Good morning, everyone. Thank you for joining our second-quarter 2026 earnings call.

With me today are Ari Bousbib, Chairman and Chief Executive Officer; Mike Fedock, Executive Vice President and Chief Financial Officer; Eric Sherbet, Executive Vice President and General Counsel; Melissa Willig, Senior Vice President, Financial Planning and Analysis; and Katie Word, Vice President, Investor Relations. Today we will be referencing a presentation that will be visible during this call for those of you on our webcast.

This presentation will also be available following this call in the Events and Presentations 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 call will include forward-looking statements.

Actual results could differ materially from those stated or implied by forward-looking statements due to risks and uncertainties 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 10-K and subsequent SEC filings. In addition, we will discuss certain non-GAAP financial measures on this call, which should be considered a supplement to, and not a substitute for, financial measures prepared in accordance with GAAP.

A reconciliation of these non-GAAP measures to the comparable GAAP measures is included in the press release and conference call presentation. As previously disclosed, we implemented a new segment reporting structure effective January 1, 2026.

In conjunction with this change, prior-period segment amounts have been recast to conform to this reporting structure. I would now like to turn the call over to our Chairman and CEO, Ari Bousbib.

Thank you, Kerri, and good morning, everyone. Thank you for joining us today to discuss our second-quarter results.

IQVIA delivered an outstanding second quarter with revenue, Adjusted EBITDA, and Adjusted Diluted 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% year-over-year, which is three times the rate we delivered a year ago. Adjusted EBITDA margin begun 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 year-over-year growth of 8.7% on a reported basis, with FX 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 Diluted EPS of $3.15 also exceeded the high end of our guidance range and increased 12.1% year-over-year. The beat was driven entirely by strong operational performance.

Let's discuss the results by segment. On the Clinical side, R&DS delivered great results with revenue growth of nearly 9% and, organically, 7%.

We had $3,150,000,000 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-bill 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 I always remind you that we are a long-cycle business, and it's more meaningful to look at trends over longer time periods.

If you look at our last-12-month net new bookings, they have increased in each of the past four quarters. With $11,300,000,000 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 a full point higher organic growth than a year ago.

This, as clients launched newly approved products and expanded the breadth of services they utilize from IQVIA. 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 continued to grow double digits year-over-year, and our AI offerings gained further traction with increased customer adoption. With three consecutive quarters 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. Let's start with forward-looking demand metrics in the clinical environment.

RFP flow growth remains strong with double-digit growth both year-over-year and sequentially, with improvements across all client segments. Decision timelines continued to shorten, and EBP 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 EBP segment. In response to investor feedback and in reviewing publicly available information, we are taking the opportunity to update our own classification of customer segments to help you better benchmark IQVIA to our CRO peers.

From now on, we are going to define large pharma by the top 20 companies by Rx sales, mid-sized companies will be the next 60 pharma companies by Rx sales, and EBPs everyone else. I want 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%, 1-5, of our R&DS revenue.

EBP 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 EBP segment than any of our CRO peers.

This is extremely important because emerging biopharma continues to be where much of the industry's innovation is coming from. A decade ago, EBPs represented about 45% of all clinical trial starts globally.

Today, EBPs represent about 70% of all clinical trial starts globally. EBP R&D spend is also expected to grow at two to three times the rate of large pharma R&D spend.

Of course, EBP trials are full-service outsourcing. All of this creates a meaningful opportunity for IQVIA given we are the largest EBP 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.

We, as have significantly expanded the number and the scope of our preferred partnerships. As a result, we have seen our win rate with large pharma improve materially, 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 a nearly 45% increase in new drug launches in the first half of 2026 versus the first half of 2025.

As this is important because 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.

Given our global footprint and spectrum of capabilities across information, insights, and engagement, 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, understand their market; two, plan their commercial strategies; and three, engage with their own customers. One, we help our clients understand the 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. Three, we help our customers engage with their own customers, that is healthcare providers, distribution channels, patients, and payers.

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've continued 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.

Decision timelines continue to reduce double digits. 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. In fact, we think AI will continue to contribute to this market expansion and will continue to fuel a strong tailwind for IQVIA.

On the Clinical side, clients are already telling us that AI in discovery will only increase demand for CRO services, as more molecules with higher predictable success are entering development. Additionally, IQVIA's leading AI solutions are further differentiating our clinical offerings and deepening our partnerships across all customer segments: large, mid, and EBP.

Our AI-enabled capabilities, which, as 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 IQVIA to include our full-service clinical capabilities. That expansion led to an end-to-end award for a large, complex Phase III stroke outcomes study.

This client specifically told us that our AI-enabled capabilities in site startup and enrollment, along with our therapeutic expertise and global execution model, clinched the deal because it will help manage risk and run this study with greater predictability. In another example, an EBP awarded IQVIA a complex global Phase III oncology study across multiple treatment arms.

We won here because AI-enabled patient recruitment will help keep a complex study moving at high speed with much better predictability. Another EBP selected IQVIA for a series of global autoimmune programs that bring together clinical, laboratory, and technology-enabled patient end-point solutions.

Here, our AI-enabled patient-reported outcome capabilities made the difference because they help support patient retention, protocol compliance, and higher-quality outcomes. In Commercial, 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 IQVIA AI agents more broadly.

Let me give you an example of what that looks like in practice. A mid-sized pharma client is expanding its use of IQVIA AI across an immunology franchise in 95 countries.

We are combining our global syndicated pharmaceutical market data with our launch planning conversational AI agent to give the client an integrated view of market dynamics and help teams get to actionable insights in near real time. Again, the benefit here is speed, precision, and accuracy.

Another example in Commercial: we are working with a 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 IQVIA for trusted healthcare expertise and insights. Recently, IQVIA was the only CRO invited to provide our perspective on clinical trial innovation at a clinical trials roundtable with the U.S.

Department of Health and Human Services as part of their Trailblazer initiative. We were subsequently invited to testify at a hearing of 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 trust policymakers place in our leading expertise as they consider reforms to accelerate development timelines, modernize trials using AI, and strengthen U.S.

competitiveness in biomedical innovation. Finally, I'd like you all to mark your calendars for the upcoming IQVIA Investor Day, which we are planning for December 2nd, 2026.

Now to Mike 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 have been recast to conform to this reporting structure.

Now let's start by reviewing revenue. Second-quarter revenue of $4,368,000,000 grew 8.7% on a reported basis and 8.5% at constant currency.

Revenue growth within the quarter includes about 2.5 points of contribution from acquisitions. Commercial Solutions revenue for the second quarter was $1,793,000,000, up 8.6% on a reported basis and 8.4% at constant currency.

R&D Solutions second-quarter revenue was $2,575,000,000, up 8.8% on a reported basis and 8.6% at constant currency. For the first half of the year, total company revenue was $8,519,000,000, up 8.6% on a reported basis and 7.3% at constant currency.

Commercial Solutions revenue was $3,547,000,000, up 10.1% reported and 8.5% at constant currency. R&D Solutions revenue was $4,972,000,000, up 7.5% on a reported basis and 6.4% at constant currency.

Now moving down the P&L. Second-quarter Adjusted EBITDA was $994 million, representing growth of 9.2% year-over-year, while first-half Adjusted EBITDA was $1,926,000,000.

Second-quarter GAAP net income was $256 million, and GAAP diluted earnings per share was $1.53. For the first half, GAAP 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 was $3.15, representing growth of 12.1% year-over-year. For the first half, Adjusted Net Income was $1,019,000,000, or $6.04 per diluted share, up 9.8%.

Now turning to RDS bookings. The R&D Solutions net new bookings in the quarter were $3,150,000,000, a 19.3% increase year-over-year, resulting in a 1.22 book-to-bill, which, as Ari 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&DS backlog was $34.2 billion, and the next-12-month revenue from this backlog is $9,230,000,000, which is up 7.5% versus last year.

As discussed, given the long-cycle 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 $11,250,000,000, an increase of 12.9% year-over-year.

Importantly, this metric has been steadily increasing in each of the past four quarters and clearly points to momentum in our business. Now let's turn to the balance sheet.

As of June 30th, cash and cash equivalents was $1,909,000,000, gross debt was $15,999,000,000, resulting in net debt of $14,090,000,000. Our net leverage ratio ended the quarter at 3.59 times trailing-12-month Adjusted EBITDA.

Second-quarter cash flow from operations was $558 million, and capital expenditures were $198 million, resulting in free cash flow of $360 million, representing growth of 23% year-over-year. 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 Diluted Earnings Per Share.

We now expect revenue to be between $17,275,000,000 and $17,475,000,000, 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 points higher contribution from M&A, offset 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 $4.000 billion and $4.050 billion, growing 5.6% to 6.9% year-over-year, reconfirming flat margins year-over-year at approximately 23.2%. Finally, we are also raising Adjusted Diluted EPS to be between $12.80 and $13.00, up 7.4% to 9.1% versus prior year, or 8.2% at the midpoint.

Let me provide our third-quarter guidance. For the third quarter, we expect revenue to be between $4,350,000,000 and $4,390,000,000, which represents year-over-year growth 5.2% to 6.1%.

Adjusted EBITDA is expected to be between $1.000 billion and $1.020 billion, representing growth of 5.4% to 7.5% versus prior year. 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 presume that foreign currency rates as of July 27th continue for the balance of the year. To summarize, IQVIA delivered outstanding financial results, with second-quarter revenue, Adjusted 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 new bookings were the highest since 2022 at $3,150,000,000, growing double digits year-over-year and sequentially, with very strong full-service bookings.

As Ari mentioned, the demand environment for both Clinical and Commercial has significantly improved, as reflected in our forward-looking demand indicators. We've raised our full-year guidance for revenue, Adjusted EBITDA, and Adjusted Diluted Earnings Per Share, and we are planning a December 2nd Investor Day, where we look forward to seeing you.

Now with that said, let me hand it back to the operator for Q&A.

Thanks very much. Almost feel like you ought to end the call now.

That was pretty positive update. We can only go south, I think.

Last quarter, you had some added disclosures around the bookings profile that I think helped people understand the dynamics and what was optically a lower net book-to-bill. 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?

You did mention FSO was very strong. What about FSP awards?

What about pass-through mix in the awards? Any other notable call-outs that you'd like to share with us?

Thanks very much.

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 this 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, unusual, abnormal, odd, awkward in our numbers anywhere. With respect to the question on the bookings per se, there was strength literally across the board.

Nothing unusual. Pass-throughs were in the normal range.

Cancellations were in the normal range. Good mix of large, mid, EBP.

Really, FSO was very strong, but again, similar to what it was before all the multiple crises erupted over the past two, three, four years. Really, good, strong outsourcing continuing from large pharma, good EBP bookings.

Again, around FSP, you asked specifically, low to mid double digits, kind of as usual percentage of total, Mike. Really,

nothing to call out.

It's a fair question because the numbers are so good everywhere. I have to tell you, in preparing for the call, we looked and said, "Well, is there anything we can point to?"

There is nothing unusual. All very strong.

Mike, anything else?

No, I was just going to add that the therapeutic mix and all that stuff is right in line with the trends.

Great job, guys. I'll leave it there.

Thanks, Eric.

Thank you.

Hi. Good morning, everyone.

Ari, in your prepared remarks, you 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 large and mid-sized pharma customers?

Just any more color there would be helpful.

Sure. Thank you.

As the EBP segment is 100% outsourced by definition. Again, as I want to reiterate, we are the largest CRO provider to the EBP segment.

I think it's very clear from the numbers now. That clearly is all outsourcing.

Mid-size, pretty much similar, except for some of the larger ones that do some of it themselves and a little bit of FSP. Large pharma is really where you've had that debate: insourcing, outsourcing, etc.

Look, I want to tell you that large pharma clients are already telling us that because of the increasingly extensive use of AI, and by the way, the use of AI by large pharma is not starting on July 28th with a press release. It's been going on for more than two or three years, okay?

The use of AI in discovery will only increase demand for CRO services. Our clients are actually telling us and asking us to gear up capacity as additional molecules will enter development.

Some of our large pharma clients are predicting they will double their study portfolio. They're asking us literally to add thousands of FTEs in anticipation of those studies.

The additional demand with CROs is simply because, again, the dynamics of outsourcing remain the same. Some of these new molecules are identified through use of AI are in adjacent therapies where the client may not have all the therapeutic expertise.

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

Then the global footprint helps the domain expertise, the regulatory and medical knowledge for study design, the site relationships, and the network, the broad therapeutic coverage, the expensive data to land on the best designs and successfully recruit more specialized patient populations, all of that lends itself to more outsourcing. The current outsourcing for large pharma will continue to increase as we look at our conversations with our clients and we model it out.

Thank you. That's it for me.

Great. Thanks for taking the question.

I kind of want to follow up on just the last one, thinking about your future investment and your future opportunities there. Like you said, you have been talking about AI for a number of years now.

You've talked up some of the benefits you're seeing from the solutions you developed internally. There's clearly some opportunity to partner externally or maybe do some M&A.

There was a deal in 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 the incremental dollars?

Thanks.

Look, it's again not news for us. We've been doing this for some time.

The idea of inserting intelligence in the design and performance of clinical trials to accelerate outcomes and improve outcomes is really what prompted our merger 10 years ago. Now, of course, with the advent of frontier models, etc., 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 Context, I 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 a scale that has no comparison to any other industry.

This is why our clients trust us to work with them on their AI journey. Actually, we recently read a quote from, you might want to look at the book if you haven't already, called Empire of AI.

The author says there, "Acquiring training data has turned into one of the most difficult, expensive, and legally fraught activities a frontier lab undertakes." There's a phrase going around now that the web is empty because the frontier AI models essentially are close to exhausting everything that's out there.

You've got to turn now to proprietary data, and again, we've got that. That's where we are continuing to invest.

Number two, you need deep domain knowledge to read, understand, and interpret these highly complex data sets in their proper context. Of course, we've got that, too.

Number three, you need to operate within the significant regulatory compliance and privacy frameworks that healthcare requires, and they vary across countries and geographies. Of course, we've got that expertise, too.

Our own agentic roadmap has continued to make great progress. In fact, we now have 294 agents deployed across 90 use cases.

I want to 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. We've been building that 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 roadmaps. 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 IQVIA AI solutions in their workflows.

This has been and continues to be a priority area for investment. We are seeing it in our win rates.

Clearly differentiates us from the rest of the pack. We've been displacing incumbents in deal after deal, including the large CROs.

Thank you.

Thank you.

Hey, guys. Thanks for taking the question.

Maybe to build on that last comment Ari had regarding displacing other CROs and competitive processes, can you give us a little flavor of what that looks like? When you go into these competitive RFPs or competitive displacements, what does the discussion looking like on price versus capabilities versus technology and AI functionality, if you can break those down to those three buckets?

Thanks.

Yeah. Thanks for your question, Michael.

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 renegotiations. We both increased the number and the scope of those relationships.

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. By the way, the rates have been typically negotiated during those relationships, yeah, I would 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, etc., and of course, our AI capabilities.

Thank you.

Hi. Good morning.

Thanks for taking my question. I wanted to ask a clarification and then more of a content question.

The clarification, I think, Mike, you quantified 2.5% of acquisition contribution. I was wondering if you could break that out between segments.

Then, Ari, you seem in the mood to talk about the expanse of the business. The company has kind of quietly started to build some discovery capabilities.

You're talking a lot about AI. I wondered if you might expand the discussion to talk about what your thoughts are in investing in and building out capabilities in the early part of the development supply chain, and how you see that folding into your broader strategy leading into your clinical capabilities.

Is there an AI angle there as well? Thank you.

David, it sounds like you've been listening in our highly secretive strategy sessions.

I wish.

I wish. All I can say is that, yes, we are working on those things, and I can leave it at that.

I guess you would expect us to do that simply because we have great relationships with our clients, and we are expanding upwards and downwards the set of capabilities. You saw us buy discovery assets.

In fact, we completed the acquisition of the Charles River assets in the quarter. I guess that was the first part of the question to you, Mike.

Normally, our acquisitions, we had guided to a point and a half for the year. Now that we did and it's going to add what, about $75-$80 million?

To this year's revenue.

Yeah. Dave, normally the acquisition impact is usually about two-thirds Commercial, one-third R&DS.

It's about the same.

About the same for this quarter as well. Thank you.

Thank you, and congrats on a strong quarter. I want to follow up on your comments around EBITDA margin improving faster than you had expected.

Can you elaborate on that? What were some of the key operational drivers there?

Related to that, have you started to see any benefit from any productivity-related investments from AI?

Sure, Jailendra. I'll take that one.

Let me give you some color on our EBITDA margins. Yes, they expanded, as we noted, 10 basis points.

As we've started to provide a little bit more color on the composition, our operational and productivity programs are going exceptionally well, and we've said that AI is just another lever in that toolkit. That drove about 90 basis points of operational margin expansion in the quarter.

Then obviously, we had non-operational items like FX that were about 80 basis points of a drag. Not

FX. You mean

pass-throughs. Pass-throughs of 80 basis points of a drag.

Clearly, our operational productivity programs are delivering value.

Just for context, Jailendra, if you recall in the first quarter, we reported that we generated 60 bps of operational productivity improvements, net margins, but that was offset by 120 bps of negative impact from the stronger pass-through growth as well as FX.

Now

in this quarter, we had no FX, virtually negligible, but we still had pass-throughs growth, and those created a headwind of 80 bps. Now we generated 90 bps of operational, underlying margin improvement, and that led to that small, I guess, 10 bps of Adjusted EBITDA improvement.

It's also important to remember that we get leverage off of our fixed cost base as we have stronger revenues.

That's true.

Got it. Thanks, guys.

Thanks. Good morning.

Maybe just adding a little bit more dimensions to what you just talked about with the margins in the guidance, Mike, I think you said 80 basis points of non-operational headwind to EBITDA margins in the second quarter. If you could just kind of help us understand how FX and pass-throughs are going to kind of progress in terms of non-operational margin headwinds in Q3 and Q4.

Thanks.

Yeah. In the full year, I think that was the context of your question, we were pretty explicit in our guide.

You really have to look at all the moving parts that are in there. Obviously, FX tailwind reducing helps our reported margins.

We added in M&A, which is primarily Charles River, which, as has lower margins. Then we have our strong productivity programs that are delivering incremental EBITDA margin and value that are helping offset.

When you put all that together, that's where we're maintaining our flat margins for the year.

Just to be clear, FX is not helping margins. Less of an FX impact eliminates the headwind to margins that we had when we started the year.

FX, as has changed dramatically over the course of the quarter. The non-operational headwind to margins is pass-throughs, which, as come with no profit.

Thank you. One more question then?

Hi. Thank you for squeezing me in.

Hey, Ari, I wanted to ask you something. I'm not sure how quantitatively you can answer, but maybe qualitatively.

You talked about 100 basis points of better organic revenue growth in the guidance, and I'm trying to understand the whole market is getting better. You said that the market environment is strengthening.

Are you able to kind of give us an idea of how much of your guidance raise on the organic side is just a rising tide lifting all boats versus the better execution and the win rates that you're having? If you could give us some color on how we should be thinking about this.

Look, you need a good market to be able to perform. As we've been facing a lot of headwinds, macro headwinds over the past years, but there's no question, I shared some of the forward-looking demand indicators, no questions that the RFP flows which we report or indicate to you every quarter have been improving.

I didn't quite recall off of my mind the RFP flow growth in the prior one or two quarters, but if you go back and look, I'm sure they were good, probably mid to high single digits, and that kind of reflects itself now in our bookings. Now RFP flows were up double digits in the quarter, strong double digits, actually.

I think that bodes well for the future. Now of course, it's not enough to get an RFP, you also have to win.

You're right, our win rate has been ticking up significantly on the back of all of the capabilities we talked about and on the back of the fact that the EBP segment, in particular, has seen very, very strong funding growth. That usually translates 6 months to 2 years after the funding, into awards.

Again, given our strong position in the EBP segment, we're winning a fair share. That has also contributed.

Anything else, Mike, you want to add?

No, I think that's right. Next question, please.

Thank you, operator. Thank you, everyone, for taking the time to join us today.

We look forward to speaking with you again on our third-quarter 2026 earnings 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.