Medpace (MEDP 54.51%), a clinical contract research organization that manages drug development for pharmaceutical and biotech clients, reported its second quarter 2025 earnings on July 17, 2025. The company delivered GAAP results that topped both earnings and revenue forecasts, with GAAP revenue of $603.3 million versus the estimated $538.8 million and GAAP earnings per share (EPS) of $3.10 versus the expected $2.98. The period’s robust GAAP figures outpaced analyst estimates. Overall, the quarter featured both expansion in top-line results and continued operational progress, prompting management to raise forecasts for the remainder of FY2025.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | $3.10 | $2.98 | $2.75 | 12.7 % |
| Revenue (GAAP) | $603.3 million | $538.8 million | $528.1 million | 14.2% |
| EBITDA (Non-GAAP) | $130.5 million | $112.3 million | 16.2 % | |
| EBITDA Margin (Non-GAAP) | 21.6 % | 21.3 % | 0.3 pp | |
| Net New Business Awards | $620.5 million | $551.0 million | 12.6 % |
Source: Analyst estimates provided by FactSet. Management expectations based on management’s guidance, as provided in Q1 2025 earnings report.
What Medpace Does and Where It’s Focused
Medpace is a clinical contract research organization, or CRO, specializing in running clinical trials to help pharmaceutical and biotech firms bring new drugs and treatments to market. Its work covers every phase of the clinical development cycle, providing a full suite of services like trial management, regulatory consulting, and data analysis. The company is known for its broad therapeutic expertise—especially in oncology, cardiology, metabolic disease, and infectious diseases—and for partnering closely with small and mid-sized drug development enterprises.
In recent years, Medpace has concentrated on leveraging its comprehensive operating model and regulatory expertise to deliver high-value solutions. Its continued investment in specialized scientific staff and integrated project teams is a crucial factor for delivering high-value solutions. Competitive positioning comes from expertise in specific medical conditions, regulatory knowledge, and the ability to secure repeat business by managing risk and aligning services to client needs.
Quarter in Review: Revenue, Bookings, Margins, and Business Trends
During the period, Medpace posted 14.2% GAAP revenue growth. The revenue figure (GAAP) beat expectations by $64.5 million, with backlog conversion driving the outperformance. Backlog conversion rate—meaning how quickly awarded contracts turn into revenue—reached 21.2%, up from 19.2% in Q1 2025. Net new business awards, or the value of new work signed during the period, were $620.5 million, also up 12.6% year over year. This translates to a book-to-bill ratio of 1.03x, which means new contracts closely matched revenue generation. This was a rebound from 0.90x in Q1 2025. Even so, backlog declined 1.8% from the prior year as of June 30, 2025, with management highlighting ongoing project cancellations driven by client funding constraints, as discussed on the Q1 2025 earnings call.
Profitability metrics showed mixed signals. Earnings before interest, taxes, depreciation, and amortization (EBITDA), a non-GAAP measure of core cash earnings, increased 16.2%, and the EBITDA margin (non-GAAP) improved marginally to 21.6%. However, GAAP net income margin slid from 16.7% to 15.0%, reflecting higher expenses. They have accelerated considerably, which helped drive headline revenue but contributed less to profit margins.
The quarter’s spending trends included a 12.5% increase in selling, general, and administrative expenses (GAAP) compared to Q2 2024, partly linked to operating a larger global footprint and growth initiatives. The workforce grew to approximately 6,000, with management acknowledging stable employee turnover and targeting mid-single-digit headcount growth for the year. The company returned significant capital to shareholders by repurchasing 1.75 million shares for $518.5 million during the quarter, reducing diluted share count by 9.2% year over year. By quarter-end, cash and cash equivalents (GAAP) fell sharply to $46.3 million—down from $669.4 million at December 31, 2024—mainly reflecting these buybacks.
On the services front, the core business remains anchored in “full-service” operating models, covering everything from early-stage clinical study design to regulatory submissions. This approach allows clients—especially smaller pharmas—to outsource broad project needs and focus on their own scientific work. The company’s focus within therapeutic product families, such as oncology treatments, cardiovascular drugs, drugs for metabolic diseases, anti-infectives, and central nervous system medicines, continues to attract a range of biopharma customers.
One-time events included very large share repurchases that used up much of the company’s available cash. The company faces sector-wide challenges, such as reduced funding in the biotech sector and price competition from larger and peer competitors. These trends affected bookings and cancellations but have not yet impacted overall revenue guidance.
Looking Ahead: Guidance and Watch Items
Management raised its forecasts for fiscal 2025. The company now expects full-year 2025 revenue of $2.42 billion to $2.52 billion, up from a prior range of $2.14 billion to $2.24 billion. Expected GAAP net income for FY2025 increased to $405 million–$428 million, and the new EPS guidance is $13.76–$14.53 (GAAP), compared with the earlier estimate of $12.26–$13.04 (GAAP). This revised guidance assumes a full-year tax rate between 18.5% and 19.0% for FY2025. and an average diluted share count of 29.4 million (guidance for FY2025).
A few themes are especially important to watch in future periods. These include the pace of new bookings and backlog growth, the impact of rising direct costs and pass-through revenues on future margins, and how ongoing cash deployment through buybacks affects long-term liquidity. Management emphasized confidence in delivering on its updated 2025 outlook, with most revenue already “locked in” for the remainder of the year, referencing FY2025 guidance. However, the company did not provide specific guidance for 2026 given uncertainties in client funding and competitive conditions.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
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