Medpace Holdings Inc ((MEDP)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Medpace Holdings Inc. recently held its third-quarter 2025 earnings call, revealing a strong performance marked by substantial revenue growth and impressive business achievements. The sentiment during the call was predominantly positive, driven by record net new business awards and a robust net book-to-bill ratio. However, the company also faced challenges, including a higher effective tax rate, lower interest income, and some cancellations. Overall, the call underscored Medpace’s solid performance with room for improvement in certain areas.
Record Net Bookings and Strong Net Book-to-Bill Ratio
Medpace reported record net bookings in the third quarter of 2025, with a net book-to-bill ratio of 1.20. This achievement was facilitated by well-managed cancellations, allowing the company to secure substantial new business and maintain a strong pipeline for future growth.
Significant Increase in Revenue
The company experienced a remarkable 23.7% year-over-year increase in revenue, reaching $659.9 million in the third quarter. This significant growth reflects Medpace’s successful strategies in expanding its market presence and capitalizing on new business opportunities.
Strong Growth in Net New Business Awards
Net new business awards entering the backlog surged by 47.9% compared to the previous year, totaling $789.6 million. This impressive growth highlights Medpace’s ability to attract and secure new contracts, bolstering its future revenue prospects.
EBITDA Growth
Medpace reported an EBITDA of $148.4 million, marking a 24.9% increase from the third quarter of 2024. This growth in EBITDA underscores the company’s operational efficiency and effective cost management strategies.
Cash Flow and Share Repurchase
The company generated $246.2 million in cash flow from operating activities and repurchased approximately 14,649 shares for $4.5 million. These actions demonstrate Medpace’s commitment to enhancing shareholder value and maintaining a strong financial position.
Higher Effective Tax Rate and Lower Interest Income
Despite the positive financial performance, net income growth lagged behind EBITDA growth due to a higher effective tax rate and reduced interest income compared to the prior year. These factors present areas for potential improvement in Medpace’s financial strategy.
Lower EBITDA Margin
The year-to-date EBITDA margin was slightly lower at 21.8%, compared to 22% in the previous year. This marginal decline suggests a need for Medpace to focus on optimizing its operational efficiency to sustain profitability.
Challenges with Cancellations
The business environment was affected by an unusual series of cancellations, although the overall opportunities remained robust. Medpace’s ability to navigate these challenges will be crucial for maintaining its growth trajectory.
Forward-Looking Guidance
Looking ahead, Medpace provided a preliminary view of its 2026 financial outlook. The company anticipates revenue growth in the low double-digit range and expects EBITDA to increase at a high single-digit pace or greater. Pass-through costs are projected to remain elevated, representing 41% to 42% of revenue. For 2025, Medpace updated its guidance, expecting total revenue to range from $2.48 billion to $2.53 billion, reflecting a growth of 17.6% to 20% over 2024, with an EBITDA range of $545 million to $555 million.
In conclusion, Medpace Holdings Inc.’s third-quarter 2025 earnings call highlighted a strong performance with significant revenue and business growth. Despite facing challenges such as a higher effective tax rate and cancellations, the company demonstrated resilience and strategic foresight. With optimistic forward-looking guidance, Medpace is well-positioned to continue its growth trajectory in the coming years.