UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________________________________

FORM 10-Q

_________________________________________________________

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to             .

Commission File Number: 001-35907

_________________________________________________________

IQVIA HOLDINGS INC.

(Exact name of registrant as specified in its charter)

_________________________________________________________

Delaware	27-1341991
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

4820 Emperor Blvd., Durham, North Carolina 27703

(Address of principal executive office and Zip Code)

(919) 998-2000

(Registrant’s telephone number, including area code)

_________________________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes x    No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes x    No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ☐    No x

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol	Name of Each Exchange on which Registered
Common Stock, par value $0.01 per share	IQV	New York Stock Exchange

Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock, as of the latest practicable date.

Class	Number of Shares Outstanding
Common Stock $0.01 par value	186,507,930	shares outstanding	as of July 15, 2022

Table of contents

IQVIA HOLDINGS INC.

FORM 10-Q

TABLE OF CONTENTS

		Page
PART I—FINANCIAL INFORMATION		3
Item 1.	Financial Statements (unaudited)	3
	Condensed Consolidated Statements of Income for the three and six months ended June 30, 2022 and 2021	3
	Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2022 and 2021	4
	Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021	5
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021	6
	Condensed Consolidated Statements of Stockholders’ Equity for three and six months ended June 30, 2022 and 2021	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	32
PART II—OTHER INFORMATION		33
Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 6.	Exhibits	35
SIGNATURES		36

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

IQVIA HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions, except per share data)	2022		2021		2022		2021
Revenues	$	3,541	$	3,438	$	7,109	$	6,847
Cost of revenues, exclusive of depreciation and amortization	2,331		2,323		4,654		4,616
Selling, general and administrative expenses	483		482		971		924
Depreciation and amortization	270		343		525		666
Restructuring costs	4		4		11		13
Income from operations	453		286		948		628
Interest income	(2)		(1)		(3)		(2)
Interest expense	94		94		180		193
Loss on extinguishment of debt	—		—		—		24
Other expense (income), net	33		(29)		43		(66)
Income before income taxes and equity in (losses) earnings of unconsolidated affiliates	328		222		728		479
Income tax expense	71		48		142		92
Income before equity in (losses) earnings of unconsolidated affiliates	257		174		586		387
Equity in (losses) earnings of unconsolidated affiliates	(1)		1		(5)		5
Net income	256		175		581		392
Net income attributable to non-controlling interests	—		—		—		(5)
Net income attributable to IQVIA Holdings Inc.	$	256	$	175	$	581	$	387
Earnings per share attributable to common stockholders:
Basic	$	1.36	$	0.91	$	3.07	$	2.02
Diluted	$	1.34	$	0.90	$	3.02	$	1.99
Weighted average common shares outstanding:
Basic	188.3		191.6		189.2		191.6
Diluted	191.1		194.9		192.2		194.9

The accompanying notes are an integral part of these condensed consolidated financial statements.

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IQVIA HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2022		2021		2022		2021
Net income	$	256	$	175	$	581	$	392
Comprehensive income adjustments:
Unrealized (losses) gains on derivative instruments, net of income tax (benefit) expense of $(1), $(1), $8, $—	(7)		(2)		23		4
Defined benefit plan adjustments, net of income tax (benefit) expense of $—, $—, $—, $—	(4)		—		(6)		—
Foreign currency translation, net of income tax expense (benefit) of $84, $(23), $111, $39	(281)		58		(321)		(120)
Reclassification adjustments:
Reclassifications on derivative instruments included in net income, net of income tax benefit of $4, $—, $4, $1	14		3		13		4
Comprehensive (loss) income	(22)		234		290		280
Comprehensive income attributable to non-controlling interests	—		—		—		(5)
Comprehensive (loss) income attributable to IQVIA Holdings Inc.	$	(22)	$	234	$	290	$	275

The accompanying notes are an integral part of these condensed consolidated financial statements.

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IQVIA HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(in millions, except per share data)	June 30, 2022		December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	1,428	$	1,366
Trade accounts receivable and unbilled services, net	2,679		2,551
Prepaid expenses	188		156
Income taxes receivable	44		58
Investments in debt, equity and other securities	90		111
Other current assets and receivables	482		521
Total current assets	4,911		4,763
Property and equipment, net	529		497
Operating lease right-of-use assets	370		406
Investments in debt, equity and other securities	67		76
Investments in unconsolidated affiliates	92		88
Goodwill	13,104		13,301
Other identifiable intangibles, net	4,733		4,943
Deferred income taxes	120		124
Deposits and other assets	487		491
Total assets	$	24,413	$	24,689
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	2,847	$	2,981
Unearned income	1,810		1,825
Income taxes payable	118		137
Current portion of long-term debt	152		91
Other current liabilities	177		207
Total current liabilities	5,104		5,241
Long-term debt, less current portion	12,615		12,034
Deferred income taxes	494		410
Operating lease liabilities	285		313
Other liabilities	563		649
Total liabilities	19,061		18,647
Commitments and contingencies (Note 8)
Stockholders’ equity:
Common stock and additional paid-in capital, 400.0 shares authorized as of June 30, 2022 and December 31, 2021, $0.01 par value, 256.3 shares issued and 186.6 shares outstanding as of June 30, 2022; 255.8 shares issued and 190.6 shares outstanding as of December 31, 2021	10,790		10,777
Retained earnings	2,824		2,243
Treasury stock, at cost, 69.7 and 65.2 shares as of June 30, 2022 and December 31, 2021, respectively	(7,565)		(6,572)
Accumulated other comprehensive loss	(697)		(406)
Total stockholders’ equity	5,352		6,042
Total liabilities and stockholders’ equity	$	24,413	$	24,689

The accompanying notes are an integral part of these condensed consolidated financial statements.

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IQVIA HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	Six Months Ended June 30,
(in millions)	2022		2021
Operating activities:
Net income	$	581	$	392
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	525		666
Amortization of debt issuance costs and discount	7		10
Stock-based compensation	75		80
Losses (earnings) from unconsolidated affiliates	5		(5)
Loss (gain) on investments, net	29		(9)
Benefit from deferred income taxes	(28)		(43)
Changes in operating assets and liabilities:
Change in accounts receivable, unbilled services and unearned income	(143)		481
Change in other operating assets and liabilities	(214)		(166)
Net cash provided by operating activities	837		1,406
Investing activities:
Acquisition of property, equipment and software	(338)		(294)
Acquisition of businesses, net of cash acquired	(464)		(65)
Purchases of marketable securities, net	(3)		(8)
Investments in unconsolidated affiliates, net of payments received	(10)		(3)
Proceeds from sale of equity securities	—		9
Other	3		—
Net cash used in investing activities	(812)		(361)
Financing activities:
Proceeds from issuance of debt	1,250		1,751
Payment of debt issuance costs	(5)		(32)
Repayment of debt and principal payments on finance leases	(47)		(1,794)
Proceeds from revolving credit facility	1,150		—
Repayment of revolving credit facility	(1,250)		—
Payments related to employee stock option plans	(69)		(55)
Repurchase of common stock	(893)		(107)
Acquisition of Quest's non-controlling interest	—		(756)
Contingent consideration and deferred purchase price payments	(21)		(38)
Net cash provided by (used in) financing activities	115		(1,031)
Effect of foreign currency exchange rate changes on cash	(78)		(21)
Increase (decrease) in cash and cash equivalents	62		(7)
Cash and cash equivalents at beginning of period	1,366		1,814
Cash and cash equivalents at end of period	$	1,428	$	1,807

The accompanying notes are an integral part of these condensed consolidated financial statements.

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IQVIA HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(unaudited)

(in millions)	Common Stock Shares	Treasury Stock Shares	Common Stock		Additional Paid-In Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive (Loss) Income		Non- controlling Interests		Total
Balance, December 31, 2021	255.8	(65.2)	$	3	$	10,774	$	2,243	$	(6,572)	$	(406)	$	—	$	6,042
Issuance of common stock	0.4	—	—		(67)		—		—		—		—		(67)
Repurchase of common stock	—	(1.7)	—		—		—		(403)		—		—		(403)
Stock-based compensation	—	—	—		35		—		—		—		—		35
Net income	—	—	—		—		325		—		—		—		325
Unrealized gains on derivative instruments, net of tax	—	—	—		—		—		—		30		—		30
Defined benefit plan adjustments, net of tax	—	—	—		—		—		—		(2)		—		(2)
Foreign currency translation, net of tax	—	—	—		—		—		—		(40)		—		(40)
Reclassification adjustments, net of tax	—	—	—		—		—		—		(1)		—		(1)
Balance, March 31, 2022	256.2	(66.9)	3		10,742		2,568		(6,975)		(419)		—		5,919
Issuance of common stock	0.1	—	—		(2)		—		—		—		—		(2)
Repurchase of common stock	—	(2.8)	—		—		—		(590)		—		—		(590)
Stock-based compensation	—	—	—		47		—		—		—		—		47
Net income	—	—	—		—		256		—		—		—		256
Unrealized losses on derivative instruments, net of tax	—	—	—		—		—		—		(7)		—		(7)
Defined benefit plan adjustments, net of tax	—	—	—		—		—		—		(4)		—		(4)
Foreign currency translation, net of tax	—	—	—		—		—		—		(281)		—		(281)
Reclassification adjustments, net of tax	—	—	—		—		—		—		14		—		14
Balance, June 30, 2022	256.3	(69.7)	$	3	$	10,787	$	2,824	$	(7,565)	$	(697)	$	—	$	5,352

(in millions)	Common Stock Shares	Treasury Stock Shares	Common Stock		Additional Paid-In Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive (Loss) Income		Non- controlling Interests		Total
Balance, December 31, 2020	254.7	(63.5)	$	3	$	11,092	$	1,277	$	(6,166)	$	(205)	$	279	$	6,280
Issuance of common stock	0.7	—	—		(57)		—		—		—		—		(57)
Repurchase of common stock	—	(0.3)	—		—		—		(62)		—		—		(62)
Stock-based compensation	—	—	—		30		—		—		—		—		30
Net income	—	—	—		—		212		—		—		5		217
Unrealized gains on derivative instruments, net of tax	—	—	—		—		—		—		6		—		6
Foreign currency translation, net of tax	—	—	—		—		—		—		(178)		—		(178)
Reclassification adjustments, net of tax	—	—	—		—		—		—		1		—		1
Balance, March 31, 2021	255.4	(63.8)	3		11,065		1,489		(6,228)		(376)		284		6,237
Issuance of common stock	0.2	—	—		1		—		—		—		—		1
Repurchase of common stock	—	(0.2)	—		—		—		(45)		—		—		(45)
Stock-based compensation	—	—	—		42		—		—		—		—		42
Acquisition of Quest's non-controlling interest, net of tax	—	—	—		(415)		—		—		(10)		(284)		(709)
Net income	—	—	—		—		175		—		—		—		175
Unrealized losses on derivative instruments, net of tax	—	—	—		—		—		—		(2)		—		(2)
Foreign currency translation, net of tax	—	—	—		—		—		—		58		—		58
Reclassification adjustments, net of tax	—	—	—		—		—		—		3		—		3
Balance, June 30, 2021	255.6	(64)	$	3	$	10,693	$	1,664	$	(6,273)	$	(327)	$	—	$	5,760

The accompanying notes are an integral part of these condensed consolidated financial statements.

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IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

1. Summary of Significant Accounting Policies

The Company

IQVIA Holdings Inc. (together with its subsidiaries, the “Company” or “IQVIA”) is a leading global provider of advanced analytics, technology solutions and clinical research services to the life sciences industry. With approximately 83,000 employees, IQVIA conducts business in more than 100 countries.

Unaudited Interim Financial Information

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement of the Company’s financial condition and results of operations have been included. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. As such, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021. The balance sheet as of December 31, 2021 has been derived from the audited consolidated financial statements of the Company, but does not include all the disclosures required by GAAP.

Recently Issued Accounting Standards

Accounting pronouncements adopted

In October 2021, the Financial Accounting Standards Board issued new accounting guidance that requires contract assets and contract liabilities (i.e., deferred revenue) acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. Under current GAAP, an acquirer generally recognizes assets acquired and liabilities assumed in a business combination, including contract assets and contract liabilities arising from revenue contracts with customers and other similar contracts that are accounted for in accordance with ASC 606, at fair value on the acquisition date. Generally, this new guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree. The Company adopted this new accounting guidance effective January 1, 2022. The adoption of this new accounting guidance did not have a material impact on the Company's consolidated financial statements for the three and six months ended June 30, 2022. The impact of this guidance on the Company's consolidated financial statements for the remainder of the year will depend on the size and nature of future acquisitions, if any.

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2. Revenues by Geography, Concentration of Credit Risk and Remaining Performance Obligations

The following tables represent revenues by geographic region and reportable segment for the three and six months ended June 30, 2022 and 2021:

	Three Months Ended June 30, 2022
(in millions)		Technology & Analytics Solutions		Research & Development Solutions		Contract Sales & Medical Solutions		Total
Revenues:
Americas		$	716	$	866	$	88	$	1,670
Europe and Africa		540		532		43		1,115
Asia-Pacific		152		552		52		756
Total revenues		$	1,408	$	1,950	$	183	$	3,541

	Three Months Ended June 30, 2021
(in millions)		Technology & Analytics Solutions		Research & Development Solutions		Contract Sales & Medical Solutions		Total
Revenues:
Americas		$	635	$	935	$	86	$	1,656
Europe and Africa		565		507		42		1,114
Asia-Pacific		153		449		66		668
Total revenues		$	1,353	$	1,891	$	194	$	3,438

	Six Months Ended June 30, 2022
(in millions)		Technology & Analytics Solutions		Research & Development Solutions		Contract Sales & Medical Solutions		Total
Revenues:
Americas		$	1,397	$	1,812	$	179	$	3,388
Europe and Africa		1,136		1,039		89		2,264
Asia-Pacific		314		1,033		110		1,457
Total revenues		$	2,847	$	3,884	$	378	$	7,109

	Six Months Ended June 30, 2021
(in millions)		Technology & Analytics Solutions		Research & Development Solutions		Contract Sales & Medical Solutions		Total
Revenues:
Americas		$	1,235	$	1,969	$	164	$	3,368
Europe and Africa		1,155		950		91		2,196
Asia-Pacific		311		840		132		1,283
Total revenues		$	2,701	$	3,759	$	387	$	6,847

No individual customer represented 10% or more of consolidated revenues for the three and six months ended June 30, 2022 or 2021.

Transaction Price Allocated to the Remaining Performance Obligations

As of June 30, 2022, approximately $28.7 billion of revenue is expected to be recognized in the future from remaining performance obligations. The Company expects to recognize revenue on approximately 30% of these remaining performance obligations over the next twelve months, with the balance recognized thereafter. The customer contract transaction price allocated to the remaining performance obligations differs from backlog in that it does not include wholly unperformed contracts under which the customer has a unilateral right to cancel the arrangement.

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3. Trade Accounts Receivable, Unbilled Services and Unearned Income

Trade accounts receivables and unbilled services consist of the following:

(in millions)	June 30, 2022		December 31, 2021
Billed	$	1,261	$	1,275
Unbilled services	1,446		1,309
Trade accounts receivable and unbilled services	2,707		2,584
Allowance for doubtful accounts	(28)		(33)
Trade accounts receivable and unbilled services, net	$	2,679	$	2,551

Unbilled services and unearned income were as follows:

(in millions)	June 30, 2022		December 31, 2021		Change
Unbilled services	$	1,446	$	1,309	$	137
Unearned income	(1,810)		(1,825)		15
Net balance	$	(364)	$	(516)	$	152

Unbilled services, which is comprised of approximately 61% and 62% of unbilled receivables and 39% and 38% of contract assets as of June 30, 2022 and December 31, 2021, respectively, increased by $137 million as compared to December 31, 2021. Contract assets are unbilled services for which invoicing is based on the timing of certain milestones related to service contracts for clinical research whereas unbilled receivables are billable upon the passage of time. Unearned income decreased by $15 million over the same period resulting in an increase of $152 million in the net balance of unbilled services and unearned income between December 31, 2021 and June 30, 2022. The change in the net balance is driven by the difference in timing of revenue recognition in accordance with ASC 606, Revenue from Contracts with Customers, primarily related to the Company’s Research & Development Solutions contracts (which is based on the percentage of costs incurred) versus the timing of invoicing, which is based on certain milestones.

Bad debt expense recognized on the Company’s receivables and unbilled services was de minimis for the three and six months ended June 30, 2022 and 2021.

4. Goodwill

The following is a summary of goodwill by reportable segment for the six months ended June 30, 2022:

(in millions)	Technology & Analytics Solutions		Research & Development Solutions		Contract Sales & Medical Solutions		Consolidated
Balance as of December 31, 2021	$	11,337	$	1,802	$	162	$	13,301
Business combinations	72		237		—		309
Impact of foreign currency fluctuations and other	(471)		(25)		(10)		(506)
Balance as of June 30, 2022	$	10,938	$	2,014	$	152	$	13,104

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5. Derivatives

The fair values of the Company’s derivative instruments and the line items on the accompanying condensed consolidated balance sheets to which they were recorded are summarized in the following table:

(in millions)	Balance Sheet Classification	June 30, 2022						December 31, 2021
		Assets		Liabilities		Notional		Assets		Liabilities		Notional
Derivatives designated as hedging instruments:
Foreign exchange forward contracts	Other current assets and liabilities	$	—	$	10	$	122	$	—	$	3	$	110
Interest rate swaps	Other current assets, other assets and liabilities	35		—		1,800		4		24		1,800
Total derivatives		$	35	$	10			$	4	$	27

The pre-tax effect of the Company’s cash flow hedging instruments on other comprehensive income is summarized in the following table:

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2022		2021		2022		2021
Foreign exchange forward contracts	$	(5)	$	(2)	$	(7)	$	(4)
Interest rate swaps	15		3		55		13
Total	$	10	$	1	$	48	$	9

The amount of foreign exchange gains related to the net investment hedge included in the cumulative translation adjustment component of accumulated other comprehensive (loss) income (“AOCI”) for the six months ended June 30, 2022 and 2021 was $466 million and $206 million, respectively.

6. Fair Value Measurements

The Company records certain assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy that prioritizes the inputs used to measure fair value is described below. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

•Level 1 — Quoted prices in active markets for identical assets or liabilities.

•Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

•Level 3 — Unobservable inputs that are supported by little or no market activity. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

The carrying values of cash, cash equivalents, accounts receivable and accounts payable approximated their fair values as of June 30, 2022 and December 31, 2021 due to their short-term nature. As of June 30, 2022 and December 31, 2021, the fair value of total debt approximated $12,050 million and $12,255 million, respectively, as determined under Level 1 and Level 2 measurements for these financial instruments.