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Veeva Announces Fiscal 2021 Second Quarter Results

Total Revenues of $353.7M, up 33% Year-over-year;

Subscription Services Revenues of $283.5M, up 30% Year-over-year

Veeva Systems Inc. (NYSE: VEEV), a leading provider of industry cloud solutions for the global life sciences industry, today announced results for its fiscal second quarter ended July 31, 2020.

"We are focused on helping the industry as the move to streamline drug development and enable digital engagement has gone from strategic imperative to operational necessity," said CEO Peter Gassner. "Our team's dedication to customer success, bringing creative solutions, and delivering significant product innovations with speed, is more important than ever as life sciences steps up to meet the challenge of a lifetime."

Fiscal 2021 Second Quarter Results:

  • Revenues: Total revenues for the second quarter were $353.7 million, up from $266.9 million one year ago, an increase of 33% year-over-year. Subscription services revenues for the second quarter were $283.5 million, up from $217.3 million one year ago, an increase of 30% year-over-year.

  • Operating Income and Non-GAAP Operating Income(1): Second quarter operating income was $90.1 million, compared to $73.9 million one year ago, an increase of 22% year-over-year. Non-GAAP operating income for the second quarter was $144.4 million, compared to $103.7 million one year ago, an increase of 39% year-over-year.

  • Net Income and Non-GAAP Net Income(1): Second quarter net income was $93.6 million, compared to $79.2 million one year ago, an increase of 18% year-over-year. Non-GAAP net income for the second quarter was $116.4 million, compared to $87.7 million one year ago, an increase of 33% 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 $0.58, compared to $0.50 one year ago, while non-GAAP fully diluted net income per share was $0.72, compared to $0.55 one year ago.

"Demand for our products and services remains strong as life sciences companies pursue strategic initiatives across R&D and commercial," said CFO Tim Cabral. "Given the opportunity ahead, we continue to invest for product excellence, customer success, and long-term growth."

Recent Highlights:

  • MyVeeva for Doctors to Make it Easy for Healthcare Professionals to Get the Information They Need — Unveiled at Veeva Commercial Summit, MyVeeva for Doctors is a website and mobile application that will give healthcare professionals access to contacts, content, and services from across pharma companies and brands – all in a single place. By having quick and easy access to the information they need, doctors can better help their patients. The new offering is targeted for release at the end of the year for the U.S. market.

  • Innovation and Product Excellence Drives Leadership in Clinical — The quarter marked a number of important milestones including Veeva Vault CTMS’s selection as the global standard by another top 20 pharma and its first top 7 CRO. The company also had a strategic Veeva Vault CDMS win for a number of complex oncology trials with a new top 20 pharma. Overall, more companies are turning to Veeva for its innovation in clinical, including more than 300 Vault eTMF and 70 Vault CTMS customers, and over 100 clinical trials have started on Vault CDMS.

  • Record Quarter for Veeva Vault Quality — Record sales of Vault Quality applications in the second quarter were fueled by a number of key wins and expansions. Building on their success with Veeva Vault, two top 20 pharma customers standardized on Vault QMS and another top 20 added Vault QualityDocs enterprise-wide. More than 120 customers with Vault QMS and QualityDocs can bring together quality work processes and quality documentation into a single system, enabled by Veeva Vault's unique ability to support both content-centric and data-centric applications on a single platform.

Financial Outlook:

Veeva is providing guidance for its fiscal third quarter ending October 31, 2020 as follows:

  • Total revenues between $360 and $362 million.

  • Non-GAAP operating income between $138 and $140 million(2).

  • Non-GAAP fully diluted net income per share between $0.66 and $0.68(2).

Veeva is providing guidance for its fiscal year ending January 31, 2021 as follows:

  • Total revenues between $1,415 and $1,420 million.

  • Non-GAAP operating income between $540 and $545 million(2).

  • Non-GAAP fully diluted net income per share between $2.64 and $2.67(2).

Conference Call Information

What:

Veeva’s Fiscal 2021 Second Quarter Results Conference Call

When:

Thursday, August 27, 2020

Time:

1:30 p.m. PT (4:30 p.m. ET)

Online Registration:

www.directeventreg.com

 

Conference ID 8170917

Webcast:

ir.veeva.com

Investor Presentation Details

An investor presentation providing additional information and analysis can be found at 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, 2020 or fiscal year ending January 31, 2021 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 Systems Inc. is the leader in cloud-based software for the global life sciences industry. Committed to innovation, product excellence, and customer success, Veeva serves more than 900 customers, ranging from the world’s largest pharmaceutical companies to emerging biotechs. Veeva has more than 400 Commercial Cloud customers and more than 590 Development Cloud customers. Veeva is headquartered in the San Francisco Bay Area, with offices throughout North America, Europe, Asia, and Latin America. 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) 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); (ii) breaches in our security measures or unauthorized access to our customers’ data; (iii) our expectation that the future growth rate of our revenues will decline; (iv) 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; (v) 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; (vi) fluctuation of our results, which may make period-to-period comparisons less meaningful; (vii) our ability to integrate Crossix Solutions Inc. and Physicians World, LLC into our business and achieve the expected benefits of the acquisitions, including as a result of the impact of the COVID-19 pandemic on these businesses; (viii) loss of one or more customers, particularly any of our large customers; (ix) system unavailability, system performance problems, or loss of data due to disruptions or other problems with our computing infrastructure; (x) our ability to attract and retain highly skilled employees and manage our growth effectively; (xi) failure to sustain the level of profitability we have achieved in the past as our costs increase; (xii) adverse changes in the life sciences industry, including as a result of customer mergers; (xiii) adverse changes in economic, regulatory, international trade relations, or market conditions, including with respect to natural disasters or actual or threatened public health emergencies; (xiv) a decline in new subscriptions that may not be immediately reflected in our operating results due to the ratable recognition of our subscription revenue; and (xv) pending, threatened, or future legal proceedings and related expenses.

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 April 30, 2020. 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.

VEEVA SYSTEMS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

July 31,
2020

 

January 31,
2020

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

795,782

 

 

$

476,733

 

Short-term investments

699,707

 

 

610,015

 

Accounts receivable, net

220,803

 

 

389,690

 

Unbilled accounts receivable

36,650

 

 

32,817

 

Prepaid expenses and other current assets

32,490

 

 

21,869

 

Total current assets

1,785,432

 

 

1,531,124

 

Property and equipment, net

52,576

 

 

54,752

 

Deferred costs, net

34,645

 

 

35,585

 

Lease right-of-use assets

51,286

 

 

49,132

 

Goodwill

438,529

 

 

438,529

 

Intangible assets, net

124,420

 

 

134,601

 

Deferred income taxes, noncurrent

12,167

 

 

11,870

 

Other long-term assets

17,354

 

 

16,184

 

Total assets

$

2,516,409

 

 

$

2,271,777

 

 

 

 

 

Liabilities and stockholders equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

16,476

 

 

$

19,420

 

Accrued compensation and benefits

27,494

 

 

25,619

 

Accrued expenses and other current liabilities

22,763

 

 

21,620

 

Income tax payable

2,464

 

 

5,613

 

Deferred revenue

421,167

 

 

468,887

 

Lease liabilities

11,118

 

 

10,013

 

Total current liabilities

501,482

 

 

551,172

 

Deferred income taxes, noncurrent

1,824

 

 

2,417

 

Lease liabilities, noncurrent

46,187

 

 

44,815

 

Other long-term liabilities

10,189

 

 

7,779

 

Total liabilities

559,682

 

 

606,183

 

Stockholders’ equity:

 

 

 

Class A common stock

2

 

 

1

 

Class B common stock

 

 

 

Additional paid-in capital

850,776

 

 

745,475

 

Accumulated other comprehensive income

6,170

 

 

460

 

Retained earnings

1,099,779

 

 

919,658

 

Total stockholders’ equity

1,956,727

 

 

1,665,594

 

Total liabilities and stockholders equity

$

2,516,409

 

 

$

2,271,777

 

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,

 

2020

2019

2020

2019

Revenues:

 

 

 

 

Subscription services(4)

$

283,502

 

$

217,312

 

$

553,737

$

415,427

 

Professional services and other(5)

70,181

 

49,588

 

137,052

96,225

 

Total revenues

353,683

 

266,900

 

690,789

511,652

 

Cost of revenues(3):

 

 

 

 

Cost of subscription services

43,400

 

31,480

 

86,612

61,858

 

Cost of professional services and other

53,804

 

38,738

 

105,472

73,863

 

Total cost of revenues

97,204

 

70,218

 

192,084

135,721

 

Gross profit

256,479

 

196,682

 

498,705

375,931

 

Operating expenses(3):

 

 

 

 

Research and development

70,053

 

51,146

 

132,290

96,119

 

Sales and marketing

59,172

 

45,821

 

114,927

85,438

 

General and administrative

37,173

 

25,859

 

73,842

49,349

 

Total operating expenses

166,398

 

122,826

 

321,059

230,906

 

Operating income

90,081

 

73,856

 

177,646

145,025

 

Other income, net

2,881

 

7,332

 

6,295

13,493

 

Income before income taxes

92,962

 

81,188

 

183,941

158,518

 

Provision for (benefit from) income taxes

(589

)

1,946

 

3,820

5,827

 

Net income

$

93,551

 

$

79,242

 

$

180,121

$

152,691

 

 

 

 

 

 

Net income per share:

 

 

 

 

Basic

$

0.62

 

$

0.54

 

$

1.20

$

1.04

 

Diluted

$

0.58

 

$

0.50

 

$

1.12

$

0.96

 

 

 

 

 

 

Weighted-average shares used to compute net income per share:

 

 

 

 

Basic

150,413

 

147,510

 

149,982

147,116

 

Diluted

160,840

 

158,675

 

160,309

158,339

 

Other comprehensive income:

 

 

 

 

Net change in unrealized gains on available-for- sale investments

1,131

 

461

 

2,428

1,423

 

Net change in cumulative foreign currency translation loss

2,893

 

(1,742

)

3,282

(2,444

)

Comprehensive income

$

97,575

 

$

77,961

 

$

185,831

$

151,670

 

 

 

 

 

 

(3) Includes stock-based compensation as follows:

 

 

 

 

Cost of revenues:

 

 

 

 

Cost of subscription services

$

1,532

 

$

583

 

$

2,551

$

968

 

Cost of professional services and other

7,318

 

4,458

 

12,392

7,436

 

Research and development

16,437

 

9,509

 

27,838

15,833

 

Sales and marketing

11,186

 

7,177

 

19,378

12,325

 

General and administrative

12,893

 

6,643

 

24,114

12,564

 

Total stock-based compensation

$

49,366

 

$

28,370

 

$

86,273

$

49,126

 

 

 

 

 

 

(4) Includes subscription services revenues from the following product areas:

 

 

 

 

Veeva Commercial Cloud

$

144,815

 

$

112,593

 

$

287,392

$

218,390

 

Veeva Vault

138,687

 

104,719

 

266,345

197,037

 

Total subscription services

$

283,502

 

$

217,312

 

$

553,737

$

415,427

 

 

 

 

 

 

(5) Includes professional services revenues from the following product areas:

 

 

 

 

Veeva Commercial Cloud

$

26,618

 

$

16,571

 

$

53,994

$

33,792

 

Veeva Vault

43,563

 

33,017

 

83,058

62,433

 

Total professional services

$

70,181

 

$

49,588

 

$

137,052

$

96,225

 

VEEVA SYSTEMS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

Three months ended
July 31,

Six months ended
July 31,

 

2020

2019

2020

2019

Cash flows from operating activities

 

 

 

 

Net income

$

93,551

 

$

79,242

 

$

180,121

 

$

152,691

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

Depreciation and amortization

7,317

 

3,881

 

15,195

 

7,781

 

Reduction of operating lease right-of-use assets

3,092

 

1,680

 

6,089

 

3,218

 

Accretion of discount on short-term investments

496

 

(1,096

)

485

 

(2,274

)

Stock-based compensation

49,366

 

28,370

 

86,273

 

49,126

 

Amortization of deferred costs

5,324

 

4,843

 

10,075

 

9,692

 

Deferred income taxes

(504

)

921

 

(1,638

)

1,339

 

(Gain) Loss on foreign currency from mark-to-market derivative

(98

)

42

 

(5

)

(38

)

Bad debt (expense) recovery

514

 

(159

)

121

 

(312

)

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable

14,606

 

18,804

 

168,766

 

158,314

 

Unbilled accounts receivable

619

 

1,982

 

(3,833

)

(3,262

)

Deferred costs

(5,793

)

(4,427

)

(9,135

)

(9,028

)

Income taxes payable

(3,141

)

611

 

(4,991

)

949

 

Other current and long-term assets

(11,683

)

(1,338

)

(11,132

)

(4,097

)

Accounts payable

914

 

379

 

(3,516

)

(37

)

Accrued expenses and other current liabilities

125

 

2,672

 

2,816

 

1,913

 

Deferred revenue

(49,166

)

(35,225

)

(47,689

)

(27,311

)

Operating lease liabilities

(2,456

)

(1,889

)

(5,267

)

(3,518

)

Other long-term liabilities

2,237

 

1,180

 

4,757

 

1,616

 

Net cash provided by operating activities

105,320

 

100,473

 

387,492

 

336,762

 

Cash flows from investing activities

 

 

 

 

Purchases of short-term investments

(267,749

)

(209,195

)

(456,567

)

(438,089

)

Maturities and sales of short-term investments

229,224

 

187,772

 

369,566

 

376,737

 

Long-term assets

(5,407

)

(1,378

)

(5,140

)

(2,991

)

Net cash used in investing activities

(43,932

)

(22,801

)

(92,141

)

(64,343

)

Cash flows from financing activities

 

 

 

 

Reduction of lease liabilities - finance leases

(251

)

(239

)

(499

)

(488

)

Proceeds from exercise of common stock options

9,278

 

3,620

 

19,059

 

7,011

 

Net cash provided by financing activities

9,027

 

3,381

 

18,560

 

6,523

 

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

2,734

 

(1,742

)

3,282

 

(2,444

)

Net change in cash, cash equivalents, and restricted cash

73,149

 

79,311

 

317,193

 

276,498

 

Cash, cash equivalents, and restricted cash at beginning of period

723,841

 

749,365

 

479,797

 

552,178

 

Cash, cash equivalents, and restricted cash at end of period

$

796,990

 

$

828,676

 

$

796,990

 

$

828,676

 

 

 

 

 

 

Supplemental disclosures of other cash flow information:

 

 

 

 

Excess tax benefits from employee stock plans

$

22,123

 

$

17,026

 

$

41,738

 

$

30,578

 

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.

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:

 

Three months ended
July 31,

 

Six months ended
July 31,

 

2020

 

2019

 

2020

 

2019

Cost of subscription services revenues on a GAAP basis

$

43,400

 

 

 

$

31,480

 

 

 

$

86,612

 

 

 

$

61,858

 

 

Stock-based compensation expense

(1,532

)

 

 

(583

)

 

 

(2,551

)

 

 

(968

)

 

Amortization of purchased intangibles

(1,174

)

 

 

(688

)

 

 

(2,768

)

 

 

(1,355

)

 

Cost of subscription services revenues on a non-GAAP basis

$

40,694

 

 

 

$

30,209

 

 

 

$

81,293

 

 

 

$

59,535

 

 

 

 

 

 

 

 

 

 

Gross margin on subscription services revenues on a GAAP basis

84.7

 

%

 

85.5

 

%

 

84.4

 

%

 

85.1

 

%

Stock-based compensation expense

0.5

 

 

 

0.3

 

 

 

0.5

 

 

 

0.3

 

 

Amortization of purchased intangibles

0.4

 

 

 

0.3

 

 

 

0.4

 

 

 

0.3

 

 

Gross margin on subscription services revenues on a non-GAAP basis

85.6

 

%

 

86.1

 

%

 

85.3

 

%

 

85.7

 

%

 

 

 

 

 

 

 

 

Cost of professional services and other revenues on a GAAP basis

$

53,804

 

 

 

$

38,738

 

 

 

$

105,472

 

 

 

$

73,863

 

 

Stock-based compensation expense

(7,318

)

 

 

(4,458

)

 

 

(12,392

)

 

 

(7,436

)

 

Amortization of purchased intangibles

(138

)

 

 

 

 

 

(273

)

 

 

 

 

Cost of professional services and other revenues on a non-GAAP basis

$

46,348

 

 

 

$

34,280

 

 

 

$

92,807

 

 

 

$

66,427

 

 

 

 

 

 

 

 

 

 

Gross margin on professional services and other revenues on a GAAP basis

23.3

 

%

 

21.9

 

%

 

23.0

 

%

 

23.2

 

%

Stock-based compensation expense

10.5

 

 

 

9.0

 

 

 

9.1

 

 

 

7.8

 

 

Amortization of purchased intangibles

0.2

 

 

 

 

 

 

0.2

 

 

 

 

 

Gross margin on professional services and other revenues on a non-GAAP basis

34.0

 

%

 

30.9

 

%

 

32.3

 

%

 

31.0

 

%

 

 

 

 

 

 

 

 

Gross profit on a GAAP basis

$

256,479

 

 

 

$

196,682

 

 

 

$

498,705

 

 

 

$

375,931

 

 

Stock-based compensation expense

8,850

 

 

 

5,041

 

 

 

14,943

 

 

 

8,404

 

 

Amortization of purchased intangibles

1,312

 

 

 

688

 

 

 

3,041

 

 

 

1,355

 

 

Gross profit on a non-GAAP basis

$

266,641

 

 

 

$

202,411

 

 

 

$

516,689

 

 

 

$

385,690

 

 

 

 

 

 

 

 

 

 

Gross margin on total revenues on a GAAP basis

72.5

 

%

 

73.7

 

%

 

72.2

 

%

 

73.5

 

%

Stock-based compensation expense

2.5

 

 

 

1.9

 

 

 

2.2

 

 

 

1.6

 

 

Amortization of purchased intangibles

0.4

 

 

 

0.3

 

 

 

0.4

 

 

 

0.3

 

 

Gross margin on total revenues on a non-GAAP basis

75.4

 

%

 

75.9

 

%

 

74.8

 

%

 

75.4

 

%

 

 

 

 

 

 

 

 

Research and development expense on a GAAP basis

$

70,053

 

 

 

$

51,146

 

 

 

$

132,290

 

 

 

$

96,119

 

 

Stock-based compensation expense

(16,437

)

 

 

(9,509

)

 

 

(27,838

)

 

 

(15,833

)

 

Amortization of purchased intangibles

(29

)

 

 

 

 

 

(57

)

 

 

 

 

Research and development expense on a non-GAAP basis

$

53,587

 

 

 

$

41,637

 

 

 

$

104,395

 

 

 

$

80,286

 

 

 

 

 

 

 

 

 

 

Sales and marketing expense on a GAAP basis

$

59,172

 

 

 

$

45,821

 

 

 

$

114,927

 

 

 

$

85,438

 

 

Stock-based compensation expense

(11,186

)

 

 

(7,177

)

 

 

(19,378

)

 

 

(12,325

)

 

Amortization of purchased intangibles

(3,568

)

 

 

(825

)

 

 

(6,970

)

 

 

(1,728

)

 

Sales and marketing expense on a non-GAAP basis

$

44,418

 

 

 

$

37,819

 

 

 

$

88,579

 

 

 

$

71,385

 

 

 

 

 

 

 

 

 

 

General and administrative expense on a GAAP basis

$

37,173

 

 

 

$

25,859

 

 

 

$

73,842

 

 

 

$

49,349

 

 

Stock-based compensation expense

(12,893

)

 

 

(6,643

)

 

 

(24,114

)

 

 

(12,564

)

 

Amortization of purchased intangibles

(57

)

 

 

 

 

 

(113

)

 

 

 

 

General and administrative expense on a non-GAAP basis

$

24,223

 

 

 

$

19,216

 

 

 

$

49,615

 

 

 

$

36,785

 

 

 

 

 

 

 

 

 

 

VEEVA SYSTEMS INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (continued)

(Dollars in thousands, except per share data)

(Unaudited)

 

Three months ended
July 31,

 

Six months ended
July 31,

 

2020

 

2019

 

2020

 

2019

Operating expense on a GAAP basis

$

166,398

 

 

 

$

122,826

 

 

 

$

321,059

 

 

 

$

230,906

 

 

Stock-based compensation expense

(40,516

)

 

 

(23,329

)

 

 

(71,330

)

 

 

(40,722

)

 

Amortization of purchased intangibles

(3,654

)

 

 

(825

)

 

 

(7,140

)

 

 

(1,728

)

 

Operating expense on a non-GAAP basis

$

122,228

 

 

 

$

98,672

 

 

 

$

242,589

 

 

 

$

188,456

 

 

 

 

 

 

 

 

 

 

Operating income on a GAAP basis

$

90,081

 

 

 

$

73,856

 

 

 

$

177,646

 

 

 

$

145,025

 

 

Stock-based compensation expense

49,366

 

 

 

28,370

 

 

 

86,273

 

 

 

49,126

 

 

Amortization of purchased intangibles

4,966

 

 

 

1,513

 

 

 

10,181

 

 

 

3,083

 

 

Operating income on a non-GAAP basis

$

144,413

 

 

 

$

103,739

 

 

 

$

274,100

 

 

 

$

197,234

 

 

 

 

 

 

 

 

 

 

Operating margin on a GAAP basis

25.4

 

%

 

27.6

 

%

 

25.7

 

%

 

28.4

 

%

Stock-based compensation expense

14.0

 

 

 

10.6

 

 

 

12.5

 

 

 

9.6

 

 

Amortization of purchased intangibles

1.4

 

 

 

0.6

 

 

 

1.5

 

 

 

0.6

 

 

Operating margin on a non-GAAP basis

40.8

 

%

 

38.8

 

%

 

39.7

 

%

 

38.6

 

%

 

 

 

 

 

 

 

 

Net income on a GAAP basis

$

93,551

 

 

 

$

79,242

 

 

 

$

180,121

 

 

 

$

152,691

 

 

Stock-based compensation expense

49,366

 

 

 

28,370

 

 

 

86,273

 

 

 

49,126

 

 

Amortization of purchased intangibles

4,966

 

 

 

1,513

 

 

 

10,181

 

 

 

3,083

 

 

Income tax effect on non-GAAP adjustments(1)

(31,521

)

 

 

(21,379

)

 

 

(55,063

)

 

 

(38,426

)

 

Net income on a non-GAAP basis

$

116,362

 

 

 

$

87,746

 

 

 

$

221,512

 

 

 

$

166,474

 

 

 

 

 

 

 

 

 

 

Diluted net income per share on a GAAP basis

$

0.58

 

 

 

$

0.50

 

 

 

$

1.12

 

 

 

$

0.96

 

 

Stock-based compensation expense

0.31

 

 

 

0.17

 

 

 

0.54

 

 

 

0.31

 

 

Amortization of purchased intangibles

0.03

 

 

 

0.01

 

 

 

0.06

 

 

 

0.02

 

 

Income tax effect on non-GAAP adjustments(1)

(0.20

)

 

 

(0.13

)

 

 

(0.34

)

 

 

(0.24

)

 

Diluted net income per share on a non-GAAP basis

$

0.72

 

 

 

$

0.55

 

 

 

$

1.38

 

 

 

$

1.05

 

 

________________________

(1)

For the three and six months ended July 31, 2020 and 2019, management used an estimated annual effective non-GAAP tax rate of 21.0%.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20200827005690/en/

Contacts

Investor Relations Contact:
Rick Lund
Veeva Systems Inc.
925-271-9816
ir@veeva.com

Media Contact:
Roger Villareal
Veeva Systems Inc.
925-264-8885
pr@veeva.com