Iqvia (IQV) Q2 2026 earnings call transcript

Good morning, everyone. Thank you for joining our second quarter, 26th earnings call. With me today, Ari, Boosby, Chairman, and Chief Executive Officer, Mike Vida, Executive Vice President and Chief Financial Officer, Eric Server, Executive Vice President and General Counsel, Melissa Willett, Senior Vice President Financial Planning and Analysis, and Katie Ward, Vice President and Ambassador Relations. Today, we'll be referencing a presentation that will be visible during the fall for those of you on our webcast. This presentation will also be available following this following the events and presentation section of our IQVIA investor relations website at ir. iqvia. com.

Before we begin, I would like to caution listeners that certain information discussed by management during this conference following forward-looking statements. Action results could differ materially from those stated or implied by forward-looking statements due to risk and uncertainty associated with the company's business, which are discussed in the company's filings with the Securities and Exchange Commission, including our annual report on Form 10K and Subsequent CAC Finance.

In addition, we will discuss certain non-GAP financial measures on this call, which should be considered a supplement to and not a substitute for financial measures prepared in accordance with GAP. A reconciliation of these non-GAP measures to the comfortable GAP measures is included in the press release and conference call presentation.

As previously disclosed, we implemented a new second reporting structure back to January 1, 2026. In conjunction with this change, prior periods segment amounts have been recast to conform to this reporting structure.

I would now like to turn a call over to our chairman and CDL, Ari Guzier. Thank you, Kerry, and good morning, everyone. Thank you for joining us to discuss our second quarter results. IQV has delivered an outstanding second quarter with revenue adjusted in the data and adjusted the units of earnings per share, all exceeding the high end of our guidance.

Importantly, the momentum we saw in the first quarter continued with improving market conditions and strong operational execution. Organic growth for the company as a whole accelerated to 6% a year over year, which is three times the rate with an average a year ago. Adjusted EBITDA margin began improving earlier than we had anticipated due to better operational performance.

Let's look at the results for the quarter. Total revenue for the second quarter exceeded the high end of our guidance range representing Euro-video growth of 8.7% on a reported basis with effects much less of a tailwind than we had anticipated. At constant currency, growth was very strong at 8.5%. Second quarter adjusted EBITDA was above the high end of our guidance as well, representing year over year growth of 9.2%.

Second quarter adjusted the root of EPS of $3.15, also exceeded the high end of our guidance range and increased 12.1% year over year. The wheat was driven entirely by strong operational performance.

Let's discuss the results by second. On the clinical side, our ideas delivered great results with revenue growth of nearly 9% and organically 7%. We had $3,150 million in net new bookings representing 19% growth year over year and 27% growth sequentially with notable strength in full service bookings translating into a quarterly book to be ratio of 1.22. If I may add, this 1.22 was in a quarter where our revenue was up almost 9% year over year stronger than anticipated.

I want to point out that the improvement in bookings is not just from this quarter alone. As you know, I always remind you that we have a long cycle business and it's more meaningful to look at trends over longer time periods. And if you look at our last 12 months net new bookings, they have increased in each of the past four quarters with $11.3 billion of last 12 month net new bookings as of June 30th.

They are up 13% year over year. What these metrics point to is a consistently improving demand environment as well as improving win rates for our R&DS business.

On the commercial side, organic revenue growth accelerated year over year to 5%, which is more than full point higher organic growth than a year ago. And this at clients launched new year-proof products and expanded the breadth of services they utilized from Ethereum. Notably, analytics and consulting grew organically high single digits year over year. The highest growth rate since 2022.

Commercial engagement services and patient solutions both continue to grow double digits year over year. And our AI offerings gained further traction with increased customer adoption with three consecutive cores of strong sustained and improving results. And pipelines that remain at record levels, there is clear momentum in commercial solutions.

Let me now give you a little more color on what we are seeing in the market environment. And let's start with forward looking demand metrics in the clinical environment.

RSP flow growth remains strong with double digit growth both year over year and sequentially with improvements across all clients segments.

The season timelines continue to shorten and EDP funding continues to be very strong with the second quarter at $35 billion according to BioWorld, which is more than double the Q2 2025 number.

I want to elaborate on this EDP segment. In response to investor feedback and the reviewing publicly available information, we are taking the opportunity to update our own classification of customer segments to help you better benchmark IQ via to our CRO peers. From now on, we are going to define large pharma by the top 20 companies by RX sales.

Mid-size companies will be the next 60 pharma companies by RX sales and EDPs, everyone else. I'm going to give you the breakdown of R&DS revenue by customer segments as I just defined them.

Large pharma represents approximately 50% of our R&DS revenue. Mid-size approximately 15% one-five of our R&DS revenue. And EDP represents 35% of our R&DS revenue.

I guess you can see that based on publicly available information, it is apparent that we have more revenue in the EDP segments than any of our CRO peers.

And this is extremely important because emerging by your pharma continues to be where much of the industry's innovation is coming from. A decade ago, EDPs represented about 45% of all clinical trial starts globally.

Today, EDPs represent about 70% of all clinical trial starts globally. EDP R&DS spend is also expected to grow at two to three times the rate of large pharma R&DS spend. And of course, EDP trials are full service outsourcing.

All of this creates a meaningful opportunity for AQVIA given we are the largest EDP provider. At the same time, large pharma continues to be a significant segment for us. In fact, we are benefiting from the strategic outsourcing partnership renewals by large pharma over the past two years, which we've been discussing several times in the past. And we, as you know, have significantly expanded the number and the scope of our preferred partnerships.

As a result, we have seen our win rate with large pharma improved material leading to an expansion of our share of wallet with those partnerships. And in several cases, replacing large CRO incumbent providers, shifting now to commercial solutions. The market environment continues to improve, supported by nearly 45% increase in new drug launchers in the first half of 2026 versus the first half of 2025.

As you know, this is important because the launch activity is a significant driver of demand across our commercial portfolio with roughly half of launch related spending typically occurring in the first two years post approval.

Additionally, as we shared before, there is an increasing trend from our large pharma customers seeking to outsource the full commercialization of certain therapies in select geographies. And given our global footprint and spectrum of capabilities across information, insights and engagements, we have been winning a fair share of these opportunities.

I want to take a moment to again remind you how to think about our commercial solutions business, especially in the era of AI. We help our clients in three main areas. One, and to stand their market. Two, plan their commercial strategies. And three, engage with their own customers.

So one, we have our client and the standard landscape, primarily through our information offering. Our information business represents about 30% of our commercial solutions segment and revenue typically grows at low single digits.

Two, we help our customers plan their commercial strategies primarily through insights from our analytics and consulting business. This business represents about 20% of our commercial solutions business and it grows mid to high single digits.

And three, we help our customers engage with their own customers, that is healthcare providers, distribution channels, patients, and payments.

And we do this through our patient solutions technology and commercial engagement services. That in aggregate is about 50% of our commercial solutions business and grows at high single digit to low double digits. Now, we continue to see increased demand for these services across the board as is evident in our own commercial demand indicators.

The pipeline continues to grow strong double digits year to date. The season timelines continue to reduce double digits. And of course, we are also winning more with win rates up double digits. When we think about future trends across both of our segments, clinical and commercial, we see the outsourcing market continuing to grow in 2027 and the years ahead.

And in fact, we think AI will continue to contribute to this market expansion and we continue to feel a strong tailwind for academia.

On the clinical side, clients are already telling us that AI in discovery will only increase demand for CRO services as more molecules with a higher predictable success are entering developments. Additionally, at UBS, leading AI solutions are further differentiating our clinical offerings and deepening our partnerships across all customer segments largely and EVP. Our AI enabled capabilities, which as you know, we've been working on, training on and refining for at least two years, are already improving study design, accelerating timelines and reducing operational risk across complex global trials.

Let me give you an example of how this is playing out with large pharma. One of our long-standing customers recently expanded its partnership with AQDAD that we include our full service clinical capabilities. That expansion led to an end-to-end award for large complex phase three stroke outcomes study. This client specifically told us that our AI enabled capabilities inside startup and enrollment along with our therapeutic expertise and global execution model, cleanse the deal because it will help manage risk and run these studies with greater predictability.

In another example, an EVP awarded IQDAD complex global phase three on college study across multiple treatment arms. And we won here because AI enabled patient recruitment, we helped keep a complex study moving at highest speed with much better predictability.

Another EVP selected IQDAD for a series of global autoimmune programs that bring together clinical laboratory and technology enabled patient and remote solutions. Here, our AI enabled patient reported outcome capabilities made the difference because they have support patient retention, protocol compliance and higher quality outcomes.

In the first, we're seeing AI begin to contribute more directly to top line growth as clients are moving beyond pilots and data foundation work and they're starting to deploy ICUIA agents more broadly. Let me give you an example of what that looks like in practice.

A mid-sized pharma client is expanding issues of ICUIA AI across an immunology franchise in 95 countries. We are combining our global syndicated pharmaceutical market data with our launch planning conversational AI agents to give the client an integrated view of market dynamics and help teams get to actionable insights in real time. Again, the benefit here is speed, precision and accuracy.

Another example in commercial, we are working with the top five large pharma to deliver a complete AI enabled enterprise analytics solution that seamlessly brings together data, technology and advisory support. This will deliver customized workflows that accelerate decision making and improve quality and accuracy.

Beyond these broad and deep relationships with our customers, governments and regulatory authorities around the world look to ICUIA for trusted healthcare expertise and insights.

Recently, ICUIA was the only CRO invited to provide our perspective on clinical trial innovation at the clinical trials roundtable with the U. S. Department of Health and Human Services as part of their trial blazer initiative.

We were subsequently invited to testify at the hearing on the house energy and commerce subcommittee on health regarding the FDA's role in creating a more efficient and accelerated path for early clinical development in the United States. We were the only CRO and also, by the way, the only representative from the biopharma industry to testify.

We are proud of the source policy makers place in our leading expertise as we consider reforms to accelerate development timelines, modernized trials using AI and strengthening U. S. competitiveness in biomedical innovation.

Finally, I'd like you all to mark your calendars for the upcoming ICUIA University big, which we are planning for December 2nd, 2026. And now to mine for more details on our financial performance.

Thanks, Ari. Good morning, everyone. As a reminder, we implemented a new segment reporting structure, effective January 1, 2026. In conjunction with this change, prior period segment amounts had been recast and informed to this recording structure.

Now, let's start by reviewing revenue. Second quarter revenue of $4,368 million grew of 8.7% on a reported basis and 8.5% at constant currency. Revenue growth within the quarter includes about two and a half points of contribution from acquisitions. Commercial solutions revenue for the second quarter was $1,793 million of 8.6% on a reported basis and 8.4% at constant currency.

R&D solutions second quarter revenue was $2,575 million of 8.8% on a reported basis and 8.6% at constant currency. For the first half of the year, total company revenue was $8,519 million of 8.6% on a reported basis and 7.3% at constant currency. Commercial solutions revenue was $3,547 million of 10.1% reported and 8.5% at constant currency. R&D solutions revenue was $4,972 million of 7.5% on a reported basis and 6.4% at constant currency.

And moving down to P&L, second quarter adjusted EBITDA is $994 million representing growth of 9.2% year over year, while first half adjusted EBITDA was $1,926 million. Second quarter GAP net income was $256 million and GAP diluted earnings per share was $1.53. For the first half GAP net income was $530 million or $3.14 of earnings per diluted share.

Second quarter adjusted net income was $527 million and adjusted diluted earnings per share is $3.15 representing growth of 12.1% year over year. And for the first half adjusted in income was $1 billion, $19 million or $6 and $4 per diluted share up 9.8%.

Returning to RDS bookings, the R&D solutions net new bookings in the quarter were $3,150 million, a 19.3% increase year over year, resulting in a $1.22 book to bill, which is already mentioned, is all the more impressive given revenue grew 9%. I should also note that cancellations remained within the historical range. As of June 30th, R&D's backlog was $34.2 billion and the next 12 month revenue from this backlog was $9,230 million, which is up 7.5% versus last year.

And as discussed, given the long cycle and nature of our business, it's more important to focus on the longer-term booking trends. In the quarter, the last 12 month net new bookings were $11,250 million, an increase of 12.9% year over year. And accordingly, this metric has been steadily increasing in each of the past four quarters and clearly points to momentum in our business.

So let's turn to the balance sheet. As of June 30th, cash and cash equivalents was $1,999 million, gross debt with $15,999 million, resulting in net debt of $14,090 million. Our net leverage ratio ended the quarter at 3.59 times trailing 12 months adjusted even down. Second quarter cash flow from operations with $568 million and capital expenditures were $198 million, resulting in free cash flow of $360 million, representing growth of 23% year over year.

And in the quarter, we repurchased $398 million of our shares, resulting in first half share repurchases of $950 million. And this leaves us with approximately $2.8 billion of share repurchase authorization remaining under the current program.

Now let's turn to guidance. To reflect stronger organic revenue growth and changes in the M&A and foreign exchange impacts, we are raising our full year 2026 guidance for revenue, for adjusted EBITDA, and for adjusted limited earnings per share. We now expect revenue to be between $17,275 million and $17,475 million, representing year over year growth of 5.9 to 7.1%.

The new midpoint of the revenue growth guidance is 6.5% versus the prior guidance midpoint of 5.8%. This new guidance includes approximately 100 basis points, higher organic revenue growth, and approximately 50 basis point, higher contribution from M&A, all set by a foreign exchange impact that is 80 basis points less of a tailwind than in the former guidance. This revenue guidance now assumes approximately 200 basis points of contribution from acquisitions, and only approximately 20 basis points of a tailwind from foreign exchange.

We are also raising our adjusted EBITDA to be between $4 billion and $4 billion, $50 million, growing 5.6 to 6.9% year over year, reconfirming flat margins year over year, at approximately 23.2%. And finally, we are also raising adjusted diluted EPS to be between $12 and $0.80 and $13, up to 7.4 to 9.1% versus prior year, or 8.2% at the midpoint.

Let me provide a third quarter tax. For the third quarter, we expect revenues be between $4,350 million and $4,390 million, which represents year over year growth, 5.2% to 7.1%. Adjust the DBITDA as expected to be between $1 billion and $1 billion, $20 million, representing growth of 5.4% to 7.5% versus prior year. And adjusted diluted EPS is expected to be between $3.19 and $3.29, which represents year over year growth of 6.3% to 9.7%.

Both this guidance and the full year guidance assume that foreign currency rates as of July 27th continue for the balance of the year.

So to summarize, IQVIA delivered outstanding financial results. The second quarter revenue adjusted to EBITDA and adjusted diluted EPS, exceeding the high end of our guidance. We accelerated organic revenue growth across both commercial and clinical segments. We delivered strong adjusted EBITDA margins in the quarter. We had strong free cash flow performance up 23% year over year. The RDS net mean bookings were the highest since 2022 and $3,150 million from double digits year over year and sequentially with very strong full service bookings.

And as Ari mentioned, the demand environment for both clinical and commercial has significantly improved as reflected in our forward looking demand indicators. We raised our full year guidance for revenue adjusted to EBITDA and adjusted diluted earnings per share and you're planning a December 2nd and yesterday where we look forward to seeing. Now with that said, let me hand it back to the operator for June.

Thanks very much. Almost feel like you're out in the call now. That was a pretty positive update. We can only go south, I think.

So last quarter, you had some added disclosures around the bookings profile that helped, I think helped people understand the dynamics and what was optically a lower netbook to bill. I'm this quarter, you're obviously putting up a bigger book to bill against a strong revenue growth rate but I do have to ask were there any chunky awards or other call outs within those bookings and you did mention FSO was very strong. What about FSP awards? What about pass-through mix and the awards? Any other notable call outs that you'd like to share with us? Thanks very much.

Well, good morning Eric and thanks again for your kind words. Actually, you had a good call in your notes a few weeks ago.

We had indeed a great quarter. I have to tell you, in over 25 years of reporting earnings in these or other companies, I've never had as clean a quarter as this one all around.

I must tell you, there is absolutely nothing salient and usual abnormal, odd, awkward in our numbers, anywhere. With respect to your bookings, the question on the bookings to say there was strength literally across the book.

Nothing unusual, pass-throughs or in the normal range, cancellations or in the normal range. Good mix of large, mid, EBT.

I mean, really FSO was very strong, but again, zero to what it was before or the multiple crisis erupted over the past two or three, long outsourcing, continuing from large pharma, really EBT bookings. Again, it was from around FSP, you asked specifically, you know, low to mid, double digits, kind of as usual percentage of total amount. I mean, really nothing to call, I mean, it's a fair question because the numbers are so good everywhere.

I have to tell you, in preparing for the call, this book, I'd say, what is there anything we can point to and there's nothing and all those from, like anything else, I was just going to add that the therapeutic mix and all that stuff is happening with the trends.

Great job, guys.

Hi, good morning, everyone. Ari, in your prepared remarks, he talked about outsourcing penetration, potentially increasing over the interim. Is that comment broad-based, more focused on some of the conversations you've been having with your larger mid-sized pharma, customers, just any more color there would be helpful?

Sure, thank you. Okay, so as you know, the EVP segment is 100% our source, by definition. And again, as I want to reiterate, we are the largest from CRO provider to the EVP segment. I think it's very clear from the numbers now.

So that clearly is all outsourcing. Mid-sized, pretty much similar, except for some of the larger ones that some of themselves have released a better scheme. Large pharma is really where you've had that debate in sourcing, outsourcing, et cetera.

Look, I'll tell you that large pharma clients are already telling us that because of the increasing extensive use of AI, and by the way, use of a hyper-large pharma is not starting on July 28 with a press release.

It's been going on for more than two or three years, okay? So the use of AI in discovery will only increase demand for CRO services. And our clients are actually telling us and asking us to gear up capacity as additional molecule will enter development. Some of our large pharma clients are predicting that we double their study portfolio.

And so they're asking us literally to ask thousands of FCEs in anticipation of those studies. So the additional demand with CROs is simply because again, the dynamics of outsourcing remain the same. Some of these numerators are identified to use of AI are in a JSON therapies where the client may not have all the therapeutic expertise.

The additional capacity required, no one is interested in any more headcount for specific trials. It's always more cost effective to use a CRO.

And then the global footprint helps. The domain expertise, the regulatory and internal knowledge for study design, the site relationships and the network to broader equity coverage, the expensive data to land on the best design and successfully recruit more specialist patient populations, all of that, you know, lends itself to more outsourcing. So the current outsourcing for large pharma, we continue to increase as we look at our conversations with our clients and we model it out.

Thank you, that's it for me.

You've talked up some of the benefits you're seeing from the solutions you've developed internally. There's clearly some opportunity to partner externally or maybe do some M&A. There was a deal on the space maybe a week or two ago. Could you just talk about how you see the development of those solutions over time and where you're putting incremental dollars?

Well, I mean, look, we've, again, not news for us, we've been doing this for some time. The idea of inserting intelligence in the design and performance of chemical trials to accelerate outcomes and improve outcomes is really what prompted our merger 10 years ago.

Now, of course, we've yet to have frontier models, et cetera, this has just been accelerated over the past two, three years.

Just to step back in terms of investments and where we continue to focus at contracts, I've said this before, but I think it's worth repeating. There are at least three necessary requirements to effectively deploy AI models in our industry. Number one, you need proprietary expert content that is globally sourced, de-identified, curated, fit for purpose, integrated, interoperable, and ready for extraction.

That's proprietary healthcare data. And we've got that. Again, it has to meet interoperability, relevance, completeness, traceability, reliability, and linkability standards under countless ontologies at the scale that has no comparison to any other industry. And this is why our clients trust us to work with them on their AI journey. Actually, we recently read a quote from, you might wanna look at the book if you haven't already called Empire of AI.

And the author says their acquiring training data has turned into one of the most difficult, expensive, and eagerly fraught activities in frontier lab analytics. You know, there's a phrase going around now that the web is empty because the frontier AI models, essentially are also exhausting, everything that's out there. And so you gotta turn out the proprietary data. And again, we've got that. And that's what we are continuing to invest.

Number two, you need deep domain knowledge to read, understand, and interpret these highly complex data sets in the proper context. And of course, we've got that too. And number three, you need to operate within the significant regulatory compliance and privacy frameworks that healthcare requires.

And they vary across countries and geography. And of course, we've got that expertise too. So our own Agentic roadmap has continued to make great progress. In fact, we now have 294 agents deployed across 90 use cases. I wanna remind you, an agent is not one model. An agent is built of multiple tasks that are all powered by different models. We work with every single AI company out there in this country and overseas.

And you build that, you've been building us with the help of NVIDIA, very successfully. In fact, many of our large pharma clients are recognizing all of this. And the limits of AI frontier models, and instead they are partnering with us to develop their AI world mass. Four of the top 10 pharma companies have already contracted with us to co-develop AI solutions.

And 19 of the top 20 pharma companies have already deployed active AI solutions in their workforce. So this has been and continues to be a priority area for investment and continues to be seen within our win rates. Community differentiates us from the rest of the pack. We've been splitting in Congress in the last deal including the large COOs. Thank you.

Can you give us a little flavor of what that looks like? And when you go into these competitive RFPs or competitive displacements, what is the discussion looking like on price versus capabilities versus technology and AI functionality if you can break it down to those three buckets? Thanks.

Yeah. Thanks for your question, Michael. You know, we've shared before that large pharma, literally every single one of the top 20, went through a very significant process to renegotiate all of their partnerships. They opened up all of their preferred relationships and that process occurred over the 24-25 timeframe.

We stated before that we were very happy with the outcome of those three negotiations because we both increased the number and the scope of those relationships. And so when there is a specific RFP within the context of those partnerships, a large pharma typically invites the two or three partners that they have selected in that prior process. And then the discussion, by the way, the rates have been typically negotiated during those relationships. So yeah, we'd say it's less on price on a specific RFP and more on delivery timelines, capabilities, technology, site networks, relationships, experience with that particular therapeutic area, the skill sets of the individuals involved, et cetera, and of course our AI capabilities.

Thank you.

Well, David, it sounds like you've been in listening in in our hanging security strategy session. All I can say is that yes, we are working on those things and I can leave it at that. And again, you would expect us to do that simply because we have great relationships with our clients and we are expanding, you know, upwards and downwards, the set of capabilities. You saw us buy discovery assets. In fact, we completed the acquisition of the child leader assets in the world.

I guess that was the first part of the question to you, Mike, you want to miss it, say well, and that's basically what, normally our acquisitions, we have guided to a point and a half of the year, but now that we did, that we did kind of add work about 75, 80 minutes. Yeah, but like this year's struggling.

Yeah, I was the same for this question, thank you.

Sure, Jalindra, I'll take that one. So let me give you some color on our EBITDA margins. Yes, they expanded as we noted 10 basis points. And as we started to provide a little more color in the composition, our operational and productivity programs are going exceptionally well. And we said that AI is just another lever in that toolkit.

So that drove about 90 basis points of operational margin expansion in the quarter. And then obviously we have non-operational items like effects that were about 80 basis points of drag.

That's right.

Excuse me, Patrick has zero. It's their impact of past years of 80 basis points of a drag. So so clearly operational productivity programs are delivering value.

Yeah, I mean, just for context, Jairindra, if you're recalling the first quarter, we reported that we generated 60 bits of operational productivity improvements now margins. But that was upset by 120 bits of negative impact from the stronger past room growth as well as effects. Now in this quarter, we had no effects virtually negligible, but we still had past rooms growth and those created a headwind of 80 bits.

Now we generated 90 bits of operational underlying margin improvement. And that led to the slope of this pandemic, so to adjust it if that improvements, yeah.

And it's also important to remember that we get leverage off of our fixed cost phase as we have stronger diabetes, that's true.

Yeah, so in the full year, I think, that was the context of your question. I mean, we were pretty explicit in our guide. You really have to look at all the moving parts that are in there. So obviously, effects, tailwind reducing, helps our reported margins.

We added in M&A, which is primarily Charles River, which as you know, has lower margins. And then we have our strong productivity programs that are delivering incremental, keep it some margin and value that are helping offset. And we can put all that together. That's where we're maintaining our flags margins for the year. Yeah, just to be clear, effects is not helping margins.

Less of an effects impact eliminates the headwinds to margin than we have when we started the year. Effects, as you know, has changed dramatically over the course of the fourth.

The main headwind, non-operational headwinds to margins is the bastards, which has no pain with carbon, no profit. Thank you. One more question.

Well, you need a good market to be able to perform. As you know, we've been facing a lot of headwinds, micro headwinds over the past years, but there's no question. I shared some of the four looking demand indicators, no questions, that the RFP flows, which we report, or indicate to you that every quarter have been improving. I don't quite recall that my mind, the RFP flow growth is probably one or two corners, which if you go back and look, I'm sure they were good, probably mean to high single digits.

And that kind of reflects itself now in our book sheets. Now RFP flows were up double digits in the quarter strong double digits, actually. And I think that goes well for the future now, of course, not enough to get an RFP, you also have to win. And so you're right, our win rate has indicated up significantly on the back of all of the capabilities we talked about. And on the back of the fact that the EVP segment, in particular, has seen very, very strong funding growth.

And that usually translates six months to three years, after the funding, into awards. And again, given our strong position in EVP segment and winning a fair share. So that has also contributed to anything else, might be more than enough, I think.

But I'm saying no significant changes on the below-the-line assumptions there.

And clearly, when you talk about Yes, it's a long cycle business. So the great bookings that we've had, are really more of a 27 and beyond indicator. So we've been getting a lot of questions about our book. Yeah. Well, I think I answered an earlier question about bookings and the fact that they were really broad-based. Again, there was nothing saying, and I think it was generally very strong. And I just want to mention, you know, recently several of you asked about bookings and bookings policy in light of some other people's changes to their bookings, policies, and so on.

And I just want to again emphasize that we continue to have contract with bookings. That is that, you know, all the bookings need a signature and to take a translation. We also need a signature.

You know, we feel that the signature is an objective criteria and then removes judgment. And we think that we're going to stick with that best in class policy, I'm just giving that as a context for your questions. That you're getting broad-based bookings, over-contracted bookings. Many of you, by the way, also we received several inquiries, wondering if we also have 15% or 16% of our backlog that's inactive trials.

And we asked the R&DS team to go back. Obviously, we now have backlog $34 billion. We've got thousands and thousands of trials, as you can imagine, accumulating over the years.

And we asked the R&DS team to review the backlog to identify so-called inactive trials. And just want to make sure that we are sure, or those of you who asked, and said it with you, I asked about the 40% or the back of your mind, regarding any comments on that. I'm just really looking at what pretty nearly is also there.

Yeah, I think that the team is looking at it and will finalize it in the third quarters. But if there is an adjustment to our backlog for an active trial, it's in the ballpark of 5%. Not this 15% metric that was out there by competitor. And I think that it's important to note that if we do make an adjustment, it will have zero impact on any historical financial results, guidance, the next 12-month revenue from backlog that we just reported zero.

So again, it's something that we're looking into.

And if we do something, we will talk about it in the third quarter column. But to your question about the next, what is important because we reported this time very strong growth in next 12 months rather than from backlog. And then as you know, it's at the record level, what's the number, 9.5% growth.

And it's been also increasing quarter after quarter. We want to enjoy your attention also to the net new bookings last 12 months, quarter after quarter. If you go back and look over the past five quarters, that metric has been constantly increasing in a regular steady pace and Euro-a-year itself, 12.9%. All of that both were to your question about our revenue going forwards, not just guidance for this year, but the momentum into next year.

And specifically this year, we're seeing the acceleration growth in both commercial solutions and RDS segment of this. So we feel good about the guide.

Thank you all.

At this time, Mr. Joseph, I turn the call back over to you.

Thank you all for it. Thank you everyone for taking the time to join us today. We look forward to speaking with you again on third quarter, 26th Army's call. The team will be available the rest of the day to take any follow-up questions you might have. Thank you, have a good day.