Company Quick10K Filing
Medidata
Price90.35 EPS1
Shares62 P/E128
MCap5,643 P/FCF88
Net Debt-146 EBIT39
TEV5,497 TEV/EBIT141
TTM 2019-06-30, in MM, except price, ratios
10-Q 2019-06-30 Filed 2019-08-06
10-Q 2019-03-31 Filed 2019-05-10
10-K 2018-12-31 Filed 2019-03-01
10-Q 2018-09-30 Filed 2018-10-30
10-Q 2018-06-30 Filed 2018-08-02
10-Q 2018-03-31 Filed 2018-05-04
10-K 2017-12-31 Filed 2018-02-28
10-Q 2017-09-30 Filed 2017-11-03
10-Q 2017-06-30 Filed 2017-08-01
10-Q 2017-03-31 Filed 2017-05-08
10-K 2016-12-31 Filed 2017-02-28
10-Q 2016-09-30 Filed 2016-11-03
10-Q 2016-06-30 Filed 2016-08-05
10-Q 2016-03-31 Filed 2016-05-09
10-K 2015-12-31 Filed 2016-02-29
10-Q 2015-09-30 Filed 2015-11-05
10-Q 2015-06-30 Filed 2015-08-10
10-Q 2015-03-31 Filed 2015-05-11
10-K 2014-12-31 Filed 2015-03-02
10-Q 2014-09-30 Filed 2014-11-07
10-Q 2014-06-30 Filed 2014-08-07
10-Q 2014-03-31 Filed 2014-04-30
10-K 2013-12-31 Filed 2014-02-25
10-Q 2013-09-30 Filed 2013-11-04
10-Q 2013-06-30 Filed 2013-08-02
10-Q 2013-03-31 Filed 2013-05-03
10-K 2012-12-31 Filed 2013-03-08
10-Q 2012-09-30 Filed 2012-11-09
10-Q 2012-06-30 Filed 2012-08-07
10-Q 2012-03-31 Filed 2012-05-04
10-K 2011-12-31 Filed 2012-03-13
10-Q 2011-09-30 Filed 2011-11-08
10-Q 2011-06-30 Filed 2011-08-09
10-Q 2011-03-31 Filed 2011-05-10
10-K 2010-12-31 Filed 2011-03-16
10-Q 2010-09-30 Filed 2010-11-10
10-Q 2010-06-30 Filed 2010-08-13
10-Q 2010-03-31 Filed 2010-05-14
10-K 2009-12-31 Filed 2010-03-15
8-K 2019-10-28 Leave Agreement, M&A, Shareholder Rights, Control, Officers, Amend Bylaw, Exhibits
8-K 2019-09-23 Other Events, Exhibits
8-K 2019-08-16 Shareholder Vote, Other Events, Exhibits
8-K 2019-07-23 Earnings, Exhibits
8-K 2019-06-12 Other Events, Exhibits
8-K 2019-06-11 Enter Agreement, Officers, Amend Bylaw, Exhibits
8-K 2019-05-29 Shareholder Vote
8-K 2019-04-30 Earnings, Exhibits
8-K 2019-04-15 Amend Bylaw, Exhibits
8-K 2019-02-12 Officers
8-K 2019-02-12 Earnings, Exhibits
8-K 2018-10-19 Officers, Regulation FD, Exhibits
8-K 2018-10-18 Earnings, Exhibits
8-K 2018-08-01 Sale of Shares
8-K 2018-07-24 Earnings, Exhibits
8-K 2018-06-20 M&A, Exhibits
8-K 2018-06-11 Enter Agreement, Exhibits
8-K 2018-05-30 Shareholder Vote
8-K 2018-04-19 Earnings, Exhibits
8-K 2018-02-20 Officers
8-K 2018-02-08 Earnings, Exhibits

MDSO 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements (Unaudited)
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 mdso-63019xex311.htm
EX-31.2 mdso-63019xex312.htm
EX-32.1 mdso-63019xex321.htm
EX-32.2 mdso-63019xex322.htm

Medidata Earnings 2019-06-30

Balance SheetIncome StatementCash Flow
1.21.00.70.50.20.02012201420172020
Assets, Equity
0.20.10.10.0-0.0-0.12012201420172020
Rev, G Profit, Net Income
0.30.20.1-0.1-0.2-0.32012201420172020
Ops, Inv, Fin

Document
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Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________
FORM 10-Q
 _____________________________________
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2019
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission File Number: 001-34387
medidatalogocolor2018.jpg
Medidata Solutions, Inc.
(Exact name of registrant as specified in its charter)
Delaware
 
13-4066508
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
350 Hudson Street, 9th Floor
 
 
New York
 
 
New York
 
10014
(Address of principal executive offices)
 
(Zip Code)
(212)
 
918-1800
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Common stock, par value
$0.01
MDSO
The NASDAQ Stock Market LLC
(Title of each class)
(Trading symbol)
(Name of each exchange on which registered)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.      Yes     No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).      Yes      No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one)
Large Accelerated Filer
 
Accelerated Filer
Non-Accelerated Filer
(Do not check if a smaller reporting company)
Smaller Reporting Company
 
 
 
Emerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes      No
As of July 31, 2019, the registrant had 62,456,410 shares of common stock outstanding.


Table of Contents

MEDIDATA SOLUTIONS, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED June 30, 2019
TABLE OF CONTENTS
 
 
Page
PART I
Item 1.
 
 
 
 
 
Item 2.
Item 3.
Item 4.
PART II
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
 
 


- 1 -

Table of Contents

PART I - FINANCIAL INFORMATION
Item 1.     Financial Statements (Unaudited)

- 2 -

Table of Contents

MEDIDATA SOLUTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

 
June 30,
2019
 
December 31,
2018
 
(Amounts in thousands, except per share data)
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
139,104

 
$
105,440

Marketable securities
66,914

 
135,105

Accounts receivable, net of allowance for doubtful accounts of $2,018 and $1,999, respectively (1)
198,166

 
170,744

Capitalized contract costs
24,426

 
22,247

Prepaid expenses and other current assets
37,615

 
28,949

Total current assets
466,225

 
462,485

Restricted cash
7,223

 
7,205

Operating lease assets (2)
83,554

 

Furniture, fixtures and equipment, net
114,210

 
98,983

Goodwill
213,976

 
216,017

Intangible assets, net
26,406

 
29,546

Deferred tax assets
53,475

 
45,982

Other assets
58,697

 
52,994

Total assets
$
1,023,766

 
$
913,212

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
10,672

 
$
7,482

Accrued payroll and other compensation
34,047

 
51,270

Accrued expenses and other
41,298

 
37,487

Operating lease liabilities (2)
15,318

 

Deferred revenue
80,435

 
74,463

Total current liabilities
181,770

 
170,702

Noncurrent liabilities:
 
 
 
Term loan, net
84,844

 
88,366

Deferred revenue, noncurrent
2,291

 
3,843

Deferred tax liabilities
101

 
99

Operating lease liabilities, noncurrent (2)
92,611

 

Other long-term liabilities
1,690

 
18,754

Total noncurrent liabilities
181,537

 
111,062

Total liabilities
363,307

 
281,764

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; 67,916 and 66,103 shares issued; 62,461 and 61,348 shares outstanding, respectively
679

 
661

Additional paid-in capital
629,451

 
574,667

Treasury stock, 5,455 and 4,755 shares, respectively
(198,003
)
 
(152,849
)
Accumulated other comprehensive loss
(4,544
)
 
(4,869
)
Retained earnings
232,876

 
213,838

Total stockholders’ equity
660,459

 
631,448

Total liabilities and stockholders’ equity
$
1,023,766

 
$
913,212

(1) Unbilled receivables of $51,421 and $38,601, respectively, are included in accounts receivable as of June 30, 2019 and December 31, 2018.
(2) Figures as of June 30, 2019 reflect the Company's January 1, 2019 adoption of Accounting Standards Update ("ASU") No. 2016-02, Leases. For additional details, see Note 1, "Summary of Significant Accounting Policies — Recently Adopted Accounting Pronouncements."
The accompanying notes are an integral part of the condensed consolidated financial statements.

- 3 -

Table of Contents

MEDIDATA SOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
 
(Amounts in thousands, except per share data)
Revenues
 
 
 
 
 
 
 
Subscription
$
150,006

 
$
130,486


$
296,881

 
$
257,305

Professional services
30,454

 
25,419


57,083

 
47,798

Total revenues
180,460

 
155,905

 
353,964

 
305,103

Cost of revenues (1)(2)
 
 
 
 
 
 
 
Subscription
29,306

 
21,602

 
56,034

 
41,943

Professional services
20,296

 
15,899

 
39,571

 
31,860

Total cost of revenues
49,602

 
37,501

 
95,605

 
73,803

Gross profit
130,858

 
118,404

 
258,359

 
231,300

Operating costs and expenses
 
 
 
 
 
 
 
Research and development (1)
48,475

 
40,789

 
94,964

 
78,311

Sales and marketing (1)(2)
44,388

 
37,106

 
87,784

 
73,967

General and administrative (1)
36,090

 
27,672

 
68,724

 
52,859

Total operating costs and expenses
128,953

 
105,567

 
251,472

 
205,137

Operating income
1,905

 
12,837

 
6,887

 
26,163

Interest and other income (expense)
 
 
 
 
 
 
 
Interest expense
(1,110
)
 
(5,700
)
 
(2,220
)
 
(11,275
)
Interest income
599

 
2,328

 
1,544

 
4,416

Other income, net
381

 
7,729

 
353

 
7,633

Total interest and other (expense) income, net
(130
)
 
4,357

 
(323
)
 
774

Income before income taxes
1,775

 
17,194

 
6,564

 
26,937

Income tax (benefit) provision
(6,118
)
 
605

 
(12,474
)
 
23

Net income
$
7,893

 
$
16,589

 
$
19,038

 
$
26,914

Earnings per share
 
 
 
 
 
 
 
Basic
$
0.13

 
$
0.29

 
$
0.32

 
$
0.47

Diluted
$
0.13

 
$
0.27

 
$
0.31

 
$
0.44

Weighted average common shares outstanding
 
 
 
 
 
 
 
Basic
60,081

 
57,448

 
59,888

 
57,252

Diluted
62,372

 
60,874

 
62,191

 
60,564

(1) Stock-based compensation expense included in cost of revenues and operating costs and expenses is as follows:
Cost of revenues
$
2,871

 
$
1,506

 
$
5,254

 
$
2,774

Research and development
5,005

 
3,319

 
9,254

 
6,173

Sales and marketing
6,046

 
2,917

 
11,472

 
5,561

General and administrative
7,973

 
7,377

 
15,579

 
13,766

Total stock-based compensation
$
21,895

 
$
15,119

 
$
41,559

 
$
28,274

(2) Amortization of intangible assets included in cost of revenues and operating costs and expenses is as follows:
Cost of revenues
$
1,365

 
$
1,205

 
$
2,729

 
$
2,299

Sales and marketing
505

 
231

 
1,011

 
351

Total amortization of intangible assets
$
1,870

 
$
1,436

 
$
3,740

 
$
2,650





The accompanying notes are an integral part of the condensed consolidated financial statements.

- 4 -

Table of Contents

MEDIDATA SOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
 
(Amounts in thousands)
Net income
$
7,893

 
$
16,589

 
$
19,038

 
$
26,914

Other comprehensive income (loss)
 
 
 
 
 
 
 
Foreign currency translation adjustments
(605
)
 
(1,954
)
 
(233
)
 
(684
)
Unrealized gain (loss) on marketable securities
221

 
719

 
753

 
(307
)
Other comprehensive (loss) income
(384
)
 
(1,235
)
 
520

 
(991
)
Income tax related to unrealized gain or loss on marketable securities
(57
)
 
(180
)
 
(195
)
 
(122
)
Other comprehensive (loss) income, net of tax
(441
)
 
(1,415
)
 
325

 
(1,113
)
Comprehensive income, net of tax
$
7,452

 
$
15,174

 
$
19,363

 
$
25,801




























The accompanying notes are an integral part of the condensed consolidated financial statements.

- 5 -

Table of Contents

MEDIDATA SOLUTIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
 
Six Months Ended June 30,
 
 
2019
 
2018
 
Cash flows from operating activities
(Amounts in thousands)
 
Net income
$
19,038

 
$
26,914

 
Adjustments to reconcile net income to net cash provided by operating activities
 
 
 
 
Amortization of intangible assets and depreciation
22,175

 
16,218

 
Stock-based compensation
41,559

 
28,274

 
Amortization of operating lease assets (1)
6,112

 

 
Amortization of capitalized contract costs
13,319

 
9,491

(2)
Amortization of discounts or premiums on marketable securities
55

 
50

 
Realized loss on available-for-sale marketable securities
27

 

 
Deferred income taxes
(5,963
)
 
106

 
Amortization of debt issuance costs
217

 
856

 
Amortization of debt discount

 
7,015

 
Provision for doubtful accounts
881

 
763

 
Loss on fixed asset disposal
166

 
127

 
Gain recognized on step acquisition

 
(7,648
)
 
Changes in fair value of contingent consideration
240

 
7

 
Changes in operating assets and liabilities:
 
 
 
 
Accounts receivable
(28,303
)
 
(27,247
)
 
Capitalized contract costs
(19,339
)
 
(16,696
)
(2)
Prepaid expenses and other current assets
(8,666
)
 
(3,008
)
 
Other assets
(1,862
)
 
1,591

 
Accounts payable
1,185

 
1,753

 
Accrued payroll and other compensation
(20,166
)
 
(8,909
)
 
Accrued expenses and other
6,795

 
3,236

 
Deferred revenue
4,420

 
(9,572
)
 
Operating lease liabilities (1)
(7,966
)
 

 
Other long-term liabilities
6,484

 
455

 
Net cash provided by operating activities
30,408

 
23,776

 
Cash flows from investing activities
 
 
 
 
Purchases of furniture, fixtures and equipment
(32,366
)
 
(19,520
)
 
Purchase of domain name
(600
)
 

 
Purchases of available-for-sale securities

 
(69,214
)
 
Proceeds from sale of available-for-sale securities
68,862

 
137,786

 
Acquisition of business, net of cash acquired

 
(178,568
)
 
Net cash provided by (used in) investing activities
35,896

 
(129,516
)
 
Cash flows from financing activities
 
 
 
 
Proceeds from exercise of stock options
3,912

 
6,351

 
Proceeds from employee stock purchase plan
7,895

 
6,345

 
Acquisition of treasury stock
(40,594
)
 
(18,257
)
 
Term loan principal payments
(2,500
)
 
(1,250
)
 
Payment of acquisition-related earn-outs
(1,233
)
 
(4,087
)
 
Payment of credit facility financing costs

 
(175
)
 
Net cash used in financing activities
(32,520
)
 
(11,073
)
 
Effect of exchange rate changes on cash, cash equivalents and restricted cash
(102
)
 
(209
)
 
Net increase (decrease) in cash, cash equivalents and restricted cash
33,682

 
(117,022
)
 
Cash, cash equivalents and restricted cash – Beginning of period
112,645

 
242,843

 
Cash, cash equivalents and restricted cash – End of period
$
146,327

 
$
125,821

 
 
 
(1) Figures for the six months ended June 30, 2019 reflect the Company's January 1, 2019 adoption of ASU No. 2016-02, Leases. For additional details, see Note 1, "Summary of Significant Accounting Policies — Recently Adopted Accounting Pronouncements."
 
(2) Change in prior period to conform to current period presentation.
 
The accompanying notes are an integral part of the condensed consolidated financial statements.

- 6 -

Table of Contents

MEDIDATA SOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED (Unaudited)
 
Six Months Ended June 30,
 
2019
 
2018
Supplemental disclosures of cash flow information:
 
 
 
Cash paid (received) during the period for:
 
 
 
Interest
$
1,994

 
$
3,263

Income taxes
$
(382
)
 
$
2,253

 
 
 
 
Noncash investing activities:
 
 
 
Furniture, fixtures, and equipment acquired but not yet paid for at period-end
$
5,628

 
$
3,054









































The accompanying notes are an integral part of the condensed consolidated financial statements.

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Table of Contents    
MEDIDATA SOLUTIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Company — Medidata Solutions, Inc., together with its consolidated subsidiaries (collectively, the "Company"), is the leading global provider of cloud-based solutions for clinical research in life sciences, offering platform technology that transforms clinical development and increases the value of its customers' research investments. The Company was organized as a New York corporation in June 1999 and reincorporated as a Delaware corporation in May 2000.
Except to the extent updated or described below, the Company’s significant accounting policies as of June 30, 2019 are the same as those at December 31, 2018, which are included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, filed with the Securities and Exchange Commission (“SEC”) on March 1, 2019.
Merger Agreement — On June 11, 2019, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") with Dassault Systèmes SE ("Dassault Systèmes"), Dassault Systèmes Americas Corp. (the "Parent"), and 3DS Acquisition 6 Corp. (the "Merger Sub"), providing for, among other things, subject to the terms and conditions of the Merger Agreement, the acquisition of the Company by the Parent at a price of $92.25 per share in cash, without interest, through the Merger Sub and into the Company (the "Merger"), with the Company surviving the Merger as a wholly owned subsidiary of the Parent.
On July 19, 2019, the Company filed its definitive proxy statement on Schedule 14A with the SEC for a special meeting of its stockholders to be held on August 16, 2019 in connection with the Merger. The transaction is expected to close during the second half of 2019, subject to certain conditions including regulatory and shareholder approvals. Until the close of the transaction, the Company will continue to operate independently.
A description of the material terms of the Merger Agreement is available on the Company's Current Report on Form 8-K filed with the SEC on June 13, 2019; the full text of the Merger Agreement has been filed as Exhibit 2.1 thereto, and has been incorporated by reference as Exhibit 2.1 to this Quarterly Report on Form 10-Q.
Basis of Presentation — The accompanying interim condensed consolidated balance sheets as of June 30, 2019 and December 31, 2018, the condensed consolidated statements of operations for the three and six months ended June 30, 2019 and 2018, the condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2019 and 2018, and the condensed consolidated statements of cash flows for the six months ended June 30, 2019 and 2018 are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the SEC for interim financial reporting. Accordingly, certain information and footnote disclosures have been condensed or omitted pursuant to SEC rules that would ordinarily be required by U.S. GAAP for complete financial statements. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes thereto for the fiscal year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 1, 2019.
The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments consisting of normal recurring accruals considered necessary to present fairly the Company’s financial position as of June 30, 2019, results of its operations for the three and six months ended June 30, 2019 and 2018, comprehensive income for the three and six months ended June 30, 2019 and 2018, and cash flows for the six months ended June 30, 2019 and 2018. The results of operations for the three and six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019.
Accounts Receivable Accounts receivable are recorded at original invoice amount less an allowance that management believes will be adequate to absorb estimated losses on uncollectible accounts. This allowance is based on an evaluation of the collectability of accounts receivable and prior bad debt experience. Accounts receivable are written off when deemed uncollectible. Unbilled receivables consist of revenue recognized in excess of billings, substantially all of which is expected to be billed and collected within one year. As of June 30, 2019 and December 31, 2018, unbilled accounts receivable of $51.4 million and $38.6 million, respectively, were included in accounts receivable on the Company's condensed consolidated balance sheets.

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Table of Contents    
MEDIDATA SOLUTIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Leases At the inception of an arrangement, the Company evaluates the existence and type of lease; the Company has determined that all of its leases are operating leases, which are recognized as operating lease assets and operating lease liabilities on its condensed consolidated balance sheet as of June 30, 2019 (subsequent to the adoption of Accounting Standards Codification ("ASC") 842, Leases on January 1, 2019). Operating lease assets represent the right to use an underlying asset over the lease term, and operating lease liabilities represent the obligation to make lease payments. Some of the Company's leases contain options to extend or terminate; the Company is reasonably certain that it will not exercise these options and does not consider them in the determination of the lease term.
Leases with an initial term of twelve months or less are not recorded on the balance sheet; the Company recognizes the related expense on a straight-line basis over the lease term. For leases beginning in 2019 and later, the Company accounts for lease components together with nonlease components. Operating lease assets and liabilities are recognized based on the present value of the remaining lease payments as of the commencement date. As the majority of its leases do not provide an implicit interest rate, the Company uses the estimated incremental borrowing rate that would be required to secure a loan from a third-party lender over the relevant term. For further information, see Note 9, “Leases."
Income Taxes The Company’s interim period provision for income taxes is computed by using an estimate of the annual effective tax rate, adjusted for discrete items taken into account in the relevant period, if any. Each quarter, the annual effective income tax rate is recomputed and if there are material changes in the estimate, a cumulative adjustment is made.
Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, Leases, which replaces previous lease guidance in its entirety with ASC 842 and requires lessees to recognize lease assets and lease liabilities for those arrangements classified as operating leases under previous guidance, with the exception of leases with a term of twelve months or less. The Company adopted ASU No. 2016-02 on January 1, 2019 using the additional transition method, which allows prior periods to be presented under previous lease accounting guidance. Refer to Note 9, "Leases," for related disclosures.
In February 2018, the FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which permits companies to reclassify disproportionate tax effects in accumulated other comprehensive income caused by the U.S. Tax Cuts and Jobs Act enacted in December 2017 to retained earnings. ASU No. 2018-02 is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods. The Company adopted ASU No. 2018-02 on January 1, 2019, and the adoption did not have a material impact on its condensed consolidated financial statements.
Recently Issued Accounting Pronouncements There have been no changes in the expected dates of adoption or estimated effects on the Company's consolidated financial statements of recently issued accounting pronouncements from those disclosed in the Company’s Annual Report on Form 10-K.
2. REVENUES
Disaggregation of Revenue
The following tables provide information about the Company's revenues, disaggregated by geographical market and revenue type, for the three and six months ended June 30, 2019 and 2018 (in thousands):
 
Three Months Ended June 30,
 
2019
 
2018
 
Subscription
 
Professional Services
 
Total
 
Subscription
 
Professional Services
 
Total
Revenues:
 
 
 
 
 
 
 
 
 
 
 
United States
$
111,245

 
$
22,222

 
$
133,467

 
$
99,646

 
$
18,526

 
$
118,172

Rest of Americas
1,680

 
232

 
1,912

 
1,689

 
277

 
1,966

Total Americas
112,925

 
22,454

 
135,379

 
101,335

 
18,803

 
120,138

 
 
 
 
 
 
 
 
 
 
 
 
Japan
7,392

 
1,825

 
9,217

 
7,665

 
1,261

 
8,926

Rest of Asia Pacific
6,849

 
2,382

 
9,231

 
3,875

 
1,243

 
5,118

Total Asia Pacific
14,241

 
4,207

 
18,448

 
11,540

 
2,504

 
14,044

 
 
 
 
 
 
 
 
 
 
 
 
Europe, Middle East and Africa
22,840

 
3,793

 
26,633

 
17,611

 
4,112

 
21,723

Total
$
150,006

 
$
30,454

 
$
180,460

 
$
130,486

 
$
25,419

 
$
155,905



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Table of Contents    
MEDIDATA SOLUTIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

 
Six Months Ended June 30,
 
2019
 
2018
 
Subscription
 
Professional Services
 
Total
 
Subscription
 
Professional Services
 
Total
Revenues:
 
 
 
 
 
 
 
 
 
 
 
United States
$
220,081

 
$
39,739

 
$
259,820

 
$
195,811

 
$
34,510

 
$
230,321

Rest of Americas
3,483

 
471

 
3,954

 
1,998

 
481

 
2,479

Total Americas
223,564

 
40,210

 
263,774

 
197,809

 
34,991

 
232,800

 
 
 
 
 
 
 
 
 
 
 
 
Japan
18,289

 
4,298

 
22,587

 
15,777

 
3,055

 
18,832

Rest of Asia Pacific
12,853

 
4,118

 
16,971

 
7,576

 
2,381

 
9,957

Total Asia Pacific
31,142

 
8,416

 
39,558

 
23,353

 
5,436

 
28,789

 
 
 
 
 
 
 
 
 
 
 
 
Europe, Middle East and Africa
42,175

 
8,457

 
50,632

 
36,143

 
7,371

 
43,514

Total
$
296,881

 
$
57,083

 
$
353,964

 
$
257,305

 
$
47,798

 
$
305,103



The above tables present revenues according to the region in which they were generated, separately displaying those individual countries that, in any of the periods presented, constituted 5% or more or of total revenues. All of the Company's performance obligations are transferred to customers over time; as a result, no disaggregation of revenues by timing of revenue recognition is provided.
Contract Balances
The following table provides information about changes in the Company's deferred revenue balances during the six months ended June 30, 2019 and 2018 (in thousands):
 
Deferred Revenue
 
2019
 
2018
Balance as of January 1
$
78,306

 
$
82,631

Revenue recognized that was included in deferred revenue at the beginning of the period
(59,735
)
 
(71,137
)
Revenue recognized that was not included in deferred revenue at the beginning of the period
(283,164
)
 
(233,400
)
Increases due to invoicing
341,248

 
297,161

Revenue recognized in excess of billings (billings in excess of revenue recognized)
12,820

 
(680
)
Other
(6,749
)
 
1,493

Balance as of June 30
$
82,726

 
$
76,068


Aside from the accounts receivable presented on its condensed consolidated balance sheets, the Company did not have any material contract assets for any of the periods presented.
Transaction Price Allocated to the Remaining Performance Obligations
As of June 30, 2019, the Company has unsatisfied performance obligations associated with subscription services that extend through 2030. The total multi-year transaction price allocated to unsatisfied subscription performance obligations is approximately $1,042 million as of June 30, 2019. Of this amount, approximately $290 million, $440 million, and $312 million are expected to be recognized in 2019, 2020, and thereafter, respectively.
As of June 30, 2019, the total transaction price allocated to unsatisfied professional services performance obligations is immaterial.
Costs to Obtain and Fulfill a Contract with a Customer
Sales commissions earned are considered incremental and recoverable costs of obtaining a contract with a customer and therefore are capitalized as contract costs. Capitalized contract costs were $66.0 million and $60.0 million as of June 30, 2019 and December 31, 2018, respectively. The current portion of capitalized contract costs is represented by capitalized contract costs on the Company's consolidated balance sheets; the long-term portion is included in other assets. 
Amortization of capitalized contract costs was $6.7 million and $4.6 million for the three months ended June 30, 2019 and 2018, respectively and $13.3 million and $9.5 million for the six months ended June 30, 2019 and 2018, respectively. There have been no impairment losses related to capitalized contract costs.

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Table of Contents    
MEDIDATA SOLUTIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

3. STOCKHOLDERS' EQUITY
Common Stock — Common stockholders are entitled to one vote for each share of common stock held. Common stockholders may receive dividends if and when the board of directors determines, at its sole discretion.
Treasury Stock — From time to time, the Company grants nonvested restricted stock awards ("RSAs"), restricted stock units ("RSUs"), and performance-based restricted stock units ("PBRSUs") to its employees pursuant to the terms of its Second Amended and Restated 2017 Long-Term Incentive Plan, as Amended ("2017 Plan") and formerly pursuant to the terms of its Second Amended and Restated 2009 Long-Term Incentive Plan ("2009 Plan”). Under the provisions of the 2017 Plan and 2009 Plan, unless otherwise elected, participants fulfill their related income tax obligation by having shares withheld at the time of vesting. On the date of vesting, the Company divides the participant's income tax withholding obligation in dollars by the closing price of its common stock and withholds the resulting number of vested shares. The shares withheld are then transferred to the Company's treasury stock at cost. During the six months ended June 30, 2019 and 2018, the Company withheld 452,021 shares at an average price of $74.99 and 271,585 shares at an average price of $67.23, respectively, in connection with the vesting of equity awards.
In addition, with regard to stock options granted under the 2009 Plan, option holders may pay option exercise price and applicable income tax obligations in shares with express approval by the Company's board of directors. Withheld shares are transferred to the Company's treasury stock at cost. During the six months ended June 30, 2019, the Company withheld 123,363 shares at an average price of $91.22 in connection with the net exercise of stock options.
Nonvested restricted stock awards forfeited by plan participants are transferred to the Company's treasury stock at par. During the six months ended June 30, 2019 and 2018, 124,746 and 189,668 forfeited shares, respectively, were transferred to treasury stock at their par value of $0.01.
Accumulated Other Comprehensive Loss — For the six months ended June 30, 2019 and 2018, reclassifications of items from accumulated other comprehensive loss to net income were insignificant.

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Table of Contents    
MEDIDATA SOLUTIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

The following reconciliations present significant changes in the components of stockholders' equity for the three and six months ended June 30, 2019 and 2018 (in thousands):
 
 
 
 
 
 
 
 
Accumulated other comprehensive loss
 
 
 
 
(amounts in thousands)
 
Common stock
 
Additional paid-in capital
 
Treasury stock
 
Foreign currency translation adjustments
 
Unrealized gains (losses) on marketable securities
 
Retained earnings
 
Total
Balance - January 1, 2019
 
$
661

 
$
574,667

 
$
(152,849
)
 
$
(4,255
)
 
$
(614
)
 
$
213,838

 
$
631,448

Comprehensive income, net
 

 

 

 
372

 
394

 
11,145

 
11,911

Stock-based compensation
 

 
19,730

 

 

 

 

 
19,730

Issuance of shares under stock-based compensation plans
 
13

 
2,328

 

 

 

 

 
2,341

Acquisition of treasury stock in connection with vesting of awards