Operator: Your next question comes from the line of Tyler Radke with Citi. Your line is open.
Tyler Radke: Yeah, thanks for taking the question. So, if I look at the full year guidance, obviously a lot of the metrics stayed pretty unchanged. It did look like you slightly took up the commercial guidance. But in the quarter, it seemed like R&D, at least, outperformed consensus. So, I know it’s not big changes, but could you just talk to the modest changes you’re expecting for the full year outlook? And I guess to the extent macro is impacting the business, are you seeing it more in R&D versus commercial? Thank you.
Brent Bowman: Yeah. So — hey, Tyler. So, what we did is we increased our full year subscription guide by about $5 million. So that was driven in the commercial space. So what we saw in the commercial space is we saw some favorable linearity with some deals closed a little bit earlier. So that’s what you’re seeing kind of flow through to the full year. R&D, it basically played out exactly as expected. So, we’re executing well there, and the linearity of the deals are as expected. So that’s kind of what you see from a subscription perspective. The macro, again, no [serial] (ph) surprises. When we set out the year, we said it was going to be a continuation of what we have been seeing, so not better, not worse. And we saw that in the first half, and we expect that in the second half as well.
Tyler Radke: Got it. And maybe another follow-up for you, Brent. As I think about the billings guidance and your expectations for normalized billings versus calculated billings, I think last quarter, you were expecting more of a headwind on the normalized billings about a $8 million headwind. This quarter, it seemed like it maybe turned out to be a tailwind, if I’m reading those signs correctly. Could you just talk through kind of what you saw in the quarter from a normalized billings perspective that differed relative to your original guidance, and I guess if there’s any changes for the full year? Thank you.
Brent Bowman: Yeah. So, from a normalized billings, so just to make sure we’re level set, so what we’re doing there is for our renewal business, we normalize for changes in frequency. That’s when the customer goes from annual to quarterly or vice versa, and also for things like co-terms. So, for that renewal business, that’s what we’re focused on is taking that noise out of the equation. So, looking at normalize is the best way to look at the number. Now there’s always going to be movements between calculating that because what a customer may co-term or change that, so those term — billing term changes is what you’re seeing there. But that doesn’t impact the normalized number. That’s just an adjustment to calculate it. So, I wouldn’t be so worried about that $8 million versus $3 million. I’d look at the full year. The full year, we’re going at 15% and we feel good about it.
Tyler Radke: Great. Thank you.
Brent Bowman: Sure.
Operator: Your next question comes from the line of Brent Bracelin with Piper Sandler. Your line is open.
Brent Bracelin: Thank you. Good afternoon. Maybe first for Peter. I wanted to double click into the clinical data management space. I mean you talked about some pretty strong momentum with ePRO and RTSM. I think you framed that as an opportunity bigger than EDC. What are the catalysts that you think can drive broader adoption of ePRO and RTSM? Are we in an environment where this is still largely a push, or are we starting to see kind of customer pull?
Peter Gassner: Good questions. RTSM and ePRO, first, I would say, there are areas where — these are two areas where life sciences is going to be cautious. The randomization and trial supply management, that’s very, very critical. If that’s done incorrectly, you could have patient safety problems. You could wipe out a significant part of the investment in your whole trial. So they’re going to be cautious. The companies are going to try some trials first and see how it goes, rightly so. And in the ePRO area that patient reported outcomes, that’s patient-facing things. So again, they’re going to be extra sensitive on that. So, I think the way it will play out is, people experimenting at first trial at a time, and if they like it, they’ll try a little more.
And if they like it — what we see may happen over the coming years play out is they might look for an enterprise standard, for example, an enterprise standard for randomization and trial supply management, and they really haven’t done that before because of way the market dynamics have been. They can would pick randomization and trial supply management on a trial-by-trial basis and have multiple vendors almost as if they were using a contract research organization. Our innovation and the way we’re doing it, we’re set up for scale such that a company might say, “You know, hey, I’m going with Veeva with all my trial for randomization and trial supply management.” And in ePRO over time, that may also play out as well, where they could use is not selecting on a trial by trial who has the best ePRO for this or for that.
We would like to, over time, earn the right to have an enterprise agreement. That’s one for the ePRO. And then the second, we’re a big fan of what’s called bring your own device, meaning that the patient would use their own web browser or their own iPhone, their own Android and put their own app on it rather than the pharmaceutical company provisioning a specific iPad application. So, we’ve done a lot of things to make that happen and make that work really well, which, by the way, of course, you couldn’t do 10 years ago when ePRO started, but you couldn’t do that. So, we’re taking a new approach. We think it’s better — that will take time for it to work its way through the system and the company’s sponsors and CROs to get comfortable with that.
So, we’re taking an innovative approach and we hope to have innovative results.
Brent Bracelin: Got it. Very clear. And if you become the standard, obviously, a lot to gain there. My last question for Brent here. If I just look at net cash, it’s on pace to eclipse $4 billion for the first time in the second half of the year. You’re now looking at generating $1 billion in cash flow annually here. What are the plans for that excess cash position? Is there an opportunity to maybe accelerate your product plan that’s ambitious with more tuck-ins? How do you think about that $4 billion in the second half, going to $5 billion end of next year, and what the appropriate uses for that cash would be? Thanks.
Brent Bowman: Yes, sure. So, Brent, yes, so you’re right, we run a profitable business, and we’re generating a good amount of cash, and we’re at about $3.9 billion. But we’re focused on M&A. M&A is a use of cash. If we see the right acquisition, that’s what we’re going to do. But as always, in Veeva fashion, we’re going to be disciplined about it in our strategy, in our approach. And we have done a few deals in the past, and we’ve been successful in those deals. So that’s really our focus, Brent, right now is to really invest for growth and M&A is a big part of that.
Brent Bracelin: Thank you.
Operator: Your next question comes from the line of Jack Wallace with Guggenheim Securities. Your line is open.
Jack Wallace: Hey, thanks for taking my questions. Brent, first one for you, diving into the rest of your billings guide. Am I right by inferring here that it looks like there’s a little bit of a mix shift towards more subscription billings versus services and the read there would be from the services guide to the lower half of the prior range? And then within that, is that — if that is the case, is that related to some of the larger deals that you’re either signed this year or anticipate to sing later in the year that may need less of Veeva resources during implementation?
Brent Bowman: Yes, there’s a few moving pieces there. Like if you take a big step back on in the area here, services, was down a little bit. So that will have a small impact, a small impact on billings. But what you saw happen in Q2 was some favorability, right? So, the visibility we have to the business is still the same visibility. It’s just we closed some deals a little bit earlier. And that takes some of the pressure of that half when you look at the growth rate. So, we’re very happy with the visibility we have and the growth rates we see in that business, which is — in that metric, which is 15%.
Jack Wallace: Excellent, thanks. And then Peter and Paul, your question about the kind of competitive landscape in commercial. What have we seen since last quarter in terms of activity from Salesforce and essentially even IQVIA in and around the public migration taking place?
