Item 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

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Item 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

VEEVA SYSTEMS INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


Report of Independent Registered Public Accounting Firm (KPMG LLP, San Francisco, CA, Auditor Firm ID: 185)			49
Consolidated Balance Sheets			51
Consolidated Statements of Comprehensive Income			52
Consolidated Statements of Stockholders' Equity			53
Consolidated Statements of Cash Flows			54
Notes to Consolidated Financial Statements			55


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Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Veeva Systems Inc.:

Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting

We have audited the accompanying consolidated balance sheets of Veeva Systems Inc. and subsidiaries (the Company) as of January 31, 2025 and 2024, the related consolidated statements of comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended January 31, 2025, and the related notes (collectively, the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of January 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of January 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended January 31, 2025, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of January 31, 2025 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.


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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Evaluation of the sufficiency of audit evidence over revenue

As discussed in Note 1 to the consolidated financial statements, the Company recorded $2,747 million of total revenues for the year ended January 31, 2025, of which $2,285 million was subscription services related, and $462 million was professional services related. Each of these categories of revenue has multiple service offerings, and the Company’s process for revenue recognition differs between them.

We identified the evaluation of the sufficiency of the audit evidence over revenue as a critical audit matter. Evaluating the nature and extent of audit evidence obtained over revenue for each service offering required subjective auditor judgement because of the multiple service offerings and the number of information technology (IT) applications involved in the revenue recognition processes.

The following are the primary procedures we performed to address the critical audit matter. We applied auditor judgement to determine the nature and extent of procedures to be performed over revenue, including the determination of the revenue for service offerings. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s revenue recognition process. We assessed the recorded revenue by selecting transactions and comparing the amounts recognized for consistency with underlying documentation, including contracts with customers. We involved IT professionals with specialized skills and knowledge, who assisted in the testing certain IT applications that are used by the Company in its revenue recognition process. In addition, we evaluated the sufficiency of audit evidence obtained over revenue by assessing the results of procedures performed, including the nature and extent of such evidence.

/s/ KPMG LLP

We have served as the Company’s auditor since 2010.

San Francisco, CA

March 24, 2025


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VEEVA SYSTEMS INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except number of shares and par value)


	January 31, 2025		January 31, 2024

Assets
Current assets:
Cash and cash equivalents	$	1,118,785	$	703,487
Short-term investments	4,031,442		3,324,269
Accounts receivable, net of allowance for credit losses of $57 and $520, respectively	1,016,356		852,172
Unbilled accounts receivable	40,761		36,365
Prepaid expenses and other current assets	101,458		86,918
Total current assets	6,308,802		5,003,211
Property and equipment, net	55,912		58,532
Deferred costs, net	26,383		23,916
Lease right-of-use assets	63,863		45,602
Goodwill	439,877		439,877
Intangible assets, net	44,460		63,017
Deferred income taxes	343,919		233,463
Other long-term assets	56,540		43,302
Total assets	$	7,339,756	$	5,910,920
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	30,447	$	31,513
Accrued compensation and benefits	39,429		43,433
Accrued expenses and other current liabilities	35,557		32,980
Income tax payable	9,024		11,862
Deferred revenue	1,273,978		1,049,761
Lease liabilities	9,969		9,334
Total current liabilities	1,398,404		1,178,883
Deferred income taxes	587		2,052
Long-term lease liabilities	65,806		46,441
Other long-term liabilities	42,586		38,720
Total liabilities	1,507,383		1,266,096
Commitments and contingencies (note 1 4)
Stockholders’ equity:
Common stock, $0.00001 par value; 800,000,000 shares authorized at January 31, 2025 and January 31, 2024. 162,583,789 and 161,260,172 issued and outstanding at January 31, 2025 and January 31, 2024, respectively	2		2

Additional paid-in capital	2,386,192		1,915,002
Accumulated other comprehensive loss	(8,416)		(10,637)
Retained earnings	3,454,595		2,740,457
Total stockholders’ equity	5,832,373		4,644,824
Total liabilities and stockholders’ equity	$	7,339,756	$	5,910,920

See Notes to Consolidated Financial Statements.


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VEEVA SYSTEMS INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands, except per share data)


	Fiscal year ended January 31,
		2025		2024		2023


Revenues:
Subscription services		$	2,284,659	$	1,901,593	$	1,733,002
Professional services and other		461,960		462,080		422,058
Total revenues		2,746,619		2,363,673		2,155,060
Cost of revenues (1):
Cost of subscription services		323,070		290,577		257,635
Cost of professional services and other		376,566		386,714		351,770
Total cost of revenues		699,636		677,291		609,405
Gross profit		2,046,983		1,686,382		1,545,655
Operating expenses (1):
Research and development		693,078		629,031		520,278
Sales and marketing		396,726		381,472		348,691
General and administrative		265,744		246,545		217,595
Total operating expenses		1,355,548		1,257,048		1,086,564
Operating income		691,435		429,334		459,091
Other income, net		227,946		158,689		50,005
Income before income taxes		919,381		588,023		509,096
Income tax provision		205,243		62,318		21,390
Net income		$	714,138	$	525,705	$	487,706
Net income per share:
Basic		$	4.41	$	3.27	$	3.14
Diluted		$	4.32	$	3.22	$	3.00
Weighted-average shares used to compute net income per share:
Basic		161,879		160,532		155,385
Diluted		165,232		163,486		162,437
Other comprehensive income:
Net change in unrealized gain (loss) on available-for-sale investments		$	4,094	$	22,038	$	(14,854)
Net change in cumulative foreign currency translation loss		(1,873)		(1,546)		(4,317)
Comprehensive income		$	716,359	$	546,197	$	468,535


(1) Includes stock-based compensation as follows:
Cost of revenues:
Cost of subscription services	$	6,591	$	6,483	$	6,257
Cost of professional services and other	51,377		53,237		50,341
Research and development	185,901		172,876		141,571
Sales and marketing	90,178		90,865		87,509
General and administrative	103,303		70,272		66,229
Total stock-based compensation	$	437,350	$	393,733	$	351,907

See Notes to Consolidated Financial Statements.


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VEEVA SYSTEMS INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share data)



	Class A & B common stock (1)			Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Total stockholders’ equity
	Shares	Amount

Balance at January 31, 2022	154,196,597	$	2	$	1,196,547	$	1,727,046	$	(11,958)	$	2,911,637
Issuance of common stock upon exercise of stock options	3,421,303	—		43,654		—		—		43,654
Issuance of common stock upon vesting of restricted stock units	968,004	—		—		—		—		—
Shares withheld related to net share settlement	(341,297)	—		(63,654)		—		—		(63,654)
Stock-based compensation expense	—	—		356,080		—		—		356,080

Change in other comprehensive loss	—	—		—		—		(19,171)		(19,171)
Net income	—	—		—		487,706		—		487,706
Balance at January 31, 2023	158,244,607	$	2	$	1,532,627	$	2,214,752	$	(31,129)	$	3,716,252
Issuance of common stock upon exercise of stock options	2,277,533	—		62,687		—		—		62,687
Issuance of common stock upon vesting of restricted stock units	1,150,059	—		—		—		—		—
Shares withheld related to net share settlement	(412,027)	—		(79,825)		—		—		(79,825)
Stock-based compensation expense	—	—		399,513		—		—		399,513
Change in other comprehensive income	—	—		—		—		20,492		20,492
Net income	—	—		—		525,705		—		525,705
Balance at January 31, 2024	161,260,172	$	2	$	1,915,002	$	2,740,457	$	(10,637)	$	4,644,824
Issuance of common stock upon exercise of stock options	673,079	—		105,538		—		—		105,538
Issuance of common stock upon vesting of restricted stock units	1,030,545	—		—		—		—		—
Shares withheld related to net share settlement	(380,007)	—		(79,116)		—		—		(79,116)
Stock-based compensation expense	—	—		444,768		—		—		444,768
Change in other comprehensive income	—	—		—		—		2,221		2,221
Net income	—	—		—		714,138		—		714,138
Balance at January 31, 2025	162,583,789	$	2	$	2,386,192	$	3,454,595	$	(8,416)	$	5,832,373

(1) Class B common stock was converted to Class A common stock on October 15, 2023. We refer to our Class A common stock as common stock. See note 1 3 Net Income per Share.

See Notes to Consolidated Financial Statements.


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VEEVA SYSTEMS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)


	Fiscal year ended January 31,
		2025			2024			2023

Cash flows from operating activities
Net income			$	714,138		$	525,705		$	487,706
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			39,383			32,628			29,122
Reduction of operating lease right-of-use assets			11,547			11,691			12,198
Accretion of discount on short-term investments			(24,443)			(26,515)			(3,624)
Stock-based compensation			437,350			393,733			351,907
Amortization of deferred costs			15,528			18,177			22,096
Deferred income taxes			(112,273)			(105,374)			(127,502)
Other, net			1,201			471			1,227
Changes in operating assets and liabilities:
Accounts receivable			(164,572)			(149,810)			(72,177)
Unbilled accounts receivable			(4,396)			45,809			(18,908)
Deferred costs			(17,995)			(10,268)			(20,815)
Prepaid expenses and other current and long-term assets			(17,453)			414			(47,399)
Accounts payable			(1,961)			(10,230)			21,429
Accrued expenses and other current liabilities			(1,414)			(4,249)			9,276
Income tax payable			(2,838)			6,916			(2,815)
Deferred revenue			227,838			188,164			140,472
Lease liabilities			(9,835)			(6,879)			(10,644)
Other long-term liabilities			246			956			8,921
Net cash provided by operating activities			1,090,051			911,339			780,470
Cash flows from investing activities
Purchases of short-term investments			(2,581,968)			(2,697,968)			(1,996,878)
Maturities and sales of short-term investments			1,902,349			1,647,813			1,002,707
Long-term assets			(20,519)			(26,196)			(13,512)
Net cash used in investing activities			(700,138)			(1,076,351)			(1,007,683)
Cash flows from financing activities
Proceeds from exercise of common stock options			105,538			62,687			43,654
Taxes paid related to net share settlement of equity awards			(79,423)			(78,875)			(63,030)
Net cash provided by (used in) financing activities			26,115			(16,188)			(19,376)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash			(1,735)			(1,780)			(4,986)
Net change in cash, cash equivalents, and restricted cash			414,293			(182,980)			(251,575)
Cash, cash equivalents, and restricted cash at beginning of period			706,670			889,650			1,141,225
Cash, cash equivalents, and restricted cash at end of period			$	1,120,963		$	706,670		$	889,650

Cash, cash equivalents, and restricted cash at end of period:
Cash and cash equivalents			$	1,118,785		$	703,487		$	886,465
Restricted cash included in other long-term assets			2,178			3,183			3,185
Total cash, cash equivalents, and restricted cash at end of period			$	1,120,963		$	706,670		$	889,650

Supplemental disclosures of other cash flow information:
Cash paid for income taxes, net of refunds			$	322,048		$	134,473		$	167,952
Excess tax benefits from employee stock plans			$	8,932		$	71,049		$	82,009

See Notes to Consolidated Financial Statements.


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VEEVA SYSTEMS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Summary of Business and Significant Accounting Policies

Description of Business

Veeva is the leading provider of industry cloud solutions for the global life sciences industry. Our offerings span cloud software, data, and business consulting and are designed to meet the unique needs of our customers and their most strategic business functions—from research and development (R&D) through commercialization. Our solutions help life sciences companies develop and bring products to market faster and more efficiently, market and sell more effectively, and maintain compliance with government regulations. Our commercial solutions help life sciences companies achieve better, more intelligent engagement with healthcare professionals and healthcare organizations across multiple communication channels, and plan and execute more effective media and marketing campaigns. Our R&D solutions for the clinical, regulatory, quality, and safety functions help life sciences companies streamline their end-to-end product development and quality and manufacturing processes to increase operational efficiency and maintain regulatory compliance throughout the product life cycle. Our solutions for clinical research sites enable regulatory documents and trial information to be managed in a modern cloud solution that is intended to accelerate the clinical research process for the life sciences industry overall. Our fiscal year end is January 31.

Principles of Consolidation and Basis of Presentation

These consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP) and applicable rules and regulations of the Securities and Exchange Commission (SEC) regarding annual financial reporting and include the accounts of our wholly-owned subsidiaries after elimination of intercompany accounts and transactions.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates, judgments and assumptions that affect the consolidated financial statements and the notes thereto. These estimates are based on information available as of the date of the consolidated financial statements. On a regular basis, management evaluates these estimates and assumptions. Items subject to such estimates and assumptions include, but are not limited to:

the standalone selling price for each distinct performance obligation included in customer contracts with multiple performance obligations;
the determination of the period of benefit for amortization of deferred costs;
the realizability of deferred income tax assets;
the fair value of our stock-based awards.

As future events cannot be determined with precision, actual results could differ significantly from those estimates.

Revenue Recognition

We derive our revenues primarily from subscription services and professional services. Subscription services revenues consist of fees from customers accessing our cloud-based software solutions and fees for our data solutions. Professional services and other revenues consist primarily of fees from implementation services, configuration, data services, business consulting, training, and managed services related to our solutions. Revenues are recognized when control of these services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services.

We determine revenue recognition through the following steps:

Identification of the contract, or contracts, with a customer;
Identification of the performance obligations in the contract;
Determination of the transaction price;
Allocation of the transaction price to the performance obligations in the contract; and


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Recognition of revenue when, or as, we satisfy a performance obligation.

Subscription Services Revenues

Subscription services revenues are recognized ratably over the respective noncancellable subscription term because of the continuous transfer of control to the customer. Our subscription arrangements are considered service contracts, and the customer does not have the right to take possession of the software.

Professional Services and Other Revenues

The majority of our professional services arrangements are billed on a time and materials basis and revenues are recognized over time based on time incurred and contractually agreed upon rates. Certain professional services revenues are billed on a fixed fee basis and revenues are typically recognized over time as the services are delivered based on time incurred. Business consulting services, data services, and training revenues are generally recognized as the services are performed.

Contracts with Multiple Performance Obligations

Some of our contracts with customers contain multiple performance obligations. For these contracts, we account for individual performance obligations separately when they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. We determine the standalone selling prices based on our overall pricing objectives, taking into consideration market conditions and other factors, including other groupings such as customer type and geography.

Deferred Costs

Deferred costs represent sales commissions associated with obtaining a contract with a customer. These costs are deferred and then amortized over a period of benefit that we have determined to be three years. We determined the period of benefit by taking into consideration the expected renewal period of our customer contracts, our technology and other factors. Amortization expense is included in sales and marketing expenses in the accompanying consolidated statements of comprehensive income.

Certain Risks and Concentrations of Credit Risk

Our revenues are derived from subscription services, professional services and other services delivered primarily to the life sciences industry. We operate in markets that are highly competitive and rapidly changing. Significant technological changes, shifting customer needs, the emergence of competitive products or services with new capabilities, and other factors could negatively impact our future operating results.

Our financial instruments that potentially subject us to concentration of credit risk consist primarily of cash and cash equivalents, short-term investments, and accounts receivable. Our cash equivalents and short-term investments are held by established financial institutions. We have established guidelines relative to credit ratings, diversification, and maturities that seek to maintain safety and liquidity. Deposits in these financial institutions may significantly exceed federally insured limits.

We do not require collateral from our customers and generally require payment within 30 days to 60 days of billing.

The following customer exceeded 10% of total accounts receivable as of the dates shown:


	January 31,
	2025	2024
Customer 1	10.1%	10.1%

No single customer represented over 10% of our total revenues for any of the years presented.

Cash Equivalents

We consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.


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Short-term Investments

Our short-term investments are classified as available-for-sale and recorded at estimated fair value. Unrealized gains and losses for available-for-sale securities are included in accumulated other comprehensive income, a component of stockholders’ equity. We evaluate our investments to assess whether those with unrealized loss positions are other than temporarily impaired. We consider impairments to be other than temporary if they are related to deterioration in credit risk or if it is likely we will sell the securities before the recovery of their amortized cost basis. Realized gains and losses and declines in value judged to be other than temporary are determined based on the specific identification method and are reported in other income, net, in the consolidated statements of comprehensive income. Interest, amortization of premiums, and accretion of discount on all short-term investments are also included as a component of other income, net, in the consolidated statements of comprehensive income.

We may sell our short-term investments at any time for use in current operations or for other purposes, even if they have not yet reached maturity. As a result, we classify our investments, including securities with maturities beyond 12 months, as current assets in the accompanying consolidated balance sheets.

Accounts Receivable and Allowance for Credit Losses

Accounts receivable are recorded at the invoiced amount, net of allowance for credit losses.

Property and Equipment

Property and equipment is stated at cost less accumulated depreciation. Depreciation is calculated on the straight-line method over the estimated useful lives of the assets and commences once the asset is placed in service or ready for its intended use. Land is not depreciated. The estimated useful lives by asset classification are as follows:



Building						30 years
Building improvements						Remaining useful life of the building
Equipment and computers						3 years
Furniture and fixtures						5 years
Land improvements						10 years
Leasehold improvements						Shorter of remaining life of the lease term or estimated useful life

Leases

We have operating leases for corporate offices.

We recognize lease right-of-use assets and liabilities at the commencement date based on the present value of lease payments over the lease term. We use an estimate of our discount rate based on the information available at the lease commencement date in determining the present value of lease payments, unless the implicit rate is readily determinable. The lease right-of-use assets also include any lease payments made and exclude lease incentives such as tenant improvement allowances. Options to extend or terminate the lease are included in the lease term when it is reasonably certain that we will exercise the extension or termination option.

Our operating leases typically include non-lease components such as common-area maintenance costs. We have elected to exclude non-lease components from lease payments for the purpose of calculating lease right-of-use assets and liabilities and these variable lease payments are expensed as incurred.

Leases with a term of one year or less are not recognized on our consolidated balance sheets; we recognize lease expense for these leases on a straight-line basis over the lease term.

Internal-Use Software

We capitalize certain costs incurred for the development of computer software for internal use. We capitalize these costs during the development of the software project, when it is determined that it is probable that the project will be completed and the software will be used as intended. Costs related to preliminary project activities, post-implementation activities, training, and maintenance are expensed as incurred. Internal-use software is amortized on a straight-line basis over its estimated useful life of three years, and the amortization expense is recorded as a component of cost of subscription services. Management evaluates the useful lives of these assets on an annual


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basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. Internal-use software is included in other long-term assets on the consolidated balance sheets.

Goodwill and Intangible Assets

Goodwill is evaluated for impairment at least annually or more frequently if circumstances indicate that goodwill may be impaired. A qualitative assessment is performed to determine whether it is more likely than not that the fair value of its reporting unit is less than its carrying amount. If the reporting unit does not pass the qualitative assessment, the carrying amount of the reporting unit, including goodwill, is compared to fair value and goodwill is considered impaired if the carrying value of the reporting unit exceeds its fair value. Any excess of the carrying value of the goodwill above its fair value is recognized as an impairment loss.

We have one reporting unit and completed our annual impairment test in our fourth quarter of the fiscal year ended January 31, 2025. There were no goodwill impairment charges during any of the periods presented.

Intangible assets associated with purchased intangibles, consisting of existing technology, customer relationships, trade names and trademarks, and data supplier and partner relationships are stated at cost less accumulated amortization and are amortized on a straight-line basis over their estimated remaining economic lives. Amortization expense related to existing technology and data supplier and partner relationships is included in cost of subscription services. Amortization expense related to customer relationships and trade names and trademarks is included in sales and marketing expense.

Long-Lived Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, we first compare undiscounted cash flows expected to be generated by that asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. There were no impairment charges recognized during any of the periods presented.

Business Combinations

The purchase price in a business combination is assigned to the estimated acquisition date fair values of the tangible and intangible assets acquired and the liabilities assumed with the residual recorded as goodwill. Critical estimates in valuing certain of the intangible assets include, but are not limited to, the net present value of future expected cash flows, future revenue growth, margins, customer retention rates, technology life, royalty rates, expected use of acquired assets, and discount rates.

Stock-based Compensation

We recognize compensation expense for all stock-based awards, including stock options and restricted stock units (RSUs), based on the estimate of fair value of the award at the grant date. The fair value of each option award is estimated on the grant date using either a Black-Scholes option-pricing model or a Monte Carlo simulation, to the extent market conditions exist. These models require that at the date of grant we determine the fair value of the underlying common stock, the expected term of the award, the expected volatility of the price of our common stock, risk-free interest rates, and expected dividend yield of our common stock. The fair value of each RSU award is measured based on the closing stock price of our common stock on the date of grant. We account for forfeitures as they occur. Compensation expense for awards with service conditions is recognized on a straight-line basis and for awards with market conditions is recognized on a graded vesting attribution method over the requisite service periods.

Cost of Revenues

Cost of subscription services revenues consists of expenses related to our computing infrastructure provided by third parties, including Salesforce, Inc. and Amazon Web Services, personnel-related costs associated with hosting our subscription services and providing support, including our data stewards, data acquisition costs, and costs of delivering our data solutions, allocated overhead, amortization expense associated with capitalized internal-use


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software, and amortization expense associated with purchased intangibles related to our subscription services. Cost of subscription services revenues for Veeva CRM and certain of our multichannel customer relationship management applications include fees paid to Salesforce, Inc. for our use of the Salesforce platform and the associated hosting infrastructure and data center operations that are provided by Salesforce, Inc.

Cost of professional services and other revenues consists primarily of employee-related expenses associated with providing these services, including salaries, benefits and stock-based compensation expense, the cost of third-party subcontractors, travel costs, and allocated overhead.

Advertising Expenses

Advertising expenditures are expensed as incurred and were immaterial for each of the years presented.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

We regularly assess the realizability of our deferred tax assets and establish a valuation allowance if it is more likely than not that some or all of our deferred tax assets will not be realized. We evaluate and weigh all available positive and negative evidence such as historic results, future reversals of existing deferred tax liabilities, and projected future taxable income. Generally, more weight is given to objectively verifiable evidence such as the cumulative income in recent years.

We establish liabilities or reduce assets for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining whether the weight of available evidence indicates that it is more likely than not that the position will be sustained upon an audit, including resolution of related appeals or litigation processes, if any. The second step requires us to measure the tax benefit as the largest amount that is more likely than not to be realized upon ultimate settlement. We recognize interest accrued and penalties related to unrecognized tax benefits as a component of income tax provision.

Foreign Currency Exchange

Assets and liabilities of foreign subsidiaries that do not have U.S. dollars as their functional currency are translated into U.S. dollars at the exchange rate on the balance sheet date. Revenues and expenses are translated at the average exchange rate during the period. Equity transactions are translated using historical exchange rates. The resulting translation adjustments are recorded as part of a separate component of the consolidated statements of comprehensive income. Foreign currency transaction gains and losses are included in the consolidated statements of comprehensive income for the period.

Indemnification

Our contracts generally include provisions for indemnifying customers against liabilities if our solutions infringe a third party’s intellectual property rights, and we may also incur liabilities if we breach the security and/or confidentiality obligations in our contracts. We have not incurred any material costs, and we have not accrued any liabilities in the accompanying consolidated financial statements as a result of these obligations.

Loss Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred.


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Recently Adopted Accounting Pronouncements

Improvements to Reportable Segment Disclosures

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. We adopted the new standard during the year ended January 31, 2025. See note 15 for more information.

New Accounting Pronouncements Issued and Not Yet Adopted

Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregation of rate reconciliation categories and income taxes paid by jurisdiction, among other amendments. This new standard is effective for our fiscal year beginning on February 1, 2025 on a prospective basis and retrospective application is permitted. We are currently evaluating this ASU to determine its impact on our disclosures.

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosure (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disclosure, in the notes to the financial statements, of additional information about certain costs and expenses for interim and annual reporting periods. This new standard is effective for our fiscal year beginning on February 1, 2027 and interim periods beginning on February 1, 2028 on a prospective basis and retrospective application is permitted. We are currently evaluating this ASU to determine its impact on our disclosures.

Note 2. Short-Term Investments

As of January 31, 2025, short-term investments consisted of the following (in thousands):


	Amortized cost		Gross unrealized gains		Gross unrealized losses		Estimated fair value
Available-for-sale securities:
Certificates of deposit	$	64,045	$	69	$	(21)	$	64,093
Asset-backed securities	526,986		3,257		(232)		530,011
Commercial paper	74,468		108		(1)		74,575
Corporate notes and bonds	2,202,150		10,588		(5,782)		2,206,956
Foreign government bonds	176,684		442		(1,023)		176,103
Municipal securities	67,780		173		(122)		67,831
U.S. agency obligations	24,616		94		(1)		24,709
U.S. treasury securities	888,968		1,440		(3,244)		887,164
Total available-for-sale securities	$	4,025,697	$	16,171	$	(10,426)	$	4,031,442


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As of January 31, 2024, short-term investments consisted of the following (in thousands):


	Amortized cost		Gross unrealized gains		Gross unrealized losses		Estimated fair value
Available-for-sale securities:
Certificates of deposit	$	94,210	$	87	$	(14)	$	94,283
Asset-backed securities	605,852		2,916		(1,787)		606,981
Commercial paper	144,218		47		(20)		144,245
Corporate notes and bonds	1,581,382		8,835		(5,188)		1,585,029
Foreign government bonds	50,180		206		(180)		50,206
Municipal securities	79,404		301		(231)		79,474
U.S. agency obligations	49,372		232		(12)		49,592
U.S. treasury securities	717,015		1,268		(3,824)		714,459
Total available-for-sale securities	$	3,321,633	$	13,892	$	(11,256)	$	3,324,269

The following table summarizes the estimated fair value of our short-term investments, designated as available-for-sale and classified by the contractual maturity date of the securities as of the dates shown (in thousands):


	January 31,
	2025		2024
Due in one year or less	$	1,066,558	$	919,871
Due in greater than one year	2,964,884		2,404,398
Total	$	4,031,442	$	3,324,269

We have not recorded an allowance for credit losses, as we believe any such losses would be immaterial based on the high credit quality of our investments. It is more likely than not we will hold the securities until maturity or a recovery of the cost basis.


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The following table shows the fair values of available-for-sale securities which were in an unrealized loss position, aggregated by investment category, as of January 31, 2025 (in thousands):


	12 months or less				Greater than 12 months
	Fair value		Gross unrealized losses		Fair value		Gross unrealized losses
Certificates of deposit	$	20,095	$	(21)	$	—	$	—
Asset-backed securities	25,220		(31)		44,789		(201)
Commercial paper	4,944		(1)		—		—
Corporate notes and bonds	616,379		(5,569)		71,331		(213)
Foreign government bonds	76,856		(1,023)		—		—
Municipal securities	22,593		(122)		—		—
U.S. agency obligations	1,865		(1)		—		—
U.S. treasury securities	439,382		(3,072)		173,071		(172)

The following table shows the fair values of available-for-sale securities which were in an unrealized loss position, aggregated by investment category, as of January 31, 2024 (in thousands):


	12 months or less				Greater than 12 months
	Fair value		Gross unrealized losses		Fair Value		Gross unrealized losses

Certificates of deposit	$	22,465	$	(14)	$	—	$	—
Asset-backed securities	120,543		(343)		105,419		(1,444)
Commercial paper	70,037		(20)		—		—
Corporate notes and bonds	394,823		(1,560)		280,092		(3,628)
Foreign government bonds	8,915		(19)		9,784		(161)
Municipal securities	31,418		(122)		13,686		(109)
U.S. agency obligations	1,795		(3)		4,991		(9)
U.S. treasury securities	280,946		(1,227)		204,274		(2,597)

Note 3. Deferred Costs

Deferred costs, which consist of deferred sales commissions, were $26 million and $24 million as of January 31, 2025 and January 31, 2024, respectively. Amortization expense for the deferred costs included in sales and marketing expenses in the consolidated statements of comprehensive income was $16 million, $18 million, and $22 million for the fiscal years ended January 31, 2025, 2024, and 2023, respectively. There have been no impairment losses recorded in relation to the costs capitalized for any period presented.

Note 4. Property and Equipment, Net

Property and equipment, net consists of the following as of the dates shown (in thousands):


	January 31,
	2025		2024
Land	$	3,040	$	3,040
Building	20,984		20,984
Land improvements and building improvements	22,392		22,392
Equipment and computers	1,483		2,551
Furniture and fixtures	6,288		15,498
Leasehold improvements	30,186		30,793
Construction in progress	2,992		31
Property and equipment, gross	87,365		95,289
Less accumulated depreciation	(31,453)		(36,757)
Total property and equipment, net	$	55,912	$	58,532


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Total depreciation expense was immaterial for the fiscal years ended January 31, 2025, 2024, and 2023.

Note 5. Goodwill and Intangible Assets

Goodwill was $440 million as of both January 31, 2025 and January 31, 2024.

The following table presents the details of intangible assets as of January 31, 2025 (dollar amounts in thousands):


	Gross carrying amount		Accumulated amortization		Net		Remaining useful life (in years)
Existing technology	$	28,580	$	(24,878)	$	3,702	1.0
Customer relationships	113,157		(73,223)		39,934		4.5
Trade name and trademarks	13,900		(13,900)		—		0.0
Other intangibles	21,405		(20,581)		824		1.8
Total intangible assets	$	177,042	$	(132,582)	$	44,460

The following table presents the details of intangible assets as of January 31, 2024 (dollar amounts in thousands):


	Gross carrying amount		Accumulated amortization		Net		Remaining useful life (in years)
Existing technology	$	28,580	$	(20,646)	$	7,934	2.0
Customer relationships	113,157		(61,755)		51,402		5.3
Trade name and trademarks	13,900		(11,925)		1,975		0.8
Other intangibles	21,405		(19,699)		1,706		2.2
Total intangible assets	$	177,042	$	(114,025)	$	63,017

Amortization expense associated with intangible assets was $19 million for all the fiscal years ended January 31, 2025, 2024, and 2023.

As of January 31, 2025, the estimated future amortization expense for intangible assets is as follows (in thousands):


Fiscal Year	Estimated amortization expense
Fiscal 2026	$	14,147
Fiscal 2027	8,922
Fiscal 2028	7,778
Fiscal 2029	7,782
Fiscal 2030	5,831

Total	$	44,460


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Note 6. Accrued Expenses

Accrued expenses consisted of the following as of the dates shown (in thousands):


	January 31,
	2025		2024
Accrued commissions	$	8,031	$	9,848
Accrued bonus	3,391		3,481
Accrued vacation (1)	7,017		7,375
Payroll tax payable	12,595		13,829
Accrued other compensation and benefits	8,395		8,900
Total accrued compensation and benefits	$	39,429	$	43,433
Accrued fees payable to Salesforce, Inc.	$	6,414	$	6,562
Taxes payable	8,697		7,632
Other accrued expenses (2)	20,446		18,786
Total accrued expenses and other current liabilities	$	35,557	$	32,980

(1) Represents accrued vacation primarily for international employees. Vacation does not accrue for most U.S. employees.
(2) Prior period balances were adjusted to conform with current period presentation.

Note 7. Fair Value Measurements

The carrying amounts of accounts receivable, other current assets, accounts payable, and accrued liabilities approximate their fair value due to their short-term nature.

Financial assets and liabilities recorded at fair value in the consolidated financial statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels, which are directly related to the amount of subjectivity associated with the inputs to the valuation of these assets or liabilities, are as follows:

Level 1—Observable inputs, such as quoted prices in active markets for identical assets or liabilities.

Level 2—Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Financial assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires management to make judgments and considers factors specific to the asset or liability.


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The following table presents the fair value hierarchy for financial assets and liabilities measured at fair value on a recurring basis as of January 31, 2025 (in thousands):


	Level 1		Level 2		Total
Assets
Cash equivalents:
Money market funds	$	314,872	$	—	$	314,872

U.S. Treasury securities	—		3,301		3,301



Short-term investments:
Certificates of deposit	—		64,093		64,093
Asset-backed securities	—		530,011		530,011
Commercial paper	—		74,575		74,575
Corporate notes and bonds	—		2,206,956		2,206,956
Foreign government bonds	—		176,103		176,103
Municipal securities	—		67,831		67,831
U.S. agency obligations	—		24,709		24,709
U.S. Treasury securities	—		887,164		887,164
Foreign currency derivative contracts	—		96		96
Total financial assets	$	314,872	$	4,034,839	$	4,349,711
Liabilities
Foreign currency derivative contracts	$	—	$	(525)	$	(525)
Total financial liabilities	$	—	$	(525)	$	(525)

The following table presents the fair value hierarchy for financial assets and liabilities measured at fair value on a recurring basis as of January 31, 2024 (in thousands):


	Level 1		Level 2		Total
Assets
Cash equivalents:
Money market funds	$	73,197	$	—	$	73,197
U.S. Treasury securities	—		9,969		9,969

Short-term investments:
Certificates of deposit	—		94,283		94,283
Asset-backed securities	—		606,981		606,981
Commercial paper	—		144,245		144,245
Corporate notes and bonds	—		1,585,029		1,585,029
Foreign government bonds	—		50,206		50,206
Municipal securities	—		79,474		79,474
U.S. agency obligations	—		49,592		49,592
U.S. Treasury securities	—		714,459		714,459
Foreign currency derivative contracts	—		616		616
Total financial assets	$	73,197	$	3,334,854	$	3,408,051
Liabilities
Foreign currency derivative contracts	$	—	$	(232)	$	(232)
Total financial liabilities	$	—	$	(232)	$	(232)

We determine the fair value of our security holdings based on pricing from our service providers and market prices from industry-standard independent data providers. The valuation techniques used to measure the fair value of financial instruments having Level 2 inputs were derived from non-binding consensus prices that are corroborated by observable market data or quoted market prices for similar instruments. Such market prices may be quoted prices in active markets for identical assets (Level 1 inputs) or pricing determined using inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs).


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Balance Sheet Hedges

We enter into foreign currency forward contracts in order to hedge our foreign currency exposure. These forward contracts are not designated as hedging instruments under applicable accounting guidance, and therefore, we account for them at fair value with changes in the fair value recorded as a component of other income, net in our consolidated statements of comprehensive income. Cash flows from such forward contracts are classified as operating activities. Realized and unrealized foreign currency gains and losses on hedges were immaterial for the fiscal years ended January 31, 2025, 2024, and 2023.

The fair value of our outstanding derivative instruments is summarized below (in thousands):


	January 31,
	2025		2024
Notional amount of foreign currency derivative contracts	$	130,122	$	201,407
Fair value of foreign currency derivative contracts	$	130,552	$	201,024

Note 8. Income Taxes

The components of income before income taxes by U.S. and foreign jurisdictions were as follows for the periods shown (in thousands):


	Fiscal year ended January 31,
	2025		2024		2023
United States	$	890,066	$	546,837	$	482,885
Foreign	29,315		41,186		26,211
Total	$	919,381	$	588,023	$	509,096

The majority of our revenues from international sales are invoiced from and collected by our U.S. entity and recognized as a component of income before taxes in the United States as opposed to a foreign jurisdiction.

Provision for income taxes consisted of the following for the periods shown (in thousands):


	Fiscal year ended January 31,
	2025		2024		2023
Current provision:
Federal	$	243,660	$	126,174	$	110,610
State	62,953		29,361		29,775
Foreign	10,903		12,157		8,507
Total current provision	317,516		167,692		$	148,892
Deferred benefit
Federal	(90,035)		(87,651)		(98,923)
State	(18,569)		(15,739)		(20,755)
Foreign	(3,669)		(1,984)		(7,824)
Total deferred benefit	(112,273)		(105,374)		$	(127,502)
Income tax provision	$	205,243	$	62,318	$	21,390


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Provision for income taxes differed from the amount computed by applying the federal statutory income tax rate of 21% for each of the fiscal years ended January 31, 2025, 2024, and 2023 to income before income taxes as a result of the following for the periods shown (in thousands):


	Fiscal year ended January 31,
	2025		2024		2023
Expected provision at statutory tax rate	$	193,070	$	123,485	$	106,910
State taxes, net of federal benefit	42,650		12,056		7,318
Tax credits	(35,416)		(36,333)		(33,463)

Stock-based compensation	35,618		(32,054)		(52,304)
Valuation allowance	3,726		13,572		5,654

Foreign derived intangible income deduction (FDII)	(30,535)		(15,489)		(15,811)
Release of income tax reserves	(2,531)		(9,201)		(293)
Other	(1,339)		6,282		3,379
Income tax provision	$	205,243	$	62,318	$	21,390

The tax effects of temporary differences that give rise to significant portions of our deferred tax assets and liabilities related to the following (in thousands):


	January 31,
	2025		2024
Deferred tax assets:


Capitalized expenditures	$	326,533	$	228,845
Stock-based compensation	68,466		49,710

Tax credit carryforward	64,536		65,307
Lease liabilities	19,737		13,967
Other (1)	14,781		18,360
Gross deferred tax assets	494,053		376,189
Valuation allowance	(77,056)		(79,056)
Total deferred tax assets	416,997		297,133
Deferred tax liabilities:

Intangible assets	(23,305)		(27,019)

Lease right-of-use assets	(16,675)		(11,410)

Other (1)	(33,685)		(27,293)
Total deferred tax liabilities	(73,665)		(65,722)
Net deferred tax assets	$	343,332	$	231,411
(1) Prior period balances were adjusted to conform with current period presentation.

In assessing the need for a valuation allowance, the Company considers all positive and negative evidence, including recent financial performance, scheduled reversals of temporary differences and projected future taxable income. Based on a review of such information, management believes that it is possible that some portion of deferred tax assets will not be realized as a future benefit and therefore has recorded a valuation allowance. The valuation allowance at the end of January 31, 2025 was primarily related to certain U.S. state deferred tax assets.

As of January 31, 2025, the net operating loss carryforwards for state and foreign income tax purposes were approximately $13 million and $2 million, respectively, and will begin to expire in 2031 and 2030, respectively. As of January 31, 2025, we had $3 million of federal and state capital loss carryforwards available to offset future capital gains. The federal and state capital losses begin to expire in 2029.

As of January 31, 2025, we had $78 million of California research and development tax credits available to offset future taxes which do not expire.

We evaluate tax positions for recognition using a more likely than not recognition threshold, and those tax positions eligible for recognition are measured as the largest amount of tax benefit that is greater than 50% likely of being realized upon the effective settlement with a taxing authority that has full knowledge of all relevant information. We classify unrecognized tax benefits that are not expected to result in payment or receipt of cash within one year as “other non-current liabilities” in the consolidated balance sheets. As of January 31, 2025, the total amount of gross unrecognized tax benefits was $39 million, of which $25 million, if recognized, would favorably impact our effective


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tax rate. The aggregate changes in our total gross amount of unrecognized tax benefits are summarized as follows for the periods shown (in thousands):


	Fiscal year ended January 31,
	2025		2024		2023
Beginning balance	$	39,737	$	30,713	$	25,241
Increases related to tax positions taken during the prior period	2		7,385		971
Increases related to tax positions taken during the current period	4,242		10,131		4,934
Decreases related to tax positions taken during the prior period	(101)		(17)		(137)

Lapse of statute of limitations	(4,478)		(8,475)		(296)
Ending balance	$	39,402	$	39,737	$	30,713

Our policy is to classify interest and penalties associated with unrecognized tax benefits as a component of the provision for income taxes. Accrued interest and penalties included in our liability related to unrecognized tax benefits were $3 million, $2 million, and $3 million as of January 31, 2025, 2024, and 2023, respectively.

We file tax returns in the United States for federal, California, and other states. Fiscal years ended January 31, 2022 and forward remain open to examination for federal income tax, and fiscal years ended January 31, 2018 and forward remain open to examination for California and other states. We file tax returns in multiple foreign jurisdictions. The fiscal years ended January 31, 2020 and forward remain open to examination in these foreign jurisdictions.

Note 9. Deferred Revenue, Performance Obligations, and Unbilled Accounts Receivable

Deferred Revenue

Of the beginning deferred revenue balance for the respective periods, we recognized $1,028 million, $833 million, and $708 million in revenue for the fiscal years ended January 31, 2025, 2024, and 2023, respectively.

Transaction Price Allocated to the Remaining Performance Obligations

As of January 31, 2025, the amount of the transaction price allocated to remaining performance obligations for noncancellable subscription services contracts greater than one year was not significant with the substantial majority of such allocated transaction price included in deferred revenue and expected to be recognized over the next 12 months.

Unbilled Accounts Receivable

As of January 31, 2025, unbilled accounts receivable consisted of (i) a receivable of $33 million primarily for revenue recognized for professional services performed but not yet billed and (ii) a contract asset of $8 million primarily related to professional services performed but for which we are not contractually able to invoice until a future period.

As of January 31, 2024, unbilled accounts receivable consisted of (i) a receivable of $32 million primarily for revenue recognized for professional services performed but not yet billed and (ii) a contract asset of $4 million primarily related to professional services performed but for which we are not contractually able to invoice until a future period.

Note 10. Leases

We have operating leases for our corporate offices with various expiration dates, some of which include options to extend the leases for up to seven years.

For the fiscal years ended January 31, 2025, 2024, and 2023, our operating lease expense was $14 million, $16 million, and $16 million, respectively.

Supplemental cash flow information related to leases was as follows (in thousands):


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	Fiscal year ended January 31,
	2025		2024
Cash paid for lease liabilities	$	12,522	$	10,291
Lease right-of-use assets obtained in exchange for new lease liabilities	$	30,866	$	3,700

Supplemental balance sheet information related to operating leases was as follows:


	January 31,
	2025		2024
Weighted average remaining lease term	7.7 years		6.6 years
Weighted average discount rate	4.6	%	4.4	%

As of January 31, 2025, remaining maturities of operating lease liabilities are as follows (in thousands):


Fiscal Year
Fiscal 2026	$	8,818
Fiscal 2027	13,451
Fiscal 2028	14,101
Fiscal 2029	10,653
Fiscal 2030	9,847
Thereafter	36,041
Total lease payments	92,911
Less imputed interest	(17,136)
Total lease liabilities	$	75,775

Note 11. Stockholders’ Equity

Common Stock

As of January 31, 2025 and 2024, we had 162,583,789 and 161,260,172 shares of common stock outstanding, respectively.

Voting Rights

The holders of our common stock are entitled to one vote per share.

Stockholders do not have the ability to cumulate votes for the election of directors. Our certificate of incorporation and bylaws provide for a declassified board of directors, with annual election of directors, serving a one-year term.

Dividend Rights

Subject to preferences that may apply to shares of preferred stock outstanding at the time, the holders of outstanding shares of our common stock are entitled to receive dividends out of funds legally available if our board of directors, in its discretion, determines to issue dividends, and only then at the times and in the amounts that our board of directors may determine.

No Preemptive or Similar Rights

Our common stock is not entitled to preemptive rights and is not subject to conversion, redemption, or sinking fund provisions.

Right to Receive Liquidation Distributions

Upon our dissolution, liquidation, or winding-up, the assets legally available for distribution to our stockholders are distributable ratably among the holders of our common stock, subject to prior satisfaction of all outstanding debt and liabilities and the preferential rights and payment of liquidation preferences, if any, on any outstanding shares of preferred stock.


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Employee Equity Plans

Pursuant to our equity compensation program, the vast majority of our employees are granted RSUs, which typically vest over a one-year period, and stock options, which typically vest over a four-year period.

2013 Equity Incentive Plan

Our board of directors adopted our 2013 Equity Incentive Plan in August 2013, and our stockholders approved it in September 2013. The 2013 Equity Incentive Plan became effective immediately on adoption although no awards were made under it until the date of our IPO on October 15, 2013. Our board of directors approved the amended and restated 2013 Equity Incentive Plan (as amended and restated, 2013 EIP) in March 2022, and our stockholders approved it in June 2022, at which time the amended and restated 2013 EIP took effect.

As of January 31, 2025, the number of shares of our common stock available for issuance under the 2013 EIP was 47,283,077. The number of shares available for issuance under the 2013 EIP automatically increases on the first business day of each of our fiscal years, commencing in 2014, by a number equal to the least of (a) 13.75 million shares, (b) 5% of the shares of our common stock outstanding on the last business day of the prior fiscal year, or (c) the number of shares determined by our board of directors. During our fiscal year ended January 31, 2025, our board of directors determined to add 6,450,406 shares of common stock to the 2013 EIP.

2013 Employee Stock Purchase Plan

Our Employee Stock Purchase Plan (ESPP) was adopted by our board of directors in August 2013 and our stockholders approved it in September 2013. The ESPP became effective as of our IPO registration statement on Form S-1, on October 15, 2013. Our ESPP is intended to qualify under Section 423 of the Internal Revenue Code of 1986, as amended (Code). The ESPP was approved with a reserve of 4 million shares of common stock for future issuance under various terms provided for in the ESPP. As of January 31, 2025, the number of shares available for issuance under our ESPP was 4,897,856. The number of shares available for issuance under the ESPP automatically increases on the first business day of each of our fiscal years, commencing in 2014, by a number equal to the least of (a) 2.2 million shares, (b) 1% of the shares of our common stock outstanding on the last business day of the prior fiscal year or (c) the number of shares determined by our board of directors. During our fiscal year ended January 31, 2025, our board of directors determined no additional shares were to be made available for issuance under the ESPP.

During active offering periods, our ESPP permits eligible employees to acquire shares of our common stock at 85% of the lower of the fair market value of our common stock on the first day of the applicable offering period or the fair market value of our common stock on the purchase date. Participants may purchase shares of common stock through payroll deductions of up to 15% of their eligible compensation, subject to any plan limitations. The initial offering period for our ESPP commenced on the date of our initial public offering and ended on June 15, 2014. We have not had any open offering periods subsequent to the initial offering period.

Stock Option Activity

The 2013 EIP provides for the issuance of incentive and nonstatutory options to employees, consultants and non-employee directors. Options issued under the 2013 EIP generally are exercisable for periods not to exceed ten years and generally vest over four years, with certain options vesting over five to seven years.


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A summary of stock option activity for the fiscal year ended January 31, 2025 is as follows:


	Number of shares	Weighted average exercise price		Weighted average remaining contractual term (in years)	Aggregate intrinsic value (in millions)
Options outstanding at January 31, 2024	11,147,810	$	157.20	6.7	$	626
Options granted	4,759,152	$	226.45
Options exercised	(673,079)	$	156.79
Options forfeited/cancelled	(599,962)	$	208.88
Options outstanding at January 31, 2025	14,633,921	$	177.65	6.8	$	860
Options vested and exercisable at January 31, 2025	6,331,044	$	130.97	4.5	$	676
Options vested and exercisable at January 31, 2025 and expected to vest thereafter	14,633,921	$	177.65	6.8	$	860

The options granted during the fiscal year ended January 31, 2025 consisted primarily of a grant made to our Chief Executive Officer and grants made in connection with our annual performance review cycle. The weighted average grant-date fair value of options granted was $80.69, $81.17, and $88.25 per option for the fiscal years ended January 31, 2025, 2024, and 2023, respectively.

As of January 31, 2025, there was $466 million in unrecognized compensation cost related to unvested stock options granted under the 2013 Equity Incentive Plan. This cost is expected to be recognized over a weighted average period of 2.4 years.

The total intrinsic value of options exercised was approximately $45 million for the fiscal year ended January 31, 2025.

Stock Option Valuation Assumptions

The following table presents the weighted-average assumptions used to estimate the grant date fair value of options granted during the periods presented:


	Fiscal year ended January 31,
		2025			2024				2023
Volatility			39%	-	41%		39%	-	41%		37%	-	40%
Expected term (in years)			5.5	-	7.6		6.3	-	7.0		6.0	-	7.0
Risk-free interest rate					3.46%	-	4.65%		3.34%	-	4.73%		1.90%	-	4.20%
Dividend yield		—%			—%				—%

During the fiscal year ended January 31, 2025, we granted our Chief Executive Officer options to purchase an aggregate of 2,650,000 shares of our common stock at an exercise price of $236.90 per share, which was equal to the Company’s 52-week high trading price at the time of grant. The stock option will vest in five equal increments on February 1 of 2026 through 2030, subject to Mr. Gassner’s continuous service as Chief Executive Officer through each annual vesting date. In addition, no portion of the stock option will be exercisable unless the closing price of the Company’s common stock is sustained at or above $236.90 per share for a period of sixty consecutive trading days during the vesting period between February 1, 2025 and February 1, 2030. The grant date fair value of the stock option of approximately $172 million was calculated using a Monte Carlo simulation model and the following table provides the assumptions used in the simulation:


Volatility			39%
Expected term (in years)			7.6
Risk-free interest rate			4.18%
Dividend yield			—%

Restricted Stock Units

The 2013 EIP provides for the issuance of restricted stock unit (RSUs) to employees. RSUs issued under the 2013 EIP generally vest over a period of one year.


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A summary of RSU activity for the fiscal year ended January 31, 2025 is as follows:


	Unreleased restricted stock units	Weighted average grant date fair value
Balance at January 31, 2024	1,011,731	$	192.77
RSUs granted	989,174	$	213.04
RSUs vested	(1,030,545)	$	199.52
RSUs forfeited/cancelled	(90,334)	$	206.10
Balance at January 31, 2025	880,026	$	206.25

As of January 31, 2025, there was a total of $84 million in unrecognized compensation cost related to unvested RSUs. This cost is expected to be recognized over a weighted-average period of approximately 1.1 years. The total grant date fair value of RSUs vested for the fiscal year ended January 31, 2025 was $215 million.

Note 12. Other Income

Other income, net, consisted of the following (in thousands):


	Fiscal year ended January 31,
	2025		2024		2023
Foreign currency (loss) gain	$	(3,274)	$	124	$	591
Accretion on investments	22,622		24,817		2,982
Interest income, net	207,987		133,748		45,860
Miscellaneous income	611		—		572
Other income, net	$	227,946	$	158,689	$	50,005

Note 13. Net Income per Share

Basic net income per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period.

Diluted net income per share is computed by dividing net income by the weighted-average shares outstanding, including potentially dilutive shares of common equivalents outstanding during the period. The dilutive effect of potential shares of common stock are determined using the treasury stock method.

On October 15, 2023, all of our outstanding shares of Class B common stock automatically converted into the same number of shares of Class A common stock pursuant to the terms of our then effective Amended and Restated Certificate of Incorporation. Because shares of Class B common stock were outstanding for a portion of the fiscal year ended January 31, 2024, we have disclosed earnings per share for Class A and Class B common stock for the fiscal year ended January 31, 2024. For the fiscal years ended January 31, 2024 and 2023, the computation of fully diluted net income per share of Class A common stock assumes the conversion from Class B common stock, while the fully diluted net income per share of Class B common stock does not assume the conversion of those shares.


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The numerators and denominators of the basic and diluted net income per share computations for our common stock are calculated as follows (in thousands, except per share data):


	Fiscal year ended January 31,
		2025	2024				2023
				Common				Class A			Class B			Class A			Class B
Basic
Numerator
Net income, basic					$	714,138			$	491,747		$	33,958		$	441,425		$	46,281
Denominator
Weighted average shares used in computing net income per share, basic					161,879				150,162			10,370			140,640			14,745
Net income per share, basic					$	4.41			$	3.27		$	3.27		$	3.14		$	3.14
Diluted
Numerator
Net income, basic					$	714,138			$	491,747		$	33,958		$	441,425		$	46,281
Reallocation as a result of conversion of Class B to Class A common stock:
Net income, basic					—				33,958			—			46,281			—
Reallocation of net income to Class B common stock					—				—			8,887			—			19,163
Net income, diluted					$	714,138			$	525,705		$	42,845		$	487,706		$	65,444
Denominator
Number of shares used for basic net income per share computation					161,879				150,162			10,370			140,640			14,745
Conversion of Class B to Class A common stock					—				10,370			—			14,745			—
Effect of potentially dilutive common shares					3,353				2,954			2,954			7,052			7,052
Weighted average shares used in computing net income per share, diluted					165,232				163,486			13,324			162,437			21,797
Net income per share, diluted					$	4.32			$	3.22		$	3.22		$	3.00		$	3.00

Potential common share equivalents excluded where the inclusion would be anti-dilutive are as follows (in thousands):


	Fiscal year ended January 31,
		2025		2024		2023
Options and RSUs			8,609		6,083		3,945

Note 14. Commitments and Contingencies

Litigation

IQVIA Litigation Matters

IQVIA and Veeva have been involved in litigation since 2017. On January 10, 2017, IQVIA Inc. and IMS Software Services, Ltd. (collectively, IQVIA) filed a claim in the U.S. District Court for the District of New Jersey alleging that, among other things, we misappropriated trade secrets related to proprietary IQVIA data in violation of federal and state law and seeking declaratory and injunctive relief and unspecified monetary damages (IQVIA Inc. v. Veeva Systems Inc. (No. 2:17-cv-00177)). On July 17, 2019, IQVIA also filed in the U.S. District Court for the District of New Jersey an action seeking declaratory judgement that IQVIA is not liable to Veeva for disallowing use of IQVIA data in Veeva software products (IQVIA Inc. v. Veeva Systems Inc. (No. 2:19-cv-15517)). We filed counterclaims in the first case as well as a complaint against IQVIA in the U.S. District Court for the Northern District of California alleging that, among other things, IQVIA has violated federal and state antitrust laws with respect to certain limits on access to and use of IQVIA data by Veeva and Veeva customers and seeking injunctive relief, monetary damages exceeding $200 million, and attorneys’ fees. These cases are currently before the same judge in the U.S. District Court for the District of New Jersey.

Fact and expert discovery in these cases is largely complete. The presiding federal district court has bifurcated the claims for trial such that IQVIA's trade secret claims will go to trial first, but no trial date has been set. In September 2024, the parties filed cross motions for summary judgment on the trade secret claims and hearings on the motions were held on January 21 and January 28, 2025. No ruling has been issued.


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While it is not possible at this time to predict with any degree of certainty the ultimate outcome of these lawsuits, and we are unable to make a meaningful estimate of the amount or range of gain or loss, if any, that could result from them, we believe that we have substantial defenses against IQVIA’s claims, which we intend to vigorously contest, and that our counterclaims warrant injunctive relief and monetary damages for Veeva.

Fee Arrangements Related to the IQVIA Litigation Matters. We have entered into partial contingency fee arrangements with certain law firms representing us in the IQVIA litigations. Pursuant to those arrangements, such law firms are entitled to an agreed portion of any damages we recover from IQVIA or may be entitled to payment of success fees from us based on the achievement of certain outcomes. We are unable to make an estimate of any liability we may have in connection with this arrangement and accordingly have not accrued any related liability at this time.

Other Litigation Matters

From time to time, we may be involved in other legal proceedings and subject to claims incident to the ordinary course of business. Although the results of such legal proceedings and claims cannot be predicted with certainty, we believe we are not currently a party to any other legal proceedings, the outcome of which, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, cash flows, or financial position. Regardless of the outcome, such proceedings can have an adverse impact on us because of defense and settlement costs, diversion of resources, and other factors, and there can be no assurances that favorable outcomes will be obtained.

Note 15. Segment Information

Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assessing performance. We define the term “chief operating decision maker” to be our Chief Executive Officer (CEO). Our CEO reviews the financial information presented on a consolidated basis for purposes of allocating resources and evaluating our financial performance. Accordingly, the Company operates as a single operating and reportable segment that is focused on providing industry cloud solutions tailored to the global life sciences industry.

The CEO gauges the effectiveness of investment and resourcing decisions and trends in the overall efficiency of the business over time using multiple measures of performance, including consolidated net income and adjusted operating income, which is an additional measure of our segment profitability. The measure of segment assets is reported on the consolidated balance sheets as total assets.

The following table reconciles the Company’s revenues to consolidated net income and the specific items excluded from cost of revenues and operating expenses to calculate adjusted operating income (in thousands):


	Fiscal year ended January 31,
		2025		2024		2023
Revenues		$	2,746,619	$	2,363,673	$	2,155,060

Cost of revenues - adjusted:
Cost of subscription services revenues		312,169		279,626		246,909
Cost of professional services and other revenues		324,639		332,927		300,879
Operating expenses - adjusted:
Research and development		507,092		456,041		378,594
Sales and marketing		293,105		276,505		247,077
General and administrative		157,271		176,048		151,139
Operating income - adjusted		1,152,343		842,526		830,462
Other segment items (1)		460,908		413,192		371,371
Other income, net		227,946		158,689		50,005
Provision for income taxes		205,243		62,318		21,390
Consolidated net income		$	714,138	$	525,705	$	487,706
(1) Other segment items included in consolidated net income consist primarily of stock-based compensation expense and amortization of purchased intangibles.


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Cost of revenues - adjusted, and operating expenses - adjusted, are segment expenses that are regularly provided to the CEO and do not include stock-based compensation, amortization of purchased intangibles, and litigation settlement expenses, as we exclude them from our internal management reporting processes. We find it useful to exclude these expenses when we assess the appropriate level of various operating expenses and resource allocations when budgeting, planning, and forecasting future periods.

Note 16. Information about Geographic Areas and Products

Information about Geographic Areas

We track and allocate revenues by principal geographic area rather than by individual country, which makes it impractical to disclose revenues for the United States or other specific foreign countries. We measure subscription services revenue primarily by the estimated location of the end users in each geographic area for our Commercial Solutions and primarily by the estimated location of usage in each geographic area for our R&D Solutions. We measure professional services revenue primarily by the location of the resources performing the professional services.

Total revenues by geographic area were as follows for the periods shown below (in thousands):


	Fiscal year ended January 31,
		2025		2024		2023
Revenues by geography
North America		$	1,621,697	$	1,387,425	$	1,253,760
Europe		790,777		662,560		598,828
Asia Pacific		265,735		250,600		244,655
Middle East, Africa, and Latin America		68,410		63,088		57,817
Total revenues		$	2,746,619	$	2,363,673	$	2,155,060

Long-lived assets by geographic area are as follows as of the periods shown below (in thousands):


	January 31,
	2025		2024
Long-lived assets by geography
North America	$	47,144	$	49,725
Europe	6,778		6,885
Asia Pacific	1,295		751
Middle East, Africa, and Latin America	695		1,171
Total long-lived assets	$	55,912	$	58,532


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Revenues by Product

We group our revenues into two product areas: Commercial Solutions and R&D Solutions. Commercial Solutions revenues consist of revenues from our Veeva Commercial Cloud and Veeva Data Cloud solutions. R&D Solutions revenues consist of revenues from our Veeva Development Cloud, Veeva Quality Cloud, Veeva RegulatoryOne, and Veeva QualityOne solutions.

Total revenues consist of the following (in thousands):


	Fiscal year ended January 31,
		2025		2024		2023
Subscription services
Commercial Solutions		$	1,104,888	$	995,803	$	946,252
R&D Solutions		1,179,771		905,790		786,750
Total subscription services		2,284,659		1,901,593		1,733,002
Professional services
Commercial Solutions		185,302		185,981		177,188
R&D Solutions		276,658		276,099		244,870
Total professional services		461,960		462,080		422,058
Total revenues		$	2,746,619	$	2,363,673	$	2,155,060

Note 17. 401(k) Plan

We have a qualified defined contribution plan under Section 401(k) of the Internal Revenue Code covering eligible employees, as well as a Registered Retirement Savings Plan (RRSP) for eligible employees in Canada. Prior to January 1, 2025, we matched up to $2,000 per employee per year under the 401(k) plan. Beginning January 1, 2025, under the updated plan, we match up to $4,000 per employee per year. Under the RRSP plan, we also match up to $2,000 per employee per year. For the fiscal years ended January 31, 2025, 2024, and 2023, total expense related to these plans was $10 million, $9 million, and $8 million, respectively.

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