IQVIA Reports Third-Quarter 2020 Results, Raises Full-Year .
Contacts:Andrew Markwick, IQVIA Investor Relations (andrew.markwick@iqvia.com) 1.973.257.7144Tor Constantino, IQVIA Media Relations (tor.constantino@iqvia.com) 1.484.567.6732IQVIA Reports Third-Quarter 2020 Results, Raises Full-Year 2020Guidance and Provides 2021 Outlook Third quarter revenue of 2,786 million and Adjusted EBITDA of 604 millionGAAP Diluted Earnings per Share of 0.52 and Adjusted Diluted Earnings per Share of 1.63Technology & Analytics Solutions revenue grew 10.2 percent reported and 9.2 percent on aconstant currency basisR&D Solutions quarterly net book-to-bill ratio was 1.71x; next twelve months revenue frombacklog increased over 400 million to 5.8 billionFull-year 2020 guidance raised for revenue, Adjusted EBITDA and Adjusted Diluted EPSFull-year 2021 outlook for revenue 12,300 million to 12,600 million, Adjusted EBITDA 2,725million to 2,800 million and Adjusted Diluted EPS 7.65 to 7.95Company to resume share repurchase programDANBURY, Conn. & RESEARCH TRIANGLE PARK, N.C. October 20, 2020 – IQVIA Holdings Inc.(“IQVIA”) (NYSE:IQV), a leading global provider of advanced analytics, technology solutions, and clinicalresearch services to the life sciences industry, today reported financial results for the quarter endedSeptember 30, 2020.Third-Quarter 2020 Operating ResultsRevenue for the third quarter of 2,786 million increased 0.6 percent on a reported basis and was lower by0.1 percent at constant currency, compared to the third quarter of 2019. Technology & Analytics Solutions(TAS) revenue of 1,207 million grew 10.2 percent reported and 9.2 percent on a constant currency basis.Research & Development Solutions (R&DS) revenue of 1,400 million was lower by 4.5 percent on areported basis and by 5.1 percent at constant currency. Excluding the impact of pass throughs, R&DSrevenue grew 2.6 percent year-over-year on a reported basis. Contract Sales & Medical Solutions (CSMS)revenue of 179 million was lower by 13.9 percent on a reported basis and by 14.4 percent at constantcurrency.R&DS contracted backlog, including reimbursed expenses, grew 18.5 percent year-over-year to 21.7 billionat September 30, 2020. The company expects approximately 5.8 billion of this backlog to convert torevenue in the next twelve months, up from 5.4 billion at June 30, 2020. The third quarter contracted netbook-to-bill ratio was 1.71x including reimbursed expenses and 1.42x excluding reimbursed expenses. Forthe last twelve months ended September 30, 2020, the contracted net book-to-bill ratio was 1.55x includingreimbursed expenses and 1.45x excluding reimbursed expenses.1
Third-quarter 2020 Adjusted EBITDA was 604 million, up 1.9 percent compared to the third quarter of 2019.GAAP net income was 101 million, and GAAP diluted earnings per share was 0.52. Adjusted Net Incomewas 318 million and Adjusted Diluted Earnings per Share was 1.63, up 1.9 percent compared to the thirdquarter of 2019.“The IQVIA team continues to execute well in the current environment, once again delivering results aboveour financial targets, with revenue and profit metrics turning positive in the third quarter,” said Ari Bousbib,chairman and CEO of IQVIA. “TAS has already returned to pre-COVID growth rates and R&DS is expectedto reach double-digit growth in the fourth quarter. Demand remains robust, as evidenced by another recordquarter of bookings in R&DS, setting the stage for an excellent 2021.”Year-to-Date 2020 Operating ResultsRevenue of 8,061 million for the first nine months of 2020 was lower by 1.6 percent reported and by 1.2percent at constant currency, compared to the first nine months of 2019. TAS revenue of 3,433 million grew4.9 percent reported and 5.6 percent at constant currency. R&DS revenue of 4,076 million was lower by 5.6percent reported and by 5.4 percent at constant currency. CSMS revenue of 552 million was lower by 8.6percent reported and by 8.3 percent at constant currency.Adjusted EBITDA for the first nine months of 2020 was 1,649 million. GAAP net income was 160 millionand GAAP diluted earnings per share was 0.82. Adjusted Net Income was 841 million and AdjustedDiluted Earnings per Share was 4.32.Financial PositionAs of September 30, 2020, cash and cash equivalents were 1,464 million and debt was 12,339 million,resulting in net debt of 10,875 million. At the end of the third quarter of 2020, IQVIA’s Net Leverage Ratiowas 4.7x trailing twelve month Adjusted EBITDA.Share RepurchaseWhen the COVID-19 outbreak became a pandemic in March, the company temporarily suspended sharerepurchase activity. Based on the company’s performance during the pandemic, continued robust demandfor its offerings, solid liquidity, and strong free cash flow performance, IQVIA is today lifting the temporarysuspension of its share repurchase program. As of September 30, 2020, the company had approximately 1.0 billion of share repurchase authorization remaining.Full-Year 2020 GuidanceFor the full year of 2020, the company is raising its guidance ranges as follows:( in millions, except per share data)RevenueAdjusted EBITDAAdjusted Diluted EPSUpdated 11,100 - 11,250Prior(1) 11,000 - 11,100 2,335 - 2,360 2,295 - 2,345 6.25 - 6.35 6.10 - 6.30(1) Provided on Q2 2020 earnings call on July 22, 20202
Fourth-Quarter 2020 GuidanceFor the fourth quarter of 2020, the company is providing guidance as follows:( in millions, except per share data)RevenueGuidance 3,040 - 3,190Growth vs. Prior Year5.0% - 10.2%Adjusted EBITDA 685 - 7106.7% - 10.6%Adjusted Diluted EPS 1.93 - 2.0310.9% - 16.7%Guidance for the fourth quarter and full year of 2020 assumes that business conditions will continue toimprove and that localized flare ups of COVID-19 will not have a material impact to fourth quarter results.Full-Year 2021 OutlookFor the full year of 2021, the company expects revenue of between 12,300 million and 12,600 million,Adjusted EBITDA of between 2,725 million and 2,800 million, and Adjusted Diluted Earnings per Share ofbetween 7.65 and 7.95. The company will provide more detailed full-year 2021 guidance on its fourthquarter earnings results call in mid-February 2021.The company has developed this outlook based on the general assumption of continued recovery and returnto normal business conditions in 2021. The company further assumes that there will not be another globalwave of COVID-19 infection that would lead to public health policy decisions that could cause widespreadbusiness and healthcare disruptions, hampering the progress of sites reopening, patients returning to trials orother face-to-face interactions that are important to our business.All financial guidance assumes foreign currency exchange rates at September 30, 2020 remain in effect forthe periods forecasted.Webcast & Conference Call DetailsIQVIA will host a conference call at 9:00 a.m. Eastern Time today to discuss its third quarter 2020 results andfull-year 2020 and 2021 guidance. To listen to the event and view the presentation slides via webcast, joinfrom the IQVIA Investor Relations website at http://ir.iqvia.com. To participate in the conference call,interested parties must register in advance by clicking on this link. Following registration, participants willreceive a confirmation email containing details on how to join the conference call, including the dial-in and aunique passcode and registrant ID. At the time of the live event, registered participants connect to the callusing the information provided in the confirmation email and will be placed directly into the call.About IQVIAIQVIA (NYSE:IQV) is a leading global provider of advanced analytics, technology solutions and clinicalresearch 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 everexpanding scope of human science — to enable companies to reimagine and develop new approaches toclinical development and commercialization, speed innovation and accelerate improvements in healthcareoutcomes. Powered by the IQVIA CORE , IQVIA delivers unique and actionable insights at the intersectionof large-scale analytics, transformative technology and extensive domain expertise, as well as executioncapabilities. With approximately 68,000 employees, IQVIA conducts operations in more than 100 countries.3
IQVIA is a global leader in protecting individual patient privacy. The company uses a wide variety of privacyenhancing technologies and safeguards to protect individual privacy while generating and analyzinginformation on a scale that helps healthcare stakeholders identify disease patterns and correlate with theprecise treatment path and therapy needed for better outcomes. IQVIA’s insights and execution capabilitieshelp biotech, medical device and pharmaceutical companies, medical researchers, government agencies,payers and other healthcare stakeholders tap into a deeper understanding of diseases, human behaviorsand scientific advances, in an effort to advance their path toward cures. To learn more, visit www.iqvia.com.Cautionary Statements Regarding Forward-Looking StatementsThis 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 SecuritiesExchange Act of 1934, as amended, including, without limitation, our fourth quarter 2020 and full-year 2020and 2021 guidance. In this context, forward-looking statements often address expected future business andfinancial performance and financial condition, and often contain words such as “expect,” “assume,”“anticipate,” “intend,” “plan,” “forecast,” “believe,” “seek,” “see,” “will,” “would,” “target,” similar expressions,and variations or negatives of these words. Actual results may differ materially from our expectations due toa number of factors, including, but not limited to, the following: business disruptions caused by naturaldisasters, pandemics such as the COVID-19 (coronavirus) outbreak and the public health policy responsesto the outbreak, international conflicts or other disruptions outside of our control; our ability to accuratelymodel or forecast the impact of the spread and/or containment of COVID-19, among other sources ofbusiness interruption, on our operations and financial results; most of our contracts may be terminated onshort notice, and we may lose or experience delays with large client contracts or be unable to enter into newcontracts; the market for our services may not grow as we expect; we may be unable to successfully developand market new services or enter new markets; imposition of restrictions on our use of data by data suppliersor their refusal to license data to us; any failure by us to comply with contractual, regulatory or ethicalrequirements under our contracts, including current or changes to data protection and privacy laws; breachesor misuse of our or our outsourcing partners’ security or communications systems; failure to meet ourproductivity or business transformation objectives; failure to successfully invest in growth opportunities; ourability to protect our intellectual property rights and our susceptibility to claims by others that we are infringingon their intellectual property rights; the expiration or inability to acquire third party licenses for technology orintellectual property; any failure by us to accurately and timely price and formulate cost estimates forcontracts, or to document change orders; hardware and software failures, delays in the operation of ourcomputer and communications systems or the failure to implement system enhancements; the rate at whichour backlog converts to revenue; our ability to acquire, develop and implement technology necessary for ourbusiness; consolidation in the industries in which our clients operate; risks related to client or therapeuticconcentration; government regulators or our customers may limit the scope of prescription or withdrawproducts from the market, and government regulators may impose new regulatory requirements or mayadopt new regulations affecting the biopharmaceutical industry; the risks associated with operating on aglobal basis, including currency or exchange rate fluctuations and legal compliance, including anti-corruptionlaws; risks related to changes in accounting standards; general economic conditions in the markets in whichwe operate, including financial market conditions and risks related to sales to government entities; the impactof changes in tax laws and regulations; our ability to successfully integrate, and achieve expected benefitsfrom, our acquired businesses; and risks and uncertainty associated with providing guidance and forecastsearlier than is our customary practice. For a further discussion of the risks relating to the combinedcompany’s business, see the “Risk Factors” in our annual report on Form 10-K for the fiscal year endedDecember 31, 2019, filed with the SEC, as such factors may be amended or updated from time to time in oursubsequent periodic and other filings with the SEC, which are accessible on the SEC’s website atwww.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction withthe other cautionary statements that are included in this release and in our filings with the SEC. We assumeno obligation to update any such forward-looking statement after the date of this release, whether as a resultof new information, future developments or otherwise.Note on Non-GAAP Financial MeasuresNon-GAAP results, such as Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS arepresented only as a supplement to the company’s financial statements based on GAAP. Non-GAAP financialinformation is provided to enhance understanding of the company’s financial performance, but none of thesenon-GAAP financial measures are recognized terms under GAAP, and non-GAAP measures should not beconsidered in isolation from, or as a substitute analysis for, the company’s results of operations as4
determined in accordance with GAAP. Definitions and reconciliations of non-GAAP measures to the mostdirectly comparable GAAP measures are provided within the schedules attached to this release. Thecompany uses non-GAAP measures in its operational and financial decision making, and believes that it isuseful to exclude certain items in order to focus on what it regards to be a more meaningful indicator of theunderlying operating performance of the business. For example, the Company excludes all the amortizationof intangible assets associated with acquired customer relationships and backlog, databases, non-competeagreements and trademarks, trade names and other from non-GAAP expense and income measures assuch amounts can be significantly impacted by the timing and size of acquisitions. Although we excludeamortization of acquired intangible assets from our non-GAAP expenses, we believe that it is important forinvestors to understand that revenue generated from such intangibles is included within revenue indetermining net income attributable to IQVIA Holdings Inc. As a result, internal management reports featurenon-GAAP measures which are also used to prepare strategic plans and annual budgets and reviewmanagement compensation. The company also believes that investors may find non-GAAP financialmeasures useful for the same reasons, although investors are cautioned that non-GAAP financial measuresare not a substitute for GAAP disclosures.Our full-year 2020 and 2021 guidance measures (other than revenue) are provided on a non-GAAP basisbecause the company is unable to reasonably predict certain items contained in the GAAP measures. Suchitems include, but are not limited to, acquisition and integration related expenses, restructuring and relatedcharges, 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 intheir evaluation of companies comparable to the company, many of which present non-GAAP measureswhen reporting their results. Non-GAAP measures have limitations as an analytical tool. They are notpresentations made in accordance with GAAP, are not measures of financial condition or liquidity and shouldnot be considered as an alternative to profit or loss for the period determined in accordance with GAAP oroperating cash flows determined in accordance with GAAP. Non-GAAP measures are not necessarilycomparable to similarly titled measures used by other companies. As a result, you should not consider suchperformance measures in isolation from, or as a substitute analysis for, the company’s results of operationsas determined in accordance with GAAP.IQVIAFIN# # #5
Table 1IQVIA HOLDINGS INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF INCOME(preliminary and unaudited)(in millions, except per share data)RevenuesCosts of revenue, exclusive of depreciation andamortization 202020202,7862019 2,769 8,0612019 1)179925648 1053108(7)101 70(1)69(12)57 1708178(18)160 208(1)207(32)175 0.530.52 0.290.29 0.840.82 0.890.87Income from operationsInterest incomeInterest expenseLoss on extinguishment of debtOther income, netIncome before income taxes and equity in earningsof unconsolidated affiliatesIncome tax (benefit) expenseIncome before equity in earnings of unconsolidatedaffiliatesEquity in earnings (loss) of unconsolidated affiliatesNet incomeNet income attributable to non-controlling interestsEarnings per share attributable to commonstockholders:BasicDilutedWeighted average common shares outstanding:BasicDilutedNine Months EndedSeptember 30,1,80046031920187(1)100—(14)Selling, general and administrative expensesDepreciation and amortizationRestructuring costsNet income attributable to IQVIA Holdings Inc.Three Months EndedSeptember 30,191.3194.9194.5199.0191.3194.9195.9200.56
Table 2IQVIA HOLDINGS INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(preliminary and unaudited)(in millions, except per share data)ASSETSCurrent assets:Cash and cash equivalentsTrade accounts receivable and unbilled services, netPrepaid expensesIncome taxes receivableInvestments in debt, equity and other securitiesOther current assets and receivablesTotal current assetsProperty and equipment, netOperating lease right-of-use assetsInvestments in debt, equity and other securitiesInvestments in unconsolidated affiliatesGoodwillOther identifiable intangibles, netDeferred income taxesDeposits and other assetsTotal assetsLIABILITIES AND STOCKHOLDERS’ EQUITYCurrent liabilities:Accounts payable and accrued expensesUnearned incomeIncome taxes payableCurrent portion of long-term debtOther current liabilitiesTotal current liabilitiesLong-term debtDeferred income taxesOperating lease liabilitiesOther liabilitiesTotal liabilitiesCommitments and contingenciesStockholders’ equity:Common stock and additional paid-in capital, 400.0 sharesauthorized at September 30, 2020 and December 31, 2019, 0.01par value, 254.5 shares issued and 191.7 shares outstanding atSeptember 30, 2020; 253.0 shares issued and 192.3 sharesoutstanding at December 31, 2019Retained earningsTreasury stock, at cost, 62.8 and 60.7 shares at September 30,2020 and December 31, 2019, respectivelyAccumulated other comprehensive lossEquity attributable to IQVIA Holdings Inc.’s stockholdersNon-controlling interestsTotal stockholders’ equityTotal liabilities and stockholders’ equitySeptember 30, 2020December 31, 2019 7723,837 2,4611,1881011442454,13912,19542938758017,730 33)(311)6,0032606,26323,837 23,2517
Table 3IQVIA HOLDINGS INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(preliminary and unaudited)Nine Months Ended September 30,(in millions)Operating activities:Net incomeAdjustments to reconcile net income to cash provided by operatingactivities:Depreciation and amortizationAmortization of debt issuance costs and discountStock-based compensation(Earnings) loss from unconsolidated affiliatesGain on investments, netBenefit from deferred income taxesChanges in operating assets and liabilities:Change in accounts receivable, unbilled services and unearnedincomeChange in other operating assets and liabilities2020 178 9431369(8)Net cash used in investing activitiesFinancing activities:Proceeds from issuance of debtPayment of debt issuance costsRepayment of debt and principal payments on capital leaseobligationsProceeds from revolving credit facilityRepayment of revolving credit facility(Payments) proceeds related to employee stock option plansRepurchase of common stockDistributions to non-controlling interest, netContingent consideration and deferred purchase price paymentsNet cash (used in) provided by financing activitiesEffect of foreign currency exchange rate changes on cashIncrease (decrease) in cash and cash equivalentsCash and cash equivalents at beginning of period 7(19)(28)891863(17)Net cash provided by operating activitiesInvesting activities:Acquisition of property, equipment and softwareAcquisition of businesses, net of cash acquiredPurchases of marketable securities, netInvestments in unconsolidated affiliates, net of payments receivedInvestments in equity securitiesOtherCash and cash equivalents at end of period2019 8
Table 4IQVIA HOLDINGS INC. AND SUBSIDIARIESNET INCOME TO ADJUSTED EBITDA RECONCILIATION(preliminary and unaudited)Three Months EndedNine Months EndedSeptember 30,(in millions)Net Income Attributable to IQVIA Holdings Inc.2020 (Benefit from) provision for income taxesSeptember 30,2019101 202057 2019160 175(3)(1)948319299943888Interest expense, net99111310331(Income) loss in unconsolidated affiliates(3)1(8)17121832Deferred revenue purchasing accounting adjustments—318Stock-based compensation33276987Depreciation and amortizationIncome from non-controlling interestsOther (income) expense, net(3)5(35)23Loss on extinguishment of debt—241224Restructuring and related charges25196545Acquisition and integration related charges293610596Adjusted EBITDA 604 593 1,649 1,7589
Table 5IQVIA HOLDINGS INC. AND SUBSIDIARIESNET INCOME TO ADJUSTED NET INCOME RECONCILIATION(preliminary and unaudited)Three Months EndedNine Months EndedSeptember 30,(in millions, except per share data)2020Net Income Attributable to IQVIA Holdings Inc. (Benefit from) provision for income taxesPurchase accounting amortization(1)(Income) loss in unconsolidated affiliatesIncome from non-controlling interestsSeptember 30,2019101 202057 2019160 175(3)(1)948226226691676(3)1(8)17121832Deferred revenue purchasing accounting adjustments—318Stock-based compensation33276987Other (income) expense, net(3)5(35)23Loss on extinguishment of debt—241224Royalty hedge gain———6Restructuring and related charges25196545Acquisition and integration related charges293610596Adjusted Pre Tax Income Adjusted tax expenseIncome from non-controlling interestsMinority interest effect in non-GAAP adjustments(2)Adjusted Net Income412 409 1,087 1,221(84)(77)(223)(250)(7)(12)(18)(32)(3)(2)(5)(6) 318 318 841 933Basic 1.66 1.63 4.40 4.76Diluted 1.63 1.60 4.32 4.65Adjusted earnings per share attributable tocommon stockholders:Weighted average common shares 99.0194.9200.5(1)(2)Reflects all the amortization of acquired intangible assets.Reflects the portion of Q2 Solutions' after-tax non-GAAP adjustments attributable to the minority interest partner.10
Table 6IQVIA HOLDINGS INC. AND SUBSIDIARIESCALCULATION OF GROSS AND NET LEVERAGE RATIOSAS OF SEPTEMBER 30, 2020(preliminary and unaudited)(in millions)Gross Debt, net of Original Issue Discount, as of September 30, 2020 12,339Net Debt as of September 30, 2020 10,875Adjusted EBITDA for the twelve months ended September 30, 2020 2,291Gross Leverage Ratio (Gross Debt/LTM Adjusted EBITDA)5.4xNet Leverage Ratio (Net Debt/LTM Adjusted EBITDA)4.7x11
Contacts: 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 IQVIA Reports Third-Quarter 2020 Results, Raises Full-Year 2020 Guidance and Provides 2021 Outlook
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