Earnings call transcript Q4 2022

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Operator

Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to the IQVIA Fourth Quarter 2022 Earnings Conference Call.

All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator instructions] As a reminder, this call is being recorded. you. Thank

like President, call Mr. Investor begin conference. now Childs, to Childs, turn your Vice Senior Relations to would over the Nick please I and Treasury.

Nick Childs

Financial fourth everyone. are Sherbet, today Bousbib, Executive and Officer; General Director, Vice Chairman Planning Officer; and for Thank President With Executive Ari Thank Counsel; Chief Vice Senior Bruehlman, Relations. Good earnings call. Investor President Gustavo morning, joining you. Vice and Mike Eric our Perrone, Ron quarter and and XXXX me Financial President, you Analysis; Fedock, Executive Chief Senior

presentation Today, Presentations will webcast. we will section Investor Relations of following this at be referencing those available on be visible a for this our our IQVIA of call also you site that call Web in and during Events ir.iqvia.com. will presentation This be the

begin, information certain implied statements will results the Before filings. stated discussed from listeners like company's and Exchange on SEC due conference discussed forward-looking XX-K including those by would with could statements. filings we caution call our business, associated Securities during Commission, The forward-looking actual this materially the Form with include to uncertainties the that I differ by management company's are annual in subsequent which report risks and to or and

discuss and of a comparable the press reconciliation for A in substitute financial In presentation. measures on conference this in financial and not with measures a call non-GAAP will non-GAAP GAAP. GAAP addition, call, we included considered to measures measures certain to release which should is supplement be these accordance the prepared

Chairman to to like turn over now our I and CEO. call would the

Ari Bousbib

discuss fourth results. and full-year us everyone. today morning, Thank you, quarter good Nick, Thanks our to for and joining

of highest year. safety $XX.X first the business, participants at are achieved with trial IQVIA. bookings billion, to research; $XX.X customers U.S. close business the very backlog XXX achieved R&DS record the trial a for of critical Tasso. stands ever, decentralized what we the a panel at over added As We which billion, we've self-collection improved we expanded record year lab new for collaboration our in launching and clinical our now by we we've in clinical XXXX, was our access was capabilities It proud

program as in first a customers, data active increased new wins data sources DCT by business. We Europe, validation access Medicines devices digital our two Real-World a achieved We countries, offers XX across than DCT than Our XX added well GDPR with the real and our execute privacy for for received time this our partnerships the of our companies. marketing to world in to And through significant top-XX which marking advancements of offering number XX% validation. digital made campaigns. pharma with capabilities more we business Lasso connected the Agency data with Marketing, and acquisition European Alliance. purpose-built We healthcare more the European U.S. enhanced marketers real technology and world regulators expanded including

goals. of We EBITDA. adjusted period. $X.X plan. end since have to $XXX to the $XXX in CapEx, time, also we ratio $X.X X.XX have No have volatile Vision we million to in headwinds of in were Vision XXXX faced, the billion billion deployed would XXXX our marked three-year we operate when goals, year. set in these repayment of fact included XX the $X.X the exceeded debt. Despite share macro we net leverage repurchase, strategic XXXX, our same this This acquisitions, and environment one predicted billion our many capital times the million reduce At we could of during during able in

we company as around and It resourcefulness, our you of services environment the to a every commercial interest in reporting clinical by is slowdown these that And the economic in uncertainty. demand our IQVIA's that resilience, biotech and reductions in know, and the 'XX, since macro commitments for creativity demonstrate been employees attributes the higher mission. support allowed as of caused rate XXXX. the to of has world day beginning industry made deliver funding, proud the am on I you in as well

the As goals. on course remain before, at our confident remain our our seen while we've ability fundamentals remain concerns IQVIA, anecdotal these industry clients we've confident fact, evidence discussed we in And, healthy. to our deliver of of XXXX we, of the that from in and demand

begin at other we molecules more history. are there time XXXX, any in than As development in

XX%, fact, EBP Our large, RFP segments. growth to in in flow saw all was up QX the three full-year. in double-digit acceleration We, segments; and with XX% for midsize,

Our business year. is which record prior up XX% billion $X.X a versus reached net new in QX,

example, we services nonetheless full-year, favorable the commercial our we consulting, the XXXX. billion short-term are as, remains large had And repeat that bookings our such for $XX.X seeing achieved XXXX commercial in COVID for discretionary spend despite in bookings business, categories trend. in we some on demand growth For didn't in of a while fluctuations yes,

company recognition me our World's the just week. the Admired for Companies year. Most congratulate and named let sixth nice for Finally, list last IQVIA around consecutive the of the received world the was acknowledge employees to Fortune's

earned Importantly, once again, within ranking first our we industry place the group.

innovation, competitiveness, out services, of long-term one of quality global including use number assets, in and nine We responsibility, value. management, investment corporate also seven people of social and products rank categories,

at results of X.X% from reflecting our adjusted discipline. EBITDA management periods, quarter the XX% X% our we work compared the on And to cost grew quarter, year. COVID-related adjusted a the currency X% to diluted basis, Fourth driven by at last grew on now revenue for top strong $X.XX, EBITDA growth. growth the constant revenue Fourth both excluding Turning adjusted constant quarter reported grew currency EPS, line for an XX.X%, basis. organic quarter ongoing and fourth increased

and company be and recently sciences this in only Through make Cloud IQVIA available IQVIA agreement first a our ecosystem quarter; continue full into products China. a with partnership activity specific have business meet locally data compliant to to of and the to China's regulations. suite, extend market needs. and Alibaba designed life products Alibaba technology be to tailored our hosted to OCE highlights delivering milestone collaboration, provider Salesforce-based the IQVIA Salesforce-based collaborate will the with Alibaba Salesforce, its Through Few business, in capabilities to privacy innovative Cloud on this with Cloud entered China's will residency of

take where of all of pharma focus As challenge complexity is awarded with Human IQVIA top-XX our brands Personalization offers increased embedded all and will deal Data we IQVIA's help responsibility managing know, the of you end-to-end and clients of A Science combination clients care a commercial largest our managed customers' services a the Cloud globally. analytics commercial deal data for of data intelligence, becoming data our integration, for volume. commercial networks, their ever which commercial strategy. extensive

IQVIA's was And the quarter, product validating This once a again domain major incumbent and IQVIA differentiated top-XX for expertise, patient program support displacing by awarded technology services, vendor. a integrated [indiscernible] cardiology their uniquely pharma platform.

EBP levels high essentially As the highlighted, returning levels. pre-pandemic customers funding has remained demand I to previously our despite from

for OCE. capabilities, strong well a their aspects an of due IQVIA resources based IQVIA As was and provide such biopharma as clinical as domain to expertise, services commercial commercial all their future first breath U.S. the end-to-end example, emerging selected IQVIA as be indications. clinical of our to launch company to selected their technology partner. support trial will recently

to product that its esophagus. implant company biotech clinical the result their of the the Current of use with Biostage first is example, in developing manage was a esophageal selected which XX% to able for regenerate medicine functionality regenerative another first treatment tissue the treatment years. trial patients of product. cancer In options diagnosed at only trial IQVIA implant, restore X survival demonstrated successfully In to the the esophageal

Prime provider Clalit, launch Israel the combines cutting-edge in region. our expertise and the in delivery, and we with therapy research clinical collaboration genomics. cell due IQVIA world ability in The first our data, complex capabilities trials. RNVS, selected trial health and to our signed and most IQVIA largest gastrointestinal Clalit's also was the long-term team, Within Site to dedicated services a gene collaboration and real running the

special therapeutic we primary to strong network bookings. pediatric in genomics. Oncology, growth for care Clalit clinics the outsourcing, of with double area and operates more and continue in disease, than In XX experience remains which oncology, year-over-year hospitals digit largest XXXX R&D expertise a rare

pharma oncology indications. multiple As expanded our partnerships a global preferred top in a with of IQVIA awarded large trial an which one example, we stage late and early

We ability because our to development, of protocol were to recruit selected diversity targets. including analytics their site our optimize selection, planning operational meeting patients and

So, the strong overall, business the R&DS continues momentum.

of ratio in billion of $X.X including business the achieved in highest a the into total history. And quarter quarter, a of the with we in $X business new X.XX quarterly new delivered This the throughs, our excluding almost pass book-to-bill pass translated bookings book-to-bill throughs. saw billion net You of X.XX.

excluding our full-year, was book-to-bill and X.XX pass ratio pass the throughs For throughs. including contracted X.XX

turn now to over it details on Ron more our I performance. for will financial

Ron Bruehlman

morning, everyone. Thanks, Ari, and good

revenue. was of versus this by is from million organic XX%. reported reviewing XXXX. fourth currency both COVID-related of Let's base Fourth $XXX approximately revenue a was growth the the grew million X.X% revenues $XXX basis X% excluding constant which quarter, quarter In constant all at our down about that start In at business, COVID-related last, currency. year and work and on $XXX quarter were million

and Technology up & $X,XXX quarter constant reported at Analytics million, Solutions fourth currency. X.X% the X.X% revenue for was

X.X% quarter currency R&D in X.X% and reported COVID-related fourth at $X,XXX currency. all X%. up at Excluding growth revenue constant work, organic was of TAS million was constant Solutions

work, Excluding R&DS organic all growth at currency in was COVID-related constant XX%.

$XXX Medical & X% quarter at reported, CSMS but Solutions constant of Sales million fourth currency. or revenue grew X.X% Contract Finally, declined

at growth X%. work, all Excluding COVID-related currency organic was in CSMS also constant

at $X was that's COVID-related In business, COVID-related constant was growing base revenue currency $XX,XXX for X.X% at organic our year. the revenues full-year, basis the For constant approximately totaled XX%. on reported all X.X% excluding million work, currency. again a at billion growth and

Analytics currency. reported the constant at Technology For million, & $X,XXX and up Solutions revenue full-year, X.X% X.X%

growing growth currency Full-year in XX% all organic was Solutions X.X% for the constant currency. was at work, Excluding at revenue million in and year. COVID-related R&D $X,XXX X.X% TAS reported constant

growth XX%. in Excluding work, at was R&DS all currency constant organic COVID-related

$XXX X.X% but was CSMS constant Full-year million was at down which X.X% reported, revenue currency. grew

constant organic was work, CSMS in year. currency COVID-related all X% the Excluding for growth at

which down P&L. Now of the Adjusted fourth million year-over-year. $X,XXX let's quarter, XX.X% million was representing full-year growth the EBITDA up was $XXX for while EBITDA adjusted was move XX.X%

million or income share net $XXX was Full-year diluted million diluted million. income GAAP earnings the adjusted $X.XX per of Adjusted earnings per was diluted to quarter. net And $X,XXX per quarter Fourth income was net fourth share $X.XX. grew X% earnings in $XXX And share. $X.XX. GAAP GAAP was

For year-over-year. the income Up $XX.XX. full-year, earnings XX.X% per share was million. $X,XXX was net adjusted diluted Adjusted

reviewed, booking. as delivered Solutions Ari R&D outstanding Now another quarterly

new about business had despite been amount year-over-year impact the foreign net of was for X.X% million XX.X% at to foreign of billion, Full-year at $XX.X growing on year-over-year backlog adjusting a COVID bookings significant Without reported backlog we would should a exchange, stood in reported have billion on impact basis. in growing up X.X% a increased year-over-year X.X% say, It $XX.X which XXXX. record a exchange. December year-over-year reported increased $XX.X $XXX of Our billion basis and repeat didn't that I higher. that XXXX on a XX

Now net debt of cash as was totaled reviewing million, the sheet, debt XX, that December $XX,XXX million. $XX,XXX cash gross million. equivalence and in of and And balance $X,XXX resulted

$XXX ratio a leverage of quarter CapEx resulted for million. X.XX ended in million $XXX trailing Fourth was XX-month flow at cash net free quarter. from adjusted million operations the flow was cash Our times $XXX the EBITDA. year And which

rate retired to last XXXX. a billion to shared end expect was changes year, we QX $XXX interest the call, as swap $X was we At dollar you fixed at in exposure quarter fixed these the at we term know mature the U.S. earnings as floating loan in have $X And changes, of structure to this on variable yearend early Now end early our rates to to with we million fixed. that about of our expiring. of And interest into the limit of in we scheduled to billion entered swap drop rates. debt further our XX% when fourth XX%

exceeded We rate are our of Vision of for growth to three-year of of as for plan already commitments a impact our and end a high-end goal highlights. exceeded range exchange. XX%. foreign revenue here the achievement reported average of the compound achieved in we few marked XX mentioned, our X.X% XXXX XX.X% This the X% and adjusted December

our XX.X%, diluted goal XX.X% share, adjusted goal adjusted for Our rate three-year of with to exceeding for was XX%. the X% double-digit our growth growth. And earnings average was per EBITDA of consistent CAGR

of exiting our X.X of Finally, net adjusted leverage favorably to to ratio Xx. EBITDA times XX trailing XXXX our compared month X.Xx goal

XXXX Okay, let's guidance. turn now to

representing to activity XX and FX the growth X.X%. revenue tailwind slight year-over-year $XX.XXX between we This about total be versus M&A XXX billion points of growth For contribution expect basis from the and prior-year. a $XX.XXX full-year of revenue billion of XXXX, basis points very X.X% to includes approximately

which approximately X% we our growth XX% FX to constant at Adjusting contribution for the step-down revenue the and the be anticipate acquisitions COVID-related work currency. to $XXX guidance of underlying tailwind, million, implies organic

Our adjusted to our EBITDA billion, growth guidance is $X.XXX of $X.XXX XX.X%. to billion X.X%

X.X%. Our adjusted representing diluted $XX.XX to $XX.XX of X% guidance is EPS year-over-year to growth

Our XX% guidance rate of interest than have of the $XXX from the expense, a effective under in rate million EPS because tax of operational XX%. point increase is $XXX includes corporate just approximately XX%, been which about and million D&A would higher about income of it otherwise to tax U.K.

and end impact rates retirement of net 'XX. leverage growth of between and diluted the expect assumes assumptions we our count XXXX. This U.K. of to is average debt year; one-time ratio about XX%. slightly regarding maturing debt XXXX, And million implies assumes the our the Based deployment adjusted times split tax Adjusting evenly that three of in the acquisitions year-over-year our of the to EBITDA for rate, to and these shares. higher step-up the XXX guidance should on adjusted billion remaining end above finally, drop end by latter, EPS interest guidance, the guidance the $X XX% towards in EPS and of our share below cash guidance March retire an term

February currency the of rates Finally, of Xth guidance balance assumes our that year. for the continue foreign as

are there pieces moving our of know Now, in lot a guidance. I

So, let on dynamics adjusted in color XXXX. some and EPS share additional revenue me the

highlight As million revenue step-down of down in quarter. about that COVID-related anticipate should that approximately the this mentioned versus I by XX% we will earlier, will first step And occur $XXX XXXX. I

and year than revenue more organically the currency for at during will as XX% compensate to course headwind we grow excluding this COVID-related project of it X% Now, constant the between work.

points our guidance of a foreign about includes very As XX basis XXX points. full-year I from slight and basis also contribution tailwind previously, of mentioned exchange M&A

that That said, will it's in point first-half. experience the we out a to important actually FX from headwind

COVID-related underlying reported. this adjusting expected revenue is to the will more be finally, to X%. XX% impacts. for expect even work an COVID-related segment that at and X% organic X% reflects This two Now in in CSMS, R&DS X% FX, and and points organic work, we be for underlying approximately growth step-down significant acquisition to work again to organic step-down for is a in COVID growth adjusting and for year-over-year be will COVID-related R&DS, COVID-related step-down includes year-over-year growth flat revenue reported, work, X% grow level, acquisition growth impact work, excluding be reported, and FX the to will And TAS to FX revenue impacts X% percentage XX%.

items On impact increase growth year-over-year. these by the non-operational percentage experience up adjusted an approximately of Together, rate expected are impact step that EPS, we I XX and will rates the points the in year-over-year U.K. corporate tax interest the mentioned. in to

deliver most expect XX% up strong we important in will adjusted skewed the to tailwind the It's to from cost pronounced first-half, results XX% expense second-half operational EPS the while increase be interest will with of items, our the to year-over-year year. that initiatives cutting step in productivity growth. and these note towards Excluding the be

the as guidance, be primarily first one, year toughest tailwind the Number issues four progress from these our expense step-down; which largest third, the being despite two, year-over-year benefits toughest finally year. first versus to headwind phasing the productivity number the the year the comparison interest initiatives prior the we comparison; of FX as quarter timing during will relevant through and year; our largest FX, of the fourth, quarter the are factors. to increase COVID-related And will a the due for

reported between as to on X.X% expect $X.XXX basis. $X.XXX a a in QX, be at and we and billion X% result, X.X% currency So, to X.X% or a revenues growth billion constant on to basis,

Excluding X.X%. and X.X% adjusted X.X% be between expected and be is EBITDA revenue constant X% expected which $XXX expect X.X%. and growth finally, COVID-related XX%. organic $X.XX $X.XX, to And is between Adjusted to work, EPS between is million, up declining $XXX diluted to to be at currency we million to

interest step we quarter. year. first adjusted diluted Again, EPS and for expect the rates, the February expense the the tax in that of as between grow the rate U.K., up of Excluding the XX% the of X% assumes in balance our continue guidance to currency foreign and X,

year. quarter a to So, strong summarize, successful another capping was QX

For organic EPS the accelerating and R&DS. XX% with XX%. recording currency growth remain healthy, in in full-year, and demand Underlying in the work, our at was grew RFP bookings excluding and constant revenue industry business up QX COVID-related adjusted

environment. And repurchased lastly, times. to X% organic retired we billion while $X.X EPS variable $XXX at million X.X debt, growth XXXX, headwinds. adjusted debt XX% again ratio our performance and our leverage and almost growth commitments COVID-related constant rate XX% operating to revenue in shares, the Vision of exceeded XX% net excluding volatile currency our work, We macro XXXX XXXX, term During we're excluding our to reducing of strong with projecting non-operational despite

And with operator hand that, over the me let Q&A. to for back it

Operator

question line the with Leonard Your [Operator Dan Instructions] Credit first Suisse. comes of from

open. is Your line

Dan Leonard

you. Thank

So, start mentioned confidence goals. I'll the continued XXXX off, Ari, just in you

of growth You're 'XX. X% in guiding to revenue X%

the CAGR 'XX double-digit I a through think number. was

to the So, could acceleration you bridge from the Thank anticipated you. XXXX result thereafter?

Ari Bousbib

the 'XX to Obviously, thank we say goals, trajectory Yes, we different. we on were our operationally. true much, -- we we foreign be same that were it very when when continues currency rates are you assumed Dan. on set Look, we

FX. in just think the I any $XXX we exact but to don't know million -- longer, XXXX, lost lost so number revenue I we -- in probably

but So, about Maybe be it'll close. it'll look, close. don't be revenue; XX, know not I

-- that we what despite our very -- that a remarks, those the else. replicate. expects seeing If all, we on we earnings step unchanged in And clearly goals. achieve the one-time On of EBITDA up Again, as are is introductory trajectory anything, is you're just world on think said hopefully the the per over rate strong to remind won't 'XX you be we one-time. rate share, I will delivered and facing, of first the the confident certainly, very 'XX, would XXXX everything EBTIDA we EPS resume that certainly year we're start as step-up expect that, period double-digit fully is even experienced. earnings rates or and over per a period. after so in But compound we share either Thank I stabilize tailwind. XX% declining And growth you. afterwards, three-year that

Dan Leonard

Thanks.

Operator

is the line Coldwell Your Baird. next question Eric with from of

Your line is open.

Eric Coldwell

Thank you. Good morning.

rescue So, bookings about first. bookings. Difficult that's if like how think way a you but strong quarter takeaways, will, that, in or bookings, did I versus hit a your opportunities you was, question where trying say, makes gained wanted easy the answer, 'XX you of have Do competitive your to if step market what ask on back to the to that normal fourth on wins, a higher to R&DS and rates additionally the was you hit share I'd sense. much get of through sense to incremental that versus, IQV top might through capture Just have sense year?

Ari Bousbib

from we did we when know how CROs reported. clear of after bit really the it's report on hard will time have And well, everyone Yes, has more data we Yes. perspective little don't because a competitors your read yet. and

been market gain think role. that since have read. And we've are displacing to gaining it's are know forward momentum I clear looking because a share. market played gaining rescue we look, to think a We share don't we I that the I'm we competitors. studies merger But on been market share. So, certainly

and or have and we doesn't well And more history. than go things anecdotal with approach. study course, there, happen, the but the in certain less a here Of not

at I the they it in I very past, in another but the category a time, kept nauseam demand, be share of continues or see, do at the happen. during that all the The switch the else and market The cumbersome you're And difficult underlying that we does sponsor and repeating gains. ad to I reason being including unless to in on include point sponsor everyone we that the to and market nevertheless, that for want XXXX studies that it were suggesting exercise, and one switch strong. levels the despite decides don't was pandemic. to indicators CROs. a side during than levels wants of would the more levels, be decided some rescue to beginning biotech other than but it's CROs, to very considered they happened apart because the world that falling think strong no And and returning it's lower were what funding that,

in down. the, slowing strong. I've our data We delays we haven't Quite our RFP I -- like, here I any haven't -- you'd is even flow more give got opposite, seen that the any signs on that mentioned was decision-making, seen the if can demand some -- you more very

Eric Coldwell

yes, multi-core Yes. The answer data. would be always

Ari Bousbib

of So, anything, the I said RFP over overall strong. if so, I We for get -- very -- in was XX% again, kind the quarter, flow fourth full-year, XX% accelerating. that. Yes, the and

qualified over the yet for were essentially an the it but Our actually, is we and kind up was that QX one, consider The we not I was have for. awards, absolute at way, number the contracted will in and awards the early pipeline what remind ever, and end is at the awards, really year-over-year. happen which highest we we have future; stopped up year The indicator the up -- that was of you, real. pipeline by -- booked not of X% in the XX%, of

backlog, excluding mentioned the XX% up which FX. So, XX.X% we the is itself and book-to-bill year-over-year, just under ratio,

Thank And services. what explains that market our else that don't it. on share. healthy I add I So, support you for We've that here can clinical share you, gains, to demand Eric. our of then, and top solid got know trial numbers think

Eric Coldwell

the there and advantage But debt the on you side? capital that guidance? taking any deployment the I split I you between technical have thinking the here, M&A. can you could one about that there billion of repurchase and some quick on just have confirm current are that authorization is talked repurchases no Ron, And built if know $X And into item share

Ron Bruehlman

that We're I might can into repurchase we repurchase debt and right confirm of evenly between split baked shares assuming Sure, during billion guidance. gave And we're some now year? $X change instead. circumstances. devote that that our there debt reduction. in, that the is our capital Well, going we is not. deployment capital we'll But guidance that's no always share the the assumption M&A with could and to reduction that

Eric Coldwell

Okay, thank you.

Operator

from Your the of JPMorgan. Anne Samuel line next question with is

Your line is open. Anne Samuel with JPMorgan, your line is open.

Ari Bousbib

Okay, next question, please.

Operator

Your Bank. from with Justin next is question Bowers Deutsche

Your line is open.

Justin Bowers

Hi, good morning, everyone.

pivoting Ari, lot about talked some a Just services. managed strong commercial momentum RDS, you from in

to could you in there, also Just about is the just TAS if expand want of -- isolated wondering is or business? that the also in that some and CTMS strength

Ari Bousbib

mean right, Sales CSMS, the --? You Contract

Justin Bowers

Sorry, CSMS? the

Ari Bousbib

Yes.

Justin Bowers

Yes, I that's what --

Ari Bousbib

slow The a would to TAS consistent. it mean We're No, growth grower, is pleased, put so mean, CSMS I continued that I has to aside. been grow. see I relatively obviously, that

during pandemic, Quarter-to-quarter had say -- would share large XX% down, could excluding that's excluding vary. step the I the had fair a You the full-year. in we and COVID saw we growth for that, And a so work X% and of it COVID QX, of that down. stepping

quarter And first-half we XX%, had around in third growth overall, growth, XX% activity I that quarter came X%, very -- was we that more less or -- thought. earlier so, the QX. fourth good in think than was the was the was

the we've which operating and -- excluding TAS, acquisitions that single-digit. high this FX, consistent again We COVID for a to is had in with this momentum we've Again, consistent and that guided X% guided year. underlying X% to, is is next

to technology of our growth with few ways drivers the achievements -- technology and and real the find more we as and where deploy So, growers considered solutions. in evidence significant very this for clients. significant innovative and a real-world, business real-world mentioned few that's fast clients strong utilize a awards to are of Both be continue I to

The And we more year, perhaps We whims reason and didn't the budget the end we they spend, end share acceleration consulting of business, do of December. at budgets, the usually end, saw, of more and kind it of is usually more work. much the in the just discretionary to clients by the for the we that -- analytics historically, that like little economic have and and this that the a and the they business like piece to that utilize expansions almost restrictions of so bit clients or kind you more at to color, see an year. if the this towards will. in year spend the didn't see last-minute is, And their exposed purchases,

question. real-world the single whether again, high Thank it the And I and digits, for is economic but your to which the short-term, for be of math, the tends piece flat analytics, I continues and anything, discretionary. is the people the are cautious data low what and mostly, your And was area when underlying business, percent, growth single-digit that basically and of -- and course, growth don't continues then, are are by more more cyclical that's of kind one-ish is. you short being is last cycle, consulting to or -- in it changes. again, technology, segment. and know subject and do which so driven you both And not where to But flat which longer-term decisions yields

Operator

Your next with line question Jack Nephron. is from the of Meehan

Your line is open.

Jack Meehan

cancellations seen there morning. of ask couple I in your bullish just sound end? so, that Was around the you've were funding a way, around the over of that notable funding about you know last to seeing Thank last Good in what anything Wanted different the year. terms relative you. trend about you Ari, to years?

Ari Bousbib

Nothing.

Jack Meehan

into sort your at important R&D Short just any how clients? of I and around of rumbling you are year? sweet. the building just segment has any this guess for outlook Yes, your been restructuring there a like macro

Ari Bousbib

was postponing signs again canceling, see that that work once demand, trial clients terms somehow planned we in before. and can of our delaying, clinical Okay, that are no development

don't we We've cancellation XX see So, no for been no activity, unusual exactly. essentially months unusual this anything, postponements, nothing. saying

a the operating then We've your stormy powerful large, we expand different terms very a of that's and extremely engine discussion. the want are demand, that's to macro certainly environment, got be our in to continues strong, if In our organization. The question, waters. navigating you factoring ship -- momentum

in certain expense, continued inflation, form in the affect wage work form the our winds in are sites; foreign to winds theaters stormy which of to that the are do But I'm more expected ability referring normal to to form sides, mode macro our clinical issues delay COVID winds of the I'm form of that of the operating that China in these wars and interest in factors. -- that in return in in and those waters are all of

of which something about. Some can we do

and 'XX of new and For XXXX. are a trying offshoring manage occur example, are and initiatives, the tightly, and rationalizations many cost scheduled period again forward and looking program inflation all into end addressing that decisions our last more planning effect year, field by were to by over wage And at by launched to bring productivity towards to maintaining that the to of workforce we increasing that we've discipline. our cutting overhead of accelerating our economies scope 'XX outsourcing that we accelerating accelerating and

year, ongoing. towards So, begin the but will of mentioned, the is work Ron as those the showing latter the benefits of part

action are to that with factors not trying are side. So, offset address those that how are that that's our can somehow we we -- macro on

as And cash circumstances now, Eric any diverting will certainly, and But we saw the With debt to is in plan factor. to strong our started in in another those respect limited of address our in to the of interest, towards end shortest into for change, very year, tranche will markets, remind year. in of levels, do because much. $X step-up address we're our the XXXX. what cash flow and you we one-time part entered we you now, do were retire kind billion reducing year this debt, We're the But we expense, what we're that us can decisions. obviously, latter as not we're doing do. interest the macro of the normally the have turnout that's share that we very we repurchase would probably We'll adjust Thank swaps. to trying that if flow capital

Jack Meehan

you. Thank

Operator

is of with Luke question the line from Barclays. next Sergott Your

Your is line open.

Luke Sergott

Hey you're sense XQ two one can the perspective? RDS, guys, and just a in a between the roll-off COVID, give you clean-up the the from here on TAS of thanks. that you us segment expecting between modeling how Can

Ari Bousbib

overall that third fairly about you kind about think a the be of I Yes, be and both of that's year-over-year, about [Jack] in would QX, R&D, I it's And would Jack, above XX% roughly. step-down million think would TAS, though, about will of in be the said of quarter two-thirds for how segments say the there. by COVID it's and [Ph], it of $XXX impacts I'd it the should in in full-year, impact substantial

Luke Sergott

All It's helpful. front right, great. Thanks. really free lastly, on here cash flow. on the And

on of us understand you what of year. I percentage a for So, here as ton sense parts a give moving you're I conversion? targeting mean, for and can a But the of 'XX EBITDA

Ari Bousbib

thing that's as adjusted caution flow full-year where flow an because given or and is on only We on income. cash not the in about a target net It's like is between the that look point-to-point XXXX. it were net I we that. vary XX% any income, could year, And of anything from cash the like, concept balance percentage it XX% of free based adjusted that And always talked for we typically accrual would sheet.

income we should recognizing XX% you that in were target in than in net in right we're could you just year. think So, of or that from And And given higher as XXXX. to range, higher in any could say a adjusted of substantially that as the course, of would being of the XXXX. be I lower, kind range we but XX% a deviate

Luke Sergott

All right, you. thank

Operator

Guggenheim. Your next with the Sandy from line Draper is question of

is open. Your line

Sandy Draper

to get concentrated we blockbuster XX five Reduction the ball sort years, of about want to away Question of than to more at diversified two pharma people hey, very engage know for I not sort and other I the in back you, at because to to be CEOs little out I conflicting messages heard more look bit longer-term you're a I drugs Inflation your especially more get crystal Ari we want in and from are so or is a what of three how biopharma one I invest hear with next there. of Davos, drugs so much. when certainly and the looking even at am, Thanks JPMorgan, around, just things going or talking lot sort more, Act, from

and going is going and their just with hear that? perspective love I the and means. few Reduction to to looking you're Would Inflation big economic concentrated from we're what trials thinking hear they more are drugs, on We love back, to really but really, what Act are not how what are macro customers thoughts so there are, pull to hearing Thanks. portfolios current or your about the you're what about at how your the environment,

Ari Bousbib

because provisions, enough again, negotiations. it's or work. still of the some it. the many of And subject Reduction enough. how understand Yes, and detailed lot of spend under to the very kick thank we a specific now, And finalizing similar to, it. mean in in explain what clients influx decade, many won't to parts time the of still there's haven't discussion. decided is Many you. them lot of in a undefined, our it going regulations it Inflation rules name they the details of just been that first know entirely, It's of inflations to to done right provisions are with in later are until legislation; I is look, be don't to a to of what's lot trying we we the of actually the Act work the anyway, Yes, of and Not all,

it'll to even it's because curbing different drop is that, attractive, it's before drug any, try program, economics types harmful years any to if now, that to patients at program on, So, it's generally, long-term pricing it this I'm this to them you when seen the if or innovation decide, pharma to conceptually, when these start forth, going from so or the curbing to and and other or about could so I pharma be development, the XX as not a and so administration well, for least the in economics start the if of even you reimbursements. changes statements companies things, anytime I factor speak effect, CEOs, from it's

come that the pharma not companies healing speak again how And R&D works. pharma et and every day diabetes, and to [indiscernible] colleagues cure they the Despite breast the et come drug is cancer to motivation, work by R&D, I cure Heads to up what to cure out, their day is at them people. pancreatic to my this cancer going Pharma and to cetera. cetera, But day are know with is all a of motivated in and makes

for is the underlying motivation. this model the is doing society. So, pharmaceuticals And predicated on good

general the are the people that cancel the to a margins. yes notion the economic zone program, at going So, attractive, gets observation. because That's

of diseases, conversations drug the Second rare Act, that's clinical subcategories more trend I in it and with before and in a oncology strongest focus of development Inflation Reduction and my to trying largest the in that within on a lot that observation demand to and in mentioned terms independent a for subcategories is grower our be probably diseases, is oncology, lot the of clients specific that's address of trials, is work. continues the business

in until and much hope here which know previously development away going is go to on markets. our diseases to drug not smaller And as the all model. just untouched the you the capability. plays continues, addressing for, same focus much we that away, That strength that's stay. obviously is pretty So, Again, and

bit on conversation. of So, I mean, color my that's the

a I mean with But practice a changing decisions their cloud yes, make could such that it's in not respect things. Davos, Thank our to you day-to-day investment at expect conference programs. how very hear you. to and like is general much and operate plants So,

Sandy Draper

Got it. Thanks, Ari.

Operator

of Anderson with the is Your next Elizabeth question line from Evercore ISI.

Your line is open.

Elizabeth Anderson

wondering you're getting could you're inflation I of the into going you degree on on Thank question. your the sort bookings for contracts much degree you. sort so pricing that currently and comment the Thanks that of sort labor if was and also are of new guys. force. of experiencing of Hi, wage as

Ari Bousbib

part a we of take will that and I in the we demand, software wage combination are have healthcare skill who people the first, scarce data yes, demand. or Okay, are all who who sets experiencing skills these very high three, high development expertise, significant for are looking in have inflation, second and of for have looking that science we're question the expertise, expertise, are

programs, Secondly, inflation. that a raise and and kinds frankly, in tech for are causes compelled of the in hunting we sector, are in And a the the data result, healthcare we compensation as sector. competitors all sector, ground science to our

our are to the So, idiosyncratic general specific reasons there there, you to business out company. and our have inflation plus

see that, are our I Now, that, that you can mentioned before growing margins. we despite

it, areas, that's cost cost work in meaning, and are et essentially management we programs lower more addressing So, true, cetera. do we

with we competitive it's fighting of got competitors slice pie. that. with And a you there, can, into the for and out cycle always get generally, able commercial are a in shorter got we we market of the who the lot it's costs question, often, yes, first to which smaller your but I a are pricing, of offset Now, are part And businesses? we is sector clients. Theoretically, increases those pricing negotiation to for the when defend against

side. rates on cost is. exist theory labor pricing trials, in our clinical so, reflect the is yes, for have to of flexibility limited, does In in And the commercial what course, it as R&D,

And that long-term, again, you least do realized But to the business, one that until the that's trial. next, of reflect level today, into clinical the that I meaning five at revenues is some which or clinical be negotiation. of to a increase, the transfer pricing of those portion what long four we price trial a in years. to booked also applied business we for subject may raises rates form cycle won't wage to a clients are But determine our remind

revenue tomorrow different was we sold what labor cost delivering are assumptions. under in several at years and So, today, ago different,

the cycle never the are will, if long the There for in clauses inflation the is escalation where that in we nature are business. you of there have of the delay, trial envisioned business, a markets. some of we they but type facing So, inflation, because of clinical contracts

that's So, you much, very picture on the Thank pricing. Elizabeth.

Elizabeth Anderson

That's very helpful. sir. Thank you,

Ari Bousbib

you. Thank

Nick Childs

question. more One

Operator

the Cowen. line Charles Your from final Rhyee question of with comes

is open. Your line

Charles Rhyee

the the it, missed the might buckets, Maybe the but you from have break EPS you question. just about yes, when think these down for talk sort if taking I this kind for impact growth of thanks Ron, EPS about on makes us Great, that can that for contribution cetera, tax up higher for interest relative between et year, expense, you rate, of and EPS? then the delta

Ari Bousbib

corporate U.K. about added the effective look to well rate overall tax our point percentage Yes, a increase, rate. tax

So, of you but coming year-over-year most start is with the expense. from impact that, interest

$XXX in interest over about XXXX. we you in $XXX million XXXX. I So, think expense We were, million slightly told in

on the that do of we figure excluded then it's can and and out you growth those impact coming math that shares you that, that's still double-digit. what why two absent items is, those are showed and EPS very the operational out roughly So, was XXX rate with principally -- XXX million underlying strong

Charles Rhyee

things assumptions that and if the into assumes swap the those agreements year, of do pay okay? down or going the through you debt course that, And is

Ari Bousbib

all Yes, that our of is baked into assumptions.

Charles Rhyee

right, All great.

Nick Childs

Thank you.

Operator

call over turn the now Childs. will back Mr. I to

Nick Childs

again you on today. us forward rest follow-up call. next to joining day Thank any to for Myself the Okay. We questions look have. might team everyone you earnings be and you of the for the speaking our available will

Operator

This concludes today's conference call.

disconnect. now You may

IQVIA (IQV) 10 Feb 232022 Q4 Earnings call transcript