Direct Answer
10 SEC filers are classified under the Standard Industrial Classification code that describes the contract research organizations industry, and their latest annual reports show $28.2 billion of combined revenue and a median operating margin of -78.3%. Investors should still evaluate its revenue model, industry-specific KPIs, valuation framework and the risks that can change the group's economics.
Industry Overview
Contract research organizations run clinical trials and lab studies for drug and device developers, billing per project and earning from backlog. Revenue follows pharmaceutical and biotech development spending and funding conditions. The first numbers to compare across companies here are backlog and book-to-bill, cancellation rate and revenue by service line.
Key Industry Metrics
- Backlog and book-to-bill: Backlog is signed work not yet performed; book-to-bill compares new awards with revenue. A ratio above one signals growth ahead, while below one suggests the order book is shrinking.
- Cancellation rate: Share of booked work that clients cancel. Higher cancellations reduce backlog quality and often follow biotech funding stress or failed trials.
- Revenue by service line: Sales split among services such as clinical trials, lab work and consulting. Each has its own growth and margin profile, so the mix shows where demand is.
- Operating margin: Share of revenue left after staff and overhead cost. Because labor is the main cost, utilization and pricing drive it.
- Biotech versus large pharma mix: Split of revenue between small biotech clients and big drug companies. Biotech clients depend on funding and cancel more, while large pharma tends to commit to multi-year programs.
Primary Macro Drivers
- Research and development spending: Sponsors outsource studies out of research budgets, so more spending by drugmakers lifts bookings and backlog.
- Biotech funding: Small drugmakers rely on outside firms for all trial work, so their funding conditions set new awards and the biotech share of the backlog.
- Outsourcing trends: As more large drugmakers hand trial work to outside firms, bookings and backlog grow without an increase in sponsors' own budgets.
- Trial complexity: More complex studies need more sites, data and staff, which can raise revenue per study but also stretch delivery and margin.
Major Risks
- Funding downturns for biotech clients: When funding for small drugmakers dries up, new awards slow and some studies stop; watch book-to-bill and the share of backlog from small sponsors.
- Project cancellations: A canceled study removes revenue that was in backlog, and costs may already have been incurred; watch cancellation rate and backlog conversion.
- Pricing pressure: Sponsors with several vendors can bargain on price, which narrows margin on new awards; watch operating margin and pricing commentary.
- Talent costs: Scientists, data managers and site monitors are costly to hire and keep, so wage rises raise cost per study; watch operating margin and attrition.
Industry Characteristics
| Characteristic | Profile |
|---|---|
| Cyclicality | Mixed |
| Capital Intensity | Low |
| Regulatory Intensity | Medium |
| Industry Maturity | Growth |
| Geographic Importance | Global |
Contract Research Organizations Filers in the SEC Record
10 companies with annual reports in the dataset are classified by the SEC in the Standard Industrial Classification code 8731. Their latest fiscal years end in 2025, and together they reported $28.2 billion of revenue. Median revenue growth over the prior year was -9.2%. Median operating margin was -78.3% and median net margin -69.4%. Median total liabilities were 44% of total assets, and 4 of 10 reported a profit in their latest year.
| Company | Revenue | Growth | Operating margin | Net margin | Year |
|---|---|---|---|---|---|
| Iqvia Holdings Inc. | $16.3 billion | 5.9% | 13.4% | 8.3% | FY 2025 |
| Incyte Corp | $5.1 billion | 21.2% | 29.5% | 25.0% | FY 2025 |
| Charles River Laboratories International, Inc. | $4.0 billion | -0.9% | 0.6% | -3.6% | FY 2025 |
| Medpace Holdings, Inc. | $2.5 billion | 20.0% | 21.1% | 17.8% | FY 2025 |
| Nrc Health | $137 million | -4.0% | 16.4% | 8.4% | FY 2025 |
| Maxcyte, Inc. | $33 million | -14.5% | -157.1% | -135.1% | FY 2025 |
| Omniab, Inc. | $19 million | -29.3% | -369.5% | -347.0% | FY 2025 |
| Bioaffinity Technologies, Inc. | $6 million | -34.2% | -171.6% | -242.0% | FY 2025 |
The 8 largest of 10 by revenue. Source: each company's own annual report as filed with the SEC (XBRL data), figures in U.S. dollars. A company's SIC code reflects its main business as the SEC records it, so it can differ from how an index provider or analyst classifies the company, and a diversified group appears under only one code.
Where to Go Next
The Contract Research Organizations guide describes how the industry earns money, what to measure and what can go wrong. To see how it compares, read the neighbouring industries in the same sector, then apply the same checks to a specific company.
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Frequently Asked Questions
What are the main KPIs for the Contract Research Organizations industry?
Key performance indicators for the Contract Research Organizations industry include: Backlog and book-to-bill, Cancellation rate, Revenue by service line, Operating margin, Biotech versus large pharma mix. Which matter most depends on the company's model, so compare them across several companies rather than relying on one.
How cyclical is the Contract Research Organizations industry?
The Contract Research Organizations industry exhibits mixed cyclicality characteristics. Some segments move with the broader economy while others maintain more stable demand, making stock selection within the group particularly important.
What are the biggest risks in the Contract Research Organizations industry?
The primary risks for Contract Research Organizations companies include: Funding downturns for biotech clients, Project cancellations, Pricing pressure, Talent costs. Investors should assess each company's exposure to these factors and its track record of navigating them.