All right. Good morning, everyone. Thanks for joining us today. I'm Tejas Savant. I cover the life sciences here at Morgan Stanley. Before we begin, important disclosures, please see the Morgan Stanley Research Disclosure website at morganstanley.com/researchdisclosures, and if you have any questions, do reach out to your sales rep, so it's my pleasure this morning to host IQVIA, and speaking on behalf of the company, we have CFO Ron Bruehlman. Thank you so much for joining us, Ron. Sure. Just to set the stage, could you outline what you think are the company's key accomplishments this year? It's been a, you know, decidedly mixed macro backdrop. What are you particularly proud of, and is there anything you wish you'd done differently? Well, look, it is a bit of a choppy background, and in light of that, I think we're pleased with our performance, and we've largely done what we said we were gonna do coming in. We started the year a little bit weak in the TAS segment, and we had the kind of hangover of the reduction in pharma discretionary spend coming into the year. But what we had said all along is we're gonna see kind of a mirror image of the growth that we saw last year, which is last year it was coming down as we went through the year in the discretionary parts of TAS. This year, it's coming back up, and I think there was some skepticism among people that we'd get the recovery, and we're still in the midst of the recovery, but we're very confident it's gonna happen, that, you know, what we signaled for, for the balance of the year, guidance is gonna happen in the TAS business, so we're pleased with that. We are seeing the business come back. Now, R&DS has been strong all along, and I know there's been questions about the industry there, and I'm sure we'll get into some of that, but if you look at, you know, how we've done in terms of book-to-bill as we've gone through the year, our backlog exiting the second quarter, you know, up 8%, our next twelve months revenue up 7%. We have strong pipeline, strong RFP flow, all of that feels good. So, we're pleased with the continued, very steady, solid performance of the R&DS segment. And, you know, another thing that this year that we're happy about is our cash flow has been good. You know, we always get pressure from our customers on payment terms. That's just part of the industry if you're a supplier to large pharma in particular, but our cash flow has been strong. We've been judicious in our capital spending, which has helped as well, in addition to having good effort on collection. So, you know, overall... You know, this isn't so much an accomplishment, but just an observation that interest expense has leveled out now, and going forward, knock on wood, with rate reduction, should be coming down. Our depreciation and amortization has leveled out, so we're getting a recovery in our earnings per share now. I think if you look at the midpoint of our guidance for the full year, it rounds to 10%. We took one year off from doing double-digit earnings growth. That was last year, due to the big increase we had in interest expense, and we're back on the double-digit earnings per share growth track. So all of those would be things I'm happy about. No regrets to speak of. Fair enough. So that's actually a good segue into, you know, what you just referred to, right? On the R&D solution side, one of the large, you know, preclinical CROs out there called out, you know, a sudden and sort of profound deterioration in business from the large pharma customer base on sounded like IRA and patent cliff concerns. And they also called out a more metered recovery in biotech as well. Now, obviously, IQVIA has, you know, a long cycle business on the R&D side, which protects you from any near-term swings from, you know, changes in the demand environment. But are you seeing that sort of bubble up in your customer conversations or perhaps in RFPs in July or August? Well, we've made a practice of not talking about, you know, activity intraquarter, and I think it's particularly important not to do that in the third quarter because of the vacation schedules. It tends to be a back-end loaded quarter. But, you know, I'll make the... I'll reiterate what we saw coming through the second quarter, where we had a strong RFP flow, a good pipeline there. We didn't see any deterioration in the environment. Now, that being said, we have seen, pharma, certain pharma customers, take a look at their pipelines, reprioritize, what they want to do in light of IRA, and we have, you know, seen some changes there, but they haven't been dramatic for us, in any regard. Now, I would say on the emerging biopharma side of things, we actually, as you all saw, had a very strong first half of funding. In fact, the funding for emerging biopharma at about $70 billion was as much in the first half of this year as we saw all of last year, which was a decent year, which had growth over the year before. So, no, we don't have special concerns about emerging biopharma. That continues to be a growth area for us. Got it. Just to, you know, dig deeper a little bit on some of those comments you made, what exactly are pharma companies doing differently on the back of the IRA? Is it just sort of a degree of conservatism? Is it, you know, prioritizing different things or perhaps going after larger indications first that leads to some near-term disruption in the work that a CRO would do with these companies? Look, a lot of our pharma customers are still sorting through this because the IRA is particularly complicated, and the full implications won't be understood until it's really in effect for a while. But what we have seen to some extent is what we would expect, which is that whenever there's pricing pressure in the industry, you're gonna see some of the more marginal prospects for going to research be called off the list. You know, on the other hand, under the IRA, if you have a drug that has the potential to have sales for multiple indications, you really want to... Your incentive is to get to run the clinical trials for multiple indications more or less simultaneously and bring them all to market quickly, rather than doing it sequentially because of the way that the period of pricing protection works. It's by molecule and not by indication. So we could see some things working in the other direction. Certainly, there's been. I mean, I think our customers are looking at large molecule drugs more favorably than small molecules. You have an extended period of pricing protection on those, and that, to some extent, would favor EBP, but obviously, large pharma is involved in the large molecule as well. So there are a lot of nuances to the IRA that are gonna play out over time. You know, net-net, you'd say, "Look, it's not great for the industry to have something that undercuts pricing." But what we've found is our pharma customers are pretty adaptable, and they're gonna wanna continue funding research for promising drugs. And in fact, if you look at the first six months of this year, look at large pharma, R&D spending was up 4.5%. So that is indicative, and it was, you know, up as percentage of revenue as well. So that isn't indicative of a you know, tectonic shift in the industry because of IRA. Got it. Fair enough. I think on the second quarter, I mean, while demand in R&D was really good, you did call out sort of cancellations being a little bit more elevated versus you know the typical amount. One of the smaller you know biotech CROs called out an uptick in their cancellations last week as well, we heard. How long do you think it may take until sort of these cancellation or perhaps reprioritization dynamics to stabilize? You know, the first off, on the cancellation that we called out, it was one particularly large trial that was canceled. You know, we get cancellations that fluctuate. I mean, every quarter, we'd say we average $500 million in cancellations, and you might have some quarters where it's $300 million, some quarters where it's $700 million. We typically try not to talk about it because it's just a normal part of the clinical trial business. The two exceptions that we called out were two large trials, one a few years ago and one most recently, that were canceled and were big enough to have, you know, a noticeable impact on our book-to-bill, and we knew you'd be concerned about it, so we wanted to point that out, and these weren't for reasons of reprioritization. It was just due to the data that, you know, the drug not performing as would've been hoped in the trial. So, you know, it's. I wouldn't say that there's any particular concerns on cancellations as that goes. And, you know, how long is it gonna take for all the impacts of IRA to work their way through? That's a bit of a guess at this point. It still hasn't happened fully yet. We're gonna have to see going forward. Got it. I wanna ask on pricing dynamics, you called out a couple of smaller players being less disciplined in recent quarters in pricing. Can you just elaborate on that a little bit? And how are, you know, larger CROs responding to it? Do you see this sort of accelerating into next year if pharma budgets remain pressured? The industry is kind of, the CRO industry is kind of bifurcated or trifurcated, if you will. You have three big players, then you have some more other, what I would call large, but not as big players, and then you have a whole bunch of smaller players. And what we found is, that, you know, there has been some pricing pressure, particularly among some of the mid-sized players and the FSP area, and, so FSP margins have been getting squeezed in certain instances. We haven't seen that happening really in the full service area. And if you look at our overall margins, they've actually held up well. We went back and, you know, recently looked at our book margin trends, and there really hasn't been any movement in our book margins, nor has there been any movement overall, nor has there been any movement in our realized margins. Our realized margins are generally, you know, a hundred to two hundred basis points better than our book margins as we realize efficiencies as we go through the trial. So yeah, I mean, we have in selected instances observed pricing pressure from certain competitors, but overall, it hasn't been a big enough deal to affect our margins. Got it. Now, the mix of your bookings and backlog has been skewing towards studies in oncology and rare disease. Those trials come with slower burn rates due to their complexity. How do you anticipate this metric trending for the broader industry, and are there any implications of that trend for your margins? Sure. We get a lot of questions about burn rates, and I'll make a few points on that. First off, the burn rates have been coming down overall for the industry as we've, you know, put COVID-related trials, which were quick burn, in the rearview mirror, so everybody's experienced that to an extent. We tend to have a little bit lower burn rates on average than the rest of the industry, and I probably should address that because I think there's a bit of an artifact in the data on some of that. Just as an example, real-world evidence trials tend to burn quicker than other trials. You know, phase four burns a little quicker in a lot of cases than phase three and phase two. And our competitors put their real-world evidence business in with their overall clinical trial business. So we get affected some by that because we separate it out and put it in TAS. So there's some differences due to that. We also do a lot of very complicated slower burn trials. We're very strong in oncology and rare diseases, neurology, and so forth. And even for certain of our competitors, the overall burn rate is based on revenue that includes some amount of commercial sales. Our commercial sales, that is post you know drug approval sales, are entirely in TAS, and they're entirely separated. So be a little careful when you're comparing burn rates company to company is the moral there. Now, what are we gonna do going forward? We've been in the low sevens. We'd expect low to mid sevens for the balance of the year. We actually see probably the burn rate picking up some as we go into next year, and this is because we booked some trials with very large passthrough revenues in them a few years back. Passthroughs take a while to start burning, you know, the investigator fees and so forth, and a lot of those start burning next year. So you'll see the burn rate pick up some as we go into next year. So that's another thing. You got to be a little bit careful about reading too much into, you know, quarter-to-quarter and year-to-year burn projections. I know the Street uses it, and I understand why, because it's kind of the way you get to our projected R&DS sales. In our case, it's just an output. We build everything from the bottom up, and the burn rate is whatever it is. So, that's kind of everything I have to say about burn rate. All right. Which is probably more than you needed. Fair enough. Turning to TAS, Ron, you know, you just sort of reiterated your confidence in the ramp that you have baked into the guide on the fourth quarter. Can you just walk us through what drives your confidence there, particularly in light of some of the preclinical CRO comments we just discussed? I mean, obviously, that's short-cycle business, but TAS is also skewed towards discretionary. So, just walk us through what drives your confidence. Yeah, look, TAS is inherently a harder part of the business to predict, at least parts of it, than R&DS. You know, at any given year, like, you start a year in R&DS, 85% of your revenue is already in the backlog. That's not the case with TAS. There are certain things like our information and our technology business, which are very predictable and so very steady. But then you have the analytics and consulting business. I'd say probably about three-quarters of that is, at least in the short term, what we would consider discretionary. And then the real-world evidence business, about 60% of which we would consider discretionary. And those tend to go up and down with, you know, how tight pharma budgets are. But looking backwards, last year was a record year for new drug approvals. There were 55 new drug approvals, and ultimately, pharma's gonna want to do the things they need to do to launch drugs, to get them on formulary, to price them, to track them going forward. There's a lot of work within the first couple of years after a drug introduction is when about half of the post-approval spend is done, the marketing spend is done on the drug. So you know, there's even when things get held up because there's a tightness in budgets, eventually the pendulum swings back. Now, we don't just rely on that. We also have a lot of conversations with our customers. We track the pipeline very carefully. We track decision timelines carefully. They've been coming down quite a bit. I want to say there's been about a 15% improvement in the decision timeline. So all of those things give us a pretty good basis for forecasting the balance of the year. I say pretty good because there's always some variability. You know, you get to the December, and how much of a budget flush are you gonna get, and things like that are always a bit unknown. But we feel good about the forecast for the balance of the year, and we build in appropriate contingencies to make sure we're not, you know, forecasting to the absolute perfect scenario. Got it. How would you characterize the pricing environment in TAS right now in light of the soft, macro trends, Ron? Is this a lever you might have to pull on a little bit harder into year-end and into 'twenty-five to just shore up win rates and get customers over the hump on ordering? Whenever you get a situation where a discretionary spend is soft, and incidentally, one of the reasons I don't think that softness in discretionary spend has much to do with the IRA. My view, it has more to do with kind of the post-COVID hangover that the industry was suffering, and all of a sudden realizing that their SG&A as a percentage of revenue was going up for a lot of firms. Anyway, whenever you have an environment like that, pricing becomes more keen. There's no question about it. You know, we have to be responsive there, at least on the discretionary part of the business, and be a little bit tougher on our pricing. You know, having said that, we anticipate that. We are very aggressive about taking costs out across the business. You look at the midpoint of our guidance. I think we're still looking at overall thirty basis points of margin expansion this year, despite the pricing pressure that we're seeing in parts of our business. So we have to be responsive to what the competition is doing as well. And right now that's a little tougher on the pricing, but that's normal. We face that all the time. Got it. You know, you recently highlighted a number of competitive customer wins for OCE. What are the key features of OCE that customers really value versus, you know, the incumbent solution? And what's been the early feedback you've gotten from your existing customer base and Salesforce's decision to use OCE software for their new Life Sciences Cloud? Yeah, look, on the OCE side, our competitor there talks a lot about how we haven't made inroads. And in fact, wherever we've had head-to-head competitions, we've won the majority of them. And, of course, it's very hard to switch large customers. They captured a large share of the very large pharma customers before we even entered the market. And, getting your entire sales force to switch to a new CRM is a daunting task. Now, they've kind of opened the door by re-platforming on the Vault, and, we've seen a lot more inquiries from customers, because right now you're at a fork in the road. The status quo is no longer an option. Why do people like OCE? Well, one thing is the flexibility. We've been more flexible with our customers about accommodating their needs, and not just having, "Look, this is your software platform. Take it or leave it, you got to work within it." Now, why, you know, what's going on with Salesforce? Well, we knew Salesforce wanted to enter that market. Having a third competitor in that market was gonna be a tough situation, and you know, frankly, they're a premier software company, and we thought by partnering with them, we could do even better, and the interest has been really quite strong from customers. You know, two reasons, like I say, number one, because their customers are at a fork in the road, but also because you now have one of the premier software companies in the world behind the product as well. So we're feeling really good about it. Got it. I want to switch to, you know, the data side of things. You've invested heavily in building up this data lake over the years. Talk to us about why it would take a lot of time and money for others to replicate. And, secondly, I mean, can you provide a few sort of examples of where these AI-enabled solutions are really helping you differentiate, both on the clinical and commercial side of the business? Sure. Two separate but related topics here. On the data side, there is nothing in theory to stop someone from replicating what we have in IQVIA, but in fact, we've been at it since the mid-1950s. We have just an unparalleled database. Just a few numbers, 1.2 billion longitudinal, non-identified patient lives, all linked. We're getting data from electronic medical records, scripts, lab data, claims data. We have over 60 petabytes of data, which is a tremendous amount of data. You know, we have over 100,000 data suppliers. We have over 1 million individual data feeds. All of this takes a tremendously long time to be able to compile, and it takes a lot of expertise, particularly linking this data on an anonymized basis is very, it's very difficult to do. So we feel we have an unparalleled trove of data. Why is this important in AI? Well, as you all likely have heard, you know, the AI models are only as good as the data that you train them on. You know, if you go out and you ask you know the latest versions of ChatGPT very specific questions like you know how many patients adult males in Ohio between 30 and 60 years old, an example we like to use, 30 and 60 years old, are on the top 10 anxiety drugs? You ask ChatGPT that. They'll tell you, "Well, you got to get that data from IQVIA. We don't have that data." It actually says we had an investor come through who looked that up real time as we were saying that, and it mentioned our name. So you need the data to be able to train the AI models. And another thing is we've been using AI for a long time, right? The generative AI is just a kind of a more powerful front-end natural language way using AI than we had in the past, but we've been at this for years and years, so there's nothing new for us there. Look, let me give you a few examples of what we're doing in that area. In the case of R&DS, everything we're doing in terms of identifying sites, identifying patients, relies on AI and relies on going through our databases, and, you know, the vast amounts of data to identify patients, to identify investigators. We're also helping pharma out a lot with protocols because, you know, protocol amendments are a real problem for pharma because you go in with this beautiful list of inclusion, exclusion criteria that gives you a scientifically perfect trial, but then you can't find the patients. So what you really like to do is determine going in, what's not only a scientifically valid set of inclusion and exclusion criteria, but what's a practical set where we can find the patients? And we can help pharma do this, and we've made a lot of inroads there. It's a little slow because it's something that pharma always figured was proprietary. It's like, you know, "Look, that's our business." But we've been able to demonstrate that we can significantly reduce protocol amendments and therefore speed trials. Okay, that's R&DS. Real world is made for AI 'cause real world is looking at vast masses of data and getting and drawing insights from that data. So there are just tons of use examples there. I wouldn't even do it justice just to talk about one. I'll give you one on the TAS side, the Next Best Action, where a sales person is out calling upon healthcare professionals. They go to see one doc, say, "Okay, what's the next doctor that I should call on? Who's the best prospect?" Well, we'll use our AI to be able to make a recommendation there based on a lot of different criteria that might not be intuitive necessarily to the salesperson. So another example, we have the MIDAS Global Database that... where a brand manager can track their drug, how it's doing worldwide. We're the only one in the world that can do that 'cause we only want to have the data across the entire world. And then we now have a natural language front end to that, where our customers can go in and query that data kind of real time and come back with much quicker answers than they would otherwise, just from having the data set. So there are multiple uses for AI. Maybe any one of them individually, you're gonna say, "Oh, well, that isn't a game changer." But I mean, it just fits very nicely into our business and helping our customers draw insights out of data. Is there anything you would stand to gain from a sort of broad partnership with one of the traditional sort of tech players out there? We have had quite a number of discussions with the various tech people and you know the specific nature of what a partnership might look like going forward, we'll have to see. Those are things we've had discussions on. But you know we're sitting on a really what's the most valuable asset here, which is the data. So we just wanna be careful about that we protect that data and it not get out into the public domain. Fair enough. I wanna switch to geographies a little bit. Europe versus the Americas. Do you see any differences in trend lines, just in terms of the customer demand environment at all? You know, we do hear some chatter around governments having to, you know, prioritize defense expenditures over in Europe. Is there a crowding out effect that sort of has a trickle-down impact on demand? No, it hasn't yet. Yeah, I mean, we're aware of that. Maybe the reprioritization talk about defense versus other social services and healthcare and so forth, I wouldn't say that. What I would say about Europe is, in some ways it's a tougher environment because it's slower to... The drug approvals are slower, the pricing is not as good as it is in the United States. So the first place pharma companies go to launch a drug is the U.S., second place, Japan. Europe, Western Europe is third on the list there. And so, when we have discussions internally about this, the guys in Europe are always a little bit envious of our U.S. operation because things just happen quicker there. Mm-hmm. Now, that being said, we've actually done very well in Europe. We have really good relationships there. There are a number of large pharma headquarters there that have done very well. We see stronger demand out of the headquarters than out of the affiliates right now, and some of that's just the way it works when pharma pulls in the reins on spending. The headquarters keeps the money, the affiliates get cut back. But we're doing very well there, despite. But, you know, generally, I'd say the U.S. is a little bit more fertile ground. Got it. Same sort of question on China. Just given the rising geopolitical tensions, how do you think about the evolution of that market for IQVIA? I know it's small for you, it's like low single digit, but over the medium to longer term, how do you think about it? Do things like, you know, the Biosecure legislation, etc., open up opportunities for share gain for you at all? It does come up in the context of the CMOs and the preclinical side a fair bit, but curious as to whether, you know, customers might want to do work with IQVIA versus a Chinese CRO, even for China. Yeah, and look, we do have a business in China that's about 3-4% of our revenue, so it isn't huge, but it is what should, over the medium to long term, be a growth area for us. In the short term, China's been really slow. There's no other way to put it. It's been kind of a very flattish environment for us in terms of revenue growth. Could there be some opportunities out of the Biosecure Act? Sure. Sure, over time, I think there could be. We're well positioned there. I mean, we service the multinational pharma companies, and then we have a separate subsidiary that's wholly owned, named Kun Tuo, that services mostly local Chinese pharma companies, and there is kind of a bifurcation in the market there. So we're positioned to take advantage of both when the market starts coming back. But in the short term, it's actually been pretty slow. And there's also been the issue of the Chinese government cracking down on interactions between pharma companies and healthcare professionals, and that has dampened the promotional spending some there. So it's gonna be a little bit before China comes back, but we're confident over the medium to longer term, there's good growth there. Got it. I want to wrap up here with a couple of finance questions, Ron. Margins, you know, approaching 24%-ish this year. How should we think about the margin expansion algo from here? Obviously, mix is an important component. Just walk us through, you know, how that the margins shake out on TAS versus R&D Solutions, and then within TAS, what segments do you view as the key margin drivers? Yeah. Well, look, we have the highest margins within the CRO industry. They're slightly lower on average than TAS, but, you know, TAS has a very strong component in it of the information business, which is a strong margin, good cash-generating business. Now, you know, there has been some margin pressure due to pricing, due to mix shift within both of those businesses. In the case of R&DS, a little bit of a shift in the margins towards FSP work from full service work in TAS. Some of the discretionary components that are high margin, like analytics and consulting, have been slower recently. That'll change back over time. I mean, there are just so many factors that affect margins in any given point in time. I wouldn't focus too much on the quarter to quarter, but what I will say is that we have targeted and been successful in having margin expansion consistently over time. I'd say modest margin expansion going forward on average, call it 20-40 basis points, is what we target. We're more interested in driving the top line, really, than driving margins per se. We're always gonna look for some margin expansion, but that isn't gonna be the main priority. It's driving the top line and taking advantage of the opportunities we have there, and as we get the volume and we continue to be very tight on cost, I think the margins will follow. Not necessarily in every quarter or every year, but over time. Got it. To wrap up, just a couple on the balance sheet and capital deployment. Do you... You know, with the rate cut sort of now imminent, does that change your debt paydown strategy, and how are you thinking about interest expense next year? I would think interest expense should decline modestly next year, because, you know, if you believe the market's forecast of what's gonna happen with rates. Now, it depends on a lot of things: how much we spend on acquisitions, how much we spend on share repurchase, and so forth. But I think we can confidently say it ceases to be a drag on earnings per share growth and may even help some going forward and certainly having the lower interest expense environment is favorable towards, you know, reinvestment we wanna do in the business. There's no question about it. We will continue to look fairly aggressively at acquisitions, generally small to medium-sized tuck-in acquisitions to fill in capabilities as opposed to, you know, big deals or anything like that. Got it. Well, that's a great place to leave it at. So thanks so much, Ron, for spending the time with us. Great. Thanks, Tejas. Yeah, of course.