IQVIA Holdings Inc. (NYSE:IQV)

Current Income Tax Expense

The current income tax expense demonstrates a consistent upward trend over the five-year period. Starting at $250 million in 2018, it increased modestly to $259 million in 2019, then slightly decreased to $244 million in 2020. However, from 2020 onwards, there is a significant rise, reaching $309 million in 2021 and peaking at $382 million in 2022. This pattern suggests an increasing current tax burden, particularly in the latter years.

Deferred Income Tax Benefit

The deferred income tax shows a benefit (negative expense) throughout the entire period, although the magnitude of this benefit has been declining over time. In 2018, the deferred benefit was -$191 million, which reduced to -$143 million in 2019. It increased slightly to -$172 million in 2020 but then followed a declining trend to -$146 million in 2021 and further to -$122 million in 2022. This decreasing deferred benefit indicates a diminishing offset against the current tax expense.

Total Income Tax Expense

The total income tax expense, which combines current expense and deferred tax, exhibits significant variability but an overall increasing trajectory. It rose sharply from $59 million in 2018 to $116 million in 2019, then declined to $72 million in 2020. Subsequently, it increased considerably in 2021 to $163 million and more than doubled to $260 million in 2022. This indicates growing tax liabilities, driven primarily by the rising current tax expense and the reducing deferred benefits.

Summary of Trends and Insights

The data reveals a rising tax cost for the company, with current expenses steadily increasing after 2020 while deferred tax benefits diminish. The fluctuation in total income tax expense corresponds closely to these movements, reflecting a more substantial tax impact on reported earnings in recent years. The decline in deferred tax benefits may imply changes in temporary differences or tax planning strategies. The growth in current expense, especially notable in 2021 and 2022, could be influenced by increased taxable income or shifts in tax regulations. Overall, the combined effect points to an escalating tax expense burden over the analyzed timeframe.

Income Tax Rates Analysis

The United States statutory income tax rate remained constant at 21% throughout the five-year period examined, indicating no change in the legal tax framework applicable to the entity within this timeframe.

The effective income tax rate exhibited notable fluctuations over the same period. In 2018, the effective tax rate was significantly lower than the statutory rate, at 17.99%, suggesting the presence of tax benefits or deductions reducing the tax burden that year.

In 2019, there was a sharp increase in the effective tax rate to 32.95%, exceeding the statutory rate. This spike could be attributed to a shift in taxable income recognition, changes in tax provisions, or the effect of non-deductible expenses or other temporary differences.

For 2020, the effective tax rate decreased markedly to 19.3%, falling below the statutory rate once again. This reduction may reflect the impact of tax planning strategies, the utilization of tax credits, or other favorable adjustments affecting tax expense.

In 2021, the effective income tax rate further declined to 14.45%, the lowest point within the data range. Such a reduction suggests a substantial decrease in tax expense relative to income, possibly due to significant tax incentives, restructuring, or changes in deferred tax assets and liabilities.

In 2022, the effective rate increased to 19.08%, still below the statutory rate but higher than the immediate prior year. This increase might indicate a partial reversal of favorable tax effects or new tax charges impacting overall tax expense.

Overall, the effective income tax rate demonstrates variability and does not consistently align with the statutory rate, reflecting dynamic tax planning outcomes, fluctuating tax regulations, or changing income compositions over the observed period.

Net operating loss and capital loss carryforwards

There is a consistent declining trend in net operating loss and capital loss carryforwards over the five-year period, decreasing from $244 million in 2018 to $145 million in 2022, indicating a reduction in available loss carryforwards for tax purposes.

Tax credit carryforwards

Tax credit carryforwards increased steadily from $300 million in 2018 to a peak of $375 million in 2021 before falling to $295 million in 2022, suggesting the company utilized some credits after growth in prior years.

Accrued expenses and unearned income

The accrued expenses and unearned income show minor fluctuations with a moderate increase, rising from $70 million in 2018 to $90 million in 2022, signaling a gradual buildup in these liabilities.

Employee benefits

Employee benefits expenses demonstrated variability, initially decreasing from $181 million in 2018 to $168 million in 2019, then rising significantly to $228 million in 2020 before slightly declining to $202 million in 2022. This indicates increased investment in employee-related costs during the middle years.

Lease liability

Lease liabilities appear from 2019 onward, peaking at $139 million in 2020 and then declining to $73 million by 2022, implying a reduction in lease obligations over time.

Foreign exchange on debt instruments

Foreign exchange impacts on debt instruments show sporadic presence with a notable amount of $143 million in 2020 and negative values in 2021 and 2022 (-$36 million and -$125 million respectively), reflecting foreign currency fluctuations affecting debt valuation.

U.S. interest expense limitation

This item appears from 2020, decreasing steadily from $75 million in 2020 to $30 million in 2022, suggesting improved management or reduced applicability of interest expense limitations for tax purposes.

Other (liabilities and assets)

Other liabilities and assets display irregular values across years, with increases and decreases but without a clear trend, indicating minor or miscellaneous fluctuations in various accounts.

Deferred income tax assets

Deferred income tax assets show an increasing trend from $846 million in 2018 to a peak of $1,303 million in 2020, followed by a decline to $887 million in 2022, possibly due to changes in anticipated future taxable income or adjustments in tax positions.

Valuation allowance for deferred income tax assets

The valuation allowance increased from -$226 million in 2018 to -$306 million in 2020 before decreasing to -$257 million in 2022. This suggests periodic reassessments of the realizability of deferred tax assets.

Deferred income tax assets, net of valuation allowance

The net deferred tax assets grew from $620 million in 2018 to $997 million in 2020 before decreasing to $630 million in 2022, mirroring the changes in both deferred tax assets and valuation allowances.

Amortization and depreciation

Amortization and depreciation expenses steadily declined from -$1,209 million in 2018 to -$727 million in 2022, indicating reduced amortizable or depreciable asset bases or changes in accounting strategies over the period.

Lease right-of-use assets

Lease right-of-use assets appear starting in 2019, peaking at -$133 million in 2020 then decreasing to -$61 million in 2022, consistent with the trends in lease liabilities, reflecting derecognition or amortization of lease assets.

Deferred income tax liabilities

Deferred income tax liabilities decline steadily from -$1,247 million in 2018 to -$976 million in 2022, suggesting a reduction in future tax obligations related to temporary differences.

Net deferred income tax assets (liabilities)

The net deferred income tax position, which is negative throughout, moves from -$627 million in 2018 to -$346 million in 2022, showing an improvement in net tax positions despite being a net liability, but with some volatility in the intervening years.

Deferred Income Tax Assets

The deferred income tax assets exhibited minor fluctuations over the five-year period. Starting at 109 million USD at the end of 2018, the assets gradually increased to a peak of 124 million USD in 2021 before slightly declining to 118 million USD in 2022. This trend suggests relatively stable asset levels with modest growth and a slight downward adjustment in the most recent year.

Deferred Income Tax Liabilities

The deferred income tax liabilities showed a more pronounced downward trend from 2018 through 2020, decreasing sharply from 736 million USD in 2018 to 338 million USD in 2020. However, in the subsequent years, this trend reversed, with liabilities rising to 410 million USD in 2021 and further to 464 million USD in 2022. Despite the partial recovery, the liabilities in 2022 remained substantially below the 2018 levels, indicating an overall reduction in deferred tax liabilities compared to the beginning of the period.

General Observations

The period from 2018 to 2020 was characterized by a reduction in deferred income tax liabilities, which may reflect changes in tax positions or temporary differences between accounting and tax treatments. Concurrently, deferred income tax assets remained relatively stable with a slight upward bias until 2021. The increase in deferred income tax liabilities after 2020 suggests adjustments or shifts in tax planning or timing of taxable events. Overall, both assets and liabilities have remained within certain ranges without extreme volatility, indicating moderate changes in deferred tax balances over the observed years.

The financial data reveals notable trends in the company's asset base, liabilities, equity, and net income over the five-year period from 2018 to 2022. Both reported and adjusted figures provide insight into the company's evolving financial position, inclusive of adjustments for annual reported and deferred income taxes.

Total Assets

Reported total assets increased steadily each year, rising from US$22,549 million in 2018 to US$25,337 million in 2022. This represents a cumulative growth of approximately 12.3% over the period. Adjusted total assets follow a very similar upward trajectory, slightly lower in magnitude but closely tracking reported values, increasing from US$22,440 million in 2018 to US$25,219 million in 2022.

Total Liabilities

Liabilities also exhibit a systematic upward trend throughout these years. Reported total liabilities grew from US$15,595 million in 2018 to US$19,572 million in 2022, marking an increase of about 25.5%. Adjusted total liabilities show a consistent pattern with reported figures but are somewhat lower, moving from US$14,859 million in 2018 to US$19,108 million in 2022. The growth rate in liabilities outpaces that of assets, indicating increased leverage.

Equity Attributable to IQVIA Holdings Inc.’s Stockholders

Equity shows a declining trend over the period. Reported equity decreased from US$6,714 million in 2018 to US$5,765 million in 2022, a reduction of nearly 14.1%. Adjusted equity similarly declined, from US$7,341 million in 2018 to US$6,111 million in 2022. The decline in equity, contrasted with the increase in liabilities, suggests changes in capital structure that may warrant further examination.

Net Income Attributable to IQVIA Holdings Inc.

Net income displays significant variability and an overall upward trend, especially notable in the later years. Reported net income was relatively modest in 2018 and 2019, at US$259 million and US$191 million respectively, before rising to US$279 million in 2020 and then sharply increasing to US$966 million in 2021 and further to US$1,091 million in 2022. Adjusted net income follows a similar pattern but with generally lower values: a modest US$68 million in 2018, decreasing slightly to US$48 million in 2019, then increasing to US$107 million in 2020, followed by a substantial jump to US$820 million in 2021 and US$969 million in 2022. The dramatic growth in net income in the last two years suggests improved profitability after taking into account adjustments for deferred and reported income taxes.

Overall, the company demonstrates growth in its asset base and liabilities, alongside a decline in equity. The substantial rise in adjusted and reported net incomes in recent years could reflect operational improvements or tax-related adjustments enhancing profitability. The contrasting movements between growing liabilities and shrinking equity highlight a trend toward increased leverage and warrant detailed financial strategy review.

Net Profit Margin

The reported net profit margin exhibits a general upward trend from 2.49% in 2018 to 7.57% in 2022, with a notable acceleration starting in 2021. The adjusted net profit margin follows a similar pattern, increasing from a low of 0.43% in 2019 to 6.72% by 2022, indicating improved profitability when removing one-time or non-recurring items. The gap between reported and adjusted margins narrows significantly starting in 2021, suggesting that adjustments had a greater effect in earlier years.

Total Asset Turnover

Both reported and adjusted total asset turnover ratios remain stable over the period, fluctuating marginally between 0.46 and 0.57. This consistency indicates a steady efficiency in utilizing assets to generate revenue, with a slight improvement in asset utilization noted from 2021 onward.

Financial Leverage

The reported financial leverage ratio increases steadily from 3.36 in 2018 to 4.39 in 2022, reflecting a growing reliance on debt or other liabilities relative to equity. Adjusted leverage shows a similar upward trajectory, rising from 3.06 to 4.13, confirming increased leverage after adjusting for certain items. This rising leverage suggests a more aggressive capital structure over time.

Return on Equity (ROE)

Reported ROE rises substantially from 3.86% in 2018 to 18.92% in 2022, with a significant jump observed between 2020 and 2021. Adjusted ROE follows a comparable pattern, increasing from 0.93% to 15.86%, indicating improved returns to shareholders on an operational basis. The sizable increase in both reported and adjusted ROE from 2020 onward points to enhanced profitability and efficient use of equity capital.

Return on Assets (ROA)

Reported ROA shows steady growth from 1.15% in 2018 to 4.31% in 2022. Adjusted ROA also increases from 0.3% to 3.84% over the same period. Both measures indicate progressive improvement in asset profitability, with a particularly notable inflection after 2020, aligning with trends observed in profitability and operational efficiency metrics.

Reported Net Income Attributable to IQVIA Holdings Inc.

The reported net income shows a fluctuating trend from 2018 to 2019, decreasing from 259 million US dollars to 191 million US dollars. From 2019 onwards, the net income exhibited a significant upward trajectory, reaching 279 million in 2020, then sharply increasing to 966 million in 2021, and further to 1091 million in 2022. This indicates substantial growth in profitability in the most recent years.

Adjusted Net Income Attributable to IQVIA Holdings Inc.

The adjusted net income also declined slightly between 2018 and 2019, dropping from 68 million US dollars to 48 million US dollars. Subsequently, it increased to 107 million in 2020, followed by a dramatic rise to 820 million in 2021 and further to 969 million in 2022. The adjusted figures mirror the pattern observed in reported net income, highlighting improved profitability after adjustments.

Reported Net Profit Margin

The reported net profit margin decreased from 2.49% in 2018 to 1.72% in 2019. It recovered somewhat to 2.46% in 2020 before experiencing a pronounced increase to 6.96% in 2021 and continuing to 7.57% in 2022. This upward trend reflects enhanced operational efficiency or improved revenue quality contributing to higher profitability relative to sales.

Adjusted Net Profit Margin

The adjusted net profit margin follows a similar pattern to the reported margin, starting at 0.65% in 2018 and declining to 0.43% in 2019. It rose to 0.94% in 2020, then showed significant improvement to 5.91% in 2021 and further to 6.72% in 2022. This increase indicates that underlying earnings, excluding certain tax-related or non-recurring items, have strengthened markedly over recent years.

The analysis of the adjusted financial data over the five-year period reveals several noteworthy trends concerning the company's asset base and efficiency metrics.

Total Assets

Both reported and adjusted total assets demonstrate a consistent upward trajectory from 2018 to 2022. Reported total assets increased from $22,549 million in 2018 to $25,337 million in 2022, indicating a cumulative growth of approximately 12.4%. Adjusted total assets follow a parallel trend, rising from $22,440 million to $25,219 million during the same period. The close alignment between reported and adjusted values suggests minimal impact from deferred income tax adjustments on the total asset figures.

Total Asset Turnover

Total asset turnover ratios, both reported and adjusted, exhibit a relatively stable pattern with subtle fluctuations. The ratio commenced at 0.46 in 2018 and maintained this level through 2020. In 2021, a notable improvement was observed as the ratio increased to 0.56, followed by a marginal rise to 0.57 in 2022. This enhancement indicates improved efficiency in generating revenues relative to the asset base during the latter years of the analyzed period. The identical values for reported and adjusted ratios highlight that the income tax adjustments did not materially affect the asset turnover metric.

Overall, the data indicates steady growth in the asset base accompanied by an improvement in asset utilization efficiency in recent years. The deferred income tax adjustments appear to have a negligible effect on the core asset and turnover figures, reinforcing the robustness of the company's operational performance as reflected through these indicators.

The financial data over the five-year period indicates several notable trends in the company's asset base, equity position, and financial leverage, both on a reported and adjusted basis.

Total Assets

The reported total assets show a gradual increase from US$22,549 million at the end of 2018 to US$25,337 million by the end of 2022. The adjusted total assets follow a similar trajectory, starting at US$22,440 million in 2018 and rising consistently to US$25,219 million in 2022. This steady growth reflects a consistent expansion in the company’s asset base over the period analyzed.

Equity Attributable to Stockholders

The reported equity attributable to stockholders displays a declining trend overall, decreasing from US$6,714 million in 2018 to US$5,765 million in 2022. There is a slight fluctuation between 2019 and 2021, including a minor increase in 2021, but the general trend is downward. The adjusted equity figures also mirror this downward movement, shrinking from US$7,341 million in 2018 to US$6,111 million in 2022, with a similar pattern of minor recovery mid-period before continuing the decline.

Financial Leverage

Financial leverage, computed as a ratio, increases over the period under both the reported and adjusted bases. Reported financial leverage grows from 3.36 in 2018 to 4.39 in 2022, with notable rises particularly after 2019. Adjusted financial leverage also rises from 3.06 to 4.13 in the same timeframe. The increasing leverage ratios suggest that the company is utilizing more debt relative to equity to finance its assets, indicating a higher financial risk profile over time.

In summary, while total assets have steadily grown, the equity base has declined moderately when adjusted for reported and deferred tax considerations. This divergence results in an increasing financial leverage ratio, implying a shift towards greater reliance on debt financing. These patterns may warrant closer monitoring of the company’s capital structure and risk exposure going forward.

The financial data reveals several noteworthy trends related to the reported and adjusted figures for net income, equity, and return on equity (ROE) over the five-year period from 2018 to 2022.

Net Income

The reported net income attributable to the company exhibited fluctuation in the initial years, decreasing from 259 million USD in 2018 to 191 million USD in 2019, then increasing to 279 million USD in 2020. A significant rise occurred in 2021, with reported net income reaching 966 million USD, followed by a further, though more modest, increase to 1,091 million USD in 2022.

Adjusted net income followed a similar, albeit more subdued pattern with lower absolute values. It declined from 68 million USD in 2018 to 48 million USD in 2019, increased to 107 million USD in 2020, and then sharply rose to 820 million USD in 2021 and 969 million USD in 2022. This trend suggests substantial improvements in profitability, especially in the last two years, when adjusting for certain factors affecting reported net income.

Equity

Reported equity attributable to stockholders demonstrated a gradual decrease across the period. It started at 6,714 million USD in 2018, decreased to just over 6,000 million USD by 2020, showed a minor recovery to 6,042 million USD in 2021, and then fell again to 5,765 million USD in 2022.

Adjusted equity also showed a declining trend but remained consistently higher than reported equity. Beginning at 7,341 million USD in 2018, it decreased annually to 6,111 million USD in 2022. The narrower decrease compared to reported equity indicates adjustments involving equity figures that somewhat mitigate the decline.

Return on Equity (ROE)

Reported ROE showed a rising trend over the five years, starting modestly at 3.86% in 2018, declining to 3.18% in 2019, then improving steadily to 4.65% in 2020, and sharply increasing to nearly 16% in 2021 and almost 19% in 2022. This marks a considerable enhancement in the efficiency with which the company generated profits from reported equity.

Adjusted ROE exhibited a similar pattern but with comparatively lower percentages. It began at 0.93% in 2018, dipped slightly in 2019, and increased gradually to 1.72% in 2020. Subsequently, it surged significantly to 12.96% in 2021 and 15.86% in 2022. This increase aligns with the trends seen in adjusted net income growth and indicates improved profitability after adjusting for income tax and related factors.

Overall, the data indicates that despite a reduction in both reported and adjusted equity over the years, the company has markedly improved its net income and profitability ratios, particularly since 2020. Significant increases in both reported and adjusted net income and ROE during 2021 and 2022 suggest strengthened operational performance or improved accounting adjustments affecting income tax. The adjustments applied to net income and equity figures smooth out some volatility and depict a more conservative measure of performance that still reflects strong recent improvements.

Reported net income attributable to IQVIA Holdings Inc.

The reported net income demonstrates an overall upward trend from 2018 through 2022. Starting at 259 million USD in 2018, the income decreased to 191 million USD in 2019, followed by a moderate increase to 279 million USD in 2020. A substantial rise occurred in 2021, reaching 966 million USD, and it continued to grow to 1,091 million USD in 2022. This suggests significant improvement in profitability in the latter years of the period.

Adjusted net income attributable to IQVIA Holdings Inc.

The adjusted net income follows a similar growth pattern but at lower levels compared to reported net income. Beginning at 68 million USD in 2018, the figure decreased slightly to 48 million USD in 2019, then increased to 107 million USD in 2020. A marked expansion occurred in 2021 to 820 million USD and further increased to 969 million USD in 2022. The adjustment reveals a smoother but consistent acceleration in net income in the last two years.

Reported total assets

The reported total assets exhibit steady growth over the five-year period. From 22,549 million USD in 2018, assets consistently increased year-over-year, reaching 25,337 million USD in 2022. The incremental growth suggests ongoing asset accumulation or acquisition activities supporting the business expansion or operational capacity.

Adjusted total assets

The adjusted total assets trend closely mirrors the reported total assets, starting at 22,440 million USD in 2018 and progressing to 25,219 million USD in 2022. The small variances between reported and adjusted assets indicate minor adjustments, but the overall upward trajectory remains consistent, reinforcing the pattern of asset growth over the analyzed period.

Reported Return on Assets (ROA)

The reported ROA shows initial volatility with a decline from 1.15% in 2018 to 0.82% in 2019, followed by a recovery to 1.14% in 2020. A substantial increase is observed in 2021 at 3.91%, continuing to 4.31% in 2022. This indicates improving efficiency in generating profit relative to assets, especially notable in the last two years.

Adjusted Return on Assets (ROA)

The adjusted ROA exhibits a consistent increase over the period. From 0.3% in 2018, it dipped slightly to 0.21% in 2019, then progressively rose each year to 0.44% in 2020, 3.34% in 2021, and 3.84% in 2022. This pattern reflects improved operational performance when factoring in adjustments, with significant gains particularly in 2021 and 2022, albeit slightly lower than the reported ROA values.