VEEVA SYSTEMS INC

The following tables set forth selected consolidated statements of operations data and such data as a percentage of total revenues for each of the periods indicated:

Fiscal Year Ended January 31, 2024 and 2023

The following is a discussion of our results of operations for the year ended January 31, 2024 compared to the year ended January 31, 2023. For a discussion of our results of operations for the year ended January 31, 2023 compared to the year ended January 31, 2022, please refer to Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended January 31, 2023, which is hereby incorporated by reference.

Revenues

Total revenues for the fiscal year ended January 31, 2024 increased $209 million, of which $169 million was from growth in subscription services revenues. The increase in subscription services revenues consisted of $119 million of subscription services revenue attributable to R&D Solutions and $50 million of subscription services revenue attributable to Commercial Solutions. The geographic mix of subscription services revenues was 58% from North America, 27% from Europe, and 15% from other locations, primarily Asia Pacific, for the fiscal year ended January 31, 2024, as compared to 57% from North America, 28% from Europe, and 15% from other locations, primarily Asia Pacific, for the fiscal year ended January 31, 2023.

Professional services and other revenues for the fiscal year ended January 31, 2024 increased $40 million. The increase in professional services and other revenues was primarily due to new customers requesting implementation and deployment related professional services and existing customers requesting professional services related to expanding deployments or the deployment of newly purchased solutions, particularly within R&D solutions and increased demand for our business consulting services. The geographic mix of professional services and other revenues was 61% from North America, 32% from Europe, and 7% from other locations, primarily Asia Pacific, for the fiscal year ended January 31, 2024, as compared to 64% from North America, 29% from Europe, and 7% from other locations, primarily Asia Pacific, for the fiscal year ended January 31, 2023.

Since February 1, 2023, our master subscription agreements that govern multi-year orders generally included a termination for convenience right for our customers. In the fiscal year ended January 31, 2024, the addition of termination for convenience rights in such master subscription agreements changed the timing of revenue recognition for such orders governed by these master subscription agreements and reduced our revenue for the fiscal year. In addition, certain of our customer contracts include an annual inflation adjustment, which raises the price to each customer upon renewal by the lower of 4% or the Consumer Price Index (All Urban Consumer, U.S. City Average, All Items Index) published by the U.S. Bureau of Labor and Statistics for the month of August of the prior calendar year.

Cost of Revenue and Gross Margin

Cost of revenues for the fiscal year ended January 31, 2024 increased $68 million, of which $33 million was related to an increase in cost of subscription services. The increase in cost of subscription services was primarily due to an increase of $12 million related to computing infrastructure costs, the majority of which was provided by Amazon Web Services and an increase of $7 million in costs of delivering our data solutions. We expect cost of subscription services to increase in absolute dollars in the near term due to increased usage of our subscription services and increased data costs related to our data solutions.

Cost of professional services and other for the fiscal year ended January 31, 2024 increased $35 million, primarily due to employee compensation-related costs. The increase in employee compensation-related costs is primarily driven by merit increases and continued investment in professional services resources.