Veeva Announces Fourth Quarter and Fiscal Year 2021 Results

March 2, 2021 Off By BusinessWire

Fiscal Year 2021 Total Revenues of $1,465.1M, up 33% Year-over-year;

Q4 Total Revenues of $396.8M, up 27% Year-over-year;

Fiscal Year 2021 Subscription Services Revenues of $1,179.5M, up 32% Year-over-year;

Q4 Subscription Services Revenues of $322.8M, up 27% Year-over-year

PLEASANTON, Calif.–(BUSINESS WIRE)–Veeva Systems Inc. (NYSE: VEEV), a leading provider of industry cloud solutions for the global life sciences industry, today announced results for its fourth quarter and fiscal year ended January 31, 2021.

“It was a transformational year for life sciences and for Veeva. The industry delivered breakthroughs in diagnostics, therapies, and vaccines during a global pandemic,” said CEO Peter Gassner. “I am proud of the Veeva team’s execution and commitment. We innovated faster than ever before to help our customers adapt quickly in support of doctors and patients around the world.”

Fiscal 2021 Fourth Quarter Results:

  • Revenues: Total revenues for the fourth quarter were $396.8 million, up from $311.5 million one year ago, an increase of 27% year-over-year. Subscription services revenues for the fourth quarter were $322.8 million, up from $254.1 million one year ago, an increase of 27% year-over-year.
  • Operating Income and Non-GAAP Operating Income(1): Fourth quarter operating income was $98.8 million, compared to $60.4 million one year ago, an increase of 64% year-over-year. Non-GAAP operating income for the fourth quarter was $153.2 million, compared to $103.4 million one year ago, an increase of 48% year-over-year.
  • Net Income and Non-GAAP Net Income(1): Fourth quarter net income was $102.9 million, compared to $66.2 million one year ago, an increase of 56% year-over-year. Non-GAAP net income for the fourth quarter was $126.1 million, compared to $85.5 million one year ago, an increase of 47% year-over-year.
  • Net Income per Share and Non-GAAP Net Income per Share(1): For the fourth quarter, fully diluted net income per share was $0.64, compared to $0.42 one year ago, while non-GAAP fully diluted net income per share was $0.78, compared to $0.54 one year ago.

Fiscal Year 2021 Results:

  • Revenues: Total revenues for the fiscal year ended January 31, 2021 were $1,465.1 million, up from $1,104.1 million one year ago, an increase of 33% year-over-year. Subscription services revenues were $1,179.5 million, up from $896.3 million one year ago, an increase of 32% year-over-year.
  • Operating Income and Non-GAAP Operating Income(1): Fiscal year 2021 operating income was $377.8 million, compared to $286.2 million one year ago, an increase of 32% year-over-year. Non-GAAP operating income for fiscal year 2021 was $582.8 million, compared to $412.2 million one year ago, an increase of 41% year-over-year.
  • Net Income and Non-GAAP Net Income(1): Fiscal year 2021 net income was $380.0 million, compared to $301.1 million one year ago, an increase of 26% year-over-year. Non-GAAP net income for fiscal year 2021 was $473.2 million, compared to $347.4 million one year ago, an increase of 36% year-over-year.
  • Net Income per Share and Non-GAAP Net Income per Share(1): For fiscal year 2021, fully diluted net income per share was $2.36, compared to $1.90 one year ago, while non-GAAP fully diluted net income per share was $2.94, compared to $2.19 one year ago.

“Our record results in Q4 and the year reflect our continued ability to deliver for the industry and our deep commitment to customer success,” said CFO Brent Bowman. “We are investing aggressively for the sizable market opportunity we see across all our major product areas.”

Recent Highlights:

  • Year of Innovation, Growth, and Expanding Strategic Relationships with Customers — Veeva ended the year with 993 customers, up from 861 the year prior. Veeva Commercial Cloud grew to 432 customers, up from 390, and Veeva Vault increased to 852 customers, up from 715(2). Subscription revenue retention was 124% for the year(3). Customer growth and expansion were fueled by Veeva’s continued innovation across R&D and commercial to help the customers streamline drug development and move to a digital-first commercial model.
  • Record Bookings Quarter and Year for Veeva Commercial Cloud and Veeva Development Cloud — Veeva again expanded its leadership position in commercial, posting record Commercial Cloud bookings for the fourth quarter and fiscal 2021. This was marked by outperformance across Commercial Cloud, with particular strength in Veeva CRM Engage Meeting in Q4. Veeva Development Cloud also had record bookings for the quarter and year fueled by widespread momentum.
  • Veeva Becomes a Public Benefit Corporation — Following an overwhelming majority vote, Veeva was the largest-ever and first publicly traded company to become a public benefit corporation (PBC). As a PBC, Veeva’s legal charter now reflects its commitment to all stakeholders, including customers, employees, and shareholders. The move aligns with Veeva’s long-term mission to help life sciences companies in their crucial work to improve and extend life.

Financial Outlook:

Veeva is providing guidance for its fiscal first quarter ending April 30, 2021 as follows:

  • Total revenues between $408 and $410 million.
  • Non-GAAP operating income between $157 and $159 million(4).
  • Non-GAAP fully diluted net income per share between $0.77 and $0.78(4).

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

  • Total revenues between $1,755 and $1,765 million.
  • Non-GAAP operating income of about $655 million(4).
  • Non-GAAP fully diluted net income per share of approximately $3.20(4).

Conference Call Information

What:

Veeva’s Fourth Quarter and Fiscal Year 2021 Results Conference Call

When:

Tuesday, March 2, 2021

Time:

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

Online Registration:

www.directeventreg.com

 

Conference ID 9665556

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) The combined customer counts for Veeva Commercial Cloud and Veeva Vault exceed the total customer count in each year because some customers subscribe to products in both areas. Veeva Commercial Cloud customers are those customers that have at least one of the following products: Veeva CRM, Veeva CLM, Veeva CRM Approved Email, Veeva CRM Engage, Veeva Align, Veeva CRM Events Management (including services delivered via Physicians World), Veeva Nitro, Veeva Andi, Veeva OpenData, Veeva Link, Veeva Network Customer Master, Veeva Crossix, or Veeva Data Cloud. Veeva Vault customers are those customers that have at least one Vault product.

(3) We calculate our annual subscription services revenue retention rate for a particular fiscal year by dividing (i) annualized subscription revenue as of the last day of that fiscal year from those customers that were also customers as of the last day of the prior fiscal year by (ii) the annualized subscription revenue from all customers as of the last day of the prior fiscal year. Annualized subscription revenue is calculated by multiplying the daily subscription revenue recognized on the last day of the fiscal year by 365. This calculation includes the impact on our revenues from customer non-renewals, deployments of additional users or decreases in users, deployments of additional solutions or discontinued use of solutions by our customers, and price changes for our solutions.

(4) Veeva is not able, at this time, to provide GAAP targets for operating income and fully diluted net income per share for the first fiscal quarter ending April 30, 2021 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.

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 975 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) 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) 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; (iv) 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; (v) our expectation that the future growth rate of our revenues will decline; (vi) loss of one or more customers, particularly any of our large customers; (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) 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 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 October 31, 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.

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

January 31,
2021

 

January 31,
2020

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

730,504

 

$

476,733

 

Short-term investments

933,122

 

610,015

 

Accounts receivable, net

564,387

 

389,690

 

Unbilled accounts receivable

47,206

 

32,817

 

Prepaid expenses and other current assets

35,607

 

21,869

 

Total current assets

2,310,826

 

1,531,124

 

Property and equipment, net

53,650

 

54,752

 

Deferred costs, net

42,072

 

35,585

 

Lease right-of-use assets

56,917

 

49,132

 

Goodwill

436,029

 

438,529

 

Intangible assets, net

114,595

 

134,601

 

Deferred income taxes, noncurrent

14,100

 

11,870

 

Other long-term assets

17,878

 

16,184

 

Total assets

$

3,046,067

 

$

2,271,777

 

 

 

 

 

Liabilities and stockholders equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

23,253

 

$

19,420

 

Accrued compensation and benefits

30,410

 

25,619

 

Accrued expenses and other current liabilities

30,982

 

21,620

 

Income tax payable

2,590

 

5,613

 

Deferred revenue

616,992

 

468,887

 

Lease liabilities

11,725

 

10,013

 

Total current liabilities

715,952

 

551,172

 

Deferred income taxes, noncurrent

1,835

 

2,417

 

Lease liabilities, noncurrent

51,393

 

44,815

 

Other long-term liabilities

10,567

 

7,779

 

Total liabilities

779,747

 

606,183

 

Stockholders’ equity:

 

 

 

Class A common stock

2

 

1

 

Class B common stock

 

 

Additional paid-in capital

965,670

 

745,475

 

Accumulated other comprehensive income

992

 

460

 

Retained earnings

1,299,656

 

919,658

 

Total stockholders’ equity

2,266,320

 

1,665,594

 

Total liabilities and stockholders equity

$

3,046,067

 

$

2,271,777

 

VEEVA SYSTEMS INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands, except per share data)

(Unaudited)

 

Three months ended
January 31,

 

Fiscal year ended
January 31,

 

2021

 

2020

 

2021

 

2020

Revenues:

 

 

 

 

 

 

 

Subscription services(6)

$

322,811

 

 

$

254,107

 

 

$

1,179,486

 

 

$

896,294

 

Professional services and other(7)

73,950

 

 

57,401

 

 

285,583

 

 

207,787

 

Total revenues

396,761

 

 

311,508

 

 

1,465,069

 

 

1,104,081

 

Cost of revenues(5):

 

 

 

 

 

 

 

Cost of subscription services

52,132

 

 

42,506

 

 

184,589

 

 

136,328

 

Cost of professional services and other

61,715

 

 

51,813

 

 

224,339

 

 

167,041

 

Total cost of revenues

113,847

 

 

94,319

 

 

408,928

 

 

303,369

 

Gross profit

282,914

 

 

217,189

 

 

1,056,141

 

 

800,712

 

Operating expenses(5):

 

 

 

 

 

 

 

Research and development

81,938

 

 

61,201

 

 

294,220

 

 

209,895

 

Sales and marketing

62,105

 

 

59,369

 

 

235,014

 

 

190,331

 

General and administrative

40,028

 

 

36,225

 

 

149,113

 

 

114,267

 

Total operating expenses

184,071

 

 

156,795

 

 

678,347

 

 

514,493

 

Operating income

98,843

 

 

60,394

 

 

377,794

 

 

286,219

 

Other income, net

6,449

 

 

4,844

 

 

16,199

 

 

27,478

 

Income before income taxes

105,292

 

 

65,238

 

 

393,993

 

 

313,697

 

Provision for income taxes

2,374

 

 

(944

)

 

13,995

 

 

12,579

 

Net income

$

102,918

 

 

$

66,182

 

 

$

379,998

 

 

$

301,118

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

Basic

$

0.68

 

 

$

0.44

 

 

$

2.52

 

 

$

2.03

 

Diluted

$

0.64

 

 

$

0.42

 

 

$

2.36

 

 

$

1.90

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

Basic

151,693

 

 

148,773

 

 

150,666

 

 

147,796

 

Diluted

162,008

 

 

158,792

 

 

160,732

 

 

158,296

 

Other comprehensive income:

 

 

 

 

 

 

 

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

$

(213

)

 

$

212

 

 

$

985

 

 

$

2,388

 

Net change in cumulative foreign currency translation loss

(2,297

)

 

74

 

 

(453

)

 

(2,857

)

Comprehensive income

$

100,408

 

 

$

66,468

 

 

$

380,530

 

 

$

300,649

 

 

 

 

 

 

 

 

 

(5) Includes stock-based compensation as follows:

 

 

 

 

 

 

 

Cost of revenues:

 

 

 

 

 

 

 

Cost of subscription services

$

1,140

 

 

$

1,110

 

 

$

4,840

 

 

$

2,638

 

Cost of professional services and other

7,796

 

 

5,257

 

 

27,698

 

 

17,518

 

Research and development

18,018

 

 

11,269

 

 

63,541

 

 

37,001

 

Sales and marketing

10,485

 

 

8,330

 

 

40,574

 

 

27,537

 

General and administrative

12,316

 

 

11,493

 

 

48,348

 

 

31,212

 

Total stock-based compensation

$

49,755

 

 

$

37,459

 

 

$

185,001

 

 

$

115,906

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

Veeva Commercial Cloud

$

159,376

 

 

$

135,024

 

 

$

599,234

 

 

$

468,615

 

Veeva Vault

163,435

 

 

119,083

 

 

580,252

 

 

427,679

 

Total subscription services

$

322,811

 

 

$

254,107

 

 

$

1,179,486

 

 

$

896,294

 

 

 

 

 

 

 

 

 

(7) Includes professional services and other revenues from the following product areas:

 

 

 

 

 

 

 

Veeva Commercial Cloud

$

30,389

 

 

$

23,966

 

 

$

113,498

 

 

$

76,347

 

Veeva Vault

43,561

 

 

33,435

 

 

172,085

 

 

131,440

 

Total professional services and other

$

73,950

 

 

$

57,401

 

 

$

285,583

 

 

$

207,787

 

VEEVA SYSTEMS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

Three months ended
January 31,

 

Fiscal year ended
January 31,

 

2021

 

2020

 

2021

 

2020

Cash flows from operating activities

 

 

 

 

 

 

 

Net income

$

102,918

 

 

$

66,182

 

 

$

379,998

 

 

$

301,118

 

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

 

 

 

 

 

 

 

Depreciation and amortization

6,735

 

 

8,233

 

 

29,455

 

 

19,859

 

Reduction of operating lease right-of-use assets

936

 

 

2,950

 

 

10,347

 

 

7,966

 

Accretion of discount on short-term investments

1,446

 

 

(278

)

 

3,134

 

 

(3,274

)

Stock-based compensation

49,755

 

 

37,459

 

 

185,001

 

 

115,906

 

Amortization of deferred costs

5,252

 

 

5,997

 

 

20,677

 

 

20,521

 

Deferred income taxes

2,484

 

 

(8,434

)

 

(1,048

)

 

(6,663

)

Gain on foreign currency from mark-to-market derivative

(379

)

 

(8

)

 

(365

)

 

(120

)

Bad debt (expense) recovery

(247

)

 

286

 

 

(307

)

 

244

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Accounts receivable

(380,281

)

 

(242,164

)

 

(174,067

)

 

(55,531

)

Unbilled accounts receivable

6,031

 

 

(1,778

)

 

(14,387

)

 

(14,555

)

Deferred costs

(11,852

)

 

(11,709

)

 

(27,164

)

 

(25,237

)

Income taxes payable

(2,570

)

 

(3,727

)

 

(3,023

)

 

1,131

 

Other current and long-term assets

(9,487

)

 

(4,213

)

 

(12,424

)

 

(2,700

)

Accounts payable

1,210

 

 

1,597

 

 

754

 

 

2,813

 

Accrued expenses and other current liabilities

9,532

 

 

(15,461

)

 

13,889

 

 

(15,230

)

Deferred revenue

285,459

 

 

203,390

 

 

147,479

 

 

97,753

 

Operating lease liabilities

(633

)

 

(2,337

)

 

(9,129

)

 

(7,480

)

Other long-term liabilities

2,042

 

 

3,124

 

 

2,426

 

 

854

 

Net cash provided by operating activities

68,351

 

 

39,109

 

 

551,246

 

 

437,375

 

Cash flows from investing activities

 

 

 

 

 

 

 

Purchases of short-term investments

(104,827

)

 

(123,734

)

 

(979,292

)

 

(752,518

)

Maturities and sales of short-term investments

126,147

 

 

116,693

 

 

654,341

 

 

688,091

 

Acquisitions, net of cash and restricted cash acquired

(448,162

)

(448,162

)

Long-term assets

(227

)

 

(93

)

 

(8,683

)

 

(4,321

)

Net cash provided by (used in) investing activities

21,093

 

 

(455,296

)

 

(333,634

)

 

(516,910

)

Cash flows from financing activities

 

 

 

 

 

 

 

Reduction of lease liabilities – finance leases

(619

)

 

(255

)

 

(1,039

)

 

(984

)

Proceeds from exercise of common stock options

9,612

 

 

2,376

 

 

34,857

 

 

10,994

 

Net cash provided by financing activities

8,993

 

 

2,121

 

 

33,818

 

 

10,010

 

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

(2,199

)

 

75

 

 

484

 

 

(2,856

)

Net change in cash, cash equivalents, and restricted cash

96,238

 

 

(413,991

)

 

251,914

 

 

(72,381

)

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

635,473

 

 

893,788

 

 

479,797

 

 

552,178

 

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

$

731,711

 

 

$

479,797

 

 

$

731,711

 

 

$

479,797

 

 

 

 

 

 

 

 

 

Supplemental disclosures of other cash flow information:

 

 

 

 

 

 

 

Excess tax benefits from employee stock plans

$

21,594

 

 

$

10,902

 

 

$

80,661

 

 

$

50,411

 

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.

Contacts

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]

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