Q3 2023 Veeva Systems Inc Earnings Call

December 1, 2022

Good afternoon, My name is Emma and I will be your conference operator today.

Good afternoon, my name is Emma and I will be your conference operator today. At this time, I would like to welcome everyone to the Viva Systems Fiscal 2023 3rd Quarter Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session.

At this time I would like to welcome everyone to the Veeva systems fiscal 2023 third quarter results Conference call.

All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

If you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad.

If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, again press the star 1. Thank you.

If you would like to withdraw your question again press the star one thank you.

Otto Garrett senior director of Investor Relations you May begin your conference.

Otto Garrett, Senior Director of Investor Relations. You may begin your conference.

Good afternoon, and welcome to Veeva systems fiscal 2023 third quarter earnings conference call for the quarter ended October 31, 2022, as a reminder, we posted prepared remarks on Viva <unk> Investor Relations website, just after <unk> PM Pacific today, We hope you've had a chance to read them before the call today's call.

Good afternoon and welcome to Viva Systems Fiscal 2023 Third Quarter Earnings Conference call for the quarter ended October 31, 2022. As a reminder, we posted prepared remarks on Viva's investor relations website just after 1 p.m. 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 Schala, EVP Commercial Strategy, and Brent Bowman, our Chief Financial Officer.

You used primarily for Q&A with me today for Q&A are Peter Gassner, Our Chief Executive Officer, Paul shallow EVP 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.

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 will be 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 violin on Form 10Q.

And results. These forward looking statements will be 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 December one 2022 based on the facts available to US today and this call is replayed or reviewed after today. The information presented during the call may not contain current or accurate information Viva.

Forward-looking statements made during the call are being made as of today, December 1, 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. Be with this claim to any obligation to update or revise any forward-looking statements. We may discuss our guidance on today's call, but we will not provide any further guidance or updates on our performance during the quarter unless we...

Disclaims any obligation to update or revise any forward looking statements. We 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.

<unk> to comparable GAAP metrics can be found in today's earnings release and in the 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.

Yeah.

Hello, and welcome everyone to the call.

Strong Q3, delivering results ahead of our guidance total revenue in the quarter was $552 million.

Thank you, Ato, and welcome everyone to the call. We had a strong Q3, delivering results ahead of our guidance. Total revenue in the quarter was $552 million, up 16% year-over-year, and subscription revenue was up 16% to $442 million.

Up 16% year over year, and subscription revenue was up 16% to $442 million.

non-GAAP operating income was $219 million or 40% of total revenue.

Despite the difficult macro environment, we continue to execute well our innovation engine is strong and our strategic partnerships with the industry are increasing.

Despite the difficult macro environment, we continue to execute well. Our innovation engine is strong and our strategic partnerships with the industry are increasing.

We also had a record hiring quarter and a very strong quarter in clinical with some significant wins.

We also announced that we are moving Veeva CRM to the Veeva vault platform over time, this will allow us to deliver a better application and a better customer experience.

We also announced that we are moving Viva CRM to the Viva Fault platform over time. This will allow us to deliver a better application and a better customer experience.

At this point, we'll open up the call to your questions.

Thank you.

At this point, we'll open up the call to your questions.

As a reminder, if you would like to ask a question press star followed by the number one on your telephone keypad.

Thank you. As a reminder, if you would like to ask a question, press star followed by the number one on your telephone keypad.

Your first question today comes from the line of Ken Wong with Oppenheimer. Your line is now open.

Great. Thank you very much Peter I wanted to I guess, just dive straight into the the move to volte with CRM.

Great thank you very much and Peter I wanted to I guess just dive straight into the the move to vault with CRM you guys are definitely keeping us on our toes these last few quarters. Maybe first just for some clarity when we think about the contract ending in 25 and then a grace period through 30 does the non compete with Salesforce also end in 25 and and just would

You guys are definitely keeping us on our toes. These last few quarters maybe of course is.

Just for some clarity when we think about the contract ending in 'twenty five and then a grace period through 30 does the noncompete with Salesforce also and in 'twenty, five and and just would love your take on what that migration path looks like what would be some potential hurdle that might slow down that transition and then I've got a follow up for Brian .

Yes, Ken It is the contract goes until 2025 so that's.

We're not competing together in the market there that's according to the contract and then there is a wind down period for existing customers that starts in 2025 and that goes toe <unk>.

There's a wind down period for existing customers that starts in 2025 and that goes till 2030. So it's business as usual. There's nothing to change about today and the customers are supported with Viva CRM until 2030.

<unk> thousand 30, so it's business as usual there is nothing.

Could change about today and the customers are supported.

With Veeva CRM until 2030.

We expect to have early adopters on adult CRM in 2020 for.

We expect to have early adopters on the vault serum in 2024, some early adopters, and then the majority moving.

Some early adopters and then you know.

You're already moving.

2025, or so that's one we'll be selling mainly CRM and customers will migrate over time, they have plenty of time.

2025 or so that's when we'll be selling mainly vault CRM and customers will migrate over time. They have plenty of time

That's the basics of how to think about it Ken.

Okay Fantastic and then Brian just just quickly on the numbers in terms of the the slight reduction to clinical subscription R&D subscription is that due primarily just to FX or are there some impact from the billings dynamics that you called out in the prepared remarks or perhaps some macro.

So that's the basics of how to think about it Ken.

Okay, fantastic. And then, Brent, just quickly on the numbers, in terms of the slight reduction to clinical subscription or R&D subscription, is that due primarily just to FX, or is there some impact from the billing dynamic that you pulled out in the prepared remarks or perhaps some macro?

Yeah overall, yes, we're happy with R&D solutions growing at about 18% adjusted for FX on a full year basis, a little bit of reduction you're seeing is a combination of two things one is FX incremental as well as a little bit of deal timing. So the two things what's drove that a little bit of reduction.

Yeah, overall, we're happy with R&D solutions growing about 18% adjusted for FX on a full year basis. The little bit of reduction you're seeing is a combination of two things. One is FX incremental as well as a little bit of deal timing. So the two things, what's drove the little bit of reduction.

Got it thanks, a lot guys.

You bet.

Your next question comes from the line of Brian Peterson with Raymond James Your line is now open.

Got it. Thanks a lot guys.

You bet

Your next question comes from the line of Brian Peterson with Raymond James. Your line is now open.

Hi, gentlemen, thanks for taking my question so.

We're getting a lot of questions from investors on the new agreement.

Hi gentlemen, thanks for taking the question. So, you know, we're getting a lot of questions from investors on the new agreement. And from a financial perspective, is it right to use the accrued fees table to Salesforce that you guys disclose and kind of annualize that number on the potential impact that you guys would save or would there be some offsetting cost to that? I think everyone's just trying to think through the potential margin impact here over the long term.

From a financial perspective is it right to use the accrued fees payable to Salesforce that you guys disclosed and kind of annualize that number.

The potential impact that that you've got.

Would save or would there be some offsetting cost to that I think everyone's just trying to think through the potential margin impact here over the long term.

Yes, I mean, how I would think about it is first off.

If you look out to 2025 targets, we don't expect there to be a material impact we're still tracking about a year ahead.

Yeah, I mean, how I would think about it is first off, you know, if you look out to our 2025 targets, we don't expect there to be a material impact. We're still tracking about a year ahead, inclusive of this new announcement. We don't anticipate there to be any real significant investments required. We're going to largely leverage our internal resources and also the power of our Vault platform.

<unk>.

This new announcement, we don't anticipate there to be.

Any real significant investments required largely leverage our internal resources and also the power of our vault platform.

2025, that's a long time out there yes. There is some accounts payable you can see in our quarterly financials. That's a monthly number so you can.

You know, beyond 2025, that's a long time out there. Yeah, there is some accounts payable. You can see in our quarterly financials, you know, that's a monthly number. So you can use that as a ballpark estimate.

Use that as a ballpark estimate.

Thanks, Brian and maybe just a follow up.

You mentioned last quarter that we've seen some volatility in sales cycles I'd just be curious how that progressed throughout the quarter. It sounded like there were some really strong clinical results, but would love to get any color. There. Thanks guys.

Thanks Frank. Maybe just a follow-up. You know, you mentioned last quarter that we've seen some volatility in sales cycles. I'd just be curious, you know, how that progressed throughout the quarter. It sounded like there were some really strong clinical results, but we'd love to get any color there. Thanks guys.

Yes, so really happy with the momentum on those few deals we talked about in Q2 get closed in Q3. So we're very pleased about that so overall from a macro perspective, we've seen.

Yeah, so really happy with the momentum. Those few deals we talked about in Q2 get closed in Q3, so we're very pleased about that. So overall, from a natural perspective, we've seen kind of similar to what we said 90 days ago, not better, not worse, and that's basically a little bit of additional scrutiny that we saw 90 days ago, but nothing significantly different than that.

Kind of similar to what we said 90 days ago, not better not worse.

And that's basically a little bit of additional scrutiny that we saw 90 days ago, but nothing.

Significantly different from that.

Thanks, Brian .

Your next question comes from the line of Dylan Becker with William Blair. Your line is now open.

Thanks, Brent.

Yep, thanks Brian .

Your next question comes from the line of Dylan Becker with William Blair. Your line is now open.

Hey, guys. Thanks for taking the question maybe Peter to I think you highlighted some strength in ADC, let me spend a lot of time talking about the complexity of that clinical data management piece.

Hey, guys. Thanks for taking the question. Maybe, Peter, too, I think you highlighted some strength in ADC. We spent a lot of time talking about the complexity of that clinical data management piece and the opportunity to expand beyond just pure ADC. I know you guys have introduced a number of functional areas here, but can you give us a sense of how you're thinking about putting together that proverbial Rubik's Cube?

And the opportunity to expand beyond just Gary you guys have into.

<unk> introduced a number of functional areas here, but can you give us a sense of how youre thinking about putting together that I think you guys had a blog post Brexit the proverbial Rubik's cube around the sources and stakeholders there not just from an existing process perspective, but unlocking and addressing almost an entirely new set of workflows and capable capabilities.

around the sources and stakeholders there, not just from an existing process perspective, but unlocking and addressing almost an entirely new set of workflows and capabilities.

Yeah, so on the clinical.

Yeah, so in the clinical, it's right that those are two very significant wins in the corner. Two top 20s that selected our EDC. That's a very, very core application at the heart of the clinical data management.

Very significant wins in the quarter.

Yeah, so in the clinical, it's right that those are two very significant wins in the corner. Two top 20 that selected our EDC. That's a very, very core application that the heart of the clinical data management. And then there are more applications.

Two top 20 that selected our ADC, that's a very very core application that the heart of the clinical data management.

And there are more applications.

We are bringing out and have bought out our TSM randomization and trial supply management patient reported outcomes are our CDP product.

that we are bringing out and have brought out the RTSM randomization and trial supply management, patient reported outcomes, our CDB product.

So.

That's.

When you looked at clinical operations.

So, you know, that's.

US getting ETF in there early with a sign of very good things to come.

you know, when you look at clinical operations,

Us getting ETMF in there early was a sign of very good things to come.

And us getting EDC in at these large campaigns thats a sign of very good things to come in and the clinical data management and then you're right.

and us getting EDC in at these large companies, that's a sign of very good things to come in clinical data management. And then you're right, that will lead into a broader future for us in clinical, as we connect up the clinical research sites. And there's many, many applications we can make on top of this as we connect. So clinical I'm super excited about.

And that's will lead into broader future for us in clinical as we connect up the clinical research sites and Theres. Many many applications. We can make on top of this as we connect so clinical I'm Super excited about where in the very very early days of clinical, especially the clinical data management area.

We are in the very, very early days of clinical, especially the clinical data management area. That is helpful, thanks. Maybe from a hiring perspective, as we look at it, too, already added more headcount than any prior period here or any prior year. I guess, how should we think about investment? Obviously, a lot of new initiatives and that 2030 growth framework.

Got it.

That's helpful. Thanks, and then maybe from a from a hiring perspective at least as we look at it too.

Already added kind of more more head count in any prior period here any prior year I guess, how should we think about an estimate obviously a lot of new initiatives and kind of that 2000 22030 growth framework.

How should we be thinking about kind of the resource allocation.

And obviously the further pace of hiring number out here.

But how should we be thinking about kind of the resource allocation and obviously the further pace of hiring down the road here?

Yes, it's a great hiring environment people are looking for quality companies stable company is doing great work, where they can feel align to the values and do their best work.

Yeah, it's a great hiring environment. People are looking for quality companies, stable companies doing great work where they can feel aligned to the values and do their best work. This shiny penny of the crazy startup ideas is not so shiny anymore. So it's a great hiring environment. Will it really invest across all areas of the business? For all of us here, incur up to BOD Be V Festival

Shiny penny of the Crazy startup idea is not to shiny anymore. So.

It's a great hiring environment will it really invest across all areas of the business sales services, and especially product, but youre not going to see anything dramatic from Viva Youll see the <unk>.

The pace that we go out we really focus on the quality hiring we've offered to come in under our hiring targets.

But you're not going to see anything dramatic from Viva. You know, you'll see the measured pace that we go at. We really focus on the quality hiring. We've often come in under our hiring targets. And, you know, if this great environment continues, we hopefully we won't come in under our hiring targets anymore. So I'm really pleased about that. That's a leading indicator of.

If this great environment continues we hopefully we wont come in under our hiring targets anymore. So I'm really pleased about that that's a leading indicator of.

For me, but when we can hire great people.

Got it thanks guys.

For Viva when we can hire great people Got it. Thanks guys.

Your next question comes from the line of Anne Samuel with Jpmorgan. Your line is now open.

Your next question comes from the line of Anne Samuel with JP Morgan. Your line is now open.

Hi, Thanks for taking the question.

Hoping maybe you could speak a little bit to the rationale behind moving away from the Med Tech CRM, you know you're still fairly positively towards the Investor day. So just wondering maybe what shifted.

Hi, thanks for taking the question. I'm hoping maybe you could speak a little bit to the rationale behind moving away from the MedTech CRM. You know, you spoke fairly positively to it the investor day. So just wondering, you know, maybe what shifted.

Yes, and this is Peter.

Med Tech CRM and the pharma CRM they share a common foundation you have to do those things together so moving.

Yeah, and this is Peter. Medtech CRM and the Pharma CRM, they share a common foundation. You have to do those things together. So with moving Viva CRM to the Vault platform, we really had to prioritize Pharma CRM first, take care of our existing customers, get that base set up.

Veeva CRM to the vault platform, we really had to prioritize pharma CRM first.

Take care of our existing customers get that get that base setup and then yes med Tech CRM that may come later, but we needed to prioritize and sequence. Since these applications are tightly integrate interrelated.

And then yes, MedTech theorem that may come later, but we needed to prioritize and sequence since these applications are tightly interrelated.

That makes a lot of sense and then just if you had a lot of really nice outperformance on the operating income line in the third quarter, we held.

That makes a lot of sense. And then, just, you know, you had a lot of really nice hot performance on the operating income line in the third quarter, but you held onto the full-year guidance. So, I was just wondering, you know, is there any shift of expenses there or anything incremental in 4Q that we should be thinking about?

Hold on to the full year guidance. So just wondering is there any shift in expenses, there or anything incremental in <unk> that we should be thinking about.

Yes regarding Q4, it is always our seasonally a lower operating margin quarter.

Yeah, regarding Q4, it's always our seasonally lower operating margin quarter. Why is that? Service utilization with the holidays is always a factor as well as kind of a reset on benefits and payroll tax type items. So that's a big seasonal reduction you would see. And then we continue to invest for long-term growth. Those are the two factors, but nothing else unusual.

That service services utilization with the holidays is always a factor as well as kind of a reset on benefits and payroll tax type items. So that's that's a big seasonal reduction you would say and then from a continuing to invest for long term growth. Those are the two factors, but nothing else unusual.

Great. Thanks for the color.

You bet.

Your next question comes from the line of Craig heading back with Morgan Stanley . Your line is now open.

Great, thanks for the color.

You bet.

Your next question comes from the line of Craig Hettenbach with Morgan Stanley . Your line is now open.

Yes. Thank you I just following up on some of the macro commentary.

And any sense in terms of just what youre seeing on a number of add ons and then any tightening on that front and kind of quarter to quarter.

Yes, thank you. Just following up on some of the macro commentary, any sense in terms of just what you're seeing from the number of add-ons and any tightening on that front, kind of quarter to quarter.

Yes.

Yeah.

Pretty similar to what we've seen over the last couple of quarters I think.

The items are pretty similar to what we've seen over the last couple quarters. I think we were talking to you back in June , we highlighted a little bit of a slowdown in the SMB space, particularly the lower end, fewer expansions, not improving significantly or not worsening either. So, really haven't seen much of a change there.

We were talking to you back in June we highlighted a little bit of a slowdown in the in the SMB space, particularly at the lower end fewer expansions.

Not getting any.

Improving significantly are not worse, either so really haven't seen much of a change there.

Got it and then just a question on cross I guess, you called out is growing about 10% and clearly the broader advertising market has been under pressure, but that's an area of relative strength.

Got it. And then just a question on Cross-X. You called out is growing about 10%. And clearly the broader advertising market's been under pressure, but that's an area of relative strength. Just, you know, what you're seeing in that market and any sense of when that market could maybe start to reaccelerate again and any visibility into that.

What youre seeing in that market.

Any sense of when that market and maybe start to reaccelerate again and any visibility into that.

Yes, certainly the overall a little bit of caution in the advertising spend is too as far as when that would turn around or stay the same or get worse.

Yeah, certainly, overall, a little bit of caution in the advertising spend. As far as when that would turn around or stay the same or get worse, I really don't have a crystal ball on that. What our focus on the Cross-X is just increasing the value from the application. So increasing functionality, increased integration with our other CRM products.

We don't have a crystal ball on that.

What our focus on the cross section is just increasing the value from application so increasing functionality.

<unk> integration with our other <unk>.

Crem products CRM related products and moving to more multiyear agreements enterprise license agreements with customers to provide a baseline.

CRM related products and moving to more multi-year agreements, enterprise license agreements with customers to provide a baseline of revenue and stability and service for the customers.

Revenue in stability and service for the customers. So we're really excited about the classics business I think we have a clear clear roadmap and and that's going quite well.

So really excited about the CrossFit business. I think we have a clear roadmap and it's going quite well.

Got it thank you.

Your next question comes from the line of Gabriella borders with Goldman Sachs. Your line is now open.

Thank you.

Your next question comes from the line of Gabriella Borgers with Goldman Sachs.

Good afternoon. Thank you for Peter could you walk us through what that transition looks like for a customer to switch from CRM itself plus to CRM with Paul and more specifically is there a risk that they look to evaluate competitive products when they do that transition.

Your line is now open.

Good afternoon, thank you. For Peter, could you walk us through what the transition looks like for a customer to switch from CRM with Salesforce to CRM with Vault? And more specifically, is there a risk that they look to evaluate competitive products when they do that transition?

So what it looks like really where.

You could think of it.

So what it looks like really, you can think of it as moving the back end of the application, the back end platform, and we'll have migration tools that will bring the data across, including the customer's customizations, and still be able to use all their content that they've got, their multi-channel email.

Moving the back end of the application and the backend.

That form and we will have migration tools that will bring the data cross, including the customers customization.

And still be able to use all of their content that they've developed.

Their multichannel E mail.

Templates and we'll use the same front end applications such as on the such as on the iPad. So that's what it will look like will develop a lot of tooling the customer will have integrations to write things like that.

templates, and we'll use the same front-end applications, such as on the iPad. So that's what it'll look like. We'll develop a lot of tooling. The customer will have integrations to write, things like that. And in terms of competitive, that's always out there, right? It's always a competitive market, whether you're moving platforms or not, and you have to continue to mind your customer relationships, continue to add value.

And in terms of competitive out there right, it's always a competitive market, whether you're moving platforms or not and you have to continue to mind your customer relationships continue to add value and innovation.

So I don't really see anything different there.

And the main thing is we're re platforming the application Veeva CRM, we're not we're not rewriting it we're not introducing any kind of a new paradigm. So I feel comfortable that the vast majority of customers will will migrate over time.

And I guess the other thing is that the Veeva vault platform is a very mature application. The bulk of Viva is revenue is on the <unk>.

And I guess the other thing is that the Viva Vault platform is a very mature application. The bulk of Viva's revenue is on the Viva Vault application and that's where our customers actually have the majority of their Viva business for most of them is on the Viva Vault platform.

Vault applications, and Thats, where our customers actually have the majority of their Viva business for most of them is on the Veeva vault platform. So I think overall for customers. This is a positive simplify their landscape.

Thank you for the detailed follow up with Paul.

I think overall for customers this is a positive. It simplifies their landscape.

Last quarter, you talked about budget planning at your customers hitting full swing into the second half. So just looking for an update here. What are you hearing on commercial budget into 2020 train willingness to invest and specifically the response to the pricing increases is there any negative impact on your ability to cross sell because perhaps budget.

Thank you for the detail. The follow-up is for Paul. I believe last quarter you talked about budget planning at your customers, hitting full swing into the second half. So just looking for an update here, what are you hearing on commercial budgets into 2023 and willingness to invest? And specifically the response to the pricing increases. Is there any negative impact on your ability to cross-sell because perhaps budget is fixed? Yes of course that's true.

Next.

Yes, no no significant change on the budget side.

Our customers have gone through that planning process and we haven't we haven't really seen any pricing pressures when you think about the industry.

Yeah, no significant change on the budget side. Our customers have gone through that planning process and we haven't really seen any pricing pressures. When you think about the industry, particularly in the large enterprise, it's not as susceptible to some of these macroeconomic changes and we haven't seen any change there.

Large enterprise, they're not it's not as susceptible to some of these macroeconomic changes.

We haven't seen any change there.

You had a second question, which was around the fee inflation increase that we've had.

You had a second question which was around the inflation increase that we've had. By and large, we haven't seen any. It really has been pretty seamless with our customers. The reason is we built that. We have a long history of being a trusted partner.

By and large we haven't seen any.

It really has been pretty seamless with our customers.

And the reason is we felt that we could have a long history of being a trusted partner, we haven't historically had any license pricing increases to our customers I know this is a different environment.

We haven't historically had any license pricing increases. So our customers know this is a different environment and by and large it hasn't been an issue.

By and large it hasnt been an issue.

Thank you for that Vishal.

Your next question comes from the line of Joe <unk> with Baird. Your line is now open.

Thank you for the detail.

Your next question comes from the line of Jo Rooink with Baird. Your line

Hi, Greg Hi, everyone.

Just staying on the CRM conversation.

Great. Hi everyone.

In the past thank you.

Just staying on the CRM conversation, in the past I think you've acknowledged that typically customer conversations are separate and distinct between commercial and R&D orgs.

He acknowledged that typically customer conversations are separate and distinct between commercial and R&D orgs yet.

The shareholder letter I made some comments about how our common platform for both now make sense. So I'm wondering are customers approaching you differently thinking about procurement differently, our viva seeing new product opportunities that will benefit by uniting the two offerings.

Yet the shareholder letter made some comments about how a common platform for both now makes sense. So I'm wondering, are customers approaching you differently, thinking about procurement differently, or is Viva seeing new product opportunities that will benefit by uniting the two offerings?

So no change in customer behavior, Joe and I would say, yes, primarily our customers are concerned with the excellence of the application in their area.

So, no change in customer behavior, Joe, and I would say yes, primarily our customers are concerned with the excellence of the application in their area, but as they get more Viva applications and more Vault applications, they do look for synergies there. Synergies in they might create a Viva Vault center of excellence, that type of thing for efficient operations.

As they get more Viva applications and more about applications.

They do look for synergies there synergies and they might create a deeper vault center of excellence that type of thing for efficient operations or they may be auditing the vault platform and it's easier just to audit on the platform. So we see that there.

or they may be auditing the vault platform and it's easier just to audit one platform. So we see that there. And then the connectivity between the applications between R&D and commercial specifically between clinical, medical and commercial. That's something we do see opportunity there and I think Viva will help drive that. Some customers are asking.

And then the connectivity between the applications between R&D and commercial specifically between clinical medical and commercial that's something we do see.

Opportunity, there and I think Viva will help drive that some customers are asking.

For that but I think mainly we are going to be leading the way there and you really haven't had great solutions for that connectivity and I think will bring innovation, there and connectivity that will create the market there.

for that, but I think mainly we're going to be leading the way there. And we really haven't had great solutions for that connectivity, and I think we'll bring innovation there and connectivity that will create the market there.

Okay. That's great and then one question on the numbers.

Okay, that's great. And then one question on the numbers and specifically just on 4Q billings, I think the outlook last quarter implied something like 927 million and now the guidance is 909 million. Brent is that just the deal timing that's influencing the bulk of the new guidance?

And specifically just on.

<unk> Bill language.

The outlook last quarter implied.

Like $927 million and now that guidance of $909 million Brent is that just the.

The deal timing, that's influencing the bulk of the new guidance out we're kind of looking at an annual impact in one number and the quarterly impact in the other.

Yes, I mean part of it Joe Youre right that there always is some quarters Asian so.

That's why we always say kind of look at it on a full year basis Q3 benefited about $6 million of just more annual builders that would've otherwise likely build in Q4. So that's part of the equation.

But it's a little bit of timing of renewals and those annual biller. So there's nothing fundamental to the business.

of the equation, but it's just a little bit of timing of renewals in those annual billers. So there's nothing fundamental to the business. We're very, very happy with the momentum, as Peter mentioned, around the clinical space and the EDC space. So really good business momentum and no underlying business concerns around the billings.

We're very very happy with the momentum as Peter mentioned around the clinical space.

EDC space, So really good business momentum and no no underlying business concerns around the billings.

Okay, great. Thank you very much.

Your next question comes from the line of Ryan Macdonald with Needham <unk> Company. Your line is now open.

Okay, great. Thank you very much.

Your next question comes from the line of Ryan McDonald with Needham & Company. Your next question comes from the line of Ryan McDonald with Needham & Company.

Alright, Thanks for taking my questions, maybe first one for Peter you talked about in the prepared remarks about the impact of sort of having the first milestone vault safety customer live now or just be curious given that they spoke at the R&D summit, what youre seeing in terms of.

All right, thanks for taking my questions. Maybe first one for Peter. You know, you talked about in the prepared remarks about the impact of sort of having the first milestone Vault Safety customer live now. I would just be curious, you know, given that they spoke at the R&D Summit, you know, what you're seeing in terms of, you know, increased customer conversations or pipeline development sort of off of that event and the go live here. Two weeks ago, for the COVID advent inc.

<unk> comp customer conversations or pipeline development sort of off of that off of that event and they go live here.

Excellent question there.

I guess to step back.

We have a safety.

Excellent question there.

Safety application, that's very complex applications.

I guess to step back, we have a safety application that's a very complex application.

Case processing of what's called a adverse event somebody takes medicine and they either have.

Case processing of what's called adverse events. Somebody takes a medicine and they either have a bad reaction or they think they have a bad reaction. And that has to be classified and routed and recorded to health authorities, etc., around the world. So it's a very complex application. We're really the first company able to do that as a cloud-native application. That means just like we do everything else.

A bad reaction or they think they have a bad reaction and then it has to be classified in routed in.

Recorded to health authorities et cetera around the world. So it's a very complex application, where really the first company able to do that as a cloud native application that means just like we do everything else Theres. One version of the code and all customers run it. So thats a breakthrough our customers are used to on premise applications.

There's one version of the code and all customers run it. So that's a breakthrough. Our customers are used to on-premise applications. They have to upgrade lots of issues.

To upgrade a lot of issues.

Now that this customer is live.

It's a top 21 of the larger top 20 customers.

now that this customer is live, this, you know, it's a top 20, one of the larger top 20 customers.

Now there's proof that that works and.

And I think.

Now there is proof that that works.

I wouldn't say all the way, but mainly customers are thinking.

We'll go with fever for safety.

You know, I wouldn't say all the way but mainly customers are thinking I probably will go with Viva for safety. Then the question is when? Is it next year? Is it three years from now, five years from now, seven years from now? So that's really the significance of it. Now we have a course that works never done. I'll never be satisfied with our safety application. I always have to get better and better and better.

The question is when is it next year three years from now five years from now seven years from now so that's really the significant seven.

Now we have of course works never done I will never be satisfied with our safety applications and it always has to get better and better and better.

But it was a very significant milestone, let's go lives for the industry and for Veeva.

but it was a very significant milestone in scroll life for the industry and for Viva.

And also just the other thing I would add the speed at that implementation happened I won't quote the exact numbers, Dave was probably about half the time that most customers would have expected that it would have taken so that was also seriously noticed by by the industry.

And also, just the other thing I would add, the speed that that implementation happened, I won't quote the exact number of days, was probably about half the time that most customers would have expected that it would have taken. So that was also seriously noticed by the industry.

That's a pretty impressive implementation time and go lifetime that's helpful color.

That's some pretty impressive implementation time in GoLifetime. That's helpful color. Can you tell that I'm enthused about that? Just a bit, just a bit. Maybe my second question is around the Merck strategic relationship or partnership there. I'm curious, and this sort of relates to the CRM strategy here.

Can you can you tell that I'm enthused about that.

Just a bit just a bit.

And maybe my second question is around the Merck.

Our strategic relationship or a partnership there I'm curious.

This sort of relates to the CRM strategy here, but in a strategic relationship like that I'd be curious within your discussions how important it was to Merck to have sort of this unified platform of everything being on fall in a type of long term 10 year strategic relationship there and how much that sort of.

Guided to the strategic decision, making here on the CRM change. Thanks.

Yes in terms of Merck I won't get into any detailed specifically there on Merck I would say that in the strategic agreement of that nature generally we're not we're not talking at the platform level there.

change. Thanks.

In terms of Merck, I won't get into any details specifically there on Merck. I would say that in a strategic agreement of that nature, generally we're not talking at the platform level there. We're more talking about operating model, how we operate together, how we, the governance model. And it's only done based on trust over many years when they see repeated patterns of,

We're more talking about.

Operating model, how we operate together how we did.

Governance model.

It's only done based on trust over many years when they see repeated patterns of of a customer success orientation of a strategic partnership or orientation.

And then it's really the governance model that we put in so it would be at a higher level versus individual products or platforms.

Thanks for the color.

Thank you.

Your next question comes from the line of Tyler Radke with Citi. Your line is now open.

Yes, Thank you for taking the question.

Radka with Citi. Your line is now open.

Wanted to ask you just you talked about some large.

Yes, thank you for taking the question.

Vault EDC customers I believe that you signed in the November timeframe could you just give a little bit of color on that is that we're there.

I wanted to ask you, you talked about some large vault EDC customers, I believe that you signed in the November timeframe. Could you just give a little bit of color on that? Were those kind of some displacements of kind of the main, you know, incoming in the market and just give us a sense on the size of these contracts and kind of the opportunity in those accounts? Thanks. Thanks.

Those kind of stuff.

Displacements of kind of the main and comment on the market and just give us a sense on the size of these contracts and kind of the opportunity in those accounts.

Alright, yes.

Where these are wins with two top 20 customers.

Yeah, these were wins with the top 20 customers.

And they were yes, they have to be displacing one of the market leaders because people do need EDC application and so in both cases, we are displacing one of the.

And they were yes have to be displacing one of the market leaders because people do need an EDC application and so in both cases were displacing one of the top two market leaders there other than Viva.

Top two market leaders there other than Viva.

And then in terms of the deal sizes I won't specifically say in that area, but EDC is one of our larger applications. So it would be one of our these are larger deals either because there is certainly some of our largest deals now these will ramp over multiple years, because with the EDC application you start.

And then in terms of the deal sizes, I won't specifically say in that area, but EDC is one of our larger applications. So it would be one of our, you know, these are larger deals. These are certainly some of our largest deals. Now these will ramp over multiple years because with the EDC application, you start study by study by study. So it's a commitment for a long term approach.

Study by study by study so it's a commitment for our long term approach, but the revenue ramps very slowly actually slower than most of our applications.

The revenue ramps very slowly, actually slower than most of our applications. That is the way that goes. Right now our Hyperventilating

That's the way that's the way that goes so right now our.

Yes.

<unk> faster with EDC than I would've thought if you would have asked me in 2000 and the start of 2020 would we be where we are today with EDC.

We're progressing faster with EDC than I would have thought. If you would have asked me in the start of 2020, would we be where we are today with EDC, I probably wouldn't have been as bullish as what's actually happened.

We wouldn't have been as bullish as what's actually happened. So our focus is going to be extremely on the customer success. There because the EDC also is that it.

So our focus is going to be extremely on the customer success there because the EDC also is the

First part of clinical data management so.

Yeah.

That's what we're focused on we're really happy with it and we're gonna be laser focused on having implementation safety outstanding and improving our product through the feedback of these of these large customers.

It's the first part of clinical data management.

That's what we're focused on. We're really happy with it and we're going to be laser focused on having implementations just be outstanding and improving our product through the feedback of these large customers.

We have to do a lot of things there right customer success.

Staffing and services.

You have to do a lot of things there, right? Customer success.

It's great work to do but we've got to get better all the time.

Staffing and services, it's great work to do, but we got to get better all the time.

Yeah, that's great to hear and maybe on compass, turning turning to that it sounded like you.

Yeah, that's great to hear. Maybe on Compass, turning to that, it sounded like you made some comments around continuing to optimize the approach there. Could you just give us an update on how that's tracking relative to plan and when you're expecting that revenue ramp and the timing of...

You made some comments around.

Continuing to optimize the approach there could you just give us an update on how thats tracking relative to plan and.

When you're expecting that revenue ramp and the timing of.

When do we start to see that in the numbers. Thank you.

Yeah at Compass.

when we start to see that in the numbers. Thank you.

That's certainly a marathon that tough market have a very entrenched players there that has some question of business practices.

Yeah, at Compass that's certainly a marathon, that's a tough market. You have a very entrenched player there that has some questionable business practices that make it hard. We're happy with our progress on the product and we have a smallish set of early adopters. I won't go into the specific count of customers.

Hard work.

We're happy with our progress on the product and we have a smallish set of early adopters I won't go into specific count of customers.

As to as to when we really start to generate momentum in the revenue.

As to when we really start to generate momentum in the revenue, it's going to be wild. It's not going to be next year. It's a very long-term play. I'm confident in our position in the market and our product strategy. I'm confident that the market needs competition. But that one's going to be a marathon and you have to stay tuned for...

It's going to be a while it's not going to be it's not going to be next year. That's a very long term play.

I am confident in our position in the market and our product strategy I'm confident that the market needs competition.

That one is going to be a marathon and you just have to stay tuned for for milestones. That's the things about great milestones you don't actually know when they are coming.

for milestones. That is the thing about great milestones. You don't actually know when they are coming. We will let you know when they get here.

But we'll let you know when they get here.

Thank you.

Your next question comes from the line of Stephanie Davis with SBB Securities. Your line is now open.

Thank you. Thank you.

Your next question comes from the line of Stephanie Davis with SVB Securities.

Hey, guys. Thanks for taking my question I know, we've beaten to death about the.

Your line is now open.

Hey guys, thanks for taking my question. I know we've beaten this to death about the lift from moving off the Salesforce platform, but I thought I'd add to it.

I'm living off the sales at Westwood, one by tight I'd do it.

Could you walk us through the Lyft associated and moving off of it is this hiring platform engineers is as resources that you already have or should we think of this as effectively built out since you've already had instances like med tech built on the vault platform.

Could you walk us through the lift associated moving off of it? Is this hiring platform engineers? Is this resources that you already have? Or should we think of this as effectively built out since you already had instances of MedTech built on the Vault platform?

Yes, Stephanie I'll take that one.

The main thing to know is that when we build applications on Bob we're highly efficient highly efficient on that so there's a lot of work.

Stephanie, I will take that one. The main thing to know is that when we build applications on Vault, we are highly efficient on that. There is a lot of work that has gone into the platform. We don't see really material incremental investment. Then we are reusing much of the parts of the CRM application. We are just porting over the back end. For example, we have a very robust-

That has gone into the platform. So we don't see really material incremental investment and then we are reusing much of the parts of the CRM application, where just porting over the back end. So for example, we have a very robust iPad client for Veeva CRM. It has all types of functionality into it.

iPad client for Viva CRM. It has all types of functionality into it. We're not going to rewrite that application at all. So that's why...

We're not going to rewrite that.

Application at all so that's why.

The investment is just it's not material to the rest of Viva, it's because of the leverage both in the existing application footprint template in code and then the leverage we get from the vault platform.

The investment is just, it's not material to the rest of Viva. It's because of the leverage both in the existing application footprint, template and code, and then the leverage we get from the Vault platform. Asking this in kind of a different way from more of a user perspective, are you taking more of an originalist approach and embracing the same look and feel as you move forward?

Yeah.

Asking this in kind of a different way from where the user perspective are you taking more of a regionalized approach embracing the same look and feel as we move to the new platform or are there any opportunities in between prophylactic switch to either improve the CRM platform in your <unk>.

<unk> or offering.

Yeah excellent question in general we're going to re platform. The backend. So we're not we're not going to change up the user experience or do matic to dramatic things at that time now having said that we have an existing roadmap for CRM. That's been we've really been executing on so our customers have a lot of new <unk>.

at that time. Now having said that, we have an existing roadmap for CRM that's been, we've really been executing on, so our customers have a lot of new functionality.

<unk>.

For example, engage new features that we have in either engage engage connect that allows compliant messaging between doctors and sales reps. That's just starting to get adopted now.

For example, engage, new features that we have in engage, engage connect that allows compliant messaging between doctors and sales reps. It's just starting to get adopted now because that's a thing that needs compliance oversight.

Because that's a.

The thing that needs compliance oversight.

That's going to continue right into CRM. So.

I would think of it as well.

That's going to continue right into all TRM. So I would think of it as...

Platforming, the backend and REIT and reinvigorating the front end and the functionality.

re-platforming the back end and reinvigorating the front end and the functionality, that just keeps going on. That's been going on for a while, and that will continue on.

It just keeps going on that's been going on for a while now that will continue on.

Plants also about speed of thought roadmap okay.

Thank you.

That's awesome. Let's speed up that road map. Thanks guys. All right. Thank you.

Your next question comes from the line of Brent <unk> with Piper Sandler Your line is now open.

Your next question comes from the line of Brent Bracelyn with Piper Sandler. Your line is now open.

Thank you for taking the question here.

You've lived through a few economic cycles.

Thank you for taking the question here. Peter, you've lived through a few economic cycles. I'd be curious to get your view around what aspect of the pharma medtech industry is a little unique that maybe investors don't appreciate. We're seeing obviously pretty material slowdown in growth profiles of some of the largest cloud software vendors.

I'd be curious to get your view around.

What aspect of the pharma Med Tech industry is a little unique that maybe investors don't appreciate we're seeing obviously pretty near a material slowdown in growth profiles of some of the largest cloud software vendors and so.

What parts of the market you serve maybe are under appreciate it.

what parts of the market you serve maybe are underappreciated levers that allow you to kind of sustain durable growth? I mean is it a trusted partner relationship? Is it having these multi-year roadmaps that they're going to continue to execute and expand products? Is it just the fact that it's tied to really large, strong vendors? Just trying to think through

<unk> that allow you to kind of sustain durable growth I mean is it a is it a trusted partner relationship is it.

Having these multiyear roadmaps that theyre going to continue to execute and expand products is it just the fact that it's tied to really large you know strong vendors just trying to think through.

Some of the slowdown we're seeing in other vendors in the cloud space and perhaps.

A bit of a different picture here from your from your lens.

some of the slowdown we're seeing in other vendors in the cloud space and perhaps a bit of a different picture here from your lens. Thanks.

and the slowdown we're seeing in other vendors in the cloud space and perhaps a bit of a different picture here from your lens. Thanks. Yeah, there's multiple ways.

Yeah.

There is multiple ways.

Two to think about that one I will start with.

So last year and the year before it has been quite unusual right we haven't seen.

to think about that one, I will start with, last year and the year before, it's been quite unusual, right? We haven't seen the interest rates raised this far or this high since the early 80s. And the same with inflation, gone up this high and raised this fast, not since the early 80s. And a war in Europe like this, I haven't seen in my lifetime. So these are, you know,

think about that one all I will start with. You know, last year and the year before, it's been quite unusual, right? We haven't seen the interest rates raised this far or this high since the early 80s. And the same with inflation, gone up this high and raised this fast, not since the early 80s. And a war in Europe like this, you know, I haven't seen in my lifetime. So these are, you know, unusual times. Therefore, day should be whole.

Interest rates raise this far or this high since the early eighties and at the same with inflation gone up. This this high in this fast.

Since the early eighties and a war in Europe like this you know I haven't seen in my lifetime. So these are.

<unk>.

Unusual times.

Having said that.

What makes Viva the factors that are going in Viva is paid.

Having said that, what makes Viva, the factors that are going in Viva's favor, first I would say our customer feeling, our customer success feeling and track record of success that we built up over time, that is a tremendous insulator in downturns, in downtimes. Also the nature of the industry, the industry when it's not recession proof, but very recession resistant. This is not like us.

First I would say our customer feeling our customer success, feeling and track record of success that we've built up over time that is the that is a tremendous insulator.

<unk> term and downtime also the nature of the industry the industry when it's not recession proof, but very recession resistant this is not like airlines or hotels or.

Luxury items things like that restaurant.

People need their medicine in good times and bad Medicine is a critical part of health care without medicines healthcare costs go up et cetera. So.

The spending doesn't change too much the segment, where it is affected a little bit is in smaller private companies.

If the funding environment goes down they can't get as much funding they have to be more conservative.

With their expansions and then I would say the last thing is the type of products, we do their mission critical systems of record.

environment goes down. They can't get as much funding. They have to be more conservative with their expansions. And then I would say the last thing is the type of products we do. They're mission critical systems of record. Good times are bad. You need your clinical trial management system just like you need your financial system and you need your ERP system. What you may not need is the...

Good times or bad you need your clinical trial management system, just Mike you need your financial system.

And you need your ERP system, what you may not need is the speculative piece of technology or add on on top of that Thats, maybe what you don't need and we focus really on system of record. So we have that going in.

speculative piece of technology or add-on on the top of that. That's maybe what you don't need. And we focus really on system of records. So we have that going.

In favor for us So I think a lot of things going in our favor for stability, we do best in times of relative stability when things go booming up fast maybe that's not actually the best for Veeva and when things downturn a bit maybe that's not all the best for Viva either we operate the best when things are pretty stable.

in favor for us. So I think a lot of things going in our favor for stability. We do best in times of relative stability. When things go booming up fast, maybe that's not actually the best for Viva. And when things downturn a bit, maybe that's not all the best for Viva either. We operate the best when things are pretty stable.

Very helpful color. Thank you.

Thank you.

Very helpful, Connor. Thank you.

Your next question comes from the line of Ritchie Giant childhood Maria with RBC capital markets. Your line is now open.

Your next question comes from the line of Rishi Jalluriya with RBC Capital Markets. Your line is now open. Your line is now open.

Wonderful. Thanks, so much for taking my questions I wanted to ask one CRM question and one non CRM question to balance things out.

Wonderful. Thanks so much for taking my questions. I wanted to ask one CRM question and one non-CRM question to balance things out. So, on the CRM side, maybe I want to ask a little bit more explicitly, right? So, the non-compete goes away in 2025. Salesforce has obviously been vocal about wanting to get deeper in…

So on the CRM side.

Maybe I want to ask a little bit more explicitly right. So the noncompete goes away in 2025.

Salesforce has obviously been vocal about wanting to get deeper in vertical software, they're obviously trying to find more avenues for growth now that the market continues to get saturated away. How should we think about the potential for overtime salesforce to actually become a competitor and start selling their solutions directly into life Sciences.

in vertical software. They are obviously trying to find more avenues for growth now that the market continues to get saturated away. How should we think about the potential for over time, Salesforce to actually become a competitor and start selling their solutions directly into life sciences whether it's the out of the box functionality, or actually verticalizing the solution themselves. Then I've got to follow up.

Whether it's the out of the box functionality or actually Verticalizing. The solutions themselves and then I've got a follow up.

Yeah, Hey, Rishi this is Paul.

So yes, the way to first the way to think about the <unk>.

Yeah, hey Rishi, this is Paul. So yeah, the way to first, the way to think about the, our partnership with Salesforce, we have a very long history of a really great partnership with Salesforce and the agreement goes through 2025. And through 2025, what that means is we are life, we are Salesforce's preferred partner for the life sciences industry. So I don't expect that to change at all between, certainly between now and then.

On the ship with Salesforce, so very long history of a really great partnership with Salesforce and the agreement goes through 2025 and through 2025, what that means is we are like we are salesforce as preferred partner for the life science industry. So I don't expect that to change at all between certainly between now and then.

We can't comment on where Salesforce decides to invest and how they decide to focus after that.

You know, we can't comment on you know, where Salesforce decides to invest and how they decide to focus after that

So I don't see I don't see any change there we.

We do know that the life sciences space as it's a highly regulated very specialized industry. It takes a lot of time to get it right. It's a complex space.

So I don't see any change there. You know, we do know that you know, the life sciences space is it's a highly Regulated very specialized industry. It takes a lot of time to get it right. It's a complex space We're the market leader here and we expect to make you know The transition super easy for customers and continue to innovate here so we can only focus on on our course and not on what others do

We're the market leader here and we expect to make the transition Super easy for customers and continue to innovate here. So we can only focus on on our horse and not on what others do.

Okay, that's totally fair.

Peter on the prepared remarks, you talked about maybe some of the progress that you're making on the CDMA side, which <unk> I was wondering if you can expand on that what youre seeing out of them and maybe has there been any pushback from CRM owes to adopting the <unk> solution, so far or what needs to happen for that to become a significant part of that business. Thanks.

Okay, that's totally fair. And then Peter, in the prepared remarks, you talked about maybe some of the progress that you're making on the CDMS side with CROs. I was wondering if you could expand on that, what you're seeing out of them, and maybe has there been any pushback from CROs to adopting the CDMS solution so far? What needs to happen for that to become a significant part of that business? Thanks.

Yes.

We just continued interest and momentum in <unk> now, they're not they're going to be somewhat hesitant somewhat not hesitant, but measured in their response.

Yeah, CROs, we just continued interest and momentum in CROs. Now, they're going to be somewhat hesitant, somewhat not hesitant, but measured in their response. They have their policies and procedures that are set up the way they do things with their existing vendors. So change happens a little bit slowly there, but what is causing the momentum is more.

Have their policies and procedures that are set up the way they do things with their existing vendors. So change happens a little a little bit slowly there, but what is causing the momentum it's more sponsors asking about Viva more sponsors asking about Eva and then.

sponsors asking about Viva, more sponsors asking about Viva and then

Some of the CRO is seeing proof that it's actually more efficient to operate with Viva. So I think it's just a slow gradual change.

some of the CROs seeing proof in that it's actually more efficient to operate with Viva. So I think it's just a slow gradual change.

The Crows in general will tend to use the market leading technology I think Viva is on its way to being the market, leading technology and the CRM will come along with that.

The CROs in general will tend to use the market-leading technology.

I think Viva is on its way to being the market leading technology and the CROs will come along with that.

Got it really helpful. Thank you so much.

Thank you.

Got it. Really helpful. Pearce Engle

Your next question comes from the line of Jack Wallace with Guggenheim Securities. Your line is now open.

Thank you. Your next question comes from the line of Jack Wallace with Guggenheim Security. Your line is now open.

Thank you for taking my question.

One more on the CRM.

Thank you for taking my question. One more on the CRM, the sales force. Just trying to think about why now to make the change in re-platforming to vault. I think I understand the reasons why to switch, but why now, why not before the last contract with signing and whether to make the moving move, waw andsl to out or take a hold of theash Button Small Free fasting disrupted shout out to COVID-19, xD Thats theODM Yea!

Salesforce just trying to think about kind of why why now to make the change and re platforming to default I think I understand the reasons why the switch.

Why now why not before the last contract signing.

And.

Were there inflationary pressures.

Going forward that you wanted to avoid because of cost savings better.

inflationary pressures going forward that you wanted to avoid and figured the cost savings was better and maybe a better platform in-house. Just thinking about the timing around the change in platforms. Thank you.

Maybe a better platform in house.

Thinking about the timing around the.

The change in platforms. Thank you.

In terms of the timing first and so it's always good to make changes when things are good. The application is strong the customer feeling strong so thats a good time to make change.

In terms of the timing, first it's always good to make changes when things are good. You know, the application is strong, the customer feeling is strong, so that's a good time to make a change. Also if you look at why now versus five years ago or four years ago, the Vault platform is very mature now, very robust now. Again we have safety going and we have CVMS going.

Also if you look at why now versus five years ago or four years ago. The vault platform is very mature now very robust now and we have safety going in we have Cvs going.

Maybe four years ago, maybe the vault platform.

Maybe you couldn't have done that because maybe it wasn't quite mature enough and also it had safety and <unk> really stressing it out about four years ago. So I think that would have been too early.

Maybe four years ago, maybe the Vault platform, maybe it couldn't have done that because maybe it wasn't quite mature enough and also it had safety and CDMS really stressing it out about four years ago. So I think that would have been too early. And why now is, you know, why not wait? I guess that's the other question. It's the right time. It gives our customers plenty of time to move, plenty of heads up. Vault platform is clearly ready.

And why now is why not wait I guess, that's the other question. It's the right time it gives our customers plenty of time to.

<unk> plenty of heads up vault platform is clearly ready.

And at this time, we can have a better customer experience and a better application.

And it's just time. We can have a better customer experience and a better application.

The bulk of our application revenue now as you saw from the analyst day is on the vault platform and the tone that percentage is only increasing so it's time to bring CRM in the folds it'll be better for Veeva and our customers just the right time.

The bulk of our application revenue now, as you saw from the analyst day, is on the Vault platform, and that percentage is only increasing. So it's time to bring CRM into the fold. It'll be better for Viva and our customers. It's just the right timing.

Got it that's helpful and then Brent this one's for you.

The R&D left it sounds like that's ongoing in.

That's helpful and then Brent this one's for you. The R&D lift sounds like that's been ongoing and will continue through next year and probably 2025 to support the migration. Just thinking about the context of that span relative to the 25 targets, I see next year is going to be a little bit of an odd year with the revenue cadence of the TFC changes but...

We'll continue through next year and probably 25.

The migration.

Just thinking about the context of that spend relative to the 25 targets, let's see next year is going to be.

We'll have an odd year with revenue, Canada, TFC changes, but.

Thinking about the percentage of revenue.

Your targets there in 17% to 18% still a good target for the 25 period.

Thinking about the percentage revenue targets there, 17 to 18% still a good target for the 25 period.

So, yes, we're not going to not going to provide future guidance right now, but we're happy with the momentum and the execution as Peter mentioned growing at 18% and we have our 2025 targets out there we're tracking about a year ahead and remember that's a run rate target.

So, yeah, we're not going to provide future guidance right now, but we're happy with the momentum and the execution, as Peter mentioned, growing at 18 percent. And we have our 2025 targets out there. We're tracking about a year ahead. And remember, that's a run rate target. So we're on track for that about a year ahead. And we're pleased with the broad portfolio we have to execute against. Such that we can continue to be making progress on what we know to Sorry people will listen and understand. We get these targets fastest. We want to logo process the modules in which to secure the for redo our thinking. We asked Peter to vehicle at three. He's talking to Getr all digital metrics today. He was blowing in back to head of What prepare it for in community really transplant the

So we're on track for that about a year ahead, and we're pleased with the broad portfolio, we have to execute against.

Got you. Thank you.

Sure.

Your next question comes again from the line of Ken Wong with Oppenheimer.

Got you. Thank you.

Your next question comes again from the line of Ken Wong with Oppenheimer.

Your line is now open.

Thanks, a lot guys, yes lots of stuffs been into my head right now.

Your line is now open.

So maybe just back on the.

Great, thanks a lot guys. Yeah, just a lot of stuff spinning in my head right now. So maybe just back on the Vault CRM, would just love a sense of like any thoughts on how this could potentially impact pricing. Would that possibly change? And then second, just one for Brent on the impact of kind of the TFC that you called out in Investor Day. Is that something that should...

The vault CRM would just love a sense of like any thoughts on how this could potentially impact pricing would that possibly change.

And then second just one for Brent on on the impact of kind of the TFC that you called out at Investor Day is that is that something that should hit at the start of the year for fiscal 'twenty four what's the right way to think about when we should start rolling that impact in.

Hey, Ken this is Paul.

I'll take the question on pricing so the way to think about it is the licensing model and the pricing will all stay the same and all of the same add ons that we have will also be available with volte CRM. So nothing really changes there it'll be pretty seamless and easy for our customers.

So nothing really changes there. It'll be pretty seamless and easy for our customers.

And then on the termination for convenience can so yes, the $60 million of this effective February one going forward and how you should think about that is not.

And then on the termination for convenience, can so yes the $60 million of this effective of February 1 going forward and how you should think about that is about 60% of that we expect to have impact Q1 of next year and with the balance of that kind of diminishing over the balance of the year. And one other point there is it's the vast majority will be on the R&D solution side of the business.

About 60% of that we expect to have impact Q1 of next year and with the balance of that kind of diminishing over the balance of the year.

One other point there is the vast majority will be on the R&D solutions side of the business. So it's going well, we're working with customers and that we're on track.

Okay perfect. Thanks, a lot for the clarity guys.

Yes, Thanks, Ken.

Your next question comes from the line of Brad Sills with Bank of America. Your line is now open.

Oh, great. Thanks, so much.

Wanted to ask about the new hires you mentioned 483, new hires this quarter.

Just curious where are the areas, where you are focusing on new hires.

the new hires you mentioned 483 new hires this quarter just curious where are the areas where you're focusing on new hires you know from a product standpoint and R&D versus sales and marketing please thank you

From a product standpoint.

R&D versus sales and marketing please thank you.

Yes, I believe that was 483 net net additions in the quarter.

I believe that was 483 net additions in the quarter. It's really broad-based. It is true. If you look at our account executives, our account partners, it is there. It is in our engineering, our product management, our services team, our support team. I think the area where the growth is a bit lower is in the G&A. We have a pretty efficient...

It's it's really broad based.

It.

It is true right. If you look at our account executives are account partners there.

And our engineering or product management, our services team.

Our support team.

Do you think.

Area, where the growth is a bit lower is in the DNA, we have a pretty efficient model there.

It's customer facing and product facing people is where the growth is.

Thanks, Peter one more if I may please outside.

Outside life Sciences verticals.

You've talked about a whole lot here at the analyst day and here just any update on where you are with those verticals and could that be an increasing focus going forward or is you're still very much in that kind of early reference selling approach.

an increasing focus going forward or you're still very much in that kind of early reference installing approach.

Yes.

Our main focus is in the pharma and biotech that's where our product portfolio is the broadest that's where we have the bulk of our revenue.

Yeah, our main focus is in pharma and biotech. That's where our product portfolio is the broadest. That's where we have the bulk of our revenue. We're doing well in the consumer product series. I think we just passed 100 customers, which is sort of a milestone I noticed on the sheet there. So, it continues to grow and the customer.

Doing well in the consumer products area and so I think we just passed.

Hundred customers, which is a sort of a milestone I noticed on the cheap there. So it continues to grow.

Customer reference model is pretty strong there our product footprint is smaller in that segment and med Tech is growing well as well the med Tech R&D side. It's just the biosciences is bigger for us and our product footprint is broader.

reference model is pretty strong there. Our product footprint is just smaller in that segment. And MedTech is growing well as well, the MedTech R&D side. It's just the life sciences is bigger for us and our product footprint is broader.

Thanks Peter.

Okay.

As a reminder, if you would like to ask a question press star followed by the number one on your telephone keypad.

Thanks Peter.

As a reminder, if you would like to ask a question, press star followed by the number one on your telephone keypad.

Your next question comes from socket <unk> with Barclays. Your line is now open.

Your next question comes from Saket Kalia with Barclays. Your line is now open.

Hey, guys. Thanks for thanks for fitting me in here.

I joined the call late so apologies if some of these questions were asked.

Hey guys, thanks for fitting me in here. I joined the call late, so apologies if some of these questions were asked. But maybe I will start with the Merck deal. Congrats on that by the way. It feels like one of those all-in Viva deals that we were talking about at the beginning of this fiscal year. I guess the question is how is the pipeline of those types of opportunities?

But maybe maybe I'll start with the Merck deal congrats on that by the way.

Feels like one of those all in Viva deals that we were talking about at the beginning of this fiscal year. I guess the question is how is the pipeline of those types of opportunities I mean clearly not.

To the extent of Merck right, but these types of all in consolidation deals can you just talk about that pipeline and how youre thinking about it.

I mean clearly not to the extent of Merck, but these types of all-in consolidation deals, can you just talk about that pipeline and how you're thinking about it?

Yeah, I'll take that one so merck.

Not a deal, but a strategic partnership for over the long term.

I will take that one. Merck was not a deal but a strategic partnership over the long term. We have strategic partnerships with many customers, none quite to the level or structure that we achieved with Merck.

We have strategic partnerships with many customers not quite to the level of our structure that that we that we achieved with Merck.

We may get some more of those but those are there is none of those I can tell there is none of those imminent right now, but we may get some more of those over time and consistent way to formalize our strategic partnership.

We may get some more of those, but there's none of those imminent right now. But we may get some more of those over time. And it's just a way to formalize our strategic partnership. Those will happen when they happen. You shouldn't think of them as deals or product bundles. They're really partnership agreements.

And they'll happen those will happen when they happen.

Shouldn't think of them as deals or product bundles that really.

Partnership agreements.

Merck's case it was so they could make it easier to evaluate are consumed and operate.

So that in Merc's case it was so they it made it easier to evaluate a consume and operate

And purchase the Viva products, just make it simpler for everybody. The idea is hey, we are going with Viva when we need to make change and Viva has that product we go with fever.

and purchase the Viva products. Just make it simpler for everybody. The idea is, hey, we're going with Viva. When we need to make change and Viva has a product, we go with Viva. That's just what we do. It makes it very efficient and pleasurable to work in an environment like that.

That's what we do and it makes it very efficient and pleasure to work in an environment like that.

Got it got it that makes sense.

Maybe I'll start the next next question to Paul.

Got it, got it. That makes sense. Maybe I will direct the next question to Paul. I understand that the CRM might have been beat to death, but maybe the question I have here is with the switch in platform, is there any sort of joint IP or anything that will go away? Or is there anything that of course, the timeframe for going away I understand is very long.

Andrew I understand the CRM might've has been beaten to death, but maybe maybe the question I have here is with the switching platform is there any sort of joint IP or anything that will go away or is there anything that and of course the timeframe for building the way I understand is very long, but just thinking about this is there anything that will change with the look in.

Feel with vault is the backend I'm just curious whether the customer will see anything different with the change in platform.

Just thinking about this, is there anything that will change with the look and feel with Volt as the back end? I'm just curious whether the customer will see anything different with the change in platform.

Yes, so on the first one with regards to Japan.

It's pretty clear, where there's IP and the platform. That's that is what salesforce has when there's ITV in the application and amounts Viva. So if there's a pretty clear alignment. So I wouldn't think about it as kind of anything kind of joint or going away that's combined.

Yeah, so on the first one with regards to joint IP, it's pretty clear where there's IP in the platform, that is what Salesforce has, and there's IP in the application, and that's Vivo. So there's a pretty clear line there. So I wouldn't think about it as kind of anything that's joint or going away that's combined. Regarding change in look and feel, part of our strategy is to migrate just the backend and to keep the front end.

Regarding change and look and feel a part of our strategy is to is to migrate just the backend and the keep the front end as similar as possible so that will.

Make it much easier for our customers to make that transition it will do things like limit retraining.

The front end experience is working for our customers because there is a reason why much of the industry is using it so.

We're not focused on changing a lot of that now having said that this does give us an opportunity over time to make some changes and deliver a better application. So it's kind of that balance will keep things very familiar and common when the short term and then over time it will give us a platform to further renovate all.

And kind of that balance will keep things very familiar and common in the short term, and then over time it will give us a platform to further innovate on.

Makes sense thanks, guys.

We are showing no more questions in the queue I will turn the call back over to Viva management for closing remarks.

Makes sense. Thanks guys.

We are showing no more questions in the queue. I'll turn the call back over to Viva Management for closing remarks.

Yes.

Alright, Thank you everyone for joining the call today and thank you to our customers for your continued partnership and the Viva team for your outstanding work in the quarter. Thank you.

All right, thank you everyone for joining the call today and thank you to our customers for your continued partnership and to the Viva team for your outstanding work in the quarter. Thank you.

This concludes today's conference call. Thank you for attending you may now disconnect.

This concludes today's conference call. Thank you for attending. You may now disconnect. The conference will begin shortly.

Please wait the conference will begin shortly.

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Okay.

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Yeah.

Yes.

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But in a strategic relationship like that, I'd be curious within your discussions how important it was to Merck to have sort of this unified platform of everything being involved in a type of long-term, you know, 10-year strategic relationship there and how much that sort of guided the strategic decision-making here on the CRM change. Thanks. In terms of Merck, I won't get into any detail specifically there on Merck. I would say that in a strategic agreement of that nature, generally we're not talking at the platform level there. We're more talking about operating model, how we operate together, how we, the governance model. And it's only done based on trust over many years when they see repeated patterns of a customer success orientation, of a strategic partnership orientation, and then it's really the governance model that we put in. So it would be at a higher level versus individual products or platforms. Thanks for the color. Thank you. Your next question comes from the line of Tyler Radka with Citi. Your line is now open. Yes, thank you for taking the question. I wanted to ask you, you talked about some large Vault EDC customers, I believe that you signed in the November timeframe. Can you just-

Yes.

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