Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to the IQVIA First Quarter 2020 Earnings Conference Call. As a reminder, this call is being recorded. Thank you. I would now like to turn the call over to Andrew Markwick, Senior Vice President, Investor Relations and Treasury. Mr. Markwick, please begin your conference.

Thank you. Good morning, everyone. Thank you for joining our first quarter earnings call. With me on the call today are Ari Bousbib, Chairman and Chief Executive Officer; Michael McDonnell, Executive Vice President and Chief Financial Officer; Eric Sherbet, Executive Vice President and General Counsel; Nick Childs, Senior Vice President, Financial Planning and Analysis; and Jen Halchak, Senior Director, Investor Relations. Today, we will be referencing a presentation that will be visible during this call for those of you on our webcast. This presentation will also be available following this call on the Events and Presentation section of IQVIA's Investor Relations website at ir.iqvia.com. Before we begin, I would like to caution listeners that certain information discussed by management during this conference call will include forward-looking statements. Actual results could differ materially from those stated or implied by forward-looking statements due to risks and uncertainties associated with the company's business, including impacts from COVID-19, which is discussed in the company's filings with the Securities and Exchange Commission, including our annual report on Form 10-K and subsequent SEC filings. In addition, we will discuss certain non-GAAP financial measures on this call, which should be considered as a supplement to and not a substitute for financial measures prepared in accordance with GAAP. A reconciliation of these non-GAAP measures to the comparable GAAP measures is included in the press release and conference call presentation. And finally, please bear with us as we're conducting this call from various remote locations. We will do our best to make sure the call goes smoothly. I would now like to turn it over to our Chairman and CEO, Ari Bousbib.

Thank you, Andrew, and good morning, everyone. I hope everyone is safe and well. Thanks for joining us on our first quarter 2020 earnings call. I want to apologize in advance that, given the crisis, I will be a little longer in my narratives today in an effort to provide you a good amount of color on what we're seeing on the ground. Of course, as always, if we don't have time to get to your questioning, our team is available to answer questions after the call. Today, we will review our first quarter performance. We will also provide guidance for the second quarter and update our full year guidance in light of COVID-19. First, let's review how we've been navigating the challenges over the last couple of months. We've instituted a precrisis management structure to ensure that we align on priorities across the organization. I've been meeting every day with my senior leadership team. As disclosed, communication has allowed us to be agile and decisive in our response to the crisis, and collectively, we're currently centered around four priorities. First, the safety of our employees, patients, healthcare professionals, customers, and suppliers with whom we frequently interact. To limit exposure, we prohibited substantially all travel, supplied PPE to field-based employees, closed facilities, and have most of our staff working remotely. We've added bandwidth VPN capacity to our advanced infrastructure to enable remote working and avoid service disruptions. Second, as clinics and hospitals have become inaccessible and it has become unsafe or difficult for patients to travel, we've continued to do everything in our power to mitigate disruptions to clinical trials and ensure patient safety. Wherever possible, we have been transitioning to remote monitoring with the number of remote monitoring visits reaching five times the level they were prior to the crisis. We have leveraged our existing drug delivery and home health services for activities such as at-home lab draws. Whenever we can, we've been enabling telehealth visits to ensure continuity of contact between investigators, patients, and Clinical Research Associates, and we've been transitioning portions of trials to Study Hub, our virtual trial platform. Third, to help our clients and other organizations manage and plan for the outbreak, we're deploying our unique capabilities. For example, we are applying our people, data, and technology to bring AI and insights to help our clients track the progression of the disease, manage capacity, and monitor supply chains. We are actively engaged with clients through regular executive briefings, weekly market tracking reports, white papers, thought leadership pieces, and webinars to help them understand the rapidly evolving dynamics of the outbreak and to predict how things will develop. Finally, we're joining the global response to the crisis and contributing our resources to its resolution. Last week, for example, in the U.K., on behalf of the Department of Health, we joined with the Office of National Statistics, Oxford University, and the U.K. Biocentre. We immediately commenced a countrywide testing program of U.K. households for COVID-19 infection and immunity. In Asia, we provided an IQVIA team that developed two new treatments for COVID-19 using existing HIV and flu vaccines. In the U.S., we're partnering with the University of Texas to develop new lab tests to identify vaccine candidates quicker than currently available tests. In the U.S. and Europe, we are collaborating with governments and the industry to develop several experimental vaccine candidates using our prime site networks and data assets to accelerate timelines. We are involved in multiple trials for COVID-19 therapeutics and vaccines, which I will talk more about later. During this critical time, we continue to innovate. Two weeks ago, our R&D team launched the first technology-enabled COVID-19 trial matching solution at c19trials.com. This online platform will connect at-risk individuals and researchers to ongoing COVID-19 clinical research projects within the U.S. In addition, the Real-World team launched the IQVIA CARE Project registry. The platform will apply our vast experience with registries and analytics to help connect stakeholders and advance information sharing to better understand how to treat and prevent the disease. If successful, all of these will bring much-needed treatments to patients. Now before I review the results of the quarter, let's take a look at some of the operational impacts on our business caused by the virus. It is important to note that across all our segments, we view the impacts from the virus as temporary. Client demand and interest in our differentiated offerings remain strong even if their own ability to move forward on projects is hampered or delayed. In R&D Solutions, site start-up patient recruitment are the most impacted part of the clinical trial life cycle. Site monitoring visits have also been impacted. As of today, only 20% of our global sites are currently accessible to our Clinical Research Associates for on-site monitoring visits. On the other hand, data collection and regulatory reporting activities are continuing with little interruption. For in-site trials, we are coordinating closely with local health authorities and customers to deploy, when appropriate and feasible, our services and technologies to further increase remote-based CRA and centralized monitoring for trials and remote patient visits. As site access remains constrained, we are seeing an uptick in demand for electronic consent, virtual trials, electronic clinical outcome assessments, and connected devices. When the crisis subsides, we anticipate that some trials will require minimal additional work to satisfy requirements over and above the remote visits. But the vast majority, substantially most of the other trials, will require CRAs to go on-site and perform the tasks of checking documentation, etc., that we would not have performed safely during the crisis. R&D business development activity has remained strong. We have not had a single COVID-related cancellation. Requests for proposals are holding strong at levels that are in line with 2019, which was a record year, and our qualified pipeline remains at a record high. Face-to-face interactions with clients are the obvious challenge. Bid defenses, for example, have been delayed with some new business activity getting pushed to the right. In Technology & Analytics, we had no interruptions in data supply or demand. Our data production centers remain fully operational and our Technology & Analytics deliveries continue in the ordinary course. Conversely, the parts of the business that rely on face-to-face interactions or are dependent on in-person gathering events or conferences are experiencing disruption. The prospective portion of our Real-World business that requires site monitoring activity has also been impacted. That said, given the higher proportion of recurring revenue in the Technology & Analytics Solutions segment, it remains relatively well insulated. Business development activity, however, has been somewhat hampered as decisions are being delayed due to the situation. Finally, Contract Sales & Medical Solutions did not see much of an impact in the first quarter. Clients are reluctant to alter their commercial footprint in anticipation that the crisis will subside in the near term, and as a result, we have not seen any significant cancellations at this stage. We are, of course, also trying to deliver services remotely through electronic detailing and virtual meetings. However, activity has become much more challenging due to a decline in sales representative visits and, of course, physician attention being focused on the COVID-19 crisis. Business development has also become challenging in Contract Sales & Medical Solutions due to delayed decision-making and reduced request for proposals flow. Now against this backdrop, let's review the first quarter results. Revenue for the first quarter came in at $2.754 billion and was slightly higher than our most recent guidance range. The revenue beat was mostly driven by pass-through, which came in higher than we anticipated. From a segment perspective, Technology & Analytics Solutions revenue came in at $1.170 billion. Constant currency growth was 5.5%. R&D Solutions was $1.441 billion, up 2.4% at constant currency, and excluding a pass-through headwind of approximately 300 basis points, services growth would have been over 5%. Contract Sales & Medical Solutions revenue in the quarter was $196 million and grew 2.6% at constant currency, essentially as we originally expected. First quarter adjusted EBITDA was $562 million and first quarter adjusted diluted EPS was $1.50. I want to highlight bookings growth in R&D Solutions, which was impressive by any standard, especially so given the broader backdrop. First quarter contracted backlog, including pass-throughs, grew 14% year-over-year to $19.6 billion at March 31, 2020. In the first quarter, awards and net new business were strong across the board. Last twelve months contracted net new business, including pass-throughs, at March 31 was up 7.5% compared to last year's last twelve months of new business. The contracted book-to-bill ratio, including pass-throughs, was 1.42 for the first quarter of 2020. Excluding pass-throughs, the first quarter contracted book-to-bill was 1.35. The last twelve months contracted book-to-bill ratio at March 31 was 1.43 including pass-throughs and 1.36 excluding pass-throughs. The team was awarded a number of COVID-19 treatment and vaccine trial during the first quarter, most of which are not in our contracted bookings or backlog that I just mentioned. In fact, between treatments and vaccines, we are currently working on 36 COVID-19 awards with a pipeline of 70 other potential projects. These projects are generally heavily discounted as we are contributing to the general effort against COVID-19, so they won't represent much of our bookings. Importantly, a significant number of these studies entail transformative trial design, including several with government sponsorship and many using the Real-World comparator arm, which IQVIA is uniquely positioned to deliver on behalf of our customers. As dramatic as this crisis is, it will eventually subside. It will not change our industry's fundamental dynamics, and in fact, I believe the prospects for our industry are better than ever. We all know that some industries will experience a permanent loss of revenue due to their short-cycle or consumer-oriented nature. However, we are a long-cycle business serving the critical needs of the pharma industry. We've got good visibility into our long-term business due to our backlog and pipeline. In our case, work is just being pushed to the right. This crisis is a reminder of how critical the pharmaceutical industry is to society. Patients will continue to require innovative new medicines, and there is no viable substitution for drug discovery. We have an enormous role to play in helping our clients bring life-saving treatments to patients. For example, every year, 100 million patients are treated in oncology, 500 million patients for cardiovascular disease, and at any given time, more than 250 million people suffer from more than 6,000 rare diseases. The need for our customers to use real-world data, advanced analytics, and technology combined with therapeutic expertise to accelerate clinical trial timelines and to launch new medicines has become even more evident during this crisis. We will be even more relevant to our customers than we were before the crisis started. While the course of the virus is uncertain, and no one knows for sure how the balance of the year will develop, one could conclude that we should suspend guidance and see what happens. But we believe it is incumbent on us to have a point of view and to make assumptions about what our business looks like as we navigate this disruption. Our current point of view is that the business will snap back as the crisis subsides, hopefully later this year and certainly into 2021. Given these assumptions about the future, we're focused on maintaining our operational capability as we navigate through the crisis. We are, of course, taking aggressive actions to manage our costs in line with revenue declines while also ensuring we are ready for a quick recovery. We've stopped renewing temporary employment contracts in the second quarter. We've renegotiated real estate leases and vendor contracts. We've deferred some of our projects. We stopped much of our discretionary third-party spending and similar actions to control costs. However, for now, we will do our best to preserve employment and, to the extent we can, not affect base compensation for our employees. We want to take care of our employees as much as possible, especially in these difficult times. They are our greatest assets, and we need to stick together in anticipation of the strong rebound we are expecting in demand for our services. Many companies are announcing broad-based reductions in pay affecting significant proportions of their staff. We're taking a somewhat more nuanced approach. We've offered some employees who need time-off during this difficult time the option of a reduced work week. In very small parts of our business where utilization has dropped significantly, we are implementing temporary partial work with corresponding pay reductions. To date, approximately 650 employees have either requested time-off or been asked to take time-off. This represents less than 1% of our total workforce. Should the recovery be delayed and our assumptions prove to be materially different from reality, we are, of course, prepared to make more drastic decisions if conditions on the ground defer. For now, the rest of our 67,000-plus employees will not see any broad mandatory compensation reductions. As an expression of solidarity with all those affected by the crisis, we are launching a temporary voluntary pay reduction program this quarter for the most senior executives across the company, ranging from 10% for senior vice presidents to 20% for my direct reports and 50% for the CEO. These executive pay cuts will be used entirely to fund IQVIA CARE, a new COVID-19 relief program we're launching this week. The proceeds from these executive pay cuts will be distributed to lower pay level colleagues who are facing family hardships as a result of the COVID-19 outbreak. Finally, I want to highlight that we have started our annual planning process for next year much earlier than usual. This is typically an end-of-summer through end-of-year activity, but we have already started engaging our leadership team and business units in planning for 2021 based on various scenarios of recovery. While we usually provide annual guidance at the beginning of the year concurrent with the release of our fourth quarter earnings, we hope this year to provide 2021 guidance earlier than usual.

Thank you, Ari. Good morning, everyone, and I also hope that you're staying safe and healthy. Let's start with revenue. First quarter revenue of $2.754 billion grew 3.7% at constant currency and 2.6% reported. As Ari noted, revenue outperformed our revised first quarter guidance due to greater-than-expected pass-throughs, which, as we have said, are very hard to predict. Technology & Analytics Solutions' first quarter revenue of $1.117 billion grew 5.5% at constant currency and 3.9% reported. R&D Solutions' first quarter revenue of $1.441 billion grew 2.4% at constant currency and 1.8% reported. First quarter Contract Sales & Medical Solutions revenue of $196 million grew 2.6% on a constant currency basis and 1.6% reported. Turning to profit, adjusted EBITDA was $562 million for the first quarter. First quarter GAAP net income was $82 million, and GAAP diluted earnings per share was $0.42. Adjusted net income was $294 million for the first quarter or $1.50 per share. Let's now turn to R&D Solutions backlog. Closing backlog at March 31, 2020, was $19.6 billion. New business wins remain strong, and to date, we have not experienced any COVID-19 related cancellations. Let's now review the balance sheet. As of March 31, cash and cash equivalents totaled $927 million, and debt was approximately $12 billion, resulting in net debt of $11.1 billion. Our net leverage ratio was 4.7x our trailing 12-month adjusted EBITDA. Cash flow from operating activities was $163 million in the first quarter. Capital expenditures for the quarter were $141 million, and free cash flow for the quarter was $22 million. A reminder, the first quarter is seasonally our lightest free cash flow quarter. To date, we have not experienced any collection delays related to COVID-19. Prior to the COVID-19 outbreak becoming a pandemic in March, the company had repurchased $321 million of its common stock in the first quarter, including the purchase of 1 million shares in connection with the February 2020 private resale by certain stockholders. Since the COVID-19 outbreak became a pandemic in March, we have temporarily suspended share repurchase activity. As of March 31, 2020, we had approximately $1 billion of share repurchase authorization remaining. We continue to have strong liquidity. At March 31, we had over $900 million of cash on the balance sheet and $1.4 billion of available borrowing capacity on our revolver. Our first maturity of any size is not until 2023, which is our term loan A held by a consortium of our relationship banks. We also have approximately $1 billion of EBITDA cushion on one of our maintenance covenants in our credit agreement and about $1.1 billion under the other. Our senior secured net leverage ratio must be below 4x, and at March 31, it was 2.17x. Our interest coverage must be above 3.5x, and as of March 31, we were at 5.92x. I would point out that we have a lot of flexibility with capital allocation, which includes capital expenditures, mergers and acquisitions, and share repurchases, which typically equate to about $2 billion per year. Before we turn to guidance, it will be useful to take a closer look at the COVID-19 situation in China. In China, there were about eight weeks of a public health emergency from January to March, during which about 80% of our clinical research sites in China were inaccessible. After that eight-week period, activity started to return to normal outside of the Hubei province, and by the end of March, about 40% of our sites were inaccessible. As we moved into April, services outside of Hubei returned to normal with nearly 100% of clinical research sites becoming accessible during May. As we recap our 2020 guidance, we have used what we have seen in China as a reference point and are using a proprietary model with predictive analytics and AI, which is guiding our forecast. All models rely on the accuracy of the inputs used in them, and the future course of the virus is inherently uncertain. Despite this uncertainty, we have used our best efforts to estimate the impact of COVID-19 on our business. And when resetting 2020 guidance, we've assumed that new cases of the virus continue to increase globally through the second quarter, then level off and begin to decline by the end of the quarter. We expect that business activity begins to recover during the third quarter as access to clinical research sites resumes gradually during the quarter with a return to 100% functionality at the beginning of the fourth quarter. Currently, with the exception of China, most of the company's offices are closed, and substantially all of the IQVIA employees are working remotely. Because this is also the case with our clients, business development and execution activities, especially when they require face-to-face interaction, have been inhibited. We assume that commercial activity gradually resumes throughout the second and third quarters and returns to normal by the beginning of the fourth quarter. Currently, approximately 80% of our clinical research sites are inaccessible. We assume the number of inaccessible sites will average about 70% through the second quarter. For the third quarter, we expect an average of 35% of sites to be inaccessible, with all sites open and accessible by the beginning of the fourth quarter. Based on those assumptions, we are revising our full year 2020 guidance ranges. Full year revenue is now expected to be between $10.6 billion and $10.925 billion. The new revenue guidance includes an unfavorable $75 million impact to reflect foreign exchange rates as of April 24. For full year profit, we expect adjusted EBITDA to be between $2.2 billion and $2.3 billion, and we expect adjusted diluted EPS to be between $5.75 per share and $6.10 per share. This guidance assumes foreign currency rates at April 24, 2020, remain in effect for the rest of the year. Now turning to guidance for the second quarter of 2020. Consistent with the assumptions that we laid out for our full year guidance, including the assumption that business starts to return to normal in some parts of the world in the third quarter, we are expecting the second quarter will have the biggest impact from COVID-19, representing approximately half of the expected total impact for the year. Assuming foreign exchange rates at April 24, 2020, remain constant through the end of the quarter, we expect revenue to be between $2.365 billion and $2.440 billion. Note that foreign exchange is expected to be a headwind to revenue growth of approximately 150 basis points in the second quarter. Adjusted EBITDA is expected to be between $445 million and $470 million, and adjusted diluted EPS is expected to be between $1 per share and $1.09 per share. You should note in the second half of 2020 of the remaining impact from COVID-19, we expect approximately 75% to be weighted to the third quarter. In summary, continued strength in new business wins position us well for a return to strong growth and the momentum we had earlier in the year. We are utilizing our unique capabilities to help in the fight against COVID-19 globally. We are engaging with clients around the world at a much higher level and frequency than ever before. We are taking cost actions to mitigate the impact, have decided to prioritize operational capability in anticipation of the return to normal later this year. We expect the migration back to normal business conditions by the beginning of the fourth quarter, but the second quarter to bear most of the impact from COVID-19. We are already planning for 2021 in anticipation of a return to our growth trajectory.

Ari, I'm just wondering if you can talk to the mitigation efforts, what percentage has actually moved to virtual enrollment and remote monitoring at this point and how comfortable the FDA is maybe switching trials mid-course to more remote monitoring. If you could just talk to those dynamics.

On your question, about 50% has moved to remote monitoring. Obviously, the FDA has issued guidance on how we should do remote monitoring. The guidelines are extremely beneficial and provide a way to enable remote approaches to monitor patients and site data. We built the industry's largest central monitoring organization, which supports our remote monitoring capability. We have hundreds of successfully executed risk-based monitoring studies in which remote monitoring has been a key component. We are happy with the FDA guidance. There are trials where remote monitoring of data is not always an option. Even when the technology and regulatory infrastructure allows this, sometimes it's not feasible. Not all of the components of the trial may be monitored remotely. The key to monitor successfully is to apply the appropriate level of remote and on-site monitoring based on risk. To do that, you need a solid understanding of the protocol and strong analytics and technology. We've got all these elements at scale, but not every trial lends itself to remote monitoring.

And then for a follow-up, as we think about the recovery, just wondering if you could give us some color on what type of work you think could come back sooner, Phase I versus II, III, oncology versus other therapeutic areas. How much of a headwind could that be as we think about trial sites getting back up and running?

Look, over 100,000 sites around the world means the situation is very different site by site. You're correct to point to therapeutic differences. Patient safety in oncology is paramount because the patients cannot just stop the treatment mid-course. Those are more likely to come back faster. The activities hampered by the lack of access include site start-up, patient enrollment, and monitoring. We've got a backlog of trials in the start-up phase, which has been the key hindrance for us.

If you look at the update from the end of March with the number of sites that you framed as inaccessible, I think real-time, you're saying 80%, and obviously expecting 100% back online by Q4. I’m trying to get a better sense of the cadence of the recovery.

What we're talking about here is accessibility to on-site monitoring. That doesn't necessarily mean that all activities related to the trial will be enabled just because we can access the site safely. You also have to have patients coming back; not all patients are willing to come in even when the site is open. There will be lingering concerns. Once the site is accessible, our CRAs can then perform the required tasks that we were unable to do during Q2 or Q3, checking documentation, ensuring everything is in order physically. Our clients have already communicated that they will require on-site visits along with remote ones to ensure full compliance. This catch-up means the overall cost of the trial could go up. Clients understand that the remote monitoring visits alone will not replace the traditional site visit. This adjustment is part of why it looks like a V-shaped recovery.

I'm curious, to what extent, if you implemented fixed price contracting, what are the impacts on those contracts in the current environment? And what about change orders over the next year?

When we talk about fixed price, it's important to note that we don't have contracts with an all-encompassing single price. Instead, they are based on specific milestones achieved in exchange for specific value. All contracts include caveats, outs, and circumstances. Our clients want the trials conducted, so they understand discussions about changes of scope will occur. If a site visit cannot happen, we cannot fulfill the contractual obligation. Changes to scope are being discussed. In aggregate, RFP flows are effectively flat compared to 2019, with our total R&D pipeline up mid-teens year-over-year. We remain confident going into 2021, hence why we haven't altered our operational capabilities even as we manage reduced utilization.

You've mentioned a number of things you've been able to do to help mitigate the crisis. As you move to the recovery phase next year, do you think any of these things are going to be structurally adopted by sites and clients?

Prior to the crisis, we had been advancing our virtual trial platform, which we now have more demand for. We are transitioning as much as we can. While virtual trials will speed up the process, there will still need for physical visits. Remote monitoring means that all feasible aspects will be done remotely, but patients must still interact with their physicians. Regulations require source data verification that will need physical interactions. Thus, while we expect to accelerate our adoption of virtual solutions, physical visits will still be part of the process.

On the TAS business, it seems like that's proven durable during these uncertain times. Can you just talk through recent trends and expectations?

The TAS business can be divided into three segments: our legacy IMS info business, the technology business, and Real-World business. The demand for our information services has increased somewhat during the crisis, as it is subscription-based and more than 90% recurring. For the Real-World side with prospective studies requiring site visits, that area is facing more headwinds due to the crisis. Technology & Analytics business remains intact with a focus on licensing and recurring revenue, but our marketing and sales aspects requiring face-to-face interactions have essentially halted. Nevertheless, the OCE platform continues to see significant growth as we have crossed 100 customers. Demand for remote detailing is increasing.

On the delay of the share or the halting of the share repurchases, what are the key factors that would guide that decision?

We will be judicious with respect to capital deployment, obviously prioritizing our liquidity. We have not seen any disruption in collections to this point. We have $1.4 billion available on our revolver for liquidity. Share repurchases are paused as we assess the crisis's impact. We aim to determine the most prudent moment to re-enter the market once we find stabilization.

Can you elaborate on how billing works in the CRO side under the current environment? Is there a portion of work that's billable if access to sites is restricted?

Yes, the second part of your question is correct. As a result of the crisis, changes of scope have led to conversations with clients about the incremental work that needs to be done. Revenue is driven by a percentage of completion; thus, if tasks are not completed due to the pandemic, we must have conversations with clients to address standard milestones that could not be achieved because of circumstances outside our control. We've done well in billing and collections so far.

Thank you for taking the time to join us today, everyone, and we look forward to speaking with you again on our Second Quarter 2020 Earnings Call. Jen and I will be available for the rest of the day to take any follow-up questions that you may have. Thank you.

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