Iqvia reports record quarter of contracted bookings, tech at ‘front and center’ of strategy
“Once again, we report results at the high end or above our guidance ranges,” said Iqvia CEO Ari Bousbib on the company’s third quarter earnings call earlier this week.
Iqvia’s third quarter (Q3) revenue of $2.594bn grew 6.3% at constant currency and 5.2% reported, coming in at the high end of the guidance range, Bousbib noted. Year-to-date, revenue was $7.724bn, 6.4% growth at constant currency and 7.6% reported.
As for 2018 revenue guidance, CFO Mike said the full-year guidance ranges are being updated for revenue, adjusted EBITDA, and adjusted diluted EPS.
“Revenue guidance has been raised twice this year, largely, to reflect our stronger organic performance. Unfortunately, foreign currency has now turned against us,” he said, though reaffirming the midpoint of the full-year guidance range.
“We now expect revenue to be between $10,300m and $10,350m, and that represents year-over-year growth of 6.2% to 6.7%,” McDonnell said.
- Revenue $2.594bn up 6.3% at constant currency and 5.2% reported
- Adjusted EBITDA $561m, up 8.4% at constant currency and 9.4% reported
- GAAP Diluted Earnings per Share $0.29
- Adjusted Diluted Earnings per Share $1.42, up 19.3%
- $792m of share repurchase completed year-to-date; $133m during the third quarter
The company’s R&D Solutions business segment had a record quarter of contracted bookings.
First quarter contracted net new business excluding pass-through was $1.7bn, which resulted in a book-to-bill of 1.69 for the quarter, explained Bousbib. Compared to the same time period last year, bookings growth was over 40%.
Bousbib said, “The next generation clinical development team continues to drive this.”
Gross new business awards in the third quarter totaled more than $600m. “This means that less than two years into the merger, we have almost $3bn of awards that leverage our core enabled capabilities,” Bousbib added – and “a lot” with new customers or large pharma clients with which Iqvia hadn’t worked with in many years, “sometimes more than 12 years,” he said.
Also during Q3, Iqvia expanded its partnership with Salesforce following the launch of its Orchestrated Customer Engagement (OCE) platform, which is powered by Force.com, Marketing Cloud, and Mulesoft.
“The team is now working in close collaboration with Salesforce to develop orchestrated clinical trials or OCT, the first of its kind suite of integrated clinical applications designed to make clinical trials more efficient,” said Bousbib
After launching the OCE platform, Bousbib said that not much revenue has been realized, though it sees “a great market opportunity.” Though the market has historically been dominated by one company with 80%, 90% share of large pharma clients, he noted.
Since December, Iqvia has won 15 out of 20 competitions in this space, Bousbib said, including a recent contract with Roche through which it will deploy the technology suite across more than 100 markets. Smaller deals also continue to drive momentum, he said.
The company has been discussing “similar type of engagements with all of the large pharma.”
According to Bousbib, the company’s pharma clients spend well over $200bn globally in the types of services Iqvia offers.
“We are the largest provider of these services by far across the board at over $10bn of revenue a year versus our competitors in any of the segments that we compete in. There is no one in the world of pharma that doesn’t buy something from us,” he said.
“We have a great commercial footprint that we can continue to leverage and try to gain share of that spend,” Bousbib added. “That’s our strategy. And technology is front and center of the core of these.”