Medidata Solutions, Inc. (NASDAQ:MDSO) Q4 2016 Earnings Conference Call Transcript

Feb 09, 2017 • 08:00 am ET

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Medidata Solutions, Inc. (NASDAQ:MDSO) Q4 2016 Earnings Conference Call Transcript

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Presentation
Operator
operator

Good morning, ladies and gentlemen, and welcome to the Medidata Q4 2016 conference call and webcast.(Operator Instructions)As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Mr. Anthony D'Amico, Senior Director of IR. Sir, you may begin.

Executive
Anthony D'Amico

Thank you, Crystal. Good morning, everyone. And thank you for joining Medidata's fourth-quarter and full-year 2016 conference call.On the call today are: Tarek Sherif, Chairman and CEO; Glen de Vries, President; Rouven Bergmann, CFO; and our COOfficer, Mike Capone. Tarek, Glen, and Rouven will offer comments on our fourth-quarter and full-year performance, followed by our outlook for 2017. Then we will open the call to questions. The Team will take as many questions as possible in the time allotted. (Forward-Looking Cautionary Statements) With that, I'd now like to turn the call over to Mr. Tarek Sherif, Chairman and CEO of Medidata. Please go ahead, Tarek.

Executive
Tarek Sherif

Thank you, Anthony, and good morning, everyone, from very snowy New York. Our fourth-quarter execution drove an impressive finish to an overall strong year for Medidata. We put up some great results, led by stellar sales and services execution. This allowed us to overachieve on our internal plan for 2016, and gives us strong momentum headed into 2017.Platform adoption among our customers is shattering records across the board.

Our rapid top-line growth, coupled with operational discipline, led to significant margin expansion in Q4 and for the full year.Before I get to some of my thoughts on the quarter and year, I'd like to take a moment to thank the entire Medidata Team globally for their hard work, contributions, and great execution. We share our mission with our customers.

It motivates us, but our people are who define us.Now, onto our results. Overall, our financial performance exceeded our expectations. Fourth-quarter revenue came in above plan at $124.5 million, up 4% sequentially and 26% year over year. This resulted in 2016 full-year revenue of $463.5 million, up 18% compared to 2015. We also saw healthy profitability, with quarterly GAAP net income of nearly $11 million, up 59%, and full-year net income of $29 million, up 120% year over year.

And our business model allowed margins to improve consistently every quarter this past year.We started the year with a 19% EBITDA margin in Q1, and expanded it to 26% in Q4. While Rouven will provide more details later in the call, we finished 2016 with total unadjusted subscription backlog at record levels, up 34% year over year. Our high level of committed backlog gives us multi-year visibility and is a great predictor of our future success.I want to congratulate and thank the Sales Team for driving this result. Simply put, they hit it out of the park in the fourth quarter.

Our performance closing deals was exceptional, and we put up some incredible numbers.Medidata provides a mission-critical solution to our customers. 2016 marked an inflection point in which integrated platform adoption took off, validating our strategy. For example, we signed