FOR IMMEDIATE RELEASE
Net revenue increased 32% versus prior year quarter to a record $34 million
Non-GAAP net income* of $1.6 million versus prior year loss of $4.7 million
GAAP net income of $0.2 million versus prior year loss of $5.9 million
NEW YORK, N.Y. – August 13, 2009 – Medidata Solutions (NASDAQ: MDSO), a leading global provider of hosted clinical development solutions, today announced its financial results for the second quarter ended June 30, 2009.
Net revenues for the second quarter of 2009 were $34.0 million, an increase of $8.3 million, or 32%, compared with $25.7 million in the second quarter of 2008. The increase in revenues was primarily due to a $6.4 million, or 36%, increase in revenues from application services, and a $1.8 million, or 24%, increase in revenues from professional services.
“Medidata executed well in the second quarter and first half year, posting strong results, while successfully completing its initial public offering. We continued to solidify our position as a market leader by expanding our global list of customers and partners, significantly enhancing our financial resources and building upon our strong growth trajectory,” said Tarek Sherif, chairman and chief executive officer of Medidata Solutions. “Our customers increasingly look to us to help them achieve improved operational efficiency and productivity on a global scale in their drug development efforts. With our leading-edge technology, strong service orientation, and the vision and resources to execute, we are well-positioned to help our customers achieve their objectives, while driving our long-term growth.”
Non-GAAP operating income* for the second quarter of 2009 was $4.3 million, compared with a loss of $2.5 million in the second quarter of 2008. Non-GAAP net income for the second quarter of 2009 was $1.6 million, or $0.09 per diluted share, compared with a loss of $4.7 million, or $0.70 per diluted share, in the second quarter of 2008. For the second quarter of 2009, GAAP operating income was $0.8 million, compared with a loss of $5.5 million in the second quarter of 2008. GAAP net income for the period was $0.2 million, or $0.01 per diluted share, compared with a loss of $5.9 million, or $0.87 per diluted share, in the second quarter of 2008.
“As a private company for nearly a decade, we have focused on building quality solutions for our customers, a global sales and services presence and, more recently, a robust public company infrastructure. Now that the majority of this scalable infrastructure is in place, we are focused on profitable growth,” commented Bruce Dalziel, chief financial officer.
Total cash and cash equivalents were $93.8 million at the end of the second quarter. The company received approximately $82.0 million in proceeds from its initial public offering, net of underwriting discounts and commissions, during the second quarter. The total outstanding principal balance of long-term debt at the end of the quarter was $14.3 million. Year to date, the company generated $12.1 million in cash flows from operations.
Second Quarter and Year-to-Date Business Highlights
On June 24, 2009, Medidata Solutions priced its initial public offering at $14.00 a common share. The company began trading on the NASDAQ Global Market under the ticker symbol “MDSO” on June 25, 2009.
Medidata’s customer base and product usage continued to expand during the first and second quarter of 2009 across its product line and throughout the world. New customers included Kitasato University Research Center for Clinical Pharmacology, NiTi Surgical Solutions, PhotoCure ASA and PTC Therapeutics, Inc. Building on successful initial studies with Medidata Rave®, customers such as Galderma Pharma SA, Shionogi & Co, Ltd. and ImClone Systems Corp., an operating subsidiary of Eli Lilly, also expanded their arrangements with Medidata through new multiple-study contracts.
The company’s ASPire to Win® CRO partner program continued to expand during the quarter, with a total of three new partners joining in the first half of 2009: BLC Pro, Inc., Brightech International LLC and Sumisho Computer Systems Corporation. Medidata also added the Asian divisions of two existing global CRO partners earlier in the year, including EPS International (China) Co., Ltd. Globally, Medidata now has 20 partners in its ASPire to Win program.
The company introduced the Medidata Technology Partner Program, which advances customers’ trial capabilities by recognizing partners that have leveraged interoperability and data sharing with Medidata. Through this program, as well as the development of integration tools such as a standards and web-based API and Developer Central, an on-line community, Medidata has been advancing a best-of-breed approach to building eClinical suites. Current technology partners include eDiary vendors invivodata, PHT and CRF Health; IVR/IWR providers Almac and UBC; and SAS Drug Development analysis and reporting solution.
Medidata introduced an extension of the Medidata Rave platform with Medidata Rave Monitor, which provides customers with new functionality to monitor investigator sites, a critical and costly function for research sponsors.
CIO magazine honored two of Medidata’s customers, Wyeth Research and Array BioPharma, with CIO 100 awards for their creative and cutting-edge use of technology to generate business value in projects leveraging Medidata Rave.
Financial Outlook
The following statements are based on current expectations and the company assumes no obligation to update or confirm them. These statements are forward-looking and inherently uncertain. Actual results may differ materially as a result of the factors identified below and the factors identified in our public filings made with the Securities and Exchange Commission, or other factors.
For the third quarter of 2009, the company expects revenues to be between $33 and $34 million. The company expects non-GAAP operating income to be between $3.4 and $4.4 million. Based on current estimates this would equate to a GAAP operating loss of $1.0 and $0.0 million. Non-GAAP net income is expected to be between $0.2 and $1.2 million. Based on current estimates this would equate to a GAAP net loss of between $1.7 and $0.7 million.
For the full year 2009, the company expects revenues to be between $135 and $137 million. Non-GAAP operating income is expected to be between $18.0 and $20.0 million. Based on current estimates this would equate to GAAP operating income between $2.0 and $4.0 million. Non-GAAP net income is expected to be between $6.5 and $8.5 million. Based on current estimates this would equate to GAAP net income between $0.0 and $2.0 million.
Total remaining backlog for 2009 was $62.9 million at the end of the second quarter. Remaining year backlog represents the amount of contractual revenue already booked which is expected to be recognized during the remainder of the year.
While changes in the stock price could change the fully diluted share count, for modeling purposes the company is assuming 23.6 million and 20.5 million fully diluted shares in the third quarter and full year, respectively.
Conclusion
Sherif noted in conclusion, “Medidata continues to build momentum in the marketplace, executing against our vision in what is a very dynamic environment. We are excited that our role as a leader and innovator in our industry allows us to increasingly help our customers meet their objectives, by developing and combining best of breed technologies in a fully integrated solution that is viewed as a key component of the evolving clinical development landscape.”
Conference Call
The company plans to host its investor conference call today at 5:00 p.m. EDT to discuss its financial results for the second quarter 2009 and its outlook for the third quarter and full year 2009. 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 877.874.1570 and international participants may dial 719.325.4933. 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 will be accessible until Thursday, August 27, 2009 by dialing 888.203.1112 domestically or 719.457.0820 internationally, and using passcode 6046830. An archive of the call will also be hosted on the “Investor” section of Medidata’s Web site at http://investor.mdsol.com for a limited period of time.
About Medidata Solutions Worldwide
Medidata Solutions (www.mdsol.com) is a leading global provider of hosted clinical development solutions that enhance the efficiency of customers’ clinical development processes and optimize their research and development investments. Medidata products and services allow customers to achieve clinical results more efficiently and effectively by streamlining the design, planning and management of key aspects of the clinical development process, including protocol development (Medidata Designer™), investigator benchmarking and budgeting (Medidata Grants Manager™), contract research organization (CRO) benchmarking and budgeting (Medidata CRO Contractor™), and the capture, management, analysis and reporting of clinical trial data (Medidata Rave®). Medidata’s diverse customer base spans pharmaceutical, biotechnology and medical device companies, academic institutions, CROs and other research organizations, and includes more than 20 of the top 25 global pharmaceutical companies.
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 products and services, business model, strategy and growth opportunities, profitability and competitive position. Forward-looking statements describe future expectations, plans, results or strategies and are generally preceded by words such as “future,” “plan” or “planned,” “will” or “should,” “expected,” “anticipates,” “possible,” “projected” or “targeted.” You are cautioned that such statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by which, such performance or results will have been achieved. Such statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in these statements. Important factors that could cause such differences include, but are not limited to, those discussed in the “Risk Factors” section of Medidata’s prospectus, such as (i) Medidata’s ability to retain and expand its customer base, (ii) Medidata’s ability to develop innovative products, (iii) the financial condition of Medidata’s current and potential customers, (iv) changes in the regulatory environment and (v) general economic factors. 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, future events or otherwise.
*Non-GAAP Financial Information
Medidata Solutions 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. Medidata Solutions management believes these non-GAAP measures are useful to investors because this supplemental information facilitates comparisons to prior periods. Management uses these Non-GAAP measures to evaluate its financial results, develop budgets and manage expenditures. 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. Non-GAAP operating income excludes the impact of depreciation, amortization of intangible assets associated with acquisitions and stock-based compensation expense. Non-GAAP net income excludes the impact of amortization of intangible assets associated with acquisitions and stock-based compensation expense.
Investor Contact:
Hulus Alpay
Medidata Solutions
212.419.1025
halpay@mdsol.com
Media Contact:
Susan McCarron
Lois Paul & Partners
781.782.5767
Susan_McCarron@lpp.com