Medidata turns loss to profit in Q2
In June Medidata became the first company this year that has never made an annual profit to file an initial public offering (IPO). The IPO was successful, raising $82m (€57.4m), and Medidata is now on course to make a small net profit in fiscal 2009.
Bruce Dalziel, chief financial officer at Medidata, believes this turnaround is a consequence of establishing the presence and infrastructure during its decade as a private company.
Over this period Medidata formed business relationships with many companies, including Roche and Almac, and this attracted investors to its IPO.
Its relationships have also helped it create a backlog that should generate revenues of $62.9m by the end of the year. Medidata predicted that its 2009 net income would be $0-2m and financial markets responded positively to this news, sending the company’s shares up by 11 per cent.
The year so far
The first two quarters of 2009 have given Medidata the platform to achieve its profitability goal. In the second quarter the company had an operating income of $773,000, compared with a $5.5m loss in the same period of 2008.
A 32 per cent rise in total revenues, taking it up to $34m, was partially responsible but other factors also applied. Despite the increase in sales Medidata managed to keep the cost of revenues down, with this figure falling by four per cent.
These two factors helped Medidata increase its gross profit by 69 per cent to $21.3m. In the first six months of fiscal 2009 Medidata made an operating income of $3.1m, compared to a loss of $13.3m in the corresponding period of last year.
