IQVIA Holdings Inc. 2026 Q3 Earnings Call

Thank you, operator. Good morning, everyone. Thank you for joining our third quarter 2026 earnings call. With me today are Ari Bousbib, Chairman and Chief Executive Officer, Mike Fedock, Executive Vice President and Chief Financial Officer, Eric Sherbet, Executive Vice President and General Counsel, Clarissa Willett, Senior Vice President, Financial Planning and Analysis, and Katie Ward, Vice President, Investor Relations. Today, we will be referencing a presentation that will be visible during this call for those of you on our webcast. This presentation will also be available following this call in the Events and Presentation section of our IQVIA Investor Relations website at ir.iqvia.com. Before we begin, I would like to caution listeners that certain information discussed by management during this conference call will include forward-looking statements.

Actual results could differ materially from those stated or implied by forward-looking statements due to risks and uncertainties associated with the company's business, which are discussed in the company's filings with the Securities and Exchange Commission, including our annual report on Form 10-K and subsequent SEC filings. In addition, we will discuss certain non-GAAP financial measures on this call, which should be considered a supplement to and not a substitute for financial measures prepared in accordance with GAAP. A reconciliation of these non-GAAP measures to the comparable GAAP measures is included in the press release and conference call presentation. As previously disclosed, we implemented a new segment reporting structure effective January 1, 2026. In conjunction with this change, prior period amounts have been recast to conform to this reporting structure. I would now like to turn the call over to our Chairman and CEO, Ari Bousbib.

Thank you, Kerri, and good morning, everyone. Thank you for joining us today to discuss our third quarter results. The team delivered great numbers. The market environment has continued to improve, but our performance improved even more. Our organic growth rates year-over-year accelerated meaningfully, 2x for Commercial and nearly 3x for Clinical. Our margins expanded and free cash flow was very strong. Our win rates were higher in the quarter, which led to our strongest clinical bookings in four years. Our differentiated AI offerings are increasingly contributing to that momentum with continued adoption of our AI agents solutions. In fact, IQVIA has now deployed 415 agents to date. Earlier this month, we brought together more than 400 attendees at TechIQ to share our latest clinical and commercial AI capabilities.

This event is our annual customer event focused on technology, which this year took place in Boston and included our technology partners, NVIDIA, Microsoft, AWS, Snowflake, and Veeva. Our AI leadership continues to earn industry recognition, including multiple industry awards for AI and technology innovation across life sciences and healthcare, while we continue to see more adoption of these capabilities across our customer base. Let me spend a couple of minutes on the results for the quarter. Total revenue for the quarter exceeded the high end of our guidance range, representing year-over-year growth of 8% on a reported basis. At constant currency, growth was even stronger at 8.6%. Organic revenue growth was approximately 6% year-over-year, well over 2 times the rate we delivered a year ago.

Third quarter adjusted EBITDA was above the high end of our guidance as well, representing year-over-year growth of 8.7%. Adjusted EBITDA margin, as a result, expanded by 20 basis points, the second consecutive quarter with margin expansion this year. Third quarter adjusted diluted EPS also exceeded the high end of our guidance range and increased 11.3% year-over-year. The beat was driven entirely by the stronger operational performance. Now on to segment performance. On the clinical side, revenue grew 8.7% reported, of which almost 7% was organic year-over-year, which is nearly 3 times last year's organic growth rate. We delivered $3.2 billion of net new bookings, our highest in 4 years, and 15% above last year, with notable strength in full service. Yes, the book-to-bill was 1.2 in the quarter.

More importantly, this is a long cycle business, and I would like to highlight that our last 12-month net new bookings have now increased for 5 consecutive quarters, reaching $11.7 billion, which is up 14% year-over-year. We think this metric is one of the best forward-looking indicators we have in support of long-term growth. Looking ahead, demand indicators are encouraging. The EBP funding environment continues to be very strong. Funding has reached $90 billion year-to-date, up more than 85% year-over-year, and already above the total for all of last year, according to BioWorld. Similarly, clinical trial starts year-to-date are up high single digits. RFP flow continued to grow at a healthy rate, up high single digits as well compared to last year. Our strong performance, of course, reflects an improving market environment.

We also had good operational execution with win rates that continued to tick up 2 to 3 points. In Commercial Solutions, revenue grew 6.9%, of which 4% was organic, which is double last year's organic growth rate. We had good growth across our 3 sub-segments. Information offerings, which helps our clients understand the market. Analytics and consulting offerings, which help our clients plan their go-to-market strategies. Our other commercial solutions that help them engage with patients, HCPs, payers, and channels. We have now delivered 4 consecutive quarters of strong revenue growth in commercial, and our pipelines remain at record levels. Looking forward, the demand outlook remains favorable with new drug launches up more than 40% year-to-date. Our own pipeline showing healthy growth and decision timelines continuing to shorten.

Now, I usually give you some color on the business activity in the quarter. Today I'd like to do that, but focus on examples where AI was a clear differentiator. Let's start with clinical. Our predictive clinical development capabilities utilize AI to help sponsors design better studies, identify risks earlier, and bring new therapies to patients faster. Here are a few examples of how this is playing out in some recent awards. A large pharma client needed to deliver multiple phase III studies in the same autoimmune indication across nearly 50 countries. Here, our AI-enabled country and site modeling solution optimizes patient identification and enrollment, shortening the overall program timeline by 9 months. In another example, an EBP selected IQVIA for a phase III oncology program. Critical to winning this award was our AI-enabled protocol and site optimization tools, which accelerate timelines and reduce operational risk.

Finally, IQVIA was selected by an EBP for a phase III cardiovascular outcomes study. This is exactly where our scale and integrated AI capabilities make a big difference. We are layering AI agents to bring together clinical delivery, laboratory services, and electronic patient assessments under one model to identify issues earlier, reduce handoffs, and proactively mitigate execution risk. Switching to examples in commercial. We continue to evolve the way we partner with clients. Successful adoption of our AI offerings in commercial organizations within our clients is deepening client trust in IQVIA. As that trust grows, clients are increasingly looking to us to bring more of our AI-enabled capabilities to their organizations. For example, a top 5 pharma client selected IQVIA to build and maintain an agentic platform that provides on-demand insights from complex real-world healthcare data.

This will help the client make faster market access decisions and adjust commercial models nearly real time as prescribing patterns and patient outcomes evolve. We are also seeing AI help expand our role in patient services. A top 10 pharma company selected IQVIA to deliver an integrated support program for its rare disease portfolio. Our AI-powered solutions adapt and shape interactions by factoring in patient mood and sentiment. That allows, in turn, the client to automate tasks such as benefit verifications and case management. The program allows patients to gain access to the therapy, start treatment sooner, and better adhere to the treatments over time. Another example. A large pharma client deployed our recently launched IQVIA Explorer solution.

Explorer uses agentic AI workflows that integrate disparate data sources to answer complex questions spanning areas such as which cohorts of patients are taking the therapy, how therapies are being utilized in patient treatment, and help measure adherence by patient segment. Your client can now execute commercial activities in minutes compared with weeks or months previously. Let me now turn it over to Mike for more detail on our financial performance.

Mike? Thank you, Ari, and good morning, everyone.

As a reminder, we implemented a new segment reporting structure effective January 1, 2026. In conjunction with this change, prior period segment amounts have been recast to conform to this reporting structure. Now let's start by reviewing revenue. Third quarter revenue of $4,428,000,000 grew 8% on a reported basis and 8.6% at constant currency. Organic revenue growth within the quarter was strong at approximately 6%. Commercial Solutions revenue for the third quarter was $1,789,000,000, up 6.9% on a reported basis and 7.9% at constant currency. R&D Solutions third quarter revenue was $2,639,000,000, up 8.7% on a reported basis and 9.1% at constant currency. Year-to-date, total company revenue was $12,947,000,000, up 8.4% on a reported basis and 7.7% at constant currency. Organic revenue growth was strong at over 5%. Commercial Solutions revenue was $5,336,000,000, up 9% reported and 8.3% at constant currency.