Total Revenues of $616.5M, up 12% Year Over Year;
Subscription Services Revenues of $494.9M, up 12% Year Over Year
PLEASANTON, Calif., Dec. 6, 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 third quarter ended
October 31, 2023.
"It was another strong quarter as we advance the industry toward
more efficient and effective ways of working, from drug development
through commercialization," said CEO Peter
Gassner. "We announced a number of new innovations, expanded
in existing markets, and continued progress in newer areas like
Vault CRM, positioning us well for durable, profitable growth for
years to come."
Fiscal 2024 Third Quarter Results:
- Revenues: Total revenues for the third quarter were
$616.5 million, up from $552.4 million one year ago, an increase of 12%
year over year. Subscription services revenues for the third
quarter were $494.9 million, up from
$441.6 million one year ago, an
increase of 12% year over year.
- Operating Income and Non-GAAP Operating
Income(1): Third quarter operating income was
$128.5 million, compared to
$121.4 million one year ago, an
increase of 6% year over year. Non-GAAP operating income for the
third quarter was $234.6 million,
compared to $219.5 million one year
ago, an increase of 7% year over year.
- Net Income and Non-GAAP Net Income(1): Third
quarter net income was $135.2
million, compared to $108.5
million one year ago, an increase of 25% year over year.
Non-GAAP net income for the third quarter was $218.7 million, compared to $183.2 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 third quarter, fully diluted net
income per share was $0.83, compared
to $0.67 one year ago, while non-GAAP
fully diluted net income per share was $1.34, compared to $1.13 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 third quarter.
"We are managing the business well and continue to track towards
our longer term targets," said CFO Brent
Bowman. "We're in the early innings of a large and growing
opportunity, and we believe our software, data, and high value
services will enable us to drive growth and profitability through
2030 and beyond."
Recent Highlights:
- Commercial Innovation Drives Continued Leadership –
Veeva announced new innovations coming in Veeva Commercial Cloud
including Marketing Automation for campaign management and Patient
CRM to manage sensitive patient information and workflows. Veeva
also crossed significant milestones for Vault CRM – including
the first customer live – as it looks ahead to delivering the
next-generation of CRM for life sciences. Two top 20 biopharmas
also committed to Vault CRM globally as the path to commercial
innovation.
- Delivering the Modern Data Platform for the Industry –
Veeva Data Cloud provides the industry a modern alternative to
legacy data, all on a common data architecture. This fueled strong
progress in the quarter with a record 13 new brands for Compass,
two top 20 biopharma wins for Link, and the recent announcement of
a second top 20 biopharma that will roll out OpenData
globally.
- Establishing the Technology Foundation for Drug
Development – Momentum continued in the significant long-term
opportunity for Veeva Development Cloud. In the quarter, the
company saw further adoption across all product areas, including 24
customer wins across clinical, 23 for quality, and 15 in
regulatory. Development Cloud also continues to expand as new
products were announced in clinical and quality, two of Veeva's
largest opportunities in R&D.
Financial Outlook:
Veeva is providing guidance for its fiscal fourth quarter ending
January 31, 2024 as follows:
- Total revenues between $620 and
$622 million.
- Non-GAAP operating income of about $227
million(2).
- Non-GAAP fully diluted net income per share of approximately
$1.30(2).
Veeva is providing updated guidance for its fiscal year ending
January 31, 2024 as follows:
- Total revenues between $2,353 and
$2,355 million.
- Non-GAAP operating income of about $830
million(2).
- Non-GAAP fully diluted net income per share of approximately
$4.76(2).
Veeva is reiterating guidance for its fiscal year ending
January 31, 2025 for the following
metrics:
- Total revenues of at least $2,750
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, December 6, 2023, and a replay
of the call will be available on Veeva's investor relations
website.
What:
|
Veeva Systems Fiscal
2024 Third Quarter Results Conference Call
|
When:
|
Wednesday, December 6,
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 fourth fiscal quarter ending
January 31, 2024, 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 December 6, 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 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 38 and 39 in our filing on Form
10-Q for the period ended July 31, 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)
|
|
|
October 31,
2023
|
|
January 31,
2023
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
743,712
|
|
$
886,465
|
Short-term
investments
|
3,198,570
|
|
2,216,163
|
Accounts receivable,
net
|
255,504
|
|
703,055
|
Unbilled accounts
receivable
|
44,837
|
|
82,174
|
Prepaid expenses and
other current assets
|
93,135
|
|
81,456
|
Total current
assets
|
4,335,758
|
|
3,969,313
|
Property and equipment,
net
|
57,597
|
|
49,817
|
Deferred costs,
net
|
19,733
|
|
31,825
|
Lease right-of-use
assets
|
48,139
|
|
55,336
|
Goodwill
|
439,877
|
|
439,877
|
Intangible assets,
net
|
67,919
|
|
82,476
|
Deferred income
taxes
|
218,348
|
|
136,697
|
Other long-term
assets
|
38,401
|
|
38,955
|
Total
assets
|
$ 5,225,772
|
|
$ 4,804,296
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
36,236
|
|
$
41,678
|
Accrued compensation
and benefits
|
38,430
|
|
44,282
|
Accrued expenses and
other current liabilities
|
32,921
|
|
35,306
|
Income tax
payable
|
6,560
|
|
4,946
|
Deferred
revenue
|
644,463
|
|
869,285
|
Lease
liabilities
|
9,640
|
|
11,306
|
Total current
liabilities
|
768,250
|
|
1,006,803
|
Deferred income
taxes
|
1,145
|
|
1,492
|
Lease liabilities,
noncurrent
|
48,026
|
|
49,670
|
Other long-term
liabilities
|
28,578
|
|
30,079
|
Total
liabilities
|
845,999
|
|
1,088,044
|
Stockholders'
equity:
|
|
|
|
Class A common
stock
|
2
|
|
2
|
Class B common
stock
|
—
|
|
—
|
Additional paid-in
capital
|
1,824,250
|
|
1,532,627
|
Accumulated other
comprehensive loss
|
(37,538)
|
|
(31,129)
|
Retained
earnings
|
2,593,059
|
|
2,214,752
|
Total stockholders'
equity
|
4,379,773
|
|
3,716,252
|
Total liabilities
and stockholders' equity
|
$ 5,225,772
|
|
$ 4,804,296
|
VEEVA SYSTEMS
INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME (In thousands, except per share
data) (Unaudited)
|
|
|
Three months
ended
October 31,
|
|
Nine months
ended
October 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenues:
|
|
|
|
|
|
|
|
Subscription
services(3)
|
$ 494,912
|
|
$ 441,569
|
|
$
1,380,095
|
|
$
1,272,850
|
Professional services
and other(4)
|
121,593
|
|
110,782
|
|
352,960
|
|
318,821
|
Total
revenues
|
616,505
|
|
552,351
|
|
1,733,055
|
|
1,591,671
|
Cost of
revenues(5):
|
|
|
|
|
|
|
|
Cost of subscription
services
|
74,435
|
|
65,734
|
|
213,179
|
|
188,722
|
Cost of professional
services and other
|
93,247
|
|
88,173
|
|
290,184
|
|
256,369
|
Total cost of
revenues
|
167,682
|
|
153,907
|
|
503,363
|
|
445,091
|
Gross profit
|
448,823
|
|
398,444
|
|
1,229,692
|
|
1,146,580
|
Operating
expenses(5):
|
|
|
|
|
|
|
|
Research and
development
|
161,278
|
|
130,257
|
|
465,466
|
|
377,740
|
Sales and
marketing
|
96,773
|
|
93,910
|
|
282,269
|
|
259,642
|
General and
administrative
|
62,283
|
|
52,873
|
|
187,887
|
|
159,030
|
Total operating
expenses
|
320,334
|
|
277,040
|
|
935,622
|
|
796,412
|
Operating
income
|
128,489
|
|
121,404
|
|
294,070
|
|
350,168
|
Other income,
net
|
42,187
|
|
12,458
|
|
111,260
|
|
23,565
|
Income before income
taxes
|
170,676
|
|
133,862
|
|
405,330
|
|
373,733
|
Income tax
provision
|
35,518
|
|
25,405
|
|
27,023
|
|
74,560
|
Net
income
|
$ 135,158
|
|
$ 108,457
|
|
$ 378,307
|
|
$ 299,173
|
Net income per
share:
|
|
|
|
|
|
|
|
Basic
|
$
0.84
|
|
$
0.70
|
|
$
2.36
|
|
$
1.93
|
Diluted
|
$
0.83
|
|
$
0.67
|
|
$
2.32
|
|
$
1.84
|
Weighted-average
shares used to compute net income per share:
|
|
|
|
|
|
|
|
Basic
|
160,768
|
|
155,392
|
|
160,344
|
|
154,958
|
Diluted
|
163,761
|
|
162,295
|
|
163,129
|
|
162,189
|
Other comprehensive
income:
|
|
|
|
|
|
|
|
Net change in
unrealized loss on available-for-sale investments
|
$
(2,637)
|
|
$ (17,499)
|
|
$
(6,100)
|
|
$ (30,722)
|
Net change in
cumulative foreign currency translation loss
|
(518)
|
|
(808)
|
|
(309)
|
|
(2,962)
|
Comprehensive
income
|
$ 132,003
|
|
$
90,150
|
|
$ 371,898
|
|
$ 265,489
|
|
|
|
|
|
|
|
|
(3) Includes
subscription services revenues from the following product
areas:
|
|
|
|
|
|
|
|
Veeva Commercial
Solutions
|
$ 251,167
|
|
$ 239,276
|
|
$ 733,921
|
|
$ 703,356
|
Veeva R&D
Solutions
|
243,745
|
|
202,293
|
|
646,174
|
|
569,494
|
Total subscription
services
|
$ 494,912
|
|
$ 441,569
|
|
$
1,380,095
|
|
$
1,272,850
|
|
|
|
|
|
|
|
|
(4) Includes
professional services and other revenues from the following product
areas:
|
|
|
|
|
|
|
|
Veeva Commercial
Solutions
|
$
47,899
|
|
$
45,283
|
|
$ 140,082
|
|
$ 133,027
|
Veeva R&D
Solutions
|
73,694
|
|
65,499
|
|
212,878
|
|
185,794
|
Total professional
services and other
|
$ 121,593
|
|
$ 110,782
|
|
$ 352,960
|
|
$ 318,821
|
|
|
|
|
|
|
|
|
(5) Includes
stock-based compensation as follows:
|
|
|
|
|
|
|
|
Cost of
revenues:
|
|
|
|
|
|
|
|
Cost of subscription
services
|
$
1,604
|
|
$
1,636
|
|
$
4,857
|
|
$
4,606
|
Cost of professional
services and other
|
12,943
|
|
13,227
|
|
39,881
|
|
37,035
|
Research and
development
|
45,711
|
|
37,415
|
|
129,909
|
|
102,139
|
Sales and
marketing
|
23,460
|
|
23,576
|
|
67,084
|
|
64,500
|
General and
administrative
|
17,508
|
|
17,333
|
|
53,109
|
|
48,083
|
Total stock-based
compensation
|
$ 101,226
|
|
$
93,187
|
|
$ 294,840
|
|
$ 256,363
|
VEEVA SYSTEMS
INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (In thousands) (Unaudited)
|
|
|
Three months
ended
October 31,
|
|
Nine months
ended
October 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Cash flows from
operating activities
|
|
|
|
|
|
|
|
Net income
|
$ 135,158
|
|
$ 108,457
|
|
$ 378,307
|
|
$ 299,173
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
8,364
|
|
7,157
|
|
24,000
|
|
21,443
|
Reduction of operating
lease right-of-use assets
|
2,860
|
|
3,094
|
|
8,885
|
|
9,062
|
Accretion of discount
on short-term investments
|
(8,515)
|
|
(1,565)
|
|
(19,298)
|
|
(1,016)
|
Stock-based
compensation
|
101,226
|
|
93,187
|
|
294,840
|
|
256,363
|
Amortization of
deferred costs
|
3,542
|
|
5,378
|
|
12,843
|
|
17,107
|
Deferred income
taxes
|
(33,405)
|
|
(31,056)
|
|
(80,132)
|
|
(84,369)
|
Loss on foreign
currency from mark-to-market derivative
|
1,388
|
|
7
|
|
841
|
|
1,193
|
Bad debt
expense
|
134
|
|
1,089
|
|
630
|
|
1,210
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
123,428
|
|
69,272
|
|
446,921
|
|
387,066
|
Unbilled accounts
receivable
|
(7,296)
|
|
(4,307)
|
|
37,337
|
|
(18,819)
|
Deferred
costs
|
(812)
|
|
(5,376)
|
|
(751)
|
|
(11,876)
|
Other current and
long-term assets
|
(16,051)
|
|
7,326
|
|
(6,806)
|
|
(3,750)
|
Accounts
payable
|
(13,556)
|
|
10,002
|
|
(5,502)
|
|
20,663
|
Accrued expenses and
other current liabilities
|
(8,443)
|
|
5,465
|
|
(9,572)
|
|
2,654
|
Income taxes
payable
|
(17,583)
|
|
49,323
|
|
1,614
|
|
46,705
|
Deferred
revenue
|
(192,037)
|
|
(174,544)
|
|
(228,120)
|
|
(222,013)
|
Operating lease
liabilities
|
27
|
|
(2,624)
|
|
(4,263)
|
|
(7,736)
|
Other long-term
liabilities
|
4,169
|
|
2,375
|
|
1,796
|
|
4,013
|
Net cash provided
by operating activities
|
82,598
|
|
142,660
|
|
853,570
|
|
717,073
|
Cash flows from
investing activities
|
|
|
|
|
|
|
|
Purchases of
short-term investments
|
(541,502)
|
|
(710,833)
|
|
(2,142,068)
|
|
(1,716,250)
|
Maturities and sales
of short-term investments
|
474,088
|
|
310,713
|
|
1,170,881
|
|
757,434
|
Long-term
assets
|
(5,910)
|
|
(5,609)
|
|
(18,461)
|
|
(9,605)
|
Net cash used in
investing activities
|
(73,324)
|
|
(405,729)
|
|
(989,648)
|
|
(968,421)
|
Cash flows from
financing activities
|
|
|
|
|
|
|
|
Proceeds from exercise
of common stock options
|
13,956
|
|
4,575
|
|
52,184
|
|
30,116
|
Taxes paid related to
net share settlement of equity awards
|
(20,845)
|
|
(15,118)
|
|
(57,888)
|
|
(47,251)
|
Net cash used in
financing activities
|
(6,889)
|
|
(10,543)
|
|
(5,704)
|
|
(17,135)
|
Effect of exchange rate
changes on cash, cash equivalents, and restricted cash
|
(1,282)
|
|
(1,475)
|
|
(973)
|
|
(4,398)
|
Net change in cash,
cash equivalents, and restricted cash
|
1,103
|
|
(275,087)
|
|
(142,755)
|
|
(272,881)
|
Cash, cash equivalents,
and restricted cash at beginning of period
|
745,792
|
|
1,143,431
|
|
889,650
|
|
1,141,225
|
Cash, cash
equivalents, and restricted cash at end of period
|
$ 746,895
|
|
$ 868,344
|
|
$ 746,895
|
|
$ 868,344
|
|
|
|
|
|
|
|
|
Supplemental
disclosures of other cash flow information:
|
|
|
|
|
|
|
|
Excess tax benefits
from employee stock plans
|
$
3,275
|
|
$
888
|
|
$
68,575
|
|
$
5,981
|
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
October 31,
|
|
Nine months
ended
October 31,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Net cash provided by
operating activities on a GAAP basis
|
$
82,598
|
|
$
142,660
|
|
$
853,570
|
|
$
717,073
|
|
Excess tax benefits
from employee stock plans
|
(3,275)
|
|
(888)
|
|
(68,575)
|
|
(5,981)
|
|
Net cash provided by
operating activities on a non-GAAP basis
|
$
79,323
|
|
$
141,772
|
|
$
784,995
|
|
$
711,092
|
|
Net cash used in
investing activities on a GAAP basis
|
$
(73,324)
|
|
$
(405,729)
|
|
$ (989,648)
|
|
$ (968,421)
|
|
Net cash used in
financing activities on a GAAP basis
|
$
(6,889)
|
|
$
(10,543)
|
|
$
(5,704)
|
|
$
(17,135)
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Financial Measures (GAAP basis to non-GAAP basis)
|
Three months
ended
October 31,
|
|
Nine months
ended
October 31,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Cost of subscription
services revenues on a GAAP basis
|
$
74,435
|
|
$
65,734
|
|
$
213,179
|
|
$
188,722
|
|
Stock-based
compensation expense
|
(1,604)
|
|
(1,636)
|
|
(4,857)
|
|
(4,606)
|
|
Amortization of
purchased intangibles
|
(1,126)
|
|
(1,126)
|
|
(3,343)
|
|
(3,342)
|
|
Cost of subscription
services revenues on a non-GAAP basis
|
$
71,705
|
|
$
62,972
|
|
$
204,979
|
|
$
180,774
|
|
|
|
|
|
|
|
|
|
|
Gross margin on
subscription services revenues on a GAAP basis
|
85.0 %
|
|
85.1 %
|
|
84.6 %
|
|
85.2 %
|
|
Stock-based
compensation expense
|
0.3
|
|
0.4
|
|
0.3
|
|
0.3
|
|
Amortization of
purchased intangibles
|
0.2
|
|
0.2
|
|
0.2
|
|
0.3
|
|
Gross margin on
subscription services revenues on a non-GAAP basis
|
85.5 %
|
|
85.7 %
|
|
85.1 %
|
|
85.8 %
|
|
|
|
|
|
|
|
|
|
|
Cost of professional
services and other revenues on a GAAP basis
|
$
93,247
|
|
$
88,173
|
|
$
290,184
|
|
$
256,369
|
|
Stock-based
compensation expense
|
(12,943)
|
|
(13,227)
|
|
(39,881)
|
|
(37,035)
|
|
Amortization of
purchased intangibles
|
(139)
|
|
(139)
|
|
(411)
|
|
(411)
|
|
Cost of professional
services and other revenues on a non-GAAP basis
|
$
80,165
|
|
$
74,807
|
|
$
249,892
|
|
$
218,923
|
|
|
|
|
|
|
|
|
|
|
Gross margin on
professional services and other revenues on a GAAP basis
|
23.3 %
|
|
20.4 %
|
|
17.8 %
|
|
19.6 %
|
|
Stock-based
compensation expense
|
10.6
|
|
11.9
|
|
11.3
|
|
11.6
|
|
Amortization of
purchased intangibles
|
0.2
|
|
0.2
|
|
0.1
|
|
0.1
|
|
Gross margin on
professional services and other revenues on a non-GAAP
basis
|
34.1 %
|
|
32.5 %
|
|
29.2 %
|
|
31.3 %
|
|
|
|
|
|
|
|
|
|
|
Gross profit on a GAAP
basis
|
$
448,823
|
|
$
398,444
|
|
$
1,229,692
|
|
$
1,146,580
|
|
Stock-based
compensation expense
|
14,547
|
|
14,863
|
|
44,738
|
|
41,641
|
|
Amortization of
purchased intangibles
|
1,265
|
|
1,265
|
|
3,754
|
|
3,754
|
|
Gross profit on a
non-GAAP basis
|
$
464,635
|
|
$
414,572
|
|
$
1,278,184
|
|
$
1,191,975
|
|
|
|
|
|
|
|
|
|
|
Gross margin on total
revenues on a GAAP basis
|
72.8 %
|
|
72.1 %
|
|
71.0 %
|
|
72.0 %
|
|
Stock-based
compensation expense
|
2.4
|
|
2.7
|
|
2.6
|
|
2.6
|
|
Amortization of
purchased intangibles
|
0.2
|
|
0.3
|
|
0.2
|
|
0.3
|
|
Gross margin on total
revenues on a non-GAAP basis
|
75.4 %
|
|
75.1 %
|
|
73.8 %
|
|
74.9 %
|
|
|
|
|
|
|
|
|
|
|
Research and
development expense on a GAAP basis
|
$
161,278
|
|
$
130,257
|
|
$
465,466
|
|
$
377,740
|
|
Stock-based
compensation expense
|
(45,711)
|
|
(37,415)
|
|
(129,909)
|
|
(102,139)
|
|
Amortization of
purchased intangibles
|
(29)
|
|
(29)
|
|
(85)
|
|
(85)
|
|
Research and
development expense on a non-GAAP basis
|
$
115,538
|
|
$
92,813
|
|
$
335,472
|
|
$
275,516
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
October 31,
|
|
Nine months
ended
October 31,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
expense on a GAAP basis
|
$
96,773
|
|
$
93,910
|
|
$
282,269
|
|
$
259,642
|
|
Stock-based
compensation expense
|
(23,460)
|
|
(23,576)
|
|
(67,084)
|
|
(64,500)
|
|
Amortization of
purchased intangibles
|
(3,555)
|
|
(3,555)
|
|
(10,550)
|
|
(10,550)
|
|
Sales and marketing
expense on a non-GAAP basis
|
$
69,758
|
|
$
66,779
|
|
$
204,635
|
|
$
184,592
|
|
|
|
|
|
|
|
|
|
|
General and
administrative expense on a GAAP basis
|
$
62,283
|
|
$
52,873
|
|
$
187,887
|
|
$
159,030
|
|
Stock-based
compensation expense
|
(17,508)
|
|
(17,333)
|
|
(53,109)
|
|
(48,083)
|
|
Amortization of
purchased intangibles
|
(57)
|
|
(57)
|
|
(169)
|
|
(169)
|
|
General and
administrative expense on a non-GAAP basis
|
$
44,718
|
|
$
35,483
|
|
$
134,609
|
|
$
110,778
|
|
|
|
|
|
|
|
|
|
|
Operating expense on a
GAAP basis
|
$
320,334
|
|
$
277,040
|
|
$
935,622
|
|
$
796,412
|
|
Stock-based
compensation expense
|
(86,679)
|
|
(78,324)
|
|
(250,102)
|
|
(214,722)
|
|
Amortization of
purchased intangibles
|
(3,641)
|
|
(3,641)
|
|
(10,804)
|
|
(10,804)
|
|
Operating expense on a
non-GAAP basis
|
$
230,014
|
|
$
195,075
|
|
$
674,716
|
|
$
570,886
|
|
|
|
|
|
|
|
|
|
|
Operating income on a
GAAP basis
|
$
128,489
|
|
$
121,404
|
|
$
294,070
|
|
$
350,168
|
|
Stock-based
compensation expense
|
101,226
|
|
93,187
|
|
294,840
|
|
256,363
|
|
Amortization of
purchased intangibles
|
4,906
|
|
4,906
|
|
14,558
|
|
14,558
|
|
Operating income on a
non-GAAP basis
|
$
234,621
|
|
$
219,497
|
|
$
603,468
|
|
$
621,089
|
|
|
|
|
|
|
|
|
|
|
Operating margin on a
GAAP basis
|
20.8 %
|
|
22.0 %
|
|
17.0 %
|
|
22.0 %
|
|
Stock-based
compensation expense
|
16.4
|
|
16.9
|
|
17.0
|
|
16.1
|
|
Amortization of
purchased intangibles
|
0.9
|
|
0.8
|
|
0.8
|
|
0.9
|
|
Operating margin on a
non-GAAP basis
|
38.1 %
|
|
39.7 %
|
|
34.8 %
|
|
39.0 %
|
|
|
|
|
|
|
|
|
|
|
Net income on a GAAP
basis
|
$
135,158
|
|
$
108,457
|
|
$
378,307
|
|
$
299,173
|
|
Stock-based
compensation expense
|
101,226
|
|
93,187
|
|
294,840
|
|
256,363
|
|
Amortization of
purchased intangibles
|
4,906
|
|
4,906
|
|
14,558
|
|
14,558
|
|
Income tax effect on
non-GAAP adjustments(6)
|
(22,612)
|
|
(23,306)
|
|
(123,070)
|
|
(60,817)
|
|
Net income on a
non-GAAP basis
|
$
218,678
|
|
$
183,244
|
|
$
564,635
|
|
$
509,277
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per
share on a GAAP basis
|
$
0.83
|
|
$
0.67
|
|
$
2.32
|
|
$
1.84
|
|
Stock-based
compensation expense
|
0.62
|
|
0.57
|
|
1.81
|
|
1.58
|
|
Amortization of
purchased intangibles
|
0.03
|
|
0.03
|
|
0.09
|
|
0.09
|
|
Income tax effect on
non-GAAP adjustments(6)
|
(0.14)
|
|
(0.14)
|
|
(0.76)
|
|
(0.37)
|
|
Diluted net income per
share on a non-GAAP basis
|
$
1.34
|
|
$
1.13
|
|
$
3.46
|
|
$
3.14
|
|
|
|
|
|
|
|
|
(6)
|
For the three and nine
months October 31, 2023 and 2022, management used an estimated
annual effective non-GAAP tax rate of 21.0%.
|
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SOURCE Veeva Systems