01—Abstract
Summary
Summary of the 10-K filed March 30, 2021. Cited figures are marked; the original filing is the authoritative source.
Veeva Systems Inc. reported fiscal year ended January 31, 2021 total revenues of $1.47 billiona, up 33% from $1.10 billion, with subscription services revenues of $1.18 billion (up 32%) and professional services and other revenues of $286 million (up 37%).
Net income rose to $380 millionb from $301 million, and diluted EPS was $2.36 versus $1.90. Operating income was $378 million, while non-GAAP operating income was $583 million per the filing's reconciliation. Gross margin was 72% versus 73% in the prior year, which the company attributes largely to the lower-margin Crossix and Physicians World businesses.
The company states it expects revenue growth rates to decline over time, and its subscription services revenue retention rate was 124% for fiscal 2021. The filing notes that Veeva became a Delaware public benefit corporation on February 1, 2021, with a stated public benefit purpose. Cash, cash equivalents and short-term investments totaled $1.66 billionc at year-end, and operating cash flow was $551 million.
Customer count rose to 993 from 861. Dual-class voting control remains concentrated, with Class B holders controlling about 52.2%d of voting power and CEO Peter Gassner holding about 45.7%. Veeva is also engaged in ongoing litigation with IQVIA and Medidata, with trade secret and antitrust claims pending and no estimate of potential outcomes disclosed.
02—Key points
Key Highlights
- Total revenues grew 33% to $1.47 billion, with subscription services at $1.18 billion (81% of total revenues).
- Net income was $380 million ($2.36 diluted EPS) versus $301 million ($1.90) in the prior fiscal year; effective tax rate was 3.6%.
- Operating cash flow was $551 million, and cash, cash equivalents and short-term investments totaled $1.66 billion at January 31, 2021.
- Subscription services revenue retention rate was 124%, and customer count grew to 993 from 861.
- Gross margin declined to 72% from 73%, which the filing attributes largely to the lower-margin Crossix and Physicians World businesses.
- The company became a Delaware public benefit corporation effective February 1, 2021, and says it expects revenue growth rates to decline over time.
- Dual-class structure gives Class B holders about 52.2% of voting power, with CEO Peter Gassner holding about 45.7%, until October 15, 2023.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Veeva Systems kept $0.26.
- Revenue$1.47B100.0%
- Cost of revenue−$408.9M27.9%
- Gross profit$1.06B72.1%
- Operating costs−$678.3M46.3%
- Operating income$377.8M25.8%
- Interest, other & tax$2.2M0.2%
- Net income$380.0M25.9%
Where FY2021 revenue went
$1.47B- Cost of revenue: $408.9M, 28% of revenue
- Other operating costs: $384.1M, 26% of revenue
- Operating income: $377.8M, 26% of revenue
- R&D: $294.2M, 20% of revenue
Kept 26% as operating income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed March 30, 2021Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $1.47B$1.10B | +32.7% |
| Cost of Revenue | $408.93M$303.37M | +34.8% |
| Gross Profit | $1.06B$800.71M | +31.9% |
| R&D Expenses | $294.22M$209.90M | +40.2% |
| Operating Expenses | $678.35M$514.49M | +31.8% |
| Operating Income | $377.79M$286.22M | +32.0% |
| Net Income | $380.00M$301.12M | +26.2% |
| EPS (Basic) | $2.52$2.04 | +23.5% |
| EPS (Diluted) | $2.36$1.90 | +24.2% |
| Shares Outstanding (Basic) | 150.67M147.80M | +1.9% |
| Shares Outstanding (Diluted) | 160.73M158.30M | +1.5% |
05—Questions
Frequently Asked Questions
How fast did Veeva's revenue grow in fiscal 2021?
Total revenues rose 33% to $1,465 million from $1,104 million. Subscription services revenues grew 32% to $1,179 million, and professional services and other revenues grew 37% to $286 million.
What drove the change in gross margin?
Gross margin fell to 72% from 73%. The filing says this is largely due to the products and services of the acquired Crossix and Physicians World businesses, which have lower gross margins than many of Veeva's other offerings.
What are the main litigation risks disclosed?
Veeva is litigating with IQVIA over data-access and antitrust claims, with IQVIA seeking unspecified damages and Veeva seeking more than $200 million on its counterclaims. Medidata has a trade secret suit with a trial date set for September 20, 2021. The company says it cannot estimate potential losses from these matters.
Who controls voting power at Veeva?
Class B common stock carries ten votes per share. As of January 31, 2021, holders of Class B stock held about 52.2% of voting power, and founder and CEO Peter Gassner held about 45.7%. This concentrated control lasts until October 15, 2023.
Does Veeva pay dividends?
No. The company has never declared or paid cash dividends and states it intends to retain future earnings to fund the development and expansion of its business.
06—Continue