Medpace Holdings, Inc. Reports Fourth Quarter and Full Year 2023 Results
- Strong revenue growth in the fourth quarter and full year of 2023.
- Net new business awards increased by 26.7% in Q4 2023.
- GAAP net income for Q4 2023 was $78.3 million, with an EBITDA of $95.8 million.
- Full year 2023 GAAP net income was $282.8 million, with EBITDA of $362.5 million.
- Positive financial guidance for 2024, with revenue growth forecasted at 14.0% to 16.7% and EBITDA in the range of $400.0 million to $430.0 million.
- None.
Insights
The reported increase in revenue by 26.5% for the fourth quarter and 29.2% for the full year, coupled with a consistent net book-to-bill ratio above 1, indicates a robust demand for Medpace's services, which is a positive signal for investors. The growth in backlog, up 20.2%, suggests a healthy pipeline that could translate into sustained revenue streams. However, the slight decrease in net income margin year-over-year may raise questions about cost management and pricing strategies, as it might indicate rising costs or pricing pressures that could affect future profitability.
Medpace's performance should be contextualized within the broader clinical research organization (CRO) industry. The industry is known for its volatility, with performance closely tied to the success of clinical trials and regulatory approvals. Medpace's reported results show resilience and growth, which is significant given the competitive landscape. The forecasted revenue growth for 2024 further suggests confidence in the company's ability to capture market share and expand its client base. However, investors should monitor industry trends, such as regulatory changes or shifts in pharmaceutical R&D spending, which could impact future performance.
Medpace's increased EBITDA and revenue highlight the company's effectiveness in its operations within the medical research field. The rise in net new business awards reflects the company's competitive edge in securing new contracts and expanding its operational scope. The backlog conversion rate is a critical metric in the CRO industry, as it indicates the company's efficiency in turning its backlog into revenue. Medpace's ability to maintain a strong conversion rate is indicative of operational excellence and robust project management capabilities. The expansion of the backlog also implies ongoing investment in research and development, which is essential for long-term growth in the pharmaceutical and biotech sectors.
-
Revenue of
$498.4 million 26.5% from revenue of$394.1 million 18.5% . -
Net new business awards were
$614.7 million 26.7% from net new business awards of$485.1 million -
Fourth quarter of 2023 GAAP net income was
$78.3 million $2.46 $68.7 million $2.12 15.7% and17.4% for the fourth quarter of 2023 and 2022, respectively. -
EBITDA was
$95.8 million 19.2% from EBITDA of$80.4 million 19.2% .
Fourth Quarter 2023 Financial Results
Revenue for the three months ended December 31, 2023 increased
Backlog as of December 31, 2023 increased
For the fourth quarter of 2023, total direct costs were
GAAP net income for the fourth quarter of 2023 was
EBITDA for the fourth quarter of 2023 increased
Full Year 2023 Financial Results
Revenue for the year ended December 31, 2023 increased
For the year ended December 31, 2023, net new business awards were
For the full year 2023, total direct costs were
GAAP net income for the full year 2023 was
EBITDA for the full year 2023 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
For the full year 2023, the Company repurchased 781,068 shares for
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, February 13, 2024, to discuss its fourth quarter and full year 2023 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 CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||
|
(Unaudited) |
|
|
|
|
|||||||||
(Amounts in thousands, except per share amounts) |
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|||||||||||
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Revenue, net |
$ |
498,401 |
|
$ |
394,098 |
|
|
$ |
1,885,842 |
|
|
$ |
1,459,996 |
|
Operating expenses: |
|
|
|
|
|
|
|
|||||||
Direct service costs, excluding depreciation and amortization |
|
164,291 |
|
|
140,687 |
|
|
|
638,249 |
|
|
|
534,887 |
|
Reimbursed out-of-pocket expenses |
|
197,304 |
|
|
137,680 |
|
|
|
723,088 |
|
|
|
492,671 |
|
Total direct costs |
|
361,595 |
|
|
278,367 |
|
|
|
1,361,337 |
|
|
|
1,027,558 |
|
Selling, general and administrative |
|
42,514 |
|
|
33,401 |
|
|
|
161,352 |
|
|
|
131,400 |
|
Depreciation |
|
6,422 |
|
|
5,061 |
|
|
|
24,129 |
|
|
|
18,989 |
|
Amortization |
|
550 |
|
|
838 |
|
|
|
2,199 |
|
|
|
3,352 |
|
Total operating expenses |
|
411,081 |
|
|
317,667 |
|
|
|
1,549,017 |
|
|
|
1,181,299 |
|
Income from operations |
|
87,320 |
|
|
76,431 |
|
|
|
336,825 |
|
|
|
278,697 |
|
Other income (expense), net: |
|
|
|
|
|
|
|
|||||||
Miscellaneous income (expense), net |
|
1,543 |
|
|
(1,959 |
) |
|
|
(655 |
) |
|
|
7,068 |
|
Interest income (expense), net |
|
1,844 |
|
|
(827 |
) |
|
|
(488 |
) |
|
|
(2,905 |
) |
Total other income (expense), net |
|
3,387 |
|
|
(2,786 |
) |
|
|
(1,143 |
) |
|
|
4,163 |
|
Income before income taxes |
|
90,707 |
|
|
73,645 |
|
|
|
335,682 |
|
|
|
282,860 |
|
Income tax provision |
|
12,409 |
|
|
4,975 |
|
|
|
52,872 |
|
|
|
37,492 |
|
Net income |
$ |
78,298 |
|
$ |
68,670 |
|
|
$ |
282,810 |
|
|
$ |
245,368 |
|
Net income per share attributable to common |
|
|
|
|
|
|
|
|||||||
Basic |
$ |
2.55 |
|
$ |
2.20 |
|
|
$ |
9.20 |
|
|
$ |
7.57 |
|
Diluted |
$ |
2.46 |
|
$ |
2.12 |
|
|
$ |
8.88 |
|
|
$ |
7.28 |
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|||||||
Basic |
|
30,719 |
|
|
31,192 |
|
|
|
30,722 |
|
|
|
32,388 |
|
Diluted |
|
31,825 |
|
|
32,423 |
|
|
|
31,841 |
|
|
|
33,671 |
|
MEDPACE HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS |
|||||||
(Amounts in thousands, except share amounts) |
|
|
|
||||
|
As Of December 31, |
||||||
|
|
2023 |
|
|
|
2022 |
|
ASSETS |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
245,449 |
|
|
$ |
28,265 |
|
Accounts receivable and unbilled, net |
|
298,400 |
|
|
|
253,404 |
|
Prepaid expenses and other current assets |
|
49,979 |
|
|
|
52,293 |
|
Total current assets |
|
593,828 |
|
|
|
333,962 |
|
Property and equipment, net |
|
120,589 |
|
|
|
109,849 |
|
Operating lease right-of-use assets |
|
144,801 |
|
|
|
139,068 |
|
Goodwill |
|
662,396 |
|
|
|
662,396 |
|
Intangible assets, net |
|
35,809 |
|
|
|
38,008 |
|
Deferred income taxes |
|
74,435 |
|
|
|
48,083 |
|
Other assets |
|
24,970 |
|
|
|
21,129 |
|
Total assets |
$ |
1,656,828 |
|
|
$ |
1,352,495 |
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
31,869 |
|
|
$ |
33,069 |
|
Accrued expenses |
|
292,961 |
|
|
|
210,125 |
|
Advanced billings |
|
559,860 |
|
|
|
462,729 |
|
Short-term debt |
|
— |
|
|
|
50,000 |
|
Other current liabilities |
|
40,441 |
|
|
|
47,547 |
|
Total current liabilities |
|
925,131 |
|
|
|
803,470 |
|
Operating lease liabilities |
|
142,122 |
|
|
|
138,867 |
|
Deferred income tax liability |
|
2,404 |
|
|
|
1,070 |
|
Other long-term liabilities |
|
28,221 |
|
|
|
22,701 |
|
Total liabilities |
|
1,097,878 |
|
|
|
966,108 |
|
Commitments and contingencies |
|
|
|
||||
Shareholders’ equity: |
|
|
|
||||
Preferred stock - |
|
— |
|
|
|
— |
|
Common stock - |
|
308 |
|
|
|
309 |
|
Treasury stock - 70,573 and 71,573 shares at December 31, 2023 and 2022, respectively |
|
(12,322 |
) |
|
|
(12,497 |
) |
Additional paid-in capital |
|
802,681 |
|
|
|
770,794 |
|
Accumulated deficit |
|
(221,645 |
) |
|
|
(359,827 |
) |
Accumulated other comprehensive loss |
|
(10,072 |
) |
|
|
(12,392 |
) |
Total shareholders’ equity |
|
558,950 |
|
|
|
386,387 |
|
Total liabilities and shareholders’ equity |
$ |
1,656,828 |
|
|
$ |
1,352,495 |
|
MEDPACE HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
(Amounts in thousands) |
Twelve Months Ended December 31, |
||||||
|
|
2023 |
|
|
|
2022 |
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
||||
Net income |
$ |
282,810 |
|
|
$ |
245,368 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
||||
Depreciation |
|
24,129 |
|
|
|
18,989 |
|
Amortization |
|
2,199 |
|
|
|
3,352 |
|
Stock-based compensation expense |
|
20,516 |
|
|
|
21,412 |
|
Noncash lease expense |
|
19,646 |
|
|
|
18,015 |
|
Deferred income tax benefit |
|
(25,117 |
) |
|
|
(23,014 |
) |
Other |
|
2,705 |
|
|
|
(2,127 |
) |
Changes in assets and liabilities: |
|
|
|
||||
Accounts receivable and unbilled, net |
|
(48,282 |
) |
|
|
(66,920 |
) |
Prepaid expenses and other current assets |
|
2,986 |
|
|
|
(10,175 |
) |
Accounts payable |
|
1,051 |
|
|
|
6,431 |
|
Accrued expenses |
|
82,080 |
|
|
|
52,476 |
|
Advanced billings |
|
97,131 |
|
|
|
118,088 |
|
Lease liabilities |
|
(18,873 |
) |
|
|
(15,899 |
) |
Other assets and liabilities, net |
|
(9,607 |
) |
|
|
22,054 |
|
Net cash provided by operating activities |
|
433,374 |
|
|
|
388,050 |
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
||||
Property and equipment expenditures |
|
(36,648 |
) |
|
|
(36,879 |
) |
Other |
|
2,019 |
|
|
|
(1,863 |
) |
Net cash used in investing activities |
|
(34,629 |
) |
|
|
(38,742 |
) |
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
||||
Proceeds from stock option exercises |
|
11,378 |
|
|
|
22,074 |
|
Repurchases of common stock |
|
(144,020 |
) |
|
|
(847,849 |
) |
Proceeds from revolving loan |
|
105,000 |
|
|
|
324,200 |
|
Payments on revolving loan |
|
(155,000 |
) |
|
|
(274,200 |
) |
Net cash used in financing activities |
|
(182,642 |
) |
|
|
(775,775 |
) |
EFFECT OF EXCHANGE RATES ON CASH, CASH EQUIVALENTS, AND RESTRICTED CASH |
|
1,081 |
|
|
|
(6,572 |
) |
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH |
|
217,184 |
|
|
|
(433,039 |
) |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — Beginning of period |
|
28,265 |
|
|
|
461,304 |
|
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — End of period |
$ |
245,449 |
|
|
$ |
28,265 |
|
MEDPACE HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP MEASURES (UNAUDITED) |
|||||||||||||||
(Amounts in thousands) |
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
RECONCILIATION OF GAAP NET INCOME TO EBITDA |
|
|
|
|
|
|
|
||||||||
Net income (GAAP) |
$ |
78,298 |
|
|
$ |
68,670 |
|
|
$ |
282,810 |
|
|
$ |
245,368 |
|
Interest (income) expense, net |
|
(1,844 |
) |
|
|
827 |
|
|
|
488 |
|
|
|
2,905 |
|
Income tax provision |
|
12,409 |
|
|
|
4,975 |
|
|
|
52,872 |
|
|
|
37,492 |
|
Depreciation |
|
6,422 |
|
|
|
5,061 |
|
|
|
24,129 |
|
|
|
18,989 |
|
Amortization |
|
550 |
|
|
|
838 |
|
|
|
2,199 |
|
|
|
3,352 |
|
EBITDA (Non-GAAP) |
$ |
95,835 |
|
|
$ |
80,371 |
|
|
$ |
362,498 |
|
|
$ |
308,106 |
|
Net income margin (GAAP) |
|
15.7 |
% |
|
|
17.4 |
% |
|
|
15.0 |
% |
|
|
16.8 |
% |
EBITDA margin (Non-GAAP) |
|
19.2 |
% |
|
|
20.4 |
% |
|
|
19.2 |
% |
|
|
21.1 |
% |
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) |
$ |
326.0 |
|
|
$ |
348.0 |
|
|
$ |
10.18 |
|
$ |
10.87 |
Income tax provision |
|
62.4 |
|
|
|
70.4 |
|
|
|
|
|
||
Interest income, net |
|
(18.4 |
) |
|
|
(18.4 |
) |
|
|
|
|
||
Depreciation |
|
28.6 |
|
|
|
28.6 |
|
|
|
|
|
||
Amortization |
|
1.4 |
|
|
|
1.4 |
|
|
|
|
|
||
EBITDA (Non-GAAP) |
$ |
400.0 |
|
|
$ |
430.0 |
|
|
|
|
|
||
View source version on businesswire.com: https://www.businesswire.com/news/home/20240212185542/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 (MEDP) revenue for the fourth quarter of 2023?
What was Medpace Holdings, Inc.'s (MEDP) net new business awards for the fourth quarter of 2023?
What was Medpace Holdings, Inc.'s (MEDP) GAAP net income for the fourth quarter of 2023?
What was Medpace Holdings, Inc.'s (MEDP) EBITDA for the fourth quarter of 2023?
What was Medpace Holdings, Inc.'s (MEDP) revenue for the full year of 2023?
What was Medpace Holdings, Inc.'s (MEDP) GAAP net income for the full year of 2023?
What is Medpace Holdings, Inc.'s (MEDP) financial guidance for 2024?
