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Jun 30, 2020
Medpace Q2 2020 Earnings Report
Medpace's second quarter results were announced, demonstrating a decrease in revenue and net income compared to the prior-year period, but backlog grew.
Key Takeaways
Medpace Holdings, Inc. reported a decrease in revenue for the second quarter of 2020, with a corresponding decrease in net income compared to the same period in 2019. However, the company's backlog experienced growth, and net new business awards were significant, resulting in a book-to-bill ratio above 1.
Revenue for Q2 2020 decreased by 4.3% to $205.0 million compared to $214.1 million in Q2 2019.
Net new business awards in Q2 2020 were $254.1 million, a 9.0% decrease from $279.2 million in Q2 2019, resulting in a net book-to-bill ratio of 1.24x.
GAAP net income for Q2 2020 was $24.1 million, or $0.64 per diluted share, compared to $27.5 million, or $0.73 per diluted share, in Q2 2019.
Backlog as of June 30, 2020, grew 14.6% to $1.3 billion from $1.2 billion as of June 30, 2019.
Medpace
Medpace
Forward Guidance
The Company forecasts 2020 revenue in the range of $880.0 million to $920.0 million, representing growth of 2.2% to 6.9% over 2019 revenue of $861.0 million. GAAP net income for full year 2020 is forecasted in the range of $136.0 million to $144.0 million. Additionally, full year 2020 EBITDA is expected in the range of $180.0 million to $190.0 million. Based on forecasted 2020 revenue of $880.0 million to $920.0 million and GAAP net income of $136.0 million to $144.0 million, diluted earnings per share (GAAP) is forecasted in the range of $3.62 to $3.83.
Positive Outlook
- Revenue growth of 2.2% to 6.9% over 2019 revenue of $861.0 million
- Full year 2020 GAAP net income is forecasted in the range of $136.0 million to $144.0 million
- Full year 2020 EBITDA is expected in the range of $180.0 million to $190.0 million
- Diluted earnings per share (GAAP) is forecasted in the range of $3.62 to $3.83
- Guidance assumes a full year 2020 tax rate of 15.0% to 16.0%
Challenges Ahead
- Guidance does not reflect the potential impact of any share repurchases the Company may make pursuant to the share repurchase program.
- Potential loss, delay or non-renewal of our contracts, or the non-payment by customers for services we have performed
- The failure to convert backlog to revenue at our present or historical conversion rate
- Decreased operating margins due to increased pricing pressure or other factors
- Failure to perform our services in accordance with contractual requirements, government regulations and ethical considerations