10-Q 1 medp-20220331.htm 10-Q 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

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

For the quarterly period ended March 31, 2022

or

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 No

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 No

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

 

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

Emerging growth company

 

 

 

 

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.

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

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

 

33,647,133 shares outstanding as of April  22, 2022

 

 


 

MEDPACE HOLDINGS, INC. AND SUBSIDIARIES

FORM 10-Q

FOR QUARTERLY PERIOD ENDED MARCH 31, 2022

TABLE OF CONTENTS

 

Item Number

 

 

 

Page

 

 

PART I — FINANCIAL INFORMATION

 

3

Item 1.

 

Financial Statements (unaudited)

 

3

 

 

Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021

 

3

 

 

Condensed Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021

 

4

 

 

Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2022 and 2021

 

5

 

 

Condensed Consolidated Statements of Shareholders’ Equity for the three months ended March 31, 2022 and 2021

 

6

 

 

Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021

 

7

 

 

Notes to Condensed Consolidated Financial Statements

 

8

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

17

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

23

Item 4.

 

Controls and Procedures

 

23

 

 

 

 

 

 

 

PART II — OTHER INFORMATION

 

23

Item 1.

 

Legal Proceedings

 

23

Item 1A.

 

Risk Factors

 

23

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

25

Item 3.

 

Defaults Upon Senior Securities

 

26

Item 4.

 

Mine Safety Disclosures

 

26

Item 5.

 

Other Information

 

26

Item 6.

 

Exhibits

 

26

 

 

EXHIBIT INDEX

 

27

 

 

SIGNATURES

 

28

 

- 2 -


 

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,

 

 

December 31,

 

 

 

2022

 

 

2021

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

82,843

 

 

$

461,304

 

Accounts receivable and unbilled, net (includes $6.0 million and $2.7 million with related parties at March 31, 2022 and December 31, 2021, respectively)

 

 

224,759

 

 

 

186,432

 

Prepaid expenses and other current assets

 

 

48,367

 

 

 

43,176

 

Total current assets

 

 

355,969

 

 

 

690,912

 

Property and equipment, net

 

 

98,529

 

 

 

93,153

 

Operating lease right-of-use assets

 

 

141,638

 

 

 

129,558

 

Goodwill

 

 

662,396

 

 

 

662,396

 

Intangible assets, net

 

 

40,522

 

 

 

41,360

 

Deferred income taxes

 

 

25,809

 

 

 

25,134

 

Other assets

 

 

19,483

 

 

 

17,422

 

Total assets

 

$

1,344,346

 

 

$

1,659,935

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable (includes $0.7 million and $0.3 million with related parties at March 31, 2022 and December 31, 2021, respectively)

 

$

25,434

 

 

$

25,678

 

Accrued expenses

 

 

155,018

 

 

 

159,286

 

Advanced billings (includes $11.4 million and $8.3 million with related parties at March 31, 2022 and December 31, 2021, respectively)

 

 

367,221

 

 

 

344,641

 

Other current liabilities

 

 

31,755

 

 

 

27,612

 

Total current liabilities

 

 

579,428

 

 

 

557,217

 

Operating lease liabilities

 

 

141,624

 

 

 

130,965

 

Deferred income tax liability

 

 

1,055

 

 

 

1,080

 

Other long-term liabilities

 

 

17,223

 

 

 

17,745

 

Total liabilities

 

 

739,330

 

 

 

707,007

 

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, 2022 and December 31, 2021, respectively

 

 

-

 

 

 

-

 

Common stock - $0.01 par-value; 250,000,000 shares authorized at March 31, 2022 and December 31, 2021, respectively; 33,651,360 and 36,006,778 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively

 

 

336

 

 

 

360

 

Treasury stock - 81,573 and 180,000 shares at March 31, 2022 and December 31, 2021, respectively

 

 

(14,243

)

 

 

(5,427

)

Additional paid-in capital

 

 

746,123

 

 

 

727,857

 

(Accumulated deficit) Retained earnings

 

 

(120,812

)

 

 

234,984

 

Accumulated other comprehensive loss

 

 

(6,388

)

 

 

(4,846

)

Total shareholders’ equity

 

 

605,016

 

 

 

952,928

 

Total liabilities and shareholders’ equity

 

$

1,344,346

 

 

$

1,659,935

 

 

See notes to condensed consolidated financial statements.

 

- 3 -


 

MEDPACE HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

 

(Amounts in thousands, except per share amounts)

 

Three Months Ended

 

 

 

 

March 31,

 

 

 

 

2022

 

 

2021

 

 

Revenue, net (includes $13.3 million and $5.3 million with related parties for the three months ended March 31, 2022 and 2021, respectively)

 

$

330,947

 

 

$

259,965

 

 

Operating expenses:

 

 

 

 

 

 

 

Direct service costs, excluding depreciation and amortization

 

 

125,434

 

 

 

101,387

 

 

Reimbursed out-of-pocket expenses

 

 

106,836

 

 

 

80,151

 

 

Total direct costs

 

 

232,270

 

 

 

181,538

 

 

Selling, general and administrative

 

 

29,366

 

 

 

25,738

 

 

Depreciation

 

 

4,270

 

 

 

3,812

 

 

Amortization

 

 

838

 

 

 

1,278

 

 

Total operating expenses

 

 

266,744

 

 

 

212,366

 

 

Income from operations

 

 

64,203

 

 

 

47,599

 

 

Other income, net:

 

 

 

 

 

 

 

Miscellaneous income, net

 

 

1,067

 

 

 

924

 

 

Interest income (expense), net

 

 

54

 

 

 

(14

)

 

Total other income, net

 

 

1,121

 

 

 

910

 

 

Income before income taxes

 

 

65,324

 

 

 

48,509

 

 

Income tax provision

 

 

4,013

 

 

 

5,203

 

 

Net income

 

$

61,311

 

 

$

43,306

 

 

Net income per share attributable to common shareholders:

 

 

 

 

 

 

 

Basic

 

$

1.75

 

 

$

1.21

 

 

Diluted

 

$

1.69

 

 

$

1.14

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

Basic

 

 

34,918

 

 

 

35,753

 

 

Diluted

 

 

36,364

 

 

 

37,749

 

 

 

See notes to condensed consolidated financial statements.

 

- 4 -


 

MEDPACE HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

 

(Amounts in thousands)

 

Three Months Ended

 

 

 

 

March 31,

 

 

 

 

2022

 

 

2021

 

 

Net income

 

$

61,311

 

 

$

43,306

 

 

Other comprehensive income

 

 

 

 

 

 

 

Foreign currency translation adjustments, net of taxes

 

 

(1,542

)

 

 

(2,135

)

 

Comprehensive income

 

$

59,769

 

 

$

41,171

 

 

 

See notes to condensed consolidated financial statements.

 

- 5 -


 

 

MEDPACE HOLDINGS, INC. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Other

 

 

 

 

 

 

Common

 

 

Treasury

 

 

Paid-In

 

 

Retained

 

 

Comprehensive

 

 

 

 

 

 

Stock

 

 

Stock

 

 

Capital

 

 

Earnings

 

 

Loss

 

 

Total

 

BALANCE — December 31, 2020

 

$

355

 

 

$

(5,578

)

 

$

695,904

 

 

$

115,229

 

 

$

(131

)

 

$

805,779

 

Net income

 

 

 

 

 

 

 

 

 

 

 

43,306

 

 

 

 

 

 

43,306

 

Foreign currency translation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,135

)

 

 

(2,135

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

2,871

 

 

 

 

 

 

 

 

 

2,871

 

Stock options exercised

 

 

4

 

 

 

 

 

 

9,102

 

 

 

 

 

 

 

 

 

9,106

 

BALANCE — March 31, 2021

 

$

359

 

 

$

(5,578

)

 

$

707,877

 

 

$

158,535

 

 

$

(2,266

)

 

$

858,927

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Accumulated

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Deficit)

 

 

Other

 

 

 

 

 

 

Common

 

 

Treasury

 

 

Paid-In

 

 

Retained

 

 

Comprehensive

 

 

 

 

 

 

Stock

 

 

Stock

 

 

Capital

 

 

Earnings

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See notes to condensed consolidated financial statements.

 

 

- 6 -


 

MEDPACE HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

 

(Amounts in thousands)

 

Three Months Ended

 

 

 

March 31,

 

 

 

2022

 

 

2021

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net income

 

$

61,311

 

 

$

43,306

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation

 

 

4,270

 

 

 

3,812

 

Amortization

 

 

838

 

 

 

1,278

 

Stock-based compensation expense

 

 

4,372

 

 

 

2,871

 

Noncash lease expense

 

 

4,537

 

 

 

3,903

 

Deferred income tax (benefit) provision

 

 

(713

)

 

 

1,289

 

Amortization and adjustment of deferred credit

 

 

(155

)

 

 

(167

)

Other

 

 

(265

)

 

 

124

 

Changes in assets and liabilities:

 

 

 

 

 

 

Accounts receivable and unbilled, net

 

 

(38,224

)

 

 

1,089

 

Prepaid expenses and other current assets

 

 

(5,547

)

 

 

(6,073

)

Accounts payable

 

 

(1,041

)

 

 

(2,638

)

Accrued expenses

 

 

(3,651

)

 

 

(10,043

)

Advanced billings

 

 

22,580

 

 

 

22,143

 

Lease liabilities

 

 

(3,542

)

 

 

(3,155

)

Other assets and liabilities, net

 

 

1,486

 

 

 

(420

)

Net cash provided by operating activities

 

 

46,256

 

 

 

57,319

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

Property and equipment expenditures

 

 

(9,257

)

 

 

(6,507

)

Other

 

 

(1,951

)

 

 

(3,144

)

Net cash used in investing activities

 

 

(11,208

)

 

 

(9,651

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

Proceeds from stock option exercises

 

 

13,867

 

 

 

9,102

 

Repurchases of common stock

 

 

(425,950

)

 

 

-

 

Proceeds from revolving loan

 

 

49,500

 

 

 

-

 

Payments on revolving loan

 

 

(49,500

)

 

 

-

 

Net cash (used in) provided by financing activities

 

 

(412,083

)

 

 

9,102

 

EFFECT OF EXCHANGE RATES ON CASH, CASH EQUIVALENTS, AND
RESTRICTED CASH

 

 

(1,426

)

 

 

(1,659

)

(DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH

 

 

(378,461

)

 

 

55,111

 

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — Beginning of period

 

 

461,304

 

 

 

277,766

 

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — End of period

 

$

82,843

 

 

$

332,877

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION —

 

 

 

 

 

 

Acquistion of property and equipment—non-cash

 

$

7,375

 

 

$

6,531

 

 

See notes to condensed consolidated financial statements.

 

- 7 -


 

MEDPACE HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

March 31, 2022

 

(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, 2021.

Share Repurchases

In the second quarter of 2021, the Board approved an increase of $150.0 million to the stock repurchase program bringing the total repurchase authorization up to $300.0 million. In the first quarter of 2022, the Board approved increases totaling $500.0 million to the Company's stock repurchase program. During the three months ended March 31, 2022, the Company repurchased 2,745,865 shares for $425.9 million. As of March 31, 2022, the Company has remaining authorization of $264.6 million under the 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. The repurchase program may be suspended or discontinued at any time without notice.

Recently Issued Accounting Standards

In November 2021, the FASB issued ASU 2021-10, "Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance" which requires entities to provide disclosures on material government assistance transactions for annual reporting periods. The disclosures include information around the nature of the assistance, the related accounting policies used to account for government assistance, the effect of government assistance on the entity's financial statements, and any significant terms and conditions of the agreements, including commitments and contingencies. The guidance is effective for annual periods beginning after December 15, 2021, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its condensed consolidated financial statements and related disclosures.

 

(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

- 8 -


 

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 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, 2022 and 2021 (in thousands, except for earnings per share):

 

 

Three Months Ended

 

 

 

 

March 31,

 

 

 

 

2022

 

 

2021

 

 

Weighted-average shares:

 

 

 

 

 

 

 

Common shares outstanding

 

 

34,918

 

 

 

35,753

 

 

RSAs

 

 

21

 

 

 

116

 

 

Total weighted-average shares

 

 

34,939

 

 

 

35,869

 

 

Earnings per common share—Basic

 

 

 

 

 

 

 

Net income

 

$

61,311

 

 

$

43,306

 

 

Less: Undistributed earnings allocated to RSAs

 

 

(36

)

 

 

(140

)

 

Net income available to common shareholders—Basic

 

$

61,275

 

 

$

43,166

 

 

 

 

 

 

 

 

 

 

Net income per common share—Basic

 

$

1.75

 

 

$

1.21

 

 

 

 

 

 

 

 

 

 

Basic weighted-average common shares outstanding

 

 

34,918

 

 

 

35,753

 

 

Effect of diluted shares

 

 

1,446

 

 

 

1,996

 

 

Diluted weighted-average shares outstanding

 

 

36,364

 

 

 

37,749

 

 

 

 

 

 

 

 

 

 

Net income per common share—Diluted

 

$

1.69

 

 

$

1.14

 

 

 

During the three months ended March 31, 2022, the Company had (in thousands) 264 stock options 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 any recurring fair value measurements as of March 31, 2022. There were no transfers between Level 1, Level 2 or Level 3 during the three months ended March 31, 2022 or March 31, 2021.

 

- 9 -


 

(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,

 

 

December 31,

 

 

2022

 

 

2021

 

Accounts receivable

$

185,309

 

 

$

150,496

 

Unbilled receivables

 

39,620

 

 

 

36,107

 

Less: allowance for doubtful accounts

 

(170

)

 

 

(171

)

Total accounts receivable and unbilled, net

$

224,759

 

 

$

186,432

 

 

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,

 

 

December 31,

 

 

2022

 

 

2021

 

Advanced billings

$