Large Cancellation Impact
Q: What's the impact of the large cancellation on revenue and bookings?
A: The company experienced an unusually large cancellation of about $0.25 billion—much higher than the typical $15–$20 million cancellation. Despite this, gross bookings before cancellations were the second highest in our history. We are large enough to absorb such a cancellation without changing our guidance, and any adjustment is entirely due to FX. The underlying business remains very strong.

R&D Pricing and AI Advantage
Q: Are you seeing more pricing discipline from peers, and how is AI impacting your business?
A: There's been no significant change in pricing; we continue to face pressure from clients, particularly large pharma companies focused on cost reductions. Regarding AI, it offers massive opportunities. We've been leveraging AI to accelerate clinical development timelines, especially in oncology and rare diseases. Some of our Emerging Biopharma (EBP) wins are a direct result of these capabilities.

TAS Recovery and Drug Approvals
Q: How should we think about TAS recovery and its relation to drug approvals?
A: The TAS business is performing as expected, with an anticipated improvement in the back half of the year. Last year saw 55 approvals, the highest level since 2017 or 2018. New launches drive significant spend over the following five years, with about 50% occurring in the first two years. Our pipeline is higher than it has ever been, indicating optimism for the outlook in 2024.

RFP Flows and Pipeline Outlook
Q: Were RFP flows in line with expectations, and what about future book-to-bill?
A: Yes, RFP flows were consistent with our expectations. Large pharma RFP flow was up in the high single digits, while EBP saw mid-single-digit growth, depending on therapies. Awards grew well into the teens, driven by large full-service trials and strong EBP. Our qualified pipeline is up double digits and at a record high.

FSP vs. Full-Service Models
Q: What's the state of play between FSP and full-service models, and impact on margins?
A: FSP comprises about 15% of our total Research & Development Solutions (R&DS) revenue. Excluding pass-throughs, it's between 20–25% and continues to grow by a point or two each year. While FSP margins are lower, we've been offsetting this with cost reductions and efficiency improvements to continue increasing margins.

Salesforce Partnership Reaction
Q: How have customers reacted to the Salesforce partnership?
A: Customers have reacted very favorably. We have over 400 clients and about 100,000 seats in our CRM market. The partnership aims to develop the next-generation product based on Salesforce's new Life Science Cloud. Existing customers will be supported for at least the next five years, and we've recently won significant new business, displacing a dominant competitor.

Functional Service Provider Trends
Q: Do you expect FSP percentages to change over time?
A: FSP percentages may grow slowly but are not expected to reach 100%. The business ebbs and flows, and we don't see a long-term trend toward complete FSP adoption. It's a slow-moving business with most revenue still coming from full-service programs.

IRA Impact on Clinical Trials
Q: Are companies running multiple trials due to the IRA?
A: In the specific case mentioned, the decision to run two simultaneous oncology studies was not due to the IRA. However, clients are trying to accelerate timelines to maximize revenues before intellectual property protections expire, which may lead to launching several programs simultaneously.

Quarterly Surprises
Q: What surprised you this quarter on the upside or downside?
A: There were no surprises this quarter; everything came in exactly as we thought. The nature of our business is predictable, and we prefer it that way.