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

Thank you, operator. Good morning, everyone. Thank you for joining our third 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, Financial Planning and Analysis; and Gustavo Perrone, Senior Director, 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 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 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 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 third quarter results. We delivered another strong quarter. Revenue and profit were towards the high end of our guidance, reflecting solid operational performance. Free cash flow was particularly impressive this quarter. It was actually the highest quarterly free cash flow ever, even when you consider the large advances we got during the COVID era for vaccine trials. This strong free cash flow, of course, reflects a good and disciplined working capital management by the team, but also an improved overall industry backdrop. On the clinical side, net bookings in the quarter totaled exactly $2.6 billion, which resulted in a net book-to-bill ratio of 1.15x, also reflecting the improving trends in customer demand that we started seeing in the second quarter as well as, of course, solid execution from our sales teams. In fact, our third quarter net bookings were 5% higher sequentially 13% higher than a year ago and 21% higher than the trough that we experienced in Q1 this year. Key demand metrics were also strong in the quarter. The EBP funding momentum is building this year with each quarter delivering steady sequential growth, reaching $18 billion in Q3 according to BioWorld. Our qualified pipeline was up 6% year-over-year, driven by large pharma and EBP segments. You will recall that in the second quarter, we had high single-digit sequential RFP flow growth and low teens growth year-over-year. This quarter, we saw again high single-digit RFP flow growth sequentially and 20% growth year-over-year with growth across all segments. Importantly, client decision-making time lines have been improving sequentially. Finally, our backlog reached a new record of $32.4 billion at the end of the quarter, showing growth of 4.1% compared to the prior year. On the…

Thanks, Ari, and good morning to everyone. Let's start by reviewing revenue. Our third quarter revenue of $4.1 billion grew 5.2% on a reported basis and 3.9% at constant currency. Now excluding COVID-related work from this year and last, revenue grew 4.5% at constant currency, and this included about 1.5 points of contribution from acquisitions. Technology & Analytics Solutions revenue for the third quarter was $1.631 billion. That was up 5% reported and 3.3% at constant currency. R&D Solutions third quarter revenue was $2.26 billion, growing 4.5% reported and 3.4% at constant currency. Now excluding the step-down in COVID-related revenues, R&DS revenue grew 4.5% at constant currency. And lastly, our Contract Sales & Medical Solutions business, or CSMS, grew revenue of $209 million -- had revenue of $209 million, and that was up 16.1% reported and 13.9% at constant currency. Year-to-date revenue for the company was $11.946 billion. That's up 4.4% reported and 3.7% at constant currency. And excluding all COVID-related work, our year-to-date growth was approximately 4.5% at constant currency. Tech & Analytics Solutions revenue was $4.805 billion year-to-date. That's up 6.7% reported and 5.8% at constant currency. R&D Solutions year-to-date revenue of $6.563 billion was up 2.5% at actual FX rates and 1.9% at constant currency. Excluding COVID-related work from both periods, revenue grew approximately 3.5% at constant currency. And lastly, CSMS year-to-date revenue of $578 million was up 6.8% reported and 5.9% at constant currency. Let's move down the P&L now. Adjusted EBITDA for the quarter was $949 million, representing growth of 1.1%, while year-to-date adjusted EBITDA was $2.742 billion. That's up an even 2% year-over-year. Our third quarter GAAP net income was $331 million and GAAP diluted earnings per share was $1.93. Year-to-date, GAAP net income was $846 million or $4.86 of diluted earnings per share. Adjusted net income was $515 million for the third quarter and adjusted diluted earnings per share was even $3. Year-to-date adjusted net income was $1.48 billion or $8.50 per share. Now as already noted, we had strong net new bookings this quarter, confirming the improved demand environment we started to see in the second quarter. The R&DS backlog at September 30 was $32.4 billion, up 4.1% year-over-year. And next 12-month revenue from backlog was $8.1 billion, that up 4.0% year-over-year. Reviewing the balance sheet. As of September 30, cash and cash equivalents totaled $1.814 billion, and gross debt was $14.957 billion. That resulted in net debt of $13.143 billion. Our net leverage ratio ended the quarter at 3.52x trailing 12-month adjusted EBITDA. And third quarter cash flow from operations was $908 million and capital expenditures were $136 million, which resulted in record free cash flow for the quarter of $772 million. Now I'll turn it over to Mike Fedock, who will share details on our guidance. Mike?

Thanks, Ron, and good morning, everyone. Let's start with our full year guidance. We are confirming our full year 2025 guidance and are narrowing the ranges for revenue, adjusted EBITDA and adjusted diluted earnings per share and are maintaining the midpoint of our prior guide. We expect revenue to be between $16.150 billion and $16.250 billion, representing year-over-year growth of 4.8% to 5.5% or 5.2% at the midpoint. This revenue guidance includes approximately $100 million of COVID-related revenue step down entirely in R&DS, approximately 100 basis points of tailwind from foreign exchange and approximately 150 basis points of contribution from acquisitions. These assumptions are unchanged from the prior guide. We expect adjusted EBITDA to be between $3.775 billion and $3.8 billion, growing 2.5% to 3.1% year-over-year or 2.8% at the midpoint. We expect adjusted diluted EPS to be between $11.85 and $11.95, up 6.5% to 7.4% versus prior year or about 7% at the midpoint. Now turning to the fourth quarter. We're expecting revenue to be between $4.204 billion and $4.304 billion, which represents year-over-year growth of 6.2% to 8.7%. Adjusted EBITDA is expected to be between $1.033 billion and $1.058 billion, representing growth of 3.7% to 6.2% versus prior year. And adjusted diluted EPS is expected to be between $3.35 and $3.45, which represents year-over-year growth of 7.4% to 10.6%. And this guidance assumes that foreign currency rates as of October 27 continue for the balance of the year. So to summarize, in the third quarter, we delivered strong top and bottom line results as well as record high free cash flow. R&DS net bookings were $2.6 billion, growing 13% year-over-year and resulting in a net book-to-bill ratio of 1.15x. The forward-looking demand metrics in the clinical business continue to trend in the right direction with 20% RFP flow growth year-over-year and sequential improvement in client decision-making time lines. TAS performed well and delivered solid results, driven by ongoing momentum from drug launches and the strength of our broader commercial portfolio, and we reaffirmed our full year 2025 guidance. With that, let me hand it back to the operator for Q&A.

[Operator Instructions] Your first question comes from the line of David Windley from Jefferies.

Ari, I wanted to ask you about what I think you call your see more, win more strategy and how that has played out through the middle of the year or through this year in terms of contributing to the RFP flows improvement that you're highlighting as well as your win rate and how we should think about an amount, if any, price competitiveness you're applying in that strategy and how that plays out through the P&L as that business converts to revenue?

Okay. Well, usually, we keep the best for the last, but you started with a big strategic question. So let's start with that. Okay. Well, look, the strength in bookings momentum and RFP flow, I think we have to say, and we could see it in the industry in general, I think reflects a reduction in the level of uncertainty in the market environment and the macro political environment. I think there have been a few developments that have sort of helped tilt decision-making at large pharma on certain programs favorably. And the climate overall has improved. That's undeniable in our sector. So that certainly is a big driver of our growth. The specifics of our see more, win more strategy, which we started earlier this year, which, as you know, now has a lot of imitators, has borne fruit as well in the sense that we've been looking at markets that we previously hadn't been touching and had left some more marginal players essentially in a quasi-monopoly situation in those segments, and we've decided to go after that. The pricing conversation is a little bit overdone in my opinion. In a climate where market dynamics were unfavorable with a lot of uncertainty and less deals to be had, there was more competition on pricing and all we did in the first part of the year was to align to those pricing discounts that were being offered as opposed to walk away in order to continue to build our book of business. We don't see that trend continuing. It hasn't been an issue at all. Certainly this past quarter, the opposite. We've walked away from deals. And we think that the sector in general is a lot healthier in terms of market dynamics. The level of uncertainty has gone down and pricing has returned to normal levels. You had a question, a follow-up on P&L implications. Look, we have a $32-plus billion backlog and only a tiny portion of that was subject to a few discounts that we did earlier in the year. The revenue associated with those things are going to bleed over our P&L over the next 5 years, and we do not expect that to have any impact whatsoever on our P&L going forward.

Your next question comes from the line of Justin Bowers from Deutsche Bank.

So Ari, it sounds like the business environment is improving, funding is up, consumer confidence is improving. And both of the segments, TAS and R&DS are strengthening, at least on a 2-year stack basis. Is this a momentum that we should expect to continue over the next few quarters and into 2026? And maybe if you could just give us a glimpse of how you're thinking about those two?

Yes. Well, look, I don't have a crystal ball here, and I'm not going to give you 2026 -- this was a clever way of asking me about 2026 guidance. We're not going to do that here. As you know, we usually provide guidance for the year concurrent with the release of our fourth quarter and full year earnings early in the year. So end of January or early February, we'll provide that. We are in the midst of our planning process and it's still early, we're still in October. But look, what I can tell you is, we are going to deliver this year over 5% in top line revenue growth, which, frankly, given what we've been through, and the environment we've been in, in the past 1.5 years, 2 years, I think is a very, very strong performance. And you could see that compared to our larger -- certainly the larger CRO peers, we are doing very, very well. So I cannot tell you yet what '26 will be in the next few quarters. But I mean, look, I would be surprised if revenue growth in '26 is not at least the same or better than the growth that we are seeing this year. So I say that with a certain amount of confidence.

Your next question comes from the line of Elizabeth Anderson from Evercore ISI.

Congrats, Ron, on your retirement. I was wondering if you could talk a little bit, Ari, about some of the differences between what you're seeing on the pharma side versus the biotech side. I think you covered the biotech side nicely in the see more, win more answer, but just sort of wanted to peel back the onion a little bit on the pharma side as well.

You mean the large pharma side?

Yes.

Look, large pharma went through a lot of transformation internally in terms of their investment programs. Going back to the IRA, there was this whole phase of reprioritization of programs and reviews of their pipelines, which led to an elevated level of cancellations due to this reprioritization activity. That lasted for 1 year, 1.5 years, beginning mid of '23 and certainly continuing through '24. We see that activity as having essentially been completed. And we haven't seen any further cancellations as a result of that type of activity. So we think that the pipelines are now fully sanitized. Of course, there continue to be cancellations, but they are all like more business as usual due to futility or other reasons and nothing unusual. Large pharma, actually, the RFP flow for large pharma is very strong. I mentioned that our RFP flow growth year-over-year is 20%. And that applies to large pharma and to EBP equally. I mean, there's a strong, strong momentum. And again, that's helped by the more calming environment and perhaps more certainty around what's coming. And it's also helped by the fact that these reprioritizations have been largely completed. And the programs are now on the table are programs that our clients want to engage in and want to go forward with. Our cancellations, I always say, in recent years were about $0.5 billion a quarter, plus or minus a couple of hundred million dollars. So they could range between $300 million and $700 million in a given quarter. So a couple of billion dollars plus year in, year out. In '24, we had more than 50% higher cancellation than that, right, over $3 billion in '24, because of these reprioritizations from large pharma. That essentially is behind us. And year-to-date, our cancellations follow the regular pattern. I think somewhere between $500 million, around on average about $550 million per quarter I saw the numbers yesterday. I think nothing much to talk about. This quarter, I think we were a little bit towards the higher end of our range. But again, not because of reprioritization, it's simply normal course of business. Our gross bookings were very strong, very, very strong this year. And you could see that also in our $2.6 billion of net bookings, which were up 13% year-over-year, up sequentially mid-single digits. And the trough we experienced Q1 probably was the trough. We don't see that in the near term. So again, large pharma dynamics returning to normal business conditions, trending towards normal business conditions and biotech funding improving, which as you know, is a driver of EBP growth. And that, again, is reflected in our bookings and in our RFP flow as well.

Your next question comes from the line of Michael Cherny from Leerink Partners.

Maybe if I can ask a little bit about TAS. Nice growth against obviously a tough comp. As you think about the pathway forward, what do you see as the contributions you're getting from some of your inorganic advancements? And where do you see the best opportunities to continue to expand that business above and beyond your own R&D, talk AI, talk anything along that vein, that would be great.

Thank you, Michael. Well, you spoke about inorganic. I think we said 1.5 points of contribution from acquisitions to the company as a whole. And as you know, as always has been the case, the bulk of that is in TAS, although I think in this past quarter, we did a large acquisition that was in R&DS and SMO. I think that we spent $485 million that we spent in total. And most of that is one acquisition called NEXT Oncology, which is an SMO specialty in oncology, very attractive business. We acquired this end of Q3. So not much contribution in Q3. And the inorganic contribution to R&DS will be a few million dollars, I guess, in the double digits, like $50 million or thereabouts of revenue to R&DS in Q4. With respect to TAS, we didn't do much in Q3. And so I guess the acquisition contribution for the year, well, we did a CSMS deal as well, right, which is small, obviously, but since CSMS is a small segment, it was a large piece of it. So not much in TAS in Q3. In general, we try to buy technology companies, companies that can add capabilities to our suite of products, analytics companies. There's a lot of innovation, as you know, in the AI space.

Medical affairs...

Yes. Medical affairs, real world. Real world is a very strong -- real world evidence was really very, very strong in the quarter, and we expect that to continue into the future. So yes, I mean, for the year, again, 1.5 points, I would say 50%, 60% of that will be TAS and the rest -- for the year, right, 2025, and then the rest R&DS and then a little bit CSMS.

Your next question comes from the line of Shlomo Rosenbaum, Stifel.

Ari, before I ask you a question, I just want to also commend Ron. So Ron, I've seen you retire before, and I'm not fully convinced you're gone right now.

Right. It's the wrong word to describe Ron, not retiring.

Yes, you've dragged him out of retirement in the past, Ari. So I don't know. Ari, I want to ask you to talk a little bit about the subcomponents in TAS and how they're growing in terms of real-world evidence and consulting and analytics. And just some of the trends that you're seeing there. I know consulting often kind of leads the trend in terms of you see that picking up, that means that the environment is getting better. And maybe you could just talk a little bit about each of the components and what you're seeing and maybe what that says about the market.

Yes. So look, the growth rate in Q3, it's hard to derive big trends because as you know, Q3 in general is the weakest quarter in the year. But specifically this year, we had a tough compare with last year. What was the growth of TAS? Q3 last year was like 8.6%, I want to say 8.6% growth last year. So we knew we had a tough compare this quarter. But as I mentioned in my introductory remarks, sequentially, we're slightly up. And usually, because Q3 is the toughest quarter given nothing happens for 6 weeks in Europe, it used to be 3 weeks, then it's 4, now it's 6, and it's going to 8 whereby nobody is working. So I think that the performance this quarter was very strong. It was led largely by the real-world evidence, which was very, very strong. And everything else was -- obviously, data is usually low single digits and everything else was between low to kind of mid-single-digit growth, again, against very tough compares. Same for consulting.

Are you seeing a pickup in that consulting?

You will recall that -- I know you're asking consulting because it's kind of the most discrete, and it's positive in terms of leading indicator when things were trending negative territory, consulting went down very rapidly in the '24 -- end of '23, the first part of '24 time frame, consulting was down, actually negative. One of the quarters, I think it was negative double digits. But it's positive this quarter. And again, everything outside real-world evidence in aggregate was mid-single digits or thereabouts.

Your next question comes from the line of Eric Coldwell from Baird.

Ari, I'll stick on the TAS question here just to make sure we're all level set for the fourth quarter. Back in February, you guided to $6.3 billion to $6.5 billion. That was quite a while ago. A lot of things changed. But if I use that original range and I take out what you've done year-to-date, that would put the implied fourth quarter revenue guidance about $100 million to $300 million below the Street on TAS. That's a big range and obviously a lower number than where consensus lies today. So I'm just hoping you can give us a little specificity on what you're thinking for TAS in the fourth quarter, so we aren't ahead of our skates here.

Yes. I'm not sure, you're talking about our targets and then you talked about the Street.

You guided in February to $6.3 billion to $6.5 billion. And the year-to-date number through 3 quarters is $4.8 billion, a little over $4.8 billion. So that leaves less than $1.5 billion to less than $1.7 billion to get to the full year, if I've done the math right.

Yes. I was going to talk to the finance team here asking. I don't have the numbers in front of me. But what you were suggesting that TAS would be lower than our guidance, I don't see that.

Well, I'm not really suggesting anything. I'm hoping you can tell us...

Okay. We can take that on a...

Yes. I'm hoping you'll tell us that things have changed since the February numbers, but it is possible that maybe the Street is just a little high on the segment. I mean it looks like you'll cover it with R&DS and CSMS, but I just want to make sure we're...

Again, Eric, I think you -- we are delivering on guidance. Is that -- am I...

Eric, we'll help you with some of the Q4 details. But on a full year basis, there's been no change all year with TAS, that the full year CFX growth rates were between sort of 5% and 6%. So there's no change there. So we can help you with the numbers.

We always said 5% to 6% growth year-over-year, correct?

CFX.

CFX, correct.

I think you said 5% to 7% constant currency and I think I believe it was 5% to 7% on February 6 was the range?

We narrowed our guide in the last call there. So we're still sticking with the 5% to 6%. There's no change from the prior guide and no change where TAS is going to land in the full year.

Yes. Well, there's no change, Eric.

Yes, we'll help you with that with the Q4, but there's been no change.

Just want to make sure we're not ahead of our skates. I appreciate that very much.

And anything else you had on this clarification?

I had 42 questions, but you told us to stick to one. Let me...

I am going to give you a special discount, because that wasn't really a question.

Well, look, I mean...

That was like a commentary. You were trying to...

I appreciate it. So I'll sneak 2 in. I'll take advantage and give an inch, I'll take a mile. Two things just quickly. One, do get some ongoing questions on those couple of mega trials that you mentioned earlier this year. I'm just curious if you can tell us what the status is. I think one was definitely ramping back up here in the back half, and I believe the other was still pushed out until next year if happening at all. So maybe just an update on the mega trials. And then secondarily, Ari, in your prepared commentary, you highlighted some interesting wins. And you mentioned Phase 1 a couple of times. And my historic interpretation of past conversations was that you weren't really a big Phase 1 shot, maybe you partnered with some others. But I'm curious on what your involvement is these days in actually managing or even having Phase I CPU units. Maybe give us a little more color on what you're doing there.

Yes. It's a very good observation, Eric. We are seeing a lot of demand for Phase I work. And we are the network partners, we don't have any significant presence in that segment, but we are expanding, and this is why I chose to highlight a couple of examples. It's also, by the way, part of our see more, win more strategy. And it happens to me that there is more demand. Things are getting sort of restarted again and the pipelines are strong. And so we are seeing more demand, and we are ourselves being more present in the segment.

Yes. And Phase I in oncology is a little bit different, because you're not dealing with healthy volunteers. So it tends to feed your later business than other Phase I trials. So there is some distinction there. And that's what NEXT Oncology was Phase I oncology.

Yes. And then the 2 trials.

Yes, the 2 trials, no change there. We don't have anything factored into our fourth quarter guidance for revenue burn from either of them. So I suppose that's a slight change from what we said.

It's basically all pushed out of the year. And it's not contemplated in the guidance. Yes. Bear in mind that we mentioned this, what is it, like a year ago at this time because it caused us at the time to change our guidance for R&DS. These were fast burning and had already gotten started and they were interrupted. And so that caused us to change our guide for R&DS in the fourth quarter -- for the fourth quarter of last year. And so we had to mention it. We only mentioned specific trials to the extent we can, and we try to be very careful because we are mindful of confidentiality for our clients and so on. So we cannot say very much. But we do mention it when there is a significant event attached to one trial, in this case, it was two, and that caused us to change anything in our numbers. But bear in mind, at any point in time, we're working on a couple of thousand trials. And we keep building backlog, as you saw. And thankfully, we have had very positive momentum on our bookings, and it's continuing. So we feel good about that and it continues to stagger on our book of business. So yes, -- which again enabled us to continue to deliver and do even better on R&DS even without those trials resuming this year. Thank you, Eric.

Next question, operator. This will be our last question.

Your last question comes from the line of Jeff Garro from Stephens.

I want to ask more about AI and maybe I'll try and make it a 2-parter. First part being if you have any insights how AI is changing your customers' business models and specifically their appetite for outsourcing? And then the second part would be how is IQVIA using AI internally to deliver results for clients that may be a little bit more efficiently and whether you have any visibility into potential gross margin improvements from those internal use cases?

Yes. So thank you, Jeff. We've spoken about this in the past. And so far, we have about 90 AI agents in developments that cover 25 use cases, and we continue to progress that. By early '27, we plan to develop 500 highly specialized agents. And what these do is they essentially eliminate a lot of physical labor from the tasks that we perform for our clients. So internally, and to take the second part of your question first, certainly, that will help improve our margins longer term. Now it takes time to deploy, obviously, and it takes time to translate that into margin improvements. We've had great examples on the commercial side. We use, for example, AI tools to compare patient cohorts to each other and highlight differences in natural language output, which leads to improvements in cycle times from several weeks to a couple of weeks. We really have a lot of examples and it takes a long time to recite those. But we see significant value in continuing to do more with less through deploying agents within our internal processes. For our clients, I gave a number of examples in my introductory remarks. Our clients are very interested, of course, in using AI. So early, early on, before we get involved in discovery, there's a lot of focus from our clients in the discovery space to try to use AI to sort out molecules and try to identify "the most likely to succeed" trials to tackle a specific disease. We participate a little bit with some models and some tools that we have. But later on, look, the issue on the clinical side is that it's highly regulated, and you get to go through standard processes that are defined by regulations and you have to use the…

Mr. Joseph, I turn the call over to you.

Thank you. Thanks for taking the time to join us today, and we look forward to speaking with you again on the 2025 fourth quarter and full year earnings call. The team will be available the rest of the day to take any follow-up questions you might have. Thank you.

This concludes today's conference call. You may now disconnect.