IQVIA Lowers 2023 Outlook and Provides Preliminary Guide for 2024 Calling for Mid-Single-Digit Growth
11-1-23 (by: Scott Gleason) IQVIA Holdings a leading contract research organization for the life sciences industry, has reported its financial results for the third quarter ending September 30, 2023. Revenue for the third quarter reached $3,736 million, marking a 4.9 percent year-over-year increase. This was below consensus forecasts which called for $3,789 million. Like other CROs who have reported so far including ICON and Medpace Holdings, the company maintained a healthy book-to-bill ratio at 1.24x with its total contracted backlog growing to $28.8 billion, a 12% increase year-over-year. This bodes well for future outlook for IQVIA. Management noted that according to Bioworld, venture funding for pharma reached a new high for the year of $18.7 billion in the third quarter up 8% over last year. With the company’s Technology & Analytical Solutions division, however, it cited weakness based upon budget cuts at large pharmaceutical companies. The company believed this trend would turnaround by 2024.
Technology & Analytics Solutions revenue of $1,431 million grew 2.2 percent on a reported basis. Research & Development Solutions revenue of $2,122 million grew 7.2 percent on a reported basis. Contract Sales & Medical Solutions revenue of $183 million was flat on a reported basis.
Adjusted EBITDA was $888 million, indicating a 9.1 percent year-over-year increase. Adjusted net income was $462 million, with adjusted diluted earnings per Share at $2.49 compared to consensus forecasts of $2.44. As of September 30, 2023, cash and cash equivalents were $1,224 million, and debt was $13,631 million translating to a net leverage ratio of 3.52x trailing twelve-month Adjusted EITDA. Operating cash flow for the third quarter was $583 million, and free cash flow was $437 million.
The company lowered its full-year guidance to reflect slower growth in the TAS segment and the impact of the strengthening US dollar. The updated revenue guidance range is $14,885 million to $14,920 million, representing growth of 3.3 to 3.5 percent on a reported basis and 3.7 to 3.9 percent at constant currency. Adjusted Diluted Earnings per Share guidance range is $10.16 to $10.23, flat to up 0.7 percent on a reported basis. The company also provided an initial look at 2024 revenue guiding to mid-single digit growth. Analysts had been modeling 7% growth for next year.