Q4 2022 Veeva Systems Inc Earnings Call
Please standby were about to begin.
Good afternoon, ladies and gentlemen, and welcome to the Veeva systems fiscal 2022 fourth quarter and full year earnings call. Just a quick reminder, today's call is being recorded and at the end of today's prepared remarks, we will have a question and answer session. At this time I'd like to turn the call over to Adam <unk> Senior director of Investor Relations.
Please go ahead.
Good afternoon, and welcome to <unk> fiscal 2022 fourth quarter and full year earnings conference call for the quarter and year ended January 31 2022.
As a reminder, we posted prepared remarks on <unk> Investor Relations website, just after one PM Pacific today, we hope you've had a chance to read them before the call today's call will be used primarily for Q&A with me today for Q&A are Peter Gassner, Our Chief Executive Officer, Paul Chawla, EVP of commercial strategy, and Brent Spellman, our Chief Financial Officer.
During this call we may make forward looking statements regarding trends, our strategies and the anticipated performance of the business, including guidance regarding future financial results. These forward looking statements. We based on our current views and expectations and are subject to various risks and uncertainties. Our 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 .
Forward looking statements made during the call are being made as of today March <unk> 2022 based on the facts available to US today. If this call is replayed or viewed after today. The information presented during the call may not contain current or accurate information.
EBIT disclaims any obligation to update or revise any forward looking statements.
May discuss our 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 May 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, and a supplemental investor presentation, both of which are available on our website.
With that thank you for joining us and I'll turn the call over to Peter.
Thank you <unk> and welcome everyone to the call.
It was a great quarter and a year of execution per litre with strength across the business and results above our guidance.
Total revenue and subscription revenue for the quarter were each up 23% and we posted a 38% operating margin.
Total revenue for the year was up 26% to $1 8 billion and our operating margin was 41%.
We also continue to track ahead of our 2025 targets.
Things are going well, we have a great team and are attracting new people, who believe in our values and want to be part of our mission.
Our partnership with the industry continues to become more strategic our innovation engine is strong and we're executing well in established areas and newer areas.
If that speed up for a long runway of organic growth and profitability as we deliver more value to the industry.
And we'll now open it up open up the call to your questions.
Thank you very much Mr Gassner, ladies and gentlemen, any questions or comments at this time. Please press star one and we'll pause for just a moment to assemble the queue.
Well first this afternoon to bring breakthrough at Piper Sandler.
Thank you and good afternoon. Thanks for taking the question here, Peter maybe I'll start with you and.
Script here at prepared remarks, you do mentioned something about seeing some challenges around larger deals and closing deals and some projects taking a little longer.
To close can you just maybe talk about is that.
Shortage on talent on your side being able to service declined or is it really around.
Since that youre seeing and feeling.
Now in the in the customer side of that.
The.
The equation here.
Yeah, Brent this is Peter.
What we're seeing is overall there is a bit of a talent shortage in the industry that affects us and that affects our customers as well.
We have the industry is really growing and as you know the labor pool is a little bit shrinking in the U S. So that causes a bit of a talent shortage, we need more people, we have to train people, but I would say that a slight one and I feel comfortable about it we had a great hiring quarter were training a lot of new people how to do things in the industry. So.
I think that will work its way out.
And then the other one that you mentioned that the large deal that's something different though.
These are just where we are.
Seeing the larger deals than we've ever seen before some of them you know in companies that are maybe in the in the top 40 to the top 15 or so companies they might look to be going all in with fever things. They haven't done before on the R&D side and development cloud. Some top 10, they're looking sort of to go all in with us.
Clinical either large banks.
And they take time to work themselves through so two different factors you asked about there.
Helpful color and just one quick follow up on clinical that seems to be an area where.
You continue to have very good success, particularly around kind of the the the digital trials broader cdls adoption broader CD mass adoption here, what's resonating there and would you say clinical adoption is happening as you expected in the last year or things.
Is happening a little quicker than you anticipated in the last year. Thanks.
Yes.
Certainly what's happening there is that we are.
We're on our way to becoming the leader in clinical we started out with a broad vision to be the leader in clinical many years ago and that starts with putting in that anchor of Etfs and we're really the leader there and still expanding there and then <unk> you know.
We got good success, there we're on our way to being the leader. There then dbms, we got our early customers Library happy now we're planning these new seeds digital trials things like E Pro and site connect E consent. So our clinical suite, it's getting very broad and we're the only vendor only technology.
I'll get somebody that's trying to attack it broadly and also reinvented at the same time. So momentum is very good and it's a long term play we're super happy with that.
Clinical I saw our first demo of one of our new applications.
About two weeks ago, our E Pro Atlanta pay.
Patients are directly going to use and I think it's going to be the world, beating application, but it's new and it will change things it will change the industry. So it takes time to adopt.
Thank you we'll take our next question now from second call here at Barclays.
Okay, Great Hey, guys. Thanks for taking my questions here.
Peter maybe just to start with you I'd love to dig into data cloud a little bit really interesting remark in the prepared comments about sort of comparing that to vault in the early days can you just talk about that comparison, a little bit a lot of us on the call remember that in and maybe just the.
The extension to that question is what's been the feedback that you've gotten from those early adopters on data cloud about how the product stacks up against events against competitors out there that makes sense.
Yeah very good yes.
When I compare it to Volte is our data business overall, which has multiple components. It has Lincoln there is data cloud in their it has it has open data in there and what we're finding there we're making multiple data products and we're finding a way to fit them together in a nice cohesive data architecture that customers can.
Start consuming in different areas and that is very similar to balk nice.
Nice to architecture and way of doing things and yes, some people might start in regulatory or they might be starting clinical they might start in quality, but then they all fit together and get more valuable as you have more part. So that's that's what I mean about that is the hallmark of either we made excellent solutions that stand on their own multiple different points of entry.
And then we move forward so and in terms of the specific use cases I think it is good to dive into how data cloud is a bit different Paul you want to take that one and maybe what some of our early adopters are doing with data cloud.
Yes, sure and this is an area, where we're very clearly focused on kind of the early adopter phase of a market maturing the product product excellence I'll give you one or two customer examples because there the real Super interesting one as a top 10 pharma company and one of their brand teams for a very specific.
Use case this is in our specialty products and specialty products delivered through specialty pharmacies, and some specialty pharmacies block the access to the sales of that data, so which means the brand team can't see how much of it is being sold through that specialty pharmacy at the Syncarp blocked so that's like having a blind spot they can't see what's happening and they came to us.
And they asked US if we can help fill that blind spot in for them. If we can provide that visibility and we're actually because we because of what Peter talked about the modern way that we source and assemble and bring all our data together, we essentially in a sense unlocked a lot of the things that they couldnt see with their legacy provider. So this is just one use.
And a top 10 pharma company one brand this company probably markets, 25% or 30 products. So when you think about that that's patient data and a very small part of that company and what happens is that that starts to go viral in that company. So we're just building confidence in the data set and the market is starting to see that.
One other interesting example that happens to be with one of the top vaccine manufacturers is they they were asking us about our vaccine visibility and we use data cloud or patient data to look at the vaccine trends and we found that trend and they said hey.
That's wrong. It was a very specific trend there was a very specific dip at a time in the marketplace and a question to our data and together, we dug into it with them and they can actually learn something that they didn't expect that.
They were surprised to learn and they validated that our data was accurate so.
We're teaching customers, new things with our data and.
We're building confidence in our product excellence is working so that's playing out through the marketplace. That's going to take time. These are these are really complex.
Companies and it takes time for that to work through the system, but it.
It's playing out really nicely in the early part of the market.
Got it that's really helpful.
Brent maybe maybe for you as a follow up.
Very very helpful commentary in the prepared prepared remarks again just.
Around commercial subscription revenue roughly that 60, 40 split right around kind of <unk>.
Based on a per rep and not per rep basis.
And.
Or rather CRM versus non to you or maybe it's a better way to put it right in.
And so I was wondering if you could just maybe talk about sort of the relative growth profiles across those two parts of the commercial business.
As you look at fiscal 'twenty, three even broad brush.
Yes, no happy to saturate. So if you take if you take a look at fiscal year 'twenty. Three guide the primary drivers of that growth is going to be on that non rep based piece, so think about prospects or marketing to advance market analytics.
Product as well as link and our content.
Bulk content product suite that is really going to be the primary driver the more traditional CRM and the add on business will be more steady slight grower I would think of it from that perspective.
Got it very helpful. Thanks, guys.
Yeah.
We go next now too along with Guggenheim Securities.
Great. Thanks for taking my question.
Maybe it's for Peter.
Maybe Brian .
As we look at that.
The clinical growth on subscription it did DSL again from 39% to 34 I guess, what's the key driver of that is that is that just purely because those are typically the larger deals and thats, where youre seeing some maybe some near term pressure would love any color you can give in terms of what what the impact is.
Yes, Ken this is Peter and we're really happy with that 34% growth on what is becoming a larger number. These days. So it's just the way the deals are falling out and the product suite is getting larger.
<unk> is very early in its revenue and its revenue curve E beam asking then digital trials hasn't even really started so I think that's what you are seeing numbers getting larger.
<unk> is really getting a lot of traction, but not contributing very much from a revenue point of view because these are large deals oftentimes that ramp now if you want leading indicators on clinical.
If you're looking at script one of the most meaningful lines in there.
One of the top six crows switched to veeva as their preferred.
Tbms, when a sponsor ask them to run a trial that.
Thats a big deal that all started that'll start to trend. So that's really good validation. So yes, we're really happy with our clinical business.
Got it really appreciate the color there.
And then Brent.
Billings is kind of no longer part of the disclosures I.
I guess as we think about our model I know in the past you've typically has steered us towards it to kind of track with subscription growth is that still the right framework as we look ahead and any kind of seasonal elements that we should be thinking about on that number.
So Ken I, just want to make sure. We're in sync we did provided guidance on billings.
For the ear, so we forget guy in fiscal year 'twenty two.
Two $3 billion to $2 billion of Cowen and about 19%.
So we're excited about the.
The momentum we're seeing in the business, that's translating into our guide to billings for the year.
Okay, sorry about that yes.
Issues, we couldnt get out of the IR slides, all kind of going off of the press release, but.
I appreciate that.
Okay then.
Thank you for the clarification I'm good on that.
Yes, no problem Ken Thanks.
Okay.
Thank you. We'll go next now to Richie Deloria at RBC capital markets.
Hey, this is Richard <unk>.
I guess just a quick question on the.
A follow up on the pharma wrapped production I know last quarter, you said that it was a minimal impact on the quarter and.
You pointed to.
The non.
Non core CRM piece is being now 40%, but just kind of as we look into <unk>.
Fiscal 'twenty, three and fiscal 'twenty four.
Are you still seeing the same.
10% Rep production and that impact on the core CRM business and just kind of I guess any update over the last 90 days on that piece.
Yes, Richard this is Paul I can give you an update.
In terms of rent reductions what we saw in Q4 was exactly pretty much exactly as we had expected and anticipated we did see some some reductions that we had planned for and anticipated so no surprises there.
We also didn't see anything that would.
Cause us to change any of our thinking around this overall, 10%, which has been playing out starting last year and it will play out mostly through this year and partly into next year. So really no change on any of that thinking it's playing out much as we expected.
Got it Super helpful. Thank you.
Thank you. We'll go next now to Dylan Becker with William Blair.
Hey, guys. Thanks for taking the questions.
I guess, maybe first for Peter too.
So kind of a record customer.
Add year here and as you continue to mature.
Some of your R&D.
Solutions and the platform today I guess, how are you thinking about the pace of adoption of some of these earlier offerings right.
<unk> estimates that safety measurement tools are seeing a more rapid uptake is it is it solely again that the value of the integration across the platform that's driving that and how are you guys thinking about I mean.
Factoring in that uptick from an innovation standpoint again going forward.
As you as you add new solutions should we think about it is incremental.
Incremental accelerated kind of adoption for those solutions just given the fact that it's incremental value add for customers.
Yes, I guess the way to think about pet adoption, that's what drives the adoption I would say product excellence number one having the best.
This product in the market and staying with it building the best product in the market. That's hard work you've got to hire the best product people.
Quite a strong vision and so that's going well.
And we're very good at that I would say the other thing is relationships when youre, bringing something into large enterprises relationships really help that's where our multi product approach.
Really helps.
And these products you have a lot of early products.
They.
We're making progress, but they're very early in their revenue cycle safety very very early data cloud extremely early even CDMA.
Very early not to mention some of the digital trials things some other products we have so.
Progress.
Really starts a long way before the revenue so I'm really happy with the progress and it will lead to good revenue overtime.
That's great yes, I appreciate the color there maybe one other one too maybe more for more sofa brands, but as we think about.
Kind of the back half ramp maybe in the year right. So how should we be thinking about kind of the impact of hiring the project starts here.
And how it is kind of factored in or from a recovery standpoint through that backend acceleration and maybe as well to thinking of kind of the eye.
Uptick in or as you see an uptick in professional service, how that kind of flow through as a contributor to the subscription dynamic as well thanks guys.
Yes, so yes, thanks Sterling so when we looked at.
No.
The deal progression, we saw that the bookings linearity was it slightly more.
Weighted towards the back half of the year and so we are seeing good momentum of deals progressing and that is having about $15 million impact overall to revenue that we called out.
That is lending itself to the fact that we think we will be.
Accelerating on the back half of the year from a revenue subscription perspective.
So we are informed through the conversations we're having with customers.
As Peter mentioned, we are.
<unk> seen some large deals nicely professional services plays in that nicely. That's a really nice growing business. We're excited about it and we're continuing to build and add talent to that to that.
Team.
Great. Thanks for taking the questions guys.
Okay.
Thank you. We'll go next now to Ryan Macdonald Needham <unk> company.
Hi, Thanks for taking my questions here, maybe for you first I'm curious on Veeva engage obviously as we are broadly I think hopefully approaching a return to normal here in travel opening up again I'm curious what the renewals have looked like for Veeva engage and if youre seeing any similar trends that we're seeing more broadly what sort of video meeting platform.
Vendors in terms of sort of less usage herein and if that could have sort of a double impact on commercial over time with sort of not only fewer pharma reps, but then also maybe a shift away from more video race meetings to return in person.
Yeah, Hey, Hey, Ron This is Paul I can I can take that.
Track those numbers pretty closely with engage first the renewals have been very strong.
Into this year and last year into this year utilization was really high.
The utilization will go up and down.
Offices opening and closing.
Preferences, we're focused together with the industry on helping the industry become more hybrid operate either from the doctor's office or from their home office and do that very seamlessly I'm really proud of the team. We've built a really strong product in core CRM and engage to enable this hybrid way of working.
And that hybrid way of working is here to stay most every company every customer that I talked to they are thinking about hybrid ways of working sometimes digital sometimes and physically in an office. So although the utilization will go up and down it's something that is just here to stay and it's going to be kind of how they do business going forward. So I think the renew.
<unk> will continue and engage.
And particularly as we continue to innovate in that product, we're making it rather interestingly.
Interestingly, adding things into a product where even if you're in an office engage becomes valuable where you can share content, let's say six feet. Apart that's part of the engage platform. So our customers really appreciate that kind of innovation. So we're excited about.
Helping to move the industry to hybrid and also the.
The roadmap of innovation there.
And perhaps just a quick follow up on that in terms of the pace of the migration of the industry there.
You feel that the current environment is such that.
Pharma companies are sort of obviously cutting head count here and then just sort of evaluating the productivity levels of what they have remaining before making sort of those incremental more hybrid or virtual investments or are you starting to see a faster.
Faster sort of adoption of those additional areas just trying to understand how quickly we could see perhaps that's 40%.
Non rep based component evolve over time.
Yeah, so when they.
First of all.
Has driven some of their productivity gains is the adoption of more technology. The utilization of digital and Veeva has played a big part of that was part of our strategy helped make the industry more productive. So now they get the benefit of that productivity and what theyre able to do with that is of course take some of that is reductions that are able to use that those dollars too.
To either invest in more digital where they invest in other areas like as they do digital over the long term may need better data as one example, so that could lead to tailwind for areas like link and helping them figure out who they need to reach digitally data cloud, becoming more precise about how they do digi.
Engagement so.
This is something that's going to play out over many many years the shift to digital it's not a fast thing that happens, but I think the.
The number of reps will hit a new steady state and then the industry will continue to evolve and adopt new digital capabilities and also new data and analytics SaaS from from Veeva and more broadly.
I appreciate the color. Thanks again.
Okay.
Thank you well go next now to stand philosophy at Morgan Stanley .
Hi, Brian Bressler Entre Stan Thanks for taking my question I guess, maybe first.
Can you talk about the vault outside of life Sciences, how are you thinking about that business going into the FY 'twenty three now that maybe some of the COVID-19 headwinds starting to subside.
Okay.
The business, there I think youre right Covid headwinds.
Largely normalized in that in that business outside of life Sciences. So there we're focused on.
Large customers in consumer products and chemicals, so things like your basic consumer goods actually food consumer consumer health care cosmetics, and specialty chemicals, and we're focused on companies large companies largely companies a $5 billion in revenue and above.
And if you look where we're focused.
Tori and quality and safety, that's kind of where we're going to help.
Help them safety has a different meaning than inside life Sciences is not a drug safety safety employee safety and safety environment So pretty.
Pretty focused there and I think it.
He has got good momentum.
Steady as steady as she goes there it's gonna be a nice steady growing business for us.
Helpful. Thank you maybe just one more then.
You've talked last quarter, a bit about med tech CRM, just kind of curious any updates on the opportunity there and how that could maybe work into your existing relationship with Salesforce.
Yes, Med Tech CRM, we announced that last quarter. So overall med tech business for us is going well and it's largely on the wealth side on the R&D side and the quality regulatory clinical area commercial content, but we did announce that.
CRM and that was done.
Very openly with Salesforce who's been a great partner of ours for 15 years 15 year partnerships and technology that doesn't happen very often so yes, we partner there and in pharma with Salesforce. It's just early in Med Tech CRM that we're doing on vault and we're just talking to some customers who may become.
Early adopters, where we're building the products. So they're only have any progress to report we are having a lot of good.
Customer conversations.
Got it thank you I appreciate it.
Okay.
Thank you and ladies and gentlemen, just a quick reminder, any questions. Today. Please press star one well go next to Kirk <unk> at Evercore.
Hey, guys. Thanks for taking my question. This is the idea here asking on behalf of Kirk.
But I just wanted to ask you guys acquired velocity.
A couple of months ago, now and which is now being offered to us.
So our GSM, but can you talk a little bit about how that's going so far but future product future growth of this product.
And your thoughts that have and are moving forward and just kind of a follow up.
Like does more M&A kind of make sense with all the.
Organic developments that you guys are kind of making just any thoughts on that.
We're very happy with the Rts and the acquisition I'll pick a little bit of time on that.
Feeling great as to say Im a bit more involved in that one then the <unk> and some other things.
It's a small team.
But they had a very robust product that they felt developed over more than 10 years, but.
But they didn't have a channel in a way really to sell that product. So.
That team is feeling really energized as part of Veeva. We've added to the team we have a new general manager for that area that came from the venous side. He's engaged because he has a new.
And new job and a new thing to do.
And we actually won a few new deals or net new logos.
It's truly feeling good now in terms of acquisition strategy still we would whenever we look to go into a new market. We would look is is that the right type of thing and we can buy or do we build or do we partner oftentimes youre not going to find the right thing to buy sometimes you are and in this case, we do.
Good.
So our strategy really hasn't changed and we're very happy with the RPM acquisition.
Thank you very much.
Thank you we take our next question now from Jon <unk> at Baird.
Great Hi, everyone.
Veeva, obviously had a very strong year, and b quality category and quality seems to be receiving.
A bit of an elevated focus just in general based on kind of the rates.
There's been some big transactions in the space.
Do you think no rule that product in your customer is changing or evolving so that ultimately.
Command, a bigger footprint I think that'll be bought rank ordering bulk products.
Has the overall opportunity for quality actually ground, so that it might be more consequential and going forward then I might then several years prior.
Yes, certainly quality is.
Big area for us and still relatively early and it's growing in two ways. The footprint is good.
Bigger.
<unk> training with something we added and Thats now starting to do well we bought them.
DXP content, that's very early that starting to ramp we announced a big new product Laboratory information management system, which is the way pharmaceutical companies test the quality of their products, that's a very strategic piece.
Areas, so it's growing in it.
Number of applications and then the places where we're bringing it is also growing so quality is one of those things over time will probably have a thousand quality customers.
War.
Roughly $450 or so now so quality will go far and wide and be a really big business for us over time. So you are right to pick up on that.
Okay, Great and then maybe a question for Brian .
Don.
Back end weighted.
Nature of billings growth.
This year it seems like.
Maybe starting the year with mid teens growth and then exiting closer to 20% growth.
20% type number start to inform and kind of how we should view of growth.
I know, it's early but growth in fiscal 2024, if you're exiting at that type of level.
Yes, so regarding our guide for the year. So I think looking at the full year number is the best way to kind of look at the overall strength of the business from a billings perspective at 19%.
I'm not going to provide any sort of guidance for for 24 at this point in time, but but we are excited about the momentum we're seeing in the business the scale of the deals the breath of the deals.
And.
As we look out to 2025 and beyond we're clearly tracking ahead of our 2025 goals. So we're very optimistic.
Great. Thank you.
Yes.
Thank you we'll go next now to Stephanie Davis SDB Leerink.
Thank you guys. So much for taking my question.
You made some comments on the hybrid environment.
We go between in person. So I was hoping we could draw some parallels SMB virtual care players.
Are there any pockets of providers are departments that will drive require more in person meetings, especially I can go into more of a.
He kind of environment and are there any pockets that you think will be able to more fully lean in to engage communications somebody to Hal.
Behavioral health for example have gone more slowly and to virtual care.
Yes, I think it's a good insightful, one and Youre absolutely right. We do see we do see those nuances and differences across therapeutic areas and we can see that at a pretty granular level.
So we can compare oncology with neurology with the cardiovascular space, we can look at different segments, and we see differences there and those differences are often related to some of the things that you just described their level of comfort with.
Doing telemedicine is one indicator if there if they tend to do that more as part of their traditional practice they tend to be more comfortable doing and engage meeting with with pharma. So it translate there is some translation there. There's some other factors that come into play the regional nature, where some of these customers are some customers are getting reached now digitally.
That wasn't previously reached before in person.
There are some companies are expanding their customer targets that they are able to reach so we see those nuances, we help our customers get visibility into that so they can be more effective and they can start to benchmark ourselves and thats, where our business consulting comes into play we're able to be that very strategic partner to our customers, giving them really precise guide.
So you have to it's a key trend we see in watch and help our customers think through.
Thank you that's helpful.
Shift gears real quick just all part of the development cloud side I was hoping you could help us frame the trend of greater end to end outsourcing on pharma biotech company and kind of what the puts and takes are across trial complexity and call a success rate that.
Backing this especially in the terms of our reopen knock on wood.
And how that impacts your win rates versus some of your potential more incumbent competitors.
As the shift happens.
Stephanie yes.
I think that trend.
Outsourcing in source.
That's largely a net neutral to us.
I don't see a big I don't see a big change in that or any kind of a macro change.
Yes.
It's really net net neutral now if we look at those small biotechs, where does the first things they need they'll need a quality product that they always have to have their own quality records that shift.
So I see no change there and then the next thing they will need to probably the clinical area and that is where especially for the small biotech fever, making progress in the CRO channel the contract research organization channel, becoming the preferred provider of the clinical data management, that's what that is what's going to help us there.
Yeah.
Awesome. Thank you guys.
Thank you.
Thank you we'll go next to Brian Peterson of Raymond James.
Hi, Thanks for taking the question. So I wanted to start and maybe this is for Paul but just on promo mats and maybe I'm bad pump. It sounded like that was a driver of growth year over year, you know what I believe in the past when it used to be just the bolt business. There was some discussion on maybe that has hit a saturation point, but it sounds like that's not the case, so I'd be curious as.
Some of your customers kind of rethink their commercial strategies are we seeing incremental adoption for med comms and problem asset would be curious to get your thoughts there.
Yes, it's a good one Brian and the answer is yes. We are in a couple of things are driving that so we're seeing expansion within some existing customers are expanding their use to additional users and in some cases, even additional markets.
As they say.
They need to become more efficient in the content space, so expansions with existing customers, but we're also seeing.
Because of digital the demand for digital content and once you become more digital the speed of content you need to be faster. So we're helping our customers get to new new new levels of speed with innovation areas like module or content. For example, so there are cut.
<unk> are innovating, we're innovating with them and helping them become more efficient so expansions in existing customers driving the new levels of efficiency with things like modular content.
Because of digital is driving some of the uptick that you're seeing.
Thanks, Paul and Brian maybe one for you I mean, you guys have have you given a lot of detail about the.
The decline in the 10% of the timing I think the question that we get a lot is where are we seeing that in our financials. So if we think about just given how much of your renewal base is tied to the fourth quarter.
This last quarter that was just reported is that going to be the biggest headwind to billings given the revenue and the renewal impact or how do we think about that.
Yeah, Hey, Brian So what we've said is we expect most of the sales rep reductions of 10% to happen by the end of fiscal year 'twenty three.
So we're on that path.
We didn't see anything that was unusual or surprising to us in this last Q4.
And as you should expect that the revenue impact just slightly.
Trail the reduction in the pharma reps in the billings, so there's a little bit of a lag there and how it flows through the financials, but nothing's changed from what we've seen previously and it's all incorporated into our guidance.
Thanks, Brett.
Yep.
And our last question. This afternoon will come from Brad Sills of Bank of America.
Great. Thanks, guys for squeezing me in here.
Just wanted to ask I apologies, if you answered the question already but the hiring impact was that more on the customer side, they're they're lagging hiring plans getting projects started or is it more on your side hiring.
Sales personnel and whatnot to help close the deals.
The deal started.
Yeah, Brad this is Peter I'll take that I would say, it's been about strategy industry overall.
I know you were talking about a pharmaceutical company, whether it's Pfizer and Novartis are Viva itself.
The industry is growing and so we need more talent kind of specialized talent.
Having trouble getting enough people in manufacturing those people. So it's a slowdown is both from both of those things now.
In the scheme of things you have to remember a pretty minor slowdown and no change to the competitive environment on our side, yes. Those types of people that you would expect sale.
Sales and services sales and services people, but the good news is we had a strong hiring quarter and we're training a lot of new people about the industry. So.
It will come out of this very strong.
That's great to hear Peter Thanks, So much and one more if I may just anything on <unk> deals in.
In that top 50 segment this quarter and just pipeline how does that segment look thank you so much.
Yes, I would say I'm pretty optimistic about that segment.
Yes.
We won't talk about we mentioned the CRO the CRO that.
Perfect.
Veeva as their primary CMS now that that was a really big one <unk> in the top 20 as well, but that the pipeline is really progressing preclinical both CDMA <unk>, some combo deals across Etfs and Pbms.
I'm very excited about that.
Momentum you can feel it when it happens.
It doesn't show up in the financials for awhile, and we can gasoline shield clinical momentum right now.
Great to hear thanks, Peter.
Thank you.
Thank you and that is all the questions. We have for today, Mr. Gassner back to you Sir for any closing comments.
Alright, Thank you everyone for joining the call today and thank you to our customers for your continued partnership and to the Veeva team for your outstanding work in the quarter and the year. Thank you.
Thank you and again, ladies and gentlemen that will conclude today's veeva systems fiscal 2022 fourth quarter and full year earnings call.
Thank you all so much for joining us and wish you all a great day Goodbye.
Please wait the conference will begin shortly.
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