VEEVA SYSTEMS INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Dollars in thousands)
(Unaudited)
The following tables reconcile the specific items excluded from GAAP metrics in the calculation of non-GAAP metrics for the periods shown below:
Reconciliation of Net Cash Provided by Operating Activities (GAAP basis to non-GAAP basis)
Three months ended
October 31,
Nine months ended
October 31,
2022
2021
2022
2021
Net cash provided by operating activities
$ 142,660
$ 112,959
$ 717,073
$ 710,409
Excess tax benefits from employee stock plans
(888)
(10,404)
(5,981)
(45,464)
Impact of tax legislation
—
—
37,946
—
Net cash provided by operating activities on a non-GAAP basis
$ 141,772
$ 102,555
$ 749,038
$ 664,945
Net cash used in investing activities
$ (405,729)
$ (10,229)
$ (968,421)
$ (290,992)
Net cash (used in) provided by financing activities
$ (10,543)
$ (16,046)
$ (17,135)
$ 6,416
Reconciliation of Financial Measures (GAAP basis to non-GAAP basis)
Three months ended
October 31,
Nine months ended
October 31,
2022
2021
2022
2021
Cost of subscription services revenues on a GAAP basis
$ 65,734
$ 59,648
$ 188,722
$ 164,774
Stock-based compensation expense
(1,636)
(1,292)
(4,606)
(3,514)
Amortization of purchased intangibles
(1,126)
(1,005)
(3,342)
(2,826)
Cost of subscription services revenues on a non-GAAP basis
$ 62,972
$ 57,351
$ 180,774
$ 158,434
Gross margin on subscription services revenues on a GAAP basis
85.1 %
84.3 %
85.2 %
84.9 %
Stock-based compensation expense
0.4
0.3
0.3
0.3
Amortization of purchased intangibles
0.2
0.3
0.3
0.3
Gross margin on subscription services revenues on a non-GAAP basis
85.7 %
84.9 %
85.8 %
85.5 %
Cost of professional services and other revenues on a GAAP basis
$ 88,173
$ 69,916
$ 256,369
$ 203,023
Stock-based compensation expense
(13,227)
(9,616)
(37,035)
(26,579)
Amortization of purchased intangibles
(139)
(139)
(411)
(411)
Cost of professional services and other revenues on a non-GAAP basis
$ 74,807
$ 60,161
$ 218,923
$ 176,033
Gross margin on professional services and other revenues on a GAAP basis
20.4 %
26.7 %
19.6 %
26.7 %
Stock-based compensation expense
11.9
10.1
11.6
9.6
Amortization of purchased intangibles
0.2
0.1
0.1
0.1
Gross margin on professional services and other revenues on a non-GAAP basis
32.5 %
36.9 %
31.3 %
36.4 %
Gross profit on a GAAP basis
$ 398,444
$ 346,547
$ 1,146,580
$ 997,481
Stock-based compensation expense
14,863
10,908
41,641
30,093
Amortization of purchased intangibles
1,265
1,144
3,754
3,237
Gross profit on a non-GAAP basis
$ 414,572
$ 358,599
$ 1,191,975
$ 1,030,811
Gross margin on total revenues on a GAAP basis
72.1 %
72.8 %
72.0 %
73.1 %
Stock-based compensation expense
2.7
2.3
2.6
2.2
Amortization of purchased intangibles
0.3
0.2
0.3
0.2
Gross margin on total revenues on a non-GAAP basis
75.1 %
75.3 %
74.9 %
75.5 %
Research and development expense on a GAAP basis
$ 130,257
$ 98,635
$ 377,740
$ 276,760
Stock-based compensation expense
(37,415)
(22,311)
(102,139)
(61,463)
Amortization of purchased intangibles
(29)
(29)
(85)
(85)
Research and development expense on a non-GAAP basis
$ 92,813
$ 76,295
$ 275,516
$ 215,212
VEEVA SYSTEMS INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (continued)
(Dollars in thousands, except per share data)
(Unaudited)
Three months ended
October 31,
Nine months ended
October 31,
2022
2021
2022
2021
Sales and marketing expense on a GAAP basis
$ 93,910
$ 72,423
$ 259,642
$ 208,822
Stock-based compensation expense
(23,576)
(15,102)
(64,500)
(41,772)
Amortization of purchased intangibles
(3,555)
(3,464)
(10,550)
(10,210)
Sales and marketing expense on a non-GAAP basis
$ 66,779
$ 53,857
$ 184,592
$ 156,840
General and administrative expense on a GAAP basis
$ 52,873
$ 42,781
$ 159,030
$ 126,121
Stock-based compensation expense
(17,333)
(13,724)
(48,083)
(39,591)
Amortization of purchased intangibles
(57)
(57)
(169)
(169)
General and administrative expense on a non-GAAP basis
$ 35,483
$ 29,000
$ 110,778
$ 86,361
Operating expense on a GAAP basis
$ 277,040
$ 213,839
$ 796,412
$ 611,703
Stock-based compensation expense
(78,324)
(51,137)
(214,722)
(142,826)
Amortization of purchased intangibles
(3,641)
(3,550)
(10,804)
(10,464)
Operating expense on a non-GAAP basis
$ 195,075
$ 159,152
$ 570,886
$ 458,413
Operating income on a GAAP basis
$ 121,404
$ 132,708
$ 350,168
$ 385,778
Stock-based compensation expense
93,187
62,045
256,363
172,919
Amortization of purchased intangibles
4,906
4,694
14,558
13,701
Operating income on a non-GAAP basis
$ 219,497
$ 199,447
$ 621,089
$ 572,398
Operating margin on a GAAP basis
22.0 %
27.9 %
22.0 %
28.3 %
Stock-based compensation expense
16.9
13.0
16.1
12.7
Amortization of purchased intangibles
0.8
1.0
0.9
1.0
Operating margin on a non-GAAP basis
39.7 %
41.9 %
39.0 %
42.0 %
Net income on a GAAP basis
$ 108,457
$ 105,869
$ 299,173
$ 330,294
Stock-based compensation expense
93,187
62,045
256,363
172,919
Amortization of purchased intangibles
4,906
4,694
14,558
13,701
Income tax effect on non-GAAP adjustments(6)
(23,306)
(14,394)
(60,817)
(59,147)
Net income on a non-GAAP basis
$ 183,244
$ 158,214
$ 509,277
$ 457,767
Diluted net income per share on a GAAP basis
$ 0.67
$ 0.65
$ 1.84
$ 2.03
Stock-based compensation expense
0.57
0.38
1.58
1.06
Amortization of purchased intangibles
0.03
0.03
0.09
0.08
Income tax effect on non-GAAP adjustments(6)
(0.14)
(0.09)
(0.37)
(0.36)
Diluted net income per share on a non-GAAP basis
$ 1.13
$ 0.97
$ 3.14
$ 2.81
