- Revenue of $3,736 million grew 4.9 percent
year-over-year
- GAAP Net Income of $303 million grew 7.1 percent
year-over-year
- Adjusted EBITDA of $888 million grew 9.1 percent
year-over-year
- GAAP Diluted Earnings per Share of $1.63 grew 9.4 percent
year-over-year
- Adjusted Diluted Earnings per Share of $2.49 grew 0.4
percent year-over-year
- R&D Solutions quarterly bookings of $2.6 billion,
representing a book-to-bill ratio of 1.24x
- R&D Solutions contracted backlog of $28.8 billion grew
12 percent year-over-year
IQVIA Holdings Inc. (“IQVIA”) (NYSE:IQV), a leading global
provider of advanced analytics, technology solutions, and clinical
research services to the life sciences industry, today reported
financial results for the quarter ended September 30, 2023.
Third-Quarter 2023 Operating Results
Revenue for the third quarter of $3,736 million increased 4.9
percent on a reported basis and 4.1 percent at constant currency,
compared to the third quarter of 2022. Technology & Analytics
Solutions (TAS) revenue of $1,431 million grew 2.2 percent on a
reported basis and 0.9 percent at constant currency. Research &
Development Solutions (R&DS) revenue of $2,122 million grew 7.2
percent on a reported basis and 6.4 percent at constant currency.
Excluding the impact of pass throughs, R&DS revenue grew 9.2
percent on a reported basis. Contract Sales & Medical Solutions
(CSMS) revenue of $183 million was flat on a reported basis and
grew 4.9 percent at constant currency.
As of September 30, 2023, R&DS contracted backlog, including
reimbursed expenses, was $28.8 billion, growing 11.7 percent
year-over-year and 10.5 percent at constant currency. The company
expects approximately $7.4 billion of this backlog to convert to
revenue in the next twelve months. The third-quarter book-to-bill
ratio was 1.24x. For the twelve months ended September 30, 2023,
the book-to-bill ratio was 1.33x.
“I'm proud of the team's execution in the quarter," said Ari
Bousbib, chairman and CEO of IQVIA. "We achieved strong profit
margin expansion and cash flow conversion. The R&DS segment
posted another strong quarter and continues to show good momentum,
as reflected in our book-to-bill ratio and double-digit
year-over-year growth in backlog and RFP flow. TAS segment revenue
increased in the quarter despite persistent client caution, and
spending levels that remain below our expectations. Beyond the
current challenging environment, we are confident in the strong
underlying fundamentals for the segment.”
Third-quarter GAAP Net Income was $303 million and GAAP Diluted
Earnings per Share was $1.63. Adjusted Net Income was $462 million
and Adjusted Diluted Earnings per Share was $2.49. Adjusted EBITDA
was $888 million, up 9.1 percent year-over-year.
Year-to-Date 2023 Operating Results
Revenue for the first nine months of 2023 was $11,116 million,
up 4.2 percent on a reported basis and 4.8 percent at constant
currency compared to the first nine months of 2022. TAS revenue was
$4,331 million, representing growth of 2.0 percent on a reported
basis and 2.4 percent at constant currency. R&DS revenue was
$6,244 million, up 6.5 percent on a reported basis and 6.8 percent
at constant currency. CSMS revenue was $541 million, down 3.6
percent on a reported basis and up 1.2 percent at constant
currency.
GAAP Net Income was $889 million and GAAP Diluted Earnings per
Share was $4.76. Adjusted Net Income was $1,378 million and
Adjusted Diluted Earnings per Share was $7.37. Adjusted EBITDA was
$2,603 million.
Financial Position
As of September 30, 2023, cash and cash equivalents were $1,224
million and debt was $13,631 million, resulting in net debt of
$12,407 million. IQVIA’s Net Leverage Ratio was 3.52x trailing
twelve-month Adjusted EBITDA. For the third quarter, Operating Cash
Flow was $583 million and Free Cash Flow was $437 million.
Share Repurchase
During the third quarter, the company repurchased $144 million
of its common stock, bringing year-to-date share repurchase
activity to $763 million. IQVIA had $2,592 million of share
repurchase authorization remaining as of September 30, 2023.
Full-Year 2023 Guidance
The company has updated its full-year guidance to reflect slower
growth in our TAS segment and the impact of the strengthening US
dollar. The updated revenue guidance range of $14,885 million to
$14,920 million represents growth of 3.3 to 3.5 percent on a
reported basis and 3.7 to 3.9 percent at constant currency.
Excluding approximately $600 million of COVID-related revenue step
down versus 2022, the guidance represents growth at constant
currency of approximately 9 percent, including about 140 basis
points of contribution from acquisitions.
Reflecting the adjustment to revenue guidance, the company is
also updating its Adjusted EBITDA guidance range to $3,560 million
to $3,570 million, representing growth of 6.4 to 6.7 percent, and
its Adjusted Diluted Earnings per Share guidance range to $10.16 to
$10.23, flat to up 0.7 percent on a reported basis. This Adjusted
Diluted Earnings per Share guidance includes the year-over-year
impact of the step-up in interest rates and the increase in the UK
corporate tax rate. Excluding these items, Adjusted Diluted
Earnings per Share is expected to grow 11 to 12 percent.
Fourth-Quarter 2023 Guidance
For the fourth quarter of 2023, the company expects revenue to
be between $3,769 million and $3,804 million, representing growth
of 0.8 to 1.7 percent on a reported basis and 0.7 to 1.6 percent at
constant currency. The company expects Adjusted EBITDA to be
between $957 million and $967 million, representing growth of 4.0
to 5.1 percent and Adjusted Diluted Earnings per Share to be
between $2.79 and $2.86, representing growth of 0.4 to 2.9 percent
on a reported basis. Excluding the step-up in interest rates and
the increase in the UK corporate tax rate, Adjusted Diluted
Earnings per Share is expected to grow 10 to 13 percent.
All financial guidance assumes foreign currency exchange rates
as of October 30, 2023 remain in effect for the forecast
period.
Webcast & Conference Call Details
IQVIA will host a conference call at 9:00 a.m. Eastern Time
today to discuss its third-quarter 2023 results and its
fourth-quarter and full-year 2023 guidance. To listen to the event
and view the presentation slides via webcast, join from the IQVIA
Investor Relations website at http://ir.iqvia.com. To participate
in the conference call, interested parties must register in advance
by clicking on this link. Following registration, participants will
receive a confirmation email containing details on how to join the
conference call, including the dial-in and a unique passcode and
registrant ID. At the time of the live event, registered
participants connect to the call using the information provided in
the confirmation email and will be placed directly into the
call.
About IQVIA
IQVIA (NYSE:IQV) is a leading global provider of advanced
analytics, technology solutions, and clinical research services to
the life sciences industry. IQVIA creates intelligent connections
across all aspects of healthcare through its analytics,
transformative technology, big data resources and extensive domain
expertise. IQVIA Connected Intelligence™ delivers powerful insights
with speed and agility — enabling customers to accelerate the
clinical development and commercialization of innovative medical
treatments that improve healthcare outcomes for patients. With
approximately 87,000 employees, IQVIA conducts operations in more
than 100 countries.
IQVIA is a global leader in protecting individual patient
privacy. The company uses a wide variety of privacy-enhancing
technologies and safeguards to protect individual privacy while
generating and analyzing information on a scale that helps
healthcare stakeholders identify disease patterns and correlate
with the precise treatment path and therapy needed for better
outcomes. IQVIA’s insights and execution capabilities help biotech,
medical device and pharmaceutical companies, medical researchers,
government agencies, payers and other healthcare stakeholders tap
into a deeper understanding of diseases, human behavior and
scientific advances, in an effort to advance their path toward
cures. To learn more, visit www.iqvia.com.
Cautionary Statements Regarding Forward-Looking
Statements
This press release contains “forward-looking statements” within
the meaning of the federal securities laws, including Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, including, without
limitation, our fourth-quarter and full-year 2023 guidance. In this
context, forward-looking statements often address expected future
business and financial performance and financial condition, and
often contain words such as “expect,” “assume,” “anticipate,”
“intend,” “plan,” “forecast,” “believe,” “seek,” “see,” “will,”
“would,” “target,” similar expressions, and variations or negatives
of these words that are intended to identify forward-looking
statements, although not all forward-looking statements contain
these identifying words. Actual results may differ materially from
our expectations due to a number of factors, including, but not
limited to, the following: business disruptions caused by natural
disasters, pandemics such as the COVID-19 (coronavirus) outbreak,
including any variants, and the public health policy responses to
the outbreak, and international conflicts or other disruptions
outside of our control such as the current situation in Ukraine and
Russia; most of our contracts may be terminated on short notice,
and we may lose or experience delays with large client contracts or
be unable to enter into new contracts; the market for our services
may not grow as we expect; we may be unable to successfully develop
and market new services or enter new markets; imposition of
restrictions on our use of data by data suppliers or their refusal
to license data to us; any failure by us to comply with
contractual, regulatory or ethical requirements under our
contracts, including current or future changes to data protection
and privacy laws; breaches or misuse of our or our outsourcing
partners’ security or communications systems; failure to meet our
productivity or business transformation objectives; failure to
successfully invest in growth opportunities; our ability to protect
our intellectual property rights and our susceptibility to claims
by others that we are infringing on their intellectual property
rights; the expiration or inability to acquire third party licenses
for technology or intellectual property; any failure by us to
accurately and timely price and formulate cost estimates for
contracts, or to document change orders; hardware and software
failures, delays in the operation of our computer and
communications systems or the failure to implement system
enhancements; the rate at which our backlog converts to revenue;
our ability to acquire, develop and implement technology necessary
for our business; consolidation in the industries in which our
clients operate; risks related to client or therapeutic
concentration; government regulators or our customers may limit the
number or scope of indications for medicines and treatments or
withdraw products from the market, and government regulators may
impose new regulatory requirements or may adopt new regulations
affecting the biopharmaceutical industry; the risks associated with
operating on a global basis, including currency or exchange rate
fluctuations and legal compliance, including anti-corruption laws;
risks related to changes in accounting standards; general economic
conditions in the markets in which we operate, including financial
market conditions, inflation, and risks related to sales to
government entities; the impact of changes in tax laws and
regulations; and our ability to successfully integrate, and achieve
expected benefits from, our acquired businesses. For a further
discussion of the risks relating to our business, see the “Risk
Factors” in our annual report on Form 10-K for the fiscal year
ended December 31, 2022, filed with the Securities and Exchange
Commission (the "SEC"), as such factors may be amended or updated
from time to time in our subsequent periodic and other filings with
the SEC, which are accessible on the SEC’s website at www.sec.gov.
These factors should not be construed as exhaustive and should be
read in conjunction with the other cautionary statements that are
included in this release and in our filings with the SEC. We assume
no obligation to update any such forward-looking statement after
the date of this release, whether as a result of new information,
future developments or otherwise.
Note on Non-GAAP Financial Measures
This release includes information based on financial measures
that are not recognized under generally accepted accounting
principles in the United States ("GAAP"), such as Adjusted EBITDA,
Adjusted Net Income, Adjusted Diluted Earnings per Share, Gross
Leverage Ratio, Net Leverage Ratio and Free Cash Flow. Non-GAAP
financial measures are presented only as a supplement to the
company’s financial statements based on GAAP. Non-GAAP financial
information is provided to enhance understanding of the company’s
financial performance, but none of these non-GAAP financial
measures are recognized terms under GAAP, and non-GAAP measures
should not be considered in isolation from, or as a substitute
analysis for, the company’s results of operations as determined in
accordance with GAAP. The company uses non-GAAP measures in its
operational and financial decision making, and believes that it is
useful to exclude certain items in order to focus on what it
regards to be a more meaningful indicator of the underlying
operating performance of the business. For example, the company
excludes all the amortization of intangible assets associated with
acquired customer relationships and backlog, databases, non-compete
agreements, trademarks and trade names from non-GAAP expense and
income measures as such amounts can be significantly impacted by
the timing and size of acquisitions. Although we exclude
amortization of acquired intangible assets from our non-GAAP
expenses, we believe that it is important for investors to
understand that revenue generated from such intangibles is included
within revenue in determining net income attributable to IQVIA
Holdings Inc. As a result, internal management reports feature
non-GAAP measures which are also used to prepare strategic plans
and annual budgets and review management compensation. The company
also believes that investors may find non-GAAP financial measures
useful for the same reasons, although investors are cautioned that
non-GAAP financial measures are not a substitute for GAAP
disclosures.
The non-GAAP financial measures are not presented in accordance
with GAAP. Please refer to the schedules attached to this release
for reconciliations of non-GAAP financial measures contained herein
to the most directly comparable GAAP measures. Our fourth-quarter
and full-year 2023 guidance measures (other than revenue) are
provided on a non-GAAP basis without a reconciliation to the most
directly comparable GAAP measure because the company is unable to
predict with a reasonable degree of certainty certain items
contained in the GAAP measures without unreasonable efforts. For
the same reasons, the company is unable to address the probable
significance of the unavailable information. Such items include,
but are not limited to, acquisition related expenses, restructuring
and related expenses, stock-based compensation and other items not
reflective of the company's ongoing operations.
Non-GAAP measures are frequently used by securities analysts,
investors and other interested parties in their evaluation of
companies comparable to the company, many of which present non-GAAP
measures when reporting their results. Non-GAAP measures have
limitations as an analytical tool. They are not presentations made
in accordance with GAAP, are not measures of financial condition or
liquidity and should not be considered as an alternative to profit
or loss for the period determined in accordance with GAAP or
operating cash flows determined in accordance with GAAP. Non-GAAP
measures are not necessarily comparable to similarly titled
measures used by other companies. As a result, you should not
consider such performance measures in isolation from, or as a
substitute analysis for, the company’s results of operations as
determined in accordance with GAAP.
IQVIAFIN
Table 1
IQVIA HOLDINGS INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
(preliminary and unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
(in millions, except per share
data)
2023
2022
2023
2022
Revenues
$
3,736
$
3,562
$
11,116
$
10,671
Cost of revenues, exclusive of
depreciation and amortization
2,426
2,321
7,267
6,975
Selling, general and administrative
expenses
502
517
1,497
1,488
Depreciation and amortization
297
248
809
773
Restructuring costs
30
4
67
15
Income from operations
481
472
1,476
1,420
Interest income
(14
)
(4
)
(24
)
(7
)
Interest expense
181
108
491
288
Other (income) expense, net
(35
)
8
(77
)
51
Income before income taxes and equity in
earnings (losses) of unconsolidated affiliates
349
360
1,086
1,088
Income tax expense
51
70
203
212
Income before equity in earnings (losses)
of unconsolidated affiliates
298
290
883
876
Equity in earnings (losses) of
unconsolidated affiliates
5
(7
)
6
(12
)
Net income
$
303
$
283
$
889
$
864
Earnings per share attributable to common
stockholders:
Basic
$
1.66
$
1.52
$
4.82
$
4.59
Diluted
$
1.63
$
1.49
$
4.76
$
4.52
Weighted average common shares
outstanding:
Basic
182.9
186.5
184.4
188.3
Diluted
185.5
189.4
186.9
191.3
Table 2
IQVIA HOLDINGS INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(preliminary and unaudited)
(in millions, except per share
data)
September 30, 2023
December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents
$
1,224
$
1,216
Trade accounts receivable and unbilled
services, net
3,227
2,917
Prepaid expenses
177
151
Income taxes receivable
49
43
Investments in debt, equity and other
securities
108
93
Other current assets and receivables
423
561
Total current assets
5,208
4,981
Property and equipment, net
498
532
Operating lease right-of-use assets
292
331
Investments in debt, equity and other
securities
99
68
Investments in unconsolidated
affiliates
115
94
Goodwill
14,288
13,921
Other identifiable intangibles, net
4,907
4,820
Deferred income taxes
111
118
Deposits and other assets, net
459
472
Total assets
$
25,977
$
25,337
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable and accrued expenses
$
3,133
$
3,316
Unearned income
1,838
1,797
Income taxes payable
172
161
Current portion of long-term debt
1,309
152
Other current liabilities
137
152
Total current liabilities
6,589
5,578
Long-term debt, less current portion
12,322
12,595
Deferred income taxes
365
464
Operating lease liabilities
217
264
Other liabilities
679
671
Total liabilities
20,172
19,572
Commitments and contingencies
Stockholders’ equity:
Common stock and additional paid-in
capital, 400.0 shares authorized as of September 30, 2023 and
December 31, 2022, $0.01 par value, 257.1 shares issued and 182.5
shares outstanding as of September 30, 2023; 256.4 shares issued
and 185.7 shares outstanding as of December 31, 2022
10,994
10,898
Retained earnings
4,223
3,334
Treasury stock, at cost, 74.6 and 70.7
shares as of September 30, 2023 and December 31, 2022,
respectively
(8,509
)
(7,740
)
Accumulated other comprehensive loss
(903
)
(727
)
Total stockholders’ equity
5,805
5,765
Total liabilities and stockholders’
equity
$
25,977
$
25,337
Table 3
IQVIA HOLDINGS INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(preliminary and unaudited)
Nine Months Ended September
30,
(in millions)
2023
2022
Operating activities:
Net income
$
889
$
864
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation and amortization
809
773
Amortization of debt issuance costs and
discount
13
11
Stock-based compensation
172
136
(Earnings) losses from unconsolidated
affiliates
(6
)
12
(Gain) loss on investments, net
(5
)
35
Benefit from deferred income taxes
(117
)
(52
)
Changes in operating assets and
liabilities:
Change in accounts receivable, unbilled
services and unearned income
(241
)
(88
)
Change in other operating assets and
liabilities
(112
)
9
Net cash provided by operating
activities
1,402
1,700
Investing activities:
Acquisition of property, equipment and
software
(470
)
(503
)
Acquisition of businesses, net of cash
acquired
(869
)
(1,012
)
Purchases of marketable securities,
net
(4
)
(4
)
Investments in unconsolidated affiliates,
net of payments received
(16
)
(14
)
Investments in debt and equity
securities
(36
)
—
Other
4
4
Net cash used in investing activities
(1,391
)
(1,529
)
Financing activities:
Proceeds from issuance of debt
1,250
1,250
Payment of debt issuance costs
(19
)
(5
)
Repayment of debt and principal payments
on finance leases
(118
)
(86
)
Proceeds from revolving credit
facility
2,009
1,500
Repayment of revolving credit facility
(2,184
)
(1,600
)
Payments related to employee stock option
plans
(58
)
(70
)
Repurchase of common stock
(763
)
(1,103
)
Contingent consideration and deferred
purchase price payments
(79
)
(22
)
Net cash provided by (used in) financing
activities
38
(136
)
Effect of foreign currency exchange rate
changes on cash
(41
)
(127
)
Increase (decrease) in cash and cash
equivalents
8
(92
)
Cash and cash equivalents at beginning of
period
1,216
1,366
Cash and cash equivalents at end of
period
$
1,224
$
1,274
Table 4
IQVIA HOLDINGS INC. AND
SUBSIDIARIES
NET INCOME TO ADJUSTED EBITDA
RECONCILIATION
(preliminary and unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
(in millions)
2023
2022
2023
2022
Net Income
$
303
$
283
$
889
$
864
Provision for income taxes
51
70
203
212
Depreciation and amortization
297
248
809
773
Interest expense, net
167
104
467
281
(Income) loss in unconsolidated
affiliates
(5
)
7
(6
)
12
Deferred revenue purchase accounting
adjustments
—
—
—
1
Stock-based compensation
47
61
172
136
Other (income) expense, net (1)
(40
)
13
(92
)
51
Restructuring and related expenses (2)
42
16
102
47
Acquisition related expenses
26
12
59
49
Adjusted EBITDA
$
888
$
814
$
2,603
$
2,426
(1)
Reflects certain non-operating income
items, revaluations of contingent consideration and certain
non-recurring expenses.
(2)
Reflects restructuring costs as well as
accelerated expenses related to lease exits.
Table 5
IQVIA HOLDINGS INC. AND
SUBSIDIARIES
NET INCOME TO ADJUSTED NET
INCOME RECONCILIATION
(preliminary and unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
(in millions, except per share
data)
2023
2022
2023
2022
Net Income
$
303
$
283
$
889
$
864
Provision for income taxes
51
70
203
212
Purchase accounting amortization (1)
156
128
411
414
(Income) loss in unconsolidated
affiliates
(5
)
7
(6
)
12
Deferred revenue purchase accounting
adjustments
—
—
—
1
Stock-based compensation
47
61
172
136
Other (income) expense, net (2)
(40
)
13
(92
)
51
Restructuring and related expenses (3)
42
16
102
47
Acquisition related expenses
26
12
59
49
Adjusted Pre Tax Income
$
580
$
590
$
1,738
$
1,786
Adjusted tax expense
(118
)
(120
)
(360
)
(373
)
Adjusted Net Income
$
462
$
470
$
1,378
$
1,413
Adjusted earnings per share
attributable to common stockholders:
Basic
$
2.53
$
2.52
$
7.47
$
7.50
Diluted
$
2.49
$
2.48
$
7.37
$
7.39
Weighted average common shares
outstanding:
Basic
182.9
186.5
184.4
188.3
Diluted
185.5
189.4
186.9
191.3
(1)
Reflects all the amortization of acquired
intangible assets.
(2)
Reflects certain non-operating income
items, revaluations of contingent consideration and certain
non-recurring expenses.
(3)
Reflects restructuring costs as well as
accelerated expenses related to lease exits.
Table 6
IQVIA HOLDINGS INC. AND
SUBSIDIARIES
NET CASH PROVIDED BY OPERATING
ACTIVITIES TO FREE CASH FLOW RECONCILIATION
(preliminary and unaudited)
(in millions)
Three Months Ended
September 30, 2023
Nine Months Ended
September 30, 2023
Net Cash provided by Operating
Activities
$
583
$
1,402
Acquisition of property, equipment and
software
(146
)
(470
)
Free Cash Flow
$
437
$
932
Table 7
IQVIA HOLDINGS INC. AND
SUBSIDIARIES
CALCULATION OF GROSS AND NET
LEVERAGE RATIOS
AS OF SEPTEMBER 30,
2023
(preliminary and unaudited)
(in millions)
Gross Debt, net of Unamortized Discount
and Debt Issuance Costs, as of September 30, 2023
$
13,631
Net Debt as of September 30, 2023
$
12,407
Adjusted EBITDA for the twelve months
ended September 30, 2023
$
3,523
Gross Leverage Ratio (Gross Debt/LTM
Adjusted EBITDA)
3.87x
Net Leverage Ratio (Net Debt/LTM Adjusted
EBITDA)
3.52x
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231101684018/en/
Nick Childs, IQVIA Investor Relations
(nicholas.childs@iqvia.com) +1.973.316.3828
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