Veeva Systems Inc. (NYSE:VEEV) Q3 2018 Earnings Conference Call Transcript

Nov 28, 2018 • 04:30 pm ET

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Veeva Systems Inc. (NYSE:VEEV) Q3 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good afternoon. My name is Christine and I'll be your conference operator today. At this time, I would like to welcome everyone to the Veeva Fiscal 2019 Third Quarter Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session.

(Operator Instructions)

Thank you, Rick Lund, Head of IRof Veeva, you may begin your conference.

Executive
Rick Lund

Good afternoon and welcome to Veeva's fiscal 2019 third quarter earnings call for the quarter ended October 31, 2018. With me on today's call are Peter Gassnerl, our CEO, Matt Wallach, our President and Tim Cabral, our CFO.

(Forward-Looking Cautionary Statements)

We will provide guidance on today's call, but will not provide any further guidance or updates on our performance during the quarter, unless we do so in a public forum. On the call, we will also discuss certain non-GAAP metrics that we believe aid in the understanding of our financial results. A reconciliation to comparable GAAP metrics can be found in today's earnings release, which is available on our website and as an exhibit to the Form 8-K filed with the SEC just before this call.

With that, thank you for joining us and I will turn it over to Peter.

Executive
Peter Gassnerl

Thank you, Rick and thanks to everyone for joining us today. I'm pleased to report a great quarter with revenue and profit exceeding our guidance. Total revenue was $225 million, up 27% year-over-year, subscription revenue grew 25% year-over-year and our non-GAAP operating margin was over 37%. We executed well in both Commercial Cloud and Vault. In Commercial Cloud, we had a number of wins and expansions in all market segments and regions.

Starting with core CRM, our business continues to have steady growth and increasing market share. For example, a top 10 pharma, who is a long-time Veeva customer added more than 5,000 users in the quarter across Asia, Latin America and Europe. This expansion is part of their move towards Veeva as an enterprise standard across the globe.

We also won a global commitment from a large European consumer health company. Over the next two years, they plan to roll out multichannel CRM to 40 markets.

Our success in SMB continues as well. Since the beginning of the year, we've added 31 new CRM logos. These companies are either replacing legacy CRM solutions or starting new with Veeva as they launch their first drug. We're having good success with CRM add-on products as well. For example, Veeva CRM Events Management now has more than 55 customers including 13 of the top 20 pharmas. Many of these are starting with events in one or two regions with the possibility to expand over time.

We also had several wins for OpenData, including another top 20 pharma that recently selected OpenData in the US to replace their current legacy provider. Nitro, our commercial data warehouse built for life sciences, is also progressing well. We now have four customers in the early adopter