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 June 30, 2024


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						31,001,761 shares outstanding as of July 19, 2024

Table of Contents

MEDPACE HOLDINGS, INC. AND SUBSIDIARIES

FORM 10-Q

FOR QUARTERLY PERIOD ENDED JUNE 30, 2024

TABLE OF CONTENTS


Item Number		Page
	PART I — FINANCIAL INFORMATION	3
Item 1.	Financial Statements (unaudited)	3
	Condensed Consolidated Balance Sheets as of June 30, 202 4 and December 31, 202 3	3
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 202 4 and 202 3	4
	Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 202 4 and 202 3	5
	Condensed Consolidated Statements of Shareholders’ Equity for the three and six months ended June 30, 202 4 and 202 3	6
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 202 4 and 202 3	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
	June 30, 2024		December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	510,894	$	245,449
Accounts receivable and unbilled, net (includes $2.7 million and $2.4 million with related parties at June 30, 2024 and December 31, 2023, respectively)	301,108		298,400
Prepaid expenses and other current assets (includes $0.3 million with related parties at June 30, 2024 and December 31, 2023)	60,521		49,979
Total current assets	872,523		593,828
Property and equipment, net	122,394		120,589
Operating lease right-of-use assets	134,001		144,801
Goodwill	662,396		662,396
Intangible assets, net	35,087		35,809
Deferred income taxes	75,196		74,435
Other assets	18,451		24,970
Total assets	$	1,920,048	$	1,656,828
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable (includes $0.4 million and $3.1 million with related parties at June 30, 2024 and December 31, 2023, respectively)	$	27,388	$	31,869
Accrued expenses	292,659		292,961
Advanced billings (includes $10.8 million and $10.1 million with related parties at June 30, 2024 and December 31, 2023, respectively)	638,417		559,860
Other current liabilities	34,624		40,441
Total current liabilities	993,088		925,131
Operating lease liabilities	131,796		142,122
Deferred income tax liability	2,294		2,404
Other long-term liabilities	29,271		28,221
Total liabilities	1,156,449		1,097,878
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 June 30, 2024 and December 31, 2023	—		—
Common stock - $0.01 par-value; 250,000,000 shares authorized at June 30, 2024 and December 31, 2023; 31,001,549 and 30,752,292 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively	310		308
Treasury stock - 70,073 and 70,573 shares at June 30, 2024 and December 31, 2023, respectively	(12,235)		(12,322)
Additional paid-in capital	818,903		802,681
Accumulated deficit	(30,790)		(221,645)
Accumulated other comprehensive loss	(12,589)		(10,072)
Total shareholders’ equity	763,599		558,950
Total liabilities and shareholders’ equity	$	1,920,048	$	1,656,828

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 June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Revenue, net (includes $11.2 million and $13.3 million with related parties for the three months ended June 30, 2024 and 2023, respectively, and $24.0 million and $29.1 million with related parties for the six months ended June 30, 2024 and 2023, respectively)	$	528,104	$	460,868	$	1,039,148	$	894,942
Operating expenses:
Direct service costs, excluding depreciation and amortization	171,541		158,526		343,033		309,594
Reimbursed out-of-pocket expenses	202,725		178,025		387,135		330,842
Total direct costs	374,266		336,551		730,168		640,436
Selling, general and administrative	41,453		39,404		85,534		77,431
Depreciation	6,874		5,970		13,505		11,378
Amortization	361		550		722		1,100
Total operating expenses	422,954		382,475		829,929		730,345
Income from operations	105,150		78,393		209,219		164,597
Other income (expense), net:
Miscellaneous (expense) income, net	(133)		(1,283)		4,460		(596)
Interest income (expense), net	5,465		(1,366)		9,585		(2,227)
Total other income (expense), net	5,332		(2,649)		14,045		(2,823)
Income before income taxes	110,482		75,744		223,264		161,774
Income tax provision	22,131		14,676		32,322		27,812
Net income	$	88,351	$	61,068	$	190,942	$	133,962
Net income per share attributable to common shareholders:
Basic	$	2.85	$	2.00	$	6.17	$	4.35
Diluted	$	2.75	$	1.93	$	5.96	$	4.20
Weighted average common shares outstanding:
Basic	30,990		30,537		30,917		30,771
Diluted	32,086		31,575		32,046		31,864

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 June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Net income	$	88,351	$	61,068	$	190,942	$	133,962
Other comprehensive (loss) income
Foreign currency translation adjustments, net of taxes	(548)		120		(2,517)		1,198
Comprehensive income	$	87,803	$	61,188	$	188,425	$	135,160

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		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

	Common Stock		Treasury Stock		Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
BALANCE — December 31, 2023	$	308	$	(12,322)	$	802,681	$	(221,645)	$	(10,072)	$	558,950
Net income							102,591				102,591
Foreign currency translation									(1,969)		(1,969)
Stock-based compensation expense					4,310						4,310
Stock options exercised	2				7,658						7,660
Re-issuance of treasury stock			87				(87)				—
BALANCE — March 31, 2024	$	310	$	(12,235)	$	814,649	$	(119,141)	$	(12,041)	$	671,542
Net income							88,351				88,351
Foreign currency translation									(548)		(548)
Stock-based compensation expense					3,588						3,588
Stock options exercised					666						666
BALANCE — June 30, 2024	$	310	$	(12,235)	$	818,903	$	(30,790)	$	(12,589)	$	763,599

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)	Six Months Ended June 30,
	2024		2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	190,942	$	133,962
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	13,505		11,378
Amortization	722		1,100
Stock-based compensation expense	7,898		10,344
Noncash lease expense	11,461		9,659
Deferred income tax benefit	(919)		(3,709)
Other	(3,903)		(899)
Changes in assets and liabilities:
Accounts receivable and unbilled, net	(2,714)		(21,734)
Prepaid expenses and other current assets	(11,251)		(11,831)
Accounts payable	(2,453)		2,341
Accrued expenses	915		21,259
Advanced billings	78,557		27,828
Lease liabilities	(11,025)		(9,379)
Other assets and liabilities, net	(2,661)		(7,725)
Net cash provided by operating activities	269,074		162,594
CASH FLOWS FROM INVESTING ACTIVITIES:
Property and equipment expenditures	(18,368)		(17,959)
Other	8,108		(11)
Net cash used in investing activities	(10,260)		(17,970)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from stock option exercises	8,326		4,127
Repurchases of common stock	—		(144,020)
Proceeds from revolving loan	—		105,000
Payments on revolving loan	—		(100,000)
Net cash provided by (used in) financing activities	8,326		(134,893)
EFFECT OF EXCHANGE RATES ON CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	(1,695)		1,142
INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	265,445		10,873
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — Beginning of period	245,449		28,265
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — End of period	$	510,894	$	39,138
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION —
Acquisition of property and equipment—non-cash	$	3,536	$	5,848

See notes to condensed consolidated financial statements.

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MEDPACE HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2024

(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, 2023.

Share Repurchases

In the fourth quarter of 2022, the Board approved a stock repurchase program of up to $500.0 million. The Company did not execute any share repurchases during the three and six months ended June 30, 2024. During the three and six months ended June 30, 2023, the Company repurchased 126,281 shares and 781,068 shares for $23.9 million and $144.0 million, respectively. As of June 30, 2024, the Company has remaining authorization of $308.8 million under the 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.

Recently Issued Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures" which requires entities to enhance disclosures around segment reporting. The guidance is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" which requires entities to enhance disclosures around income taxes. The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its consolidated financial statements and related disclosures.

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(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.

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 six months ended June 30, 2024 and 2023 (in thousands, except for earnings per share):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Weighted-average shares:
Common shares outstanding	30,990		30,537		30,917		30,771
RSAs	—		21		7		21
Total weighted-average shares	30,990		30,558		30,924		30,792
Earnings per common share—Basic
Net income	$	88,351	$	61,068	$	190,942	$	133,962
Less: Undistributed earnings allocated to RSAs	—		(41)		(41)		(90)
Net income available to common shareholders—Basic	$	88,351	$	61,027	$	190,901	$	133,872

Net income per common share—Basic	$	2.85	$	2.00	$	6.17	$	4.35

Basic weighted-average common shares outstanding	30,990		30,537		30,917		30,771
Effect of diluted shares	1,096		1,038		1,129		1,093
Diluted weighted-average shares outstanding	32,086		31,575		32,046		31,864

Net income per common share—Diluted	$	2.75	$	1.93	$	5.96	$	4.20

During the six months ended June 30, 2024, the Company had (in thousands) 4.8 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 six months ended June 30, 2023, the Company had (in thousands) 16.7 stock options 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.

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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 June 30, 2024. There were no material transfers between Level 1, Level 2 or Level 3 during the three and six months ended June 30, 2024 or June 30, 2023.

(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
	June 30, 2024		December 31, 2023
Accounts receivable	$	292,189	$	275,932
Unbilled receivables	8,919		22,475
Less: allowance for doubtful accounts	—		(7)
Total accounts receivable and unbilled, net	$	301,108	$	298,400

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
	June 30, 2024		December 31, 2023
Advanced billings	$	638,417	$	559,860

As of June 30, 2024 and December 31, 2023, the Company had approximately $3.2 billion and $2.9 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
	June 30, 2024		December 31, 2023
Intangible assets:
Finite-lived intangible assets:
Carrying amount:
Customer relationships	145,051		145,051
Accumulated amortization:
Customer relationships	(141,610)		(140,888)
Total finite-lived intangible assets, net	3,441		4,163
Trade name (indefinite-lived)	31,646		31,646
Total intangible assets, net	$	35,087	$	35,809

As of June 30, 2024, estimated amortization expense of the Company’s intangible assets for each of the next five years is as follows (in thousands):


	Amortization
Remainder of 2024	$	721
2025	946
2026	620
2027	577
2028	577
	$	3,441

(6) Accrued Expenses

Accrued expenses consisted of the following (in thousands):


	As of
	June 30, 2024		December 31, 2023
Employee compensation and benefits	$	64,238	$	75,822
Project related reimbursable expenses	219,126		205,864
Other	9,295		11,275
Total accrued expenses	$	292,659	$	292,961

(7) Short-term Debt

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”).

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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 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. On March 28, 2024, the Company entered into Amendment No. 6 to the Loan Agreement, which changed the aggregate principal amount that may be borrowed under the facility’s line of credit to up to $10.0 million and extended the expiration date of revolving credit note to March 31, 2025. 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 June 30, 2024 and December 31, 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 16 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 June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Operating lease cost	$	7,903	$	6,954	$	15,768	$	13,635
Variable lease cost	2,735		1,835		5,401		4,172

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


	Six Months Ended June 30,
	2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	11,565	$	9,599

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	2,222		10,061

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


	As of
	June 30, 2024			December 31, 2023
Operating lease right-of-use assets - related parties	$	78,999		$	83,065
Operating lease right-of-use assets - non-related parties	55,002			61,736
Operating lease right-of-use assets	$	134,001		$	144,801

Other current liabilities - related parties	6,021			5,730
Other current liabilities - non-related parties	15,908			16,635
Other current liabilities	$	21,929		$	22,365

Operating lease liabilities - related parties	87,462			90,568
Operating lease liabilities - non-related parties	44,334			51,554
Operating lease liabilities	131,796			142,122
Total operating lease liabilities	$	153,725		$	164,487

Weighted Average Remaining Lease Term (years)
Operating leases	9.9			10.0
Weighted Average Discount Rate
Operating leases	5.7		%	5.6		%

Lease payments due related to lease liabilities as of June 30, 2024 were as follows (in thousands):


	Related Party Operating Leases		Non-Related Parties Operating Leases		Total Operating Leases
Remainder of 2024	$	5,728	$	8,882	$	14,610
2025	11,607		17,231		28,838
2026	11,807		14,207		26,014
2027	10,839		11,108		21,947
2028	8,609		6,320		14,929
Later years	91,669		9,599		101,268
Total lease payments	140,259		67,347		207,606
Less: imputed interest	(46,776)		(7,105)		(53,881)
Total	$	93,483	$	60,242	$	153,725

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

The Company granted 2,991 awards to employees under the 2016 Incentive Award Plan during the six months ended June 30, 2024, consisting of 2,491 RSU having five year vesting schedules and 500 RSU having four year vesting schedules. The Company granted an additional 5,718 stock option awards to non-employee directors under the 2016 Incentive Award Plan during the six months ended June 30, 2024. 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:


	Six Months Ended June 30, 2024
	Stock Options	Weighted Average Exercise Price
Outstanding - beginning of period	1,343,287	$	100.75
Granted	5,718	$	393.30
Exercised	(164,822)	$	50.52
Cancelled/Forfeited/Expired	(2,953)	$	223.78
Outstanding - end of period	1,181,230	$	108.87

Exercisable - end of period	874,891	$	90.34

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


			Six Months Ended June 30, 2024
			Shares/Units
Outstanding and unvested - beginning of period			390,998
Granted			2,991
Vested			(84,435)
Forfeited			(13,053)
Outstanding and unvested - end of period			296,501

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 June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Total direct costs	$	2,308	$	2,558	$	4,778	$	5,498
Selling, general and administrative	1,280		2,348		3,120		4,846
Total stock-based compensation expense	$	3,588	$	4,906	$	7,898	$	10,344

(10) Income Taxes

The Company’s effective income tax rate was 20.0% and 19.4% for the three months ended June 30, 2024 and 2023, respectively. The Company's effective income tax rate was 14.5% and 17.2% for the six months ended June 30, 2024 and 2023, respectively. The Company’s effective income tax rate for the three months ended June 30, 2024 and the six months ended June 30, 2024 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 June 30, 2024 and December 31, 2023. 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 June 30, 2024.

Purchase Commitments

The Company has several minimum purchase commitments for project related supplies totaling $14.9 million as of June 30, 2024. 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 at June 30, 2024 and December 31, 2023 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 $3.9 million and $9.7 million during the three months ended June 30, 2024 and 2023, respectively, and $10.4 million and $23.0 million during the six months ended June 30, 2024 and 2023, respectively, in the Company’s condensed consolidated statements of operations. As of June 30, 2024 and December 31, 2023, respectively, the Company had Advanced billings from LIB of $6.4 million and $7.6 million in the condensed consolidated balance sheets. In addition, as of June 30, 2024 and December 31, 2023, respectively, the Company had Accounts receivable and unbilled, net from LIB of $0.4 million and $0.5 million in the condensed consolidated balance sheets.

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 $7.3 million and $3.6 million during the three months ended June 30, 2024 and 2023, respectively, and $13.6 million and $6.1 million during the six months ended June 30, 2024 and 2023, respectively, in the Company’s condensed consolidated statements of operations. As of June 30, 2024 and December 31, 2023, respectively, the Company had Advanced billings from CinRx of $4.4 million and $2.5 million in the condensed consolidated balance sheets. As of June 30, 2024 and December 31, 2023 the Company had Accounts receivable and unbilled, net from CinRx of $2.3 million and $1.9 million, respectively, in the condensed consolidated balance sheets. In addition, as of June 30, 2024 and December 31, 2023 the Company had Prepaid expenses and other current assets with CinRx of $0.3 million and $0.2 million, respectively, in the condensed consolidated balance sheets.

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 June 30, 2024 and 2023, and $0.2 million during the six months ended June 30, 2024 and 2023 at The Summit.

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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 June 30, 2024 and 2023 was $0.7 million. Operating lease cost recognized for the six months ended June 30, 2024 and 2023 was $1.4 million and $1.3 million, 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 June 30, 2024 and December 31, 2023 were $18.5 million and $19.3 million, respectively, in the condensed consolidated balance sheets. The current and long-term portions of the lease liabilities at June 30, 2024 were $1.6 million and $17.3 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, 2023 were $1.5 million and $18.1 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 June 30, 2024 and 2023 was $1.4 million. Operating lease cost recognized for the six months ended June 30, 2024 and 2023 was $2.8 million. 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 June 30, 2024 and December 31, 2023 were $51.0 million and $51.9 million, respectively, in the condensed consolidated balance sheets. The current and long-term portions of the lease liabilities at June 30, 2024 were $1.4 million and $62.8 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, 2023 were $1.3 million and $63.5 million, respectively and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.

The Company entered into a multi-year lease agreement governing the occupancy of office space in a building 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 lease expires 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 lease is an operating lease. Operating lease cost recognized for the three months ended June 30, 2024 and 2023 was $0.7 million. Operating lease cost recognized for the six months ended June 30, 2024 and 2023 was $1.3 million. 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 June 30, 2024 and December 31, 2023 were $7.5 million and $8.5 million, respectively, in the condensed consolidated balance sheets. The current and long-term portions of the lease liabilities at June 30, 2024 were $2.1 million and $5.3 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, 2023 were $2.1 million and $6.4 million, respectively, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.

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a plan to replace the leased office beginning in early 2025. 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 June 30, 2024 and 2023 was $0.8 million and $0.2 million. Operating lease cost recognized for the six months ended June 30, 2024 and 2023 was $1.5 million and $0.5 million. 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 June 30, 2024 and December 31, 2023 were $2.0 million and $3.4 million, respectively, in the condensed consolidated balance sheets. The current and long-term portions of the lease liabilities at June 30, 2024 were $0.9 million and $2.0 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, 2023 were $0.9 million and $2.5 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 $0.4 million during the three months ended June 30, 2024 and 2023, respectively, and $1.0 million and $0.8 million during the six months ended June 30, 2024 and 2023, 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 June 30, 2024 and December 31, 2023, the Company had Accounts payable to the Aircraft Management Company of $0.3 million and $0.4 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 June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Therapeutic Area
Oncology	$	162,952	$	147,089	$	318,150	$	289,040
Other	112,432		101,055		220,832		188,159
Metabolic	106,302		87,860		209,941		174,700
Cardiology	60,699		51,130		116,336		97,747
Central Nervous System	46,519		37,726		90,655		76,423
AVAI	39,200		36,008		83,234		68,873
Total revenue	$	528,104	$	460,868	$	1,039,148	$	894,942

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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, 2023 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, 2023. 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, 2023.

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,” “opportunity,” “may,” “could,” “outlook,” “can,” “trend,” “might,” “drives,” “hope,” “potential,” “project,” “predict,” and similar expressions are intended to identify forward-looking statements. However, the absence of these words does not mean that a statement is not forward-looking. 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. Any forward-looking statement speaks only as of the date it is made. 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. In other words, these statements are not guarantees of future performance and inherently involve a wide range of risks and uncertainties that are difficult to predict. 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, 2023 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.

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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 42 countries as of June 30, 2024, providing our customers with broad access to diverse markets and patient populations as well as local regulatory expertise and market knowledge.

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.

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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.

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 $551.0 million and $1,166.5 million for the three and six months ended June 30, 2024, respectively. Net new business awards were $574.8 million and $1,130.6 million for the three and six months ended June 30, 2023, 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 June 30, 2024, our backlog increased by $353.0 million, or 13.7%, to $2,924.9 million compared to $2,571.9 million as of June 30, 2023. Included within backlog as of June 30, 2024 was approximately $1,575.0 million to $1,595.0 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: unfavorable foreign currency adjustments of $1.2 million for the three months ended June 30, 2024; unfavorable foreign currency adjustments of $8.0 million for the six months ended June 30, 2024; favorable foreign currency adjustments of $0.9 million for the three months ended June 30, 2023; and favorable foreign currency adjustments of $3.9 million for the six months ended June 30, 2023.

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 June 30,		Six Months Ended June 30,
	2024	2023	2024	2023
U.S. Dollars per Euro:	1.08	1.09	1.08	1.08

Results of Operations

Three Months Ended June 30, 2024 compared to Three Months Ended June 30, 2023


	Three Months Ended June 30,
(Amounts in thousands, except percentages)	2024		2023		Change		% Change
Revenue, net	$	528,104	$	460,868	$	67,236	14.6	%
Direct service costs, excluding depreciation and amortization	171,541		158,526		13,015		8.2	%
Reimbursed out-of-pocket expenses	202,725		178,025		24,700		13.9	%
Total direct costs	374,266		336,551		37,715		11.2	%
Selling, general and administrative	41,453		39,404		2,049		5.2	%
Depreciation	6,874		5,970		904		15.1	%
Amortization	361		550		(189)		(34.4)	%
Total operating expenses	422,954		382,475		40,479		10.6	%
Income from operations	105,150		78,393		26,757
Miscellaneous expense, net	(133)		(1,283)		1,150
Interest income (expense), net	5,465		(1,366)		6,831
Income before income taxes	110,482		75,744		34,738
Income tax provision	22,131		14,676		7,455
Net income	$	88,351	$	61,068	$	27,283

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Six Months Ended June 30, 2024 compared to Six Months Ended June 30, 2023


	Six Months Ended June 30,
(Amounts in thousands, except percentages)	2024		2023		Change		% Change
Revenue, net	$	1,039,148	$	894,942	$	144,206	16.1	%
Direct service costs, excluding depreciation and amortization	343,033		309,594		33,439		10.8	%
Reimbursed out-of-pocket expenses	387,135		330,842		56,293		17.0	%
Total direct costs	730,168		640,436		89,732		14.0	%
Selling, general and administrative	85,534		77,431		8,103		10.5	%
Depreciation	13,505		11,378		2,127		18.7	%
Amortization	722		1,100		(378)		(34.4)	%
Total operating expenses	829,929		730,345		99,584		13.6	%
Income from operations	209,219		164,597		44,622
Miscellaneous income (expense), net	4,460		(596)		5,056
Interest income (expense), net	9,585		(2,227)		11,812
Income before income taxes	223,264		161,774		61,490
Income tax provision	32,322		27,812		4,510
Net income	$	190,942	$	133,962	$	56,980

Total revenue

Total revenue increased by $67.2 million to $528.1 million for the three months ended June 30, 2024, from $460.9 million for the three months ended June 30, 2023. Total revenue increased by $144.2 million to $1,039.1 million for the six months ended June 30, 2024, from $894.9 million for the six months ended June 30, 2023. The increase for the three and six months ended June 30, 2024 was broad based, but primarily driven by growth within the Metabolic, Oncology and Other uncategorized therapeutic areas, compared to the same period in the prior year.

Total direct costs

Total direct costs increased by $37.7 million, to $374.3 million for the three months ended June 30, 2024 from $336.6 million for the three months ended June 30, 2023. Total direct costs increased by $89.7 million, to $730.2 million for the six months ended June 30, 2024 from $640.4 million for the six months ended June 30, 2023. 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 $24.7 million and $56.3 million for the three and six months ended June 30, 2024, compared to the same period in the prior year. The higher personnel costs portion increased by $12.0 million and $32.2 million for the three and six months ended June 30, 2024, compared to the same periods in the prior year.

Selling, general and administrative

Selling, general and administrative expenses increased by $2.0 million, to $41.5 million for the three months ended June 30, 2024 from $39.4 million for the three months ended June 30, 2023. Selling, general and administrative expenses increased by $8.1 million, to $85.5 million for the six months ended June 30, 2024 from $77.4 million for the six months ended June 30, 2023. The increase was primarily attributed to higher personnel costs to support the growth in service activities. The higher personnel costs portion increased by $2.7 million and $7.4 million for the three and six months ended June 30, 2024, compared to the same periods in the prior year.

Depreciation and Amortization

Depreciation and amortization expense increased by $0.7 million, to $7.2 million for the three months ended June 30, 2024 from $6.5 million for the three months ended June 30, 2023. Depreciation and amortization expense increased by $1.7 million, to $14.2 million for the six months ended June 30, 2024 from $12.5 million for the six months ended June 30, 2023. 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 income (expense), net

Miscellaneous income (expense), net changed by $1.2 million to $0.1 million of expense for the three months ended June 30, 2024 from $1.3 million of expense for the three months ended June 30, 2023. Miscellaneous income (expense), net changed by $5.1 million to $4.5 million of income for the six months ended June 30, 2024 from $0.6 million of expense for the six months ended June 30, 2023. 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, third-party investment gains or losses and proceeds from the recovery of a note receivable.

Interest income (expense), net

Interest income (expense), net changed by $6.8 million to $5.5 million of income for the three months ended June 30, 2024 from $1.4 million of expense for the three months ended June 30, 2023. Interest income (expense), net changed by $11.8 million to $9.6 million of income for the six months ended June 30, 2024 from $2.2 million of expense for the six months ended June 30, 2023. These changes were mainly attributable to increased interest income on Cash and cash equivalents, including restricted cash and a reduction in short-term debt, compared to the same periods in the prior year.

Income tax provision

Income tax provision increased by $7.5 million, to $22.1 million for the three months ended June 30, 2024 from $14.7 million for the three months ended June 30, 2023. Income tax provision increased by $4.5 million, to $32.3 million for the six months ended June 30, 2024 from $27.8 million for the six months ended June 30, 2023. The overall effective tax rate for the three months ended June 30, 2024 was 20.0%, compared to an overall effective tax rate of 19.4% for the three months ended June 30, 2023. The overall effective tax rate for the six months ended June 30, 2024 was 14.5% compared to an overall effective tax rate of 17.2% for the six months ended June 30, 2023. The increase in the income tax provision and overall effective tax rate for the three months ended June 30, 2024 was primarily attributable to an increase in pre-tax book income and a decrease in excess tax benefits recognized from share-based compensation, which was partially offset by an increase in 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 for the six months ended June 30, 2024 was primarily attributable to an increase in pre-tax book income, which was partially offset by an increase in excess tax benefits recognized from share-based compensation and tax benefits related to FDII compared to the same period in the prior year. The decrease in the overall effective tax rate for the six months ended June 30, 2024 was primarily attributable to an increase in excess tax benefits recognized from share-based compensation and tax benefits related to FDII 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 $10.0 million revolving line of credit which we entered into on September 30, 2019 (the “Credit Facility”), and has subsequently been amended. As of June 30, 2024, we had cash and cash equivalents of $510.9 million which increased from $245.4 million as of December 31, 2023. Approximately $20.6 million of cash and cash equivalents, none of which was restricted, was held by our foreign subsidiaries as of June 30, 2024.

As of June 30, 2024, we had $10.0 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, including additional lease commitments, capital expenditures, 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 June 30, 2024, 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 24 basis points to 1.77% in the six months ended June 30, 2024, 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

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and future credit facilities, we would incur taxes on these earnings if the need for repatriation due to liquidity purposes arises.


	Six Months Ended June 30,
Cash Flows (Amounts in thousands)	2024		2023
Net cash provided by operating activities	$	269,074	$	162,594
Net cash used in investing activities	(10,260)		(17,970)
Net cash provided by (used in) financing activities	8,326		(134,893)
Effect of exchange rates on cash, cash equivalents and restricted cash	(1,695)		1,142
Increase in cash, cash equivalents and restricted cash	$	265,445	$	10,873

Cash Flow from Operating Activities

Cash flows from operations are driven mainly by net income, depreciation, noncash lease expense, stock-based compensation expense, and net movement in advanced billings and accounts receivable and unbilled, net. Advanced billings and accounts receivable and unbilled, net 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 $269.1 million for the six months ended June 30, 2024 beginning with net income of $190.9 million. Adjustments to reconcile net income to net cash provided by operating activities were $28.8 million, primarily related to depreciation of $13.5 million, noncash lease expense of 11.5 million and stock-based compensation expense of $7.9 million. Changes in operating assets and liabilities provided $49.4 million in operating cash flows and was primarily driven by increased advanced billings of $78.6 million, partially offset by increased prepaid expenses and other current assets of $11.3 million and decreased lease liabilities of $11.0 million.

Net cash flows provided by operating activities was $162.6 million for the six months ended June 30, 2023 beginning with net income of $134.0 million. Adjustments to reconcile net income to net cash provided by operating activities were $27.9 million, primarily related to deprecation of $11.4 million, stock-based compensation expense of $10.3 million and noncash lease expense of $9.7 million. Changes in operating assets and liabilities provided $0.7 million in operating cash flows and was primarily driven by increased advanced billings of $27.8 million and increased accrued expenses of $21.3 million, partially offset by increased accounts receivable and unbilled, net of $21.7 million and increased prepaid expenses and other current assets of $11.8 million.

Cash Flow from Investing Activities

Net cash used in investing activities was $10.3 million for the six months ended June 30, 2024 primarily consisting of property and equipment expenditures of $18.4 million, partially offset by $8.1 million in other investing activity.

Net cash used in investing activities was $18.0 million for the six months ended June 30, 2023 primarily consisting of property and equipment expenditures.

Cash Flow from Financing Activities

Net cash provided by financing activities was $8.3 million for the six months ended June 30, 2024 related to proceeds from stock option exercises.

Net cash used in financing activities was $134.9 million for the six months ended June 30, 2023 primarily related to $144.0 million in repurchases of common stock and $100.0 million in repayments of the Credit Facility, partially offset by $105.0 million in proceeds related to the Credit Facility and $4.1 million in proceeds from stock option exercises.

Share Repurchases

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Indebtedness

As of June 30, 2024, we had 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, 2023.

Effect of Recent Accounting Pronouncements

Refer to Note 1 of the Condensed Consolidated Financial Statements for management’s discussion of the effect of recent accounting pronouncements.

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, 2023.

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 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 June 30, 2024 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, 2023. 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 June 30, 2024, 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**

August J. Troendle, Chief Executive Officer and Chairman of the Board

Adopt

April 25, 2024 [1]

Up to 190,000 shares to be sold

Good until cancelled

August J. Troendle, Chief Executive Officer and Chairman of the Board

Modify

May 22, 2024 [2]

Up to 190,000 shares to be sold

Good until cancelled

August J. Troendle, Chief Executive Officer and Chairman of the Board

Terminate

May 30, 2024 [3]

Up to 190,000 shares to be sold

Good until cancelled

Susan E. Burwig, Executive Vice President, Operations

Adopt

June 5, 2024 [4]

Up to 7,681 shares to be sold

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

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

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

[1] On April 25, 2024, August J. Troendle placed a limit order to sell up to 190,000 shares that were previously acquired through various stock option exercises. Between April 25, 2024 and May 21, 2024, Mr. Troendle sold 142,250 shares pursuant to the limit order.

[2] On May 22, 2024, August J. Troendle changed the price limit for sales under the limit order originally adopted on April 25, 2024.

[3] On May 30, 2024, August J. Troendle terminated the limit order originally adopted on April 25, 2024.

[4] On June 5, 2024, Ms. Burwig placed a limit order to sell up to 7,681 shares that were acquired upon the vesting of restricted shares.

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

3.1

Restated Certificate of Incorporation

8-K

001-37856

3.1

5/21/2024

3.2

Second Amended and Restated Bylaws

8-K

001-37856

3.2

5/21/2024

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: July 23, 2024

-29-

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: July 23, 2024


			/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: July 23, 2024


			/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 June 30, 2024 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: July 23, 2024


			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: July 23, 2024


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

Cover Page - shares	6 Months Ended
Cover Page - shares	Jun. 30, 2024	Jul. 19, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2024
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 Central Index Key	0001668397
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		31,001,761

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 510,894	$ 245,449
Accounts receivable and unbilled, net (includes $2.7 million and $2.4 million with related parties at June 30, 2024 and December 31, 2023, respectively)	301,108	298,400
Prepaid expenses and other current assets (includes $0.3 million with related parties at June 30, 2024 and December 31, 2023)	60,521	49,979
Total current assets	872,523	593,828
Property and equipment, net	122,394	120,589
Operating lease right-of-use assets	134,001	144,801
Goodwill	662,396	662,396
Intangible assets, net	35,087	35,809
Deferred income taxes	75,196	74,435
Other assets	18,451	24,970
Total assets	1,920,048	1,656,828
Current liabilities:
Accounts payable (includes $0.4 million and $3.1 million with related parties at June 30, 2024 and December 31, 2023, respectively)	27,388	31,869
Accrued expenses	292,659	292,961
Advanced billings (includes $10.8 million and $10.1 million with related parties at June 30, 2024 and December 31, 2023, respectively)	638,417	559,860
Other current liabilities	34,624	40,441
Total current liabilities	993,088	925,131
Operating lease liabilities	131,796	142,122
Deferred income tax liability	2,294	2,404
Other long-term liabilities	29,271	28,221
Total liabilities	1,156,449	1,097,878
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 June 30, 2024 and December 31, 2023	0	0
Common stock - $0.01 par-value; 250,000,000 shares authorized at June 30, 2024 and December 31, 2023; 31,001,549 and 30,752,292 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively	310	308
Treasury stock - 70,073 and 70,573 shares at June 30, 2024 and December 31, 2023, respectively	(12,235)	(12,322)
Additional paid-in capital	818,903	802,681
Accumulated deficit	(30,790)	(221,645)
Accumulated other comprehensive loss	(12,589)	(10,072)
Total shareholders’ equity	763,599	558,950
Total liabilities and shareholders’ equity	$ 1,920,048	$ 1,656,828

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)(Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Accounts receivable and unbilled, net	$ 301,108	$ 298,400
Prepaid expenses and other current assets	60,521	49,979
Accounts payable	27,388	31,869
Advanced billings	$ 638,417	$ 559,860
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)	31,001,549	30,752,292
Common stock shares outstanding (in shares)	31,001,549	30,752,292
Treasury stock (in shares)	70,073	70,573
Related Party
Accounts receivable and unbilled, net	$ 2,700	$ 2,400
Prepaid expenses and other current assets	300	300
Accounts payable	400	3,100
Advanced billings	$ 10,800	$ 10,100

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Revenue, net (includes $11.2 million and $13.3 million with related parties for the three months ended June 30, 2024 and 2023, respectively, and $24.0 million and $29.1 million with related parties for the six months ended June 30, 2024 and 2023, respectively)	$ 528,104	$ 460,868	$ 1,039,148	$ 894,942
Operating expenses:
Total direct costs	374,266	336,551	730,168	640,436
Selling, general and administrative	41,453	39,404	85,534	77,431
Depreciation	6,874	5,970	13,505	11,378
Amortization	361	550	722	1,100
Total operating expenses	422,954	382,475	829,929	730,345
Income from operations	105,150	78,393	209,219	164,597
Other income (expense), net:
Miscellaneous (expense) income, net	(133)	(1,283)	4,460	(596)
Interest income (expense), net	5,465	(1,366)	9,585	(2,227)
Total other income (expense), net	5,332	(2,649)	14,045	(2,823)
Income before income taxes	110,482	75,744	223,264	161,774
Income tax provision	22,131	14,676	32,322	27,812
Net income	$ 88,351	$ 61,068	$ 190,942	$ 133,962
Net income per share attributable to common shareholders:
Basic (in dollars per share)	$ 2.85	$ 2.00	$ 6.17	$ 4.35
Diluted (in dollars per share)	$ 2.75	$ 1.93	$ 5.96	$ 4.20
Weighted average common shares outstanding:
Basic (in shares)	30,990	30,537	30,917	30,771
Diluted (in shares)	32,086	31,575	32,046	31,864
Direct Costs
Operating expenses:
Total direct costs	$ 171,541	$ 158,526	$ 343,033	$ 309,594
Reimbursable Out of Pocket Costs
Operating expenses:
Total direct costs	$ 202,725	$ 178,025	$ 387,135	$ 330,842

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Total revenue	$ 528,104	$ 460,868	$ 1,039,148	$ 894,942
Related Party
Total revenue	$ 11,200	$ 13,300	$ 24,000	$ 29,100

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Statement of Comprehensive Income [Abstract]
Net income	$ 88,351	$ 61,068	$ 190,942	$ 133,962
Other comprehensive (loss) income
Foreign currency translation adjustments, net of taxes	(548)	120	(2,517)	1,198
Comprehensive income	$ 87,803	$ 61,188	$ 188,425	$ 135,160

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands	Total	Common Stock	Treasury Stock	Additional Paid-In Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss
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	133,962
Foreign currency translation	1,198
Balance, end of period at Jun. 30, 2023	391,060	306	(12,322)	785,292	(371,022)	(11,194)
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)
Balance, beginning of period at Dec. 31, 2023	558,950	308	(12,322)	802,681	(221,645)	(10,072)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	102,591				102,591
Foreign currency translation	(1,969)					(1,969)
Stock-based compensation expense	4,310			4,310
Stock options exercised	7,660	2		7,658
Re-issuance of treasury stock	0		87		(87)
Balance, end of period at Mar. 31, 2024	671,542	310	(12,235)	814,649	(119,141)	(12,041)
Balance, beginning of period at Dec. 31, 2023	558,950	308	(12,322)	802,681	(221,645)	(10,072)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	190,942
Foreign currency translation	(2,517)
Balance, end of period at Jun. 30, 2024	763,599	310	(12,235)	818,903	(30,790)	(12,589)
Balance, beginning of period at Mar. 31, 2024	671,542	310	(12,235)	814,649	(119,141)	(12,041)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	88,351				88,351
Foreign currency translation	(548)					(548)
Stock-based compensation expense	3,588			3,588
Stock options exercised	666			666
Balance, end of period at Jun. 30, 2024	$ 763,599	$ 310	$ (12,235)	$ 818,903	$ (30,790)	$ (12,589)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 190,942	$ 133,962
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	13,505	11,378
Amortization	722	1,100
Stock-based compensation expense	7,898	10,344
Noncash lease expense	11,461	9,659
Deferred income tax benefit	(919)	(3,709)
Other	(3,903)	(899)
Changes in assets and liabilities:
Accounts receivable and unbilled, net	(2,714)	(21,734)
Prepaid expenses and other current assets	(11,251)	(11,831)
Accounts payable	(2,453)	2,341
Accrued expenses	915	21,259
Advanced billings	78,557	27,828
Lease liabilities	(11,025)	(9,379)
Other assets and liabilities, net	(2,661)	(7,725)
Net cash provided by operating activities	269,074	162,594
CASH FLOWS FROM INVESTING ACTIVITIES:
Property and equipment expenditures	(18,368)	(17,959)
Other	8,108	(11)
Net cash used in investing activities	(10,260)	(17,970)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from stock option exercises	8,326	4,127
Repurchases of common stock	0	(144,020)
Proceeds from revolving loan	0	105,000
Payments on revolving loan	0	(100,000)
Net cash provided by (used in) financing activities	8,326	(134,893)
EFFECT OF EXCHANGE RATES ON CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	(1,695)	1,142
INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	265,445	10,873
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — Beginning of period	245,449	28,265
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — End of period	510,894	39,138
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION —
Acquisition of property and equipment—non-cash	$ 3,536	$ 5,848

Basis of Presentation	6 Months Ended
Basis of Presentation	Jun. 30, 2024
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, 2023. Share Repurchases In the fourth quarter of 2022, the Board approved a stock repurchase program of up to $500.0 million. The Company did not execute any share repurchases during the three and six months ended June 30, 2024. During the three and six months ended June 30, 2023, the Company repurchased 126,281 shares and 781,068 shares for $23.9 million and $144.0 million, respectively. As of June 30, 2024, the Company has remaining authorization of $308.8 million under the 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. Recently Issued Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures" which requires entities to enhance disclosures around segment reporting. The guidance is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" which requires entities to enhance disclosures around income taxes. The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its consolidated financial statements and related disclosures.

Net Income Per Share

6 Months Ended

Jun. 30, 2024

Earnings Per Share [Abstract]

Net Income Per Share

The following table sets forth the computation of basic and diluted earnings per share for the three and six months ended June 30, 2024 and 2023 (in thousands, except for earnings per share):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Weighted-average shares:
Common shares outstanding	30,990		30,537		30,917		30,771
RSAs	—		21		7		21
Total weighted-average shares	30,990		30,558		30,924		30,792
Earnings per common share—Basic
Net income	$	88,351	$	61,068	$	190,942	$	133,962
Less: Undistributed earnings allocated to RSAs	—		(41)		(41)		(90)
Net income available to common shareholders—Basic	$	88,351	$	61,027	$	190,901	$	133,872

Net income per common share—Basic	$	2.85	$	2.00	$	6.17	$	4.35

Basic weighted-average common shares outstanding	30,990		30,537		30,917		30,771
Effect of diluted shares	1,096		1,038		1,129		1,093
Diluted weighted-average shares outstanding	32,086		31,575		32,046		31,864

Net income per common share—Diluted	$	2.75	$	1.93	$	5.96	$	4.20

Fair Value Measurements	6 Months Ended
Fair Value Measurements	Jun. 30, 2024
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 June 30, 2024. There were no material transfers between Level 1, Level 2 or Level 3 during the three and six months ended June 30, 2024 or June 30, 2023.

Contract Assets and Contract Liabilities

6 Months Ended

Jun. 30, 2024

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
	June 30, 2024		December 31, 2023
Accounts receivable	$	292,189	$	275,932
Unbilled receivables	8,919		22,475
Less: allowance for doubtful accounts	—		(7)
Total accounts receivable and unbilled, net	$	301,108	$	298,400

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
	June 30, 2024		December 31, 2023
Advanced billings	$	638,417	$	559,860

As of June 30, 2024 and December 31, 2023, the Company had approximately $3.2 billion and $2.9 billion of performance obligations remaining to be performed for active projects.

Intangible Assets, Net

6 Months Ended

Jun. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets, Net

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


	As of
	June 30, 2024		December 31, 2023
Intangible assets:
Finite-lived intangible assets:
Carrying amount:
Customer relationships	145,051		145,051
Accumulated amortization:
Customer relationships	(141,610)		(140,888)
Total finite-lived intangible assets, net	3,441		4,163
Trade name (indefinite-lived)	31,646		31,646
Total intangible assets, net	$	35,087	$	35,809

As of June 30, 2024, estimated amortization expense of the Company’s intangible assets for each of the next five years is as follows (in thousands):


	Amortization
Remainder of 2024	$	721
2025	946
2026	620
2027	577
2028	577
	$	3,441

Accrued Expenses

6 Months Ended

Jun. 30, 2024

Payables and Accruals [Abstract]

Accrued Expenses

Accrued expenses consisted of the following (in thousands):


	As of
	June 30, 2024		December 31, 2023
Employee compensation and benefits	$	64,238	$	75,822
Project related reimbursable expenses	219,126		205,864
Other	9,295		11,275
Total accrued expenses	$	292,659	$	292,961

Short-Term Debt	6 Months Ended
Short-Term Debt	Jun. 30, 2024
Debt Disclosure [Abstract]
Short-Term Debt	Short-term Debt 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 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. On March 28, 2024, the Company entered into Amendment No. 6 to the Loan Agreement, which changed the aggregate principal amount that may be borrowed under the facility’s line of credit to up to $10.0 million and extended the expiration date of revolving credit note to March 31, 2025. 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 June 30, 2024 and December 31, 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

6 Months Ended

Jun. 30, 2024

Leases [Abstract]

Leases

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Operating lease cost	$	7,903	$	6,954	$	15,768	$	13,635
Variable lease cost	2,735		1,835		5,401		4,172

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


	Six Months Ended June 30,
	2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	11,565	$	9,599

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	2,222		10,061

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


	As of
	June 30, 2024			December 31, 2023
Operating lease right-of-use assets - related parties	$	78,999		$	83,065
Operating lease right-of-use assets - non-related parties	55,002			61,736
Operating lease right-of-use assets	$	134,001		$	144,801

Other current liabilities - related parties	6,021			5,730
Other current liabilities - non-related parties	15,908			16,635
Other current liabilities	$	21,929		$	22,365

Operating lease liabilities - related parties	87,462			90,568
Operating lease liabilities - non-related parties	44,334			51,554
Operating lease liabilities	131,796			142,122
Total operating lease liabilities	$	153,725		$	164,487

Weighted Average Remaining Lease Term (years)
Operating leases	9.9			10.0
Weighted Average Discount Rate
Operating leases	5.7		%	5.6		%

Lease payments due related to lease liabilities as of June 30, 2024 were as follows (in thousands):


	Related Party Operating Leases		Non-Related Parties Operating Leases		Total Operating Leases
Remainder of 2024	$	5,728	$	8,882	$	14,610
2025	11,607		17,231		28,838
2026	11,807		14,207		26,014
2027	10,839		11,108		21,947
2028	8,609		6,320		14,929
Later years	91,669		9,599		101,268
Total lease payments	140,259		67,347		207,606
Less: imputed interest	(46,776)		(7,105)		(53,881)
Total	$	93,483	$	60,242	$	153,725

Shareholder's Equity and Stock-Based Compensation

6 Months Ended

Jun. 30, 2024

Equity [Abstract]

Shareholder's Equity and Stock-Based Compensation

Shareholder’s Equity and Stock-Based Compensation

Award Activity

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


	Six Months Ended June 30, 2024
	Stock Options	Weighted Average Exercise Price
Outstanding - beginning of period	1,343,287	$	100.75
Granted	5,718	$	393.30
Exercised	(164,822)	$	50.52
Cancelled/Forfeited/Expired	(2,953)	$	223.78
Outstanding - end of period	1,181,230	$	108.87

Exercisable - end of period	874,891	$	90.34

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


			Six Months Ended June 30, 2024
			Shares/Units
Outstanding and unvested - beginning of period			390,998
Granted			2,991
Vested			(84,435)
Forfeited			(13,053)
Outstanding and unvested - end of period			296,501

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 June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Total direct costs	$	2,308	$	2,558	$	4,778	$	5,498
Selling, general and administrative	1,280		2,348		3,120		4,846
Total stock-based compensation expense	$	3,588	$	4,906	$	7,898	$	10,344

Income Taxes	6 Months Ended
Income Taxes	Jun. 30, 2024
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The Company’s effective income tax rate was 20.0% and 19.4% for the three months ended June 30, 2024 and 2023, respectively. The Company's effective income tax rate was 14.5% and 17.2% for the six months ended June 30, 2024 and 2023, respectively. The Company’s effective income tax rate for the three months ended June 30, 2024 and the six months ended June 30, 2024 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	6 Months Ended
Commitments and Contingencies	Jun. 30, 2024
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 June 30, 2024 and December 31, 2023. 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 June 30, 2024. Purchase Commitments The Company has several minimum purchase commitments for project related supplies totaling $14.9 million as of June 30, 2024. In return for the commitment, Medpace receives preferential pricing. The commitments expire at various times through 2029.

Related Party Transactions	6 Months Ended
Related Party Transactions	Jun. 30, 2024
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 at June 30, 2024 and December 31, 2023 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 $3.9 million and $9.7 million during the three months ended June 30, 2024 and 2023, respectively, and $10.4 million and $23.0 million during the six months ended June 30, 2024 and 2023, respectively, in the Company’s condensed consolidated statements of operations. As of June 30, 2024 and December 31, 2023, respectively, the Company had Advanced billings from LIB of $6.4 million and $7.6 million in the condensed consolidated balance sheets. In addition, as of June 30, 2024 and December 31, 2023, respectively, the Company had Accounts receivable and unbilled, net from LIB of $0.4 million and $0.5 million in the condensed consolidated balance sheets. 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 $7.3 million and $3.6 million during the three months ended June 30, 2024 and 2023, respectively, and $13.6 million and $6.1 million during the six months ended June 30, 2024 and 2023, respectively, in the Company’s condensed consolidated statements of operations. As of June 30, 2024 and December 31, 2023, respectively, the Company had Advanced billings from CinRx of $4.4 million and $2.5 million in the condensed consolidated balance sheets. As of June 30, 2024 and December 31, 2023 the Company had Accounts receivable and unbilled, net from CinRx of $2.3 million and $1.9 million, respectively, in the condensed consolidated balance sheets. In addition, as of June 30, 2024 and December 31, 2023 the Company had Prepaid expenses and other current assets with CinRx of $0.3 million and $0.2 million, respectively, in the condensed consolidated balance sheets. 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 June 30, 2024 and 2023, and $0.2 million during the six months ended June 30, 2024 and 2023 at The Summit. 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 June 30, 2024 and 2023 was $0.7 million. Operating lease cost recognized for the six months ended June 30, 2024 and 2023 was $1.4 million and $1.3 million, 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 June 30, 2024 and December 31, 2023 were $18.5 million and $19.3 million, respectively, in the condensed consolidated balance sheets. The current and long-term portions of the lease liabilities at June 30, 2024 were $1.6 million and $17.3 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, 2023 were $1.5 million and $18.1 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 June 30, 2024 and 2023 was $1.4 million. Operating lease cost recognized for the six months ended June 30, 2024 and 2023 was $2.8 million. 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 June 30, 2024 and December 31, 2023 were $51.0 million and $51.9 million, respectively, in the condensed consolidated balance sheets. The current and long-term portions of the lease liabilities at June 30, 2024 were $1.4 million and $62.8 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, 2023 were $1.3 million and $63.5 million, respectively and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets. The Company entered into a multi-year lease agreement governing the occupancy of office space in a building 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 lease expires 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 lease is an operating lease. Operating lease cost recognized for the three months ended June 30, 2024 and 2023 was $0.7 million. Operating lease cost recognized for the six months ended June 30, 2024 and 2023 was $1.3 million. 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 June 30, 2024 and December 31, 2023 were $7.5 million and $8.5 million, respectively, in the condensed consolidated balance sheets. The current and long-term portions of the lease liabilities at June 30, 2024 were $2.1 million and $5.3 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, 2023 were $2.1 million and $6.4 million, respectively, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets. The Company entered into a multi-year lease agreement governing the occupancy of office space in a building 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 lease expires in 2027 with the Company having one 10-year option to extend the lease term. In the first quarter of 2024, the Company reduced the lease term in connection with a plan to replace the leased office beginning in early 2025. 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 June 30, 2024 and 2023 was $0.8 million and $0.2 million. Operating lease cost recognized for the six months ended June 30, 2024 and 2023 was $1.5 million and $0.5 million. 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 June 30, 2024 and December 31, 2023 were $2.0 million and $3.4 million, respectively, in the condensed consolidated balance sheets. The current and long-term portions of the lease liabilities at June 30, 2024 were $0.9 million and $2.0 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, 2023 were $0.9 million and $2.5 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 $0.4 million during the three months ended June 30, 2024 and 2023, respectively, and $1.0 million and $0.8 million during the six months ended June 30, 2024 and 2023, 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 June 30, 2024 and December 31, 2023, the Company had Accounts payable to the Aircraft Management Company of $0.3 million and $0.4 million, respectively, in the condensed consolidated balance sheets.

Entity Wide Disclosures

6 Months Ended

Jun. 30, 2024

Entity Wide Disclosures [Abstract]

Entity Wide Disclosures

Revenue by Category

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Therapeutic Area
Oncology	$	162,952	$	147,089	$	318,150	$	289,040
Other	112,432		101,055		220,832		188,159
Metabolic	106,302		87,860		209,941		174,700
Cardiology	60,699		51,130		116,336		97,747
Central Nervous System	46,519		37,726		90,655		76,423
AVAI	39,200		36,008		83,234		68,873
Total revenue	$	528,104	$	460,868	$	1,039,148	$	894,942

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2024	Jun. 30, 2023
Pay vs Performance Disclosure
Net income	$ 88,351	$ 102,591	$ 61,068	$ 72,894	$ 190,942	$ 133,962

Insider Trading Arrangements

3 Months Ended

6 Months Ended

Jun. 30, 2024

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**

August J. Troendle, Chief Executive Officer and Chairman of the Board

Adopt

April 25, 2024 [1]

Up to 190,000 shares to be sold

Good until cancelled

August J. Troendle, Chief Executive Officer and Chairman of the Board

Modify

May 22, 2024 [2]

Up to 190,000 shares to be sold

Good until cancelled

August J. Troendle, Chief Executive Officer and Chairman of the Board

Terminate

May 30, 2024 [3]

Up to 190,000 shares to be sold

Good until cancelled

Susan E. Burwig, Executive Vice President, Operations

Adopt

June 5, 2024 [4]

Up to 7,681 shares to be sold

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

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

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

[2] On May 22, 2024, August J. Troendle changed the price limit for sales under the limit order originally adopted on April 25, 2024.

[3] On May 30, 2024, August J. Troendle terminated the limit order originally adopted on April 25, 2024.

[4] On June 5, 2024, Ms. Burwig placed a limit order to sell up to 7,681 shares that were acquired upon the vesting of restricted shares.

Rule 10b5-1 Arrangement Adopted

false

Rule 10b5-1 Arrangement Terminated

false

Susan E. Burwig [Member]

Trading Arrangements, by Individual

Name

Susan E. Burwig

Title

Executive Vice President, Operations

Non-Rule 10b5-1 Arrangement Adopted

true

Adoption Date

June 5, 2024

Arrangement Duration

180 days

Aggregate Available

7,681

Trading Arrangement with August J. Troendle Adopted on April 25th, 2024 [Member] | August J. Troendle [Member]

Trading Arrangements, by Individual

Name

August J. Troendle

Title

Chief Executive Officer and Chairman of the Board

Non-Rule 10b5-1 Arrangement Adopted

true

Adoption Date

April 25, 2024

Non-Rule 10b5-1 Arrangement Terminated

true

Termination Date

May 22, 2024

Aggregate Available

190,000

Trading Arrangement with August J. Troendle Modified on May 22, 2024 [Member] | August J. Troendle [Member]

Trading Arrangements, by Individual

Name

August J. Troendle

Title

Chief Executive Officer and Chairman of the Board

Non-Rule 10b5-1 Arrangement Adopted

true

Adoption Date

May 22, 2024

Non-Rule 10b5-1 Arrangement Terminated

true

Termination Date

May 30, 2024

Aggregate Available

190,000

Basis of Presentation (Policies)	6 Months Ended
Basis of Presentation (Policies)	Jun. 30, 2024
Accounting Policies [Abstract]
Unaudited Interim Financial Information	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, 2023.
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.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures" which requires entities to enhance disclosures around segment reporting. The guidance is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" which requires entities to enhance disclosures around income taxes. The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its consolidated financial statements and related disclosures

Net Income Per Share (Tables)

6 Months Ended

Jun. 30, 2024

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 six months ended June 30, 2024 and 2023 (in thousands, except for earnings per share):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Weighted-average shares:
Common shares outstanding	30,990		30,537		30,917		30,771
RSAs	—		21		7		21
Total weighted-average shares	30,990		30,558		30,924		30,792
Earnings per common share—Basic
Net income	$	88,351	$	61,068	$	190,942	$	133,962
Less: Undistributed earnings allocated to RSAs	—		(41)		(41)		(90)
Net income available to common shareholders—Basic	$	88,351	$	61,027	$	190,901	$	133,872

Net income per common share—Basic	$	2.85	$	2.00	$	6.17	$	4.35

Basic weighted-average common shares outstanding	30,990		30,537		30,917		30,771
Effect of diluted shares	1,096		1,038		1,129		1,093
Diluted weighted-average shares outstanding	32,086		31,575		32,046		31,864

Net income per common share—Diluted	$	2.75	$	1.93	$	5.96	$	4.20

Contract Assets and Contract Liabilities (Tables)

6 Months Ended

Jun. 30, 2024

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
	June 30, 2024		December 31, 2023
Accounts receivable	$	292,189	$	275,932
Unbilled receivables	8,919		22,475
Less: allowance for doubtful accounts	—		(7)
Total accounts receivable and unbilled, net	$	301,108	$	298,400

Advanced billings consisted of the following (in thousands):


	As of
	June 30, 2024		December 31, 2023
Advanced billings	$	638,417	$	559,860

Intangible Assets, Net (Tables)

6 Months Ended

Jun. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets, Net

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


	As of
	June 30, 2024		December 31, 2023
Intangible assets:
Finite-lived intangible assets:
Carrying amount:
Customer relationships	145,051		145,051
Accumulated amortization:
Customer relationships	(141,610)		(140,888)
Total finite-lived intangible assets, net	3,441		4,163
Trade name (indefinite-lived)	31,646		31,646
Total intangible assets, net	$	35,087	$	35,809

Schedule of Estimated Amortization Expense of Intangible Assets

As of June 30, 2024, estimated amortization expense of the Company’s intangible assets for each of the next five years is as follows (in thousands):


	Amortization
Remainder of 2024	$	721
2025	946
2026	620
2027	577
2028	577
	$	3,441

Accrued Expenses (Tables)

6 Months Ended

Jun. 30, 2024

Payables and Accruals [Abstract]

Schedule of Accrued Expenses

Accrued expenses consisted of the following (in thousands):


	As of
	June 30, 2024		December 31, 2023
Employee compensation and benefits	$	64,238	$	75,822
Project related reimbursable expenses	219,126		205,864
Other	9,295		11,275
Total accrued expenses	$	292,659	$	292,961

Leases (Tables)

6 Months Ended

Jun. 30, 2024

Leases [Abstract]

Summary of Components of Lease Expense

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Operating lease cost	$	7,903	$	6,954	$	15,768	$	13,635
Variable lease cost	2,735		1,835		5,401		4,172

Summary of Supplemental Cash Flow Information Related to Leases

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


	Six Months Ended June 30,
	2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	11,565	$	9,599

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	2,222		10,061

Summary of Supplemental Balance Sheet Information Related to Leases

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


	As of
	June 30, 2024			December 31, 2023
Operating lease right-of-use assets - related parties	$	78,999		$	83,065
Operating lease right-of-use assets - non-related parties	55,002			61,736
Operating lease right-of-use assets	$	134,001		$	144,801

Other current liabilities - related parties	6,021			5,730
Other current liabilities - non-related parties	15,908			16,635
Other current liabilities	$	21,929		$	22,365

Operating lease liabilities - related parties	87,462			90,568
Operating lease liabilities - non-related parties	44,334			51,554
Operating lease liabilities	131,796			142,122
Total operating lease liabilities	$	153,725		$	164,487

Weighted Average Remaining Lease Term (years)
Operating leases	9.9			10.0
Weighted Average Discount Rate
Operating leases	5.7		%	5.6		%

Schedule of Lease Payments Due Related To Lease Liabilities

Lease payments due related to lease liabilities as of June 30, 2024 were as follows (in thousands):


	Related Party Operating Leases		Non-Related Parties Operating Leases		Total Operating Leases
Remainder of 2024	$	5,728	$	8,882	$	14,610
2025	11,607		17,231		28,838
2026	11,807		14,207		26,014
2027	10,839		11,108		21,947
2028	8,609		6,320		14,929
Later years	91,669		9,599		101,268
Total lease payments	140,259		67,347		207,606
Less: imputed interest	(46,776)		(7,105)		(53,881)
Total	$	93,483	$	60,242	$	153,725

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

6 Months Ended

Jun. 30, 2024

Equity [Abstract]

Schedule of Stock Option Activity

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


	Six Months Ended June 30, 2024
	Stock Options	Weighted Average Exercise Price
Outstanding - beginning of period	1,343,287	$	100.75
Granted	5,718	$	393.30
Exercised	(164,822)	$	50.52
Cancelled/Forfeited/Expired	(2,953)	$	223.78
Outstanding - end of period	1,181,230	$	108.87

Exercisable - end of period	874,891	$	90.34

Schedule of RSA/RSU Activity

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


			Six Months Ended June 30, 2024
			Shares/Units
Outstanding and unvested - beginning of period			390,998
Granted			2,991
Vested			(84,435)
Forfeited			(13,053)
Outstanding and unvested - end of period			296,501

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 June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Total direct costs	$	2,308	$	2,558	$	4,778	$	5,498
Selling, general and administrative	1,280		2,348		3,120		4,846
Total stock-based compensation expense	$	3,588	$	4,906	$	7,898	$	10,344

Entity Wide Disclosures (Tables)

6 Months Ended

Jun. 30, 2024

Entity Wide Disclosures [Abstract]

Summary of Revenue by Major Source

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Therapeutic Area
Oncology	$	162,952	$	147,089	$	318,150	$	289,040
Other	112,432		101,055		220,832		188,159
Metabolic	106,302		87,860		209,941		174,700
Cardiology	60,699		51,130		116,336		97,747
Central Nervous System	46,519		37,726		90,655		76,423
AVAI	39,200		36,008		83,234		68,873
Total revenue	$	528,104	$	460,868	$	1,039,148	$	894,942

Basis of Presentation - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2022
Basis Of Presentation [Line Items]
Payments for repurchase of common stock			$ 0	$ 144,020
2022 Share Repurchase Program
Basis Of Presentation [Line Items]
Repurchases of common stock (in shares)	0	126,281	0	781,068
Payments for repurchase of common stock		$ 23,900		$ 144,000
Remaining amount of repurchase program	$ 308,800		$ 308,800
2022 Share Repurchase Program \| Maximum
Basis Of Presentation [Line Items]
Stock repurchase program, authorized amount					$ 500,000

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				6 Months Ended
	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2024	Jun. 30, 2023
Weighted-average shares:
Weighted average number of shares outstanding, basic (in shares)	30,990		30,537		30,917	30,771
Total weighted average shares outstanding, basic (in shares)	30,990		30,558		30,924	30,792
Earnings per common share—Basic
Net income	$ 88,351	$ 102,591	$ 61,068	$ 72,894	$ 190,942	$ 133,962
Net income available to common shareholders—Basic	$ 88,351		$ 61,027		$ 190,901	$ 133,872
Net income per common share, Basic (in dollars per share)	$ 2.85		$ 2.00		$ 6.17	$ 4.35
Basic weighted-average common shares outstanding (in shares)	30,990		30,537		30,917	30,771
Effect of diluted shares (in shares)	1,096		1,038		1,129	1,093
Diluted weighted-average shares outstanding (in shares)	32,086		31,575		32,046	31,864
Net income per common share, Diluted (in dollars per share)	$ 2.75		$ 1.93		$ 5.96	$ 4.20
RSAs
Weighted-average shares:
Weighted average number of shares outstanding, basic (in shares)	0		21		7	21
Earnings per common share—Basic
Less: Undistributed earnings allocated to RSAs	$ 0		$ (41)		$ (41)	$ (90)
Basic weighted-average common shares outstanding (in shares)	0		21		7	21
Common Stock
Weighted-average shares:
Weighted average number of shares outstanding, basic (in shares)	30,990		30,537		30,917	30,771
Earnings per common share—Basic
Basic weighted-average common shares outstanding (in shares)	30,990		30,537		30,917	30,771

Net Income Per Share - Narrative (Details) - shares	3 Months Ended	6 Months Ended
Net Income Per Share - Narrative (Details) - shares	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Stock Options
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of diluted EPS (in shares)	16,700	4,800	16,700

Contract Assets and Contract Liabilities - Summary of Accounts Receivable and Unbilled, Net (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Revenue from Contract with Customer [Abstract]
Accounts receivable	$ 292,189	$ 275,932
Unbilled receivables	8,919	22,475
Less: allowance for doubtful accounts	0	(7)
Total accounts receivable and unbilled, net	$ 301,108	$ 298,400

Contract Assets and Contract Liabilities - Summary of Advanced Billings (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Revenue from Contract with Customer [Abstract]
Advanced billings	$ 638,417	$ 559,860

Contract Assets and Contract Liabilities - Narrative (Details) - USD ($) $ in Billions	Jun. 30, 2024	Dec. 31, 2023
Revenue from Contract with Customer [Abstract]
Performance obligations remaining to be performed	$ 3.2	$ 2.9

Intangible Assets, Net - Schedule of Intangible Assets, Net (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Accumulated amortization:
Total finite-lived intangible assets, net	$ 3,441	$ 4,163
Trade name (indefinite-lived)	31,646	31,646
Total intangible assets, net	35,087	35,809
Customer Relationships
Finite-lived intangible assets:
Finite-lived intangible assets, gross	145,051	145,051
Accumulated amortization:
Total accumulated amortization	$ (141,610)	$ (140,888)

Intangible Assets, Net - Schedule of Estimated Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Remainder of 2024	$ 721
2025	946
2026	620
2027	577
2028	577
Total finite-lived intangible assets, net	$ 3,441	$ 4,163

Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Payables and Accruals [Abstract]
Employee compensation and benefits	$ 64,238	$ 75,822
Project related reimbursable expenses	219,126	205,864
Other	9,295	11,275
Total accrued expenses	$ 292,659	$ 292,961

Short-Term Debt (Details) - USD ($) $ in Millions	Mar. 28, 2024	Jun. 30, 2024	Dec. 31, 2023	Mar. 31, 2023	Sep. 30, 2019
Debt Instrument [Line Items]
Outstanding letters of credit (less than)		$ 0.1	$ 0.1
Credit facility
Debt Instrument [Line Items]
Aggregate principal amount borrowed under line of credit facility	$ 10.0			$ 150.0
Credit facility \| Secured Overnight Financing Rate (SOFR)
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)	6 Months Ended
Leases - Narrative (Details)	Jun. 30, 2024
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	16 years
Maximum \| Real Estate and Equipment
Lessee Lease Description [Line Items]
Lease renewal term, operating lease	20 years
Operating lease, options to terminate lease term	1 year

Leases - Summary of Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Leases [Abstract]
Operating lease cost	$ 7,903	$ 6,954	$ 15,768	$ 13,635
Variable lease cost	$ 2,735	$ 1,835	$ 5,401	$ 4,172

Leases - Summary of Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ 11,565	$ 9,599
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$ 2,222	$ 10,061

Leases - Summary of Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Leases, Supplemental Balance Sheet Information [Line Items]
Operating lease right-of-use assets	$ 134,001	$ 144,801
Other current liabilities	$ 21,929	$ 22,365
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Other current liabilities	Other current liabilities
Operating lease liabilities	$ 131,796	$ 142,122
Total operating lease liabilities	$ 153,725	$ 164,487
Weighted Average Remaining Lease Term (years)
Operating leases	9 years 10 months 24 days	10 years
Weighted Average Discount Rate
Operating leases	5.70%	5.60%
Related Party
Leases, Supplemental Balance Sheet Information [Line Items]
Operating lease right-of-use assets	$ 78,999	$ 83,065
Other current liabilities	6,021	5,730
Operating lease liabilities	87,462	90,568
Total operating lease liabilities	93,483
Nonrelated Party
Leases, Supplemental Balance Sheet Information [Line Items]
Operating lease right-of-use assets	55,002	61,736
Other current liabilities	15,908	16,635
Operating lease liabilities	44,334	$ 51,554
Total operating lease liabilities	$ 60,242

Leases - Schedule of Lease Payments Due Related To Lease Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Operating Lease Liabilities Payments Due [Line Items]
Remainder of 2024	$ 14,610
2025	28,838
2026	26,014
2027	21,947
2028	14,929
Later years	101,268
Total lease payments	207,606
Less: imputed interest	(53,881)
Total	153,725	$ 164,487
Related Party
Operating Lease Liabilities Payments Due [Line Items]
Remainder of 2024	5,728
2025	11,607
2026	11,807
2027	10,839
2028	8,609
Later years	91,669
Total lease payments	140,259
Less: imputed interest	(46,776)
Total	93,483
Nonrelated Party
Operating Lease Liabilities Payments Due [Line Items]
Remainder of 2024	8,882
2025	17,231
2026	14,207
2027	11,108
2028	6,320
Later years	9,599
Total lease payments	67,347
Less: imputed interest	(7,105)
Total	$ 60,242

Shareholder's Equity and Stock-Based Compensation - Narrative (Details)	6 Months Ended
	Jun. 30, 2024 shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options, granted (in shares)	5,718
2016 Incentive Award Plan \| Non Employee Directors
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options, granted (in shares)	5,718
2016 Incentive Award Plan \| Granted to Employees
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Awards granted to employees (in shares)	2,991
2016 Incentive Award Plan \| Restricted Stock Units (RSU) \| Vesting After Five Years
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares granted (in shares)	2,491
Award vesting period	5 years
2016 Incentive Award Plan \| Restricted Stock Units (RSU) \| Vesting After Four Years
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares granted (in shares)	500
Award vesting period	4 years

Shareholder's Equity and Stock-Based Compensation - Schedule of Stock Option Activity (Details)	6 Months Ended
	Jun. 30, 2024 $ / shares shares
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding [Roll Forward]
Options outstanding, beginning of period (in shares) \| shares	1,343,287
Options granted (in shares) \| shares	5,718
Options exercised (in shares) \| shares	(164,822)
Options cancelled/forfeited/expired (in shares) \| shares	(2,953)
Options outstanding, end of period (in shares) \| shares	1,181,230
Options exercisable, end of period (in shares) \| shares	874,891
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract]
Options outstanding, beginning of period (in dollars per share) \| $ / shares	$ 100.75
Options granted (in dollars per share) \| $ / shares	393.30
Options exercised (in dollars per share) \| $ / shares	50.52
Options cancelled/forfeited/expired (in dollars per share) \| $ / shares	223.78
Options outstanding, end of period (in dollars per share) \| $ / shares	108.87
Options exercisable, end of period (in dollars per share) \| $ / shares	$ 90.34

Shareholder's Equity and Stock-Based Compensation - Schedule of RSA/RSU Activity (Details) - RSA/RSU	6 Months Ended
	Jun. 30, 2024 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)	390,998
Granted (in shares)	2,991
Vested (in shares)	(84,435)
Forfeited (in shares)	(13,053)
Outstanding and unvested - end of period (in shares)	296,501

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		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	$ 3,588	$ 4,906	$ 7,898	$ 10,344
Total direct costs
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	2,308	2,558	4,778	5,498
Selling, general and administrative
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	$ 1,280	$ 2,348	$ 3,120	$ 4,846

Income Taxes - Narrative (Details)	3 Months Ended		6 Months Ended
Income Taxes - Narrative (Details)	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Income Tax Disclosure [Abstract]
Effective income tax rate	20.00%	19.40%	14.50%	17.20%
U.S. statutory rate	21.00%		21.00%

Commitments and Contingencies - Narrative (Details) $ in Millions	6 Months Ended
	Jun. 30, 2024 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Minimum purchase commitments for project related supplies	$ 14.9

Related Party Transactions (Details) $ in Thousands	3 Months Ended			6 Months Ended
Related Party Transactions (Details) $ in Thousands	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Mar. 31, 2023 renewal_option	Jun. 30, 2024 USD ($) renewal_option	Jun. 30, 2023 USD ($)	Dec. 31, 2023 USD ($)
Related Party Transaction [Line Items]
Total revenue	$ 528,104	$ 460,868		$ 1,039,148	$ 894,942
Advanced billings	638,417			638,417		$ 559,860
Accounts receivable and unbilled, net	301,108			301,108		298,400
Prepaid expenses and other current assets	60,521			60,521		49,979
Operating lease cost	7,903	6,954		15,768	13,635
Operating lease right-of-use assets	134,001			134,001		144,801
Other current liabilities	21,929			21,929		22,365
Operating lease liabilities	131,796			131,796		142,122
Accounts payable	27,388			27,388		31,869
Related Party
Related Party Transaction [Line Items]
Total revenue	11,200	13,300		24,000	29,100
Advanced billings	10,800			10,800		10,100
Accounts receivable and unbilled, net	2,700			2,700		2,400
Prepaid expenses and other current assets	300			300		300
Operating lease right-of-use assets	78,999			78,999		83,065
Other current liabilities	6,021			6,021		5,730
Operating lease liabilities	87,462			87,462		90,568
Accounts payable	400			400		3,100
Employee Loans \| Related Party
Related Party Transaction [Line Items]
Prepaid expense and other assets	300			300		300
Service Agreement \| Related Party \| LIB
Related Party Transaction [Line Items]
Total revenue	3,900	9,700		10,400	23,000
Advanced billings	6,400			6,400		7,600
Accounts receivable and unbilled, net	400			400		500
Service Agreement \| Related Party \| CinRx Pharma and Subsidiaries
Related Party Transaction [Line Items]
Total revenue	7,300	3,600		13,600	6,100
Advanced billings	4,400			4,400		2,500
Accounts receivable and unbilled, net	2,300			2,300		1,900
Prepaid expenses and other current assets	300			300		200
Service Agreement \| Related Party \| The Summit
Related Party Transaction [Line Items]
Operating expenses	100	100		200	200
Leased Real Estate \| Chief Executive Officer
Related Party Transaction [Line Items]
Term of lease			10 years
Number of lease renewal options \| renewal_option			1
Lease term upon renewal			10 years
Operating lease cost	700	700		1,400	1,300
Operating lease right-of-use assets	18,500			18,500		19,300
Other current liabilities	1,600			1,600		1,500
Operating lease liabilities	$ 17,300			$ 17,300		18,100
Leased Real Estate \| Related Party \| Chief Executive Officer And Immediate Family \| Office Space
Related Party Transaction [Line Items]
Number of lease renewal options \| renewal_option				2
Lease term upon renewal	10 years			10 years
Operating lease cost	$ 1,400	1,400		$ 2,800	2,800
Operating lease right-of-use assets	51,000			51,000		51,900
Other current liabilities	1,400			1,400		1,300
Operating lease liabilities	$ 62,800			$ 62,800		63,500
First Leased Office Space \| Related Party \| Chief Executive Officer And Immediate Family \| Building
Related Party Transaction [Line Items]
Number of lease renewal options \| renewal_option				1
Lease term upon renewal	10 years			10 years
Operating lease cost	$ 700	700		$ 1,300	1,300
Operating lease right-of-use assets	7,500			7,500		8,500
Other current liabilities	2,100			2,100		2,100
Operating lease liabilities	$ 5,300			$ 5,300		6,400
Second Leased Office Space \| Related Party \| Chief Executive Officer And Immediate Family \| Building
Related Party Transaction [Line Items]
Number of lease renewal options \| renewal_option				1
Lease term upon renewal	10 years			10 years
Operating lease cost	$ 800	200		$ 1,500	500
Operating lease right-of-use assets	2,000			2,000		3,400
Other current liabilities	900			900		900
Operating lease liabilities	2,000			2,000		2,500
Travel Services \| Chief Executive Officer
Related Party Transaction [Line Items]
Travel expenses with related party	700	$ 400		1,000	$ 800
Travel Services \| Related Party
Related Party Transaction [Line Items]
Accounts payable	$ 300			$ 300		$ 400

Entity Wide Disclosures - Summary of Revenue by Major Source (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Disaggregation Of Revenue [Line Items]
Total revenue	$ 528,104	$ 460,868	$ 1,039,148	$ 894,942
Oncology
Disaggregation Of Revenue [Line Items]
Total revenue	162,952	147,089	318,150	289,040
Other
Disaggregation Of Revenue [Line Items]
Total revenue	112,432	101,055	220,832	188,159
Metabolic
Disaggregation Of Revenue [Line Items]
Total revenue	106,302	87,860	209,941	174,700
Cardiology
Disaggregation Of Revenue [Line Items]
Total revenue	60,699	51,130	116,336	97,747
Central Nervous System
Disaggregation Of Revenue [Line Items]
Total revenue	46,519	37,726	90,655	76,423
AVAI
Disaggregation Of Revenue [Line Items]
Total revenue	$ 39,200	$ 36,008	$ 83,234	$ 68,873