IQVIA Holdings Inc (IQV) Q1 2023 Earnings Call Transcript

IQVIA Holdings Inc (NYSE: IQV) Q1 2023 Earnings Conference Call  dated Apr. 27, 2023

Corporate Participants:

Nick Childs — Senior Vice President, Investor Relations and Treasury

Ari Bousbib — Chairman and Chief Executive Officer

Ron Bruehlman — Executive Vice President and Chief Financial Officer

Analysts:

Shlomo Rosenbaum — Stifel — Analyst

Anne Samuel — JPMorgan — Analyst

David Windley — Jefferiee — Analyst

Eric Coldwell — Baird — Analyst

Max Smock — William Blair — Analyst

Sandy Draper — Guggenheim Securities — Analyst

Lucas — TD Cowen — Analyst

Will Chaff — Bank of America — Analyst

Dan Leonard — Credit Suisse — Analyst

Elizabeth Anderson — Evercore ISI — Analyst

Justin Bowers — Deutsche Bank — Analyst

Presentation:

Operator

Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to the IQVIA First Quarter 2023 Earnings Conference Call. [Operator Instructions]

I would now like to turn the call over to Nick Childs, Senior Vice President, Investor Relations and Treasury. Mr. Childs, please begin your conference.

Nick Childs — Senior Vice President, Investor Relations and Treasury

Thank you, Mike, and good morning, everyone. Thank you for joining our first quarter 2023 earnings call. With me today are Ari Bousbib, Chairman and Chief Executive Officer; Ron Bruehlman, Executive Vice President and Chief Financial Officer; Eric Sherbet, Executive Vice President and General Counsel; Mike Fedock, Senior Vice President, Financial Planning and Analysis; and Gustavo Perrone, Senior Director, 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.

I would now like to turn the call over to our Chairman and CEO.

Ari Bousbib — Chairman and Chief Executive Officer

Thank you very much, Nick, and good morning, everyone. Thank you for joining us today to discuss our first quarter results. This was another quarter where we delivered again on all our financial targets. Our revenue grew 11% organic, excluding the impact of foreign exchange and COVID-related work. The diversification of our short- and long-cycle businesses allowed us to perform well in the quarter despite the broader macroeconomic dynamics. The demand environment for our industry continues to be healthy. Global clinical trial activity remains resilient and the prospects for our commercial business remain favorable. A few encouraging signs I’d like to share with you this morning, the 15 largest pharmaceutical companies together spent a record setting $138 billion on research and development in 2022. According to BioWorld, the Q1 EBP funding was $15.6 billion.

That was up double digit versus prior year and up sequentially versus Q4. March was a particularly strong month for EBP funding despite concerns about the impact from the banking crisis. FDA approvals are off to a strong start in 2023. There were 13 approvals in the first quarter. That’s up from an average of nine over the prior five years. And that’s a positive indicator for our commercial business. There was a significant M&A activity in Q1, which primarily is large pharma acquiring smaller companies and the industry expects 2023 M&A spend to be one of the largest years in the last decade. This highlights the ongoing demand for molecules by large pharma. Internally, our Q1 demand metrics show continued healthy growth. I’ll share a couple with you this morning. Net new bookings were $2.6 billion. That represented a quarterly book-to-bill of 1.28 times. As a result, our backlog reached a new record and grew 10.1% versus prior year on a reported basis and 11.3%, excluding the impact of foreign exchange.

Our RFP flow set a new quarterly record. It was up sequentially 15%, versus Q4 2022. Operationally, attrition levels have continued to decline, and they are now, in fact, back to pre-pandemic levels or slightly below that. Site selection was up double digits year-over-year. This increased productivity helped mitigate the unfavorable impact of the staff’s shortages that investigator site that we spoke about in prior calls. R&DS organic revenue growth at constant currency, excluding COVID-related work, was 17% in the quarter. That was well above the upper end of our expectations. Within TAS, we continue to see some client cautiousness related to discretionary spending. TAS growth for the quarter was 6% organic at constant currency, excluding COVID-related work, and that was within our expectations, but towards the lower end. In summary, industry demand remains healthy despite some cautiousness in discretionary spending, mostly in the short-cycle businesses.

The diversification of our businesses allows us to balance the current slower short-cycle growth with the resilience of our long-cycle businesses, demonstrating that IQVIA is a company that can operate effectively under different macro environments. And with that, as context, let me review the first quarter results. Revenue for the first quarter grew 2.4% on a reported basis, 4.7% at constant currency and compared to last year and excluding COVID-related work from both periods, we grew the top line as a company, 11% at constant currency on an organic basis. First quarter adjusted EBITDA increased 4.8%, driven by revenue growth and ongoing cost management discipline. First quarter adjusted diluted EPS of $2.45 declined slightly as expected driven by the onetime step-up in interest rates. Excluding interest expense and the U.K. tax rate headwinds that we discussed in the prior call, our adjusted diluted EPS growth exceeded 9%. I’d like to share a few highlights of business activity in the quarter.

Within TAS, a top 10 pharma awarded IQVIA, our first omnichannel marketing deal in the Asia Pacific region. IQVIA’s omnichannel marketing program provides client teams with AI ML powered insights and recommendations to deliver effective personalized digital engagements with HCP. In the quarter, IQVIA won an award for our in-home patient services offering. This biotech client is launching a new MS treatment and selected IQVIA based on our ability to deliver testing and monitoring to the patient’s home. These differentiated capabilities ease the burden for patients with limited mobility. Moving to the real-world part of our TAS business. IQVIA was awarded a major post authorization safety study to assess the impact and outcomes of prescribing a certain asthma drug to pregnant women with severe asthma. We won this large contract with a top 10 pharma client due to the breadth of our capabilities, including our relevant experience in the safety trials, our strong data and analytics capabilities and increased delivery efficiency with faster patient enrollment.

Also in the quarter, we were awarded a large global intervention study with a top 10 pharma to identify high-risk cardiovascular patients by measuring the prevalence of high-sensitivity C-reactive protein. This protein is produced by the liver in response to inflammation in the body. Elevated levels of this protein in the blood are associated with an increased risk of cardiovascular disease, including heart attack and stroke. IQVIA was selected based on our ability to connect lab and clinical capabilities with therapeutic and real-world expertise in a cost-efficient manner. This study will have a significant impact on the future management of cardiovascular patients. Moving to R&DS. Continued strong momentum with our $2.6 billion of net new bookings in the quarter, translating into a book-to-bill of 1.28 times in quarter, which brings our LTM book-to-bill to 1.35 times. A few highlights in the quarter.

Oncology continues to be our largest therapeutic area. And in the quarter, a high-profile cutting-edge biotech company entered into a strategic partnership with IQVIA. This is a big deal. In fact, we were already awarded our first trial, which is for a novel bispecific antibody with potential development opportunities across several tumor types. Bispecific antibodies are designed to bind two different target molecules simultaneously. This project will leverage our end-to-end clinical trial solution, including protocol design, specialized medical and regulatory expertise, biomarker development and our integrated clinical operations, analytics and technology. We really are the only company with the ability to bring together these capabilities which, in turn, helped the client optimize trial design and reduce time to market. Importantly, going forward, this partnership creates multiple opportunities within this client’s large oncology portfolio.

We continue to have strong success with our clinical FSP trials business with several recent notable wins, including a significant preferred provider award with a major pharma. This was a competitive win against two incumbents and it further diversifies our portfolio of FSP clients and increases our share in that segment. We continue to deploy innovations in our clinical technology suite. Most recently, we introduced a new cloud-based platform within our research site network that will streamline document workflows and allow real-time collaboration among study teams. We already deployed this new technology to approximately 15% of IQVIA network sites across 28 countries, and we expect to deploy it to 40% of our sites in the next 12 months.

The goal of deploying this technology at the site is to increase site productivity, which frees up more time for site support, compliance reviews and continuous monitoring of patient safety and study quality all of which are very important, especially in an environment where we experienced staff shortages at the site. Finally, a couple of nice accolades for our global IQVIA team. First, I am proud to share that our lab business received the prestigious Singaporean President Certificate of commendation, which is awarded to organizations that had a significant impact in the fight against COVID-19. In fact, five of our employees in Singapore received a Public Service Medal Award for their outstanding contributions to manage the impact of the pandemic. This is a nice recognition of the unique role we play in supporting public health. Second, our Scotland-based lab business recently achieved a global green lab certification for its commitment to practicing sustainable science. This certification is recognized by the United Nation’s “Race to Zero” global campaign as the international gold standard for lab sustainability best practices towards a zero carbon future.

I will now turn it over to Ron for more details on our financial performance.

Ron Bruehlman — Executive Vice President and Chief Financial Officer

Thanks, Ari, and good morning, everyone. Let’s start by reviewing revenue. First quarter revenue of $3.652 billion grew 2.4% on a reported basis and 4.7% at constant currency. In the quarter, COVID-related revenues were approximately $150 million, which was down about $230 million versus the first quarter of 2022. In our base business, that is excluding all COVID-related work from both this year and last, organic growth at constant currency was 11%. Technology & Analytics Solutions revenue was $1.444 billion, up 0.3% reported and 2.9% at constant currency. Excluding all COVID-related work, organic growth at constant currency in TAS was 6%. R&D Solutions revenue of $2.026 billion was up 4.8% reported and 6.5% at constant currency and excluding all COVID-related work, organic growth at constant currency in R&DS was 17%. Finally, Contract Sales and Medical Solutions or CSMS revenue of $182 million declined 6.7% reported and 1% at constant currency. And excluding all COVID-related work, the organic growth decline at constant currency was also 1% in CSMS. Let’s move down to P&L. Adjusted EBITDA was $851 million for the first quarter, that’s growth of 4.8%. GAAP net income was $289 million, and GAAP diluted earnings per share was $1.53.

Adjusted net income was $462 million in adjusted earnings per share diluted was $2.45. So as already highlighted, R&D Solutions continues its strong momentum. This graph shows the growth of our backlog over the past three years, which demonstrates the sustained growth of our clinical business. Our backlog at March 31 stood at a record $27.9 billion which was up over 40% over the last 3 years and growing 10% year-over-year. Okay. Reviewing the balance sheet. At March 31, cash and cash equivalents totaled $1.494 billion. Gross debt was $13.176 billion, and that resulted in net debt of $11.682 billion. Our net leverage ratio ended the quarter at 3.4 times trailing 12-month adjusted EBITDA. First quarter cash flow from operations was strong at $417 million, and capex was $164 million, resulting in free cash flow of $253 million. In the quarter, we repurchased $129 million of shares, and that leaves us with slightly over $1.2 billion remaining under the current program. Okay. Let’s go now to the guidance. Guidance for the full year 2023 remains unchanged. We continue to expect revenue excluding COVID-related work to grow organically at constant currency between 9% and 11%. And this revenue guidance continues to assume about 100 basis points of contribution from acquisitions and approximately $600 million of COVID-related revenue step down versus 2022.

We’re also reaffirming our guidance on adjusted EBITDA of $3.625 billion to $3.695 billion, and that represents year-over-year growth of 8.3% to 10.4%. Lastly, we’re reaffirming our guidance on adjusted diluted EPS of $10.26 to $10.56. And this adjusted diluted earnings per share guidance includes a year-over-year impact of the step-up in interest rates and the increase in the U.K. corporate tax rate. And together, these nonoperational items impact the year-over-year growth rate by approximately 10 percentage points. Excluding these items, adjusted diluted earnings per share is expected to grow 11% to 14%. Let’s move to our second quarter guidance. In Q2, we expect revenue to be between $3.675 billion and $3.750 billion. That’s growth of 3.7% to 5.8% on a constant currency basis and 3.8% to 5.9% on a reported basis. Adjusted EBITDA is expected to be between $850 million and $875 million, which would be up 6.3% to 9.4%, and adjusted diluted EPS is expected to be between $2.30 and $2.44, declining 5.7% to flat on a year-over-year basis. And keep in mind that the second quarter is the toughest compare for interest expense because we had a very favorable $1 billion swap roll off on March 31.

It was also a year ago that rates started rising. So excluding the step-up of an interest expense and the increased U.K. tax rate, we expect adjusted diluted EPS to grow between 8% and 13% in the second quarter. Now all of our guidance assumes that foreign currency rates as of April 25 continue for the balance of the year. So to summarize, Q1 was another solid quarter of financial performance. We delivered revenue growth of 11% organic, excluding the impact of foreign exchange and COVID-related work. Underlying demand in the industry and in our business remains healthy with our RFPs accelerating in Q1 up 15% sequentially versus Q4 2022. And quarterly net new bookings were $2.6 billion, and our industry-leading backlog reached a new record of $27.9 billion, representing growth of over 10% year-over-year. We’ve been navigating well through the choppy macro environment and delivering on our numbers. Despite some of the cautiousness we’ve observed in the short-cycle discretionary spend, thanks to the resilience and the rest of the portfolio, which is mostly the long cycle and thus less affected by macro turbulence. Therefore, we are reaffirming our full year guidance of 9% to 11% organic revenue growth at constant currency, excluding COVID-related work and 11% to 14% adjusted EPS growth, excluding nonoperational items.

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

Questions and Answers:

Operator

[Operator Instructions] Your first question comes from the line of Shlomo Rosenbaum at Stifel. Your line is open.

Shlomo Rosenbaum — Stifel — Analyst

Hi. Thank you very much for taking my question. Ari, can you talk a little bit about the nature of the backlog burn? You had very strong bookings, you got strong book-to-bill, but the amount of revenue expected to — or backlog to convert to revenue, it seems kind of consistent for this quarter to last quarter? Or is there any — is there a change of mix over there? Is that a rounding item? Or is there something else that might be going on over there?

Ari Bousbib — Chairman and Chief Executive Officer

Yes. Thank you, Shlomo. No. Look, we had very strong bookings. It was one of our highest bookings quarter and I wouldn’t read anything. It’s not the first time, by the way, that Q1 next 12 months revenue from bookings is essentially flat to Q4. Next 12 months bookings, I can’t detect any seasonality to that, but it’s not the first time it happened. So I wouldn’t read anything into it at all. It’s just a question of mix, months of pass-throughs that are taken into the quarter or delayed. And we’re reverting to more regular mix of projects with, as you know, an increasing share in oncology, which typically burn a little slower. That might have a little bit at the margins of an impact. But I wouldn’t read anything into it.

Shlomo Rosenbaum — Stifel — Analyst

Okay. Thank you.

Ari Bousbib — Chairman and Chief Executive Officer

Thanks Sholomo.

Operator

Thank you. Your next question comes from the line of Anne Samuel of JPMorgan. Your line is open.

Anne Samuel — JPMorgan — Analyst

Hi. Thank you so much for taking the question. I was hoping maybe you could speak to some of the dynamics within the TAS business. In the fourth quarter, the analytics and consulting business was impacted, but some of that maybe seems like it was unique to December purchasing patterns. So how much of this is carryover from what you saw in the fourth quarter? And then what’s driving your confidence that it’s going to come back in the remainder of the year so that you could hit your guidance?

Ari Bousbib — Chairman and Chief Executive Officer

Yes. Thank you, Anne. It’s a good question. Look, TAS growth in the first quarter was within the range we expected. You are correct that the guidance we gave on an organic constant currency ex COVID basis for the year, I think our guidance is 7% to 9%. And therefore, 6% clearly is right under that. But we did tell you that we did fully expect Q1 to be just under that. So our expectations were more in the 6% to 7%, 6% to 8% for the first quarter and we expected a slower start as you suggest, due to the cautiousness we saw in December in customers’ discretionary spending and so we assume this was going to spill over, as you suggest, into the Q1, and that’s why we assume a slower start in the year for this business. The reason why it’s a little lower than our long-term growth expectation is due to the analytics and consulting business piece of TAS. That is about, I want to say, just under 25% of the total business in TAS. And as we said many times before, it’s the shortest cycle and contains the most discretionary spend activity of the entire TAS portfolio. So what we are seeing is not cancellations of projects, not decisions to not conduct the projects.

For the most part, these are projects that need to be done, pricing and market access studies, as an example, have to be done at some point. But the discretionary aspect applies to timing for the most part, okay? No one does a project that they don’t need to do. These are products that need to be done, but they don’t need to be done right this second. And we are seeing customers delaying decisions and pushing things to the right. That is what gives us confidence that in the latter part of the year, those projects will have to be done. So that’s why we maintain our 7% to 9% organic constant currency ex COVID guidance for the year. Now we expect that cautiousness to continue into the second quarter. And we’re assuming growth so far in line with the first quarter. Again, we’re not seeing any customers walking away from projects or canceling anything. It’s just consistent with what we saw at the end of Q4, delaying a project. We do expect the situation to improve in the second half because the pipelines are stronger and the customers eventually need to actually spend on those projects.

Anne Samuel — JPMorgan — Analyst

That’s extremely helpful color. Thank you so much.

Ari Bousbib — Chairman and Chief Executive Officer

Thank you.

Operator

Your next question comes from the line of David Windley at Jefferies. Your line is open.

David Windley — Jefferiee — Analyst

Thank you for taking my question. Good morning. Ari, I wondered if you could talk in the R&DS business. As you highlight, strong bookings, I guess, seasonally different from the fourth quarter. The thing that we’re seeing, I guess, in our data review is that a lot of studies, similar to what you’re describing in TAS in consulting that a lot of studies are kind of sitting in a limbo point and not moving forward into first patient in and kind of more productive revenue stages of the trial. And I wondered if you have some insights into that. And if any of your tools can help them move those forward? Or is it kind of a funding and financial issue that is keeping them from moving forward? I’d be curious your views there.

Ari Bousbib — Chairman and Chief Executive Officer

Okay. Well Dave, thanks for the question. I want to use the opportunity to state as clearly and definitively as I can. We simply are not, I repeat, we are not seeing any of what you suggest. And no one is — first of all, on the funding question, I don’t know how many times I’m going to repeat it. I’ve been doing this for five quarters in a row. We are not seeing any funding issue. In my introductory remarks, I share some of the statistics. Actually everything is up on the funding front. So we are not seeing any delays, any unusual cancellations, any postponing of decision-making within our portfolio. It could be that others are saying that we just are not seeing it. Once again, the overall RFP flow is at a record high. It’s up 15% sequentially versus Q4 of ’22 both the mid and the EBP segments are up strong double digits.

I said before, it’s up 15%. The qualified pipeline, which is, again, an even earlier indicator, is up almost up 8%. It’s actually over 8% year-over-year, and it’s almost $15 billion with, again, a record qualified pipeline. The total pipeline is over $25 billion. Also with more than 5% growth year-over-year, $2.6 billion of net bookings in the quarter, it’s more than the entire backlog of some of our smaller competitors out there. Our book-to-bill 1.28 times is extremely strong in the current environment. And I think from what I’ve seen, the highest of any of our peers. Our backlog is up more than 10% year-over-year. That’s on a reported basis. Excluding FX, it’s up 11.3%. So again, what I’m trying to share some metrics with you here, if we look at by segment, again, it’s across the board, large mid EBP. I’ve got a lot of numbers here, but everything is — honestly, everything is green here. Nick, do you have any other color to add to this?

Nick Childs — Senior Vice President, Investor Relations and Treasury

Yes. I guess, Dave, I think the only thing I would say there is — we saw your question sort of earlier this week and talked to the team, and we’re not seeing any sort of slowdown in terms of clients not wanting to start trials. I mean as soon as they’re signing and pushing and getting ready, they are pushing trials forward. So we’re not seeing any delays, clients trying to slow down starts. We are seeing same trials move forward and not — and not seeing the dynamics that you’re asking about.

Ron Bruehlman — Executive Vice President and Chief Financial Officer

Yes. And Dave, if there’s any slowness anywhere, it’s just in some of the execution because of the labor issues at some of the sites. That would be the one place where we could burn faster and the industry could burn faster if there weren’t the labor issues at the site.

Ari Bousbib — Chairman and Chief Executive Officer

Right. And as I mentioned in my introductory remarks, we have been able to offset some of that unfavorable impact of staff shortages that Ron just brought up and we talked about before because site selection has been accelerating. I mentioned it was up double digits year-over-year and that increased productivity helped us in the quarter, and we expect we’ll continue to do so the rest of the year. We also — I mentioned also in my introductory remarks, are introducing rapidly more technology at the site in order to free up personnel time and increase our productivity.

David Windley — Jefferiee — Analyst

Yes. Very, very fulsome answer. If I could just add to that. I mean, there’s been a lot of companies this week that have attributed weakness to — I mean, there are a lot of other companies seeing dramatic slowdowns. Maybe you could talk about how your positioning or your stage of the pipeline is different that also protects you from what they are seeing, Thermo, Danaher, Sartorius, etc..

Ari Bousbib — Chairman and Chief Executive Officer

Yes. I mean the answer is in your question. We have a very strong momentum. We operate the vast majority of what we do is in the sweet spot of the clinical trial process, it’s Phase III stuff. We’re not affected by the primate issue, 0. And even in the primate issue continues for the next three years, you wouldn’t see it at all in our numbers. We’ve already looked at that. And we continue to gain share. I know I gave examples on the FSP segment, it’s true across the board in oncology, we just are winning in the marketplace. We displaced incumbents in a number of occasions with large clients. I think I don’t see any — really no issues whatsoever on the R&DS front, not say for the execution and operational issues we have encountered. I mentioned that the attrition levels are coming down. I mean, I said before that the peak of the attrition a year ago, so we had more than 20% attrition, which is horrendous and we’re now back to — I said pre-pandemic levels, actually well below that, which is barely over 10%, which is amazing and very good. And that enables us to do a lot more work, a lot faster. Thank you, David.

David Windley — Jefferiee — Analyst

Yes. Thank you.

Operator

Your next question comes from the line of Eric Coldwell at Baird. Your line is open.

Eric Coldwell — Baird — Analyst

Thanks. Good morning. I want to hit on reimbursables on a couple of fronts. First off, on revenue was such a big COVID comp this quarter, I would have expected less reimbursable revenue, it looks like it actually grew quite a bit faster than service revenue. So what is the dynamic there? We’re seeing mixed bag all over the industry in terms of the pass-through volatility with that big COVID headwind, I would have expected less you did more. Is there something underlying or outside of COVID exposure that’s driving the reimbursables higher? Or is it just company-specific contract timing?

Ari Bousbib — Chairman and Chief Executive Officer

Okay. Well, look, on a full year basis, we’re expecting actually obviously less reimbursable expenses because of the disappearance of the COVID work, which was, as you suggest, very high pass-through expenses for those COVID vaccine trials. I wouldn’t read much in the quarter because this volatility and depends on the mix of what you executed. So I don’t — I’m not — to be honest, the book-to-bill is more or less similar to we — I think you — I read you know, I religiously do that before the call, your first flash note and you asked why we only reported our 606, our book-to-bill at 1.28 times. And by the way, I asked the same question to the team when they gave me the first draft and I agree with the rationale.

As you’ve seen in recent quarters, essentially the numbers have tended to converge, which is essentially what we expected to happen. We will give you the breakdown or the ex reimbursable expenses book-to-bill, when we think there is — when there is a big discrepancy and it is a significant and helps give you understanding of what happened in the quarter in terms of bookings. But if it’s very close as it was last quarter as it is this quarter, which is not going to do that. The change to 606 standard that happened more than five years ago and none of our competitors actually disclosed that level of granularity or report any extra reimbursable expenses of book-to-bill. But again, I wouldn’t read and you might more here in the quarter, Nick or Ron, any commentary or color on Eric’s question.

Ron Bruehlman — Executive Vice President and Chief Financial Officer

Yes. Look, we did have a little bit higher revenue from pass-throughs in the quarter. But as Ari said, I wouldn’t read too much into the quarter-to-quarter and over a longer time period, you’re analysis is correct with COVID work rolling off, there should be a decline in pass-through revenues. And yes, it’s exactly on the book-to-bill. We just — we’re what five years in 6, seven years in now since the change in the accounting and we’ll only talk to on the book-to-bill, the services versus pass-through book-to-bill on the 605 versus 606 when there’s a significant difference to talk about, and there wasn’t this quarter.

Ari Bousbib — Chairman and Chief Executive Officer

Yes. And Eric, the — just on the past because again, we — I mentioned we did execute faster this past quarter on our R&DS backlog. It’s true we burnt — we accelerated. That’s a — this is why we recognize more revenue. And as a result, there were more pass-through during the first quarter. I don’t know that it’s going — I don’t think you’ll see the same in the next few quarters based on the modeling I saw.

Eric Coldwell — Baird — Analyst

Thank you. Can I have one follow-up?

Ari Bousbib — Chairman and Chief Executive Officer

Normally, no, but it’s you. Go ahead.

Eric Coldwell — Baird — Analyst

I just wanted to hit on cash flow and expectations for the year, and we’re juggling through overlapping reports here. So I’m sorry if I missed this. Did you mention what the DSO was in the quarter?

Ron Bruehlman — Executive Vice President and Chief Financial Officer

No, we didn’t give an explicit DSO number. In fact, we don’t typically give a DSO number. You guys can back calculate. We were happy with the cash flow in the quarter. One thing I would want to remind everyone is in the first quarter, it’s typically a weak quarter for cash flow because most of our incentive comp — annual incentive comp is paid in the first quarter. Yes, there’s some tax impacts too. Incentive comp is probably the biggest, but…

Ari Bousbib — Chairman and Chief Executive Officer

That was very strong.

Ron Bruehlman — Executive Vice President and Chief Financial Officer

It was strong. We were happy with our cash flow and not quite as strong as last year, but last year was an unusually strong first quarter for cash flow.

Ari Bousbib — Chairman and Chief Executive Officer

Yes. [Indecipherable] improved its flattish, right?

Ron Bruehlman — Executive Vice President and Chief Financial Officer

DSOs on a quarter-to-quarter basis is fairly flattish. On a year-over-year basis, it’s up a little bit and a lot of that has to do with the burning through the COVID-related advances that we got. So it was fully expected.

Eric Coldwell — Baird — Analyst

Got it. Thanks very much. Appreciate it.

Ari Bousbib — Chairman and Chief Executive Officer

Thank you.

Operator

Your next question comes from the line of Max Smock at William Blair. Your line is now open.

Max Smock — William Blair — Analyst

Hi. I just wanted to clarify your comment in response to one of Dave’s questions earlier about the NHP situation. And I just wanted to clarify, you said that you would not see any impact from the NHP shortage even if it continues for the next three years. Just wondering, at some point, wouldn’t that limit the number of drugs getting into later-stage trials here. Just would be great to hear more about the work you’ve done internally to kind of evaluate your potential exposure over the next couple of years.

Ari Bousbib — Chairman and Chief Executive Officer

Again, in theory, yes, but we don’t expect that to happen. I mean there will be eventually other models, and they will become available. I mean, I don’t — we’re not worried about this at all.

Ron Bruehlman — Executive Vice President and Chief Financial Officer

Yes. The three years just related to the length of time it takes to get from the discovery work in the Phase II and Phase III trials. There’s a long delay between that. So yes, of course, theoretically, if there is a protracted issue, it affects everybody in the industry. We don’t expect that to happen.

Max Smock — William Blair — Analyst

Okay. Great. Thank you.

Operator

Your next question comes from the line of Sandy Draper at Guggenheim Securities. Your line ks now open.

Sandy Draper — Guggenheim Securities — Analyst

Thans bery much. I think it sounds like I need to get on Eric’s distribution list. I can get his quick flash notes. I can’t process fast enough to do that. So my question, Ari, or maybe Ron, is on the backlog burn. I’m trying to reconcile what you were talking about in answer to question. On my calculation, it looks like the backlog burn stepped down a little bit from the fourth quarter from 8% to 7.4%. My assumption was there’s a little bit less sequentially in terms of reimbursables. So I just wanted to verify that. But then thinking about how you’re expecting the backlog burn to play out as you have less COVID work, et cetera, which is faster burning, do you think is it reasonable to think stable off of this 7.4% Or would it sort of trend down over the course of the year?

Ron Bruehlman — Executive Vice President and Chief Financial Officer

Look, I wouldn’t put a lot of emphasis on quarter-to-quarter backlog burn as you calculate it there. It’s not something that we pay a lot of attention to internally. I can tell you, you’ll get variations like in the fourth quarter, we had very strong pass-through bookings, which pushes up the backlog some, but then those tend to burn later in the trial. And you’ll see impacts like that affect any one quarter, like particularly the next quarter’s burn rate. So overall, as Ari made the point, we tend to work on more complicated trials in oncology trials, in particular, tend to be longer, slower burn trial. So we may have slower burn on average than some of the others in the industry based upon our particular mix of projects, but that’s more a macro long-term consideration than it is a quarter-to-quarter sort of variation driver.

Sandy Draper — Guggenheim Securities — Analyst

Okay. Great. That’s helpful. Thanks Ron.

Operator

Your next question comes from the line of Charles Rhyee from TD Cowen. Your line is now open.

Lucas — TD Cowen — Analyst

Hi. This is Lucas [Phonetic] on for Charles. I want to dig into the TAS segment. You guys talked about consulting and analytics seeing some softness in 1Q. You guys also called out some wins in real-world evidence. Can you talk more about the performance of the other offerings within TAS and how they performed in 1Q, more specifically real-world evidence and technology platforms?

Ron Bruehlman — Executive Vice President and Chief Financial Officer

Look, our real world and technology, we tend to talk about them together because they’re the faster growers and continued to be very solid growers in the quarter. As Ari pointed out, it was the analytics and consulting business that really slowed down in the quarter because a lot of that is shorter cycle business and can be delayed. We’ve always talked about information being a slower grower. So you know about that. And so you kind of piece it together, the difference versus prior quarters really relates to the analytics and consulting business, some of that shorter cycle business being delayed. It’s really as simple as that. That’s why we saw a little bit of a slowdown in the underlying core growth rate in the TAS business. Next question.

Operator

Your next question comes from the line of Derik De Bruin of Bank of America. Your line is now open.

Will Chaff — Bank of America — Analyst

Hi.This is Will Chaff on for Derik. Thanks for taking the question. I know in the prepared remarks, you flagged that there has been a pickup of biotech M&A, which obviously is helping the funding environment. But I’m wondering what you’re seeing in terms of the larger of the acquirer than reducing the R&D spend at the target. Is there any impact to you from that? Yes, if you could just explore those dynamics, that would be great.

Ari Bousbib — Chairman and Chief Executive Officer

Yes. Thank you. Just to clarify, the M&A spend has nothing to do with funding. It’s not included in the funding numbers. So these are two different and independent points. The heightened M&A activity is a plus, obviously, and is a tailwind for us. As you know, we’ve got large clients that are buying molecules for which work needs to be done. So this is generally a favorable trend for us. Thank you.Next question please.

Operator

Your next question comes from the line of Dan Leonard at Credit Suisse. Your line is now open.

Dan Leonard — Credit Suisse — Analyst

Thank you. I was just hoping you could revisit that comment you made that RFPs grew 15% sequentially and I assume that’s a volume number. And is there any difference between RFP volume trends and value trends? Thank you.

Ari Bousbib — Chairman and Chief Executive Officer

Thank you. No, your assumption is incorrect. The growth numbers we mentioned are in dollars.

Nick Childs — Senior Vice President, Investor Relations and Treasury

Yes. So all the growth numbers that we’ve given, Dan, on the call are all dollar-based. It’s not a volume.

Ron Bruehlman — Executive Vice President and Chief Financial Officer

And that’s how we tend to track it because that’s what’s important.

Dan Leonard — Credit Suisse — Analyst

Thank you.

Operator

Your next question comes from the line of Elizabeth Anderson at Evercore ISI. Your line is now open.

Elizabeth Anderson — Evercore ISI — Analyst

Hi guys. Thank you so much for the question. I know you said you just talked about it in terms of total dollar volume. I was just wondering if you could comment on the contribution in terms of pricing and R&DS to the dollars this year? And then secondly, just in terms of the pacing of TAS revenue over the back half of the year. Are you still thinking we should see that continue to accelerate be sort of in that like sort of mid- to high single-digit type range?

Ari Bousbib — Chairman and Chief Executive Officer

Yes. The comment on TAS is just correct. That’s our expectation currently based on the pipeline. What was the first question? I’m sorry.

Nick Childs — Senior Vice President, Investor Relations and Treasury

Yes, I didn’t hear your first question there, I’m sorry.

Elizabeth Anderson — Evercore ISI — Analyst

Sure. It was just in terms of the contribution of sort of increases in pricing that could have contributed to the first quarter revenue results on a year-over-year basis.

Ari Bousbib — Chairman and Chief Executive Officer

Nothing was negligible.

Nick Childs — Senior Vice President, Investor Relations and Treasury

Yes. I mean I wouldn’t say if anything large, Elizabeth. I mean, again, you got to remember, trials are kind of vary from three to five years, it takes a while for all the pricing to pick up. We don’t get that all and get it all upfront. So the pricing leads in over the course of the trials. Okay. And we will take one more question, please.

Operator

Thank you. Your final question comes from the line of Justin Bowers at Deutsche Bank. Please go ahead.

Justin Bowers — Deutsche Bank — Analyst

Thank you. And good morning. Just sort of a 2-parter. One with RWE, are you seeing any change in the velocity of demand there for that business, hearing in the marketplace that IRA might be a bit of a tailwind for that? And then can you also sort of educate us a little bit on the lead time between when market access and pricing studies are done and with respect to FDA approvals?

Ari Bousbib — Chairman and Chief Executive Officer

Yes. Thank you, Justin. On the first question, Nick, do you have any…

Nick Childs — Senior Vice President, Investor Relations and Treasury

You said the growth on real world — nothing different.

Ron Bruehlman — Executive Vice President and Chief Financial Officer

Remains strong.

Ari Bousbib — Chairman and Chief Executive Officer

Remains very strong, same. Nothing — really nothing changed on the real-world side. On the — it really, really varies. There are clients who like to start even before FDA approval, sometimes well before when the early results are strong, data is good in the trial, they get — they want to get prepared. And we do those studies early, sometimes it’s around the time of the FDA approval. Sometimes it’s a little later. Again, it depends, by the way, it depends on the market. Some clients may decide to introduce a drug in Europe or in some markets in Europe before others, et cetera, and it has to do with when the approvals in specific geographies occur. So it really varies. There’s no [Indecipherable] set lead time. And that’s why, again, “discretionary” it’s going to have to be done, but you can delay when you do it.

Justin Bowers — Deutsche Bank — Analyst

Yes. I appreciate it. And just on RWE, just some of the things we’re picking up in the field is that sponsors are leaning into those more or are thinking about leaning into those more as it relates to the IR legislation? And if I may, just on R&DS, just a quick follow-up there. Are you guys on the market share gains that you’re making there? Is there any specific area? Or is it — are you seeing it across the board in both full service and FSP.

Ari Bousbib — Chairman and Chief Executive Officer

Okay. Justin, thank you for your four questions. And I’m just going to answer briefly the last one, and then I suggest that the team will be available here the rest of the day and the next few days to answer any further questions. But the — on your question about market share, there’s no way around it. I’ve said it before, and we again did this quarter. We have a high — the highest book-to-bill ratio around on the largest base revenue, you can assume that there is a gain share that’s ongoing. The specific segments, I mentioned in my introductory remarks, in oncology, we know we are growing a lot faster and we are gaining share, that’s by therapeutic area. And then in terms of the segments, again, it’s across the board, but it was particularly significant this past quarter in FSP as well. So that’s the color I can give you on share. Thank you.

Operator

At this time, there are no further questions. Mr. Childs, I’ll turn the call back over to you.

Nick Childs — Senior Vice President, Investor Relations and Treasury

Thank you, everyone, for joining us today, and we look forward to speaking to you again on our second quarter earnings call. Myself and the team will be available the rest of the day to take any other follow-up questions you might have. Thanks, everyone.

Operator

[Operator Closing Remarks]