Earnings
Medpace beats on profit and resets its buyback at $1 billion, but its revenue outlook trails estimates
The clinical research firm's new business awards rose 10.6% and outpaced revenue, yet shares slipped after hours as the 2026 sales range came in just below consensus.
HedgeWeekly News Desk ·
Medpace Holdings reported third-quarter diluted earnings of $4.84 a share, up from $3.86 a year earlier and ahead of the $4.44 consensus cited by Investing.com. Revenue rose 8.5% to $716.0 million, roughly in line with the $714.5 million analysts expected. The Cincinnati-based contract research organisation's shares fell 1.9% in after-hours trading on Wednesday.
The outlook explains the muted reaction. Medpace guided to 2026 revenue of $2.835 billion to $2.855 billion, or 12.0% to 12.8% growth over 2025, with the midpoint slightly below the $2.852 billion consensus. Its GAAP earnings guidance of $17.97 to $18.32 a share sits above the $17.72 analysts had pencilled in. Quarterly EBITDA rose 16.0% to $172.1 million, a 24.0% margin, and net income climbed to $137.5 million from $111.1 million.
Demand indicators were firmer than the headline revenue growth. Net new business awards rose 10.6% to $873.4 million, about $157 million more than the revenue booked in the quarter, and backlog reached $3.17 billion at September 30, up 5.6% from a year earlier, with a backlog conversion rate of 23.8%. The company bought back no stock in the quarter. Effective October 20 its board ended the previous authorisation, which had $527.0 million left and was due to expire at the end of 2026, and replaced it with up to $1.0 billion of repurchases through December 2028, funded from cash on hand.
Medpace runs Phase I to IV trials for biotech, pharmaceutical and medical device developers, so its awards are a read on how much those companies are committing to clinical work. Awards running ahead of revenue add to the backlog that feeds future sales, which helps square a cautious revenue range with stronger orders. The buyback reset nearly doubles the capacity left under the old plan and pushes its expiry two years out. The release did not break out cancellations; investors will look for that and for award trends on the earnings call at 9:00 a.m. ET on Thursday.