NEW YORK--(BUSINESS WIRE)--Medidata (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 of 2016.

“Our second quarter results come from strong execution across the Company and reflect Medidata’s momentum in driving adoption of our integrated cloud platform,” said Tarek Sherif, Medidata’s chairman and chief executive officer. “With demand growing for Medidata CTMS, Payments, Balance and mHealth, as well as data analytics, we’re building on the success of the broadest platform in the industry, while continually delivering greater value to our clients. Today, more than ever, our ability to generate sustainable, long-term growth is driven by the large opportunity created by our clients’ innovation, scientific advances and our mission of powering smarter treatments to improve healthcare. It’s clear that Medidata is becoming the strategic technology partner to a massive and important transformation in life sciences and healthcare driven by digital automation in drug development.”

Second Quarter 2016 Results

• Total revenue for the second quarter of 2016 was $114.6 million, an increase of $16.5 million, or 17%, compared with $98.1 million in the second quarter of 2015. Subscription revenue was $96.8 million, an increase of $12.9 million, or 15%, compared with $83.9 million in 2015.
• Professional services revenue for the second quarter of 2016 was a record $17.9 million, an increase of $3.7 million, or 26%, compared with $14.2 million in the second quarter of 2015.
• Adjusted subscription backlog1 for the remainder of the year as of June 30, 2016 was $189 million, an increase of $28 million, or 17%, year over year.
• GAAP operating income for the quarter was $11.1 million, up 124%, compared with $5.0 million in the second quarter of 2015. Non-GAAP operating income2 for the second quarter of 2016 increased to $25.4 million, up 17%, compared with $21.8 million a year ago.
• GAAP net income for the second quarter of 2016 was $4.9 million, or $0.09 per diluted share, up 226%, compared with $1.5 million, or $0.03 per diluted share, in the second quarter of 2015. Adjusted non-GAAP net income2 for the second quarter of 2016 was $13.5 million, or $0.24 per diluted share, up 12%, compared with $12.1 million, or $0.22 per diluted share, in the second quarter of 2015. See the non-GAAP reconciliation included in this release for full details of the non-GAAP adjustments.
• Cash flow from operations was $25.5 million in the second quarter of 2016, an increase of $13.6 million, or 115%, compared with $11.9 million a year ago. For the six-month period ending June 30, cash flow from operations was $38.0 million in 2016, an increase of $9.3 million, or 32%, compared with $28.7 million in 2015.
• Total cash, cash equivalents and marketable securities were $482.9 million at the end of the second quarter of 2016, an increase of $4.2 million, or 1%, compared with $478.7 million on December 31, 2015.

Additional Highlights

• Medidata added a record 96 new clients, including 32 from the recently acquired Intelemage business, during the second quarter. Medidata’s client base grew to 711 at the end of the second quarter, up 32% year over year.
• Medidata Payments—the market’s only end-to-end, global payment solution to trigger, calculate and disburse payments around the globe—signed its first two customers, a major CRO and an oncology-focused biotech company.
• Powered by Medidata Patient Cloud® AppConnect, GSK launched the Patient Rheumatoid Arthritis Data from the Real World (PARADE) study in July 2016, making it the first pharmaceutical manufacturer to use Apple’s ResearchKit™ to conduct a virtual study. Through AppConnect, Medidata is collecting data from the PARADE app’s surveys and iPhone®(Apple Inc.) sensors—which track common symptoms of rheumatoid arthritis such as joint pain, fatigue and mood—and pulling it into a secure environment for patient information.
• 68% of clients had committed to multiple products at the end of the second quarter of 2016, up from 61% at the end of the second quarter of 2015. Increased product adoption was broad based across our integrated platform, with particular strength in Medidata Rave®, Image Management, Risk-Based Monitoring, Medidata Balance®, Medidata CTMS®, and Medidata Patient Cloud.
• Medidata’s revenue retention rate was nearly 100%.

“Our strong second quarter performance reflects continued execution and growth across all segments of our business,” said Rouven Bergmann, Medidata’s chief financial officer. "Our strategy is working as the industry looks to Medidata as the most strategic cloud technology partner in clinical development. Our strong year-to-date results, continued momentum, and record professional services demand provide us with increased visibility and confidence in our full-year revenue and profitability expectations."

Financial Outlook

For the full-year 2016, the Company is maintaining its previously stated total revenue and profitability guidance ranges, as follows:

• Total revenue between $450.0 and $474.0 million at constant currency.
• Professional services revenue is now expected to range from $68.0 to $70.0 million, compared with the prior expectation of approximately $60.0 million. This reflects strong demand for platform adoption with several large implementations currently underway.
• GAAP operating income between $38.5 and $45.5 million. Non-GAAP operating income, which excludes the impact of depreciation, amortization of intangible assets, and stock-based compensation expense, between $102.0 and $109.0 million.
• GAAP net income between $16.5 and $21.0 million. Adjusted non-GAAP net income, which excludes the impact of stock-based compensation, non-cash interest expense associated with convertible senior notes, and amortization, tax-affected at a 40% rate, between $54.5 and $59.0 million.
• While changes in the stock price could change the fully diluted share count, the Company is now assuming 57.0 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 Wednesday, August 3, 2016, by dialing 800-585-8367 domestically or 404-537-3406 internationally, with the passcode 40485281. 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 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. We are committed to advancing the competitive and scientific goals of our life sciences customers worldwide: more than 700 global pharmaceutical companies; innovative biotech, diagnostic and device firms; leading academic medical centers; and contract research organizations. Our industry-leading technology platform, the Medidata Clinical Cloud®, is the primary technology solution powering clinical trials for 17 of the world's top 25 global pharmaceutical companies, bringing new levels of productivity and quality to the clinical testing of promising medical treatments, from study design and planning through execution, management and reporting.