I would now like to turn the call over to Josh Faddis, Veeva’s General Counsel. You may proceed.

Good afternoon and welcome to Veeva’s fiscal first quarter earnings call. With me on today’s call are Peter Gassner, our Chief Executive Officer; Matt Wallach, our President; and Tim Cabral, our Chief Financial Officer. During the course of this conference call, we will make forward-looking statements regarding trends, our strategies and the anticipated performance of the business. These forward-looking statements will be based on management’s current views and expectations and are subject to various risks and uncertainties. Actual results may differ materially. Please refer to the risks listed in our earnings release and the risk factors included in our most recent filing on Form 10-K, which is available on the company’s website at www.veeva.com under the Investors section and on the SEC’s website at www.sec.gov. Forward-looking statements made during the call are being made as of today. If this call is replayed or viewed after today, the information presented during the call may not contain current or accurate information. Veeva disclaims any obligation to update or revise any forward-looking statements. We will provide guidance on today’s call, but we will not provide any further guidance or updates on our performance during the quarter, unless we do so in a public forum. On the call, we will also discuss certain non-GAAP metrics that we believe aid in the understanding of our financial results. A reconciliation to comparable GAAP metrics can be found in today’s earnings release which is available on our website and as an exhibit to the Form 8-K filed with the SEC to support this call. With that thank you for joining us. And I will now turn it over to Peter.

Thank you, Josh. I will first summarize our results for the quarter then talk about some recent highlights before turning it over to our CFO, Tim Cabral for a detailed overview of our financials. We had a great first quarter with a total revenue of $66.7 million, up 56% from a year ago and subscription revenue up $48.5 million, up 74%. We also continued to deliver solid profitability with the non-GAAP operating margin of 24% for the quarter. I would like to start by talking a bit about the Veeva Commercial Summit held last week in Philadelphia. This is an annual event where we bring together current and prospective customers and partners to showcase our commercial offerings and share best practices. The event has grown to nearly 900 attendees and is now one of the largest gatherings in the world for the commercial side of the life sciences industry. Customer and prospect attendance increased 46% over last year and we also saw far greater diversity in the types of people we drew from across commercial operations. This is a direct reflection of our growing presence in the market and expansion into new areas. We increased core CRM attendance and added far more people with full commercial responsibility. In addition we had more attendees focused on a broader set of functions across regulatory, medical, marketing and data. The common theme at the Summit was transforming sales and marketing by bringing together data with Veeva Network, content with Veeva Vault and interactions with Veeva CRM in powerful new ways. Life sciences companies are laser focused on increasing efficiency, compliance and agility globally and we are helping them achieve this. The market is realizing the power of our integrated commercial suite of products delivered seamlessly in the cloud which we refer to as…

Thanks Peter. I’m very pleased with the Q1 results on both the top and bottom line. Total revenue was $66.7 million, up from $42.8 million one year ago, a 56% increase and above our guidance of $62.5 million to $63.5 million. For the quarter, subscription revenue was up 74% to $48.5 million from $27.9 million last year. Subscription revenue growth on a year-over-year basis was driven by strength across all three product lines, but primarily by continued global deployment in CRM and growth in sales of both our Vault commercial and R&D applications. On a sequential basis, this strength also helped to offset the impact of the three fewer days of revenue recognition in Q1. Services revenue for the quarter was $18.2 million, up from $14.9 million in Q1 2014. These results included a higher than expected contribution from Vault and network implementations. We also saw a positive impact from some one-time milestone based arrangements. As a reminder, we do continue to expect services revenues to be variable period to period depending on a number of factors, including the requirements, complexity and timing of our customers’ implementation projects and the achievement of milestones in some of our professional services arrangements. The primary purpose of our professional services is to ensure our customers achieve success with our cloud solutions. In terms of geographic mix for the first quarter, approximately 56% of our total revenue came from North America and 44% came from outside North America based upon the estimated location of users for subscription revenue and the location of projects for services revenue. This was a shift of 5 percentage points towards international versus Q1 from a year ago driven mostly by rapid growth from Asia. As a reminder, revenue from regions outside of North America is expected to gradually increase…

(Operator Instructions) Your first question comes from Jennifer Lowe with Morgan Stanley. Your line is now open.

Thank you. I wanted to touch on the Commercial Cloud a little bit and sort of the opportunity there as it gives you sort of an opportunity to sell more of the product into these customers. As you think about, I don’t want to call that but a vanilla sales automation account versus customer that really embraces the Commercial Cloud, how do you view that as sort of affecting your revenue opportunity within the client? Is there something that could be a material uplift for you as customers embrace the product suite more holistically?

Yes, Jen, it certainly can when we get our base CRM product into a customer and they start pulling it and they start having success. That’s often the way things can start on the commercial side with a large customer. Then they will see the quality of our software and our people, have a good experience, have success, and then that will start opening their eyes to the full potential, the full suite of the Commercial Cloud, which is a set of applications including two new ones that we introduced. They are integrated together. And the integration keeps getting better. So, when they start to experience the company and realizes, it leads to more products, more divisions, more geographies and more revenue for Veeva.

Great. And maybe just shifting gears quickly, last quarter you talked a little bit about customer account with Vault and with network and also highlighted a couple of million dollar deal wins there. I am just curious if there is any update there in terms of where you are with Vault customers or where you are seeing in terms of seven-figure wins with Vault and Network at this point?

With Vault and Network, we are certainly seeing tremendous pipeline. And as we mentioned on the call, we saw another customer cross the seven-figure threshold for Vault, which is just in one application, the promotional materials management application, and not fully deployed there. So, we do see that. We can see it in the pipeline. I think the proof point of the last quarter we announced the large ETMF customer who purchased it. That’s become a proof point and it’s provided validation of Vault as a enterprise content management platform and that’s reflected in the pipeline, but these things as you know, these things they take a while to mature through the pipeline.

Okay, thank you.

In terms of customer accounts, Tim, do you want to take that one?

Yes. Jen, we will be updating that customer account annually. Quarter-to-quarter movements aren’t really necessarily representative of the growth or the momentum of the business, but I do think the anecdotes that Peter talked to really are more indicative of the business.

Okay. Thank you.

Your next question comes from Karl Keirstead with Deutsche Bank. Your line is now open.

Hey, guys. This is Jobin Mathew on behalf of Karl. Thanks for taking my question. I had a couple of questions, one for Peter, one for Tim. So, Peter, you mentioned the non-CRM part of the business is now about 10%. If I remember right, at the end of last year, I think you guys had it under 5%. So, it seems like this is clearly at a tipping point. Can you talk about the dynamics here versus CRM. Clearly in CRM, you guys had a great run replacing legacy installed based out here. Is that the same story with Vault and Network? Are you going after Documentum and SharePoint units out there or do you have any greenfield opportunity that’s bigger than what some people may think?

Yes, what we disclosed before, it’s our last year’s subscription revenue and that was around 5% that was non-CRM, that was for last year’s subscription revenue. And now, what we disclosed this time is that on the quarterly revenue, total revenue, more than 10% was for non-CRM. So, it’s true, we’re seeing the growth in percentage as we have more uptake in Vault and in Network. Now, in terms of the macro level of what we’re doing it’s correct, we’re replacing client-server applications. So, we’re replacing maybe [Siebel] [ph] that type of thing in the CRM side, on the Vault side we’re replacing could be Documentum, SharePoint and few other things and then in Network really replacing a lot of a variety of client-server tool kits and data sources. So, I think you’re right, it is a – it’s a similar pattern and all three of them are big opportunities for us. We’re really, we’re bringing the customers to the cloud, it’s replacing client-server.

Got it. And as we think about the back half of the year, how should we think about this ramp of the non-CRM business for the full year?

Tim, in terms of forward guidance there, can you take that?

Yes. So, Jobin, we did give guidance or revised guidance for the full fiscal year. We have not to-date given specific guidance on the break between CRM and Vault to Network and that’s not something that we’re doing right now although we are pleased with the growth and momentum of all three product lines.

Got it. And so, yes, one more question for Tim. So, Tim, looking at your guidance and looking at your performance in the first quarter of this year and what you guys did last year the billings is obviously pretty strong, but as I look at your guidance for the second half, it seems there is a slight slowdown which is kind of baked in your guidance. Is that just coming about due to any conservatism from your side around timing of new project deployments or is there any other moving pieces that we should be thinking about?

Yes, I think it’s a good point Jobin, I do think that given it’s early in the year and we have a number of quarters still in front of us to execute on there is probably a little bit of a lean towards being conservative in that guidance although it was what we consider to be a strong [raise] [ph] from the original guidance. So, I think that’s probably the contributor.

Okay. And one last question on the margins. So, the margins clearly outperformed our expectation what we had, so you guys had strong gross margins. But, I was also thinking about your spending intentions. How should we think about it, would it be kind of even throughout the year or is it more backend loaded in terms of your hiring plans for this year? Thanks.

Yes, Jobin, I think we’re aggressive in each one of the quarters as we look at our internal plan from a hiring perspective. Obviously we see a large opportunity across these three product lines and want to invest pretty aggressively and hiring is one of the key ways to do that. So, I don’t, I wouldn’t characterize it as backend loaded.

Got it. Thanks guys. Good quarter.

Thank you.

Thanks Jobin.

Your next question comes from Sterling Auty with JPMorgan. Your line is now open.

Hi, this is Jackson Ader on for Sterling. We just had one – or a couple of questions, the first being can we have just a little more color on the mix of R&D from the Vault product versus the traditional side of things?

Yes. I don’t have the exact numbers on the mix there. But I will say we are seeing some traction on both really. I would say relatively even of course on the commercial side that’s – those were the products that we introduced first, so they have been around for longer. They maybe have deeper and then on the R&D side the opportunities are bigger there more applications and more. But I would say right now roughly even on our traction across R&D and commercial for Vault.

Great. And then just a follow-up, retention rates, any – are they in line with what you’ve seen historically either on a dollar base or customer base retention rate, do you have any color there?

Tim, do you want to take that one?

Sure, Jackson. High level retention rates have not changed from what we’ve seen historically. We do give a revenue retention metric on an annual basis and we’ll continue to do it on that cadence.

Okay, great. That was all from us. Thank you.

Your next question comes from Brendan Barnicle with Pacific Crest. Your line is now open.

Thanks so much. Peter, the question I always get from folks is about sort of where you are in the opportunity here. And I was wondering, are any customer is using all three of the core of CRM network getting involved products at this point.

Yes, Brendan. We do – and I’ll give you a couple of flavors of that. Because it depends when you’re talking about the small, the medium, the large size customers, so we do have some large size customers that are using all three products, but we don’t have any large customers that are fully deployed with all three product lines, right, that takes you while when you think about divisions, geographies applications. Now, if you talk about the small size customer, we have some really interesting and exciting things going on. We started selling our R&D applications, the first versions of them maybe 18 months ago. And as those applications were very early they were suitable for small companies, small biotechs, emerging biotechs, just moving off of paper and file shares, so they got the version one Vault Network and it was great on the R&D. Well now if you look at 18 months later now, those companies, some of them that have been quite successful. They’re getting ready to commercialize their first products and when they do that, they will only commercialize in one country and one product and in the U.S. so there is still relatively small companies, but well funded and going. Well those companies now are getting our commercial Vault Network and CRM, the commercial cloud all at once. So when they come to market, they basically have been able to skip this whole client server generation and be very efficient. And we think that’s a great proof point to say, hey, clearly this industry caught from Veeva is a better way to go. And especially if you have a clean slate just put it all in, that’s an indicator that even the big companies over time want to organize ways surgically start putting in – put things because they can’t replace it all at once, there is just too much disruption across the product lines, geographies and divisions.

And Peter, with any of the announcements that you made at the user conference last week, does that do anything to that $5 billion TAM you’ve historically talked about, changed at anyway?

Matt, do you want to take that one?

Sure. So the announcements that made were mostly in the CRM area. And so I’d focus in on the $2 billion TAM that we have always defined for CRM and the way that we defined – the short answer is no, it’s all within the $2 billion. And that’s because the way that we’ve defined it, is it it’s the CRM and other sales productivity and compliance tools that sales reps use. Two of the big areas of spend are meeting its management and territory alignments and planning. And so those were always included in the TAM and always on our product roadmap is just kind of a question, when we would get there? So those are big opportunities, but within the $2 billion.

Great. And then, Matt, just quickly you mentioned that you’d expect margins to sort of declined through the back half of the year. Do you expect operating margins to bottom out this year or would we expect them to continue to sort of trying to bottom sometime next year?

Tim, you want to take that one?

Yes, this is Tim. I think it’s a little bit early to tell. I don’t if we would consider a bottoming out this year. I think we’ll see some compression from where we landed in Q1 of 24% and over the long-term I think as we talked about before, our long-term model was probably right in that neighborhood as well. So I don’t think there is going to be any – I don’t think this year becomes a point of bottoming out, Brendan.

Great. And then, Tim, you touched on retention earlier, any commentary on hiring during the quarter, what you saw?

Well, we touched on revenue retention earlier in terms of hiring. We had a very aggressive target as we do for the remainder of the quarters and Q1. And we were little bit short of that. So we’re continuing to aggressively hire throughout the year.

Great. Thanks, guys.

Your next question is from Richard Davis from Canaccord. Your line is now open.

Hey, thanks. So one, I’ll take Brendan’s question one step further. So if you had 100% tax rate with your existing kind of add-ons. Would it be – would your revenues be about 50% higher than they are today, is that kind of a rough math, am I correct on that or is that in line or not?

I don’t think we could – yes, I think that’s probably kind of extrapolation too hard. We haven’t kind of really added it up that way. And I think there is a lot of factors that go into that. So I think we’re not going to slide down the TAM quite that far.

I will just make it up, that’s okay. And then the second question, I got a question from our investor, he said, there is always biotech company has been going public, there has been kind of burst in funding, a burst in business formation. You kind of touched on it how people jumping straight to the cloud, but correlate to that is not only are these firms I guess more likely is cloud, but is it also logical to assume that there might be a increase in the number of sales people to whom your software and platform would be useful, in other words the TAM gets bigger in that fashion, in other words think about that way? Thanks.

Yes, I think good question is, in that area, is TAM increasing because the dynamics of the industry is changing more innovation. Mat, why don’t you give you thoughts on that one?

Sure. So the normal cycle is that products get approved, new products get approved these biotechs to go public, they announce the new product and they release it. But then you also have products coming to the end of their patent expiration. And so that’s kind of the normal yin and yang in the industry. I don’t think that with the biotech boom, that’s necessarily going to change and all of the sudden, there are so many new approvals that the TAM changes materially. So we sort of – we don’t plan for that kind of TAM expansion. We think the market is – I mean there really has been pretty static in terms of the size, but it’s been shifting. Some of it has been shifting towards emerging markets. And in the large markets, we see a shift towards digital, digital promotion, digital strategies, multi-channel and so that’s why in our CRM business you’ve seen these announcements in more multi-channel areas. So approved email was the first, so we got out of face-to-face and we have the email channel. But the two that we announced last week, were the web channel or web channel and then screen sharing. So still CRM, still driven by sales reps in the middle of the conversation, but allowing them to traverse more channels and we see a lot more spend. I mean data something like 75% growth in spend in digital over the last few years. So, I think that’s more the important dynamic in the industry than the number of companies going public from a kind of revenue potential perspective for Veeva.

Thank you very much.

Your next comes from Tom Roderick from Stifel. Your line is now open.

Hey guys. Good afternoon. So first question I just want to ask is just on the geographic side of the equation, if the math I follow is correct. It still looks like the U.S. is growing about mid 40s year-on-year in growth. How does that sort of drive relative to where you’re putting investments in the sales organization. And should we think about that 40% plus growth rate being sustainable level for the U.S. for the foreseeable future. Maybe just help us think about geographically where you see the growth sort of splitting out? Thanks.

Yes, Tom, this is Tim. We certainly – well first of all, we don’t break out any regional guidance in terms of growth rates or opportunity although we see opportunity across all three regions and as we talked about last time, we just started do invest in Latin America, so the four regions we’re in. We are making investments across the board because we see a large opportunity in each one of those regions. From a growth rate perspective, obviously we’ve been in the U.S. for the longest. So, it is our largest both sales and capacity as well as revenue region for sure.

And, when you look at the traction was some of the newer products particularly Vault, what parts of the world are most attractive to you on that right now or perhaps better way phrasing it is where do you see less competition on the Vault side of the equation?

On Vault, we’re seeing it start in the U.S. first, that’s what we’ve traditionally seen. I think part of that is U.S. is a large market and a contiguous market in terms of countries where Europe is more smaller countries put together. So, I think you see that trend lot of times product starting off in the U.S. first and that’s generally what we see. And now, but we’re starting to see good pick up in Europe and in Asia particularly Japan, some in Asia Pac. So, I think that’s the pattern we’ve seen and will probably continue to see.

Great. Last one from me. I know that in the summer fall you sort of signal with the expectation that services would grow slower than prescription, that’s happened, but at the same time, the piece of that services growth is kind of picked back up. Is that fair to think about services as a decent leading indicator in that there right there is a good indication that indeed Vault is picking up traction will contribute to subscription more meaningfully? Or is that sort of encourage or lagging as an indicator on the services side?

Yes. So, Tom this is Tim. I would say that, I don’t think that you could characterize it as a leading indicator. I think well in Q1 we saw both strength in services revenue and subscription revenue. I don’t know if that characterizes as a long-term as a leading indicator. I think that, we do see very strong demand or did see, I should say in Q1 and into Q2 and Q3, strong demand for services and more we saw – and we see strong pipeline for our subscription as well. So, again, not a leading indicator, I think both are moving well and I see strong growth in both.

Great. Thank you guys.

Your next question comes from Jason Maynard from Wells Fargo. Your line is now open.

Hey, guys, good afternoon. I just wanted to maybe spend a little bit of time on the master data management network offering. And, get a little bit of color kind of on two factors, one would be are you finding customer receptivity and interest in this product taking off as you educate or people ready and willing to make the move as the product matures? And then the second point is, this is an industry as it’s been riddled with a lot of home ground to which yourself labor. And I’m curious what do you think from a pricing standpoint you can extract as a percentage of that over the long run because there is clearly a lot of non-software spend that goes in to sort of calculating the available market opportunity. Thanks.

As far as network picking off, I think there is a lot of excitement around network. Network is a very innovative new concept. So, I think people are really starting to grasp it now, it takes a while, we have our first early adopters going live. And we have our first seven figure deal in the U.S. and also that starts going live, people really starting to see it. So, we certainly have a lot of field activity around network. But, not everybody jumps at once in it, because network, that’s a significant item for the customers in terms of change management and in terms of wiring it in to their systems. But, I fully expect it to pick up. Now, in terms of let’s say what they’re spending today in terms of building these things, maintaining these things which is you’re right it’s software, but it’s more in that lots of services and hardware and all types of things and delays. What will happen is, we’ll get some of that and our customers will read the benefit to. So, overall they’ll certainly spend less with network, but we still think our network is a sizeable business.

Great. Thank you.

There are no further questions at this time. Thank you for joining today’s conference call. You may now disconnect.