Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to the IQVIA First Quarter 2025 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. I would now like to turn the call over to Kerri Joseph, Senior Vice President of Investor Relations and Treasury. Mr. Joseph, please begin your conference.

Thank you, operator. Good morning, everyone. Thank you for joining our first quarter 2025 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 of Financial Planning and Analysis; and Gustavo Perrone, 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 also will be available following this call on the Events and 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. 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.

Thank you, Kerri, and good morning, everyone. Thank you for joining us today to discuss our first quarter results. I’m going to start with a usual update on financial performance for the quarter, and then provide perspectives on the market, including our understanding of the possible effects of recent U.S. government initiatives, how we are well positioned to navigate these near-term challenges, and finally, why we remain confident about the industry’s resilience and prospects. I’ll close by highlighting a few important wins in the first quarter. So let’s get started. We delivered strong revenue and profit results at the high end of our expectations, despite a continued challenging environment in R&DS. Total revenue for the first quarter came in above the high-end of our guidance range, representing year-over-year growth of 2.5% on a reported basis and 3.5% at constant currency. And compared to last year and excluding COVID-related work from both periods, we grew the top-line about 4.5% on a constant currency basis, including about a couple of points of contribution from acquisitions. First quarter adjusted EBITDA increased 2.4%. First quarter adjusted diluted EPS of $2.70 increased 6.3% year-over-year. Let me share some details on the market landscape and the demand metrics we’re seeing for each segment. Starting with TAS. The business continued the strong recovery trend we saw exiting last year as our clients are launching new drugs and executing on their commercial roadmaps. It is in times like these, where there is some uncertainty in the biopharmaceutical sector, that we clearly see the value of the scale, diversification, and differentiation of IQVIA’s portfolio offerings. It’s great that TAS is contributing over 40% of our revenue. TAS revenue growth actually came in above our expectations at 6.4% reported and 7.6% at constant currency led by double-digit growth in real-world evidence. On the clinical side, as we expected, the near-term market environment continues to be challenging. We experienced delayed decision-making by customers on new programs reflecting the heightened macroeconomic and industry sector caution. In fact, our average time from RFP issuance to award in the quarter increased by approximately 10% both year-over-year and sequentially. We believe that this is the result of the sector uncertainty caused by the pronouncements of the new administration. Several of our clients are slowing or reevaluating programmatic decisions until there is better visibility. Also reflecting these same concerns, the funding environment for EBTs, especially for early stage, has deteriorated. While the R&DS business is experiencing some turbulence, our demand metrics remain positive. Our backlog reached a new record of $31.5 billion at the end of the quarter, growing 4.8% compared to the prior year. Our first quarter RSP flow improved mid-single-digits year-over-year and high-single-digits sequentially. Our qualified pipeline is up low-single-digits year-over-year driven mostly by good growth in large pharma. Now, obviously, the demand environment is impacted by the proposed changes that have been signaled by the new U.S. administration. The White House’s initiatives relative to our industry sector can be grouped into three categories: tariffs; agency actions, particularly HHS and FDA-related; and drug pricing. Starting with tariffs, when the President announced plans to initiate the reciprocal tariff program, the pharmaceutical industry received certain exemptions. However, following the announcement, the Department of Commerce began a national security investigation of the life sciences industry, which may result in tariffs specific to the pharma sector. Now, IQVIA’s direct exposure to tariffs is limited primarily to certain supplies in our laboratory business and is immaterial financially. We understand that industry-specific tariffs, if implemented, may have a more direct impact on our customers. However, it is too early to assess what that impact may be. With respect to agency actions, HHS announced a number of initiatives, including NIH delays and cancellations of government contracts, along with establishing a 15% cap on indirect costs. Now, to be clear, IQVIA has no clinical trial contracts with BARDA and no COVID-19 contract sponsored by the government, so our exposure there is zero. That said, we have excellent relationships with these agencies, including BARDA, that do have a minimal amount of business with the government, and we do not expect any of these to have any impact at all. The NIH funding cap relates to indirect administrative and overhead costs. It aims at aligning those indirect costs to the same levels as private foundations. This has no impact on direct costs for research funding and, therefore, zero impact on us. Regarding the FDA, there have been numerous restructuring actions announced, which have impacted a significant portion of the workforce. These reductions in force primarily targeted overhead and support functions such as planning, training, travel, communications, and records management. Importantly, core products review teams responsible for evaluating new drugs, vaccines, and medical devices, which are primarily funded by the industry, were largely preserved to maintain the FDA’s essential regulatory functions. Today, we have no evidence of any trial or approval delays. Whatever anecdotal disruptions there may be in non-approval related interactions with FDA staff, we expect this to normalize. FDA Commissioner Makary has announced his intention to reduce animal testing in favor of AI-based models and enhance usage of real-world evidence in the approval process. We applaud this and we see these actions proposed by Commissioner Makary as belated in our industry. They will enable clients to move prospects faster into clinical trials. The increased use of real-world evidence not only in pre-clinical work, but also in Phase 2 and Phase 3 trials plays to IQVIA strengths. Ultimately, this is positive news for EVP companies, which develop over 50% of the drugs in clinical trials. Finally, on drug pricing, the U.S. administration recently issued an executive order regarding the role of PBMs, pricing transparency, and Medicare costs. These initiatives are still in their early stages and some provisions may require further approval. The impact of these potential actions is difficult to ascertain at this point because the specifics have not been determined, but there are two aspects that could actually be very positive for the industry. First, the proposal to do away with the so-called pill penalty provision in the Inflation Reduction Act, which subjects small molecule drugs to CMS pricing review after only 9 years versus 13 years for large molecule drugs. This is key for pharma clients as 50% of the drug’s value is realized in years 9 to 13. Second, the focus on drug pricing treatment value and comparative effectiveness drives the need for earlier clinical results and more real-world evidence. So, in summary, some of our customers have slowed down their decision-making processes, as you would expect, and we experienced delays in RFPs moving to contracts in the first quarter. An unusually high number of EBP awards that were contracted in the quarter were not included in our bookings because funding had not been secured yet. Now, we are confident that our industry will successfully manage the spirit of uncertainty, and we’ll find ways to adapt. The life sciences industry has consistently demonstrated its resilience, overcoming macroeconomic obstacles, and thriving in changing environments, and IQVIA is particularly well-positioned to navigate its marketplace. We believe when everything is said and done, key decision-makers will recognize the industry is a strategic sector for the U.S. that deserves to be strongly supported. U.S. companies in the biopharmaceutical sector have maintained strong global leadership in biomedical discovery and clinical research. Our sector serves as an extraordinary engine of innovation. It was responsible for 46% of the 634 novel drugs approved globally over the past decade, confirming strong U.S. leadership. The U.S. is responsible for 61% of global pharmaceutical sales of branded drugs, which is up from 56% a decade ago. The sector invests almost $200 billion annually in research and development and drives economic growth, contributing $1.65 trillion of economic output annually. It supports direct and indirect employment of nearly 5 million people at an average of $157,000 annually, which is double the national average. In fact, many non-U.S. large pharma companies have moved their primary R&D centers to the U.S. to take advantage of the talent pool. And, of course, the biopharmaceutical industry provides substantial societal benefits by improving health outcomes and extending life expectancy. Now, before I turn it over to Ron, let me give you a little bit of color on business activity in the quarter, and I’ll be brief here and just mention a few salient examples. As the revenue numbers show, TAS did quite well in the quarter. We won a number of partnerships with clients that are launching new products. For example, the last project for an important EBP client that’s launching their first product and the first-ever treatment for low-grade serous ovarian carcinoma. We also won a launch partnership with another EBP leveraging our AI-powered patient relationship manager platform for a groundbreaking treatment for a rare condition in an underserved patient community. We were selected to support a mid-size pharma client with an omni-channel campaign that includes KPIs designed to improve patient engagement. Our commercial technology suite continues to be successful in the marketplace. Our award-winning SmartSolve offering, which is a proprietary quality management system, displayed excellence at an EBP client. In the MedTech space, we secured a significant contract to deploy an integrated information solution to help our clients streamline operations and decision-making. Let me skip a few more of these and move to R&DS. We achieved notable wins across customer segments. As you recall, last year, we renewed all 22 of our strategic partnerships with large pharma clients and we expanded the scope in half a dozen of them. We are being awarded significant contracts from these partnerships. For example, in the quarter, a top 5 pharma client selected IQVIA as a preferred partner and awarded us four early-stage studies under the new model. IQVIA was selected by a top 20 pharma client to support a Phase 3 obesity program across eight studies. Our best-in-class clinical trial technology solutions and industry-leading expertise were key factors in securing this deal. The top 10 pharma clients selected IQVIA as their preferred provider to achieve a significant reduction in case processing time, enable efficiency, and manage the increasing volume. We secured a contract with an EBP client to run a Phase 2 trial for an innovative treatment for patients with pulmonary hypertension associated with interstitial lung disease. The customers selected IQVIA due to our deep technology expertise, delivery model, and partnership-focused approach. Lastly, Mike mentioned our progress with AI. You may recall we announced our collaboration with NVIDIA earlier in the call. We are progressing as planned to deploy highly specialized industry AI agents. So far, we moved over 20 agents into production, covering three use cases in each of the commercial, real-world, and R&DS segments. We are seeing positive results and productivity gains in areas where these AI agents have been deployed. For example, one AI system in commercial allows us to reduce delivery time by two-thirds, from 12 weeks to 4 weeks, with a net 30% cost reduction. We plan to scale up from these three use cases to 12 by the end of the second quarter and 40 use cases by the end of the year. And now to Ron for more details on our financial performance.

Thanks, Ari, and good morning, everyone. Let’s start by reviewing revenue. First quarter revenue of $3,829 million grew 2.5% on a reported basis and 3.5% at constant currency. In the quarter, we had virtually no COVID-related revenue versus over $40 million in last year’s first quarter. Adjusting for this COVID step-down, constant currency growth was about 4.5%. As Ari mentioned, acquisitions contributed approximately 2 points of this growth, the majority of this in the TAS segment. Technology & Analytics Solutions revenue for the first quarter was $1,546 million, that was up 6.4% reported and 7.6% constant currency. R&D Solutions first quarter revenue was $2,102 million, up 0.3% reported and 1.1% constant currency. Excluding COVID-related work, R&DS revenue grew approximately 3% of constant currency. Finally, Contract Sales & Medical Solutions first quarter revenue of $181 million declined 4.2% reported and 2.1% at constant currency. Moving down to the P&L. Adjusted EBITDA was $883 million for the quarter, that was growth of 2.4% year-over-year. First quarter GAAP net income was $249 million and GAAP diluted earnings per share was $1.40. Adjusted net income was $479 million for the first quarter, up 2.4% year-over-year, and adjusted diluted earnings per share grew 6.3% to $2.70. R&DS backlog at March 31 was $31.5 billion, an increase of 4.8% year-over-year and 4.6% at constant currency. Next 12 months, revenue from this backlog is $7.9 billion. Reviewing the balance sheet. As of March 31, cash and cash equivalents totaled $1,740 million and gross debt was $14,330 million, resulting in net debt of $12,590 million. Our net leverage ratio ended the quarter at 3.40 times trailing 12 months adjusted EBITDA. First quarter cash flow from operations was $568 million and CapEx was $142 million, resulting in strong free cash flow of $426 million. In the quarter, we repurchased $425 million of our shares. This leaves us with approximately $2.6 billion remaining under the current program. Okay, let’s turn to guidance now. You saw we’re raising our full year revenue guidance by $275 million to reflect more favorable foreign currency exchange rates since we last guided. We now expect revenue to be between $16,000 million and $16,400 million, which represents year-over-year growth of 3.9% to 6.5% on a reported basis or 5.2% growth at the midpoint. This guidance now includes a year-over-year FX tailwind of approximately 50 basis points compared to about 150 basis points headwind in our previous guidance. We continue to assume approximately $100 million of step-down in COVID-related work and about 150 basis points of contribution from M&A activity for the full year. We are reaffirming our adjusted EBITDA guidance of $3,765 million to $3,885 million, as FX changes had a negligible impact on EBITDA. This represents year-over-year growth of 2.2% to 5.5%. We’re also reaffirming our adjusted diluted EPS guidance, which continues to be $11.70 to $12.10, that’s up 5.1% to 8.7% versus the prior year, or 6.9% growth at midpoint. Now, let’s go through the second quarter guidance. For the second quarter, we expect revenue to be between $3.925 billion and $4 billion. Adjusted EBITDA is expected to be between $895 million and $915 million, and adjusted diluted EPS to be between $2.72 and $2.83. Both this guidance for the second quarter and our full year guidance assume that foreign currency rates as of May 5 continue for the balance of the year. So to summarize, in Q1, we delivered strong revenue and profit results at the high end of our expectations. We had very solid free cash flow of 89% of adjusted net income. The TAS business continued to achieve above target performance with revenue growth at 7.6% at constant currency. And R&DS bookings were affected by delayed decision-making by customers on new programs and lower EBP funding, reflecting incremental macroeconomic and industry sector uncertainty. That said, forward-looking indicators for R&DS offerings such as qualified pipeline, RFP flow, and backlog continue to grow. We’re progressing as planned to deploy new highly specialized industry AI agents, and we’ve identified over 40 use cases and scaled up deploying it across our portfolio in 2025. In the quarter, we repurchased $425 million of our shares. And lastly, we raised our full year revenue guidance by $275 million to reflect changes in FX. And of course, we reaffirmed our past guidance. So with that, let me hand it back over to the operator to open the session for questions and answers.

And we’ll take our first question from Justin Bowers at Deutsche Bank.

Thank you, and good morning, everyone. Ari, could you discuss some of the drivers behind the strength in RWE in the quarter, how the order book looks through the balance of the year, and whether or not this outperformance is durable?

Thank you, Justin. Look, TAS delivers better than expected revenue growth, which is what helped the company deliver above the high-end of our guidance with 7.6% at constant currency. And as I mentioned, this was driven largely by the strong growth in real-world evidence, which was strong double-digits. This, basically, you will recall, that real-world had declined. The part of real-world that was discretionary had essentially shut down, and in the end of 2023, beginning of 2024 timeframe. And the rest of the real-world business, which is more mission-critical, had been delayed and pushed to the right in terms of when to do it and so on. So both the discretionary piece and the required work that’s necessary to support safety or pricing, demonstrating the effectiveness of treatment, etc., both have returned. There’s pent-up demand, and we expect this based on the book of business to continue. The rest of TAS was also good, basically low- to mid-single-digits for the different other aspects of the business. Thank you, Justin.

Thank you.

We’ll move next to Matt Sykes at Goldman Sachs.

Thanks for taking my question. Ron, just maybe on the margin side, I know you guys have called out in Q4, 20 basis point potential margin expansion. It looks like as you kind of rearrange the guide, maybe not expecting that. Could you just maybe talk about the opportunities for any potential margin expansion and kind of what you could do on the cost side to help achieve that?

Yeah. Well, one thing I would point out, Matt, when you’re looking at the margin versus our previous guidance, obviously, the impact of FX, because FX affects our top-line but doesn’t have much impact on the bottom-line. And if you’re looking at gross margins or EBITDA margins, as the dollar is weak and revenue was going up, profit hasn’t followed. So that really explains the change in our implied margins versus what we guided to previously. Now, if you’re looking towards what can help drive margins going forward, it’s always cost reduction where AI would be one example that we’re looking at. We’re always looking at taking cost out across the organization. That’s an ongoing effort. You’ll see that in our restructuring expense. Of course, against that, we do have pressures on things like not just the FX, but mix has gone against us to a certain extent. You’ll see that in the gross margin. And that mix includes, for instance, the shift towards FSP, which hurts margins a little bit. But net-net, the margin picture really hasn’t changed that much. What you’re seeing is mostly just the impact of FX, almost entirely.

Got it. Thank you. And just for a follow-up, Ari, could you just maybe talk a little bit about, on a longer-term basis, you made a comment in Q3 regarding sort of the competitiveness of RFPs going from sort of one of 13 to one of 4, if I’ve got the numbers correctly. And just in this environment, given sort of lower levels of demand, how do you feel about your position? And do you think that vendor consolidation trend, which has already been in place, will accelerate in this environment?

Are you talking about the R&DS business and RFP flow?

Yes, R&DS specifically, yeah, and vendor consolidation.

Yeah. Look, the RFP flow is actually pretty good given the environment. So the underlying demand is still there. We’re not seeing customers decide to no longer do certain programs. We went through a period of reviews and reprioritization of pipelines, which led to very elevated cancellations during the course of 2024—maybe 50% higher cancellation levels in 2024 than the historic norm. In the quarter, just I might mention, we had cancellations that were just in the normal historic range. So what happened in the quarter, we expect our bookings are mostly, again, programs that clients decided to pause and wait to see what the actual consequences are of some of the administration’s pronouncements before they decide to go ahead. And separately, as you might have noted, there was deterioration in the funding for EBP. So, we had an unusually high number of EBP awards in the first quarter that were actually not only awards, but they were also contracted, but our policy is not to include those in bookings if we’re not confident in the funding or as long as we’re not 100% sure that the funding has been secured. Respect to the RFP flow, though, it’s still very, very good. I mean, we’ve seen consistent numbers in terms of whether it’s dollar value or volume, with our lead rates and hit rates stable. So, we’re not seeing any changes really in the flow of RFPs, whether the large pharma RFPs are up stronger than EBPs at this point. It’s pretty good, actually; and sequentially it’s high-single-digits higher. So from that standpoint, I feel better at this point in the quarter than I did at the same point last quarter.

Yeah. And as we’ve mentioned previously, we did very well last year with renewing and expanding all the large pharma providerships that they went through, and we’re starting to see the benefits of those new RFPs from those relationships coming through.

Thank you.

We’ll go next to Shlomo Rosenbaum at Stifel.

Hi, thank you for taking my question. Ari, I want to ask a little bit more just probing on the operating environment. Given the uncertainty you saw in R&DS, I’m just surprised that you didn’t see that in more of the short cycle business in TAS. Like you kept the guidance and I guess the assumption is things are going to continue. But do you think that there’s a risk that that could spill over into some of the uncertainty into some of those areas in TAS like consulting or some of the analytics or some of the areas like that? And could it potentially result in further reprioritization even in the R&DS business? If you give us your thoughts on those things.

Yeah. I mean, you got to start when you’re asking the question. There’s considerable uncertainty out there. And whenever you have uncertainty, then obviously, people are hesitant to spend money. That’s a general rule, and that’s the concern out there. But so far, we haven’t seen that in TAS. All of our indicators, leading indicators, pipeline, decision timelines, and so on continue to be strong. I believe that the reason we haven’t seen that is because there were pent-up demand. We had already gone through the periods of holding back on spending in TAS, starting from the middle of 2023 through the middle of 2024. At that point, drugs that have been approved needed to be launched, and that’s what’s happening now. So what we’re doing in TAS is supporting the launch of new drugs, market access, pricing of drugs, supporting commercialization efforts, etc. And that’s the day-to-day business of our clients. And, they haven’t stopped doing that. So we haven’t seen that. I understand the question, but in the TAS business, we are seeing continued good growth as expected. And, again, I believe that the spending has been held back for a while and there is pent-up demand and necessary things to do. Now, the discretionary stuff, the absolutely discretionary stuff, consulting and so on, yeah, I mean, not spectacular. This is just flat- to mid-single-digits kind of current level. So it’s not that we are looking at spectacular things. So, what is being done now is the stuff that was necessary to operate. I mentioned real-world before as well as the pent-up demand on other things. And that’s what’s driving TAS. So I don’t see the environment influencing this much. On the R&DS side, yeah, again, because of uncertainty, so you hold back on decisions. The type of reprioritization we saw before were due to the Inflation Reduction Act. And I think as we mentioned prior calls, we see that to be largely over. The reprioritization of R&D pipeline at large pharma due to the IRA is largely complete. Now, could there be other cancellations? We haven’t seen that yet due to new developments. We don’t know. Again, no one really knows the exact impact of what has been signaled by the new administration. The uncertainty has caused delays in decision-making. I mentioned in my introductory remarks that the time from receiving the RFP to the actual award has expanded by about 10%, in some cases more than that, both year-over-year and sequentially. So that’s an indication, if you will, a high-level metric, but we know this directly from clients of all as well. We’re planning on making the decision this quarter, but we’re just going to wait a little bit to understand the implications. No one has signaled that they are not going to do the program, but it’s just natural that in an environment of uncertainty, you hold off on making the decision on large capital investments.

Thank you.

We’ll take our next question from Michael Ryskin at Bank of America.

Great. Thanks for taking the question, guys. I’m just going to follow-up on, I believe, Matt Sykes’ earlier question, talked about cancellations in the quarter already being kind of normal. Maybe I could hone in on book-to-bill trends. I know you don’t like talking about this number quarterly, but just 1.02 in the quarter. Last year, you called out a few major cancellations across 3Q to be lower. This quarter doesn’t seem to be the case. Is really – so what do you attribute that number to? Is it really the emerging bios that you talked about? How some of the RFPs aren’t quite in bookings yet because the funding is not there? Is that the major swing in the air? And so, do you expect to be closer to that 1.15, 1.2 number for the rest of the year?

I appreciate the question about the quarterly book-to-bill. As I mentioned earlier, there were several instances this quarter where contracts that should have been finalized weren't signed on time, particularly with large pharma. This is largely due to ongoing uncertainty in the biopharmaceutical sector, which contributes to the softer movements we are seeing. Additionally, as you pointed out, there is the issue of EBP funding. We've noticed fluctuations in EBP funding each quarter, but we adhere to global statistics consistently. Funding in the first quarter dropped to $13 million, which is acceptable but significantly lower than previous amounts. This decline indicates that, regardless of the source, EBP funding is decreasing. The hesitation to commit these funds means that in cases where an EBP has signed a contract with us, we may choose not to include it in our bookings due to uncertainty around the funding, and this situation occurred more frequently this quarter. In summary, the two primary reasons for the softer bookings stem from the same underlying macro uncertainty: delayed contract signatures from large pharma and the lack of confirmed funding for contracts that are already signed. Consequently, this led to bookings not being included. It’s worth noting that these issues are not related to cancellations. Going forward, we anticipate a growth rate of around 5% for this year. For our CRO business, we initially projected growth between 4% and 6%. While we are experiencing softer bookings, we expect to stay at the lower end of that range, around 4%, excluding the significant decline in COVID-related business, which amounts to roughly $100 million year-over-year, along with foreign exchange factors. When comparing ourselves to a large, publicly traded competitor with similar book-to-bill ratios, I found that they are projecting negative growth of about 5%. Despite having the same book-to-bill metrics, we are forecasting mid-single-digit growth, representing an 8- or 9-point difference in revenue growth. This discrepancy illustrates that the book-to-bill ratio does not reliably predict future growth and performance. It provides a snapshot of conditions at one moment, but does not convey the entire narrative. It's a passing glimpse that may be misleading without context. Thank you for your understanding.

No. Not at all. Very fair point, Ari. Thank you for that color. I appreciate the context. If I could squeeze in quick follow-up, just any commentary on the pricing environment. Just wondering if there’s any change in the quarter given all the macro uncertainty. And, again, this is more specific to R&DS. Thanks.

No change. Look, I mean, pricing is not enough level has not been a level for some time. So, we are—the pricing negotiations always are tough. But again, as Mike mentioned earlier, we secured the strategic partnerships with our large pharma clients last year. That was the time at which all the rates were negotiated and so on. And so, I think we are comfortable operating in the current environment. No changes.

Thank you. Thanks a lot.

Thank you.

We’ll move next to Jailendra Singh at Truist Securities.

Yeah. Thank you, and thanks for taking my questions. So just given all the recent macro developments and uncertainty you flagged, and thanks for all the color you gave Ari. Are you guys seeing any change in the RFP or new bookings mix in terms of FSO versus FSP? And one another follow-up quickly, if I can ask. What’s the latest on the two mega trials that were delayed? Are they expected to resume in the second half? Sorry for the two-parter.

Those three questions. It sounds fine. Thank you very much for the questions. Number one, I think you’re talking about the mix, full service versus FSP. And, look, we had signals over the course of the prior year that large pharma was sort of doing a little bit more FSP. And I think we saw this reflected in the RFP flow and in the awards and in the bookings, where FSP as a percentage of total was increasing. We said that in our bookings in the year, it was reaching in 2024, close to 20%. Whereas in our revenue, of course, it’s lower than that since we’re burning revenue related to prior period bookings. In our revenue, FSPs represented in 2024 more about 15% to 16%. So, obviously, we’re trying to do 20%. However, again, I said before many times that these are pendulum swings. We’ve seen it before in this industry where large pharma reverts to FSP, decides to insource more of the activity, but then they swing back. And I might—you might find it interesting to know that in the quarter, we actually started seeing some signs of this reversal. Actually in the quarter, FSP bookings represented less than 10% of the total. And, we look at our qualified pipeline, it’s in the mid-single-digits, low-single-digits. And in the RFP flow, it’s about 5%. We actually have a very, very strong and exciting pipeline and RFP flow in full service work for large pharma. And the reasons are the same as the reasons that have always led our clients to do more outsourcing, which are basically that they cannot possibly have all the expertise in-house. Sometimes they buy an asset in a different therapeutic indication, and they need resources that they don’t have in-house. And, thirdly, after they’ve been doing the FSP work and taking more oversight in-house, they realized that it can become prohibitively costly to do so over a large number of funds. And invariably, they revert back for any of these reasons to full service. And we’re starting to see some signals of that. It’s not just a snapshot in this case. It was through the bookings, it’s through the RFP flow, and it’s through the qualified pipeline where we see FSP as a percentage of total decline. I think you have another question. Yeah, the two mega trials. Yes. So the two mega trials we said had been postponed and taken out of the end of last year and pushed back to the back of this year; we received confirmation from one of them, and that’s the good news, that it’s expected to get started towards the second half, towards the end of the year as planned. So that’s confirmed. The second one, though, for reasons that are inherent to the client itself, the same logistics reasons they were facing before was pushed out of the period and won’t start this year. Again, all of that was contemplated in our guidance, and so nothing’s changed with respect to our numbers.

Okay. Thanks, Ari.

Yeah. Just to add a little bit more color on that. So, we are reaffirming our range with that mega trial pushed out of the period, as Ari said, plus let’s see what happens with the bookings environment for the balance of the year. You can conceivably see sort of R&DS probably shading more towards the lower end of guidance range, but we’ll have to see our BD teams are out there actively working to secure any business, and that’s kind of the current year.

Got it. Thanks, guys.

We’ll move to our next question from Eric Coldwell at Baird.

Thanks. I have two, if you don’t mind. You might have just partially answered the first one. So, I was going to ask about the impact on guidance from FX. And the question was, was there any other change to the guidance or directionality of the guidance excluding FX? What I’m getting to is during the prepared remarks or maybe the Q&A, Ron said that the year-over-year gross margin reduction in Q1 was primarily FX, but FX has now turned from a big headwind to a moderate tailwind. So I’m questioning how much EBITDA and EPS were protected by the FX shift, i.e., would you have needed to maybe reduce the range on EBITDA and EPS if it weren’t for FX?

No. I mean, EBITDA is, you can think of it as being largely independent from the FX ranges. The impact of FX on EBITDA is very muted. The impact on revenue, obviously, isn’t. You saw a big increase in our guidance for the year on revenue, and the combination of those two reduce our margin, our implied margin guidance.

No notable impact on EPS then for the year…

No…

And then, if I can have one more quickly, and apologize toggling like everyone, I guess, toggling multiple calls today, so I might have missed this. I have received a couple of inbound questions from investors during the call about TAS M&A and the M&A impact overall from the firm. So, if you address this, I’m sorry, but I am getting some questions on it. I thought I’d throw it out there.

There’s about 200 basis points for the quarter, Eric, and about 150 basis points for the year. The majority, but not entirely in TAS.

So if TAS—so the question, Ron, was if TAS was the majority, and I don’t know if that’s 60% or 90%, but if it was the majority, then mathematically, I believe you could have picked up as much as 5 points of growth in TAS.

No, no, no. It wasn’t that much. The organic growth in TAS was sort of mid-single-digits.

Okay. Perfect. Thanks very much.

Low mid-single-digits. Yeah.

We’ll move next to David Windley at Jefferies.

Hi. Good morning. Thanks for taking my question. I wanted to focus on margin and ask if you could talk about margin performance by segment. And then, on the restructuring activities, the expense that you took in the quarter, the add back was a little bigger. I wondered if you could comment related to cost takeout, what some of the targets are? Is it still kind of rightsizing headcount or facility consolidation? Or is it something else? And how we should think about those cost takeouts again going back to the margin by segment? Thanks.

Yeah. Well, look, what we’re doing in terms of margins is essentially to work on our cost structure, the same way we’ve been working on it forever: address the overhead structure as we continue to scale up our business, address labor arbitrage. We have offshore centers all over the world for different centers of excellence, for different types of activities, both on the commercial and the R&DS side. And we continue to shift work to different places where it’s optimal. And finally, we use technology automation and our AI agents to bring more efficiencies to our processes. Those activities result in the restructuring of headcount, literally all over the world and in both in all segments. So that’s what you see reflected in the whole and the structured numbers, but that’s the—do we talk about margins by segments? I mean, we do—we have disclosure of...

We have a disclosure, segment disclosure on a GAAP basis. Look, there’s a little bit more pressure on overall margin in the R&DS segment than there is in the TAS segment. Both had good SG&A performance, a little bit more gross margin pressure in the R&DS segment. Some of that mix related to FSP and also increases higher growth in the lab business that tends to be a little bit lower margin.

This is the mix. The mix influences margins in the segments, right? So, real-world, for example, is somewhat lower margin than the rest of the business than the analytics or the data or the technology. And so, as a result, when real-world grows faster, you do have a mix impact on margins. That’s for the commercial side. And then, on the R&DS, as Ron mentioned, FSP and lab do have lower margin profile than full service. And as I mentioned, in our revenues, FSP is a little bit higher, maybe the point two in the quarter. In the revenue side, I mentioned earlier that in my commentary on bookings and pipeline and RFPs that it seems to be going the other way now. But on the revenue side, FSP was a little larger in the quarter and lab was a little bit larger. And those two have somewhat lower margin profiles than full service. So, yes, we did have the quarter adverse mix impact on margins. But, again, that can fluctuate quarter to quarter.

All right. Yes. I was just saying any pass-through movement as part of that conversation that we should be aware of pass-through change in the revenue composition?

No, nothing over the long-term.

No, not in the area of significant. No.

Okay. Great. Thank you. We’ll take our last question from Tejas Savant at Morgan Stanley.

Hey, guys. Thank you for the time here. So, I’ll ask a quick two-parter. Ron, any comments on the stranded costs associated with the mega trial that you said is now pushed to 2026? And is there any risk that the second trial, which you just got confirmation on, could slip again in that sort of 4Q timeframe into 2026 as well? And then, Ari, one for you on real-world evidence. You called out some of the unique sort of policy-driven opportunities for that business over the medium-term. Is there anything you’re doing either organically or perhaps from an M&A standpoint that could position you to fully capitalize on some of these opportunities that are coming up?

I’ll start, Tejas, with the stranded cost. A little bit of impact, but not a huge impact. Obviously, on the trial that got further delayed, we’re going to free up those resources and use them for other purposes. We’re not going to keep them there indefinitely, but for the one that’s going forward, there is a little bit of impact, not terribly significant. And, well, we can only react to what our customer tells us on the trial that was further delayed, and we’re assuming that it’ll go forward.

Yeah. And the one that’s starting as planned, we got recent confirmation that that’s the plan. So there’s no further news on that or notification of any changes as of today. So that’s for that. What was your question? Real-world. Yeah. Well, no, look, real-world, I think, we are—the industry will tell you that we are recognized as the leader in the area in this segment. And we intend to fully capitalize on the opportunities that may emerge from any new initiatives from the administration, as I mentioned in my remarks. So I think, again, we are very well positioned here to navigate these sort of turbulent times. I’m very, very confident based on our conversations with clients that the world is not coming to an end and the industry will find ways to adapt. In fact, there are many reasons to feel very optimistic. As I said before, and I repeat again, I feel better at this point in the quarter than I did at the same point last quarter when I look at the metrics, whether it’s on the commercial side or on the R&DS side, and based on our conversation with clients.

Okay. Yeah. Thank you, everyone, for taking the time to join us today for our second quarter 2025 earnings call. The team will be available for the rest of the day to take any follow-up questions that you might have. Thank you very much, and have a good day.

And this concludes today’s conference call. Thank you for your participation. You may now disconnect.