IQVIA Holdings, Inc.

Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to the IQVIA third quarter 2020 earnings conference call. All lines have to be placed on mute to prevent any background noise. After the speaker's remarks, there'll be a question and answer session. If you'd like to ask a question during this time, simply press star then followed by the number one on your telephone keypad. If you would like to withdraw your question, press the pound key. As a reminder, this call is being recorded. At this time, I would like to turn the call over to Andrew Marquick, Senior Vice President, Investor Relations and Treasury. Mr. Marquick, please begin your conference.

Thank you. Good morning, everyone. Thank you for joining our third quarter 2020 earnings call. With me today are Ari Boosby, Chairman and Chief Executive Officer, Ron Brauman, Executive Vice President and Chief Financial Officer, Eric Sherbert, Executive Vice President and General Counsel, Nick Charles, Senior Vice President, Financial Planning and Analysis, and Jen Halczak, 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 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 Boosby.

Thank you, Andrew, and good morning, everyone. Thank you for joining our third quarter 2020 earnings call. The third quarter marked a nice sequential improvement in our financial performance with results coming in above the high end of our expectations. You will recall that based on early signs of recovery at the end of the second quarter, we raised our guidance for the year. Based on stronger than expected performance in the third quarter, we are again raising our full year guidance ranges for revenue, adjusted EBITDA, and adjusted diluted EPS. We're expecting a continuation of these recovery trends in the fourth quarter. This, of course, sets us up well for next year. As we promised back in April at the onset of the pandemic, we will talk to you today about our outlook for 2021. Based on what we currently see, we think the most significant COVID impacts to our business are behind us, and our outlook for 2021 indicates strong performance next year and a return to our growth trajectory. Ron will discuss 2020 and 2021 guidance in more detail later. Before we review the quarter, a quick operational update. We continue to experience a gradual improvement in the accessibility of clinical research sites in the R&D solutions business, even with the localized flare-ups we've seen around the world. We're seeing a return to on-site monitoring visits, And similar to last quarter, onsite visits exceeded the number of remote visits. In instances where sites remain physically inaccessible for clinical monitoring, remote monitoring and virtual solutions are proving to be effective workarounds. The pace of startup activity picked up significantly during the third quarter. and we are pretty much back to baseline levels for site initiation visits. Of course, patient recruitment trends have started to follow as well. Moving to technology analytics, as expected, TAS has remained resilient throughout this crisis in almost every area. We've had very little interruption in data supply or demand, Our information services continue to be mission critical to our clients and are therefore very insulated from the impacts of the pandemic. The analytics and consulting businesses have performed remarkably well, despite business development being hampered by the lack of in-person interactions. One area we discussed before that has experienced significant disruption is the event management business, which relies almost entirely on face-to-face interaction. And of course, as you know, that business is essentially on pause for now. Demand for our technology offerings remains strong. We've added 45 OCE clients this year, bringing our total number of clients to 125. During the quarter, we successfully rolled out OCE Optimizer, a real-time map-based territory and sales rep alignment solution. This tool will save management teams significant amounts of time previously spent planning and assessing sales data to ensure resources are effectively focused on the appropriate client base and product. Finally, our CSMS business, demand for field reps continues to be soft, which of course impacts revenue. But as we said before, while business development has also slowed due to the lack of in-person interactions, so far the business has performed modestly better than we would have expected as existing clients have largely retained field reps and have been continuing their engagements with us. Now against that backdrop, let's now review our third quarter results. Revenue for the third quarter came in at $2,786,000,000, which was $11 million above the high end of our guidance range. This revenue beat came from strong organic operational performance. Third quarter adjusted EBITDA was $604 million with a $22 million beat versus the high end of our guidance range. The EBITDA beat was due to better operational performance and productivity. Third quarter adjusted diluted EPS was $1.63 reflecting the EBITDA drop through because the below the line items essentially netted out to zero. Third-quarter RNDS contracted backlog, including pass-throughs, grew 18.5% year-over-year to $21.7 billion as of September 30, 2020. We had broad-based booking strength, but full-service clinical and lab were particularly strong. The contracted net book-to-bill ratio, including pass-throughs, was 1.71 for the third quarter of 2020 and 1.42 excluding pass-throughs. The LTM contracted book-to-bill ratio at September 30 was 1.55, including pass-throughs, and 1.45 excluding pass-throughs. I will now turn it over to Ron for more details on our financial performance.