01—Abstract
Summary
Summary of the 10-K filed February 12, 2021. Cited figures are marked; the original filing is the authoritative source.
IQVIA Holdings Inc. (NYSE: IQV) reported 2020 revenues of $11.36 billiona, up 2.4% from $11.09 billion in 2019, with constant currency revenue growth of approximately 2.3%.
Growth was driven by Technology & Analytics Solutions, whose revenues rose 8.3% to $4.86 billionb, while Research & Development Solutions was roughly flat at $5.76 billion (down 0.5%) and Contract Sales & Medical Solutions fell 9.0% to $741 million. The filing states that COVID-19 disrupted on-site clinical monitoring and face-to-face offerings, though the company said its Real-World business had strong growth and that R&D backlog rose to $22.6 billion from $19.0 billion. Net income attributable to IQVIA Holdings Inc. was $279 million, or $1.43 per diluted share, compared with $191 million, or $0.96 per diluted share, in 2019.
Income from operations was $731 millionc versus $777 million, and operating cash flow increased to $1.96 billion from $1.42 billion. Cash and cash equivalents ended the year at $1.81 billion, against total debt of $12.6 billion, and the $1.5 billion revolving credit facility was undrawn.
Capital allocation was modest in 2020: the company repurchased $423.1 milliond of common stock, leaving $0.9 billion of authorization under the Repurchase Program, and it paid no dividends. The filing also describes ongoing litigation, including a Veeva Systems dispute and Korean privacy matters, that management does not expect to be materially adverse.
02—Key points
Key Highlights
- Revenues rose 2.4% to $11.36 billion in 2020, with Technology & Analytics Solutions up 8.3% to $4.86 billion, offsetting declines in Research & Development Solutions (down 0.5%) and Contract Sales & Medical Solutions (down 9.0%).
- Net income attributable to IQVIA Holdings Inc. increased to $279 million ($1.43 diluted EPS) from $191 million ($0.96) in 2019.
- Income from operations declined to $731 million from $777 million, with depreciation and amortization rising to $1.29 billion from $1.20 billion.
- Net cash provided by operating activities was $1.96 billion, up from $1.42 billion, and cash and cash equivalents reached $1.81 billion at year-end.
- Total debt was $12.6 billion at December 31, 2020, with $1.5 billion of revolving credit capacity undrawn.
- R&D Solutions contracted backlog increased to $22.6 billion from $19.0 billion, with approximately $5.9 billion expected to convert to revenue in the next 12 months.
- The company repurchased $423.1 million of common stock in 2020 and had $0.9 billion remaining under its Repurchase Program; no dividends were declared or paid in 2020 or 2019.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2020filed February 12, 2021Financial Statements
FY2020 against FY2019
| Line item | FY2020FY2019 | Change |
|---|---|---|
| Revenue | $11.36B$11.09B | +2.4% |
| SG&A Expenses | $1.79B$1.73B | +3.2% |
| Operating Income | $731.00M$777.00M | −5.9% |
| Interest Expense | $416.00M$447.00M | −6.9% |
| Net Income | $279.00M$191.00M | +46.1% |
| EPS (Basic) | $1.46$0.98 | +49.0% |
| EPS (Diluted) | $1.43$0.96 | +49.0% |
| Shares Outstanding (Basic) | 191.30M195.10M | −1.9% |
| Shares Outstanding (Diluted) | 195.00M199.60M | −2.3% |
05—Questions
Frequently Asked Questions
How did COVID-19 affect IQVIA's 2020 results?
The filing says the pandemic disrupted on-site clinical monitoring and face-to-face offerings across all three segments. Contract Sales & Medical Solutions was most challenged, with a decline in sales rep visits, while the Real-World business had strong growth. The company also cited R&D Solutions volume decreases in clinical services and lab testing, partly offset by revenue from COVID-19 vaccine and therapy studies.
What drove the increase in net income?
Net income attributable to IQVIA Holdings Inc. rose to $279 million from $191 million, even though income from operations fell to $731 million from $777 million. The filing attributes the difference mainly to lower income tax expense of $72 million versus $116 million, which reflected a $26 million favorable GILTI high tax exception election, and to higher other income of $65 million versus $37 million, which included a decrease in contingent consideration fair value.
How strong is IQVIA's liquidity and debt position?
Cash and cash equivalents were $1.81 billion at December 31, 2020, up from $837 million a year earlier, and the company had no amounts drawn under its $1.5 billion revolving credit facility. Total debt was $12.6 billion, and management stated it was in compliance with its financial covenants and believed existing resources would fund operations and debt obligations for at least the next 12 months.
What is the outlook for the Research & Development Solutions backlog?
Contracted backlog for Research & Development Solutions increased to $22.6 billion at December 31, 2020, from $19.0 billion a year earlier, and the company expects about $5.9 billion of it to convert to revenue in the next 12 months. The filing cautions that backlog is not a direct predictor of revenue, since projects can be delayed, canceled or reduced in scope, and most contracts can be terminated on 30 to 90 days notice.
Does IQVIA pay dividends or repurchase shares?
IQVIA did not pay dividends in 2020 or 2019 and does not currently intend to pay them. It repurchased 2,718,447 shares for approximately $423.1 million in 2020 under its Repurchase Program, including 1,000,000 shares bought from selling stockholders for about $164.3 million. As of December 31, 2020, $0.9 billion remained authorized under the program.
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