Veeva Systems Inc. · NYSE:VEEV
Veeva Systems — Q3 2023 Earnings Presentation
27 slides from Veeva Systems's earnings presentation, Dec 1, 2022
Slide 1: Q3'23 Quarterly Results
Q3’23 Quarterly Results December 1, 2022
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 December 1, 2022 about Veeva’s expected future financial results. Estimating guidance ac
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 $million $2,500 Subscription Revenue Services Revenue 2,143-2,145 $2,000 1,851 418-420 1,465 367 $1,500 1,104 286 $1,000 862 208 ~ 1,725 168 1,484 $500 1,179 896 694 $0 FY 2019 FY 2020 1 FY 2021 1 FY 2022 FY 2023 Guidance 2 Y/Y Growth Total 25% 28%1 33%1 26% ~16%2 % Mix Commer
Slide 5: Total Revenue – Quarterly
Total Revenue – Quarterly $million $600 Subscription Revenue Services Revenue 552 551-553 534 505 476 485 $500 111 99-101 106 90 102 95 $400 $300 429 442 ~ 452 $200 381 396 403 $100 $0 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Guidance 1 Y/Y Growth Total 26% 22% 16% 17% 16% ~14%1 % Mix Commercial Solution
Slide 6: Subscription Revenue – Annual
Subscription Revenue – Annual $million $2,000 R&D Solutions Commercial Solutions $1,800 ~ 1,725 $1,600 1,484 $1,400 1,179 ~ 942 $1,200 $1,000 896 876 $800 694 745 $600 594 $400 494 ~ 783 608 $200 435 200 303 $0 FY 2019 FY 2020 1 FY 2021 1 FY 2022 FY 2023 Guidance2 Y/Y Growth Total Subscription 24% 2
Slide 7: Subscription Revenue – Quarterly
$million Subscription Revenue – Quarterly R&D Solutions Commercial Solutions 442 $450 429 396 403 $400 381 $350 236 239 $300 227 228 223 $250 ~ 452 $200 $150 $100 192 202 158 168 175 $50 $0 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Guidance 1 Y/Y Growth Total Subscription 26% 23% 18% 17% 16% ~14%1 Commerc
Slide 8: Non-GAAP Gross Margin – Annual
Non-GAAP Gross Margin – Annual Subscription Gross Margin Services Gross Margin Total Gross Margin 73.3% 74.7% 74.7% 75.2% 83.8% 85.5% 85.2% 85.4% 29.8% 31.3% 34.0% 28.1% 1 FY 2019 FY 2020 1 FY 2021 FY 2022 Fiscal Year Ending January 31 A reconciliation of GAAP to non-GAAP measures is set forth in th
Slide 9: Non-GAAP Gross Margin – Quarterly
Non-GAAP Gross Margin – Quarterly Subscription Gross Margin Services Gross Margin Total Gross Margin 75.3% 74.5% 74.8% 74.7% 75.1% 84.9% 85.4% 86.0% 85.7% 85.7% 36.9% 31.3% 30.2% 32.5% 26.6% Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Fiscal Year Ending January 31 A reconciliation of GAAP to non-GAAP measures is
Slide 10: Non-GAAP Operating Income – Annual
Non-GAAP Operating Income – Annual $million $900 $800 $700 $600 $500 $400 820 759 $300 583 $200 412 307 $100 $0 1 1 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Guidance 2 Non-GAAP 35.6% 37.3%1 39.8% 41.0% ~38%2 Operating Margin Fiscal Year Ending January 31 A reconciliation of GAAP to non-GAAP measures
Slide 11: Non-GAAP Operating Income – Quarterly
Non-GAAP Operating Income – Quarterly $million $250 $200 $150 219 $100 199 200 202 ~ 199 186 $50 $0 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Guidance1 Non-GAAP 41.9% 38.4% 39.5% 37.8% 39.7% ~36%1 Operating Margin Fiscal Year Ending January 31 A reconciliation of GAAP to non-GAAP measures is set forth in
Slide 12: Operating Cash Flow – Annual
Operating Cash Flow – Annual $million Non-GAAP Operating Cash Flow (excl ETB) Excess Tax Benefit (ETB) $800 764 56 $700 $600 551 $500 81 437 $400 50 311 708 ~ 740 $300 46 471 $200 387 265 $100 $0 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Non-GAAP Guidance 1 Non-GAAP 31% 35% 32% 38% ~34%1 OCF Margin Fi
Slide 13: Operating Cash Flow – Quarterly
Operating Cash Flow – Quarterly $million Non-GAAP Operating Cash Flow (excl ETB & RDT) Excess Tax Benefit (ETB) R&D Tax (RDT) 478 481 17 3 $450 $350 $250 461 478 93 143 $150 119 113 1- 2 18 10 68 54 142 22 129 $50 101 103 11 47 43 (38) $(50) Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Fiscal Yea
Slide 14: Calculated Billings – Annual
Calculated Billings – Annual $million $2,000 $1,500 ~ 2,260 $1,000 1,950 1,599 1,193 $500 947 $0 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Guidance1 Y/Y Growth 27% 26% 34% 22% ~16%1 Fiscal Year Ending January 31 Calculated billings is defined in the Appendix 1 Guidance issued on December 1, 2022. Our
Slide 15: Calculated Billings – Quarterly
Calculated Billings – Quarterly $million $1,000 $900 $800 $700 $600 $500 ~ 909 $400 804 688 $300 499 478 $200 421 406 373 319 $100 $0 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Guidance1 Fiscal Year Ending January 31 Calculated billings is defined in the Appendix. There are numerous facto
Slide 16: Cash, Cash Equivalents, and ST Investments – Quarterly
Cash, Cash Equivalents, and ST Investments – Quarterly $million $3,500 $3,000 $2,500 $2,000 $1,500 2,919 3,023 2,839 2,351 2,376 $1,000 $500 $0 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Fiscal Year Ending January 31 Copyright © Veeva Systems 2022 16
Slide 17: Employee Headcount – Quarterly
Employee Headcount – Quarterly 7,000 6,000 5,000 4,000 6,503 6,020 5,482 5,685 3,000 5,182 2,000 1,000 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Quarterly Net 256 300 203 335 483 Additions Y/Y Growth 20% 22% 21% 22% 25% Fiscal Year Ending January 31 Copyright © Veeva Systems 2022 17
Slide 18: FY 2023 Guidance
Guidance Total Revenue $2,143-2,145 million Subscription Revenue ~$1,725 million Commercial Solutions Subscription Revenue ~$942 million R&D Solutions Subscription Revenue ~$783 million Services Revenue $418-420 million FY 2023 Guidance Non-GAAP Operating Income ~$820 million Non-GAAP Fully Diluted
Slide 19: Q4'23 Guidance
Guidance Total Revenue $551-553 million Subscription Revenue ~$452 million Q4’23 Guidance Services Revenue Non-GAAP Operating Income $99-101 million $199 million Non-GAAP Fully Diluted Net Income per Share $1.05 Calculated Billings ~$909 million Guidance issued on December 1, 2022. Our Q4’23 total r
Slide 20: Appendix
V Appendix
Slide 21: Current Revenue Alignment
Current Revenue Alignment FY2019 FY20201 Q1'FY21 Q2'FY21 Q3'FY21 Q4'FY21 FY20211 Q1'FY22 Q2'FY22 Q3'FY22 Q4'FY22 FY2022 Q1'FY23 Q2'FY23 Q3'FY23 Commercial Solutions 494.3 593.6 176.6 180.9 189.9 197.5 744.9 207.8 218.1 223.2 227.3 876.5 227.7 236.4 239.3 R&D Solutions 200.1 302.7 93.7 102.6 113.1 12
Slide 22: Appendix
Appendix • 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 (e.g., any tax benefit related to our CEO’s planned exercise of his option to purchase common stock,
Slide 23: Reconciliation of GAAP to non-GAAP Measures
Reconciliation of GAAP to non-GAAP Measures FY'19 FY'20 FY'21 FY'22 Gross margin on total revenues on a GAAP basis 71.6 % 72.5 % 72.1 % 72.8 % Stock-based compensation expense 1.4 % 1.8 % 2.2 % 2.2 % Amortization of purchased intangibles 0.3 % 0.4 % 0.4 % 0.2 % Gross margin on total revenues on a no
Slide 24: Reconciliation of GAAP to non-GAAP Measures
Reconciliation of GAAP to non-GAAP Measures FY'19 FY'20 FY'21 FY'22 Operating income on a GAAP basis $ 222.9 $ 286.2 $ 377.8 $ 505.5 Stock-based compensation expense 76.4 115.9 185.0 234.6 Amortization of purchased intangibles 7.0 10.1 20.0 18.5 Deferred compensation associated with Zinc Ahead acqui
Slide 25: Reconciliation of GAAP to non-GAAP Measures
Reconciliation of GAAP to non-GAAP Measures Q3 FY'22 Q4 FY'22 Q1 FY'23 Q2 FY'23 Q3 FY'23 Gross margin on total revenues on a GAAP basis 72.8 % 72.0 % 72.4 % 71.6 % 72.1 % Stock-based compensation expense 2.3 % 2.2 % 2.2 % 2.9 % 2.7 % Amortization of purchased intangibles 0.2 % 0.3 % 0.2 % 0.2 % 0.3
Slide 26: Reconciliation of GAAP to non-GAAP Measures
Reconciliation of GAAP to non-GAAP Measures FY'19 FY'20 FY'21 FY'22 Operating cash flow on a GAAP basis $ 310.8 $ 437.4 $ 551.2 $ 764.5 Excess Tax Benefit (ETB) (45.8) (50.4) (80.7) (56.2) R&D Tax (RDT) - - - - Operating cash flow on a non-GAAP basis $ 265.0 $ 387.0 $ 470.6 $ 708.3 FY'19 FY'20 FY'21
Slide 27: Reconciliation of GAAP to non-GAAP Measures
Reconciliation of GAAP to non-GAAP Measures Q4 FY'21 Q1 FY'22 Q2 FY'22 Q3 FY'22 Q4 FY'22 Q1 FY'23 Q2 FY'23 Q3 FY'23 Operating cash flow on a GAAP basis $ 68.4 $ 478.4 $ 119.1 $ 113.0 $ 54.1 $ 481.0 $ 93.4 $ 142.7 Excess Tax Benefit (ETB) (21.6) (17.5) (17.6) (10.4) (10.7) (3.0) (2.1) (0.9) R&D Tax (