Medpace Holdings, Inc. Reports First Quarter 2024 Results
- Revenue increased by 17.7% to $511.0 million in the first quarter of 2024 compared to the prior year.
- Net new business awards were $615.6 million, reflecting a 10.8% increase from the previous year.
- GAAP net income for the first quarter of 2024 was $102.6 million, a substantial rise from $72.9 million in the prior-year period.
- EBITDA increased by 24.6% to $115.7 million in the first quarter of 2024.
- The backlog as of March 31, 2024, grew to $2,907.1 million, an 18.2% increase from the previous year.
- Cash and cash equivalents were $407.0 million at the end of the quarter, with a cash flow of $152.7 million from operating activities.
- Medpace forecasts revenue of $2.150 billion to $2.200 billion for 2024, with GAAP net income expected between $347.0 million to $369.0 million.
- None.
Insights
Medpace Holdings, Inc.'s reported first-quarter financials indicate robust growth, underpinned by a 17.7% increase in revenue year-over-year. The reported backlog conversion rate of 18.2% demonstrates effective use of existing contracts, as this metric reflects the portion of the backlog that has been realized as revenue within the period. The book-to-bill ratio of 1.20x is particularly promising, as it signifies that the company is securing more new contracts than the revenue it is recognizing during the quarter, indicating potential revenue growth in upcoming periods.
From an investor standpoint, the growth in GAAP net income to $102.6 million is a strong signal of profitability, especially when paired with the improvement in net income margin to 20.1% from 16.8%. An increase in EBITDA to $115.7 million further reflects operational efficiency, with the EBITDA margin expanding to 22.6%. For retail investors, these figures are indicative of a company that is successfully managing costs and scaling its operations.
Looking at the balance sheet, a healthy cash and cash equivalents position of $407.0 million coupled with substantial cash flow from operations positions the company well for future investments or share repurchase programs. The provided 2024 financial guidance forecasts continued revenue growth and suggests management's confidence in the company's direction. However, investors should also be cognizant of the increase in SG&A expenses, as this could impact future net income if not managed in line with revenue growth.
The clinical research organization (CRO) industry, where Medpace operates, is characterized by long-term contracts, signified by a company's backlog. Medpace's significant backlog growth to over $2.9 billion underscores its competitive positioning and demand for its services. The net new business awards figure of $615.6 million in this quarter also provides insights into the health of the industry and Medpace's growth trajectory.
For the retail investor, understanding the industry dynamics is key. The CRO industry is increasingly important as pharmaceutical companies outsource more clinical trial work to manage costs and improve efficiency. Medpace's consistent performance in securing new business, as reflected in the book-to-bill ratio, suggests resilience in its market strategy against the backdrop of an industry on an upward trend.
When evaluating Medpace's stock, investors should consider not only the company’s operational performance but also its strategic positioning within the CRO industry. Its performance metrics suggest an ability to capture market share and grow revenue, which could be an indicator of future stock performance. While past performance is not indicative of future results, the robust financial metrics suggest a strong outlook for Medpace in the near term.
-
Revenue of
$511.0 million 17.7% from revenue of$434.1 million 18.2% . -
Net new business awards were
$615.6 million 10.8% from net new business awards of$555.8 million -
First quarter of 2024 GAAP net income was
$102.6 million $3.20 $72.9 million $2.27 20.1% and16.8% for the first quarter of 2024 and 2023, respectively. -
EBITDA was
$115.7 million 24.6% from EBITDA of$92.8 million 22.6% .
First Quarter 2024 Financial Results
Revenue for the three months ended March 31, 2024 increased
Backlog as of March 31, 2024 increased
For the first quarter of 2024, total direct costs were
GAAP net income for the first quarter of 2024 was
EBITDA for the first quarter of 2024 increased
A reconciliation of the Company’s non-GAAP financial measures, including EBITDA and EBITDA margin to the corresponding GAAP measures is provided below.
Balance Sheet and Liquidity
The Company’s Cash and cash equivalents were
2024 Financial Guidance
The Company forecasts 2024 revenue in the range of
Conference Call Details
Medpace will host a conference call at 9:00 a.m. ET, Tuesday, April 23, 2024, to discuss its first quarter 2024 results.
To participate in the conference call, interested parties must register in advance by clicking on this link. While it is not required, it is recommended you join 10 minutes prior to the event start. Upon registration, all telephone participants will receive a confirmation email detailing how to join the conference call, including the dial-in number along with a unique PIN that can be used to access the call.
To access the conference call via webcast, visit the “Investors” section of Medpace’s website at medpace.com. The webcast replay of the call will be available at the same site approximately one hour after the end of the call. A supplemental slide presentation will also be available at the “Investors” section of Medpace’s website prior to the start of the call.
About Medpace
Medpace is a scientifically-driven, global, full-service clinical contract research organization (CRO) providing Phase I-IV clinical development services to the biotechnology, pharmaceutical and medical device industries. Medpace’s mission is to accelerate the global development of safe and effective medical therapeutics through its high-science and disciplined operating approach that leverages regulatory and therapeutic expertise across all major areas including oncology, cardiology, metabolic disease, endocrinology, central nervous system and anti-viral and anti-infective. Headquartered in
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation, statements regarding our forecasted financial results and the effective tax rate used for non-GAAP adjustment purposes. In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as “guidance,” “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” “will,” “would,” “target,” “forecast,” “may,” “could,” “likely,” “anticipate,” “project,” “goal,” “objective,” “potential,” “range,” “estimate,” “preliminary,” “opportunity,” “outlook,” “trend,” “can,” “might,” “drives,” “hope,” “predict” and similar expressions, and variations or negatives of these words. However, the absence of these words does not mean that a statement is not forward-looking.
These forward-looking statements are largely based on management’s current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our financial condition, actual results, performance (including share price performance), or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: the potential loss, delay or non-renewal of our contracts, or the non-payment by customers for services we have performed; the failure to convert backlog to revenue at our present or historical conversion rate(s); the failure to maintain or generate new business awards; fluctuation in our results between fiscal quarters and years; the risks and uncertainties related to disruptions to or reductions in business operations or prospects due to pandemics, epidemics, widespread health emergencies, or outbreaks of infectious diseases; decreased operating margins due to increased pricing pressure or other factors; our failure to perform our services in accordance with contractual requirements, government regulations and ethical considerations; the impact of underpricing our contracts, overrunning our cost estimates or failing to receive approval for or experiencing delays with documentation of change orders; our failure to increase our market share, grow our business, successfully execute our growth strategies or manage our growth effectively; the impact of a failure to retain key executives or other personnel or recruit experienced personnel; the risks associated with our information systems infrastructure, including potential cybersecurity breaches and other disruptions which could compromise patient information or our information; adverse results from customer or therapeutic area concentration; the risks associated with doing business internationally, including the effects of tariffs and trade wars; the risks associated with the Foreign Corrupt Practices Act and other anti-corruption laws; future net losses; the impact of changes in tax laws and regulations; our failure to attract suitable investigators and patients to our clinical trials; the liability risks associated with our research and development services, including risks of liability resulting from harm to patients; inadequate insurance coverage for our operations and indemnification obligations; fluctuations in exchange rates; general economic conditions, including inflation, in the markets in which we operate, including financial market conditions; the impact of unfavorable economic conditions, including conditions caused by the uncertain international economic environment and current and future international conflicts; the impact of a natural disaster or other catastrophic event; negative outsourcing trends in the biopharmaceutical industry and a reduction in aggregate expenditures and research and development budgets; our inability to compete effectively with other CROs; the impact of healthcare reform; the impact of consolidation in the biopharmaceutical industry; our failure to comply with federal, state and foreign healthcare laws; the effect of current and proposed laws and regulations regarding the protection of personal data; our potential involvement in costly intellectual property lawsuits; actions by regulatory authorities or customers to limit the scope of indications related to or withdraw an approved drug, biologic or medical device from the market; and the impact of industry-wide reputational harm to CROs. Moreover, we operate in a very competitive and rapidly changing environment in which new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all important factors on our business or the extent to which any factor, or combination of such factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make.
These and other important factors discussed under the caption “Risk Factors” in Item 1A, Part I of our Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC, and our other reports filed with the SEC could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. We cannot guarantee that any forward-looking statement will be realized. Achievement of anticipated results is subject to substantial risks, uncertainties and inaccurate assumptions. If known or unknown risks or uncertainties materialize or if underlying assumptions prove inaccurate, actual results could vary materially from past results and those anticipated, estimated or projected. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in our filings with the SEC. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events, developments or circumstances cause our views to change. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.
Non-GAAP Financial Measures
Certain financial measures presented in this press release, such as EBITDA and EBITDA margin, are not recognized under generally accepted accounting principles in
EBITDA and EBITDA margin have important limitations as analytical tools and you should not consider them in isolation, or as a substitute for, analysis of our results as reported under
We believe that EBITDA and EBITDA margin are useful to provide additional information to investors about certain material non-cash and non-recurring items. While we believe these financial measures are commonly used by investors to evaluate our performance and that of our competitors, because not all companies use identical calculations, this presentation of EBITDA and EBITDA margin may not be comparable to other similarly titled measures of other companies and should not be considered as an alternative to performance measures derived in accordance with
MEDPACE HOLDINGS, INC. AND SUBSIDIARIES |
||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) |
||||||
(Amounts in thousands, except per share amounts) |
Three Months Ended
|
|||||
|
2024 |
|
2023 |
|||
Revenue, net |
$ |
511,044 |
|
$ |
434,074 |
|
Operating expenses: |
|
|
|
|||
Direct service costs, excluding depreciation and amortization |
|
171,492 |
|
|
151,068 |
|
Reimbursed out-of-pocket expenses |
|
184,410 |
|
|
152,817 |
|
Total direct costs |
|
355,902 |
|
|
303,885 |
|
Selling, general and administrative |
|
44,081 |
|
|
38,027 |
|
Depreciation |
|
6,631 |
|
|
5,408 |
|
Amortization |
|
361 |
|
|
550 |
|
Total operating expenses |
|
406,975 |
|
|
347,870 |
|
Income from operations |
|
104,069 |
|
|
86,204 |
|
Other income (expense), net: |
|
|
|
|||
Miscellaneous income, net |
|
4,593 |
|
|
687 |
|
Interest income (expense), net |
|
4,120 |
|
|
(861 |
) |
Total other income (expense), net |
|
8,713 |
|
|
(174 |
) |
Income before income taxes |
|
112,782 |
|
|
86,030 |
|
Income tax provision |
|
10,191 |
|
|
13,136 |
|
Net income |
$ |
102,591 |
|
$ |
72,894 |
|
Net income per share attributable to common shareholders: |
|
|
|
|||
Basic |
$ |
3.32 |
|
$ |
2.35 |
|
Diluted |
$ |
3.20 |
|
$ |
2.27 |
|
Weighted average common shares outstanding: |
|
|
|
|||
Basic |
|
30,843 |
|
|
31,008 |
|
Diluted |
|
32,001 |
|
|
32,155 |
|
MEDPACE HOLDINGS, INC. AND SUBSIDIARIES |
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) |
|||||||
(Amounts in thousands, except share amounts) |
|
|
|
||||
|
As of |
||||||
|
March 31,
|
|
December 31,
|
||||
ASSETS |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
407,010 |
|
|
$ |
245,449 |
|
Accounts receivable and unbilled, net |
|
279,166 |
|
|
|
298,400 |
|
Prepaid expenses and other current assets |
|
58,726 |
|
|
|
49,979 |
|
Total current assets |
|
744,902 |
|
|
|
593,828 |
|
Property and equipment, net |
|
118,600 |
|
|
|
120,589 |
|
Operating lease right-of-use assets |
|
138,803 |
|
|
|
144,801 |
|
Goodwill |
|
662,396 |
|
|
|
662,396 |
|
Intangible assets, net |
|
35,448 |
|
|
|
35,809 |
|
Deferred income taxes |
|
75,231 |
|
|
|
74,435 |
|
Other assets |
|
20,409 |
|
|
|
24,970 |
|
Total assets |
$ |
1,795,789 |
|
|
$ |
1,656,828 |
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
24,402 |
|
|
$ |
31,869 |
|
Accrued expenses |
|
270,926 |
|
|
|
292,961 |
|
Advanced billings |
|
616,697 |
|
|
|
559,860 |
|
Other current liabilities |
|
44,620 |
|
|
|
40,441 |
|
Total current liabilities |
|
956,645 |
|
|
|
925,131 |
|
Operating lease liabilities |
|
136,156 |
|
|
|
142,122 |
|
Deferred income tax liability |
|
2,364 |
|
|
|
2,404 |
|
Other long-term liabilities |
|
29,082 |
|
|
|
28,221 |
|
Total liabilities |
|
1,124,247 |
|
|
|
1,097,878 |
|
Commitments and contingencies |
|
|
|
||||
Shareholders’ equity: |
|
|
|
||||
Preferred stock - |
|
— |
|
|
|
— |
|
Common stock - |
|
310 |
|
|
|
308 |
|
Treasury stock - 70,073 and 70,573 shares at March 31, 2024 and December 31, 2023, respectively |
|
(12,235 |
) |
|
|
(12,322 |
) |
Additional paid-in capital |
|
814,649 |
|
|
|
802,681 |
|
Accumulated deficit |
|
(119,141 |
) |
|
|
(221,645 |
) |
Accumulated other comprehensive loss |
|
(12,041 |
) |
|
|
(10,072 |
) |
Total shareholders’ equity |
|
671,542 |
|
|
|
558,950 |
|
Total liabilities and shareholders’ equity |
$ |
1,795,789 |
|
|
$ |
1,656,828 |
|
MEDPACE HOLDINGS, INC. AND SUBSIDIARIES |
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
|||||||
(Amounts in thousands) |
Three Months Ended
|
||||||
|
2024 |
|
2023 |
||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
||||
Net income |
$ |
102,591 |
|
|
$ |
72,894 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
||||
Depreciation |
|
6,631 |
|
|
|
5,408 |
|
Amortization |
|
361 |
|
|
|
550 |
|
Stock-based compensation expense |
|
4,310 |
|
|
|
5,438 |
|
Noncash lease expense |
|
5,696 |
|
|
|
4,757 |
|
Deferred income tax benefit |
|
(865 |
) |
|
|
(1,063 |
) |
Other |
|
(4,230 |
) |
|
|
(1,455 |
) |
Changes in assets and liabilities: |
|
|
|
||||
Accounts receivable and unbilled, net |
|
19,116 |
|
|
|
(4,344 |
) |
Prepaid expenses and other current assets |
|
(9,205 |
) |
|
|
(10,205 |
) |
Accounts payable |
|
(7,351 |
) |
|
|
4,457 |
|
Accrued expenses |
|
(21,132 |
) |
|
|
(9,364 |
) |
Advanced billings |
|
56,837 |
|
|
|
3,311 |
|
Lease liabilities |
|
(5,946 |
) |
|
|
(5,284 |
) |
Other assets and liabilities, net |
|
5,864 |
|
|
|
14,976 |
|
Net cash provided by operating activities |
|
152,677 |
|
|
|
80,076 |
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
||||
Property and equipment expenditures |
|
(5,497 |
) |
|
|
(9,513 |
) |
Other |
|
8,027 |
|
|
|
10 |
|
Net cash provided by (used in) investing activities |
|
2,530 |
|
|
|
(9,503 |
) |
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
||||
Proceeds from stock option exercises |
|
7,660 |
|
|
|
2,463 |
|
Repurchases of common stock |
|
— |
|
|
|
(120,146 |
) |
Proceeds from revolving loan |
|
— |
|
|
|
90,000 |
|
Payments on revolving loan |
|
— |
|
|
|
(25,000 |
) |
Net cash provided by (used in) financing activities |
|
7,660 |
|
|
|
(52,683 |
) |
EFFECT OF EXCHANGE RATES ON CASH, CASH EQUIVALENTS, AND RESTRICTED CASH |
|
(1,306 |
) |
|
|
767 |
|
INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH |
|
161,561 |
|
|
|
18,657 |
|
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — Beginning of period |
|
245,449 |
|
|
|
28,265 |
|
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — End of period |
$ |
407,010 |
|
|
$ |
46,922 |
|
MEDPACE HOLDINGS, INC. AND SUBSIDIARIES |
|||||||
RECONCILIATION OF NON-GAAP MEASURES (UNAUDITED) |
|||||||
(Amounts in thousands) |
Three Months Ended
|
||||||
|
2024 |
|
2023 |
||||
RECONCILIATION OF GAAP NET INCOME TO EBITDA |
|
|
|
||||
Net income (GAAP) |
$ |
102,591 |
|
|
$ |
72,894 |
|
Interest (income) expense, net |
|
(4,120 |
) |
|
|
861 |
|
Income tax provision |
|
10,191 |
|
|
|
13,136 |
|
Depreciation |
|
6,631 |
|
|
|
5,408 |
|
Amortization |
|
361 |
|
|
|
550 |
|
EBITDA (Non-GAAP) |
$ |
115,654 |
|
|
$ |
92,849 |
|
Net income margin (GAAP) |
|
20.1 |
% |
|
|
16.8 |
% |
EBITDA margin (Non-GAAP) |
|
22.6 |
% |
|
|
21.4 |
% |
FY 2024 GUIDANCE RECONCILIATION (UNAUDITED) |
|||||||||||||
(Amounts in millions, except per share amounts) |
Forecast 2024 |
||||||||||||
|
Net Income |
|
Net income per diluted share |
||||||||||
|
Low |
|
High |
|
Low |
|
High |
||||||
Net income and net income per diluted share (GAAP) |
$ |
347.0 |
|
|
$ |
369.0 |
|
|
$ |
10.79 |
|
$ |
11.47 |
Income tax provision |
|
61.3 |
|
|
|
69.3 |
|
|
|
|
|
||
Interest income, net |
|
(22.9 |
) |
|
|
(22.9 |
) |
|
|
|
|
||
Depreciation |
|
28.2 |
|
|
|
28.2 |
|
|
|
|
|
||
Amortization |
|
1.4 |
|
|
|
1.4 |
|
|
|
|
|
||
EBITDA (Non-GAAP) |
$ |
415.0 |
|
|
$ |
445.0 |
|
|
|
|
|
||
View source version on businesswire.com: https://www.businesswire.com/news/home/20240422281607/en/
Investor Contact:
Lauren Morris
513.579.9911 x11994
l.morris@medpace.com
Media Contact:
Julie Hopkins
513.579.9911 x12627
j.hopkins@medpace.com
Source: Medpace Holdings, Inc.
FAQ
What was Medpace Holdings, Inc.'s revenue in the first quarter of 2024?
What were the net new business awards for Medpace Holdings, Inc. in the first quarter of 2024?
What was the GAAP net income for Medpace Holdings, Inc. in the first quarter of 2024?
How much did EBITDA increase by for Medpace Holdings, Inc. in the first quarter of 2024?
What was the backlog for Medpace Holdings, Inc. as of March 31, 2024?
What were Medpace Holdings, Inc.'s cash and cash equivalents at the end of the first quarter of 2024?
What is Medpace Holdings, Inc.'s revenue forecast for 2024?
What is Medpace Holdings, Inc.'s GAAP net income projection for full year 2024?
