IQV - Earnings call transcript Q1 2019

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the IQVIA First Quarter 2019 Earnings Conference Call.

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

As a reminder, this conference will be recorded, Wednesday, May 1, 2019. I would now like to turn the conference over to Andrew Markwick, Senior Vice President, Investor Relations and Treasury. ahead. go Please

Andrew Markwick

and for Thank Senior earnings everyone. referencing Chairman those joining first Analysis; Senior this General Vice our Chief Executive Eric Good President Investor and and President, Vice you be during Relations. a be presentation With ir.iqvia.com. IQVIA you Financial our Director, will me XXXX visible and also that section President Executive Relations Halchak, McDonnell, Presentations webcast. Jen call. Officer; this call our Nick Bousbib, website Financial today we call of on quarter will Officer; Events Executive This Sherbet, at be Childs, morning, Counsel; will Michael for Chief Today, of Investor Vice are on and presentation and Ari the following available Planning

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

will to and included Ari call the I to presentation. turn reconciliation A not call substitute GAAP. non-GAAP for a measures like the these In measures on prepared considered and our to, CEO, accordance this discuss with release financial press would we certain non-GAAP be financial addition, measures to Chairman supplement conference and call, GAAP over which a should of in measures in Bousbib. comparable now is the

Ari Bousbib

guidance the quarter guidance again high-end morning, at for EBITDA adjusted quarter our everyone. We first EPS. performance range IQVIA. to or Andrew, XXXX was reported adjusted that Thank report range you, first the of results you Thank quarter our and call. diluted for strong another I’m revenue, earnings of pleased our above and joining good towards

Let’s review the numbers.

in range, above of X.X%. was in On pass-throughs. double-digit over revenue typically in X.X% the In First by X% revenue quarter which pass-throughs. had businesses. million, growth currency, R&D headwind guidance revenue in and have at including of lower of performance Analytics real-world currency of solid Solutions constant organic. XX.X% proportion & at was from a came which quarter, grew about our Strong first our perspective, of resulting driven a Technology basis segment phase, technology revenue Solutions grew the currency, points constant XXX higher constant we start-up projects $X,XXX growth

Excluding constant-currency organic growth pass-throughs, X.X%. was about

Sales at Our constant had revenue transition Solutions anticipate of to that growth the we business second-half year. X% was, down Contract expected, this as will the We currency. & in Medical

towards range million high-end guidance of EBITDA XX.X%. of First of adjusted was EPS of $X.XX our and was our $XXX range grew guidance quarter adjusted diluted high-end the at the and

an on provide businesses. me Let our update

network drive the how both our Roche the the of described will ago. Pharma, CIO results. who and CIOs driving IQVIA areas. We tech in life the to hosted leaders from on welcome, Roche Guise, why conference platform software to industry is and the and IQVIA clients Steve were Our IQVIA over across technology clinical and Technology pleased experience for commercial The Frankfurt XXX in a weeks made few compellingly brought together to Conference the innovations the solutions decision team help sciences standardize

very a to with smooth in far We Roche been so are has deployment. proud partner what

on and operational in efficient they the deployment IQVIA IQVIA a implementation, the continued smooth led mid-summer and was of leading solution in that XXXX. growth from company conference heard also in the reliant countries, customers an at rapidly growing and is Theramex, women’s pleased already IQVIA reported that field, commercial we suite were is Our health teams and successful the that Theramex’s efficient a again, by shows very the entirely. XX

presentations In cycle spans the entire addition specifically best-in-breed sciences clients, conference of other and from technology our to at vision life partners the clients many the building is product our heard from that attendees tailored needs. to Salesforce life about also

the Our eTMF, and events demonstrations technology this IQVIA more. of saw adverse also safety RIM and witnessed AI OCE much integrated They fully into analytics, capabilities machine-learning clients Smart, pharmacovigilance, tracker, and of suite. firsthand power

capabilities in real-world. into to continues team Turning trials. supporting The our scale single-arm

of analytical top with for a oncology level comparator capabilities. our client pharma obtained a was AI form license through real-world FDA-approved product. XX an arm our use an quarter, the advanced assets expansion patient to During rich combination possible the This made in

countries, In fact, to XX which we machine-learning utilize insights. over than drive more studies AI and XXX better in now have

the and linked XX%, largest net sequence ever wins, database space preserving analytics. we continuing This business scalable, Genomics, XXXX. LTM launch business a through first quarter provides we the pool the hover an new our genomic technology Bookings the platform, patients is patented on net data. continues clinical another to The new way saw excluding During of genome time of accelerating conduct efficient strong around research quarter, the the privacy R&D real-world through whole growth help announced growth solution, of to will remains of in our for linked world’s team pass-throughs. new the non-identified to genomic which data rich also had advance which robust EXXX research use momentum

adjustment net again, X.XX. our to This excluding of Our is pass-throughs the backlog. was ratio, inclusive LTM contracted we made book-to-bill

note, that as very of X.X, net should team excluding exceeded had a ratio, first is You has pass-throughs, again another record ever bookings. quarter LTM we for R&D strong the book-to-bill this and the the time

had our prepared the a off here, because I inbound morning my couple friend, we Now heard, me remarks book-to-bill. let quarterly good go about of this old

we basically far same adjustment, was after behind, about. do the the not talked So it’s as range booking X.X, in And can the it the just math. that you

guys last before lot the but or two quarters, threshold old the it X.X like was that a the as after over wasn’t adjustment. it sorry, well Now, you X.X

Now removed the have any on things been back award the we in to don’t press backlog arrangements we basis. notes until have about report arrangements here, our noted the as contractual until know, to normally finalized. and finalized include, contracted a are that you trial my wouldn’t prepared adjustment release, Similarly, we contractual

momentum However, majority it you diluted as is the this from impact area of I we XXXX a and helps the to actually such trial, of felt revenue therapy book-to-bill we at we by our the currently further further within that $XXX over original unexpected increased of estimated highlight again discussed. business adjustment profit appropriate from noteworthy the illustrates the the of the know, how whatsoever termination think And way, as and backlog I backlog has offerings breadth billion. adjusted nature this and very widely our mitigate record were of reflected an events a fully project. our continued like LTM removal, $X.X trial even stands was backlog R&D of absorb revenue that adjusted publicly scale able guidance, the to or earlier. since revenue months EBITDA I’d pass-throughs, backlog in client ending by this the has million It removed the expect significant this business, convert the that for the EPS. that of make been adjustment which Due to to our mentioned which number no adjustment impact already on well to net next XX and to also of is

June we announce to it before I’d I turn in that XX. Day Investor and to City Mike, over on are York like an Analyst Now scheduling New

are to solutions and to nature planning event showcasing be hand strategy are looking to hope We in into business, want from date, some save sure join how We running morning and be PM. X:XX the particular, the will we bringing in we convey will we the now, XX. will growth us the June of long-term our over Please that forward of make truly we The it the you AM able to the We well be Mike. a X:XX the event. disruptive marketplace will to this focus really on are innovative technology. And our to for I future. driving investing of

Michael McDonnell

good and morning, Ari, you, Thank everyone.

you’ve we solid had quarter. another As seen,

of some review details. the Let’s

X.X% First at X.X% revenue currency. of million reported and constant quarter $X,XXX grew

Analytics revenue of headwind First Solutions Solutions currency. million $X,XXX constant X.X% $X,XXX & currency. would revenue pass-throughs. from high-single of X.X% excluding quarter Technology at the actual million digits, R&D constant grew FX R&D growth grew be at X.X% reported the XX.X% at and in Services and rates

X% Sales Contract declined reported X.X% expected Solutions and at constant $XXX million & As of revenue currency. Medical

to turning profit. Now,

First was $XXX quarter adjusted million. EBITDA

was $X.XX. $XXX and was quarter GAAP diluted earnings net net income First per Adjusted million million. income GAAP share was $XX

of D&A comprised taxes, earnings improvement First items below share and per various the performance, from $X.XX operating $X.XX including The and diluted well was net plus buybacks. was puts as such year-over-year from $X.XX. interest, share operating as takes, quarter line as adjusted

now Solutions to Let’s turn R&D backlog.

Ari adjustment to strong we growth backlog. bookings even mentioned, the after to As see continue

We guidance. the as also adjustment And we fully said XX from are backlog. expect conversion backlog before, strong XXXX the revenue this our next months over absorbing we in

in and Let’s debt billion, and billion. review cash $XX.X of $XXX resulting was the balance sheet. XX, net cash equivalents totaled At March debt million $XX.X

flow times million was activities net first million. was $XX quarter EBITDA. trailing in XX-month $XXX flow X.X Cash the ratio our operating cash was free Our from leverage adjusted and negative

to the annual quarter, cash payments free first during As due incentive is to employees. our lighter flow is usual,

Additionally, Differences versus behalf as the in was is swings you to have as we $XXX reimbursements to from million use affected received repurchased during in that the on disbursements, the of from may by stock been given higher program customers cash we pharma our innovation can quarter. the our flow consumers in manages our drive investments cause remaining business, somewhat private quarter growth. CapEx timing sponsors. in was continue other that million including loyalty timing accustomed first of $XXX customers. certain we our business of pharma to This equity quarter our of first meaningful which and flow to, payments receipts in this We was programs reimbursement any than our make various pharmacies make of copay the cash quarter. we recall

turn to XXXX guidance. now Let’s

XXXX are million our full-year reaffirming revenue We of $XX,XXX $XX,XXX to guidance million.

absorbing be at Tax guidance also foreign guidance book of approximately the adjusted remain This to $X,XXX million We rest adjusted to that to you for our of cash tax are us. against revenue EPS moved of the until and it This still year. XX% guidance that we adjusted in provided I our affirming approximately for remind diluted from rate remains and March revenue EBITDA headwind rate $X.XX. for assumes by XX FX And range tax $X,XXX X XX% our generated are have guidance currency using million our has adjusted March within the expected $X.XX to the the rates actually rate. company, and last rates are the guidance January but time rates effect unchanged. want way, for XX, we the a guidance

Solutions As $XXX X.XX growth are Technology LTM million business Total and We revenue through toward rate – and to guidance guidance times the in Solutions rates, quarter of revenue reaffirmed high that, repurchases Organic backlog of Analytics Q&A. continued single-digit providing and record prior above Organic we And quarters, hand to revenue growth for and profit accelerate. to at ratio revenues remains and excluding to a growth $X.X be company continued million we of NTM delivered to the to results This conversion million year-over-year of contracted in growth & EPS XX.X% and posted represents the first revenue diluted Again, we increased we R&D coming million the assuming to XX accelerate. our quarter. for continued quarter, XX.X%. services book-to-bill operator be be the R&D with revenue to net guidance. $X.XX. EPS the ranges. $X.XX In $X,XXX foreign sustain completed growth foreign $XXX between for expect pass-throughs. summary, $X,XXX let or second currency million, currency adjusted between March adjusted remain to diluted quarter, me from and end share adjusted for the billion. Solutions high-end $XXX guidance back between it also full-year EBITDA

Operator

of comes [Operator our proceed question. you. your with Wright please question Instructions] One question. Please Erin the And first moment Credit Thank with line for Suisse. our from first

Erin Wright

saw new those in Can of little Thanks. resonating quantify the into business large the and we thanks. a wins in quarter, versus with speak the the how bit is more customers cancellation translating about the obviously, the business new of you pharma the nature with And Great, traction some quarter, adjustment? or can biotech? you NextGen wins excluding,

Ari Bousbib

XX%. The know up again talks, here growth, Well, the which growth, bookings We bookings numbers, there maybe XX% bookings Okay, very thanks have – here, had XX%, large others has pharma some majority large the – gross across the business our versus yes. Yes. Can to and bookings or for bookings from can bookings pharma number, biotech what’s about had still see the some here? give I do on because pharma I were Hi, and I so strong from growth look, in – – Board. – EBP LTM growth I market. bookings the biotech. pharma going over small the don’t of the been for wins we large were Board. the I’m I Basically, colors Erin. pharma actual were awards represent probably have numbers my the We strong Erin Erin, looking grew question. gross LTM. overall in XX% memory across the large gross

we’re Our double-digit year. this lot this business The was last was also it year – here increase year. forecasting last was value stronger is over in versus well than The RFP XX%. year strong. pipeline It

We had. year. the we the moment, leads pre-RFP last ever have, strongest this up over qualified digits double at pipeline time It’s

had the now in to somewhere have in now billion trial core as see ability around essentially $XXX sides. we basically really strong driven some trials. With We to nice of NextGen, was for awards for Phase which over business had smart by across III Board. won new of, We identify our respect We diabetes, enabled awards high-density well $X.X it actually be strength, was. not because million our We the smart very quarter. quarter. patient to we enabled a trial highlighted, So as it call the what core frankly, we’ve continues

basis are And in know, to very won sites. with ability where diabetes a it’s patients precision a target identifying degree on a area, of patients. you we lot of of the As researched and competition for those our high-density high

the by We also recruitment reduction entirely to for particular our back won that in Again, trial ability a our ability of high-density this a in patient Phase number drove to solutions III Again, case. the II, of provide required psoriasis. XX% Phase populations. patient target on of site

future contracted always good leading awards a these indicator again, So for N&B.

segments. quarter and see our good to are very with continue We strength happy really the across

Erin Wright

within kind the That’s a help to very that technology could comment traction seeing or can is offering? you little meaningful helpful. you will there a that the And that the it Thanks. you’re from any technology was acquisitions would great? financials? quantify OCE bit is drive for be in of to on if strength And more that quarter? the And of segment significant there the if break contribution sort Did Thanks. out, segment, be way you can how in

Ari Bousbib

Yes.

our That’s segment of and number X% big Technology had So that in XX.X% organic. I we remarks a Analytics growth that us. for & very was in – of we I my think said revenue Solutions

that growth accelerated about X% time that revenues remember for X%. over has which X% quarter. historic is our our be data, at rates business organic continue the to the and business that will segment but X%, will that we’re but it third long of time, was level. happy business there the from this was quarter that Again, data at the disconnected not a underlying it about old mind, in is X%, X%. certainly grows You fourth IMS it promising, and Bear in in in it to talking I’m with, growth I’m longest

also functionality and compliance of we as had and revenue products. OCE which driven year, technology safety an we regulatory last launched is really itself, double-digit are and and and Smart a you of of added which of analytics, growth success number new essentially suite layer Speakers] announced talking the artificial lot launched to for launched products, includes other OCE, since for intelligence [Multiple we a RIM We covigilance. add. our We on to it a by our real-world So about in marketplace OCE,

– all Investor chance We prescribing at more to get that Day of June are prescribe XX. our the Hopefully, a see to users. you’ll on insights

Michael McDonnell

the And over quarter, I the to are OCE still actively team on sales checking XXX we engaged last side, I think those think, down. said Erin, lead active in

So good market and and we’re traction compiling marketplace. is the robust in very there seeing good

Erin Wright

Okay, great. Thank you.

Andrew Markwick

Operator, take the can we next please? question,

Operator

Ross And Muken proceed. from ISI. Please Thank question you. line of from our comes the next Evercore

Ross Muken

congrats. guys, Good morning, and

Ari, or to in sticking, the point to accelerating. I way whether feels we’ve your kind even bookings have with been, of is – all not. like And of home peers sequential the debating appreciate what the feels it feels far, market cancellation down your know, result, and The for seen I is favor. certainly, commentary hands that changing market it the guess, share X.X look but from like try clearly here. of a that sort I’m in slowed feel to investor just on almost your it maybe at X.XX, a the from so group. peer going pace So I range just new that, us. basis on It if I drive is somewhere when that I don’t adjust you sort from base mean, like bookings, doesn’t

just rate customer do within on sort months. in XX guess, so even that’s like, It in than you more the if us NextGen to give working feel growing peer that a your feels the moving that’s group? of the – like like offering, cadence like feel you relative performance direction? of for terms give And the the the exponentially win feel exponentially I a snowball your and that more particularly us last certain for keeps parts reverberating base, you just of feel is – literally, Do the more now been

Ari Bousbib

Well, comments. your you’re those want very to right don’t analysis slowdown. on thanks thanks Yes. say, here. I’d see any all stress, – for Ross, environment, strong. continues to I We nice The be

in – an to of increase the Again, I I’ll trials wins pre-RFP commitments. are strongest average is You’re in status value trials, larger bigger up actually earlier you, clinical where RFP that time. qualified Erin real of of aggregate see double-digits. the leads tell digital mentioned this seeing last we time year-over-year value our We our pipeline, point year data use around again, transformation is the and this last is NextGen health of up technologies application that digits versus double to time future the The – and world trials AI. of year-over-year.

Now, all of things these a vacuum. happen can in

sure to the highlight patient to entire XX. value five really and these doubled we that need we lot decided Institute on If drivers itself, landscape market pharmaceutical ago which we’re With our is a the The the R&D, Report, assets leading to as in-depth and respect way, Again, analyzing this website, Relations. granular you of see why was don’t and spent them the merger XXXX, published Biopharma into is last available the you last Investor together change. And the raw strongly companies to deep capital I largest of was the take spend X.X investment approvals medical years. took clinical June the new encourage. by the innovation, years. more has time. these industry deal healthy. registered the Of pharma, that aggregate, Of largest you medicines. how a in all than the drugs number value in evolution venture upped have flowing recently productivity. do top of core in XXXX, XX% by available on money were was IQVIA the from of launches rationale through the the ingredients, doing record innovation the we’ve I’m it’s the top grew our all large trial deals we’ve we But XX that lot or these We investments, in data have in of building, a result XX and We the of XX back aggregate hope XX still biopharma. EBP the You investment R&D in. report, if of of level are XXXX. there in in space. can which is that analytics years the change originated In pharmaceutical XX with to a companies companies. in their five invested for emerging new by decades we of drug of forefront at of and believe innovative launches at half patented And the again

of by increased last five the molecules in XX% If development the which you at pipeline, XX%, late-stage years. look is number almost it’s in

X.XX, the our I innovative and very on a So you solutions. reflect perhaps, we certainly downs, didn’t environment, much yes, last numbers X.XX very, ups you were post than quoted the pre than described and the and Again we strong or environment. quarter-to-quarter, strength – strong have more from post in two X.X gains we we numbers very the still back Obviously, perhaps adjustment. as to see it’s some Again, just that posted higher you and the just reported share but of the competitors. the much of quarters, you did higher

Ross Muken

Perfect.

Ari Bousbib

Thank you.

Ross Muken

of here cash there loyalty of you in year? that walk the the of were a through just quarter? how one on other And free for disbursements the just the some few quick Mike. kind unwind balance some of in and maybe sort seemed over pieces and noise like a Can It will

Michael McDonnell

comment to happy Ross, So, on that.

mentioned incentives pay I first we the first in or quarter pay as So the annual remarks, quarter. prepared incentives in our our

is and is on quarter cash always first our quarter. So flow our cash weakest that always a flow drag

was as So that expected.

as from I have versus is, that came where between pay program, is in timing just we the when One pharma addition as mentioned, is card loyalty think, those I’d you our there clients two one which point to I the in to things. are that, coupons reimbursements presented.

we’re CapEx quarter, this can a it bit a it it of cash a And create And meaningful to – we’ve timing, it’s meaningful so been In then lastly, accustomed free just was and headwind. particular was we’re low-cost bit the or some attractive making a from points. very our flow. tailwind that but key those And is really to that, debt. Continue a than very a some higher think fruit bear to remind with to what we a headwind of you that to I’d very and happy very are good we’re really investments going be benefit we investments tax-efficient. continue and longer-term.

We’re flow our our we billion program over to should expect cash a pleased with sort share and free buyback kind continue of be that $X number. a time, $XXX year of million to

Ross Muken

Helpful. Thanks, Mike.

Michael McDonnell

you, Ross. Thank

Operator

Peterson And comes you. question proceed next Tycho our JPMorgan. from your with the Thank of line with Please question.

Tycho Peterson

down, we about year? of the Biogen dynamics Hey, maybe BIB comment R&D to and associated Solutions the talk how remainder was with how think the just just it about can higher is you thanks. for about as of on you much with wind Ari, And areas? it then starting revenue related Alzheimer’s why maybe that the pass-throughs, you think other for can generally and the [ph] maybe impacting

Ari Bousbib

Okay.

is, a in year we pass-throughs standard. So into general are this new

is to – a bookings still but for you number is it’s it’s we the estimate. analysis very we’re more We’re what very at harder – by already. hopefully, revenue, can of to much timing just strong, predict It’s an of getting better stage on service handle the have – pass-through the but booking just it, definition a trying pass-throughs of precise the

going depending to areas relationship it the happens project of, of without amount scans, goes being as to at into we case things of in in therapy, a harder, lot it’s has this have accomplished. PET again, that I highly the what majority. levels just particular That’s this say arise, up an the Then result, and work, In very of service procedures be all the exercise it a that that it’s therapy fact, ends amount the to some the have as stage. on remains estimate therapy but a area projects, complicated, a already but that more very relationship on to could even But on revenue you when the – in require how varying precise as lines highlighted the variation, the saying mix an they evaluate and that be to but to it’s to on for it’s the do of of business done was done in basis, recognize enormous terminated, unusual. big complex trial. we mind that a the booking complex so in – course And that specific of come That’s lot how for therapy lumpiness of them word of a right? the – to service area. in revenues scans, not service to that’s the that labor the into causes in a highly expensive huge the revenue, pass-throughs, not And in this saying there’s what even exercise quarter-out. estimate already work, project completion make expected time quarter-in, So as Bear that that’s timing be actual going pass-throughs.

of And reporting see lot like if revenue has show in large can a they pass-through stand unusual virtually have less at more work representative as actually a pass-throughs. cusp in stages backlog work, depending but typical If to finally, lot will of very have that’s it’s is of is is it your we data few out us, XX%, a pass-throughs, by a pass-throughs, much where you look full our quarter quarters, means really very towards disproportionate because regulatory -- does the a pass-throughs, philosophies. arriving services, from and hand, end project, you Also high nature XX%. highly of as at pass-through because XX% over bear look highly, trial right? what XX%, the you clinical XX%, XX% more, then you in and backlog, are our it’s mind, then If pass-throughs, the clinical the on have lab it science work, almost on work other driven no you that’s if other good of pass-through. could they little early FSP and the you is no there peers the a or for case functional, safety much that wins executing are the past in maybe have of projects. entirely closing other This

kind that’s not the you pass-through it’s some this an give So understand. thing, on – think, easy color which of to I of again, business piece to

our We’re call. And try we’ve do more revenues to to more precise we’re whenever swings become that’s we this some causes about lumpiness – unusual becoming trying highlighted in it. that and what

Tycho Peterson

terms of revenue the process here benefits about XQ a there talked the I one-off Was within in And of sometime. revenue take long wind with this any there R&D the is that Solutions? recognition kind can dynamics in down, to related Biogen you’ve in associated past know

Ari Bousbib

No.

Tycho Peterson

…and this the we about think year? the for remaining of how should

Ari Bousbib

of and until. no, told, – – down. press when our our it The there’s towards answer end to the on Frankly, nothing anything take it’s out quarter. do immaterial There focused numbers. with backlog so of figure we of we’re There of a to frankly, – we still we That take back – it the and conclusion of client we’re was we internally, figuring be it is we should we estimate out was No, with entirely – thought now, the was no to when and kind no. were first just still and just make reset. and conservative that the announced of was no. just nothing just But the wind all, to issued and But right working happened reason an release. them it and

just again, – the And expected the despite point that, existing earnings want sequentially. revenue from opportunity, that for I versus waited to of up we backlog is so is the think, we most all out first which months, is XX think the metric million in indicative next $XXX I And release. which that the

think to or year-over-year $XXX I million up than grow. $XXX and it’s continues million more

majority vast of go going – we about we that’s It’s trial, after of and that’s So of come back removed that we’ve two years to if – next essentially – again over most revenue right. – two, – was the number. two, that three years what us, that and three right? We dollar the the again, to significant you’re moved you that for mean, I years, into revenue to of trial.

you backlog X.X. NTM from If we QX back at of to end XXXX, were revenue XXXX, of go of

versus we you. reduction to X.X for the that. throughout and a – quarter, XXXX, trial. Again, jumped Thank now at while we were the of that at have after we X.X. $XXX million So And last elimination X.X we

Tycho Peterson

Okay. then you. thank okay, And –

Andrew Markwick

please? we our question, operator. take Thanks, Can next

Operator

your question the Of with course. line We’ll of question. proceed Blair. William to Please John go with the next from Kreger

John Kreger

in call. quick the clinical mentioned particularly growth rates, Ari, Hi, reporting? you’ve thanks. that given few a unemployment any manage how been low you ones. technology then just you’ve issues little machine trials? elaborate times on AI for Can staffing And on the using you’re you are and the the a US, the bit learning Two maybe Thanks. second, up having to

Ari Bousbib

Yes.

to but and amount do idea What together. like So of the look brought on out. the NextGen here clinical technology the the we the assets, on really a to is on talking model trials, vast about computing simulation and obviously, based for data capabilities trial this analytics, that while, be we’ll

trial used So shelf. new in general, that automated by to patient past. and key the you been in error analytical Automation, smart minutes, analytics to the trials. the as and including drive libraries done objective that gaining is to reduce as generate as are used that the recruitment, essentially has these weeks, in core off We – next be opposed protocol can size, right necessarily have targeting it now it’s can predictive generation to we’re if not analytics the previously research known size, our to scale doing We size by be investigation enabled amendments, accelerate eliminate or investigators. developing

think I indications. X,XXX year, automated cover covers analytics. XX we think, I this to have about XXX we plan like a essentially over countries. over – And It

that conducting. more of we about already So, are be will And we using today, vast a expect two, we within total have the smart operation, trials third than capabilities. trials trials in XXX next the of majority years, the that three these and represents the that

to enable So the our clients, waste, rework, all again, it’s capabilities that. market efficiency, trials, for technology eliminating our and about accelerating speed

John Kreger

And was you question thank Thanks. then cost labor. seeing Are about you. other hiring the pressures Great, difficulties? and any

Ari Bousbib

execute. to backlog large a have we look, Well,

do talented naturally, that so, people the XX are resources, and fact we we very we And increasing productivity. we have need but cognizant of the – hard work those on

for before solutions automated internally. CRAs, our to us the we solutions capabilities for for heard about working mobile also You more are apply them lot talk that can talk about be mobiles, the clients, world pieces of automated. we of A

agree where, we I areas, the ourselves which contrary our competitors. deployment you, the most to of there for OCE example, scientists Now wins, data for do technology, are with other the and part,

been and about that great have talent There We of far, that’s successful. mentioned large you’re my have expensive the so ones resources is deflation, waste prepared that. remarks, as We right. level question in done, some very very, I and – no we’ve

John Kreger

Thanks very much.

Operator

Please comes Jones Robert Thank proceed Goldman from our question. you. the your next line And question from of with Sachs.

Robert Jones

Great. Thanks the question. for

based at this over your conversion looking pretty expect on strong Just like the revenue quarter. next the it you in But sounds conversion, quarter-over-quarter remarks, steady XX guys prepared months.

just lot a over that dynamics should you up there. how curious, as we I give But are that sight, line there’s factors know year? confidence what much of So driving play move conversion the just pick the of at next the curious

Ari Bousbib

quarter, stable. – that’s Well, what, I you’re look if math pretty think, The in is the it correct. what that’s you

history. Our bookings have been to fairly outsized compared recent

an ones when our convert bookings of in take might especially of that, rate. And especially we causes Without the rate, technology, add, been. the burn acceleration seen contracting. individual burn the going to and In It’s sometime. it have much so using in projects, you you because of burn smart revenue to following decline – when not burn. quarter obviously, They rate, see the to the stronger new innovations add have you how bookings, a a going want lot the they’re the simply

so will more we add more. to hopefully, And and continue and

is burn to create in a we they this executing. will, good see have is, We you do case. one of in that always it do you the that So quarter. rate so the want that conversion. And bookings which every a and you important, you that will aggregate headwind, kind But don’t in we are a to projects if the increase add stronger when fact masks stronger cannot in actual headwind convert, and

by forecast a the basis and that’s for on So now, recognition. XXX cost a percentage as course, revenue update the calculation new incurred revenue we monthly standard. of our the calculate and project project of build total total basis, we cost, forecast this And, that’s estimated

just provide help you, the you we with and you the backlog, quarterly guidance. you to modeling, the revenue next we quoted, provide with and as months closing So from backlog, XX also annual

the the to and the So pass-throughs again, the pass-through at than as includes actually before, burn explain on can revenue. be on the backlog I times burn tried slower service

So a slower new of burn incurred business, possible on pass-through it cycle. you will stages product see is period are the later in stronger following net backlog because again, at life usually a pass-through

So on backlog takes hard it’s $XX billion puts the all a see very, over very and inside. the ours, large – like to

just is where burn rate So I given the we feel that remains told it everything actually very good you.

Robert Jones

going M&A in growth you as if assets? curious tuck-ins obviously, how could ask That’s does If TAS you also and a types well. bit are you big strong guys how little But highlighted what you that the just bolt-ons out of one that bit and a from business? I small as helpful, segment. landscape forward on segment. growth then organic just M&A quite in other do helping about in Obviously, can the segment, that But executing of deals look the And Ari. could talk are as far these TAS

Ari Bousbib

that X% all-in our that us That’s help no applications in X%. – capability. technology the acquisition Right. as Well, so was acquisitions again, suite, bolt-on TAS essentially small always like XX.X% complement means the bring were that we

buy talents. We we These us they hard culture, recruit in for We those bring of they in the out areas people in acquisitions honestly, not these the very like from X.X that we space. bring teams. done bring include where are present. space, them It included the and individually. the don’t some just in [indiscernible], We’ve regulatory very, and companies that in be safety have. points capabilities help pool recently Sometimes to of change would go we’re

are So we our are recall capabilities that offering there. Again, expanding the clients. we our suite we of strategy

take on analytics say about you. information will in another… is We integrated build seamlessly assets all a that fully leverage can June and but Board. same that applications are of strategy our integrated suite across our XX, to more the Thank the We

Andrew Markwick

probably have questions, for three we more time think I operator.

Operator

of our from line proceed And Windley from comes question. you. Please with the Thank your David next question Jefferies.

David Windley

I my the to my you your bookings, the about was had this quite of way sense therapeutic wondering taking It expected kind knew walking I’m protocol I after were really growth morning. And appreciate prudently absorb to that the a client for aggressive study to up wanted your of getting use have large of kind for Hi, if fact, moved which wanted XXXX. something so about kind into an as good of year. you second-half step give as cancellation second area, in this about you explore discussion. your only that quarter in if, in XXXX, in that and Thanks the the guidance credit? did you Ari, too written that much a interim XXXX, discussion this was a rate, questions. of careful you that was you it risky cautious. to And your relationship use I be thought, look the and you Can I could seemed much outcome. were of was into management certain

Ari Bousbib

had you this way – day that the client is wish no that eventually this no before, study I okay? idea no terminated. not right. will idea themselves be one, it happens. I were the absolutely any one, tell So I the might you

sound third-party the happen. You process, independent don’t itself not have They decision. – you a make tell these reviewers. things probably you me scientifically does how don’t company need to that very It’s

all their even is very talking for this have high traumatized I a look, This – have one to a patients with and – devastating to and that’ll disease all support. real the – of most the us terrible strong I is who client, employees for hopes. knew. need we industry, serious is find try at but mean, lives for – about then mean, trial no we’re about. for this this know, this certainly to which solution talking the the was news emotional you’re people, for been So dedicated

this. So no any expected of one

early as did looked we were will said is we fully conservative look, as Now perhaps know at and are calls, we continue it be to not be and feel again always very where that our and at in to when looked and We all. XXXX? be we the because, to we to we’ve I strong. we that I that Yes, to was good. quarter inclination say in possible be Environment would we – termination before this, able announced, looked on position. think more my And over – deliver normally under but, didn’t excited numbers to we to absorb because we this look, not every last we try promise be we way, we conservative hope – tried tried were that before, at were

anything to here the there expect several ask you can’t all by I there think, supposed Is us all There said nothing No. asking experts, actually right audit, I would happened. meetings that the to legal, happened. – As concluded? and is is our had before, anything? Do financial, reviews from to to I’m we internally. a questions, here? control, we material up all event internally I the no you do We to did we do Nothing change? need reveal

We’re okay.

a I think, company. we is again, large are

scale. have We

We have of wide diversity offerings.

Board, a We of nothing lot the across clients here. have

a very, that’s be such more a okay, a of company that client guidance happen. concentrated probably within be marginally we will overcoming our So, diversified, termination. But time feel is range things will from hard us, again, smaller standpoint, and that would another very comfortable that for have perhaps that even large this be less smaller, would

David Windley

would be And sorry. it –

Andrew Markwick

possible to one analyst, if want another possible. I question and try Dave. in more Thank you, squeeze from if

David Windley

be prior the Sure. great? ask XX-month possible have I’d to trailing in you would appreciate number be bookings one, it as numerical that dollars would the If just give press I releases, a Thanks. could it.

Ari Bousbib

the We’ll from follow-up. have that

Andrew Markwick

jump question, to we follow-up Yes, I on to that we – offline. another I’d let’s think, if try like can. and

David Windley

Thank sure. Okay. you. Yes,

Andrew Markwick

Okay.

Next question.

Operator

Thank next Baird. your comes Eric you. with with proceed line Coldwell the question. And our Please of from question

Eric Coldwell

Hey, thanks question. actually very like much. I Dave’s

we’ll ask do it that and one too offline. So I’ll

you $XXX in this I’ve morning, XXXX and of this of off that cancel thought, will and million other with revenue been It’s it. on say lot the things much specifically on did this component say, on I think, and largely bigger – us a So because pass-through of But admittedly, question. than specifically of how impact you of your did the XXXX? side my first

component… second The

Ari Bousbib

Yes.

Eric Coldwell

ahead. Go

Ari Bousbib

No, go ahead.

Eric Coldwell

Okay.

together. of of skews think, component reimbursables stage overall In this pass-throughs your world lower your ties mix, later in sort prepared completion, remarks, mentioned stage trials. new I are to all means which, the because in course, and Second XXX that you study earlier percentage projects, of

trying in but revenue timing book your coming plays when world. out? of to in will under all I’m – I’m now hitting think revenue growth be saying, start numbers triangulate think, the will trying of representing going today next to So stage what we’re of early just recognition this to R&D it’s probably us to as when a high frankly, in your year get spot these growth that be actually on going normal I you two, When to I’m you business? overall be sweet on they pretty – the do sense we’re a in mature? back of or see project just You’re be would or When the and more when could to revenue

Ari Bousbib

Okay.

they it’s provided, we I not any XXXX our any This a it why – we ranges. decided is we either much is does that to is we making numbers first be to change we the say result to taken of internal revenue knew of or feel before not we the not ranges you that as provided changes – part out in because will not termination, or the whatsoever On That material guidance are that of within this material. XXXX cancellation. are from forecasts question, how your that of did XXXX not our

there’s is moving and us It’s the nothing. on. no – So no, behind answer are we

with up is, – It on also you they typically it project the you’re two, can as on as And trial are come But The goes second-half yes, the spot I in after started. And question of revenue much bring to that’s in after those in you’re the start-up following accelerate pass-throughs of the dynamics three trial. as tend well. – sweet to tends the recognition generally typically, – and later does years the Second, not familiar on. right the three revenue. one, ramp right. in project be in the years one, phase mean, terms two, is

Okay.

Eric Coldwell

on of not ask one when out, year share it of say, that at the didn’t just quarters aging. if overall I’m you you that quote a Is of sure your with you if us I out, out, have six would but… us, level I’m based two if Maybe you’re can book quarters can that kind aging normal visibility, curious specifically enough. tell you

Ari Bousbib

strong XXXX can had and I you. in the Yes. In first of hugely strong we second-half had and XXXX, books. first-half the bookings. XXXX second-half XXXX, tell we of Look, quarter of very of of first all

as words, further that going other curve in sweet curve, that looking I’m – if okay, not spot future down. curve is still going spot. is we’re – some sweet further. a clear. we In time, and terms as my at this accelerating give I’m So speaking of that’s the I – can’t there you up precise at at a a of And in been slope a are point going number into when there the it well then I’ve keeps looking and

growth. of question mention correctly. up was it’s number, What Speakers] don’t of your my mention. did So don’t – the have here basically, asked me, my know you [Multiple prepared peak – a It’s in that’s think I But if in of XX% kind I remarks, answered LTM, the the And about N&B. I I okay? I So wanted front question you I did it’s in terms right? – the

Michael McDonnell

billion. $X

Ari Bousbib

or Yes, is post-call and I you bit in over that’s that will very much. little where clarify the that. we billion conversations. it’s a mean, number around Thank $X

Eric Coldwell

you Ari. Thank very much,

Andrew Markwick

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

Operator

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

IQVIA (IQV) 1 May 192019 Q1 Earnings call transcript