Veeva Announces Fiscal 2022 Third Quarter Results

PLEASANTON, Calif., Dec. 1, 2021 /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, 2021.

"Innovation and consistent execution have us tracking ahead of our 2025 targets and set us up for significant growth beyond," said CEO Peter Gassner. "As the strategic partner to the life sciences industry in its move to new digital and specialty models, we are proud our work will help patients get the therapies they need faster and easier."

Fiscal 2022 Third Quarter Results:

• Revenues: Total revenues for the third quarter were $476.1 million, up from $377.5 million one year ago, an increase of 26% year over year. Subscription services revenues for the third quarter were $380.7 million, up from $302.9 million one year ago, an increase of 26% year over year.
• Operating Income and Non-GAAP Operating Income⁽¹⁾: Third quarter operating income was $132.7 million, compared to $101.3 million one year ago, an increase of 31% year over year. Non-GAAP operating income for the third quarter was $199.4 million, compared to $155.5 million one year ago, an increase of 28% year over year.
• Net Income and Non-GAAP Net Income⁽¹⁾: Third quarter net income was $105.9 million, compared to $97.0 million one year ago, an increase of 9% year over year. Non-GAAP net income for the third quarter was $158.2 million, compared to $125.6 million one year ago, an increase of 26% 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 $0.65, compared to $0.60 one year ago, while non-GAAP fully diluted net income per share was $0.97, compared to $0.78 one year ago.

"Our focus on customer success delivered another great quarter with top and bottom line results that exceeded our guidance," said CFO Brent Bowman. "We are excited about the large and expanding market opportunity ahead and are investing aggressively across our people and products to support strong growth in the years ahead."

Recent Highlights:

• Veeva Data Cloud Innovation — Veeva is investing in the significant long-term opportunity for Veeva Data Cloud with new data assets and delivery methods. Data Cloud's new portal takes a modern, self-service approach where customers can define their own data subscriptions and delivery methods. Veeva also added new Data Cloud early adopters in Q3 for its patient data offering.
• Transforming Regulatory for Greater Speed and Compliance — Continued customer success and the need to unify regulatory processes globally for greater speed and compliance drove further Veeva Vault RIM growth. Q3 saw a major milestone in Veeva's reference selling model, with its first enterprise customer now live with all four Vault RIM Suite applications. There were also two notable top 20 wins, one for Vault Registrations and one for Vault Publishing.
• Another Quarter of Expanding Commercial Leadership — Veeva once again saw share  gains through new wins and as existing customers expanded within Veeva Commercial Cloud. Seven 7-figure deals in the quarter came in a number of areas including Veeva CRM, Veeva Crossix, and Veeva Link. Veeva CRM also had 15 new SMB wins, enterprise expansions, and strength internationally with two major field forces in Asia standardizing on the product.

Financial Outlook:

Veeva is providing guidance for its fiscal fourth quarter ending January 31, 2022 as follows:

• Total revenues between $478 and $480 million.
• Non-GAAP operating income of about $181 million⁽²⁾.
• Non-GAAP fully diluted net income per share of approximately $0.88⁽²⁾.

Veeva is providing guidance for its fiscal year ending January 31, 2022 as follows:

• Total revenues between $1,843 and $1,845 million.
• Non-GAAP operating income of about $753 million⁽²⁾.
• Non-GAAP fully diluted net income per share of approximately $3.69⁽²⁾.

Veeva is providing guidance for its fiscal year ending January 31, 2023 as follows:

• Total revenues between $2,150 and $2,170 million.
• Subscription services revenues between $1,735 and $1,745 million.
• Non-GAAP operating margin of roughly 38%⁽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, December 1, 2021, and a replay of the call will be available on Veeva's investor relations website.

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⁽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, 2022 or fiscal year ending January 31, 2022 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.

⁽³⁾ Veeva is not able, at this time, to provide GAAP targets for operating margin for the fiscal year ending January 31, 2023 because of the difficulty of estimating certain items excluded from non-GAAP operating income 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, including the quotations from management, the statements in "Financial Outlook," and other statements regarding Veeva's future performance, outlook, and guidance and the assumptions underlying those statements, market growth, the benefits from the use of Veeva's solutions, our strategies, and general business conditions. Any forward-looking statements contained in this press release are based upon Veeva's historical performance and its current plans, estimates, and expectations and are not a representation that such plans, estimates, or expectations will be achieved. These forward-looking statements represent Veeva's expectations as of the date of this press announcement. Subsequent events may cause these expectations to change, and Veeva disclaims any obligation to update the forward-looking statements in the future. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially, including (i) breaches in our security measures or unauthorized access to our customers' data; (ii) competitive factors, including but not limited to pricing pressures, consolidation among our competitors, entry of new competitors, the launch of new products and marketing initiatives by our existing competitors, and difficulty securing rights to access, host or integrate with complementary third party products or data used by our customers; (iii) the rate of adoption of our newer solutions and the results of our efforts to sustain or expand the use and adoption of our more established applications, like Veeva CRM; (iv) our expectation that the future growth rate of our revenues will decline; (v) loss of one or more customers, particularly any of our large customers; (vi) our ability to attract and retain highly skilled employees and manage our growth effectively; (vii) fluctuation of our results, which may make period-to-period comparisons less meaningful; (viii) adverse changes in the life sciences industry, including as a result of customer mergers; (ix) the impact of the COVID-19 pandemic (including the impact to the life sciences industry, impact on general economic conditions, and government responses, restrictions, and actions related to the pandemic); (x) system unavailability, system performance problems, or loss of data due to disruptions or other problems with our computing infrastructure;  (xi) failure to sustain the level of profitability we have achieved in the past as our costs increase; (xii) adverse changes in economic, regulatory, international trade relations, or market conditions, including with respect to natural disasters or actual or threatened public health emergencies; (xiii) a decline in new subscriptions that may not be immediately reflected in our operating results due to the ratable recognition of our subscription revenue; (xiv) pending, threatened, or future legal proceedings and related expenses; and (xv) our recent conversion to a Delaware public benefit corporation, including the expected impact, benefits, and risks of our conversion.

Additional risks and uncertainties that could affect Veeva's financial results are included under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the company's filing on Form 10-Q for the period ended July 31, 2021. This is available on the company's website at veeva.com under the Investors section and on the SEC's website at sec.gov. Further information on potential risks that could affect actual results will be included in other filings Veeva makes with the SEC from time to time.

Investor Relations Contact:
Ato Garrett
Veeva Systems Inc.
925-271-4204
[email protected]

Media Contact:
Deivis Mercado
Veeva Systems Inc.
925-226-8821
[email protected]

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.

• 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 under FASB ASC Topic 718, 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.

The following tables reconcile the specific items excluded from GAAP metrics in the calculation of non-GAAP metrics for the periods shown below:

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SOURCE Veeva Systems