IQVIA(US:IQV)2021-04-22 20:07Financial Data and Key Metrics Changes - Revenue for Q1 2021 grew 24% on a reported basis and 21% at constant currency, reaching $3.409 billion, exceeding guidance by $209 million [13][22] - Adjusted EBITDA increased by 32% to $744 million, with margins expanding by 140 basis points despite headwinds from higher pass-through revenue [24][35] - Adjusted diluted EPS rose 45% to $2.18, reflecting strong adjusted EBITDA drop-through [14][25] Business Line Data and Key Metrics Changes - Technology & Analytics Solutions (TAS) revenue was $1.348 billion, up 20.7% reported and 17.1% at constant currency [22] - R&D Solutions revenue improved by 29.6% at actual FX rates and 28.1% at constant currency, with pass-through revenues contributing 770 basis points to growth [23] - CSMS revenue decreased by 1.5% reported and 4.1% at constant currency, indicating challenges in this segment [24] Market Data and Key Metrics Changes - Contracted backlog in R&D Solutions grew 18.3% year-over-year to $23.2 billion, with next 12 months' revenue from backlog increasing by 31.1% to $6.5 billion [19][20] - The company noted pent-up demand across therapy areas due to trials being delayed or not started during the pandemic [11][12] Company Strategy and Development Direction - The company plans to update its Vision 2022 goals later in the year, reflecting on the strong performance and favorable market conditions [12] - The acquisition of Q Squared Solutions aims to enhance bioanalytical and genomic capabilities, positioning the company for growth in these areas [21][92] Management's Comments on Operating Environment and Future Outlook - Management highlighted that the pandemic has accelerated the adoption of new technologies, which will lead to lasting changes in drug development [10] - The outlook for the rest of the year has improved, prompting the company to raise its guidance for revenue and adjusted EBITDA [28][30] Other Important Information - The company achieved a net leverage ratio of 3.9 times trailing 12-month adjusted EBITDA, marking a significant improvement [26] - Free cash flow for the quarter was strong at $718 million, with a focus on improving cash flow management [27][116] Q&A Session Summary Question: Long-term guidance and M&A activity - Management indicated that long-term guidance will be updated later this year, reflecting the reset year of 2020 and the need for strategic planning [40][41] - Regarding M&A, the company is focused on acquiring capabilities that enhance its technology offerings, while also observing industry consolidation [42][43] Question: COVID-related trials and revenue impact - Management confirmed that COVID vaccine trials have significantly impacted revenue, contributing about half of the total company revenue growth in Q1 [52][56] Question: Real World evidence trends - The company reported strong double-digit growth in Real World evidence, with increasing demand for patient monitoring and data collection tools [69][70] Question: Hiring and wage inflation - Management acknowledged the challenges of hiring in a competitive labor market but noted that anticipated wage inflation is factored into guidance [105][107] Question: Free cash flow outlook - Management expects free cash flow to remain strong but noted that it can be lumpy and is influenced by various factors [116][117] Question: Backlog improvement and patient recruitment - The significant increase in next 12 months' backlog was attributed to improved patient recruitment and a strong pipeline of RFPs [122]