Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to the IQVIA Fourth Quarter 2023 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. As a reminder, this call is being recorded. Thank you. I would now like to turn the call over to Nick Childs, Senior Vice President, Investor Relations and Treasury. Mr. Childs, please begin your conference.

Thank you very much. Good morning, everyone. Thank you for joining our fourth quarter 2023 earnings call. With me today are Ari Bousbib, Chairman and Chief Executive Officer; Ron Bruehlman, Executive Vice President and Chief Financial Officer; Eric Sherbet, Executive Vice President and General Counsel; Mike Fedock, Senior Vice President, Financial Planning and Analysis; and Gustavo Perrone, 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 in the Events & Presentations section of our IQVIA Investor Relations website. 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, which are 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 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. I would now like to turn the call over to our Chairman and CEO.

Thank you, Nick, and good morning, everyone. Thank you for joining us today to discuss our 2023 results. You saw that we had a good quarter. Let me start the call by sharing the latest of what we are seeing in our end markets, along with our key accomplishments for 2023. On the clinical side, demand from our R&D clients remained strong. Net new bookings for the quarter exceeded $2.8 billion, the second largest quarter in IQVIA history, representing a quarterly book-to-bill of 1.31. Our quarterly RFP flow was up 13% year-over-year, driven by EBP and large pharma. Our qualified pipeline grew double-digits versus the prior year. Emerging biotech funding was strong. According to BioWorld, fourth quarter EBP funding was $21.6 billion, the highest quarter in the last two years, continuing the sequential improvement we've seen throughout the year. For the full year, EBP funding for 2023 was $70.9 billion, up 17% versus the prior year, and that represents the largest year on record, if we exclude the outlier years of 2020 and 2021, when there was dramatic outstanding due to COVID. As we close 2023, we're proud of what we have achieved in R&D Solutions. The business booked $10.7 billion of net new business, including record high service bookings of $8.4 billion. Our backlog stands at $29.7 billion, and that's up 9% year-over-year. The business added nearly 400 net new customers in the year. We made great progress with our clinical research strategies. We significantly expanded our R&D site network and management organization through strategic acquisitions that offer clinical research coordination, study feasibility, and patient recruitment capability. We further expanded the capabilities of the lab business through the launch of a new synthetic antibody discovery offering, which is differentiated from the traditional animal-derived antibodies that are used by our competitors. And we partnered with the Coalition for Epidemic Preparedness Innovations to enhance the world's ability to rapidly conduct clinical research for vaccines and other biological countermeasures against emerging infectious diseases in underdeveloped countries. Turning to Technology & Analytics Solutions (TAS). The commercial side of our business continues, of course, to face the macro environment that we've described in the past as our clients remain cautious with their spending and their cost containment. Our results in the quarter were slightly better than what we had expected. Although discretionary spending has not yet rebounded to the levels that we expect, it will, and it continues to be a headwind. Fundamentally, leading market indicators do point to an upcoming improvement. For instance, the FDA approved 55 new molecules in 2023, and that's almost 50% more than the prior year and is the highest level since 2018. The spend on new drug launches by our pharma clients is expected to be over $190 billion over the next five years. That's up over 25% compared to the prior five-year period. Frankly, in our own engagement with customers in the recent past, we noted an improved customer sentiment during the quarter. In fact, the pipeline of opportunities remains strong even as decision timelines remain elongated and negotiations more difficult similar to what we indicated last quarter. Based on these dynamics, we continue to expect demand to pick up, but not before the second half of the year. As a result, we may see the 2024 sequential trend for TAS to be the inverse of what we experienced in 2023. We might see revenue growth in the first quarter that resembles the growth of the fourth quarter of 2023 and improve gradually as we move to the back end of the year. Now, despite the more difficult macro environment, the TAS business had some significant achievements in 2023. We continued expanding our commercial technology and analytics offerings. We, in fact, added 33 new clients to our OCE technology platform. We successfully launched a new software platform, which tracks the performance of 1.6 million drugs covering 600 diseases across 93 countries. We successfully introduced a first-in-kind med tech consumption offering that supports the complex journey that medical devices take as they travel from manufacturer to healthcare providers. And we acquired a quality metric to extend our suite of patient health measurement tools using clinical outcome assessments and patient reported outcomes. Let me now turn to the results for the quarter. Revenue for the fourth quarter grew 3.5% on a reported basis and 2.6% at constant currency compared to last year and excluding COVID-related work from both periods, we grew the top line approximately 6% on a constant currency basis, including approximately 1.5 points of contribution from acquisitions. Fourth quarter adjusted EBITDA increased 5%, reflecting our ongoing cost management discipline. Fourth quarter adjusted diluted EPS of $2.84 faced the continuing headwind of the step-up in interest expense and the UK corporate tax rate increase. Excluding the impact of these items, our adjusted diluted EPS growth was 11%. Now, a few highlights of this business activity this quarter. Let's start with TAS. The midsized pharma client awarded IQVIA a four-year outsourcing program to support their lifecycle strategy of converting established brands to over-the-counter sales in more than 40 countries. Similarly, IQVIA won a four-year contract with a large pharma client to provide global market intelligence via a single globally accessible source of commercial data. In the quarter, we won a significant contract with a large pharma in the dermatology, rheumatology, and oncology therapeutic areas. This program will allow our clients to access detailed prescribing patterns in local markets, and enhanced HCP targeting in 18 countries. The CDC selected IQVIA to provide comprehensive monitoring services following the end of the COVID public health emergency status. IQVIA will support the CDC in analyzing data in near real-time on the respiratory virus response, including for influenza and RSV, identifying at-risk groups and improving overall population health. In the quarter, our Patient Services business, which is showing faster growth within our past segment, secured a significant contract with a large pharma that includes adherence monitoring, co-pay support and at-home treatment administration. In our real-world business, the National Health Service of England awarded IQVIA a large contract to deploy our privacy technology to enable the NHS efforts to ensure the highest standards of patient data governance and privacy controls. Moving to R&D Solutions, a top 5 pharma client selected IQVIA as a key clinical FSP provider. Noteworthy here is that a competitor had been the 100% sole provider previously. This partnership will help the client improve clinical trial oversight and manage costs more effectively. In Q4, another top 5 client awarded IQVIA a full-service Phase 2 study on ALS, also known as Lou Gehrig's disease. IQVIA was selected due to our vast expertise in ALS disease as well as our faster recruitment timelines. In the quarter, a biotech client selected IQVIA to conduct a complex trial for a promising cell and gene therapy targeting myositis, which is an autoimmune disease. We were selected due to our AI capabilities that allow us to identify sites and develop innovative trial strategies. Also in the quarter, IQVIA expanded its partnership with a major pharma company by securing six new global oncology trials, consisting of a mix of early and late-stage trials. We were chosen due to our expertise in oncology and our ability to efficiently manage large complex trials. A leading biotech firm selected IQVIA to conduct a program comprised of three initial stage studies in cancer research. The client is expanding from local to global development and needed a large-scale partner like IQVIA. In Q4, IQVIA was awarded a major contract from a top 10 global pharma to become its primary pharmacovigilance platform provider. This multi-year program includes replacing their legacy systems with IQVIA's drug safety monitoring technology, which uses generative AI capability to automatically extract adverse event information from unstructured data sources. Finally, and before I turn it to Ron for a detailed financial review, I would like to take the opportunity to acknowledge and congratulate our employees around the world for the recognition the company just received. For the seventh consecutive year, IQVIA was named one of the world's most admired companies in Fortune's annual survey and for the third year in a row, IQVIA was named the number one most admired company in our category. Lastly, before turning it over to Ron, I'd like to specifically mention the prestigious recognition received by Christina Mack, one of IQVIA's senior leaders, who is the Chief Scientific Officer for our real-world business. Christina was named 2023 PharmaVoice 100 honorary, a peer-recognized industry-wide honor. We are very proud at IQVIA of Christina's work and our passion for accelerating innovation in healthcare through the use of evidence-based decision-making. Let me now turn it to Ron for our financial review.

Okay. Thanks, Ari, and good morning, everyone. Let's start by reviewing revenue. Fourth quarter revenue of $3.868 billion grew 3.5% on a reported basis and 2.6% constant currency. In the quarter, COVID-related revenues were approximately $65 million, which was down about $125 million versus the fourth quarter of 2022. Now excluding all COVID-related work from both this year and last, constant currency growth was approximately 6%. And as Ari mentioned, acquisitions contributed about 150 basis points of this growth. Technology & Analytics Solutions revenue for the fourth quarter was $1.531 billion, up 2.1% reported and 1.3% constant currency. Excluding all COVID-related work, constant currency growth in TAS was 4%. R&D Solutions fourth quarter revenue of $2.151 billion was up 4.5% reported and 3.7% at constant currency and excluding all COVID-related work, constant currency growth in R&DS was 9% in the quarter. Finally, Contract Sales and Medical Solutions or CSMS fourth quarter revenue of $186 million grew 2.2% reported and 1.7% at constant currency. For the full year, revenue was $14.984 billion, growing at 4% on a reported basis and 4.1% at constant currency. COVID-related revenues totaled approximately $420 million for the year. Excluding all COVID-related work from both years, constant currency growth was 9%. Full year Technology & Analytics Solutions revenue was $5.862 billion, up 2% reported, 2.1% at constant currency, and excluding all COVID-related work, growth at constant currency in TAS was 6%. In R&D Solutions, full year revenue was $8.395 billion, growing 6%, both on a reported and a constant currency basis, and excluding all COVID-related work, growth at constant currency in R&DS was 13%. Finally, in CSMS revenue for the full year was $727 million, which was down 2.2% reported and 0.3% at constant currency. Okay. Moving down to P&L. Adjusted EBITDA was $966 million for the fourth quarter. That represented 5% growth, while full year adjusted EBITDA was $3.569 billion, which was up 6.7% year-over-year. Fourth quarter GAAP net income was $469 million, and GAAP diluted earnings per share was $2.54. For the full year, GAAP net income was $1.358 billion, or $7.29 of earnings per diluted share. Adjusted net income was $523 million for the fourth quarter, and adjusted diluted earnings per share was $2.84. For the full year, adjusted net income was $1.901 billion, and adjusted diluted EPS was $10.20. Excluding the year-over-year impact of the step-up in interest rates and the increase in the UK corporate tax rate, adjusted diluted earnings per share grew 11% in the fourth quarter and 12% for the full year. Now, as already reviewed, R&D Solutions delivered another strong quarter of bookings. Our backlog at December 31 stood at a record $29.7 billion. That's up 9.2% year-over-year and 31% over the last three years. Okay. Let's turn to the balance sheet. As of December 31, cash and cash equivalents totaled $1.376 billion and gross debt was $13.673 billion. Due to the math that results in net debt of $12.297 billion, our net leverage ratio at year-end was 3.45 times trailing 12-month adjusted EBITDA. Fourth quarter cash flow from operations was $747 million, and capital expenditures were $179 million, resulting in free cash flow of $568 million for the quarter. Now in the quarter, we repurchased $229 million of our shares at an average price of $1.95 per share, bringing our full year share repurchase activity to just slightly below $1 billion. This leaves us with just under $2.4 billion of share repurchase authorization remaining under the current program. Now, as you know, coming out of the merger, we took advantage of the low interest rate environment and deployed a significant amount of capital for internal investments, acquisitions, and share repurchases, which were quite accretive for our shareholders. Now, over that period, our net interest expense was relatively steady at around $400 million per year, but at the end of 2022 and through the middle of 2023, we experienced a rapid and unprecedented rise in interest rates, which drove annual interest expense up by almost $0.25 billion, causing our adjusted EPS to be just slightly over flat in 2023. Now, as you saw in November, we successfully refinanced approximately $2.75 billion of our near-term debt maturities. The strong demand for IQVIA debt that we experienced allowed us to tighten pricing and lock in an average fixed rate below 4.9% for those issuances after swaps. This refinancing extended approximately $2.75 billion of maturities to 2029 and 2031, and we reduced our interest rate risk exposure by locking in over 80% of our debt at fixed rates. With this refinancing, we now expect net interest expense to be approximately $650 million in 2024. Now, the forward curves point to a reduction in rates in the future. We've included the current market consensus in our 2024 guidance. Further reductions would lower our net interest expense more on our variable rate debt and potentially open opportunities to refinance additional debt in the future. Now let's go to our 2024 guidance, which I'll review in detail. For the full year, we expect total revenue to be between $15.400 billion and $15.650 billion. This includes approximately $300 million of a step-down in COVID-related work year-over-year, and about 100 basis points of contribution from M&A activity and further FX headwind of approximately 50 basis points versus 2023. Our adjusted EBITDA guidance is $3.700 billion to $3.800 billion. Our adjusted diluted EPS guidance is $10.95 to $11.25. Now this guidance includes about $650 million of interest expense, approximately $580 million of operational depreciation and amortization expense, an effective income tax rate just under 20%, and an average diluted share count of approximately 184 million shares. This guidance also assumes about $2 billion deployment split evenly between acquisitions and share repurchase. Finally, our guidance assumes that foreign currency rates as of February 12 continue for the balance of the year. Now at the segment level, we expect TAS revenue to be between $6 billion and $6.2 billion. Q1 2023 was the last quarter that we had significant COVID-related revenues in TAS, so the COVID step down in TAS will be minimal for the balance of the year. As already mentioned, the guidance now anticipates an improvement in our commercial business towards the back end of the year, which will still result in a year-over-year growth of low to mid-single digits. R&D Solutions revenue is expected to be between $8.7 billion and $8.8 billion. This guidance includes almost the entire $300 million step down in COVID-related revenue, representing approximately 350 basis points of headwind to the R&D Solutions growth rate. The guidance also reflects the latest phasing of pass-through revenue which results in an additional headwind of approximately 100 basis points to R&D Solutions year-over-year. Adjusting for the COVID step-down and the pass-through headwind, R&D Solutions revenue growth in 2024 is expected to remain in the high single digits. CSMS revenue is expected to be approximately $700 million, which is down slightly year-over-year. Now, let's review the first quarter guidance. For the first quarter, we expect revenue to be between $3.650 billion and $3.725 billion. The decline in COVID-related work is weighted towards the beginning of the year with the largest impact in Q1. Also, we expect market conditions in TAS to recover only in the back half of the year, as we've said. Adjusted EBITDA in the first quarter is expected to be between $850 million and $870 million, and adjusted diluted EPS is expected to be between $2.45 and $2.55. Now keep in mind that Q1 is the toughest comparison for adjusted diluted EPS due to the interest rate increases we saw throughout 2023. As we mentioned, our guidance assumes that foreign currency rates as of February 12 continue for the balance of the year. So let's summarize. Q4 was another strong quarter. R&D Solutions delivered the second-largest booking quarter in IQVIA history at over $2.8 billion, along with another quarter of double-digit RFC growth. For the full year of 2023, revenue grew 9% at constant currency, excluding COVID-related work. Our EBITDA margin expanded by 60 basis points and adjusted diluted EPS was up 12% if you exclude the year-over-year impact of interest rates and the increase in the UK tax rate. Free cash flow was strong in the quarter at $568 million, representing 109% of adjusted net income. IQVIA was named to Fortune's 2023 list of the World's Most Admired Companies for the seventh consecutive year and earned the first-place ranking within our industry group for the third consecutive year. And lastly, we issued full-year 2024 guidance with underlying revenue growth of 5% to 7%, continued margin expansion, and a resumption of EPS growth with adjusted diluted earnings per share expected to be up 7% to 10%. Now, before we open the call to Q&A, I'd like to make you aware of the leadership change within IQVIA's finance organization. Nick Childs, who has led our Investor Relations and treasury functions very ably for the past three years, is moving on to become CFO of our North American business. He will be succeeded by Kerry Joseph, who has served as CFO of that business unit for the past five years. Kerry, who is a member of the global finance leadership team, has had many finance roles of increasing responsibility during his 20-plus years with the company. Kerry and Nick have already been working together to transition responsibilities, and Kerry will join Nick on our follow-up calls this quarter, so you will all have a chance to meet them. Now, with that, let me hand it back over to the operator to begin our Q&A session.

Your first question comes from the line of Anne Samuel from JPMorgan. Your line is open.

Hi, guys. Congrats on the great presentation and thanks for taking the question. My first question was just on TAS. You spoke to expectations for a back half recovery in this business. It seems like based on your comments and some of those from others at our recent conference that others in the life sciences IT space are seeing some early optimism around that. I was just wondering what do you expect to be the early indicators that the recovery is happening in that business? And what part of your TAS business will maybe start to see the first green shoots?

Thank you, Anne. Last year, we anticipated a turnaround in the second half, but that did not occur. At some point, we expect it to happen. Initially, we thought it would be by the second quarter of 2024, but now we are projecting this recovery for the latter half of the year. I mentioned some data points earlier: the FDA approved 50% more molecules than last year, marking the highest level since 2018. This is a positive sign for our commercial business as clients prepare to launch these drugs. These launches require significant support from our services, including data launch consulting, planning, market access, and pricing support. Moreover, our market expectations for pharmaceutical spending over the next few years appear quite favorable compared to prior periods. Our discussions with clients reveal increasing optimism for 2024. However, given past experiences, we are being cautious in our planning. When we develop forecasts for our TAS business based on the pipeline, I want to emphasize that our opportunities pipeline is stronger than ever. This gives us confidence that our forecasts are solid, and we could see upside if everything aligns perfectly. Nonetheless, we have incorporated enough caution into our forecasts to feel optimistic about the TAS business for 2024. On a cautionary note, our business experienced declining growth throughout 2023, with each quarter performing worse than the last. We expect 2024 to reverse this trend, starting with the first quarter resembling last year's fourth quarter and the second quarter mirroring the third quarter, building momentum as we progress through the year.

That's very helpful. Thank you. And then maybe on the R&DS side. I was hoping maybe you could just provide a little bit of color on just how to think about the cadence for 2024. I'm just given all the moving pieces. Thank you.

You mean the cadence? Yes, anyone has any questions. Yes.

Yes, I mean, I guess I would tell you to look at the linearity that you've seen in prior years. There won't be any significant drop-offs or a significant pickup either.

Your next question comes from the line of Shlomo Rosenbaum from Stifel. Your line is open.

Hi. Thank you for taking my questions. Ari, can you talk a little bit about the significant contract signings in the quarter? A second largest in the company's history, were there certain really large deals that maybe boosted it? Were there certain therapeutic areas that might have boosted it? Maybe just give us a little bit of color about that.

Okay. Well, thank you, Shlomo, for the question. There was no specific contract or particular award that skewed this. I would just say that, by segment, the EBP segment was particularly strong. I mentioned funding was very strong in the quarter—the highest on record, again, if you exclude the COVID years. And so EBP was particularly strong. I'd say, with — again, we don't talk about book-to-bill per segment, but the EBP book-to-bill, if you will, was higher than our 1.31. So, comparatively, we had — and I would say about 25%. Is that correct, guys? 25% of our bookings in the year were EBP. So that's a little bit of color that I can give you. But nothing — no one-time big award or anything that skewed the numbers, pretty strong across the board.

Therapeutic area we continue to excel in oncology and cell and gene therapy in a complex clinical trial, no change.

Right. Correct.

Great. Thank you. Is there — can you just comment on anything about competitively in the marketplace? Has there been any changes? I know it's a long cycle business. Anything you could talk about either on TAS or R&DS with any of the well-known competitors that are out there?

Well, I don't generally like to comment on competitors. But yes, there have been a number of disruptions, sort of companies being acquired or spun off in the CRO space. And that always introduces some level of disruption. I mean, some of these companies have been in trouble. The fact that they've been acquired by private equity or conversely spun off in the public markets. Does that mean that they'll be more competitive, less competitive? It's hard to tell. It's disruption often happens. If you take a longer view of this question, we believe that our merger seven years ago significantly disrupted the industry and led to a large number of subsequent transactions, which resulted from what we believe was reactions to the clear competitive advantage that we think we established that enabled us over the past few years to gradually gain market share. But other than that, I mean, I don't have any further comments.

Thank you, Shlomo.

Thank you.

Your next question comes from the line of Tejas Savant from Morgan Stanley. Your line is open.

Hey, guys. Good morning. So my first question here is on the R&D side of things. Ari, can you help us think through just a shift in mix in FSP versus hybrid versus full-service work and the margin implications of that? And similarly, sort of any shift in the mix of work as you head into 2024 on therapeutic area basis? And what that means—what that might for your backlog burn rates?

Question was about the mix shift in margins between FSP and full-service, correct?

That's right.

Yes. Look, FSP tends to be somewhat lower margin than full-service. Now, take into account, though, that full-service comes with pass-through—significant pass-through revenues that FSP doesn't. And so when you look at the average margins, including pass-through, they're not that different. But yes, in general, there has been some margin degradation as a result of the shift towards FSP. On the other hand, this shift is a very gradual shift that's ongoing. You're talking about points of single point shift, not huge—a huge flight to FSP, and it takes place over time. Remember, the average trial takes over four years to complete. So there really hasn't been any dramatic impact on our margins as a result of that. And, of course, we're working all the time to optimize and take costs out and do things to improve our margins independent of whatever contracts we happen to be signing. So I would say, not a big impact there. And you see in our EBITDA margins, they've actually continued to improve overall, and that's with R&D Solutions being over 50% of our revenue.

And then your second question?

Yes. My second question, actually, I'm going to switch to the TAS comments, guys. I mean, are you encouraging to see expectations of a recovery in the back half of the year? And you talked about your detailed bottom-up pipeline build there. But I just want to put a finer point on it in terms of just the timing of the recovery, right? So, what gives you confidence comes through in the second half of 2024 versus getting pushed to 2025? Is it something related to contracted work that you have clear line of sight to versus work that could be delayed? Or is it some large real-world evidence projects that you see coming through here in the back half?

Thank you, Tejas. It's not about any single contract or specific level. The overall sentiment is the highest we've ever seen in our pipeline. While the pipeline doesn't always convert exactly as it appears, it is adjusted for probability, which indicates we should see an increase this year. We've also built some cushion due to setbacks last year, which gives us confidence alongside the discussions we're having with our clients. However, we aren't experiencing a sudden increase. Our clients, particularly large pharmaceutical companies, are very focused on controlling costs. They've announced significant cost reduction programs, partly in response to the uncertain impacts of the IRA and upcoming losses of exclusivity. Therefore, negotiations around cost with our significant vendor status have become more challenging than before. That being said, the number of opportunities, projects, and requests for proposals we are seeing has clearly increased. Given the typical sales cycle, we expect these to translate into sales later this year.

And Tejas, just one point of emphasis here, too. In the TAS business particularly is—hundreds and hundreds of projects. You're not going to have any individual project move the needle there. Thank you.

Thanks guys. Appreciate it.

Your next question comes from the line of Luke Sergott from Barclays. Your line is open.

Hi, guys. Can you talk about the—we keep talking about the TAS recovery, but—and the big pipeline that you guys have, but can you kind of double-click into what that looks like versus discretionary versus the sticky side? I think there's a lot of confusion about where the weakness has been in TAS and where the strength has been? And if there's actually any change or improvement on the side of like regulatory and medical writing, things like that to give more confidence in that back half recovery that you're talking about?

Yes. Well, look, we ourselves are, as I mentioned before, putting a fair amount of caution and conservatism, if you want to call it that way, in our own forecast because of some of the factors you mentioned that we've experienced last year. The business continues to grow. Look, the general environment so far is consistent with what we were experiencing at the end of last year. You've seen our large-cap companies that operate in the same business actually forecast declining sales for their own businesses for 2024. Now, we're not there because, as you correctly point out, some of these services that we sell are not exactly discretionary. So look, the data business, for example, continues to hold up well. It's never been a fast growth business, but it's holding up. We saw headwinds in the more discretionary part of the TAS segment, which is the analytics and consulting business. But I have to say that the business started to pick up a bit with sequential improvements in growth in Q4 compared to Q3. So even this more discretionary side, we saw an uptick—not again, not a steep curve, but we saw a positive movement even on the discretionary side. Now, the impact on the discretionary project part of the real-world business, that is a little bit of a longer cycle within TAS, is a little bit longer cycle. We started seeing that in Q3 and continued in Q4, and it did impact the performance of our real-world business in Q4. So, if I might summarize the data business holding up maybe a little bit even better, doing a little bit better. The totally discretionary piece of analytics and consulting, little movement, and some uptick that we are perceiving. The real-world piece, you've got the stuff that they need to do. That hasn't changed. And then there is a step that's more discretionary because it's more—a longer cycle, the deceleration impacted our numbers more in Q3 and further in Q4, and we expect that to continue in Q1. But if you—I hope that gives you enough color here to get a sense of what we're seeing.

It does, it does. Thank you. And then I guess a follow-up on the—there's a lot of concern here. Some of your peers talked about biotech RFP slowing in 4Q. But just as you look at the actual step-up needed to maintain the book-to-bills and the bookings levels that you guys have had. Do you see that, that level of RFP volume across all your segments is enough to sustain it over the next six months? Or could we see some softening here maybe in the 1Q? And obviously, this is just more of a quarterly dynamic as the full year kind of paces out as what you're talking about. But just when you're thinking about the actual bookings getting—you're closing that sales cycle, could some stuff get pushed out to more of the back half of the year?

I mean, look, you've got a lot of hypothetical here. You're referring to a competitor commentary. I didn't hear any of that, and we're not seeing that again. This is interesting. People want to see badness and had their hat on something. I would point to you that, going back a couple of years at least, people who are competitors "whining about EBP funding." and all see our stock suffer as a result of this whining, we kept telling the world that we weren't seeing it. We ended up being correct. There was no dramatic drop-off in funding. It didn't happen. If anything, now, as I mentioned, it's even going further at record levels. So, EBP is good. That actually was very, very strong in terms of bookings. We see that trend continuing. When things get funded in a quarter, typically the bookings come in over the course of the following year. So, I don't see that happening on the EBP segment. Large pharma, yes, there is a little bit of reprioritization of projects. You've heard that from us, from others looking at different programs, but it's not like people are saying, all of a sudden, we're not doing research anymore. There's a little bit of—at the moment, as we discussed earlier, Ron mentioned a bit of a pendulum moving more towards FSP. But again, we play in that segment, too. We play in every segment. But other than these dynamics, I don't see anything that would lead me to believe that all of a sudden we have to be worried, quite the opposite. As I said, our RFP flow was up 13% in Q4, and that's across the board, strong double-digits in EBP and in large pharma as well. For the— that was in Q4. Full year same thing, very strong in EBP even stronger for the full year. Awards, which is sort of, if you will, a leading indicator of bookings because as you know, we and maybe a small number of others actually report bookings and book to risk based on contracted work. Some still report only awards, which is kind of before contracted, and awards are also at a record high level. If you look at our pipeline, the total pipeline is up high single-digits, in very high single-digits, again, at a record level. The qualified pipeline, which is we look at—we have our own methodology to screen all the opportunities and come down to those that we think we want to pursue and that are the most viable and the most likely to come to fruition. The qualified pipeline is up strong double-digits, again, across the board. So, I don't know what else to tell you. I don't — you heard anything that I don't know, let me know.

No, that's why I'm in my seat, and you're in your seat. Appreciate. Thank you.

All right. Thank you.

Your next question comes from the line of Elizabeth Anderson from Evercore ISI. Your line is open.

Hi guys. Thanks so much for the color on the complexity of the demand environment. I had a question about the 4Q bookings. Can you comment on sort of what percentage was FSP? I know you said it, obviously, with the revenue shift is very incremental over the course of the year. But I would just be curious, sort of level set what you're seeing in the current environment there?

The question is how much of our bookings was FSP. I think a little over 20%, is that correct?

Yes, the bookings this quarter and that's for the full year for FSP.

How much—can you be more—well, how much was EBP? 25%?

Yes. Total EBP is about one-quarter of our bookings for the year.

Right. And I think FSP is mostly large pharma, right?

Yes.

And then how would you comment on the rate card as we think about 2024 in terms of both full service work and FSP?

Yes. I mean, look, this continues to be pressure from clients and negotiate and tough negotiations—that's been the biggest surprise for me over the past several years, and that is that you got a better mode, you've got a better company, a better delivery system, better capabilities, then we should be able to actually charge more. But lo and behold, we've got competitors. And as I said before, clients are—that we want to continue to have. We have with whom we sell a lot to we sell a lot of stuff. And we have strong relationships. And when the client tells you, listen, the CEO calls you and says, I need you to lower the rate here on this because it's going to help me in my cost reduction program, it's hard to say, listen, I'm better than a competitor, and the answer is no. So we don't say yes to everything, but this is part of managing our long-term relationships, and I wouldn’t hide the fact that we are having maybe more pressure than we had before, generally on pricing that's across the board. There's no secret there.

Got it. That’s super helpful. Thank you.

Your next question comes from the line of David Windley from Jefferies. Your line is open.

Hi, good morning. Thanks for taking my question. A little bit of a follow-up to Elizabeth there. Ari, we spent in December, quite a bit of time talking about the decision cycle environment with, I think, principally large pharma. So I joined late, but I've heard you describe that your RFP flows look pretty good. Your awards look pretty good. Those things seem to be holding up, but you had described that whether it was IRA or pending loss of exclusivity of important products or whatever that clients were kind of mulling over their prioritizations and processes a lot longer than normal. And I suppose part of that is probably also a little bit of Elizabeth—your answer to Elizabeth's question around pricing and trying to meet budget cut targets and things like that. How would you—I’d love for you to elaborate on that environment? And do you feel like you're closer to the end of it? Or are we still in the middle of it? When do we think large pharma will be back to business, so to speak?

Well, again, I want to make sure— I mean, it's not like back to business—not like people are on hold and they are not doing anything again. I mean, look, our backlog continues to grow. The RFP flow is up double-digits.

Second-highest bookings quarter ever.

Right. We had the second highest bookings quarter ever, and the first—the one that was the highest, which was last year, I think that was—we had a very big proportion of pass-through from a specific large award. That's why it was like over $3 billion, if I recall, in that quarter. So, this quarter, we had, what, $2.8 billion. I mean—and that was like a regular quarter with nothing unusual, no big one-timer award or anything like that. So, it's a pretty—the numbers are the numbers. Now, the conversations are more difficult, longer, more negotiations, but the volume—the answer to your question is I think the volume and the number of opportunities, it keeps going up. And again, EBP funding very strong, all-time high. We saw particular strength on EBP, and we see that continuing this year. So not like we're on hold and thinking about when are we back to business. That's perhaps a question we were asking ourselves on the TAS segment, and that we are in the middle of, and we see some sign of green shoots as Elizabeth told us before, or Anne, I think, was the one who used that expression, some green shoots on the commercial side to the back end of the year. But on the R&D Solutions side, we are experiencing the pressure, the more difficult environment with respect to pricing and negotiation and so on. We are in those conversations. But no one is saying, I'm going to hold, and I'm not doing anything. Again, the numbers showed the number of RFPs, the pipeline at an all-time high, the qualified pipeline up strong double-digits, and are going across the board. It's not like there's one segment or another. So I would say quite the opposite. I think the number of opportunities, the environment is very fertile in terms of chasing opportunities and responding to request for proposals. We are very, very busy.

Okay. So if I could follow up then. To go the next step and ask perhaps what might be the factors that are influencing the disconnect between a high single-digit to double-digit RFP award pace with a below mid-single-digit revenue growth? So I understand part of that is TAS; I'm going to try to head off a little bit in the past. Part of that is TAS. I know that. So, we'll set that aside. And I know you also attribute some to COVID, but COVID is now small enough that it is like any other big project that you would see come to a conclusion in any given year and ramp transition those people to a new project and ramp that up. So it would seem that you're to a point where the backlog growth should be translating to R&DS revenue growth, and there's a disconnect there. So to what would you attribute that?

Yes. So again, if you take R&D Solutions, it's not—COVID. It's not like one project like any other. It's not the case. We really have a COVID-specific set of resources, it's specific projects. And in 2024, it's coming down by $300 million. That represents a direct headwind to growth of 350 basis points to R&D Solutions growth—350 basis points. In addition, and this is more of a mix issue I mentioned in my introductory remarks, a number of wins, and we continue to win in the oncology area. We're happy about that because that's the fastest-growing therapeutic area, hands down all around. It has been for a while and will continue to be. And we are winning in oncology. The issue with that therapeutic area is that the burn rate is much lower. It takes time. It's more difficult to recruit patients. It's more complex. And therefore, it transfers into revenue slower than anything else. And we have a disproportionate share in that market. Third reason in the mix, we do have—we happen to be, and that's just a consequence. It's hard to explain, but some years we've got tailwinds from pass-throughs, and some years we have headwinds from pass-throughs. As you know, pass-throughs are—not going to say irrelevant, but they come with no profit. They come with—it's just an artificial accounting add in our—but the fact our buildup forecast for 2024, pass-throughs will be a headwind to R&D Solutions growth, and that represents 100 basis points approximately of headwind to top-line growth of R&D Solutions again, inclusive of pass-throughs. So if you add 350 basis points of headwind from COVID from the step-down in COVID and 100 basis points of headwind from the pass-through mix, that's 450 basis points. So, you're right. But if you add back this and you normalize our underlying business is growing high single digits, very high single digits on the R&D Solutions side. So, I think that's the reconciliation. You're right, Dave, you're smart analysts, and you point to the apparent disconnect between the strong growth of our bookings and the reported growth in 2024, which, again, we hope to be out of that in 2025. It certainly bodes well. 2025 should be a sweet year. I don't want to put actions for 2025 here, we're barely talking about 2024. But I think based on everything we're seeing, we should certainly be behind all of those issues. But thank you, Dave, I think that was the last question. Thank you.

Thank you.

This ends our question-and-answer session. Mr. Childs, I turn the call back over to you.

Thank you very much, and thank you, everyone, for joining us today. We look forward to speaking to you again on our first quarter earnings call in April. The team and I will be available the rest of the day to answer any follow-up questions you have. Thank you.

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