Medpace’s third quarter results were well received by the market, driven by broad-based revenue growth and robust net new business awards. Management credited strong demand across therapeutic areas—particularly metabolic and obesity studies—and a significant increase in net bookings for lifting performance. CEO August Troendle pointed to a 30% year-over-year rise in awarded but not-yet-recognized work, which helped offset concerns about recent cancellations. CFO Kevin Brady added that improved productivity and lower employee-related costs also contributed to margin stability.
Is now the time to buy MEDP? Find out in our full research report (it’s free for active Edge members).
Medpace (MEDP) Q3 CY2025 Highlights:
- Revenue: $659.9 million vs analyst estimates of $642.3 million (23.7% year-on-year growth, 2.7% beat)
- EPS (GAAP): $3.86 vs analyst estimates of $3.51 (10% beat)
- Adjusted EBITDA: $148.4 million vs analyst estimates of $132.5 million (22.5% margin, 11.9% beat)
- The company lifted its revenue guidance for the full year to $2.51 billion at the midpoint from $2.47 billion, a 1.4% increase
- EPS (GAAP) guidance for the full year is $14.73 at the midpoint, beating analyst estimates by 4.7%
- EBITDA guidance for the full year is $550 million at the midpoint, above analyst estimates of $525.8 million
- Operating Margin: 21.5%, in line with the same quarter last year
- Organic Revenue rose 23.5% year on year vs analyst estimates of 19.8% growth (373 basis point beat)
- Market Capitalization: $16.35 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Medpace’s Q3 Earnings Call
- Charles Rhyee (TD Cowen) asked about the outlook for pass-through costs given the rising share of metabolic studies. CEO August Troendle clarified that while pass-throughs would likely peak soon, they are expected to remain above historical averages due to ongoing project mix.
- Ann Hynes (Mizuho) questioned why EBITDA growth would lag revenue growth next year. Troendle pointed to elevated pass-throughs as the main factor, while pricing pressure is not expected to affect margins meaningfully.
- Max Smock (William Blair) asked about the disconnect between initial award growth and required bookings for Q4. Troendle explained that the awarded work bucket is up 30% but that not all of it converts to reported bookings on a quarterly basis.
- David Windley (Jefferies) inquired about hiring trends and the impact of offshoring. Troendle confirmed most recent hiring occurred in the U.S. and India, with the U.S. reflecting current demand for metabolic studies.
- Eric Coldwell (Baird) pressed for details on the size of the pre-backlog award bucket. Troendle stated it is now larger than reported backlog but declined to provide a precise figure, estimating it remains under $4 billion.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will be monitoring (1) the pace of backlog conversion from the substantial pre-backlog pool, (2) whether pass-through costs begin to moderate as management expects, and (3) trends in customer cancellations, given their outsize impact on revenue visibility. We will also track hiring and productivity metrics, particularly as demand in metabolic and obesity studies evolves.
Medpace currently trades at $580.54, up from $547.71 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free for active Edge members).
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