Hi, everyone. Thanks for joining us. Day three. I had a smoother, silkier voice two days ago, but we'll get through it. I'm Joe Vruwink. I cover vertical software at Baird. Our next presentation comes from Veeva, one of the largest cloud software providers to the life sciences space, supporting customers with their drug development and commercial execution. Joining us today is Paul Shawah. He's Executive Vice President of Commercial Strategy. This is going to be a fireside chat format. If there are questions in the audience, you can email session1@rwbaird.com, and I'll get those on the iPad. But maybe to begin, Paul, we'll just start with an intro to Veeva and an overview of the investment case. Yeah, sure. Thanks for having me. Good to be here. Thanks, everyone, for coming. So Veeva, I'll give you a little bit of an overview. We're building the industry cloud for life sciences. That's our vision. What we mean by that is software, data, and business consulting built very specifically for the life sciences industry. Our approach is to try to make the industry more efficient. We're a multi-product company. We operate in the R&D and the commercial side of the business. And we have multiple products in both areas. How's that? Is that better? I heard myself, but I guess you couldn't hear me. So there we go. All right. I was talking about building the industry cloud for life sciences. So software, data, and services focused on the life sciences industry, five major product categories in R&D, five major product categories in commercial. Our TAM is a $20 billion TAM, so a significant TAM focused in an industry that we believe we have a structural advantage, and we have a Vault platform. And all of our applications are built on that platform. So the more products a company invests in, the more valuable it becomes to that customer. So we're creating a platform focused on an industry and setting ourselves up for long-term durable growth focused on a single industry. TAM of $20 billion. When Veeva IPO'd, it was $2 billion. Even recently, you used to talk about $13 billion. And then last year, it kind of jumped up to $20 billion. Is this customers telling you, hey, Veeva, we'd like you to do more stuff? Or do you just look at an account and say, there's so much more we can be doing? Yeah, so we are thinking about ourselves, and we're aspiring to be one of the most strategic partners to the life sciences industry, which means we want to develop a number of different applications, software, and data products to make the industry more efficient. So we do think about our TAM a little bit differently. We think about it as the products that we have available today, which makes up a large part of that TAM, but not all of it. But then, of course, products that we can grow into, products that we may announce in the future. So this includes future growth opportunities for us. It's a $2 trillion end market that we serve, the overall life sciences market, biopharma and med tech. We think we can capture about 1% of that, making the industry even more productive. We obviously want to deliver more value than we generate, than we create in terms of our revenue. We look at the overall market opportunity as about 1% of overall spend. If I use some of your disclosures, so in the 10-K, you talk about roughly 30% of your revenue is generated with your top 10 customers. So if you just take that amount, divide by 10, the average is almost $70 million per those top 10 accounts. And then if you back into what everyone else must be spending, it's like $1 million. Can you maybe bridge the two? And are the $1 millions all candidates to become $10, $20, $60 million? Yeah, so I guess the way I'd think about it is we talk about it internally as there's the top 20 pharma companies. There's a heavy concentration in the high end of the market. And then there's a very long tail of companies that are commercial, but even pre-commercial companies. They don't have a drug in the market yet, and well over 1,000 companies that we may have. So there's a small concentration in that top 20 and then that long tail that have the potential to buy all of the software products and all the data products that we sell. But they may not get to the same scale as a top 20 pharmaceutical company. In terms of overall penetration, what that opportunity looks like, certainly for a large company, they have the ability to scale across all of our products and well over your math sounds accurate, but to get to well over the spend that they already have with Veeva as they adopt. On average, our customers have roughly four commercial products, three R&D products. We have over 30 products as a company. Just to put into perspective kind of where we are with our customers and what that total opportunity looks like. So even at the size that you're talking about, there's still potential for growth in the top 20 and certainly for the long tail of companies, but unlikely that they get to the scale that you talked about. Maybe bringing this all together, so Veeva has provided an outlook for this year that entails billings growing 10%. Now, within billings is a services number that isn't really growing this year. So the software business is growing faster than 10%. But I think the most popular question is, well, how does Veeva grow over time? Is 10% the number you had set? Or are there different considerations that come into play? Yeah, so we think about the long-term opportunity. So we talked about our overall market opportunity. We've increased the size of that over time. We've increased our penetration in that over time. So long-term opportunity is there for durable growth over many years. The other thing I would point to is another building block, the structural advantage that I talked about. Our products are built on a common platform across all of these different areas. That gives us an advantage in competing in different markets. So the greater the penetration we have, the greater the advantage we have. So we are creating a wider competitive position the more time that goes on. So large market opportunity, really strong competitive positioning, which tends to improve and get even stronger over time. And then an innovation engine where we create new products that we continue to grow into this overall TAM. The market opportunity is there. We tend to think more about that long term. The path to get there may change a little bit over time. Quarter by quarter, that will fluctuate. We're happy with the potential. AI, let's talk about that. I think to this point, because Veeva has introduced AI products in the commercial side of the business, that's been the takeaway, that Veeva is participating and it's a commercial opportunity. I guess I'll ask you a slightly different spin. One of the areas when Jensen gets on stage and talks about where he sees the demand growing, it's always health care, life sciences. And specifically, he's talking about revolutionizing drug discovery. What I think is interesting about that is we're going to take all these viable molecules more than we know what to do with and look to load it into a clinical process that hasn't gotten a lot better in decades. And that's where Veeva comes into play. So is it right to think of Veeva as an AI winner in R&D? Not because you have a whole new set of products that suddenly spring to market, but just the way the industry needs to change to handle if discovery is going to be revolutionized. Yeah, so I think it's an insightful question. First of all, we all know the lifeblood of the life sciences company is their drug development pipeline, the discovery of new molecules, but also bringing those molecules to market efficiently and doing that through an efficient clinical trials process. We know how much the industry spends on the clinical trials process. It's a significant amount of money. It's billions of dollars to get a new drug a successful candidate to the market. So making that process more efficient is a very significant opportunity for the industry. And it's top of mind for most CEOs and most executives at the life sciences company. The clinical landscape has been highly fragmented. There's been a lot of different vendors. Companies have been stuck stitching pieces together. The technology that's used by the end patient in the clinical trial is often provided by a different vendor that the CRO uses or the sponsor uses internally. So we see that as an opportunity to make the trials less expensive, to make the trials run and operate faster. This is core to our clinical strategy. We're developing multiple applications for clinical for the sponsors to run and operate their trial, to do the data capture, but also for the clinical research organizations. These are the services partners that often execute the clinical trials on behalf of the company, for them to execute, for the clinical research sites to do their work, and then ultimately for patients. So we're taking a very unique and long-term focused approach and providing software for every stakeholder in the clinical trial process. That's how we think about it. This is not about developing the software application for one very specific niche use case. It's about thinking about that broader ecosystem very, very differently. This can be transformational. Now, tying it back to your question around AI, to do AI well, whether it's GenAI or more traditional data science machine learning, you need clean data. You need clean, accurate, timely, consistent, and normalized data. And to the extent that we can clean up that clinical landscape, I think that does create an opportunity to get the data faster, higher speed, with greater accuracy, with more consistency. So yeah, I do think over the long term and this is true of most AI applications. You need clean and accurate data for the AI to be successful. Otherwise, it's bad AI. And we see that as an opportunity for us. So that's the future. Maybe going back to the update from last week, kind of here in the moment, you are seeing a bit of pause or contemplation also in R&D around how the biggest customers, kind of the enterprise customers, are thinking about spending this year. Maybe go a little bit into that. And as you hear other enterprise software kind of talk about their own take on what AI is meaning to current IT spending, do you think Veeva is talking about the same things? Or is it very specific to just the exposure you happen to have? Yeah, so you may have heard our earnings from last quarter. Last week, we talked about our performance. We outperformed in commercial. We did very well there. We did have some macro pressures. We call that AI disruption impacting a bit of R&D, mainly services, but R&D also. Part of that was AI disruption. This idea that, and I would say not, there's no direct line relationship between a customer saying, hey, we're going to do some AI project. We're not going to do your project, but just more of the broader disruption and distraction and mind share that it's kind of played out over the last couple of quarters. So that was a factor for us. It impacted some of the deal timings. And I think back to kind of maybe tying this back to the earlier question that you asked, these are the core mission critical systems that they need to have in place. One, to modernize so that they can execute. These are core systems of record. But two, to put in place the foundation for doing AI in the right way. So it may impact the timing in the short term, but I think ultimately this is the foundation for kind of doing this, doing AI and transforming in the right way. OK. We'll jump back to commercial now. So Veeva Commercial, kind of two pieces. I think about you have a CRM piece, which is about half of the segment. And then you have the not CRM piece, which is half of the segment. Just on CRM, and I think a lot of us are familiar with what's happening there and Veeva taking control of its destiny and moving everyone to Vault CRM. A year ago, you were here, and the strategy was kind of just getting communicated. And at the commercial summit, you showed Vault CRM. And so we talked about that feedback. I mean, since then, you've launched a Service Cloud-esque product. There's a marketing suite now. And so a year ago, you talked about, I think we're going to accelerate pace of innovation. It seems like that is happening. And do customers get that? What was the feedback coming out of the summit a few weeks ago? Do people kind of understand why Veeva made this series of decisions? Yeah, so we've come a long way in a year. You can get a lot accomplished in a single year. Just to give you kind of to catch everybody up on what's happened over the year, we've had, so I'll start from a go-to-market standpoint. We've had three top 20 pharmas commit to Vault CRM. Vault CRM is now the go-forward product. So every new customer that we sign will start on Vault CRM. That's a big milestone for us. It's a good milestone that's an indicator of the success, the momentum we have with the product. Product works. It's live with customers. So that's fantastic. And then we're making progress on migrations. And I'm sure we'll have additional announcements for customers committing to Vault over time. We've also, to your point, have announced additional innovations and additional products, both in the core CRM footprint, but also new products. So this unlocks an opportunity for us to create new products and monetize new areas. You mentioned two of those, Service Center and what we're calling Campaign Manager. That's for our marketing product. The reaction, so on the surface, you can look at those and say, hey, now Veeva has this call center capability. Now Veeva will have or will have this marketing campaign manager capability. Sounds interesting. Ok, good, new product to sell. It's way different than that. I want to emphasize that this is what we've announced is not just a new service thing and a new marketing thing. This is foundationally different than anything that's happened in the industry. We are building service and marketing and sales into a single Vault database. The same exact customer record that you market to is the same record the sales rep talks to, the same customer that sales rep talks to. They don't exist in different places. The legacy way of doing this is you had different systems with different customer databases. You had to put more stuff underneath infrastructure, integrations, complexity to try to tie those two things together. We're not doing that. We're starting from a clean, simple architecture, a clean, simple environment, which will allow customers to finally become customer-centric. The industry talks about things like omnichannel and customer centricity. We can help enable those capabilities by centralizing these all in a single Vault. So I want to emphasize, yes, new products, new opportunity. We're super excited about that. What our customers were most excited about was we're going to clean up the potential to clean up their environments over the long term. These larger pharma companies, they have systems in place already. It's not something they'll adopt over the short term. But over the long term, it creates the option to dramatically clean up their environment. So we're super excited about the innovation. Is there some way you can frame what it means in terms of maybe financial consequence? Because you're going to absorb the whole ecosystem. That's the vision where today, to your earlier point, I mean, Veeva CRM and PromoMats are dominant, huge market share. But then in between that, you're going to have a lot of other vendors, someone for marketing, someone for service. If all of that comes to Veeva, what's the relative ceiling versus what you're addressing today? I guess it's kind of a TAM question in that sense. Yeah, so it's kind of how does this new innovation, how does it expand the opportunity? Yeah. Yeah, so I would say back to the TAM question in the very beginning, we are growing into our TAM. So we did increase our TAM from $13 billion-$20 billion. And these are good examples of new products that are expanding into that total market opportunity. And then in terms of sizing it, we're working through kind of that licensing model. I would think of these as the Service Center could be the size of maybe the equivalent of like a CRM add-on. So you buy the core CRM. That's the core license. And then this is an add-on on top of that. And Campaign Manager will be certainly larger than that. OK, great. When you talk about announcing more migrations over time, do you think there's a certain number that Veeva could announce where the referenceability becomes so strong that you feel super confident about the Vault CRM strategy? I know this is a bit nebulous, but you have three already. They're a great three, of course. If that's six by year end, if it's nine before Salesforce, even as a product and market, does the industry step back and say, well, if those nine move so quickly, that's got to say something. Yeah, so you're right. We have three committed so far. We do expect to move the vast majority of our customers. We've said that. We expect to move the vast majority of our customers over. Certainly, having reference customers like the three that we have announced is helpful, making progress down that path. Absolutely. Creates a lot of momentum. But it's helpful to step back and to think about why are they moving? Why are they committing to Vault? And I guess I'd kind of bucket it in three big categories. One, it's the innovation. And we talked about some of that innovation with sales and marketing and service all in the same Vault. It's foundationally different. There's a whole lot of other areas. You mentioned PromoMats. We're tying PromoMats and content into the channels. Because when you use a channel, you need messaging and content, promotional materials. We're bringing those two things together. We're innovating in a very new way there that's highly unique to our strategy. So number one is kind of innovation roadmap. That's what customers are excited about. Number two is our ability to make it as easy as possible to get to Vault CRM, particularly compared to any other alternative. I think this will be dramatically easier. Why? Because they have a footprint already in place. And we're just moving it. We're not starting from a blank sheet of paper, maybe even from a product that they can't see or touch or feel. They don't know what that looks like today. And then I guess the third thing is this idea of becoming a strategic partner. We're spending a lot of energy. We have a 15-year track record exclusively focused on life sciences. We're trying to be that strategic partner to the industry. So yes, the reference customers help. Yes, it has some ability to drive more momentum. But the bigger decision is around those three things. It's innovation. It's the core execution. And it's the strategic partner. I do expect we'll announce, of course, additional customers. We expect that when the vast majority, we'll have additional customers that we announce over time. But we're not managing to that. We're managing to doing that in a very customer-friendly way. We don't want to force a customer to make a decision on an artificial time frame that suits us. That's not our strategy. That's not customer-friendly. We're doing the opposite. We're trying to be customer-friendly and give them the benefits and the reasons to make the move. Last question on this. So IQVIA OCE, which is the main CRM competitor at this point, they have a few top 20 customers of their own, right? Do they just listen to this webcast and say, well, that's what Veeva is planning to do, so we'll just do that? So what I talked about, the three things that I talked about, are not easy to replicate. So the innovation roadmap, everything we've put in place, the core thing that I talked about is foundational. Sales and marketing and service and the sales, you don't just replicate that. It's not something you go back and retrofit. In fact, they're trying to retrofit. But this is architected from the ground up. And I can go on for that full innovation roadmap and explain the reasons why those are not easy things to replicate. The content supply chain, we own the PromoMats and the CRM, and we're plumbing those two things up together. And because they're on a Vault, they're both on the Vault platform. That's what's unique. You can't replicate that. Second, we talked about the migrations. We have an advantage in that our customers have three, five, seven, or 10 years already on the Veeva CRM. And we're moving that to Vault CRM, which is very different than starting from scratch. Also very hard to replicate. And then the strategic partner, the same thing. It's something that we have a very long track record of how we've operated and treated the industry. We're a public benefit corporation, PBC, which means we're obligated to more than just the financial stakeholders. The industries that we serve, our customers, employees. So it's a very and we act like that. It's not something we say. We act and operate that way. So yes, it's easy for companies to make claims. But it's also hard for companies to deliver on those claims. So I feel good about it's two totally different things. We're competing at two totally different levels. Just to get to a question from the audience, going back to something you said earlier about your average product adoption being 3-4 typically. If that's the average, can you separate out what a top 20 would be buying from Veeva at this point versus, I don't know, what's the median number, I suppose, or what's commonly adopted across the base? Yeah, the way to think about our products is that they are modular. There are many different entry points into Veeva. So a customer may start historically, they would have started on the commercial side because that's where we started. And we were more advanced there. That's not the case anymore. In fact, many or most of our new customers, they'd start on R&D because that's where they become a drug development company before they become a commercial company. So there's no single entry point. There are certain products that we have higher adoption of. The single variable that most correlates with adoption of our products is time in market. The longer the product is in the market, in general, the more market share that we have in those markets, presuming it's not artificially blocked by some third party or some outside force. That's the highest correlation. So some of those products are some of the ones that we talked about, Veeva CRM and CRM on the commercial side, our commercial content business, also our first Vault application. On the R&D side, it's areas like our trial master file and clinical trials management and quality documentation. So those tend to be where companies have started. And then in the enterprise, they have expanded from there. Some have expanded app by app. Others have said, we're taking an all-in approach. In the SMB space, we see more of that kind of all-in. They don't have any systems. So the cleanest environment is they don't have any systems. And they say, hey, we're just going to standardize on Veeva. And as we need those applications, we'll buy into it. So many different paths. It's modular on purpose. We don't force customers to have to buy our pieces to work together. They work together. They can add modules as they expand. We want to do this in a customer-friendly way. One thing that came up recently from last week's update that I think kind of flew under the radar just because the focus was on R&D, as we discussed, but Veeva raised its outlook for commercial solutions. I think it's the biggest raise so soon in a year in many years. That follows last year where I think the segment got three guidance upgrades over time. What's interesting is a lot of people, when they think of Veeva commercial, they'll say, well, that's the original business. So that's saturated. That's going to be the source of slow growth. But actually, that's where the estimate revisions have been coming from. Maybe we can talk about outside of CRM, what you're doing to support marketing, to support new data streams that's been driving the better growth. So you're right. And I would say so outside of CRM, I think of three or four areas: our commercial content business. That's relatively mature. But it did have strength in the quarter. We saw nice expansions there in commercial content. That is about helping marketing be more efficient. It's also about becoming more digital. So that business performed well. Crossix also performed well, particularly relative to a year ago where we saw some weakness in that business. But we've also been innovating in those products, our core measurement and our Crossix audiences product, getting really precise about how companies target patients and health care professionals. So that product did well. And then we have our data products, Data Cloud, primarily Link and Compass. Link has had nice momentum with that first product. And now we have early adopters in some additional Link products. Compass is following that same pattern. Compass is, really, it plays in an essential market for life sciences companies. They all need things like patient data and prescriber data. It's how they find patients. It's how they target doctors. It's how they pay their sales reps. So it's very critical. Our first product there, Compass Patient, was exciting because we just had our summit. There were plenty of testimonials from customers talking about how they're doing all of those things more effectively. They're finding more patients. They're targeting more effectively. They're finding doctors. They're looking at patterns of patient journeys and figuring out how best to insert themselves in the journey to treat and find patients. The reference selling model is starting to play out. We had our first top 50 biopharma doing an enterprise license agreement for Compass Patient in the last quarter. We see nice momentum there. It's a hard market. We're doing things foundationally different. We're transforming. We're not just creating a me-too data set. But even with that, it will take time. It'll play out over time. But to your point, we have some nice growth engines in the commercial side of the business as we do in R&D. That's great. We're out of time.