Veeva Systems Inc. Class A

Ladies and gentlemen, thank you for standing by and welcome to Viva's fiscal 2020 fourth quarter results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll 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 over to your speaker today, Rick Lund, head investor relations. Please go ahead, sir.

Good afternoon and welcome to Viva's fiscal 2020 fourth quarter and full year earnings call for the quarter and year ended January 31st, 2020. 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, March 3, 2020. If this call is replayed or viewed after today, the information presented during the call may not contain current or accurate information. VEVA 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 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. As you may have also seen in our earnings 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 everybody that we closed two acquisitions in the fourth quarter. On this call, we will provide details around how these acquisitions impacted our Q4 and fiscal 20 results and how they contribute to our fiscal 21 guidance for total revenue and commercial cloud subscription revenue. In addition, we will, in some cases, provide growth rates comparing periods that include the contribution from these acquisitions to periods that do not. With that, thank you for joining us, and I will turn it over to Peter.

Thank you, Rick, and thanks to everyone for joining us today. Q4 was another strong quarter with results ahead of our guidance. Fourth quarter revenue was $312 million, up 34% year-over-year. Subscription revenue grew 33%, and our non-GAAP operating margin was 34%. The past year was an exceptional one for Veeva. We retained our deep focus on customer success and product excellence. We expanded our leadership position and passed $1 billion in revenue a year and a half ahead of plan. We accelerated our pace of innovation in established and new markets and we made a potentially transformative acquisition with the addition of Crossix. We've refined our operating model for driving innovation in existing markets while also creating new, agile startups within Veeva. This gives our startups, like CDMS and Safety, the autonomy to be laser-focused on new markets while our core teams remain dedicated to transformation in their areas, like in CRM, for example, where we are embedding AI in ways that will fundamentally advance the industry. Also key has been the growth of our leadership team, which has expanded thanks to the exceptional new people we brought on board this year and the very talented people that have developed within Veeva. In all, we have set ourselves up well from a product, operating model, and team perspective to execute on the major opportunities ahead and to achieve our $3 billion revenue target in 2025. Thank you and congratulations to the entire Veeva team for their outstanding work this year. Now I'd like to share some highlights for the quarter and year. It was a record quarter and year for Veva Commercial Cloud. We further extended our leadership in core CRM. Our bookings increased over last year and we also saw an increased pace of new customer wins, adding 53 new customers compared to 46 the year prior. Our strength in core CRM is fueling growth in commercial cloud overall as companies look to Veva as their commercial foundation for the future. For example, in the quarter, a cutting-edge specialty diagnostics customer who is anticipating hypergrowth expanded their use of Viva CRM and adopted five additional commercial cloud applications enterprise-wide. This seven-figure deal was our largest ever in commercial SMB and shows the strategic importance of our solution for companies of all sizes. Viva Open Data also had a number of wins in the quarter as we continued to gain momentum in the data market. One of our key wins was a top 20 pharma that selected open data in the U.S., replacing their current solution. Head-to-head, they found our data was better and more expansive. This is key as they moved to new selling models that require greater depth of information, agility, and the vendor that operates as a true partner committed to their success. Also in the commercial area, I'm pleased to share that Crossix closed the year strong, with revenue coming in right on plan. The acquisition is going exceptionally well. The Cross6 team has brought new DNA around patients and data into Viva. Coming together will go well beyond what either company could have accomplished independently. We have an exceptionally strong joint vision and roadmap, which you'll hear more about this year. Before moving to Vault, I'd like to extend a special thanks to the Viva CRM team for their rapid response to help our customers navigate the challenges surrounding the coronavirus. For Viva CRM customers not currently using Engage Meeting, we are providing free access through September for field users in impacted areas. This allows reps to connect online with the doctors that depend on them for information about the latest research and treatment for their patients. In Viva Vault, we had our best quarter ever, capping off a great year that was driven by strength across product areas and geographies. We are winning more new Vault customers and existing customers are expanding their use. We closed the year with 715 Vault customers, up 25% from a year ago. And existing customers continue to buy more based upon their success with Vault and because of the benefits of having all applications on a single modern cloud platform. Our average Vault customer now has two to three Vault applications. The Vault platform has proven to be a unique and powerful asset allowing us to rapidly develop and scale applications across a range of areas. We now have 18 Vault applications in all. Regulatory is a good example of the momentum we are seeing across the board. In the quarter, a top 20 pharma and a top 50 pharma selected VivaVault RIM as their enterprise standard. These customers were struggling with a patchwork of legacy and custom-built solutions. One will replace more than 80 systems with Vault RIM. Over the past two years, the size of the RIM subscription business has doubled. We now have more than 200 RIM customers and great potential as we look ahead. Clinical is another area of significant strength and opportunity for us. In Q4, we signed our 14th Top 20 Pharma for ETMF. Our established track record of customer success with Vault ETMF is providing opportunities for additional Viva Clinical applications as customers see the benefit of a unified solution on a world-class cloud platform. For instance, in Q4, an existing top 20 ETMF customer standardized on Vault Study Startup. They are the seventh top 20 pharma to standardize on Study Startup. It's been less than four years since we started expanding our clinical suite beyond ETMF, and already a quarter of our ETMF customers have at least one other clinical application. I'm very excited about the growth we are seeing in clinical and the significant runway ahead. I'm also pleased with our progress in newer vault products. Safety and CDMS are two of the biggest opportunities we have on the R&D side and both are showing good early momentum. We have more than a dozen early adopters for safety and more than 60 studies have started on CDMS. These two areas are still small in terms of revenue, but we feel very good about the potential for these products to be market leading over time. This year will be an important one as we build our track record of customer success and continue to innovate in both areas. Outside life sciences, for CPG, chemicals, and cosmetics, we had a number of expansions and added some big wins with new companies, including a top 10 CPG company who will adopt quality one and a top 10 cosmetics company The Standardizing on Regulatory One. In reflecting on the year for this business and looking ahead, we set the right course in the Viva way. We kept our focus on customer success and doing the right things for our early adopters, which is helping establish Viva as a trusted provider in these new industries. It was a great and formative year for Viva. We grew and evolved in important new ways. We have a big opportunity ahead and the right team, Operating Model Technology, and focus on execution to fuel our growth well into the future. With that, I'd like to hand it over to Tim.