Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to the IQVIA First Quarter 2025 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. [Operator Instructions] As a reminder, this call is being recorded. I would now like to turn the call over to Kerri Joseph, Senior Vice President of Investor Relations and Treasury. Mr. Joseph, please begin your conference.

Thank you, operator. Good morning, everyone. Thank you for joining our first quarter 2025 earnings call. With me today are Ari Bousbib, Chairman and Chief Executive Officer; Ron Bruehlman, Executive Vice President and Chief Financial Officer, Eric Sherbet, Executive Vice President and General Counsel; Mike Fedock, Senior Vice President of Financial Planning and Analysis; and Gustavo Perrone, Senior Director of 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 also will 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 conference call will include forward-looking statements. Active 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, Ari Bousbib.

Thank you, Kerri, and good morning, everyone. Thank you for joining us today to discuss our first quarter results. I’m going to start with a usual update on financial performance for the quarter, and then provide perspectives on the market, including our understanding of the possible effects of recent U.S. government initiatives. How we are well positioned to navigate these near-term challenges and, finally, why we remain confident about the industry’s resilience and prospects. I’ll close by highlighting a few important wins in the first quarter. So let’s get started. We delivered strong revenue and profit results at the high-end of our expectations, despite a continued challenging environment in R&DS. Total revenue for the first quarter came in above the high-end of our guidance range, representing year-over-year growth of 2.5% on a reported basis and 3.5% at constant currency. And compared to last year and excluding COVID-related work from both periods, we grew the top-line about 4.5% on a constant currency basis, including about a couple of points of contribution from acquisitions. First quarter adjusted EBITDA increased 2.4%. First quarter adjusted diluted EPS of $2.70, increased 6.3% year-over-year. Let me share some details on the market landscape and the demand metrics we’re seeing for each segment. Starting with TAS. The business continued the strong recovery trend we saw exiting last year as our clients are launching new drugs and are executing on their commercial roadmaps. It is in times like these where there is some uncertainty in the biopharmaceutical sector that we clearly see the value of the scale, diversification, and differentiation of IQVIA’s portfolio offerings. It’s great that TAS is contributing over 40% of our revenue. TAS revenue growth actually came in above our expectations at 6.4% reported and 7.6% at constant currency led by double-digit growth in real-world…

Thanks, Ari, and good morning, everyone. Let’s start by reviewing revenue. First quarter revenue of $3,829 million, grew 2.5% on a reported basis, and 3.5% at constant currency. In the quarter, we had virtually no COVID-related revenue versus over $40 million in last year’s first quarter. Adjusting for this COVID step-down, constant currency growth was about 4.5%. As Ari mentioned, acquisitions contributed approximately 2 points of this growth than majority of this in the TAS segment. Technology & Analytics Solutions revenue for the first quarter was $1,546 million that was up 6.4% reported and 7.6% constant currency. R&D Solutions first quarter revenue was $2,102 million, up 0.3% reported and 1.1% constant currency. Excluding COVID-related work, R&DS revenue grew approximately 3% of constant currency. Finally, Contract sales & Medical Solutions first quarter revenue of $181 million, declined 4.2% reported and 2.1% at constant currency. Moving down to P&L. Adjusted EBITDA was $883 million for the quarter, that was growth of 2.4% year-over-year. First quarter GAAP net income was $249 million, and GAAP diluted earnings per share was $1.40. Adjusted net income was $479 million for the first quarter, up 2.4% year-over-year, and adjusted diluted earnings per share grew 6.3% to $2.70. R&DS backlog at March 31 was $31.5 billion, an increase of 4.8% year-over-year and 4.6% at constant currency. Next 12 months, revenue from this backlog is $7.9 billion. Reviewing the balance sheet. As of March 31, cash and cash equivalents totaled $1,740 million and gross debt was $14,330 million, resulting in net debt of $12,590 million. Our net leverage ratio ended the quarter at 3.40 times trailing 12 months adjusted EBITDA. First quarter cash flow from operations was $568 million and CapEx was $142 million, resulting in strong free cash flow of $426 million. In the quarter, we repurchased $425…

[Operator Instructions] And we’ll take our first question from Justin Bowers at Deutsche Bank.

Thank you, and good morning, everyone. Ari, could you discuss some of the drivers behind the strength in RWE in the quarter, how the order book looks through the balance of the year, and whether or not this outperformance is durable?

Thank you, Justin. Look, TAS delivers better than expected revenue growth, which is what helped the company deliver above the high-end of our guidance with 7.6% at constant currency. And as I mentioned, this was driven largely by the strong growth in real world, which was strong double-digits. This basically, you will recall, that real-world had declined, the part of real-world that discretionary had essentially shut down, and in the end of 2023, beginning of 2024, timeframe. And the rest of the real-world business, which is more mission critical, had been delayed and pushed to the right in terms of when to do it and so on. So both the discretionary piece and the required work that’s necessary to support safety or pricing, demonstrating the effectiveness of treatment, et cetera, both have returned. There’s pent-up demand, and we expect this based on the book of business to continue. The rest of TAS was also good, basically low- to mid-single-digits for the different other aspects of the business. Thank you, Justin.

Thank you.

We’ll move next to Matt Sykes at Goldman Sachs.

Thanks for taking my question. Ron, just maybe on the margin side, I know you guys have called out in Q4, 20 basis point potential margin expansion. It looks like as you kind of rearrange the guide maybe not expecting that. Could you just maybe talk about the opportunities for any potential margin expansion and kind of what you could do on the cost side to help achieve that?

Yeah. Well, one thing I would point out, Matt, when you’re looking at the margin versus our previous guidance, obviously, the impact of FX, because FX affects our top-line, but doesn’t have much impact on the bottom-line. And if you’re looking gross margins or EBITDA margins as the dollar is weak and revenue was going up, profit hasn’t followed. So that that really explains all the change in our implied margins versus what we guided to previously. Now, if you’re looking towards what can help drive margins going forward, it’s always cost reduction where AI would be one example that we’re looking at. We’re always looking at taking cost out across the organization. That’s an ongoing effort. You’ll see that in our restructuring expense. Of course, against that, we do have pressures on things like not just the FX, but mix has gone against us to a certain extent. You’ll see that in the gross margin. And, that mix includes, for instance, the shift towards FSP, which hurts margins a little bit. But net-net, the margin picture really hasn’t changed that much. What you’re seeing is mostly just the impact of FX, almost entirely.

Got it. Thank you. And just for a follow-up, Ari, could you just maybe talk a little bit about on a longer term basis, you made a comment in Q3 regarding sort of the competitiveness of RFPs going from sort of one of 13 to one of 4, if I’ve got the numbers correctly. And just in this environment, given sort of lower levels of demand, how do you feel about your position? And do you think that vendor consolidation trend, which has already been in place, will accelerate in this environment?

Are you talking about the R&DS business and RFP flow?

Yes. R&DS specifically, yeah, and vendor consolidation.

Yeah. Look, the RFP flow is actually pretty good given the environment. So the underlying demand is still there. We’re not seeing customers decide to no longer do certain programs. We went through a period of reviews and reprioritization of pipelines, which led to very elevated cancellations during the course of 2024, maybe 50% higher cancellation levels in 2024 than the historic norm. In the quarter, just I might mention, we had cancellations that were just in the normal historic range. So what happened in the quarter, we expect our booking is mostly, again, programs that clients decided to pause and wait to see what the actual consequences are of some of the administration’s pronouncements before they decide to go ahead. And separately, as you might have noted, there was deterioration in the funding for EBP. So, we had an unusually high number of EBP awards in the first quarter that were actually not only awards, but they were also contracted, but our policy is not to include those in bookings if we’re not confident in the fund or as long as we’re not 100% sure that the funding has been secured. Respect the RFP for though, it’s still very, very good. I mean, whether in we’ve seen consistent numbers in terms of whether it’s dollar value or volume, when our lead rates and hit rates are stable. So we’re not seeing any changes really in the flow of RFPs, whether the large pharma RFPs are up stronger than EBPs at this point. It’s pretty good actually and, sequentially, it’s high-single-digits, higher. So from that standpoint, I feel better at this point in the quarter than I did at the same point last quarter.

Yeah. And as we’ve mentioned previously, we did very well last year with renewing and expanding all the large pharma providerships that they went through, and we’re starting to see the benefits of those new RFPs from those relationships coming through.

Thank you.

We’ll go next to Shlomo Rosenbaum at Stifel.

Hi, thank you for taking my question. Ari, I want to ask a little bit more just probing on the operating environment. Given the uncertainty what you saw in R&DS, I’m just surprised that you didn’t see that in more of the short cycle business in TAS. Like you kept the guidance and I guess the assumption is things are going to continue. But do you think that there’s risk that that could spill over into some of the uncertainty into some of those areas in TAS like consulting or some of the analytics or some of the areas like that? And could it potentially result in further reprioritization even in the R&DS business? If you give us your thoughts on those things.

Yeah. I mean, you got to start when you’re asking the question. There’s considerable uncertainty out there. And whenever you have uncertainty, then obviously, people are hesitant to spend money. That’s a general rule, and that’s the concern out there. But so far, we haven’t seen that in TAS. All of our indicators, leading indicators, pipeline, decision timelines and so on continue to be strong. I believe that the reason we haven’t seen that is because there were pent up demand. We had already gone through the periods of holding back on spend in TAS, starting from the middle of 2023 through the middle of 2024. And so at that point, drugs that have been approved needed to be launched, and that’s what’s happening now. So what we’re doing, TAS, is support the launch of new drugs, market access, pricing of drugs, supporting commercialization efforts, et cetera. And, that’s the day in and day out day-to-day business of our clients. And, they haven’t stopped doing that. So we haven’t seen that. I understand the question, but in the TAS business, we are seeing continued good growth as expected. And, again, I believe that the spend has been held back for a while and there is pent up demand and necessary things to do. Now, the discretionary stuff, the absolute discretionary stuff, consulting and so on, yeah, I mean, not spectacular. This is just like flat- to mid-single-digits kind of current level. So it’s not that we are looking at spectacular things. So, what is being done now is the stuff that was necessary to operate. I mentioned real-world before as well as the pent up demand on other things. And that’s what’s driving TAS. So I don’t see the environment influencing this much. On the R&DS side, yeah, again, because…

Thank you.

We’ll take our next question from Michael Ryskin at Bank of America.

Great. Thanks for taking the question guys. I’m just going to follow-up on, I think, Matt Sykes’ earlier question, talked about cancellations in the quarter already being kind of normal. Maybe I could hone in on book-to-bill trends. I know you don’t like talking about this number quarterly, but just 1.02 in the quarter. Last year, you called out a few major cancellations across 3Q to be lower. This year – this quarter doesn’t seem to be the case. Is really – so what do you attribute that number to? Is it really the emerging bios that you talked about? How some of the RFPs aren’t quite in bookings yet, because the funding is not there? Is that the major swing in the air? And so, do you expect to be closer to that 1.15, 1.2 number for the rest of the year?

Okay. So I love this question on the quarterly book-to-bill. I mentioned before that awards that should have been contracted in the quarter, the contract wasn’t signed and was delayed. So that happened at large pharma a number of times in the quarter, and that’s due to this uncertainty, general uncertainty in the biopharmaceutical sector. That’s one reason for softer movements. The second reason, as you mentioned, is the EBP funding. I think you noticed that there are many different sources for what was the EBP funding in a given quarter, but we follow consistently by the world stats. And I think the funding in the first quarter went down to [$13 billion. Now, $13 million] [ph] is fine, but it’s way lower than what we had seen before. And that’s an indication, I think, whatever source you look at, you’ll see that EBP funding decline. Again, it’s due to the same reasons people are hesitant to commit the funds. If that happened, that the EBP signs a contract with us and we decide not to include it in the bookings, because we’re not sure about the funding. But that happens, like, once or twice in a given quarter. Here, we had much larger number of such cases in the quarter. So, again, the two reasons all deriving from the same underlying factor, which is the macro uncertainty. Large pharma picking down the signature of the contract through a later period and EBP not confirming that the funding is secure for a contract they’ve already signed. And as a result, we do not include that in our bookings. That’s what caused the softer bookings in this particular quarter, not the cancellations. Now, again, I mean, I want to, since you break it up and it’s my kind of – it’s…

No. Not at all. Very fair point, Ari. Thank you for that color. I appreciate the context. If I could squeeze in quick follow-up, just any commentary on pricing environment. Just wondering if there’s any change in the quarter given all the macro uncertainty. And, again, this is more specific to R&DS. Thanks.

No change. Look, I mean, pricing is not enough level, has not been a level for some time. So, we are – the pricing negotiations always are tough. But again, as Mike mentioned earlier, we secured the strategic partnerships with our large pharma clients last year. That was the time at which all the rates were negotiated and so on. And so, I think, we are comfortable operating in the current environment. No changes.

Thank you. Thanks a lot.

Thank you.

We’ll move next to Jailendra Singh at Truist Securities.

Yeah. Thank you and thanks for taking my questions. So just given all the recent macro development and uncertainty you flagged, and thanks for all the color you gave Ari. Are you guys seeing any change in the RFP or new bookings mix in terms of FSO versus FSP? And one another follow-up quickly, if I can ask. What’s the latest two mega trials that were delayed? Are they expected to resume in second half? Sorry for two-parter.

Those three questions. It sounds fine. Thank you very much for the questions. Number one, I think you’re talking about the mix, full service versus FSP. And, look, we had signals over the course of the prior year that large pharma was sort of doing a little bit more FSP. And I think we saw this reflected in the RFP flow and in the awards and in the bookings, okay, where FSP as a percentage of total was increasing. Okay. We said that in our bookings in the year, it was reaching in 2024, close to 20%. Whereas in our revenue, of course, it’s lower than that since we’re burning revenue related to prior period bookings. In our revenue, FSPs represented in 2024 more about 15% to 16%. So, obviously, we’re trying to do 20%. However, again, I said before many times that these are pendulum swings. We’ve seen it before in this industry where large pharma reverts to FSP, decides to insource more of the activity, but then they swing back. And I might – you might find it interesting to know that in the quarter, we actually started seeing some signs of this reversal. Okay. Actually in the quarter, FSP bookings represented less than 10% of the total. And, we look at our qualified pipeline, it’s in the mid-single-digits, low-single-digits. And in the RFP flow, it’s about 5%. We actually have very, very strong and exciting pipeline and RFP flow in full service work for large pharma. And the reasons are the same as the reasons that have always led our clients to do more outsourcing, which are basically that they cannot possibly have all the expertise in-house. Sometimes they buy an asset in a different therapeutic indication, and they need resources that they don’t have in-house. And…

Okay. Thanks, Ari.

Mike, any more color to add?

Yeah. Just to add a little bit more color on that. So, we are reaffirming our range with that mega trial pushed out of the period, as Ari said, plus let’s see what happens with the bookings environment for the balance of the year. You can conceivably see sort of R&DS probably shading more towards the lower end of guidance range, but we’ll have to see our BD teams are out there actively working to secure any business, and that’s kind of the current year.

Got it. Thanks, guys.

We’ll move to our next question from Eric Coldwell at Baird.

Thanks. I have two, if you don’t mind. You might have just partially answered the first one. So, I was going to ask about the impact on guidance from FX. And the question was, was there any other change to the guidance or directionality of the guidance excluding FX? What I’m getting to is during the prepared remarks or maybe the Q&A, Ron said that the year-over-year gross margin reduction in Q1 was primarily FX, but FX has now turned from a big headwind to a moderate tailwind. So I’m questioning how much EBITDA and EPS were protected by the FX shift, i.e., would you have needed to maybe reduce the range on EBITDA and EPS if it weren’t for FX?

No. I mean, EBITDA is, you can think of it as being largely independent from the FX ranges. The impact of FX on EBITDA is very muted. The impact on revenue, obviously, isn’t. You saw a big increase in our guidance for the year on revenue, and the combination of those two reduce our margin, our implied margin guidance. But, yeah…

No notable impact on EPS then for year…

No…

And then, if I can have one more quickly, and apologize toggling like everyone, I guess, toggling multiple calls today, so I might have missed this. I have received a couple of inbound questions from investors during the call about TAS M&A and the M&A impact overall from the firm. So, if you address this, I’m sorry, but I am getting some questions on it. I thought I’d throw it out there.

There’s about 200 basis points for the quarter, Eric, and about 150 basis points for the year. The majority, but not entirely in TAS.

So if TAS – so the question, Ron, was if TAS was the majority, and I don’t know if that’s 60% or 90%, but if it was the majority, then mathematically, I believe you could have picked up as much as 5 points of growth in TAS.

No, no, no.

It wasn’t that much.

The organic growth in TAS was sort of mid-single-digits.

Okay. Perfect. Thanks very much.

Low mid-single-digits. Yeah.

We’ll move next to David Windley at Jefferies.

Hi. Good morning. Thanks for taking my question. I wanted to focus on margin and ask if you could talk about margin performance by segment. And then, on the restructuring activities, the expense that you took in the quarter, the add back was a little bigger. I wondered if you could comment related to cost takeout, what some of the targets are? Is it still kind of rightsizing headcount or facility consolidation? Or is it something else? And how we should think about those cost takeouts again going back to the margin by segment? Thanks.

Yeah. Well, look, what we’re doing in terms of margins and is essentially to work on our cost structure, the same way we’ve been working on it forever, address the overhead structure as we continue to scale up our business, address labor arbitrage. We have offshore centers all over the world for different centers of excellence, for different types of activities, both on the commercial and the R&DS side. And we continue to shift work different places where it’s optimal. And, finally, we use technology automation and our AI agents to bring more efficiencies to our processes. Those activities result in the restructuring of headcount, literally all over the world and in both in all segments. So that’s what you see reflected in the whole and the structured numbers, but that’s the – do we talk about margins by segments? I mean, we do – we have disclosure of…

We have a disclosure, segment disclosure on a GAAP basis. Look, there’s a little bit more pressure on overall margin in the R&DS segment than there is in the TAS segment. Both had good SG&A performance, a little bit more gross margin pressure in the R&DS segment. Some of that mix related relating to FSP and also increases higher growth in the lab business that tends to be a little bit lower margin.

This is the mix. The mix influences margins in the segments, right? So, real-world, for example, is somewhat lower margin than the rest of the business than the analytics or the data or the technology. And so, as a result, when real-world grows faster, you do have a mix impact on margins. That’s for the commercial side. And then, on the R&DS, as Ron mentioned, FSP and lab do have lower margin profile than full service. And as I mentioned, in our revenues, FSP is a little bit higher, maybe the point two in the quarter. In the revenue side, I mentioned earlier that in my commentary on bookings and pipeline and RFPs that it seems to be going the other way now. But on the revenue side, FSP was a little larger in the quarter and lab was a little bit larger. And those two have somewhat lower margin profiles than for service. So, yes, we did have the quarter adverse mix impact on margins. But, again, that can fluctuate quarter to quarter.

All right. Yes. I was just saying any pass through movement as part of that conversation that we should be aware of pass through change in the revenue composition?

No, nothing over the long-term.

No, not the area of significant. No.

Okay. Great. Thank you.

All right. We have time for one more operator.

And we’ll go to Tejas Savant at Morgan Stanley.

Hey, guys. Thank you for the time here. So, I’ll ask a quick two-parter. Ron, any comments on the stranded costs associated with the mega trial that you said is now pushed to 2026? And is there any risk that the second trial, which you just got confirmation on, could slip again in that sort of 4Q timeframe into 2026 as well? And then, Ari, one for you on real-world evidence. You called out some of the unique sort of policy driven opportunities for that business over the medium-term. Is there anything you’re doing either organically or perhaps from an M&A standpoint that could position you to fully capitalize on some of these opportunities that are coming up?

I’ll start, Tejas, with the stranded cost. A little bit of impact, but not a huge impact. Obviously, on the trial that got further delayed, we’re going to free up those resources and use them for other purposes. We’re not going to keep them there indefinitely, but for the one that’s going forward, there is a little bit of impact, not terribly significant. And, well, we can only react to what our customer tells us on the trial that was further delayed, and we’re assuming that it’ll go forward. The customer still wants to do it, and we’ll fit.

Yeah. And the one that’s starting as planned, we got recent confirmation that that’s the plan. So there’s no further news on that or notification of any changes as of today. So that’s for that. What was your question? Real-world. Yeah. Well, no, look, real-world, I think, we are – the industry will tell you that we are recognized as the leader in the area in this segment. And we intend to fully capitalize on the opportunities that may emerge from any new initiatives from the administration, as I mentioned in my remarks. So I think, again, we are very well positioned here to navigate this sort of turbulent times. I’m very, very confident based on our conversations with clients that the world is not coming to an end and the industry will find ways to adapt. In fact, there are many reasons to feel very optimistic. As I said before, and I repeat again, I feel better at this point in the quarter than I did at the same point last quarter when I look at the metrics, whether it’s on the commercial side or on the R&DS side, and based on our conversation with clients. So with that…

Okay. Yeah. Thank you, everyone, for taking the time to join us today [Technical Difficulty] our second quarter 2025 earnings call. The team will be available for rest of the day to take any follow-up questions that you might have. Thank you very much, and have a good day.

And this concludes today’s conference call. Thank you for your participation. You may now disconnect.