IQVIA HOLDINGS INC. Q3 FY2024 earnings call

• IQVIA delivered strong operational results with revenue above the high end of guidance, 6.5% growth excluding FX and COVID-related work, and 14% growth in adjusted diluted EPS.
• For TAS, business is recovering better than forecasted, with AI capabilities expanded, like the launch of IQVIA AI assistant, and multiyear contracts secured.
• In RDS, while facing cancellations and trial delays, existing large pharma strategic partnerships renewed successfully, and backlog reached a new record of $31.1 billion.
• RMBS differentiated with therapeutic expertise, clinical technology, and public health offerings, winning partnerships and awards in oncology and clinical technology.

Third quarter revenue was $3.896 billion, growing 4.3% on a reported basis and 4.2% at constant currency. Excluding COVID-related work, constant currency growth was about 6.5%. Technology & Analytics Solutions (TAS) revenue was $1.554 billion, up 8.6% reported and 8.2% at constant currency. R&D Solutions (RDS) revenue was $2.162 billion, up 1.9% reported and 2% at constant currency. Contract Sales and Medical Solutions (CSMS) revenue was $180 million, declining 1.6% reported and 1.1% at constant currency. Year-to-date, revenue was $11.447 billion, up 3% reported and 3.5% at constant currency. TAS year-to-date revenue was $4.502 billion, up 3.9% reported and 4.3% constant currency. RDS year-to-date revenue was $6.404 billion, up 2.6% at actual FX rate and 3% at constant currency. CSMS year-to-date revenue was $541 million, flat reported and up 3% at constant currency.

Due to trial delays, full year revenue expected between $15.350 billion and $15.400 billion, adjusted EBITDA between $3.675 billion and $3.7 billion, and adjusted diluted EPS between $11.10 and $11.20. Fourth quarter revenue expected between $3.903 billion and $3.953 billion, with TAS growth ~8% and RDS growth ~1% at constant currency. Adjusted EBITDA expected between $987 million and $1.12 billion, and adjusted diluted EPS between $3.08 to $3.18.

• Two mega studies delayed by clients due to logistics issues affecting short-term guidance.
• Higher-than-normal level of cancellations in R&DS due to large pharma re-prioritizing program portfolios as a result of IRA.
• Pricing pressure across the board, with competitive bidding and desperate competitors leading to tough negotiations.

Q: Any thoughts on preliminary 2025?

A: We don't usually give guidance for 2025 now but expect similar mid-single digit growth as 2024 after short-term challenges absorbed, with TAS rebounding and RDS projecting 5%+ growth.

Q: Can you give more detail on trial delays?

A: Trials delayed due to client-related logistics issues, unrelated to reprioritization or financials, confident to resume in 2025 but choppy environment adds complexity Q: On M&A, update on financial profile?

A: Majority acquisition contribution in TAS, organic growth in TAS mid-single digits, spent $649 million on acquisitions year-to-date with many small deals, and plan to spend more on share repurchase in fourth quarter