ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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13-4066508
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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|
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350 Hudson Street, 9th Floor
New York, New York
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10014
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
|
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Name of each exchange on which registered
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Common Stock, par value $0.01 per share
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The NASDAQ Stock Market LLC
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Page
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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Item 16.
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•
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Implementation services.
We provide implementation of the Medidata Cloud with efficient, scalable configuration and support. Our methodology leverages both the industry-specific expertise of our employees and the specific capabilities of our platform to simplify, streamline, and expedite the implementation of our solutions.
|
•
|
Sponsor enablement.
Our tailored knowledge transfer enables customers to design, configure, implement, and manage their own studies. We believe that the resulting level of customer autonomy maximizes the benefits of our platform technology.
|
•
|
Strategic consulting.
Our industry and technology experts draw on Medidata's visibility into best practices and data-driven analytics to advise customers through the transformational internal changes that our platform drives- from re-engineering business processes across departments to changing governance models.
|
•
|
Partner support.
We offer services supporting successful clinical trials at our channel partners, aimed at maximizing the value of the partner/sponsor/technology collaboration.
|
•
|
E-learning and training.
We offer self-administered e-learning courses as well as a variety of additional training services through our training group, known as Medidata Academy, to facilitate the successful adoption of our cloud-based solutions throughout the customer or channel partner organization.
|
•
|
Ongoing support.
We take a consultative approach to ensure quality study design, ease of use, and productivity throughout the project life cycle. We have certified experts available to manage our customers' operational needs and ensure they are gaining maximum value from the Medidata platform within their unique environments.
|
•
|
Expand the number of products used by our existing customers
. We refer to this footprint, measured by the number of Medidata products used by each of our customers, as "density." We seek to improve our density by demonstrating the significant efficiencies that our customer base can achieve by standardizing end-to-end clinical development and commercialization processes on our platform and by leveraging more of our solutions.
|
•
|
Increase the level of product usage by existing customers.
We refer to the level of usage of Medidata products that are already deployed by customers as "intensity." In cases where customers utilize our solutions for only a subset of their clinical trial activities, we seek to drive usage across more trials, therapeutic areas, geographies, and phases, and to convert single-study customers to multi-study customers.
|
•
|
Continuously improve our platform.
We continue to enhance our platform with regular releases, adding new functionality, integrations, and user benefits.
|
•
|
Develop additional innovative technologies and services.
We continue to build new innovative solutions that further transform the clinical development and commercialization process, and offer them to new and existing customers. We continue to develop our analytics and benchmarking capabilities, creating value for our customers by improving decision-making.
|
•
|
Grow indirect sales partnership initiatives
. We pursue strategic partnerships with channel partners, such as contract research organizations ("CROs") and systems integrators, to position the Medidata Cloud as the platform of choice for their outsourced clinical trial management services. Our well-established program of support, training, and certification enables partners to cost-effectively implement our solutions and services in sponsor studies as they provide their other services related to pharmaceutical development.
|
•
|
Position the Medidata Cloud as a key player in the evolving clinical ecosystem.
We seek opportunities for collaborative innovation, building strategic relationships with other leading technology and data firms. Partnerships enable us to enhance and complement our portfolio of offerings and achieve greater scale in the marketplace while helping to drive the evolution of life sciences.
|
•
|
Expand our global customer base.
We have offices in 7 countries and serve customers in over 30 countries. We will continue to expand our sales, marketing, technology, and support resources into new markets around the world where clinical development activity is accelerating.
|
•
|
innovation, breadth and depth of solution offerings;
|
•
|
data privacy and security infrastructure;
|
•
|
strategic partnerships with other companies in the life sciences and technology industries;
|
•
|
platform capabilities and solution functionality and features, including analytics;
|
•
|
workforce skill set;
|
•
|
scalability and upgrade pathways and support;
|
•
|
speed, performance, and ease of use of our solutions;
|
•
|
product reliability and infrastructure accessibility and security;
|
•
|
regulatory compliance;
|
•
|
breadth and strength of partnerships;
|
•
|
interoperability;
|
•
|
financial stability;
|
•
|
depth of expertise and quality of our global professional services and customer support; and
|
•
|
sales and marketing capabilities, including the ability to create and communicate operational value.
|
•
|
budgeting cycles of our customers;
|
•
|
the length of our sales cycle;
|
•
|
increased competition;
|
•
|
our ability to develop innovative products;
|
•
|
the timing of new product releases by us or our competitors;
|
•
|
market acceptance of our products;
|
•
|
changes in our and our competitors' pricing policies;
|
•
|
the financial condition of our current and potential customers;
|
•
|
changes in the regulatory environment;
|
•
|
changes in operating expenses and personnel changes;
|
•
|
our ability to hire and retain qualified personnel;
|
•
|
the effect of potential acquisitions and consequent integration;
|
•
|
our ability to realize benefits from strategic partnerships, acquisitions or investments;
|
•
|
equity issuances, including as consideration in acquisitions;
|
•
|
variations in the revenue mix of our services and growth rates of our cloud subscription and professional services support offerings;
|
•
|
changes in our business strategy;
|
•
|
increases in our costs due to inflation; and
|
•
|
general economic factors, including factors relating to disruptions in the world credit and equity markets and the related impact on our customers' access to capital.
|
•
|
substantial cash expenditures;
|
•
|
incurrence of costs, debt, and contingent liabilities, some of which we may not identify at the time of acquisition or which may ultimately be greater than we anticipate;
|
•
|
difficulties in integrating and assimilating the operations, products, and personnel of the acquired companies;
|
•
|
diversion of management's attention away from other business concerns;
|
•
|
risk associated with entering markets in which we have limited or no direct experience;
|
•
|
potential loss of key employees, customers, and strategic alliances from either our current business or the target company's business;
|
•
|
delays in customer purchases due to uncertainty and the inability to maintain relationships with customers of the acquired businesses; and
|
•
|
failure to achieve anticipated business development benefits due to an inadequate evaluation of acquisitions or investments.
|
•
|
the economic conditions in these various foreign countries and their trading partners, including conditions resulting from disruptions in the world credit and equity markets;
|
•
|
political instability;
|
•
|
longer payment cycles;
|
•
|
greater difficulty in accounts receivable collection and enforcement of agreements;
|
•
|
requirements to comply with foreign laws;
|
•
|
data privacy laws and regulations which restrict the collection by our customers, processing or transfer into the U.S. of customer personal information or that require customer information to be collected or processed in a designated territory;
|
•
|
changes in regulatory requirements;
|
•
|
risk of non-compliance with the U.S. Foreign Corrupt Practices Act ("FCPA") or similar regulations in other jurisdictions;
|
•
|
fewer legal protections for intellectual property and contract rights;
|
•
|
tariffs or other trade barriers;
|
•
|
difficulties in managing foreign operations;
|
•
|
unavailability of staff with needed skills;
|
•
|
exposure to interest rate fluctuations;
|
•
|
transportation delays;
|
•
|
potentially adverse tax consequences; and
|
•
|
exposure to foreign currency exchange risk associated with transactions entered into in currencies other than the U.S. dollar.
|
•
|
our quarterly or annual earnings or those of other companies in our industry;
|
•
|
announcements by us or our competitors of significant contracts or acquisitions;
|
•
|
changes in accounting standards, policies, guidance, interpretations, or principles;
|
•
|
forward-looking guidance to industry and financial analysts related to future revenue and earnings;
|
•
|
disruptions in our service due to computer hardware, software, network, or data center problems;
|
•
|
general economic and stock market conditions, including disruptions in the world credit and equity markets;
|
•
|
the failure of securities analysts to cover our common stock or changes in financial estimates and other metrics and modeling used by analysts in their research reports about our business;
|
•
|
future issuances of our common stock, whether in connection with an acquisition, or a capital raising transaction; and
|
•
|
the other factors described in these “Risk Factors.”
|
Location
|
|
Use
|
|
Size
|
|
Expiration of Lease
|
New York, New York
|
|
Corporate headquarters
|
|
137,535 square feet
|
|
April 2024
|
Boston, Massachusetts
|
|
Office space
|
|
53,136 square feet
|
|
January 2031
|
Iselin, New Jersey
|
|
Office space
|
|
50,648 square feet
|
|
June 2026
|
Hammersmith, United Kingdom
|
|
Office space
|
|
29,106 square feet
|
|
February 2027
|
San Francisco, California
|
|
Office space
|
|
14,015 square feet
|
|
February 2023
|
Tokyo, Japan
|
|
Office space
|
|
12,338 square feet
|
|
October 2023
|
Seoul, South Korea
|
|
Office space
|
|
11,882 square feet
|
|
March 2022
|
Houston, Texas
|
|
Data center and office space
|
|
11,367 square feet
|
|
December 2020
|
Frankfurt, Germany
|
|
Data center
|
|
471 square feet
|
|
February 2020
|
|
2018
|
|
2017
|
||||||||||||
|
High
|
|
Low
|
|
High
|
|
Low
|
||||||||
Fourth Quarter
|
$
|
79.76
|
|
|
$
|
60.10
|
|
|
$
|
81.88
|
|
|
$
|
63.33
|
|
Third Quarter
|
88.87
|
|
|
71.91
|
|
|
85.92
|
|
|
70.38
|
|
||||
Second Quarter
|
85.69
|
|
|
60.70
|
|
|
81.65
|
|
|
56.65
|
|
||||
First Quarter
|
71.82
|
|
|
59.60
|
|
|
58.77
|
|
|
47.77
|
|
|
Total Number
of Shares
Purchased (1)
|
|
Average
Price Paid
per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum
Number of
Shares that
May Yet be
Purchased
under the Plans
or Programs
|
|||||
October 1 – October 31, 2018
|
6,200
|
|
|
$
|
68.85
|
|
|
—
|
|
|
—
|
|
November 1 – November 30, 2018
|
1,088
|
|
|
71.76
|
|
|
—
|
|
|
—
|
|
|
December 1 – December 31, 2018
|
1,638
|
|
|
77.21
|
|
|
—
|
|
|
—
|
|
|
Total
|
8,926
|
|
|
$
|
70.74
|
|
|
—
|
|
|
—
|
|
(1) Represents the number of shares acquired as payment by employees of applicable statutory minimum withholding taxes owed upon vesting of restricted stock awards, restricted stock units, or performance-based restricted stock units granted under the 2017 and 2009 Plans.
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
(in thousands, except per share amounts)
|
||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Subscription
|
$
|
535,672
|
|
|
$
|
457,824
|
|
(1)
|
$
|
388,997
|
|
(1)
|
$
|
336,195
|
|
|
$
|
280,041
|
|
Professional services
|
100,024
|
|
|
86,381
|
|
(1)
|
69,496
|
|
(1)
|
56,311
|
|
|
55,030
|
|
|||||
Total revenues
|
635,696
|
|
|
544,205
|
|
|
458,493
|
|
|
392,506
|
|
|
335,071
|
|
|||||
Costs of revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Subscription
|
91,087
|
|
|
69,235
|
|
|
62,136
|
|
|
47,795
|
|
|
45,576
|
|
|||||
Professional services
|
68,072
|
|
|
57,558
|
|
|
50,473
|
|
|
41,993
|
|
|
39,344
|
|
|||||
Total cost of revenues
|
159,159
|
|
|
126,793
|
|
|
112,609
|
|
|
89,788
|
|
|
84,920
|
|
|||||
Gross profit
|
476,537
|
|
|
417,412
|
|
|
345,884
|
|
|
302,718
|
|
|
250,151
|
|
|||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Research and development
|
162,788
|
|
|
138,564
|
|
|
112,595
|
|
|
92,319
|
|
|
71,757
|
|
|||||
Sales and marketing
|
151,943
|
|
|
124,138
|
|
(1)
|
105,925
|
|
(1)
|
103,153
|
|
|
83,435
|
|
|||||
General and administrative
|
110,489
|
|
|
94,324
|
|
|
78,678
|
|
|
78,014
|
|
|
69,111
|
|
|||||
Wire transaction (recovery) loss (2)
|
—
|
|
|
(4,770
|
)
|
|
—
|
|
|
—
|
|
|
5,784
|
|
|||||
Total operating costs and expenses
|
425,220
|
|
|
352,256
|
|
|
297,198
|
|
|
273,486
|
|
|
230,087
|
|
|||||
Operating income
|
51,317
|
|
|
65,156
|
|
|
48,686
|
|
|
29,232
|
|
|
20,064
|
|
|||||
Interest and other expense, net
|
(1,179
|
)
|
|
(12,121
|
)
|
|
(12,895
|
)
|
|
(13,457
|
)
|
|
(13,550
|
)
|
|||||
Income before income taxes
|
50,138
|
|
|
53,035
|
|
|
35,791
|
|
|
15,775
|
|
|
6,514
|
|
|||||
Provision for income taxes
|
(1,783
|
)
|
|
5,459
|
|
(1)
|
7,782
|
|
(1)
|
2,608
|
|
|
422
|
|
|||||
Net income
|
$
|
51,921
|
|
|
$
|
47,576
|
|
(1)
|
$
|
28,009
|
|
(1)
|
$
|
13,167
|
|
|
$
|
6,092
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.89
|
|
|
$
|
0.84
|
|
(1)
|
$
|
0.50
|
|
(1)
|
$
|
0.25
|
|
|
$
|
0.12
|
|
Diluted
|
$
|
0.85
|
|
|
$
|
0.80
|
|
(1)
|
$
|
0.49
|
|
(1)
|
$
|
0.23
|
|
|
$
|
0.11
|
|
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
58,125
|
|
|
56,473
|
|
|
55,492
|
|
|
53,717
|
|
|
52,561
|
|
|||||
Diluted
|
61,162
|
|
|
59,765
|
|
|
57,249
|
|
|
56,540
|
|
|
55,247
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of revenues
|
$
|
6,619
|
|
|
$
|
4,873
|
|
|
$
|
4,425
|
|
|
$
|
5,040
|
|
|
$
|
4,313
|
|
Research and development
|
11,993
|
|
|
13,314
|
|
|
9,223
|
|
|
7,907
|
|
|
4,085
|
|
|||||
Sales and marketing
|
12,568
|
|
|
6,833
|
|
|
7,074
|
|
|
9,171
|
|
|
7,450
|
|
|||||
General and administrative
|
29,958
|
|
|
22,793
|
|
|
20,436
|
|
|
26,869
|
|
|
22,105
|
|
|||||
Total stock-based compensation
|
$
|
61,138
|
|
|
$
|
47,813
|
|
|
$
|
41,158
|
|
|
$
|
48,987
|
|
|
$
|
37,953
|
|
Depreciation
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of revenues
|
$
|
18,938
|
|
|
$
|
10,149
|
|
|
$
|
6,341
|
|
|
$
|
5,585
|
|
|
$
|
5,275
|
|
Research and development
|
4,493
|
|
|
4,801
|
|
|
3,637
|
|
|
2,188
|
|
|
2,302
|
|
|||||
Sales and marketing
|
3,097
|
|
|
2,967
|
|
|
2,213
|
|
|
1,440
|
|
|
849
|
|
|||||
General and administrative
|
2,176
|
|
|
2,031
|
|
|
1,861
|
|
|
973
|
|
|
1,381
|
|
|||||
Total depreciation
|
$
|
28,704
|
|
|
$
|
19,948
|
|
|
$
|
14,052
|
|
|
$
|
10,186
|
|
|
$
|
9,807
|
|
Amortization of intangible assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of revenues
|
5,048
|
|
|
3,664
|
|
|
1,021
|
|
|
517
|
|
|
499
|
|
|||||
Sales and marketing
|
1,293
|
|
|
441
|
|
|
276
|
|
|
119
|
|
|
129
|
|
|||||
Total amortization of intangible assets
|
$
|
6,341
|
|
|
$
|
4,105
|
|
|
$
|
1,297
|
|
|
$
|
636
|
|
|
$
|
628
|
|
Total depreciation and amortization of intangible assets
|
$
|
35,045
|
|
|
$
|
24,053
|
|
|
$
|
15,349
|
|
|
$
|
10,822
|
|
|
$
|
10,435
|
|
|
December 31,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Cash and cash equivalents (4)
|
$
|
105,440
|
|
|
$
|
237,325
|
|
|
$
|
93,519
|
|
|
$
|
49,562
|
|
|
$
|
39,517
|
|
Total marketable securities (3)
|
135,105
|
|
|
426,008
|
|
|
421,703
|
|
|
429,167
|
|
|
417,126
|
|
|||||
Total current assets
|
462,485
|
|
|
641,017
|
|
(1)
|
516,267
|
|
(1)
|
383,201
|
|
|
357,852
|
|
|||||
Restricted cash (5)
|
7,205
|
|
|
5,518
|
|
|
5,760
|
|
|
5,755
|
|
|
5,118
|
|
|||||
Total assets
|
913,212
|
|
|
1,061,233
|
|
(1)
|
828,103
|
|
(1)
|
684,180
|
|
|
617,639
|
|
|||||
Total deferred revenue
|
78,306
|
|
|
82,631
|
|
(1)
|
75,850
|
|
(1)
|
78,575
|
|
|
64,264
|
|
|||||
Total capital lease obligations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46
|
|
|||||
Total long-term debt (3)(4)
|
88,366
|
|
|
92,841
|
|
|
263,401
|
|
|
249,487
|
|
|
236,308
|
|
|||||
Stockholders' equity (3)(6)
|
631,448
|
|
|
512,610
|
|
(1)
|
413,972
|
|
(1)
|
284,156
|
|
|
264,699
|
|
(1)
|
Figures have been recast to reflect our January 1, 2018 full retrospective adoption of Accounting Standards Codification ("ASC") 606.
|
(2)
|
Operating costs and expenses for the year ended December 31, 2017 include recognition of insurance recovery of amounts associated with an international wire transfer fraud committed against us, recognized during the year ended December 31, 2014. See
Note 2
, "Wire Transaction Recovery," to our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for more information.
|
(3)
|
In August 2013, we issued $287.5 million of 1.00% convertible senior notes which matured on August 1, 2018. In accounting for the issuance, we bifurcated the notes into liability and equity components. As of
December 31, 2017
, the liability portion was recorded, net of discount and unamortized debt issuance costs, in short-term liabilities on our consolidated balance sheets. As of
December 31, 2016
,
2015
, and
2014
the liability was recorded as long-term. Proceeds from this issuance were invested into high quality marketable securities. See
Note 10
, "Debt," to our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for further information.
|
(4)
|
In December 2017, we entered into a credit agreement consisting of revolving commitments with a maximum borrowing limit of $400.0 million and term loans in an aggregate principal amount of $100.0 million. Each of the term loans and the revolving commitments is scheduled to mature on December 21, 2022. The long-term debt balance as of
December 31, 2018
and
2017
in the accompanying balance sheets is presented net of unamortized deferred financing costs.
See
Note 10
, "Debt," to our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for further information.
|
(5)
|
Our restricted cash represents deposits made to fully collateralize certain standby letters of credit in connection with office lease arrangements.
|
(6)
|
During the third quarter of 2016, we early adopted Accounting Standards Update ("ASU") No. 2016-09,
Improvements to Employee Share-Based Payment Accounting
, a portion of which requires excess tax benefits and tax deficiencies on equity awards, which were formerly recognized in additional paid-in capital, to be recognized in the income statement when the awards vest or are settled; adoption of this portion of ASU No. 2016-09 resulted in a $50.6 million cumulative-effect adjustment to opening retained earnings as of January 1, 2016.
|
|
2018
|
|
Change
|
|
2017
|
|
Change
|
|
2016
|
||||||||
|
(amounts in thousands except percentages)
|
||||||||||||||||
Interest and other income (expense)
|
|
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(15,855
|
)
|
|
|
|
(17,765
|
)
|
|
|
|
(17,288
|
)
|
|||||
Interest income
|
7,435
|
|
|
|
|
5,717
|
|
|
|
|
4,382
|
|
|||||
Other income (expense), net
|
7,241
|
|
|
|
|
(73
|
)
|
|
|
|
11
|
|
|||||
Total interest and other expense, net
|
$
|
(1,179
|
)
|
|
(90.3
|
)%
|
|
$
|
(12,121
|
)
|
|
(6.0
|
)%
|
|
$
|
(12,895
|
)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Cash, cash equivalents, and marketable securities
|
$
|
240,545
|
|
|
$
|
663,333
|
|
|
$
|
515,222
|
|
Furniture, fixtures and equipment, net
|
$
|
98,983
|
|
|
$
|
88,091
|
|
|
$
|
58,461
|
|
1.00% convertible senior notes, net (including current maturities)
|
$
|
—
|
|
|
$
|
278,094
|
|
|
$
|
263,401
|
|
Term loan, net (including current maturities)
|
$
|
93,275
|
|
|
$
|
97,841
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||
Cash provided by operating activities
|
$
|
89,176
|
|
|
$
|
121,746
|
|
|
$
|
88,769
|
|
Cash provided by (used in) investing activities
|
$
|
72,077
|
|
|
$
|
(78,030
|
)
|
|
$
|
(41,407
|
)
|
Cash (used in) provided by financing activities
|
$
|
(290,419
|
)
|
|
$
|
99,089
|
|
|
$
|
(3,311
|
)
|
•
|
identify the contract with a customer;
|
•
|
identify the performance obligations in the contract;
|
•
|
determine the transaction price;
|
•
|
allocate the transaction price to performance obligations in the contract; and
|
•
|
recognize revenue as the performance obligation is satisfied.
|
•
|
the expected volatility of our stock price and, in some cases when the market condition compares the performance of our stock with a stock market index, the expected volatility of that index;
|
•
|
the expected term; and
|
•
|
risk free interest rates.
|
|
Payments Due by Period
|
||||||||||||||||||
|
Total
|
|
2019
|
|
2020 - 2021
|
|
2022- 2023
|
|
2024 and later
|
||||||||||
Contractual Obligations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating lease obligations
|
132,339
|
|
|
17,982
|
|
|
38,490
|
|
|
36,645
|
|
|
39,222
|
|
|||||
Term loan
|
95,000
|
|
|
5,000
|
|
|
17,500
|
|
|
72,500
|
|
|
—
|
|
|||||
Interest payments on term loan
|
11,673
|
|
|
3,419
|
|
|
5,838
|
|
|
2,416
|
|
|
—
|
|
|||||
Unused fees on revolving commitments
|
2,480
|
|
|
620
|
|
|
1,240
|
|
|
620
|
|
|
—
|
|
|||||
Contingent consideration
|
1,110
|
|
|
1,110
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
242,602
|
|
|
$
|
28,131
|
|
|
$
|
63,068
|
|
|
$
|
112,181
|
|
|
$
|
39,222
|
|
|
2018
|
|
2017
|
|
2016
|
|||
Revenues
|
4.5
|
%
|
|
4.3
|
%
|
|
4.9
|
%
|
Costs and expenses
|
17.3
|
%
|
|
19.5
|
%
|
|
17.4
|
%
|
|
Page
|
|
|
December 31,
|
|
|||||||
|
2018
|
|
2017
|
|
|||||
|
(Amounts in thousands, except per share data)
|
|
|||||||
ASSETS
|
|
|
|
|
|||||
Current assets:
|
|
|
|
|
|||||
Cash and cash equivalents
|
$
|
105,440
|
|
|
$
|
237,325
|
|
|
|
Marketable securities
|
135,105
|
|
|
246,967
|
|
|
|||
Accounts receivable, net of allowance for doubtful accounts of $1,999 and $1,454, respectively (1)
|
170,744
|
|
|
110,685
|
|
|
|||
Prepaid commission expense
|
22,247
|
|
|
12,404
|
|
(2
|
)
|
||
Prepaid expenses and other current assets
|
28,949
|
|
|
33,636
|
|
(2
|
)
|
||
Total current assets
|
462,485
|
|
|
641,017
|
|
|
|||
Restricted cash
|
7,205
|
|
|
5,518
|
|
|
|||
Furniture, fixtures and equipment, net
|
98,983
|
|
|
88,091
|
|
|
|||
Marketable securities, long-term
|
—
|
|
|
179,041
|
|
|
|||
Goodwill
|
216,017
|
|
|
47,435
|
|
|
|||
Intangible assets, net
|
29,546
|
|
|
17,587
|
|
|
|||
Deferred income taxes
|
45,982
|
|
|
35,789
|
|
(2
|
)
|
||
Other assets
|
52,994
|
|
|
46,755
|
|
(2
|
)
|
||
Total assets
|
$
|
913,212
|
|
|
$
|
1,061,233
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|||||
Current liabilities:
|
|
|
|
|
|||||
Accounts payable
|
$
|
7,482
|
|
|
$
|
5,009
|
|
|
|
Accrued payroll and other compensation
|
51,270
|
|
|
32,537
|
|
|
|||
Accrued expenses and other
|
37,487
|
|
|
36,041
|
|
|
|||
Deferred revenue
|
74,463
|
|
|
77,375
|
|
(2
|
)
|
||
1.00% convertible senior notes, net
|
—
|
|
|
278,094
|
|
|
|||
Total current liabilities
|
170,702
|
|
|
429,056
|
|
|
|||
Noncurrent liabilities:
|
|
|
|
|
|||||
Term loan, net
|
88,366
|
|
|
92,841
|
|
|
|||
Deferred revenue, less current portion
|
3,843
|
|
|
5,256
|
|
|
|||
Deferred tax liabilities
|
99
|
|
|
99
|
|
|
|||
Other long-term liabilities
|
18,754
|
|
|
21,371
|
|
|
|||
Total noncurrent liabilities
|
111,062
|
|
|
119,567
|
|
|
|||
Total liabilities
|
281,764
|
|
|
548,623
|
|
|
|||
Commitments and contingencies
|
|
|
|
|
|||||
Stockholders' equity:
|
|
|
|
|
|||||
Preferred stock, par value $0.01 per share; 5,000 shares authorized, none issued and outstanding
|
—
|
|
|
—
|
|
|
|||
Common stock, par value $0.01 per share; 200,000 shares authorized; 66,103 and 62,801 shares issued; 61,348 and 58,607 shares outstanding, respectively
|
661
|
|
|
628
|
|
|
|||
Additional paid-in capital
|
574,667
|
|
|
486,147
|
|
|
|||
Treasury stock, 4,755 and 4,194 shares, respectively
|
(152,849
|
)
|
|
(132,705
|
)
|
|
|||
Accumulated other comprehensive loss
|
(4,869
|
)
|
|
(3,377
|
)
|
|
|||
Retained earnings
|
213,838
|
|
|
161,917
|
|
(2)
|
|||
Total stockholders' equity
|
631,448
|
|
|
512,610
|
|
|
|||
Total liabilities and stockholders' equity
|
$
|
913,212
|
|
|
$
|
1,061,233
|
|
|
|
(1) Unbilled receivables of $38,601 and $12,488, respectively, are included in accounts receivable as of December 31, 2018 and 2017.
|
|||||||||
(2) The consolidated balance sheet as of December 31, 2017 has been recast to reflect the Company's January 1, 2018 full retrospective adoption of Accounting Standards Codification ("ASC") 606. For additional details, see
Note 1
, "Summary of Significant Accounting Policies — Recently Adopted Accounting Pronouncements."
|
|
Year Ended December 31,
|
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
|
||||||
|
(Amounts in thousands, except per share data)
|
|
||||||||||
Revenues
|
|
|
|
|
|
|
||||||
Subscription
|
$
|
535,672
|
|
|
$
|
457,824
|
|
(4)
|
$
|
388,997
|
|
(4)
|
Professional services
|
100,024
|
|
|
86,381
|
|
(4)
|
69,496
|
|
(4)
|
|||
Total revenues
|
635,696
|
|
|
544,205
|
|
|
458,493
|
|
|
|||
Cost of revenues (1)(2)
|
|
|
|
|
|
|
||||||
Subscription
|
91,087
|
|
|
69,235
|
|
|
62,136
|
|
|
|||
Professional services
|
68,072
|
|
|
57,558
|
|
|
50,473
|
|
|
|||
Total cost of revenues
|
159,159
|
|
|
126,793
|
|
|
112,609
|
|
|
|||
Gross profit
|
476,537
|
|
|
417,412
|
|
|
345,884
|
|
|
|||
Operating costs and expenses
|
|
|
|
|
|
|
||||||
Research and development (1)
|
162,788
|
|
|
138,564
|
|
|
112,595
|
|
|
|||
Sales and marketing (1)(2)
|
151,943
|
|
|
124,138
|
|
(4)
|
105,925
|
|
(4)
|
|||
General and administrative (1)
|
110,489
|
|
|
94,324
|
|
|
78,678
|
|
|
|||
Wire transaction recovery (3)
|
—
|
|
|
(4,770
|
)
|
|
—
|
|
|
|||
Total operating costs and expenses
|
425,220
|
|
|
352,256
|
|
|
297,198
|
|
|
|||
Operating income
|
51,317
|
|
|
65,156
|
|
|
48,686
|
|
|
|||
Interest and other income (expense)
|
|
|
|
|
|
|
||||||
Interest expense
|
(15,855
|
)
|
|
(17,765
|
)
|
|
(17,288
|
)
|
|
|||
Interest income
|
7,435
|
|
|
5,717
|
|
|
4,382
|
|
|
|||
Other income (expense), net
|
7,241
|
|
|
(73
|
)
|
|
11
|
|
|
|||
Total interest and other expense, net
|
(1,179
|
)
|
|
(12,121
|
)
|
|
(12,895
|
)
|
|
|||
Income before income taxes
|
50,138
|
|
|
53,035
|
|
|
35,791
|
|
|
|||
Provision for income taxes
|
(1,783
|
)
|
|
5,459
|
|
(4)
|
7,782
|
|
(4)
|
|||
Net income
|
$
|
51,921
|
|
|
$
|
47,576
|
|
(4)
|
$
|
28,009
|
|
(4)
|
Earnings per share
|
|
|
|
|
|
|
||||||
Basic
|
|
$0.89
|
|
|
|
$0.84
|
|
(4)
|
|
$0.50
|
|
(4)
|
Diluted
|
|
$0.85
|
|
|
|
$0.80
|
|
(4)
|
|
$0.49
|
|
(4)
|
Weighted-average common shares outstanding
|
|
|
|
|
|
|
||||||
Basic
|
58,125
|
|
|
56,473
|
|
|
55,492
|
|
|
|||
Diluted
|
61,162
|
|
|
59,765
|
|
|
57,249
|
|
|
|||
(1) Stock-based compensation expense included in cost of revenues and operating costs and expenses is as follows:
|
||||||||||||
Cost of revenues
|
$
|
6,619
|
|
|
$
|
4,873
|
|
|
$
|
4,425
|
|
|
Research and development
|
11,993
|
|
|
13,314
|
|
|
9,223
|
|
|
|||
Sales and marketing
|
12,568
|
|
|
6,833
|
|
|
7,074
|
|
|
|||
General and administrative
|
29,958
|
|
|
22,793
|
|
|
20,436
|
|
|
|||
Total stock-based compensation
|
$
|
61,138
|
|
|
$
|
47,813
|
|
|
$
|
41,158
|
|
|
(2) Amortization of intangible assets included in cost of revenues and operating costs and expenses is as follows:
|
||||||||||||
Cost of revenues
|
$
|
5,048
|
|
|
$
|
3,664
|
|
|
$
|
1,021
|
|
|
Sales and marketing
|
1,293
|
|
|
441
|
|
|
276
|
|
|
|||
Total amortization of intangible assets
|
$
|
6,341
|
|
|
$
|
4,105
|
|
|
$
|
1,297
|
|
|
(3) Operating costs and expenses for the year ended December 31, 2017 include recognition of insurance recovery of amounts associated with the previously recognized 2014 wire transaction loss. For additional details, see
Note 2
, "Wire Transaction Recovery."
|
||||||||||||
(4) The consolidated statements of operations for the years ended December 31, 2017 and 2016 have been recast to reflect the Company's January 1, 2018 full retrospective adoption of ASC 606. For additional details, see
Note 1
, "Summary of Significant Accounting Policies — Recently Adopted Accounting Pronouncements."
|
|
Year Ended December 31,
|
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
|
||||||
|
(Amounts in thousands)
|
|
||||||||||
Net income
|
$
|
51,921
|
|
|
$
|
47,576
|
|
(1)
|
$
|
28,009
|
|
(1)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
(1,796
|
)
|
|
2,270
|
|
|
(2,324
|
)
|
|
|||
Unrealized gain (loss) on marketable securities
|
659
|
|
|
(601
|
)
|
|
728
|
|
|
|||
Other comprehensive (loss) income
|
(1,137
|
)
|
|
1,669
|
|
|
(1,596
|
)
|
|
|||
Income tax related to unrealized gain or loss on marketable securities
|
(355
|
)
|
|
230
|
|
|
(276
|
)
|
|
|||
Other comprehensive (loss) income, net of tax
|
(1,492
|
)
|
|
1,899
|
|
|
(1,872
|
)
|
|
|||
Comprehensive income, net of tax
|
$
|
50,429
|
|
|
$
|
49,475
|
|
(1)
|
$
|
26,137
|
|
(1)
|
(1) The consolidated statements of comprehensive income for the years ended December 31, 2017 and 2016 have been recast to reflect the Company's January 1, 2018 full retrospective adoption of ASC 606.
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Treasury Stock
|
|
Accumulated Other
Comprehensive Loss
|
|
Retained Earnings (1)
|
|
Total
|
||||||||||||||||||
(amounts in thousands)
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|||||||||||||||||||||
Balance—December 31, 2015
|
59,455
|
|
|
$
|
594
|
|
|
$
|
364,973
|
|
|
3,144
|
|
|
$
|
(100,806
|
)
|
|
$
|
(3,404
|
)
|
|
$
|
73,376
|
|
|
$
|
334,733
|
|
Opening retained earnings adjustment for cumulative effect of full retrospective adoption of ASC 606 (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,956
|
|
|
$
|
12,956
|
|
|||||
Adjusted Balance—January 1, 2016
|
59,455
|
|
|
594
|
|
|
364,973
|
|
|
3,144
|
|
|
(100,806
|
)
|
|
(3,404
|
)
|
|
86,332
|
|
|
347,689
|
|
||||||
Net income (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28,009
|
|
|
28,009
|
|
||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,872
|
)
|
|
—
|
|
|
(1,872
|
)
|
||||||
Total comprehensive income (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,872
|
)
|
|
28,009
|
|
|
26,137
|
|
||||||
Stock options exercised
|
279
|
|
|
3
|
|
|
5,492
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,495
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
41,194
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41,194
|
|
||||||
Nonvested restricted stock awards granted
|
1,183
|
|
|
12
|
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Acquisition of treasury stock
|
—
|
|
|
—
|
|
|
—
|
|
|
360
|
|
|
(13,396
|
)
|
|
—
|
|
|
—
|
|
|
(13,396
|
)
|
||||||
Nonvested restricted stock awards forfeited
|
—
|
|
|
—
|
|
|
2
|
|
|
156
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Vesting of performance-based restricted stock units
|
302
|
|
|
3
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of employee stock purchase plan shares
|
174
|
|
|
2
|
|
|
6,851
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,853
|
|
||||||
Balance—December 31, 2016
|
61,393
|
|
|
614
|
|
|
418,497
|
|
|
3,660
|
|
|
(114,204
|
)
|
|
(5,276
|
)
|
|
114,341
|
|
|
413,972
|
|
||||||
Net income (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47,576
|
|
|
47,576
|
|
||||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,899
|
|
|
—
|
|
|
1,899
|
|
||||||
Total comprehensive income (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,899
|
|
|
47,576
|
|
|
49,475
|
|
||||||
Stock options exercised
|
310
|
|
|
3
|
|
|
10,204
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,207
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
48,182
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48,182
|
|
||||||
Nonvested restricted stock awards granted
|
780
|
|
|
8
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Acquisition of treasury stock
|
—
|
|
|
—
|
|
|
—
|
|
|
309
|
|
|
(18,499
|
)
|
|
—
|
|
|
—
|
|
|
(18,499
|
)
|
||||||
Nonvested restricted stock awards forfeited
|
—
|
|
|
—
|
|
|
2
|
|
|
225
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Vesting of restricted stock units and performance-based restricted stock units
|
95
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of employee stock purchase plan shares
|
223
|
|
|
2
|
|
|
9,271
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,273
|
|
||||||
Balance—December 31, 2017
|
62,801
|
|
|
628
|
|
|
486,147
|
|
|
4,194
|
|
|
(132,705
|
)
|
|
(3,377
|
)
|
|
161,917
|
|
|
512,610
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51,921
|
|
|
51,921
|
|
||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,492
|
)
|
|
—
|
|
|
(1,492
|
)
|
||||||
Total comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,492
|
)
|
|
51,921
|
|
|
50,429
|
|
||||||
Stock options exercised
|
424
|
|
|
4
|
|
|
14,459
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,463
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
61,452
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
61,452
|
|
||||||
Nonvested restricted stock awards granted
|
1,051
|
|
|
11
|
|
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Acquisition of treasury stock
|
—
|
|
|
—
|
|
|
—
|
|
|
296
|
|
|
(20,141
|
)
|
|
—
|
|
|
—
|
|
|
(20,141
|
)
|
||||||
Nonvested restricted stock awards forfeited
|
—
|
|
|
—
|
|
|
3
|
|
|
265
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Vesting of restricted stock units and performance-based restricted stock units
|
124
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of employee stock purchase plan shares
|
263
|
|
|
3
|
|
|
12,632
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,635
|
|
||||||
Issuance of shares to settle premium on convertible notes
|
1,440
|
|
|
14
|
|
|
(14
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Balance—December 31, 2018
|
66,103
|
|
|
$
|
661
|
|
|
$
|
574,667
|
|
|
4,755
|
|
|
$
|
(152,849
|
)
|
|
$
|
(4,869
|
)
|
|
$
|
213,838
|
|
|
$
|
631,448
|
|
(1) Figures as of and for the years ended December 31, 2017 and 2016 have been recast to reflect the Company's January 1, 2018 full retrospective adoption of ASC 606.
|
|
Year Ended December 31,
|
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
|
||||||
Cash flows from operating activities:
|
(Amounts in thousands)
|
|
||||||||||
Net income
|
$
|
51,921
|
|
|
$
|
47,576
|
|
(1)
|
$
|
28,009
|
|
(1)
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Amortization of intangible assets and depreciation
|
35,045
|
|
|
24,053
|
|
|
15,349
|
|
|
|||
Stock-based compensation
|
61,138
|
|
|
47,813
|
|
|
41,158
|
|
|
|||
Amortization of discounts or premiums on marketable securities
|
130
|
|
|
1,438
|
|
|
2,757
|
|
|
|||
Realized loss on available-for-sale marketable securities
|
375
|
|
|
—
|
|
|
—
|
|
|
|||
Deferred income taxes
|
(4,337
|
)
|
|
908
|
|
(1)
|
5,346
|
|
(1)
|
|||
Amortization of debt issuance costs
|
1,179
|
|
|
1,291
|
|
|
1,278
|
|
|
|||
Amortization of debt discount
|
8,661
|
|
|
13,415
|
|
|
12,636
|
|
|
|||
Provision for doubtful accounts
|
1,587
|
|
|
1,089
|
|
|
1,116
|
|
|
|||
Loss on fixed asset disposal
|
425
|
|
|
72
|
|
|
3
|
|
|
|||
Changes in fair value of contingent consideration
|
(331
|
)
|
|
319
|
|
|
—
|
|
|
|||
Gain recognized on step acquisition
|
(7,648
|
)
|
|
—
|
|
|
—
|
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
||||||
Accounts receivable
|
(61,646
|
)
|
|
4,043
|
|
|
(25,172
|
)
|
|
|||
Prepaid commission expense
|
(23,070
|
)
|
|
(12,129
|
)
|
(1)
|
(8,505
|
)
|
(1)
|
|||
Prepaid expenses and other current assets
|
5,625
|
|
|
(15,464
|
)
|
(1)
|
2,833
|
|
(1)
|
|||
Other assets
|
2,996
|
|
|
(1,270
|
)
|
|
(8,735
|
)
|
|
|||
Accounts payable
|
3,474
|
|
|
(3,014
|
)
|
|
2,825
|
|
|
|||
Accrued payroll and other compensation
|
18,854
|
|
|
2,089
|
|
|
7,343
|
|
|
|||
Accrued expenses and other
|
6,054
|
|
|
1,751
|
|
|
14,220
|
|
|
|||
Deferred revenue
|
(7,334
|
)
|
|
6,556
|
|
(1)
|
4,222
|
|
(1)
|
|||
Other long-term liabilities
|
(3,922
|
)
|
|
1,210
|
|
|
(7,914
|
)
|
|
|||
Net cash provided by operating activities
|
89,176
|
|
|
121,746
|
|
|
88,769
|
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
||||||
Purchase of furniture, fixtures and equipment
|
(40,083
|
)
|
|
(44,621
|
)
|
|
(25,656
|
)
|
|
|||
Purchase of available-for-sale securities
|
(69,214
|
)
|
|
(303,641
|
)
|
|
(266,361
|
)
|
|
|||
Proceeds from sale of available-for-sale securities
|
360,271
|
|
|
297,297
|
|
|
271,796
|
|
|
|||
Acquisition of businesses, net of cash acquired
|
(178,897
|
)
|
|
(22,941
|
)
|
|
(17,186
|
)
|
|
|||
Purchase of cost method investments
|
—
|
|
|
(4,124
|
)
|
|
(4,000
|
)
|
|
|||
Net cash provided by (used in) investing activities
|
72,077
|
|
|
(78,030
|
)
|
|
(41,407
|
)
|
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||
Proceeds from exercise of stock options
|
14,463
|
|
|
10,207
|
|
|
5,495
|
|
|
|||
Proceeds from employee stock purchase plan
|
12,506
|
|
|
9,378
|
|
|
6,864
|
|
|
|||
Repayment of notes payable
|
—
|
|
|
—
|
|
|
(100
|
)
|
|
|||
Acquisition of treasury stock
|
(20,141
|
)
|
|
(18,499
|
)
|
|
(15,570
|
)
|
|
|||
Term loan principal payments
|
(5,000
|
)
|
|
—
|
|
|
—
|
|
|
|||
Repayment of convertible notes
|
(287,500
|
)
|
|
—
|
|
|
—
|
|
|
|||
Borrowings under term loan facility
|
—
|
|
|
100,000
|
|
|
—
|
|
|
|||
Payment of credit facility financing costs
|
(175
|
)
|
|
(1,997
|
)
|
|
—
|
|
|
|||
Payment of acquisition-related earn-outs
|
(4,572
|
)
|
|
—
|
|
|
—
|
|
|
|||
Net cash (used in) provided by financing activities
|
(290,419
|
)
|
|
99,089
|
|
|
(3,311
|
)
|
|
|||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(1,032
|
)
|
|
759
|
|
|
(244
|
)
|
|
|||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
(130,198
|
)
|
|
143,564
|
|
|
43,807
|
|
|
|||
Cash, cash equivalents and restricted cash – Beginning of period
|
242,843
|
|
|
99,279
|
|
|
55,472
|
|
|
|||
Cash, cash equivalents and restricted cash – End of period
|
$
|
112,645
|
|
|
$
|
242,843
|
|
|
$
|
99,279
|
|
|
(1) The consolidated statement of cash flows for the years ended December 31, 2017 and 2016 have been recast to reflect the Company's January 1, 2018 full retrospective adoption of ASC 606.
|
|
Year Ended December 31,
|
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
|
||||||
Supplemental disclosures of cash flow information:
|
(Amounts in thousands)
|
|
||||||||||
Cash paid during the period for:
|
|
|
|
|
|
|
||||||
Interest
|
$
|
7,041
|
|
|
$
|
2,879
|
|
|
$
|
2,882
|
|
|
Income taxes
|
$
|
3,878
|
|
|
$
|
4,417
|
|
|
$
|
2,074
|
|
|
Noncash activities:
|
|
|
|
|
|
|
||||||
Furniture, fixtures and equipment acquired but not yet paid for at period end
|
$
|
3,984
|
|
|
$
|
4,356
|
|
|
$
|
1,152
|
|
|
Contingent consideration associated with acquisition of business, at fair value
|
$
|
—
|
|
|
$
|
5,697
|
|
|
$
|
—
|
|
|
•
|
identify the contract with a customer;
|
•
|
identify the performance obligations in the contract;
|
•
|
determine the transaction price;
|
•
|
allocate the transaction price to performance obligations in the contract; and
|
•
|
recognize revenue as the performance obligation is satisfied.
|
|
2018
|
|
2017
|
|
2016
|
||||||
Balance at beginning of period
|
$
|
1,454
|
|
|
$
|
1,041
|
|
|
$
|
1,992
|
|
Charged to costs and expenses
|
1,587
|
|
|
1,089
|
|
|
1,116
|
|
|||
Deductions
|
(1,042
|
)
|
|
(676
|
)
|
|
(2,067
|
)
|
|||
Balance at end of period
|
$
|
1,999
|
|
|
$
|
1,454
|
|
|
$
|
1,041
|
|
|
2018
|
|
2017
|
|
||||
Long-term assets:
|
|
|
|
|
||||
United States
|
$
|
428,862
|
|
|
$
|
394,527
|
|
(1)
|
United Kingdom
|
13,163
|
|
|
15,594
|
|
|
||
Japan
|
2,927
|
|
|
3,298
|
|
|
||
Korea
|
2,630
|
|
|
3,562
|
|
|
||
Germany
|
2,990
|
|
|
3,000
|
|
|
||
China
|
100
|
|
|
199
|
|
|
||
Singapore
|
55
|
|
|
36
|
|
|
||
Total
|
$
|
450,727
|
|
|
$
|
420,216
|
|
(1)
|
(1) Recast to reflect the Company's January 1, 2018 full retrospective adoption of ASC 606.
|
•
|
The first step is a comparison of the fair value of the Company's single reporting unit with its carrying amount, including goodwill. If the fair value the reporting unit exceeds its carrying value, goodwill is not considered to be impaired and the second step is unnecessary.
|
•
|
If the carrying value of the reporting unit exceeds its fair value, a second test is performed to measure the amount of impairment by comparing the carrying amount of the goodwill to a determination of the implied value of the goodwill. The implied value of goodwill is determined as of the test date by performing a purchase price allocation, as if the reporting unit had just been acquired, using currently estimated fair values of the individual assets and liabilities of the reporting unit, together with an estimate of the fair value of the reporting unit taken as a whole. The estimate of the fair value of the reporting unit is based upon information available regarding the Company's market capitalization, prices of similar groups of assets, or other valuation techniques including present value techniques based upon estimates of
|
•
|
quoted prices for similar assets or liabilities in active markets;
|
•
|
quoted prices for identical or similar assets or liabilities in markets that are not active;
|
•
|
inputs other than quoted prices that are observable for the asset or liability; and
|
•
|
inputs that are derived principally from or corroborated by observable market data by correlation or other means.
|
|
As of December 31, 2017
|
||||||||||
|
As Reported Under ASC 605
|
|
Impact of ASC 606 Adoption
|
|
As Adjusted
|
||||||
Assets
|
|
|
|
|
|
||||||
Current assets:
|
|
|
|
|
|
||||||
Prepaid commission expense
|
$
|
5,352
|
|
|
$
|
7,052
|
|
|
$
|
12,404
|
|
Prepaid expenses and other current assets
|
37,287
|
|
|
(3,651
|
)
|
|
33,636
|
|
|||
Noncurrent assets
|
|
|
|
|
|
||||||
Deferred income taxes – long-term
|
40,847
|
|
|
(5,058
|
)
|
|
35,789
|
|
|||
Other assets
|
29,979
|
|
|
16,776
|
|
|
46,755
|
|
|||
Liabilities
|
|
|
|
|
|
||||||
Current liabilities:
|
|
|
|
|
|
||||||
Deferred revenue
|
77,434
|
|
|
(59
|
)
|
|
77,375
|
|
|||
Stockholders' equity:
|
|
|
|
|
|
||||||
Retained earnings
|
$
|
146,739
|
|
|
$
|
15,178
|
|
|
$
|
161,917
|
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
||||||||||||||||||||
|
As Reported Under ASC 605
|
|
Impact of ASC 606 Adoption
|
|
As Adjusted
|
|
As Reported Under ASC 605
|
|
Impact of ASC 606 Adoption
|
|
As Adjusted
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Subscription
|
$
|
459,528
|
|
|
$
|
(1,704
|
)
|
|
$
|
457,824
|
|
|
$
|
394,269
|
|
|
$
|
(5,272
|
)
|
|
$
|
388,997
|
|
Professional services
|
86,004
|
|
|
377
|
|
|
86,381
|
|
|
69,112
|
|
|
384
|
|
|
69,496
|
|
||||||
Total revenues
|
545,532
|
|
|
(1,327
|
)
|
|
544,205
|
|
|
463,381
|
|
|
(4,888
|
)
|
|
458,493
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Sales and marketing
|
126,273
|
|
|
(2,135
|
)
|
|
124,138
|
|
|
109,290
|
|
|
(3,365
|
)
|
|
105,925
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating income
|
64,348
|
|
|
808
|
|
|
65,156
|
|
|
50,209
|
|
|
(1,523
|
)
|
|
48,686
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Provision for income taxes
|
7,847
|
|
|
(2,388
|
)
|
|
5,459
|
|
|
8,331
|
|
|
(549
|
)
|
|
7,782
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income
|
$
|
44,380
|
|
|
$
|
3,196
|
|
|
$
|
47,576
|
|
|
$
|
28,983
|
|
|
$
|
(974
|
)
|
|
$
|
28,009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
$
|
0.79
|
|
|
$
|
0.05
|
|
|
$
|
0.84
|
|
|
$
|
0.52
|
|
|
$
|
(0.02
|
)
|
|
$
|
0.50
|
|
Diluted
|
$
|
0.74
|
|
|
$
|
0.06
|
|
|
$
|
0.80
|
|
|
$
|
0.51
|
|
|
$
|
(0.02
|
)
|
|
$
|
0.49
|
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||||||||||||||
|
Subscription
|
|
Professional Services
|
|
Total
|
|
Subscription
|
|
Professional Services
|
|
Total
|
|
Subscription
|
|
Professional Services
|
|
Total
|
||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
United States
|
$
|
406,413
|
|
|
$
|
69,869
|
|
|
$
|
476,282
|
|
|
$
|
350,170
|
|
|
$
|
61,734
|
|
|
$
|
411,904
|
|
|
$
|
302,767
|
|
|
$
|
51,160
|
|
|
$
|
353,927
|
|
Rest of Americas
|
6,765
|
|
|
1,622
|
|
|
8,387
|
|
|
442
|
|
|
692
|
|
|
1,134
|
|
|
115
|
|
|
230
|
|
|
345
|
|
|||||||||
Total Americas
|
413,178
|
|
|
71,491
|
|
|
484,669
|
|
|
350,612
|
|
|
62,426
|
|
|
413,038
|
|
|
302,882
|
|
|
51,390
|
|
|
354,272
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Japan
|
31,307
|
|
|
6,858
|
|
|
38,165
|
|
|
30,248
|
|
|
5,841
|
|
|
36,089
|
|
|
26,677
|
|
|
5,372
|
|
|
32,049
|
|
|||||||||
Rest of Asia Pacific
|
17,375
|
|
|
5,820
|
|
|
23,195
|
|
|
11,504
|
|
|
4,693
|
|
|
16,197
|
|
|
7,106
|
|
|
2,879
|
|
|
9,985
|
|
|||||||||
Total Asia Pacific
|
48,682
|
|
|
12,678
|
|
|
61,360
|
|
|
41,752
|
|
|
10,534
|
|
|
52,286
|
|
|
33,783
|
|
|
8,251
|
|
|
42,034
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Europe, Middle East and Africa
|
73,812
|
|
|
15,855
|
|
|
89,667
|
|
|
65,460
|
|
|
13,421
|
|
|
78,881
|
|
|
52,332
|
|
|
9,855
|
|
|
62,187
|
|
|||||||||
Total
|
$
|
535,672
|
|
|
$
|
100,024
|
|
|
$
|
635,696
|
|
|
$
|
457,824
|
|
|
$
|
86,381
|
|
|
$
|
544,205
|
|
|
$
|
388,997
|
|
|
$
|
69,496
|
|
|
$
|
458,493
|
|
|
Deferred Revenue
|
||||||
|
2018
|
|
2017
|
||||
Balance as of January 1
|
$
|
82,631
|
|
|
$
|
75,850
|
|
Revenue recognized that was included in deferred revenue at the beginning of the period
|
(75,385
|
)
|
|
(69,296
|
)
|
||
Revenue recognized that was not included in deferred revenue at the beginning of the period
|
(558,951
|
)
|
|
(473,399
|
)
|
||
Increases due to invoicing
|
603,750
|
|
|
556,812
|
|
||
Revenue recognized in excess of billings (billings in excess of revenue recognized)
|
26,246
|
|
|
(1,540
|
)
|
||
Other
|
15
|
|
|
(5,796
|
)
|
||
Balance as of December 31
|
$
|
78,306
|
|
|
$
|
82,631
|
|
|
As of December 31, 2018
|
||||||||||||||
|
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
||||||||
Commercial paper and corporate bonds
|
$
|
125,245
|
|
|
$
|
—
|
|
|
$
|
(747
|
)
|
|
$
|
124,498
|
|
U.S. government agency debt securities
|
10,690
|
|
|
—
|
|
|
(83
|
)
|
|
10,607
|
|
||||
Total
|
$
|
135,935
|
|
|
$
|
—
|
|
|
$
|
(830
|
)
|
|
$
|
135,105
|
|
|
As of December 31, 2017
|
||||||||||||||
|
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
||||||||
Commercial paper and corporate bonds
|
$
|
392,481
|
|
|
$
|
—
|
|
|
$
|
(1,334
|
)
|
|
$
|
391,147
|
|
U.S. government agency debt securities
|
35,016
|
|
|
—
|
|
|
(155
|
)
|
|
34,861
|
|
||||
Total
|
$
|
427,497
|
|
|
$
|
—
|
|
|
$
|
(1,489
|
)
|
|
$
|
426,008
|
|
|
As of December 31, 2018
|
|
As of December 31, 2017
|
||||||||||||
|
Cost
|
|
Estimated Fair Value
|
|
Cost
|
|
Estimated Fair Value
|
||||||||
Due in one year or less
|
$
|
135,935
|
|
|
$
|
135,105
|
|
|
$
|
247,495
|
|
|
$
|
246,967
|
|
Due in one to five years
|
—
|
|
|
—
|
|
|
180,002
|
|
|
179,041
|
|
||||
Total
|
$
|
135,935
|
|
|
$
|
135,105
|
|
|
$
|
427,497
|
|
|
$
|
426,008
|
|
•
|
the length of time and extent to which fair value has been lower than the cost basis;
|
•
|
the financial condition, credit quality and near-term prospects of the investee; and
|
•
|
whether it is more likely than not that the Company will be required to sell the security prior to recovery.
|
|
In Loss Position for Less than 12 Months
|
||||||||||||||
|
As of December 31, 2018
|
|
As of December 31, 2017
|
||||||||||||
|
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
|
Gross
Unrealized
Losses
|
||||||||
Commercial paper and corporate bonds
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
295,224
|
|
|
$
|
(1,137
|
)
|
U.S. government agency debt securities
|
—
|
|
|
—
|
|
|
18,431
|
|
|
(86
|
)
|
||||
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
313,655
|
|
|
$
|
(1,223
|
)
|
|
In Loss Position for More than 12 Months
|
||||||||||||||
|
As of December 31, 2018
|
|
As of December 31, 2017
|
||||||||||||
|
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
|
Gross
Unrealized
Losses
|
||||||||
Commercial paper and corporate bonds
|
$
|
124,498
|
|
|
$
|
(747
|
)
|
|
$
|
95,923
|
|
|
$
|
(197
|
)
|
U.S. government agency debt securities
|
10,607
|
|
|
(83
|
)
|
|
16,430
|
|
|
(69
|
)
|
||||
Total
|
$
|
135,105
|
|
|
$
|
(830
|
)
|
|
$
|
112,353
|
|
|
$
|
(266
|
)
|
|
As of December 31, 2018
|
|
As of December 31, 2017
|
||||||||||||||||||||||||||||
|
Fair Value Measurement Using
|
|
Fair Value Measurement Using
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Cash
|
$
|
103,859
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
103,859
|
|
|
$
|
237,149
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
237,149
|
|
Money market funds
|
1,581
|
|
|
—
|
|
|
—
|
|
|
1,581
|
|
|
176
|
|
|
—
|
|
|
—
|
|
|
176
|
|
||||||||
Total cash and cash equivalents
|
105,440
|
|
|
—
|
|
|
—
|
|
|
105,440
|
|
|
237,325
|
|
|
—
|
|
|
—
|
|
|
237,325
|
|
||||||||
Commercial paper and corporate bonds
|
—
|
|
|
124,498
|
|
|
—
|
|
|
124,498
|
|
|
—
|
|
|
391,147
|
|
|
—
|
|
|
391,147
|
|
||||||||
U.S. government agency debt securities
|
—
|
|
|
10,607
|
|
|
—
|
|
|
10,607
|
|
|
—
|
|
|
34,861
|
|
|
—
|
|
|
34,861
|
|
||||||||
Total marketable securities
|
—
|
|
|
135,105
|
|
|
—
|
|
|
135,105
|
|
|
—
|
|
|
426,008
|
|
|
—
|
|
|
426,008
|
|
||||||||
Total financial assets measured at fair value on a recurring basis
|
$
|
105,440
|
|
|
$
|
135,105
|
|
|
$
|
—
|
|
|
$
|
240,545
|
|
|
$
|
237,325
|
|
|
$
|
426,008
|
|
|
$
|
—
|
|
|
$
|
663,333
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Contingent consideration — short-term
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,110
|
|
|
$
|
1,110
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,993
|
|
|
$
|
3,993
|
|
Contingent consideration — long-term
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,012
|
|
|
2,012
|
|
||||||||
Total financial liabilities measured at fair value on a recurring basis
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,110
|
|
|
$
|
1,110
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,005
|
|
|
$
|
6,005
|
|
Balance as of January 1, 2017
|
$
|
—
|
|
Contingent consideration — acquisition
|
5,697
|
|
|
Amounts earned by sellers
|
(11
|
)
|
|
Fair value adjustments (included in general and administrative expenses)
|
319
|
|
|
Balance as of December 31, 2017
|
6,005
|
|
|
Amounts earned by sellers
|
(4,564
|
)
|
|
Fair value adjustments (included in general and administrative expenses)
|
(331
|
)
|
|
Balance as of December 31, 2018
|
$
|
1,110
|
|
Balance as of January 1, 2017
|
$
|
30,780
|
|
Additions related to acquisitions - CHITA and Mytrus
|
16,296
|
|
|
Foreign currency translation adjustments
|
359
|
|
|
Balance as of December 31, 2017
|
47,435
|
|
|
Additions related to acquisition - SHYFT
|
169,240
|
|
|
Final purchase price adjustment - Mytrus
|
(422
|
)
|
|
Foreign currency translation adjustments
|
(236
|
)
|
|
Balance as of December 31, 2018
|
$
|
216,017
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
||||||||
|
Acquisition-Date
Fair Value |
|
Weighted-Average Useful Life
|
|
Acquisition-Date
Fair Value |
|
Weighted-Average Useful Life
|
||||
Developed technology
|
$
|
7,000
|
|
|
5 years
|
|
$
|
15,602
|
|
|
5 years
|
Customer relationships
|
4,700
|
|
|
6 years
|
|
890
|
|
|
6 years
|
||
Non-competition agreements
|
1,200
|
|
|
3 years
|
|
110
|
|
|
3.5 years
|
||
Trade name
|
5,400
|
|
|
15 years
|
|
—
|
|
|
N/A
|
||
Total
|
$
|
18,300
|
|
|
|
|
$
|
16,602
|
|
|
|
|
As of December 31, 2018
|
|
As of December 31, 2017
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||
Developed technology
|
$
|
31,358
|
|
|
$
|
(13,852
|
)
|
|
$
|
17,506
|
|
|
$
|
24,436
|
|
|
$
|
(8,883
|
)
|
|
$
|
15,553
|
|
Customer relationships
|
9,167
|
|
|
(3,404
|
)
|
|
5,763
|
|
|
4,489
|
|
|
(2,595
|
)
|
|
1,894
|
|
||||||
Non-competition agreements
|
1,460
|
|
|
(393
|
)
|
|
1,067
|
|
|
260
|
|
|
(120
|
)
|
|
140
|
|
||||||
Trade name
|
5,400
|
|
|
(190
|
)
|
|
5,210
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
47,385
|
|
|
$
|
(17,839
|
)
|
|
$
|
29,546
|
|
|
$
|
29,185
|
|
|
$
|
(11,598
|
)
|
|
$
|
17,587
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Computer hardware and office equipment
|
$
|
64,896
|
|
|
$
|
52,937
|
|
Computer software
|
49,203
|
|
|
27,350
|
|
||
Leasehold improvements
|
53,440
|
|
|
53,712
|
|
||
Furniture and fixtures
|
13,433
|
|
|
12,242
|
|
||
Construction in progress
|
8,390
|
|
|
4,447
|
|
||
Total furniture, fixtures and equipment
|
189,362
|
|
|
150,688
|
|
||
Less: accumulated depreciation and amortization
|
(90,379
|
)
|
|
(62,597
|
)
|
||
Furniture, fixtures and equipment, net
|
$
|
98,983
|
|
|
$
|
88,091
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Equity component, net of equity issue costs
|
$
|
—
|
|
|
$
|
60,222
|
|
Liability component:
|
|
|
|
||||
Principal
|
—
|
|
|
287,500
|
|
||
Less: unamortized debt discount
|
—
|
|
|
(8,661
|
)
|
||
Less: unamortized debt issuance costs
|
—
|
|
|
(745
|
)
|
||
Net carrying amount
|
$
|
—
|
|
|
$
|
278,094
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Contractual interest expense
|
$
|
1,648
|
|
|
$
|
2,875
|
|
|
$
|
2,875
|
|
Amortization of debt issuance costs
|
745
|
|
|
1,278
|
|
|
1,278
|
|
|||
Amortization of debt discount
|
8,661
|
|
|
13,415
|
|
|
12,636
|
|
|||
Total
|
$
|
11,054
|
|
|
$
|
17,568
|
|
|
$
|
16,789
|
|
|
|
|
|
|
|
||||||
Effective interest rate
|
6.5
|
%
|
|
6.5
|
%
|
|
6.5
|
%
|
a.
|
the Administrative Agent's prime rate
|
b.
|
the federal funds effective rate published by the Federal Reserve Bank of New York plus 0.5%
|
c.
|
an adjusted London Interbank Offered ("LIBO") rate for a one-month interested period plus 1.0%
|
d.
|
1.0%; and
|
Total Net Leverage Ratio
|
Base Rate Margin - Term Loans and Revolving Commitments
|
Eurodollar Margin - Term Loans and Revolving Commitments
|
Commitment Fee Rate
|
Greater than or equal to 3.00 : 1.00
|
0.750%
|
1.750%
|
0.250%
|
Greater than or equal to 2.25 : 1.00 but less than 3.00 : 1.00
|
0.500%
|
1.500%
|
0.225%
|
Greater than or equal to 1.50 : 1.00 but less than 2.25 : 1.00
|
0.375%
|
1.375%
|
0.200%
|
Greater than or equal to 0.75 : 1.00 but less than 1.50 : 1.00
|
0.250%
|
1.250%
|
0.175%
|
Less than 0.75 : 1.00
|
0.125%
|
1.125%
|
0.150%
|
1.
|
an interest coverage ratio of 3.50 to 1.00 or greater; and
|
a.
|
not greater than 3.50 to 1.00 through 2019
|
b.
|
not greater than 3.25 to 1.00 in 2020; and
|
c.
|
not greater than 3.00 to 1.00 thereafter.
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
Term Loans
|
$
|
95,000
|
|
|
$
|
100,000
|
|
Less: unamortized debt issuance costs
|
(1,725
|
)
|
|
(2,159
|
)
|
||
Net carrying amount (1)
|
$
|
93,275
|
|
|
$
|
97,841
|
|
(1) Of the total carrying amount of the Term Loans, net short-term maturities of $4.9 million and $5.0 million were included in accrued expenses and other on the Company's consolidated balance sheets as of December 31, 2018 and December 31, 2017, respectively.
|
|
December 31, 2018
|
||
Contractual interest expense on Term Loans
|
$
|
3,357
|
|
Amortization of debt issuance costs
|
434
|
|
|
Unused commitment fee on Revolver
|
795
|
|
|
Total
|
$
|
4,586
|
|
Years Ending December 31,
|
|
||
2019
|
$
|
17,982
|
|
2020
|
19,390
|
|
|
2021
|
19,100
|
|
|
2022
|
18,757
|
|
|
2023
|
17,888
|
|
|
Thereafter
|
39,222
|
|
|
Total minimum lease payments
|
$
|
132,339
|
|
|
2018
|
|
2017
|
|
2016
|
|||
Expected volatility
|
42
|
%
|
|
43
|
%
|
|
44
|
%
|
Expected life
|
4.8 years
|
|
|
6.0 years
|
|
|
6.0 years
|
|
Risk-free interest rate
|
2.82
|
%
|
|
2.09
|
%
|
|
1.42
|
%
|
Dividend yield
|
—
|
|
|
—
|
|
|
—
|
|
|
Number of
Shares
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual
Term
(years)
|
|
Aggregate
Intrinsic
Value
|
|||||
Outstanding at January 1, 2018
|
1,511
|
|
|
|
$22.72
|
|
|
|
|
|
||
Granted
|
35
|
|
|
72.27
|
|
|
|
|
|
|||
Exercised
|
(424
|
)
|
|
34.08
|
|
|
|
|
|
|||
Forfeited
|
(34
|
)
|
|
45.55
|
|
|
|
|
|
|||
Expired
|
—
|
|
|
—
|
|
|
|
|
|
|||
Outstanding at December 31, 2018
|
1,088
|
|
|
|
$19.17
|
|
|
3.01
|
|
|
$52,846
|
|
Exercisable at December 31, 2018
|
958
|
|
|
|
$13.77
|
|
|
2.32
|
|
|
$51,468
|
|
Vested and expected to vest at December 31, 2018
|
1,080
|
|
|
|
$18.83
|
|
|
2.98
|
|
|
$52,789
|
|
|
Number of
Shares
|
|
Weighted-
Average
Grant-Date
Fair Value
|
|||
Nonvested at January 1, 2018
|
1,754
|
|
|
|
$48.45
|
|
Granted
|
1,071
|
|
|
72.90
|
|
|
Vested
|
(622
|
)
|
|
47.80
|
|
|
Forfeited
|
(267
|
)
|
|
53.78
|
|
|
Nonvested at December 31, 2018
|
1,936
|
|
|
|
$61.45
|
|
|
2018 TSR
PBRSUs
|
|
2017 TSR
PBRSUs |
|
2016 TSR
PBRSUs
|
|||
Expected volatility - Medidata
|
37
|
%
|
|
42
|
%
|
|
48
|
%
|
Expected volatility - comparison index
|
42
|
%
|
|
43
|
%
|
|
43
|
%
|
Risk-free interest rate
|
2.37
|
%
|
|
1.40
|
%
|
|
0.91
|
%
|
Expected life
|
2.85 years
|
|
|
2.85 years
|
|
|
2.84 years
|
|
Dividend yield
|
—
|
|
|
—
|
|
|
—
|
|
|
Net Income
|
|
TSR
|
|
Other
|
|
Total Number of Shares
|
|
Weighted-
Average
Grant-Date
Fair Value
|
||||||
Nonvested at January 1, 2018
|
110
|
|
|
613
|
|
|
13
|
|
|
736
|
|
|
|
$62.96
|
|
Granted (based on performance at 100% of targeted levels)
|
122
|
|
|
122
|
|
|
5
|
|
|
249
|
|
|
85.86
|
|
|
Adjustment related to expected performance
|
(22
|
)
|
|
178
|
|
|
9
|
|
|
165
|
|
|
82.56
|
|
|
Vested
|
—
|
|
|
(120
|
)
|
|
(1
|
)
|
|
(121
|
)
|
|
70.00
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
|
77.64
|
|
|
Nonvested at December 31, 2018
|
210
|
|
|
793
|
|
|
23
|
|
|
1,026
|
|
|
|
$70.80
|
|
|
2018
|
|
2017
|
|
2016
|
|||
Expected volatility
|
35
|
%
|
|
39
|
%
|
|
42
|
%
|
Expected life
|
1.46 years
|
|
|
1.49 years
|
|
|
1.44 years
|
|
Risk-free interest rate
|
1.68
|
%
|
|
0.67
|
%
|
|
0.52
|
%
|
Dividend yield
|
—
|
|
|
—
|
|
|
—
|
|
|
Foreign currency translation adjustments
|
|
Unrealized gains (losses) on marketable securities
|
|
Total
|
||||||
Balance as of January 1, 2017
|
$
|
(4,729
|
)
|
|
$
|
(547
|
)
|
|
$
|
(5,276
|
)
|
Other comprehensive income (loss)
|
2,270
|
|
|
(371
|
)
|
|
1,899
|
|
|||
Balance as of December 31, 2017
|
$
|
(2,459
|
)
|
|
$
|
(918
|
)
|
|
$
|
(3,377
|
)
|
Other comprehensive (loss) income
|
(1,796
|
)
|
|
304
|
|
|
(1,492
|
)
|
|||
Balance as of December 31, 2018
|
$
|
(4,255
|
)
|
|
$
|
(614
|
)
|
|
$
|
(4,869
|
)
|
|
2018
|
|
2017
|
|
2016
|
|
||||||
Numerator
|
|
|
|
|
|
|
||||||
Net income
|
$
|
51,921
|
|
|
$
|
47,576
|
|
(1)
|
$
|
28,009
|
|
(1)
|
Denominator
|
|
|
|
|
|
|
||||||
Denominator for basic earnings per share:
|
|
|
|
|
|
|
||||||
Weighted-average common shares outstanding
|
58,125
|
|
|
56,473
|
|
|
55,492
|
|
|
|||
Denominator for diluted earnings per share:
|
|
|
|
|
|
|
||||||
Dilutive potential common shares:
|
|
|
|
|
|
|
||||||
Stock options
|
862
|
|
|
997
|
|
|
967
|
|
|
|||
Restricted stock awards and units
|
783
|
|
|
929
|
|
|
646
|
|
|
|||
Performance-based restricted stock units
|
630
|
|
|
498
|
|
|
144
|
|
|
|||
Employee stock purchase plan
|
168
|
|
|
152
|
|
|
—
|
|
|
|||
Convertible senior notes
|
594
|
|
|
716
|
|
|
—
|
|
|
|||
Weighted-average common shares outstanding with assumed conversion
|
61,162
|
|
|
59,765
|
|
|
57,249
|
|
|
|||
Basic earnings per share
|
|
$0.89
|
|
|
|
$0.84
|
|
(1)
|
|
$0.50
|
|
(1)
|
Diluted earnings per share
|
|
$0.85
|
|
|
|
$0.80
|
|
(1)
|
|
$0.49
|
|
(1)
|
(1) Figures for the years ended December 31, 2017 and 2016 have been recast to reflect the Company's January 1, 2018 full retrospective adoption of ASC 606.
|
|
2018
|
|
2017
|
|
2016
|
|
|||
Stock options
|
80
|
|
|
74
|
|
|
586
|
|
|
Restricted stock awards and units
|
78
|
|
|
17
|
|
|
41
|
|
|
Performance-based restricted stock units
|
—
|
|
|
5
|
|
|
1
|
|
|
Employee stock purchase plan
|
289
|
|
|
189
|
|
|
266
|
|
|
Total
|
447
|
|
|
285
|
|
|
894
|
|
|
|
2018
|
|
2017
|
|
2016
|
|
||||||
Current expense:
|
|
|
|
|
|
|
||||||
U.S. federal and state
|
$
|
747
|
|
|
$
|
1,429
|
|
|
$
|
444
|
|
|
Foreign
|
1,807
|
|
|
3,122
|
|
|
1,992
|
|
|
|||
Current expense
|
2,554
|
|
|
4,551
|
|
|
2,436
|
|
|
|||
Deferred expense (benefit):
|
|
|
|
|
|
|
||||||
U.S. federal and state
|
(4,783
|
)
|
|
4,478
|
|
(1)
|
5,605
|
|
(1)
|
|||
Foreign
|
446
|
|
|
(334
|
)
|
|
(259
|
)
|
|
|||
Valuation allowance
|
—
|
|
|
(3,236
|
)
|
|
—
|
|
|
|||
Deferred (benefit) expense
|
(4,337
|
)
|
|
908
|
|
(1)
|
5,346
|
|
(1)
|
|||
Total income tax expense
|
$
|
(1,783
|
)
|
|
$
|
5,459
|
|
(1)
|
$
|
7,782
|
|
(1)
|
(1) Recast to reflect the Company's January 1, 2018 full retrospective adoption of ASC 606.
|
|
December 31,
|
|
||||||
|
2018
|
|
2017
|
|
||||
Assets:
|
|
|
|
|
||||
Net operating loss carryforwards
|
$
|
10,046
|
|
|
$
|
4,066
|
|
|
Alternative minimum tax credit
|
770
|
|
|
770
|
|
|
||
Stock-based compensation
|
14,609
|
|
|
11,629
|
|
|
||
Federal and state research and development tax credits
|
37,547
|
|
|
27,120
|
|
|
||
Foreign tax credit
|
3,025
|
|
|
3,809
|
|
|
||
Deferred rent
|
2,263
|
|
|
4,138
|
|
|
||
Wire transaction loss/recovery
|
60
|
|
|
57
|
|
|
||
Capitalized research and development
|
7,689
|
|
|
8,604
|
|
|
||
Other
|
4,795
|
|
|
3,191
|
|
|
||
Gross deferred tax assets
|
80,804
|
|
|
63,384
|
|
|
||
Liabilities:
|
|
|
|
|
||||
Depreciable and amortizable assets
|
(19,135
|
)
|
|
(12,658
|
)
|
|
||
Convertible notes
|
—
|
|
|
(2,155
|
)
|
|
||
Accrued bonus
|
(2,855
|
)
|
|
(4,128
|
)
|
|
||
Prepaid commissions and sales bonuses
|
(10,014
|
)
|
|
(5,058
|
)
|
(1)
|
||
Other
|
(338
|
)
|
|
(459
|
)
|
|
||
Gross deferred tax liabilities
|
(32,342
|
)
|
|
(24,458
|
)
|
(1)
|
||
Less: valuation allowance
|
(2,579
|
)
|
|
(3,236
|
)
|
|
||
Net deferred tax assets
|
$
|
45,883
|
|
|
$
|
35,690
|
|
(1)
|
Net long-term deferred tax assets
|
45,982
|
|
|
35,789
|
|
(1)
|
||
Net long-term deferred tax liabilities
|
(99
|
)
|
|
(99
|
)
|
|
||
Net deferred tax assets
|
$
|
45,883
|
|
|
$
|
35,690
|
|
(1)
|
(1) Recast to reflect the Company's January 1, 2018 full retrospective adoption of ASC 606.
|
|
2018
|
|
2017
|
|
2016
|
||||||
Gross unrecognized tax benefits as of beginning of period
|
$
|
4,142
|
|
|
$
|
2,935
|
|
|
$
|
8,069
|
|
Increases based on tax positions related to the current year
|
1,712
|
|
|
1,247
|
|
|
922
|
|
|||
Increases related to tax positions from prior fiscal years
|
605
|
|
|
—
|
|
|
65
|
|
|||
Reductions related to tax positions from prior fiscal years
|
(45
|
)
|
|
(40
|
)
|
|
(1,906
|
)
|
|||
Settlements with tax authority
|
—
|
|
|
—
|
|
|
(4,215
|
)
|
|||
Total gross unrecognized tax benefits as of end of period
|
$
|
6,414
|
|
|
$
|
4,142
|
|
|
$
|
2,935
|
|
For the fiscal year 2018:
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Total revenues
|
$
|
149,198
|
|
|
$
|
155,905
|
|
|
$
|
163,406
|
|
|
$
|
167,187
|
|
Gross profit
|
112,896
|
|
|
118,404
|
|
|
121,179
|
|
|
124,058
|
|
||||
Operating income
|
13,326
|
|
|
12,837
|
|
|
14,119
|
|
|
11,035
|
|
||||
Net income
|
10,325
|
|
|
16,589
|
|
|
10,688
|
|
|
14,319
|
|
||||
Earnings per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$0.18
|
|
|
|
$0.29
|
|
|
|
$0.18
|
|
|
|
$0.24
|
|
Diluted
|
|
$0.17
|
|
|
|
$0.27
|
|
|
|
$0.17
|
|
|
|
$0.23
|
|
|
|
|
|
|
|
|
|
||||||||
For the fiscal year 2017:
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Total revenues
|
$
|
127,644
|
|
|
$
|
136,027
|
|
|
$
|
138,945
|
|
|
$
|
141,589
|
|
Gross profit
|
97,030
|
|
|
104,107
|
|
|
107,391
|
|
|
108,884
|
|
||||
Operating income
|
12,879
|
|
|
12,661
|
|
|
22,257
|
|
|
17,359
|
|
||||
Net income
|
9,980
|
|
|
7,541
|
|
|
13,043
|
|
|
17,012
|
|
||||
Earnings per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$0.18
|
|
|
|
$0.13
|
|
|
|
$0.23
|
|
|
|
$0.30
|
|
Diluted
|
|
$0.17
|
|
|
|
$0.13
|
|
|
|
$0.22
|
|
|
|
$0.28
|
|
1.
|
Financial statements — See
Index to Consolidated Financial Statements
under Item 8 of this Form 10-K.
|
2.
|
Financial statement schedules — None. (Information required to be presented in financial statement schedules is included in the consolidated financial statements or notes thereto.)
|
3.
|
Exhibits — See
Exhibit Index
immediately following the signature page of this Form 10-K.
|
MEDIDATA SOLUTIONS, INC.
|
||
|
|
|
By:
|
|
/S/ TAREK A. SHERIF
|
|
|
Tarek A. Sherif
Chairman and Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/
S
/ T
AREK
A. S
HERIF
|
|
Chairman, Chief Executive Officer
(
Principal Executive Officer
) and
Director
|
|
March 1, 2019
|
Tarek A. Sherif
|
|
|
||
|
|
|
||
/
S
/ R
OUVEN
B
ERGMANN
|
|
Chief Financial Officer
(
Principal Financial and Principal Accounting Officer
)
|
|
March 1, 2019
|
Rouven Bergmann
|
|
|
||
|
|
|
|
|
/
S
/ G
LEN
M. D
E
V
RIES
|
|
President and Director
|
|
March 1, 2019
|
Glen M. de Vries
|
|
|
||
|
|
|
||
/
S
/ C
ARLOS
D
OMINGUEZ
|
|
Director
|
|
March 1, 2019
|
Carlos Dominguez
|
|
|
||
|
|
|
||
/
S
/ N
EIL
M. K
URTZ
, M. D.
|
|
Director
|
|
March 1, 2019
|
Neil M. Kurtz, M.D.
|
|
|
||
|
|
|
||
/
S
/ G
EORGE
W. M
CCULLOCH
|
|
Director
|
|
March 1, 2019
|
George W. McCulloch
|
|
|
||
|
|
|
|
|
|
|
Director
|
|
March 1, 2019
|
Maria Rivas
|
|
|
||
|
|
|
||
/
S
/ L
EE
A. S
HAPIRO
|
|
Director
|
|
March 1, 2019
|
Lee A. Shapiro
|
|
|
||
|
|
|
||
/
S
/ R
OBERT
B. T
AYLOR
|
|
Director
|
|
March 1, 2019
|
Robert B. Taylor
|
|
|
|
|
|
|
Incorporated by Reference
|
||||
Exhibit No.
|
|
Description
|
|
Form
|
|
File No.
|
|
Date Filed
|
2.1
|
|
|
8-K
|
|
001-34387
|
|
6/12/2018
|
|
3.1
|
|
|
10-Q
|
|
001-34387
|
|
8/7/2014
|
|
3.2
|
|
|
8-K
|
|
001-34387
|
|
6/7/2016
|
|
3.3
|
|
|
8-K
|
|
001-34387
|
|
2/16/2016
|
|
4.1
|
|
|
S-1/A
|
|
333-156935
|
|
6/3/2009
|
|
4.2
|
|
|
8-K
|
|
001-34387
|
|
8/12/2013
|
|
4.3
|
|
|
8-K
|
|
001-34387
|
|
8/12/2013
|
|
10.1
|
|
|
S-1/A
|
|
333-156935
|
|
6/3/2009
|
|
10.2†
|
|
|
S-1/A
|
|
333-156935
|
|
5/15/2009
|
|
10.3†
|
|
|
S-1/A
|
|
333-156935
|
|
5/15/2009
|
|
10.4†
|
|
|
8-K
|
|
001-34387
|
|
5/2/2013
|
|
10.5†
|
|
|
S-1/A
|
|
333-156935
|
|
6/3/2009
|
|
10.6†
|
|
|
S-1/A
|
|
333-156935
|
|
6/3/2009
|
|
10.7†
|
|
|
10-Q
|
|
001-34387
|
|
5/3/2013
|
|
10.8†
|
|
|
10-Q
|
|
001-34387
|
|
5/9/2016
|
|
10.9†
|
|
|
S-8
|
|
333-225820
|
|
6/22/2018
|
|
10.10†
|
|
|
8-K
|
|
001-34387
|
|
7/8/2014
|
|
10.11†
|
|
|
8-K
|
|
001-34387
|
|
8/15/2016
|
|
10.12
|
|
|
S-1/A
|
|
333-156935
|
|
3/23/2009
|
|
10.13
|
|
|
8-K
|
|
001-34387
|
|
10/23/2012
|
|
10.14
|
|
|
10-K
|
|
001-34387
|
|
2/24/2014
|
|
10.15
|
|
|
10-K
|
|
001-34387
|
|
2/24/2014
|
|
10.16†
|
|
|
10-K
|
|
001-34387
|
|
2/28/2018
|
|
10.17†
|
|
|
10-Q
|
|
001-34387
|
|
5/8/2017
|
|
10.18†
|
|
|
S-8
|
|
333-225816
|
|
6/22/2018
|
|
10.19†
|
|
|
10-Q
|
|
001-34387
|
|
8/1/2017
|
|
10.20†
|
|
|
10-Q
|
|
001-34387
|
|
11/3/2017
|
|
10.21
|
|
|
8-K
|
|
001-34387
|
|
12/28/2017
|
|
10.22†
|
|
|
10-Q
|
|
001-34387
|
|
5/4/2018
|
|
10.23*
|
|
|
|
|
|
|
|
|
21.1*
|
|
|
|
|
|
|
|
|
23.1*
|
|
|
|
|
|
|
|
|
31.1*
|
|
|
|
|
|
|
|
|
31.2*
|
|
|
|
|
|
|
|
|
32.1**
|
|
|
|
|
|
|
|
|
32.2**
|
|
|
|
|
|
|
|
|
101.INS*
|
|
XBRL Instance Document
|
|
|
|
|
|
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
|
|
101.PRE*
|
|
XBRL Taxonomy Presentation Linkbase Document
|
|
|
|
|
|
|
*
|
|
Filed herewith.
|
**
|
|
Furnished herewith.
|
†
|
|
Indicates a management contract or any compensatory plan, contract or arrangement.
|
Subsidiaries*
|
|
Place of
Incorporation
|
MDSOL Europe Limited
|
|
United Kingdom
|
Medidata Holdings, Inc.
|
|
Delaware, U.S.
|
Medidata Korea, Limited
|
|
South Korea
|
Medidata Solutions K.K.
|
|
Japan
|
Medidata Technology LLP
|
|
United Kingdom
|
Medidata Technology Partner, LLC
|
|
Delaware, U.S.
|
Patient Profiles, LLC
|
|
California, U.S.
|
Medidata Information Technology (Shanghai) Co., Ltd.
|
|
China
|
Medidata Solutions International Asia Pacific Pte. Ltd.
|
|
Singapore
|
Medidata Solutions International Ltd.
|
|
United Kingdom
|
Intelemage, LLC
|
|
Ohio, U.S.
|
Medidata Europe Data Services, LLC
|
|
Delaware, U.S.
|
Medidata Solutions GmbH
|
|
Germany
|
CHITA Inc.
|
|
California, U.S.
|
Medidata Consent Services, LLC
|
|
Delaware, U.S.
|
SHYFT Analytics, Inc.
|
|
Delaware. U.S.
|
*Please note that this list includes all subsidiaries of Medidata Solutions, Inc. without regard to whether they would constitute a "significant subsidiary" pursuant to Item 601(b)(21)(ii) of Regulation S-K.
|
1.
|
I have reviewed this
Annual
Report on Form
10-K
of Medidata Solutions, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
By:
|
/s/ TAREK A. SHERIF
|
|
Tarek A. Sherif
Chairman and Chief Executive Officer
Medidata Solutions, Inc.
|
1.
|
I have reviewed this
Annual
Report on Form
10-K
of Medidata Solutions, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
By:
|
/s/ ROUVEN BERGMANN
|
|
Rouven Bergmann
Chief Financial Officer
Medidata Solutions, Inc.
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company
|
By:
|
/s/ TAREK A. SHERIF
|
|
Tarek A. Sherif
Chairman and Chief Executive Officer
Medidata Solutions, Inc.
|
*
|
A signed original of this written statement required by Section 906 has been provided to Medidata Solutions, Inc. and will be retained by Medidata Solutions, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company
|
By:
|
/s/ ROUVEN BERGMANN
|
|
Rouven Bergmann
Chief Financial Officer
Medidata Solutions, Inc.
|
*
|
A signed original of this written statement required by Section 906 has been provided to Medidata Solutions, Inc. and will be retained by Medidata Solutions, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
|