Form 10-Q - Quarterly report [Sections 13 or 15(d)]

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________________

FORM 10-Q

___________________________________________

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission file number: 001-37856

___________________________________________

Medpace Holdings, Inc.

(Exact name of registrant as specified in its charter)

___________________________________________


Delaware			32-0434904
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

5375 Medpace Way, Cincinnati, OH 45227

(Address of principal executive offices) (Zip Code)

(513) 579-9911

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock $0.01 par value	MEDP	NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	x	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	o
Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock, as of the latest practicable date.


Class						Number of Shares Outstanding
Common Stock $0.01 par value						30,683,436 shares outstanding as of October 20, 2023

Table of Contents

MEDPACE HOLDINGS, INC. AND SUBSIDIARIES

FORM 10-Q

FOR QUARTERLY PERIOD ENDED SEPTEMBER 30, 2023

TABLE OF CONTENTS


Item Number		Page
	PART I — FINANCIAL INFORMATION	3
Item 1.	Financial Statements (unaudited)	3
	Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022	3
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2023 and 2022	4
	Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2023 and 2022	5
	Condensed Consolidated Statements of Shareholders’ Equity for the three and nine months ended September 30, 2023 and 2022	6
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	25

	PART II — OTHER INFORMATION	26
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3.	Defaults Upon Senior Securities	26
Item 4.	Mine Safety Disclosures	26
Item 5.	Other Information	26
Item 6.	Exhibits	27
	EXHIBIT INDEX	28
	SIGNATURES	29

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PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

MEDPACE HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)


(Amounts in thousands, except share amounts)	As of
	September 30, 2023		December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	95,207	$	28,265
Accounts receivable and unbilled, net (includes $2.2 million and $7.7 million with related parties at September 30, 2023 and December 31, 2022, respectively)	292,773		253,404
Prepaid expenses and other current assets	60,901		52,293
Total current assets	448,881		333,962
Property and equipment, net	114,764		109,849
Operating lease right-of-use assets	144,147		139,068
Goodwill	662,396		662,396
Intangible assets, net	36,359		38,008
Deferred income taxes	59,343		48,083
Other assets	20,831		21,129
Total assets	$	1,486,721	$	1,352,495
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable (includes $3.1 million and $0.3 million with related parties at September 30, 2023 and December 31, 2022, respectively)	$	29,023	$	33,069
Accrued expenses	264,785		210,125
Advanced billings (includes $13.4 million and $8.8 million with related parties at September 30, 2023 and December 31, 2022, respectively)	518,755		462,729
Short-term debt	—		50,000
Other current liabilities (includes $12.5 million with related parties at December 31, 2022)	35,955		47,547
Total current liabilities	848,518		803,470
Operating lease liabilities	143,039		138,867
Deferred income tax liability	1,128		1,070
Other long-term liabilities	23,124		22,701
Total liabilities	1,015,809		966,108
Commitments and contingencies (see Note 11)
Shareholders’ equity:
Preferred stock - $0.01 par-value; 5,000,000 shares authorized; no shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively	—		—
Common stock - $0.01 par-value; 250,000,000 shares authorized at September 30, 2023 and December 31, 2022, respectively; 30,682,157 and 31,091,694 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively	307		309
Treasury stock - 70,573 and 71,573 shares at September 30, 2023 and December 31, 2022, respectively	(12,322)		(12,497)
Additional paid-in capital	795,994		770,794
Accumulated deficit	(300,197)		(359,827)
Accumulated other comprehensive loss	(12,870)		(12,392)
Total shareholders’ equity	470,912		386,387
Total liabilities and shareholders’ equity	$	1,486,721	$	1,352,495

See notes to condensed consolidated financial statements.

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MEDPACE HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)


(Amounts in thousands, except per share amounts)	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Revenue, net (includes $15.5 million and $9.8 million with related parties for the three months ended September 30, 2023 and 2022, respectively, and $44.6 million and $40.3 million with related parties for the nine months ended September 30, 2023 and 2022, respectively)	$	492,499	$	383,744	$	1,387,441	$	1,065,898
Operating expenses:
Direct service costs, excluding depreciation and amortization	164,364		136,648		473,958		394,200
Reimbursed out-of-pocket expenses	194,942		128,062		525,784		354,991
Total direct costs	359,306		264,710		999,742		749,191
Selling, general and administrative	41,407		35,418		118,838		97,999
Depreciation	6,329		4,951		17,707		13,928
Amortization	549		838		1,649		2,514
Total operating expenses	407,591		305,917		1,137,936		863,632
Income from operations	84,908		77,827		249,505		202,266
Other (expense) income, net:
Miscellaneous (expense) income, net	(1,602)		5,649		(2,198)		9,027
Interest expense, net	(105)		(1,584)		(2,332)		(2,078)
Total other (expense) income, net	(1,707)		4,065		(4,530)		6,949
Income before income taxes	83,201		81,892		244,975		209,215
Income tax provision	12,651		15,865		40,463		32,517
Net income	$	70,550	$	66,027	$	204,512	$	176,698
Net income per share attributable to common shareholders:
Basic	$	2.30	$	2.13	$	6.65	$	5.39
Diluted	$	2.22	$	2.05	$	6.42	$	5.18
Weighted average common shares outstanding:
Basic	30,629		31,009		30,723		32,791
Diluted	31,762		32,253		31,839		34,098

See notes to condensed consolidated financial statements.

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MEDPACE HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)


(Amounts in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net income	$	70,550	$	66,027	$	204,512	$	176,698
Other comprehensive income
Foreign currency translation adjustments, net of taxes	(1,676)		(6,080)		(478)		(11,206)
Comprehensive income	$	68,874	$	59,947	$	204,034	$	165,492

See notes to condensed consolidated financial statements.

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MEDPACE HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)


(Amounts in thousands)	Common Stock		Treasury Stock		Additional Paid-In Capital		(Accumulated Deficit) Retained Earnings		Accumulated Other Comprehensive Loss		Total
BALANCE — December 31, 2021	$	360	$	(5,427)	$	727,857	$	234,984	$	(4,846)	$	952,928
Net income							61,311				61,311
Foreign currency translation									(1,542)		(1,542)
Stock-based compensation expense					4,372						4,372
Stock options exercised	3				13,894						13,897
Repurchases of common stock	(27)		(14,243)				(411,680)				(425,950)
Retirement of treasury stock			5,427				(5,427)				—
BALANCE — March 31, 2022	$	336	$	(14,243)	$	746,123	$	(120,812)	$	(6,388)	$	605,016
Net income							49,360				49,360
Foreign currency translation									(3,584)		(3,584)
Stock-based compensation expense					5,653						5,653
Stock options exercised					1,524						1,524
Repurchases of common stock	(27)						(374,690)				(374,717)
BALANCE — June 30, 2022	$	309	$	(14,243)	$	753,300	$	(446,142)	$	(9,972)	$	283,252
Net income							66,027				66,027
Foreign currency translation									(6,080)		(6,080)
Stock-based compensation expense					5,794						5,794
Stock options exercised					892						892
BALANCE — September 30, 2022	$	309	$	(14,243)	$	759,986	$	(380,115)	$	(16,052)	$	349,885

	Common Stock		Treasury Stock		Additional Paid-In Capital		(Accumulated Deficit) Retained Earnings		Accumulated Other Comprehensive Loss		Total
BALANCE — December 31, 2022	$	309	$	(12,497)	$	770,794	$	(359,827)	$	(12,392)	$	386,387
Net income							72,894				72,894
Foreign currency translation									1,078		1,078
Stock-based compensation expense					5,438						5,438
Stock options exercised	4				2,459						2,463
Repurchases of common stock	(7)						(120,991)				(120,998)
Re-issuance of treasury stock			175				(175)				—
BALANCE — March 31, 2023	$	306	$	(12,322)	$	778,691	$	(408,099)	$	(11,314)	$	347,262
Net income							61,068				61,068
Foreign currency translation									120		120
Stock-based compensation expense					4,906						4,906
Stock options exercised	1				1,695						1,696
Repurchases of common stock	(1)						(23,991)				(23,992)
BALANCE — June 30, 2023	$	306	$	(12,322)	$	785,292	$	(371,022)	$	(11,194)	$	391,060
Net income							70,550				70,550
Foreign currency translation									(1,676)		(1,676)
Stock-based compensation expense					5,007						5,007
Stock options exercised	1				5,695						5,696
Repurchases of common stock							275				275
BALANCE — September 30, 2023	$	307	$	(12,322)	$	795,994	$	(300,197)	$	(12,870)	$	470,912

See notes to condensed consolidated financial statements.

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MEDPACE HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


(Amounts in thousands)	Nine Months Ended September 30,
	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	204,512	$	176,698
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	17,707		13,928
Amortization	1,649		2,514
Stock-based compensation expense	15,351		15,819
Noncash lease expense	14,579		13,460
Deferred income tax benefit	(11,308)		(2,126)
Other	821		(350)
Changes in assets and liabilities:
Accounts receivable and unbilled, net	(39,314)		(62,438)
Prepaid expenses and other current assets	(8,954)		(17,397)
Accounts payable	(921)		770
Accrued expenses	54,923		47,848
Advanced billings	56,026		73,286
Lease liabilities	(14,433)		(11,134)
Other assets and liabilities, net	(13,659)		488
Net cash provided by operating activities	276,979		251,366
CASH FLOWS FROM INVESTING ACTIVITIES:
Property and equipment expenditures	(26,662)		(27,636)
Other	30		(1,886)
Net cash used in investing activities	(26,632)		(29,522)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from stock option exercises	9,855		16,313
Repurchases of common stock	(144,020)		(800,667)
Proceeds from revolving loan	105,000		299,200
Payments on revolving loan	(155,000)		(159,500)
Net cash used in financing activities	(184,165)		(644,654)
EFFECT OF EXCHANGE RATES ON CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	760		(7,487)
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	66,942		(430,297)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — Beginning of period	28,265		461,304
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — End of period	$	95,207	$	31,007
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION —
Acquisition of property and equipment—non-cash	$	4,704	$	9,094

See notes to condensed consolidated financial statements.

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MEDPACE HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

September 30, 2023

(1) Basis of Presentation

Description of Business

Medpace Holdings, Inc. (together with its subsidiaries, “Medpace” or the “Company”), a Delaware corporation, is a global provider of clinical research-based drug and medical device development services. The Company partners with pharmaceutical, biotechnology, and medical device companies in the development and execution of clinical trials. The Company’s drug development services focus on full service Phase I-IV clinical development services and include development plan design, project management, regulatory affairs, clinical monitoring, data management and analysis, pharmacovigilance new drug application submissions, post-marketing clinical support, laboratory services, clinical human pharmacology, imaging services, and electrocardiography reading support for clinical trials.

The Company’s operations are principally based in North America, Europe, and Asia.

Unaudited Interim Financial Information

The interim condensed consolidated financial statements include the accounts of the Company, are prepared in conformity with U.S. generally accepted accounting principles (“GAAP”), and are unaudited. In the opinion of the Company’s management, all adjustments of a normal recurring nature necessary for a fair presentation have been reflected. Certain financial information that is normally included in annual financial statements prepared in accordance with GAAP, but that is not required for interim reporting purposes, has been omitted. The preparation of the interim condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results and outcomes could differ from management’s estimates and assumptions. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

Share Repurchases

In 2018, the Board of Directors approved a stock repurchase program which has been amended several times to increase the aggregate amount of the stock repurchase authorization. During the nine months ended September 30, 2022, the Company repurchased 5,463,244 shares for $800.5 million.

In the fourth quarter of 2022, the Board approved a new stock repurchase program of up to $500.0 million. The Company did not execute any share repurchases during the three months ended September 30, 2023. During the nine months ended September 30, 2023, the Company repurchased 781,068 shares for $144.0 million. As of September 30, 2023, we have remaining authorization of $308.8 million under the new repurchase program.

Repurchases under the share repurchase program are executed in the open market or negotiated transactions under trading plans put in place pursuant to Rule 10b5-1. The Company constructively retired the repurchased shares associated with these approved share repurchases, except for a small portion which were retained as Treasury Shares on the condensed consolidated statements of shareholders' equity. Retired share repurchase amounts paid in excess of par value are reflected within Accumulated deficit/Retained earnings in the Company’s condensed consolidated balance sheets.

(2) Net Income Per Share

Basic and diluted earnings or loss per share (“EPS”) are computed using the two-class method, which is an earnings allocation that determines EPS for each class of common stock and participating securities according to dividends declared and participation rights in undistributed earnings. The Company’s Restricted Stock Awards (“RSA”) are considered participating securities because they are legally issued at the date of grant and holders are entitled to receive non-forfeitable dividends during the vesting term.

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The computation of diluted EPS includes additional common shares, such as unvested Restricted Stock Units (“RSU”) and stock options with exercise prices less than the average market price of the Company’s common stock during the period (“in-the-money options”), which would be considered outstanding. This assumes that additional shares would have to be issued in cases where the exercise price of stock options is less than the value of the common stock being acquired because the cash proceeds received from the stock option holder would not be sufficient to acquire that same number of shares. The Company does not compute diluted EPS in cases where the inclusion of such additional shares would be anti-dilutive in effect.

The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2023 and 2022 (in thousands, except for earnings per share):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Weighted-average shares:
Common shares outstanding	30,629		31,009		30,723		32,791
RSAs	21		21		21		21
Total weighted-average shares	30,650		31,030		30,744		32,812
Earnings per common share—Basic
Net income	$	70,550	$	66,027	$	204,512	$	176,698
Less: Undistributed earnings allocated to RSAs	(48)		(44)		(138)		(112)
Net income available to common shareholders—Basic	$	70,502	$	65,983	$	204,374	$	176,586

Net income per common share—Basic	$	2.30	$	2.13	$	6.65	$	5.39

Basic weighted-average common shares outstanding	30,629		31,009		30,723		32,791
Effect of diluted shares	1,133		1,244		1,116		1,307
Diluted weighted-average shares outstanding	31,762		32,253		31,839		34,098

Net income per common share—Diluted	$	2.22	$	2.05	$	6.42	$	5.18

During the nine months ended September 30, 2023, the Company had (in thousands) 0.6 stock options that were excluded due to the exercise price exceeding the average fair value of the Company’s common stock during the period. During the three and nine months ended September 30, 2022, the Company had (in thousands) 274.4 stock options, respectively, that were excluded due to the exercise price exceeding the average fair value of the Company’s common stock during the period.

(3) Fair Value Measurements

The Company follows accounting guidance related to fair value measurements that defines fair value, establishes a framework for measuring fair value, and establishes a hierarchy for inputs used in measuring fair value. This hierarchy maximizes the use of “observable” inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The hierarchy specifies three levels based on the inputs, as follows:

Level 1: Valuations based on quoted prices in active markets for identical assets or liabilities.

Level 2: Valuations based on directly observable inputs or unobservable inputs corroborated by market data.

Level 3: Valuations based on unobservable inputs supported by little or no market activity representing management’s determination of assumptions of how market participants would price the assets or liabilities.

The fair value of financial instruments such as cash and cash equivalents, accounts receivable and unbilled, net, accounts payable, accrued expenses and advanced billings approximate their carrying amounts due to their short term maturities.

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The Company does not have material recurring fair value measurements as of September 30, 2023. There were no material transfers between Level 1, Level 2 or Level 3 during the three and nine months ended September 30, 2023 or September 30, 2022.

(4) Contract Assets and Contract Liabilities

Contract assets and liabilities are reflected in the Company’s condensed consolidated balance sheets within the accounts reflected below.

Contract Assets

Accounts receivable represent amounts due from the Company’s customers who are concentrated primarily in the pharmaceutical, biotechnology, and medical device industries. Unbilled represents revenue recognized to date that has not been billed or is not yet contractually billable to the customer. In general, amounts become billable upon the achievement of negotiated contractual events, in accordance with predetermined payment schedules or when a reimbursable expense has been incurred. Amounts classified to unbilled are those billable to customers within one year from the respective balance sheet date.

Accounts receivable and unbilled, net consisted of the following (in thousands):


	As of
	September 30, 2023		December 31, 2022
Accounts receivable	$	257,294	$	213,169
Unbilled receivables	35,486		40,405
Less: allowance for doubtful accounts	(7)		(170)
Total accounts receivable and unbilled, net	$	292,773	$	253,404

Contract Liabilities

Advanced billings represent cash received from customers, or billed amounts per an agreed upon payment schedule, in advance of services being performed or revenue being recognized.

Advanced billings consisted of the following (in thousands):


	As of
	September 30, 2023		December 31, 2022
Advanced billings	$	518,755	$	462,729

As of September 30, 2023, we had approximately $2.8 billion of performance obligations remaining to be performed for active projects.

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(5) Intangible Assets, Net

Intangible assets, net consisted of the following (in thousands):


	As of
	September 30, 2023		December 31, 2022
Intangible assets:
Finite-lived intangible assets:
Carrying amount:
Customer relationships	145,051		145,051
Accumulated amortization:
Customer relationships	(140,338)		(138,689)
Total finite-lived intangible assets, net	4,713		6,362
Trade name (indefinite-lived)	31,646		31,646
Total intangible assets, net	$	36,359	$	38,008

As of September 30, 2023, estimated amortization expense of the Company’s intangible assets for each of the next five years and thereafter is as follows (in thousands):


	Amortization
Remainder of 2023	$	550
2024	1,443
2025	946
2026	620
2027	577
2028	577
	$	4,713

(6) Accrued Expenses

Accrued expenses consisted of the following (in thousands):


	As of
	September 30, 2023		December 31, 2022
Employee compensation and benefits	$	69,509	$	71,197
Project related reimbursable expenses	183,998		128,416
Other	11,278		10,512
Total accrued expenses	$	264,785	$	210,125

(7) Short-term Debt

Short-term debt consisted of the following (in thousands):


	As of
	September 30, 2023		December 31, 2022
Credit facility	$	—	$	50,000
Short-term debt	$	—	$	50,000

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The estimated fair value of the Company’s debt based on Level 2 inputs using the market approach, which is primarily based on rates at which the debt is traded among financial institutions, approximates the carrying value as of December 31, 2022.

On September 30, 2019 (the “Closing Date”), the Company obtained an unsecured credit facility in an aggregate principal amount up to $50.0 million (as amended from time to time, the “Credit Facility”) through its wholly owned subsidiaries, Medpace, Inc., as borrower (the “Borrower”), and Medpace IntermediateCo, Inc., as guarantor (the “Guarantor”).

On the Closing Date, the Borrower and lender entered into a Loan Agreement (as it may be amended from time to time, the “Loan Agreement”) providing for the Credit Facility, and the Guarantor executed a Guaranty Agreement providing for its guarantee of the payment and performance of the obligations under the Loan Agreement. On March 15, 2022, the Company entered into Amendment No. 4 to the Loan Agreement, which increased the aggregate principal amount that may be borrowed under the facility’s line of credit to up to $250.0 million. On March 31, 2023, the Company entered into Amendment No. 5 to the Loan Agreement, which changed the aggregate principal amount that may be borrowed under the facility’s line of credit to up to $150.0 million, adjusted the interest rate and fee charged on the credit facility and extended the expiration date of revolving credit note to March 29, 2024. The Credit Facility bears interest at a rate of the sum of The Secured Overnight Financing Rate (SOFR) plus 125 basis points (1.25%) or the highest of the Prime Rate, the sum of the Overnight Bank Funding Rate plus 50 basis points (0.50%) and the sum of Daily Simple SOFR plus 100 basis points (1.00%).

The Loan Agreement contains other customary loan terms, representations and warranties, and affirmative and negative covenants, in each case, subject to customary limitations, exceptions and exclusions. The Loan Agreement contains certain events of default, including, among others, non-payment of principal or interest and breach of the covenants.

As of September 30, 2023, there were less than $0.1 million in letters of credit outstanding related to certain operating lease obligations, which are secured by the Credit Facility.

(8) Leases

The Company enters into leases for real estate and equipment. Real estate leases are for our corporate office space and laboratories around the world. Real estate leases have remaining lease terms of less than 1 year to 17 years. Many of the Company’s leases include options to extend the leases on a month to month basis or for set periods for up to 20 years. Many leases also include options to terminate the leases within 1 year or per other contractual terms.

The components of lease expense were as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Operating lease cost	$	7,002	$	6,482	$	20,637	$	19,357
Variable lease cost	2,372		2,240		6,544		6,353

Supplemental cash flow information related to the leases was as follows (in thousands):


	Nine Months Ended September 30,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	14,883	$	12,045

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	20,412		29,915

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Supplemental balance sheet information related to the leases was as follows (in thousands):


	As of
	September 30, 2023			December 31, 2022
Operating lease right-of-use assets - related parties	$	84,592		$	86,356
Operating lease right-of-use assets - non-related parties	59,555			52,712
Operating lease right-of-use assets	$	144,147		$	139,068

Other current liabilities - related parties	5,592			5,409
Other current liabilities - non-related parties	14,686			13,863
Other current liabilities	$	20,278		$	19,272

Operating lease liabilities - related parties	92,049			93,393
Operating lease liabilities - non-related parties	50,990			45,474
Operating lease liabilities	143,039			138,867
Total operating lease liabilities	$	163,317		$	158,139

Weighted Average Remaining Lease Term (years)
Operating leases	10.3			11.1
Weighted Average Discount Rate
Operating leases	5.4		%	5.2		%

Lease payments due related to lease liabilities as of September 30, 2023 were as follows (in thousands):


	Related Party Operating Leases		Non-Related Parties Operating Leases		Total Operating Leases
Remainder of 2023	$	2,827	$	4,157	$	6,984
2024	11,412		16,333		27,745
2025	11,607		15,110		26,717
2026	11,807		12,878		24,685
2027	10,839		9,843		20,682
Later years	100,278		14,449		114,727
Total lease payments	148,770		72,770		221,540
Less: imputed interest	(51,129)		(7,094)		(58,223)
Total	$	97,641	$	65,676	$	163,317

As of September 30, 2023, we have several additional leases with contractual obligations, which have not yet commenced, with future payments of $4.6 million.

(9) Shareholder’s Equity and Stock-Based Compensation

The Company granted 38,188 awards to employees under the 2016 Incentive Award Plan during the nine months ended September 30, 2023, consisting of 36,938 RSU and 1,250 stock option awards having four year vesting schedules. The Company granted an additional 11,187 stock option awards to non-employee directors under the 2016 Incentive Award Plan, during the nine months ended September 30, 2023. These awards are scheduled to vest on the earlier of (a) the day immediately preceding the date of the first annual meeting following the date of grant and (b) the first anniversary of the date of grant, subject to the non-employee director continuing in service through the applicable vesting date.

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Award Activity

The following table sets forth the Company’s stock option activity:


	Nine Months Ended September 30, 2023
	Stock Options	Weighted Average Exercise Price
Outstanding - beginning of period	1,629,148	$	89.71
Granted	12,437	$	211.25
Exercised	(238,492)	$	41.32
Cancelled/Forfeited/Expired	(9,750)	$	186.77
Outstanding - end of period	1,393,343	$	98.39

Exercisable - end of period	950,421	$	72.58

The following table sets forth the Company’s RSA/RSU activity:


			Nine Months Ended September 30, 2023
			Shares/Units
Outstanding and unvested - beginning of period			523,377
Granted			36,938
Vested			(133,039)
Forfeited			(20,809)
Outstanding and unvested - end of period			406,467

Cumulative vested shares - end of period			2,362,955

Stock-based compensation expense recognized in the condensed consolidated statements of operations related to all outstanding stock based compensation awards is summarized below (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Total direct costs	$	2,745	$	3,179	$	8,243	$	8,744
Selling, general and administrative	2,262		2,615		7,108		7,075
Total stock-based compensation expense	$	5,007	$	5,794	$	15,351	$	15,819

(10) Income Taxes

The Company’s effective income tax rate was 15.2% and 19.4% for the three months ended September 30, 2023 and 2022, respectively. The Company's effective income tax rate was 16.5% and 15.5% for the nine months ended September 30, 2023 and 2022, respectively. The Company’s effective income tax rate for the three months ended September 30, 2023 and the nine months ended September 30, 2023 varied from the U.S. statutory rate of 21% primarily due to the impact of the state taxes, which was favorably offset by excess tax benefits recognized from share-based compensation and tax benefits related to Foreign Derived Intangible Income (FDII).

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(11) Commitments and Contingencies

Legal Proceedings

The Company is involved in legal proceedings from time to time in the ordinary course of its business, including employment claims and claims related to other business transactions. The Company cannot predict with certainty the outcome of such proceedings, but it believes that adequate reserves have been recorded and losses already recognized with respect to such proceedings, which were immaterial as of September 30, 2023 and December 31, 2022. There is a reasonable possibility that a loss exceeding amounts already recognized may be incurred related to these actions; however, the Company believes that such potential losses were immaterial as of September 30, 2023.

Purchase Commitments

The Company has several minimum purchase commitments for project related supplies totaling $16.9 million as of September 30, 2023. In return for the commitment, Medpace receives preferential pricing. The commitments expire at various times through 2029.

(12) Related Party Transactions

Employee Loans

The Company periodically extends short term loans or advances to employees, typically upon commencement of employment. Total receivables as a result of these employee advances of $0.3 million existed at September 30, 2023 and December 31, 2022, respectively, and are included in the Prepaid expenses and other current assets and Other assets line items of the condensed consolidated balance sheets, respectively, depending on the contractual repayment date.

Service Agreement

LIB Therapeutics LLC and subsidiaries (“LIB”)

Certain executives and employees of the Company, including the chief executive officer, are members of LIB’s board of managers. The Company entered into a MSA dated November 24, 2015 with LIB, a company that engages in research, development, marketing and commercialization of pharmaceutical drugs. Subsequently, the Company and LIB have entered into several task orders for the Company to perform clinical trial related services. The Company recognized total revenue from LIB of $10.1 million and $9.5 million during the three months ended September 30, 2023 and 2022, respectively, and $33.1 million and $26.6 million during the nine months ended September 30, 2023 and 2022, respectively, in the Company’s condensed consolidated statements of operations. As of September 30, 2023 and December 31, 2022, respectively, the Company had Advanced billings from LIB of $10.6 million and $7.4 million in the condensed consolidated balance sheets. In addition, as of September 30, 2023 and December 31, 2022, respectively, the Company had Accounts receivable and unbilled, net from LIB of $0.7 million and $5.5 million in the condensed consolidated balance sheets. The Company had Other current liabilities with LIB of $12.5 million in the condensed consolidated balance sheets at December 31, 2022.

CinRX Pharma, subsidiaries and affiliates (“CinRx”)

Certain executives and employees of the Company, including the chief executive officer, are members of CinRx’s board of managers and/or have equity investments in CinRx, a biotech company. The Company and CinRx have entered into several task orders for the Company to perform clinical trial related services. The Company recognized total revenue from CinRx of $5.3 million and $0.5 million during the three months ended September 30, 2023 and 2022, respectively, and $11.4 million and $13.8 million during the nine months ended September 30, 2023 and 2022, respectively, in the Company’s condensed consolidated statements of operations. As of September 30, 2023 and December 31, 2022, respectively, the Company had Advanced billings from CinRx of $2.8 million and $1.4 million in the condensed consolidated balance sheets. As of September 30, 2023 and December 31, 2022 the Company had Accounts receivable and unbilled, net from CinRx of $1.5 million and $2.2 million, respectively, in the condensed consolidated balance sheets. Certain affiliates of CinRx included in previous reported quarters are no longer disclosed due to changes in the affiliate relationships.

The Summit Hotel (“The Summit”)

The Summit Hotel, located on the Medpace campus, is owned by the chief executive officer, and managed by an unrelated hospitality management entity. Medpace incurs travel lodging and meeting expenses at The Summit. Medpace incurred expenses of $0.1 million during the three months ended September 30, 2023 and 2022, respectively, and $0.3 million and $0.2 million during the nine months ended September 30, 2023 and 2022 at The Summit, respectively.

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Leased Real Estate

Campus Headquarters Leases

The Company entered into an operating lease for the occupancy of office space in a building in Cincinnati, Ohio with an entity that is wholly owned by the chief executive officer of the Company. The Company has evaluated its relationship with the related party and concluded that the related party is not a variable interest entity because the Company has no direct ownership interest or relationship other than the lease. The lease was renewed in the first quarter of fiscal year 2023 for a term of ten years through December 2032 with a renewal option for one 10-year term at prevailing market rates. The Company pays rent, taxes, insurance, and maintenance expenses that arise from the use of the property. Annual base rent for its corporate headquarters allows for adjustments to the rental rate annually for increases in the consumer price index. The Company has determined that the lease is an operating lease. Operating lease cost recognized for the three months ended September 30, 2023 and 2022 was $0.7 million and $0.6 million and $2.0 million and $1.7 million for the nine months ended September 30, 2023 and 2022, respectively. The operating lease cost was allocated between Total direct costs and Selling, general and administrative in the condensed consolidated statements of operations. The Operating lease right-of-use assets at September 30, 2023 and December 31, 2022 were $19.8 million and $18.2 million, respectively, in the condensed consolidated balance sheets. The current and long-term portions of the lease liabilities at September 30, 2023 were $1.4 million and $18.5 million, respectively, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets. The current and long-term portions of the lease liabilities at December 31, 2022 were $1.5 million and $16.7 million, respectively, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.

In 2018, Medpace, Inc. entered into a multi-year lease agreement governing future occupancy of additional office space in Cincinnati, Ohio with an entity that is wholly owned by the Company’s chief executive officer and certain members of his immediate family. The Company began to occupy the premises in the second quarter of fiscal year 2020. The lease expires in 2040 and the Company has two 10-year options to extend the term of the lease. The Company pays rent, taxes, insurance, and maintenance expenses that arise from the use of the property. Annual base rent for the corporate headquarters allows for adjustments to the rental rate annually for increases in the consumer price index. The Company has determined that the lease is an operating lease. Operating lease cost recognized for the three months ended September 30, 2023 and 2022 was $1.5 million and $4.3 million for the nine months ended September 30, 2023 and 2022. The operating lease cost was allocated between Total direct costs and Selling, general and administrative in the condensed consolidated statements of operations. The Operating lease right-of-use assets at September 30, 2023 and December 31, 2022 were $52.3 million and $53.5 million, respectively, in the condensed consolidated balance sheets. The current and long-term portions of the lease liabilities at September 30, 2023 were $1.2 million and $63.9 million, respectively, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets. The current and long-term portions of the lease liabilities at December 31, 2022 were $1.1 million and $64.8 million, respectively and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.

The Company entered into two multi-year lease agreements governing the occupancy of space of two buildings in Cincinnati, Ohio with an entity that is wholly owned by the Company’s chief executive officer and certain members of his immediate family. The Company assumed occupancy in 2012 and the leases expire in 2027 with the Company having one 10-year option to extend the lease term. The Company pays rent, taxes, insurance, and maintenance expenses that arise from the use of the property. Annual base rent for the corporate headquarters allows for adjustments to the rental rate annually for increases in the consumer price index. The Company has determined that the leases are operating leases. Operating lease cost recognized for the three months ended September 30, 2023 and 2022 was $0.9 million and $2.7 million for the nine months ended September 30, 2023 and 2022. The operating lease cost was allocated between Total direct costs and Selling, general and administrative in the condensed consolidated statements of operations. The Operating lease right-of-use assets at September 30, 2023 and December 31, 2022 were $12.6 million and $14.6 million, respectively, in the condensed consolidated balance sheets. The current and long-term portions of the lease liabilities at September 30, 2023 were $2.9 million and $9.7 million, respectively, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets. The current and long-term portions of the lease liabilities at December 31, 2022 were $2.8 million and $11.9 million, respectively, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.

Travel Services

The Company incurs expenses for travel services for company executives provided by private aviation charter companies which is a company controlled by the chief executive officer of the Company (each a “private aviation charter”). The Company may contract directly with the private aviation charter for the use of its aircraft or indirectly through a third party

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aircraft management and jet charter company (the “Aircraft Management Company”). The travel services provided are primarily for business purposes, with certain personal travel paid for as part of the executives’ compensation arrangements. The Aircraft Management Company also makes the private aviation charter aircraft available to third parties. The Company incurred travel expenses of $0.7 million and $0.6 million during the three months ended September 30, 2023 and 2022, respectively, and $1.5 million and $1.6 million during the nine months ended September 30, 2023 and 2022, respectively, related to these travel services. These travel expenses are recorded in Selling, general and administrative in the Company’s condensed consolidated statements of operations. As of September 30, 2023 and December 31, 2022, the Company had Accounts payable to the Aircraft Management Company of $0.3 million, respectively, in the condensed consolidated balance sheets.

(13) Entity Wide Disclosures

Revenue by Category

The following table disaggregates our revenue by major source (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Therapeutic Area
Oncology	$	149,326	$	122,834	$	438,366	$	343,589
Other	106,160		72,767		294,319		216,739
Metabolic	103,118		63,478		277,818		167,194
Cardiology	44,360		49,802		142,107		129,225
Central Nervous System	43,989		43,418		120,412		120,811
AVAI	45,546		31,445		114,419		88,340
Total revenue	$	492,499	$	383,744	$	1,387,441	$	1,065,898

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q, with our audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and with the information under the heading “Management Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. This item and the related discussion contain forward-looking statements reflecting current expectations that involve risks and uncertainties. Actual results and the timing of events may differ materially from those indicated in such forward-looking statements. Important factors that may cause such differences include, but are not limited to, those discussed under the “Forward-Looking Statements” below and “Risk Factors” in “Item 1A Risk Factors” of Part I of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical facts contained herein, are forward looking statements. Forward looking statements include, without limitation, statements regarding our results of operations; financial position and performance; liquidity and our ability to fund our business operations and initiatives; capital expenditure and debt service obligations; business strategies, plans and goals, including those related to marketing, acquisitions and expansion of our business; product approvals and plans; industry trends; general economic conditions, including inflation and other pricing pressures that could decrease our operating margins; expectations regarding consumer behaviors and trends; our culture and operating philosophy; human resource management; arrangements with and delivery of our services to the customers; conversion of backlog; dividend policy; legal proceedings; and our objectives for future operations. The words “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” “will,” “would,” “target,” “likely,” and similar expressions are intended to identify forward-looking statements. Forward-looking statements are based largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to inherent uncertainties, risks, changes in circumstances and other important factors that are difficult to predict. Moreover, we operate in a very competitive and rapidly changing environment in which new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all important factors on our business or the extent to which any factor, or combination of such factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed may not occur and our financial condition and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. We caution you therefore against relying on these forward-looking statements.

We qualify all of our forward-looking statements by these cautionary statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise. For a further discussion of the risks relating to our business, see “Item 1A Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and “Part II – Other Information, Item 1A Risk Factors” herein.

Business Overview

We are one of the world’s leading clinical contract research organizations, or CROs, by revenue, solely focused on providing scientifically-driven outsourced clinical development services to the biotechnology, pharmaceutical and medical device industries. Our mission is to accelerate the global development of safe and effective medical therapeutics. We differentiate ourselves from our competitors by our disciplined operating model centered on providing full-service Phase I-IV clinical development services and our therapeutic expertise. We believe this combination results in timely and cost-effective delivery of clinical development services for our customers. We believe that we are a partner of choice for small- and mid-sized biopharmaceutical companies based on our ability to consistently utilize our full-service, disciplined operating model to deliver timely and high-quality results for our customers.

We focus on conducting clinical trials across all major therapeutic areas, with particular strength in Oncology, Metabolic Disease, Cardiology, Central Nervous System, or CNS, and Antiviral and Anti-infective, or AVAI. Our global platform includes approximately 5,800 employees across 41 countries as of September 30, 2023, providing our customers with broad access to diverse markets and patient populations as well as local regulatory expertise and market knowledge.

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How We Generate Revenue

We earn fees through the performance of services detailed in our customer contracts. Contract scope and pricing is typically based on either a fixed-fee or unit-of-service model, with consideration of activities performed by third parties, as well as ancillary costs necessary to deliver on the contract scope that are reimbursable by our customers. Our contracts can range in duration from a few months to several years. These contracts are individually priced and negotiated based on the anticipated project scope, including the complexity of the project and the performance risks inherent in the project. The majority of our contracts are structured with an upfront fee that is collected at the time of contract signing, and the balance of the fee is collected over the duration of the contract either through an arranged billing schedule or upon completion of certain performance targets or defined milestones.

Revenue, which is distinct from billing and cash receipt, is recognized based on the satisfaction of the individual performance obligations identified in each contract. Substantially all of our customer contracts consist of a single performance obligation, as the promise to transfer the individual services defined in the contracts are not separately identifiable from other promises in the contract, and therefore not distinct. Our performance obligations are generally satisfied over time and recognized as services are performed. The progression of our contract performance obligations are measured primarily utilizing the input method of cost to cost. Cancellation provisions in our contracts allow our customers to terminate a contract either immediately or according to advance notice terms specified within the applicable contract, which is typically 30 days. Contract cancellation may occur for various reasons, including, but not limited to, adverse patient reactions, lack of efficacy, or inadequate patient enrollment. Upon cancellation, we are entitled to fees for services rendered through the date of termination, including payment for subsequent services necessary to conclude the study or close out the contract. These fees are typically discussed and agreed upon with the customer and are realized as revenue when we believe the amount can be estimated reliably and its realization is probable. Changes in revenue from period to period are driven primarily by new business volume and task order execution activity, project cancellations, and the mix of active studies during a given period that can vary based on therapeutic area and or study life cycle stage.

Costs and Expenses

Our costs and expenses are comprised primarily of our total direct costs, selling, general and administrative costs, depreciation and amortization and income taxes.

Total Direct Costs

Total direct costs are primarily driven by labor and related employee benefits, but also include contracted third party service related expenses, fees paid to site investigators, reimbursed out of pocket expenses, laboratory supplies and other expenses contributing to service delivery. The other costs of service delivery can include office rent, utilities, supplies and software licenses which are allocated between Total direct costs and selling, general and administrative expenses based on the estimated contribution among service delivery and support function efforts on a percentage basis. Total direct costs are expensed as incurred and are not deferred in anticipation of contracts being awarded or finalization of changes in scope. Total direct costs, as a percentage of net revenue, can vary from period to period due to project labor efficiencies, changes in workforce, compensation/bonus programs and service mix.

Selling, General and Administrative

Selling, general and administrative expenses are primarily driven by compensation and related employee benefits, as well as rent, utilities, supplies, software licenses, professional fees (e.g., legal and accounting expenses), bad debt expense, travel, marketing and other operating expenses.

Depreciation

Depreciation is provided on our property and equipment on the straight-line method at rates adequate to allocate the cost of the applicable assets over their estimated useful lives, which is three to five years for computer hardware, software, phone, and medical imaging equipment, five to seven years for furniture and fixtures and other equipment, and thirty to forty years for buildings. Leasehold improvements are amortized on a straight-line basis over the shorter of the estimated useful life of the improvement or the associated remaining lease term.

Amortization

Amortization relates to finite-lived intangible assets recognized as expense using the straight-line method or using an accelerated method over their estimated useful lives of 15 years.

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Income Tax Provision

Income tax provision consists of federal, state and local taxes on income in multiple jurisdictions. Our income tax is impacted by the pre-tax earnings in jurisdictions with varying tax rates and any related tax credits that may be available to us. Our current and future provision for income taxes will vary from statutory rates due to the impact of valuation allowances in certain countries, income tax incentives, certain non-deductible expenses, and other discrete items.

Key Performance Metrics

To evaluate the performance of our business, we utilize a variety of financial and performance metrics. These key measures include new business awards, cancellations and backlog.

New Business Awards, Cancellations and Backlog

New business awards represent the value of anticipated future net revenue that has been awarded during the period that is recognized in backlog. This value is recognized upon the signing of a contract or receipt of a written pre-contract confirmation from a customer that confirms an agreement in principle on budget and scope. New business awards also include contract amendments, or changes in scope, where the customer has provided written authorization for changes in budget and scope or has approved us to perform additional work as of the measurement date. Awards may not be recognized as backlog after consideration of a number of factors, including whether (i) the relevant net revenue is expected only after a pending regulatory hurdle, which might result in cancellation of the study, (ii) the customer funding needed for commencement of the study is not believed to have been secured or (iii) study timelines are uncertain or not well defined. In addition, study amounts that extend beyond a three-year timeline are not included in backlog. The number and amount of new business awards can vary significantly from period to period, and an award’s contractual duration can range from several months to several years based on customer and project specifications.

Cancellations arise in the normal course of business and are reflected when we receive written confirmation from the customer to cease work on a contractual agreement. The majority of our customers can terminate our contracts without cause upon 30 days’ notice. Similar to new business awards, the number and amount of cancellations can vary significantly period over period due to timing of customer correspondence and study-specific circumstances.

Net new business awards represent gross new business awards received in a period offset by total cancellations in that period. Net new business awards were $611.5 million and $1,742.1 million for the three and nine months ended September 30, 2023, respectively. Net new business awards were $470.9 million and $1,344.4 million for the three and nine months ended September 30, 2022, respectively.

Backlog represents anticipated future net revenue from net new business awards that have not commenced or are currently in process but not complete. Reported backlog will fluctuate based on new business awards, changes in the scope of existing contracts, cancellations, revenue recognition on existing contracts and foreign exchange adjustments from non-U.S. dollar denominated backlog. As of September 30, 2023, our backlog increased by $453.3 million, or 20.3%, to $2,689.5 million compared to $2,236.2 million as of September 30, 2022. Included within backlog as of September 30, 2023 was approximately $1,450.0 million to $1,470.0 million that we expect to convert to net revenue over the next twelve months, with the remainder expected to convert to net revenue thereafter.

The effect of foreign currency adjustments on backlog was as follows: favorable foreign currency adjustments of $1.3 million for the three months ended September 30, 2023; favorable foreign currency adjustments of $5.3 million for the nine months ended September 30, 2023; unfavorable foreign currency adjustments of $17.4 million for the three months ended September 30, 2022; and unfavorable foreign currency adjustments of $33.2 million for the nine months ended September 30, 2022.

Backlog and net new business award metrics may not be reliable indicators of our future period revenue as they are subject to a variety of factors that may cause material fluctuations from period to period. These factors include, but are not limited to, changes in the scope of projects, cancellations, and duration and timing of services provided.

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Exchange Rate Fluctuations

The majority of our contracts and operational transactions are U.S. dollar denominated. The Euro represents the largest foreign currency denomination of our contractual and operational exposure. As a result, a portion of our revenue and expenses are subject to exchange rate fluctuations. We have translated the Euro into U.S. dollars using the following average exchange rates based on data obtained from www.xe.com:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2023	2022	2023	2022
U.S. Dollars per Euro:	1.09	1.01	1.08	1.07

Results of Operations

Three Months Ended September 30, 2023 compared to Three Months Ended September 30, 2022


	Three Months Ended September 30,
(Amounts in thousands, except percentages)	2023		2022		Change		% Change
Revenue, net	$	492,499	$	383,744	$	108,755	28.3	%
Direct service costs, excluding depreciation and amortization	164,364		136,648		27,716		20.3	%
Reimbursed out-of-pocket expenses	194,942		128,062		66,880		52.2	%
Total direct costs	359,306		264,710		94,596		35.7	%
Selling, general and administrative	41,407		35,418		5,989		16.9	%
Depreciation	6,329		4,951		1,378		27.8	%
Amortization	549		838		(289)		(34.5)	%
Total operating expenses	407,591		305,917		101,674		33.2	%
Income from operations	84,908		77,827		7,081
Miscellaneous (expense) income, net	(1,602)		5,649		(7,251)
Interest expense, net	(105)		(1,584)		1,479
Income before income taxes	83,201		81,892		1,309
Income tax provision	12,651		15,865		(3,214)
Net income	$	70,550	$	66,027	$	4,523

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Nine Months Ended September 30, 2023 compared to Nine Months Ended September 30, 2022


	Nine Months Ended September 30,
(Amounts in thousands, except percentages)	2023		2022		Change		% Change
Revenue, net	$	1,387,441	$	1,065,898	$	321,543	30.2	%
Direct service costs, excluding depreciation and amortization	473,958		394,200		79,758		20.2	%
Reimbursed out-of-pocket expenses	525,784		354,991		170,793		48.1	%
Total direct costs	999,742		749,191		250,551		33.4	%
Selling, general and administrative	118,838		97,999		20,839		21.3	%
Depreciation	17,707		13,928		3,779		27.1	%
Amortization	1,649		2,514		(865)		(34.4)	%
Total operating expenses	1,137,936		863,632		274,304		31.8	%
Income from operations	249,505		202,266		47,239
Miscellaneous (expense) income, net	(2,198)		9,027		(11,225)
Interest expense, net	(2,332)		(2,078)		(254)
Income before income taxes	244,975		209,215		35,760
Income tax provision	40,463		32,517		7,946
Net income	$	204,512	$	176,698	$	27,814

Total revenue

Total revenue increased by $108.8 million to $492.5 million for the three months ended September 30, 2023, from $383.7 million for the three months ended September 30, 2022. Total revenue increased by $321.5 million to $1,387.4 million for the nine months ended September 30, 2023, from $1,065.9 million for the nine months ended September 30, 2022. The increase for the three and nine months ended September 30, 2023 was primarily driven by growth within the Oncology, Metabolic, AVAI and other therapeutic areas, compared to the same period in the prior year.

Total direct costs

Total direct costs increased by $94.6 million, to $359.3 million for the three months ended September 30, 2023 from $264.7 million for the three months ended September 30, 2022. Total direct costs increased by $250.6 million, to $999.7 million for the nine months ended September 30, 2023 from $749.2 million for the nine months ended September 30, 2022. The increase was primarily attributed to higher reimbursed out-of-pocket expenses and higher personnel costs to support the growth in service activities. Reimbursed out-of-pocket expenses, which can fluctuate significantly from period to period based on the timing of program initiation and closeout, increased $66.9 million and $170.8 million for the three and nine months ended September 30, 2023, compared to the same period in the prior year. The higher personnel costs portion increased by $24.1 million and $65.0 million for the three and nine months ended September 30, 2023, compared to the same periods in the prior year.

Selling, general and administrative

Selling, general and administrative expenses increased by $6.0 million, to $41.4 million for the three months ended September 30, 2023 from $35.4 million for the three months ended September 30, 2022. Selling, general and administrative expenses increased by $20.8 million, to $118.8 million for the nine months ended September 30, 2023 from $98.0 million for the nine months ended September 30, 2022. The increase was primarily attributed to higher personnel costs to support the growth in service activities. The higher personnel costs portion increased by $5.2 million and $14.7 million for the three and nine months ended September 30, 2023, compared to the same periods in the prior year.

Depreciation and Amortization

Depreciation and amortization expense increased by $1.1 million, to $6.9 million for the three months ended September 30, 2023 from $5.8 million for the three months ended September 30, 2022. Depreciation and amortization expense increased by $2.9 million, to $19.4 million for the nine months ended September 30, 2023 from $16.4 million for the nine months ended September 30, 2022. The increase was primarily related to increased depreciation related to Property and equipment, net, compared to the same periods in the prior year.

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Miscellaneous (expense) income, net

Miscellaneous (expense) income, net changed by $7.3 million to $1.6 million of expense for the three months ended September 30, 2023 from $5.6 million of income for the three months ended September 30, 2022. Miscellaneous (expense) income, net changed by $11.2 million to $2.2 million of expense for the nine months ended September 30, 2023 from $9.0 million of income for the nine months ended September 30, 2022. These changes were mainly attributable to foreign exchange gains and losses that arise in connection with the revaluation of short-term intercompany balances between our domestic and international subsidiaries and from the settlement of third-party accounts receivables and payables denominated in a currency other than the local currency of the entity making the payment and third-party investment losses.

Income tax provision

Income tax provision decreased by $3.2 million, to $12.7 million for the three months ended September 30, 2023 from $15.9 million for the three months ended September 30, 2022. Income tax provision increased by $7.9 million, to $40.5 million for the nine months ended September 30, 2023 from $32.5 million for the nine months ended September 30, 2022. The overall effective tax rate for the three months ended September 30, 2023 was 15.2%, compared to an overall effective tax rate of 19.4% for the three months ended September 30, 2022. The overall effective tax rate for the nine months ended September 30, 2023 was 16.5% compared to an overall effective tax rate of 15.5% for the nine months ended September 30, 2022. The decrease in the income tax provision and overall effective tax rate for the three months ended September 30, 2023 was primarily attributable to an increase in excess tax benefits recognized from share-based compensation and tax benefits related to Foreign Derived Intangible Income (“FDII”) compared to the same period in the prior year. The increase in the income tax provision and overall effective tax rate for the nine months ended September 30, 2023 was primarily attributable to an increase in pre-tax book income and a decrease in benefits from uncertain tax positions compared to the same period in the prior year.

Liquidity and Capital Resources

We assess our liquidity in terms of our ability to generate cash to fund our operating, investing and financing activities. Our principal sources of liquidity are operating cash flows and from borrowings under our unsecured credit facility consisting of up to a $150.0 million revolving line of credit which we entered into on September 30, 2019 (the “Credit Facility”), and has subsequently been amended. As of September 30, 2023, we had cash and cash equivalents of $95.2 million which increased from $28.3 million as of December 31, 2022. Approximately $20.4 million of cash and cash equivalents, none of which was restricted, was held by our foreign subsidiaries as of September 30, 2023.

As of September 30, 2023, we had $150.0 million available for borrowing under the Credit Facility. Our expected primary cash needs on both a short and long-term basis are for investment in operational growth, capital expenditures, credit facility repayments, share repurchases, selective strategic bolt-on acquisitions, other investments, and other general corporate needs. We have historically funded our operations and growth with cash flow from operations and borrowings under our credit facilities. We expect to continue expanding our operations through organic growth and potentially highly selective bolt-on acquisitions and investments. As of September 30, 2023, cash commitments to support operating business needs include lease liabilities discussed in Note 8 of the Condensed Consolidated Financial Statements, purchase commitments discussed in Note 11 of the Condensed Consolidated Financial Statements and capital expenditures primarily related to infrastructure investments in our facilities, equipment and technology. Capital spending as a percentage of revenue decreased by 67 basis points to 1.92% in the nine months ended September 30, 2023, compared to the same period in the prior year. We expect these activities will be funded from existing cash, cash flow from operations and, if necessary, borrowings under our existing or future credit facilities or other debt. We have deemed that foreign earnings will be indefinitely reinvested and therefore we have not provided taxes on these earnings. While we do not anticipate the need to repatriate these foreign earnings for liquidity purposes given our cash flows from operations and borrowings under existing and future credit facilities, we would incur taxes on these earnings if the need for repatriation due to liquidity purposes arises.

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	Nine Months Ended September 30,
Cash Flows (Amounts in thousands)	2023		2022
Net cash provided by operating activities	$	276,979	$	251,366
Net cash used in investing activities	(26,632)		(29,522)
Net cash used in financing activities	(184,165)		(644,654)
Effect of exchange rates on cash, cash equivalents and restricted cash	760		(7,487)
Increase (decrease) in cash, cash equivalents and restricted cash	$	66,942	$	(430,297)

Cash Flow from Operating Activities

Cash flows from operations are driven mainly by net income, depreciation, stock based compensation expense, noncash lease expense, and net movement in advanced billings, accrued expenses and accounts receivable and unbilled, net. Accounts receivable and unbilled, net and advanced billings fluctuate on a regular basis as we perform our services, bill our customers and ultimately collect on those receivables. We attempt to negotiate payment terms in order to provide for payments prior to or soon after the provision of services, but this timing of collection can vary significantly on a period by period comparative basis.

Net cash flows provided by operating activities was $277.0 million for the nine months ended September 30, 2023 beginning with net income of $204.5 million. Adjustments to reconcile net income to net cash provided by operating activities were $38.8 million, primarily related to depreciation of $17.7 million, stock based compensation expense of $15.4 million and noncash lease expense of $14.6 million. Changes in operating assets and liabilities provided $33.7 million in operating cash flows and was primarily driven by increased advanced billings of $56.0 million and increased accrued expenses of $54.9 million, offset by increased accounts receivable and unbilled, net of $39.3 million, decreased lease liabilities of $14.4 million and a change other assets and liabilities, net of $13.7 million.

Net cash flows provided by operating activities was $251.4 million for the nine months ended September 30, 2022 beginning with net income of $176.7 million. Adjustments to reconcile net income to net cash provided by operating activities were $43.2 million, primarily related to stock based compensation expense of $15.8 million, depreciation of $13.9 million and noncash lease expense of $13.5 million. Changes in operating assets and liabilities provided $31.4 million in operating cash flows and was primarily driven by increased advanced billings of $73.3 million and increased accrued expenses of $47.8 million, offset by increased accounts receivable and unbilled, net of $62.4 million and increased prepaid expenses and other current assets of $17.4 million.

Cash Flow from Investing Activities

Net cash used in investing activities was $26.6 million for the nine months ended September 30, 2023 primarily consisting of property and equipment expenditures.

Net cash used in investing activities was $29.5 million for the nine months ended September 30, 2022 primarily consisting of $27.6 million in property and equipment expenditures.

Cash Flow from Financing Activities

Net cash used in financing activities was $184.2 million for the nine months ended September 30, 2023 primarily related to $144.0 million in repurchases of common stock and $155.0 million in repayments of the Credit Facility, partially offset by $105.0 million in proceeds related to the Credit Facility and $9.9 million in proceeds from stock option exercises.

Net cash used in financing activities was $644.7 million for the nine months ended September 30, 2022 primarily related to $800.7 million in repurchases of common stock and $159.5 million in repayments of the Credit Facility, partially offset by $299.2 million in proceeds related to the Credit Facility and $16.3 million in proceeds from stock option exercises.

Share Repurchases

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Indebtedness

As of September 30, 2023, we have no indebtedness and less than $0.1 million in letters of credit outstanding related to certain operating lease obligations, which are secured by the Credit Facility. Refer to Note 7 of the Notes to Condensed Consolidated Financial Statements for details regarding our Credit Facility.

Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with generally accepted accounting principles in the United States of America, or U.S. GAAP, requires us to make a variety of decisions which affect reported amounts and related disclosures, including the selection of appropriate accounting principles and the assumptions on which to base accounting estimates. In reaching such decisions, we apply judgment based on our understanding and analysis of the relevant circumstances, including our historical experience and other assumptions. Actual results could differ from our estimates. We are committed to incorporating accounting principles, assumptions and estimates that promote the representational faithfulness, verifiability, neutrality and transparency of the accounting information included in the financial statements.

There have been no significant changes in the critical accounting policies and estimates as previously described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to our quantitative and qualitative disclosures about market risk as compared to the quantitative and qualitative disclosures about market risk described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

Item 4. Controls and Procedures

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the Chief Executive Officer (the Principal Executive Officer) and Chief Financial Officer (the Principal Financial Officer), has evaluated the effectiveness of the Company’s disclosure controls and procedures, as defined in Rules 13(a)-15(e) and 15(d) -15(e) of the Securities Exchange Act of 1934 (“Exchange Act”), as of the end of the period covered by this report. Based on this evaluation, we concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective in providing reasonable assurance that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s forms and rules, and the material information relating to the Company is accumulated and communicated to management, including the President and Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

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Control systems, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that control objectives are met. Because of inherent limitations in all control systems, no evaluation of controls can provide assurance that all control issues and instances of fraud, if any, within a company will be detected. Additionally, controls can be circumvented by individuals, by collusion of two or more people or by management override. Over time, controls can become inadequate because of changes in conditions or the degree of compliance may deteriorate. Further, the design of any system of controls is based in part upon assumptions about the likelihood of future events. There can be no assurance that any design will succeed in achieving its stated goals under all future conditions. Because of the inherent limitations in any cost-effective control system, misstatements due to errors or fraud may occur and not be detected.

Changes in Internal Control over Financial Reporting

In the ordinary course of business, we routinely enhance our information systems by either upgrading current systems or implementing new ones. There were no changes in our internal control over financial reporting that occurred during the three months ended September 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

We are party to legal proceedings incidental to our business. While the outcome of these matters could differ from management’s expectations, we do not believe that the resolution of these matters is reasonably likely to have a material adverse effect to our financial statements.

Item 1A. Risk Factors

For a discussion of our potential risks and uncertainties, see the information under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. There have been no significant changes from the risk factors previously disclosed in our Annual Report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Use of Proceeds from Registered Securities

Not applicable.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

During the three months ended September 30, 2023, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K, except as described in the table below:

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Action

Date

Trading Arrangement

Total Shares to be Purchased or Sold

Duration/Expiration Date

Rule 10b5-1*

Non-Rule 10b5-1**

Stephen P. Ewald, General Counsel and Corporate Secretary

Adopt

Post-market close on

July 26, 2023 [1]

Up to 21,850 shares to be sold

The earlier of until cancelled or 180 days from the placement of the limit order

Kevin M. Brady, Chief Financial Officer and Treasurer

Adopt

July 31, 2023 [2]

Up to 7,000 shares to be sold

The earlier of until cancelled or 180 days from the placement of the limit order

Medpace Investors, LLC [3]

Terminate [4]

September 21, 2023

Up to 500,000 shares to be sold

September 14, 2024

* Intended to satisfy the affirmative defense of Rule 10b5-1(c).

** Not intended to satisfy the affirmative defense of Rule 10b5-1(c).

[1] Post-market close on July 26, 2023, Mr. Ewald placed a limit order to sell up to 21,850 shares issued to him pursuant to his contemporaneous exercise of stock options.

[2] On July 31, 2023, Mr. Brady placed a limit order to sell up to 7,000 shares issued to him pursuant to his contemporaneous exercise of stock options.

[3] August J. Troendle, Chief Executive Officer and Chairman of the Board of the Company, is the sole manager and controlling unit holder of Medpace Investors, LLC (“MPI”) and has sole voting and investment control with respect to the securities held by MPI. Mr. Troendle may be deemed to indirectly beneficially own the securities of the Company held by MPI but disclaims beneficial ownership of such securities except to the extent of his pecuniary interest therein.

[4] Trading arrangement was originally adopted on May 1, 2023.

Item 6. Exhibits

The exhibits in the accompanying Exhibit Index preceding the signature page are filed or furnished as a part of this report and are incorporated herein by reference.

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EXHIBIT INDEX

Incorporated by Reference

Exhibit
Number

Exhibit Description

Form

File No.

Exhibit

Filing

Date

Filed/
Furnished
Herewith

31.1

Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer

31.2

Rule 13a-14(a) / 15d-14(a) Certification of Chief Financial Officer

32.1

Section 1350 Certification of Chief Executive Officer

32.2

Section 1350 Certification of Chief Financial Officer

101.INS

Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*Filed herewith.

**Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


			MEDPACE HOLDINGS, INC.

			/s/ Kevin M. Brady
			Kevin M. Brady
			Chief Financial Officer (Principal Financial Officer)

Date: October 24, 2023

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Exhibit 31.1

I, August J. Troendle, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Medpace Holdings, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 24, 2023


			/s/ August J. Troendle
			August J. Troendle
			Chief Executive Officer and Chairman of the Board of Directors
			(Principal Executive Officer)

Exhibit 31.2

I, Kevin M. Brady, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Medpace Holdings, Inc.;

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 24, 2023


			/s/ Kevin M. Brady
			Kevin M. Brady
			Chief Financial Officer
			(Principal Financial Officer)

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Medpace Holdings, Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2023 filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

•The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

•The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein.

Date: October 24, 2023


			By:			/s/ August J. Troendle
						August J. Troendle
						Chief Executive Officer and Chairman of the Board of Directors
						(Principal Executive Officer)

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

•The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

•The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein.

Date: October 24, 2023


			By:			/s/ Kevin M. Brady
						Kevin M. Brady
						Chief Financial Officer
						(Principal Financial Officer)

Cover Page - shares	9 Months Ended
Cover Page - shares	Sep. 30, 2023	Oct. 20, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Document Transition Report	false
Entity File Number	001-37856
Entity Registrant Name	Medpace Holdings, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	32-0434904
Entity Address, Address Line One	5375 Medpace Way
Entity Address, City or Town	Cincinnati
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	45227
City Area Code	513
Local Phone Number	579-9911
Title of 12(b) Security	Common Stock $0.01 par value
Trading Symbol	MEDP
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		30,683,436
Entity Central Index Key	0001668397
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Amendment Flag	false

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 95,207	$ 28,265
Accounts receivable and unbilled, net (includes $2.2 million and $7.7 million with related parties at September 30, 2023 and December 31, 2022, respectively)	292,773	253,404
Prepaid expenses and other current assets	60,901	52,293
Total current assets	448,881	333,962
Property and equipment, net	114,764	109,849
Operating lease right-of-use assets	144,147	139,068
Goodwill	662,396	662,396
Intangible assets, net	36,359	38,008
Deferred income taxes	59,343	48,083
Other assets	20,831	21,129
Total assets	1,486,721	1,352,495
Current liabilities:
Accounts payable (includes $3.1 million and $0.3 million with related parties at September 30, 2023 and December 31, 2022, respectively)	29,023	33,069
Accrued expenses	264,785	210,125
Advanced billings (includes $13.4 million and $8.8 million with related parties at September 30, 2023 and December 31, 2022, respectively)	518,755	462,729
Short-term debt	0	50,000
Other current liabilities (includes $12.5 million with related parties at December 31, 2022)	35,955	47,547
Total current liabilities	848,518	803,470
Operating lease liabilities	143,039	138,867
Deferred income tax liability	1,128	1,070
Other long-term liabilities	23,124	22,701
Total liabilities	1,015,809	966,108
Commitments and contingencies (see Note 11)
Shareholders’ equity:
Preferred stock - $0.01 par-value; 5,000,000 shares authorized; no shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively	0	0
Common stock - $0.01 par-value; 250,000,000 shares authorized at September 30, 2023 and December 31, 2022, respectively; 30,682,157 and 31,091,694 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively	307	309
Treasury stock - 70,573 and 71,573 shares at September 30, 2023 and December 31, 2022, respectively	(12,322)	(12,497)
Additional paid-in capital	795,994	770,794
Accumulated deficit	(300,197)	(359,827)
Accumulated other comprehensive loss	(12,870)	(12,392)
Total shareholders’ equity	470,912	386,387
Total liabilities and shareholders’ equity	$ 1,486,721	$ 1,352,495

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)(Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Accounts receivable and unbilled, net	$ 292,773	$ 253,404
Accounts payable	29,023	33,069
Advanced billings	518,755	462,729
Other current liabilities	$ 35,955	$ 47,547
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock shares authorized (in shares)	5,000,000	5,000,000
Preferred stock shares issued (in shares)	0	0
Preferred stock shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock shares authorized (in shares)	250,000,000	250,000,000
Common stock shares issued (in shares)	30,682,157	31,091,694
Common stock shares outstanding (in shares)	30,682,157	31,091,694
Treasury stock (in shares)	70,573	71,573
Related Party
Accounts receivable and unbilled, net	$ 2,200	$ 7,700
Accounts payable	3,100	300
Advanced billings	$ 13,400	8,800
Other current liabilities		$ 12,500

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenue, net (includes $15.5 million and $9.8 million with related parties for the three months ended September 30, 2023 and 2022, respectively, and $44.6 million and $40.3 million with related parties for the nine months ended September 30, 2023 and 2022, respectively)	$ 492,499	$ 383,744	$ 1,387,441	$ 1,065,898
Operating expenses:
Total direct costs	359,306	264,710	999,742	749,191
Selling, general and administrative	41,407	35,418	118,838	97,999
Depreciation	6,329	4,951	17,707	13,928
Amortization	549	838	1,649	2,514
Total operating expenses	407,591	305,917	1,137,936	863,632
Income from operations	84,908	77,827	249,505	202,266
Other (expense) income, net:
Miscellaneous (expense) income, net	(1,602)	5,649	(2,198)	9,027
Interest expense, net	(105)	(1,584)	(2,332)	(2,078)
Total other (expense) income, net	(1,707)	4,065	(4,530)	6,949
Income before income taxes	83,201	81,892	244,975	209,215
Income tax provision	12,651	15,865	40,463	32,517
Net income	$ 70,550	$ 66,027	$ 204,512	$ 176,698
Net income per share attributable to common shareholders:
Earnings per share, basic (in dollars per share)	$ 2.30	$ 2.13	$ 6.65	$ 5.39
Earnings per share, diluted (in dollars per share)	$ 2.22	$ 2.05	$ 6.42	$ 5.18
Weighted average common shares outstanding:
Weighted average number of shares outstanding, basic (in shares)	30,629	31,009	30,723	32,791
Weighted average number of shares outstanding, diluted (in shares)	31,762	32,253	31,839	34,098
Total revenue
Revenue, net (includes $15.5 million and $9.8 million with related parties for the three months ended September 30, 2023 and 2022, respectively, and $44.6 million and $40.3 million with related parties for the nine months ended September 30, 2023 and 2022, respectively)	$ 492,499	$ 383,744	$ 1,387,441	$ 1,065,898
Direct Costs
Operating expenses:
Total direct costs	164,364	136,648	473,958	394,200
Reimbursable Out of Pocket Costs
Operating expenses:
Total direct costs	$ 194,942	$ 128,062	$ 525,784	$ 354,991

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Total revenue	$ 492,499	$ 383,744	$ 1,387,441	$ 1,065,898
Related Party
Total revenue	$ 15,500	$ 9,800	$ 44,600	$ 40,300

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Statement of Comprehensive Income [Abstract]
Net income	$ 70,550	$ 66,027	$ 204,512	$ 176,698
Other comprehensive income
Foreign currency translation adjustments, net of taxes	(1,676)	(6,080)	(478)	(11,206)
Comprehensive income	$ 68,874	$ 59,947	$ 204,034	$ 165,492

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands	Total	Common Stock	Treasury Stock	Additional Paid-In Capital	(Accumulated Deficit) Retained Earnings	Accumulated Other Comprehensive Loss
Balance, beginning of period at Dec. 31, 2021	$ 952,928	$ 360	$ (5,427)	$ 727,857	$ 234,984	$ (4,846)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	61,311				61,311
Foreign currency translation	(1,542)					(1,542)
Stock-based compensation expense	4,372			4,372
Stock options exercised	13,897	3		13,894
Repurchases of common stock	(425,950)	(27)	(14,243)		(411,680)
Retirement of treasury stock	0		5,427		(5,427)
Balance, end of period at Mar. 31, 2022	605,016	336	(14,243)	746,123	(120,812)	(6,388)
Balance, beginning of period at Dec. 31, 2021	952,928	360	(5,427)	727,857	234,984	(4,846)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	176,698
Foreign currency translation	(11,206)
Balance, end of period at Sep. 30, 2022	349,885	309	(14,243)	759,986	(380,115)	(16,052)
Balance, beginning of period at Mar. 31, 2022	605,016	336	(14,243)	746,123	(120,812)	(6,388)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	49,360				49,360
Foreign currency translation	(3,584)					(3,584)
Stock-based compensation expense	5,653			5,653
Stock options exercised	1,524			1,524
Repurchases of common stock	(374,717)	(27)			(374,690)
Balance, end of period at Jun. 30, 2022	283,252	309	(14,243)	753,300	(446,142)	(9,972)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	66,027				66,027
Foreign currency translation	(6,080)					(6,080)
Stock-based compensation expense	5,794			5,794
Stock options exercised	892			892
Balance, end of period at Sep. 30, 2022	349,885	309	(14,243)	759,986	(380,115)	(16,052)
Balance, beginning of period at Dec. 31, 2022	386,387	309	(12,497)	770,794	(359,827)	(12,392)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	72,894				72,894
Foreign currency translation	1,078					1,078
Stock-based compensation expense	5,438			5,438
Stock options exercised	2,463	4		2,459
Repurchases of common stock	(120,998)	(7)			(120,991)
Re-issuance of treasury stock	0		175		(175)
Balance, end of period at Mar. 31, 2023	347,262	306	(12,322)	778,691	(408,099)	(11,314)
Balance, beginning of period at Dec. 31, 2022	386,387	309	(12,497)	770,794	(359,827)	(12,392)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	204,512
Foreign currency translation	(478)
Balance, end of period at Sep. 30, 2023	470,912	307	(12,322)	795,994	(300,197)	(12,870)
Balance, beginning of period at Mar. 31, 2023	347,262	306	(12,322)	778,691	(408,099)	(11,314)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	61,068				61,068
Foreign currency translation	120					120
Stock-based compensation expense	4,906			4,906
Stock options exercised	1,696	1		1,695
Repurchases of common stock	(23,992)	(1)			(23,991)
Balance, end of period at Jun. 30, 2023	391,060	306	(12,322)	785,292	(371,022)	(11,194)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	70,550				70,550
Foreign currency translation	(1,676)					(1,676)
Stock-based compensation expense	5,007			5,007
Stock options exercised	5,696	1		5,695
Repurchases of common stock	275				275
Balance, end of period at Sep. 30, 2023	$ 470,912	$ 307	$ (12,322)	$ 795,994	$ (300,197)	$ (12,870)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 204,512	$ 176,698
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	17,707	13,928
Amortization	1,649	2,514
Stock-based compensation expense	15,351	15,819
Noncash lease expense	14,579	13,460
Deferred income tax benefit	(11,308)	(2,126)
Other	821	(350)
Changes in assets and liabilities:
Accounts receivable and unbilled, net	(39,314)	(62,438)
Prepaid expenses and other current assets	(8,954)	(17,397)
Accounts payable	(921)	770
Accrued expenses	54,923	47,848
Advanced billings	56,026	73,286
Lease liabilities	(14,433)	(11,134)
Other assets and liabilities, net	(13,659)	488
Net cash provided by operating activities	276,979	251,366
CASH FLOWS FROM INVESTING ACTIVITIES:
Property and equipment expenditures	(26,662)	(27,636)
Other	30	(1,886)
Net cash used in investing activities	(26,632)	(29,522)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from stock option exercises	9,855	16,313
Repurchases of common stock	(144,020)	(800,667)
Proceeds from revolving loan	105,000	299,200
Payments on revolving loan	(155,000)	(159,500)
Net cash used in financing activities	(184,165)	(644,654)
EFFECT OF EXCHANGE RATES ON CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	760	(7,487)
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	66,942	(430,297)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — Beginning of period	28,265	461,304
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — End of period	95,207	31,007
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION —
Acquisition of property and equipment—non-cash	$ 4,704	$ 9,094

Basis of Presentation	9 Months Ended
Basis of Presentation	Sep. 30, 2023
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation Description of Business Medpace Holdings, Inc. (together with its subsidiaries, “Medpace” or the “Company”), a Delaware corporation, is a global provider of clinical research-based drug and medical device development services. The Company partners with pharmaceutical, biotechnology, and medical device companies in the development and execution of clinical trials. The Company’s drug development services focus on full service Phase I-IV clinical development services and include development plan design, project management, regulatory affairs, clinical monitoring, data management and analysis, pharmacovigilance new drug application submissions, post-marketing clinical support, laboratory services, clinical human pharmacology, imaging services, and electrocardiography reading support for clinical trials. The Company’s operations are principally based in North America, Europe, and Asia. Unaudited Interim Financial Information The interim condensed consolidated financial statements include the accounts of the Company, are prepared in conformity with U.S. generally accepted accounting principles (“GAAP”), and are unaudited. In the opinion of the Company’s management, all adjustments of a normal recurring nature necessary for a fair presentation have been reflected. Certain financial information that is normally included in annual financial statements prepared in accordance with GAAP, but that is not required for interim reporting purposes, has been omitted. The preparation of the interim condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results and outcomes could differ from management’s estimates and assumptions. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Share Repurchases In 2018, the Board of Directors approved a stock repurchase program which has been amended several times to increase the aggregate amount of the stock repurchase authorization. During the nine months ended September 30, 2022, the Company repurchased 5,463,244 shares for $800.5 million. In the fourth quarter of 2022, the Board approved a new stock repurchase program of up to $500.0 million. The Company did not execute any share repurchases during the three months ended September 30, 2023. During the nine months ended September 30, 2023, the Company repurchased 781,068 shares for $144.0 million. As of September 30, 2023, we have remaining authorization of $308.8 million under the new repurchase program. Repurchases under the share repurchase program are executed in the open market or negotiated transactions under trading plans put in place pursuant to Rule 10b5-1. The Company constructively retired the repurchased shares associated with these approved share repurchases, except for a small portion which were retained as Treasury Shares on the condensed consolidated statements of shareholders' equity. Retired share repurchase amounts paid in excess of par value are reflected within Accumulated deficit/Retained earnings in the Company’s condensed consolidated balance sheets.

Net Income Per Share

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Net Income Per Share

Net Income Per ShareBasic and diluted earnings or loss per share (“EPS”) are computed using the two-class method, which is an earnings allocation that determines EPS for each class of common stock and participating securities according to dividends declared and participation rights in undistributed earnings. The Company’s Restricted Stock Awards (“RSA”) are considered participating securities because they are legally issued at the date of grant and holders are entitled to receive non-forfeitable dividends during the vesting term.

The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2023 and 2022 (in thousands, except for earnings per share):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Weighted-average shares:
Common shares outstanding	30,629		31,009		30,723		32,791
RSAs	21		21		21		21
Total weighted-average shares	30,650		31,030		30,744		32,812
Earnings per common share—Basic
Net income	$	70,550	$	66,027	$	204,512	$	176,698
Less: Undistributed earnings allocated to RSAs	(48)		(44)		(138)		(112)
Net income available to common shareholders—Basic	$	70,502	$	65,983	$	204,374	$	176,586

Net income per common share—Basic	$	2.30	$	2.13	$	6.65	$	5.39

Basic weighted-average common shares outstanding	30,629		31,009		30,723		32,791
Effect of diluted shares	1,133		1,244		1,116		1,307
Diluted weighted-average shares outstanding	31,762		32,253		31,839		34,098

Net income per common share—Diluted	$	2.22	$	2.05	$	6.42	$	5.18

Fair Value Measurements	9 Months Ended
Fair Value Measurements	Sep. 30, 2023
Fair Value Disclosures [Abstract]
Fair Value Measurements	Fair Value Measurements The Company follows accounting guidance related to fair value measurements that defines fair value, establishes a framework for measuring fair value, and establishes a hierarchy for inputs used in measuring fair value. This hierarchy maximizes the use of “observable” inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The hierarchy specifies three levels based on the inputs, as follows: Level 1: Valuations based on quoted prices in active markets for identical assets or liabilities. Level 2: Valuations based on directly observable inputs or unobservable inputs corroborated by market data. Level 3: Valuations based on unobservable inputs supported by little or no market activity representing management’s determination of assumptions of how market participants would price the assets or liabilities. The fair value of financial instruments such as cash and cash equivalents, accounts receivable and unbilled, net, accounts payable, accrued expenses and advanced billings approximate their carrying amounts due to their short term maturities. The Company does not have material recurring fair value measurements as of September 30, 2023. There were no material transfers between Level 1, Level 2 or Level 3 during the three and nine months ended September 30, 2023 or September 30, 2022.

Contract Assets and Contract Liabilities

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

Contract Assets and Contract Liabilities

Contract assets and liabilities are reflected in the Company’s condensed consolidated balance sheets within the accounts reflected below.

Contract Assets

Accounts receivable and unbilled, net consisted of the following (in thousands):


	As of
	September 30, 2023		December 31, 2022
Accounts receivable	$	257,294	$	213,169
Unbilled receivables	35,486		40,405
Less: allowance for doubtful accounts	(7)		(170)
Total accounts receivable and unbilled, net	$	292,773	$	253,404

Contract Liabilities

Advanced billings represent cash received from customers, or billed amounts per an agreed upon payment schedule, in advance of services being performed or revenue being recognized.

Advanced billings consisted of the following (in thousands):


	As of
	September 30, 2023		December 31, 2022
Advanced billings	$	518,755	$	462,729

As of September 30, 2023, we had approximately $2.8 billion of performance obligations remaining to be performed for active projects.

Intangible Assets, Net

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets, Net

Intangible assets, net consisted of the following (in thousands):


	As of
	September 30, 2023		December 31, 2022
Intangible assets:
Finite-lived intangible assets:
Carrying amount:
Customer relationships	145,051		145,051
Accumulated amortization:
Customer relationships	(140,338)		(138,689)
Total finite-lived intangible assets, net	4,713		6,362
Trade name (indefinite-lived)	31,646		31,646
Total intangible assets, net	$	36,359	$	38,008

As of September 30, 2023, estimated amortization expense of the Company’s intangible assets for each of the next five years and thereafter is as follows (in thousands):


	Amortization
Remainder of 2023	$	550
2024	1,443
2025	946
2026	620
2027	577
2028	577
	$	4,713

Accrued Expenses

9 Months Ended

Sep. 30, 2023

Payables and Accruals [Abstract]

Accrued Expenses

Accrued expenses consisted of the following (in thousands):


	As of
	September 30, 2023		December 31, 2022
Employee compensation and benefits	$	69,509	$	71,197
Project related reimbursable expenses	183,998		128,416
Other	11,278		10,512
Total accrued expenses	$	264,785	$	210,125

Short-Term Debt

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Short-Term Debt

Short-term Debt

Short-term debt consisted of the following (in thousands):


	As of
	September 30, 2023		December 31, 2022
Credit facility	$	—	$	50,000
Short-term debt	$	—	$	50,000

As of September 30, 2023, there were less than $0.1 million in letters of credit outstanding related to certain operating lease obligations, which are secured by the Credit Facility.

Leases

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Leases

The components of lease expense were as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Operating lease cost	$	7,002	$	6,482	$	20,637	$	19,357
Variable lease cost	2,372		2,240		6,544		6,353

Supplemental cash flow information related to the leases was as follows (in thousands):


	Nine Months Ended September 30,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	14,883	$	12,045

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	20,412		29,915

Supplemental balance sheet information related to the leases was as follows (in thousands):


	As of
	September 30, 2023			December 31, 2022
Operating lease right-of-use assets - related parties	$	84,592		$	86,356
Operating lease right-of-use assets - non-related parties	59,555			52,712
Operating lease right-of-use assets	$	144,147		$	139,068

Other current liabilities - related parties	5,592			5,409
Other current liabilities - non-related parties	14,686			13,863
Other current liabilities	$	20,278		$	19,272

Operating lease liabilities - related parties	92,049			93,393
Operating lease liabilities - non-related parties	50,990			45,474
Operating lease liabilities	143,039			138,867
Total operating lease liabilities	$	163,317		$	158,139

Weighted Average Remaining Lease Term (years)
Operating leases	10.3			11.1
Weighted Average Discount Rate
Operating leases	5.4		%	5.2		%

Lease payments due related to lease liabilities as of September 30, 2023 were as follows (in thousands):


	Related Party Operating Leases		Non-Related Parties Operating Leases		Total Operating Leases
Remainder of 2023	$	2,827	$	4,157	$	6,984
2024	11,412		16,333		27,745
2025	11,607		15,110		26,717
2026	11,807		12,878		24,685
2027	10,839		9,843		20,682
Later years	100,278		14,449		114,727
Total lease payments	148,770		72,770		221,540
Less: imputed interest	(51,129)		(7,094)		(58,223)
Total	$	97,641	$	65,676	$	163,317

As of September 30, 2023, we have several additional leases with contractual obligations, which have not yet commenced, with future payments of $4.6 million.

Shareholder's Equity and Stock-Based Compensation

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Shareholder's Equity and Stock-Based Compensation

Shareholder’s Equity and Stock-Based CompensationThe Company granted 38,188 awards to employees under the 2016 Incentive Award Plan during the nine months ended September 30, 2023, consisting of 36,938 RSU and 1,250 stock option awards having four year vesting schedules. The Company granted an additional 11,187 stock option awards to non-employee directors under the 2016 Incentive Award Plan, during the nine months ended September 30, 2023. These awards are scheduled to vest on the earlier of (a) the day immediately preceding the date of the first annual meeting following the date of grant and (b) the first anniversary of the date of grant, subject to the non-employee director continuing in service through the applicable vesting date.

Award Activity

The following table sets forth the Company’s stock option activity:


	Nine Months Ended September 30, 2023
	Stock Options	Weighted Average Exercise Price
Outstanding - beginning of period	1,629,148	$	89.71
Granted	12,437	$	211.25
Exercised	(238,492)	$	41.32
Cancelled/Forfeited/Expired	(9,750)	$	186.77
Outstanding - end of period	1,393,343	$	98.39

Exercisable - end of period	950,421	$	72.58

The following table sets forth the Company’s RSA/RSU activity:


			Nine Months Ended September 30, 2023
			Shares/Units
Outstanding and unvested - beginning of period			523,377
Granted			36,938
Vested			(133,039)
Forfeited			(20,809)
Outstanding and unvested - end of period			406,467

Cumulative vested shares - end of period			2,362,955

Stock-based compensation expense recognized in the condensed consolidated statements of operations related to all outstanding stock based compensation awards is summarized below (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Total direct costs	$	2,745	$	3,179	$	8,243	$	8,744
Selling, general and administrative	2,262		2,615		7,108		7,075
Total stock-based compensation expense	$	5,007	$	5,794	$	15,351	$	15,819

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 2023
Income Tax Disclosure [Abstract]
Income Taxes	Income TaxesThe Company’s effective income tax rate was 15.2% and 19.4% for the three months ended September 30, 2023 and 2022, respectively. The Company's effective income tax rate was 16.5% and 15.5% for the nine months ended September 30, 2023 and 2022, respectively. The Company’s effective income tax rate for the three months ended September 30, 2023 and the nine months ended September 30, 2023 varied from the U.S. statutory rate of 21% primarily due to the impact of the state taxes, which was favorably offset by excess tax benefits recognized from share-based compensation and tax benefits related to Foreign Derived Intangible Income (FDII).

Commitments and Contingencies	9 Months Ended
Commitments and Contingencies	Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Legal Proceedings The Company is involved in legal proceedings from time to time in the ordinary course of its business, including employment claims and claims related to other business transactions. The Company cannot predict with certainty the outcome of such proceedings, but it believes that adequate reserves have been recorded and losses already recognized with respect to such proceedings, which were immaterial as of September 30, 2023 and December 31, 2022. There is a reasonable possibility that a loss exceeding amounts already recognized may be incurred related to these actions; however, the Company believes that such potential losses were immaterial as of September 30, 2023. Purchase Commitments The Company has several minimum purchase commitments for project related supplies totaling $16.9 million as of September 30, 2023. In return for the commitment, Medpace receives preferential pricing. The commitments expire at various times through 2029.

Related Party Transactions	9 Months Ended
Related Party Transactions	Sep. 30, 2023
Related Party Transactions [Abstract]
Related Party Transactions	Related Party Transactions Employee Loans The Company periodically extends short term loans or advances to employees, typically upon commencement of employment. Total receivables as a result of these employee advances of $0.3 million existed at September 30, 2023 and December 31, 2022, respectively, and are included in the Prepaid expenses and other current assets and Other assets line items of the condensed consolidated balance sheets, respectively, depending on the contractual repayment date. Service Agreement LIB Therapeutics LLC and subsidiaries (“LIB”) Certain executives and employees of the Company, including the chief executive officer, are members of LIB’s board of managers. The Company entered into a MSA dated November 24, 2015 with LIB, a company that engages in research, development, marketing and commercialization of pharmaceutical drugs. Subsequently, the Company and LIB have entered into several task orders for the Company to perform clinical trial related services. The Company recognized total revenue from LIB of $10.1 million and $9.5 million during the three months ended September 30, 2023 and 2022, respectively, and $33.1 million and $26.6 million during the nine months ended September 30, 2023 and 2022, respectively, in the Company’s condensed consolidated statements of operations. As of September 30, 2023 and December 31, 2022, respectively, the Company had Advanced billings from LIB of $10.6 million and $7.4 million in the condensed consolidated balance sheets. In addition, as of September 30, 2023 and December 31, 2022, respectively, the Company had Accounts receivable and unbilled, net from LIB of $0.7 million and $5.5 million in the condensed consolidated balance sheets. The Company had Other current liabilities with LIB of $12.5 million in the condensed consolidated balance sheets at December 31, 2022. CinRX Pharma, subsidiaries and affiliates (“CinRx”) Certain executives and employees of the Company, including the chief executive officer, are members of CinRx’s board of managers and/or have equity investments in CinRx, a biotech company. The Company and CinRx have entered into several task orders for the Company to perform clinical trial related services. The Company recognized total revenue from CinRx of $5.3 million and $0.5 million during the three months ended September 30, 2023 and 2022, respectively, and $11.4 million and $13.8 million during the nine months ended September 30, 2023 and 2022, respectively, in the Company’s condensed consolidated statements of operations. As of September 30, 2023 and December 31, 2022, respectively, the Company had Advanced billings from CinRx of $2.8 million and $1.4 million in the condensed consolidated balance sheets. As of September 30, 2023 and December 31, 2022 the Company had Accounts receivable and unbilled, net from CinRx of $1.5 million and $2.2 million, respectively, in the condensed consolidated balance sheets. Certain affiliates of CinRx included in previous reported quarters are no longer disclosed due to changes in the affiliate relationships. The Summit Hotel (“The Summit”) The Summit Hotel, located on the Medpace campus, is owned by the chief executive officer, and managed by an unrelated hospitality management entity. Medpace incurs travel lodging and meeting expenses at The Summit. Medpace incurred expenses of $0.1 million during the three months ended September 30, 2023 and 2022, respectively, and $0.3 million and $0.2 million during the nine months ended September 30, 2023 and 2022 at The Summit, respectively. Leased Real Estate Campus Headquarters Leases The Company entered into an operating lease for the occupancy of office space in a building in Cincinnati, Ohio with an entity that is wholly owned by the chief executive officer of the Company. The Company has evaluated its relationship with the related party and concluded that the related party is not a variable interest entity because the Company has no direct ownership interest or relationship other than the lease. The lease was renewed in the first quarter of fiscal year 2023 for a term of ten years through December 2032 with a renewal option for one 10-year term at prevailing market rates. The Company pays rent, taxes, insurance, and maintenance expenses that arise from the use of the property. Annual base rent for its corporate headquarters allows for adjustments to the rental rate annually for increases in the consumer price index. The Company has determined that the lease is an operating lease. Operating lease cost recognized for the three months ended September 30, 2023 and 2022 was $0.7 million and $0.6 million and $2.0 million and $1.7 million for the nine months ended September 30, 2023 and 2022, respectively. The operating lease cost was allocated between Total direct costs and Selling, general and administrative in the condensed consolidated statements of operations. The Operating lease right-of-use assets at September 30, 2023 and December 31, 2022 were $19.8 million and $18.2 million, respectively, in the condensed consolidated balance sheets. The current and long-term portions of the lease liabilities at September 30, 2023 were $1.4 million and $18.5 million, respectively, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets. The current and long-term portions of the lease liabilities at December 31, 2022 were $1.5 million and $16.7 million, respectively, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets. In 2018, Medpace, Inc. entered into a multi-year lease agreement governing future occupancy of additional office space in Cincinnati, Ohio with an entity that is wholly owned by the Company’s chief executive officer and certain members of his immediate family. The Company began to occupy the premises in the second quarter of fiscal year 2020. The lease expires in 2040 and the Company has two 10-year options to extend the term of the lease. The Company pays rent, taxes, insurance, and maintenance expenses that arise from the use of the property. Annual base rent for the corporate headquarters allows for adjustments to the rental rate annually for increases in the consumer price index. The Company has determined that the lease is an operating lease. Operating lease cost recognized for the three months ended September 30, 2023 and 2022 was $1.5 million and $4.3 million for the nine months ended September 30, 2023 and 2022. The operating lease cost was allocated between Total direct costs and Selling, general and administrative in the condensed consolidated statements of operations. The Operating lease right-of-use assets at September 30, 2023 and December 31, 2022 were $52.3 million and $53.5 million, respectively, in the condensed consolidated balance sheets. The current and long-term portions of the lease liabilities at September 30, 2023 were $1.2 million and $63.9 million, respectively, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets. The current and long-term portions of the lease liabilities at December 31, 2022 were $1.1 million and $64.8 million, respectively and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets. The Company entered into two multi-year lease agreements governing the occupancy of space of two buildings in Cincinnati, Ohio with an entity that is wholly owned by the Company’s chief executive officer and certain members of his immediate family. The Company assumed occupancy in 2012 and the leases expire in 2027 with the Company having one 10-year option to extend the lease term. The Company pays rent, taxes, insurance, and maintenance expenses that arise from the use of the property. Annual base rent for the corporate headquarters allows for adjustments to the rental rate annually for increases in the consumer price index. The Company has determined that the leases are operating leases. Operating lease cost recognized for the three months ended September 30, 2023 and 2022 was $0.9 million and $2.7 million for the nine months ended September 30, 2023 and 2022. The operating lease cost was allocated between Total direct costs and Selling, general and administrative in the condensed consolidated statements of operations. The Operating lease right-of-use assets at September 30, 2023 and December 31, 2022 were $12.6 million and $14.6 million, respectively, in the condensed consolidated balance sheets. The current and long-term portions of the lease liabilities at September 30, 2023 were $2.9 million and $9.7 million, respectively, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets. The current and long-term portions of the lease liabilities at December 31, 2022 were $2.8 million and $11.9 million, respectively, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets. Travel Services The Company incurs expenses for travel services for company executives provided by private aviation charter companies which is a company controlled by the chief executive officer of the Company (each a “private aviation charter”). The Company may contract directly with the private aviation charter for the use of its aircraft or indirectly through a third party aircraft management and jet charter company (the “Aircraft Management Company”). The travel services provided are primarily for business purposes, with certain personal travel paid for as part of the executives’ compensation arrangements. The Aircraft Management Company also makes the private aviation charter aircraft available to third parties. The Company incurred travel expenses of $0.7 million and $0.6 million during the three months ended September 30, 2023 and 2022, respectively, and $1.5 million and $1.6 million during the nine months ended September 30, 2023 and 2022, respectively, related to these travel services. These travel expenses are recorded in Selling, general and administrative in the Company’s condensed consolidated statements of operations. As of September 30, 2023 and December 31, 2022, the Company had Accounts payable to the Aircraft Management Company of $0.3 million, respectively, in the condensed consolidated balance sheets.

Entity Wide Disclosures

9 Months Ended

Sep. 30, 2023

Entity Wide Disclosures [Abstract]

Entity Wide Disclosures

Revenue by Category

The following table disaggregates our revenue by major source (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Therapeutic Area
Oncology	$	149,326	$	122,834	$	438,366	$	343,589
Other	106,160		72,767		294,319		216,739
Metabolic	103,118		63,478		277,818		167,194
Cardiology	44,360		49,802		142,107		129,225
Central Nervous System	43,989		43,418		120,412		120,811
AVAI	45,546		31,445		114,419		88,340
Total revenue	$	492,499	$	383,744	$	1,387,441	$	1,065,898

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2023	Sep. 30, 2022
Pay vs Performance Disclosure
Net income	$ 70,550	$ 61,068	$ 72,894	$ 66,027	$ 49,360	$ 61,311	$ 204,512	$ 176,698

Insider Trading Arrangements

3 Months Ended

9 Months Ended

Sep. 30, 2023

Trading Arrangements, by Individual

Material Terms of Trading Arrangement

Action

Date

Trading Arrangement

Total Shares to be Purchased or Sold

Duration/Expiration Date

Rule 10b5-1*

Non-Rule 10b5-1**

Stephen P. Ewald, General Counsel and Corporate Secretary

Adopt

Post-market close on

July 26, 2023 [1]

Up to 21,850 shares to be sold

The earlier of until cancelled or 180 days from the placement of the limit order

Kevin M. Brady, Chief Financial Officer and Treasurer

Adopt

July 31, 2023 [2]

Up to 7,000 shares to be sold

The earlier of until cancelled or 180 days from the placement of the limit order

Medpace Investors, LLC [3]

Terminate [4]

September 21, 2023

Up to 500,000 shares to be sold

September 14, 2024

* Intended to satisfy the affirmative defense of Rule 10b5-1(c).

** Not intended to satisfy the affirmative defense of Rule 10b5-1(c).

[1] Post-market close on July 26, 2023, Mr. Ewald placed a limit order to sell up to 21,850 shares issued to him pursuant to his contemporaneous exercise of stock options.

[2] On July 31, 2023, Mr. Brady placed a limit order to sell up to 7,000 shares issued to him pursuant to his contemporaneous exercise of stock options.

[4] Trading arrangement was originally adopted on May 1, 2023.

Rule 10b5-1 Arrangement Adopted

false

Non-Rule 10b5-1 Arrangement Terminated

false

Stephen P. Ewald [Member]

Trading Arrangements, by Individual

Name

Stephen P. Ewald

Title

General Counsel and Corporate Secretary

Non-Rule 10b5-1 Arrangement Adopted

true

Adoption Date

July 26, 2023

Arrangement Duration

180 days

Aggregate Available

21,850

Kevin M. Brady [Member]

Trading Arrangements, by Individual

Name

Kevin M. Brady

Title

Chief Financial Officer and Treasurer

Non-Rule 10b5-1 Arrangement Adopted

true

Adoption Date

July 31, 2023

Arrangement Duration

180 days

Aggregate Available

7,000

August J. Troendle [Member]

Trading Arrangements, by Individual

Name

August J. Troendle

Title

Chief Executive Officer and Chairman of the Board of the Company

Adoption Date

May 1, 2023

Rule 10b5-1 Arrangement Terminated

true

Termination Date

September 21, 2023

Aggregate Available

500,000

Basis of Presentation (Policies)	9 Months Ended
Basis of Presentation (Policies)	Sep. 30, 2023
Accounting Policies [Abstract]
Unaudited Interim Financial Information	Unaudited Interim Financial InformationThe interim condensed consolidated financial statements include the accounts of the Company, are prepared in conformity with U.S. generally accepted accounting principles (“GAAP”), and are unaudited. In the opinion of the Company’s management, all adjustments of a normal recurring nature necessary for a fair presentation have been reflected. Certain financial information that is normally included in annual financial statements prepared in accordance with GAAP, but that is not required for interim reporting purposes, has been omitted. The preparation of the interim condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results and outcomes could differ from management’s estimates and assumptions. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
Share Repurchases	Repurchases under the share repurchase program are executed in the open market or negotiated transactions under trading plans put in place pursuant to Rule 10b5-1. The Company constructively retired the repurchased shares associated with these approved share repurchases, except for a small portion which were retained as Treasury Shares on the condensed consolidated statements of shareholders' equity. Retired share repurchase amounts paid in excess of par value are reflected within Accumulated deficit/Retained earnings in the Company’s condensed consolidated balance sheets.

Net Income Per Share (Tables)

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Schedule of Reconciliation of Denominators and Additional Shares That Are Excluded From the Calculation of EPS

The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2023 and 2022 (in thousands, except for earnings per share):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Weighted-average shares:
Common shares outstanding	30,629		31,009		30,723		32,791
RSAs	21		21		21		21
Total weighted-average shares	30,650		31,030		30,744		32,812
Earnings per common share—Basic
Net income	$	70,550	$	66,027	$	204,512	$	176,698
Less: Undistributed earnings allocated to RSAs	(48)		(44)		(138)		(112)
Net income available to common shareholders—Basic	$	70,502	$	65,983	$	204,374	$	176,586

Net income per common share—Basic	$	2.30	$	2.13	$	6.65	$	5.39

Basic weighted-average common shares outstanding	30,629		31,009		30,723		32,791
Effect of diluted shares	1,133		1,244		1,116		1,307
Diluted weighted-average shares outstanding	31,762		32,253		31,839		34,098

Net income per common share—Diluted	$	2.22	$	2.05	$	6.42	$	5.18

Contract Assets and Contract Liabilities (Tables)

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

Summary of Company's Contract Asset and Contract Liability

Accounts receivable and unbilled, net consisted of the following (in thousands):


	As of
	September 30, 2023		December 31, 2022
Accounts receivable	$	257,294	$	213,169
Unbilled receivables	35,486		40,405
Less: allowance for doubtful accounts	(7)		(170)
Total accounts receivable and unbilled, net	$	292,773	$	253,404

Advanced billings consisted of the following (in thousands):


	As of
	September 30, 2023		December 31, 2022
Advanced billings	$	518,755	$	462,729

Intangible Assets, Net (Tables)

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets, Net

Intangible assets, net consisted of the following (in thousands):


	As of
	September 30, 2023		December 31, 2022
Intangible assets:
Finite-lived intangible assets:
Carrying amount:
Customer relationships	145,051		145,051
Accumulated amortization:
Customer relationships	(140,338)		(138,689)
Total finite-lived intangible assets, net	4,713		6,362
Trade name (indefinite-lived)	31,646		31,646
Total intangible assets, net	$	36,359	$	38,008

Schedule of Estimated Amortization Expense of Intangible Assets

As of September 30, 2023, estimated amortization expense of the Company’s intangible assets for each of the next five years and thereafter is as follows (in thousands):


	Amortization
Remainder of 2023	$	550
2024	1,443
2025	946
2026	620
2027	577
2028	577
	$	4,713

Accrued Expenses (Tables)

9 Months Ended

Sep. 30, 2023

Payables and Accruals [Abstract]

Schedule of Accrued Expenses

Accrued expenses consisted of the following (in thousands):


	As of
	September 30, 2023		December 31, 2022
Employee compensation and benefits	$	69,509	$	71,197
Project related reimbursable expenses	183,998		128,416
Other	11,278		10,512
Total accrued expenses	$	264,785	$	210,125

Short-Term Debt (Tables)

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Schedule of Debt

Short-term debt consisted of the following (in thousands):


	As of
	September 30, 2023		December 31, 2022
Credit facility	$	—	$	50,000
Short-term debt	$	—	$	50,000

Leases (Tables)

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Summary of Components of Lease Expense

The components of lease expense were as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Operating lease cost	$	7,002	$	6,482	$	20,637	$	19,357
Variable lease cost	2,372		2,240		6,544		6,353

Summary of Supplemental Cash Flow Information Related to Leases

Supplemental cash flow information related to the leases was as follows (in thousands):


	Nine Months Ended September 30,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	14,883	$	12,045

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	20,412		29,915

Summary of Supplemental Balance Sheet Information Related to Leases

Supplemental balance sheet information related to the leases was as follows (in thousands):


	As of
	September 30, 2023			December 31, 2022
Operating lease right-of-use assets - related parties	$	84,592		$	86,356
Operating lease right-of-use assets - non-related parties	59,555			52,712
Operating lease right-of-use assets	$	144,147		$	139,068

Other current liabilities - related parties	5,592			5,409
Other current liabilities - non-related parties	14,686			13,863
Other current liabilities	$	20,278		$	19,272

Operating lease liabilities - related parties	92,049			93,393
Operating lease liabilities - non-related parties	50,990			45,474
Operating lease liabilities	143,039			138,867
Total operating lease liabilities	$	163,317		$	158,139

Weighted Average Remaining Lease Term (years)
Operating leases	10.3			11.1
Weighted Average Discount Rate
Operating leases	5.4		%	5.2		%

Schedule of Lease Payments Due Related To Lease Liabilities

Lease payments due related to lease liabilities as of September 30, 2023 were as follows (in thousands):


	Related Party Operating Leases		Non-Related Parties Operating Leases		Total Operating Leases
Remainder of 2023	$	2,827	$	4,157	$	6,984
2024	11,412		16,333		27,745
2025	11,607		15,110		26,717
2026	11,807		12,878		24,685
2027	10,839		9,843		20,682
Later years	100,278		14,449		114,727
Total lease payments	148,770		72,770		221,540
Less: imputed interest	(51,129)		(7,094)		(58,223)
Total	$	97,641	$	65,676	$	163,317

Shareholder's Equity and Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Share-Based Payment Arrangement, Activity

The following table sets forth the Company’s stock option activity:


	Nine Months Ended September 30, 2023
	Stock Options	Weighted Average Exercise Price
Outstanding - beginning of period	1,629,148	$	89.71
Granted	12,437	$	211.25
Exercised	(238,492)	$	41.32
Cancelled/Forfeited/Expired	(9,750)	$	186.77
Outstanding - end of period	1,393,343	$	98.39

Exercisable - end of period	950,421	$	72.58

Schedule of RSA/RSU Activity

The following table sets forth the Company’s RSA/RSU activity:


			Nine Months Ended September 30, 2023
			Shares/Units
Outstanding and unvested - beginning of period			523,377
Granted			36,938
Vested			(133,039)
Forfeited			(20,809)
Outstanding and unvested - end of period			406,467

Cumulative vested shares - end of period			2,362,955

Summary of Stock-Based Compensation Expense Recognized in Statements of Operations Related to All Outstanding Stock Based Compensation Awards

Stock-based compensation expense recognized in the condensed consolidated statements of operations related to all outstanding stock based compensation awards is summarized below (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Total direct costs	$	2,745	$	3,179	$	8,243	$	8,744
Selling, general and administrative	2,262		2,615		7,108		7,075
Total stock-based compensation expense	$	5,007	$	5,794	$	15,351	$	15,819

Entity Wide Disclosures (Tables)

9 Months Ended

Sep. 30, 2023

Entity Wide Disclosures [Abstract]

Disaggregation of Revenue by Major Source

The following table disaggregates our revenue by major source (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Therapeutic Area
Oncology	$	149,326	$	122,834	$	438,366	$	343,589
Other	106,160		72,767		294,319		216,739
Metabolic	103,118		63,478		277,818		167,194
Cardiology	44,360		49,802		142,107		129,225
Central Nervous System	43,989		43,418		120,412		120,811
AVAI	45,546		31,445		114,419		88,340
Total revenue	$	492,499	$	383,744	$	1,387,441	$	1,065,898

Basis of Presentation - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Basis Of Presentation [Line Items]
Repurchases of shares, value		$ 144,020	$ 800,667
Share Repurchase Program
Basis Of Presentation [Line Items]
Stock repurchased, including number of shares for re-issuance (in shares)			5,463,244
Repurchases of shares, value			$ 800,500
2022 Share Repurchase Program
Basis Of Presentation [Line Items]
Number of shares repurchased and retired (in shares)	0	781,068
Repurchases of shares, value		$ 144,000
2022 Share Repurchase Program \| Maximum
Basis Of Presentation [Line Items]
Stock repurchase program, authorized amount				$ 500,000
Stock repurchase program, remaining amount	$ 308,800	$ 308,800

Net Income Per Share - Schedule of Reconciliation of Denominators and Additional Shares that are Excluded from the Calculation of EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2023	Sep. 30, 2022
Weighted-average shares:
Basic weighted-average common shares outstanding (in shares)	30,629			31,009			30,723	32,791
Weighted average number of common and restricted shares outstanding basic (in shares)	30,650			31,030			30,744	32,812
Earnings per common share—Basic
Net income	$ 70,550	$ 61,068	$ 72,894	$ 66,027	$ 49,360	$ 61,311	$ 204,512	$ 176,698
Net income available to common shareholders—Basic	$ 70,502			$ 65,983			$ 204,374	$ 176,586
Net income per common share, basic (in dollars per share)	$ 2.30			$ 2.13			$ 6.65	$ 5.39
Basic weighted-average common shares outstanding (in shares)	30,629			31,009			30,723	32,791
Effect of diluted shares (in shares)	1,133			1,244			1,116	1,307
Diluted weighted-average shares outstanding (in shares)	31,762			32,253			31,839	34,098
Net income per common share, diluted (in dollars per share)	$ 2.22			$ 2.05			$ 6.42	$ 5.18
RSAs
Weighted-average shares:
Basic weighted-average common shares outstanding (in shares)	21			21			21	21
Earnings per common share—Basic
Less: Undistributed earnings allocated to RSAs	$ (48)			$ (44)			$ (138)	$ (112)
Basic weighted-average common shares outstanding (in shares)	21			21			21	21
Common Stock
Weighted-average shares:
Basic weighted-average common shares outstanding (in shares)	30,629			31,009			30,723	32,791
Earnings per common share—Basic
Basic weighted-average common shares outstanding (in shares)	30,629			31,009			30,723	32,791

Net Income Per Share - Narrative (Details) - shares	3 Months Ended	9 Months Ended
Net Income Per Share - Narrative (Details) - shares	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Stock Options
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of diluted EPS	274,400	600	274,400

Contract Assets and Contract Liabilities - Summary of Accounts Receivable and Unbilled, Net (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Revenue from Contract with Customer [Abstract]
Accounts receivable	$ 257,294	$ 213,169
Unbilled receivables	35,486	40,405
Less: allowance for doubtful accounts	(7)	(170)
Total accounts receivable and unbilled, net	$ 292,773	$ 253,404

Contract Assets and Contract Liabilities - Summary of Advanced Billings (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Revenue from Contract with Customer [Abstract]
Advanced billings	$ 518,755	$ 462,729

Contract Assets and Contract Liabilities - Narrative (Details) $ in Billions	Sep. 30, 2023 USD ($)
Revenue from Contract with Customer [Abstract]
Performance obligations remaining to be performed	$ 2.8

Intangible Assets, Net - Schedule of Intangible Assets, Net (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Accumulated amortization:
Total finite-lived intangible assets, net	$ 4,713	$ 6,362
Trade name (indefinite-lived)	31,646	31,646
Total intangible assets, net	36,359	38,008
Customer Relationships
Finite-lived intangible assets:
Finite-lived intangible assets, gross	145,051	145,051
Accumulated amortization:
Total accumulated amortization	$ (140,338)	$ (138,689)

Intangible Assets, Net - Schedule of Estimated Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
Remainder of 2023	$ 550
2024	1,443
2025	946
2026	620
2027	577
2028	577
Total finite-lived intangible assets, net	$ 4,713	$ 6,362

Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Employee compensation and benefits	$ 69,509	$ 71,197
Project related reimbursable expenses	183,998	128,416
Other	11,278	10,512
Total accrued expenses	$ 264,785	$ 210,125

Short-Term Debt - Schedule of Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Short-Term Debt [Line Items]
Short-term debt	$ 0	$ 50,000
Credit facility
Short-Term Debt [Line Items]
Short-term debt	$ 0	$ 50,000

Short-Term Debt - Narrative (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2023	Mar. 31, 2023	Mar. 15, 2022	Sep. 30, 2019
Debt Instrument [Line Items]
Outstanding letters of credit (less than)	$ 0.1
Credit facility
Debt Instrument [Line Items]
Aggregate principal amount borrowed under line of credit facility		$ 150.0	$ 250.0
Credit facility \| The Secured Overnight Financing Rate
Debt Instrument [Line Items]
Debt instrument, basis points	1.25%
Credit facility \| Overnight Bank Funding Rate
Debt Instrument [Line Items]
Debt instrument, basis points	0.50%
Credit facility \| Daily Simple SOFR
Debt Instrument [Line Items]
Debt instrument, basis points	1.00%
Maximum \| Credit facility
Debt Instrument [Line Items]
Debt instrument, principal amount				$ 50.0

Leases - Narrative (Details) $ in Millions	9 Months Ended
Leases - Narrative (Details) $ in Millions	Sep. 30, 2023 USD ($)
Lessee Lease Description [Line Items]
Lease not yet commenced, future payments	$ 4.6
Real Estate and Equipment
Lessee Lease Description [Line Items]
Operating lease, options to terminate lease term (less than)	1 year
Minimum \| Real Estate
Lessee Lease Description [Line Items]
Remaining lease term, operating lease	1 year
Maximum \| Real Estate
Lessee Lease Description [Line Items]
Remaining lease term, operating lease	17 years
Maximum \| Real Estate and Equipment
Lessee Lease Description [Line Items]
Lease renewal term, operating lease	20 years

Leases - Summary of Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Leases [Abstract]
Operating lease cost	$ 7,002	$ 6,482	$ 20,637	$ 19,357
Variable lease cost	$ 2,372	$ 2,240	$ 6,544	$ 6,353

Leases - Summary of Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ 14,883	$ 12,045
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$ 20,412	$ 29,915

Leases - Summary of Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Leases, Supplemental Balance Sheet Information [Line Items]
Operating lease right-of-use assets	$ 144,147	$ 139,068
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Other current liabilities (includes $12.5 million with related parties at December 31, 2022)	Other current liabilities (includes $12.5 million with related parties at December 31, 2022)
Other current liabilities	$ 20,278	$ 19,272
Operating lease liabilities	143,039	138,867
Total operating lease liabilities	$ 163,317	$ 158,139
Weighted Average Remaining Lease Term (years)
Operating leases	10 years 3 months 18 days	11 years 1 month 6 days
Weighted Average Discount Rate
Operating leases	5.40%	5.20%
Related Party
Leases, Supplemental Balance Sheet Information [Line Items]
Operating lease right-of-use assets	$ 84,592	$ 86,356
Other current liabilities	5,592	5,409
Operating lease liabilities	92,049	93,393
Total operating lease liabilities	97,641
Nonrelated Party
Leases, Supplemental Balance Sheet Information [Line Items]
Operating lease right-of-use assets	59,555	52,712
Other current liabilities	14,686	13,863
Operating lease liabilities	50,990	$ 45,474
Total operating lease liabilities	$ 65,676

Leases - Schedule of Lease Payments Due Related To Lease Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Operating Lease Liabilities Payments Due [Line Items]
Remainder of 2023	$ 6,984
2024	27,745
2025	26,717
2026	24,685
2027	20,682
Later years	114,727
Total lease payments	221,540
Less: imputed interest	(58,223)
Total	163,317	$ 158,139
Related Party
Operating Lease Liabilities Payments Due [Line Items]
Remainder of 2023	2,827
2024	11,412
2025	11,607
2026	11,807
2027	10,839
Later years	100,278
Total lease payments	148,770
Less: imputed interest	(51,129)
Total	97,641
Nonrelated Party
Operating Lease Liabilities Payments Due [Line Items]
Remainder of 2023	4,157
2024	16,333
2025	15,110
2026	12,878
2027	9,843
Later years	14,449
Total lease payments	72,770
Less: imputed interest	(7,094)
Total	$ 65,676

Shareholder's Equity and Stock-Based Compensation - Narrative (Details)	9 Months Ended
	Sep. 30, 2023 shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options, granted (in shares)	12,437
2016 Incentive Award Plan \| Non Employee Directors
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options, granted (in shares)	11,187
2016 Incentive Award Plan \| Granted to Employees
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Awards granted to employees (in shares)	38,188
2016 Incentive Award Plan \| Vesting After Four Years \| Restricted Stock Units (RSU)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares granted (in shares)	36,938
Award vesting period	4 years
2016 Incentive Award Plan \| Vesting After Four Years \| Stock Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options, granted (in shares)	1,250
Award vesting period	4 years

Shareholder's Equity and Stock-Based Compensation - Schedule of Stock Option Activity (Details)	9 Months Ended
	Sep. 30, 2023 $ / shares shares
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding [Roll Forward]
Number of stock options, outstanding - beginning of period (in shares) \| shares	1,629,148
Number of stock options, granted (in shares) \| shares	12,437
Number of stock options, exercised (in shares) \| shares	(238,492)
Number of stock options, cancelled/forfeited/expired (in shares) \| shares	(9,750)
Number of stock options, outstanding - end of period (in shares) \| shares	1,393,343
Number of stock options, exercisable (in shares) \| shares	950,421
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract]
Weighted average exercise price, outstanding - beginning of period (in dollars per share) \| $ / shares	$ 89.71
Weighted average exercise price, granted (in dollars per share) \| $ / shares	211.25
Weighted average exercise price, exercised (in dollars per share) \| $ / shares	41.32
Weighted average exercise price, cancelled/forfeited/expired (in dollars per share) \| $ / shares	186.77
Weighted average exercise price, outstanding - end of period (in dollars per share) \| $ / shares	98.39
Weighted average exercise price, exercisable - end of period (in dollars per share) \| $ / shares	$ 72.58

Shareholder's Equity and Stock-Based Compensation - Schedule of RSA/RSU Activity (Details) - RSA/RSU	9 Months Ended
	Sep. 30, 2023 shares
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Outstanding and unvested - beginning of period (in shares)	523,377
Granted (in shares)	36,938
Vested (in shares)	(133,039)
Forfeited (in shares)	(20,809)
Outstanding and unvested - end of period (in shares)	406,467
Cumulative vested shares - end of period (in shares)	2,362,955

Shareholder's Equity and Stock-Based Compensation - Summary of Stock-Based Compensation Expense Recognized in Statements of Operations Related to All Outstanding Stock Based Compensation Awards (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	$ 5,007	$ 5,794	$ 15,351	$ 15,819
Total Direct Costs
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	2,745	3,179	8,243	8,744
Selling, General and Administrative
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	$ 2,262	$ 2,615	$ 7,108	$ 7,075

Income Taxes - Narrative (Details)	3 Months Ended		9 Months Ended
Income Taxes - Narrative (Details)	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Tax Disclosure [Abstract]
Effective income tax rate	15.20%	19.40%	16.50%	15.50%
U.S. statutory rate	21.00%		21.00%

Commitments and Contingencies - Narrative (Details) $ in Millions	9 Months Ended
	Sep. 30, 2023 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Minimum purchase commitments for project related supplies	$ 16.9

Related Party Transactions - Narrative (Details) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2023 USD ($)	Mar. 31, 2023 renewal_option	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) Agreement renewal_option building	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)
Related Party Transaction [Line Items]
Total revenue	$ 492,499		$ 383,744	$ 1,387,441	$ 1,065,898
Advanced billings	518,755			518,755		$ 462,729
Accounts receivable and unbilled, net	292,773			292,773		253,404
Other current liabilities	35,955			35,955		47,547
Operating lease cost recognized	7,002		6,482	20,637	19,357
Operating lease right-of-use assets	144,147			144,147		139,068
Current portion of lease liability	20,278			20,278		19,272
Long-term portion of lease liabilities	143,039			143,039		138,867
Accounts payable	29,023			29,023		33,069
Related Party
Related Party Transaction [Line Items]
Total revenue	15,500		9,800	44,600	40,300
Advanced billings	13,400			13,400		8,800
Accounts receivable and unbilled, net	2,200			2,200		7,700
Other current liabilities						12,500
Operating lease right-of-use assets	84,592			84,592		86,356
Current portion of lease liability	5,592			5,592		5,409
Long-term portion of lease liabilities	92,049			92,049		93,393
Accounts payable	3,100			3,100		300
Employee Loans \| Related Party
Related Party Transaction [Line Items]
Prepaid expenses, other current assets, and other assets	300			300		300
Service Agreement \| Related Party \| LIB
Related Party Transaction [Line Items]
Advanced billings	10,600			10,600		7,400
Accounts receivable and unbilled, net	700			700		5,500
Other current liabilities						12,500
Service Agreement \| Related Party \| CinRx Pharma and Subsidiaries
Related Party Transaction [Line Items]
Advanced billings	2,800			2,800		1,400
Accounts receivable and unbilled, net	1,500			1,500		2,200
Service Agreement \| Related Party \| The Summit
Related Party Transaction [Line Items]
Expenses (less than for the three months ended June 30, 2022)	100		100	300	200
Service Agreement \| Related Party \| Total revenue \| LIB
Related Party Transaction [Line Items]
Total revenue	10,100		9,500	33,100	26,600
Service Agreement \| Related Party \| Total revenue \| CinRx Pharma and Subsidiaries
Related Party Transaction [Line Items]
Total revenue	5,300		500	11,400	13,800
Leased Real Estate \| Chief Executive Officer
Related Party Transaction [Line Items]
Term of lease		10 years
Number of lease renewal, 10-year option \| renewal_option		1
Lease term upon renewal		10 years
Operating lease right-of-use assets	19,800			19,800		18,200
Current portion of lease liability	1,400			1,400		1,500
Long-term portion of lease liabilities	18,500			18,500		16,700
Leased Real Estate \| Chief Executive Officer \| Direct Costs and Selling, General And Administrative
Related Party Transaction [Line Items]
Operating lease cost recognized	$ 700		600	$ 2,000	1,700
Leased Real Estate \| Chief Executive Officer And Immediate Family \| Office Space
Related Party Transaction [Line Items]
Number of lease renewal, 10-year option \| renewal_option				2
Lease term upon renewal	10 years			10 years
Operating lease right-of-use assets	$ 52,300			$ 52,300		53,500
Current portion of lease liability	1,200			1,200		1,100
Long-term portion of lease liabilities	$ 63,900			$ 63,900		64,800
Leased Real Estate \| Chief Executive Officer And Immediate Family \| Building
Related Party Transaction [Line Items]
Number of lease renewal, 10-year option \| renewal_option				1
Lease term upon renewal	10 years			10 years
Operating lease right-of-use assets	$ 12,600			$ 12,600		14,600
Current portion of lease liability	2,900			2,900		2,800
Long-term portion of lease liabilities	9,700			$ 9,700		11,900
Number of lease agreements \| Agreement				2
Number of buildings \| building				2
Leased Real Estate \| Chief Executive Officer And Immediate Family \| Direct Costs and Selling, General And Administrative \| Office Space
Related Party Transaction [Line Items]
Operating lease cost recognized	1,500		1,500	$ 4,300	4,300
Leased Real Estate \| Chief Executive Officer And Immediate Family \| Direct Costs and Selling, General And Administrative \| Building
Related Party Transaction [Line Items]
Operating lease cost recognized	900		900	2,700	2,700
Travel Services \| Related Party
Related Party Transaction [Line Items]
Accounts payable	300			300		$ 300
Travel Services \| Chief Executive Officer
Related Party Transaction [Line Items]
Travel expenses	$ 700		$ 600	$ 1,500	$ 1,600

Entity Wide Disclosures - Summary of Revenue by Major Source (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Disaggregation Of Revenue [Line Items]
Total revenue	$ 492,499	$ 383,744	$ 1,387,441	$ 1,065,898
Oncology
Disaggregation Of Revenue [Line Items]
Total revenue	149,326	122,834	438,366	343,589
Other
Disaggregation Of Revenue [Line Items]
Total revenue	106,160	72,767	294,319	216,739
Metabolic
Disaggregation Of Revenue [Line Items]
Total revenue	103,118	63,478	277,818	167,194
Cardiology
Disaggregation Of Revenue [Line Items]
Total revenue	44,360	49,802	142,107	129,225
Central Nervous System
Disaggregation Of Revenue [Line Items]
Total revenue	43,989	43,418	120,412	120,811
AVAI
Disaggregation Of Revenue [Line Items]
Total revenue	45,546	31,445	114,419	88,340
Total revenue
Disaggregation Of Revenue [Line Items]
Total revenue	$ 492,499	$ 383,744	$ 1,387,441	$ 1,065,898