Q1 2025 Medpace Holdings Inc Earnings Call
Speaker Change: Good day, ladies and gentlemen and welcome to the Medpace First Quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode.
Speaker Change: After the speaker's remarks, there will be a question and answer session.
Speaker Change: If you would like to ask a question, please press star 1-1 on your phone. If your question has been answered and you'd like to remove yourself from the queue
Speaker Change: Simply press star 1-1 again. As a reminder, this call is being recorded. I would now like to introduce your host for today's conference call, Lauren Morris, Medpace's Director of Investor Relations. You may begin.
Lauren Morris: Good morning, and thank you for joining Medpace's first quarter 2025 earnings conference call.
Speaker Change: Also on the call today is our CEO , August Trendle, our president, Jesse Geiger, and our CFO , Kevin 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 Security's Litigation Reform Act of 1995.
Speaker Change: 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 expectation.
Speaker Change: Please note that we assume 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
Speaker Change: During this call, we will also be referring to certain non-GAAP financial measures. These non-GAAP measures are not superior to or replacement for the comparable GAAP measures , but we believe these measures help investors gain a more complete understanding of results.
Speaker Change: A reconciliation of such non-GAAP financial measures to the most directly comparable GAAP measures is available in the earning press release and earnings call presentation slides provided in connection with today's call.
Speaker Change: Dislives are available in the Investor Relations section of our website at investor.medpace.com With that, I would now like to turn the call over to August Trendle.
Good day, everyone.
Speaker Change: Our quarter-one net awards were down sequentially a year-over-year with a net book-to-build ratio of 0.90
Speaker Change: This was primarily a reflection of high pipeline cancellations in prior quarters as previously discussed.
Speaker Change: Backload cancellations were modestly elevated in Q1, but pre-backload cancellations were worse, impacting Q1 and future projected backlog net awards.
Speaker Change: RFP Flow was strong in Q1, but quality has been variable and decisions are slowing.
Speaker Change: We continue to see a path to improved backlog growth reflected in book to go ratios above 1.15 in Q3 and Q4.
Speaker Change: However, this will depend upon moderating cancellations and an improved business climate.
Jesse will now provide comments on the quarter. Jesse?
Thank you and good morning, everyone.
Speaker Change: Revenue for the first quarter of 2025 was 558.6 million, which represents a year-over-year increase of 9.3%.
Speaker Change: Net new business awards entering backlog in the first quarter decreased 18.8% from the prior year to 500 million, resulting in a 0.9 net book to bill
Speaker Change: An ending backlog as of March 31, 2025, was approximately 2.8 billion.
A decrease of 2.1% from the prior year A decrease of 2.1% from the prior year.
Speaker Change: We project that approximately 1.61 billion of backlog will convert to revenue in the next 12 months.
Speaker Change: and Backlog conversion in the first quarter was 19.2% of beginning Backlog.
Speaker Change: With that, I will turn the call over to Kevin to review our financial performance in more detail and discuss our 2025 guidance. Kevin?
Thank you, Jesse, and good morning to everyone listening in.
Kevin Brady: As Jesse mentioned, revenue was $558.6 million in the first quarter of 2025.
This represented a year-rear increase of 9.3%.
Kevin Brady: EBITDA of $118.6 million increased 2.6% compared to $115.7 million in the first quarter of 2024.
Kevin Brady: Even a margin for the first quarter was 21.2% compared to 22.6% in the prior year period.
Kevin Brady: Even a margin compared to the prior year period was impacted by employee-related costs and foreign exchange behind the weakening of the US dollar and the quarter.
Kevin Brady: In the first quarter of 2025, net income of 114.6 million increased 11.7% compared to net income of 102.6 million in the prior year period.
Kevin Brady: That income gross above ebidic groups was primarily driven by a lower effective tax rate from option exercises in the quarter and higher interest income.
Kevin Brady: Net income for deluded share for the quarter was $3.67 compared to $3.20 in the prior year period.
Kevin Brady: Regarding customer concentration, our top five and top ten customers represented roughly 22% and 32% respectively of our first quarter 2025 revenue.
Kevin Brady: In the first quarter, we generated 125.8 million in cash flow from operating activity.
and our net day sales outstanding was negative 67.8 days.
As of March 31, 2025, we had $441.49 in cash.
Kevin Brady: During the first quarter, we repurchased approximately 1.19 million shares worth 389.8 million.
Kevin Brady: At the end of the quarter, we had 344.8 million remaining under our share of purchase authorization programs.
Kevin Brady: 4-year 2025 total revenue is now expected in the range of 2.14 billion to 2.24 billion, representing gross of 1.5% to 6.2% over 2024 total revenue of 2.11 billion.
Kevin Brady: Our 2025 EBITDA is expected in the range of 462 million to 492 million, representing a decline of 3.8% to gross of 2.5% compared to EBITDA of 480.2 million in 2024.
Kevin Brady: We forecast 2025 net income in the range of 378 million to 400 million [inaudible]
Kevin Brady: This guidance assumes a 4-year 2025 effective tax rate of 15.5% to 16.5%
Speaker Change: Interest Income of $15.8 million and $30.8 million deluded weighted average shares outstanding for 2025.
There are no additional share of purchases reflected in our guidance.
Speaker Change: Ernie's per diluted share is now expected to be in the range of $12.26, the $13.04 to be in the range of $13.08. The $13.08 is expected to be in the range of $13.08.
Speaker Change: Guidance is based on foreign exchange rates as of March 31, 2025.
Speaker Change: With that, I will turn the call back over to the operator so we can take your questions.
Speaker Change: Thank you. As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.
Speaker Change: And our first question will come from David Windley with Jeff Reed, your line is open.
David Windley: Hi, thanks for taking my questions. Good morning. August , your comment, maybe August and Jesse, your comments around...
RFPs and quality of RFPs. I want to do a spore.
We've, in some of our discussions, been told that…
Biotext and kind of your target client audience are…
David Windley: inviting more TROs into bid situations and in some cases taking a larger number of TROs may be by one or two, but a larger number of TROs forward into bid defense.
David Windley: and maybe implied fishing for lower prices. Wanted to get you the flesh out if you would.
Speaker Change: Are you seeing these kinds of trends? Are you seeing more price competition? And is that a little bit of what you mean when you say the quality is a little more next? Thanks.
David Windley: Yeah, David, that is true. Any time there's a slowdown in the industry, there tends to be more.
David Windley: Price competition, more broader look at zeros, but a big factor is
Unfunded Projects
that
David Windley: proposals so that they can bring that back to try to make a story for moving a product forward rather than having some assets to move the product forward to start with.
David Windley: But yeah, they do tend to get more churn and a larger number of CROs participating in particular bids, so RFP numbers can go up, but that just means they've doubled the number of average number of CROs are inviting DTRFP, and so everyone sees an increase in RFPs.
David Windley: So yeah, I do think that's a good part of it, but the more concerning [inaudible]
David Windley: issue for me is the likelihood of funding and the type of assets and where they are in their funding cycle and how far out the project is at what stage it is that leads to a worsening in quality of the RFPs.
Thanks for that. And August , your comments about
Speaker Change: You know, still depending on environment, I can get your exact words, but kind of depending on environment
Speaker Change: Still believe you have the potential to track still 1.15 booked a bill in the second half.
Speaker Change: I noted your comments about backlog cancellations but pre backlog cancellations were worse.
Speaker Change: I guess I would love for you to flesh out how-
Speaker Change: What would be required, I guess, to achieve that because in, say, middle of last year when you talked about that intensification of pre-backlog cancellations, that was essentially what...
Speaker Change: You know, seem to cement your view that you wouldn't be able to get to a higher book to build.
Speaker Change: You know, say later last year and maybe early this year, how is that different now?
Sure, yeah, it.
Lee
Speaker Change: Pipeline cancellations, the pre-backload cancellations, particularly, have narrowed our options quite a bit.
Speaker Change: and limited possible booking levels in the next few quarters. But you realize we have a pretty good visibility in the opportunities that could
Speaker Change: You know, most of the opportunities that could convert into backlog in the next few quarters, you know, they're kind of already known to us.
Speaker Change: as opportunities at whatever stage. And they're sufficient to get us there if...
Speaker Change: Cancelations come back to a nice reasonable range, and we don't see this across the pipeline kind of elevated level. And things continue to move forward. And we've seen a slowing in...
Speaker Change: Decisions on RFPs, and you know once in a while you also have delays in project starts [inaudible]
Speaker Change: due to funding or for other reasons, and we need the projects to move into operational execution and recognition and backlog, and we need to avoid large cancellations.
Speaker Change: So our path there has narrowed quite a bit but we still see the, it's not just a hypothetical far off, you know
Speaker Change: I'm saying it's still possible, but it's highly improbable. We still have a reasonable path to get there if cancellations come back quite a bit.
Speaker Change: Thank you for that. I'll leave it at that. Thank you
Speaker Change: And our next question will come from Max Smock with William Blair. Your line is open.
Max Smock: Hi, good morning. Thanks for taking our question. August , you mentioned, you know, thinking back to 1.15, booked a bill in the back at the air, you get that improved climate. I guess my question would be, what do you think bookings look like if you don't get that improved climate? And then in that scenario, where we assume even a stable environment from here, how much downside is there to the top line this year? And then what would that imply for top line growth in 2026? Thank you.
Speaker Change: How much risk is it a top-line mission year? You need bookings or you're talking about to get to the top. Oh, I get some more. Second half.
Speaker Change: Yeah, more impact on revenue in the second half. I guess three parts. I get the environment stable from here.
Speaker Change: What does book the bill look like in the back after the year? How much downside is there to how you're thinking about revenue and the back after the end of your guide for this year? And then what does that all imply for top line growth in 2026?
Thanks for watching.
Yeah, well, I, you know, that's a...
Speaker Change: It's kind of a difficult hypothetical. What kind of downside is there? That depends on how bad the environment gets. If cancellations continue kind of the way they have of recent past, and particularly this past quarter and some of the quarters last year,
Speaker Change: You know, we're going to be in the same kind of, you know, place we've been, you know, somewhere around one, I guess. I think that's kind of the downside.
Revenue in the second half is, you know,
Speaker Change: You know, pretty much locked in, you know, that's kind of a different issue because that's a different cancellation, you know, more later stage cancellation.
Speaker Change: to knock our revenue off. That's possible and of course we continue to have clients with funding difficulties that we have to stop work on.
Speaker Change: and, or, you know, or cancel the project because of work. So there's still some risk the second half revenue, but you know, most of that is pretty...
Speaker Change: I'm pretty locked in, and I really don't have a model for 26, so I can't go there yet, and the environment is just too early to really talk about 20-26 revenue impact of poor bookings through this year.
Speaker Change: Yeah, understood and it may be premier as the downside scenario wasn't right with you. I was thinking more but if things
Speaker Change: Stay the same, stay the way they are today, and you don't get that improved climate. And just to confirm, if that is the case, and we're talking book to Bill, kind of around 1.0 in the back half of the year versus, you know, if you do get that improvement, you still think it can get to 1.15 5.
correct
Speaker Change: That's helpful. Thank you. And then maybe as a follow up, there's been a lot of headlines recently around.
Speaker Change: Just out of the FDA, and it was won over the weekend from an interview where they were
Speaker Change: Going to require West clinical trials in certain areas, going forward if the mechanism of action makes sense and if there's an unmet need Do you have any sense I can you provide us any detail around what your rare disease exposure looks like and just how you're thinking about you
Speaker Change: You know, this kind of discussion from the FDA and the talk about doing less trials and some of these indications moving forward. Is that a long-term structural headwinds for Medpace and for the CRO industry as a whole?
Speaker Change: I don't know. That's pretty hypothetical. You know, you make drugs easier to develop and you tend to get more development. Certainly,
Speaker Change: You know, if you took away the need for significant trials in an area, you know, you're gonna, that does have an impact. But I, you know, I think that's very hypothetical and I.
Speaker Change: You know, rare disease, you know, and it kind of depends on how you define it, you know, is, you know, certainly a meaningful part of our business, but
I really don't make much of that [inaudible]
You know, I think it's great to, you know, have...
Speaker Change: You know, the serious and, you know, needs of society for drugs, and, you know, you've got to have the right balance. You know, we want effective drugs, but we want them to develop at a reasonable cost.
Speaker Change: And you know, that's just kind of the trade-offs and I don't really see a risk to our industry from that [inaudible]
Got it. Thank you.
Anne Hines: And our next question comes from Ann Hynes with Mizzouho, your line is open
Anne Hines: Hi, good morning. Maybe talk about cancellations a little bit more. Can you remind us what your cancellation rate? I don't think you said what it was this quarter versus...
Anne Hines: What it was the last quarter and what it is versus historical and maybe just the type of trials that you're seeing, canceled, is it widespread, is it specific customers, any incremental detail on cancellations would be very helpful. Thanks.
Anne Hines: Sure, yeah. You didn't hear it because we didn't say it because we don't disclose it. So we just don't, you know, we don't provide cancellation rate. You know, we do talk about growing trends in magnitude, but we don't give the rates. And the cancellations have been
I'm free broad, but-
a largely centered around funding issues.
Anne Hines: and, you know, you can call it reprioritization and other things, and you know, that's certainly part of it, and there certainly drugs that have had...
You know significant
Safety Signals, or other failures of
Anne Hines: You know, trials that have impacted the development of the program.
Anne Hines: But funding has been at least a part of a good portion of the cancellations, but I can't sort out a different, you know, therapeutic area or anything like that is kind of across the board.
Speaker Change: Great, and then my next question is just on Sherry Purchase. Obviously, your stock is down here today. It's going to be down a little bit more today. There's no incremental Sherry Purchase in your guidance. I guess what would trigger Medpace to get more aggressive on Sherry Purchases?
David Windley, Ann Hynes,
Speaker Change: Yeah, I mean, and Annes is Kevin, we'll continue to take an opportunistic approach as we have in the last couple of quarters. And so we'll continue to look for those opportunities to do that.
Speaker Change: and we'll kind of see how we're able to execute. As you saw, we did increase the board authorization on chair repurchases, and so we'll look for opportunities to continue to do that. Thank you.
Dan Leonard: And our next question comes from Dan Leonard with UBS. Your line is open.
Thank you.
Dan Leonard: I have a question on that small biopharma exposure that you report at 80% of your revenue.
Speaker Change: Do you have any sense for how much of that is negative enterprise value biotech? Are you concerned at all that some of these biotechs that have negative enterprise value might just start to close up shop and return the cash?
Speaker Change: Justin Bowers, David Windley, Ann Hynes,
Speaker Change: Jesse, do you have any proportions on that? We continue to see companies, you know.
fail.
I don't know how many [inaudible]
Speaker Change: You know, if the drugs failed and they're not doing anything and they close up shop, I guess, you know...
Speaker Change: Who cares? They don't have a viable drug to go forward with.
But, uh...
He certainly funding difficulties is a bigger issue than-
Grub Failures, and Closing Up Shop at the Current Time.
But Jesse, do you have any kind of extra points? Yeah, I don't have anything on negative EV quantification.
Speaker Change: The things we do quantify, we'll look at what percentage is public versus privately funded companies and kind of what percentage is partnered with large pharma, but we're not tracking and reporting of EV values.
Thank you. Thank you.
Speaker Change: It doesn't sound like that's the high level of concern of yours independent from the broader funding environment anyway, is that fair?
Speaker Change: Yeah, I think companies have too much money. I never return it to investors is not our problem.
and LeVar Barack, Intel Industries Limited.
Speaker Change: And then my follow up question, which is coming up a lot in the investment community August , do you have any sense on whether all the turnover at the FDA is impacting your client discussions at all and making them incrementally behave differently or more worried about the future?
Speaker Change: I think it makes everybody worried about the future, not convinced there's any kind of, you know,
Speaker Change: Evidence that there's been delays or problems to date or changing behavior, but we'll have to take. I think it's too early.
Okay. Thank you.
Thank you. Thank you.
Speaker Change: And our next question will come from Eric Coldwell with Bayard. Your line is open.
Eric Coldwell: Thanks very much. I wanted to hit on the other side of growth. You've got bookings. You also have Backlog Burn, Backlog Burn was up.
Speaker Change: Pretty nicely year-over-year. It looks like the forecast must incorporate higher levels of backlog burn this year.
Speaker Change: I'm curious how much of that is a function of the lower backlog growth and the lower bookings which
Speaker Change: You know, naturally changes the nominator-denuminator equation, but also were there...
Speaker Change: Unusual timing shifts in the burn rate of your backlog or project specific items this quarter are their execution improvements that you're showing and maybe think are sustainable. We just like to get a better sense on
Speaker Change: The magnitude of this backlog burn, re-acceleration, how sustainable it is.
Kevin Brady: Yeah, Eric, this is Kevin. I mean, it's more a function of solving acceleration in revenue in the quarter. So programs were progressing well, but you also saw an increase in the reversible cost activity, right?
Kevin Brady: I was a bit higher than what we had expected, so that's going to influence it to us.
Kevin Brady: as well. And then it's the lower bookings that August talked about and his prepared remarks is coming in a bit soft. So it's not that we're changing execution or anything associated with that. I made programs continue to progress very nicely. It's more a reflection of the numerator and the denominator.
Speaker Change: Okay. And then Kevin, you know, last quarter on the call, mid-February, you had in response to one of my questions, you had suggested that you thought revenue would be...
Speaker Change: What were the other dynamics in play? Were you really thinking past screws were going to be down and instead they grew 10% so maybe we didn't know what to model but in your mind that was the big delta here I'm just
Speaker Change: You know, he told us this is a row revenue and it was the opposite. It was, you know, six weeks left in the quarters, what we heard, so I'm just trying to figure out.
Speaker Change: in the first quarter as well, but I think the bigger influence was the re-imperse [inaudible]
Speaker Change: And then my last question for this call, just I saw a little bit of head count growth quarter quarter, a little bit more year over year, but...
Speaker Change: maybe a bit slower than I was originally anticipating probably because of the lower bookings but what is your what is your new outlook on turnover hiring? [inaudible]
Speaker Change: Timing of hiring this year. I'm curious what your plans are at this point, what you'd like to do, and what you think is actually doable in the environment.
Speaker Change: Yeah, thanks, Eric. We did have a little bit of modest head count growth in the first quarter. Turnover remains pretty good, and we're still targeting head count growth this year, likely around mid single digit.
Okay, thanks very much.
Charles Reeve: And our next question comes from Charles Rhyee with TD Co. when your line is open.
Charles Reeve: Yeah, thanks for taking the question. August wanted to go back a little bit when you're talking about actually the funding issues with clients.
Charles Reeve: Are you seeing any crimes because we've heard in some instances where
Charles Reeve: Companies that have been committed have gotten funding but then either their private equity or VC backers kind of maybe pull back on some of those commitments [inaudible]
Charles Reeve: And so maybe some of the funding data we've seen over the last year or so may not actually materialize just curious if that is some of the dynamics you're seeing in some of clients potentially having some funding issues.
Charles Reeve: Sure. Yeah, I definitely think that's part of it. Often clients represent us that they've got funding arranged, they have commitments, they have, you know, whatever, you know, how strong this commitment is.
Charles Reeve: VCs and others having to choose between the winners and losers in their portfolio.
But...
That's where we are.
Speaker Change: Yeah, okay. And then maybe just, I know you're not disclosing sort of the cancellation rates, but can you give us a sense sort of maybe between pre-backed log cancellations and just cancellations out of back log sort of maybe the relative mix between the two and...
Charles Reeve: And as you kind of know, you guys said you kind of were looking at your
Pre-Backlog, kind of... [inaudible]
Charles Reeve: You know, kind of expectations for the course of year, you know, as I know you say it was it was higher but was it really outside the realm that you expected or was it just kind of, you know, kind of at the upper bounds of what you kind of thought could happen?
Charles Reeve: Yeah, I think I classify our backlog cancellations kind of in that range, you know, but you know, just outside of the range kind of, but the pre backlog cancellations were significantly worse and very high. So overall it was a pretty high rate of pipeline cancellations.
Charles Reeve: Okay, thanks. And Jesse, maybe just work quickly. You talked about a headcount. Would you say you're still on track for a mid to high single digit growth, or is that really just now dependent on, you know, what we see in terms of the environment over the next couple of months?
Charles Reeve: Yeah, I would say you know at this moment we're on track from mid single digit growth but it will depend on how the environment unfolds you know things things you know pick up we'll accelerate more aggressive hiring
Thank you.
Great. Thank you.
Michael Cherney: And our next question comes from Michael Cherney with Learing Partners, your line is open.
Michael Cherney: Good morning, thanks for taking the question. Maybe just to come at the cancellations.
Michael Cherney: Question, another way, both on the existing backlog and the pre-backlog. Is there anything you can tell us about cadence over the course of the quarter? Clearly...
Michael Cherney: We can't, no one, you can't control the dynamics going on a play across the change over an HHS, but did you see any elevated activity maybe over the course into March given the uncertainty that's been created from the moving pieces across FDA?
Michael Cherney: Yeah, I'm not sure had anything to do with movements at FDA and I don't have the cadence in terms of month to month in front of me, but it didn't strike me as all back end or front and loaded. It was, you know, kind of across the corner.
Speaker Change: Okay, and then on the dynamics and the build back towards an improved booked ability, you talked about their conditions in place to get back to 1.15.
Speaker Change: Is there anything your clients are telling you in terms of how they feel about achieving those conditions and what would be the comfort factors you're looking for in order to get back to those levels, curious along those lines where what the feedback is from the channel specifically. Thank you very much.
Speaker Change: Yeah, no, I have, I have, I don't think that's provided me any, any input, you know, I don't think anybody knows.
Okay. Thank you.
Speaker Change: And our next question comes from Jailendra Singh with True Whisper. Your line is open.
Jalindra Singh: Thank you, and good morning, and thanks for taking my question. I just want to go back to Revenue Guidance Race for the year. You report this metric of amount of backlog expected to convert in the next 12 months. It has been around a little over 1.6 billion for last few quarters. Have you seen any cancellation in that bucket recently? Because it seems you are implying that even if booking trends and booked bills remain at the current levels for us for the year, you still feel good about Revenue Outlook for the year. I'm wondering if it will be because it's...
Speaker Change: You don't see much concern around 1.6 billion amount of backlog conversion [inaudible]
Speaker Change: Yeah, this is Kevin. I mean, in terms of kind of re-emphasizing what August said, we feel good about the 20-25 guidance because we've got the programs in backlog and
Speaker Change: You're barring any acceleration and cancellations. We always have cancellations in that bucket.
but as long as they stay, you're relatively normal.
Speaker Change: We feel good about the revenue that's going to come out of that bucket. Now, certainly revenue, or backlog is declined a little bit into that next 12-month figure has come down a little bit, but we feel good again about the guidance that we have after our revenue.
Speaker Change: Okay, then my follow-up, I want to go back to David's question around biotech, CRO lands keep getting more competitive. I mean, historically, your pitch to biotech companies has been...
Speaker Change: How are you guys responding to that? Are you guys making any changes to your pitch or your approach as you go after these clients?
I don't think there's been a change in R.M.
competitive dynamics, lately of any material.
Speaker Change: In fact, everybody tries to get the client's individual attention and there's been no change.
Okay, thank you.
, , , , , ,
Speaker Change: As a reminder to ask a question, please press star 11 on your telephone. Our next question comes from Justin Bowers with DB, your line is open.
Justin Bowers: Good morning, everyone. Just a few follow-ups from what's been discussed in terms of the programs progressing faster in this type of up-and-one Q revenue. Is that, Kevin, is that more internal or external factors?
Justin Bowers: Meaning was it like execution on your end, or is there a push from clients to maybe sort of get the data done faster, just anything to call out?
Um...
The Progression There
Justin Bowers: Hey, I mean, I would say there's nothing unusual. It's just that the programs, the active programs that we have in Vackwell just continue to progress very nicely.
Justin Bowers: It's not to say that we've made any major internal changes. There's always pressure from sponsors to do things faster and we certainly do what we can. But I would say there's no change internally as it relates to how we execute.
Speaker Change: Okay, and then in terms of the cancellations, it sounds like most of that...
Speaker Change: was concentrated, or the elevation was around the pre-booking, but in terms of the inflite cancellations, was that elevated as well? And is that, you know, what trends are you seeing there? Is it more around futility, or is it also funding related? David?
Speaker Change: Yeah, I mean, the inflight, you know, backlog cancellations tend to be a bit more related to drug performance, but the funding has been a big part of even our backlog cancellations. So it is, it's a lot of work.
Justin Bowers, David Windley, Ann Hynes,
Speaker Change: I think Medpace was compared to the bigger guys has been pretty competitively priced. The pressure that
You talked about, is that? Are you seeing that?
Speaker Change: from your mid-size peers, or are you also seeing that coming from some of the larger competitors that may be encroaching on your market space?
It's both TN's only we're seeing competitive clans Yeah.
Speaker Change: Sorry, go ahead, Justin. Yeah. I'll say it's from both peers and mid-size and larger competitors, but also the pricing is influenced by just scarcity of funds as well.
from the biotech perspective.
Speaker Change: Got it. All right. Thank you. I will jump back into you [inaudible]
David Windley: And our next question comes from David Windley with Jeffries. Your line is open.
David Winley: Alright, thanks for taking my follow-up. I have a few, but I'm only going to ask one bigger one which is around
David Winley: fights and the pass-through elements. So, one of the things that we've heard anecdotally a fair amount is
David Winley: that the NIH grant funding, you know, what's called debate, freeze, whatever, does have academic medical centers.
Nervous about their situations, and while those funds probably...
David Winley: Fund, investigator, you know, investigator driven studies and not the type that you would directly run.
David Winley: But those funds probably also fund research infrastructure at these academic medical centers that could influence, you know, the throughput capabilities of the site that you might use and study. So with that having been said, I'm wondering about
General Sight Access F.
David Winley: You know, recruitment rates, how much do you use academic medical centers and to what extent are how should we think about the past through?
You know, increase in your revenue, is that inflation driven at the site? Is it just read, you know, read budgeting of kind of quantity of consumption?
David Winley: and how much of that pass through in place that we saw in the first quarter is also driving the revenue for the year. Thank you.
David Winley: is not reflected in anything today. It's a theoretical issue for the future. I think today,
David Winley: The increase in pass-throughs of investigator costs as portions of budgets relates to a number of things, including complexity of the...
August Troendle, Jesse Geiger, Kevin Brady
You know, past through, you know, to trials.
Speaker Change: Obsessment and Driver, we've seen today, you know, this...
You know, shifting of…
Speaker Change: It's possible overhead costs to, you know, sponsored driven clinical trials, you know, commercial clinical trials, you know, maybe that'll happen I don't know, but certainly not a factor in the current dynamic. Thank you very much.
Speaker Change: If we were to think about, you raised by a little bit, [inaudible]
Speaker Change: is all of that raised pass-through is more than the raised pass-through. How should we think about the pass-through influence on on revenue versus your prior expectations?
in the quarter day David.
I mean, I'm really thinking about the guidance for the year.
Continue to feel that the cost [inaudible]
Speaker Change: But as you know, it bounces around from quarter to quarter, but the expectation for the years that it's somewhere is what we is similar to what we saw in the back-up of 24.
Speaker Change: Yeah, but the question is, did the jump in, did the jump in our revenue? Is that an anticipation of jumping past real hard?
He's the director, he's the...
by the Reimbursable Activity.
Yeah, yeah, thank you for that
Speaker Change: I show no further questions at this time. I would now like to turn the call back to Lauren for closing remarks.
Lauren Morris: Thank you all for joining us today's call and for your interest in Medpace. We look forward to speaking with you again on our second quarter 2025 or our next call.
Lauren Morris: This concludes today's conference call. Thank you for participating. You may now disconnect.