Medpace Q1 Earnings Call Highlights
by Danessa Lincoln · The Markets DailyMedpace (NASDAQ:MEDP) reported first-quarter 2026 results marked by strong year-over-year revenue growth but also a renewed rise in cancellations that pressured net bookings and contributed to a net book-to-bill ratio below 1.0. Management repeatedly emphasized that while opportunity “quality” and win rates remain solid, elevated cancellations—particularly within backlog—have become a central variable shaping the company’s near-term growth profile and visibility beyond the next year.
Leadership note: President Jesse Geiger to depart
Chief Executive Officer August Troendle opened the call by noting that the quarter would be the company’s last earnings call with President Jesse Geiger, thanking him for “18.5 years of service.” Geiger said it had been “a true honor to serve the company,” and Troendle later told analysts he expects to “retake duties as president as I had in the past,” adding that the company has “a very strong and deep management team.”
Q1 results: revenue up 26.5% as margins held steady
Geiger said first-quarter 2026 revenue was $706.6 million, a 26.5% increase year over year. Net new business awards entering backlog rose 23.7% from the prior year to $618.4 million, producing a 0.88 net book-to-bill ratio. Ending backlog at March 31, 2026 was approximately $2.9 billion, up 2.9% from the prior year.
Geiger added that the company projects about $1.94 billion of backlog will convert to revenue over the next 12 months, and said backlog conversion during Q1 was 23.3% of beginning backlog.
Chief Financial Officer Kevin Brady said revenue growth was 25.8% on a constant-currency basis. He reported EBITDA of $149.4 million, up 25.9% from $118.6 million in Q1 2025 (or 28.6% on a constant-currency basis). EBITDA margin was 21.1%, essentially flat with 21.2% a year earlier, with Brady attributing the dynamic to higher reimbursable costs being “offset primarily by lower employee-related costs.”
Brady said net income was $123.9 million, up 8.1% year over year, and diluted EPS was $4.28 versus $3.67 a year ago. He said net income grew more slowly than EBITDA primarily due to “a higher effective tax rate” in the quarter.
On cash and working capital, Brady reported $151.8 million in operating cash flow and said net days sales outstanding was negative 58.8 days. Medpace ended the quarter with $652.7 million in cash.
Cancellations rise again; oncology and cardiovascular cited as largest areas
Troendle said “cancellations rise again” during Q1, with “backlog cancels reaching their highest point in over a year.” While he said initial award notifications and win rate were strong, he also said net bookings were below Q4 levels (though “well above” Q1 2025), and that RFPs were down sequentially and year over year.
Asked by William Blair’s Max Smock about the drivers, Troendle described the cancellations as “the kind of random stuff you’d expect,” citing “product performance” and “reprioritizations,” and said they were not driven by “acute financial shortages.” He noted the largest therapeutic areas for cancellations were oncology and cardiovascular, which he described as “kind of usual anyway.”
Troendle also told analysts it was “too early” to assess whether cancellations would remain elevated in Q2. He added that cancellations in what analysts referred to as the “initial awards bucket” were “not particularly elevated” in Q1, saying the quarter’s issue was “more backlog-related cancellations.”
Jefferies’ David Windley probed whether metabolic cancellations were a concern, given investor focus on GLP-1 activity. Troendle responded that cardiovascular is reported separately from metabolic, and said he did not see GLP-1-related work as becoming more volatile. He added that historically, metabolic has had “the lowest” cancellation rate among the therapeutic areas the company discloses, and said, “It has not resulted in higher cancellations.”
Windley later pressed on what tends to drive backlog cancellations, given those studies have advanced further. Troendle said the driver is “generally product failure,” adding, “oncology happens all the time. It’s not working.” He also noted cancellations can reflect studies that recruit faster than expected, reducing the total contract value versus what was originally budgeted.
Bookings mechanics, pipeline, and concerns about longer-dated backlog
Several analysts focused on the relationship between awards, backlog recognition, and book-to-bill. Troendle reiterated that Medpace’s reported backlog reflects work that has started, while many client authorizations can sit in a “pre-backlog” stage for a period of time before first patient in. In a follow-up exchange with Windley, Troendle agreed that bookings recognition is “basically happening coincident with first patient in,” and said timing from award to booking recognition can vary, with an average “in the ballpark” of roughly several quarters.
Troendle said pre-backlog “did grow” in Q1 but declined to quantify it, stating the company does not provide pipeline size metrics. He argued that book-to-bill can be a “flawed measure” under ASC 606, and declined to guide to future book-to-bill levels, though he said the company anticipates bookings will increase over time.
Baird’s Eric Coldwell asked about six consecutive quarters of decline in backlog beyond the next 12 months. Troendle acknowledged that “there is area for concern,” saying earlier confidence was tied to rapid pre-backlog growth and an expectation cancellations would come down—something he said “hasn’t happened.” He said elevated cancellations in both backlog and pre-backlog have introduced questions about sequential growth, adding: “Our growth profile both now and six months from now in terms of sequential growth is a real question.”
Troendle said improving the trajectory would require “either cancellations to abate or gross awards, new notifications and a bigger pipeline going forward.” He also said the company has implemented initiatives to improve win rates, though he declined to provide specifics, citing competitive sensitivity. Still, he said he hopes to see “real improvement” over the next few quarters and noted that Q1 win rates were strong.
Guidance unchanged; pass-throughs expected to decline as year progresses
Brady said Medpace’s 2026 guidance ranges for revenue, EBITDA, net income, and EPS are unchanged from the prior quarter. He said the guidance assumes an effective tax rate of 19% to 20% and interest income of $27.5 million, and includes no additional share repurchases. On the durability of the revenue outlook despite cancellations, Brady said the company “feel[s] very good about the range” and reconfirmed guidance, while noting future cancellations “could potentially impact that.” Troendle also pointed to variability in the timing of pass-through investigator costs as a forecasting challenge.
On the mix of reimbursable expenses, Brady said pass-throughs were “pretty high” in Q1 at “44% or so,” and he expects pass-throughs as a percentage of revenue to be lower by year-end as “some of these metabolic studies wind down a little bit,” though he said it will also depend on future bookings.
Asked about share repurchases after the stock’s reaction to earnings, Brady said the company has “a little bit over $800 million in authorization” and will continue to execute under its strategy, though he did not commit to any change in pace.
Management also discussed other business dynamics, including the impact of biopharma M&A on smaller clients. Troendle said acquisitions of Medpace clients are “not good for us,” noting that Medpace is “generally…cut out on future work,” though ongoing trials often continue. On competitive positioning, Troendle reiterated the company’s strategic decision not to pursue large pharma work, citing differences in delivery models and expectations.
On artificial intelligence, Troendle reiterated prior comments that AI is likely to require investment before producing net savings. He said he expects the company to be “investing more dollars…than we will gain in terms of efficiency” over at least the next two years, and that it is “a few years out before we see any actual net benefit.”
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.