IQV - Earnings call transcript Q2 2019

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by. And welcome to the IQVIA Second Quarter 2019 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded Wednesday, July 24, 2019.

I would now like to turn the conference over to Andrew Markwick, Senior Vice President, Investor Relations and Treasury. Please go ahead.

Andrew Markwick

Jennifer. you, Thank everyone. Good morning, you call. for quarter thank our joining earnings XXXX And second With and and Officer; Bousbib, Michael Ari Financial Counsel; me are today Vice Senior Chairman Senior Vice and Vice President, Director, and Nick Relations. Childs, Executive and McDonnell, President Chief Halchak, Chief Sherbet, Financial Analysis; Eric Planning President General Jen Executive Officer; Executive Investor

will call our a of will that website will and presentation this be webcast. during on you referencing Events presentation ir.iqvia.com. be at the for we our following of Today, visible those our Relations available call also This be IQVIA on Investor section Presentations

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

addition, considered In and conference to supplement certain presentation. will with accordance a on and call financial reconciliation prepared GAAP these GAAP. comparable not is measures for in a substitute financial to the measures release should press which A we this call, measures in measures of discuss be non-GAAP non-GAAP included

CEO, Chairman would Bousbib. the I our over and Ari turn now like to to call

Ari Bousbib

Thank call. on everyone. you, our second for and Andrew, good XXXX earnings morning, quarter Thanks us joining

all Conference to and last great month. Investor you see Analyst our was It at just

which to to out our stock was event years the path ago the progress and of take lay objective the three recall since merger the almost you of was XXXX. forward As to

company very all the of from created are We this merger. that has unique been proud

this came above both momentum performance. ranges. release, and our largely financial earnings first with the quarter similar QX repeat was in and revenue operational Once continued Turning to again, strong a of earnings outstanding quarter our and guidance

revenue of quarter at of and was was driven above the $X,XXX,XXX,XXX growth in strong growth about revenue real technology our This by revenue resulting constant in From growth guidance segment X.X%. solutions came perspective, performance as range, quarter currency world X%. again last XX.X% organic analytics our Second a grew solid currency technology in double-digit constant and same businesses. and

solutions R&D currency. on X.X% revenue grew constant

last currency was about contributing with over growth Excluding revenue XXX growth constant was currency R&D constant to pass X%. to acquisitions basis quarter, through X.X% growth. Again points organic similar

will to recall, quarter, has second business As growing currency corner year-over-year. you solutions return sales report that the the of X% the in constant growth the turned objective half pleased medical of in XXXX I basis. we CSMS in with a the revenue said contract am to on second flat

guidance the was high XX.X%. our end of grew of Adjusted prospects quarter in $XXX about we'll there in a update diluted EBITDA towards tremendous million amount market solution. and from Second excitement end adjusted of And was guidance is business and provide on $X.XX EPS range. of of our a high above the technology our the continues our OCE to traction gain and clients first revolutionary brief range

SaaS in XX resulting OCE over launched won engagements in far ago. technology offering So months over since OCE team XX our new win XXXX, XX just the has was

important insight level best surfaces OCE today. the This AI next recommend for of to identify and that enhancement market is April. leverages which learning the launched available through analytics the machine was an orchestrated capabilities saw You that are that in any a platform sales in of This action is reps. our

research our used of life study this to in safety of certain consortium's by as contract demonstrates procedure. in a team for consortium the awarded in IQVIA was that choice demonstrate and of the This a large important with area. is agent the a partner the leadership Turning to FDA mandated real-world, this companies was this kind a long-term science common quarter, a

In addition, in our clients are world the space. for a increasingly looking partner real

were we real XX world outsourced This more both covers a company. provider for a pharma model and the years the outsourcing includes all studies, award named which preferred During large engagements five hybrid next quarter, new will in-source regional implemented services. than and over combining

and based in learning us advanced really competition. capabilities Our from both prospective apart the set analytics machine predictive research

of backlog XX% quarter Moving billion to of momentum $XX continued another R&D, team business, year-over-year. over with grew the their net almost strong new

quarter we book-to-bill growth it, R&D robust and bookings another bookings. you great for at look had Our ratios remain way and whatever

on For was our the XXX, book-to-bill basis, excluding was our pass-throughs pass-throughs contracted that for XXX as quarter. an book-to-bill quarter, the is including XXX

book months, our XXX the Looking on as XX pass-throughs, XXX was still last at at service basis is bill contracted XXX LTM book-to-bill to on an the basis. an excluding

with of In smart quarter $XXX gross excludes associated in record addition, the R&D another team billion awards these is launch new $X.X over now We pass-throughs. core core again which bookings. excluding over secured have pass-throughs since million business awards, power trial of power that

of to recognize Finally, turnaround I'd contract sales team like work our the management of to business.

very to We our of fruits the quarter of the efforts their business with and growth. across to sum, even all have a return stabilization we see are In strong modest businesses. very, a beginning

review financials in will detail. Mike now And the more

Mike McDonnell

everyone. morning good and Ari, you Thank

seen, solid As you we have quarter. had another

to revenue. first turn Let's

X.X% grew billion at $X.XXX reported X.X% of currency. constant and revenue quarter Second

currency. billion $X.XXX of revenue grew X.X% half reported and X.X% First at constant

& reported Technology $X.XXX at billion Second & grew X% quarter currency. reported first of and and X.X% of revenue half grew at billion constant Analytics Technology $X.XXX currency. XX.X% revenue XX.X% Solutions Analytic Solutions constant

X.X% rates of revenue R&D currency. at FX Solutions' actual at second grew X.X% and constant quarter billion $X.XXX

FX currency. and of actual billion half at revenue Solutions X.X% grew R&D rates at X% $X.XXX constant First

declined currency. reported Sales Medical revenue $XXX grew at X.X% Solutions Contract & quarter of million Second constant and X%

X.X% to and at rates to million progresses As first after revenue constant decline. Ari half & mentioned, Sales currency. the we Medical declined Contract year expected actual years of this business growth several transition at of as Solutions X.X% $XXX FX

$X.XXX first half $XXX to the quarter EBITDA now of profit. and for the XXXX. was Turning Adjusted second billion million for

Second income share diluted million GAAP $XX net quarter and per $X.XX. earnings was GAAP was

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

million net for was quarter first year. and half for the of $XXX Adjusted million the $XXX second income the

Second per grew quarter adjusted $X.XX. XX.X% year-over-year to share diluted earnings

adjusted diluted share earnings half XX.X%. First grew $X.XX per of

June the billion. to that turn backlog. backlog was the to now Closing Solutions months convert backlog XX XX, $XX.XX expect R&D Let's of over we XXXX at approximately billion is to and revenue amount $X.X next

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

X.X month Our XX our net times EBITDA. trailing adjusted ratio was leverage

$XXX.XX. was activities flow was quarter cash of second million. and CapEx during from Cash average free price second the flow We operating $XXX the million was million an $XXX $XXX $XXX million repurchased in stock of at quarter. our

XXXX Let's now guidance. turn to

We XXXX guidance and guidance $XX.XXX between FX billion. same are headwind the basis billion previous revenue This and raising full year billion billion $XX.XXX was from $XX XXX our between points. built about $XX.XXX assumes to of into that be our now guidance

to year. for outlook of guidance mainly and driven Technology the our performance update revenue in a segment strong is in the organic rest by year-to-date organic this & This range our Analytics Solutions

more The million EBITDA range and on guidance We the have at to range visibility. the $XX $X.XXX midpoint new $X.XXX we of now are is by range both tightening our the billion as ends affirming adjusted billion.

about $X.XX note and EPS moves from and is for expected be diluted interest lower raising other. interest by We about line the bit bit $X.XX are the than each million items, to the the Please a depreciation $X.XX, $X.XX. to range guidance so between between essentially also depreciation tracking adjusted to $X.XX $XXX We for below year. a $XXX expect and offsetting that higher, our now million

tax Depending of XX% see on The adjusted still favorability tax rate the year. that of point. lumpy least is but quarter are to half efficiencies, book we we a on to for number always a trend at about quarter, could

to The provided XXXX. be adjusted tax June assumes XX% currency XX of that effect rate rest in about still is for the for The the at year. guidance cash rates foreign remain expected

quarters, guidance As providing are coming for also in quarter. the we prior

third between million rates to adjusted EPS we $X.XX. end quarter, currency $X.XXX $X.XX million at be billion, quarter, $XXX third the be to $XXX adjusted and $X.XXX between revenue and and XX expect between foreign to diluted For June the of billion be assuming through and EBITDA the remains

third adjusted tax but then growth QX Please to the guidance EBITDA full just Year-to-date, we expect resulting it revenue I do XX.X%. as X.X%, tax X.X% in year mentioned, expect rate of book growth diluted discussed. and to adjusted represents XX.X% rate just same EPS ramp note, quarter guidance tax quarter based growth we in on rate the adjusted guidance X.X%, to about X.X% fourth the of will be to of that I this the

ranges. Technology with sustained added far momentum. Analytics to now second at R&D delivered So improve. the end or and high over of continues XX guidance results quarter year. their in above our wins this XX we has Solutions Solutions strong CSMS OCE so summary, &

team of The the have R&D The earnings quarter. and record wins book-to-bill secured pass-throughs pass-throughs $XXX gross raised ratio The new our revenue was X.XX another million. business for for book-to-bill the powered over X.XX core times was LTM of times guidance year. quarter including and excluding we

hand we me it let things can for to the and operator back Q&A. that, With open

Operator

comes Goldman Please the with question. [Operator line with from Instructions] of question Jones Our proceed first your Robert Sachs.

Robert Jones

there. two Ari the on ones strength guess, just RDS. I quick mentioned clearly

you all in metrics evidenced You the results and shared.

a at fairly accelerated of comp. off an backlog You be difficult did rate to what appeared grow

you up continue cancellation So of removed just quarter. had you of just where if bookings board, I revenue you where in I'm you be backlog, to be housekeeping willing it And maybe curious to guys one curious relative that know quarter incremental out this share might a BIP much strength but across there saw then how to but the I anything was if quarter from the question. across show would parse trending. in to been is large in last

Ari Bousbib

Okay.

Very address the Let just me second little. part.

Okay.

So negligible.

bookings or revenue So whether it's the essentially, in behind out. number us this just in the is numbers is

had question strong first bookings. we the asked the bookings would what, you The I say color quarter. exceptionally was an on

the saying comes might so them are to it forever, because the variables noted on compare a that we've disconnect that ratios And rely which there fraction. is don't don't book-to-bills, many than show across and book-to-bill little board, have you on fact to the that been know, what use that you affect other just

of extremely you is the XXX the a on we proportion had X.XXx, and disconnect, issue. work, of a services which have then which reported And lab strong. X.XXx So is you If the is extremely same pass-throughs. reason And - noted a will exact on strong will, if proportion the also of same is book-to-bill basis. CORE clinical, pass-through excluding you basis, FSP, mix for type other we

you as to margins, know they I which for most CORE it repeat of before more suite typically portion want our and the here pass-throughs. clarification, bookings whole are the said services, business, higher attractive are are come with We've they of clinical in

that So CORE it normalized this on this indicates X.XXx higher the is good the the to in what quarter bookings. strong proportion historically. very with you a the relative It - proportion is mix has very news. of of here significantly That's higher bookings in been basis is clinical than number quality

Now quarter it the in the suffering is the because headwind denominator a which be, higher fraction to revenue pass-throughs. from is happens still from is the

of So relatively two clinical to now headwind pass-throughs of bookings decline historic denominator, result still revenue the you hope still on bookings, quality mix because CORE and have going and of on with a lower clinical we're of CORE have the of year-over-year. were bookings pass-throughs as you've here, a higher normal you've a clear. you that's because higher executing a mix a I in which got things which less relative got

the you book-to-bill expanded a show chose explanation. - do everything on you underneath. careful trend And the a number ratio, to is quarter. case, giving when our And give be see explanation same reverse because want again just that to you in there lot the this LTM, I the two, will this when again I'm we A, you given

gives of not of is you the just quality mix, - the dollar just course, on mix. but come looking with were and much smart powered the which I are more. also clinical pass-throughs, I hope of lower you that trials, color of you kind CORE which the in convey in of this how the terms are the as because Included again of even CORE services. explained very strong of higher they all are number, proportion encompassing to maybe a bookings sets all to and all Hopefully

Operator

the comes question. line Our next Evercore question of ISI. with Ross Please Muken, from your proceed

Ross Muken

the in to kind on that Maybe parts there have general, contributing seems momentum. kind continues SaaS feels of elevated. tech business some some of And the being M&A of on obviously of over other growth kind business, overall you've gave helping Obviously also But the it rate to part the it in there. based TAS of growth you like us accelerate brought years good number of is business-the the color the OCE. like in to a

feel a single-digit material get us been. contributing some of where pieces helping high give a acceleration maybe that of growth, outside for that just Just is obviously you've of the are of to kind which business other OCE

Ari Bousbib

deployments. generating Well, thank Yes, most OCE more we are largely occurring have implementation yet here for you amount attractive the you contributing been phase those license, for We're those. you're revenues the as in months of not over exactly XX associated in just SaaS past huge questions. the phase. is and wins correct implementation with not know because the We're a

And come. so to that's

of contributed One-third said businesses model essentially I'm can digits. grows generating assume rate as you it this at strongly suite data as to nothing, and services again grows saying TAS, labor-based economic business three outsourcing continued is of X% it can X% traditional One-third that and and our growth Analyst mid-single flat. roughly, time essentially, our So know we is type you this think the business businesses, organic here, that - on products you zero, of and Meeting that organic at business portions.

services and XX% some got the a clinical includes then introduced are a the growers technology the investor technology one-third talked about bit including are businesses conference, products And is now more plus, suites suite. that pharmacovigilance, we those you little that of have critical those high products safety, at the are that compliance, of double-digit almost that we have of

real those So course, our very then strong of the very which is and strong. world you've technology are got portfolio, business, all contributing of double-digit to growth in

to this are we and this we hopefully for. commentary, specific with we where with diagnosed is about introductory more earlier being to will everyone in already this this really AI As medicine lot learning a I my can some predictive But hope the anticipate mentioned that that point someone personalized that where toward and this the a in is therapies seeing we be seeing disease able get in toward we're future, analytics is a anticipate has talk really certain what future. striving more can going machine to and been diagnosis

assets, we it we've said we and tools, the strong been and growing the have to We've have the have the before, technology we people double-digit. together bring why this is very

on supporting going what's that segment really rate. that continued that's and So X% in our is growth organic

Ross Muken

gaining And mean, feels the R&D continuing question you've row the on you obviously several It's prior business. clear are a bookings. of had quarters superior the just back in it going to invest quite but like, I you're share maybe to in business. also

group the of Analyst those tools. terms of the of about I at about outlined customer of to the line sort see are you you think thinking You of sort that versus the and advantage CapEx increase, kind guess in continuing you Day, realization the then in CapEx how at peer of software the and your all of as efforts in it many side.

that's having to some place offerings advantage becomes them sustainable customers? out to push kind that think start far watershed of the coming asking terms in at more a some market. of as see, are Like progress, clear of them opposed and point, Like from about proportion on the to to to of we you continued sort customers sizable you to continuing you do tools a the there's larger I where think would NextGen how event of you and have more where

Ari Bousbib

these in the we inning XXX think have of of I us, around second go. runway are biotech with that don't customers optimistic know, again, technology, of got to bought best. side the specific terms extremely We've smart customers. the have Look third trials terms I pharma just, ahead I in on we're Well, at ways somewhere XX or we R&D solutions mean

lot XX X is account have got potential We've unlocked, pharma clients. XX that got previously left. there a top work the of there, of been dozens so doing locked of We've

we've to I have think go runway. We great got ways and

Operator

the proceed with line Please Morgan Our hear next from is Stanley. Mr. go with cannot open. question line Please Goldwasser, comes your We ahead. Ricky your Goldwasser you. question. of

Ari Bousbib

question. next Okay,

Operator

Our line Peterson next comes Tycho proceed your of the from with question JPMorgan. with Please question.

Tycho Peterson

I EBITDA want outlook unchanged. the about to given it's ask that

Just Given increase. of a that curious aren't CORE road? going is higher a higher margins with down margin the bit revenue EBITDA why guidance proportion, being the we see shouldn't increased a and tailwind

Ari Bousbib

we've right. phase sell typically solutions road significant Yes, essentially a no technology field is margin. thank in the you. has of deployments Again, got that when Down our we implementation, the

a headwind. that's So

got is in that business the our our Secondly, got to investments as P&L - significant of development, market whether that true investments have make to capitalized. making that in our by we're R&DS. technology development, software to that's we're costs also and we've higher it's headwind the margin But we and making. Obviously, so We've solutions cost extra are portion still a order all resources, take in in continue way, in well.

to are we a live are clients not the love coming spoke bring just prior and question ago, in. always - solutions moment are runway where these market. trials we're and about at we marketplace we and our suggesting not in knocking position highly competitive quite need This still there in It's We we our be for is very a to a the door, just yet. smart to as world sitting we while would the

just have still capabilities buy this or or world selling - capabilities resources we these every believe whim so is saw to The development is very or a cycle trial our of aware the People and been in need the OCE and is knows on well. believe and we a an what but an with don't the competitive long business client our have efforts. bus all stop. that's not advantages, selling ad we do at about long as because familiar process they investment You clinical unique are become it

of that All margins. is to headwind

So economy, investment, in you trial, in the got scientists, the teams, inflation. And again area I'll and software at remind least investment, big deployment full a automation, data of employment all of are more in US a of there live big those - trials virtual terms is a headwinds. a we of in wage is more investments, OCT we've smart so is area OCE

those of our frankly, that EBITDA and, it able are we expansion. continuing margin because containment are to committed programs performance be we and to cost All are do and that we margins that's generating. we're headwinds that is the still the - generate continue with to great to And and of margins

EBITDA the 'XX, in During and expansion growth are of to more the and majority adjusted expect of the year. investments in see weighted margin particular, our year we back end toward the first-half

the And by that been consistently. has way the case

you kind pattern back first the that's have and years, We of, third the second at of got for lot If reasons we've That's it happens. in in typically ramp lull but nice I quarter. look the know, typically a quarter. did what a prior don't

the beat we've the about raised EBITDA and of see you. EPS, of of that. it $X.XX our feel confident full we upside - first half adjusted diluted will, that's fourth stick, back you more on then most quarter, expect we year we a guidance so we then have a done if that adjusted we by But so our to in of That's margins. a why EPS go QX, including diluted there them in ramp and in Thank and is And hockey if more ramp, before, fourth and check quarter. you less

Tycho Peterson

in quarter one biopharma, on your awards and to can then - the biotech And customer the comment you how emerging how are mid-cap after biopharma efforts base? going follow-up, were go

Ari Bousbib

rate, to and date, terms as to National the is the terms like year's funding be through in biotech no we for last a so The the know of funding about seems environment record in did end the to annual strong. of you Year deals billion us XXX is as a value to There funding. strong level Association, environment far according We continues, QX with Venture very so. year. was Venture as which was change tell, Capital or deal far. of running it exceptionally $XX can

Mike McDonnell

market the That's information.

Ari Bousbib

then think can confirm That's The - information, numbers about is that? that - it's I the market and yes - you before. XX-XX,

Mike McDonnell

Yeah.

the EBP in bookings quarter XX-XX. So versus for about are large

uptake CORE-powered the think soon space. very or the we lot coming our than I But of as biopharma. from and we're from a really environment mid-sized the balanced still getting growth that's larger after merger, very I the saw the demand now of healthy, lot good said, are emerging is a awards think more biopharma across clients. But Ari emerging seeing

Ari Bousbib

the were - XX-XX was it large Essentially, awards pharma-EBP.

Mike McDonnell

Yes, correct.

Ari Bousbib

thanks. Okay,

Tycho Peterson

Thank helpful. that's you . Okay,

Andrew Markwick

to the I think is again, Ricky were going Ricky we Goldwasser line. if operator on try

Operator

of next Ricky comes Our question with Morgan Stanley. Goldwasser from line the ahead. Please go

Ricky Goldwasser

Thank the taking question. you for

composed So, a question business. is point, bookings of bookings. on earlier the To higher your the actually quality

of margin you the just remind impact margin what how And type like, kind about can like timeline see with or kind on you and these when the that bookings like the we recorded enterprise? of kind versus lag we should of margin So between when think the expansion? booking associated us is also of

Ari Bousbib

not is answer. it's the to value, we a in margin not We're which going That's FSP - lot giving a question, little sensitive margin lowest so and but highly in marketplace. giving profiles. competitive information, the for general and lowest maybe the that fact essentially is in a it's just of CRO a I'm our an It's But it's of provide So CRAs a margin acknowledged is, bit profile. margin we're try, - a not first nice fact though. just

the a not maybe but higher has which that little business You've margins bit got lab much.

that of above. full and call is the the outsourcing and stats You've The full is data one clinical of includes higher got the business. everyone what we science margin the really all business essentially clinical, is the trial after core the which

clinical definition, obviously higher value-added have on it lower by labor higher the content revenue. of the a activities because relatively margins mix and that's in total And trial, includes

the higher So that's for its why margin. background

question, To happen. that does the when second

to you start As know, it the to activate takes and trials. sites time

So, revenue usually when that's the and realization peak within years of X of you margin XX you activity to get start to a the trial, to months get peak

Ricky Goldwasser

very much guidance. So in long-term the with line

Ari Bousbib

when to usually out course years the is trial, of the close X X which you And into trial.

Okay?

Ricky Goldwasser

much very in kind with that's line Analyst So in Day, like of guidance more loaded? the long-term that's backend provided

Operator

comes question Stifel. line next your Our the Rosenbaum with from Please question. proceed Shlomo with of

Shlomo Rosenbaum

you bit months kind contracts. what some last competitive for and rate your last talk the Thank of X launch? about or you is competitive taking And - the much changed XX my it OCE updated many OCE them about win - very question. the Can with over of months, Can recently last how little quarter, of you takeaways? you talk a the were has with

Ari Bousbib

Yes, - situation competitive a is I mean look every situation.

that We the are of at are competing same one with single the characters every client solutions in looks the marketplace. same set and every on

the two-thirds somewhere around to rates that we Our two-thirds of win stabilized is above or - competition in. XX% participate

So you that's further do Andrew, any color? have -

Andrew Markwick

Historically, the two we're three in have in at and three. probably team now one would

Operator

comes question Barclays. proceed with Jack next question. Our of the from with Meehan your Please line

Jack Meehan

to on as what I some OCE maybe at if bit of little How to I more guess you go thinking think to you in of be year-end. deployments. that is something trying growth stepping quarters. the I'm a this revenue recognition pacing it organic should is And we up be the look into was that? of just color should the about related the get hoping the last actually TAS we X% Do was couple

Ari Bousbib

you deployments other look, want continue Well, have we always and layers solution as to OCE technology deployments. new strongly we selling and will so, of can

revenue you, Technology continue the to told segment we driven organic a performance year year. see outlook year-to-date by strong mainly of guidance our in is rest organic And our for we in full the the this course, Solution. of As in increase Analytics

this and to X% I single the constant growth high the meaning digit we a of next be segment period, guidance organic but definitely three wouldn't terms the sustainable organic currency, toward years and type we XXXX. rate, inching provided assume X-year in in of end the for - you we rate the month run toward toward toward are ago this double-digit is in - of new with in expect that end of accelerating

or I mean an there phase, X to doing been you if be only businesses would since be our we merger, out integration years. you look thought and It's at which and step year little back now the years to next an where point more than acceleration over bit increase in hope line We're seeing X we're the turned sustain top acceleration that we years. our what X and we've inflection of period. and at X was

to And when expectation hopefully be across period that end to our it a goal to is then then to territory will say level that we in get the market didn't and the is us we will our penetration of certainly double-digit even - that I'll at I enable scale conference, businesses. of say get that the now, investor

Jack Meehan

I expect it headwind actually the in to in bit a be quarters. a of could there one give been couple it's of know had just the know I pass-throughs follow-up. half? Do or that you the Any Is you last quick I little any Mike, can flip? on color R&D, color for would persist great. back

Mike McDonnell

Yes, talked was over I quarter, think that the We through headwinds first the about pass in basis points. lumpy. XXX are it

that. half roughly we And is a bit maybe for what than of think seeing the Second little pass with that maybe that. quarter anticipated overall, M&A year, in higher I offsetting originally roughly R&DS we're was through headwind what

the So in organically about place. overall same

Jack Meehan

Makes sense. you. Thank

Andrew Markwick

agree I just what now. said with Yes, Mike

that XXX is our think mean embedded in see we're estimate guidance, told more that best now. I you our right it's lumpy as little maybe basis bit a we the through points full year. We but you I go year giving we now,

Operator

question UBS. question. Brennan of Dan comes Please the your Our from next proceed line with with

Dan Brennan

late. guidance, organically, that? just updated you for the the just Thanks. and minutes of rest was can few wondering of a the for year Mike, clarify I'm joined I kind Ari anything there and

Andrew Markwick

segment QX, TAS really Dan now. Ari out other at the one in right of organic X% Yes, seeing in I mentioned questions, in QX. the think in X% we're come just We've strength

lot range Analytics So our the Technology we're that to of that year organic & due full guidance business. in Solutions is strength a seeing

for X% I the probably that digit new don't the high toward is business. of the single rate but growth rest its organic run think definitely year inching

the up we're at $XX pleased the and the definitely end, went we're million across low So end seeing million at by high $XXX the board. strength range

Dan Brennan

And thinking organic Andrew, an that. I change you're but side, R&D basis, about anything from you on And thank the how like half? then apologize, the for there similarly, back

Andrew Markwick

before. of what to kind to the year. our expectations change tracking said still for We're we No

Dan Brennan

or I know, you in and of kind - NextGen so a Thanks. discussing - earlier your Analyst Day you kind have then conversation, remind us trends. of how some the offering? only you and of again what the percent actually win today Ari, would NextGen rate And know characterize offering just your like Could on the clients NextGen ago of seen month I was the non-NextGen versus were

Ari Bousbib

I joined we Yes, again, some I bring I we of the trend market you continue guess, ago total a a call, and mentioned, saw very before - and we to month those the to that have guess... continues in numbers, discussed you just that this

Andrew Markwick

enterprise. We have across X,XXX clients the

Ari Bousbib

Yes.

I - little Thank I a trial numbers. the mentioned our get you. all maybe solution, us. bit only continue XXX those ahead solution, runway But a before, clients with we sure have XXX guess lot is than We active X,XXX and smart this and you'll I'm NextGen now there are customers less momentum of so so of plus and the our

Operator

Draper question with Please comes the from next proceed of SunTrust. question. Our with your Sandy line

Sandy Draper

so - because just stock looks we next a flow offset. better of When this questions thinking quick this floating quarter, in remind to and know, of the then the back about we are Most at nuances rate, the into Mike. thoughts about don't of my about managing sort about obviously to to going debt's more obviously been debt in that year And step think using me just rate is interest of do see buying capital year, point a I have terms how trying up, Mike. the some versus balance - up to guys asked and when you that, Thanks, of think low-interest just the cash operational you maybe understand for structure. and just start one does continue if environment,

Mike McDonnell

Sandy. Sure,

first look variable we're our the about the and Effectively you fixed. have about the variances mix collars the fixed XX% but and those XX-XX, we rate all when got. very So exposure versus little at on pieces, it's the effectively we've caps and other when surface, rate at swaps look question, to you

rate movements. XX kind like put to point $X So insensitive context, very million. It's hike in it to basis rate very, of is

little So to very rate I that movements. think exposure

X.X And to continue still of our Overall, release. stock of earnings our very a at We've you we'll got be we spot we the a times, buyback ended is which where of continue right as quarter terms buyer stock would good be. a our in as We saw in in debt sweet to levels. see investment. of said the share authorization, significant amount we

down going more to manage come to like the conference, are our to in to investor expect X.Xx same and in sheet, much Xx, as And the still we exiting we've as continue at balance we said said. XXXX over very are place so time we

Operator

comes Please question your next line of proceed Erin question. with Our Credit Suisse. Wright with from the

Erin Wright

mentioned You or this NextGen customer what the of from much meaningfully what assets the does of should of from over How that partnership. the with relationship? And it data real more the we was this genesis in and the contribute preferred previously were a what new world of perspective? win should space? have think you the - terms the a working about maybe function the How contributions in time like was world real you global

cost a guess on I just question then I cutting. have second And

very been there. diligent obviously You've

of you During of cutting. cost as part the XXXX your Vision next kind Day highlighted Investor wave of

I of still the think on you I wave next you the and the from mentioned of be guess, you we terms in there cost that thus progression there and a of the standpoint? the key savings. identifying what were identified thinking initiatives have cost-cutting far should Thanks. how about progression some

Ari Bousbib

repeat human Erin. problem got unique before, is vexing consumed. is built, been and of at a Thank really to about length and we that be which what saying data infrastructure world the We the companies This in cloud side spoke have guess and most Yes. just allows issue healthcare data we've the the critical what you, confronting. have many been science I on real the capabilities. we've set

Even data scale assuming the required, that's source you could all the required. that's

from the no close to And comes remind level but then global of artificial of analytics to want fraction consume and standpoint do I predictive utilize one required. in and and terms you, again, those layer analytics work and a those those technology be that and we granularity linking even at the to technology the interoperability the able data intelligence scope, of data mine the the that's and assets, assets that coverage, of

can that combination When that of that spent There's forwards few one and past the coverage those the time type trials all solutions of unmatched over kind and any the I'll expertise analytics those developing Again company push-of-a-button you - bulk unique. engagement. of that's So with are we're just in years running bring the therapeutic more integrating on of it's scale of of level. trials. assets. kind a the we've global that combine assets you, these clinical than remind our very and our X,XXX world assets in in has no therapeutic

the another. the are came big FDA next years. of at were And that of undertaken X is obvious so one time used, on and a one And has and years. job is we us of And partners that pharma. point It's a next us. that's commonly consortium in X these to every over This over naturally partner agent very think I safety questions for in here procedure or common the there the an consortium very these

a that put Again, company just move question. of aggregate, in in that's going are out above going shoulders the it's that unusual, us capabilities be type that's revenue we not anything dramatic and our it's head the one that again, engagement your our something needle the to is essentially to was - of fashion, demonstrates if But there.

Erin Wright

Okay. And then I guess on the...

Ari Bousbib

on. And regarding the second question, that was

Andrew Markwick

savings. Cost

Erin Wright

the Yes, on just cutting. cost

Ari Bousbib

now look, identification. essentially the basically of launching these gave know is color on be and we going what the Yes, are early that. with be I between end next will to mean, year. I programs, but year, refinement We We done we're some doing the enough

is not as basic reengineering lot the cetera. I said as a base, after and of scale was base overhead certain have perhaps And base off-shoring merger. where process of is consolidations it at on we capabilities, and SG&A This conference, continued the this et is more automation IT

to activities visibility we procurement, gain on know XXX that. we in how it's some continued operations very of and this this. have one at the scale areas, and same as we're question. Maybe Okay more we do not is or continue type This to XXX confident

Erin Wright

Thank you.

Andrew Markwick

take please, I I last we're the coming just question, on one if think Yeah, think so hour, up we operator.

Operator

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

John Kreger

this talk about questions, know you OCT QX? mainly bought I talked of can the out Ari, Solutions, far assets Sounds the so in rolling the I later Two year, assets this but particularly you've And year. you've think you're R&D the first, of nature in about buying. like question, that's sort that second just

smaller next frame a OCE a is it do As as business than few just Thanks. you - it you opportunity view bigger little to or bit? the think about that it over years,

Ari Bousbib

no like R&D. very quarter and actually. what we we tiny On I little that million the this think a like and did the had R&D couple small added the acquisitions - the I first We in in little thing thing small. one our little a that small million what in in spent second to quarter?$XX think had number had we was maybe acquisitions, of a something technology - thing We think tiny, like a I very acquisitions revenue, in quarter

last from acquisition the new another more in anticipated. the more bit quarter, had R&D, did little I I guess an revenue. in did brought we acquisition. bit in I In fourth contract in And we think a that quarter think year the the second little acquisition actually contribution a mostly that than came There generated

here maybe acquisition you're again, if But a very and then million, remember. brought a tiny, couple in of talking I that single-digits about tiny

things. new then little one, really technology two very on little R&D very, news so like here is and very there is the So side small,

Andrew Markwick

small a just company. Yes,

Ari Bousbib

question Yes. was.. And second then the

John Kreger

The second question OCT, little was thinking or smaller your on bigger opportunity.

Ari Bousbib

market. huge market finite revolutionized as not was it's and Used well that's that the for is and potentially a a has continues, market been a market CRM did a the in very extremely market that it's player, but It then that systems solution one leader in be as market old is very defined look, for to who market. market. with reps It a be by sales because mature is decades. CRM there pharma very old the So, type market, to remains CRM a well introduced a SaaS on-premise that

market grab. it's share fair technology the investments obtained superior like that sales claim actually our plus number Okay, just finite of we that of no we on against are there's of market an sales just what a capabilities has on the in were force. reps is It's that's with is feel share market our happening a competitor. that simply back - and OCE feel large great can of and and XX% We play - market share back There's it. competitor a we is - market growth that more a and market in OCE that that's and partnership

With technologies manipulations processes prone included OCT, clinical its and of tools respect of the to error, activities rework about lot that across deploying lot were the and to labor of previously essentially in suite a that automate to trial, and a inefficiency. and paper-based

because attractive really in terms labor of growth yes, processes. OCE historically paper much is automated potentially say intensive hard and but converting set than it's more larger to the processes So very a and market quantify marketplace its the the I into it's patterns, market, of of size would the

and to That's that actually difference. as know tools to And will the interconnected. who automated are many you other to would that bring create solutions like it's market. people - point are particularity is we in OCT each of that how speak the There

are built seamless be which conference of we and turned as sales are and of bringing suite to a on well. on interoperable other that speak force are a demonstrated investor the off or at tools each platform connected We as suite, can all and and in in that a

Okay.

Andrew Markwick

We will be any question, forward call. our to the you of your for again look for everyone join the available to time for might you you. day. and earnings rest speaking follow-up to have the with on quarter Thanks take XXXX John. taking Jen today. Thank I third you Thank questions us

Operator

you this gentlemen, call. disconnect you and lines. thank Ladies ask and day, conclude everyone. for Have your conference We kindly great that today's does your a participation,

IQVIA (IQV) 24 Jul 192019 Q2 Earnings call transcript