IQV

Overall Business Momentum

• IQVIA delivered Q2 2026 results where total revenue, adjusted EBITDA, and adjusted diluted EPS all exceeded the high end of prior guidance. Organic growth for the full company accelerated to 6% year-over-year, three times the rate delivered one year prior.
• Adjusted EBITDA margin improvement began earlier than anticipated, driven by strong operational execution. Q2 adjusted EBITDA was $994 million, up 9.2% year-over-year; adjusted diluted EPS was $3.15, up 12.1% year-over-year. Free cash flow grew 23% year-over-year to $360 million in Q2.

Clinical Market Environment & Demand

• RFP flow for R&DS grew double digits both year-over-year and sequentially, with improvements across all customer segments. Decision timelines have shortened, and EVP funding hit $35 billion in Q2 (more than double Q2 2025 levels).
• EVPs currently account for 70% of global clinical trial starts (up from 45% a decade ago), and EVP R&D spend is projected to grow 2-3x faster than large pharma R&D spend. As the largest CRO provider to the EVP segment, IQVIA is positioned to capture meaningful growth from this trend.
• Large pharma strategic outsourcing partnership renewals over the past two years have expanded the number and scope of IQVIA's preferred partnerships, leading to materially improved win rates and wallet share, including displacement of incumbent large CRO providers.

Commercial Market Environment & Demand

• New drug launches increased 45% year-over-year in H1 2026, driving higher demand for commercial services (half of launch-related spending occurs in the first two years post-approval). Large pharma increasingly outsources full commercialization of select therapies in specific geographies, and IQVIA has won a disproportionate share of these opportunities due to its global footprint and end-to-end capabilities.
• Commercial demand indicators remain strong: the commercial pipeline grew double digits year-to-date, decision timelines have reduced double digits, and win rates are up double digits year-over-year.

AI Capabilities & Differentiation

• AI is driving market expansion for IQVIA: on the clinical side, AI-enabled discovery increases the volume of molecules entering clinical development, boosting demand for CRO services. IQVIA's Acuvias Living AI Solutions improve study design, accelerate timelines, and reduce operational risk for complex global trials, and have been a key deciding factor in multiple recent large awards across large pharma and EVPs.
• On the commercial side, clients are moving beyond AI pilots to broad deployment of Iteria AI agents, directly contributing to top-line growth. AI-enabled integrated solutions improve the speed and accuracy of commercial decision-making for pharma clients.
• IQVIA holds three key competitive advantages for AI deployment: large-scale proprietary curated healthcare training data, deep domain expertise to interpret complex healthcare datasets, and global regulatory compliance/privacy expertise. The company currently has 294 AI agents deployed across 90 use cases, with 19 of the top 20 pharma companies already using IQVIA's active AI solutions.

• Management raised full-year 2026 guidance across all key metrics to reflect stronger-than-anticipated organic growth, updated M&A contributions, and reduced FX tailwinds. The new revenue guidance range is $17.275 billion to $17.475 billion, representing 5.9% to 7.1% year-over-year growth, with a midpoint growth rate of 6.5% (up from 5.8% at the prior midpoint). The new guidance includes 100 basis points higher organic growth and 50 basis points higher M&A contribution, partially offset by an 80 basis points smaller FX tailwind than previously expected.
• Full-year 2026 adjusted EBITDA guidance was raised to $4 billion to $4.05 billion (5.6% to 6.9% year-over-year growth), with full-year adjusted EBITDA margin reconfirmed to be flat year-over-year at ~23.2%.
• Full-year 2026 adjusted diluted EPS guidance was raised to $12.80 to $13.00, representing 7.4% to 9.1% year-over-year growth (8.2% at the midpoint).
• For Q3 2026, management guidance is: revenue of $4.315 billion to $4.39 billion (5.2% to 7.1% year-over-year growth); adjusted EBITDA of $1 billion to $1.02 billion (5.4% to 7.5% year-over-year growth); adjusted diluted EPS of $3.19 to $3.29 (6.3% to 9.7% year-over-year growth).
• All full-year and Q3 guidance assumes July 27, 2026 foreign exchange rates hold for the remainder of 2026.

IQVIA's total Q2 2026 revenue was $4.368 billion, growing 8.7% year-over-year on a reported basis and 8.5% at constant currency, with 250 basis points of growth contribution from acquisitions.

• R&D Solutions (R&DS): Q2 2026 revenue was $2.575 billion, up 8.8% reported and 8.6% constant currency, representing 59% of total Q2 revenue. Organic growth reached 7% year-over-year. Net new bookings for the quarter were $3.15 billion, up 19.3% year-over-year and 27% sequentially, for a book-to-bill ratio of 1.22. Trailing 12-month net new bookings hit $11.25 billion, up 12.9% year-over-year, with growth accelerating for four consecutive quarters. As of Q2 end, total R&DS backlog was $34.2 billion, with next 12-month revenue from backlog at $9.23 billion, up 7.5% year-over-year. By customer segment (new classification), Large Pharma accounts for 50% of R&DS revenue, mid-size pharma 15%, and emerging biopharma (EVP) 35%.
• Commercial Solutions: Q2 2026 revenue was $1.793 billion, up 8.6% reported and 8.4% constant currency, representing 41% of total Q2 revenue. Organic growth accelerated to 5% year-over-year, over 100 basis points higher than the prior year. By sub-segment, information solutions (30% of commercial revenue) grows low single digits; analytics and consulting (20%) grows mid-to-high single digits (high single-digit organic growth in Q2, the highest rate since 2022); and patient solutions, technology, and commercial engagement (50% aggregate) grows high single-digit to low double digits, with commercial engagement and patient solutions growing double digits in Q2.

• No material new risks or operational failures were explicitly discussed during the call. Management noted that cancellations for R&DS bookings remained within historical normal ranges, and pass-through revenue mix was also in line with historical norms. A review of inactive trials in the R&DS backlog is ongoing, with any expected adjustment estimated at ~5% of total backlog (far lower than the 15% inactive share reported by a peer), and any adjustment will have no impact on historical financial results, current guidance, or next 12-month revenue from backlog.

Q: The Q2 R&DS bookings are very strong with a high 1.22 book-to-bill ratio. Were there any large unusual awards, or what is the mix of FSO/FSP and pass-through revenue in this quarter's bookings? / A: Management confirmed there are no unusual, abnormal items driving the strong bookings results. Strength was broad-based across all customer segments (large, mid-sized, EVP), with pass-through share and cancellation rates both within normal historical ranges. FSO bookings were particularly strong, returning to pre-industry crisis levels, while FSP bookings were also in line with typical historical low-to-mid double-digit percentage of total bookings.

Q: You noted increasing outsourcing penetration — is this broad-based, or concentrated in specific customer segments? / A: By definition, the EVP segment is 100% outsourced, where IQVIA holds the leading market position. The growth in outsourcing penetration is most pronounced with large pharma: AI-driven discovery is increasing the number of new molecules entering development, and large pharma prefers outsourcing for new molecules in adjacent therapy areas rather than adding permanent internal headcount. IQVIA's global footprint, therapeutic expertise, and AI capabilities position it to capture this growing outsourced demand, with large pharma already asking IQVIA to scale capacity in anticipation of new study launches.

Q: Where are you investing incremental capital for AI development, and how do you see AI capabilities evolving relative to external partnership or M&A opportunities? / A: IQVIA has been investing in AI-enabled capabilities for over a decade, and has three unique competitive advantages that make organic investment the primary focus: 1) large-scale proprietary curated, de-identified global healthcare data that is not available publicly; 2) deep domain expertise to interpret complex healthcare data in proper context; 3) deep experience complying with global varying regulatory and privacy frameworks for healthcare data. Currently 294 IQVIA AI agents are deployed across 90 use cases, with 19 of the top 20 pharma already using IQVIA AI solutions, and AI capabilities are driving increased win rates and incumbent displacement.

Q: What is driving the faster-than-expected EBITDA margin improvement, and are AI productivity investments already contributing to margin gains? / A: Operational productivity programs are delivering exceptional results, generating 90 basis points of underlying operational margin expansion in Q2. This expansion offset an 80 basis point headwind from higher pass-through revenue growth, resulting in net 10 basis points of adjusted EBITDA margin expansion. AI is a key lever in the productivity toolkit, and fixed cost leverage from stronger-than-expected revenue growth also contributed to the better margin outcome.