AI News, CRM Stock: Is It A Buy Right Now? Here's What Earnings ... artificial intelligence

Press Release Details

SAN FRANCISCO, Aug. 28, 2019 /PRNewswire/ -- Salesforce [NYSE: CRM], the global leader in CRM, today announced that for the fourth consecutive year, Salesforce has been named a Leader by Gartner Inc.

The platform must have out-of-the-box capability or the APIs to support a self-service, interactive commerce experience that includes: storefront, product catalog navigation, product pages, shopping cart, check-out, customer account.

The commerce product must support, out of the box, the ability to search for a product, add products to a cart, and fully price an order inclusive of product, customer- and order-level discounts or promotions.

About Salesforce Commerce CloudSalesforce Commerce Cloud is a leading commerce platform that empowers brands to unify customer experiences across all points of commerce, including mobile, web, social and store.

Founded in 1999, Salesforce enables companies of every size and industry to take advantage of powerful technologies—cloud, mobile, social, internet of things, artificial intelligence, voice and blockchain—to create a 360-degree view of their customers. For more information about Salesforce (NYSE: CRM), visit: www.salesforce.com.    Any unreleased services or features referenced in this or other press releases or public statements are not currently available and may not be delivered on time or at all.

Veeva Systems Inc (VEEV) Q2 2020 Earnings Call Transcript

Veeva Systems Inc (NYSE:VEEV)Q2 2020 Earnings CallAug 27, 2019, 4:30 p.m. ET Operator Good afternoon, my name is Chantal, and I'll be your conference operator today.

Please refer to the risks listed in our earnings release and the risk factors included in our most recent filing on Form 10-Q, 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.

This customer has been using core CRM globally for many years and recently decided to expand their Veeva relationship to include events management in more than 90 countries over time.

This quarter, a newly independent top 20 medical device company, standardize on Vault across the organization, including clinical, quality, regulatory and commercial.

With the ability to start from a clean slate they chose vault because it's the only solution to provide best in class application suites on a single modern cloud platform.

Year-over-year growth benefited from particularly strong bookings in the first half of the year and from a 190 basis points of tailwind from 606 due to the recognition of unbilled revenue from multi-year orders with ramping fees.

We continue to see strong profitability in Q2, non-GAAP operating income came in about $104 million, a 39% operating margin above the high end of our guidance.

We made good progress investing in the business with a record hiring quarter approximately 180 net new employees joined Veeva in Q2, bringing our total headcount to 2,827 up from 2,376 one year ago.

Looking ahead, we expect calculated billings of roughly $185 million in Q3, and roughly $1,135 million for the full year, which is a $15 million increase from the high end of our guidance provided last quarter.

This increase was driven by our performance in cash from operations, which came in at $100 million and included $17 million in excess tax benefit related to equity compensation.

Non-GAAP operating income of $103 million to $104 million and non-GAAP net income per share of $0.54 to $0.55 based on a fully diluted share count of approximately $159 million.

We expect subscription revenue to be in the range of $871 million to $874 million and within that we now anticipate commercial cloud subscription revenue growth between 13% to 14% and vault subscription revenue growth of at least 40%.

For fiscal 20, we expect non-GAAP operating income of $401 million to $404 million a margin of about 38% roughly a 100 basis point increase from our previous guidance.

Coming off of a record hiring quarter, we plan to continue investing for customer success and future growth with an aggressive hiring plan for the remainder of the year.

We are now targeting non-GAAP net income per share for the year between $2.11 and $2.13 based on a fully diluted share count of approximately $159 million.

I guess I just kind of wanted to start off around Nitro and Andi-adoption, what are you guys necessarily hearing from customers and how is the implementation process going on, it looks like you're now projecting cloud growth of 13% to 14% for the year, how much of this is kind of attributable to the Nitro and Andi-adoption?

Last quarter we talked a lot about some of the early customers that we had, who were on stage at our big summit event and they were talking about their implementation now they've been live for a period of time and that's going extremely well, so the product is certainly working in the early market, I would say we're feeling a little bit of headwind from some of the andi-competitive behavior from IQVIA, so some of the same behavior that they've demonstrated with network there also demonstrating with my Nitro.

would say with Andi, we are focused on getting the product to the right level of maturity and also getting some of those early customers kind of signed up and life, this is still early market -- early days really for both Nitro and for Andi, so from a contribution standpoint it's going to take some time before their material and meaningful impact from a contribution perspective.

So it certainly has the potential to have an impact on how we go to market and also more importantly the types of relationships that pharma companies have with their suppliers, we haven't seen any of that yet, drug pricing is has the potential to have a very significant impact across the industry, it would affect all suppliers, Veeva being some of the same -- in that same grouping.

I'd also say that as they have more pricing pressure and as they have more cost pressure, the balancing side of that, that may create a tailwind is the fact that companies often looked at technology to try to drive efficiency.

So we're doing well in features and in fact in some cases, we're really getting out ahead of things because we're taking a fresh approach and since you asked about a product, I'm going to give you a detailed product answer, because I like that stuff.

Now as medicines and therapies have been come more complex is becoming more important to collect qualitative medical assessments from physicians from third parties physicians who are assessing the data points, that's been an afterthought in medical device in CDMS systems for many years and because there is no innovation in the market that just persisted now when Veeva comes out, we actually put excellent features in for that.

First, CRM, we are seeing our enterprise customers expand into their regions faster than expected, so that expansion is continuing to happen and we'll continue to see a bit more of that in the enterprise side.

So these, I think [Phonetic] companies that are pre-commercial a lot of the net new wins here or pre-commercial companies and they're launching their first product and what they want to do is they want to launch and have the most successful launch based on modern technology.

I would also point to a few of the add-ons that are kind of outperforming what we'd expected so engage is one area where a number of enterprise customers have began global expansions on engage that will take time that will happen over months if not years, but we're seeing that trend continue where they're able to demonstrate results and build out that business case and we've also seen great performance better than expected with approved email and also for open data.

Number one, we have a very strong university hiring program, we call generation Veeva and as you can imagine, typically you will see in Q2 and sometimes it's still a little bit into Q3, but mostly in Q2 is more hiring a lot of folks into that program both on the engineering side, and the consulting side and that has been a focus of ours over the last couple of years as our thesis is we really want to continue to grow Industry Cloud Expertise and we can do that from the University folks as they grow in the company here at Veeva.

Secondly, and this may get to your wage inflation question as well Sandy, well we've done a very nice job I think is we've opened up new hiring markets for us or focused more of our energy on newer hiring market.

So obviously Pleasanton in a Greater Bay Area is a very strong market for us and we continue to focus here, but we've also over the last couple of years, really focused on Toronto in Columbus, as other areas where we're finding both products people, some customer service people and some back office people as well.

In engineering you're competing against tech companies in the field for general sales positions you may compete against all tech companies and then in some of our domain specific areas like strategy, yes, they were competing against other life sciences specific company, so it's always the same, right, you have to compete -- if you have the best team that's where you get the best company.

Peter, I was just wondering if you could talk a little bit about the outside of Life Sciences, are they I'll ask business just in terms of referenceability and kind of where you are there and what your thoughts might be around sort of upping the sales motion, if you are getting closer to referenceability.

In terms of 606 as you know, we get a little bit of a revenue uptick, given the new revenue guidance around unbilled revenue of multi-year deals that have ramping fees and that are non-cancelable.

So really at the end of the day it boils down to the mix of those types of deals, and there are a number of -- we're in the early days of Vault, which is where we see these and so there is certainly an opportunity where those types of deals and/or the mix of those deals either continues in a steady way or grows or contract, so it's not something we specifically forecast.

And -- but we really haven't seen any change in the market when we look at CDMS, it's really about building the best product, getting customers, giving them live and happy and successful and really innovating and the market.

As it relates to duration it really becomes a mix of the deals that we closed in any particular quarter and it can change based upon when the customers renewal date is and depending upon the length of the add-on order.

AI it's a long-term trend, I remember when I was getting my computer science degree in the late '80s is the early days of AI and its continued and it's getting more useful and impressive as they go on.

So should I think of Mule as just kind of a way to grease the skid and help life science companies get that data into Nitro more quickly and easily just some thoughts around how that fits from a technology perspective.

So there's different mechanisms on getting Nitro data into Nitro that, think of that separately as our customers are expanding their vault footprint and getting more and more vault applications and really kind of these mission critical areas.

So what we look at, we think of the new soft connector as a way to make those integrations -- our seamless -- more seamless faster easier and easier for customers to support and maintain over time.

I think as Peter and the Board and I look for the key attributes of our replacement, if someone who as I think I've tried to build is can be a really good business partner to Peter to the leaders within the company and can connect to the Board as well.

I would love to kind of hear your perspective on what you expect or what we should hope or out of Tom joining, and maybe it's first 90 days at Veeva, especially given that the R&D summit is coming out in the next week and a half, two weeks.

Paul Chamberlain -- Director Yeah, Tom, is joining next month, and he is quite accomplished veteran brings a lot of customer relationships and just knowledge of operating at scale teams of thousands of people and revenues into the billions that had Accenture.

If you bring in a new clinical data management system that said there integrations to write and other testing and validation to do because for a while for a considerable period of time, you'll be running multiple systems.

As we think about product roadmap for Vault maybe over a three year period or so, should we expect new efforts to predominantly stay within Life Sciences or are we getting to the point where the suites pretty built out, so maybe we start to see more in new verticals and I want to be clear, I'm not asking about sales execution opportunity.

Well, there is a history, I think of honestly, what I believe is there is a history of underestimating the potential inside of life sciences and I saw that in 2010, I saw that in 2015 and now as we approach 2020, I also see that.

So I think a lot of our expansion can still come inside of life sciences, I think we're actually relatively early in the Industry Cloud for life sciences as surprising is that would seem, now some proof of that is in, OK look, the clinical data management area for us is brand new, the safety area is brand new, but there are more things that can be done in life sciences, especially as we accumulate more and more data about life sciences.

Now if you get into the product area, I'm really excited about clinical data management and safety, there is new areas that are just super ride for innovation and very early and I'm excited about a resurgence in what we can do in commercial cloud and some innovation we can bring in there.

Peter Gassner -- Founder, Chief Executive Officer But overall, you know it's -- I'm really excited about the mojo of the company and that's created by the people coming into the company in the common culture where people can work together and enjoy at that greater scale.

Tim, just again to extend my congratulations on the retirement here certainly well-earned great run and you will be missed just drilling on down into the commercial cloud growth, I mean we're seeing here now, the second quarter of accelerating growth there, what's driving the improving visibility you guided up for the full year here a little bit on the growth profile there, are these engage and event management rollout big enough to kind of drive a sustained improvement in growth there or should we think about these things is kind of a couple of quarter rollouts that kind of will then kind of roll off.

Yes, we're very pleased with what we're seeing in commercial cloud, I would say that the recent uptick in growth that we've seen in the first half of this year, which is, you've seen it impact our guidance is mainly due to particularly strong bookings in the last few quarters.

And I would echo what Paul said earlier, in terms of where we're seeing the strength from a bookings perspective, it's in CRM enterprise expansions that are growing faster than we had anticipated, it's in SMB wins that are better than we had anticipated.

And then the second question was on your operating cash flow guidance Tim, which was for the full year, ex the tax benefits, a little bit above our estimate and I calculate first half operating cash flow growth of the super strong 40% in the first half, so congrats on that performance and I'm just wondering what it's from, is it just a function of the operating margin outperformance flowing into the operating cash flow line or is there a little something extra.

And I guess I would be remiss for not calling out my team as well who have done a phenomenal job with the help of the field team and certainly the help of the customer success that we've driven over time to really have another strong collections quarter and really have an amazing collections first half, so.

We have our early adopters there, the product is very, very early and they're all in the consumer packaged goods, which is where claims is generally going to be targeted and it's going well, but early with that we're implementing with the first customers iterating the product.

I think one, well three probably one our customer success the innovation of our products and the expanding product portfolio, which gives us the opportunity to make a larger impact or create a larger impact for our customers.

And Peter mentioned that in his quote, I mean, we're very proud and excited about that milestone and the team has done a phenomenal job of executing over the last five years -- four years since we gave that target.

Just wondering if that's a factor of increased demand from the market or is had there been specific features that have finally come out that people have been looking for and being more receptive to really spur that growth and double the customer count over last year?

So, I think what we're seeing here is over the last couple of years, a lot of customers trying and learning and figuring out how it works and how customers are going to respond and what works well and what's some of those best practices are and they have since learned enough to build that business case and increase the demand.

And then I would say the other thing that's driving it is, just the shift in our customers' mindset to get to digital faster to evolve, to put in place the infrastructure to support their selling models of the future, all of our customers are in some respect talking about how, what their future selling model is going to look like, in digital is becoming a bigger and bigger piece of that and what we're trying to do is make sure that we enable a lot of that shift in the market with a lot of innovation.

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