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 2022 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star followed by the number one again. As a reminder, this call is being recorded. Thank you. I would now like to turn the call over to Nick Childs, Senior Vice President, Investor Relations and Treasurer. Mr. Childs, you may begin your conference.

Thank you. Good morning, everyone. Thank you for joining our third quarter 2022 earnings call. With me today, Ari Boosby, Chairman and Chief Executive Officer. Ron Brooman, Executive Vice President and Chief Financial Officer. Eric Sherbet, Executive Vice President and General Counsel. Mike Fedak, Senior Vice President, Financial Planning and Analysis. And Gustavo Peron, Senior Director, Investor Relations, who has succeeded Brian Stengel. 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 risks and uncertainties associated with the company's business, which are discussed in the company's filing 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, Nick, and good morning, everyone. Thank you for joining us today to discuss our third quarter results. IQVIA delivered another quarter of strong financial results despite market concerns about slowing demand, broader macroeconomic challenges, and the various global geopolitical issues. In fact, indicators of demand, both from customers and in the market generally, remain healthy. Industry clinical trial stocks continue to trend ahead of last year, rising almost 7% year to date. The pipeline of active early-stage and late-stage molecules are both up 8% from 2019 pre-pandemic levels. EBP funding, which has been a lingering concern since the beginning of the year when one of our smaller competitors raised alarms. EBP funding improved, in fact, in the quarter. According to BioWorld, third quarter funding was $18.7 billion, the highest of any quarter this year. Year-to-date, funding is running at about a $60 billion annual rate, which exceeds the average of the last five years pre-COVID. Our own RFP flow grew mid-teens in Q3, and RFP flow in both the large pharma and EBP segments are up double digits on a year-to-date basis. Our Q3 book-to-bill was 1.39 excluding pass-throughs and 1.27 including pass-throughs, continuing our strong results from the first half of the year. And as a result, as you saw, our backlog grew 5.4% versus prior year on a reported basis and 9.4% excluding the impact from foreign exchange. As you can tell, we are not experiencing any signs of slowdown in demand. It also helps that we are extremely diversified. We serve over 10,000 customers in more than 100 countries, including all top 25 large pharma clients across the spectrum of therapeutic areas. Now, while demand remains very healthy, as you know, and as we have been saying throughout the year, we have been dealing with operational challenges caused by the global macro environment, including wage inflation, high levels of attrition, obviously the ongoing Russia-Ukraine disruptions, reoccurring China lockdowns that are still going on, and perhaps that's a newer development, some staff shortages at certain investigator sites. As you know, we have been able to overcome all these issues as reflected in our results for the first nine months of the year although as we end the year we are anticipating some minor delays in the timing of deliveries caused by these macro disruptions and specifically by the bottlenecks that are created by staff shortages at certain sites and that are delaying the execution of our deliveries This is why we decided to tweak the guidance a little in the final stretch to the end of the year. A note on our capital allocation strategy. As a result of persistent high levels of inflation, interest rates have been increasing sharply. In response, we are adjusting our capital allocation strategy to include some debt pay down in addition to continuing the M&A and share repurchase opportunistically as in the past. In summary, the underlying demand in the industry and in our businesses remains strong, and we are managing through the headwinds caused by the factors I just discussed. Now let's review the third quarter in more detail. Revenue for the third quarter grew 5% on a reported basis and 10.5% at constant currency. The $22 million beat above the midpoint of our guidance range was driven by operational upside in both TAS and RMDS services, offset by continued foreign exchange headwinds. Compared to last year, and excluding COVID-related work from both periods, our base businesses grew 14% at constant currency on an organic basis. Notably, on the same basis, the R&DS business was up 18%, and TAS was up 12%. Third quarter adjusted EBITDA increased 11.8%, reflecting our strong revenue growth and ongoing cost management discipline offsetting the headwinds of wage inflation that are persisting in our business. Third quarter adjusted diluted EPS of $2.48 grew 14.3% driven by our adjusted EBITDA growth. It provides some color on the business, starting with the commercial and technology side. The exponential increase in industry data access and complexity has created tremendous new opportunities for insight and evidence generation. But making this data usable requires robust information management capabilities. And as you know, at IQVIA, we've been building these capabilities for decades. In the call, the top 10 pharma clients selected IQVIA's Human Data Science Cloud to power large-scale data and analytics programs by centralizing and harmonizing data for 35 large countries across their primary care and specialty medicine portfolios. We continue to advance digital marketing in healthcare. We're deploying a privacy-first, open ecosystem that delivers healthcare information in a timely and personalized manner to meet the fast-changing needs of the healthcare consumer. In the quarter, IQVIA acquired Lasso Marketing, which developed an operating system that's purpose-built for healthcare marketers to coordinate and execute omnichannel digital campaigns from a single platform. In addition, DMZ Marketing Solutions, which you will recall we acquired about a year ago, was recently selected by a top 10 pharma client to bring to market 13 oncology and biological brands using digital insights to deliver personalized brand content to HCPs that are relevant to their practices and interests. Demand for our commercial technology solutions remains strong. This quarter, the top 20 pharma clients selected IQVIA's commercial technology ecosystem suite to transform its commercial operations into an AI-enabled commercial model. The customer will deploy IQVIA's orchestrated customer engagement suite, IQVIA's master data management, and orchestrated analytics in more than 30 countries. driving the 20% efficiency gain in customer coverage, and boosting the speed and precision of their order management process. In the real-world business, IQVIA continues to lead in innovative study designs that combine multiple IQVIA capabilities. For example, in the quarter, we were awarded a multi-year portfolio of real-world studies in psychiatry from a mid-sized pharma company. We are combining faster data-driven recruitment timelines with a comprehensive home health infrastructure to reduce the burden on both the patients and the site. In another example, we were awarded a significant contract with a major med tech company to identify early markers for organ transplant rejection through a non-interventional study that combines our med tech, real world, and translational sciences capabilities. Moving to RDS, our decentralized clinical trial, DCT program, has received independent compliance validation from EU General Data Protection Regulation, GDPR, from TrustARC, which is the leader in GDPR validation. This is a big deal. This program is highly recognized in the industry as it requires two separate independent audits. It's a key achievement for IQVIA as it is the first time any DCT offering has received this European data privacy validation. In addition, we've now expanded our DCT capabilities by launching the first self-collection safety lab panel for U.S. clinical trial participants in collaboration with Tasso Inc., a leader in clinical-grade blood collection solutions. Participants in clinical trials can now provide a blood specimen for lab testing in the comfort of their own home without the need to visit and investigate a site or have a healthcare professional visit them, expanding our DCC offerings and capabilities. And of course, as you've seen, the overall R&DS business continues its strong momentum with services bookings in the quarter exceeding $2 billion for the first time ever. This translated into a quarterly book-to-bill ratio of 1.39, excluding pass-throughs. And including pass-throughs, the business delivered over $2.5 billion of total new business in the quarter, with a book-to-bill ratio of 127. Over the last 12 months, our contracted book-to-bill ratio was 1.35, excluding pass-throughs, and 1.29, including pass-throughs. I will now turn it over to Ron for more details on our financial performance.