Analysis of Reportable Segments
IQVIA Holdings Inc. operates in 3 segments: Technology & Analytics Solutions; Research & Development Solutions; and Contract Sales & Medical Solutions.
Segment Profit Margin
IQVIA Holdings Inc., profit margin by reportable segment
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Technology & Analytics Solutions | 26.98% | 26.35% | 25.03% | 24.54% | 24.73% |
| Research & Development Solutions | 21.40% | 19.53% | 18.19% | 19.71% | 20.64% |
| Contract Sales & Medical Solutions | 5.65% | 9.57% | 7.69% | 6.39% | 7.28% |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Technology & Analytics Solutions Profit Margin Trend
- The profit margin for this segment exhibits a generally upward trend over the five-year span. Starting at 24.73% in 2018, it experiences a slight decline in 2019 to 24.54%, followed by consistent increases each subsequent year, reaching 26.98% by the end of 2022. This suggests a steady improvement in profitability, potentially due to operational efficiencies or favorable market conditions in this segment.
- Research & Development Solutions Profit Margin Trend
- This segment demonstrates some volatility but overall shows a mild downward trend initially, with a decrease from 20.64% in 2018 to a low point of 18.19% in 2020. However, there is a recovery thereafter, with margins improving to 19.53% in 2021 and further rising to 21.4% in 2022. The data indicates challenges in the mid-period that were subsequently addressed, resulting in enhanced profitability towards the latest period.
- Contract Sales & Medical Solutions Profit Margin Trend
- The margin for this segment is the most variable and comparatively the lowest among the three segments. It declines from 7.28% in 2018 to 6.39% in 2019, then increases significantly to 7.69% in 2020 and further to 9.57% in 2021. However, a sharp decline is observed in 2022, with the margin dropping to 5.65%. This fluctuation suggests episodic challenges impacting profitability, possibly due to market dynamics or changes in service delivery costs within this segment.
- Overall Observations
- The Technology & Analytics Solutions segment shows steady growth and strength in profit margins, indicating it may be a core contributor to overall profitability. The Research & Development Solutions segment reveals some mid-term pressures that have been effectively managed to restore growth. Conversely, the Contract Sales & Medical Solutions segment presents considerable volatility with a notable margin contraction in the most recent year, highlighting potential risks or restructuring needs in this area. Collectively, these trends underscore differing performance dynamics and challenges across the business units.
Segment Profit Margin: Technology & Analytics Solutions
IQVIA Holdings Inc.; Technology & Analytics Solutions; segment profit margin calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Segment profit | 1,550) | 1,458) | 1,216) | 1,101) | 1,023) |
| Revenues | 5,746) | 5,534) | 4,858) | 4,486) | 4,137) |
| Segment Profitability Ratio | |||||
| Segment profit margin1 | 26.98% | 26.35% | 25.03% | 24.54% | 24.73% |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Segment profit margin = 100 × Segment profit ÷ Revenues
= 100 × 1,550 ÷ 5,746 = 26.98%
The annual financial data for the Technology & Analytics Solutions segment reveals a consistent upward trend over the five-year period ending in 2022. Both revenue and segment profit have increased steadily each year, indicating growth in the segment's overall performance.
- Segment Profit
- The segment profit rose from US$1,023 million in 2018 to US$1,550 million in 2022. This growth represents a cumulative increase of approximately 51.5% over the five-year timeframe. The profit increments were steady, with the largest increase occurring between 2020 and 2021, rising by US$242 million.
- Revenues
- Revenues also showed a continuous growth trend, moving from US$4,137 million in 2018 to US$5,746 million in 2022. This marks a total increase of about 38.8%. Each year witnessed a positive revenue increment, with the largest annual increase between 2020 and 2021 (US$676 million), suggesting expanding market demand or successful sales growth initiatives.
- Segment Profit Margin
- The segment profit margin exhibited a gradual but consistent improvement throughout the period. Starting at 24.73% in 2018, the margin slightly decreased in 2019 to 24.54% but then improved each subsequent year, reaching 26.98% by 2022. This upward margin trend implies increased operational efficiency or better cost management within the segment, contributing to higher profitability relative to revenues.
Overall, the data indicates that the Technology & Analytics Solutions segment has achieved solid growth in both absolute profit and revenues, alongside enhancing profitability margins. This pattern suggests effective management and a robust market position over the observed years.
Segment Profit Margin: Research & Development Solutions
IQVIA Holdings Inc.; Research & Development Solutions; segment profit margin calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Segment profit | 1,695) | 1,476) | 1,048) | 1,141) | 1,128) |
| Revenues | 7,921) | 7,556) | 5,760) | 5,788) | 5,465) |
| Segment Profitability Ratio | |||||
| Segment profit margin1 | 21.40% | 19.53% | 18.19% | 19.71% | 20.64% |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Segment profit margin = 100 × Segment profit ÷ Revenues
= 100 × 1,695 ÷ 7,921 = 21.40%
The data reveals several noteworthy trends in the Research & Development Solutions segment over the five-year period ending in 2022.
- Segment Profit
- Segment profit experienced some fluctuations, starting at $1,128 million in 2018, slightly increasing to $1,141 million in 2019, then declining to $1,048 million in 2020. Subsequently, there was a significant rebound with a strong upward trend to $1,476 million in 2021 and further growth to $1,695 million in 2022. This indicates a robust recovery and expansion in profitability in the latter years.
- Revenues
- Revenues demonstrated a generally positive trajectory. After rising from $5,465 million in 2018 to $5,788 million in 2019, there was a minor decline to $5,760 million in 2020. This was followed by a substantial increase to $7,556 million in 2021 and a modest rise to $7,921 million in 2022. The data suggest solid revenue growth, particularly from 2020 onward, contributing to the expansion of the segment’s business scale.
- Segment Profit Margin
- The segment profit margin exhibited a decreasing trend initially, dropping from 20.64% in 2018 to 19.71% in 2019, and further down to 18.19% in 2020. Nevertheless, this trend reversed in subsequent years, with the margin increasing to 19.53% in 2021 and further to 21.4% in 2022, reaching the highest level in the observed period. This improvement in profitability ratio indicates enhanced operational efficiency or better cost management in recent years.
Overall, the segment improved its financial performance significantly after 2020, as evidenced by rising profitability and revenues along with increased profit margins. The period post-2020 indicates a recovery phase with strengthened profit generation and expanding revenue base.
Segment Profit Margin: Contract Sales & Medical Solutions
IQVIA Holdings Inc.; Contract Sales & Medical Solutions; segment profit margin calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Segment profit | 42) | 75) | 57) | 52) | 59) |
| Revenues | 743) | 784) | 741) | 814) | 810) |
| Segment Profitability Ratio | |||||
| Segment profit margin1 | 5.65% | 9.57% | 7.69% | 6.39% | 7.28% |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Segment profit margin = 100 × Segment profit ÷ Revenues
= 100 × 42 ÷ 743 = 5.65%
- Revenue Trends
- Revenues exhibited fluctuations over the observed period. Initially, there was a slight increase from 810 million US dollars in 2018 to 814 million in 2019. This was followed by a decline to 741 million in 2020. Subsequently, revenues saw a moderate recovery to 784 million in 2021 but decreased again to 743 million in 2022. Overall, the revenue pattern shows variability with a general downward trend after the peak in 2019.
- Segment Profit Trends
- Segment profit demonstrated an inconsistent trajectory. It started at 59 million US dollars in 2018, dropped to 52 million in 2019, and then increased slightly to 57 million in 2020. A significant improvement occurred in 2021 with segment profit rising to 75 million, before falling sharply to 42 million in 2022. The profit figures reflect volatility with a notable peak in 2021 followed by a substantial decline.
- Segment Profit Margin Analysis
- The segment profit margin followed a pattern consistent with segment profit trends but with more pronounced fluctuations. Beginning at 7.28% in 2018, it decreased to 6.39% in 2019, then rose to 7.69% in 2020. The highest margin was recorded in 2021 at 9.57%, coinciding with the peak segment profit. However, the margin decreased sharply to 5.65% in 2022, indicating reduced profitability relative to revenues during that period.
- Overall Insights
- The data reveal a segment experiencing variable financial performance across five years. Both revenues and segment profit show periods of decline and recovery, with 2021 marking a relative high point for profitability. The subsequent decline in 2022 suggests challenges impacting both absolute profit and profit margins. The reduced margin in 2022 indicates either increased costs, pricing pressures, or other adverse factors affecting profitability in relation to revenue, despite revenues being comparable to prior years. This cyclicality and recent downturn may warrant further investigation into underlying operational or market factors.
Revenues
IQVIA Holdings Inc., revenues by reportable segment
US$ in millions
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Technology & Analytics Solutions | 5,746) | 5,534) | 4,858) | 4,486) | 4,137) |
| Research & Development Solutions | 7,921) | 7,556) | 5,760) | 5,788) | 5,465) |
| Contract Sales & Medical Solutions | 743) | 784) | 741) | 814) | 810) |
| Total | 14,410) | 13,874) | 11,359) | 11,088) | 10,412) |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
The segment revenues exhibit distinct trends across the reporting periods, reflecting varying growth dynamics within each business area.
- Technology & Analytics Solutions
- This segment shows a steady upward trend in revenues from 2018 to 2022. Starting at $4,137 million in 2018, it increased consistently each year, reaching $5,746 million by 2022. The growth appears stable, indicating sustained demand or expansion in this segment over the five-year period.
- Research & Development Solutions
- Revenues for this segment display moderate growth between 2018 and 2020, rising from $5,465 million to $5,760 million. However, a notable acceleration occurs from 2020 onwards, surging to $7,556 million in 2021 and further to $7,921 million in 2022. This suggests an increased investment or demand in research and development services after 2020.
- Contract Sales & Medical Solutions
- In contrast, this segment exhibits relative stability with slight fluctuations over the period. Revenues remain generally around the $800 million mark, starting at $810 million in 2018 and ending at $743 million in 2022, with minor dips notably in 2020 and 2022. This may indicate maturation or limited growth opportunities within this segment.
- Total Revenues
- The aggregate of all segments reflects consistent growth across the five years. Total revenues increase from $10,412 million in 2018 to $14,410 million in 2022. The most significant jump occurs between 2020 and 2021, aligning with the surge observed in Research & Development Solutions, suggesting this segment as a key driver for overall revenue growth.
Segment profit
IQVIA Holdings Inc., segment profit by reportable segment
US$ in millions
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Technology & Analytics Solutions | 1,550) | 1,458) | 1,216) | 1,101) | 1,023) |
| Research & Development Solutions | 1,695) | 1,476) | 1,048) | 1,141) | 1,128) |
| Contract Sales & Medical Solutions | 42) | 75) | 57) | 52) | 59) |
| Total | 3,287) | 3,009) | 2,321) | 2,294) | 2,210) |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Technology & Analytics Solutions
- The segment profit for Technology & Analytics Solutions displayed a consistent upward trend over the five-year period. Starting at $1,023 million in 2018, it increased each year, reaching $1,550 million by the end of 2022. This reflects a sustained growth momentum, with the largest annual increment occurring between 2020 and 2021, suggesting strong performance and possibly strategic enhancements or market expansion during that interval.
- Research & Development Solutions
- Research & Development Solutions experienced fluctuations but overall demonstrated growth from 2018 to 2022. The profit was $1,128 million in 2018 and saw a slight increase in 2019, followed by a decline in 2020 to $1,048 million. Subsequently, the segment rebounded significantly, recording $1,476 million in 2021 and further increasing to $1,695 million in 2022. This pattern indicates a temporary setback in 2020, potentially due to external factors, followed by a robust recovery and acceleration in profitability.
- Contract Sales & Medical Solutions
- The Contract Sales & Medical Solutions segment showed more variability with less clear growth. Starting from a profit of $59 million in 2018, it declined slightly in 2019 and 2020 but increased to $75 million in 2021. In 2022, however, there was a notable decrease to $42 million. This irregular pattern and recent decline could imply challenges within this segment, such as market competition or operational issues impacting profitability.
- Total Segment Profit
- Total segment profit grew steadily throughout the period, rising from $2,210 million in 2018 to $3,287 million in 2022. The increase was particularly pronounced between 2020 and 2021, with a $688 million gain, largely driven by the strong recoveries in both Technology & Analytics Solutions and Research & Development Solutions. Despite the decline in Contract Sales & Medical Solutions in the final year, the overall total continued ascending, indicating the dominance of the first two segments in the company's profitability profile.