On February 13, 2023 Medpace Holdings, Inc. (Nasdaq: MEDP) ("Medpace") reported financial results for the fourth quarter and full year ended December 31, 2022 (Press release, Medpace, FEB 13, 2023, View Source [SID1234627141]).

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Fourth Quarter 2022 Financial Results

Revenue for the three months ended December 31, 2022 increased 27.7% to $394.1 million, compared to $308.6 million for the comparable prior-year period. On a constant currency organic basis, revenue for the fourth quarter of 2022 increased 28.9% compared to the fourth quarter of 2021.

Backlog as of December 31, 2022 increased 17.2% to $2,339.6 million from $1,997.1 million as of December 31, 2021. Net new business awards were $485.1 million, representing a net book-to-bill ratio of 1.23x for the fourth quarter of 2022, as compared to $458.7 million for the comparable prior-year period. The Company calculates the net book-to-bill ratio by dividing net new business awards by revenue.

For the fourth quarter of 2022, total direct costs were $278.4 million, compared to total direct costs of $220.6 million in the fourth quarter of 2021. Selling, general and administrative (SG&A) expenses were $33.4 million in the fourth quarter of 2022, compared to SG&A expenses of $27.7 million in the fourth quarter of 2021.

GAAP net income for the fourth quarter of 2022 was $68.7 million, or $2.12 per diluted share, versus GAAP net income of $50.0 million, or $1.32 per diluted share, for the fourth quarter of 2021. This resulted in a net income margin of 17.4% and 16.2% for the fourth quarter of 2022 and 2021, respectively.

EBITDA for the fourth quarter of 2022 increased 30.9% to $80.4 million, or 20.4% of revenue, compared to $61.4 million, or 19.9% of revenue, for the comparable prior-year period. On a constant currency basis, EBITDA for the fourth quarter of 2022 increased 23.3% from the fourth quarter of 2021.

Full Year 2022 Financial Results

Revenue for the year ended December 31, 2022 increased 27.8% to $1,460.0 million, compared to $1,142.4 million for the year ended December 31, 2021. On a constant currency organic basis, revenue increased 29.2% for the year ended December 31, 2022 compared to the year ended December 31, 2021.

For the year ended December 31, 2022, net new business awards were $1,829.5 million, representing a net book-to-bill ratio of 1.25x, compared to $1,610.4 million for the year ended December 31, 2021.

For the full year 2022, total direct costs were $1,027.6 million, compared to $814.2 million in the full year 2021. For the full year 2022, SG&A expenses were $131.4 million, compared to $108.4 million for the full year 2021.

GAAP net income for the full year 2022 was $245.4 million, or $7.28 per diluted share, versus GAAP net income of $181.8 million, or $4.81 per diluted share, for the full year 2021. This resulted in a net income margin of 16.8% and 15.9% for the full year 2022 and 2021, respectively.

EBITDA for the full year 2022 increased 38.1% to $308.1 million, or 21.1% of revenue, compared to $223.1 million, or 19.5% of revenue, for the prior year. On a constant currency basis, EBITDA increased 32.3% for the full year 2022 compared to the full year 2021.

A reconciliation of the Company’s non-GAAP financial measures, including EBITDA and EBITDA margin to the corresponding GAAP measures is provided below.

Balance Sheet and Liquidity

The Company’s Cash and cash equivalents were $28.3 million at December 31, 2022, and the Company generated $136.7 million in cash flow from operating activities during the fourth quarter of 2022. The Company paid $89.7 million against the credit facility during the fourth quarter of 2022. Short-term debt was $50.0 million at December 31, 2022.

During the fourth quarter of 2022, the Company repurchased 228,247 shares at an average price of $206.68 per share for a total of $47.2 million. For the full year 2022, the Company repurchased approximately 5.7 million shares for $847.7 million. As of December 31, 2022, the Company had $452.8 million remaining under its authorized share repurchase program.

2023 Financial Guidance

The Company forecasts 2023 revenue in the range of $1.690 billion to $1.750 billion, representing growth of 15.8% to 19.9% over 2022 revenue of $1.460 billion. GAAP net income for full year 2023 is forecasted in the range of $245.0 million to $265.0 million. Additionally, full year 2023 EBITDA is expected in the range of $325.0 million to $350.0 million. Based on forecasted 2023 revenue of $1.690 billion to $1.750 billion and GAAP net income of $245.0 million to $265.0 million, diluted earnings per share (GAAP) is forecasted in the range of $7.53 to $8.14. This guidance assumes a full year 2023 tax rate of 17.5% to 18.5% and does not reflect the potential impact of any share repurchases the Company may make pursuant to the share repurchase program after December 31, 2022.

Conference Call Details

Medpace will host a conference call at 9:00 a.m. ET, Tuesday, February 14, 2023, to discuss its fourth quarter and full year 2022 results.

To participate in the conference call, interested parties must register in advance by clicking on this link. While it is not required, it is recommended you join 10 minutes prior to the event start. Upon registration, all telephone participants will receive a confirmation email detailing how to join the conference call, including the dial-in number along with a unique PIN that can be used to access the call.

To access the conference call via webcast, visit the "Investors" section of Medpace’s website at medpace.com. The webcast replay of the call will be available at the same site approximately one hour after the end of the call. A supplemental slide presentation will also be available at the "Investors" section of Medpace’s website prior to the start of the call.