Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to the IQVIA First Quarter 2026 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. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. if you would like to withdraw your question press star followed by the number one again as a reminder this call is being recorded thank you i would now like to turn the call over to carrie joseph senior vice president investor relations and treasury mr joseph please begin your conference thank you operator good morning everyone thank you for joining our first quarter the 2026 earnings call.

With me today are Ari Boosley, Chairman and Chief Executive Officer, Mike Fedok, Executive Vice President and Chief Financial Officer, Eric Sherbert, Executive Vice President and General Counsel, Katie Ward, Vice President, Investor Relations, and Gustavo Peroni, Senior Director of 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 and presentations section of our IQVIA Investment Relations website at IR.IQVIA. Before we begin, I would like to caution listeners that certain information discussed by the management during this conference call will include forward-looking statements. Absolute results could differ materially from those stated or implied by forward-looking statements due to risk and uncertainty associated with the company's business which are discussed in companies filings with the securities and exchange commission including our annual report on form 10k and subsequent sec filings in addition we will discuss certain non-gap financial measures on this call which should be considered a supplement two and not a substitute for financial measures prepared in accordance with gap a reconciliation The abbreviation of these non-GAAP measures to the comparable GAAP measures is included in the press release and conference call presentation. As previously disclosed, we implemented a new segment reporting structure effective January 1, 2026. In conjunction with this change, prior period segment amounts have been recast to conform to this new reporting structure. I would now like to turn the call over to our Chairman and CEO, Ari Beesby.

Thank you, Gary, and good morning, everyone. Thank you for joining us today to discuss our first quarter results. QV has delivered outstanding financial results, achieving record first quarter revenue and adjusted diluted earnings per share that exceeded the high end of our guidance, reflecting solid top and bottom line performance. we are seeing continued positive year-over-year momentum across the portfolio with strong acceleration of organic revenue growth. In fact, year-over-year, our organic revenue growth rate in commercial solutions doubled and our organic revenue growth rate in RMDS tripled. on the commercial side revenue growth accelerated as clients continue to launch new products and increase the breadth of services they utilize from IQVIA we saw particular strength in patient solutions which is the part of real world that remained in the commercial segment also particular strength in analytics and consulting which had the highest growth we've seen in three years and strength as well in our commercial engagement services which includes the former csms segment we feel good about demand on the commercial side with pipelines growing to record levels. And we think AI has something to do with it. AI is causing our clients to have more questions. It's causing them to increase their demand for IQVS differentiated AI capabilities and for the innovation we are embedding across our commercial offerings. On the critical side, we also delivered very strong performance in the first quarter with better than expected reported and organic revenue growth we had solid bookings with double digit growth year over year both as reported and as recast in particular we had solid growth in net service fee bookings That is, excluding pass-throughs, net service bookings growth in the quarter were solid year-over-year, as well as sequential, both as reported and as recast. And I should note, cancellations in the quarter were within the normal range. So, why was our book-to-be ratio 1.04 in the quarter despite solid service fee bookings growth and no more cancellations? And no, AI has nothing to do with it. What happened was that pass-through bookings were unusually low in the quarter, simply due to the particular mix of indications of the clinical trials we booked in the quarter. which included more full-service trials with lower pass-throughs than usual. And I want to note that the proportion of FSP in our bookings this quarter was consistent with historic levels. Now, regarding the overall demand environment, forward-looking demand metrics continue to point in the right direction. our backlog reached a new record of 34.2 billion dollars at the end of the quarter and noteworthy is the amount of dollars from our backlog that will convert to revenue in the next 12 months we have 8.9 billion dollars out of our backlog representing nearly eight percent growth of year-over-year versus the recast numbers last year. A qualified pipeline grew mid-single digits year-over-year with notable strength in EBP. RFP flow grew high single digits year-over-year, driven by growth both in large pharma and in EBP. All of these comparisons are, of course, apples-to-apples, that is, versus prior-year numbers that have been recast to reflect the new segment reporting. Finally, you may have noticed EBITI funding was very strong in the first quarter, reaching $25 billion according to Buy Your World, which is almost double the funding in Q1 2025. Now, let's turn to the results in the quarter. We delivered outstanding revenue and profit results. Total revenue for the first quarter exceeded the high end of our guidance range, representing year-over-year of 8.4% on a reported basis, 6% at constant currency. First quarter adjusted EBITDA was up 5.5%. First quarter adjusted diluted EPS of $2.90 also exceeded the high end of our guidance range, and it increased 7.4% year over year let's now review a few highlights of business activity let me begin with an update on ai as a quick reminder iqvia's ai solutions are built on our unparalleled proprietary data foundation best-in-class compliance with the privacy regulatory and integrity standards healthcare-grade AI demands, and are connected to our deep life sciences and healthcare expertise. We've been integrating AI into our operations and solutions at scale for nearly a decade. It's part of who we are and what we do. We already function as an AI native company in life sciences. A few weeks ago, we unveiled IQVIA.AI at NVIDIA's GTC conference. This is our agentic AI portal and marketplace, purpose-built for life sciences. It provides clients a single access point to their approaches IQVIA AI solutions, enabling centralized control with their internal user base, while also enabling visibility to a broader ai portfolio to support future solution adoption our deployment of highly specialized life science industry ai agents is progressing as planned today we have 192 agents deployed in the field covering 64 use cases across both our commercial solutions and rnds businesses 19 of the top 20 pharma companies are already using IQVIA agents in some of their workflows underscoring broad industry trust in IQVIA's AI capabilities. Let me now switch to client activity first in commercial solutions. This quarter we saw clients increasingly selecting IQVIA to build AI-ready data foundations, which facilitates the incorporation of AI agents, including IQVIA's agents, into their workflows. These new services expand the scope of our partnerships with clients. A few examples of wins in the quarter. A top 10 pharma client awarded IQVIA a contract to modernize performance reporting on markets and therapeutic using an AI-driven analytics platform. The engagement replaces hundreds of disconnected reports and dashboards from multiple vendors with a centralized, managed, AI-powered IQVIA insight solution. IQVIA secured a multi-year partnership with a mid-sized client to provide a scalable AI-ready data foundation. The wind demonstrates IQVIA's plug-and-play capabilities within a client's multi-provider technology ecosystem. Pfizer and IQVIA entered into a strategic regional promotion agreement covering selected Pfizer products across 23 countries in Europe. This collaboration brings together Pfizer's scientific leadership with IQVIA's promotional expertise, market intelligence, and AI-supported technology to support long-term impact. We entered into a strategic long-term collaboration with Boehringer Ingelheim to transport the Global Commercial Intelligence Foundation. Boehringer selected Acuvia's Data-as-a-Service DAS Plus platform as the core accelerator to harmonize and upgrade global commercial operations, enabling more scalable analytics and a single version of the truth across therapeutic areas and geography. This collaboration will support upcoming product launches and market reporting across 59 countries. IQVIA was awarded a multi-year agreement to serve as the primary patient information and analytics partner across an EVP school portfolio, including our data as a service platform. This partnership is designed to drive strong visibility into existing brands, step change improvements in analytics, insights, and pipeline assets, and more intelligent commercial and portfolio decisions. Let me now turn to R&D solutions. Our strategy in R&Ds has been to leverage our AI solutions to optimize trial design and execution to reduce timelines for our clients. Of course, we've been doing this for years through protocol optimization, site identification and operational risk mitigation. We're taking this to the next level with AI agents, which leads to much faster study execution and increases quality by reducing errors and rework. For example, the AI agentification of the complex database setup process in a study startup. or the AI identification of tasks involved in finding multiple documents in the trial master file. We are increasingly embedding these AI agents in our delivery model. Let me share a few examples of recent wins on the back of these capabilities. The top five pharma companies selected IQVIA to provide AI-enabled global medical safety and pharmacovigilance services, building on a decade-long relationship and strong performance across both fsp and clinical delivery models the deal consolidates safety operations under a single scalable model to improve efficiency and reliability while enabling ongoing innovations a top 10 pharma client awarded iqvia a multi-year agreement to serve as the primary partner for delivering full-service global clinical trials we differentiated ourselves through ai enabled innovation that accelerates development improve execution quality a qvr won a contract of a global mid-size pharma to deliver a phase three clinical study supporting a high profile oncology asset in this case we were selected based on our experience running similar studies as well as our ability to deliver ai enabled trial design protocol optimization and site identification a top 20 pharma company selected iqvia to support a late stage clinical program in asthma in overweight patients the win highlighted ai enabled clinical solutions including in protocol and design strategy optimization regulatory compliance and study document findings for an ebp we are delivering a global late stage clinical program that integrates clinical and laboratory services within a single operating model with with agentified analytics embedded across site feasibility and selection enrollment and performance forecasting lastly in quarter we announced a strategic collaboration with the Duke Clinical Research Institute to advance clinical research in obesity and related cardiometabolic conditions. The collaboration brings together IQVIA's global operational scale and execution capabilities with Duke's academic rigor and scientific leadership, creating an integrated end-to-end model for large complex clinical trials. The partnership is designed to accelerate trial startup, improve execution efficiency, and support regulatory submissions and commercialization. IQVIA contributes deep expertise in obesity and metabolic disease, having supported more than 120 obesity trials and enrolled more than 90,000 patients, including work across all FDA approved GLP-1 therapies to date, providing sponsors with a proven operational foundation this partnership with duke has already resulted in a significant pipeline of opportunities and a few wins in the second quarter now to mike for more details on our financial performance thank you ari good morning everyone as very noted earlier we implemented a

new segment reporting structure effective january 1st 2026. in conjunction with this change prior period segment amounts have been recast to conform to this new reporting structure now let's start by reviewing revenue first quarter revenue was 4 billion 151 million dollars through 8.4 percent on a recorded basis and 6.0 percent at constant currency revenue growth includes about two points of contribution from acquisitions commercial solutions revenue for the first quarter was 1 billion seven hundred fifty four million dollars of eleven point six percent on a reported basis and eight point five percent at constant currency r d solutions first quarter revenue was two billion three hundred and ninety seven million dollars of six point two percent on a reported basis and four point two percent at constant currency now moving down the p and l adjusted ebitda was nine hundred for the first quarter, representing growth of 5.5% year-over-year. First quarter gap net income was $274 million. The gap diluted earnings per share was $1.61. Adjusted net income was $492 million for the first quarter, and adjusted diluted earnings per share was $2.90, representing growth of 7.4% year-over-year. Now, turning to RDS bookings. To provide an apples-to-apples comparison, the numbers on this chart for last year's Q1 2025 net new bookings and backlog have been recast to reflect the real-world late phase and certain other real-world offerings that are closely related to the clinical trial business, which we moved from TAS to our REBS. On this new basis, R&D Solutions net new bookings in Q1 2026 was $2.5 billion, a double-digit increase year over year. RDS backlog at March 31st was $34.2 billion, which is an increase of mid-single-digit year over year. And additionally, the next 12-month revenue from this backlog was $8.9 billion at March 31st, which is up high single digits last year on a recast basis. now reviewing the balance sheet as of March 31st cash and cash equivalents totaled 1 billion 947 million dollars and gross debt was 15 billion 833 million dollars resulting in net debt of 13 billion 886 million dollars our net leverage ratio end of the quarter at 3.62 times trailing 12 months adjusted EBITDA. First quarter cash flow from operations was $618 million and capital expenditures were $127 million, resulting in strong free cash flow of $491 million, which represents 100% of adjusted net income, a 15% increase year over year. And in the quarter, we repurchased $552 million of our shares, which leaves us approximately $1.2 billion of repo authorization remaining under the current program. Now turning to guidance. We are reaffirming our full year 2026 guidance for revenue and adjusted EBITDA and we are raising the guidance for adjusted diluted earning over share. We continue to expect revenue to be between $17,150,000,000 and $17,350,000, representing growth of 5.2 to 6.4% or 5.8% at the midpoint. This revenue guidance continues to assume approximately 150 basic points of contribution from acquisitions and approximately 100 basic points of tailwind from foreign exchange. These assumptions are unchanged from the prior guide. We continue to expect adjusted EBITDA to be between $3,975,000,000 and $4,025,000,000, growing 4.9 to 6.3 percent year-over-year or 5.6 percent at the midpoint and we are raising our adjusted diluted EPS to be between twelve dollars and sixty five cents and twelve dollars and ninety five cents of six point one to eight point six percent versus prior year for seven point four percent at the midpoint now turning to the second quarter for q2 we expect revenue to see between four billion two hundred and eighty million dollars and 4 billion 340 million dollars which represents year-over-year growth 6.5 percent to 8.0 percent adjusted ebitda is expected to be between 955 million dollars and 975 million dollars representing growth of 4.9 percent to 7.1 percent versus prior year and adjusted diluted eps is expected to be between two dollars and 98 cents and three dollars and eight cents which represents year-over-year growth of six point zero to nine point six percent both this guidance and our full year guidance assume that foreign currency rates as of may 4th continue for the balance of the year so to summarize acubia delivered outstanding financial results the first quarter revenue and the justice alluded eps succeeding the high end of our guidance we delivered strong acceleration of organic revenue growth in both commercial solutions and RDS. RDS net new bookings grew double digits year-over-year with solid year-over-year and sequential growth in net service fee bookings. We continue to make very strong progress in the deployment of highly specialized science industry AI agents with more than 190 agents deployed covering over 60 use cases across commercial solutions and RDS businesses, with 19 out of the top 20 pharma companies already using our agents in some of their workflows. And the forward-looking indicators continue to point in the right direction for both commercial solutions and R&DFs. We repurchased $552 million of our shares in the first quarter, and we reaffirmed our full year 26 guidance for revenue and adjusted EBITDA and raised the guidance for adjusted diluted earnings per share. Now with that, let me hand it back to the operator for Q&A.

At this time, I would like to remind everyone in order to ask a question, press star, then the number one on your telephone keypad. We request that you please limit yourself to one question so that others in the queue may participate as well. We'll pause for a moment to compile the Q&A roster. Your first question comes from the line of Michael Czerny with Leerink Partners. Your line is now open. Please go ahead.

Good morning, everyone. Thanks for taking the questions. Maybe if I can just dive in a little bit more on the services versus pass-through and bookings that you saw in the quarter. As you think about the demand dynamic, how should we think about that conversion of what you're winning, of a lot of the contracts obviously you went through, against the margin progression, Ari? I just want to make sure I understand, we all understand the push and pull on what what's coming through across the into the backlog versus how profitable that is relative to the core business especially if these are a lot more full service oriented wins within the R&DF segment thank you okay I hope I understood your question well but just you know the service fees versus pass-throughs you understand that pass-throughs have zero profitability drop-through, right?

I mean, that's clear. So pass-throughs are irrelevant to profitability. We have to report them because that's an accounting requirement. We have solid execution in the quarter. We booked $2.5 billion of trials in the world it just happens to be that the mix of indications was such that we had trials that have full service trials have less pass-throughs not fsp just full service trials that had less pass-throughs in fact if you look at the pass-throughs i think i don't know if we disclose this generally but the first quarter um was you know past was like about one third lower than the historic average it's always within a range but it was significantly lower um you know again had we had we had a regular mix of projects uh consistent with the long-term history and a consistent level of pass-throughs then we would not be having this conversation the infamous quarterly book to be ratio would have been quite significantly higher um the so there's no impact on margins you know unexpected margins that has no impact whatsoever i want to point out that on the pure service fee bookings year over year and sequentially we were up very significantly now ignoring the pass-through issue generally q1 nmb is always lower than q4 sequential and if you look at our history it's usually lower 16 17 percent q4 to q1 And this quarter, it was lower less than that. I think it was 13% down. So it was lower as always, but a little bit less than usual. Frankly, we also have the most conservative bookings policy in the industry. You only book business when it's contracted. So if we are awarded a couple of trials at the end of the quarter, and the client board is only meeting on April 2nd, And that's when the contract is signed, then that's when we book it. It's not a first quarter win. So the influence this can have on a reported book-to-bill is very, very significant. again and i said this when we reported book to build ratios of 1.3 i said it when we reported book to build ratios of 0.9 and i'll say it again today the quarterly book to build metric is really a bad metric to predict future growth i can point easily to many of our competitors who reported great book-to-bill ratios, and are going to have very negative growth going forward. I'll point to us. Last year, at this time, we reported a book-to-bill of 1.02. And if this were predictive of growth, this quarter, we would be showing really poor, a limit growth in our NDS. And yet, we're reporting very strong, 3% organic growth, over 6% reported. So when we stream a couple of points from FX and about a point from acquisitions, our organic growth in R&D S was 3%. Could you have predicted that from the 1.02 reported book to be last year? The answer is no. So again, and again, there's zero impact from AI in our bookings. I just don't want anyone to get the wrong impressions. I can report that the number of trials that we lost to anyone using Jean-Paul or any other AI tool, the number of trials that we lost to any of these AI solutions is exactly zero. And again, no impact on margins whatsoever from the unusually low pass-throughs in the bookings discord. I hope that gives you enough courage. Helpful context, Ari. Thank you.

Your next question comes from the line of Justin Bowers with Deutsche Bank. Your line is now open. please go ahead.

Good morning. A two-parter, maybe one for Ari and one for Mike. So just in terms of the wind you saw here, it's interesting to hear FSO, the FSO dynamics and that having less pass-throughs, but is that more of a function of how customers are, the clinical strategy that you're deploying and or are you seeing any shift there from large pharma either in the quarter or what's in the funnel that's number one and then part two of that would just be on the margins is that something that we would um that we would see this year or is that more of

like a 2027 and beyond dynamic thank you again uh look the again what i'm going to repeat again one quarter doesn't make a trend and one quarter of bookings 2.5 billion dollars of bookings that are going to be to revenue over the next four to seven years uh is not going to affect our margins uh one bit um now it's not indicative of any change whatsoever it just happens to be that the trials that we won this quarter had lower passes they had nothing to do with a change in customer dynamic nothing just happens to be that's the deck that we were served and that we went after some trials like for example your record vaccine trials had enormous amounts of pastures uh there are certain types of large cardiovascular studies that require a lot of patience and a lot of um procedures uh to perform the protocol of the trials may require more reimbursed expenses that just wasn't the case in school it's unusual There we would have lower past roots, but that's what happened. Nothing more to it, and I wouldn't read anything about changing climate dynamics or anything like that. Not at all. You're trying to understand the demand, which I think is the right question. And frankly, we see no change at all in the fundamental drivers of outsource clinical development. that the the trial the level of complexity in trials is rising the need to execute trials globally is rising the growing use of data and analytics all of this point to the need to outsource more not less so in our conversations with pharma we see a constructive demand environment yes in the near term we see that the environment has stabilized and we see also that large sponsors are still taking a more deliberate approach to capital deployment that recall the coming out of three to four years of policy driven micro headwinds and all kinds of disruptions so we still see you know perhaps a slower than we haven't returned to the decision-making speed that we saw before all of these periods started. It's getting there and we're seeing things going back to in the right direction. That's for Ashwama. On the EDP side, you know, I mentioned funding, which is growing at a very nice pace, which points to renewed confidence in the assets in the pipeline, in general, in the industry. And as you know, it takes a year, a year and a half before funding drives an award and certainly into the backlog, but the demand indicators are quite strong. Do you want to address that other question?

Yeah, I'm happy. So firstly, just to re-emphasize Ari's point about do not draw any sort of margin inclusions from one quarter booking. You have to remember that every dollar we book now burns over like five years. But I'll give you some more color on our margins and use T1 as an example. So when we reported 60 basis points of EBITDA margin contractions, all of that was due to non-operational headwinds, which are really sort of the effects and pass-throughs driving that. And we have a very, very strong productivity program. So when you look what happened operationally, right, obviously we're dealing with adverse mix in sort of our portfolio, but our productivity programs more than offset that mix. So operationally, we expanded margins actually quite significantly in the quarter.

So it just further highlights the point to say, you know, when you look at sort of a quarter certain bookings or even several quarters of bookings you know you can make no correlation to future sort of margins yeah i want to add i think just take the opportunity to once again reiterate we um reported because you wanted this book to be the ratio but it it really and we give you a lot of color on what's in our bookings more color than anyone else in the industry and oh by your way uh you know our number two competitor is part of a larger conglomerate and we know nothing about their numbers and our number three competitor we have no clue what their numbers are now or in the past three years not yet at least and our number four and five competitors are private we have no clue where their bookings are or their numbers are and that's it there's no else out there we can't be compared to anyone else and then you have two marginal competitors so you know we we are disclosing an enormous amount of information um and it's not comparable to to anyone else so even from a competitive standpoint frankly there's very little rationale for us to give you so much cardinal bookings a because you derive conclusions that are really false and misleading and b because it's competitive information that we give to competitors who don't disclose anything all right thanks so much aria mike your next question comes from the line of luke surgot with barclays your line is now open please go ahead good morning guys this is anna krasinski on for luke appreciate you taking your questions wanted to talk more

about the upside and commercial solutions and i know you called out a few of those businesses that were really strong during the quarter but would be great to hear more about maybe which areas were the most surprising versus your internal expectations and then also if you could remind us on the mix of like the more recurring revenue offerings within this business versus what's more discretionary thanks again thank you very much for the question and um you know our commercial solutions business is way way underappreciated um and so i'm thanking you for highlighting um the business um we performed very well in the first quarter um you will recall that um you know

when the industry went through difficulties over the past three years the headwinds caused our large pharma clients to pause discretionary spending as a result our growth rates never went negative but they slowed down to low single digits organic growth we then started to rebound and a year ago in the first quarter our organic growth rate was well about two two and a half percent correct thereabouts our organic growth rate in commercial solutions this quarter was five percent we reported um i think what was the growth rate 11.6 uh at the actual effects as you know we have a strong tailing from currency this quarter if you take that out um the constant currency growth rate is eight and a half percent and we had acquisitions and when you strip that out the benefit of acquisition last year when you strip that out um it's five percent organic growth so it's double the um underlying organic growth year over year what's driving this um you've uh heard me say in my introductory remarks that customers have more questions than they had before because of the you know if i can speak generally our work on ai on the clinical side is focused on creating efficiency and improve execution and reduce timelines so we are embedding ai agents within our existing processes and workflows and helping our clients accelerate timelines which is simply an evolution of what we've been doing over the seven years since the merger which was predicated on utilizing data insights and intelligence to to reduce timelines on the commercial side we are focused on innovation that is creating new offerings and those are gaining traction with our customers customers are dealing with a massive amount of data from us from third parties and generated by their own operations they are also dealing with a legacy of disparate systems um you know that has been built over the years AI agentification processes enable our clients to sort of bypass and leapfrog all of these systems and multiple vendors and data sources and have the ability to analyze information much faster, to derive insights and to make decisions informed by AI agents at much higher speed. And we have been focused on developing agents that enable our clients to do precisely that. Our agents comply with the regulatory requirements of the healthcare industry. They are not generic solutions. They are tailor-made, what we call health-grade AI. agents and we found that our clients are very interested in those solutions we have pipelines that have reached record level in part influenced by the operates that we put into the marketplace that we continue to put out you know a lot of concern was voiced by investors and analysts in the past few orders consequent on a article uh about how ai will replace services industries you know nothing of the sort is going to happen quite the opposite it creates new demand for our service the part of our commercial business that theoretically would be most vulnerable to ai disruption is what we call analytics and consulting and yet we have record pipeline in analytics and consulting we have very strong growth the best we've had in three years in the world and we see this continuing in the balance of the year the underlying demand in commercial solutions is simply fueled by the amount of new drug launches. For example, in Q1 there were 10 new drug launches. A drug launch is the bread and butter of our commercial solutions business. So I think last year at this time we had six or seven launches. So and it's increasing because of the number of molecules that have been approved by the FDA over the past couple of years. Our win rates in the business continue to be strong. I think you asked about the balance of, you know, nothing's changed in terms of our outlook for the different parts of the business. If I can just summarize the interest of time, our info business is about 30 percent of the total and will continue to grow low single digits a little bit stronger than that because it's more demand for data that our own ai agents create um the fact that's the law the slowest growth business the fastest growth business within commercial solutions is what we call patient solutions which is the pieces of real world that were left with commercial solutions and those have very strong double digit growth And then everything else, analytics and consulting, commercial tech, and commercial engagement services, which includes the former CSMS business, by the way, now also supplemented with AI agents, those will grow mid to high single digits going forward. But I hope that gives you more call.

Your next question comes from the line of Shlomo Rosenbaum with Stifle. Your line is now open. Please go ahead.

Hi, thank you very much. Ari, I wanted to get just a view on the market in general. The commentary that you've had is that it's stabilizing. But we're seeing things like talking about analytics and consulting that you say is the highest growth in three years that very often is a leading indicator that things are actually improving and we're seeing things get better. I want to ask you where you could point to us where you're seeing things actually growth accelerating versus just stabilizing or getting, you know, less negative if there's anything like that. And do you think that the performance that you have is indicative of market growth or are you noticing an improvement in the win rates of the business?

Now, I'm asking that in light of the fact that, you know, there is not a lot of data from other public companies, but just whatever you can see and comment on that. yeah well look i completely understand the question i mean it's a question we just had a moment ago again on the demand environment and it's normal right we're coming uh out of a period you know really three to four years of significant turmoil in the industry largely driven by a the post-covid deflationary environment the post-bubble decline which to strain budgets uh the the uh the ira you know under the binding administration and see all the um announced or enacted policies under the travel administration the nfms the tariffs the fda changes etc etc and all of that create constrain the demand environment both on the clinical on the commercial side and so it's always uh when we come out of a period like this it's always difficult to evaluate well are we out there um are these real green shoots or not so i understand the the concern and frankly we ourselves are surprised by how well we performed in the court um and i mean or on every single metric i think we believe and we strongly believe It was an extremely clean quarter. We beat on every one of our financial metrics, pretty much. We surpassed our own expectations on both businesses. And the AI disruption concerns are actually, as we said, a tailwind for our business, and we are seeing it already. We feel confident that destruction will continue. so that's the overall uh uh kind of 40 000 foot perspective now in our conversations with clients large trauma as i mentioned before is much more constructive both on rms and commercial i would say a little bit more on commercial because large clinical trials large capital programs always take more time to get started and again coming out of a long three four year period of more deliberate slower decision making we have not returned to you know business as usual cruising altitude if you will before all of this started but we are much improved versus where we were so the environment is more constructive in large pharma, not quite back to where we were on large pharma, but we're getting there. On the EBP front, EBP funding is reaching record levels. $20 billion in the first quarter is almost double what it was last year. Again, it takes time, but the fact that people commit very significant capital to specific programs in biotech is indicative of renewed confidence and comfort levels, higher comfort levels going forward. I think that, you know, we're going to continue to see this environment that, you know, your question is, are we going back to where we were before? Next quarter, I don't think so. I think the balance of the year continues to be on the large pharma side a little slower it has been much better than it was last year much better than it was two years ago but you know more deliberate thinking you know a large pharma client told us actually if I can share that anecdote that they plan to double the number of molecules in their pipeline because they are using AI to identify by more targets, meaning most of what large trauma has been doing so far on the AI front is at the discovery stage. And that, and maybe that may be counterintuitive to some, but to us it's pretty obvious, that will increase the number of trials because that will increase the number of molecules that are selected. And large trauma are telling us directly that it will increase. and they are even asking us questions about capacity how do we increase capacity to be able to under to handle a much larger number of targets bear in mind there are a number of loes coming up in the four to five year time frame and pharma has to replenish their pipeline ai AI, and it is used today, which again, 90% plus of what AI is using on the clinical side is at the discovery stage, is increasing the number of assets that are going to be pursued. When you feel you have a higher chance of success, then you are going to launch the program. And AI at the discovery stage enables you to identify more targets for search development That, in my mind, increases demand for CIO services and not the opposite going forward. And our conversation with Ash Pharma clearly indicates that that is the case. They've been asking us, you know, what would it take to ramp up capacity? We're not talking next quarter, obviously, but in the mean term. So that's for clinical and commercial, I already commented on it. Thank you.

Thank you.

Your next question comes from the line of Elizabeth Anderson with Evercore ISI. Your line is now open. Please go ahead.

Hi, guys. Good morning and thanks so much for the question. I was wondering if you could comment on sort of the drivers of the margin, particularly on EBITDA, as we move through the year. Obviously, I think the second quarter guide implies a little bit lower EBITDA margin versus consensus I'm wondering if that's a sort of right sizing of some of the mixed impact and then how do we think about that perhaps as you're thinking about the back half of the year thanks so much sure Elizabeth I'll take that one so if you look at their EBITDA progression that's implied in our guide it's pretty consistent with with history so I think there's nothing noteworthy to call out there I think just to add a little color on the margin side.

As we mentioned when we gave our Q1 sort of guidance, Q1 has the largest FX tailwind, and you'll see that start to moderate as we go through the back end of the year.

So given the previously mentioned strength in our productivity programs, you know, we're very confident that we'll see the reported margins sort of flip to positive as we progress through year okay thank you your next question comes from the line of eric coldwell with baird your line is now open please go ahead thanks very much uh good morning so i'm going to start going back to the bookings um maybe look at it a little differently you exited 25 with about 10 billion of total net awards. I don't know what the normal exact pass-through mix is, but if I use, I don't know, a swag of 30%, that would be about $3 billion a year of pass-through bookings, about $750 million a quarter, a third below would be about $250 million. And if we add $250 million back to reported awards as if pass-throughs were normal, that would get us to about a 1.15 book-to-bill. I just want to make sure that that logic and thought process is, you know, somewhat consistent with what you're trying to express today. And maybe that leads to... Eric, you are amazing.

The answer to your question is yes.

Ari, just tell my wife and kids that I'm amazing. Write you a letter. So I wasn't going to insert a joke here.

And by the way, if we, by the way, if we, if in addition to that, our revenue in R&Ds would have been what we planned as opposed to the strong bid because we converted faster, we burned faster in the quarter, then it would have been all of that. I'll let you figure it out. You do well at math.

Yeah. So I guess I won't insert my joke of what is the book to Bill in Q2. I do have one other serious follow-up. Can we get the constant dollar organic growth in both segments? I know you did give some proximate details on commercial. Maybe you could solidify those comments for us and then give us the RDS numbers on a recast basis.

Yeah, absolutely. Absolutely. Okay, I'm going to say from memory, but you just heard me. The growth on R&Ds reported is 6.2 percent. Is that the number? Correct. Right. Two points of that is FX. One point is acquisitions, right? And so therefore, And therefore, organic growth for R&Ds in the quarter was 3%. A year ago, it was 1%. On the commercial side, reported is 11 and a half, and then the FX impact is three points. And the acquisition impact is another three points, or a little bit more than three points. right so uh organic on the commercial side is five percent which is double what it was last year it's about four percent over offer right so again three percent organic for nds five percent organic for commercial four percent for the enterprise thanks very much um keep up the good work i thought it was a good quarter excellent thank you appreciate that Derek at this time Mr. Joseph I turn the call back over to you

thank you operator with you again on our second quarter of 2026 earnings call the team will be available the rest of the day to take any follow-up questions you might have thank you have a good day this concludes today's conference call you may now disconnect