Total Revenues of $676.2M, up 15% Year Over Year;Subscription Services Revenues of $561.3M, up 19% Year Over Year
PLEASANTON, Calif., Aug. 28, 2024 /PRNewswire/ -- Veeva Systems Inc. (NYSE:VEEV), a leading provider of industry cloud solutions for the global life sciences industry, today announced results for its second quarter ended July 31, 2024.
"It was another quarter of great execution, with major product advances in clinical and CRM that position us well for the industry cloud opportunity we see ahead," said CEO Peter Gassner. "Thanks to the team's focus on product excellence and customer success, we also had some very strategic wins that can pave the way for future opportunities."
Fiscal 2025 Second Quarter Results:
Revenues(1): Total revenues for the second quarter were $676.2 million, up from $590.2 million one year ago, an increase of 15% year over year. Subscription services revenues for the second quarter were $561.3 million, up from $470.6 million one year ago, an increase of 19% year over year.
Operating Income and Non-GAAP Operating Income(1)(2): Second quarter operating income was $166.5 million, compared to $104.0 million one year ago, an increase of 60% year over year. Non-GAAP operating income for the second quarter was $279.8 million, compared to $211.9 million one year ago, an increase of 32% year over year.
Net Income and Non-GAAP Net Income(1)(2): Second quarter net income was $171.0 million, compared to $111.6 million one year ago, an increase of 53% year over year. Non-GAAP net income for the second quarter was $267.3 million, compared to $198.0 million one year ago, an increase of 35% year over year.
Net Income per Share and Non-GAAP Net Income per Share(1)(2): For the second quarter, fully diluted net income per share was $1.04, compared to $0.68 one year ago, while non-GAAP fully diluted net income per share was $1.62, compared to $1.21 one year ago.
"We delivered strong financial performance in the second quarter, driven by execution across the business," said interim CFO and Board Director Tim Cabral. "We have a large opportunity ahead in life sciences, and have the right product strategy and operating model to deliver profitable growth through 2030 and beyond."
Recent Highlights:
Vault CRM Suite Expands with Service Center – Veeva reached a significant milestone on its path to connect sales, marketing, medical, and service to enable true customer centricity with the release of Vault CRM Service Center this month. Veeva also added 14 new Vault CRM customers in the quarter.
Veeva Clinical Platform Innovations Drive Greater Speed and Efficiency – The new release of Veeva Site Connect added significant capabilities to streamline and simplify the clinical trial process for sites and biopharma sponsors. Site Connect is gaining momentum including a win with its seventh top 20 biopharma. Also in clinical, Veeva Clinical Database (CDB), a major innovation in clinical data, has been selected by seven top 20 biopharmas to reduce manual query work and increase speed and efficiency in trials.
Customer Success and Product Excellence Fuel Long-Term Opportunity – Based upon Veeva's track record of customer success, product excellence, and innovation, in Q2 a top 20 biopharma, with only one prior Veeva Development Cloud product, standardized on the full Vault RIM Suite for regulatory and Vault CTMS for clinical. Veeva also made major progress with emerging biotechs and added 12 Vault Basics customers in the quarter following its April release.
Financial Outlook:
Veeva is providing guidance for its fiscal third quarter ending October 31, 2024 as follows:
Total revenues between $682 and $685 million.
Non-GAAP operating income between $273 and $275 million(3).
Non-GAAP fully diluted net income per share between $1.57 and $1.58(3).
Veeva is providing updated guidance for its fiscal year ending January 31, 2025 as follows:
Total revenues between $2,704 and $2,710 million.
Non-GAAP operating income of about $1,080 million(3).
Non-GAAP fully diluted net income per share of approximately $6.22(3).
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, August 28, 2024, and a replay of the call will be available on Veeva's investor relations website.
What:
Veeva Systems Fiscal 2025 Second Quarter Results Conference Call
When:
Wednesday, August 28, 2024
Time:
2:00 p.m. PT (5:00 p.m. ET)
Online Registration:
https://registrations.events/direct/Q4I255069
Webcast:
ir.veeva.com
___________
(1) The customer contracting change that standardized termination for convenience (TFC) rights in our master subscription agreements resulted in a change in the timing of revenue for certain customer contracts and reduced revenues, operating income and non-GAAP operating income, and net income and non-GAAP net income in the second quarter of fiscal 2024.
(2) 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.
(3) Veeva is not able, at this time, to provide GAAP targets for operating income and fully diluted net income per share for the third fiscal quarter ending October 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 SystemsVeeva 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 StatementsThis release contains forward-looking statements regarding Veeva's expected future performance and, in particular, includes quotes from management and guidance, provided as of August 28, 2024, 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 performance, availability, security, or privacy 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 the Israel-Hamas conflict), 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 35 and 36 in our filing on Form 10-Q for the period ended April 30, 2024 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-Q 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:
Media Contact:
Gunnar Hansen
Maria Scurry
Veeva Systems Inc.
Veeva Systems Inc.
267-460-5839
781-366-7617
VEEVA SYSTEMS INC.CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands)(Unaudited)
July 31,2024
January 31,2024
Assets
Current assets:
Cash and cash equivalents
$ 1,165,754
$ 703,487
Short-term investments
3,719,324
3,324,269
Accounts receivable, net
364,719
852,172
Unbilled accounts receivable
39,432
36,365
Prepaid expenses and other current assets
78,614
86,918
Total current assets
5,367,843
5,003,211
Property and equipment, net
56,685
58,532
Deferred costs, net
23,439
23,916
Lease right-of-use assets
43,146
45,602
Goodwill
439,877
439,877
Intangible assets, net
53,339
63,017
Deferred income taxes
291,044
233,463
Other long-term assets
55,464
43,302
Total assets
$ 6,330,837
$ 5,910,920
Liabilities and stockholders' equity
Current liabilities:
Accounts payable
$ 28,307
$ 31,513
Accrued compensation and benefits
37,151
43,433
Accrued expenses and other current liabilities
32,801
32,980
Income tax payable
5,616
11,862
Deferred revenue
956,381
1,049,761
Lease liabilities
10,182
9,334
Total current liabilities
1,070,438
1,178,883
Deferred income taxes
591
2,052
Lease liabilities, noncurrent
43,912
46,441
Other long-term liabilities
31,198
38,720
Total liabilities
1,146,139
1,266,096
Stockholders' equity:
Class A common stock
2
2
Additional paid-in capital
2,117,109
1,915,002
Accumulated other comprehensive loss
(5,575)
(10,637)
Retained earnings
3,073,162
2,740,457
Total stockholders' equity
5,184,698
4,644,824
Total liabilities and stockholders' equity
$ 6,330,837
$ 5,910,920
VEEVA SYSTEMS INC.CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(In thousands, except per share data)(Unaudited)
Three months ended July 31,
Six months ended July 31,
2024
2023
2024
2023
Revenues:
Subscription services(4)
$ 561,277
$ 470,637
$ 1,095,232
$ 885,183
Professional services and other(5)
114,904
119,588
231,294
231,367
Total revenues
676,181
590,225
1,326,526
1,116,550
Cost of revenues(6):
Cost of subscription services
78,791
71,169
156,939
138,744
Cost of professional services and other
91,581
97,849
187,317
196,937
Total cost of revenues
170,372
169,018
344,256
335,681
Gross profit
505,809
421,207
982,270
780,869
Operating expenses(6):
Research and development
176,429
157,228
339,140
304,188
Sales and marketing
101,528
96,995
198,829
185,498
General and administrative
61,365
62,935
122,642
125,604
Total operating expenses
339,322
317,158
660,611
615,290
Operating income
166,487
104,049
321,659
165,579
Other income, net
58,573
38,826
110,302
69,074
Income before income taxes
225,060
142,875
431,961
234,653
Income tax provision
54,019
31,247
99,256
(8,496)
Net income
$ 171,041
$ 111,628
