Jailendra Singh: Given some of the macro issues you, guys, talked about. I was just curious how our price increased conversations trending so far, especially in the environment when macro has gone a little challenging, making sure you still feel good about your 4% price increase expectations for next year?
Peter Gassner: I can take that one. overall, we’re not doing price increases we are doing — we keep up with the CPI, and we’re doing in a very customer-friendly way. So we’re capping that by 4%. And we’re doing that in arrears by giving customers at least 8 months’ notice depending on when their order form is. So no, it’s going well. And I definitely don’t view it as a price increase. It’s very predictable from Veeva. So the macro is not really affecting that.
Jailendra Singh: Then my follow-up is around the comment you had in your prepared remarks about data market and life science moving somewhat slower than the softer market, you called out anticompetitive behavior from one of your peers. Can you elaborate more on that? Is that something you have observed more recently after your push in this market? And how does those market dynamics impact approach and generally just pushing this market?
Peter Gassner: Yes. I called out the behavior of our competitor IQVIA. No, that’s not a dynamic. I’ve been aware of that for more than 10 years. And of course, IQ has been recorded multiple times for this. So it’s not a — it’s just not a new dynamic. I just felt in the prepared remarks to call it out. But in data, it can be a bit slower moving because of the conservative in that area, conservatism in that area. That’s understandable. And then the anticompetitive behavior of IQVIA also creates significant barriers there because let’s say the customer is using the IQVIA data for one data product, and we’re selling one data product. And our services are necessary to mix those 2 data products together to provide a solution for the customer as well.
IQVIA is not going to allow us to do that. They’re not going to grant, let’s call it a third-party agreement. So that’s what slows things down. But we’re making great progress, and it’s easier for a small company when they start up. So I think next year, you’ll see some smaller companies commercializing for the first time that just decide, look, I’m going to be IQVIA free for my whole life, and I’m going to start out that way. I don’t need to deal with that old stuff anymore. I think that’s going to happen, but it’s — that’s a long way from, hey, most of the top 20 using Veeva for most of their data products for most of their brands. That’s a that’s a 15-year journey.
Operator: Your next question comes from the line of Craig Hettenbach from Morgan Stanley.
Craig Hettenbach: Just following up on the Bayer and GSK commentary. Is there anything in particular about those customer relationships that made it logical for them to be early adopters on both CRM? And how are you thinking about the cadence for additional customers from an announcement perspective like next year?
Paul Shawah: Yes. quite good question. And every customer is unique. They’re all in their own different stages, whether that’s things related to their business or their pipeline or when they may have product launches. GSK and Bayer, we’ve had good, long-standing partnerships with both companies for a very long time. And they’re thinking, they both had this idea of leading thinking. We want to put the decision-making process behind us, and we want to start focus on executing. They were confident they did their due diligence. They very quickly became very confident in their answer and their approach, so they wanted to put a clear stake in the ground and make that decision and communicate it and now shift into execution mode. So I would say just a strong partnership.
We’ve delivered very well and consistently for them for a very, very long time. They trust Veeva. So they’re ready to move forward. In terms of other customers and the rest of the market, we’re certainly in conversations with the rest of top 20, all of the large enterprise companies, of course, are small and medium-sized customers. Many of those conversations have started. It’s not a mathematical thing. You won’t see — we know we have the next roughly 5 or 6 years, but it’s not mathematical. It’s dependent upon many different factors and variables. So I would think of it as we’re in that early summer stage right now, and then over time, we’ll start to see it ramp in. And some of these, you may not see announcements. I think the way to think about it is we’ll provide updates when there’s kind of a material update to give.
You may not see an announcement for every customer. But when there’s something material, we’ll kind of let The Street know.
Craig Hettenbach: That’s helpful. And then, Peter, you made a comment regarding the IRA in terms of smaller biotech innovation and that’s certainly and focus here. I’m curious just your larger pharma companies, any feedback you’re hearing from them, whether it’s maybe trade-offs they’re making as they kind of manage around this? Any feedback there?
Peter Gassner: Yes, they’re looking at that in terms of their product planning where will they invest, should they invest in that molecule, should they delay running a trial or accelerate running a trial. So certainly, it affects their planning. But pharma is good at that. They have to adjust to these factors, these government factors around the globe. And so I think they’re adjusting and it may become the new normal in a year or two. So no dramatic change is causing some adjustments.
Operator: Your next question call comes from the line of Charles Rhyee from TD Cowen.
Lucas Romanski: This is Lucas on for Charles. I want to ask about the development cloud and the subscription growth framework you guys have going forward. If I look back at the Investor Day slides, where you guys break out customers and products per customer. It shows that you guys are seeing fewer total products sold in the Development Cloud through fiscal first half. At the same time, you’re guiding to 22% to 23% growth in 4Q after accounting for the impact of TFC, which is a step down from 3Q and 2Q. You guys have noted that you’re not seeing an impact from macro on subs quite yet, but this is a notable step down in growth. Is this an indication that the segment is starting to mature a bit and that we think about this category growing at a more mature rate going forward? And then understand that we’ll get guidance at the next print, but is this 22% growth rate ex-TFC, a good jumping off point for R&D subs growth in fiscal ’25.
Brent Bowman: Yes. So to your point, we reiterated the fiscal year ’25 guide at $2.75 billion. So clearly, that factors the subscription and services and the mix underneath that. What we did see was timing when you talk about in the year. So some timing that impacted fiscal year ’24, it will have less of an impact on fiscal year ’25. But importantly, we have a long runway for growth in front of us. We’re very early days and across the portfolio, specifically R&D and to your point, we’ll get into the details in about coming days.
Operator: Your next question comes from the line of Brent Bracelin from Piper Sandler.
