Medpace Holdings, Inc. reports Q4 and full year 2023 results

Medpace Holdings, Inc. announced financial results for the fourth quarter and full year ended December 31, 2023.

Fourth quarter 2023 financial results
Revenue for the three months ended December 31, 2023 increased 26.5% to $498.4 million, compared to $394.1 million for the comparable prior-year period. On a constant currency basis, revenue for the fourth quarter of 2023 increased 26.0% compared to the fourth quarter of 2022.

Backlog as of December 31, 2023 increased 20.2% to $2,813.0 million from $2,339.6 million as of December 31, 2022. Net new business awards were $614.7 million, representing a net book-to-bill ratio of 1.23x for the fourth quarter of 2023, as compared to $485.1 million for the comparable prior-year period. The Company calculates the net book-to-bill ratio by dividing net new business awards by revenue.

For the fourth quarter of 2023, total direct costs were $361.6 million, compared to total direct costs of $278.4 million in the fourth quarter of 2022. Selling, general and administrative (SG&A) expenses were $42.5 million in the fourth quarter of 2023, compared to SG&A expenses of $33.4 million in the fourth quarter of 2022.

GAAP net income for the fourth quarter of 2023 was $78.3 million, or $2.46 per diluted share, versus GAAP net income of $68.7 million, or $2.12 per diluted share, for the fourth quarter of 2022. This resulted in a net income margin of 15.7% and 17.4% for the fourth quarter of 2023 and 2022, respectively.

EBITDA for the fourth quarter of 2023 increased 19.2% to $95.8 million, or 19.2% of revenue, compared to $80.4 million, or 20.4% of revenue, for the comparable prior-year period. On a constant currency basis, EBITDA for the fourth quarter of 2023 increased 21.3% from the fourth quarter of 2022.

Full year 2023 financial results
Revenue for the year ended December 31, 2023 increased 29.2% to $1,885.8 million, compared to $1,460.0 million for the year ended December 31, 2022. On a constant currency basis, revenue increased 28.9% for the year ended December 31, 2023 compared to the year ended December 31, 2022.

For the year ended December 31, 2023, net new business awards were $2,356.7 million, representing a net book-to-bill ratio of 1.25x, compared to $1,829.5 million for the year ended December 31, 2022.

For the full year 2023, total direct costs were $1,361.3 million, compared to $1,027.6 million in the full year 2022. For the full year 2023, SG&A expenses were $161.4 million, compared to $131.4 million for the full year 2022.

GAAP net income for the full year 2023 was $282.8 million, or $8.88 per diluted share, versus GAAP net income of $245.4 million, or $7.28 per diluted share, for the full year 2022. This resulted in a net income margin of 15.0% and 16.8% for the full year 2023 and 2022, respectively.

EBITDA for the full year 2023 increased 17.7% to $362.5 million, or 19.2% of revenue, compared to $308.1 million, or 21.1% of revenue, for the prior year. On a constant currency basis, EBITDA increased 18.0% for the full year 2023 compared to the full year 2022.

A reconciliation of the Company’s non-GAAP financial measures, including EBITDA and EBITDA margin to the corresponding GAAP measures is provided below.

Balance sheet and liquidity
The Company’s Cash and cash equivalents were $245.4 million at December 31, 2023, and the Company generated $156.4 million in cash flow from operating activities during the fourth quarter of 2023.

For the full year 2023, the Company repurchased 781,068 shares for $144.0 million. There were no share repurchases in the fourth quarter of 2023. As of December 31, 2023, the Company had $308.8 million remaining under its authorized share repurchase program.

2024 financial guidance
The Company forecasts 2024 revenue in the range of $2.150 billion to $2.200 billion, representing growth of 14.0% to 16.7% over 2023 revenue of $1.886 billion. GAAP net income for full year 2024 is forecasted in the range of $326.0 million to $348.0 million. Additionally, full year 2024 EBITDA is expected in the range of $400.0 million to $430.0 million. Based on forecasted 2024 revenue of $2.150 billion to $2.200 billion and GAAP net income of $326.0 million to $348.0 million, diluted earnings per share (GAAP) is forecasted in the range of $10.18 to $10.87. This guidance assumes a full year 2024 tax rate of 16.0% to 17.0%, interest income of $18.4 million, and 32.0 million diluted shares outstanding. This guidance does not include the potential impact of any share repurchases the Company may make pursuant to the share repurchase program after December 31, 2023.
MB Bureau