QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
x | Accelerated filer | o | |||||||||
Non-accelerated filer | o | Smaller reporting company | |||||||||
Emerging growth company |
Class | Number of Shares Outstanding | |||||||
Item Number | Page | |||||||
28 | ||||||||
(Amounts in thousands, except share amounts) | As of | ||||||||||
June 30, 2023 | December 31, 2022 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable and unbilled, net (includes $ | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Operating lease right-of-use assets | |||||||||||
Goodwill | |||||||||||
Intangible assets, net | |||||||||||
Deferred income taxes | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable (includes $ | $ | $ | |||||||||
Accrued expenses | |||||||||||
Advanced billings (includes $ | |||||||||||
Short-term debt | |||||||||||
Other current liabilities (includes $ | |||||||||||
Total current liabilities | |||||||||||
Operating lease liabilities | |||||||||||
Deferred income tax liability | |||||||||||
Other long-term liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (see Note 11) | |||||||||||
Shareholders’ equity: | |||||||||||
Preferred stock - $ | |||||||||||
Common stock - $ | |||||||||||
Treasury stock - | ( | ( | |||||||||
Additional paid-in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Total shareholders’ equity | |||||||||||
Total liabilities and shareholders’ equity | $ | $ |
(Amounts in thousands, except per share amounts) | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Revenue, net (includes $ | $ | $ | $ | $ | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Direct service costs, excluding depreciation and amortization | |||||||||||||||||||||||
Reimbursed out-of-pocket expenses | |||||||||||||||||||||||
Total direct costs | |||||||||||||||||||||||
Selling, general and administrative | |||||||||||||||||||||||
Depreciation | |||||||||||||||||||||||
Amortization | |||||||||||||||||||||||
Total operating expenses | |||||||||||||||||||||||
Income from operations | |||||||||||||||||||||||
Other (expense) income, net: | |||||||||||||||||||||||
Miscellaneous (expense) income, net | ( | ( | |||||||||||||||||||||
Interest expense, net | ( | ( | ( | ( | |||||||||||||||||||
Total other (expense) income, net | ( | ( | |||||||||||||||||||||
Income before income taxes | |||||||||||||||||||||||
Income tax provision | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Net income per share attributable to common shareholders: | |||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||
Diluted | $ | $ | $ | $ | |||||||||||||||||||
Weighted average common shares outstanding: | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted |
(Amounts in thousands) | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive income | |||||||||||||||||||||||
Foreign currency translation adjustments, net of taxes | ( | ( | |||||||||||||||||||||
Comprehensive income | $ | $ | $ | $ |
(Amounts in thousands) | Common Stock | Treasury Stock | Additional Paid-In Capital | (Accumulated Deficit) Retained Earnings | Accumulated Other Comprehensive Loss | Total | |||||||||||||||||||||||||||||
BALANCE — December 31, 2021 | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||
Foreign currency translation | ( | ( | |||||||||||||||||||||||||||||||||
Stock-based compensation expense | |||||||||||||||||||||||||||||||||||
Stock options exercised | |||||||||||||||||||||||||||||||||||
Repurchases of common stock | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
Retirement of treasury stock | ( | ||||||||||||||||||||||||||||||||||
BALANCE — March 31, 2022 | $ | $ | ( | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||
Foreign currency translation | ( | ( | |||||||||||||||||||||||||||||||||
Stock-based compensation expense | |||||||||||||||||||||||||||||||||||
Stock options exercised | |||||||||||||||||||||||||||||||||||
Repurchases of common stock | ( | ( | ( | ||||||||||||||||||||||||||||||||
BALANCE — June 30, 2022 | $ | $ | ( | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||
Common Stock | Treasury Stock | Additional Paid-In Capital | (Accumulated Deficit) Retained Earnings | Accumulated Other Comprehensive Loss | Total | ||||||||||||||||||||||||||||||
BALANCE — December 31, 2022 | $ | $ | ( | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||
Foreign currency translation | |||||||||||||||||||||||||||||||||||
Stock-based compensation expense | |||||||||||||||||||||||||||||||||||
Stock options exercised | |||||||||||||||||||||||||||||||||||
Repurchases of common stock | ( | ( | ( | ||||||||||||||||||||||||||||||||
Re-issuance of treasury stock | ( | ||||||||||||||||||||||||||||||||||
BALANCE — March 31, 2023 | $ | $ | ( | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||
Foreign currency translation | |||||||||||||||||||||||||||||||||||
Stock-based compensation expense | |||||||||||||||||||||||||||||||||||
Stock options exercised | |||||||||||||||||||||||||||||||||||
Repurchases of common stock | ( | ( | ( | ||||||||||||||||||||||||||||||||
BALANCE — June 30, 2023 | $ | $ | ( | $ | $ | ( | $ | ( | $ |
(Amounts in thousands) | Six Months Ended June 30, | ||||||||||
2023 | 2022 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation | |||||||||||
Amortization | |||||||||||
Stock-based compensation expense | |||||||||||
Noncash lease expense | |||||||||||
Deferred income tax benefit | ( | ( | |||||||||
Other | ( | ( | |||||||||
Changes in assets and liabilities: | |||||||||||
Accounts receivable and unbilled, net | ( | ( | |||||||||
Prepaid expenses and other current assets | ( | ( | |||||||||
Accounts payable | |||||||||||
Accrued expenses | |||||||||||
Advanced billings | |||||||||||
Lease liabilities | ( | ( | |||||||||
Other assets and liabilities, net | ( | ( | |||||||||
Net cash provided by operating activities | |||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
Property and equipment expenditures | ( | ( | |||||||||
Other | ( | ( | |||||||||
Net cash used in investing activities | ( | ( | |||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Proceeds from stock option exercises | |||||||||||
Repurchases of common stock | ( | ( | |||||||||
Proceeds from revolving loan | |||||||||||
Payments on revolving loan | ( | ( | |||||||||
Net cash used in financing activities | ( | ( | |||||||||
EFFECT OF EXCHANGE RATES ON CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | ( | ||||||||||
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | ( | ||||||||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — Beginning of period | |||||||||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — End of period | $ | $ | |||||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION — | |||||||||||
Acquisition of property and equipment—non-cash | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Weighted-average shares: | |||||||||||||||||||||||
Common shares outstanding | |||||||||||||||||||||||
RSAs | |||||||||||||||||||||||
Total weighted-average shares | |||||||||||||||||||||||
Earnings per common share—Basic | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Less: Undistributed earnings allocated to RSAs | ( | ( | ( | ( | |||||||||||||||||||
Net income available to common shareholders—Basic | $ | $ | $ | $ | |||||||||||||||||||
Net income per common share—Basic | $ | $ | $ | $ | |||||||||||||||||||
Basic weighted-average common shares outstanding | |||||||||||||||||||||||
Effect of diluted shares | |||||||||||||||||||||||
Diluted weighted-average shares outstanding | |||||||||||||||||||||||
Net income per common share—Diluted | $ | $ | $ | $ |
As of | |||||||||||
June 30, 2023 | December 31, 2022 | ||||||||||
Accounts receivable | $ | $ | |||||||||
Unbilled receivables | |||||||||||
Less: allowance for doubtful accounts | ( | ( | |||||||||
Total accounts receivable and unbilled, net | $ | $ |
As of | |||||||||||
June 30, 2023 | December 31, 2022 | ||||||||||
Advanced billings | $ | $ |
As of | |||||||||||
June 30, 2023 | December 31, 2022 | ||||||||||
Intangible assets: | |||||||||||
Finite-lived intangible assets: | |||||||||||
Carrying amount: | |||||||||||
Customer relationships | |||||||||||
Accumulated amortization: | |||||||||||
Customer relationships | ( | ( | |||||||||
Total finite-lived intangible assets, net | |||||||||||
Trade name (indefinite-lived) | |||||||||||
Total intangible assets, net | $ | $ |
Amortization | |||||
Remainder of 2023 | $ | ||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 | |||||
2028 | |||||
$ |
As of | |||||||||||
June 30, 2023 | December 31, 2022 | ||||||||||
Employee compensation and benefits | $ | $ | |||||||||
Project related reimbursable expenses | |||||||||||
Other | |||||||||||
Total accrued expenses | $ | $ |
As of | |||||||||||
June 30, 2023 | December 31, 2022 | ||||||||||
Credit facility | $ | $ | |||||||||
Short-term debt | $ | $ |
2023 (remaining) | |||||
2024 | |||||
Total | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Operating lease cost | $ | $ | $ | $ | |||||||||||||||||||
Variable lease cost |
Six Months Ended June 30, | |||||||||||
2023 | 2022 | ||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
Operating cash flows from operating leases | $ | $ | |||||||||
Right-of-use assets obtained in exchange for lease obligations: | |||||||||||
Operating leases |
As of | |||||||||||
June 30, 2023 | December 31, 2022 | ||||||||||
Operating lease right-of-use assets - related parties | $ | $ | |||||||||
Operating lease right-of-use assets - non-related parties | |||||||||||
$ | $ | ||||||||||
Other current liabilities - related parties | |||||||||||
Other current liabilities - non-related parties | |||||||||||
Other current liabilities | $ | $ | |||||||||
Operating lease liabilities - related parties | |||||||||||
Operating lease liabilities - non-related parties | |||||||||||
Operating lease liabilities | |||||||||||
Total operating lease liabilities | $ | $ | |||||||||
Weighted Average Remaining Lease Term (years) | |||||||||||
Operating leases | |||||||||||
Weighted Average Discount Rate | |||||||||||
Operating leases | % | % |
Related Party Operating Leases | Non-Related Parties Operating Leases | Total Operating Leases | |||||||||||||||
Remainder of 2023 | $ | $ | $ | ||||||||||||||
2024 | |||||||||||||||||
2025 | |||||||||||||||||
2026 | |||||||||||||||||
2027 | |||||||||||||||||
Later years | |||||||||||||||||
Total lease payments | |||||||||||||||||
Less: imputed interest | ( | ( | ( | ||||||||||||||
Total | $ | $ | $ |
Six Months Ended June 30, 2023 | |||||||||||
Stock Options | Weighted Average Exercise Price | ||||||||||
Outstanding - beginning of period | $ | ||||||||||
Granted | $ | ||||||||||
Exercised | ( | $ | |||||||||
Cancelled/Forfeited/Expired | ( | $ | |||||||||
Outstanding - end of period | $ | ||||||||||
Exercisable - end of period | $ |
Six Months Ended June 30, 2023 | |||||
Shares/Units | |||||
Outstanding and unvested - beginning of period | |||||
Granted | |||||
Vested | ( | ||||
Forfeited | ( | ||||
Outstanding and unvested - end of period | |||||
Cumulative vested shares - end of period |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Total direct costs | $ | $ | $ | $ | |||||||||||||||||||
Selling, general and administrative | |||||||||||||||||||||||
Total stock-based compensation expense | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Therapeutic Area | ||||||||||||||||||||||||||
Oncology | $ | $ | $ | $ | ||||||||||||||||||||||
Other | ||||||||||||||||||||||||||
Metabolic | ||||||||||||||||||||||||||
Cardiology | ||||||||||||||||||||||||||
Central Nervous System | ||||||||||||||||||||||||||
AVAI | ||||||||||||||||||||||||||
Total revenue | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
U.S. Dollars per Euro: | 1.09 | 1.07 | 1.08 | 1.09 |
Three Months Ended June 30, | ||||||||||||||||||||||||||
(Amounts in thousands, except percentages) | 2023 | 2022 | Change | % Change | ||||||||||||||||||||||
Revenue, net | $ | 460,868 | $ | 351,207 | $ | 109,661 | 31.2 | % | ||||||||||||||||||
Direct service costs, excluding depreciation and amortization | 158,526 | 132,118 | 26,408 | 20.0 | % | |||||||||||||||||||||
Reimbursed out-of-pocket expenses | 178,025 | 120,093 | 57,932 | 48.2 | % | |||||||||||||||||||||
Total direct costs | 336,551 | 252,211 | 84,340 | 33.4 | % | |||||||||||||||||||||
Selling, general and administrative | 39,404 | 33,215 | 6,189 | 18.6 | % | |||||||||||||||||||||
Depreciation | 5,970 | 4,707 | 1,263 | 26.8 | % | |||||||||||||||||||||
Amortization | 550 | 838 | (288) | (34.4) | % | |||||||||||||||||||||
Total operating expenses | 382,475 | 290,971 | 91,504 | 31.4 | % | |||||||||||||||||||||
Income from operations | 78,393 | 60,236 | 18,157 | |||||||||||||||||||||||
Miscellaneous (expense) income, net | (1,283) | 2,311 | (3,594) | |||||||||||||||||||||||
Interest expense, net | (1,366) | (548) | (818) | |||||||||||||||||||||||
Income before income taxes | 75,744 | 61,999 | 13,745 | |||||||||||||||||||||||
Income tax provision | 14,676 | 12,639 | 2,037 | |||||||||||||||||||||||
Net income | $ | 61,068 | $ | 49,360 | $ | 11,708 |
Six Months Ended June 30, | ||||||||||||||||||||||||||
(Amounts in thousands, except percentages) | 2023 | 2022 | Change | % Change | ||||||||||||||||||||||
Revenue, net | $ | 894,942 | $ | 682,154 | $ | 212,788 | 31.2 | % | ||||||||||||||||||
Direct service costs, excluding depreciation and amortization | 309,594 | 257,552 | 52,042 | 20.2 | % | |||||||||||||||||||||
Reimbursed out-of-pocket expenses | 330,842 | 226,929 | 103,913 | 45.8 | % | |||||||||||||||||||||
Total direct costs | 640,436 | 484,481 | 155,955 | 32.2 | % | |||||||||||||||||||||
Selling, general and administrative | 77,431 | 62,581 | 14,850 | 23.7 | % | |||||||||||||||||||||
Depreciation | 11,378 | 8,977 | 2,401 | 26.7 | % | |||||||||||||||||||||
Amortization | 1,100 | 1,676 | (576) | (34.4) | % | |||||||||||||||||||||
Total operating expenses | 730,345 | 557,715 | 172,630 | 31.0 | % | |||||||||||||||||||||
Income from operations | 164,597 | 124,439 | 40,158 | |||||||||||||||||||||||
Miscellaneous (expense) income, net | (596) | 3,378 | (3,974) | |||||||||||||||||||||||
Interest expense, net | (2,227) | (494) | (1,733) | |||||||||||||||||||||||
Income before income taxes | 161,774 | 127,323 | 34,451 | |||||||||||||||||||||||
Income tax provision | 27,812 | 16,652 | 11,160 | |||||||||||||||||||||||
Net income | $ | 133,962 | $ | 110,671 | $ | 23,291 |
Six Months Ended June 30, | |||||||||||
Cash Flows (Amounts in thousands) | 2023 | 2022 | |||||||||
Net cash provided by operating activities | $ | 162,594 | $ | 142,875 | |||||||
Net cash used in investing activities | (17,970) | (22,335) | |||||||||
Net cash used in financing activities | (134,893) | (535,546) | |||||||||
Effect of exchange rates on cash, cash equivalents and restricted cash | 1,142 | (3,747) | |||||||||
Increase (decrease) in cash, cash equivalents and restricted cash | $ | 10,873 | $ | (418,753) |
Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publically Announce Plan | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plan | ||||||||||||||||||||||
April 1, 2023, through April 30, 2023 | 126,281 | $ | 189.02 | 8,033,437 | $ | 308,833,776 | ||||||||||||||||||||
Total | 126,281 | $ | 189.02 | 8,033,437 |
Incorporated by Reference | ||||||||||||||||||||||||||||||||||||||
Exhibit Number | Exhibit Description | Form | File No. | Exhibit | Filing Date | Filed/ Furnished Herewith | ||||||||||||||||||||||||||||||||
31.1 | * | |||||||||||||||||||||||||||||||||||||
31.2 | * | |||||||||||||||||||||||||||||||||||||
32.1 | ** | |||||||||||||||||||||||||||||||||||||
32.2 | ** | |||||||||||||||||||||||||||||||||||||
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) |
MEDPACE HOLDINGS, INC. | |||||
/s/ Kevin M. Brady | |||||
Kevin M. Brady | |||||
Chief Financial Officer (Principal Financial Officer) |
/s/ August J. Troendle | |||||
August J. Troendle | |||||
Chief Executive Officer and Chairman of the Board of Directors | |||||
(Principal Executive Officer) |
/s/ Kevin M. Brady | |||||
Kevin M. Brady | |||||
Chief Financial Officer | |||||
(Principal Financial Officer) |
By: | /s/ August J. Troendle | |||||||
August J. Troendle | ||||||||
Chief Executive Officer and Chairman of the Board of Directors | ||||||||
(Principal Executive Officer) |
By: | /s/ Kevin M. Brady | |||||||
Kevin M. Brady | ||||||||
Chief Financial Officer | ||||||||
(Principal Financial Officer) |
Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Total revenue | $ 460,868 | $ 351,207 | $ 894,942 | $ 682,154 |
Related Party | ||||
Total revenue | $ 13,300 | $ 17,200 | $ 29,100 | $ 30,500 |
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 61,068 | $ 49,360 | $ 133,962 | $ 110,671 |
Other comprehensive income | ||||
Foreign currency translation adjustments, net of taxes | 120 | (3,584) | 1,198 | (5,126) |
Comprehensive income | $ 61,188 | $ 45,776 | $ 135,160 | $ 105,545 |
Basis of Presentation |
6 Months Ended |
---|---|
Jun. 30, 2023 | |
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, 2022. Share Repurchases In 2018, the Board of Directors approved a stock repurchase program which has been amended several times to increase the aggregate amount of the stock repurchase authorization. During the three and six months ended June 30, 2022, the Company repurchased 2,717,379 shares and 5,463,244 shares for $374.6 million and $800.5 million, respectively. In the fourth quarter of 2022, the Board approved a new stock repurchase program of up to $500.0 million. 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, 2023, we have remaining authorization of $308.8 million under the new 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.
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Net Income Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Per Share | Net Income Per ShareBasic 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, 2023 and 2022 (in thousands, except for earnings per share):
During the three and six months ended June 30, 2023, the Company had (in thousands) 16.7 stock options, respectively, 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, 2022, the Company had (in thousands) 274.4 stock options, respectively, that were excluded due to the exercise price exceeding the average fair value of the Company’s common stock during the period.
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Fair Value Measurements |
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Jun. 30, 2023 | |
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, 2023. There were no transfers between Level 1, Level 2 or Level 3 during the three and six months ended June 30, 2023 or June 30, 2022.
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Contract Assets and Contract Liabilities |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contract Assets and Contract Liabilities | 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):
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, 2023, we had approximately $2.9 billion of performance obligations remaining to be performed for active projects.
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Intangible Assets, Net |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets, Net | Intangible Assets, Net Intangible assets, net consisted of the following (in thousands):
As of June 30, 2023, estimated amortization expense of the Company’s intangible assets for each of the next five years and thereafter is as follows (in thousands):
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Accrued Expenses |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses | Accrued Expenses Accrued expenses consisted of the following (in thousands):
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Short-Term Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-Term Debt | Short-term Debt Short-term debt consisted of the following (in thousands):
Principal payments on Short-term debt are due as follows (in thousands):
The estimated fair value of the Company’s debt based on Level 2 inputs using the market approach, which is primarily based on rates at which the debt is traded among financial institutions, approximates the carrying value as of June 30, 2023 and December 31, 2022. 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 15, 2022, the Company entered into Amendment No. 4 to the Loan Agreement, which increased the aggregate principal amount that may be borrowed under the facility’s line of credit to up to $250.0 million. 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. 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%). As of June 30, 2023, the Credit Facility interest rate was 6.3%. 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, 2023, there were $0.2 million in letters of credit outstanding related to certain operating lease obligations, which are secured by the Credit Facility.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | 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 17 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):
Supplemental cash flow information related to the leases was as follows (in thousands):
Supplemental balance sheet information related to the leases was as follows (in thousands):
Lease payments due related to lease liabilities as of June 30, 2023 were as follows (in thousands):
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Shareholder's Equity and Stock-Based Compensation |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholder's Equity and Stock-Based Compensation | Shareholder’s Equity and Stock-Based CompensationThe Company granted 28,412 awards to employees under the 2016 Incentive Award Plan during the six months ended June 30, 2023, consisting of 27,162 RSU and 1,250 stock option awards having four year vesting schedules. The Company granted an additional 11,187 stock option awards to non-employee directors under the 2016 Incentive Award Plan, during the six months ended June 30, 2023. 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. Award Activity The following table sets forth the Company’s stock option activity:
The following table sets forth the Company’s RSA/RSU activity:
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):
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Income Taxes |
6 Months Ended |
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Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesThe Company’s effective income tax rate was 19.4% and 20.4% for the three months ended June 30, 2023 and 2022, respectively. The Company's effective income tax rate was 17.2% and 13.1% for the six months ended June 30, 2023 and 2022, respectively. The Company’s effective income tax rate for the three months ended June 30, 2023 and the six months ended June 30, 2023 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 |
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Jun. 30, 2023 | |
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, 2023 and December 31, 2022. 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, 2023. Purchase Commitments The Company has several minimum purchase commitments for project related supplies totaling $17.1 million as of June 30, 2023. In return for the commitment, Medpace receives preferential pricing. The commitments expire at various times through 2029.
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Related Party Transactions |
6 Months Ended |
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Jun. 30, 2023 | |
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 existed at June 30, 2023 and December 31, 2022, respectively, 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 $9.7 million during the three months ended June 30, 2023 and 2022, respectively, and $23.0 million and $17.1 million during the six months ended June 30, 2023 and 2022, respectively, in the Company’s condensed consolidated statements of operations. As of June 30, 2023 and December 31, 2022, respectively, the Company had Advanced billings from LIB of $11.6 million and $7.4 million in the condensed consolidated balance sheets. In addition, as of June 30, 2023 and December 31, 2022, respectively, the Company had Accounts receivable and unbilled, net from LIB of $3.1 million and $5.5 million in the condensed consolidated balance sheets. The Company had Other current liabilities with LIB of $9.0 million and $12.5 million in the consolidated balance sheets at June 30, 2023 and December 31, 2022. 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 $3.6 million and $7.5 million during the three months ended June 30, 2023 and 2022, respectively, and $6.1 million and $13.3 million during the six months ended June 30, 2023 and 2022, respectively, in the Company’s condensed consolidated statements of operations. As of June 30, 2023 and December 31, 2022, respectively, the Company had Advanced billings from CinRx of $2.7 million and $1.4 million in the condensed consolidated balance sheets. As of June 30, 2023 and December 31, 2022 the Company had Accounts receivable and unbilled, net from CinRx of $1.6 million and $2.2 million, respectively, in the condensed consolidated balance sheets. Certain affiliates of CinRx included in previous reported quarters are no longer disclosed due to changes in the affiliate relationships. 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 and less than $0.1 million during the three months ended June 30, 2023 and 2022, respectively, and $0.2 million and $0.1 million during the six months ended June 30, 2023 and 2022 at The Summit, respectively. 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. Operating lease cost recognized for the three months ended June 30, 2023 and 2022 was $0.7 million and $0.5 million and $1.3 million and $1.1 million for the six months ended June 30, 2023 and 2022, 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, 2023 and December 31, 2022 were $20.2 million and $18.2 million, respectively, in the condensed consolidated balance sheets. The current and long-term portions of the lease liabilities at June 30, 2023 were $1.4 million and $18.9 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, 2022 were $1.5 million and $16.7 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, 2023 and 2022 was $1.4 million and $2.8 million for the six months ended June 30, 2023 and 2022. 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, 2023 and December 31, 2022 were $52.7 million and $53.5 million, respectively, in the condensed consolidated balance sheets. The current and long-term portions of the lease liabilities at June 30, 2023 were $1.2 million and $64.2 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, 2022 were $1.1 million and $64.8 million, respectively and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets. The Company entered into two multi-year lease agreements governing the occupancy of space of two buildings 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 leases expire 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 leases are operating leases. Operating lease cost recognized for the three months ended June 30, 2023 and 2022 was $0.9 million and $1.8 million for the six months ended June 30, 2023 and 2022. 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, 2023 and December 31, 2022 were $13.3 million and $14.6 million, respectively, in the condensed consolidated balance sheets. The current and long-term portions of the lease liabilities at June 30, 2023 were $2.9 million and $10.4 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, 2022 were $2.8 million and $11.9 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 $0.4 million and $0.6 million during the three months ended June 30, 2023 and 2022, respectively, and $0.8 million and $1.0 million during the six months ended June 30, 2023 and 2022, 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, 2023 and December 31, 2022, the Company had Accounts payable to the Aircraft Management Company of $0.4 million and $0.3 million, respectively, in the condensed consolidated balance sheets.
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Entity Wide Disclosures |
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Entity Wide Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Entity Wide Disclosures | Entity Wide Disclosures Revenue by Category The following table disaggregates our revenue by major source (in thousands):
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Pay vs Performance Disclosure - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
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Jun. 30, 2023 |
Mar. 31, 2023 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
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Pay vs Performance Disclosure | ||||||
Net income | $ 61,068 | $ 72,894 | $ 49,360 | $ 61,311 | $ 133,962 | $ 110,671 |
Insider Trading Arrangements |
3 Months Ended | 6 Months Ended |
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Jun. 30, 2023
shares
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Jun. 30, 2023
shares
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Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | During the three months ended June 30, 2023, 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, other than on May 1, 2023, Medpace Investors, LLC (“MPI”) adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 500,000 shares of the Company’s common stock until September 14, 2024. August J. Troendle, Chief Executive Officer and Chairman of the Board of the Company, is the sole manager and controlling unit holder of MPI and has sole voting and investment control with respect to the securities held by MPI. Mr. Troendle may be deemed to indirectly beneficially own the securities of the Company held by MPI but disclaims beneficial ownership of such securities except to the extent of his pecuniary interest therein. | |
Non-Rule 10b5-1 Arrangement Adopted | false | |
Rule 10b5-1 Arrangement Terminated | false | |
Non-Rule 10b5-1 Arrangement Terminated | false | |
August J. Troendle [Member] | ||
Trading Arrangements, by Individual | ||
Name | August J. Troendle | |
Title | Chief Executive Officer and Chairman of the Board of the Company | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | May 1, 2023 | |
Arrangement Duration | 502 days | |
Aggregate Available | 500,000 | 500,000 |
Basis of Presentation (Policies) |
6 Months Ended |
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Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Unaudited Interim Financial Information | Unaudited Interim Financial InformationThe 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, 2022. |
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. |
Net Income Per Share (Tables) |
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2023 and 2022 (in thousands, except for earnings per share):
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Contract Assets and Contract Liabilities (Tables) |
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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):
Advanced billings consisted of the following (in thousands):
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Intangible Assets, Net (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Intangible Assets, Net | Intangible assets, net consisted of the following (in thousands):
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Schedule of Estimated Amortization Expense of Intangible Assets | As of June 30, 2023, estimated amortization expense of the Company’s intangible assets for each of the next five years and thereafter is as follows (in thousands):
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Accrued Expenses (Tables) |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Expenses | Accrued expenses consisted of the following (in thousands):
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Short-Term Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | Short-term debt consisted of the following (in thousands):
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Schedule of Principal Payments on Debt | Principal payments on Short-term debt are due as follows (in thousands):
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Leases (Tables) |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Components of Lease Expense | The components of lease expense were as follows (in thousands):
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Summary of Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to the leases was as follows (in thousands):
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Summary of Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to the leases was as follows (in thousands):
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Schedule of Lease Payments Due Related To Lease Liabilities | Lease payments due related to lease liabilities as of June 30, 2023 were as follows (in thousands):
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Shareholder's Equity and Stock-Based Compensation (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement, Activity | The following table sets forth the Company’s stock option activity:
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Schedule of RSA/RSU Activity | The following table sets forth the Company’s RSA/RSU activity:
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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):
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Entity Wide Disclosures (Tables) |
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Entity Wide Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue by Major Source | The following table disaggregates our revenue by major source (in thousands):
|
Basis of Presentation - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
Dec. 31, 2022 |
|
Basis Of Presentation [Line Items] | |||||
Repurchases of shares, value | $ 144,020 | $ 800,667 | |||
2022 Share Repurchase Program | |||||
Basis Of Presentation [Line Items] | |||||
Repurchases of shares (in shares) | 126,281 | 781,068 | |||
Repurchases of shares, value | $ 23,900 | $ 144,000 | |||
2022 Share Repurchase Program | Maximum | |||||
Basis Of Presentation [Line Items] | |||||
Stock repurchase program, authorized amount | $ 500,000 | ||||
Stock repurchase program, remaining amount | $ 308,800 | $ 308,800 | |||
Share Repurchase Program | |||||
Basis Of Presentation [Line Items] | |||||
Repurchases of shares (in shares) | 2,717,379 | 5,463,244 | |||
Repurchases of shares, value | $ 374,600 | $ 800,500 |
Net Income Per Share - Narrative (Details) - shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Stock Options | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of diluted EPS | 16,700 | 274,400 | 16,700 | 274,400 |
Contract Assets and Contract Liabilities - Summary of Accounts Receivable and Unbilled, Net (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Revenue from Contract with Customer [Abstract] | ||
Accounts receivable | $ 243,560 | $ 213,169 |
Unbilled receivables | 31,668 | 40,405 |
Less: allowance for doubtful accounts | (170) | (170) |
Total accounts receivable and unbilled, net | $ 275,058 | $ 253,404 |
Contract Assets and Contract Liabilities - Summary of Advanced Billings (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Revenue from Contract with Customer [Abstract] | ||
Advanced billings | $ 490,557 | $ 462,729 |
Contract Assets and Contract Liabilities - Narrative (Details) $ in Billions |
Jun. 30, 2023
USD ($)
|
---|---|
Revenue from Contract with Customer [Abstract] | |
Performance obligations remaining to be performed | $ 2.9 |
Intangible Assets, Net - Schedule of Intangible Assets, Net (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Accumulated amortization: | ||
Total finite-lived intangible assets, net | $ 5,262 | $ 6,362 |
Trade name (indefinite-lived) | 31,646 | 31,646 |
Total intangible assets, net | 36,908 | 38,008 |
Customer Relationships | ||
Finite-lived intangible assets: | ||
Finite-lived intangible assets, gross | 145,051 | 145,051 |
Accumulated amortization: | ||
Total accumulated amortization | $ (139,789) | $ (138,689) |
Intangible Assets, Net - Schedule of Estimated Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2023 | $ 1,099 | |
2024 | 1,443 | |
2025 | 946 | |
2026 | 620 | |
2027 | 577 | |
2028 | 577 | |
Total finite-lived intangible assets, net | $ 5,262 | $ 6,362 |
Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Payables and Accruals [Abstract] | ||
Employee compensation and benefits | $ 57,341 | $ 71,197 |
Project related reimbursable expenses | 164,835 | 128,416 |
Other | 9,749 | 10,512 |
Total accrued expenses | $ 231,925 | $ 210,125 |
Short-Term Debt - Schedule of Debt (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Short-Term Debt [Line Items] | ||
Short-term debt | $ 55,000 | $ 50,000 |
Credit facility | ||
Short-Term Debt [Line Items] | ||
Short-term debt | $ 55,000 | $ 50,000 |
Short-Term Debt- Schedule of Principal Payments on Debt (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Debt Disclosure [Abstract] | ||
2023 (remaining) | $ 0 | |
2024 | 55,000 | |
Short-term debt | $ 55,000 | $ 50,000 |
Short-Term Debt - Narrative (Details) - USD ($) $ in Millions |
6 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2023 |
Mar. 31, 2023 |
Mar. 15, 2022 |
Sep. 30, 2019 |
|
Debt Instrument [Line Items] | ||||
Outstanding letters of credit | $ 0.2 | |||
Credit facility | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount borrowed under line of credit facility | $ 150.0 | $ 250.0 | ||
Credit facility, interest rate at period end | 6.30% | |||
Credit facility | The Secured Overnight Financing Rate | ||||
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) $ in Millions |
6 Months Ended |
---|---|
Jun. 30, 2023
USD ($)
| |
Lessee Lease Description [Line Items] | |
Lease not yet commenced, future payments | $ 0.6 |
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 | 17 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, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Leases [Abstract] | ||||
Operating lease cost | $ 6,954 | $ 6,375 | $ 13,635 | $ 12,875 |
Variable lease cost | $ 1,835 | $ 2,097 | $ 4,172 | $ 4,113 |
Leases - Summary of Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 9,599 | $ 8,257 |
Right-of-use assets obtained in exchange for lease obligations: | ||
Operating leases | $ 10,061 | $ 18,222 |
Leases - Schedule of Lease Payments Due Related To Lease Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Operating Lease Liabilities Payments Due [Line Items] | ||
Remainder of 2023 | $ 13,990 | |
2024 | 26,350 | |
2025 | 24,530 | |
2026 | 22,460 | |
2027 | 18,316 | |
Later years | 112,449 | |
Total lease payments | 218,095 | |
Less: imputed interest | (58,719) | |
Total | 159,376 | $ 158,139 |
Related Party | ||
Operating Lease Liabilities Payments Due [Line Items] | ||
Remainder of 2023 | 5,632 | |
2024 | 11,412 | |
2025 | 11,607 | |
2026 | 11,807 | |
2027 | 10,839 | |
Later years | 100,278 | |
Total lease payments | 151,575 | |
Less: imputed interest | (52,634) | |
Total | 98,941 | |
Nonrelated Party | ||
Operating Lease Liabilities Payments Due [Line Items] | ||
Remainder of 2023 | 8,358 | |
2024 | 14,938 | |
2025 | 12,923 | |
2026 | 10,653 | |
2027 | 7,477 | |
Later years | 12,171 | |
Total lease payments | 66,520 | |
Less: imputed interest | (6,085) | |
Total | $ 60,435 |
Shareholder's Equity and Stock-Based Compensation - Schedule of RSA/RSU Activity (Details) - RSA/RSU |
6 Months Ended |
---|---|
Jun. 30, 2023
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) | 523,377 |
Granted (in shares) | 27,162 |
Vested (in shares) | (123,039) |
Forfeited (in shares) | (14,755) |
Outstanding and unvested - end of period (in shares) | 412,745 |
Cumulative vested shares - end of period (in shares) | 2,352,955 |
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, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | $ 4,906 | $ 5,653 | $ 10,344 | $ 10,025 |
Total Direct Costs | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 2,558 | 3,125 | 5,498 | 5,565 |
Selling, General and Administrative | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | $ 2,348 | $ 2,528 | $ 4,846 | $ 4,460 |
Income Taxes - Narrative (Details) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 19.40% | 20.40% | 17.20% | 13.10% |
U.S. statutory rate | 21.00% | 21.00% |
Commitments and Contingencies - Narrative (Details) $ in Millions |
6 Months Ended |
---|---|
Jun. 30, 2023
USD ($)
| |
Commitments and Contingencies Disclosure [Abstract] | |
Minimum purchase commitments for project related supplies | $ 17.1 |
Entity Wide Disclosures - Summary of Revenue by Major Source (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | $ 460,868 | $ 351,207 | $ 894,942 | $ 682,154 |
Oncology | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 147,089 | 115,542 | 289,040 | 220,755 |
Other | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 101,055 | 73,555 | 188,159 | 143,972 |
Metabolic | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 87,860 | 55,600 | 174,700 | 103,716 |
Cardiology | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 51,130 | 42,027 | 97,747 | 79,423 |
Central Nervous System | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 37,726 | 38,906 | 76,423 | 77,393 |
AVAI | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 36,008 | 25,577 | 68,873 | 56,895 |
Total revenue | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | $ 460,868 | $ 351,207 | $ 894,942 | $ 682,154 |
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