- Revenue of $2,895 million for the fourth quarter and $11,088
million for the full year
- Adjusted EBITDA of $642 million for the fourth quarter and
$2,400 million for the full year
- GAAP Diluted Earnings per Share of $0.09 for the fourth
quarter and $0.96 for the full year
- Adjusted Diluted Earnings per Share of $1.74 for the fourth
quarter, up 16.0 percent year over year, and $6.39 for the full
year, up 15.1 percent year over year
- R&D Solutions fourth quarter revenue growth was 8.1
percent at constant currency and 7.5 percent reported; services
growth on an organic constant currency basis was 10.0
percent
- R&D Solutions quarterly net book-to-bill ratio was
1.46x; next twelve months revenue from backlog increased to $5.2
billion
- Technology & Analytics Solutions fourth quarter revenue
growth was 9.0 percent at constant currency and 7.7 percent
reported; growth on an organic constant currency basis was 7.4
percent
- Full-year 2020 revenue guidance of $11,775 million to
$12,000 million, Adjusted EBITDA of $2,565 million to $2,620
million and Adjusted Diluted Earnings per Share of $7.15 to
$7.35
IQVIA Holdings Inc. (“IQVIA”) (NYSE:IQV), a leading global
provider of advanced analytics, technology solutions, and contract
research services to the life sciences industry, today reported
financial results for the quarter and year ended December 31,
2019.
Fourth-Quarter 2019 Operating Results Revenue for the
fourth quarter of $2,895 million increased 8.5 percent at constant
currency and 7.7 percent on a reported basis, compared to the
fourth quarter of 2018. Technology & Analytics Solutions (TAS)
revenue of $1,214 million grew 9.0 percent at constant currency and
7.7 percent reported. Research & Development Solutions
(R&DS) revenue of $1,471 million grew 8.1 percent at constant
currency, despite a negative impact from pass-throughs of
approximately 400 basis points, and 7.5 percent reported. Contract
Sales & Medical Solutions (CSMS) revenue of $210 million grew
8.3 percent at constant currency and 8.8 percent on a reported
basis.
Fourth-quarter 2019 Adjusted EBITDA was $642 million. GAAP net
income was $16 million, and GAAP diluted earnings per share was
$0.09. Adjusted Net Income was $343 million and Adjusted Diluted
Earnings per Share was $1.74, up 16.0 percent compared to the
fourth quarter of 2018.
“We closed 2019 with a strong quarter, and again delivered
results at, or above, our financial targets,” said Ari Bousbib,
chairman and CEO of IQVIA. “Technology & Analytics Solutions
added more significant wins in the quarter, including a landmark
deal for OCE deployment in the U.S. R&DS continued its strong
momentum, with outstanding new business wins and double-digit
organic services growth in the quarter. We are also pleased with
the ongoing turnaround of CSMS. As we exit the final year of our
three-year merger integration, our continued investments in
innovation position us well to support our top line growth in 2020
and beyond.”
Full-Year 2019 Operating Results Revenue of $11,088
million for the full year of 2019 increased 8.0 percent at constant
currency and 6.5 percent reported, compared to the full year of
2018. TAS revenue of $4,486 million grew 10.7 percent at constant
currency and 8.4 percent reported. R&DS revenue of $5,788
million grew 6.9 percent at constant currency and 5.9 percent
reported. CSMS revenue of $814 million grew 1.6 percent at constant
currency and 0.5 percent reported.
R&DS contracted backlog, including reimbursed expenses, grew
11.1 percent year-over-year to $19.0 billion at December 31, 2019.
The company expects approximately $5.2 billion of this backlog to
convert to revenue in the next twelve months. The fourth-quarter
contracted net book-to-bill ratio was 1.46x both including and
excluding reimbursed expenses. For the full year of 2019, the
contracted net book-to-bill ratio was 1.34x excluding reimbursed
expenses and 1.33x including reimbursed expenses.
Adjusted EBITDA for the full year of 2019 was $2,400 million.
GAAP net income was $191 million and GAAP diluted earnings per
share was $0.96. Adjusted Net Income was $1,276 million and
Adjusted Diluted Earnings per Share was $6.39, up 15.1 percent
compared to the full year of 2018.
Financial Position As of December 31, 2019, cash and cash
equivalents were $837 million and debt was $11,645 million,
resulting in net debt of $10,808 million. At the end of the fourth
quarter of 2019, IQVIA’s Net Leverage Ratio was 4.5x trailing
twelve month Adjusted EBITDA.
Share Repurchase During the fourth quarter of 2019, the
company repurchased $255 million of its common stock, resulting in
full-year 2019 share repurchases of $945 million. IQVIA had
approximately $1.3 billion of share repurchase authorization
remaining as of December 31, 2019.
Full-Year and First-Quarter 2020 Guidance IQVIA expects
full-year 2020 revenue between $11,775 million and $12,000 million,
Adjusted EBITDA between $2,565 million and $2,620 million and
Adjusted Diluted Earnings per Share between $7.15 and $7.35. The
company has evaluated to the best of its ability the potential
impact of the coronavirus outbreak, and this guidance includes an
estimated revenue impact of $25 million, most of which is expected
to drop to profit and all of which is assumed to occur in the first
quarter. IQVIA expects first-quarter 2020 revenue between $2,790
million and $2,840 million, Adjusted EBITDA between $595 million
and $610 million and Adjusted Diluted Earnings per Share between
$1.59 and $1.65.
Full-year and first-quarter financial guidance assumes foreign
currency exchange rates as of February 7, 2020, remain in effect
for the remainder of the year. The strengthening of the U.S. Dollar
since January 1, 2020 represented a headwind of approximately $80
million to full-year 2020 revenue and approximately $20 million to
first-quarter 2020 revenue, which are included in the above
guidance.
Webcast & Conference Call Details IQVIA will host a
conference call at 9:00 a.m. Eastern Time today to discuss its
fourth-quarter and full-year 2019 financial results and provide
full-year and first-quarter 2020 guidance. To participate, please
dial 1-800-672-1506 in the United States and Canada or
+1-303-223-4366 outside the United States approximately 15 minutes
before the scheduled start of the call. The conference call and a
presentation will be accessible live via webcast on the Investors
section of the IQVIA website at http://ir.iqvia.com. An archived
replay of the webcast will be available online at
http://ir.iqvia.com after 1:00 p.m. Eastern Time today.
About IQVIA IQVIA (NYSE:IQV) is a leading global provider
of advanced analytics, technology solutions and contract research
services to the life sciences industry. Formed through the merger
of IMS Health and Quintiles, IQVIA applies human data science —
leveraging the analytic rigor and clarity of data science to the
ever-expanding scope of human science — to enable companies to
reimagine and develop new approaches to clinical development and
commercialization, speed innovation and accelerate improvements in
healthcare outcomes. Powered by the IQVIA CORE™, IQVIA delivers
unique and actionable insights at the intersection of large-scale
analytics, transformative technology and extensive domain
expertise, as well as execution capabilities. With approximately
67,000 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 behaviors and
scientific advances, in an effort to advance their path toward
cures. To learn more, visit www.iqvia.com.
Cautionary Statements Regarding Forward-Looking
Statements This 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 full-year 2020 and first-quarter
2020 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,”
“anticipate,” “intend,” “plan,” “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: 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; 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; hardware and software
failures, delays in the operation of our computer and
communications systems or the failure to implement system
enhancements; 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; 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; 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 the combined company’s business, see the “Risk Factors” in our
annual report on Form 10-K for the fiscal year ended December 31,
2018, filed with 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 Measures Non-GAAP results,
such as Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted
EPS 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. Definitions and reconciliations of non-GAAP measures to the
most directly comparable GAAP measures are provided within the
schedules attached to this release. 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.
Our full-year and first-quarter 2020 guidance measures (other
than revenue) are provided on a non-GAAP basis because the company
is unable to reasonably predict certain items contained in the GAAP
measures. Such items include, but are not limited to, acquisition
and integration related expenses, restructuring and related
charges, 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
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Table 1
IQVIA HOLDINGS INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
INCOME
(in millions, except per share
data)
(preliminary and unaudited)
Three Months
Ended
Twelve Months
Ended
December 31,
December 31,
2019
2018
2019
2018
Revenues
$
2,895
$
2,688
$
11,088
$
10,412
Costs of revenue, exclusive of depreciation and amortization
1,901
1,742
7,300
6,746
Selling, general and administrative expenses
484
443
1,734
1,716
Depreciation and amortization
314
294
1,202
1,141
Restructuring costs
30
2
75
68
Income from operations
166
207
777
741
Interest income
(2
)
(3
)
(9
)
(8
)
Interest expense
109
106
447
414
Loss on extinguishment of debt
—
—
24
2
Other (income) expense, net
(37
)
—
(37
)
5
Income before income taxes and equity in
earnings of
unconsolidated affiliates
96
104
352
328
Income tax expense
68
30
116
59
Income before equity in earnings of
unconsolidated
affiliates
28
74
236
269
Equity in (losses) earnings of unconsolidated affiliates
(8
)
2
(9
)
15
Net income
20
76
227
284
Net income attributable to non-controlling interests
(4
)
(7
)
(36
)
(25
)
Net income attributable to IQVIA Holdings
Inc.
$
16
$
69
$
191
$
259
Earnings per share attributable to common stockholders:
Basic
$
0.09
$
0.35
$
0.98
$
1.27
Diluted
$
0.09
$
0.34
$
0.96
$
1.24
Weighted average common shares outstanding:
Basic
192.6
199.5
195.1
203.7
Diluted
197.1
204.1
199.6
208.2
Table 2
IQVIA HOLDINGS INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(in millions, except per share
data)
(preliminary and unaudited)
December 31,
December 31,
2019
2018
ASSETS Current assets: Cash and cash
equivalents
$
837
$
891
Trade accounts receivable and unbilled services, net
2,582
2,394
Prepaid expenses
138
151
Income taxes receivable
56
69
Investments in debt, equity and other securities
62
47
Other current assets and receivables
451
322
Total current assets
4,126
3,874
Property and equipment, net
458
434
Operating lease right-of-use assets
496
— Investments in debt, equity and other securities
65
41
Investments in unconsolidated affiliates
87
101
Goodwill
12,159
11,800
Other identifiable intangibles, net
5,514
5,951
Deferred income taxes
119
109
Deposits and other assets
227
239
Total assets
$
23,251
$
22,549
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities: Accounts payable
and accrued expenses
$
2,512
$
2,295
Unearned income
1,014
1,007
Income taxes payable
108
100
Current portion of long-term debt
100
100
Other current liabilities
211
32
Total current liabilities
3,945
3,534
Long-term debt, less current portion
11,545
10,907
Deferred income taxes
646
736
Operating lease liabilities
396
— Other liabilities
456
418
Total liabilities
16,988
15,595
Commitments and contingencies Stockholders’ equity:
Common stock and additional paid-in capital, 400.0 shares
authorized at December 31, 2019 and 2018, $0.01 par
value, 253.0 shares issued and 192.3 shares outstanding
at December 31, 2019; 251.5 shares issued and 197.5 shares
outstanding at December 31, 2018, respectively
11,049
10,901
Retained earnings
998
807
Treasury stock, at cost, 60.7 and 54.0 shares at December
31, 2019 and December 31, 2018,
respectively
(5,733
)
(4,770
)
Accumulated other comprehensive loss
(311
)
(224
)
Equity attributable to IQVIA Holdings
Inc.’s stockholders
6,003
6,714
Non-controlling interests
260
240
Total stockholders’ equity
6,263
6,954
Total liabilities and stockholders’ equity
$
23,251
$
22,549
Table 3
IQVIA HOLDINGS INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(in millions)
(preliminary and unaudited)
Twelve Months
Ended
December 31,
2019
2018
Operating activities: Net income
$
227
$
284
Adjustments to reconcile net income to cash provided by operating
activities: Depreciation and amortization
1,202
1,141
Amortization of debt issuance costs and discount
13
11
Stock-based compensation
146
113
Loss on disposals of property and equipment, net
1
—
Loss/(Earnings) from unconsolidated affiliates
9
(15
)
(Gain)/Loss on investments, net
(43
)
3
Benefit from deferred income taxes
(157
)
(177
)
Changes in operating assets and liabilities: Accounts
receivable, unbilled services and unearned income
(124
)
(290
)
Other operating assets and liabilities
143
184
Net cash provided by operating activities
1,417
1,254
Investing activities: Acquisition of property,
equipment and software
(582
)
(459
)
Net cash paid for acquisition of businesses
(588
)
(309
)
Purchase of marketable securities, net
(3
)
(4
)
Investments in unconsolidated affiliates, net of payments received
—
(17
)
Investments in equity securities
(22
)
(23
)
Other
5
2
Net cash used in investing activities
(1,190
)
(810
)
Financing activities: Proceeds from issuance
of debt
1,900
1,631
Payment of debt issuance costs
(47
)
(22
)
Repayment of debt
(899
)
(732
)
Proceeds from revolving credit facility
2,522
2,445
Repayment of revolving credit facility
(2,776
)
(2,329
)
Proceeds related to employee stock option plans
11
15
Repurchase of common stock
(949
)
(1,405
)
Distributions to non-controlling interest, net
(18
)
(31
)
Contingent consideration and deferred purchase price payments
(20
)
(24
)
Net cash used in financing activities
(276
)
(452
)
Effect of foreign currency exchange rate changes on cash
(5
)
(60
)
Decrease in cash and cash equivalents
(54
)
(68
)
Cash and cash equivalents at beginning of period
891
959
Cash and cash equivalents at end of period
$
837
$
891
Table 4
IQVIA HOLDINGS INC. AND
SUBSIDIARIES
NET INCOME TO ADJUSTED EBITDA
RECONCILIATION
(in millions)
(preliminary and unaudited)
Three Months Ended
Twelve Months
Ended
December 31,
December 31,
2019
2018
2019
2018
Net Income Attributable to IQVIA Holdings Inc.
$
16
$
69
$
191
$
259
Provision for income taxes
68
30
116
59
Depreciation and amortization
314
294
1,202
1,141
Interest expense, net
107
103
438
406
Loss (income) in unconsolidated affiliates
8
(2
)
9
(15
)
Income from non-controlling interests
4
7
36
25
Deferred revenue purchasing accounting adjustments
2
1
10
7
Stock-based compensation
59
35
146
113
Other (income) expense, net
(29
)
—
(6
)
27
Loss on extinguishment of debt — —
24
2
Restructuring and related charges
32
2
77
68
Acquisition related charges
19
12
56
50
Integration related costs
42
32
101
82
Adjusted EBITDA
$
642
$
583
$
2,400
$
2,224
Table 5
IQVIA HOLDINGS INC. AND
SUBSIDIARIES
NET INCOME TO ADJUSTED NET
INCOME RECONCILIATION
(in millions, except per share
data)
(preliminary and unaudited)
Three Months Ended
Twelve Months
Ended
December 31,
December 31,
2019
2018
2019
2018
Net Income Attributable to IQVIA Holdings Inc.
$
16
$
69
$
191
$
259
Provision for income taxes
68
30
116
59
Purchase accounting amortization (1)
238
212
914
863
Loss (income) in unconsolidated affiliates
8
(2
)
9
(15
)
Income from non-controlling interests
4
7
36
25
Deferred revenue purchasing accounting adjustments
2
1
10
7
Stock-based compensation
59
35
146
113
Other (income) expense, net
(29
)
—
(6
)
27
Loss on extinguishment of debt — —
24
2
Royalty hedge gain —
2
6
— Restructuring and related charges
32
2
77
68
Acquisition related charges
19
12
56
50
Integration related costs
42
32
101
82
Adjusted Pre Tax Income
$
459
$
400
$
1,680
$
1,540
Adjusted tax expense
(109
)
(84
)
(359
)
(350
)
Income from non-controlling interests
(4
)
(7
)
(36
)
(25
)
Minority interest effect in non-GAAP adjustments (2)
(3
)
(2
)
(9
)
(9
)
Adjusted Net Income
$
343
$
307
$
1,276
$
1,156
Adjusted earnings per share
attributable to common stockholders:
Basic
$
1.78
$
1.54
$
6.54
$
5.68
Diluted
$
1.74
$
1.50
$
6.39
$
5.55
Weighted-average common shares outstanding:
Basic
192.6
199.5
195.1
203.7
Diluted
197.1
204.1
199.6
208.2
(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.
Table 6
IQVIA HOLDINGS INC. AND
SUBSIDIARIES
CALCULATION OF GROSS AND NET
LEVERAGE RATIOS
AS OF DECEMBER 31,
2019
(in millions)
(preliminary and unaudited)
Gross Debt, net of Original Issue Discount, as of December 31, 2019
$
11,645
Net Debt as of December 31, 2019
$
10,808
Adjusted EBITDA for the year ended December 31, 2019
$
2,400
Gross Leverage Ratio (Gross Debt/LTM Adjusted EBITDA)
4.9x
Net Leverage Ratio (Net Debt/LTM Adjusted EBITDA)
4.5x
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200212005256/en/
Andrew Markwick, IQVIA Investor Relations
(andrew.markwick@iqvia.com) +1.973.257.7144
Tor Constantino, IQVIA Media Relations
(tor.constantino@iqvia.com) +1.484.567.6732
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