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    MEDP
    Earnings call· Jun 2026(Q2 FY26)

    Medpace Holdings, Inc. MEDP

    Jul 23, 2026 Source

    Executive summary

    Medpace Q2 FY26 — Record Net Bookings and Strong Revenue Growth

    Medpace delivered a robust second quarter, driven by record net bookings and strong revenue growth, supported by a significant reduction in cancellations and an improving business environment. The company observed a shift in new awards back towards oncology from metabolic programs, and while the backlog conversion rate remains elevated, management anticipates a gradual normalization.

    Highlights

    5

    • Net new business awards increased 28.2% year-over-year to $795.7 million, resulting in a 1.13 net book-to-bill.

    • Revenue grew 17.2% year-over-year to $707.3 million.

    • Net income increased 34.5% to $121.4 million.

    • Diluted EPS grew to $4.25 compared to $3.10 in the prior year period.

    • Cancellations were well-behaved and significantly reduced from Q1, contributing to net bookings growth.

    Concerns

    3

    • Initial award notifications declined sequentially from a very strong Q1.

    • The backlog conversion rate of 24.1% is high relative to historical values and is expected to normalize downwards over time.

    • Direct service costs (reimbursable component) ran slightly higher than anticipated in the first half of FY26.

    Guidance & targets

    8
    CategoryTargetConfidence
    Full year 2026 Total Revenue
    $2.805 billion to $2.885 billion
    high materiality
    High
    Full year 2026 EBITDA
    $618 million to $642 million
    high materiality
    High
    Full year 2026 Net Income
    $494 million to $514 million
    high materiality
    High
    Full year 2026 Effective Tax Rate
    19% to 19.5%
    medium materiality
    High
    Full year 2026 Diluted EPS
    $17.25 to $17.95
    high materiality
    High
    Direct Service Costs as % of Revenue (Reimbursable Component)
    41% to 42%
    medium materiality
    Medium
    Employee Growth
    High single-digit growth
    low materiality
    High
    Employee Growth
    High single-digit growth
    low materiality
    Medium

    Operational metrics

    25
    Revenue
    $707.3 millionincreased 17.2% YoY
    Q2 FY26
    Revenue
    $1.41 billionincreased 21.7% YoY
    YTD FY26
    EBITDA
    $153.4 millionincreased 17.6% YoY
    Q2 FY26

    Compared to $130.5 million in Q2 FY25.

    EBITDA
    $302.8 millionincreased 21.5% YoY
    YTD FY26
    EBITDA Margin
    21.7%vs 21.6% in Q2 FY25
    Q2 FY26
    EBITDA Margin
    21.4%flat YoY
    YTD FY26

    Impact of higher reimbursable costs offset by lower employee-related costs.

    Net Income
    $121.4 millionincreased 34.5% YoY
    Q2 FY26

    Compared to $90.3 million in Q2 FY25. Growth above EBITDA driven by lower effective tax rate and higher interest income.

    Net Income
    $245.2 millionincreased 19.7% YoY
    YTD FY26

    Compared to $204.9 million in YTD FY25.

    Net Income per Diluted Share
    $4.25vs $3.10 in Q2 FY25
    Q2 FY26
    Net Income per Diluted Share
    $8.53vs $6.79 in YTD FY25
    YTD FY26
    Net Book-to-Bill
    1.13
    Q2 FY26
    Ending Backlog
    ~$3 billionincreased 4.9% YoY
    as of June 30, 2026
    Backlog Conversion to Revenue (Next 12 Months)
    $1.96 billion
    Next 12 months

    Projected amount of backlog to convert to revenue.

    Backlog Conversion Rate
    24.1%
    Q2 FY26
    Top 5 Customers Revenue Concentration
    ~31%
    LTM

    Of last 12 months' revenue.

    Top 10 Customers Revenue Concentration
    ~40%
    LTM

    Of last 12 months' revenue.

    Net Day Sales Outstanding
    -59.6 days
    Q2 FY26
    Shares Repurchased
    ~706,000 shares
    Q2 FY26

    For $294.7 million.

    Value of Shares Repurchased
    $294.7 million
    Q2 FY26

    For ~706,000 shares.

    Remaining Share Repurchase Authorization
    $527 million
    as of June 30, 2026
    Cash Balance
    $502.7 million
    as of June 30, 2026
    Interest Income
    $21.1 million
    FY26

    Assumed in full year 2026 guidance.

    Employee Turnover
    very lowcontinued through Q2
    Q2 FY26

    On historical terms.

    Direct Service Costs as % of Revenue (Reimbursable Component)
    41% to 42%
    Q3 FY26, Q4 FY26

    Expected for the back half of the year.

    Pre-backlog
    larger than backloggrowing faster than backlog over the last year
    Q2 FY26

    Industry KPIs

    2
    MetricValueDetails
    Revenue EPS guidanceRevenue: $2.805B-$2.885B; EPS: $17.25-$17.95USD
    Clinical research cro bookings$795.7 millionUSD

    Risks & headwinds

    3
    Unpredictable CancellationsOngoing

    Cancellations are 'completely unanticipated and out of the blue sky'.

    Mitigation: Careful gating of backlog recognition based on interim analyses and decision points to avoid large reductions.

    Backlog Conversion Rate NormalizationOver time

    Current conversion rate of 24.1% is high relative to historical values (around 18%) and is expected to drop down over time.

    Mitigation: Anticipated as new awards come in and programs mature; no specific active mitigation mentioned beyond existing backlog management policies.

    Higher Direct Service CostsH1 FY26, H2 FY26

    Direct service costs (reimbursable component) ran slightly higher than anticipated in H1 FY26, with Q3/Q4 expected at 41%-42% of revenue.

    Mitigation: Expectation for some further decline in the back half of the year.

    What to watch in Q3 FY26

    5

    Net bookings growth

    H2 FY26
    Current$795.7 million in Q2 FY26 (+28.2% YoY)
    TargetSequential acceleration in H2 FY26

    Why it matters

    Indicates sustained demand and future revenue growth, especially given management's expectation for gross bookings to ramp.

    No, no. In response to the last few questions, I said that we expect a ramp in bookings I expect a ramp in gross bookings. I would expect that to translate into a ramp in net bookings, but cancellations are always a wild guard, but that was my commentary on second half.

    Q&A highlights

    6

    Are the increased top customer concentration and metabolic work related, and what is the visibility on the persistence of the metabolic mix in bookings and backlog?

    August Troendle confirmed that top 5 customer growth was significantly driven by metabolic programs. However, Q2 bookings and award notifications showed a strong shift back to oncology (over 50%), with metabolic opportunities decreasing. He expects a return to more historical therapeutic mix averages over the next year.

    “The top 5 growth has been driven quite a bit by the metabolically. So the answer to that is yes. There are some large programs among that top 5 that are a good part of that growth in the group.”

    asked by Charles Rhyee · answered by August Troendle

    2 min read5 chapters

    Detailed Narrative

    01

    Business Environment & Pipeline Strength

    The business environment remains strong and constructive, with RFPs showing sequential and year-over-year increases, leading to high-quality opportunities. Initial award notifications were solid, despite a sequential decline from a very strong Q1. Management anticipates a ramp-up in gross bookings during the second half of the year, supported by an improving funding environment for biotech clients.

    02

    Therapeutic Mix Shift in New Awards

    Medpace is observing a significant shift in new business awards. Oncology represented over half of the company's Q2 bookings and award notifications, indicating a strong resurgence in this area. Conversely, cardiometabolic opportunities have decreased, suggesting a return towards more historical averages in the therapeutic mix over the next year or so, moving away from the metabolic-driven growth seen previously.

    03

    Backlog Management and Conversion Rate Dynamics

    The company employs a strategic approach to backlog recognition, particularly for programs with interim analyses or decision points. Backlog is limited beyond these points until favorable decisions are made, even for long-duration trials. This policy, along with other factors like the average age of projects, has contributed to the current high backlog conversion rate of 24.1%, which management expects to gradually normalize towards historical levels over time⏳.

    04

    Win Rates and Competitive Positioning

    Medpace acknowledged that its win rates in 2025 were lower than historical averages. In response, the company implemented changes in late 2025 and early 2026, which management believes may have positively influenced the strong win rate observed in Q1. While specific details of these competitive changes were not disclosed, the overall competitive dynamics are described as stable.

    05

    Employee Growth and Cost Management

    The company is in a good position regarding its workforce, benefiting from continued low turnover in Q2. Medpace expects high single-digit employee growth for both FY26 and FY27, with the largest growth occurring in the U.S. and Asia Pacific, including India, which helps with cost positioning. Direct service costs, particularly the reimbursable component, ran slightly higher than anticipated in the first half but are expected to decline in the second half.

    AI-generated summary of the company’s earnings call. Not investment advice.