아이콘(ICLR) 2026년 3분기 실적 발표회: 사상 최대 31억 5,000만 달러 순수주 및 마진 확대

핵심 요약

• 2026년 3분기 매출은 20억 달러를 살짝 상회하며 전년 동기 대비 2.9% 감소했고, 고정환율 기준으로는 2.5% 감소했습니다. 전분기 대비 매출은 심포니(Symphony) 매각의 영향으로 1.9% 감소했습니다.
• 조정 EBITDA는 전분기 대비 3% 증가한 3억 3,700만 달러를 기록했습니다. 조정 EBITDA 마진율은 70bp 확대된 16.6%를 기록했으며, 조정 매출총이익률은 90bp 개선된 24.7%를 나타냈습니다.
• 순신규 수주액은 전년 동기 대비 51% 증가한 사상 최대치인 31억 5,000만 달러를 기록해 1.56배의 순 수주비율(book-to-bill ratio)을 달성했습니다. 이는 ICON이 4분기 연속 1.3배를 상회한 기록입니다.
• 조정 희석 EPS는 전분기 대비 4% 증가한 2.66달러였습니다. GAAP 희석 EPS는 순이익 1억 2,200만 달러를 기반으로 1.58달러를 기록했습니다.
• 잉여현금흐름은 총 3억 200만 달러를 기록했습니다. ICON은 해당 분기 동안 4억 달러 규모의 자사주를 매입했으며, 이사회는 7억 5,000만 달러 규모의 신규 자사주 매입 프로그램을 승인했습니다.
• 경영진은 견조한 수주, 수주잔고 증가, 사업 포트폴리오 개선에 힘입어 2027년에 약 한 자릿수 중반대의 매출 성장과 한 자릿수 후반대의 이익 성장을 뒷받침할 수 있을 것이라고 밝혔으나, 공식 가이던스는 4분기 실적 발표와 함께 제시될 것임을 강조했습니다.

핵심 재무 데이터

사업 및 영업 실적

2026년 3분기 실적 발표 전화회의의 핵심 주제는 ICON의 사업 실적이었습니다. 총신규 수주는 전년 동기 대비 27%, 전분기 대비 3% 증가했습니다. 직전 12개월 직접수수료 수주비율(book-to-bill ratio)은 이전 12개월 기간의 약 1.0배에서 1.3배로 상승했습니다.

풀서비스 아웃소싱 및 기능적 서비스 제공(FSP) 서비스 전반에서 대형 제약사의 수요가 견조하게 유지되었습니다. ICON은 대규모 약물감시 포트폴리오를 보유한 기존 제휴를 확대했으며, 다년간의 FSP 계약 연장을 확보했습니다.

중소형 제약 고객사 사이에서 수주 기회 유입이 개선되었으며, 임상·검사실 및 기능적 역량을 보다 광범위하게 결합한 신규 및 확장 파트너십이 이루어졌습니다. 바이오테크 분야에서 ICON은 타깃 기업 커버리지를 전년 대비 30% 확대하고, 모든 개발 단계를 아우르는 4년 단독 제공 계약을 포함해 3개의 선호 파트너십을 추가했습니다.

2분기 대비 직접수수료 매출이 소폭 증가했으며, 경영진은 이를 중요한 성장 전환의 이정표로 평가했습니다. 경영진은 마진 개선의 원인으로 사업 포트폴리오 개선, 영업비용 통제, 최근 신규 수주 건의 초기 매출 전환을 꼽았습니다.

기술은 여전히 상업적 성과와 효율성을 견인하는 중요한 요인이었습니다. ICON은 생체인식 프로그래밍 에이전트를 도입해 해당 연구의 프로그래밍 주기 시간을 28% 단축했다고 밝혔습니다. 연초 대비 임상시험 개시 처리량은 약 30% 증가했으며, 임상기관 계약 소요 시간은 10% 개선되었고 단기적으로 20% 추가 단축을 목표로 하고 있습니다.

경영진 가이던스

ICON은 통과매출(pass-through revenue) 활동의 호조를 반영해 2026년 가이던스 범위를 축소하고 매출 전망치 중간값을 약 1억 5,000만 달러 상향 조정했습니다. 경영진은 매출이 기존 전망 범위의 상단에 가까운 수준을 기록할 것으로 예상하고 있습니다.

회사는 연간 조정 EBITDA 마진율이 약 16%~16.5%를 기록할 것이라는 기존 전망을 유지했습니다. 최종 비율은 4분기 통과매출에 일부 좌우될 예정이며, 통과매출은 마진 기여 없이 보고 매출을 증대시킬 수 있습니다.

ICON은 4분기 시점 차이 혜택(timing benefits)을 포함해 2026년 조정 실효세율이 약 17%가 될 것으로 예상하고 있습니다. 경영진은 2027년 실효세율이 약 18%에 달할 것으로 전망하고 있습니다.

경영진은 투자 집행 시기 등의 영향으로 4분기 SG&A가 전분기 대비 증가할 것으로 보이지만, 비용 통제는 계속해서 최우선 과제로 유지될 것이라고 설명했습니다.

공식 2027년 가이던스는 4분기 실적 발표 시 제공될 예정입니다. 경영진은 수주가 예상대로 매출로 전환되고 집행이 견조하게 유지된다면 한 자릿수 중반대의 매출 성장과 한 자릿수 후반대의 이익 성장이 실행 가능한 기본 틀이 될 수 있다고 말했습니다. 다만 이러한 언급은 가이던스가 아닌 예비적 관찰 소견임을 명확히 밝혔습니다.

리스크 및 주요 관전 포인트

• 통과매출은 30%대 초반 수준으로 증가해 전체 매출의 3분의 1에 다가가고 있습니다. 발생 시기와 구성에 따라 보고 매출과 EBITDA 마진 비율에 변동성이 생길 수 있습니다.
• 견조한 수주가 매출로 전환되는 과정은 프로젝트 개시일, 소진율(burn rates) 및 영업 실행력에 달려 있습니다. 경영진은 최근 4분기 이전의 다소 부진했던 직접수수료 수주 기간이 여전히 매출 추세에 영향을 미치고 있다고 짚었습니다.
• 환율 변동은 ICON이 지난 5월 2026년 가이던스를 처음 발표했을 때보다 더 큰 역풍으로 작용하고 있습니다.
• 가격 경쟁은 여전히 치열합니다. 경영진은 수주 가격이 적정한 수익률을 제공하지 않는 경우 단기 수주율에 영향을 미치더라도 신규 프로젝트 수주를 거절할 것이라고 말했습니다.
• 지연된 투자가 집행됨에 따라 4분기 SG&A는 전분기 대비 증가할 것으로 예상됩니다.

애널리스트 질의응답 하이라이트

경영진은 직접수수료 매출, 매출총이익률 및 EBITDA 마진의 개선이 4분기 연속 이어진 견조한 수주 실적이 손익계산서에 반영되기 시작했음을 보여주는 초기 징후라고 말했습니다. 풀서비스 아웃소싱이 수주 호조의 가장 큰 기여 요인으로 남아 있는 반면, FSP 수주는 1년 치 수주 금액만을 반영해 보수적으로 기록됩니다.

가격 책정 및 인공지능(AI)과 관련해 ICON은 고객과의 논의가 단순 시간당 단가보다는 성과, 주기 시간 단축 및 생산성에 점점 더 초점을 맞추고 있다고 밝혔습니다. 회사는 고객이 초기 효율성 이점을 취하고 ICON이 추가적인 성과 창출에 참여하는 성과 공유(gain-sharing) 구조를 모색하고 있습니다.

경영진은 실현되는 마진이 최초 계약 금액뿐만 아니라 실행력, 생산성, 가동률 및 프로젝트 전달 가시성에 달려 있다고 강조했습니다. AI 및 워크플로우 도구는 고객 성과와 ICON의 내부 효율성을 모두 향상시키기 위한 목적입니다.

자본 배분과 관련해 ICON은 자체 성장을 위한 투자, 선별적 M&A, 주주 환원 간의 균형을 유지할 계획입니다. 경영진은 단지 외형 확장을 위한 인수합병은 배제하며, 인수 대상 기업이 매력적인 성장성, 마진 및 전략적 부합성을 제공해야 한다고 밝혔습니다. 3분기 중 ICON은 21억 5,000만 달러 규모의 투자적격등급 채권 발행을 완료했으며, 주당 평균 170달러에 4억 달러 규모의 자사주를 매입했습니다.

실적 발표 전화회의 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Good day, and thank you for standing by. Welcome to the ICON PLC Q3 2026 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Kate Haven, Vice President of Investor relations. Please go ahead.

Kate Haven

Hello, and thank you for joining us today. I'm joined on the call by our CEO, Barry Balfe; and our CFO, Nigel Clerkin. I would like to note that this call is webcast and that there are slides available to download on our website to accompany today's call.

Certain statements in today's call will be forward-looking statements. These statements are based on management's current expectations and information currently available, including current economic and industry conditions. Actual results may differ materially from those stated or implied by forward-looking statements due to risks and uncertainties associated with the company's business, and listeners are cautioned that forward-looking statements do not guarantee the future performance.

Forward-looking statements are only as of the date they are made, and we do not undertake any obligation to update publicly any forward-looking statements, either as a result of new information, future events or otherwise. More information about the risks and uncertainties relating to these forward-looking statements may be found in the most recently filed annual report on Form 20-F.

This presentation includes selected non-GAAP financial measures, which Barry and Nigel will be referencing in their prepared remarks. For a presentation of the most directly comparable GAAP financial measures, please refer to the section of the press release dated October 27, 2026, titled Consolidated Statements of Operations.

While non-GAAP financial measures are not superior to or a substitute for comparable GAAP measures we believe certain non-GAAP information is more useful to investors for historical comparison purposes. Included in the press release and the earnings slides, you will note a reconciliation of non-GAAP measures. Adjusted EBITDA, adjusted net income and adjusted diluted earnings per share exclude amortization, stock-based compensation, foreign currency gains and losses, restructuring, transaction integration-related and other adjustments, transaction-related financing costs, fair value movement on investments in equity, goodwill impairment, loss on disposal of subsidiary undertakings impairment of nonfinancial assets and their related taxation effect.

We'll be limiting the call today to 1 hour. And in the interest of time, we ask participants to keep their questions to 1 each I would now I'd like to hand the call over to our CEO, Barry Balfe.

Barry Balfe

Thank you, Kate. Our third quarter results mark another clear step forward, in line with the plan that we set out to deliver earlier this year. Strong commercial momentum, continued earnings growth and disciplined execution, continue to reinforce our confidence in the outlook for the business and the opportunities ahead as we move into 2027.

Quarter 3 results were very much in line with our expectations, and I was particularly pleased that we saw progress in the areas that we had previously indicated. Gross margin improved by 90 basis points sequentially as our direct fee mix improved and new awards began to burn in line with expectations. Adjusted EBITDA grew sequentially to $337 million and adjusted EPS was $2.66, an increase of 4% compared to quarter 2. That follows from our commercial performance, which was, again, excellent.

Gross business wins increased by 27% year-over-year and 3% sequentially. Consequently, net business wins were a record $3.15 billion, up 51% year-over-year, yielding a net book-to-bill of 1.56x. This was ICON's fourth consecutive quarter with a net book-to-bill greater than 1.3x. Notably, our trailing 12-month direct fee book-to-bill was also 1.3, an improvement of circa 30% on the preceding 12-month period. This strong execution translated into strong cash generation with $300 million of free cash flow generated in the quarter, supporting the repurchase of $400 million of shares and a cash balance of $800 million at quarter end. Combined with the $2.15 billion investment-grade bond issuance in August, this creates ample strategic flexibility for ICON to pursue our capital allocation priorities including organic investments, selective M&A and return of capital to shareholders.

Looking at customer groups, large pharma remains a source of continued strength in the quarter. We saw strong contributions across both full service and FSP including the expansion of an existing alliance through the addition of large-scale pharmacovigilance portfolio. Multiyear FSP renewals were also noticeable, reflecting customers' continued preference for flexible partnership models and their confidence in ICON's ability to deliver at scale.

Among midsized pharma, opportunity flow continued to strengthen with an encouraging pipeline of partnership activity. With new and expanded midsized partnerships in the quarter, we are increasingly seeing customers adopt a more strategic approach to partnering in this area, utilizing a broader mix of our clinical laboratory and functional capabilities.

In biotech, overall demand remains constructive, supported by a healthy funding environment. We maintained our focus on expanding our universe of biotech targets and are now covering 30% more companies in this sector than was the case 1 year ago. The rollout of new intelligence tools to track molecules through the development cycle has enabled us to better calibrate early engagement with emerging sponsors. As these biotech customers advance their pipelines at a later stage development, programs naturally become larger, more complex and increasingly global in nature. This benefits ICON, as sponsors seek out partners with the necessary scale, breadth and expertise to execute on these challenging programs while preserving the agility that they continue to value. We saw evidence of this during the quarter with the addition of 3 preferred partnerships with enterprise customers in biotech, including a 4-year sole provider arrangement spanning all phases of development.

As established biotech and midsized companies seek strategic partners to support their long-term development needs, the expertise, governance structures and alliance management capabilities that have served ICON so well in large pharma are proving increasingly valuable. Fundamental disruption of the clinical development paradigm remains the strategic priority for ICON. Across all market segments, sponsors engagement with our tech transformation agenda continues to accelerate. While elements of this transformation may take time customer decisions are increasingly driven by evidence of innovation that creates value and competitive advantage today. our excellent commercial performance has to a significant degree, and being driven by the suite of capabilities that our teams have already put in the field.

In biometrics, programming agents and production since February have cut programming cycle times by 28% on in-scope studies. Study start-up throughput, key indicator of impending clinical activity grew about 30% year-to-date, enabled by a range of agentic capabilities. Smart Craft is just one example. Site contracting cycle time reduction of 10% over the year with near-term targets extending to an additional 20%. And our monitoring agent, Meridian continues to resonate with customers and is designed to deliver significant gains for both FSO and FSP customers.

As we've spoken about before, these disruptive technologies are enabling our customers to meaningfully reduce time, cost and uncertainty in their ongoing programs and to redeploy surplus capital to portfolio expansion. This is fundamentally changing the nature of commercial discussions with customers, with sponsors increasingly focusing on expertise and outcomes rather than just on effort.

Supporting that shift, we continue to make targeted investments in therapeutic and scientific expertise to support the increasing complexity of clinical development and depress ICON's advantage in some of the most attractive growth areas in the industry. This includes building on our long-standing strength in oncology, where we have expanded capabilities and patient advocacy, emerging modalities like radioligand therapies while also expanding capacity in high-growth areas such as endocrinology and neurology.

Finally, we've narrowed our 2026 guidance range to reflect greater visibility and disciplined execution as current trends support positive momentum on revenue and earnings for quarter 4. While we will issue formal 2027 guidance with our quarter 4 results at this stage, the leading indicators are moving the right way. With 4 strong quarters of bookings, growing backlog and an improving business mix, creating a clearer view of the scope for revenue growth and meaningful earnings progression.

Before I hand over to Nigel to take you through a more detailed look at the financials, I would like to thank all of my ICON colleagues for their continued commitment, energy and focus. Their work every day supports our customers in bringing forward new treatment options for millions of patients around the world. Nigel?

Nigel Clerkin

Thanks, Barry. Revenue in quarter 3 was just over $2 billion, representing a year-on-year decrease of 2.9% or a decrease of 2.5% on a constant currency basis. Compared to the second quarter, revenue decreased 1.9%, primarily reflecting the divestiture of Symphony, while adjusted EBITDA increased 3% to $337 million expanding adjusted EBITDA margin by 70 basis points to 16.6%.

As mentioned last quarter, based on year-to-date activity, we believe that pass-through activity levels will exceed our prior assumption of being approximately flat year-over-year. Our updated full year guidance reflects this higher pass-through activity supporting an increase in our revenue outlook to the high end of our prior range. Overall customer concentration in our top 25 customers was broadly aligned with quarter 2, 2026. Our top 5 customers represented 23.7% of revenue. Our top 10 represented 38.9% while our top 25 represented 63.1%.

Adjusted gross margin for the quarter was 24.7%, an increase of 90 basis points over quarter 2, driven by improved business mix and operating cost management. Strong cost discipline also resulted in adjusted SG&A expense of $163 million in quarter 3 or 8.1% of revenue compared to $179 million in quarter 3, 2025 or 8.6% of revenue. Adjusted net interest expense was $43 million for quarter 3. In the comparable period last year, net interest expense was $47 million. The effective tax rate was 18.6% for the quarter. We continue to expect the full year 2026 adjusted effective tax rate to be approximately 17% due to some timing benefits in the fourth quarter.

Looking ahead to next year, we'd expect our effective tax rate to be approximately 18% for the year. Adjusted net income for the quarter was $206 million, equating to adjusted earnings per share of $2.66, a sequential increase of 4%. U.S. GAAP income from operations amounted to $199 million or 10% of quarter 3 revenue. U.S. GAAP net income in quarter 3 was $122 million or $1.58 per diluted share. From a cash perspective, quarter 3 had cash from operating activities of $340 million. Capital expenditure was $38 million resulting in free cash flow in the quarter of $302 million.

During the quarter, we successfully completed a $2.15 billion investment-grade bond issuance. The proceeds of which were used to repay our senior secured term loan, redeem our May 2027 notes and repay our bridge secured credit facility. As a consequence of this refinancing, our total debt of $3.4 billion has a blended annual fixed interest expense of approximately $200 million.

At September 30, 2026, cash totaled $809 million, leaving a net debt position of $2.6 billion. This compares to net debt of $2.5 billion at June 30, 2026 and $2.9 billion at September 30, 2025. We ended the quarter with a leverage ratio of 2.0x net debt to adjusted trailing 12-month EBITDA.

Our strong balance sheet and free cash flow generation continues to provide flexibility to execute a balanced capital allocation strategy, enabling us to invest in the business, pursue selective M&A opportunities and return capital to shareholders. Consistent with this approach, we repurchased $400 million of shares in the quarter at an average price of $170 per share.

In addition, our Board approved a new $750 million share repurchase authorization, underscoring our confidence in the business and our ongoing commitment to shareholder returns. And with that, we'll now open it up for questions.

Operator

[Operator Instructions] And your first question today comes from the line of Eric Coldwell from Baird.

질의응답

Eric Coldwell

Congrats on the strong commercial development progress you're making here. I want to focus on direct fee revenue. It's encouraging to hear that it's recovering. It seemingly would still be down, though, based on results and the higher pass-throughs you're talking about. Correct me if I'm wrong on that. Just based on what you're seeing with these very strong direct fee awards over the last year, when would you expect to return to stable direct fee revenue growth? And then would you be willing to give us a ballpark of level of incremental margin might be expected on the early days of a direct fee recovery, if you will. .

Nigel Clerkin

Eric, it's Nigel. Thanks for the question. So yes, look, I think you can start to see the evidence of this in our Q3 results, Eric. You did see our gross margin increased nicely over the quarter before, as we talked about previously, we always did expect to see our H2 EBITDA increase and our margins improve in dollars as we see improvements in business mix and operating cost control, and that's exactly what we have seen.

To your point, Barry touched on, we've had 4 quarters now of consistent really strong commercial performance. We've talked before about it does take some time for that to start to show up in the P&L. But we are seeing the first signs of that. Barry, I don't know if you want to comment in terms of perspective in terms of the outlook as we head into next year.

Barry Balfe

Look, I think while direct fees were up very modestly sequentially. The fact that the return to growth is an important milestone. I think the underlying business mix and the associated cost controls is what drives the margin expansion. 90 bps on gross margin, 70 on EBITDA margin, I think, is certainly encouraging. The question on the relationship between margin recovery and revenue obviously depends on the revenue profile, Eric. So it's -- I'm sure going to be the first of several questions nibbling in 2027. So maybe I'll get that out of the way. We're not guiding today. I think that's been made clear. But when talking about this morning, is it certainly viable for us to think about mid-single-digit revenue expansion next year and maybe higher single digit expansion on earnings, yes, certainly a decent jumping off point.

But like I say, every quarter, when people ask me, are we going to replicate the book-to-bill. You look at the data, you say there's certainly feel in the time to make that a reasonable objective. And then it's about execution. So whether we finish above or below those numbers will ultimately be determined by how effective we lead the team keep doing what we do best, which is engaging with customers to understand their needs, deploying the platforms that resonate most strongly for them and leveraging the best delivery execution expertise in the industry to turn that into a fair return for shareholders.

This is a quarter that looks a lot like we expected it to. And like we've been saying it was since May and certainly through June and July calls. And I think if we continue on this path, those sorts of options are certainly in play. And I would say, it's a little early for guidance, but we feel good about the trajectory, and we feel good about the underlying points that indicate an inflection that you've alluded to. So I hope that covers it.

Operator

Your next question today comes from the line of Ann Hynes from Mizuho Securities.

Due to no response, I will move on to the next question. One moment, please. And your next question comes from the line of David Windley from Jefferies.

David Windley

Great. I'll pivot off of Eric's question and ask around composition of bookings to try to understand a little bit, Barry, what is kind of driving the really strong commercial performance, but also to try to understand how we should expect that to convert. I mean you're talking about beginning to feel that but obviously, the high bookings are -- I mean, in under normal circumstances unless your burn rate plummets, you should see significant revenue acceleration. So I'm trying to understand what about these makes them be accompanied by so much pass-through what's the duration? What's the therapeutic area? Just any color that you can help us to understand how they are so strong and how we should expect them to roll out.

Barry Balfe

I'll answer as many of those would like to remember, David. Let me do my best on it. I think your point is well made. I suppose the first thing to say is trailing 12-month direct fee book-to-bill of 1.3x, while it's outstanding, it's certainly industry-leading. I think it has been in each of those. It also comes on top of a preceding 12 months that were closer to 1.0.

And if you think about the revenue build and you think about the sequential burn rates in the first, second, third, fourth and then 6, 7 to 8 quarters after those awards, it's clearly a combination of those 2 things, right? It's why I called it out in the prepared remarks. The preceding year obviously wasn't as good and has been a weight on that revenue path. So it is a blend of those 2 things. And I think that's certainly important.

With the book-to-bill strength is driven primarily in any given quarter, just given the relative scale of business units and the bookings policy by full service. So I think it's relatively straightforward to model the kind of burn rates that we've seen on that and to have some confidence that the revenue recovery now is exactly what you would expect to see in the context of having come out of 12 months on a trailing 1.0 and move through 12 months on a trailing 1.3 and moving forward with some confidence next year, which is where I was going with the numbers. I was just riffing on with Eric there. I mean if this business translates these kind of book-to-bills into mid-single-digit revenue expansion next year, that would not be on a herd of given the kind of book-to-bill and also strength elsewhere in the portfolio.

And does that give you the opportunity at least to say there's enough gas in the time to turn at $10.50 midpoint into something more like an $11.50, who knows? I mean there's no reason why not, right? But as I say, execution is out there.

In terms of pass-throughs, I guess the only 2 things I would say is that, yes, there's a lot of awards coming a lot of pass-throughs here. I don't know if it's more or less than anyone else. I suspect nobody does because I think we're the only ones giving you that level of transparency. And we do that for a reason because I think it helps investors understand strength, the market share gains and the phasing of the book-to-bill. I would also say that these are high-class problems. It just so happens that some of the most sought-after opportunities in the market just now come with a very high pass-through coefficient. And while I don't care about the pass-throughs in and of themselves, the complexity around pass-through is a really small price to pay for the kind of execution that the team are delivering. And it's not just commercial, it's operational, it's medical, it's scientific, it's technological, and I'm really pleased with it.

And to the extent that the world gets really deep into the analytics on this. I don't know how you can do any sort of comparative analytics on it when you think about the changes in bookings policy. I think you guys are aware, we're really conservative on FSP which doesn't carry any pass-throughs really. We put in only 1 year or some of the other very large CROs, but in 3, 4, 5 years of FSP into backlog or indeed into the words in the period. So you could get some pretty skewed analytics if you're trying to do it side-by-side. Hopefully, I've shared some light on the nature of your inquiry Dave. But I think these numbers are entirely consistent with what you would have hoped for a year ago with what you would expect now and entirely consistent with the kind of indications we're thinking about for 2027 and beyond.

Operator

Your next question today comes from the line of Justin Bowers from DB.

Justin Bowers

And just continuing with Dave's question, Barry, that $11.50. Is that consistent with your guidance philosophy of excluding buyback, and I know you're not talking about 2027 guidance, but just to clarify that. And then secondly, if I may, could you talk about the demand environment and what the funnel looks like? And any kind of indications around FSP, FSO mix. There's a lot of noise/questions from investors around that as it relates to large pharma.

Barry Balfe

So Justin, thanks for the questions. Look, we're not guiding that. So the intricacies of how people build models and what they want to do is really not something I want to be drawn on as really more just trying to build a bridge intuitively around what's the relationship between backlog, bookings, revenue inflection and earnings potential, right? So take that as of, for instance, I really want -- I did mean it when I said we're not guiding today. So maybe I'll give that and leave it there.

I think in terms of the demand environment, it remains really robust, at least for us, in large pharma FSO, which I'm not sure everybody expected 18, 24 months ago. I think it's been really robust, and we're really pleased with where that's been but it's never just selling 1 service, right? So people tend to think about Phase II/III clinical when I talk about large pharma. But if you look at -- you look at the labs, which have been posted in some great numbers. You look at evidence generation, where its book-to-bill is very strong. You look at a number of partnerships where we've added in new streams to that partnership both like the pharmacovigilance program I mentioned being layered on to an existing alliance. These are the things we said we wanted to do. We're already working at significant levels with, I think, 28 at the top 30. I can't print new pharma companies. What I can do is open up the number of distribution channels and sell more services along those channels. I think that's been pretty positive.

And in midsize, I think we talked about the demand environment there and the biotech very to my earlier comments. But across the board, I mean, opportunity flow is up high single digits on a trailing 12-month basis, and that's sort of mid- to high across different ends of the range or different parts of the business. So I think we're pretty satisfied probably in line with everybody else, frankly.

On the demand environment, we're probably seeing the same demand as well there. I just think we happen to be converting it at a slightly better clip, which is a good thing. And on FFO I mean, obviously, the numbers are a little bit different just because of the bookings of backlog policy. We said for some time, we've been very pleased with the development in our FSP business as we have in areas like labs and some of the ancillary carryclinical services that go with that. The area we needed to throw some real fuel on the fire was in FSO. And I think that's being borne out by these bookings, which, as I always say, those book-to-bills are disproportionately impacted by sales in FSO. So that's very, very encouraging.

And to add one new midsize to expand another and renew it in the quarter to take 3 biotech customers for more transactional relationships to these preferred partnership statutes that much more closely resemble alliances Obviously, we're talking to more established biotechs now. That's good. I also think the fact that we're engaging with 30% more biotech targets than we were a year ago, speaks to our strategic intent that we've been talking about some time, not just about how much demand out there, it's about how much of it you're meaningfully engaged with and at what rate you can convert us from opportunity to award or revenue and revenue to earnings. So it was a pretty broad question. I hope I've addressed the general just a bit, but I'm sure [indiscernible] might jump in for a clarification, if I have .

Operator

Your next question today comes from the line of Charles Rhyee from TD Cowen.

Charles Rhyee

Barry, just from what you just said there, when talking about having these -- getting preferred relationships now into biotech as well you kind of talked, I think, in your opening comments about companies now focusing more on expertise and outcomes versus effort. Just curious if that kind of focus may be on outcomes, perhaps or expertise. Is that changing maybe how contracts are pricing and being structured? Like do you foresee, particularly as you also start deploying more, let's say, AI tools as well into the process. Can you talk about maybe how you maybe envision pricing in the CR industry or at least for you could change over time.

Barry Balfe

It's a great question, Charles, and it's a really sort of broad church of potential answers. So let me drill down to what I think the key points are: One, of course, there's always discussions about rates. They're never going to go away. And we have a very savvy customer base who employ lots and lots of people to make sure they're getting value for money in terms of the rate per hour or rate per unit effort or whatever it's going to be. I think the point is that there's a much greater potential for saving time for saving money and reducing uncertainty by changing the way we work together and committing ourselves to results and to transformation than there is to arguing over the rate per hour of a monitor manager or anybody else. .

Now I'm not suggesting that pricing isn't incredibly competitive on the rate side, it is, but I think people understand that just because we give our teams much superior tools, simplified workflows, greater data insights, it doesn't reduce the cost of employing those people. It means those people can do more, better research faster. So I regularly start with these negotiations and saying, "I'm happy to sit in the rate discussion where it needs to be but I'd want rather have a conversation where we look at a business and say, we think we can make you x percent more efficient, more productive, more faster we're willing to underwrite the first y percent. But after that, I want that percent gain share because I've got investors too. I think these are more productive conversations. And I think when you get above the cut and thrust of individual study or project sourcing, into alliances, into preferred partnerships, into the executive tier where really we're talking about developing a portfolio and recycling surplus capital back into broadening the portfolio, running more studies better rather than running the same number of studies cheaper. Then I think that's the kind of language that tends to resonate. And candidly, the customers are making the most progress in the most rapid transformation are the ones that are coming around to that way of thinking fast. In our experience, I can't speak to everybody.

Operator

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

Elizabeth Anderson

Maybe sort of a 2-parter. One, just to confirm, it seems like what you're saying sort of based on your prior commentary is that on sort of like a like-for-like basis, you are getting sort of similar economics, given some of the increase in services, et cetera, that you're adding on as you were sort of maybe a year or so ago. So there's no sort of fundamental change or if there is a slightly on a positive side.

And then two, cancellations, as you pointed out, last quarter, came in a little bit above quarterly. Is that the right run rate to kind of think about going forward?

Barry Balfe

Yes, I'll take the second one first. I don't think there's much to see on the cancels line Elizabeth in a world where 5 to 6 is whatever power is. We think it's in around that range. They came in pretty close to 6. I don't see anything in there to be candid, no change. I'm not entirely sure I understood the question on economics. I think when we look at the business, it's about making sure we understand the importance of converting this backlog to make sure we avail ourselves with some positive operating leverage. I think that's important. When we think about the pricing environment, I'm not sure if that's where you were going. It's not that the volume of work has changed transformationally. It's that the way we're going to do that work over time is transforming significantly.

So the economics of how you factor in effort or how you factor in pricing and contracts will all evolve over time. And I think we're seeing customers vote with their feet. I think increasingly, customers are choosing providers who can, a, deliver value, confidence and results today at the same time as aligning with and leading that larger transformation, that disruption of the clinical development paradigm that I talked about. I don't know if there's anything more fundamental than win rate.

And I think to a very significant degree, one of the reasons the teams have sustained win rates or book-to-bills that candidly are much better than we need them to be, right? I don't need them to stay that good to deliver the kind of results that we've been talking about. But the reason -- one of the main reasons they have done is because sponsors are telling us that the plan is resonating, the capabilities are delivering tangible incremental gains now at the same time as joining them on their glide path. There's always a hybridization of our transformation in theirs and making those 2 things fit together. And when I'm asked how I can differentiate in the marketplace, there's lots of different ways. But I always call out our approach to partnership. It's one of the things we hear back repeatedly. It's about the ability and the desire to meet customers where they are and we configure your site to match theirs rather than the other way around. So I hope I got the nuance on economics, but if not, please let us know, happy to follow up.

Operator

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

Michael Cherny

Maybe just one clarification to make sure I heard you right. Did you say $43 million of net interest, I just want to get that right based on the press release. And then maybe building on Elizabeth's question a little bit. But as you think forward relative to that what you noted, Barry ongoing dynamic of price and rate conversations, what are you doing proactively to basically offset that? And how much of your push your investment in AI now is part of that managing to an EBITDA dollar profit level going forward?

Nigel Clerkin

Mike, it's Nigel. I'll take the first one. So yes, net interest expense, non-GAAP in the quarter was $43 million. And then, Barry, do you want to take the second one?

Barry Balfe

Yes. I think it's a pretty -- it's a pretty broad church again, Mike, if I understood your question well. I mean the first thing to say is that we manage pricing cost base and opportunity conversion in the aggregate. And a lot of it comes back to where we perceive economic value that we can create and economic value that we could capture. I think the teams have done an exceedingly good job on cost control.

I'm not surprised by it, but I am pleased with it. So credit to Nigel, GBS team on the G&A cost controls. We've always said we will seek to phase our cost action and our investment agenda within the parameters of business performance in that period, and we continue to do that well, reflects that well. But I also think that the operating teams have done really well to grow operational head count where there's capacity to be done now or capacity to deliver now but also sought to offset that, where there are other efficiency gains elsewhere in the business where we perhaps didn't need the same way of head count to deliver the same volume of work. So it's a blend of all of those things. And when you get in the room with the customer, it's ultimately about understanding what's important for them. And there are times, I said this before, where we'll walk away from work. If I stratify the reasons why we lose when we lose, price will come out as high as anything else.

In fact, I think it was joint cost in the last quarter, if I remember the data well. So there are times when a race to the bottom on pricing doesn't work for ICON, it doesn't work for the sponsor in my view either, but it certainly doesn't work for me and it doesn't work for our investors. And if that's the case, we are happy to pass on this one to keep making the argument for transformation efficiency, better study delivery strategy and conversion on that basis, and we'll catch you on the next go round. And I don't say that glibly. We don't like walking away from work. But I would much rather moves twice with the right idea and have a customer come back, then win once with the wrong idea and have them never work with us again. And that's a good core philosophy around here and not when I seem to change.

Operator

Your next question today comes from the line of Ann Hynes from Mizuho.

Ann Hynes

I'm sorry about before. I just want to talk about margins. Margins came in higher than my expectation. Is it tracking ahead of your expectation? Are you still on target to end the year at that mid-16.5% range. And also, I know you don't want to give 2027 guidance, but is there any major like headwinds and tailwinds that we should know about? .

Nigel Clerkin

Ann, it's Nigel. I'll take that one. So look, the margins obviously do reflect what we talked about previously. We did expect to see improvement on the dollars line as we went through the year based on improvements in business mix and obviously, operating cost efficiencies and so on as well, as we talked about before. The reported margin percent, we've also said consistently does depend on the degree of pass-through revenues to some degree as well, obviously.

So getting on to your point in terms of full year, look, the range we set out reflects that we've obviously increased the revenue range, reflecting higher pass-throughs as we've gone through the year. I think the last time we spoke, I said we anticipated full year margin, EBITDA margin of somewhere in the region of 16% to 16.5%, and that's still on track for that, depending on where we are. in that revenue range, which fundamentally will be largely driven by where we are in terms of pass-through activity for the fourth quarter.

So essentially, though, underpinning all of that, on track, absolutely in terms of our expectations from an operational delivery perspective and progression from an earnings dollars perspective, most fundamentally, heading into next year on, I mean, Barry obviously touched on earlier, initial perspective on potential for next year. We're obviously not guiding just yet -- and the factors remain the same factors. And obviously, pass-through activity, we will continue to monitor. But really encouragingly, having seen multiple quarters now a strong commercial performance, it does take some time for that to start to turn into the P&L, as we talked about before. But all those lead indicators do point to a framework that should allow us to see revenue growth next year, but I give some perspective in terms of potential for that. And that should translate, we would hope into meaningful earnings progression as well as we've said, given the strength of the business, given the platform that we have and given the opportunity for operating leverage. So we'll guide when we get to Q4, but very encouraged with where we are right now.

Operator

Your next question today comes from the line of Jailendra Singh from Tru Securities. .

Jailendra Singh

First, a quick housekeeping item. Given a few moving parts below the EBITDA line and so much focus are you guys even considering guiding on EBITDA maybe for next year? I'm going to stick with revenue and EPS. And my main question on the following up on the last discussion about the margin outperformance, I believe you guys are expecting SG&A to increase sequentially in third quarter from second quarter cause some one-time items in second quarter, but it was largely flat. Can you provide any color there? Trying to understand if 3Q SG&A level a good run rate or we should model anything different? .

Nigel Clerkin

Jailendra, it's Nigel. I'll take both of those. So look, it's a reasonable question in terms of guidance framework for next year. Obviously, we are thinking about lots of things in terms of guidance framework for next year. So leave out with us, and we'll be back to you with Q4 results and guidance, but I understand your perspective on that. Certainly, what we will absolutely try to do is make sure we give enough commentary that people have a reasonable perspective on what we think the outlook for the business is throughout the P&L. And we've tried to do that as we've gone through this year, I hope you'd agree.

To that point, on your second question, yes, we did anticipate or we did say that we thought SG&A would increase in Q3. So having said that, frankly, we're certainly not going to apologize for really strong cost discipline in the quarter. So I wouldn't read too much into that, Jailendra, and partly that was, again, just that strong cost discipline, partly it was some phasing of investments and so on.

Looking into Q4. I do think SG&A should increase in Q4. So my previous comments are probably still relevant for the fourth quarter. But again, that is one of the things we will be looking to manage hard as we go through the rest of the year. We put out a range for a reason and let's see where we end up within that range ultimately.

Operator

Your next question today comes from the line of Kevin Caliendo from UBS.

Kevin Caliendo

Really looking forward to covering you in the sector going forward. Given the improvements in the business, your past year accounting issues and the like. I guess my question is, we saw one deal already, decent sized deal in the space. What's the appetite that you might have for bolt-on or larger scale M&A going forward, just given where we are now in the cycle?

Barry Balfe

Kevin, it's Barry here. Welcome forward to speaking with you. We've been pretty consistent on this, as I hope we have on everything else that the appetite, indeed, the priority is for a balanced approach to capital allocation that will include the continuing return of capital to shareholders, investment in strategic capabilities organically and selective M&A where we think that the timing evaluation and the strategic fit is right. So you should expect to see all 3 from us. I don't think we're talking about transformational M&A. I sometimes roll [indiscernible] when I hear some of the postulations on that topic. I don't think anybody needs ICON to get bigger just for the sake of getting bigger.

I think any M&A that we would look at would have to pass a test. Are these areas that are potentially high growth, potentially high margin and a highly strategic fit for us whether that means that they give us high right to win or they are in an area where we have a high read to bright win, whether it's an enabling function that increases our right to win in other areas or whether it's simply building on parts of the business that are growing really, really quickly, but we think we can boost that growth within an injection of inorganic investment.

So I think that's really where we are. I'm not too concerned about more transformational M&A in the space. You shouldn't be thinking about us going out to spend $15 billion on a $10 billion asset, I don't think that would be good for ICON, and it's not something that we would entertain.

Operator

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

Luke Sergott

I just want to clear up some things and sorry for jumping on a little bit late, if you guys answered it. But can you just give us what the actual 3Q direct fee book-to-bill was? And can you elaborate a little bit why you just decided to change the disclosure.

Barry Balfe

I didn't consciously decide. Luke, it's broadly similar with previous quarters. To be honest, it's talon at about the same level as recently. So no major departure there. There was no policy on it. The guys continue to tell me that's the first time I give a number on one of these calls, everyone is going to expect me to give it forever and maybe you proved them right.

Look, the reason I focused on a trailing 12 month, 1.3 million was because it stands in contrast to the preceding 12 months, which was closer to 1 flat on direct fee trailing 12-month book-to-bill. And I think this is particularly relevant to how we model the pace of revenue recovery in terms of direct fee, particularly in full service outsourcing. I think it's the most relevant thing in terms of managing expectations and pacing that through.

So when you do there's -- whether you want to think of it as quality earnings or whether you want to think about it as a composition of bookings, where we're headed, I thought that was the more important number. And candidly, in a world where everyone is only providing the 1.6, I'm happy -- excuse me, the, I'm happy to put 1.56 up beside anything anyone else has posted in the last year. But we think it's probably incumbent on us to give a little bit more insight and a little bit more transparency to investors. And so that's what we're trying to do. But happy to clarify for you.

Operator

Your next question today comes from the line of John Meehan from Opera Research.

Jack Meehan

Wanted to ask about gross margin trends in the quarter. I think some of the sequential step-up might have been lower pass-throughs flowing through. But regardless, it seemed like a nice step up. Can you just talk about what's driving that? Are you -- is it possible to quantify any automation benefits you're seeing from AI at this point? And then is it possible to talk about how pricing is flowing through on gross margins and whether you think that's stabilized? .

Nigel Clerkin

Jack, it's Nigel. Why don't I take that? So look, the gross margin progression we saw in the quarter, again goes back to what we had anticipated. -- i.e., improvements in business mix as we went through the year as well as operating cost control and the measures we took in the first half starting to impact now in the second half. So those are the major factors really driving that. AI impact, we obviously are Barry touched on seeing some great traction with our customers in terms of the AI capabilities that we're now able to bring to them. we are also obviously looking at those tools in terms of internal efficiency gains as well. So it is both. So that is an element of those investments that we're making and some of the traction we're seeing in the margin, too. Pricing, I think Barry touched on earlier, nothing really hugely different in terms of the broader pricing environment compared to previous periods. I don't know if there you want to add to that, Barry?

Barry Balfe

Only to underlying a, what you said would be to underline that the difference between sold margin and P&L margin is execution and performance. So I think everybody tends to come at the question. I'm not suggesting you do, Jack, but from the perspective of where did you price the work? And that's surely an important point. But the market tends to self-regulate on price candidly. -- where it's really, really important, is how effectively are you executing on that work? What level of visibility do you have into your cycle times into your deliverables into your productivity utilization on these contracts?

And this is across a much more diverse business than is perhaps apparent from the outside. So it's a pretty complex picture. And of course, succeeds with the market performance. And that's why I'm pleased with the step up, very honest because we ask a lot of the teams to look hard at these projects to understand how we can deliver them not just faster and at better value for customers, but with greater predictability, so we can decide where to price them in the first place. we can also better predict where margins are likely to go. And if there's one, I guess, principal thing that I'm pleased with around the quarter it's probably the third quarter in the row that looks a lot like we thought it might.

And I think that's an important place for this business to get back to. It's an important element of our business planning. And honestly, I think it's an important component of calls like today speaking with yourselves and also getting an indication of where we think the world is likely to go. So it's a blend of all those things.

Operator

Your next question today comes from the line of Sean Dodge from BMO Capital Markets.

Sean Dodge

Maybe just on the 2026 EPS guidance. You narrowed the range a bit, but also presumably have some moving parts in there with the debt refinance and higher interest expense. And then you did a lot of share repurchasing too in the quarter. Maybe if you could just bridge for us what's changed beneath the service and the narrowed EPS guidance kind of what's new in there and what's not?

Nigel Clerkin

Yes, Sean, thanks. It's Nigel. I'll take that. You touched on 2 factors for sure, either 1 of them massively material to the overall guidance range, but there would have been a factor in each of them in different directions, obviously. We also -- relative to when we put guidance out originally back in May, FX is a bit more of a headwind than it was back then. So there's an element of that built in there as well. Fundamentally, Sean, I would say the broader underlying operational assumptions that we had when we set the original guidance range are still the same largely, to be frank.

Obviously, the difference is we're much further into the year now, and that allows us to narrow the range from where it was originally. So some minor moving pieces below the water line, if you will, but nothing from really material from an operational perspective. Obviously, we are very, very focused on where do we finish within that range. There's a bit of time left to go in a year, and Barry has touched on the focus that we certainly have across the business on operational execution. And that is our drive between now and the end of the year as well as continuing with commercial progress we hope. So let's see where we land. But certainly, the range is narrower and tire for a reason, the underlying operational assumptions are still very much intact.

Operator

Your next question today comes from the line of Jared Haase from William Blair Company.

Jared Haase

I appreciate all the color you've given so far on innovation and AI. I wanted to pull on that thread a little bit more. So I'm curious, when you speak with customers, is there a broader theme in terms of, I guess, the areas operationally in the study workflow that most resonate with customers in terms of the innovation opportunity? Or is it sort of just a broader focus on efficiency? And then I'm also curious, is there anything incremental you would point to where you feel like ICON is uniquely positioned in the market to deploy some of this AI technology for customers relative to your peers?

Barry Balfe

Jared, very welcome, nice to meet you. Look, I think customers are interested in what they might have missed. And everybody can look at document AI, everybody can look at medical writing, a lot of people have been looking at coding, et cetera. And most of the more established companies have a clear sense of what's within their capacity to achieve. Sometimes, that is accurate and sometimes it's not. Our job is to support them, but also to filling gaps around the edge. Anything that will drive speed, what drive cost, what drive predictability or drive cycle time reduction is welcome. I think unsurprisingly, therefore, the higher areas in terms of spend or impact on study duration are key. We talk a lot about feasibility and study design strategy in the first instance because so much of your study performance is dictated by the quality of your plan before you actually turn aside, you better have a good architecture to make sure the plan is good.

Things like study start-up you missed a day at the end of the study, you missed a day. He missed a day at the start of the study, you missed recruitment time and everything cascades down through the study. So that's really important. But clinical and project management are still huge. I mentioned Meridian in passing. I was actually with a customer yesterday doing a demo with one of our teams as part of a partnership pitch, I guess, you can call it. And the feedback I got from the customer was that you guys have fundamentally challenged the status quo and that this is what we have been longing for and what we're talking about.

With the ability not just to surface data from '17 or '18 different sources to build this into a workflow that effectively makes the human more effective, right? So when somebody is planning a study visit, not to bore you now with operational inside baseball, the ability of the system to intervene and say, I see you're planning that, but the fact say you should be looking at this. That's really valuable. I see you've scheduled a 2-day visit. Well, if it's only 2 days, you better bring 3 people with you because we think you've got 6 days' worth of work to do. The ability to batch communications to a site and then ship it as one e-mail with 7 points rather than 7 e-mails, which drive sites absolutely crazy, drives down engagement, creates delay and reduces recruitment. These are the kind of things that might sound like small incremental gains, but they fundamentally represent what operational people care about.

And if we're anything at ICON, we're a development operations. So I go back to the point I made on a recent call. I'm not sure it might have been [indiscernible] the time. we're not just interested in frontier capabilities. We're very fortunate to access some of the great best frontier models. But a lot of the problems we're solving aren't directly influenced by whether you're on the very latest and greatest version of the tech or 2 generations ago of a large language model. They're much more about subject matter expertise about process reengineering and understanding how to solve problems in the pretty esoteric world of clinical development operations.

So pretty broad answer to your question. We care about all the areas. I'll fight with anybody for a day of time, $1 of spend or 1% of the predictability, but really focusing on design, focusing on getting the right side start at faster and making better decisions, putting insights in the hands of our teams and our sponsors faster and more effectively. These are the areas where we tend to focus our fire. And I think part of what's resonating with customers around the AI story and the tech transformation story is that it's incredibly targeted. I don't think you can just put a sticker on the door and say, I'm an AI fan. And I don't find them is going to get us anywhere. This is about solving really difficult problems in the real world. And to do that, you've got to make some targeted best and to deliver on them. And that's what we continue to do.

Operator

We will now take our final question for today. And the final question comes from the line of Ryan Halsted from RBC.

Ryan Halsted

I just wanted to come back to the 2026 guidance revision upward I appreciate that you are now reflecting the higher pass-through. But I wanted to, I guess, first, can you clarify as we think about exiting 2026, are we kind of the at a leveling off of pass-throughs, at least on a percentage of revenue?

And then secondly, holding the divestitures and the pass-throughs aside, can you expand on the greater visibility on kind of the growth trajectory of the underlying business exiting the year? And any color on visibility into the types of project work, maybe that you're burning through, that's kind of giving you confidence on the top line.

Nigel Clerkin

Ryan, it's Nigel. Let me take that. So yes, you're right. Absolutely. The change in the revenue guidance upwards by about $150 million at the midpoint from where it was before, it is really driven by the pass-through momentum that we've seen through the course of the year. pass-throughs now. We've touched on this, I think, in the previous call, we're somewhere in the low 30s, approaching 1/3 of our revenues approximately. So that is roughly where that's at.

Looking into next year, obviously, we're not guiding just he asked me to touch on this earlier, that obviously will be 1 of the factors we get into in more detail when we give that guidance with our Q4 results. but probably somewhere in or around that range is a reasonable place to think about it as a starting point.

In terms of the momentum that we're seeing in the business, Barry touched on it earlier, but just repeat again, consistency in terms of commercial performance should set us up for a reasonable place heading into next year. We're not guiding today, but is it reasonable to think that with good execution, you can get to something in the region of mid-single digit revenue growth next year. That's -- it seems like that's a reasonable proposition at this point. But again, Barry, I don't know if there's anything you wanted to add.

Barry Balfe

Maybe I'll just touch on that briefly and then pivot to closing thoughts. First of all, I completely agree. Volatility is what it is. What you win when you win it, when and how it starts and how effectively you convert it can have a significant effect on pass-through volatility. And it's one of the reasons why we try and be a bit more transparent around earnings in dollar terms and in EPS terms rather than just in percentage terms of. I think we've got a good question earlier on about how to guide for that, and that's certainly something that we'll spend some time thinking about once we're through the budget process and we're thinking about that. .

But the underlying question, I think is the better one. There is some significant momentum on bookings. The signs of inflection are there. And they're not just there in the P&L. They're where we expected and indicated they might come, little bit of margin expansion on the gross line, a little bit of expansion on the EBITDA line and inflection for a slight, albeit small, but an increase in direct fee revenue sequentially, the narrowing of the guidance for Q4 and who knows if we'll finish on above or even below that range. But even at the midpoint, you're looking at another times or so of earnings expansion quarter-over-quarter. And if you take that, for instance, numbers we've been throwing around for 2027, it's certainly viable for us to grow from there.

So I think we feel good about the state of the business, we feel good about the demand environment. We obviously feel great about how well our teams have done and how hard they've worked to convert that opportunity. And that's about the quality of the ideas. That's about the quality of the expertise and it's about the face people have in ICON's teams to deliver. It really is taking the baby and mining it and handing your customer back safely set of data that has integrity and have scientific validity in, people don't do that lightly, and we don't take their confidence in us lightly either. So we feel pretty good about it. We're still a pretty understated bunch of folks over here. It's one quarter and after the next one foot in front of the other. But looking back on our remarks from our last 3 earnings calls, I think they've been remarkably consistent on what we thought the shape of that recovery would be.

And I'm pleased to say that's broadly what we're communicating here today. And I hope that, that will be the case going forward as we continue to execute. And what I think is a positional advantage in the industry where we have the scope, we have the scale and we have the track record of delivering the types of trials that more and more people want to run, and we have the tools and the teams to run them more predictably, more cost effectively and faster.

So we're going to leave it there for today, folks. Thank you very much for all of the questions, and we look forward to following you very soon.

Operator

This concludes today's conference call. Thanks for participating. You may now disconnect.