IQVIA Holdings Inc. (NYSE:IQV)

Goodwill

The goodwill value exhibited a consistent upward trend from 11,800 million USD in 2018 to 13,921 million USD in 2022, representing a steady increase each year. This indicates ongoing acquisitions or positive adjustments within the company's intangible assets.

Client Relationships and Backlog

Client relationships and backlog showed gradual growth, rising from 4,620 million USD in 2018 to 5,339 million USD in 2022. This steady increase suggests strengthening customer contracts and future revenue visibility over time.

Software and Related Assets

Software and related assets experienced substantial growth, increasing from 1,279 million USD in 2018 to 3,106 million USD in 2022. The sharp upward trend may reflect increased investment in technology and software development, highlighting a strategic focus on digital capabilities.

Trademarks, Trade Names, and Other

These assets remained relatively stable, with minor fluctuations around mid-500 million USD. The value was 526 million USD in 2018 and ended slightly lower at 545 million USD in 2022, indicating stable valuation with no significant changes in trademark assets.

Databases

Database assets displayed minimal variation over the period, beginning at 1,828 million USD in 2018 and slightly decreasing to 1,817 million USD in 2022. This suggests a steady asset base with little change in valuation or expansion in database resources.

Non-Compete Agreements

Non-compete agreements showed some fluctuations, peaking at 32 million USD in 2019 but dropping to 17 million USD in 2021 before partially recovering to 23 million USD in 2022. The volatility may reflect varying levels of acquisitions or contract renewals involving non-compete arrangements.

Definite-Lived Identifiable Intangible Assets, Gross Amount

These assets increased steadily from 8,280 million USD in 2018 to 10,830 million USD in 2022, showing the company's continuous addition or recognition of definite-lived intangible assets during the period.

Accumulated Amortization

Accumulated amortization grew from -2,347 million USD in 2018 to -6,010 million USD in 2022, reflecting the ongoing amortization expense associated with the company's definite-lived intangible assets over time.

Definite-Lived Identifiable Intangible Assets, Net Amount

Despite the increase in gross intangible assets, the net amount after amortization declined from 5,933 million USD in 2018 to 4,820 million USD in 2022, indicating that amortization expenses have outpaced the additions to definite-lived intangibles.

Trade Name and Indefinite-Lived Other Identifiable Intangible Assets

Values for trade names and indefinite-lived other identifiable intangible assets were consistently small and constant at 18 million USD, with data missing for the last two years, suggesting either reclassification or a lack of significant changes.

Other Identifiable Intangible Assets

Other identifiable intangible assets mirrored the net definite-lived intangible assets, decreasing from 5,951 million USD in 2018 to 4,820 million USD in 2022, highlighting the impact of amortization.

Goodwill and Other Identifiable Intangible Assets

The combined total of goodwill and other identifiable intangible assets increased moderately from 17,751 million USD in 2018 to 18,741 million USD in 2022, driven mainly by the growth in goodwill despite the decline in net definite-lived analytics.

Total Assets

The reported total assets demonstrate a steady increase over the five-year period, rising from US$22,549 million in 2018 to US$25,337 million in 2022. This growth is gradual and consistent, indicating an overall expansion in the asset base. In contrast, the adjusted total assets, which presumably exclude goodwill or intangible assets, show more modest growth. Adjusted total assets increased from US$10,749 million in 2018 to US$11,416 million in 2022, with a slight dip in 2021 before recovering by 2022.

Equity Attributable to IQVIA Holdings Inc.’s Stockholders

The reported equity attributable to the company's stockholders exhibits a declining trend over the period. Starting at US$6,714 million in 2018, it decreases to US$5,765 million by 2022. The equity saw a more significant drop between 2018 and 2019, followed by relative stabilization at around US$6,000 million through 2021, before declining again in 2022.

In contrast, the adjusted equity values show a markedly different pattern, with negative figures throughout the period. The adjusted equity declines steadily from -US$5,086 million in 2018 to -US$8,156 million in 2022. This deepening negative equity suggests that the adjustments, likely related to goodwill or intangible asset write-downs, erode the company's net equity position significantly over time.

Insights

The divergence between reported and adjusted figures indicates that intangible assets, including goodwill, constitute a substantial portion of the reported asset base and equity. While total assets grow moderately on both a reported and adjusted basis, the adjustment reveals a negative equity trend, highlighting potential concerns about asset quality or impairment impacts not immediately evident in reported data.

Overall, the company shows asset growth but faces declining equity when adjustments are made for goodwill, reflecting underlying financial pressures or accounting adjustments that diminish shareholder value over the analyzed period.

Total Asset Turnover

The reported total asset turnover exhibits a slight upward trend over the period analyzed, increasing from 0.46 in 2018 to 0.57 in 2022, with a noticeable improvement between 2020 and 2021. The adjusted total asset turnover, which likely accounts for goodwill, shows substantially higher values, nearly doubling the reported figures. This adjusted metric also follows a similar upward trajectory, rising from 0.97 in 2018 to 1.26 in 2022, indicating enhanced efficiency in asset utilization when adjustments are considered.

Financial Leverage

Reported financial leverage demonstrates a consistent upward movement from 3.36 in 2018 to 4.39 in 2022. This suggests an increasing reliance on debt or other liabilities to finance the company's assets. Adjusted financial leverage data is not available for this period, leaving a gap in analysis regarding leverage when goodwill adjustments are applied.

Return on Equity (ROE)

Reported ROE shows a volatile but generally increasing pattern, starting at 3.86% in 2018, decreasing slightly in 2019, and then rising sharply after 2020 to reach 18.92% in 2022. This significant increase in the later years indicates a marked improvement in the company's profitability and effectiveness in generating returns for shareholders. Adjusted ROE figures were not provided, limiting comparative analysis on a goodwill-adjusted basis.

Return on Assets (ROA)

The reported ROA follows a similar trajectory to ROE, remaining relatively low and fluctuating between 0.82% and 1.15% from 2018 to 2020, but then increasing notably to 4.31% in 2022. Adjusted ROA presents higher values throughout, starting from 2.41% in 2018 and rising substantially to 9.56% by 2022. This disparity between reported and adjusted figures signifies that goodwill adjustments materially affect the perceived asset profitability, suggesting the intrinsic earning capacity excluding goodwill is stronger than initially reported.

Overall Insights

The data illustrates overall strengthening operational efficiency and profitability over the five-year period, with both turnover ratios and profitability metrics showing improvement. Increasing financial leverage may indicate more aggressive capital structuring, which aligns with increasing returns on equity. The adjusted metrics, where available, consistently present a more favorable picture, emphasizing the impact of goodwill considerations on financial performance evaluation. The absence of some adjusted figures, particularly for leverage and ROE, limits a full adjusted analysis but does not obscure the clear upward trends in performance measures.

Total assets trends

The reported total assets increased steadily over the five-year period, rising from 22,549 million US dollars in 2018 to 25,337 million US dollars in 2022. The adjusted total assets, which exclude goodwill, also showed a gradual upward trend, growing from 10,749 million US dollars in 2018 to 11,416 million US dollars in 2022. This indicates a consistent increase in the asset base regardless of the adjustment for goodwill.

Total asset turnover trends

The reported total asset turnover ratio showed minor fluctuations. It increased slightly from 0.46 in 2018 to 0.48 in 2019, then dipped back to 0.46 in 2020 before rising more noticeably to 0.56 in 2021 and 0.57 in 2022. This suggests a moderate improvement in the efficiency of revenue generation relative to the reported asset base over the last two years.

In contrast, the adjusted total asset turnover ratio demonstrated a stronger and more consistent upward trend. From 0.97 in 2018, it rose steadily each year to reach 1.26 in 2022. This indicates a marked improvement in asset utilization efficiency when goodwill is excluded, reflecting better operating performance and more effective use of tangible and adjusted assets over time.

Comparative insights

The disparity between reported and adjusted total assets highlights the significant impact of goodwill on the balance sheet. Despite the increase in reported assets, the adjusted asset growth was more modest, pointing to a considerable goodwill component that remained relatively stable from 2018 to 2022.

Similarly, the higher and improving adjusted total asset turnover ratios relative to the reported ones suggest that the core assets excluding goodwill are being managed more effectively. The increasing ratio surpassing 1.0 from 2019 onward indicates that the company generates revenue exceeding the value of these adjusted assets, signifying operational efficiency improvements.

The data reveals several notable trends in the reported and goodwill adjusted financial metrics over the five-year period ending December 31, 2022.

Total Assets

The reported total assets showed a consistent upward trajectory, increasing from US$ 22,549 million in 2018 to US$ 25,337 million in 2022. This reflects a steady growth in the asset base, although the pace of increase appeared to slow somewhat in the last two years.

In contrast, the adjusted total assets, which likely exclude goodwill and other intangible assets, also grew but at a more modest and less consistent rate. From US$ 10,749 million in 2018, adjusted assets rose to US$ 11,416 million in 2022, with some fluctuations including a dip in 2021.

Equity Attributable to Stockholders

Reported equity attributable to IQVIA Holdings Inc.’s stockholders declined over the period, dropping from US$ 6,714 million in 2018 to US$ 5,765 million in 2022. This downward trend indicates a reduction in the book value of equity as reported, which may suggest increasing liabilities or other factors affecting net assets.

Adjusted equity, on the other hand, is consistently negative and shows a deepening deficit from -US$ 5,086 million in 2018 to -US$ 8,156 million in 2022. The persistent negative adjusted equity suggests that after removing goodwill and related adjustments, the company's net asset value is substantially negative and deteriorating, which could indicate potential concerns about the underlying asset quality or financial stability.

Financial Leverage

Reported financial leverage increased steadily from 3.36 in 2018 to 4.39 in 2022, indicating that the company has progressively increased its use of debt relative to equity. Higher leverage ratios imply greater financial risk due to a higher proportion of liabilities in the capital structure.

Adjusted financial leverage data were not available, preventing further analysis in this regard.

Overall, the company exhibits growth in reported total assets alongside a decreasing trend in reported equity, accompanied by increasing financial leverage. The adjusted figures, excluding goodwill, reveal a persistently negative equity position and relatively flat adjusted assets with minor fluctuations. These patterns may imply an increasing reliance on intangible assets with questionable recoverability and growing financial risk. Further investigation into the nature of goodwill and other intangible assets, as well as the drivers of increased leverage, would be advisable to fully understand the financial health and risk profile.

Equity Attributable to Stockholders (Reported)

The reported equity attributable to the stockholders showed a declining trend over the five-year period. It decreased from approximately 6.7 billion USD at the end of 2018 to about 5.8 billion USD by the end of 2022. The most notable drop occurred between 2018 and 2019, with a more gradual decline observed in the subsequent years.

Equity Attributable to Stockholders (Adjusted for Goodwill)

The adjusted equity, which accounts for goodwill, was negative throughout the period and demonstrated a consistent downward trajectory. Starting at -5.1 billion USD in 2018, it worsened annually, reaching -8.2 billion USD by 2022. This indicates an increasing deduction for intangible goodwill assets relative to equity over time.

Reported Return on Equity (ROE)

The reported return on equity exhibited variability but showed a significant upward trend in the latter years. ROE declined from 3.86% in 2018 to 3.18% in 2019, then increased to 4.65% in 2020. A substantial improvement was recorded from 2020 onward, with ROE rising sharply to 15.99% in 2021 and further to 18.92% in 2022. This suggests enhanced profitability relative to reported equity in recent years.

Adjusted Return on Equity (ROE)

No values were provided for adjusted ROE. Consequently, performance evaluation excluding goodwill adjustment cannot be completed in this analysis.

The financial data demonstrates a consistent increase in reported total assets for the company over the five-year period, starting at US$22,549 million in 2018 and reaching US$25,337 million in 2022. This represents a gradual upward trend, with slight slowing between 2020 and 2021. In contrast, adjusted total assets show a more moderate growth trajectory, increasing from US$10,749 million in 2018 to US$11,416 million in 2022. Notably, adjusted total assets experienced a small decline in 2021 before slightly increasing again in 2022, indicating some variance in asset adjustments year-over-year.

Return on Assets (ROA) metrics exhibit distinct trends depending on whether they are reported or adjusted. The reported ROA showed a dip between 2018 and 2019, dropping from 1.15% to 0.82%, followed by a slight recovery in 2020 to 1.14%. From 2020 onwards, there was a substantial increase in reported ROA, reaching 3.91% in 2021 and further improving to 4.31% in 2022. This suggests improved profitability relative to total reported assets in the latter years.

The adjusted ROA follows a similar but more pronounced pattern. Starting higher than reported ROA at 2.41% in 2018, it declined to 1.72% in 2019 before rising to 2.34% in 2020. Significant growth occurred thereafter, with adjusted ROA jumping to 8.48% in 2021 and 9.56% in 2022, reflecting enhanced performance when goodwill and other adjustments are considered. The adjusted metrics indicate stronger asset efficiency and profitability compared to the reported figures.

Total Assets

Reported assets steadily increased over the period, suggesting asset base expansion.

Adjusted assets show modest growth with slight fluctuation, implying variability in asset adjustments.

Return on Assets (ROA)

Reported ROA initially declined but improved significantly after 2020, indicating stronger returns on reported assets.

Adjusted ROA portrays a parallel but more marked improvement, highlighting increased profitability and asset utilization when adjusting for goodwill.