## Medpace — Latest Two Earnings Calls **Q2 2026 call: July 23, 2026 (results for quarter ended June 30, 2026)** **Q1 2026 call: April 23, 2026 (results for quarter ended March 31, 2026)** --- ### Revenue growth: gross (reported) vs. net (direct-service) and pass-throughs **Direct statements:** - Q2 2026 revenue was $707.3M, +17.2% YoY; six-month revenue $1.41B, +21.7% (Kevin Brady). Q1 2026 revenue was $706.6M, +26.5% reported / +25.8% constant currency (Brady). - Medpace does not disclose direct-service (net-of-pass-through) revenue separately. Brady, Q1 call: "We don't provide guidance on direct service revenue." - Pass-throughs (reimbursable costs) ran ~44% of revenue in Q1 2026 (Brady: "we were pretty high this quarter, I don't know, 44% or so"). On the Q2 call he guided reimbursables down to **41–42% of revenue in Q3/Q4**, conceding Q1–Q2 ran higher than he anticipated and full-year could be "just north of" 42% (exchange with Eric Coldwell and Ryan Halsted). - Metabolic programs drove the elevated pass-throughs; late-lifecycle studies burn more reimbursables (Brady, Q2). **Inference:** With reported revenue growing 17–27% while pass-throughs sat at ~44% and are expected to fall 2–3 points, direct-fee revenue is growing slower than headline revenue in H1 2026, and the H2 revenue mix should tilt back toward direct fees. Q2's flat sequential revenue (~$707M both quarters) is consistent with August Troendle's Q1 warning that sequential growth was "a real question." --- ### Cancellations, bookings, and book-to-bill **Direct statements:** - **Q1 2026:** Net book-to-bill **0.88x**; net new awards $618.4M (+23.7% YoY); backlog ~$2.9B (+2.9% YoY); backlog cancellations were "the highest they've been in over a year" (Troendle). Cancellations were broad-based — oncology and cardiovascular largest (explicitly *not* metabolic, and *not* M&A-related), no single outsized cancel. With normal cancellations, book-to-bill "would have been still a weak… somewhere around 1" — weak gross awards were a co-factor (Troendle to Eric Coldwell). - **Q2 2026:** Record net bookings of **$795.7M**, +28.2% YoY, **1.13x** book-to-bill; backlog ~$3.0B (+4.9%); $1.96B expected to convert to revenue in 12 months; conversion 24.1% of beginning backlog. Cancellations "came down quite a bit… not to an unusually low level, but a very good level," and reduced cancellations were "more than half of the driver" of the sequential net-bookings increase (Troendle). He expects gross bookings to **ramp in H2**, with cancellations the wild card. - Backlog conversion at 24.1% vs. an ~18% long-term average was attributed mainly to tighter *application* of the backlog-gating policy (blocking backlog beyond interim-analysis decision points) plus project age/mix — Troendle explicitly pushed back on metabolic burn as the primary driver, and expects conversion to "revert towards our historical norm" over time (exchanges with David Windley and Eric Coldwell). - Mix shift: oncology was **over half** of Q2 bookings and award notifications; cardiometabolic award notifications "dropped off quite a bit" (Troendle). RFPs were up "substantially" YoY and sequentially in Q2; initial award notifications declined sequentially from a very strong Q1. Pre-backlog is **larger than backlog and grew faster than backlog** over the past year (Troendle, Q2; no figure given). **Inference:** Gross bookings in Q1 were roughly in the ~$700M+ area and Q2 well above $800M (net + undisclosed cancels), but the company refuses to quantify gross bookings or the cancellation rate, so any dollar estimate is a modeling exercise. --- ### Customer financing environment **Direct statements:** - Q1 2026: cancellations were product-performance/reprioritization driven, "not particularly informed by acute financial shortages"; many clients raise money while getting bids; biopharma M&A of clients generally cuts Medpace out of future work (Troendle). - Q2 2026: "Funding has been a lot broader… we are seeing more opportunities with recent funding and moving forward with the program"; trajectory of decision-making improved with the funding environment; still "a number of clients that were challenged financially" earlier in the year (Troendle). --- ### Hiring **Direct statements:** - Q2 2026: "high single digit growth in employees this year," likely continuing next year; very low turnover continued; growth predominantly U.S., then Asia-Pacific with "a chunk of that in India" as cost positioning (Troendle). Headcount grows slower than revenue, supporting H2 margin expansion (Brady). - Q1 2026: still hiring despite the 0.88 book-to-bill — "I don't know how you get any more confident than that" (Troendle); efficiencies from improved retention are baked into guidance (Brady). --- ### Capital allocation **Direct statements:** - Q2 2026: repurchased ~706,000 shares for **$294.7M** in the quarter; **$527M** remaining authorization; quarter-end cash $502.7M; operating cash flow $162M; net DSO −59.6 days. - Q1 2026: no buybacks executed in Q1 (cash built to $652.7M; operating cash flow $151.8M; DSO −58.8 days); "a little bit over $800 million in authorization" with a continued opportunistic approach (Brady). Guidance in both quarters assumes **no additional repurchases**. **Inference:** The ~$294.7M Q2 buyback plus the drop from ~$821.7M (year-end 2025) to $527M in authorization means Q2 was the year's first meaningful repurchase activity, executed after the stock's post-Q1 reaction. --- ### Guidance - **Q1 2026 call:** full-year ranges **unchanged** (revenue $2.755–2.855B, EBITDA $605–635M, NI $487–511M, EPS $16.68–17.50 carried from February); tax 19–20%, interest income $27.5M. - **Q2 2026 call: raised.** Revenue **$2.805–2.885B** (+10.9% to +14% over 2025's $2.53B); EBITDA **$618–642M** (+10.8% to +15.1%); net income **$494–514M**; EPS **$17.25–17.95**; tax rate 19–19.5%; interest income $21.1M; FX as of June 30, 2026. **Inference:** The raise is roughly +$50M revenue and +$10M EBITDA at the midpoints versus the prior ranges, driven by the Q2 drop in cancellations and better funding — consistent with, but not stated as, the quantified bridge.