Good day, and thank you for standing by. Welcome to the ICON plc Q3 Earnings Conference Call and Webcast. This time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, please press star one and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please note that you can only ask one question per participant to give everyone the chance to ask a question. And please also note that today's conference is being recorded. I would now like to turn the conference over to Kate Haven. Please go ahead. Good day, and thank you for joining us on this call covering the quarter ended September thirtieth, twenty twenty-four. Also on the call today, we have our CEO, Dr. Steve Cutler, our outgoing CFO, Brendan Brennan, our incoming CFO, Nigel Clerkin, and Senior Vice President of Corporate and Commercial Finance, Emer Lyons. 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, and 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 SEC reports filed by the company, including the Form 20-F, filed on February twenty-third, 2024. This presentation includes selected non-GAAP financial measures, which Steve and Brendan will be referencing in their prepared remarks. For a presentation of the most directly comparable GAAP financial measures, please refer to the press release section titled "Condensed Consolidated Statements of Operations." 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. Included in the GAAP in the press release and the earnings slides, you will note a reconciliation of non-GAAP measures. Adjusted EBITDA, adjusted net income, and adjusted diluted earnings per share excludes stock compensation expense, restructuring costs, foreign currency gains and losses, amortization, and transaction-related and integration-related costs, and their respective tax benefits. We will be limiting the call today to one hour and would therefore ask participants to keep their questions to one each in the interest of time. I would now like to hand the call over to our CEO, Dr. Steve Cutler. Thank you, Kate. Before I begin my remarks on the quarter, I wanted to briefly welcome and introduce our incoming CFO, Nigel Clerkin, who is joining us on the call today. Nigel is an accomplished executive with excellent experience across both biopharma and pharma services organizations in a public and private setting. We are thrilled to have him join our executive team at ICON. In addition, I want to extend my sincere thanks to Brendan, as this will be his last call with us, concluding a highly successful career at Icon. Thank you, Brendan, for your partnership and many contributions. Moving to the results for the quarter, simply put, ICON's results for the third quarter were not in line with expectations we had previously anticipated. As in any period we forecast, we have a number of risks and opportunities that are identified across our business that generally counterbalance as we progress through and close out the quarter. In this most recent quarter, the identified risks materialized to a greater extent than expected, and despite our efforts, the identified opportunities did not offset this impact, resulting in a greater deviation from forecasted results than we would typically see. This was due to three main reasons. First, we are seeing a small number of top customers who are experiencing continued cost pressures and are implementing actions to manage their development spend more tightly. Second, within our biotech business, slower decision-making and capital allocation led to award delays and slow trial starts. And finally, we had a large number of project delays and cancellations late in the quarter within our fast- burn vaccine area that materially impacted revenue. To provide more detail on each of these challenges, the first was attributable to lower than anticipated revenue contribution from two of our largest customers that are undergoing development model transitions, which we have been supporting them with since the start of the year. As we have previously highlighted, we are seeing an increasing emergence of hybrid development models amongst our large pharma customer base, which has uniquely positioned ICON to win a disproportionate share of these large partnership opportunities. Heightened focus on portfolio prioritizations, leading to tighter development spend, emerged through the quarter, delaying the expected ramp-up of new work that was forecast to begin in their new models. What this has resulted in is studies closing out in their previous model without the counterbalancing revenue from new studies as expected. While this creates pressure from a revenue perspective in the near term, which we have reflected in our full-year revenue guidance, we do believe this is an isolated impact that will be increasingly offset by growth outside of these two accounts, as we move forward, and is underpinned by the revenue growth we've seen outside of these customers, which we expect to be in the mid-single digits on a year-over-year basis for full 2024. The second issue was slower than expected activity in our biotech segment, both from a business development perspective, which impacted our total level of new awards, as well as in operational prioritization decisions, which resulted in negative study modifications and delays in study startup that occurred in the quarter. While we continue to see a positive level of overall opportunity flow in this segment, customers continue to operate with caution in terms of the overall use of their capital. This is impacting the speed of decision-making on both award of new work and how quickly customers are starting new trial activity. We saw several decisions on large award opportunities delay into quarter four, as customers required additional time to review final scope specifications before making award decisions, which are anticipated to take place this quarter. Lastly, we saw an outsized level of vaccine-related cancellations in quarter three, totaling approximately 20% of overall cancellations, which, combined with slower COVID activity, is also contributing to the lower than expected revenue in the second half of this year, as these programs are fast-burning in nature and were expected to start in the quarter. While we are dissatisfied with the performance this quarter and the reduction in guidance for the year, the factors contributing to the results are well understood by our team, and we are taking decisive action to manage them appropriately. We will deliver on one of our strengths, which is expertly managing costs. This includes aligning our resources in the right locations globally to best support our customers and their critical projects, as we continue to act as a strategic partner and deliver on our commitments for not just the short term, but their long-term needs. We have already implemented plans to improve processes and reduce overall costs across the organization, and we expect to see some benefits of these actions in quarter four and more fully as we move into 2025. This includes accelerating actions we already undertake as an organization with 40,000-plus employees, assessing spans and layers across our organization to determine optimal levels of oversight and utilization to drive efficiencies. Finally, we continue to increase our adoption of automation and the use of technology across our business to leverage our scale and center of excellence model. We remain confident in the underlying health of our business, the progress we are making in building critical partnerships, and our continued ability to deliver for our customers. In our large pharma business, we have been successful in renewing all strategic partnerships this year, and I'm very pleased to announce the award of another top ten strategic partnership, which was finalized in quarter three. ICON was selected for the breadth and depth of our capabilities, including our therapeutic experience and expertise, as well as our innovative approach in addressing challenges across the development continuum. The addition of this new competitive win brings our new strategic partnership count within the top thirty pharma to three in the past twelve months, clearly showing our momentum in gaining market share in this important space. These relationships are already delivering increased opportunity flow to our pipeline and new awards to our business. We are seeing a notable increase in therapeutic areas such as cardio and metabolic diseases, with new award growth increasing over 50% on a trailing twelve-month basis, which is helping to offset the drop-off in vaccines. In quarter three, we had solid growth in our total backlog of 9.4% on a year-over-year basis, with strength in new awards from laboratory and early-phase services. However, there was an increase in total cancellations in the quarter, driven by an outsized number of vaccine programs relative to our normal expectations. Relative to when we started this year, we saw more meaningful transitions in our business than anticipated, with a significant level of COVID-related work moving out of this calendar year. Two of our large customers undergoing more significant development model shifts with resulting cost pressures and the biotech market that is taking longer to recover and remains cautious. Despite these circumstances, we have still managed the business to drive revenue growth of 5.6%, excluding COVID-related revenue, and adjusted earnings per share growth of 13.5%, both on a year-to-date basis. We remain encouraged that opportunities across the totality of our business continue to track positively, given the contribution from new strategic partnerships, as well as increased opportunity flow from biotech, which we believe is still supportive of holding at least a one point two times net book-to-bill ratio on a trailing twelve-month basis. Fundamentally, our view has not changed in our mid to long-term outlook for our industry and the opportunity for ICON. We continue to deliver for our customers across all segments of our business and will appropriately manage our business as we transition through what is a more challenging environment in the near term for specific customers and as a result, for ICON. As we look forward to 2025, we are not yet issuing specific guidance for the full year, but plan to do so as we normally do in January, when we present at the J.P. Morgan conference. At a high level, provided the opportunity levels continue through the balance of the year, we would anticipate continuing to target a book-to-bill of 1.2-1.3 times on a trailing twelve-month basis. We would note that we are seeing an uptick in pass-throughs as a more meaningful component of total trial costs, even in non-vaccine areas of the portfolio, which is expected to start to reflect in our overall revenue mix next year. While there are certain large pharma customers in our portfolio that remain challenged in their spending outlooks for next year, our initial view on growth outside of these specific customers is positive and indicative of our overall development spend growth. While recovery in the biotech segment has been slower than we anticipated relative to the start of this year, large opportunities have been increasingly moving into the pipeline, and our performance this quarter from a business development perspective will be an important determining factor to growth in this segment for ICON next year. In totality, we would anticipate revenue growth in the low- to mid-single-digit range for the full year, which takes into account the expected headwinds, which we expect will have a greater impact in the first half of the year. We continue to be extremely well-positioned to take market share and grow in new and existing accounts, as evidenced by the recent strategic partnership wins we have accumulated since our union with PRA. The potential for these new partnerships to offset the aforementioned headwinds is very real as we move into 2025, and this, in addition to the growth of our strategic customers, gives us confidence that ICON will emerge from this transition period even better positioned and diversified across our customer base. We remain committed to our capital deployment strategy, which is focused on executing M&A in the areas of the portfolio we would like to strategically expand our capability and presence, principally in our ancillary businesses such as laboratory services, site and patient solutions, as well as select geographic areas such as Asia Pacific. We have opportunities in our pipeline that we are actively engaged on that could be executed in the short term. In addition, we have stated we would opportunistically evaluate deploying capital towards share repurchase, which we did late in quarter three, totaling $100 million worth of stock repurchased. We have recently secured authorization for a further $250 million for share repurchases, which gives us a total of $650 million now available for further repurchases. We anticipate remaining active in opportunistic share repurchases through the balance of this year and beyond. Before I hand over to Brendan, I want to extend my thanks, as always, to our hardworking and dedicated employees across the globe that are committed to driving our mission and supporting our customers in accelerating their development programs. Brendan? Thanks, Steve. In quarter three, ICON achieved gross business wins of $2.832 billion, a decrease of 7.3% on a year-over-year basis. In addition, we recorded $504 million worth of cancellations, resulting in net awards in the quarter of $2.328 billion, and a net book-to-bill of 1.15 times. With the addition of the new awards in quarter three, our backlog grew to a record $24.3 billion, representing an increase of 2.1% on quarter two of 2024, or an increase of 9.4% year over year. Our backlog burn was 8.5% in the quarter, down from quarter two levels. Revenue in quarter three was $2.03 billion. This represents a year-on-year decrease of 1.2% or 1% on a constant currency basis. Overall, customer concentration in our top 25 customers increased from quarter 2 2024. Our top 5 customers represented 24.8% of revenue in quarter 3. Our top 10 represented 40.6%, while our top 25 represented 62.9%. Gross margin for the quarter was 29.5%, a decrease of 40 basis points on quarter 2 2024. Gross margin decreased to 30 basis points over a gross margin of 29.8% in quarter 3 of 2023. Total SG&A expense was $180.4 million in quarter 3, or 8.9% of revenue. This is an increase of 20 basis points on the prior quarter of 8.7% of revenue. In the comparable period last year, total SG&A expense was $180.1 million, or 8.8% of revenue. Adjusted EBITDA was $418.8 million for the quarter, or 20.6% of revenue. In the comparable period last year, adjusted EBITDA was $432.5 million, or 21% of revenue, representing a year-on-year decrease of 3.2%, of a contraction of 40 basis points in margin. Adjusted operating income for quarter three was $383.8 million, a margin of 18.9%. This was a decrease of 4.3% on an adjusted operating income of $401.1 million, a margin of 19.5% in the quarter three of 2023. Net interest expense was $49.4 million for the quarter. We continue to expect the full-year interest expense to total approximately $200-$210 million in 2024. The effective tax rate was 16.5% a quarter, and we continue to expect the full year 2024 adjusted effective tax rate to be approximately 16.5%. Adjusted net income for the quarter was $279.2 million, a margin of 13.8%, equating to adjusted earnings per share of $3.35, an increase of 1.5% year-over-year. In the third quarter, the company recorded $7.9 million of transaction and integration-related costs. U.S. GAAP income from operations amounted to $285.4 million, or 14.1% of revenue during quarter three. U.S. GAAP net income in quarter three was $197.1 million, or $2.36 per diluted share, compared to $1.97 per share for the equivalent prior year period, an increase of 19.8%. Net accounts receivable was $1.172 billion at the 30th of September 2024. This compares with a net accounts receivable balance of $1.198 billion at the end of quarter two, 2024. DSO was 52 days at September 30, 2024, an increase of three days from quarter three, 2023, and an increase of one day from June 30, 2024. Cash from operating activities in the quarter was $402.7 million, and free cash flow was $359.4 million in the quarter, an increase of 15% on a year-over-year basis. We saw a nice improvement in cash collections in quarter three, despite the ongoing dynamics present with our customers, particularly large pharma organizations looking to hold on to cash longer and seeking competitive credit terms. Despite this dynamic, we remain on track to achieve our original full-year guidance of free cash flow of circa $1.1 billion. At September 30, 2024, cash totaled $695.5 million, and debt totaled $3.4 billion, leaving a net debt position of $2.7 billion. This compares to net debt of $2.9 billion at June 30th, 2024, and net debt of $3.7 billion at September 30th, 2023. Capital expenditure during the quarter was $43.3 million. We ended the quarter with a leverage ratio of 1.6 times net debt to adjusted EBITDA. Our key assumptions behind the full year guidance are largely unchanged: an effective tax rate of 16.5%, free cash flow target of circa $1.1 billion, cap spend of circa $150 million, and interest expense in the range of $200 million-$210 million, all for the full year 2024. With all of that said, we'll now open it up for questions. Operator? Thank you. As a reminder, to ask a question, please press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. Once again, it's star one and one on your telephone and wait for your name to be announced. If you could all kindly ask one question to give everyone the chance to ask a question. Thank you. We are now going to proceed with our first question. And the question's come from the line of Elizabeth Anderson from Evercore. Please ask your question. Your line is open. Hi, guys. Thanks so much for the question. Welcome, Nigel. Can you maybe provide us with a little bit more, color on sort of your confidence around pharma 2025 budgets in terms of your, you know, top customers? Like, are they, you know, you feel like you have good visibility at this point, that they've all sort of set their spending and cut levels that you see for those of them who are reducing spending in certain areas, do you feel like you have a good grasp on that? I just want to kind of understand that a little bit further as we think about, sort of the fourth quarter and then into 2025. Thank you. Sure, Elizabeth. So you know, I think overall, we see the large pharma market in totality to be growing at a reasonable rate in the mid, sort of low to mid single digits. Obviously, we're more exposed in a couple of cases to a couple of large customers, and that's a somewhat of a different story. We do believe, I think, as we get into twenty twenty-five, that we'll see the bottom of that of the slowdown with those particular customers that we have, and we'll start to move upwards, probably more towards the back end of twenty twenty-five. So we do have some visibility. Certainly in terms of one of them, I think we have some clear visibility. We're probably at the bottom as we are towards the end of this year. The other, it's a little less clear, to be very honest. But we do think we're approaching that point, and by the middle of next year, we will be sort of moving on the upslope away from some of the declines we've seen with those particular customers. So overall, I think we see the large pharma market as net positive, as I say, at 3%-4%, 3%-5%. And so we believe we can benefit from that, particularly with the strategic partnerships that we've been successful in winning over the last you know couple of years, really. And so overall, we see it as a you know as a medium to long-term positive. But we've got a transition period to work through over the next two to three quarters. We are now going to proceed with our next question. The questions come from the line of Michael Cherney from Leerink Partners. Please ask your question. Good morning, and thanks for taking the question. Maybe if I can follow along a similar trend to Elizabeth's question, but tied to biotech demand, you're not the only company that's signaling any type of concerns or worries about the state of decision-making in the biotech market. As you think through the various different constituencies that you work with across biotech, is there anything that you can glean about various pockets of strength and weakness versus disease state, versus status of where these companies sit from a venture funding perspective? You know, similar to the pharma question, where does that comfort factor lie about the pace of biotech recovery, given that obviously, market-wide, it's been a bit slower than we'd all would have anticipated? Yeah, Michael, that's probably. We're probably a little less certain in terms of biotech. We've been calling the end of the biotech challenge for several quarters now, and clearly, as we've seen in this quarter, we're not there yet. We see the same data you do in terms of their funding. They had a good start to the year, then it went slow in the middle of the year, and then September seemed to be positive. And we're getting the same sort of vibes from our customers in terms of their allocation. They seem to be able to raise capital, particularly for good science, but allocating it, they have delayed decisions, they have delayed awards, they've de-scoped projects, and there has been some uptick in the cancellation side of things. So, I don't think we're ready to quite call the end of the challenges in the biotech segment just yet. We do believe, I think, long term, it will be positive and we'll, you know, we'll move back to a very solid position. And I think there's certainly data that would support that. But I think the next two to three quarters, it remains somewhat uncertain. We do see, as I say, some optimism in the segment in terms of the RFPs numbers we're seeing through. They're solid. They're certainly solid enough. There's plenty of opportunity in our pipeline, but it's nailing that opportunity down and converting even those awards into projects that start and that burn revenue at the rate and to the extent that we expect is where the challenges lie, and I think we're not quite at the bottom of that yet. So I'm sorry if I'm not able to give you sort of full a definitive answer on that, but we continue to find that one probably the most challenging aspect of our business. We are now going to proceed with our next question. The question has come from the line of Luke Sergott from Barclays. Please ask your question. All right, great, thanks, guys. I guess, you know, as you think about the recovery here and into 2025 and the market kind of being that low single digit growth, and you guys typically grow at the high end of that, is that, is that still a safe assumption here as we think about 2025? And then, you know, as you also think about the margin implications here, the flexible model, and like that model or hybrid business that you can provide allows a lot of flexibility to scale up and down resources pretty quickly. So given this is late in the year, understandably, it hits in Q4, but how do you rightsize those, you know, and how we think about that margin progression as the, as the business starts to ramp back up? Yeah, Luke, as I think we said pretty clearly on the call, we're not gonna provide, you know, any sort of guidance for next year. We're, you know, we're looking hard at the business, certainly over the next three or four months, and we'll provide that guidance in January as we normally do. You know, having said that, you know, we do believe we can grow next year. It's probably gonna be more in the low to mid single digits at this point. That's kind of our, certainly our expectation. We're not making any projections on margins at this point. You know, our, the mix of our business is changing with the, the vaccine studies coming through and some uptick in the, in the functional work being counteracted and offset by, some progress on the full service, particularly with these new strategic partners that are coming in on a full service basis. So there's puts and calls from a margin point of view in both, on both ways. We do as I say, we do expect revenue growth. That's what we'll be working for. But at the moment, we're not gonna be too specific about that. We will be, as we say, as we get to, J.P. Morgan in January. We are now going to proceed with our next question. The question's come from the line of Justin Bowers from Deutsche Bank. Please ask your question. Hi, good afternoon, and just pivoting back to large pharma, a two-part question. On the development model changes in the replenishment cycle, how much visibility do you have into this dynamic persisting, or is this a step change in that funnel? And then, is the messaging there that, you know, these two customers will sort of be a headwind into twenty twenty-five, and then the rest of that customer cohort, the top 20, would then grow? To answer your second question first, Justin, I, you know, I think that's a reasonable way to characterize it. We certainly see growth outside of our top two, I think, to the extent of around 6%, and you know, we're happy to see that, and that's all fueled in many cases by more full service work, better margin work, and so we think there's a nice offset on that front. In terms of the more functional, is that a permanent? These things are never permanent. These things tend to wax and wane depending on who's in charge of the company and what the operating model du jour is. We have some opportunity, I think, to work in both models, effectively in both models. We talked about our hybrid model and our ability, because we are the largest functional provider, to provide hybrid, functional, and full service components of any sort of development program or portfolio. So we do believe we're very well positioned, no matter which way the market goes, to be able to prosecute and to win that work. But as I say, at the moment, we're seeing that push towards a more functional approach persisting, at least in several of our top customers, but it is being offset to some extent by some movement towards full service in other parts of the business. Of course, our biotech customers are all full service. So as always, there's puts and calls, and there's offsets, tailwinds and headwinds on this thing. I think generally, we feel the market overall will progress nicely if we can prosecute and execute our projects as we believe we can. We believe we can get some modest margin uptick, but that all remains to be seen. And as I said, we're not going to be specific about 2025 or beyond just at this point. We are now going to proceed with our next question. The question comes from the line of Ann Hynes from Mizuho. Please ask your question. Yeah, good morning. Thank you. Just the long-term goals you provided at the recent Investor Day for 2027, it seems like the environment has changed. Do you think it's still possible by 2027, what you see now, to at least hit maybe the low end? And if you can't do it on the revenue side, would you commit capital to share repurchase to at least hit the EPS goals? Yeah, that's a question we're, you know, we're looking at very hard, and we certainly will be looking at very hard over the next couple of months as we come towards the end of the year. But you know, to give you a high-level answer on that, we do believe we're well positioned to be able to achieve those goals. Put back perhaps towards the lower end of the range and perhaps towards the end of twenty twenty-seven might be the caveat I would give you. But we certainly haven't given up on those goals. We believe we're, as I say, well positioned in the marketplace to gain market share. We do believe we're gaining market share, particularly with these strategic customers. And as we move through this transition period, as I said, the next two to three quarters, we believe we're gonna be in a good place to be able to accelerate our growth in the more medium term, and move back towards achieving the sort of goals we put out at our Investor Day in May. As I say, perhaps more towards the lower end, and we're certainly prepared to utilize our balance sheet to prosecute the share buyback options. And we also are very much in the market on the M&A side of things, where we can bring in components of the business to supplement what we already have and to improve the performance of what we already have. That's certainly the push on the M&A side of things. So we do believe we've got the tools in the toolkit. We do believe we've got the balance sheet, and we do believe we've got the people and the strategy to achieve the goals that we set out. We are now going to proceed with our next question. The question's come from the line of Patrick Donnelly from Citi. Please ask your question. Hey, guys. Thank you for taking the questions. Wanted to follow up, I think, with Luke's question on some of the margin stuff. I know you guys talked a little bit about some cost actions. Can you frame up, you know, what you guys are gonna do on the cost side? If the magnitude is possible, that would certainly be helpful. Basically, just trying to figure out, you know, when you look at the second half here, you know, implying EBITDA margin somewhere above 20%, is that a fair number to think about next year? And just the cost-out piece would certainly help contextualize that. Thank you, guys. Yeah, Patrick, in terms of cost, I think, I think it has been noted, you know, we've acted fairly quickly to, you know, to realign our cost base with the work that we have in the backlog and the work that's proceeding in the backlog. Absolute priority for us is to make sure that our customers have the resources they need to get their critical projects done. That is, that is priority absolute number one, and we've, we're very focused on doing it. Having said that, we do recognize that an adjustment on the cost base is important, and we're pulling a number of levers, whether it be spans of control, whether it be looking at where we have an excess of people in certain areas, but we are looking very hard at doing that and taking fairly decisive action. So, you know, I'll leave it at that. I do believe it'll have some impact on quarter four, not a huge impact, but really, that impact will be as we get into twenty twenty-five. And I do believe we have some other areas we can look at as well, and we'll, you know, we'll. It's not just a one-off. We're gonna continually look at what we need to do on a cost base, and we do it well. It's something I think you would all note is one of our key strengths. We manage our costs very well. We don't wait around, and then hope for the best. We actually take action, and we're doing that right now. And I think that's an important component and something you should take some confidence in, that we will address that. Brendan, you want to address on that? No, I think, you know, just from my perspective here, obviously, you know, this is a, it's a big services organization. It takes time to move that ship in terms of cost base, and I think it's appropriate with Steve's comments in terms of, you know, ensuring that we have delivery to customers. That's obviously of paramount, you know, importance to us as an organization. You know, this is kind of a, it's a, it's a bit of an odd quarter for me because it's a very effective quarter as well as everything else. But, you know, over the nineteen years, I can tell you definitively, it's not one or two people that focus on the cost base in ICON, it's everyone. You know, so I think that's something to bear in mind as you go forward here, that this organization will continue to challenge itself, continue to push itself, and as Steve said in his opening comments, that it has the quality and the strategy to do that. So, I think that's probably, without going too far into, you know, giving indications on what guidance is next year, but I think that's the point you need to recall. We are now going to proceed with our next question. And the question's come from the line of David Windley from Jefferies. Please ask your question. Hi, good morning. Thanks for taking my question. I wanted to come back to big pharma with a little different angle. Steve, with, with the partnerships that you had at the time of the PRA acquisition or merger and the ones that you, you've won since, as you highlighted this morning, you've got pretty broad footprint across top twenty or top twenty-five. I, I guess my, my question is twofold. One is that, is, is how much of the wallet do these partnerships avail you of? And, and, you know, maybe that's mixed in different categories or whatever, but I'm, I'm just interested in, you know, in what cases are you kind of penetrating the client, and in what cases might you only be in one therapeutic area or only in one service or something like that. And then with that footprint and that opportunity to interact with those clients at that higher level, and to the point that you made about, you know, development model changes, how much of this is, kind of major adjustment by big pharma to, you know, the outlook that they have, loss of exclusivity cycle, a new pricing dynamic in the U.S., and, you know, really reevaluating, you know, returns on invested R&D and, you know, repositioning or, you know, pivoting pipeline. And the bottom line on this part of the question really is, you know, is it just these two, or are we only kind of midway through a lot of big pharma clients doing these times, these types of things? Thanks. Right. Okay, Dave, and that's, yeah, that's quite a question. Let me start with your first one. In terms of the sort of share of wallet or what we do with these strategic, it really does vary. In most cases, we are selected as either one of one, one of two, or one of three, perhaps one of four, but it's usually in the sort of up to three. One of two cases we're the sole provider, but that's not, that doesn't happen very often. More cases, it's more one of three, and we do get access to their entire outsourcing portfolio. And so we have the opportunity to bid, and we bid usually against the other one or the other two. If we've been doing the work in phase two, we have an inside run, and if we've been doing a good job in phase two, it's almost a non-compete, if that makes sense. So obviously, it behooves us to execute and to prosecute our trials well with those strategic partners, and we build those partnerships and get that work almost on, as I say, a non-compete basis. In terms of, there are one or two where it's more therapeutically focused, or if you like. But in that case, there's probably less competition, so we may be allocated the cardiovascular side of things or the oncology side of things, or the metabolic side of things. In that case, we'll, you know, we'll get the bid, and unless our pricing is well out of whack or there's some questions, we won't be in a competitive situation. We've already negotiated a rate card, terms and conditions, et cetera. So it's a less competitive situation, although we're probably working within a more narrow slice of their portfolio. In terms of you know, whether these models that we're moving to and we've seen over the last couple of years, moving to a part of a major adjustment or a response to pricing challenges, IRAs, patent cliffs, et cetera, that's a hard one to answer, Dave. It really is. We do see these sort of models tend to be correlated with, with certain managers and certain leadership styles. And when new people come into organizations, they tend to apply the management or the outsourcing model that they've seen work before, that they like. And so it may be as much to do with the individuals in charge of the development spend and the development organization in the pharma than it is on any sort of particular price pressure or patent cliff, et cetera, et cetera. We see things going both ways, you know, to a more functional approach. Some customers, the more recent wins have been to a more full service approach. Again, offsetting any pressures on a margin line from the functional. And so, you know, it goes both ways. I don't think there's any sort of particular tsunami or any sort of trend or that's moving across the industry one way or the other, quite frankly. And so we, you know, we take it in those terms. You know, in terms of customers responding to some of the regulatory challenges that they face, inevitably, you know, they talk about those and they work through. Some move in a more functional basis, and some are moving in a more full service basis. Some it's because their pipelines are so full or their requirement to develop drugs is so critical because they're growing so fast that you know they are tending to outsource, and that tends to be in a more full service basis. So I think it's a long way of telling you that it's not particularly correlated with any particular regulatory or external factor. It's a multitude of things, and each customer or each pharma has their own set of circumstances, and they pick their models based on those. I think I'd just add quickly, Dave, that it has presented us though with a lot of opportunity. I think it's fair to say over the last eighteen months, we've probably seen more activity, right? That's been caused by some of these concerns from a macro perspective, whether it be IRA or some of the other issues that have come up and caused large pharma to take a hard look at how, you know, their development organizations are structured and where they need to get to over time. Obviously, the outlooks are going to be different on a customer by customer basis, but that gives us an opportunity to go in and really fight for or continue to. To defend our position in existing partnerships and have an opportunity to win new ones. And obviously, we've been successful, winning three new, you know, large partnerships in the last twelve months, and that's critical in terms of our growth outlook for the future. So it's not necessarily a negative in terms of, you know, these customers looking harder around their development spend and opportunities. We are now going to proceed with our next question. The questions come from the line of Max Smock from William Blair. Please ask your question. Hey, good morning. Thanks for taking our questions. I just wanted to make sure I understand the drivers behind the miss on gross bookings versus the miss on revenue here. Because of all the factors you mentioned at the top of the call, the only one that really struck me as being more tied to new bookings and not burn rate was the awards from small biotech. So can you just walk through kind of what are the key drivers for that shortfall in net bookings specifically? And if it really is just small biotech slowing down on the front end, is it fair to assume that that cohort's taking a meaningful step back over the last couple months here, just given the size of that booking step down that we saw in the third quarter? Thank you. Yeah, I think if you had asked me for one, the major reason, Max, on the booking shortfall, it is the delay in decisions, particularly from the smaller and biotech customers. They, despite the fact that, you know, we know the capital markets have been a bit uncertain and a bit volatile, and that's up and down, every month seems to be a different one. But they, even the ones that have been able to raise capital, there are delays and they do seem to be reprioritizing even some of their current programs. So it really, I think it really did come down to slowness in decision-making in the biotech segment as the main reason we fell a little short of our target 1.2-1.3. Having said that, as I indicated in my comments, there are some good opportunities in the pipeline, and the RFP flow continues to be solid across both, you know, segments of our market, both large pharma and biotech. And so, you know, is it? I'd like to think it's a one-off and a short-term issue, but as I said previously, again, the biotech segment is a bit volatile at the moment, and I'm not quite sure we're ready to call the end of that volatility or uncertainty, so that may well continue. But I do think that going forward, you know, as I say, 1.2-1.3 on a trailing twelve-month basis is a very achievable goal for us. We're now going to proceed with our next question. The questions come from the line of Michael Ryskin from Bank of America. Please ask your question. Great. Thanks for the question. This might be related to your last point just now on net bookings and some of the volatility in biotech. But earlier in your prepared remarks, you kind of talked about, you know, two things that happened during the quarter, you know, both risks materializing to a greater extent and some of the opportunities not offsetting. So just trying to think about the revised guide for twenty-four and your comments about low single digit, mid-single digit for twenty twenty-five. Maybe putting it this way: Are you more worried about the risks being more protracted? And I, you know, thinking about the two pharma that you talked about, the reprioritization there. Or do you feel less confident in some of the opportunities offsetting? You know, which, which of those two components did you adjust more, when revisiting the guide? Yeah, that's a good question, Michael. It's, you know, in our business, there are always risks and there are always opportunities. And as I said in my prepared remarks, in this quarter, for the first time in probably 55 or 60 quarters that I've been involved in the company, you know, there really was a very substantial difference in what played out. The risks well outweighed the opportunities. You know, I think going forward, we'll reformulate and relook at what those risks and opportunities are and be able to be a little bit more accurate, if that's the right word, in terms of how we think the work's gonna go and how it's gonna come in. Quarter three, as you all know, is probably the most challenging quarter in the year, given that August is very quiet. Our customers are away, sites are away. It's sometimes difficult to get the information you're looking for, and then everyone comes back in September and, you know, down to a number of key decisions as to whether you make your book-to-bill number or not. And so it is a challenging quarter, and when things don't hit and they don't go as we'd expect, the very short-term impact plays out as it has for us in this quarter. I don't see going forward that we're gonna have this sort of quarter. In fact, I would hope we're not gonna see this sort of quarter on a regular basis. You know, we've got a pretty good track record, as I said, over the last fifty or sixty quarters that we've been reporting, at least that I and Brendan have been involved in reporting. And we feel our track record is pretty good. I don't think one quarter changes that. I recognize some disappointment, and I certainly, the quarter as it is, is not up to our expectations. But I don't think our process is fundamentally broken. I think we need to just look at ourselves a little bit more closely and make sure that we are, you know, projecting and forecasting in a way that is reflective of those risks. But I don't see the risks necessarily outweighing the opportunities any more so going forward than they have in the past. I think importantly, Mike, you know, we have reflected that in the forecast for Q4 in terms of that impact. Obviously, from those issues, we saw that that came up in Q3, you know, continuing in Q4, and obviously, we've anticipated that in terms of the updated guide. So we haven't, you know, made any different assumptions around opportunities outweighing that in a different way than what had played out this quarter. We are now going to proceed with our next question. The question comes from the line of Dan Leonard from UBS. Please ask your question. Hi, thanks. Another question on large pharma demand, which I think is similar to David's. You know, as we're all trying to guess who is customer number two, we can come up with half a dozen names that fit the descriptor in your press release, which is what, you know, begs the question on whether this issue is really isolated or not. So are there some examples you can share where, you know, perhaps the headlines that we're reading aren't really mapping to your experience in your revenue growth with the customers? If I can ask a second part, you know, same question. You know, elsewhere in the R&D supplier landscape, you know, looking at equipment suppliers, for example, you know, they've been talking about large pharma weakness for a good 18 months now. So, what comfort, you know, do you have that there isn't some, you know, pig-through-the-python phenomenon going on here, where you're just getting hit with a lag, and we could be talking about this for a good while longer? Dan, I'm not quite sure I understood your first question. Do you wanna run that by me again, please? Yeah. Yeah, the first question. So you mentioned two customers in large pharma, right? And one of them, I guess we can presume, is Pfizer, and we're all trying to guess who is customer number two. And we're looking at your descriptors around, you know, pipeline prioritization and development models and just trying to map those to headlines. There's half a dozen names that, you know, investors can readily come up with, which is what is begging the question on whether or not the issues are isolated. I wonder if, you know, one of the ways to address that is perhaps, you know, you could share examples where there have been some negative headlines, but you're still growing despite that, because of all the reasons you talked about earlier, if that would help, you know, add some comfort. All right, let me have a crack at that. You know, we're not gonna... We don't talk about specific customers, at least we don't name specific customers. You know that. But you know, I think it's... We believe they are the issues that we have with these customers are isolated to them. It's, and it's not that they are the only ones moving in the direction they are, whether changing their development model or moving towards a more functional approach. It is the issue for us, of course, is that they are very significant customers for us, and they're both going in the same direction at a similar rate of knots. And so that's the specific issue that we have. And to be a bit more specific, as they change their model, we certainly anticipated a decline in revenues from a certain part of their business in terms of their full service work. What we also expected was a much more significant uptick in their functional business. And that's really where what hasn't happened so much. And so the differential, if you like, has become much more expansive or much more expanded than we anticipated at the beginning of the year and even as we went, you know, midway through the year. So that it's that differential of what we thought they would award us versus what they have awarded. And that's really because they haven't been doing that work. Because of the budget cuts, I think they've been cutting back on their pipeline. And so it is very specific. We do believe it is somewhat, it is totally isolated to these. So it's not that others aren't moving and are doing similar things, but they're certainly not having the sort of impact that they have on our portfolio, on our level of work. So I hope that helps you to clarify that. In terms of, you know, some other customers or other, sorry, companies in related industries and their commentary on the large pharma models, you know, I can't comment specifically on their businesses or what they do. We don't see this as a, you know, sort of, something that's gonna extend further. We do see it as a relatively isolated issue that's happening, as I say, with two of our largest. We work, though, with, you know, all of the large pharma customers, and across the totality, as I said, of the business, we feel pretty good about where that's going, and we certainly feel pretty good about the opportunity to gain market share. We believe we're doing that, and we believe going forward, we'll be able to do that more, and we'll reflect that more in our growth rates, in the more mid to long term than we will in the short term. We're still working through, as I said, this transition period as we move that pig through the snake, as you to sort of coin your analogy. You know, we believe we're gonna be in a good position to grow the entirety of that segment in a more consistent and more long-term manner. So overall, you know, I'll keep saying it, we see medium to long-term, constructive and positive on the market and on our ability to grow within it. It's a transition period here for two to three quarters that we're working through. And as you've seen from our guidance, you know, we've got a challenging quarter in Q4 to deliver, and we're gonna do that. And then we'll move into next year, and on the basis of what we got in January, we'll give you a flavor for what's gonna happen then. We are now going to proceed with our next question. It comes from the line of Jailendra Singh from Truist Securities. Please ask your question. Thank you, and thanks for taking my questions. Just a quick clarification, which could be just a yes or no answer. That low to mid-single-digit growth rate for twenty twenty-five- ... Is that just organic or you're including M&A there? And then my main question on backlog burn rate, decline of sixty basis points sequentially. Can you share some details around how much of this drop was driven by business mix versus, like, some of the non-vaccine related opportunities not converting to revenues in the quarter? And how do you think about these non-vaccine opportunities coming back in the future? Just trying to understand, how should we think about burn rate, beyond Q4? Clearly, Q4 looks like similar to Q3, but, just thinking about the long-term, burn rate expectations. Yeah. Okay, so as I think about low to mid single-digit, you know, we think about organic on that front. So I'll just be straight up with you on that one. That's our expectation. That is not guidance, all right? I want to reiterate, that is not guidance. We haven't done that. We'll do that in January. So hold your horses on that one. But that's where we'd normally place our expectations. In terms of vaccines and burn, you know, as I say, from our previous call, we pushed out some significant vaccine work into next year. That has, I guess, some positives and some challenges for us. As you know, the mix of direct fee and pass-through changes, the pass-throughs go up quite substantially with that work, which has some pressure on our margins, and certainly in the first half of the year as that work burns through, but then on the positive side, of course, it does burn quickly, significantly faster than our than our sort of normal rate of burn, and so with that in mind, we would expect and look to see a you know a very modest overall improvement in our in our burn rate, assuming that work happens. That work's been a bit volatile, and it's been pushed back and, you know, so at the moment, it's happening. The initial stages of those trials are underway. We are recruiting patients, albeit in a fairly modest way, and that was always the plan, so that work has started, and we do expect it to come into next year, but you know, as I say, vaccine, this vaccine work is notoriously volatile and challenging, but it does help us very much from a burn point of view and an ability to you know to push a reasonable growth rate into twenty twenty-five. I hope that answers your question. We are now going to proceed with our next question. And the question's come from the line of Eric Coldwell from Baird. Please ask your question. Thank you. Why is unbilled revenue up 45% year over year? And have you sold receivables this period or year to date? And then my follow-up or other add-on here is, what company did you buy at the end of 3Q, and what is the impact of that? Thank you. Hey, Eric, Brendan here. I might take the first part of those, the first two parts of that question. Just in terms of the unbilled position, this is just, you know, part of this is the market we live in. And now we've seen a lot of. And obviously, this is predominantly driven by the large pharma customers as well, in relation to, you know, their new contracting procedures over the last twelve months. We have seen them pushing out the milestones, again, trying to have fewer milestones in contracts, and sometimes, you know, certainly on new works that has that definitely has impacted us from a, from an absolute perspective in terms of that unbilled level. I think you see from the cash receipts in the quarter, obviously, we're still in good nick and still targeting to make the free cash flow target for the year. But you know, absolutely, it's a matter of focus for the organization as we go forward. I think one of the other, you know, compounding factors is we have seen less upfront elements of pass-through payments when, you know, they're looking at balance sheets of our size, you know, you don't get that many people kind of volunteering this piece. In terms of... Listen, we manage our debtor book appropriately over time. I think that's fair. I think we have done a decent job at that. Some of the large customers have, you know, payment methodologies that immediately put you into looking at things like customer programs effectively that have, you know, some elements of cost to them. That is fair, but that's just the way they're operating at this level now, and we've seen that from a couple of our large customers. So to that extent, we operate with them in those models, albeit it's not widespread across the book of business, and I think then on the second part- Yeah, I mean, I'll tell you that we did make a relatively modest-sized acquisition, relating to an organization in Eastern Europe to supplement our Eastern European capabilities. They work in the biotech segment, they work in the functional segment. They made an immaterial contribution to Q3, and frankly, it's a relatively small contribution to Q4 as well. But that's the source of the majority of the increase in headcount. We also see an uptick in our functional services group, and we brought on some billable or revenue-generating people from our functional group in the quarter, and that's also part of that increase in headcount. So I hope that explains that to you, Eric. We are now going to proceed with our next question. The question's come from the line of Matt Sykes from Goldman Sachs. Please ask your question. Hi, thanks for taking my question. Maybe just going back to the identified opportunities that didn't materialize in the quarter. Were there any specific themes to why those didn't materialize? Was it price? Was it reach? I mean, anything that you can kind of call out that the reason why those didn't materialize, or there was really case-by-case basis? Thank you. ...Oh, Matt, you know, every case is different. You know, I think if there was one theme, it was really around the biotech segment and some, you know, some uncertainty about, you know, whether they were able to get the... In some cases, get the funding for the work, and that's always a factor. It's not always. It's often a factor with some of these companies. They're cautious with what they have. They're looking to look at their development programs and make sure that they're developing in the right indication, and there's some delays around that. As I say, delays around funding or gaining funding from it as well. You know, it really, as I said, it was more a biotech thing, and it was probably more around the availability of finance. We obviously talk to our customers before we take awards, and certainly before we start projects, and make sure that they are well-funded, that they have the capital to do that. We are very cautious about that, making sure that their balance sheet and that they have that money. That we did not sort of hold up or not take an award on that basis at all. But it really is, I think, reflective of the continued challenges within the funding environment in biotech that caused those delays. We are now going to proceed with our next question. The question's come from the line of Jack Meehan from Nephron Research. Please ask your question. Thank you. Steve, a question for you. As you look at the large pharma pressure, do you think any of this relates to customers assessing their concentration of work with ICON? So I look back, you know, when you did the PRA deal, it was probably the most seamless CRO acquisition I've ever seen. But there's been this question of whether maybe as sponsors are rightsizing their budgets, maybe ICON is seeing some disproportionate pressure because the concentration went up with PRA, even though you're a few years into the deal. Just curious if that's come up at all, and then one question for Brendan. Can you just your comment on the growing role of pass-throughs in twenty twenty-five, is there a way to think about what that might mean in terms of a drag relative to revenue growth? Thank you. Yeah, Jack, in terms of the concentration of customers, you know, I think it would be fair to say that, one or two have looked at, you know, if, PRA and Icon were significant providers in the previous, mix, and now we've come together, they've looked at that, and they've, in one or two cases, brought on, another competitor. I think that's what we expected, and that's happened. In most of the cases, at least in the cases I can think of, that's happened, you know, we've continued to outperform, and we've continued to deliver. That, you know, it probably has been the source of some challenge in terms of, a continued revenue growth within those customers. But, you know, we feel like we've, you know, we've continued to develop them. But, yeah, so, you know, as you do these acquisitions and you get access to other customers through the scale that we've been developing, we've been pretty clear and upfront about the new strategic partners we've brought on. There has, in one or two cases, I think, been an extra competitor brought in. It's not that we've gone out, it's an extra competitor has brought in, which is, you know, made increased or at least made the competition to continue growing. Yeah, I think, Jack, your question probably relates to my answer on the last one, which is we're not seeing the same quantum of upfront payments on pass-throughs anymore. But that doesn't change the quantum of pass-throughs. It just changes the cash flow. So, in terms of how that impacts next year, we haven't seen any decrease in the absolute quantum of pass-throughs that we're seeing as an organization. And as a consequence, there's no additional drag as a result of change in mix of pass-throughs. That remains relatively consistent. The only thing that pushes that up and down, of course, as we've talked about a little bit, is vaccines and particularly COVID studies, which obviously might have an impact depending on the timing of same. We are now going to proceed with our next question. The question's come from the line of Casey Woodring from J.P. Morgan. Please ask your question. Great. Thank you for fitting me in. Just curious to hear what you guys are seeing in terms of the preclinical and discovery pipeline working its way through to clinical here in this current volatile environment. Wondering if this is really just a two- to three-quarter dynamic or transition period, as Steve, you kind of referred to it as, you know, working through several customers, rightsizing budgets, or if this is really the start of a longer slowdown in pipeline progression, just based on what you're seeing on the preclinical side. Thank you. Yeah, sure, Casey. You know, now, unequivocally, we believe this is related to, you know, to our, those two larger customers and the biotech uncertainties, and the vaccines. It's not something we're seeing flowing through from preclinical. The link between preclinical and our, you know, particularly large Phase II, Phase III business is pretty tenuous in the, you know, in the short to medium term. Perhaps in the very long term, you might get some sort of... But, you know, there's such an attrition rate of compounds from the preclinical into the early clinical and Phase II, that it... You know, you've got to have an enormous impact on preclinical, I think, really to impact the clinical stage of, you know, work. So I would completely reject any thesis that that's playing into this. It really is, we believe, a fairly isolated and relatively short-term issue that we're working through here, and we expect that, you know, within the next two to three quarters, we'll be moving well through it. ... Yeah, and I, I'll just add quickly, actually, in the early phase, you know, more in the Phase I space, it's actually been quite good in terms of overall activity, particularly on the award front. We called that out, obviously, in addition to labs as being a nice performer for us in the quarter. So actually we're not seeing that even on the early end, early stages of our business. Good point. Good Good point. Yeah. Thanks. We are now going to proceed with our next question. The question's come from the line of Charles Rhee from TD Cowen. Please ask your question. Yeah, thanks for squeezing me in. Just, Steve, you mentioned earlier about capital deployment and, you know, you're looking at a bunch of opportunities, in the short term. Can you give us a little bit more sense, would these be more material than the one that you just talked about in Eastern Europe? I guess the follow-on to that is, anything to suggest that you couldn't do both M&A and buyback shares, given where your leverage is currently? I'll answer your second question first, Charles. No, we believe we can do both. We, you know, we believe our balance sheet is and our cash flow has been excellent this quarter, so we believe we're in a strong position from a balance sheet point of view, to be able to deploy either in M&A or in share buyback, and you know, we'll be opportunistic, certainly on the share buyback side of things. The size of the M&A opportunities we're contemplating are, you know, they're not huge, they're not transformational. They are similar size to the one I described previously. We are looking to supplement and to improve our current operations. So whether it be in the lab space, whether it be in the patient or site space, potentially in late Phase, R eal World, those sorts of areas are the areas that we think we can make a sensible acquisition that can actually improve our overall performance. So it's more than just what we bring in from a revenue and EBITDA point of view. It's what we can synergistically get from a revenue and obviously from a cost, but from a revenue and a performance point of view. If we can prosecute our projects better for our customers, you know, we are able to earn revenues, all that good stuff. You all know about that. Those are the sorts of areas we're looking at, areas where we can really turbocharge, if you like, our clinical operations, particularly in the Phase II, Phase III area, and burn that work, get that work done for our customers more effectively and more efficiently. Those are the areas we look at. In the interest of time, we will end the question and answer session, and I would now hand back to Steve Cutler for closing remarks. Thank you. Okay. Thank you. Thank you, operator, and thank you all for attending the call today. We're not where we anticipated to be at this point of the year. When you look at the underlying business, excluding the factors that we outlined, we are continuing to outperform the market, and our market position does continue to get stronger as we expand the number of partnerships we have within the top thirty pharma group. And we are obviously very focused on continuing to help our customers who are under pressure to structure their development organizations in a more efficient way for their pipelines of the future. So overall, we remain very constructive on our midterm growth prospects and optimistic that we can progress our performance over the short term very effectively. Thanks, all, for attending. This concludes today's conference call. Thank you all for participating. You may now disconnect your lines. Thank you.