IQV - Earnings call transcript Q3 2017

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Quintiles IMS Third Quarter 2017 Earnings Conference Call.

During the presentation, all participants will be in a listen-only mode.

As a reminder, this conference is being recorded, Thursday, October 26, 2017. I would now like to turn the conference over to Andrew Markwick, Vice President, Investor Relations. ahead. go Please

Andrew Markwick

McDonnell, our Good this third Isaac. are visible Presentations referencing Thank for webcast. will and you Bousbib, Financial and Thank Today, Officer. also will This XXXX morning, be call earnings our we Michael Officer; IMS call Executive quarter and the today Vice those call. joining President & during Chairman Quintiles following Chief Events you, be Chief everyone. on Executive With Ari presentation of website a will of Relations for section presentation be this that at you our Investor available on ir.quintilesims.com. me

business, results to associated XX, discussed Annual stated discussed the those differ and Exchange company's implied risks we Commission, I this filings XX-K and on materially the the by Form with our include during or Before which to due forward-looking SEC listeners uncertainties Actual that filings. company's call caution and by on would subsequent could filed management certain Securities information like are including from with in conference XXXX begin, Report statements statements. February the forward-looking

to that and point would impacted the the Ari I with our are not measures over and by in to be A certain addition, call I exchange also out substitute should global In measures included to as these non-GAAP foreign considered of a CEO, to now reconciliation fluctuations. comparable prepared financial and release measures businesses, on a the discuss press financial conference Chairman for in GAAP which accordance supplement turn Bousbib. presentation. GAAP. have year-over-year this call other we non-GAAP will with to measures call like like we been would

Ari Bousbib

IMS pleased had Thank report Quintiles Andrew, you you, quarter for Results I'm with or what QX quarter third joining we were anticipated. morning, than XXXX better for line that was earnings the call. team. strong in everyone. our a to good Thank and

previously quarter noted, and a you year year of the a had most steeper for more to glide stronger smoother the full anticipated, have was our had we our As because plan targets. was than loaded, path ramp backend will

Let's results meaningful combined as with X, took a consistent place three company comparisons discussing if by call, review XXXX. quarters the more on the making basis we're the merger last January

Third London grew was revenue quarter to Acquisitions development growth closed about growth. was by points clinical early revenue we and X.X%. impacted R&D last Solutions' $X.XXX revenue year. Solutions' million, it business, X.X%. R&D again where facility in X.X negatively our a was contributed

have development Commercial Encore, Encore the have revenue clinical year. adjusted the would of Growth impacted nearly down by was negatively had sale the revenue legacy million. company would quarter. grown early We growth number a been X%. Integrated was $XXX the X%. business. X.X%. the Combined Adjusting in business Quintiles commercial business, slightly Engagement the prior key versus solutions Services Excluding of solutions commercial EBITDA grew was in wins for

Let some me examples. provide

in We This pharma told OCE been client fact, quarter European end deploy our leading during investments over capabilities. we our the in aiming on our offering had countries. a we CRM and with the still in the recall you First, solutions new is of XX business, orchestrated deal first towards we will a track, year. third technology accelerating and or to you release seven-year OCE win, in OCE customer that are to re-platforming global engagements have SaaS MCM our

functions It not the current to to market. commercial that As integrate artificial CRM This We've other solutions the offerings differentiated our built intelligence OCE is collaborative just in is in client's learning and is the compared within exist a a operations. revolutionary utilizes to point tool various the tool. reminder, market. that highly machine

won team a Next, a in our our study for biotech. a multi-million-dollar business, a U.S. first kind leading of deal real-world with insights where

much label trend accelerate, approval product approach that regulatory a By for faster utilize indication only pace. the analytics-enabled data to a extension. expect regulatory real-world way, the new analytics our platform. clients' will differentiated for this such Century is a Cures advanced gain there XXst at and demand is to secondary Our approach increase This will Act our actions, tech will leverages It as for we insights. position EXXX

are Finally, encouraged quarter business, bookings. contracted by we another R&D in solid of

compared business the new quarter XX% third In XXXX. growth was fact, third of to quarter net over

you quarter will was the you merger Of will pretty last before the now in have for facing for Quintiles The recall, of R&D QX which solutions XXXX course, are abysmal. all revenue which as is that were recall legacy bookings headwind and you the noted. standalone results quarter we

performance the in the the then which XX since However, strong months book-to-bill uptick quarters our in ended has four XX, of resulted was an ratio, for X.XX XXXX. LTM September

the in approximately Next-Gen now Next-Gen is part have this. a post-merger continues of million market. to It big $XXX gain awards. We traction of

selected the who virtually no were last in full space that and top biopharma, a top XX for we quarter, business a liver are we us differentiated core in-sources two have to all done pharma, is R&D service years, of no causes this little past. top Importantly, cirrhosis. in decade, of work inflammation neurology has with due predominantly done a XX these with area compelling we we have clinical a for who of trial. NASH, disease three unlocked Examples with and won terrible nothing in proposition global trials the our their A quarter XX their almost R&D in work. They clients we pharma Quintiles accounts IMS oncology; the to due done within capabilities. Next-Gen or the of them This the winning that work global value with who Next-Gen during clinical include: chose which

be a offering CRO preferred to was us were for provider. able to the the also Our compelling, we client and displace picked Next-Gen study, so incumbent

But Next-Gen us we to traction more led I you and we savings with Now, our overcome last accelerate market our for quarter, our Next-Gen can in than to has this This, see of as investments plans. cost short-term headwinds space and our resourcing were in numbers, margins. as mentioned the able operationalization solution creates productivity for the course, initiatives. see

tech I'd dives forward an Mike this to Financial our McDonnell, With Officer, New utilize Before to to let are that detail. on and to leadership remind Chief you to our in November opportunity turning three holding over over that, businesses, case studies main a cross-section City like plan turn in it you Mike, We'll our show looking take York Conference We the we to I financials with our broader event. X. have demos. Analyst deeper in of team. We're and with to to also occasion this appointed through get to more me Investor

Michael McDonnell

you, Ari, good everyone. Thank and morning,

Let's review the quarter.

the company in at third As Combined comparisons last of center in meaningful which range we revenue to quarter. the the like quarter company combined guidance high-end previous attention the the was quarters, your more to was of provided call I'd page. billion, $X.XXX

Solutions our constant revenue revenue quarter X.X% currency. early FX reported When for Europe development actual constant and during impacted X% by decline business Third in revenue early R&D $XXX $XXX X.X% X.X% closing facility service X.X% XXXX. a at and clinical the again reported grew rates at the grew a in due of and Growth adjusting to clinical of X.X%. was currency. constant business, growth currency. at at R&D development of million, grew million, X.X% Solutions' Commercial was

X.X% Commercial the in business. Commercial the was constant Solutions Ari Adjusting growth Engagement revenue actual impacted at sale and mentioned, Integrated currency. was legacy Quintiles' As rates rate for Solutions of Services X.X% Encore million, Encore FX growth declined by of $XXX the at X.X%.

quarter. to share profits, was was GAAP million GAAP million, $XXX $X.XX. $XXX earnings and diluted $X.XX the per in per now income third was was share Adjusted EBITDA net Turning $XX diluted million adjusted quarter adjusted was earnings and net income third

I'd let's your of take was to results. call a deferred combined the meaningful year-to-date in look Now the Year-to-date billion, center revenue page. Again, the calls. the $X.XXX recall revenue more you'll to highlighted company couple the we at on of adjustment last comparisons attention like

On constant quarter nine was X.X% acceleration first Solutions Year-to-date constant and XXXX, impacted X.X% also business. million, For for X.X% million. adjusting at and on early X.X% segment in in growth company the of by combined clinical a Commercial revenue negatively currency XXXX. of one-time of decline growth combined Again, at FX X.X% second in impacted the actual service R&D FX revenue $X it and company the by at $XXX revenue declined Year-to-date Engagement by impacted X.X% of IES $X $X.X Encore. sale and Solutions' million this constant X.X% rates. grew basis royalty Services currency billion, currency basis, at and grew X.X% at reported. was reported. grew the revenue growth revenue Integrated the a of a months was of reported. revenue When year-to-date Solutions Commercial development by $X.XXX billion, constant impacted

to new and Solutions' backlog. R&D Turning business net

the ended September $X.XX For a Solutions' bookings as-contracted We performance in R&D the XXXX, quarter. XX, solid billion. months were had XX

backlog of and months. into had we backlog Our next quarters. at expect backlog the the convert of $X XX QX the good approximately over progression contracted was revenue billion We've $XX.XX end to four last over billion this

a Let's quick look. take

largest As a know, the backlog industry. have you we in already

signed now implement closed backlog As last reviewed to decided a merger approach. year, commitment conservative or new the require reminder, our contract in to written, business record backlog. We we binding our a and when policy more a

We our now conservative are more approach $XX happy to billion, using bookings. to once be back again about

was per was months months EBITDA first expanded margin million per was Adjusted of Adjusted share Turning in now points. months the GAAP nine to $XXX income first earnings the $XXX net $X.XX diluted nine basis our first earnings XXXX. first for was XXXX of profit million. and for and months share nine XXXX. $X.XX billion EBITDA $X.XXX of XX.X%, Adjusted adjusted nine of net XX the was for the XXXX. income of GAAP diluted

and Let's debt in about minutes balance sheet. cash and on spend At resulting few the billion $X.X September cash $X.X our XX, totaled equivalents $X.X was billion. net billion, of debt a

was cash flow ratio Net months million. the and quarter, from operating leverage was our third activities flow gross expenditures times. free were Our adjusted $XXX ratio cash, leverage million X.X trailing X.X in Cash was was EBITDA. XX times $XX $XXX of million, capital

X mostly notes a euro X/X% that notes X/X%. of $XXX we You were million XXXX worth retire due We euro XXXX. the saw at rate X used to due existing the of that proceeds quarter, during senior issued

toward B open total used revolver. Term our a from for private primarily $XXX We also our during of debt refinanced million $XXX $XXX we of equity $XXX shares our during market sponsors of the quarter, the QX. of repurchased worth the September, million million an repurchases additional and end in raising which million, incremental the of Loan an to worth shares down repurchased pay was our We

Let's guidance. to now turn

expecting in As you always QX The a full-year quarter. quarter numbers. and smother allows visibility the trajectory know, were over we fourth performance strong a to better the fourth for

XXXX, today's of For end the quarter constant through the FX of rates remain fourth the assuming quarter.

revenue between EPS to $XXX billion expect Adjusted be $XXX EBITDA million, adjusted million and We diluted and between be to and $X.XX $X.XX billion. between to and be $X.XX $X.XX.

updating tax which our now our to guidance, XX%, are rate approximately previous book guidance approximately is full-year We be was adjusted expected XX%.

quarter, execution. delivered by So strong in a we operational summary, solid driven

continues gain previously nice wins accounts. and Next-Gen we to traction had locked-out with

solutions business, OCE multi-year first secured global technology deal. Our their

to We look price of forward merged and XXX. as be to company, Q&A. capstone merger honored for the at to that, our Analyst many conference. a X our like you open the average we November And were the in with course ask lines would I have of Investor seeing of year repurchased since operator please as included a now billion to an first I at $X.X to our and nice shares of S&P the $XX

Operator

the Jack [Operator with Instructions] Thank you. from Barclays. comes first line Please your question question. And of Meehan our proceed of

Jack Meehan

momentum want revenues given great then, funding? XXXX, win? just the do general potentially Hi, in you weigh And Next-Gen, in R&D could health with good just I Ari, of you Solutions' accelerating R&D how on thanks, morning. the to the about start, think

Ari Bousbib

funding. R&D Jack. it's for a question, mixed terms Thanks the in Yeah. bag of Look,

has pulled there their trials. perhaps would as - competing With context in-sourcing and pricing always, increasing past market, and comment the based or in of also, pharma, funding. of otherwise are of developments emerging and bio-pharma, on of same and that studies portfolios two, year respect development. evaluation are really for in a to As see being the at the rational time, we the structure in I the cost add large some the that are parts more But just

Now, Next-Gen and by this, it's is largely because new different. unaffected

the pharma that a CRO of won the largely mentioned on status with a capabilities. remarks, not we previously had In fact, any And as did essentially back I my outsource preferred introductory in large Next-Gen provider that's work. -

the it quarter, notes, best but of seen not some a long your strong time. It's if bookings it's are math are a of asking models a was you With have quarter. very with quarter. bookings to - the you fact, we than and some combination book-to-bill with of this accelerating, clients. nice will Next-Gen unfortunately. provide in In had one-year even I've some in quarter. of evaluating And had joint the we resources. partnership again, colleagues' particularly, us clients of type some strong little our we hybrid this respect more revenue bit Generally, And we very with actually of cycle The is not your bookings their notes again, capability quite correct. the to bookings those one

acceleration we had the go bad last revenue, so, with have still cycle, bookings And through we those year. of to

cycle so higher Thank through you. got to of will the this the probably previous quarter seeing - bookings the start end XXXX, And And and through we of we the benefits benefits that. the one. see we of

Jack Meehan

Thank you.

Operator

comes Wells question of next your question. from proceed Fargo. with Tim Please Evans Our the of line

Tim Evans

you. implied about been if the that we Ari, QX billion was have $X.XX midpoint. at look at the it quarter, your last guidance Thank revenue would in

guidance billion out FX just that midpoint, lower Now in did help is at the the admittedly, quarter. slightly the but $X.XX you

to against curious quarter? your went way, So other you I'm what what just last expectations the relative went

Ari Bousbib

is not has essentially said not will we we to is helps quarter, It so has we be to year-over-year. to the gave, where respect guidance the changed. Yeah, when expect that guidance, it FX helped - the relative much with But here. gave it third we

higher, have fourth So quarter, for this every actually for our on metric: than implied EPS it the year. gave didn't revenue, guidance - us. never implied help came but guidance - came The because EBITDA we We the we the and guidance in quarter. higher we for the

since we add came we that talking for up better Because quarter fourth if And billion. year yeah, higher, derived than subtraction, at, think about a of lower you we think what you expected, have been given year guidance we everything higher. else the broad have would the to guidance have the for then at numbers, QX - So, little would perhaps $X ends is now the quarter then it's… our being visibility, assuming same, a the lower the third is than end, billion have for was in I came revenue $X.X range, if the would little again, have I the I bit by imply you think FX same, and QX

Michael McDonnell

[aXX.XX to XX.XXa] [ph].

Ari Bousbib

[ph]. to Right, XX.XXa] it's [aXX.XX

that course, things we business providing about Encore $XX add of you the of with to relative you And million to is we're the change, that for original revenue. Again, out Encore. quarter. fourth If up numbers year the the the if date other - sold the guidance, there today guidance that that takes

to you entire billion which not have year, to the we the we had go full $X.X right, changed guidance we gave, revenue. back the So year not for which $X was if - billion

at are since business. XX.XXa] then revenue took out [aXX.XX Encore We to but now $XX from we the million [ph], of

strong number the So higher, actually know about this last enables the quarter. clarify. apples the on performance me It reflecting thank I speaking for the you're again, midpoint, and that you - focus guys midpoint, is provided to question. to Yeah, we apples, you if quarter we the

Operator

William line question. of proceed question your comes Please Kreger next the of Blair. John Our with from

John Kreger

acquisition rate the the for been what have quarter, company, X.X%, that it Hi, My constant looked about organic would much. growth we in if on whole currency basis? at thanks contribution an very question

Ari Bousbib

overall the really Acquisitions about on rest growth. or acquisitions. it's commercial a contributed side, on about by X.X was growth the commercial the R&D. to than in And the The side point way, from was less X.X

quarter fourth focused TKL, company in small we bought that that You might CRO on dermatology. last recall year a the a of called

so acquisition the driven Solutions' to And R&D some of contribution that's growth.

and of study little and to a was paid of called We startup, though acquisition platform very in attractive Solutions. not which a but payments and R&D revenue that and the of the in the quarter third We of nevertheless time has, included bit, we an revenue, low It's it. contribute bit bought, lot a huge highly a as it's spend DrugDev, middle quarter. a for company money it's attractive also our clinical of did differentiated some it trial the business. well And very in technology Solutions With But little little optimization. the in midst it it's it it revenue. the contributed revenues, bit R&D for the in this bulk is tools of actually quarter think

gives Okay, you hope that I more helps color. and

John Kreger

actually Can It think my the a and on does that's sort the does call us talked last latest about you acquisition clinical just build maybe tools. technology out follow-up. and of suite to data sort what's to you a update of of initiative that segue plan that, an accelerate good Ari, that? on I

Ari Bousbib

The with internally. that. answer building is, We're does collaborating it tools salesforce.com. We're accelerate also

And based you So common these more. us are will tools on hear a on platform.

tool, of Wingspan, share I business, I'm for in startup about of a can a more You highly which you acquire plan processing. forward small in called of attend. initiatives, to and regulated but really very DrugDev, demo detail payment we to conference that because investor these that and some more hope looking couple and weeks, the we might tools much a study company area which management, with recall, did complementary tinier the is is the content

John Kreger

Thanks. Great.

Ari Bousbib

just accelerating question, wasn't there - anticipate. But - investments are I your we and are also that actually if this I we just add may,

on And we anticipated initiatives. productivity synergy ramp and of faster accelerated our and the little a can afford because going on our we feel are We that investments.

Next-Gen compares we So because would fourth just expansion. in do, we quarter, Thank again, expansion, we margin we have are And merged company think, investing the you you. it's much little clinical margin still I year-to-date, XX are around probably hard that net-net margin we weren't year-over-year even though as of points suite in the maybe little basis of see to will as you because the to. bit but note, are expansion largely not referred but a bit technology also a even year, last and

John Kreger

you very Thank much.

Operator

question your RBC. question. Hill line the with next of Please comes of Our proceed George from

George Hill

the advance process Did evidence sponsors, with lot other CROs try IMS and to replicate merger the trial of real-world sales a or… the around we've and late-stage seen to

Ari Bousbib

don't here, but Who Dave? I that is on - is know, going have this? we what's a

George Hill

George RBC. Hill from

Ari Bousbib

We sorry. We you I'm your were - missed of missed beginning the mute. maybe the on question.

If mind back. the And welcome way, repeating. you by don't

George Hill

try of space? Or - And resonating replicate your doing other compete been clients? or that you noise message announcements? an It's the you It The sales now. either selling do to through are you've around is was have the into other sponsors trial seen seems worry of evidence, sales as types be the real-world about good given kind the there's like like guys and close differentiated space. on where feel getting through back. guess, guys with to I environment or of talk in marketing emergence late-stage process your competitive you the what and through merger message about a offering, of CROs, in question what partnership I you around and just, you're can

Ari Bousbib

Well, busy, is technology gain and and frankly, validates years it catch-up experience yes, of everyone. the and have we think yes, truly unparalleled so strategy platform, datasets competitors doing ahead our that's and - partnerships still truly good, And we on. elevates our of We of are curve. and acquisitions kinds the for trying resonating, it to undifferentiated entering

and interest yes, data, is my have trying of to regulatory demand. to mentioned message the actions noise. though, I increased This well, insights. that, have frankly, lot the the when are we new Act, that course, secondary XXst People we we say, onion, lot data real-world also which prompted of the by starting we is remarks analytics indications see utilizing Cures think, I in technology, about for believe, of a to and peel a Century we for existing see see are there's we true find the So drugs, in always positioned uniquely resonating, difference. you'll also demand you provide,

double-digit, study in on So rate double-digits we real-world growth the actually long-term IMS the at - quarter. business. late-stage historical real-world business grew business. with the Quintiles business consistent certainly It's see in even And quarter for that the legacy in grew the the

On synergies very so we outlook - business whole we and very go outlook to our market, there. on to how strong, continue for the see remains the positive

George Hill

cycle? steady? will shortening the Maybe generally any Okay. Are follow-up on just be relative seeing a or lengthening selling you or selling quick to a cycles competitive follow-up of environment

Ari Bousbib

and No. issues, is of largely high regulatory of aspects lot as pricing, and by cetera. process know Because, it driven the it's driven, you study, the by idiosyncratic clients a safety, et

don't any competitive we that's moving So due or pressures. to see acceleration delays

George Hill

the color. I you. Okay. appreciate Thank

Operator

Thank you.

Ari Bousbib

Merrill Our of of comes Derik next the Bruin America question Bank of from line proceed. Please Lynch. de

Juan Avendano

Hi, Juan of on this Derik. Avendano behalf is

generation pretty all closing currently what of orders we actually the you been You've backlog, they this built, wins of residing wins Next-Gen every is that and those your to orders are haven't that that willing have from revenues next percentage us the been or you that. quarter nowadays, is tell still burned. would at appreciate are this be Would diligent

Ari Bousbib

it has that into look Yeah, it's Today, bit very X%, it's we've I get that far. Next-Gen into but maybe about backlog, And it precisely, X%. we mean, is million the quarters say of to How than high-single-digits disclosed a time like all that awards have so little a - is the the I'd in merger think, I would revenue, maybe so contracted. worth of I what disclosed contract. of X%. said, of we that approximately, be translated of more the which cannot it's $XXX much more About look I approximately three to since awards, three of - awards. little always quarters takes disclosed. the

Juan Avendano

quarter. just that up the M&A Thank clarify should quarters was future in in M&A? that Should expect we around any run And rate you. contribution the of X.X additional on about then absent about that be Okay. to coming

Ari Bousbib

Yes. that's X our of we've our that acquisitions growth. X we part We've to said of said always guidance, present points

can deals could lot of rich a very not. it these end There be or a quarter, lumpy. where closing Now, be we up

point quarter this of to happens in the be and half, what in expect. a So right middle usually we

You could than less where quarter, have a one. it's

You It's could general, have is But to than generally X anticipate. on quarter, what a more it's we been in historically points has two. X the commercial side.

Now benefit has or less on The R&D been this rest been I the commercial on R&D. as quarter X.X past about mostly And of was growth the side. than there point came the side actually from X.X has acquisitions. in said the point, on a

Juan Avendano

you. And may capital I your lastly, priorities. Thank regarding if deployment

been repurchases. the should IMS in, now perhaps, Merger, that we But bolt-on acquisition you've lot an You've expect annualized of a uptick definitely of M&A?

Ari Bousbib

look improve look, at suite case clinical offerings we larger away, And we and large of us disconnect a there With such moved again, acquisition, at it. wanted capabilities, No. course, the to very two, to aren't and were out commercial many next mostly up. the the strategy at what looking we're that. all in one do and a when pay. because between have to We're TKL continue opportunities, improve that It's bought behind we unique But we're side, CRO. like buying, acquisition of acquisitions, whole because case, in not there just Number - so always small applications. just respect technology them, continue we building every we We move clinical course, we to of - a they felt based buy. that. or have away, in give to but an might to centuries we'll moved trial single our that we the have we processes, while we come and and buying looking There obligation when expectation, to was - of are, we're a valuation is prepared the we to number we've on our companies can

very So allocation, have discipline flow. in we'll continue lot be great we as of is you which we cash problem, a a capital know, our generate to

effective We from generate tax may And repatriating cash cash divestiture. a time-to-time are efficient from very the we in manner. overseas

operating combination have cash today, our and an So the we net appropriate capital characteristics. type between for our our X the is before of it's risk have communicated X.X, we anywhere our to flow, flow and of we which efficient of leverage Plus tax cash type a and you feel that structure repatriations. that profile, business

the rate after Given environment, X%. just of is average over our tax cost debt current again,

for pay be with will uneconomic us really it So extra to to - debt down our cash.

So absent X%. X% absent to internally, incremental or acquisitions CapEx beyond

underpriced way share a see You're return to feel us efficient great an is to value. we do our we going is cash continue to very which actively and repurchase, is to shareholders, and believe stock the

Operator

Please the Dave with Jefferies. from Windley of comes question. of Our proceed your next line question

David Windley

I Are that the up of I your And Hi, under you've trials perhaps this But applicability is strategy of the at time then percentage. Next-Gen in the I see, thanks. think, data see trial you applicable to at, how started talked point, since about you've the think broadly XX% integration do universe that to sales say, with think, maybe you kind the you wondered belt you funnel? and in that early Next-Gen. process Good morning. of would your

Ari Bousbib

population plan more to is that otherwise, our the site Thanks believe is, to this pipeline demo is the accelerating since case or a of patient enrollment. the of upped a through again, of the couple one patient diabetes, and a conference - so And see number stuff, what's all we've trials. attend in a I that Next-Gen where the XX% specialty Dave. capabilities is CV we of again, complex is area, you'll and tight go value. about very invite you scarce. very and patient the of weeks, more identification XX% today, that in investor question, The Yeah. And the studies, merger because for And to are to applicable number reasons what molecules we the oncology

to don't I don't It of it's that need deploy on patients tools, not the XX% value finally why great can that we have has the simply But say to to data, where not, generate a those think issue behind, Next-Gen of in existing that for CRO that based in add to of therapy an not it's - no to are pipeline trials. brought well-known that applicable Now including where should we I you are, we XXX%, applying the in not doable. existing XX% it's and in that's because I'd falling recruitment because pretty replace those empirical - it's was is the it's think the the underperforming. balance complicated, the ongoing we can that it we trials, portfolio. Everyone sites studies were and is think also tools we reason area. where value knows

but a resources So in great, of bit and that distraction so in delaying, of been it's terms been terms little of actually has on.

actually been ramp had of we've So the Next-Gen. in we more recruiting terms faster anticipated and on than

David Windley

backlog of noise quarter? and kind would totality still - of conversion to shouldn't a now. flight to backlog say my are because I influenced the that interpret going in has a on mind. projects that my That's off you the segue. it over existing the great that read last to couple application a be actually quarters, Or about question that bounced in existing And your backlog. something of backlog was I'm first data taking in bottom thinking application the and it if Is that. follow-up And has You around wondering, of in

Ari Bousbib

in it's answer there the would real dent. Yeah, the but I think, trials rounding. maybe I make enough Yeah, latter. a mean, in aren't the to it's theory, yes, be

have We $XX billion backlog. plus a

So always very a large to This company. is - there business to large very it's our competitors lot or a this a company. company - one is is it's in hard of because compare segment another, our

our We time. to lots given even take at today, and trial. have backlog much doesn't trials But a it resources, point huge in any referred of one

conversion certainly, accelerated bring yes, that, we so, Next-Gen. And in is revenue when

yet. in hard again. see on the that impact - that numbers, in over seen and over Just it aggregate, it's we've conversion Well, to has the

David Windley

appreciate any and I geography capital from tax if helpful. that think cash, running whether to you on cash with limitations of how reform quickly. and ex-U.S.? question, matters very and that's repatriate comments last to about your deployment I'm One ability your wondering, you regard into to you're potentially Okay.

Ari Bousbib

know have, good think run those enable that of we in cash. past, do in would an that. to take reforms happen way. advantage a we is one better it's we'll in faster as course, there quite year. in Yeah, a predict us you the but and point, a days, tax and what of And I these limitations not repatriated this know, we've to do hard got manner a we bit But of even Obviously,

So, I'll Mike an opportunity give answer I'll to this. - maybe

Michael McDonnell

Yeah.

as And like watching at obviously, U.S. that we've of the make U.S. corporation our repatriate of to we So repatriation billion, cash and obviously, had Ari the watching just merger, can since amount about indicated, Dave, decreased end we're tax continue that $X the a And to we'll as that can. And reforms tax And more quarter, about we're repatriated $X.X we much majority only the as we is efforts the every rates significant efficient. of the are in overseas. other tax efficiently extent the and reform. on a tax that billion, hand,

we'll watching if we're that, So to upside through. were and hopefully, that give come

David Windley

my appreciate questions. I to you. Thank taking Super.

Michael McDonnell

Dave. Thanks,

Operator

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

Eric Coldwell

to question for you the it. going have and not to today. bite something here did tongue is Thanks ask make all I do but honestly Ari, want book-to-bill, on comments to me a said my

Ari Bousbib

Great.

Eric Coldwell

move And here a for and a space bunch we're long that quarterly our with the have middle stuck I a of know, in you're rut. of but the kind you guys covered you're dealing time, from figure, away trying - to

Ari Bousbib

Sure. Sure.

Eric Coldwell

X.XX. bookings said, actually our But put the if year. least I then what I XX% think, you thought the if it model last me tell a book-to-bill interpretation a third of that's based up were And But you mathematically at little of previously can is or book-to-bill correct, on year-over-year versus and around was incorrect. correct our better. this that of said, would quarter quarter was

such give of the out. I'll hoping finally, an that go can us rolling and just to of you peers I'm it's the then sort with they topic Quintiles little And from deals backlog, color. ahead see and from maybe traction of backlog the So Next-Gen important investors with for not you add a versus as but I more big currency the on, could impact bigger influence my so two mentioned, number ask a foreign know revaluation had acquired probably a that try us give well.

Ari Bousbib

thanks the for question okay, Yeah, think I the… and

Eric Coldwell

you. Thank Thank you.

Ari Bousbib

to to the by it's an we We that quarter a it to in because quarterly off it you numbers and under also the we enough what is understand bill made so. last we then this given to had given we focused to you that get once going that said, the we do clarify tried and way told the obviously, book feel merger was it in forward. previously thought while and appropriate since thought points Look, exception quarter, as method was enables you you we we appropriate any

can it's - Now, have when to during FX set math is fact skew simply is quarter implications, not the a every the every you FX And tell look quarter, FX in then single also it's you, of where simple at you're day FX I because right, also at numbers. number. the we the And of end the quarter. average revenue revalue the different the backlog the

a are numbers more to the So the se interpret trend per hard is in quarter. important. And

are backlog change reflects for that's FX That about not the quarter. in tell going the what adjust FX. that's reported a it's now, - what And the you gives X.XX I'll going and that in take do in have X.XX simple assume revenue, you to last-year Now, the okay, of that backlog, sense quarter, the math you business, you but future is end-of-quarter the the you numbers, do thus what you minus of is, all for forward, that if it backlog the you include at the if in that book-to-bill numbers. then match the on then understanding in terms

in should comparisons you want to calculate gave you probably look you progression at at at different you look if to in Now, numbers going look And the numbers across terms quarters you X.XX. the that the if you do quarter of and this we past. we believe that

the the the but for between we - so X.XX X.XX number, single to and if real answer your in every neither as quarter number. X.XX, take you that - from question, suggested, Now, a out on closer to is all FX

enables the manner in that you clean as we a So as best compare can do. to quarters

Okay, the X.XX between the and somewhere X.XX. so

in code. said answer the yeah, yeah, are ZIP you your you - you're is, X.XX, So it's the question,

and you it TKL I about the largely asked told was business, the the in contribution Now, in TKL is also acquisition you R&D acquisition. quarter what was, backlog. Solutions yeah, of course, acquisition the those affected for

Eric Coldwell

hear - great. I to you me? one, just That's last want And can

Ari Bousbib

Okay.

Eric Coldwell

me Can hear you now?

Ari Bousbib

sorry. I'm ahead. go Yeah,

Eric Coldwell

yeah, X.XX and X.XX Okay, interpretation? X.X, X.XX I but quarter this quarter without the FX that the with, Last the to was want a clarify. was just and a FX right with is

Ari Bousbib

X.XX. No, it's higher going the telling number. it's exact higher in but X.XX, X.XX - I'm than X.XX. and with just to range the than the I'm stick you It's between

Eric Coldwell

so Thank much. good it, Got enough. you were

Ari Bousbib

Maybe question. one you. the Thank last for Thanks question?

Andrew Markwick

question, Yeah, time operator. for we more got one

Operator

of Okay. question. from our of And question last SunTrust. Please the proceed Sandy with your Draper line comes

Sandy Draper

in. me squeezing for much very Difficulty] [Technical

[Technical yeah, side. that As you've Difficulty] usual, digits the historically the on got Ari, [Technical but about… side, development the commercial of business questions single some Difficulty] headwinds, lot

Andrew Markwick

our to again? you on you Can struggling we're Sandy, start hear end.

Sandy Draper

Okay. me? Is you better, can this hear

Andrew Markwick

reception. if It's you of kind muffled, I bad got don't know

Sandy Draper

understand… try and if can't have I reception. bad I'll may you

Ari Bousbib

Go Oh, that's better. ahead, yeah.

Sandy Draper

commercial is on so Yeah, my the side. question

improving development got you. accelerate Difficulty] a business indications are would Difficulty] pretty that's longer Ari, low You question maybe that accelerating. or is any that drag best-case mid-single-digit this there signs My [Technical that, going you thoughts - on just thank to some [Technical is term, on side business, be [ph] clear helpful, lassy and the the side about clearly and commercial on some

Ari Bousbib

of just misunderstandings, quite together, not we I'm of to your legacy perhaps, of out cut if all I in are missing company you the questions, of But happened. gave best aggregated businesses. sure revenue, versus understood of have we each businesses, R&D because your few that some since commercial IMS the things development put your words. into understand Quintiles want legacy the we side asked out the one I when as you're just But off again, And few commercial contours in businesses. of the will commercial spirit being clarifying, we if And you as we house then, of I that and commercial Okay. point terms recall you could, side, the about correctly.

from $XX a about total. revenue commercial we business It of R&D. trials move since was And was there clinical First, small million IMS. then to technology that at in

$XX contracted from small which that And so revenue. also know, sales actually second CSO business, was XX Encore to there million we we was And Europe, or Eastern which Secondly, in IMS finally, - of more move IES. revenue legacy the you business sold business, removed as than of million $X the half.

and versus you million that the business between of Encore looked and businesses our business like, we of companies commercial was what lost what transfer So told out commercial business. the commercial $XX the merged it when sale revenue of the

commercial, see robust growth. of absent you And to these terms see we the that as adjustments in actually that will starters. in growth So even continue

has of to core that annually merger. Your been X% of was growing two performing points exactly same the beginning the it's business And historically since and one been of IMS about the at acquisitions. inclusive

acquisition range, quarter the has there So with more no in as is less is And maintained actually changes X% merger. relatively at so growth since I good type the contribution which this all. minor, told been you, organic historically or usually

the question. was on one think And I color to that is your there So wanted maybe question, more revenue. just last I exactly provide question, but more commercial

Andrew Markwick

we think got person the I in one Yeah, queue. more

can operator. take we one more, So if

Operator

of the from of question. question Morgan. our JP Yes, with comes your last proceed Please Tycho Peterson line

Tycho Peterson

couple explore last Ari, in I thanks. of price fixed the Hey, up This of concept the a little come bit to want contracts. has quarters.

rolling on fixed curious contracts to of the how can commentary is price and you fixed out you much on are if Just as any now price? backlog where give

Ari Bousbib

$XX It's not Yeah, look, see, percentage few large to say, let's deals, a the than, it's want I really - the would million. of I less the backlog. platform okay? is

really started, fraction, we a because okay. it's fraction, So just a

XX% okay? said price, are We're though. is give call rough how look to business about what third, far applying anticipate small. Maybe not to a our growth But we of that, of a a that fixed very estimate. is going portion new we of have And Next-Gen disclose I to going it every to it's we fixed so of much this at. time. Yet, this exactly previously So you okay, is

we about So to win XX% we of over of And hope time assuming that that's third of every stuff, we and will be - as I'm doesn't the to then I apply that again, the XX% price. pipe. time. that, about a of XX% said, that fixed look pipeline But mean new at, to what, Next-Gen

clincher It lot that a new the deal to of a often more of are are end, our not it is models. risk. traction, I we are experimenting and don't we with cases, fixed fixed said these are fixed is otherwise take price. work price and because we And Again, capabilities are want interest. up-front hybrid. to willing though, sell we separately. then price. There data we or sell a at we seeing But be right, Now, that's of other is services, case are lot technology before, That we a the

Tycho Peterson

bit being and calling about offset cost right that just just a the for the way on quick investments would Next-Gen the XXXX weigh year? Is of then clarification, on synergies a next on you're be just the from follow-up around to you Next-Gen think bit that CRO kind in whether little a investments development. Okay, it by the to development thinking or incremental could I'm ahead bear integration? margins a margins, that

Ari Bousbib

Next-Gen Right, are investments bulk. the so,

have the we You remember replatforming. salesforce.com

investments of the also also the business R&D. the of have accelerate we our all recruitment we we made. then And on development combination on So, try are that to And commercial activities to that investments. had side salesforce

costs software licenses. but we while, costs, have cannot a year, - maintain facilities IT carrying carrying cases We result are the redundant These adjust-out. We've additional merger. systems that for we the are to redundant as people, in additional throughout where been a and these also are redundant costs of

of as be other one transition we one. or to the All maintained new to a that or needs

cost It's we a it redundant creates bucket taken we specific and cost, that not so, out because one-time it take outside cost. it's parallel just and then been goes of out a out, that a it's And time. away, when kind of merger cannot over adjust

that, headwinds. business out year expanding are So before, to pointed said, in we goal the have quarters expansion. and not to margin an be I is as anticipate I the of all XXXX I as of these mentioned. not that don't you be I where have or might Listen, expansion. all the There we will revenue like certainly my But to exception Despite just other. that despite some growing and margin have to all that I'd before expansion date are margin say margins, investments the one

Tycho Peterson

Okay, thank you.

Andrew Markwick

I Okay, have think that's all today. we for time about

us. be take look questions earnings have. you fourth for rest for XXXX We'll might you call. to any on follow-up we with time to forward thank So speaking the Thank of the to our quarter available join you. taking you day again And the

Operator

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

IQVIA (IQV) 26 Oct 172017 Q3 Earnings call transcript