This year got off to a strong start, with revenues in the first quarter increasing 24% to $50.4 million. That was much higher than the 10% growth the company achieved in 2011, and it also exceeded the company’s projections for revenues of $48.5 million to$49.5 million.
The pick-up in growth was due to the market share gains we just talked about. In addition, 17 more customers were added in the quarter, bringing the total to 287, up 24% from the previous year. Operating income increased 40% from the prior year to $10.3 million, which is all the more impressive considering the company is heavily invested in research and development. R&D is the lifeblood of innovation, so I like to see the commitment.
For all of 2012, revenues are expected to jump to $213 million to$217 million, which would be 16.5% growth at the $215 million midpoint. Net income for the year is estimated at $27 million to $30 million, which would work out to $1.12 a share at the $28.5 million midpoint, which is what analysts are also expecting. That will be down from the $1.60 earned in 2011, but the reason is that 2012 will be the first year the company paid a full tax rate on earnings.
I view the revenue and earnings estimates for 2012 as quite achievable, and in light of the very strong first quarter, the company could well exceed one or both. I wouldn’t be surprised to see current estimates for $1.12 a share increase in coming quarters. Also, as we approach the end of the year, investors will start to look ahead to fiscal 2013 results, and I feel $1.40 to $1.45 are reasonable, which would be growth of about 25%.
Medidata is an excellent fit for our strategy of investing in companies with very well-defined growth prospects and minimal risk from macro factors. Management believes customers are at the early stages of a multiyear adoption cycle, current momentum remains strong, and I expect the company to continue to grow rapidly in the future.