Medpace Posts Strong Revenue Growth Amid Challenging Market Conditions
The first quarter of 2025 marked a significant milestone for Medpace, as the company reported a year-over-year revenue increase of 9.3% to $558.6 million. This growth demonstrates the company's resilience and adaptability in an increasingly competitive market.
Despite a decline in net new business awards entering backlog, which decreased by 18.8% from the prior year, Medpace's ending backlog as of March 31, 2025, stood at approximately $2.8 billion, a 2.1% decrease from the previous year. This suggests that while there may be some challenges in the market, Medpace remains well-positioned to capitalize on emerging opportunities.
Medpace's CEO, August Troendle, noted during the conference call that the company continues to see a path to improve backlog growth reflected in book-to-bill ratios above 1.15 in Q3 and Q4. However, this will depend on moderating cancellations and an improved business climate.
Revenue for the quarter was driven by strong RFP flow, although quality has been variable and decisions are slowing. This trend is expected to continue in future quarters, with Medpace projecting approximately $1.61 billion of backlog to convert to revenue in the next 12 months.
Medpace's financial performance was also highlighted during the conference call, with EBITDA increasing 2.6% compared to the prior year period. The company's net income per diluted share for the quarter was $3.67, a significant increase from the previous year's $3.20. Cash flow from operating activities reached $125.8 million in the first quarter, and Medpace had $441.4 million in cash as of March 31, 2025.
The company also made progress on its share repurchase program, repurchasing approximately 1.9 million shares or $389.8 million during the quarter. With a remaining authorization program of $344.8 million, Medpace demonstrates its commitment to returning value to shareholders while maintaining financial flexibility.
Looking ahead, Medpace has updated its guidance for full-year 2025 total revenue, expecting it to be in the range of $2.25 billion to $2.30 billion. This suggests a continued focus on growth and expansion, despite the current market conditions. With its strong financial performance and commitment to innovation, Medpace remains well-positioned to drive success in an increasingly competitive industry.
