Prompt:
Human: We hope you are all well.
We will also refer to certain non-GAAP measures.
We believe that these measures provide useful supplemental data that, while not a substitute for GAAP measures, allow for greater transparency in the review of our financial and operational performance.
At this point, it is my pleasure to turn things over to Philippe Krakowsky.
I'll start with a high-level view of our performance in the quarter.
Ellen will then provide additional details.
Then I'll conclude with updates on the highlights at our agencies, to be followed by Q&A.
First and foremost, as Jerry said, I hope that you and your families are keeping well.
As we all know, around the world, the pandemic is still with us to a significant degree.
With all that entails, it bears mention that our people continue to navigate the many challenges, both personal and professional, presented by the health crisis.
Their extraordinary resilience and capacity for innovation, as well as their care for one another and their commitment to our clients, are inspiring.
Against business conditions that continue to be demanding, our people have driven the solid growth and the high level of first quarter profitability that we are reporting today.
Turning to those results, beginning with revenue, we are pleased with our start to the year.
First quarter organic net revenue growth was 1.9%.
That reflects solid performance in the U.S., an organic decrease of 20 basis points, and strong international growth of 6.3%, with increases in every world region.
In the U.S., you'll recall that we are comparing to very strong underlying performance in the first quarter of 2020 when we faced headwinds of nearly 4% due to certain 2019 client losses that we previously identified.
Domestically, during this year's first quarter, we saw increases in areas such as media, data services and technology and our healthcare specialist agencies.
Our international performance was paced by 12.4% growth in Continental Europe, where we had a strong start to the year by our media, data and tech offerings as well as McCann Worldgroup.
Worldwide, our healthcare and retail client sectors, which were consistent outperformers last year, were again our growth leaders in the first quarter.
From the standpoint of our operating segments, Our IAN segment grew 3.2% organically, led by media, data and technology and by the healthcare specialty agencies.
As expected, in comparison to last year's largely pre-pandemic first quarter, global conditions in Q1 continued to weigh most heavily on the events and sports marketing disciplines and on certain project-driven businesses in both IAN and DXTRA.
Nonetheless, while the environment understandably retained a strong note of caution across our offerings and client sectors, the lows were generally not as low.
Clients are finding their footing amid a global economy that's increasingly showing signs of recovery.
As better days ahead begin to come into focus, conversations with clients have generally become more positive and constructive.
Turning to operating expense and profitability.
Our teams once again demonstrated outstanding discipline.
Given the uncertainty that prevailed in 2020, we made decisions and took a series of actions during the year, necessary, but in many cases, no less difficult, to ensure the long-term health of the overall business.
Our expenses in the quarter reflect much of the benefits of the strategic restructuring executed over the course of last year, most notably, in our expenses for base payroll and occupancy.
We continue to be highly confident that, over time, we are well positioned to realize the full level of permanent operating expense savings that we've talked about previously, which, as a reminder, annualized at $160 million.
Along with a return to growth and the benefits of our restructuring actions, our Q1 results were further helped by variable expense categories that continue to run at very low level, given that many of our activities are still restricted by the pandemic.
These include significantly lower expenses for business travel and meetings as well as their associated costs.
Our first quarter net income as reported was $92 million, which includes the expense of certain nonoperating items.
Our adjusted EBITA was $266 million, a level which is approximately 2.5 times the first quarters of recent years.
Our adjusted EBITA margin was 13.1%.
Diluted earnings per share was $0.23 as reported and was $0.45 as adjusted mainly for our loss on the early extinguishment of debt, the disposition of certain small nonstrategic agencies, both of which are nonoperating expenses, and our expense for the amortization of acquired intangibles.
During the quarter, we refinanced a portion of our outstanding debt on very favorable terms, while extending our debt maturity profile.
This level of financial flexibility positions us well in the event there is volatility as the global economy moves through a recovery.
We're pleased to be able to share with you these strong set of results, which build on our company's long-term record of industry outperformance and consistent margin expansion.
It bears mention that we continue to invest in our people and our capabilities and, as a result, to further differentiate our offerings in the areas of strongest opportunity and growth.
This has been particularly relevant since we are seeing growing client demand for technology and data services and amid accelerating transformational change in marketing and media.
Our ability to create marketing and media solutions that bring together creativity, technology and data in order to solve for higher order client opportunities are what drove growth in the first quarter.
Given the complexity of the media and consumer landscape, marketers are looking for partners who can help them build their businesses through more precise, personalized and accountable engagements with individuals.
With the deprecation of third-party cookies, all businesses are increasingly focused on realizing value from their first-party data, who are finding partners with whom they can pool data assets.
As important, this needs to be done in a way that's respectful of people's privacy and anticipates likely regulatory development.
We remain well positioned to benefit from those opportunities.
Of course, our first quarter is seasonally our smallest, and most of the year still remains ahead of us.
We also appreciate the heightened degree of business uncertainty as part of the current reality facing all companies until a business like ours translates into more challenging visibility to the full year.
As a result, we're staying very close to our people and our clients, asking our teams for frequent financial updates and continuing to carefully manage expenses.
To date, we're seeing cautious optimism from clients, and the tone of business has firmed in the last few months.
Reopenings, fiscal stimulus and vaccination programs in a number of our largest markets are providing a tangible lift to economic activity and marketing demand.
As we mentioned to you on our last call, we remain confident in those areas we can control, namely the strength and competitiveness of our offerings and the people and talent within our group.
We are seeing that the most contemporary services we provide are growing in terms of the receptivity from clients and prospects.
Given our strong start to the year, and based on the assumption that there'll continue to be a reasonably steady course of public health and global economic recovery, we believe that we can deliver organic growth for the full year in the range of 5% to 6%.
With that level of growth, we would expect to achieve 2021 adjusted EBITA margin of approximately 15.5%.
As such, we see this as another year of strong value creation for all our stakeholders.
We will, of course, keep you apprised of our progress as the year develops.
On that note, I'll hand the call over to Ellen for a more in-depth view on our results.
I hope that everyone is safe and healthy.
I would like to join Philippe in recognition and, candidly, admiration of our people for their terrific accomplishments under very difficult circumstances.
First quarter adjusted EBITDA, before a small restructuring adjustment, was $265.9 million and margin was 13.1%.
These are levels that compare very favorably against any previous first quarter.
We returned to growth with variable expenses that are lagging the recovery in revenue, and we are additionally seeing the structural benefits of last year's restructuring program.
Diluted earnings per share was $0.23 as reported and $0.45 as adjusted.
The adjustments exclude the after-tax impacts of the amortization of acquired intangibles, a small restructuring refinement, nonoperating losses on sales of certain small nonstrategic businesses and the nonoperating loss on the early extinguishment of debt.
During the quarter, we refinanced $1 billion of senior notes that had been scheduled to mature over the next few years.
We placed the $1 billion in new notes maturing in 10- and 20-year tranches.
The timing of those transactions initiated in mid-February was favorable in light of the subsequent rise in market rates.
We appreciate and value the support and the reception that we received.
As you may have seen in late March, we also received upgrades to our outlook from both S&P and Fitch.
Turning to slide three, you'll see our P&L for the quarter.
I'll cover revenue and operating expenses in detail in the slides that follow.
Turning to Q1 revenue on slide four.
Our net revenue in the quarter was $2.03 billion, an increase of $55.6 million.
Compared to Q1 2020, the impact of the change in exchange rates was positive 1.5%, with the dollar weaker against currencies in most of our largest markets.
Net divestitures were negative 60 basis points.
Our organic net revenue increase was 1.9%.
At the bottom of this slide, we break out segment revenue in the quarter.
Our IAN segment was -- grew 3.2% organically, a terrific result against last year, largely non-COVID first quarter.
We saw solid growth by our offerings in media, data and tech at FCB and at McCann Worldgroup.
At IPG DXTRA, the organic change in the quarter was negative 4.8%, which reflects the weight of live events and sports marketing within the segment, the disciplines that have been most significantly impacted by the pandemic.
With that, DXTRA's performance was a sharp sequential improvement from the fourth quarter, especially in the public relations disciplines.
Moving on to slide five, which is a look at our organic revenue change by region.
In the U.S., which was 65% of net revenue in the quarter, our organic decrease was 20 basis points against the challenging comparisons underlying our headline number from a year ago.
Compared to Q1 2020, we did see continued pressure on events and sports as well as certain project work, as has been the case throughout the pandemic.
International markets were 35% of our net revenue in the quarter and increased 6.3% organically.
We grew in every international region, which is a notable improvement from Q4.
Continental Europe grew 12.4%, with increases in every major national markets, including Spain, Germany, Italy and France, driven by increased spend from existing clients.
With double-digit growth, there are a number of operating highlights in the region, including strong increases at media and tech and at McCann.
The U.K. increased 3.5% organically and, again, this is net of continuing headwinds in the events discipline We had solid growth at McCann at our media, data and tech offerings and at MullenLowe.
Asia Pac grew 3.4% organically.
Among our largest regional markets, we had strong gains in Australia and Singapore, while China and India's revenues declined.
Our organic growth in LatAm was 5%, with particularly strong results across Mexico, Colombia, Argentina and Chile.
Our Other Markets group grew 7.3%, with notably strong performance in the Middle East.
Moving on to slide six and operating expenses in the quarter.
Our net operating expenses, excluding billable expenses and the amortization of acquired intangibles, decreased 6% from a year ago and to 2.8% growth of our net revenue.
The result was first quarter margin expansion to 13.1% from 4.9% a year ago.
We have significant year-on-year expense savings in a number of different categories, most notably our restructuring savings in payroll and occupancy and a sharp decrease in certain variable operating expenses.
In the latter category, I would call out specifically the sharply lower travel and related expenses, for the obvious reasons, and significantly reduced bad debt expense, which was at an increased level in the first quarter of 2020.
As you can see on this slide, our ratio of total salaries and related expense as a percentage of net revenue improved by 340 basis points to 68.7% compared with 72.1% a year ago.
Underneath that, we drove very strong leverage on our expense for base payroll, benefits and tax, which improved by 360 basis points.
We had a lower severance expense ratio, which was only 30 basis points of net revenue compared to 120 basis points in Q1 2020.
At quarter end, total worldwide headcount was approximate 51,200, a decrease of 6.1% from a year ago as a result of our restructuring and regular severance actions taken over the course of last year as well as our business dispositions.
Also on this slide, our office and other direct expense decreased as a percentage of net revenue by 480 basis points to 14.4%.
We continue to have significant decreases in our expenses for occupancy, driving year-on-year leverage of 110 basis points.
We leveraged all other office and other direct expense by 370 basis points, which includes the decreased expense for travel and bad debt.
Our SG&A expense was 1.4% of net revenue, an increase of 30 basis points.
On slide seven, we present detail on adjustments to our reported first quarter results in order to provide better transparency and a picture of comparable performance.
This begins on the left-hand side with our reported results and steps through to adjusted EBITDA and our adjusted diluted EPS.
Our expense for the amortization of acquired intangibles in the second column was $21.6 million.
The restructuring charges were $1.3 million.
To be clear, these are small adjustments to estimates related to our 2020 restructuring program that we concluded at the end of last year.
Below operating expenses, in column 3, we had a pre-tax loss in the quarter of $12.5 million in other expenses due to the disposition of a few small nonstrategic businesses.
To the right of that, our pre-tax loss due to the early extinguishment of debt was $74 million, which relates to the refinancing and extending the maturities of $1 billion of our senior notes.
At the front of the slide, you can see the after-tax impact per diluted share of each of these adjustments, which bridges our diluted earnings per share as reported at $0.23 to adjusted earnings of $0.45 per diluted share.
On slide eight, we turn to cash flow in the quarter.
Cash used in operations was $249.8 million compared with the use of $277.1 million in Q1 2020.
As a reminder, our operating cash flow is highly seasonal.
We typically generate significant cash from working capital in the fourth quarter and use cash in the first quarter.
During this year's first quarter, cash used in working capital was $496.9 million and follows our fourth quarter of last year, where we generated over $1 billion from working capital.
In our investing activities, we used $28 million for capex in the quarter, which was essentially offset by the net proceeds from the sales of investments.
Our financing activities in the quarter is $212.7 million, which reflects the redemption and issuance of long-term debt and our common stock dividends.
Our net decrease in cash for the quarter was $492.7 million.
Slide nine shows the current portion of our balance sheet.
We ended the quarter with $2.02 billion of cash and equivalents compared with $1.55 billion a year ago.
Under current liabilities, the current portion of long-term debt refer to our $500 million, 3.75% senior notes, which matures in October of this year.
We plan on repaying these notes from cash on hand.
Slide 10 depicts the maturities of our outstanding debt and our diversified and extended maturity schedule following our activity in the first quarter.
Again, we have the maturity in October this year and then only $250 million due in April 2024.
Thereafter, our next maturity is not until 2028.
In summary, on slide 11, our teams continue to execute at a high level in an unprecedented environment.
And I would like to reiterate our pride in, and gratitude for, the efforts of our people.
The strength of our balance sheet and liquidity means that we remain well positioned, both financially and commercially.
It's worth repeating that Q1 is our smallest seasonal quarter, but nonetheless, we are pleased by our start to the year.
The return to organic revenue growth is a sign that our clients have begun to pivot to an investment mindset as they look to build their brands and grow their businesses in line with the broader economic recovery.
Our performance is also a reflection of the strength of our people, our offerings and our long-term strategies that have helped us drive consistently strong performance over time.
We all know that the pandemic has accelerated a range of underlying trends, whether in business or society at large.
As a result, many of our clients are undertaking meaningful transformation of their companies.
This means adopting new ways in which they go to market in order to keep pace with rapid digitization of consumer behavior and economic activity.
In a world that's more cluttered than ever with messages and channel all vying for our attention, the most critical challenge is to combine great ideas that come from the human storytelling side of our business with strategies and insights that can be generated by our technology and data capabilities.
We've increasingly seen the amounts of time people spend online, picking out content that's engaging, informative, entertaining, or some combination of all 3.
Content is undoubtedly more important than ever, and that's what makes the creative side of our business so vital.
Equally important is getting those messages to people in ways that are relevant, respectful of their privacy and ultimately connect with them in meaningful ways.
It's also key to take the information flow that results from all those digital interactions and apply it at every step along the process, from audience definition to creative ideation, in order to better understand the impact that our clients' communications are having on their businesses.
Our differentiated capabilities include a range of data-driven offerings that can do this both at scale and at speed.
As you know, we've been developing a data and tech infrastructure that underpins the full portfolio of our agencies and deliver solutions to a broad range of business problems through what we call the Open Architecture model.
All of our major clients are seeing the benefits of this integrated approach as our prospective clients.
During the quarter, it was gratifying to see that the Kinesso behavioral sciences teams are engaging with more of our advertising and marketing services agencies than at any time since we launched those offerings.
Despite the challenging external circumstances that we continue to deal with in the quarter, certain key elements of our business remain constant.
We will always succeed by adapting rapidly in our ways of working and how we are meeting the needs of clients.
Since the start of the year, we onboarded or promoted top talents across the organization, once again received high levels of industry recognition and saw solid new business performance, where we remain net positive for the past 12 months.
As you've seen in our results, growth in the quarter was driven by contemporary offerings in which we've consistently invested, including media, data and tech, healthcare and digital user experience.
Another area where IPG has invested significant resources is in our environmental, social and governance programs.
For some time, we focused on building a culture of high ethical standards by adhering to a set of values centered around respect for every individual.
As a company responsible for creating some of the world's most well-known marketing campaign, we have an obligation to ensure that the work we do as well as how we deliver it supports the long-term well-being of our communities.
This quarter, IPG released its sixth annual sustainability report using the Global Reporting Initiative Standards framework.
The report can be found on our website, and it represents another step forward for us in our commitment to ESG.
In terms of climate action, we track IPG's global energy usage and greenhouse gas emissions across our entire portfolio.
Next month, we plan to announce several strategic priorities focused on tackling climate change, including a science-based target for reducing our emissions globally.
The report also aligns with the UN Global Compact and focuses on human capital disclosures.
Further, we make clear that we operate with a core expectation that individuals deserve control over their data, and that we are responsible for promoting high ethical standards in terms of data privacy and security.
Equity and inclusion also remain areas of focus for us.
Our agencies are attuned to this priority, and they are held accountable because we have to show further progress when it comes to diversity in our ranks.
IPG's latest MSCI ESG Ratings report, which is a key ESG data provider for our various stakeholders, saw an increase in our company's score to an A rating.
Our improvement was the result of increased disclosure when it comes to human capital management, our position and capabilities related to data privacy and certain governance enhancements.
More recently, we joined Civic Alliance, as well as many of our clients, in calling for the protection of voting access here in the United States.
We continue to be committed to promoting democracy, and we'll work to support safe, accessible and fair elections, as well as to encourage our employees to participate in civic life.
As a business in which attracting top talent and advising clients is crucial to our success, a robust approach to ESG is a key part of our long-term strategy and important to all stakeholders.
Turning now to highlights from our portfolio.
During the quarter, we issued our second Media Responsibility Audit, addressing in a structured and consistent manner one of the most topical issues in the digital media ecosystem.
This framework and the principle it sets forth continue to be well received by clients as well as key industry groups.
Mediabrands' MAGNA unit also hosted a first-of-its-kind equity upfront, a week-long event intended to raise visibility and receptivity for black-owned media and media that serves black audiences.
In addition, the network announced that it would be joining forces with TikTok for a creator and content accelerator.
Two of our most dynamic units were in the media space, where we continue to leverage our deep data resources and capabilities.
We're seeing strong growth in Matterkind, which is customizing addressable media activation at scale for more of our clients.
At Reprise commerce, we have rapidly scaled operations on a global basis as we address growing needs in e-commerce, particularly for insight, content and analytics.
Following on a series of new business wins, Initiative elevated its U.S. leader to global CEO, where we believe she will have an even greater impact on the network's success.
At UM during the quarter, we added a global rental car client as well as an auto OEM in EMEA and HBO Max in LatAm.
UM was also named an outstanding company for working mothers, and three of its executives were named Adweek Media All-Stars, a distinction that was also earned by leaders of Reprise and Mediahub.
At our creative integrated global agencies, both McCann Worldgroup and FCB were named to the top five most awarded networks of 2020 in The Drum's World Creative Rankings.
Both also had work in the Super Bowl that was well received in a number of viewer polls and rankings.
Following the implementation of our succession plan, at the end of 2020, McCann Worldgroup posted a solid first quarter.
Along with most awarded networks of 2020 in the Drum rankings, McCann New York came in at number four on that list in terms of the top 100 agencies worldwide.
At MRM, the agency was again named a leader in Gartner's 2021 Magic Quadrant for global marketing agencies based on their ability to serve as key strategic business partners for clients and to execute on critical marketing priorities.
Huge and R/GA also featured on that list.
The health operations at McCann and FCB performed strongly in the quarter and continue to take share in the marketplace.
The notable program I'd like to call out was FCB Health's launch of the trial for number clinicalequality to shine a light on racial bias in clinical oncology trial.
In MullenLowe Group, Mediahub continued on its new business streak with the addition of global wins in Slack and Telly as well as New Balance in the U.K. Mediahub also introduced its inaugural Diversity-Owned Media Day and revamped its U.S. leadership team with a series of internal promotions.
The MullenLowe advertising network continues to be a leader in purpose-driven work.
Partnering with several independent casting agencies, the agency recently launched a campaign for Unilever's Dove to promote inclusivity in commercial casting.
In the U.K., the agency has continued to do important work on behalf of the government to inform and educate the British public concerning the pandemic.
In the campaign U.S. Agency of the Year awards, the Martin Agency was recognized with multiple honors.
And the agency also teamed with Mediahub for an integrated win of Terminix in Q1.
Huge posted strong results during the quarter and saw two big wins, adding Coppertone and Wakefern to its client roster.
The agency also announced the return of its Huge XD School, with a renewed equity-centered purpose that seeks to use education to increase the participation of underrepresented identities in the design industry.
And in R/GA, the agency's Venture Studio program announced the launch of a new Coalition Venture Studio with a mission to support Black start-up founders.
IPG DXTRA companies continue to deliver specialized capabilities and integrated solutions for clients in our evolving world.
Cone was once again a standout in new business arena.
Weber Shandwick was named PR Agency of the Year of the Campaign U.S. Awards.
And the agency also launched the Plan Vx open playbook, a communications program that draws on extensive vaccination and public health communications expertise to help companies play a role in getting America vaccinated.
At Octagon, leader in sports marketing, we recently promoted a longtime executive to the role of CEO.
Performance at Acxiom was consistent with our expectations and in line for a year of solid growth in 2021.
The company continues to carve out a position as an authority in the integration of marketing and advertising technology.
During the quarter, Acxiom expanded its partnership to better manage and measure campaign execution through the cloud in order to provide tangible improvements in campaign efficiency and speed.
Acxiom is also accelerating its development in client verticals where it sees opportunities.
Recently, Fortune named Acxiom one of 2021's Best Workplaces in Technology.
Working closely with the Acxiom data teams, Kinesso deployed its enhanced identity solution with half a dozen large clients.
This has already driven double-digit lifts in campaign efficiency.
Kinesso also expanded its range of direct data integrations with prominent platforms and ad tech companies.
As I mentioned earlier, we are pleased to see the Kinesso API connecting data and analytics capabilities across more of the IPG portfolio, since we see this as a growth driver for our business and a source of potential new revenue streams.
Acxiom, Kinesso and Matterkind, are working together to bring end-to-end data and identity solutions to clients, in collaboration with a number of IPG agencies.
We've seen the impact of this recently in new wins and expanded assignments in the telecom, auto, healthcare and financial services sectors.
Looking forward, we will stay focused on unlocking the enormous opportunities that exist due to the changes and disruptions that have accelerated during these past 12 months.
We worked over the years to embed digital capabilities throughout our organization and build a foundational layer of tech and data infrastructure that informs all our work.
As a result, we have a deep understanding of audiences at the individual level based on the strong legacy of ethical data practices.
Personalization, privacy and accountability are only going to grow in importance and value going forward.
Our vision is, therefore, for IPG to become a key partner in ensuring that clients businesses thrive in the digital economy.
As you'd expect, we are focused on supporting their physical and mental well-being and listening to them in planning a return to office.
That's likely is to begin to a meaningful degree in September, dependent on continued progress on matters related to resolving the public health crisis.
It will be a gradual and iterative process in which we obviously were going to have to test and learn as we go.
As such, on the cost drivers that go hand-in-hand with live collaboration with colleagues as well as calling on clients in person, which have, of course, been reduced as a result of lockdowns, we'll begin to work their way back into our ways of working as well as our operating results.
We've already shared with you our perspective on the balance of the year, which is based on the assumption that there will continue to be a reasonably steady course of macro recovery.
As is clear, we view our current performance and long-term strategy as significant factors that will continue to enhance shareholder value.
As always, we're committed to sound financial fundamentals, including debt reduction as well as continuing to grow our dividend.
We also remain focused on getting back to our share repurchase program, when appropriate.
We will, of course, keep you apprised on progress as the year develops.
 Assistant:

Chosen response:
compname reports q1 earnings per share of $0.23.
q1 adjusted earnings per share $0.45.
q1 earnings per share $0.23.
compname says reported net revenue of $2.03 billion, an increase of 2.8% from a year ago.
interpublic group of companies - positioned to deliver fy 2021 organic growth of 5.0% to 6.0% and adjusted ebita margin of about 15.5%.


Prompt:
Human: We hope you are all well.
We will also refer to certain non-GAAP measures.
We believe that these measures provide useful supplemental data that, while not a substitute for GAAP measures, allow for greater transparency in the review of our financial and operational performance.
At this point, it is my pleasure to turn things over to Philippe Krakowsky.
As always, I'll start with a high level view of our performance in the quarter.
Ellen will then provide additional details, and I'll conclude with updates on key developments at our agencies to be followed by Q&A.
These include the transition to work from home, and now are planning for return to office in many parts of the world, as well as the significant personal difficulties presented by the long course of the pandemic.
It's due to the efforts of our people, their commitment to their craft, our clients and to each other that we can share with you today these very strong results.
Performance that demonstrates our resilience represents a remarkable rebound from the impact of the pandemic, and is also the largest second quarter in our company's history.
Our strong results in the quarter build on IPG's consistent record of industry outperformance and margin expansion.
Our growth across regions, disciplines and client sectors speaks to more than a recovering global economy.
It underscores the elevated value that marketing and media partners can deliver in the integration of creativity, technology and data at scale made the significantly increased velocity of digital transformation.
At Interpublic, we're confident that we are attuned to the powerful currents that are transforming consumer behavior and are required for business relevance.
And then we are increasingly delivering differentiated and higher-end solutions that help our clients win in a world of accelerated technological and societal change.
That takes creativity and precision, data and accountability, all of which we're able to bring together in customized teams that drive talent from across our portfolio.
Ultimately, our growth speaks to our ability to drive outstanding business results for our clients.
Our net organic revenue growth in the second quarter was 19.8%.
That's against the second quarter of 2020 when as you will recall our organic change was negative 9.9%, which while well ahead of our peer group did mark our steepest decrease of the recession.
It's also important to note that our 7.9% organic increase this quarter relative to the pre-pandemic second quarter of 2019.
Compared to last year, our organic growth was at double-digit rates around the world.
In the US, it was 17.4%, growth in our international markets ranged from 14% in the Asia-Pacific region to 49% in Latin America.
We also had a very broad contribution from our operating segments and disciplines.
Our IAN segment grew 20.5% organically with increases led by media, data and technology and with solid contributions from our global integrated networks.
There was also strength across most of our disciplines led by healthcare.
At our DXTRA segment, organic growth was 15.1% with strong increases from last year's heavily impacted Q2 across Octagon's sports and entertainment and Jack Morton's experiential offerings.
Looking at client sectors, the picture is also one of comprehensive acceleration.
Each of our eight major sectors had double-digit increases from a year ago.
The auto, retail and other sectors were up more than 20%, consumer goods, tech and telecom and healthcare increased in the mid to high teens, food and beverage and financial services were up in the low double-digit range.
Turning to operating expense and profitability.
Our teams once again demonstrated outstanding discipline.
And while remaining focused on appropriate cost control, we're also continuing to invest to support accelerating growth.
We continue to see the benefits of cost improvements from strategic restructuring actions taken last year, notably in our payroll expense and our expense for occupancy.
We also continue to see the benefits of low variable expenses as a result of the highly restrictive global travel environment and from the cost efficiencies of a largely remote workforce.
As we look ahead to post-pandemic work life, it's worth noting that we can, of course, expect that expenses for travel, meetings, office utilities and alike will begin to return in the second half of this year, most notably in Q4 and of course into next year.
Our second quarter net income was $263.3 million as reported.
Adjusted EBITDA was $405.8 million and adjusted EBITDA margin on net revenue was 17.9%.
Our results reflect significant operating leverage compared to both last year and the 2019 period on our expense for base payroll and our office and other expenses.
We delevered on our expense accrual for our performance based incentive compensation plans, but our operating performance is tracking well ahead of planned target.
Diluted earnings per share was $0.66 as reported and was $0.70 as adjusted for the after tax expense of the amortization of acquired intangibles.
As we look to the balance of the year, you'll recall that in April, we shared a full year 2021 performance outlook based on the assumption that there will continue to be a reasonably steady course of public health and global economic recovery.
At that time, we outlined our view toward full year organic growth of 5% to 6% and adjusted EBITDA margin of approximately 15.5%.
In light of our very strong second quarter and also having recently refreshed our bottom-up outlook for the second half of the year based on conversations with our clients and operating teams, we believe it's appropriate at the mid-point of this quite unusual year, unprecedented, in fact, to upgrade those expectations.
Of course, we do sadly need to recognize that the COVID pandemic and the related risks to the macro environment are not yet behind us.
In particular, as we look ahead, we all understand that lagging vaccination rates in many parts of the world and the emergence of new variants may entail a higher COVID risk.
That's something we'll watch closely as we enter the second half of the year, especially our seasonally important fourth quarter.
With predicated on the continued progress and public health issues, we believe that we can deliver organic growth for the full year of 9% to 10%.
And with that level of growth, we would expect to achieve 2021 adjusted EBITDA margin of approximately 16%.
As such, we see this as another year of strong value creation for all of our stakeholders.
We'll of course keep you apprised of progress as the year develops and we look forward to those conversations.
On that note, I'd like to hand over the call to Ellen now for more in-depth view of our results.
I hope that everyone is safe and healthy.
Adjusted EBITDA, before a small restructuring adjustment, was $405.8 million, and margin was 17.9%.
These are levels that compare very favorably against any previous second quarter.
With growth having accelerated, certain variable expenses continue to lag and we are additionally seeing the structural benefits of last year's restructuring program.
Diluted earnings per share were $0.66 as reported and $0.70 as adjusted before the after-tax impact of the amortization of acquired intangibles.
Turning to slide three, you'll see our P&L for the quarter.
I'll cover revenue and operating expenses in detail in the slides that follow.
Turning to second quarter revenue on slide four.
Our net revenue in the quarter was $2.27 billion, an increase of $416.2 million from a year ago.
Compared to Q2 2020, the impact of the change in exchange rates was positive 3.1% with the US dollar weaker against currencies in most of our largest markets.
Net divestitures were negative 40 basis points.
Our organic net revenue increase was 19.8%, which brings us to 10.6% organic growth for the six months.
At the bottom of this slide, we breakup segment revenue in the quarter.
Our IAN segment grew 20.5% organically.
We had notably strong growth across our offerings in media, data and tech, McCann, FCBs with healthcare, a significant driver, MullenLowe, Huge and R/GA.
At IPG DXTRA, organic growth was 15.1%, which reflects some recovery of the events and sports marketing offerings within the segment, the disciplines that have been most significantly impacted by the pandemic.
Our public relations offerings also had solid growth in the quarter.
Moving on to slide five, which is a look at our organic revenue change by region.
In the US, which was 63% of net revenue in the quarter, organic growth was 17.4%.
Revenue decreased a year ago in the same period by 8%.
Year-on-year performance was very strong across media, data and tech, FCB driven by healthcare, IPG DXTRA, McCann, MullenLowe and Huge.
International markets were 37% of our net revenue in the quarter and increased 24.4% organically.
You'll recall that the same market decreased 13.1% a year ago in the second quarter which ranged by region between negative 10% and negative 15%.
Continental Europe grew 27.9% with notably strong growth in Germany, Spain and France.
There were a number of operating highlights in the region led by media, data and tech, McCann, R/GA and DXTRA.
The UK increased 18.7% organically, led by McCann, DXTRA, media, data and tech and R/GA.
Asia-Pac grew 14% organically.
Our organic growth was paced by Australia, the Philippines, Singapore, Thailand and India, while China and Japan decreased.
Our organic growth in LatAm was 49% with exceptional results across the region, including Brazil, Mexico and Argentina.
Our other markets group grew 29.2% with notably strong performance in the Middle East and Canada.
Moving on to slide six, and operating expenses in the quarter.
Our operating expenses excluding billable expenses, the amortization of acquired intangibles and restructuring charges increased only 11% from a year ago and to 22.5% growth of net revenue.
The result was second quarter margin expansion to 17.9% from 9.4% a year ago.
We continue to see efficiencies in a number of different expense categories as we had in this year's first quarter and these were both structural and variable.
In the structural category, we are seeing the benefit of the strategic restructuring actions, which we initiated in the second quarter of last year and continued to execute over the second half.
As a reminder, these actions involve the elimination of certain positions, and resulting headcount reduction that will not return with revenue growth.
We also reduced our real estate footprint by 15% last year.
We are currently seeing the benefit of most of these actions and at a full run rate they will generate $160 million in annual cost savings.
We've also had over the course of the pandemic a sharp decrease in certain variable operating expenses.
I would call out specifically lower travel and related expenses, which was the case in the second quarter of 2020 and that's continued through Q2 2021.
As you can see on this slide, a ratio of total salaries and related expense, as a percentage of net revenue was 65.4%, which has significantly improved from the second quarter of 2020 when revenue had decreased sharply.
Underneath that, we drove very strong leverage on our expense for base payroll, benefits and tax, which was 53% of net revenue in the quarter.
That reflects the benefit of last year's restructuring and the fact that the pace of new hiring lags our significant revenue growth, as was in the case in past business cycles.
Our severance expense ratio also decreased sharply to only 40 basis points of net revenue, compared to 3% in Q2 2020, which was at an elevated level due to the impact of the recession.
Going the other way, our expense for performance-based incentive compensation increased to 6.4%, consistent with our very strong operating results.
Expense for temporary labor also increased, as a percentage of net revenue to 4.5%, as a result of servicing the top line's quick acceleration.
At quarter-end, total worldwide headcount was approximately 53,000, a 1.4% increase from a year ago and up 5.2% from the beginning of this year, with hiring to support our growth.
Also on this slide, our office and other direct expense decreased as a percentage of net revenue by 380 basis points to 13.3%.
Our occupancy expense decreased to 5% of net revenue, mainly due to the restructuring of our real estate, as well as leverage on our revenue growth.
We leveraged all other office and other direct expense by 220 basis points, which reflects lower expense for bad debt and acquisition costs and leverage as a result of our revenue growth.
Our SG&A expense was 1.3% of net revenue, with the increase from a year ago due to the higher unallocated performance-based incentive expense and increased employee insurance expense, which was at a very low level a year ago.
On slide seven, we present detail on adjustments to our reported second quarter results, in order to provide greater clarity and a picture of comparable performance.
This begins on the left-hand side with the reported results and steps through to adjusted EBITDA and our adjusted diluted EPS.
Our expense for the amortization of acquired intangibles in the second column was $21.6 million.
The restructuring refinement in the quarter is a benefit of $200,000.
To be clear, this is a small adjustment to estimate of the 2020 restructuring program.
Below operating expenses in column four, we had a pre-tax loss in the quarter of $1.7 million in other expenses due to the disposition of small non-strategic businesses.
At the foot of the slide, you can see the after-tax impact per diluted share of these adjustments was $0.04 per share, which bridges our diluted earnings per share as reported at $0.66 to adjusted earnings of $0.70 per diluted share.
On slide eight, we turn to cash flow in the quarter.
Cash from operations was $468.2 million, compared with the use of $87.1 million a year ago.
We generated $101.6 million from working capital compared to a use of $264.9 million last year.
Investing activities was $43.3 million in the quarter, mainly for capex of $34 million.
Financing activities used $101.8 million, mainly for our dividend.
Our net increase in cash for the quarter was $325.6 million.
Slide nine is the current portion of our balance sheet.
We ended the quarter with $2.34 billion of cash and equivalents.
Under current liabilities, the current portion of long-term debt refers to our $500 million, 3.75% senior note which matures in October of this year.
We plan to repay these notes from cash on hand.
Slide 10 depicts the maturities of our outstanding debt.
Again, we have the maturity in October of this year, and then only $250 million due in April 2024.
Thereafter, our next maturity is not until 2028.
In summary, on slide 11, our teams continue to execute at a high level in an unprecedented environment.
I would like to reiterate our pride in and gratitude for the efforts of our people.
The strength of our balance sheet and liquidity means that we remain well positioned, both financially and commercially.
While we remain very pleased with our results, it's worth reiterating as Ellen just said that this is an unusual, in fact, unprecedented environment in which we're operating.
Now importantly, it bears noting that when compared to our non-pandemic results in 2019, Q2 results show our company is performing at a very high level.
We continue to feel this is the result of strategic decisions that we've taken over a number of years to position our company for the future, investments and actions that have created a sustainable advantage for our organization.
Today's IPG delivers addressable and accountable digital marketing programs, combined with our world-class creative storytelling capabilities, these solutions make us higher value partners to our clients.
One of our many priorities over the years has been the creation and implementation of open architecture solutions, where we bring the best of IPG together in collaborative teams that are customized to client-specific business needs and increasingly a key element of this approach, Open Architecture 2.0, as it were, is Acxiom whose data management expertise and data assets play a role in an increasingly broad range of our offerings.
In addition, Kinesso powers many of our applications and services that provide clients with a deep understanding of audiences in order to provide insights and then form creative work, segments for media delivery and line of sight to the effectiveness of the work that we're doing together.
We saw this model come to life in the quarter with a Cigna count win, which combined talent from McCann Worldgroup Initiative and R/GA powered by Kinesso and Acxiom.
This is a continuation of several years of strong performance in integrated pitches, especially those that include creative and media, as well as media and data.
Another another key decision that's contributed to our success has been our continued investment in strong agency brands, which helps us attract and retain top talent and deliver breakthrough creative ideas across a range of marketing disciplines.
As a result of this strategy, IPG companies across our portfolio earned a number of important accolades during the quarter.
Most notably, we had an impressive showing at the 2021 Cannes International Festival of Creativity.
IPG agencies took home eight Grand Prix, the festival's highest honor.
Wins across the network represented a broad range of clients, categories, agencies, disciplines and geographies.
FCB's performance was a standout, as the agency took home four Grand Prix and was named Global Network of the Year.
The agency's creative community and its leadership deserved credit for this terrific accomplishment.
FCB Health was also named Healthcare Network of the Year and AREA 23 and FCB Health Agency was named Healthcare Agency of the Year.
McCann client, Microsoft was named Marketer of the Year at the festival, which is another major honor.
And the agency also won a Grand Prix in brand experience and activation for its remarkable true name work for Mastercard, which empowers transgender and non-binary cardholders to use their true name when using their credit card.
In PR, McCann Paris earned a Grand Prix, partnering with Weber Shandwick for a campaign that ran across the Middle East, which teaches women in a culturally sensitive way to perform self-checks for early breast cancer detection.
FCB Chicago and Weber Shandwick teamed to earn a Grand Prix for work for AB InBev.
And R/GA continues to be recognized for its ability to humanize technology, winning a Grand Prix in social and influencer marketing for disruptive work it did for Reddit on the Super Bowl.
On Ad Age's annual A-List and Creativity Awards, both Deutsch LA and The Martin Agency were named to the prestigious A-list.
Initiative was named Media Agency of the Year and FCB Health's CEO was recognized as our industry's Executive of the Year.
At the holding company level, we made a number of announcements that position us for further success.
Chief among them was our launch of IPG Health earlier this month.
The move will align our top performing companies, FCB Health and McCann Health under a new global network, IPG Health, led by a dynamic and proven CEO and a skilled executive leadership team.
In this new operating structure, the distinct agency brands within FCB Health and McCann Health will remain active and continue to go to market independently.
They will also benefit from access to additional specialty services, knowledge sharing, proactive career management, shared investment in new capabilities and skill-sets, highly complimentary geographic coverage, as well as an even higher level of collaboration.
Around the world, healthcare and well-being are areas of growing importance for our clients and society at large.
As an industry sector, healthcare represents an increasingly vital part of the economy, and one where innovation is becoming an ever more important driver of success.
So the alignment of IPG's fully dedicated healthcare networks under the banner of IPG Health strengthens our leadership position in this dynamic sector.
The scale, reach and most importantly, quality of our people and our work makes for an exciting combination.
And it's why we think this new offering will continue to deliver great things in the years to come.
This month, we also added to our strong roster of marketing technology and e-commerce providers with a launch of Performance Art, a data-led creative CRM agency, whose leadership team is known for delivering platform level creative ideas that are at home in a client's e-retail flow as they are in a 30-second spot.
Turning to performance at our agencies, growth at IAN in the quarter was once again highlighted by media, data and tech and FCB led by healthcare.
UM saw significant wins in the quarter with Enterprise Holdings, Behr Paint and most recently, NYC & Company, New York City's official marketing and tourism organization.
UM also saw an important account retention for the Australian government.
At the Campaign Agency of the Year Awards, UM earned Global Media Agency of the Year honors and UM APAC was named Best Media Network in that region.
At Initiative, the agency was named 2020's Most Competitive Network Globally in Media Pitches and saw a major win in the UK with banking and insurance company, NatWest Group.
We also continue to see terrific momentum at Reprise, especially as it relates to their growing e-commerce capabilities.
Acxiom, Kinesso, and Matterkind are also performing well and they're key to how we help clients thrive in the addressable media market, which requires flexibility, given the quickly shifting landscape.
At Acxiom, we continue to invest behind innovative new products and services, such as customer data platforms, and identity resolution, with which we are seeing increased client adoption.
Another important development saw Acxiom deploy their latest customer intelligence platform on the cloud with a key financial services client.
At our creative integrated networks, FCB, McCann and MullenLowe Group were named the ACT Responsible 2020 Good Report, a unique ranking of the world's best use of creative communications to promote sustainability and social responsibility.
On top of its exceptional showing at Cannes, at FCB Global, the network continues to invest in talent and new offerings, hiring a head of data science and connections to expand its expertise in commerce, data and technology fueled creativity.
McCann also continues to prove a creative powerhouse.
As we saw, the network was recently named Webby Network of the Year and McCann New York was named Webby Agency of the Year.
MRM continues to leverage its Martek expertise and is seeing strong growth with its MRM commerce division, which help marketers drive engagement, interaction and conversion on commerce platforms.
At MullenLowe Group, Mediahub continues its strong new business momentum and during the quarter, added Hallmark's parent company, Crown Media, as well as Tally Financial.
MullenLowe is also a global leader in purpose driven work.
And we saw that as it continued to partner with governments in a number of countries around the world to inform people the benefits of being vaccinated against COVID-19.
At R/GA, campaign named the London office as the UK's Digital Agency of the Year.
And R/GA London added two new clients, financial services company, Allianz, and Vollebak Clothing.
We named the new CEO at Huge who joined the digital agency after a very successful tenure at Initiative, where he helped turn the agency into a leader in the media space.
During the quarter, Huge also saw strong new business activity, adding Sub-Zero Appliances, Wakefern, Tezos Foundation and Nikko Asset Management.
The Martin Agency continues to impact culture and drive strong business results for its clients.
Notably, the agency sold the city's short film for DoorDash at the Tribeca Film Festival last month and had captured the resilience of New York City's restaurants and the role they play in the city's life.
At IPG DXTRA, we also saw recognition as the number of companies were called out for their ability to deliver creative solutions.
Weber Shandwick was the most awarded PR agency at Cannes this year.
Current Global demonstrated their commitment to closing the disability and inclusion gap by creating guidelines and toolkits for marketers so as to make content more accessible for consumers with sight, hearing, or other cognitive impairments.
And this program was recognized as one of Fast Company's World-Changing Ideas for 2021.
Jack Morton launched what they are referring to as the return-to-live dashboard and that's a tool for brand marketers to access where, when, and how businesses in the US can safely get back to hosting live experiences.
Golin continued its strong performance in new business, was selected as LinkedIn's Global Social Media Agency of Record and also Agency of Record for Yamaha Music.
Golin was also named PRWeek's Global Agency of the Year.
Pivoting now back to the holding company, another key area that bears mention is our long-term focus on ESG, including diversity, equity and inclusion.
In all of our operations and activities, we're working to build on and more fully live into this commitment.
And this includes reassessing how we hire, train and promote a diverse workforce, incorporate rigorous practices around data ethics and media responsibility as well as reduce our greenhouse gas emissions further around the world.
Key accomplishments on this front include IPG being recently named by Forbes to their top ten list of America's Best Employers for Diversity.
During the quarter, we also created a new position, our industry's first culture officer, to focus on long-term thought leadership relating to a broad range of social justice issues for underserved and underrepresented communities.
During the quarter, as part of our integrated ESG efforts, we also announced an action plan that consists of three climate roles, committing to set a science-based target; sourcing 100% renewable electricity by 2030, and joining the Climate Pledge, co-founded by Amazon and Global Optimism.
In addition, we've published our first SASB report, becoming the first company in the advertising and marketing sector to publish an alignment with SASB's industry standards.
Our agencies also contribute significantly to our ESG profile.
And importantly, here in the US, we saw media brands take a leading role in the industry conversation about promoting greater media equity.
And they announced that they're committing to invest at least 5% of client budgets in black-owned media by 2023.
Octagon launched an accelerator program with historically black colleges and universities for students interested in sports and entertainment as a career.
And R/GA created an innovative program to raise money for environmental organizations through a dedicated YouTube channel that plays nature videos, which have become hugely popular during the pandemic, and it directs all of the ad revenues generated on this channel to environmental NGOs.
Like many of us, I look forward to working live with colleagues and clients, especially given that we're an ideas-driven service business.
Our culture, our capacity for innovation and the ways in which we combine creativity with technology and data are all enhanced by in-person interactions.
Now here in the US, we expect to have more people returning to our offices in a flexible hybrid model, beginning in mid-September as is already the case in certain other parts of the world.
We will, of course, be mindful of the public health situation and of the learnings we've accumulated during the past 16 months when it comes to flexible work practices.
The expected costs associated with live collaboration with colleagues as well as travel will begin to return as a normal part of how we work and therefore be reflected in our operating results.
For example, as we look forward to the remainder of the year, we expect an increase in travel costs in the fourth quarter, which could return to levels consistent with what we saw in the fourth quarter of 2019.
As we said earlier, these are unprecedented times.
None of us had previously been required to adapt the constraints of living and working through a pandemic.
And likewise, none of us has experience in emerging for one.
Earlier on the call, we shared our perspective on the balance of the year, based on the assumption that there will continue to be a reasonably steady course of macro recovery that people continue to become vaccinated to protect themselves and their communities and that we're able to adequately mitigate the impact of dangerous new variants.
We've delivered a very strong first half of the year on top of the most challenging comps in our industry.
Further, despite continued macro uncertainty, we have greater clarity to the balance of 2021.
We therefore believe that current performance, combined with the continued execution of our long-term strategy, are significant drivers for the sustained enhancement of value for all of our stakeholders.
As always, we're committed to sound financial fundamentals, including debt reduction as well as continuing to grow our dividend.
We also remain focused on getting back to our share repurchase program and we will keep you apprised of our progress as the year develops.
 Assistant:

Chosen response:
compname announces q2 adj earnings per share of $0.70.
q2 adjusted earnings per share $0.70.
q2 net revenue was $2.27 billion, an increase of 22.5% from a year ago, with organic growth of 19.8%.
interpublic group of companies - upgrades expectation for fy 2021 performance to organic growth of 9%-10% and adjusted ebita margin of about 16.0%.


Prompt:
Human: The third quarter marked a nice sequential improvement in our financial performance with results coming in above the high end of our expectations.
You will recall that based on early signs of recovery at the end of the second quarter, we raised our guidance for the year.
Based on stronger-than-expected performance in the third quarter, we are again raising our full-year guidance ranges for revenue, adjusted EBITDA and adjusted diluted EPS.
We are expecting a continuation of this recovery trends in the fourth quarter.
This, of course, sets us up well for next year.
As we promised back in April at the onset of the pandemic, we will talk to you today about our outlook for 2021.
Based on what we currently see, we think the most significant COVID impacts to our business are behind us and our outlook for 2021 indicates strong performance next year and a return to our growth trajectory.
Ron will discuss 2020 and 2021 guidance in more detail later.
Before we review the quarter, a quick operational update.
We continue to experience a gradual improvement in the accessibility of clinical research sites in the R&D Solutions business even with the localized flare-ups we've seen around the world.
We are seeing a return to onsite monitoring visits and similar to last quarter onsite visits exceeded the number of remote visits.
In instances where sites remain physically inaccessible for clinical monitoring, remote monitoring and virtual solutions are proving to be effective workarounds.
The pace of start-up activity picked up significantly during the third quarter and we are pretty much back to baseline levels for site initiation visits.
Of course, patient recruitment trends have started to follow as well.
Moving to Technology & Analytics.
As expected, TAS has remained resilient throughout this crisis in almost every area.
We've had very little interruption in data supplier demand.
Our information services continue to be mission critical to our clients and are therefore very insulated from the impacts of the pandemic.
The analytics and consulting businesses have performed remarkably well despite business development being hampered by the lack of in-person interactions.
One area we discussed before that has experienced significant disruption is the event management business, which relies almost entirely on face-to-face interaction.
And, of course, as you know, that business is essentially on pause for now.
Demand for our technology offerings remains strong.
We've added 45 OCE clients this year, bringing our total number of clients to 125.
During the quarter, we successfully rolled out OCE Optimizer, a real-time map-based territory and sales rep alignment solution.
This tool will save management team significant amounts of time previously spent planning and assessing sales data to ensure resources are effectively focused on the appropriate client base and product.
Finally, our CSMS business.
Demand for field reps continues to be soft, which of course impacts revenue.
But as we said before, while business development has also slowed due to the lack of in-person interactions, so far the business has performed modestly better than we would have expected as existing clients have largely retained field reps and have been continuing their engagements with us.
Now against that backdrop, let's now review our third quarter results.
Revenue for the third quarter came in at $2,786 million, which was $11 million above the high end of our guidance range.
This revenue beat came from strong organic operational performance.
Third quarter adjusted EBITDA was $604 million with a $22 million beat versus the high end of our guidance range.
The EBITDA beat was due to better operational performance and productivity.
Third quarter adjusted diluted earnings per share was $1.63 reflecting the EBITDA drop-through because the below the line items essentially netted out to zero.
Third quarter R&DS contracted backlog, including pass-throughs, grew 18.5% year-over-year to $21.7 billion as of September 30th, 2020.
We had broad based booking strength, but full-service clinical and lab were particularly strong.
The contracted net book-to-bill ratio, including pass-throughs, was 1.71 for the third quarter of 2020 and 1.42 excluding pass-throughs.
The LTM contracted book-to-bill ratio at September 30 was 1.55, including pass-throughs and 1.45, excluding pass-throughs.
Let's turn first to revenue.
Third quarter revenue of $2,786 million grew 0.6% reported and was flat at constant currency.
Revenue for the first nine months of the year was $8,061 million which was down 1.6% reported and 1.2% at constant currency.
Technology & Analytics Solutions revenue of $1,207 million grew 10.2% reported and 9.2% at constant currency.
Year-to-date Tech & Analytics Solutions revenue was $3,433 million, up 4.9% reported and 5.6% at constant currency.
In R&D Solutions third quarter revenue of $1,400 million was down 4.5% at actual FX rate and 5.1% at constant currency.
Excluding the impact of pass-throughs, R&D Solutions third quarter revenue grew 2.6%.
Year-to-date revenue of $4,076 million was down 5.6% at actual FX rate and 5.4% at constant currency.
Contract Sales & Medical Solutions revenue of $179 million was down 13.9% year-over-year reported and 14.4% on a constant currency basis in the third quarter.
Year-to-date revenue was $552 million, down 8.6% at actual FX rates and 8.3% at constant currency.
Now moving down to P&L, adjusted EBITDA was $604 million for the third quarter, which represented growth of 1.9%.
Year-to-date adjusted EBITDA was $1,649 million.
Third quarter GAAP net income was $101 million and GAAP diluted earnings per share was $0.52.
Year-to-date GAAP net income was $160 million and GAAP diluted earnings per share was $0.82.
Adjusted net income was $318 million for the quarter and $841 million year-to-date.
Our adjusted diluted earnings per share grew 1.9% in the third quarter to $1.63.
Year-to-date adjusted diluted earnings per share was $4.32.
Now turning to the R&D Solutions backlog.
As Ari mentioned, R&DS new business activity remains quite strong.
Consequent on the robust booking activity that Ari talked about, our backlog grew 18.5% year-over-year to close at $21.7 billion and we expect $5.8 billion of this backlog to convert to revenue over the next 12 months, which is an increase of over $400 million versus where we were at June 30th.
And I would add that the outlook remains quite positive as RFPs are growing low double digits in both volume and dollars.
Moving to the balance sheet now.
At September 30th, cash and cash equivalents totaled $1.5 billion and debt was $12.3 billion, resulting in net debt of $10.9 billion.
Due to our strong EBITDA and cash flow in the quarter, our net leverage ratio at September 30th was 4.7 times trailing 12-month adjusted EBITDA, which was down a tad [Phonetic] from where we were at June 30th.
Cash flow was a bright spot as it was last quarter.
Cash flow from operations was $574 million in the third quarter, up 74% over last year.
Capital expenditures were $157 million and that resulted in free cash flow of $417 million.
M&A spending, as you saw, was negligible in the quarter.
For the first nine months of the year, free cash flow was $769 million, which is about double the same period last year.
As you know when the COVID-19 outbreak became the pandemic in March, we temporarily suspended our share repurchase program.
We did not repurchase any shares in the second or third quarters, but the business is recovering well from COVID-19 disruptions.
Underlying demand is robust and cash flow is as well and we have a very solid liquidity position closing the quarter with an undrawn revolver of almost -- undrawn revolver and almost $1.5 billion of cash in the balance sheet.
And as a result of all this, we lifted our suspension on share repurchase program and we're expecting to opportunistically resume share repurchase activity.
And as a reminder, we currently have about $1 billion of share repurchase authorization remaining under the program.
Now let's turn to guidance.
Given the continuing momentum in the business, we're raising our full year guidance range for revenue, adjusted EBITDA, adjusted diluted EPS.
Our guidance for the fourth quarter and full year of 2020 assumes that business conditions will continue to improve during the fourth quarter.
And specifically, we assume that localized flare-ups of COVID-19 will not have a material impact on fourth quarter results.
We now expect 2020 revenue for the full year to be between $11,100 million and $11,250 million, which is an increase of $125 million over our prior guidance at the midpoint of the range.
For profit we now expect full-year adjusted EBITDA to be between $2,335 million and $2,360 million, which represents a $27 million increase over our prior guidance at the midpoint of the range.
And adjusted diluted EPS, we are expecting to be between $6.25 and $6.35, which is an increase of $0.10 over our prior guidance at the midpoint of the range.
This full-year guidance implies fourth quarter revenue of $3,040 million to $3,190 million, representing growth of 5% to 10.2%.
Now this is a wider range than we would normally guide to at this point in the year due to the uncertain timing of pass-through revenues associated with the COVID trials that we're working on.
From a segment perspective, we expect Technology & Analytics Solutions revenue would be in the high-single digits at the midpoint of our guidance range, R&D Solutions revenue growth to reach double digits, with the caveat that this growth rate could move up or down based on the timing of pass-through revenue and CSMS revenue growth to be similar to what we saw in the third quarter.
For fourth quarter profit, we expect adjusted EBITDA to be between $685 million and $710 million, representing growth of 6.7% to 10.6% and adjusted diluted earnings per share to be between $1.93 and $2.03, or growth of 10.9% to 16.7%.
This guidance assumes that foreign exchange rates at September 30th, 2020 remain in effect for the rest of the year.
As we indicated at the start of the pandemic, we've decided to advance our planning process versus prior years.
And as a result, we're now in a position to provide our 2021 outlook and this is much earlier than we would have done in the ordinary course.
For the full year 2021, we expect revenue in the range of $12,300 million to $12,600 million.
This represents growth of 10.1% to 12.8% versus the midpoint of our 2020 guide.
We expect adjusted EBITDA to be in the range of $2,725 million to $2,800 million, representing growth of 16.1% to 19.3% compared to the midpoint of our 2020 guidance.
And finally, we expect adjusted earnings per share to be in the range of $7.65 to $7.95, which would represent growth of 21.4% to 26.2% compared to the midpoint of our 2020 guidance.
A little bit more detail for you.
The adjusted diluted earnings per share guidance assumes interest expense of approximately $420 million, operational depreciation and amortization of about $400 million and other below the line expense items such as minority interest of approximately $50 million and also the continuation of our share repurchase activity.
The effective tax rate we are assuming will remain largely in line with 2020.
Our 2021 guidance is predicated on the assumption that business conditions will continue to improve to the fourth -- in fourth quarter and that majority of our business will return to normal during 2021.
Our outlook for 2021 also incorporates our view that there will be some tail of COVID work, the growth in R&DS will come primarily from our base business.
So in summary, we're pleased with our team's ability to navigate the challenges that COVID has presented throughout the year and we're proud to be a critical contributor to the solution to this public health crisis.
Our R&DS business has adapted well returning to growth in services revenue and achieving another record quarter of bookings.
Our Technology & Analytics Solutions business improved sequentially and has returned to pre-COVID growth rates despite the headwinds of the event management business.
Our solid year-to-date overall Company performance has enabled us to raise our guidance for the full year for revenue, adjusted EBITDA and adjusted diluted EPS.
And now this performance combined with our strong free cash flow and liquidity position has enabled us to lift the suspension of our share repurchase program.
And finally, we are expecting a continued recovery in the fourth quarter and a very strong 2021.
So with that let me hand it back over to the operator for Q&A.
 Assistant:

Chosen response:
q3 adjusted earnings per share $1.63.
q3 gaap earnings per share $0.52.
sees fy 2020 revenue $11,100 million - $11,250 million.
sees fy 2020 adjusted earnings per share $6.25 - $6.35.
lifting temporary suspension of its share repurchase program.
for full year of 2021, expects revenue of between $12,300 million and $12,600 million.
for fy 2021, sees adjusted earnings per share of between $7.65 and $7.95.


Prompt:
Human: It was great to see many of you in person at our Analyst and Investor Conference in November.
And as you will recall, we shared our expectations that we would meet or exceed our three-year Vision '22 targets.
We also laid out our plans to make 2022 yet another inflection point in our growth trajectory and further accelerate the company's growth rate in the next three phase -- three-year phase of our journey to 2025.
The team highlighted the power of connected intelligence, which brings together IQVIA differentiated capabilities and drive our leadership position in the clinical and commercial markets.
This underpins our new 20 by '25 strategy, which alludes to our plans to achieve at least $20 billion of revenue by 2025.
We're excited about this next phase of growth for IQVIA, and we are busy refining our strategies and action plans, and you will hear more about it as the year progresses.
Two years -- two weeks ago, IQVIA was named to Fortune's list of the World's Most Admired Companies for the fifth consecutive year.
Importantly, we earned a first-place ranking within the healthcare, pharmacy, and other services category for the first time.
1 in the categories of innovation, capital deployment, global competitiveness, quality of product and services, and long-term investment value.
Turning now to our results.
We ended 2021 on a high note despite COVID-19's continued impact on many parts of the world.
We delivered robust top and bottom-line growth in the quarter, which, as you know, was against a much tougher year-over-year comparison than earlier in the year.
These results reinforce our confidence that we will achieve our 2022 guidance.
And of course, it sets us up well to meet our ambitious 20 by '25 targets.
Let's review the fourth quarter.
Revenue for the fourth quarter grew 10.2% on a reported basis and 11.6% at constant currency.
The $62 million beat above the midpoint of our guidance range was driven by stronger operational performance across all three segments, as well as higher pass-throughs partially offset by FX headwinds.
Compared to prior year and excluding COVID-related work, our core businesses, meaning R&DS and TAS, grew mid-teens at constant currency on an organic basis.
Ron will provide a lot more detail in his remarks, including additional COVID-adjusted numbers for each segment.
Fourth-quarter adjusted EBITDA grew 12.7%, reflecting our revenue growth, as well as ongoing productivity initiatives.
The $27 million beat above the midpoint of our guidance range was entirely due to our operational performance.
Fourth-quarter adjusted diluted earnings per share of $2.55 grew 20.9%.
That was $0.13 above the midpoint of our guidance, with the majority of the beat coming from the adjusted EBITDA drop-through.
Let me now provide an update on the business.
On the commercial side of the business, it was a strong year for new molecules and launches as the industry continued its recovery from the COVID-19 pandemic disruption.
This year, 50 new molecules were approved by the FDA and 72 new commercial launches took place.
IQVIA supported nearly 80% of launches by top 20 pharma and approximately 60% of all launches.
This highlights our scale globally and across all customer segments in applying advanced technology and analytics capabilities to enhance launch planning, engagement, and measurement.
Overall, we've seen significant momentum and continued demand for our technology solutions.
There are now over 3,000 clients who have adopted one or more of our technology platforms, including human data science cloud, orchestrated analytics, E360, Omnichannel Navigator, Engage, and of course, Orchestrated Customer Engagement, or OCE.
In fact, the footprint of our OCE platform itself has continued to grow, with over 350 clients having adopted one or more modules on the platform since launch.
Early in 2021, we launched IQVIA Next Best Action, which is an AI-driven omni-channel customer engagement decision engine.
Two top 20 pharma clients have successfully rolled out this intelligence engine to orchestrate customer engagements in over 30 countries and across more than 40 brands each.
Two other top 20 pharmas are currently in the implementation phase.
Another highlight in our TAS business has been the success of DMD Marketing Solutions, a leading provider of data and digital marketing solutions that help brands deliver personalized digital content to healthcare professionals.
In the quarter, we entered into an enterprise agreement with a top 10 pharma clients to utilize DMD's advanced analytic capabilities to power omnichannel engagement across all eight of their brand franchises.
To date, 18 of the top 20 have adopted at least one of DMD solutions.
We're very excited for the future growth of this business within IQVIA.
Real-world evidence and other highlights of the year, IQVIA continues to play a leading role in the use of second rig data to answer key questions for life science customers.
In the fourth quarter, we won two large post-authorization safety studies in an autoimmune area with a top 10 pharma.
These studies use existing healthcare data to observe patients over a period of 10 years to better understand long-term effects of the treatment.
We were also recently awarded a disease registry project for an upcoming novel gene therapy.
Here, we will recruit a broad population of patients with a specific disease to understand how they are currently managing clinical practice.
This information is vital to our life science sponsors to inform the design of subsequent clinical trials, so they can target patient groups with the highest unmet need.
Moving to clinical technology.
We saw increased adoption of our Orchestrated Clinical Trials, OCT platform, which supports trial planning, site management, patient engagement, trial management, and clinical data analytics.
During the year, we added 90 new OCT clients, bringing the total to over 350 clients who have adopted one or more modules within our clinical technology suite since launch, including all of the top 10 and 18 of the top one.
Within OCT's digital patient suite this year, we secured three preferred provider partnerships with top 30 pharmaceutical clients to provide our interactive response technology, IRT capabilities, to support site operations across their entire clinical trial portfolios.
This technology facilitates patient randomization to ensure protocol adherence and streamline site supply chain management to reduce drug wastage and to drive significant cost reductions.
Our solution was awarded top-ranking by industry leaders in a recent ISR report for randomization and chart supply management capabilities.
We also saw increased demand for our industry-leading decentralized clinical trial offering.
Approximately one-third of our active full-service clinical trials incorporate one or more of our DCT technology or services capabilities, and we expect this to continue to grow as the need for these capabilities in complex studies becomes more evident.
For example, we are currently executing a full-service trial for treatment of multiple system atrophy, a severe degenerative neurological disorder affecting the body's involuntary functions.
We are deploying our full suite of capabilities, including eCOA, eConsent, and home research nurses on this study to significantly reduce the travel burden on these patients who have significant mobility challenges.
Finally, our overall R&DS business continues to build on its strong momentum with over $2.4 billion of net new business, including pass-throughs, and it set a record for quarterly service bookings, achieving over $1.9 billion of service bookings for the first time ever.
This resulted in a fourth-quarter contracted net book-to-bill ratio of 1.36 excluding pass-throughs and 1.24, including pass-throughs.
For the calendar year, we delivered over $10 billion of total net new bookings for the first time ever, an increase of 14.6% compared to 2020.
This led to an LTM contracted net book-to-bill ratio of 1.35 excluding pass-throughs and 1.34 including pass-throughs.
Our contracted backlog in R&DS, including pass-throughs, grew 10.2% year over year to a record $24.8 billion as of December 31, 2021.
Let's start by reviewing revenue.
Fourth-quarter revenue of $3.636 billion grew 10.2% on a reported basis and 11.6% at constant currency.
You'll recall that last year's fourth quarter was a much tougher comparison than earlier quarters as we picked up incremental demand from mega vaccine studies in R&DS and government-related COVID work within TAS.
Also, the core business began to rebound from the effects of COVID-19.
In this year's fourth quarter, COVID-related revenues were approximately $325 million, down about 25% versus the fourth quarter of 2020.
In our base business, that is excluding all COVID-related work from both 2021 and 2020, organic growth at constant currency was mid-teens.
Technology and Analytics Solutions revenue for the fourth quarter was $1.496 billion, up 5% reported and 6.6% at constant currency.
Year over year, TAS experienced just over 400 basis points of headwind due to a step-down in COVID-related work.
Excluding all COVID-related work, organic growth at constant currency in TAS was high single digits.
R&D Solutions fourth-quarter revenue of $1.944 billion was up 15.4% at actual FX rates and 16.3% at constant currency.
Excluding all COVID-related work, organic growth at constant currency and R&DS was approximately 25%.
Contract Sales and Medical Solutions, or CSMS, fourth-quarter revenue of $196 million grew 3.7% reported and 7.4% at constant currency.
Excluding all COVID-related work, organic growth at constant currency in CSMS was low single digits.
For the full year, revenue was $13.874 billion, growing at 22.1% reported and 21.1% at constant currency.
The incremental COVID-related revenues in 2021 versus 2020 accounted for approximately half of our growth in 2021.
Full-year Technology and Analytics Solutions revenue was $5.534 billion, up 13.9% reported and 12.4% at constant currency.
Excluding COVID-related work, organic growth at constant currency in TAS was high single digits.
Full-year revenue in R&D Solutions was $7.556 billion, growing at 31.2% reported and 30.4% at constant currency.
Excluding COVID-related work, R&DS organic growth at constant currency for both total revenue and services revenue was low double digits.
Full-year CSMS revenue was $784 million representing 5.8% growth on a reported basis and 5.7% at constant currency.
And excluding COVID-related work, organic growth at constant currency in CSMS was low single digits.
Now moving down to P&L.
Adjusted EBITDA was $828 million for the fourth quarter, which was 12.7% growth on a reported basis.
Full-year adjusted EBITDA was $3.022 billion, up 26.8% year over year on a reported basis.
Fourth-quarter GAAP net income was $318 million, and GAAP diluted earnings per share was $1.63.
Full-year GAAP net income was $966 million or $4.95 of earnings per diluted share.
Adjusted net income was $496 million for the fourth quarter, up 20.7% year over year.
And adjusted diluted earnings per share grew 20.9% to $2.55.
For the full year, adjusted net income was $1.760 billion or $9.03 per share, up 41%.
Now as already reviewed, R&D Solutions delivered another outstanding quarter of net new business.
R&DS backlog now stands at a record $24.8 billion, an increase of 10.2% year over year.
Full year 2021 net new bookings, including pass-throughs, rose over $10 billion for the first time.
That's 14.6% growth compared to 2020.
Let's move to the balance sheet now.
Cash flow was again quite strong in the quarter.
Cash flow from operations was $692 million, and capex was $184 million, which resulted in free cash flow of $508 million.
This brought our free cash flow for the full year to a record $2.3 billion, up 70% versus the prior year.
At December 31, cash and cash equivalents totaled $1.366 billion and gross debt was $12.125 billion, resulting in net debt of $10.759 billion.
Our net leverage ratio at December 31 was 3.56 times trailing 12-month adjusted EBITDA.
Now it's worth highlighting that our improved free cash flow over the last two years allowed us to deploy approximately $4.5 billion of capital to internal investments, acquisitions, and share repurchase, while at the same time, we were able to reduce our net leverage ratio from a high of 4.8x in Q2 2020, which you'll recall was the height of the pandemic to nearly 3.5 times.
And in doing this, we achieved our Vision '22 net leverage ratio target of 3.5 times to four times a full year early.
In the quarter, we repurchased $174 million of our shares, which resulted in full-year share repurchase of $395 million, and we ended the year with 195 million fully diluted shares outstanding and $523 million of share repurchase authorization remaining under our existing program.
Now last week, our board of directors approved a $2 billion increase to our share repurchase authorization, which increases our remaining authorization to just over $2.5 billion.
Now let's turn to the guidance.
As you saw, we're reaffirming the full year 2022 revenue guidance that we issued at our analyst and investor conference in November.
And in maintaining this guidance, we actually absorbed a $70 million revenue headwind from FX since we initially guided in November.
Now additionally, we're raising our full year 2022 profit guidance versus what we provided you in November.
So, to summarize the overall guidance for the full year, we expect revenue to be between $14.700 billion and $15 billion, which represents year-over-year growth of 7.1% to 9.2% at constant currency and 6% to 8.1% on a reported basis compared to 2021.
Now we now expect adjusted EBITDA to be between $3.330 billion and $3.405 billion representing year-over-year growth of 10.2% to 12.7%.
And we also now expect adjusted diluted earnings per share to be between $9.95 and $10.25, which represents year-over-year growth of 10.2% to 13.5%.
Now our full year 2022 guidance assumes at December 31, 2021, foreign currency exchange rates remain, in fact, for the balance of the year.
Now compared to the prior year, I should mention FX is now a headwind of 110 basis points to our full-year revenue growth, and our projected revenue growth includes a little bit over 100 basis points of contribution from M&A activity.
Now with our analyst and investor conference in November, we told you to anticipate that our COVID-related revenue will step down by approximately $1 billion in 2022 but will more than compensate for that headwind with strong growth in our base business.
And let me give you some additional detail around this that I think will be helpful.
Excluding COVID-related revenue, the FX headwind, and the contribution of acquisitions, our total company revenue guidance implies organic growth at constant currency in the low to mid-teens.
At the segment level, we anticipate full-year Technology and Analytics Solutions revenue growth of between 5% and 7%.
Excluding COVID-related work, we expect organic revenue growth at constant currency in TAS to be in the high single digits.
Research and Development Solutions revenue growth is expected to be between 8% and 10%.
Excluding COVID-related work, we expect organic revenue growth at constant currency in R&DS to be in the upper teens.
And finally, Contract Sales and Medical Solutions revenue was anticipated to be down about 2%.
But excluding COVID-related work, we expect organic revenue growth at constant currency in CSMS to be in the low single digits.
Let's move to the first quarter now.
As you all know, the first quarter of last year marked a continued rebound in our base business after the 2020 pandemic-related decline.
In addition, Q1 and Q2 of last year represented our peak COVID-related revenues.
As a result of this, the first half of the year will have the most challenging year-over-year compares.
For the first quarter, our revenue is expected to be between $3.515 billion and $3.575 billion, representing growth of 4.8% to 6.6% on a constant-currency basis and 3.1% to 4.9% on a reported basis.
Now excluding COVID-related work, we expect organic revenue growth at constant currency to be in the mid-teens.
Adjusted EBITDA is expected to be between $800 million and $815 million, up 7.5% to 9.5%.
And finally, adjusted diluted earnings per share is expected to be between $2.40 and $2.46, growing 10.1% to 12.8%.
So, to summarize, we delivered very strong fourth-quarter results on both the top and bottom line against what was also a very strong fourth quarter of 2020.
R&DS recorded its largest-ever quarter of service bookings and for the first time, had over $10 billion of total net new bookings in a year.
Our contracted backlog improved to a record of nearly $25 billion, up over 10% year over year.
We delivered another strong quarter of free cash flow, bringing the full year to a record $2.3 billion.
We closed 2021 with net leverage of 3.6 times trailing 12-month adjusted EBITDA.
Our board approved a $2 billion increase to our share repurchase authorization.
And finally, we're reaffirming the full year of 2022 guidance that we provided in November for revenue, and we're raising our adjusted EBITDA and adjusted diluted earnings per share guidance.
 Assistant:

Chosen response:
q4 adjusted earnings per share $2.55.
q4 gaap earnings per share $1.63.
sees q1 revenue $3.515 billion to $3.575 billion.
sees q1 revenue up 4.8 to 6.6 percent.
q4 revenue rose 10.2 percent to $3.636 billion.
full-year 2022 guidance reaffirmed for revenue including a $70 million revenue headwind from foreign exchange.
full-year 2022 guidance raised for adjusted ebitda and adjusted diluted eps.
sees fy 2022 adjusted earnings per share $9.95 to $10.25.
sees q1 2022 adjusted earnings per share $2.40 to $2.46.