VEEVA SYSTEMS INC

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 unaudited condensed 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 interim financial reporting and include the accounts of our wholly-owned subsidiaries after elimination of intercompany balances and transactions. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2025, filed on March 24, 2025. There have been no changes to our significant accounting policies described in the annual report that have had a material impact on our condensed consolidated financial statements and related notes.

The unaudited condensed consolidated balance sheet as of January 31, 2025 included herein was derived from the audited financial statements as of that date. These unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly our financial position, results of operations, comprehensive income, and cash flows for the interim periods but are not necessarily indicative of the results of operations to be anticipated for the full fiscal year ending January 31, 2026 or any other period.

New Accounting Pronouncements Issued and Not Yet Adopted

Improvements to Income Tax Disclosures

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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. Retrospective application is permitted. The adoption of ASU 2023-09 will modify our disclosures but will not have an impact on our financial position or results of operations. The Company will adopt ASU 2023-09 in the fiscal quarter ended January 31, 2026 and is assessing the appropriate transition method.

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. Retrospective application is permitted. We are currently evaluating this ASU to determine its impact on our disclosures.

Targeted Improvements to the Accounting for Internal-Use Software

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which modernizes the recognition and capitalization framework for internal-use software development costs in order to reflect current software development practices. The amendments also require Subtopic 360-10 disclosures for all capitalized internal-use software costs. This new standard is effective for our fiscal year beginning on February 1, 2028 and interim periods within that fiscal year and may be applied prospectively, retrospectively, or using a modified transition approach. Early adoption is permitted. We are currently evaluating this ASU to determine its impact on our consolidated financial statements and disclosures.

Note 2. Short-Term Investments

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

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

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):

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 such securities until maturity or a recovery of the cost basis.

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 October 31, 2025 (in thousands):

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):

Note 3. Deferred Costs

Deferred costs, which consist of deferred sales commissions, were $25 million and $26 million as of October 31, 2025 and January 31, 2025, respectively. Amortization expense for deferred costs included in sales and marketing expenses in the condensed consolidated statements of comprehensive income was $4 million and $12 million for the three and nine months ended October 31, 2025, respectively, and $4 million and $12 million for the three and nine months ended October 31, 2024, respectively. There have beenno impairment losses recorded in relation to the costs capitalized for any period presented.

Note 4. Goodwill and Intangible Assets

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

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

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

Amortization expense associated with intangible assets was $4 million and $12 million for the three and nine months ended October 31, 2025, respectively, and $5 million and $14 million for the three and nine months ended October 31, 2024, respectively.

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

Note 5. Fair Value Measurements

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

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):

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).

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 condensed consolidated statements of comprehensive income. Cash flows from such forward contracts are classified as operating activities.

For the nine months ended October 31, 2025, net realized and unrealized foreign currency losses on hedging were $7 million. The net realized and unrealized foreign currency losses on hedging werenot material for the three months ended October 31, 2025 and for the three and nine months ended October 31, 2024.

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

Note 6. Income Taxes

For the three months ended October 31, 2025 and 2024, our effective tax rates were 24.5% and 23.3%, respectively. For the nine months ended October 31, 2025 and 2024, our effective tax rates were 24.2% and 23.1%, respectively. During the three and nine months ended October 31, 2025, as compared to the same periods in the prior fiscal year, our effective tax rate increased primarily due to the indirect effects of the One Big Beautiful Bill Act (“OBBBA”), offset by increased excess tax benefits related to equity compensation.

Note 7. Deferred Revenue, Performance Obligations, and Unbilled Accounts Receivable

Deferred Revenue

Of the beginning deferred revenue balance for the respective periods, we recognized $581 million and $1,090 million in revenue for the three and nine months ended October 31, 2025, respectively, and $492 million and $914 million for the three and nine months ended October 31, 2024, respectively.

Transaction Price Allocated to the Remaining Performance Obligations

As of October 31, 2025 and 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 October 31, 2025, unbilled accounts receivable consisted of (i) receivables of $45 million primarily for revenue recognized for professional services performed but not yet billed and (ii) contract assets of $13 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, 2025, unbilled accounts receivable consisted of (i) receivables of $33 million primarily for revenue recognized for professional services performed but not yet billed and (ii) contract assets of $8 million primarily related to professional services performed but for which we are not contractually able to invoice until a future period.

Note 8. Leases

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

For the three months ended October 31, 2025 and 2024, our operating lease expense was $4 million and $3 million, respectively. For the nine months ended October 31, 2025 and 2024, our operating lease expense was $13 million and $10 million, respectively.

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

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

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

Note 9. Stockholders’ Equity

Common Stock

As of October 31, 2025, we had 164,342,871 shares of common stock outstanding.

Stock Option Activity

A summary of stock option activity for the nine months ended October 31, 2025 is as follows:

The options granted during the nine months ended October 31, 2025 were primarily made in connection with our annual performance review cycle. The weighted average grant-date fair value of options granted was $126.62 and $97.72 per option for the three and nine months ended October 31, 2025, respectively.

As of October 31, 2025, there was $481 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 2.2 years.

The total intrinsic value of options exercised was approximately $34 million and $114 million for the three and nine months ended October 31, 2025, respectively.

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:

Restricted Stock Units (“RSUs”)

A summary of RSU activity for the nine months ended October 31, 2025 is as follows:

As of October 31, 2025, there was a total of $122 million in unrecognized compensation cost related to unvested RSUs. This cost is expected to be recognized over a weighted-average period of approximately 0.7 years. The total grant date fair value of RSUs vested for the three and nine months ended October 31, 2025 was $70 million and $195 million, respectively.

Note 10. 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 is determined using the treasury stock method.

The following table presents the calculation of basic and diluted net income per share (in thousands, except per share data):

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

Note 11. Commitments and Contingencies

Litigation

On August 13, 2025, Veeva and IQVIA entered into a settlement agreement that resolved all ongoing litigations between Veeva and IQVIA. Prior to that, IQVIA and Veeva had been involved in a series of litigations since 2017, including IQVIA Inc. v. Veeva Systems Inc. (No. 2:17-cv-00177) and IQVIA Inc. v. Veeva Systems Inc. (No. 2:19-cv-15517). Under the terms of the settlement agreement, neither party paid damages to the other party and both parties agreed to dismiss with prejudice all claims and counterclaims currently pending. Accordingly, all claims and counterclaims were dismissed.

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 12. 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):

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-related charges, 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 13. 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):

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

Revenues by Product

We group our revenues intotwo 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 and Veeva Quality Cloud solutions.

Total revenues consist of the following (in thousands):