Veeva Systems Inc. Class A

Ladies and gentlemen, thank you for standing by and welcome to Viva's fiscal 2020 third quarter results conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference call over to Rick Lund, Head of Investor Relations. Thank you. Please go ahead.

Good afternoon and welcome to Viva's Fiscal 2020 Third Quarter Earnings Call for the quarter ended October 31st, 2019. With me on today's call are Peter Gassner, our Chief Executive Officer, Paul Shawah, SVP of Commercial Cloud, and Tim Cabral, our Chief Financial Officer. During the course of this conference call, we will make forward-looking statements regarding trends, our strategies, and the anticipated performance of the business. These forward-looking statements will be based on management's current views and expectations and are subject to various risks and uncertainties. Actual results may differ materially. Please refer to the risks listed in our earnings release and the risk factors included in our most recent filing on Form 10-Q, which is available on the company's website at veva.com under the Investors section and on the SEC's website at sec.gov. Forward-looking statements made during the call are being made as of today, November 26, 2019. If this call is replayed or viewed after today, the information presented during the call may not contain current or accurate information. VIVA disclaims any obligation to update or revise any forward-looking 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 gap 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. As you may have also seen in our earnings press release, we intend to begin using our website as a channel of public disclosure consistent with Regulation FD. Going forward, please monitor our investor relations website in addition to following our press releases, SEC filings, and public conference calls and webcasts. Finally, I'd like to remind everyone that we recently closed two acquisitions. Both of those transactions closed at the beginning of the fourth quarter and therefore did not impact our third quarter results. However, the forward-looking guidance that we provide today will include financial results for these acquired companies. Details for how we expect those acquisitions to impact the fourth quarter of this year can be found in today's earnings press release. With that, thank you for joining us and I will turn it over to Peter.

Good afternoon and thanks to everyone for joining us today. Q3 was another strong quarter. Results came in ahead of our guidance thanks to great execution by our teams across all areas of the business. Total revenue was $281 million, up 25% year-over-year. Subscription revenue grew 27% and our non-GAAP operating margin was 40%. I'll share a few highlights, starting with Commercial Cloud. It was a very exciting quarter for our commercial business. We entered new areas with the acquisitions of Crossix and Physicians World. We continued our momentum with new customers and delivered success with existing customers. We furthered our leadership in core CRM, winning a number of new enterprise and SMB customers. For example, a top 50 pharma selected us as their standard in Europe to replace IQVIA based upon their experience with IQVIA and their success with VivaCRM in the US market. Not only are we continuing to add more CRM customers, we consistently deliver on our commitment to their success. 14 small and mid-sized CRM customers went live in Q3 across US and Europe. In SMB, Viva CRM implementations typically take just four to six weeks. These projects are fast and reliable because of the quality of our software and our services. It was another great quarter for the rest of commercial cloud as well. We saw a particular strength in events management and open data. Customers are continuing to make the switch to open data, and I'm also pleased to see large customers expanding their use of open data across markets. For example, a top 50 pharma selected Viva Open Data for their U.S. operations, and two other top 50 pharmas are each in the process of rolling out open data to 30 countries. We focus on customer success, openness, and operating as a true partner to the industry. In contrast, IQVIA uses anti-competitive tactics and its monopoly power in data to restrict customer choice. This harms the industry and ultimately harms patients. In the past quarter, we have seen IQVIA anti-competitive tactics become more extreme, especially as it relates to their one key data offering. I'm pleased to report that customers are starting to stand up to IQVIA on these issues and many are considering moving to open data. We are also extending commercial cloud with two significant acquisitions. The CrossLix acquisition closed at the beginning of this month and things are off to a strong start. The team is a great cultural fit with exceptional leadership. CrossLix brings depth in patient data and data science to Veeva. The operational integration is going well and we're starting to refine and execute our plans for new products and tight integration between Crossix, VivaCRM and Open Data. Our customers are excited about their potential. I look forward to the impact that this can have on the industry over the long term. This month, we also acquired Physicians World, a leading provider of speaker bureau services for the U.S. market, which complements our events management software offering. Events is an area where speaker services and events software go hand in hand because of the complexity of logistics and compliance when organizing a physician-led educational event. Physicians World has been a strategic partner for many years. We have a long track record of success together. Now we've joined forces to make it easy for our customers to get industry-leading cloud software and services from a single vendor. I'm really happy to welcome the Physicians World team to Veeva. These acquisitions made for a very busy quarter. I want to thank our corporate development, finance, legal, IT, HR, and product teams for putting in the extra hours to make this happen with speed and quality. Shifting gears to Viva Vault. One of the major highlights of the quarter and our year was Viva R&D Summit, which had record attendance, growing more than 40% to over 2,000 people. There's real transformation underway, supported by Viva Development Cloud. For the first time, the industry has a suite of applications that span the full drug development lifecycle, all on a single cloud platform. It was great to see so many customers showcase their successes and to work with them as they look toward the future. Vault had another excellent quarter across enterprise and SMB. I'll touch on just a few highlights in quality and clinical. A top 20 pharma in Europe selected Quality Docs as their enterprise standard to manage quality documentation. They are a long-standing commercial customer, and QualityDocs is their first Viva R&D application. They've struggled with a host of legacy applications in R&D, and QualityDocs is now the first step in their digital transformation. We see a similar dynamic in clinical, where companies are turning to VivaVault as they modernize and unify their system landscapes. For instance, a Top20 Pharma customer also in Europe selected VivaVault Study Startup Enterprise-wide in Q3. We now have six top 20 pharmas standardized on Study Startup to streamline trial execution. In CDMS, we have been awarded our first large-scale phase three trial with an existing top 20 pharma customer. This is a very large study. It will cover more than 12,000 patients across roughly 700 sites in 32 countries. Congratulations to the CDMS team. Getting such a large study is a testament to the innovation the team is bringing to market and to their hard work making early customers successful. It's a great milestone and speaks to the maturity of our products and services. EDMS is advancing faster than we initially expected thanks to great partnerships with our early customers. I expect to be out of early adopter mode by the end of next year and continue our measured expansion and product innovation from there. I'll also share a few updates on Vault outside of life sciences. Overall, I'm pleased with the team's progress to ensure customer success and product excellence. They've got their focus and are executing well against the opportunity in quality and regulatory for the chemicals, cosmetics, and CBG markets. To put things in perspective, that market, our initial market outside of life sciences, is roughly the same size as our CDMS market. In October, we held our second annual customer event for CPG Chemicals and Cosmetics, hosting more than 50 companies in Chicago. Also in the quarter, the team progressed well in our newer areas. We signed our fourth early adopter, another CPG company, for the new VIVA claims application, and we had a major milestone in regulatory with our first CPG customer go live. We are now in active discussions with seven of the top 20 CPG companies, We're still in early adoption mode in this market and will be for another year or more, but this level of activity, especially with large enterprises, tells us that we're on the right track for long-term success. In all, we had a great quarter and are progressing well against our long-term goals. Our focus on innovation and customer success and our ability to execute across multiple large markets positions us well to be the strategic technology partner to life sciences, and to reach our $3 billion revenue run rate target in 2025. And now I'll turn it over to Tim for a discussion of our financial performance. Thanks, Peter.