Earnings Call Transcript - VEEV Q4 2023

Operator, Operator

Good afternoon, and welcome to Veeva's Fiscal 2023 Fourth Quarter and Full-Year Earnings Conference Call for the quarter and year ended January 31, 2023. As a reminder, we posted prepared remarks on Veeva's Investor Relations website just after 1:00 p.m. Pacific today. We hope you have had a chance to read them before the call. Today's call will be used primarily for Q&A. With me today for Q&A are Peter Gassner, our Chief Executive Officer; Paul Shawah, EVP, Commercial Strategy; and Brent Bowman, our Chief Financial Officer. During this call, we may make forward-looking statements regarding trends, our strategies, and the anticipated performance of the business, including guidance regarding future financial results. These forward-looking statements will be based on our current views and expectations and are subject to various risks and uncertainties. Our 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-Q. Forward-looking statements made during the call are being made as of today, March 1, 2023, based on the facts available to us today. 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 may discuss our guidance on today's call, but we will not provide any further guidance or update in our performance during the quarter, unless we do so in a public forum. On the call, we may 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 and in the supplemental investor presentation, both of which are available on our website. With that, thank you for joining us, and I'll turn the call over to Peter.

Peter Gassner, CEO

Thank you, Ato, and welcome everyone to the call. We had a strong finish to the year with results ahead of our guidance for the quarter and year. Thanks to great execution by the Veeva teams across all areas. We're early in the significant industry cloud opportunity, and we are executing well. It was a breakout year for clinical data management, and we saw great traction in newer areas such as Safety, Link, and Compass. Our innovation engine is strong and our strategic partnerships with the industry are increasing. We issued guidance for fiscal '24 and initial guidance for fiscal '25 to provide context for the one-time revenue impacts to 2024 related to TFC. Normalizing for TFC and FX, we expect revenue to grow about 15% in fiscal '24 and at least 15% in fiscal '25. At this point, we'll open the call to your questions.

Operator, Operator

Thank you. We'll go to Brent Bracelin, Piper Sandler.

Brent Bracelin, Analyst

Good afternoon, Peter. I really appreciate your kind of long-term thinking here. And this one is kind of aimed squarely at you here. I would love to get your initial thoughts on how Veeva is thinking about incorporating AI and large language models into the business. Is there an opportunity to lean in here to either lower cost internally around AI? Or are you thinking about new revenue streams via new products that you could build on kind of these AI advances in large language models? Thanks.

Peter Gassner, CEO

That’s a great question about AI. ChatGPT has certainly captured global attention and represents a significant technology. I won’t dwell too long on that, but it is important. To answer your question, Brent, I don’t see an opportunity to reduce internal costs; our operations are primarily relationship-based, focusing on sales, marketing, innovation, and product construction. As for delivering value to our customers, that's something we’ll think about over time without rushing into it. We have a wealth of data in Veeva and across the industry cloud. Additionally, we possess individual customer data, which presents opportunities to address broader industry questions or assist customers with their internal operations. I believe large language models will likely serve in a chat-like interface, allowing users to ask questions and receive responses that, while perhaps not high in quality, can help guide further actions. I think there’s potential there, but I don’t view it as a revolutionary shift, and we’ll see how it develops.

Brent Bracelin, Analyst

Helpful color. And then one quick follow-up for Brent. Really appreciate the initial kind of milestone for fiscal 2025, here implies a rebound to 19% overall growth. In our forecast, it does suggest that the R&D business could rebound and normalize back to 25%, 30%. Is that the right way to think about the drag in R&D and this year and then kind of a normalization in R&D growth the following year? Is that the right way to think about the impact here with accounting shift?

Brent Bowman, CFO

Yes. So, thanks, Brent. We're really excited about the momentum we're seeing in the R&D business. It's a key obvious growth driver for us as we look out '24, '25, and beyond with particular strength in the clinical space, quality, so really broad-based strength. So, it is really driving that growth that you're seeing as you look out into 2025.

Brent Bracelin, Analyst

Okay. Thank you.

Operator, Operator

Next up is Brian Peterson from Raymond James.

Brian Peterson, Analyst

Hi, thanks for taking the question. And so, I wanted to hit on your success in EDC with six of the top 20 customers on the full. Maybe talk about what's driving that success, and then I'd love to understand, Brent, maybe how to think about the revenue ramp of those deals? Like how long would those typically get to be fully up to like the fully penetrated ARR?

Peter Gassner, CEO

Yes, I can respond to that. This is Peter. We are very pleased with the success of EDC. It seems that sometimes things happen all at once, like having three of the top 20 in one quarter. I wouldn't anticipate that every quarter since we will quickly exhaust the top 20. The occurrences in that particular quarter are merely a series of coincidences. However, why is this trend happening overall? We've emphasized for many years that we have a superior EDC product that is more comprehensive, truly cloud-based, and comes from Veeva, which includes our clinical operations suite and clinical data management suite. This is what customers are looking for. These projects are long-term in nature, so for full revenue from some of these projects, you might be looking at a timeline of around three to five years. While not all projects will follow this exact timeline, it serves as a good guideline. Ultimately, it signifies long-term revenue.

Brian Peterson, Analyst

Right.

Peter Gassner, CEO

If I add a bit more detail, the clinical data management suite includes much more than just EDC, which will be important over time. It encompasses elements like randomization trials, supply management, ePRO, and our clinical database, with additional components to come. So, consider EDC as the starting point for our clinical operations, similar to how you viewed eTMF. It’s substantial and significant, but overall, clinical data management is even larger.

Brian Peterson, Analyst

No, that's good to hear. And it sounds like there's a lot of good news in clinical. And maybe pivoting to the commercial side, I know this was in the prepared remarks a little bit, but just in terms of the CRM transition to Vault, any early feedback that you can share from customers that you've heard? I'd love to get any perspective on that. Thanks guys.

Paul Shawah, EVP, Commercial Strategy

Yes, I can take that. This is Paul. Yes, so the Vault CRM is going really well pretty much across all dimensions. We have the product development team working hard. I'd say they're ahead of schedule. We're actually going to have a demo. Our first demo at our summit coming up in May. So that's super exciting. I'm excited about that. I know our customers want to see that. There's not a whole lot our customers need to do right now, but we are having conversations with a number of them. And by and large, the feedback is positive. We're just trying to understand what this means for them and what timing looks like and what's entailed. And our job is to make it really easy for them to move. So yes, overall going really well with all CRM.

Brian Peterson, Analyst

Thanks Paul.

Operator, Operator

Next up is Joe Vruwink, Baird.

Joe Vruwink, Analyst

Great. Hi, everyone. Peter, in the prepared remarks, there was a mention of kind of early momentum in some of the newer areas like safety, which is a hard one to get into, but also something like Link, I think is one of the more successful new products for commercial in some time and then, of course, Compass. When you step back and you think of this pod of newer products, and then you maybe rewind and think about the introduction of like submissions or EPM, the part of kind of your first go after in the clinical areas. Do you think the opportunity ahead is just as compelling and consequential as kind of that mid-2010s timeframe for Veeva?

Peter Gassner, CEO

It's a really thoughtful question. I wouldn't draw the exact parallel, but I think the parallel is similar. The reason why is in R&D, there's multiple very separate entry points. Safety is quite a bit different than clinical. It’s quite different than regulatory. In the commercial area, sales, medical and marketing, things are more related, and they're more fluid together. So it's not distinct entry points. It's all related buyers. But in terms of yes, a second leg of things really increasing our potential. That's absolutely what's happening. We have established the CRM suite and the commercial content actually. And then we have Crossix, which is pretty well established, but has a lot of room to grow. It has some advertising headwinds right now, but it has room to grow. And then we have things that are very, very early Link and especially Compass. Those are broad things and can lead into other add-on type of things. So, I think you're pretty accurate in the way you're saying it. It's the second leg of commercial is things like Link and Compass and business consulting as well.

Joe Vruwink, Analyst

Okay. That's great. And then maybe, Brent, just a question on reconciling the margin outlook. So, there's some immediate impacts of the TFC T&E is coming back. Is there kind of another category of incremental spend as you think about next year and related to maybe that thought there was a comment in the remarks of just the evolution of Compass and taking your time to get it right and kind of introducing some new things in 2024? Would that maybe be an example of an area that's receiving incremental investment?

Brent Bowman, CFO

Thank you, Joe. If you examine the margin guidance, I think you captured it accurately. Adjusting for the termination for convenience results in approximately a 250 basis point impact, bringing us to around 36.5. Additionally, there's another point related to travel and events. We recently held our first in-person field kickoff event in several years, marking a return to a normal rhythm of engaging with customers and gathering together. We are also making ongoing investments for growth. Compass is one of several areas where we plan to continue investing, as we recognize the opportunity to enhance our sustainable business model.

Joe Vruwink, Analyst

Okay. Thank you very much.

Brent Bowman, CFO

Thanks, Joe.

Operator, Operator

Our next question is Ken Wong, Oppenheimer.

Ken Wong, Analyst

Thank you for answering my question. This is directed towards either Peter or Paul. Regarding the CRM transition, I'm curious about the demo scheduled for May. How should we perceive this new CRM? Is it primarily a straightforward migration of your current system on Salesforce, or will there be some reimagining to enhance it for the updated AWS backend?

Paul Shawah, EVP, Commercial Strategy

Yes, hey Ken, this is Paul. That's a great question. To put it simply, we're mainly focusing on a lift and shift. The applications that most of our end users interact with daily will stay the same. Currently, those apps connect to Salesforce, and in the future, they will connect to Vault. This is a straightforward approach we've taken. We're doing it this way primarily because Salesforce is a leading CRM that works effectively for our customers, making the transition smoother for them. Our goal is for the end users to experience minimal disruption; one day they will be connected to Salesforce, and the next day to Vault. There's considerable engineering work involved to achieve this, and we plan to start showcasing some of it at our summit, with more updates as time progresses.

Ken Wong, Analyst

Got it. Great. Thanks a lot, Paul. And then for Brent, just a quick clarification on '25. I know it's super early, but the margin goals would suggest kind of in that 35-ish range, I guess, 35.5, give or take. Should we think of that as more of a generic plug similar to what you previously mentioned in the long-term target, so kind of just mirroring that? Or is that a reasonable expectation for how you're envisioning the margin expansion from '24 to '25?

Brent Bowman, CFO

All right, Ken. So what we said is at least $1 billion in operating income. So we're two years out, and that's above our long-term target of 35% plus. And we're going to continue balancing growing revenue as well as the investments required around that. So it's early. We feel good about how we're executing, and we're going to deliver at least $1 billion of operating income.

Ken Wong, Analyst

Got it. All right. Fantastic guys. Thank you.

Brent Bowman, CFO

Yes, thank you.

Operator, Operator

The next question is Anne Samuel, JPMorgan.

Anne Samuel, Analyst

Hi. Thanks so much for taking the question. I was hoping maybe you could walk us through what headwinds and tailwinds you incorporated within the 2024 revenue guidance. And to the top end of your revenue range imply any improvement in the macro backdrop?

Brent Bowman, CFO

Yes, I'll take that. So what we've assumed in our guide for the year is really the continuation of what we started to see in June from a macro perspective. So we haven't assumed any improvement nor worsening in the macro that we continue to see June through the balance of the year, and that's some items like Peter mentioned the advertising spend, a little bit headwind in Crossix. We assume that into our guidance as well as some of the SMB capital conservation that we saw in the back half of the year. So that's what's informed into our guide as you look out to fiscal year '24. I think you had a second question, if you wanted to repeat it.

Anne Samuel, Analyst

No, that was really helpful. I was hoping you could explain the pricing adjustments and how they will impact the model. I believe you mentioned in your prepared remarks that you don't anticipate much change in fiscal 2024. What should we expect this year, and how should we consider the timing of changes moving forward?

Brent Bowman, CFO

Yes. We announced that starting April 1st, we will implement a price increase of either 4% or the CPI, whichever is lower. For fiscal year 2024, this increase is not expected to significantly impact our revenue. However, since Q4 is our largest renewal quarter, it will have a greater effect on billings for fiscal year 2024 and will impact revenue more in fiscal year 2025. It’s important to note that it may take a few years to fully realize the effects because we have customers with multi-year contracts that will require renewal. Therefore, it will take some time to see the full benefits.

Anne Samuel, Analyst

Helpful. Thank you.

Brent Bowman, CFO

Yes. Thank you.

Operator, Operator

We'll go to Stephanie Davis, SVB Securities.

Stephanie Davis, Analyst

Hey guys. Thanks for taking my question. I was hoping you could tell us more about the large Crossix wins. Are you seeing a renewed interest in MV digital commercialization tools despite the tough ad environment? When we think about it, will folks be more reactive in adopting these solutions once the market starts to improve? So we could see kind of a fast follower sort of dynamic?

Peter Gassner, CEO

Yes, Stephanie, I believe your question broke up in the beginning. So could I ask you to repeat that?

Stephanie Davis, Analyst

Yes, sure. It's about the large Crossix successes and whether we might see people preparing for an improved advertising environment. Will they implement solutions ahead of time, or will they start adopting them once the market begins to improve as a reaction?

Peter Gassner, CEO

Okay. Yes, we are working on more enterprise-type deals in Crossix, but it's unclear when they will materialize. I don't think these are closely related to the challenges in advertising. Instead, they involve long-term considerations, such as whether companies want to standardize their operations across all brands and adopt an enterprise approach or manage budgets for each brand individually. It's a gradual shift towards more enterprise purchases that are not influenced by the fluctuations in advertising.

Stephanie Davis, Analyst

All right. Understood. And as a follow-up one on the CRM business. You guys called out a number of SMB wins. Can you tell us how and who you're winning against? I mean because we spent so much time, but the transition away from sales force last quarter. Is that factoring into any of these conversations as you go through it?

Peter Gassner, CEO

Yes, we continue to succeed. Our win rate in CRM remains stable, and we are performing exceptionally well. The competitive landscape has not changed significantly; we are primarily facing the same players. To categorize them, we are dealing with either pre-commercial companies and SMBs in the U.S. or European markets, or domestic companies, such as those in Japan. We are winning against these traditional competitors. Pre-commercial companies may be purchasing their first CRM system, while domestic competitors might include local firms or some of the familiar traditional competitors we’ve encountered.

Stephanie Davis, Analyst

All right. Helpful as always. Thank you.

Operator, Operator

The next question is Gabriela Borges, Goldman Sachs.

Unidentified Analyst, Analyst

Hi, this is Kevin filling in for Gabriela. Thank you for the question. Peter, could you discuss your approach to mergers and acquisitions? I understand you're being patient and looking for the right opportunity, but what are you observing in the private markets in terms of competition? How does this influence your research and development strategy? Thank you.

Peter Gassner, CEO

Yes, always no change in our M&A strategy. It was quite careful, right? Look for a cultural fit, look for a business fit and something that we can execute on. And those opportunities are rare. I would say we're looking more than we have in the past. But if you compare Veeva to three years ago, we have more effort in the M&A area. So we're scouring the market more. And we've always got a few things in the hopper and they most likely don't come through for a variety of reasons. I still am bullish over the next year or two that we can have something, because I think people are getting a bit more realistic on their valuation and they're realizing that there's not going to be a quick turnaround. So I wish I could give you a schedule of acquisitions, but I can't, but I'm really proud of our acquisition track record, and I think that will continue.

Unidentified Analyst, Analyst

Thanks, Peter.

Operator, Operator

Craig Hettenbach from Morgan Stanley has the next question.

Craig Hettenbach, Analyst

Yes. Just a question on the operating margins in the implied 35.7% in fiscal '25 or at least that much. Can you just talk about the hiring pace and things you're doing this year after what was a very strong fiscal '23? And what environment you're seeing out there as you're looking to hire?

Peter Gassner, CEO

This is Peter. The environment is favorable for hiring compared to 12 months ago, and I anticipate this positive trend will continue for several reasons. We are a well-managed company, which attracts talent. Our flexible work policies contribute to this, and there is reduced speculation in the market. However, we will remain cautious in our hiring, as we always have. We focus on areas where we can grow and invest while maintaining a lean workforce. It's essential for us to operate a profitable business. Therefore, you can think of our approach as business as usual at Veeva. We don't overextend during good times, nor do we make drastic cuts during challenging periods. We simply navigate the obstacles as they come.

Craig Hettenbach, Analyst

Got it. And then just a follow-up on the macro backdrop. It was a little choppy at calendar year, some softness in the middle part of the year, and then it stabilized. Just curious on that on kind of the Crossix business and SMB, where it did soften a little bit. It sounds like there hasn't been much change in recent months. But if you can provide any color there in terms of any types of influence you're seeing in the macro today?

Peter Gassner, CEO

Yes. In terms of the macro situation over the last 90 days, we really haven't seen any changes. While this doesn't predict what might happen in the next 90 days, I don't observe any signs of rapid change at the moment. We seem to be in a period of consistency, which is beneficial for Veeva as we focus on core capabilities to enhance efficiency and effectiveness. With less fluctuation in the macro environment, whether it's a significant upturn or downturn, it supports us significantly. When there is stability in the macro landscape, our customers tend to prioritize developing these durable capabilities.

Craig Hettenbach, Analyst

Thank you.

Peter Gassner, CEO

Thanks.

Operator, Operator

We'll take our next question from Rishi Jaluria, RBC Capital Markets.

Rishi Jaluria, Analyst

Thanks for taking my questions. Peter, I’d like to explore the impact of generative AI on the industry rather than just its effects on your engineering and software development. Recently, a pharmaceutical company has developed a drug designed entirely by generative AI and is moving it into clinical trials. This suggests significant disruption could be on the horizon for the industry due to generative AI. Can you share your thoughts on the potential implications for your customers and how you foresee it affecting your business? I have a follow-up after that.

Peter Gassner, CEO

Well, pretty early on that. I didn't read that exact press release. I would be surprised if no human touched that drug during its development and its approval. And so I don't think that probably happened. I think there's promising things in the early phase of discovering a drug, and that's not actually really due to the large language models or the generative AI. That's more to machine learning algorithms that are math-based. So I guess I don't want to be a skeptic here, but I don't see the real revolution. And that's the thing about revolution. You'll know it when they happen. And so far, we really haven't seen it.

Rishi Jaluria, Analyst

I appreciate your point. I would like to discuss the effects of several drugs losing their patent this year and possibly in the next 18 to 24 months. A significant example is AbbVie's Humira. How are you assessing the potential effects of this? Could it lead to a reduction in the number of pharmaceutical representatives, impacting the CRM business? On the other hand, with patents expiring, could there be an opportunity for R&D as major companies seek to advance drug development more quickly and introduce new blockbuster drugs? Thank you.

Paul Shawah, EVP, Commercial Strategy

Yes, I can address that. This is a typical scenario in the industry. If we compare the next five years to the previous five, the percentage of revenue at risk in the upcoming five years is actually somewhat lower than in the last period. It's an interesting phenomenon. New medicines usually take the place of revenue lost from drugs that have reached their patent expiration. You mentioned AbbVie as an example, and there are public expectations that AbbVie will introduce new medicines that could be as significant, if not more so, than Humira was. This trend is quite common, as the industry heavily invests in research and development, leading to innovation where new medicines replace the revenue from older ones. This results in more clinical trials, increased launches, and more drug approvals, ultimately allowing sales representatives to continue promoting these new products. I anticipate this positive cycle to persist, if not strengthen, due to the substantial investments being made in the industry.

Rishi Jaluria, Analyst

All right, great. Really helpful. Thank you so much.

Operator, Operator

Up next is Saket Kalia, Barclays.

Saket Kalia, Analyst

Thank you for taking my questions. Paul, could you share insights on what you’re hearing from customers regarding their plans for pharmaceutical sales reps this year? It was mentioned in the prepared remarks that Veeva CRM is expected to be flat year-over-year. How do you view that for next year?

Paul Shawah, EVP, Commercial Strategy

Yes, so this calendar year, I expect it to be roughly flat also. But I'll take a little bit of a step back and just to paint the overall picture for you and for others that may not have been following us closely. So we've always talked about roughly a 10% reduction through the last fiscal year, we've seen the majority of that play out. This year, we expect we'll see some additional reductions play out. But I think it's going to stabilize, the market is going to hit and operate at this new steady state. And I think will actually end up slightly less than the 10% that we predicted. So we're seeing signs that the market is stabilizing. But I think this year, we'll have some gains in CRM in the CRM suite, but we'll also see a slight reduction in the market, so you can think of it as relatively flat.

Saket Kalia, Analyst

Got it. That's very helpful. Brent, maybe for my follow-up for you. For TFC, I think going back to the Analyst Day, we're expecting about a $60 million impact. I think that's a little bit higher now as we look at the '24 guide. Can you just talk about some of the mechanics there? What changed and also just remind us whether the TFC is going to have any impact on billings or cash flow?

Brent Bowman, CFO

Yes, hi Saket. Yes, so in the Q3 timeframe, we quoted a $60 million termination convenience impact and that was from existing deals in place at that time. You fast forward, we had a very successful Q4 quarter. We closed three large CMS deals. And with that, we added another $15 million of revenue pull forward. So that's $60 million to $75 million. And then in addition to that, there's about $20 million of anticipated deals that we expect to close in fiscal year '24 that would have pulled forward revenue. So when you add the 75 and the 20, you get to 95, and I think that's very prudent to consider when you're looking at the growth rates year-on-year. So that's how to think about it.

Saket Kalia, Analyst

Got it. And just to clarify, no real impact to billings or cash flow. This is really an accounting point for rev rec, correct?

Brent Bowman, CFO

Yes, to follow up, there is no impact on the total revenue value of these contracts. It is purely a timing issue. Additionally, there is no impact on billings and no impact on cash flow.

Saket Kalia, Analyst

Very helpful, thanks guys.

Operator, Operator

We will take a question next from Dylan Becker, William Blair.

Dylan Becker, Analyst

Hey guys. Congratulations on the quarter. Appreciate you for taking the questions. Maybe following up on the TFC piece and understand kind of some of the near-term accounting dynamics. But how are you guys thinking about that incremental multiyear kind of willingness and adoption maybe for Peter as validation of kind of that long-term strategy you guys have kind of called out and maybe as for Brent as well as kind of giving you some of that initial confidence and outlook as we think about giving guidance for fiscal 2025?

Peter Gassner, CEO

Well, I'll take the first part of that. Certainly, the Vote of confidence from the customers in the EDC area, in the clinical data management area, which is one of the more critical and one of the most complex things and the long multiyear rollout. Yes, we take that as a vote of confidence and we're really humbled by that, and we know we got to execute really well. So that's where we feel like in clinical data management, we've got sort of a tiger by the tail, and we got to pay attention and make sure we deliver on that. So yes, very excited about that. And how that flows through to the financials, that's for Brent?

Brent Bowman, CFO

Yes. And when you asked about how we look at the forecast, we do our forecast at a pretty granular level. We work with the business and think about it at a product level, at a market level, area level as well. And these ramping deals play into that as well. So when we combine all of those, that informs our guide, and we feel good about looking out at 2025 at least $2.8 billion in revenue.

Dylan Becker, Analyst

Got it. Super helpful. Maybe switching over to another area as called out on the Compass side of the equation, and kind of prioritizing dedicated sales teams. Is there anything to call out in the go-to-market piece, any kind of sales that needs to change there? And then maybe how that evolves and maybe benefits from the broader rollout of the sales and subscriber piece in fiscal 2024 as well.

Peter Gassner, CEO

I can address that. Overall, we've organized our sales team into two segments: the commercial sales team and the R&D and quality sales team. This structure allows them to represent a wide range of products, which benefits our customers and positions Veeva as a strategic partner, which is what our customers seek. In cases where a product is sufficiently distinct or innovative, or has unique characteristics, we might establish a specialized sales team; we made this choice for Compass. It’s a specific product that has significant potential and faces established competition. Our core philosophy remains unchanged. Each year, we assess whether a specialized sales team is necessary, and this decision was made several months ago, and we feel very confident about it.

Dylan Becker, Analyst

Got it. Super helpful. Thanks guys.

Operator, Operator

And we'll go back to Charles Rhyee, Cowen.

Charles Rhyee, Analyst

Thank you for taking the question. I wanted to discuss Crossix further. Peter, you mentioned that the macro environment doesn't significantly impact the selling cycle for Crossix; it comes down to whether a client opts for enterprise or state on a brand-by-brand basis. However, you've noted some weakness in this category. What are clients saying regarding their reluctance to move forward? I understand you signed a top 20 pharma partner this quarter, but for other clients who are hesitant, what reasons are they providing for not being interested or for delaying their decision?

Peter Gassner, CEO

Overall, when media spending decreases, it negatively impacts Veeva. For instance, if a brand is considering TV advertising and wants to measure it with Crossix, they are less likely to proceed if they choose to conserve their budget instead. This leads to a reduction in their spending with Crossix. Many customers are purchasing on an individual basis, module by module, so when their overall budget decreases, they tend to cut back on their Crossix expenditure. Additionally, if there is uncertainty about their budgets, they often become more hesitant about spending.

Charles Rhyee, Analyst

In that case, while it may not be a direct correlation, it is still connected to the overall economic environment, although not specifically related to research and development budgets.

Peter Gassner, CEO

Yes, I guess to the general economic environment or more specifically to the advertising environment inside of life sciences. Now that again impacts more of the ala carte type of things we do, which is the bulk of our business in the Crossix, the year-to-year ala carte. And our goal is to move people more to these multiyear agreements where it's more of an enterprise agreement. It's not exactly an all you can eat, but sort of like that, but smooth out the spend and simplify things for ourselves and for our customers.

Brent Bowman, CFO

So yes, so in the Q3 timeframe, we quoted a $60 million termination convenience impact and that was from existing deals in place at that time. You fast forward, we had a very successful Q4 quarter. We closed three large CMS deals. And with that, we added another $15 million of revenue pull forward. So that's $60 million to $75 million. And then in addition to that, there's about $20 million of anticipated deals that we expect to close in fiscal year '24 that would have pulled forward revenue. So when you add the 75 and the 20, you get to 95, and I think that's very prudent to consider when you're looking at the growth rates year-on-year. So that's how to think about it.

Jack Wallace, Analyst

Okay, great. Thank you.