Thank you for standing by. My name is Eric, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Veeva Systems Fiscal 2025 First Quarter Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Gunnar Hansen, Senior Director, Investor Relations. Please go ahead. Good afternoon, and welcome to Veeva's fiscal 2025 first quarter earnings conference call for the quarter ended April 30, 2024. As a reminder, we posted prepared remarks on Veeva's investor relations website just after 1:00 P.M. Pacific today. We hope you have had a chance to read them before the call. Today's call will be used primarily for Q&A. With me today for Q&A are Peter Gassner, our Chief Executive Officer, Paul Shawah, EVP Commercial Strategy, and Tim Cabral, our Interim Chief Financial Officer. During this call, we may make forward-looking statements regarding trends, our strategies, and the anticipated performance of the business, including guidance regarding future financial results. These forward-looking statements will be based on our current views and expectations and are subject to various risks and uncertainties. Our actual results may differ materially. Please refer to the risks listed in our earnings release and risk factors included in our most recent filing on Form 10-K. Forward-looking statements made during the call are being made as of today, May 30, 2024, based on the facts available to us today. If this call is replayed or viewed after today, the information presented during the call may not contain current or accurate information. Veeva disclaims any obligation to update or revise any forward-looking statement. We may discuss our guidance on today's call, but we will not provide any further guidance or updates on our performance during the quarter unless we do so in a public forum. On the call, we may also discuss certain non-GAAP metrics that we believe aid in understanding of our financial results. A reconciliation to comparable GAAP metrics can be found in today's earnings release and in the supplemental investor presentation, both of which are available on our website. With that, thank you for joining us, and I'll turn the call over to Peter. Thank you, Gunnar, and welcome everyone to the call. It was a strong start to the year, with results above our guidance. Total revenue in the quarter was $650 million, with non-GAAP operating income of $261 million. As I shared in our prepared remarks, we've reduced our full-year revenue guidance by about $30 million, from $2.74 billion-$2.71 billion, as the macro environment remains challenging. Despite macro headwinds, we continue to execute well and deliver customer success. In R&D, we saw continued adoption in all areas of Development Cloud, including three Top 20 biopharma wins that spanned multiple products. In commercial, we're making great progress on our Commercial Cloud vision with Vault CRM and in Data Cloud, early momentum for Compass is strong. We have a clear and compelling product strategy and are building a very durable company with a long runway of growth. We'll now open up the call to your questions. At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. Your first question comes from the line of Joe Vruwink with Baird. Please go ahead. Great. Hi, everyone. Thanks for taking my questions. Maybe just to start, of the change you're making to the R&D subscription outlook, about $17 million, how much of that is deal timing versus some of the other factors mentioned in the stakeholder letter? And then when it comes to deal timing, curious, what are the indications from customers you're hearing that these are programs set to come through at year-end, so ultimately they're not lost, but they're more greater contributors in FY 2026 than 2025, perhaps? Yeah. Hey, Joe, Tim here. Thanks for the question. As it relates to the reduction in in subscription on the R&D side, a little over 50% is related to the deal timing and the enterprise business, and the remainder is related to the SMB that we discussed. Overall, if you include services there, Joe, it's more of a 60% to enterprise, roughly 60% to the enterprise business. And Peter, you want to take on the other question that Joe asked? Sure. In terms of these deals, these are normally core systems that we're selling, so these are systems that are gonna need to be upgraded, modernized, enhanced over time. So our competitive position is really good. We're not losing these deals, it's just getting deferred. Now, in terms of the exact timing, you know, that's our forecast, and that's based on a lot of individual customer discussions. So, you know, that's accurate to the best of our knowledge at this time. Okay. T hat's great. And then I wanted to ask about the commercial summit from a few weeks ago. There were quite a few good updates there, both new products from Veeva. Also, it sounds like good engagement with partners, just in terms of how you plan to approach the CRM migration framework with both tools and processes. What would you say are kind of the big takeaways to focus on from the summit, and then any feedback from customers or partners afterwards that you found notable? Yeah. Hey, Joe, this is Paul. Thanks for the question. Yeah, so summit was. It was a really great event, a great success. And I would say pretty, yeah, as we brought together over 2,000 people from across the industry in a wide variety of areas: sales, marketing, operations, IT. We had over. We had about 100 customers presenting across all those areas and, from 50 different companies. So pretty broad-based, covering everything from Crossix, Compass, and what we're doing in CRM, commercial content. So great event, a lot of momentum. I would say kind of couple big takeaways. One is in the Data Cloud area, specifically, in Compass. We had a lot of customers talking about what they're doing with patient data, how it's changing, and how they operate and changing our business in terms of finding more customers, finding more patients, the quality of the data. So Compass had some really specific and good testimonials from customers and partners about the value that it's adding. So Compass was certainly a highlight of the event. The other one I would say is in the CRM area. We talked about our vision for unifying sales, marketing, and medical. We're doing something foundationally different there. We're bringing all of those together in a single Vault. That hasn't been done before. That was the core of our strategy, but we announced a whole number of innovations in the CRM area. That got our customers really enthused and really excited. Everything from our AI strategy to CRM now being on Vault, rethinking the content supply chain. So a number of different innovations in different areas, which create a lot of excitement. I'd also say our new products, the momentum that we have there, Service Center and Campaign Manager, we demoed them. So just within a year or so after announcing them, we're now showing demos, and both of them are gonna be available this year. I guess maybe to wrap it up in the CRM space, we had our third top 20 on stage talking about their commitment to Vault CRM, why they moved, which was about getting to innovation faster, getting on that innovation train. So, really successful event, a lot of momentum, a lot of announcements in a number of different areas. But the feedback was overall extremely positive from our customers. Lots of good signals about our clear product strategy and commercial. So happy with how things went. That's great to hear. Thank you very much. Your next question comes from the line of Rishi Jaluria with RBC. Please go ahead. Oh, wonderful. Thanks so much for taking my question. Peter, I wanna start with you. In your prepared remarks, you had mentioned one of the impacts on FY 2025 guidance is some disruption in large enterprises as they work through their plans with AI. Can you be a little bit more specific? How is that manifesting itself? Is that on commercial? Is that on clinical? Is that on both? And what exactly does that mean? And maybe alongside that, as we think about your overall AI strategy, you know, at least what we picked up in a lot of our conversations is companies are increasingly wanting to work with their trusted vendors on their AI strategy. Given that you are such an important partner to the life sciences industry, how do you plan on using that position to help companies with their AI strategy? And then I've got a quick follow-up for Tim. Rishi, let's see. So the first part of it is the disruption, what we mean by that. So, you look at a year or so, a little more than a year ago, AI really burst upon the scene, Gen AI, and that causes. It became very accessible. You know, you saw it on 60 Minutes, you could log on and try it yourself. It could answer a question. So that caused a lot of pressure in our larger enterprises, on the IT departments. "Hey, what are we gonna do about Gen AI? What's our strategy as a large pharmaceutical company, biotech, about AI?" And that would land in the IT department of those, these companies. Now, for our smaller SMB customers, doesn't land so much. They have other things to think about, right? Other more pertinent, very stressful things. But in the large companies, with tens of thousands of people, they're looking for these operational efficiencies that they could potentially get through AI, and they have, you know, budgets to kind of get ahead of that game. So that, by the word disruption, I meant that threw a competing priority into our customers. We had some existing plans. Now, this AI, we have to plan for what we're gonna do on that. What, where are we gonna spend on, you know, innovation, on experimentation? Who's gonna do that? What budget would we use? That type of thing. So some of that would take an impact onto us, which is core systems. Now, those core systems, when we get that type of impact, it will delay a project, but it won't stop it, because these core systems are things you need. You can delay them, but all that does is create somewhat of a pent-up demand. I guess, Rishi, there was a good parallel list with COVID, the pandemic a few years ago. That created a whole different set of dynamics with vaccines and therapies and work from home priorities, all types of things that created a disruption, which then take the focus off of the core systems a bit, and then it came back again. So, that's the first part. That's the answer there. In terms of the AI strategy, our strategy is to really enable customers and their partners to develop AI applications, because they're gonna be very specific AI applications, GenAI applications for very specific use cases, whether it's, you know, field information, pre-call planning, next best action, what have you. They're gonna be very specific applications. That innovation has to come from everywhere, and one of the things it needs is clean data. All these AI applications need clean, concurrent, fast data. So one of the things we did, started about 2 years ago, actually, is put in a new API on the Vault platform called the Direct Data API, and that was just released this April, and that provides concurrent, consistent data about 100 times faster than normal APIs. So I think that's gonna be a great thing. Now, when we look to the long term, some of those applications will be developed by our customers, some by partners, and over time, probably some by Veeva as well. But we're concentrating on the foundation, the APIs for the data, the core system, because that's really what-- That's really only Veeva that can deliver that for our customers. So that's what we're focused on. Okay, great. That's really helpful. And then, Tim, you know, I understand- Rishi, Rishi. Go ahead. Maybe one more? Yeah. You talked about trust. I wrote that down. That's a key part of Veeva, too. We have that trust. We have to continue to earn that trust. So we don't really get into things that are too speculative. We definitely don't overpromise, but trust is the most valuable thing we have, so we'll be really targeted when we get into an AI application if we do. It'll be an area where, hey, that's a use case that we're pretty sure that can be solved by, by GenAI, and there's not a great partner to do it, okay, then we might step in, because we do have that trusted position. All right. Thanks, Peter. That's a really helpful color. And then, Tim, just as I think about the lower guidance, you know, I appreciate there's moving pieces. I understand macro is really rough out there. We've seen that throughout the softer earnings season. I guess, of course, now I wanna kind of delve into. It's not a big cut, it's mostly services, a little bit of FX, a little bit of incremental macro, but we've had a lot of guide downs over the past several quarters. What would give us confidence that this is the last cut and we're not gonna see further cuts from here? In other words, is the outlook conservative enough and with enough, you know, conservative assumptions in it that we won't see another guide down? Thank you. Yeah. Hey, thanks, Rishi, for the question. You know, I think our guidance philosophy. So, stepping back for a second, our guidance philosophy has not changed necessarily. You know, we're very thoughtful about it. We look to the information that we have to inform us in our guidance, and I think that's been consistent. As we look at the data, and as Peter talked about earlier in terms of our sales forecast, again, we're very thoughtful in terms of those insights that we have specifically into our customer base, because we work so closely with them on a number of things. Look, we can't promise you if other macro things continue to deteriorate materially, and that has a material impact or an impact to life sciences, that we won't have to do something here. But again, this is the best information we have that informs the guidance that we've given today, Rishi. All right. Very helpful. Thank you so much, both of you. Next question comes from the line of Dylan Becker with William Blair. Please go ahead. Hey, guys. Thanks for taking the questions here. Maybe, Peter, for you, wanted to pair some of the comments here you're talking about kind of disruptions in delayed decisioning from some of the larger enterprise customers versus what looked like some healthy top 20 clinical R&D momentum and adoption in the quarter. Maybe what are some of the kind of divergence areas you're seeing between those that are feeling the impacts of those disruptions versus some of those that are maybe able to leverage the opportunity and move a bit faster? Yeah, I would say what you're referring to there is in the top 20 in R&D, and, you know, it's really customer-specific situations. Because there's only 20 top 20, it's not a such a large number that you can make general patterns. I would say some companies are spending more on the AI experimentation and learning and proof of concepts, and some are spending less. So that's one thing. And then I think with many of these customers, it's just timing. You know, some have needs in this area or that area. So there's no particular pattern there. Okay, that's helpful. And then maybe Paul, switching over to you. You called out this kind of cross-functional collaboration between marketing, sales, and medical. Understand that it's likely a multi-year journey here, but how much of an emphasis is that first step in getting the data in order, showing up in the commercial strength you guys are seeing here? And maybe what that can mean as a potential value unlock for further innovation, and value creation opportunities over time for the commercial side. Thanks. Yeah, this is really a long- term. This is a journey, and it's a long-term vision. I think what we are doing, we're taking the opportunity because when out of the Vault platform, we're able to build these different functional areas that historically, a lot of them have been separate. They've operated in separate systems. They've operated in silos, sales and marketing as one example. and we're building them into the same Vault, so they can all operate on literally the same exact customer record at the same time. So things become more real time, more collaborative. Sales can be involved in a marketing campaign, as one example. Marketing can see exactly what sales is doing. So it's a, it's a new way of operating, and we are enabling that through our new, some of the new products that we've announced, like Service Center, which is for inside sales reps in the call center and hybrid reps, of course, but then also Campaign Manager, which is for the marketing team. And we're doing it in a very different way by building them all. They all live together. That's the way to think about it. So this will be a multi-year journey. It'll be something that will likely start with small and mid-sized customers who are able to take advantage of this. They'll likely move to Vault sooner, and we have new customers on Vault CRM. They'll be able to take advantage of that sooner, and then over time, it will be for larger customers. So this is a multi-year journey, but it's a foundational thing. When you get onto Vault CRM, you have access to all of this innovation and this ability to kind of change how you operate. So we're excited about the long-term potential here. Great. Thank you. Your next question comes from the line of Ken Wong with Oppenheimer & Co. Great. Thanks for taking my question. Please go ahead. Yes, this one may be Peter or Paul. I was surprised to see multiple new Vault CRM customers were already live. What was the feedback from customers in terms of that implementation go live timeline? And then how might these early wins and go lives, you know, impact future engagements with your existing CRM customers? Yeah, the-- so first, we make really great progress in the product to be able to sell Vault CRM to additional customers, and then as of April first, it's the sole go-forward solution. So every new customer after April one will be on Vault CRM. So it's a testament to how far the product has come in such a short period of time. So we're executing well from a product standpoint. But it's also a testament to the execution of the broader team, the services team in getting the product up and running, and the feedback from customers is that it works. It's meeting their needs. Now, these are smaller companies. Some of them, many of them, are pre-commercial companies. So their requirements are a little bit more in that early market, somewhat simpler kinds of requirements, but they're doing well, and they're using the system. It's creating a good foundation for us to expand. You have to start somewhere. We started, and we're expanding now to more and more customers, and that's the foundation for what we expect the vast majority of the industry to migrate to over a period of time. So it's a really good milestone, and we're happy with the adoption and the customer success so far with Vault CRM. Okay, perfect. And then quickly, Tim, on the billing side, the $35 million cut to billings and lots, lots of moving pieces there, is it fair to characterize the subscription portion of that being fairly consistent with the revenue cut, the $5 million subscription revenue cut? Hey, Ken. Yeah, it's in the ballpark. The two major pieces that impacted our billings guide down was the $25 million reduction in our services revenue, Ken, and then we called out, you know, roughly a $10 million headwind from an FX perspective, as the JPY and the euro have gotten a little weaker in the last 90 days. Okay, perfect. Thanks, Tim. Your next question comes from the line of Stan Berenshteyn with Wells Fargo Securities. Please go ahead. Hi, thanks for taking my questions. Maybe first for Peter or Paul, you called out in the prepared remarks, Crossix had a great quarter. Can you just maybe talk through the traction there and the market demand, customer trends? And also, if you can touch on the fact that historically, I think you've mentioned a goal to pivot this segment to a more recurring revenue model. Just any updates on that would be great as well. Thanks. Yeah, sure, Stan. So Crossix, I would think about it as two parts of the business. There's the marketing and optimization side, and there's the Crossix Audiences, and we perform well in both of those businesses. And, marketing and optimization, that's the one that, we specifically refer to as, trying to move that to more of a stable enterprise license agreement type stream, and, and we're early days in that. We, have, had our first customer move to that. It's working well for them. It allows them to be able to use Crossix really across all their brands foundationally to kind of measure and optimize their marketing. So that works well. We will continue to focus on that over time, but it's, we're not gonna do anything unnatural. It's a something that we wanna do in a customer-friendly way and make sure that it creates value for our customers. We have the best product there, and the market has become more healthy, so we're executing well on that side. And then in Crossix Audiences, we invested a whole lot more in that over the past couple of years, and that's paying off. We have a really great product, and for those of you that don't know what it's to get more precise in your media, so your media reaches the right patient population. We combine consumer and health data to get precise in how you reach targeted audiences. And we have the best product there, and the market has also become more healthy. So proud of the execution and the innovation that we've done on both sides of the Crossix business. Got it. Appreciate the color. And then maybe a quick follow-up for Tim. So your guidance is a bit more constructive on commercial cloud subscriptions. Obviously, lots of developments there in the quarter, but anything specific to call out in terms of the driver of upside to pull your expectations? Thanks. Yes, Dan, I would say it's consistent or somewhat related to the question you just asked, Paul. We are seeing broad-based upside with specific upside in our Crossix business that drove the upside in the most recent guidance we gave. Got it. Thank you. Your next question comes from the line of Stephanie Davis with Barclays. Please go ahead. Hey, guys. Thank you so much for taking my question. I was hoping to talk a little about the evolution of Compass, just given you did call out a bunch of helping new wins this quarter. So when I think about the two big areas of differentiation that you first called out, you talked about data speed and data restrictions. How did that play into the wins this quarter? And, you know, what kind of applications have you thought about building given the differentiations on the data? Hey, Stephanie, this is Peter. I'll take that. Compass is very innovative. I would say Compass is as innovative as Vault was when we introduced it in 2011. It was a new way of doing things, and people had to adjust to it, and not everybody got it at first because it was so, so new and so different. So we were with early adopters. The same thing with Compass. It's fundamentally, different than what IQVIA has done in the past. IQVIA and the others, right? They started out from the days of Lipitor, where the largest-selling drug was, you know, you, you get it at the retail pharmacy. Today, it's much different. Drugs come through specialty pharmacy. They're in-office administered, hospital-administered, as well as retail pharmacy, and the healthcare system is just so much more complex. So what's driving Compass? Specifically, we have Compass Patient, and then we just introduced Prescriber and National Prescriber in January. They're very early. So the revenue and the deals are coming from Compass Patient now. And what's driving it is it. A, it's one thing: it's easier to purchase. You purchase it by the brand, and you get unlimited access to 80 billion patient records for use with your brand, rather than just buying a slice of data, your own slice of your therapeutic area. So this allows you to explore, to see what you don't see, which is why you're looking at data, to see what you could see. So that's fundamentally different. The other one is it's more complete because we use a different data sourcing strategy that stresses the patient level and the more accurate patient matching, rather than, mostly, you know, historically, the collection from the retail, retail pharmacies. And then, it's the way we deliver it daily. So the patient data is updated daily, so you can run different, triggering campaigns, and you have the fresh data. So it's just a new way of doing things. It's equivalent to, you know. It, it's like client server and then move to the cloud. It's a new way of doing things, and that's what's appealing to people now. What do they do with it? I think the most common thing is what Paul said, is finding new patients and therefore finding new prescribers that are treating those patients that you didn't know about. The second one is finding patterns. People that are using, patients that are using our products, that's what else they're doing, or patients that aren't using our products, or patients that are using our competitor's products, oh, that's what they're doing. We provide that visibility, and in some cases, we're the only one that can provide that visibility because of our data sourcing strategy can often see what's called black products. So a lot of detail there, but I'll start, I'll end where I start. It's a truly innovative product, and that's what's attracting innovators. Hey, Peter, I guess just on that note, the more we go to digital pharma marketing, the more that real-timeness of the data becomes incredibly important to try to kind of be nimble on the strategy. Is that accelerating the growth at all, or is this something that you always saw the demand kind of separate from the digital pharma marketing trends? I would say in Compass, what's probably the biggest accelerator is just, understanding the patient. The timeliness is important for certain use cases, the daily data, but probably right now, the biggest one is like, oh, my goodness, I didn't know that's what patients were doing with our product, or I didn't know those prescribers were prescribing our product or weren't prescribing our product. So that it's these basic, basic things that I think the industry has grown up a little bit to think that they can't get that information, and now they can. So that's what's driving it. All right. Thank you for the insight. Thanks. Your next question comes from the line of Brian Peterson with Raymond James. Please go ahead. Hi, guys. Thanks for taking the question. So, Paul, it's great to see Vault CRM going live and the wins this quarter. You know, as you talk to customers and they're going through their migration decisions, I'm curious, h ow big of a deal do you think general availability is? Or do you think that full functionality later this year may be a bigger swing factor? I'm effectively looking to get more perspective on any key functional points that customers are looking for in Vault CRM. Yeah, the go-lives that we have and the full functionality are important to those customers, to customers that are considering migrating. But I would say what's more important to them is our direction and our innovation. What they're thinking about—they have enough comfort level. They've operated around Veeva long enough to know that when we say we're going to deliver on something from a product standpoint, we deliver. And these are great proof points, so it just extends that pattern. But the decision is really about, it's the innovation that we're delivering, it's the—some of the things that I talked about earlier, with this new way of kind of bringing together different teams, allowing them to collaborate better, solving the content supply chain challenge. Stephanie talked about digital marketing. To do digital marketing well, you need a lot of content. It needs to be personalized. We're in a very unique position to do that because CRM is now on Vault, just like PromoMats is on Vault, and we're gonna connect those together in a very unique way. So, it's about innovation, and it's about making it easy to get there. But of course, having live customers doesn't hurt. Yeah, and I'll- No, that's great. You know, I think the live customers really are the proof point, and today we have smaller customers live because they can purchase it and go live quickly. I think the larger customers, many of them would, they're eager to see if when some of those top 20s are live, you know, how are they liking it? What was the process like to get there? What would they have changed? What would they have done differently? So it's always like that. It's a reference selling. I think that'll be a big milestone when some of the large customers are live. Now, they have to go through the migration, which will start next year, so that's gonna take a little bit of time. Great. I appreciate the color. And Tim, I know you gave a lot of detail on some of the moving parts on the guidance, but as it relates to the pipeline that you mentioned, moving from kind of midyear to the end of the year, was there any commonality by product or customer segment that drove that? Or are people maybe looking at larger deals and saying, "Hey," they're gonna take smaller bites of the apple. Would just love to maybe get some qualitative color on what's going on behind the scenes there. Thanks, guys. Yeah. Hey, Brian. As we said earlier, that was mostly in the enterprise area, and I wouldn't say there's any commonality. These are, you know, Peter mentioned this as it related to one of the questions on, you know, the clinical wins that we had in the quarter. These are more deal-specific, company-specific factors, that drove some of this. Now, whether or not or how much of a percent of the AI disruption Peter had mentioned plays into that, you know, that may be a common factor across some of these deals, Brian, but nothing specific beyond that, I would say, was a common thread amongst the deals that we saw move, later in the year. Thank you. Your next question comes from the line of David Windley with Jefferies. Please go ahead. Hi, thanks for taking my questions. I wanted to ask you one on margin. You seem to be a little ahead, I think, of target, certainly ahead of the street, in the quarter, and mentioned some timing of hiring. I wondered if you could talk about whether the cost savings or to what extent the cost savings were sustainable, durable savings versus just timing of adding costs, like maybe hiring, that might need to come back later in the year and in the next fiscal year. Thanks. Yeah. So as it relates to margin, you're right. I think it was a very good performance in Q1, and as you saw in our full year guide, David, we left operating income at the same level, even though revenue is coming down. I do think over the last couple of quarters, you've heard us talk about very focused hiring. You know, one of the, I think, the hallmarks of Veeva is being an incredibly efficient company and being, you know, Peter and I would talk about sort of lean teams. And I do think that we are. We're seeing that play out a little bit in some of this focused hiring that you've seen over the last couple of quarters. And the result of that is less, to your question, sort of additional costs. Now, of course, we have a large market opportunity in front of us, and we'll continue to invest appropriately against that large market opportunity. But what you're seeing is a very efficient company deliver a margin result. Great, thanks for that. And just follow up, slightly different topic. You mentioned in the prepared remarks a couple of different areas where you're kind of breaking into what sounds like incremental, I'll call them, not brand new, but incremental client bases like the Vault CRM medical device client that you mentioned, and in Vault Basics moving down into smaller biotech. Are these incremental PAM opportunities, or would these be things that you would have basically already included and contemplated in previous discussions? Yeah, let me take those. So, let me address the MedTech one first. That was an interesting one. That's a MedTech company that is committed to Vault CRM. It will be one of our largest new deals as they scale to their full deployment. This is a company that operates like a pharma company. Their selling model is not unlike a pharma company. This is a conversion from custom Salesforce. The company is – they’ve been talking to us for a number of years. They’ve wanted to use Veeva CRM, but we weren’t able to sell it to them. So, this is one that now took advantage of the opportunity of us moving to Vault, and they get everything that we're able to offer in Vault CRM. So that's an exciting one. There are other companies like that, but that's a subset of the overall MedTech CRM market. And then you mentioned Vault Basics, and Vault Basics is about these very small companies and being able to get them started on something that we run and operate for them. There is no implementation. It's very efficient. It's efficient for them. We're giving them access to the very best software in a very efficient way. All of these are included in the overall market opportunity that we talk about. When we talk about our total TAM, it's not additive to that, it's growing into that. Excellent. Thank you. Yeah, I would, I would say on that Vault Basics, I'll just chime in there, this is Peter. That's a super interesting area. I'm very excited about that, for these companies under 200 employees to get Veeva Vault systems with no implementation costs, and to be able to run on our processes. So we're not asking them: How would you like to configure processes, et cetera? They're just moving right on to industry-standard Veeva processes. We couldn't address that end of the market very well before. Now we can, and then the companies can graduate to full Vault. It's as if, you know, you could start with QuickBooks, and then you could just flip a switch and graduate to SAP and start that SAP implementation. That would be crazy, right? That's what we're doing with Vault Basics. And surprisingly, yes, Paul's right, it's included in our overall $13 billion R&D TAM, but this segment of Vault Basics is actually about a $100 million segment, or maybe even a little more, that we couldn't address before. So, super excited about it. And just a little more color. You know, we have four values in the company. Stack ranked. It's do the right thing, that's about, you know, integrity, customer success, employee success, and the fourth one is speed. That's about getting things done quickly and correctly, the first time, if you can. Vault Basics, that idea was started in the second half of last year, less than 12 months ago, and to accomplish that already with these customers, that's tremendous. Then we have to remember that the decision, the announcement to go to Vault CRM from the Salesforce platform, was only announced 18 months ago, and the decision was just shortly before that. Now we have hundreds of the product team working on Vault CRM, hundreds of people. We have Veeva CRM successfully in stability mode, 3 enterprise, you know, top 20s committed, and multiple customers live. So that, I think, that gives me a lot of optimism. I always thought we could slow down our speed, you know, and we would, we would get bigger and our speed would slow down. Turns out, we're going pretty fast. So I'm glad you asked about Vault Basics, and it reminded me of Vault CRM. So there you go. You got more than you bargained for with that question. How about that? Thank you. Appreciate that. All right. The next question comes from the line of D.J. Hynes with Canaccord Genuity. Please go ahead. Hey, guys. Peter, Paul, I don't think we've had the chance to speak with you since the expanded Salesforce IQVIA partnership was announced to co-develop their Life Sciences Cloud. It's an impossible question to answer, given we don't really know what that product's gonna look like, but what's the industry chatter been surrounding that? How should we think of that as a potential longer-term threat? Any color would be helpful. Yeah. Hey, D.J., I can take that. So you're right. For those that haven't heard about it, you're right, it happened in the quarter, and I think IQVIA announced that Salesforce has licensed OCE, with the rights to use OCE with the intention of using it to build their future CRM product based on top of. So that's what the arrangement looks like. I was a little bit surprised, but honestly, given that Salesforce announced a future CRM, and they're gonna build it on a product that hasn't worked well in the marketplace. OCE has played out over the last six or seven years, and the product hasn't gained any traction. It hasn't worked well for big customers. So from that standpoint, from a product strategy standpoint, it seems like a little bit more like a hindrance than it may be an accelerator. The other thing is, I heard some customers talking about it, mentioning it at Summit. Summit's a good place for us to check the pulse of customers, obviously share everything that we're doing in our innovation. I guess the market chatter was also a little bit surprised. I would say it was lukewarm to slightly negative and mainly for the same reason, right? The industry is well aware of the history of IQVIA and OCE in the marketplace. So I would say, to answer your question, from an overall impact standpoint, I don't really see any impact from a, either from a product or a go-to-market, standpoint. It's not something that I see as material and potentially even more of a distraction for our competitors. Yeah. Okay. That makes sense. Peter, the one, the one specific one I heard was I didn't talk to every customer at Summit, but a couple, for sure, you know, quite a few. The ones that the small companies that you had heard of somebody had been on OCE, went with OCE, they're not happy about that because now that IQVIA is kind of getting out of that, and there's not a smooth way to get to the Salesforce thing. So that was. That's just one specific thing I heard as well. Yeah. Yeah. Okay, that's helpful. Thank you. And I was a little surprised you had eight wins, granted, these are mid-market customers, with Veeva CRM right before Vault CRM was set to go live. Was that just the functionality wasn't fully there on Vault CRM, which, you know, pushed them to choose Veeva CRM, or what—Help me understand what happened there. Yeah, it was based on, to some extent, based on their requirements. And, yeah, obviously, they know we're going to Vault CRM, and the move for those companies when the timing is right from Veeva CRM to Vault CRM is really a non-issue. It's not gonna be a big deal, right? So it's not that big of a deal for a company. Even starting two months ago on Veeva CRM, that transition will be quite easy. So n ot such a big deal, but that'll be the last one. So going forward, everything will be, as we mentioned, on Vault CRM. Yeah. Get them over the finish line into the family, and then we'll, we'll move them over when the time's right. That's right. Yeah, I think it's really driven by the customer choice, too. Remember, some of these companies, they're launching their products for the first time. Wow, is that a stressful time! They know Veeva CRM so much. They know it absolutely works. They know they can migrate later to Vault CRM. They know they have five years to do it. So for some of them, it's just a de-risking strategy. Yeah. Yeah. Okay. Thank you for the call. Your next question comes from the line of Jack Wallace with Guggenheim Securities. Please go ahead. Hi, team. Thanks for taking my questions. Just you wanted to talk about some of the big deals that you have out there. Obviously, you can't win all of the top 20, say, in the next quarter for the EDC or CDMS deals. But as we're starting to merge timelines here with that pipeline as well as the migration on this, you know, CRM platform to Vault, are there conversations happening at the highest levels within your largest customers, talking about you migrating to the Vault platform on both sides of the house in and around the same time, and you know, in effect to you have a common data architecture for a broader AI strategy? Thank you. Yeah, the real straightforward answer there is no, we actually don't see that, really. The decisions in the commercial area are kind of made by the commercial team, the decisions in the clinical area are made by the clinical team, the decisions in the safety area are made by the safety team, and Compass data, that's different. There are some companies that have a pretty Veeva-aligned strategy, so I think we get a incremental nudge there, you know, a little, a little extra, I wouldn't say push, but a little extra. Things just get a little easier if they have a broad Veeva strategy. But, you know, we have to win each area based on the functions and the merits and the timings in that area, and, you know, I really like that. In fact, we've set up everything about Veeva to be that way. We need to win the business in each area. That ensures we have an excellent product in each area. So I like it. It's been one of the keys of our success. We have to win the business in each area. Therefore, sometimes what you, especially when you're a multi-product company, you have a lot of different products, boy, the worst thing you could have is to make a sale into existing customer where your product isn't as good. That's a tremendous net negative for Veeva, so we don't want that. So that's how we operate things. Got it. Thank you, Peter. And then, yeah, Tim, this one's for you. Just thinking about some of the, you know, the changes in billing terms we saw, this quarter, and it appears like, you know, move to more quarterly had been in anticipation last year. It didn't maybe happen as much as we would have thought. Just the check sizes are getting larger. You know, should we expect that, you know, billing terms over time will become more quarterly versus annual, particularly with your largest customers cutting the largest checks? Yeah, Jack, it's a good question. I don't think we've seen a pattern that aligns to size of deal with the payment term frequency. So, I wouldn't necessarily say that that is the pattern we're going towards or the path that we're on. I think these deal frequency, excuse me, payment frequency decisions are very much customer by customer and somewhat area by area. Got it. Thank you. Your next question comes from the line of Craig Hettenbach with Morgan Stanley. Please go ahead. Thank you. So services has been weak for over six months now, and you're not the only company seeing an impact. Where do you think customers are with kind of rationalization of projects, and what are some things you're looking at in terms of stabilization and ultimately a recovery in that business? This is Peter. I'll take that one. Services, we're really in that for customer success, right? That's where we can do those services and do them profitably. So we're not really looking to optimize revenue there, per se. In terms of the customers, and when things reach a steady state, you know, there's gonna be ebbs and flows. As more things go to Veeva or more things go to partners or as we get more efficient, for example, the customers moving onto Vault Basics there, that's super interesting. Now, some of those customers, granted, we wouldn't have got before because we didn't have a product that fit. But some of those customers we might have got on the regular Veeva, and that would have been significant services revenue. And all of that services revenue is no longer. We're trading that up for subscription revenue. For this year, the services revenue impact by the timing of these deals. So if we have a large deal that was maybe it was gonna start in Q2, but now it's gonna start in Q4, that obviously pushes the revenue out. I see no macro-level change in our services capability and appetite for customers. It's just in the timing. One of the nice things about these core systems of record is, you know, when there's delays, it really just the demand gets pent up till later because they're not optional things. Got it. That's helpful. And then on the EDC side, for some of the ramping deals you have, just, just wanted to look for an update on how those are progressing and how you're thinking about contribution kind of through this year and, and going forward. I'll take that one, Tim, and then maybe first, and maybe you talk about contribution. The projects that we sold, the big EDC deals are going well. Some of them, a couple of them I'm thinking about, they have their first studies live. Now, when they do their first studies live, they pick less complicated studies. These are a way to learn and test out their processes. Both of them have significant milestones coming in the next, you know, between the next 12 and 18 months, where all their new studies will be live on Veeva. There's tight integration, tight interop, communication with our product team and our services team, so I think that's going well. That's helping to improve our product and our services offerings. I'm really very happy with our execution in EDC. In terms of how the ramping and how that flows into, you know, our financial results, our revenue. Tim, you wanna take that one? Sure. Yeah, I think, Peter, as we've said before, on the EDC side, these are typically longer in terms of duration of the original arrangements, and the first couple of years of those arrangements are relatively small. So, while there will be some contribution, I don't expect us to see material contribution there, and that's included in the guidance that we've given today. Got it. Thank you. Your next question comes from the line of Matthew Shea with Needham. Please go ahead. Hey, thanks for taking the question. This is Matthew Shea on for Needham. Maybe over to Ryan, maybe circling back to the Data Cloud, wanted to ask about Link. Seems like nice progress there with over 100 customers now and early adopters on your newer products. Where are you attracting these wins from? Are these greenfield opportunities, or are you winning them away from incumbents? And if incumbents, there's a lot of options out there, so just curious what you've seen has been your biggest point of competitive differentiation. Hmm. That's a good question. I think it is a mix of greenfield and incumbents, which is different than something like a CRM system or an eTMF system. There, people have those systems, and we're replacing incumbents. Here, sometimes we're replacing incumbents that are just, you know, not as--a nd when we do that, it's because their data quality is, you know, far superior, and the software on top of it is far superior. The price is a bit higher maybe than what they're used to before on Link, but the product is far superior. We invested heavily in that product and that data. And then sometimes, especially for smaller companies, and sometimes even for larger companies, they had no organized system. They would ask a consultant to do some market research and make some reports and things like that. They know h ad no system of reference to go to. So those are the dynamics we see. Got you. That's helpful. And then maybe just quickly on Vault Basics, got a couple customers that went live in May. Just wondering what early feedback has been like. And then, I guess, given the opportunity to land more of these small biotech to grow alongside them, how heavily do you plan to lean in on this versus sort of wait for more macro recovery? Feedback, it's probably a little early to get anything comprehensive feedback. We've gotten good feedback through the cycle. I guess that's, you know, the fact that the customers are buying, even though when the product was quite early, they really buy into the concept. So far, it's been smooth in the first weeks, so but too early to get a lot of concrete feedback. And then in terms of the go forward, yeah, we think there's certainly a pipeline there for Vault Basics, and we're happy about that. I think if interest rates come down some, you know, our funding environments get better, we there can be more small biotech starting up again, and that'll be more for us. But it's really our focus now is with these customers to fine-tune the process, make the products really, really great, make the process really, really great. And then we have some expansion with Vault Basics, too. Some more applications we will put in there, such as our CTMS product, clinical trial management syste m, and our QMS product. And we'll look, and we'll look for other things to do over time. Vault Basics for Veeva is definitely not a flash in the pan. This is a fundamental thing where we can help the industry grow in the small, emerging biotech area be very profitable for Veeva and provide a super smooth on-ramp and onto the full Vault when you need to. You know, over time, yes, this is going to apply to CRM. This is going to apply to our commercial products over time. It was a fundamental, just to let you know, I mean, it was a fundamental decision discussed deeply at the board level last year. We view it as really, really important. Interestingly enough, some of our best innovative ideas are actually coming from the Vault Basics because it's helping us standardize. The standardization is gonna help us in all types of areas, and it helps the industry in all types of areas. Makes sense. Thanks, Peter. Your next question comes from the line of Charles Rhyee with TD Cowen. Please go ahead. Yeah, thanks. Thanks for taking the question. Hey, Peter, you know, in your prepared comments, you kind of noted that the challenging environment is causing, particularly among your top 50 biopharma, along with Q4 rather than Q2 and Q3. Can you talk about sort of the visibility you have for, you know, sort of that kind of comment here? Is that from just direct indications and conversations with clients that they plan to add solutions, but maybe not till later this year? Yeah, I probably the easiest way, this is what your question was about as related to the deal delay that I referenced in the prepared remarks, and specifically into the R&D and specifically into the large companies, the enterprise top 50-type companies. Yeah, those are, those are based on our—actually, on our sales forecast, right? On our—These are active opportunities we're managing and maybe have been tracking for a long time, could be six months, a year, two years. You know, we're tracking these things, so it's, it's based on o ur field teams and our product teams interaction with these customers and based on their best judgment. So it's not a t hat's not done by formula, right? That's done by individual discussions. Okay. Got it. Understood. And then maybe, Tim, you know, if we look at billings growth for the balance of the year, it looks like, you know, basically estimating around 9%-10% growth. Should we think of that as sort of the benchmark as we think about growth beyond fiscal 2025? Is that sort of like a good jumping-off point, or? Because obviously, billings growth has been more in the mid-teens over the past, the past year or so. How should we think about this as, maybe a new starting point? Yeah, Charles, two things to consider there. Number one, I don't want to imply or give any guidance outside of fiscal 2025 on the call today. But as you think about the billings guidance that we gave today, one thing to consider is our services revenue growth year-over-year, which, as you know, pretty much every dollar of service revenue shows up in the same year from a billings perspective. That is sitting right now at a low single percentage growth. So those would be the two things that I would give more color on as it relates to our billings guidance. So the assumption being that as the services part of the market rebounds, because that is in the current year, you know, that so 9-10 is basically kind of artificially impacted this year, is the way to think of it? Again, not implying any rebound or any future guidance here, Charles, but, this services revenue growth rate, relative to historical services revenue, is very, very low. And it's back to some of the commentary that Peter put in the prepared remarks, specifically in terms of some of the deal timing, that moved to later in the year, which just gives services, less days of revenue on those new projects to implement those critical systems. Got it. And Peter, if I could ask one more real quick: you talked about sort of the funding environment, but, you know, 1Q funding for biotech was actually quite strong. Any reason why we haven't yet seen some of that maybe flow through for you guys? Or is that kind of two different things, maybe some of that money is going more into clinical development versus technology investments? Yeah, I have seen the data about the funding picking up a little bit. Y ou know, as far as I can see, I wouldn't characterize that as quite strong yet. And still the cost of that funding is still relatively high. But there's always a delay, right? When there's funding and when funding gets announced, and then when you put those funds to use, there's always a bit of delay. So we, if indeed the funding environment is actually getting better, we could see some positive benefits to that, but we haven't seen that yet. Great. Thank you for the comments. The next question comes from the line of Gabriela Borges with Goldman Sachs. Please go ahead. Good afternoon. Thank you. I'll stay on the topic of the last question, which is, Peter, you've been in this industry for some time, and we've been in this sluggish environment in spending for a couple of years now. What do you think has to change, or what are your customers telling you they're looking for in order to get to a better state of spending and to see maybe a resumption in some of these mission-critical projects kind of come back to steady state? Thank you. Yeah, I mean, to be fair, we are still growing and customers are still doing things, so, you know, I can think of a lot of customers and the important projects that they're doing, so I don't want to imply at all that things are stagnant. As far as the macro environment or what could make the industry do better, I think it's probably, you know, the things we talked about. If interest rates take a favorable turn, if some of these global conflicts get resolved in a positive way, I think, you know, if we, the industry navigates the IRA successfully a little bit more, you know, a little bit more political and legislative stability, those are the things that help the industry. So those are, it's not that complicated, really. They want stability, predictability, and low. And it's a capital-intensive industry, especially at the smaller end, which feeds a lot of the innovation. So it is an industry that's a little sensitive to interest rates. Yeah, that makes sense. Thank you. The follow-up I have is on CDMS, and more specifically, how you're thinking about developing functionality across the different phases of the clinical trial, so p hase I, phase II, et cetera. Share with us how that functionality is progressing and how you feel about the completeness of the solution across the different phases of trials. Thank you. Yeah, in terms of the clinical data management area, we have multiple products in there. We have, for example, our EDC product that collect the patient data. We have randomization and trial supply management, and we have called ePRO to collect the data directly from patients. All of those will work across all phases and do work across all phases today, so we have that complete functionality that works for all the different phases. But those products are in different levels of maturity, so it's really about the complexity of the trial, which generally you get in phase IIs and phase IIIs and some phase IV's, pretty complex. And we can handle all those trials, but with EDC, that's where we have the most proven track record, and so it... I would say it's the most mature product in the clinical data management area. The RTSM is the, then I would say, the next most proven, and the ePRO is the, is the younger product, and it, and it just takes time to mature and for customers to, you know, to, to have the reference selling model start to work. So, we're beyond the--I guess, to answer directly, we're beyond that stage where we could only work for certain phases of trial. We can work for all phases of trial for all of our products at this time. I appreciate the call. Thank you. Thanks. Your next question comes from the line of Jailendra Singh with Truist Securities. Please go ahead. Thank you, and thanks for taking my questions. I missed first few minutes of the call, so apologies if you already covered this. First, I want to ask about the pricing environment. There have been some discussions that pharma companies have been tighter than usual on pricing negotiations, given the macro environment. Have you guys seen any of that as contracts come up for renewal, even pursuing new business? As you look across your portfolio, are there certain areas where you see less or more competitive pricing environment? I'll take that one. No, no change in the, in the pricing dynamics, and no, there's, no particular area where we, where we see less or more. So it's, business as usual there. We have to, make a great product, prove the value, but no particular change. Okay. And then my quick follow-up: Any update on the permanent CFO search process? Any update on timeline or skill set experience focus would be helpful. The search continues, and it's going well. I feel it's a orderly process. We're certainly talking to good candidates. I'm not gonna disclose specific progress, but I would say we're active in it, and we are making progress. And we'll give you an update when we can. Great. Thank you. Thank you. That concludes the question and answer session. I will now turn the call back over to Peter Gassner, CEO, for closing remarks. Please go ahead. Thank you, everyone, for joining the call today, and thank you to our customers for your continued partnership and to the Veeva team for your outstanding work in the quarter. Thank you. Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.