IQVIA Holdings, Inc.

Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to the IQVIA's third quarter 2023 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star 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 Treasury. Mr. Childs, please begin your conference.

Thank you, Regina, and good morning, everyone. Thank you for joining our third quarter 2023 earnings call. With me today are 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 Fedock, Senior Vice President, Financial Planning and Analysis, and Gustavo Peron, Senior Director, Investor Relations. Today, we'll be referencing a presentation that will be visible during this call for those of you on our webcast. This presentation will also be available following this call in the events and 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. The 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.

Thank you, Nick, and good morning, everyone. Thank you for joining us today to discuss our first quarter results. So, in line with our expectations, RNDS is performing very well. The task business continued to grow but revenue fell short of what we had expected. About half of our total revenue shortfall came from foreign exchange headwinds versus our previous guidance, and the other half from persistent weakness in demand in the TAS segment. Despite the TAS revenue shortfall, our productivity actions allowed us to deliver on our profit guidance. We continue to receive questions about the health of the industry and customer demand, and I'd like to give you the latest of what we're seeing in the market. Let's start on the clinical development side. Demand in the R&DS segment remains strong. Net new bookings exceeded $2.6 billion, representing a quarterly book-to-bill of 124. overall, including pass-throughs. And given that this quarter, there is a significant difference between services bookings and bookings with pass-through, I note that our services bookings were the highest ever at $2.3 billion, resulting in a 1.4 services book-to-bill. Our backlog reached $28.8 billion, growing 11.7% versus prior year, another historic high. Our quarterly RFP flow was up 10% year over year, with growth across all customer segments. Our strong performance is supported by continued healthy market dynamics. Emerging biotech funding was strong in the quarter. According to BioWorld, third quarter EBP funding was $18.7 billion, the largest quarter this year. Year-to-date, EBP funding through Q3 was up 8% versus prior year. If you look at the first half, large pharma R&D spend, it was above 20% of net revenues, highlighting continued strong R&D activity within large pharma as well. Based on these indicators, the clinical trial industry remains healthy. Our strong market position, market wins, scale, and differentiated offerings give us confidence that our R&DS business will continue to deliver above market growth. Turning now to TAS. On the commercial side of our business, we are obviously facing a tougher macro environment. Our clients remain cautious with their spending and have extended their decision-making timelines beyond what we would have normally expected. I'm sure you also saw that several large pharma have announced significant cost reduction programs, and obviously we are a significant vendor to large pharma. Now, we had anticipated to see improvements as we progress through the year, and specifically in the quarter, we usually see activity pick up in September after the slower July-August summer months. It didn't happen. While we still had growth for the segment as a whole, we experienced further declines in our analytics and consulting business, somewhat slower than expected growth in the discretionary parts of our real world business, as well as some impact from the China situation. While the acceleration we are anticipating is taking longer than expected, Based on our pipelines, we remain confident that there will be a rebound in demand sometime in 2024. We know this because the pipeline of opportunities remains strong, even as decision timelines are elongated and negotiations with our customers have become more difficult. We also know this because historically, going back 25 years, every time there was a pullback in spend on the commercial side, the industry adapts and comes back within a year or two. With this as context, let's now review the third quarter results. Revenue for the third quarter grew 4.9% on a reported basis, 4.1% at constant currency. Compared to last year and excluding COVID-related work from both periods, we grew the top line approximately 8.5% on a constant currency basis, and that includes approximately a point and a half of contribution from acquisitions. Third quarter adjusted EBITDA increased 9.1%, driven by revenue growth, and ongoing cost management discipline. Third quarter adjusted diluted EPS of $2.49 faced the ongoing headwind of the step up in interest expense and the UK corporate tax rate. If you exclude the impact of these non-operational items, our adjusted diluted EPS growth underlying was 13%. Let me share a few highlights of business activity in the quarter. And let me start with Taz. This quarter, IQVIA was awarded several noteworthy analytics contracts to support our clients' go-to-market strategies. For example, an EBP client selected IQVIA to provide analytics around key prescriber and payer trend for their women's health products. In another significant win this quarter, IQVIA secured a large U.S. data analytics contract with a top 10 pharma client that had been buying from a competitor for over a decade. We also received an award from an EPP client to support the launch of their first branded product into the diabetes market. This will be an end-to-end launch solution including field reps, inside sales reps, OCE, information management infrastructure, data analytics, commercial compliance, and co-pay card operations. Also in the quarter, I'm sure you saw that we received an award from Sanofi to deploy our OCE platform within the Middle East and Africa markets. Sanofi has been using IQVIA in many markets around the world to support their HCP engagements. On the tech side, We've been getting some questions about our partnership with Salesforce, and I just want to confirm that IQVIA has been a key life sciences partner to Salesforce for many years now, with offerings that span from clinical to commercial. And we plan to continue this strong partnership with Salesforce, combining our life sciences domain expertise and intelligence with Salesforce technologies and platforms. Moving now to real world. We were awarded multiple rare disease studies from both large pharma and biotech clients, highlighting our expertise and differentiated offerings within this growing therapeutic area, including innovative study design, patient recruitment, and AI-enabled technology to provide unique solutions. Couple of examples. The top 20 large pharma awarded IQVIA a 10-year study to improve patient treatments for rare genetic liver disease. The Japanese EDP client awarded IQVIA two large post-marketing surveillance studies on rare diseases in the circulatory nervous and muscular systems. Moving now to RNDS. We entered into a strategic collaboration with the Coalition for Epidemic Preparedness Innovations, CEPI, aimed at enhancing the world's ability to rapidly conduct clinical research for vaccines and other biological countermeasures against emerging infectious diseases. This collaboration is a key enabler of CEPI's mission goal, which is sponsored by the G7 and G20 countries to develop safe, effective, and globally accessible vaccines against emerging disease outbreaks within 100 days. We've also entered into an innovative strategic collaboration with Argenix, a global immunology biotech company. Leveraging our connected intelligence capabilities, we bring together end-to-end asset development services ranging from regulatory to market authorization to integrated technology-enabled pharmacovigilance safety tracking. This will allow Argenix to accelerate the market launch of new rare disease therapies to autoimmune patients. In the quarter, a top 10 pharma client renewed their FSP partnership with IQVIA as they look to design and launch their new clinical monitoring model. IQVIA will co-develop the solution, leveraging our expertise, innovative tech enabled approach, and exceptional delivery performance. IQVIA has been named the sole global medical information center provider by one of our large pharma clients. IQVIA differentiates in the market as the only provider to have successfully utilized an AI natural language processing solution for medical information. As has been the case in the last few years, RNDS continues to win big in oncology. with multiple awards in the quarter. A few examples. IQVIA won a late stage program with a biotech company developing immunooncology therapies. We were selected after successful delivery of an earlier stage trial, as well as our unparalleled data analytics to help identify patients and populations with unmet needs. We were awarded a phase three oncology trial from a large cutting edge biotech company. IQVIA was selected for our expertise in endometrial carcinoma cancer, as well as our ability to accelerate trial startup. This is an important trial given the unmet medical need and limited treatment options for patients with this condition. Also, IQVIA was awarded two large global oncology trials from a mid-sized pharma client. IQVA was selected due to our strategic design and operational expertise in oncology, including our ability to manage multiple large complex trials and our experience managing the unique safety profile of these molecules. With that, I will turn it over to Ron for more details on our financial performance.