[April 23, 2015]

Medidata Reports Record First Quarter 2015 Revenues

Medidata (NASDAQ:MDSO), the leading global provider of cloud-based solutions for clinical research in life sciences, today announced its financial results for the first quarter of 2015.

"Our strong execution and business momentum in the first quarter drove record financial and operational results, as the life sciences industry expands its use of the Medidata Clinical Cloud^®," said Tarek Sherif, Medidata's chairman and chief executive officer. "Our cloud-based platform and growing data analytics capabilities are being used by over 500 companies to accelerate drug development - helping to develop eight of the top 10 best-selling drugs globally in 2014. Our increasing operating leverage and profitability allow us to make targeted investments in our business, as we continue to focus on innovation and execution in order to capitalize on substantial growth opportunities in 2015 and beyond."

First Quarter 2015 Results

• Total revenue for the first quarter of 2015 was $92.4 million, an increase of $15.8 million, or 21%, compared with $76.6 million in the first quarter of 2014. Subscription revenue was $78.7 million, an increase of 23% compared with the same period last year.
• GAAP operating income for the quarter was $3.5 million, compared with $0.3 million in the first quarter of 2014. Non-GAAP operating income¹ for the first quarter of 2015 increased to $17.7 million, up 41% compared with $12.5 million a year ago.
• GAAP net income for the first quarter of 2015 was $0.2 million, or $0.00 per diluted share, compared with a net loss of ($1.8) million, or ($0.03) per diluted share, in the first quarter of 2014. Adjusted non-GAAP net income¹ for the first quarter of 2015 was $9.2 million, or $0.17 per diluted share, compared with $5.9 million, or $0.11 per diluted share, in the first quarter of 2014. See the non-GAAP reconciliation included in this release for full details of the non-GAAP adjustments.
• Total cash, cash equivalents and marketable securities were $465.8 million at the end of the first quarter of 2015, an increase of $62.3 million, or 15%, compared with $403.5 million at the end of the first quarter of 2014.
• Cash flow from operations was $16.9 million in the first quarter of 2015, compared with ($6.3) million a year ago.

Additional Highlights

• Medidata added a record 39 new customers during the first quarter of 2015. Medidata's customer base grew to 516, up 23% year over year.
• 59% of customers had committed to multiple products at the end of the first quarter of 2015, up from 52% at the end of the first quarter of 2014, driven by strong adoption of Medidata Rave^®, Medidata Coder^® and Medidata Balance^®.
• Medidata announced a strategic collaboration with Garmin International Inc., a unit of Garmin Ltd., for mobile health interoperability in clinical research. Garmin joins other companies in the Medidata mHealth integration ecosystem, including Vital Connect, ActiGraph, Fitbit and Spaulding, enabling customers to explore the use of mHealth devices in clinical trials.
• Billings were a record $109 million in the first quarter of 2015, up 21% year over year.
• Adjusted subscription backlog² for the remainder of the year as of March 31, 2015 increased to $229 million, an increase of $37 million, or 19% year over year.
• Medidata's overall revenue retention rate for the full year was nearly 100%. The retention rate for all its large enterprise customers over the past several years was 100%.

"The first quarter was a strong start to the year as the momentum we experienced in January continued throughout Q1, as reflected in our sequential revenue growth," said Cory Douglas, Medidata's chief financial officer. "For the full year 2015, we continue to expect increased profitability, operating margin expansion and record cash flows, while continuing to invest in our business."

Financial Outlook

For the full year 2015, the Company's guidance provided on February 5, 2015 remains unchanged:

• Revenues between $392.0 and $412.0 million, representing between 17% and 23% year-over-year growth.
• Professional services revenues of approximately $60 million.
• Non-GAAP operating income between $90.0 and $96.0 million. Based on current estimates, this would equate to GAAP operating income between $33.0 and $35.5 million.
• Adjusted non-GAAP net income, which includes the tax affected adjustments primarily from stock-based compensation, non-cash interest expense associated with convertible senior notes and amortization at a 40% effective tax rate, between $47.0 and $50.5 million. Based on current estimates, this would equate to GAAP net income between $11.5 and $13.0 million.
• While changes in the stock price could change the fully diluted share count, the company is assuming 56.0 million fully diluted shares.

Conference Call

The company plans to host its investor conference call today at 8:00 a.m. Eastern time to discuss its first quarter financial results and the hiring of Rouven Bergmann who will be joining the company as Chief Financial Officer effective May 18, 2015, which was separately announced today. The investor conference call will be available via live webcast on the "Investor" section of Medidata's web site 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 web site at http://investor.mdsol.com. A replay of the conference call can be accessed until Thursday, May 7, 2015, by dialing 800-585-8367 domestically or 404-537-3406 internationally, with the passcode 16539923. An archive of the call will also be hosted on the "Investor" section of Medidata's web site, 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. The Medidata Clinical Cloud^® brings new levels of productivity and quality to the clinical testing of promising medical treatments, from study design and planning through execution, management and reporting. We are committed to advancing the competitive and scientific goals of global customers, which include over 90% of the top 25 global pharmaceutical companies; innovative biotech, diagnostic and device firms; leading academic medical centers; and contract research organizations.

Cautionary Statement

Certain statements made in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that involve significant risks and uncertainties about Medidata Solutions, Inc. ("Medidata"), including but not limited to statements about Medidata's forecast of financial performance, products and services, business model, strategy and growth opportunities, and competitive position. Such statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in these statements. In particular, the risks and uncertainties include, among other things, risks associated with possible fluctuations in our financial and operating results; errors, interruptions or delays in our service or our web hosting; the financial impact of any future acquisitions; our ability to continue to release, and gain customer acceptance of, new and improved versions of our products; changes in our sales and implementation cycles; competition; our ability to retain and expand our customer base or increase new business from those customers; our ability to hire, retain and motivate our employees and manage our growth; regulatory developments; litigation; and general developments in the economy. For additional disclosure regarding these and other risks faced by the company, see disclosures contained in Medidata's public filings with the Securities and Exchange Commission, including the "Risk Factors" section of Medidata's Annual Report on Form 10-K for the year ended December 31, 2014. You should consider these factors in evaluating the forward-looking statements included in this press release and not place undue reliance on such statements. The forward-looking statements are made as of the date hereof, and Medidata undertakes no obligation to update such statements as a result of new information.

(1) Non-GAAP Financial Information

Medidata provides non-GAAP operating income, net income and net income per share applicable to common stockholders data as additional information for its operating results. These measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from non-GAAP measures used by other companies. Non-GAAP operating income excludes the impact of depreciation, amortization of intangible assets associated with acquisitions, and stock-based compensation expense. Adjusted non-GAAP net income excludes the impact of tax-affected amortization of intangible assets associated with acquisitions, stock-based compensation expense, and non-cash interest expense on convertible senior notes. Management uses these non-GAAP measures to evaluate its financial results, develop budgets, manage expenditures, and as an important factor in determining variable compensation. In addition, investors frequently have requested information from management regarding depreciation, amortization and other non-cash charges, such as share-based compensation, and management believes, based on discussions with investors, that these non-GAAP measures enhance investors' ability to assess Medidata's historical and projected future financial performance. While management believes these non-GAAP financial measures provide useful supplemental information to investors, there are limitations associated with the use of non-GAAP financial measures. One limitation of non-GAAP operating income is that it excludes depreciation and amortization, which represents the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in our business. Medidata compensates for these limitations by using these non-GAAP financial measures as supplements to GAAP financial measures and by reviewing the reconciliations of the non-GAAP financial measures to their most comparable GAAP financial measures. Investors are encouraged to review the reconciliations of these non-GAAP financial measures to the comparable GAAP results, which are attached to this press release.

(2) Adjusted subscription backlog equals subscription backlog plus outstanding intra-year renewals.

(1) Amount represents non-cash interest expense, including amortization of debt discount and issuance costs, on our 1.00% convertible senior notes issued during the third quarter of 2013. We exclude this incremental non-cash interest expense for purposes of calculating adjusted non-GAAP net income. We believe that excluding these expenses from our non-GAAP measures is useful to investors because such incremental non-cash interest expense does not generate a cash outflow for the company and the debt issuance costs do not represent a cash outflow for the company except in the period the notes were issued; therefore both are not indicative of our continuing operations.

(2) Tax impact calculated using a 40% tax rate.

The table above presents a reconciliation of GAAP to non-GAAP operating income, net income, and net income per share applicable to common stockholders for the three months ended March 31, 2015 and 2014. Non-GAAP operating income excludes the impact of depreciation, amortization of intangible assets associated with acquisitions, and stock-based compensation expense. Adjusted non-GAAP net income excludes the impact of tax affected amortization of intangible assets associated with acquisitions, stock-based compensation expense, and non-cash interest expense on convertible senior notes.

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