Q2 2025 Veeva Systems Inc Earnings Call

Krista: Ladies and gentlemen, good afternoon, my name is Krista and I will be your conference operator today. At this time, I would like to welcome everyone to the Viva Systems.

James Krista: James Krista, and I will be your conference operator today.

Gunnar Hansen: At this time, I would like to welcome everyone to the Veeva Systems Fiscal 2025 Second Quarter Results conference call. All lines have been placed on mute to prevent any background noise. And after the speaker's remarks, there will be a question-and-answer session. If you'd like to ask a question during this time, simply press star, follow the number one on your telephone, keep had. And if you'd like to withdraw that question, again, press star one. Thank you.

Speaker Change: SISCLE 2025, Second Quarter Results Conference Call.

Speaker Change: All lines have been placed on mute to prevent any background noise.

Speaker Change: and after the speaker's remarks, there will be a question and answer session.

Speaker Change: If you'd like to ask a question during this time, simply press star, full of A.N. Number 1 on your telephone, keep had. And if you'd like to withdraw that question, again press star 1. Thank you. I will now turn the call over to Gunnar Hansen, Director of Investor Relations.

Gunnar Hansen: I will now turn the call over to Gunnar Hansen, Director of Investor Relations. You may begin.

Gunnar Hansen: Good afternoon and welcome to Veeva's fiscal 2025 second quarter earnings conference call for the quarter ended July 31, 2024. As a reminder, we posted prepared remarks on Veeva's Investor Relations website just after one pan Pacific today. We hope you have had a chance to read them for the call.

Speaker Change: You may begin.

Gunnar Hansen: Good afternoon and welcome to Viva's fiscal 2025 second quarter earnings conference call for the quarter and age of lie 31st 2024. As we were in mind, we posted prepared remarks on Viva's investor relations website just after one pandemic today. We hope you have had a chance to read them for the call.

Gunnar Hansen: Today's call will be used primarily for Q&A with me today for Q&A, our Peter Yasner, our Chief Executive Officer, Paul Shawah, EVP Strategy, and Tim Cabral, our Interim Chief Financial Officer. During this call, we may make board-looking statements regarding trends or strategies and the anticipated performance of the business, including guidance regarding future financial results. These four looking statements will be based in our current views and expectations and are subject to various risks and uncertainties. Our actual results may differ materially. Please refer to the risks listed in our earnings release and the risk factors included in our most recent filing on Form 10-Q.

Speaker Change: Today's call will be used primarily for Q&A. With me today for Q&A, our Peter Gassner, our Chief Executive Officer, Paul Shalwa, CBP Strategy, and Tim Cabral, our interim Chief Financial Officer.

Speaker Change: During this fall, we may make board-looking statements regarding trends, our strategies, and the anticipated performance of the business, including guidance regarding future financial results.

Speaker Change: These four looking statements will be based in our current views and expectations, and are subject to various risk and uncertainties. Our actual results may differ materially.

Speaker Change: Please refer to the risk listed in our earnings release and the risk factors included in our most recent filing on Form 10Q.

Gunnar Hansen: For looking statements made during the call or being made as of today, August 28, 2024, based on the facts available to us today. If this call is replaced or viewed after today, the information presented during the call may not contain current or accurate information. We would just claim any obligation to update or revise any four looking statements. We may discuss our guidance on today's call, but we will not provide any further guidance or updates on our performance during the quarter unless we do so in public form. On the call, we may discuss certain non-GAAP metrics that we believe aid in understanding of our financial results.

Speaker Change: For looking statements made during the call or being made as of today, August 28, 2024, based on the facts available to us today.

Speaker Change: If this calls replay or view after today, the information presented during the call may not contain current or accurate information.

Speaker Change: The business claims any obligation to update or revise any board-looking statements.

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 course unless we do so in public form.

Speaker Change: On the call we made a cuts certain on that metric that we believe aid and understanding of our financial results.

Gunnar Hansen: A reconciliation that comparable gap metrics can be found in today's earnings release and in the supplemental investor presentation, both of which are available on our website.

Peter: A reconciliation that comparable gap measures can be found in today's earnings release, and in the supplemental and best of presentation, both of which are available on our website. With that, thank you for joining us, and I'll turn the color over to Peter.

Peter Yasner: With that, thank you for joining us, and I'll turn the call over to Peter. Thank you, Gunner, and welcome everyone to the call. Q2 was a strong quarter with results above our guidance. Total revenue in the quarter was 676 million, with non-GAAP operating income of 280 million. Thanks to the team, we advanced in all major areas with key product expansions and strategic customer wins. This included an important new release of the site connect to streamline clinical trials and the first release of service center in the serum suite. We have a clear product strategy and are executing well on our vision.

Peter: Thank you, Gunnar, and welcome everyone to the call. Q2 was a strong quarter with results above our guides. Tell Grevner in the court of its 676 million with non-gap operating income of 280 million.

Peter: Thanks for the team, we advance in all major areas with key product expansions and strategic customer wins.

Peter: This included an important new release of the Society Connected Streamline Clinical Child and the first release of Service Center in the CRM Suite.

Peter: We have a clear product strategy and are executing well on our vision.

Gunnar Hansen: We'll now open up the call to your questions. If you would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you'd like to withdraw that question, press star 1.

Speaker Change: We'll now open up the call to your questions.

Speaker Change: [inaudible]

Speaker Change: [inaudible]

Speaker Change: If you would like to ask a question, please press star 1 on your telephone keep to raise your hand and join the queue.

Gunnar Hansen: We ask that you limit yourself to one question and a single follow-up.

Speaker Change: and if you'd like to withdraw that question, again, press star 1 and we ask that you limit yourself to win question in a single follow up. Your first question comes from the line of Joe Ruink with Robert Beard, please go ahead.

Joe of Ruink: Your first question comes from the line of Joe of Ruink with Robert Baird. Please go ahead.

Unknown Attendee: Great.

Joe of Ruink: Hi, everyone. I think it's interesting. The cadence of courts, CRM wins was now picked up for two quarters. Of course, the last quarter was all vault. And looking backwards, I think you're actually winning more CRM on a quarterly basis than you did even before the decision was made to migrate CRM to Vault. So clearly, it seems customers are comfortable making this commitment.

Speaker Change: Oh great, everyone!

Joe Ruink: I think it's interesting that cadence of chords CRM wins is now picked up for two corridors. Of course, the last quarter was all vaulted.

Speaker Change: and looking backwards, I think you're actually winning more CRM on a quarterly basis than even before the decision was made to migrate CRM to vault.

Joe of Ruink: I guess I want to ask just other than comfort related to the set of applications because it's Veeva and this is a proven solution. How much might be the product roadmap and things like Service Center and Marketing Automation, starting to register in decisions and then related to that when you think about the vision, a customer might have around adopting a full suite across the three areas, do you think that ends up being more enticing to an SMB customer or maybe an enterprise customer.

Speaker Change: Clearly, it seems customers are comfortable making this commitment. I guess I want to ask just other than comfort related.

Speaker Change: to the sort of applications because it's a Viva and this is a proven solution. How much might be the product roadmap and things like service center and marketing automation starting to register in decisions and then?

Speaker Change: Related to that, when you think about the vision a customer might have around adopting a full suite across the three areas, do you think that ends up being more enticing to an SMB customer or maybe an enterprise customer for Viva?

Paul Shawah: Hey, Joe, this is Paul. Thanks for the question. You're right. We had another very strong quarter. We Vault CRM became generally available in April. It's exclusively what we're selling into the market, and the quarter we have 14 wins. I think we're winning virtually every CRM deal. You certainly never know if you're winning all of them, but it certainly feels like we're winning all of them. We know we're not losing any deals to competitors that we're competing in. So we feel really good about our execution there.

Speaker Change: Hey Joe, this is Paul. Thanks for the question. You're right. We had it.

Speaker Change: Another very strong quarter. We have obviously our MbK generally available in April. It's exclusively what we're selling into the market and the quarter we have 14 wins.

Speaker Change: I think we're winning virtually every CRM deal you're certain you ever know if you're winning all of them, but it's only feels like we're winning all of them we know we're not losing any deals to competitors that we're competing in so we feel really good about our execution there. You're question about

Paul Shawah: Your question about the broader vision Service Center Campaign Manager. It's absolutely playing a part of the, it's a continued part of the overall vision and direction. And I think those early customers, yes, they want something, something that they know is going to work and deliver for them today. This is often their most important moment as a company. They're preparing for their launch and actually launching their medicine. But they also want something that they can grow with in Service Center and Campaign Manager. We're doing that a very different way of very simple technology stack a more efficient way of bringing sales and marketing and medical and service all together on the same platform.

Speaker Change: The broader vision, service center campaign manager, it's absolutely clean a part of the... It's a continued part of the overall vision and direction, and I think those early customers, yes, they want something that they know is going to work and deliver for them today.

Speaker Change: Often there are most important moments as a company that are preparing for their launch and actually launching their medicine.

Speaker Change: But they also want something that they can grow with.

Speaker Change: and Service Center, Campaign Manager, we're doing at a very different way of very simple technology stack of more efficient way.

Speaker Change: and bringing sales and marketing and medical and service all together from the same platform. So that vision is certainly finding a big component of that. And then we're executing well. That's being well, you know, from a product perspective and from a migration standpoint. So customers are taking notice of that.

Paul Shawah: So that vision is certainly playing a big component of that. And then we're executing well from a product perspective and from a migration standpoint. So customers are taking notice of that. So, yeah, I'm pleased with our progress.

Unknown Attendee: Okay, that's great to hear.

Speaker Change: So yeah, I'm pleased with our progress.

Unknown Attendee: And then I wanted to ask just since the R&D summit is coming up. Customers here have obviously been studying their path forward with AI at this quarter, even a good progress, both with course system wins. But you also mentioned adoption around the newer bulk data APIs. I guess the summit maybe serve as a forum where you would anticipate more clarity coming out just in terms of how customers are approaching R&D. Or maybe this actually be an event where because Viva can address questions and help educate, and obviously customers will speak with one another.

Speaker Change: Okay, that's great to hear. And then I wanted to ask just since the R&D is coming up.

Speaker Change: is here, obviously, in studying their path forward with AI at this quarter, even a good progress, both with core system wins, but you also mentioned adoption around the new world, both with APIs.

Speaker Change: I guess the summit may be serve as a forum where you anticipate more clarity coming out just in terms of how customers are approaching R&D.

Speaker Change: Or maybe this actually be an event where because Viva can address questions and help educate and obviously customers will speak with one another. Maybe it provides just more visibility into decisions at year end and your expectations and to fiscal 26 and the R&D.

Unknown Attendee: Or maybe it provides just more visibility into decisions that you rent and your expectations into fiscal 26 and the R&D.

Peter Yasner: Yeah, so I'll take that one. This is Peter. The visual I always have for our summons is like a boost; you know, you're on a bicycle and your dad gives you a boost and they push you forward and go faster. It's like that because our customers talk to our customers and us, and they learn, and we talk to our customers and we learn, and we refine.

Speaker Change: Yeah, so I'll take that one with you, Peter. The visual I always have for our summer, it's like a boost, you know, you're on a bicycle, and you're that gives you a boost, and I push you forward and go faster. It's like that because our customers talk to our customers and ask them they learn.

Speaker Change: and we talked to our customers and we learned and we refined, so I think that's the way you need to think about that. Now that relates to all types of things.

Peter Yasner: So I don't think that's the way that's the way you need to think about that. Now that relates to all types of things, you know, what order to do the Veeva applications? How best to do the Veeva applications? What new Veeva applications? How to leverage AI with the Veeva data?

Speaker Change: You know, what order to do to be the half of the case, it's how best to do that, be the half of the case, what new be the applications.

Peter Yasner: So nothing special about this R&D summit is just that it's, it's big; there'll be, you know, probably more impactful than it ever has been because we're bigger than we, than we have been.

Speaker Change: How to leverage AI with the Viva data. Nothing special about this, or in these summons, it's just that it's probably probably more impactful than it has ever been, because we're bigger than we have.

Saket Kalia: Your next question comes from the line of Skasket Kalia with Barclays. Please go ahead. Okay, great.

Speaker Change: Here next question comes from the line of Skasket Kellia with Barclays. Please go ahead.

Unknown Attendee: Hey guys, thanks for taking my questions here, and nice job on the quarter. Peter, maybe just to start with you. Can we just talk a little bit about the latest with Vault CDMS? You know, maybe, maybe, maybe touch on sort of how some of those ramps are going with some of the top 20 farmers that have adopted the tool, and maybe, maybe we could touch on sort of how the pipeline looks for continued share gains in that market. Great question. I, the ramps are going well, the, the adoption. That's what we really, you know, focus on when we sell a large top 20 on the CDMS. They have a fixed, a fixed ramp schedule, a fixed C schedule that goes based on time, not based on how fast they actually adopt.

Skasket Kellia: Okay, great. Hey guys, thanks for taking my questions here and a nice job on the quarter.

Skasket Kellia: may be just to start with you. Can we just talk a little bit about the latest with Vault CDMS?

Speaker Change: Maybe touch on sort of how some of those ramps are going with some of the top 20 pharma that have adopted the tool and maybe we could touch on sort of how the pipeline looks for continued share gains in that market.

Speaker Change: Great question, I-

Speaker Change: The Rams are going well, the adoption, that's what we really focus on. When we sell a large top 20 on the CDMS, they have a fixed Rams schedule, the fixed C schedule that goes based on time, not based on how fast they actually adopt.

Peter Yasner: So when we arrange that, we always want them to get it full adoption even before they get to their full financial ramp. That's what we feel is fair and good. And it's a win for the customer, and we're in it for the long run anyway; we're not really in it for the short run. So adoption is good. I would say value realization is quite good. I think better than expected in a couple areas. The site experience is good. No negative feedback from the sites impacts quite positive feedback on the user interface of the site using our system.

Speaker Change: So when we arrange that, we always want them to get it full adoption even before they get to their full financial ramp. That's what we feel is fair and good and it's a win for the customer and we're in it for the long run anyway. We're not so easy for the short run.

Speaker Change: So adoption is good. I would say value realization is quite good. I think better than expected in a couple areas, the site experience.

Speaker Change: is good, no negative feedback from the sites and tech quite positive feedback on the user interface of the site choosing our system.

Peter Yasner: Certainly for the sponsors, feedback very good in terms of building studies faster, less custom programming, less, less errors. And then in the data cleaning, significant cost savings in the data cleaning when people are using our CDB product or Clinical Data Database product in conjunction with our EDC. And that's something where most of our large customers are using those products together. So they're actually able to reduce manual work through the data science capabilities in our CDB product. They're finding data anomalies with our CDB product automatically sending that query to the site. The site might be responding, and CDB is closing that out automatically rather than human intervention there.

Speaker Change: Certainly for the sponsors, feedback very good in terms of building studies faster, less custom programming, less airs.

Speaker Change: and then in the data cleaning, significant cost savings in the data cleaning when people are using our GDP product or clinical data data.

Speaker Change: Database Products in conjunction with our EDC, and that's something where most of our large customers are using those products together, so they're actually able to reduce manual work.

Speaker Change: Through the data science capabilities in our CVB product.

Speaker Change: They're finding data anomalies with our CDB product automatically sending that query to the site, the site might be responding.

Speaker Change: and CDB is closing that out automatically, rather than human intervention there. So that's going quite well. I think it will continue to gain market share or pipeline in the top 20 and enterprises.

Peter Yasner: So that's going quite well. I think we'll continue to gain market share or pipeline in the top 20 enterprises is healthy, very healthy. There's a number of companies talking with us. You never know exactly when they're going to make a decision because it depends on their business priorities and what else they have going on. They only have so much strategically they can make strategic change they can make all at once.

Speaker Change: Healthy, very healthy. There's a number of companies talking with us. You never know exactly when they're going to make a decision because it depends on their business priorities and what else they have going on. They only have so much strategic they can make.

Peter Yasner: I would say the area where we would like to make more progress is in a Clinical Research Organization. I think there we will make progress that's not yet to where we would like it, but particularly in the large clinical research organizations. But we'll get there over time.

Speaker Change: District Havic Kings, they can make all at once.

Speaker Change: I would say the area where we would like to make more progress in a clinical research organization. I think the area we will make progress, it's not yet, to where we would like it, but particularly in the large clinical research organizations.

Peter Yasner: I guess in the last comment I think we do have a structural advantage with people sometimes overlook when we have the clinical data management products like EDC and the clinical operations products like CTMS and ETMS. That means that Veeva can take care of that intricate integration, and believe me, no customers really want to do that. That's difficult work that's not that's not how you add. So these are going well in the ADC area.

Speaker Change: But we'll get there over time. I guess in the last comment, I think we do have a structural advantage with people sometimes overlook when we have the clinical data management products like EDC and the clinical operations products like CTMS and ATMS.

Speaker Change: That means that Viva can take care of that intricate integration and believe me, no customers really want to do that's difficult work that's not that's not how you add. So, these are going well in the ADC area.

Unknown Attendee: That's great. That's great to hear.

Tim Cabral: Kim, maybe for my follow-up for you, great to see the guide for commercial subscription revenue go up for this year. Can you just maybe touch on sort of the size and growth profile of maybe what we've called the non-CRM part of commercial, right? Basically, those businesses that aren't tied to Veeva CRM. Does that make sense? Yeah, it does.

Speaker Change: That's great, that's great to hear.

Speaker Change: Pam, maybe from my follow-up for you, great to see the guide for commercial subscription revenue go up for this year.

Speaker Change: Can you just maybe touch on sort of the size and growth profile of maybe what we've called the non-CRM part of commercial, right? Basically those businesses that aren't tied to the CRM. Does that make sense?

Tim Cabral: You know, as we look at the overall commercial business, the CRM suite is probably 50% of that, and the non-CRM, Saket using your words, are the other 50%.

Pam: Yeah, it does. You know, as we look at the overall commercial business, the CRM suite is probably 50% of that in the non-CRM circuit using your words, are the other 50%.

Tim Cabral: While the CRM suite part of the business, as you heard Paul answer the first question on the call, is doing quite well, you can imagine that the non-CRM is growing much faster than that core CRM suite. So very pleased with the performance of our commercial business and the continued progress that we're making both from an innovation perspective and from a customer success perspective. Very helpful.

Pam: While the CRM suite part of the business as you heard Paul answer the first question on the call is doing

Speaker Change: Quite well, you can imagine that the non-CRM is growing much faster than that core CRM suite. So, very pleased with the performance of our commercial business.

Speaker Change: and the continued progress that we're making both from an innovation perspective and from a customer success perspective.

Ken Wong: Thanks, guys. Your next question comes from the line of Ken Wong with Oppenheimer. Please go ahead.

Speaker Change: Very helpful, thanks guys.

Speaker Change: Here next question comes from the line of Ken Wong with Oppenheimer, please go ahead.

Unknown Attendee: Great, fantastic.

Tim Cabral: The first question for you, Tim. I realize demand trends are always linear, like we investors like. Can you help us think through what's going on with the R&D subscription line? You guys trimmed it a quarter ago. You bumped it back up. What changed relative to three months ago that gives you guys this renewed confidence?

Ken Wong: Great Fantastic. The first question for you, Tim. I realize demand trends are always linear like we investors like.

Ken Wong: Can you help us think through what's going on with the R&D subscription line? You guys trimmed it a quarter ago. You bumped it back up. Like what change relative to three months ago? Like give you guys this renewed confidence.

Tim Cabral: Yeah, hey, Ken. You know, look, we're 90 days later in the year, and as you can imagine, we're getting better visibility into the second half pipeline. What we talked about last quarter was some specific larger deals that were moving to the right. And I think today we continue to build really productive conversations with those customers. We continue to move through the sales cycles with those customers. And today we just have better visibility than we did 90 days ago, Ken, which informed or was a good input to the modest increase in R&D subsurvening for the year.

Tim: Yeah, hey Ken, you know, look, we're 90 days later in the year and as you can imagine.

Speaker Change: We're getting better visibility into the second half pipeline. What we talked about last quarter was some specific larger deals that were moving to the right. And I think today we continue to...

Speaker Change: to build really productive conversations with those customers. We continue to move through the sales cycles with those customers. Today we just have better visibility than we did 90 days ago, which informed or was a good input to the modest increase in R&D subs revenue for the year.

Unknown Attendee: Got it.

Paul Shawah: Perfect. And then Peter Paul just circling back to the vault CRM when a 14 customers as a fantastic outcome. You also mentioned the next release of Vault CRM and Q4, and then a kind of the migration timeline.

Speaker Change: got it perfect. And then Peter Paul just circling back to the bulk of the RM when the 14 customers that the fantastic outcome.

Peter Paul: You also mentioned next release of Voltsiarm in Q4 and then a kind of the migration timeline.

Paul Shawah: Any reason to think that the next version of Vault CRM is like that, that will have an impact impact on deployment timeline. So I guess in short, would a delay of that release somehow all when your customers will start to migrate?

Speaker Change: At any reason, to think that the next version of Voltsier Arm is that that will have an impact on deployment timelines. So I guess in short, would it delay of that release somehow all when your customer will start to migrate?

Paul Shawah: Yeah, hey, Ken. Yeah. So first, we're excited about the next release as it gets us to what we're calling the full functionality and then more. So we will have everything we've delivered in VIVA CRM plus some additional functionality that Vault CRM will have that's unique to Vault CRM, like better content integration, like opportunity management building. We're going to have a lot of new capabilities in that distance between Vault CRM and VIVA CRM will continue to increase over time with that roadmap. Now that will not have, it should not have any impact on how customers think about their migration timeline.

Speaker Change: Yes, so first we're excited about the next release as it gets us to what we're calling the full functionality.

Speaker Change: and then more.

Speaker Change: So we will have everything we've delivered in VVCRM plus some additional.

Speaker Change: and I want you to have that volunteer and we'll have that you need.

Speaker Change: To volunteer, I'm like better content integration.

Speaker Change: Like opportunity management, building, we're going to have a lot of new capabilities in that. Distance between Voltsiarm and Viva Ceremony will continue to increase over time with that roadmap.

Speaker Change: Now, that will not have, it should not have any impact on how customers think about.

Paul Shawah: In fact, if anything, it will create a little bit of an opportunity for us as customers see all of the innovation happening on Vault CRM; they'll want to get to Vault CRM faster. But I don't, either. Customers, they go through their own process, right? So they're very thoughtful about the timing that they want to go through for their migration. And we want them to do it in a timing that's appropriate for them, and adding innovation to vault will certainly help with that. All right, got it.

Speaker Change: Their Migration Timeline. In fact, if anything, it will create a little bit of an opportunity for us as customers see all of the innovation happening on Balsier and they will want to get to Balsier and Balsier and Balsier and Balsier and Balsier and Balsier and Balsier and Balsier.

Speaker Change: But I don't...there are customers they go through their own process, right? So they're very thoughtful about the timing that they want to go through for their migration. And we want them to do it in a timing that's appropriate for them and adding innovation to evolve will certainly help with that.

Brian Peterson: Thanks for the insight, guys. Your next question comes from the line of Brian Peterson with Raymond James. Please go ahead.

Speaker Change: Alright guys thanks for the insight guys.

Speaker Change: Your next question comes from the line of Brian Petersen with Raymond James. Please go ahead.

Brian Peterson: Thanks, guys, and congrats on the court. I'll keep it to one. So obviously, good to see the service center launch.

Brian Petersen: Thanks, guys, and your friends in the Coral, I'll keep it to one. So, obviously, good to see the service center launch. I know it's early days there, but I'm curious, how would you define success in that market? As we're thinking about revenue contributions over the next few years, any way they kind of stack, rank, that contribution versus other things that you have in the offer. Thanks, guys.

Paul Shawah: I know it's early days there, but I'm curious how you would define success in that market? And as we're thinking about revenue contributions over the next few years, any way they kind of stack running that contribution versus ever the other things that you have in the market? Thanks, guys. Yeah, Brian, thanks for the question there, and you're excited about that release. It's generally available now, something that we announced last year and we executed on really, really well. I'm proud of the product team for delivering out with speed. This is a new product for us, just like we've announced Campaign Manager and Patient.

Brian Petersen: Yeah, Brian, thanks for the question there, and I'm sure excited about that release.

Speaker Change: It's generally available now, something that we announced last year and we executed it on really, really well. I'm proud of the product team for delivering out with speed.

Speaker Change: This is a new product for us, just like we've announced campaign manager and patient, we're executing.

Paul Shawah: We're executing well across all three of those products; campaign managers are on track to be available at the end of the year. I guess the way I think about the sizing, I won't go product by product, but just if you're going to combine all of them: service center, campaign manager, and patient CRM. Those are the three new products that we've announced since false CRM. I think of those as roughly the same size as Core CRM. And that opportunity will certainly play out. Obviously, a customer has to be on Vault CRM to take advantage of those new products, but that opportunity will play out over time.

Speaker Change: Well, across all three of those products campaign managers on track to be available at the end of the year. I guess the way I think about the sizing I won't go product by product, but just if you can combine all of them, service center.

Speaker Change: Campaign Manager and Patient CRM, those are the three new products that we've announced since fall CRM. I think of those as roughly the same size as course CRM.

James Krista: James Krista, and I will be your conference operator today.

James Krista: At this time, I would like to welcome everyone to the Veeva Systems fiscal 2025 second quarter results conference call. All lines have been placed on mute to prevent any background noise. And after the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star, follow the number one on your telephone, keep had. And if you'd like to withdraw that question, again, press star one. Thank you.

Speaker Change: And that opportunity will certainly play out obviously a customer has to be on Vault CRM to take advantage of those new products. But that opportunity will play out over time and as customers move to Vault CRM it will open up that opportunity for them to take advantage of our new innovation.

Paul Shawah: And as customers moved to Vault CRM, it will, it will. We'll open up that opportunity for them to take advantage of our new innovation.

Unknown Attendee: Great.

Rishi Jaluria: Thanks, Paul. Your next question comes from the line of Rishi Jaluria with RBC Capital Markets. Please go ahead.

Speaker Change: Thanks for watching!

Speaker Change: Here next question comes on the line of Rwishi Gilluria with RBC capital markets. Please go ahead.

Peter Yasner: Oh, wonderful. Thanks so much for taking my questions. I've got to first, Peter, in your prepared remarks, you talked about some of the early tracks that you're seeing with the AI Partner Program. Can you maybe talk about what are some of the use cases you've seen so far? And maybe philosophically, as you see, some of these use cases get built out and maybe even start to see some early adoption. Is there a point that was that may inform your own internal roadmap, and you have the flexibility to maybe accelerate some plans in terms of integrating GenAI into the platform?

Gunnar Hansen: I will now turn the call over to Gunnar Hansen, director of investor relations. You may begin.

Rwishi Gilluria: Oh, wonderful. Thanks so much for taking my questions. I've got to first a Peter in your prepared remark you talked about some of the early traction you're seeing with the AI partner program. Can you maybe talk about what are some of the use cases you've seen so far and maybe philosophically.

Gunnar Hansen: Good afternoon and welcome to Veeva's fiscal 2025 second quarter earnings conference call for the quarter ended July 31, 2024. As a reminder, we posted prepared remarks on Veeva's investor relations website just after one pan Pacific today. We hope you have had a chance to read them for the call.

Speaker Change: As you see some of these use cases get built out or maybe even start to see some early adoption, is there a point in which that may inform your own internal roadmap and you have the possibility to maybe accelerate some plans in terms of integrating Gen AI into the platform, and then I got a quick follow-up.

Gunnar Hansen: Today's call will be used primarily for Q&A.

Gunnar Hansen: With me today for Q&A, our Peter Yasner, our chief executive officer, Paul Shallah, EVP strategy, and Tanka Brawl, our interim chief financial officer. During this call, we may make four looking statements regarding trends, our strategies, and the anticipated performance of the business, including guidance regarding future financial results. These four looking statements will be based on our current views and expectations and are subject to various risk and uncertainties. Our actual results may differ materially.

Peter Yasner: And then I've got to follow up. Thanks, Rishi. The types of use cases in commercial often have to do with data science. So things like next best action, dynamic, targeting, pre-call planning, things like that. And in the R&D, they can be more things like document generation, generative clinical study report, or doing specific medical coding, things like that. So those are the type of use cases. That's the thing.

Hissie: Thanks, Hissie. The types of use cases in commercial often have to do with data science, so things like...

Speaker Change: Next best action dynamic targeting.

Speaker Change: Pre-cult planning, things like that, and in the R&D they can be more things like document generation, general and clinical study reports, or doing specific medical coding, things like that. So those are the types of use cases.

Gunnar Hansen: Please refer to the risk listed in our earnings release and the risk factors included in our most recent filing on form 10 Q. For looking statements made during the call or being made as of today, August 28, 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 four looking statements.

Peter Yasner: When you make an API like the Direct Data API, you don't know the innovation you're unleashing. And that's the whole point, because the data can be consumed so fast and transactionally accurately. Use cases that weren't practical before can become practical. I mean, if I step back way back when that designing the first, you know, Salesforce.com API, I knew it was going to, you know, unleash a lot of innovation, and you just, you just don't know it's not, it's not predictable and that's the good. Now, in terms of us monitoring that and informing our own roadmap, I guess there may be some of that, but mostly that type of innovation really comes from internally our own thinking with our customers.

Speaker Change: That's the thing, when you make an API like the Direct Data API, you don't know the innovation you're unleashing, and that's the whole point, because the data can be consumed so fast and transactionally accurately.

Speaker Change: Use cases that weren't practical before can become practical. I mean, if I step back, way back when designing the first salesforce.com API, I knew. It was going to be an unleash a lot of innovation and you just don't know. It's not predictable and that's a good thing.

Gunnar 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 the public form. On the call, we may discuss certain non-gap metrics that we believe aid and understanding of our financial results.

Speaker Change: Now in terms of us monitoring that and informing our own roadmap.

Gunnar Hansen: A reconciliation that comparable gap 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: I guess there may be some of that, but mostly that type of innovation really comes from internally our own thinking with our customers we don't want to really disrupt our partners.

Peter Yasner: We don't want to really disrupt our partners, especially when the partners are having customer success. If there's a major use case that we're very clear that customers need. And for some reason, the ecosystem is not delivering customer success yet.

Peter Gassner: With that, thank you for joining us and I'll turn the call over to Peter. Thank you, Gunner, and welcome everyone to the call. Q2 is a strong quarter with results above our guidance. Total revenue in the quarter was 676 million with non-gap operating income of 280 million. Thanks to the team, we advanced in all major areas with key product expansions and strategic customer wins. This included an important new release of Veeva site connect to streamline clinical trials and the first release of service center in the CRM suite. We have a clear product strategy and are executing well on our vision.

Speaker Change: especially.

Speaker Change: When the partners are having customer success, if there's a major use case that we're very clear that customers need.

Peter Yasner: Yes, maybe we might step in there, but I would guess that what we would do would be more holistic, I guess in some sense and not specifically something a partner would tackle because we're generally going to have more resources and more ability to sway our own roadmap than a partner would, and we want to be respectful to the ecosystem. Yeah, got it.

Speaker Change: and for some reason, the ecosystem that's not delivering customer success, yes, maybe we might step in there. But I would guess that what we would do would be more.

Speaker Change: Holistic, I guess, in some sense, and not specifically something a partner would tackle because we're generally going to have more resources. In more ability to sway our own roadmap than a partner would, and we want to be respectful to the ecosystem.

Unknown Attendee: Thanks. That's really helpful.

Peter Gassner: We'll now open up the call to your questions. If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. Again, press star one and we ask that you limit yourself to one question and a single follow up.

Unknown Attendee: And then just in terms of, you know, some of the adjacent seasons here, and we talked about Service Center Campaign Manager, I know comes out later this year. You've had some kind of signs of early traction and early interest. Maybe can you help us understand, you know, number one. With some of the successors in the service center early, is this generally greenfield, is this displacement, and how should we be thinking about the advantages that these products have, even on a standalone basis relative to incumbent vendors. Thank you. Yeah, so the requirement is to, of course, have false CRM, and most of the customers that are starting with all CRM or net new customers, these are often pre-commercial or maybe they have one product in market. They're a smaller company, smaller, midsize company.

Speaker Change: [inaudible]

Speaker Change: and then just in terms of some of the adjacencies in here and we talked about service center or campaign manager. I know it comes out later this year.

Speaker Change: You've had some kind of signs of early traction and early interest.

Speaker Change: Maybe can you help us understand, you know, number one, with some of the successors in what service center early, is this generally green field, is this displacement? And how should we be thinking about the advantages of these products have, even on a standalone basis relative to incumbent vendors? Thank you.

Joe of Ruink: Your first question comes from the line of Joe of Ruink with Robert Baird. Please go ahead. Great.

Speaker Change: Yeah, so...

Speaker Change: The requirement is to, of course, have fall Sierra and most of the customers that are starting with fall Sierra and our net new customers, these are often pretty commercial.

Joe of Ruink: Hi, everyone. I think it's interesting. The cadence of courts, CRM wins was now picked up for two quarters. Of course, the last quarter was all vault. And looking backwards, I think you're actually winning more CRM on a quarterly basis than you did even before the decision was made to migrate CRM to vault. So clearly, it seems customers are comfortable making this commitment. I guess I want to ask just other than comfort related to the set of applications because it's Veeva and this is a proven solution.

Paul Shawah: So we expect those will be some of the first companies to go live with Service Center. They'll be some of our earliest adopters and some of the ones that take advantage over the next one to two years. But service center and campaign manager will be equally applicable and create value for the enterprise and large customers. Also, that will play out over time as we mature the product. But they fundamentally have a distinct advantage right from the beginning, which is that they're built into the CRM. So everything that happens, happens against a single customer record, which means that everybody in the team, it's about creating customer centricity. Everybody that touches that customer has the same exact view of the customer; they can share information, they share the same consent, they share the same content, they share the same compliance rules.

Speaker Change: or maybe they have one product and market, they're a smaller company, smaller men's size companies. So we expect those will be some of the first companies to go live with Service Center. It'll be some of our earliest adopters and some of the ones that take advantage over the next one to two years.

Speaker Change: Service Center and the campaign manager will be equally applicable and create value for the enterprise and large customers. Also, that will play out over time as we matured the product.

Speaker Change: But they fundamentally have a distinct advantage right from the beginning which is that they're built into the CRM. So everything that happens happens again, a single customer record.

Joe of Ruink: How much might be the product roadmap and things like Service Center and Marketing Automation starting to register in decisions and then related to that when you think about the vision, a customer might have around adopting a full suite across the three areas. Do you think that ends up being more enticing to an SMB customer or maybe an enterprise customer for Veeva?

Speaker Change: which means that...

Speaker Change: Every buddy in the team, it's about creating customers' interest in everybody that touches that customer, has the same exact view of the customer, they can share information, they share the same consent, they share the same content, they share the same compliance rules.

Paul Shawah: It eliminates a lot of handoffs of data and integrations and complexity; it's a much simpler technology stack, and it's much more valuable in terms of creating collaboration and customer centricity. So we expect to see it the uptake of these products start in the SMB, but certainly continue to be available to our larger customers. Now you asked about use standalone, it's very likely that these will be used in conjunction with Valtz CRM. It's unlikely that somebody does a standalone implementation of service center, for example, or campaign manager.

Paul Shawah: Hey, Joe. This is Paul. Thanks for the question. You're right. We had another very strong quarter. We vault CRM became generally available in April. It's exclusively what we're selling into the market and the quarter we have 14 wins. I think we're winning virtually every CRM deal. You certainly never know if you're winning all of them but certainly feels like we're winning all of them. We know we're not losing any deals to competitors that we're competing in. So we feel really good about our execution there.

Speaker Change: It eliminates a lot of hand-offs of data and integrations in complexity. It's a much simpler technology stack.

Speaker Change: and it's much more valuable in terms of creating collaboration and customer simplicity.

Speaker Change: So we expect to see the update of these products start in the SMD, but certainly continue.

Speaker Change: to be available to our larger customers.

Speaker Change: And you asked about you stand alone. It's very likely that these will be used in conjunction with Valkyrie. It's unlikely that somebody does a stand alone implementation of service center, for example, or campaign manager. These will be you can think of them as a significant add-ons to a Valkyrie or implementation.

Paul Shawah: Your question about the broader vision Service Center campaign manager. It's absolutely playing a part of the, it's a continued part of the overall vision and direction. And I think those early customers, yes, they want something, something that they know is going to work and deliver for them today. This is often their most important moment as a company. They're preparing for their launch and actually launching their medicine, but they also want something that they can grow with in Service Center and Campaign Manager.

Paul Shawah: These will be; you can think of them as significant add-ons to a Valtz CRM implementation.

Unknown Attendee: Wonderful, thank you.

Tyler Radke: Your next question comes from the line of Tyler Radke, with City. Please go ahead. Yes, thank you.

Speaker Change: Thank you.

Speaker Change: Here next question comes from the line of Tyler Radke with City, please go ahead.

Peter Yasner: Peter, it's encouraging to see the beaten raise here, and particularly despite some services weakness. I'm wondering if you attribute some of this strength that you saw in new bookings is a function of the environment getting slightly better. I know last quarter you called out headwinds; I didn't see anything too much about the macro, and certainly some of the results from you know you're publicly traded peers in life sciences would indicate we're maybe moving off the bottom. So just curious.

Tyler Radke: Yes, thank you Peter, it's encouraging to see the beaten rays here and particularly despite some services weakness. I'm wondering.

Paul Shawah: We're doing at a very different way of very simple technology stack, a more efficient way of bringing sales and marketing and medical and service all together on the same platform. So that vision is certainly playing a big component of that. And then we're executing well from a product perspective and from a migration standpoint. So customers are taking notice of that. So yeah, I'm pleased with our progress.

Tyler Radke: If you attribute some of this strength that you saw on new bookings is a function of the environment getting slightly better. I know last quarter you called out headwind. I didn't see anything too much.

Speaker Change: about the macro and certainly some of the...

Speaker Change: Results from your publicly traded peers and life sciences within the Cape Work.

Tim Cabral: If you've seen any, any you know project acceleration, anything that makes you more optimistic about the overall and overall environment, thinking of the second half. Tyler, I think the macro environment, from what I can see, is overall one change from 90 days ago. We still have the things going on that we have going on. So the deep performance is related to strong execution. We executed very well in the quarter. Also, you know, we had maybe some good luck and no bad luck, right? I think some quarters are like that, but overall strong execution and no change in the macro environment that I can see.

Speaker Change: may be moving off the bottom. So just curious, if you've seen any project acceleration, anything that makes you more optimistic about the overall environment thing into the second half.

Peter Gassner: Okay, that's great to hear. And then I wanted to ask just since the R&D summit is coming up. Customers here have obviously been studying their path forward with AI at this quarter, even a good progress, both with course system wins. But you also mentioned adoption around the newer bulk data APIs. I guess the summit may be served as a forum where you would anticipate more clarity coming out just in terms of how customers are approaching R&D.

Speaker Change: I think the macro environment from what I can see is overall one change from 90 days ago. I mean, we still have the things going on that we have going on.

Speaker Change: So, the gig performance.

Speaker Change: is related to strong execution.

Speaker Change: and we are extremely, very well in the quarter.

Speaker Change: Also, you know, we had maybe some good luck in the bad luck, right? Think some quarters are like that.

Peter Gassner: Or maybe this actually be an event where because Viva can address questions and help educate and obviously customers will speak with one another. Or maybe it provides just more visibility into decisions that you rent and your expectations into fiscal 26 and the R&D.

Speaker Change: what overall strong execution and no change in the macro environment that I can see.

Tim Cabral: Great, that's helpful, and maybe a follow-up for Tim, just as I look at the moving pieces and the guide.

Speaker Change: Great, that's helpful and...

Speaker Change: and maybe you follow up.

Peter Gassner: Yeah, so I'll take that one, this is Peter.

Tim Cabral: Can you just walk through, you know, the services piece and then I think about the guide mostly coming from commercial. Is it the new CRM wins that you talked about in the quarter? Was that the biggest driver of the commercial razor, or was it other pieces of the portfolio that outperformed on the commercial side? Thank you.

Speaker Change: For Tim, just as I look at the moving pieces in the guide, can you?

Peter Gassner: The visual I always have for our summons is like a booth, you know, you're on a bicycle and your dad gives you a booth and they push you forward and go faster. It's like that because our customers talk to our customers and us and they learn and we talk to our customers and we learn and we refine. So I don't, I think that's the way, that's the way you need to think about that. Now that relates to all types of things, you know, what order to do the Veeva applications, how best to do the Veeva applications, what new Veeva applications, how to leverage AI with the Veeva data.

Speaker Change: Just walk through, you know, the services piece and then, as I think about the guide mostly coming from commercial.

Speaker Change: Is it the new CRM wind that you talked about in the quarter? Was that the biggest driver of the commercial razor or was it other pieces of the portfolio that that outperformed on the commercial side? Thank you.

Tim Cabral: Yeah, so on and Tyler, thanks for the question. On the services side, you know, some of the same dynamics that we talked about in the last quarter, we saw a little bit here, meaning some delays and service projects from a timing perspective. The other thing that we saw, which was somewhat a new dynamics, we don't know whether or not it will be a trend is we had a few customers, one quite large, who instead of contracting with third party. The SIs on our paper decided that they were going to go directly to the customer directly to third party.

Speaker Change: Yes, so on and Tyler, thanks for the question. On the services side.

Speaker Change: You know, some of the same dynamics that we talked about in the last quarter, we saw a little bit here, meaning some delays in service projects from a timing perspective. The other thing that we saw, which was...

Peter Gassner: So nothing special about this R&D summit is just that it's, it's big, there'll be, you know, probably more impactful than it ever has been because we're bigger than we, than we happened.

Speaker Change: Someone a new dynamics, we don't know whether or not it will be a trend, is we had a few customers, one quite large.

Saket Kalia: Your next question comes from the line of Skasket Kalia with Barclays, please go ahead. Okay, great. Hey guys, thanks for taking my questions here and nice job on the quarter.

Speaker Change: who, instead of contracting with third-party SIs on our paper, decided that they were going to go directly to the customer. It was directly to the third-party.

Tim Cabral: So, while that is a reduction in our revenue opportunity, it certainly supports how we think about what we're optimizing for in the service business, which is really customer success. And as we've talked about in the past, you'll see customers make these marginal decisions, and we don't try to fight against those. This is about customer success and enabling our customers to move on to the best innovation and really realize the customer success and value that our product deliver. So, so I think those are some things that that informed the services.

Peter Gassner: Peter, maybe just to start with you, can we just talk a little bit about the latest with vault CDMS, you know, maybe, maybe, maybe touch on sort of how some of those ramps are going with some of the top 20 farm that have adopted the tool. And maybe, maybe we could touch on sort of how the pipeline looks for continued share gains in that market. Great question. The ramps are going well, the adoption, that's what we really, you know, focus on when we sell a large top 20 on the CDMS, they have a fixed, a fixed ramp schedule, a fixed C schedule that goes based on time, not based on on how fast they actually adopt.

Speaker Change: So, while that is a reduction in our revenue opportunity, it certainly supports.

Speaker Change: How we think about them, what we're optimizing for in the service business, which is really customer success, and as we've talked about in the past, you'll see customers make these marginal decisions.

Speaker Change: Realize the customer success and value that our products deliver. So I think those are some things that...

Tim Cabral: on the commercial side, the outperformance in Q2 and I would say the increase in guide are one and the same. While we are seeing continued momentum and progress on the core CRM piece, Tyler, certainly the outperformance and what informed the increase in guide was really the performance in our commercial content area and our cross-sex area. So those are the two that really drove the larger guide in the past. In this cycle.

Speaker Change: that informed the services piece.

Speaker Change: on the commercial side.

Speaker Change: You know, the outperformance in Q2 and I would say the increase in guide.

Speaker Change: are one in the same.

Peter Gassner: So when we arrange that, we always want them to get it full adoption, even before they get to their full financial ramp. That's what we feel is fair and good and it's a win for the customer and we're in it for the long run anyway, we're not really in it for the short run. So adoption is good. I would say value realization is quite good. I think better than expected in a couple areas.

Speaker Change: While we are seeing...

Speaker Change: Continued momentum and progress on the core.

Tyler Radke: CRM, peace Tyler

Tyler Radke: Certainly the outperformance and what informed the increase in guide was really the...

Speaker Change: The performance in our commercial content area and our cross-sex area, so those are the two that really drove the larger guide in the past in this cycle.

Unknown Attendee: Thank you for the color and Tim.

Unknown Attendee: Hope we can continue to work together in the future.

Speaker Change: Thank you for the color and to help hopefully continue to work together in the future.

Peter Gassner: The site experience is good, no negative feedback from the sites impact quite positive feedback on the user interface of the site using our system. Certainly for the sponsors, see back very good in terms of building studies faster, less custom programming, less less errors. And then in the data cleaning, significant cost savings in the data cleaning when people are using our CDB product or clinical data database product in conjunction with our EDC.

Unknown Attendee: Thanks.

Stan Berenstein: Thanks, Tyler. Your next question comes from Stan Berenstein with Wells Fargo Securities. Please go ahead.

Speaker Change: Thanks, darling. Your next question comes from Stan Barronstein with Wells Fargo Securities. Please go ahead.

Stan Berenstein: Thanks for taking my questions. So in the particular remarks, you called out a top 20 biopharma win in R&D. I think standardizing on RIM and TTMS. Could you just walk us through, you know, how long did it take for this deal to work itself through the pipeline and maybe just generally how active is your pipeline with other large form of potentially looking to standardize multiple vault products weeks. Thanks.

Stan Barronstein: Hi, thanks for taking my questions. So in the program, I want to call that a top 20 bioformal win in R&D. I think standardizing on rim and TPMS.

Stan Barronstein: Could you just walk us through how long did it take for this meal to work as often as a pipeline and maybe just generally how active is your pipeline with other large farm or potentially looking to standardize multiple-volt products weeks. Thanks.

Stan Berenstein: Stan, I'll take that one. I think that opportunity with that customer. I remember working on it roughly, you know, six years ago, seven years ago, discussions, information, no relationship building, that type of stuff. Then it became more active, you know, roughly a year ago when it really went into, okay, we're really going to think about that some things here and let's share information. So that's about the timeframe of those types of things. And if you look in the top 20, there are more opportunities. So for example, in safety, very new products week in quality, many more products in clinical, we've added products in regulatory, some don't have our products yet.

Peter Gassner: And that's something where most of our large customers are using those products together. So they're actually able to reduce manual work through the data science capabilities in our CDB product. They're finding data anomalies with our CDB product automatically sending that query to the site. The site might be responding and CDB is closing that out automatically rather than human intervention there. So that's going quite well. I think we'll continue to gain market share, our pipeline in the top 20 enterprises is healthy, very healthy.

Speaker Change: Next day, I'll pick that one.

Speaker Change: I think that opportunity with that customer, I remember working on it roughly six years ago, seven years ago, discussions and information, you know.

Speaker Change: Relationship Building, that type of stuff.

Speaker Change: Then it became more active.

Speaker Change: Roughly a year ago, with one that really went into, okay, we're really going to think about this and things here and share information. So that's about the time frame of those types of things.

Speaker Change: and if you look in the top 20s there.

Peter Gassner: There's a number of companies talking with us. You never know exactly when they're going to make a decision because it depends on their business priorities and what else they have going on. They only have so much strategically can make the strategic change they can make all at once. I would say the area where we would like to make more progress is in the clinical research organizations. I think there we will make progress that's not yet to where we would like it, but particularly in the large clinical research organizations.

Speaker Change: There are multiple opportunities, so for example, in safety, very new products we've been in.

Speaker Change: In quality, many more products, in clinical, we've added products in regulatory so I don't know who our products yet.

Peter Yasner: So there's a number of those that are active and in various stages of activity every time. So you think about top 20 and, you know, five different major opportunities as a total of 100 opportunities you might have in total, right? So we certainly have, you know, more than 10 things active at any one given time. That's the way to think about it because there are multiple opportunities in the top 20s. That's just one opportunity.

Speaker Change: So, there's a number of those that are active and in various stages of activity every time. So, you came up top 20 and, you know, five different major opportunities as a total of 100 opportunities you might have in total, right?

Peter Gassner: But we'll get there over time. I guess in the last comment, I think we do have a structural advantage with people sometimes overlook. When we have the clinical data management products like EDC and the clinical operations products like CTMS and ETM. That means that Veeva can take care of that intricate integration, and believe me, no customers really want to do that. That's difficult work, that's not how you add. So these are going well in the ADC area.

Speaker Change: We certainly have, you know, more than 10 things active than anyone given time. That's the way to think about it because there are multiple opportunities in these top 20, not just one opportunity.

Unknown Attendee: Helpful, maybe just a quick follow-up on the cross looks. Frankly, you're seeing anything to call out related to the election cycle. There's there more reliance by clients on the channel marketing than maybe you're benefiting from, I'm wondering if you're seeing anything incremental just season away from the election cycle. Thanks.

Speaker Change: So, maybe just a quick follow-up on the cross-to-shank that you're seeing anything to call out related to the election cycle, or if they're more reliant by clients on the channel marketing than maybe you're benefiting from, when they're interested in anything incremental, just season away from the election cycle. Thanks.

Paul Shawah: No, I wouldn't say seasonal. I think it's just increasing market leadership. We've been delivering quality product for a while now. And there were some entrances in and out there that some of those didn't pan out so well in ROI. So I think there's customers coming back to a little bit of quality now.

Speaker Change: Now I would take seasonal, I think it's...

Speaker Change: This increasing market leadership we've been delivering a quality product for a while now.

Speaker Change: and there were some entrance in and out there that some of those didn't pan out, so well, well, in our lives, so I think there's...

Peter Gassner: It's a big size and growth profile of maybe what we've called the non-CRM part of commercial, right, basically those businesses that aren't tied to Veeva CRM. Does that make sense? Yeah, it does. As we look at the overall commercial business, the CRM suite is probably 50% of that, and the non-CRM, Saket using your words, are the other 50%. While the CRM suite part of the business as you heard Paul answer the first question on the call is doing quite well, you can imagine that the non-CRM is growing much faster than that core CRM suite. So very pleased with the performance of our commercial business and the continued progress that we're making both from an innovation perspective and from a customer success perspective. Very helpful. Thanks guys.

Paul Shawah: Also, we're having we have two businesses in cross one of the measurements and optimization of media campaigns. And the other one is digital audiences where customers are using our audiences, our consumer audiences for their marketing campaigns. And the audience business is something we put a little more focus on in the last year, and those results are paying off. So it's not anything cyclical; things really weren't the guy.

Speaker Change: coming back to a little bit of quality now.

Speaker Change: Also, we have two businesses in Cross-X, one of the measurements and optimization of media.

Speaker Change: Campaigns and the other one is visual audiences where customers are using our audiences, our consumer audiences.

Speaker Change: for their marketing campaigns and the audience business is something we put a little more focus on in the last year and those results are paying off. So it's not anything cyclical things really weren't the driver.

Brent Bracelin: Thank you. Your next question comes from Brent Bracelin, with Piper Sandler. Please go ahead. Good afternoon, one question on top 20 delectivity, a follow-up on margins.

Speaker Change: Thank you.

Speaker Change: Your next question comes from Brent Brieflin with Piper Sandler, please go ahead.

Brent Brieflin: Good afternoon. One question on top 20 delectivity of open margins. Peter, I get the stronger execution and a little luck this quarter helping you. But just curious, what's driving the top 20 wins? It looks like you got some in safety, quality, link key people, R&D.

Peter Yasner: Peter, I get the stronger execution and a little luck this quarter helping you.

Peter Yasner: But just curious, what's driving the top 20 wins? It looks like you got some in safety quality, linky people, R&D. It feels like a bit of a change from last quarter, and just curious if it's vendor consolidation that's resonating out there. Any sort of additional color you can point to why the deals closed this quarter would be super helpful, and I quick follow it for Tim.

Ken Wong: Your next question comes from the line of Ken Wong with Oppenheimer. Please go ahead. Great, fantastic.

Speaker Change #101: It feels like a bit of a change from last quarter and just curious if it's vendor consolidation that's resonating out there, any sort of a different color you can point to why the deals closed this quarter would be super helpful and I quick follow it for them.

Timothy Cabral: The first question for you Tim. I realize demand trends are always linear like we investors like. Can you help us think through what's going on with the R&D subscription line? You guys trimmed it a quarter ago, you bumped it back up. What changed relative to three months ago that gives you guys this renewed confidence? Yeah, hey Ken, look, we're 90 days later in the year, and as you can imagine, we're getting better visibility into the second half pipeline.

Peter Yasner: But I would say it's just timing, you know, there was no other reason than that just timing because if you if you if you step back, you know, what is Veeva doing? We're really in the development cloud area specifically, we're building a very durable business there. We have a structural advantage where we have all these products in the different areas that sit together and have had a high degree of customer success and customers that are actually getting lots of our eyes out of these products and we're really the only company doing that. So what's driving customers to come to us is just increased return on investment; they can get more efficient, and that's what they're trying to do.

Speaker Change #102: Uh, turn out safe.

Speaker Change #103: It's just timing, you know, no other reason than that, just timing because if you step back

Speaker Change #104: You know, what is you even doing, we're clearly in the development cloud area specifically.

Timothy Cabral: What we talked about last quarter was some specific larger deals that were moving to the right. And I think today we continue to build really productive conversations with those customers. We continue to move through the sales cycles with those customers. And today we just have better visibility than we did 90 days ago, Ken, which informed or was a good input to the modest increase in R&D subscription for the year. Got it. Perfect.

Speaker Change #105: and we're building a very durable business there.

Speaker Change #106: We have a structural advantage where we have all these products in the different areas that sit together and have had a high degree of customer success and customers are actually getting lots of our lives out of these products and we're really the only company doing that.

Speaker Change #106: is just increased, you know, it's returned on the investment. They can get more efficient and that's what they're trying to do.

Peter Yasner: But there's a limited number of things and changes they can tackle all at once, so that's why not all the change happens all the same time.

Speaker Change #106: But there's a limited number of things and chains that they can tackle all of once. So that's why not all the chains happen all at the same time.

Ken Wong: And then Peter Paul just circling back to the vault CRM when a 14 customers as a fantastic outcome. You also mentioned next release of vault CRM in Q4 and then kind of the migration timeline. Any reason to think that the next version of vault CRM is like that, that will have an impact on deployment timeline. So I guess in short, would a delay of that release somehow, all when your customers will start to migrate?

Peter Yasner: We're building this long term franchise is one way to think about it of these very durable software products that are somewhat difficult for the customer to consume because they have to change their processes, but also they're very sticky; they don't, you know, they don't move them out. So, that's what that's what we're building. We don't generally lose to competitors. We might lose to inactivity; the customer says, "Hey, I'm not prioritizing this particular area." I'm I want to prioritize another area with my change, but we're not generally losing to another vendor.

Speaker Change #106: We're building this long-term franchise with this one way to think about it of the very durable software products that are somewhat difficult for the customer to consume because they have to change their processes.

Speaker Change #106: But also they're very sticky, they don't move them out. So that's what we're building. We don't generally lose to competitors.

Ken Wong: Yeah, hey Ken. Yeah, so first we're excited about the next release as it gets us to what we're calling the full functionality and then more. So we will have everything we've delivered in VIVA CRM plus some additional functionality that vault CRM will have that's unique to vault CRM. Like better content integration, like opportunity management built in, we're going to have a lot of new capabilities in that distance between vault CRM and VIVA CRM will continue to increase over time with that roadmap.

Speaker Change #106: We might lose to inactivity because we're saying, hey, I'd not prioritise in this particular area. I want to prioritise another area with my change.

Speaker Change #106: But we're not generally losing to another vendor.

Tim Cabral: Helpful color there and then Tim is a follow up on margins. I think up margins were the highest we've seen in three years. Great to see that back trending above 40%. It looks like the biggest factor there was gross margin improvement.

Speaker Change #106: and then Tim is a follow-up on margins. I think Op Martins were the highest we've seen in three years. I'd great to see that back, training above 40%. It looks like the biggest factor there was gross margin improvement. Can you just talk a little bit about what's driving that? Is it just mixed shift and how should we think about that going forward? Thanks.

Tim Cabral: Can you just talk a little about what's driving that? Is it just mixed shift and how should we think about that going forward? Thanks. Yeah, Brent, thanks for the question. And yeah, on the gross margin side, you know, I think it's a combination of mix shift. So both more subscription revenue than services and more non-Viva CRM revenue with all the other products that we don't pay the royalty to sales for. So both of those mix shifts comes into play as you think about the improved gross margin and look a little call out. While services revenue was in line with guidance, the margin performance was quite good.

Ken Wong: Now that will not have, it should not have any impact on how customers think about their migration timeline. In fact, if anything, it will create a little bit of an opportunity for us as customers see all of the innovation happening on vault CRM, they'll want to get to vault CRM faster. But I don't, either customers, they go through their own process, right? So they're very thoughtful about the timing that they want to go through for their migration and we want them to do it in a timing that's appropriate for them and adding innovation to vault will certainly help with that. All right, got it. Thanks for the insight, guys.

Speaker Change #106: Yeah, Brian, thanks for the question.

Speaker Change #107: and young at the Gross Margin side.

Speaker Change #108: You know, I think it's a combination of mixed shifts.

Speaker Change #108: Both more subscription revenue.

Speaker Change #108: then services.

Anne: and Anne.

Speaker Change #111: More Non

Speaker Change #111: The VSCRM revenue with all the other products that we don't pay the royalty to sales for, so both of those mixed shifts comes into play as you think about.

Speaker Change #111: the improved gross margin and look a little call out while services revenue was in line with guidance.

Tim Cabral: So the service team continues to deliver value in a very efficient way. And I think that is probably how you think about our overall company. I think we deliver a tremendous amount of value to our customers, and Peter and the leadership team are highly efficient in doing it, and you're seeing that in the results of our operating margin. Megan, makes sense. Great to see you.

Speaker Change #111: The margin performance was quite good, so the service team continues to deliver value in a very efficient way. And I think that is probably how you think about our overall company, Frank.

Brian Peterson: Your next question comes from the line of Brian Peterson with Raymond James. Please go ahead. Thanks, guys, and congrats on the court.

Brian Peterson: I'll keep it to one. So obviously, good to see the service center launch. I know it's early days there, but I'm curious, how would you define success in that market? And as we're thinking about revenue contributions over the next few years, any way they kind of stack rank that contribution versus ever the other things that you have in the offer. Thanks, guys. Yeah, Brian, thanks for the question there, and we're excited about that release.

Frank: I think we deliver a tremendous amount of value to our customers and Peter and a leadership team are highly efficient in doing it and you're seeing that in the results of our operating margin.

Unknown Attendee: Thanks, guys.

Unknown Attendee: Thanks, Brent.

Frank: Make sounds great to see, thanks guys.

Dylan Becker: Your next question comes from Dylan Becker with William Blair. Please go ahead.

Frank: Thanks for that.

Speaker Change #113: Here next question comes from a Dylan Becker with William Blair, please go ahead.

Peter Yasner: Hey, guys. We're on this job here. Maybe for Peter, starting with you. You call that site Connect in the prepared remarks. And so wondering if we get some more context on kind of the extension of the clinical offering that we've talked about other channels. E pro eco recruitment in the past. And there's a long runway within the existing tool set, but actually think about kind of maybe more of the early, early emerging solutions within clinical. That's the right way of thinking about it.

Brian Peterson: It's generally available now, something that we announced last year, and we executed on really, really well. I'm proud of the product team for delivering out with speed. This is a new product for us, just like we've announced campaign manager and patient. We're executing well across all three of those products campaign managers on track to be available at the end of the year. I guess the way I think about the sizing, I won't go product by product, but just if you're going to combine all of them service center campaign manager and patient CRM, those are the three new products that we've announced since fall CRM.

Dylan Becker: Hey guys, I'm going to stop here. Any further Peter, starting with you.

Dylan Becker: You call that site to next in the prepare of remarks and so wondering if we get some more context on kind of the extension of the clinical offering that we've talked about other channels, E-PeroECoA recruitment.

Peter Paul: in the past and there's a long runway within the existing tool set but I actually think about kind of maybe more of the early early emerging solutions within clinical effects the right way of thinking about it.

Peter Yasner: I'll take specifically Side Connect because it is a key product for Veeva and very innovative. Site Connect is used by the site's clinical research sites around the world. And with our new evolution of site connect, our new release here. It's easy for all sites to consume it; can use it; doesn't require any special stuff around their side. We've added a bunch of site functionality. So I think the sites are going to really like that. And the site, in some ways, they are the customers of the sponsors. So the sponsors have to care about the site efficiency.

Speaker Change #115: I'll take specifically side connect with the visit, key products for Viva and very innovative.

Brian Peterson: I think of those as roughly the same sizes core CRM and that opportunity will certainly play out obviously a customer has to be on vault CRM to take advantage of those new products, but that opportunity will play out over time. And as customers moved to vault CRM, it will open up that opportunity for them to take advantage of our new innovation.

Speaker Change #115: PsychoLact is used by the sites, the Chronicle Research sites around the world, and with our new evolution of site Connect, our new release here.

Speaker Change #115: It's easy for all sites to consume it, to use it, to require any special stuff around their side. The data is a bunch of functionality, so I think the sites are going to really like that.

Rishi Jaluria: Next question comes from the line of Rishi Jaluria with RBC capital markets. Please go ahead. Oh, wonderful. Thanks so much for taking my questions. I've got two. First, Peter, in your prepared remarks, you talked about some of the early traction you're seeing with the AI partner program. Can you maybe talk about what are some of the use cases you've seen so far and maybe philosophically, as you see some of these use cases get built out and maybe even start to see some early adoption.

Speaker Change #115: and the sites in some ways they are the customers of the sponsors. So the sponsors have to care about the sites.

Peter Yasner: Now, also for site connect, it drives efficiency for the sponsor as well in terms of document exchange and all the different use cases, safety letter distribution, all these use cases. So site connect is interesting that it has a network effect and network effect. It actually helps the site a lot. And it helps the sponsors a lot with their efficiency, so that network effect will start kicking in. And I think it will, at times, drag along other clinical products from Veeva as well.

Speaker Change #115: Efficiency. Now, also, for psychonect, it drives efficiency for the sponsor as well. In terms of document exchange and all the different use cases, safety, letter distribution, all these use cases.

Speaker Change #115: So, PsychoNec is interesting that it has a network effect and network effect. It actually helps the site a lot and helps the sponsors a lot with their efficiency. So, that network effect will start kicking in and I think it will at times drag along.

Rishi Jaluria: Is there a point in which that may inform your own internal roadmap and you have the flexibility to maybe accelerate some plans in terms of integrating Genai into the platform, and then I've got to follow up. Thanks, Rishi. The types of use cases in commercial often have to do with data science, so things like next best action, dynamic targeting, pre-call planning, things like that. That's the thing, when you make an API like the direct data API, you don't know the innovation you're unleashing, and that's the whole point because the data can be consumed so fast and transactional accurately.

Peter Yasner: So that's about Site Connect. You had another follow-up question, and I don't recall it. No, that was, yeah, just around kind of other early stage solutions and clinicals, but I think you have a site connect these covers it. There's more around ePro, eCo, all the other areas of recruitment, RTSM, some of the other areas we talked about in clinical.

Speaker Change #116: Other clinical products from Viva as well. So that's not psychonect. You had another fall of pushing the knife. I don't want to call it.

Speaker Change #117: I was just around other early-stage solutions and clinicals, but I think you have a side-connect piece to cover. It's more around E-Pro, E-Co, all the other areas of recruitment and RTSN. Some of the other areas we've talked about in clinical.

Peter Yasner: Yeah, they're just earlier on in their cycle, very excited about RTSM. I think we have a really world-leading solution there, especially as we integrate it with our clinical operations suite. I think over the next five years we have plans that we can really change the game in RTSM, be the clear leader and encourage customers, especially large customers, to just choose Veeva as an enterprise standard to drive it efficiently and use it on every trial. That's how confident we are in RTSM. And ePro is early, ePro, eCo is early, and there are a lot of specific use cases, depending on therapeutic area there.

Speaker Change #117: Yeah, they're just earlier on in their cycle, very excited about RTSM.

Speaker Change #117: I think we have a really a world-beating solution there, especially as we can integrate it with our critical operation suite.

Speaker Change #117: I think we'll over the next five years we have plans that we can really change the game and RKSM.

Speaker Change #117: Be the clear leader and encourage customers, especially large customers, to just choose Be the Enterprise Standard to drive it efficiently and use it on every trial. That's how confident we are in our DSM.

Rishi Jaluria: Use cases that weren't practical before can become practical. I mean, if I step back way back when to designing the first PhilSource.com API, I knew it was going to unleash a lot of innovation and you just don't know it's not predictable and that's the good. Now in terms of us monitoring that and informing our own roadmap, I guess there may be some of that but mostly that type of innovation really comes from internally our own thinking with our customers.

Speaker Change #117: and E-Pro is early, E-Pro E-Co is early, and there are a lot of specific use case, depending on therapeutic area there.

Peter Yasner: So that's something we have our first set of customers, and some of them are mid-sized companies and enterprise-licensed agreements with mid-sized companies. We just have to move our product forward, improve our product and our processes. I think we'll be fine with ePro and eCo over time. That one will just pick time.

Speaker Change #117: So that's something we, we have our first set of customers, and some of them are our mid-sized companies and enterprise license agreements with mid-sized companies. We just have to move our product forward and improve our product and our processes.

Speaker Change #117: Now people will be fine with E-Pro and E-Co over time, that one will all just pick time.

Unknown Attendee: Okay, great. Thanks, Peter.

Unknown Attendee: Thank you.

Jack Wallace: Your next question comes from the line of Jack Wallace with Guggenheim Securities. Please go ahead.

Rishi Jaluria: We don't want to really disrupt our partners, especially when the partners are having customer success. If there's a major use case that we're very clear that customers need and for some reason the ecosystem is not delivering customer success. Yes, maybe we might step in there but I would guess that what we would do would be more holistic I guess in some sense and not specifically something a partner would tackle because we're generally going to have more resources and in more ability to sway our own roadmap and a partner would and we want to be respectful to the ecosystem.

Peter Paul: Okay, great. Thanks, Peter.

Speaker Change #118: Here next question comes from the line of Jack Wallace with Gook and Himes Securities. Please go ahead.

Jack Wallace: Hey, thanks for taking my questions. We have some a strong quarter, and through that look, Peter and Paul wanted to ask about the how the migration conversations are coming along. And look, you've got a competitor that's made some noise about a takeaway, but it sounds like you're winning pretty much every new vault deal that's out there.

Speaker Change #118: [inaudible]

Jack Wallace: Hey, thanks for taking my questions, and I have some strong quarter and those outlooks.

Speaker Change #120: Peter and Paul wanted us to ask about the...

Speaker Change #121: How the migration conversations are coming along and what you've got to competitor, let's make some noise about it.

Speaker Change #122: A takeaway, but it sounds like you're winning pretty much every new vault deal it's

Paul Shawah: I guess, you know, one, how are the conversations progressing with your largest customers and those timeline? Two, are you hearing any noise from the other competitors around any AI-based functionality that they're thinking is going to be a way to pick off a couple of customers. Thank you.

Speaker Change #123: that's out there. I guess, you know, one highly conversation progressing with their largest customers and those timelines, and two, are you hearing any noise from the your other competitors around any AI based functionality that they're thinking is going to be a way to pick off a couple of customers. Thank you.

Rishi Jaluria: That's really helpful. And then just in terms of some of the adjacencies here and we talked about service center or campaign manager I know comes out later this year, you've had some kind of signs of early traction and early interest. Maybe can you help us understand number one with some of the successors in the service center early. Is this generally greenfield is this displacement and how should we be thinking about the advantages that these products have even on a standalone basis relative to income inventors.

Paul Shawah: Yeah, hey, Jack. I'll start with the migration. So the migration conversations continue or continue to progress very well. And that's, I would really say, across the enterprise and SMB, we're having those discussions pretty, pretty broad base across our customer base. Every customer will certainly make a decision on their own timeline as to kind of when they move and when they commit to moving the Vault CRM, but the discussions are going well. And yeah, I would say I would expect additional top 20 commitments to play out over the next 12 months. So I think we're executing extremely well.

Yeah: Yeah, hey Jack, I'll start with the migration, so the migration conversations continue to progress very well and that's what I would really say across the enterprise and S&B were having those discussions pretty broad-based across our customer base.

Yeah: Every customer will certainly make a decision on their own timeline as to when they move and when they commit to moving of all CRM but the discussions are going well and I would say I would expect additional top 20 commitments to play out over the next 12 months.

Rishi Jaluria: Thank you. Yeah, so the requirement is to of course have false CRM and most of the customers that will that are starting with all CRM are net new customers. These are often pre commercial or maybe they have one product in market. They're a smaller company smaller midsize company. So we expect those will be some of the first companies to go live with service center. And campaign manager will be equally applicable and create value for the enterprise and large customers.

Paul Shawah: We're not doing anything to unnatural a force of decision timeline. We want customers to make the decision when they're ready and when it's right for them. But, as I said, I just expect some additional commitments over the next 12 months. So that's kind of how migrations are going. And you see that we're executing well on that. We're on track to have some of our first migrations with some small customers by the end of this year in Q4, but also some of the larger migrations happening starting next year.

Yeah: So I think we're executing extremely well, we're not doing anything to unnatural a force of decision time one. We want customers to make the decision when they're ready, and when it's right for them. But as I said, I just expect some additional commitment over the next 12 months.

Yeah: So that's kind of how migrations are going and you see that we're executing well on that. We're on track to have some of our first migrations with some small customers by the end of this year and two four. But also some of the larger migrations happening starting next year.

Rishi Jaluria: Also that will play out over time as we as we mature the product, but they fundamentally have a distinct advantage right from the beginning, which is that they're they're built into the CRM. So everything that happens happens against a single customer record, which which means that everybody in the team, it's about creating customer centricity. Everybody that touches that customer has the same exact view of the customer. They can share information. They share the same consent.

Paul Shawah: I think your second question was about competition. What's happening in the competitive space a little bit related to AI. I think this is an opportunity maybe to take a step back a little bit around what's happening from a competitive landscape standpoint. I think you brought up a competitive takeaway. We did hear about that. But it's clear that the primary competitor for us is Salesforce. We used to compete with IQVIA. IQVIA, their product OCE, hasn't performed well in the marketplace. They sold off and licensed the rights back to Salesforce. So we don't see them as a competitor anymore.

Yeah: I think your second question was about competition, what's happening in the competitive space, a little bit related to AI.

Yeah: I think this is an opportunity to maybe take a step back a little bit around what's happening from a competitive landscape at the standpoint. I think you brought up a competitive takeaway. We did hear about that, but it's clear that the primary competitor for us is Salesforce. We used to compete with IQVA.

Rishi Jaluria: They share the same content. They share the same compliance rules. It eliminates a lot of handoffs of data and integrations and complexity. It's a much simpler technology stack. And it's much more valuable in terms of cream collaboration and customer centricity. So we expect to see it the uptake of these products start in the SMB, but certainly continue to be available to our larger customers. Now, you asked about use standalone. It's very likely that these will be used in conjunction with with Valtz CRM. It's unlikely that somebody does a standalone implementation of service center for example or campaign manager. These will be you can think of them as a significant add-ons to to a Valtz CRM implementation.

Rishi Jaluria: Wonderful. Thank you.

Yeah: I'm a QVA there, their product OCE hasn't performed on the marketplace, they sold off and licensed the rights back to Salesforce, so we don't see them as a competitor anymore. Turns out Salesforce is going to build on top of that product.

Paul Shawah: It turns out Salesforce is going to build on top of that product. So IQVIA, I did hear them mention a competitive takeaway. You have to ask them specifically about what that is. Because we're not aware of what they're referring to. So I do see Salesforce as the primary competitor. They do talk a lot about AI. They talk a lot about how they're going to have their first release of a product towards the end of next year. Obviously, there's a different motion for them. This is doing something that's very deep in industry specific. So it remains to be seen what will actually happen there, but of course AI is a big part of that selling pitch.

Speaker Change #125: So I did hear them mention competitive takeaway. You'd have to ask them specifically about what that is. We're not aware of what they're referring to that. So I do see Salesforce as the primary competitor. They do talk a lot about AI. They talk a lot about how they're going to have their first.

Speaker Change #125: and release of a product towards the end of next year. Obviously, there's a different motion for them, right? This is doing something that's very deep and industry-specific. So it remains to be seen in what will actually happen there. But of course, AI is a big part of that selling pitch.

Tyler Radke: Your next question comes from the line of Tyler Radke, with City, please go ahead. Yes, thank you. Peter, it's encouraging to see the beaten raise here and particularly despite some services weakness. I'm wondering if you attribute some of this strength that you saw in new bookings is a function of the environment getting slightly better. I know last quarter you called out headwinds, I didn't see anything too much about the macro and certainly some of the results from, you know, you're publicly traded peers and life sciences with indicate we're maybe moving off the bottom. So just curious.

Paul Shawah: In terms of kind of our position, I think about our competitive position as continuing to improve. You see that in the results. But I do think we have a structural advantage. Peter talked about that in a clinical space. I think we also have that structural advantage in the commercial and in the CRM space. Really, for a number of reasons, first is the execution. We have a product that's available in the marketplace. We have 15 customers live on it. We have our tough 20 farmer customers that will be live from a migration by the end of next year over 50 countries.

Speaker Change #125: Hansen.

Speaker Change #126: in terms of kind of horror.

Hansen: position, I think about...

Speaker Change #128: are competitive position as continuing to improve and to improve. You see that in the results.

Peter Paul: But I do think we have a structural advantage, Peter talked about that in the clinical space, and I think we also have that structural advantage in the commercial and the CRM space.

Peter Paul: really for a number of reasons. First is the execution. We have a product that's available in the marketplace. We have 15 customers live on it. We have...

Peter Paul: are a tough 20 farmer customer that will be alive from a migration by the end of that year over 50 countries.

Paul Shawah: That's really, really hard to do. It's not clear that anybody can deliver on that. Salesforce could deliver on that in two, three, or even four years. Even if we're able to get there at all, we know that IQV wasn't able to deliver on that. So having a product available and executing on that consistently, that's a big advantage. Certainly, our customer relationships, we've been selling and working with these customers and delivering for the last five or ten or 15 years with some of these customers. And then, of course, our vision: we're building a commercial cloud, an industry cloud, and that's very different than what anybody else in the market is doing.

Tyler Radke: If you've seen any any project acceleration, anything that makes you more optimistic about the overall and overall environment, thinking of the second half. Tyler, I think the macro environment from what I can see is overall one change from 90 days ago. You know, we still have the things going on that we have going on. So the good performance is related to strong execution. We executed very well in the quarter. Also, you know, we had maybe some good luck and no bad luck, right? I think some quarters are like that. But overall, strong execution and no change in the macro environment that I can see. Great. That's helpful.

Speaker Change #129: That's really, really hard to do. It's not clear that anybody can deliver on that Salesforce could deliver on that in two or three or even four years.

Speaker Change #130: Even if we're able to get there at all, we know that I could be a wasn't in-ball.

Speaker Change #130: To deliver on that so...

Speaker Change #131: Having a product available and executing on that consistently, that's a big advantage. Certainly, our customer relationships have been selling and working with these customers and delivering for the last five or ten or fifteen years with some of these customers.

Speaker Change #132: and then of course our vision we're building a commercial cloud and industry cloud and that's very different than what anybody else in the market's doing.

Paul Shawah: So I give you a long answer, but I wanted to give you some context. The competitive position is playing out, and this is why we're so focused on execution. We have the right product strategy. We're going to continue to focus on execution, and I think based on that we'll create a durable business. And with growth opportunity with some of the new products that we talked about earlier in the areas of service and marketing and patience.

Speaker Change #132: I give you a long answer, but I want to give you some contacts.

Speaker Change #132: The competitive position is playing out and this is why we're so focused on execution. We have the right product strategy we're going to continue to focus on execution and I think based on that, we'll create a durable business and we'll grow for opportunity with some of the new products that we talked about earlier in a air as a service and marketing and patient.

Timothy Cabral: And maybe a follow up for Tim. Just as I look at the moving pieces and the guide, can you just walk through the services piece. And then as I think about the guide mostly coming from commercial. Is it the new CRM wins that you talked about in the quarter? Was that the biggest driver of the commercial razor? Or was it other pieces of the portfolio that that outperformed on the commercial side?

Paul Shawah: Thanks, Paul. I really appreciate it, and if I could click on it on your compass, it's been eight months since the launch of the Prescriber of National. Just wondering if conversations with clients at a high level are progressing and if any of your larger customers have deemed the data to be compensation grade. If not yet at this point, what a timeline would look like for that determination. Thank you. Yeah, big progress with Compass and mostly in the patient area in terms of sales and new brands that we're adding in the Prescriber National projected products. There's more education going on, you know, a little, a little bit of sales activity here and there, but there's a lot of education getting ready.

Speaker Change #133: I really appreciate it and that I could quickly and compass in eight months since these launchers for the Sprayward National, just wanting to have conversations with clients at a high level or progressing.

Speaker Change #134: If any of your larger customers have deemed the day to be compensation grade and if not yet at this point, you'll get a timeline that would look like for that determination. Thank you.

Timothy Cabral: Thank you. Yeah, so on and Tyler, thanks for the question. On the services side, you know, some of the same dynamics that we talked about in the last quarter, we saw a little bit here, meaning some delays and service projects from a timing perspective. The other thing that we saw, which was somewhat a new dynamics, we don't know whether or not it will be a trend is we had a few customers, one quite large, who instead of contracting with third party size on our paper decided that they were going to go directly to the customer directly to third party.

Speaker Change #135: Yeah, with the biggest progress with the contest today.

Speaker Change #136: In most of the patient year, in terms of sales and new brands that we're having.

Speaker Change #137: in the Prescriber National Projective Products. There's more education going on, you know, a little bit of sales activity here and there, but there's a lot of education getting ready. We don't have anybody using it for compensation yet. I do expect that whole happen next year.

Paul Shawah: We don't have anybody using it for compensation yet. I do expect that will happen next year. It's important to remember that for Compass, particularly prescriber and national, we're taking a new approach of fundamentally different data approach. We are projecting not only retail data, but specialty data to not only retail prescriptions, but things complex therapies that are delivered through specialty pharmacy. So we're projecting for, you know, about 4,000 brands. That's something totally new, and people will get have to get used to that before they use it for compensation. For compensation that's also generally people look at that on an annual basis in general on the average, right?

Speaker Change #137: It's important to remember that for Compass, particularly prescriber and national, we're taking a new approach of fundamentally different data approach. We are projecting not only retail data.

Timothy Cabral: So while that is a reduction in our revenue opportunity, it certainly supports how we think about what we're optimizing for in the service business, which is really customer success. And as we've talked about in the past, you'll see customers make these marginal decisions. And we don't try to fight against those. This is about customer success and enabling our customers to move on to the best innovation and really. Realize the customer success and value that our products deliver.

Speaker Change #137: but specialty data, so not only retail prescriptions, but things complex therapy that are delivered through specialty pharmacy, so we're projecting for about 4,000 brands.

Speaker Change #137: That's something totally new and

Speaker Change #137: People will get half to get used to that before they use it for compensation. For compensation, that's also generally people look at that on an annual basis in general on the average, try to not going to switch that to mid-year.

Paul Shawah: They're not going to switch that mid-year. So we'll see how things play out with Prescriber and National. I very bullish over the long term, but boy, that's not quite non-everish, you know, but it's a big, it's a big, it's a big hell of a climb. It's going to take time. Got it. Thank you so much. You got to get it.

Timothy Cabral: So so I think those are some things that that informed the services, on the commercial side, you know, the outperformance in Q2 and I would say the increase in guide are one and the same. While we are seeing continued momentum and progress on the core CRM piece, Tyler, certainly the outperformance and what informed the increase in guide was really the performance in our commercial content area and our cross-sex area. So those are the two that really drove the larger guide in the past. In this cycle.

Speaker Change #138: We'll see how things play out with the subscriber and national, I'm very bullish over the long-term, but boy, that's not quite non-everyst you know, but it's a big hell of a time, it's going to take time.

Unknown Attendee: Okay.

Carolyn Valenti: Your next question comes from the line of Cali Valenti with Goldman Sachs. Please go ahead.

Speaker Change #139: Thank you so much for being here.

Speaker Change #139: Ok.

Speaker Change #140: Your next question comes from the line of Tally of the Valenti with Goldman Sachs. Please go ahead.

Carolyn Valenti: Hi, thanks for taking my question, and congrats on the quarter. Just a higher level one for me to start with. When you look at your addressable market today, just curious like what product suite do you see the most opportunity to continue developing functionality and over time? Is that kind of more of the R&D side of the business versus a commercial and any kind of specific products you would call out? I would say all both R&D commercial have room to grow in multiple areas. Both of them have products that are quite new, very new, such as Campaign Manager Service Center.

Speaker Change #141: Hi, thanks for taking my question and congrats on the quarter. Just a higher level one for me to start with. When you look at your addressable market today, just curious, like, what products we do see the most opportunity to continue developing functionality in over time, is that kind of more of the R&D side of the business versus a commercial in any kind of specific products you would call out?

Timothy Cabral: Thank you for the color and Tim, hope we can continue to work together in the future. Thanks. Thanks, Tyler.

Stan Berenstein: Your next question comes from Stan Berenstein with Wells Fargo Securities. Please go ahead. Thanks for taking my questions.

Kelly: Kelly, I would say all both on the commercial have room to grow in multiple areas. Both of them have products that are quite new, very new, such as.

Stan Berenstein: So in the particular remarks, you called out a top 20 biopharma win in R&D, I think standardizing on RIM and TTMS. Could you just walk us through, you know, how long did it take for this deal to work itself through the pipeline and maybe just generally how active is your pipeline with other large form of potential looking to standardize multiple vault products weeks. Thanks. Stan, I'll take that one. I think that opportunity with that customer.

Peter Yasner: And then over on Compass, you know, we just talked on Compass Prescriber and Safety Suite. We got a pro. If you look at our cam overall, how we laid it out, our 2019 cam, about 35 for the biggest areas are commercial and clinical at about sort of 35% each by commercial clinical. Then we have quality, which is another big area. We have limbs coming out there. We have bachelor leaves. And then after that, it's regulatory and safety. I would say that's how to think about it. I wouldn't say there's one dominant area. The two big serious clinical and commercial make both have a mix of new and established products.

Kelly: Campaign Manager Service Center and then over on Compass, we just talked on Compass prescribed or in the safety suite we got April.

Speaker Change #143: If you look at our cam overall how we lay it, lay it out our twenty-thing cam.

Speaker Change #143: About 35, the biggest areas are commercial and clinical.

Speaker Change #143: at about 33% each.

Stan Berenstein: I remember working on it roughly, you know, six years ago, seven years ago, discussions, information, no relationship building, that type of stuff. Then it became more active, you know, roughly a year ago with when it really went into, okay, we're really going to think about some things here and let's share information. So that's about the timeframe of those types of things. And if you look in the top 20, there are more opportunities.

Speaker Change #143: Commercial Clinical, then we have quality, which is another big area, we have limbs coming out there, we have batteries, and then after that it's regulatory and safety.

Speaker Change #144: I would say...

Speaker Change #144: That's how I think about it. I wouldn't say there's one dominant area. It's a two big series, clinical and commercial and they both have a mix of new and established products.

Peter Yasner: Yeah, that makes sense, thank you. And then just as a quick follow-up, I just wanted to ask, you know, as science continues to evolve at a kind of a rapid clip, how do you think about your solutions, particularly some of the trial-facing ones, evolving with that, and just kind of some of the flexibility that you've built into those solutions to deal with that. Thank you. Yeah, if you look at what we do, you've mentioned the science. This is where you know the real biology, where we're understanding more about how the human body operates, how we can treat our unmet needs, and there's a lot of needs that are on that right now. In science, it is really advancing.

Speaker Change #145: Yes, that makes sense. Thank you. And then just as a quick follow-up, just wanted to ask you as science continues to evolve it kind of a rapid clip. How do you think about your solutions, particularly some of the trial-facing ones, evolving with that and just kind of some of the flexibility that you've built into those solutions to deal with that?

Stan Berenstein: So for example, in safety, very new, very new products week in quality, many more products in clinical, we've added products in regulatory, some don't have our products yet. So there's, there's a number of those that are active and in various stages of activity every time. So you think about top 20 and, you know, five different major opportunities is the total of 100 opportunities you might have in total, right? So we certainly have, you know, more than 10 things active at anyone given time. That's the way to think about it because there are multiple opportunities in these top 20s.

Speaker Change #146: Thank you. Yeah, if you look at what we do, you can miss in the science, this is where, you know, the real biology where we're understanding more about how to human body operates, how we can treat our own net needs, and there's a lot of needs that are on that right now in our answers really adapting.

Peter Yasner: Now, with what Veeva does, we're generally not involved at that level of the science. We design our solutions to handle all different types of clinical trials to manufacture all different types of drugs to do the sales and marketing and all different types of products, so we're generally not specifically affected by the science because we, build that flexibility in. Now evolution in science is good for Veeva overall because that helps the life sciences industry grow, more medicines for more patients, more value; therefore, more need for automation. Great, thank you.

Speaker Change #147: Now what's what? These are the ones we're generally not involved at that level of the science.

Speaker Change #147: We design our solutions to handle all different types of clinical trials, to manufacture all different types of drugs to do the sales when marketing and all different types of products. So we're generally not...

Stan Berenstein: That's just one opportunity.

Stan Berenstein: Helpful, maybe just a quick follow up on the cross looks, frankly, you're seeing anything to call out related to the election cycle. There's there more reliance by clients on on the channel marketing. Then maybe you're benefiting from wondering if you're seeing anything incremental just season away from the election cycle. Thanks. Now I wouldn't say seasonal. I think it's just increasing market leadership. We've been delivering quality product for a while now. And there were some entrance in and out there that some of those didn't pan out so well in ROI.

Speaker Change #147: Specifically affected by the science because we still let flexibility in. Now, evolution in science is good for vivo overall because that helps the life sciences industry grow. More medicines for more patients, more value, and therefore more need for automation.

Speaker Change #147: [inaudible]

Tim Cabral: Your next question comes from the line of a Craig Head and back with Morgan Stanley, please go ahead. Thank you. I wanted to touch on cap all occasion as your cash balance continues to build up. Any update on the strategy there and opportunity to put that to work. Yeah, Craig, thanks for the question, Tim. No update to that. What you've heard us talk about in the past is focused primarily on dry powder for potential M&A, so no, no change in what you've heard us talk about in the past.

Speaker Change #148: Great, thank you.

Craig head-in-back: Here next question comes from the line of a Craig head-in-back with Morgan Stanley, please go ahead.

Craig head-in-back: Thank you. I want to touch on cap all occasion, as your cash balance continues to build up, any update on the strategy there and opportunity to put that to work.

Stan Berenstein: So I think there's customers coming back to a little bit of quality now. Also we're having, we have two businesses in Crossex, one is the measurement and optimization of media campaigns. And the other one is digital audiences where customers are using our audiences, our consumer audiences for their marketing campaigns. And the audience business is something we put a little more focus on in the last year and those results are paying off. So it's not anything cyclical things really weren't the guy. Thank you.

Brent Bracelin: Your next question comes from Brent Bracelin with Piper Sandler, please go ahead.

Speaker Change #150: Yeah, Craig, thanks for the question that no update to that. What you've heard us talk about in the past is focused primarily on dry powder or potential lemonade. So no change in what you've heard us talk about in the past.

Tim Cabral: Okay, and then as my follow up, just touching on head count up 1% year of year, I'm sure some of that is just some of the services weakness in terms of response to that, but just more broadly, how are you thinking about head count and, you know, kind of going into next year. Yeah, Craig, as we look forward, as you heard both Peter and Paul talk about it in this call today, we do have a large opportunity in front of us and we continue to look for the right level of investment, which will include adding to the team.

Speaker Change #150: [inaudible]

Speaker Change #151: Okay, and then as my follow-up, just touching on Headcount up 1% year of year, I'm sure some of that is just some of the services weakness in terms of response to that, but just more broadly how are you thinking about Headcount and kind of going into next year?

Brent Bracelin: Good afternoon, one question on top 20 delectivity, a follow up on margins. Peter, I get the stronger execution and a little luck this quarter helping you, but just curious, what's driving the top 20 wins? It looks like you got some in safety quality, linky people, R&D, it feels like a bit of a change from last quarter and just curious if it's vendor consolidation that's resonating out there, any sort of additional color you can point to why the deal is closed this quarter would be super helpful, and I quick follow up for Tim.

Speaker Change #152: Yeah, Craig, as we look forward, as you heard both Peter and Paul talk about in this call today, we do have a large opportunity in front of us and we continue to look for the right level of investment, which will include adding to the team. I think what you've seen over the last year is while we have been adding, we've also been...

Tim Cabral: I think what you've seen over the last year is, while we have been adding, we've also been trying to drive and gain more efficiency, and I think you called it out in terms of services, probably an area where we've seen the largest amount of efficiency.

Craig: Trying to drive and gain more efficiency, and I think you called it out in terms of services, probably

Craig: An area where we've seen the largest amount of efficiency.

Tim Cabral: And I mentioned that in the gross margin performance of that business earlier, you're seeing that outcome. So look, I think there is an opportunity, a big opportunity in front of us, and we'll invest against it, but at the same time, we're also very thoughtful on how efficient we want to be as a team, how appropriately lean as an organization we want to be. That's helpful, thanks. Sure.

Craig: And I mentioned that in the gross margin performance of that business earlier, you're seeing that outcome. So look, I think there's an opportunity, a big opportunity in front of us.

Peter Gassner: But I would say it's just timing, you know, there was no other reason than that, it's timing, because if you step back, you know, what has Veeva doing, we're really in the development cloud area specifically, and we're building a very durable business there. We have a structural advantage where we have all these products in the different areas that sit together and have had a high degree of customer success, and customers that are actually getting lots of ROI out of these products, and we're really the only company doing that.

Craig: and will invest against it. But at the same time, we're also very thoughtful on how efficient we want to be as a team, how appropriate we lean as an organization we want to be.

Ryan McDonald: Your next question comes from Ryan McDonald with Meet-a-Man company, please go ahead. Thanks for taking my questions, and grats on a great quarter. Peter, I want to talk about safety a bit. Obviously, continuing to have nice success there, but as it was mentioned in the preparatory markets, it's a complicated segment with customers resistant to change. Just curious, as you're continuing to have safety conversations with those prospective customers, is there some great unlock that we should kind of look for to help drive this modernization into the cloud and save versus on-prem in that segment of the market?

Speaker Change #154: Good, that's helpful, thanks.

Speaker Change #155: Sure. Your next question comes from Ryan McDonald's with Needham in Company. Please go ahead.

Ryan McDonald: Thanks for taking my questions and graphs on a great quarter.

Speaker Change #157: I want to talk about safety that obviously is continuing to have a nice success there.

Peter Gassner: So let's drive in customers to come to us, it's just increased, you know, to return on the investment, they can get more efficient, and that's what they're trying to do. But there's a limited number of things and changes they can tackle all at once, so that's why not all the change happens all the same time.

Speaker Change #158: As it was mentioned in the prepare to market, it's a complicated segment with customers resistant to change. Just curious, as you're continuing to have safety conversations with those...

Speaker Change #158: Perspective Customers, you know.

Speaker Change #159: is there's some great unlock that we should kind of...

Speaker Change #160: Look for to help drive this modernization into the cloud and save the versus on-prem and that segment of the market. As you think about the next 12 to 24 months, there's a catalyst in your view that sort of a locks that opportunity, or maybe acens the wave of innovation there.

Peter Gassner: We're building this long-term franchise is one way to think about it of the very durable software products that are somewhat difficult for the customer to consume because they have to change their processes, but also they're very sticky, they don't move them out. So that's what we're building. We don't generally lose to competitors. We might lose to inactivity. The customer says, hey, I'm not prioritizing this particular area. I want to prioritize another area with my change, but we're not generally losing to another vendor.

Peter Yasner: And as you think about the next 12 to 24 months, is there a catalyst in your view that sort of something or what? But I do think there'll be a catalyst. We have a clear product strategy, a safety suite in the cloud that really has a lot of innovation and has some customers' lives and happy for a period of time. There are two legacy providers; mainly, there may be some smaller ones, but there's a lot of work to do there. And that starts getting around, and they start having issues, and it becomes not tenable. Okay, that would hasten the move to Veeva because Veeva is kind of stable.

Speaker Change #161: I do expect there will be a catalyst if things are our catalysts you can't predict when or what, but I do think there will be a catalyst.

Speaker Change #162: We have a clear product strategy safety sweep in the cloud, but it really has a lot of innovation and has some tough ones life and happy for a period of time. There are two legacy providers, mainly there, maybe some small ones, but there's mainly two legacy providers.

Timothy Cabral: Helpful color there, and then Tim is a follow-up on margins. I think up margins were the highest we've seen in three years. Great to see that back, trending above 40%. It looks like the biggest factor there was gross margin improvement. Can you just talk a little about what's driving that? Is it just mixed shift and how should we think about that going forward? Thanks.

Speaker Change #163: We don't know what those legacy providers do. We don't know this.

Speaker Change #164: One of them has issues here there and that starts getting around and they start having issues and it becomes not tenable. Okay, that would hasten to move to be. Look at this kind of stable, you know, we're not moving, that solution is going to be good.

Peter Yasner: We're not moving. That solution's going to be good. Another accelerant, I would say, is as our EDC product gets more traction and we have customers start cooking our EDC product to our safety product. There's significant savings there, significant savings. People can be repurposed to do other things when that connection is done, so that would get noticed. And there may be some type of breakthrough that could happen over time, to remember this safety is on the vault platform. So it has the complete flexibility of the Vault platform, including the direct data API. So what type of AI things can be done on top of that AI, that direct data API, type of AI things that would be different than can be what can be done on the legacy.

Timothy Cabral: Yeah, Brent. Thanks for the question. Yeah, on the gross margin side, I think it's a combination of mixed shift. Both more subscription revenue than services, and more non-VIVA CRM revenue with all the other products that we don't pay the royalty to sales for. Both of those mixed shifts into play as you think about the improved gross margin. Look, a little call out. While services revenue was in line with guidance, the margin performance was quite good.

Speaker Change #165: Another accelerant I would say is as our EDC product gets more traction and we have customers start clicking our EDC product to our safety product. There's significant savings there, significant savings.

Speaker Change #165: People can be repurposed to do other things when that connection is done so that would get noticed.

Speaker Change #165: and there may be some type of breakthroughs that could happen over time to remember this safety is on the ball platform. So it has a complete possibility of the ball platform, including the direct data API.

Timothy Cabral: The service team continues to deliver value in a very efficient way. I think that is probably how you think about our overall company, Brent. I think we deliver a tremendous amount of value to our customers, and Peter and a leadership team are highly efficient in doing it, and you're seeing that in the results of our operating margin.

Speaker Change #165: So, what type of AI themes can be done on top of that AI in that direct AI type of AI themes?

Peter Yasner: And that might cause some type of tipping point. I believe our strategy for safety is quite good because we know what we're doing, and we're moving along. There are two legacy providers that won't be able to move along at some point in the, you know, we have a structural advantage.

Speaker Change #165: That would be different than can be what can be done on the legacy and that might cause some type of a tipping point.

Timothy Cabral: Thanks, Brian. Makes sense, great to see you. Thanks, guys. Thanks, Brent.

Speaker Change #166: I believe our strategy for safety is quite good because we know what we're doing and we're moving along. There are two legacy providers that won't be able to move along at some point in the, you know, we have a structural advantage. I just don't know when that's going to start happening.

Dylan Becker: Your next question comes from Dylan Becker with William Blair. Please go ahead. Hey, guys, we have a nice job here.

Peter Gassner: Maybe for Peter, starting with you, you call that site connect in the prepared remarks, and so wondering if we get some more context on kind of the extension of the clinical offering that we've talked about other channels, ePro, ECO recruitment in the past, and there's a long runway within the existing toolset, but actually think about kind of maybe more of the early, early emerging solutions within clinical sets, a right way of thinking about it. Done.

Peter Yasner: I just don't know when that's going to start happening.

Unknown Attendee: Multiple color of their Peter, thanks.

Peter Yasner: Maybe, as a follow-up question, just wanted to touch on vault basics, just real quick. I know it's a small, sort of smaller segment of the business in terms of your exposure, but obviously it's been one that, you know, if we look over the last 12 months, it's been more volatile in the earlier stage biotech. This curious, you know, if you think about some of the early success here or maybe momentum, that vault basics gives you at the lower end of that market, you know, can turn that earlier stage segment into more of a growth engine over the next couple of years for Viva.

Speaker Change #167: Thank you. Maybe as a follow-up question, just wanted to touch on Valt Basics just real quick. I know what to small.

Speaker Change #168: sort of smaller segment of the business in terms of your exposure, but obviously it's been one that, you know, hopefully look over the last 12 months, it's been more volatile in the earlier stage of biotech.

Peter Gassner: I'll take specifically side connect because it is a key product for Veeva and very innovative site connect is used by the sites, the clinical research sites around the world, and with our new evolution of site connect, our new release here. It's easy for all sites to consume it, can use it, doesn't require any special stuff around their side. We've added a bunch of site functionality, so I think the sites are going to really like that.

Speaker Change #169: This curious, you know, if you think about some of the early success here, or maybe momentum that ball, basic, gives you at the lower end of that market, you know, can turn that earlier stage segment into more of a growth engine over the next couple years for Viva. Thanks.

Peter Yasner: Thanks. Yeah, I love all basically. Just get that out there. I love it for many, many reasons. One is, we're only starting about a year ago. And man, we really did some major innovation there. We already have 12 customers live. More customers than that signed up. So that has showed the speed and the even at our size. We can move. We put great people on it, make them great things. It's also interesting that about 80 percent of the opportunity there would be opportunity that was not available to be there. You know, just not available before, because they didn't have the wearable call to go on to the full development class.

Speaker Change #170: Yes, I love all basically, so just get that out there. I love it for many, many reasons. One is we're only starting about a year ago and man, we really get to major innovation now. We already have 12 customers live out and more customers than that kind of, so that has showed the speed and the even other sides we can move. We put great people on it and they've gained great things.

Peter Gassner: And the sites in some ways, they are the customers of the sponsors. So the sponsors have to care about the site's efficiency. Now also for site connect, it drives efficiency for the sponsor as well in terms of document exchange and all the different use cases, safety letter distribution, all these use cases. So site connect is interesting that it has a network effect and network effect. It actually helps the site a lot, and it helps the sponsors a lot with their efficiency.

Speaker Change #170: It's also interesting that about 80% of the opportunity there would be up to that it was not available to be, you know, just not available before because they didn't have the wherewithal to go on to the full development class.

Peter Gassner: So that network effect will start kicking in, and I think it will, at times, drag along other clinical products from Veeva as well. So that's about site connect. You had another follow-up question, and I don't recall it. No, that was, yeah, just around kind of other early stage solutions and clinicals, but I think you have a site connect piece covers it.

Peter Yasner: So, they were; some would stay on paper and spreadsheets and collaboration software and shared lives and things, things like that. So, we're getting to more of the market. Now, that market is, maybe you would consider that huge. I think it's, you know, $100 million or more dollars. It's in that range. But that's, it's good revenue, and it's customer success for those customers.

Speaker Change #170: Hello, we're David Lerz, who is staying on paper and spreadsheets and collaborations, we talk stories, and shared lives, and things like that. Go We're...

Speaker Change #171: Getting to more of the market, now that market is maybe you would consider that on huge, I think it's, you know, a hundred million or more dollars it's in that range.

Speaker Change #172: But that's good revenue and it's customer success for those customers. But the other thing that it's doing is it's really teaching Biba Hot to simplify.

Peter Yasner: But the other thing that it's doing is it's really teaching me to have to simplify. How to simplify. How to get more done in a more efficient way. How to help the industry standardize. And that's going to help our enterprise and even G7T business over time. So, Ball Basics has been a home run for the customers who are starting to use it. And it's a great feeling to be there that we can change like that. And it's going to really help our enterprise business over time. Not because those enterprise customers are going to use Ball Basics, but the process improvements and the simple simplification and the standardization that's going to drive, that's, that's really going to pay dividends.

Peter Gassner: There's more around ePro, eCo, all the other areas of recruitment, RTSM, some of the other areas we've talked about in clinical. Yeah, they're just earlier on in their cycle. Very excited about RTSM. I think we have a really a world-leading solution there, especially as we integrate it with our clinical operations suite. I think over the next five years, we have plans that we can really change the game in RTSM, be the clear leader and encourage customers, especially large customers, to just choose Veeva as the enterprise standard to drive it efficiency and use it on every trial.

Speaker Change #172: How to simplify, how to get more done in a more efficient way, how to help the industry standardize, and that's going to help our enterprise and even G7 team business over time.

Speaker Change #172: Ball Basics has been a home run for the customers who are starting to use it.

Speaker Change #172: and it's a great feeling for Viva that we can change like that and it's going to really help our enterprise business over time. Not because those enterprise customers are going to use all basics, but the process improvements in simplification and the standardization that's going to dry.

Peter Gassner: That's how confident we are in RTSM. And ePro is early, ePro eCo is early, and there are a lot of specific use cases, depending on therapeutic area there. So that's something we have our first set of customers, and some of them are mid-sized companies and enterprise license agreements with mid-sized companies. We just have to move our product forward, improve our product and our processes, and I think we'll be fine with ePro and eCo over time. That one will just pick time. Okay, great. Thanks, Peter.

Unknown Attendee: We will build; we will bring Ball Basics to more applications over time, including to the commercial areas. We'll do it in a slightly different way in commercial, but the concepts that Ball Basics are very applicable. Makes sense. Appreciate the color of congrats again.

Speaker Change #172: That's really going to pay dividends. We will bring ball-basics and more applications over time including to the commercial areas. We're building a slightly different way in commercial but the concepts of ball-basics are very applicable.

Kirk Materne: Thank you. Here, next question comes from the line of Kirk Matern with Evercore ISI. Please go ahead.

Speaker Change #173: Makes sense, appreciate the color, congrats again.

Speaker Change #174: Thank you.

Speaker Change #175: Here next question comes from the line of Kirk Matern with Evercore ISI. Please go ahead.

Unknown Attendee: Hi guys, this is Dawn for Kirk, and thanks for taking my question. Looking at Vault Direct Data API, how seamless is it for customers to turn it on and start using? Using it, is it something that needs an implementation or something that can happen kind of right away?

Speaker Change #175: Hi, guys. This is Dr. Kirk and thanks for taking my question. Looking at Vault Direct data API, how seamless is it for customers to turn it on and start using it? Is it something that needs an implementation or something that can happen kind of right away?

Jack Wallace: Okay. Your next question comes from the line of Jack Wallace with Guggenheim Securities. Please go ahead. Hey, thanks for taking my questions. We have some strong quarter. Peter and Paul wanted to just ask about the how the migration conversations are coming along. And look, you've got a competitor that's made some noise about a takeaway, but it sounds like you're winning pretty much every new vault deal that's out there. I guess, you know, one, how do the conversations progressing with your largest customers and those timeline and two, are you hearing any noise from the other competitors around any AI based functionality that they're thinking is going to be a way to pick off a couple of customers. Thank you.

Tim Cabral: I'll take that one, Bill, that's here. That is something that's purchased by the customer, so that is something that is not free for the customer's use. Percipathy is not that large; it covers our compute cost, that type of thing, so they have to really decide that they want it. After that, no, there's no implementation. You turn it on, and it's on, and that's that.

Speaker Change #176: I'll take that one, Bill. That's pure. That is something that's purchased by the customer. So that is something that is not free for the customer to use. They purchase it for free is not that large. It covers our compute cost, that type of thing.

Speaker Change #177: So they have to really decide that they want it.

Speaker Change #178: After that, no additional implementation, you turn the gun on and it's on.

Tim Cabral: Now, to use it, the customer will have to learn how to use it, read the documentation, and figure out this is a little bit different type of API. What do I want to use it for? How can I use it? But there's no implementation. You turn it on, and it's on.

Speaker Change #178: and that's that now.

Speaker Change #178: To use it, the customer would have to learn how to use it, be the documentation, figure out, okay, this is a little bit different type of H, yeah, what do I want to use it for, how can I use it? But there's no implementation you turn it on and it's on.

Paul Shawah: Yeah, hey, Jack, I'll start with the migration. So the migration conversations continue or continue to progress very well. And that's, I would really say across the enterprise and SMB, we're having those discussions pretty, pretty broad base across our customer base. Every customer will certainly make a decision on their own timeline as to kind of when they move and when they commit to moving the vault CRM, but the discussions are going well.

Unknown Attendee: Okay, great.

Unknown Attendee: Thanks for taking my question.

Paul Shawah: And yeah, I would say I would expect additional top 20 commitments to play out over the next 12 months. So I think we're executing extremely well. We're not doing anything to unnatural a force of decision timeline. We want customers to make the decision when they're ready and when it's right for them, but as I said, I just expect some additional commitments over the next 12 months. So that's kind of how migrations are going.

Speaker Change #179: Okay, great. Thanks for taking my question.

Carolyn Valenti: Here next question comes from the line of Gelindra saying, with truest securities, please go ahead. Hi, this is Jenny Chao on Forgerland, just seeing that Trisby Kiddries. Just a question on professional service, the first convict on the next quarter, but it seems the professional services part of Veeva Solutions continue to be a weak spot in the report this quarter. Is that still because customers kind of see professional services as a discretionary, and are still continuing to delay certain services? And then for the point where customers are contracting directly with their party vendors, is that driven by some initiatives to pick costs or be more efficient?

Speaker Change #180: Thanks for watching!

Speaker Change #181: Here next question comes from the line of gelandras thing with tourway securities. Please go ahead.

Jenny Chow: Hi, this is Jenny Chow on for Drill and Disseeing that Tricy Kitties.

Jenny Chow: Just a question on professional service, so first comes out on a nice quarter. But it seems the professional services part of the evolution continue to be a weak spot in the report this quarter. Is that still because customers kind of see professional services as discretionary? And they're still continuing to delay certain services.

Speaker Change #183: and then for the part where customers are contracting directly with their party vendors, that driven by some initiatives to bid cost or be more efficient. What do you think is striking that?

Tim Cabral: What do you think is driving that?

Tim Cabral: Yeah, Jenny, this is Tim. I'll take that question, and thanks for it. So first, I would characterize professional services not as a weakness, but as certainly a strength of Veeva. It is one that, as I mentioned earlier, we're optimizing for customer success, which I think our services team is delivering that customer success as they help our customers deploy and adopt some of these very, very important applications. So I think that's a fact, or it's a function of, again, how we think about the services business, and it will be lumpy. Across our product portfolio, the attachments are different for different products.

Speaker Change #183: Yeah, Jenny this is Tamal. I'll take that question and thanks. Thanks for it.

Paul Shawah: And you see that we're executing well on that. We're on track to have some of our first migrations with some small customers by the end of this year. And Q4, but also some of the larger migrations happening starting next year.

Tamal: So first, I would characterize professional services not as a weakness, but it's certainly a strength of Viva. It is one that, as I mentioned earlier, we're optimizing for customer success.

Paul Shawah: I think your second question was about competition, what's happening in the competitive space a little bit related to AI. I think this is an opportunity maybe to take a step back a little bit around what's happening from a competitive landscape standpoint. I think you brought up a competitive takeaway. We did hear about that, but it's clear that the primary competitor for us is Salesforce. We used to compete with IQVIA. IQVIA, their product OCE, hasn't performed well in the marketplace.

Tamal: which I think our services team is delivering that customer success as they help our customers deploy and adopt some of these very, very important applications.

Tamal: I think that's first and foremost, secondly, as you look at some of the dynamics that we're seeing.

Tamal: I think it's a fact that, or it's a function of, again, how we think about the services business and it will be lumpy.

Paul Shawah: They sold off and licensed the rights back to Salesforce, so we don't see them as a competitor anymore. Turns out Salesforce is going to build on top of that product. So IQVIA, I did hear them mention a competitive takeaway. You have to ask them specifically about what that is. We're not aware of what they're referring to there. So I do see Salesforce as the primary competitor. They do talk a lot about AI.

Tamal: There are, you know, across our product portfolio, the attach rates are different, for different products, and as you stated, and as I stated earlier, customers have the optionality to make decisions.

Tim Cabral: And, as you stated, and as I stated earlier, customers have the optionality to make decisions that may be unique to them or best for them. And what we try to do is partner with our customers to make sure that they feel very confident. What I would not say is that this is a function of services generally not being important, while our share of the pie might be reduced a little bit in some of these examples that I gave Jenny. It's not a fact that services or professional services are unimportant to our customers to really get the maximum value out of our solutions.

Tamal: That may be unique to them or best for them and what we try to do is partner with our customers to make sure that they feel very confident.

Paul Shawah: They talk a lot about how they're going to have their first release of a product towards the end of next year. Obviously there's a different motion for them, right? This is doing something that's very deep and industry specific. So it remains to be seen what will actually happen there, but of course AI is a big part of that selling pitch. In terms of kind of our position, I think about our competitive position as continuing to improve.

Tamal: What I would not say is this is a function of services generally not being important.

Tamal: Well, our share of the pie might be reduced a little bit in some of these examples that I gave Jenny. It's not a fact that services or professional services are unimportant to our customers to really get the maximum value out of our solutions.

Paul Shawah: You see that in the results. But I do think we have a structural advantage. Peter talked about that in a clinical space. I think we also have that structural advantage in the commercial and the CRM space. Really for a number of reasons. First is the execution. We have a product that's available in the marketplace. We have 15 customers live on it. We have our tough 20 farmer customer that will be live from a migration by the end of next year over 50 countries.

Tim Cabral: Thanks for that color, Jim.

Tim Cabral: Just to follow up, I remember, since November last year, if you've been able to see some elongated deal cycles and deal timing. Since then, have you seen any of the delayed decision making come back in the last ten months? For the deals that weren't substituted by their own internal solutions, what has been a typical timeframe for that to come back if you have seen any? And thanks for taking my question.

Speaker Change #185: Thanks for that color, Tim. Just to follow up, I remember since November last year we've been seeing some elongated, dual cycle of a deal timing. Since then, I've seen any of the delays that are making come back in the last 10 months. For the deals I weren't that suited by.

Darrell: Darrell, Ertunnel Solutions

Speaker Change #187: has been a typical time for him to let it.

Tim Cabral: Yeah, Jenny, this is Tim again. I think if you think about the conversation that we had ten months ago, the macroeconomic headwinds were just starting to somewhat come into play. And I think that was informed in our conversation ten months ago. As you heard Peter talk about earlier, there are still macroeconomic headwinds that are out there, but I think what we've done a nice job of and working with our customers is executing somewhat through that. So while yes, some deals, some deal cycles get elongated, we are very close to these customers and continue to keep them on the radar screen in terms of closing those deals at the appropriate time for them.

Speaker Change #188: Come back if you have seen any.

Paul Shawah: That's really, really hard to do. It's not clear that anybody can deliver on that. Salesforce could deliver on that in two or three or even four years. Even if we're able to get there at all, we know that IQV wasn't able to deliver on that. So having a product available and executing on that consistently, that's a big advantage. Certainly our customer relationships who have been selling and working with these customers and delivering for the last five or 10 or 15 years with some of these customers.

Speaker Change #189: and thanks for taking my questions. Yeah.

Speaker Change #189: Yeah, I mean, this is Tim again. I think as you think about the conversation that we had 10 months ago.

Speaker Change #190: The macroeconomic headwinds were just starting to...

Speaker Change #190: somewhat come into play, and I think that was informed in our conversation 10 months ago. As you heard Peter talk about earlier, there are still macroeconomic headwinds that are out there.

Paul Shawah: And then of course our vision, we're building a commercial cloud, an industry cloud, and that's very different than what anybody else in the market is doing. So I give you a long answer, but I wanted to give you some context. The competitive position is playing out, and this is why we're so focused on execution. We have the right product strategy. We're going to continue to focus on execution, and I think based on that we'll create a durable business. And with growth opportunity with some of the new products that we talked about earlier in the areas of service and marketing and patience.

Speaker Change #190: But I think what we've done a nice job of and working with our customers is executing somewhat through that. So, while yes, some deals.

Peter Paul: Some of your cycles get elongated.

Peter Paul: We are very close to these customers and continue to keep them on the radar screen in terms of closing those deals at the appropriate time for them. So I think it's a function of the macroeconomic headwinds, but we're executing through that.

Tim Cabral: So I think it's a function of the macroeconomic headwinds, but we're executing through that.

Speaker Change #191: Episode 2

Charles Rhyee: Your next question comes from the line of Charles Rhee with TD Cowan. Please go ahead. Oh yeah, thanks for taking the question. You know, the first one I asked about prospects, the second quarter now you had a solid performance here, and you know, we heard peers in the commercial space talk about seeing delayed projects also starting to convert. Are you seeing a thawing in the discretionary spend across biopharma companies that you think that can accelerate demand for some of the other offerings as well? I like Charles and Speeder. I have been called a thawing really. Now I think sometimes what happens is when you have a little bit of pent up demand, sometimes that just causes, you know, that puts things off for later. So I think you may be seeing that. You know, I wouldn't call it a thawing, I just think maybe they had a little bit of pent up and things got pent up enough, so there's been no material, for example, macro news to the negative in the last 90 days.

Peter Gassner: Thank you, Paul. I really appreciate it, and if I could click on it on Compass, it's been eight months since the launch of the Prescriber National. It's wondering how conversations with clients at a high level are progressing, and if any of your larger customers have deemed the data to be compensation grade, and if not yet at this point, what a timeline would look like for that determination. Thank you.

Speaker Change #192: Your next question comes from the line of Charles Re with TD Cowin. Please go ahead.

Charles Re: Oh yeah thanks for taking my questions.

Charles Re: You know, first, I want to ask about cross-exy, second quarter now you had a solid performance here and you know, we've heard peers in the commercial space talk about seeing delayed projects. I'll also start to convert, are you seeing a thawing in the discretionary spend across biopharmal companies that you think that can accelerate demand for some of the other options as well?

Peter Gassner: Yeah, big progress with Compass, and mostly in the patient area in terms of sales and new brands that we're adding in the Prescriber National Projective Products. There's more education going on, you know, a little, a little bit of sales activity here and there, but there's a lot of education getting ready. We don't have anybody using it for compensation yet. I do expect that will happen next year. It's important to remember that for Compass, particularly Prescriber and National, we're taking a new approach, a fundamentally different data approach.

Charles Re: [inaudible]

Speaker Change #194: I'm a child of the speeder, I've been caught up, I'm falling, really? No, I think.

Speaker Change #195: Sometimes what happens is when you have a little bit of pent-up demand.

Speaker Change #195: from the Justice Caucus, you know, that puts things off for later, so I think you may be seeing that, you know, I really call it a sign, I just think maybe they had a little bit of pent up and things got pent up enough so.

Peter Gassner: We are projecting not only retail data, but specialty data. Not only retail prescriptions, but things complex therapies that are delivered through specialty pharmacy, so we're projecting for, you know, about 4,000 brands. That's something totally new, and people will get have to get used to that before they use it for compensation. For compensation, that's also generally people look at that on an annual basis in general on the average, right? They're not going to switch that mid year.

Speaker Change #196: There's no material, for example, macro news to the negative in the last.

Peter Yasner: When you have macro news to the negative, it creates a stalling. When you don't have any things that are extra to the negative, things start flowing again, but I wouldn't call it a thawing. A thawing, you might think there's a thaw of ice and then there's a flood coming, it's not like that, it's just flowing a little bit better now.

Speaker Change #196: 90 days. When you have macro news to this.

Speaker Change #197: Negative, the creeps are stalling.

Speaker Change #197: When you don't have any things that are extra to the negative, things start flowing again, but I wouldn't call the following. Ascaling might be my thing, there's a thought, I assume, and there's a flood coming. It's not like that. It's just flowing a little bit better now.

Peter Gassner: So we'll see how things play out with Prescriber and National. I'm very bullish over the long term, but boy, that's not quite non-everish, you know, but it's a big, it's a big hell of a climb. It's going to take time. Got it. Thank you so much. You got it again. Okay.

Tim Cabral: Got it, that's helpful, and then maybe a follow-up for Tim. In the Billions guidance for the third quarter here, it's, you know, kind of implies about 5% year over year in the third quarter, steps back up in the fourth quarter. If I looked the last few years, Billions growth year over year has been a little bit more constant. Anything to call out here? I know earlier Peter and your prepared comments you talked about, you know, timing issues, so just maybe any comments that would be helpful. Thank you. Sure, Charles, I think that guide and the shape of that guide for the back half of the year is the combination of two things: one, Q3 was a little bit of a stronger quarter last year, so a little bit of a harder compare; but also, I think what you've heard us normalize, and you can see that in the deck that we supply the supplement to our press release, Charles, we are seeing some billing term changes, most of it is being driven by movement of renewal dates. That also will have an impact on that normalized billing.

Tim: and then maybe a follow-up for Tim. In the Billions guidance for the third quarter here, it's kind of implies about 5% of the year in the third quarter, steps back up in the fourth quarter. If I looked the last few years, Billions growth, the year of year has been a little bit more constant. Anything to call out here, I know earlier, Peter and your preferred comments we talked about, you know, timing issues. Just maybe any comments that would be helpful. Thank you.

Cali Valenti: Your next question comes from the line of Cali Valenti with Goldman Sachs. Please go ahead. Hi, thanks for taking my question and congrats on the quarter. Just a higher level one for me to start with. When you look at your addressable market today, just curious like what product suite do you see the most opportunity to continue developing functionality in over time? Is that kind of more of the R&D side of the business versus a commercial and any kind of specific products you would call out?

Tim: i

Speaker Change #198: I think that guide and the shape of that guide for the back half of the year is a combination of two things one.

Charles Re: Q3 was a little bit of a stronger quarter last year, so a little bit of a harder compare, but also I think what you've heard is normalize and you can see that in the deck that we supply the supplement to our press release Charles.

Cali Valenti: Cali, I would say all both R&D commercial have room to grow in multiple areas. Both of them have products that are quite new, very new, such as campaign manager service center. And then over on Compass, you know, we just talked on Compass Prescriber in the safety suite. We got a pro. If you look at our cam, overall, how we laid it out our 20,000 cam, about 35 for the biggest areas are commercial and clinical at about sort of 35% each by commercial and clinical.

Charles Re: We are seeing some billing term changes, most of it is being driven by movement of renewal dates that also will have an impact that normalized billing.

Tim Cabral: Got it.

Charles Re: [inaudible]

David Allerson: Your next question comes from the line of David Allerson with BTIG. Please go ahead. Hi, congratulations on the strong quarter. Can you talk a little bit about the competitive environment, especially on the clinical side? It sounds like you've made a lot of advancements on the clinical side over the years, so is your portfolio sweet at least comparable to like Face Forward and Meta Data and e-Research Technologies? Do you have all of those modules that those competitors have now, and if not, when would you expect to have them? Thank you. Thank you.

Charles Re: Karel.

Speaker Change #199: Alright, your next question comes from the line of David O'Larson with BTIG, please go ahead.

Cali Valenti: Then we have quality, which is another big area. We have limbs coming out there. We have bachelor leaves. And then after that, it's regulatory and safety. I would say that's how to think about it. I wouldn't say there's one dominant area. The two big serious clinical and commercial make both have a mix of new and established products. Yeah, that makes sense. Thank you.

David O'Larson: Hi, congratulations on the Strong Quarter. Can you talk a little bit about the competitive environment, especially on the clinical side?

David O'Larson: It sounds like you've made a lot of advancements on the clinical side over the years, so

Speaker Change #201: is your portfolio suite at least comparable to like phase forward and metadata.

Speaker Change #201: and e-research technologies. Do you have all of those modules that those competitors have now and if not, when would you expect it to have them? Thank you.

Peter Gassner: And then just as a quick follow up, so I'm going to ask you as science continues to evolve a kind of a rapid clip. How do you think about your solutions, particularly some of the trial-facing ones evolving with that and just kind of some of the flexibility that you've built into those solutions to deal with that? Thank you. Yeah, if you look at what we do, you mentioned science, this is where you know the real biology where we're understanding more about how the human body operates, how we can treat our unmet needs and there's a lot of needs that are on that right now and science is really advancing.

Peter Yasner: I'll pick that one. In terms of the broadness of our offering, I believe we have the broadest offering that anybody has had before, especially when you look at we're able to tell to the largest of companies and the smaller ones. So we have a full clinical operation suite and a full clinical data management suite. That's, for example, that's not something that they've had before, so that's kind of how I see it. And how did we get that way? I think it's just through discipline and execution. If we look back, our first clinical product was, I believe, in the 2012 timeframe with ETMX; really, we're taught on that.

Speaker Change #202: I'll speed it up, I'll kick that one.

Speaker Change #203: In terms of the broadness of our offering, I believe we have the broadness of offering that anybody has which have before.

Speaker Change #203: especially when you look at where you're able to tell to the largest companies and the smaller ones. So we have a clinical collaboration, and a clinical data management, and a clinical data management, that's...

Speaker Change #203: For example, that's not something that says you mentioned taste forward, that's more than anything, that's really not something that they've had before.

Peter Gassner: Now with what Veeva does, we're generally not involved at that level of the science. We design our solutions to handle all different types of clinical trials to manufacture all different types of drugs to do the salesman marketing and all different types of products. So we're generally not specifically affected by the science because we build that flexibility in. Now evolution in science is good for Veeva overall because that helps the life sciences industry grow. More medicines for more patients, more value. Therefore, more need for automation. Great. Thank you.

Speaker Change #204: So, that's kind of how I see it and how did we get that way? I think it's just the discipline and execution.

Speaker Change #204: We came back our first clinical product because I believe in the 2012 timeframe with the TMS.

Peter Yasner: Got a few customers, got them live, didn't move on until they were really live, really happy. The product started to get a bit more mature, then we now pay, we're going to build CCMS and then EDC, and we stayed there for a while, really focused on those products, made them good. Now we start talking about EDC and site connect and study training, so it's been a systematic approach to build out the clinical suite, and it takes that, because if you want to be a great multi-product company, it means all your products need to be great, not just one or two of them.

Speaker Change #205: The little were taught on that, got a few customers, got them live, you know, didn't move on until they were really live. Really happy, the product started to get a bit more mature than we now pay. We're going to build T&S and then EDC and we...

Speaker Change #205: They're there for a while and really focused on those products made them good.

Craig Heddenbach: Your next question comes from the line of Craig Heddenbach with Morgan Stanley. Please go ahead. Thank you.

Speaker Change #205: Now we start talking about EDC and Sight Connect and Settie Training. So it's been a systematic approach.

Timothy Cabral: I want to touch on cap all occasion as your cash balance continues to build up any update on the strategy there and opportunity to put that to work. Yeah, Craig. Thanks for the question Tim. No update to that. What you've heard us talk about in the past is focused primarily on dry powder for potential M&A. So no no change in what you've heard us talk about in the past. Okay.

Speaker Change #205: To build out the whole Suheet and it takes that because if you want to be a great multi-product company, it means all your products need to be great. Not just one or two of them.

Peter Yasner: So you got to concentrate, and it's hard enough. We've taken a methodical structure to approach that because we're building this durable long-term business that should last for generations. That wasn't really what you set out to do if you're making a clinical application just in a certain area. That's not what you're setting out to do, so I'll frame a reference on what we're trying to accomplish. It is just different.

Speaker Change #205: So you got to concentrate and it's hard enough so we've taken that easy.

Speaker Change #205: I would say a methodical structure approach to that because we're building this durable long-term business at some last-term generations.

Timothy Cabral: And then as my follow up, just touching on head count up 1% year of year. I'm sure some of that is just some of the services weakness in terms of response to that. But just more broadly, how are you thinking about head count and kind of going into next year? Yeah, Craig as we look forward as you heard both Peter and Paul talk about in this call today we do have a large opportunity in front of us and we continue to look for the right level of investment which will include adding to the team.

Speaker Change #206: That wasn't really what you just said out to do if you're making a coin-clap for patients just in a certain area. That's not what you're setting out to do. So I'll frame a reference of what we're trying to accomplish in just different.

Peter Yasner: Okay, great, and then Peter, from your perspective, how important is it to have the commercial and the clinical side all on one single sort of vault database? Some people I've talked to in the channel say, on the biopharmicide, you really have two different kinds of companies in a way. You got the commercial sales side, and then you got the research side. So having everything on vault maybe doesn't really matter. My view is different; I think it matters a lot. Can you maybe just talk a little bit about that from your perspective, Peter? Yes, it certainly knew it's not something that the industry is used to.

Speaker Change #206: Okay, great. And then Peter, from your perspective, how important is it to have the commercial and the clinical side all on one single sort of vault database? Some people I've talked to in the channel, say...

Peter Paul: On the bio-formaside, you really have two different kind of companies in the way you have the commercial sale side and you have the research side. So having everything on a vault maybe doesn't really matter, my view is different, I think it matters a lot. Can you maybe just talk a little bit about that from your perspective, Peter?

Timothy Cabral: I think what you've seen over the last year is while we have been adding we've also been trying to drive and gain more efficiency and I think you called it out in terms of services probably an area where we've seen the largest amount of efficiency. And I mentioned that in the gross margin performance of that business earlier, you're seeing that outcome. So look, I think there is an opportunity a big opportunity in front of us and we'll invest against it. But at the same time, we're also very thoughtful on how efficient we want to be as a team, how appropriately lean as an organization we want to be. That's helpful. Thanks.

Peter Paul: Yes, it's certainly new. It's not something that the industry is used to. One of the started many years ago, Beach Functional Area had different platforms. It wasn't even the Ocells Force.com. I'm going to see if I'm carried around. We've got that platform in the commercial area. The regulatory had their own thing and quality. It said are each, each function.

Peter Yasner: When we started many years ago, each functional area had different platforms. It wasn't even Salesforce.com, I'm going to see around area right. We've brought that platform into the commercial area. The regulatory had their own thing and quality, et cetera, each function. Now what we're seeing is, okay, the R&D side, that's a lot of vault, and we're bringing vault to the commercial side. I think the advantages of that may not be apparent to customers because it's not something they've experienced before. I do think they're tremendously significant, yes. There's efficiencies in IT; that's one thing. Security, vendor management, capability, learning, efficiencies in the system integrator network, all those types of things.

Peter Paul: Now, what we're seeing is okay, but to our inside, that's a lot of balls and we're bringing balls to the commercial side.

Speaker Change #207: I think the advantage is that may not be a parent to customers, because it's not something you may have experienced before.

Ryan McDonald: Sure. Your next question comes from Ryan McDonald with meet-a-man company. Please go ahead. Thanks for taking my questions and your graphs on a great quarter. Peter, I wanted to talk about safety a bit. Obviously, continuing to have nice success there, but as it was mentioned in the cloud and saved you versus on-prem in that segment of the market, and you know, as you think about the next 12 to 24 months, is there a catalyst in your view that sort of elocks that opportunity or maybe hastens the wave of innovation there?

Speaker Change #207: I do think there are tremendous expectations.

Speaker Change #207: There's efficiencies in IT about one thing, security, vendor management, takeability, learning, efficiencies in the system regulator that work all those types of things. But the bigger frame is, it can help the customers connect commercial to clinical better.

Peter Yasner: But the bigger thing is it can help the customers connect commercial to clinical better. That's a CEO-level initiative at many of these companies. I think having a common platform and a common data architecture will help tremendously. But that's a kind of thing that you would have to see it and experience it to believe that that's a vision we have. I don't expect our large companies to buy in on that vision until it becomes a reality. I would say that that's first going to be experienced by smaller customers, biotech that use Viva in the R&D side and the clinical side.

Speaker Change #207: That's a CEO level initiative at many of these companies. I think the having a common platform and a common data architecture will help tremendously.

Speaker Change #208: But that's a kind of thing that you would have to see and experience it to believe it. That's a vision we have. I don't expect.

Speaker Change #208: are large companies to buy in on that vision and tell it to become the reality. I would say that that's first going to be experienced by smaller customers by a catch that used Viva.

Ryan McDonald: I do expect there will be a catalyst, the thing about catalysts who can't predict when or what, but I do think there will be a catalyst. We have a clear product strategy, a safety suite in the cloud that really has a lot of innovation and has some toughness life and happy for a period of time. There are two legacy providers, mainly there may be some smaller ones, but there's mainly two legacy providers.

Peter Yasner: Then they go to commercialize their first product, and they see, wow, that was smooth and that was connected because that's all on vault. That's where it will first happen. Now that's our vision. The main thing is you got to execute. Everybody can have a fine plan, but do you execute it on with quality? And that's what really we're focused on. We want to help the industry, and the way to do that is through the execution, which is not easy. It takes folks.

Speaker Change #208: in the R&D side and the clinical side and then they go to commercialize their first product and they see, wow, that was smooth and that was connected because that's all involved. That's where it'll first happen.

Speaker Change #209: Now, that's our vision. The main thing is you got to execute. Everybody can have a fine plan, but do you execute our honor with quality? And that's what really we're focused on. We want to help the industry and the way to do that is through the execution which is not easy to take focus.

Ryan McDonald: We don't know what those legacy providers do. We don't know if one of them has issues here there and that starts getting around and they start having issues and it becomes not tenable. Okay, that would hasten the move to be because it's kind of stable. We're not moving. That solution is going to be good. Another accelerant, I would say, is as our EDC product gets more traction and we have customers start cooking our EDC product to our safety product.

Peter Yasner: Chris, Chris, thanks very much.

Peter Yasner: And that concludes our question-and-answer session.

Speaker Change #210: Good, thanks very much.

Peter Yasner: I will now return as the conference back over to Peter Gassner for closing remarks. Thank you, everyone, for joining the call today, and thank you to our customers for your continued partnership and to the team for your outstanding work in the quarter. I look forward to speaking with you again at our yesterday on November 7th. Thank you.

Speaker Change #210: In that concludes our question and answer session, I will now return as the conference back over to Peter Gassner for closing remarks.

Peter Gassner: Thank you everyone for joining us today and thank you to our customers for your continued partnerships and to the routine for your outstanding work in the quarter.

Peter Gassner: I look forward to speaking with you again at our guest today on November 7th. Thank you.

Ryan McDonald: There's significant savings there, significant savings. People can be repurposed to do other things when that connection is done so that would get noticed. And there may be some type of breakthrough that could happen over time to remember this safety is on the ball platform. So it has the complete flexibility of the ball platform, including the direct data API. So what type of AI things can be done on top of that AI, that direct data API, type of AI things that would be different than can be what can be done on the legacy.

James Krista: In this concludes today's conference call, thank you for your participation, and you may now disconnect.

Speaker Change #212: In this concludes today's conference call, thank you for your participation and you may now disconnect.

Please wait; the conference will begin shortly.

Ryan McDonald: And that might cause some type of a tipping point. I believe our strategy for safety is quite good because we know what we're doing and we're moving along. There are two legacy providers that won't be able to move along at some point in the, you know, we have a structural advantage. I just don't know when that's going to start happening. Multiple color of their Peter. Thanks.

Peter Gassner: Maybe as a follow up question, just wanted to touch on vault basics just real quick. I know it's a small sort of smaller segment of the business in terms of your exposure, but obviously it's been one that, you know, if we look over the last 12 months, it's been more volatile in the earlier stage biotech. This curious, you know, if you think about some of the early success here or maybe momentum, that vault basics gives you at the lower end of that market, you know, can turn that earlier stage segment into more of a growth engine over the next couple of years for Viva.

Peter Gassner: Yeah, I love all basics. Let's just get that out there. I love it for many, many reasons. One is, we're only starting about a year ago. And man, we really did some major innovation there. We already have 12 customers live. More customers than that signed up. So that just showed the speed and Veeva. Even at our size, we can move. We put great people on it, make them great things. It's also interesting that about 80% of the[inaudible] Hi, this is Jenny Chao on Forgerland, just seeing that through the kitters.

Jenny Chao: Just a question on professional service. The first conversation is on the next quarter, but it seems the professional services part of Veeva Solutions continue to be a weak spot in the report this quarter. Is that still because customers kind of see professional services as discretionary and are still continuing to delay certain services? And then for the part where customers are contracting directly with their party vendors, that should provide some initiative to pick costs or be more efficient.

Jenny Chao: What do you think is driving that? Yeah, Jenny, this is Tim. I'll take that question and thanks for it. So first, I would characterize professional services not as a weakness, but as certainly a strength of Veeva. It is one that, as I mentioned earlier, we're optimizing for customer success. Which I think our services team is delivering that customer success as they help our customers deploy and adopt some of these very, very important applications.

Jenny Chao: So I think that's first and foremost. Secondly, as you look at some of the dynamics that we're seeing, I think it's a fact that, or it's a function of, again, how we think about the services business and it will be lumpy. There are, you know, across our product portfolio, the attachments are different for different products. And as you stated and as I said it earlier, customers have the optionality to make decisions that are that maybe unique to them or best for them.

Jenny Chao: And what we try to do is partner with our customers to make sure that they feel very confident. What I would not say that this is a function of services generally not being important while our share of the pie might be reduced a little bit in some of these examples that I gave Jenny. It's not a fact that services or professional services are unimportant to our customers to really get the maximum value out of our solutions. Thanks for that color, Tim.

Jenny Chao: And just to follow up, I remember since November last year, if you've ever seen some elongated deal cycles and deal timing, since then have you seen any of the delay decision making come back in the last 10 months?

Jenny Chao: Like for the deals that weren't substituted by their own internal solutions, like what has been a typical timeframe for that to come back if you have seen any. And thanks for taking my question. Yeah.

Timothy Cabral: Yeah, Jenny, this is Tim again. I think if you think about the conversation that we had 10 months ago, the macroeconomic headwinds were just starting to somewhat come into play. And I think that was informed in our conversation 10 months ago. As you heard Peter talk about earlier, you know, there are still macroeconomic headwinds that are out there. But I think what we've done a nice job of and working with our customers is executing somewhat through that.

Timothy Cabral: So while yes, some deals, some deal cycles get elongated. We are very close to these customers and continue to keep them on the radar screen in terms of closing those deals at the appropriate time for them. So I think it's a function of the macroeconomic headwinds, but we're executing through that.

Charles Rhyee: Your next question comes from the line of Charles Rhyee with Katie Cowan. Please go ahead. Oh yeah, thanks for taking the question. You know, the first one I asked about the process, the second quarter now you, had a solid performance here, and you know, we heard peers in the commercial space talk about seeing delayed projects also starting to convert. Are you seeing a thawing in the discretionary spend across biopharma companies that you think that can accelerate demand for some of your other offerings as well?

Charles Rhyee: Charles, I've been called a thawing really. No, I think sometimes what happens is when you have a little bit of pent up demand, sometimes that just causes, you know, that puts things off for later. So I think you're, you may be seeing that, you know, I wouldn't call it a thawing. I just think maybe they had a little bit of pent up and things got pent up enough. So there's no, there's no material, for example, macro news to the negative in the last 90 days.

Charles Rhyee: When you have macro news to the negative, it creates a stalling when you, when you don't have any things that are extra to the negative things start flowing again, but I wouldn't call the thawing a thawing might, you might think there's a thaw of ice and then there's a flood coming. It's not like that. It's, it's just, it's just flowing a little bit better now. Got it. That's helpful.

Timothy Cabral: And then maybe a follow up for Tim. In the billions guidance for the third quarter here. It's, you know, kind of implies about 5% year over year in the third quarter steps back up in the fourth quarter. If I looked the last few years, billions growth year of years been a little bit more constant. Anything to call out here. I know earlier Peter and your prepare comments you talked about, you know, timing issues, just maybe any any comments that would be helpful.

Timothy Cabral: Thank you. Sure, Charles. I think that guide and the shape of that guide for the back half of the year is is a combination of two things. One, Q three was a little bit of a stronger quarter last year. So a little bit of a heart of compare, but also I think what you've heard us normalize and you can see that in in the the deck that we supply the supplement to our press release Charles. We are seeing some billing term changes. Most of it is being driven by movement of renewal dates that also will will have an impact that normalize billing. Got it.

Peter Gassner: Your next question comes from the line of David Allarson with BTIG. Please go ahead. Hi, congratulations on the strong quarter. Can you talk a little bit about the competitive environment, especially on the clinical side? It sounds like you've made a lot of advancements on the clinical side over the years. So is your portfolio suite at least comparable to like face forward and meta data and e-research technologies? Do you have all of those modules that those competitors have now and if not, when would you expect it to have them?

Peter Gassner: Thank you. Peter, I'll pick that one. In terms of the broadness of our offering, I believe we have the broadest offering that anybody has had before, especially when you look at, we're able to tell to the largest of companies and the smaller ones. So we have a full clinical operation suite and a full clinical data management suite. That's, for example, that's not something that you mentioned, pays forward. That's more metadata. That's really not something that they, that they've had before.

Peter Gassner: So that's kind of how I see it. And how did we get that way? I think it's just through discipline and execution. If you look back, our first clinical product was, I believe, in the 2012 timeframe with ETMX, really we're taught on that. Got a few customers, got them live, didn't move on until they were really live, really happy. The product started to get a bit more mature. And we now pay, we're going to build TMS and then EDC.

Peter Gassner: And we stayed there for a while, really focused on those products, made them good. Now we start talking about EDC and site connect and study training. So it's been a systematic approach to build out the whole suite. And it takes that because if you want to be a great multi-product company, it means all your products need to be great. Not just one or two of them. So you got to concentrate. And it's hard, and that's, we've taken a, I would say a methodical structure to approach that because we're building this durable long-term business that should last for generations.

Peter Gassner: That wasn't really what to set out to do if you're making a clinical application just in a certain area, right? That's not what you're setting out to do. So I'll frame a reference on what we're trying to accomplish is just different.

Peter Gassner: Okay, great.

Peter Gassner: And then Peter, from your perspective, how important is it to have the commercial and the clinical side all on one single sort of vault database? Some people I've talked to in the channel say, on the bio-farmicide, you really have two different kind of companies in a way. You got the commercial sales side, and then you got the research side. So having everything on vault maybe doesn't really matter. My view is different.

Peter Gassner: I think it matters a lot. Can you maybe just talk a little bit about that from your perspective, Peter? Yes, it certainly knew. It's not something that the industry is used to wouldn't be the started many years ago. Each functional area had different platforms. It wasn't even salesource.com. You see around area, right? We've brought that platform into the commercial area. The regulatory had their own thing and quality, et cetera. Each function.

Peter Gassner: Now what we're seeing is, okay, the R&D side, that's a lot of vault and we're bringing vault to the commercial side. I think the advantages of that may not be apparent to customers because it's not something they've ever experienced before. I do think they're tremendously significant. Yes. There's efficiencies in IT. That's one thing. Security, vendor management, capability, learning, efficiencies in the system, integrator network, all those types of things. But the bigger thing is it can help the customers connect commercial to clinical better.

Peter Gassner: That's a CEO level initiative at many of these companies. I think having a common platform and a common data architecture will help tremendously. That's a kind of thing that you would have to see it and experience it to believe that that's a vision we have. I don't expect our large companies to buy in on that vision until it becomes a reality. I would say that's first going to be experienced by smaller customers, biotech that use Viva in the R&D side and the clinical side and then they go to commercialize their first product and they see, wow, that was smooth and that was connected because that's all on vault.

Peter Gassner: That's where it will first happen. Now that's our vision. The main thing is you got to execute. Everybody can have a fine plan but do you execute it on with quality and that's what really we're focused on. We want to help the industry and the way to do that is through the execution which is not easy. It takes folks.

Peter Gassner: Chris, Chris, thanks very much.

Peter Gassner: And that concludes our question and answer session. I will now return as the conference back over to Peter Gassner for closing remarks. Thank you everyone for joining the call today and thank you to our customers for your continued partnership and to be the team for your outstanding work in the quarter. I look forward to speaking with you again at our investor day on November 7th. Thank you. In this concludes today's conference call, thank you for your participation and you may now disconnect.

James Krista: Please wait, the conference will begin shortly. Thank you.