Medidata Solutions Reports Record Second Quarter 2013 Results
- Record revenues of $68.1 million, a 27% year-over-year increase
- Record application services revenue of $56.3 million, a 36% year-over-year increase
- Raises 2013 revenue guidance to between $273 and $276 million
NEW YORK, N.Y. – July 25, 2013 – Medidata Solutions (NASDAQ: MDSO), the leading global provider of cloud-based solutions for clinical research in life sciences, today announced its financial results for the second quarter 2013 and provided detailed financial guidance.
"Our great execution and the growing market opportunity for the Medidata Clinical Cloud are evident in our record second quarter financial results, growing product penetration and positive outlook for the remainder of the year," said Tarek Sherif, Medidata's chairman and chief executive officer. "The strength of our vertical SaaS model comes from the combination of our modern cloud technology and deep domain expertise. Coupled with the industry's richest repository of clinical trial data, Medidata's platform is transforming clinical research."
Second Quarter 2013 Results
- Total revenues for the second quarter of 2013 were $68.1 million, an increase of $14.6 million, or 27%, compared with $53.5 million in 2012. Application services revenue was $56.3 million, an increase of 36% compared with the same period last year.
- GAAP operating income for the quarter increased to $8.8 million, up 55%, compared with $5.7 million a year ago. Non-GAAP operating income* for the second quarter of 2013 increased to $17.5 million, up 60%, compared with $11.0 million a year ago.
- GAAP net income for the second quarter of 2013 was $5.1 million, or $0.19 per diluted share, up 42%, compared with $3.6 million, or $0.14 per diluted share, in the second quarter of 2012. Adjusted non-GAAP net income* for the second quarter of 2013 was $9.5 million, or $0.36 per diluted share, up 63%, compared with $5.8 million, or $0.23 per diluted share, in the second quarter of 2012.
- Application services backlog for the remainder of the year as of June 30, 2013, increased to $110 million, up 38% over the comparable period a year ago. Non-Rave products account for 23% of remaining backlog.
- Total cash, cash equivalents and marketable securities were $140.4 million at the end of the second quarter, an increase of $26.5 million, or 23%, as compared with $113.9 million at the end of the second quarter 2012.
- Cash flow from operations was a record $26.2 million in the second quarter, up 361% year-over-year.
- Medidata's customer base grew to 363 in the second quarter of 2013, up 15% from the second quarter of 2012.
- 45% of customers have committed to multiple products at the end of the second quarter of 2013 as compared with 41% at the end of the first quarter of 2013.
- Non-Rave revenues increased 144% year-over-year, driven by significant growth in Medidata's patient randomization and trial supply, and medical coding applications.
- Medidata's revenue retention rate for the quarter was 99.4%.
- Medidata announced the availability of the Medidata Clinical Cloud Study, an easy-to-acquire, ready-in-weeks offering for mid-sized and small customers, single programs and large customer pilots.
"Our revised revenue and profitability guidance continues to validate our prudent investments in sustainable growth," said Cory Douglas, chief financial officer. "Record operating cash flow this quarter also demonstrates the long-term cash generation potential of Medidata's highly scalable and vertically focused cloud business."
For the full year 2013, the company now expects:
- Revenues between $273.0 and $276.0 million.
- Professional services revenues in the high $40 million range.
- Non-GAAP operating income between $64.0 and $67.0 million. Based on current estimates, this would equate to GAAP operating income between $29.0 and $32.0 million.
- Adjusted non-GAAP net income, which includes the tax affected impact primarily from stock-based compensation and amortization at a 40% effective tax rate, between $34.0 and $37.0 million. Based on current estimates, this would equate to GAAP net income between $17.5 and $20.5 million.
- While changes in the stock price could change the fully diluted share count, the company is assuming 26.8 million fully diluted shares.
For the third quarter of 2013, the company expects:
- Revenues between $69.5 and $71.0 million.
- Non-GAAP operating income between $16.0 and $17.0 million. Based on current estimates, this would equate to GAAP operating income between $7.0 and $8.0 million.
- Adjusted non-GAAP net income, which includes the tax affected impact primarily from stock-based compensation and amortization at a 40% effective tax rate, between $8.0 and $9.0 million. Based on current estimates, this would equate to GAAP net income between $3.5 and $4.5 million.
- While changes in the stock price could change the fully diluted share count, the company is assuming 27.0 million fully diluted shares.
The company plans to host its investor conference call today at 8:00 a.m. Eastern. The investor conference call will be available via live webcast on the "Investor" section of Medidata's web site 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 web site at http://investor.mdsol.com. A replay of the conference call can be accessed until Thursday, August 8, 2013, by dialing 800-585-8367 domestically or 404-537-3406 internationally, with the passcode 17553261. An archive of the call will also be hosted on the "Investor" section of Medidata's web site, http://investor.mdsol.com, for a limited period of time.
About Medidata Solutions
Medidata Solutions is the leading global provider of cloud-based solutions for clinical research in life sciences, transforming clinical development through its advanced applications and intelligent data analytics. The Medidata Clinical Cloud™ brings new levels of productivity and quality to the clinical testing of promising medical treatments, from study design and planning through execution, management and reporting. We are committed to advancing the competitive and scientific goals of global customers, which include over 90% of the top 25 global pharmaceutical companies; innovative biotech, diagnostic and device firms; leading academic medical centers; and contract research organizations.
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; the financial impact of any future acquisitions; 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, 2012. 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.
*Non-GAAP Financial Information
Medidata 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, stock-based compensation expense, and an adjustment to the fair value of contingent consideration. Non-GAAP net income excludes the impact of amortization of intangible assets associated with acquisitions, stock-based compensation expense, and an adjustment to the fair value of contingent consideration. Adjusted non-GAAP net income excludes the impact of tax-affected amortization of intangible assets associated with acquisitions, stock-based compensation expense, and an adjustment to the fair value of contingent consideration. 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 and amortization and non-cash, share-based compensation charges, and management believes, based on discussions with investors, that these Non-GAAP measures enhance investors' ability to assess Medidata's historical and project 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.