A contract research organization (CRO), Medpace runs the full span of clinical drug trials — from early safety tests to post-market studies — for small and mid-sized biopharma companies, including medical oversight, monitoring, labs, and regulatory work. Founded in Cincinnati in 1992 by Dr. August Troendle, a former FDA reviewer, it was originally called Medical Research Services; the name Medpace blends "medical" with "pace," reflecting its mission to speed trials along. It also built its own software, ClinTrak, to track studies in real time, and keeps its central labs and a Phase I unit on its own Cincinnati campus.
Medpace Q2 revenue rose 17.2% to $707.3M, but operating margin fell 1.6 points sequentially as reimbursed expenses diluted profitability.
growth accelerated, but the mix of business shifted toward lower-margin reimbursed work. Revenue rose 17.2% to $707.3 million and climbed 38.1% to $4.28, driven by a increase in that also pushed down 1.6 points from the prior quarter to 20.0%. The company is growing its top line by running more trials, but a rising share of that revenue passes straight through to costs.
Key takeaways
rose 17.2% to $707.3 million, an acceleration from 14.2% growth in the same quarter a year ago, driven by activity in Metabolic, Oncology, Central Nervous System, and AVAI therapeutic areas.
fell 1.6 points sequentially to20.0% as total direct costs rose19.5%, outpacing growth because of a $65.7 million increase in , which carry little to no margin.
rose34.5% to $121.4 million, a rate well above the17.2% increase, helped by a lower of20.0% compared to27.5% a year ago due to increased Foreign Derived Deduction Eligible Income benefits.
Section summaries
Management's Discussion and Analysis
Revenue grew 17% in Q2 FY2026 to $707M, driven by Metabolic, Oncology, CNS, and AVAI therapeutic areas.
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Net rose 17.2% to $707.3M in Q2 and 21.7% to $1,413.9M in H1, led by growth in Metabolic, Oncology, CNS, and AVAI areas.
Total direct costs increased 19.5% in Q2, mainly from higher (+$65.7M) and personnel costs to support service growth.
rose38.1% to $4.28, outpacing growth as the company continued to shares; $294.7 million was spent on repurchases in the first half of the year.
grew4.9% to $3.01 billion, with $1.95 billion to $1.97 billion expected to convert to over the next twelve months.
Cash and equivalents stood at $502.7 million at quarter-end with no debt outstanding, and $821.7 million remained under the authorization.
What changed
The Q1 FY2026 watch item on whether the20.0% would stabilize or fall further was answered: margin held at20.0% in Q2, down1.6 points from Q4 FY2025 but flat sequentially, as the mix of remained elevated with a $65.7 million increase.
The Q1 FY2026 watch item on whether the would remain near16.1% or swing was answered: the rate rose to20.0% in Q2, up from16.1% in Q1, as the benefit from Foreign Derived Deduction Eligible Income increased but did not fully offset the normalization from the3.0% rate a year ago.
The FY2025 watch item on whether the $1.89-$1.91 billion of expected to convert in2026 would translate into growth above the4.3% backlog growth rate is tracking ahead of pace: H1 revenue of $1,413.9 million already represents roughly three-quarters of that conversion range, and the twelve-month conversion estimate has been raised to $1.95-$1.97 billion.
The FY2025 watch item on whether the21.1% could be maintained if moderated has been answered: reimbursed expenses accelerated rather than moderated, and operating margin fell to20.0% in both Q1 and Q2 FY2026.
What to watch
Whether the20.0% can be maintained in the second half if the mix of remains elevated, given that the $65.7 million increase in Q2 was the primary driver of cost growth outpacing growth.
Whether the $1.95-$1.97 billion of expected to convert over the next twelve months translates into at a pace that sustains growth above20%, given that the company will begin lapping the23.7% growth posted in Q3 FY2025.
The pace of share repurchases against the $821.7 million remaining authorization, now that $294.7 million was spent in H1 and the cash balance stands at $502.7 million with no debt.
Whether the stabilizes near the20.0% level or continues to swing, given that it has ranged from3.0% to27.5% over the past several quarters due to fluctuations in excess tax benefits from and other discrete items.
SG&A rose 3.1% in Q2 on higher personnel costs, but fell 8.2% in H1 due to a $12.9M drop in .
grew 34.5% to $121.4M in Q2, helped by a lower (20.0% vs. 27.5%) from increased Foreign Derived Deduction Eligible Income benefits.
reached $3.01B as of June 30, 2026, up 4.9% , with $1.95–$1.97B expected to convert to in the next twelve months.
was $313.8M in H1; the company repurchased $294.7M of stock and held $502.7M in cash with no debt outstanding.
Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes to our quantitative and qualitative disclosures about market risk as compared to the quantitative and qualitative disclosures about market risk described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
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There have been no material changes to our quantitative and qualitative disclosures about market risk as compared to the quantitative and qualitative disclosures about market risk described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
We are party to legal proceedings incidental to our business. While the outcome of these matters could differ from management’s expectations, we do not believe that the resolution of these matters is reasonably likely to have a material adverse effect to our financial statements…
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We are party to legal proceedings incidental to our business. While the outcome of these matters could differ from management’s expectations, we do not believe that the resolution of these matters is reasonably likely to have a material adverse effect to our financial statements.
For more information, please reference “Note 11 - Commitments and Contingencies” in the notes to our condensed consolidated financial statements.
For a discussion of our potential risks and uncertainties, see the information under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. There have been no significant changes from the risk factors previously disclosed in our…
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For a discussion of our potential risks and uncertainties, see the information under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. There have been no significant changes from the risk factors previously disclosed in our Annual Report.