IQVIA Holdings Inc. Q3 FY2025 earnings call

Management Statement and Operational Highlights

• Ari Bousbib noted the company delivered a strong quarter with revenue and profit towards the high end of guidance, and record free cash flow. Net bookings totaled $2.6 billion with a 1.15x book-to-bill ratio. EBP funding reached $18 billion in Q3, qualified pipeline was up 6% YOY, RFP flow growth was strong, and backlog reached a record $32.4 billion.
• On TAS, continued strong performance driven by drug launches and commercial portfolio strength, with CSMS growing 16.1% in Q3 due to an acquisition. AI development was highlighted with ~90 agents in development across 25 use cases.
• R&D Solutions saw positive momentum with strong wins in biotech and large pharma, including leading trials in oncology, hematologic-oncology, and stroke therapy.
• Real-world business performed well with clients selecting IQVIA for post-market studies and regulatory commitments.

Segment Performance

• Technology & Analytics Solutions (TAS): Third quarter revenue was $1.631 billion, up 5% reported and 3.3% at constant currency. Year-to-date, TAS revenue was $4.805 billion, up 6.7% reported and 5.8% at constant currency.
• R&D Solutions: Third quarter revenue was $2.26 billion, growing 4.5% reported and 3.4% at constant currency. Year-to-date, R&D Solutions revenue was $6.563 billion, up 2.5% at actual FX rates and 1.9% at constant currency.
• Contract Sales & Medical Solutions (CSMS): Third quarter revenue was $209 million, up 16.1% reported and 13.9% at constant currency. Year-to-date, CSMS revenue was $578 million, up 6.8% reported and 5.9% at constant currency.

Guidance

• Confirmed full-year 2025 guidance, narrowing ranges for revenue, adjusted EBITDA, and adjusted diluted EPS while maintaining the midpoint. Revenue expected to be between $16.150 billion and $16.250 billion (4.8%-5.5% YOY growth). Adjusted EBITDA expected to be between $3.775 billion and $3.8 billion (2.5%-3.1% YOY growth). Adjusted diluted EPS expected to be between $11.85 and $11.95 (~7% YOY growth).
• Fourth quarter guidance: Revenue between $4.204 billion and $4.304 billion (6.2%-8.7% YOY growth), adjusted EBITDA between $1.033 billion and $1.058 billion (3.7%-6.2% YOY growth), and adjusted diluted EPS between $3.35 and $3.45 (7.4%-10.6% YOY growth).

Risks

• No specific risks detailed in the transcript, but management cautioned that actual results could differ from forward-looking statements due to risks and uncertainties associated with the company's business, as discussed in SEC filings.

Question and Answer

• Q: David Windley asked about the see more, win more strategy and its impact on RFP flows, pricing, and P&L.

A: Ari Bousbib stated the strategy helped due to reduced market uncertainty, and pricing has returned to normal with little impact on P&L going forward.

• Q: Justin Bowers inquired about momentum continuation into 2026.

A: Ari Bousbib said they expect strong top-line growth in 2025 but didn't provide 2026 guidance yet, noting confidence in at least similar growth in 2026.

• Q: Elizabeth Anderson asked about differences between pharma and biotech.

A: Ari Bousbib explained large pharma's reprioritization activity is mostly completed, leading to strong RFP flow and normalized pipelines.

• Q: Eric Coldwell asked about TAS fourth quarter guidance.

A: Michael Fedock confirmed no change to full-year TAS guidance, with 5%-6% constant currency growth expected.

• Q: Jeffrey Garro asked about AI's impact on customers' business models and internal margin improvements.

A: Ari Bousbib discussed 90 AI agents in development, internal efficiency gains, and how AI is used in client commercial and real-world operations to drive improvements.