Veeva Systems (VEEV) risk factors, FY2025 10-K

Risks Related to Our Business

1. 01If our security measures are breached or compromised or unauthorized access to customer data is otherwise obtained, our solutions may be perceived as not being secure, customers may reduce or stop their use of our solutions, and we may incur significant liabilities
2. 02Veeva Systems Inc. | Form 10-K
3. 03The markets in which we participate are highly competitive, and if we do not compete effectively, our business and operating results could be adversely affected
4. 04If our newer solutions are not successfully adopted by new and existing customers, the growth rate of our revenues and operating results will be adversely affected
5. 05Our revenues are relatively concentrated within a small number of key customers, and the loss of one or more of such key customers, or their failure to renew or expand user subscriptions, could slow the growth rate of our revenues or cause our revenues to decline
6. 06Defects or disruptions in our solutions could result in diminished demand for our solutions, a reduction in our revenues, and subject us to substantial liability
7. 07The migration of our CRM customers to our Vault CRM applications built on our own Veeva Vault platform could cause business disruptions for customers, lead to the loss of our customers to competitors, and adversely affect our operating results
8. 08Our sales cycles can be long and unpredictable, and our sales efforts require considerable investment of resources. If our sales cycle lengthens or we invest substantial resources pursuing unsuccessful sales opportunities, our operating results and growth would be harmed
9. 09Sales to customers outside the United States or with international operations expose us to risks inherent in international sales
10. 10We have an office, vendors, and customers in Israel and many of our customers in other regions also have operations in Israel. Armed conflicts, terrorist activities or political instability involving Israel or other countries in the region may cause business disruptions and adversely impact our results of operations
11. 11Difficulty attracting and retaining highly skilled employees could adversely affect our business and efforts to attract and retain such employees may increase our expenses
12. 12Further, it takes time for newly hired employees to become productive. With respect to sales professionals, for instance, even if we are successful in attracting highly qualified personnel, it may take six to nine months or longer before they are fully trained and productive
13. 13Catastrophic events could disrupt our business and adversely affect our operating results
14. 14Acquisitions could divert our management’s attention, result in additional dilution to our stockholders, and otherwise disrupt our operations
15. 15which could, among other things, delay or prevent us from completing a transaction, subject the transaction to divestiture after the fact, or otherwise restrict our ability to realize the expected financial or strategic goals of the acquisition
16. 16Changes in our senior management team or other key personnel could have a negative effect on our ability to execute our business strategy
17. 17Our business could be adversely affected if our customers are not satisfied with the professional or technical support services provided by us or our partners
18. 18Our estimate of the market size for our solutions we have provided publicly may prove to be inaccurate, and even if the market size is accurate, we cannot assure you that our business will serve a significant portion of the market

Risks Related to the Principal Industry We Serve

1. 19Nearly all of our revenues are generated by sales to customers in the life sciences industry, and factors that adversely affect this industry, including mergers within the life sciences industry or regulatory changes, could also adversely affect us
2. 20Our solutions address heavily regulated functions within the life sciences industry, and failure to comply with applicable laws and regulations could lessen the demand for our solutions or subject us to significant claims and losses
3. 21Increasingly complex regulations relating to privacy, data protection, and cybersecurity are burdensome, may reduce demand for our solutions, and non-compliance may impose significant liabilities
4. 22Incorporating AI in our solutions may result in reputational harm and increased liability

Risks Related to Our Reliance on Third Parties

1. 23If the third-party providers of healthcare professional and healthcare organization data and prescription drug sales data do not allow our customers to upload and use such data in our solutions, the demand for our solutions may decrease, and our business may be negatively impacted
2. 24We are currently dependent upon the Salesforce platform to deliver Veeva CRM
3. 25In addition, current or potential customers may choose a competitor, such as Salesforce or IQVIA, or build their own custom solutions on the Salesforce platform rather than buy from us. Any of these events may have a material adverse impact on our business, operating results, and financial condition
4. 26Our solutions utilize open-source software, and any failure to comply with the terms of one or more of these open-source licenses could adversely affect our business

Risks Related to Our Financial Performance, How We Contract with Customers, and the Financial Position of Our Business

1. 27Our historic growth rates of total revenues and subscription services revenues should not be viewed as indicative of our future performance
2. 28Our results may fluctuate from period to period, which could prevent us from meeting our own guidance or security analyst or investor expectations
3. 29As our costs increase, we may not be able to sustain the level of profitability we have achieved in the past
4. 30Our revenues and gross margin from professional services fees are volatile and may not increase from quarter to quarter or at all
5. 31Because we recognize subscription services revenues ratably over the term of an order for our subscription services, our short-term results of operations may not reflect a decline in sales and may not be indicative of future results
6. 32Deferred revenue and change in deferred revenue may not be accurate indicators of our future financial results
7. 33Currency exchange fluctuations may negatively impact our financial results
8. 34Taxing authorities may successfully assert that we should have collected or in the future should collect sales and use, value-added or similar transactional taxes, and we could be subject to liability with respect to past or future sales, which could adversely affect our results of operations
9. 35Unanticipated changes in our effective tax rate and additional tax liabilities, including as a result of our international operations or implementation of new tax rules, could harm our future results
10. 36If we are unable to implement and maintain effective internal controls over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports
11. 37We have broad discretion in the use of our cash balances and may not use them effectively

Risks Related to Our Intellectual Property

1. 38We have been and may in the future be sued by third parties for alleged infringement of their proprietary rights or misappropriation of intellectual property, and we may suffer damages or other harm from such proceedings
2. 39Any failure to protect our intellectual property rights could impair our ability to protect our proprietary technology and our brand

Risks Related to Our Status as a Public Benefit Corporation, Our ESG Disclosures, and Ownership of Our Common Stock

1. 40Our status as a Delaware public benefit corporation may not result in the benefits that we anticipate, requires our directors to balance the interest of stockholders with other interests, and may subject us to legal uncertainty and other risks
2. 41Evolving expectations and disclosure requirements related to environmental, social and governance matters expose us to risks that could adversely affect our reputation and performance
3. 42Our common stock price has been and will likely continue to be volatile
4. 43We do not intend to pay dividends on our capital stock for the foreseeable future, so any returns will be limited to changes in the value of our common stock
5. 44Provisions in our certificate of incorporation and bylaws and Delaware law might discourage, delay or prevent a change in control of our company or changes in our management and, therefore, depress the market price of our common stock
6. 45Our bylaws provide for exclusive forums for certain disputes between us and our stockholders, which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees