Veeva : Prepared Remarks ( PDF 279 KB )

June 1, 2022

Q1 FY2023 Earnings Prepared Remarks

Peter Gassner, Founder, CEO

Brent Bowman, CFO

Legal Disclaimer

These prepared remarks contain forward-looking statements regarding Veeva's expected future performance and, in particular, includes guidance provided as of June 1, 2022 about Veeva's expected future financial results. Estimating guidance accurately for future periods is difficult. It involves assumptions and internal estimates that may prove to be incorrect and is based on plans that may change. Hence, there is a significant risk that actual results could differ materially from the guidance we have provided in these prepared remarks, and we have no obligation to update such guidance. There are also numerous risks that have the potential to negatively impact our financial performance, including as a result of competitive factors, customer decisions and priorities, events that impact the life sciences industry, issues related to the security or performance of our products, the pandemic, issues that impact our ability to hire, retain and adequately compensate talented employees, and general macroeconomic and geo-political events (including inflationary pressures and impacts related to Russia's invasion of Ukraine). We have summarized what we believe are the principal risks to our business in a section titled "Summary of Risk Factors" on pages 13-14 in our filing on Form 10-K for the fiscal year ended January

31, 2022, which you can find here. Additional details on the risks and uncertainties that may impact our business can be found in the same filing on Form 10-K and in our subsequent SEC filings, which you can access at sec.gov. We recommend that you familiarize yourself with these risks and uncertainties before making an investment decision.

These prepared remarks also contain certain non-GAAP metrics that we believe aid in the understanding of our financial results. A reconciliation to comparable GAAP metrics can be found in our earnings press release and in the supplemental investor presentation, both available on the Veeva website here. Our earnings press release also includes important information about our use of non-GAAP metrics and our non-GAAP guidance for future periods.

©2022 Veeva Systems Inc. All rights reserved.	Q1 FY2023 Earnings / Prepared Remarks 1
Veeva, Vault, and Crossix are registered trademarks of Veeva Systems Inc.

Q1 Business Update

Peter Gassner, Founder, CEO

Financial Results

We had another strong quarter delivering results ahead of guidance. Total revenue was $505 million, up 16% year over year with subscription revenue growing 18% to $403 million. Non-GAAP operating income was $200 million or 40% of total revenue.

This quarter we reached a $2 billion revenue run rate with strong profitability and high durability. Thank you to the Veeva team past and present for your skill, teamwork, and focus on customer success that brought Veeva to this point. Thank you to our customers for your partnership.

Bringing the Industry Together

Veeva Summits are a big part of how we build the industry cloud. We bring the industry together to share knowledge and develop relationships that help advance the industry, fuel product excellence, and move business forward for Veeva.

After two years, we're back to in-person events and had our Commercial Summit on May 5 in Boston with more than 1,400 attendees. It was incredibly energizing for the Veeva team and our customers. We all came away with important connections and ideas for the future. We're now looking forward to our European R&D Summit in Zurich next week.

Going forward we're expanding our large summits to a full two-day schedule. The industry needs to get together to evolve - especially with the increase in remote working - and Veeva Summits play an important part in that.

Commercial Solutions

Our focus in commercial is to help the industry get to commercial excellence, which means being highly efficient and well-coordinated across sales, medical, and marketing in order to best serve doctors and patients.

We do this by delivering excellent software, data, and business consulting. We started on the software side, and the bulk of our business is still in software, but data and consulting are starting to play more significant roles today and this trend will continue as we move forward.

To reflect the significance of our growing portfolio of data products, we announced Veeva Data Cloud as the overall brand for our data applications. Data Cloud includes Veeva OpenData for customer reference data, Veeva Link for real-time intelligence, and Veeva Compass for patient, prescriber, and sales data in the U.S. market (formerly called "Data Cloud"). So, Veeva Commercial Cloud is now the family of our software products and Veeva Data Cloud is the family of our data products.

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Turning to the details of the quarter, execution was strong across the board on the software side including CRM, commercial Vault, and Crossix. We saw significant CRM expansions, including particular strength in Japan, and 12 new CRM customer wins.

Product excellence and innovation are fueling customer success and growth as we deliver the next generation of CRM across devices to support reps working from anywhere with all the digital capabilities they need for compliant online engagement with physicians including scheduling, signature capture, meetings, content sharing, and compliant chat.

It was another strong quarter for Veeva Link with eight new customers wins as well as major enterprise expansions. We also announced four new products that can roughly double the Veeva Link market opportunity. At its core, Veeva Link is a powerful data platform for real-time intelligence that we can use to build many data applications. Link is early in its lifecycle, but it's evolving quickly and has high potential. As we have seen with Vault, taking a platform approach for Link allows us to build high-value data applications with speed and quality.

We added new Veeva Compass early adopter customers in the quarter and our level of customer engagement, especially in enterprise accounts, is increasing. We continue to refine the Compass products and focus on the success of our early adopters. We have the right strategy, but it will take many years of focused execution to build the business and become the market leader.

Overall, our commercial business is going strong and on a great trajectory with a commitment to customer success and product excellence.

R&D Solutions

In R&D, we are making progress on our vision to establish Veeva Development Cloud as the operating system for drug development.

In the quarter, a top 20 pharma selected Veeva Development Cloud to help streamline and accelerate the development of innovative medicines. Spanning 12 products across clinical, quality, and regulatory, it's one of our largest deals ever, and a landmark for Veeva and the industry. While it's not typical for a top 20 to go all in across so many areas of R&D all at once, we increasingly see companies partnering with us deeply in this way on a long-term vision and roadmap for drug development.

We also had another top 20 pharma select Vault eTMF - their first product on the R&D side - and, through customer success, we are hopeful it will grow into a broader relationship. eTMF has now been selected by 18 of the top 20 and saw 29 new customer wins in the quarter. We continue to innovate and extend our lead in eTMF and it's an area that typically serves as a strong starting point for us on the R&D side.

Vault eTMF is a great example of network effects that can happen with high quality industry specific solutions. There's now a significant base of resources and companies that know and use Vault eTMF, which is a strong positive for large enterprises not only for the trusted ecosystem it creates but also because it enables faster and less disruptive integration of acquisitions when all parties are on Vault.

Quality had 29 new customer wins in the quarter, driven by strong execution in Vault QualityDocs, Vault QMS, and Vault Training. Development of Vault LIMS, a large new application for quality control in manufacturing, is progressing well and we expect to have our first early adopters by the end of the year.

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It's early days for Veeva in R&D. We're only 15% into our current $7 billion total addressable market opportunity. There is a long tail of growth ahead for our established products and we have a number of major products very early in their lifecycle like Vault CDMS and Vault Safety.

Looking Ahead

I continue to be encouraged by the level of opportunity and impact we have in R&D and commercial. We have a great team, deep customer relationships, and our innovation engine is strong. We are set-up for a long runway of organic growth as we build the industry cloud for life sciences.

Peter Gassner, Founder, CEO

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