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Medidata Reports Record Second Quarter 2017 Results

NEW YORK--(BUSINESS WIRE)--Medidata (NASDAQ:MDSO), the leading global provider of cloud-based solutions and data analytics for clinical research, today announced its financial results for the second quarter of 2017.

"As our second quarter and first half year results show, our investments in innovation and talent are paying off, creating value and establishing Medidata as the trusted partner of choice for life sciences," said Tarek Sherif, Medidata's chairman and chief executive officer. "Clinical research continues to grow more complex, and our ability to deliver the leading end-to-end cloud platform, apply advanced analytics and augment this technology with our deep life sciences expertise, empowers our customers to meet this challenge, pursue opportunities, and ultimately improve patient outcomes."

Second Quarter 2017 Results

  • Total revenue for the second quarter of 2017 was $137.4 million, an increase of $22.8 million, or 20%, compared with $114.6 million in the second quarter of 2016. Subscription revenue was $114.3 million, an increase of $17.5 million, or 18%, compared with the same period last year.
  • Professional services revenue for the second quarter of 2017 was $23.1 million, an increase of $5.3 million, or 30%, compared with $17.9 million in the second quarter of 2016.
  • GAAP operating income for the quarter was $13.7 million, up 23%, compared with $11.1 million in the second quarter of 2016. Non-GAAP operating income1 for the second quarter of 2017 increased to $32.1 million, up 27%, compared with $25.4 million a year ago.
  • GAAP net income for the second quarter of 2017 was $8.3 million, or $0.14 per diluted share, up 33%, compared with $6.2 million, or $0.11 per diluted share, in the second quarter of 2016. Adjusted non-GAAP net income1 for the second quarter of 2017 was $18.8 million, or $0.31 per diluted share, up 27%, compared with $14.8 million, or $0.26 per diluted share, in the second 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 $38.2 million in the second quarter of 2017, an increase of $9.0 million, or 31%, compared with $29.2 million a year ago. For the six-month period ending June 30, cash flow from operations was $60.7 million in 2017, an increase of $17.7 million, or 41%, compared with $43.0 million in 2016.
  • Total cash, cash equivalents, and marketable securities were $535.0 million at the end of the second quarter, compared with $515.2 million on December 31, 2016.

Additional Highlights

  • Remaining adjusted subscription backlog2 as of June 30, 2017 was $223 million, an increase of $34 million, or 18%, compared with $189 million a year ago.
  • The Medidata Clinical Cloud® expanded through general availability of two new regulated content management (RCM) solutions - standard operating procedure (SOP) management and electronic trial master file (eTMF) archive. Customers have already begun to adopt these solutions, including the recently announced agreement with Theracos to deploy eTMF and eTMF archive.
  • Medidata became the first technology vendor selected by the American Society of Clinical Oncology (ASCO) to present its scientific innovation at their annual conference, the premier cancer-focused scientific meeting. ASCO published two separate scientific findings, which highlight Medidata's ability to help clients accelerate clinical research, providing them unique value derived from our rich data assets and advanced data analytics. Medidata collaborated with Roche and Professor Don Berry, from The University of Texas MD Anderson Cancer Center, around our Synthetic Control Arm (SCA) offering for new findings in acute myeloid leukemia. Medidata partnered with Jason Mezey, associate professor at Cornell University and Weill Cornell Medical College, to present findings in breast cancer, with our Clinical Trial Genomics (CTG) offering.

“Building upon a very strong first quarter, our business momentum continued in Q2, highlighted by 20% total revenue growth, 31% operating cash flow growth, and 120 bps of EBITDAO margin expansion,” said Rouven Bergmann, Medidata’s chief financial officer. “As evident in our financial results, customers are increasingly adopting Medidata’s integrated platform to drive digital innovation enabling high-powered data discovery, benchmarking, adaptive trial designs, predictive analytics and machine learning.”

Financial Outlook

For the full-year 2017, the Company is maintaining its previously stated total revenue and profitability guidance ranges, as follows:

  • Total revenue between $538 and $562 million, representing up to 21% year-over-year growth at constant currency.
  • Professional services revenue is now expected to be in the low $80 million dollar range, compared with the prior expectation of approximately $75 million. This reflects strong demand across many customers implementing the platform, data analytics, and strategic services.
  • GAAP operating income between $61 and $69 million. Non-GAAP operating income4, 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 income4, 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 59.5 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 Tuesday, August 1, 2017 by dialing 800-585-8367 domestically or 404-537-3406 internationally, with the passcode 46890165. 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...


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