Veeva Announces Fiscal 2025 First Quarter Results
Total Revenues of
Subscription Services Revenues of
"Thanks to our customers and the
Fiscal 2025 First Quarter Results:
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Revenues
(1): Total revenues for the first quarter were
$650.3 million , up from$526.3 million one year ago, an increase of 24% year over year. Subscription services revenues for the first quarter were$534.0 million , up from$414.5 million one year ago, an increase of 29% year over year. -
Operating Income and Non-GAAP Operating Income
(1)(2): First quarter operating income was
$155.2 million , compared to$61.5 million one year ago, an increase of 152% year over year. Non-GAAP operating income for the first quarter was$260.9 million , compared to$157.0 million one year ago, an increase of 66% year over year. -
Net Income and Non-GAAP Net Income
(1)(2): First quarter net income was
$161.7 million , compared to$131.5 million one year ago, an increase of 23% year over year. Non-GAAP net income for the first quarter was$247.0 million , compared to$147.9 million one year ago, an increase of 67% year over year. -
Net Income per Share and Non-GAAP Net Income per Share
(1)(2): For the first quarter, fully diluted net income per share was
$0.98 , compared to$0.81 one year ago, while non-GAAP fully diluted net income per share was$1.50 , compared to$0.91 one year ago.
"Our results in the first quarter exceeded our guidance on all metrics," said interim CFO and Board Director
Recent Highlights:
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Three Top 20 Biopharmas Select Multiple Veeva Development Cloud Applications – Momentum continued in the quarter, with significant wins in clinical, quality, regulatory, and safety including three top 20 biopharma wins for multiple Development Cloud applications. All three wins included clinical, a critical area for the industry with a lot of potential and where the majority of
Veeva's 11 clinical products are in the early stages of adoption. -
Veeva Vault Basics Now Available – Vault Basics applications are preconfigured with industry standard processes and managed by
Veeva with no implementation cost. This allows emerging biotechs to start with Development Cloud earlier in their lifecycle then graduate easily to full Development Cloud as they grow. -
Vault CRM Suite Progress Continues – With a unique ability to bring together sales, marketing, and medical in a single Vault for connected customer data, content, and processes, the Vault CRM Suite can help the industry realize the vision of true customer centricity. Major progress toward this goal continued with the full availability of Vault CRM for all new customers in April. Multiple customers are already live and there were 13 CRM wins in the quarter.
Veeva also announced planned availability dates for new applications in the Vault CRM Suite with Service Center coming in August and Campaign Manager in December. -
Better Commercial Data for the Industry with Veeva Data Cloud –
Veeva added a record 21 new brands for Compass Patient in the first quarter, including its first seven-figure enterprise-wide win with a top 50 biopharma. It also signed the first Compass Prescriber and Compass National customers, following the products' release in January. Compass is gaining traction because it delivers data for in-office therapies and retail prescriptions, giving customers more complete and more accurate data than legacy alternatives. Veeva Link also continued to progress well, crossing the 100-customer mark, as the industry enhances engagement through real-time intelligence.
Financial Outlook:
- Total revenues between
$666 and$669 million . - Non-GAAP operating income between
$265 and$267 million (3). - Non-GAAP fully diluted net income per share between
$1.53 and$1.54 (3).
- Total revenues between
$2,700 and$2,710 million . - Non-GAAP operating income of about
$1,070 million (3). - Non-GAAP fully diluted net income per share of approximately
$6.16 (3).
Conference Call Information
Prepared remarks and an investor presentation providing additional information and analysis can be found on
What: |
Veeva Systems Fiscal 2025 First Quarter Results Conference Call |
When: |
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Time: |
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Online Registration: |
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Webcast: |
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(1) |
The customer contracting change that standardized termination for convenience (TFC) rights in our master subscription agreements resulted in a change in the timing of revenue for certain customer contracts and reduced revenues, operating income and non-GAAP operating income, and net income and non-GAAP net income in the first quarter of fiscal 2024. |
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(2) |
This press release uses non-GAAP financial metrics that are adjusted for the impact of various GAAP items. See the section titled "Non-GAAP Financial Measures" and the tables entitled "Reconciliation of GAAP to Non-GAAP Financial Measures" below for details. |
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(3) |
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About Veeva Systems
Forward-looking Statements
This release contains forward-looking statements regarding
Investor Relations Contact:
267-460-5839
ir@veeva.com
Media Contact:
781-366-7617
pr@veeva.com
CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) |
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Assets |
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Current assets: |
|
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Cash and cash equivalents |
$ 1,197,196 |
|
$ 703,487 |
Short-term investments |
3,567,841 |
|
3,324,269 |
Accounts receivable, net |
362,320 |
|
852,172 |
Unbilled accounts receivable |
38,771 |
|
36,365 |
Prepaid expenses and other current assets |
78,820 |
|
86,918 |
Total current assets |
5,244,948 |
|
5,003,211 |
Property and equipment, net |
58,042 |
|
58,532 |
Deferred costs, net |
23,967 |
|
23,916 |
Lease right-of-use assets |
44,583 |
|
45,602 |
|
439,877 |
|
439,877 |
Intangible assets, net |
58,231 |
|
63,017 |
Deferred income taxes |
266,060 |
|
233,463 |
Other long-term assets |
51,850 |
|
43,302 |
Total assets |
$ 6,187,558 |
|
$ 5,910,920 |
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Liabilities and stockholders' equity |
|
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Current liabilities: |
|
|
|
Accounts payable |
$ 31,930 |
|
$ 31,513 |
Accrued compensation and benefits |
38,755 |
|
43,433 |
Accrued expenses and other current liabilities |
41,187 |
|
32,980 |
Income tax payable |
71,567 |
|
11,862 |
Deferred revenue |
1,029,455 |
|
1,049,761 |
Lease liabilities |
10,392 |
|
9,334 |
Total current liabilities |
1,223,286 |
|
1,178,883 |
Deferred income taxes |
705 |
|
2,052 |
Lease liabilities, noncurrent |
45,351 |
|
46,441 |
Other long-term liabilities |
28,835 |
|
38,720 |
Total liabilities |
1,298,177 |
|
1,266,096 |
Stockholders' equity: |
|
|
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Class A common stock |
2 |
|
2 |
Additional paid-in capital |
2,017,904 |
|
1,915,002 |
Accumulated other comprehensive loss |
(30,646) |
|
(10,637) |
Retained earnings |
2,902,121 |
|
2,740,457 |
Total stockholders' equity |
4,889,381 |
|
4,644,824 |
Total liabilities and stockholders' equity |
$ 6,187,558 |
|
$ 5,910,920 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands, except per share data) (Unaudited) |
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Three months ended |
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2024 |
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2023 |
Revenues: |
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Subscription services(4) |
$ 533,955 |
|
$ 414,546 |
Professional services and other(5) |
116,390 |
|
111,779 |
Total revenues |
650,345 |
|
526,325 |
Cost of revenues (6): |
|
|
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Cost of subscription services |
78,148 |
|
67,575 |
Cost of professional services and other |
95,736 |
|
99,088 |
Total cost of revenues |
173,884 |
|
166,663 |
Gross profit |
476,461 |
|
359,662 |
Operating expenses (6): |
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|
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Research and development |
162,711 |
|
146,960 |
Sales and marketing |
97,301 |
|
88,503 |
General and administrative |
61,277 |
|
62,669 |
Total operating expenses |
321,289 |
|
298,132 |
Operating income |
155,172 |
|
61,530 |
Other income, net |
51,729 |
|
30,248 |
Income before income taxes |
206,901 |
|
91,778 |
Income tax provision (benefit) |
45,237 |
|
(39,743) |
Net income |
$ 161,664 |
|
$ 131,521 |
Net income per share: |
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Basic |
$ 1.00 |
|
$ 0.82 |
Diluted |
$ 0.98 |
|
$ 0.81 |
Weighted-average shares used to compute net income per share: |
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Basic |
161,421 |
|
159,852 |
Diluted |
164,394 |
|
162,521 |
Other comprehensive income: |
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Net change in unrealized loss on available-for-sale investments |
$ (18,861) |
|
$ 5,428 |
Net change in cumulative foreign currency translation loss |
(1,148) |
|
(58) |
Comprehensive income |
$ 141,655 |
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$ 136,891 |
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(4) Includes subscription services revenues from the following product areas: |
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Veeva Commercial Solutions |
$ 261,316 |
|
$ 239,324 |
Veeva R&D Solutions |
272,639 |
|
175,222 |
Total subscription services |
$ 533,955 |
|
$ 414,546 |
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(5) Includes professional services and other revenues from the following product areas: |
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Veeva Commercial Solutions |
$ 48,772 |
|
$ 44,864 |
Veeva R&D Solutions |
67,618 |
|
66,915 |
Total professional services and other |
$ 116,390 |
|
$ 111,779 |
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(6) Includes stock-based compensation as follows: |
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Cost of revenues: |
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Cost of subscription services |
$ 1,554 |
|
$ 1,505 |
Cost of professional services and other |
12,535 |
|
12,722 |
Research and development |
41,743 |
|
38,906 |
Sales and marketing |
23,043 |
|
20,135 |
General and administrative |
17,036 |
|
17,451 |
Total stock-based compensation |
$ 95,911 |
|
$ 90,719 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) |
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Three months ended |
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2024 |
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2023 |
Cash flows from operating activities |
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Net income |
$ 161,664 |
|
$ 131,521 |
Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation and amortization |
8,499 |
|
7,549 |
Reduction of operating lease right-of-use assets |
2,783 |
|
3,060 |
Accretion of discount on short-term investments |
(6,187) |
|
(3,407) |
Stock-based compensation |
95,911 |
|
90,719 |
Amortization of deferred costs |
3,803 |
|
5,052 |
Deferred income taxes |
(26,539) |
|
(21,514) |
Loss on foreign currency from mark-to-market derivative |
1,082 |
|
180 |
Bad debt (recovery) expense |
(152) |
|
155 |
Changes in operating assets and liabilities: |
|
|
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Accounts receivable |
490,004 |
|
289,960 |
Unbilled accounts receivable |
(2,406) |
|
44,104 |
Deferred costs |
(3,854) |
|
3,607 |
Other current and long-term assets |
8,160 |
|
(36,298) |
Accounts payable |
280 |
|
1,955 |
Accrued expenses and other current liabilities |
2,597 |
|
(3,344) |
Income taxes payable |
59,705 |
|
(329) |
Deferred revenue |
(31,292) |
|
(1,221) |
Operating lease liabilities |
(1,643) |
|
(2,693) |
Other long-term liabilities |
1,101 |
|
(3,120) |
Net cash provided by operating activities |
763,516 |
|
505,936 |
Cash flows from investing activities |
|
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Purchases of short-term investments |
(777,831) |
|
(612,492) |
Maturities and sales of short-term investments |
513,929 |
|
318,056 |
Long-term assets |
(8,476) |
|
(2,958) |
Net cash used in investing activities |
(272,378) |
|
(297,394) |
Cash flows from financing activities |
|
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Proceeds from exercise of common stock options |
28,434 |
|
15,233 |
Taxes paid related to net share settlement of equity awards |
(24,606) |
|
(16,625) |
Net cash provided by (used in) financing activities |
3,828 |
|
(1,392) |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash |
(1,257) |
|
19 |
Net change in cash, cash equivalents, and restricted cash |
493,709 |
|
207,169 |
Cash, cash equivalents, and restricted cash at beginning of period |
706,670 |
|
889,650 |
Cash, cash equivalents, and restricted cash at end of period |
$ 1,200,379 |
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$ 1,096,819 |
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Supplemental disclosures of other cash flow information: |
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Excess tax benefits from employee stock plans |
$ 3,121 |
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$ 62,089 |
Non-GAAP Financial Measures
In
- Excess tax benefits. Excess tax benefits from employee stock plans are dependent on previously agreed-upon equity grants to our employees, vesting of those grants, stock price, and exercise behavior of our employees, which can fluctuate from quarter to quarter. Because these fluctuations are not directly related to our business operations,
Veeva excludes excess tax benefits for its internal management reporting processes.Veeva management also finds it useful to exclude excess tax benefits when assessing the level of cash provided by operating activities. Given the nature of the excess tax benefits,Veeva believes excluding it allows investors to make meaningful comparisons between our operating cash flows from quarter to quarter and those of other companies. - Stock-based compensation expenses.
Veeva excludes stock-based compensation expenses primarily because they are non-cash expenses thatVeeva excludes from its internal management reporting processes.Veeva's management also finds it useful to exclude these expenses when they assess the appropriate level of various operating expenses and resource allocations when budgeting, planning and forecasting future periods. Moreover, because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use,Veeva believes excluding stock-based compensation expenses allows investors to make meaningful comparisons between our recurring core business operating results and those of other companies. - Amortization of purchased intangibles.
Veeva incurs amortization expense for purchased intangible assets in connection with acquisitions of certain businesses and technologies. Amortization of intangible assets is a non-cash expense and is inconsistent in amount and frequency because it is significantly affected by the timing, size of acquisitions and the inherent subjective nature of purchase price allocations. Because these costs have already been incurred and cannot be recovered, and are non-cash expenses,Veeva excludes these expenses for its internal management reporting processes.Veeva's management also finds it useful to exclude these charges when assessing the appropriate level of various operating expenses and resource allocations when budgeting, planning and forecasting future periods. Investors should note that the use of intangible assets contributed toVeeva's revenues earned during the periods presented and will contribute toVeeva's future period revenues as well. - Litigation settlement. We exclude costs related to the settlement of certain litigation matters because they are non-recurring and outside the ordinary course of business. Because these costs are unrelated to our day-to-day business operations, we believe excluding them enables more consistent evaluation of our operating results.
- Income tax effects on the difference between GAAP and non-GAAP costs and expenses. The income tax effects that are excluded relate to the imputed tax impact on the difference between GAAP and non-GAAP costs and expenses due to stock-based compensation and purchased intangibles for GAAP and non-GAAP measures.
There are limitations to using non-GAAP financial measures because non-GAAP financial measures are not prepared in accordance with GAAP and may be different from non-GAAP financial measures provided by other companies. The non-GAAP financial measures are limited in value because they exclude certain items that may have a material impact upon our reported financial results. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by
Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.
The following tables reconcile the specific items excluded from GAAP metrics in the calculation of non-GAAP metrics for the periods shown below:
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (Dollars in thousands) (Unaudited) |
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The following tables reconcile the specific items excluded from GAAP metrics in the calculation of non-GAAP metrics for the periods shown below: |
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Reconciliation of Net Cash Provided by Operating Activities (GAAP basis to non-GAAP basis) |
Three months ended |
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2024 |
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2023 |
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Net cash provided by operating activities on a GAAP basis |
$ 763,516 |
|
$ 505,936 |
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Excess tax benefits from employee stock plans |
(3,121) |
|
(62,089) |
|
Net cash provided by operating activities on a non-GAAP basis |
$ 760,395 |
|
$ 443,847 |
|
Net cash used in investing activities on a GAAP basis |
$ (272,378) |
|
$ (297,394) |
|
Net cash provided by (used in) financing activities on a GAAP basis |
$ 3,828 |
|
$ (1,392) |
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Reconciliation of Financial Measures (GAAP basis to non-GAAP basis) |
Three months ended |
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2024 |
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2023 |
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Cost of subscription services revenues on a GAAP basis |
$ 78,148 |
|
$ 67,575 |
|
Stock-based compensation expense |
(1,554) |
|
(1,505) |
|
Amortization of purchased intangibles |
(1,099) |
|
(1,090) |
|
Cost of subscription services revenues on a non-GAAP basis |
$ 75,495 |
|
$ 64,980 |
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|
|
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Gross margin on subscription services revenues on a GAAP basis |
85.4 % |
|
83.7 % |
|
Stock-based compensation expense |
0.3 |
|
0.4 |
|
Amortization of purchased intangibles |
0.2 |
|
0.2 |
|
Gross margin on subscription services revenues on a non-GAAP basis |
85.9 % |
|
84.3 % |
|
|
|
|
|
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Cost of professional services and other revenues on a GAAP basis |
$ 95,736 |
|
$ 99,088 |
|
Stock-based compensation expense |
(12,535) |
|
(12,722) |
|
Amortization of purchased intangibles |
(134) |
|
(134) |
|
Cost of professional services and other revenues on a non-GAAP basis |
$ 83,067 |
|
$ 86,232 |
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|
|
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Gross margin on professional services and other revenues on a GAAP basis |
17.7 % |
|
11.4 % |
|
Stock-based compensation expense |
10.8 |
|
11.4 |
|
Amortization of purchased intangibles |
0.1 |
|
0.2 |
|
Gross margin on professional services and other revenues on a non-GAAP basis |
28.6 % |
|
23.0 % |
|
|
|
|
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Gross profit on a GAAP basis |
$ 476,461 |
|
$ 359,662 |
|
Stock-based compensation expense |
14,089 |
|
14,227 |
|
Amortization of purchased intangibles |
1,233 |
|
1,224 |
|
Gross profit on a non-GAAP basis |
$ 491,783 |
|
$ 375,113 |
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Gross margin on total revenues on a GAAP basis |
73.3 % |
|
68.3 % |
|
Stock-based compensation expense |
2.2 |
|
2.7 |
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Amortization of purchased intangibles |
0.1 |
|
0.3 |
|
Gross margin on total revenues on a non-GAAP basis |
75.6 % |
|
71.3 % |
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|
|
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Research and development expense on a GAAP basis |
$ 162,711 |
|
$ 146,960 |
|
Stock-based compensation expense |
(41,743) |
|
(38,906) |
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Amortization of purchased intangibles |
(28) |
|
(28) |
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Research and development expense on a non-GAAP basis |
$ 120,940 |
|
$ 108,026 |
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Three months ended |
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2024 |
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2023 |
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Sales and marketing expense on a GAAP basis |
$ 97,301 |
|
$ 88,503 |
|
Stock-based compensation expense |
(23,043) |
|
(20,135) |
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Amortization of purchased intangibles |
(3,469) |
|
(3,439) |
|
Sales and marketing expense on a non-GAAP basis |
$ 70,789 |
|
$ 64,929 |
|
|
|
|
|
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General and administrative expense on a GAAP basis |
$ 61,277 |
|
$ 62,669 |
|
Stock-based compensation expense |
(17,036) |
|
(17,451) |
|
Amortization of purchased intangibles |
(55) |
|
(55) |
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Litigation settlement |
(5,000) |
|
— |
|
General and administrative expense on a non-GAAP basis |
$ 39,186 |
|
$ 45,163 |
|
|
|
|
|
|
Operating expense on a GAAP basis |
$ 321,289 |
|
$ 298,132 |
|
Stock-based compensation expense |
(81,822) |
|
(76,492) |
|
Amortization of purchased intangibles |
(3,552) |
|
(3,522) |
|
Litigation settlement |
(5,000) |
|
— |
|
Operating expense on a non-GAAP basis |
$ 230,915 |
|
$ 218,118 |
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|
|
|
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Operating income on a GAAP basis |
$ 155,172 |
|
$ 61,530 |
|
Stock-based compensation expense |
95,911 |
|
90,719 |
|
Amortization of purchased intangibles |
4,785 |
|
4,746 |
|
Litigation settlement |
5,000 |
|
— |
|
Operating income on a non-GAAP basis |
$ 260,868 |
|
$ 156,995 |
|
|
|
|
|
|
Operating margin on a GAAP basis |
23.9 % |
|
11.7 % |
|
Stock-based compensation expense |
14.7 |
|
17.2 |
|
Amortization of purchased intangibles |
0.7 |
|
0.9 |
|
Litigation settlement |
0.8 |
|
— |
|
Operating margin on a non-GAAP basis |
40.1 % |
|
29.8 % |
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|
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|
|
|
Net income on a GAAP basis |
$ 161,664 |
|
$ 131,521 |
|
Stock-based compensation expense |
95,911 |
|
90,719 |
|
Amortization of purchased intangibles |
4,785 |
|
4,746 |
|
Litigation settlement |
5,000 |
|
— |
|
Income tax effect on non-GAAP adjustments(7) |
(20,408) |
|
(79,064) |
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Net income on a non-GAAP basis |
$ 246,952 |
|
$ 147,922 |
|
|
|
|
|
|
Diluted net income per share on a GAAP basis |
$ 0.98 |
|
$ 0.81 |
|
Stock-based compensation expense |
0.58 |
|
0.56 |
|
Amortization of purchased intangibles |
0.03 |
|
0.03 |
|
Litigation settlement |
0.03 |
|
— |
|
Income tax effect on non-GAAP adjustments(7) |
(0.12) |
|
(0.49) |
|
Diluted net income per share on a non-GAAP basis |
$ 1.50 |
|
$ 0.91 |
|
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|
|
|
|
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(7) |
For the three months ended |
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