Q1 2025 Veeva Systems Inc Earnings Call
Yeah.
Eric: Thank you for standing by. My name is Eric, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Veeva Systems Fiscal 2025 First Quarter Results conference call. All lines have been placed on mute to prevent any background noise.
Eric: Thank you for taking my name is Eric and there'll be a conference operator today at this.
Eric: After the speaker's 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 key. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Gunnar Hansen, Senior Director, Investor Relations. Please go ahead.
Speaker Change: This time I would like to welcome everyone to the Veeva systems fiscal 2025 first quarter results conference call.
Speaker Change: All lines have been placed on mute to prevent any background noise.
Speaker Change: After the Speakers' remarks, there'll be a question and answer session.
Speaker Change: So you'd like to ask a question. During this time simply press star followed by the number one on your telephone keypad.
Speaker Change: I would like to withdraw your question Press Star one again.
Speaker Change: Thank you.
I would now like to turn the call over to Gunnar Hansen Senior Director Investor Relations.
Gunnar Georg Hansen: Please go ahead.
Gunnar Georg Hansen: Good afternoon, and welcome to Veeva's Fiscal 2025 First Quarter Earnings Conference Call for the quarter ended April 30th, 2024. As a reminder, we posted prepared remarks on Veeva's Investor Relations website just after 1 p.m. Pacific. We hope you've had a chance to read them before the call.
Good afternoon, and welcome to beta as fiscal 2025 first quarter earnings conference call for the quarter ended April 32024, as a reminder, we posted prepared remarks on the EBIT Investor Relations website, just after one P. M. Pacific today, We hope you have had a chance to read them before the call.
Gunnar Georg Hansen: Today's call will be used primarily for Q&A. With me today for Q&A are Peter Gassner, our Chief Executive Officer; Paul Shawah, EVP, Commercial Strategy; and Tim Cabral, our Interim Chief Financial Officer. During this call, we may make forward-looking statements regarding trends or strategies in 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.
Speaker Change: Today's call will be used primarily for Q&A with me today for the Q&A are Peter Gassner, Our Chief Executive Officer, Paul Shalwar, EVP commercial strategy and Tim Cabral, our interim Chief Financial Officer.
Speaker Change: 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.
Speaker Change: These forward looking statements will be based on our current views and expectations.
Speaker Change: Subject to various risks and uncertainties, our actual results may differ materially please.
Speaker Change: Please refer to the risks listed in our earnings release and risk factors included in our most recent filing on Form 10-K.
Gunnar Georg Hansen: Our actual results may differ materially. Please refer to the risks listed in our earnings release and risk factors included in our most recent filing on Form 10-K. Forward-looking statements made during the call are being made as of today, May 30, 2024, 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. Veeva disclaims any obligation to update or revise any forward-looking data.
Speaker Change: Forward looking statements made during the call are being made as of today may 32024 based on the facts available to us today.
Speaker Change: This call is replayed or viewed after today the information presented during the call may not contain current or accurate information.
Speaker Change: <unk> disclaims any obligation to update or revise any forward looking statements.
Gunnar Georg Hansen: 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 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 in the Supplemental Investor Presentation, both of which are available on our website.
Speaker Change: 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 do so in a public forum.
Speaker Change: On the call. We May also discuss certain non-GAAP metrics that we believe aid in understanding of our financial results a reconciliation to comparable GAAP metrics can be found in today's earnings release and in the supplemental investor presentation.
Speaker Change: And which are available on our website with that thank you for joining us and I'll turn the call over to Peter.
Gunnar Georg Hansen: With that, thank you for joining us, and I'll turn the call over to Peter. Thank you, Gunnar, and welcome everyone to the call. It was a strong start to the year with results above our expectations. Total revenue in the quarter was $650 million, with non-GAAP operating income of $261 million.
Speaker Change: Okay.
Peter P. Gassner: And welcome everyone to the call.
Peter P. Gassner: It was a strong start to the year with results above our guidance total revenue in the quarter was $650 million with non-GAAP operating income of 261.
Peter P. Gassner: As I shared in our prepared remarks, we've reduced our full-year revenue guidance by about $30 million, from $2.74 billion to $2.71 billion, as the macroenvironment remains. However, despite macro headwinds, we continue to execute well and deliver customer success. In R&D, we saw continued adoption in all areas of development cloud, including three top 20 biopharma wins that span multiple products. And in commercial, we're making great progress on our commercial cloud vision with Vault TRM, and in Data Cloud, early momentum for Compass is strong.
Speaker Change: As I shared in our prepared remarks, we've reduced our full year revenue guidance by about $30 million from $2 74 billion to $2 71 billion.
Peter P. Gassner: The macro environment remains challenging.
Peter P. Gassner: Despite macro headwinds, we continued to execute well and deliver customer success.
Peter P. Gassner: In R&D, we saw continued adoption in all areas of development cloud, including three top 20, biopharma wins that span multiple products.
Peter P. Gassner: And in commercial we are making great progress on our commercial cloud vision.
Peter P. Gassner: CRM and data cloud early momentum for Compass, it's strong.
Peter P. Gassner: We have a clear and compelling product strategy and are building a very durable company with a long runway of growth. I will now open up the call to your questions. At this time, I would like to remind everyone, in order to ask a question, press start on the number one on your telephone keypad. The first question comes from the line of Joe Vruwink with Baird. Please go ahead. Great. Hi, everyone.
Peter P. Gassner: We have a clear and compelling product strategy and are building, a very durable company with a long runway of growth.
Speaker Change: Well now open up the call to your questions.
Speaker Change: At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad.
Speaker Change: Your first question comes from the line of Joe.
Joe: Ruling with Baird.
Speaker Change: Please go ahead.
Joseph D. Vruwink: Thanks for taking my questions. Maybe just to start, of the change you're making to the R&D subscription outlook, about $17 million, how much of that is deal timing versus some of the other factors mentioned in the stakeholder letter? And then when it comes to deal timing, Curious, what are the indications from customers you're hearing that these are programs so set to come through at year end? So ultimately, they're not lost, but they're more contributors and FYI, 2625, perhaps? Yeah, hey Joe, Tim here.
Speaker Change: Okay great.
Brian: Great Hi, Brian Thanks for taking my questions, maybe just to start.
Brian: The change you're making to the R&D subscription outlook about $17 million how much of that is the deal timing versus some of the other factors mentioned then the stakeholder letter.
Brian: Then when it comes to deal timing curious what are the indications from customers Youre hearing that these are program. So start to come through at yearend. So ultimately there theyre not loss, but theyre more contributors in FY 2025, perhaps.
Timothy Stephen Cabral: Thanks for the question. As it relates to the reduction in subscription on the R&D side, a little over 50% is related to deal timing and the enterprise business, and the remainder is related to the SMB that we discussed. Overall, if you include services there, Joe, it's more of a 60% to the enterprise, roughly 60% to the enterprise. And Peter, do you want to take on the other question that you asked? Sure.
Tim Cabral: Yeah, Hey, Joe Tim here. Thanks for the question as it relates to the reduction.
Tim Cabral: And subscription on the R&D side.
Speaker Change: A little over 50% is related to.
Speaker Change: The deal timing and the enterprise business and the remainder is related to the SMB that we discussed overall if you include services there Joe its more of a 60% to enterprise roughly 60% of the enterprises.
Speaker Change: And Peter you want to.
Peter P. Gassner: You want to take on the the other question that you asked.
Peter P. Gassner: And in terms of these deals, these are normally core systems that we're selling. So these are systems that are gonna need to be upgraded, modernized, and enhanced over time. So our competitive position is really good. We're not losing these deals; we're just getting deferred.
Peter P. Gassner: Sure in terms of these deals.
Peter P. Gassner: These are normally core systems that we're selling so these are systems that are going to need to be upgraded modernized enhanced over time. So our competitive position is really good we're not losing these sales is just getting.
Peter P. Gassner: Now, in terms of the exact timing, you know, that's our forecast, and that's based on a lot of individual customer discussions. So, you know, that's accurate to the best of our knowledge at this moment. Okay, that's great.
Peter P. Gassner: Deferred now in terms of the exact timing you know that's our forecast in that.
Peter P. Gassner: That's based on a lot of individual customer discussions.
Peter P. Gassner: That's accurate to the best of our knowledge at this time.
Joseph D. Vruwink: And then I want to ask about the commercial summit from a few weeks ago. There were quite a few good updates there, both new products from Veeva, and it also sounds like good engagement with partners, just in terms of how you plan to approach the CRM migration framework with both tools and processes. What would you say are kind of the big takeaways to focus on from the summit, and then any feedback from customers or partners afterwards that you found notable? Yeah, hey Joe, this is Paul.
Speaker Change: Okay. That's great and then I wanted to ask about the commercial summit.
Six ago, there were quite a few get updates there, but new products from Veeva. It also sounds like good engagement with partners just in terms of how you plan to approach that.
Speaker Change: CRM migration framework with the tools and processes. What would you say are kind of the big takeaway is the focus on from the summit any feedback from customers or partners afterwards that you've found notable.
Paul Shawah: Thanks for the question. Yeah, so Summit was a really great event, a great success. And I would say pretty, you know, as we brought together over 2,000 people from across the industry in a wide variety of areas, sales, marketing, operations, IT, we had over, we had about 100 customers presenting across all those areas and from 50 different companies. So pretty broad-based, you know, covering everything from CrossSix, Compass, and what we're doing in CRM commercial content. So a great event, with a lot of momentum.
Speaker Change: Okay.
Paul Shawah: Hey, Joe This is Paul Thanks for the question, Yes. So summit was it was a really great. Okay, and it's a great success and I would say pretty as we brought together over 2000 people from across the industry and a wide variety of areas sales.
Paul Shawah: <unk> operations.
Paul Shawah: We had over we had about 100 customers presenting across all those areas and from 50 different companies, so pretty broad based covering everything from cross six contests.
Paul Shawah: And what we're doing in CRM commercial content, so great events modern momentum.
Paul Shawah: I would say kind of a couple of big takeaways. One is in the data cloud area, specifically in Compass, we had a lot of customers talking about what they're doing with patient data, how it's changing and how it affects and changes their business in terms of finding more customers, finding more patients, and the quality of the data. So Compass had some really specific and good testimonials from customers and partners about the value that it's adding. So Compass was certainly a highlight of the event.
Paul Shawah: I would say kind of couple of big takeaway is one is in the data cloud area, specifically encompass we had a lot of customers talking about.
Paul Shawah: What theyre doing with patient data how the.
Paul Shawah: How it's changing and how they operate in changing our business in terms of finding more customers finding more patients.
Paul Shawah: The quality of the data so competitor had some <unk>.
Paul Shawah: Really specific and good testimonials from customers and partners about.
Paul Shawah: The value that are chatting. So compass was certainly a highlight of the event.
Paul Shawah: The other one I would say is in the CRM area. We talked about our vision for unifying sales, marketing, and medical. We're doing something foundationally different there. We're bringing all of those together in a single vault, something that hasn't been done before. That was the core of our strategy, but we announced a whole number of innovations in the CRM area that got our customers really enthused and really excited. Everything from our AI strategy to CRM now being on Vault, rethinking the content supply chain.
Paul Shawah: The other one I would say is in the CRM area, we talked about our vision for unifying sales marketing and medical we're doing some something foundation really different that we are bringing all of those together in a single vault, so that hasnt been done before.
Paul Shawah: That was the core of our strategy, but we announced a whole number of innovations in the CRM area that got our customers really enthused and really excited everything from our AI strategy to CRM now being on Volta rethinking the content supply chain. So a number of different innovations in different areas.
Paul Shawah: So a number of different innovations in different areas, which creates a lot of excitement. I'd also say our new products, the momentum that we have there, service center and campaign manager, we demoed them. So just within a year or so after announcing them, we're now showing demos, and both of them are going to be available this year.
Paul Shawah: Which create a lot of excitement I would also say our new products. The momentum that we have their service center and Martin campaign manager, we demo them so gesture.
Paul Shawah: A year or so after announcing that we're now showing demos and both of them are going to be available. This year and I guess, maybe to wrap it up in the CRM space. We had our third top 20 on stage talking about their commitment to volte sure why they moved which was about getting the innovation faster getting on that innovation trains. So.
Paul Shawah: And I guess maybe to wrap it up in the CRM space, we had our third top 20 on stage talking about their commitment to vault CRM, why they moved, which was about getting to innovation faster, getting on that innovation train. So a really successful event, a lot of momentum, a lot of announcements and a button in a number of different areas. But the feedback was overall extremely positive from our customers. Lots of good signals about our clear product strategy and commercial. I am so happy with how things went.
Paul Shawah: Really successful events a lot of momentum a lot of announcements in a number of different areas, but the feedback was overall extremely positive from our customers lots of good signals about are a clear product strategy in commercial so happy with how things went.
Rishi Nitya Jaluria: That's great to hear. Thank you very much. Your next question comes from the line of... Rishi Jaluria, with RBC. Please go ahead. Oh, wonderful. Thanks so much for taking my question. Peter, I want to start with you.
Speaker Change: That's great to hear thank you very much.
Speaker Change: Your next question comes from the line of.
Speaker Change: We see Korea with RBC.
Speaker Change: Please go ahead.
Peter P. Gassner: In your prepared remarks, you mentioned one of the impacts on FY25 guidance is some disruption in large enterprises as they work through their plans with AI. Can you be a little bit more specific? How is that manifesting itself? Is that on commercial? Is that on clinical? Is that on both?
Speaker Change: Wonderful. Thanks, so much for taking my question Peter I want to start with you in your prepared remarks, you had mentioned what are the impacts.
Speaker Change: On FY 'twenty guidance is some disruption in large enterprises as they work through their plans with AI can you give a little bit more specific how is that manifesting itself is that on commercial is that all clinical is that on both.
Speaker Change: And what exactly does that mean and maybe alongside that as we think about your overall AI strategy at least what we pick up and a lot of our conversations as companies are increasingly wanting to work with their trusted vendors on their AI strategy. Given that you are such an important partner to the life Sciences industry, How do you plan on using that.
Peter P. Gassner: And what exactly does that mean? And maybe alongside that, as we think about your overall AI strategy, you know, at least what we picked up in a lot of our conversations is that companies are increasingly wanting to work with their trusted vendors on their AI strategy. Given that you are such an important partner to the life sciences industry, how do you plan on using that position to help companies with their AI strategy? And then I've got a quick follow-up for Tim. Richie, let's see.
Speaker Change: To help companies with their strategy and then I've got a quick follow up for Tim.
Speaker Change: Okay.
Richie: Richie let's.
Richie: Let's see so.
Peter P. Gassner: So, the first part of it is the disruption, what we mean by that. So you look at a year or so, a little more than a year ago, AI really burst onto the scene. And that caused it to become very accessible. You know, you saw it on 60 Minutes; you could log on and try it yourself.
Richie: The first part of it.
Richie: Is the disruption what what we mean by that so.
Richie: Look at a year, so a little more than a year ago.
Richie: Early burst upon the scene Gen AI and that causes it became various accessible you thought on 60 minutes you can log on and try it yourself I could answer a question so that caused a lot of.
Peter P. Gassner: I could answer a question. So that put a lot of pressure on our larger enterprises and the IT department. Hey, what are we going to do about? What's our strategy as a large pharmaceutical company, biotech, about AI? And that would land in the IP department of these companies. Now, for the smaller, our smaller SMB customers, it doesn't matter so much. They have other things to think about, right?
Richie: Pressure in our larger enterprise and the it Department Hey, what are we going to do about an hour.
Richie: Our strategy is a large pharmaceutical company biotech.
Richie: <unk> AI and that would land in the IP Department.
Richie: Companies now for the smaller or smaller SMB customers doesn't land. So much they have other things to think about other more pertinent and very stressful things, but in the large companies with tens of thousands of people. They're looking for these operational efficiencies that they could potentially get through AI and they they have the same budget to kind of get ahead of that game.
Peter P. Gassner: Other, more pertinent, and very stressful things. But in large companies with tens of thousands of people, they're looking for these operational efficiencies that they could potentially get through AI. And they have a budget to kind of get ahead of that game. So, by the word disruption, I meant that through a competing priority into our we had some existing plans. Now, this AI, we have to plan for what we're going to do with that. What, where are we going to spend our time on?
Richie: By the word disruption I meant that through a competing priority into our customers and we had some existing plans now.
Richie: AI, we have to plan for what we're going to do on that.
Richie: Are we going to spend on it.
Peter P. Gassner: Innovation and experimentation, who's going to do that, what budget we will use, that type of thing. So some of that would take an impact on us, which are core systems. Now those core systems, when we get that type of impact, they will delay a project, but they won't stop it, because these core systems are things you need. You can delay them, but all that does is create somewhat of a pent-up demand.
Richie: Innovation on experimentation, who is going to do that what budget, but we use that type of thing. So some of that would take an impact on to us which is a core systems now those core systems, when we get that type of impact.
Richie: Will delay a project, but it won't stop it because these core core systems. Thank you need you can delay them, but all that does is create somewhat of a pent up demand.
Peter P. Gassner: I guess, Rishi, there was a good parallel list with COVID, the pandemic, a few years ago. That created a whole different set of dynamics with vaccines and therapies and work-from-home priorities, all types of things that created a disruption, which then, okay, took the focus off of the core systems a bit, and then it came back again. So that's the first part. That's the answer, too. In terms of the AI strategy, our strategy is to really enable customers and their partners to develop AI applications because they're going to be very specific AI applications, gen-AI applications for very specific uses, whether it's field information, pre-call planning, next best action, what have you. They're going to be very specific applications.
Richie: I guess I appreciate there was a good parallel list with the Covid pandemic.
Richie: Pandemic, a few years ago that created a whole different set of dynamics with vaccines and therapies and work from home priorities all types of things that created that.
Richie: The disruption, which then okay take the focus off of the core system is a bit and then and then it came came back again.
Richie: No.
Richie: That's the first part that's the answer there.
Richie: In terms of the AI strategy, our strategy is to really enable customers and their partners.
Richie: Two to develop AI applications, because they're going to be very specific AI applications. Gen. AI applications for very specific use cases, whether it's field information pre call planning.
Richie: Next step action, what have you they're going to be very specific applications that innovation has to come from everywhere.
Peter P. Gassner: That innovation has to come from everywhere. And one of the things it needs is clean data. All these AI applications need clean, concurrent, fast data. So one of the things we did started about two years ago, actually, is put in a new API on the Vault platform called the Direct Data API. And that was just released this April.
Richie: Do you think that need is clean data all of these AI applications need clean concurrent SaaS data. So one of the things. We did started about two years ago actually.
Peter P. Gassner: And that provides concurrent, consistent data about 100 times faster than the normal API. So that's. I think that's going to be a great thing.
Richie: Is <unk>.
Richie: Put in new API on the bolt platform called the direct data API.
Richie: That was just released this April and that provides concurrent consistent data about 100 times faster than normal API. So thats I think thats going to be a great thing now when we look to the long term some of those applications will be developed by our customers some by partners and over time, probably some by Veeva as well.
Peter P. Gassner: Now, when we look to the long term, some of those applications will be developed by our customers, some by partners, and, over time, probably some by Veeva as well. But we're concentrating on the foundation, the APIs for the data, the core system, because that's really what It's really only Veeva that can deliver that for our customers, so that's what we're focused on. Okay, great. That's really helpful. And then Tim, you know, maybe one more.
Richie: But we are concentrating on the foundation of the API for the data the core system, because that's really what.
Richie: That's really only veeva that can deliver for our customers. So that's what we're focused on.
Peter P. Gassner: You talked about trust. I wrote that down. A key part of Veeva, too, is that we have that trust. We have to continue to earn it. So we don't really get into things that are too speculative. We definitely don't overpromise.
Okay, Great that's really helpful and then Tim.
Richie: Yes.
Speaker Change: Sorry go ahead.
Speaker Change: Maybe one more.
Speaker Change: Talk about trust I wrote that down.
Speaker Change: Part of it too.
Speaker Change: We have that trust, we have to continue to earn that trust. So we don't really get into things that are too speculative we definitely don't over promise that trust is the most valuable thing we have so we'll be really targeted when we get into an AI application if we do that.
Timothy Stephen Cabral: Trust is the most valuable thing we have. So we'll be really targeted when we get into an AI application if we do. It'll be an area where, hey, that's a use case that we're pretty sure can be solved by Gen AI, and there's not a great partner to do it. Okay, then we might step in, because we do have that trusted position, lower guidance, you know. I appreciate there are moving pieces. I understand macro is really rough out there.
Speaker Change: Be an area, where hey, that's a that's a use case that we're pretty sure that can be solved by Jan AI and there's not a great partner to do it. Okay. Then we might step in.
Speaker Change: Because we do have that trusted position.
Speaker Change: Alright, Thanks, Peter Thats really helpful color and then Tim just as I think about the lower guidance I. Appreciate there's moving pieces I understand macro was really rough out there we've seen that throughout the software earnings season, I guess the question I wanted to kind of delve into is its not a big cut it's mostly services a little bit of FX.
Timothy Stephen Cabral: We've seen that throughout the software earnings season. I guess the question I want to kind of delve into is whether it's a big cut. It's mostly services, a little bit of FX, and a little bit of incremental macro. But we've had a lot of guide downs over the past several quarters. What would give us confidence that this is the last cut and we're not going to see further cuts from here? In other words, is the outlook conservative enough and with enough, you know, conservative assumptions in it that we won't see another guy go down?
A little bit of incremental macro, but we've had a lot of guide downs over the past several quarters.
Speaker Change: What would give us confidence that this is the last cut and we're not going to see further cuts from here in other words is the outlook conservative enough and with enough.
Speaker Change: Conservative assumptions that we won't see another guy down thank you.
Dylan Tyler Becker: Thank you. Yeah, hey, thanks, Rishi, for the question. You know, I think our guidance philosophy, so just stepping back for a second, our guidance philosophy has not necessarily changed. We were very thoughtful about it; we look to the information that we have to inform us in our guidance. And I think that's, that's been consistent. As we look at the data, and as Peter talked about earlier, in terms of our sales forecast, Again, we're very thoughtful in terms of those insights that we have specifically for our customer base because we work so closely with them on a number of things.
Speaker Change: Yeah, Hey, Thanks for your question.
Speaker Change: I think our guidance philosophy, so just stepping back for a second our guidance philosophy has not changed.
Speaker Change: Fairly.
Speaker Change: We're very thoughtful about it we look to the information that we have to inform us in our guidance.
Speaker Change: And I think that.
Speaker Change: That's been consistent.
Speaker Change: As we look at the data and as Peter talked about earlier in terms of our sales forecast.
Again, we're very thoughtful in terms of.
Speaker Change: That those insights that we have specifically into our customer base, because we work so closely with them on a number of things.
Dylan Tyler Becker: Look, we can't promise you if other macro things continue to deteriorate materially, and that has a material impact or an impact on life sciences, that we won't have to do something here. But again, this is the best information we have that informs the guidance that we've given today. All right, very helpful. Thank you so much, both of you.
Speaker Change: We can't promise you if other macro things continue to deteriorate materially and that has a material impact or an impact to life sciences.
Speaker Change: We won't have to do something here, but again. This is the best information we have that informs the guidance that we've given today Rishi.
Speaker Change: All right very helpful. Thank you so much both of you.
Dylan Tyler Becker: The next question comes from the line of Dylan Becker with William Blair. Please go ahead. Hey guys, Thanks for taking the questions here. Maybe, Peter, for you, I wanted to pair some of the comments you're talking about, kind of disruptions and delayed decisioning from some of the larger enterprise customers versus what looked like some healthy top 20 clinical R&D momentum and adoption in the quarter. What are some of the kind of divergence areas you're seeing between those that are feeling the impacts of those disruptions versus some of those that are maybe able to leverage the opportunity and move a bit faster?
Speaker Change: Next question comes from the line of Dylan Becker with William Blair.
Speaker Change: Please go ahead.
Dylan Tyler Becker: Yeah, I would say what you're referring to is in the top 20 in R&D, and You know, it's really customer-specific situations because there's only 20 top 20. It's not such a large number that you can make a general pattern.
Dylan Tyler Becker: Hey, guys. Thanks for taking the questions here maybe.
Dylan Tyler Becker: Peter for you wanted to pair some of the commentary are you talking about kind of disruptions delayed decisioning from some of the larger enterprise customers versus what looks like some healthy top 20 clinical R&D mode.
Speaker Change: <unk> adoption in the quarter, maybe what are some of the kind of divergence areas youre seeing between those that are feeling the impact of those disruptions versus some of those that are maybe able to leverage the opportunity and a little bit faster.
Speaker Change: Yes, I would say.
Speaker Change: What you're referring to there is in the top 20 in R&D and.
Speaker Change: It's really customer specific situations because theres only 20 top 20, it's not a not as such a large number that you can make general patterns I would say.
Peter P. Gassner: I would say some companies are spending more on AI. Experimentation and Learning, Proof of Concepts, and Summer Spending Lessons.
Speaker Change: Some companies are spend.
Speaker Change: Spending more on the AI.
Speaker Change: <unk> and learning and proof of concepts and some are spending less.
Peter P. Gassner: So that's one thing. And then I think with many of these customers, it's just timing. Some have needs in this area or that area. So I, there's no particular path.
Speaker Change: So that's one thing and then I think with many of these customers is just timing timing.
Speaker Change: Some have needs in this area or that area.
Speaker Change: So there's no particular pattern there.
Paul Shawah: Okay, that's helpful. And then maybe Paul, switching over to you, you called out this kind of cross-functional collaboration between marketing, sales, and medical. I understand that it's likely a multi-year journey here, but how much of an emphasis is that first step in getting the data in order showing up in the commercial strength you guys are seeing here? And maybe what that can mean as a potential value unlock for further innovation and value creation opportunities over time for the commercial side? Thanks.
Speaker Change: Okay. That's helpful and then maybe Paul switching over to you you called out.
Speaker Change: Just kind of cross functional collaboration between marketing sales and medical I understand that it's likely a multiyear journey here, but how much.
Speaker Change: Of an emphasis is that first step in getting the data in order showing up in the commercial strength you guys are seeing here.
Speaker Change: Maybe what that can mean as a potential value unlock for further innovation and value creation opportunities over time for the commercial side.
Paul Shawah: Yeah, this is really a long-term journey and it's a long-term vision. I think what we're doing, we're taking the opportunity because we now have the ball platform, we're able to build these different functional areas that, historically, a lot of them have been separate, they've operated in separate systems, they've operated in silos, sales and marketing, as one example. And we're building them into the same vault so they can all operate on literally the same exact customer record at the same time.
Speaker Change: Yes. This is really a long term this is a journey and it's a long term vision.
Speaker Change: What we're doing we're taking the opportunity because we now have the vault platform, we're able to build.
Speaker Change: These different functional areas that historically a lot of them have been suffering they've operated in chocolate systems they've operated in silos sales and marketing is one example.
Speaker Change: And we're building them into the same vault. So they can all operate on literally the same exact customer record at the same time, so things become more real time more collaborative sales can be involved in a marketing campaign as one example.
Paul Shawah: So things become more real-time, and more collaborative. Sales can be involved in a marketing campaign, as one example. Marketing can see exactly what sales is doing. So it's a new way of operating, and we are enabling that through some of the new products that we've announced, like Service Center, which is for inside sales reps and the call center, and hybrid reps, of course, but then also Campaign Manager, which is for the marketing team. And we're doing it in a very different way; by building them all, they all live together.
Speaker Change: Marketing can see exactly what <unk> is doing so I would say, it's a new way of operating and we are enabling that through our new some of the new products that we've announced like service center.
Speaker Change: Which is for inside sales reps and the call center and hybrid reps of course, but then also campaign manager, which is for the marketing team and we're doing it in a very different way by building them. All together that's the way to think about it. So this will be a multiyear journey.
Paul Shawah: That's the way I think about it. So this will be a multi-year journey. It'll be something that will likely start with small and mid-sized customers who are able to take advantage of this. They'll likely move to Vault sooner, and we have new customers on Vault CRM. They'll be able to take advantage of that sooner, and then, over time, it will be for larger customers. So this is a multi-year journey, but it's a foundational thing.
Speaker Change: <unk> will likely start with small and midsize customers, we're able to take advantage of that so I'll move to likely move to false.
Speaker Change: Sooner and we have new customers on vault CRM there'll be able to take advantage of that.
Speaker Change: Sooner and then over time it will be for larger customers. So this is a multiyear journey, but it's a foundational thing.
Ken Wong: When you get onto Vault CRM, you have access to all of this innovation and this ability to kind of change how you operate. So we're excited about the long-term potential here.
Speaker Change: When you get onto Volte CRM, we have access to all of this innovation and and this ability to kind of change how you operate so we're excited about that.
Speaker Change: Our long term potential here.
Speaker Change: Great. Thank you.
Ken Wong: Your next question comes from the line of Ken Wong with Oppenheimer and Company. Great, thanks for the question. Yes, this one may be a Peter or Paul.
Speaker Change: Your next question comes from the line of Ken Wong with Oppenheimer and company.
Ken Wong: I was surprised to see multiple new Vault CRM customers were already live. What was the feedback from customers in terms of that implementation go-live timeline? And then how might these early wins and go live, you know, impact future engagements with your existing CRM customers? Yeah, first we have to make really great progress in the product to be able to sell Vault CRM to additional customers. And then, as of April 1st, it's the sole go forward solution.
Great. Thank you for taking my question.
Speaker Change: Yes. This one maybe Peter or Paul I was surprised to see multiple new vault CRM customers were already live.
Speaker Change: What was the feedback from customers in terms of that implementation go live timeline and then how might these early wins and go lives impact future engagements with your existing CRM customers.
Speaker Change: Yes.
Speaker Change: So first we have we've made really great progress in the product to be able to sell.
Speaker Change: Sell vault CRM to additional customers and as of April 1st it's the it's the sole go forward solutions. So every new customer. After after April one will be on Volte CRM. So it's a testament to how far the product has come in such a short period of time, so we're executing well from a product standpoint.
Paul Shawah: So every new customer after April 1 will be on Vault CRM. So it's a testament to how far the product has come in such a short period of time. So we're executing well from a product standpoint. But it's also a testament to the execution of the broader team, the services team, and getting the product up and running, and the feedback from customers is that it works. It's meeting their needs.
Speaker Change: But it's also a testament to the execution of the broader team the services team.
Speaker Change: And getting the product up and running and the feedback from customers is that it works.
Paul Shawah: Now, these are smaller companies, some of them, many of them are pre-commercial companies. So their requirements are, a little bit more in that early market, somewhat simpler kinds of requirements, but they're doing well, and they're using the system. And it's creating a good foundation for us to expand. You have to start somewhere.
Speaker Change: Their needs now these are smaller companies some of them many of them are pre commercial companies. So their requirements are.
Speaker Change:
Speaker Change: A little bit more on that early market somewhat simpler kinds of requirements, but they're doing well and are using the system and.
Speaker Change: It's creating a good foundation for us to expand you have to start somewhere and we started and we're expanding now to more and more customers and Thats. The foundation for what we expect the vast majority of the industry to migrate to over a period of time. So it's a really good milestone and we're happy with with the adoption and the.
Paul Shawah: We started, and we're expanding now to more and more customers. And that's the foundation for what we expect the vast majority of the industry to migrate to over a period of time. So it's a really good milestone, and we're happy with the adoption and the customer success so far with AllCRM. Okay, perfect. And then quickly, Tim, on the billing side, the $35 million cut to billings, and lots of moving pieces there, is it fair to characterize the subscription portion of that as fairly consistent with the revenue cut, the $5 million subscription revenue cut? Hey, Ken, yeah, it's in the ballpark.
Speaker Change: Customer success, so far with loss share them.
Speaker Change: Okay, Perfect and then I think.
Speaker Change: Tim on the on the billing side.
The $35 million cut to billings and lots of moving pieces. There is it fair to characterize the subscription portion of that being fairly consistent with the the revenue cut to 5 million subscription revenue cut.
Timothy Stephen Cabral: The two major pieces that impacted our billings guide down were the $25 million reduction in our services revenue, Ken, and then we called out, you know, roughly a $10 million headwind from an FX perspective is at the end, and the euro has gotten a little weaker in the last 90 days. Okay, perfect. Thank you. Your next question comes from the line of Stan Berenshteyn, with Wells Fargo Securities; please go ahead. Hi, thanks for taking my questions.
Ken Wong: Hey, Ken Yes, it's in the ballpark, but the two major pieces that.
Speaker Change: Impacted our billings guide down was the $25 million reduction in our services revenue can and then we called out rough.
Speaker Change: Roughly $10 million headwind from an FX perspective is the yen and euro has gotten a little weaker in the last 90 days.
Ken Wong: Okay perfect. Thanks, Jeff.
Ken Wong: Yes.
Ken Wong: Okay.
Ken Wong: Yes.
Timothy Stephen Cabral: Maybe first for Peter or Paul, you called out in the Preparatory Marks Crossox, had a great quarter, can you just maybe talk through the traction there and the market demand customer trends? And also, if you can touch on the fact that, historically, I think you've mentioned a goal to pivot this segment to a more recurring revenue model, just any updates on that would be great as well. Yeah, sure, Stan.
Speaker Change: Your next question comes from the line of Dan Bernstein.
Speaker Change: With Wells Fargo Securities.
Speaker Change: Please go ahead.
Unknown Attendee: Hi, Thanks for taking my questions, maybe first for Peter or Paul.
Speaker Change: You called out in the prepared remarks cross had a great quarter.
Speaker Change: Just maybe talk through the traction there and the market demand customer trends and also if you can touch on the fact that historically I think you've mentioned a goal to pivot. This segment to a more recurring revenue model just any updates on that would be great as well. Thanks.
Stanislav Berenshteyn: So CrossFix, I would think about it as two parts of the business. There's the marketing and optimization side, and there's the CrossFix audience. And we perform well in both of those businesses. And marketing and optimization, that's the one that we specifically referred to as trying to move that to more of a stable enterprise license agreement type stream. And we're in the early days of that. We have had our first customer move to that, and it's working well for them. It allows them to be able to use CrossFix really across all their brands foundationally to kind of measure and optimize their marketing. So that works well.
Sam: Yes, sure Sam So cross because I would think about it as two parts of the business. There is the marketing and optimization side and there's the cross ex audience and we performed well in both of those businesses.
Sam: Marketing and optimization Thats the one that.
Speaker Change: We specifically referred to as <unk>.
Speaker Change: Trying to move that to more of a stable enterprise license agreement type stream and we're early days in that we have.
Speaker Change: And our first customer moved to that it's working well for them and allows them to be able to use cross it's really across all their brands Foundation.
Speaker Change: Measure and optimize their marketing.
Speaker Change: So that works well.
Paul Shawah: We will continue to focus on that over time, but we're not going to do anything unnatural. It's a customer-friendly way, and we want to make sure that it creates value for our customers. We have the best product there, and the market has become more healthy. So we're executing well on that side, and then with cross-sex audiences. We invested a whole lot more in that over the past couple of years, and that We have a really great product, and For those of you that don't know what it is, it's to get more precise in your media so your media reaches the right patient population. We combine consumer and health data to get more precise, and how you reach targeted audiences, and we have the best product there, and The market has also become more healthy. So proud of the execution and the innovation that we've done and both sides of the cross-sex business And then maybe a quick follow-up for Tim.
Speaker Change: We will continue to focus on that over time, but we're not going to do anything unnatural.
Speaker Change: Something that we wanted to do in a customer friendly way and make sure that it creates value for our customers.
Speaker Change: We have the best product there and the market has become more healthy so we're executing well on that side and then across its audiences.
Speaker Change: We invested a whole lot more than that over the past couple of years and that's paying off we have a really great product.
Speaker Change: And for those of you that don't know what it is it's to get more precise in your media. So your media reaches the right patient population, we combine consumer and health data to get precisely how you. How you reached targeted audiences and we have the best product there and the market has also become more healthy.
Speaker Change: Im proud of the execution and the innovation that we've done and both sides of the cross X business.
Timothy Stephen Cabral: So your guidance is a bit more constructive on commercial cloud subscriptions. Obviously, lots of developments there in the quarter, but anything specific to call out in terms of the driver of upside to fulfill your expectations? Thanks.
Speaker Change: Got it I appreciate the color and then maybe a quick follow up for Tim. So your guidance is a bit more constructive on commercial cloud subscriptions, obviously lots of developments during the quarter, but anything specific to call out in terms of the driver of upside to full year expectations. Thanks.
Dan: Yes, Dan I would say.
Speaker Change: Consistent or somewhat related to the question you just asked Paul we are seeing.
Speaker Change: Broad based upside with specific upside in.
Speaker Change: Our cross fixed business.
Speaker Change: That that drove the upside in the in the most recent guidance we gave.
Timothy Stephen Cabral: Yes, and I would say it's consistent with or somewhat related to the question you just asked, Paul. We are seeing broad-based upside, with specific upside in our cross-six business, that drove the upside in the most recent guidance we gave. All right, thank you. Your next question comes from the line of Stephanie Davis with Barclays. Please go ahead.
Speaker Change: Got it thank you.
Speaker Change: Your next question comes from the line of Stephanie Davis with Barclays.
Stephanie July Davis: Hey guys, thank you so much for taking my question. I was hoping to talk a little bit about the evolution of competence, just given that you did call it, helping me win this quarter. So when I think about the two big areas of differentiation that you first called out, you're talking about data speed and data restriction. How did that play into Windsor's quarter? And, you know, what kind of applications have you thought about building given the differentiations in the data? Hey, Stephanie, this is Peter. I'll take that compass.
Stephanie July Davis: Please go ahead, yes. Thank you so much for taking my question.
Stephanie July Davis: I was hoping to talk a little bit about the evolution of confidence just given the decline of budget housing wins this quarter.
Speaker Change: Think about the the two big areas of differentiation that you first called out you're talking about data feed on data restrictions.
Speaker Change: Did that play into the wins this quarter and what kind of applications have you thought about building given the differentiation that Nicola.
Speaker Change: Okay.
Peter: Hey, Stephanie this is Peter I'll take that.
Speaker Change: Compass Compass is very innovative I would say.
Peter P. Gassner: Compass is very innovative. I would say Compass is as innovative as Vault was when we introduced it in 2011. It was a new way of doing things, and people had to adjust. Not everybody got it at first because it was so, so new and so different.
Speaker Change: <unk> is as innovative as it was when we introduced it in 2011.
Speaker Change: With a new way of doing things and people had to adjust to it and not everybody got it at first because it was so new and so different so we work with early adopters the same thing with compass, it's fundamentally.
Peter P. Gassner: So we were with early adoption, same thing with COMPASS. It's fundamentally..., fundamentally different than what I treated had, Unknown Speaker. And the others, right, they started out from the days of Lipitor, when the largest selling drug was. You know, you get it at the retail pharmacy. Today, it's much different. Drugs come through a specialty pharmacy; they're in-office administered, hospital administered, as well as.
Speaker Change: Mentally different than what <unk> has done in the past that <unk> and the others right. They started out from the days of lipitor, whereas the largest selling drug was.
Speaker Change: To get it at the retail pharmacy today its much different drugs.
Speaker Change: Drugs come through specialty pharmacy either.
Speaker Change: Administered hospital ministers.
Speaker Change: Well, its retail pharmacy and health care systems.
Speaker Change: There's so much more complex so what's driving company.
Unknown Speaker: [inaudible] Thank you so much. So what's driving companies? Specifically, we have Compass Patient, and then we just introduced Prescriber and National Prescriber in January. They're very early.
Speaker Change: Specifically, we have compass patient and then we just introduced prescriber and national prescribed in January they're very early.
Peter P. Gassner: So the revenue and the deals are coming from Compass Patient. And what's driving it is, A. It's one thing; it's easier to purchase, you purchase it by the book, you get unlimited access to 80 billion patients for use with your brand, rather than just buying a slice of it, your own slice of your therapeutic area. So this allows you to explore to see what you don't see, which is why you're looking at data to see what you can see.
Speaker Change: The revenue and the deals are coming from compass patient in there.
Speaker Change: And what's driving it is it one thing it's easier to purchase you purchase it by the brand and you get unlimited access to 80.
Speaker Change: <unk> 80 billion patient records for use with your brand.
Speaker Change: Other than just buying a slice of data your own slice of your therapeutic area. So this allows you to explore to see what you don't see which is why youre looking at data to see what you could see so thats fundamentally different.
Peter P. Gassner: So that's fundamental. The other one is it's more complete because we use a different data source that stresses the patient level and more accurate patient matching rather than, Mostly, you know, historically the collection from the retail pharmacy.
Speaker Change: The other one that's it's more complete because we use a different data sourcing strategy that stresses the patient level and more accurate patient matching rather than.
Speaker Change: Mostly historically the collection from the retail.
Speaker Change: Retail pharmacies.
Peter P. Gassner: And then it's the way we deliver it daily. So the patient data is updated daily. So you can run different triggering campaigns, and you have the freshest. So it's just a new way of doing things. Equivalent to
Speaker Change: And then it's.
Speaker Change: The way we deliberate daily.
Speaker Change: Patient data is updated daily so you can run different triggering campaigns and you have the fresh data. So it's just a new way of doing things.
Speaker Change: Equivalent to.
Peter P. Gassner: It's like client server, and then move to the cloud. It's a new way of doing things. And that's what's appealing to people now. But what do they do with it?
Speaker Change: It's like client server and then move to the cloud, it's a new way of doing things and that's what's appealing to people now what do they do with it I think the most common thing is what Paul said is.
Peter P. Gassner: I think the most common thing is what Paul said, finding new patients and, therefore, new prescribers that are treating those patients that you didn't know about, and the second one is finding patterns. Oh, I didn't know that people that are using our products. That's what else they're, or patients that aren't using our products or patients that are using our competitor's products, so that we provide that visibility, and in some cases, we're the only one that can provide that visibility because of our data sourcing strategy. You can often see what's called, So a lot of detail there, but I'll start. I'll end where I start.
Speaker Change: Finding new patients and therefore, finding new prescribers that are treating those patients that you didn't know about and the second one is finding patterns I didn't people that are using Ah patients that are using our products. That's what else. They are doing for patients that arent using our products or patients that are using our competitors products. So that's what.
Speaker Change: They are doing we provide that visibility and in some cases.
Speaker Change: We're the only one that can provide that visibility because of our data sourcing strategy. You can often see what's called block product. So a lot of detail there, but I'll start I'll end, where I start it's a truly innovative product and that's what's attracting innovators.
Peter P. Gassner: It's a truly innovative product, and that's what's attracting patients. Peter, I guess just on that note, the more we go to digital pharma marketing, the more that real-timeness of the data becomes incredibly important to try to kind of be nimble on the strategy. Is that accelerating the growth at all?
Speaker Change: Hey, Peter I guess, just on that now the more we go to digital pharma marketing and more of that real tightness of the data become <unk>.
Peter P. Gassner: Or is this something that you always saw demand kind of separate from the digital pharma marketing trend? I would say Encompass, what's probably the biggest accelerator is just understanding the patient; the timeliness is important for certain use cases, the daily data, but probably right now, the biggest one is like, "Oh, my goodness," I didn't know that patients were doing with our product, or I didn't know that those prescribers were prescribing our product. So that, it's these basic things that I. The industry has grown up a little bit to think that they can't get that. And now they can't.
Speaker Change: Incredibly important to try to kind of be nimble on the strategy.
Speaker Change: Is that.
Speaker Change: Reading the growth at all or is this something that you thought the demand kind of.
Speaker Change: Separate from the potential final marketing trends.
Speaker Change: Okay.
Speaker Change: I would say encompass what's probably the biggest accelerators just understanding the patient the timeliness is important for certain use cases, the daily data, but probably right now the biggest one is like Oh, My goodness I Didnt know, that's what patients were doing with our product or I didn't know who those prescribers, who are prescribing our product or werent prescribing it.
So that if these patients basic things that I think the industry has grown up a little bit to think that they can't get that information.
Speaker Change: And now they can.
Speaker Change: So that's what's driving it.
Speaker Change: Okay. Thank you for calling.
Speaker Change: Thanks.
Peter P. Gassner: So that's what it is. Alright, thank you for the insight. Your next question comes from the line of Brian Peterson with Raymond James. Please go ahead. Hi guys, thanks for taking the question. So, Paul, it's great to see Vault CRM going live in the winds this quarter. You know, as you talk to customers, and they're going through their migration decisions, I'm curious, how big of a deal do you think general availability is? Or do you think that full functionality later this year may be a bigger swing factor?
Speaker Change: Your next question comes from the line of Brian Peterson with Raymond James. Please go ahead.
Brian Christopher Peterson: I'm effectively looking to get more perspective on any key functional points that customers are looking for in Vault CRM. Yeah, the go lives that we have and the full functionality are important to those customers, to customers that are considering migrating. But I would say what's more important to them is our direction and our innovation. What they're thinking about, they have a high enough comfort level, they've operated around Veeva long enough to know that when we say we're going to deliver on something from a product standpoint, we deliver. And these are great proof points.
Brian Christopher Peterson: Hi, guys. Thanks for taking the question so Paul it's great to see vault CRM going live in the wins this quarter as you talk to customers and they're going through their migration decisions I'm curious how big of a deal you think general availability is where do you think thats full functionality. Later this year may be a bigger swing factor I'm effectively looking to get more.
Speaker Change: Our perspective on any key functional points that customers are looking for and bolts Europe.
Speaker Change: Yes.
Speaker Change: <unk>.
Paul: The go lives that we have in the full functionality are important to those customers to two customers that are considering migrating but I would say, what's more important to them is our direction and our innovation.
Paul: What they are thinking about I think they have enough comfort level they've operated around veeva long enough to know that when we say we're going to deliver on some things from a product standpoint, we deliver.
Speaker Change: Great proof points. So it just extends about pattern.
Paul Shawah: So it just extends that pattern. But the decision is really about the innovation that we're delivering. It's some of the things that I talked about earlier, with this new way of kind of bringing together different teams, allowing them to collaborate better, solving the content supply chain challenge. Stephanie talked about digital marketing. To do digital marketing, well, you need a lot of content, and it needs to be personalized.
Speaker Change: The decision is really about the innovation that we're delivering it see some of the things that I talked about earlier with this new way of kind of bringing together different teams, allowing them to collaborate better.
Speaker Change: Solving the content supply chain challenge.
Stephanie July Davis: Stephanie you talked about digital marketing digital marketing well you need a lot of content that needs to be personalized we are in a very unique position to do that because CRM is now on volte just like chromo mass is on volatile we're going to connect those together in a very unique way.
Paul Shawah: We're in a very unique position to do that, because CRM is now on Vault, just like Promo Maps is on Vault, and we're going to connect those together in a very unique way. So it's about innovation, and it's about making it easy to get there. But, of course, having live customers doesn't hurt. Yeah, and I'll hook right on to that. You know, I think the live customers really are the proof point.
Speaker Change: So.
Speaker Change: Okay.
Speaker Change: So it's about innovation and it's about making it easy to get there but of course, having a life customers doesn't hurt.
Speaker Change: Yeah.
Speaker Change: Thats great.
Speaker Change: I think the live customers really are the proof points today, we have smaller customers live because they can purchase didn't go live quickly I think the larger customers many of them are there.
Paul Shawah: And today we have smaller customers live because they can purchase it and go live quickly. I think the larger customers, many of them would, they're eager to see when some of those three top 20s are live. You know, how are they liking it? What was the process like to get there?
Speaker Change: They're eager to see when some of those three top 20.
Speaker Change: Clive how are they liking it.
Speaker Change: What was the process like to get there what would be a change what would they have done differently.
Peter P. Gassner: What would they have changed? What would they have done differently? So it's always like that. It's a reference selling. I think that'll be a big milestone when some of the large customers are live now. They have to go through the migration, which will start next year. So that's going to take a little bit of time. Great, I appreciate the color.
Speaker Change: Always like that it's a reference selling I think that will be.
Speaker Change: Big milestone when some of the large customers or our lives now they have to go through the migration, which will start next year. So that's going to take a little bit of time.
Timothy Stephen Cabral: And Tim, I don't need a lot of detail on some of the moving parts in the guidance. But as it relates to the pipeline that you mentioned moving from kind of mid-year to the end of the year, was there any commonality by product or customer segment that drove that, or people may be looking at larger deals and saying, hey, they're going to take smaller bites of the apple? Would just love to maybe get some qualitative color on what's going on behind the scenes there. Thanks. Yeah, hey, Brian.
Speaker Change: Great I appreciate the color Tim.
Speaker Change: They need a lot of detail on some of the moving parts on the guidance, but as it relates to the pipeline that you mentioned moving from kind of mid year to the end of the year.
Speaker Change: Is there any commonality by product or customer segment that drove that or are people, maybe looking at larger deals and say hey, they're a smaller bites of the Apple would just love to maybe get some qualitative color on what's going on behind the scenes there. Thanks guys.
Timothy Stephen Cabral: As we said earlier, that was mostly in the enterprise area, and I wouldn't say there's any commonality. These are, you know, Peter mentioned this as related to one of the questions on, you know, the clinical wins that we had in the quarter. These are more deal-specific, company-specific factors that drove some of this. Now, whether or not or how much of a percent of the AI disruption Peter mentioned plays into that, you know, that may be a common factor across some of these deals, Brian, but nothing specific beyond that, I would say, was a common thread amongst the deals that we saw move later in the year. Your next question comes from the line of David Windley, with Jefferies, please go ahead. Hi, thanks for taking my questions. I wanted to ask you one on the margin.
Yeah, Hey, Brian.
Brian Christopher Peterson: As we said earlier that was mostly in the enterprise area and I wouldn't say there was any commonality is either.
Speaker Change: Peter mentioned this isn't related to one of the questions on.
Speaker Change #100: The clinical wins that we had in the quarter.
Speaker Change #101: These are more deal specific company specific factors.
Speaker Change #101: That that drove some of this now whether or not or how much of a percent of the AI disruption Peter had mentioned.
Speaker Change #101: So that.
Speaker Change #101: That may be a common factor across.
Speaker Change #102: Across some of these deals Brian.
Speaker Change #102: But nothing specific beyond that I would say.
Speaker Change #103: What are the common thread amongst the deals that we saw move later in the year.
Speaker Change #104: Hi, Tim.
Speaker Change #105: Your next question comes from the line of David Windley with.
Speaker Change #104: Jefferies.
Speaker Change #106: Please go ahead.
David Howard Windley: You seem to be a little ahead, I think, of target, certainly ahead of the street, in the quarter and mentioned some timing of hiring. I wondered if you could talk about whether the cost savings or to what extent the cost savings were sustainable, durable savings versus just timing of adding costs like maybe hiring that might need to come back later in the year and in the next fiscal year. Thanks. Yeah, so as it relates to margin, you're right. I think it was a very good performance in Q1. And as you saw in our full year guide, David, we left operating income at the same level, even though revenues were coming down.
David Howard Windley: Alright, thanks for taking my questions.
Speaker Change #108: I'll just ask you one on margin.
Speaker Change #109: Seem to be a little ahead, I think of target certainly hit the street.
Speaker Change #109: In the quarter and mentioned some timing of hiring I wondered if you could talk about whether the cost savings or to what extent the cost savings were.
Speaker Change #109: Sustainable durable savings versus just timing of adding costs like maybe hiring.
Speaker Change #110: Need to come back later in the year and in the next fiscal year. Thanks.
Speaker Change #111: Yes, so as it relates to margin you are right I think it was it was a very good performance in Q1 and as you saw on our full year Guide David.
Speaker Change #111: Operating income at the same level, even though revenues coming down.
Timothy Stephen Cabral: I do think over the last couple of quarters, you've heard us talk about very focused hiring. You know, one of the hallmarks of Veeva is being an incredibly efficient company and being, you know, Peter and I would talk about sort of lean teams. And I do think that we are, we're seeing that play out a little bit in some of this focused hiring that you've seen over the last couple of quarters. And the result of that is, to your question, less.
Speaker Change #111: I do think over the last couple of quarters, you heard us talk about.
Speaker Change #111: Very focused hiring.
Speaker Change #112: One of the I think the hallmarks of <unk> is being an incredibly efficient company and being Peter and I would talk about sort of lean teams and I do think that we are.
Speaker Change #112: We're seeing that play out a little bit and some of this focused hiring that you've seen over the last couple of quarters and the result of that is is less to your.
Speaker Change #112: A question sort of additional costs now of course, we have a large market opportunity in front of us and we will continue to invest appropriately against that large market opportunity.
Timothy Stephen Cabral: Now, of course, we have a large market opportunity in front of us, and we'll continue to invest appropriately against that large market opportunity, but what you're seeing is a very efficient company delivering a margin result. Great, thanks for that.
Speaker Change #112: But what Youre seeing is a very efficient company to deliver a margin result.
David Howard Windley: And let's follow up on a slightly different topic. You mentioned in your prepared remarks a couple of different areas where you're kind of breaking into what sounds like, incremental, I'll call them not brand new, but incremental client bases like the Vault CRM medical device client that you mentioned and Vault Basics moving down into smaller biotech. Are these incremental TAM opportunities, or would these be things that you would have basically already included and contemplated in previous discussions? Yeah, let me, let me take those.
Speaker Change #113: Great Thanks for that.
Speaker Change #114: Follow up slightly different topic, you mentioned in the prepared remarks, a couple of different areas, where youre kind of breaking into what what sounds like <unk>.
Speaker Change #115: Incremental alcohol not brand, new but incremental client bases like the vault CRM medical device, a new client that you mentioned in and involve basics moving down into smaller biotech are these.
Speaker Change #116: Incremental tam opportunities or would these be things that you would have basically already included and contemplated in previous discussions.
Speaker Change #117: Yes, let me let me take those so.
Peter P. Gassner: So, let me address the MedTech one first. That was an interesting one. That's a MedTech company that is committed to Valve CRM. It will be one of our largest new deals as they scale to conduct their full deployment. This is a company that operates like a pharma company. Their selling model is not unlike a pharma company. This is a conversion from custom Salesforce.
Speaker Change #118: Let me address the Med Tech one first time was that was an interesting one that's a med tech company that.
Speaker Change #118: As committed to Ralph CRM, It will be one of our largest new deal such as they scale took to full deployment.
Speaker Change #118: This is a company that operates like a pharma company Theyre selling model is not unlike a pharma company.
Speaker Change #118: As a conversion from custom sales force the company as <unk> been talking to us for a number of years. They wanted to use veeva CRM, but we werent able to sell it to them. So.
Peter P. Gassner: The company had been talking to us for a number of years, and they wanted to use Veeva CRM, but we weren't able to sell it to them. So this is one that now took advantage of the opportunity of us moving to Vault, and they get everything that we're able to offer in Vault CRM. So that's an exciting one. There are other companies like that, but that's a subset of the overall MedTech CRM market. And then you mentioned Vault Basics. And Vault Basics is about these very small companies and being able to get them started on something that we run and operate for them. There is no implementation.
Speaker Change #118: This is one that took advantage of the opportunity of us moving to vault and they get all of the everything that we are able to offer and volunteer hours. So that's an exciting one.
Speaker Change #118: There are other companies like that but that's.
Speaker Change #118: That's a subset of the overall med tech CRM market.
Speaker Change #118: And then you mentioned vault basics and vault basics is about is very small companies and being able to get them started on something that we run and operate for them. There is no implementation, it's very efficient sufficient for them, we're giving them access to the very best software in a very efficient way.
Peter P. Gassner: It's very efficient. It's efficient for them. We're giving them access to the very best software in a very efficient way. All of this is included in the overall market opportunity that we talk about. We talk about our total TAM. It's not additive to that. It's growing into that. Thanks a lot.
Speaker Change #118: All of these are included in the overall market opportunity that we talked about when we talk about our total Tam it's not additive to that it's growing into that.
Speaker Change #119: Excellent. Thank you.
Peter P. Gassner: Thank you. I would say on that ball of basics, all this time in there, this is Peter, that's a super interesting area I'm very excited about, for these companies under 200 employees to get, Veeva bought systems with no implementation, and to be able to run on our processes. So we're not asking them, how would you like to configure processes, et cetera.
Peter: I would say on that bought basics at this time and there this is Peter.
Speaker Change #120: Super interesting area I'm very excited about that for these companies under 200 employees to get.
Veeva vault systems with no implementation costs.
Speaker Change #120: And to be able to run on our processes. So we're not asking them how would you like to.
Speaker Change #120: Configure processes et cetera, Theyre, just moving right on to industry standards EBIT processes.
Peter P. Gassner: They're just moving right on to industry-standard Veeva processes. We couldn't address that end of the market very well before; now we can, and then the companies can graduate to full vault. It's as if, you know, you could start with QuickBooks, and then you could just flip the switch and graduate to SAP and start that SAP implementation. That would be crazy, right?
Speaker Change #120: We couldnt address that and to the market very well before now we can and then the company's congratulate to full pull vault. It does if you could start with Quickbooks and then you can just flip the switch and graduate to SAP.
Speaker Change #120: Start that SAP implementation that would be crazy right.
Peter P. Gassner: That's what we're doing with Vault Basics. And surprisingly, yes, Paul's right, it's included in our overall $13 billion R&D team. But this segment of all basics is actually, it's actually about a $100 million segment, or maybe even a little more that we couldn't address. So super excited about it, and just a little more color.
Speaker Change #120: That's what we're doing with Walt Piecyk and surprisingly, yes pause right. It's included in our overall 13 billion R&D Tam, but this segment evolve basics is actually it's actually about $100 million segment or maybe even a little more that we couldnt address before.
Speaker Change #120: So.
Speaker Change #120: Super excited about it.
Speaker Change #120: And just a little more color.
Peter P. Gassner: You know, we have four values in, [inaudible] Do the right thing. That's about, you know, integrity, and customer success. The fourth one is Speed, that's about getting things done quickly and correctly the first time you get them done.
Speaker Change #120: We have four values in the company.
Speaker Change #120: Stack rank.
Speaker Change #120: Do the right thing that's about integrity customer success employee success and then the fourth one is speed that's about getting things done quickly and correctly. The first time if you can.
Peter P. Gassner: Vault Basics, that idea was started in the second half of last year. 12 months ago, and to accomplish that already with these customers, that's tremendous. And then we have to remember that the decision, the announcement, to go to Vault CRM from the Salesforce platform was only announced 18 months ago, and the decision was just shortly before that. Now we have hundreds of people on the product team working on Fault CRM, hundreds of people. We have Veeva CRM successfully in stability mode. (inaudible) We would get bigger, and our speed would slow down.
Speaker Change #120: Bulk basics that idea was started in the second half of last year less than 12 months ago to accomplish that already with these customers that's tremendous.
Speaker Change #120: And then we have to remember that the decision the announcement to go to two well CRM from Salesforce platform literally announced 18 months ago. When the decision was just shortly before that now we have hundreds of the product team working on bulk CRM hundreds of people we have veeva CRM.
Speaker Change #120: <unk> stability mode.
Speaker Change #120: Free Enterprise top 20 is committed and multiple customers' lives so that I think.
Speaker Change #120: It gives me a lot of optimism I always thought we could slow down or speed.
Speaker Change #120: Good.
Speaker Change #120: We will get bigger and our speed with slowdown turns out.
Peter P. Gassner: Turns out we're going pretty fast, so I'm glad you asked about Vault Basics and reminded me of Vault CRM. So there you go. You got more than you bargained for with that question.
Speaker Change #120: I'm pretty fast.
Speaker Change #120: I'm glad you asked about both basics and reminded me of bulk CRM. So there you go you got more than you bargained for with that question how about that.
Peter P. Gassner: How about that? Thank you. I appreciate that. All right. The next question comes from D.J. Hynes with Canaccord Genuity.
Speaker Change #121: I appreciate that.
Speaker Change #121: Alright.
Speaker Change #122: The next question comes from the line of DJ Hynes with Canaccord Genuity.
Please go ahead.
David E. Hynes: Please go ahead. Hey guys. Peter, Paul, I don't I don't think we've had the chance to speak with you since the expanded Salesforce IQVIA partnership was announced to co-develop their Life Sciences Cloud. It's an impossible question to answer, given we don't really know what that product is going to look like. But what's the industry chatter surrounding that? How should we think of that as a potential longer-term threat? Any color would be helpful.
Peter: Hey, guys Peter.
Peter P. Gassner: Peter Paul I don't I don't think we've had the chance to speak with you since the expanded Salesforce IQ via partnership was announced to co develop their life Sciences cloud.
Speaker Change #123: It's an impossible question to answer given we don't really know what that product is going to look like but what's the industry chatter been surrounding that how should we think of that as a potential longer term threat any color would be helpful.
Paul Shawah: Yeah, hey DJ, I can take that. So you're right. For those that haven't heard about it, you're right; it happened in the quarter.
Speaker Change #124: Yes, Hey, DJ I can take that.
Speaker Change #125: So you are right for those that haven't been haven't heard about it you run it happened in the quarter and I think <unk>.
Paul Shawah: And I think that QV announced that Salesforce has licensed OCE with the intention, the rights to use OCE with the intention of using it to build their future CRM product based on top of it. So that's what the arrangement looks like. I was a little bit surprised, but honestly, given that Salesforce announced a future CRM and they're going to build it on a product that hasn't worked well in the marketplace. So OCE has played out over the last six or seven years.
Speaker Change #126: <unk> announced that Salesforce has a license oce with the intention of the rights to use oce with the intention of using it to build their future CRM product based.
Speaker Change #126: On top ups.
Speaker Change #126: So that's what the arrangement looks like I was a little bit surprised quite honestly.
Speaker Change #126: Given that Salesforce announced future CRM or theyre going to build it on a product that hasnt worked well in the marketplace. So she has played out over the last six or seven years.
Paul Shawah: And the product hasn't gained any traction; it hasn't worked well for big customers. So from that standpoint, from a product strategy standpoint, it seems like a little bit more like a hindrance than it might be an accelerator. The other thing is, I heard some customers talking about it and mentioning it at Summit. Summit's a good place for us to check the pulse of customers and, obviously, share everything that we're doing in our innovation. I guess the market chatter was also a little bit surprised; I would say it was lukewarm to slightly negative, and mainly for the same reason, right?
Speaker Change #126: The product Hasnt gained any traction it hasnt worked well for big customers. So from that standpoint from a product strategy standpoint, it seems like a little bit more like a hindrance and it may be an accelerator the.
Speaker Change #126: The other thing is.
Speaker Change #126: I heard some customers talking about it mentioning about mentioning it.
Speaker Change #126: So that's a good place for us to check the pulse of customers, obviously share everything that we're doing in our innovation.
Speaker Change #126: I guess the market chatter was also a little bit surprised I would say it was lukewarm too.
Speaker Change #126: Slightly negative.
Mainly for the same reason right the industry is well aware of the history of <unk> in the marketplace.
Paul Shawah: The industry is well aware of the history of QV and OCE in the marketplace. So, to answer your question from an overall impact standpoint, I don't really see any impact either from a product or a go-to-market standpoint. It's not something that I see as material and potentially even more of a distraction for our competitors. Yeah, Peter, the one specific one I heard was, you know, I didn't talk to every customer at Summit, but a couple, for sure, quite a few, the ones that the small companies that you had heard about somebody being on OCE went with OCE, they're not happy about that, because now that IQV is kind of getting So that was, That's just one specific thing I heard as well.
Speaker Change #126: So I would say to answer your question from an overall impact standpoint, I don't really see any impact from a either from a product or a go to market standpoint, that's not.
Speaker Change #126: What I see as material and potentially even more of a distraction for our competitors.
Speaker Change #127: Got it that makes leader.
Speaker Change #128: The one specific one.
Speaker Change #128: <unk> was <unk>.
Speaker Change #128: To every customer at summit, but a couple.
Speaker Change #128: For sure now quite a few of the ones that the small companies that you had heard of somebody been on Oce went with Oc, they're not happy about that because now that that activity is kind of getting out of that and there is not as smooth a way to get to the Salesforce thing so that was.
Speaker Change #129: That's just one specific thing I heard as well, yes, yes, okay. That's helpful. Thank you.
Peter P. Gassner: Yeah, yeah. Okay, that's helpful. Thank you. And I was also a little surprised you had eight wins.
Speaker Change #130: And I was also I was a little surprised you had eight wins granted these are mid market customers with Veeva CRM right before vault CRM.
Speaker Change #131: Set to go live was that just.
David E. Hynes: Granted, these are mid-market customers with Veeva CRM, right before Vault CRM was set to go live. Was that just because the functionality wasn't fully there on Vault CRM, which, You know, pushed them to choose Vault CRM or help me understand what happened there? Yeah, it was based on it to some extent based on their requirements. And yeah, obviously, they know we're going to Vault CRM, and the move for those companies when the timing is right from Veeva CRM to Vault CRM is really not an issue. It's It's not going to be a big deal.
Speaker Change #131: The functionality wasn't fully there on volte CRM, which.
Speaker Change #131: Pushed them to choose Veeva CRM or wanted to help me understand what happened there.
Speaker Change #132: Yes, it was based on.
Speaker Change #133: Some extent based on their requirements and.
Speaker Change #133: We're going to have all CRM and the move for those companies when the timing is right from Veeva CRM. The Volte CRM is really a non issue.
Paul Shawah: Right. So it's not, It's not that big of a deal for a company, even starting two months ago on Veeva CRM, that transition will be quite easy. So not such a big deal, but that that'll be the last one. So going forward, everything will be, as we mentioned, on Vault CRM. Yeah, get them over the finish line into the family.
Speaker Change #133: <unk> not going to be a big deal right. So it's not it's not that big of a deal for a company even starting two months ago on Veeva CRM that transition will be.
Speaker Change #133: It will be quite easy.
Speaker Change #133: So.
Speaker Change #133: Not so much but that'll be the last one so going forward everything will be as we mentioned on ball Sierra get them over the finish line into the family and then we'll move them over when the time is right.
Paul Shawah: And then we'll move them over when the time is right. That's right. Yeah, I think it's really driven by the customer choice to remember some of these companies are launching their products for the first time. Wow, is that a stress? They know Veeva CRM so much. They know it absolutely works.
Speaker Change #134: That's right, yes, I think it was really driven by the customer choice to remember some of these companies. They are launching their products for their first time Wow satisfy us full time.
Speaker Change #134: They know Veeva CRM so much they know it absolutely works. They know they can migrate later to volunteer them. They know they have five years to do it so for some of them. It's just a.
Peter P. Gassner: They know they can migrate later to Vault CRM. They know they have five years to do it. So for some of them, it's just a.
Peter P. Gassner: The De-Risking Strategy. Yeah, yeah. Okay. Thank you for the call. Your next question comes from the line of Jack Wallace with Guggenheim Securities. Please go ahead. Hi, team.
Speaker Change #134: De risking strategy.
Speaker Change #135: Yeah, Yeah, Okay. Thank you for the color.
Speaker Change #136: Your next question comes from the line of Jack Wallace with Guggenheim Securities.
Speaker Change #137: Please go ahead.
Jack Dawson Wallace: Thanks for taking my questions. Just wanted to talk about some of the big deals that you have out there. Obviously, you can't win all of the top 20, say, in the next quarter for the EDC or CDMS deals.
Speaker Change #138: Hi team thanks for taking my questions.
Jack Dawson Wallace: Just wanted to talk about some of the big deals that you have out there obviously you can't win all of the top 20 in the next quarter for <unk>.
Jack Dawson Wallace: <unk>.
Speaker Change #140: Deals, but as we're starting to merge timelines here.
Speaker Change #140: Was that pipeline as well as the migration on the CRM platform to vault are there conversations happening at the highest levels within your largest customers talking about migrating to the vault platform on both sides of the house in and around the same time.
Jack Dawson Wallace: But as we're starting to merge timelines here, with that pipeline, as well as the migration of the CRM platform to Vault, you know, are there conversations happening at the highest levels within your largest customers talking about migrating to the Vault platform on both sides of the house at the same time? And, you know, in effect, you have a common data architecture for a broader AI strategy. Thank you. Yeah, the real straightforward answer there is no. We actually don't see that very often.
Speaker Change #140: And in effect.
Speaker Change #141: You have a common data architecture for a broader AI strategy. Thank you.
Speaker Change #141: Okay.
Speaker Change #142: Yeah, the real straightforward answer there is no we actually don't see that really.
Peter P. Gassner: The decisions in the commercial area are kind of made by the commercial team, the decisions in the clinical area are made by the clinical team, the decisions in the safety area are made by the safety team, and Compass data, that's different. There are some companies that have a pretty well-Veeva aligned strategy. So I think we get an incremental nudge there, you know, a little, a little extra, I wouldn't say push, but a little extra. Things just get a little easier if they have a broad Veeva strategy, but, You know, we have to win each area based on the functions and the merits and the timings in that area. And, you know, I really like that. In fact, we've set up everything about Veeva to be just that.
Speaker Change #143: The decisions in the commercial area kind of made by the commercial team decisions in the clinical area made by the clinical team decisions in the safety area made by the safety team in Compass data that strip front there are some.
Companies that have a pretty veeva align strategy. So I think we get incremental nudge there a little.
Speaker Change #143: A little extra I wouldn't say push but a little extra.
Speaker Change #143: <unk> get a little easier if they have a.
Broadly the strategy, but.
Speaker Change #143: We have to win each area based on the functions and the merits and the timings in that area and I really liked that in fact, we have set up everything about veeva to be that way, we need to win the business in each area that ensures we have an excellent product in each area.
Peter P. Gassner: We need to win business in each area, and that ensures we have an excellent product. So I like it. It's been one of the keys to our success. We have to win business in each area. Therefore, sometimes, especially when you're a multi-product company, you have a lot of different products. Boy, the worst thing you could have is to make a sale to an existing customer where you have your product. That's a tremendous net negative for Veeva.
Speaker Change #143: So I like it its been one of the keys of our success, we have to win the business in each area.
Speaker Change #143: Therefore.
Speaker Change #143: Times, especially when you are a multi product company you have a lot of different products.
Speaker Change #143: The worst thing you can have is to make a sale into existing customer where you have for your product isn't as good.
Speaker Change #143: That's a tremendous net negative for D that so we don't want that.
Peter P. Gassner: So we don't want it, so that's how we. That's how we operate. Got it. Thank you, Peter. And then, Tim, this one's for you.
Speaker Change #143: So that's how we.
Speaker Change #143: That's how we operate.
Timothy Stephen Cabral: Just thinking about some of the changes in billing terms we saw this quarter, and it appears like you moved to more quarterly billing had been in anticipation last year, it didn't maybe happen as much as we would have thought. Just the check sizes are getting larger. Should we expect that billing terms will, over time, become more quarterly versus annual, particularly with your largest customers writing the largest checks? Yeah, Jack, it's a good question.
Speaker Change #144: Got it thank you Peter and then.
Speaker Change #145: Ken this one's for you.
Ken Wong: Just thinking about some of the changes in billing terms, we saw this quarter and it did.
And it appears like.
Ken Wong: Move to more quarterly had been in anticipation last year didn't maybe happen as much as we would've thought just the check sizes are getting larger.
Speaker Change #146: Should we expect that billing terms over time will become more quarterly versus annual particularly with your largest customers cutting the largest checks.
Timothy Stephen Cabral: I don't think we've seen a pattern that aligns to the size of the deal with the payment term frequency. So I wouldn't necessarily say that that is the pattern we're going towards or the path that we're on. I think these deal frequency, excuse me, payment frequency decisions are very much customer by customer and, and somewhat area by. Got it. Thank you. Your next question comes from the line of Craig Hettenbach. Morgan Stanley, please go ahead.
Speaker Change #147: Yes, Jack its a good question.
Speaker Change #148: Don't think we've seen a pattern that aligns to size of deal with the payment term frequency.
Speaker Change #148: So I wouldn't necessarily say that that is the pattern, we're going towards or the path that we're on I think these deal frequency excuse me payment frequency decisions are very much customer by customer and and somewhat area by area.
Speaker Change #149: Got it thank you.
Speaker Change #150: Your next question comes from the line of Greg Heckman Bock with Morgan Stanley. Please go ahead.
Craig Matthew Hettenbach: So services have been weak for over six months now, and you're not the only company seeing an impact. Where do you think customers are with the kind of rationalization of projects? And what are some things you're looking at in terms of stabilization and ultimately a recovery in that? This is Peter. I'll take that one. Services, we're really in that for customer success, right? That's where we can do those services and do them profitably. So we're not really looking to optimize revenue there per se.
Speaker Change #151: Thank you so services has been weak for over six months now and you're not the only company seen an impact where do you think customers are with kind of rationalization of projects and what are some things you are looking at in terms of stabilization and ultimately a recovery.
Speaker Change #151: And in that business.
Peter: This is Peter I'll take that one.
Speaker Change #152: Services were really in that for customer success, but that's where we can do those services and do them profitably. So we're not really looking to optimize revenue there per se.
Peter P. Gassner: In terms of customers and when things reach a steady state, you know, there's gonna be ebbs and flows as more things go to Veeva or more things go to partners or as we get more efficient. For example, the customers moving on to Vault Basics there. That's super interesting.
Speaker Change #152: In terms of the customers and when things reach a steady state.
Speaker Change #152: There's going to be ebbs and flows has more things go to veeva or more things go to partners or as we get more efficient for example, the customer's moving on 12 basics there that's super interesting.
Peter P. Gassner: Now some of those customers, granted, we wouldn't have got before because we didn't have a product. Some of those customers we might have got on the regular Veeva, and that would have been significant services revenue, and all of that services revenue is no longer, trading that off for subscription. For this year, the services revenue impact is due to the timing of these deals, so if we have a large deal that was maybe it was going to start in Q2, but now it's going to start in Q4, that obviously pushes the revenue out. I see no macro-level change in our service capability and appetite. It's just in the timing.
Speaker Change #152: Now some of those customers granted we wouldn't have got before because we didn't have a product thats. It.
Speaker Change #152: Some of those customers, we might have got on the regular veeva and that would have been significant services revenue.
Speaker Change #152: All of that services revenue is no longer with.
Speaker Change #152: Trading that up for subscription revenue.
For this year the services revenue impacted by the timing of these deals. So if we have a large deal that was maybe it was going to start in Q2, but now it's going to start in Q4 that obviously pushes the revenue out.
Speaker Change #152: No macro level change in our services capability.
Speaker Change #152: And the appetite.
Speaker Change #152: It's just in the timing.
Peter P. Gassner: One of the nice things about these core systems of record is, when, when, when there's delays, it really just holds up demand till later because they're not options. On the EBC side, for some of the ramping deals you have, just wanted to look for an update on how those are progressing and how you're thinking about contribution through this year and going forward. I'll take that one, Tim, and then maybe, at first, then maybe think about contribution. The projects that we sold, the big EDC deals, are going well, some of them. A couple of them I'm thinking about; they have their first studies live.
Speaker Change #152: One of the nice things about these core systems of record is.
Speaker Change #152: When when Theres delays it really just the demand gets pent up till later.
Speaker Change #152: Because they're not optional things.
Speaker Change #153: Got it that's helpful and then on the EDC side for some of the ramping deals you have just just wanted to look for an update on how those are progressing and how youre thinking about contribution kind of through this year and going forward.
Speaker Change #152: Okay.
Speaker Change #154: I'll take that one Tim and then maybe at first and then maybe you can think about contribution of the projects that we that we sold the beginning she deals are going well.
Speaker Change #155: Some of them yes.
Peter P. Gassner: Now, when they do their first studies live, they pick less complicated studies. These are a way to learn and test out their process. Both of them have Significant milestones coming in the next, between the next 12 and 18 months where all their new studies will be live on Veeva. There's a tight integration type that disrupts, you know, communication with our product team and our services team. So I think that's going well. It's helping to improve our product and our services offer. I'm really very happy at EDC.
Speaker Change #156: All of them I am thinking about they have their first study slides now when they do their first study slide they pick less complicated studies. These are a way to learn and test out their processes.
Speaker Change #156: Most of them have.
Speaker Change #156: Significant milestones coming in the next.
Speaker Change #156: The next 12 months to 18 months, where all their new studies will be live on Veeva.
Speaker Change #156: There's tight integration tight.
Speaker Change #156: Communication with our product team and our services team. So I think thats growing well, that's helping to improve our product and our services offerings.
Speaker Change #156: I'm really very happy with our execution in EDC in terms of the ramping and how that flows into our.
Timothy Stephen Cabral: In terms of how the ramping and how that flows into, you know, our financial results in revenue, Tim, do you want to take that one? Sure. Yeah, I think, you know, as we've said before, on the EDC side, these are typically longer in terms of the duration of the original arrangements, and the first couple of years of those arrangements are relatively small. So, while there will be some contribution, I don't expect us to see material contribution there, and that's included in the guidance that we've given today. I got it.
Speaker Change #157: Our financial results our revenue Tim do you want to take that one.
Tim Cabral: Sure Yeah, I think Peter as we've said before on the EDC side. These are.
Tim Cabral: Typically longer in terms of duration of the original arrangement.
Tim Cabral: And the first couple of years of those arrangements are relatively small so.
Speaker Change #158: While there will be some contribution I don't expect us to see material contribution there and that's included in the guidance that we've given today.
Speaker Change #159: Got it thank you.
Speaker Change #159: Okay.
Timothy Stephen Cabral: Thank you. Your next question comes from the line of Ryan MacDonald with Needham. Please go ahead. Hey, thanks for taking the question. This is Matt Sheahan with Needham.
Speaker Change #160: Your next question comes from the line of Ryan Macdonald with Needham.
Speaker Change #161: Please go ahead.
Ryan Michael MacDonald: Maybe, or for Ryan, maybe circling back to the data cloud, I wanted to ask you about: Seems like nice progress there with over 100 customers now and early adopters on your newer product. Where are you attracting these wins from? Are they greenfield opportunities? Are you winning them away from incumbents? And if incumbents, there are a lot of options out there. So I'm just curious what you've seen has been your biggest point of competitive differentiation. That's a good question. I think...
Speaker Change #161: Hey, Thanks for taking the question. This is Matt Shea on for Needham, maybe Brian maybe circling back to the data cloud wanted to ask about links it seems like nice progress there with over 100 customers now and early adopters on your newer products.
Speaker Change #161: Where are you attracting these wins from are these greenfield opportunities or are you winning them away from from incumbents and if incumbents theres a lot of options out there. So just curious what you've seen has been your biggest point of competitive differentiation.
Speaker Change #162: That's a good question I think.
Peter P. Gassner: It is a mix of Greenfield and incumbents, which is, which is different than something like a CRM system or an ETMS system. There, people have those systems, and we're replacing them. Here, sometimes we're replacing incumbents that are just, you know, not as good as, and when we do that, it's because their data quality. The products and the software on top of it are far superior.
Speaker Change #163: It is a mix of greenfield and incumbent which is which is different than something like a CRM system or <unk>.
Speaker Change #163: <unk> system, there people have those systems and we're replacing incumbents here. Some sometimes we're replacing incumbents that are just not as and when we do that its because of our data quality is far superior and the software on top of it is far superior.
Peter P. Gassner: The price is a bit higher, maybe, than what they were used to before on LINQ, but the product is far superior. We invested heavily in that product. And then sometimes, especially for smaller companies, and sometimes even for larger companies, they have no organized system. They would ask a consultant to do some market research and make some reports and things like that, but they know they have no system. So those are the kind of
Speaker Change #163: The prices a bit higher maybe than what they're used to before on link but the product is far superior we invested heavily in that product in that data.
Speaker Change #163: Then, sometimes especially for smaller companies and sometimes even for larger companies. They had no organize system.
Speaker Change #163: Ask a consultant to do some market research.
Speaker Change #163: Some reports and things like that they had no system of reference to go to so those are the dynamics we see.
Peter P. Gassner: Gotcha, that's helpful. And then maybe just quickly on Vault Basics, got a couple customers that went live in May, just wondering what early feedback has been like, and then I guess given the opportunity to land more of these small biotechs to grow alongside them, how heavily do you plan to lean in on this for sort of wait for more macro recovery? Feedback, it's probably a little early to get anything comprehensive feedback.
Speaker Change #163: Hi, Jeff that's helpful. And then maybe just quickly on vault basics got a couple of customers that went live in May just wondering what early feedback has been like and then I guess given the opportunity to land more of these small biotechs and grow alongside them. How heavily do you plan to lean in on this for sort of wait for more macro recovery.
Speaker Change #163: Okay.
Peter P. Gassner: We've gotten good feedback through the cycle. I guess that's, you know, the fact that customers are buying them. Even though when the product was quite early, they really bought into the concept; so far, it's been smooth in the first weeks, but too early to get a lot of concrete feedback. And then, in terms of the go forward, yeah, we think there's certainly a pipeline there for Vault Basics. We're very happy about that.
Speaker Change #164: Feedback, it's probably a little early to get anything comprehensive feedback we've gotten good feedback through the cycle I guess thats the.
Speaker Change #164: Fact that the customers are buying.
Speaker Change #164: Even though when the product was quite early they really buy into the concept. So far it's been smooth in the first weeks, so but too early to get a lot of concrete feedback.
Speaker Change #164: And then in terms of the go forward.
Speaker Change #164: Yes, we think there is theres certainly pipeline there revolve basics and.
Peter P. Gassner: I think if interest rates come down some, you know, our funding environments get better, there could be more small biotechs starting up again, and that'll be more for us. But it's really, our focus now is with these customers to fine-tune the process, make the products really, really great, and make the process really, really great. And then we have some expansion with WellPay 6, too, some more applications we will put in there, such as our PTMS product, Clinical Trial Management, and our QMS product. And we'll look for other things to do over time. Vault Basics for Veeva is definitely not a flash in the pan.
Speaker Change #164: We're happy about that I think if interest rates come down some.
Speaker Change #164: Funding environments get better there can be more small biotech starting up again and that will be more.
Speaker Change #164: For us, but it's really.
Speaker Change #164: Our focus now with these customers to fine tune the process make the products really really great make the process really really great and then we have some expansion with vault <unk> to some more applications. We would put in there such as our Tms product clinical trial management system.
Speaker Change #164: In our <unk> product and we will look and we will look for other things to do overtime as well.
Speaker Change #164: Basics for Veeva is definitely not a flash in the Pan. This is a fundamental thing where we can help the industry grow in the small emerging biotech area be very profitable for veeva and provide a super smooth onramp onto the cobalt when you need to overtime. Yes. This is going to apply to the CRM. This is going to apply to.
Peter P. Gassner: This is a fundamental thing where we can help the industry grow in the small emerging biotech area, be very profitable for Veeva, and provide a super smooth on ramp and onto the full vault when you need to. You know, over time, this is gonna apply to CRM. This is gonna apply to our commercial products over time. It was a fundamental decision discussed deeply at the board level last year. Transcripts provided by Transcription Outsourcing, LLC.
Speaker Change #164: In our commercial products overtime.
Speaker Change #164: A fundamental.
Speaker Change #164: Let you know what I mean is a fundamental decision discuss deep at the board level last year. We view it is really really important interestingly enough some of our best innovative ideas.
Speaker Change #164: Coming from the bulk basics because.
Peter P. Gassner: It's helping us standardize. Standardization is going to help us in all types of areas and help the industry. It makes sense.
Speaker Change #164: It's helping to standardize.
Speaker Change #164: Standardization is going to help us in all in all types of areas and a healthy industry and I'll touch experience.
Speaker Change #164: Yeah.
Makes sense thanks Peter.
Charles Rhyee: Thanks, Peter. Your next question comes from the line of Charles Rhyee with TD Coward. Please go ahead.
Speaker Change #165: The next question comes from the line of Charles.
Speaker Change #164: Hey.
Speaker Change #166: With PD Cowen.
Speaker Change #167: Please go ahead.
Charles Rhyee: Yeah, thanks. Thanks for taking the questions. Hey, Peter, in your prepared comments, you kind of noted that the challenging environment is causing problems, particularly among your top 50 by farming along with Q4 rather than Q2 and Q3. Can you talk about sort of the visibility you have for, you know, sort of that kind of comment here?
Charles: Yes, thanks for taking the questions.
Peter in your prepared comments, you kind of noted that the challenging environment is causing particularly among your top 50, biopharma along with Q4, rather than Q2 or three can you talk about sort of the visibility you have for sort of that kind of comment here is that from just direct indications in conversations with clients at the <unk>.
Peter P. Gassner: Is that from just direct indications and conversations with clients that they plan to add solutions, but maybe not till later this year? Yeah, probably the easiest way, this is what your question was about as related to the deal delay that I referenced in the prepared remarks specifically to the R&D and specifically to the, you know, large companies, the enterprise top 50. Yeah, those are based on our, actually, on our sales forecast, right on our, these are active opportunities we're managing, and maybe have been tracking for a long time, could be six months, a year, two years, you know, we're tracking these things. So it's based on our field teams and our product teams' interactions with these customers and based on their best. So that's not done by a formula, right That's done by an individual.
Speaker Change #169: To add solutions that may be not till later this year.
Speaker Change #169: Yes.
Speaker Change #170: Probably the easiest way this is.
Speaker Change #171: What's your question was about as it related to the deal delay that I referenced in the prepared remarks, specifically into the R&D Institute really into the.
Speaker Change #172: The large company the enterprise top 50 type companies yeah those are.
Speaker Change #172: These are based on are actually on our sales forecast right on our these are active opportunities, we're managing and maybe have been tracking for a long time could be six months a year two years. We're tracking these things. So it's based on our our field teams and our product teams interaction with these customers and based on their best judgment.
Speaker Change #172: Because it's not so that's investments done by Formula that's done by individual discussions.
Peter P. Gassner: Got it, understood. And then maybe, Tim, you know, if we look at billions of growth for the balance of the year, it looks like you're basically estimating around 90-10% growth. Should we think of that as sort of the benchmark as we think about growth beyond fiscal 25? Is that sort of like a good jumping off point?
Speaker Change #173: Okay got it understood and then maybe Tim.
Speaker Change #174: If we look at billings growth for the balance of the year it looks like business estimate around 90% to 10% growth.
Speaker Change #175: Should we think of that as sort of the benchmark as we think about growth beyond fiscal 'twenty five is that sort of like a good jumping off point or because obviously <unk> has been more in the mid teens of the past.
Timothy Stephen Cabral: Because obviously, billions growth has been more in the mid-teens of the past year or so. How should we think about this as maybe a new starting point? Yeah, Charles, two things to consider there.
Speaker Change #175: The past year or so how should we think about.
Speaker Change #176: This is maybe a new starting point.
Timothy Stephen Cabral: Number one, I don't want to imply or give any guidance outside of fiscal 25 on the call today. But as you think about the billings guidance that we gave today, one thing to consider is our services revenue growth year on year, which, as you know, pretty much every dollar of service revenue shows up in the same year from a billings perspective. That is sitting right now at a low single-digit percent growth. So those would be the two things that I would give more color on as it relates to our billings guidance. So the assumption is that as...
Speaker Change #177: Yes, Charles two things to consider there number one.
Speaker Change #178: I don't want to imply or give any guidance outside of fiscal 25 on the call today, but as you think about the billings guidance that we gave today one thing to consider is our services revenue growth year on year, which as you know.
Speaker Change #178: Pretty much every dollar of service revenue shows up in the same year from a billings perspective.
Speaker Change #178: That is sitting right now at a low single.
Speaker Change #178: A single percent growth. So those would be the two things that I would give more color on as it relates to our our billings guidance.
Speaker Change #178: So the assumption being that as the <unk>.
Timothy Stephen Cabral: The services part of the market rebounds because that is, in the current year, you know, that's a 9 to 10, but it's basically kind of artificially impacted this year, the way to think of it. Again, not implying any rebound or any future guidance here, Charles, but this services revenue growth rate relative to historical services revenue is very, very low. And we're back to some of the commentary that Peter put in his remarks.
Speaker Change #178: Service as part of the market rebound because that is in the current year.
Speaker Change #178: So nine to 10 million.
Speaker Change #178: Basically you can artificially impacted this year as a way to think of it.
Speaker Change #179: Again, not implying any rebound or any future guidance here Charles but.
Speaker Change #180: The services revenue growth rate relative to historical services revenue is very very low and its back to some of the commentary that Peter put in the remarks, specifically in terms of some of the deal timing that moved to later in the year, which just gives service.
Timothy Stephen Cabral: Specifically, in terms of some of the deal timing that moves to later in the year, which just gives services less days of revenue on those new projects to implement those critical Got it. And Peter, if I could ask one more real quick, you talked about sort of the funding environment, but you know, key funding for biotech was actually quite strong. Any reason why we haven't yet seen some of that maybe flow through for you guys? Or is that kind of two different things?
Speaker Change #181: It is.
Speaker Change #181: The last days of revenue on those new projects to implement those critical systems.
Speaker Change #182: Got it and then Peter if I could ask one more real quick is you talked about sort of the funding environment, but once the funding for biotech was actually quite strong.
Speaker Change #183: Reason why we haven't yet seen some of that maybe flow through for you guys or is that is that kind of two.
Speaker Change #183: Two different things, maybe some of that money is going more into clinical development versus technology investments.
Peter P. Gassner: Maybe some of that money is going more into clinical development versus technology investments? Yeah, I have seen the data about the funding picking up a little bit. But, as far as I can see, I wouldn't characterize that as quite strong yet.
Yes, I haven't seen the data about the funding picking up a little bit.
Speaker Change #184: Cause I can see I wouldn't I wouldn't characterize that as quite strong yet.
Peter P. Gassner: And still, the cost of that funding is relatively high. But there's always a delay, right? When there's funding and when funding gets announced, and then when you put those funds to use, there's always a bit of a delay. So if indeed the funding environment is actually getting better, we could see some positive benefits from that. But we haven't seen that yet.
Speaker Change #184: Still the cost of that funding is relative.
Speaker Change #184: Relatively high.
Speaker Change #184: But theres always a delay right. When you there is funding and when funding gets announced and then when you put those funds to use as opposed to a bit of delay so.
Speaker Change #184: If indeed, the funding environment is actually getting better we could see some positive benefits to that but we haven't seen that yet.
Gabriela Borges: Great, thank you for the comments. The next question comes from the line of... Gabriela Borges from Goldman Sachs. Please go ahead. Good afternoon.
Great. Thank you for the comments.
Speaker Change #185: Thank you.
Speaker Change #184: Sure.
Speaker Change #186: The next question comes from the line of tab.
Speaker Change #187: <unk> <unk> with Goldman Sachs.
Speaker Change #187: Please go ahead.
Peter P. Gassner: Thank you. I'll stay on the topic of the last question, which is, Peter, you've been in this industry for some time, and we've been in this sluggish environment for spending for a couple of years now. What do you think has to change or what are your customers telling you they're looking for in order to get to a better state of spending and to see maybe a resumption of some of these mission critical projects kind of come back to steady state?
Speaker Change #189: Good afternoon. Thank you stay on the topic off the last question, which is Peter you've been in this industry for some time and we've been in the sluggish environment and spending for a couple of months in Europe now.
Speaker Change #190: Do you think has to change or what are your customers telling you that are looking for.
Speaker Change #190: To get to a better state of sending them to see may be our assumption and then some of these mission critical projects kind of come back to steady state.
Gabriela Borges: Thank you. Unknown Speaker Yeah, I mean, to be fair, we are still growing, and customers are still doing things. So, you know, I can think of a lot of customers and the important projects that they're doing. So I don't want to imply at all that things are stagnant.
Peter: Yeah, I mean to be fair, we are still growing and customers are still doing things. So.
Peter: Can think of a lot of customers in the important projects that theyre doing so I don't want to imply at all that the things are stagnant.
Peter P. Gassner: As far as the macro environment of what could make the industry do better, probably, you know, the things we talked about, if interest rates take a favorable turn, if some of these global conflicts get resolved in a positive way, I think, You know, if the industry navigates the IRA successfully, a little bit more, you know, a little bit more political and legislative stability, those are the things that help. The industry so it's not that complicated really. They want stability and predictability, and it's a capital-intensive industry, especially at the smaller end, which feeds a lot of the innovation.
Peter: As far as the macro environment or what could make the industry do better I think that's.
Peter: That's probably the things we talked about interest rates take a favorable turn if some of these global.
Peter: Conflicts.
Peter: Solved in a positive way.
Speaker Change #191: Thank you.
Speaker Change #191: If we the industry navigates the IRA successfully a little bit more a little bit more political and legislative stability. Those are the things that helped.
Speaker Change #191: The industry so.
Speaker Change #191: It's not that complicated really they want stability predictability.
Speaker Change #191: And low end, it's a capital intensive industry, especially at the.
Speaker Change #191: Smaller end, which feeds a lot of the innovation. So it is an industry thats a little sensitive to interest rates.
Gabriela Borges: So it is an industry that's a little sensitive. Yes, that makes sense. The follow-up question I have is on CDMS, and more specifically, how you're thinking about developing functionality across the different phases of a clinical trial, so phase one, phase two, etc. Please share with us how that functionality is progressing and how you feel about the completeness of the solution across the different phases of the trial. Thank you. And to the clinical data management area, we have multiple products in there. EBC is a product to collect patient data.
Speaker Change #192: Yes that makes sense. Thank you.
Speaker Change #193: Follow up I have is on CDN and more specifically, how youre thinking about developing functionality across the different phases of our clinical trials phase one phase two et cetera.
Peter P. Gassner: We have randomization and trial supply management, and ePro to collect data directly from patients. All of those will work across all phases and do work across all phases today. So we have that complete functionality that works for all the different phases, but those products are at different levels of maturity, so it's really about the complexity of the trial, which you generally get into. You get phase twos, phase threes, and some phase fours. Pretty complex.
Speaker Change #194: And Sharon how that seasonality is progressing.
Speaker Change #195: How you feel about the completeness of proportion across the different phases of that thank you.
Speaker Change #195: Yes.
Speaker Change #196: The clinical data management area, we have multiple products in there.
Speaker Change #196: Fr or EDC product to collect patient data, we have randomization and trial supply management, we have.
Speaker Change #196: <unk> pro to collect the data directly from patients.
Speaker Change #196: All of those will work across all phases and due to work across all phases. Today. So we have that complete functionality that works for all of the different phases.
Speaker Change #196: But those products are in different levels of maturity. So it's really about the complexity of the trial, which generally you get in it.
Speaker Change #196: <unk> phase III and some phase four is pretty complex.
Peter P. Gassner: And we can handle all those trials, but with the EDC, that's where we have the most proven track record, and so I would say it's the most mature product in the clinical data management area. The RTSM is, I would say, the next most proven product.
Speaker Change #196: And we can handle all of those trials, but with EDC, that's where we have the most proven track record and so I would say, it's the most mature product and the clinical data management area.
Speaker Change #196: <unk>.
Speaker Change #196: I'd say the next most prudent and <unk>.
Peter P. Gassner: And EPRO is the younger product, and it just takes time for it to mature and for customers to.., you know, to have the reference selling. So we're beyond the, I guess to answer directly, we're beyond that stage where we could only work for certain pages of trial. We can work for all pages of trial for all, I appreciate the call. Thank you. Your next question comes from the line of Jailendra Singh with Truist Securities.
Speaker Change #196: As a younger product.
Speaker Change #196: It takes time to mature and for customers too.
Speaker Change #196: To to have that reference selling model start to work. So we're beyond that I guess to answer directly we're beyond that stage, where we could only work for certain.
Speaker Change #196: Phases of trial, we can work for all cases trial for all of our products at this time.
Speaker Change #197: I appreciate the color. Thank you.
Speaker Change #196: Yes.
Your next question comes from the line of Jay Linda Chang with <unk> Securities.
Speaker Change #198: Please go ahead.
Jailendra P. Singh: Please go ahead. Thank you. And thanks for taking my questions. And I missed the first few minutes of the call.
Speaker Change #199: Thank you and thanks for taking my questions and I missed the first few minutes of the calls so apologies if you already covered this.
Speaker Change #200: I wanted to ask about the pricing environment. There have been some discussions that pharma companies have been tighter than usual on pricing negotiations given the macro environment have you guys seen any of that as contracts come up for renewal you would pursue new business and as you look across your portfolio are there certain.
Speaker Change #201: <unk> video see less or more competitive pricing environment.
Peter P. Gassner: So apologies if you already covered this. First, I want to ask about the pricing environment. There have been some discussions that pharma companies have been tighter than usual on pricing negotiations, given the macro environment. Have you guys seen any of that as contracts come up for renewal, or even pursuing new business? And as you look across your portfolio, are there certain areas where you see less or more comparative pricing environments?
Speaker Change #201: Okay.
Speaker Change #202: I'll take that one no no change in the in the pricing dynamic and.
Jailendra P. Singh: I'll pick that one. No, no change in the pricing dynamics, and now there's no particular area where we see less or more. So it's business as usual there. We have to make a great product, prove the value, but no particular area.
Speaker Change #202: No Theres, no particular area, where we where we see less or more.
Speaker Change #202: So.
Speaker Change #202: Business as usual there we have to make a great product proved the value, but no particular change.
Peter P. Gassner: Okay, and then my quick follow up, any update on the permanent CFO search process, any update on timeline or skills that experience focus would be helpful. The search continues, and it's going well. I feel it's an orderly process. We're certainly talking to good candidates. I'm not going to disclose specific progress, but I would say we're active in it, and we are making progress. And we'll give you an update when we do. Great, thank you.
Speaker Change #203: Okay and then my quick follow up any update on the permanent vehicles, such processes and you bid on timeline or skill set experience focus there would be helpful.
Speaker Change #204: The search continues.
Speaker Change #205: Well I feel it's.
Speaker Change #205: Orderly process were certainly talking to candidates.
Speaker Change #205: I'm not going to disclose specific progress.
Speaker Change #205: But I would say we are active in it and we are making progress and we will give you an update when we can.
Speaker Change #206: Great. Thank you.
Thank you.
Peter P. Gassner: That concludes the question and answer session. I will now turn the call back over to Peter Gassner, CEO, for closing remarks. Please go ahead. 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. Thank you. Ladies and gentlemen, that concludes today's call. Thank you all for joining me. You may now disconnect. Please wait; the conference will begin shortly.
Speaker Change #207: That concludes the question and answer session I will now turn the call back over to Peter Gassner CEO for closing remarks. Please go ahead.
Peter P. Gassner: Thank you everyone for joining the call today and thank you to our customers for your continued partnership.
Peter P. Gassner: The team for your outstanding work in the quarter.
Peter P. Gassner: <unk>.
Speaker Change #208: Ladies and gentlemen that concludes today's call. Thank you all for joining you may now disconnect.
Speaker Change #209: Please wait the conference will begin shortly.
Speaker Change #209: [music].
Speaker Change #209: Okay.
Speaker Change #209: Yes.
Speaker Change #209: [music].
Speaker Change #209: Yes.
Speaker Change #209: Yes.
[music].
Speaker Change #209: Thanks.
Speaker Change #209: [music].
Speaker Change #209: Okay.
Speaker Change #209: Yes.
Speaker Change #209: Sure.
Speaker Change #209: Yes.
Speaker Change #209: Yes.
Speaker Change #209: Sure.
Speaker Change #209: Yes.
Speaker Change #209: [music].
Speaker Change #209: Yes.
Speaker Change #209: Yes.
Speaker Change #209: Okay.
Speaker Change #209: Yes.
Speaker Change #209: Okay.
Speaker Change #209: [music].