IQVIA Holdings, Inc.

Ladies and gentlemen, thank you for standing by. Welcome to the IQVIA first quarter 2019 earnings conference call. During the presentation, all participants will be in a listen-only mode. As a reminder, this conference will be recorded Wednesday, May 1st, 2019. I would now like to turn the conference over to Andrew Markwick, Senior Vice President, Investor Relations and Treasury. Please go ahead.

Good morning, everyone. Thank you for joining our first quarter 2019 earnings call. With me today are Ari Boosby, Chairman and Chief Executive Officer, Michael McDonald, Executive Vice President and Chief Financial Officer, Eric Sherbert, Executive Vice President and General Counsel, Nick Charles, Senior Vice President, Financial Planning Analysis, and Jen Helcheck, Senior Director, Investor Relations. 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 on 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 risks and uncertainties associated with the company's business. which are discussed in the company's filings with the Securities and Exchange Commission, including our annual report on Form 10-K and subsequent SEC filings. In addition, we will discuss certain non-GAAP financial measures on this call, which should be considered a supplement to, and not a substitute for, financial measures prepared in accordance with GAAP. A reconciliation of these non-GAAP measures to the comparable GAAP measures is included in the press release and conference call presentation. I would now like to turn the call over to our chairman and CEO, Ari Busby.

Thank you, Andrew, and good morning, everyone. Thank you for joining our first quarter 2019 earnings call. I'm pleased to report that the first quarter was another quarter of strong performance at IQDF. We again reported results towards the high end of our guidance range or above our guidance range for revenue, adjusted EBITDA, and adjusted diluted EPS. Let's review the numbers. First quarter revenue of $2,684,000,000 came in above our guidance range, resulting in constant currency revenue growth of 7.2%. From a segment perspective, technology analytics solutions revenue grew 12.9% at constant currency, of which about 7% was organic. Strong performance was driven by solid double digit growth in our real world and technology businesses. R&D Solutions' revenue grew 5.3% at constant currency, including over 300 basis points of headwind from pass-throughs. In the first quarter, we had a higher proportion of projects in the startup phase, which typically have lower pass-throughs. By excluding pass-throughs, organic constant currency growth was about 7.5%. Our contract sales and medical solutions revenue was, as we had expected, down 7% at constant currency. We anticipate that this business will transition to growth in the second half of the year. First quarter adjusted EPS of $587 million was toward the high end of our guidance range, and adjusted diluted EPS of $1.53 was at the high end of our guidance range and grew 14.2%. Let me provide an update on our businesses. Our tech team hosted over 300 clients at the IQVIA Technology Conference in Frankfurt a few weeks ago. The conference brought CIOs and technology leaders from across the industry together to network and experience the software innovations IQVIA is driving for life sciences in both the clinical and the commercial areas. We were pleased to welcome Steve Geiss, the CIO of Roche Pharma, who compellingly described why Roche made the decision to standardize on the IQvia platform and how our solutions will help drive results. We are proud to partner with Roche in what so far has been a very smooth deployment. Our customers also heard from Teramex, a leading women's health company, that is growing rapidly and shows the IQVIA commercial suite in the mid-summer of 2018. TerraMex's continued growth was reliant on an efficient and successful implementation. And we were very pleased that they reported at the conference that the IQVIA solution is already operational in 20 countries. Again, a smooth and efficient deployment in the field led by IQVIA teams entirely. In addition to many other presentations from clients, the conference attendees also heard from our partners at Salesforce about the vision of building best-in-breed technology that spans the entire product lifecycle and is tailored specifically to our life sciences clients' needs. Our clients saw demonstrations of ETMF, RIMSMART, Adverse Events Tracker, Safety and Pharmacovigilance, OCE, OCE analytics, and much more. They also witnessed firsthand the power of IQVIA AI and machine learning capabilities fully integrated into this technology suite. Turning to real world, the team continues to scale our capabilities in supporting single-arm trials. During the quarter, a top 10 pharma client obtained an FDA-approved license extension for an oncology product. This was made possible through the use of our rich patient-level analytical assets to form a real-world comparator arm in combination with our advanced AI capabilities. In fact, we now have over 150 studies in more than 20 countries which utilize AI and machine learning to drive better insights. During the quarter, we also announced the launch of E360 Genomics, our new patented technology platform which will help advance research in the real-world space through the use of non-identified genomic data linked to reach patient analytics. This is a scalable privacy-preserving database solution which provides an efficient way to conduct genomic research for the first time ever on the world's largest pool of linked clinical whole genome-sequenced data. The R&D team had another strong quarter of net new business wins, continuing the momentum we saw accelerating through 2018. Bookings growth remains robust, and our LTM net new business growth continues to hover around 30%, excluding pass-throughs. Our LTM contracted net book-to-bill ratio, again excluding pass-throughs, was 151%. This is inclusive of the adjustment we made to our backlog. You should note this is a record for the R&D team and the first time ever that the LTM net book-to-bill ratio, excluding pass-throughs, has exceeded 1.5, as we again had another quarter of very strong bookings. Let me go off my prepared remarks here because I heard we had a couple of inbounds this morning about our old good friend, the quarterly book-to-bill. So it was basically in the same range as the 1.5 we just talked about. And after the booking adjustment, it's not that far behind. You can do the math. Now, sorry, it wasn't 1.7. as the last two quarters, but it was well over the old 1.2 threshold that you guys like a lot before or after the adjustment. Now, back to my prepared notes here about the adjustment to backlog that we noted in our press release. We normally wouldn't have removed the trial until the contractual arrangements have been finalized. Similarly, we don't include, as you know, a new award until contractual arrangements are finalized and report things on a contracted basis. However, we felt it appropriate to make an adjustment to backlog since the termination of this trial has been widely and publicly discussed. Due to the nature of the therapy area for this trial, the majority of revenue removed from backlog was pass-throughs, which, as you know, has no impact whatsoever on adjusted EBITDA or adjusted diluted EPS. And by the way, the estimated impact of this adjustment is already reflected, again, in the record LTM book-to-bill numbers that I mentioned earlier. I'd like to further highlight that even net of this removal The next 12 months' revenue that we expect to convert from backlog actually further increased by over $100 million and currently stands at $4.9 billion. It is also noteworthy that we were able to fully absorb the backlog adjustment within our original 2019 revenue and profit guidance, which I think illustrates very well how the scale of our business, the breadth of our offerings, and the continued momentum of our R&D business helps mitigate unexpected events such as a client ending a significant project. Now, before I turn it over to Mike, I'd like to announce that we are scheduling an Analyst and Investor Day in New York City on June 18th. We are planning a morning event running from 9 a.m. to 1 p.m., The focus will be on the long-term strategy of the business. In particular, we're really looking forward to showcasing some of our technology. We want to make sure we convey the truly disruptive nature of the innovative solutions we are investing in and we are bringing to the marketplace and how that will be driving our growth well into the future. Please save the date, June 18th. We hope you will be able to join us for this event. And now I will hand it over to Mike.