MEDP 10-K & 10-Q changes, risk factors and insider trading

•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;

•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.results; and

•Geopolitical issues in Europe, the Middle EastEast, Asia, and AsiaSouth 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.

The biopharmaceutical and CRO industries are currently undergoing a period of increased merger activity. 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.companies which could include existing customers. As a result of this and future consolidations, our customer diversity may decrease and our business may be adversely affected.

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the notes thereto included elsewhere in this Annual Report on Form 10-K to provide an understanding of our results of operations, financial condition and cash flows. This section of this Form 10-K generally discusses 20242025 and 20232024 items and year-to-year comparisons between 20242025 and 2023.2024. For a comparison of our results of operations for the fiscal years ended December 31, 20232024 and December 31, 2022,2023, 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, 2023,2024, filed with the SEC on February 13,11, 2024.2025. This item and the related discussion contain forward-looking statements reflecting current expectations that involve risks and uncertainties. Actual results and the timing of events may differ materially from those indicated in such forward-looking statements. Important factorsFactors 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.

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 and favorable foreign currency adjustments of $14.6 million for the year ended December 31, 2023.2024.

Total revenue increased by $223.2$421.2 million, to $2,530.2 million tofor the year ended December 31, 2025, from $2,109.1 million for the year ended December 31, 2024, from $1,885.8 million for the year ended December 31, 2023.2024. The increase was broad based, but primarily driven by strong activity within the Metabolic, Oncology, CardiologyOncology and otherCentral uncategorizedNervous System therapeutic areas, compared to the same period in the prior year.

Miscellaneous income (expense), income, net

Miscellaneous income (expense), income, net changed by $4.7$9.4 million,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, 20242024. from $0.7 million of expense for the year ended December 31, 2023. TheThis change was mainly attributable to foreign exchange gains or losses that arise in connection with the revaluation of short-term inter-companyintercompany balances between our domestic and international subsidiaries,subsidiaries gains or losses from foreign currency transactions, such as those resultingand from the settlement of third-party accounts receivables and payables denominated in a currency other than the local currency of the entity making the paymentpayment, third-party investment gains or losses and proceeds from the recovery of a note receivable, compared to the same period in the prior year.

Interest income (expense),income, net

Interest income (expense),income, net changeddecreased by $25.5$12.2 million, to $25.0$12.8 million of income for the year ended December 31, 20242025, from $0.5$25.0 million of expense for the year ended December 31, 2023.2024. This change was mainly attributable to increaseddecreased interest income on Cash and cash equivalents and a reduction in short-term debt,equivalents, compared to the same period in the prior year.

We assess our liquidity in terms of our ability to generate cash to fund our operating, investing and financing activities. 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”),. andAll has$10.0 subsequentlymillion beenof amended.the line of credit is available for borrowing as of December 31, 2025. As of December 31, 2024,2025, we had cash and cash equivalents of $669.4$497.0 million, which increaseddecreased from $245.4$669.4 million as of December 31, 2023.2024 primarily due to repurchases of common stock. Approximately $31.8$21.2 million of our cash and cash equivalents, none of which was restricted, was held by our foreign subsidiaries as of December 31, 2024.2025.

Cash flows from operations are driven mainly by net income, depreciation, deferred income tax benefit,provision (benefit), stock-based compensation expense, depreciation, noncash lease expense and net movement in advanced billings, accounts receivable and unbilled, net and accrued expenses,expenses. leaseAdvanced liabilitiesbillings and accounts receivable and unbilled, net. Accounts receivable and unbilled, net, and advanced billingsnet fluctuate on a regular basis as we perform our services, bill our customers and ultimately collect on those receivables. 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 used in financing activities was $182.6$154.0 million for the year ended December 31, 2023,2024, primarily related to $155.0 million in repayments of the Credit Facility and $144.0$169.9 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$15.9 million.

In the fourth quarter of 2022, the Company's Board of Directors (the "Board") approved a new stockshare repurchase program ofwhich uphas been amended several times to $500.0increase million.the aggregate amount of the share repurchase authorization. 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 new repurchase program. 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, 2024,2025, wethe haveCompany has remaining authorization of $134.6$821.7 million under the new repurchase program.

The recoverability of our deferred tax assets is estimated based on consideration of all available positive and negative evidence, including, but not limited to, our ability to generate a sufficient level of future taxable income, reversals of deferred tax liabilities (other than those with an indefinite reversal period), tax planning strategies and recent financial performance. The assessment of recoverability is performed on a jurisdiction by jurisdiction basis. Based on the analysis of 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 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. Differences in actual results compared to our estimates and changes in our assumptions could result in an adjustment to the valuation allowance in the future and would generally impact earnings or other comprehensive income depending on the nature of the respective deferred asset for which the valuation allowance exists.

As of December 31, 20242025 and 2023,2024, 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. 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.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.

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),. withOn certainJanuary aspects5, 2026, the OECD/G20 announced the Side-by-Side ("SbS") package, implemented as administrative guidance and modifying the operation of Pillar Two2 effectiverules. JanuaryThe 1,package 2024introduces new safe harbors for multinational companies where domestic and otherinternational aspectstax effectivesystems Januarymeet 1,robust 2025.requirements Whileto itcoexist iswith uncertainPillar whether2, which would fully exempt U.S.-parented groups from the U.S.application willof enacttwo legislationof tothe adoptthree Pillar Two,2 certaintop-up countries in which we operate have adopted legislation, and other countries are in the process of introducing legislation to implement Pillar Two. As currently designed, Pillar Two will ultimately apply to our worldwide operations.taxes. 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.

InOn connectionFebruary with6, 2025 and May 16, 2025, respectively, the Board adopted and the Company's initial public offering (IPO), the Boardstockholders 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. The Amended 2016 Plan provides for long-term equity incentive compensation for key employees, officers and non-employee directors. 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. All of our currently outstanding awards are subject to equity classification pursuant to the terms of the award grants and based on accounting guidance which governs such transactions. Accounting guidance applicable to equity classified awards require all stock based compensation, including vested shares, grants of employee stock options and restricted stock to be recognized in the consolidated statements of operations based on their grant date fair values.

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. As of December 31, 2024,2025, all outstanding stock based awards were classified within equity.

We are one of the world’s leading clinical contract research organizations, or CROs, by revenue, solely focused on providing scientifically-driven outsourced clinical development services to the biotechnology, pharmaceutical and medical device industries. Our mission is to accelerate the global development of safe and effective medical therapeutics. We differentiate ourselves from our competitors by our disciplined operating model centered on providing full-service Phase I-IV clinical development services and our therapeutic expertise. We believe this combination results in timely and cost-effective delivery of clinical development services for our customers. We believe that we are a partner of choice for small-andsmall- 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.

We focus on conducting clinical trials across all major therapeutic areas, with particular strength in Oncology, Metabolic Disease, Cardiology, Central Nervous System, or CNS, and Antiviral and Anti-infective, or AVAI. Our global platform includes approximately 6,3006,500 employees across 46 countries as of MarchJune 31,30, 2026, providing our customers with broad access to diverse markets and patient populations as well as local regulatory expertise and market knowledge.

Net new business awards represent gross new business awards received in a period offset by total cancellations in that period. Net new business awards were $618.4$795.7 million and $500.0$1,414.2 million for the three and six months ended MarchJune 31,30, 20262026, respectively. Net new business awards were $620.5 million and $1,120.6 million for the three and six months ended June 30, 2025, respectively.

Backlog represents anticipated future net revenue from net new business awards that have not commenced or are currently in process but not complete. Reported backlog will fluctuate based on new business awards, changes in the scope of existing contracts, cancellations, revenue recognition on existing contracts and foreign exchange adjustments from non-U.S. dollar denominated backlog. As of MarchJune 31,30, 2026, our backlog increased by $83.2$140.6 million, or 2.9%,4.9%, to $2,929.2$3,014.2 million compared to $2,846.0$2,873.6 million as of MarchJune 31,30, 2025. Included within backlog as of MarchJune 31,30, 2026 was approximately $1,930.0$1,950.0 million to $1,950.0$1,970.0 million that we expect to convert to net revenue over the next twelve months, with the remainder expected to convert to net revenue thereafter.

The effect of foreign currency adjustments on backlog was as follows: unfavorablefavorable foreign currency adjustments of $3.7$0.1 million for the three months ended MarchJune 31,30, 2026; unfavorable foreign currency adjustments of $3.6 million for the six months ended June 30, 2026; favorable foreign currency adjustments of $14.5 million for the three months ended June 30, 2025; and favorable foreign currency adjustments of $6.9$21.4 million for the threesix months ended MarchJune 31,30, 2025.

Three Months Ended MarchJune 31,30, 2026 compared to Three Months Ended MarchJune 31,30, 2025

Total revenue increased by $148.0$104.0 million, to $706.6$707.3 million for the three months ended MarchJune 31,30, 2026, from $558.6$603.3 million for the three months ended MarchJune 31,30, 2025. Total revenue increased by $252.1 million, to $1,413.9 million for the six months ended June 30, 2026, from $1,161.9 million for the six months ended June 30, 2025. The increase for the three and six months ended MarchJune 31,30, 2026 was primarily driven by growth within the Metabolic, Oncology, Central Nervous System and AVAI therapeutic areas, compared to the same periodperiods in the prior year.

Total direct costs increased by $130.1$82.4 million, to $510.3$505.7 million for the three months ended MarchJune 31,30, 2026,2026 from $380.2$423.3 million for the three months ended MarchJune 31,30, 2025. Total direct costs increased by $212.5 million, to $1,016.0 million for the six months ended June 30, 2026 from $803.5 million for the six months ended June 30, 2025. 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 $109.6by $65.7 million and $175.3 million for the three and six months ended MarchJune 31,30, 2026, compared to the same periodperiods in the prior year. The higher personnel costs portion increased by $20.7$15.1 million and $35.8 million for the three and six months ended MarchJune 31,30, 2026, compared to the same periodperiods in the prior year.

Selling, general and administrative expenses increased by $1.4 million, to $48.1 million for the three months ended June 30, 2026 from $46.7 million for the three months ended June 30, 2025. Selling, general and administrative expenses decreased by $10.0$8.5 million, to $47.9$96.0 million for the six months ended June 30, 2026 from $104.6 million for the six months ended June 30, 2025. The increase for the three months ended MarchJune 31,30, 2026,2026 fromwas $57.9primarily millionattributed to higher personnel costs to support the growth in service activities of $0.8 million, compared to the same period in the prior year. The decrease for the threesix months ended MarchJune 31,30, 2025. The decrease2026 was primarily attributed to a decrease in stock-based compensation expense of $11.9$12.9 million, partially offset by higher personnel costs, excluding stock-based compensation expense, to support the growth in service activities of $1.5$3.3 million for the three months ended March 31, 2026,million, compared to the same period in the prior year.

Depreciation and amortization expense of $6.9$6.7 million for the three months ended MarchJune 31,30, 2026, remained relatively consistent with $6.9$7.0 million for the three months ended MarchJune 31,30, 2025. Depreciation and amortization expense of $13.6 million for the six months ended June 30, 2026, remained relatively consistent with $13.9 million for the six months ended June 30, 2025.

Miscellaneous expense, net decreased by $2.7 million, to $0.1 million for the three months ended June 30, 2026, from $2.9 million for the three months ended June 30, 2025. Miscellaneous income (expense), net changed by $2.8$5.5 million, to $1.0$0.8 million of income for the threesix months ended MarchJune 31,30, 2026,2026 from $1.8$4.7 million of expense for the threesix months ended MarchJune 31,30, 2025. TheThese changechanges waswere mainly attributable to foreign exchange gains or losses, such as those 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, and third-party investment gains or losses, compared to the same periodperiods in the prior year.

Interest income, net decreasedincreased by $1.3$3.9 million, to $5.1$5.0 million for the three months ended MarchJune 31,30, 2026, from $6.5$1.1 million for the three months ended MarchJune 31,30, 2025. ThisInterest wasincome, net increased by $2.6 million, to $10.1 million for the six months ended June 30, 2026, from $7.5 million for the six months ended June 30, 2025. These changes were mainly attributable to decreasedincreased interest income on Cash and cash equivalents, compared to the same periodperiods in the prior year.

Income tax provision increaseddecreased by $20.1$4.0 million, to $23.7$30.3 million for the three months ended MarchJune 31,30, 2026,2026 from $3.6$34.3 million for the three months ended MarchJune 31,30, 2025. Income tax provision increased by $16.2 million, to $54.0 million for the six months ended June 30, 2026 from $37.9 million for the six months ended June 30, 2025. The overall effective tax rate for the three months ended MarchJune 31,30, 2026 was 16.1%,20.0%, compared to an overall effective tax rate of 3.0%27.5% for the three months ended MarchJune 31,30, 2025. The increaseoverall effective tax rate for the six months ended June 30, 2026 was 18.1% compared to an overall effective tax rate of 15.6% for the six months ended June 30, 2025. The decrease in the income tax provision and overall effective tax rate for the three months ended June 30, 2026 was primarily attributable to aan decreaseincrease in excessthe estimated tax benefits recognizedrelated fromto share-basedForeign compensationDerived Deduction Eligible Income, and an increase in the benefit of uncertain tax positions which was partially offset by an increase in pre-tax book income compared to the same period in the prior year. The increase in the income tax provision and overall effective tax rate for the six months ended June 30, 2026 was primarily attributable to an increase in pre-tax book income and a decrease in excess tax benefits recognized from share-based compensationcompensation, which was partially offset by an increase in the estimated tax benefits related to Foreign Derived Deduction Eligible Income compared to the same period in the prior year.

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. Where relevant, the Company has reflected any material items that were enacted in the condensed consolidated financial statements for the three and six months ended MarchJune 31,30, 2026.

We assess our liquidity in terms of our ability to generate cash to fund our operating, investing and financing activities. 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 MarchJune 31,30, 2026. As of MarchJune 31,30, 2026, we had cash and cash equivalents of $652.7$502.7 million which increased from $497.0 million as of December 31, 2025. Approximately $21.7$26.3 million of cash and cash equivalents, none of which was restricted, was held by our foreign subsidiaries as of MarchJune 31,30, 2026.

Our expected primary cash needs on both a short and long-term basis are for investment in operational growth, including additional lease commitments, capital expenditures, share repurchases, selective strategic bolt-on acquisitions, other investments, and other general corporate needs. We have historically funded our operations and growth with cash flow from operations and borrowings under our credit facilities. We expect to continue expanding our operations through organic growth and potentially highly selective bolt-on acquisitions and investments. As of MarchJune 31,30, 2026, cash commitments to support operating business needs include lease liabilities discussed in Note 8 of the Condensed Consolidated Financial Statements, purchase commitments discussed in Note 11 of the Condensed Consolidated Financial Statements and capital expenditures primarily related to infrastructure investments in our facilities, equipment and technology. Capital spending as a percentage of revenue decreasedincreased by 8378 basis points to 0.96%2.17% in the threesix months ended MarchJune 31,30, 2026, compared to the same period in the prior year. 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. We have deemed that foreign earnings will be indefinitely reinvested and therefore we have not provided taxes on these earnings.

We have deemed that foreign earnings will be indefinitely reinvested and therefore we have not provided taxes on these earnings. While we do not anticipate the need to repatriate these foreign earnings for liquidity purposes given our cash flows from operations and available borrowings under existing and future credit facilities, we would incur taxes on these earnings if the need for repatriation due to liquidity purposes arises. We believe that our sources of liquidity and capital will be sufficient to finance our cash needs for the next 12 months and on a longer-term basis. 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.

Cash flows from operations are driven mainly by net income, deferred income tax provision, depreciation, noncash lease expense, stock-based compensation expense and net movement in advanced billings, accrued expenses, accounts receivable and unbilled, net, prepaid expenses and other current assets, lease liabilities and other assets and liabilities, net,net. leaseAdvanced liabilities,billings and advanced billings. Accountsaccounts 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. 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 was $151.8$313.8 million for the threesix months ended MarchJune 31,30, 2026 beginning with net income of $123.9$245.2 million. Adjustments to reconcile net income to net cash provided by operating activities were $36.6$57.9 million, primarily related to deferred income tax provision of $18.5$22.8 million, depreciation of $6.8$13.3 million, noncash lease expense of $5.8$11.9 million and stock basedstock-based compensation expense of $4.9$9.3 million. Changes in operating assets and liabilities usedprovided $8.7$10.7 million in operating cash flows and was primarily driven by increased advanced billings of $50.3 million and increased accrued expenses of $43.7 million, partially offset by increased accounts receivable and unbilled, net of $39.4 million, increased prepaid expenses and other current assets of $15.9 million, changes in other assets and liabilities, net of $10.2$15.6 million and decreased lease liabilities of $5.3 million, partially offset by decreased accounts receivable and unbilled, net of $7.8 million and increased advanced billings of $2.0$12.4 million.

Net cash flows provided by operating activities was $125.8$274.4 million for the threesix months ended MarchJune 31,30, 2025 beginning with net income of $114.6$204.9 million. Adjustments to reconcile net income to net cash provided by operating activities were $30.1$82.8 million, primarily related to stockdeferred basedincome tax provision of $34.9 million, stock-based compensation expense of $16.9$22.8 million, depreciation of $6.7$13.5 million and noncash lease expense of $6.1$11.7 million. Changes in operating assets and liabilities used $18.9$13.3 million in operating cash flows and was primarily driven by decreasedincreased accruedaccounts expensesreceivable and unbilled, net of $23.2$82.0 million and increased prepaid expenses and other current assets of $17.6$33.1 million, partially offset by changes in other assets and liabilities, net of $11.6 million, increased accounts payable of $10.7 million and increased advanced billings of $8.1$98.2 million.

Net cash used in investing activities was $6.7$30.6 million for the threesix months ended MarchJune 31,30, 2026 primarily consisting of property and equipment expenditures.

Net cash used in investing activities was $10.0$16.0 million for the threesix months ended MarchJune 31,30, 2025 primarily consisting of property and equipment expenditures.

Net cash used in financing activities was $346.0$275.7 million for the threesix months ended MarchJune 31,30, 20252026 primarily related to $371.9$294.8 million in repurchases of common stock, partially offset by proceeds from stock option exercises of $25.9$19.1 million.

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 did not execute any share repurchases duringDuring the three and six months ended MarchJune 31,30, 2026.2026, the Company repurchased 705,616 shares for $294.7 million. During the three and six months ended MarchJune 31,30, 2025, the Company repurchased 1,193,0111,754,264 shares and 2,947,275 shares for $389.8$518.5 million.million and $908.4 million, respectively. As of MarchJune 31,30, 2026, the Company has remaining authorization of $821.7$527.0 million under the repurchase program.

As of MarchJune 31,30, 2026, we had no indebtedness. Refer to Note 7 of the Notes to Condensed Consolidated Financial Statements for details regarding our Credit Facility.