Core Insights - Medpace reported strong Q2 2025 earnings, exceeding both revenue and earnings forecasts, with GAAP revenue of $603.3 million and GAAP EPS of $3.10 [1][2] - The company raised its revenue and net income guidance for FY2025, reflecting confidence in continued operational progress [10][11] Financial Performance - Q2 2025 GAAP revenue grew by 14.2% year-over-year, surpassing estimates by $64.5 million [5] - GAAP EPS increased by 12.7% compared to Q2 2024, from $2.75 to $3.10 [2] - EBITDA (Non-GAAP) rose by 16.2% year-over-year, with an EBITDA margin of 21.6% [2][6] Business Operations - Medpace specializes in clinical trials for pharmaceutical and biotech firms, providing a full suite of services across all phases of clinical development [3] - The company focuses on therapeutic areas such as oncology, cardiology, metabolic diseases, and infectious diseases, enhancing its competitive positioning [4][8] Market Trends - The backlog conversion rate improved to 21.2%, indicating efficient contract-to-revenue conversion [5] - Net new business awards reached $620.5 million, a 12.6% increase year-over-year, resulting in a book-to-bill ratio of 1.03x [5] Cost and Profitability - Selling, general, and administrative expenses increased by 12.5% compared to Q2 2024, attributed to a larger global footprint [7] - GAAP net income margin decreased from 16.7% to 15.0% due to rising expenses [6] Shareholder Returns - The company repurchased 1.75 million shares for $518.5 million, reducing the diluted share count by 9.2% year-over-year [7] Future Outlook - Management raised FY2025 revenue guidance to a range of $2.42 billion to $2.52 billion, with expected GAAP net income of $405 million to $428 million [10] - Key themes to monitor include new bookings, backlog growth, and the impact of rising costs on future margins [11]

[PART I — FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) This section presents the unaudited interim financial statements, management's analysis of financial condition and operations, market risk disclosures, and internal controls assessment [Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements) Unaudited financial statements for Q2 2025 reflect strong revenue growth, significant share repurchases, and reduced cash balances [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance sheet shows a significant decrease in cash and shareholders' equity due to share repurchases Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $46,330 | $669,436 | | Total current assets | $520,805 | $1,029,229 | | Total assets | $1,571,673 | $2,100,866 | | **Liabilities & Equity** | | | | Total current liabilities | $1,220,443 | $1,104,553 | | Total liabilities | $1,399,322 | $1,275,321 | | (Accumulated deficit) retained earnings | ($703,215) | $8,167 | | Total shareholders' equity | $172,351 | $825,545 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Statements of operations show strong revenue and net income growth for both Q2 and year-to-date 2025 Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue, net | $603,311 | $528,104 | $1,161,881 | $1,039,148 | | Income from operations | $126,335 | $105,150 | $239,858 | $209,219 | | Net income | $90,260 | $88,351 | $204,855 | $190,942 | | Diluted EPS | $3.10 | $2.75 | $6.79 | $5.96 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flow statement indicates strong operating cash flow offset by substantial share repurchases Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $274,362 | $269,074 | | Net cash used in investing activities | ($16,007) | ($10,260) | | Net cash (used in) provided by financing activities | ($886,530) | $8,326 | | **(Decrease) Increase in Cash** | **($623,106)** | **$265,445** | - The primary use of cash in financing activities was **$912.8 million** for repurchases of common stock during the first six months of 2025[13](index=13&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail expanded share repurchase program, significant backlog, credit facility amendments, and key revenue drivers - The Board of Directors increased the stock repurchase program authorization to **$2.1 billion**. During the first six months of 2025, the company repurchased 2,947,275 shares for **$908.4 million**[17](index=17&type=chunk) - As of June 30, 2025, the company had approximately **$3.5 billion** of remaining performance obligations for active projects[33](index=33&type=chunk) - The company amended its credit facility, increasing the borrowing capacity to **$600.0 million** in April 2025, and subsequently decreasing it to **$10.0 million** in July 2025, with no debt outstanding as of June 30, 2025[38](index=38&type=chunk)[39](index=39&type=chunk) Revenue from Key Related Parties (in millions) | Related Party | Q2 2025 Revenue | Q2 2024 Revenue | YTD 2025 Revenue | YTD 2024 Revenue | | :--- | :--- | :--- | :--- | :--- | | CinRx Pharma | $15.1 | $7.3 | $26.8 | $13.6 | | LIB Therapeutics | $1.7 | $3.9 | $3.9 | $10.4 | Revenue by Therapeutic Area - Six Months Ended June 30 (in thousands) | Therapeutic Area | 2025 | 2024 | | :--- | :--- | :--- | | Oncology | $359,034 | $318,150 | | Metabolic | $295,888 | $209,941 | | Other | $213,898 | $220,832 | | Cardiology | $116,863 | $116,336 | | Central Nervous System | $116,030 | $90,655 | | AVAI | $60,168 | $83,234 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses revenue growth drivers, new business awards, backlog trends, and the impact of share repurchases on liquidity Key Performance Metrics (in millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net new business awards | $620.5 | $551.0 | $1,120.6 | $1,166.5 | - Backlog as of June 30, 2025, was **$2,873.6 million**, a decrease of **1.8%** from **$2,924.9 million** as of June 30, 2024. Approximately **$1,740.0 million to $1,760.0 million** of this backlog is expected to convert to revenue in the next twelve months[81](index=81&type=chunk) - Revenue increase for the three and six months ended June 30, 2025 was primarily driven by growth within the Metabolic, Oncology and Central Nervous System therapeutic areas[87](index=87&type=chunk) - Cash and cash equivalents decreased from **$669.4 million** at year-end 2024 to **$46.3 million** as of June 30, 2025, primarily due to repurchases of common stock[96](index=96&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes to its quantitative and qualitative disclosures about market risk compared to those described in its Annual Report on Form 10-K for the fiscal year ended December 31, 2024 - There have been no material changes to the company's market risk disclosures since the last Annual Report on Form 10-K[112](index=112&type=chunk) [Controls and Procedures](index=27&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2025 - The Company's management, including the CEO and CFO, concluded that as of the end of the period, disclosure controls and procedures were effective in providing reasonable assurance[114](index=114&type=chunk) - No changes in internal control over financial reporting occurred during the second quarter of 2025 that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[116](index=116&type=chunk) [PART II — OTHER INFORMATION](index=28&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, and other disclosures [Legal Proceedings](index=28&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in incidental legal proceedings in the ordinary course of business but does not expect their resolution to have a material adverse effect on its financial statements - The company is party to legal proceedings incidental to its business and does not believe the resolution of these matters is reasonably likely to have a material adverse effect on its financial statements[117](index=117&type=chunk) [Risk Factors](index=28&type=section&id=Item%201A.%20Risk%20Factors) There have been no significant changes from the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 - No significant changes have occurred in the risk factors since the last Annual Report[118](index=118&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=28&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the second quarter of 2025, the company repurchased 1,754,264 shares of its common stock for a total of $518.5 million Share Repurchases in Q2 2025 | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April 2025 | 1,198,556 | $294.00 | | May 2025 | 233,447 | $292.30 | | June 2025 | 322,261 | $303.88 | | **Total** | **1,754,264** | **$295.59** | - The company returned **$518.5 million** to shareholders through share repurchases in the second quarter of fiscal year 2025[120](index=120&type=chunk) [Defaults Upon Senior Securities](index=28&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) None - None[122](index=122&type=chunk) [Mine Safety Disclosures](index=29&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable - Not applicable[123](index=123&type=chunk) [Other Information](index=29&type=section&id=Item%205.%20Other%20Information) During the second quarter of 2025, no director or officer of the company adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[124](index=124&type=chunk) [Exhibits](index=29&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed or furnished as part of the report, including amendments to loan documents, incentive plans, and officer certifications

Core Viewpoint - Medpace, a US contract research organization (CRO) providing clinical research outsourcing services primarily to small and mid-sized biotech companies, reported strong financial results, leading to a significant surge in its stock price [1][4]. Financial Performance - Revenue for Q2 reached $603.3 million, a year-over-year increase of 14.2%, surpassing analyst expectations of $542 million, and up from a 9.3% growth in Q1 [5]. - The diluted earnings per share (EPS) for Q2 was $3.10, reflecting a 12.7% year-over-year increase, exceeding the expected $3.00, with Q1 showing a 14.7% growth [5]. - EBITDA for Q2 was $130.5 million, up 16.2% year-over-year, with an EBITDA margin of 21.6%, compared to a 2.6% increase in Q1 [5]. Performance Guidance - For 2025, Medpace projects revenue between $2.42 billion and $2.52 billion, an increase from the previous guidance of $2.14 billion to $2.24 billion [7]. - The expected diluted EPS for 2025 is between $13.76 and $14.53, up from the prior guidance of $12.26 to $13.04 [7]. - EBITDA guidance for 2025 is set between $515 million and $545 million, revised from the previous range of $462 million to $492 million [7]. Market Reaction - Following the earnings report, Medpace's stock price jumped over 44% at the opening and reached a peak increase of 62.3% during early trading, marking the largest single-day gain since its IPO nearly nine years ago [1][4]. - The surge in Medpace's stock also positively impacted other CRO stocks, with Iqvia Holdings rising nearly 20%, ICLR PLC increasing over 10%, and Charles River Laboratories International also seeing a rise of over 10% [4]. Analyst Sentiment - Despite the strong performance, analysts from Jefferies remain cautious about the CRO industry, noting that Medpace's success may be an exception rather than a trend, citing concerns over reduced funding and extended decision-making cycles in the industry [9].

Group 1 - Medpace (NASDAQ: MEDP) reported its Q2 2025 financial results on July 21, 2025, exceeding expected earnings guidance for the quarter [2] - The company has raised its full-year 2025 revenue guidance, indicating positive growth prospects [2]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $603.3 million, representing a year-over-year increase of 14.2% and 13.8% on a constant currency basis [9][10] - EBITDA for Q2 2025 was $130.5 million, an increase of 16.2% compared to $112.3 million in Q2 2024, with an EBITDA margin of 21.6% [11][12] - Net income for Q2 2025 was $90.3 million, a 2.2% increase from $88.4 million in the prior year [12] Business Line Data and Key Metrics Changes - Net new business awards entering backlog in Q2 increased by 12.6% year-over-year to $620.5 million, resulting in a net book-to-bill ratio of 1.03 [9] - Ending backlog as of June 30, 2025, was approximately $2.9 billion, a decrease of 1.8% from the prior year [9] Market Data and Key Metrics Changes - The funding environment has stabilized and improved, allowing most clients with ongoing studies to secure sufficient funding [8] - The company anticipates a shift in business towards faster-burning therapeutic areas, which have a higher concentration of reimbursable costs [14] Company Strategy and Development Direction - The company raised its revenue guidance for 2025 by $280 million at the midpoint, now expecting total revenue in the range of $2.42 billion to $2.52 billion [14] - The strategy includes focusing on faster-burning therapeutic areas and improving operational efficiency to enhance productivity [10][14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about accelerating revenue in the second half of the year due to improved funding, fewer cancellations, and rapid project start-ups [8] - There is a cautious outlook regarding potential future cancellations, which could impact 2026 revenue growth [29][30] Other Important Information - The company repurchased approximately 1.75 million shares for $518.5 million in Q2 2025, with $826.3 million remaining under the share repurchase authorization program [13] - The effective tax rate for 2025 is expected to be between 18.5% and 19% [14] Q&A Session Summary Question: What are the booking expectations for the second half? - Management expects bookings to increase, with a reasonable chance of achieving a book-to-bill ratio above 1.15, depending on cancellation rates [18] Question: Can you provide information on cancellations? - Cancellations were down across the portfolio, with rates lower than historical averages, contributing to better-than-expected performance [19] Question: How does the increased guidance break down between pass-through and direct revenue? - The increase is largely due to accelerated reimbursable cost activity, but there is also improved productivity from existing staff [24] Question: What is the outlook for funding and demand? - Management is cautious about the weak funding environment but has visibility into awarded projects that should support bookings [28][29] Question: What characterized the win rate this quarter? - The win rate was lower due to the loss of a few large projects, but overall decisions increased, leading to good new awards [46][52] Question: What is the expected hiring trend for the second half? - The company anticipates accelerated hiring in the second half, aiming for mid to upper single-digit growth in headcount [82][101]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $603.3 million, representing a year-over-year increase of 14.2% and 13.8% on a constant currency basis [10][12] - EBITDA for Q2 2025 was $130.5 million, an increase of 16.2% compared to $112.3 million in Q2 2024, with an EBITDA margin of 21.6% [11][12] - Net income for Q2 2025 was $90.3 million, a 2.2% increase from $88.4 million in the prior year [12] Business Line Data and Key Metrics Changes - Net new business awards entering backlog in Q2 increased by 12.6% year-over-year to $620.5 million, resulting in a net book-to-bill ratio of 1.03 [8][10] - Ending backlog as of June 30, 2025, was approximately $2.9 billion, a decrease of 1.8% from the prior year [8] Market Data and Key Metrics Changes - The company anticipates that approximately $1.75 billion of backlog will convert to revenue in the next twelve months, with a backlog conversion rate of 21.2% in Q2 [9][10] - The funding environment has stabilized and improved, allowing most clients with ongoing studies to secure sufficient funding [7][10] Company Strategy and Development Direction - The company raised its revenue guidance for 2025 by $280 million at the midpoint, now expecting total revenue in the range of $2.42 billion to $2.52 billion, reflecting growth of 14.7% to 19.5% over 2024 [14] - The strategic shift towards faster-burning therapeutic areas is expected to increase reimbursable costs as a percentage of revenue by 200 to 300 basis points over the remainder of the year [14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about accelerating revenue in the second half of the year due to improved funding, fewer cancellations, and rapid project start-ups [7][10] - The management acknowledged that while the funding environment has improved, there remains uncertainty regarding future cancellations and their impact on 2026 [29][30] Other Important Information - The company repurchased approximately 1.75 million shares for $518.5 million in Q2 2025, with $826.3 million remaining under the share repurchase authorization program [12][13] - The effective tax rate for 2025 is expected to be between 18.5% and 19% [14] Q&A Session Summary Question: What are the booking expectations for the second half? - Management expects bookings to increase, with a reasonable chance of getting the book-to-bill ratio back over 1.15, depending on cancellation rates [19] Question: Can you provide information on cancellations? - Cancellations were down across the entire portfolio, with rates lower than historical averages, contributing to better-than-expected bookings and performance [20] Question: How does the increase in pass-through costs impact revenue? - The increase in pass-through costs is expected to significantly influence revenue, with a large portion of the revenue increase attributed to accelerated reimbursable cost activity [24] Question: What is the outlook for funding and demand activity? - Management noted that while funding has improved, there is still uncertainty regarding potential future downturns in demand activity [30] Question: How did intra-quarter trends evolve in Q2? - The business environment remained strong throughout Q2, with low cancellation rates contributing to a stable demand environment [35] Question: What are the dynamics around bookings and competitive win rates? - The win rate was lower in Q2 due to the presence of large projects that were lost, but the overall number of decisions made increased significantly [48] Question: What is the expected hiring trend for the second half? - The company anticipates accelerated hiring in the second half, with a focus on maintaining mid to upper single-digit growth rates for the year [85]

Financial Performance - Revenue for Q2 2025 was $603.3 million, a 14.2% increase compared to $528.1 million in Q2 2024 [13, 21] - Year-to-date revenue reached $1,161.9 million, an 11.8% increase from $1,039.1 million in 2024 [13, 21] - EBITDA for Q2 2025 was $130.5 million, a 16.2% increase compared to $112.3 million in Q2 2024 [21] - Year-to-date EBITDA reached $249.1 million, a 9.3% increase from $227.9 million in 2024 [21] - Net income for Q2 2025 was $90.3 million, a 2.2% increase compared to $88.4 million in Q2 2024 [21] - Net income per diluted share for Q2 2025 was $3.10, a 12.7% increase compared to $2.75 in Q2 2024 [21] Business Trends - Net new business awards for Q2 2025 were $620.5 million, a 12.6% increase compared to $551.0 million in Q2 2024 [13] - Ending backlog was $2,873.6 million, a 1.8% decrease compared to $2,924.9 million in Q2 2024 [13] Cash Flow - Free cash flow for Q2 2025 was $142.4 million, compared to $103.5 million in Q2 2024 [39, 41] - Free cash flow conversion was 109.2% for Q2 2025, compared to 92.2% in Q2 2024 [39, 41] Guidance - Full year 2025 revenue guidance is $2,420.0 million - $2,520.0 million, representing a 14.7% - 19.5% growth rate [28, 43] - Full year 2025 EBITDA guidance is $515.0 million - $545.0 million, representing a 7.3% - 13.5% growth rate [28, 43]

Company Performance - Medpace reported quarterly earnings of $3.1 per share, exceeding the Zacks Consensus Estimate of $3 per share, and up from $2.75 per share a year ago, representing an earnings surprise of +3.33% [1] - The company posted revenues of $603.31 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 11.48%, compared to year-ago revenues of $528.1 million [2] - Over the last four quarters, Medpace has surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [2] Stock Performance and Outlook - Medpace shares have declined approximately 6.1% since the beginning of the year, while the S&P 500 has gained 7.1% [3] - The company's earnings outlook will be crucial for future stock performance, with current consensus EPS estimates at $2.95 for the coming quarter and $12.68 for the current fiscal year [4][7] - The estimate revisions trend for Medpace was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Medical Services industry, to which Medpace belongs, is currently in the top 37% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - The performance of Medpace's stock may also be influenced by the overall industry outlook, as empirical research indicates a strong correlation between near-term stock movements and earnings estimate revisions [5][8]

Investor Contact: Lauren Morris 513.579.9911 x11994 l.morris@medpace.com Exhibit 99.1 FOR IMMEDIATE RELEASE Media Contact: Michael Maley 513.579.9911 x12831 m.maley@medpace.com Medpace Holdings, Inc. Reports Second Quarter 2025 Results CINCINNATI, OHIO, July 21, 2025-- Medpace Holdings, Inc. (Nasdaq: MEDP) ("Medpace") today announced financial results for the second quarter ended June 30, 2025. Second Quarter 2025 Financial Results Revenue for the three months ended June 30, 2025 increased 14.2% to $603.3 m ...

Core Viewpoint - Investors in the Medical Services sector should consider Organon (OGN) and Medpace (MEDP) as potential undervalued stocks, with OGN appearing to be the superior option based on valuation metrics and earnings estimate revisions [1][7]. Valuation Metrics - OGN has a forward P/E ratio of 2.47, significantly lower than MEDP's forward P/E of 24.59, indicating that OGN may be undervalued relative to MEDP [5]. - The PEG ratio for OGN is 0.94, while MEDP's PEG ratio is 5.64, suggesting that OGN's expected earnings growth is more favorable compared to its price [5]. - OGN's P/B ratio is 4.54, compared to MEDP's P/B of 15.1, further highlighting OGN's more attractive valuation [6]. Analyst Outlook - OGN currently holds a Zacks Rank of 2 (Buy), indicating a positive earnings estimate revision trend, while MEDP has a Zacks Rank of 3 (Hold), suggesting a less favorable outlook [3]. - The stronger estimate revision activity for OGN, combined with its attractive valuation metrics, positions it as a more appealing choice for value investors [7].