Medpace Holdings, Inc. Reports Fourth Quarter and Full Year 2024 Results

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Insights

The Q4 2024 results reveal a complex narrative for Medpace Holdings. While the headline numbers show impressive profitability improvements - with EBITDA margin expanding 570 basis points to 24.9% and net income surging 49.4% to $117.0 million - there are notable underlying dynamics to consider.

The declining trend in new business awards ($529.7 million, down 13.8%) and a book-to-bill ratio below 1.0x suggest potential growth deceleration. This is reflected in management's conservative 2025 revenue guidance of 0.0% to 4.8% growth, significantly below the 11.8% achieved in 2024.

The company's robust cash position of $669.4 million and strong cash flow generation ($190.7 million in Q4) have enabled aggressive capital return initiatives. The new $600 million share repurchase authorization, combined with $134.6 million remaining from the previous program, represents approximately 6.7% of market capitalization, indicating management's confidence in long-term prospects despite near-term growth moderation.

The divergence between current performance and forward guidance suggests management may be building in buffers for potential market uncertainties, particularly given the broader CRO industry's exposure to biotech funding cycles. The projected decline in 2025 EBITDA ($462-492 million vs $480.2 million in 2024) further supports this conservative stance.

02/10/2025 - 04:15 PM

Revenue of $536.6 million in the fourth quarter of 2024 increased 7.7% from revenue of $498.4 million for the comparable prior-year period, representing a backlog conversion rate of 18.3%.
Net new business awards were $529.7 million in the fourth quarter of 2024, representing a decrease of 13.8% from net new business awards of $614.7 million for the comparable prior-year period, which resulted in a net book-to-bill ratio of 0.99x.
Fourth quarter of 2024 GAAP net income was $117.0 million, or $3.67 per diluted share, versus GAAP net income of $78.3 million, or $2.46 per diluted share, for the comparable prior-year period. Net income margin was 21.8% and 15.7% for the fourth quarter of 2024 and 2023, respectively.
EBITDA was $133.5 million for the fourth quarter of 2024, an increase of 39.3% from EBITDA of $95.8 million for the comparable prior-year period, resulting in an EBITDA margin of 24.9%.

CINCINNATI--(BUSINESS WIRE)-- Medpace Holdings, Inc. (Nasdaq: MEDP) (“Medpace”) today announced financial results for the fourth quarter and full year ended December 31, 2024.

Fourth Quarter 2024 Financial Results

Revenue for the three months ended December 31, 2024 increased 7.7% to $536.6 million, compared to $498.4 million for the comparable prior-year period. On a constant currency basis, revenue for the fourth quarter of 2024 increased 7.8% compared to the fourth quarter of 2023.

Backlog as of December 31, 2024 increased 3.2% to $2,902.2 million from $2,813.0 million as of December 31, 2023. Net new business awards were $529.7 million, representing a net book-to-bill ratio of 0.99x for the fourth quarter of 2024, as compared to $614.7 million for the comparable prior-year period. The Company calculates the net book-to-bill ratio by dividing net new business awards by revenue.

For the fourth quarter of 2024, total direct costs were $358.3 million, compared to total direct costs of $361.6 million in the fourth quarter of 2023. Selling, general and administrative (SG&A) expenses were $45.4 million in the fourth quarter of 2024, compared to SG&A expenses of $42.5 million in the fourth quarter of 2023.

GAAP net income for the fourth quarter of 2024 was $117.0 million, or $3.67 per diluted share, versus GAAP net income of $78.3 million, or $2.46 per diluted share, for the fourth quarter of 2023. This resulted in a net income margin of 21.8% and 15.7% for the fourth quarter of 2024 and 2023, respectively.

EBITDA for the fourth quarter of 2024 increased 39.3% to $133.5 million, or 24.9% of revenue, compared to $95.8 million, or 19.2% of revenue, for the comparable prior-year period. On a constant currency basis, EBITDA for the fourth quarter of 2024 increased 37.0% from the fourth quarter of 2023.

Full Year 2024 Financial Results

Revenue for the year ended December 31, 2024 increased 11.8% to $2,109.1 million, compared to $1,885.8 million for the year ended December 31, 2023. On a constant currency basis, revenue increased 11.8% for the year ended December 31, 2024 compared to the year ended December 31, 2023.

For the year ended December 31, 2024, net new business awards were $2,230.0 million, representing a net book-to-bill ratio of 1.06x, compared to $2,356.7 million for the year ended December 31, 2023.

For the full year 2024, total direct costs were $1,452.7 million, compared to $1,361.3 million in the full year 2023. For the full year 2024, SG&A expenses were $180.2 million, compared to $161.4 million for the full year 2023.

GAAP net income for the full year 2024 was $404.4 million, or $12.63 per diluted share, versus GAAP net income of $282.8 million, or $8.88 per diluted share, for the full year 2023. This resulted in a net income margin of 19.2% and 15.0% for the full year 2024 and 2023, respectively.

EBITDA for the full year 2024 increased 32.5% to $480.2 million, or 22.8% of revenue, compared to $362.5 million, or 19.2% of revenue, for the prior year. On a constant currency basis, EBITDA increased 31.7% for the full year 2024 compared to the full year 2023.

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 $669.4 million at December 31, 2024, and the Company generated $190.7 million in cash flow from operating activities during the fourth quarter of 2024.

During the fourth quarter of 2024, the Company repurchased 527,160 shares at an average price of $330.43 per share for a total of $174.2 million. As of December 31, 2024, the Company had $134.6 million remaining under its authorized share repurchase program.

Additionally, on February 6, 2025, the Company’s Board of Directors approved an increase of $600 million to the Company’s stock repurchase program. The timing, price, and volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time, through solicited or unsolicited transactions in the open market, in privately negotiated transactions or pursuant to a Rule 10b5-1 plan. The program may be discontinued or amended at any time without notice.

2025 Financial Guidance

The Company forecasts 2025 revenue in the range of $2.110 billion to $2.210 billion, representing growth of 0.0% to 4.8% over 2024 revenue of $2.109 billion. GAAP net income for full year 2025 is forecasted in the range of $378.0 million to $402.0 million. Additionally, full year 2025 EBITDA is expected in the range of $462.0 million to $492.0 million. Based on forecasted 2025 revenue of $2.110 billion to $2.210 billion and GAAP net income of $378.0 million to $402.0 million, diluted earnings per share (GAAP) is forecasted in the range of $11.93 to $12.69. This guidance assumes a full year 2025 tax rate of 18.0% to 19.0%, interest income of $30.5 million, and 31.7 million diluted shares outstanding. This guidance does not include the potential impact of any share repurchases the Company may make pursuant to the share repurchase program after December 31, 2024.

Conference Call Details

Medpace will host a conference call at 9:00 a.m. ET, Tuesday, February 11, 2025, to discuss its fourth quarter and full year 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 Cincinnati, Ohio, Medpace employs approximately 5,900 people across 44 countries as of December 31, 2024.

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,” “future,” “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, among other things, 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 or operate our business 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; the failure of third parties to provide us critical support services; 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 qualified personnel; the risks associated with our information systems infrastructure, including potential cybersecurity breaches and other disruptions which could compromise patient information or our information; risks from use of machine learning and generative artificial intelligence (“AI”), including risks from insufficient human oversight of AI or lack of controls and procedures monitoring AI use; 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 and our customers 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 the United States of America, or U.S. GAAP. Management uses EBITDA and EBITDA margin or comparable metrics as a measurement used in evaluating our operating performance on a consistent basis, as a consideration to assess incentive compensation for our employees, for planning purposes, including the preparation of our internal annual operating budget, and to evaluate the performance and effectiveness of our operational strategies.

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 U.S. GAAP. See the condensed consolidated financial statements included elsewhere in this release for our U.S. GAAP results. Additionally, for reconciliations of EBITDA and EBITDA margin to our closest reported U.S. GAAP measures, refer to the appendix of this press release.

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 U.S. GAAP. EBITDA is calculated as net income attributable to Medpace Holdings, Inc. before income tax expense, interest expense, net, depreciation and amortization. EBITDA margin is calculated by dividing EBITDA by Revenue, net for each period. Our presentation of EBITDA and EBITDA margin should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

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,
	2024		2023		2024		2023
Revenue, net	$	536,589	$	498,401	$	2,109,054	$	1,885,842
Operating expenses:
Direct service costs, excluding depreciation and amortization		167,522		164,291		682,095		638,249
Reimbursed out-of-pocket expenses		190,750		197,304		770,654		723,088
Total direct costs		358,272		361,595		1,452,749		1,361,337
Selling, general and administrative		45,433		42,514		180,184		161,352
Depreciation		7,145		6,422		27,808		24,129
Amortization		361		550		1,443		2,199
Total operating expenses		411,211		411,081		1,662,184		1,549,017
Income from operations		125,378		87,320		446,870		336,825
Other income (expense), net:
Miscellaneous income (expense), net		621		1,543		4,056		(655	)
Interest income (expense), net		7,883		1,844		24,996		(488	)
Total other income (expense), net		8,504		3,387		29,052		(1,143	)
Income before income taxes		133,882		90,707		475,922		335,682
Income tax provision		16,864		12,409		71,536		52,872
Net income	$	117,018	$	78,298	$	404,386	$	282,810
Net income per share attributable to common
Basic	$	3.78	$	2.55	$	13.06	$	9.20
Diluted	$	3.67	$	2.46	$	12.63	$	8.88
Weighted average common shares outstanding:
Basic		30,945		30,719		30,957		30,722
Diluted		31,873		31,825		32,014		31,841

MEDPACE HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

*(Amounts in thousands, except share amounts)*
	As Of December 31,
	2024			2023
ASSETS
Current assets:
Cash and cash equivalents	$	669,436		$	245,449
Accounts receivable and unbilled, net		296,443			298,400
Prepaid expenses and other current assets		63,350			49,979
Total current assets		1,029,229			593,828
Property and equipment, net		123,615			120,589
Operating lease right-of-use assets		128,649			144,801
Goodwill		662,396			662,396
Intangible assets, net		34,366			35,809
Deferred income taxes		100,357			74,435
Other assets		22,254			24,970
Total assets	$	2,100,866		$	1,656,828
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	32,528		$	31,869
Accrued expenses		307,807			292,961
Advanced billings		710,585			559,860
Other current liabilities		53,633			40,441
Total current liabilities		1,104,553			925,131
Operating lease liabilities		126,234			142,122
Deferred income tax liability		1,800			2,404
Other long-term liabilities		42,734			28,221
Total liabilities		1,275,321			1,097,878
Commitments and contingencies
Shareholders’ equity:
Preferred stock - $0.01 par-value; 5,000,000 shares authorized; no shares issued and outstanding at December 31, 2024 and 2023, respectively		—			—
Common stock - $0.01 par-value; 250,000,000 shares authorized at December 31, 2024 and 2023, respectively; 30,630,799 and 30,752,292 shares issued and outstanding at December 31, 2024 and 2023, respectively		306			308
Treasury stock - 70,073 and 70,573 shares at December 31, 2024 and 2023, respectively		(12,235	)		(12,322	)
Additional paid-in capital		844,050			802,681
Retained earnings (accumulated deficit)		8,167			(221,645	)
Accumulated other comprehensive loss		(14,743	)		(10,072	)
Total shareholders’ equity		825,545			558,950
Total liabilities and shareholders’ equity	$	2,100,866		$	1,656,828

MEDPACE HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

*(Amounts in thousands)*	Twelve Months Ended December 31,
	2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	404,386		$	282,810
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		27,808			24,129
Amortization		1,443			2,199
Stock-based compensation expense		25,514			20,516
Noncash lease expense		23,124			19,646
Deferred income tax benefit		(26,632	)		(25,117	)
Other		(4,009	)		2,705
Changes in assets and liabilities:
Accounts receivable and unbilled, net		2,242			(48,282	)
Prepaid expenses and other current assets		(12,090	)		2,986
Accounts payable		(2,965	)		1,051
Accrued expenses		16,882			82,080
Advanced billings		150,725			97,131
Lease liabilities		(21,407	)		(18,873	)
Other assets and liabilities, net		23,794			(9,607	)
Net cash provided by operating activities		608,815			433,374
CASH FLOWS FROM INVESTING ACTIVITIES:
Property and equipment expenditures		(36,548	)		(36,648	)
Other		8,240			2,019
Net cash used in investing activities		(28,308	)		(34,629	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from stock option exercises		15,858			11,378
Repurchases of common stock		(169,867	)		(144,020	)
Proceeds from revolving loan		—			105,000
Payments on revolving loan		—			(155,000	)
Net cash used in financing activities		(154,009	)		(182,642	)
EFFECT OF EXCHANGE RATES ON CASH, CASH EQUIVALENTS, AND RESTRICTED CASH		(2,511	)		1,081
INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH		423,987			217,184
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — Beginning of period		245,449			28,265
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — End of period	$	669,436		$	245,449

MEDPACE HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP MEASURES (UNAUDITED)

*(Amounts in thousands)*	Three Months Ended December 31,						Twelve Months Ended December 31,
	2024			2023			2024			2023
RECONCILIATION OF GAAP NET INCOME TO EBITDA
Net income (GAAP)	$	117,018		$	78,298		$	404,386		$	282,810
Interest (income) expense, net		(7,883	)		(1,844	)		(24,996	)		488
Income tax provision		16,864			12,409			71,536			52,872
Depreciation		7,145			6,422			27,808			24,129
Amortization		361			550			1,443			2,199
EBITDA (Non-GAAP)	$	133,505		$	95,835		$	480,177		$	362,498
Net income margin (GAAP)		21.8	%		15.7	%		19.2	%		15.0	%
EBITDA margin (Non-GAAP)		24.9	%		19.2	%		22.8	%		19.2	%

FY 2025 GUIDANCE RECONCILIATION (UNAUDITED)

*(Amounts in millions, except per share amounts)*	Forecast 2025
	Net Income						Net income per diluted share
	Low			High			Low		High
Net income and net income per diluted share (GAAP)	$	378.0		$	402.0		$	11.93	$	12.69
Income tax provision		84.5			90.5
Interest income, net		(30.5	)		(30.5	)
Depreciation		29.1			29.1
Amortization		0.9			0.9
EBITDA (Non-GAAP)	$	462.0		$	492.0

View source version on businesswire.com: https://www.businesswire.com/news/home/20250210160060/en/

Investor Contact:

Lauren Morris

513.579.9911 x11994

l.morris@medpace.com

Media Contact:

Michael Maley

513.579.9911 x12831

m.maley@medpace.com

Source: Medpace Holdings, Inc.

FAQ

What was Medpace's (MEDP) revenue growth in Q4 2024?

Medpace's revenue grew 7.7% to $536.6 million in Q4 2024 compared to $498.4 million in Q4 2023.

How much did MEDP's net income increase in Q4 2024?

MEDP's net income increased to $117.0 million ($3.67 per diluted share) in Q4 2024, up from $78.3 million ($2.46 per diluted share) in Q4 2023.

What is Medpace's revenue guidance for 2025?

Medpace forecasts 2025 revenue between $2.110 billion to $2.210 billion, representing growth of 0.0% to 4.8% over 2024.

How much did MEDP expand its share repurchase program in February 2025?

On February 6, 2025, Medpace's Board of Directors approved a $600 million increase to the company's stock repurchase program.

What was MEDP's backlog as of December 31, 2024?

Medpace's backlog as of December 31, 2024 was $2,902.2 million, representing a 3.2% increase from $2,813.0 million in the previous year.

Medpace Holdings, Inc. Reports Fourth Quarter and Full Year 2024 Results

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FAQ

What was Medpace's (MEDP) revenue growth in Q4 2024?

How much did MEDP's net income increase in Q4 2024?

What is Medpace's revenue guidance for 2025?

How much did MEDP expand its share repurchase program in February 2025?

What was MEDP's backlog as of December 31, 2024?

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Medpace Holdings, Inc. Reports Fourth Quarter and Full Year 2024 Results

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FAQ

What was Medpace's (MEDP) revenue growth in Q4 2024?

How much did MEDP's net income increase in Q4 2024?

What is Medpace's revenue guidance for 2025?

How much did MEDP expand its share repurchase program in February 2025?

What was MEDP's backlog as of December 31, 2024?

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