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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 third quarter 2013 and provided detailed financial guidance.
“I am very proud of our company’s strong execution in the most recent quarter and year to date, as our results came in at record levels. Current and new customers are increasingly choosing to work on the Medidata Clinical Cloud™ to drive innovation and improve productivity in their clinical development efforts,” said Tarek Sherif, Medidata’s chairman and chief executive officer. “Our number one priority is to drive value for our clients as they work to bring new life-enhancing and innovative drugs to market. While our financial results and operational metrics tell a great story, underlying them is an evolving opportunity that holds tremendous potential for our future. Medidata’s vertical cloud focus, innovative platform and unique data assets are embedding us in the industry’s transformation and are driving a broad range of new opportunities.”
Third Quarter 2013 Results
Total revenues for the third quarter of 2013 were $70.9 million, an increase of $15.1 million, or 27%, compared with $55.8 million in 2012. Application services revenue was $57.9 million, an increase of 32% compared with the same period last year.
GAAP operating income for the quarter increased to $9.5 million, up 39%, compared with $6.8 million a year ago. Non-GAAP operating income* for the third quarter of 2013 increased to $18.2 million, up 55%, compared with $11.8 million a year ago.
Medidata completed an offering of $287.5 million aggregate principal amount of 1.00% convertible senior notes due in 2018.
GAAP net income for the third quarter of 2013 was $5.3 million, or $0.20 per diluted share, up 30%, compared with $4.1 million, or $0.16 per diluted share, in the third quarter of 2012. GAAP net income for the third quarter of 2013 includes cash and non-cash interest expenses associated with the convertible senior notes issued during the quarter. Adjusted non-GAAP net income* for the third quarter of 2013 was $10.7 million, or $0.40 per diluted share, up 75%, compared with $6.1 million, or $0.24 per diluted share, in the third quarter of 2012 and excludes the impact of the non-cash interest expense related to our convertible senior notes. See our non-GAAP reconciliation included in this release for full details of our non-GAAP adjustments associated with our convertible senior notes and other items.
Application services backlog for the remainder of the year as of September 30, 2013, increased to $59.5 million, up 35% over the comparable period a year ago.
Total cash, cash equivalents and marketable securities were $428.0 million at the end of the third quarter, an increase of $304.4 million, or 246%, as compared with $123.6 million at the end of the third quarter of 2012, primarily due to net proceeds of $279.4 million from the convertible senior notes issued during the quarter.
Cash flow from operations was $20.4 million in the third quarter, up 140% year-over-year.
47% of customers had committed to multiple products at the end of the third quarter of 2013, as compared with 36% at the end of the third quarter of 2012, reflecting increased adoption of our portfolio of solutions.
Medidata’s customer base grew to 379 in the third quarter of 2013, up 14% from the third quarter of 2012.
Non-Rave revenues increased 92% year over year, driven by increased adoption of solutions, including data analytics, patient randomization and trial supply, study and protocol design, medical coding, and trial management.
“Our revenue growth, margin improvement, profitability and strong cash flows highlight the benefits of our vertically focused business model,” said Cory Douglas, Medidata’s chief financial officer. “Given our strong performance year to date, solid backlog coverage, industry leading revenue retention and a healthy pipeline of future opportunities, we are once again raising our 2013 guidance.”