Globus Medical Inc
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Health Care : Health Care Equipment & Supplies | Mid Cap Growth
Company profile

Globus Medical, Inc. is a medical device company. The Company is focused on developing products for patients with musculoskeletal disorders. It is focused on products to treat patients with spine disorders. The Company's products fall under categories, which include Innovative Fusion and Disruptive Technologies. The Innovative Fusion category products include fusion products to treat spinal disorders for the entire spine, and they can be used in various surgical approaches. The Disruptive Technologies category represents a shift in the treatment of spinal disorders by allowing for surgical procedures and the treatment of spinal disorders. QUARTEX is its Occipito-Cervico-Thoracic (OCT) stabilization system. QUARTEX features a threading locking cap to enable low-torque. The Company's portfolio of approved and pipeline Disruptive Technology products includes products that allow for minimally invasive surgical (MIS) techniques.

Closing Price
$53.74
Day's Change
-1.06 (-1.93%)
Bid
--
Ask
--
B/A Size
--
Day's High
54.71
Day's Low
53.26
Volume
(Average)
Volume:
559,650

10-day average volume:
607,687
559,650

Veeva Announces Fiscal 2021 Second Quarter Results

4:05 pm ET August 27, 2020 (BusinessWire) Print

--Subscription Services Revenues of $283.5M, up 30% Year-over-year

Veeva Systems Inc. (NYSE: VEEV), a leading provider of industry cloud solutions for the global life sciences industry, today announced results for its fiscal second quarter ended July 31, 2020.

"We are focused on helping the industry as the move to streamline drug development and enable digital engagement has gone from strategic imperative to operational necessity," said CEO Peter Gassner. "Our team's dedication to customer success, bringing creative solutions, and delivering significant product innovations with speed, is more important than ever as life sciences steps up to meet the challenge of a lifetime."

Fiscal 2021 Second Quarter Results:

Revenues: Total revenues for the second quarter were $353.7 million, up from $266.9 million one year ago, an increase of 33% year-over-year. Subscription services revenues for the second quarter were $283.5 million, up from $217.3 million one year ago, an increase of 30% year-over-year. Operating Income and Non-GAAP Operating Income(1): Second quarter operating income was $90.1 million, compared to $73.9 million one year ago, an increase of 22% year-over-year. Non-GAAP operating income for the second quarter was $144.4 million, compared to $103.7 million one year ago, an increase of 39% year-over-year. Net Income and Non-GAAP Net Income(1): Second quarter net income was $93.6 million, compared to $79.2 million one year ago, an increase of 18% year-over-year. Non-GAAP net income for the second quarter was $116.4 million, compared to $87.7 million one year ago, an increase of 33% year-over-year. Net Income per Share and Non-GAAP Net Income per Share(1): For the second quarter, fully diluted net income per share was $0.58, compared to $0.50 one year ago, while non-GAAP fully diluted net income per share was $0.72, compared to $0.55 one year ago.

"Demand for our products and services remains strong as life sciences companies pursue strategic initiatives across R&D and commercial," said CFO Tim Cabral. "Given the opportunity ahead, we continue to invest for product excellence, customer success, and long-term growth."

Recent Highlights:

MyVeeva for Doctors to Make it Easy for Healthcare Professionals to Get the Information They Need -- Unveiled at Veeva Commercial Summit, MyVeeva for Doctors is a website and mobile application that will give healthcare professionals access to contacts, content, and services from across pharma companies and brands - all in a single place. By having quick and easy access to the information they need, doctors can better help their patients. The new offering is targeted for release at the end of the year for the U.S. market. Innovation and Product Excellence Drives Leadership in Clinical -- The quarter marked a number of important milestones including Veeva Vault CTMS's selection as the global standard by another top 20 pharma and its first top 7 CRO. The company also had a strategic Veeva Vault CDMS win for a number of complex oncology trials with a new top 20 pharma. Overall, more companies are turning to Veeva for its innovation in clinical, including more than 300 Vault eTMF and 70 Vault CTMS customers, and over 100 clinical trials have started on Vault CDMS. Record Quarter for Veeva Vault Quality -- Record sales of Vault Quality applications in the second quarter were fueled by a number of key wins and expansions. Building on their success with Veeva Vault, two top 20 pharma customers standardized on Vault QMS and another top 20 added Vault QualityDocs enterprise-wide. More than 120 customers with Vault QMS and QualityDocs can bring together quality work processes and quality documentation into a single system, enabled by Veeva Vault's unique ability to support both content-centric and data-centric applications on a single platform.

Financial Outlook:

Veeva is providing guidance for its fiscal third quarter ending October 31, 2020 as follows:

Total revenues between $360 and $362 million. Non-GAAP operating income between $138 and $140 million(2). Non-GAAP fully diluted net income per share between $0.66 and $0.68(2).

Veeva is providing guidance for its fiscal year ending January 31, 2021 as follows:

Total revenues between $1,415 and $1,420 million. Non-GAAP operating income between $540 and $545 million(2). Non-GAAP fully diluted net income per share between $2.64 and $2.67(2).

Conference Call Information

What:                Veeva's Fiscal 2021 Second Quarter Results Conference Call Veeva's Fiscal 2021 Second Quarter Results Conference Call
When:                Thursday, August 27, 2020                                                             Thursday, August 27, 2020
Time:                1:30 p.m. PT (4:30 p.m. ET)                                                           1:30 p.m. PT (4:30 p.m. ET)
Online Registration: www.directeventreg.com                                                                www.directeventreg.com
                     ------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------
  Conference ID 8170917                                                                 Conference ID 8170917

Investor Presentation Details

An investor presentation providing additional information and analysis can be found at 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 third fiscal quarter ending October 31, 2020 or fiscal year ending January 31, 2021 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. The effect of these excluded items may be significant.

About Veeva Systems

Veeva Systems Inc. is the leader in cloud-based software for the global life sciences industry. Committed to innovation, product excellence, and customer success, Veeva serves more than 900 customers, ranging from the world's largest pharmaceutical companies to emerging biotechs. Veeva has more than 400 Commercial Cloud customers and more than 590 Development Cloud customers. Veeva is headquartered in the San Francisco Bay Area, with offices throughout North America, Europe, Asia, and Latin America. For more information, visit veeva.com.

Veeva uses its ir.veeva.com website as a means of disclosing material non-public information, announcing upcoming investor conferences, and for complying with its disclosure obligations under Regulation FD. Accordingly, you should monitor our investor relations website in addition to following our press releases, SEC filings, and public conference calls and webcasts.

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, outlook, and guidance and the assumptions underlying those statements, 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) the impact of the COVID-19 pandemic (including the impact to the life sciences industry, impact on general economic conditions, and government responses, restrictions, and actions related to the pandemic); (ii) breaches in our security measures or unauthorized access to our customers' data; (iii) our expectation that the future growth rate of our revenues will decline; (iv) competitive factors, including but not limited to pricing pressures, consolidation among our competitors, entry of new competitors, the launch of new products and marketing initiatives by our existing competitors, and difficulty securing rights to access, host or integrate with complementary third party products or data used by our customers; (v) the rate of adoption of our newer solutions and the results of our efforts to sustain or expand the use and adoption of our more established applications, like Veeva CRM; (vi) fluctuation of our results, which may make period-to-period comparisons less meaningful; (vii) our ability to integrate Crossix Solutions Inc. and Physicians World, LLC into our business and achieve the expected benefits of the acquisitions, including as a result of the impact of the COVID-19 pandemic on these businesses; (viii) loss of one or more customers, particularly any of our large customers; (ix) system unavailability, system performance problems, or loss of data due to disruptions or other problems with our computing infrastructure; (x) our ability to attract and retain highly skilled employees and manage our growth effectively; (xi) failure to sustain the level of profitability we have achieved in the past as our costs increase; (xii) adverse changes in the life sciences industry, including as a result of customer mergers; (xiii) adverse changes in economic, regulatory, international trade relations, or market conditions, including with respect to natural disasters or actual or threatened public health emergencies; (xiv) a decline in new subscriptions that may not be immediately reflected in our operating 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 April 30, 2020. 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)
                                                   July 31,                      July 31,                                January 31,
                                                                        2020                          2020                                                        2020
                                                                -------------------- ------------------------------------                        ------------------------------------
Assets                                                                                   
Current assets:                                                                          
                                                                $                    $         795,782     $         476,733  
   Cash and cash equivalents
                                                                             699,707           699,707               610,015  
   Short-term investments
                                                                             220,803           220,803               389,690  
   Accounts receivable, net
                                                                              36,650            36,650                32,817  
   Unbilled accounts receivable
                                                                              32,490            32,490                21,869  
   Prepaid expenses and other current assets
                                                                -------------------- ----------------  --------------------                      ----------------  --------------------
                                                                           1,785,432         1,785,432             1,531,124  
      Total current assets
Property and equipment, net                                                   52,576            52,576                54,752  
Deferred costs, net                                                           34,645            34,645                35,585  
Lease right-of-use assets                                                     51,286            51,286                49,132  
Goodwill                                                                     438,529           438,529               438,529  
Intangible assets, net                                                       124,420           124,420               134,601  
Deferred income taxes, noncurrent                                             12,167            12,167                11,870  
Other long-term assets                                                        17,354            17,354                16,184  
                                                                -------------------- ----------------  --------------------                      ----------------  --------------------
Total assets                                                    $                    $       2,516,409     $       2,271,777  
                                                                ==================== ======= ========= ====================                      ======= ========= ====================
                                                                      
Liabilities and stockholders' equity                          
Current liabilities:                                                                     
                                                                $                    $          16,476     $          19,420  
   Accounts payable
                                                                              27,494            27,494                25,619  
   Accrued compensation and benefits
                                                                              22,763            22,763                21,620  
   Accrued expenses and other current liabilities
                                                                               2,464             2,464                 5,613  
   Income tax payable
                                                                             421,167           421,167               468,887  
   Deferred revenue
                                                                              11,118            11,118                10,013  
   Lease liabilities
                                                                -------------------- ----------------  --------------------                      ----------------  --------------------
                                                                             501,482           501,482               551,172  
      Total current liabilities
Deferred income taxes, noncurrent                                              1,824             1,824                 2,417  
Lease liabilities, noncurrent                                                 46,187            46,187                44,815  
Other long-term liabilities                                                   10,189            10,189                 7,779  
                                                                -------------------- ----------------  --------------------                      ----------------  --------------------
                                                                             559,682           559,682               606,183  
      Total liabilities
                                                                -------------------- ----------------  --------------------                      ----------------  --------------------
Stockholders' equity:                                         
                                                                                   2                 2                     1  
   Class A common stock
                                                                      --    --        --  
   Class B common stock
                                                                             850,776           850,776               745,475  
   Additional paid-in capital
                                                                               6,170             6,170                   460  
   Accumulated other comprehensive income
                                                                           1,099,779         1,099,779               919,658  
   Retained earnings
                                                                -------------------- ----------------  --------------------                      ----------------  --------------------
                                                                           1,956,727         1,956,727             1,665,594  
      Total stockholders' equity
                                                                -------------------- ----------------  --------------------                      ----------------  --------------------
                                                                                                                                         VEEVA SYSTEMS INC.
                                                                                                                      CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                                                                                                                (In thousands, except per share data)
                                                                                                                                             (Unaudited)
                                                            Three months ended                                       Three months ended                                        Six months ended                                  Six months ended
                                                                                    July 31,                                                 July 31,                                                 July 31,                                          July 31,
                                                                              -------------------- --------------------------------------------------------------------------------------       -------------------- -------------------------------------------------------------------------
                                                                   2020                         2020                        2019                         2019                        2020                  2020                 2019                         2019
                                                                              -------------------- ---------------------------------   -------------------- ---------------------------------   -------------------- --------------------  -------------------- ---------------------------------
Revenues:                                                                                                                   
                                                                              $                    $      283,502   $                    $      217,312   $                    $             553,737 $                    $      415,427  
   Subscription services(4)
                                                                                            70,181         70,181                 49,588         49,588                137,052               137,052               96,225         96,225  
   Professional services and other(5)
                                                                              -------------------- -------------  -------------------- -------------------- -------------  -------------------- -------------------- --------------------  -------------------- -------------  --------------------
                                                                                           353,683        353,683                266,900        266,900                690,789               690,789              511,652        511,652  
      Total revenues
                                                                              -------------------- -------------  -------------------- -------------------- -------------  -------------------- -------------------- --------------------  -------------------- -------------  --------------------
Cost of revenues(3):                                                                                                                       
                                                                                            43,400         43,400                 31,480         31,480                 86,612                86,612               61,858         61,858  
   Cost of subscription services
                                                                                            53,804         53,804                 38,738         38,738                105,472               105,472               73,863         73,863  
   Cost of professional services and other
                                                                              -------------------- -------------  -------------------- -------------------- -------------  -------------------- -------------------- --------------------  -------------------- -------------  --------------------
                                                                                            97,204         97,204                 70,218         70,218                192,084               192,084              135,721        135,721  
      Total cost of revenues
                                                                              -------------------- -------------  -------------------- -------------------- -------------  -------------------- -------------------- --------------------  -------------------- -------------  --------------------
Gross profit                                                                               256,479        256,479                196,682        196,682                498,705               498,705              375,931        375,931  
                                                                              -------------------- -------------  -------------------- -------------------- -------------  -------------------- -------------------- --------------------  -------------------- -------------  --------------------
Operating expenses(3):                                                                                                                     
                                                                                            70,053         70,053                 51,146         51,146                132,290               132,290               96,119         96,119  
   Research and development
                                                                                            59,172         59,172                 45,821         45,821                114,927               114,927               85,438         85,438  
   Sales and marketing
                                                                                            37,173         37,173                 25,859         25,859                 73,842                73,842               49,349         49,349  
   General and administrative
                                                                              -------------------- -------------  -------------------- -------------------- -------------  -------------------- -------------------- --------------------  -------------------- -------------  --------------------
                                                                                           166,398        166,398                122,826        122,826                321,059               321,059              230,906        230,906  
      Total operating expenses
                                                                              -------------------- -------------  -------------------- -------------------- -------------  -------------------- -------------------- --------------------  -------------------- -------------  --------------------
Operating income                                                                            90,081         90,081                 73,856         73,856                177,646               177,646              145,025        145,025  
Other income, net                                                                            2,881          2,881                  7,332          7,332                  6,295                 6,295               13,493         13,493  
                                                                              -------------------- -------------  -------------------- -------------------- -------------  -------------------- -------------------- --------------------  -------------------- -------------  --------------------
Income before income taxes                                                                  92,962         92,962                 81,188         81,188                183,941               183,941              158,518        158,518  
Provision for (benefit from) income taxes                                                     (589           (589 )                                   1,946          1,946                  3,820                 3,820                5,827          5,827  
                                                                              -------------------- -------------  -------------------- -------------------- -------------  -------------------- -------------------- --------------------  -------------------- -------------  --------------------
Net income                                                                    $                    $       93,551   $                    $       79,242   $                    $             180,121 $                    $      152,691  
                                                                              ==================== ====== ======= ==================== ==================== ====== ======= ==================== ==================== ========== ========== ==================== ====== ======= ====================
                                                                                                         
Net income per share:                                                                                                       
                                                                              $                    $         0.62   $                    $         0.54   $                    $                1.20 $                    $         1.04  
   Basic
                                                                              ==================== ====== ======= ==================== ==================== ====== ======= ==================== ==================== ========== ========== ==================== ====== ======= ====================
                                                                              $                    $         0.58   $                    $         0.50   $                    $                1.12 $                    $         0.96  
   Diluted
                                                                              ==================== ====== ======= ==================== ==================== ====== ======= ==================== ==================== ========== ========== ==================== ====== ======= ====================
                                                                                                         
Weighted-average shares used to compute net income per share:                                                               
                                                                                           150,413        150,413                147,510        147,510                149,982               149,982              147,116        147,116  
   Basic
                                                                              ==================== =============  ==================== ==================== =============  ==================== ==================== ====================  ==================== =============  ====================
                                                                                           160,840        160,840                158,675        158,675                160,309               160,309              158,339        158,339  
   Diluted
                                                                              ==================== =============  ==================== ==================== =============  ==================== ==================== ====================  ==================== =============  ====================
Other comprehensive income:                                                                                                 
                                                                                             1,131          1,131                    461            461                  2,428                 2,428                1,423          1,423  
   Net change in unrealized gains on available-for- sale investments
                                                                                             2,893          2,893                 (1,742         (1,742 )                                   3,282                 3,282               (2,444         (2,444 )
   Net change in cumulative foreign currency translation loss
                                                                              -------------------- -------------  -------------------- -------------------- -------------  -------------------- -------------------- --------------------  -------------------- -------------  --------------------
Comprehensive income                                                          $                    $       97,575   $                    $       77,961   $                    $             185,831 $                    $      151,670  
                                                                              ==================== ====== ======= ==================== ==================== ====== ======= ==================== ==================== ========== ========== ==================== ====== ======= ====================
                                                                                                         
(3) Includes stock-based compensation as follows:                                                                           
Cost of revenues:                                                                                                           
                                                                              $                    $        1,532   $                    $          583   $                    $               2,551 $                    $          968  
   Cost of subscription services
                                                                                             7,318          7,318                  4,458          4,458                 12,392                12,392                7,436          7,436  
   Cost of professional services and other
Research and development                                                                    16,437         16,437                  9,509          9,509                 27,838                27,838               15,833         15,833  
Sales and marketing                                                                         11,186         11,186                  7,177          7,177                 19,378                19,378               12,325         12,325  
General and administrative                                                                  12,893         12,893                  6,643          6,643                 24,114                24,114               12,564         12,564  
                                                                              -------------------- -------------  -------------------- -------------------- -------------  -------------------- -------------------- --------------------  -------------------- -------------  --------------------
Total stock-based compensation                                                $                    $       49,366   $                    $       28,370   $                    $              86,273 $                    $       49,126  
                                                                              ==================== ====== ======= ==================== ==================== ====== ======= ==================== ==================== ========== ========== ==================== ====== ======= ====================
                                                                                                         
(4) Includes subscription services revenues from the following product areas:                                                              
                                                                              $                    $      144,815   $                    $      112,593   $                    $             287,392 $                    $      218,390  
   Veeva Commercial Cloud
                                                                                           138,687        138,687                104,719        104,719                266,345               266,345              197,037        197,037  
   Veeva Vault
                                                                              -------------------- -------------  -------------------- -------------------- -------------  -------------------- -------------------- --------------------  -------------------- -------------  --------------------
Total subscription services                                                   $                    $      283,502   $                    $      217,312   $                    $             553,737 $                    $      415,427  
                                                                              ==================== ====== ======= ==================== ==================== ====== ======= ==================== ==================== ========== ========== ==================== ====== ======= ====================
                                                                                                         
(5) Includes professional services revenues from the following product areas:                                                              
                                                                              $                    $       26,618   $                    $       16,571   $                    $              53,994 $                    $       33,792  
   Veeva Commercial Cloud
                                                                                            43,563         43,563                 33,017         33,017                 83,058                83,058               62,433         62,433  
   Veeva Vault
                                                                              -------------------- -------------  -------------------- -------------------- -------------  -------------------- -------------------- --------------------  -------------------- -------------  --------------------
                                                                                                                                                   VEEVA SYSTEMS INC.
                                                                                                                                     CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                                                                                     (In thousands)
                                                                                                                                                       (Unaudited)
                                                                   Three months ended                                       Three months ended                                        Six months ended                                         Six months ended
                                                                                           July 31,                                                 July 31,                                                 July 31,                                                 July 31,
                                                                                     -------------------- --------------------------------------------------------------------------------------       -------------------- --------------------------------------------------------------------------------------
                                                                          2020                         2020                        2019                         2019                        2020                         2020                        2019                         2019
                                                                                     -------------------- ---------------------------------   -------------------- ---------------------------------   -------------------- ---------------------------------   -------------------- ---------------------------------
Cash flows from operating activities                                                                                                             
                                                                                     $                    $       93,551   $                    $       79,242   $                    $      180,121   $                    $      152,691  
   Net income
                                                                                                                                                                
   Adjustments to reconcile net income to net cash provided by operating activities:
                                                                                                    7,317          7,317                  3,881          3,881                 15,195         15,195                  7,781          7,781  
      Depreciation and amortization
                                                                                                    3,092          3,092                  1,680          1,680                  6,089          6,089                  3,218          3,218  
      Reduction of operating lease right-of-use assets
                                                                                                      496            496                 (1,096         (1,096 )                                     485            485                 (2,274         (2,274 )
      Accretion of discount on short-term investments
                                                                                                   49,366         49,366                 28,370         28,370                 86,273         86,273                 49,126         49,126  
      Stock-based compensation
                                                                                                    5,324          5,324                  4,843          4,843                 10,075         10,075                  9,692          9,692  
      Amortization of deferred costs
                                                                                                     (504           (504 )                                     921            921                 (1,638         (1,638 )                                   1,339          1,339  
      Deferred income taxes
                                                                                                      (98            (98 )                                      42             42                     (5             (5 )                                     (38            (38 )
      (Gain) Loss on foreign currency from mark-to-market derivative
                                                                                                      514            514                   (159           (159 )                                     121            121                   (312           (312 )
      Bad debt (expense) recovery
                                                                                                                                                                
      Changes in operating assets and liabilities:
                                                                                                   14,606         14,606                 18,804         18,804                168,766        168,766                158,314        158,314  
         Accounts receivable
                                                                                                      619            619                  1,982          1,982                 (3,833         (3,833 )                                  (3,262         (3,262 )
         Unbilled accounts receivable
                                                                                                   (5,793         (5,793 )                                  (4,427         (4,427 )                                  (9,135         (9,135 )                                  (9,028         (9,028 )
         Deferred costs
                                                                                                   (3,141         (3,141 )                                     611            611                 (4,991         (4,991 )                                     949            949  
         Income taxes payable
                                                                                                  (11,683        (11,683 )                                  (1,338         (1,338 )                                 (11,132        (11,132 )                                  (4,097         (4,097 )
         Other current and long-term assets
                                                                                                      914            914                    379            379                 (3,516         (3,516 )                                     (37            (37 )
         Accounts payable
                                                                                                      125            125                  2,672          2,672                  2,816          2,816                  1,913          1,913  
         Accrued expenses and other current liabilities
                                                                                                  (49,166        (49,166 )                                 (35,225        (35,225 )                                 (47,689        (47,689 )                                 (27,311        (27,311 )
         Deferred revenue
                                                                                                   (2,456         (2,456 )                                  (1,889         (1,889 )                                  (5,267         (5,267 )                                  (3,518         (3,518 )
         Operating lease liabilities
                                                                                                    2,237          2,237                  1,180          1,180                  4,757          4,757                  1,616          1,616  
         Other long-term liabilities
                                                                                     -------------------- -------------  -------------------- -------------------- -------------  -------------------- -------------------- -------------  -------------------- -------------------- -------------  --------------------
                                                                                                  105,320        105,320                100,473        100,473                387,492        387,492                336,762        336,762  
      Net cash provided by operating activities
                                                                                     -------------------- -------------  -------------------- -------------------- -------------  -------------------- -------------------- -------------  -------------------- -------------------- -------------  --------------------
Cash flows from investing activities                                                                                                                            
                                                                                                 (267,749       (267,749 )                                (209,195       (209,195 )                                (456,567       (456,567 )                                (438,089       (438,089 )
   Purchases of short-term investments
                                                                                                  229,224        229,224                187,772        187,772                369,566        369,566                376,737        376,737  
   Maturities and sales of short-term investments
                                                                                                   (5,407         (5,407 )                                  (1,378         (1,378 )                                  (5,140         (5,140 )                                  (2,991         (2,991 )
   Long-term assets
                                                                                     -------------------- -------------  -------------------- -------------------- -------------  -------------------- -------------------- -------------  -------------------- -------------------- -------------  --------------------
                                                                                                  (43,932        (43,932 )                                 (22,801        (22,801 )                                 (92,141        (92,141 )                                 (64,343        (64,343 )
      Net cash used in investing activities
                                                                                     -------------------- -------------  -------------------- -------------------- -------------  -------------------- -------------------- -------------  -------------------- -------------------- -------------  --------------------
Cash flows from financing activities                                                                                                                            
                                                                                                     (251           (251 )                                    (239           (239 )                                    (499           (499 )                                    (488           (488 )
   Reduction of lease liabilities - finance leases
                                                                                                    9,278          9,278                  3,620          3,620                 19,059         19,059                  7,011          7,011  
   Proceeds from exercise of common stock options
                                                                                     -------------------- -------------  -------------------- -------------------- -------------  -------------------- -------------------- -------------  -------------------- -------------------- -------------  --------------------
                                                                                                    9,027          9,027                  3,381          3,381                 18,560         18,560                  6,523          6,523  
      Net cash provided by financing activities
                                                                                     -------------------- -------------  -------------------- -------------------- -------------  -------------------- -------------------- -------------  -------------------- -------------------- -------------  --------------------
Effect of exchange rate changes on cash, cash equivalents, and restricted cash                      2,734          2,734                 (1,742         (1,742 )                                   3,282          3,282                 (2,444         (2,444 )
Net change in cash, cash equivalents, and restricted cash                                          73,149         73,149                 79,311         79,311                317,193        317,193                276,498        276,498  
Cash, cash equivalents, and restricted cash at beginning of period                                723,841        723,841                749,365        749,365                479,797        479,797                552,178        552,178  
                                                                                     -------------------- -------------  -------------------- -------------------- -------------  -------------------- -------------------- -------------  -------------------- -------------------- -------------  --------------------
Cash, cash equivalents, and restricted cash at end of period                         $                    $      796,990   $                    $      828,676   $                    $      796,990   $                    $      828,676  
                                                                                     ==================== ====== ======= ==================== ==================== ====== ======= ==================== ==================== ====== ======= ==================== ==================== ====== ======= ====================
                                                                                                                              
Supplemental disclosures of other cash flow information:                                                                                         

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 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 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. Income tax effects on the difference between GAAP and non-GAAP costs and expenses. The income tax effects that are excluded relate to the imputed tax impact on the difference between GAAP and non-GAAP costs and expenses due to stock-based compensation and purchased intangibles 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.

                                                                                                                                                                                          VEEVA SYSTEMS INC.
                                                                                                                                                                         RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
                                                                                                                                                                                        (Dollars in thousands)
                                                                                                                                                                                              (Unaudited)
The following tables reconcile the specific items excluded from GAAP metrics in the calculation of non-GAAP metrics for the periods shown below:
                                                           Three months ended                                                             Three months ended                                                                                                                         Six months ended
                                                                                   July 31,                                                                       July 31,                                                                                                                                                     July 31,
                                                                             -------------------- -------------------------------------------------------------------------------------------------------------------------------                              -------------------------------------------------------------------------------------------------------------------------------
                                                                  2020                                   2020                                                        2019                                                       2020                                                        2019
                                                                             -------------------- -----------------------------------------------------                         ------------------------------------------------------                         -----------------------------------------------------                         ------------------------------------------------------
Cost of subscription services revenues on a GAAP basis                       $                    $       43,400       $        31,480       $       86,612       $        61,858    
Stock-based compensation expense                                                           (1,532         (1,532 )                                   (583 )                                (2,551 )                                   (968 )                     
Amortization of purchased intangibles                                                      (1,174         (1,174 )                                   (688 )                                (2,768 )                                 (1,355 )                     
                                                                             -------------------- -------------  -------------------- --------------------                      --------------  -------------------- --------------------                      -------------  -------------------- --------------------                      --------------  -------------------- --------------------
Cost of subscription services revenues on a non-GAAP basis                   $                    $       40,694       $        30,209       $       81,293       $        59,535    
                                                                             ==================== ====== ======= ==================== ====================                      ======= ======= ==================== ====================                      ====== ======= ==================== ====================                      ======= ======= ==================== ====================
                                                                                                                                                                                                                           
Gross margin on subscription services revenues on a GAAP basis                               84.7           84.7   %                                 85.5   %                                84.4   %                                 85.1   %
Stock-based compensation expense                                                              0.5            0.5                   0.3                  0.5                   0.3    
Amortization of purchased intangibles                                                         0.4            0.4                   0.3                  0.4                   0.3    
                                                                             -------------------- -------------  -------------------- --------------------                      --------------  -------------------- --------------------                      -------------  -------------------- --------------------                      --------------  -------------------- --------------------
Gross margin on subscription services revenues on a non-GAAP basis                           85.6           85.6   %                                 86.1   %                                85.3   %                                 85.7   %
                                                                             ==================== =============  ==================== ====================                      ==============  ==================== ====================                      =============  ==================== ====================                      ==============  ==================== ====================
                                                                                                                                                                                                                           
Cost of professional services and other revenues on a GAAP basis             $                    $       53,804       $        38,738       $      105,472       $        73,863    
Stock-based compensation expense                                                           (7,318         (7,318 )                                 (4,458 )                               (12,392 )                                 (7,436 )                     
Amortization of purchased intangibles                                                        (138           (138 )                         --                 (273 )                         --    
                                                                             -------------------- -------------  -------------------- --------------------                      --------------  -------------------- --------------------                      -------------  -------------------- --------------------                      --------------  -------------------- --------------------
Cost of professional services and other revenues on a non-GAAP basis         $                    $       46,348       $        34,280       $       92,807       $        66,427    
                                                                             ==================== ====== ======= ==================== ====================                      ======= ======= ==================== ====================                      ====== ======= ==================== ====================                      ======= ======= ==================== ====================
                                                                                                                                                                                                                           
Gross margin on professional services and other revenues on a GAAP basis                     23.3           23.3   %                                 21.9   %                                23.0   %                                 23.2   %
Stock-based compensation expense                                                             10.5           10.5                   9.0                  9.1                   7.8    
Amortization of purchased intangibles                                                         0.2            0.2        --                  0.2        --    
                                                                             -------------------- -------------  -------------------- --------------------                      --------------  -------------------- --------------------                      -------------  -------------------- --------------------                      --------------  -------------------- --------------------
Gross margin on professional services and other revenues on a non-GAAP basis                 34.0           34.0   %                                 30.9   %                                32.3   %                                 31.0   %
                                                                             ==================== =============  ==================== ====================                      ==============  ==================== ====================                      =============  ==================== ====================                      ==============  ==================== ====================
                                                                                                                                                                                                                           
Gross profit on a GAAP basis                                                 $                    $      256,479       $       196,682       $      498,705       $       375,931    
Stock-based compensation expense                                                            8,850          8,850                 5,041               14,943                 8,404    
Amortization of purchased intangibles                                                       1,312          1,312                   688                3,041                 1,355    
                                                                             -------------------- -------------  -------------------- --------------------                      --------------  -------------------- --------------------                      -------------  -------------------- --------------------                      --------------  -------------------- --------------------
Gross profit on a non-GAAP basis                                             $                    $      266,641       $       202,411       $      516,689       $       385,690    
                                                                             ==================== ====== ======= ==================== ====================                      ======= ======= ==================== ====================                      ====== ======= ==================== ====================                      ======= ======= ==================== ====================
                                                                                                                                                                                                                           
Gross margin on total revenues on a GAAP basis                                               72.5           72.5   %                                 73.7   %                                72.2   %                                 73.5   %
Stock-based compensation expense                                                              2.5            2.5                   1.9                  2.2                   1.6    
Amortization of purchased intangibles                                                         0.4            0.4                   0.3                  0.4                   0.3    
                                                                             -------------------- -------------  -------------------- --------------------                      --------------  -------------------- --------------------                      -------------  -------------------- --------------------                      --------------  -------------------- --------------------
Gross margin on total revenues on a non-GAAP basis                                           75.4           75.4   %                                 75.9   %                                74.8   %                                 75.4   %
                                                                             ==================== =============  ==================== ====================                      ==============  ==================== ====================                      =============  ==================== ====================                      ==============  ==================== ====================
                                                                                                                                                                                                                           
Research and development expense on a GAAP basis                             $                    $       70,053       $        51,146       $      132,290       $        96,119    
Stock-based compensation expense                                                          (16,437        (16,437 )                                 (9,509 )                               (27,838 )                                (15,833 )                     
Amortization of purchased intangibles                                                         (29            (29 )                         --                  (57 )                         --    
                                                                             -------------------- -------------  -------------------- --------------------                      --------------  -------------------- --------------------                      -------------  -------------------- --------------------                      --------------  -------------------- --------------------
Research and development expense on a non-GAAP basis                         $                    $       53,587       $        41,637       $      104,395       $        80,286    
                                                                             ==================== ====== ======= ==================== ====================                      ======= ======= ==================== ====================                      ====== ======= ==================== ====================                      ======= ======= ==================== ====================
                                                                                                                                                                                                                           
Sales and marketing expense on a GAAP basis                                  $                    $       59,172       $        45,821       $      114,927       $        85,438    
Stock-based compensation expense                                                          (11,186        (11,186 )                                 (7,177 )                               (19,378 )                                (12,325 )                     
Amortization of purchased intangibles                                                      (3,568         (3,568 )                                   (825 )                                (6,970 )                                 (1,728 )                     
                                                                             -------------------- -------------  -------------------- --------------------                      --------------  -------------------- --------------------                      -------------  -------------------- --------------------                      --------------  -------------------- --------------------
Sales and marketing expense on a non-GAAP basis                              $                    $       44,418       $        37,819       $       88,579       $        71,385    
                                                                             ==================== ====== ======= ==================== ====================                      ======= ======= ==================== ====================                      ====== ======= ==================== ====================                      ======= ======= ==================== ====================
                                                                                                                                                                                                                           
General and administrative expense on a GAAP basis                           $                    $       37,173       $        25,859       $       73,842       $        49,349    
Stock-based compensation expense                                                          (12,893        (12,893 )                                 (6,643 )                               (24,114 )                                (12,564 )                     
Amortization of purchased intangibles                                                         (57            (57 )                         --                 (113 )                         --    
                                                                             -------------------- -------------  -------------------- --------------------                      --------------  -------------------- --------------------                      -------------  -------------------- --------------------                      --------------  -------------------- --------------------
General and administrative expense on a non-GAAP basis                       $                    $       24,223       $        19,216       $       49,615       $        36,785    
                                                                             ==================== ====== ======= ==================== ====================                      ======= ======= ==================== ====================                      ====== ======= ==================== ====================                      ======= ======= ==================== ====================
                                                                                                                                                                                      
                                                                                                                                                                                          VEEVA SYSTEMS INC.
                                                                                                                                                                   RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (continued)
                                                                                                                                                                             (Dollars in thousands, except per share data)
                                                                                                                                                                                              (Unaudited)
                                                           Three months ended                                                             Three months ended                                                                                                                         Six months ended
                                                                                   July 31,                                                                       July 31,                                                                                                                                                     July 31,
                                                                             -------------------- -------------------------------------------------------------------------------------------------------------------------------                              -------------------------------------------------------------------------------------------------------------------------------
                                                                  2020                                   2020                                                        2019                                                       2020                                                        2019
                                                                             -------------------- -----------------------------------------------------                         ------------------------------------------------------                         -----------------------------------------------------                         ------------------------------------------------------
Operating expense on a GAAP basis                                            $                    $      166,398       $       122,826       $      321,059       $       230,906    
Stock-based compensation expense                                                          (40,516        (40,516 )                                (23,329 )                               (71,330 )                                (40,722 )                     
Amortization of purchased intangibles                                                      (3,654         (3,654 )                                   (825 )                                (7,140 )                                 (1,728 )                     
                                                                             -------------------- -------------  -------------------- --------------------                      --------------  -------------------- --------------------                      -------------  -------------------- --------------------                      --------------  -------------------- --------------------
Operating expense on a non-GAAP basis                                        $                    $      122,228       $        98,672       $      242,589       $       188,456    
                                                                             ==================== ====== ======= ==================== ====================                      ======= ======= ==================== ====================                      ====== ======= ==================== ====================                      ======= ======= ==================== ====================
                                                                                                                                                                                                                           
Operating income on a GAAP basis                                             $                    $       90,081       $        73,856       $      177,646       $       145,025    
Stock-based compensation expense                                                           49,366         49,366                28,370               86,273                49,126    
Amortization of purchased intangibles                                                       4,966          4,966                 1,513               10,181                 3,083    
                                                                             -------------------- -------------  -------------------- --------------------                      --------------  -------------------- --------------------                      -------------  -------------------- --------------------                      --------------  -------------------- --------------------
Operating income on a non-GAAP basis                                         $                    $      144,413       $       103,739       $      274,100       $       197,234    
                                                                             ==================== ====== ======= ==================== ====================                      ======= ======= ==================== ====================                      ====== ======= ==================== ====================                      ======= ======= ==================== ====================
                                                                                                                                                                                                                           
Operating margin on a GAAP basis                                                             25.4           25.4   %                                 27.6   %                                25.7   %                                 28.4   %
Stock-based compensation expense                                                             14.0           14.0                  10.6                 12.5                   9.6    
Amortization of purchased intangibles                                                         1.4            1.4                   0.6                  1.5                   0.6    
                                                                             -------------------- -------------  -------------------- --------------------                      --------------  -------------------- --------------------                      -------------  -------------------- --------------------                      --------------  -------------------- --------------------
Operating margin on a non-GAAP basis                                                         40.8           40.8   %                                 38.8   %                                39.7   %                                 38.6   %
                                                                             ==================== =============  ==================== ====================                      ==============  ==================== ====================                      =============  ==================== ====================                      ==============  ==================== ====================
                                                                                                                                                                                                                           
Net income on a GAAP basis                                                   $                    $       93,551       $        79,242       $      180,121       $       152,691    
Stock-based compensation expense                                                           49,366         49,366                28,370               86,273                49,126    
Amortization of purchased intangibles                                                       4,966          4,966                 1,513               10,181                 3,083    
Income tax effect on non-GAAP adjustments(1)                                              (31,521        (31,521 )                                (21,379 )                               (55,063 )                                (38,426 )                     
                                                                             -------------------- -------------  -------------------- --------------------                      --------------  -------------------- --------------------                      -------------  -------------------- --------------------                      --------------  -------------------- --------------------
Net income on a non-GAAP basis                                               $                    $      116,362       $        87,746       $      221,512       $       166,474    
                                                                             ==================== ====== ======= ==================== ====================                      ======= ======= ==================== ====================                      ====== ======= ==================== ====================                      ======= ======= ==================== ====================
                                                                                                                                                                                                                           
Diluted net income per share on a GAAP basis                                 $                    $         0.58       $          0.50       $         1.12       $          0.96    
Stock-based compensation expense                                                             0.31           0.31                  0.17                 0.54                  0.31    
Amortization of purchased intangibles                                                        0.03           0.03                  0.01                 0.06                  0.02    
Income tax effect on non-GAAP adjustments(1)                                                (0.20          (0.20 )                                  (0.13 )                                 (0.34 )                                  (0.24 )                     
                                                                             -------------------- -------------  -------------------- --------------------                      --------------  -------------------- --------------------                      -------------  -------------------- --------------------                      --------------  -------------------- --------------------
________________________

View source version on businesswire.com: https://www.businesswire.com/news/home/20200827005690/en/

SOURCE: Veeva Systems Inc.

Investor Relations Contact: 
Rick Lund
Veeva Systems Inc.
925-271-9816
ir@veeva.com


Media Contact: 
Roger Villareal
Veeva Systems Inc.
925-264-8885
pr@veeva.com
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