2014 investor meeting€¦ · performance problems associated with our data centers or computing...

2014 Investor Meeting September 17, 2014

®2014 Veeva Systems veeva.com | 2

Agenda

Industry Cloud

Market Opportunity

Break

Commercial Cloud

Veeva Vault

Financial Update

Q&A

Peter Gassner, CEO

Matt Wallach, President

Paul Shawah, VP, Product Marketing

Jen Goldsmith, VP, Veeva Vault

Tim Cabral, CFO


Safe Harbor Forward-looking Statements

This presentation contains forward-looking statements, including statements regarding Veeva's future financial outlook and financial performance, market growth, the release dates for and benefits from the use of Veeva's solutions, our partnership plans, our strategies, and general business conditions. Any forward-looking statements contained in this presentation are based upon Veeva's historical performance and its current plans, estimates and expectations and are not a representation that such plans, estimates, or expectations will be achieved. These forward-looking statements represent Veeva's expectations as of the date of this presentation. Subsequent events may cause these expectations to change, and Veeva disclaims any obligation to update the forward-looking statements in the future. These forward-looking statements represent Veeva's expectations as of the date of this press announcement. Subsequent events may cause these expectations to change, and Veeva disclaims any obligation to update the forward-looking statements in the future. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially, including (i) adverse changes in general economic or market conditions, particularly in the life sciences industry; (ii) delays or reductions in information technology spending, particularly in the life sciences industry, including as a result of mergers in the life sciences industry; (iii) dependence on revenues from our Veeva CRM solution, and the rate of adoption of our new products; (iv) competitive factors, including but not limited to pricing pressures, industry consolidation, entry of new competitors and new applications and marketing initiatives by our competitors; (v) our ability to manage our growth effectively; (vi) our limited operating history, which makes it difficult to predict future results; (vii) the development of the market for enterprise cloud services, particularly in the life sciences industry; (viii) acceptance of our applications and services by customers, including renewals of existing subscriptions and purchases of subscriptions for additional users and solutions; (ix) breaches in our security measures, unauthorized access to our customers’ data, or system availability or performance problems associated with our data centers or computing infrastructure; (x) our expectation that the future growth rate of our revenues will decline, and that as our costs increase, we may not be able to generate sufficient revenues to sustain the level of profitability we have achieved in the past or achieve profitability in the future; (xi) loss of one or more key customers; and (xii) changes in sales that may not be immediately reflected in our results due to our subscription model.

Additional risks and uncertainties that could affect Veeva’s financial results are included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in the company’s filing on Form 10-Q for the period ended July 31, 2014, which is available on the company’s website at www.veeva.com under the Investors section and on the SEC’s website at www.sec.gov. Further information on potential risks that could affect actual results will be included in other filings Veeva makes with the SEC from time to time.

Industry Cloud Peter Gassner, Founder & CEO


A Leading Provider of Cloud Solutions to the Global Life Sciences Industry Founded in 2007

$210M FY14 Revenue

800+ Employees

HQ in Pleasanton, CA


Vision Become the Leading Cloud Solutions Provider to the Global Life Sciences Industry Values Customer Success Employee Success Speed

®2014 Veeva Systems – Company Confidential veeva.com | 7

PRODUCT EXCELLENCE


Investor Highlights

Industry Cloud Business Model

Large Market Opportunity

Broad, Growing Suite of Products

Blue Chip Customer Base

Unique Combination of High Growth and Strong Profitability

Fiscal Year Ending January 31

$61m

$130m

$210m

$7m

$30m

$47m

FY’12 FY’13 FY’14

Revenue Non-GAAP Operating Income

Revenue and Profitability

$92m

$20m

$37m

$142m

1H’14 1H’15


Enterprise Software Market

Mainframe

Client Server Applications

Cloud

Industry Cloud


Industry Cloud Model

Services Data Software


Industry-specific is the Largest Segment of the Software Market Total Worldwide Software Market Share, 2013

26%

8%

8%

7% 6% 5%

5%

5%

5%

4%

4%

4%

3%

10% Vertical Specific Software Operating Systems Database Management Systems Other Application Software ERP App Infrastructure / Middleware CRM Security IT Operations Office Suites Storage Management Business Intelligence Other Infrastructure Software Other

Source: Gartner, Market Share: All Software Markets Worldwide 2013, March 2014

$107B


Cloud Opportunity is Greater IDC Research Cloud Software Analysis for salesforce.com, September 2012

On Premise Cloud

Five Year TCO per User

48% Cloud Cost

Savings 59% IT Labor / Services

21% Infrastructure

20% Software

16% IT Labor / Services

36% Software as a Service

1.8x Premium


Industry Cloud Opportunity is Greater Veeva Systems Estimates

On Premise Cloud

Five Year TCO per User

48% Cloud Cost

Savings

10% Software

36% Software as a Service

3.6x Premium 10%

Customization



21% Infrastructure

®2014 Veeva Systems

“The real advantage of an industry-

specific solution is that it eliminates, or significantly reduces, the need to

customize. We can deploy and achieve business results faster. It is about

speed to value.” CIO, Top 30 Pharma


Sources: MarketLine Industry Profile Global Health Care Equipment & Supplies, June 2013, Reference Code: 0199-‐2067 was published July 2013 (Table 4). MarketLine Industry Profile Global PharmaceuScals, Biotechnology & Life Sciences, June 2013, Reference Code: 0199-‐2357 was published May 2012 (Table 5).

Life Sciences Industry is Large and Growing

Pharma

Biotech

Medical Products

Life Sciences Tools 6% CAGR


Focused on the Industry’s Highest Priorities

Regulatory Compliance

Research & Development Commercial


Unfair Advantage Major Veeva Product Releases

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 2007 2014

Major Product Releases


Select Veeva Customers 230 customers with users in over 80 countries

Enterprise Emerging Growth


Building a $1B+ Growth Company

Scale Products Customers


Proven Leadership Team

Frank Defesche General Manager, North America

Doug Etzel General Manager, Japan, China, Asia-Pacific and Latin America

Avril England General Manager, Veeva Vault

Brian Longo General Manager, Commercial Products

Peter Gassner Founder & CEO

Matt Wallach Co-founder & President

Tim Cabral Chief Financial Officer

Nitsa Zuppas Chief Marketing Officer

Josh Faddis Vice President, General Council

Doug Ostler Co-founder, VP, Products & Technology, Veeva CRM

Stan Wong Vice President, Products, Veeva Network

Eric Bezar VP, Product Management, Veeva Vault

Dan Soble VP, Engineering, Veeva Vault

Mitch Wallace Co-founder, VP, Products Operations

Dan Goldsmith General Manager, Europe

Jen Goldsmith Vice President, Vault R&D

Paul Shawah Vice President, Product Marketing

Market Opportunity Matt Wallach, Co-founder & President


Annual Life Sciences Spending

Sources: thepharmaletter, “Worldwide pharma industry marketing investment flat in 2013,” April 2014 Battelle/R&D Magazine, 2014 Global R&D Funding Forecast, December 2013

$116B Sales &

Marketing

$195B Research &

Development


Life Sciences Industry Dynamics

Margin Pressure Globalization

Multichannel & New

Stakeholders

Increasing Regulation

Legacy Technology


Increasing Technology Investments

0 10 20 30 40 50 60 70

Merger/acquisition activity

Industry/economic performance

Company financial performance

New projects

Keeping pace with industry

Updating/expanding installed base

Regulatory requirements

Support company growth

Replacing old technology

Reasons for Expected IT Budget Increases

Source: IDC Health Insights, 2014 Leading Indicators in Life Science IT Spending Survey, 3Q2014

% of respondents


Significant IT Spend and Large Market Opportunity

Sources: IDC, Worldwide IT Spending Guide – Life Science, March 2014; Veeva Systems estimates

$20B Infrastructure

$31B Software & Services

Annual Life Sciences IT Spending

$51B $5B+ Current Addressable Market

$2B Content Management (Vault)

$1B Customer Master Software & Data (Network)

$2B Sales Productivity & Compliance Tools (CRM)


Annual Sales & Marketing IT Spending IDC 2013 Life Science Sales and Marketing IT Benchmark Guide

$2.8B Sales & Marketing

IT Spending 2012

7% CAGR Does Not

Include Data

Source: IDC, Best Practices: 2013 Life Science Sales and Marketing IT Benchmark Guide, May 2013


Disaster Recovery QA

Sizing the Vault Opportunity

Production Environment

Application Server

Documentum ECM Oracle Database Server Monitoring

Server Virus Protection File Storage

Server Operating System

Content Accelerators Enterprise Search Annotation Server Rendition Server

Custom Application

Server Hardware Integration Maintenance Svcs. Software Maintenance Svcs. Hardware Maintenance Svcs.

Development


The Documentum License was Just the Beginning

Submissions Quality eTMF

Promotional Materials Medical


Vault Opportunity Dwarfs Client/Server

Documentum Stacks

Applications & Platform


Submissions

eTMF

Investigator Portal

QualityDocs

PromoMats

MedComms

Platform

Vault TAM Today in Life Sciences

$2B OPPORTUNITY


Veeva Spans an Entire Life Sciences Company

Regulatory Clinical Trials

Quality and Manufacturing Medical Marketing Sales

Research & Development Commercial


Strategic Partner to the Industry From Nowhere to 4th Most Preferred Life Sciences Software Vendor, IDC Health Insights

Source: IDC Health Insights' Leading Indicators in Life Science IT Spending Survey, 1Q14

Ranking 2014 2013 2012

1 Oracle Oracle Oracle

2 SAP SAP Apple

3 Symantec Symantec SAP

4 Veeva SAS SAS

5 SAS IBM Microsoft

6 IBM Microsoft Symantec

7 Microsoft Apple IBM

8 Apple Veeva


Expanding Solution Set

Veeva CRM

Veeva Vault

Veeva Network

2014 2013 2012 2011 2015

Veeva CLM

Veeva CRM

Approved Email Engage

Align

Events Mgmt.

Vault PromoMats

Vault MedComms

Vault eTMF

Vault QualityDocs

Vault Submissions

Network Customer

Master

Network Product Master


Double the Opportunity in CRM from Add-ons Alone

Each Add-on adds ~15-25% over base

0%

20%

40%

60%

80%

100%

Veeva CRM Base Current & Announced Add-ons

§  CLM

§  Approved Email

§  Engage

§  Align

§  Events Management


Pleasanton

Toronto Philadelphia Columbus

Sydney

Shanghai

Beijing

Osaka

Tokyo

Budapest London

Paris

Barcelona

Veeva Offices

Veeva Users

Sao Paulo

Expanding Global Reach


Implementation Services

Managed Services


Large and Growing Industry Partner Ecosystem

Software Content & Data

Implementation & Support


Competition

Point Solutions

Client / Server Legacy


Competitive Advantage

Deep Industry-Specific

Functionality

Strong Customer Success

Regulatory Compliance in

the Cloud

Industry Expertise Coupled with Cloud Talent


Multiple Drivers for Continued Success

Focus on Customer Success

Expand Our "Customer Base Deepen Existing

Customer "Relationships

Expand our Solutions

Extend Partner Ecosystem

Continue "to Grow"Internationally

Commercial Cloud Paul Shawah, Vice President, Product Marketing


Veeva for Commercial Life Sciences

Medical Marketing Sales

Commercial


Current State

Customer Data CLM

CRM Alignments MDM

Data Stewardship Events

Call Center

Email

Spend Reporting

Clinical Trials

Logistic Vendors

Expenses

Grants

Payments

Content Providers

Promotional Materials

Brands

MLR Approval

Digital Asset Library

MedInfo

Websites

Portals


Globalization Current State


Bringing Interactions, Data and Content Together in the Cloud

INTERACTIONS

DATA CONTENT


Veeva Commercial Cloud


Veeva Commercial Cloud

Email

Web/Mobile

Phone

CoBrowse

Events

Face-to-face

Alignments

Customer Master

DATA

CONTENT

Content Approval

Content Distribution

INTERACTIONS


Call Execution

Multichannel Follow-up

Multichannel Insights

Call Planning

Demo


SITUATION > APPROACH > IMPACT Top 20 Global Pharma Expands with Veeva

Improve global sales and marketing effectiveness through legacy technology replacement



CN

2012

US

2012

JP

2013

CN

2015

Global

2015

G

Global JP

MedComms PromoMats

2015

G

2014

2014 2014

CRM + CLM

CRM + CLM

CRM + CLM Approved Email

Early Adopter

Network

CRM + CLM

2014

Today

6,500 Users

AU

2015

Network

Global

2015+

Network

Global

PromoMats

2015+

Global Global



Global CRM standard, lower costs

Better support for all user types

Continuous innovation


SITUATION > APPROACH > IMPACT Growing Pharma Embraces Veeva Commercial Cloud

$1.5B pharma company based in US Need speed and flexibility to enable high growth



US

2011

US

2012

US

2015

US

US

PromoMats

2014

2014

Approved Email

Customer Master Data and Software

CRM 50 Users

CRM + CLM 250 Users

2014

US

CRM + CLM 600+ Users

US

MedComms

2015

2015

US

CRM Add-Ons



Successful new product launches

Easily onboard and integrate acquisitions

Flexibility and speed to support evolving commercial model

Veeva Vault Jen Goldsmith, Vice President, Veeva Vault


Content Management for Life Sciences §  Content management is serious business for life sciences

companies §  Every trial results in thousands of pages of documentation

§  Every product requires ongoing submissions

§  Every employee must read and understand SOPs

§  Every manufacturing plant needs specifications

§  Every marketing and medical piece needs approval

§  Content can be kept for decades or placed on legal hold

§  These systems must be validated against stringent regulations

§  When content is not managed well, processes are inefficient, products get delayed, and significant fines can result


Legacy Content Management Systems

On-premise ECM Platforms

Point Solutions on ECM

Platforms

Proprietary Point Solutions

Custom Build


Proliferated Across the Enterprise

REGULATORY TRIAL MASTER FILE

QUALITY/ MANUFACTURING MEDICAL

MARKETING/

SALES CUSTOMER

DEFINED

Paper

Custom

Services + Platform

Point

File Share

Custom

File Share

Services + Platform

Point File Share

Custom

Point

Services + Platform

File Share

Point File

Share Custom

Services + Platform

Point

Custom Point

Custom

Services + Platform

File Share

Paper

Paper

Paper


Simplified with Vault

REGULATORY TRIAL MASTER FILE

QUALITY/ MANUFACTURING MEDICAL MARKETING/

SALES CUSTOMER

DEFINED

PromoMats eTMF MedComms QualityDocs Platform Submissions


Single Global Solution

ACROSS REGIONS

ACROSS PARTNERS

ACROSS DEPARTMENTS


Collaboration & Participation

Built for Life Sciences

Provide Visibility

Single Point of Access

Demo


SITUATION > APPROACH > IMPACT Top 10 Global Pharma Increases Collaboration and Inspection Readiness with Vault

Address growing need for real-time Sponsor, CRO, Investigator Site collaboration and in-process inspection

readiness with Vault


SITUATION > APPROACH > RESULTS Top 10 Global Pharma Increases Collaboration and Inspection Readiness with Vault

Project Kick-Off

2014 2014 2014 2015 2015

First Studies LIVE

All Phase 0/1 Studies

CROs Using Vault

All Studies in Vault

2014 2015

Project Kick-Off

Expand Across Geos and Divisions

eTMF

QualityDocs


SITUATION > APPROACH > IMPACT Top 10 Global Pharma Increases Collaboration and Inspection Readiness with Vault

Real-time access to inspection ready

content

Immediate visibility to important trial

statistics

Reduced time to market


SITUATION > APPROACH > IMPACT Emerging Biotech Grows with Vault

Emerging biotech grows-up with Vault; from simple document management needs to applications for quality,

clinical and regulatory submission management


SITUATION > APPROACH > RESULTS Emerging Biotech Grows with Vault

2011 2011 2013 2014 2014

Project Kick Off

Vault Platform Go Live Vault eTMF

Vault QualityDocs

& MedComms

All Vault Applications

PromoMats eTMF MedComms

QualityDocs Platform

Submissions


SITUATION > APPROACH > IMPACT Emerging Biotech Grows with Vault

Immediate access to critical applications

Increased efficiency through partner

collaboration

Reduced complexity and costs


Key Product Takeaways §  Large market opportunity

§  Moving the industry to the cloud

§  Changing the game

§  Innovating through customer intimacy and success

Financial Update Tim Cabral, Chief Financial Officer


Investor Highlights

Strong revenue growth drivers

Early innings of multi-product line strategy

Leading profitability through differentiated industry cloud model

Significant cash flow and strong balance sheet


Q2 Snapshot Y-to-Y Growth

Total Revenue

$75.7m 53%

Total Subscription Revenue

$56.6 m 66%

Gross Margin (Non-GAAP)

64.4% 240 bp

Operating Margin (Non-GAAP)

27.5% 520 bp

Operating Income (Non-GAAP)

$20.8 m 88%

Cash Flow From Operations

$16.6 m

129%


Strong Revenue Growth

FY'11 FY'12 FY'13 FY'14 1H'14 1H'15

$210M

$130M

$61M

$29M

Subscription Services

$142M

$92M


Subscription Revenue Primer §  Subscription revenue policies

§  One year contracts

§  Add-on purchases co-terminus

§  Revenue recognized on a daily basis

§  Subscription revenue drivers quarter to quarter §  Linearity of bookings

§  Timing of deals across quarters

§  Accelerated deployments from future periods

§  Push out of orders into future periods


Subscription Revenue

Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15

$34M

$28M

$39M

$46M $49M

$57M

Y-to-Y Growth of 66% in Most Recent Quarter


Subscription Revenue Mix

Q2'13 Q2'14 Q2'15

CRM Vault & Network

$16M

90% ß % of total

Becoming a Multi-product Line Company

97%

99%

$34M

$57M


Industry Leading Revenue Retention

§  Focus on customer success has led to deeper relationships

§  Customers typically start small in a given product, then grow over time

§  Revenue retention has driven subscription revenue growth §  Most recent fiscal year was 166%

§  Minimal churn

§  Historically driven by additional CRM users

§  Will be driven more by newer products over time


Customers Expanding their use of Veeva

Customers with CRM, Vault & Network

192% 159% 187% 166%

2 4

7

13

Q3'14 Q4'14 Q1'15 Q2'15

16

32 36 44

Q3'14 Q4'14 Q1'15 Q2'15

5 11 14

24

Q3'14 Q4'14 Q1'15 Q2'15

Customers with Multiple Vault Products

Customers with Approved Email


Industry Cloud Operating Model

Deeper Customer

Engagement

Focused R&D

Spend

Higher Customer Lifetime

Value

Lower Customer

Acquisition Costs


Non-GAAP Operating Margin

Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15

20.0%

24.7% 25.0% 24.4%

21.1% 22.3%

21.7%

23.4% 24.3%

27.5% Investment in R&D Vault & Network

25% Mid-term Non-GAAP Operating Margin Target


Operating Margin Drivers §  Quarter-to-Quarter

Investments in new products

Revenue outperformance

Pace of hiring

§  Long-term Investments in new products

Revenue mix (subscription has higher gross margin)

Product mix (Vault, Network, CRM add-ons have higher gross margin)

Scale


Strong Free Cash Flow Performance

Cumulative Free Cash Flow

$0

$20

$40

$60

$80

Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15

Free Cash Flow

¹ Q2’15 excludes the one-time purchase of our new headquarters building for $24 million ² Free cash flow = operating cash flow less capex

¹

²


Growing Cash Position

Q4'13 IPO & Follow On

Acquisition New HQ Building

FCF & Other Q2'15

Provides Strategic Flexibility and Sustainability

$46

$252

$88

$350

$24 $12


Investor Highlights

Strong revenue growth drivers

Early innings of multi-product line strategy

Leading profitability through differentiated industry cloud model

Significant cash flow and strong balance sheet


Building a $1B+ Growth Company

Scale Products Customers

Questions

2014 investor meeting€¦ · performance problems associated with our data centers or computing...

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