Ladies and gentlemen, thank you for standing by. Welcome to the IQVIA Fourth Quarter 2018 Earnings Conference Call. During the presentation all participants will be in a listen-only mode. As a reminder, this conference is being recorded Thursday, February 14, 2019. I would now like to turn the conference over to Andrew Markwick, Vice President, Investor Relations. Please go ahead.

Thank you, Alison. Good morning, everyone. Thank you for joining our fourth quarter 2018 earnings call. With me today are Ari Bousbib, Chairman and Chief Executive Officer; Mike McDonnell, Executive Vice President and Chief Financial Officer; Eric Sherbet, Executive Vice President and General Counsel; and Nick Childs, Senior Vice President, Financial Planning and Analysis. Also here with us today is a new member of the Investor Relations team Jennifer Halchak, who just joined IQVIA Senior Director, Investor Relations. Jen has over 20 years of experience, working in the capital markets with extensive experience in IR. We are excited about Jen, joining the team and I know she is looking forward to working with all of you. 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 Presentations 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 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, including the impact of the changes to the revenue recognition accounting standards, 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, 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 Bousbib.

Thank you, Andrew, and good morning everyone. Thank you for joining our fourth quarter 2018 earnings call. We will review how we closed 2018 and provide financial guidance for 2019. I'm pleased to report that we had another strong quarter, capping a year of consistent solid operating performance at IQVIA. Once again, we reported results at the high end or above our financial targets. Let's review the numbers. Fourth quarter revenue of $2.688 billion came in above our guidance range, resulting constant currency revenue growth of 8.1%. Relative to the midpoint of our guidance range, over half of the revenue beat was driven by an acceleration of our organic growth rates in both the R&D and technology and analytics segments, and a little less than a half was driven by the higher than expected pass-through revenue, associated with this organic growth. From a segment perspective. Technology and analytics solutions revenue grew 10.9%, at constant currency. On an organic constant currency basis, growth was over 5%. You will note this growth rate represents a significant acceleration of our historical consistent 4% organic growth in this segment. We expect this momentum to continue into 2019 and beyond. This strong organic growth performance was driven by solid double-digit growth in our real world business and higher than expected year-end demand for our other commercial offerings. Also during the quarter, we marked the anniversary of several tech-businesses we have acquired in 2017. Which is why the contribution from an M&A has tempered sequentially. R&D solutions revenue grew 8.7% at constant currency, of which 8% was organic. You will note the strong organic constant currency growth in the quarter represents a significant acceleration of our R&D growth rate, which was 4.5% through the end of the third quarter. The strong organic growth performance in our…

Thank you Ari and good morning everyone. As you have seen, we closed the year with strong fourth quarter financials and would now review the details. Fourth quarter revenue of $2.688 billion grew 6.6% reported and 8.1% at constant currency. Full-year revenue of $10.412 billion grew 7.3% reported and 6.8% at constant currency. Fourth quarter, technology and analytics solutions revenue of $1.127 billion grew 8.8% reported and 10.9% at constant currency. Technology and analytics solutions full-year revenue of $4.137 billion, grew 12.4% reported and 12.1% at constant currency. R&D solutions revenue of $1.368 billion, grew 7.8% at actual FX rates and 8.7% at constant currency. Full-year, R&D solutions revenue of $5.465 billion grew 7.1% at actual FX rates and 6.5% at constant currency. Contract sales and medical solutions revenue of $193 million declined 10.6% reported and 8.8% at constant currency. Contract sales and medical solutions, Full-year revenue of $810 million declined 11.5% at actual FX rates and 12.2% at constant currency. Turning now to profit. Fourth quarter adjusted EBITDA of $583 million, grew 10.8% reported and 9.7% at constant currency. Full-year adjusted EBITDA of $2.224 billion, grew 10.6% reported and 9.9% at constant currency, resulting in 2018 adjusted EBITDA margin expansion of 60 basis points on both a reported and constant currency basis. Fourth quarter GAAP net income was $69 million and GAAP diluted earnings per share was $0.34. Adjusted net income of $307 million grew 17.6% in the fourth quarter. Growth was primarily driven by stronger adjusted EBITDA and tax efficiencies, which were partially offset by higher D&A and interest expense. Fourth quarter adjusted diluted earnings per share of $1.50 grew 23%. Year-over-year growth was driven by higher adjusted net income, which I just discussed, as well as the lower share count year-over-year. 2018 adjusted diluted earnings per share…

Hang on a second Mike. Before we turn it over to Q&A, I just want to say that how incredibly proud I am of the year - of the team for really a super performance in 2018. Everyone worked very, very hard to deliver performance we can all be proud of. Frankly, it feels really good to look back at where we were just a couple years ago, after closing our merger. You were all there and recall those beginnings. And at the beginning of that journey, we set out to execute a three-year plan to accelerate revenue growth, exiting the third year of the merger by 100 basis points to 200 basis points to expand our margins throughout $200 million cost synergy target and other productivity improvements and to grow our adjusted diluted EPS by double-digits and of course execute on a capital allocation strategy, which included strategic M&A and returning cash to shareholders through share repurchases. And here we are just two years after the merger, we are already looking at top-line acceleration - at the top line acceleration that we were looking for. And we are well on our path to finalizing to $200 million of cost synergies. So again, I want to thank our more than 58,000 employees for their hard work and their collective contribution. You have take IQVIA to really new heights and I look forward to continuing this journey with you as our momentum continues to build and now okay, to get back to the program and I guess, open up for questions.

Yes. I think we will take our first question, please, operator.

Thank you. [Operator Instructions] The first question comes from line of Tycho Peterson with JPMorgan. Please proceed.

Thanks, congrats on the quarter. Ari, just wondering if you can provide a little bit more color on the healthy bookings and B2B. And you know, it seems like a lot more commentary on your part on this call about executing at a faster pace and some of the pass-through revenues helping also contract sales and medical. So, if you could touch on those two dynamics as well that would be helpful.

Yes, well, we try to give you a little bit more color. We heard the questions on our bookings growth and so on. So we wanted to provide as much data as we could and hopefully that will help the understanding that we are really growing our business at a really unexpected pace. With respect to your question on executing our book-of-business faster, with our NextGen capabilities. You know, people are focused on the burn rate in aggregate, but it's really a very high level metric because we are booking at a much higher rate. It's very difficult to see that we actually accelerating revenue growth in the trials that actually use the Smart Trial NextGen capabilities. On specific trials, we see it. And absent that, you would see an aggregate burn rate goes down mathematically because of the very large volume of bookings that we bringing in at one time. But in fact, we know, that we are accelerating revenue recognition through executing faster on the trials, where we deploy the technology. And as a result of that, since we are - we changed the accounting method and now have to report pass-through and service revenues as one-line. Because we are executing faster than we bringing in pass-through, we recognize pass-through revenue faster as well. And That is also part of why the revenue growth was higher than we had anticipated. But really, it's across the board. I think, as I mentioned mostly on the full clinical side, the bookings have been extremely strong, as the strong and large pharma, which is still, the majority of our bookings, strong on EBP as well. FSP is a bit weaker, as you know, the company have been kind of distancing itself from lower margin FSP work. Before the merger, we declared that we intend to come back in this segment and we are making some progress. But obviously it's still a small part of our bookings and we are not there yet. And - but again, according to our bookings it has been outstanding.

Okay. And then for the follow-up, can you just talk a little bit more about the drivers that underpin your confidence in CSMS transitioning back to growth this year. What gives you [indiscernible]?

So we said, we gave guidance for flat revenue. But during the year we transition to growth sometime in the year. That is where the plan is built. The business was organized essentially and separately, and we thought it was very inefficient, you know, that we had kind of a heartache on this business, didn't quite know what to make of it. We decided in 2018 that we were going to align it with our operating structure regionally. We are taking a much more local approach with our regional business unit, selling the offering along with the rest of our commercial offerings. That is where the client relationships are stronger for this type of work. And operating in this more decentralized will puts us closer to decision makers in the field. We also have a better opportunity to partner with the client and use some of the technology and analytics solutions offerings in the sale process. So overall, we see positive outlook for the business in 2019 and beyond, in a way that we haven't had in many years. As you know, the business has been declining double digits. So Yes, thank you.

Okay, thank you.

Thanks operator. You can take on next question please.

The next question comes line of Ross Muken with Evercore. Please proceed.

Thanks Ari, for all the color. I guess maybe first, it seems like, and you highlighted the OCE offering is sort of accelerated to a degree where you are getting a ton of customer traction here, and that obviously has pretty material sort of long-term implications for the growth rate of the technology business. I guess, as you think about sort of the scope of where you are in that launch and sort of the investments you are making now and then eventually what that will allow you to do on maybe the operating line in that business. I guess, how do you think about sort of what that does to the sustainability of this maybe elevated growth rate we are seeing in technology and then remind us maybe on the margin cadence for that piece. We get sort of some of the cost now that the long-term margin profile of that sales should be quite attractive?

Yes, Ross, thanks for your comments. Yes, That is absolutely correct. The long-term attractiveness of this business is undeniable margin expansion once the technology is deployed and it's essentially SaaS license revenue, which is high margin revenue. The initial phases are - you know, deployment and implementation can be costly. So, this is not a margin business, it's a lot of labor content involved. We do most of our implementation ourselves. As you know, won some very large contracts, it's unprecedented in our organization. We mentioned the Roche deal, which is really big, it's a very big number. And so in the initial stages, That is very much a margin headwind. But it is an investment for us and it generates superior growth. And long-term, these are higher margins, as you point out, and I would add, they are sustainable, long-term margin. It's very, very hard to dislodge incumbents in technology, which is why it's been a struggle in this area. In the CRM, as you know, there is a very large dominant player who's been very, very good and it's been essentially unimpeded. And we are making a comeback and we are trying to claim our fair share. But the fact is once you are in - the switching costs are very high, which is why - this is an attractive business and why embedding technology in everything we do is a fundamental strategy of ours. We want to be partners for the very long-term with our clients and we want them to value the partnership and technology builds sustainable partnership possibility with our clients for the very long-term.

Thanks for that. And maybe just going back to the R&D business. Yes, obviously you have done much better on the Biotech side and you have taken a mass amount share there, off of a low base. But it feels like, in general, the momentum in the business even the base pharma business continues to build. I guess as you think about sort of where you are taking the share from and then the sustainability of what that means in terms of the structural advantage, it's sort of proving out, you know how versus a lot of the peer base. I guess, do you think the runway on continuing to put up what maybe not this level of bookings outperformance but still superior to kind of industry, you feel like you are sort of building on something that will lengthen your lead versus the peer group or you feel like we are seeing sort of the step-up and then it maybe renormalizes back to the average over out of the next 12 months, 24 months.

Yes, I mean, you know normalizing is not a term that I like culturally. So no, we are looking - what we are looking to do is accelerate momentum. That is what we are about, and there is no, there is no normalization of any point in time here. There is a big market out there. I mentioned in my introductory remarks that the fundamentals of the industry, we believe are very attractive. Secondly, we look at the market as a whole that is what is being spent in R&D globally. I don't really care whether the spend is internal, external with CROs, with small-medium, we can't really make a rigorous analytical sense of what the market size is and the precise market shares. I think it's very, very hard to ignore the size of our bookings, our book-to-bill ratios, even though we are the largest by far. And then not conclude that you know, there is a market share, a significant market share move here. Now what is it being taken from - I'm not going to speculate that. We don't know, not every competitor is publicly trading. Not everything is disclosed the same way. People lump bookings in a different manner. We haven't changed the way we account for our bookings, it's the same, and it's been the same forever. So there is no change, it's consistently applied, other than the change we made at the merger, which was the switching to a contracted basis, as opposed to just awarded basis, which we believe is more conservative, but other than that, it's consistently applied. And so we are looking to increase our share of spend, our share of wallet with each and every customer large pharma, biotech, domestic, global, FSP, full clinical. We just look at the spend in aggregate and buy clients. We have a centralized, unified account management program and there is no territory that we are not looking at, whatever segment I mentioned you can think of. And we will continue that strategy. Again on the numbers, it's hard to ignore the market share shift. And on the specifics of clients, it's also hard to ignore the moves. I mentioned, we have got over 300 new clients in 2018 alone that we didn't have before. And among the top 20 large pharma, I had mentioned many times that the merger that I was stunned that we didn't do business with many large pharma companies. But since then, we are now doing business and a lot of it with five previously, so called, locked out accounts and That is significant.

Thanks so much and congrats.

Thank you.

Thank you. We take the next question please operator.

The next question comes line of Jack Meehan with Barclays. Please proceed.

Hi, thanks. And I was hoping could you give a little bit more color on the margin progression for 2019, pleased to see expansion. I know that is cultural for you. But if you could just walk us through some of the initiatives you have going to streamline things on the R&D side versus some of the investments on the TAS side. Just those moving pieces would be helpful.

Yes. Thank you, Jack. Look we will always take faster growth rate over more margin expansion. Like you do the math for you. You know that a point, everything else being equal, a point of faster growth is worth a lot more, a value than a point more of margin. Having said that, I have said it repeatedly and I will say it again, we want to do both. We want to grow and accelerate our revenue growth and we also want to expand our margins. Now there will be times when it could be a quarter in or quarter out, where there may be no margin expansion. But the trends for us, will continue to be to expand our margins. Now it is, when you step back and look at what we have been doing since the merger in terms of investments in the business, investments in the OCE platform, investments in deploying for very large wins like Roche and Novo Nordisk and some of the other wins that we have. Investments in orchestrated clinical technology, OCT suite of products that we are launching or will be launching in 2019. Investments in the NextGen, the Smart Trial automation platforms that we have talked about in E360, in the aggregation and sourcing of additional patient level data. I mentioned we now have over 600 nation - 600 million lives. Investments in virtual trials, all of these means many more. People resources, I think we started the merger with 50,000 people, we are at 58,000 people to support the business growth. We are recruiting a different makeup of skill set population, much higher compensation levels, data scientists who are in very high demand, of technology sales people, also in high demand. Investing in specialty areas, in assets, in emerging markets. So…

Thanks for all the detail.

Thank you.

Thanks, Jack. Operator, can you take the next question please.

Your next question comes from the line of a Shlomo Rosenbaum with Stifel. Please proceed.

Hi, thank you very much. Are you won a lot of business on the OCE platform. I know, it was a big focus at the end of 2017. You had mentioned that, at the time that there was a cycle of kind of a renewal cycle where you wanted to gain more market share or recapture more of what you felt belong to the company or the company could get. How far along are we in this cycle? And - or should we see this kind of level of contract wins in kind of the software area continue into 2019 and 2020?

Thanks, Shlomo. Before I answer your question, I just wanted to send you a little bouquet here for that outstanding investor call that you took the initiative of organizing . Actually, we didn't even know about it and it's quite a few - to be able to get a client on record to explain to investors, their experience with our IQ, and it was favorable on top of it, so. Thank you for that. And with respect to OCE and the pipeline, I mentioned in my introductory remarks that look, we have right now over 100 active sales leads. We won over 30 accounts, including two large ones. Virtually every single one of these is a head-to-head competition. The renewal cycle, I mentioned before, is a very, very hard because it's difficult to remove and entrench - provide technology provider. As you all know, in any technology platform and ERP or any application is very difficult. The switching costs are high, but we are not deterred by that. We are going to continue to find out that we have good prospects to win a fair share in that market. We also need to realize that beyond CRM, it's a lot bigger field out there. We mentioned OCT on the clinical technology side, That is a field where there is no renewal cycle. This is a big and emerging opportunity, where a lot of currently paper, labor intensive processes can be used to be automated, not the only ones to observe that opportunity. But we are fighting it out with others and we believe we will gain a fair share of that market as well because of our superior capabilities. So yes, we are very bullish on technology. We have been for the longest time and it's really across the board. So, thank you.

If I can get a follow-up. Just I think someone was touching on this before, but it seems like the margin expansion, you are getting is despite where - significant investments to deploy these wins. Is there some way you can just kind of give us a hint as to - you know, how long these deployments will take? I know there is the investments for the 30 you talked about. Is that going to go through 2019 in halfway through '20. How long should we think about that before they actually start to have a more - really a material contribution to margin expansion instead of being a headwind?

Yes, I mean look, this implementation is - when they are global, can take one year, or 1.5 years. We know that the main, the big dominant competitor in this space, in some cases you know four, five years, after we have the contract, they are still deploying some of the countries they were supposed to be brought in. Now we believe we can deploy at a faster rate, That is one of the main advantages of our technology. I believe, the competitive advantage. We can deploy at a faster rate. So it's a one year, 1.5 years, implementation. But again, this is going to continue. In other words, just because we will finish the implementation for these 30 plus wins. We still winning - we hope to win all the business. So we will continue to have implementation all the time, but hopefully - the revenue associated with the software That is already deployed then can more than offsets and it becomes a manageable headwind to our margins when we have new implementations.

Okay. And thank you for the shadowed earlier.

Thank you.

Thanks, Shlomo. We take our next question, please, operator.

The next question comes from the line of Eric Coldwell with Baird. Please proceed.

Hi, thanks very much and good morning. So I have so many different things I could hit on here, but I'm going to divert a little...

Because we give you too many numbers to dissect there.

Yes. You are filibustering us this morning - no, it's all good. So the contract sales division, CSMS, doesn't get a ton of attention and you have been very consistent on that since day one. But you are looking to working on rejuvenating it. I'm hearing more positive things in that side of the market, the commercial market. I think, your two big peers are seeing better things, at least in the US for sure. I would love to get a little more color on what you are seeing why you think it returns to growth in the second half, and you will probably yell at me offline, but I heard a little rumor that you want a pretty decent contract sales engagement this year. I'm curious if you could talk about the pipeline on just straight salesforce wins?

Look - we are pleased that our CSMS business is showing positive signs of stabilization as we head into 2019. When you compare our business to the peers, you have to look at geographic mix, service mix, which again can impact the growth. For example we are very strong in Japan and actually a leading position in Japan. No, none of our peers has anywhere near what we have as a competitive position in Japan. And the Japanese market has been is to well-known fact, has been declining. So therefore, our peers are not as impacted as their business is more skewed to North America and Europe as an example. Certain markets in Europe have also had been a headwind. Some of our competitors, less exposed the largest US competitor is not exposed to those markets, either Japan or Europe. If you look at the service mix. We are weighed more toward CSO type of services, traditional contract salesforce. And the peers have a mix of both legacy CSO services, along with communications, consulting, MSLs et cetera. If you look at what is in the bag, it's a lot of cats and dogs, some of which are actually doing better than contract sales. So it's hard to compare us to peers exactly. And so our peers have done M&A in the space. We haven't, basically, we started the business from that standpoint. And so therefore it's very difficult to compare our peers growth rates without - because of all those reasons, geographic, product mix, they've got stuff in there, That is not really pure contract sales, it's also kind of clouds the numbers, and they've done M&A, we haven't. So having said that, you are correct to say that we have reenergized the business, we told you we were going…

Thanks, Ari. Operator, I think we are running out of time, but I would like to maybe just try and squeeze in one more very quick question if we can.

Sure. The next question comes line of Robert Jones with Goldman Sachs. Please proceed.

Great. Thanks for sneaking me in. You know, Ari, I know, appreciate it's difficult to pinpoint, the strength whether it's from share gains or just from a healthy end market seems like both, but I'm curious just, as you have seen more traction across not only large pharma, but emerging biotech as well, what is the reaction from the competitive landscape in. Have you seen any change in behavior from those that you are going head-to-head with in the RFPs that you have been winning?

I don't know, look, we are what I can tell you is they spend a lot more time looking at what we do, then we spend time looking at would they do. And so we have got a totally different strategy. It's hard to bucket our competitors into one group because they you have got those that continue to be dismissive of our approach. Initially it was about data doesn't matter, technology doesn't matter, then it was about we are losing all of our people, you know, we are not really booking real stuff, whatever it is, you talked to them more than we do. And I respect competition, it's good to have healthy competition. We have got a lot of players that are very good in what they do. Our approach is just different. We are leveraging unparalleled, unmatched capabilities that combined unique information assets, advanced analytics, machine learning technology, capabilities and most importantly domain knowledge across therapeutic areas that no one comes close to. And we do all of that on a global basis in a 100 markets. That is very different than what other people do. We do leverage those capabilities across everything that we bring to our customers, whether it's on the commercial side, in the real world strategy and we are in the early stages of finalizing our - the next leg of our journey, which we call internally V 2022 - Vision 2022. At the time of the merger, we gave you mid-term strategy, meaning what will happen in the 2017, 2018, 2019 three year period and we believe we are delivering on that promise and on those goals. Sometime this year, we are trying to pin down the dates. We would like to invite all of you to join us for the Investor Day. Well, we hope to be in a position to give you what our plans are, and our strategic objectives are for the next three year - our journey the 2021, 2022 timeframe. So with that I'm going to conclude. Thank you all for your patience and it was a longer call. And obviously Mike and Andrew and Jennifer will be available for follow-up calls as usual. Thank you.

Thank you, everyone. Thanks for taking the time to join us today and we look forward to speaking with you again on first quarter 2019 earnings call. Jen and I will be available for the rest of day to take up any follow-up questions you have. Thank you.

Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your line.