Medpace (MEDP) 2026年第三季度业绩电话会议：创纪录订单与更高的业绩指引

核心要点

• 2026财年第三季度营收同比增长8.5%至7.16亿美元，净利润增长23.7%至1.375亿美元。
• 受可报销成本下降和稳健利用率支撑，EBITDA同比增长16.0%至1.721亿美元，EBITDA利润率从22.5%扩大至24.0%。
• 进入积压订单的新增净业务中标额达到创纪录的8.734亿美元，同比增长10.6%。过去12个月的中标总额为30.2亿美元，同比增长23.9%。
• 期末积压订单约为32亿美元，同比增长5.6%，预计其中约19.9亿美元将在未来12个月内转化为营收。
• Medpace将其2026财年业绩预期上调至营收28.35亿-28.55亿美元，稀释后每股收益为17.97-18.32美元。
• 管理层将需求环境描述为强劲，但表示第四季度的中标情况和取消订单模式仍是影响2027财年前景的重要变量。

关键财务数据

2026财年前九个月，营收增长16.9%至21.3亿美元。EBITDA增长19.5%至4.749亿美元，利润率为22.3%，而上年同期为21.8%。净利润增长21.1%至3.827亿美元，稀释后每股收益达到13.37美元，而上年同期为10.54美元。

业务与运营表现

管理层报告称，RFP（方案竞标）活动、初期中标通知和中标率表现强劲。待决项目的金额增加，而客户的中标决策和项目启动继续保持管理层所称的相对正常节奏。

业务组合向 Medpace 最大的治疗领域传统肿瘤学倾斜，近期代谢领域的项目中标有所减少。不过，管理层表示，储备项目中仍包含大量代谢领域的商业机会。

公司将更高的中标率部分归因于2025年底实施的流程调整。管理层表示，迄今为止的评估是积极的，但也提醒称目前仅有几个季度的业绩可供参考。

在稳健的利用率支持下，直接服务表现依然强劲。在电话会议召开时，营收增速高于员工人数增速，同时员工流失率保持在低位，薪酬压力也处于管理层预期范围内。

前五大客户约占过去12个月营收的31%，前十大客户约占39%。

管理层业绩指引

Medpace 更新了2026财年全年业绩指引如下：

该指引基于截至2026年9月30日的汇率，且未计入额外的股票回购。

管理层预计转嫁收入将占第四季度营收的约40.0%-40.5%。虽然季度业绩可能会受到合同签署时点和ASC 606会计准则的影响，但预计第四季度的利润率表现不会发生重大恶化。

Medpace 计划于2月发布第四季度财报时正式出台2027财年业绩指引。管理层表示，其目前的模型与市场一致预期没有太大脱节，但第四季度的预订量和取消量可能会实质性地影响前景。辛辛那提园区的重大扩张预计将在2027年增加约2000万美元的运营成本。

风险与关注领域

• 第三季度积压订单的取消量处于公司预期区间的偏高水平，不过管理层称其仍在可控范围内。
• 最近的订单取消主要与产品失败、安全信号及管线优先级调整有关，而非资金限制。
• 转嫁收入的时点和结构可能会影响报告的营收增长和EBITDA利润率。
• 由于合同签署时点和ASC 606会计准则效应，季度利润率可能会出现波动。
• 第四季度的中标情况和意外的订单取消仍是影响2027财年营收预期的关键变量。
• 辛辛那提园区的扩建预计将在2027年带来约2000万美元的运营成本阻力。

分析师问答要点

新签预订与需求：管理层表示，待决中标额和潜在机会的总金额显著上升。如果第四季度的中标率维持在接近第三季度的水平，且订单取消量保持在正常范围内，管理层预计2027财年的营收预期将继续改善。

利润率可持续性：公司指出了良好的利用率、较低的员工流失率以及高于员工人数增速的营收增长。尽管第三季度的利润率表现强劲，但管理层提醒称，由于时点因素和会计波动性，不应将单季表现视为固定的常态年化水平。

订单取消原因：管理层表示，订单取消仍具不可预测性，通常与临床产品表现、安全问题或优先级调整有关。资金约束并非当前的主要驱动因素。

竞争环境与定价：Medpace 继续优先考虑全流程临床开发业务和执行质量，而非主要靠价格竞争。管理层指出，在前几年部分竞争对手采取极具侵略性的行为后，如今价格环境已更为正常化。

治疗领域与客户结构：肿瘤学在中标和通知中重获较大份额。大型药企的业务仍集中在少数客户身上，且往往源于后来被收购的生物技术公司客户。

业绩电话会议完整文字记录

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完整财报电话会议逐字稿

管理层陈述

Operator

Good day, ladies and gentlemen, and welcome to the Medpace Third Quarter 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded. I would now like to introduce your host for today's conference call, David Ruhe, Medpace's Director of Investor Relations, you may begin.

David Ruhe

Good morning, and thank you for joining Medpace's Third Quarter 2026 Earnings Conference Call. Also on the call today is our CEO, August Troendle; and our CFO, Kevin Brady. Before we begin, I would like to remind you that our remarks and responses to your questions during this teleconference may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve inherent assumptions with known and unknown risks and uncertainties. As well as other important factors that could cause actual results to differ materially from our current expectations.

These factors are discussed in our Form 10-K and other filings with the SEC. Please note that we assume no obligation to update forward-looking statements even if estimates change. Accordingly, you should not rely on any of today's forward-looking statements as representing our views as of any date after today. During this call, we will also be referring to certain non-GAAP financial measures. These non-GAAP measures are not superior to or a replacement for the comparable GAAP measures. But we believe these measures help investors gain a more complete understanding of results.

A reconciliation of such non-GAAP financial measures to the most directly comparable GAAP measures is available in the earnings press release and earnings call presentation slides provided in connection with today's call. The slides are available in the Investor Relations section of our website at investor.medpace.com. With that, I would now like to turn the call over to August Troendle.

August Troendle

Thanks, David. Good morning, everyone. The business environment remains strong in quarter 3 2026. We saw high-quality RFP activity strong initial award notifications and a good win rate. Net new business awards reached an all-time high in the quarter and our last 12-month close an awards was 23.9%. We will provide guidance for 2027 at the end of our Q4 reporting at the time of our Q4 reporting in February. However, we see no large disconnect between analyst consensus estimates and our current modeling of 2027. Kevin will now review our financial results for Q3 and our updated 2026 guidance.

Kevin Brady

Thank you, and good morning to everyone listening in. Revenue was $716 million in the third quarter of 2026. This represented a year-over-year increase of 8.5%. The Revenue for the 9 months ended September 30, 2026, was $2.13 billion and increased 16.9%. EBITDA of $172.1 million increased 16% compared to $148.4 million in the third quarter of 2025. Year-to-date EBITDA was $474.9 million and increased 19.5% from the comparable prior year period.

EBITDA margin for the third quarter was 24% and compared to 22.5% in the prior year period. EBITDA margins benefited from lower reimbursable costs. Year-to-date EBITDA margin was 22.3% compared to 21.8%. In the third quarter of 2026, net income of $137.5 million increased 23.7% compared to net income of $111.1 million in the third quarter of 2025. Net income growth above EBITDA growth was primarily driven by higher interest income and a lower effective tax rate compared to the prior year period.

Year-to-date net income was $382.7 million compared to $316 million in the comparable prior year period, which represents a 21.1% increase. Net income per diluted share for the quarter was $4.84 compared to $3.86 in the prior year period. Year-to-date net income per diluted share was $13.37 compared to net income per diluted share of $10.54 in the comparable prior year period. Net new business awards entering backlog in the third quarter increased 10.6% from the prior year to $873.4 million.

The new business awards entering backlog over the last 12 months increased $3.02 billion, representing a year-over-year increase of 23.9%. Ending backlog as of September 30, 2026, was approximately $3.2 billion, an increase of 5.6% from the prior year. We project that approximately $1.99 billion of backlog will convert to revenue in the next 12 months.

Backlog conversion in the third quarter was 23.8% of beginning backlog. Regarding customer concentration, our top 5 and top 10 customers represent roughly 31% and 39%, respectively, of our last 12 months revenue. In the third quarter, we generated $216.6 million in cash flow from operating activities, and our net days sales outstanding was negative 66 days. Cash ended the quarter at $705.3 million. Effective October 20, 2026, the Board terminated the company's current share repurchase authorization. And approved a new share repurchase authorization of up to $1 billion.

Moving now to our updated guidance for 2026. Full year 2026 total revenue is now expected in the range of $2.835 billion to $2.855 billion, representing growth of 12% to 12.8% over 2025 total revenue of $2.53 billion. Our 2026 EBITDA is now expected in the range of $638 million to $652 million, representing growth of 14.4% to 16.9% and compared to EBITDA of $557.7 million in 2025. We forecast 2026 net income in the range of $514 million to $524 million. This guidance assumes a full year 2026 effective tax rate of 19% to 19.5%, interest income of $22.9 million and $28.6 million diluted weighted average shares outstanding for 2026.

There are no additional share repurchases assumed in our guidance. Earnings per diluted share is now expected to be in the range of $17.97 to $18.32 and Guidance is based on foreign exchange rates as of September 30, 2026.

With that, I'll turn the call back over to the operator so we can take your questions.

Operator

[Operator Instructions] And our first question comes from Michael Cherny of Leerink Partners.

分析师问答

Michael Cherny

Can you hear me?

Operator

Can hear you now.

Michael Cherny

Okay. My apologies there. August, maybe just to dive into a bit more about your bookings commentary. Clearly, net bookings performance in the quarter is really strong -- as you think about where that's coming from, how do you see the evolving competitive environment within the biotech world? And how do you think about where either pricing lives or your ability to continue to push forward in your differentiation within your core biotech customer. Any more color you can give on the competitive components and what led to some of this bookings growth in what is a healthy market would be great.

August Troendle

Yes, sorry. Yes, I guess you're kind of ultimately addressing win rate, I guess, how we're performing versus how much's environment. The business environment is a strong one. I think really across the board, I think that things have changed a little bit in terms of the mix of what we're seeing, and it's a little bit more traditional oncology are generally our largest area, a little bit less metabolic demand at the current time point, but I think there's a lot of good opportunities. and our win rate has been strong.

So I think it's a combination of the 2. I think we're booking good work, and it's -- a lot of it has been in the past -- certainly, a few years here, when a lot of cancellations have driven ultimate performance in terms of awards and revenue growth. And I hope that is somewhat reduced going forward. Our cancellations backlog cancellations this quarter were -- not something to call out, but also out of help. They were towards the higher end, but within kind of the range we'd expect. So I think that's what I can provide.

Operator

And our next question comes from Jailendra Sing of Truist Securities.

Jailendra Singh

First, a quick clarification, August, about your comment about current consensus being in the right range. I'm assuming that applies to both revenue and -- and on the revenue expectation, I think Street is modeling like 6% growth. Anything you can share in terms of how you think about direct fee revenue versus pass-through just mix will be that would be helpful.

August Troendle

Yes. I don't -- we don't comment on direct pass-through, et cetera. You see our pass-through expenses. I think that's kind of a way to try to back into it, not accurately, but at least directionally. I don't know, Kevin, do you want me comment on that?

Kevin Brady

No. I mean, I think we'll provide more color, Jailendra, in terms of what that will look like in February. But I would just kind of reiterate what August said that consensus looks reasonable relative to in our current modeling, and that would include some assumptions on pass-throughs at the current moment, we'll have to see how bookings progress in the next quarter. The only other thing that I would pull out while we do agree with the percentages, just a reminder that we do have a new expansion, significant expansion coming online here in Cincinnati, which will add about $20 million of operating costs in 2027.

Jailendra Singh

Okay. That's helpful. And then a quick follow-up on the direct fee gross margin in the quarter. really good trends there. Anything to call out in particular? Just trying to figure out if there was anything out of the ordinary in terms of mix change orders or timing and if these Q3 de gross margin levels are sustainable?

Kevin Brady

I would just say, Joan, quarter-to-quarter, there's certainly volatility that can occur in our numbers. And I know that everybody uses pass-through as a proxy for what direct service fee revenue is, but that's not exactly how 606 works. Margins again are good, very good, but they can be lumpy from quarter-to-quarter. But I don't see anything that would significantly disrupt kind of the margin performance in Q4. .

Operator

And our next question comes from Kevin Calian of UBS.

Tucker Remmers

This is Tucker am filling in for Kevin Caliendo here. I'm going to probably double click on the last question on the margin. So head count grew high single digits sequentially and you're able to maintain that margin level. And so kind of like what drove Ser margin being so strong? Why would it essentially maintain at this level going forward?

Kevin Brady

Yes, again, there can be some timing things that happen in a given quarter. There can be some lumpiness caused by 606. But no, it's good performance overall across the business. utilization continues to be in a good spot. And while we're growing headcount, the revenue is growing faster, faster than that at the given moment. .

Tucker Remmers

Okay. And then maybe if I could just follow up quickly. This is mostly a question on the mix of servicing and passes essentially in the backlog. And so pass-throughs obviously dipped down in the quarter. And so -- does that essentially imply that service bookings are higher in backlog. And so the question is essentially like would Medpace be able to maintain this 10% plus service growth in the foreseeable future. assuming that the pass-throughs are kind of maintaining at this lower-ish 40% level.

Kevin Brady

Yes. I mean, again, in terms of service fee growth, obviously, the bookings over the last couple of quarters have been good. We'll have to see what happens in the fourth quarter, but that will then influence what 2027 looks like. So in terms of growth rates, nothing to comment on in terms of 2027 at the moment other than what we have already said. In that, we don't see a major disconnect with where consensus is right now. .

Operator

Our next question comes from Anne Heinz from Mizuho.

Ann Hynes

So when I look at the implied growth rate definitely lower than what Medpace usually does. Is that just a factor of even though bookings were very strong this quarter. In the last 3 quarters were just below historically what you got? Or is there anything you're seeing in the environment maybe over the past couple of weeks as interest rates have gone up that you think is going to impact demand next year?

August Troendle

Yes. No, Amy, I think that our growth profile has dropped quite a bit over the last few years related primarily to pressure from cancellations has been 1 of the biggest things particularly is past the year we've had good opportunities. The business environment has been strong this year. And it continues to be. And 1 reason we decided to not provide any real guidance on next year yet, is it still shaping up quite a bit. And Q4 awards are still an important component of next year revenue. But more importantly is kind of where we shake out in terms of cancellation pattern. Here in Q4 and going into next year.

But things are improving month-to-month in terms of us increasing our revenue expectations for 2027. And hopefully, that continues. But again, a large part of that will be kind of what the cancellation profile is in Q4. We see no reason for high cancellations, but these are kind of things that just come out of the blue. They were a little bit higher than we would have liked in the current quarter, but manageable. And hopefully, that continues for the rest of the year anyway.

Kevin Brady

Just another comment that you remember the mix of pass-throughs relative to revenue will also influence that growth rate as well, right?

Ann Hynes

Yes. And then just maybe any incremental color on the cancellations, anything surprise you about them in the quarter? Or is it just funding like I guess what's driving the cancellations or any change from what's been driving the in the past few quarters?

August Troendle

Yes. No, these were -- our cancellations now are primarily those of product failure a little bit more clearly product failure. It's always, well, some of it's prioritization, too. You could say that's related to a total level of funding possible. But no real signs funding is now a main driver of many of the cancellations. It's products that are not living up to expectation, safety signals, other things that are causing programs to stop. So it's kind of -- everything surprises me about them. They're all just random events and unexpected. So no real trend there.

Operator

And our next question comes from Justin Bowers of Deutsche Bank.

Justin Bowers

Just a continuation of the last question. In terms of the decision to wait until February to guide, is -- is it -- what is more of a factor here? Is it more about the awards? Or is it more about cancellations -- just trying to get a better sense here of why the change from last year.

August Troendle

Yes. No, not sure. I can start that. It's just that our -- over the last quarter, our view on '27 has moved, and we expect it to continue to move -- and it just seemed that we can't provide a very firm guide. We feel we can provide a much more firm guide in February than we would be able to now. And we didn't see a real need to come out with some commentary on what we expected relative to consensus, it looked somewhat in line. I'm not saying it's the same, but it didn't move drastically off. .

So we decided that there is no point in making a poor guide that might not be very accurate in retrospect. So that's really it.

Justin Bowers

Understood. And then just a couple of quick follow-ups there. How does the funnel look in terms of potential awards and RFPs I'm sure through. Like the funnel or the pipeline in terms of RFPs and for the rest of ...

August Troendle

No, look, sort of the awards pending RFPs is up, total dollar value of opportunities that we're looking at. is up nicely. I mean, our fee numbers are actually down some, but that's not -- I kind of ignore -- the quality and the total pending decisions by clients is very large. And they're not being held up. And this is just because of volume of opportunities that have come in. It's not the things are not being awarded.

Things are actually moving along at a relatively normal pace in terms of award decisions, projects moving forward. getting funding in place, things are actually going very well. But the total number of opportunities has increased and is it a good very, very good high. I think that if we can win well in Q4 and certainly as anywhere near as well as in Q3 and and cancellations aren't really how going to range. I think things are going to improve toward our '27 expectations.

Operator

And our next question comes from Ryan Halsted of RBC.

Ryan Halsted

Maybe going back to the new awards and good to see that they're growing healthy. I guess do you have any way of, I guess, clarifying how much of that new awards momentum has -- is a result of the pre-backlog that you called out in the prior year period kind of clearing those gating factors and moving into backlog?

August Troendle

Well, most of our awards come from something that was previously notified that we were being -- we were chosen as the CRO to do this. So most of it is those gating factors if you consider the start of the study being a gating factor, which we do. So we bring them into backlog when the study starts actually operationally in field. Now if you're asking how much is that versus other gating factors, I mean, still the -- the biggest 1 is getting started in the trial. It's a minor number of additional amounts of backlog added because there was some gating factor on an award that was already partially in backlog. I don't know if that answers your question. But most things that are awards in a given quarter, were in our suspense our pre-backlog. .

Ryan Halsted

Got it. Okay. And then just -- you mentioned a few quarters ago, some initiatives you're putting in place to address your win rates and clearly, they're bearing fruit. I mean any more color you can share on just how those initiatives have been working and generating success?

August Troendle

No, I'm not going to give details on what they were. Again, I wanted to point out we recognized our win rate wasn't as high as we'd like in 2025. And toward the end of 2025, we made some meaningful adjustments in our processes and how we address things. And I think they have been -- it's very difficult over even just a couple of quarters to assess that. But I think our assessment to date is that they've been very successful, and we hope to continue to improve going forward. .

Operator

And our next question comes from David Windley of Jefferies.

David Windley

I wanted to ask a question around kind of composition of work. And what I'm driving at is August, your intent, I think, consistent intent to do full service work for your clients. I think you have a minimum kind of composition of the trial that you want to control in order to really want to engage with the client. What we're hearing is some additional, I guess, carve-out of biometrics work within trials, otherwise FSO type trials and then biotech that somewhat counterintuitive to me, but biotechs that are interested in engaging in FSP discussions, which I don't think you're interested in. So I wanted to probe if there are -- if you are seeing changes in the way your target client base wants to engage around projects?

August Troendle

Dave, I wouldn't say that I see certainly a meaningful change in that. I mean, -- there's always been clients that want to carve out biometrics, sometimes internally, sometimes with another chosen provider. -- we do prefer totally full service opportunities. But as long as we're able to add real value in terms of managing the recruitment, quality of the trial, execution overall. So if we have all of the front-end operations and they want to keep even data in-house as well as Biomet and as well as statistics and medical writing, that may be an opportunity that's of interest to us, yes.

And -- but I haven't really seen a step increase in the number of clients that are doing that really. It depends on it is depending on the size of the client to a good extent. If it's truly functional, we're right, we're not interested at all. But certainly, if it's front end only, we do projects that are funded to.

David Windley

Got it. And then maybe to you commented about the therapeutic mix shifting back towards more traditional oncology, a little less cardiometabolic Ryan asked a question about the topic that you kind of raised last time about having some trials that have these interim looks or contingencies that may be removed midstream.

I guess I'm wondering if there's an interrelationship between those 2, which therapeutic areas tend to have that interim look, how prevalent are those things maybe the simplest way to ask the question is we did see the backlog beyond next 12 months kind of regrow or kind of inflate a little bit where it hasn't for a while. And I'm just, again, probing around some of those moving parts in the backlog long term versus next 12 months.

August Troendle

Yes, that's a fair question. I just don't have the analytics in front of me. I mean I generally don't look at that, but it's possible that's related to -- I don't know that there's any real shift in the amount that's rolling in versus new awards, et cetera. Our awards have pivoted more towards -- both in terms of notifications and things being recognized in the backlog awards have -- and to some extent, our RFPs have pivoted more back towards oncology, although we also are seeing in terms of quite a bit of metabolic work again.

Sort of there was a little bit of a drop. And so the notifications and awards are down in the metabolic area, but there's a lot of ending opportunities for metabolic forage currently. But yes, where -- what's driving the increase in duration? Is it new projects that are entered and very short remaining projects that are coming out that's driving it. I think that's probably the bigger factor. But was there any gates that were reached that opened up that caused a meaningful increase in the duration of projects.

I don't know. I doubt it's therapeutic related, it may be true that oncology has a bit more likely to have gates. They tend to be longer trials and have more dating. So that's probably true overall, but I don't know if that's influencing what our outside of 12-month backlog.

Operator

And our next question comes from Jared Hasa of William Blair.

Christine Rains

It's Christine Rand on for Jared. The pass-through revenue came in nicely below your prior 41% to 42% expectation for the second half. Is that range still the right expectation for 2H? And should we expect pass-through mix to step up in 4Q?

Kevin Brady

Yes. I guess good question. I expect it to be somewhere around where we finished the third quarter. So kind of 40% to 40.5% based on our model.

Christine Rains

Great. Perfect. That's very helpful. And then would you characterize customer decision time lines in the quarter as healthy? And overall, did you see any notable decline in Thailand sequentially and relative to last year?

August Troendle

Yes. I think things are moving along faster than last year. I think we're kind of in a pretty good place in terms of projects moving along. Well, the RFP is not being a 1,000x and things moving along towards award and then project start up. So I think things are pretty normalized environment in terms of we're getting opportunities that clients want to move forward on in the current time frame, not sometime in the future.

Operator

[Operator Instructions] And our next question comes from Eric Coldwell of Baird.

Eric Coldwell

Obviously, a very strong margin in the quarter. And clearly, the lower reimbursable revenue is a contributor to that optically. But I am curious if there were other drivers in the quarter that you would highlight, whether that be project or therapeutic mix, hiring perhaps being lower than you were anticipating or earn over being lower than you were anticipating, other efficiencies, any accounting entities or one-timers of just continually impress your EBITDA margin.

I think this was the second highest quarter since ASC 606. So I would love to get a sense on if there's anything unique to the quarter that barring the optics of pass-throughs up or down, that you would be using this as some kind of a jumping off point or have to have sustainably higher expectations here?

Kevin Brady

No, Eric, nothing to specifically call out. Just other than what I mentioned earlier, that certainly there is volatility in our margin percentages for the quarter, right? There can be some timing aspects to when certain contracts are signed. But the business is performing very well on the direct service side. To your point, attrition rates are in a very good spot. And the business continues to deliver. So -- but some of it certainly can be influenced by just the volatility that we see and some of the 606 impacts. But again, I don't expect there to be a major degradation in the fourth quarter. Again, there is some level of headwind in 2027 as we absorb the Cincinnati campus expansion, but provide more color on that in February.

Eric Coldwell

Okay. And then on you -- I think you touched on it, but I did want to specifically ask about turnover rates, hiring, salaries, wages, benefits, inflation, what your thoughts are going into '27. I've recently conversed with a few of your peers, some of the mid-tier biotech focused privates, et cetera. And -- what I am picking up is that everybody had -- almost everybody had exceptionally low turnover in recent years and in many cases, actually record low turnover. Voluntary turnover at least.

But we are picking up some signs that turnover levels are starting to come back, that a number of firms are starting to hire again. people are more willing to jump ship, if there's more options and companies need to start paying up for talent. So I'm just curious what your overall view on the staff marketplace looks like as we go into '27?

August Troendle

Turnover looks very low. I mean, I think we've continued with low turnover. I don't know what else can I say in there.

Eric Coldwell

And no pressures on incremental or abnormal pressures on salary wages at this point?

August Troendle

No, no, it's pretty that's an ongoing thing, but no, I don't think there's any real change over the past year. And the rate. Obviously, it's always increasing some, but within our expectations, yes.

Eric Coldwell

No, that's where I was going. And then last 1 for me. Last quarter, August, you seemed a lot more upbeat about, I don't know, maybe it's just the focus of what we're talking about today, but there was a lot more commentary on, I think bookings and the big second half ramp that you expected you were obviously accurate with book-to-bill getting back above that 1.2 ZIP code and strong awards that came in this quarter. It felt like there was a little less commentary on that in the fourth quarter, some modest mentions of higher cancels out of backlog. I'm just help us get a lot for the fourth quarter if...

August Troendle

That's always -- look, it's going to be cancellations. But no, I don't feel any different. I think that Q4, if things go right, it's going to be another record awards. I hate to look at book-to-bill, I just think it's a bad measure. I'd rather focus on award growth and trailing drill awards. And I would expect another step up. things look very good. We have a lot of stuff in the pipeline, both in terms of opportunities, RFPs, are pending award, a lot of -- we had a very strong quarter in terms of awards of notifications in themselves.

And I would expect business awards, things moving into backlog to continue to move upward. -- going forward next year -- next quarter and sequentially. So no, no real difference on that. It just comes down to where the -- do we get someone usual cancellations or not?

Operator

And our next question comes from Luke Sergott of Barclays.

Luke Sergott

Thanks again for the question. The -- you guys had a pretty big step-up in the large pharma side. And I just wanted to know kind of what you're seeing there from a share dynamic, especially over the last couple of years. I know that the revenue is really contingent on what you won over the last 2 years ago. So just to give a sense of like where -- are there any specific indications? Or are you adding new logos? Or is this just kind of more about assets and where those existing relations progressing through the development pipeline?

August Troendle

Yes. Most of our large pharma opportunities have come from a limited number of providers. And often, it's related to biotech clients we had got acquired. So it's not really a direct outreach from us to try to win large pharma work at new clients. So it's supporting existing clients that largely are there because we had an acquisition of a former client of ours. So I think that's it. .

Luke Sergott

Okay. So just more of the same that's been going on there? And then I guess, can you talk about pricing and competitiveness on the RFP. I mean you guys are investing there to add capacity. It feels like markets in full recovery mode right now. So are things starting to tighten up and you're able to maybe get some price in some types of services on the full service side?

August Troendle

We've not really gone to I mean I think there were some that really focused on pricing. We focus on quality of our deliverables. And I do think that some of the crazy approach is taken by some in the past few years have died out. So I think we're kind of back to a normalized environment.

Operator

Thank you. I'm showing no further questions at this time. I'd like to turn it back to David Ruhe for closing remarks.

David Ruhe

Thank you for joining us on today's call and for your interest in Medpace. We look forward to speaking with you again on our fourth quarter 2026 earnings call.

Operator

This concludes today's conference call. Thank you for participating, and you may now disconnect.