IQVIA HOLDINGS INC. Q3 FY2026 earnings call

Strong Financial Execution:

• Total revenue exceeded high-end guidance, growing 8% reported and 8.6% at constant currency.
• Organic revenue growth accelerated to ~6%, double the prior year's rate.
• Adjusted EBITDA grew 8.7% year-over-year, expanding margins by 20 basis points for the second consecutive quarter.
• Free cash flow was robust, representing 120% of adjusted net income.

AI and Technology Differentiation:

• IQVIA has deployed 415 AI agents to date, leveraging proprietary data, life sciences context, and interpretive capabilities.
• AI solutions are shortening trial timelines (e.g., nine months saved in one autoimmune study) and enhancing patient engagement through sentiment analysis.
• The company emphasizes that AI is a business model shift requiring integrated content, context, and compliance, not just generic tools.

Operational Momentum:

• Clinical bookings reached $3.2 billion, the highest in four years, driven by strong full-service demand and improved win rates.
• Last 12 months net new bookings increased 14% year-over-year to $11.7 billion, marking five consecutive quarters of growth.
• Commercial pipelines are at record levels, supported by a 40% increase in new drug launches year-to-date.
• Market environment shows strength with EBP funding up 85% year-over-year ($90 billion YTD).

Commercial Solutions: Revenue was $1.789 billion, growing 6.9% reported (7.9% constant currency) with ~4% organic growth. This segment contributed approximately 40.4% of total revenue.

R&D Solutions: Revenue was $2.639 billion, growing 8.7% reported (9.1% constant currency) with ~7% organic growth. This segment contributed approximately 59.6% of total revenue.

• Full Year 2026 Revenue Guidance Raised: Now expected between $17.35 billion and $17.50 billion (6.4%-7.3% growth), assuming ~250 bps from acquisitions and ~20 bps FX tailwind.
• Full Year 2026 Adjusted EBITDA Guidance Raised: Now expected between $4.25 billion and $4.55 billion (6.3%-7.0% growth), maintaining flat margins around 23.2%.
• Full Year 2026 Adjusted Diluted EPS Guidance Raised: Now expected between $12.90 and $13.00 (8.2%-9.1% growth).
• Q4 Run Rate Assumptions Provided: Net interest expense ~$210 million; Depreciation & Amortization >$160 million; Weighted average diluted share count ~169 million shares.
• 2027 Detailed guidance will be provided in February 2027; investors invited to Investor Day on December 1st.

• Foreign Exchange Volatility: Implied ~70 bps headwind to Q4 revenue based on current FX rates.
• Pass-Through Revenue Impact: High mix of pass-through revenues in R&D Solutions can distort reported gross margins, though underlying operational margins are stronger.
• Backlog Adjustments: A $2.1 billion adjustment was made to inactive trials (>18 months old) to improve visibility, though this does not impact historical results or current guidance.
• Macroeconomic and Regulatory Uncertainty: Previous headwinds included IRA pricing concerns, post-COVID deceleration, and tariff uncertainties, which extended decision timelines.

Q: Analyst asked about IQVIA's unique ability to deploy agentic AI compared to competitors and how clients view this differentiation. / A: CEO Ari Bousbib explained that successful AI deployment requires three pillars: proprietary curated data (content), deep life sciences expertise (context), and the ability to interpret insights for decision-making. He noted that IQVIA uses generic AI tools but builds specific agents using its unique data and context. Clients value this integration as it automates workflows while maintaining necessary human oversight for compliance and traceability in healthcare, making IQVIA more embedded in client operations rather than just selling software.