Medidata Solutions, Inc. (NASDAQ:MDSO) Q3 2017 Earnings Conference Call Transcript

Oct 26, 2017 • 08:00 am ET

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Medidata Solutions, Inc. (NASDAQ:MDSO) Q3 2017 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen, and welcome to the Medidata Q3 2017 Conference Call and Webcast. At this time all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions) As a reminder, today's conference is being recorded.

I would now like to introduce your host for today's conference call, Mr. Anthony D'Amico. You may begin, sir.

Executive
Anthony D'Amico

Thank you, Kevin. Good morning, everyone, and thank you for joining Medidata's third quarter 2017 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 Q3 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)

Before we begin, I'd like to announce that we'll be hosting our Sixth Annual Financial Analyst Day on November 9 in New York City during Medidata NEXT, our annually -- our annual customer event. The live event will include presentations by management, product demos and a question-and-answer session. As usual, we will also be simultaneously webcasting the event on our Investor Relations website, and a replay will be available shortly afterwards.

With that, I now like to turn the call over to Mr. Tarek Sherif, Chairman and Chief Executive Officer of Medidata. Please go ahead, Tarek.

Executive
Tarek Sherif

Thank you, Anthony, and good morning, everyone. Operationally and with regard to many financial metrics, I think Q3 was another excellent quarter for us. Our importance as a strategic partner to industry continues to grow with record adoption trends, highlighting customer commitment to our business. In what was an otherwise well executed quarter, a slight miss in revenue and lower rest of your backlog coverage are not indicative of any concerning trends. In fact, they are due to mostly timing related events as Rouven will detail shortly. We've always managed the company with a long-term focus and with an eye to maximizing value. This quarter was no exception.

I'm pleased that we can point to many positives in the quarter, including healthy profitability, cash flow and very strong bookings. And we're rapidly closing in on the 1,000 customer mark, which is a testament to our role as the industry leader. Our integrated solutions continue to gain traction with some important wins in data and analytics, regulated content management and Patient Cloud. The growth of our multiyear backlog, which I'll touch on shortly, validates our role as well as highlighting the trust our customers place in us, and it sets the foundation for healthy growth in 2018 and beyond.

Now, let's start with our business results. Q3 revenue was just over $140 million, up 17% year-over-year, and GAAP net income came in at nearly $13 million, up 75% year-over-year. Non-GAAP operating income was $36 million, up 23% year-over-year, and our EBITDAO