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DATE
Thursday, April 23, 2026 at 9 a.m. ET
CALL PARTICIPANTS
- Chief Executive Officer — August James Troendle
- President — Jesse J. Geiger
- Chief Financial Officer — Kevin M. Brady
- Director of Investor Relations — Lauren Morris
TAKEAWAYS
- Revenue -- $706.6 million, a 26.5% year-over-year increase, with constant currency growth at 25.8%.
- Net New Business Awards -- $618.4 million, up 23.7%, resulting in a net book-to-bill ratio of 0.88.
- Ending Backlog -- Approximately $2.9 billion, up 2.9%, with $1.94 billion expected to convert to revenue over the next 12 months and 23.3% backlog conversion in the quarter.
- EBITDA -- $149.4 million, up 25.9%; constant currency EBITDA growth was 28.6%.
- EBITDA Margin -- 21.1%, compared to 21.2% in the prior year period, as higher reimbursable costs were offset primarily by lower employee-related costs.
- Net Income -- $123.9 million, an 8.1% increase, with net income per diluted share at $4.28 versus $3.67.
- Cash Flow from Operating Activities -- $151.8 million.
- Cash on Balance Sheet -- $652.7 million as of March 31, 2026.
- Customer Concentration -- Top five customers represented 28%, and top ten represented 37% of revenue for the last twelve months.
- Pass-Through Revenues -- Reached about 44% of revenue in the quarter; expected to decline as metabolic studies wind down.
- Guidance -- Full-year ranges for revenue, EBITDA, net income, and EPS remain unchanged, assuming a 19%-20% tax rate and $27.5 million in interest income; no additional share repurchases included in guidance.
- Backlog Cancellations -- Highest in over a year, primarily affecting oncology and cardiovascular therapeutic areas; not attributed to macroeconomic or funding factors.
- Win Rate -- Management described win rate and initial award notifications as "strong" for the quarter, with enhancements underway to further improve performance in upcoming quarters.
- RFP Volume -- Sequentially and year-over-year decline in request-for-proposal (RFP) volume, but management emphasized quality over count.
- Hiring -- Continued hiring despite cancellations and softer gross wins, reflecting management's confidence.
- Pre-Backlog -- Pre-backlog pool increased during the quarter, though not quantified; historically it has been comparable in size to backlog.
- SG&A Efficiencies -- "Because of improved retention rates we continue to see efficiencies," with slower improvement pace but "expect margins to remain in a very good spot at the midpoint of guidance."
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RISKS
- Cancellations rose to the highest level in over a year, impacting net bookings and described as exerting "pressure on our book-to-bill," with several meaningful cancellations in oncology and cardiovascular.
- CEO Troendle said, "Looking at Q1 versus the remainder of the year, we do not have sequential revenue growth. We will on a year-over-year basis, but not sequentially. As for 2027, it is too far out to get a handle on. Our sequential growth profile now and over the next six months is a real question."
- CFO Brady stated, "Future cancellations could potentially impact that because cancellations can have a near-term impact."
- "Acquisitions are not good for us," said Troendle regarding biopharma M&A exposure, noting that Medpace Holdings (MEDP 22.63%) is "are cut out of future work." post-acquisition.
SUMMARY
Management maintained full-year guidance for revenue, EBITDA, net income, and EPS, expressing confidence in current modeling despite higher-than-usual backlog cancellations and a sub-one book-to-bill. The company continues to see strong win rates and improvements in its opportunity pipeline, though gross bookings and RFP volumes declined. SG&A efficiencies were recognized, attributed to improved employee retention and ongoing hiring aligned with forecasted needs.
- Pre-backlog authorizations increased in the quarter, providing future visibility though the company does not formally quantify this pipeline.
- Approximately 50% of obesity work remains GLP-1 related; CEO Troendle stated, "GLP-1 is actually a pretty safe therapeutic area for us, and things are going fine."
- Management does not expect a net productivity benefit from AI initiatives over the next two years, as investments will outpace near-term gains.
- Pass-through revenues as a percentage of total revenue were particularly elevated and are anticipated to decrease as specific clinical studies conclude.
- Sequential revenue growth is not projected over the next six months absent improvement in pipeline or gross awards, with management acknowledging "area for concern" for backlog coverage beyond one year.
INDUSTRY GLOSSARY
- Book-to-Bill Ratio: Ratio of net new business awards to recognized revenue in a period, used to gauge future growth trajectory.
- Backlog: Total value of awarded business not yet recognized as revenue, providing visibility into future contracted work.
- Pre-Backlog: Pool of client-authorized awards that have not yet commenced and are not included in current backlog metrics.
- Pass-Through Revenue: Reimbursable study costs such as third-party investigator fees that are billed directly to clients with limited margin impact.
- GLP-1: Glucagon-like peptide-1, a class of drugs primarily developed for obesity and diabetes clinical studies.
Full Conference Call Transcript
Lauren Morris: Good morning, and thank you for joining Medpace Holdings, Inc.’s first quarter 2026 earnings conference call. Also on the call today is our CEO, August James Troendle, our President, Jesse J. Geiger, and our CFO, Kevin M. Brady. Before we begin, I would like to remind you that our remarks and responses to your questions during this teleconference may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve inherent assumptions with known and unknown risks and uncertainties, as well as other important factors that could cause actual results to differ materially from our current expectations. These factors are discussed in our Form 10-K and other filings with the SEC.
We undertake no obligation to update forward-looking statements even if estimates change. Accordingly, you should not rely on any of today’s forward-looking statements as representing our views as of any date after today. During this call, we will also be referring to certain non-GAAP financial measures. These non-GAAP measures are not superior to or replacements for the comparable GAAP measures, but we believe these measures help investors gain a more complete understanding of results. A reconciliation of such non-GAAP financial measures to the most directly comparable GAAP measures is available in our earnings press release and earnings call presentation slides provided in connection with today’s call. The slides are available in the Investor Relations section of our website at medpace.com.
With that, I would now like to turn the call over to August James Troendle.
August James Troendle: Good day, everyone. Before reviewing Q1 results, I would like to acknowledge that this will be our last earnings call with Jesse J. Geiger, our President. I would like to thank Jesse for his eighteen and a half years of service. Thank you, Jesse. 2026 saw cancellations rise again with backlog cancels reaching their highest point in over a year. Net bookings were below the level seen in Q4, but well above those in Q1 2025 with a net book-to-bill ratio of 0.88. RFPs were down in the quarter sequentially and year over year. Initial award notifications and win rate were strong. We continue to view the quality of opportunity flow as good.
While there is nothing we can do to alter our cancellation rate, we are focused on expanding our pipeline of opportunities and have implemented a number of initiatives to improve our win rate. Jesse will now comment on Q1.
Jesse J. Geiger: Good morning, everyone. Revenue for the first quarter of 2026 was $706.6 million, which represents a year-over-year increase of 26.5%. Net new business awards entering backlog in the first quarter increased 23.7% from the prior year to $618.4 million, resulting in the 0.88 net book-to-bill. Ending backlog as of 03/31/2026 was approximately $2.9 billion, an increase of 2.9% from the prior year. We project that approximately $1.94 billion of backlog will convert to revenue in the next twelve months, and backlog conversion in the first quarter was 23.3% of beginning backlog. Now, before I turn the call over to Kevin, I want to add that it has been a true honor to serve the company all of these years.
I wish all of my Medpace Holdings, Inc. colleagues well, and I am so proud of what we have accomplished together. With that, I will turn the call over to Kevin. Kevin?
Kevin M. Brady: Thank you, Jesse, and good morning to everyone listening in. As Jesse mentioned, revenue was $706.6 million in the first quarter of 2026. This represented a year-over-year increase of 26.5% on a reported basis and 25.8% on a constant currency basis. EBITDA of $149.4 million increased 25.9% compared to $118.6 million in the first quarter of 2025. On a constant currency basis, first quarter EBITDA increased 28.6% compared to the prior year. EBITDA margin for the first quarter was 21.1%, compared to 21.2% in the prior year period, as the impact of higher reimbursable costs was offset primarily by lower employee-related costs.
In the first quarter of 2026, net income of $123.9 million increased 8.1% compared to net income of $114.6 million in the prior year period. Net income growth below EBITDA growth was primarily driven by a higher effective tax rate in the quarter. Net income per diluted share for the quarter was $4.28, compared to $3.67 in the prior year period. Regarding customer concentration, our top five and top ten customers represent roughly 28% and 37%, respectively, of our last twelve months’ revenue. In the first quarter, we generated $151.8 million in cash flow from operating activities, and our net days sales outstanding was negative 58.8 days. As of 03/31/2026, we had $652.7 million in cash.
Our 2026 guidance ranges for revenue, EBITDA, net income, and EPS are unchanged from our prior quarter, based on an effective tax rate of 19% to 20% and interest income of $27.5 million. There are no additional share repurchases in our guidance. With that, I will turn the call back over to the operator so we can take questions.
Operator: Thank you. We will now open the call for questions. As a reminder, to ask a question, please press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. One moment for questions. Our first question comes from Maxwell Andrew Smock with William Blair. You may proceed.
Maxwell Andrew Smock: Hi. Good morning, everyone. Thanks for taking our call. Maybe just following up on the cancellations point. August, I know you mentioned the highest that you had seen in about a year. Just wondering if you could dive into the dynamics behind those cancellations. I know last quarter you called out not really macro-related, more project-specific. I am wondering if that was the case here in the first quarter, and then any detail you can provide around how cancellations have trended so far in the second quarter? And just any other drivers in terms of therapeutic modality, indication, any themes behind outsized cancellations that you saw here in the first quarter? Thank you.
August James Troendle: Sure. Hi, Max. Cancellations were again just the kind of random items you would expect: product performance, reprioritization, etc. It was not particularly informed by acute financial shortages or anything like that. So it was the usual factors, but higher than we have historically averaged, and it put pressure on our book-to-bill. Cancellations in the quarter were largely in oncology and cardiovascular, which is fairly typical for us. There is really nothing to call out beyond that. For the second quarter, it is too early to get any kind of read on the cancellation rate and whether it is going to be high again in Q2. It is too early to make any assessment.
Maxwell Andrew Smock: Understood. Maybe following up and sticking on the cancellations theme. I think last quarter you also mentioned cancellations were occurring both in terms of your backlog and also in initial awards. A couple of quarters ago, you called out, I think, the initial awards bucket had about $4 billion worth of signed work. Can you provide any update around cancellations out of that bucket in particular and where the size of that bucket is today relative to maybe that $4 billion from a couple of quarters ago? Just trying to get a sense for your visibility and level of confidence into that initial awards bucket converting into backlog moving forward.
August James Troendle: We are not going to get into quantifying our pipeline size. We have never quantified that. Cancellations in that initial awards bucket were not particularly elevated in Q1. It was more backlog-related cancellations that were problematic for us. I do not think that impairs our future items rolling into backlog. The last couple of quarters of higher cancellations overall, including in that pre-backlog bucket in prior periods, does influence things, but that was not a particular factor this quarter. Obviously, higher cancellations take away from total revenue opportunities in the year, but with a reduction in cancellations, if we hopefully see that, conversion can proceed at a more normalized rate.
Operator: Thank you. Our next question comes from David Howard Windley with Jefferies. You may proceed.
David Howard Windley: Hi. Thanks for taking my question. Good morning. I wanted to clarify on the cancellations, a follow-up to Max’s question. August, you said oncology and cardiovascular. I believe you all would treat cardiovascular independent of metabolic, and I just wanted to make sure I heard that right and that we are interpreting that correctly. So metabolic cancellations were actually not part of your callout. Is that correct?
August James Troendle: That is correct. We break out our therapeutic areas in our earnings release and in the presentation deck, and cardiovascular is separate from metabolic. There can be overlap in certain programs, but we do break them out separately.
David Howard Windley: A market concern is that metabolic has been a significant revenue growth driver, as evidenced by the pie chart you include in the deck. I think the callout on the fairly sizable cancellation that shaded down net bookings last quarter was metabolic. Do you have a GLP-1 concentration that is becoming more volatile, perhaps because of changes in price or market dominance by a couple of players that would cause biotech to think twice about pursuing GLP-1s? Could you provide color on whether you have that exposure?
August James Troendle: We have talked about roughly 50% of our obesity work being GLP-1 related. There is a fair amount of work there, but I do not see it as more volatile. For new opportunities, there may be some truth to the market becoming a bit saturated and competitive and pricing-sensitive, but it has not resulted in higher cancellations, even in pre-backlog. Historically, metabolic has the lowest cancellation rate as a percent of opening backlog among the therapeutic areas we break out. Metabolic was higher last quarter because it is a large category and had a slight uptick, while oncology had a downtick in percentage. Generally, oncology is riskier and has more cancellations.
GLP-1 is actually a pretty safe therapeutic area for us, and things are going fine.
David Howard Windley: That is helpful. On revenue guidance and cadence, given the immediacy of your bookings recognition to revenue—when you recognize a booking the project is already going—and you are highlighting higher cancellations and a sub-one book-to-bill, yet maintaining revenue guidance. Perhaps you or Kevin could speak to the durability or the ability to hold revenue where it is despite backlog not really growing.
August James Troendle: Under 606, revenue timing is tough. We have not been great at predicting when pass-through investigator costs will hit, and they have been a larger portion lately. That is always at risk, but our current modeling is that we will be within our guidance range on revenue despite the cancellations. Certainly, we have to worry about future cancellations.
Kevin M. Brady: Dave, you are exactly right. Despite the headwind from cancellations we saw in the first quarter, we feel very good about the range we have out there, which is why we reconfirmed guidance. Future cancellations could potentially impact that because cancellations can have a near-term impact, but right now we feel good about the guidance ranges.
Operator: Our next question comes from Ann Kathleen Hynes with Mizuho. You may proceed.
Ann Kathleen Hynes: Great. Thank you, and good luck, Jesse. On the gross bookings side, can you give us what gross bookings grew and if it was in line with your internal expectations?
August James Troendle: We do not break out gross bookings; we just report net bookings.
Ann Kathleen Hynes: But directionally, was it?
August James Troendle: Directionally, gross awards were on the low end. It was not overwhelmingly cancellations that drove us down from what would have been a great book-to-bill. New gross awards were also on the low end, so it was a combination of both cancellations and weak gross bookings, obviously impacted by prior pre-backlog cancellations in the past.
Ann Kathleen Hynes: There is a lot of biopharma M&A with big pharma buying biotech. How should we view your exposure to that going forward? If a big pharma purchases one of your biotech clients, what happens to current trials?
August James Troendle: That is frustrating and happens all the time. Generally speaking, we are cut out of future work. Usually, the ongoing work we continue with, although there are cases where they fold that into their current provider or internal resources. Acquisitions are not good for us, but we have a very broad portfolio of clients, and it is something we work around.
Operator: Our next question comes from Charles Rhyee with TD Cowen. You may proceed.
Charles Rhyee: Thanks for taking the question. Following up on Anne’s question, would you attribute any of the heightened level of cancellations as a result of past M&A?
August James Troendle: I do not think any of the cancellations we had in the quarter were related to M&A activity. Maybe I am wrong on some small part, but that was not a driver.
Charles Rhyee: Could you give a sense for the mix in the cancellations between drugs canceled in-flight because of futility versus canceled ahead of start because of a change in direction by sponsors?
August James Troendle: We do not track that breakdown because the buckets overlap and are difficult to categorize. Nothing struck us as specifically funding-related, which we are sensitive to. Funding is always one factor, but these categories overlap, so we do not try to break them out.
Charles Rhyee: In the net bookings, is the level of pass-through revenues in the future work at the same rate you are seeing today, or lower?
Kevin M. Brady: In terms of current bookings, there is still some influence of higher pass-throughs. As I mentioned last quarter, I do expect pass-throughs as a percentage of revenue to end the year lower than where we started this year. We were pretty high this quarter at about 44%. I do expect that to come down as some of these metabolic studies wind down, but it depends on future work and bookings as well.
Operator: Our next question comes from Eric White Coldwell with Baird. You may proceed.
Eric White Coldwell: I will hit this cancel topic a different way. If cancels were average this quarter—understanding gross awards were lower than you would like—what book-to-bill would we have been looking at?
August James Troendle: I have not done that math, but directionally it would still have been weak, somewhere around one, I would assume. It was not just massive cancellations that knocked us down from a great 1.15 to 0.88. It was a mixture of the two.
Eric White Coldwell: Sometimes these rates are impacted by one or two larger cancels. What would be the quantum? Was it one largest cancel, or was it several?
August James Troendle: It was several—two, three. There was not one outsized cancellation that drove it. Some were meaningful in size, but no single cancellation dominated.
Eric White Coldwell: One last thing. Your backlog shows a next-twelve-month revenue visibility figure and a total backlog figure. Over time, subtracting the NTM from total, we have seen a deterioration in the backlog coverage beyond one year for six consecutive quarters. Walk us through why there is not a looming “patent cliff”-like dynamic a year plus away that could upend the revenue growth profile. Are you concerned about this, and what would it take to get that number going back up?
August James Troendle: There is area for concern. Several quarters back it was not a concern because our pre-backlog was growing fast and I thought cancellations were coming down. That has not happened. Cancellations have continued at a much higher rate in both backlog and pre-backlog. It results in us facing a tougher revenue trajectory. Looking at Q1 versus the remainder of the year, we do not have sequential revenue growth. We will on a year-over-year basis, but not sequentially. As for 2027, it is too far out to get a handle on. Our sequential growth profile now and over the next six months is a real question.
We need either cancellations to abate or gross awards to improve—bigger pipeline and better win rates—which is why we are focused on expanding the pipeline and accommodating what could be a higher cancellation rate than historical. I cannot dodge it—sequential growth is not projected at what we would consider a reasonable rate without improvement in one of those factors.
Operator: Our next question comes from Jailendra P. Singh with Truist Securities. You may proceed.
Jailendra P. Singh: Good morning, and thanks for taking my questions. On RFP trends, you said they were down year over year. Can you elaborate? Any particular areas of weakness? With biotech funding remaining stable over the past eight or nine months, it is surprising to see RFP weakness. Any more color?
August James Troendle: It is hard to categorize by sector or therapeutic area. I do not pay a lot of attention to the numerical RFP counts. The industry focuses on RFPs, so I feel compelled to comment, but the bouncing around in RFPs is overwhelmed by quality. There is also the question of whether more RFPs simply means more CROs are being invited to the same opportunities. Measuring it is difficult. I tend to ignore the numerical value on a sequential basis and focus on the quality of opportunities, which I believe remains high. We have seen deterioration in the past tied to funding problems and scenario-planning RFPs, but I do not see that prevailing now.
The trend in quality is pretty good, so I do not put a lot of stock in the headline count in a given quarter.
Jailendra P. Singh: Do you see the biotech CRO market getting more competitive over the last six months? Some large peers and biotech venture funds are helping secure early-stage work—has that had any impact?
August James Troendle: I do not know the impact. The market is very competitive; I have not seen a large change. Our biggest factor over the last eighteen months has been cancellations. We do think we need to work on our win rate. Whether that is due to increasing competitiveness is hard to measure. Certainly, we would like to win more.
Jailendra P. Singh: Last quarter you mentioned that in 2026 you do not expect a net productivity benefit from AI as investments would offset gains. Given continued advancements, has there been any change in your thinking on potential impact of AI on your business?
August James Troendle: I reiterate what I said before. For AI to yield savings in the next year or two, it would either have to be so transformative as to upend the industry in the short term or be mostly hype. I believe AI has real value, but achieving that value will take a lot of investment. There is low-hanging fruit, but net of investments, we expect to be investing more than we gain over at least the next two years. We are seeing efficiencies in places now, but net benefit is a few years out for us.
Operator: Our next question comes from Luke England Sergott with Barclays. You may proceed.
Analyst: Hey, this is Jake on for Luke. Thanks for the question. I know large pharma is not a big focus for you, but if they spend ahead of patent cliffs and scoop up more biotechs, and assuming their demand is less volatile, when would it make sense to take on more of this work, or will it always make sense to prioritize biotech?
August James Troendle: We have made a strategic decision not to play in large pharma. To be there, you need a very flexible delivery model involving staffing and a lot of functional outsourcing. Large pharma generally expects those services. We have chosen not to do that because we think it detracts from our focus on full-service internal expertise and driving our own efficient clinical development processes, which is of value to virtual and smaller companies. Large pharma tends to focus on incorporating CROs into their systems. It is a different model. It is not unachievable, but it is not for us.
Operator: Our next question comes from Sean Dodge with BMO Capital Markets. You may proceed.
Sean Dodge: Thanks, and good morning. August, you mentioned in your prepared remarks some initiatives you are putting in place to improve your win rate. Could you tell us a bit more about what you are doing there and how quickly those could pull through to impact gross wins?
August James Troendle: I am not going to get into individual items—we would prefer not to broadcast specifics to competitors—but we are very focused on this and see opportunities to expand both our pipeline and win rate to combat higher cancellations and get back to the growth rate we want. In terms of timing, I am hoping over the next few quarters we will see real improvement. We already had a good win rate in Q1, and I am hoping it is sustainable as our enhancements take hold.
Sean Dodge: Taking that and going back to the revenue outlook, you continued to hire in the quarter despite cancellations and softer gross wins. Any more context you can share there? It seems to signal confidence that you will continue to grow revenue. How should we square declining net wins with increased headcount?
August James Troendle: Your interpretation is correct. We are still hiring. That reflects our confidence.
Operator: Our next question comes from Michael Aaron Cherny with Leerink Partners. You may proceed.
Michael Aaron Cherny: Maybe to flip the AI question a different way, August. As you engage with clients, do you see any commercial usage of AI being done by your clients right now? We see new models designed to address clinical trial work and drug discovery. Is any of that factoring into dynamics relative to bookings performance and the slowdown you noted?
August James Troendle: No. I do not think there are real applications our clients are using that affect our provision of services or interaction with them at this time. Everyone uses AI in places, often embedded in other systems, but nothing that is impacting us currently.
Michael Aaron Cherny: I know you said, Kevin, no buyback in the guidance, but given the way the stock has reacted, any thoughts on capacity and capability—not just authorization, but cash flow availability—given the amount of cash on the balance sheet?
Kevin M. Brady: We have authorization in place—over $800 million—and we will continue to execute as we always have and look for opportunities to do that, consistent with our plan and strategy.
Operator: Thank you. As a reminder, to ask a question, please press 11. Our next question comes from Ryan Halstead with RBC. You may proceed.
Ryan Halstead: Morning. Thanks for taking the questions. Going back to SG&A, it looked like there was a pretty nice improvement sequentially. Can you talk about what drove the improvement, and how should we think about SG&A going forward, especially in light of the comments that you are continuing to hire? What are the efficiencies and how should we think about that?
Kevin M. Brady: SG&A was up slightly sequentially. Because of improved retention rates we continue to see efficiencies, probably at a slower pace than we have previously, but we expect margins to remain in a very good spot at the midpoint of guidance. We continue to see some benefit flowing through because of retention, and that is reflected in our guidance.
Ryan Halstead: On cancellations, do you see within cancellations any trials that are suspended and have the potential to restart in the future?
August James Troendle: For both items in backlog and items that have not reached backlog, one of the biggest risks is timing—when something makes it to backlog and when it starts. Sometimes awards happen before funds are raised or as part of sequential studies. There is always the question of delays. Generally, if something is canceled, it is probably dead. Things do not generally come back from the cancel bucket. But there are items that did not make it into backlog in a given quarter that might come in future quarters if delayed. Items put on hold remain in backlog; we do not cancel solely due to a hold. They may restart or eventually cancel.
Operator: Our next question comes from Eric White Coldwell with Baird. You may proceed.
Eric White Coldwell: Thanks for the follow-up. I am curious what level of net bookings dollars you are using internally to help guide the revenue outlook. I know calling quarters is unreasonable, and you do not know what cancels will be at this point, but you do have a forecast. Directionally, where are you steering us over the next quarter or next three quarters?
August James Troendle: Book-to-bill is a poor modeling measure under 606. It can be useful to see if the bucket is filling commensurate with revenue, but you do not model off book-to-bill. You can miss a book-to-bill target because revenue ran up so fast even if bookings exceeded expectations. We are not going to guide to book-to-bill. We hope to have improving bookings over time, and certainly 0.88, where things are contracting, is not something we would expect going forward, but cancellations can drive lower levels occasionally.
Eric White Coldwell: Bookings dollars are important. You just did roughly $618 million in the quarter. Are you internally modeling an increase—$650 million, $700 million? What do you need to be within the revenue guidance range for the year?
August James Troendle: We anticipate an increase, but we are not going to quantify it or guide bookings by quarter. There are no guarantees.
Eric White Coldwell: On pre-backlog, in the past you have given ballparks and said it was comparable to backlog. Any update?
Kevin M. Brady: Because we include items that are authorized but have not moved into the three-year window yet, pre-backlog is generally comparable in size to backlog.
August James Troendle: We have never tried to consistently quantify it due to variability, but historically it has been comparable, and at times larger.
Operator: Our next question comes from Justin D. Bowers with Deutsche Bank. You may proceed.
Justin D. Bowers: Hi. Good morning, everyone. August, to understand the moving parts on gross versus net, it seems like you have grown net bookings 25% year over year, but you are calling out cancellations. On the overall gross environment, was this an RFP dynamic or a win-rate dynamic? It seems like your win rates were okay or stepping up. Were the opportunities just not there in the quarter?
August James Troendle: In the current quarter, our awards were good and our win rate was good. If we had a backlog policy that put anything awarded in a quarter into backlog—as some CROs have done—we would have had a good book-to-bill. We do not do that because those awards are often based on future plans, and there is a lot to be done, including financing. In our client base, there are many moving parts and risk that a study never starts. We only recognize into backlog items that have started. What is actually starting in the quarter is based on items awarded in prior quarters—sometimes as far back as two years.
There is a disconnect between current environment and our bookings; current environment is better reflected in bookings two to three quarters out, with a lag.
Justin D. Bowers: To bridge that, it sounds like awards or wins were good but not starting soon. Is pre-backlog growing?
August James Troendle: Pre-backlog did grow. We are not providing metrics on the size of the growth. We had a good quarter in terms of new authorizations—not in backlog, but clients indicating they plan to use us. If you add up those authorizations, the pool grew in the quarter.
Justin D. Bowers: On those authorizations, how do you risk-adjust the quality of awards? Any change in trends—how well-capitalized or funded these programs are?
August James Troendle: We assess, on a project-by-project basis, the likelihood and timing of progression based on a number of factors, including funding. We do not bucket and track counts by high- versus low-risk categories, but our planning tools probability-adjust opportunities and schedule when we think they will convert to backlog and revenue. I do not have metrics indicating an increase in very-high-risk projects.
Operator: Next question comes from David Howard Windley with Jefferies. You may proceed.
David Howard Windley: Thanks for the follow-up. I want to confirm a few mechanics so we can better explain them. First, you have said an award-to-booking interval could be as short as one to two quarters or as long as a couple of years. Historically, average is maybe three to five quarters—call it about four. Do you agree?
August James Troendle: That is in the ballpark.
David Howard Windley: When you recognize a booking, that is basically coincident with first patient in?
August James Troendle: Yes.
David Howard Windley: So at that point, Medpace Holdings, Inc. has already done a significant amount of setup work that is revenue-recognizable?
August James Troendle: Frequently, yes.
David Howard Windley: In a cancellation where the client decides not to move forward before first patient in, more times than not that is a pre-backlog cancellation, not a backlog cancellation. Correct?
August James Troendle: Correct. Before first patient in, costs are relatively small compared to launching the trial. Items can cancel at any stage up to FPI. Once patients are in, cancellation usually reflects a significant event such as toxicity or lack of efficacy. Before FPI, we often have an LOI or startup task order that covers costs and limits liability.
David Howard Windley: In this quarter, where cancellations of backlog were relatively high and several in number, those are trials that already had patients in and the client chose to cancel, typically due to futility or toxicity?
August James Troendle: Generally product failure, especially in oncology—lack of efficacy or unexpected toxicity. Sometimes things go really well and finish early; you recruit faster, and the total budget ends up lower than bid, effectively reducing backlog.
David Howard Windley: Lastly, different subject: congrats to Jesse on the retirement. August, what is your commitment and view of your own longevity in your current role?
August James Troendle: I am committed to the company and passionately interested in Medpace Holdings, Inc. and its success. I will be here for quite a while. I will retake duties as President as I have in the past. We have a very strong and deep management team. We will eventually fill that spot, but not in the near term. We have plenty of management strength to continue to move Medpace Holdings, Inc. forward.
Operator: I would like to turn the call back over to Lauren Morris for any closing remarks.
Lauren Morris: Yes. Thank you for joining us on today’s call and for your interest in Medpace Holdings, Inc. We look forward to speaking with you again on our second quarter 2026 earnings call.
Operator: Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.
