Medpace (NASDAQ:MEDP) reported third-quarter 2026 revenue growth of 8.5% and record net new business awards, while management said the clinical research organization continues to see a strong operating environment marked by healthy request-for-proposal activity, initial award notifications and win rates.
Revenue totaled $716 million for the quarter, compared with the prior-year period, while net income rose 23.7% to $137.5 million. Diluted earnings per share increased to $4.84 from $3.86 a year earlier. CEO August Troendle said the company’s net new business awards reached an all-time high during the quarter, with trailing 12-month awards growing 23.9%.
Third-Quarter Results and Updated Outlook
Chief Financial Officer Kevin Brady said third-quarter EBITDA rose 16% year over year to $172.1 million, producing an EBITDA margin of 24%, up from 22.5% in the prior-year quarter. The margin benefited from lower reimbursable costs, he said.
For the first nine months of 2026, Medpace generated revenue of $2.13 billion, up 16.9% from the comparable period in 2025. Year-to-date EBITDA increased 19.5% to $474.9 million, and net income rose 21.1% to $382.7 million.
The company raised its full-year 2026 outlook. Medpace now expects:
- Revenue of $2.835 billion to $2.855 billion, representing growth of 12% to 12.8% from 2025.
- EBITDA of $638 million to $652 million, representing growth of 14.4% to 16.9% from 2025.
- Net income of $514 million to $524 million.
- Diluted earnings per share of $17.97 to $18.32.
The guidance assumes a full-year effective tax rate of 19% to 19.5%, interest income of $22.9 million and 28.6 million diluted weighted-average shares outstanding. Brady said the company’s outlook does not assume additional share repurchases.
Record Awards Lift Backlog
Net new business awards entering backlog increased 10.6% year over year to $873.4 million in the third quarter. Over the past 12 months, awards totaled $3.02 billion. Ending backlog stood at approximately $3.2 billion as of Sept. 30, up 5.6% from a year earlier.
Medpace expects about $1.99 billion of backlog to convert into revenue during the next 12 months. Backlog conversion in the third quarter represented 23.8% of beginning backlog.
Troendle said the company’s opportunity funnel remains strong. While the number of RFPs has declined somewhat, the total dollar value and quality of pending opportunities have increased. He said client award decisions and project progress are occurring at a relatively normal pace, rather than being delayed.
Management said the therapeutic mix has shifted somewhat toward more traditional oncology work, while demand in metabolic programs has been lower recently. However, Troendle said Medpace is again seeing a significant number of pending metabolic opportunities.
2027 View Hinges on Cancellations and Fourth-Quarter Awards
Medpace plans to provide formal 2027 guidance with its fourth-quarter results in February. Troendle said the company does not see a large disconnect between current analyst consensus estimates and its internal modeling, though management wants more visibility before issuing detailed projections.
“Our view on 2027 has moved, and we expect it to continue to move,” Troendle said, explaining that fourth-quarter awards and cancellation trends will be important inputs to the company’s forecast.
The company characterized third-quarter cancellations as toward the higher end of its expected range, though not significant enough to warrant separate disclosure. Troendle said current cancellations are primarily tied to product failures, including products not meeting expectations or encountering safety signals, rather than funding constraints.
He added that cancellations can be unpredictable, but said Medpace sees no reason to expect unusually high cancellation levels. If fourth-quarter awards remain strong and cancellations stay within a normal range, management expects its 2027 outlook to improve.
Margins, Staffing and Capital Allocation
Brady said direct-service operations performed well in the third quarter, supported by solid utilization and revenue growth that outpaced headcount growth. He cautioned that quarterly margins can fluctuate because of contract timing and accounting effects, but said he does not anticipate a significant margin decline in the fourth quarter.
Looking ahead, management expects a headwind in 2027 from a Cincinnati campus expansion that is expected to add about $20 million in operating costs. Troendle said employee turnover remains very low and that wage and benefit cost increases remain within the company’s expectations.
Medpace generated $216.6 million in operating cash flow during the quarter and ended the period with $705.3 million of cash. Its net days sales outstanding was negative 66 days. The company’s top five and top 10 customers accounted for roughly 31% and 39%, respectively, of revenue over the trailing 12 months.
Separately, the board on Oct. 20 terminated the prior share-repurchase authorization and approved a new authorization allowing the company to repurchase up to $1 billion of its shares.
About Medpace (NASDAQ:MEDP)
Medpace Holdings, Inc is a contract research organization (CRO) that provides clinical development services to biotechnology, pharmaceutical and medical device companies. The company supports sponsors throughout the development process, from early-stage planning and regulatory submissions through clinical trial execution, data management, analysis and reporting.
Medpace’s services include Phase I through Phase IV clinical research, clinical monitoring, biostatistics, data management, medical writing, pharmacovigilance, regulatory consulting and central laboratory services.
