IQVIA Holdings (NYSE:IQV) reported its third-quarter results on Monday, Oct. 22. All of the company's key metrics continued to head in the right direction, but management wowed investors by reporting record growth in contract bookings. The strong demand helped IQVIA to end the quarter with a backlog of projects worth more than $16 billion.

IQVIA Holdings Q3 results: The raw numbers

Metric

Q3 2018

Q3 2017

Change (YOY)

Revenue

$2.59 billion

$2.47  billion 

5.2%

Adjusted earnings before interest, taxes, depreciation, and amortization

$561 million

$513 million

9.4%

Adjusted net income

$294  million

$260 million

13%

Adjusted earnings per share

$1.42

$1.19

19%

Data source: IQVIA Holdings. YOY = year over year.

Man picking coins out of a small bonsai tree

Image source: Getty Images.

What happened with IQVIA this quarter?

  • Technology and Analytics Solutions (TAS) jumped 13% to $1.01 billion. The big gain was driven in part by acquisitions. 
  • Research and Development Solutions (R&DS) revenue increased 3% to $1.38 billion.
  • Revenue from Contract Sales and Medical Solutions fell 13% to $198 million.
  • Total revenue of $2.59 billion came in at the high end of management's guidance range.
  • Adjusted EBITDA increased by 9.4% to $561 million. This figure also compared favorably to guidance. 
  • The company repurchased $133 million worth of stock during the quarter. When combined with other buybacks, diluted shares outstanding were down 5.5% compared to the year-ago period. The total buyback authorization at quarter-end was $889 million.
  • On the conference call with investors, management touted that R&DS bookings grew 40% to $1.7 billion. This was a record result and helped the all-important book-to-bill ratio jump to 1.69.
  • The R&DS backlog at quarter-end was $16.4 billion.

What management had to say

CEO Ari Bousbib was thrilled with the company's operational excellence:

We delivered another quarter of strong financial performance, with solid core growth in our R&DS and TAS segments. In R&DS, we had a record quarter of contracted services net new business, which positions us well to deliver on our merger synergy targets exiting 2019. Our technology business continues its strong momentum, driven by deals such as the recent milestone agreement with Roche to deploy and use IQVIA commercial technologies globally, and by the launch of our clinical technologies suite, which we are developing on Salesforce.

Looking forward

Another strong quarter allowed management to tweak its full-year guidance yet again: 

Metric New 2018 Forecast  Change From Previous Guidance at Midpoint
Revenue $10.335 billion to $10.385 billion $0
Adjusted EBITDA $2.195 billion to $2.225 billion $10 million
Adjusted EPS $5.45 to $5.55 $0.05

Data source: IQVIA Holdings. 

Management was quick to point out that currency movements are knocking the top line down by about $35 million, too. 

Overall, IQVIA's results clearly show that the company is having success at attracting new business while it continues to raise margins and buy back stock. That's a powerful combination that looks sustainable and could drive double-digit profit growth for the foreseeable future.

Brian Feroldi has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Salesforce.com. The Motley Fool has a disclosure policy.