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Veeva Announces Fiscal 2025 Third Quarter Results

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Total Revenues of $699.2M, up 13% Year Over Year
Subscription Services Revenues of $580.9M, up 17% Year Over Year

PLEASANTON, Calif., Dec. 5, 2024 /PRNewswire/ — Veeva Systems Inc. (NYSE: VEEV), a leading provider of industry cloud solutions for the global life sciences industry, today announced results for its third quarter ended October 31, 2024.

“It was a great quarter of innovation and excellent execution across the board,” said CEO Peter Gassner. “Especially significant was the hard work for the long term. We deepened a number of large, highly strategic relationships and are set to deliver the next generation of CRM this month with Vault CRM Suite to connect sales, marketing, and medical – a first for the industry.”

Fiscal 2025 Third Quarter Results:

Revenues(1): Total revenues for the third quarter were $699.2 million, up from $616.5 million one year ago, an increase of 13% year over year. Subscription services revenues for the third quarter were $580.9 million, up from $494.9 million one year ago, an increase of 17% year over year.

Operating Income and Non-GAAP Operating Income(1)(2): Third quarter operating income was $181.4 million, compared to $128.5 million one year ago, an increase of 41% year over year. Non-GAAP operating income for the third quarter was $304.0 million, compared to $234.6 million one year ago, an increase of 30% year over year.

Net Income and Non-GAAP Net Income(1)(2): Third quarter net income was $185.8 million, compared to $135.2 million one year ago, an increase of 37% year over year. Non-GAAP net income for the third quarter was $288.3 million, compared to $218.7 million one year ago, an increase of 32% year over year.

Net Income per Share and Non-GAAP Net Income per Share(1)(2): For the third quarter, fully diluted net income per share was $1.13, compared to $0.83 one year ago, while non-GAAP fully diluted net income per share was $1.75, compared to $1.34 one year ago.

“We delivered results ahead of guidance on all metrics, reflecting our operational discipline and the durability of our model,” said CFO Brian Van Wagener. “With a clear product strategy, focused execution, and large market opportunity we are well positioned for strong growth and profitability for many years to come.”

Recent Highlights:

Leading in CRM with Innovation, Execution, and Customer Success Focus – Leadership in CRM continued with a focus on customer success and product excellence. More than 30 customers are now live on Vault CRM and the seven migrations from Veeva CRM to Vault CRM are on track for completion by year end. In November, the fourth top 20 biopharma committed to Vault CRM as its commercial foundation. And as planned, this month the latest release of Vault CRM will include the full functionality of Veeva CRM and additional new capabilities, marking the availability of the next generation of CRM for the industry.

New AI Capabilities Coming to Commercial – Veeva announced three new AI innovations planned for availability in late 2025. Coming in Vault CRM is CRM Bot, a GenAI assistant, and Voice Control, a voice interface leveraging Apple Intelligence. The company also announced MLR Bot for Vault PromoMats, which uses a Veeva-hosted large language model to speed review and approval by checking quality and content of promotional materials.

Long-term Focus on the Major Quality Opportunity – With the addition of more than 25 customers in the quarter, now more than 600 customers have selected at least one of the seven Vault Quality Suite applications available today. This milestone, along with the continued expansion of current customers with additional Quality applications, is the result of Veeva’s long-term view to building clear leadership in large markets through product excellence and customer success.

Financial Outlook:

Veeva is providing guidance for its fiscal fourth quarter ending January 31, 2025 as follows:

Total revenues between $696 and $699 million.

Non-GAAP operating income of about $275 million(3).

Non-GAAP fully diluted net income per share of approximately $1.57(3).

Veeva is providing updated guidance for its fiscal year ending January 31, 2025 as follows:

Total revenues between $2,722 and $2,725 million.

Non-GAAP operating income of about $1,120 million(3).

Non-GAAP fully diluted net income per share of approximately $6.44(3).

Conference Call Information

Prepared remarks and an investor presentation providing additional information and analysis can be found on Veeva’s investor relations website at ir.veeva.com. Veeva will host a Q&A conference call at 2:00 p.m. PT today, December 5, 2024, and a replay of the call will be available on Veeva’s investor relations website.

What:

Veeva Systems Fiscal 2025 Third Quarter Results Conference Call

When:

Thursday, December 5, 2024

Time:

2:00 p.m. PT (5:00 p.m. ET)

Online Registration:

https://registrations.events/direct/Q4I86021395 

Webcast:

ir.veeva.com

___________

(1) The customer contracting change that standardized termination for convenience (TFC) rights in our master subscription agreements resulted in a change in the timing of revenue for certain customer contracts and reduced revenues, operating income and non-GAAP operating income, and net income and non-GAAP net income in the third quarter of fiscal 2024.

(2) This press release uses non-GAAP financial metrics that are adjusted for the impact of various GAAP items. See the section titled “Non-GAAP Financial Measures” and the tables entitled “Reconciliation of GAAP to Non-GAAP Financial Measures” below for details.

(3) Veeva is not able, at this time, to provide GAAP targets for operating income and fully diluted net income per share for the fourth fiscal quarter ending January 31, 2025 or the fiscal year ending January 31, 2025 because of the difficulty of estimating certain items excluded from non-GAAP operating income and non-GAAP fully diluted net income per share that cannot be reasonably predicted, such as charges related to stock-based compensation expense. The effect of these excluded items may be significant.

About Veeva Systems
Veeva is the global leader in cloud software for the life sciences industry. Committed to innovation, product excellence, and customer success, Veeva serves more than 1,000 customers, ranging from the world’s largest pharmaceutical companies to emerging biotechs. As a Public Benefit Corporation, Veeva is committed to balancing the interests of all stakeholders, including customers, employees, shareholders and the industries it serves. For more information, visit veeva.com.

Veeva uses its ir.veeva.com website as a means of disclosing material non-public information, announcing upcoming investor conferences, and for complying with its disclosure obligations under Regulation FD. Accordingly, you should monitor our investor relations website in addition to following our press releases, SEC filings, and public conference calls and webcasts.

Forward-looking Statements
This release contains forward-looking statements regarding Veeva’s expected future performance and, in particular, includes quotes from management and guidance, provided as of December 5, 2024, about Veeva’s expected future financial results. Estimating guidance accurately for future periods is difficult. It involves assumptions and internal estimates that may prove to be incorrect and is based on plans that may change. Hence, there is a significant risk that actual results could differ materially from the guidance we have provided in this release and we have no obligation to update such guidance. There are also numerous risks that have the potential to negatively impact our financial performance, including issues related to the performance, availability, security, or privacy of our products, competitive factors, customer decisions and priorities, events that impact the life sciences industry, general macroeconomic and geopolitical events (including inflationary pressures, changes in interest rates, currency exchange fluctuations and impacts related to Russia’s invasion of Ukraine and the Israel-Hamas conflict), and issues that impact our ability to hire, retain and adequately compensate talented employees. We have summarized what we believe are the principal risks to our business in a section titled “Summary of Risk Factors” on pages 36 and 37 in our filing on Form 10-Q for the period ended July 31, 2024 which you can find here. Additional details on the risks and uncertainties that may impact our business can be found in the same filing on Form 10-Q and in our subsequent SEC filings, which you can access at sec.gov. We recommend that you familiarize yourself with these risks and uncertainties before making an investment decision.

Investor Relations Contact:

Media Contact:

Gunnar Hansen

Maria Scurry

Veeva Systems Inc.

Veeva Systems Inc.

267-460-5839

781-366-7617

ir@veeva.com

pr@veeva.com 

 

VEEVA SYSTEMS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

October 31,
2024

January 31,
2024

Assets

Current assets:

Cash and cash equivalents

$      1,044,511

$         703,487

Short-term investments

4,018,475

3,324,269

Accounts receivable, net

255,817

852,172

Unbilled accounts receivable

45,472

36,365

Prepaid expenses and other current assets

82,885

86,918

Total current assets

5,447,160

5,003,211

Property and equipment, net

55,695

58,532

Deferred costs, net

22,515

23,916

Lease right-of-use assets

60,325

45,602

Goodwill

439,877

439,877

Intangible assets, net

48,527

63,017

Deferred income taxes

322,652

233,463

Other long-term assets

56,102

43,302

Total assets

$      6,452,853

$      5,910,920

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable

$           31,845

$           31,513

Accrued compensation and benefits

34,634

43,433

Accrued expenses and other current liabilities

30,906

32,980

Income tax payable

10,803

11,862

Deferred revenue

739,657

1,049,761

Lease liabilities

9,156

9,334

Total current liabilities

857,001

1,178,883

Deferred income taxes

475

2,052

Lease liabilities, noncurrent

62,545

46,441

Other long-term liabilities

31,429

38,720

Total liabilities

951,450

1,266,096

Stockholders’ equity:

Common stock

2

2

Additional paid-in capital

2,248,890

1,915,002

Accumulated other comprehensive loss

(6,459)

(10,637)

Retained earnings

3,258,970

2,740,457

Total stockholders’ equity

5,501,403

4,644,824

Total liabilities and stockholders’ equity

$      6,452,853

$      5,910,920

 

VEEVA SYSTEMS INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands, except per share data)

(Unaudited)

Three months ended
October 31,

Nine months ended
October 31,

2024

2023

2024

2023

Revenues:

Subscription services(4)

$     580,850

$     494,912

$  1,676,082

$  1,380,095

Professional services and other(5)

118,357

121,593

349,651

352,960

Total revenues

699,207

616,505

2,025,733

1,733,055

Cost of revenues(6):

Cost of subscription services

82,638

74,435

239,577

213,179

Cost of professional services and other

91,751

93,247

279,068

290,184

Total cost of revenues

174,389

167,682

518,645

503,363

Gross profit

524,818

448,823

1,507,088

1,229,692

Operating expenses(6):

Research and development

172,411

161,278

511,551

465,466

Sales and marketing

98,695

96,773

297,524

282,269

General and administrative

72,359

62,283

195,001

187,887

Total operating expenses

343,465

320,334

1,004,076

935,622

Operating income

181,353

128,489

503,012

294,070

Other income, net

60,937

42,187

171,239

111,260

Income before income taxes

242,290

170,676

674,251

405,330

Income tax provision

56,482

35,518

155,738

27,023

Net income

$     185,808

$     135,158

$     518,513

$     378,307

Net income per share:

Basic

$           1.15

$           0.84

$           3.21

$           2.36

Diluted

$           1.13

$           0.83

$           3.15

$           2.32

Weighted-average shares used to compute net income per share:

Basic

161,987

160,768

161,707

160,344

Diluted

164,979

163,761

164,838

163,129

Other comprehensive income:

Net change in unrealized (loss) gain on available-for-sale investments

$          (738)

$       (2,637)

$         5,576

$       (6,100)

Net change in cumulative foreign currency translation loss

(146)

(518)

(1,398)

(309)

Comprehensive income

$     184,924

$     132,003

$     522,691

$     371,898

(4) Includes subscription services revenues from the following product areas:

Veeva Commercial Solutions

$     278,377

$     251,167

$     811,503

$     733,921

Veeva R&D Solutions

302,473

243,745

864,579

646,174

Total subscription services

$     580,850

$     494,912

$  1,676,082

$  1,380,095

(5) Includes professional services and other revenues from the following product areas:

Veeva Commercial Solutions

$       45,855

$       47,899

$     139,695

$     140,082

Veeva R&D Solutions

72,502

73,694

209,956

212,878

Total professional services and other

$     118,357

$     121,593

$     349,651

$     352,960

(6) Includes stock-based compensation as follows:

Cost of revenues:

Cost of subscription services

$         1,696

$         1,604

$         4,892

$         4,857

Cost of professional services and other

12,929

12,943

38,640

39,881

Research and development

48,014

45,711

138,741

129,909

Sales and marketing

21,214

23,460

67,928

67,084

General and administrative

34,006

17,508

71,945

53,109

Total stock-based compensation

$     117,859

$     101,226

$     322,146

$     294,840

 

VEEVA SYSTEMS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Nine months ended
October 31,

2024

2023

Cash flows from operating activities

Net income

$     518,513

$     378,307

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

29,451

24,000

Reduction of operating lease right-of-use assets

8,348

8,885

Accretion of discount on short-term investments

(20,442)

(19,298)

Stock-based compensation

322,146

294,840

Amortization of deferred costs

11,507

12,843

Deferred income taxes

(91,231)

(80,132)

(Gain) loss on foreign currency from mark-to-market derivative

(880)

841

Bad debt expense

415

630

Changes in operating assets and liabilities:

Accounts receivable

595,940

446,921

Unbilled accounts receivable

(9,107)

37,337

Deferred costs

(10,106)

(751)

Prepaid expenses and other current and long-term assets

1,354

(6,806)

Accounts payable

424

(5,502)

Accrued expenses and other current liabilities

(10,240)

(9,572)

Income taxes payable

(1,059)

1,614

Deferred revenue

(321,090)

(228,120)

Operating lease liabilities

(7,131)

(4,263)

Other long-term liabilities

3,695

1,796

Net cash provided by operating activities

1,020,507

853,570

Cash flows from investing activities

Purchases of short-term investments

(2,206,521)

(2,142,068)

Maturities and sales of short-term investments

1,537,874

1,170,881

Long-term assets

(15,799)

(18,461)

Net cash used in investing activities

(684,446)

(989,648)

Cash flows from financing activities

Proceeds from exercise of common stock options

65,104

52,184

Taxes paid related to net share settlement of equity awards

(59,800)

(57,888)

Net cash provided by (used in) financing activities

5,304

(5,704)

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

(1,346)

(973)

Net change in cash, cash equivalents, and restricted cash

340,019

(142,755)

Cash, cash equivalents, and restricted cash at beginning of period

706,670

889,650

Cash, cash equivalents, and restricted cash at end of period

$  1,046,689

$     746,895

Supplemental disclosures of other cash flow information:

Excess tax benefits from employee stock plans

$         5,160

$       68,575

Non-GAAP Financial Measures
In Veeva’s public disclosures, Veeva has provided non-GAAP measures, which it defines as financial information that has not been prepared in accordance with generally accepted accounting principles in the United States, or GAAP. In addition to its GAAP measures, Veeva uses these non-GAAP financial measures internally for budgeting and resource allocation purposes and in analyzing its financial results. For the reasons set forth below, Veeva believes that excluding the following items provides information that is helpful in understanding its operating results, evaluating its future prospects, comparing its financial results across accounting periods, and comparing its financial results to its peers, many of which provide similar non-GAAP financial measures.

Excess tax benefits. Excess tax benefits from employee stock plans are dependent on previously agreed-upon equity grants to our employees, vesting of those grants, stock price, and exercise behavior of our employees, which can fluctuate from quarter to quarter. Because these fluctuations are not directly related to our business operations, Veeva excludes excess tax benefits for its internal management reporting processes. Veeva management also finds it useful to exclude excess tax benefits when assessing the level of cash provided by operating activities. Given the nature of the excess tax benefits, Veeva believes excluding it allows investors to make meaningful comparisons between our operating cash flows from quarter to quarter and those of other companies.

Stock-based compensation expenses. Veeva excludes stock-based compensation expenses primarily because they are non-cash expenses that Veeva excludes from its internal management reporting processes. Veeva’s management also finds it useful to exclude these expenses when they assess the appropriate level of various operating expenses and resource allocations when budgeting, planning and forecasting future periods. Moreover, because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use, Veeva believes excluding stock-based compensation expenses allows investors to make meaningful comparisons between our recurring core business operating results and those of other companies.

Amortization of purchased intangibles. Veeva incurs amortization expense for purchased intangible assets in connection with acquisitions of certain businesses and technologies. Amortization of intangible assets is a non-cash expense and is inconsistent in amount and frequency because it is significantly affected by the timing, size of acquisitions and the inherent subjective nature of purchase price allocations. Because these costs have already been incurred and cannot be recovered, and are non-cash expenses, Veeva excludes these expenses for its internal management reporting processes. Veeva’s management also finds it useful to exclude these charges when assessing the appropriate level of various operating expenses and resource allocations when budgeting, planning and forecasting future periods. Investors should note that the use of intangible assets contributed to Veeva’s revenues earned during the periods presented and will contribute to Veeva’s future period revenues as well.

Litigation settlement. We exclude costs related to the settlement of certain litigation matters because they are non-recurring and outside the ordinary course of business. Because these costs are unrelated to our day-to-day business operations, we believe excluding them enables more consistent evaluation of our operating results.

Income tax effects on the difference between GAAP and non-GAAP costs and expenses. The income tax effects that are excluded relate to the imputed tax impact on the difference between GAAP and non-GAAP costs and expenses due to stock-based compensation and purchased intangibles for GAAP and non-GAAP measures.

There are limitations to using non-GAAP financial measures because non-GAAP financial measures are not prepared in accordance with GAAP and may be different from non-GAAP financial measures provided by other companies. The non-GAAP financial measures are limited in value because they exclude certain items that may have a material impact upon our reported financial results. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by Veeva’s management about which items are adjusted to calculate its non-GAAP financial measures. Veeva compensates for these limitations by analyzing current and future results on a GAAP basis as well as a non-GAAP basis and also by providing GAAP measures in its public disclosures.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Veeva encourages its investors and others to review its financial information in its entirety, not to rely on any single financial measure to evaluate its business, and to view its non-GAAP financial measures in conjunction with the most directly comparable GAAP financial measures. A reconciliation of GAAP to the non-GAAP financial measures has been provided in the tables below.

VEEVA SYSTEMS INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(Dollars in thousands)

(Unaudited)

The following tables reconcile the specific items excluded from GAAP metrics in the calculation of non-GAAP metrics for the periods shown below:

Reconciliation of Net Cash Provided by Operating Activities (GAAP basis to non-GAAP basis)

Three months ended
October 31,

Nine months ended
October 31,

2024

2023

2024

2023

Net cash provided by operating activities on a GAAP basis

$  164,117

$    82,598

$  1,020,507

$  853,570

Excess tax benefits from employee stock plans

(898)

(3,275)

(5,160)

(68,575)

Net cash provided by operating activities on a non-GAAP basis

$  163,219

$    79,323

$  1,015,347

$  784,995

Net cash used in investing activities on a GAAP basis

$  (298,226)

$  (73,324)

$  (684,446)

$  (989,648)

Net cash provided by (used in) financing activities on a GAAP basis

$    12,960

$    (6,889)

$      5,304

$    (5,704)

Reconciliation of Financial Measures (GAAP basis to non-GAAP basis)

Three months ended
October 31,

Nine months ended
October 31,

2024

2023

2024

2023

Cost of subscription services revenues on a GAAP basis

$    82,638

$    74,435

$  239,577

$  213,179

Stock-based compensation expense

(1,696)

(1,604)

(4,892)

(4,857)

Amortization of purchased intangibles

(1,043)

(1,126)

(3,265)

(3,343)

Cost of subscription services revenues on a non-GAAP basis

$    79,899

$    71,705

$  231,420

$  204,979

Gross margin on subscription services revenues on a GAAP basis

85.8 %

85.0 %

85.7 %

84.6 %

Stock-based compensation expense

0.3

0.3

0.3

0.3

Amortization of purchased intangibles

0.1

0.2

0.2

0.2

Gross margin on subscription services revenues on a non-GAAP basis

86.2 %

85.5 %

86.2 %

85.1 %

Cost of professional services and other revenues on a GAAP basis

$    91,751

$    93,247

$  279,068

$  290,184

Stock-based compensation expense

(12,929)

(12,943)

(38,640)

(39,881)

Amortization of purchased intangibles

(139)

(139)

(412)

(411)

Cost of professional services and other revenues on a non-GAAP basis

$    78,683

$    80,165

$  240,016

$  249,892

Gross margin on professional services and other revenues on a GAAP basis

22.5 %

23.3 %

20.2 %

17.8 %

Stock-based compensation expense

10.9

10.6

11.1

11.3

Amortization of purchased intangibles

0.1

0.2

0.1

0.1

Gross margin on professional services and other revenues on a non-GAAP basis

33.5 %

34.1 %

31.4 %

29.2 %

Gross profit on a GAAP basis

$  524,818

$  448,823

$  1,507,088

$  1,229,692

Stock-based compensation expense

14,625

14,547

43,532

44,738

Amortization of purchased intangibles

1,182

1,265

3,677

3,754

Gross profit on a non-GAAP basis

$  540,625

$  464,635

$  1,554,297

$  1,278,184

Gross margin on total revenues on a GAAP basis

75.1 %

72.8 %

74.4 %

71.0 %

Stock-based compensation expense

2.1

2.4

2.1

2.6

Amortization of purchased intangibles

0.1

0.2

0.2

0.2

Gross margin on total revenues on a non-GAAP basis

77.3 %

75.4 %

76.7 %

73.8 %

Research and development expense on a GAAP basis

$  172,411

$  161,278

$  511,551

$  465,466

Stock-based compensation expense

(48,014)

(45,711)

(138,741)

(129,909)

Amortization of purchased intangibles

(29)

(29)

(85)

(85)

Research and development expense on a non-GAAP basis

$  124,368

$  115,538

$  372,725

$  335,472

Three months ended
October 31,

Nine months ended
October 31,

2024

2023

2024

2023

Sales and marketing expense on a GAAP basis

$    98,695

$    96,773

$  297,524

$  282,269

Stock-based compensation expense

(21,214)

(23,460)

(67,928)

(67,084)

Amortization of purchased intangibles

(3,544)

(3,555)

(10,558)

(10,550)

Sales and marketing expense on a non-GAAP basis

$    73,937

$    69,758

$  219,038

$  204,635

General and administrative expense on a GAAP basis

$    72,359

$    62,283

$  195,001

$  187,887

Stock-based compensation expense

(34,006)

(17,508)

(71,945)

(53,109)

Amortization of purchased intangibles

(57)

(57)

(170)

(169)

Litigation settlement

—

—

(5,000)

—

General and administrative expense on a non-GAAP basis

$    38,296

$    44,718

$  117,886

$  134,609

Operating expense on a GAAP basis

$  343,465

$  320,334

$  1,004,076

$  935,622

Stock-based compensation expense

(103,234)

(86,679)

(278,614)

(250,102)

Amortization of purchased intangibles

(3,630)

(3,641)

(10,813)

(10,804)

Litigation settlement

—

—

(5,000)

—

Operating expense on a non-GAAP basis

$  236,601

$  230,014

$  709,649

$  674,716

Operating income on a GAAP basis

$  181,353

$  128,489

$  503,012

$  294,070

Stock-based compensation expense

117,859

101,226

322,146

294,840

Amortization of purchased intangibles

4,812

4,906

14,490

14,558

Litigation settlement

—

—

5,000

—

Operating income on a non-GAAP basis

$  304,024

$  234,621

$  844,648

$  603,468

Operating margin on a GAAP basis

25.9 %

20.8 %

24.8 %

17.0 %

Stock-based compensation expense

16.9

16.4

15.9

17.0

Amortization of purchased intangibles

0.7

0.9

0.8

0.8

Litigation settlement

—

—

0.2

—

Operating margin on a non-GAAP basis

43.5 %

38.1 %

41.7 %

34.8 %

Net income on a GAAP basis

$  185,808

$  135,158

$  518,513

$  378,307

Stock-based compensation expense

117,859

101,226

322,146

294,840

Amortization of purchased intangibles

4,812

4,906

14,490

14,558

Litigation settlement

—

—

5,000

—

Income tax effect on non-GAAP adjustments(7)

(20,160)

(22,612)

(57,598)

(123,070)

Net income on a non-GAAP basis

$  288,319

$  218,678

$  802,551

$  564,635

Diluted net income per share on a GAAP basis

$        1.13

$        0.83

$        3.15

$        2.32

Stock-based compensation expense

0.71

0.62

1.95

1.81

Amortization of purchased intangibles

0.03

0.03

0.09

0.09

Litigation settlement

—

—

0.03

—

Income tax effect on non-GAAP adjustments(7)

(0.12)

(0.14)

(0.35)

(0.76)

Diluted net income per share on a non-GAAP basis

$        1.75

$        1.34

$        4.87

$        3.46

________________________

(7)

For the three and nine months ended October 31, 2024 and 2023, management used an estimated annual effective non-GAAP tax rate of 21.0%.

 

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Unity: The Convergence of the Three Main Red Army Forces

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BEIJING, Oct. 21, 2026 /PRNewswire/ — An interview from China.org.cn with Wang Xiaohui and David Ferguson on the Long March:

Wang Xiaohui:

We have all been through something similar — a group of people disagreeing with one another, with each side holding sound reasons to believe their own judgment is correct.

In such moments, should they part ways, or find another path forward together?

David Ferguson:

The word “unity” is often understood as a strategy. People unite when they face a common enemy, and when that enemy disappears, the cooperation ends with it. But I’ve always wondered if there is a different kind of unity — one not forged by a common enemy, but by a common destination. A unity that isn’t temporary, that doesn’t fall apart the moment circumstances change. I wanted to find out.

Wang Xiaohui:

An arduous expedition like the Long March posed unparalleled trials for any military unit.

Bitter cold on snow-capped mountains, hidden mire across marshlands, and dangers lurking every step of the way; food and warm clothes were constantly scarce, while enemies and artillery fire were relentless. Even so, through the Long March, these poorly equipped and raggedly dressed Red Army troops remained tightly bonded as one.

This bond was not coerced by harsh military discipline, but arose spontaneously from every soldier’s heart. Before they even set off, shared ideals and conviction had already taken deep root within every soldier, steeling their resolve to follow the Communist Party of China without hesitation. Along the trail, officers and soldiers of the Red Army ate from the same pots and wore uniforms made from the same coarse cloth. High-ranking commanders like Zhu De and Peng Dehuai covered most of the journey on foot alongside their troops, leaving their horses to the ill and wounded, while splitting their last rations with soldiers. Amid food shortages, even when columns in the front discovered edible greens, they would never dig them all up; instead, they sent words to rear units so that all troops could share.

The Red Army’s unity took root in shared ideals, flourished under equal treatment for all, and was forged through countless moments of entrusting each other with their lives. It also became the unshakable foundation that carried them through every ordeal.

In the late autumn of 1936, the Loess Plateau in northwestern China witnessed two hopeful rendezvous, marking the Long March’s triumphant close. First in Huining, soldiers of the First and Fourth Front Armies embraced in a long-awaited reunion. Just over 10 days later, at Jiangtaibu, the waiting First Front Army finally greeted the travel-worn soldiers of the Second Front Army.

Many of these soldiers had never met before, yet they greeted one another like long-lost brothers, eyes brimming with tears as they clasped hands. Officers and soldiers of the First Front Army sent whatever supplies they had saved up to their brother troops. Three battle-hardened columns merged into a mighty iron stream across the plateau. Just one month later, they fought in coordinated formation to secure triumph in the battle of Shanchengbao, putting a glorious full stop to the Long March.

When scattered sparks merge, inherent unity surges into a mighty force, powerful enough to rewrite an army’s fate and shift the course of a nation’s history.

At the time, Japanese invaders advanced deeper into China, occupying more and more territory, yet the civil war persisted. The CPC clearly understood that brutal conflict among the Chinese would only play to the invaders’ hands, and only national unity could safeguard the motherland. The CPC publicly called for an end to the civil war and joint resistance against Japanese invaders, officially proposed to build the national united front against Japanese aggression, and even took the initiative to halt military operations and withdraw troops as a gesture of goodwill — when the survival of a nation hung by a thread, they chose to unite all Chinese people.

The two KMT officers, Zhang Xueliang and Yang Hucheng, who were stationed in the northwest, witnessed the nation’s peril and were touched by the CPC’s advocacy of a united resistance. Resolved to collaborate with the CPC to fend off Japanese aggression, Zhang and Yang repeatedly pleaded with Chiang Kai-shek to shift focus to national defense, but to no avail. Ultimately, they detained Chiang by force, which later became known as the Xi’an Incident.

When word spread of Chiang’s detention, many assumed the CPC would demand a public trial, given years of bitter partisan strife. Instead, Zhou Enlai personally traveled to Xi’an with the CPC delegation to mediate, laying out the stakes for all parties concerned: executing Chiang would only result in a much larger-scale civil war, handing the Japanese aggressors golden opportunities to advance further into China. The only path to a promising future for the Chinese nation lay in a peaceful settlement that would compel Chiang to join the resistance against Japanese aggression.

Setting aside partisan divisions and prioritizing the supreme interests of the nation — this was the answer delivered by the CPC. At last, the Xi’an Incident was settled in peace, bringing an end to a decade of war. Since then, the Chinese nation finally stood united in fighting back against foreign invasion.

Nearly a century has passed, yet the spirit of unity forged on the Long March has never faded.

In September 1949, the First Plenary Session of the Chinese People’s Political Consultative Conference (CPPCC) was convened, officially instituting the system of multiparty cooperation and political consultation under the leadership of the Communist Party of China. The spirit of solidarity tempered amid the Long March was thereafter embedded in the very fabric of China’s governance system, with unity becoming one of its enduring tenets.

From the early reconstruction years since the founding of the People’s Republic of China in 1949, through the era of reform and opening up since 1978, to today’s march toward China’s modernization, each successive trial has burnished this core spirit of unity. In the fight against absolute poverty, the whole nation pulled together as a single force: the more developed eastern regions lent robust support to underdeveloped western regions, officials devoted themselves to working at grassroots communities, and local residents worked hard and strove for self-improvement. Together, hundreds of millions of Chinese worked to eradicate absolute poverty nationwide. When earthquakes and floods struck, rescue teams rushed to disaster zones from every corner of the country, while relief supplies and charitable donations poured in ceaselessly.

From the helping hands extended between soldiers along the Long March to the nationwide solidarity repeatedly demonstrated today, the essence of unity has never changed. It was the key that carried the Red Army through seemingly impossible odds, and it endures as China’s bedrock strength that propels China forward to this day.

David Ferguson:

After hearing the stories of the reunion of the three main forces of the Red Army and the Xi’an Incident, I found my answer.

The Long March showed me that unity is a condition for survival — not in the sense of “I need you for now, so let’s work together.” Rather, it was “We believe in a common cause, so we must stand together.” That kind of unity does not dissolve when the danger is gone, because it is rooted not in fear, but in conviction.

Whether I look at stories of the Long March or at China’s development today, what strikes me is not simply unity itself. What gives unity its power is the shared ideal that enables people to stand together, and the common mission that at critical moments, enables them to rise above the interests of the individual, of groups, and even of political parties.

Wang Xiaohui:

From the arduous trails of the Long March to the contemporary journey of national rejuvenation, when a group of people or a whole nation stand united around common ideals, they will always arrive at the future they hoped for, no matter how lengthy and winding the road ahead is.

China Mosaic 
http://www.china.org.cn/video/node_7230027.htm 

Unity: The Convergence of the Three Main Red Army Forces
http://www.china.org.cn/2026-10/20/content_118741729.shtml 

 

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SOURCE China.org.cn

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KingClean Debuts at the 140th Canton Fair with One-Stop ODM Solutions for Global Brands

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GUANGZHOU, China, Oct. 21, 2026 /PRNewswire/ — KingClean, a global leader in home appliances and cleaning solutions, showcased its latest smart home product line at the 140th Canton Fair, which includes cleaning appliances, kitchen and coffee equipment, drinking equipment, personal care and air comfort products. During the exhibition, KingClean held in-depth discussions with global channel partners at Booths E30–36 and F13–19, Hall 2.2, Zone A.

KingClean showcased over 40 innovative products. The cleaning appliances exhibition area covers cordless stick vacuum cleaners with docking stations, upright 3-in-1 wet-and-dry vacuum cleaner with steam, spot cleaner with steam, cordless mattress cleaners and canister. The kitchen appliance exhibition area showcases products such as cooking robot, commercial blenders, and fully automatic coffee machines. The water & beverage solutions area presents desktop intelligent water purifiers with functions of water purification, sparkling water, ice making, and tea brewing. In addition, KingClean balances personal care with environmental comfort, showcasing water-ion turbofan hair dryers, desktop air purifiers, and smart air circulation fans.

The collaboration between high-performance cleaning equipment and intelligent base stations is the key direction of this exhibition. The exhibits include cordless vacuum cleaners equipped with high-power motors, dust‑cup or dust‑bag docking stations, charging and automatic cleaning functions, as well as floor cleaning vacuum cleaners that integrate functions of steam cleaning, automatic water refilling, and hot air drying. Multiple reference models intuitively demonstrate how the same technology platform can flexibly adapt to different power levels, structural schemes, and accessory configurations.

KingClean also showcased a series of home fully automatic coffee machines, smoothies and ice-making equipment, as well as desktop intelligent beverage purifiers that supported flexible combinations of sparkling water, ice water, tea brewing, and coffee related modules in the beverage area. These exhibits could be further customized based on the customer’s beverage menus, usage frequency, and after-sales mode.

“We connect globally through innovative products, focusing on smart solutions that improve life and strengthen our leadership in the smart home industry” said Nate Yang, Senior Marketing Director at KingClean Electric Co., Ltd.

About KingClean

KingClean was founded in 1994 and is headquartered in Suzhou, China. The company specializes in high-end smart home appliances and mechatronic products, with motor as our core technology.

For more information, visit http://www.kingclean.com.

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Husqvarna Group: INTERIM REPORT JANUARY – SEPTEMBER 2026

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STOCKHOLM, Oct. 21, 2026 /PRNewswire/ — 

Consistent strategy execution in a continued challenging market 

Third quarter 2026

Net sales decreased organically by 5%.Net sales decreased by 2% to SEK 9,012m (9,204), and included a positive impact of 3% from changes in exchange rates.Operating income amounted to SEK -334m (141) and the operating margin was -3.7% (1.5).Items affecting comparability (IAC) amounted to SEK -88m. These were primarily related to the execution of cost-saving initiatives.Excluding IAC, operating income amounted to SEK -246m (140), and the operating margin was -2.7% (1.5).Earnings per share (EPS) after dilution amounted to SEK -0.70 (-0.02) and EPS excluding IAC and after dilution amounted to SEK -0.58 (-0.02).Free operating cash flow was SEK 2,422m (2,423).Net debt was SEK 9.4bn (9.9).

January – September 2026

Net sales decreased organically by 2%.Net sales decreased by 5% to SEK 37,356m (39,184), and included an impact of -3% from changes in exchange rates.Operating income amounted to SEK 2,977m (3,735) and the operating margin was 8.0% (9.5).Items affecting comparability (IAC) amounted to SEK -445m. These were primarily related to the execution of cost-saving initiatives.Excluding IAC, operating income amounted to SEK 3,421m (3,742), and the operating margin was 9.2% (9.5).IEEPA-related tariff refunds of SEK 240m were recognized in COGS during the second quarter.Earnings per share (EPS) after dilution amounted to SEK 3.14 (4.43) and EPS excluding IAC and after dilution amounted to SEK 3.74 (4.44).Free operating cash flow was SEK 4,891m (4,743).

CEO Comment

We are making solid progress on our strategic priorities. Our cost savings program remains on track, recent product launches are receiving encouraging customer feedback, and we are broadening our presence across sales channels. Although these measures have not yet fully offset current market headwinds, they reinforce our confidence in the Group’s long-term competitiveness and prospects.

Financial performance summary

Net sales were SEK 9,012m (9,204), representing an organic decline of 5% in the quarter, primarily driven by continued weakness in Europe. Organic sales in the Husqvarna Forest & Garden Division declined by 10%, sales in the Husqvarna Construction Division were unchanged, while the Gardena Division delivered solid organic growth of 8%. Performance in the Husqvarna Forest & Garden Division was significantly affected by the widespread drought across large parts of Europe and continued weak consumer demand in key markets, including Germany and France. In contrast, strong growth in the Gardena Division’s Watering business highlighted the resilience of our diversified portfolio, gaining market shares in key markets, and the Husqvarna Construction Division has continued good momentum in its aftermarket business. I am also encouraged by continued growth across all three divisions in North America.

Operating income excluding IAC was SEK -246m (140), corresponding to a margin of -2.7% (1.5). The result reflected lower volumes in the Husqvarna Forest & Garden Division, an unfavorable product mix, inventory reductions and cost increases on raw materials and logistics costs. Free operating cash flow was stable at SEK 2,422m (2,423), as lower operating income was offset by changes in working capital, primarily driven by reduced inventories. We further strengthened the balance sheet, reducing net debt to SEK 9.4bn (9.9).

Executing on cost savings while navigating cost headwinds

Our transformative cost savings program remains on track to deliver SEK 3bn in gross savings by the end of 2028. Year-to-date savings reached approximately SEK 935m, including around SEK 305m in the third quarter, driven mainly by sourcing activities and personnel reductions. However, lower volumes, inventory reductions and cost headwinds continue to weigh on profitability. We are responding with targeted price increases, supply chain actions and product cost optimization, which will partly offset these pressures, although near-term headwinds are expected to remain.

We are advancing our asset-light strategy through further outsourcing initiatives. We will transfer production of selected Husqvarna-branded battery handheld products from Europe to Asia, using both our own facilities and external partners to enhance efficiency and competitiveness.

In addition, the ongoing discontinuation of the stone diamond tool business in the Construction Division, the phase-out of our Brastad component factory in the Husqvarna Forest & Garden Division and relocation of selected activities within Gardena’s European manufacturing network are progressing according to plan.

Unlocking the next phase of robotics growth

Our robotic lawn mowing business faced a difficult quarter, with adverse weather, competitive headwinds, and elevated channel partner inventories in Europe constraining demand for Husqvarna- and Gardena-branded products. Although recent performance has fallen short of expectations, we remain the clear market leader and we are confident in our strategy and longer-term development.

The strategic review of the Powered Garden BPU in the Gardena Division is ongoing and we aim to provide an update in the beginning of next year. Our priorities in the Husqvarna Forest & Garden Residential Robotics BPU include expanding our retail footprint and product range across price points and channels, strengthening the robotics organization and development model.

During the quarter, the US became the largest market in terms of sales for our Professional Robotics BPU, driven mainly by continued growth in the golf segment. Upcoming product launches and broader US distribution are expected to further strengthen our competitive position next season. We are also encouraged to be the first robotics company to receive conditional approval from the Federal Communications Commission (FCC) for foreign-produced advanced robotic devices in the US market.

Building a stronger, more competitive Husqvarna Group

We are accelerating change across the Group to create a leaner, more agile and asset-light organization. By challenging established ways of working, simplifying operations and acting decisively, we are strengthening competitiveness and profitability in the longer-term. Significant work remains, but I am confident we are moving in the right direction.

When consumer sentiment recovers, particularly in Europe, we will be well positioned to capture growth and improve earnings.

Glen Instone, CEO

Webcast presentation and telephone conference

A webcast presentation of the Q3 report hosted by Glen Instone, CEO and Patrik Johnson, CFO will be held at 9:00 CEST on Oct 21, 2026.
To view the presentation, please use this link.
The dial-in to the telephone conference (to ask questions):
+46 (0) 8 505 100 31 (Sweden) or +44 203 059 58 63 (UK)

Contact
Emelie Alm, Vice President, Investor Relations
+46 70 514 64 14

Husqvarna AB (publ), P.O. Box 7454, SE-103 92 Stockholm
Hälsingegatan 49, +46 8 738 90 00, www.husqvarnagroup.com

Reg. Nr: 556000-5331

(NASDAQ STOCKHOLM: HUSQ-A) (NASDAQ STOCKHOLM: HUSQ-B)

This report contains insider information that Husqvarna AB is required to disclose under the EU Market Abuse Regulation. The information was submitted for publication, through the contact person set out above, at 07:00 CEST on Oct 21, 2026.

Factors affecting forward-looking statements

This report contains some forward-looking statements. These statements are subject to risks and uncertainties that may give rise to major deviations in the result due to several aspects. These aspects include, among other things: consumer demand and market conditions in the geographical areas and lines of business in which Husqvarna operates, the effects of currency fluctuations, downward pressure on prices due to competition, success in developing new products, outcome of product responsibility litigation and progress in terms of reaching the goals set for productivity and efficient use of capital.

This information was brought to you by Cision http://news.cision.com

https://news.cision.com/husqvarna-group/r/interim-report-january—september-2026,c4412543

The following files are available for download:

https://mb.cision.com/Main/996/4412543/4328797.pdf

Interim report Q3 2026 Husqvarna Group

 

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