Medidata Solutions, Inc. (NASDAQ:MDSO) Q2 2016 Earnings Conference Call - Final Transcript

Jul 20, 2016 • 08:00 am ET

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Medidata Solutions, Inc. (NASDAQ:MDSO) Q2 2016 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen, and welcome to the Medidata Q2 2016 Conference Call and Webcast. [Operator Instructions] I would now like to introduce your host for today's conference Mr. Hulus Alpay, Senior Vice President and Head of Investor Relations. Sir, you may begin your conference.

Executive
Hulus Alpay

Thank you, Chelsea. Good morning, everyone, and thank you for joining Medidata's second quarter 2016 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 second quarter and our business 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 disclaimers 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 US 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.

Executive
Tarek Sherif

Thanks, Hulus. Good morning, and thank you all for joining today's call. On the heels of our strong first quarter, we had an even better second quarter, giving us the right kind of momentum as we enter the second half of the year. With our performance year-to-date, we remain on track to hit our full year plans. This quarter really was all about great execution. Revenue growth came in ahead of our expectations, while profitability was at a healthy level, driving great quarterly cash flow. While we achieved lots of significant milestones, we hit two records that standout, total clients and quarterly client growth.

Our results validate our product strategy as we continue to see strong multiproduct adoption on our core platform. The number of multiproduct commitments among new clients has more than doubled versus Q1 and year-over-year, setting an all time record. Moreover, we're pleased with the growth of implementations and usage across our core, including Balance and CTMS. While many of our pure cloud companies talk about their path to profitability, we're already there in a big way and have been for some time.

As you'll hear from Rouven, earnings growth and operating margins and cash flow are all at levels that many companies hope to achieve at much greater scale. This gives us the flexibility to invest in areas where we see great growth potential, both in terms of building value for Medidata and shareholders, and ultimately achieving