- Record revenue of $126.8 million,
representing 22% year-over-year growth
- GAAP net income of $9.5 million, or
$0.16 per diluted share, up 108% year-over-year
- Cash flow from operations of $22.5
million, representing 63% year-over-year growth
Medidata (NASDAQ:MDSO), the leading global provider of
cloud-based technology and data analytics for clinical research,
today announced its financial results for the first quarter of
2017.
“We had a record start to the year financially and
operationally, as adoption of Medidata’s platform and services
continue to accelerate,” said Tarek Sherif, Medidata’s chairman and
chief executive officer. “Business results and ROI matter when
developing drugs, and that’s driving our consistently strong sales.
The Medidata Clinical Cloud® is the industry's most intelligent,
integrated cloud-based platform, powered by unmatched data
analytics capabilities—helping drive accelerated trials, lower
costs and better connectivity to our most important audience, the
patient.”
First Quarter 2017 Results
- Total revenue for the first quarter of
2017 was $126.8 million, an increase of $22.6 million, or 22%,
compared with $104.2 million in the first quarter of 2016.
Subscription revenue was $107.1 million, an increase of $17.1
million, or 19%, compared with the same period last year.
- Professional services revenue for the
first quarter of 2017 was $19.8 million, an increase of $5.5
million, or 38%, compared with $14.3 million in the first quarter
of 2016.
- GAAP operating income for the quarter
was $12.2 million, up 83%, compared with $6.6 million in the first
quarter of 2016. Non-GAAP operating income1 for the first quarter
of 2017 increased to $27.0 million, up 34%, compared with $20.1
million a year ago.
- GAAP net income for the first quarter
of 2017 was $9.5 million, or $0.16 per diluted share, up 108%,
compared with $4.6 million, or $0.08 per diluted share, in the
first quarter of 2016. Adjusted non-GAAP net income1 for the first
quarter of 2017 was $18.2 million, or $0.31 per diluted share, up
42%, compared with $12.8 million, or $0.23 per diluted share, in
the first quarter of 2016. See the non-GAAP reconciliation included
in this release for full details of the non-GAAP adjustments.
- Cash flow from operations was $22.5
million in the first quarter of 2017, an increase of $8.7 million,
or 63%, compared with $13.8 million a year ago.
- Total cash, cash equivalents and
marketable securities were $513.4 million at the end of the first
quarter, compared with $515.2 million on December 31, 2016.
Additional Highlights
- Remaining adjusted subscription
backlog2 as of March 31, 2017 was $319 million, an increase of $56
million, or 21%, compared with $263 million a year ago.
- Medidata’s strategic monitoring and
data analytics applications, powered by machine learning
algorithms, are driving increased adoption of the Medidata Clinical
Cloud®. UCB selected the Medidata Clinical Cloud® as its enterprise
technology platform. The global biopharmaceutical company will
utilize Medidata’s data management and targeted monitoring
capabilities with the goal of improving clinical data quality and
speeding innovation. Also during the first quarter, an existing
Medidata customer, a top 25 global pharmaceutical company, expanded
its adoption of the Medidata Clinical Cloud®; renewing its use of
Medidata Rave® and Medidata Coder® and adding Medidata’s strategic
monitoring solutions, Medidata CSA (Centralized Statistical
Analytics) and Medidata TSDV (Targeted Source Document
Verification), to enhance data quality across its global drug
development programs.
- Shortly after the close of Q1, Medidata
acquired Mytrus, Incorporated, an eClinical technology company
specializing in patient-centered electronic informed consent
(eConsent). Medidata will integrate Enroll™ into the Medidata
Clinical Cloud® as part of its ongoing commitment to modernize
clinical trials for patients, sites and sponsors. The clinical
research and bio banking industries are rapidly adopting eConsent
as a preferred alternative to paper. The addition of Enroll to
Medidata’s industry-leading cloud platform provides direct access
to the patient and represents a catalyst for increased adoption of
the Company’s growing mobile health portfolio by enabling Medidata
to comprehensively address conversion to this new technology.
- Medidata’s unique technology
collaboration with TESARO, Inc. was recognized as the 2017
“Clinical Partnership of the Year” at the second annual Clinical
and Research Excellence (CARE) Awards. TESARO worked with Medidata
to provide feedback on new features to Medidata Balance®, a
powerful randomization and trial supply management (RTSM) tool that
is an integral part of the Medidata Clinical Cloud®. The newest
functionality enables users to pool clinical supply inventory
across multiple trials at the same research site—decreasing costs,
shortening timelines and leading to better treatments for patients
sooner.
- Medidata’s revenue retention rate was
nearly 100%.
“First quarter performance was strong, highlighted by 22% total
revenue growth, over $22 million of operating cash flow, 200 bps of
EBITDAO margin expansion, and 32% billings growth,” said Rouven
Bergmann, Medidata’s chief financial officer. “As evident in our
financial results, customers are adopting our platform at an
accelerated rate to transform clinical development with data
analytics as the new catalyst driving buying decisions.”
Financial Outlook
For the full-year 2017, the Company’s guidance provided on
February 9, 2017 remains unchanged:
- Total revenue between $538 and $562
million, representing up to 21% year-over-year growth at constant
currency.
- Professional services revenues of
approximately $75 million.
- GAAP operating income between $61 and
$69 million. Non-GAAP operating income, which excludes the impact
of depreciation, amortization of intangible assets, and stock-based
compensation expense, between $131 and $139 million.
- GAAP net income between $31 and $36
million. Adjusted non-GAAP net income, which excludes the impact of
stock-based compensation, non-cash interest expense associated with
convertible senior notes, and amortization, tax-effected at a 40%
rate, between $69 and $74 million.
- While changes in the stock price could
change the fully diluted share count, the Company is assuming 58.2
million fully diluted shares.
The operating and net income measures above reflect the
Company’s non-GAAP financial guidance and the corresponding GAAP
equivalents to its guidance.
Conference Call
The Company plans to host its investor conference call today at
8:00 a.m. Eastern time. The investor conference call will be
available via live webcast on the “Investor” section of Medidata’s
website at http://investor.mdsol.com. To participate by telephone,
domestic participants may dial 877-303-2528 and international
participants may dial 847-829-0023. Those interested in
participating in the conference call should dial in at least 10
minutes prior to the call to register. Participants can also join
the call via a simultaneous live audio webcast, which will be made
available on the “Investor” section of Medidata’s website at
http://investor.mdsol.com. A replay of the conference call can be
accessed until Wednesday, May 10, 2017 by dialing 800-585-8367
domestically or 404-537-3406 internationally, with the passcode
1623403. An archive of the call will also be hosted on the
“Investor” section of Medidata’s website,
http://investor.mdsol.com, for a limited period of time.
About Medidata
Medidata is reinventing global drug and medical device
development by creating the industry's leading cloud-based
solutions for clinical research. Through our advanced applications
and intelligent data analytics, Medidata helps advance the
scientific goals of life sciences customers worldwide, including
over 850 global pharmaceutical companies, biotech, diagnostic and
device firms, leading academic medical centers, and contract
research organizations.
The Medidata Clinical Cloud® brings a new level of quality and
efficiency to clinical trials that empower our customers to make
more informed decisions earlier and faster. Our unparalleled
clinical trial data assets provide deep insights that pave the way
for future growth. The Medidata Clinical Cloud is the primary
technology solution powering clinical trials for 17 of the world's
top 25 global pharmaceutical companies and is used by 16 of the top
20 medical device developers—from study design and planning through
execution, management and reporting.
Cautionary Statement
Certain statements made in this press release are
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995 that involve significant
risks and uncertainties about Medidata Solutions, Inc.
(“Medidata”), including but not limited to statements about
Medidata’s forecast of financial performance, products and
services, business model, strategy and growth opportunities, and
competitive position. Such statements are subject to risks and
uncertainties that could cause actual performance or results to
differ materially from those expressed in these statements. In
particular, the risks and uncertainties include, among other
things, risks associated with possible fluctuations in our
financial and operating results; errors, interruptions or delays in
our service or our web hosting; integration activities, performance
and financial impact of acquired companies; our ability to continue
to release, and gain customer acceptance of, new and improved
versions of our products; changes in our sales and implementation
cycles; competition; our ability to retain and expand our customer
base or increase new business from those customers; our ability to
hire, retain and motivate our employees and manage our growth;
regulatory developments; litigation; and general developments in
the economy. For additional disclosure regarding these and other
risks faced by the Company, see disclosures contained in Medidata’s
public filings with the Securities and Exchange Commission,
including the “Risk Factors” section of Medidata’s Annual Report on
Form 10-K for the year ended December 31, 2016. You should consider
these factors in evaluating the forward-looking statements included
in this press release and not place undue reliance on such
statements. The forward-looking statements are made as of the date
hereof, and Medidata undertakes no obligation to update such
statements as a result of new information.
(1) Non-GAAP Financial InformationMedidata provides non-GAAP
operating income, net income and net income per share applicable to
common stockholders data as additional information for its
operating results. These measures are not in accordance with, or an
alternative for, generally accepted accounting principles and may
be different from non-GAAP measures used by other companies.
Non-GAAP operating income excludes the impact of depreciation,
amortization of intangible assets associated with acquisitions, and
stock-based compensation expense. Adjusted non-GAAP net income
excludes the tax-effected impact of amortization of intangible
assets associated with acquisitions, stock-based compensation
expense, and non-cash interest expense on convertible senior notes.
Management uses these non-GAAP measures to evaluate its financial
results, develop budgets, manage expenditures, and as an important
factor in determining variable compensation. In addition, investors
frequently have requested information from management regarding
depreciation, amortization and other non-cash charges, such as
share-based compensation, and management believes, based on
discussions with investors, that these non-GAAP measures enhance
investors’ ability to assess Medidata’s historical and projected
future financial performance. While management believes these
non-GAAP financial measures provide useful supplemental information
to investors, there are limitations associated with the use of
non-GAAP financial measures. One limitation of non-GAAP operating
income is that it excludes depreciation and amortization, which
represents the periodic costs of certain capitalized tangible and
intangible assets used in generating revenues in our business.
Medidata compensates for these limitations by using these non-GAAP
financial measures as supplements to GAAP financial measures and by
reviewing the reconciliations of the non-GAAP financial measures to
their most comparable GAAP financial measures. Investors are
encouraged to review the reconciliations of these non-GAAP
financial measures to the comparable GAAP results, which are
attached to this press release.
(2) Adjusted subscription backlog equals subscription backlog
plus outstanding intra-year renewals valued at an amount equal to
the contracts to be renewed.
MEDIDATA SOLUTIONS, INC.CONSOLIDATED STATEMENTS OF
OPERATIONS (Unaudited)(Amounts in thousands, except per
share data) Three Months Ended
March 31, 2017 2016 Revenues
Subscription $ 107,070 $ 89,968 Professional services 19,751
14,270 Total revenues 126,821 104,238 Cost of revenues
(1)(2) Subscription 17,129 14,329 Professional services 13,485
10,339 Total cost of revenues 30,614 24,668 Gross
profit 96,207 79,570 Operating costs and expenses Research and
development (1) 29,937 28,228 Sales and marketing (1)(2) 30,109
25,458 General and administrative (1) 23,988 19,246
Total operating costs and expenses 84,034 72,932
Operating income 12,173 6,638 Interest and other income (expense)
Interest expense (4,327 ) (4,127 ) Interest income 1,171 872 Other
expense, net — (4 ) Total interest and other expense, net
(3,156 ) (3,259 ) Income before income taxes 9,017 3,379 Provision
for income taxes (501 ) (1,196 ) (3) Net income $ 9,518 $
4,575 (3) Earnings per share Basic $ 0.17 $ 0.08
(3) Diluted $ 0.16 $ 0.08 (3) Weighted average
common shares outstanding Basic 56,072 55,119 Diluted 58,083 56,589
(1) Stock-based compensation expense included in cost of
revenues and operating costs and expenses is as follows: Cost of
revenues $ 1,169 $ 1,210 Research and development 2,835 2,194 Sales
and marketing 1,175 1,877 General and administrative 5,142
4,969 Total stock-based compensation $ 10,321 $
10,250 (2) Amortization of intangible assets included
in costs of revenues and operating costs and expenses is as
follows: Cost of revenues $ 454 $ 79 Sales and marketing 83
24 Total amortization of intangible assets $ 537 $
103 (3) Figures for the three months ended March 31,
2016 have been recast to reflect our early adoption of Accounting
Standards Update (ASU) No. 2016-09, Improvements to Share-Based
Payment Accounting, consistent with the quarterly information
presented in our Annual Report on Form 10-K for the year ended
December 31, 2016.
MEDIDATA SOLUTIONS,
INC.Reconciliation of GAAP Operating Income and GAAP Net
Income to
Non-GAAP Operating Income and Adjusted
Non-GAAP Net Income (Unaudited)(Amounts in thousands, except
per share data)
Three Months Ended March 31,
2017 2016 Operating income: GAAP
operating income $ 12,173 $ 6,638 GAAP operating margins 9.6 % 6.4
% Stock-based compensation 10,321 10,250 Depreciation and
amortization 4,476 3,217 Non-GAAP operating income $
26,970 $ 20,105 Non-GAAP operating margins 21.3 %
19.3 % Net income: GAAP net income $ 9,518 $ 4,575 (3) Stock-based
compensation 10,321 10,250 Amortization 537 103 Non-cash interest
expense on convertible senior notes (1) 3,598 3,408 Tax impact on
add-back items (2) (5,782 ) (5,504 ) Adjusted non-GAAP net income $
18,192 $ 12,832 (3) GAAP basic earnings per share $
0.17 $ 0.08 (3) GAAP diluted earnings per share $
0.16 $ 0.08 (3) Adjusted Non-GAAP basic earnings per
share $ 0.32 $ 0.23 (3) Adjusted Non-GAAP diluted
earnings per share $ 0.31 $ 0.23 (3) (1)
Amount represents non-cash interest expense, including amortization
of debt discount and issuance costs, on our 1.00% convertible
senior notes issued during the third quarter of 2013. We exclude
this incremental non-cash interest expense for purposes of
calculating adjusted non-GAAP net income. We believe that excluding
these expenses from our non-GAAP measures is useful to investors
because such incremental non-cash interest expense does not
generate a cash outflow for the Company and the debt issuance costs
do not represent a cash outflow for the Company except in the
period the notes were issued; therefore both are not indicative of
our continuing operations. (2) Tax impact calculated using a
40% tax rate. (3) Figures for the three months ended March
31, 2016 have been recast to reflect our early adoption of ASU No.
2016-09, Improvements to Share-Based Payment Accounting, consistent
with the quarterly information presented in our Annual Report on
Form 10-K for the year ended December 31, 2016. The table
above presents a reconciliation of GAAP to non-GAAP operating
income, net income, and net income per share applicable to common
stockholders for the three months ended March 31, 2017 and 2016.
Non-GAAP operating income excludes the impact of depreciation,
amortization of intangible assets associated with acquisitions, and
stock-based compensation expense. Adjusted non-GAAP net income
excludes the tax-affected impact of amortization of intangible
assets associated with acquisitions, stock-based compensation
expense, and non-cash interest expense on convertible senior notes.
MEDIDATA SOLUTIONS, INC.CONSOLIDATED
BALANCE SHEETS (Unaudited)(Amounts in thousands, except per
share data)
March 31, 2017
December 31,2016
ASSETS Current assets: Cash and cash equivalents $
90,422 $ 93,519 Marketable securities 274,602 281,285 Accounts
receivable, net of allowance for doubtful accounts of $1,650 and
$1,041, respectively 102,491 115,216 Prepaid commission expense
2,550 1,842 Prepaid expenses and other current assets 24,472 20,382
Deferred income taxes — 6,536 Total current assets
494,537 518,780 Restricted cash 5,511 5,760 Furniture, fixtures and
equipment, net 63,284 58,461 Marketable securities, long-term
148,359 140,418 Goodwill 39,075 30,780 Intangible assets, net
13,036 5,090 Deferred income taxes, long-term 43,276 40,415 Other
assets 20,350 18,181 Total assets $ 827,428
$ 817,885
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities: Accounts payable $ 6,699 $ 6,202 Accrued
payroll and other compensation 16,034 29,260 Accrued expenses and
other 23,829 20,958 Deferred revenue 80,122 75,911
Total current liabilities 126,684 132,331 Noncurrent
liabilities: 1.00% convertible senior notes, net 266,999 263,401
Deferred revenue, less current portion 1,607 1,703 Deferred tax
liabilities 124 322 Other long-term liabilities 20,642
18,138 Total noncurrent liabilities 289,372 283,564
Total liabilities 416,056 415,895 Commitments
and contingencies Stockholders' equity: Preferred stock, par value
$0.01 per share; 5,000 shares authorized, none issued and
outstanding — — Common stock, par value $0.01 per share; 200,000
shares authorized; 62,246 and 61,393 shares issued; 58,254 and
57,733 shares outstanding, respectively 622 614 Additional paid-in
capital 431,479 418,497 Treasury stock, 3,992 and 3,660 shares,
respectively (127,822 ) (114,204 ) Accumulated other comprehensive
loss (4,784 ) (5,276 ) Retained earnings 111,877 102,359
Total stockholders' equity 411,372 401,990
Total liabilities and stockholders' equity $ 827,428
$ 817,885
MEDIDATA SOLUTIONS,
INC.CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)(Amounts in thousands)
Three Months Ended March 31, 2017
2016 Cash flows from operating activities Net income
$ 9,518 $ 4,575 (1) Adjustments to reconcile net income to net cash
provided by operating activities: Depreciation and amortization
4,476 3,217 Stock-based compensation 10,321 10,250 Amortization of
discounts or premiums on marketable securities 413 983 Deferred
income taxes 1,355 1,187 (1) Amortization of debt issuance costs
319 319 Amortization of debt discount 3,279 3,089 Provision for
doubtful accounts 680 371 (Gain) loss on fixed asset disposal (2 )
4 Changes in operating assets and liabilities: Accounts receivable
12,045 4,635 Prepaid commission expense (1,843 ) (2,738 ) Prepaid
expenses and other current assets (6,791 ) 1,199 Other assets 1,712
(2,590 ) Accounts payable 130 (1,297 ) Accrued payroll and other
compensation (15,557 ) (10,052 ) Accrued expenses and other (2,397
) 238 Deferred revenue 4,090 3,134 Other long-term liabilities 737
(2,720 ) Net cash provided by operating activities 22,485
13,804 (1) Cash flows from investing activities
Purchase of furniture, fixtures and equipment (6,790 ) (7,589 )
Purchase of available-for-sale securities (81,985 ) (28,815 )
Proceeds from sale of available-for-sale securities 80,426 69,352
Acquisition of business, net of cash acquired (8,702 ) — Net
cash (used in) provided by investing activities (17,051 ) 32,948
Cash flows from financing activities Proceeds from exercise
of stock options 2,597 194 Proceeds from employee stock purchase
plan 2,090 1,819 Acquisition of treasury stock (13,617 ) (10,831 )
Net cash used in financing activities (8,930 ) (8,818 ) (1) Effect
of exchange rate changes on cash, cash equivalents and restricted
cash 150 173 Net (decrease) increase in cash, cash
equivalents and restricted cash (3,346 ) 38,107 Cash, cash
equivalents and restricted cash – Beginning of period 99,279
55,472 Cash, cash equivalents and restricted cash – End of
period $ 95,933 $ 93,579
(1) The consolidated statement of cash flows for the three months
ended March 31, 2016 has been adjusted to reflect the Company's
early adoption of ASU No. 2016-09 during the third quarter of 2016,
resulting in an offsetting increase of $1,341 thousand to net cash
provided by operating activities and net cash used in financing
activities.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170426005466/en/
Investors:Medidata SolutionsAnthony D’Amico,
732-767-4331adamico@mdsol.comorMedia:Medidata SolutionsDick Wolfe,
646-483-2988dwolfe@mdsol.com
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