Industry Overview - Companies in the drug development inputs and services sector are essential to the pharmaceutical and biotechnology value chain, providing support for drug discovery, preclinical testing, and manufacturing [2] - The industry benefits from stable demand as pharmaceutical companies often outsource non-core functions with medium to long-term contracts [2] - Future growth is expected due to increasing investments in biologics, cell and gene therapies, and advancements in precision medicine, which will drive demand for sophisticated tools and services [2] - There is a trend towards outsourcing in drug development for increased nimbleness and cost efficiency [2] - Potential challenges include pricing pressures from healthcare cost containment efforts and an evolving regulatory environment that could slow innovation or client activity [2] Q3 Earnings Performance - The seven tracked drug development inputs and services stocks reported strong Q3 results, with revenues exceeding analysts' consensus estimates by 3.1% [3] - On average, share prices of these companies have increased by 2% since the latest earnings results [3] Company-Specific Highlights - IQVIA (NYSE:IQV) reported revenues of $4.1 billion, reflecting a year-on-year increase of 5.2%, which surpassed analysts' expectations by 0.5% [5] - Despite the revenue growth, IQVIA's performance was mixed, with constant currency revenue aligning with analysts' estimates [5] - IQVIA delivered the weakest performance against analyst estimates within the group, resulting in a 3% decline in stock price since reporting, currently trading at $211 [6] - Medpace (NASDAQ:MEDP) was highlighted as the best performer in Q3, providing outsourced clinical trial management and research services [7]

Core Insights - IQVIA Holdings reported revenue of $4.1 billion for the quarter ended September 2025, reflecting a year-over-year increase of 5.2% and an EPS of $3.00, up from $2.84 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $4.07 billion by 0.86%, while the EPS also surpassed the consensus estimate of $2.96 by 1.35% [1] Financial Performance Metrics - The backlog stood at $32.40 billion, slightly below the average estimate of $32.49 billion from two analysts [4] - Revenue from Technology & Analytics Solutions was reported at $1.63 billion, compared to the average estimate of $1.66 billion, marking a 5% year-over-year increase [4] - Revenue from Research & Development Solutions reached $2.26 billion, exceeding the estimated $2.23 billion, with a year-over-year change of 4.5% [4] - Revenue from Contract Sales & Medical Solutions was $209 million, surpassing the average estimate of $180.27 million, representing a significant year-over-year increase of 16.1% [4] - Segment profit for Technology & Analytics Solutions was $370 million, below the average estimate of $412.55 million [4] - Segment profit for Contract Sales & Medical Solutions was reported at $13 million, significantly higher than the estimated $0.84 million [4] - Segment profit for Research & Development Solutions was $496 million, slightly above the average estimate of $495.9 million [4] Stock Performance - IQVIA shares have returned +20.3% over the past month, outperforming the Zacks S&P 500 composite's +3.6% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Revenue Performance - For Q3 2025, total revenues reached $3,896 million, an increase of $204 million or 5.2% compared to Q3 2024, driven by constant currency revenue growth of approximately $150 million or 3.9%[98] - For the first nine months of 2025, revenues increased to $11,946 million, up $499 million or 4.4% from the same period in 2024, with constant currency growth of approximately $418 million or 3.7%[99] - For the third quarter of 2025, total revenues increased to $4,100 million, up 5.2% from $3,896 million in the same period of 2024[115] - Technology & Analytics Solutions reported revenues of $1,631 million for Q3 2025, a 5.0% increase from $1,554 million in Q3 2024, driven by growth in the Americas region[118] - Research & Development Solutions achieved revenues of $2,260 million in Q3 2025, reflecting a 4.5% increase from $2,162 million in Q3 2024, primarily due to growth in the Americas region[129] - Contract Sales & Medical Solutions' revenues for Q3 2025 were $209 million, an increase of $29 million, or 16.1%, compared to Q3 2024[138] - For the first nine months of 2025, revenues reached $578 million, up $37 million, or 6.8%, from the same period in 2024[139] Cost and Expenses - Cost of revenues for Q3 2025 was $2,727 million, representing 66.5% of revenues, an increase of $209 million from Q3 2024, with a constant currency increase of approximately $183 million or 7.3%[100] - Selling, general and administrative expenses for Q3 2025 were $514 million, accounting for 12.5% of revenues, a decrease of $8 million from Q3 2024[102] - Depreciation and amortization for Q3 2025 was $286 million, or 7.0% of revenues, reflecting an increase of $8 million compared to Q3 2024[105] - Restructuring costs for Q3 2025 were $20 million, down from $28 million in Q3 2024, as the company continues to streamline operations[106] - Technology & Analytics Solutions' cost of revenues increased by $252 million, or 9.3%, in the first nine months of 2025 compared to the same period in 2024[122] - Research & Development Solutions' selling, general and administrative expenses increased by $10 million, or 4.5%, in Q3 2025 compared to Q3 2024[135] - Cost of revenues, exclusive of depreciation and amortization, increased by $27 million, or 17.5%, in Q3 2025 compared to Q3 2024[141] - In the first nine months of 2025, cost of revenues rose by $37 million, or 8.0%, compared to the same period in 2024[142] - Selling, general and administrative expenses increased by $1 million, or 7.1%, in Q3 2025, but decreased by $2 million, or 4.4%, in the first nine months of 2025[144][145] Financial Position - The company had a cash balance of $1,814 million as of September 30, 2025, an increase from $1,702 million as of December 31, 2024[148] - Net cash provided by operating activities was $1,919 million for the first nine months of 2025, an increase of $88 million compared to the same period in 2024[159] - Cash used in investing activities was $(1,201) million for the first nine months of 2025, an increase of $67 million compared to the same period in 2024[160] - Cash used in financing activities increased by $182 million to $(685) million during the first nine months of 2025 compared to the same period in 2024[161] - The company repurchased 6.4 million shares for $1,032 million under its equity repurchase program during the nine months ended September 30, 2025[151] Current and Noncurrent Liabilities - Total current assets as of September 30, 2025, decreased to $599 million from $935 million as of December 31, 2024, representing a decline of approximately 36%[168] - Total current liabilities increased to $5,120 million as of September 30, 2025, from $3,792 million as of December 31, 2024, marking an increase of about 35%[168] - Total noncurrent liabilities slightly decreased to $12,223 million as of September 30, 2025, from $12,333 million as of December 31, 2024[168] - Amounts due from subsidiaries that are non-Guarantors decreased to $4,663 million as of September 30, 2025, from $4,952 million as of December 31, 2024, a decline of about 6%[168] - Amounts due to subsidiaries that are non-Guarantors increased to $7,190 million as of September 30, 2025, from $6,341 million as of December 31, 2024, an increase of approximately 13%[168] Income and Taxation - Consolidated segment profit for the first nine months of 2025 was $1,555 million, slightly down from $1,576 million in the same period of 2024[116] - The effective income tax rate for the first nine months of 2025 was 18.3%, compared to 16.8% in the same period of 2024, influenced by changes in the geographical mix of earnings[111] - Net income for the nine months ended September 30, 2025, was $117 million, significantly lower than $554 million for the twelve months ended December 31, 2024, representing a decrease of approximately 79%[168] - Income from operations for the nine months ended September 30, 2025, was $1,074 million, down from $1,259 million for the twelve months ended December 31, 2024, reflecting a decline of approximately 15%[168] Other Information - The company operates through three segments: Technology & Analytics Solutions, Research & Development Solutions, and Contract Sales & Medical Solutions, each contributing to revenue growth[93] - Approximately 30% of revenues in the first nine months of 2025 were denominated in currencies other than the US dollar, impacting financial results due to exchange rate fluctuations[96] - The contracted backlog for Research & Development Solutions rose from $31.1 billion at the end of 2024 to $32.4 billion by September 30, 2025, with an expected $8.1 billion to convert to revenues in the next twelve months[128] - The company’s equity in earnings (losses) of unconsolidated affiliates showed a loss of $14 million for the first nine months of 2025, a decrease from the previous year[114] - The U.S. government's One Big Beautiful Bill Act is not expected to materially impact the company's consolidated financial statements for 2025[112] - There have been no material changes to critical accounting policies as previously disclosed in the 2024 Form 10-K[171] - The company does not have any material off-balance sheet arrangements[169]

Core Insights - IQVIA Holdings Analytics Inc. reported strong third-quarter 2025 results, with earnings and revenues exceeding the Zacks Consensus Estimate [1][9] - Adjusted earnings were $3 per share, a 5.6% increase year-over-year, while total revenues reached $4.1 billion, reflecting a 5.2% growth from the previous year [1][9] Financial Performance - The Research and Development segment generated revenues of $2.3 billion, up 4.5% year-over-year, surpassing the estimate of $2.2 billion [3] - Technology and Analytics segment revenues were $1.6 billion, growing 5% year-over-year, but fell short of the projected $1.7 billion [3] - Contract Sales and Medical Solutions revenues increased 16.1% year-over-year to $209 million, exceeding the estimate of $181.7 million [4] - Adjusted EBITDA for the quarter was $949 million, a 1.1% rise from the previous year, surpassing the anticipated $945.3 million [4] Cash Flow and Debt - The company ended the quarter with cash and cash equivalents of $1.8 billion, down from $2 billion in the previous quarter [5] - Long-term debt decreased to $15 billion from $15.4 billion at the end of the second quarter [5] - Net cash generated from operating activities was $908 million, with capital expenditures of $136 million, resulting in a free cash flow of $772 million for the quarter [5] 2025 Guidance - IQVIA updated its revenue guidance for 2025 to a range of $16.15-$16.25 billion, with the midpoint exceeding the Zacks Consensus Estimate of $16.16 billion [6] - The earnings per share outlook was revised to $11.85-$11.95, with the midpoint also above the consensus estimate of $11.86 [6] - Adjusted EBITDA guidance was updated to $3.775-$3.800 billion, reflecting a slight increase from the previous quarter's view [7]

Financial Data and Key Metrics Changes - The company reported third quarter revenue of $4.1 billion, reflecting a year-over-year growth of 5.2% on a reported basis and 3.9% at constant currency [16] - Adjusted EBITDA for the quarter was $949 million, representing a growth of 1.1% [17] - Third quarter adjusted diluted EPS was $3, an increase of 5.6% year over year [18] - Free cash flow reached a record high of $772 million for the quarter [19] Business Line Data and Key Metrics Changes - Technology and Analytics Solutions (TASS) revenue for the third quarter was $1.631 billion, up 5% reported and 3.3% at constant currency [16] - R&D Solutions revenue was $2.26 billion, growing 4.5% reported and 3.4% at constant currency [16] - Contract Sales and Medical Solutions (CSMS) revenue was $209 million, up 16.1% reported and 13.9% at constant currency [16] Market Data and Key Metrics Changes - Net bookings in the quarter totaled $2.6 billion, resulting in a net book-to-bill ratio of 1.15, with bookings up 13% year over year [22] - The backlog reached a record of $32.4 billion, showing growth of 4.1% compared to the prior year [18] - Biotech funding momentum reached $18 billion in Q3, indicating strong demand in the sector [6] Company Strategy and Development Direction - The company is focusing on expanding capabilities in Contract Sales and Medical Solutions, responding to a trend of large pharma clients outsourcing commercial operations [8] - The "see more, win more" strategy has been implemented to capture market segments previously overlooked, leading to improved RFP flows and bookings [26] - The company is investing in AI capabilities, with plans to develop 500 specialized AI agents by early 2027 to enhance operational efficiency and client service [99] Management's Comments on Operating Environment and Future Outlook - Management noted an improved industry backdrop and a reduction in market uncertainty, contributing to stronger client decision-making and demand [25] - The company reaffirmed its full-year 2025 guidance, expecting revenue growth of 4.8% to 5.5% [20] - Management expressed confidence that revenue growth in 2026 would be at least the same or better than the current year [32] Other Important Information - The CFO transition was announced, with Mike Fedock set to succeed Ron Bruehlman in February 2026 [13] - The company is seeing growing demand for phase one trials, indicating a shift in its operational focus [86] Q&A Session Summary Question: About the "see more, win more" strategy and its impact on RFP flows - Management indicated that the strategy has led to improved bookings momentum and a reduction in pricing competition, with a strong backlog supporting future revenue [25][27] Question: Expectations for business momentum into 2026 - Management refrained from providing specific guidance for 2026 but expressed confidence in maintaining or exceeding current growth rates [31][32] Question: Differences in performance between pharma and biotech segments - Management noted that large pharma has completed internal reprioritization, leading to stronger RFP flows and a healthier business environment [39] Question: Contributions from inorganic advancements in TASS - Management highlighted that most inorganic contributions are expected to come from TASS, with ongoing efforts to acquire technology companies to enhance capabilities [43][45] Question: Status of mega trials and their impact on guidance - Management confirmed that there are no changes to guidance due to the status of mega trials, which have been pushed out and are not factored into current revenue expectations [90][92] Question: Insights on AI's impact on customer business models and internal efficiencies - Management discussed the development of AI agents to improve operational efficiency and the potential for margin improvements in the long term [99][103]

Financial Data and Key Metrics Changes - The company reported third quarter revenue of $4.1 billion, reflecting a year-over-year growth of 5.2% on a reported basis and 3.9% at constant currency [16] - Adjusted EBITDA for the quarter was $949 million, representing a growth of 1.1% [17] - Third quarter adjusted diluted EPS was $3, an increase of 5.6% year-over-year [17] - Free cash flow reached a record high of $772 million for the quarter [19] Business Line Data and Key Metrics Changes - Technology and Analytics Solutions (TASS) revenue for the third quarter was $1.631 billion, up 5% reported and 3.3% at constant currency [16] - R&D Solutions revenue was $2.26 billion, growing 4.5% reported and 3.4% at constant currency [16] - Contract Sales and Medical Solutions (CSMS) revenue was $209 million, up 16.1% reported and 13.9% at constant currency [16] Market Data and Key Metrics Changes - Net bookings in the clinical segment totaled $2.6 billion, resulting in a net book-to-bill ratio of 1.15, with a year-over-year growth of 13% [22] - The backlog reached a record of $32.4 billion, showing growth of 4.1% compared to the prior year [18] - Biotech funding momentum reached $18 billion in Q3, indicating strong demand in the sector [5] Company Strategy and Development Direction - The company is focusing on expanding capabilities in commercial operations for established brands, capitalizing on trends in outsourcing by large pharma clients [7] - The "see more, win more" strategy has been implemented to target previously untouched markets, leading to improved RFP flows and bookings [26] - The company plans to develop 500 highly specialized AI agents by early 2027 to enhance operational efficiency and client service [103] Management's Comments on Operating Environment and Future Outlook - Management noted an improved industry backdrop and a reduction in market uncertainty, contributing to stronger bookings and client decision-making timelines [25] - The company expects to deliver over 5% top-line revenue growth for the year, with confidence in maintaining or exceeding this growth into 2026 [34] - Management highlighted that the reprioritization of large pharma programs has largely been completed, leading to a healthier business environment [40] Other Important Information - The CFO transition was announced, with Mike Fedock set to succeed Ron Bruehlman in February 2026 [13] - The company reaffirmed its full-year 2025 guidance, narrowing ranges for revenue, adjusted EBITDA, and adjusted diluted EPS [20] Q&A Session Summary Question: About the "see more, win more" strategy and its impact on RFP flows - Management indicated that the strategy has led to improved bookings momentum and a reduction in pricing competition, with a strong backlog supporting future revenue [25][28] Question: Expectations for business momentum into 2026 - Management expressed confidence that revenue growth in 2026 would be at least the same or better than the current year, although specific guidance for 2026 will be provided in early 2024 [34] Question: Differences in performance between pharma and biotech segments - Management noted that large pharma has completed internal reprioritization, leading to strong RFP flow growth, while biotech funding is improving, driving growth in the EBP segment [40] Question: Contributions from inorganic advancements in TASS - Management confirmed that inorganic contributions primarily come from TASS, with a recent acquisition expected to enhance capabilities in R&D Solutions [46] Question: Status of mega trials and their impact on guidance - Management clarified that there are no changes to guidance due to the status of mega trials, which have been pushed out and are not factored into current revenue projections [93] Question: Insights on AI's impact on customer business models and internal efficiencies - Management highlighted ongoing development of AI agents to improve operational efficiency and client service, with expectations for long-term margin improvements from these initiatives [103][107]

Financial Data and Key Metrics Changes - The company reported third quarter revenue of $4.1 billion, reflecting a year-over-year growth of 5.2% on a reported basis and 3.9% at constant currency [17] - Adjusted EBITDA for the quarter was $949 million, representing growth of 1.1% [18] - Third quarter adjusted diluted EPS was $3, an increase of 5.6% year over year [18] - Free cash flow reached a record high of $772 million for the quarter [20] Business Line Data and Key Metrics Changes - Technology and Analytics Solutions (TASS) revenue for the third quarter was $1.631 billion, up 5% reported and 3.3% at constant currency [17] - R&D Solutions revenue was $2.26 billion, growing 4.5% reported and 3.4% at constant currency [17] - Contract Sales and Medical Solutions (CSMS) revenue was $209 million, up 16.1% reported and 13.9% at constant currency [17] Market Data and Key Metrics Changes - Net bookings in the clinical segment totaled $2.6 billion, resulting in a net book-to-bill ratio of 1.15, with bookings up 13% year over year [24] - The backlog reached a record of $32.4 billion, showing growth of 4.1% compared to the prior year [19] - Biotech funding momentum reached $18 billion in Q3, indicating strong demand in the sector [5] Company Strategy and Development Direction - The company is focusing on expanding capabilities in commercial operations outsourcing, particularly for established brands in specific markets [8] - The "see more, win more" strategy has been implemented to target previously untouched markets, leading to improved RFP flows and bookings [28] - The company plans to develop 500 highly specialized AI agents by early 2027 to enhance operational efficiency and client service [72] Management's Comments on Operating Environment and Future Outlook - Management noted an improved industry backdrop and a reduction in market uncertainty, contributing to stronger demand and decision-making timelines [27] - The company expects to deliver over 5% top-line revenue growth for the year, with confidence in maintaining or improving growth in 2026 [32] - Management highlighted that the reprioritization of large pharma programs has largely been completed, leading to a more stable environment for future engagements [36] Other Important Information - The company confirmed its full-year 2025 guidance, narrowing ranges for revenue, adjusted EBITDA, and adjusted diluted EPS [21] - The CFO transition was announced, with Mike Fedock set to succeed Ron Bruehlman in February 2026 [14] Q&A Session Summary Question: Insights on the "see more, win more" strategy and its impact on RFP flows - Management indicated that the strategy has led to improved bookings momentum and a reduction in pricing competition, with a strong backlog mitigating any past pricing impacts [28][29] Question: Expectations for business momentum into 2026 - Management refrained from providing specific 2026 guidance but expressed confidence in maintaining or exceeding current growth rates based on improved market conditions [32] Question: Differences in dynamics between pharma and biotech - Management noted that large pharma has completed internal reprioritization, leading to strong RFP flow growth, while biotech funding is also improving, driving overall business growth [36][38] Question: Contributions from inorganic advancements in TASS - Management highlighted that recent acquisitions, particularly in oncology, are expected to contribute positively to revenue, with ongoing focus on technology and analytics capabilities [42] Question: Status of mega trials and phase one involvement - Management confirmed that there have been no changes in the status of mega trials, and the company is seeing increased demand for phase one work, expanding its presence in this area [61][68] Question: Impact of AI on customer business models and internal efficiencies - Management discussed the development of AI agents to improve operational efficiency and enhance client service, with expectations for long-term margin improvements from these initiatives [72]

Core Insights - IQVIA Holdings reported quarterly earnings of $3 per share, exceeding the Zacks Consensus Estimate of $2.96 per share, and showing an increase from $2.84 per share a year ago, resulting in an earnings surprise of +1.35% [1] - The company achieved revenues of $4.1 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.86% and reflecting a year-over-year increase from $3.9 billion [2] - IQVIA has consistently surpassed consensus EPS estimates over the last four quarters, indicating strong performance [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $3.40 on revenues of $4.24 billion, while for the current fiscal year, the estimate is $11.86 on revenues of $16.16 billion [7] - The trend of estimate revisions for IQVIA was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, suggesting expected underperformance in the near future [6] Industry Context - The Medical - Instruments industry, to which IQVIA belongs, is currently ranked in the top 37% of over 250 Zacks industries, indicating a favorable outlook compared to lower-ranked industries [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Q3 2025 Financial Performance - Revenue for Q3 2025 reached $4,100 million, a 5.2% increase AFx (actual foreign exchange rates) and 3.9% increase CFx (constant currency) compared to $3,896 million in Q3 2024[12] - Adjusted EBITDA for Q3 2025 was $949 million, a 1.1% increase AFx compared to $939 million in Q3 2024[12] - Adjusted Diluted EPS for Q3 2025 was $3.00, a 5.6% increase AFx compared to $2.84 in Q3 2024[12] - Net income attributable to IQVIA Holdings Inc was $331 million in Q3 2025, compared to $285 million in Q3 2024[31] Year-to-Date (YTD) Performance - YTD Revenue for 2025 reached $11,946 million, a 4.4% increase AFx and 3.7% increase CFx compared to $11,447 million in 2024[15] - YTD Adjusted EBITDA for 2025 was $2,742 million, compared to $2,688 million in 2024[17] - YTD Adjusted Diluted Earnings per Share was $8.50, compared to $8.02 in 2024[17] Segment Performance (Q3 2025) - Technology & Analytics Solutions revenue was $1,631 million, a 5.0% increase AFx compared to $1,554 million in Q3 2024[15] - Research & Development Solutions revenue was $2,260 million, a 4.5% increase AFx compared to $2,162 million in Q3 2024[15] - Contract Sales & Medical Solutions revenue was $209 million, a 16.1% increase AFx compared to $180 million in Q3 2024[15] R&D Solutions Bookings and Backlog - R&D Solutions backlog increased by 4.1% from $31.1 billion in Q3 2024 to $32.4 billion in Q3 2025[21] Balance Sheet and Cash Flow - Cash & Cash Equivalents totaled $1,814 million[23] - Free Cash Flow for Q3 2025 was $772 million[23] Full Year 2025 Guidance - The company projects full-year 2025 revenue between $16,150 million and $16,250 million[26] - The company projects full-year 2025 Adjusted EBITDA between $3,775 million and $3,800 million[26] - The company projects full-year 2025 Adjusted Diluted EPS between $11.85 and $11.95[26]

Core Viewpoint - IQVIA Holdings has narrowed its annual profit forecast, reducing the upper end of its outlook due to expected ongoing cancellations of research contracts from pharmaceutical clients [1] Company Summary - The company anticipates that the trend of contract cancellations will continue into the future, impacting its financial performance [1] Industry Summary - The pharmaceutical industry is facing challenges that are leading to a reduction in research contracts, which may affect companies like IQVIA Holdings that rely on these contracts for revenue [1]