2014 Investor Meeting. September 17, 2014

Transcription

1 2014 Investor Meeting September 17, 2014

2 Agenda Industry Cloud Market Opportunity Peter Gassner, CEO Matt Wallach, President Break Commercial Cloud Veeva Vault Financial Update Paul Shawah, VP, Product Marketing Jen Goldsmith, VP, Veeva Vault Tim Cabral, CFO Q&A 2014 Veeva Systems veeva.com 2

3 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 under the Investors section and on the SEC s website at 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 Veeva Systems veeva.com 3

4 Industry Cloud Peter Gassner, Founder & CEO

5 A Leading Provider of Cloud Solutions to the Global Life Sciences Industry Founded in 2007 $210M FY14 Revenue 800+ Employees HQ in Pleasanton, CA 2014 Veeva Systems veeva.com 5

6 Vision Become the Leading Cloud Solutions Provider to the Global Life Sciences Industry Values Customer Success Employee Success Speed 2014 Veeva Systems veeva.com 6

7 PRODUCT EXCELLENCE 2014 Veeva Systems Company Confidential veeva.com 7

8 Investor Highlights Revenue and Profitability $210m Industry Cloud Business Model Large Market Opportunity $130m $142m Broad, Growing Suite of Products $92m Blue Chip Customer Base Unique Combination of High Growth and Strong Profitability $61m $7m $30m $47m $20m $37m FY 12 FY 13 FY 14 1H 14 1H 15 Revenue Non-GAAP Operating Income Fiscal Year Ending January Veeva Systems veeva.com 8

9 Enterprise Software Market Industry Cloud Cloud Mainframe Client Server Applications 2014 Veeva Systems veeva.com 9

10 Industry Cloud Model Software Data Services 2014 Veeva Systems veeva.com 10

11 Industry-specific is the Largest Segment of the Software Market Total Worldwide Software Market Share, % 3% 4% 4% 4% 26% $107B 5% 5% 5% 8% 5% 6% 7% Source: Gartner, Market Share: All Software Markets Worldwide 2013, March % 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 2014 Veeva Systems veeva.com 11

12 Cloud Opportunity is Greater IDC Research Cloud Software Analysis for salesforce.com, September 2012 Five Year TCO per User 59% IT Labor / Services 48% Cloud Cost Savings 21% Infrastructure 20% Software On Premise 16% IT Labor / Services 36% Software as a Service Cloud 1.8x Premium 2014 Veeva Systems veeva.com 12

13 Industry Cloud Opportunity is Greater Veeva Systems Estimates Five Year TCO per User 59% IT Labor / Services 48% Cloud Cost Savings 21% Infrastructure 10% Customization 10% Software On Premise 16% IT Labor / Services 36% Software as a Service Cloud 3.6x Premium 2014 Veeva Systems veeva.com 13

14 The real advantage of an industryspecific 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 2014 Veeva Systems

15 Life Sciences Industry is Large and Growing Pharma Biotech Medical Products 6% CAGR Life Sciences Tools Sources: MarketLine Industry Profile Global Health Care Equipment & Supplies, June 2013, Reference Code: was published July 2013 (Table 4). MarketLine Industry Profile Global PharmaceuScals, Biotechnology & Life Sciences, June 2013, Reference Code: was published May 2012 (Table 5) Veeva Systems veeva.com 15

16 Focused on the Industry s Highest Priorities Research & Development Commercial Regulatory Compliance 2014 Veeva Systems veeva.com 16

17 2014 Veeva Systems veeva.com 17

18 Unfair Advantage Major Veeva Product Releases Major Product Releases 2014 Veeva Systems veeva.com 18

19 Select Veeva Customers 230 customers with users in over 80 countries Enterprise Emerging Growth 2014 Veeva Systems veeva.com 19

20 Building a $1B+ Growth Company Scale Products Customers 2014 Veeva Systems veeva.com 20

21 Proven Leadership Team Peter Gassner Matt Wallach Tim Cabral Nitsa Zuppas Founder & CEO Co-founder & President Chief Financial Officer Chief Marketing Officer Frank Defesche Doug Etzel Vice President, General Council Dan Goldsmith Avril England Brian Longo Doug Ostler General Manager, Europe General Manager, Veeva Vault General Manager, Commercial Products Co-founder, VP, Products & Technology, Veeva CRM Jen Goldsmith Stan Wong Eric Bezar Dan Soble Mitch Wallace Vice President, Vault R&D Vice President, Products, Veeva Network VP, Product Management, Veeva Vault VP, Engineering, Veeva Vault Co-founder, VP, Products Operations General Manager, North America General Manager, Japan, China, Asia-Pacific and Latin America Paul Shawah Vice President, Product Marketing 2014 Veeva Systems Josh Faddis veeva.com 21

22 Market Opportunity Matt Wallach, Co-founder & President

23 Annual Life Sciences Spending $195B Research & Development $116B Sales & Marketing Sources: thepharmaletter, Worldwide pharma industry marketing investment flat in 2013, April 2014 Battelle/R&D Magazine, 2014 Global R&D Funding Forecast, December Veeva Systems veeva.com 23

24 Life Sciences Industry Dynamics Margin Pressure Globalization Multichannel & New Stakeholders Increasing Regulation Legacy Technology 2014 Veeva Systems veeva.com 24

25 Increasing Technology Investments Reasons for Expected IT Budget Increases Replacing old technology Support company growth Regulatory requirements Updating/expanding installed base Keeping pace with industry New projects Company financial performance Industry/economic performance Merger/acquisition activity % of respondents Source: IDC Health Insights, 2014 Leading Indicators in Life Science IT Spending Survey, 3Q Veeva Systems veeva.com 25

26 Significant IT Spend and Large Market Opportunity $51B $5B+ Annual Life Sciences IT Spending Current Addressable Market $20B Infrastructure $31B Software & Services $2B $1B Sales Productivity & Compliance Tools (CRM) Customer Master Software & Data (Network) $2B Content Management (Vault) Sources: IDC, Worldwide IT Spending Guide Life Science, March 2014; Veeva Systems estimates 2014 Veeva Systems veeva.com 26

27 Annual Sales & Marketing IT Spending IDC 2013 Life Science Sales and Marketing IT Benchmark Guide $2.8B Sales & Marketing IT Spending % CAGR Does Not Include Data Source: IDC, Best Practices: 2013 Life Science Sales and Marketing IT Benchmark Guide, May Veeva Systems veeva.com 27

28 Sizing the Vault Opportunity Production Environment Content Accelerators Enterprise Search Annotation Server Rendition Server QA Development Disaster Recovery Application Server Custom Application Documentum ECM Oracle Database Server Monitoring Server Virus Protection File Storage Server Operating System Server Hardware Integration Maintenance Svcs. Software Maintenance Svcs. Hardware Maintenance Svcs Veeva Systems veeva.com 28

29 The Documentum License was Just the Beginning Submissions Quality etmf Promotional Materials Medical 2014 Veeva Systems veeva.com 29

30 Vault Opportunity Dwarfs Client/Server Documentum Stacks Applications & Platform 2014 Veeva Systems veeva.com 30

31 Vault TAM Today in Life Sciences Submissions etmf Investigator Portal QualityDocs $2B OPPORTUNITY PromoMats MedComms Platform 2014 Veeva Systems veeva.com 31

32 Veeva Spans an Entire Life Sciences Company Research & Development Commercial Regulatory Clinical Trials Quality and Manufacturing Medical Marketing Sales 2014 Veeva Systems veeva.com 32

33 Strategic Partner to the Industry From Nowhere to 4 th Most Preferred Life Sciences Software Vendor, IDC Health Insights Ranking 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 Source: IDC Health Insights' Leading Indicators in Life Science IT Spending Survey, 1Q Veeva Systems veeva.com 33

34 Expanding Solution Set Align Veeva CLM Approved Engage Events Mgmt. Veeva CRM Vault PromoMats Vault MedComms Vault Submissions Network Customer Master Network Product Master Vault QualityDocs Vault etmf Veeva CRM Veeva Vault Veeva Network 2014 Veeva Systems veeva.com 34

35 Double the Opportunity in CRM from Add-ons Alone 100% 80% Each Add-on adds ~15-25% over base 60% 40% 20% CLM Approved Engage Align Events Management 0% Veeva CRM Base Current & Announced Add-ons 2014 Veeva Systems veeva.com 35

36 Expanding Global Reach Pleasanton Toronto Columbus Philadelphia London Barcelona Paris Budapest Beijing Shanghai Osaka Tokyo Sao Paulo Veeva Offices Sydney Veeva Users 2014 Veeva Systems veeva.com 36

37 Implementation Services Managed Services 2014 Veeva Systems veeva.com 37

38 Large and Growing Industry Partner Ecosystem Software Content & Data Implementation & Support 2014 Veeva Systems veeva.com 38

39 Competition Client / Server Legacy Point Solutions 2014 Veeva Systems veeva.com 39

40 Competitive Advantage Deep Industry-Specific Functionality Industry Expertise Coupled with Cloud Talent Regulatory Compliance in the Cloud Strong Customer Success 2014 Veeva Systems veeva.com 40

41 Multiple Drivers for Continued Success Continue " to Grow" Internationally Extend Partner Ecosystem Expand our Solutions Focus on Customer Success Deepen Existing Customer " Relationships Expand Our " Customer Base 2014 Veeva Systems veeva.com 41

42 Commercial Cloud Paul Shawah, Vice President, Product Marketing

43 Veeva for Commercial Life Sciences Commercial Medical Marketing Sales 2014 Veeva Systems veeva.com 43

44 Current State Content Providers Promotional Materials Brands Portals Payments Logistic Vendors MLR Approval Websites Expenses Clinical Trials MedInfo Grants Spend Reporting Digital Asset Library Call Center Data Stewardship MDM Alignments CRM Events Customer Data CLM 2014 Veeva Systems veeva.com 44

45 Globalization Current State 2014 Veeva Systems veeva.com 45

46 Bringing Interactions, Data and Content Together in the Cloud INTERACTIONS DATA CONTENT 2014 Veeva Systems veeva.com 46

47 Veeva Commercial Cloud 2014 Veeva Systems veeva.com 47

48 Veeva Commercial Cloud DATA INTERACTIONS Customer Master Face-to-face CONTENT Content Approval Content Distribution Alignments Web/Mobile CoBrowse Events Phone 2014 Veeva Systems veeva.com 48

49 Demo Call Planning Call Execution Multichannel Follow-up Multichannel Insights 2014 Veeva Systems veeva.com 49

50 SITUATION > APPROACH > IMPACT Top 20 Global Pharma Expands with Veeva Improve global sales and marketing effectiveness through legacy technology replacement 2014 Veeva Systems veeva.com 50

51 SITUATION > APPROACH > IMPACT Top 20 Global Pharma Expands with Veeva US JP CN Today Global Global G Global G 6,500 CRM + CLM CRM + CLM CRM + CLM Users CRM + CLM Approved Early Adopter 2014 CN Network 2015 AU Network Global Network 2014 JP 2014 Global Global PromoMats MedComms PromoMats 2014 Veeva Systems veeva.com 51

52 SITUATION > APPROACH > IMPACT Top 20 Global Pharma Expands with Veeva Global CRM standard, lower costs Better support for all user types Continuous innovation 2014 Veeva Systems veeva.com 52

53 SITUATION > APPROACH > IMPACT Growing Pharma Embraces Veeva Commercial Cloud $1.5B pharma company based in US Need speed and flexibility to enable high growth 2014 Veeva Systems veeva.com 53

54 SITUATION > APPROACH > IMPACT Growing Pharma Embraces Veeva Commercial Cloud US US US US US CRM 50 Users CRM + CLM 250 Users CRM + CLM 600+ Users Approved CRM Add-Ons 2014 US Customer Master Data and Software 2014 US 2015 US PromoMats MedComms 2014 Veeva Systems veeva.com 54

55 SITUATION > APPROACH > IMPACT Growing Pharma Embraces Veeva Commercial Cloud Successful new product launches Easily onboard and integrate acquisitions Flexibility and speed to support evolving commercial model 2014 Veeva Systems veeva.com 55

56 Veeva Vault Jen Goldsmith, Vice President, Veeva Vault

57 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 2014 Veeva Systems veeva.com 57

58 Legacy Content Management Systems On-premise ECM Platforms Point Solutions on ECM Platforms Proprietary Point Solutions Custom Build 2014 Veeva Systems veeva.com 58

59 Proliferated Across the Enterprise TRIAL MASTER FILE REGULATORY QUALITY/ MANUFACTURING MEDICAL MARKETING/ SALES CUSTOMER DEFINED Paper Services + Platform Point Point File Share Paper Custom Custom Point Custom File Share Point File Share File Share Services + Platform Point Services + Platform File Share Custom Services + Platform Custom Paper Services + Platform Point Custom File Share Paper 2014 Veeva Systems veeva.com 59

60 Simplified with Vault TRIAL MASTER FILE REGULATORY QUALITY/ MANUFACTURING MEDICAL MARKETING/ SALES CUSTOMER DEFINED etmf Submissions QualityDocs MedComms PromoMats Platform 2014 Veeva Systems veeva.com 60

61 Single Global Solution ACROSS PARTNERS ACROSS DEPARTMENTS ACROSS REGIONS 2014 Veeva Systems veeva.com 61

62 Demo Single Point of Access Collaboration & Participation Built for Life Sciences Provide Visibility 2014 Veeva Systems veeva.com 62

63 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 2014 Veeva Systems veeva.com 63

64 SITUATION > APPROACH > RESULTS Top 10 Global Pharma Increases Collaboration and Inspection Readiness with Vault etmf Project Kick- Off First Studies LIVE All Phase 0/1 Studies CROs Using Vault All Studies in Vault QualityDocs Project Kick- Off Expand Across Geos and Divisions 2014 Veeva Systems veeva.com 64

65 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 2014 Veeva Systems veeva.com 65

66 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 2014 Veeva Systems veeva.com 66

67 SITUATION > APPROACH > RESULTS Emerging Biotech Grows with Vault QualityDocs Submissions Platform etmf MedComms PromoMats Project Kick Off Vault Platform Go Live Vault etmf Vault QualityDocs & MedComms All Vault Applications 2014 Veeva Systems veeva.com 67

68 SITUATION > APPROACH > IMPACT Emerging Biotech Grows with Vault Immediate access to critical applications Increased efficiency through partner collaboration Reduced complexity and costs 2014 Veeva Systems veeva.com 68

69 Key Product Takeaways Large market opportunity Moving the industry to the cloud Changing the game Innovating through customer intimacy and success 2014 Veeva Systems veeva.com 69

70 Financial Update Tim Cabral, Chief Financial Officer

71 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 2014 Veeva Systems veeva.com 71

72 Q2 Snapshot Y-to-Y Growth 53% $75.7m Total Revenue 66% $56.6 m Total Subscription Revenue 240 bp 64.4% Gross Margin (Non-GAAP) 520 bp 27.5% Operating Margin (Non-GAAP) 88% $20.8 m Operating Income (Non-GAAP) 129% $16.6 m Cash Flow From Operations 2014 Veeva Systems veeva.com 72

73 Strong Revenue Growth $210M $130M $142M $92M $61M $29M FY'11 FY'12 FY'13 FY'14 1H'14 1H'15 Subscription Services 2014 Veeva Systems veeva.com 73

74 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 2014 Veeva Systems veeva.com 74

75 Subscription Revenue Y-to-Y Growth of 66% in Most Recent Quarter $57M $46M $49M $39M $34M $28M Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2' Veeva Systems veeva.com 75

76 Subscription Revenue Mix Becoming a Multi-product Line Company $57M $34M 90% ß % of total $16M 97% 99% Q2'13 Q2'14 Q2'15 CRM Vault & Network 2014 Veeva Systems veeva.com 76

77 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 2014 Veeva Systems veeva.com 77

78 Customers Expanding their use of Veeva Customers with Approved Customers with Multiple Vault Products Customers with CRM, Vault & Network % 159% 187% 166% Q3'14 Q4'14 Q1'15 Q2'15 Q3'14 Q4'14 Q1'15 Q2'15 Q3'14 Q4'14 Q1'15 Q2' Veeva Systems veeva.com 78

79 Industry Cloud Operating Model Deeper Customer Engagement Focused R&D Spend Higher Customer Lifetime Value Lower Customer Acquisition Costs 2014 Veeva Systems veeva.com 79

80 Non-GAAP Operating Margin 25% Mid-term Non-GAAP Operating Margin Target Investment in R&D Vault & Network 27.5% 24.7% 25.0% 24.4% 21.1% 22.3% 21.7% 23.4% 24.3% 20.0% Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2' Veeva Systems veeva.com 80

81 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 2014 Veeva Systems veeva.com 81

82 Strong Free Cash Flow Performance $80 $60 $40 $20 $0 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 ¹ Cumulative Free Cash Flow Free Cash Flow ² 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 2014 Veeva Systems veeva.com 82

83 Growing Cash Position Provides Strategic Flexibility and Sustainability $12 $24 $88 $252 $350 $46 Q4'13 IPO & Follow On Acquisition New HQ Building FCF & Other Q2' Veeva Systems veeva.com 83

84 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 2014 Veeva Systems veeva.com 84

85 Building a $1B+ Growth Company Scale Products Customers 2014 Veeva Systems veeva.com 85

86 Questions