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
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.
(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 | |
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
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 | |
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.
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 | | | $ | 4,372 | | |
(10) Income Taxes
The Company’s effective income tax rate was 15.3% and 6.1% for the three months ended March 31, 2023 and 2022, respectively. The Company's effective income tax rate for the three months ended March 31, 2023 varied from the U.S. statutory rate of 21% due to the impact of the state taxes, which was favorably offset by excess tax benefits recognized from share-based compensation and tax benefits related to Foreign Derived Intangible Income (FDII).
(11) Commitments and Contingencies
Legal Proceedings
The Company is involved in legal proceedings from time to time in the ordinary course of its business, including employment claims and claims related to other business transactions. The Company cannot predict with certainty the outcome of such proceedings, but it believes that adequate reserves have been recorded and losses already recognized with respect to such proceedings, which were immaterial as of March 31, 2023 and December 31, 2022. There is a reasonable
possibility that a loss exceeding amounts already recognized may be incurred related to these actions; however, the Company believes that such potential losses were immaterial as of March 31, 2023.
Purchase Commitments
The Company has several minimum purchase commitments for project related supplies totaling $17.1 million as of March 31, 2023. In return for the commitment, Medpace receives preferential pricing. The commitments expire at various times through 2029.
(12) Related Party Transactions
Employee Loans
The Company periodically extends short term loans or advances to employees, typically upon commencement of employment. Total receivables as a result of these employee advances of $0.3 million existed at March 31, 2023 and December 31, 2022, respectively, and are included in the Prepaid expenses and other current assets and Other assets line items of the condensed consolidated balance sheets, respectively, depending on the contractual repayment date.
Service Agreement
LIB Therapeutics LLC and subsidiaries (“LIB”)
Certain executives and employees of the Company, including the chief executive officer, are members of LIB’s board of managers. The Company entered into a MSA dated November 24, 2015 with LIB, a company that engages in research, development, marketing and commercialization of pharmaceutical drugs. Subsequently, the Company and LIB have entered into several task orders for the Company to perform clinical trial related services. The Company recognized total revenue from LIB of $13.3 million and $7.4 million during the three months ended March 31, 2023 and 2022, respectively, in the Company’s condensed consolidated statements of operations. As of March 31, 2023 and December 31, 2022, respectively, the Company had Advanced billings from LIB of $10.1 million and $7.4 million in the condensed consolidated balance sheets. In addition, as of March 31, 2023 and December 31, 2022, respectively, the Company had Accounts receivable and unbilled, net from LIB of $6.3 million and $5.5 million in the condensed consolidated balance sheets. The Company had Other current liabilities with LIB of $12.5 million in the consolidated balance sheets at March 31, 2023 and December 31, 2022.
CinRX Pharma, subsidiaries and affiliates (“CinRx”)
Certain executives and employees of the Company, including the chief executive officer, are members of CinRx’s board of managers and/or have equity investments in CinRx, a biotech company. The Company and CinRx have entered into several task orders for the Company to perform clinical trial related services. The Company recognized total revenue from CinRx of $2.5 million and $5.8 million during the three months ended March 31, 2023 and 2022, respectively, in the Company’s condensed consolidated statements of operations. As of March 31, 2023 and December 31, 2022, respectively, the Company had Advanced billings from CinRx of $1.4 million in the condensed consolidated balance sheets. As of March 31, 2023 and December 31, 2022 the Company had Accounts receivable and unbilled, net from CinRx of $1.4 million and $2.2 million, respectively, in the condensed consolidated balance sheets. Certain affiliates of CinRx included in previous reported quarters are no longer disclosed due to changes in the affiliate relationship.
Leased Real Estate
Campus Headquarters Leases
The Company entered into an operating lease for the occupancy of office space in a building in Cincinnati, Ohio with an entity that is wholly owned by the chief executive officer of the Company. The Company has evaluated its relationship with the related party and concluded that the related party is not a variable interest entity because the Company has no direct ownership interest or relationship other than the lease. The lease was renewed in the first quarter of fiscal year 2023 for a term of ten years through December 2032 with a renewal option for one 10-year term at prevailing market rates. The Company pays rent, taxes, insurance, and maintenance expenses that arise from the use of the property. Annual base rent for its corporate headquarters allows for adjustments to the rental rate annually for increases in the consumer price index. Operating lease cost recognized for the three months ended March 31, 2023 and 2022 was $0.6 million, respectively. The operating lease cost was allocated between Total direct costs and Selling, general and administrative in the condensed consolidated statements of operations. The Operating lease right-of-use assets at March 31, 2023 and December 31, 2022 were $20.6 million and $18.2 million, respectively, in the condensed consolidated balance sheets. The current and long-term portions of the lease liabilities at March 31, 2023 were $1.4 million and $19.3 million, respectively, and were
recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets. The current and long-term portions of the lease liabilities at December 31, 2022 were $1.5 million and $16.7 million, respectively, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.
In 2018, Medpace, Inc. entered into a multi-year lease agreement governing future occupancy of additional office space in Cincinnati, Ohio with an entity that is wholly owned by the Company’s chief executive officer and certain members of his immediate family. The Company began to occupy the premises in the second quarter of fiscal year 2020. The lease expires in 2040 and the Company has two 10-year options to extend the term of the lease. The Company pays rent, taxes, insurance, and maintenance expenses that arise from the use of the property. Annual base rent for the corporate headquarters allows for adjustments to the rental rate annually for increases in the consumer price index. The Company has determined that the lease is an operating lease. Operating lease cost recognized for the three months ended March 31, 2023 and 2022 was $1.4 million, respectively. The operating lease cost was allocated between Total direct costs and Selling, general and administrative in the condensed consolidated statements of operations. The Operating lease right-of-use assets at March 31, 2023 and December 31, 2022 were $53.1 million and $53.5 million, respectively, in the condensed consolidated balance sheets. The current and long-term portions of the lease liabilities at March 31, 2023 were $1.1 million and $64.5 million, respectively, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets. The current and long-term portions of the lease liabilities at December 31, 2022 were $1.1 million and $64.8 million, respectively and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.
The Company entered into two multi-year lease agreements governing the occupancy of space of two buildings in Cincinnati, Ohio with an entity that is wholly owned by the Company’s chief executive officer and certain members of his immediate family. The Company assumed occupancy in 2012 and the leases expire in 2027 with the Company having one 10-year option to extend the lease term. The Company pays rent, taxes, insurance, and maintenance expenses that arise from the use of the property. Annual base rent for the corporate headquarters allows for adjustments to the rental rate annually for increases in the consumer price index. The Company has determined that the leases are operating leases. Operating lease cost recognized for the three months ended March 31, 2023 and 2022 was $0.9 million. The operating lease cost was allocated between Total direct costs and Selling, general and administrative in the condensed consolidated statements of operations. The Operating lease right-of-use assets at March 31, 2023 and December 31, 2022 were $13.9 million and $14.6 million, respectively, in the condensed consolidated balance sheets. The current and long-term portions of the lease liabilities at March 31, 2023 were $2.8 million and $11.1 million, respectively, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets. The current and long-term portions of the lease liabilities at December 31, 2022 were $2.8 million and $11.9 million, respectively, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.
Travel Services
The Company incurs expenses for travel services for company executives provided by private aviation charter companies which is a company controlled by the chief executive officer of the Company (each a “private aviation charter”). The Company may contract directly with the private aviation charter for the use of its aircraft or indirectly through a third party aircraft management and jet charter company (the “Aircraft Management Company”). The travel services provided are primarily for business purposes, with certain personal travel paid for as part of the executives’ compensation arrangements. The Aircraft Management Company also makes the private aviation charter aircraft available to third parties. The Company incurred travel expenses of $0.4 million during the three months ended March 31, 2023 and 2022, respectively. These travel expenses are recorded in Selling, general and administrative in the Company’s condensed consolidated statements of operations. As of March 31, 2023 and December 31, 2022, the Company had Accounts payable to the Aircraft Management Company of $0.3 million, respectively, in the condensed consolidated balance sheets.
(13) Entity Wide Disclosures
Revenue by Category
The following table disaggregates our revenue by major source (in thousands):
| | | | | | | | | | | | | | | | | |
| | Three Months Ended
March 31, | |
| | 2023 | | 2022 | |
| Therapeutic Area | | | | | |
| Oncology | | $ | 141,951 | | | $ | 105,213 | | |
| Other | | 87,104 | | | 70,417 | | |
| Metabolic | | 86,840 | | | 48,116 | | |
| Cardiology | | 46,617 | | | 37,396 | | |
| Central Nervous System | | 38,697 | | | 38,487 | | |
| AVAI | | 32,865 | | | 31,318 | | |
| Total revenue | | $ | 434,074 | | | $ | 330,947 | | |