IQVIA HOLDINGS INC. (IQV) Q4 2024 Earnings Summary

Executive Summary

Q4 revenue was $3.958B (+2.3% y/y reported; +3.0% cc), adjusted EBITDA $996M (+3.1% y/y), GAAP EPS $2.42 and adjusted EPS $3.12 (+9.9% y/y). TAS outperformed (+9.5% cc), while R&DS declined modestly (-1.0% cc; ex pass-throughs +2.5% y/y) .
R&DS bookings exceeded $2.5B with a 1.20x quarterly book-to-bill; contracted backlog closed at $31.1B (NTM conversion ~$7.9B). Management highlighted elevated cancellations but stable demand indicators; trailing-twelve-month book-to-bill was 1.19x .
2025 outlook reaffirmed: revenue $15.725–$16.125B, adjusted EBITDA $3.765–$3.885B, adjusted EPS $11.70–$12.10; assumptions include ~150 bps FX headwind, >$100M COVID step-down (all in R&DS), and 100–150 bps M&A contribution .
Catalysts: momentum in TAS and AI initiatives (including NVIDIA collaboration), record quarterly FCF of $721M, and a $2B buyback authorization increase (total remaining $3.013B) could support sentiment; near-term watch items include R&DS cancellation volatility and stranded costs from delayed mega-trials .

What Went Well and What Went Wrong

What Went Well
- TAS delivered above-target growth; Q4 TAS revenue $1.658B (+9.5% cc). CEO: “TAS revenue was above target and momentum continues to build into 2025.”
- Robust R&DS demand indicators despite choppy CRO market: Q4 bookings >$2.5B (book-to-bill 1.20x) and backlog $31.1B (+5.5% cc y/y); management renewed all large pharma strategic partnerships .
- Cash generation: record quarterly FCF $721M; FY24 FCF $2.114B (+41% y/y); net leverage 3.33x LTM adjusted EBITDA .
What Went Wrong
- Elevated R&DS cancellations persisted; CEO noted Q4 cancellations were “not far from $1B” (well above normal), pressuring near-term growth/margins due to stranded costs on delayed mega-trials .
- R&DS revenue declined y/y in Q4 (-1.0% cc; -1.3% reported), reflecting cancellations/COVID step-down and pass-through dynamics; ex pass-throughs grew +2.5% .
- Pricing pressure across CRO market and ongoing IRA-driven portfolio reprioritization at large pharma remain headwinds; management still anticipates 1–3 more quarters of volatility .

Financial Results

Summary (comparisons across last three quarters)

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($MM)	$3,814	$3,896	$3,958
GAAP Diluted EPS ($)	$1.97	$1.55	$2.42
Adjusted Diluted EPS ($)	$2.64	$2.84	$3.12
Adjusted EBITDA ($MM)	$887	$939	$996

Margins and notes
- Q3 adjusted EBITDA margin was 24.1% (+30 bps y/y) .
- Q4 adjusted EBITDA margin expanded ~20 bps y/y and “over 25%” per management; mix and stranded costs weighed on gross margin optics (reported vs adjusted differences) .
Segment revenue (trend)

Segment Revenue ($MM)	Q2 2024	Q3 2024	Q4 2024
Technology & Analytics Solutions (TAS)	$1,495	$1,554	$1,658
Research & Development Solutions (R&DS)	$2,147	$2,162	$2,123
Contract Sales & Medical Solutions (CSMS)	$172	$180	$177

Key operating KPIs

KPI	Q2 2024	Q3 2024	Q4 2024
R&DS Backlog ($B)	$30.6	$31.1	$31.1
Quarterly Book-to-Bill (x)	1.27	1.06 (ex-1 large cancellation 1.22)	1.20
Next-12-Months Backlog Conversion ($B)	$7.8	$7.8	~$7.9
Quarterly Operating Cash Flow ($MM)	$588	$721	$885
Quarterly Free Cash Flow ($MM)	$445	$571	$721

Estimate comparisons: S&P Global consensus was unavailable at this time; vs-estimate comparisons are omitted.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($B)	FY 2025	Reaffirmed prior outlook (Dec Investor Day)	$15.725–$16.125	Maintained
Adjusted EBITDA ($B)	FY 2025	Reaffirmed prior outlook (Dec Investor Day)	$3.765–$3.885	Maintained
Adjusted Diluted EPS ($)	FY 2025	Reaffirmed prior outlook (Dec Investor Day)	$11.70–$12.10	Maintained
TAS Revenue Growth (cc)	FY 2025	—	5–7% (→ $6.3–$6.5B)	New detail (unchanged vs prior segment view)
R&DS Revenue Growth (cc ex-COVID)	FY 2025	—	4–6% (includes >$100M COVID step-down)	New detail (unchanged vs prior segment view)
CSMS Revenue ($B)	FY 2025	—	~0.7 (flattish y/y)	New detail
Net Interest Expense ($MM)	FY 2025	—	~675	New detail
Operational D&A ($MM)	FY 2025	—	~575	New detail
Effective Tax Rate (%)	FY 2025	—	~18.5%	New detail
Average Diluted Shares (MM)	FY 2025	—	~178	New detail
Cash Deployment	FY 2025	—	~$2B split between M&A and buybacks	New detail
Revenue ($B)	Q1 2025	—	$3.740–$3.790 (FX + COVID step-down ~300 bps headwind)	New
Adjusted EBITDA ($MM)	Q1 2025	—	$870–$890	New
Adjusted Diluted EPS ($)	Q1 2025	—	$2.60–$2.70	New

Assumptions: ~150 bps FX headwind vs 2024; >$100M COVID step-down (all in R&DS; ~75% 1H/25% 2H); 100–150 bps M&A contribution; FX rates as of Feb 5, 2025 held constant .

Earnings Call Themes & Trends

Topic	Q2 2024 (Q-2)	Q3 2024 (Q-1)	Q4 2024 (Current)	Trend
AI/Technology Initiatives	Expanded AI portfolio; GenAI analytics and reporting wins; SmartSolve eQMS award; multiple AI-enabled client deployments	Continued AI differentiation (IQVIA AI Assistant launch); omnichannel and OCE wins	60 innovations in 2024 incl. 39 AI apps; announced NVIDIA collaboration to advance AI agents	Strengthening, broader deployments
TAS Momentum	Sequential improvement; 2H mid-high single-digit growth expected	Above high end growth in TAS; broad-based demand	TAS above target in Q4; +9.5% cc; expecting sustainment into 2025	Improving run-rate
R&DS Demand & Cancellations	Strong bookings ($2.7B; 1.27x); backlog $30.6B; IRA-driven reprioritization persists	Net B2B 1.06 due to ~$350M futility cancel; two fast-burning mega-trials delayed; backlog $31.1B	Book-to-bill 1.20x; Q4 cancels “not far from $1B”; stranded costs; volatility 1–3 more quarters	Elevated cancels, but healthy pipeline/backlog
Macro/Policy (IRA)	Budget caution; IRA impacts portfolio decisions	Continued IRA-related reprioritization, tougher pricing	View of potentially more business-friendly policy backdrop; no NIH funding exposure	Slightly improving tone
Regional/Commercial	Must-do launch work re-accelerating; approvals feeding demand	TAS recovery broad; omnichannel across 9 countries	Digital business expanding into Europe; doubled publisher network	Expanding EU footprint
Pricing/Competition	Pricing tough across TAS and R&DS; counter with productivity/AI	Aggressive pricing environment; competitive dynamics	Pricing pressure persists; mix shift toward FSP in bookings could pressure margins over time	Persistent headwind

Management Commentary

“R&DS revenue was on target and bookings exceeded our expectations despite the choppy CRO market environment. TAS revenue was above target and momentum continues to build into 2025.” – Ari Bousbib, CEO .
“Excluding all COVID-related work… constant currency growth was about 4.5% [in Q4]. Acquisitions contributed approximately 2 points of this growth.” – Ron Bruehlman, CFO .
“We… renewed all of our large pharma strategic partnerships… established new relationships, displaced incumbents and expanded the scope of work.” – CEO .
“We ended the quarter with over 25% adjusted EBITDA margins… we’ve accelerated the deployment of AI tools within our own processes.” – CEO .
“Backlog was flat sequentially… the dollar strengthened considerably during the fourth quarter… knocked about $0.5B off the backlog.” – CFO .

Q&A Highlights

Cancellations/Volatility: Q4 cancellations were “not far from $1B”; management estimates ~70–75% of large pharma reprioritization is complete but sees 1–3 more volatile quarters; two mega-trials delayed to late 2025 drive stranded costs near term .
Margins/Mix: Gross margin optics affected by stranded costs and lower-margin RWE strength; higher FSP mix is in bookings, not yet visible in P&L .
Policy/Exposure: Management views potential policy backdrop as “more business-friendly”; zero NIH exposure .
Guidance Cadence: Q1’25 headwinds (~300 bps from FX and COVID step-down) embedded in quarterly guide; FY25 assumptions detailed for interest, D&A, tax, and share count .

Estimates Context

Wall Street consensus (S&P Global) for Q4 2024 and FY 2024 could not be retrieved at this time due to temporary data access limits. As a result, explicit beat/miss vs consensus is not included in this recap.
Management did note Q4 revenue “came in above the high end of our guidance range” on an ex-FX and ex-COVID basis, and adjusted EPS grew ~10% y/y, signaling strong execution against internal targets .

Key Takeaways for Investors

TAS acceleration is intact and broadening; double-digit RWE growth in Q4 and EU digital expansion support continued momentum into 2025 .
R&DS demand indicators (RFPs, pipeline, backlog, book-to-bill) remain constructive despite elevated cancellations; watch quarterly volatility and stranded costs until mega-trials resume .
Guidance reaffirmed with explicit quantitative assumptions; Q1’25 absorbs the largest FX/COVID headwind (~300 bps), implying improving cadence as the year progresses .
Capital returns stepped up: $1.15B Q4 buybacks; authorization increased by $2B to $3.013B remaining—supportive of EPS and downside protection in volatility .
Margin levers include mix, ongoing cost discipline, and internal AI-driven productivity; FSP mix in bookings could be a medium-term margin headwind if it ramps in revenue mix .
AI is a multi-year thesis pillar: 39 AI apps launched in 2024 and NVIDIA collaboration could deepen product differentiation and operating efficiency .
Near-term trading: stock may react to reaffirmed FY25 guide and record FCF/buybacks, but quarterly R&DS cancellation headlines could drive volatility; focus on TAS durability and backlog conversion trajectory .

Additional Q4-Relevant Press Releases

IQVIA AI Assistant launch: conversational, healthcare-grade AI interface integrated across analytics products (Oct 2, 2024) .