IQVIA Holdings Caps Off 2018 With Record Results

IQVIA Holdings (NYSE: IQV) reported its fourth-quarter and full-year results on Thursday.

The contract research organization giant continued to translate single-digit revenue growth into a double-digit gain in adjusted earnings. A strong book-to-bill ratio helped drive the company's backlog to over $17 billion at the end of the year and allowed management to provide upbeat guidance for 2019.

IQVIA Holdings Q4 results: The raw numbers

Metric

Q4 2018

Q4 2017

Change (YOY)

Revenue

$2.69 billion

$2.52 billion

6.6%

Adjusted earnings before interest, taxes, depreciation, and amortization

$583 million

$526 million

10.8%

Adjusted net income

$307 million

$261 million

18%

Adjusted earnings per share

$1.50

$1.22

23%

What happened with IQVIA this quarter?

  • Revenue from technology and analytics solutions (TAS) rose 9% to $1.12 billion. Research and development solutions (R&DS) revenue grew 8% to $1.37 billion. Contract sales and medical solutions revenue continued to decline, by 11% to $193 million.
  • R&DS book-to-bill ratio was strong at 1.7 times for the quarter.
  • The strong net new business growth helped drive the R&DS backlog to over $17 billion at year-end.
  • Stock buybacks totaled $604 million during the quarter. A new $2 billion buyback authorization was announced.

Zooming out to full-year 2018, here's an overview of the company's results:

  • Revenue grew 7% to $10.4 billion. This figure exceeded guidance.
  • R&DS net new business jumped 29% to $5.85 billion.
  • Adjusted EBITDA rose 11% to $2.2 billion.
  • Adjusted net income went up 14% to $1.2 billion.
  • Adjusted EPS expanded 22% to $5.55.
  • Management funneled $1.4 billion into stock buybacks during the year. Shares outstanding dropped about 5% in response.

What management had to say

CEO Ari Bousbib called 2018 "a year of outstanding performance."

He was also excited to report that the synergies promised in the company's 2016 megamerger are starting to be realized:

Looking forward

Management expects that 2019 will be another year of steady growth for the business. However, it did say that unfavorable foreign exchange movements are expected to slow down the company's reported growth rate in the first quarter:

Metric Q1 2019 Forecast Implied Growth at Midpoint
Revenue $2.63 billion to $2.68 billion 4.3%
Adjusted EBITDA $575 million to $590 million 6.5%
Adjusted EPS $1.48 to $1.53 12.6%

Even with those short-term headwinds, the company still expects to post solid adjusted earnings growth for the full year:

Metric 2019 Forecast Implied Growth at Midpoint
Revenue $10.9 billion to $11.1 billion 6.9%
Adjusted EBITDA $2.375 billion to $2.425 billion 9%
Adjusted EPS $6.20 to $6.40 13.5%

IQVIA's stock was driven up, hitting an all-time high following the strong results and upbeat guidance. With double-digit growth on the horizon and numbers growth tailwinds in place, it isn't hard to figure out why Wall Street is excited about where this business is heading.

10 stocks we like better than IQVIA Holdings, Inc.When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and IQVIA Holdings, Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of January 31, 2019

Brian Feroldi has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.