Veeva Announces Fourth Quarter and Fiscal Year 2018 Results

“The fourth quarter was a strong finish to another great year for Veeva,” said CEO Peter Gassner. “We have a proven track record of increasing value for customers through innovation and are in the early stages of more major growth opportunities than at any point in our history. This combined with our disciplined execution sets us up for continued strong growth well into the future.”

Fiscal 2018 Fourth Quarter Results:

• Revenues: Total revenues for the fourth quarter were $184.9 million, up from $150.2 million one year ago, an increase of 23% year-over-year. Subscription services revenues for the fourth quarter were $150.9 million, up from $119.5 million one year ago, an increase of 26% year-over-year.
• Operating Income and Non-GAAP Operating Income⁽¹⁾: Fourth quarter operating income was $34.9 million, compared to $32.5 million one year ago, an increase of 7% year-over-year. Non-GAAP operating income for the fourth quarter was $51.6 million, compared to $46.2 million one year ago, an increase of 12% year-over-year.
• Net Income and Non-GAAP Net Income⁽¹⁾: Fourth quarter net income was $33.7 million, compared to $21.7 million one year ago, an increase of 55% year-over-year. Non-GAAP net income for the fourth quarter was $35.5 million, compared to $32.7 million one year ago, an increase of 8% 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 $0.22, compared to $0.15 one year ago, while non-GAAP fully diluted net income per share was $0.23, compared to $0.22 one year ago.

“The combination of strong sales performance in the fourth quarter and momentum in Vault contributed to a healthy raise in our revenue and profit guidance for fiscal 2019,” said CFO Tim Cabral. “As we look ahead, the increasingly strategic nature of our customer relationships and growing product portfolio gives us further confidence in our longer-term top and bottom line targets.”

Recent Highlights:

• Continued Customer Success and New Customer Additions⁽²⁾ — Veeva’s focus on customer success enabled another year of top tier subscription revenue retention of 121% for fiscal 2018. The company also ended the year with 625 total customers, up from 517 last year. This included 311 Veeva Commercial Cloud customers, up from 270 last year, and 449 Veeva Vault customers, up from 334 last year.
• Customers Adopt Veeva Vault at a Record Pace — In the quarter, for the first time, Veeva had double-digit new customer additions in each area of Vault — clinical, quality, regulatory and commercial. This included two top 20 pharmaceutical companies that expanded from Veeva Vault eTMF into new areas of Veeva Development Cloud. One was the first top 20 to select Veeva Vault QMS. The other committed to standardize on the full Veeva Vault RIM suite and Veeva Vault QualityDocs.
• Two Top 10 Pharma Customers Expanding Veeva CRM Globally — In the fourth quarter, two top 10 pharmaceutical companies committed to expanding usage of Veeva CRM in emerging markets, moving Veeva toward becoming their global standard. The company is also seeing growing regional adoption in other areas of Veeva Commercial Cloud, including strategic wins for Veeva CRM Events Management and Veeva Align in the quarter.

Financial Outlook:

As of February 27, 2018, Veeva is providing guidance for the quarter ending April 30, 2018 and for the year ending January 31, 2019. Guidance is based on the new revenue recognition standard ASC 606.

Veeva is providing guidance for its fiscal first quarter ending April 30, 2018 as follows:

• Total revenues between $188 and $189 million.
• Non-GAAP operating income between $58 and $59 million⁽³⁾.
• Non-GAAP fully diluted net income per share between $0.30 and $0.31⁽³⁾.

Veeva is providing guidance for its fiscal year ending January 31, 2019 as follows:

• Total revenues between $815 and $820 million.
• Non-GAAP operating income between $250 and $255 million⁽³⁾.
• Non-GAAP fully diluted net income per share between $1.30 and $1.33⁽³⁾.

Conference Call Information:

Investor Presentation Details:

An investor presentation providing information and analysis on the impact of Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers” (Topic 606) on the Company’s results can be found at ir.veeva.com.

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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⁾ 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, Veeva OpenData, Veeva Oncology Link, Veeva Network Customer Master and Veeva Network Product Master. Veeva Vault customers are those customers that have at least one Vault product.

⁽³⁾ 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, 2018 or fiscal year ending January 31, 2019 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, capitalization of internal-use software development expenses and the subsequent amortization of the capitalized expenses. The effect of these excluded items may be significant.