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What changed in Medpace Holdings, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Medpace Holdings, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+136 added−146 removedSource: 10-K (2026-02-10) vs 10-K (2025-02-11)

Top changes in Medpace Holdings, Inc.'s 2025 10-K

136 paragraphs added · 146 removed · 122 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeIn addition to physical security, we have programs and training in place for First Aid, - 10 - Table of Contents CPR and Fire Wardens for safe evacuations. We are proud of our extremely low incident rates and remain committed to continuously monitoring campus- and policy-related measures that can be incorporated in order to further reduce risk for our associates.
Biggest changeIn addition to physical security, we have programs and training in place for First Aid, CPR and Fire Wardens for safe evacuations. We are proud of our extremely low incident rates and remain committed to - 10 - Table of Contents continuously monitoring campus- and policy-related measures that can be incorporated in order to further reduce risk for our associates.
Clinics : Our clinics conduct studies in normal healthy volunteers, special populations, and patient populations over a spectrum of diseases and is located on our clinical research campus in Cincinnati, Ohio.
Clinics : Our clinics conduct studies in normal healthy volunteers, special populations, and patient populations over a spectrum of diseases and are located on our clinical research campus in Cincinnati, Ohio.
Our commitment to compliance, people, safety, communities and the environment is further described in our 2023-2024 Corporate Responsibility Report published within the Investor Relations section of our website at investor.medpace.com. That report is not part of this Annual Report on Form 10-K.
Our commitment to compliance, people, safety, communities and the environment is further described in our 2025-2026 Corporate Responsibility Report published within the Investor Relations section of our website at investor.medpace.com. That report is not part of this Annual Report on Form 10-K.
As of December 31, 2023 and 2022, we had approximately 5,900 and 5,200 employees, respectively. Our associates are our most important asset and we recognize the importance of motivating and rewarding our associates by providing them with competitive benefits as part of their overall compensation and benefits package.
As of December 31, 2024 and 2023, we had approximately 5,900 employees. Our associates are our most important asset and we recognize the importance of motivating and rewarding our associates by providing them with competitive benefits as part of their overall compensation and benefits package.
Although the duration of trademark registrations varies from country to country, trademarks generally may be renewed indefinitely so long as they are in use and/or their registrations are properly maintained, and so long as they have not been found to have become generic. - 9 - Table of Contents Human Capital As of December 31, 2024 we had approximately 5,900 employees located across 44 countries.
Although the duration of trademark registrations varies from country to country, trademarks generally may be renewed indefinitely so long as they are in use and/or their registrations are properly maintained, and so long as they have not been found to have become generic. - 9 - Table of Contents Human Capital As of December 31, 2025 we had approximately 6,200 employees located across 46 countries.
Approximately 67% of our employees globally are women representing 66% of management and 53% of director level and above positions. In addition, of our U.S. based employees, approximately 17% are non-white, including 13% of management. None of our US employees are covered by a collective bargaining agreement specific to our Company.
Approximately 66% of our employees globally are women representing 65% of management and 52% of director level and above positions. In addition, of our U.S. based employees, approximately 17% are non-white, including 14% of management. None of our US employees are covered by a collective bargaining agreement specific to our Company.
Of the 153 management-level roles that were newly filled in 2024, approximately 67% of these roles were filled by our pipeline of internal talent. Development We have a history of identifying talented individuals and training them to excel in our disciplined operating model.
Of the 182 management-level roles that were newly filled between October 1, 2024 and September 30, 2025, approximately 75% of these roles were filled by our pipeline of internal talent. Development We have a history of identifying talented individuals and training them to excel in our disciplined operating model.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAs a result, we are subject to heightened risks inherent in conducting business internationally, including the following: • conducting a single trial across multiple countries is complex, and issues in one country, such as a failure to comply with local regulations or restrictions, may affect the progress of the trial in the other countries, for example, by limiting the amount of data necessary for a trial to proceed, resulting in delays or potential cancellation of contracts, which in turn may result in loss of revenue; • the United States or other countries could enact legislation or impose regulations or other restrictions, including unfavorable labor regulations or tax policies, which could have an adverse effect on our ability to conduct business in or expatriate profits from those countries; • tax rates in certain foreign countries may exceed those in the United States and foreign earnings may be subject to withholding requirements or the imposition of tariffs, exchange controls or other restrictions, including restrictions on repatriation; • certain foreign countries are expanding or may expand their regulatory framework with respect to patient informed consent, protection and compensation in clinical trials, and privacy, which could delay or inhibit our ability to conduct trials in such jurisdictions or which could materially increase the risks associated with performing trials in such jurisdictions; • certain foreign countries are expanding or may expand their banking regulations that govern international currency transactions, particularly cross-border transfers, which may inhibit our ability to transfer funds into or within a jurisdiction, impeding our ability to pay our principal investigators, vendors and employees, thereby impacting our ability to conduct trials in such jurisdictions; • the regulatory or judicial authorities of foreign countries may not enforce legal rights and recognize business procedures in a manner to which we are accustomed or would reasonably expect; • we may have difficulty complying with a variety of laws and regulations in foreign countries, some of which may conflict with laws in the United States; • potential violations of existing or newly adopted local laws or anti-bribery laws, such as the United States Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act of 2010, may cause a material adverse effect on our business, financial condition, results of operations, cash flows or reputation; • changes in political and economic conditions, including but not limited to inflation, trade and tariffs, may lead to changes in the business environment in which we operate, as well as changes in foreign currency exchange rates; • foreign governments may enact currency exchange controls that may limit the ability to fund our operations or significantly increase the cost of maintaining operations; • customers in foreign jurisdictions may have longer payment cycles, and it may be more difficult to collect receivables in foreign jurisdictions; and • natural disasters, pandemics or international conflict, including terrorist acts, could interrupt our services, endanger our personnel or cause project delays or loss of trial materials or results. • Geopolitical issues in Europe, the Middle East and Asia may impact foreign countries in which we may need to enroll patients in our clinical trials, could cause such clinical trials to be delayed or suspended and could impact operations.
Biggest changeAs a result, we are subject to heightened risks inherent in conducting business internationally, including the following: • conducting a single trial across multiple countries is complex, and issues in one country, such as a failure to comply with local regulations or restrictions, may affect the progress of the trial in the other countries, for example, by limiting the amount of data necessary for a trial to proceed, resulting in delays or potential cancellation of contracts, which in turn may result in loss of revenue; • the United States or other countries could enact legislation or impose regulations or other restrictions, including unfavorable labor regulations or tax policies, which could have an adverse effect on our ability to conduct business in or expatriate profits from those countries; • tax rates in certain foreign countries may exceed those in the United States and foreign earnings may be subject to withholding requirements or the imposition of tariffs, exchange controls or other restrictions, including restrictions on repatriation; • certain foreign countries are expanding or may expand their regulatory framework with respect to patient informed consent, protection and compensation in clinical trials, and privacy, which could delay or inhibit our ability to conduct trials in such jurisdictions or which could materially increase the risks associated with performing trials in such jurisdictions; • certain foreign countries are expanding or may expand their banking regulations that govern international currency transactions, particularly cross-border transfers, which may inhibit our ability to transfer funds into or within a jurisdiction, impeding our ability to pay our principal investigators, vendors and employees, thereby impacting our ability to conduct trials in such jurisdictions; • the regulatory or judicial authorities of foreign countries may not enforce legal rights and recognize business procedures in a manner to which we are accustomed or would reasonably expect; • we may have difficulty complying with a variety of laws and regulations in foreign countries, some of which may conflict with laws in the United States; • potential violations of existing or newly adopted local laws or anti-bribery laws, such as the United States Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act of 2010, may cause a material adverse effect on our business, financial condition, results of operations, cash flows or reputation; • changes in political and economic conditions, including but not limited to inflation, trade policy and tariffs, may lead to changes in the business environment in which we operate, as well as changes in foreign currency exchange rates; • tariffs imposed by the U.S. government on certain imported goods, equipment, technology, or supplies used in our clinical trials, any retaliatory and/or reciprocal tariffs imposed on U.S. exports by foreign countries, including China, as well as any additional tariffs, duties, or other trade measures or restrictions could increase our operating costs, disrupt our global supply chain, lead to changes in the business environment in which we operate, or otherwise have a material adverse effect on our business, financial condition, or results of operations; • foreign governments may enact currency exchange controls that may limit the ability to fund our operations or significantly increase the cost of maintaining operations; • customers in foreign jurisdictions may have longer payment cycles, and it may be more difficult to collect receivables in foreign jurisdictions; • natural disasters, pandemics or international conflict, including terrorist acts, could interrupt our services, endanger our personnel or cause project delays or loss of trial materials or results; and • Geopolitical issues in Europe, the Middle East, Asia, and South America may impact foreign countries in which we may need to enroll patients in our clinical trials, could cause such clinical trials to be delayed or suspended and could impact operations.
Business and Economic Risks • The potential loss, delay or non-renewal of our contracts, or the non-payment by our customers for services that we have performed, could adversely affect our results. - 11 - Table of Contents • Our backlog may not convert to net revenue at our historical conversion rates. • Our operating results have historically fluctuated between fiscal quarters and years and may continue to fluctuate in the future, which may adversely affect the market price of our stock. • Our operating margins could decrease due to increased pricing pressure or other pressures, if we are unable to either achieve efficiencies in our operating expenses or grow revenues at a rate faster than expenses. • Our customer or therapeutic area concentration may have a material adverse effect on our business, financial condition, results of operations or cash flows. • We bear financial risk if we underprice our fixed-fee contracts or overrun cost estimates, and our financial results can also be adversely affected by failure to receive approval for change orders or delays in documenting change orders. • Our business and operations may be impacted in the future by epidemics, pandemics or widespread public health crisis. • If we are unable to successfully execute our growth strategies or manage our growth effectively, our results of operations or financial condition could be adversely affected. • If we are unable to recruit suitable investigators and enroll patients for our customers’ clinical trials, our clinical development business may suffer. • The failure of third parties to provide us critical support services could materially adversely affect our business, financial condition, results of operations, cash flows or reputation. • Current or potential future investments by the Company in our customers’ businesses or products could have a negative impact on our financial results. • Continued evolution and use of machine learning and generative artificial intelligence ("AI"), including risks arising from insufficient human oversight of AI or a lack of controls and procedures monitoring the use of AI in day-to-day operations as well as from potential future competitive disadvantages related to a lack of investment in AI tools, could have a negative impact on our financial results.
Business and Economic Risks • The potential loss, delay or non-renewal of our contracts, or the non-payment by our customers for services that we have performed, could adversely affect our results. • Our backlog may not convert to net revenue at our historical conversion rates. - 11 - Table of Contents • Our operating results have historically fluctuated between fiscal quarters and years and may continue to fluctuate in the future, which may adversely affect the market price of our stock. • Our operating margins could decrease due to increased pricing pressure or other pressures, if we are unable to either achieve efficiencies in our operating expenses or grow revenues at a rate faster than expenses. • Our customer or therapeutic area concentration may have a material adverse effect on our business, financial condition, results of operations or cash flows. • We bear financial risk if we underprice our fixed-fee contracts or overrun cost estimates, and our financial results can also be adversely affected by failure to receive approval for change orders or delays in documenting change orders. • Our business and operations may be impacted in the future by epidemics, pandemics or widespread public health crisis. • If we are unable to successfully execute our growth strategies or manage our growth effectively, our results of operations or financial condition could be adversely affected. • If we are unable to recruit suitable investigators and enroll patients for our customers’ clinical trials, our clinical development business may suffer. • The failure of third parties to provide us critical support services could materially adversely affect our business, financial condition, results of operations, cash flows or reputation. • Current or potential future investments by the Company in our customers’ businesses or products could have a negative impact on our financial results. • Continued evolution and use of machine learning and generative artificial intelligence ("AI"), including risks arising from insufficient human oversight of AI or a lack of controls and procedures monitoring the use of AI in day-to-day operations as well as from potential future competitive disadvantages related to a lack of investment in AI tools, could have a negative impact on our financial results.
By way of example, in March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or collectively, the Affordable Care Act, was signed into law, which, among other things, expanded, over time, health insurance coverage, imposed health industry cost containment measures, enhanced remedies against healthcare fraud and abuse, added new transparency requirements for healthcare and health insurance industries, imposed new taxes and fees on pharmaceutical and medical device manufacturers, added new requirements for certain applicable drug and device manufacturers to disclose payments to physicians, including principal investigators, and imposed additional health policy - 20 - Table of Contents reforms, any of which may significantly impact the biopharmaceutical industry.
By way of example, in March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or collectively, the Affordable Care Act, was signed into law, which, among other things, expanded, over time, health insurance coverage, imposed health industry cost containment measures, enhanced remedies against healthcare fraud and - 20 - Table of Contents abuse, added new transparency requirements for healthcare and health insurance industries, imposed new taxes and fees on pharmaceutical and medical device manufacturers, added new requirements for certain applicable drug and device manufacturers to disclose payments to physicians, including principal investigators, and imposed additional health policy reforms, any of which may significantly impact the biopharmaceutical industry.
In addition, we may be more susceptible to these risks as we enter and continue to target growth in emerging countries and regions, including Asia, Eastern Europe and Latin America, which may be subject to a relatively higher risk of political instability, economic volatility, crime, corruption and social and ethnic unrest, all of which are exacerbated in many cases by a lack of an independent and experienced judiciary and uncertainties in how local law is applied and enforced.
In addition, we may be more susceptible to these risks as we enter and continue to target growth in emerging countries and regions, including Asia, Eastern Europe and Latin America, which may be subject to a relatively higher risk of political instability, economic volatility, crime, corruption and social and ethnic unrest, all of which are exacerbated in many cases by a lack of an independent and experienced judiciary and uncertainties in how local law is - 19 - Table of Contents applied and enforced.
Despite any precautions we take, damage from fire, floods, hurricanes, power loss, telecommunications - 17 - Table of Contents failures, computer viruses, information system intrusions or security breaches and similar events at our facilities or at those of our third party provider that backs up our data centers could result in interruptions in the flow of data to our servers and from our servers to our customers.
Despite any precautions we take, damage from fire, floods, hurricanes, power loss, telecommunications failures, computer viruses, information system intrusions or security breaches and similar events at our facilities or at those of our third party provider that backs up our data centers could result in interruptions in the flow of data to our servers and from our servers to our customers.
One or more CROs could engage in or fail to detect malfeasance, such as inadequately monitoring sites, producing inaccurate databases or analysis, falsifying patient records, and performing incomplete lab work, or take other actions that would reduce the confidence of our customers in the CRO industry.
One or more CROs could engage in or fail to detect malfeasance, such - 21 - Table of Contents as inadequately monitoring sites, producing inaccurate databases or analysis, falsifying patient records, and performing incomplete lab work, or take other actions that would reduce the confidence of our customers in the CRO industry.
Additional legislation or regulation of this type might, among other things, require us to implement new security measures and processes or bring within the legislation or regulation de-identified health or other personal data, each of - 25 - Table of Contents which may require substantial expenditures or limit our ability to offer some of our services.
Additional legislation or regulation of this type might, among other things, require us to implement new security measures and processes or bring within the legislation or regulation de-identified health or other personal data, each of which may require substantial expenditures or limit our ability to offer some of our services.
Federal, state and foreign governments may propose or have adopted additional legislation governing the collection, possession, use or dissemination of personal data, such as personal health information, and personal financial data as well as security breach notification rules for loss or theft of or unauthorized access to such data.
Federal, state and foreign governments may propose or have adopted additional - 25 - Table of Contents legislation governing the collection, possession, use or dissemination of personal data, such as personal health information, and personal financial data as well as security breach notification rules for loss or theft of or unauthorized access to such data.
Upon a distribution of our common stock held by Medpace Investors, our Chief Executive Officer would receive approximately 85.7% of such distributed shares. Accordingly, August J.
Upon a distribution of our common stock held by Medpace Investors, our Chief Executive Officer would receive approximately 85.8% of such distributed shares. Accordingly, August J.
These - 16 - Table of Contents considerations might result in additional costs to us or otherwise adversely impact the progress of a clinical trial, our being unable to successfully achieve our projected development timelines, or potentially even lead to the termination of ongoing clinical trials or development of a product.
These considerations might result in additional costs to us or otherwise adversely impact the progress of a clinical trial, our being unable to successfully achieve our projected development timelines, or potentially even lead to the termination of ongoing clinical trials or development of a product.
For additional information on related person transactions involving us, see the “Certain Relationships” section in our Proxy Statement for our 2025 Annual Meeting of Stockholders.
For additional information on related person transactions involving us, see the “Certain Relationships” section in our Proxy Statement for our 2026 Annual Meeting of Stockholders.
The materialization of any of these risks may impede the processing of data, the delivery of databases and services and the day-to-day management of our business and could result in the corruption, loss or unauthorized disclosure of proprietary, confidential or other data.
The materialization of any of these risks may impede the processing of data, the delivery of databases and services and the day-to-day management of our business and could result in the corruption, loss or unauthorized disclosure of proprietary, - 17 - Table of Contents confidential or other data.
As a - 21 - Table of Contents result, the willingness of biopharmaceutical companies to outsource R&D services to CROs could diminish and our business could thus be harmed materially by events outside our control.
As a result, the willingness of biopharmaceutical companies to outsource R&D services to CROs could diminish and our business could thus be harmed materially by events outside our control.
For example, if we are unable to engage investigators to conduct clinical trials as planned or enroll sufficient patients in clinical trials, we may need to expend additional funds to obtain access to resources or else be compelled to delay or modify the clinical trial plans.
For example, if we are unable to engage - 16 - Table of Contents investigators to conduct clinical trials as planned or enroll sufficient patients in clinical trials, we may need to expend additional funds to obtain access to resources or else be compelled to delay or modify the clinical trial plans.
Our customer or therapeutic area concentration may have a material adverse effect on our business, financial condition, results of operations or cash flows. Although we did not have any customer that represented 10% or more of our net revenue during the year ended December 31, 2024, we derive approximately 28.9% of our net revenue from our top ten customers.
Our customer or therapeutic area concentration may have a material adverse effect on our business, financial condition, results of operations or cash flows. Although we did not have any customer that represented 10% or more of our net revenue during the year ended December 31, 2025, we derive approximately 35.1% of our net revenue from our top ten customers.
Clinical trials can be costly and for the year ended December 31, 2024, 79% and 17% of our net revenue was derived from small biopharmaceutical companies and mid-sized biopharmaceutical companies, respectively, which may have limited access to capital. In addition, we provide services to our customers before they pay us for some of our services.
Clinical trials can be costly and for the year ended December 31, 2025, 82% and 13% of our net revenue was derived from small biopharmaceutical companies and mid-sized biopharmaceutical companies, respectively, which may have limited access to capital. In addition, we provide services to our customers before they pay us for some of our services.
Factors that may affect our effective income tax rate include, but are not limited to: • the requirement to exclude from our quarterly worldwide effective income tax calculations losses in jurisdictions where no income tax benefit can be recognized; • actual and projected full year pre-tax income, including differences between actual and anticipated income before taxes in various jurisdictions; • changes in tax laws, or in the interpretation or application of tax laws, in various taxing jurisdictions; • audits or other challenges by taxing authorities; • changes to intercompany transfer pricing policies or changes in laws within foreign tax jurisdictions • the establishment of valuation allowances against a portion or all of certain deferred income tax assets if we determined that it is more likely than not that future income tax benefits will not be realized; and • changes in the relative mix and size of clinical trials and staffing levels in various tax jurisdictions.
Factors that may affect our effective income tax rate include, but are not limited to: • the requirement to exclude from our quarterly worldwide effective income tax calculations losses in jurisdictions where no income tax benefit can be recognized; • actual and projected full year pre-tax income, including differences between actual and anticipated income before taxes in various jurisdictions; • changes in tax laws, or in the interpretation or application of tax laws, in various taxing jurisdictions; • audits or other challenges by taxing authorities; • changes to intercompany transfer pricing policies or changes in laws within foreign tax jurisdictions • the establishment of valuation allowances against a portion or all of certain deferred income tax assets if we determined that it is more likely than not that future income tax benefits will not be realized; and • changes in the relative mix and size of clinical trials and staffing levels in various tax jurisdictions. - 24 - Table of Contents These changes may cause fluctuations in our effective income tax rate that could adversely affect our results of operations and cause fluctuations in our earnings and earnings per share.
Any natural disaster or catastrophic event affecting us or our customers, - 27 - Table of Contents investigators or collaboration partners could have a significant negative impact on our operations and financial performance.
Any natural disaster or catastrophic event affecting us or our customers, investigators or collaboration partners could have a significant negative impact on our operations and financial performance.
The departure of any key contributor, the payment of increased compensation to attract and retain qualified personnel or our inability to continue to identify, attract and retain qualified personnel or replace any departed personnel in a timely fashion may impact our ability to grow our business and compete effectively in our industry and may negatively affect our business, financial condition, results of operations, cash flows or reputation.
The departure of any key contributor, the payment of increased compensation to attract and retain qualified personnel or our inability to continue to identify, attract and retain qualified personnel or replace any departed personnel in a timely fashion may impact our ability to grow our business and compete effectively in our industry and may negatively affect our business, financial condition, results of operations, cash flows or reputation. - 27 - Table of Contents Our operations might be affected by the occurrence of a natural disaster or other catastrophic event.
The materialization of any such risks could have an adverse impact on our financial condition, results of operations, cash flows and reputation. - 19 - Table of Contents Due to the global nature of our business, we may be exposed to liabilities under the Foreign Corrupt Practices Act and various other anti-corruption laws, and any allegation or determination that we violated these laws could have a material adverse effect on our business.
Due to the global nature of our business, we may be exposed to liabilities under the Foreign Corrupt Practices Act and various other anti-corruption laws, and any allegation or determination that we violated these laws could have a material adverse effect on our business.
We conduct activities that have involved, and may continue to involve, the controlled use of hazardous materials and the creation of hazardous substances, including medical waste and other highly regulated substances.
Our operations involve the use and disposal of hazardous substances and waste which can give rise to liability that could adversely impact our financial condition. We conduct activities that have involved, and may continue to involve, the controlled use of hazardous materials and the creation of hazardous substances, including medical waste and other highly regulated substances.
However, it is possible we could be found liable for claims with respect to the actions of third party investigators and the institutions at which clinical trials may be conducted. - 23 - Table of Contents Our operations involve the use and disposal of hazardous substances and waste which can give rise to liability that could adversely impact our financial condition.
However, it is possible we could be found - 23 - Table of Contents liable for claims with respect to the actions of third party investigators and the institutions at which clinical trials may be conducted.
There is a risk that we may initiate a clinical trial for a customer, and then the customer becomes unwilling or unable to fund the completion of the trial.
Insufficient customer funding to complete a clinical trial. As noted above, clinical trials can cost up to tens of millions of dollars. There is a risk that we may initiate a clinical trial for a customer, and then the customer becomes unwilling or unable to fund the completion of the trial.
Troendle, our Chief Executive Officer and founder, through his direct ownership of 654,656 shares of our common stock and his beneficial ownership of 4,733,019 shares of our common stock held by Medpace Investors LLC (“Medpace Investors”), controls approximately 17.6% of the outstanding shares of our common - 26 - Table of Contents stock.
As of December 31, 2025, August J. Troendle, our Chief Executive Officer and founder, through his direct ownership of 646,184 shares of our common stock and his beneficial ownership of 4,733,019 shares of our common stock held by Medpace Investors LLC (“Medpace Investors”), controls approximately 19.0% of the outstanding shares of our common stock.
These changes may cause fluctuations in our effective income tax rate that could adversely affect our results of operations and cause fluctuations in our earnings and earnings per share. - 24 - Table of Contents If we fail to comply with federal, state and foreign healthcare laws, including fraud and abuse laws, we could face substantial penalties and our business, results of operations, financial condition and prospects could be adversely affected.
If we fail to comply with federal, state and foreign healthcare laws, including fraud and abuse laws, we could face substantial penalties and our business, results of operations, financial condition and prospects could be adversely affected.
Several large biopharmaceutical companies have recently completed mergers and acquisitions that will consolidate the outsourcing trends and R&D expenditures into fewer companies, and many larger and medium sized biopharmaceutical companies have been acquiring smaller biopharmaceutical companies. As a result of this and future consolidations, our customer diversity may decrease and our business may be adversely affected.
Several large biopharmaceutical companies have recently completed mergers and acquisitions that will consolidate the outsourcing trends and R&D expenditures into fewer companies, and many larger and medium sized biopharmaceutical companies have been acquiring smaller biopharmaceutical companies which could include existing customers.
Our operations might be affected by the occurrence of a natural disaster or other catastrophic event. We depend on our customers, investigators, laboratories and other facilities for the continued operation of our business.
We depend on our customers, investigators, laboratories and other facilities for the continued operation of our business.
The biopharmaceutical industry has a history of patent and other intellectual property litigation, and we might be involved in costly intellectual property lawsuits. The biopharmaceutical industry has a history of intellectual property litigation, and these lawsuits will likely continue in the future.
As a result of this and future consolidations, our customer diversity may decrease and our business may be adversely affected. The biopharmaceutical industry has a history of patent and other intellectual property litigation, and we might be involved in costly intellectual property lawsuits.
There is a risk that either our customers or regulatory authorities could claim that we performed our services improperly or that we are responsible for clinical trial or program compliance. If our customers or regulatory authorities make such claims against us, we could be subject to significant costs in defending our activities and potential damages, fines or penalties.
There is a risk that either our customers or regulatory authorities could claim that we performed our services improperly or that we are responsible for clinical trial or program compliance.
Changes in climate patterns or unusual weather at some of our locations can lead to increased energy usage and costs, or otherwise adversely impact our facilities and operations and disrupt our ability to conduct clinical trials in the normal course.
Changes in climate patterns or unusual weather at some of our locations can lead to increased energy usage and costs, or otherwise adversely impact our facilities and operations and disrupt our ability to conduct clinical trials in the normal course. - 26 - Table of Contents Structural and Organizational Risks Our Chief Executive Officer and founder controls a substantial amount of our outstanding common stock and his interests may be different from or conflict with those of our other shareholders.
Accordingly, even without wrongdoing on our part, we may face patent infringement suits by companies that have patents for similar business processes or other suits alleging infringement of their intellectual property rights. Legal proceedings relating to intellectual property could be expensive, take significant time and divert management’s attention from other business concerns, regardless of the outcome of the litigation.
The biopharmaceutical industry has a history of intellectual property litigation, and these lawsuits will likely continue in the future. Accordingly, even without wrongdoing on our part, we may face patent infringement suits by companies that have patents for similar business processes or other suits alleging infringement of their intellectual property rights.
In addition, negative publicity regarding regulatory compliance of our customers’ clinical trials, programs or products could have an adverse effect on our business and reputation. - 22 - Table of Contents Insufficient customer funding to complete a clinical trial. As noted above, clinical trials can cost up to tens of millions of dollars.
If our customers or regulatory authorities make such claims against us, we could be subject to significant costs in defending our activities and potential damages, - 22 - Table of Contents fines or penalties. In addition, negative publicity regarding regulatory compliance of our customers’ clinical trials, programs or products could have an adverse effect on our business and reputation.
Removed
Structural and Organizational Risks Our Chief Executive Officer and founder controls a substantial amount of our outstanding common stock and his interests may be different from or conflict with those of our other shareholders. As of December 31, 2024, August J.
Added
The materialization of any such risks could have an adverse impact on our financial condition, results of operations, cash flows and reputation.
Added
Legal proceedings relating to intellectual property could be expensive, take significant time and divert management’s attention from other business concerns, regardless of the outcome of the litigation.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeCriteria used to evaluate materiality include both quantitative and qualitative factors, including, but not limited to, financial loss, risk to reputation and competitiveness, harm to customer or vendor relationships and the potential for litigation or regulatory investigations.
Biggest changeCriteria used to evaluate materiality include both quantitative and qualitative factors, including, but not limited to, financial loss, risk to reputation and competitiveness, harm to customer or vendor relationships and the potential for litigation or regulatory investigations. - 28 - Table of Contents Incidents determined to be material will then be communicated immediately to the CEO and then to the Board of Directors after such determination and disclosed in a Form 8-K within the required timeframe upon such determination.
As of the date of this Annual Report on Form 10-K, we are not aware of any risks from cybersecurity threats that have materially affected or are reasonably likely to materially affect the Company, its business strategy, results of operations or - 28 - Table of Contents financial condition. See Item 1A.
As of the date of this Annual Report on Form 10-K, we are not aware of any risks from cybersecurity threats that have materially affected or are reasonably likely to materially affect the Company, its business strategy, results of operations or financial condition. See Item 1A.
The full Board of Directors provides an additional level of cybersecurity risk oversight. Medpace assesses and evaluates cybersecurity risk using the framework established by the National Institute of Standards and Technology (NIST).
As a part of the Company's overall integrated approach to risk management, the Company assesses, identifies and manages cybersecurity related risks. The full Board of Directors provides an additional level of cybersecurity risk oversight. Medpace assesses and evaluates cybersecurity risk using the framework established by the National Institute of Standards and Technology (NIST).
Removed
Incidents determined to be material will then be communicated immediately to the CEO and then to the Board of Directors after such determination and disclosed in a Form 8-K within the required timeframe upon such determination. As a part of the Company's overall integrated approach to risk management, the Company assesses, identifies and manages cybersecurity related risks.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeMost of our global facilities consist solely of office space; however, we have five laboratories located across four locations and two logistics warehouses. Our principal executive offices are located on a corporate campus in Cincinnati, Ohio consisting of five buildings totaling approximately 650,000 square feet.
Biggest changeMost of our global facilities consist solely of office space; however, we have five laboratories located across four locations and two logistics warehouses. Our principal executive offices are located on a corporate campus in Cincinnati, Ohio consisting of five buildings totaling approximately 620,000 square feet. The leases for three buildings in our Cincinnati site expire in 2027, 2032 and 2040.
Item 2. Properties. As of December 31, 2024, we had leased commercial locations in various countries across North America, Europe, Asia, South America, Africa and Australia. We also own buildings in Leuven, Belgium for our laboratory, office and logistics operations.
Item 2. Properties. As of December 31, 2025, we had leased commercial locations in various countries across North America, Europe, Asia, South America, Africa and Australia. We also own buildings in Leuven, Belgium for our laboratory, office and logistics operations.
None of our leases are individually material to our business model and all have either options to renew or are located in major markets with what we believe are adequate opportunities to continue business operations on terms satisfactory to us.
We own the fourth and fifth buildings. None of our leases are individually material to our business model and all have either options to renew or are located in major markets with what we believe are adequate opportunities to continue business operations on terms satisfactory to us.
Removed
The leases for four buildings in our Cincinnati site expire in 2027, 2027, 2032 and 2040. We own the fifth building.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+0 added−5 removed8 unchanged
Biggest changePurchases of Equity Securities by the Issuer and Affiliated Purchasers 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. For the year ended December 31, 2022, the Company repurchased 5,463,244 shares for $800.5 million under this repurchase program.
Biggest changePurchases of Equity Securities by the Issuer and Affiliated Purchasers Share Repurchases In 2022, the Company's Board of Directors (the "Board") approved a share repurchase program which has been amended several times to increase the aggregate amount of the share repurchase authorization.
The Company constructively retires the repurchased shares associated with - 30 - Table of Contents these approved share repurchase programs, except for a small portion which were retained as Treasury Shares on the consolidated statements of shareholders' equity. Retired share repurchase amounts paid in excess of par value are reflected within Retained earnings/Accumulated deficit in the Company’s consolidated balance sheets.
The Company constructively retires the repurchased shares associated with these approved share repurchase programs, except for a small portion which were retained as Treasury Shares on the consolidated statements of shareholders' equity. Retired share repurchase amounts paid in excess of par value are reflected within Retained earnings/Accumulated deficit in the Company’s consolidated balance sheets.
Our common stock is listed for trading on the NASDAQ under the symbol “MEDP.” The Stock Price Performance Graph set forth below compares the cumulative total shareholder return on our common stock for the period from December 31, 2019 through December 31, 2024, with the cumulative total return of the Nasdaq Composite Index and the Nasdaq Health Care Index over the same period.
Our common stock is listed for trading on the NASDAQ under the symbol “MEDP.” The Stock Price Performance Graph set forth below compares the cumulative total shareholder return on our common stock for the period from December 31, 2020 through December 31, 2025, with the cumulative total return of the Nasdaq Composite Index and the Nasdaq Health Care Index over the same period.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information for Common Stock Our common stock trades on the NASDAQ Global Select Market under the symbol “MEDP”. Holders of Record On February 7, 2025, there were approximately 8 shareholders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information for Common Stock Our common stock trades on the NASDAQ Global Select Market under the symbol “MEDP”. Holders of Record On February 6, 2026, there were approximately 7 shareholders of record of our common stock.
The comparison assumes $100 was invested on December 31, 2019 in the common stock of Medpace Holdings, Inc., in the Nasdaq Composite Index, and in the Nasdaq Health Care Index and assumes reinvestment of dividends, if any. The stock price performance of the following graph is not necessarily indicative of future - 31 - Table of Contents stock price performance.
The comparison assumes $100 was invested on December 31, 2020 in the common stock of Medpace Holdings, Inc., in the Nasdaq Composite Index, and in the Nasdaq Health Care Index and assumes reinvestment of dividends, if any. The stock price performance of the following graph is not necessarily indicative of future stock price performance.
Stock Performance Graph The information included under the heading “Stock Performance Graph” is “furnished” and not “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed to be “soliciting material” subject to Regulation 14A or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act of 1934, as amended.
The repurchase programs may be suspended or discontinued at any time without notice. - 30 - Table of Contents Stock Performance Graph The information included under the heading “Stock Performance Graph” is “furnished” and not “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed to be “soliciting material” subject to Regulation 14A or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act of 1934, as amended.
As of February 6, 2025, the Company's Board of Directors approved an increase of $600.0 million to the Company's new stock repurchase program. Repurchases under the share repurchase programs are executed in the open market or negotiated transactions under trading plans established pursuant to Rule 10b5-1.
As of December 31, 2025, the Company has remaining authorization of $821.7 million under the repurchase program. There were no share repurchases in the fourth quarter of 2025. Repurchases under the share repurchase programs are executed in the open market or negotiated transactions under trading plans established pursuant to Rule 10b5-1.
For the year ended December 31, 2023, the Company repurchased 781,068 shares for $144.0 million under the new repurchase program. For the year ended December 31, 2022, the Company repurchased 228,247 shares for $47.2 million under the new repurchase program. As of December 31, 2024, we have remaining authorization of $134.6 million under the new repurchase program.
For the year ended December 31, 2025, the Company repurchased 2,961,924 shares for $912.9 million under the repurchase program. For the year ended December 31, 2024, the Company repurchased 527,160 shares for $174.2 million under the repurchase program. For the year ended December 31, 2023, the Company repurchased 781,068 shares for $144.0 million under the repurchase program.
Removed
As of June 30, 2022, the Company completed all authorized share repurchases under this repurchase program. In the fourth quarter of 2022, the Board approved a new stock repurchase program of up to $500.0 million. For the year ended December 31, 2024, the Company repurchased 527,160 shares for $174.2 million under the new repurchase program.
Removed
The repurchase programs may be suspended or discontinued at any time without notice.
Removed
This table provides certain information with respect to our monthly repurchases of the Company's common stock during the fourth quarter of fiscal year 2024: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publically Announced Plan Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plan November 1, 2024, through November 30, 2024 347,922 $ 326.40 8,381,359 $ 195,273,292 December 1, 2024, through December 31, 2024 179,238 $ 338.26 8,560,597 $ 134,644,869 Total 527,160 $ 330.43 8,560,597 All share repurchases were made using cash resources and executed pursuant to established Rule 10b5-1 trading plans.
Removed
Our share repurchases may occur through open market purchases or negotiated transactions. The above table excludes shares repurchased to settle employee tax withholdings related to the vesting of stock awards. We returned $174.2 million to shareholders in the form of share repurchases in the fourth quarter of fiscal year 2024.
Removed
Refer to Note 1 – Basis of Presentation of the Notes to the Consolidated Financial Statements (Part II, Item 8 of this Form 10-K) for further discussion regarding share repurchases.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

57 edited+11 added−15 removed65 unchanged
Biggest changeYear Ended December 31, 2024 compared to Year Ended December 31, 2023 Year Ended December 31, (Amounts in thousands, except percentages) 2024 2023 Change % Change Revenue, net $ 2,109,054 $ 1,885,842 $ 223,212 11.8 % Direct service costs, excluding depreciation and amortization 682,095 638,249 43,846 6.9 % Reimbursed out-of-pocket expenses 770,654 723,088 47,566 6.6 % Total direct costs 1,452,749 1,361,337 91,412 6.7 % Selling, general and administrative 180,184 161,352 18,832 11.7 % Depreciation 27,808 24,129 3,679 15.2 % Amortization 1,443 2,199 (756) (34.4) % Total operating expenses 1,662,184 1,549,017 113,167 7.3 % Income from operations 446,870 336,825 110,045 Miscellaneous income (expense), net 4,056 (655) 4,711 Interest income (expense), net 24,996 (488) 25,484 Income before income taxes 475,922 335,682 140,240 Income tax provision 71,536 52,872 18,664 Net income $ 404,386 $ 282,810 $ 121,576 Total revenue Total revenue increased by $223.2 million to $2,109.1 million for the year ended December 31, 2024, from $1,885.8 million for the year ended December 31, 2023.
Biggest changeManagement’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 11, 2025. - 34 - Table of Contents Year Ended December 31, 2025 compared to Year Ended December 31, 2024 Year Ended December 31, (Amounts in thousands, except percentages) 2025 2024 Change % Change Revenue, net $ 2,530,234 $ 2,109,054 $ 421,180 20.0 % Direct service costs, excluding depreciation and amortization 732,128 682,095 50,033 7.3 % Reimbursed out-of-pocket expenses 1,037,488 770,654 266,834 34.6 % Total direct costs 1,769,616 1,452,749 316,867 21.8 % Selling, general and administrative 197,559 180,184 17,375 9.6 % Depreciation 27,178 27,808 (630) (2.3) % Amortization 946 1,443 (497) (34.4) % Total operating expenses 1,995,299 1,662,184 333,115 20.0 % Income from operations 534,935 446,870 88,065 Miscellaneous (expense) income, net (5,338) 4,056 (9,394) Interest income, net 12,780 24,996 (12,216) Income before income taxes 542,377 475,922 66,455 Income tax provision 91,254 71,536 19,718 Net income $ 451,123 $ 404,386 $ 46,737 Total revenue Total revenue increased by $421.2 million, to $2,530.2 million for the year ended December 31, 2025, from $2,109.1 million for the year ended December 31, 2024.
Accounts receivable and unbilled, net, and advanced billings fluctuate on a regular basis as we perform our services, bill our customers and ultimately collect on those receivables.
Advanced billings and accounts receivable and unbilled, net fluctuate on a regular basis as we perform our services, bill our customers and ultimately collect on those receivables.
Actual results and the timing of events may differ materially from those indicated in such forward-looking statements. Important factors that may cause such differences include, but are not limited to, those discussed under the “Forward-Looking Statements” above and “Item IA. Risk Factors” in Part I of this Annual Report on Form 10-K.
Actual results and the timing of events may differ materially from those indicated in such forward-looking statements. Factors that may cause such differences include, but are not limited to, those discussed under the “Forward-Looking Statements” above and “Item IA. Risk Factors” in Part I of this Annual Report on Form 10-K.
A variety of discretionary awards (collectively, the “Awards”) for employees and non-employee directors are authorized under the 2016 Plan, including vested common shares, stock options, stock appreciation rights (SARs), restricted stock awards (RSAs), restricted stock units (RSUs), or other cash based or stock dividend equivalent awards.
A variety of discretionary awards (collectively, the “Awards”) for employees and non-employee directors are authorized under the Amended 2016 Plan, including vested common shares, stock options, stock appreciation rights (SARs), restricted stock awards (RSAs), restricted stock units (RSUs), or other cash based or stock dividend equivalent awards.
As of December 31, 2024 and 2023, as a result of an updated analysis of future cash needs in the United States and opportunities for investment outside the United States, we assert that all foreign earnings will be indefinitely reinvested and therefore we have not provided taxes on these earnings.
As of December 31, 2025 and 2024, as a result of an updated analysis of future cash needs in the United States and opportunities for investment outside the United States, we assert that all foreign earnings will be indefinitely reinvested and therefore we have not provided taxes on these earnings.
As of December 31, 2024, cash commitments to support operating business needs include lease liabilities discussed in Note 8 of the Consolidated Financial Statements, purchase commitments discussed in Note 12 of the Consolidated Financial Statements and capital expenditures primarily related to infrastructure investments in our facilities, equipment and technology.
As of December 31, 2025, cash commitments to support operating business needs include lease liabilities discussed in Note 8 of the Consolidated Financial Statements, purchase commitments discussed in Note 12 of the Consolidated Financial Statements and capital expenditures primarily related to infrastructure investments in our facilities, equipment and technology.
The 2016 Plan provides for long-term equity incentive compensation for key employees, officers and non-employee directors.
The Amended 2016 Plan provides for long-term equity incentive compensation for key employees, officers and non-employee directors.
This section of this Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023. For a comparison of our results of operations for the fiscal years ended December 31, 2023 and December 31, 2022, see “Part II, Item 7.
This section of this Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. For a comparison of our results of operations for the fiscal years ended December 31, 2024 and December 31, 2023, see “Part II, Item 7.
We have translated the Euro into U.S. dollars using the following average exchange rates based on data obtained from www.xe.com: Year Ended December 31, 2024 2023 U.S. Dollars per Euro: 1.08 1.08 Results of Operations This section generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
We have translated the Euro into U.S. dollars using the following average exchange rates based on data obtained from www.xe.com: Year Ended December 31, 2025 2024 U.S. Dollars per Euro: 1.13 1.08 Results of Operations This section generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.
The calculation of these liabilities involves dealing with uncertainties in the application of complex tax regulations in both domestic and foreign jurisdictions. These positions may be subject to audit and review by tax - 40 - Table of Contents authorities, and may result in future taxes, interest and penalties if we are unsuccessful in defending our positions.
The calculation of these liabilities involves dealing with uncertainties in the application of complex tax regulations in both domestic and foreign jurisdictions. These positions may be subject to audit and review by tax authorities, and may result in future taxes, interest and penalties if we are unsuccessful in defending our positions.
This simplified method utilizes the mid-point between the vesting date and the date of the contractual term. The risk free rate is based on extrapolated rates of U.S. Treasury bonds whose terms are consistent with the expected holding period of the stock options.
This simplified method utilizes the mid-point between the vesting date and the date of the contractual term. The risk free rate is based on extrapolated rates of U.S. Treasury bonds whose terms are consistent - 40 - Table of Contents with the expected holding period of the stock options.
Total Direct Costs Total direct costs are primarily driven by labor and related employee benefits, but also include contracted third party service related expenses, fees paid to site investigators, reimbursed out of pocket expenses, laboratory supplies and other expenses contributing to service delivery.
Total Direct Costs Total direct costs are primarily driven by labor and related employee benefits, but also include contracted third party service related expenses, fees paid to site investigators, reimbursed out of pocket expenses, laboratory supplies and other - 32 - Table of Contents expenses contributing to service delivery.
We believe that we are a partner of choice for small- and mid-sized biopharmaceutical - 32 - Table of Contents companies based on our ability to consistently utilize our full-service, disciplined operating model to deliver timely and high-quality results for our customers.
We believe that we are a partner of choice for small- and mid-sized biopharmaceutical companies based on our ability to consistently utilize our full-service, disciplined operating model to deliver timely and high-quality results for our customers.
Similar to new business awards, the number and amount of cancellations can vary significantly period over period due to timing of customer correspondence and study-specific circumstances. Net new business awards represent gross new business awards received in a period offset by total cancellations in that period.
Similar to new business awards, the number and amount of cancellations can vary significantly period over period due to timing of customer correspondence and study-specific circumstances. - 33 - Table of Contents Net new business awards represent gross new business awards received in a period offset by total cancellations in that period.
We recognize revenue, at an amount to which we expect to be entitled, related to work performed in connection with scope changes when the underlying services are performed and a binding contractual commitment has been established with the customer.
We recognize revenue, at an amount to which we expect to be entitled, related to work performed in connection with scope changes when the underlying services - 38 - Table of Contents are performed and a binding contractual commitment has been established with the customer.
However, we cannot assure you that our business will generate sufficient cash flow from operations, or that future borrowings will be available to us under our Credit Facility or otherwise, in an amount sufficient to fund our liquidity needs.
However, we cannot assure - 36 - Table of Contents you that our business will generate sufficient cash flow from operations, or that future borrowings will be available to us under our Credit Facility or otherwise, in an amount sufficient to fund our liquidity needs.
We have recognized certain liabilities, including penalties and interest in the amount of $6.7 million as of December 31, 2024, within other long-term liabilities on the consolidated balance sheets. These relate to uncertain tax positions that are subject to various assumptions and judgment. Liabilities for these uncertain tax positions are assessed on a position by position basis.
We have recognized certain liabilities, including penalties and interest in the amount of $8.3 million as of December 31, 2025, within other long-term liabilities on the consolidated balance sheets. These relate to uncertain tax positions that are subject to various assumptions and judgment. Liabilities for these uncertain tax positions are assessed on a position by position basis.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 13, 2024. This item and the related discussion contain forward-looking statements reflecting current expectations that involve risks and uncertainties.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 11, 2025. This item and the related - 31 - Table of Contents discussion contain forward-looking statements reflecting current expectations that involve risks and uncertainties.
The increase was primarily attributed to higher reimbursed out-of-pocket expenses and higher personnel costs to support the growth in service activities. Reimbursed out-of-pocket expenses, which can fluctuate significantly from period to period based on the timing of program initiation and closeout, increased $47.6 million for the year ended December 31, 2024, compared to the same period in the prior year.
The increase was primarily attributed to higher reimbursed out-of-pocket expenses and higher personnel costs to support the growth in service activities. Reimbursed out-of-pocket expenses, which can fluctuate significantly from period to period based on the timing of program initiation and closeout, increased $266.8 million for the year ended December 31, 2025, compared to the same period in the prior year.
Capital spending as a percentage of revenue decreased 21 basis points to 1.73% in the year ended December 31, 2024. We expect these activities will be funded from existing cash, cash flow from operations and, if necessary, borrowings under our existing or future credit facilities or other debt.
Capital spending as a percentage of revenue decreased 49 basis points to 1.24% in the year ended December 31, 2025. We expect these activities will be funded from existing cash, cash flow from operations and, if necessary, borrowings under our existing or future credit facilities or other debt.
Our global platform includes approximately 5,900 employees across 44 countries, providing our customers with broad access to diverse markets and patient populations as well as local regulatory expertise and market knowledge. How We Generate Revenue We earn fees through the performance of services detailed in our customer contracts.
Our global platform includes approximately 6,200 employees across 46 countries, providing our customers with broad access to diverse markets and patient populations as well as local regulatory expertise and market knowledge. How We Generate Revenue We earn fees through the performance of services detailed in our customer contracts.
These undistributed earnings of foreign subsidiaries will support future growth in foreign markets and maintain current operating needs of foreign locations. We will continue to monitor our assertion related to investment of foreign earnings. See Note 11 of the Notes to Consolidated Financial Statements for further information regarding this assertion.
These undistributed earnings of foreign subsidiaries will support future growth in foreign markets and maintain current operating needs of foreign locations. We will continue to monitor our assertion related to investment of foreign earnings and how this assertion may be impacted by the OBBBA. See Note 11 of the Notes to Consolidated Financial Statements for further information regarding this assertion.
Reported backlog will fluctuate based on new business awards, changes in scope to existing contracts, cancellations, net revenue recognition on existing contracts and foreign exchange adjustments from non-U.S. dollar denominated backlog. As of December 31, 2024, our backlog increased by $89.2 million, or 3.2% to $2,902.2 million compared to $2,813.0 million as of December 31, 2023.
Reported backlog will fluctuate based on new business awards, changes in scope to existing contracts, cancellations, net revenue recognition on existing contracts and foreign exchange adjustments from non-U.S. dollar denominated backlog. As of December 31, 2025, our backlog increased by $125.0 million, or 4.3% to $3,027.2 million compared to $2,902.2 million as of December 31, 2024.
Based on the analysis of the above factors, we determined that a valuation allowance in the amount of $1.6 million should be recorded as of December 31, 2024 and $1.8 million should be recorded as of December 31, 2023 relating to certain tax credits and other deferred tax assets that are currently not expected to be realized.
Based on the analysis of - 39 - Table of Contents the above factors, we determined that a valuation allowance in the amount of $1.8 million relating to certain foreign and federal deferred tax assets should be recorded as of December 31, 2025 and $1.6 million should be recorded as of December 31, 2024 relating to certain tax credits and other deferred tax assets that are currently not expected to be realized.
As of December 31, 2024, all outstanding stock based awards were classified within equity. The weighted average grant date fair value of employee stock options granted was $148.85, $85.30 and $47.57 for the years ended December 31, 2024, 2023 and 2022, respectively.
As of December 31, 2025, all outstanding stock based awards were classified within equity. The weighted average grant date fair value of employee stock options granted was $140.34, $148.85 and $85.30 for the years ended December 31, 2025, 2024 and 2023, respectively.
Net new business awards were $2,230.0 million and $2,356.7 million for the years ended December 31, 2024 and 2023, respectively. Backlog represents anticipated future net revenue from net new business awards that have commenced, but have not been completed.
Net new business awards were $2,646.8 million and $2,230.0 million for the years ended December 31, 2025 and 2024, respectively. Backlog represents anticipated future net revenue from net new business awards that have commenced, but have not been completed.
The increase was primarily attributed to higher personnel costs to support the growth in service activities. Personnel costs increased by $20.3 million in the year ended December 31, 2024, compared to the same period in the prior year.
The increase was primarily attributed to higher personnel costs to support the growth in service activities. Personnel costs increased by $17.1 million in the year ended December 31, 2025, compared to the same period in the prior year.
The change was mainly attributable to foreign exchange gains or losses that arise in connection with the revaluation of short-term inter-company balances between our domestic and international subsidiaries, gains or losses from foreign currency transactions, such as those resulting from the settlement of third-party accounts receivables and payables denominated in a currency other than the local currency of the entity making the payment and proceeds from the recovery of a note receivable, compared to the same period in the prior year.
This change was mainly attributable to foreign exchange gains or losses that arise in connection with the revaluation of short-term intercompany balances between our domestic and international subsidiaries and from the settlement of third-party accounts receivables and payables denominated in a currency other than the local currency of the entity making the payment, third-party - 35 - Table of Contents investment gains or losses and proceeds from the recovery of a note receivable, compared to the same period in the prior year.
We attempt to negotiate payment terms in order to provide for payments prior to or soon after the provision of services, but this timing of collection can vary significantly on a period by period comparative basis. Net cash flows provided by operating activities were $608.8 million for the year ended December 31, 2024 consisting of net income of $404.4 million.
We attempt to negotiate payment terms in order to provide for payments prior to or soon after the provision of services, but this timing of collection can vary significantly on a period by period comparative basis. Net cash flows provided by operating activities were $713.2 million for the year ended December 31, 2025 beginning with net income of $451.1 million.
Net cash flows provided by operating activities were $433.4 million for the year ended December 31, 2023 consisting of net income of $282.8 million.
Net cash flows provided by operating activities were $608.8 million for the year ended December 31, 2024 consisting of net income of $404.4 million.
Net cash used in investing activities was $34.6 million for the year ended December 31, 2023, primarily consisting of property and equipment expenditures.
Cash Flow from Investing Activities Net cash used in investing activities was $31.1 million for the year ended December 31, 2025, primarily consisting of property and equipment expenditures.
Cash Flow from Financing Activities Net cash used in financing activities was $154.0 million for the year ended December 31, 2024 primarily related to $169.9 million in repurchases of common stock, partially offset by proceeds from stock option exercises of $15.9 million.
Cash Flow from Financing Activities Net cash used in financing activities was $860.4 million for the year ended December 31, 2025 primarily related to $917.4 million in repurchases of common stock, partially offset by proceeds from stock option exercises of $57.0 million.
Our principal sources of liquidity are operating cash flows and from borrowings under our unsecured credit facility consisting of up to a $10.0 million revolving line of credit which we entered into on September 30, 2019 (the “Credit Facility”), and has subsequently been amended.
Our principal sources of liquidity are operating cash flows and from borrowings under our unsecured credit facility consisting of up to a $10.0 million revolving line of credit which we entered into on September 30, 2019 (the “Credit Facility”). All $10.0 million of the line of credit is available for borrowing as of December 31, 2025.
Miscellaneous income (expense), net Miscellaneous income (expense), net changed by $4.7 million, to $4.1 million of income for the year ended December 31, 2024 from $0.7 million of expense for the year ended December 31, 2023.
Miscellaneous (expense) income, net Miscellaneous (expense) income, net changed by $9.4 million of expense, to $5.3 million of expense for the year ended December 31, 2025, from $4.1 million of income for the year ended December 31, 2024.
The higher personnel costs portion increased by $45.9 million in the year ended December 31, 2024, compared to the same period in the prior year. Selling, general and administrative Selling, general and administrative expenses increased by $18.8 million, to $180.2 million for the year ended December 31, 2024 from $161.4 million for the year ended December 31, 2023.
The higher personnel costs portion increased by $43.4 million in the year ended December 31, 2025, compared to the same period in the prior year. Selling, general and administrative Selling, general and administrative expenses increased by $17.4 million, to $197.6 million for the year ended December 31, 2025, from $180.2 million for the year ended December 31, 2024.
Final settlement amounts are agreed to with the customer based on remaining work to be performed. These amounts are included in revenue when we believe the amount can be estimated reliably and its realization is probable.
Final settlement amounts are agreed to with the customer based on remaining work to be performed. These amounts are included in revenue when we believe the amount can be estimated reliably and its realization is probable. In evaluating the probability of recognition, we consider the contractual basis for the settlement amount and the objective evidence available to support the amount.
Year Ended December 31, Cash Flows (Amounts in thousands) 2024 2023 Net cash provided by operating activities $ 608,815 $ 433,374 Net cash used in investing activities (28,308) (34,629) Net cash used in financing activities (154,009) (182,642) Effect of exchange rates on cash, cash equivalents, and restricted cash (2,511) 1,081 Increase in cash, cash equivalents, and restricted cash $ 423,987 $ 217,184 Cash Flows from Operating Activities Cash flows from operations are driven mainly by net income, depreciation, deferred income tax benefit, stock-based compensation expense, noncash lease expense and net movement in advanced billings, accrued expenses, lease liabilities and accounts receivable and unbilled, net.
Year Ended December 31, Cash Flows (Amounts in thousands) 2025 2024 Net cash provided by operating activities $ 713,223 $ 608,815 Net cash used in investing activities (31,140) (28,308) Net cash used in financing activities (860,388) (154,009) Effect of exchange rates on cash, cash equivalents, and restricted cash 5,918 (2,511) (Decrease) increase in cash, cash equivalents, and restricted cash $ (172,387) $ 423,987 Cash Flows from Operating Activities Cash flows from operations are driven mainly by net income, deferred income tax provision (benefit), stock-based compensation expense, depreciation, noncash lease expense and net movement in advanced billings, accounts receivable and unbilled, net and accrued expenses.
The increase in the income tax provision was primarily attributable to the increase in pre-tax book income, which was partially offset by an increase in excess tax benefits recognized from share-based compensation and a decrease in uncertain tax positions, compared to the same period in the prior year.
The increase in the income tax provision was primarily attributable to the increase in pre-tax book income, increase in uncertain tax positions, increase in Global Intangible Low-Taxed Income ("GILTI") (net of foreign tax credits), and decrease in tax benefits related to Foreign Derived Intangible Income ("FDII") which was partially offset by an increase in excess tax benefits recognized from share-based compensation, compared to the same period in the prior year.
Compensation expense related to stock option awards to employees is recognized on a straight line basis based on the grant date fair value over the associated service period of the award, which is equal to the vesting term. - 41 - Table of Contents The following table summarizes the key weighted average assumptions used in the Black-Scholes-Merton option pricing model to calculate the fair value of options during the periods: Year Ended December 31, 2024 2023 2022 Expected holding period - years 4.3 4.1 4.7 Expected volatility 43.4% 45.4% 36.5% Risk-free interest rate 3.7% 3.8% 1.9% Expected dividend yield 0.0% 0.0% 0.0% The assumptions used in the table above reflect both grant date inputs to arrive at the grant date fair values for stock options subject to equity-classified stock compensation accounting and reflect a fair value calculation for stock options outstanding in the period subject to liability-classified stock compensation accounting.
The following table summarizes the key weighted average assumptions used in the Black-Scholes-Merton option pricing model to calculate the fair value of options during the periods: Year Ended December 31, 2025 2024 2023 Expected holding period - years 4.9 4.3 4.1 Expected volatility 43.5% 43.4% 45.4% Risk-free interest rate 4.1% 3.7% 3.8% Expected dividend yield 0.0% 0.0% 0.0% The assumptions used in the table above reflect grant date inputs to arrive at the grant date fair values for stock options subject to equity-classified stock compensation accounting.
We record revenue net of any tax assessments by governmental authorities that are imposed and concurrent with specific revenue generating transactions. Performance Obligations Substantially all of our contracts consist of a single performance obligation, as the promise to transfer the individual services described in the contracts are not separately identifiable from other promises in the contracts, and therefore not distinct.
Performance Obligations Substantially all of our contracts consist of a single performance obligation, as the promise to transfer the individual services described in the contracts are not separately identifiable from other promises in the contracts, and therefore not distinct.
While we do not anticipate that this will have a material impact on our tax provision or effective tax rate, we continue to monitor evolving tax legislation in the jurisdictions in which we operate. Stock Based Compensation In connection with the Company's initial public offering (IPO), the Board approved the 2016 Incentive Award Plan (the “2016 Plan”).
While we do not anticipate that this will have a material impact on our tax provision or effective tax rate, we continue to monitor evolving tax legislation in the jurisdictions in which we operate.
The Organization for Economic Co-operation and Development (OECD) has a framework to implement a global minimum corporate tax of 15% for companies with global revenues and profits above certain thresholds (referred to as Pillar Two), with certain aspects of Pillar Two effective January 1, 2024 and other aspects effective January 1, 2025.
The Organization for Economic Co-operation and Development ("OECD") has a framework to implement a global minimum corporate tax of 15% for companies with global revenues and profits above certain thresholds (referred to as Pillar Two). On January 5, 2026, the OECD/G20 announced the Side-by-Side ("SbS") package, implemented as administrative guidance and modifying the operation of Pillar 2 rules.
The increase was broad based, but primarily driven by strong activity within the Metabolic, Oncology, Cardiology and other uncategorized therapeutic areas, compared to the same period in the prior year. - 35 - Table of Contents Total direct costs Total direct costs increased by $91.4 million, to $1,452.7 million for the year ended December 31, 2024 from $1,361.3 million for the year ended December 31, 2023.
The increase was primarily driven by strong activity within the Metabolic, Oncology and Central Nervous System therapeutic areas, compared to the same period in the prior year. Total direct costs Total direct costs increased by $316.9 million, to $1,769.6 million for the year ended December 31, 2025, from $1,452.7 million for the year ended December 31, 2024.
Selling, General and Administrative Selling, general and administrative expenses are primarily driven by compensation and related employee benefits, as well as rent, utilities, supplies, software licenses, professional fees (e.g., legal and accounting expenses), travel, marketing and other operating expenses. - 33 - Table of Contents Depreciation Depreciation is provided on our property and equipment on the straight-line method at rates adequate to allocate the cost of the applicable assets over their estimated useful lives, which is three to five years for computer hardware, software, phone, and medical imaging equipment, five to seven years for furniture and fixtures and other equipment, and thirty to forty years for buildings.
Depreciation Depreciation is provided on our property and equipment on the straight-line method at rates adequate to allocate the cost of the applicable assets over their estimated useful lives, which is three to five years for computer hardware, software, phone, and medical imaging equipment, five to seven years for furniture and fixtures and other equipment, and thirty to forty years for buildings.
As of February 6, 2025, the Company's Board of Directors approved an increase of $600.0 million to the Company's new stock repurchase program. Repurchases under the share repurchase programs are executed in the open market or negotiated transactions under trading plans established pursuant to Rule 10b5-1.
As of December 31, 2025, the Company has remaining authorization of $821.7 million under the repurchase program. Repurchases under the share repurchase programs are executed in the open market or negotiated transactions under trading plans established pursuant to Rule 10b5-1.
These obligations are considered as a reduction in revenue when it appears probable that the arrangement thresholds will be met. We occasionally enter into incentive fee arrangements with customers that provide for additional compensation if certain defined contractual milestones or performance thresholds are met.
Certain contracts contain volume rebate arrangements with our customers that provide for rebates if certain specified spending thresholds are met. These obligations are considered as a reduction in revenue when it appears probable that the arrangement thresholds will be met.
Changes in operating assets and liabilities provided $106.5 million in operating cash flows and were primarily driven by increased advanced billings of $97.1 million and increased accrued expenses of $82.1 million, partially offset by increased accounts receivable and unbilled, net of $48.3 million. - 37 - Table of Contents Cash Flow from Investing Activities Net cash used in investing activities was $28.3 million for the year ended December 31, 2024, primarily consisting of property and equipment expenditures of $36.5 million, partially offset by $8.2 million in other investing activity.
Net cash used in investing activities was $28.3 million for the year ended December 31, 2024, primarily consisting of property and equipment expenditures of $36.5 million, partially offset by $8.2 million in other investing activity.
Adjustments to reconcile net income to net cash provided by operating activities were $44.1 million, primarily related to depreciation of $24.1 million, stock-based compensation expense of $20.5 million, and noncash lease expense of $19.6 million, partially offset by a deferred income tax benefit of $25.1 million.
Adjustments to reconcile net income to net cash provided by operating activities were $165.8 million, primarily related to deferred income tax provision of $80.8 million, stock-based compensation expense of $34.8 million, depreciation of $27.2 million and noncash lease expense of $23.0 million.
This change was mainly attributable to increased interest income on Cash and cash equivalents and a reduction in short-term debt, compared to the same period in the prior year. Income tax provision Income tax provision increased by $18.7 million, to $71.5 million for the year ended December 31, 2024 from $52.9 million for the year ended December 31, 2023.
Interest income, net Interest income, net decreased by $12.2 million, to $12.8 million for the year ended December 31, 2025, from $25.0 million for the year ended December 31, 2024. This change was mainly attributable to decreased interest income on Cash and cash equivalents, compared to the same period in the prior year.
For a comparison of our results of operations for the fiscal years ended December 31, 2023 and December 31, 2022, see “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 13, 2024.
For a comparison of our results of operations for the fiscal years ended December 31, 2024 and December 31, 2023, see “Part II, Item 7.
Included within backlog as of December 31, 2024 was approximately $1,620.0 million to $1,640.0 million that we expect to convert to net revenue in 2025, with the remainder expected to convert to net revenue in years after 2025. - 34 - Table of Contents The effect of foreign currency adjustments on backlog was as follows: unfavorable foreign currency adjustments of $16.7 million for the year ended December 31, 2024 and favorable foreign currency adjustments of $14.6 million for the year ended December 31, 2023.
Included within backlog as of December 31, 2025 was approximately $1,890.0 million to $1,910.0 million that we expect to convert to net revenue in 2026, with the remainder expected to convert to net revenue in years after 2026.
The overall effective tax rates for the years ended December 31, 2024 and 2023 were 15.0% and 15.8%, respectively.
Income tax provision Income tax provision increased by $19.7 million, to $91.3 million for the year ended December 31, 2025, from $71.5 million for the year ended December 31, 2024. The overall effective tax rates for the years ended December 31, 2025 and 2024 were 16.8% and 15.0%, respectively.
These additional fees are included in the estimated transaction price when there is a basis to reasonably estimate the amount of the fee and when achievement of the incentive milestone is deemed probable. These estimates are based on anticipated performance, our best judgment at the time or ultimately, upon achievement of the threshold or milestone.
We occasionally enter into incentive fee arrangements with customers that provide for additional compensation if certain defined contractual milestones or performance thresholds are met. These additional fees are included in the estimated transaction price when there is a basis to reasonably estimate the amount of the fee and when achievement of the incentive milestone is deemed probable.
For the year ended December 31, 2023, the Company repurchased 781,068 shares for $144.0 million under the new repurchase program. For the year ended December 31, 2022, the Company repurchased 228,247 shares for $47.2 million under the new repurchase program. As of December 31, 2024, we have remaining authorization of $134.6 million under the new repurchase program.
For the year ended December 31, 2025, the Company repurchased 2,961,924 shares for $912.9 million under the repurchase program. For the year ended December 31, 2024, the Company repurchased 527,160 shares for $174.2 million under the repurchase program. For the year ended December 31, 2023, the Company repurchased 781,068 shares for $144.0 million under the repurchase program.
Approximately $31.8 million of our cash and cash equivalents, none of which was restricted, was held by our foreign subsidiaries as of December 31, 2024. - 36 - Table of Contents As of December 31, 2024, we had $10.0 million available for borrowing under the Credit Facility.
As of December 31, 2025, we had cash and cash equivalents of $497.0 million, which decreased from $669.4 million as of December 31, 2024 primarily due to repurchases of common stock. Approximately $21.2 million of our cash and cash equivalents, none of which was restricted, was held by our foreign subsidiaries as of December 31, 2025.
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. For the year ended December 31, 2022, the Company repurchased 5,463,244 shares for $800.5 million under this repurchase program.
Net cash used in financing activities was $154.0 million for the year ended December 31, 2024, primarily related to $169.9 million in repurchases of common stock, partially offset by proceeds from stock option exercises of $15.9 million. - 37 - Table of Contents Share Repurchases In 2022, the Company's Board of Directors (the "Board") approved a share repurchase program which has been amended several times to increase the aggregate amount of the share repurchase authorization.
The decrease in the overall effective tax rate was primarily attributable to a decrease in uncertain tax positions, which was partially offset by tax benefits related to Foreign Derived Intangible Income ("FDII"). Liquidity and Capital Resources We assess our liquidity in terms of our ability to generate cash to fund our operating, investing and financing activities.
The increase in the overall effective tax rate was primarily attributable to a decrease in tax benefits related to FDII, increase in uncertain tax positions and an increase in GILTI (net of foreign tax credits) which was partially offset by an increase in excess tax benefits recognized from share-based compensation compared to the same period in the prior year.
Removed
Depreciation and Amortization Depreciation and amortization expense increased by $2.9 million, to $29.3 million for the year ended December 31, 2024 from $26.3 million for the year ended December 31, 2023. The increase in depreciation and amortization was primarily related to increased depreciation related to Property and equipment, net, compared to the same period in the prior year.
Added
Selling, General and Administrative Selling, general and administrative expenses are primarily driven by compensation and related employee benefits, as well as rent, utilities, supplies, software licenses, professional fees (e.g., legal and accounting expenses), travel, marketing and other operating expenses.
Removed
Interest income (expense), net Interest income (expense), net changed by $25.5 million, to $25.0 million of income for the year ended December 31, 2024 from $0.5 million of expense for the year ended December 31, 2023.
Added
The effect of foreign currency adjustments on backlog was as follows: favorable foreign currency adjustments of $25.1 million for the year ended December 31, 2025 and unfavorable foreign currency adjustments of $16.7 million for the year ended December 31, 2024.
Removed
As of December 31, 2024, we had cash and cash equivalents of $669.4 million, which increased from $245.4 million as of December 31, 2023.
Added
Depreciation and Amortization Depreciation and amortization expense of $28.1 million for the year ended December 31, 2025, remained relatively consistent with $29.3 million for the year ended December 31, 2024.
Removed
Net cash used in financing activities was $182.6 million for the year ended December 31, 2023, primarily related to $155.0 million in repayments of the Credit Facility and $144.0 million in repurchases of common stock, partially offset by $105.0 million in proceeds from the Credit Facility and proceeds from stock option exercises of $11.4 million.
Added
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions.
Removed
As of June 30, 2022, the Company completed all authorized share repurchases under this repurchase program. In the fourth quarter of 2022, the Board approved a new stock repurchase program of up to $500.0 million. For the year ended December 31, 2024, the Company repurchased 527,160 shares for $174.2 million under the new repurchase program.
Added
Where relevant, the Company has reflected any material items that were enacted in the consolidated financial statements for the year ended December 31, 2025. Liquidity and Capital Resources We assess our liquidity in terms of our ability to generate cash to fund our operating, investing and financing activities.
Removed
The repurchase programs may be suspended or discontinued at any time without notice. Indebtedness On September 30, 2019 (the “Closing Date”), the Company obtained an unsecured credit facility (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”).
Added
Changes in operating assets and liabilities provided $96.3 million in operating cash flows and was primarily driven by increased advanced billings of $143.8 million, increased accrued expenses of $97.1 million and changes in Other assets and liabilities, net of $11.2 million, partially offset by increased accounts receivable and unbilled, net of $106.2 million, increased prepaid expenses and other current assets of $27.1 million and decreased lease liabilities of $25.2 million.
Removed
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.
Added
The repurchase programs may be suspended or discontinued at any time without notice. Indebtedness As of December 31, 2025, we had no indebtedness. Refer to Note 7 of the Notes to Consolidated Financial Statements for details regarding our Credit Facility.
Removed
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 resolving credit note to March 29, 2024.
Added
These estimates are based on anticipated performance, our best judgment at the time or ultimately, upon achievement of the threshold or milestone. We record revenue net of any tax assessments by governmental authorities that are imposed and concurrent with specific revenue generating transactions.
Removed
On March 28, 2024, the Company entered into Amendment No. 6 to the Loan Agreement, which changed the aggregate principal amount that may be borrowed under the facility's line of credit to up to $10.0 million, and extended the expiration date of revolving credit note to March 31, 2025.
Added
The package introduces new safe harbors for multinational companies where domestic and international tax systems meet robust requirements to coexist with Pillar 2, which would fully exempt U.S.-parented groups from the application of two of the three Pillar 2 top-up taxes.
Removed
The Credit Facility is guaranteed by the Guarantor and its material, direct or indirect wholly owned domestic subsidiaries, with certain exceptions, including where providing such guarantees is not permitted by law, regulation or contract or would result in adverse tax consequences.
Added
Stock Based Compensation On February 6, 2025 and May 16, 2025, respectively, the Board adopted and the Company's stockholders approved the 2016 Amended and Restated Incentive Award Plan (the "Amended 2016 Plan"). The Amended 2016 Plan extended the term to expire in 2035, but did not change the number of shares authorized for issuance.
Removed
All of the obligations under the Credit Facility are unsecured. - 38 - Table of Contents The Credit Facility is subject to customary negative covenants. The Company was in compliance with all financial covenants as of December 31, 2024.
Added
Compensation expense related to stock option awards to employees is recognized on a straight line basis based on the grant date fair value over the associated service period of the award, which is equal to the vesting term.
Removed
The Credit Facility contains certain events of default, including, among others, non-payment of principal or interest, breach of the covenants, cross default and cross acceleration to certain other indebtedness, defaults on monetary judgment orders, certain ERISA events, certain bankruptcy and insolvency events, actual or asserted invalidity of any guarantee or security document and change in control.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeIn the years ended December 31, 2024 and 2023, credit losses have been immaterial and within our expectations. Moreover, in many cases we require advance payment from our customers for a portion of the study contract price upon the signing of a service contract which helps to mitigate credit risk.
Biggest changeMoreover, in many cases we require advance payment from our customers for a portion of the study contract price upon the signing of a service contract which helps to mitigate credit risk. As of the years ended December 31, 2025 and 2024, there were no major customers accounting for more than 10% of our accounts receivable and unbilled, net.
Pricing actions and supply chain productivity initiatives have mitigated and are expected to continue to mitigate some of these inflationary pressures, but we may not be successful in fully offsetting these incremental costs, which could have an impact on the Company’s results of operations and cash flows in the future.
Pricing actions and supply chain productivity initiatives have mitigated and are expected to continue to mitigate some inflationary pressures, but we may not be successful in fully offsetting these incremental costs, which could have an impact on the Company’s results of operations and cash flows in the future.
Additionally, if actual rates are greater than our inflation assumptions, inflation could have a material adverse effect on our operations or financial condition. Interest Rates We are primarily exposed to interest rate risk through our Credit Facility. As of the years ended December 31, 2024 and 2023, we had no outstanding long-term debt.
Additionally, if actual rates are greater than our inflation assumptions, inflation could have a material adverse effect on our operations or financial condition. Interest Rates We are primarily exposed to interest rate risk through our Credit Facility. As of the years ended December 31, 2025 and 2024, we had no outstanding long-term debt.
We recalculated our reported pre-tax income for the years ended December 31, 2024 and 2023 using foreign exchange rates that were 10% higher and 10% lower than actual exchange rates utilized during the year.
We recalculated our reported pre-tax income for the years ended December 31, 2025 and 2024 using foreign exchange rates that were 10% higher and 10% lower than actual exchange rates utilized during the year.
The Credit Facility is subject to variable interest rates. The Credit Facility is not subject to any interest rate caps or floors. - 43 - Table of Contents
The Credit Facility is subject to variable interest rates. The Credit Facility is not subject to any interest rate caps or floors. - 42 - Table of Contents
For the years ended December 31, 2024 and 2023, approximately 7.7% and 8.4%, respectively, of our revenue was derived from contracts denominated in currencies other than the U.S. dollar, whereas approximately 20.9% and 21.4%, respectively, of our operational costs, including, but not limited to, salaries, wages and other employee benefits, were derived in foreign currencies.
For the years ended December 31, 2025 and 2024, approximately 5.8% and 7.7%, respectively, of our revenue was derived from contracts denominated in currencies other than the U.S. dollar, whereas approximately 18.4% and 20.9%, respectively, of our operational costs, including, but not limited to, salaries, wages and other employee benefits, were derived in foreign currencies.
When utilizing foreign exchange rates 10% higher than actual exchange rates, our pre-tax income for the years ended December 31, 2024 and 2023 is negatively impacted by approximately $18.4 million and $17.2 million, respectively.
When utilizing foreign exchange rates 10% higher than actual exchange rates, our pre-tax income for the years ended December 31, 2025 and 2024 is negatively impacted by approximately $22.1 million and $18.4 million, respectively.
When utilizing foreign exchange rates 10% lower than actual exchange rates, our pre-tax income for the years ended December 31, 2024 and 2023 is positively impacted by approximately $18.4 million and $17.2 million, respectively.
When utilizing foreign exchange rates 10% lower than actual exchange rates, our pre-tax income for the years ended December 31, 2025 and 2024 is positively impacted by approximately $22.1 million and $18.4 million, respectively.
Of these exposures, approximately 82.8% and 76.9% of revenue denominated in foreign currencies and approximately 51.6% and 51.4% of operational costs denominated in foreign currencies were Euro denominated for the years ended December 31, 2024 and 2023, respectively.
Of these exposures, approximately 91.1% and 82.8% of revenue denominated in foreign currencies and approximately 49.7% and 51.6% of operational costs denominated in foreign currencies were Euro denominated for the years ended December 31, 2025 and 2024, respectively.
To mitigate our foreign currency risk exposure we provide for exchange rate fluctuation adjustments subject to certain thresholds within our contracts where contract currency varies from currencies where costs will be incurred to support delivery of the contract. - 42 - Table of Contents Credit Risk Financial instruments that subject the Company to credit risk primarily consist of cash and cash equivalents, and accounts receivable and unbilled, net.
To mitigate our foreign currency risk exposure we provide for exchange - 41 - Table of Contents rate fluctuation adjustments subject to certain thresholds within our contracts where contract currency varies from currencies where costs will be incurred to support delivery of the contract.
The cash and cash equivalent balances are held and maintained with high-quality financial institutions with reputable credit ratings and, consequently, we believe that such funds are subject to minimal credit risk. We generally do not require collateral or other securities to support customer receivables.
Credit Risk Financial instruments that subject the Company to credit risk primarily consist of cash and cash equivalents, and accounts receivable and unbilled, net. The cash and cash equivalent balances are held and maintained with high-quality financial institutions with reputable credit ratings and, consequently, we believe that such funds are subject to minimal credit risk.
As of the years ended December 31, 2024 and 2023, there were no major customers accounting for more than 10% of our accounts receivable and unbilled, net. Inflation Our contracts that provide for services to be performed in excess of a year generally are based on inflation assumptions for the portion of the services to be performed beyond one year.
Inflation Our contracts that provide for services to be performed in excess of a year generally are based on inflation assumptions for the portion of the services to be performed beyond one year. We do not have significant operations in countries where the economy is considered highly inflationary.
Removed
We do not have significant operations in countries where the economy is considered highly inflationary. Throughout 2023, we experienced input cost inflation, including materials, labor and transportation costs, but inflation moderated in 2024.
Added
We generally do not require collateral or other securities to support customer receivables. In the years ended December 31, 2025 and 2024, credit losses have been immaterial and within our expectations.

Other MEDP 10-K year-over-year comparisons