Good afternoon. My name is Tashan, and I will be your conference operator today. At this time, I would like to welcome everyone to the Veeva Systems First Quarter 2018 Results Conference Call. [Operator Instructions]. I would now like to turn the call over to Rick Lund, Investor Relations Director. The floor is yours.

Good afternoon, and welcome to Veeva's Fiscal 2018 First Quarter Earnings Call for the quarter ended April 30, 2017. With me on today's call are Peter Gassner, our Chief Executive Officer; Matt Wallach, our President; and Tim Cabral, our Chief Financial Officer. During the course of this conference call, we will make forward-looking statements regarding trends, our strategies and the anticipated performance of the business. These forward-looking statements will be based on management's current views and expectations and are subject to various risks and uncertainties. Actual results may differ materially. Please refer to the risks listed in our earnings release and the risk factors included in our most recent filing on Form 10-K, which is available on the company's website at veeva.com under the Investors section and on the SEC's website at sec.gov. Forward-looking statements made during the call are being made as of today, May 25, 2017. If this call is replayed or viewed after today, the information presented during the call may not contain current or accurate information. Veeva disclaims any obligation to update or revise any forward-looking statements. We will provide guidance on today's call, but we'll not provide any further guidance or updates on our performance during the quarter, unless we do so in a public forum. On the call, we will also discuss certain non-GAAP metrics that we believe aid in the understanding of our financial results. A reconciliation to comparable GAAP metrics can be found in today's earnings release, which is available on our website and as an exhibit to the Form 8-K filed with the SEC just before this call. With that, thank you for joining us, and I will turn it over to Peter.

Thank you, Rick, and thanks everyone for joining us today. I'm pleased to report the new year is off to an excellent start with revenue and profitability well above our guidance for the first quarter. Total revenue was $157.9 million, up 32% year-over-year. Subscription revenue grew 33%, and non-GAAP operating margin was 32%. Once again, we saw remarkable execution by our teams across all areas of the business. Our first quarter results reflect the momentum that's building for Veeva, where we're becoming the strategic technology partner to life sciences spanning R&D and commercial. It's very exciting to see our customer and industry relationships continually evolve to more strategic levels quarter-after-quarter. We're also encouraged by our early progress with Vault QualityOne for companies outside of life sciences as we plant additional seeds for long-term growth. Turning to the highlights in the quarter. We're recently back from the Veeva Commercial Summit held a few weeks ago in Philadelphia. It was Veeva's largest event ever with more than 1,300 people in attendance. In fact, it's the biggest commercial gathering for the life sciences industry and has become the place to see the latest technology advances not only from Veeva, but also from our ecosystem of partners. We unveiled what will be the next generation of CRM for life sciences with the new Sunrise user interface and the new real-time architecture for Veeva CRM. Both the Sunrise UI and the real-time architecture are planned for availability in the second half of 2018. These are significant innovations for our customers and the industry as a whole. Customers appreciated our continued focus on their success and on innovation in CRM. We've previously spoken about our aim to be both the leader and liked by our customers and partners. As you know, these things don't always go…

Thanks, Peter. Q1 was another quarter of consistent strong execution. Total revenue was almost $158 million, up from nearly $120 million one year ago, a 32% increase. Vault represented 36% of total revenue, up from 29% in Q1 of last year. Subscription revenue was up 33% to $127 million from $96 million last year. Momentum across the product portfolio continues to drive our strong growth. In Q1, the subscription line also benefited from roughly $2 million of larger-than-normal onetime catch-up items. Services revenue came in at over $30 million, up 29% from almost $24 million one year ago. We continue to see exceptional strength in R&D Vault services projects and expect another strong services performance in Q2 with revenue equal to or slightly higher than Q1. In discussing the remainder of the income statement, please note that unless otherwise stated, all references to our expenses and operating results are on a non-GAAP basis and are reconciled to our GAAP results in the earnings press release that was posted just before the call. In Q1, our subscription gross margin was almost 81%, an increase of nearly 200 basis points from a year ago. This was driven primarily by the faster growth of our Vault products and our non-SFA Commercial Cloud offerings, which have a higher gross margin profile relative to our original SFA products. Services gross margin for the quarter was over 31% compared to roughly 24% one year ago. Over the long run, we believe that our services gross margin should be in the 20s, which aligns with our target utilization rate. Our total gross margin for Q1 was 71%, an increase of over 300 basis points from one year ago. This improvement was driven primarily by the rise in both subscription and services gross margins. Overall, our operating income…

[Operator Instructions]. Your first question comes from the line of Bhavan Suri with William Blair.

I just wanted to start off really quickly on the regulatory side. It seems like you're sort of gaining a lot of traction there. You've seen impressive growth now over the last couple of quarters. It feels like an inflection point, I guess. Peter or Matt, can you just add some granularity as to why that's gaining traction now? Obviously, the unified product suite helps. So what else is out there? Is it something external that's helping gain traction? Or is it just sort of the offering and sort of just the pressures around that? I'm just trying to understand why that's working now.

Bhavan, it's Matt. Yes, I think there's an internal thing and an external thing. So the internal thing that really started right around the time that you saw this inflection point is that we added 2 important applications to our regulatory document management solution. So we had just Vaults Submissions, and then we added registration tracking and submission archive. And by putting the 3 of those products together on a unified platform, the value proposition kind of exploded, and then we've since announced that we're going to do a publishing application as well. So from a product perspective, I think we created that inflection point by having the right product set. Externally, there is a new regulation called IDMP coming out of Europe that also created a bit of a tailwind for us. And so when you combine those 2, you see this kind of success that we've had in what is a really important and very strategic area for our life sciences customers.

That's helpful, Matt. And then just as you think about sort of the biologics, we've seen sort of ongoing increase in focus in biologics and really a focus on getting that product outside the market, patient enrollments. If you just think about sort of the ROI that your solution could bring to those, any sort of quantifying that sort of in terms of dollars or productivity or something along those lines?

I mean, we have Vault customers that have documented productivity gains in the 30% to 50% ranges. And some of that is because our products are modern, easy-to-use, more kind of running at the complexity of the things that make these processes hard. But a lot of it is also because they're coming off of really terrible systems that were designed and built in the '80s and '90s. And so when you compare what they have to do today to what we're delivering, it's not surprising to see 30%, 40%, 50% productivity gains, and that can be measured in all parts of the process. So that's what gives us such enthusiasm for what we're doing on the R&D side with Vault.

Got it. Can I squeeze one last one in? You look at the CROs, you guys are selling into CROs, obviously nice win, winning a top 8 CRO. But how do you view them in terms of their capabilities sort of to develop analytical tools given sort of the data they capture and leverage that? Sort of, as I think of -- could that be a potential competitor as you think about the analytics in the space and the data? Or do you think that's an avenue where they sort of standardize around your technology?

So those productivity gains that you would get if you're a sponsor, you would get equally if you're a CRO. And so there's been great interest in our solutions from CROs. And the quality of the data that gets into a system is improved if the system is easier to use, it's fresher, people are not writing things down in a note book and entering it later. So by having a better system, there are actually better data inputs. So that makes the data offerings that come from some of the CROs that much better. So I think that they see us as a partner and an enabler more often than a competitor.

And your next question comes from the line of Rishi Jaluria with JMP Securities.

First, I just wanted to start on the Vault outside of life sciences side. It's nice to hear there's another early customer win, and I know we're very early in the stage. But I just wanted to get an idea from how far away are we from starting to see referenceable customers within that side of the business to maybe see a little bit of momentum pick up there.

I'll take that one. This is Peter. We're doing well outside of life sciences. Quality management, that's where we're starting. It's a large and underserved market. We're bringing them the single solution we call Vault QualityOne. It's a combination of Vault QualityDocs and Vault QMS. And so things are going really well. Let me give you one example to show that. The QualityOne team, they just recently got back from a large trade show. It's called ASQ. It was in Charlotte this year, 2,500 quality professionals. And we were there, the QualityOne team was there showing our products, that people are seeing the expertise of our people. And it's really clear that customers, they want a true cloud solution from a great software company and that's what Veeva can offer. So the excitement is really there. And in terms of the reference selling, it starts incrementally, and it's even happening now to a small degree. We have some early adopters live. They're live with their first early implementations. We're just starting to get around a little bit. So the reference selling is happening kind of like how we expected it would be. I guess, the main point, too, is we're in this for the long term and we're doing well.

Okay. Got it. And on the EDC side of the business, can you give us a sense for how your pipeline with EDC looks right now? Or had there even been any kind of notable early customer signings or deals on that end of the business?

As for EDC, that's progressing really well. We're in discussions with a number of potential early adopters, and market reception has been really positive both from sponsors and CROs. Let me give you some color on why they're very positive on it. First, innovation has really been lacking in the EDC area. That's a fact. And we're delivering an EDC solution that's really easy to use, which is critical when you're supporting clinical sites if you want to do that in the right way. And then we're also bringing EDC along with CTMS, eTMF, Study Start-Up, all in a common cloud platform. That's not been done before. So that's a real game changer. So a combination of these things, creating a lot of enthusiasm and collaboration with the customers. We don't have early adopters signed as of this quarter, but that's normal. We're really focusing on the collaboration, and the signings of the early adopters will come. The main thing is we're set up well for the long term of EDC.

And your next question comes from line of Sterling Auty with JPMorgan.

You mentioned in your prepared remarks some further rollout of CRM by existing customers. At this point, what's left in terms of customers that have signed for either global rollouts or a certain number of seats but haven't fully deployed? So in other words, what's the backlog of seats still look like in CRM?

Sterling, it's Matt. So we're right around 2/3 penetrated of the 450,000 potential users that we've talked about. And so there's 1/3 left. The focus remains on getting those last large customers to complete their global rollouts. We made progress in a couple of those big accounts last quarter. But then a lot of the effort is on the add-on products where we really are becoming more and more strategic by picking off big important areas where they have just a mess, custom systems, a whole bunch of different providers, data in spreadsheets. I mean, that still happens with things like alignment management and event management around the world. So still effort to get more base users, but a lot of global effort to sell those add-ons because we're able to create a lot more value for customers.

Got you. And then one follow up. On the CTMS side, you mentioned some early wins here. Curious, the size of the types of companies or the geographies that you see the early adoption there.

Yes, so in CTMS, we did sign a first few and the pipeline looks like amazing. I mean, this is just a home run for us. We already know the clinical operations folks. We have over 150 Vault eTMF customers. CTMS is bought by the same guys, and we know that there's -- they're really yearning for innovation there. And you probably remember, Sterling, I actually started Siebel Clinical In 1999. That is still the market share leader in CTMS, if you can believe it. So the market is looking for something. And the customers that we've attracted, it includes top 50 pharma companies and includes small biotechs. It includes medical device companies. So there's really been interest from all over.

And your next question comes from the line of Richard Davis with Canaccord.

So thinking about QualityOne, it's -- basically, what I'm just trying to figure out is kind of how do you think about expanding it and in terms of -- is there a penetration rate, a revenue level, time-in-market benchmark that you would reach before you kind of expand. And I guess, the real derivative question is, the blessing and the curse of what you've built is that it's like a Swiss Army knife, you can do a lot of things with it. And so what you have to do as a senior manager is kind of keep your salespeople focused on things like that. So just basically, I'm just trying to kind of assess where you draw the lines, where -- if I was a salesman, what would you say, no, you can't do and what you can do and how you kind of keep your guys from running off on totally different directions.

This is Peter. That's a great question, and this is something Veeva's really honed the skill over the last 10 years, right? That's what we call the Veeva way, which is you build great business applications -- enterprise business applications, really run to the complexity and nail all the hundreds of business requirements. And then you have people really assigned to that with a focused set of guidelines, dedicated people, and you execute in a way that customer success comes first and then you do your reference selling from there. I think it's very clear, it's abundantly clear now that outside of life sciences, we're taking the same approach. It's -- outside of life sciences, it's not specific to a vertical, but it's specific to an application domain, in this case, the QualityOne application, which is a very specific application, very specific use cases, very specific buyer and our sales team is trained. That's what they go for. They ask those types of questions to those types of people. And if there's not a genuine need for that type of thing, then they move on. So I would say it's a discipline that we've honed incrementally over the last 10 years and gotten pretty good at it now. That's probably the best way to answer that, and It's very natural for us. This is just the way we execute, and it's working quite well.

No, that's helpful because you and I have seen companies not do that and have done work. So congratulations on that front.

Right. Right. Discipline and focus, I think that's one of our hallmarks.

And your next question comes from the line of Jesse Hulsing with Goldman Sachs.

This is Kevin Kumar on for Jesse. So operating margins during the quarter benefited from a strong sales and marketing leverage year-over-year. Just wondering, what's driving that and how will QualityOne impact that at least in the near to medium term?

Yes, Kevin, this is Tim. So I think as you heard in my prepared remarks, we did talk about a very strong revenue performance, and some of that was upside of some catch-up onetime items which would impact the metric you're looking at. I agree with what Peter just talked about in terms of hallmark. Veeva has been a very focused field approach that's created best-in-class sales and marketing metrics like the one you're talking about. The second part of your question was what again, Kevin? I'm sorry, I missed that.

Regarding QualityOne and kind of near-term, medium-term impacts to sales and marketing spend.

So QualityOne, as Peter just talked about as well, is in its early stage and we have a focused team there. I think it's early now to determine how that necessarily is going to impact the metric that you're specifically referring to that sales and marketing metric. But as Peter talked about, we'll absolutely do it in the Veeva way, which is we will be focused, we'll be disciplined and we'll go to the stage of early adopters first and move into reference selling. Obviously, the investment we're going to make in the QualityOne area is included in the guidance that I gave during my prepared remarks.

And your next question comes from the line of Stan Zlotsky with Morgan Stanley.

So the one thing that actually really stood out to me was the top 5 -- the win with QualityOne with top 5 CPG company. As far as if you're able to go and change any of the details there, but what are you replacing? With this product going eventually across entire organization, was there some incumbent that you're replacing? And for an engagement of that size, what kind of selling cycle was -- how long was the selling cycle rather? And was this customer also involved in the early beta testing of the QualityOne product? And then I have a quick follow up for Tim.

Okay. All right. The length of a sales cycle, in this case, this is an initial deal with a very large company. I would say the length of the discussions, roughly 9 months I would guess, give or take, and they start with some awareness. In this case, I think it was an awareness of this person inside the consumer packaged goods company of Veeva because of somebody that used to work in life sciences then went to work to this company and told another person about, hey, this Veeva. So it was very natural, organic. And that person knew somebody from Veeva and they reached out to us. So that's how that particular one started. And in terms of competitive, this is the first initial deal with the top 5 CPG company. Interestingly enough, it's actually a platform deal that's very close to QualityOne, but it's not actually QualityOne in this case. We're in there talking about QualityOne, and they ended up having a need that's very critical and very close to Quality in a similar group, but not exactly Quality. And that's not, I would say, the normal, but that's going to happen sometime. And then therefore, we vet this type of thing. Is this a good use for our platform? In this case, it was because it was adjacent to QualityOne. Also, it was a perfect used case where they had a lot of content to manage and a lot of data to manage. The Vault Platform is uniquely situated for that. The bigger opportunity, of course, in this company is with the QualityOne area, and that's something we'll work on over time. So that's sort of the color, but every particular used case is going to be different. Oftentimes, the customer success and reference selling is going to come into play. Now if you look at this particular customer, our opportunity in that customer is going to be determined also about the -- with the success of this early project because word of that is going to get around. So that's why we're always focused on the customer success for the early customers.

Got it. And then the platform, essentially, that was sold, that's just a traditional content management type of replacement that you're seeing there. right?

Actually, in terms of competitors there -- yes, sorry, I didn't address that second part of your question. Competitors there for the first platform projects were actually a variety of things, from content management platform to purpose-built applications from companies more on the quality and manufacturing side. So there was a whole list of maybe half a dozen or so competitors. It was then down to a few finalists, and then we were selected. So very -- this is a very important project for the customer, so this was a very thorough process. And then if you look at in this particular customer in the QualityOne area, they have multiple solutions across multiple divisions from multiple companies, some purchased, some built on content management platform. So if we were then eventually be successful there, we would replace more than 100 separate systems. But that's -- this is a long-term game. That's not going to happen overnight.

Got it. That's very helpful. And one for Tim. Tim, any FX impact in the quarter that we need to be aware of?

No, Stan, there wasn't any FX -- any material FX impact, I would say, in the quarter.

Got it. And the $2 million benefit that was on the subscription revenue line, when -- did it fall through directly to operating income and operating margins? Or were there some expenses along the way that had to be taken out as well?

Yes, I would say the vast majority, very material amount of expenses, Stan. So I would say you could consider those falling to the operating income line.

And your next question comes from the line of Ken Wong with Citigroup.

You guys mentioned Vault projects helped drive services upside. And I guess with that segment doing so well, what kind of runway do you see in terms of holding at this $30 million run rate for services?

Ken, this is Tim. Again, as you think about our services business, as we talked about in the past, it is lumpy. It is driven by large projects. We certainly see the demand across our product portfolio, which gives us confidence in terms of the value that the service business brings to our customers as well as the size that you could have modeled, if you will, from the guidance that we gave you 90 days ago for the annual guidance. So not an area where I would say this is a specific run rate from a revenue per quarter perspective, Ken. But certainly, strong momentum across the product portfolio and a strong pipeline specifically driven, as I said in my prepared remarks, around R&D Vault projects.

Got it. So we shouldn't necessarily think Vault is still in this kind of 80s, 90s growth rate that we should see services kind of stay here? It can fluctuate even if Vault is growing at the same clip?

I think services will be lumpy. In terms of the growth rate, I would reference you back to the growth rate we gave in the last call from Vault perspective where we talked about the subscription revenue line being at least 50% this year. And with Q1's performance, we're increasingly confident in that number.

Got it. And then you guys now have EDC out in the market, and you guys had mentioned hearing some good things from customers. Anything in terms of kind of the FUD that's out there with Medidata and whether or not that has kind of crossed customers' lines?

So Medidata sometimes walks into customer meetings with a lawsuit in their hand. So they're trying everything they can that's for marketing purposes. I think customers mostly see through that. My discussions with customers, EDC, CTMS, any of those clinical customers, gets past that stuff very quickly. And what we end up talking about is how many different technology platforms are there. So we say it's a unified suite. Other companies say they've got it, but it's more kind of a collection of things. And so the conversations very quickly get to how did you guys build eTMF, Study Start-Up, CTMS and EDC on one platform. And then we talk about what is really the business benefit of being able to model end-to-end processes without having to move users or documents or data from system to system. So if you were listening in to these conversations, that's exactly what we would have hoped when we architected this as the long-term product strategy in clinical.

And your next question comes from the line of Brad Sills with Bank of America Merrill Lynch.

I wanted to ask about the options for CRM. Is this a selling motion that the sales force has really been focused on? And is there an opportunity going forward more so for cross-selling into the base of some of these options like territory alignment with e-mail, et cetera?

Yes, so the commercial sales force has in their bag the base CRM product and these options. We generally would call them add-on products. So it's a lot of the same buyers. Sometimes, there could be some new buyers for like -- if it's alignment management, there could be someone who specializes there, but the IT team would be the same. If it's event management, that may span medical and marketing and sales, but there's going to be continuity between the people that would be involved in the CRM project or a medical CRM project. So we see a lot of the same people, a little bit more of marketing in medical than we did a few years ago because of things like Engage in medical CRM. But that's -- you should think of that as one commercially focused team from Veeva going out talking to the same customer and trying to deliver additional value by expanding the number of solutions that they use around Veeva CRM.

And your next question comes from the line of Tom Roderick with Stifel.

It's actually Parker Lane on for Tom. Wanted to go back to the large domestic Japanese pharma CRM win you announced earlier this year. I was wondering if you could comment on the progress of that rollout so far and whether or not you're seeing any pull-through in that domestic Japanese market and just how large an opportunity that can be for you guys.

Sure. Yes, so that project has continued well. They've deployed on time so far. It has definitely gotten the attention of other domestic pharma companies on the commercial side. The other thing that is happening with domestic Japanese pharma companies is they're starting to adopt Veeva Vault on the R&D side. So we announced one big deal -- I think there was a press release -- with Daiichi Sankyo. But we've actually had made great progress with others. So that domestic Japanese pharma industry feels like it's much more open than it was just a couple of years ago both on the commercial and the R&D side.

And your next question comes from the line of Brian Peterson with Raymond James.

So one for Peter and Matt. You've been pretty successful in expanding the product portfolio with a consistent methodology, starting with early adopters and then on to reference selling. As you've gone through a number of these new products, what's the average amount of time that a product typically spends in the early adopter phase? And how should we think about that with some of your recent products like EDC and QualityOne?

So time in the early adopter phase, that's going to depend from product to product. So I don't think there's a particularly formulaic answer I can give you. Some products are heavier in the business process. They take a bit longer to implement just because they're more detailed, maybe they're more detailed in the data migration, those types of things. So for example, I would say the registrations is one of those tremendous amount of data that often has to be cleansed before you can get it into a system. So that slows down the cycle a little bit, but that's okay. That's how that works. And in terms of some applications are more critical than others or more careful than others, EDC is an example where you're collecting patient data, data about patients for the first time. This is a very critical area, both for Veeva and for our customers. So I think that's going to be one where they're particularly careful about as they go into it, so that may have a little bit slower. But overall, it all evens out. It's all really the same, get the early adopter customers, get them live and happy in a reasonable timeframe that makes sense for them and for Veeva and then you start going into your reference selling.

Got it. Maybe one for Tim just on the services, again. Is there any timeframe that we should think about maybe partners taking a more active role with Vault and you might see a little bit of a decoupling between the subscription growth and the services growth?

Yes, Brian, good question. So the -- what we don't know yet is how that will evolve in Vault across the different product areas. But I would say that over the long run, we will see -- and we certainly have an ecosystem today that partners with us on both the commercial side and the R&D side, and I think over time that will take a bigger percent of the pie. But we don't have a sense for exactly what that timing will be across the product portfolio and across the different unified suite areas.

And your next question comes from the line of Scott Berg with Needham.

I got two quick ones. I'll start with one and then a follow up. First of all, on the top 20 pharma customer that selected the enterprise Vault contract, is that the first one? And how should we think about pricing on a deal like that? If someone just choose a, I don't know, Quality or CTMS or eTMF, how does pricing -- how should we think about pricing on an enterprise contract like that?

Yes, so that customer was already a Vault user. They have deployed Vault PromoMats, Vault MedComms, Vault eTMF globally already. So this expansion into doing QualityDocs and RIM is the first time we have a top 20 pharma company that will standardize all of their regulated content management across those 5 areas. Then this company also, by buying the RIM suite, also started with a data-centric application, Vault Registrations, at the same time. So it's kind of a landmark event that we have one of the top 20 pharma companies replacing all of their document on all of their legacy content management for their most important documents globally across every part of the company. It's exactly what we had hoped and what we had planned for 6 years ago when we launched the product. In fact, the first PowerPoint we ever put together for Vault was Vault as an enterprise platform. And while we have achieved that in many smaller companies, this is the first top 20 to do it. So obviously we're excited about that. The pricing of our products is by product. So we're not a company that gives you one price and you can use all the Veeva products. It's part of the model of making sure that every single one of our products is the absolute best of breed that is available. That requires that we get a fair price for each one of those products. So we don't bundle everything together, and very often these are separate sales cycles. But even when they come together, we still are going to have to sell ahead of quality and ahead of clinical and ahead of regulatory separately and those sales cycles and those products require a lot of specific focus.

That's helpful. My quick follow-up is as you're selling EDC, I mean, you talked about the combined platform with CTMS and eTMF. Do you envision the sales on that really to be all 3 products together? Or do you think EDC ends up selling on a stand-alone basis by itself?

Yes, I think we'll see both. I think there'll be a lot of deals that are only EDC. We just sell it right into the clinical data management team. But then remember, there's already 150 companies that have at least one of the clinical application from Veeva. So with them, you would think of that as a sweet deal, and then we have already entered into sales cycles where companies are looking at all of their clinical applications together. So I think we're going to see all 3 of those different scenarios play out over time.

And your next question comes from the line of Kirk Materne with Evercore ISI.

This is Tom Mao on for Kirk. Can you just talk a little bit about the pace of hiring in Q1 and given that OpEx seems to have come in a little bit below our expectation or maybe your expectation? Should the pace of hiring accelerate over the course of the year? And I have a follow up.

Yes, Tom, this is Tim. We look at the pace of hiring in Q1 as very good across all the areas within the business, including product, sales and marketing and customer success or customer-facing-related areas. What I would say about the Q1 results and the pace of hiring that impacted that was some of the hiring came in later in the quarter and some of it pushed a little bit into Q2. We do have a very -- we have a big opportunity in front of us. So we have an aggressive hiring plan in Q2, which was included in the guidance that I gave in my prepared remarks.

Got it. And just on 606, how do you think that would impact your margins just given how your commissions are amortized?

Yes, so Tom, to be clear, today we actually don't amortize commissions. We take them as incurred. As you identified with the new standard, that's a specific rule that we will comply to. So that particular area, we'll see an uptick in our margins. It's still early, obviously, as we're going through that process. So wouldn't quantify it at this point in time, but that specific thing will have an uptick to our operating margin.

And that concludes today's Q&A session. I'll turn the call back over to Peter Gassner for closing remarks.

Thank you, operator. I would like to thank everyone, again, for joining us today and a special thanks to the Veeva team for your exceptional execution; and to our customers, for your continued support and partnership. Thank you.

And this concludes today's conference call. You may now disconnect.