Veeva Announces Fiscal 2018 Third Quarter Results

December 05, 2017

Total Revenues of $176.1M, up 23% Year-Over-Year

Subscription Services Revenues of $141.9M, up 25% 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 fiscal third quarter ended October 31, 2017.

“Veeva delivered another strong quarter with results above our guidance,” said CEO Peter Gassner. “We executed well across all product areas and geographies and went the extra mile for customer success. We also announced a new product line, Veeva Vault Safety, to help our customers become more efficient, effective and compliant when managing drug safety."

Fiscal 2018 Third Quarter Results:

  • Revenues: Total revenues for the third quarter were $176.1 million, up from $142.8 million one year ago, an increase of 23% year-over-year. Subscription services revenues for the third quarter were $141.9 million, up from $113.6 million one year ago, an increase of 25% year-over-year.
  • Operating Income and Non-GAAP Operating Income(1): Third quarter operating income was $41.7 million, compared to $33.8 million one year ago, an increase of 23% year-over-year. Non-GAAP operating income for the third quarter was $57.6 million, compared to $47.5 million one year ago, an increase of 21% year-over-year.
  • Net Income and Non-GAAP Net Income(1): Third quarter net income was $34.4 million, compared to $21.6 million one year ago, an increase of 59% year-over-year. Non-GAAP net income for the third quarter was $38.3 million, compared to $31.7 million one year ago, an increase of 21% 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 $0.22, compared to $0.15 one year ago, while non-GAAP fully diluted net income per share was $0.25, compared to $0.22 one year ago.

“The third quarter was marked by particular strength in Vault, which accounted for 40% of total revenue,” said CFO Tim Cabral. “Vault is a powerful, unique platform that provides substantial opportunities today and will enable us to address large new markets into the future.”

Recent Highlights:

  • Record Vault Customer Growth Veeva added a record number of Vault customers in the third quarter and the number of customers using multiple Vault applications increased roughly 50% year-over-year fueled by growth across all Vault application areas.
  • New Digital Offerings Released at Veeva European Commercial Summit — The company released its latest Veeva Commercial Cloud offering, Veeva CRM Engage Webinar, at Veeva Commercial Summit Europe. The new product is the first purpose-built application for life sciences to manage online events without the typical compliance risk. Veeva also released Veeva Vault PromoMats Brand Portal, a new digital asset management capability that makes it easy for brand managers to create portals and organize and showcase content within Veeva Vault PromoMats.
  • Veeva Enters Major New Market — Veeva announced its plan to enter the drug safety and pharmacovigilance market, another large, underserved area in need of innovation. The addition of Vault Safety along with Vault ClinicalVault Quality, and Vault RIM will make Vault Development Cloud the most comprehensive suite of unified cloud applications to help life sciences companies streamline drug development. Vault Safety is planned for release in 2019.

Financial Outlook:

Veeva is providing guidance for its fiscal fourth quarter ending January 31, 2018 as follows:

  • Total revenues between $179 and $180 million.
  • Non-GAAP operating income between $50 and $51 million(2).
  • Non-GAAP fully diluted net income per share between $0.21 and $0.22(2).

This fourth quarter guidance implies the following for Veeva’s fiscal year ending January 31, 2018:

  • Total revenues between $679.7 and $680.7 million.
  • Non-GAAP operating income between $210.5 and $211.5 million(2).
  • Non-GAAP fully diluted net income per share of $0.91(2).

Conference Call Information:

What:     Veeva’s Fiscal 2018 Third Quarter Results Conference Call
When: Tuesday, December 5, 2017
Time: 1:30 p.m. PT (4:30 p.m. ET)
Live Call: 1-833-235-5654, domestic
1-647-689-4160, international

 

Conference ID 426 7227

Webcast:

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 fourth fiscal quarter ending January 31, 2018 or fiscal year ending January 31, 2018 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.

About Veeva Systems

Veeva Systems Inc. is a leader in cloud-based software for the global life sciences industry. Committed to innovation, product excellence, and customer success, Veeva has more than 600 customers, ranging from the world's largest pharmaceutical companies to emerging biotechs. Veeva is headquartered in the San Francisco Bay Area, with offices in Europe, Asia, and Latin America. For more information, visit veeva.com.

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, 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) historical fluctuation of our quarterly results and our limited operating history, which make it difficult to predict future results; (ii) 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; (iii) breaches in our security measures or unauthorized access to our customers’ data; (iv) system unavailability, performance problems, or loss of data due to disruptions or other problems with our data center operations or computing infrastructure; (v) dependence on revenues from our Veeva CRM solution, and the rate of adoption of our new products; (vi) acceptance of our applications and services by customers, including renewals of existing subscriptions and purchases of subscriptions for additional users and solutions; (vii) our ability to retain Zinc Ahead customers and achieve the expected results from our acquisition of Zinc Ahead; (viii) loss of one or more key customers; (ix) adverse changes in general economic or market conditions, particularly in the life sciences industry; (x) delays or reductions in information technology spending, particularly in the life sciences industry, including as a result of mergers in the life sciences industry; (xi) the development of the market for enterprise cloud services, particularly in the life sciences industry; (xii) competitive factors, including but not limited to pricing pressures, industry consolidation, difficulty securing rights to access, host or integrate with complementary third party products or data used by our customers, entry of new competitors and new applications and marketing initiatives by our competitors; (xiii) our ability to manage our growth effectively; (xiv) changes in sales that may not be immediately reflected in our 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 July 31, 2017. 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)
October 31, January 31,
2017 2017
Assets
Current assets:
Cash and cash equivalents $ 310,796 $ 217,606
Short-term investments 447,280 301,266
Accounts receivable, net 76,294 182,816
Prepaid expenses and other current assets   11,699   10,177
Total current assets 846,069 711,865
Property and equipment, net 52,659 49,907
Goodwill 95,804 95,804
Intangible assets, net 33,392 39,283
Deferred income taxes, noncurrent 12,906 16,460
Other long-term assets   5,386   4,057

Total assets

$ 1,046,216 $ 917,376
 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable $ 7,444 $ 5,677
Accrued compensation and benefits 12,695 12,007
Accrued expenses and other current liabilities 12,427 12,310
Income tax payable 8,426 3,228
Deferred revenue   173,358   213,562
Total current liabilities 214,350 246,784
Deferred income taxes, noncurrent 7,172 12,974
Other long-term liabilities   6,226   4,964
Total liabilities   227,748   264,722
Stockholders’ equity:
Class A common stock 1 1
Class B common stock
Additional paid-in capital 496,301 439,658
Accumulated other comprehensive income 1,022 111
Retained earnings   321,144   212,884
Total stockholders’ equity   818,468   652,654
Total liabilities and stockholders’ equity $ 1,046,216 $ 917,376
 

 
VEEVA SYSTEMS INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands, except per share data)
(Unaudited)
    Three months ended     Nine months ended
October 31, October 31,
2017     2016 2017     2016
Revenues:
Subscription services $ 141,943 $ 113,575 $ 403,560 $ 314,818
Professional services and other   34,206     29,204     97,092     79,072
Total revenues   176,149     142,779     500,652     393,890
Cost of revenues(3):
Cost of subscription services 27,758 24,233 80,696 69,086
Cost of professional services and other   25,478     19,692     71,826     58,125
Total cost of revenues   53,236     43,925     152,522     127,211
Gross profit   122,913     98,854     348,130     266,679
Operating expenses(3):
Research and development 34,042 25,012 95,044 70,648
Sales and marketing 31,856 28,391 93,683 84,022
General and administrative   15,347     11,641     43,498     36,571
Total operating expenses   81,245     65,044     232,225     191,241
Operating income 41,668 33,810 115,905 75,438
Other income, net   1,360     525     4,809     1,910
Income before income taxes 43,028 34,335 120,714 77,348
Provision for income taxes   8,635     12,705     12,454     30,251
Net income $ 34,393   $ 21,630   $ 108,260   $ 47,097
 
Net income attributable to common stockholders, basic and diluted: $ 34,393   $ 21,630   $ 108,260   $ 47,095
 
Net income per share attributable to common stockholders:
Basic $ 0.24   $ 0.16   $ 0.77   $ 0.35
Diluted $ 0.22   $ 0.15   $ 0.71   $ 0.32
 
Weighted-average shares used to compute net income per share

attributable to common stockholders:

Basic   140,857     135,624     139,858     135,144
Diluted   154,256     147,436     153,409     147,073
Other comprehensive income (loss):
Net change in unrealized gains (losses) on available-for-sale investments $ (243 ) $ (229 ) $ (315 ) $ 43
Net change in cumulative foreign currency translation gain (loss)   (6 )   (321 )   1,226     104
Comprehensive income $ 34,144   $ 21,080   $ 109,171   $ 47,244
 

_______________

(3) Includes stock-based compensation as follows:
 
Cost of revenues:
Cost of subscription services $ 377 $ 294 $ 1,095 $ 791
Cost of professional services and other 2,288 1,603 6,110 4,288
Research and development 4,765 3,237 12,916 8,443
Sales and marketing 4,130 3,592 12,150 9,389
General and administrative   2,458     2,229     6,915     6,201
Total stock-based compensation $ 14,018   $ 10,955   $ 39,186   $ 29,112
 

             
 
VEEVA SYSTEMS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three months ended Nine months ended
October 31, October 31,
2017 2016 2017 2016
Cash flows from operating activities
Net income $ 34,393 $ 21,630 $ 108,260 $ 47,097
Adjustments to reconcile net income to net cash provided by operating

activities:

Depreciation and amortization 3,601 3,469 10,621 10,344
Amortization of premiums on short-term investments 365 481 1,207 1,370
Stock-based compensation 14,018 10,955 39,186 29,112
Deferred income taxes (337 ) (157 ) (2,242 ) (959 )
Loss on foreign currency from market-to-market derivative (134 ) 119
Bad debt expense (63 ) 235 (269 ) 120
Changes in operating assets and liabilities:
Accounts receivable 20,922 23,080 106,791 79,030
Income taxes 6,125 1,330 4,063 2,974
Other current and long-term assets (391 ) 5,300 (1,550 ) (2,776 )
Accounts payable 1,473 (1,457 ) 1,717 414
Accrued expenses and other current liabilities 1,405 (1,663 ) 1,949 (2,768 )
Deferred revenue (49,328 ) (38,667 ) (40,301 ) (19,368 )
Other long-term liabilities   184     457     2,450     1,509  
Net cash provided by operating activities(4)   32,233     24,993     232,001     146,099  
Cash flows from investing activities
Purchases of short-term investments (207,268 ) (89,826 ) (350,719 ) (273,785 )
Maturities and sales of short-term investments 74,806 53,575 203,183 181,751
Purchases of property and equipment (1,635 ) (1,456 ) (8,130 ) (4,372 )
Capitalized internal-use software development costs (301 ) (32 ) (1,334 ) (241 )
Changes in restricted cash and deposits       (1 )   (202 )   102  
Net cash used in investing activities   (134,398 )   (37,740 )   (157,202 )   (96,545 )
Cash flows from financing activities
Proceeds from exercise of common stock options 3,747 3,473 17,163 8,001
Restricted stock units acquired to settle employee tax withholding liability (1 ) (13 )
Excess tax benefits from employee stock plans       5,309         16,249  
Net cash provided by financing activities(4)   3,747     8,781     17,163     24,237  
Effect of exchange rate changes on cash and cash equivalents (12 ) (321 ) 1,228 108
Net change in cash and cash equivalents (98,430 ) (4,287 ) 93,190 73,899
Cash and cash equivalents at beginning of period   409,226     210,365     217,606     132,179  
Cash and cash equivalents at end of period $ 310,796   $ 206,078   $ 310,796   $ 206,078  
 

_______________

(4) During the nine months ended October 31, 2017, the Company adopted Accounting Standards Update (“ASU”) 2016-09, “Compensation-Stock Compensation: Improvements to Employee Share-Based Payment.” This adoption resulted in a $8.6 million and $37.3 million increase in net cash provided by operating activities and a corresponding decrease in net cash provided by financing activities for the three and nine months ended October 31, 2017, respectively.

 

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 from its non-GAAP financial measures 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 from its non-GAAP measures 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.
  • Capitalization of internal-use software development expenses and the subsequent amortization of the capitalized expenses. Veeva capitalizes certain costs incurred for the development of computer software for internal use and then amortizes those costs over the estimated useful life. Capitalization and amortization of software development costs can vary significantly depending on the timing of products reaching technological feasibility and being made generally available. Veeva’s internal management reporting processes exclude both the capitalization of software (which would otherwise result in a reduction in net research and development operating expenses) and the amortization of capitalized software (which would otherwise result in an increase in cost of subscription revenues) when preparing budgets, plans and reviewing internal performance. Moreover, because of the variety of approaches taken and the subjective assumptions made by other companies in this area, Veeva believes that excluding the effects of capitalized software costs allows investors to make more meaningful comparisons between our operating results and those of other companies.
  • Deferred compensation associated with the Zinc Ahead business acquisition. The Zinc Ahead share purchase agreement, as revised, called for share purchase consideration to be deferred and paid at a rate of one-third of the deferred consideration amount per year to certain former Zinc Ahead employee shareholders and option holders who remain employed with Veeva on each deferred consideration payment date. In accordance with GAAP, these payments are being accounted for as deferred compensation and the expense is recognized over the requisite service period. Veeva’s management views this deferred compensation expense as an unusual acquisition cost associated with the Zinc Ahead acquisition and finds it useful to exclude it in order to assess the appropriate level of various operating expenses to assist in budgeting, planning and forecasting future periods. Veeva believes excluding this deferred compensation expense from its non-GAAP measures may allow investors to make more meaningful comparisons between its recurring operating results and those of other companies.
  • Income tax effects on the difference between GAAP and non-GAAP costs and expenses. The income tax effects that are excluded from the non-GAAP measures relate to the imputed tax impact on the difference between GAAP and non-GAAP costs and expenses due to stock-based compensation, purchased intangibles, capitalized internal-use software, and deferred compensation associated with the Zinc Ahead business acquisition 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:

               
VEEVA SYSTEMS INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Dollars in thousands)
(Unaudited)
Three months ended Nine months ended
October 31, October 31,
2017 2016 2017 2016
Cost of subscription services revenues on a GAAP basis $ 27,758 $ 24,233 $ 80,696 $ 69,086
Stock-based compensation expense (377 ) (294 ) (1,095 ) (791 )
Amortization of purchased intangibles (923 ) (1,079 ) (2,987 ) (3,260 )
Amortization of internal-use software   (173 )   (169 )   (453 )   (531 )
Cost of subscription services revenues on a non-GAAP basis $ 26,285   $ 22,691   $ 76,161   $ 64,504  
 
Gross margin on subscription services revenues on a GAAP basis 80.4 % 78.7 % 80.0 % 78.1 %
Stock-based compensation expense 0.3 0.3 0.3 0.2
Amortization of purchased intangibles 0.7 1.0 0.7 1.0
Amortization of internal-use software   0.1         0.1     0.2  
Gross margin on subscription services revenues on a non-GAAP basis   81.5 %   80.0 %   81.1 %   79.5 %
 
Cost of professional services and other revenues on a GAAP basis $ 25,478 $ 19,692 $ 71,826 $ 58,125
Stock-based compensation expense (2,288 ) (1,603 ) (6,110 ) (4,288 )
Deferred compensation associated with Zinc Ahead acquisition   (5 )   (6 )   (16 )   (23 )
Cost of professional services and other revenues on a non-GAAP basis $ 23,185   $ 18,083   $ 65,700   $ 53,814  
 
Gross margin on professional services and other revenues on a GAAP basis 25.5 % 32.6 % 26.0 % 26.5 %
Stock-based compensation expense   6.7     5.5     6.3     5.4  
Gross margin on professional services and other revenues on a non-GAAP basis   32.2 %   38.1 %   32.3 %   31.9 %
 
Gross profit on a GAAP basis $ 122,913 $ 98,854 $ 348,130 $ 266,679
Stock-based compensation expense 2,665 1,897 7,205 5,079
Amortization of purchased intangibles 923 1,079 2,987 3,260
Amortization of internal-use software 173 169 453 531
Deferred compensation associated with Zinc Ahead acquisition   5     6     16     23  
Gross profit on a non-GAAP basis $ 126,679   $ 102,005   $ 358,791   $ 275,572  
 
Gross margin on total revenues on a GAAP basis 69.8 % 69.2 % 69.5 % 67.7 %
Stock-based compensation expense 1.5 1.3 1.4 1.3
Amortization of purchased intangibles 0.5 0.8 0.7 0.9
Amortization of internal-use software   0.1     0.1     0.1     0.1  
Gross margin on total revenues on a non-GAAP basis   71.9 %   71.4 %   71.7 %   70.0 %
 
Research and development expense on a GAAP basis $ 34,042 $ 25,012 $ 95,044 $ 70,648
Stock-based compensation expense (4,765 ) (3,237 ) (12,916 ) (8,443 )
Capitalization of internal-use software 300 32 1,333 241
Deferred compensation associated with Zinc Ahead acquisition   (109 )   (108 )   (327 )   (325 )
Research and development expense on a non-GAAP basis $ 29,468   $ 21,699   $ 83,134   $ 62,121  
 
Sales and marketing expense on a GAAP basis $ 31,856 $ 28,391 $ 93,683 $ 84,022
Stock-based compensation expense (4,130 ) (3,592 ) (12,150 ) (9,389 )
Amortization of purchased intangibles (978 ) (975 ) (2,902 ) (2,904 )
Deferred compensation associated with Zinc Ahead acquisition   (13 )   (18 )   (43 )   (54 )
Sales and marketing expense on a non-GAAP basis $ 26,735   $ 23,806   $ 78,588   $ 71,675  
 
General and administrative expense on a GAAP basis $ 15,347 $ 11,641 $ 43,498 $ 36,571
Stock-based compensation expense (2,458 ) (2,229 ) (6,915 ) (6,201 )
Deferred compensation associated with Zinc Ahead acquisition   (4 )   (398 )   (12 )   (2,271 )
General and administrative expense on a non-GAAP basis $ 12,885   $ 9,014   $ 36,571   $ 28,099  
 

               
VEEVA SYSTEMS INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (continued)
(Dollars in thousands, except per share data)
(Unaudited)
Three months ended Nine months ended
October 31, October 31,
2017 2016 2017 2016
Operating expense on a GAAP basis $ 81,245 $ 65,044 $ 232,225 $ 191,241
Stock-based compensation expense (11,353 ) (9,058 ) (31,981 ) (24,033 )
Amortization of purchased intangibles (978 ) (975 ) (2,902 ) (2,904 )
Capitalization of internal-use software 300 32 1,333 241
Deferred compensation associated with Zinc Ahead acquisition   (126 )   (524 )   (382 )   (2,650 )
Operating expense on a non-GAAP basis $ 69,088   $ 54,519   $ 198,293   $ 161,895  
 
Operating income on a GAAP basis $ 41,668 $ 33,810 $ 115,905 $ 75,438
Stock-based compensation expense 14,018 10,955 39,186 29,112
Amortization of purchased intangibles 1,901 2,054 5,889 6,164
Capitalization of internal-use software (300 ) (32 ) (1,333 ) (241 )
Amortization of internal-use software 173 169 453 531
Deferred compensation associated with Zinc Ahead acquisition   131     530     398     2,673  
Operating income on a non-GAAP basis $ 57,591   $ 47,486   $ 160,498   $ 113,677  
 
Operating margin on a GAAP basis 23.7 % 23.7 % 23.2 % 19.2 %
Stock-based compensation expense 8.0 7.7 7.8 7.4
Amortization of purchased intangibles 1.1 1.4 1.2 1.5
Capitalization of internal-use software (0.3 ) 0.1 (0.3 )
Amortization of internal-use software 0.1 0.1 0.1 0.1
Deferred compensation associated with Zinc Ahead acquisition   0.1     0.3     0.1     0.7  
Operating margin on a non-GAAP basis   32.7 %   33.3 %   32.1 %   28.9 %
 
Net income on a GAAP basis $ 34,393 $ 21,630 $ 108,260 $ 47,097
Stock-based compensation expense 14,018 10,955 39,186 29,112
Amortization of purchased intangibles 1,901 2,054 5,889 6,164
Capitalization of internal-use software (300 ) (32 ) (1,333 ) (241 )
Amortization of internal-use software 173 169 453 531
Deferred compensation associated with Zinc Ahead acquisition 131 530 398 2,673
Income tax effect on non-GAAP adjustments   (11,998 )   (3,561 )   (45,404 )   (10,090 )
Net income on a non-GAAP basis $ 38,318   $ 31,745   $ 107,449   $ 75,246  
 
Net income allocated to participating securities on a GAAP basis $ $ $ $ (2 )
Net income allocated to participating securities from non-GAAP adjustments                
Net income allocated to participating securities on a non-GAAP basis               (2 )
Net income attributable to common stockholders on a non-GAAP basis $ 38,318   $ 31,745   $ 107,449   $ 75,244  
 
Diluted net income per share on a GAAP basis $ 0.22 $ 0.15 $ 0.71 $ 0.32
Stock-based compensation expense 0.09 0.08 0.26 0.20
Amortization of purchased intangibles 0.01 0.01 0.04 0.04
Capitalization of internal-use software (0.01 )
Amortization of internal-use software
Deferred compensation associated with Zinc Ahead acquisition 0.03
Income tax effect on non-GAAP adjustments   (0.07 )   (0.02 )   (0.30 )   (0.08 )
Diluted net income per share on a non-GAAP basis $ 0.25   $ 0.22   $ 0.70   $ 0.51  

Source: Veeva Systems Inc.

Veeva Systems Inc.

Investor Relations Contact:

Rick Lund, 925-271-9816

ir@veeva.com

or

Veeva Systems Inc.

Media Contact:

Roger Villareal, 925-264-8885

pr@veeva.com

Investor Contact

Rick Lund
Investor Relations Director
Email: ir@veeva.com
Phone: 1 (925) 271-9816

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