Medpace (MEDP) 2026年第三季法說會：新增訂單創新高與調升財測指引

重點摘要

• 2026 年第三季營收年增 8.5% 至 7.16 億美元，淨利成長 23.7% 至 1.375 億美元。
• 受惠於可報銷成本下降與利用率穩健，EBITDA 成長 16.0% 至 1.721 億美元，EBITDA 利潤率由 22.5% 擴大至 24.0%。
• 計入在手訂單的新增簽約淨額達到創紀錄的 8.734 億美元，成長 10.6%。過去 12 個月的累計簽約總額為 30.2 億美元，年增 23.9%。
• 期末在手訂單約為 32 億美元，成長 5.6%，其中約 19.9 億美元預計將在未來 12 個月內轉化為營收。
• Medpace 上修 2026 年展望，預計營收為 28.35 億至 28.55 億美元，稀釋後每股盈餘 (EPS) 為 17.97 至 18.32 美元。
• 管理層將需求環境描述為強勁，但表示第四季的簽約與取消狀況仍是 2027 年展望的重要變數。

主要財務數據

2026 年前九個月，營收成長 16.9% 至 21.3 億美元。EBITDA 成長 19.5% 至 4.749 億美元，利潤率由去年同期的 21.8% 上升至 22.3%。淨利成長 21.1% 至 3.827 億美元，稀釋後每股盈餘 (EPS) 從 10.54 美元升至 13.37 美元。

業務與營運表現

管理層回報強勁的 RFP 活動、初步簽約通知與得標率。待處理商機的總金額有所增加，而客戶的簽約決策與專案啟動則繼續保持管理層所稱相對正常的步調。

業務結構向 Medpace 最大的治療領域——傳統腫瘤學傾斜，近期代謝類疾病簽約量較低。然而管理層表示，案源管道中仍包含大量代謝類商機。

公司將得標率提升部分歸因於 2025 年底實施的流程改進。管理層表示截至目前的評估為正面，但提醒目前僅有少數幾個季度的結果可供參考。

在穩健利用率的支持下，直接服務表現維持強勁。截至法說會舉行時，營收成長速度快於人數成長，員工離職率維持在低位，薪資壓力符合管理層預期。

前五大客戶約占過去 12 個月營收的 31%，前十大客戶約占 39%。

管理層業績指引

Medpace 更新其 2026 全年指引如下：

該指引假設以 2026 年 9 月 30 日的外匯匯率為準，且不進行額外的股票回購。

管理層預計代收代付營收將占第四季營收的 40.0%-40.5% 左右。雖然季度業績可能受到合約時間點與 ASC 606 會計準則的影響，但預期第四季利潤率不會出現大幅惡化。

Medpace 計劃於 2 月公布第四季財報時一併發布 2027 年的正式指引。管理層表示，目前建模顯示與市場共識預測無顯著落差，但第四季預訂量與取消量可能會實質影響該展望。辛辛那提園區的大型擴充計畫預計將在 2027 年增加約 2,000 萬美元的營運成本。

風險與關注焦點

• 第三季在手訂單取消量處於公司預期區間的高端，但管理層形容其仍屬可控。
• 近期的取消主要與產品試驗失敗、安全性警訊及產品組合優先順序調整有關，而非資金限制。
• 代收代付營收的時間點與結構可能影響申報的營收成長率及 EBITDA 利潤率。
• 由於合約時間點與 ASC 606 會計影響，季度利潤率可能出現波動。
• 第四季簽約量與意外的取消仍是 2027 年營收預期的關鍵變數。
• 辛辛那提擴建計畫預計將在 2027 年造成約 2,000 萬美元的營運成本阻力。

分析師問答環節亮點

預訂量與需求：管理層表示，待處理簽約與潛在商機的總金額大幅增加。若第四季得標率維持在接近第三季的水平，且取消量保持在正常區間內，管理層預期 2027 年營收展望將持續改善。

利潤率永續性：公司提及良好的利用率、低員工離職率以及營收成長快於員工人數成長。雖然第三季利潤率表現強勁，但管理層提醒不要將單一季度視為固定常態，因為存在時間點與會計波動。

訂單取消主因：管理層表示，取消狀況仍難以預測，通常與臨床產品表現、安全性問題或優先順序調整有關。資金並非當前的主要因素。

競爭環境與定價：Medpace 繼續優先考量全方位臨床開發服務與執行品質，而非主要在價格上競爭。管理層表示，在經歷前幾年部分競爭對手異常激進的行為後，定價環境已趨於正常化。

治療與客戶結構：腫瘤學在簽約與通知中重新獲得較大份額。大型藥企業務仍集中於少數客戶，且往往源於後來被收購的生物技術客戶。

法說會完整逐字稿

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完整財報電話會議逐字稿

管理層陳述

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.

分析師問答

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.