IQVIA Holdings Inc (IQV) Q3 2024 Earnings Call Highlights: Strong EPS Growth Amid Market Challenges

GuruFocus News
4 min read

In This Article:

  • Revenue: $3.896 billion, up 4.3% reported and 4.2% at constant currency.

  • Adjusted EBITDA: $939 million, growth of 5.7% year-over-year.

  • Adjusted Diluted EPS: $2.84, increased 14.1% year-over-year.

  • Net Book-to-Bill Ratio: 1.06, excluding a specific cancellation, it would be 1.22.

  • Backlog: $31.1 billion, up 8% year-over-year.

  • Free Cash Flow: $571 million for the third quarter.

  • Net Debt: $11.940 billion with a net leverage ratio of 3.27 times trailing 12-month adjusted EBITDA.

  • Technology & Analytics Solutions Revenue: $1.554 billion, up 8.6% reported.

  • R&D Solutions Revenue: $2.162 billion, up 1.9% reported.

  • Contract Sales and Medical Solutions Revenue: $180 million, declined 1.6% reported.

  • Year-to-Date Revenue: $11.447 billion, up 3% reported.

  • Guidance for Full Year Revenue: Between $15.350 billion and $15.4 billion.

  • Guidance for Full Year Adjusted EBITDA: Between $3.675 billion and $3.7 billion.

  • Guidance for Full Year Adjusted Diluted EPS: Between $11.10 and $11.20.

Release Date: October 31, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • IQVIA Holdings Inc (NYSE:IQV) reported third-quarter revenue above the high end of their guidance range, with a 6.5% growth excluding foreign exchange and COVID-related work.

  • The company achieved a 14% growth in adjusted diluted EPS, demonstrating strong financial performance.

  • IQVIA Holdings Inc (NYSE:IQV) successfully renewed all large pharma strategic partnerships and expanded the scope in over half a dozen partnerships.

  • The company's backlog reached a new record of $31.1 billion, representing an 8% growth compared to the prior year.

  • IQVIA Holdings Inc (NYSE:IQV) launched the IQVIA AI assistant, a new generative AI tool designed to provide life science customers with quick and powerful insights.

Negative Points

  • The clinical market environment remains choppy, with aggressive competitive pricing and tougher negotiations.

  • IQVIA Holdings Inc (NYSE:IQV) faced a substantial cancellation due to drug futility, impacting quarterly net new business by approximately $350 million.

  • Two mega studies were delayed due to client-related logistics issues, affecting short-term guidance.

  • The company is experiencing pricing pressure across the board, particularly in the Functional Service Provider (FSP) segment.

  • IQVIA Holdings Inc (NYSE:IQV) updated its full-year guidance due to the delay in two fast-burning mega trials, impacting revenue expectations.

Q & A Highlights

Q: Any thoughts on preliminary 2025? Given the current industry challenges, do you think you could still grow in the high single-digit range? A: Ari Bousbib, CEO: We typically don't provide guidance for the following year during the third-quarter earnings release. However, we plan to give some indication at our investor meeting on December 10. For 2024, we expect mid-single-digit growth, and my expectation is similar for 2025. We anticipate TAS to continue its growth trajectory, and RDS to grow around 5% plus, despite short-term cancellations.

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