IQVIA(US:IQV)2021-04-23 20:12markdown [PART I—FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company reported significant year-over-year growth for the first quarter of 2021, with revenues increasing to $3.41 billion from $2.75 billion and net income attributable to IQVIA rising to $212 million from $82 million. This performance was supported by strong cash flow from operations, which surged to $867 million. The balance sheet shows a healthy liquidity position with $2.31 billion in cash and cash equivalents as of March 31, 2021 [Condensed Consolidated Statements of Income](index=3&type=page&id=Condensed%20Consolidated%20Statements%20of%20Income) For the three months ended March 31, 2021, revenues grew 23.8% year-over-year to $3.41 billion. Net income attributable to IQVIA Holdings Inc. increased significantly to $212 million, or $1.09 per diluted share, compared to $82 million, or $0.42 per diluted share, in the prior-year period Q1 2021 vs Q1 2020 Income Statement Highlights | Metric | Q1 2021 (in millions) | Q1 2020 (in millions) | YoY Change | | :--- | :--- | :--- | :--- | | Revenues | $3,409 | $2,754 | +23.8% | | Income from operations | $342 | $193 | +77.2% | | Net income attributable to IQVIA | $212 | $82 | +158.5% | | Diluted EPS | $1.09 | $0.42 | +159.5% | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2021, total assets were $24.47 billion, a slight decrease from $24.56 billion at year-end 2020. Cash and cash equivalents increased to $2.31 billion from $1.81 billion. Total debt stood at $12.24 billion, down from $12.53 billion at the end of 2020 Balance Sheet Summary | Metric (in millions) | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $2,305 | $1,814 | | Total current assets | $5,579 | $5,090 | | Goodwill | $12,415 | $12,654 | | Total assets | $24,467 | $24,564 | | Long-term debt | $12,092 | $12,384 | | Total liabilities | $18,230 | $18,284 | | Total stockholders' equity | $6,237 | $6,280 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first three months of 2021, net cash provided by operating activities was $867 million, a substantial increase from $163 million in the same period of 2020. Net cash used in investing activities was $176 million, while net cash used in financing activities was $168 million, primarily due to debt repayments Cash Flow Summary (Three Months Ended March 31) | Cash Flow Activity (in millions) | 2021 | 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $867 | $163 | | Net cash used in investing activities | $(176) | $(150) | | Net cash (used in) provided by financing activities | $(168) | $107 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Key notes detail revenue recognition, debt refinancing, segment performance, and a significant subsequent event. The company generated $3.41 billion in revenue in Q1 2021, with the Americas being the largest region. As of March 31, 2021, remaining performance obligations were approximately $26.1 billion. In March 2021, the company issued €1.45 billion in new senior notes to redeem existing debt. Post-quarter, on April 1, 2021, IQVIA acquired the remaining 40% of Q² Solutions for $760 million Revenues by Segment and Geography (Q1 2021, in millions) | Region | Technology & Analytics | Research & Development | Contract Sales & Medical | Total | | :--- | :--- | :--- | :--- | :--- | | Americas | $600 | $1,034 | $78 | $1,712 | | Europe and Africa | $590 | $443 | $49 | $1,082 | | Asia-Pacific | $158 | $391 | $66 | $615 | | **Total** | **$1,348** | **$1,868** | **$193** | **$3,409** | - As of March 31, 2021, the company had approximately **$26.1 billion** in remaining performance obligations, with about **35%** expected to be recognized as revenue over the next 12 months[29](index=29&type=chunk) - On March 3, 2021, an IQVIA subsidiary issued **€1.45 billion** in new senior notes (1.750% due 2026 and 2.250% due 2029) and used the proceeds to redeem its outstanding 3.250% senior notes due 2025[47](index=47&type=chunk) - On April 1, 2021, the company acquired the remaining **40%** non-controlling interest in Q² Solutions from Quest Diagnostics for **$760 million** in cash, resulting in 100% ownership[61](index=61&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the 23.8% revenue growth in Q1 2021 to strong performance across its segments, particularly a 29.6% increase in Research & Development Solutions, driven by large COVID-19 vaccine clinical trials. Technology & Analytics Solutions also saw robust growth of 20.7%. The company's liquidity remains strong, with $2.3 billion in cash and $1.5 billion available under its revolving credit facility. A significant debt refinancing was completed in March 2021 to lower interest costs [Consolidated Results of Operations](index=21&type=section&id=Consolidated%20Results%20of%20Operations) Consolidated revenues for Q1 2021 increased by $655 million (23.8%) year-over-year, with constant currency growth of 21.4%. This was driven by a $405 million increase in Research & Development Solutions and a $191 million increase in Technology & Analytics Solutions. Costs of revenue rose by $469 million, in line with revenue growth. Selling, general and administrative expenses increased by $35 million, but decreased as a percentage of revenue from 14.8% to 13.0% Consolidated Revenue Change (Q1 2021 vs Q1 2020) | Metric | Amount (in millions) | Percentage | | :--- | :--- | :--- | | Total Revenue Increase | $655 | 23.8% | | Constant Currency Growth | $588 | 21.4% | - Selling, general and administrative expenses as a percentage of revenues decreased from **14.8%** in Q1 2020 to **13.0%** in Q1 2021[75](index=75&type=chunk) - A loss on extinguishment of debt of **$24 million** was recognized in Q1 2021 related to the refinancing of the 3.250% senior notes due 2025[80](index=80&type=chunk) [Segment Results of Operations](index=24&type=section&id=Segment%20Results%20of%20Operations) In Q1 2021, Technology & Analytics Solutions revenue grew 20.7% to $1.35 billion, with segment profit up 30.2%. Research & Development Solutions revenue surged 29.6% to $1.87 billion, driven by COVID-19 vaccine trials, with segment profit increasing 35.1%. Contract Sales & Medical Solutions revenue declined slightly by 1.5% to $193 million, but segment profit grew significantly by 81.8% due to cost management Segment Performance (Q1 2021 vs Q1 2020, in millions) | Segment | Revenue 2021 | Revenue 2020 | Revenue Growth | Profit 2021 | Profit 2020 | Profit Growth | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Technology & Analytics | $1,348 | $1,117 | 20.7% | $349 | $268 | 30.2% | | Research & Development | $1,868 | $1,441 | 29.6% | $362 | $268 | 35.1% | | Contract Sales & Medical | $193 | $196 | (1.5)% | $20 | $11 | 81.8% | - The Research & Development Solutions segment's contracted backlog increased from **$22.6 billion** at year-end 2020 to **$23.2 billion** as of March 31, 2021[91](index=91&type=chunk) [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity position is strong, with a cash balance of $2.31 billion at March 31, 2021. Operating cash flow for the quarter was a robust $867 million. In March 2021, the company issued €1.45 billion in new senior notes to refinance existing debt, aiming to reduce interest expense. Total indebtedness was $12.3 billion as of quarter-end, with an additional $1.5 billion available under the revolving credit facility. The company also repurchased $50.5 million of its common stock during the quarter - Cash balance was **$2,305 million** as of March 31, 2021, an increase from **$1,814 million** as of December 31, 2020[101](index=101&type=chunk) - Cash provided by operating activities increased significantly to **$867 million** in Q1 2021, compared to **$163 million** in Q1 2020, driven by higher collections and an increase in unearned income[107](index=107&type=chunk) - Total indebtedness was **$12.3 billion** as of March 31, 2021, with an additional **$1.5 billion** available under the revolving credit facility[106](index=106&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=29&type=page&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that there have been no material changes to its quantitative and qualitative disclosures about market risk compared to those described in its Annual Report on Form 10-K for the year ended December 31, 2020 - There have been no material changes to the company's market risk disclosures from the 2020 Form 10-K[113](index=113&type=chunk) [Item 4. Controls and Procedures](index=29&type=page&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2021. No material changes to the internal control over financial reporting were identified during the quarter - Based on an evaluation as of the end of the period, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[114](index=114&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[115](index=115&type=chunk) [PART II—OTHER INFORMATION](index=30&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=30&type=section&id=Item%201.%20Legal%20Proceedings) The company is party to legal proceedings incidental to its business but does not believe their resolution is reasonably likely to have a material adverse effect on its financial statements - The company does not expect ongoing legal proceedings to have a material adverse effect on its financial statements[117](index=117&type=chunk) [Item 1A. Risk Factors](index=30&type=page&id=Item%201A.%20Risk%20Factors) There have been no material changes from the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2020 - No material changes have been made to the risk factors disclosed in the 2020 Form 10-K[118](index=118&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=30&type=page&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the first quarter of 2021, the company repurchased 265,809 shares of its common stock for $50.5 million under its authorized Repurchase Program. As of March 31, 2021, approximately $0.9 billion remained available for future repurchases under the program Q1 2021 Share Repurchase Activity | Metric | Value | | :--- | :--- | | Shares Repurchased | 265,809 | | Total Cost | $50.5 million | | Average Price Paid Per Share | $189.95 | - As of March 31, 2021, the company has remaining authorization to repurchase up to approximately **$0.9 billion** of its common stock[123](index=123&type=chunk) [Item 6. Exhibits](index=32&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the quarterly report, including certifications by the CEO and CFO and interactive data files