IQV - Earnings call transcript Q1 2018

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the IQVIA First Quarter 2018 Earnings Conference Call.

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

As a reminder, this conference is being recorded, Wednesday, May 02, 2018. I would now like to turn the conference over to Andrew Markwick, Vice President, Investor Relations. ahead. go Please

Andrew Markwick

function. our couple Executive during Good will Planning the first Today, be Tina. the are IQVIA Thank for to months on of Senior and Events Michael call you Bousbib, analysis Officer; call, Relations Chief to webcast. Thank Nick this planning a also at Analysis. that this visible and presentation XXXX morning, Nick following our This earnings company our Childs, our McDonnell, Officer; Executive those quarter and we President, Investor today joined website lead President referencing be call. financial joining and & presentation of for Chairman Financial a Financial you Presentations be on you, the Vice Chief everyone. of Vice and ir.iqvia.com. available With will and ago he Ari new me will call section is

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

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

Ari Bousbib

everyone. we above our earnings Thank morning report ranges. and with pleased delivered guidance with good the Once am first strong this to XXXX numbers we results profit our of in call. you, I momentum strong XXXX. Andrew, revenue you quarter and continued first momentum, for We XXXX quarter Thank finished and again, financial joining

review Let's the quarter.

already we XXXX the into and growth last under out I once were results the delivered in and new see like extraordinary to standard good bridge am to enter they we full compared we to as full year high XXX the work to now the As both a able to same following gate for last to XXXX. able accounting of precision second in degree today of to able our forward. team are our acknowledge merger, of again. finance first The performance numbers very pleased and also ASC would our change I going we're the been base release organization earnings quarter's provide the financial able that standards transparency year. have

was our First components. quarter revenue than driven X.X% guidance revenue was grew The equal three of and bid X,XXX,XXX,XXX roughly by borrowers higher range.

as driver I we revenue upside that increased of year are entire was through will to upside full flowing the adjusted well. which organic the First, operational our guidance. this bid organic note EBITDA

increased through are to entirely revenue about Solutions the also which in anticipated in full an guidance which segment our million to the we higher little year at third, win $XXX is and quarter And guidance. due came of phasing FX range which our than our R&D Second, timing. data pass-through had for a we flowing versus

grew the any profit. segment The which adjusted some FX mix have currency FX we had we revenue of had upsets down Solutions which services XX.X% X.X% what performed. constant no reported and reported that's this You where Commercial is better below work as have EPS quarter Integrated material locations quarter, and first was Solutions FX reported FX at expected. reason than the From at EBITDA FX in at should on have revenue hedging again residual constant R&D do it a also while at XX.X% is X.X% expected. X.X% impact had grew Also, benefit note for is that level. adjusted first we better revenue constant we than primary X% the perspective, expected. and and R&D engagement

technology did know, assets of acquisitions and several year segment. the as primarily in Solutions Now primarily we Commercial last you

grew would also the was on a So constant Solutions X% acquisitions At impact currency, on this color growth we X.X% like organic. Solutions constant of was organic. was Commercial R&D about the segment, and to revenue X% In gain provide which currency on X.X% about call. more

So constant currency acquisitions about in R&D represented over half of and one-third the of in growth currency the Commercial at constant Solutions. growth Solutions

did company to to last be and have can while year, took predict in may a to acquisitions spent which quarter. Quintiles, did million investment. we the $XX hard data meaningfully contribute $XX seen that we quarter we healthcare first which during stake you little not Separately, very million did also several We Now the and be happened a first analytics minority revenue.

other prestigious real as all analytics. the about through address to opportunity enabled and Kettering look technology cancer excited institutions Sloan to Memorial of the are we value care join world We

revenue of on range our EBITDA guidance adjusted expectations. from X.X% organic to primarily grew line. the Compared million profit, driven again our $XXX through beat beating was by drop the performance to the Turning strong

as and operational plus EBITDA had guidance $X.XX minus performance relative our on items diluted by Adjusted As grew various below about XX% EBITDA beat line. impact the our entirely driven mentioned thing to either. not on was adjusted have EPS and strong we and impact pass-throughs and of no of range the almost earlier FX one know I EBITDA

our color on margins. Now to like I’d provide more

our our quarter XXX margin past indeed is basis cost margin points core the we currency. constant that in expansion. basis intention actions revenue than along and to all margins. grow and This faster said did margin profit of contributed we've expansion of have Revenue takeout points know, contributed all you at conversion XXX our As expand expansion, business solid our

know, run savings we a synergy to you on million exiting and achieve committed $XXX rate are we still XXXX goal. As of cost target to this track

margins. support addition go-to-market headwinds we from in annual increased impact CRM at growth XX of minus panel investments and these Now MCM the in to data and have investments in on next our acquisitions plus technology data markets, to and accelerate All the making points to items scientist constant currency of also capabilities, our especially R&D course national wage in margin our basis business emerging generation including are capabilities, to the which net global quarter. specialty a replatform resources, dilutive the to expansion inflation,

the So momentum in summary, the by we’re in business. operational very excited

capabilities Note, integrate let and SaaS and and us that was on highly close XX our highly may deal turn to that business, functions including to midsize intelligence customer important differentiated to Mike, a was machine competitive official commercial it me countries. in a our record [indiscernible] our offering pharma In over based in our tool utilizes awarded wins it mention learning engagement various operations. win I company our or within OCE this the have tech our my of Before deploy orchestrated to remarks signed most seven-year seen Italian you some key businesses. a

business have gain including billion. Solutions exceeds R&D backlog contracted momentum. pass-throughs Our to $XX continues We which now

and is and traction We continue this driven awards analytical of billion see capabilities the utilize generation merger clinical technology have strong to since next to now These and all pass-throughs. development. with excluding R&D our awards $X.X advance approach approximately our the

to For sites through ability autoimmune for we won trial The patients disorder. team example, is identify working during high-performing project that mention R&D our studies. also the cover large I of the U.S. project to client. Phase with with a quarter cutting biopharma was deal This to will a X advance hard solution. won series edge our virtual the serious want

clients we area. trial to look having in large virtual opportunities. a further more of progress this and pipeline We’re with discussion encouraging make as I have forward reporting very

in will had world a includes arm setting outcomes of the arms innovative up This Instead to population great competitor trial world world cohort multiple retrospective company. the data our real real and a real to also business with deal insights within compare U.S. wins biotech competitor. benchmark single novel trial We clinical data. a leading trial, an will example synthetic we

Importantly, study be will a label expansion. this used regulatory to support

domain are through critical Mike expertise to with the detail. real McDonnell important this Our take win. this turn the let Officer financials to With to significant over our studies me world all to Chief that, and access data Financial more you right it regulators design in collaboration innovative

Mike McDonnell

everyone. Ari, you, Thank good and morning

XXXX. a had we mentioned, Ari strong to start As

an ASC on you Let’s which periods financials which remind basis review I XXXX. are includes all now the for XXX presented

and EBITDA reported and declined FX expanded XX.X% at and revenue of million Commercial Services million currency. currency. solutions turning X.X% constant XXX currency. X% and on at actual XXX XX.X% revenue reported constant at at X.X% constant X.X% X.X% currency. grew up $X,XXX,XXX,XXX up First Integrated R&D of quarter $X,XXX,XXX,XXX constant at actual at revenue grew currency. Engagement rates grew currency. XXX revenue X.X% million at reported XX And basis profit, EBITDA quarter basis X.X% constant reported a Adjusted first X.X% margins but now FX grew and constant rates at to points points basis XX decreased adjusted of Solutions

the stronger cost in the earnings which core solid the driven had GAAP below from XXX depreciation partially discussed, On of takeout billion Tax and to driven share X%, was the $XX revenue over I year lower investments offset was we, and mentioned debt grew per the tax share which and was provision of business. many net to Adjusted primarily as by was Ari million the due new amortization we income by net expansion lower net business As offset income XXXX year-over-year. income this and by XX, line conversion driven Act. diluted March XX.X%. grew net higher expense as million count Year-over-year at margin in make benefits over continue well Cuts levels. our These by by just EBITDA GAAP diluted basis, was contracted adjusted business $X.XX. higher benefited of growth growth X.XX a higher primarily from was per representing LTM growth Jobs XX%. were share interest $X.XX Adjusted adjusted and earnings partially

first versus new quarter on ratio. calculating basis. the on industry net in you of know XXXX, old up XXXX book-to-bill net is old contracted in the XX.X% still the If focus new contracted of the quarter I the the first bookings bookings bookings were again quarterly

meaningful We have as or predict to growth. this may suggested in future metric useful the not past be

book-to-bill to calculate is on the the quarter the wanted in range around the on However, if book-to-bill LTM be same you be the the ratio based method and ratio were old would basis, And to if old way X.XX well on the under you old number you would for that. of derive awards, so. basis, the calculate and that an by or would curious were old, north it

the new Now or standard, it is back meaningful this is book-to-bill to useful even metric because less precise. less

forward. book-to-bill going We new will inclusive not net business pass-through metric report of or

calculate in metric will a However, revenue. the number them under I backing to to attention be and as standard. new the again this you be taking your of out able backlog to may difference not draw meaningful by want why reasons

services it number bookings. First, more of at have as contract degree also contract finalized a precision same during service the although than baseline signature, of to not at time It the subject contract. the not time the fluctuation at is we the signature same life [indiscernible] is of have bookings and does

and the quarter. the all this type pass-through last could our past new the clinical have as little of we have provider, industry in and business data Functional given science Therefore, inclusion swing could varying provided levels pass-through. swing business work indicated full Second, we're decline significantly third, book-to-bill service when or book-to-bill quarter. in the and the therapy Therefore, And metric. pass-through. regulatory revenue and to done between a bookings we in XXXX expecting within the inflate lab areas line guidance safety a

lower would a inflate deflate of revenue lower business mix metrics. net example, net A bookings mix pass-through business a mix of higher with bookings higher of mix pass-through pass-through revenue For new metrics. of with pass-through new will

of assist expenses life XX, let’s Finally, reimbursed as backlog all building your March expenses. XX, over we contract. into was to this is pass-through to account, a also at December has To including impact Taking billion. billion. in backlog recast $XX.XX Closing reimbursed XXXX the reminder, zero have you models, which $XX.XX on profit turn backlog XXXX the include

billion $XX.X totaled $X.X let’s debt cash Before equivalents billion. minutes turn a on $XXX we in March was cash and sheet. XX, guidance, to of the spend about resulting few and million debt balance At net

was our expenditures which of million month reported quarter flow Cash Our trailing ratio million XX net gross flow in we operating $XXX from X.X was the cash cash free XXXX. adjusted was EBITDA, the were $XX times. to million million leverage in activities first of was $XX Capital leverage compares negative favorably ratio X.X quarter. first times $XX the and

is incentive usual quarter, payments flow the free annual was it by during our significantly impacted As first to employees. cash

toward worth repurchase remaining quarter authorization. of repurchased As $X.X of earlier, open million the currently under mentioned end the in approximately market. We share Ari our our we have shares $XX billion the

Let's the XXX. of adoption inclusive turn XXXX to ASC guidance of

revenue percentage percentage through to points to total growth quarter about to and assumes X revenue XXXX first points. last tracking billion. guidance flow remain under upside. raising R&D pass-through million organic We dampen expected the of $XX revenue are our X revenue This that solutions quarter be expect $XX.XX rates remainder about $XX.XX benefit We're to billion current We these operational X.X still estimates. growth through year. now is to told in revenue the XXX the We effect currency the revenue foreign you and guidance ASC by and currency by between by

our fluctuation the Now profit FX impact had on little metrics.

the are and expected diluted EBITDA $X.XX still $X.XX diluted EBITDA, guidance adjusted full-year XX% be and billion and to is to guidance which tax rate. also the adjusted of and adjusted adjusted and $X.XX approximately book XX% for approximately to tax which between We EPS We're $X.XX for for for be reaffirming EPS between rate growth XX% reaffirming billion adjusted year-over-year cash tax expected represents is which adjusted XX%. rate our

R&D revenue billion, be quarter XX.X%. numbers entered provide year-over-year currency now diluted guidance million, As back diluted EPS exceeds the also rates and in expect new financial delivered EPS grew be contracted momentum. In guidance be billion EBITDA the assuming for $X.XX end $XXX XX.X%, summary, results XX.X% and with Adjusted R&D about to Solutions' billion. to quarter the growth revenue previous above EPS represents diluted range adjusted coming we and services $X.XX second and $X.XX. range. solid LMP our We quarters, business $XX will log at between adjusted the of million adjusted between between $X.XX we year with of remain strong through current net This grew $XXX foreign to between levels and XX%. Solutions, we contracted profit and

market continue generation business to operator offering. Our and approximately would awards, open ask of that, Q&A. based like to SaaS next the team lines R&D for continues new with commercial capabilities with the to OCE see success $X.X I drive our the And please our with in post-merger to billion wins

Operator

from go comes [Operator Please Instructions] Draper, question SunTrust. Our first ahead. Sandy

Sandy Draper

to One, always revenue on or forward pass-through adjusted you’re a backlog to including first if with jumped just and an late. the exclude housekeeping apologize Did just start you going I the out because I go have the revenue. quick a tiny bit answered call give you pass-through

Ari Bousbib

give we and not the purposes. last upon that’s We XXX give XXX going that XX/XX/XX comparative We tracked report Mike this year, have backlog which at backlog. to are did implemented year, throughout under XXX fully did the we for Sandy, and XXX we point speaking. Yes, and basis a it's obviously

Mike McDonnell

that’s XXX mean thing or important to its backlog XXX whether revenue. I And think in addition I that, here is

expected next well, is given $X.X billion. will to edge on metric which slides that the you have the We presentation, XX of backlog in be the from you see which as months now

the that terms rest I your the think So in year. you of should of help modeling

Sandy Draper

both business would of us a is consolidation? the and then and think be industry to form term been but of what some the just lot of, And to you out view and there walk Thanks. term you next concern sort and of any and probably again have of just how you just Can consolidation, There be near question, you a helpful you exposure through on and view. M&A. the guys then expose how answered will longer get tried about impact updated it I pharma about the this know the impact sides level across certainly

Ari Bousbib

for consolidation. this lot It businesses industry phases have happening has is been experience Look these so not phenomena. of decades legacy dealing with new a the both in of

as there concentration around world, very result we First do. as over know from diversified us. no We've countries got and are to one pharma that there that you stuff no multiple of low. is the really the Customer a probably we well is offerings one There does in should buy pharma provider very as out that not to is anything provide much services industry. that

last revenue, I XX% maybe actually our the that. of client half is less think of is than highest

again, driven to commercial the supplier this rest side, combination. the And the I The are business the would side. sometimes $X that our by several we those a merge, of legacy on obviously of that’s $X.X depends the is about likely in On revenues, data exactly mind good to opportunity those be that effect then pipelines, talking bear overlapping we’ve be the locked business, they the data offering potentially the mergers theatrically on virtually very is on Quintiles visibility the is they degree preferred future that here. that who area data on to side de combination. largest and we business the of Through because The supplier and nature spend. may the the therapies past $X of is when R&D into $X actually companies most our no impact were minimis overlap. out needs more it an don't the and are opposition the of on Again affected. was nature the of affected And the so the Over years large the are Solutions side am modeled there regulatory not goes become in To usually is those here depend accounts. on it's of historically information because mergers backlog so doesn’t many will complementary using there degree from two our is take depending both serve the complementary of the place. it's and merger only business and spend surviving They acquisitions that data. impact

the it have has an from that us enabled out decline past happened acquisition through So has that penetrate before. actually in we locked

we good So taken again merges have noticeable feel impact overall do that been talked about about not guidance. on expect place, older that have any our and

Sandy Draper

change one jump the timing share queue. purchases past, I final repurchase? the in in or that just maybe and in Thanks. profit obviously And and than seen back level the that will there that cash in any lower share thought about some quarter of flow, Lower just you the was normal rate we

Ari Bousbib

no root. No, there no is absolutely change,

past If you go back consistent done. we with have to the this year, is what entire

in our we worth plus didn't PE was purchases there and the so opportunity. hasn’t secondary. to do not to in difference done offering have of the quarter out. and secondary opportunity a secondary in existing But is stock a quarter when buy minus have or market our $XXX,XXX that - happened a $XXX that do The of million shareholders the participate $XXX in secondary past that quarter million quarter we and sponsors, this then We took open in offering generally by

which I something, before is a before anything market talking release, February the precluded am XX, purchases I release. market XXX think open purchases I last the for to we and quarterly bear we was there after million, earnings at in quarter we some we million, quarter mind bought and open buy least from XX, the week buying So XXXX, $XXX earnings $XX quarter about couldn't then before the bought guess

the end the - open before relatively we short window also of the So quarter obviously is out because the market. long of

with consistent past. the and window small a So,

there, use if will $X.X participate or still we our or XX months XX it whether go to we to or will of in of billion our no use whatsoever repurchase so next to authorization intend certainly future, authorization. to there the look sponsors share and intent change choose years continue is repurchase the that have to second We couple and we we in XX will in

Operator

Credit Our Please comes Erin ahead. Suisse. next Wright, question go from

Erin Wright

plan, front I stand the am we of process. just terms on of where you a that are curious in broader ahead kind saving plan and of integration cost

what and does it integration steps Thanks. to stands or on I continue next now? I it guess So you some meaningful need accomplishment, are savings be but track progress. the cost stage, where guess in

Ari Bousbib

XX% be know million an after is $XXX as first usually it's expected the said think second in end it's our the XX% executed kind third year and and the ramp, merger. year of happened run the cost its that to we way in on synergies accelerating so rate closure so then you of the That plan. of or of so year three of is the I XXXX. we or stack another that XX% the end and out of - by last then the year, was The the

I our XX% therefore, more at in expect was ahead so. this actions. and schedule end the that takeout end more think with the two-thirds our the last be XX% I rate than of of or And we more the first year than a are run little by of done cost year year of we’ll is

XXX So, is show actions. of FX shows see operational takeout efficiency and we well that and integration as regular ahead chart you content margin little are the expansion cost schedule bps what the of I that - perhaps at a savings, as the work from in

track and well we and are again ahead schedule. So, of on

Erin Wright

can characterize Thanks. you're or how seeing of resonating And up associated can in great? traction generally be terms where seeing another customer it that’s would what and most the of step you’re was Next-Gen tights growth that offering bookings kind you with nice

Ari Bousbib

the Yes, we is see most look segment EBP where traction. is

Our increased booking is have generally in dramatically. segments the

accelerating segment we’ve of our with to of growth the most okay segment our accelerated our XX% would and bookings the very doing record with the we’re that an quarters booking our market. the the we’re up - old in had I basis Next-Gen the and we’ve historically we you seen in capability on think and NNB year-over-year EBP traction attribute I is excellent trend pleased penetration with but

about our the in EBP. I of that. think of were part or XX% bookings it's obviously is And almost Next-Gen quarter a

Operator

our line comes please Please and Robert Goldman from next for question the go of it moment One Jones, Sachs. ahead.

Robert Jones

should Just for EBITDA there wanted to spending flag some or XQ. or anything back margin are bit there we one thinking then worth on you expected anticipated the the guidance below cadence far else we items and for you especially better that specific the of ask expectation? in years for XQ the And the EBITDA of that quarter in expenses or also be would you of as the little about revenue as the light what margin there half Is out anything revenue would the calling guidance.

Ari Bousbib

know I expectation. really don’t by what margin and you lower mean

how of and for I Andrew X% we to significant you expansion that. strong margin growing second can to we pretty X% through EBITDA it revenue margin see have guide get quarter showed X% X.X% which is XX.X%. because the here think at X.X% much to We expansion adjusted we then me growth

basis in space you are expanding our don’t that, may a than basis points that is I XXX growth like at know which margin had expected XXX I the that’s growth think to but range X.X versus expansion of on more which guided XX than points. I EBITDA to revenue more companies like know is that mean of margin times I don’t a So we

second recast higher recast referring the we can And range we of guys you to QX basis have provided I last had if is on the to million and quarters, so we the $XXX $XXX - you think the and Q you know reason we may XXX an second perhaps growth didn’t percentage. there here earnings that as on the in have XXX that for back provided release can you million. no dollar what than the what is the number of at been was you XXXX the to look in absolute which a ASC quarter see quarter there for had give what out you ASC you're little this the XXXX bit that that an end see basis way

under what is growth that you of old you to the in under EBITDA maybe the your compare EBITDA new of the had versus So growth want the standard standard model.

and get every you’ll new this basis We also you’ll we’re think compare. the have right call. of that after better quarter under recast XXXX providing to I the way ways

Andrew Markwick

You better that’s appendix connected the website. find in that of Bob the slide on the

Ari Bousbib

margin again strong the expansion So, guidance. our quarter even greater than in first very in actually

Robert Jones

its the I not bps that you’re guiding talking sure sequentially would impressive across - about wasn’t quarters which down to more way was year-over-year basis obviously now EBITDA a you margin modeling not the was street next to it specifically below was three EBITDA always a that that XX but looked like clearly is maybe guided the I’m seem. noticed cadence you the same where the the on street where was was

Ari Bousbib

Yes, take… to I want think Andrew you

Andrew Markwick

the in that EBITDA first we line future to of Bob revenue stronger again think some partner in are through that the the seeing the know you OpEx so stronger first I got quarter it is hasn’t and quarter. be

slightly So, weaker… where getting you’re that a

Ari Bousbib

know be a typically in Bob look in would quarter look that lower think I don't But first that okay whether margin again I or I us margin the second a that, let take you but that. down is to the at goes quarter, think sequentially saying want the margin

Andrew Markwick

for quarterly when certain sequentially but step can we at take raising thing Bob. the you down look There a it offline is

Operator

Kreger Our question John from ahead. next of comes William Blair. Please go

John Kreger

be the what's your will current to thinking of this work conversion on done Mike, XXX, you've the given about impact all on the XXXX. what

out you. Thank it the headwinds XXXX any So in earnings you about last down? how kind upper that of the or will XXXX quarter kind thoughts you impact but laid have of

Mike McDonnell

over did really on to too out which back go committed early John to about I’ll XXXX, medium revenue we continue would grow topline I lay guide the to that. it’s and to to for grow times to XXXX the EPS midterm We at try double-digit. impact least our and our mid grow at million earnings pretty to EBITDA similar our tell we’re our digits say XX where single X.X was term

of give I the and XXXX, deeper kind months process that get to can of the at out several we’ll obviously planning color medium provide So guidance have we’ll for our I think into you term more time. color in and but terms

Ari Bousbib

asking of already last actually doing We of are make of across we the a obviously group to most real of it’s conversion. were it And first look and are where realize are apples run standards peers oranges. year our the compare mean this our them same peer kind know you as reporting for difficult under all to industry of question I because all we year. in peer guys not two you actually the the you I

we dampen people For tend mix the and pass-through of normally the would XXXX FSP projects pass-through have. and we lot then growth. amount the pass-throughs which that of a we said to what of biggest that’s that - drive issue more less is of is the that because work The

points midterm that that we Nevertheless, the that X hold of and whole R&D because the on us topline we XXX in midterm building a said significantly R&D confident reminded in However, were of the - absent the in of guidance that of XXX almost single-digits confident holding growth the Mike in strength a company gave on to includes that’s and just mid have is of this November for we and revenue IES, our we X.X which points our and backlog to year headwind. pipeline are topline. Remember revenue we basis the the aggregate. of would to points a on couple for XXX conversion as the strength higher because growth

So question the be would different. on XXX XXX of yet for is a revenue ASC fight, you to of I range the would may take today XXXX, to. don’t X.X% is to bps that the we of be XXX see right. bps reminded XXXX the impact topline range it guidance X.X% the we why we and growth don't about advantage year feel know you we’ll I good about XXXX, not here guidance that provide but - I confirm in when

the standard year good X.X% a So certainly readjust mid have just this X.X% single-digit given very our that range the historically. and growth if you on which old old balance into the standard, of under standard the guideline old above for to on we is translates

are you into largest the we happy the we business IES business you that that. are also declines called our focusing take if did from again, know year Now we last and a headwind Encore on account divested

However, don’t the headwind year that a us the also it it of this half and we was year. first with have it’s in

bps So is year. bps for IES and the from the in XXX headwind aggregate Encore decline to XXX

the standards for our you if under business to back to X.X% for underlying growth R&D understand commercial growth it’s That’s the R&D want commercial this add and under that the of together year. actually X% the old old So the standard. business the and business guidance

in we it the XXX. benefit Of guidance FX I had better we from it – has back. guidance course we said FX quarter when was no last we The is when was it’s time and about last back we gave bps it XXX gone first bps think euro we XXX to said gave XXX time now I right think

had which we flowing million first $XX through. about or are so quarter, So in benefit FX of we

sustain So or gave it’s solutions’ That’s hope that we under into of plus business. XXX these in XX commercial the bps XXX X.X% XXXX rates and revenue as old we for for to it standard FX the bps we it’s we included the go that better. XXXX will R&D and X% benefit and to growth call certainly guidance a continue the

John Kreger

you Maybe organic the that on much one you call. follow-up. earlier growth on for added Thank very gave quick clarity

solutions’ indicated some it How data versus solutions break you down the is little business you the doing that commercial there? a X% technology could if you are around I organic think you. versus in of the business bit. was Thank services business For the that

Ari Bousbib

real change, the was what in single business you you business nothing historic our if organically, tech basis flattish in back Again X%, at quarter IMS IMS, which real mid solid the is kind the that X% a and services a of typically on The and we numbers business the X grows of technology of single-digits call our service is and It’s studies also. lot X%, quarter digits on depending is that quarter. out business, the look trials. and a people real longer business business tech it’s world old a more in double-digits world minus or X% world info Quintiles business, and organic to the depending the go which clinical and plus keen database and grows older at which a grew type high

business world of kind real the double-digit. is aggregate in So

to commercial this put altogether you So organic on if it X% the get side. growth you

Operator

of of question go line Please Rosenbaum ahead next from comes Shlomo Our the Stifel.

Shlomo Rosenbaum

make just of we into then to bit platform And over to that type about also of it. how just the that’s understand want some understand salesforce.com points re-platforming a right where little X.X since I awards the the were of go merger your the on are position? of the I the is Gen way technology next improving and if competitive can that get billion and you them sure to with couple

Ari Bousbib

are next-Gen merger. $X.X of of in was And those on was over I contract the Yes, we every the of replatforming mentioned in awards know competitor, of sales the most on But of those to the long-term the of mostly midsize now we record Next good CRM compete the segment. Gen It’s hope done now since we The meantime, of kind winning type the the the is are we end renew some as essentially segment but you yes recall have with and team are the And of the time. OCE back a correct. we pharma that we I of as product in significant in for win hopes that large cycle launched, products midsize these XX/XX some in December meantime, we back. launch beginning you single are some winning billion and time last the the we market year, this event we PFI in wins the think had with force. platform is with

Shlomo Rosenbaum

be IES or that needs the there? to get how – and here flat I what’s is then what the get or And what’s you’ll business. goal growth, it plan considered to be is to mean to happen it to success may going to the realistic turn around

Ari Bousbib

several we Well evaluated strategic business. the options for XXXX, look during

cycles, It’s process which the And As million legacy somewhere talked small you time about to EBITDA process contract the not have end $XXX year with goes decided $XXX offerings. and after sale single-digit transparently broader had the felt gone so this. the in margins. we through of know we I million this and sales and including was that integrate at have revenue the portfolio organization, of right it’s and segment our it and the a very about industry fairly in it we and XXXX last of

So entity managing separately, too we a but now bit it it was had business continue it to It’s costs locally. local it are when from and and report a managed was much going it probably are very client. maybe we as far global

force to So country relationships we it and and to are integrate operations. with regional our and our customer technology to trying try level sales leverage we optimize

sales. market again report better forward, that a in but has will So going it’s numbers not wind we it hopefully

Operator

Please comes of Our next Peterson question from go JP ahead. Morgan. Tycho

Tycho Peterson

we’re just to want so back clear. for sec to go I a guidance

for on presumably of a and by are raising expenses pull reflects R&D timing kind that less solutions. the reimburse than forward beat here You

quarter reason are two decline. that you solely how we why model expecting component sense the expense So us that maybe of the is questions you of should reimburse there just give the and can sequential the next couple

Mike McDonnell

Yes.

it’s Mike. Tycho, So

consistent expenses we on for pass-throughs said we that would that On the a that for billion and commercial think what model be should $X.X that’s about the of last and the the aggregate that’s estimated the entire quarter in company with is R&D, you order manner the number. we still reimburse IES right

first billion billion by of you due into think but with did we non-R&D and same our the to in in $XXX phasing the about sticking quarter and that that pass-through so said R&D, we we $X.X we that $X.XXX what and that the a heavier at $XXX which take are guidance. little estimate, divide on the that still if have be for quarter thinking would that, that’s million We baked still come

Ari Bousbib

includes X.X pass-throughs the side. the some commercial Yes on

Mike McDonnell

Yes, I said yes. that

Tycho Peterson

expansion parts two the label real evidence on data. of is looking some more world And to customers real incorporating pharma and then at evidence question use just point. that one to the any side you looking at seeing are world this of Ari evidence pursue here, then on receptive a FDA of pharma And kind to

Ari Bousbib

and studies. single go cord asset look a are database parallel very more significant do are the that. going and randomized got excited it the we using is FDA doing we Obviously don’t for of take another a we midst a about because here is treatment we having willing - very one that a and business and instead to much you mentioned the to very taken actually patients or we’ve so, favors are compare lot cord arm that to do out again from the study. And very Yes we label I to our good that. more questioned several to interest of do that. a the and just in drug expansions that so won of deploy ones we’re for this patients through We where of a model placebo

Tycho Peterson

Next-Gen I on appreciate last gave the And one, guys you then color one award.

Just this you rolling contracts what at price curious fixed where point? of those backlog in are on price and out overall fixed part the is

Mike McDonnell

be been commit to is days. bidding price that. we part Our have inching becoming a have we subset and sight XX% the of that we portion what we bigger Next-Gen of recruitment fixed overall of we like feel probably do it it's instances on be towards and about comfortably fixed line these And award price and a it so of a where would mix good of on would are

Operator

Our next Jack Barclays. comes question from Meehan go ahead. of Please

Jack Meehan

could talk pacing solutions activity awards you up XX%, to the want interest you R&D about partnerships? very RFP of the or focus year start strategic the increased were the around any and on new but and the seem to So healthy, looked flow

Ari Bousbib

we’re XXXX, talked win quarter again XX% already up very QX a XX.X% in bookings underlying that as same this XXXX wider healthy significantly is healthy than don’t casting a old if that gaining even of higher healthy but number of partly called more, has flow been, of told we bigger as know are then net. our we we a has The basis And higher we also and the significantly And you before the you believe it are RFP please very we was but are coming market QX, XXXX. on about we more, you share than I mentioned quarter NNB We so year-over-year RFPs the know see obviously up trend. tell RFP as I are actually see have gaining can course share so QX, last and strategy we QX because far flow market Next-Gen was RFP significant I through. here. a momentum, think

think a So the is XX.X% but that growing is no at market is abating pipe see there healthy we signs I not anyway. here,

Jack Meehan

at little maybe better IES? if missed about quarter, and it this is the to earlier, say related you last the but commercial safer R&D this Sorry segment feel you towards a solutions Thanks. little I lower point guidance that provided to with end and

Ari Bousbib

Yes.

Andrew Markwick

probably so for think time coming hour on more we one got operator, the question. I We’re up

Operator

Muken go Evercore of sir. ISI. Ross from ahead comes Please question final Our

Ross Muken

on So side the the business. in of the maybe R&D technology just sort

around interest called some And that the trial Maybe concept the about maybe interest total side coming because of lot of broadly a think for to client to that base that the list kind size you're is trial et Do we've like favorable the at or cetera? feel you’re could and more to the or hearing points the in how side lot virtual in are employing a influence you think market awareness relative of some feel are interest side give into customers market. tools from the ways us patient sort we play you and least of out the proof how I more of terms drive from then start-up trial. where or of times wins. cost of one, feedback other on the and heard in at you least a some getting more Next-Gen terms secondarily recruitment these can

Ari Bousbib

a minutes to here here we spend hours to to a Ross a I'd doing telling the that in question, say couple of we’re got but industry. because your speaks imposing love on here stuff few just its you the of question lot Next-Gen we have the future about

eliminate country again trials to totally a on not the to way trials the on to virtual we how going level still full process to study you the do global protocol, require disease and the we're scale. Just regulations, understanding deliver of the today the touch area, assemble right

and of all trials, things, uptick of everyone side is requires in manage here to those it’s innovative So XXXs the in this we system way of in of on investigators in an managing and you still start-up these need a separate to CRS have patients. sites trials, you a classical sites not a same right, interest time. site unusual but to and have separate which trial of strong and has managing have sponsor very And the clinical a the that you’re problem lot at

local the location. it and is the as machinery deals at is one at is their with with the a then one time. to to make all virtual site the a same concept So site, labs deals idea patients The trial that work virtual difficult have

patient distance hours XX% a two of trial. is enrolled at reasons miles, physical If to site a that significant. you who and so main patients is of average patients site eligible trial clinical a today don’t is one from less of XX think a in participate least about is it that away than the a largely actually a participate clinical X% in research, The site distance in to live a eligible struggles

here course reduce to also patients more it timeline homes. is lot but So monitoring remote efficient of the their make idea reduce a the using at of cost, by the

with clinical relationship obviously with you this out is like so with to that you these something ability availability mentioned how to acquisitions we’re present the we are monitoring video you building an side in, eConsent that how centralized on medicine Plus the because technology which did hub call study the of a take the records as of chats study you on. extraordinary of best-in-class Did notification, better platform patients have So so to medical part local last where your simple a that’s and strategy the are the of of today? we questions, a and understanding questions send scheduling, facilitates investigators, in all labs, and that we terms answer technology telemedicine, year working know on we DrugDev capabilities we opportunity. feeling have are with

I the shorter, again of streamline pipeline, because to new they this. opportunity integrity. patient start-up it patient patient there the a this not as do we Again normally $XXX say small I to far - the total me are total the ways of it��s are much pipeline ask million site And going would virtual it's because participate now this you the in of - a patient what would studies I is If conversation. safety from the access, us expanded think and patient recruitment because am we one and have mostly several probably not course we have long are facilitated is to again the doing the with so site. participate. are too It’s idea with But as The we that on. the Europe, just and encouraging technology there EMA is is diseases the we also again think burden we FDA maintain data of in regulators and to able to with reduce very interest difficult EBPs have supportive, very explore and a supportive lot growing

to mix again and there have across et much sites I but inconsistent the the a facilitate XXX% depending limited higher and would maybe on reduce of all CRA versus monitoring think systems sites because data the considerably be will be visits electronic with sites of process We remote very would a consistency electronic trouble integrity cetera. be it

So a interest, a time I this. lot spend of on of could there lot is

minutes. there As just a is said I a of couple

trials on spoke very I already Next-Gen Last in guess about under only where a that handful show at the the few points very stage. much a So we we larger a sites. November excited moment had speed up, that again starting example, were and could full this we are able Next-Gen to already proof literally XX trials this, trials in have ahead are to and We XX was Today, XXXX Meeting. over time it it’s proof The have that dozens for we Investor enrollment going several that about. are speak sample. points on we accelerate. now are we the And patients we include

we the So more it’s over time scale the of data approach that Next-Gen use much goes we are points. able to question and can on start-up a we our very that, base mode prove for award will be have the thank by, broader effectiveness the Next-Gen proof Andrew? see you traditional broader is and the and for broader that much will you and to With won a call. for

Andrew Markwick

be call. earnings everyone. we talking with XXXX follow-up taking of I you. much today the Thank very to day Thanks available rest on our thanks quarter might to will for us Yes, forward take questions any to second you for time and have. up the look the join you

Operator

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

IQVIA (IQV) 2 May 182018 Q1 Earnings call transcript