Slide 1: Q3'24 Quarterly Results
Q3’24 Quarterly Results December 6, 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 December 6, 2023, about Veeva’s expected future financial results. Estimating guidance
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 -$90M $million estimated TFC $3,000 Subscription Revenue Services Revenue impact At least 2,750 $2,500 2,353-2,355 2,155 1,851 456-458 $2,000 422 1,465 367 $1,500 1,104 286 $1,000 208 ~ 1,897 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 -$12M Includes -$9M estimated TFC Included -$18M TFC impact impact $million TFC impact Included -$51M Subscription Revenue Services Revenue TFC impact 617 620-622 590 $600 552 563 526 122 103-105 103 120 $500 111 112 $400 $300 495 ~ 517 442 460 471 $200 415 $100 $-
Slide 6: Non-GAAP Operating Income – Annual
Non-GAAP Operating Income – Annual $million Includes -$90M At least 1,000 $1,000 estimated TFC impact $800 $600 $400 830 ~ 830 759 583 $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 Included -$12M Includes -$9M TFC impact estimated TFC $250 Included -$18M impact TFC impact $200 Included -$51M TFC impact $150 235 ~ 227 219 209 212 $100 157 $50 $- 1 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Guidance Non-GAAP 39.7% 37.2% 29.8% 35.9% 38.1% ~
Slide 8: Normalized Billings – Annual
Normalized Billings – Annual $million $3,000 $2,500 $2,000 $1,500 ~ 2,576 2,269 $1,000 1,972 $500 $- 1 FY 2022 FY 2023 FY 2024 Guidance Y/Y Growth2 23% 16% ~ 13% Fiscal Year Ending January 31 Normalized billings is defined in the Appendix. 1 Guidance issued on December 6, 2023. Our FY 2024 normalize
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 ~ 870 $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% ~ 37% OCF Marg
Slide 10: FY 2024 Guidance
Guidance Total Revenue $2,353-2,355 million Subscription Revenue ~$1,897 million Commercial Solutions Subscription Revenue ~$993 million R&D Solutions Subscription Revenue ~$904 million Services Revenue $456-458 million FY 2024 Guidance Non-GAAP Operating Income ~$830 million Non-GAAP Fully Diluted
Slide 11: Q4'24 Guidance
Guidance Total Revenue $620-622 million Subscription Revenue ~$517 million Q4’24 Guidance Services Revenue Non-GAAP Operating Income $103-105 million ~$227 million Non-GAAP Fully Diluted Net Income per Share ~$1.30 Normalized Billings ~$1,040 million Guidance issued on December 6, 2023. Our Q4’24 gu
Slide 12: FY 2025 Guidance
Guidance FY 2025 Guidance Total Revenue Non-GAAP Operating Income At least $2.75 billion At least $1.0 billion Guidance issued on December 6, 2023. Our FY 2025 guidance assumes foreign currency exchange rates will remain constant, which reflects FX headwinds of roughly $10 million to total revenue a
Slide 13: Appendix
V Appendix
Slide 14: Definitions
Definitions • Excess Tax Benefit (ETB) – The realized tax benefit related to employee equity compensation, including the vesting of restricted stock units and the exercising and selling of stock options. • Calculated Billings – Revenue for the period plus the change in deferred revenue from the imme
Slide 15: Quarterly Information
Quarterly Information Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Revenue Commercial Solutions - Subscription 227.3 227.7 236.4 239.3 242.9 239.3 243.4 251.2 7% 7% 5% 3% 5% R&D Solutions - Subscription 168.4 174.9 192.3 202.3 217.3 175.2 227.2 243.7 28% 29% 0% 18% 2
Slide 16: Annual Information
Annual Information Y/Y Growth FY 2020 FY 2021 FY 2022 FY 2023 FY 2020 FY 2021 FY 2022 FY 2023 Revenue Commercial Solutions - Subscription 594 745 876 946 20% 25% 18% 8% R&D Solutions - Subscription 303 435 608 787 51% 44% 40% 30% Total Subscription Revenue ($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 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Gross margin on total revenues on a GAAP basis 72.0 % 72.4 % 71.6 % 72.1 % 70.8 % 68.3 % 71.4 % 72.8 % Stock-based compensation expense 2.2 % 2.2 % 2.9 % 2.7 % 2.7 % 2.7 % 2.7 % 2.4 % 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