Veeva Announces Fiscal 2024 First Quarter Results
Total Revenues of $526.3M, up 4% Year Over Year;
Subscription Services Revenues of $414.5M, up 3% Year Over Year
PLEASANTON, Calif., May 31, 2023 /PRNewswire/ -- Veeva Systems Inc. (NYSE: VEEV), a leading provider of industry cloud solutions for the global life sciences industry, today announced results for its first quarter ended April 30, 2023.
"It was a strong start to the year for Veeva and we are executing well on our goal to power the most critical functions for the life sciences industry," said CEO Peter Gassner. "We announced a number of new innovations, connected the industry at Veeva Commercial Summit, and continued progress in key areas across commercial and R&D."
Fiscal 2024 First Quarter Results:
- Revenues: Total revenues for the first quarter were $526.3 million, up from $505.1 million one year ago, an increase of 4% year over year. Subscription services revenues for the first quarter were $414.5 million, up from $402.6 million one year ago, an increase of 3% year over year.
- Operating Income and Non-GAAP Operating Income(1): First quarter operating income was $61.5 million, compared to $127.7 million one year ago, a decrease of 52% year over year. Non-GAAP operating income for the first quarter was $157.0 million, compared to $199.6 million one year ago, a decrease of 21% year over year.
- Net Income and Non-GAAP Net Income(1): First quarter net income was $131.5 million, compared to $100.1 million one year ago, an increase of 31% year over year. Non-GAAP net income for the first quarter was $147.9 million, compared to $159.8 million one year ago, a decrease of 7% year over year.
- Net Income per Share and Non-GAAP Net Income per Share(1): For the first quarter, fully diluted net income per share was $0.81, compared to $0.62 one year ago, while non-GAAP fully diluted net income per share was $0.91, compared to $0.99 one year ago.
- Customer Contracting Change: The previously announced customer contracting change that standardized termination for convenience (TFC) rights in our master subscription agreements went into effect on February 1, 2023. This resulted in a change in the timing of revenue for certain customer contracts to which a TFC right was added and reduced revenues, operating income and non-GAAP operating income, and net income and non-GAAP net income in the first quarter.
"We started the year strong and delivered financial results that exceeded our guidance on all metrics," said CFO Brent Bowman. "We see momentum in multiple product categories, which positions us well to deliver durable and profitable growth through 2025 and beyond."
Recent Highlights:
- Leading in Commercial with Product Excellence and Innovation — Veeva is helping the life sciences industry achieve commercial excellence through software, data, and services. Veeva's commercial leadership and proven customer success drove 11 Veeva CRM wins and five Veeva Compass wins in the quarter. In May, the company brought the industry together for Veeva Commercial Summit in Boston, one of the largest commercial life sciences gatherings in the world. Showcasing innovation to advance the industry, Veeva announced what's coming in Vault CRM — including CRM Bot, a generative AI application for Vault CRM — and announced two new Veeva Compass offerings.
- Continued Strength and Growing Opportunity in Veeva Development Cloud — Progress to establish Veeva Development Cloud as the operating system for product development continued in the quarter. Product excellence and customer success are fueling expansion as more than 400 customers have now selected applications in more than one of the five Development Cloud product suites.
- Expanding Quality Leadership — Offering a unified suite of applications to connect quality and manufacturing processes, Veeva Vault Quality is becoming the preferred choice among the life sciences industry, fueling another strong quarter with 26 wins. Veeva is building momentum for the large opportunity ahead, with more than 275 customers now using both Vault QualityDocs and Vault QMS, including 10 of the top 20 pharmas.
Financial Outlook:
Veeva is providing guidance for its fiscal second quarter ending July 31, 2023 as follows:
- Total revenues between $580 and $582 million.
- Non-GAAP operating income between $199 and $201 million(2).
- Non-GAAP fully diluted net income per share between $1.12 and $1.13(2).
Veeva is providing updated guidance for its fiscal year ending January 31, 2024 as follows:
- Total revenues between $2,360 and $2,370 million.
- Non-GAAP operating income of about $810 million(2).
- Non-GAAP fully diluted net income per share of approximately $4.59(2).
Veeva is reiterating guidance for its fiscal year ending January 31, 2025 for the following metrics:
- Total revenues of at least $2,800 million.
- Non-GAAP operating income of at least $1,000 million(2).
Conference Call Information
Prepared remarks and an investor presentation providing additional information and analysis can be found on Veeva's investor relations website at ir.veeva.com. Veeva will host a Q&A conference call at 2:00 p.m. PT today, May 31, 2023, and a replay of the call will be available on Veeva's investor relations website.
What: | Veeva Systems Fiscal 2024 First Quarter Results Conference Call |
When: | Wednesday, May 31, 2023 |
Time: | 2:00 p.m. PT (5:00 p.m. ET) |
Online Registration: | https://conferencingportals.com/event/badXudFz |
Webcast: |
____________
(1) 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.
(2) Veeva is not able, at this time, to provide GAAP targets for operating income and fully diluted net income per share for the second fiscal quarter ending July 31, 2023, the fiscal year ending January 31, 2024, or the fiscal year ending January 31, 2025, because of the difficulty of estimating certain items excluded from non-GAAP operating income and non-GAAP fully diluted net income per share that cannot be reasonably predicted, such as charges related to stock-based compensation expense. The effect of these excluded items may be significant.
About Veeva Systems
Veeva is the global leader in cloud software for the life sciences industry. Committed to innovation, product excellence, and customer success, Veeva serves more than 1,000 customers, ranging from the world's largest pharmaceutical companies to emerging biotechs. As a Public Benefit Corporation, Veeva is committed to balancing the interests of all stakeholders, including customers, employees, shareholders and the industries it serves. For more information, visit veeva.com.
Veeva uses its ir.veeva.com website as a means of disclosing material non-public information, announcing upcoming investor conferences, and for complying with its disclosure obligations under Regulation FD. Accordingly, you should monitor our investor relations website in addition to following our press releases, SEC filings, and public conference calls and webcasts.
Forward-looking Statements
This release contains forward-looking statements regarding Veeva's expected future performance and, in particular, includes quotes from management and guidance, provided as of May 31, 2023, 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 this release 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 issues related to the security or performance of our products, competitive factors, customer decisions and priorities, events that impact the life sciences industry, general macroeconomic and geopolitical events (including inflationary pressures, changes in interest rates, currency exchange fluctuations, and impacts related to Russia's invasion of Ukraine), and issues that impact our ability to hire, retain and adequately compensate talented employees. We have summarized what we believe are the principal risks to our business in a section titled "Summary of Risk Factors" on pages 9 and 10 in our filing on Form 10-K for the fiscal year ended January 31, 2023 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.
Investor Relations Contact:
Gunnar Hansen
Veeva Systems Inc.
267-460-5839
ir@veeva.com
Media Contact:
Maria Scurry
Veeva Systems Inc.
781-366-7617
pr@veeva.com
VEEVA SYSTEMS INC. | |||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||
(In thousands) | |||
(Unaudited) | |||
April 30, | January 31, | ||
Assets | |||
Current assets: | |||
Cash and cash equivalents | $ 1,093,634 | $ 886,465 | |
Short-term investments | 2,521,268 | 2,216,163 | |
Accounts receivable, net | 412,940 | 703,055 | |
Unbilled accounts receivable | 38,070 | 82,174 | |
Prepaid expenses and other current assets | 122,222 | 81,456 | |
Total current assets | 4,188,134 | 3,969,313 | |
Property and equipment, net | 50,059 | 49,817 | |
Deferred costs, net | 23,166 | 31,825 | |
Lease right-of-use assets | 52,178 | 55,336 | |
Goodwill | 439,877 | 439,877 | |
Intangible assets, net | 77,731 | 82,476 | |
Deferred income taxes | 156,375 | 136,697 | |
Other long-term assets | 35,850 | 38,955 | |
Total assets | $ 5,023,370 | $ 4,804,296 | |
Liabilities and stockholders' equity | |||
Current liabilities: | |||
Accounts payable | $ 44,404 | $ 41,678 | |
Accrued compensation and benefits | 44,358 | 44,282 | |
Accrued expenses and other current liabilities | 32,269 | 35,306 | |
Income tax payable | 4,617 | 4,946 | |
Deferred revenue | 869,920 | 869,285 | |
Lease liabilities | 10,734 | 11,306 | |
Total current liabilities | 1,006,302 | 1,006,803 | |
Deferred income taxes | 1,407 | 1,492 | |
Lease liabilities, noncurrent | 47,494 | 49,670 | |
Other long-term liabilities | 25,104 | 30,079 | |
Total liabilities | 1,080,307 | 1,088,044 | |
Stockholders' equity: | |||
Class A common stock | 2 | 2 | |
Class B common stock | — | — | |
Additional paid-in capital | 1,622,547 | 1,532,627 | |
Accumulated other comprehensive loss | (25,759) | (31,129) | |
Retained earnings | 2,346,273 | 2,214,752 | |
Total stockholders' equity | 3,943,063 | 3,716,252 | |
Total liabilities and stockholders' equity | $ 5,023,370 | $ 4,804,296 |
VEEVA SYSTEMS INC. | |||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
(In thousands, except per share data) | |||
(Unaudited) | |||
Three months ended April 30, | |||
2023 | 2022 | ||
Revenues: | |||
Subscription services(3) | $ 414,546 | $ 402,632 | |
Professional services and other(4) | 111,779 | 102,470 | |
Total revenues | 526,325 | 505,102 | |
Cost of revenues(5): | |||
Cost of subscription services | 67,575 | 58,953 | |
Cost of professional services and other | 99,088 | 80,562 | |
Total cost of revenues | 166,663 | 139,515 | |
Gross profit | 359,662 | 365,587 | |
Operating expenses(5): | |||
Research and development | 146,960 | 113,475 | |
Sales and marketing | 88,503 | 76,115 | |
General and administrative | 62,669 | 48,325 | |
Total operating expenses | 298,132 | 237,915 | |
Operating income | 61,530 | 127,672 | |
Other income, net | 30,248 | 2,709 | |
Income before income taxes | 91,778 | 130,381 | |
Income tax (benefit) provision | (39,743) | 30,266 | |
Net income | $ 131,521 | $ 100,115 | |
Net income per share: | |||
Basic | $ 0.82 | $ 0.65 | |
Diluted | $ 0.81 | $ 0.62 | |
Weighted-average shares used to compute net income per share: | |||
Basic | 159,852 | 154,514 | |
Diluted | 162,521 | 161,928 | |
Other comprehensive income: | |||
Net change in unrealized loss on available-for-sale investments | $ 5,428 | $ (10,999) | |
Net change in cumulative foreign currency translation loss | (58) | (1,254) | |
Comprehensive income | $ 136,891 | $ 87,862 | |
(3) Includes subscription services revenues from the following product areas: | |||
Veeva Commercial Solutions | $ 239,324 | $ 227,724 | |
Veeva R&D Solutions | 175,222 | 174,908 | |
Total subscription services | $ 414,546 | $ 402,632 | |
(4) Includes professional services and other revenues from the following product areas: | |||
Veeva Commercial Solutions | $ 44,864 | $ 43,321 | |
Veeva R&D Solutions | 66,915 | 59,149 | |
Total professional services and other | $ 111,779 | $ 102,470 | |
(5) Includes stock-based compensation as follows: | |||
Cost of revenues: | |||
Cost of subscription services | 1,505 | 1,277 | |
Cost of professional services and other | 12,722 | 9,990 | |
Research and development | 38,906 | 25,823 | |
Sales and marketing | 20,135 | 16,893 | |
General and administrative | 17,451 | 13,151 | |
Total stock-based compensation | $ 90,719 | $ 67,134 |
VEEVA SYSTEMS INC. | |||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||
(In thousands) | |||
(Unaudited) | |||
Three months ended April 30, | |||
2023 | 2022 | ||
Cash flows from operating activities | |||
Net income | $ 131,521 | $ 100,115 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 7,549 | 7,058 | |
Reduction of operating lease right-of-use assets | 3,060 | 2,948 | |
(Accretion) amortization of discount on short-term investments | (3,407) | 1,056 | |
Stock-based compensation | 90,719 | 67,134 | |
Amortization of deferred costs | 5,052 | 5,993 | |
Deferred income taxes | (21,514) | (32,432) | |
Loss (gain) on foreign currency from mark-to-market derivative | 180 | (582) | |
Bad debt expense (recovery) | 155 | (25) | |
Changes in operating assets and liabilities: | |||
Accounts receivable | 289,960 | 301,482 | |
Unbilled accounts receivable | 44,104 | 1,295 | |
Deferred costs | 3,607 | (3,079) | |
Other current and long-term assets | (36,298) | (7,563) | |
Accounts payable | 1,955 | 5,121 | |
Accrued expenses and other current liabilities | (3,344) | (2,336) | |
Income taxes payable | (329) | 43,223 | |
Deferred revenue | (1,221) | (7,471) | |
Operating lease liabilities | (2,693) | (2,031) | |
Other long-term liabilities | (3,120) | 1,121 | |
Net cash provided by operating activities | 505,936 | 481,027 | |
Cash flows from investing activities | |||
Purchases of short-term investments | (612,492) | (572,344) | |
Maturities and sales of short-term investments | 318,056 | 196,190 | |
Long-term assets | (2,958) | (2,333) | |
Net cash used in investing activities | (297,394) | (378,487) | |
Cash flows from financing activities | |||
Proceeds from exercise of common stock options | 15,233 | 16,291 | |
Taxes paid related to net share settlement of equity awards | (16,625) | (14,999) | |
Net cash (used in) provided by financing activities | (1,392) | 1,292 | |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 19 | (1,874) | |
By: PR Newswire Association LLC.
- 31 May 2023
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