Veeva Systems (VEEV) Q2 2025 Earnings Call Transcript

Image source: The Motley Fool. Veeva Systems (VEEV -0.45%)Q2 2025 Earnings CallAug 28, 2024, 5:00 p.m. ETContents: Prepared Remarks Questions and Answers Call Participants Prepared Remarks: OperatorLadies and gentlemen, good afternoon. My name is Krista, and I will be your conference operator today. At this time, I would like to welcome everyone to the Veeva Systems fiscal 2025 second quarter results conference call. All lines have been placed on mute to prevent any background noise, and after the speakers' remarks, there will be a question-and-answer session. [Operator instructions] Thank you. I will now turn the call over to Gunnar Hansen, director of investor relations. You may begin.Gunnar Hansen -- Senior Director, Investor Relations Good afternoon, and welcome to Veeva's fiscal 2025 second-quarter earnings conference call for the quarter ended July 31, 2024. As a reminder, we posted prepared remarks on Veeva's Investor Relations website just after 1 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, Strategy; and Tim Cabral, our interim 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, August 28, 2024, 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 updates on our performance during the quarter unless we do so in a public forum. On the call, we may discuss certain non-GAAP metrics that we believe aid in the understanding of our financial results. A reconciliation to comparable GAAP measures 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 P. Gassner -- Co-Founder and Chief Executive Officer Thank you, Gunnar, and welcome, everyone, to the call. Q2 was a strong quarter with results above our guidance. Total revenue in the quarter was $676 million with non-GAAP operating income of $280 million. Thanks to the team, we advanced in all major areas with key product expansions and strategic customer wins. This included an important new release of Veeva Site Connect to streamline clinical trials and the first release of Service Center in the CRM suite. We have a clear product strategy and are executing well on our vision. We'll now open up the call to your questions. Questions & Answers: Operator[Operator instructions] We ask that you limit yourself to one question and a single follow-up. Your first question comes from the line of Joe Vruwink with Robert Baird. Please go ahead.Joe Vruwink -- Robert W. Baird and Company -- Analyst Great. Hi, everyone. I think it's interesting, the cadence of core CRM wins has now picked up for two quarters. Of course, the last quarter was all Vault. And looking backwards, I think you're actually winning more CRM on a quarterly basis than you did even before the decision was made to migrate CRM to Vault. So, clearly, it seems customers are comfortable making this commitment. I guess I wanted to ask, just other than comfort related to the set of applications because it's Veeva and this is a proven solution, how much might be the product road map when things like Service Center and marketing automation starting to register in decisions? And then related to that, when you think about the vision a customer might have around adopting a full suite across the three areas, do you think that ends up being more enticing to an SMB customer or maybe an enterprise customer for Veeva?Paul Shawah -- Executive Vice President, Commercial Strategy Hey, Joe, this is Paul. Thanks for the question. You're right. We had another very strong quarter. We -- our Vault CRM became generally available in April. It's exclusively what we're selling into the market. In the quarter, we had 14 wins. I think we're winning virtually every CRM deal. You certainly never know if you're winning all of them, but it certainly feels like we're winning all of them. We know we're not losing any deals to competitors that we're competing in. So, we feel really good about our execution there. Your question about the broader vision, Service Center, Campaign Manager, it's absolutely playing a part of the -- it's a continued part of the overall vision and direction. And I think those early customers, yes, they want something that they know is going to work and deliver for them today. This is often their most important moment as a company. They're preparing for their launch and actually launching their medicine. But they also want something that they can grow with us. And Service Center and Campaign Manager, we're doing that in a very different way, a very simple technology stack, a more efficient way of bringing sales and marketing and medical and service all together on the same platform. So, that vision is certainly playing a big component of that. And then we're executing well. We're executing well from a product perspective and from a migration standpoint. So, customers are taking notice of that. So, yes, I'm pleased with our progress.Joe Vruwink -- Robert W. Baird and Company -- Analyst OK. That's great to hear. And then I wanted to ask, just since the R&D Summit is coming up, customers here have obviously been studying their path forward with AI at this quarter, even made good progress, both with core system wins. But you also mentioned adoption around the newer bulk data APIs. I guess does the summit maybe serve as a forum where you would anticipate more clarity coming out, just in terms of how customers are approaching R&D? Or maybe could this actually be an event where because Veeva can address questions and help educate, and obviously, customers will speak with one another, maybe it provides just more visibility into decisions at year-end and your expectations into fiscal '26 in the R&D?Peter P. Gassner -- Co-Founder and Chief Executive Officer Yeah. Joe, I'll take that one. This is Peter. The visual I always have for our summit is like a boost. You're on a bicycle, and your dad gives you a boost. They push you forward and go faster. It's like that because our customers talk to our customers and us, and they learn. And we talk to our customers, and we learn, and we refine. So, I don't -- I think that's the way you need to think about that. Now, that relates to all types of things, what order to do the Veeva applications, how best to do the Veeva applications, what new Veeva applications, how to leverage AI with the Veeva data. So, nothing special about this R&D Summit. It's just that it's -- it will be probably more impactful than it ever has been because we're bigger than we have been.OperatorYour next question comes from the line of Saket Kalia with Barclays. Please go ahead.Saket Kalia -- Analyst OK. Great. Hey, guys. Thanks for taking my questions here. And nice job on the quarter. Peter, maybe just to start with you. Can we just talk a little bit about the latest with Vault CDMS? Maybe touch on sort of how some of those ramps are going with some of the top 20 pharmas that have adopted the tool, and maybe we could touch on sort of how the pipeline looks for continued share gains in that market.Peter P. Gassner -- Co-Founder and Chief Executive Officer Great question. The ramps are going well. The adoption, that's what we really focus on. When we sell a large top 20 on the CDMS, they have a fixed ramp schedule, a fixed fee schedule that goes based on time, not based on how fast they actually adopt. So, when we arrange that, we always want them to get a full adoption even before they get to their full financial ramp. That's what we feel is fair and good. And it's a win for the customer, and we're in it for the long run anyway. We're not really in it for the short run. So, adoption is good. I would say value realization is quite good. I think better than expected in a couple of areas. The site experience is good. No negative feedback from the sites. In fact, quite positive feedback on the user interface of the sites using our system. Certainly, for the sponsors, feedback, very good in terms of building studies faster, less custom programming, less errors. And then in the data cleaning, significant cost savings in the data cleaning when people are using our CDB product, our Clinical Database product, in conjunction with our EDC. And that's something where most of our large customers are using those products together. So, they're actually able to reduce manual work through the data science capabilities in our CDB product. They're finding data anomalies with our CDB product automatically, sending that query to the site, the site might be responding. And CDB is closing that out automatically rather than human intervention there. So, that's going quite well. I think we will continue to gain market share. Our pipeline in the top 20 in enterprises is healthy, very healthy. There's a number of companies talking with us. You never know exactly when they're going to make a decision because it depends on their business priorities and what else they have going on. They only have so much strategic they can make -- strategic change they can make all at once. I would say the area where we would like to make more progress is in clinical research organizations. I think there, we will make progress. It's not yet to where we would like it, particularly in the large clinical research organizations, but we'll get there over time. I guess my last comment, I think we do have a structural advantage that people sometimes overlook when we have the clinical data management products like EDC and the clinical operations products like CTMS and eTMF. That means that Veeva can take care of that intricate integration. And believe me, no customers really want to do that. That's difficult work that's not value-adding, so things are going well in the EDC area.Saket Kalia -- Analyst That's great. That's great to hear. Tim, maybe for my follow-up, for you. Great to see the guide for commercial subscription revenue go up for this year. Can you just maybe touch on sort of the size and growth profile of maybe what we've called the non-CRM part of commercial, right? Basically, those businesses that aren't tied to Veeva CRM. Does that make sense?Timothy Stephen Cabral -- Interim Chief Financial Officer Yeah, it does. As we look at the overall commercial business, the CRM suite is probably 50% of that. And the non-CRM, Saket, using your words, are the other 50%. While the CRM suite part of the business, as you heard Paul answer the first question on the call, is doing quite well, you can imagine that the non-CRM is growing much faster than that core CRM suite. So, very pleased with the performance of our commercial business and the continued progress that we're making, both from an innovation perspective and from a customer success perspective.Saket Kalia -- Analyst Very helpful. Thanks, guys.OperatorYour next question comes from the line of Ken Wong with Oppenheimer. Please go ahead.Kenneth Wong -- Analyst Great. Fantastic. The first question for you, Tim. I realize demand trends aren't always linear like we investors like. Can you help us think through kind of what's going on with the R&D subscription line? You guys trimmed it a quarter ago. You bumped it back up. Like what changed relative to three months ago that gives you guys this renewed confidence?Timothy Stephen Cabral -- Interim Chief Financial Officer Yeah. Hey, Ken. Look, we're 90 days later in the year. And as you can imagine, we're getting better visibility into the second-half pipeline. What we talked about last quarter was some specific larger deals that we're moving to the right. And I think today, we continue to build really productive conversations with those customers. We continue to move through the sales cycles with those customers. And today, we just have better visibility than we did 90 days ago, Ken, which informed or was a good input to the modest increase in R&D subs revenue for the year.Kenneth Wong -- Analyst Got it. Perfect. And then Peter or Paul, just circling back to the Vault CRM wins, again, 14 customers, that's a fantastic outcome. You also mentioned next release of Vault CRM in Q4 and then kind of the migration timeline. Any reason to think that the next version of Vault CRM is like that will have an impact on deployment timeline? So, I guess in short, would a delay of that release somehow fall when your customers will start to migrate?Paul Shawah -- Executive Vice President, Commercial Strategy Yeah. Hi, Ken. So, first, we're excited about the next release as it gets us to what we're calling the full functionality and then more. So, we'll have everything we've delivered in Veeva CRM plus some additional functionality that Vault CRM will have that's unique to Vault CRM like better content integration, like opportunity management built in. We're going to have a lot of new capabilities. And that distance between Vault CRM and Veeva CRM will continue to increase over time with that road map. Now, that will not have -- it should not have any impact on how customers think about their migration timeline. In fact, if anything, it will create a little bit of an opportunity for us as customers see all of the innovation happening on Vault CRM. They'll want to get to Vault CRM faster. But I don't -- they're customers, they go through their own process, right? So they're very thoughtful about the timing that they want to go through for their migration. And we want them to do it in a timing that's appropriate for them, and adding innovation to Vault will certainly help with that.Kenneth Wong -- Analyst Got it. Thanks for the insight, guys.OperatorYour next question comes from the line of Brian Peterson with Raymond James. Please go ahead.Brian Peterson -- Analyst Thanks, guys, and congrats on the quarter. I'll keep it to one. So, obviously, good to see the Service Center launch. I know it's early days there, but I'm curious. How would you define success in that market? And as we're thinking about revenue contributions over the next few years, any way to kind of stack rank that contribution versus other things that you have in the hopper? Thanks, guys.Paul Shawah -- Executive Vice President, Commercial Strategy Yeah, Brian, thanks for the question there, and we're excited about that release. It's generally available now, something that we announced last year, and we executed on really, really well. I'm proud of the product team for delivering that with speed. This is a new product for us, just like we've announced Campaign Manager and Patient. We're executing well across all three of those products. Campaign Manager's on track to be available at the end of the year. I guess the way I'd think about the sizing, I won't go product by product. But just if you kind of combine all of them, Service Center, Campaign Manager, and Patient CRM, those are the three new products that we've announced since Vault CRM. I think of it as roughly the same size as core CRM, and that opportunity will certainly play out. Obviously, a customer has to be on Vault CRM to take advantage of those new products. But that opportunity will play out over time. And as customers move to Vault CRM, it will open up that opportunity for them to take advantage of our new innovation.Brian Peterson -- Analyst All right. Thanks, Paul.OperatorYour next question comes from the line of Rishi Jaluria with RBC Capital Markets. Please go ahead.Rishi Jaluria -- Analyst Wonderful. Thanks so much for taking my questions. I've got two. First, Peter, in your prepared remarks, you talked about some of the early traction you're seeing with the AI Partner Program. Can you maybe talk about what are some of the use cases you've seen so far? And maybe philosophically, as you see some of these use cases get built out and maybe even start to see some early adoption, is there a point at which that may inform your own internal road map and you have the flexibility to maybe accelerate some plans in terms of integrating gen AI into the platform? And then I've got a quick follow-up.Peter P. Gassner -- Co-Founder and Chief Executive Officer Thanks, Rishi. The types of use cases in commercial often have to do with data science. So, things like next best action, dynamic targeting, pre-call planning, things like that. And then in R&D, they can be more things like document generation, generate a clinical study report, or doing specific medical coding, things like that. So, those are the type of use cases. That's the thing. When you make an API like the Direct Data API, you don't know the innovation you're unleashing. And that's the whole point because the data can be consumed so fast and transactionally accurately, use cases that weren't practical before can become practical. I mean, if I step back way back when to designing the first salesforce.com API, I knew it was going to unleash a lot of innovation, and you just don't know. It's not predictable, and that's the good thing. Now, in terms of us monitoring that and informing our own road map, I guess there may be some of that. But mostly, that type of innovation really comes from internally our own thinking with our customers. We don't want to really disrupt our partners, especially when the partners are having customer success. If there's a major use case that we're very clear that customers need and for some reason, the ecosystem is not delivering customer success, yes, maybe we might step in there. But I would guess that what we would do would be more holistic, I guess, in some sense and not specifically something a partner would tackle because we're generally going to have more resources and more ability to sway our own road map than a partner would, and we want to be respectful to the ecosystem.Rishi Jaluria -- Analyst Yeah. Got it. Thanks. That's really helpful. And then just in terms of some of the adjacencies in here, and we talked about Service Center or Campaign Manager I know comes out later this year. You've had some kind of signs of early traction and early interest. Maybe can you help us understand, number one, with some of the success you're seeing with Service Center early, is this generally a greenfield? Is this displacement? And how should we be thinking about the advantages that these products have even on a stand-alone basis relative to incumbent vendors? Thank you.Paul Shawah -- Executive Vice President, Commercial Strategy Yeah. So, the requirement is to, of course, have Vault CRM and most of the customers that will -- that are starting with Vault CRM are net new customers. These are often pre-commercial or maybe they have one product in market. They're a smaller company, small or midsized companies. So, we expect those will be some of the first companies to go live with Service Center. They'll be some of our earliest adopters and some of the ones that take advantage over the next one to two years. But Service Center and Campaign Manager will be equally applicable and create value for the enterprise and large customers also. That will play out over time as we mature the product, but they fundamentally have a distinct advantage right from the beginning, which is that they're built into the CRM. So, everything that happens happens against a single customer record, which means that everybody in the team, it's about creating customer centricity. Everybody that touches that customer has the same exact view of the customer. They can share information. They share the same consent. They share the same content. They share the same compliance rules. It eliminates a lot of handoffs of data and integrations and complexity. It's a much simpler technology stack. And it's much more valuable in terms of creating collaboration and customer-centricity. So, we expect to see the uptake of these products start in the SMB but certainly continue to be available to our larger customers. Now, you asked about use stand-alone. It's very likely that these will be used in conjunction with Vault CRM. It's unlikely that somebody does a stand-alone implementation of Service Center, for example, or Campaign Manager. These will be -- you can think of them as significant add-ons to a Vault CRM implementation.Rishi Jaluria -- Analyst Thank you.OperatorYour next question comes from the line of Tyler Radke with Citi. Please go ahead.Tyler Radke -- Citi -- Analyst Yes. Thank you. Peter, it's encouraging to see the beaten raise here and particularly despite some services weakness. I'm wondering if you attribute some of the strength that you saw in new bookings as a function of the environment getting slightly better. I know last quarter, you called out headwinds, but I didn't see anything too much about the macro. And certainly, some of the results from your publicly traded peers in life sciences would indicate we're maybe moving off the bottom. So, just curious if you've seen any project acceleration, anything that makes you more optimistic about the overall environment by the end of the second half.Peter P. Gassner -- Co-Founder and Chief Executive Officer Tyler, this is Peter. I think the macro environment, from what I can see, is overall unchanged from 90 days ago. We still have the things going on that we have going on. So, the good performance is related to strong execution. We executed very well in the quarter. Also, we had maybe some good luck and no bad luck, and I think some quarters are like that. But overall, it's strong execution and no change in the macro environment that I can see.Tyler Radke -- Citi -- Analyst Great. That's helpful. And maybe a follow-up for Tim. Just as I look at the moving pieces in the guide, can you just walk through the services piece? And then as I think about the guide mostly coming from commercial, is it the new CRM wins that you talked about in the quarter, was that the biggest driver of the commercial raise? Or was it other pieces of the portfolio that outperformed on the commercial side? Thank you.Timothy Stephen Cabral -- Interim Chief Financial Officer Yeah. So, on -- and Tyler, thanks for the question. On the services side, some of the same dynamics that we talked about in the last quarter, we saw a little bit here, meaning some delays in service projects from a timing perspective. The other thing that we saw, which was somewhat a new dynamic, so we don't know whether or not it will be a trend, is we had a few customers, one quite large, who instead of contracting with third-party SIs on our paper decided that they were going to go directly to the customer -- or directly to a third party. So, while that is a reduction in our revenue opportunity, it certainly supports how we think about and what we're optimizing for in the service business, which is really customer success. And as we've talked about in the past, you'll see customers make these marginal decisions, and we don't try to fight against those. This is about customer success and enabling our customers to move on to the best innovation and really realize the customer success and value that our products deliver. So, I think those are some things that informed the services piece. On the commercial side, the outperformance in Q2 and I would say the increase in guide are one and the same. While we are seeing continued momentum and progress on the core CRM piece, Tyler, certainly, the outperformance and what informed the increase in guide was really the performance in our commercial content area and our Crossix area. So, those are the two that really drove the larger guide in the past -- in this cycle. Tyler Radke -- Citi -- Analyst Thank you for the color. And, Tim, I hope we can continue to work together in the future. Thanks.Timothy Stephen Cabral -- Interim Chief Financial Officer Thanks, Tyler.OperatorYour next question comes from Stan Berenshteyn with Wells Fargo Securities. Please go ahead.Stan Berenshteyn -- Wells Fargo Securities -- Analyst Hi. Thanks for taking my questions. So, in the prepared remarks, you called out a top 20 biopharma win in R&D, I think, standardizing on RIM and CTMS. Could you just walk us through how long did it take for this deal to work itself through the pipeline? And maybe just generally, how active is your pipeline with other large pharma potentially looking to standardize multiple Vault product suites? Thanks.Peter P. Gassner -- Co-Founder and Chief Executive Officer Stan, I'll take that one. I think that opportunity with that customer, I remember working on it roughly six years ago, seven years ago, discussions, information, relationship building, that type of stuff. Then it became more active, yes, roughly a year ago was when it really went into, OK, we're really going to think about some things here, and let's share information. So, that's about the time frame of those type of things. And if you look in the top 20, there are multiple opportunities. So, for example, in safety, very new product suite. In quality, many more products. In clinical, we've added products. In regulatory, some don't have our products yet. So, there's a number of those that are active and in various stages of activity every time. So, you think about top 20 and five different major opportunities, that's a total of 100 opportunities you might have in total, right? So, we certainly have more than 10 things active at any one given time. That's the way to think about it because there are multiple opportunities in these top 20s, not just one opportunity.Stan Berenshteyn -- Wells Fargo Securities -- Analyst Helpful. Maybe just a quick follow-up on the Crossix strength that you're seeing. Anything to call out related to the election cycle? Or is there more reliance by clients on omnichannel marketing that maybe you're benefiting from? I'm just wondering if you're seeing anything incremental just seasonally from the election cycle. Thanks.Peter P. Gassner -- Co-Founder and Chief Executive Officer No, I wouldn't say it's seasonal. I think it's just increasing market leadership. We've been delivering a quality product for a while now. And there were some entrants in and out there that -- and some of those didn't pan out so well in the ROI. So, I think there's customers coming back to a little bit of quality now. Also, we are having a -- we have two businesses in Crossix. One is the measurement and optimization of media campaigns. And the other one is digital audiences, where customers are using our audiences, our consumer audiences, for their marketing campaigns. And the audience business is something we've put a little more focus on in the last year, and those results are paying off. So, it's not anything -- cyclical things really weren't the driver.Stan Berenshteyn -- Wells Fargo Securities -- Analyst Awesome. Thank you.OperatorYour next question comes from Brent Bracelin with Piper Sandler. Please go ahead.Brent Bracelin -- Analyst Good afternoon. One question on top 20 deal activity and a follow-up on margins. Peter, I get the stronger execution and a little luck this quarter helping you. But just curious, what's driving the top 20 wins? It looks like you got some in safety, quality, Link Key People, R&D, it feels like a bit of a change from last quarter. And just curious if it's vendor consolidation that's resonating out there. Any sort of additional color you can point to why the deals closed this quarter would be super helpful. And then a quick follow-up for Tim.Peter P. Gassner -- Co-Founder and Chief Executive Officer Brent, I would say it's just timing. There was no other reason than that, just timing. Because if you step back, what is Veeva doing, we're really in the Development Cloud area specifically, and we're building a very durable business there. We have a structural advantage where we have all these products in the different areas that sit together and have had a high degree of customer success and customers that are actually getting lots of ROIs out of these products. And we're really the only company doing that. So, what's driving customers to come to us is just increased -- it's return on investment. They can get more efficient, and that's what they're trying to do. But there's a limited number of things and change that they can tackle all at once. So, that's why not all the change happens all at the same time. We're building this long-term franchise is one way to think about it of these very durable software products that are somewhat difficult for the customer to consume because they have to change their processes. But also, they're very sticky. They don't move them out. So, that's what we're building. We don't generally lose to competitors. We might lose to inactivity. The customer says, hey, I'm not prioritizing this particular area. I want to prioritize another area with my change. But we're not generally losing to another vendor.Brent Bracelin -- Analyst Helpful color there. And then, Tim, as a follow-up on margins, I think op margins were the highest we've seen in three years. Great to see that back trending above 40%. It looks like the biggest factor there was gross margin improvement. Can you just talk a little bit about what's driving that? Is it just mix shift? And how should we think about that going forward? Thanks.Timothy Stephen Cabral -- Interim Chief Financial Officer Yeah, Brent, thanks for the question. And yes, on the gross margin side, I think it's a combination of mix shift, so both more subscription revenue than services and more non-Veeva CRM revenue with all the other products that we don't pay the royalty to Salesforce. So, both of those mix shifts comes into play as you think about the improved gross margin. And a little call out, I -- while services revenue was in line with guidance, the margin performance was quite good. So, the service team continues to deliver value in a very efficient way. And I think that is probably how you think about our overall company, Brent. I think we deliver a tremendous amount of value to our customers. And Peter and the leadership team are highly efficient in doing it. And you're seeing that in the results of our operating margin.Brent Bracelin -- Analyst It makes sense. Great to see. Thanks, guys.Timothy Stephen Cabral -- Interim Chief Financial Officer Thanks, Brent.OperatorYour next question comes from Dylan Becker with William Blair. Please go ahead.Dylan Becker -- William Blair and Company -- Analyst Hey, guys, really nice job here. Maybe for Peter, starting with you. You called out Site Connect in the prepared remarks. And so, wondering if we could get some more context on kind of the extension of the clinical offering. We've talked about other channels, ePRO, eCOA, recruitment in the past, and there's a long runway within the existing tool set. But how should we think about kind of maybe more of the early, early emerging solutions within clinical, if that's the right way of thinking about it?Peter P. Gassner -- Co-Founder and Chief Executive Officer Dylan, I'll take specifically Site Connect because it is a key product for Veeva and very innovative. Site Connect is used by the sites, the clinical research sites around the world. And with our new evolution of Site Connect, our new release here, it's easy for all sites to consume it, can use it. It doesn't require any specialist software on their side. We've added a bunch of site functionality, so I think the sites are going to really like that. And the site, in some ways, they are the customers of the sponsors, right? So, the sponsors have to care about the site's efficiency. Now, also for Site Connect, it drives efficiency for the sponsor as well in terms of document exchange and all the different use cases, safety letter distribution, all these use cases. So, Site Connect is interesting that it has a network effect. It actually helps the site a lot, and it helps the sponsors a lot with their efficiency. So, that network effect will start kicking in. And I think it will, at times, drag along other clinical products from Veeva as well. So, that's about Site Connect. You had another follow-up question, and I don't recall it.Dylan Becker -- William Blair and Company -- Analyst No, that was -- it was, yeah, just around kind of other early stage solutions in clinicals. But I think, yes, the Site Connect piece covers it. It was more around ePRO, eCOA, all the other areas of recruitment, RTSM, some of the other areas we talked about in clinical.Peter P. Gassner -- Co-Founder and Chief Executive Officer Yeah. They're just earlier on in their cycle, very excited about RTSM. I think we have really a world-leading solution there, especially as we integrate it with our clinical operations suite. I think we'll -- over the next five years, we have plans that we can really change the game in RTSM, be the clear leader, and encourage customers, especially large customers, to just choose Veeva's enterprise standard to drive efficiency and use it on every trial. That's how confident we are in RTSM. And ePRO is early. ePRO, eCOA is early. And there are a lot of specific use cases depending on therapeutic area there. So, that's something we have -- our first set of customers. And some of them are midsized companies and enterprise license agreements with midsized companies. We just have to move our product forward, improve our product and our processes. I think we'll be fine with ePRO and eCOA over time. That one will just take time.Dylan Becker -- William Blair and Company -- Analyst OK, great. Thanks, Peter.Peter P. Gassner -- Co-Founder and Chief Executive Officer Thank you.OperatorYour next question comes from the line of Jack Wallace with Guggenheim Securities. Please go ahead.Jack Wallace -- Analyst Hey, thanks for taking my questions, and congrats on a strong quarter and the outlook. Peter and Paul, I wanted to ask about the -- how the migration conversations are coming along. And look, you've got a competitor that's made some noise about a takeaway. But it sounds like you're winning pretty much every new Vault deal that's out there. I guess, one, how are the conversations progressing with your largest customers and their -- those timelines? And two, are you hearing any noise from your other competitors around any AI-based functionality that they're thinking is going to be a way to pick off a couple of customers? Thank you.Paul Shawah -- Executive Vice President, Commercial Strategy Yeah. Hey, Jack, I'll start with the migration. So, migration conversations are continuing to progress very well. And that's -- I would really say across the enterprise and SMB. And we're having those discussions pretty broad-based across our customer base. Every customer will certainly make a decision on their own timeline as to kind of when they move and when they commit to moving to Vault CRM, but the discussions are going well. And I would say, I would expect additional top 20 commitments to play out over the next 12 months. So, I think we're executing extremely well. We're not doing anything too unnatural to force a decision timeline. We want customers to make the decision when they're ready and when it's right for them. But as I said, I just expect some additional commitments over the next 12 months. So, that's kind of how migrations are going. And you see that we're executing well on that. We're on track to have some of our first migrations with some small customers by the end of this year in Q4 but also some of the larger migrations happening starting next year. I think your second question was about competition, what's happening in the competitive space, a little bit related to AI. I think there is an opportunity maybe to take a step back a little bit around what's happening from a competitive landscape standpoint. I think you brought up a competitive takeaway. We did hear about that. But it's clear that the primary competitor for us is Salesforce, right? We used to compete with IQVIA. IQVIA, their product OCE, hasn't performed well in the marketplace. They sold off and licensed the rights back to Salesforce, so we don't see them as a competitor anymore. It turns out Salesforce is going to build on top of that product. So, IQVIA, I did hear them mention a competitive takeaway. You have to ask them specifically about what that is. We're not aware of what they're referring to there. So, I do see Salesforce as the primary competitor. They do talk a lot about AI. They talk a lot about how they're going to have their first release of a product toward the end of next year. Obviously, that's a different motion for them, right? This is doing something that's very deep and industry-specific, so it remains to be seen what will actually happen there. But of course, AI is a big part of that selling pitch. In terms of kind of our position, I think about our competitive position as continuing to improve. You see that in the results. But I do think we have a structural advantage. Peter talked about that in the clinical space. I think we also have that structural advantage in the commercial and in the CRM space really for a number of reasons. First is the execution. We have a product that's available in the marketplace. We have 15 customers live on it. We have our top 20 pharma customers that will be live from a migration by the end of next year in over 50 countries. That's really, really hard to do. It's not clear that anybody can deliver on that. Salesforce can deliver on that in two or three or even four years. Even if they're able to get there at all, we know that IQVIA wasn't able to deliver on that. So, having a product available and executing on that consistently, that's a big advantage. Certainly, our customer relationships, we've been selling and working with these customers and delivering for the last five or 10 or 15 years with some of these customers. And then, of course, our vision. We're building a commercial cloud, an industry cloud, and that's very different than what anybody else in the market is doing. So, I gave you a long answer, but I wanted to give you some context. The competitive position is playing out, and this is why we're so focused on execution. We have the right product strategy. We're going to continue to focus on execution. And I think based on that, we'll create a durable business and with growth opportunity with some of the new products that we talked about earlier in the areas of service and marketing, and patient.Jack Wallace -- Analyst Thank you, Paul. Really appreciate it. And if I could sneak a quick one in on Compass, it's been eight months since the launch of Prescriber and National. Just wondering how conversations with clients at a high level are progressing. And if any of your larger customers have deemed the data to be compensation grade. And if not yet, at this point, what a timeline would look like for that determination? Thank you.Peter P. Gassner -- Co-Founder and Chief Executive Officer Yeah. Good progress with Compass and mostly in the patient area in terms of sales and the new brands that we're adding. In the Prescriber and National projected products, there's more education going on, a little bit of sales activity here and there, but there's a lot of education getting ready. We don't have anybody using it for compensation yet. I do expect that will happen next year. It's important to remember that for Compass, particularly Prescriber and National, we're taking a new approach, a fundamentally different data approach. We are projecting not only retail data but specialty data to not only retail prescriptions but things -- complex therapies that are delivered through specialty pharmacy. So, we're projecting for about 4,000 brands. That's something totally new, and people will have to get used to that before they use it for compensation. For compensation, that's also -- generally, people look at that on an annual basis in general on the average, right? They're not going to switch that midyear, so we'll see how things play out with Prescriber and National. I'm very bullish over the long term. But boy, that's not quite Mt. Everest, but it's a big hill to climb. It's going to take time.Jack Wallace -- Analyst Got it. Thank you so much. Congrats again.Peter P. Gassner -- Co-Founder and Chief Executive Officer Thank you.OperatorYour next question comes from the line of Callie Valenti with Goldman Sachs. Please go ahead.Carolyn Valenti -- Goldman Sachs -- Analyst Hi. Thanks for taking my question, and congrats on the quarter. Just a higher-level one for me to start with. When you look at your addressable market today, just curious like what product suite do you see the most opportunity to continue developing functionality in over time? Is that kind of more of the R&D side of the business versus the commercial? And any kind of specific products you would call out?Peter P. Gassner -- Co-Founder and Chief Executive Officer Callie, I would say all -- both R&D and commercial have room to grow in multiple areas. Both of them have products that are quite new, very new such as Campaign Manager, Service Center. And then over on Compass, we just talked on Compass Prescriber. In the Safety Suite, we got ePRO. If you look at our TAM overall, how we laid it out, our $20 billion TAM, about 35 -- the biggest areas are commercial and clinical at about sort of 35% each, right, commercial and clinical, then we have quality, which is another big area. We have LIMS coming out there. We have Batch Release. And then after that, it's regulatory and safety. I would say that's how to think about it. I wouldn't say there's one dominant area, the two biggest areas, clinical and commercial, and they both have a mix of new and established products.Carolyn Valenti -- Goldman Sachs -- Analyst Yeah, that makes sense. Thank you. And then just other quick follow-up. Just wanted to ask you, as science continues to evolve at kind of a rapid clip, how do you think about your solutions, particularly some of the trial-facing ones evolving with that and just kind of some of the flexibility that you've built into those solutions to deal with that? Thank you.Peter P. Gassner -- Co-Founder and Chief Executive Officer Yeah. If you look at what we do, you mentioned the science. This is where the real biology work. We're understanding more about how the human body operates, how we can treat unmet needs. And there's a lot of needs that are unmet right now, and science is really advancing. Now, with what Veeva does, we're generally not involved at that level of the science. We design our solutions to handle all different types of clinical trials to manufacture all different types of drugs to do the sales and marketing on all different types of products. So, we're generally not specifically affected by the science because we build that flexibility in. Now, evolution in science is good for Veeva overall because that helps the life sciences industry grow, more medicines for more patients, more value, therefore, more need for automation.Carolyn Valenti -- Goldman Sachs -- Analyst Great. Thank you.OperatorYour next question comes from the line of Craig Hettenbach with Morgan Stanley. Please go ahead.Craig Hettenbach -- Analyst Thank you. I wanted to touch on capital allocation. As your cash balance continues to build up, any update on the strategy there and opportunity to put that to work?Timothy Stephen Cabral -- Interim Chief Financial Officer Yeah, Craig, thanks for the question. This is Tim. No update to that. What you've heard us talk about in the past is focused primarily on dry powder for potential M&A. So, no, no change in what you've heard us talk about in the past.Craig Hettenbach -- Analyst OK. And then as my follow-up, just touching on headcount, up 1% year over year. I'm sure some of that is just some of the services weakness in terms of response to that. But just more broadly, how are you thinking about headcount and kind of going into next year?Timothy Stephen Cabral -- Interim Chief Financial Officer Yeah. Craig, as we look forward, as you heard both Peter and Paul talk about in this call today, we do have a large opportunity in front of us. And we continue to look for the right level of investment, which will include adding to the team. I think what you've seen over the last year is while we have been adding, we've also been trying to drive and gain more efficiency. And I think you called it out in terms of services, probably an area where we've seen the largest amount of efficiency. And I mentioned that in the gross margin performance of that business earlier, you're seeing that outcome. So, look, I think there's an opportunity, a big opportunity in front of us, and we'll invest against it. But at the same time, we're also very thoughtful on how efficient we want to be as a team, how appropriately lean as an organization we want to be.Craig Hettenbach -- Analyst That's helpful. Thanks.Timothy Stephen Cabral -- Interim Chief Financial Officer Sure.OperatorYour next question comes from Ryan MacDonald with Needham and Company. Please go ahead.Ryan MacDonald -- Analyst Hi. Thanks for taking my questions, and congrats on a great quarter. Peter, I wanted to talk about safety a bit. Obviously, it's continuing to have nice success there. But as was mentioned in the prepared remarks, it's a complicated segment with customers resistant to change. Just curious, as you're continuing to have safety conversations with those prospective customers, is there some great unlock that we should kind of look for to sort of help drive this modernization into the cloud in safety versus on-prem in that segment of the market? And as you think about the next 12 to 24 months, is there a catalyst in your view that sort of unlocks that opportunity or maybe hastens the wave of innovation there?Peter P. Gassner -- Co-Founder and Chief Executive Officer I do expect there will be a catalyst. The thing about catalysts, we can't predict when or what. But I do think there'll be a catalyst. We have a clear product strategy, a Safety Suite in the cloud, that really have a lot of innovation and have some customers live and happy for a period of time. There are two legacy providers mainly. There may be some smaller ones, but there's mainly two legacy providers. We don't know what those legacy providers do. We don't know if one of them has issues here or there, and that starts getting around and they start having issues and it becomes not tenable. OK, that would hasten the move to Veeva because Veeva's kind of stable. We're not moving. That solution is going to be good. Another accelerant, I would say, is as our EDC product gets more traction and we have customers start hooking our EDC product to our safety product, there's significant savings there, significant savings. People can be repurposed to do other things when that connection is done, so that would be -- that would get noticed. And there may be some type of breakthrough that could happen over time, too. Remember, this safety is on the Vault platform. So, it has the complete flexibility of the Vault platform, including the Direct Data API. So, what type of AI things can be done on top of that AI, that Direct Data API? What type of AI things? That will be different than can be -- what can be done on the legacy, and that might cause some type of a tipping point. I believe our strategy for safety is quite good because we know what we're doing, and we're moving along. There are two legacy providers that won't be able to move along at some point and that they -- we have a structural advantage. I just don't know when that's going to start happening.Ryan MacDonald -- Analyst Helpful color there, Peter. Thanks. Maybe as a follow-up question, just wanted to touch on Vault Basics just real quick. I know it's a small -- sort of smaller segment of the business in terms of your exposure. But obviously, it's been one that if we look over the last 12 months has been more volatile in the earlier-stage biotech. Just curious, if you think about some of the early success here or maybe momentum that Vault Basics gives you at the lower end of that market can turn that earlier-stage segment into more of a growth engine over the next couple of years for Veeva. Thanks.Peter P. Gassner -- Co-Founder and Chief Executive Officer Yeah. I love Vault Basics. Let's just get that out there. I love it for many, many reasons. One is we're only starting about a year ago. And man, we really did some major innovation there. We already have 12 customers live. More customers than that signed up. So, that just shows the speed of Veeva. Even at our size, we can move and put great people on it, and they've done great things. It's also interesting that about 80% of the opportunity there would be opportunity that was not available to Veeva, just not available before because they didn't have the wherewithal to go on to the full Development Cloud. So, they were -- would stay on paper and spreadsheets and collaboration softwares and shared drives and things like that. So, we're getting to more of the market. Now, that market is -- maybe you would consider that not huge. I think it's $100 million or more. It's in that range. But that's -- it's good revenue and it's customer success for those customers. But the other thing that it's doing is it's really teaching Veeva how to simplify, how to get more done in a more efficient way, how to help the industry standardize. And that's going to help our enterprise and even G17 business over time. So, Vault Basics has been a home run for the customers who are starting to use it. And it's a great feeling for Veeva that we can change like that, and it's going to really help our enterprise business over time, not because those enterprise customers are going to use Vault Basics, but the process improvements and the simplification and the standardization that it's going to drive, that's truly going to pay dividends. We will build -- we will bring Vault Basics to more applications over time, including to the commercial areas. We'll do it in a slightly different way in commercial, but the concepts of Vault Basics are very applicable.Ryan MacDonald -- Analyst Makes sense. Appreciate the color. Congrats again.Peter P. Gassner -- Co-Founder and Chief Executive Officer Thank you.OperatorYour next question comes from the line of Kirk Materne with Evercore ISI. Please go ahead.Unknown speaker -- -- Analyst Hi, guys. This is Bill on for Kirk. Looking at Vault Direct Data API, how seamless is it for customers to turn it on and start using it? Is it something that needs an implementation? Or is it something that can happen kind of right away?Peter P. Gassner -- Co-Founder and Chief Executive Officer I'll take that one, Bill. This is Peter. That is something that's purchased by the customer, so that is something that is not free for the customers to use. They purchase it. The fee is not that large. It covers our compute cost, that type of thing. So, they have to really decide that they want it. After that, no, there's no implementation. You turn it on, and it's on. And that's that. Now, to use it, a customer would have to learn how to use it, read the documentation, figure out, hey, this is a little bit different type of API. What do I want to use it for? How can I use it? But there's no implementation. You turn it on, and it's on.Unknown speaker -- -- Analyst OK, great. Thanks for taking my question.Peter P. Gassner -- Co-Founder and Chief Executive Officer Thanks.OperatorYour next question comes from the line of Jailendra Singh with Truist Securities. Please go ahead.Jenny Cao -- Truist Securities -- Analyst Hi. This is Jenny Cao on for Jailendra Singh at Truist Securities. Just a question on professional service. Well, first, congrats on a nice quarter. But it seems the professional services part of Veeva solutions continued to be a weak spot in the report this quarter. Is that still because customers kind of see professional services as discretionary and are still continuing to delay certain services? And then for the part where customers are contracting directly with third-party vendors, is that driven by some initiatives to save costs or be more efficient? What do you think is driving that?Timothy Stephen Cabral -- Interim Chief Financial Officer Yeah. Jenny, this is Tim. I'll take that question, and thanks for it. So, first, I would characterize professional services not as a weakness, but it's certainly a strength of Veeva. It is one that, as I mentioned earlier, we're optimizing for customer success, which I think our services team is delivering that customer success as they help our customers deploy and adopt some of these very, very important applications. So, I think that's first and foremost. Secondly, as you look at some of the dynamics that we're seeing, I think it's a fact that -- or it's a function of, again, how we think about the services business, and it will be lumpy. There are -- across our product portfolio, the attach rates are different for different products. And as you stated and as I stated earlier, customers have the optionality to make decisions that are -- that may be unique to them or best for them. And what we try to do is partner with our customers to make sure that they feel very confident. What I would not say is that this is a function of services generally not being important. While our share of the pie might be reduced a little bit in some of these examples that I gave, Jenny, it's not a fact that services or professional services are unimportant to our customers to really get the maximum value out of our solutions. Jenny Cao -- Truist Securities -- Analyst Thanks for that color, Tim, and just a follow-up. I remember since November last year, Veeva was seeing some elongated deal cycles and deal timing. Since then, have you seen any of the delayed decision-making come back in the last 10 months? Like for the deals that weren't substituted by their own internal solutions, like what has been a typical time frame for that to come back, if you have seen any? And thanks for taking my question.Timothy Stephen Cabral -- Interim Chief Financial Officer Yeah, Jenny, this is Tim again. I think as you think about the conversation that we had 10 months ago, the macroeconomic headwinds were just starting to somewhat come into play. And I think that was informed in our conversation 10 months ago. As you heard Peter talk about earlier, there are still macroeconomic headwinds that are out there. But I think what we've done a nice job of and working with our customers is executing somewhat through that. So, while, yes, some deal cycles get elongated, we are very close to these customers and continue to keep them on the radar screen in terms of closing those deals at the appropriate time for them. So, I think it's a function of the macroeconomic headwinds, but we're executing through that.OperatorNext question comes from the line of Charles Rhyee with TD Cowen. Please go ahead.Charles Rhyee -- Analyst Yeah. Thanks for taking the question. Well, first, I wanted to ask about Crossix. The second quarter now, you had a solid performance here. And we've heard peers in the commercial space talk about seeing delayed projects also starting to convert. Are you seeing a thawing in the discretionary spend across biopharma companies that you think that can accelerate demand for some of your other offerings as well?Peter P. Gassner -- Co-Founder and Chief Executive Officer Charles, this is Peter. I can't call it a thawing really. No, I think sometimes, what happens is when you have a little bit of pent-up demand, sometimes that just causes -- that puts things off for later. So, I think you may be seeing that. I wouldn't call it a thawing. I just think maybe they had a little bit of pent-up, and things got pent-up enough. So, there's been no -- there's no material, for example, macro news to the negative in the last 90 days. When you have macro news to the negative, that creates a thawing. When you don't have any things that are extra to the negative, things start flowing again. But I wouldn't call it a thawing. A thawing might -- you might think there's a thaw of ice, and then there's a flood coming. It's not like that. It's just flowing a little bit better now.Charles Rhyee -- Analyst Got it. That's helpful. And then maybe a follow-up for Tim. In the billings guidance for the third quarter here, it kind of implies about 5% year over year in the third quarter, steps back up in the fourth quarter. If I look at the last few years, billings growth year over year has been a little bit more constant. Anything to call out here? I know earlier, Peter, in your prepared comments, you talked about timing issues. Just maybe any comments there would be helpful. Thank you.Timothy Stephen Cabral -- Interim Chief Financial Officer Sure, Charles. I think that guide and the shape of that guide for the back half of the year is a combination of two things. One, Q3 was a little bit of a stronger quarter last year, so a little bit of a harder compare. But also, I think where you've heard us normalize, and you can see that in the deck that we supply as a supplement to our press release, Charles, we are seeing some billing term changes. Most of it is being driven by movement of renewal dates. That also will have an impact to that normalized billing.Charles Rhyee -- Analyst Got it. Thanks.OperatorYour next question comes from the line of David Larsen with BTIG. Please go ahead.David Larsen -- Analyst Hi. Congratulations on the strong quarter. Can you talk a little bit about the competitive environment, especially on the clinical side? It sounds like you've made a lot of advancements on the clinical side over the years. So, is your portfolio suite at least comparable to like Phase Forward and Medidata, and eResearch Technologies? Do you have all of those modules that those competitors have now? And if not, when would you expect to have them? Thank you.Peter P. Gassner -- Co-Founder and Chief Executive Officer This is Peter. I'll take that one. In terms of the broadness of our offering, I believe we have the broadest offering that anybody has had before, especially when you look at -- we're able to talk to the largest of companies and the smaller ones. So, we have a clinical -- full clinical operations suite and a full clinical data management suite. For example, that's not something that Phase -- you mentioned Phase Forward or Medidata, that's really not something that they've had before. So, that's kind of how I see it. And how did we get that way? I think it's just through disciplined execution. If you look back, our first clinical product was, I believe, in the 2012 time frame with eTMF. So, we worked hard on that, got a few customers, got them live, didn't move on until they were really live, really happy. Products started to get a bit more mature, then we announced, hey, we're going to build CTMS and then EDC. And we stayed there for a while and really focused on those products, made them good. Now, we start talking about EDC and Site Connect and Study Training. So, it's been a systematic approach to build out the whole suite. And it takes that because if you want to be a great multiproduct company, it means all of your products need to be great, not just one or two of them. So, you got to concentrate, and it's hard. And that's -- we've taken a kind of a -- I would say a methodical structured approach to that because we're building this durable long-term business that should last for generations. That wasn't really what you set out to do if you're making a clinical application just in a certain area, right? That's not what you're setting out to do. So, our frame of reference and what we're trying to accomplish is just different.David Larsen -- Analyst OK. Great. And then, Peter, from your perspective, how important is it to have the commercial and the clinical side all on one single sort of Vault database? Some people I've talked to in the channel say, on the biopharma side, you really have two different kind of companies in a way. You got the commercial sales side, and then you got the research side. So, having everything on Vault maybe doesn't really matter. My view is different. I think it matters a lot. Can you maybe just talk a little bit about that from your perspective, Peter?Peter P. Gassner -- Co-Founder and Chief Executive Officer Yes, it's certainly new. It's not something that the industry is used to. When Veeva started many years ago, each functional area had different platforms. There wasn't even salesforce.com in your CRM area, right? We brought that platform into the commercial area. The regulatory had their own thing and quality, etc., each function. Now, what we're seeing is, OK, the R&D side, that's a lot of Vault, and we're bringing Vault to the commercial side. I think the advantages of that may not be apparent to customers because it's not something they've experienced before. I do think they're tremendously significant, yes. There's efficiencies in IT, that's one thing, security, vendor management, capabilities, learning, efficiencies in the system integrator network, all those types of things. But the bigger thing is it can help the customers connect commercial to clinical better. That's a CEO-level initiative at many of these companies. I think the -- having a common platform and a common data architecture will help tremendously. But that's the kind of thing that you would have to see it and experience it to believe it. That's the vision we have. I don't expect our large companies to buy in on that vision until it becomes a reality. I would say that that's first going to be experienced by smaller customers, biotechs that use Veeva in the R&D side and the clinical side. And then they go to commercialize their first product, and they see, wow, that was smooth, and that was connected because that's all on Vault. That's where it will first happen. Now, that's our vision. The main thing is you got to execute. Everybody can have a fine plan, but can you execute it on with quality? And that's what really we're focused on. We want to help the industry. And the way to do that is through the execution, which is not easy. It takes focus.David Larsen -- Analyst Great. Thanks very much.OperatorAnd that concludes our question-and-answer session. I will now turn the conference back over to Peter Gassner for closing remarks.Peter P. Gassner -- Co-Founder and Chief Executive Officer Thank you, everyone, for joining the call today, and thank you to our customers for your continued partnership and to the Veeva team for your outstanding work in the quarter. I look forward to speaking with you again at our Investor Day on November 7. Thank you.Operator[Operator signoff] Duration: 0 minutesCall participants:Gunnar Hansen -- Senior Director, Investor RelationsPeter P. Gassner -- Co-Founder and Chief Executive OfficerJoe Vruwink -- Robert W. Baird and Company -- AnalystPaul Shawah -- Executive Vice President, Commercial StrategyPeter Gassner -- Co-Founder and Chief Executive OfficerSaket Kalia -- AnalystTimothy Stephen Cabral -- Interim Chief Financial OfficerKenneth Wong -- AnalystTim Cabral -- Interim Chief Financial OfficerKen Wong -- AnalystBrian Peterson -- AnalystRishi Jaluria -- AnalystTyler Radke -- Citi -- AnalystStan Berenshteyn -- Wells Fargo Securities -- AnalystBrent Bracelin -- AnalystDylan Becker -- William Blair and Company -- AnalystJack Wallace -- AnalystCarolyn Valenti -- Goldman Sachs -- AnalystCraig Hettenbach -- AnalystRyan MacDonald -- AnalystUnknown speaker -- -- AnalystJenny Cao -- Truist Securities -- AnalystCharles Rhyee -- AnalystDavid Larsen -- Analyst More VEEV analysis All earnings call transcripts