Total Revenues of $55.0M, up 54% Year-over-year; Subscription Services Revenues of $38.9M, up 95% Year-over-year
PLEASANTON, CA — December 5, 2013 – Veeva Systems Inc. (NYSE: VEEV), a leading provider of industry cloud solutions for the life sciences industry, today announced results for its fiscal third quarter ended October 31, 2013.
Fiscal 2014 Third Quarter Results:
- Revenues: Total revenues for the third quarter were $55.0 million, up from $35.8 million one year ago, an increase of 54% year-over-year. Subscription services revenues were $38.9 million, up from $20.0 million one year ago, an increase of 95% year-over-year.
- Net income and non-GAAP net income1: Third quarter net income was $6.5 million, compared to $5.7 million one year ago, an increase of 13% year-over-year. Non-GAAP net income for the third quarter was $8.3 million, compared to $6.0 million one year ago, an increase of 40% year-over-year.
- Net income per share and non-GAAP net income per share1: For the third quarter, fully diluted net income per share was $0.05, while non-GAAP fully diluted net income per share was $0.06.
“There are tremendous opportunities to move life sciences companies from legacy applications to the cloud,” said chief executive officer Peter Gassner. “Our results demonstrate strong demand for industry cloud solutions and are a result of our focus on customer success. The combination of these factors drove top-line revenue growth and strong profitability.”
“We were pleased with the continued momentum in subscription services revenues, which increased 95% year-over-year,” said CFO Tim Cabral. “While making significant investments this quarter, we demonstrated the leverage in our business. Gross margins increased over 5 percentage points compared to last year, operating margin was 18.2% and non-GAAP operating margin was 22.7%.”
Recent Highlights:
- Veeva Network Released – Veeva Network, the industry’s first complete, cloud-based customer master solution, became generally available in October. The company’s newest product line, Veeva Network combines healthcare provider and organization data with software and data stewardship services in one solution that is seamlessly integrated with Veeva CRM.
- CRM Market Leadership – In its 2013 Life Sciences CRM Software Vendor Assessment, IDC Health Insights named Veeva a CRM leader.
- 50th Veeva Vault Customer – Veeva surpassed 50 customers for its regulated content management product line.
- Initial Public Offering – On October 16, 2013, Veeva became a public company, adding $216 million to its cash balance for the quarter, and listed its Class A common shares on the New York Stock Exchange.
Financial Outlook:
Veeva is providing guidance for the fourth quarter of fiscal 2014 as follows:
- Total revenues between $57 and $58 million, an increase of 43% to 46% on a year-over-year basis. This implies full fiscal year revenues of approximately $204 to $205 million representing annual growth of 58% to 59%.
- Non-GAAP fully diluted net income per share between $0.05 and $0.06.
Conference Call Information
What: Veeva Systems’ Fiscal 2014 Third Quarter Results Conference Call
When: Thursday, December 5, 2013
Time: 1:30 p.m. PT (4:30 p.m. ET)
Live Call: 1-866-270-1533, domestic
1-412-317-0797, international
Webcast: ir.veeva.com
1Non-GAAP net income and non-GAAP fully diluted net income per share exclude stock-based compensation expense, amortization of purchased intangibles, and the tax effect of these excluded expenses. See the sections titled, “Non-GAAP Financial Measures” and the tables entitled “Reconciliation of GAAP to Non-GAAP Financial Measures” below for details.
About Veeva Systems
Veeva is a leader in cloud-based software for the global life sciences industry. Committed to innovation, product excellence and customer success, Veeva has over 170 customers, ranging from the world’s largest pharmaceutical companies to emerging biotechs. Founded in 2007, Veeva is headquartered in the San Francisco Bay Area, with offices in Philadelphia, Barcelona, Budapest, London, Paris, Beijing, Shanghai, Osaka, Tokyo, Sydney, and Singapore. For more information, visit www.veeva.com.
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Forward-looking Statements
This release contains forward-looking statements, including statements regarding Veeva’s future financial performance, market growth, the demand for and benefits from the use of Veeva’s solutions, 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) adverse changes in general economic or market conditions, particularly in the life sciences industry; (ii) delays or reductions in information technology spending, particularly in the life sciences industry; (iii) dependence on revenues from our Veeva CRM solution, and the rate of adoption of our new products; (iv) competitive factors, including but not limited to pricing pressures, industry consolidation, entry of new competitors and new applications and marketing initiatives by our competitors; (v) our ability to manage our growth effectively; (vi) our limited operating history, which makes it difficult to predict future results; (vii) the development of the market for enterprise cloud services, particularly in the life sciences industry; (viii) acceptance of our applications and services by customers, including renewals of existing subscriptions and purchases of subscriptions for additional users and solutions; (ix) breaches in our security measures or unauthorized access to our customers’ data; (x) our expectation that the future growth rate of our revenues will decline, and that as our costs increase, we may not be able to generate sufficient revenues to sustain the level of profitability we have achieved in the past or achieve profitability in the future; (xi) loss of one or more key customers; (xii) dependence on our agreement with salesforce.com to provide our Veeva CRM solution to our customers; and (xiii) changes in sales that may not be immediately reflected in our results due to our subscription model.
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 registration statement on Form S-1 filed with the SEC on October 15, 2013, which is available on the company’s website at www.veeva.com under the Investors section and on the SEC’s website at www.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.