medp-20230331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________________

FORM 10-Q

___________________________________________

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission file number: 001-37856

___________________________________________

Medpace Holdings, Inc.

(Exact name of registrant as specified in its charter)

___________________________________________


Delaware			32-0434904
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

5375 Medpace Way, Cincinnati, OH 45227

(Address of principal executive offices) (Zip Code)

(513) 579-9911

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock $0.01 par value	MEDP	NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	x	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	o
Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock, as of the latest practicable date.


Class						Number of Shares Outstanding
Common Stock $0.01 par value						30,499,074 shares outstanding as of April 21, 2023

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MEDPACE HOLDINGS, INC. AND SUBSIDIARIES

FORM 10-Q

FOR QUARTERLY PERIOD ENDED MARCH 31, 2023

TABLE OF CONTENTS


Item Number		Page
	PART I — FINANCIAL INFORMATION	3
Item 1.	Financial Statements (unaudited)	3
	Condensed Consolidated Balance Sheets as of March 3 1 , 20 23 and December 31, 2022	3
	Condensed Consolidated Statements of Operations for the three months ended March 3 1 , 202 3 and 2022	4
	Condensed Consolidated Statements of Comprehensive Income for the three months ended March 3 1 , 202 3 and 2 022	5
	Condensed Consolidated Statements of Shareholders’ Equity for the three months ended March 3 1 , 202 3 and 2022	6
	Condensed Consolidated Statements of Cash Flows for the three months ended March 3 1 , 202 3 and 2 022	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	24

	PART II — OTHER INFORMATION	25
Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 3.	Defaults Upon Senior Securities	25
Item 4.	Mine Safety Disclosures	25
Item 5.	Other Information	25
Item 6.	Exhibits	26
	EXHIBIT INDEX	28
	SIGNATURES	28

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PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

MEDPACE HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)


(Amounts in thousands, except share amounts)	As of
	March 31, 2023		December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	46,922	$	28,265
Accounts receivable and unbilled, net (includes $7.7 million with related parties at March 31, 2023 and December 31, 2022, respectively)	257,746		253,404
Prepaid expenses and other current assets	62,954		52,293
Total current assets	367,622		333,962
Property and equipment, net	113,755		109,849
Operating lease right-of-use assets	143,309		139,068
Goodwill	662,396		662,396
Intangible assets, net	37,458		38,008
Deferred income taxes	49,157		48,083
Other assets	22,026		21,129
Total assets	$	1,395,723	$	1,352,495
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable (includes $0.4 million and $0.3 million with related parties at March 31, 2023 and December 31, 2022, respectively)	$	37,110	$	33,069
Accrued expenses	201,201		210,125
Advanced billings (includes $11.6 million and $8.8 million with related parties at March 31, 2023 and December 31, 2022, respectively)	466,040		462,729
Short-term debt	115,000		50,000
Other current liabilities (includes $12.5 million with related parties at March 31, 2023 and December 31, 2022, respectively)	62,538		47,547
Total current liabilities	881,889		803,470
Operating lease liabilities	142,689		138,867
Deferred income tax liability	1,090		1,070
Other long-term liabilities	22,793		22,701
Total liabilities	1,048,461		966,108
Commitments and contingencies (see Note 11)
Shareholders’ equity:
Preferred stock - $0.01 par-value; 5,000,000 shares authorized; no shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively	—		—
Common stock - $0.01 par-value; 250,000,000 shares authorized at March 31, 2023 and December 31, 2022, respectively; 30,623,655 and 31,091,694 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively	306		309
Treasury stock - 70,573 and 71,573 shares at March 31, 2023 and December 31, 2022, respectively	(12,322)		(12,497)
Additional paid-in capital	778,691		770,794
Accumulated deficit	(408,099)		(359,827)
Accumulated other comprehensive loss	(11,314)		(12,392)
Total shareholders’ equity	347,262		386,387
Total liabilities and shareholders’ equity	$	1,395,723	$	1,352,495

See notes to condensed consolidated financial statements.

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MEDPACE HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)


(Amounts in thousands, except per share amounts)	Three Months Ended March 31,
	2023		2022
Revenue, net (includes $15.8 million and $13.3 million with related parties for the three months ended March 31, 2023 and 2022, respectively.	$	434,074	$	330,947
Operating expenses:
Direct service costs, excluding depreciation and amortization	151,068		125,434
Reimbursed out-of-pocket expenses	152,817		106,836
Total direct costs	303,885		232,270
Selling, general and administrative	38,027		29,366
Depreciation	5,408		4,270
Amortization	550		838
Total operating expenses	347,870		266,744
Income from operations	86,204		64,203
Other (expense) income, net:
Miscellaneous income, net	687		1,067
Interest (expense) income, net	(861)		54
Total other (expense) income, net	(174)		1,121
Income before income taxes	86,030		65,324
Income tax provision	13,136		4,013
Net income	$	72,894	$	61,311
Net income per share attributable to common shareholders:
Basic	$	2.35	$	1.75
Diluted	$	2.27	$	1.69
Weighted average common shares outstanding:
Basic	31,008		34,918
Diluted	32,155		36,364

See notes to condensed consolidated financial statements.

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MEDPACE HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)


(Amounts in thousands)	Three Months Ended March 31,
	2023		2022
Net income	$	72,894	$	61,311
Other comprehensive income
Foreign currency translation adjustments, net of taxes	1,078		(1,542)
Comprehensive income	$	73,972	$	59,769

See notes to condensed consolidated financial statements.

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MEDPACE HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)


(Amounts in thousands)	Common Stock		Treasury Stock		Additional Paid-In Capital		(Accumulated Deficit) Retained Earnings		Accumulated Other Comprehensive Loss		Total
BALANCE — December 31, 2021	$	360	$	(5,427)	$	727,857	$	234,984	$	(4,846)	$	952,928
Net income							61,311				61,311
Foreign currency translation									(1,542)		(1,542)
Stock-based compensation expense					4,372						4,372
Stock options exercised	3				13,894						13,897
Repurchases of common stock	(27)		(14,243)				(411,680)				(425,950)
Retirement of treasury stock			5,427				(5,427)				—
BALANCE — March 31, 2022	$	336	$	(14,243)	$	746,123	$	(120,812)	$	(6,388)	$	605,016

	Common Stock		Treasury Stock		Additional Paid-In Capital		(Accumulated Deficit) Retained Earnings		Accumulated Other Comprehensive Loss		Total
BALANCE — December 31, 2022	$	309	$	(12,497)	$	770,794	$	(359,827)	$	(12,392)	$	386,387
Net income							72,894				72,894
Foreign currency translation									1,078		1,078
Stock-based compensation expense					5,438						5,438
Stock options exercised	4				2,459						2,463
Repurchases of common stock	(7)						(120,991)				(120,998)
Re-issuance of treasury stock			175				(175)				—
BALANCE — March 31, 2023	$	306	$	(12,322)	$	778,691	$	(408,099)	$	(11,314)	$	347,262

See notes to condensed consolidated financial statements.

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MEDPACE HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


(Amounts in thousands)	Three Months Ended March 31,
	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	72,894	$	61,311
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	5,408		4,270
Amortization	550		838
Stock-based compensation expense	5,438		4,372
Noncash lease expense	4,757		4,537
Deferred income tax benefit	(1,063)		(713)
Other	(1,455)		(420)
Changes in assets and liabilities:
Accounts receivable and unbilled, net	(4,344)		(38,224)
Prepaid expenses and other current assets	(10,205)		(5,547)
Accounts payable	4,457		(1,041)
Accrued expenses	(9,364)		(3,651)
Advanced billings	3,311		22,580
Lease liabilities	(5,284)		(3,542)
Other assets and liabilities, net	14,976		1,486
Net cash provided by operating activities	80,076		46,256
CASH FLOWS FROM INVESTING ACTIVITIES:
Property and equipment expenditures	(9,513)		(9,257)
Other	10		(1,951)
Net cash used in investing activities	(9,503)		(11,208)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from stock option exercises	2,463		13,867
Repurchases of common stock	(120,146)		(425,950)
Proceeds from revolving loan	90,000		49,500
Payments on revolving loan	(25,000)		(49,500)
Net cash used in financing activities	(52,683)		(412,083)
EFFECT OF EXCHANGE RATES ON CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	767		(1,426)
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	18,657		(378,461)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — Beginning of period	28,265		461,304
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — End of period	$	46,922	$	82,843
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION —
Acquisition of property and equipment—non-cash	$	7,216	$	7,375

See notes to condensed consolidated financial statements.

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MEDPACE HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

March 31, 2023

(1) Basis of Presentation

Description of Business

Medpace Holdings, Inc. (together with its subsidiaries, “Medpace” or the “Company”), a Delaware corporation, is a global provider of clinical research-based drug and medical device development services. The Company partners with pharmaceutical, biotechnology, and medical device companies in the development and execution of clinical trials. The Company’s drug development services focus on full service Phase I-IV clinical development services and include development plan design, project management, regulatory affairs, clinical monitoring, data management and analysis, pharmacovigilance new drug application submissions, post-marketing clinical support, laboratory services, clinical human pharmacology, imaging services, and electrocardiography reading support for clinical trials.

The Company’s operations are principally based in North America, Europe, and Asia.

Unaudited Interim Financial Information

The interim condensed consolidated financial statements include the accounts of the Company, are prepared in conformity with U.S. generally accepted accounting principles (“GAAP”), and are unaudited. In the opinion of the Company’s management, all adjustments of a normal recurring nature necessary for a fair presentation have been reflected. Certain financial information that is normally included in annual financial statements prepared in accordance with GAAP, but that is not required for interim reporting purposes, has been omitted. The preparation of the interim condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results and outcomes could differ from management’s estimates and assumptions. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

Share Repurchases

In 2018, the Board of Directors approved a stock repurchase program which has been amended several times to increase the aggregate amount of the stock repurchase authorization. During the three months ended March 31, 2022, the Company repurchased 2,745,865 shares for $425.9 million.

In the fourth quarter of 2022, the Board approved a new stock repurchase program of up to $500.0 million. During the three months ended March 31, 2023, the Company repurchased 654,787 shares for $120.1 million. As of March 31, 2023, we have remaining authorization of $332.7 million under the new repurchase program.

Repurchases under the share repurchase program are executed in the open market or negotiated transactions under trading plans put in place pursuant to Rule 10b5-1. The Company constructively retired the repurchased shares associated with these approved share repurchases, except for a small portion which were retained as Treasury Shares on the condensed consolidated statements of shareholders' equity. Retired share repurchase amounts paid in excess of par value are reflected within Accumulated deficit/Retained earnings in the Company’s condensed consolidated balance sheets.

(2) Net Income Per Share

Basic and diluted earnings or loss per share (“EPS”) are computed using the two-class method, which is an earnings allocation that determines EPS for each class of common stock and participating securities according to dividends declared and participation rights in undistributed earnings. The Company’s Restricted Stock Awards (“RSA”) are considered participating securities because they are legally issued at the date of grant and holders are entitled to receive non-forfeitable dividends during the vesting term.

The computation of diluted EPS includes additional common shares, such as unvested Restricted Stock Units (“RSU”) and stock options with exercise prices less than the average market price of the Company’s common stock during the period (“in-the-money options”), which would be considered outstanding. This assumes that additional shares would have to be issued in cases where the exercise price of stock options is less than the value of the common stock being acquired because

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the cash proceeds received from the stock option holder would not be sufficient to acquire that same number of shares. The Company does not compute diluted EPS in cases where the inclusion of such additional shares would be anti-dilutive in effect.

The following table sets forth the computation of basic and diluted earnings per share for the three months ended March 31, 2023 and 2022 (in thousands, except for earnings per share):


	Three Months Ended March 31,
	2023		2022
Weighted-average shares:
Common shares outstanding	31,008		34,918
RSAs	21		21
Total weighted-average shares	31,029		34,939
Earnings per common share—Basic
Net income	$	72,894	$	61,311
Less: Undistributed earnings allocated to RSAs	(49)		(36)
Net income available to common shareholders—Basic	$	72,845	$	61,275

Net income per common share—Basic	$	2.35	$	1.75

Basic weighted-average common shares outstanding	31,008		34,918
Effect of diluted shares	1,147		1,446
Diluted weighted-average shares outstanding	32,155		36,364

Net income per common share—Diluted	$	2.27	$	1.69

During the three months ended March 31, 2023 and 2022, the Company had (in thousands) 10 and 264 stock options, respectively, that were excluded due to the exercise price exceeding the average fair value of the Company’s common stock during the period.

(3) Fair Value Measurements

The Company follows accounting guidance related to fair value measurements that defines fair value, establishes a framework for measuring fair value, and establishes a hierarchy for inputs used in measuring fair value. This hierarchy maximizes the use of “observable” inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The hierarchy specifies three levels based on the inputs, as follows:

Level 1: Valuations based on quoted prices in active markets for identical assets or liabilities.

Level 2: Valuations based on directly observable inputs or unobservable inputs corroborated by market data.

Level 3: Valuations based on unobservable inputs supported by little or no market activity representing management’s determination of assumptions of how market participants would price the assets or liabilities.

The fair value of financial instruments such as cash and cash equivalents, accounts receivable and unbilled, net, accounts payable, accrued expenses and advanced billings approximate their carrying amounts due to their short term maturities.

The Company does not have material recurring fair value measurements as of March 31, 2023. There were no transfers between Level 1, Level 2 or Level 3 during the three months ended March 31, 2023 or March 31, 2022.

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(4) Contract Assets and Contract Liabilities

Contract assets and liabilities are reflected in the Company’s condensed consolidated balance sheets within the accounts reflected below.

Contract Assets

Accounts receivable represent amounts due from the Company’s customers who are concentrated primarily in the pharmaceutical, biotechnology, and medical device industries. Unbilled represents revenue recognized to date that has not been billed or is not yet contractually billable to the customer. In general, amounts become billable upon the achievement of negotiated contractual events, in accordance with predetermined payment schedules or when a reimbursable expense has been incurred. Amounts classified to unbilled are those billable to customers within one year from the respective balance sheet date.

Accounts receivable and unbilled, net consisted of the following (in thousands):


	As of
	March 31, 2023		December 31, 2022
Accounts receivable	$	215,983	$	213,169
Unbilled receivables	41,933		40,405
Less: allowance for doubtful accounts	(170)		(170)
Total accounts receivable and unbilled, net	$	257,746	$	253,404

Contract Liabilities

Advanced billings represent cash received from customers, or billed amounts per an agreed upon payment schedule, in advance of services being performed or revenue being recognized.

Advanced billings consisted of the following (in thousands):


	As of
	March 31, 2023		December 31, 2022
Advanced billings	$	466,040	$	462,729

As of March 31, 2023, we had approximately $2.9 billion of performance obligations remaining to be performed for active projects.

(5) Intangible Assets, Net

Intangible assets, net consisted of the following (in thousands):


	As of
	March 31, 2023		December 31, 2022
Intangible assets:
Finite-lived intangible assets:
Carrying amount:
Customer relationships	145,051		145,051
Accumulated amortization:
Customer relationships	(139,239)		(138,689)
Total finite-lived intangible assets, net	5,812		6,362
Trade name (indefinite-lived)	31,646		31,646
Total intangible assets, net	$	37,458	$	38,008

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As of March 31, 2023, estimated amortization expense of the Company’s intangible assets for each of the next five years and thereafter is as follows (in thousands):


	Amortization
Remainder of 2023	$	1,649
2024	1,443
2025	946
2026	620
2027	577
2028	577
	$	5,812

(6) Accrued Expenses

Accrued expenses consisted of the following (in thousands):


	As of
	March 31, 2023		December 31, 2022
Employee compensation and benefits	$	50,598	$	71,197
Project related reimbursable expenses	139,052		128,416
Other	11,551		10,512
Total accrued expenses	$	201,201	$	210,125

(7) Short-term Debt

Short-term debt consisted of the following (in thousands):


	As of
	March 31, 2023		December 31, 2022
Revolving credit facility	$	115,000	$	50,000
Short-term debt	$	115,000	$	50,000

Principal payments on Short-term debt are due as follows (in thousands):


2023 (remaining)	—
2024	115,000
Total	$	115,000

The estimated fair value of the Company’s debt based on Level 2 inputs using the market approach, which is primarily based on rates at which the debt is traded among financial institutions, approximates the carrying value as of March 31, 2023 and December 31, 2022.

On September 30, 2019 (the “Closing Date”), the Company obtained an unsecured credit facility in an aggregate principal amount up to $50.0 million (as amended from time to time, the “Credit Facility”) through its wholly owned subsidiaries, Medpace, Inc., as borrower (the “Borrower”), and Medpace IntermediateCo, Inc., as guarantor (the “Guarantor”).

On the Closing Date, the Borrower and lender entered into a Loan Agreement (as it may be amended from time to time, the “Loan Agreement”) providing for the Credit Facility, and the Guarantor executed a Guaranty Agreement providing for its guarantee of the payment and performance of the obligations under the Loan Agreement. On March 15, 2022, the Company entered into Amendment No. 4 to the Loan Agreement, which increased the aggregate principal amount that may be borrowed under the facility’s line of credit to up to $250.0 million. On March 31, 2023, the Company entered into Amendment No. 5 to the Loan Agreement, which changed the aggregate principle amount that may be borrowed under the

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facility’s line of credit to up to $150.0 million, adjusted the interest rate and fee charged on the credit facility and extended the expiration date of revolving credit note to March 29, 2024. The Credit Facility bears interest at a rate of the sum of The Secured Overnight Financing Rate (SOFR) plus 125 basis points (1.25%) or the highest of the Prime Rate, the sum of the Overnight Bank Funding Rate plus 50 basis points (0.50%) and the sum of Daily Simple SOFR plus 100 basis points (1.00%). As of March 31, 2023, the Credit Facility interest rate was 6.0%.

The Loan Agreement contains other customary loan terms, representations and warranties, and affirmative and negative covenants, in each case, subject to customary limitations, exceptions and exclusions. The Loan Agreement contains certain events of default, including, among others, non-payment of principal or interest and breach of the covenants.

As of March 31, 2023, there were $0.2 million in letters of credit outstanding related to certain operating lease obligations, which are secured by the Credit Facility.

(8) Leases

The Company enters into leases for real estate and equipment. Real estate leases are for our corporate office space and laboratories around the world. Real estate leases have remaining lease terms of less than 1 year to 17 years. Many of the Company’s leases include options to extend the leases on a month to month basis or for set periods for up to 20 years. Many leases also include options to terminate the leases within 1 year or per other contractual terms.

The components of lease expense were as follows (in thousands):


	Three Months Ended March 31,
	2023		2022
Operating lease cost	$	6,681	$	6,500
Variable lease cost	2,337		2,016

Supplemental cash flow information related to the leases was as follows (in thousands):


	Three Months Ended March 31,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	5,350	$	3,806

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	8,419		17,745

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Supplemental balance sheet information related to the leases was as follows (in thousands):


	As of
	March 31, 2023			December 31, 2022
Operating lease right-of-use assets - related parties	$	87,600		$	86,356
Operating lease right-of-use assets - non-related parties	55,709			52,712
Operating lease right-of-use assets	$	143,309		$	139,068

Other current liabilities - related parties	5,305			5,409
Other current liabilities - non-related parties	13,934			13,863
Other current liabilities	$	19,239		$	19,272

Operating lease liabilities - related parties	94,901			93,393
Operating lease liabilities - non-related parties	47,788			45,474
Operating lease liabilities	142,689			138,867

Total operating lease liabilities	$	161,928		$	158,139

Weighted Average Remaining Lease Term (years)
Operating leases	10.8			11.1
Weighted Average Discount Rate
Operating leases	5.4		%	5.2		%

Lease payments due related to lease liabilities as of March 31, 2023 were as follows (in thousands):


	Related Party Operating Leases		Non-Related Parties Operating Leases		Total Operating Leases
Remainder of 2023	$	8,406	$	11,657	$	20,063
2024	11,412		14,444		25,856
2025	11,607		12,270		23,877
2026	11,807		10,147		21,954
2027	10,839		7,381		18,220
Later years	100,278		12,262		112,540
Total lease payments	154,349		68,161		222,510
Less: imputed interest	(54,143)		(6,439)		(60,582)
Total	$	100,206	$	61,722	$	161,928

As of March 31, 2023, we have several additional leases with contractual obligations, which have not yet commenced, with future payments of $0.3 million.

(9) Shareholder’s Equity and Stock-Based Compensation

The Company granted 26,668 awards to employees under the 2016 Incentive Award Plan during the three months ended March 31, 2023, consisting of 25,418 RSU and 1,250 stock option awards having four year vesting schedules. The Company granted an additional 573 stock option awards to non-employee directors under the 2016 Incentive Award Plan, during the three months ended March 31, 2023. These awards are scheduled to vest on the earlier of (a) the day immediately preceding the date of the first annual meeting following the date of grant and (b) the first anniversary of the date of grant, subject to the non-employee director continuing in service through the applicable vesting date.

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Award Activity

The following table sets forth the Company’s stock option activity:


	Three Months Ended March 31, 2023
	Stock Options	Weighted Average Exercise Price
Outstanding - beginning of period	1,629,148	$	89.71
Granted	1,823	$	213.41
Exercised	(67,988)	$	36.24
Cancelled/Forfeited/Expired	(3,000)	$	166.73
Outstanding - end of period	1,559,983	$	92.03

Exercisable - end of period	1,053,267	$	62.06

The following table sets forth the Company’s RSA/RSU activity:


			Three Months Ended March 31, 2023
			Shares/Units
Outstanding and unvested - beginning of period			523,377
Granted			25,418
Vested			(118,760)
Forfeited			(6,934)
Outstanding and unvested - end of period			423,101

Cumulative vested shares - end of period			2,348,676

Stock-based compensation expense recognized in the condensed consolidated statements of operations related to all outstanding stock based compensation awards is summarized below (in thousands):


	Three Months Ended March 31,
	2023		2022
Total direct costs	$	2,940	$	2,440
Selling, general and administrative	2,498		1,932
Total stock-based compensation expense	$	5,438	$

SEC Form 10-Q filed by Medpace Holdings Inc.