Good day, and thank you for standing by. Welcome to the ICON plc quarter two results call. At this time, all participants are in the listen only-mode. After speaker presentation, there will be a question and answer session. To ask a question here in session, you will need to press star one on your telephone. Please be advice that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to the speaker today, Jonathan Curtain. Please go ahead. Thank you very much. Good day, ladies and gentlemen. Thank you for joining us on this call covering the quarter end of June 30th, 2021. Also on the call today, we have our CEO, Dr. Steve Cutler, and our CFO, Mr. Brendan Brennan. I would like to note that this call is webcast and that there are slides available to download on our website to accompany today's call. Certain statements in today's call will be forward-looking statements. These statements are based on management's current expectations and information currently available, including current economic and industry conditions. Actual results may differ materially from those stated or implied by forward-looking statements due to risks and uncertainties associated with the company's business. Listeners are cautioned that forward-looking statements are not guarantees of future performance. Forward-looking statements are only as of the date they are made, and we do not undertake any obligation to update publicly any forward-looking statement, either as a result of new information, future events, or otherwise. More information about the risks and uncertainties relating to these forward-looking statements may be found in the SEC reports filed by the company. This presentation includes selected non-GAAP financial measures. For a presentation of the most directly comparable GAAP financial measures, please refer to the press release statement headed Condensed Consolidated Statements of Operations, U.S. GAAP, unaudited. While non-GAAP financial measures are not superior to or a substitute for the comparable GAAP measures, we believe certain non-GAAP information is more useful to investors for historical comparison purposes. We'll be limiting the call today to one hour. We therefore ask participants to keep their questions to one each with an opportunity to ask one related follow-up question. I would now like to hand over the call to our CFO, Mr. Brendan Brennan. Thank you, Jonathan. In quarter two, ICON achieved gross business wins of $1,316,000,000 and recorded $210 million worth of cancellations. Consequently, net awards in the quarter were a record $1.1 billion, resulting in a net book-to-bill of 1.27 times and a trailing 12-month net book-to-bill of 1.34 times. With the addition of these new awards, our backlog grew to a record $10.2 billion. This represents a year-on-year increase of 12.7%. Revenue in quarter two was $871.2 million. This represents a year-on-year increase of 40.5%, or 37.5% on a constant currency basis and a CRO basis. Our top customer represented 12.7% of revenue for the quarter compared with 12.1% in quarter two 2020. Our top five customers represented 40.9% of quarter two revenue in line with last year. Our top 10 represented 54.2%, compared to 54.9% last year. While our top 25 represented 72.4%, compared to 71.3% last year. Of note, on a combined company basis, our largest customer in quarter two would have been 7.3% of revenue. Gross margin for the quarter was 27.6%, compared to 27% last quarter and 28.1% in the comparable quarter last year. Our adjusted SG&A was 10.3% of revenue in quarter two, which compared to 10% last quarter and 13.5% in the comparable period last year. Adjusted operating income in the quarter two was $132.9 million, a margin of 15.3%. This compared to 15% last quarter and 12.1% in the comparable quarter last year. The adjusted net interest expense was $2.2 million for the quarter, and the adjusted effective tax rate was 13% for the quarter. Adjusted net income attributable to the group for the quarter was $113.2 million, a margin of 13%, equating to diluted earnings per share of $2.12. This compares to earnings per share of $2.06 in quarter one 2021 and $1.20 in the comparable quarter last year. During the quarter, the company recorded $42.1 million of transaction and integration related costs. US GAAP income from operations amounted to $112.9 million or 13% of revenue. US GAAP net income attributable to the group was $73.9 million or $1.38 per diluted share, compared to $0.90 per share for the equivalent prior year period. Included in the press release and the earnings slides, you will note that we included adjusted earnings per share of $4.46 for the first half of the year. This excludes stock compensation expense, amortization, and transaction-related costs and their respective tax benefits. As a consequence, we estimated the adjusted effective tax rate for H1 2021 was 15.2%. In addition, with respect to our guidance, we expect the fully diluted share count to be approximately 83.7 million shares for the second half of 2021. Net accounts receivable was $417.4 million at June 30th, 2021. This compares with a net accounts receivable balance of $465.6 million at March 31, 2021. On a comparative basis, days sales outstanding were 35 days at June 30th, 2021. This compares with 39 days at the end of March 2021 and 53 days at the end of June 2020. Cash generation from operating activities in the quarter was $128.4 million. At June 30th, 2021, the company had a gross cash balance of $1.057 billion and debt of $350 million, leaving a net cash balance of $707 million. This compared to net cash of $595 million at March 31, 2021, and net cash of $244 million at June 30th, 2020. Capital expenditure during the quarter was $12.9 million. As you know, the PRA acquisition was funded through a combination of cash, equity, and debt. Over the course of May and June, we engaged with capital markets to secure long-term financing, resulting in a number of outcomes worth sharing. The first relates to our credit rating status, where we achieved a BB+ and Ba1 ratings from S&P and Moody's, respectively. This represents only a one notch decrease from both agencies relative to our previous investment-grade position, and we remain one of the highest-rated CROs in the industry. Secondly, we had a very positive process raising the $6 billion of debt required to finance this transaction. This was broken into two instruments. $5.5 billion of floating Term Loan B notes over a seven year tenor and half a billion dollars fixed high-yield bond over a five year tenor. Our Term Loan B offering was oversubscribed in excess of 2.5 times, helping us to secure an all-in rate of 3%. Demand was also very high for our high-yield bond, with subscriptions of over $3 billion, helping us to secure a rate of just 2.875%. This all means we will have a current blended interest rate of just below 3%. The final structure will allow us to maximize repayable debt to de-lever quickly. We completed the transaction with a debt to adjusted EBITDA and inclusive of synergies ratio of approximately 4.2 turns. With our goal to reach 2.5 times adjusted EBITDA by the end of 2023. In addition to this long-term debt, we increased our revolving credit facility from $150 million to $300 million. This facility is currently undrawn. Before I hand over to Steve, I'd like to make you aware of a change in our investor relations department. Jonathan Curtain, who has led this function for over four years, will transition out of the IR role to lead our commercial finance team alongside his existing responsibilities as head of our corporate finance group. I'm pleased to announce that Kate Haven, who is moving across from our corporate development team, will succeed Jonathan as Vice President of Investor Relations. Jonathan will be working closely with Kate to ensure a smooth transition, and I wish them both the very best of luck in their new roles. With all of that said, I'd like to hand this call over to Steve. Thank you, Brendan, and good day, everyone. On July the 1st, we were delighted to close ICON's acquisition of PRA. This transaction brings together two high-quality, innovative, growing organizations with similar culture and values to become the world's leading healthcare intelligence and clinical CRO. With the addition of PRA, the new ICON will create a novel paradigm for bringing clinical research to patients, offering expanded capabilities and solutions to customers while delivering significant value to shareholders. The environment created by the COVID-19 pandemic has presented the industry with an opportunity to accelerate changes in the clinical monitoring process. The need for a more flexible and efficient approach to clinical monitoring and data review has emerged, and this demand will fundamentally change the way in which trials are conducted going forward. A key milestone for ICON was the manner in which we helped deliver the first COVID vaccine to the market in record time, applying this agile and flexible framework to our clinical monitoring model. Our ability to execute these large-scale projects has resulted in a very healthy level of business wins in this area. During the first half of this year, both ICON and PRA both saw the influence of these vaccine trials on our revenue with a higher proportion of pass-throughs relative to non-COVID work. As we progress through the remainder of the year, we expect our pass-through mix to begin to return to a more normalized level. In parallel, we have seen an increased shift from traditional to hybrid models, and we are excited about future opportunities in the decentralized trial space. The industry is poised for transformational change. We are now in a position of significant strength with the combined market-leading skill sets and resources of both PRA and ICON. Moving forward, the new ICON will provide our customers with the integrated solutions required to execute on these novel delivery models while making it easier for patients to be part of clinical development. Successful decentralized trials require mobile site and patient-centric technology to support telemedicine, site resources to ease the investigator and patient burden, in-home services to patients, central labs to process and manage testing, and also direct-to-patient capabilities to enable drug distribution and management. I believe the new ICON is in the unique position to be able to integrate these key components to create compelling and differentiated solutions for customers. Both ICON and PRA have long histories of individual company success, and collectively, we will be much stronger than the sum of our parts. Our goal is to create the world's leading healthcare intelligence CRO, where customers will benefit from our broader service offerings and geographic footprint, deeper therapeutic expertise, expansive healthcare technology, innovation, and functional talent and capabilities. Integration activities are well underway, and functional teams from both legacy organizations are collaborating well to ensure we have a seamless transition to a single company. As we integrate, our day-to-day focus remains on business continuity and the execution and delivery of our customers' clinical projects. The complementary nature of our services will also present revenue synergies across our broader customer base. Already, we are seeing interest from customers in the new ICON, with positive strategic partnership discussions being initiated and cross-selling opportunities being generated in areas such as central and specialty labs, the Accellacare site network, home health services, and imaging. We are also actively pursuing our cost synergy target of $150 million and have already announced internally the consolidation of a number of offices that are situated in similar locations. This will not only drive P&L benefits but will also help our teams to do their best work as we return to the office post-pandemic. As the marketplace continues to evolve, it will be important to remain focused on innovation that facilitates our core mission of getting drugs and devices to market faster. Our new partnership with Allscripts Veradigm aims to create the industry's leading EHR-based clinical research network that reaches more than 25,000 physicians and 40 million patients across the United States. Using Veradigm's StudySource platform, which extends existing EHR systems to include clinical research, alongside our proprietary eSource technology and clinical research expertise, this network will enable physicians to offer clinical research as a care option to their patients, driving efficiencies across the trial process and increasing patient accessibility and diversity in clinical trials. In addition, we have seen growing interest from sponsors in clinical trial tokenization. Tokenizing enrolled clinical trial patients enables them to be followed within a real-world data setting in a de-identified manner, increasing our ability to identify long-term outcomes and improving our reporting of key follow-up data to sponsors and regulatory authorities. New ICON is the only organization that has implemented a customer-friendly environment of multiple tokens to allow for linkages to a vast data ecosystem in a compliant and secure end-to-end approach. Through our Symphony asset, Synoma, ICON has data and analytic resources and expertise to translate tokenized patient populations into actionable information for clients, which will support their ongoing product development, registration, and pricing goals. Current customers include three of the world's top 15 pharma companies since initial launch in May 2021. By utilizing the benefits of our partnerships alongside our existing capabilities, we can deliver truly differentiated trial solutions to meet growing customer needs and positively impact clinical trial development. As we integrate these key components into our patient, site, and data strategy, we will be able to provide a compelling set of solutions to customers that will accelerate patient recruitment and retention, increase participant diversity, and shorten clinical trial timelines. Ultimately, our goal is to create a sustainable competitive advantage over the medium to long term by actively investing and leading in the space where clinical development is heading. On a standalone basis during the quarter, ICON increased net business wins to a record $1.1 billion, delivering a quarterly book-to-bill of 1.27 and growing our backlog to $10.2 billion, an increase of 12.7% year-on-year. Revenue grew 41% to $871.2 million. Adjusted earnings per share increased by 77% to $2.12. We were also delighted to see strong PRA business wins for the quarter of nearly $1.2 billion and a net book-to-bill of 1.21. This helps build momentum for the rest of the year and beyond and demonstrates our customers' confidence in the new ICON's continued operational performance and our commitment to deliver enhanced and innovative patient-centered solutions. We expect to create significant long-term shareholder value by combining revenue growth from enhanced service offerings, innovative solutions, and increased scale with our best-in-class global support services model. As a result of this acquisition, we are updating our 2021 outlook with revenue guidance in the range of $5.3 billion to $5.5 billion and adjusted earnings per share guidance in the range of $9.10- $9.50. Before moving to Q&A, I would again like to welcome our PRA colleagues to the new ICON and thank all of our teams for all their hard work and commitment during the quarter. Operator, we are now ready for questions. Thank you. Ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Your first question comes on the line of Sandy Draper from Truist Securities. Please ask your question. Thanks so much, and congratulations on a strong quarter and also getting the deal done. My question, initial one really on the financial side. Brendan, you talked about your targets for de-levering. When I think about it, do you have a target for a percentage of free cash flow to de-lever? What's sort of the pacing we should be thinking about in terms of that de-leveraging? Yeah, Sandy, I kind of called out on the pre-prepared remarks there. Obviously, we want to try to get after that 2.5x debt to EBITDA by the end of 2023. We'll stay focused on that in that interim period. You've got 2022 and 2023 where save really opportune small acquisitions or small elements of buyback. We'll definitely be looking at most of our cash going towards getting to that target, Sandy, in that timeframe. We haven't set an exact percentage of free cash flow, but certainly a very high percentage until we get after that leverage point. From that point on then, of course, it'll be much more about managing debt at that level and really using our cash resources to continue to build out the organization, as we know we'll still have to do. Okay. Thanks, Brendan. My follow-up is also financially related, and I'll let others ask the smart strategic questions. Are there any future transaction costs that are on a cash basis over the next quarter or two? Or are you pretty much done with the one-time charges and cash charges for the transaction? Much as I'd like to say I'm done, Sandy, that's just unfortunately not true. We will take more cash expenses in the third quarter, but the vast majority will be taken care of by then. There still will be a chunky enough number to go. Not dissimilar, certainly, and maybe even a little higher in the third quarter that we saw in the second quarter. After that, we are majorly done. Okay, great. Thanks so much. Your next question comes on the line of Elizabeth Anderson from Evercore. Please ask your question. Hi, guys. Thanks so much for the question. Congratulations on the transaction coming to completion. I was just wondering on two things. Could you talk about, 1, any update on thoughts from some of your larger overlapping clients and sort of their feedback, and any early potential combined wins? Two, could you also speak to staff retention and the broader integration efforts from an internal perspective? Yeah, sure, Elizabeth. In terms of overlapping clients, I think we've been public before in that we do have one or two that overlap to a reasonable degree. We've had a number of discussions with those customers, and those discussions have been very positively received to the point where we're seeing less risk in those customers than perhaps we had anticipated before as we contemplated the transaction. In a number of areas that I'm involved in, we've had those discussions. They're in a good place. Both companies are delivering well for those customers, and they're looking to combine the offering and to make sure that we continue as a key part of those customers. It's been, in general, very positive. As I alluded to in my comments as well, we've had a number of strategic discussions with customers who neither company has had a particularly strategic relationship with over the past few years, and they are also interested in what the combined entity can bring as well. Net-net, very positive in terms of particularly large pharma companies and biotechs as well. It's been a strong positive customer response right across the board, almost uniformly. In terms of staff retention attrition, we've certainly seen a little bit of a tick up in attrition of staff over the last 12 months, really. It's certainly not necessarily, I don't believe, directly related to the transaction. We believe the labor market, particularly in the United States, is pretty hot at the moment. Quite frankly, the labor market across the world is kind of restructuring as we come out of this pandemic. I think there are a lot of moving parts going on in the labor market as such. We've seen a little bit of an uptick. We're addressing it. There are various plans we have in place to bring new graduates in to give people career paths, obviously to make sure we're paying market salaries, et cetera. I think you'll find the same uptick in attrition with our competitors as well. I don't think it's just related to ICON or what we've done, and I certainly don't think it's directly related to the acquisition or to the transaction. It's something that we're seeing across the industry as a lot of money is being spent in clinical development. We're not just competing with other CROs for staff, we're competing with pharma companies and biotech companies as well. It's a consequence of the market, the growing market, and the availability of capital to develop drugs. We can't complain about the business development wins being strong and attrition being high at the same time. You have to probably take one with the other as well. Got it. That's very helpful. Thank you. Okay. Your next question comes in the line of Erin Wright from Credit Suisse. Please ask your question. Great, thanks. As it relates to your guidance, what are some of the key changes relative to your prior expectations for each standalone business on a more operational basis in terms of what's implied in the outlook for the second half of the year? Have there been any meaningful changes on that front since you just gave it on a combined basis? Thanks. Not meaningful, Erin. I think the operational companies are both moving in a strong direction to the second half of the year. We've kind of outlined that. There are other elements, of course, in terms of numbers of the stock count. I made reference to the fact that we'd be about 83.6 million or 83.7 million shares, my apologies, in the second half of the year. That obviously has a bearing on the EPS number. The underlying operating income, and indeed EBITDA, are moving solidly in both organizations in the right direction. We're pleased with that, and that we'll see good uptick quarter-over-quarter, and indeed year-over-year. I think predominantly, we're moving in the right direction. We'll start to see some of the synergies impacting, but the work we're doing around synergies is for the long term, of course, and we're putting the steps in place now that will really benefit us over the next number of years. Of course, a little bit in the first six months, but certainly more thinking about 2022 and 2023 in that regard. Strong operational performance rolling forward into Q3 and Q4. I think the only thing I'd add to that, Erin, is we've been involved, as have PRA Health Sciences, as I said, with the larger of these vaccine trials, which have had a significant pass-through element in the first half of this year. Those studies are coming towards their end now. There's still a lot of COVID work, it was a significant part of our business wins this quarter. Those big pass-through studies, the big vaccine studies are probably coming towards the end of it now, which is sort of attenuating a little bit, the very rapid growth in revenue we've seen over the last couple of quarters. That's the only thing that I think would probably play into our guidance a little bit as well. Okay, great. That goes right into my second question, which is, could you provide a little bit more detail on the COVID-related awards to date at each of the businesses or on a combined basis, and the percentage of revenue kind of in the quarter associated with COVID-related work and, I guess you commented already on sort of the dynamics throughout the year, but if you could give us a little bit of color on the COVID trends on that front, that would be helpful. Yeah. In terms of new COVID opportunities coming in, that sort of flattened off a little bit, but it's still in the vicinity, in the high teens in terms of our RFPs. It's still a significant proportion of our work. There's no COVID cliff, I suppose, is the overall message here. It's in the high teens on RFPs. New business it's a little bit higher than that. On our backlog, it's in the high mid-single digits. COVID work continues to be an important part of our portfolio. It's not going away. As I say, the big vaccine trials, those days are probably coming towards an end, but we're moving more towards treatment trials, diagnostics. There's long-term follow-up trials. There's different patient population trials in the vaccine space. That work, as I said before, it's going to continue for another two years, I think. Who knows, with variants and all the rest of it coming through, booster, the requirement or potential requirements for boosters, that may also impact it as well. It's certainly been a very positive environment from COVID work. Even in the non-COVID work, we've seen a significant uptick in our RFPs as well. If the COVID sort of RFPs have been flattening off a little bit, the non-COVID RFPs have been growing quite substantially to replace that. It's a positive business environment. Okay, perfect. Thank you. Your next question comes in the line of John Kreger from William Blair. Please ask your question. Thanks very much. Steve, I know you're calling the new company the world's leading Healthcare Intelligence Company, clinical CRO. Can you just expand a little bit on the Healthcare Intelligence part? Are we thinking about that primarily as the legacy PRA Symphony business or broader? Just tell us what you're really thinking about with that part of the tagline. Thanks. Yeah, it's a good question, John. We are thinking about the data component of that. Not just the data, it's the way we use the data and the way we are able to analyze and do things differently from the way we interpret that data. Symphony's an important part of it. I talked a bit about tokenization. We think that's a very important part of being a healthcare intelligence organization, being able to track patients in a de-identified and compliant manner in the long term. If we'd been able to do that on the vaccine portfolios, we'd be able to answer a lot of the questions that are only really coming up now. Do we need another booster? What's the timeframe for the immune response to wear out? That sort of intelligence and that sort of information that allows us to make insightful decisions and take actions and support not just the ongoing registration of our sponsors' products, but the development of those products in different indications and the pricing of those products as we see the value of those products and how they're helping people in society on a real-world evidence basis. Symphony's a big part of it. We've talked a lot about our OneView tool and how we're using that to identify the right sites and select sites, our patient approaches, where we're going directly to patient and gathering that sort of data, our wearables, our DCT. It's a variety of things around our patient site and data strategy. The intelligence side of things is really using technology and data in a way that's perhaps a little bit more nuanced and a little bit more insightful than has been used in the past, and allowing us to ultimately deliver trials in a different way, much more effectively and efficiently. That's great. Thank you. Maybe a quick follow-up to Elizabeth's question about staff. Does this change your thinking at all on margins going forward, or are you able to pass higher labor costs along in your bids? There's certainly a little pressure on the wage line and we need to compete actively in the marketplace, and as I've said, it's a very active marketplace at the moment. In the very short term, we might get a little pressure there. I think we can handle that. We've certainly got clauses within our contracts that allow us to adjust our pricing on the basis of inflation. Importantly, I think it's also supercharging our efforts to move to that more efficient model where we're doing more off-site monitoring, more remote patient monitoring, and allowing our staff to be more efficient, to allow them to gain a better work-life balance, essentially. Rather than being on a plane and going to sites physically all the time, that they're able to do a fair bit of their work at their desk on their computers, because we can monitor the studies remotely. It's really moving those efforts fast, and I think our sponsors are also buying into that. It's what we did during the pandemic, and we got some tailwinds from that. This labor market is also helping that as well. We believe that will help us to offset any challenges we have from a wage inflation and cost perspective, certainly in the medium to long term. In the short term, we're working that through, and we think we can handle it. There are always opportunities in these sorts of things as well, and I think that's certainly one of them. Sounds good. Thank you. Next question comes from the line of Eric Coldwell from Baird. Please ask your question. Thanks very much. I have a few, but I think they're hopefully pretty quick. First one, in the prepared remarks, you said your largest customer on a pro forma basis was 7.3%, I think you said, of revenue in the quarter. Were you specifically citing ICON's largest customer would be brought down to that level, or looking across the spectrum of both companies, the largest customer would be 7.3%? That's across the spectrum of both companies, Eric. That's our new customer base. The top customer of that new customer base would be 7.3%. That's great. Second one, I'm hoping you can give us your thoughts on tax rate in the second half. Yeah, we said we'd start off in around the ballpark of 17% and work our way down from that, Eric. We haven't changed our mindset on that one. We're at this stage, we'd be thinking 17% for the second half of 2021. Okay. Next one, don't know if you have this or you're able to share it, but PRA historically provided service-level bookings, kind of a unique approach. They did transition and start adding in full bookings about a year ago. I'm curious if you would have that number at hand, just for comparable purposes for those of us who were tracking PRA in the past. Not to hand, Eric. My feelings on this one, I'm a great believer in there's only one type of revenue and there's only one type of booking, which is the 606 methodology. That's where we'll be looking at as we go forward. Okay. Thanks very much. I appreciate it. Next question comes on the line of David Windley from Jefferies. Please ask your question. Hi. Thanks. Good morning, good afternoon. Thanks for taking my questions. Several questions have gotten at the point of the demand environment. I was hoping you could perhaps add a little bit more color to not just RFP trends, but maybe also how your hit rate has evolved, if that's stayed relatively stable or changed at all. Within that, there was a mention in the prepared remarks, Steve, about hybrid models. I'm wondering what you're seeing within the RFPs or maybe the RFPs you're seeing or maybe the bids you're submitting, if you're being more proactive about it with hybrid and DCT-type approaches to your studies. How is that creeping into the RFP flow? Sure. David Windley, let me start with the RFPs. I think as I indicated, it's been and continues to be a very positive environment, not just in the biotech space, but right across the spectrum and right across the segments that we operate in, large pharma, biotech, mid-size. We're all in the high teens in terms of annual increase in RFP dollars. Couldn't be happier with the way that's moving forward. I think that's really across both organizations. ICON has certainly seen that, and as we've seen, PRA also have seen similar sort of mid-teen increases in their RFPs. Again, we're both seeing that. I think that's evidenced in the awards. In terms of hit rate, I was pleased, actually, as I looked at it this morning to see an uptick in the hit rate on a dollar basis, again, across the spectrum. Particularly in our late-stage business and our early-stage business, and this is ICON standalone. I don't have the detail for PRA at this stage. Our Accellacare home health, we've seen an uptick in our win rates and our strike rate. Again, that's along with the increased numbers of opportunities, increased hit rate, has really put us in a pretty good position. I think it really does speak to the confidence that our customers have in our ability to execute, but also our ability to make this integration go well. In terms of hybrids and hybrid trials, we're certainly seeing a lot of interest in that. There's a lot, as you would well know, there's a lot of talk, and there's a lot of discussion around how these trials work and how they're operating going forward. I would say that almost the majority of the trials we propose at the moment have some sort of hybrid component, whether it be a remote monitoring component or a wearable technique, or a data collection area that relates to a direct-to-patient mode. They are very much hybrid, and hybrid goes from one end of the spectrum right up to the other, really down the full decentralized trial. There's lots in between. The vast majority, I'd say, of trials that we propose really do have some sort of hybrid component or some sort of decentralized component now, which we find positive. It gives us something to build on, and it gives us an opportunity to deliver that component of the trial and then build on it for the next one to become a more hybrid or even a more fully decentralized sort of approach. Again, our customers are very much aware of it and very much open to those discussions, and particularly where it makes their trials and their budgets more efficiently spent. They feel confident that we can deliver those sorts of trials now. It sounds encouraging. Thank you. My follow-up question, kind of related to that, you mentioned in your prepared remarks also, you touched on a number of the areas where cross-selling is an opportunity. It seems to me that some of those might be a little. The ability to go to market and offer those services, for example, central labs to PRA's client base might be more immediate, whereas perhaps the integration of some of the technology capabilities and the DCT trial approach might require a little bit more integration and development before your go-to-market strategy might be ready. I wondered if you agree with that or if you could give us a sense for how immediately you might see some revenue synergy opportunities from some things versus others. I would say I do broadly agree with what you just said, David Windley. We certainly see already some wins on the lab front, and revenue's starting to flow into Certainly in the second half of the year, we'll see revenue starting to flow from those immediate opportunities, language services, imaging, labs. That's happening. We have an expectation of around $100 million in revenue synergies on a annual run rate basis, and I think we're well on our way to that, and I'd like to think we could potentially exceed it. In terms of the mobile health platform and some of the decentralized stuff, you're right. I mean, those things are going to take a little bit more time to come into play. We're working very hard to build our unified platform. We have a number of platforms, but those are moving forward and are changing, and we're investing significantly in those platforms and having discussions with companies. These things always take a little bit of time, but we believe that as we get towards the end of this year into next year, we're going to have our unified platform ready to go, which will then replace the current platform that we have and will allow us to, again, further integrate various aspects of our capabilities and resources into that decentralized approach. That will take a little longer, no question about that. It's not years away. It's certainly, I think, within the next 12 months, we'll be very active in that space in terms of implementing that sort of totally decentralized approach. Excellent. Thank you. Very helpful. Your next question comes on the line of Tycho Peterson from JP Morgan. Please ask your question. Thanks, Steve, I'm going to follow up on that last line of questioning. It's great to hear about the revenue synergies and the hit rate. I'm just curious, what's really resonating as you're out talking to customers? If we think about the third of the top 20 pharma customers you don't currently do business with. As you go to pitch to them, is it scale? Is it the new capabilities you're bringing to the table? Can you just talk a little bit about what's resonating? Another angle that you talked about at the time of the deal was accelerating patient recruitment through your Accellacare network. How are you thinking about doing that as well? Sure, Tycho. I'd say, as we talk to customers, it's all of those things that they want to talk to us about. Obviously, it's the usual scale, capabilities, resources, therapeutic depth and breadth, et cetera, is important to them. You have to be there, and we have that. I think increasingly they're also interested in the Accellacare home health network, the Accellacare site network, which gives us a different slant on how we bring patients to their clinical trials. On our decentralized approaches as well, the tokenization is creating a lot of interest around for some of these strategic discussions. The decentralized trials and the mobile health platform that we're developing is also creating a lot of interest, and they're interested to hear what we're doing in that respect. It's a combination of the usual sort of scale and resources and capabilities, but increasingly also the technology, the data opportunities we're bringing, and the ability to really put together a solution that's highly integrated in that clinical space. I think that's what's got our customers, particularly the larger ones, very excited about the new offering. In terms of Accellacare, the network, the sites, it's fitting in nicely with our decentralized trial approach. On decentralized trials, there's still going to be sites involved. You still have to have that, and we believe they can be the foundation for our decentralized offering. They're performing strongly both financially and operationally. It's an area that we continue to revisit. We continue to look at what we're doing with those sites, how fast they're able to come up to speed, what their recruitment rates are like. The quality of the data that we're providing at those sites has been really first class, and they played a major role for us in our involvement with the big vaccine trials. As I say, I'm very pleased with the way they're performing and particularly excited about the role they're going to play in that more hybrid and decentralized approach as we go forward. We really feel we've got all the key components of that decentralized approach to bring together solutions that can be very exciting for customers. I think that's really what's getting these new customers particularly interested. How are you feeling about the real-world data solutions part of the business that they bring? Obviously, there's a lot of focus, with the pandemic and therapies being rushed to market. How are you feeling about real-world data at this point? We're feeling like we're making good progress in the real-world data. The tokenization side of things introduces another aspect of real-world data that really has the ability to bring in data from disparate and different sources, from genomics data, from lab data, from health record data, to bring it together on an individual de-identified patient basis and allow us to track that. That's certainly another arrow in our quiver from a real-world perspective. We feel that that, along with some of the other areas that we've been already working down gives us a nice story to tell and a nice operational delivery process to put forward on the real-world front. We really do believe real-world is a fundamental part of the future of clinical development. The randomized control trial certainly played a major role over the last, well, probably 100 years now, isn't it? Going forward, real-world evidence and the ability to collect and to assimilate and analyze and really take direct insights from real-world data is absolutely going to be critical. I think we're seeing that as we come out of the pandemic with the vaccine. The patients who are in the vaccine portfolios, the ability to have a look at that data on an ongoing basis would be extremely valuable and is extremely valuable. That's an area we're very highly focused on and believe we have some real advantage in. Last one from me. There's obviously a lot of moving pieces in this space now with PPD being acquired, Parexel going back to private equity. We'll see what happens with Covance at LabCorp. How much of a focus is this for your customers as you go out and have discussions that a number of these assets are changing hands? That's a tough one, Tycho. I think we talk to our customers about what we're doing and their projects. I don't sort of get too much into what they think about our competitors. I'll be honest, I haven't heard any huge concerns from our customers about what's happened in the industry. They recognize we're in a dynamic industry. There are a lot of changes precipitated by lots of different things. I'm presuming they're sort of aware of it, aware of those changes, but I don't get into too many discussions about our competitors with our customers. I prefer to talk about ICON and what we're doing. Okay. Thank you very much. Thank you. Your next question comes from the line of Jack Meehan from Nephron Research. Your line is now open. Thank you. Good morning and good afternoon. Wanted to start, was hoping you could give a little bit more color on the PRA results in the quarter. They had a big sequential step-up on revenues. Just was curious if you could talk about any pass-through dynamics or COVID work that might have contributed there. Yeah, Jack, I think we alluded in our prepared comments that I think we both saw a fairly significant amount of work in the first half of the year and specifically in the second quarter from these large vaccine trials. I think both companies were in a similar position there, which led to that significant jump up in revenues, predominantly because of the large pass-throughs in those trials. No huge surprise. I think we called it out because I think going forward, the days of those trials are probably coming towards an end. Not that there's not follow-on work, there's no cliff, but I think we've hit the peak there. Going forward, we're going to be doing more, say, treatment trials, diagnostic trials, et cetera, and follow up on a smaller scale on those vaccine trials. I think that was certainly a factor for the revenues on the PRA side of things, as it was for ICON. Great. One for Brendan. Just within the guidance, I was wondering if you could give any color around phasing in the third quarter and the fourth quarter. There's obviously a lot of moving parts. Just any color around your expectations for building up to the full year number would be helpful. Yeah, Jack. As I said probably previously to one of the other answers, we do expect the growth to continue to be sequential. Steve made the point around the revenues. Obviously, on the first half of the year, we're very strong as a consequence of a lot of our pass-through revenue coming through. That is going to dissipate somewhat in the back half of the year, and that's indicated in the guidance, certainly at the midpoint and the higher end even. You can see that sequentially. You can probably work out the math on that yourselves. Sequentially, on op income, yes, absolutely, continued moving in the right direction. It'll be even an off pace. I think we might even see a little bit of a pickup from Q3 into Q4, a little more so. I think that's broadly where it's at. We do expect, as I say, good sequential progress with continuing pickups as we get through the year. Thank you. Your next question comes on the line of Luke Sergott from Barclays. Please ask your question. Hey, guys. Thanks for the question. Steve, I just want to get your take on that COVID cliff comment. As we think about the variants and adding capacity for vaccines for kids and under 18, and as the regular business starts coming back online, I know that there are different therapeutic indications, but is there enough industry capacity to handle all this extra work that's going on? Just would love to hear your thoughts on that and then how that kind of bakes into the soft landing versus the cliff. Yeah, I certainly think there's enough. To answer your question directly, Luke, I think we've got enough industry capacity to do this. The way we're doing these trials now I think is more efficient, more effective. I've talked about the remote monitoring. We have some mega sites around the world, and certainly some of our Accellacare sites have made major contributions in terms of patient numbers. While you have a lot of patients in these trials, you don't necessarily have a huge number of sites, because you have a lot of patients at those sites. They're relatively low-intensity type trials, if that makes sense. They're not oncology trials, put it that way. They just have a large volume of patients with a lower intensity of work. They do suit themselves very much to a remote, decentralized type of approach. I'm very confident that we have the capacity to do the work that we're going to be asked to do. I did make the comment that I don't think we're going to be doing these very large 40,000, 50,000 patient vaccine trials in the future. That doesn't mean to say we won't be, as I say, doing the follow-on studies, the kids, the various subpopulations, and we're doing those. As I indicated, the RFP% are still in the high teens in the last quarter. The COVID work remains an important part of our portfolio, an important part of our backlog. I just don't anticipate that you'll see the significant uptick in revenues and, of course, those pass-throughs in future quarters as we've seen in the last couple of quarters. That's really what I was trying to get across. Yeah, it's helpful. Then lastly, on the mix of the FSP work, can you just talk about if there's been any changes in demand trends on those RFPs with a mix of FSP, then how you guys think about that going forward now with PRA in the book? We feel very good about our FSP ICON Strategic Solutions. We're the industry leader by some distance in that area. We have a very, I believe, a compelling offering in that space. We've had two extremely successful organizations coming together to make a really top-notch, we believe, functional services group. We feel very good about our position in the market and our ability to continue to really dominate that market, we believe, going forward. In terms of demand, we still see strong demand in the functional space. It's an important part of our offering. It supports our full service business as well. It really is a double benefit for us. It's a market and a strong market and a growing market in itself, it also allows us the ability to bring in short-term resources from our own group on a relatively fast and speedy basis. It has a number of benefits for our business, both for our full service and, of course, as an entity alone. These functional opportunities are growing, and not just in terms of pure functional, but more hybrid, sort of where we provide some data analytics or we provide some project management, or we do it on a unit basis and take responsibility for the delivery of the outcome rather than just on a FTE. This is an emerging and a developing, evolving, should I say, business and one that we feel very connected to and passionate about growing. All right. Thanks. Your next question comes on the line of Ben Hooker from KeyBanc Capital Markets. Please ask your question. Great. A lot of questions have been asked here. I just have one. I was interested in this new Veradigm tool, this new partnership with Allscripts. What's interesting to you about entering a partnership with Allscripts? What are they going to give you in terms of data and access that you didn't already have? You have a lot of partnerships. I'd love your perspective there. Yeah. I've got to give credit where credit's due. This is really the PRA side of our business that's moved into this, the Veradigm. Really, it's an opportunity to very much expand the capabilities of our clinical research network, if you like. These are sites where we're installing or helping to install software which allows them to identify patients. Then for the patients in their practices to become candidates for clinical trials that are going on. We're spreading the net wide. These are trials that'll probably be initially in the more late-stage area, more simple for the later-stage trials, because most of the sites, many of the sites will be relatively research naive. People will go into their physicians who are part of this network, will be offered whatever treatment they need for whatever they have, but the physicians will know that there's a clinical trial available to them, which they can either refer those patients to a particular site or, if the circumstances dictate, they can become a site themselves. We're really introducing clinical research as a care option for patients, which I certainly believe is the future of clinical research. We have to get more people involved. Only typically 3%-5% of people have been involved in a clinical trial. This is one way to expand it. We talked about democratizing clinical trials, diversifying the patients or being conscious of the need to diversify our patient populations. This is a way that we're practically and tangibly doing that. Allowing us to look at the electronic health records in these sites and find these patients and then offer that clinical research as an option to them. It's an exciting area, one that I can take no credit for whatsoever. Kent Thoelke, as our Chief Innovation Officer has driven this, and he has driven a number of these sorts of initiatives. We're excited about being able to partner with the Veradigm Allscripts sites and really, as I say, make this an option for patients. Great. Well, thanks for the question. Good. Your next question comes on the line of Patrick Donnelly from Citi. Please ask your question. Great. Thanks for taking the questions, guys. Brendan, maybe one for you on the cost synergy side. It sounds like that story is already starting to take shape through some near-term opportunities. Can you just talk about how things are going to progress there, some of the near-term opportunities, and any confidence level now that you've gotten under the hood a bit and kind of kicked the tires? No, I think we're happy with the progress we're making there, Patrick. We're starting to obviously get into those numbers and really get a better sense of getting after that 150, which, as we've said in the past, we think is a very doable number, and we'll look to exceed it, of course. Steve made reference to the fact that some of the early actions we've taken already is around the office infrastructure, and we've announced some of the consolidation of the office infrastructure already, and that will have certainly, as we think of that 150, I would imagine probably about in the range of 20% or so maybe even as high as 25% of that 150 could be identified through those types of savings around facilities and facilities management. That's an area that we're keen to do as we bring the two organizations together. It makes sense from a cultural point of view to have folks in one office to develop the teamwork and also makes just good financial sense. There's some of the early pieces we're doing. Of course, we're looking at other areas as well. You know us in ICON to be very stringent cost managers and that we will bring that discipline. Also, the good models that we have for running our support services in terms of the efficiency of our enterprise-wide systems and the onshore, offshore models that we've had in the organization for quite some time now. We think we've been making good progress there. Early days, it's probably more of the, as I said, the facilities pieces, but good line of sight, and we'll start to see that coming in, as you said. Not so much in the back half of this year. A little bit, certainly in the back half of this year, but obviously we're putting down the building blocks really for good progress on that in 2022. No, that's helpful. Then maybe just one on kind of the COVID work. I know you've talked a lot about it. Can you just talk about the margin profile of some of that non-vaccine COVID work? Any reason we should see a big shift? You talked about the pass-throughs, obviously, but as we get into things like next year and the mix shifts away from some of the large vaccine trials into some of the non-big vaccine COVID work, how should we think about the margin profile of some of that COVID-specific work trial versus not? I think as we get into the non-vaccine trials, obviously that has a very beneficial mix in terms of the revenue without those large pass-throughs, or certainly not to the same extent. It will have pass-throughs, of course, but not nearly to the same extent as a 44,000-patient trial or those studies of that ilk. That will have a fairly significant positive mix element to our overall margin profile. Certainly, as we come through this first half of the year, we've seen that impact on gross margin particularly, and we do expect that to start to significantly improve as we get into the back half of the year and certainly into 2022 as well. That's helpful. Thank you. Your next question comes on the line of Juan Avendano from Bank of America. Please ask your question. Hi. Thank you for squeezing me in. Just one for me. On the tax synergies, given that ICON is an Irish company, this is definitely a favorable component to the deal. Can you give us your updated thoughts to see if there's been any evolution on your thought process on the proposed global minimum tax and anti-tax inversion reforms that are being proposed, and whether or not they would apply to ICON? Second part first. One, on the anti-inversion rules, no, we don't think they would apply. The relative scales of the organization, ourselves, and the legacy PRA organization were good. Obviously, we're the largest company by market cap, so we don't feel there's any risk really around the anti-inversion rules in this particular transaction. On the first part, it's probably too early to say, to be absolutely honest. Of course, what we can say is that as we get, and if we do see an agreed minimum global tax rate, the chances are that proportionally, ICON would still benefit more than our public company peers that are non-Irish based effectively, because the proportion of saving, if you like, or savings as a result of efficient tax rates will probably still be larger maybe possibly than even they are now, albeit both might move up from where we're currently thinking. As you know, we're thinking about 14% for the long run. That's still what we're working towards. That's still what the legislation says, and of course, there's going to be a lot of work and a lot of geographies before that starts to change. We'll continue to work for that with certainly an eye to that minimum global tax rate as time goes by. Thank you. Your next question comes on the line Dillon Nissan from Mizuho. Please ask your question. Hi, can you hear me? Yes. Yep. Sorry, it's Ann Hynes. Sorry about that. Just a question. I might have missed this, did you provide a combined backlog as of 06/30/2021 for both the combined company? Not yet, Ann Hynes. Mainly because we're obviously looking at what the right way to do that. We report on our full contract value basis, so on a 606 basis. Yeah. We'll have to have a think about just, obviously the PRA guys would not have included that in the past. Yeah We're still closing our balance sheets, as you know, and that takes a bit of time. We're still working on that process, and we'll have an opening to closing reconciliation for you on the Q3 call. Okay. Maybe shifting to just the environment. I know the demand environment is very strong, but can you talk about the supply environment, especially with CRA? Some of my recent checks suggest the environment's getting much tighter. Can you just talk about wage pressure with CRAs and any other wage pressure you're seeing? Yeah, sure, Ann Hynes. It is getting tighter, yeah, particularly in certain parts of the world. North America probably the focal point. The other parts of the world, I think we're in good shape. Europe's not as so much of an issue. Asia's not so much of an issue. Latin America has a little bit of focus as well. Really North America is where that tightening is. Yeah, salaries are increasing. We are putting in place, I think I sort of alluded to earlier in the call, a number of things that we're doing to promote people in a more timely manner, to bring in new graduates, to really put a focus on bringing in people who are more in the clinical trial assistant role and to train them and all that good stuff. There's a lot of things we're doing to attenuate or to limit that sort of pressure. At the moment, it's a fairly hot market and fairly strong demand, as I say, from that point of view. All right. One last question. I know you're doing non-GAAP earnings now with PRA. Can you talk about just what we should assume for stock comp expense and amortization for the combined company? Do you have those numbers yet? We'll probably give you more granularity on that, Ann, in the next quarter. The amortization is obviously going to be pretty significant as a number running through the P&L account. It's going to be in that ballpark of somewhere probably in the late $350s-$400s on an annual basis. Okay. The stock comp will probably just be in excess of the $100 million mark. Kind of in the $110 million-$115 million mark, albeit that's probably elevated this year a little bit as a result of some of the change in control provisions in the PRA contracts. We'll give you a better clarity on that, but those numbers are just kind of broad ballparks for you to work with. All right, great. Thanks so much. Your last question comes on the line of Dan Leonard from Wells Fargo. Please ask your question. Thank you. Just a couple of clarifications. First off, have you seen any changes or impacts from COVID variants worldwide on site availability, patient willingness to enroll in clinical trials, even over the past four to six weeks? Site availability, no. I'm interpreting your question, Dan, in terms of the availability of sites to do any sort of trials because of the pandemic now sort of moving towards, we hope, its end. We certainly see about 15%-20% of sites still having some impact from COVID Recruitment of patients generally is back to, I would have thought, sort of about the 90% mark. We're not quite where we want to go, and it seems to be a bit of a sigmoidal curve, if that makes sense. We kind of keep approaching the top, but we're not quite there. I think it might be a few more months or even into the winter before we actually get there. If that's the question that you're asking, I think we're moving in the right direction, but it's still some impact. Yeah, that's the exact question. Thank you. My follow-up, as I'm trying to think about framing 2022, I know you said there's no COVID cliff, but there's a tough comp from COVID vaccine trials. Does your high single-digit revenue CAGR, does that apply to 2022 when you consider a 2021 base inclusive of PRA for the full year, or is that more of a normalized comment beyond the bump of COVID trial work? I think that's probably more the latter, Dan. High single digits we think is sort of post-COVID through into the more normal, whatever normal is these days. Maybe we'll get back to that someday. We see that as a sort of cadence that the business can sustain on a long-term basis, and that being, I think, significantly above what the market will be at around, we think around 6%-7%, maybe 8%. We're going to be a little higher than that, and we believe we can easily fulfill Well, maybe not easily, but we can certainly fulfill those sorts of obligations or proposals. Got it. Thanks for the clarification. Okay. Are we done? Okay. All right, in terms of just closing remarks, I'd like to thank everyone for listening today. These are certainly exciting times for us at the new ICON, and we're pleased to have delivered another strong quarter demonstrating continuing progress and representing a strong platform for future growth. We also look forward to continuing our integration and the creation of the world's leading healthcare intelligence and clinical CRO. Finally, I want to take the opportunity to recognize our entire workforce and to thank them for all their efforts over the past quarter. Thank you all, and have a great day. This concludes our call for today. Thank you for participating. You may now disconnect.