- Total revenue of $149.2 million, representing 17% year-over-year growth
- GAAP operating margin of 8.9%; non-GAAP operating margin of 22.9%, representing 120 basis points year-over-year margin expansion
- Total multi-year subscription backlog, unadjusted for renewals, of $1.0 billion as of March 31, 2018, up 28% year-over-year
NEW YORK, N.Y. – April 19, 2018 – Medidata (NASDAQ: MDSO) today announced its financial results for the first quarter of 2018.
“We started the year with good financial and operational execution driven by customer and partner platform adoption,” said Tarek Sherif, Medidata’s chairman and chief executive officer. “That adoption is being driven by favorable industry trends. Customers are looking to our platform with its sophisticated analytic capabilities to meet their increasingly complex drug development needs and achieve higher returns. Medidata is at the forefront of driving innovation in the areas of data science, advanced analytics, and mobile health in clinical development.”
First Quarter 2018 Results
- Total revenue was $149.2 million, an increase of $21.6 million, or 17%, compared with $127.6 million in the first quarter of 2017. Subscription revenue was $126.8 million, an increase of $18.9 million, or 18%, compared with the same period last year
- Professional services revenue was $22.4 million, an increase of $2.6 million, or 13%, compared with $19.8 million in the first quarter of 2017
- GAAP operating income was $13.3 million, up 3%, compared with $12.9 million in the first quarter of 2017. Non-GAAP operating income1 was $34.2 million, up 24%, compared with $27.7 million a year ago
- GAAP net income was $10.3 million, or $0.17 per diluted share, up 3%, compared with $10.0 million, or $0.17 per diluted share, in the first quarter of 2017. Non-GAAP net income1 was $24.0 million, or $0.40 per diluted share, up 29%, compared with $18.7 million, or $0.32 per diluted share, in the first quarter of 2017. See the non-GAAP reconciliation included in this release for full details of the non-GAAP adjustments
- Total cash, cash equivalents and marketable securities were $645.2 million at the end of the quarter, compared with $663.3 million on December 31, 2017
Additional Highlights:
- Remaining 2018 adjusted subscription backlog2 as of March 31, 2018 was $370 million, an increase of $51 million compared with a year ago
- Medidata signed an enterprise agreement with a top 5 CRO during the quarter. The company now has enterprise agreements in place with all top 5 CROs, providing further proof that the Medidata Clinical Cloud® is the industry leading technology platform to streamline clinical development
- Platform adoption accelerated during the quarter. The company signed its first enterprise agreement in payments with a top 15 pharma, an existing Medidata platform customer. Additionally, 17 imaging customers were added and the number of eTMF customers nearly doubled
- The European Organisation for Research and Treatment of Cancer (EORTC) signed a five-year platform agreement including Rave Genomics, and Memorial Sloan Kettering expanded its usage of the platform to include Rave Genomics. Medidata Rave Genomics helps not only to accelerate the integration, data management automation and quality control of genomic data, but also to streamline biomarker discovery with machine learning
- On average, contracts were renewed at 22% above prior value
“Building on a strong fourth quarter, our business momentum continued in the first quarter highlighted by 18 percent subscription revenue growth and 120 basis points of EBITDAO margin expansion,” said Rouven Bergmann, Medidata’s chief financial officer. “We are investing in all the right areas and I am confident in the long-term value our strategy will create for customers and shareholders.”
For the full year 2018, the company's guidance provided on February 8, 2018 is unchanged. Please refer to the reconciliation of forward-looking guidance included in this release for full details of the non-GAAP adjustments.
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.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 through May 3, 2018 by dialing 800-585-8367 domestically or 404-537-3406 internationally, with the passcode 6959879. 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's unified platform, pioneering analytics, and unrivaled expertise power the development of new therapies for over 1,000 pharmaceutical companies, biotech, medical device firms, academic medical centres and contract research organizations around the world. The Medidata Clinical Cloud® connects patients, physicians and life sciences professionals. Companies on the Medidata platform are individually and collaboratively reinventing the way research is done to create smarter, more precise treatments. For more information: www.mdsol.com
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 Medidata, 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, 2017. 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 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 adjustments to the fair value of contingent consideration. Non-GAAP net income excludes the tax-effected impact of amortization of intangible assets associated with acquisitions, stock-based compensation expense, non-cash interest expense, and adjustments 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, 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.
Click here to download the press release, financial tables and non-GAAP reconciliation.
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