아이큐비아(IQV) 2026년 3분기 실적 발표회: 사상 최대 R&D 수주 실적 및 가이던스 상향

핵심 요약

• 3분기 매출은 전년 동기 대비 8.0% 증가한 44억 2,800만 달러를 기록했으며, 고정환율 기준으로는 8.6% 증가했습니다. 자체 사업(Organic) 매출 성장률은 약 6%였습니다.
• 조정 EBITDA는 8.7% 증가한 10억 3,200만 달러를 기록했으며, 조정 EBITDA 마진은 20bp 확대되었습니다. 조정 희석 EPS는 11.3% 증가한 3.34달러를 기록했습니다.
• R&D 솔루션 순신규 수주액은 전년 동기 대비 15% 증가한 32억 달러를 기록해 4년 만에 분기 최고치를 달성했으며, 수주출하비율(book-to-bill ratio)은 1.2배를 기록했습니다.
• 최근 12개월 R&D 솔루션 순신규 수주액은 5분기 연속 증가해 14% 늘어난 117억 달러를 기록했습니다. 수주 잔고 기준 향후 12개월 매출은 10% 증가한 94억 달러를 나타냈습니다.
• 잉여현금흐름은 조정 순이익의 120%에 해당하는 6억 6,700만 달러였습니다. 분기 말 순차입금 비율은 최근 12개월 조정 EBITDA 대비 3.45배를 기록했습니다.
• 경영진은 매출, 조정 EBITDA 및 조정 희석 EPS에 대한 2026년 전체 실적 전망(가이던스)을 상향 조정했습니다. 또한 회사는 현재까지 415개의 AI 에이전트를 도입했다고 밝혔습니다.

주요 재무 데이터

연초 대비 누적 매출은 보고 기준 8.4%, 고정환율 기준 7.7% 증가한 129억 4,700만 달러를 기록했습니다. 조정 EBITDA는 총 29억 5,800만 달러를 기록했으며, 조정 희석 EPS는 10.4% 증가한 9.38달러를 기록했습니다.

사업 및 운영 실적

R&D 솔루션이 성장의 주요 기여 요인이었습니다. 자체 사업 매출은 전년 동기 성장률의 거의 3배에 달하는 7% 가까이 증가했습니다. 경영진은 수주 호조의 원인으로 풀서비스 아웃소싱 및 기능적 서비스 제공(FSP) 업무 전반의 광범위한 수요, 수주 성공률 개선, 대형 제약사와 EBP 고객 모두의 활발한 활동을 꼽았습니다.

경영진은 연초 대비 EBP 자금 조달 규모가 85% 이상 증가한 900억 달러에 달했으며, 임상시험 개시 및 RFP 유입은 높은 한 자릿수 비율로 증가했다고 밝혔습니다. 아이큐비아의 수주 성공률은 약 2~3%포인트 개선되었습니다.

상업 솔루션 자체 사업 매출은 전년 동기 성장률의 2배인 4% 증가했습니다. 정보 제공, 분석 및 컨설팅, 기타 상업 서비스 전반에서 성장이 보고되었습니다. 경영진은 상업적 파이프라인이 사상 최고 수준을 유지하고 있으며 수주 성공률이 높아지고 고객의 의사결정 기간이 지속적으로 단축되고 있다고 말했습니다.

AI는 계속해서 핵심 운영 주제였습니다. 아이큐비아는 국가 및 임상시험 기관 모델링, 프로토콜 최적화, 환자 서비스, 실사용 헬스케어 데이터 분석용 도구를 포함하여 415개의 에이전트를 도입했습니다. AI 기반 임상 모델링 도입 사례 중 하나는 다중 연구 임상 3상 프로그램을 9개월 단축할 것으로 예상되었습니다.

경영진은 상업용 AI 제품을 서비스, 에이전트 구독, 라이선스를 통한 추가 매출 기회로 규정했습니다. R&D 분야에서 AI는 개발 기간 단축, 가시성 향상, 실행 리스크 감소에 활용되고 있습니다. 또한 아이큐비아는 생산성 향상과 장기적인 마진 확대를 지원하기 위해 재무, 인사, 소프트웨어 개발 및 테스트 분야 등 내부 전반에 에이전트를 도입하고 있습니다.

경영진 실적 전망

매출 가이던스는 완료되었거나 예정된 인수합병의 기여도 약 250bp와 연간 약 20bp의 환율 순풍 효과를 가정합니다. 경영진은 환율이 4분기 매출에는 약 70bp의 역풍으로 작용할 것이라고 말했습니다.

4분기 실적 모델링을 위해 경영진은 약 2억 1,000만 달러의 순이자 비용, 1억 6,000만 달러를 약간 상회하는 감가상각비, 약 1억 6,900만 주의 가중평균 희석 주식 수를 예상하고 있습니다. 이러한 가정은 남은 연도에 대해 10월 26일 기준 환율을 적용합니다.

경영진은 4분기 비교 기준이 까다롭다고 경고하며, 제시된 성장률을 사업 둔화로 해석해서는 안 된다고 밝혔습니다. 2027년에 대한 전반적인 틀은 12월 1일 아이큐비아의 투자자의 날에서 발표될 예정이며, 세부 가이던스는 2027년 2월 4분기 및 2026년 전체 실적 발표와 함께 공개될 계획입니다.

리스크 및 주목할 점

• 통과 매출로 인해 총마진이 약 70bp 감소했습니다. 추정 10bp의 환율 효과를 포함하여, 경영진은 순 비영업적 마진 역풍을 약 60bp로 설명했으며 이는 약 80bp의 영업적 개선으로 상쇄되었습니다.
• 아이큐비아는 대체로 장기간 비활성 상태였던 프로젝트를 검토한 후 R&D 수주 잔고에서 약 21억 달러의 비활성 임상시험을 제거했습니다. 이 조정은 과거 실적, 2026년 가이던스, 순신규 수주액 또는 향후 12개월 수주 잔고 매출에 영향을 미치지 않았습니다.
• 총채무는 160억 6,700만 달러였으며 순차입금 비율은 3.45배였습니다. 경영진은 리파이낸싱 활동, 스왑, 선도 금리 곡선에 따라 변경될 수 있지만 분기별 순이자 비용 약 2억 1,000만 달러가 합리적인 초기 실행율(run rate)이라고 언급했습니다.
• 풀서비스 수주에는 통과 매출이 포함되어 있어, 근본적인 영업 실적이 개선되는 경우에도 보고되는 마진이 희석될 수 있습니다.
• 4분기 매출은 예상되는 환율 역풍과 까다로운 전년 동기 대비 비교 기준에 직면해 있습니다.

애널리스트 Q&A 주요 내용

AI 차별화 및 수익화: 경영진은 아이큐비아의 강점이 독자적인 헬스케어 데이터, 생명과학 전문성, 규제 준수 및 워크플로 해석 능력의 결합에 있다고 밝혔습니다. 상업용 AI는 추가적인 구독, 라이선스 및 서비스 매출을 창출할 수 있는 반면, 임상용 AI는 주로 개발 기간 단축과 정확한 실행을 지원합니다.

수주 지속가능성: 경영진은 32억 달러 규모의 분기 R&D 수주액이 일시적 시점 차이가 아닌 다방면에 걸친 결과라고 설명했습니다. 대형 제약사와 EBP 고객뿐만 아니라 풀서비스 및 기능적 서비스 제공(FSP) 업무 모두에서 견조함이 나타났습니다. 회사는 4분기에 일반적인 계절성이 나타날 것으로 예상합니다.

상업적 성장: 경영진은 분기별 변동성에 과도한 의미를 부여하지 말라고 당부했습니다. 또한 사상 최고치인 상업적 파이프라인, 수주 성공률 개선, 단축된 의사결정 주기, 우호적인 제품 출시 활동을 강조했습니다.

수주 잔고 산정 방식: 아이큐비아는 서명 및 계약이 완료된 작업만 수주 잔고에 계속 포함하고 있습니다. 이전에 제거된 비활성 임상시험이 재개되는 경우, 해당 가치는 신규 수주로 합산되지 않고 수주 잔고로 직접 복원될 예정입니다.

산업 구조: 경영진은 최근 대형 제약 고객사의 전략적 파트너십 재검토를 통해 아이큐비아의 파트너십 범위와 수가 확대되었다고 말했습니다. 또한 장기적으로 EBP의 R&D 지출이 대형 제약사의 R&D 지출보다 빠르게 증가할 것으로 예상합니다.

실적 발표 컨퍼런스 콜 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to the IQVIA Third Quarter 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded. Thank you. I would now like to turn the call over to Kerri Joseph, Senior Vice President, Investor Relations. Mr. Joseph, please begin your conference.

Kerri Joseph

Thank you, operator. Good morning, everyone. Thank you for joining our third 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; Clarissa Willett, Senior Vice President, Financial Planning and Analysis; and Katie Ward, 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 & 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 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.

Ari Bousbib

Thank you, Kerri, and good morning, everyone. Thank you for joining us today to discuss our third quarter results. The team delivered great numbers. The market environment has continued to improve, but our performance improved even more. Our organic growth rates year-over-year accelerated meaningfully, 2x for commercial and nearly 3x for clinical. Our margins expanded and free cash flow was very strong. Our win rates were higher in the quarter, which led to our strongest clinical bookings in 4 years.

Our differentiated AI offerings are increasingly contributing to that momentum with continued adoption of our agentic solutions. In fact, IQVIA has now deployed 415 agents to date. Earlier this month, we brought together more than 400 attendees at TechIQ to share our latest clinical and commercial AI capabilities. This event is our annual customer event focused on technology, which this year took place in Boston and included our technology partners, NVIDIA, Microsoft, AWS, Snowflake and Veeva. Our AI leadership continues to earn industry recognition, including multiple industry awards for AI and technology innovation across life sciences and health care, while we continue to see more adoption of these capabilities across our customer base.

Let me spend a couple of minutes on the results for the quarter. Total revenue for the quarter exceeded the high end of our guidance range, representing year-over-year growth of 8% on a reported basis. At constant currency, growth was even stronger at 8.6%. Organic revenue growth was approximately 6% year-over-year, well over 2x the rate we delivered a year ago. Third quarter adjusted EBITDA was above the high end of our guidance as well, representing year-over-year growth of 8.7%. Adjusted EBITDA margin, as a result, expanded by 20 basis points, the second consecutive quarter with margin expansion this year. Third quarter adjusted diluted EPS also exceeded the high end of our guidance range and increased 11.3% year-over-year. The beat was driven entirely by the stronger operational performance.

Now on to segment performance. On the clinical side, revenue grew 8.7% reported, of which almost 7% was organic year-over-year, which is nearly 3x last year's organic growth rate. We delivered $3.2 billion of net new bookings, our highest in 4 years and 15% above last year with notable strength in full service. And, yes, the book-to-bill was 1.2 in the quarter. But more importantly, this is a long-cycle business, and I'd like to highlight that our last 12-month net new bookings have now increased for 5 consecutive quarters, reaching $11.7 billion, which is up 14% year-over-year. We think this metric is one of the best forward-looking indicators we have in support of long-term growth.

Looking ahead, demand indicators are encouraging. The EBP funding environment continues to be very strong. Funding has reached $90 billion year-to-date, up more than 85% year-over-year and already above the total for all of last year, according to BioWorld. Similarly, clinical trial starts year-to-date are up high single digits. RFP flow continued to grow at a healthy rate, up high single digits as well compared to last year. Our strong performance, of course, reflects an improving market environment, but we also had good operational execution with win rates that continue to tick up 2, 3 points.

In Commercial Solutions, revenue grew 6.9%, of which 4% was organic, which is double last year's organic growth rate. We had good growth across our 3 subsegments: information offerings, which helps our clients understand the market, analytics and consulting offerings, which help our clients plan their go-to-market strategies, and our other commercial solutions that help them engage with patients, health care providers, payers, and channels.

We've now delivered 4 consecutive quarters of strong revenue growth in commercial, and our pipelines remain at record levels. Looking forward, the demand outlook remains favorable with new drug launches up more than 40% year-to-date, our own pipeline showing healthy growth and decision time lines continuing to shorten.

Now I usually give you some color on the business activity in the quarter. And today, I'd like to do that, but focus on examples where AI was a clear differentiator. Let's start with clinical. Our predictive clinical development capabilities utilize AI to help sponsors design better studies, identify risks earlier and bring new therapies to patients faster. Here are a few examples of how this is playing out in some recent awards. A large pharma client needed to deliver multiple Phase III studies in the same autoimmune indication across nearly 50 countries.

Here, our AI-enabled country and site modeling solution optimizes patient identification and enrollment, shortening the overall program timeline by 9 months. In another example, an EBP selected IQVIA for a Phase III oncology program. Critical to winning this award was our AI-enabled protocol and site optimization tools, which accelerate time lines and reduce operational risk. Finally, IQVIA was selected by an EBP for a Phase III cardiovascular outcome study. This is exactly where our scale and integrated AI capabilities make a big difference. We are layering AI agents to bring together clinical delivery, laboratory services, and electronic patient assessments under one model to identify issues earlier, reduce handoffs, and proactively mitigate execution risk.

Switching to examples in commercial, we continue to evolve the way we partner with clients. Successful adoption of our AI offerings in commercial organizations within our clients is deepening client trust in IQVIA. And as that trust grows, clients are increasingly looking to us to bring more of our AI-enabled capabilities to their organizations. For example, a top 5 pharma client selected IQVIA to build and maintain an agentic platform that provides on-demand insights from complex real-world health care data. This will help the client make faster market access decisions and adjust commercial models nearly real time as prescribing patterns and patient outcomes evolve.

We are also seeing AI help expand our role in patient services. A top 10 pharma company selected IQVIA to deliver an integrated support program for its rare disease portfolio. Our AI-powered solutions adapt and shape interactions by factoring in patient mood and sentiment. That allows, in turn, the client to automate tasks such as benefit verifications and case management. The program allows patients to gain access to the therapy, start treatment sooner and better adhere to the treatment over time.

Another example, a large pharma client deployed our recently launched IQVIA Explorer solution. Explorer uses agentic AI workflows that integrate disparate data sources to answer complex questions spanning areas such as which cohorts of patients are taking the therapy, how therapies are being utilized in patient treatment, and help measure adherence by patient segment. The client can now execute commercial activities in minutes compared with weeks or months previously.

Let me now turn it over to Mike for more detail on our financial performance. Mike?

Michael Fedock

Thank you, Ari, and 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. Third quarter revenue of $4.428 billion grew 8% on a reported basis and 8.6% at constant currency.

Organic revenue growth within the quarter was strong at approximately 6%. Commercial Solutions revenue for the third quarter was $1.789 billion, up 6.9% on a reported basis and 7.9% at constant currency. R&D Solutions third quarter revenue was $2.639 billion, up 8.7% on a reported basis and 9.1% at constant currency. Year-to-date, total company revenue was $12.947 billion, up 8.4% on a reported basis and 7.7% at constant currency. Organic revenue growth was strong at over 5%. Commercial Solutions revenue was $5.336 billion, up 9% reported and 8.3% at constant currency, and R&D Solutions revenue was $7.611 billion, up 8% on a reported basis and 7.4% at constant currency.

Now moving down the P&L. Third quarter adjusted EBITDA was $1.032 billion, representing growth of 8.7% year-over-year, while year-to-date adjusted EBITDA was $2.958 billion. And in the quarter, adjusted EBITDA margins expanded by 20 basis points. Third quarter GAAP net income was $350 million and GAAP diluted earnings per share was $2.10. Year-to-date, GAAP net income was $880 million or $5.24 of earnings per diluted share. Third quarter adjusted net income was $557 million and adjusted diluted earnings per share was $3.34, representing growth of 11.3% year-over-year.

Year-to-date, adjusted net income was $1.576 billion or $9.38 per diluted share, up 10.4%. Now looking at R&DS bookings. The R&D Solutions net new bookings in the quarter were $3.2 billion, a 15% increase year-over-year, resulting in a 1.2 book-to-bill. I should also note that cancellations remained in the historical range. And as we noted during the last earnings call, the company conducted a detailed review of inactive trials in our backlog, resulting in an adjustment to backlog of approximately $2.1 billion. This backlog adjustment has no impact on historical financial results, 2026 guidance, net new bookings, or next 12 months revenue from backlog customers.

Obviously, should any of these same trials resume, the value will be added back to backlog and will not be included in future bookings or book-to-bill metrics. As of September 30, 2026, R&DS contracted backlog was $32.6 billion, and the next 12 months revenue from this backlog was $9.4 billion, which is up 10% versus prior year. And as discussed, given the long-cycle nature of the business, it is more meaningful to focus on the longer-term booking trends. For the quarter, the last 12 months net new bookings were $11.7 billion, an increase of 14% year-over-year. And importantly, this metric has been steadily increasing each of the past 5 quarters and points to continued momentum in our business.

Now turning to the balance sheet. As of September 30, cash and cash equivalents was $2.249 billion and gross debt was $16.067 billion, resulting in net debt of $13.818 billion. Our net leverage ratio ended the quarter at 3.45x trailing 12-month adjusted EBITDA. Third quarter cash flow from operations was $825 million and capital expenditures were $158 million, resulting in free cash flow of $667 million, representing 120% of adjusted net income.

Let's now turn to guidance. We are raising our full year '26 guidance for revenue, for adjusted EBITDA, and for adjusted diluted earnings per share. We now expect revenue to be between $17.350 billion and $17.500 billion, representing year-over-year growth of 6.4% to 7.3% and reflects over 1 point of constant currency organic revenue growth acceleration versus prior year. This revenue guidance now assumes approximately 250 basis points of contribution from acquisitions based on acquisitions completed to date and acquisitions we expect to have completed by the end of the year.

The guidance also assumes approximately 20 basis points of tailwind from foreign exchange, which is unchanged from our previous guidance. And by the way, this implies that there is an approximately 70 basis point headwind from foreign exchange to Q4 revenue. We are also raising adjusted EBITDA to be between $4.025 billion and $4.055 billion, growing 6.3% to 7% year-over-year, reaffirming flat margins year-over-year at approximately 23.2%. And given the mathematical distortion pass-through revenues have to reported margins, I would also want to take this opportunity to remind everyone to focus more on the EBITDA dollars as it is a more meaningful measure of operational performance. We are confident in our EBITDA dollar guidance irrespective of the pass-through contributions to our reported revenue.

And finally, we are also raising adjusted diluted EPS to be between $12.90 and $13, up 8.2% to 9.1% versus prior year or 8.6% at the midpoint. And as we close out '26, I'm sure you want some insight into '27 expectations. So I want to take this opportunity to formally invite you to our upcoming Investor Day on December 1, where, as we normally do, we will share a broad framework of what we see shaping up for next year. And as always, we will provide detailed guidance for 2027 concurrent with the release of our full year 2026 and fourth quarter earnings in February 2027.

But in the meantime, to help you with your models, I want to share the run rate assumptions we see exiting the fourth quarter for below-the-line items. We expect net interest expense for the fourth quarter to be around $210 million. We expect just over $160 million in depreciation and amortization for the quarter, and we are expecting our weighted average diluted share count to be approximately 169 million shares. And just as a reminder, Q4 compares are very difficult. So the implied growth rates should not be interpreted as a deceleration in our business, and we are confident in the momentum that the metrics that we highlighted previously would imply for the future.

And both -- this guidance assumes that foreign currency rates as of October 26 continue for the balance of the year. So to summarize, IQVIA delivered outstanding financial results with third quarter revenue, adjusted EBITDA, and adjusted diluted EPS exceeding the high end of our guidance. Organic revenue growth rates accelerated year-over-year across both commercial and clinical segments as demand continued to rise, AI continued to be a tailwind to our business, and our win rates continue to improve.

Adjusted EBITDA dollars grew 9%, and we expanded adjusted EBITDA margins 20 basis points in the quarter. We had strong free cash flow performance, representing 120% of adjusted net income. R&DS net new bookings were $3.2 billion, growing double digits year-over-year with another quarter of very strong full service bookings. We raised our full year 2026 guidance for revenue, adjusted EBITDA, and adjusted diluted earnings per share, and we look forward to seeing you in person on December 1 at our Investor Day.

Now with all of that, let me hand it back to the operator for Q...

Operator

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

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Shlomo Rosenbaum

Ari, I wanted to ask you if you could go into a little bit more about the uniqueness of IQVIA's ability to deploy data and technology in an agentic world. And you touched on some of the examples, but can you just talk about things that just other competitors just can't do because they don't have the data, whereas IQVIA can do some of these things? And then also maybe discuss about how your clients view this and how you think about this in terms of being able to charge for this differentiation.

Ari Bousbib

Okay. Well, look, this is a subject of a very long conversation. But look, how can I put it? AI is not just another technology. It's -- from our point of view, it's a new way of doing business. It's changing the way customers engage with their own activities and how they engage with IQVIA. So stepping back to successfully deploy AI, there is a premium in knowing the business. If you understand AI simply as an opportunity to do business a different way, meaning, first, content is important. You need the proprietary information that powers AI. That means you need a globally sourced, de-identified, curated, fit-for-purpose, integrated, interoperable, compliant with regulatory privacy, et cetera, et cetera, et cetera, and ready for extraction data. Now we got all of that.

Second, in addition to content, you need context. I think people are realizing that to deploy AI effectively, you need context, you need deep expertise in life sciences to understand that information. We've got that too. And thirdly, importantly, I'm looking for -- we're starting with content, context, what else here? Comprehend. You need to comprehend what you're looking at. That is, you need to interpret what the information is telling you and know how to apply to make decisions faster and more accurately. So when you think about AI agents, they're not just -- it's not that you can use an AI tool, whether it comes from Anthropic or OpenAI or anywhere. AI agents are constructs that operate a workflow in lieu of humans. We build them using all these tools. We don't have to invent the tools, the tools that are available. We spend money with all of these massive AI companies. They just have generic tools that we utilize to construct agents, depending on the use case, obviously.

Again, the agent is only one part. You obviously need the content, you need the context and you need the interpretation and the insights that enable you to construct the agents and operate them. And very often, because of all the specific issues related to operating workflows in health care, the transparency, the traceability of the data, et cetera, et cetera, and the compliance aspect, you do need humans in the loop as you do in many other industries, but in our industry, in particular. So that, I think, is what makes -- and by the way, we've been at this for a while, as you know. So it's not that we're trying to catch up. We don't need headlines. We're working with our clients, and it's slowly but surely changing the way we do business and changing the relationship with our clients and making us even more integrated within our clients' workflows.

Operator

Your next question comes from the line of Elizabeth Anderson with Evercore...

Elizabeth Anderson

I wanted to dig in a little bit to the gross margin improvement. Obviously, that was a highlight, particularly given the higher pass-through mix. So can you talk to us maybe in a little bit more detail about the pushes and pulls that how much is the pass-through mix sort of causing like degradation of that? And sort of what are the levers on the upside, so we make sure we understand that trajectory properly?

Michael Fedock

Yes. Thank you for the question, Elizabeth. Yes, you're absolutely right, and thank you for pointing out the improvement in gross margins. The pass-throughs across the enterprise were certainly a headwind on the gross margin line, probably about 70 basis points. So it really highlights the underlying strength in our operational execution.

Elizabeth Anderson

Okay. And then just in terms of that, we should think of that as broadly.

Ari Bousbib

I just want to give you some -- I mean, I have here in front of me the detail of the -- you asked about gross margins but on adjusted EBITDA margin, which was also -- which expanded 20 bps. What the nonoperational items, which is the 70 bps that Mike highlighted, we also had, I guess, 10 bps of currency impact. So let's sort of say 60 or so bps of net nonoperational headwind to our margins was more than offset by 80 bps of operational improvement. So that's, again, the cost containment, the AI agentification of our own processes, productivity programs, et cetera, everything that we do day in day out, that contributed in aggregate 80 bps of. So you see that underlying our margin, if you eliminate pass-throughs and if you theoretically were looking at our margins without the pass-throughs, just on the old basis, just on the service revenues, that margin would have improved 80 bps -- that adjusted EBITDA margin would have improved 80 bps. And obviously, it's significantly higher than the delivered margin of 23.2%. It would be more in the high 20s.

Operator

Your next question comes from the line of Jailendra Singh with Truist Securities.

Jailendra Singh

Congrats on a strong quarter. I want to go back to bookings in the quarter, very strong bookings strength despite the normal seasonality you generally see in 3Q. Was there anything unusual in the timing or mix of 3Q awards in 3Q? Or was just broad-based market strength or your win rate improving? Just trying to understand if we should expect a normal seasonal step-up in Q4 from a bookings point of view.

Ari Bousbib

Yes. No, thank you for the question. It really was broad-based. You know that earlier this year, there were all these concerns that you guys all voiced about. Well, that's it. It's over. Full service is over, everyone is going FSP, people are in-sourcing and so on and so forth. We warn you that that is not the case and that the pendulum swings back and forth. But long term, the outsourcing trend is absolutely intact. And this is again the second quarter in a row that we see very, very strong bookings in full service. In fact, year-over-year, they were up by a lot. I don't even want to give you the numbers because it is so big. Now the flip side, obviously, from an optics standpoint is full service comes with pass-throughs. And so back to the Elizabeth question, we did have an impact on the reported margins, and I caution you to make sure you look under the covers and you understand the operational improvements there.

But yes, to your question, really good strength across the board. And really, that was true for large pharma, where we see continued uptick in win rates and the consequent on all the strategic partnerships that we have structured over the past 2 years, which we've talked about at length in prior calls. All of those are now starting to pay off as we continue to bid on a growing stream of RFPs and continue to win more and more of those opportunities with large pharma.

And again, with EBP similarly, we talked about our strategy there. And that also is continue to grow. The bookings in EBP were very strong. Again, if you look at -- I would point you to our LTM net new bookings, which this -- at the end of this past quarter was $11.7 billion -- and you look at that number, each of the past 5 quarters, that number has continued to grow consistently, and it was up 14% year-over-year. We think this is an excellent metric to focus on in terms of understanding sustainability of long-term growth in the business. And again, broad sourced broad strength in FSO, FSP, strong outsourcing. Any other comments, Mike, or?

Michael Fedock

No, I just -- no other changes are expected in Q4 seasonality trending.

Ari Bousbib

Nothing unusual therapeutically or otherwise, really a good, good excellent quarter from a booking standpoint.

Operator

Your next question comes from the line of Eric Coldwell with Baird.

Eric Coldwell

I think my only concern that I've had here recently is just the below-the-line items, and you gave us an insight into your view on the fourth quarter. Should we be taking that $210 million, I think you said, and just annualizing that into 2027 at this point? Or are there other parameters or dynamics to consider as we think about interest expense modeling for next year? And then just one other quick one. I am curious if you can give us the parameters for the backlog scrub. What exactly made the cut or didn't make the cut in terms of your review when you looked at what to remove for now? If you could give us those details would be appreciated.

Ari Bousbib

Yes. Maybe I'll give that to Mike, but the review of the backlog, and Mike, you can add any details you want is basically trials that have been in the backlog for a long time. We reviewed that in detail. And long time means long time. It's over 18 months plus, I think that was kind of one of the criteria. And in conversation with customers, there was no reason to assume that the work was going to resume in the near term. And so for clarity and cleanliness and more accuracy in visibility, we thought it was a good idea similar to what the competitor has done to just simply remove it.

In the past, we would have just left them there. We know that they are inactive. We wait for a resumption possibly of this, but it kind of becomes stale and so it's better. And as Mike indicated in his introductory remarks, if those trials come back, which sometimes they do, by the way, even when they've been around inactive for a year plus, they come back, which is why, by the way, we extend -- we look at way more than a year, 18 months, 2 years type of inactivity. But when they do come back, if they do come back, then we will simply add them back to the backlog directly, we certainly are not take that back as a booking. So that's the way we decided to make the adjustments. I hope that gives you more color. And then the first question was on...

Michael Fedock

Just about below the line. So, Eric, your team actually does a pretty good job at reviewing our debt stack and looking at what's coming up for next year with refinances and swaps and things like that. So I would focus mainly there. I -- there's nothing else below the line on depreciation or tax or anything really to call out there.

Ari Bousbib

Well, I think your question was that kind of that run rate more or less what we expect for -- and the answer is about yes. I don't know...

Michael Fedock

About yes. And we have some refinances...

Ari Bousbib

But that's the -- I think it's a good number.

Michael Fedock

Yes. It's a good number to start with. And obviously, we use just whatever the publicly available forward curves are to do the projections.

Operator

Your next question comes from the line of Luke Sergott with Barclays.

Luke Sergott

Just 2 quick ones here, unrelated. On the Commercial Solutions, you guys have been talking about you've had record backlog and strong bookings there over the last couple of quarters. I understand that it bounces around a little bit, but we saw a little bit of a decel in the 3Q. Just trying to figure out when the timing of this is the conversion still elongated and how that's shrinking and when we could start to see this accelerate growth? And then the second one is on the backlog and the adjustments. Just to follow up on Eric's question. I guess as you think about what's been in the backlog, are you guys getting any more stringent on what you're deciding to include there? Is it like something that's going to start to progress within the next 12 months and just be -- so you can avoid these adjustments?

Ari Bousbib

Okay. So I guess everyone has 2 questions. Thank you, Eric, for the -- thank you for setting the precedent. Okay. Just because we allow Eric for 2 questions, then we're going to allow everybody. That's... Okay. On commercial, yes, I mean, look, we don't look at backlog for commercial. As you know, commercial is more of a -- not short term necessarily, but it's a shorter cycle than R&DS. So I mean looking at backlog there, that makes -- obviously, we have performance obligations in some of the longer-term contracts that we have on commercial execution, for example, commercial outsourcing. But even the data contracts are typically 1-year renewable, evergreen type and so on. So we don't put that in backlog.

Most of the business in our commercial solution is not backlog. So we don't refer to that as backlog, no conversion, none of that. What we speak about is pipelines. I mean there are projects, there are requests for proposals and our pipelines, as I mentioned, are at record levels and our win rates are also up and the decision timelines are shortening, which these are the kind of the main demand indicators that we look at from a forward-looking perspective, and we see those to be very strong. I also mentioned from a market standpoint that approvals are up 40%, you said, year-over-year.

And again, drug approvals typically are followed within 6 months to a year or thereabouts by product launches and product launches are the bread and butter of what we do. This is where we are spending a lot of time with our clients, helping them with their launch strategy, with their pricing, with their interactions with the channels, with their marketing to HCPs -- we have promotional programs, multichannel marketing programs with their interaction with retailers, providers, country access, market access, all of those activities that are the bread and butter of our commercial business are really associated with launches. So the fact that we have product approvals up over 40% is a strong indicator that the overall market is strong. So that bodes well for our commercial business.

Yes, I mentioned the third quarter -- no, third quarter is up very nicely. Organically, it's double the rate that we had a year ago, the third quarter. I wouldn't look at sequential -- yes, especially third quarter, to be honest, third quarter is very volatile. So it was like up and down a few points sequentially always if you go back many, many years. And that's just typical of the third quarter. Bear in mind, we have a very large business in Europe, not that Americans don't take any vacation in August, but the Europeans do for a long time. And typically, it's just a slower thing in Europe that creates more volatility. But I wouldn't read more into it. The business, again, is doing very well. You had a question?

Michael Fedock

Luke, about the backlog. The short answer is no. We're very comfortable with what we put into our backlog. And in fact, being on an as-contracted basis, we feel that that's best-in-class practice. So no change there.

Ari Bousbib

Yes, only contracted for and bookings are bookings. Otherwise, we don't -- we wait for contracts to be signed. And sometimes the time a customer awards something to us, that's in the R&DS business, then it could take a month, 2 months sometimes before all the dots and the Ts are crossed and so on and so forth and the contract is actually signed and executed. And only at that time, do we put into our backlog, and there's nothing changed to that.

Operator

Your next question comes from the line of David Windley with Jefferies.

David Windley

Ari, I wanted to ask kind of an R&DS horizontal question, if I could. It seems like you've been through you, the industry has been through a couple of years' worth, maybe '24 and '25 or '23 to '25, a heavy reprocurement cycle among your larger clients, and that brought on a lot of focus on FSP. And then biotech funding was low. And so the absence of them with FSO was also painful. And as we're coming back out of that, biotech funding is helping them to come back with FSO and maybe between the reprocurements, the big pharmas are also doing some FSO. I wonder if you agree with that. If biotech has been kind of the leader out of that trough, is pharma starting to catch up -- and are you still seeing reprocurement activity go on? Is there still opportunity, wallet share opportunity for you? And how is that playing out? I apologize for the multiparter.

Ari Bousbib

Yes. No, I mean it's a great question. But yes, I mean, look, the answers to your question are in your question. You know the industry. You're one of the best observers of the industry. So you hit all the correct points. I mean, look, we're just coming out of a 2- to 3-year period of multiple headwinds. First, we had the post-COVID bubble deceleration, both at large pharma and in terms of the EBP funding.

Second, we had the IRA, which introduced those concerns about drug pricing negotiations and so on and so forth, which kind of started slowing down large pharma for sure. And in terms of their discretionary spend first, which we observed in our commercial business immediately. And then sort of pausing large capital investments and new programs. And then we had the next administration bringing up drug prices again through the MFN, we have the tariffs, and we had all of that drama. All of that drama created huge uncertainty. That uncertainty caused large pharma to pause their decision-making. We saw decision time lines expand dramatically, okay? I mean, by a lot. And so -- and that kind of -- all of that caused significant demand constraints.

Now during that time period, pharma took the opportunity to step back and renegotiate their strategic partnerships to reopen their strategic partnerships. We -- that lasted a year, 1.5 years maybe. And literally every single large pharma did that. And it just -- it was over not too long ago. We feel very good about that process and what happened. We came out ahead of where we were before in terms of the scope, the number of partnerships we are in and the scope of what those partnerships include even within the large pharmas where we were in.

So I said this before, and I'll say it again, the largest -- it has further segmented the CRO industry into essentially, let's say, 3 groups, the largest ones and then the small mid ones. And then you have a long tail of little players that are not part of this conversation. But the largest one essentially emerged ahead. We believe we emerged more ahead than the others, on the back, I believe, of our broad spectrum of capabilities, AI, et cetera, and that's been proving it out in our win rates today.

Second, the smaller tier of CRO suppliers, I think lost out overall, and that is going to become apparent over the next 2, 3 years, even if it's not today, but I know that it's going to be apparent because we know who's out and they're all out basically. And that's what has happened with large pharma.

Now on the EBP side, much more funding. Again, 85% growth funding year-to-date -- year-over-year, 85% increase in funding. It's a wild number. Again, before COVID, the annual funding -- EBP funding, and this is using consistently the same source and the same exact parameters. Before COVID, the annual spend was in the $50 billion range for between 2015 and 2020. It is this year, year-to-date 3 quarters, $90 billion. So it's almost double what the annual rate was before COVID.

This is funding an increasingly large number of opportunities. We think there are almost 17,000 EBPs around the world. It's a vast market. It's a great market. It's a dynamic market. Certainly, as you said yourself in your question, EBP is growing at a much higher rate in terms of spending than large pharma. We believe the long-term growth rate of R&D spend in large pharma is in the low single digits, maybe 2% to 3% underlying growth long term. EBP is more in the upper single digits, right?

So I'm thinking 8%, 9%. And that's clearly driving growth in our business. And as you know, we have multiple strategies to grow that part of the business, including the expansion of our capabilities to early phase engagement. And we've beefed up our capabilities there. We've hired a large number of ex-FDAers to engage with biotech much earlier at the regulatory stage. We have acquired the discovery capabilities. We've acquired Phase I capabilities. And I can tell you, we continue to progressively invest in that field to increase our engagement with EBPs with a set of capabilities that are required to further penetrate that customer base. Thank you for your question and the opportunity to lay out my view on what's going on in the industry.

Operator

Your next question comes from the line of Michael Cherny with Leerink Partners.

Ari Bousbib

Operator, this will be our last question. Thank you.

Michael Cherny

Maybe just a direct follow-up there to Dave's question regarding the market construct, in particular, the role of AI. As you have developed your own AI capabilities, are you seeing the dynamics of contracting changes showing up, i.e., a push and pull relative to how your pharma sponsors want to charge for your work that encompasses AI? Are there any thoughts about value-based contracting and savings over time? What do you think the role is beyond just differentiating on winning share, AI will play in the way that you can essentially manage and contract at certain profit levels going forward?

Ari Bousbib

Thank you. Well, look, again, good question. On the commercial side, AI is essentially an incremental revenue opportunity, okay? We are providing our clients with new ways of doing business that enable them to automate and reduce the amount of labor that they themselves use in their operations to conduct business. So it's a great opportunity for our clients to improve their productivity and improve their profit contributions. And for us, we're essentially providing additional services and subscriptions to our agents or licenses.

So that's on the commercial side. On the -- and these obvious yield, we should be at good margins. On the R&D side, I would differentiate between large pharma and EBP. EBP, as you know, is fully outsourced. And it really requires a lot more handholding from the beginning. So the relationship is different. We will be using AI here to optimize time lines to speed up processes to ensure that clients get to market, the product gets to market a lot faster and to patients a lot faster. I mentioned an example with a large pharma where we're going to cut 9 months out of the trial. 9 months is huge in this business. You just take a look at what 1 month of sales at a very, very high margin represents for a pharma company. And so 9 months is huge. In comparison, the cost of the clinical trial is nothing.

Now that doesn't mean that large pharma is no longer negotiating a contract. But large pharma essentially has negotiated in the process I described earlier in reviewing and renewing partnerships, the rates, okay? So that is essentially done. Now obviously, when we compete for a specific trial, so there always are negotiations at the end with procurement and so on and so forth. Does AI play a role? No, AI is essentially an enabler of faster time lines, more accuracy, better visibility and transparency in the process of conducting the trial. And really believe this is what the conversation around AI are.

Is it going to have an impact on our productivity for us internally? Yes. We mentioned that. We are deploying agents at our clients' operations, and we're also deploying agents at our operations. There's no question about it from finance to HR to a variety of other overhead activities and automated tasks that we used to standardize and perform in offshore centers, a lot of them, whether it's software development, whether it's software testing, all of that, yes. So over time, that will certainly help with our own margin expansion plans and productivity programs.

Operator

Thank you. Mr. Joseph, I turn the call back over to you.

Kerri Joseph

Thank you, operator. Thank you, everyone, for taking the time to join us today, and we look forward to speaking with you again on our fourth 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, and have a good day.

Operator

This concludes today's call.