Medpace (NASDAQ:MEDP) executives said elevated cancellations in the fourth quarter weighed on net bookings, but emphasized that underlying demand remained “adequate and headed in the right direction” as the contract research organization posted strong revenue growth and issued 2026 guidance calling for continued expansion.
Fourth-quarter cancellations lift uncertainty around bookings
CEO August Troendle said cancellations were “elevated again in Q4,” with backlog cancellations in absolute and percentage terms the highest in more than a year. The higher cancellations contributed to a lower-than-anticipated net book-to-bill ratio of 1.04 for the quarter, he said.
In response to analyst questions, management characterized the cancellations as widespread rather than driven by one or two large projects. Troendle said cancellations were “a little bit skewed towards the metabolic area,” while oncology remained the company’s strongest area for bookings. He also noted that some studies ended early due to compound performance, and said there was no discernible pattern beyond the elevated level.
Revenue and profitability grew in Q4 and full year 2025
President Jesse Geiger reported fourth-quarter 2025 revenue of $708.5 million, up 32% year over year. Full-year 2025 revenue was $2.53 billion, a 20% increase from 2024.
Net new business awards entering backlog in the fourth quarter increased 39.1% from the prior year to $736.6 million, resulting in the 1.04 net book-to-bill ratio. For the full year 2025, net new business awards were $2.65 billion, up 18.7%.
Backlog as of Dec. 31, 2025 was approximately $3.0 billion, up 4.3% from the prior year. Management projected about $1.9 billion of backlog would convert to revenue over the next 12 months, and said the backlog conversion rate in the fourth quarter was 23.6% of beginning backlog.
CFO Kevin Brady said fourth-quarter EBITDA was $160.2 million, up from $133.5 million a year earlier, while full-year EBITDA was $557.7 million, an increase of 16.1%. EBITDA margin was 22.6% in the quarter versus 24.9% in the prior-year period, and full-year EBITDA margin was 22.0% compared with 22.8% in 2024.
Brady attributed margin pressure to higher reimbursable cost activity driven by therapeutic mix. Fourth-quarter net income rose 15.5% year over year to $135.1 million, while full-year net income increased 11.6% to $451.1 million. Brady said net income growth lagged EBITDA growth primarily due to lower interest income and a slightly higher effective tax rate.
Net income per diluted share was $4.67 for the quarter, up from $3.67 a year earlier, and $15.28 for the full year, up from $12.63 in 2024.
Cash, share repurchases, and customer concentration
Medpace generated $192.7 million in cash flow from operating activities in the fourth quarter, and Brady said net daily sales outstanding was negative 58.7 days. The company ended 2025 with $497 million in cash.
For the full year, Medpace repurchased 2.96 million shares for $912.9 million. Brady said $821.7 million remained under the company’s share repurchase authorization at year-end.
On customer concentration, Brady said the top five and top 10 customers represented roughly 25% and 35%, respectively, of full-year 2025 revenue.
2026 guidance calls for high-single-digit to low-double-digit growth
For 2026, Brady guided total revenue to a range of $2.755 billion to $2.855 billion, representing growth of 8.9% to 12.8% over 2025. EBITDA is expected to be $605 million to $635 million, or 8.5% to 13.9% growth, with net income forecast between $487 million and $511 million.
Earnings per diluted share is expected to be $16.68 to $17.50. The guidance assumes an effective tax rate of 18.5% to 19.5%, interest income of $24.3 million to $29.2 million, and 29.2 million diluted weighted average shares outstanding. Brady said the outlook includes no additional share repurchases and is based on foreign exchange rates as of Dec. 31, 2025.
Brady also said the company expects reimbursable costs to be about 41% to 42% of revenue in 2026, slightly higher than where the company finished 2025. He added that reimbursable costs are expected to start 2026 higher as a percentage of revenue than where they end the year, which he said could contribute to “some flatter top-line growth throughout the quarters” than in past years.
Therapeutic mix, hiring plans, and AI efforts
Executives discussed the company’s metabolic business, which they said has been a driver of higher pass-through (reimbursable) activity. Troendle said metabolic has been “heavily” weighted toward obesity and diabetes recently, but he did not view concentration as a major risk and said he expected metabolic to decrease as a percentage of revenue in 2026 as mix “normaliz[es].” Brady added that pass-throughs had been driven largely by metabolic programs and are expected to begin normalizing in 2026, creating a headwind to reported revenue growth but shifting toward more direct revenue.
On staffing, Geiger said Medpace expects hiring in 2026 to be above 2025 levels, with headcount growth in the “mid to high single-digit” range. Brady said guidance assumes “normal cancellation rates,” and that margin performance is expected to be supported by productivity tied to continued retention and utilization improvements. He said the company is not planning restructuring and does not have “major cost-savings initiatives” embedded in the outlook.
Management also addressed artificial intelligence. Troendle said it was too early to know the magnitude of changes AI may bring, and he did not anticipate “any productivity advantage” in 2026 as investment may offset early benefits. He suggested longer-term gains could benefit clients and potentially reduce the amount of staffing required to perform work over time. Geiger added that the company’s early AI efforts include initiatives focused on efficiency and tools that assist with data analytics for feasibility and site selection, while emphasizing the need to balance benefits with risk management, quality, and confidentiality.
About Medpace (NASDAQ:MEDP)
Medpace Holdings, Inc (NASDAQ: MEDP) is a global contract research organization (CRO) that provides comprehensive clinical development services to biotechnology, pharmaceutical and medical device companies. The company supports clinical trials across all phases (I–IV), offering end-to-end solutions designed to streamline the development process and accelerate the delivery of new therapies to market.
Medpace’s core service offerings include clinical pharmacology, regulatory affairs consulting, project management, central laboratory services, imaging, data management and biostatistics, pharmacovigilance and medical writing.
