Business Wire | Oct 21, 2021 07:00AM EDT

IQVIA Reports Third-Quarter 2021 Results and Raises Full-Year 2021 Guidance

Oct. 21, 2021

RESEARCH TRIANGLE PARK, N.C.--(BUSINESS WIRE)--Oct. 21, 2021--IQVIA Holdings Inc. ("IQVIA") (NYSE: IQV), a leading global provider of advanced analytics, technology solutions, and clinical research services to the life sciences industry, today reported financial results for the quarter ended September 30, 2021.

Third-Quarter 2021 Operating ResultsRevenue for the third quarter of $3,391 million increased 21.7 percent on a reported basis and 21.1 percent at constant currency compared to the third quarter of 2020. Technology & Analytics Solutions (TAS) revenue of $1,337 million grew 10.8 percent on a reported basis and 9.9 percent at constant currency. Research & Development Solutions (R&DS) revenue of $1,853 million grew 32.4 percent on a reported basis and 31.9 percent at constant currency. Excluding the impact of pass throughs, R&DS revenue grew 24.7 percent year-over-year on a reported basis. Contract Sales & Medical Solutions (CSMS) revenue of $201 million grew 12.3 percent on a reported basis and 12.8 percent at constant currency.

R&DS contracted backlog, including reimbursed expenses, grew 12.7 percent year-over-year to $24.4 billion as of September 30, 2021. The company expects approximately $6.9 billion of this backlog to convert to revenue in the next twelve months. The third-quarter contracted net book-to-bill ratio was 1.39x including reimbursed expenses and 1.28x excluding reimbursed expenses. For the last twelve months ended September 30, 2021, the contracted net book-to-bill ratio was 1.38x including reimbursed expenses and 1.37x excluding reimbursed expenses.

"We delivered another quarter of strong organic revenue growth as well as robust earnings and free cash flow," said Ari Bousbib, chairman and CEO of IQVIA. "We exceeded our financial targets across the board, with all segments delivering strong growth. As a result of this performance, we are once again raising our full-year 2021 financial guidance. Our strong book of business across the company sets us up well to sustain our momentum into next year and beyond."

Third-quarter GAAP Net Income was $261 million, representing an increase of 158.4 percent compared to the third quarter of 2020, and GAAP Diluted Earnings per Share was $1.34, representing an increase of 157.7 percent compared to the third quarter of 2020. Adjusted Net Income was $423 million and Adjusted Diluted Earnings per Share was $2.17, representing an increase of 33.1 percent compared to the third quarter of 2020. Adjusted EBITDA was $728 million, up 20.5 percent compared to the third quarter of 2020.

Year-to-Date 2021 Operating ResultsRevenue for the first nine months of 2021 was $10,238 million, up 27.0 percent on a reported basis and 25.0 percent at constant currency. TAS revenue was $4,038 million, representing growth of 17.6 percent reported and 14.9 percent at constant currency. R&DS revenue was $5,612 million, up 37.7 percent on a reported basis and 36.2 percent at constant currency. CSMS revenue was $588 million, up 6.5 percent reported and 5.1 percent at constant currency.

GAAP Net Income was $648 million and GAAP Diluted Earnings per Share was $3.32 for the first nine months of 2021. Adjusted Net Income was $1,264 million and Adjusted Diluted Earnings per Share was $6.48. Adjusted EBITDA for the first nine months of 2021 was $2,194 million.

Financial PositionAs of September 30, 2021, cash and cash equivalents were $1,470 million and debt was $12,172 million, resulting in net debt of $10,702 million. IQVIA's Net Leverage Ratio was 3.7x trailing twelve month Adjusted EBITDA. For the third quarter of 2021, Operating Cash Flow was $844 million and Free Cash Flow was $682 million. For the first nine months of 2021, Operating Cash Flow was $2,250 million and Free Cash Flow was $1,794 million.

Share RepurchaseDuring the third quarter of 2021, the company repurchased $125 million of its common stock. IQVIA had $697 million of share repurchase authorization remaining as of September 30, 2021.

Full-Year 2021 GuidanceFor full-year 2021, the company is raising its guidance ranges as follows:

Updated Guidance Prior Guidance

[($ in millions, except per share data)] October 21 July 27

Revenue $13,775 - $13,850 $13,550 - $13,700

VPY% ^(1) 21.3% - 21.9% 19.3% - 20.6%

Adjusted EBITDA $2,980 - $3,010 $2,950 - $3,000

VPY% ^(1) 25.0% - 26.3% 23.7% - 25.8%

Adjusted Diluted EPS $8.85 - $8.95 $8.70 - $8.90

VPY% ^(1) 37.9% - 39.4% 35.5% - 38.6%

[(1) Growth rates are at actual foreign currency exchange rates.]

Fourth-Quarter 2021 GuidanceFor the fourth quarter of 2021, the company is providing guidance as follows:

[($ in millions, except per share data)] Guidance VPY% ^(1)

Revenue $3,537 - $3,612 7.2% - 9.5%

Adjusted EBITDA $786 - $816 6.9% - 11.0%

Adjusted Diluted EPS $2.37 - $2.47 12.3% - 17.1%

[(1) Growth rates are at actual foreign currency exchange rates.]

All financial guidance assumes foreign currency exchange rates as of September 30, 2021 remain in effect for the forecast period.

Webcast & Conference Call DetailsIQVIA will host a conference call at 9:00 a.m. Eastern Time today to discuss its third-quarter 2021 results and its fourth-quarter and full-year 2021 guidance. To listen to the event and view the presentation slides via webcast, join from the IQVIA Investor Relations website at http://ir.iqvia.com. To participate in the conference call, interested parties must register in advance by clicking on this link. Following registration, participants will receive a confirmation email containing details on how to join the conference call, including the dial-in and a unique passcode and registrant ID. At the time of the live event, registered participants connect to the call using the information provided in the confirmation email and will be placed directly into the call.

About IQVIAIQVIA (NYSE:IQV) is a leading global provider of advanced analytics, technology solutions, and clinical research services to the life sciences industry. IQVIA creates intelligent connections across all aspects of healthcare through its analytics, transformative technology, big data resources and extensive domain expertise. IQVIA Connected Intelligence(tm) delivers powerful insights with speed and agility - enabling customers to accelerate the clinical development and commercialization of innovative medical treatments that improve healthcare outcomes for patients. With approximately 77,000 employees, IQVIA conducts operations in more than 100 countries.

IQVIA is a global leader in protecting individual patient privacy. The company uses a wide variety of privacy-enhancing technologies and safeguards to protect individual privacy while generating and analyzing information on a scale that helps healthcare stakeholders identify disease patterns and correlate with the precise treatment path and therapy needed for better outcomes. IQVIA's insights and execution capabilities help biotech, medical device and pharmaceutical companies, medical researchers, government agencies, payers and other healthcare stakeholders tap into a deeper understanding of diseases, human behavior and scientific advances, in an effort to advance their path toward cures. To learn more, visit www.iqvia.com.

Cautionary Statements Regarding Forward-Looking StatementsThis press release contains "forward-looking statements" within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, without limitation, our fourth-quarter and full-year 2021 guidance. In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as "expect," "assume," "anticipate," "intend," "plan," "forecast," "believe," "seek," "see," "will," "would," "target," similar expressions, and variations or negatives of these words. Actual results may differ materially from our expectations due to a number of factors, including, but not limited to, the following: business disruptions caused by natural disasters, pandemics such as the COVID-19 (coronavirus) outbreak and the public health policy responses to the outbreak, international conflicts or other disruptions outside of our control; our ability to accurately model or forecast the impact of the spread and/or containment of COVID-19, among other sources of business interruption, on our operations and financial results; most of our contracts may be terminated on short notice, and we may lose or experience delays with large client contracts or be unable to enter into new contracts; the market for our services may not grow as we expect; we may be unable to successfully develop and market new services or enter new markets; imposition of restrictions on our use of data by data suppliers or their refusal to license data to us; any failure by us to comply with contractual, regulatory or ethical requirements under our contracts, including current or changes to data protection and privacy laws; breaches or misuse of our or our outsourcing partners' security or communications systems; failure to meet our productivity or business transformation objectives; failure to successfully invest in growth opportunities; our ability to protect our intellectual property rights and our susceptibility to claims by others that we are infringing on their intellectual property rights; the expiration or inability to acquire third party licenses for technology or intellectual property; any failure by us to accurately and timely price and formulate cost estimates for contracts, or to document change orders; hardware and software failures, delays in the operation of our computer and communications systems or the failure to implement system enhancements; the rate at which our backlog converts to revenue; our ability to acquire, develop and implement technology necessary for our business; consolidation in the industries in which our clients operate; risks related to client or therapeutic concentration; government regulators or our customers may limit the scope of prescription or withdraw products from the market, and government regulators may impose new regulatory requirements or may adopt new regulations affecting the biopharmaceutical industry; the risks associated with operating on a global basis, including currency or exchange rate fluctuations and legal compliance, including anti-corruption laws; risks related to changes in accounting standards; general economic conditions in the markets in which we operate, including financial market conditions and risks related to sales to government entities; the impact of changes in tax laws and regulations; and our ability to successfully integrate, and achieve expected benefits from, our acquired businesses. For a further discussion of the risks relating to our business, see the "Risk Factors" in our annual report on Form 10-K for the fiscal year ended December 31, 2020, filed with the Securities and Exchange Commission (the "SEC"), as such factors may be amended or updated from time to time in our subsequent periodic and other filings with the SEC, which are accessible on the SEC's website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in our filings with the SEC. We assume no obligation to update any such forward-looking statement after the date of this release, whether as a result of new information, future developments or otherwise.

Note on Non-GAAP Financial MeasuresThis release included information based on financial measures that are not recognized under generally accepted accounting principles in the United States ("GAAP"), such as Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, and Free Cash Flow. Non-GAAP financial measures are presented only as a supplement to the company's financial statements based on GAAP. Non-GAAP financial information is provided to enhance understanding of the company's financial performance, but none of these non-GAAP financial measures are recognized terms under GAAP, and non-GAAP measures should not be considered in isolation from, or as a substitute analysis for, the company's results of operations as determined in accordance with GAAP. The company uses non-GAAP measures in its operational and financial decision making, and believes that it is useful to exclude certain items in order to focus on what it regards to be a more meaningful indicator of the underlying operating performance of the business. For example, the Company excludes all the amortization of intangible assets associated with acquired customer relationships and backlog, databases, non-compete agreements and trademarks, trade names and other from non-GAAP expense and income measures as such amounts can be significantly impacted by the timing and size of acquisitions. Although we exclude amortization of acquired intangible assets from our non-GAAP expenses, we believe that it is important for investors to understand that revenue generated from such intangibles is included within revenue in determining net income attributable to IQVIA Holdings Inc. As a result, internal management reports feature non-GAAP measures which are also used to prepare strategic plans and annual budgets and review management compensation. The company also believes that investors may find non-GAAP financial measures useful for the same reasons, although investors are cautioned that non-GAAP financial measures are not a substitute for GAAP disclosures.

The non-GAAP financial measures are not presented in accordance with GAAP. Please refer to the schedules attached to this release for reconciliations of non-GAAP financial measures contained herein to the most directly comparable GAAP measures. Our fourth-quarter and full-year 2021 guidance measures (other than revenue) are provided on a non-GAAP basis without a reconciliation to the most directly comparable GAAP measure because the company is unable to predict with a reasonable degree of certainty certain items contained in the GAAP measures without unreasonable efforts. Such items include, but are not limited to, acquisition related expenses, restructuring and related expenses, stock-based compensation and other items not reflective of the company's ongoing operations.

Non-GAAP measures are frequently used by securities analysts, investors and other interested parties in their evaluation of companies comparable to the company, many of which present non-GAAP measures when reporting their results. Non-GAAP measures have limitations as an analytical tool. They are not presentations made in accordance with GAAP, are not measures of financial condition or liquidity and should not be considered as an alternative to profit or loss for the period determined in accordance with GAAP or operating cash flows determined in accordance with GAAP. Non-GAAP measures are not necessarily comparable to similarly titled measures used by other companies. As a result, you should not consider such performance measures in isolation from, or as a substitute analysis for, the company's results of operations as determined in accordance with GAAP.

IQVIAFIN

Table 1

IQVIA HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(preliminary and unaudited)

Three Months Ended Nine Months Ended September 30, September 30,

(in millions, except per share 2021 2020 2021 2020data)

Revenues $ 3,391 $ 2,786 $ 10,238 $ 8,061

Costs of revenue, exclusive of 2,253 1,800 6,869 5,328 depreciation and amortization

Selling, general and 498 460 1,422 1,298 administrative expenses

Depreciation and amortization 336 319 1,002 943

Restructuring costs 2 20 15 50

Income from operations 302 187 930 442

Interest income (2 ) (1 ) (4 ) (4 )

Interest expense 92 100 285 314

Loss on extinguishment of debt 1 - 25 12

Other income, net (62 ) (14 ) (128 ) (59 )

Income before income taxes andequity in earnings of 273 102 752 179 unconsolidated affiliates

Income tax expense (benefit) 12 (3 ) 104 9

Income before equity inearnings of unconsolidated 261 105 648 170 affiliates

Equity in earnings of - 3 5 8 unconsolidated affiliates

Net income 261 108 653 178

Net income attributable to - (7 ) (5 ) (18 )non-controlling interests

Net income attributable to $ 261 $ 101 $ 648 $ 160 IQVIA Holdings Inc.

Earnings per shareattributable to common stockholders:

Basic $ 1.36 $ 0.53 $ 3.38 $ 0.84

Diluted $ 1.34 $ 0.52 $ 3.32 $ 0.82

Weighted average common shares outstanding:

Basic 191.5 191.3 191.5 191.3

Diluted 195.3 194.9 195.0 194.9

Table 2

IQVIA HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(preliminary and unaudited)

(in millions, except per share data) September December 30, 2021 31, 2020

ASSETS

Current assets:

Cash and cash equivalents $ 1,470 $ 1,814

Trade accounts receivable and unbilled services, 2,330 2,410 net

Prepaid expenses 164 159

Income taxes receivable 56 56

Investments in debt, equity and other securities 104 88

Other current assets and receivables 410 563

Total current assets 4,534 5,090

Property and equipment, net 485 482

Operating lease right-of-use assets 404 471

Investments in debt, equity and other securities 74 78

Investments in unconsolidated affiliates 84 84

Goodwill 13,124 12,654

Other identifiable intangibles, net 4,812 5,205

Deferred income taxes 105 114

Deposits and other assets 411 386

Total assets $ 24,033 $ 24,564

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable and accrued expenses $ 2,663 $ 2,813

Unearned income 1,826 1,252

Income taxes payable 53 102

Current portion of long-term debt 91 149

Other current liabilities 214 242

Total current liabilities 4,847 4,558

Long-term debt, less current portion 12,081 12,384

Deferred income taxes 297 338

Operating lease liabilities 323 371

Other liabilities 656 633

Total liabilities 18,204 18,284

Commitments and contingencies

Stockholders' equity:

Common stock and additional paid-in capital, 400.0shares authorized as ofSeptember 30, 2021 and December 31, 2020, $0.01par value, 255.6 shares issued 10,747 11,095 and 191.1 shares outstanding as of September 30,2021; 254.7 shares issued and191.2 shares outstanding as of December 31, 2020

Retained earnings 1,925 1,277

Treasury stock, at cost, 64.5 and 63.5 shares asof September 30, 2021 and (6,398 ) (6,166 )December 31, 2020, respectively

Accumulated other comprehensive loss (445 ) (205 )

Equity attributable to IQVIA Holdings Inc.'s 5,829 6,001 stockholders

Non-controlling interests - 279

Total stockholders' equity 5,829 6,280

Total liabilities and stockholders' equity $ 24,033 $ 24,564

Table 3

IQVIA HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(preliminary and unaudited)

Nine Months Ended September 30,

(in millions) 2021 2020

Operating activities:

Net income $ 653 $ 178

Adjustments to reconcile net income to cash provided by operating activities:

Depreciation and amortization 1,002 943

Amortization of debt issuance costs and discount 14 13

Stock-based compensation 128 69

Earnings from unconsolidated affiliates (5 ) (8 )

Gain on investments, net (9 ) (17 )

Benefit from deferred income taxes (83 ) (160 )

Changes in operating assets and liabilities:

Change in accounts receivable, unbilled services and 663 328 unearned income

Change in other operating assets and liabilities (113 ) (137 )

Net cash provided by operating activities 2,250 1,209

Investing activities:

Acquisition of property, equipment and software (456 ) (440 )

Acquisition of businesses, net of cash acquired (994 ) (118 )

Purchases of marketable securities, net (9 ) (8 )

Investments in unconsolidated affiliates, net of (3 ) 8 payments received

Proceeds from sale of (investments in) equity 5 (2 )securities

Other 1 -

Net cash used in investing activities (1,456 ) (560 )

Financing activities:

Proceeds from issuance of debt 1,951 1,591

Payment of debt issuance costs (40 ) (33 )

Repayment of debt and principal payments on finance (2,068 ) (792 )leases

Proceeds from revolving credit facility 410 1,250

Repayment of revolving credit facility (300 ) (1,610 )

(Payments) related to employee stock option plans (51 ) (43 )

Repurchase of common stock (202 ) (346 )

Distributions to non-controlling interest, net - (16 )

Acquisition of Quest's non-controlling interest (758 ) -

Contingent consideration and deferred purchase price (39 ) (20 )payments

Net cash used in financing activities (1,097 ) (19 )

Effect of foreign currency exchange rate changes on (41 ) (3 )cash

(Decrease) increase in cash and cash equivalents (344 ) 627

Cash and cash equivalents at beginning of period 1,814 837

Cash and cash equivalents at end of period $ 1,470 $ 1,464

Table 4

IQVIA HOLDINGS INC. AND SUBSIDIARIES

NET INCOME TO ADJUSTED EBITDA RECONCILIATION

(preliminary and unaudited)

Three Months Nine Months Ended Ended September 30, September 30,

(in millions) 2021 2020 2021 2020

Net Income Attributable to IQVIA $ 261 $ 101 $ 648 $ 160 Holdings Inc.

Provision for (benefit from) income 12 (3 ) 104 9 taxes

Depreciation and amortization 336 319 1,002 943

Interest expense, net 90 99 281 310

Income in unconsolidated affiliates - (3 ) (5 ) (8 )

Income from non-controlling interests - 7 5 18

Deferred revenue purchase accounting - - - 1 adjustments

Stock-based compensation 48 33 128 69

Other income, net (55 ) (3 ) (93 ) (35 )

Loss on extinguishment of debt 1 - 25 12

Restructuring and related expenses 13 25 44 65

Acquisition related expenses 22 29 55 105

Adjusted EBITDA $ 728 $ 604 $ 2,194 $ 1,649



Table 5

IQVIA HOLDINGS INC. AND SUBSIDIARIES

NET INCOME TO ADJUSTED NET INCOME RECONCILIATION

(preliminary and unaudited)

Three Months Ended Nine Months Ended September 30, September 30,

(in millions, except per share 2021 2020 2021 2020data)

Net Income Attributable to IQVIA $ 261 $ 101 $ 648 $ 160 Holdings Inc.

Provision for (benefit from) 12 (3 ) 104 9 income taxes

Purchase accounting amortization 231 226 695 691 ^(1)

Income in unconsolidated - (3 ) (5 ) (8 )affiliates

Income from non-controlling - 7 5 18 interests

Deferred revenue purchase - - - 1 accounting adjustments

Stock-based compensation 48 33 128 69

Other income, net (55 ) (3 ) (93 ) (35 )

Loss on extinguishment of debt 1 - 25 12

Restructuring and related 13 25 44 65 expenses

Acquisition related expenses 22 29 55 105

Adjusted Pre Tax Income $ 533 $ 412 $ 1,606 $ 1,087

Adjusted tax expense (110 ) (84 ) (333 ) (223 )

Income from non-controlling - (7 ) (5 ) (18 )interests

Minority interest effect in - (3 ) (4 ) (5 )non-GAAP adjustments ^(2)

Adjusted Net Income $ 423 $ 318 $ 1,264 $ 841



Adjusted earnings per shareattributable to common stockholders:

Basic $ 2.21 $ 1.66 $ 6.60 $ 4.40

Diluted $ 2.17 $ 1.63 $ 6.48 $ 4.32

Weighted average common shares outstanding:

Basic 191.5 191.3 191.5 191.3

Diluted 195.3 194.9 195.0 194.9

(1)

Reflects all the amortization of acquired intangible assets.

(2)

Reflects the portion of Q2 Solutions' after-tax non-GAAP adjustments attributable to the minority interest partner.

^ Reflects all the amortization of acquired intangible assets.(1)

^ Reflects the portion of Q^2 Solutions' after-tax non-GAAP adjustments(2) attributable to the minority interest partner.

Table 6

IQVIA HOLDINGS INC. AND SUBSIDIARIES

NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW RECONCILIATION

(preliminary and unaudited)

Three Months Nine Months Ended Ended September 30, September 30,

(in millions) 2021 2021

Net Cash provided by Operating Activities $ 844 $ 2,250

Acquisition of property, equipment and (162 ) (456 )software

Free Cash Flow $ 682 $ 1,794



Table 7

IQVIA HOLDINGS INC. AND SUBSIDIARIES

CALCULATION OF GROSS AND NET LEVERAGE RATIOS

AS OF SEPTEMBER 30, 2021

(preliminary and unaudited)

(in millions)

Gross Debt, net of Original Issue Discount, as of September 30, $ 12,172 2021

Net Debt as of September 30, 2021 $ 10,702

Adjusted EBITDA for the twelve months ended September 30, 2021 $ 2,929

Gross Leverage Ratio (Gross Debt/LTM Adjusted EBITDA) 4.2x

Net Leverage Ratio (Net Debt/LTM Adjusted EBITDA) 3.7x

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CONTACT: Nick Childs, IQVIA Investor Relations (nicholas.childs@iqvia.com) +1.973.316.3828 Tor Constantino, IQVIA Media Relations (tor.constantino@iqvia.com) +1.484.567.6732