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Introduction & Market Context
IQVIA Holdings Inc. (NYSE:IQV) released its first quarter 2025 financial results on May 6, showing modest revenue growth and stronger earnings per share performance that exceeded analyst expectations. The healthcare data and analytics company reported revenue of $3.83 billion, representing a 2.5% increase year-over-year on an actual currency basis and 3.5% at constant currency. Despite beating expectations, IQVIA’s stock dipped slightly following the announcement, trading at $152.30, well below its 52-week high of $252.88.
Quarterly Performance Highlights
IQVIA’s first quarter results showed resilience in a challenging market environment, with adjusted earnings per share of $2.70, up 6.3% from the same period last year and above the forecasted $2.64. Adjusted EBITDA reached $883 million, a 2.4% increase from Q1 2024.
As shown in the following chart of quarterly financial performance:
However, the company’s net income declined to $249 million from $288 million in Q1 2024, with diluted earnings per share falling to $1.40 from $1.56. This discrepancy between adjusted and GAAP figures was primarily driven by increased stock-based compensation and losses in unconsolidated affiliates, as detailed in the company’s reconciliation slides.
Segment Analysis
IQVIA’s performance varied significantly across its business segments, with Technology & Analytics Solutions emerging as the clear growth driver. This segment generated $1.55 billion in revenue, up 6.4% on an actual currency basis and 7.6% at constant currency.
The company’s segment breakdown reveals the following performance metrics:
Research & Development Solutions, IQVIA’s largest segment by revenue, showed minimal growth at just 0.3% (1.1% at constant currency), while Contract Sales & Medical (TASE:BLWV) Solutions continued to decline, with revenue dropping 4.2% year-over-year. The earnings call transcript indicates that management attributed the R&D Solutions slowdown to "uncertainty in the R&D Solutions market," though they expressed confidence in the segment’s long-term prospects.
R&D Solutions Backlog and Future Outlook
Despite modest current growth in the R&D Solutions segment, IQVIA’s backlog continues to expand, reaching $31.5 billion in Q1 2025. This represents a 4.8% increase from Q1 2024 and a substantial 25% growth since Q1 2022, suggesting potential for future revenue acceleration in this segment.
The following chart illustrates the consistent growth in R&D Solutions backlog over the past four years:
The backlog growth, while positive, has decelerated from previous years, which may partially explain investors’ cautious reaction to the earnings report. During the earnings call, CEO Ari Bousvi addressed this concern, stating, "We are confident that our industry will successfully manage this period of uncertainty and we’ll find ways to adapt."
Balance Sheet and Cash Flow
IQVIA maintained a solid financial position with $1.74 billion in cash and cash equivalents as of March 31, 2025. The company reported gross debt of $14.33 billion, resulting in a gross leverage ratio of 3.87x and a net leverage ratio of 3.40x based on the last twelve months’ adjusted EBITDA of $3.71 billion.
Free cash flow improved significantly to $426 million, up from $377 million in Q1 2024, driven by stronger operating cash flow of $568 million. This represents a 13% year-over-year increase in free cash flow, demonstrating the company’s ability to convert earnings into cash despite macroeconomic challenges.
Full-Year and Q2 2025 Guidance
IQVIA raised its full-year 2025 revenue guidance, projecting annual revenue between $16.0 billion and $16.4 billion. The company maintained its adjusted EBITDA guidance of $3.77-$3.89 billion and expects adjusted diluted EPS between $11.70 and $12.10.
The full-year guidance is presented in the following slide:
For the second quarter of 2025, IQVIA expects revenue between $3.93 billion and $4.0 billion, with adjusted EBITDA of $895-$915 million and adjusted diluted EPS of $2.72-$2.83.
The guidance assumes foreign exchange rates as of May 5, 2025, remain in effect throughout the forecast period.
Market Reaction and Analyst Perspectives
Despite exceeding earnings expectations, IQVIA’s stock experienced a slight decline of 0.33% following the earnings release, closing at $152.30. This modest negative reaction may reflect concerns about slowing growth in the company’s R&D Solutions segment and broader market uncertainties.
According to the earnings call transcript, analysts expressed particular interest in the uncertainty in the R&D Solutions market and the company’s strategic response to U.S. government initiatives. Management emphasized IQVIA’s diversified service offerings and strategic partnerships as mitigating factors against potential headwinds.
Analysts maintain a consensus "Buy" recommendation on IQVIA stock, though six analysts have recently revised their earnings expectations downward for upcoming periods. The company appears undervalued based on Fair Value calculations, with the stock currently trading at a P/E ratio of 20.2x, suggesting potential upside if the company can accelerate growth in its slower-performing segments.
Full presentation:
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