Peter Gassner: Yes. Great question about the clinical data software. You have EDC is the core of it, the first thing and then you have others CDB, we have Study Training. We have ePRO and RTSM. Customers are generally going to be very conservative in that area. So really, we have to innovate first and then they will come along because this is — these are their studies, right? And they plan these studies for a long time. So there’s going to be pretty conservative. So I think it’s an area that starts slowly, but then for the same reason why it starts slowly, and then it develops momentum. And if customers end up having something that they really like, boy, will they stick to with it. And right now, the industry is not well served.
If you look at the sort of, I would say, the professionalism of the ePRO applications out there or the RTSM applications out there. They’re not of the level of professionalism of what is Veeva doing. Our products are getting there. So that’s one thing which is both the products and the services. And then I think the real code is the integration, the process integration, for example, between our RTSM and our ePRO had a discussion last week with some clinical leaders at a top 20 pharma. And when we were discussing the integration that we will do between our RTSM and our EDC and how that affects the prescreening — the screening process and the ability to get patients into the right trial, this can be transformational. In some cases, when that workflow breaks down, you might lose 6 months exclusivity on a blockbuster product because of the delay of a pivotal trial.
That’s money you never get back. That’s the criticality of these systems, and it causes a little bit of conservatism, right? Well, so I might use your RTSM who else is using your RTSM for all of your studies? Well, nobody is yet, you can be first. Well, hey, I’ll just — I’ll wait and see on that. So it’s that type of thing. Hard to get in there, really hard to get out if you’re doing a good job.
Operator: Your next question comes from the line of Jack Wallace from Guggenheim Securities.
Jack Wallace : I just wanted to ask about Compass and the event around clients migrating to the Vault CRM platform. How much does other logical upsell here? And is it fair to think about the migration event being a natural upselling opportunity?
Peter Gassner: It’s a great question, Jack about Compass and Vault CRM. I would say they’re not the same at all. They’re quite disconnected. Compass in many ways, is a much more strategic decision because that really affects how you apply your resources and in Compass we’re reinventing how you can do data. So it’s a much more strategic decision. It’s related to analytics and its purchase brand level for brand analytics. So it has these dynamics. Also, for example, Compass is something we sell to companies that are 2 years sometimes away from having a field force. They’re doing their planning involved of their market potential. So it’s quite disconnected versus where CRM is, hey, now you’re ready to launch you just need a system with the full functionality, Veeva, that’s kind of a soft problem.
So there would be the CRM playing into that. On Compass, well, gosh, we’ve been using IQVIA for 20 years. You’re coming with a different approach. We’re all, hey, they’re really out of phase, and they don’t depend on each other. Now it’s nice to have multiple products to be able to bring in to a customer so you can provide the full commercial solution, be the CRM, commercial content, Crossix for your media measurement, Link for your deep data, Compass. So we have a lot of things that can fit together. And especially for a smaller company, they will look for that partner, hey, I just — I need to get all this in a hurry. But in general, those things are linked together, and I wouldn’t view Vault CRM as a catalyst for Compass. Catalyst for Compass is going to be its product excellence and how well we do on our launch of Prescriber and National, anyway.
Jack Wallace : That’s helpful. And then one for Brent around billings. Just to put a bow around the change in terms and cadence of billings, help me with the math here. If we had a $12 million headwind in the third quarter, does that mean about $6 million of billings from the third quarter slip into the first half of next year? And then is that number of, say, $6 million to $9 million from the fourth, so add all up $12 million to $15 million or so that just due to billing cadence got pushed into ’25?
Brent Bowman: Yes. I’m not going to break down to the specific numbers, but I can give you like the directional numbers around this. So I said about half the services. And then there is the duration piece of it, right? So then the balance is split pretty much between 2 buckets with a little bit of FX. So that duration piece, that’s a — that’s just a matter of over time, when it’s going to build. So we have more quarterly billers than we expected for our new business. So that’s about 25%-ish of the residual. And then the other piece was literally the timing of deals. Again, some of that was deals that pushed out from the back half of the year into the first part of the year. So that’s at the high level how to break down the buckets and that’s been contemplated in our 2,750 revenue number for fiscal year ’25.
Operator: Your next question comes from the line of Stan Berenshteyn from Wells Fargo Securities.
Stan Berenshteyn: First, Peter or Paul, in the prepared remarks, it was mentioned you had solid bookings under Crossix including brand expansions. I recall that process has seen some choppy demand in prior quarters. Is the reason that you’re seeing a pickup of activity on this front?
Peter Gassner: I guess the reasons are some is just timing, how things laid out. Also just solid execution by the Crossix team on the product and on the sales and marketing. And I think some of our competitors also last year sort of maybe oversold what they could actually deliver. So we had a few potentials where the customers last year went for some things because they were promised quite a few things actual delivery didn’t match. And so they, in some cases, went — came back to Crossix. In some cases, they went to Crossix for the first time. So really to solid execution and some timing.
Stan Berenshteyn: Got it. And then maybe one for Brent. Services gross margin in the quarter, I think, was the highest in 8 quarters or so. Is there anything to call out here besides hiring? And how should we think about the progression going forward?
