IQV

IQVIA is a global leader in clinical research and healthcare data with durable, recurring demand. Revenue compounded steadily from $13.9B in FY2021 to $16.3B in FY2025 (+5.9% YoY), and management reports ~$34.2B of remaining performance obligations as of December 31, 2025, giving good multi-year visibility. The Technology & Analytics Solutions segment grew 7.6% in 2025, partly offsetting Research & Development Solutions, which management says was held back by client cautiousness amid macro uncertainty that 'slowed customer decision-making.' Returns on capital are strong (ROE 20.9%) and the company generated $2.65B of operating cash flow while repurchasing $1.24B of stock, shrinking share count 3.6%.

The problem is that the high-quality top line is not flowing through to the bottom line. Net income was essentially flat at $1.36B (-0.9% YoY) and operating income also fell 0.9%, so 2025 EPS growth (+4.7% to $7.84) was driven by buybacks rather than profit growth; operating margin sits at only 13.4% and net margin at 8.3%. The balance sheet also warrants caution: liabilities are 3.59x equity, long-term debt is $13.9B, the current portion of debt jumped 60.7%, and current liabilities ($8.34B) exceed current assets ($6.25B), leaving negative working capital. The company drew $800M of its $2B revolver and pays no dividend, with debt covenants restricting capital returns.