Earnings Call Transcript - IQV Q3 2020

Operator, Operator

Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to the IQVIA Third Quarter 2020 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. At this time, I would like to turn the call over to Andrew Markwick, Senior Vice President, Investor Relations and Treasury. Mr. Markwick, please begin your conference.

Andrew Markwick, Senior Vice President, Investor Relations and Treasury

Thank you. Good morning, everyone. Thank you for joining our third quarter 2020 earnings call. With me on the call 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; 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 Presentations section of our IQVIA 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, 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, Ari Bousbib.

Ari Bousbib, Chairman and CEO

Thank you, Andrew, and good morning everyone. Thank you for joining our third quarter 2020 earnings call. The third quarter marked a nice sequential improvement in our financial performance, with results coming in above the high end of our expectations. You will recall that based on early signs of recovery at the end of the second quarter, we raised our guidance for the year. Based on stronger than expected performance in the third quarter, we are again raising our full-year guidance ranges for revenue, adjusted EBITDA, and adjusted diluted EPS. We're expecting a continuation of these recovery trends in the fourth quarter. This, of course, sets us up well for next year. As we promised back in April at the onset of this pandemic, we will talk to you today about our outlook for 2021. Based on what we currently see, we think the most significant COVID impacts to our business are behind us, and our outlook for 2021 indicates strong performance next year and a return to our growth trajectory. Ron will discuss 2020 and 2021 guidance in more detail later. Before we review the quarter, a quick operational update: we continue to experience a gradual improvement in the accessibility of clinical resource sites in the R&D Solutions business, even with the localized flare-ups we've seen around the world. We are seeing a return to on-site monitoring visits, and similar to last quarter, on-site visits exceeded the number of remote visits. In instances where sites remain physically inaccessible for clinical monitoring, remote monitoring and virtual solutions are proving to be effective workarounds. The pace of startup activity picked up significantly during the first quarter, and we are pretty much back to baseline levels for site initiation visits. Of course, special recruitment trends have started to follow as well. Moving to Technology & Analytics, as expected, TAS has remained resilient throughout this crisis in almost every area. We've had very little interruption in data supply or demand. Our information services continue to be mission-critical to our clients and are therefore very insulated from the impacts of the pandemic. The analytics and consulting businesses are performing remarkably well, development being hampered by the lack of in-person interactions. One area we discussed before that has experienced significant disruption is the event management business, which relies almost entirely on face-to-face interaction, and of course, as you know, that business is essentially on pause for now. Demand for our technology offerings remains strong. We've added 45 OCE clients this year, bringing our total number of clients to 125. During the quarter, we successfully rolled out OCE Optimizer, a real-time map-based territory and sales rep alignment solution. These tools saved management teams significant amounts of time previously spent planning and assessing sales data to ensure resources are effectively focused on the appropriate client base and products. Finally, our CSMS business, demand for field reps continues to be soft, which, of course, impacts revenue. But, as we said before, while business development has also slowed due to the lack of in-person interactions, so far the business has performed modestly better than we would have expected as existing clients have largely retained field reps and have been continuing their engagements with us. Now against that backdrop, let's now review our third quarter results. Revenue for the third quarter came in at $2,786 million, which was $11 million above the high end of our guidance range. This revenue beat came from strong organic operational performance. Third quarter adjusted EBITDA was $604 million, with a $22 million beat versus the high end of our guidance range. The EBITDA beat was due to better operational performance and productivity. Third quarter adjusted diluted EPS was $1.63, reflecting the EBITDA drop-through because the below-the-line items essentially netted out to zero. Third quarter R&DS contracted backlog, including pass-throughs grew 18.5% year-over-year to $21.7 billion as of September 30, 2020. We have broad-based bookings strength, but full-service clinical and lab were particularly strong. The contracted net book-to-bill ratio including pass-throughs was 1.71 for the third quarter of 2020, and 1.42 excluding pass-throughs. The LTM contracted book-to-bill ratio at September 30 was 1.55 including pass-throughs, and 1.45 excluding pass-throughs. I will now turn it over to Ron for more details on our financial performance.

Ron Bruehlman, CFO

Thank you, Ari, and good morning everyone. Let's turn first to revenue. Third quarter revenue of $2,786 million grew 0.6% reported and was flat at constant currency. Revenue for the first nine months of the year was $8,061 million, which was down 1.6% reported and 1.2% at constant currency. Technology & Analytics Solutions revenue of $1,207 million grew 10.2% reported and 9.2% in constant currency. Year-to-date, Tech & Analytics Solutions revenue was $3,433 million, up 4.9% reported and 5.6% at constant currency. In R&D Solutions, third quarter revenue of $1,400 million was down 4.5% at actual FX rate and 5.1% at constant currency. Excluding the impact of pass-throughs, R&D Solution third quarter revenue grew 2.6%. Year-to-date revenue of $4,076 million was down 5.6% at actual FX rate and 5.4% at constant currency. Contract Sales and Medical Solutions revenue of $179 million was down 13.9% year-over-year reported and 14.4 % on a constant currency basis in the third quarter. Year-to-date, revenue was $552 million, down 8.6% at actual FX rate and 8.3% at constant currency. Now moving down to P&L, adjusted EBITDA was $604 million for the third quarter, which represented growth of 1.9%, year-to-date adjusted EBITDA was $1,649 million. Third quarter GAAP net income was $101 million and GAAP diluted earnings per share was $0.52. Year-to-date GAAP net income was $160 million and GAAP diluted earnings per share $0.82. Adjusted income was $318 million for the quarter and $841 million year-to-date. Our adjusted diluted earnings per share grew 1.9% in the third quarter at $1.63. Year-to-date adjusted diluted earnings per share was $4.32. Now turning to the R&D Solutions backlog, as Ari mentioned, R&DS new business activity remains quite strong. Consequent to the robust booking activity that Ari talked about, our backlog grew 18.5% year-over-year to close at $21.7 billion, and we expect $5.8 billion of this backlog to convert to renew over the next 12 months, which is an increase of over $400 million versus where we were at June 30, and I would add that the outlook remains quite positive as RFPs are growing low double digits in both volume and dollars. Moving to the balance sheet now, at September 30, cash and cash equivalents totaled $1.5 billion and debt was $12.3 billion, resulting in net debt of $10.9 billion. Due to our strong EBITDA and cash flow in the quarter, our net leverage ratio at September 30 was 4.7 times trailing 12-month adjusted EBITDA, which was down a tick from where we were at June 30. Cash flow was a bright spot as it last quarter. Cash flow from operations was $574 million in the third quarter, up 74% over last year. Capital expenditures were $157 million, and that resulted in free cash flow of $470 million. M&A spending, as you saw, was negligible in the quarter. For the first nine months of the year, free cash flow was $769 million, which is about double the same period last year. Now, as you know, when the COVID-19 outbreak became a pandemic in March, we temporarily suspended our share repurchase program. We did not repurchase any shares in the second or third quarters, but the business is recovering well from COVID-19 disruptions. Underlying demand is robust and cash flow is strong as well, and we have a very solid liquidity position. Closing the quarter with an undrawn revolver of almost $1.5 billion of cash on the balance sheet, and as a result of all this, we have lifted our suspension on share repurchase program, and we expect to opportunistically resume share repurchase activity, and as a reminder, we currently have about $1 billion of share repurchase authorization remaining under the program. Now let's turn to guidance. Given the continuing momentum in the business, we are raising our full-year guidance range for revenue, adjusted EBITDA, and adjusted diluted EPS. Our guidance for the fourth quarter and full-year of 2020 assumes that business conditions will continue to improve during the fourth quarter, and specifically, we assume that localized flare-ups of COVID-19 will not have a material impact on fourth quarter results. We now expect 2020 revenue for the full-year to be between $11,100 million and $11,250 million, which is an increase of $125 million over our prior guidance at the midpoint of the range. For profit, we now expect full-year adjusted EBITDA to be $2,335 million and $2,360 million, which represent a $27 million increase over our prior guidance at the midpoint of the range, and adjusted diluted EPS we expect to be between $6.25 and $6.35, which is an increase of $0.10 over our prior guidance, again at the midpoint of the range. This full-year guidance implies fourth quarter revenue of $3,040 million to $3,190 million, representing growth of 5.0% to 10.2%. Now, this is a wider range than we would normally guide to at this point of the year due to the uncertain timing of pass-through revenues associated with the COVID trials that we are working on. From a segment perspective, we expect Technology & Analytics Solutions revenue would be in the high single digits at the midpoint of our guidance range, R&D Solutions revenue growth to reach double-digits, with the caveat that this growth rate could move up or down based on the timing of pass-through revenue, and CSMS revenue growth to be similar to what we saw in the third quarter. For fourth quarter profit, we expect adjusted EBITDA to be between $685 million and $710 million, representing growth of 6.7% to 10.6%, and adjusted diluted EPS to be between $1.92 and $2.03 or growth of 10.9% to 16.7%. This guidance assumes that foreign exchange rates at September 30, 2020 remain in effect for the rest of the year. As we indicated at the start of the pandemic, we've decided to advance our planning process versus prior years, and as a result we're now in a position to provide our 2021 outlook, and this is much earlier than we would have done in the ordinary course. For the full-year 2021, we expect revenue in the range of $12,300 million to $12,600 million. This represents growth at 10.1% to 12.8% versus the midpoint of our 2020 guide. We expect adjusted EBITDA to be in the range of $2,725 million to $2,800 million, representing growth at 16.1% to 19.3% compared to the midpoint of our 2020 guidance, and finally, we expect adjusted EPS to be in the range of $7.65 to $7.95, which would represent growth of 21.4% to 26.2% compared to the midpoint of our 2020 guidance. A little bit more detail for you, the adjusted diluted EPS guidance assumes interest expense of approximately $420 million, operational depreciation and amortization of about $400 million, and other below-the-line expense items such as minority interest of approximately $50 million, and also a continuation of our share repurchase activity. The effective tax rate we're assuming will remain largely in line with 2020. Our 2021 guidance is predicated on the assumption that business conditions will continue to improve in the fourth quarter and that the majority of business will return to normal during 2021. Our outlook for 2021 also incorporates our view that there will be some tail of COVID work, but growth in R&DS will come primarily from our base business. So in summary, we're pleased with our team's ability to navigate the challenges that COVID has presented throughout the year, and we're proud to be a critical contributor to the solution to this public health crisis. Our R&DS business has adapted well, returning to growth in services revenue, and achieving another record quarter of bookings. Our Technology & Analytics Solutions business improved sequentially and has returned to pre-COVID growth rates despite the headwinds of the event management business. Our solid year-to-date overall company performance has enabled us to raise our guidance for the full-year for revenue, adjusted EBITDA, and adjusted diluted EPS, and now this performance combined with our strong free cash flow and liquidity position has enabled us to lift the suspension of our share repurchase program, and finally, we are expecting continued recovery in the fourth quarter and a very strong 2021. So, with that, let me hand it back over to the operator for Q&A.

Operator, Operator

And the first question comes from Eric Coldwell with Baird.

Eric Coldwell, Analyst

Thanks very much, and good morning. I was curious if you could share with us the percent of your bookings this quarter that came from COVID-related trials? You did give us the metric last quarter, as did I think virtually all of your peers.

Ari Bousbib, Chairman and CEO

I think looking at the contracted services bookings, in the quarter it was about 20%.

Eric Coldwell, Analyst

And, Ari, I assume higher on a pass-through basis given the nature of those large vaccine studies?

Ari Bousbib, Chairman and CEO

The timing and volume of pass-throughs vary. We've received numerous COVID awards since the pandemic began, many of which are small and related to protocol reviews. We have nearly 200 different awards globally. While some are quite small, others involve lab work and protocol reviews, with fees ranging from standard charges to participation in several large vaccine trials. For instance, we've been awarded work on four out of five trials associated with Operation Warp Speed currently in phase three. In some instances, we are involved in full-service work, leading to significant pass-through numbers, whereas in other cases, we only take on lab and pharmacovigilance work. Our involvement is extensive, with some projects including pass-throughs and others not. Many trials where we offer full clinical services also have substantial pass-through numbers, which have not yet been reflected in our revenue figures. This is due to the fact that our full-service vaccine work is at a more advanced stage than some competitors who have already experienced strong revenue flows in previous quarters or expect to see it in the current quarter, mainly from pass-through revenue.

Eric Coldwell, Analyst

That's very helpful, and if I could get you to just follow on to that, a number of investors are focused on how the COVID work plays out over the next several quarters. When do you expect a peak in bookings and/or revenue from COVID-related trials at which point we would obviously need the quarter to be back fully to offset any year-over-year comparisons that might be developing?

Ari Bousbib, Chairman and CEO

Yes, I understand you're referring to 2021.

Eric Coldwell, Analyst

Yes, and...

Ari Bousbib, Chairman and CEO

We have dedicated significant time to assess how 2021 will unfold. We've conducted a thorough review from the ground up to evaluate potential outcomes. Our business segments are influenced by probabilities and revenue assessments for future periods, which also applies to the COVID trials. The majority of the revenue from the large full-service COVID trial is pass-through, meaning it doesn’t affect profits. For vaccine trials, there are instances where pass-through revenue can be ten times that of service revenue, unlike traditional trials, which typically have a smaller ratio of pass-through to service revenue. Pass-throughs do not impact our profits at all, which complicates predictions. Additionally, we've considered the possibility of vaccine trials being canceled. It's possible that if one or more vaccines are approved, it may not be financially viable for sponsors to continue other trials. Historically, vaccine projects have had a higher cancellation rate compared to other drug developments. We've incorporated these factors into our guidance and feel optimistic. We have accounted for various potential scenarios. Many projects that were planned for this year have been delayed as clients have redirected their focus and resources towards COVID-related work. Our clients expect to resume their original projects once this phase subsides. Therefore, we are not worried about a sudden decline in bookings or revenue; we do not foresee that happening and have integrated this variability into our guidance. Our diversified portfolio within both our R&DS and TAS business is advantageous. We are also witnessing increased interest from public health authorities and sponsors in pharmacovigilance, particularly in tracking COVID patients. Our real-world business is seeing robust double-digit growth, and we anticipate continued demand for pandemic-related efforts. While we hope this will be the last major crisis of this type, we acknowledge that future crises may occur. The magnitude of the COVID crisis has provided valuable lessons applicable to our future preparedness, patient tracking, and monitoring approaches. Our CARE Project with the FDA illustrates this, as we examine patients potentially exposed to COVID, linking their medical history with de-identified records to better understand risk factors. These initiatives will persist regardless of the status of the COVID crisis. Everything has been considered in our guidance.

Eric Coldwell, Analyst

Ari, thank you very much for the detailed answers, I appreciate it.

Operator, Operator

Next question comes from John Kreger with William Blair.

John Kreger, Analyst

Hi, thanks very much. Ari, just to kind of continue on that, I think you mentioned to Eric that about 20% of your bookings were COVID-related. For the other 80%, are you able to start those studies up and enroll on a fairly reasonable basis or would you say that's still broadly impaired?

Ari Bousbib, Chairman and CEO

Thank you. As I mentioned earlier, in terms of site initiation visits and site startup activity, this area of our business has shown the strongest improvement. Site initiation visits have returned to baseline levels, and recruitment for positions is beginning to follow suit, which is a positive development. However, the accessibility to sites for ongoing trials has not fully recovered; we are currently at approximately 70% normal accessibility globally. This is slightly below our expectations, but it's notable that we are focusing on critical sites, as their importance varies significantly. For ongoing trials, we are gradually returning to normal activity. For new trials, site startup activities have resumed, and site initiation visits are back to pre-COVID levels. Patient recruitment has significantly increased throughout the quarter. It faced major disruptions as many projects were put on hold, but we are making good progress. While we do not anticipate reaching baseline levels until sometime in 2021, we have taken all of this into account in our guidance.

John Kreger, Analyst

Great, thank you. One quick follow-up, can you give us a sense about where your focus is on sort of new technology development? I think in the past, you've talked about an OCT suite launch by year-end. Is that still on the table?

Ari Bousbib, Chairman and CEO

Yes, absolutely. As you know, we've had great success with OCT coming from behind, and we therefore along with our partners Salesforce, we expanded the relationship to clinical tech platform tools on the health cloud, we have seven technologies available today for digital sides and patient suites. The digital patient suite includes products such as eConsent, eCOA, and also patient portal. We will, by the end of the year, have the digital trial management suite go live probably before the end of the year, and the products will include CTMS, risk-based monitoring, and the mobile CRA platform. So again, the fully orchestrated solution, OCT, that you're referring to, will be available by the end of this year. Again, we are also coming from behind in this area, but we will be claiming our fair share as we're doing in OCT on the commercial side. Thank you.

John Kreger, Analyst

Sounds good. Thank you.

Operator, Operator

Next question comes from Bob Jones with Goldman Sachs.

Bob Jones, Analyst

Great, thanks for taking the questions. I guess, Ari, maybe just a follow-up there, you're saying that site activations are getting back to normal and patient recruitment obviously catching up. You saw X pass-through growth in RDS, I think of around 2.6%. I guess, what needs to happen to see the double-digit RDS growth in 4Q, and more importantly, what has to happen between now and over the course of '21 to kind of get to that guidance range? Is there a lot that needs to improve, or is it just kind of a normal course of what you're already seeing that needs to play out in order to get to these 4Q and 2021 RDS targets?

Ari Bousbib, Chairman and CEO

We expect to see double-digit RDS growth in Q4 and mid-teens growth in 2021. For this to happen, we need to continue with normal business operations, as outlined in my earlier response. Our guidance is constructed from a bottom-up perspective, project by project. We anticipate that once the elections are over, there will be more clarity in the environment and that multiple vaccines will be available. People are adapting and moving forward with their lives, and we expect this to progress throughout 2021. When we refer to 'Normal Business Conditions,' we're assuming that the current positive trends and improvements will persist with greater stability in 2021, provided no new pandemic-related issues arise. We haven't made any significant acquisitions in the last two years and have primarily been focused on organic growth, which reinforces our confidence in this guidance.

Bob Jones, Analyst

That's fair, and I guess maybe just one follow-up. We haven't spent a lot of time on TAS. You described it as resilient, but I think the growth rates the highest we've seen in years. Can you maybe just spend a little bit more time there talking about what's driving the performance in TAS? I know you mentioned real-world evidence, but just wanted to get a little bit more clarity behind the record growth you're seeing in that segment?

Ari Bousbib, Chairman and CEO

The performance reflects the sales and demonstrates the resilience of the business. Much of what we do is essential for our clients, regardless of the pandemic. The data business has remained steady, emphasizing its critical nature. We’ve maintained excellent visibility. At the onset of the pandemic, many people thought we were unrealistic for providing precise guidance for the remainder of the year, yet we find ourselves on target. This isn't due to brilliance, but because we have visibility from our businesses, and we operate globally. Different regions are experiencing various stages of the pandemic, allowing us to model the situation effectively with our internal database, advanced analytics, and predictive modeling capabilities.

Ron Bruehlman, CFO

Yes, just one thing I would emphasize, Bob, if there was a surprise versus where we were expecting early in the year, it's our analytics and consulting business has continued to be very strong, and I think Ari highlighted that in his prepared remarks that we were expecting some disruption due to business development activity, face-to-face selling being affected, and in fact that hasn't, our analytics and consulting visits have been quite strong.

Bob Jones, Analyst

Thanks for all that. Appreciate it.

Operator, Operator

Next question comes from Tycho Peterson with JPMorgan.

Tycho Peterson, Analyst

Hey, thanks. Ari, starting with R&D, does the 4Q guidance assume resumption of any of the trials that have been halted with J&J and AstraZeneca, and then, what gives you the confidence that COVID flare-up won't impact results? I know you talked about site initiation visits back to baseline levels, but I guess what I'm really asking you is have you taken steps to try to kind of mitigate any impact of flare-ups, and then, as we look ahead to 2021 in R&D, can you just give us a sense of how much could contribute to that mid-teens growth you talked about? Thanks.

Ari Bousbib, Chairman and CEO

Yes, you asked about the effects of the delays in the vaccine work. First, interruptions in trials are quite common due to adverse events. In vaccine trials, the number of participants is substantial, often reaching 30,000 to 60,000 people, which inevitably leads to adverse events causing trial interruptions. However, we've accounted for this in our guidance, and we don’t anticipate major issues. Additionally, cancellations in vaccine trials are more likely, but we have incorporated these probabilities into our planning. Keep in mind that cancellations can result in a total loss of revenue, but for our full-service trial, which includes COVID work, most of the revenue is pass-through. Therefore, the portion of revenue derived from services does not yield significant margin since it's part of our contribution to the overall effort. What was your other question?

Tycho Peterson, Analyst

Yes, I mean it was whether you're taking proactive steps to mitigate any impact from COVID flare-ups? You talked about site initiation levels, but what gives you confidence and no impact, and then on the 2021 outlook you talked about COVID being 20% of awards, but how much do you think it contributes to growth that mentions growth next year?

Ari Bousbib, Chairman and CEO

Yes, I don't have to give you the exact contribution to vote, but it's not what's creating the very strong double-digit growth that we expect.

Ron Bruehlman, CFO

We have solid growth next year in revenue in R&DS even excluding like COVID work. That's the short answer.

Tycho Peterson, Analyst

Right.

Ari Bousbib, Chairman and CEO

By the way, our growth this year, underlying growth without the COVID work also, not that great growth, but …

Ron Bruehlman, CFO

Yes, in Q4 also…

Ari Bousbib, Chairman and CEO

Yes, the flare-ups are something to consider. If they continue at the current rate and frequency, that will affect our guidance. However, with the introduction of vaccines by the end of this year or next year, we believe things will improve, and people are already adapting. For instance, in China, things have pretty much returned to normal, about 95% accessible. There are still flare-ups there, but people are managing. We also need to catch up on some work, and that has been included in our guidance. This year, we did a lot of remote monitoring when we couldn't access sites, but it's important to remember that we won't move completely to remote monitoring. Regulatory authorities worldwide require on-site verification of source documents. The FDA and others explicitly state that source documents cannot be shared remotely. What has changed is that more data points, like key safety and efficacy data, can be reviewed remotely now, and there are fewer requirements for less critical data. Still, we have essential work to do that can't be done remotely. All of this represents pent-up demand that we need to address in the upcoming quarters as we catch up.

Tycho Peterson, Analyst

Okay, and then, Ari, last quick one on CSMS, can that return to, you know call it low single-digit growth next year?

Ari Bousbib, Chairman and CEO

I don't know about that, because I'm not going to venture to make predictions on CSMS; I've been wrong in both directions. I have assumed they would go down and they went up, and I assumed they would go up, and they went down. So, look, what's factored into our guidance is kind of flattish growth, okay, if it's plus 1%, plus 2%, I don't know; flattish growth for next year. More detail on the segments when we provide guidance in the ordinary course at the beginning of '21 when we share full-year results and Q4 results, and as we traditionally do, and we'll give more detail on segments there, because I'm sure you can derive based on the comments we made and on the overall guidance that the momentum we see now, three business segments will continue.

Operator, Operator

Next question comes from Erin Wright with Credit Suisse.

Erin Wright, Analyst

Thanks. In terms of capital deployments here, the share repurchase activity, what's embedded overall on your guidance for 2020-2021, and in terms of the share repurchase activity and have you been active in the fourth quarter to-date, and I guess, on that topic as well, you mentioned it was a largely organic growth that you're pointing to, I just want to clarify, does this guidance assume any acquisition I guess activity consistent with your past practices?

Ari Bousbib, Chairman and CEO

You mean the fourth quarter?

Erin Wright, Analyst

Fourth quarter and 2021.

Ari Bousbib, Chairman and CEO

Yes. So, first of all, congratulations to you, Erin, nice to have you back.

Erin Wright, Analyst

Thank you.

Ari Bousbib, Chairman and CEO

And secondly, look, we have not done any share repurchase since we suspended our program. So, other than the shares that we repurchased in the first quarter when the last primary sponsor shares were sold and we participated in that secondary, and you know about that. That was in the first quarter pre-pandemic. We haven't done anything since then. I wish we had bought all the shares by the way at $85 a share, but we didn't, and so, we're going to start now optimistically after the earnings release, and there won't be probably the markets. We don't have lots of time since we have to start before the end of the year anyway, and with respect to acquisitions, no, I mean there's nothing here for the balance of the year that would be materially different than what we've seen this year, that is relatively negligible M&A activity. In 2021, what's the assumption, Ron…

Ron Bruehlman, CFO

Well, you can expect in 2021 we'll spend some on acquisition share repurchase together. We'll trade off between the two, and our normal assumption there which is valid in 2021 is about $1.5 billion between the two during the course of the year.

Ari Bousbib, Chairman and CEO

And that's what we had before the pandemic. That is what we had before.

Ron Bruehlman, CFO

Consistent with past practice.

Erin Wright, Analyst

Okay, great, and then just cost mitigation efforts and further flexibility, I guess if you do continue to see things get a little bit worse in terms of these flare-ups, there are ample levers you can pull here from a cost mitigation standpoint, correct?

Ari Bousbib, Chairman and CEO

Yes, Erin, you raise an excellent point. We made a conscious choice not to restructure our workforce. We have kept our employees and maintained their base compensation. This decision was influenced by the crisis, which led us to prioritize our people. Additionally, we expected a strong V-shaped recovery in Q4 and 2021, and we aimed to retain our talents and resources. Consequently, we haven't made any changes. Of course, if a prolonged situation arises that necessitates a different long-term approach, we would adapt our strategy, and we certainly have options available. Despite not reducing our workforce or base pay, we've achieved strong productivity. Like many companies, we have adapted to remote work. We're currently conducting an important internal study called the Future of Work to identify which roles, out of approximately 70,000 positions, can be performed remotely. We've learned valuable lessons during this pandemic regarding our need for office space. This raises questions about the necessity of having a physical presence at the office, particularly for those who spend all day at their workstations without interacting with others. Requirements vary by geography; for example, in countries like Japan, in-person presence might still be necessary. As we explore remote work options, there will inevitably be changes to our real estate footprint, as is the case for most companies. The IT investments we're making aim to enhance our remote capabilities further. However, we still have significant levers that we have not yet utilized.

Erin Wright, Analyst

Okay, great. Thank you.

Operator, Operator

Next question comes from Patrick Donnelly with Citigroup.

Patrick Donnelly, Analyst

Thank you for your question. Ari, concerning remote monitoring and virtual trials, there has been a lot of discussion about that during the pandemic. Have you observed an increase in general bookings and trials? Are you noticing any significant changes in activity in that area, and how is your team positioned? Could you elaborate on that?

Ari Bousbib, Chairman and CEO

You are talking about remote? Yes, anybody wants to take this?

Ron Bruehlman, CFO

On the remote monitoring side, we have largely been able to substitute for the work we would otherwise be doing onsite, but not entirely, as there is still a requirement to be onsite to check source documentation according to FDA guidelines. It's important to note that remote monitoring is different from virtual trials. Virtual trials encompass elements like patient tele-visits, home health nursing, phlebotomy services, and patient diaries. There is often confusion between these two terms, with people claiming to conduct virtual trials when what they are actually implementing is remote monitoring.

Ari Bousbib, Chairman and CEO

Remote monitoring involves tracking certain elements that can be observed without being physically present, acknowledging that not all parts of a trial are suitable for this approach. A virtual trial is specifically structured to operate virtually, allowing for onsite monitoring visits as necessary, but it utilizes distinct technology from the outset. In contrast, remote monitoring is simply one aspect of traditional trials where some data and activities are observed remotely.

Patrick Donnelly, Analyst

Okay, that's helpful. I guess just on the TAS business and following up on Bob's question, you guys had lengthy talks about the quality resiliency there. So, it's encouraging to see the high single-digit growth this quarter. Outlook certainly seems bullish for 4Q in '21. I guess when we think about '21, continuing this high single-digit growth, I guess further one or two key drivers you see there, customer conversations I assume certainly trending positively, but would love just little more granularity on the outlook for next question on that side?

Ari Bousbib, Chairman and CEO

We have based our guidance on TAS on the current conditions, which have proven resilient even during the worst of the pandemic. Therefore, when things stabilize, we anticipate maintaining our high single-digit growth trajectory. The data business is showing zero to low single-digit growth, which remains very stable. The analytics and services segment is performing in the mid to high single digits and is now leaning towards the higher end of that range. The real-world business is thriving; it was already performing well before the pandemic and has maintained strong double-digit growth, which is expected to continue. Technology is also progressing as the deployments of OCE are advancing smoothly, leading to upcoming license revenue, which, while not a large portion of the TAS business, is expected to contribute positively with healthy margins. Given these four business segments and the momentum we’re seeing, there are no significant factors that could impede the company's growth rate. Andrew, do you have any…

Andrew Markwick, Senior Vice President, Investor Relations and Treasury

We are approaching the top of the hour. So, I was wondering do we want to squeeze in one more quickly, operator.

Operator, Operator

The question is from Shlomo Rosenbaum with Stifel.

Shlomo Rosenbaum, Analyst

Hi, thank you very much for squeezing me in at the end. I just want to piggyback off that last question. Ari if you can talk a little bit about more just on the incumbent patients? One of point of time, you mentioned there were like 50,000 seats to deploy. Just like where you are? How long do you think this is going to take, and is there anything changing in terms of competitively, or is it really the same kind of run rates that you had talked about in prior earnings calls?

Ari Bousbib, Chairman and CEO

Thank you, Shlomo. The OCE has maintained the same momentum, operating about two-thirds of the time. As I indicated earlier, we have gained an additional 45 new clients since the start of the year, bringing our total to 125 distinct clients. When I refer to clients, I mean one company. Some competitors count multiple wins with the same client as several, but we consider that one. You mentioned 50,000, but I believe we are now at around 63,000 to 64,000.

Andrew Markwick, Senior Vice President, Investor Relations and Treasury

Maybe just around 63, yes.

Ari Bousbib, Chairman and CEO

Yes, close to 65,000 users in deployment, and we expect that to continue to grow. That's a nice pipeline. Lots of conversations continue to go. So, the momentum here is unabated. No changes. Thank you, Shlomo. Thank you everyone.

Andrew Markwick, Senior Vice President, Investor Relations and Treasury

Thanks very much. Thank you everyone, and thanks for taking the time to join us today. We look forward to speaking with you again on our fourth quarter 2020 earnings call, and as always, Jen and I will be available to take any follow-up questions you might have throughout the day.

Operator, Operator

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