Ari Bousbib
Chairman and Chief Executive Officer at IQVIA
Thank you, Nick, and good morning, everyone. Thank you for joining us today to discuss our third quarter results. IQVIA delivered another quarter of strong financial results despite market concerns about slowing demand, broader macroeconomic challenges and the various global geopolitical issues. In fact, indicators of demand both from customers and in the market generally remain healthy. Industry critical trial starts continue to trend ahead of last year, rising almost 7% year-to-date. The pipeline of active early-stage and late-stage molecules are both up 8% from 2019 pre-pandemic levels.
EBP funding, which has been a lingering concern since the beginning of the year when one of our smaller competitors raised alarms. EBP funding improved, in fact, in the quarter. According to BioWorld, third quarter funding was $18.7 billion, the highest of any quarter this year. Year-to-date, funding is running at about a $60 billion annual rate, which exceeds the average of the last 5 years pre-COVID. Our own RFP flow grew mid-teens in Q3 and RFP flow in both the large pharma and EBP segments are up double digits on a year-to-date basis.
Our Q3 book-to-bill was 1.39, excluding pass-throughs and 1.27, including pass-throughs, continuing our strong results from the first half of the year. And as a result, as you saw, our backlog grew 5.4% versus prior year on a reported basis and 9.4% excluding the impact from foreign exchange. As you can tell, we are not experiencing any signs of slowdown in demand. It also helps that we are extremely diversified. Remember, we serve over 10,000 customers in more than 100 countries, including all top 25 large pharma clients across the spectrum of therapeutic areas. Now while demand remains very healthy, as you know and as we have been saying throughout the year, we have been dealing with operational challenges caused by the global macro environment, including wage inflation, high levels of attrition, obviously, the ongoing Russia-Ukraine disruptions, reoccurring China lockdowns that are still going on and perhaps that's a newer development, some staff shortages at certain investigator sites.
As you know, we have been able to overcome all these issues as reflected in our results for the first 9 months of the year. Although as we end the year, we are anticipating some minor delays in the timing of deliveries caused by these macro disruptions and specifically by the bottlenecks that are created by staff shortages at certain sites that are delaying the execution of our deliveries. This is why we decided to tweak the guidance a little in the final stretch to the end of the year.
A note on our capital allocation strategy as a result of persistent high levels of inflation, interest rates have been increasing sharply. In response, we are adjusting our capital allocation strategy to include some debt pay down in addition to continuing the M&A and share repurchase opportunistically as in the past.
In summary, the underlying demand in the industry and in our businesses remain strong, and we are managing through the headwinds caused by the factors I just discussed.
Now let's review the third quarter in more detail. Revenue for the third quarter grew 5% on a reported basis and 10.5% at constant currency. The $22 million beat above the midpoint of our guidance range was driven by operational upsides in both TAS and R&DS services, offset by continued foreign exchange headwinds.
Compared to last year and excluding COVID-related work from both periods, our base businesses grew 14% at constant currency on an organic basis. Notably, on the same basis, the R&DS business was up 18% and TAS was up 12%.
Third quarter adjusted EBITDA increased 11.8%, reflecting our strong revenue growth and ongoing cost management discipline offsetting the headwinds of wage inflation that are persisting in our business. Third quarter adjusted diluted EPS of $2.48 grew 14.3% driven by our adjusted EBITDA growth.
I did provide some color on the business, starting with the commercial and technology side. The exponential increase in industry data access and complexity has created tremendous new opportunities for insight and evidence generation. But making this data usable requires robust information management capabilities and as you know at IQVIA, we've been building these capabilities for decades.
In the call, the Top 10 pharma clients selected IQVIA's human data science cloud to power large-scale data and analytics programs by centralizing and harmonizing data for 35 large countries across their primary care and specialty medicine portfolio. We continue to advance digital marketing in health care. We're deploying a privacy-first, open ecosystem that delivers health care information in a timely and personalized manner to meet the fast-changing needs of the health care consumer.
In the quarter, IQVIA acquired Lasso Marketing, which developed an operating system that's purpose-built for health care marketers to coordinate and execute omnichannel digital campaigns from a single platform. In addition, DMD Marketing Solutions, which you will recall, we acquired about a year ago, was recently selected by a top 10 pharma client to bring to market 13 oncology and biological brands using digital insights to deliver personalized brand content to HCPs that are relevant to their practices and interests.
Demand for our commercial technology solutions remains strong. This quarter, the top 20 pharma clients selected IQVIA's commercial technology ecosystem suite to transform its commercial operations into an AI-enabled commercial model. The customer will deploy IQVIA's orchestrated customer engagement suite, IQVIA's master data management and orchestrated analytics in more than 30 countries, driving a 20% efficiency gain in customer coverage and boosting the speed and precision of their older management process.
In the real-world business, IQVIA continues to lead in innovative study design that combine multiple IQVIA capabilities. For example, in the quarter, we were awarded a multiyear portfolio of real-world studies in psychiatry from a midsized pharma company. We are combining faster data-driven recruitment time lines with a comprehensive home health infrastructure to reduce the burden on both the patients and the site. In another example, we were awarded a significant contract with a major medtech company to identify early markers for organ transplant rejection through a non-interventional study that combines our medtech, real-world and translational sciences capabilities.
Moving to RDS. Our decentralized clinical trial, DCT program, has received independent compliance validation from EU General Data Protection Regulation, GDPR, from TRUSTArc, which is the leader in GDPR validation. This is a big deal. This program is highly recognized in the industry as it requires two separate independent audits. It's a key achievement for IQVIA as it is the first time any DCT offering has received this European data privacy validation.
In addition, we've now expanded our DCT capabilities by launching the first self-collection safety lab panel for U.S. clinical trial participants in collaboration with Tasso Inc., a leader in clinical grade blood collection solutions. Participants in clinical trials can now provide a blood specimen for lab testing in the comfort of their own home without the need to visit an investigator site or have a health care professional visit them, expanding our DCT offerings and capabilities.
And, of course, as you've seen, the overall R&DS business continues its strong momentum with services bookings in the quarter exceeding $2 billion for the first time ever. This translated into a quarterly book-to-bill ratio of 1.39 excluding pass-throughs. And including pass-throughs, the business delivered over $2.5 billion of total net new business in the quarter with a book-to-bill ratio of 1.27. Over the last 12 months, our contracted book-to-bill ratio was 1.35, excluding pass-throughs, and 1.29, including pass-throughs.
I will now turn it over to Ron for more details on our financial performance.