Slide 1: Q4'23 Quarterly Results
Q4’23 Quarterly Results March 1, 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 March 1, 2023 about Veeva’s expected future financial results. Estimating guidance accur
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: TFC Impact to Q1'24 and FY 2024 Guidance
TFC Impact to Q1’24 and FY 2024 Guidance Q1'24 Guidance1 FY 2024 Guidance1 Guidance TFC Impact2 Guidance TFC Impact2,3 Total Revenue $514-516M -$52M $2,350-2,360M -$95M Subscription Revenue $405M -$52M $1,880M -$95M Services Revenue $109-111M - $470-480M - Non-GAAP Operating Income $141-143M -$52M $
Slide 5: Total Revenue – Annual
Total Revenue – Annual Includes -$95M $million estimated TFC $3,000 Subscription Revenue Services Revenue impact At least 2,800 $2,500 2,350-2,360 2,155 1,851 470-480 $2,000 422 1,465 367 $1,500 1,104 286 $1,000 208 ~ 1,880 1,733 1,484 $500 1,179 896 $- FY 2020 1 FY 2021 1 FY 2022 FY 2023 FY 2024 Gu
Slide 6: Total Revenue – Quarterly
Total Revenue – Quarterly Includes -$52M $million estimated TFC Subscription Revenue Services Revenue impact $600 552 563 534 514-516 505 485 103 $500 111 106 102 109-111 90 $400 $300 429 442 460 $200 396 403 ~ 405 $100 $- Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Guidance 1 Y/Y Growth Total 22% 16% 17% 1
Slide 7: Subscription Revenue – Annual
Subscription Revenue – Annual Includes -$95M estimated TFC $million impact $2,000 R&D Solutions Commercial Solutions ~ 1,880 $1,800 1,733 $1,600 1,484 $1,400 ~ 972 1,179 946 $1,200 $1,000 896 876 $800 745 $600 594 $400 787 ~ 908 608 $200 435 303 $- 1 1 2 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Guida
Slide 8: Subscription Revenue – Quarterly
Subscription Revenue – Quarterly $million Includes -$52M estimated TFC $500 R&D Solutions Commercial Solutions impact 460 429 442 $450 ~ 405 396 403 $400 $350 243 236 239 $300 227 228 $250 $200 $150 $100 192 202 217 168 175 $50 $- 1 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Guidance Y/Y Growth Total 2
Slide 9: Non-GAAP Gross Margin – Annual
Non-GAAP Gross Margin – Annual Subscription Gross Margin Services Gross Margin Total Gross Margin 74.7% 74.7% 75.2% 74.6% 85.5% 85.2% 85.4% 85.8% 31.3% 34.0% 28.1% 28.7% 1 1 FY 2020 FY 2021 FY 2022 FY 2023 Fiscal Year Ending January 31 A reconciliation of GAAP to non-GAAP measures is set forth in th
Slide 10: Non-GAAP Gross Margin – Quarterly
Non-GAAP Gross Margin – Quarterly Subscription Gross Margin Services Gross Margin Total Gross Margin 74.5% 74.8% 74.7% 75.1% 73.7% 85.4% 86.0% 85.7% 85.7% 85.6% 31.3% 30.2% 32.5% 26.6% 20.6% Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Fiscal Year Ending January 31 A reconciliation of GAAP to non-GAAP measures is
Slide 11: 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 ~ 800 759 583 $200 412 $- 1 1 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Guidance 2 FY 2025 Guidance 2 Non-GAAP 37.3% 39.8% 41.0% 38.5% ~ 34% - Operating Margin Fiscal Year Ending Ja
Slide 12: Non-GAAP Operating Income – Quarterly
Non-GAAP Operating Income – Quarterly $million $250 $200 Includes -$52M estimated TFC impact $150 219 209 $100 200 202 186 141-143 $50 $- Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Guidance 1 Non-GAAP 38.4% 39.5% 37.8% 39.7% 37.2% ~ 28% Operating Margin Fiscal Year Ending January 31 A reconciliation of GAA
Slide 13: Operating Cash Flow – Annual
Operating Cash Flow – Annual $million $900 Non-GAAP Operating Cash Flow (excl ETB) Excess Tax Benefit (ETB) 764 780 $800 56 82 $700 $600 551 $500 81 437 $400 50 ~ 810 708 698 $300 471 $200 387 $100 $- 1 2 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Guidance Non-GAAP 35% 32% 38% 32% ~ 34% OCF Margin Fisc
Slide 14: Operating Cash Flow – Quarterly
Operating Cash Flow – Quarterly $million Non-GAAP Operating Cash Flow (excl ETB) Excess Tax Benefit (ETB) 478 481 $475 17 3 $375 $275 461 478 $175 143 119 113 1 18 10 93 54 2 63 $75 142 101 103 11 91 43 76 (13) $(25) 1 1 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Fiscal Year Ending January 31 A
Slide 15: Normalized Billings – Annual
Normalized Billings – Annual $million $3,000 $2,500 $2,000 $1,500 ~ 2,610 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 March 1, 2023. Our FY 2024 normalized b
Slide 16: Normalized Billings – Quarterly
Normalized Billings – Quarterly $million $1,000 $900 $800 $700 $600 $500 922 $400 804 $300 505 ~ 538 470 $200 425 410 333 373 $100 $- Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Guidance 1 Fiscal Year Ending January 31 Normalized billings is defined in the Appendix. There are numerous fact
Slide 17: 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 3,023 3,103 2,839 2,919 2,376 $1,000 $500 $- Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Fiscal Year Ending January 31 Copyright © Veeva Systems 2023 17
Slide 18: Employee Headcount – Quarterly
Employee Headcount – Quarterly 8,000 7,000 6,000 5,000 4,000 6,503 6,744 3,000 5,685 6,020 5,482 2,000 1,000 - Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Quarterly Net 300 203 335 483 241 Additions Y/Y Growth 22% 21% 22% 25% 23% Fiscal Year Ending January 31 Copyright © Veeva Systems 2023 18
Slide 19: FY 2024 Guidance
Guidance Total Revenue $2,350-2,360 million Subscription Revenue ~$1,880 million Commercial Solutions Subscription Revenue ~$972 million R&D Solutions Subscription Revenue ~$908 million Services Revenue $470-480 million FY 2024 Guidance Non-GAAP Operating Income ~$800 million Non-GAAP Fully Diluted
Slide 20: Q1'24 Guidance
Guidance Total Revenue $514-516 million Subscription Revenue ~$405 million Q1’24 Guidance Services Revenue Non-GAAP Operating Income $109-111 million $141-143 million Non-GAAP Fully Diluted Net Income per Share $0.79-0.80 Normalized Billings ~$538 million Guidance issued on March 1, 2023. Our Q1’24
Slide 21: FY 2025 Initial Guidance
Guidance FY 2025 Total Revenue At least $2.8 billion Initial Guidance Non-GAAP Operating Income At least $1.0 billion Guidance issued on March 1, 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
Slide 22: Appendix
V Appendix
Slide 23: 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 will be • TFC rights differed customer to stand
Slide 24: 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 25: 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 25
Slide 26: Current Revenue Alignment
Current Revenue Alignment FY 2020 1 FY 2021 1 Q1'22 Q2'22 Q3'22 Q4'22 FY 2022 Q1'23 Q2'23 Q3'23 Q4'23 FY 2023 Commercial Solutions 593.6 744.9 207.8 218.1 223.2 227.3 876.5 227.7 236.4 239.3 242.9 946.2 R&D Solutions 302.7 434.6 133.3 148.3 157.6 168.4 607.5 174.9 192.3 202.3 217.3 786.7 Total Subsc
Slide 27: 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 (e.g., any tax benefit related to our CEO’s exercise of his option to purchase common stock. • Ca
Slide 28: 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 29: Reconciliation of GAAP to non-GAAP Measures
Reconciliation of GAAP to non-GAAP Measures FY 2020 FY 2021 FY 2022 FY 2023 Operating income on a GAAP basis $ 286.2 $ 377.8 $ 505.5 $ 459.1 Stock-based compensation expense 115.9 185.0 234.6 351.9 Amortization of purchased intangibles 10.1 20.0 18.5 19.5 Operating income on a non-GAAP basis $ 412.2
Slide 30: Reconciliation of GAAP to non-GAAP Measures
Reconciliation of GAAP to non-GAAP Measures Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Gross margin on total revenues on a GAAP basis 72.0 % 72.4 % 71.6 % 72.1 % 70.8 % Stock-based compensation expense 2.2 % 2.2 % 2.9 % 2.7 % 2.7 % Amortization of purchased intangibles 0.3 % 0.2 % 0.2 % 0.3 % 0.2 % Gross margin
Slide 31: Reconciliation of GAAP to non-GAAP Measures
Reconciliation of GAAP to non-GAAP Measures FY 2020 FY 2021 FY 2022 FY 2023 Operating cash flow on a GAAP basis $ 437.4 $ 551.2 $ 764.5 $ 780.5 Excess Tax Benefit (ETB) (50.4) (80.7) (56.2) (82.0) Operating cash flow on a non-GAAP basis $ 387.0 $ 470.6 $ 708.3 $ 698.5 FY 2020 FY 2021 FY 2022 FY 2023
Slide 32: Reconciliation of GAAP to non-GAAP Measures
Reconciliation of GAAP to non-GAAP Measures Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Operating cash flow on a GAAP basis $ 478.4 $ 119.1 $ 113.0 $ 54.1 $ 481.0 $ 93.4 $ 142.7 $ 63.3 Excess Tax Benefit (ETB) (17.5) (17.6) (10.4) (10.7) (3.0) (2.1) (0.9) (76.0) Operating cash flow on a non-GAAP
Slide 33: Reconciliation of Calculated Billings to Normalized Billings
Reconciliation of Calculated Billings to Normalized Billings Q1'22 Q2'22 Q3'22 Q4'22 FY 2022 Q1'23 Q2'23 Q3'23 Q4'23 FY 2023 Calculated Billings 421 406 319 804 1,950 499 478 374 926 2,277 Customer Term Changes 4 4 14 (0) 23 6 (8) (1) (4) (7) Normalized Billings 425 410 333 804 1,972 505 470 373 922