Medpace(MEDP) - 2025 Q2 - Quarterly Report

PART I — FINANCIAL INFORMATION 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) Unaudited financial statements for Q2 2025 reflect strong revenue growth, significant share repurchases, and reduced cash balances Condensed Consolidated Balance Sheets 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 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 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] Notes to Condensed Consolidated Financial Statements 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] - As of June 30, 2025, the company had approximately $3.5 billion of remaining performance obligations for active projects[33] - 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][39] 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 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] - 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] - 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] Quantitative and Qualitative Disclosures About Market Risk 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] Controls and Procedures 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] - 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] PART II — OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, and other disclosures Legal Proceedings 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] Risk Factors 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] Unregistered Sales of Equity Securities and Use of Proceeds 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] Defaults Upon Senior Securities None - None[122] Mine Safety Disclosures Not applicable - Not applicable[123] Other Information 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] Exhibits This section lists the exhibits filed or furnished as part of the report, including amendments to loan documents, incentive plans, and officer certifications