01—Abstract
Summary
Summary of the 10-K filed February 16, 2022. Cited figures are marked; the original filing is the authoritative source.
IQVIA Holdings Inc. reported 2021 revenues of $13.87 billiona, up $2,515 million (22.1%) from $11,359 million in 2020, driven by Research & Development Solutions revenue growth of $1,796 million (31.2%) and Technology & Analytics Solutions growth of $676 million (13.9%).
Income from operations rose to $1,393 millionb from $731 million, and net income attributable to IQVIA Holdings Inc. was $966 million, or $4.95 per diluted share, versus $279 million, or $1.43, in 2020. Operating cash flow was $2,942 million, compared with $1,959 million a year earlier, while cash and cash equivalents ended the year at $1,366 million. Management attributed much of the R&D growth to large COVID-19 vaccine clinical trials and the delayed trial activity that restarted in 2021.
Balance sheet and capital allocation: total debt was $12.2 billionc at year-end, with $1.4 billion of available revolver capacity. IQVIA acquired the 40% non-controlling interest in Q2 Solutions from Quest for about $758 million in April 2021 and spent $395 million repurchasing 1.7 million shares. On February 10, 2022, the Board added $2.0 billion to the repurchase authorization, bringing the total to $9.725 billion, with about $2.5 billion remaining.
Research & Development Solutions backlog grew to $24.8 billiond, of which about $7.0 billion is expected to convert to revenue within 12 months. Key risks include client contract terminations (most R&D clients can terminate on 30 to 90 days' notice), data protection and privacy regulation, dependence on third-party data suppliers, cybersecurity exposure, and the Veeva litigation, in which the court issued an order in May 2021 finding evidence of misappropriation that Veeva is appealing.
02—Key points
Key Highlights
- Revenue rose 22.1% to $13,874 million in 2021, led by Research & Development Solutions revenue of $7,556 million (up 31.2%).
- Net income attributable to IQVIA Holdings Inc. was $966 million ($4.95 diluted EPS), compared with $279 million ($1.43) in 2020.
- Income from operations reached $1,393 million versus $731 million in 2020; the effective income tax rate was 14.5% versus 19.3%.
- Operating cash flow increased to $2,942 million from $1,959 million; year-end cash was $1,366 million.
- Total indebtedness was $12.2 billion at December 31, 2021, with $1.4 billion of available revolving borrowing capacity.
- R&D Solutions contracted backlog grew to $24.8 billion from $22.6 billion; about $7.0 billion is expected to convert to revenue in the next 12 months.
- Repurchase authorization was increased by $2.0 billion on February 10, 2022, to a total of $9.725 billion, with roughly $2.5 billion remaining.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 16, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $13.87B$11.36B | +22.1% |
| SG&A Expenses | $1.96B$1.79B | +9.8% |
| Operating Income | $1.39B$731.00M | +90.6% |
| Interest Expense | $375.00M$416.00M | −9.9% |
| Net Income | $971.00M$279.00M | +248.0% |
| EPS (Basic) | $5.05$1.46 | +245.9% |
| EPS (Diluted) | $4.95$1.43 | +246.2% |
| Shares Outstanding (Basic) | 191.40M191.30M | +0.1% |
| Shares Outstanding (Diluted) | 195.00M195.00M | 0.0% |
05—Questions
Frequently Asked Questions
What drove IQVIA's revenue growth in 2021?
Revenue increased $2,515 million, or 22.1%, to $13,874 million. Research & Development Solutions contributed $1,752 million of constant-currency growth, which the filing attributes to volume increases in clinical services and lab testing, including incremental revenue from large COVID-19 vaccine clinical trials. Technology & Analytics Solutions grew $604 million on a constant-currency basis, citing higher technology, real-world and analytical services and COVID-19 related work.
How did profitability change compared with 2020?
Income from operations rose to $1,393 million from $731 million, and net income attributable to IQVIA Holdings Inc. was $966 million versus $279 million. Diluted EPS was $4.95, compared with $1.43 in 2020. Costs of revenue, exclusive of depreciation and amortization, rose to 66.5% of revenues from 66.0%, while selling, general and administrative expenses fell to 14.2% of revenues from 15.7%.
What is IQVIA's capital return and debt position?
IQVIA repurchased 1.7 million shares for about $395 million under its Repurchase Program in 2021 and paid $758 million to acquire Quest's 40% interest in Q2 Solutions. The Board increased the authorization by $2.0 billion on February 10, 2022, bringing the total to $9.725 billion. The company stated it does not currently intend to pay dividends. Total debt was $12.2 billion at year-end, and the company reported compliance with its financial covenants in all material respects.
What are the most significant risks flagged in the filing?
The filing highlights that most R&D Solutions clients can terminate contracts on 30 to 90 days' notice, so contract delays or cancellations can materially affect results. It also cites risks from data protection and privacy laws such as HIPAA and GDPR, reliance on third-party data suppliers, cybersecurity threats, and international operations. Litigation includes the Veeva lawsuit, in which the court issued an order in May 2021 finding significant evidence of misappropriation; Veeva is appealing that order.
What does the R&D backlog indicate for future revenue?
Research & Development Solutions contracted backlog increased to $24.8 billion at December 31, 2021, from $22.6 billion a year earlier. IQVIA expects approximately $7.0 billion of this backlog to convert to revenue in the next 12 months. The filing cautions that backlog is not a precise indicator of future revenue because projects can be delayed, canceled, or changed in scope.
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