Total Revenues of $590.2M, up 10% Year Over
Year;
Subscription Services Revenues of $470.6M, up 10% Year Over Year
PLEASANTON, Calif., Aug. 30,
2023 /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,
2023.
"We had a great quarter with progress across the board that was
particularly significant in CRM and clinical," said CEO
Peter Gassner. "Thanks to our
customers for your partnership and to the Veeva team for your
continued focus on customer success and product excellence."
Fiscal 2024 Second Quarter Results:
- Revenues: Total revenues for the second quarter were
$590.2 million, up from $534.2 million one year ago, an increase of 10%
year over year. Subscription services revenues for the second
quarter were $470.6 million, up from
$428.6 million one year ago, an
increase of 10% year over year.
- Operating Income and Non-GAAP Operating
Income(1): Second quarter operating income was
$104.0 million, compared to
$101.1 million one year ago, an
increase of 3% year over year. Non-GAAP operating income for the
second quarter was $211.9 million,
compared to $202.0 million one year
ago, an increase of 5% year over year.
- Net Income and Non-GAAP Net Income(1): Second
quarter net income was $111.6
million, compared to $90.6
million one year ago, an increase of 23% year over year.
Non-GAAP net income for the second quarter was $198.0 million, compared to $166.2 million one year ago, an increase of 19%
year over year.
- Net Income per Share and Non-GAAP Net Income per
Share(1): For the second quarter, fully diluted net
income per share was $0.68, compared
to $0.56 one year ago, while non-GAAP
fully diluted net income per share was $1.21, compared to $1.03 one year ago.
- Customer Contracting Change: The previously announced
customer contracting change that standardized termination for
convenience (TFC) rights in our master subscription agreements went
into effect on February 1, 2023. This
resulted in a change in the timing of revenue for certain customer
contracts to which a TFC right was added and reduced revenues,
operating income and non-GAAP operating income, and net income and
non-GAAP net income in the second quarter.
"In the second quarter, we delivered strong financial
performance across the board including results ahead of all guided
metrics," said CFO Brent Bowman. "We
are executing well and our proven operating model will continue to
drive strong growth and profitability well into the future."
Recent Highlights:
- Veeva Announces Vault CRM Milestones — Veeva recently
announced the first Vault CRM customer win, less than a year since
announcing the migration of its market leading Veeva CRM solution
to the Veeva Vault Platform. Vault CRM is now planned for general
availability in April 2024 and will
be the go-forward product for all new customers at that point. The
next generation of CRM for the life sciences industry, Vault
CRM will include all the functionality of Veeva CRM and new
omnichannel capabilities, including Vault CRM Service Center.
- Leading in Clinical with Innovation and Product
Excellence — Veeva is helping the life sciences industry
deliver clinical excellence by connecting sponsors, research sites,
and patients. Companies are looking for a unified platform that is
tightly integrated across clinical operations and clinical data
management to speed clinical execution. Veeva Vault Clinical has
more than 500 customers, including 85 that have selected
applications from both Veeva Vault Clinical Operations and Veeva
Vault Clinical Data Management.
Financial Outlook:
Veeva is providing guidance for its fiscal third quarter ending
October 31, 2023 as follows:
- Total revenues between $614 and
$616 million.
- Non-GAAP operating income between $223 and $225
million(2).
- Non-GAAP fully diluted net income per share between
$1.26 and $1.27(2).
Veeva is providing updated guidance for its fiscal year ending
January 31, 2024 as follows:
- Total revenues between $2,365 and
$2,370 million.
- Non-GAAP operating income of about $820
million(2).
- Non-GAAP fully diluted net income per share of approximately
$4.68(2).
Veeva is reiterating guidance for its fiscal year ending
January 31, 2025 for the following
metrics:
- Total revenues of at least $2,800
million.
- Non-GAAP operating income of at least $1,000 million(2).
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 30, 2023, and a replay of the call will be available on
Veeva's investor relations website.
What:
|
Veeva Systems Fiscal
2024 Second Quarter Results Conference Call
|
When:
|
Wednesday, August 30,
2023
|
Time:
|
2:00 p.m. PT (5:00 p.m.
ET)
|
Online
Registration:
|
https://conferencingportals.com/event/badXudFz
|
|
|
Webcast:
|
ir.veeva.com
|
___________
(1) 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.
(2) 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, 2023, the fiscal year ending
January 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 Systems
Veeva 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 Statements
This release contains
forward-looking statements regarding Veeva's expected future
performance and, in particular, includes quotes from management and
guidance, provided as of August 30, 2023, 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, 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, changes in
applicable laws and regulations, and impacts related to
Russia's invasion of Ukraine), 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 37
and 38 in our filing on Form 10-Q for the period ended
April 30, 2023 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:
Gunnar Hansen
Veeva Systems Inc.
267-460-5839
ir@veeva.com
Media Contact:
Maria
Scurry
Veeva Systems Inc.
781-366-7617
pr@veeva.com
VEEVA SYSTEMS
INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In
thousands) (Unaudited)
|
|
|
July 31,
2023
|
|
January 31,
2023
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
742,607
|
|
$
886,465
|
Short-term
investments
|
3,126,132
|
|
2,216,163
|
Accounts receivable,
net
|
379,066
|
|
703,055
|
Unbilled accounts
receivable
|
37,541
|
|
82,174
|
Prepaid expenses and
other current assets
|
76,407
|
|
81,456
|
Total current
assets
|
4,361,753
|
|
3,969,313
|
Property and equipment,
net
|
56,937
|
|
49,817
|
Deferred costs,
net
|
22,463
|
|
31,825
|
Lease right-of-use
assets
|
51,059
|
|
55,336
|
Goodwill
|
439,877
|
|
439,877
|
Intangible assets,
net
|
72,825
|
|
82,476
|
Deferred income
taxes
|
184,331
|
|
136,697
|
Other long-term
assets
|
38,898
|
|
38,955
|
Total
assets
|
$ 5,228,143
|
|
$ 4,804,296
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
49,932
|
|
$
41,678
|
Accrued compensation
and benefits
|
48,296
|
|
44,282
|
Accrued expenses and
other current liabilities
|
32,431
|
|
35,306
|
Income tax
payable
|
24,143
|
|
4,946
|
Deferred
revenue
|
836,500
|
|
869,285
|
Lease
liabilities
|
10,652
|
|
11,306
|
Total current
liabilities
|
1,001,954
|
|
1,006,803
|
Deferred income
taxes
|
1,283
|
|
1,492
|
Lease liabilities,
noncurrent
|
47,853
|
|
49,670
|
Other long-term
liabilities
|
24,410
|
|
30,079
|
Total
liabilities
|
1,075,500
|
|
1,088,044
|
Stockholders'
equity:
|
|
|
|
Class A common
stock
|
2
|
|
2
|
Class B common
stock
|
—
|
|
—
|
Additional paid-in
capital
|
1,729,123
|
|
1,532,627
|
Accumulated other
comprehensive loss
|
(34,383)
|
|
(31,129)
|
Retained
earnings
|
2,457,901
|
|
2,214,752
|
Total stockholders'
equity
|
4,152,643
|
|
3,716,252
|
Total liabilities
and stockholders' equity
|
$ 5,228,143
|
|
$ 4,804,296
|
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,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenues:
|
|
|
|
|
|
|
|
Subscription
services(3)
|
$ 470,637
|
|
$ 428,649
|
|
$ 885,183
|
|
$ 831,281
|
Professional services
and other(4)
|
119,588
|
|
105,569
|
|
231,367
|
|
208,039
|
Total
revenues
|
590,225
|
|
534,218
|
|
1,116,550
|
|
1,039,320
|
Cost of
revenues(5):
|
|
|
|
|
|
|
|
Cost of subscription
services
|
71,169
|
|
64,035
|
|
138,744
|
|
122,988
|
Cost of professional
services and other
|
97,849
|
|
87,634
|
|
196,937
|
|
168,196
|
Total cost of
revenues
|
169,018
|
|
151,669
|
|
335,681
|
|
291,184
|
Gross profit
|
421,207
|
|
382,549
|
|
780,869
|
|
748,136
|
Operating
expenses(5):
|
|
|
|
|
|
|
|
Research and
development
|
157,228
|
|
134,008
|
|
304,188
|
|
247,483
|
Sales and
marketing
|
96,995
|
|
89,617
|
|
185,498
|
|
165,732
|
General and
administrative
|
62,935
|
|
57,832
|
|
125,604
|
|
106,157
|
Total operating
expenses
|
317,158
|
|
281,457
|
|
615,290
|
|
519,372
|
Operating
income
|
104,049
|
|
101,092
|
|
165,579
|
|
228,764
|
Other income,
net
|
38,826
|
|
8,398
|
|
69,074
|
|
11,107
|
Income before income
taxes
|
142,875
|
|
109,490
|
|
234,653
|
|
239,871
|
Income tax provision
(benefit)
|
31,247
|
|
18,889
|
|
(8,496)
|
|
49,155
|
Net
income
|
$ 111,628
|
|
$
90,601
|
|
$ 243,149
|
|
$ 190,716
|
Net income per
share:
|
|
|
|
|
|
|
|
Basic
|
$
0.70
|
|
$
0.58
|
|
$
1.52
|
|
$
1.23
|
Diluted
|
$
0.68
|
|
$
0.56
|
|
$
1.49
|
|
$
1.17
|
Weighted-average
shares used to compute net income per share:
|
|
|
|
|
|
|
|
Basic
|
160,396
|
|
154,951
|
|
160,129
|
|
154,736
|
Diluted
|
163,284
|
|
162,132
|
|
162,989
|
|
162,499
|
Other comprehensive
income:
|
|
|
|
|
|
|
|
Net change in
unrealized loss on available-for-sale investments
|
$
(8,891)
|
|
$
(2,224)
|
|
$
(3,463)
|
|
$ (13,223)
|
Net change in
cumulative foreign currency translation gain (loss)
|
267
|
|
(900)
|
|
209
|
|
(2,154)
|
Comprehensive
income
|
$ 103,004
|
|
$
87,477
|
|
$ 239,895
|
|
$ 175,339
|
|
|
|
|
|
|
|
|
(3) Includes
subscription services revenues from the following product
areas:
|
|
|
|
|
|
|
|
Veeva Commercial
Solutions
|
$ 243,430
|
|
$ 236,356
|
|
$ 482,754
|
|
$ 464,080
|
Veeva R&D
Solutions
|
227,207
|
|
192,293
|
|
402,429
|
|
367,201
|
Total subscription
services
|
$ 470,637
|
|
$ 428,649
|
|
$ 885,183
|
|
$ 831,281
|
|
|
|
|
|
|
|
|
(4) Includes
professional services and other revenues from the following product
areas:
|
|
|
|
|
|
|
|
Veeva Commercial
Solutions
|
$
47,319
|
|
$
44,424
|
|
$
92,183
|
|
$
87,745
|
Veeva R&D
Solutions
|
72,269
|
|
61,145
|
|
139,184
|
|
120,294
|
Total professional
services and other
|
$ 119,588
|
|
$ 105,569
|
|
$ 231,367
|
|
$ 208,039
|
|
|
|
|
|
|
|
|
(5) Includes
stock-based compensation as follows:
|
|
|
|
|
|
|
|
Cost of
revenues:
|
|
|
|
|
|
|
|
Cost of subscription
services
|
1,748
|
|
1,693
|
|
$
3,253
|
|
2,970
|
Cost of professional
services and other
|
14,216
|
|
13,818
|
|
$
26,938
|
|
23,808
|
Research and
development
|
45,292
|
|
38,901
|
|
84,198
|
|
64,724
|
Sales and
marketing
|
23,489
|
|
24,031
|
|
43,624
|
|
40,924
|
General and
administrative
|
18,150
|
|
17,599
|
|
35,601
|
|
30,750
|
Total stock-based
compensation
|
$ 102,895
|
|
$
96,042
|
|
$ 193,614
|
|
$ 163,176
|
VEEVA SYSTEMS
INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (In thousands) (Unaudited)
|
|
|
Three months ended
July
31,
|
|
Six months ended
July
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Cash flows from
operating activities
|
|
|
|
|
|
|
|
Net income
|
$ 111,628
|
|
$
90,601
|
|
$ 243,149
|
|
$ 190,716
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
8,087
|
|
7,228
|
|
15,636
|
|
14,286
|
Reduction of operating
lease right-of-use assets
|
2,965
|
|
3,020
|
|
6,025
|
|
5,968
|
(Accretion)
amortization of discount on short-term investments
|
(7,376)
|
|
(507)
|
|
(10,783)
|
|
549
|
Stock-based
compensation
|
102,895
|
|
96,042
|
|
193,614
|
|
163,176
|
Amortization of
deferred costs
|
4,249
|
|
5,736
|
|
9,301
|
|
11,729
|
Deferred income
taxes
|
(25,213)
|
|
(20,881)
|
|
(46,727)
|
|
(53,313)
|
(Gain) loss on foreign
currency from mark-to-market derivative
|
(727)
|
|
1,768
|
|
(547)
|
|
1,186
|
Bad debt
expense
|
341
|
|
146
|
|
496
|
|
121
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
33,533
|
|
16,312
|
|
323,493
|
|
317,794
|
Unbilled accounts
receivable
|
529
|
|
(15,807)
|
|
44,633
|
|
(14,512)
|
Deferred
costs
|
(3,546)
|
|
(3,421)
|
|
61
|
|
(6,500)
|
Other current and
long-term assets
|
45,543
|
|
(3,513)
|
|
9,245
|
|
(11,076)
|
Accounts
payable
|
6,099
|
|
5,540
|
|
8,054
|
|
10,661
|
Accrued expenses and
other current liabilities
|
2,215
|
|
(475)
|
|
(1,129)
|
|
(2,811)
|
Income taxes
payable
|
19,526
|
|
(45,841)
|
|
19,197
|
|
(2,618)
|
Deferred
revenue
|
(34,862)
|
|
(39,998)
|
|
(36,083)
|
|
(47,469)
|
Operating lease
liabilities
|
(1,597)
|
|
(3,081)
|
|
(4,290)
|
|
(5,112)
|
Other long-term
liabilities
|
747
|
|
517
|
|
(2,373)
|
|
1,638
|
Net cash provided
by operating activities
|
265,036
|
|
93,386
|
|
770,972
|
|
574,413
|
Cash flows from
investing activities
|
|
|
|
|
|
|
|
Purchases of
short-term investments
|
(988,074)
|
|
(433,073)
|
|
(1,600,566)
|
|
(1,005,417)
|
Maturities and sales
of short-term investments
|
378,737
|
|
250,531
|
|
696,793
|
|
446,721
|
Long-term
assets
|
(9,593)
|
|
(1,663)
|
|
(12,551)
|
|
(3,996)
|
Net cash used in
investing activities
|
(618,930)
|
|
(184,205)
|
|
(916,324)
|
|
(562,692)
|
Cash flows from
financing activities
|
|
|
|
|
|
|
|
Proceeds from exercise
of common stock options
|
22,995
|
|
9,250
|
|
38,228
|
|
25,541
|
Taxes paid related to
net share settlement of equity awards
|
(20,418)
|
|
(17,134)
|
|
(37,043)
|
|
(32,133)
|
Net cash provided
by (used in) financing activities
|
2,577
|
|
(7,884)
|
|
1,185
|
|
(6,592)
|
Effect of exchange rate
changes on cash, cash equivalents, and restricted cash
|
290
|
|
(1,049)
|
|
309
|
|
(2,923)
|
Net change in cash,
cash equivalents, and restricted cash
|
(351,027)
|
|
(99,752)
|
|
(143,858)
|
|
2,206
|
Cash, cash equivalents,
and restricted cash at beginning of period
|
1,096,819
|
|
1,243,183
|
|
889,650
|
|
1,141,225
|
Cash, cash
equivalents, and restricted cash at end of period
|
$ 745,792
|
|
$
1,143,431
|
|
$ 745,792
|
|
$
1,143,431
|
|
|
|
|
|
|
|
|
Supplemental
disclosures of other cash flow information:
|
|
|
|
|
|
|
|
Excess tax benefits
from employee stock plans
|
$
3,211
|
|
$
2,094
|
|
$
65,300
|
|
$
5,093
|
Non-GAAP Financial Measures
In Veeva's public
disclosures, Veeva has provided non-GAAP measures, which it defines
as financial information that has not been prepared in accordance
with generally accepted accounting principles in the United States, or GAAP. In addition to its
GAAP measures, Veeva uses these non-GAAP financial measures
internally for budgeting and resource allocation purposes and in
analyzing its financial results. For the reasons set forth below,
Veeva believes that excluding the following items provides
information that is helpful in understanding its operating results,
evaluating its future prospects, comparing its financial results
across accounting periods, and comparing its financial results to
its peers, many of which provide similar non-GAAP financial
measures.
- Excess tax benefits. Excess tax benefits from employee stock
plans are dependent on previously agreed-upon equity grants to our
employees, vesting of those grants, stock price, and exercise
behavior of our employees, which can fluctuate from quarter to
quarter. For example, excess tax benefits for the quarters ended
January 31 and April 30, 2023 were higher than normal primarily
due to our Chief Executive Officer's exercise of stock options in
connection with a previously announced trading plan. Because these
fluctuations are not directly related to our business operations,
Veeva excludes excess tax benefits for its internal management
reporting processes. Veeva management also finds it useful to
exclude excess tax benefits when assessing the level of cash
provided by operating activities. Given the nature of the excess
tax benefits, Veeva believes excluding it allows investors to make
meaningful comparisons between our operating cash flows from
quarter to quarter and those of other companies.
- Stock-based compensation expenses. Veeva excludes stock-based
compensation expenses primarily because they are non-cash expenses
that Veeva excludes from its internal management reporting
processes. Veeva's management also finds it useful to exclude these
expenses when they assess the appropriate level of various
operating expenses and resource allocations when budgeting,
planning and forecasting future periods. Moreover, because of
varying available valuation methodologies, subjective assumptions
and the variety of award types that companies can use, Veeva
believes excluding stock-based compensation expenses allows
investors to make meaningful comparisons between our recurring core
business operating results and those of other companies.
- Amortization of purchased intangibles. Veeva incurs
amortization expense for purchased intangible assets in connection
with acquisitions of certain businesses and technologies.
Amortization of intangible assets is a non-cash expense and is
inconsistent in amount and frequency because it is significantly
affected by the timing, size of acquisitions and the inherent
subjective nature of purchase price allocations. Because these
costs have already been incurred and cannot be recovered, and are
non-cash expenses, Veeva excludes these expenses for its internal
management reporting processes. Veeva's management also finds it
useful to exclude these charges when assessing the appropriate
level of various operating expenses and resource allocations when
budgeting, planning and forecasting future periods. Investors
should note that the use of intangible assets contributed to
Veeva's revenues earned during the periods presented and will
contribute to Veeva's future period revenues as well.
- Income tax effects on the difference between GAAP and non-GAAP
costs and expenses. The income tax effects that are excluded relate
to the imputed tax impact on the difference between GAAP and
non-GAAP costs and expenses due to stock-based compensation and
purchased intangibles for GAAP and non-GAAP measures.
There are limitations to using non-GAAP financial measures
because non-GAAP financial measures are not prepared in accordance
with GAAP and may be different from non-GAAP financial measures
provided by other companies. The non-GAAP financial measures are
limited in value because they exclude certain items that may have a
material impact upon our reported financial results. In addition,
they are subject to inherent limitations as they reflect the
exercise of judgments by Veeva's management about which items are
adjusted to calculate its non-GAAP financial measures. Veeva
compensates for these limitations by analyzing current and future
results on a GAAP basis as well as a non-GAAP basis and also by
providing GAAP measures in its public disclosures.
Non-GAAP financial measures should not be considered in
isolation from, or as a substitute for, financial information
prepared in accordance with GAAP. Veeva encourages its investors
and others to review its financial information in its entirety, not
to rely on any single financial measure to evaluate its business,
and to view its non-GAAP financial measures in conjunction with the
most directly comparable GAAP financial measures. A reconciliation
of GAAP to the non-GAAP financial measures has been provided in the
tables below.
VEEVA SYSTEMS
INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Dollars in thousands)
(Unaudited)
|
|
The following tables
reconcile the specific items excluded from GAAP metrics in the
calculation of non-GAAP metrics for the periods shown
below:
|
|
Reconciliation of Net Cash Provided by Operating
Activities (GAAP basis to
non-GAAP basis)
|
Three months ended July
31,
|
|
Six months ended July
31,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Net cash provided by
operating activities on a GAAP basis
|
$
265,036
|
|
$
93,386
|
|
$
770,972
|
|
$
574,413
|
|
Excess tax benefits
from employee stock plans
|
(3,211)
|
|
(2,094)
|
|
(65,300)
|
|
(5,093)
|
|
Net cash provided by
operating activities on a non-GAAP basis
|
$
261,825
|
|
$
91,292
|
|
$
705,672
|
|
$
569,320
|
|
Net cash used in
investing activities on a GAAP basis
|
$ (618,930)
|
|
$ (184,205)
|
|
$ (916,324)
|
|
$ (562,692)
|
|
Net cash provided by
(used in) financing activities on a GAAP basis
|
$ 2,577
|
|
$
(7,884)
|
|
$ 1,185
|
|
$
(6,592)
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Financial Measures (GAAP basis to
non-GAAP basis)
|
Three months ended July
31,
|
|
Six months ended July
31,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Cost of subscription
services revenues on a GAAP basis
|
$
71,169
|
|
$
64,035
|
|
$
138,744
|
|
$
122,988
|
|
Stock-based
compensation expense
|
(1,748)
|
|
(1,693)
|
|
(3,253)
|
|
(2,970)
|
|
Amortization of
purchased intangibles
|
(1,126)
|
|
(1,126)
|
|
(2,216)
|
|
(2,216)
|
|
Cost of subscription
services revenues on a non-GAAP basis
|
$
68,295
|
|
$
61,216
|
|
$
133,275
|
|
$
117,802
|
|
|
|
|
|
|
|
|
|
|
Gross margin on
subscription services revenues on a GAAP basis
|
84.9 %
|
|
85.1 %
|
|
84.3 %
|
|
85.2 %
|
|
Stock-based
compensation expense
|
0.4
|
|
0.4
|
|
0.3
|
|
0.3
|
|
Amortization of
purchased intangibles
|
0.2
|
|
0.2
|
|
0.3
|
|
0.3
|
|
Gross margin on
subscription services revenues on a non-GAAP basis
|
85.5 %
|
|
85.7 %
|
|
84.9 %
|
|
85.8 %
|
|
|
|
|
|
|
|
|
|
|
Cost of professional
services and other revenues on a GAAP basis
|
$
97,849
|
|
$
87,634
|
|
$
196,937
|
|
$
168,196
|
|
Stock-based
compensation expense
|
(14,216)
|
|
(13,818)
|
|
(26,938)
|
|
(23,808)
|
|
Amortization of
purchased intangibles
|
(139)
|
|
(139)
|
|
(273)
|
|
(273)
|
|
Cost of professional
services and other revenues on a non-GAAP basis
|
$
83,494
|
|
$
73,677
|
|
$
169,726
|
|
$
144,115
|
|
|
|
|
|
|
|
|
|
|
Gross margin on
professional services and other revenues on a GAAP basis
|
18.2 %
|
|
17.0 %
|
|
14.9 %
|
|
19.2 %
|
|
Stock-based
compensation expense
|
11.9
|
|
13.1
|
|
11.6
|
|
11.4
|
|
Amortization of
purchased intangibles
|
0.1
|
|
0.1
|
|
0.1
|
|
0.1
|
|
Gross margin on
professional services and other revenues on a non-GAAP
basis
|
30.2 %
|
|
30.2 %
|
|
26.6 %
|
|
30.7 %
|
|
|
|
|
|
|
|
|
|
|
Gross profit on a GAAP
basis
|
$
421,207
|
|
$
382,549
|
|
$
780,869
|
|
$
748,136
|
|
Stock-based
compensation expense
|
15,964
|
|
15,511
|
|
30,191
|
|
26,778
|
|
Amortization of
purchased intangibles
|
1,265
|
|
1,265
|
|
2,489
|
|
2,489
|
|
Gross profit on a
non-GAAP basis
|
$
438,436
|
|
$
399,325
|
|
$
813,549
|
|
$
777,403
|
|
|
|
|
|
|
|
|
|
|
Gross margin on total
revenues on a GAAP basis
|
71.4 %
|
|
71.6 %
|
|
69.9 %
|
|
72.0 %
|
|
Stock-based
compensation expense
|
2.7
|
|
2.9
|
|
2.7
|
|
2.6
|
|
Amortization of
purchased intangibles
|
0.2
|
|
0.2
|
|
0.3
|
|
0.2
|
|
Gross margin on total
revenues on a non-GAAP basis
|
74.3 %
|
|
74.7 %
|
|
72.9 %
|
|
74.8 %
|
|
|
|
|
|
|
|
|
|
|
Research and
development expense on a GAAP basis
|
$
157,228
|
|
$
134,008
|
|
$
304,188
|
|
$
247,483
|
|
Stock-based
compensation expense
|
(45,292)
|
|
(38,901)
|
|
(84,198)
|
|
(64,724)
|
|
Amortization of
purchased intangibles
|
(29)
|
|
(29)
|
|
(56)
|
|
(56)
|
|
Research and
development expense on a non-GAAP basis
|
$
111,907
|
|
$
95,078
|
|
$
219,934
|
|
$
182,703
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended July
31,
|
|
Six months ended July
31,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
expense on a GAAP basis
|
$
96,995
|
|
$
89,617
|
|
$
185,498
|
|
$
165,732
|
|
Stock-based
compensation expense
|
(23,489)
|
|
(24,031)
|
|
(43,624)
|
|
(40,924)
|
|
Amortization of
purchased intangibles
|
(3,555)
|
|
(3,555)
|
|
(6,995)
|
|
(6,995)
|
|
Sales and marketing
expense on a non-GAAP basis
|
$
69,951
|
|
$
62,031
|
|
$
134,879
|
|
$
117,813
|
|
|
|
|
|
|
|
|
|
|
General and
administrative expense on a GAAP basis
|
$
62,935
|
|
$
57,832
|
|
$
125,604
|
|
$
106,157
|
|
Stock-based
compensation expense
|
(18,150)
|
|
(17,599)
|
|
(35,601)
|
|
(30,750)
|
|
Amortization of
purchased intangibles
|
(57)
|
|
(57)
|
|
(112)
|
|
(112)
|
|
General and
administrative expense on a non-GAAP basis
|
$
44,728
|
|
$
40,176
|
|
$
89,891
|
|
$
75,295
|
|
|
|
|
|
|
|
|
|
|
Operating expense on a
GAAP basis
|
$
317,158
|
|
$
281,457
|
|
$
615,290
|
|
$
519,372
|
|
Stock-based
compensation expense
|
(86,931)
|
|
(80,531)
|
|
(163,423)
|
|
(136,398)
|
|
Amortization of
purchased intangibles
|
(3,641)
|
|
(3,641)
|
|
(7,163)
|
|
(7,163)
|
|
Operating expense on a
non-GAAP basis
|
$
226,586
|
|
$
197,285
|
|
$
444,704
|
|
$
375,811
|
|
|
|
|
|
|
|
|
|
|
Operating income on a
GAAP basis
|
$
104,049
|
|
$
101,092
|
|
$
165,579
|
|
$
228,764
|
|
Stock-based
compensation expense
|
102,895
|
|
96,042
|
|
193,614
|
|
163,176
|
|
Amortization of
purchased intangibles
|
4,906
|
|
4,906
|
|
9,652
|
|
9,652
|
|
Operating income on a
non-GAAP basis
|
$
211,850
|
|
$
202,040
|
|
$
368,845
|
|
$
401,592
|
|
|
|
|
|
|
|
|
|
|
Operating margin on a
GAAP basis
|
17.6 %
|
|
18.9 %
|
|
14.8 %
|
|
22.0 %
|
|
Stock-based
compensation expense
|
17.4
|
|
18.0
|
|
17.3
|
|
15.7
|
|
Amortization of
purchased intangibles
|
0.9
|
|
0.9
|
|
0.9
|
|
0.9
|
|
Operating margin on a
non-GAAP basis
|
35.9 %
|
|
37.8 %
|
|
33.0 %
|
|
38.6 %
|
|
|
|
|
|
|
|
|
|
|
Net income on a GAAP
basis
|
$
111,628
|
|
$
90,601
|
|
$
243,149
|
|
$
190,716
|
|
Stock-based
compensation expense
|
102,895
|
|
96,042
|
|
193,614
|
|
163,176
|
|
Amortization of
purchased intangibles
|
4,906
|
|
4,906
|
|
9,652
|
|
9,652
|
|
Income tax effect on
non-GAAP adjustments(6)
|
(21,395)
|
|
(25,303)
|
|
(100,459)
|
|
(37,512)
|
|
Net income on a
non-GAAP basis
|
$
198,034
|
|
$
166,246
|
|
$
345,956
|
|
$
326,032
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per
share on a GAAP basis
|
$ 0.68
|
|
$ 0.56
|
|
$ 1.49
|
|
$ 1.17
|
|
Stock-based
compensation expense
|
0.63
|
|
0.59
|
|
1.19
|
|
1.00
|
|
Amortization of
purchased intangibles
|
0.03
|
|
0.03
|
|
0.06
|
|
0.06
|
|
Income tax effect on
non-GAAP adjustments(6)
|
(0.13)
|
|
(0.15)
|
|
(0.62)
|
|
(0.22)
|
|
Diluted net income per
share on a non-GAAP basis
|
$ 1.21
|
|
$ 1.03
|
|
$ 2.12
|
|
$ 2.01
|
|
________________________
|
(6)
|
For the three and six
months July 31, 2023 and 2022, management used an estimated annual
effective non-GAAP tax rate of 21.0%.
|
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SOURCE Veeva Systems