MEDP earnings analysis
What we found in MEDP's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Medpace reported Q1 2026 revenue of $706.6M, up $148.0M (26.5% y/y) and GAAP diluted EPS of $4.28, beating estimates. Gross margin compressed materially while operating margin held roughly steady; cash generation remained strong with operating cash flow of $151.8M and free cash flow of ~$145.0M. Backlog rose modestly to $2,929.2M (+$83.2M) but net new business awards of $618.4M were below quarter revenue, implying book-to-bill <1.0 and potential near-term booking risk.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Top-line beat and strong y/y growth
- Revenue increased to $706,604,000 for Q1 2026, up $148,034,000 or 26.5% versus $558,570,000 in Q1 2025.
- EPS beat
- GAAP diluted EPS was $4.28 for the quarter (actual), above the $3.87 estimate (earnings release/8-K).
- Strong cash generation / FCF
- Net cash provided by operating activities was $151,788,000 and implied free cash flow (operating cash minus $6,748,000 capex) was $145,040,000 for the quarter.
- Cash and no debt
- Cash and cash equivalents increased to $652,700,000 as of March 31, 2026, and the company reported no indebtedness as of that date.
- Backlog and near-term conversion
- Backlog increased to $2,929,200,000 as of March 31, 2026 (up $83,200,000 vs. March 31, 2025) and the company expects approximately $1,930,000,000 to $1,950,000,000 to convert to revenue over the next 12 months.
- New business awards improved y/y
- Net new business awards were $618,400,000 for the three months ended March 31, 2026 versus $500,000,000 for the three months ended March 31, 2025.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Gross margin compression
- Gross profit was $196,326,000 (revenue $706,604,000 minus total direct costs $510,278,000) implying a gross margin of ~27.8% for Q1 2026 versus ~31.9% in Q1 2025 (178,350,000 gross on $558,570,000), a ~4.1 percentage point decline.
- Net income margin compressed
- Net income of $123,870,000 on revenue of $706,604,000 implies a net margin of ~17.54% vs. ~20.51% in Q1 2025 (net income $114,595,000 on $558,570,000), a ~2.97 pp decline.
- Book-to-bill below 1.0
- Net new business awards of $618,400,000 were less than quarter revenue of $706,604,000 (book-to-bill ≈ 0.876), a signal flagged by market commentary and noted risk to future revenue growth.
- Rising tax provision
- Income tax provision increased to $23,721,000 for Q1 2026 from $3,575,000 in Q1 2025; effective tax rate rose to 16.1% from 3.0% year-over-year, increasing earnings volatility from taxes.
- Reimbursed out-of-pocket cost volatility
- Reimbursed out-of-pocket expenses increased by $109,600,000 to $312,004,000 for Q1 2026, contributing materially to the $130,058,000 increase in total direct costs to $510,278,000.
- Backlog growth modest vs revenue
- Backlog rose by $83,200,000 (2.9%) to $2,929,200,000 as of March 31, 2026, while revenue grew 26.5% y/y, underscoring potential sustainability concerns for revenue growth.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $4.28
- Gross margin
- 27.7972%
- Operating margin
- 20.023%
- Segment
- Metabolic, Oncology, Central Nervous System (CNS), and AVAI drove the y/y revenue increase (company did not disclose per-therapeutic-area revenue) — total revenue up $148,034,000 to $706,604,000.
- Segment
- Net new business awards: $618,400,000 for the three months ended March 31, 2026 vs. $500,000,000 in the prior year period.
- Segment
- Backlog: $2,929,200,000 as of March 31, 2026 (up $83,200,000 vs. March 31, 2025); of that, ~$1,930,000,000 to $1,950,000,000 expected to convert in the next 12 months.
What they said about what is next.
The Form 10-Q does not provide explicit full-year numeric guidance. Management discussion references backlog conversion (expects approximately $1,930,000,000 to $1,950,000,000 to convert to revenue over the next 12 months) and states liquidity/capex expectations. (Separately, management provided FY2026 guidance in an 8-K/press release: revenue $2.755B to $2.855B and GAAP diluted EPS $16.68 to $17.50.)
The filing reads about the same as the one before it.
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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