IQVIA HOLDINGS INC. (IQV) Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 revenue was $3.829B (+2.5% reported, +3.5% CC), Adjusted EPS was $2.70 (+6.3% YoY), and Adjusted EBITDA was $883M (+2.4% YoY), with TAS strength offsetting slower R&DS bookings conversion .
• Management raised FY 2025 revenue guidance by $275M to $16.0–$16.4B on FX tailwinds and reaffirmed Adjusted EBITDA ($3.765–$3.885B) and Adjusted EPS ($11.70–$12.10) guidance; Q2 2025 guidance: revenue $3.925–$4.000B, Adjusted EBITDA $895–$915M, Adjusted EPS $2.72–$2.83 .
• R&DS quarterly bookings were $2.1B (book-to-bill 1.02x) and TTM bookings $9.7B (TTM book-to-bill 1.14x); backlog reached a record $31.5B with $7.9B expected to convert in the next 12 months .
• Key narrative: robust TAS demand (double-digit RWE), FX tailwind, and AI execution momentum, versus decision delays in clinical programs (especially EBP funding) and adverse mix pressures on margins—setting catalysts around FX-driven top-line raise, TAS recovery durability, and timing of mega-trial ramps .

What Went Well and What Went Wrong

• What Went Well

  • TAS delivered above-target growth: $1.546B (+6.4% reported, +7.6% CC) led by strong double-digit Real-World Evidence demand; pent-up demand and required work returned .
  • Robust cash generation: operating cash flow $568M and free cash flow $426M (89% of adjusted net income) .
  • Strategic progress in AI: >20 agents in production across commercial, RWE, and R&DS, with tangible productivity gains (e.g., delivery time cut from 12 to 4 weeks, ~30% cost reduction) .

• What Went Wrong

  • Bookings softness in R&DS: quarterly book-to-bill 1.02x amid delayed customer decision-making and lower EBP funding; contracted EBP awards not booked pending funding certainty .
  • Margin pressures from mix and FX: shift toward FSP and labs and FX effects weighed on gross/EBITDA margins; margin expansion expectations moderated .
  • Mega trial timing: one mega trial reconfirmed for late 2025; the other further delayed out of the period, contributing to R&DS skew toward lower end of guidance .

Financial Results

Values retrieved from S&P Global.*

Guidance Changes

Management noted FX shifted from a prior ~150 bps headwind to ~50 bps tailwind in FY 2025 revenue, with negligible EBITDA/EPS impact .

Earnings Call Themes & Trends

Management Commentary

• “IQVIA delivered strong revenue and profit performance, at the high-end of our expectations… TAS delivered above target performance, with revenue growth of 7.6 percent at constant currency” — Ari Bousbib, CEO .
• “We raised our full year revenue guidance by $275 million to reflect changes in FX and reaffirmed profit guidance” — Ron Bruehlman, CFO .
• “We experienced delayed decision-making by customers on new programs… unusually high number of EBP awards… not included in bookings because funding has not been secured yet” — Ari Bousbib .
• “We moved over 20 [AI] agents into production… reduced delivery time by two-thirds… ~30% cost reduction; plan to scale to 40 use cases by year-end” — Ari Bousbib .

Q&A Highlights

• RWE durability and TAS strength: Double-digit RWE growth drove TAS outperformance; pent-up demand and mission-critical work returned .
• Margins and FX: Margin changes largely explained by FX; mix pressures from FSP shift; cost actions (incl. AI) to support margins .
• Bookings and EBP funding: Quarterly book-to-bill 1.02x driven by award delays and EBP funding uncertainty; TTM healthy; CEO cautioned against overindexing on quarterly book-to-bill .
• FSP vs full service: Emerging reversal with FSP <10% of bookings in Q1; pipeline/RFPs skewing back to full service on cost and expertise considerations .
• Mega trials and stranded costs: One trial reconfirmed for late 2025; the other pushed out; limited stranded cost impact; R&DS likely to shade to lower end of FY range if bookings cadence doesn’t improve .

Estimates Context

• Q1 2025 vs consensus: Revenue $3.829B vs $3.771B*; Primary EPS $2.70 vs $2.632* — both beats. Adjusted EBITDA reported $883M versus EBITDA consensus ~$880M* (definitions may differ; company reports “Adjusted EBITDA”) .
• Q2 2025 setup: Guidance revenue $3.925–$4.000B vs consensus $3.961B*; Management sees FX lifting revenue while EBITDA/EPS largely FX-neutral .
  Values retrieved from S&P Global.*

Key Takeaways for Investors

• TAS strength and RWE resurgence underpin near-term top-line resilience; monitor durability across 2H’25 launches and macro uncertainty .
• FX is now a tailwind to revenue; profit guidance held, indicating disciplined cost control and limited FX passthrough to margins/EPS .
• R&DS conversion softness appears timing-related (decision delays, EBP funding) rather than demand erosion; TTM metrics and backlog remain healthy .
• Mix normalization potential: Early signs of FSP-to-full-service swing could be margin-accretive over time if sustained .
• AI execution is tangible and scaling; productivity improvements may incrementally support margins/SG&A over 2025 .
• Mega trial timing is a swing factor: one reconfirmed, one pushed out; tilt R&DS growth and margins toward low end if bookings cadence doesn’t reaccelerate .
• Stock catalysts: FX-driven revenue raise, TAS outperformance, AI productivity proof points vs. bookings conversion and margin mix headwinds; Q2 print will test TAS durability and R&DS timing .

Notes on Non-GAAP

Company emphasizes non-GAAP metrics (Adjusted EBITDA, Adjusted EPS) with reconciliations; FY 2025 profit guidance provided on a non-GAAP basis without GAAP reconciliation due to unpredictability of certain items (acquisition-related, restructuring, SBC, etc.) .