop Alzheimer's. A lot of activities, frankly, to expand patient pathways.

It helps optimize development, drug development protocols. We can, you know, it helps build predictive enrollment models based on all the protocol criteria thresholds. You're familiar with the next best application in our OCE suite, which leverages the know-how and the historical data to create predictive models of engagement with customers. We also been developing a novel biomarker database with IQVIA's own natural language processing tools. You know, we've used this in Alzheimer's studies to have an early identification recruitment of patients with most likely to develop Alzheimer's. A lot of activities, frankly, to expand patient pathways.

It has optimized development drug development protocols.

We can we have support.

As a build it.

Predictive enrollment models based on all the puts.

Nicole criteria thresholds.

Okay.

You are familiar with the next best application in our Oce suite, which leverages, the knowhow and the historical data to create predictive models of engagements with customers.

We also.

Developing a novel biomarker database.

One natural language processing.

Tools.

We've used it in the old timers studies to travel and early identification of recruitment of patients with most likely to develop whole dimers.

A lot of.

<unk> frankly.

To expand patient pathways. So.

Ari Bousbib: So, you know, if you look into, I'm sure it's somewhere in our websites or literature, we have over 150 patent-pending methodologies and algorithms, more than 30 predictive data disease models, more than 300 Lifestrand-specific analytical libraries. I mean, I could go on and on. We've got a lot of stuff here of proprietary material in AI. Now, this whole, you know, buzz around generative AI, you know, as people are finding out, it's not so easy to apply and actually derive precise and relevant insights. And I, you know, I'm looking forward to presenting why even using. And by the way, we are working with, you know, everyone who's announced significant generative AI applications and models.

So, you know, if you look into, I'm sure it's somewhere in our websites or literature, we have over 150 patent-pending methodologies and algorithms, more than 30 predictive data disease models, more than 300 Lifestrand-specific analytical libraries. I mean, I could go on and on. We've got a lot of stuff here of proprietary material in AI. Now, this whole, you know, buzz around generative AI, you know, as people are finding out, it's not so easy to apply and actually derive precise and relevant insights. And I, you know, I'm looking forward to presenting why even using. And by the way, we are working with, you know, everyone who's announced significant generative AI applications and models.

If you're looking to I'm sure, it's somewhere in our websites or literature.

We have over 150 patents pending methodologies and algorithms more than 30 predictive disease models.

More than 300 lifestyle specific analytical libraries.

I mean I could go on and on we get.

A lot of stuff your own proprietary material.

Now this whole.

Buzz around generative AI.

Yeah.

As people are finding finding out it's not so easy to apply and actually derive precise and relevant.

Yes.

Insights.

I'm looking forward to presenting.

Why.

Even using and by the way we are working with.

Everyone was.

Announced significant generative AI.

Applications and models.

Ari Bousbib: Because, you know, it's really, as always, it's, you know, if you don't have access to the business rules and to the relevant content, you're gonna come up with what they call hallucinations. And we've tried it, and we are working with partners, with technology partners, and it's very clear that, you know, we have the sauce internally here that would enable those, you know, large language model tools to be a lot more effective and accurate and precise than what they are today. In the world of life sciences, where they basically only have access to what's available on the internet or on public sources. Hey, that's what I can say now, but again, it's a very exciting development.

Because, you know, it's really, as always, it's, you know, if you don't have access to the business rules and to the relevant content, you're gonna come up with what they call hallucinations. And we've tried it, and we are working with partners, with technology partners, and it's very clear that, you know, we have the sauce internally here that would enable those, you know, large language model tools to be a lot more effective and accurate and precise than what they are today. In the world of life sciences, where they basically only have access to what's available on the internet or on public sources. Hey, that's what I can say now, but again, it's a very exciting development.

Because.

It's really as always.

If you.

Don't have access to the business rules and to the relevant content, you're going to come up with what.

What they call <unk> nations.

And we've tried needs and we've we are working with.

With partners with technology partners.

And it's very clear.

That.

We have the source.

Internally that would enable those.

Lawshe language model pools.

A lot more effective and accurate and precise.

Then what they are today.

In the World of life Sciences, where they basically only have access to what's available on the on the international on publicly public sources.

Alright, that's all I can say now, but again, it's a very exciting development.

Ari Bousbib: Obviously, we are very busy leveraging internally, and there was a question earlier on margins and margin expansion. It's, and it's one of the several initiatives that is helping us generate margin expansion.

Obviously, we are very busy leveraging internally, and there was a question earlier on margins and margin expansion. It's, and it's one of the several initiatives that is helping us generate margin expansion.

Obviously, we are very busy.

Leveraging internally and then there was a question on margins and margin expansion is and it's one of the several.

Initiatives that.

Helping us.

Generate margin expansion.

Okay.

Nick Childs: Thank you.

Shlomo Rosenbaum: Thank you.

Thank you.

Okay.

Operator: Thank you. We go next now to Jailendra Singh at Truist.

Thank you and the next now to Jillian Youre seeing interest.

Jailendra Singh: Yeah, thank you, and thanks for taking my questions. I actually want to ask about data and information offerings business for you guys. One of your competitors recently talked about coming up with competitive solutions in that space for pharma companies. I understand this is a more stable and high margin, very sticky business for you guys, but just remind us about your positioning there and what makes the barriers to entry high in that business.

Yeah. Thank you and thanks for taking my questions I, just wanted to ask about data and information offerings business for you guys.

One of your competitors recently talked about coming up with competitive solutions in that space for pharma companies I understand it's a more stable and high margin very sticky business for you guys, but just remind us about your positioning there and what makes the barriers to entry high in that business.

Ari Bousbib: You, you are asking about the data business?

You are asking about the data business, yes, yes.

Jailendra Singh: Yep. Yep.

Ari Bousbib: Okay. I'm-

Okay.

Nick Childs: The comments that Veeva's made in terms of entering into the data space.

Jailendra Singh: The comments that Veeva's made in terms of entering into the data space.

On the comments that David has made in terms of entering into the data. Okay. Okay. Yeah, I mean look I don't know what to say here.

Ari Bousbib: Okay, okay. Yeah. I mean, look, I don't know what to say here. It's just not the same planet. The only way I can put it. You know, the scale, the global presence in over 100 countries, the level of granularity, the infrastructure, the IT infrastructure to process, cleanse, cure, connect all that data on a global basis, the business rules. I mean, look, in healthcare, data is chaos. It's, you know, you can have as much data as you want. If you don't understand it and connect it and cleanse it and know what you're dealing with, it's not really relevant. We have data on about 1 billion four-

It's just not the same planet.

The only way I can put it.

This scale.

The global presence in over 100 countries.

The level of granularity.

The infrastructure.

The it infrastructure to process plans cure connect all that data on a global basis.

The business rules I mean looking at health care data is chaos.

It's you know you could have as much data as you want if you don't understand it and connected and cleanse it and know what youre dealing with.

It's not really relevant we have data on.

About 1 billion four.

Nick Childs: Billion two.

Ari Bousbib: 1.2 billion patients. You know, that I don't think there's anyone that has anything resembling what we have. I mean, I just don't know. It's like-

There have been two patients.

And.

You know.

I don't think there's anyone that has anything.

Resembling.

What we have I mean, I just don't know.

Nick Childs: We've been at it since the early 1950, Jailendra. That should tell you something. I mean, you don't... You-- there's nothing that would stop somebody, technically, from recreating what we have in data if they have 70 years and all the expertise we have.

Like we've been at it since the early 19 fifties Challender that should tell you something I mean.

You don't there's nothing.

That would stop somebody technically from recreating what we have in data.

If they have 70 years and all the expertise we have.

Jailendra Singh: Got it. Thanks a lot.

Got it thanks a lot.

Ari Bousbib: Thank you.

Thank you.

Nick Childs: Okay. Well, thanks everyone for joining us today. We look forward to speaking to all of you again on our third quarter earnings call. The team and I will be available the rest of the day to take any other follow-up questions you may have. Thanks for joining.

Okay, well, thanks, everyone for joining us today, we look forward to speaking to all of you again on our third quarter earnings call.

The team and I will be available the rest of the day to take any other follow up questions. You may have thanks for joining.

Operator: Thank you again, ladies and gentlemen. That will conclude the IQVIA Q2 2023 earnings conference call. I thank you all so much for joining us and wish you all a great day. Goodbye.

Thank you again, ladies and gentlemen, we will conclude the <unk> second quarter 2023 earnings conference call. Thank you all so much for joining us and wish you all a great day Goodbye.

Luke Sergott: Please wait. The conference will begin shortly.

Operator: Please wait. The conference will begin shortly.

Please wait the conference will begin shortly.

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Q2 2023 IQVIA Holdings Inc Earnings Call

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