Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $2 billion, representing a year-on-year decrease of 4.3% or 3.2% on a constant currency basis [22] - Adjusted gross margin for the quarter was 28.2%, down from 29.9% in Q1 2024 [22] - Adjusted EBITDA was $390.7 million, or 19.5% of revenue, compared to $444 million or 21.2% in the same period last year [23] - Adjusted net income for the quarter was $258.3 million, a margin of 12.9%, equating to adjusted earnings per share of $3.19, down 8.1% year-over-year [24] - U.S. GAAP net income was $154.2 million, or $1.90 per diluted share, a decrease of 15.6% from the prior year [25] - Cash from operating activities was $268.2 million, with free cash flow of $239.3 million [26] Business Line Data and Key Metrics Changes - In biotech, there was a significant increase in overall opportunities, but this was offset by an increase in canceled RFPs [11] - In large pharma, RFP opportunities were muted, but the success rate remained high, indicating strong partnership positioning [12] - Book-to-bill ratio decreased to 1.01x due to elevated cancellations [12] Market Data and Key Metrics Changes - Customer concentration remained stable, with the top five customers representing 24.9% of revenue [22] - Cancellations were elevated across customer segments, reflecting broader market dynamics [30] Company Strategy and Development Direction - The company is focused on navigating a period of uncertainty while capitalizing on opportunities to improve its market position [10] - There is an emphasis on operational utilization and cost control to manage the business effectively [14] - The company plans to continue share repurchases and evaluate strategic M&A opportunities [19] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism, noting mixed demand from large pharma and ongoing challenges in the biotech sector [9] - Elevated cancellations are expected to continue, impacting revenue guidance for the year [36] - The company remains focused on enhancing customer delivery and leveraging technology to improve operational efficiencies [18] Other Important Information - The company repurchased $250 million in shares during Q1 2025, with plans to remain active in share buybacks [26] - Two new AI-enabled tools were released to enhance clinical trial processes [18] Q&A Session Summary Question: About elevated cancellations - Management indicated that cancellations were generally elevated across customer segments, with no unusual patterns in specific groups [30][31] Question: On the overall backdrop and cancellations - Management expects elevated cancellations to continue, with a significant cancellation from a BARDA study anticipated in Q2 [36][39] Question: Regarding revenue and pricing pressures - Management noted that while there is increased competition in biotech, win rates in large pharma remain healthy [47] Question: On clinical development opportunities in China - Management highlighted the growing R&D capabilities in China and the company's strong position to participate in clinical trials there [80] Question: About the impact of COVID-related cancellations - Management clarified that the $350 million in anticipated revenue from COVID studies has been adjusted in the revenue guidance for 2025 [101][102]

Financial Performance - In Q1 2025, the Company reported revenue of RMB 2,671 million, a decrease of 16.0% compared to RMB 3,099 million in Q1 2024 [10] - Net profit for Q1 2025 was RMB 231 million, down 32.5% from RMB 306 million in Q1 2024 [10] - Non-IFRS net profit slightly decreased by 3.1% to RMB 339 million from RMB 349 million in Q1 2024 [10] - Net operating cash flow was RMB 746 million, a decline of 14.4% from RMB 853 million in Q1 2024 [10] Revenue Composition - Revenue from China entities accounted for 88%, while overseas subsidiaries contributed 12% [12] - Laboratory services generated 60% of total revenue, followed by small molecule CDMO services at 22%, and clinical development services at 14% [12] - Revenue from the top 20 pharmaceutical customers grew by 29.1%, while revenue from other customers increased by 14.0% [12] Growth Rates - New purchase orders (POs) achieved over 10% year-on-year growth in Q1 2025 [10] - Revenue from China entities grew by 15.7%, while overseas subsidiaries saw an 18.3% increase [12] - North America revenue increased by 16.8%, and EU revenue grew by 26.6% [12] Cost and Margin Analysis - Gross margin for laboratory services improved to 45.5% in Q1 2025 from 44.1% in Q1 2024, reflecting a 1.4 percentage point increase [14] - Gross margin for small molecule CDMO services rose to 30.4%, up 2.5 percentage points from 27.9% in Q1 2024 [15] - Clinical development services in China achieved a gross margin of 11.8%, an increase of 2.5 percentage points from 9.3% in Q1 2024 [16] Future Outlook - The Company maintains a revenue growth guidance of 10-15% for 2025 [27] - Despite macroeconomic uncertainties, the Company believes in sustained industry development driven by healthcare demands and technological innovations [27]