IQVIA(US:IQV)2022-04-27 18:28Financial Data and Key Metrics Changes - Revenue for Q1 2022 grew 4.7% on a reported basis and 6.8% at constant currency, with a $23 million beat above the midpoint of guidance driven by strong operational performance across all segments [21][34] - Adjusted EBITDA grew 9.1%, reflecting revenue growth and ongoing productivity initiatives, while adjusted diluted EPS of $2.47 grew 13.3% [23][37] - COVID-related revenues were approximately $375 million, down about 35% compared to Q1 2021, with core businesses growing about 13% at constant currency on an organic basis [34][35] Business Line Data and Key Metrics Changes - Technology and Analytic Solutions revenue was $1,439 million, up 6.8% reported and 9.8% at constant currency, with organic growth at constant currency exceeding 10% [35] - R&D Solutions revenue was $1,934 million, up 3.5% at actual FX rates and 4.7% at constant currency, with organic growth at constant currency around 17% [35] - Contract Sales and Medical Solutions revenue was $195 million, growing 1% reported and 5.7% at constant currency, with mid-single digits organic growth at constant currency [36] Market Data and Key Metrics Changes - The company reported a record contracted backlog in R&D Solutions of $25.3 billion, growing 9.1% year-over-year, with next 12 months revenue from backlog increasing to over $7 billion, growing 8% from a year ago [32][38] - Clinical trials started up 7% in Q1 compared to last year, with a 14% increase in oncology trial starts, indicating strong market demand [17] Company Strategy and Development Direction - The company is focusing on leveraging its connected intelligence framework to support the emerging needs of the pharma industry, including a multiyear agreement with Argenx for rare disease product development [24][25] - The company aims to maintain a low leverage ratio while pursuing aggressive share repurchases, with over $403 million repurchased in Q1 [40][66] - The company is cautious about M&A activities, looking for strategic acquisitions that add capabilities or allow entry into adjacent markets, while being selective due to high valuations [83][86] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying business despite macroeconomic challenges, maintaining full-year 2022 profit guidance [46][41] - The company anticipates a revenue disruption from the Russia-Ukraine crisis estimated at $40 million to $50 million, primarily front-loaded in the year [41][51] - Management noted that the labor market remains competitive, but they are actively recruiting and managing attrition effectively [70][72] Other Important Information - The company was named the top CRO in overall reputation by clinical trial sites globally, reflecting strong performance in decentralized trials and patient recruitment [33] - The company has established a free online service for medical professionals to assist with the refugee crisis resulting from the Ukraine conflict [10] Q&A Session Summary Question: Impact of Russia-Ukraine on Q1 and annual projections - Management indicated that the impact in Q1 was minimal, with a projected annual impact of $40 million to $50 million, likely front-loaded in the year [50][51] Question: Revenue and profitability pacing - Management confirmed that the underlying business is consistent and strong, with expected organic growth rates in line with guidance [60][62] Question: Labor trends and management - Management acknowledged competitive labor trends but noted effective recruitment strategies and increased employee satisfaction due to high bonus payouts [70][74] Question: Real world evidence business growth - Management reported strong growth in the real world evidence segment, expecting continued double-digit growth despite the decline in COVID-related work [78][79] Question: M&A strategy and market conditions - Management remains cautious about M&A, focusing on strategic acquisitions that are accretive and necessary, while being selective due to high valuations [83][86]