Medidata beats expectations as cross-selling activity ramps up

By Nick Taylor

- Last updated on GMT

Related tags: Revenue, Medidata

Medidata beats expectations as cross-selling activity ramps up
A doubling in the percentage of new clients buying more than one product helped Medidata beat first quarter expectations.

Medidata is looking to increased cross-selling to drive revenue growth and lessen reliance on its EDC (electronic data capture) product, Rave. On the evidence of the latest results, when almost one-quarter of new clients bought more than one product, the strategy is working.

We believe that Medidata may be hitting an inflection point in terms of market traction for its “platform” offering, which can bring integrated capabilities to a world of legacy data silos,​”  Sandy Draper, equity analyst at Raymond James, wrote.

Of the 17 clients Medidata added in the past three months, close to one-quarter bought more than one product. In the preceding quarter 12 per cent of new clients purchased multiple products.

Cross-selling to these clients will drive sales growth in the coming quarters and Medidata raised its expectations for 2012. First quarter net revenues grew 24 per cent year-on-year.

Growth drivers

As well as cross-selling Medidata is looking to competitive wins from Oracle, which it thinks was distracted by the Phase Forward acquisition, to drive sales growth in the coming year.

On a small scale Medidata claims this share shift has begun. “Management also called out an increase in their number of competitive displacements of Oracle footprints, by virtue of their more integrated, flexible, and easy to use platform​,” Draper wrote.

However, Draper is yet to see hard evidence Medidata has secured big competitive wins from Oracle. In fact, what is known is that Oracle is set to win Wyeth as an EDC client from the end of 2012.

Wyeth was a Rave client but the takeover by Pfizer will see it move to Oracle. Medidata wants to hit back. “We estimate that two “elephant” type wins comparable in size to Wyeth could contribute two to five per cent to 2012 revenue growth​,” Draper wrote last month.

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