IQVIA Holdings, Inc.

Good morning, everyone. Thank you for joining our second quarter of 2026 earnings call. With me today are Ari Bousbib, Chairman and Chief Executive Officer, Mike Fedop, Executive Vice President and Chief Financial Officer, Eric Sherbet, Executive Vice President and General Counsel, Clarissa Willett, Senior Vice President, Financial Planning and Analysis, and Katie Ward, Vice President, Investor Relations. Today, we'll be referencing a presentation that will be visible during and many more. 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. As previously disclosed, In conjunction with this change, prior period segment amounts have been recast to conform to this reporting structure. I would now like to turn the call over to our Chairman and CEO, Ari Bousbib.

Thank you, Kerri, and good morning, everyone. Thank you for joining us today to discuss our second quarter results. IQVIA delivered an outstanding second quarter with revenue adjusted EBITDA and adjusted diluted earnings per share, all exceeding the high end of our guidance. Importantly, the momentum we saw in the first quarter continued with improving market conditions and strong operational execution. Organic growth for the company as a whole accelerated to 6% year-over-year, which is three times the rate we delivered a year ago. Adjusted EBITDA margin began improving earlier than we had anticipated due to better operational performance. Let's look at the results for the quarter. Total revenue for the second quarter exceeded the high end of our guidance range representing year-over-year growth of 8.7% on a reported basis, with FX much less of a tailwind than we had anticipated. At constant currency, growth was very strong at 8.5%. Second quarter, adjusted EBITDA was above the high end of our guidance as well, representing year-over-year growth of 9.2%. Second quarter adjusted diluted EPS of $3.15, also exceeded the high end of our guidance range and increased 12.1% year over year. The beat was driven entirely by strong operational performance. Let's discuss the results by segment. On the clinical side, R&D has delivered great results with revenue growth of nearly 9% and organically 7%. We had $3,150,000,000 in net new bookings representing 19% growth year-over-year and 27% growth sequential with notable strength in full-service bookings Translating into a quarterly book to be ratio of 1.22. If I may add, this 1.22 was in a quarter where our revenue was up almost 9% year over year, stronger than anticipated. I want to point out that the improvement in bookings is not just from this quarter alone. As you know, I always remind you that we are a long cycle business and it's more meaningful to look at trends over longer time periods. And if you look at our last 12 months net new bookings, they have increased in each of the past four quarters. With $11.3 billion of last 12 month net new bookings as of June 30th, they are up 13% What these metrics point to is a consistently improving demand environment, as well as improving win rates for our R&DS business. On the commercial side, organic revenue growth accelerated year over year to 5%, which is more than a full point higher organic growth than a year ago. and this has clients launched newly approved products and expanded the breadth of services they utilize from IQVIA. Notably, analytics and consulting grew organically high single digits year over year, the highest growth rate since 2022. Commercial engagement services and patient solutions both continue to grow double digits year over year, and our AI offerings gained further traction with increased customer adoption. With three consecutive quarters of strong, sustained and improving results and pipelines that remain at record levels, there is clear momentum in commercial solutions. Let me now give you a little more color on what we are seeing in the market environment and let's start with forward-looking demand metrics in the clinical environment. RSP flow growth remains strong with double-digit growth both year-over-year and sequential with improvements across all client segments. Decision timelines continue to shorten and EDP funding continues to be very strong with the second quarter at $35 billion, according to Bayou World, which is more than double the Q2 2025 number. I want to elaborate on this EDP segment. In response to investor feedback and in reviewing publicly available information, We are taking the opportunity to update our own classification of customer segments to help you better benchmark IQVIA to our CRO peers. From now on, we are going to define large pharma by the top 20 companies by RX sales, mid-size companies will be the next 60 pharma companies by RX sales, and EVPs, everyone else. I want to give you the breakdown of our R&DS revenue by customer segments as I just defined them. Large Pharma represents approximately 50% of our R&DS revenue. Mid-size, approximately 15% of our R&DS revenue. And EVP represents 35% of our R&DS revenue. I guess you can see that based on publicly available information, it is apparent that we have more revenue in the EVP segment than any of our CRO peers. And this is extremely important because emerging biopharma continues to be where much of the industry's innovation is coming from. A decade ago, EVPs represented about 45% of all clinical trials starts globally. Today, EVPs represent about 70% of all clinical trials starts globally. EVP R&D spend is also expected to grow at two to three times the rate of large pharma R&D spend. And of course, EVP trials are full service outsourcing. All of this creates a meaningful opportunity for IQVIA given we are the largest EVP provider. At the same time, large pharma continues to be a significant segment for us. In fact, we are benefiting from the strategic outsourcing partnership renewals by large pharma over the past two years, which we've been discussing several times in the past. And we, as you know, have significantly expanded the number and the scope of our preferred partnerships. As a result, we have seen our win rate with large pharma improve materially, leading to an expansion of our share of wallets with those partnerships, and in several cases, replacing large CRO incumbent providers. Shifting now to commercial solutions. The market environment continues to improve, supported by a nearly 45% increase in new drug launches in the first half of 2026 versus the first half of 2025. As you know, this is important because launch activity is a significant driver of demand across our commercial portfolio, with roughly half of launch-related spending typically occurring in the first two years post-approval. Additionally, as we shared before, there is an increasing trend from our large pharma customers seeking to outsource the full commercialization of certain therapies in select geographies. And given our global footprint and spectrum of capabilities across information, insights, and engagement, We have been winning a fair share of these opportunities. I want to take a moment to again remind you how to think about our commercial solutions business, especially in the era of AI. We help our clients in three main areas. One, understand their market. Two, plan their commercial strategies. And three, engage with their own customers. So one, we help our clients understand the landscape, primarily through our information offering. Our information business represents about 30% of our commercial solution segment, and revenue typically grows at low single digits. Two, we help our customers plan their commercial strategies, primarily through insights from our analytics and consulting business. This business represents about 20% of our commercial solutions business, and it grows mid to high single digits. And three, we help our customers engage with their own customers, that is healthcare providers, distribution channels, patients, and payers. And we do this through our patient solutions, technology, and commercial engagement services. That, in aggregate, is about 50% of our commercial solutions business and grows at high single digit to low double digits. Now, we've continued to see increased demand for these services across the board, as is evident in our own commercial demand indicators. The pipeline continues to grow strong double digits year to date. Decision timelines continue to reduce double digits. And of course, we are also winning more with win rates up double digits. When we think about future trends across both of our segments, clinical and commercial, we see the outsourcing market continuing to grow in 2027 and the years ahead. And in fact, We think AI will continue to contribute to this market expansion and will continue to fuel a strong tailwind for IQVIA. On the clinical side, clients are already telling us that AI in discovery will only increase demand for CRO services as more molecules with a higher predictable success are entering development. Additionally, Acuvias Living AI Solutions are further differentiating our clinical offerings and deepening our partnerships across all customer segments, large, mid, and EVP. Our AI-enabled capabilities, which, as you know, we've been working on, training on, and refining for at least two years, are already improving study design, accelerating timelines, and reducing operational risk across complex global trials. Let me give you an example of how this is playing out with large pharma. One of our longstanding customers recently expanded its partnership with IQVIA to include our full service clinical capabilities. That expansion led to an end-to-end award for large complex phase three stroke outcomes study. This client specifically told us that our AI-enabled capabilities in site startup and enrollment, along with our therapeutic expertise and global execution model, clinched the deal because it will help manage risk and run these studies with greater predictability. In another example, an EVP-awarded IQVIA complex global phase III oncology study across multiple treatment arms. And we won here because AI-enabled patient recruitment will help keep a complex study moving at higher speed with much better predictability. Another EDP selected IQVIA for a series of global autoimmune programs that bring together clinical, laboratory, and technology-enabled patient end-to-end solutions. Here, our AI-enabled patient reported outcome capabilities made the difference because they help support patient retention Protocol Compliance, and Higher Quality Outcomes. In commerce, we are seeing AI begin to contribute more directly to top-line growth as clients are moving beyond pilots and data foundation work and they're starting to deploy Iteria AI agents more broadly. Let me give you an example of what that looks like in practice. A mid-sized pharma client is expanding its use of Acuvia AI across an immunology franchise in 95 countries. We are combining our global syndicated pharmaceutical market data with our launch planning conversational AI agents to give the client an integrated view of market dynamics and help teams get to actionable insights in near real-time. Again, the benefit here is speed, precision, and Accuracy. Another example in commercial, we are working with the top five large pharma to deliver a complete AI-enabled enterprise analytics solution that seamlessly brings together data, technology and advisory support. This will deliver customized workflows that accelerate decision making and improve quality and accuracy. Beyond these broad and deep relationships with our customers, Governments and regulatory authorities around the world look to IQVIA for trusted healthcare expertise and insights. Recently, IQVIA was the only CRO invited to provide our perspective on clinical trial innovation at the clinical trials roundtable with the U.S. Department of Health and Human Services as part of their Trial Blazer initiative. We were subsequently invited to testify at a hearing of the House Energy and Commerce Subcommittee on Health regarding the FDA's role in creating a more efficient and accelerated path for early clinical development in the United States. We were the only CRO and also, by the way, the only representative from the biopharma industry to testify. We are proud of the trust policymakers placed in our leading expertise as they consider reforms to accelerate development timelines Modernize trials using AI and strengthening U.S. competitiveness in biomedical innovation. Finally, I'd like you all to mark your calendars for the upcoming IQVIA Invest the Day, which we are planning for December 2nd, 2026. And now to Mike for more details on our financial performance.

Thanks, Ari. Good morning, everyone. As a reminder, we implemented a new segment reporting structure effective January 1, 2026. In conjunction with this change, prior period segment amounts have been recast to conform to this reporting structure. Let's start by reviewing revenue. Second quarter revenue of $4,368,000,000 grew 8.7% on a reported basis and 8.5% at constant currency. Revenue growth within the quarter includes about two and a half points of contribution from acquisitions. Commercial solutions revenue for the second quarter was $1,793,000,000, up 8.6% on a reported basis and 8.4% at constant currency. R&D solutions second quarter revenue was $2,575,000,000, up 8.8% on a reported basis and 8.6% at constant currency. For the first half of the year, Total company revenue was $8,519,000,000, up 8.6% on a reported basis and 7.3% at constant currency. Commercial solutions revenue was $3,547,000,000, up 10.1% reported and 8.5% at constant currency. R&D solutions revenue was $4,972,000,000, up 7.5% on and Tom Senn Currency. And moving down to P&L. Second quarter adjusted EBITDA was $994 million, representing growth of 9.2% year over year, while first half adjusted EBITDA was $1,926,000,000. Second quarter GAAP net income was $266,000,000 and GAAP diluted earnings per share was $1.53. For the first half, Gap Net Income with $530 million or $3.14 of earnings per diluted share. Second quarter adjusted net income with $527 million and adjusted diluted earnings per share was $3.15 representing growth of 12.1% year over year. And for the first half adjusted net income was $1,019,000,000 or $6.04 for a diluted share up 9.8%. Returning to RDS bookings, the R&D Solutions net new bookings in the quarter were $3,150,000,000, a 19.3% increase year over year, resulting in a 1.22 book to bill, which as Ari mentioned, is all the more impressive given revenue grew 9%. I should also note that cancellations remained within the historical range. As of June 30th, R&D's backlog was $34.2 billion, and the next 12-month revenue from this backlog was $9,230,000,000, which is up 7.5% versus last year. And as discussed, given the long cycle nature of our business, it's more important to focus on the longer-term booking trends. In the quarter, The last 12 months net new bookings were $11,250,000,000, an increase of 12.9% year over year. And importantly, this metric has been steadily increasing in each of the past four quarters and clearly points to momentum in our business. So let's turn to the balance sheet. As of June 30th, cash and cash equivalents was $1,909,000,000, Gross debt with $15,999,000,000 resulting in net debt of $14,090,000,000. Our net leverage ratio ended the quarter at 3.59 times trailing 12 months adjusted EBITDA. Second quarter cash flow from operations was $558,000,000 and capital expenditures were $198,000,000 resulting in free cash flow of $360,000,000 represented growth of 23% year over year. And in the quarter, we repurchased $398 million of our shares, resulting in first half share repurchases of $950 million. And this leaves us with approximately $2.8 billion of share repurchase authorization remaining under the current program. Now let's turn to guidance. To reflect stronger organic revenue growth, In changes in the M&A and foreign exchange impacts, we are raising our full-year 2026 guidance for revenue, for adjusted EBITDA, and for adjusted diluted earnings per share. We now expect revenue to be between $17,275,000,000 and $17,475,000,000, representing year-over-year growth of 5.9% to 7.1%. The new midpoint of the revenue growth guidance is 6.5% versus the prior guidance midpoint of 5.8%. This new guidance includes approximately 100 basis points higher organic revenue growth and approximately 50 basis points higher contribution from M&A, all set by a foreign exchange impact that is 80 basis points less of a tailwind than in the former guidance. This revenue guidance now assumes approximately 200 basis points of contribution from acquisitions and only approximately 20 basis points of a tailwind from foreign exchange. We are also raising our adjusted EBITDA to be between $4 billion and $4.5 billion, growing 5.6 to 6.9% year over year, reconfirming flat margins year over year at approximately 23.2%. And finally, We are also raising adjusted diluted EPS to be between $12.80 and $13, up 7.4% to 9.1% versus prior year, or 8.2% at the midpoint. Let me provide a third quarter guide. For the third quarter, we expect revenues to be between $4,315,000,000 and $4,390,000,000, which represents year-over-year growth, 5.2% to 7.1%. Adjusted EBITDA is expected to be between $1 billion and $1.2 billion, representing growth of 5.4% to 7.5% versus prior year. An adjusted diluted EPS is expected to be between $3.19 and $3.29, which represents year-over-year growth of 6.3% to 9.7%. Both this guidance and the full-year guidance assume that foreign currency rates as of July 27th continue for the balance of the year. So to summarize, IQVIA delivered outstanding financial results. The second quarter revenue adjusted EBITDA and adjusted diluted DPS exceeding the high end of our guidance. We accelerated organic revenue growth across both commercial and clinical segments. We delivered strong adjusted EBITDA margins in the quarter. We had strong free cash flow performance up 23% year over year. The RDS net lead bookings were the highest since 2022 at $3,150,000,000 from double digits year-over-year and sequentially with very strong full-service bookings. And as Ari mentioned, the demand environment for both clinical and commercial has significantly improved as reflected in our forward-looking demand indicators. We've raised our full-year guidance for revenue, adjusted EBITDA, and adjusted diluted earnings per share, and we're planning a December 2nd investor day where we look forward to seeing you. Now with that said, let me hand it back to the operator for Q&A.