Slide 1: Q2'24 Quarterly Results
Q2’24 Quarterly Results August 30, 2023
Slide 2: Safe Harbor and Other Information
Safe Harbor and Other Information This presentation and associated commentary contain forward-looking statements regarding Veeva’s expected future performance and, in particular, includes guidance, provided as of August 30, 2023, about Veeva’s expected future financial results. Estimating guidance a
Slide 3: Statement Regarding Use of Non-GAAP Financial Measures
Statement Regarding Use of Non-GAAP Financial Measures We provide the following non-GAAP measures, which we define as financial information that has not been prepared in accordance with generally accepted accounting principles in the United States, or GAAP: Non-GAAP gross margin, non-GAAP operating
Slide 4: Total Revenue – Annual
Total Revenue – Annual Includes -$95M $million estimated TFC $3,000 Subscription Revenue Services Revenue impact At least 2,800 $2,500 2,365-2,370 2,155 1,851 470-475 $2,000 422 1,465 367 $1,500 1,104 286 $1,000 208 ~ 1,895 1,733 1,484 $500 1,179 896 $- 1 1 2 2 FY 2020 FY 2021 FY 2022 FY 2023 FY 202
Slide 5: Total Revenue – Quarterly
Total Revenue – Quarterly Included -$18M Includes -$12M estimated TFC TFC impact impact $million Included -$51M Subscription Revenue Services Revenue TFC impact 614-616 590 $600 552 563 534 526 121-123 103 120 $500 111 106 112 $400 $300 460 471 ~ 493 $200 429 442 415 $100 $- 1 Q2'23 Q3'23 Q4'23 Q1'2
Slide 6: Non-GAAP Operating Income – Annual
Non-GAAP Operating Income – Annual $million At least 1,000 $1,000 Includes -$95M estimated TFC impact $800 $600 $400 830 ~ 820 759 583 $200 412 $- 1 1 2 2 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Guidance FY 2025 Guidance Non-GAAP 37.3% 39.8% 41.0% 38.5% ~ 35% - Operating Margin Fiscal Year Ending Ja
Slide 7: Non-GAAP Operating Income – Quarterly
Non-GAAP Operating Income – Quarterly $million Includes -$12M estimated TFC $250 Included -$18M impact TFC impact $200 Included -$51M TFC impact $150 219 212 223-225 $100 202 209 157 $50 $- 1 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Guidance Non-GAAP 37.8% 39.7% 37.2% 29.8% 35.9% ~ 37% Operating Margin F
Slide 8: Normalized Billings – Annual
Normalized Billings – Annual $million $3,000 $2,500 $2,000 $1,500 ~ 2,615 2,269 $1,000 1,972 $500 $- FY 2022 FY 2023 FY 2024 Guidance 1 Y/Y Growth2 23% 16% ~ 15% Fiscal Year Ending January 31 Normalized billings is defined in the Appendix. 1 Guidance issued on August 30, 2023. Our FY 2024 normalized
Slide 9: Operating Cash Flow – Annual
Operating Cash Flow – Annual $million $1,000 Non-GAAP Operating Cash Flow (excl ETB) Excess Tax Benefit (ETB) $900 764 780 $800 56 82 $700 $600 551 $500 437 81 50 ~ 860 $400 708 698 $300 471 $200 387 $100 $- 1 2 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Guidance Non-GAAP 35% 32% 38% 32% ~ 36% OCF Marg
Slide 10: FY 2024 Guidance
Guidance Total Revenue $2,365-2,370 million Subscription Revenue ~$1,895 million Commercial Solutions Subscription Revenue ~$985 million R&D Solutions Subscription Revenue ~$910 million Services Revenue $470-475 million FY 2024 Guidance Non-GAAP Operating Income ~$820 million Non-GAAP Fully Diluted
Slide 11: Q3'24 Guidance
Guidance Total Revenue $614-616 million Subscription Revenue ~$493 million Q3’24 Guidance Services Revenue Non-GAAP Operating Income $121-123 million $223-225 million Non-GAAP Fully Diluted Net Income per Share $1.26-1.27 Normalized Billings ~$436 million Guidance issued on August 30, 2023. Our Q3’2
Slide 12: FY 2025 Guidance
Guidance FY 2025 Guidance Total Revenue Non-GAAP Operating Income At least $2.8 billion At least $1.0 billion Guidance issued on August 30, 2023. We are not able, at this time, to provide GAAP targets for operating income for the fiscal year ending January 31, 2025 because of the difficulty of estim
Slide 13: Appendix
V Appendix
Slide 14: Definitions
Definitions • Excess Tax Benefit (ETB) – The realized tax benefit related to employee equity compensation, including the vesting of restricted stock units and the exercising and selling of stock options. • Calculated Billings – Revenue for the period plus the change in deferred revenue from the imme
Slide 15: Quarterly Information
Quarterly Information Y/Y Growth Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Revenue Commercial Solutions - Subscription 223.2 227.3 227.7 236.4 239.3 242.9 239.3 243.4 8% 7% 7% 5% 3% R&D Solutions - Subscription 157.6 168.4 174.9 192.3 202.3 217.3 175.2 227.2 30% 2
Slide 16: Annual Information
Annual Information Y/Y Growth FY 2020 FY 2021 FY 2022 FY 2023 FY 2020 FY 2021 FY 2022 FY 2023 Revenue Commercial Solutions - Subscription 594 745 876 946 20% 25% 18% 8% R&D Solutions - Subscription 303 435 608 787 51% 44% 40% 30% Total Subscription Revenue ($M) 896 1,179 1,484 1,733 29% 32% 26% 17%
Slide 17: Reconciliation of GAAP to non-GAAP Measures
Reconciliation of GAAP to non-GAAP Measures Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Gross margin on total revenues on a GAAP basis 72.8 % 72.0 % 72.4 % 71.6 % 72.1 % 70.8 % 68.3 % 71.4 % Stock-based compensation expense 2.3 % 2.2 % 2.2 % 2.9 % 2.7 % 2.7 % 2.7 % 2.7 % Amortization of purchase
Slide 18: Reconciliation of GAAP to non-GAAP Measures
Reconciliation of GAAP to non-GAAP Measures FY 2020 FY 2021 FY 2022 FY 2023 Gross margin on total revenues on a GAAP basis 72.5 % 72.1 % 72.8 % 71.7 % Stock-based compensation expense 1.8 % 2.2 % 2.2 % 2.6 % Amortization of purchased intangibles 0.4 % 0.4 % 0.2 % 0.2 % Gross margin on total revenues
Slide 19: Customer Contracting Change
Customer Contracting Change Standardizing Termination for Convenience (TFC) Rights Historically As of February 1, 2023 • Most customer orders had a • More orders are multi-year one-year term, thus TFC rights in duration were not meaningful • TFC rights standardized for • TFC rights differed customer
Slide 20: Impact of TFC on Subscription Revenue Timing
Impact of TFC on Subscription Revenue Timing EXAMPLE 1: Multi-Year Ramping Deal without TFC Invoice/Billings Subscription Revenue 6 6 6 Revenue is recognized ratably over the duration of 4 4 4 4 the committed term 2 Year 1 Year 2 Year 3 Renewal EXAMPLE 2: Multi-Year Ramping Deal with TFC Invoice/Bil
Slide 21: Key Takeaways - TFC Change
Key Takeaways - TFC Change • Consistent TFC treatment of customers with multi-year ramping deals • With continued execution, we do not expect an impact to: − Cash flows − Billings − Expected total revenue on multi-year ramping deals Copyright © Veeva Systems 2023 21