IQVIA Holdings Inc. Q4 FY2025 earnings call

Management Statement and Operational Highlights

• 2025 Achievements: Invested in innovative offerings and integrated solutions despite macro challenges. Examples include expanding clinical trial capabilities, acquiring Next Oncology, launching DAS solution, advancing patient experience platform, and acquiring Federate Technologies.
• Fourth Quarter Results: Revenue above guidance range, adjusted EBITDA up 5%, adjusted diluted EPS up 9.6%. Clinical net bookings strong, backlog record, commercial Tara resilient.
• 2026 Organization Simplification: Moving to 2 reporting segments - Commercial Solutions and R&D, aligning with industry evolution and operating model.

Segment Performance

• Fourth Quarter: Revenue was $4.34 billion, up 10.3% reported and 8.1% constant currency year-over-year, with acquisitions contributing about 2 points. Adjusted EBITDA increased 5% vs prior year. Adjusted diluted EPS was $3.42, up 9.6% year-over-year. Clinical net bookings totaled over $2.7 billion, growing 7% year-over-year and 5% sequentially, with a net book-to-bill ratio of 1.18. Backlog reached a record $32.7 billion. Commercial Tara performed well with 9.8% reported growth and 7.1% constant currency.
• Full Year: Revenue was $16.31 billion, up 5.9% reported and 4.8% constant currency. Technology & Analytics Solutions revenue was $6.26 billion, up 7.6% reported and 6.2% constant currency. R&D Solutions revenue was $88.96 billion, up 4.3% reported and 3.5% constant currency. CSMS revenue was $7.88 billion, up 9.7% reported and 8.2% constant currency.

Guidance

• Full Year 2026: Revenue expected between $17.159 billion and $17.359 billion, adjusted EBITDA $3.975 billion to $4.25 billion, adjusted diluted EPS $12.55 to $12.85. First quarter 2026: Revenue $4.50 billion to $4.150 billion, adjusted EBITDA $920 million to $940 million, adjusted diluted EPS $2.77 to $2.80.
• Segment-wise 2026: Commercial Solutions revenue expected $7.2 billion to $7.3 billion (7%-9% growth), RDS revenue $9.9 billion to $10 billion (over 4% growth midpoint).

Risks

• Macro environment uncertainties including macroeconomic and government policy, interest rates, which led to slower customer decision-making and tempered biotech funding.

Q: Talk about AI disrupting businesses and why IQVIA is insulated.

A: Ari Bousbib stated IQVIA's proprietary data, domain expertise, and scale make it insulated. Data is proprietary, sourced and curated, and healthcare data has regulatory and complexity requirements. Domain expertise is needed for AI agent development. AI is an enabling technology, augmenting clients' teams not replacing them.

Q: Dig into the acquisition of Cedar Gate.

A: Ari Bousbib said Cedar Gate transforms payer-provider analytics, has $125 million revenue in 2024 and $33 million adjusted EBITDA, helps improve patient outcomes and fit into IQVIA ecosystem.

Q: Thoughts on margin trajectory and productivity sharing.

A: Ronald Bruehlman said pass-through growth was a big driver in margin, SG&A margin improving due to productivity. Sharing productivity gains with clients is normal, with pass-throughs and contract negotiations involved.