Q1 2024 IQVIA Holdings Inc Earnings Call

Operator: Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to the Iqvia first quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise.

Ladies and gentlemen, thank you for standing by at this time I would like to welcome everyone to the IQ via first quarter 2024 earnings Conference call.

All lines have been placed on mute to prevent any background noise. After the speakers' 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.

Operator: 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 the star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. As a reminder, this call is being recorded. Thank you. I would now like to turn the call over to Kerry Joseph, Senior Vice President, Investor Relations, and Treasury. Mr. Joseph, please begin your conference.

If you would like to withdraw your question Press Star one again.

As a reminder, this call is being recorded.

Operator: I would now like to turn the call over to Kerry Joseph Senior Vice President of Investor Relations and Treasury. Mr. Joseph Please begin your conference.

Kerri Joseph: Thank you operator.

Kerri Joseph: Good morning, everyone.

Kerri Joseph: Thank you for joining our first quarter 2024 earnings call. With me today are Ari Bousbib, Chairman and Chief Executive Officer, Ron Bruehlman, Executive Vice President and Chief Financial Officer, Eric Sherbert, Executive Vice President and General Counsel, Mike Fedof, Senior Vice President, Financial Planning and Analysis, and Gustavo Peroni, Senior Director, Investor Relations.

Kerri Joseph: Thank you for joining <unk> first quarter 2024 earnings call.

Kerri Joseph: With me today are <unk>, Chairman and Chief Executive Officer, Ron <unk>, Executive Vice President and Chief Financial Officer, Eric Server.

Kerri Joseph: <unk>, Vice President and General Counsel.

Kerri Joseph: Feed off senior Vice President financial planning and analysis, and Gustavo Peroni Senior director Investor Relations.

Kerri Joseph: 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 presentation 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. Actual results could differ materially from those stated or implied by forward-looking statements due to risk 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.

Kerri Joseph: 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 and the events and presentations section of our <unk> Investor Relations website at IR Dot IQ via Dot com.

Kerri Joseph: Before we begin I would like to caution listeners that certain information discussed by management. During this conference call will include forward looking statements.

Kerri Joseph: 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 I discussed in the company's filings with the Securities and Exchange Commission, including our annual report on Form 10-K, and subsequent SEC filings.

Kerri Joseph: 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, Ari Bousbib.

Kerri Joseph: 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.

Ari Bousbib: A reconciliation of these non-GAAP measures to the comparable GAAP measures is included in the press release and conference call presentation.

Ari Bousbib: I would now like to turn the call over to our chairman and CEO Ari booths fee.

Ari Bousbib: Thank you, Kerry, and good morning, everyone. Thank you for joining us today to discuss our first quarter results. We had a strong start to the year. We delivered top and bottom line numbers that were on or slightly above our expectations. Excluding the impact of foreign exchange and COVID-related work, our revenue grew 6%. We continue to see a favorable demand environment for our industry. On the clinical side, demand from our RMDS clients remains solid. Our backlog reached a new record and grew almost 8% versus the prior year. Net new bookings for the quarter were approximately $2.6 billion, representing a quarterly book-to-bill of $1.23 trillion.

Ari Bousbib: Thank you Gary and good morning, everyone. Thank you for joining us today to discuss our first quarter results.

Ari Bousbib: We had a strong start to the year, we delivered top and bottom line numbers.

Ari Bousbib: On or slightly above our expectations.

Ari Bousbib: Excluding the impact of foreign exchange and coffee related work all revenue grew 6%.

Ari Bousbib: We continue to see a favorable demand environment for our industry all the preclinical side demand from our R&D S clients remains solid.

Ari Bousbib: Our backlog reached a new record and grew almost 8% versus prior year.

Ari Bousbib: Net new bookings for the quarter were approximately $2.6 billion, representing a quarterly book to Bill of 123.

Ari Bousbib: This included a substantial cancellation in the CNS area that is in the public domain, and I'm sure many of you are aware of. Excluding this large cancellation, which is well outside the typical cancellation size we see in a quarter, our first quarter book-to-bill ratio would have been over 1.3, actually closer to 135. Our quarterly RFP flow was up 6% year over year. And that's in value, meaning in dollar terms.

Ari Bousbib: This.

Ari Bousbib: We recorded a substantial cancellation in the CNS area that is in the public domain and I'm sure. Many of you are aware of <unk>.

Ari Bousbib: Excluding this loss cancellation, which is well outside the typical cancellation size, we've seen a quarter or first quarter of book to Bill ratio would have been over 1.3 actually closer to 135.

Ari Bousbib: Our quarterly RSP floor was up 6% year over year.

Ari Bousbib: And that's in value, meaning in dollar terms and it was driven by mid to high single digit growth in all customer segments again in dollar terms.

Ari Bousbib: And it was driven by mid to high single-digit growth in all customer segments, again, in dollar terms. Our qualified pipeline grew double digits versus the prior year, again, in value, in dollar terms. Emerging biotech funding was very strong, according to BioWorld, which we use consistently as a source. First quarter EBP funding was $47.1 billion, which is more than triple the funding of Q1 last year. Shifting to TAS, our commercial side of our business, revenue in the quarter grew as expected.

Ari Bousbib: Our qualified pipeline grew double digits versus prior year again in value in dollar terms.

Ari Bousbib: Merging biotech funding was very strong according to buy a world in which we use consistently.

Ari Bousbib: As a source first quarter EVP funding was $47.1 billion, which is more than triple the funding of Q1 last year.

Ari Bousbib: Shifting to our commercial side of our business revenue in the quarter grew as expected with the modest uptick in activity anticipated for later this year, we continue to forecast an improvement in the back half of the year.

Ari Bousbib: With the modest uptick in activity anticipated for later this year, we continue to forecast an improvement in the back half of the year. Meanwhile, we continue to see some favorable signs. For example, our pipeline remains strong. In our conversations with clients, there is more clarity on budget, and we're starting to see faster decision timing with some clients, compared to the second half of 2023. Now this said, the tone overall with our clients remains cautious, and the fact is that the uncertain microenvironment persists. As everyone can tell from the Fed's remarks yesterday,

Ari Bousbib: We continue to see some favorable signs for example, our pipeline remains strong.

Ari Bousbib: In our conversations with clients there is more clarity on budgets and we are starting to see faster decision timing with some clients.

Ari Bousbib: To the second half of 2023 now this say the tone overall with our clients remains cautious and the fact is that the uncertain macro environment persists.

Ari Bousbib: As everyone can tell from the fed.

Ari Bousbib: Turning now to the results for this quarter. Revenue for the first quarter grew 2.3% on a reported basis and 2.9% at constant currency. Compared to last year and excluding COVID-related work from both periods, we grew the top line approximately 6% on a constant currency basis, including just over a point of contribution from acquisitions. First quarter adjusted EBDAC came in at $862 million, and first quarter adjusted diluted EPS was $2

Ari Bousbib: Our remarks yesterday, turning now to the results for this quarter.

Ari Bousbib: Revenue for the first quarter grew 12, 3% on a reported basis and two 9% at constant currency <unk>.

Ari Bousbib: Compared to last year, and excluding coffee related works from both periods. We grew the top line approximately 6% on a constant currency basis.

Ari Bousbib: Including just over a point of contribution from acquisitions.

Ari Bousbib: First quarter adjusted EBITDA came in at $862 million and first quarter adjusted diluted EPS was $2 and 54 sets.

Ari Bousbib: I'd like to share a few highlights of business activity. Let's start with the TAS segment. You will have seen that we are expanding our global strategic partnership with Salesforce. The partnership will integrate innovations from Iqvia OCE with Salesforce's Life Sciences Cloud to provide customers with a new single end-to-end engagement platform, which is expected to be available in late 2025. This is very exciting news for the industry, as we expect to transform the engagements with HCPs and with patients with the next generation CRM platform that's built on OCE and that's powered by Iqvia data, domain expertise, and advanced analytics. separately, and as we discussed in the past, that continues to be an evolution in the way the industry manages HCP and patient engagement. For example, there is an ongoing shift in HCP engagement from in-person to digital interactions.

Ari Bousbib: I'd like to share a few highlights of business activity and let's start with the <unk> segments.

Ari Bousbib: You would have seen that we are expanding our global strategic partnership with Salesforce. The partnership will integrate innovation, some IQ yet with CE.

Ari Bousbib: Salesforce is life sciences cloud to provide customers with a new <unk>.

Ari Bousbib: Single end to end engagement platform, which is expected to be available late 2025. This is very exciting news for the industry as we expect we transformed the engagements with Hcp's and with patients with a next generation CRM platform. That's built on oce and that's powered by <unk>.

Ari Bousbib: IQ of yet data domain expertise and advanced analytics.

Ari Bousbib: Separately and as we discussed in the past.

Ari Bousbib: That continues to be an evolution on the way in how the industry manages HCP and patient engagement for.

Ari Bousbib: For example, there's an ongoing shift in HCP engagement from in person to do.

Ari Bousbib: Digital interactions on the patient side, there is increased emphasis on direct to patient solutions through patient support and market access programs, including financial support hub services Medical education as you know we've been investing in building out these digital capabilities.

Ari Bousbib: On the patient side, there is an increased emphasis on direct-to-patient solutions through patient support and market access programs, including financial support, hub services, and medical education. As you know, we've been investing in building out these digital capabilities, and we are getting good market traction. For example, in the quarter, three top pharma clients awarded a QVL contract for our smart engagement solution to understand the healthcare provider online journey across therapeutic areas and factor that in earlier in the drug development process.

Ari Bousbib: And we are getting good market traction for example in the quarter.

Ari Bousbib: Three former client awarded <unk> contract for our smart engagement solution to understand their health care provider online journey across therapeutic areas and factored that in earlier into the drug development process.

Ari Bousbib: A top five pharma bought Iqvia's omnichannel navigator solution to assess return on marketing investments, measure customer interactions and campaign performance, and make data-driven decisions to optimize marketing strategies. A global mid-sized pharma awarded Iqvia a multi-year contract to implement our commercial compliance solution. These solutions will allow our clients' interactions with healthcare professionals to be in compliance with transparency regulatory obligations in over 30 countries. An EBP client bought Iqvia's Patient Relationship Manager offering, which provides a comprehensive real-time view of the patient's journey and helps maximize the impact of their patient support program. In general, the TAS segment is seeing more demand for our sophisticated technology-enabled analytics solution.

Ari Bousbib: A top five pharma bought IQ Omnichannel navigators solution.

Ari Bousbib: Assess return on marketing investments measure of customer interactions and campaign performance and make data driven decisions to optimize marketing strategies.

Ari Bousbib: Our global mid sized pharma awarded <unk>, a multiyear contract to implement our commercial compliance solutions.

Ari Bousbib: These solutions will allow our clients' interactions with health care professionals to be in compliance with transparency regulatory obligations in over 30 countries.

Ari Bousbib: Ben EVP clients bought IQ Evs patient relationship manager offering which provides a comprehensive real time view of the patient journey and helps maximize the impact of their patient support program.

Ari Bousbib: In general that that segment is seeing more demand for our sophisticated technology enabled analytics solutions for example in the quarter.

Ari Bousbib: For example, in the quarter, a top 10 pharma client awarded Iqvia a contract to streamline the clinical operation data management process. Iqvia's technology provides real-time data sharing, eliminating unnecessary file processing, and improving the speed of data updates. Also in the quarter, a large medtech firm bought the Iqvia offering that enables better stakeholder targeting and go-to-market execution, ultimately enhancing the client's ROI. Moving to

Ari Bousbib: 10 pharma clients awarded IQ go contract to streamline clinical operations data management processes.

Ari Bousbib: <unk> technology provides real time data sharing.

Ari Bousbib: You mean 18 unnecessary five processing and improving the speed of data updates.

Ari Bousbib: Also in the quarter, a large med tech firm.

Ari Bousbib: The <unk> offering that enables better stakeholders targeting and go to market execution ultimately enhancing the clients rois.

Ari Bousbib: Moving to real World.

Ari Bousbib: A top 10 pharma company chose Iqvia to conduct a comparative study of the effectiveness of treatments against the standard of care in patients with a specific marker across 10 different cancers. The goal is to help the client gain market access and reimbursement for their treatment, which can be used for multiple types of cancer based on a single biomarker. Iqvia was awarded a contract by a top 10 pharmaceutical company to demonstrate the effectiveness of a novel eye movement technology addressing a common symptom in patients with multiple sclerosis.

Ari Bousbib: A top 10 pharma company chose IQ have yet to conduct a comparative study of the effectiveness of treatments against the standard of care in patients with a specific marker across 10 different cancers.

Ari Bousbib: The goal is to have the client gain market access and reimbursement for their treatment, which can be used for multiple types of cancer based on a single biomarker.

Ari Bousbib: <unk> was awarded a contract by a top 10 pharma to demonstrate the effectiveness of a novel eye movement technology.

Ari Bousbib: Dressing a common symptom in patients with multiple sclerosis.

Ari Bousbib: The top 10 pharma clients awarded Iqvia a large real-world respiratory infection vaccine effectiveness study. We were selected based on our strong epidemiologic, scientific, and therapeutic expertise, as well as our global footprint to augment site identification and operational execution. And finally, to conclude my commentary on the TAZ segment,

Ari Bousbib: The top 10 pharma clients awarded <unk>, a large real world respiratory infection vaccine effectiveness study were selected based on our strong epidemiology scientific and therapeutic expertise as well as our global footprint to augment site identification and operational execution.

Ari Bousbib: And finally to conclude my commentary on the segments.

Ari Bousbib: I'd like to highlight the work we're doing in public health. It's an increasing area of focus for governments looking to extend life expectancy, reduce health inequalities, and improve overall quality and access to care. Some examples of Iqvia's work in this area, for example, one of the largest UN health agencies contracted Iqvia to help with a major initiative to eradicate all types of polioviruses in Africa, are focused on children. Iqvia is deploying personnel to improve outbreak response with vaccines and to strengthen polio surveillance and response in hard-to-reach areas.

Ari Bousbib: I'd like to highlight the work we're doing in public health has been an increased area of focus for governments looking to extend life expectancy.

Ari Bousbib: Reduce health inequalities and improve overall quality of and access to care.

Ari Bousbib: So far, Iqvia's team has conducted visits to more than 12,000 sites and trained over 122,000 health workers across 26 African countries. Another example of our work in this area, Iqvia was selected to conduct a large EU-funded project to create a national oncology network and database for one of the European countries' Ministry of Health to improve the country's low cancer survival rate. The single IT platform will connect national hospitals and the reimbursement fund in that country.

Ari Bousbib: Some examples of our <unk> work in this area.

Ari Bousbib: One of the largest U N health agencies contracted a <unk> to help with a major initiative to eradicate all types of pull your viruses in Africa.

Ari Bousbib: Our focused on children.

Ari Bousbib: <unk> is deploying personnel to improve outbreak response with vaccines and to strengthen portio of surveillance and response in hard to reach areas. So far at UBS team conducted visits to more than 12000 sites and trained over 122000 health workers across 26 African.

Ari Bousbib: Conference.

Ari Bousbib: Another example of our work any scenario excuse me I was selected to conduct a large EU funded project to create a national oncology network and database.

Ari Bousbib: One of the Europeans Ministry of health to improve the accounts with low cancer survival rates.

Ari Bousbib: A single it platform will connect national hospitals, and the reimbursement farmed in that country.

Ronald E. Bruehlman: Lastly, in public health, the Global Fund selected Iqvia to support 13 African countries to improve the visibility of their supply chain performance, ensure the availability of commodities and services, mitigate service disruptions, and provide stronger assurance through more frequent on-site spot checks. The project focuses on pharmaceutical and diagnostics analytics from over 2,800 facilities for tracer health products for HIV, tuberculosis, and malaria.

Ari Bousbib: The platform will leverage curated oncology data and analytics to manage patient risk and improve treatments in a cost efficient manner.

Ronald E. Bruehlman: Lastly on public health the Global fund selected <unk> to support 13 African countries to improve the visibility of that supply chain performance and sure the availability of commodities and services mitigates service disruptions and provide stronger assurance.

Ronald E. Bruehlman: More frequent onsite spot checks.

Ronald E. Bruehlman: Project focuses on pharmaceutical and diagnostics analytics from over 2800 facilities for tracer health products in HIV tuberculosis and malaria. This work is very important to us in public health. It's also extremely important to our global pharma clients.

Ronald E. Bruehlman: This work is very important to us in public health. It's also extremely important to our global pharma clients, who are extremely active in this area as well. Moving to RNDS, let's start by highlighting two more distinguished vaccine development awards. The top 10 pharma selected Iqvia to support the development of a novel respiratory vaccine, which could represent a significant breakthrough as the only vaccine targeting multiple respiratory viruses simultaneously. Iqvia Laboratories secured a preferred strategic partnership with a top 10 pharma based on Iqvia's unique expertise, innovation, and delivery model.

Ronald E. Bruehlman: Who are extremely active in this area as well.

Ronald E. Bruehlman: Moving to R&D, yes, let's start by highlighting two more distinguished vaccine development Awards.

Ronald E. Bruehlman: Top 10 pharma selected IQ, you've yet to support the development of a novel respiratory vaccine, which could which.

Ronald E. Bruehlman: Foods represent a significant breakthrough as the only vaccine targeting multiple respiratory viruses simultaneously.

Ronald E. Bruehlman: IQ via laboratory secure the preferred strategic partnership with a top 10 pharma based on <unk> unique expertise innovation and delivery model.

Ronald E. Bruehlman: As we discussed in the past, there is stronger demand for FSP services, and we continue to win our fair share in this segment as well. For example, this quarter, we secured an extension of FSP data management services with a leading mid-size pharma known for their innovative rare blood disease therapy. In the EBP segment, we secured two large awards where we displaced incumbent CROs based on our global scale and AI-enabled capabilities.

Ronald E. Bruehlman: As we discussed in the past there is stronger demand for FSP services, and we continue to win our fair share in this segment as well for example in the quarter. We secured an extension of FSP data management services with a leading mid sized pharma known for their innovative.

Ronald E. Bruehlman: Ray or blood disease therapies.

Ronald E. Bruehlman: In the Edp segments, we secured two large awards, where we displaced incumbent Seow Rose Bay.

Ronald E. Bruehlman: <unk> on a global scale and AI enabled capabilities, we were selected by the U S. West Coast EVP clients to conduct two large phase III oncology studies simultaneously. This is a big deal as the clients is new to <unk>, yet and selected us based on our.

Ronald E. Bruehlman: He was selected by a U.S. West Coast EBP client to conduct two large phase three oncology studies simultaneously. This is a big deal, as the client is new to Iqvia and selected us based on our differentiated AI-enabled capabilities, as the trial protocol includes complex inclusion-exclusion criteria, unusually large patient cohorts, and aggressive enrollment timelines. We also won another large EVP full service phase 3 trial, displacing the incumbent again by leveraging our AI-enabled startup site identification, activation, and enrollment capabilities. With that, I will turn it over to Ron for more details on our financial performance.

Ron: <unk> AI enabled capabilities as the trial protocol includes complex inclusion exclusion criteria unusually large patient cohorts and aggressive enrollment timelines.

Ron: We also won another large EVP foodservice phase III trial, displacing the incumbent again by leveraging our AI enabled startup site identification activation and enrollment capabilities.

Ronald E. Bruehlman: With that I will turn it over to Ron for more details on our financial performance.

Ronald E. Bruehlman: Thanks, Ari, and good morning, everyone. Let's start by reviewing red. First quarter revenue of $3,737,000,000 grew 2.3% on a reported basis and 2.9% at constant current exchange rates. COVID-related revenues were approximately $45 million, down about $105 million versus first quarter 2023. Excluding all COVID-related work from both this year and last, constant currency growth was approximately 6%. As already mentioned, acquisitions contributed at just over 100 basis points to this growth. Technology and analytics solutions revenue for the first quarter was $1,453,000,000, 0.6% reported and 1% at constant currency. Excluding all COVID-related work, constant currency growth in TAS was 3%.

Ron: Thanks, Ari and good morning, everyone.

Ronald E. Bruehlman: Let's start by reviewing revenue.

Ronald E. Bruehlman: First quarter revenue of $3 billion $737 million grew two 3% on a reported basis and two 9% at constant currency.

Ronald E. Bruehlman: Covid related revenues were approximately $45 million down about $105 million versus the first quarter of 2023.

Ronald E. Bruehlman: Excluding all Covid related work from both this year and last constant currency growth was approximately 6%.

Ronald E. Bruehlman: As already mentioned acquisitions contributed just over 100 basis points of this growth.

Ronald E. Bruehlman: Technology and analytics solutions revenue for the first quarter was $1.453 billion of 0.6% reported and 1% at constant currency, excluding all COVID-19 related where constant currency growth in pads with 3%.

Ronald E. Bruehlman: R&D Solutions' first quarter revenue was $2,095,000,000. That was up 3.4% reported and 3.8% in constant currency. And excluding all COVID-related work, constant currency growth in R&DS was 8%. Finally, Contract Sales and Medical Solutions' or CSMS' first quarter revenue was $189 billion, up 3.8% reported and 7.1% at constant current. Okay, let's move down to P&L. Justin Ibeda was $862

Ronald E. Bruehlman: R&D solutions first quarter revenue was $2 billion $95 million that was up three 4% reported and three 8% in constant currency and excluding all COVID-19 related work constant currency growth in R&D at 8%.

Ronald E. Bruehlman: Finally contract sales in medical solutions or C. S. M. S first quarter revenue of $189 billion was up three 8% reported and seven 1% at constant currency.

Ronald E. Bruehlman: Okay, let's move down the P&L adjusted EBITDA was $862 million that's growth of one 3%.

Ronald E. Bruehlman: That's growth of 1.3%. First quarter GAAP net income was $288 million, down 0.3% year-over-year, and GAAP diluted earnings per share were $1.56, up 2% year-over-year. Adjusted net income was $468 million for the quarter, up 1.3% year-over-year, and adjusted diluted EPF grew 3.7% to $2.54. Now it's already been reviewed.

Ronald E. Bruehlman: First quarter GAAP net income was $288 million down 0.3% year over year and GAAP diluted earnings per share were $1 56 up 2% year over year.

Ronald E. Bruehlman: Adjusted net income was $468 million for the quarter up one 3% year over year and adjusted diluted EPS grew three 7% to $2.54.

Ronald E. Bruehlman: R&D Solutions delivered another strong quarter of bookings. Our backlog at March 31 stood at a record $30.1 billion, which was up 7.9% year over year, and next 12 months revenue from backlog increased to $7.7 billion, growing 6.1% year over year. Let's turn to the balance sheet. As of March 31, cash and cash equivalents totaled $1,444,000,000. Gross debt was $13,536,000,000.

Ronald E. Bruehlman: Now it's already reviewed R&D solutions delivered another strong quarter of bookings our backlog at March 31 stood at a record $30 1 billion, which was up seven 9% year over year and next 12 months revenue from backlog increased to $7 7 billion.

Ronald E. Bruehlman: Growing six 1% year over year.

Ronald E. Bruehlman: And the result of those two is net debt of $12,092,000,000. Our net leverage ratio ended the quarter at 3.38 times trailing 12-month adjusted EBITDA. First quarter cash flow from operations was $522 million, including capital expenditures of $145 million, resulting in free cash flow of $377 million.

Ronald E. Bruehlman: Okay, let's turn to the balance sheet as of March 31, cash and cash equivalents totaled $1.444 billion.

Ronald E. Bruehlman: Gross debt was $13.536 billion.

Ronald E. Bruehlman: And the result of those two with net debt at $12.092 billion or net leverage ratio ended the quarter at 3.38 times trailing 12 month adjusted EBITDA.

Ronald E. Bruehlman: First quarter cash flow from operations was $522 million and capital expenditures.

Ronald E. Bruehlman: $145 million, resulting in free cash flow of $377 million.

Ronald E. Bruehlman: Turning now to guidance, we are reaffirming our full-year revenue guidance on a constant currency basis, and we're adjusting revenue at actual currency downward by $75 million to reflect the strengthening of the U.S. dollar since we last guided. We now expect revenue to be between $15,325,000,000 and $15,575,000,000, representing year-over-year growth at 2.3% to 3.9% on a reported basis. Additionally, this guidance now includes a year-over-year FX headwind of approximately 100 basis points. And I'll remind you that when we last guided, we were looking for about 50 basis points of FX headwind.

Ronald E. Bruehlman: Turning now to guidance, we are reaffirming our full year revenue guidance on a constant currency basis, we are adjusting revenue at actual currency downward by $75 million to reflect the strengthening of the U S. Dollar since we last guided we now expect revenue to be between $15 billion.

Ronald E. Bruehlman: $225 million and $15 billion $575 million, representing year over year growth of 2.3 to three 9% on a reported basis.

Ronald E. Bruehlman: Now this guidance now includes a year over year FX headwind of approximately 100 basis points.

Ronald E. Bruehlman: And I'll remind you that when we last guided we're looking for about 50 basis points of FX headwind.

Ronald E. Bruehlman: We continue to assume approximately $300 million of step-down in COVID-related work and about 100 basis points of contribution to revenue from M&A activities. We're reaffirming our adjusted EBITDA guidance of $3,700,000,000 to $3,800,000,000, which represents year-over-year growth of 3.7% to 6.5%. The impact of FX changes on revenue had a negligible impact on EBITDA.

Ronald E. Bruehlman: We continue to assume approximately $300 million step down in Covid related work and about 100 basis points of contribution.

Ronald E. Bruehlman: Revenue from M&A activity.

Ronald E. Bruehlman: We're reaffirming our adjusted EBITDA guidance of $3 billion seven per $100 million to $303.800 billion, which represents year over year growth three 7% to six 5%.

Ronald E. Bruehlman: The impact of FX changes to Radnor, who had a negligible impact on EBITDA.

Ronald E. Bruehlman: We're also reaffirming our adjusted diluted EPS guidance, which continues to be $10 95 to $11 25 sets up seven 4% to 10.

Ronald E. Bruehlman: 3% versus the prior year.

Ronald E. Bruehlman: We're also reaffirming our adjusted diluted EPS guidance, which continues to be $10.95 to $11.25, up $7.4 to 10.3% versus the prior year. Okay, let me conclude by providing second quarter guidance. For the second quarter, we expect revenue to be between $3 billion and $740 million. This includes a year-over-year FX headwind of approximately 150 basis points, and we anticipate the second quarter will be the toughest quarterly FX compare of the year. As a reminder, the step down in COVID-related work is weighted towards the first half of the year.

Speaker Change: Okay, Let me conclude by providing second quarter guidance up for the second quarter, we expect revenue between the between $3 billion.

Ronald E. Bruehlman: $740 million and $3.815 billion.

Ronald E. Bruehlman: This includes a year over year FX headwind of approximately 150 basis points and we anticipate the second quarter will be the toughest quarterly FX compare of the year.

Ronald E. Bruehlman: As a reminder, the step down in Covid related work, it's weighted towards the first half of the year.

Operator: Also, we continue to expect gradual improvement in tax revenue growth in the back half of the year. For the second quarter, Adjusted EBITDA is expected to be between $870 million and $890 million. And Adjusted Diluted EPS is expected to be between $2.54. All of the guidance I provided assumes that foreign currency rates as of April 30th continue for the balance of the year. So to summarize, our Q1 was a strong start to the year.

Ronald E. Bruehlman: Also we continue to expect gradual improvement in tag revenue growth in the back half of the year.

Operator: For the second quarter, adjusted EBITDA is expected to be between $870 million and $890 million and adjusted diluted EPS is expected to be between $2 54.

Operator: And $2 64 sensors all of the guidance that provided assumes that foreign currency rates as of April therapy continue for the balance of the year.

Operator: So to summarize Q1 was a strong start to year tabs revenue came in as expected and we continue to look for improvement in the back ended the year R&D <unk> delivered $2 $6 billion of net bookings, bringing backlog to over $30 billion for the first time in our history.

Operator: TAS revenue came in as expected, and we continue to look for improvement in the back end of the year. RNDS delivered $2.6 billion of net bookings, bringing backlog to over $30 billion for the first time in our history. We continue to see favorable forward-looking indicators in the clinical trial business, such as strong RFP flow, strong qualified pipeline growth, and strong biotech funding. And finally, we're reaffirming our earnings guidance for the year, including adjusted diluted EPS growth of 7.4 to 10.3%. With that, let me hand it back to the operator for Q&A.

Operator: We continue to see favorable forward looking indicators in the clinical trial business, such as strong RFP flow strong qualified pipeline growth and strong biotech funding.

Operator: And finally, we are reaffirming our earnings guidance for the year, including adjusted diluted EPS growth of seven point forward at 10, 3%.

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

Operator: Thank you. At this time, I would like to remind everyone that in order to ask a question, press star then the number one on your telephone keypad. We request that you please limit yourself to just one question so that others in the queue may participate as well. We'll take our first question from Elizabeth Anderson at Evercore ISI. Ms. Anderson, your line is open. You may have yourself muted.

Speaker Change: Thank you.

Operator: This time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad.

Elizabeth Hammell Anderson: Request that you. Please limit yourself to just one question so that others in the queue may participate as well.

Operator: We will take our first question from Elizabeth Anderson at Evercore ISI.

Elizabeth Hammell Anderson: Mr. Anderson. Your line is open you may have yourself muted.

Operator: Let's move on to the next one, the queue operators.

Operator: Now, let's move on to the next one in the queue operator.

Operator: Sure, we'll go to Shlomo Rosenbaum at Stiefel.

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

Shlomo H. Rosenbaum: Hi. Thank you for taking the time to answer my questions. I want to ask Ari a little bit about that large cancellation that you called out. You absorbed it into the numbers. Could you give us a little bit more specificity in terms of highlighting what that impact would be on revenue and also on bookings? Because you're lowering revenue due to FX, but you're also absorbing an incremental cancellation that's unusual. Maybe that could help us a little bit with the context over there and then also on the booking side. Yeah.

Shlomo H. Rosenbaum: Hi, Thank you for taking my questions to ask.

Shlomo H. Rosenbaum: <unk> are a little bit about that large cancellations that you.

Shlomo H. Rosenbaum: That you called out.

Shlomo H. Rosenbaum: <unk> into the numbers could you.

Shlomo H. Rosenbaum: Give us a little bit more specificity in terms of highlighting what that impact would be to revenue.

Shlomo H. Rosenbaum: And also to bookings because youre willing to revenue.

Shlomo H. Rosenbaum: Due to FX, but youre also absorbing an incremental cancellation, that's unusual and maybe that can help us a little bit with the context over there and then also on the booking side.

Ari Bousbib: Yeah, thank you, Shlomo. Well, look, we don't normally speak to cancellations. As you know, we just provide net new bookings. I might point out, by the way, that we never speak to it, but our gross bookings were the highest, the second highest in our history, before cancellations. The reason we highlighted this cancellation is because, look, a typical cancellation is normally in the 15, $20 million kind of range. And this one is very, very large.

Ari Bousbib: Yeah. Thank you Shlomo well look we don't normally speak to cancellations as you know we just provide net.

Ari Bousbib: New bookings I might point out by the way that.

Ari Bousbib: We never speak to it but our gross bookings were the highest the second highest in our history.

Ari Bousbib: Before cancellations now.

Ari Bousbib: <unk>.

Ari Bousbib: The reason we highlighted this cancellation is because look at it.

Ari Bousbib: <unk> got a cancellation is normally in the $15 million to $20 million kind of range and this one is very very large it's almost it's about a quarter billion dollars.

Ari Bousbib: It's almost, it's about a quarter billion dollars. Okay, so we have done that in the past whenever we've had an unusual cancellation. This one has been in the news. I think everyone knows what we are talking about. And we wanted to reassure everyone that the underlying business continues to be very strong enough to absorb it.

Ari Bousbib: Okay. So we have done that in the past whenever we've had an unusual cancellation. This one has been in the news I think everyone knows what we're talking about.

Ari Bousbib: And we wanted to reassure everyone that the underlying business continues to be very strong with respect to absorbing <unk>. Yes. I mean look we are a large company. We are at any given point in time working on the round 2500 clinical trials.

Ronald E. Bruehlman: I mean, look, we are a large company. We are, at any given point in time, working on around 2,500 clinical trials. These are, you know, staggered and staged through the year, and revenue flows over several years for each one of those trials. So we are large enough, global enough, that we can absorb even such a large cancellation. No change to the guidance, and as Ron pointed out, and you reminded us in your question, the adjustment is entirely due to effort. Shlomo, just one thing: I would jump in there.

Shlomo: These are.

Ronald E. Bruehlman: Stagger and staged through the year and revenue flows over several years for each one of those trials.

Shlomo: So we are large enough global enough that we can absorb even such a large large cancellation.

Shlomo: No change to the guidance and as Ron pointed out then you reminded us in your question.

Ronald E. Bruehlman: Adjustment is entirely due to FX Scott just one thing I would jump in there I think you were asking about revenue to an obvious because we have an ongoing trial. It does have some impact to our revenue in the current year, but we're absorbing that in our normal numbers and this is Dan.

Ronald E. Bruehlman: Shlomo, just one thing, I would jump in there. I think you're asking about revenue, too, and obviously, because it was an ongoing trial, it does have some impact on our revenue in the current year, but we're, we're absorbing that in our normal numbers. And this is a series of trials, actually a program that would play out over many years, so there isn't an outsized impact this year.

Ronald E. Bruehlman: This is a series of trials to actually a program that would play out over many years.

Ronald E. Bruehlman: Isn't an outsized impact in this year.

Speaker Change: Thank you.

Maxwell Andrew Smock: We'll take our next question from Max Smock at William Blair. Hi, good morning. Thanks for taking our questions.

Maxwell Andrew Smock: Thank you. We'll take our next question from Max Smock at William Blair. Hi, good morning. Thanks for taking our questions.

Speaker Change: We will take our next question question for Max Smock at William Blair.

Maxwell Andrew Smock: Yeah.

Maxwell Andrew Smock: Hi, Good morning, Thanks for taking my questions. Maybe just following up on RFP flows as you saw in the quarter you mentioned mid to high single digits across all customer groups I think last quarter, you had called out up double digits across all customer groups. So just wanted to get a sense for whether what you saw in terms of RFP flows going into this quarter was in line with your expectations and then.

Maxwell Andrew Smock: Any thoughts on how we should think about book to Bill moving forward. Thank you.

Ari Bousbib: Again, I wouldn't read a lot into the variation quarter to quarter, you know, just as an example, the RFP flow last year was flat versus the 22 numbers. So we think this is very good.

Maxwell Andrew Smock: Again, I wouldn't read a.

Ari Bousbib: In the variation quarter to quarter.

Ari Bousbib: Yeah.

Ari Bousbib: As an example, the RFP flow last year.

Maxwell Andrew Smock: It was flat versus.

Maxwell Andrew Smock: The 'twenty two number.

Ari Bousbib: So.

Ari Bousbib: We think this is very good is consistent with our expectations.

Ari Bousbib: It's consistent with our expectations, and in terms of the segment, the large pharma was up more in the high single digits. In terms of RFP flow, EBP was a little bit higher than, you know, that it was a kind of mid-single growth. You know, it depends on the therapy.

Ari Bousbib:

Ari Bousbib: The large.

Ari Bousbib: Segment, the large pharma was up more in the high single digits in terms of RFP flow.

Ari Bousbib: <unk> was a little bit higher than that.

Ari Bousbib: That was that kind of mid single.

Ari Bousbib: Growth.

Ari Bousbib:

Ari Bousbib: Depends on the therapies.

Ari Bousbib: We had a lot of... Bookings for Infectious Diseases and Internal Medicine, which drove a lot of the growth there. The awards grew, um, you know, well into the teens. So you know, we often look at awards when we report contracted bookings, as you know, some of our peers report awards which is at an earlier stage in the process. And maybe just to reassure you that we haven't come down from what we said that the last quarter, as a leading indicator, if you will, awards were up in the double digits.

Ari Bousbib: We had a lot of.

Ari Bousbib: Yeah.

Ari Bousbib: Bookings infection diseases in internal medicine, which drove a lot of the growth there.

Ari Bousbib: The awards grew.

Ari Bousbib:

Ari Bousbib: Well into the into the teens.

Ari Bousbib: So we don't we often look at awards we.

Ari Bousbib: Report contracted bookings as you know some of our peers report awards, which is at an earlier stage.

Ari Bousbib: In the.

Ari Bousbib: In the in the process and maybe just to reassure you that we haven't come out from <unk>.

Ari Bousbib: What we said that the last quarter.

Ari Bousbib: Leading indicators for where the awards were up in the in the in the double digits and that was driven by large.

Ari Bousbib: And I was driven by large, you know, full service trials. [inaudible] And it's, again, at a record high. So, nothing here that has changed versus our expectations. I'll go next to Anne Samuel at JPMorgan. Hi, thanks for taking the question.

Ari Bousbib: Foodservice trials.

Anne Elizabeth Samuel: Strong EVP as well, we look at the qualified pipeline.

Anne Elizabeth Samuel: And the qualified Vineland is up double digits actually very strong double digits and it's up again at a record high.

Anne Elizabeth Samuel: So nothing that.

Anne Elizabeth Samuel: Has changed versus our expectations.

Ari Bousbib: Okay.

Ari Bousbib: We will go next to Anne Samuel at J P. Morgan.

Anne Elizabeth Samuel: Hi, thanks for taking the question.

Anne Elizabeth Samuel: Hi, Thanks for taking the question.

Anne Elizabeth Samuel: In the <unk> business, you talked about strength in the pipeline.

Anne Elizabeth Samuel: Positive signs and maybe some more positive conversation there as youre moving through the year are you seeing your pipeline convert kind of at the same rate that you had initially expected.

Anne Elizabeth Samuel: And with the macro maybe slightly more stable can you just maybe speak to any potential areas of upside if things are starting to loosen up there.

Ari Bousbib: Yeah, well, I mean, I wouldn't be talking about upside here so far, and then the macro is not really stabilizing unless you stabilize the fact that we know there won't be a rate cut any time soon. The task business is exactly performing exactly as we expected. Same type of performance that we telegraphed in our prior guidance, same growth rate that we anticipated when you exclude the COVID and the currency impact.

Anne Elizabeth Samuel: Yeah, well I mean.

Speaker Change: I wasn't.

Ari Bousbib: Talk about upside here, so far and then the macro has done really stabilizing unless you called stabilizing the <unk>.

Ari Bousbib: The fact that we now know that won't be a rate cut.

Ari Bousbib: Anytime soon.

Speaker Change: So look.

Ari Bousbib: The das business is exactly performing exactly as we expected it.

Ari Bousbib: Same type of performance.

Ari Bousbib: And that we.

Ari Bousbib: Penni graft.

Ari Bousbib: Prior guidance.

Ari Bousbib: The same growth rates that.

Ari Bousbib: Although we anticipated when you exclude the COVID-19 and the and the currency impact.

Ari Bousbib: And we continue to see, again, based on our pipeline, based on, you know, budgets firming up, based on the conversation with clients, continue to expect upside towards the back of the year, the second half of the year, and more in the back of the year. Large pharma companies, as you know, have introduced a significant cost reduction program, and that has driven a lot more consciousness and scrutiny in the budgets than in prior years.

Ari Bousbib: And we continue to see again based on our pipeline.

Ari Bousbib: Based on.

Ari Bousbib: Budgets firming up.

Ari Bousbib: Based on the conversations with clients continued to expect upside.

Ari Bousbib: Towards the back of the year.

Ari Bousbib: Second half of the year and more in the back of the year.

Ari Bousbib: Large pharma companies as you know have introduced a significant cost reduction programs.

Ari Bousbib: And that has driven a lot more cautiousness and scrutiny.

Ari Bousbib: The budgets than in.

Ari Bousbib: In prior years.

Ari Bousbib: And we've discussed this is driven by the overall microenvironment, maybe some concerns related to IRA long-term and preservation of margins. As you know, our client base generally is doing fairly well and is reporting very good numbers. So we think that also is an encouraging sign. And usually, our clients have a more propensity to spend money when they are doing well, and we see that they are doing well. So all of those signs are encouraging. I can give you a little bit of color on the business in TAZ, you know, just for perspective.

Ari Bousbib: We've discussed this is driven by the overall macro environment.

Ari Bousbib: Maybe some.

Ari Bousbib: Concerns related to long term and preservation of margins.

Ari Bousbib: As you know our client base generally is doing fairly well and is reporting very good numbers.

Ari Bousbib: So we think that also is an encouraging sign.

Ari Bousbib: And usually.

Ari Bousbib: Our clients have more propensity to spend money when they.

Ari Bousbib: When they are doing well and we see that they are doing well.

Ari Bousbib: So all of those signs are encouraging I could give you a little bit of color on the business and you know.

Ari Bousbib: Just for.

Ari Bousbib: You know, the data business continues to perform exactly as expected. No surprises there. Flattish to app below single digits.

Ari Bousbib: Our perspective.

Ari Bousbib: The data business.

Ari Bousbib: <unk> to perform exactly as expected no surprises they are flattish to up low single digits.

Ari Bousbib: The real-world business, which we signaled in the prior quarter earnings call, was slowing down, had actually gone from being a very strong double-digit growth performer to mid-single digits, then negative growth in the fourth quarter. It has rebounded somewhat and is now flattish, so we think that we've bottomed out there. And the tech business continues to perform as expected, good and strong. And the analytics and consulting business, which is our shortest cycle business, ebbs and flows in the quarter.

Ari Bousbib: The real world business, which we signaled.

Ari Bousbib: In the prior quarter earnings call.

Ari Bousbib: Was slowing down had actually gone from being a very strong double digit growth performer.

Ari Bousbib: To mid single digits to that negative growth in the fourth quarter.

Ari Bousbib: Has rebounded somewhat and he's now flattish. So we see that we think that we've bottomed out there.

Ari Bousbib: And the the tech business continues to perform as expected good and strong.

Ari Bousbib: And the analytics and consulting business, which is our shortest cycle business.

Ari Bousbib: Ebbs and flows in the quarter.

Ari Bousbib: It had started to do a little better last quarter, but this quarter, it went backwards. And that's why we didn't perform even better than our expectations in DAS. So all in all, the real world is doing better than we thought, and analytics and consulting are doing a little less well than we thought. But that's kind of to be expected. It has more variability by definition.

Ari Bousbib: It had.

Ari Bousbib: Started to do a little better last quarter this quarter it went back backwards.

Ari Bousbib: And that's why we didn't perform even better than our expectations in that so all in all we have.

Ari Bousbib: We're doing better than we thought and then you said consulting doing a little less well than we thought but that's to be expected as more variability by definition.

Ari Bousbib: And we still have a strong pipeline there, so we think that that will continue to improve quarter over quarter. And that's what gives us confidence that the back end of the year on TAS will be good. Again, on the upside, I don't know. I can't. I can't promise.

Ari Bousbib: And we still have a strong pipeline there. So we think that that will continue to improve.

Ari Bousbib: Quarter over quarter.

Ari Bousbib: And is there and that's what gives us confidence.

Ari Bousbib: That the backend of the year on pads will be good again upside I don't know I can't I can't promise that.

Speaker Change: Thank you Harry that was extremely helpful.

Ari Bousbib: Okay.

David Howard Windley: We'll move to our next question from David Windley at Jefferies.

Ari Bousbib: We will move to our next question from David Windley at Jefferies.

David Howard Windley: Thanks. I wanted to transition you to R&D. Ari, thanks for taking the question. You highlighted in your prepared remarks about some of the business winds. You highlighted some FSP deals. I also heard you say, though, that your RFP flow was strong on the full service side. So, given that you've talked in the past about how FSP does present some margin headwinds, I thought maybe you'd update us on the state of play between those two models and maybe, you know, maybe we've reached some kind of equilibrium there. So, just, you know, your thoughts on FSP versus FSO. Thanks. Thank you very much. Yeah,

David Howard Windley: Thanks, I wanted to transition you to R&D, yes, alright, thanks for taking the question you highlighted in your.

David Howard Windley: Our prepared remarks about some of the business wins you highlighted some FSP deals I also heard you say, though that you.

Ari Bousbib: Your RFP flow was strong on the full service side so.

David Howard Windley: Given that you've talked in the past about how that FSP does present, some margin headwinds I thought maybe you could update us on the.

David Howard Windley: The state of play between those two models and maybe you know maybe we've reached some kind of equilibrium. There. So just your thoughts on FSP versus episode. Thanks.

Ari Bousbib: Thank you very much. Yeah, I mean, look. As a percentage of our total R&DS revenue, FSP accounts for about 15%. So now that you see that in totality, if you look only at the services portion of the business, meaning excluding pass-throughs, which as you know, in FSP, there typically are no pass-throughs. So that percentage is a little higher and continues to go on. It's a little less, somewhere between 20 and 25%, I would say.

Ari Bousbib: You're very much yeah, I mean look.

Ari Bousbib: As a percentage of our total R&D, yes revenue.

Ari Bousbib: FSP.

Ari Bousbib: Comprise about 15%.

Ari Bousbib: So.

Ari Bousbib: Now that's.

Ari Bousbib: In totality, if you look only at the services portion of the business, meaning excluding pass throughs, which as you know an FSP.

Ari Bousbib: Typically is no pass throughs.

Ari Bousbib: So that percentage is a little higher and continues its a little less somewhere between 20 and 25% I would say.

Ari Bousbib: And it continues to grow, you know, a point or two every year. So, of course, it has an impact on margin because FSP margins, FSP contracts come at lower margins. But again, we are a large global company, and that just puts more pressure on us to continue to operate with more efficiency, find new areas of productivity, contain costs, and offset. Those, you know, those margins, those mix, those unfavorable mixed impacts on margins with cost reductions. And we continue to work well on our usual playbook, which is to grow our EBITDA faster than our revenue and consequently increase our margins.

Ari Bousbib: And and it continues to grow you know a point or two.

Ari Bousbib: Every year so.

Ari Bousbib: Of course, it has an impact on margins.

Ari Bousbib: Because FSB margins.

Ari Bousbib: FSP contracts come at lower margins, but again, we are a large global company and that just puts more pressure on us.

Ari Bousbib: To continue to operate with more efficiency find new areas of productivity.

Ari Bousbib: <unk> costs and offset those.

Ari Bousbib: Those.

Ari Bousbib: <unk>.

Ari Bousbib: Those are margin those mix.

Ari Bousbib: Those unfavorable mix impacts on margins with cost reductions and we continue to.

Ari Bousbib: <unk>.

Ari Bousbib: Work well.

Ari Bousbib: Our usual playbook, which is to grow our EBITDA.

Ari Bousbib: Foster than our revenue.

Ari Bousbib: Consequently.

Ari Bousbib: Increased margins.

Jailendra P. Singh: We'll go next to Jalendra Singh at Truist Securities.

Jailendra P. Singh: We'll go next to Jalendra Singh at Truist Security. Thank you and good morning. And thanks for taking my questions. I want to follow you.

Joel Undressing: We will go next to Joel Undressing at Trust Securities.

Jailendra P. Singh: Thank you and good morning, and thanks for taking my questions.

Jailendra P. Singh: I wanted to follow up on the Salesforce partnership comments, just curious if you can share any of the any in each of the reaction from your customers post that announcement or is it still early also just curious like what are the conversations leading up to the partnership trying to understand what drove the decision to partner with Salesforce given what we're seeing.

Jailendra P. Singh: Sep's preferred for engagement doesn't digital marketing et cetera.

Ari Bousbib: Thank you. Well, look, as you know, we've carved out a nice position in the global CRM market for life sciences. We came from behind much later in the game.

Jailendra P. Singh: Thank you well look as you know we've carved out a nice position in the global CRM market for life Sciences. We we came from behind it much later in the game I guess, we entered the market more than 10 years after the.

Ari Bousbib: I guess we entered the market more than 10 years after the large dominant incumbent in this market, and today we have a footprint of over 400 clients and about 100,000 seats in the business, which is quite impressive in a few short years. Now, what happened here is that the dominant competitor announced a replatforming of their product from Salesforce to their own, in-house platform. Now, OCE is based on the Salesforce platform.

Ari Bousbib: <unk>.

Ari Bousbib: Logs dominant incumbent in this market.

Ari Bousbib: And today, we have a footprint of over 400 clients.

Ari Bousbib: Then about the 100000 seats in the business, which is quite impressive in a few short years now.

Ari Bousbib: Now what happened here is that the dominant competitor has announced a re platforming of their product from salesforce to their own.

Ari Bousbib: In house platform.

Ari Bousbib: Now <unk> is based on the Salesforce platform. It's the result of a strategic partnership that has been in the market for over five years.

Ari Bousbib: It's the result of a strategic partnership that has been in the market for over five years. And we at Salesforce want to ensure that we continue to have the best product in the market, and we've agreed that it is time to develop the next generation product. We also agreed that it should be based on Salesforce's new Life Science Cloud, which is much more advanced, and it will be based on the current OCE application to be re-platformed. Now, it takes time to do that.

Ari Bousbib:

Ari Bousbib: We answered as supposed to want to ensure that we continue to have the best product in the market.

Ari Bousbib: And we've agreed that it is time to devote to develop the next generation product.

Ari Bousbib: We also agreed that it should be based on SaaS forces, New life Science cloud, which is much more advanced.

Ari Bousbib: And as he will be based on the current <unk> application to be re platform now it takes time to do that.

Ari Bousbib: It makes sense for Salesforce to take the lead in developing this next-generation application, and it will be based on Iqvia IP. Our existing customers understand all of that. They will continue to be supported for at least the next five years, and they're very happy. I can even say yesterday that we won a very significant award on OCE with a large, well-known client, and we actually displaced a large, dominant player in the space, which had been the incumbent for a long time.

Ari Bousbib: It makes sense for Salesforce to take the lead in developing these next generation application and it will be based on a <unk>.

Ari Bousbib: Pete.

Ari Bousbib: Our existing customers understand all of that they will continue to be supported for at least the next five years.

Ari Bousbib: And we're very happy I can even say yesterday, we won.

Ari Bousbib: Very significant award on Oce, with a large well known clients pharma clients and we actually displaced the large dominant player in this space, which had been the incumbent for a long time. So our clients are reacting very favorably the I understand the need for the next generation transition.

Ari Bousbib: So our clients are reacting very favorably. They understand the need for the next generation transition, and we are going to shepherd that process together with Salesforce. When the product is ready, in the next two years or so, we will go to market jointly with Salesforce, with this new product platform, and we will help transition customers who wish to do so when they are ready to do so. Thanks, Ari. Reaction from the customer. We'll go next to Anne Hines at Mizzou Host Security. Hi, good morning Ari. What surprised me was

Ann Kathleen Hynes: And we are going to shepherd that process together with Salesforce when the product is ready in the next two years or so we will go to market jointly with Salesforce with its new product platform and when we to help transition.

Ann Kathleen Hynes: Customers, who wish to do so when they are ready to do so.

Ann Kathleen Hynes: Thanks Eddie.

Ann Kathleen Hynes: Strong at positive.

Ann Kathleen Hynes: Reaction from the customer base.

Ann Kathleen Hynes: We'll go next to Anne Hines at Mizzou Host Securities.

Ann Kathleen Hynes: We will go next to Ann Hynes at Mizuho Securities.

Ann Kathleen Hynes: Hi, good morning.

Ann Kathleen Hynes: What has surprised you on the upside most of the quarter and maybe on the downside and just following up on the last FSP question. Thank you for that clarity you gave us about 20% to 25% ex pass throughs, but do you think the Max would be over time. Thanks.

Ann Kathleen Hynes: Um, who was the first? What surprised you about the launch of the quarter? I hate to be boring. I had zero surprises this quarter. I mean, for lack of better words, I think this was a boring quarter. It came in exactly as we thought. Look, the nature of business is pretty predictable. The, you know, the law cancellation was kind of, It's based really on the results and on the assessment of the environment by the client. This has all been very well reported, and so it usually takes time to unwind the study. And so we knew he was coming.

Ann Kathleen Hynes: It was the first pump.

Ann Kathleen Hynes: What surprised you on the Oh, yes.

Ann Kathleen Hynes: I hate to be boring.

Ann Kathleen Hynes: Zero surprises this quarter.

Ann Kathleen Hynes: I mean for lack of better words I think this was a boring quarter. He was executive came in exactly as we thought.

Ann Kathleen Hynes: The nature of it is pretty predictable.

Ann Kathleen Hynes: The the large cancellation was kind of.

Ann Kathleen Hynes: It's based on really on the results and on the assessment of the environment by the client is or has been very well reported.

Ann Kathleen Hynes: And so usually takes time to unwind the study and so we knew he was coming so those.

Ari Bousbib: So no. We didn't know the exact timing when all of this would be finalized, but it was in the quarter. But other than that, frankly, no surprises, up or down; everything came in. [inaudible] That's the way we like it, by the way.

Ann Kathleen Hynes: We didn't know the exact timing when all of this would be finalized, but but he was in the quarter, but other than that frankly.

Ari Bousbib: No surprises Apple down everything came in.

Ari Bousbib: Pretty much on expectations, there always all moving parts, but this was one of the most boring quarters I've seen in that nothing nothing no drama.

Ari Bousbib: In terms of your FSP question, Unknown Speaker, it ebbs and flows. I remember my first contact with this business.

Ari Bousbib: The way, we like it by the way.

Ari Bousbib: In terms of your FSP.

Speaker Change: A question.

Ari Bousbib:

Ari Bousbib: It ebbs and flows I remember my first.

Ari Bousbib: Now, almost eight years ago, I was told, you know, FSP is going to be replacing full service clients, and indeed, there was an effort by some of the large pharma companies, many of them, to bring project management in house and to essentially shift to these types of models. So I think it's a pendulum; it swings back and forth.

Ari Bousbib: Contacts with these businesses now almost eight years ago.

Ari Bousbib: I was told FSP is going to be replacing foodservice clients are shifting to FSP had indeed, there was very similar to today.

Ari Bousbib: A an effort by some of the large pharma companies many of them to bring a project management in house and.

Ari Bousbib: And to essentially shift to these types of models.

Ari Bousbib: In highly specialized studies, it's very hard for a client not to do full service because they don't always have all the competencies in house. Unknown Speaker, Again, I think we're seeing similar trends as we saw eight years ago. What we're seeing also might be to add a little bit more to this; we're seeing a trend towards what we call hybrid models where the client starts out wanting an FSP program and as we progress in defining the parameters of the study, we end up taking on more of the tasks, and it's kind of an in-between full service, and is that fully outsourced, but it's not 100% FSP either.

Ari Bousbib: I think.

Ari Bousbib: It's a pendulum swings back and forth in a highly specialized studies.

Ari Bousbib: It's very hard for our clients not to do full service because they don't always have all the competencies in house.

Ari Bousbib:

Ari Bousbib: Again, I think we're seeing similar trend as we saw it.

Ari Bousbib: Eight years ago, what are we seeing or saw might be to add a little bit more to this we're seeing a trend towards what we call hybrid models, where.

Ari Bousbib: The plan starts out with one thing on FSP program and as as we progress in defining the parameters of this study we ended up taking on more of the tasks and it just kind of any in between.

Speaker Change: Foodservice and is that fully outsourced, but he is not 100% FSP either there are parts of the program that we continued to to manage so.

Ari Bousbib: There are parts of the program that we continue to manage. So it's really more integration with the client that becomes more of a closer partnership. So I don't see this as a long-term, permanent trend to the point where, theoretically, it could become 100% FSP. I don't see that happening. Plus, remember, FSP is virtually non-existent for EBP or mid-size farms.

Ari Bousbib: It's really more integration with the client that becomes more of a of a.

Ari Bousbib: A closer partnership so I don't see this as a as a long term permanent trend.

Ari Bousbib: Point, where theoretically it could become a higher percent of FSP, yet, although I don't see that happening plus remember.

Ari Bousbib: Fsp's virtually nonexistent for edp or midsized pharma.

Ari Bousbib: Uh huh.

Speaker Change: Great. Thank you.

Michael Ryskin: We'll take our next question from Michael Ryskin at Bank of America.

Ari Bousbib: We will take our next question from Michael <unk> with Bank of America.

Michael Ryskin: Okay.

John Kim: Hi, good morning. This is John Kim on behalf of Mike.

Michael Ryskin: Hi, good morning.

John Kim: This is John Kim on for Mike.

John Kim: I appreciate the FST comment there; I'll just ask a quick one. On that swing pendulum comment, do you expect that percentage should go down at some point? And in terms of the RFP flows, that sounds great, solid, solid flows, but is there anything that may hinder or delay that turning into sales in the second half?

John Kim: I appreciate the FSP comment there.

John Kim: I'll just ask a quick one on that swing Penguin.

John Kim: And do you expect that percentage to go down at some point.

John Kim: And in terms of the RFP flows that that sounds great solid solid flows but is there anything that may hinder or delay that turning into sales in the second half.

Speaker Change: Yes. Thank you.

Ari Bousbib: Okay, thank you. Well, on the FSP comment, I don't know when and if things will happen. This is a long cycle business. I remind you that it takes, on average, four or five years to execute a contract. So, you know, we have a very large book of business. I think in our backlog, what is the proportion of FSP in our backlog? Is it also about 15%?

John Kim: Okay. Thank you will all the FSP going I don't know.

Ari Bousbib: When these things this is a long cycle business.

Ari Bousbib: I remind you that it takes on average for five years to execute a contract so.

Ari Bousbib: We have a very large book of business I think you know backlog what is the proportion of up to speed. Our backlog is also about 15%.

Ronald E. Bruehlman: Yeah. Yeah. Yeah.

Speaker Change: Yeah. So our backlog is over $30 billion and about somewhat with four four and a half of that is.

Ronald E. Bruehlman: So our backlog is over $30 billion, and about four and a half billion dollars of that is, is four and a half billion dollars of that is FSP. So you see, the vast majority of the revenue we're going to deliver over the next four or five years is going to continue to be full service programs, and it's not about to, you know, influence one way or the other.

Ronald E. Bruehlman: Is $1 billion of that is FSP. So we see the vast majority of the revenue we're going to deliver over the next four or five years is going to continue to be for search.

Ronald E. Bruehlman: Programs and it's not about too.

Ronald E. Bruehlman: Influence one way or the other it's a slow moving business. It takes a lot to move the needle one way or the other.

Ronald E. Bruehlman: It's a slow moving business. It takes a lot to move the needle one way or the other. We've been continuously on an upward momentum, and that's the way we like it. So, no, I don't see that happening. And then certainly the same, similar type of commentary on your question about affecting the second half. It is just too short. Horizon, you know, to have an impact. These swings, you know, will have an impact four years from now. Gotcha, thanks.

Ronald E. Bruehlman: We have been continuously on the upward momentum and that's the way we like it so no I don't see that happening and then certainly the same.

Ronald E. Bruehlman: Similar type of commentary on your question about affecting the second half.

Ronald E. Bruehlman: Two short.

Ronald E. Bruehlman: Horizon to have an impact.

Ronald E. Bruehlman: Swings will have an impact four years from now.

John Kim: Gotcha. Thanks. That makes sense.

Speaker Change: Gotcha. Thanks.

Speaker Change: That makes sense.

Speaker Change: Thank you.

Charles Rhyee: We'll go next to Charles Rye at T.D. Cowan.

Charles: We'll go next to Charles <unk> Cowen.

Charles Rhyee: Yeah, thanks for taking the question. Ari, you mentioned earlier about winning an EVP client that's going to do two simultaneous studies in oncology. And I'm curious whether, you know, the decision to do two trials at once could be a function of terms in the IRA that kind of benefit companies to do multiple trials at once, sort of to maximize revenue before potential negotiations on pricing with Medicare.

Charles Rhyee: Yes, thanks for taking the question.

Charles Rhyee: You mentioned earlier about winning a leading the decline.

Charles Rhyee: That's going to do two simultaneous studies in oncology and I'm curious whether the.

Charles Rhyee: <unk> two trials and once it could be a function of in terms of the iras that.

Charles Rhyee: Kind of a benefit companies to do multiple trials of one sort of maximize revenue before potential.

Charles Rhyee: Negotiating.

Charles Rhyee: Pricing with Medicare.

Charles Rhyee: If that could be part of the reason and in general I guess.

Charles Rhyee: And in general, I guess, you know, as you think about the structure of IRA, do you foresee more companies engaging in multiple trials at the start? And how do you think that could benefit Iqvia in the future?

Charles Rhyee: You think about the structure of IRI do you foresee more companies engaging in multiple trials at the start.

Charles Rhyee: And how do you think that could be benefiting for productivity in the future.

Ari Bousbib: Yeah, well, I mean, that's a clever thought here. You know why it was two simultaneous studies, but it happens to be not the case over here. But I see what you're thinking, but that's not the case here. These are two different, it's addressing two different diseases with different, I think it's different molecules. Again, we can give you in a post called some more color on the But I don't think it's because of the IRA. Luke.

Charles Rhyee: Yeah, well I mean, that's a.

Speaker Change: Clever that's a clever thoughts here.

Ari Bousbib: Why he was two simultaneous studies, but it happens to be not the case over here, but.

Ari Bousbib: I see what you're thinking about it but that's not the case here. These are the two different it's addressing two different diseases.

Ari Bousbib: With different.

Ari Bousbib: I think it's different molecules I can we can give you in post.

Ari Bousbib: Post call.

Ari Bousbib: Some more color on this.

Ari Bousbib: But.

Ari Bousbib: But I don't think it is because of the I already look.

Ari Bousbib:

Ari Bousbib: What is true is that clients, with respect to the RRA, are trying to accelerate timelines because one of the possible impacts of the IRA is that it will reduce the period of time during which protection will apply. Intellectual Property Protection will apply, and as a result, you want to maximize revenues then. That, if anything, and again, that's probably the context for your question, if anything, that kind of would induce clients to launch several programs simultaneously. So in this particular case, we're replacing an incumbent, and I think one of them is a rescue study, if I am correct. So that's the context in which it appears.

Ari Bousbib: Sure.

Ari Bousbib: What is true is that clients are with respect to the R. R E R.

Ari Bousbib: Are trying to accelerate timelines because one of the possible impacts of the IRA is that it will reduce the.

Ari Bousbib: The period of time during which protection.

Ari Bousbib: Protection will apply.

Ari Bousbib: Intellectual property protection will apply and as a result, you want to maximize the revenues then that if anything.

Ari Bousbib: Again, that's probably the context for your question if anything that kind of.

Ari Bousbib: Induce clients too.

Ari Bousbib: Several programs simultaneously. So in this particular case, we were replacing an incumbent and I think one of them is the rescue study.

Speaker Change: Correct. So thats the context there. Thank you.

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

Speaker Change: We will go next to Jay Haas Silver at Morgan Stanley.

Tejas Rajeev Savant: Hey guys, good morning and thanks for the time here. Ari, I have a few questions on R&D solutions. First, just broadly on the pricing environment, are you starting to see more pricing discipline from your peers versus what you saw in the back half of 23? Second, on cancellation and CNS, given the faster burn nature of that work, is there any implication from that for the phasing of R&D revenue through the remainder of 24?

Tejas Rajeev Savant: Hey, guys good morning, and thanks for the time here.

Tejas Rajeev Savant: I have a few questions here on R&D solution first just broadly on the pricing environment are you starting to see more pricing discipline from your peers versus what you saw in the back half of 'twenty three.

Tejas Rajeev Savant: Second on the cancellation in CNS, given the faster burn nature of that work is there any implication from that for the phasing of R&D revenue through the remainder of 'twenty four.

Tejas Rajeev Savant: And then last, on AI enablement, you highlighted that as a driver of some of your EPP wins in the quarter, which I thought was quite interesting. Can you just share some color on why it's translating into share gains for you and what it is that you can do with AI that your peers aren't offering yet? Thank you.

Tejas Rajeev Savant: And then last on AI enablement.

Tejas Rajeev Savant: Delighted that as a driver of some of your <unk> wins in the quarter, which I thought was quite interesting.

Tejas Rajeev Savant: Could you just share some color on.

Tejas Rajeev Savant: Why it's translating into share gain for you and what is it that you can do with AI that your peers arent offering yet thank you.

Ari Bousbib: Okay, the three questions are totally independent. So first, on pricing, look, there's no change in pricing here. There continues to be pressure from clients, and price negotiations are always tough.

Tejas Rajeev Savant: Okay three questions in total independent so first on pricing.

Ari Bousbib: Look there's no change in pricing here that continues to be pressure from clients and price negotiations are always tough.

Ari Bousbib:

Ari Bousbib: We mentioned before that we're having maybe more pressure than we had before on pricing from large pharma clients as they're working on their savings initiatives, but it's not that different from history, maybe a little more than usual. But I think, you know, nothing with respect to competitors; I can't speak to what they do; I just have no idea, and I wanna know. But look, it comes to reason that smaller competitors, which have failed largely and that has led to them being acquired, are struggling to book business and, as a result, could put pressure on pricing, but nothing there that I can..., signal that's unusual versus what we spoke about in the past. Your second question was on cancellations. We spoke before we addressed that. No, look, it's a very large cancellation and yeah, it has an impact It's fine.

Ari Bousbib: We mentioned before that we are having maybe more pressure that we had before on pricing from large pharma clients as they're working on their savings initiatives, but stub that's different than history, maybe a little more than usual.

Ari Bousbib: But I think.

Ari Bousbib: Nothing with respect to competitors I can't speak to what they do I just have no idea and don't want to note.

Ari Bousbib: Look at it.

Ari Bousbib: Pumps to reason that smaller competitors, which have a failed largely and then have that led to them being acquired.

Ari Bousbib: Are struggling to book business and as a result could put pressure.

Ari Bousbib: On pricing, but nothing there that I can.

Ari Bousbib: Signal, that's unusual versus what we spoke about in the past.

Ari Bousbib: Your second question it was on canceled.

Ari Bousbib: Cancellation, we spoke before and we address that no look it's a very large cancellation, yes. It has an impact.

Ari Bousbib: On revenues over the next few years, including in this year, but we said earlier that we are a large company and we are absorbing it you know in our guidance. It. It's fine. So yes. If you will it would have been better if we hadn't given the program hasn't cancelled, but it's okay, we're not changing the guidance.

Ari Bousbib: So yes, if you will, it would have been better if we hadn't, if the program hadn't been canceled, but it's okay. We're not changing the guidance for that. I only, Guidance Adjustment, again, is 100% related to foreign currency.

Ari Bousbib: That's the only.

Ari Bousbib: Guidance adjustment again is 100% related to foreign currency.

Ari Bousbib: With respect to your third question on AI, look, AI is not saying anything... shocking here. AI has a massive amount of opportunity, in general, and I would say, perhaps more limited than people think, in healthcare, because data and the ingredients, if you will, are not readily available publicly. You can search for... medical literature, for diagnostics, you could look for jurisprudence, for legal opinions, but frankly, to identify patients that are best suited for trials, psych, that need to be identified for maximum effectiveness and fastest enrollment, that's really, really tough to get information on.

Ari Bousbib: With respect to your third question on AI.

Ari Bousbib: AI has not saying anything.

Ari Bousbib: Shocking here that has a massive amount of opportunity in general and.

Ari Bousbib: I would say, perhaps more limited than people think.

Ari Bousbib: In health care because.

Ari Bousbib: The data and the ingredients, if you will and that's.

Ari Bousbib: We're readily available publicly.

Ari Bousbib: You can search for.

Ari Bousbib: Medical literature for diagnostics you could.

Ari Bousbib: I look for a Jewish prudence for legal opinions.

Ari Bousbib: But frankly to identify patients that are best suited for trials.

Ari Bousbib: Sites that need to be identified for maximum effectiveness and fastest enrollment.

Ari Bousbib: That's really really tough to get information.

Ari Bousbib: And if you ask those questions to a chatbot, you are not going to get the answers. However, once you are within our environment, then that's a lot more possible. And so if you think about it, the entire premise of what we set out to do when we merged Quintiles and IMS eight years ago was precisely to leverage massive amounts of data and analytics and technology to accelerate clinical development timelines, particularly applicable to oncology, rare diseases, and difficult-to-enroll patients.

Ari Bousbib: And if you ask those questions to a chatbot youre not going to get the answers.

Ari Bousbib: However, once you are within our environment and then that's all a lot more possible and so if you think about it the entire premise of what we set out to do when we merged Quintiles and IMS say two years ago was precisely to leverage.

Ari Bousbib: Mass amounts of data and analytics and technology.

Ari Bousbib: Accelerate.

Ari Bousbib: He called development timelines, particularly applicable to oncology rare disease and difficult to enroll patients.

Ari Bousbib:

Ari Bousbib: [inaudible] With the advent of AI, that set of initiatives becomes even easier. And we've been at it for a while. This is not new to us, but some of the new tools, as you can imagine, are put to good use within our environment. And some of the wins we've had are the direct results of those capabilities.

Ari Bousbib: With the advent of AI that.

Ari Bousbib: Set of.

Ari Bousbib: Of initiatives becomes even easier and we've been at each for a while this is not new to us, but some of the new tools. As you can imagine are put to good use within our environment and some of the wins. We've had are the direct results of those capabilities.

Speaker Change: Thank you.

Luke England Sergott: Our next question comes from Luke Sergott at Barclays. Great, thanks. I just kind of want to get a better sense of

Ari Bousbib: Our next question comes from Luca <unk> at Barclays.

Luke England Sergott: Great, thanks. I just kind of want to get a better sense of how to think about the TAS recovery and more on, you know, discretionary and the commercial side. So, and how it relates to, you know, drug approvals and things like that. So, you know, we only had 10 approvals in this quarter versus 15 last quarter, but, you know, we're already starting to see a strong start to April. I'm just trying to get a sense of when pharma starts engaging you guys for work and when you start seeing those bookings, and then ultimately when the money starts flowing through. I know it's different for particular regions, but as the approvals start coming in and accelerating it, you know, how to think about the growth in the and the discretionary pieces that have been slower.

Luke England Sergott: Great. Thanks.

Luke England Sergott: Just kind of want to get a better sense of.

Luke England Sergott: How to think about the taz recovery and more on discretionary and the commercial side. So.

Luke England Sergott: And how it relates to drug approvals and things like that so.

Luke England Sergott: We only had 10 approvals in this quarter versus 15 last quarter, but we're already starting to see a strong start to April I'm, just trying to get a sense of.

Luke England Sergott: When pharma starts engaging you guys for work and and when you start seeing those bookings and then ultimately when it start flowing through I know, it's I know, it's different for particular regions, but.

Luke England Sergott: As is the approval start coming in and accelerating how to think about the growth in AR.

Luke England Sergott: And in the discretionary pieces that have been slower.

Speaker Change: Can I have the.

Luke England Sergott:

Ari Bousbib: Can I have the Look, I wish I had a crystal ball here. And I've been wrong before on predicting a comeback, if you will, of the gas business. So, be cautious in my commentary.

Speaker Change: Look I wish I had the crystal ball here and I've been wrong before on predicting a comeback.

Ari Bousbib: <unk> business.

Ari Bousbib: So be cautious in.

Ari Bousbib: In my commentary.

Ari Bousbib: You're right to point to the approvals. I mean, you know, the number of approvals, as you know, in last year. I think there were 55 last year. And and That was, I think, a record year. It was certainly a very high level. Almost 50% more than the prior years, and the highest level, I think, must be 17 or 18.

Ari Bousbib: You're right to point to the approvals I mean.

Ari Bousbib: The number of approvals as you know.

Ari Bousbib: Last year I think there were 55 approvals last year.

Ari Bousbib: Yes.

Ari Bousbib: That was I think a record year. He was certainly a very high level.

Ari Bousbib: Almost 50% more than the prior years and the highest level I think seems must be 17 or 18.

Ari Bousbib: Now, the new launches and the spend associated with these new launches usually is up significantly for the five years that follow these approvals. So, you know, we do expect the TAS business to be strong. You know, the white card is, you know, when those launches occur, what clients decide to do. You know, about 50% of the new long spend usually occurs within the first two years. So again, it happens.

Ari Bousbib: Now the new launches and the spend associated with these new launches usually is absolutely inefficiently for the five years.

Ari Bousbib: That photo these approvals.

Ari Bousbib: So.

Ari Bousbib: We do expect that business to be strong.

Ari Bousbib: Yes.

Ari Bousbib: The wildcard these windows launches occur.

Ari Bousbib: Clients decide to do.

Ari Bousbib: You know the about 50% of the new launch spend you usually occurs within the first two years.

Ari Bousbib: So again it happens.

Ari Bousbib: Over the following five years, and usually the first two years, I mean, yeah, quarter to quarter, it was only 10 this quarter, but we think in general, just with the approvals of last year, we should see a rebound coming in, and that's one of the reasons we are, I'm somewhat confident that the task force will be rebounding more strongly, and you know the real uptick will come next year, but we see given that it has The pipeline is higher than it has ever been, frankly, and we clean this pipeline continuously.

Ari Bousbib: The following five years and.

Ari Bousbib: Usually the first two years I mean quarter to quarter. He was only taken this quarter, but we think in general.

Ari Bousbib: Just with the approvals of last year, we should see a rebound coming in and Thats one of the.

Ari Bousbib: Reasons, we are.

Ari Bousbib: Somewhat confident that the this has been this will be rebounding more strongly in.

Ari Bousbib: The real uptick will come next year, but we see given that he has bottomed out here and we think we think it has.

Ari Bousbib: <unk> reached the bottom and we anticipate an improvement the balance of the year.

Ari Bousbib: The pipeline is higher than he has ever been frankly, and we scrub these pipeline continuously.

Ari Bousbib: We continue to see improvement in customer sentiment. You know, in Q1, the tone is better. There are more opportunities that have surfaced, and there's increased optimism for the outlook in 24. What happened in the second half of last year in conversations with clients is that the budgets became, You know, we are aware of what clients can spend because they've predetermined budgets, but the budget got trimmed sometime towards the end of the year.

Ari Bousbib: We continue to see improvement in customer sentiment and Q1.

Ari Bousbib: The tone is better that there are more opportunities that have surfaced this increased optimism for the outlook in 'twenty four.

Ari Bousbib: What happened.

Ari Bousbib: Second half of last year in conversations with clients.

Ari Bousbib: The budgets became.

Ari Bousbib: We are aware of what clients can spend because it really sort of a budget but.

Ari Bousbib: The budget got trained sometime towards the end of the year and there was quite a bit of uncertainty as people were negotiating internally.

Ari Bousbib: And there was quite a bit of uncertainty as people were negotiating internally. We feel there is more clarity now on budgets, and that helps a lot with confidence for awards in the balance of the year. Also, decisions. We measure decision timelines, and those those timelines have started to come down and get reduced, which is a favorable sign.

Ari Bousbib: We feel that it was more clarity now on budgets and that helps a lot.

Ari Bousbib: With confidence for awards in the balance of the year.

Ari Bousbib: Also decisions we measure.

Ari Bousbib: Decision timelines and that those those timelines have started to come down and get reduced which is a favorable sign.

Luke England Sergott: All right, so I guess there's basically between, obviously there's going to be a big difference there in timing, but it's safe to assume between like six and twelve months lag post-approval and when you actually start working on the launch with the drug company and the commercialization effort. That's correct. Okay, cool. Thank you. All right. Thank you.

Ari Bousbib: Alright, so I guess theres like basically between.

Luke England Sergott: It's going to be a big difference, there and timing, but like.

Luke England Sergott: Safe to assume between six and 12 months lag post an approval of when you actually start.

Luke England Sergott: Working on the launch with the drug company and in the commercialization efforts.

Speaker Change: That's correct.

Luke England Sergott: Okay cool thank you alright.

Speaker Change: Alright, thank you.

Luke England Sergott: Okay, that was our...

Speaker Change: Okay that was our.

Operator: Yes, that does conclude our Q&A at this time. Mr. Joseph, I'll turn the call back over to you.

Speaker Change: Yes that does conclude our Q&A at this time, Mr. Joseph I'll turn the call back over to you.

Kerri Joseph: Thank you for taking the time to join us today, and we look forward to speaking with you again on our second quarter 2024 earnings call. The team will be available the rest of the day to take any follow-up questions that you may have. Thank you.

Joseph: Thank you for taking the time to join US today, and we look forward to speaking with you again on our second quarter 2024 earnings call. The team will be available the rest of the day to take any follow up questions.

Speaker Change: That youll have thank you.

Operator: This concludes today's conference call. Again, thank you for your participation. You may now go. Please wait, the conference will begin shortly.

Speaker Change: This concludes today's conference call again, thank you for your participation you may now disconnect.

Operator: Please wait the conference will begin shortly.

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