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 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 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
|
ir@veeva.com
|
|
pr@veeva.com
|
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
|
|
$ 332,705
|
|
$ 243,149
|
Net income per
share:
|
|
|
|
|
|
|
|
Basic
|
$
1.06
|
|
$
0.70
|
|
$
2.06
|
|
$
1.52
|
Diluted
|
$
1.04
|
|
$
0.68
|
|
$
2.02
|
|
$
1.49
|
Weighted-average
shares used to compute net income per share:
|
|
|
|
|
|
|
|
Basic
|
161,708
|
|
160,396
|
|
161,566
|
|
160,129
|
Diluted
|
164,564
|
|
163,284
|
|
164,497
|
|
162,989
|
Other comprehensive
income:
|
|
|
|
|
|
|
|
Net change in
unrealized gain (loss) on available-for-sale investments
|
$
25,175
|
|
$
(8,891)
|
|
$
6,314
|
|
$
(3,463)
|
Net change in
cumulative foreign currency translation (loss) gain
|
(104)
|
|
267
|
|
(1,252)
|
|
209
|
Comprehensive
income
|
$ 196,112
|
|
$ 103,004
|
|
$ 337,767
|
|
$ 239,895
|
|
|
|
|
|
|
|
|
(4) Includes
subscription services revenues from the following product
areas:
|
|
|
|
|
|
|
|
Veeva Commercial
Solutions
|
$ 271,810
|
|
$ 243,430
|
|
$ 533,126
|
|
$ 482,754
|
Veeva R&D
Solutions
|
289,467
|
|
227,207
|
|
562,106
|
|
402,429
|
Total subscription
services
|
$ 561,277
|
|
$ 470,637
|
|
$
1,095,232
|
|
$ 885,183
|
|
|
|
|
|
|
|
|
(5) Includes
professional services and other revenues from the following product
areas:
|
|
|
|
|
|
|
|
Veeva Commercial
Solutions
|
$
45,068
|
|
$
47,319
|
|
$
93,840
|
|
$
92,183
|
Veeva R&D
Solutions
|
69,836
|
|
72,269
|
|
137,454
|
|
139,184
|
Total professional
services and other
|
$ 114,904
|
|
$ 119,588
|
|
$ 231,294
|
|
$ 231,367
|
|
|
|
|
|
|
|
|
(6) Includes
stock-based compensation as follows:
|
|
|
|
|
|
|
|
Cost of
revenues:
|
|
|
|
|
|
|
|
Cost of subscription
services
|
$
1,642
|
|
$
1,748
|
|
$
3,196
|
|
$
3,253
|
Cost of professional
services and other
|
13,176
|
|
14,216
|
|
25,711
|
|
26,938
|
Research and
development
|
48,984
|
|
45,292
|
|
90,727
|
|
84,198
|
Sales and
marketing
|
23,671
|
|
23,489
|
|
46,714
|
|
43,624
|
General and
administrative
|
20,903
|
|
18,150
|
|
37,939
|
|
35,601
|
Total stock-based
compensation
|
$ 108,376
|
|
$ 102,895
|
|
$ 204,287
|
|
$ 193,614
|
VEEVA SYSTEMS
INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (In thousands) (Unaudited)
|
|
|
Six months ended
July
31,
|
|
2024
|
|
2023
|
Cash flows from
operating activities
|
|
|
|
Net income
|
$ 332,705
|
|
$ 243,149
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
19,519
|
|
15,636
|
Reduction of operating
lease right-of-use assets
|
5,508
|
|
6,025
|
Accretion of discount
on short-term investments
|
(14,254)
|
|
(10,783)
|
Stock-based
compensation
|
204,287
|
|
193,614
|
Amortization of
deferred cost
|
7,651
|
|
9,301
|
Deferred income
taxes
|
(59,801)
|
|
(46,727)
|
Gain on foreign
currency from mark-to-market derivative
|
(107)
|
|
(547)
|
Bad debt
expense
|
234
|
|
496
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
487,219
|
|
323,493
|
Unbilled accounts
receivable
|
(3,067)
|
|
44,633
|
Deferred
costs
|
(7,174)
|
|
61
|
Other current and
long-term assets
|
4,344
|
|
9,245
|
Accounts
payable
|
(3,343)
|
|
8,054
|
Accrued expenses and
other current liabilities
|
(5,517)
|
|
(1,129)
|
Income taxes
payable
|
(6,246)
|
|
19,197
|
Deferred
revenue
|
(103,652)
|
|
(36,083)
|
Operating lease
liabilities
|
(4,666)
|
|
(4,290)
|
Other long-term
liabilities
|
2,750
|
|
(2,373)
|
Net cash provided
by operating activities
|
856,390
|
|
770,972
|
Cash flows from
investing activities
|
|
|
|
Purchases of
short-term investments
|
(1,392,297)
|
|
(1,600,566)
|
Maturities and sales
of short-term investments
|
1,017,605
|
|
696,793
|
Long-term
assets
|
(11,528)
|
|
(12,551)
|
Net cash used in
investing activities
|
(386,220)
|
|
(916,324)
|
Cash flows from
financing activities
|
|
|
|
Proceeds from exercise
of common stock options
|
34,834
|
|
38,228
|
Taxes paid related to
net share settlement of equity awards
|
(42,490)
|
|
(37,043)
|
Net cash (used in)
provided by financing activities
|
(7,656)
|
|
1,185
|
Effect of exchange rate
changes on cash, cash equivalents, and restricted cash
|
(1,252)
|
|
309
|
Net change in cash,
cash equivalents, and restricted cash
|
461,262
|
|
(143,858)
|
Cash, cash equivalents,
and restricted cash at beginning of period
|
706,670
|
|
889,650
|
Cash, cash
equivalents, and restricted cash at end of period
|
$
1,167,932
|
|
$ 745,792
|
|
|
|
|
Supplemental
disclosures of other cash flow information:
|
|
|
|
Excess tax benefits
from employee stock plans
|
$
4,262
|
|
$
65,300
|
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. 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.
- Litigation settlement. We exclude costs related to the
settlement of certain litigation matters because they are
non-recurring and outside the ordinary course of business. Because
these costs are unrelated to our day-to-day business operations, we
believe excluding them enables more consistent evaluation of our
operating results.
- 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,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Net cash provided by
operating activities on a GAAP basis
|
$
92,874
|
|
$
265,036
|
|
$
856,390
|
|
$
770,972
|
Excess tax benefits
from employee stock plans
|
(1,141)
|
|
(3,211)
|
|
(4,262)
|
|
(65,300)
|
Net cash provided by
operating activities on a non-GAAP basis
|
$
91,733
|
|
$
261,825
|
|
$
852,128
|
|
$
705,672
|
Net cash used in
investing activities on a GAAP basis
|
$
(113,842)
|
|
$
(618,930)
|
|
$
(386,220)
|
|
$
(916,324)
|
Net cash (used in)
provided by financing activities on a GAAP basis
|
$
(11,484)
|
|
$ 2,577
|
|
$
(7,656)
|
|
$ 1,185
|
|
|
|
|
|
|
|
|
Reconciliation of
Financial Measures (GAAP basis to non-GAAP basis)
|
Three months ended
July
31,
|
|
Six months ended
July
31,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Cost of subscription
services revenues on a GAAP basis
|
$
78,791
|
|
$
71,169
|
|
$
156,939
|
|
$
138,744
|
Stock-based
compensation expense
|
(1,642)
|
|
(1,748)
|
|
(3,196)
|
|
(3,253)
|
Amortization of
purchased intangibles
|
(1,123)
|
|
(1,126)
|
|
(2,222)
|
|
(2,216)
|
Cost of subscription
services revenues on a non-GAAP basis
|
$
76,026
|
|
$
68,295
|
|
$
151,521
|
|
$
133,275
|
|
|
|
|
|
|
|
|
Gross margin on
subscription services revenues on a GAAP basis
|
86.0 %
|
|
84.9 %
|
|
85.7 %
|
|
84.3 %
|
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
|
86.5 %
|
|
85.5 %
|
|
86.2 %
|
|
84.9 %
|
|
|
|
|
|
|
|
|
Cost of professional
services and other revenues on a GAAP basis
|
$
91,581
|
|
$
97,849
|
|
$
187,317
|
|
$
196,937
|
Stock-based
compensation expense
|
(13,176)
|
|
(14,216)
|
|
(25,711)
|
|
(26,938)
|
Amortization of
purchased intangibles
|
(138)
|
|
(139)
|
|
(273)
|
|
(273)
|
Cost of professional
services and other revenues on a non-GAAP basis
|
$
78,267
|
|
$
83,494
|
|
$
161,333
|
|
$
169,726
|
|
|
|
|
|
|
|
|
Gross margin on
professional services and other revenues on a GAAP basis
|
20.3 %
|
|
18.2 %
|
|
19.0 %
|
|
14.9 %
|
Stock-based
compensation expense
|
11.5
|
|
11.9
|
|
11.1
|
|
11.6
|
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
|
31.9 %
|
|
30.2 %
|
|
30.2 %
|
|
26.6 %
|
|
|
|
|
|
|
|
|
Gross profit on a GAAP
basis
|
$
505,809
|
|
$
421,207
|
|
$
982,270
|
|
$
780,869
|
Stock-based
compensation expense
|
14,818
|
|
15,964
|
|
28,907
|
|
30,191
|
Amortization of
purchased intangibles
|
1,261
|
|
1,265
|
|
2,495
|
|
2,489
|
Gross profit on a
non-GAAP basis
|
$
521,888
|
|
$
438,436
|
|
$
1,013,672
|
|
$
813,549
|
|
|
|
|
|
|
|
|
Gross margin on total
revenues on a GAAP basis
|
74.8 %
|
|
71.4 %
|
|
74.0 %
|
|
69.9 %
|
Stock-based
compensation expense
|
2.2
|
|
2.7
|
|
2.2
|
|
2.7
|
Amortization of
purchased intangibles
|
0.2
|
|
0.2
|
|
0.2
|
|
0.3
|
Gross margin on total
revenues on a non-GAAP basis
|
77.2 %
|
|
74.3 %
|
|
76.4 %
|
|
72.9 %
|
|
|
|
|
|
|
|
|
Research and
development expense on a GAAP basis
|
$
176,429
|
|
$
157,228
|
|
$
339,140
|
|
$
304,188
|
Stock-based
compensation expense
|
(48,984)
|
|
(45,292)
|
|
(90,727)
|
|
(84,198)
|
Amortization of
purchased intangibles
|
(28)
|
|
(29)
|
|
(56)
|
|
(56)
|
Research and
development expense on a non-GAAP basis
|
$
127,417
|
|
$
111,907
|
|
$
248,357
|
|
$
219,934
|
|
|
|
|
|
Three months ended
July
31,
|
|
Six months ended
July
31,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
|
|
|
|
|
|
|
Sales and marketing
expense on a GAAP basis
|
$
101,528
|
|
$
96,995
|
|
$
198,829
|
|
$
185,498
|
Stock-based
compensation expense
|
(23,671)
|
|
(23,489)
|
|
(46,714)
|
|
(43,624)
|
Amortization of
purchased intangibles
|
(3,546)
|
|
(3,555)
|
|
(7,014)
|
|
(6,995)
|
Sales and marketing
expense on a non-GAAP basis
|
$
74,311
|
|
$
69,951
|
|
$
145,101
|
|
$
134,879
|
|
|
|
|
|
|
|
|
General and
administrative expense on a GAAP basis
|
$
61,365
|
|
$
62,935
|
|
$
122,642
|
|
$
125,604
|
Stock-based
compensation expense
|
(20,903)
|
|
(18,150)
|
|
(37,939)
|
|
(35,601)
|
Amortization of
purchased intangibles
|
(57)
|
|
(57)
|
|
(113)
|
|
(112)
|
Litigation
settlement
|
—
|
|
—
|
|
(5,000)
|
|
—
|
General and
administrative expense on a non-GAAP basis
|
$
40,405
|
|
$
44,728
|
|
$
79,590
|
|
$
89,891
|
|
|
|
|
|
|
|
|
Operating expense on a
GAAP basis
|
$
339,322
|
|
$
317,158
|
|
$
660,611
|
|
$
615,290
|
Stock-based
compensation expense
|
(93,558)
|
|
(86,931)
|
|
(175,380)
|
|
(163,423)
|
Amortization of
purchased intangibles
|
(3,631)
|
|
(3,641)
|
|
(7,183)
|
|
(7,163)
|
Litigation
settlement
|
—
|
|
—
|
|
(5,000)
|
|
—
|
Operating expense on a
non-GAAP basis
|
$
242,133
|
|
$
226,586
|
|
$
473,048
|
|
$
444,704
|
|
|
|
|
|
|
|
|
Operating income on a
GAAP basis
|
$
166,487
|
|
$
104,049
|
|
$
321,659
|
|
$
165,579
|
Stock-based
compensation expense
|
108,376
|
|
102,895
|
|
204,287
|
|
193,614
|
Amortization of
purchased intangibles
|
4,892
|
|
4,906
|
|
9,678
|
|
9,652
|
Litigation
settlement
|
—
|
|
—
|
|
5,000
|
|
—
|
Operating income on a
non-GAAP basis
|
$
279,755
|
|
$
211,850
|
|
$
540,624
|
|
$
368,845
|
|
|
|
|
|
|
|
|
Operating margin on a
GAAP basis
|
24.6 %
|
|
17.6 %
|
|
24.2 %
|
|
14.8 %
|
Stock-based
compensation expense
|
16.0
|
|
17.4
|
|
15.4
|
|
17.3
|
Amortization of
purchased intangibles
|
0.8
|
|
0.9
|
|
0.8
|
|
0.9
|
Litigation
settlement
|
—
|
|
—
|
|
0.4
|
|
—
|
Operating margin on a
non-GAAP basis
|
41.4 %
|
|
35.9 %
|
|
40.8 %
|
|
33.0 %
|
|
|
|
|
|
|
|
|
Net income on a GAAP
basis
|
$
171,041
|
|
$
111,628
|
|
$
332,705
|
|
$
243,149
|
Stock-based
compensation expense
|
108,376
|
|
102,895
|
|
204,287
|
|
193,614
|
Amortization of
purchased intangibles
|
4,892
|
|
4,906
|
|
9,678
|
|
9,652
|
Litigation
settlement
|
—
|
|
—
|
|
5,000
|
|
—
|
Income tax effect on
non-GAAP adjustments(7)
|
(17,030)
|
|
(21,395)
|
|
(37,438)
|
|
(100,459)
|
Net income on a
non-GAAP basis
|
$
267,279
|
|
$
198,034
|
|
$
514,232
|
|
$
345,956
|
|
|
|
|
|
|
|
|
Diluted net income per
share on a GAAP basis
|
$
1.04
|
|
$
0.68
|
|
$
2.02
|
|
$
1.49
|
Stock-based
compensation expense
|
0.66
|
|
0.63
|
|
1.24
|
|
1.19
|
Amortization of
purchased intangibles
|
0.03
|
|
0.03
|
|
0.06
|
|
0.06
|
Litigation
settlement
|
—
|
|
—
|
|
0.03
|
|
—
|
Income tax effect on
non-GAAP adjustments(7)
|
(0.11)
|
|
(0.13)
|
|
(0.22)
|
|
(0.62)
|
Diluted net income per
share on a non-GAAP basis
|
$
1.62
|
|
$
1.21
|
|
$
3.13
|
|
$
2.12
|
________________________
|
(7)
For the three and six months ended July 31, 2024 and 2023,
management used an estimated annual effective non-GAAP
|
tax
rate of 21.0%.
|
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SOURCE Veeva Systems