Medidata Solutions, Inc. (NASDAQ:MDSO) Q4 2015 Earnings Conference Call - Final Transcript

Feb 10, 2016 • 08:00 am ET


Medidata Solutions, Inc. (NASDAQ:MDSO) Q4 2015 Earnings Conference Call - Final Transcript


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Good day, ladies and gentlemen, and welcome to the Medidata Fourth Quarter 2015 Conference Call and Webcast. [Operator Instructions] Later, there will be a question-and-answer session, and instructions will follow at that time [Operator Instructions].

I would now like to turn the conference over to Hulus Alpay, Head of Investor Relations. Sir, you may begin.

Hulus Alpay

Thank you, Shannon. Good morning, everyone, and thank you for joining Medidata's fourth quarter and full-year 2015 conference call. On the call today are Tarek Sherif, Chairman and Chief Executive Officer; Glen de Vries, President; Rouven Bergmann, Chief Financial Officer; and our Chief Operating Officer, Mike Capone.

Tarek, Glen and Rouven will offer comments on our fourth quarter and full-year performance followed by our outlook for 2016. Then we'll open the call to questions. The team will take as many questions as possible on the time allotted.

Before we begin, let me take a minute to remind everyone that elements of this presentation are forward-looking and based on our best view of the business as we see it today. I refer you to our detailed disclaimer set out in the press release and our filings with the Securities and Exchange Commission.

Forward-looking statements are subject to risks that could cause actual results to differ from our expectations. We disclaim any obligation to update or revise forward-looking statements. We will also discuss some non-GAAP financial measures that we think help to explain our underlying performance. Today's press release provides a reconciliation of U.S. GAAP to these measures.

Now I'd like to turn the call over to Mr. Tarek Sherif, Chairman and Chief Executive Officer of Medidata. Please go ahead, Tarek.

Tarek A. Sherif

Thanks, Hulus. Good morning and thank you for joining us on today's call. Our accomplishments this year which spanned development, delivery and sales had significant positive implications for our strategic position, for our long-term growth and for value creation.

While Rouven will shortly walk you through the details of our financial results and expectation, I'd like to share my perspective. This past year, we invested heavily in our cloud platform to expand our business and relevance as a strategic partner in life sciences, and we still delivered great cash flow, profitability and growing margins that are among the best in cloud technology.

While total revenue for 2015 was $392 million, up 17% year-over-year, and subscription revenue grew 21% year-over-year, we came in at the low end of our guidance range, which is not where we wanted to be. Clearly, our fourth quarter revenues were not in line with our historical growth rates or expectations. A contributor to this was the timing in terms of some of very large transactions, two of which we closed by quarter end. As has been our philosophy and practice, we typically don't trade long-term economics for short-term upside, and this had an impact on our Q4 revenues.

I think it's important to recognize that we took away learnings from this past year and throughout 2015, we made changes in our organization that