Okay, and thank you for standing by. Welcome to the ICON Q2 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question during the session, you'll need to press star one and one on your telephone, and you will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised today's conference is being recorded. I'd now like to hand the conference over to your first speaker today, Kate Haven. Please go ahead. Good day, and thank you for joining us on this call covering the quarter ended June 30, 2025. Also on the call today, we have our CEO, Dr. Steve Cutler. Speakers, you are now live. Please go ahead. Can you hear me? Good day, and thank you for joining us on this call covering the quarter ended June 30, 2025. Also on the call today, we have our CEO, Dr. Steve Cutler, our CFO, Nigel Clerkin. Testing. Hello, operator. Our COO, Barry Balfe. 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 20F filed on February 21, 2025. This presentation includes selected non-GAAP financial measures, which Steve and Nigel 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 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 exclude stock compensation expense, restructuring costs, foreign currency gains and losses, amortization, and transaction-related and integration-related costs in the 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. ICON's second quarter results showed good progress across a number of key areas as we navigated ongoing volatility in the broader clinical development market. Gross business awards increased 11% on a sequential basis over quarter one, with notable wins from several biotech customers, as well as the continued ramp-up of several large pharma partnerships that have been added in the last 18 months. Our revenue performance was ahead of expectations, assisted by higher pass-through revenue in the quarter. This dynamic helped to increase our burn rate slightly to 8.2% in quarter two and was in line with our expectations of holding a stable burn rate as we progressed through this year. While study delays and the elongation of timelines from contracting to start date have presented a headwind to this metric, there are a number of initiatives we are focused on to improve cycle times and ultimately increase burn rate, which are showing promising results on in-flight studies. Through execution of our cost management initiatives across the business, as well as continued automation, we saw progression in adjusted EBITDA dollars sequentially. Gross margin improved over quarter one to 28.3%, and SG&A costs reduced by $9 million year-over-year, demonstrating our ability to optimize our efficient global operations. Overall, adjusted EBITDA margin increased over quarter one to 19.6%, with solid cost control offsetting higher pass-through revenue. This translated to a 2% increase in earnings per share sequentially, resulting in adjusted earnings per share of $3.26. While we achieved solid conversion on the opportunities that went to decision in this quarter, our net book-to-bill result of 1.02 times was negatively impacted by elevated cancellations, as we anticipated. Overall cancellations increased sequentially and on a year-over-year basis in the quarter, driven by the cancellation of one of the large next-generation COVID vaccine trials. We saw a similar trend to recent periods where the mix of cancellations across customer groups, excluding the large COVID studies, was in line with our relative distribution of revenue. The reasons for cancellations remain broad-based, ranging from decisions related to portfolio rationalization and reprioritization to negative clinical trial results. As we look forward to the second half of the year, we expect largely similar conditions to persist in the market. While challenges remain, we entered the third quarter with an encouraging level of actionable opportunities in the pipeline, and we have seen good momentum in our ability to win across customer segments. With our scale and differentiated offering, we are presenting compelling clinical solutions that can deliver optimal efficiencies for customers, positioning us well in an increasingly competitive market. Further, despite the fact that net bookings will continue to be challenged by elevated cancellations and extended decision-making in the near term, we believe that as market conditions stabilize, cancellations will return to historic levels and net business wins will increase. In addition, the current need for many large pharmas to address their loss of patent exclusivity in the short to medium term necessitates continued and, in many cases, increased investment in their late-stage development pipelines. In quarter two, we began to see early but encouraging signs of this in the market, with increased M&A and licensing activity amongst large pharma companies. At ICON, we are well-positioned to benefit from this activity, given our significant number of established strategic relationships across large pharma companies alongside our differentiated biotech offering. We have seen recent notable wins across our business, where we have leveraged the strength of our existing relationships and experience with smaller biotech organizations that were acquired by mid-size and large pharma companies to then broaden our relationships with those acquiring organizations. In fact, in quarter two, two of our largest awards were with a mid-sized pharma company where we successfully expanded our relationship that originated with one of their acquired biotech companies. ICON's demonstrated performance in the delivery of prior studies was a key consideration in the further development of this expanded relationship. We updated our full-year guidance to reflect our expectation for higher pass-through revenue this year, including the restarted next-generation COVID vaccine trial that resumed activity in quarter two and is actively dosing patients. We remain confident in the prudent approach we took in setting our full-year outlook in April and have kept our assumptions consistent regarding macro conditions through the balance of the year. These factors result in our revised guidance range increasing by $100 million at the low end to $7.85 billion and the high end of the range remaining unchanged at $8.15 billion, increasing the midpoint to $8 billion. Given the expected range to our full-year revenue is largely related to increased pass-through revenue, we are maintaining the midpoint of our adjusted earnings per share guidance range at $13.50. While we were pleased to see progress across financial and bookings metrics in quarter two, I also want to highlight developments in key operational areas in our broader business. Our customer and site satisfaction scores have shown positive momentum, driven by accelerated site activation, patient recruitment, and trial completion. In addition, we continue to focus on further investments to strengthen our offering and expertise, where we can develop distinct advantages to our customers through delivery of novel solutions. One of these areas has been to advance our capabilities in key therapeutic areas that have been growing rapidly in the market, such as obesity and related metabolic diseases. ICON launched its Center for Obesity this year, a purpose-built network of over 100 US sites that will ultimately have access to over 10,000 pre-screened potential patients in this key disease area. Our strategic approach streamlines startup activities such as contracting, site training, and documentation harmonization, leading to targeted site activation in 30 days or less. In addition, 85% of these sites operate on the same integrated technology platform, allowing for improved efficiencies in processes across enrollment and recruitment, as well as in real-time monitoring. Separately, our digital innovation strategy continues to produce meaningful applied advances across our business. Our AI Center of Excellence and operational teams collaborate to identify processes and opportunities to develop AI-enabled tools to enhance our delivery of services. Our latest development centers on protocol digitization, a process to extract information from a trial protocol and then set up standard documentation and system specifications before the trial begins, which is currently highly manual in nature. This AI agent, which is now utilized in the laboratory setting, intelligently reads protocol data, identifies the relevant tests, and auto-populates data to create the study deliverables. This is enabling ICON to achieve upper-quartile performance metrics for our sponsors, allowing significantly reduced study startup times and improved overall project timelines, as well as overall quality. This is a tangible example of how we are adopting AI to evolve our offering in a way that is considered practical and, most importantly, driving efficiency in the overall clinical trial process for our customers. Our financial position remains very strong, and we continue to be disciplined in our approach to capital deployment. In quarter two, we again repurchased $250 million in shares, and our board also approved a new share repurchase authorization for up to $1 billion, an increase of $500 million from what was remaining on our prior authorization. We remain active in evaluating potential acquisition opportunities that will enhance our offering, alongside continued internal investment in areas that will help fuel our growth, such as key technology platforms and tools, capabilities in our labs, and other services. As the leading provider of clinical development services in the industry, it is incumbent upon us to continue to innovate and evolve our offering to meet the needs of our customers, and our strong financial position affords us the ability to continue to invest in key strategic growth areas while also returning capital to shareholders. June marked the 35th anniversary of ICON's founding in Dublin, Ireland. We have evolved significantly as an organization since that time, growing from a team of 5 to 40,000 individuals. I'd like to thank the employees of ICON that have joined us on this path that was set out in 1990 to be the global leader in clinical development for their hard work and ongoing commitment to the customers we serve. I'll now hand it over to Nigel for a review of our financial results. Nigel. Thanks, Steve. Revenue in quarter two was $2.017 billion, representing a year-on-year decrease of 4.8%. Revenue was up approximately 1% sequentially on quarter one 2025. Overall, customer concentration in our top 25 customers was aligned with quarter one 2025. Our top five customers represented 25% of revenue in the quarter. Our top 10 represented 39.7%, while our top 25 represented 65.6%. Adjusted gross margin for the quarter was 28.3%, compared to 29.9% in quarter two 2024 and up 10 basis points on quarter one 2025. Adjusted SG&A expense was $174.8 million in quarter two, or 8.7% of revenue. Relative to the comparative period last year, adjusted SG&A was down by $8.6 million in quarter two. Adjusted EBITDA was $396 million for the quarter, an increase of $5.4 million sequentially. Adjusted EBITDA margin increased 10 basis points over quarter one 2025 to 19.6% of revenue. Adjusted operating income for quarter two was $357.4 million, while adjusted net interest expense was $46.6 million. The effective tax rate was 16.5% for the quarter. We continue to expect the full year 2025 adjusted effective tax rate to be approximately 16.5%. Adjusted net income for the quarter was $259.5 million, equating to adjusted earnings per share of $3.26, a decrease of 13.1% year-over-year, or an increase of 2.2% on quarter one 2025. US GAAP income from operations amounted to $209.2 million, or 10.4% of quarter two revenue. US GAAP net income in quarter two was $183 million, or $2.30 per diluted share, compared to $1.76 per share for the equivalent prior year period, an increase of 30.7%. From a cash perspective, quarter two had cash from operating activities coming in at $146.2 million and free cash flow of $113.9 million. While overall cash collections were solid in quarter two, our free cash flow was lower than quarter one, reflecting the timing of interest and tax payments, as well as restructuring expenses. At June 30, 2025, cash totaled $390.4 million and debt totaled $3.4 billion, leaving a net debt position of $3.0 billion. This was broadly in line with net debt at March 31, 2025, of $2.9 billion. We ended the quarter with a leverage ratio of 1.9 times net debt to adjusted trailing 12-month EBITDA. Our balance sheet position remains very strong, and we continue to execute our disciplined capital deployment strategy. We are focused on an approach to deployment that balances further investment in strengthening our business while also returning capital to shareholders. We made significant share repurchases in quarter two, totaling $250 million at an average price of $146 per share. We plan to remain active in buying back shares in the near term, with our total current authorization now expanded to $1 billion. With that, we'll now open it up for questions. Thank you. If you'd like to ask a question, you will need to 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. We would please ask that you do limit your questions to one question per caller. Thank you. We will take our first question, which is from the line of Elizabeth Anderson from Evercore ISI. Please go ahead. Hi, guys. Thanks so much for the question, and congrats on a really nice quarter. I was wondering if you could give us a little bit more detail, Steve, maybe about what you're seeing in terms of different market segments, maybe sort of biotech versus pharma, or if there's any sort of difference in terms of demand inflection that you're seeing by phase. Thank you very much. Sure, Elizabeth. Things haven't changed dramatically over the last few months since our first quarter call. The environment is pretty much the same. Certainly, from an RFP basis, we've seen a modest uptick sort of in the mid-single-digit range. That's probably been more in the biotech segment than it has been in the large pharma segment. We've certainly seen some positives in that respect in terms of our early phase business and our phase three business. Those areas are looking positive. We're also pleased within the wins that we've won. We've been able to start to really leverage the partnerships that we've been able to secure over the last 18 months or two years. The team's done a nice job in bringing those partnerships on and not just winning initial projects, but expanding within those partnerships. Overall, we see a reasonably constructive development sort of environment, if you like, across the business. Probably a little bit more in biotech than in large pharma. We tend to look at these things on a trailing 12-month basis rather than a quarter basis. Within the quarter, there's still a fair bit of volatility. Things go up and down. On a trailing 12-month basis, it looks positive. Thank you. Next question is from Michael Cherny, Leerink Partners. Please go ahead. Good morning, and thanks for taking the question. Maybe if I can just dive, Steve, a little bit more into that biotech comment. You're not the only CRO that's talked about biotech improvements over the course of the quarter. This seems to fly somewhat in the face of the general biotech funding environment. I appreciate the cautious optimism here, but what do you think is getting more awards over the finish line in terms of what drove the better bookings performance? How do you think that factors into the current funding environment in terms of bookings wins to bookings conversion? Yeah, Michael, we do not want to get too far ahead of ourselves on the positive biotechs. As I said, that is on a trailing 12-month basis. Within the quarters and across the quarters, it has been a little bit more volatile, and we still continue to see caution in terms of decision-making times, etc., etc. I mean, overall, it does seem to be moving in the right direction. Three of the top four awards that we had during the quarter were in the biotech segment. We were pleased with our performance in terms of winning some fairly substantial biotech projects, as I said, three of the top four. Notwithstanding that, as I said, the large pharma are also starting to contribute with those expansions on the partnership side of things. There is a little bit of a, perhaps, a confluence, if you like, or a. It is not quite lining up, I suppose, where you see with the biotech funding. I suspect there is probably a bit of a lag here, and we are seeing that there is some positivity starting to come through that we are encouraged about. We are certainly not declaring victory just at this point, and we wait to continue that biotech progress. Thank you. Next question is from Patrick Donnelly from Citi. Please go ahead. Hey, guys. Thank you for taking the questions. Steve, maybe another one on just the booking side. Nice to see the results come through there. Did you see things change at all as the quarter progressed? Obviously, again, a few of your peers sounded better as well the last few days. I think it caught people a little bit by surprise. Did things turn as the quarter went? Did you hear any changes from the pharma customers, just given all the noise on tariffs, MFN, etc.? It sounds like, again, biotech maybe was a little bit better. Just curious in terms of breaking that down and how things progressed during the quarter and what that means for the go-forward. Again, do you feel pretty confident that we have turned the corner a little bit here on the cancels and the book-to-bill should continue to trend the right direction? Thank you. Pat, we feel constructive on the environment and moving forward on the environment. But as I say, we don't want to get too far ahead of ourselves. I think our pharma sponsors are probably—they've at least heard all the bad news, and they're probably digesting that bad news and working through it. And it's not all bad news. I mean, there's some positives coming out in terms of opportunities for early review with an FDA. We've seen the reduction in animal testing, which I think will help. The tax, potentially even tax benefits for R&D that's done in the U.S. So it's not a—I think our customers are sort of looking at it, seeing that it's starting to settle down a little bit. And hence, their plans and their spending plans, notwithstanding the patent cliffs that they need to confront, are also looming, and they need to make those decisions. I think things are starting to move forward. But it's still a sort of somewhat volatile and uncertain environment that we're working in. We were very encouraged by the gross bookings. That 10% improvement over the previous quarter was something I was really pleased about. The team was very pleased about it. We did a good job on. But it remains to be seen as to whether those opportunities—I mean, we certainly have opportunities in the pipeline. No question about that. Some actionable, good actionable opportunities. We need to continue that. Obviously, I've mentioned the cancellations will continue to be elevated, certainly in the very short term. And so we've got to manage that through. But we see a constructive environment, albeit, I don't think we're quite through everything just yet. Thank you. Next question is from the line of David Windley from Jefferies. Please go ahead. Hi. Good morning. Good afternoon. Thanks for taking my question. My question is focused on your partnerships, and it's multi-partner, as you might imagine or anticipate. You talked about progress in those partnerships. I think in some meetings that we had with you, with Barry in particular, there was some discussion about one of those recent partnerships being somewhat expanded or restructured to give you access to more of that customer's wallet. I wondered if you could maybe talk about that a little bit and what expanded opportunity and if you've already seen benefit from that. A second point here was, or the second part of the question is that I think your strategy has been to also replicate the success that you've had in kind of top 25-focused partnerships and pursue some of that same type of structure down market. I wondered what progress or what opportunity you see there. Thank you. Sure. Maybe I'll let it crack at the first part, Dave, and then Barry might jump in specifically on when we've made some progress in the top 25 or so. It is a—let's be honest. It remains and probably has intensified. The competitive nature of the business has probably intensified a little bit over the last, I'd say, three to six months. As we get approached by customers to look at partnerships and even rejig partnerships and get better ourselves, our approach of being the scale operation that we are is we look to do more of their work. That's been—we've been able to help them on efficiencies in exchange for getting the greatest share of their wallet. That's generally been a successful strategy for us, or it continues to be a strategy we're pursuing. As I say, as one of the larger players, I believe we have an advantage in that space in that we cover all of the areas that they want to outsource, and we cover all the areas that they develop. That's been working well for us. We've also been pushing that down more into the mid-size companies as well. I think some of our recent partnerships have really been in that area of the business. Again, we're saying, while they don't have quite the volume of spend that the larger pharmas have, they are customers, and they are companies that do have a significant amount of work, and we can engage them right across the business. I'll let Barry, perhaps, jump in on any sort of specifics on that front. Yeah, Dave, on the first part of your question, I guess I'm slow to comment too much on any one partnership, but I can certainly think of an example where we were brought into a partnership where the full-service component of that relationship was significantly smaller, that being the component we had access to, than the FSP component, which we were not at that stage partnered on. Since coming in, the customer has decided to pivot much more heavily towards that blended full-service model that we're party to, which gives us some cause for optimism as we continue to progress that relationship. I think your second point is also well-made. We have had encouraging success in recent times about broadening the partnership base across the top 25. Really, we look at those partnerships between maybe 20 and 60, or those companies between 20 and 60, as a zone of some opportunity. We continue not just to add customers in that domain, but also to broaden these out from more transactional relationships to deeper opportunities where you have more qualified RFP flow and perhaps a deeper engagement with that customer. Yes, that is the plan, not just to see a broader base of RFP flow outside the top 20, but to develop more of what I'll call portfolio relationships in that segment and continue to build on that. That remains the strategy, and I'm encouraged by the progress. Thank you. Next question is from Justin Bowers, Deutsche Bank. Please go ahead. Hi, good afternoon, and good morning, everyone. Steven Barry, can you help us understand some of the new opportunities that you're seeing in your funnel and your pipeline? It seems like RFP growth has been pretty solid over the last few quarters. Is that across the board, large pharma-related, biotech-related? What do we need to see in industry for that to start to convert and monetize into bookings? Yeah, Justin, I mean, there's a couple of aspects of that. Therapeutically, oncology continues to be the main sort of bulwark, if you like, of our backlog and our new wins. We're an effective oncology shop, and we have a very good unit both in biotech and in the large pharma space. I'd say that's an area. We've certainly seen an uptick in the metabolism, cardiovascular. We call it cardiovascular and metabolism. That's really, I think, around the obesity. MASH, NASH, call it what you like, indication. That's an area that we've seen tick up as well. I think those are probably the two sort of main movers, if you like. The COVID vaccine work remains at about 1%-2% of our backlog and about our revenue. We haven't seen much of an uptick in that one, although, of course, as we've talked about that study moving ahead. In terms of phases, as I mentioned in my remarks, early phase has moved forward nicely. We also see phase three moving forward. It's a little bit of customers focusing their attention, obviously, on their phase three assets and moving them to market. That makes a lot of sense. Also, they're not forgetting about moving some of their early assets through as well. I'm encouraged by the long-term opportunity that presents as well. Overall, we're, as I say, constructive on the market. It hasn't changed dramatically, but we certainly see some nice progress over the last quarter or so. Thank you. Next question is from Jack Meehan from Nephron Research. Please go ahead. Thank you. Hello, everyone. I think everybody's trying to take in the early results from some of the CROs and feel like we only have a piece of the aperture here with the bigger guys reporting. Steve, I was wondering if you could comment on what you think is happening in terms of share dynamics in the industry. Just any color on what you're seeing in terms of win rate would be helpful. Yeah, Jack, it's always hard to get too specific about share dynamics. Yeah, I was very pleased with our gross wins. As I said, we're fairly broad-based in those wins across the customer segments that we service. That was a pleasing aspect of it. I sense that we are being successful in moving our market share forward, but it's hard to be too quantitative on that. It's something that we try to monitor as much as we can, but the market data that we have is variable and somewhat volatile, to be honest with you. We're certainly seeing progress in the biotech segment. Our FSP business continues to grow. We've made nice progress in our early phase business. Our lab business has grown in the teens. There's a lot of nice aspects of our business, businesses that are moving forward and reflecting, I think, in areas that do indicate that we are gaining share, not just in the functional business, but also in the full-service business and in the periclinical sides of our business: labs, early phase imaging, etc., etc. Overall, as I say, constructive, but we're not getting too far ahead of ourselves. Thank you. Next question is from Eric Coldwell from Baird. Please go ahead. I'm going to have to dial star one a lot sooner next time. I think I've rewritten my question list eight times in a row now. I'll ask a clarification and then maybe try to wing a bigger topic. On the clarification, Steve, you've talked a couple of times about the cancels remaining elevated short term. If we've done the math right, it looks like, excluding the bar to cancel, you were probably around that 2.5% of backlog that has historically marked the higher end of a range for you. Are you saying more of that zip code, or are you actually signaling something higher than that? I think what we're saying, Eric, is that the current level of cancellations we would expect is likely to sort of continue in that sort of ballpark in the near term. That's the way we're looking at it. I hope that clarifies your question. I think we were at $916 million. I think that was the sort of number from a cancellation number. We would expect a broadly similar number in the next quarter in the near term before we would see or anticipate some attenuation of that, Q4 and perhaps into Q4. Yeah, the market and the environment continues to be volatile and continues to be a little uncertain. We're not declaring victory on the cancellations back to what had been historical norms just at this point. As I say, in the near term, we're expecting to see still some fairly significant cancellations. Thank you. Can you open up? There was a backup question, I think, Eric. We'll cut him a break, I think, because he was pushing staff. Yeah, sorry. No, sorry about that. Thank you. Yeah, just, I guess, more big picture here. We've had you and several of your peers have highlighted a trend towards higher pass-through indirect revenue in the moment. It seems like most are suggesting that it has to do with mix changes, at least in some cases, mix changes. Is there something more? Is there something broader coming in, a different twist or dynamic? Either clients are asking you to do more on the pass-throughs, or somehow we're seeing study site inflation or some other form of inflation really kicking in again? Is it just some oddity in the timing in the moment of when things are hitting and you're recognizing these pass-throughs? It does seem to be a bit of an industry-wide mantra right now that some of the bookings and some of the revenue growth increases have been skewed much more to indirect revenue than perhaps we've seen here in recent quarters. Yeah. I mean, it's a question we ask ourselves a lot as well, Eric, to be honest with you. There are various reasons for it. I'll let Barry have a crack at that one. I think you nailed it in the question, Eric. I think this is overwhelmingly a business mix trend that you're seeing. Steve already talked about the uptick in cardiometabolic opportunity flow and indeed revenue flow over the course of the last year. I think that's a significant contributor. I don't think there's anything below the line that we've seen that would speak to other trends. You get lots of calls. Yeah, I'm sure rates are up about a period of time. The number one driver here, as I would see it, and I think as we have observed it in our own numbers, is that this is driven by the therapeutic mix primarily of the studies that we're running. Thank you. Next question is from Jalendra Singh from Truist Securities. Please go ahead. Thank you. Thanks for taking my questions. Now, if this makes Eric feel better, he just stole my pass-through question. Anyway, I want to actually switch to my other question about getting your updated thoughts on the pricing environment a little bit more. What exactly are you seeing in large pharma and EBP? Some of your peers have talked about getting a little bit more open to taking a little bit more pricing concession. Just curious if you can share your thoughts on the pricing environment in both EBP and large pharma. Sure. Again, I'll have a crack at it. Then Barry might jump in, Jalendra. I think, as I said in my prepared remarks, we are seeing probably a more intense pricing environment going forward. Our customers, as we've talked about, are going through how they're dealing with the patent cliffs, and they're expecting more and more value. We are in a very competitive environment. We talk about typically it's a competitive environment. It's always competitive. It's probably intensified a little bit more, I think, more recently. We believe we have some good opportunities to gain market share. I'll let Barry talk perhaps a little bit about how we're competing in that environment. Yeah, I think Steve's right. I think while it's always been competitive, it perhaps has notched up a little bit, as you might imagine. I guess the first thing to say is I don't know anybody who thinks that drug development wouldn't benefit from greater cost efficiency. We see it as our role to create value through reducing the cost of clinical development. While all competitive advantage is time-bound, where we identify competitive advantage through our technologies, through our strategies, through our superior execution, and we're able to bring a competitive price point versus the competition, we're going to do that. We're very happy to do that. On the other side, we also see value in volume and where significant opportunities come across. We're happy to get assertive to make sure we win that incumbency in the large pharma, as we've talked about, and continue to build a broader base in the biotech community. I think on both of those metrics, it's fair to say it's pretty competitive out there, and maybe it's touched up on where it was before. For us, the key remains: can we bring higher confidence in the time, the cost, and the predictability of trial execution plans to our customers? We still see that as probably the number one metric, notwithstanding perhaps a slight uptick in the competitiveness angle, Jalendra. Thank you. Next question is from Luke Sergott from Barclays. Please go ahead. Awesome. Great. Thank you. At risk of just diarrhea of the mouth, I just want to figure this out. You have a big step up in bookings. You have a big step up in revenue. We've seen it across all the other ones. This kind of came out of nowhere, and every company is talking about this coming from biotech despite lack of funding data. All the data and channel checks to the contrary. Everybody's talking about metabolic and faster burning, higher pass-through trials. Is there a risk here that there's just an air pocket that could be coming from you get some big bolus of a couple of quarters of these big metabolic trials, and then they're a lot faster burning, shorter duration, etc.? That's the first part. The second part is, I mean, just metabolic coming on or just from a recent M&A doesn't really add up to the massive step up we've seen across the board. Just trying to foot the bill with what's been going on in general, because out of one Q, nobody really sounded positive on the demand environment. Yeah. I mean. Yeah. I hesitate to be your therapist, Luke, but let me have a crack at it. No one better. Let me have a crack at it. A little better than you get. Yeah. Just drop down to the sort of therapeutic area. We do see the metabolic, the obesity side of things being an ongoing and a long-term trend that is going to fuel us and our portfolio, our backlog for some time to come. I mean, this is a huge—you all know—it's a huge market. There are lots of opportunities for improving those drugs, whether it be how they're administered or the side effect profile or whatever. They are going to need to be large-scale trials that are, in the scheme of things, relatively easy to recruit. I don't think it's easy, but relatively, compared to your difficult oncology trial, they should burn faster. They should be larger. We think there's a long and a significant opportunity there for us, and hence our obesity center of excellence that I talked about. It's not just, though, in the metabolic area. You look at things like MASH, as they call it now, rather than NASH. That's an area that we're seeing a lot of activity in. A lot of companies doing a lot of work in, a lot of progress being made in there. Oncology continues to be a driver. Even in the CVT space, cardiovascular space, we're seeing some significant opportunities as well. Therapeutically, there are, I think, a number of areas. The whole medical science thing and then bringing new drugs to market hasn't gone away. There's still a huge area of unmet medical need and a lot of very important therapeutic areas that I think we can help to address. I don't think it's an air pocket. I think, as I've said a number of times, it is a somewhat volatile environment. As you say, the biotech funding doesn't really support necessarily the talk, what we're seeing here. I think that may be a little bit in the lag. I think we're seeing some companies get funded that do have some good science. We're able to access those companies. Our win rate within that segment is improving. We feel good about what we're offering in that segment now. Certainly, our win rate in the large pharma segment continues to be very strong. As I said, we're leveraging the partnerships in that large pharma segment. Overall, I'll say it again. We feel constructive without feeling over the top on where this is going. Could there be a little bit of a slope? Yeah, there could be. No question. There could be. I'm not sure we're quite out of the woods yet, as they say. We're happy to have had a decent quarter, particularly from a gross bookings point of view. We feel we can continue that. The material is in the pipeline in the sausage machine to make these sort of numbers to continue. As I said, notwithstanding some continued elevation on cancels, we still see some optimism. As we move into the back end of the year. Do you want to add to that? No, I think you covered it. It might have been Patrick earlier on who asked about whether there was a pivot point during the quarter. I do not think there was. I suppose what is harder to convey than just the opportunity flow is a more qualitative assessment of what is coming through. I think Steve, you just alluded to it. We were pretty satisfied as we moved through the quarter that there were some attractive opportunities that were transactable. As we came out of Q2 into Q3, nobody is seeing a couple of swallows and declaring a permanent summer. We do feel like qualitatively, there are some encouraging observations there. This is not a straight-line industry. Things can move relatively quickly. Conservatively optimistic with the signs that we are seeing, I think, is a fair summation. Thank you. Next question is from Max Smock from William Blair. Please go ahead. Hey, good morning. Good afternoon. Thanks for taking our questions. Just a quick one here for Nigel. On the burn rate, it seems like the midpoint of the guide implies about a 20 basis point step down in the second half of this year, even though you've kicked off that faster-burning COVID trial. Is that just conservatism, or is there something else that we should kind of be thinking about that's driving that implied step down? Thank you. Yeah, Max. Look, I think our view on the burn rate fundamentally is it'll be broadly stable through the course of the year. That is what's built into the guide. It was what we had assumed back in April. And as Steve mentioned earlier, fundamentally, our underlying assumptions in terms of the backdrop remains the same. So we'd still expect book to bills at roughly the same level through the rest of the year. And within that as well, then the burn rate being broadly consistent as well. The setup on the revenue guide, again, is fundamentally really driven by the increased pass-throughs that we're seeing. So look, let's see where we end up ultimately in terms of the end of the year. But at this point, we expect burn rate to be broadly stable over the balance of the year and somewhere around 8% for the full year. Thank you. Next question is from Charles Rye from TD Cowen. Please go ahead. Yeah. Thanks for taking the question. Maybe if I could just add some clarifications just from some of the stuff earlier. Steve, I think you said that for next quarter, you're expecting sort of cancellations to be similar to this quarter, around $900-and-something million. But this quarter included the $300 million cancellation of the COVID trial. So, are we expecting more like $600-something next quarter, or are you seeing a step up? And maybe what does that mean for book-to-bill expectations for next quarter? And then I think last quarter, you gave sort of a breakdown of FX impact, sort of the COVID trial impact. Maybe for Nigel, if you can give us a sense for either this quarter as well as sort of those components in the rev guide. Thanks. Okay. Charles, let me be clear on the cancels. We're expecting to see a number in the same sort of postcode as what we saw this quarter. The fact that we did call out the Barter cancel earlier, and you were aware of that, that doesn't make it exceptional. We have some cancels, and we will be putting them into our numbers in the third quarter. The number will be in the same sort of postcode. What it will be, we're only a third of the way through the quarter. We're working on these things. There are some slow, some delays, so it's unclear. Don't think of Barter as an exceptional item, I would say, at this stage. I think certainly for the very near term, that's the expectation. I think as we get into fourth quarter into next year, I think things will normalize. That's our expectation. That remains to be seen and will depend upon the environment becoming a little less volatile, a little less uncertain. Nigel, I'll leave you for the COVID. Yeah, Charles. On the guide change from April to today, FX is really neutral. You'll remember most of that dollar shift that we saw over the last few months had already happened, actually, by the end of April when we came out with the April guidance. There's really no impact in terms of our revenue guidance change from FX. It's fundamentally driven from the uptick in pass-throughs. Maybe just circling back, Max, on the burn rate point, while we do think it'll be broadly 8% for the year as a whole, the pattern between Q3 and Q4 will depend a bit on the pass-through activity, in particular that COVID study. At this point, it's ramping well. It may well be that we see that burn a bit faster in Q3 than in Q4. You might see a slightly better burn rate in the nearer term, Q3 versus Q4. Let's see how that evolves. Hopefully that's helpful, Charles. Actually, Charles, just that I realized I didn't answer your other question around book-to-bill. Our expectation on book-to-bill would be, again, in the same ballpark as what we did this quarter, notwithstanding the, as I say, continued elevation on cancellation. As I said, we have some strong opportunities in the pipeline. We feel very focused. We feel like those opportunities are actionable and real. We feel that a similar-ish book-to-bill is certainly possible. Just to underline that, Charles, yes. Look, we've assumed roughly a 1x book-to-bill over the balance of the year, which does reflect elevated cancels continuing through that period as well. That is reflected in the guide that we've put out. Thank you. Next question is from Casey Woodfring from J.P. Morgan. Please go ahead. Good morning. This is Sebastian Sandler on for Casey. Thanks for taking my question. You called out licensing activity among large pharma in your prepared remarks. In terms of your operations in China, given some of the recent sizable pharma licensing deals with Chinese biotechs we have seen since last quarter, can you just walk us through ICON's role in these types of deals and how you see this dynamic playing out for ICON? Do you think Chinese biotechs will rely primarily on Chinese CROs, or does pharma acquire these assets and run the remaining trials through ICON? Lastly, what percentage of your revenue is coming from China now? I think in the past, you have called out China not being a large part of the business. Just wondering how this has trended in recent times. Thank you. Okay. You've got a couple of questions in there, Sebastian. Let me try to unpick some of that. First of all, let me do the easy ones. Revenue in China, approximately 3%-ish. Low single digits. We have about 1,200 people in China. It's a good operation, one of the best operations we have in the company. Well-staffed, some really good, strong people. We have some good connections with the Chinese biotech industry. There's a lot happening in China, as you all know. I think it's something like a third of the new clinical trial starts globally are happening in China. They're not all happening outside of China, but there's a lot of activity. Certainly, the Chinese government is giving a lot of focus on biotech. We have a number of customers in the U.S. who are accessing portfolios and accessing new compounds and drugs and opportunities and licensing opportunities from Chinese companies. We've been lucky enough to partner with them to develop some of those activities, some of those drugs. We see that as being a nice, albeit more longer-term, medium to longer-term fuel for our business. We certainly see China as being a source of innovation and of new compounds. In the next, again, realistically, medium to long-term, three to five years. This doesn't happen overnight. Certainly, the Chinese are putting a huge amount of focus on their pharmaceutical and biotech industries, helping their companies. Those companies are not using local CROs to do international trials. They certainly use them to do trials within China. That's certainly an area that they have locked down. In terms of doing global trials, trials in the West for registration in Europe and for registration in the U.S., they're turning to organizations like ICON to do those sort of trials. We're very happy to see that. We have those connections. We have a strong business development team in China, which is going to allow us to absolutely make those connections and develop that business. I'm optimistic about China, albeit this is not a short-term thing. This is a more longer-term partnership, if you like, with a country as much as anything else. We certainly see some benefits over the longer term. Thank you. Next question is from Michael Riskin from Bank of America. Please go ahead. Great. Thanks for taking the question. I'll do. I do. I got one big one, just a quick clarification. On the clarification, you talked about competitive environment and sort of how you see that evolving. If you could just expand on that a little bit in terms of where you're seeing the most competition in terms of who you're running into the most. Is it the big three where you're seeing a little more competition, or maybe some of the more niche players or really the smaller CROs out there, just where you see that environment ramping up in the last three or six months? Or if there's any other way for you to break it down in terms of therapeutic area or customer class. And then the other question I was going to have was on the cost controls you talked about earlier this year that you've implemented. Because obviously, you maintained your EPS numbers and some of your margin color on cost. If you could unupdate how that's going and how you think about leveraging the cost out of the business as you go through the rest of the year, if you do see some of the improvements in bookings continue. Thanks. Okay, Mike. I'll take the second part of the question and Barry might talk about the competitive environment, what he's seeing in the large pharma and the biotech space. Certainly, on cost controls, we've made good progress, and we continue to make good progress. I think we have a reputation in the industry as being pretty good cost managers, and the team's done an excellent job in looking at that and in working that through. We've reduced our SG&A, some of our $9 million year on year. We continue to focus on that. The AI that I talked about, the technology, the bots that we've been deploying in doing the more routine sort of work has been very effective for us and continues to drive down our overall SG&A costs and ultimately improves our efficiency, as Barry alluded to, that being a very important component of us being actively competitive on the pricing side of things with our larger customers and with the biotech customers for that matter. Certainly, in the partnerships, that gives us an opportunity to compete actively, and we're doing that very effectively. I'm really pleased with the way we're managing our costs. We have more to do, and it's an ongoing challenge for us. Whether we do it through where we're optimizing our labor force, effectively supporting our labor force and our employees with new technology and AI, it's all grit for the mill, and it's something that we take very seriously. Barry, you want to talk about the competitive environment? Yeah. The two, honestly, are linked. I mean, the teams really have done an excellent job of executing with efficiency over the course of the year, productivity and utilization on a broad basis right across the company on a year-over-year basis. That does not just help us with cost controls. That also helps us to get these studies delivered for customers. On the competitive environment, I guess we are still ICON. We are happy to compete with anybody, and by and large, we do. Particularly in the pharma space, I think you are probably in the right neighborhood. These are large, global, diverse partnerships across broad portfolios of different therapeutic modalities. We do tend to run into the more established players more and more. I guess it is a harder market for others to compete in. That is somewhat more diversified in the biotech space, particularly at the earlier phase biotech end of the market. As I say, some of the larger biotechs pushing into the mid-size space, they start to become more like portfolio accounts with multiple studies, governance and oversight layers, etc. Probably a slightly different dynamic across those two market segments, but with a bias towards larger, more global, and more diversified competitors. Thank you. We have one more question, and this is from Rob Cottrell from Cleveland Research. Please go ahead. Hi, good morning. Thanks for taking our questions. Just in terms of the medium-term revenue and booking outlook, you talk about elevated near-term pass-throughs, but also increased price intensity. Are those offsetting factors, or does one outweigh the other in terms of future bookings? And then can you remind us how these kind of pass-throughs are flowing through to the quarterly booking and backlog numbers for TUCU? Sorry, Rob, we did not catch—we are just so on mute, Rob. We are catching some feedback from you, but I do not think we got the second part of that question, unfortunately. Do you want to take the first part in terms of the medium-term pass-through? Do you want to just repeat the question, Rob? We kind of got a little bit distracted with the feedback. Can you? Yeah. Can you hear me now? Is that better? Yeah. All right. Great. Thank you. I guess first was just on how we should pair the comments around higher near-term pass-throughs but increased price competition. Do those two offset each other, or does one outweigh the other, positive or negative? The second question was how to treat the near-term elevated pass-throughs in terms of bookings and backlog for the second quarter. Yeah. Maybe I'll do the first one. And maybe Nigel might jump in or Barry on the second one. Certainly, offsetting between higher pass-throughs and price competition, I don't really see it as an offset. I mean, price competition is what it is, and it tends to be around the direct fee, so our margin-producing revenue, whereas pass-throughs don't have any margin in them, and they tend to be what they are what they are. I mean, customers don't necessarily ask us to reduce on those. The fact that they go up, and we talked about that from a therapeutic point of view, whether they be around vaccine studies or metabolism studies, obesity. It helps us on the top line, but certainly doesn't produce any margin for us. And so I don't really see them as offsetting. Price competition tends to be around those direct fees. I hope that gives you some sort of flavor for how we consider that. Price competition, as I say, that will potentially hurt our margin. But as Barry talked about earlier in the call, we have some pretty creative and innovative ways of being able to deliver these studies in a way that doesn't impact our margins as much. And so we can be competitive on price without sacrificing too much on margin. That's the way we try to do it, and the team's been very successful in that so far. Do you want to talk about pass-throughs? Yeah, sure. And Rob. On bookings, pass-throughs are just part of the growth wins, basically. The study award is both direct fee and pass-through. It is not a particular factor there other than, obviously, the comments around just pass-throughs generally being an increasing proportion of what we are seeing. That is all I would say on that. We obviously talked about elevated cancels in Q2 and the likelihood of those continuing as being the other factor in terms of the overall book-to-bill number. I would not call out anything particular on pass-throughs in terms of that pattern into the future. We were more commenting on it in relation to the change in the revenue guide from April to now being driven by the higher pass-through pattern we are seeing currently in revenue. Thank you. There are no further questions, so I will hand back to the speakers for any closing comments. Thank you, Operator. As we navigate current conditions, we're pleased with the progress we made in quarter two and remain focused on capitalizing on the opportunities we have in front of us. We thank you all for joining the call and for your support of ICON. Good afternoon. Thank you. This concludes today's conference call. Thank you for participating, and you may now disconnect.