Veeva Systems Inc (NYSE: VEEV) stock rose over 3.2% in the pre market session of Feb 27th, 2019 (Source: Google finance) as the company in the fourth quarter of FY 19 has reported 25% rise in the revenue to $232.3 million. Subscription services revenues for the fourth quarter were $190.7 million, up from $152.0 million one year ago, an increase of 25% year-over-year. In Q4, the subscription gross margin was 85%. This metric increased roughly 40 basis points from Q3 and almost 400 basis points from last year’s fourth quarter. While subscription gross margin will continue to slowly rise as Vault grows faster than Commercial Cloud, this level of improvement was also driven by duplicative expenses the company incurred in Q4 of fiscal 2018, associated with the AWS migration. Vault represented 49% of total revenue versus 42% in Q4 of last year. This capped a year in which total revenue was $862 million, up from $691 million in fiscal 2018, an increase of 25%.
Non-GAAP operating income for the fourth quarter was $84.3 million, compared to $55.2 million one year ago, an increase of 53% year-over-year. This resulted in an operating margin of over 36%, above the high end of the guidance. This beat was driven primarily by outperformance on the top line. The company has added 71 net headcount this quarter, ending Q4 with a total of 2,553 employees, up from 2,171 a year ago. Moving to the balance sheet, deferred revenue was $356 million compared to $196 million at the end of the third quarter. Calculated billings for the fourth quarter came in at $394 million, which was ahead of the guidance of $375 million. This outperformance was driven by stronger-than-expected bookings, better-than-expected billing duration for the business closed in Q4 and to a lesser extent, outperformance in services revenue.
Moreover, VEEV had one of the best ever sales quarters for Commercial Cloud. In core CRM, the company increased market share with more enterprise expansions and new SMB wins. The company has added another 15 SMB CRM customers in Q4 and a total of 46 in 2018.
For the first quarter of FY 19, VEEV expects total revenues to be between $238 and $239 million. Non-GAAP operating income is expected to be between $85 and $86 million. VEEV expect calculated billings of approximately $235 million for Q1 and $1.100 billion for fiscal 2020.
For FY 19, VEEV expects total revenues to be between $1,025 and $1,030 million and Non-GAAP operating income is expected to be between $365 and $370 million