Clinical research company IQVIA (NYSE: IQV) reported Q3 CY2025 results topping the market’s revenue expectations, with sales up 5.2% year on year to $4.1 billion. The company expects the full year’s revenue to be around $16.2 billion, close to analysts’ estimates. Its non-GAAP profit of $3 per share was 0.8% above analysts’ consensus estimates.
Is now the time to buy IQV? Find out in our full research report (it’s free for active Edge members).
IQVIA (IQV) Q3 CY2025 Highlights:
- Revenue: $4.1 billion vs analyst estimates of $4.08 billion (5.2% year-on-year growth, 0.5% beat)
- Adjusted EPS: $3 vs analyst estimates of $2.98 (0.8% beat)
- Adjusted EBITDA: $949 million vs analyst estimates of $946.5 million (23.1% margin, in line)
- The company reconfirmed its revenue guidance for the full year of $16.2 billion at the midpoint
- Management reiterated its full-year Adjusted EPS guidance of $11.90 at the midpoint
- EBITDA guidance for the full year is $3.79 billion at the midpoint, in line with analyst expectations
- Operating Margin: 13.5%, in line with the same quarter last year
- Constant Currency Revenue rose 3.9% year on year, in line with the same quarter last year
- Market Capitalization: $37.15 billion
StockStory’s Take
IQVIA's third quarter results reflected stable operational execution, with revenue and profit slightly ahead of Wall Street expectations. Management identified robust free cash flow generation and a healthy pipeline of clinical trial bookings as primary contributors to the quarter’s performance. CEO Ari Bousbib emphasized improvements in industry demand, noting that net bookings in the clinical segment grew 13% year over year, while the company’s backlog reached $32.4 billion. Bousbib credited disciplined working capital management and a more stable industry environment as key drivers behind the results.
Looking ahead, IQVIA’s guidance rests on expectations for continued momentum in both its clinical research and technology businesses. Management highlighted a calming macro environment and the completion of large pharmaceutical clients’ internal program reviews as supportive factors for the company’s outlook, with Bousbib stating, “I would be surprised if revenue growth in '26 is not at least the same or better than the growth that we are seeing this year.” The company also pointed to ongoing investments in artificial intelligence (AI) and digital infrastructure as essential for supporting future growth.
Key Insights from Management’s Remarks
Management attributed the quarter’s performance to higher clinical trial bookings, the normalization of large pharmaceutical customer behavior, and strength in real-world evidence and AI-driven solutions.
- Clinical bookings acceleration: Net bookings in the clinical research segment rose 13% year over year, supported by a 20% annual increase in requests for proposals (RFPs) and shorter client decision timelines. Management noted this as evidence of recovering industry demand and improved customer confidence.
- Pharma and biotech trends diverge: Large pharmaceutical clients completed program reprioritizations that previously led to elevated cancellations, resulting in more stable pipelines. Meanwhile, improved biotech funding contributed to growth in emerging biopharma bookings, broadening IQVIA’s revenue base.
- AI and digital infrastructure adoption: IQVIA continued deploying AI-enabled solutions for clients and internally. Management cited approximately 90 AI agents in development across 25 use cases, targeting improved efficiency and new service offerings. These initiatives are expected to reduce manual labor and enhance margins over time.
- Real-world evidence momentum: The real-world evidence business experienced strong growth, driven by demand for studies that track drug performance in actual patient populations. Management highlighted several large client wins in this area, including post-market studies and regulatory commitments.
- Segment performance and acquisitions: Technology & Analytics Solutions (TAS) and Contract Sales & Medical Solutions (CSMS) both performed well, with the latter benefiting from recent acquisitions and increased outsourcing of commercial operations by large pharma. Management added that these multiyear engagements span multiple geographies and therapy areas.
Drivers of Future Performance
IQVIA’s outlook is anchored in sustained clinical research demand, expanded AI deployment, and stabilized large pharma pipelines, though margin pressures and evolving customer needs persist.
- Clinical demand stability: Management expects continued steady demand for research and development services, as large pharma and biotech funding environments normalize. The company’s backlog and qualified pipeline are positioned to support future growth, though risks remain from potential project cancellations or delays.
- AI and automation benefits: The company is advancing its AI agent development, with plans for 500 specialized agents by 2027. Management believes these efforts will gradually reduce costs and enhance margins, though the impact will take time to materialize due to the slow pace of deployment and regulatory constraints in clinical processes.
- Margin headwinds and mix: Although AI and offshoring are expected to help margins long term, current results face pressure from a higher mix of lower-margin CSMS business and foreign exchange effects. Management is monitoring cost reduction programs to offset these headwinds while investing in digital transformation.
Catalysts in Upcoming Quarters
Looking ahead, our analyst team will be monitoring (1) the pace of AI agent deployment and its effect on operational efficiency and margins, (2) the persistence of strong clinical trial bookings and whether the qualified pipeline continues to expand, and (3) the integration and performance of recent acquisitions within CSMS. Progress on digital infrastructure upgrades and evolving customer outsourcing trends will also be important factors shaping future performance.
IQVIA currently trades at $218.13, in line with $217.44 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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