Veeva Systems (VEEV) Q2 2026 Earnings Call August 27, 2025 05:00 PM ET Company ParticipantsGunnar Hansen - Director of IRPeter Gassner - Founder, CEO & DirectorBrian Van Wagener - CFOPaul Shawah - EVP, Commercial StrategyBrian Peterson - Managing DirectorDavid Windley - Managing DirectorRishi Jaluria - MD & Software Equity ResearchCraig Hettenbach - Executive DirectorJailendra Singh - Managing DirectorSaket Kalia - Managing DirectorJeff Garro - Managing DirectorDavid Larsen - Managing DirectorConference Cal ...

Financial Data and Key Metrics Changes - Total revenue for the quarter was $789 million, with non-GAAP operating income of $353 million, exceeding guidance [6][7]. - The company expressed confidence in its $6 billion revenue plan over the next five years, indicating strong performance and growth potential [22]. Business Line Data and Key Metrics Changes - R&D subscriptions and services showed significant upside, indicating a broad-based growth across all areas [19][40]. - The resolution of the lawsuit with IQVIA is expected to enhance the commercial cloud offerings, particularly in integrating IQVIA data into Veeva's products [12][14]. Market Data and Key Metrics Changes - The company reported strong execution across its business segments, with no specific areas of weakness despite macroeconomic uncertainties [124]. - The commercial cloud segment is anticipated to benefit from the resolution with IQVIA, allowing for a more comprehensive solution for customers [73][86]. Company Strategy and Development Direction - Veeva is focusing on enhancing its AI capabilities, with plans to integrate AI agents into its existing platforms, which is expected to create significant value for the industry over time [28][30]. - The company aims to leverage its structural advantages in the life sciences sector to lead in industry-specific cloud applications and AI agents [46][48]. Management's Comments on Operating Environment and Future Outlook - Management noted that while there is elevated uncertainty in the macro environment, customer engagement remains strong, and the pipeline is building effectively [124]. - The company does not expect immediate revenue contributions from the IQVIA resolution but sees it as a long-term growth driver [90]. Other Important Information - The company is working on refining its migration tooling to facilitate customer transitions to the Vault CRM, with over 20 customers already migrated and 300 more planned [106]. - Veeva's business consulting services are seen as a critical component in driving AI adoption and helping customers navigate changes in workflows [111][115]. Q&A Session Summary Question: What led to the resolution of the lawsuit with IQVIA? - The resolution was driven by changes in the industry landscape and a mutual recognition that collaboration would benefit both companies and their customers [12][14]. Question: How does the resolution with IQVIA unlock new opportunities? - It removes previous barriers to integrating IQVIA data into Veeva's products, enhancing the commercial cloud offerings and allowing for more comprehensive solutions [14][73]. Question: What is the outlook for R&D subscription growth? - R&D subscriptions are expected to continue growing, supported by strong execution across all areas and a stable environment [40][76]. Question: How does Veeva plan to leverage AI in its offerings? - Veeva plans to integrate AI agents into its platforms, enhancing productivity and creating new revenue opportunities over time [28][30]. Question: What is the customer reaction to the IQVIA resolution? - Customer feedback has been overwhelmingly positive, as the resolution alleviates previous integration issues and opens up new possibilities for collaboration [34][36]. Question: What are the expectations for commercial subscriptions moving forward? - The company anticipates continued strength in commercial subscriptions, particularly driven by the Crossix product, despite some flatness in the recent quarter [74][76]. Question: How does Veeva differentiate itself in the AI space? - Veeva's structural advantage lies in its deep industry-specific applications, allowing for seamless integration of AI agents into existing workflows [94][96].

Core Insights - Veeva Systems (VEEV) has experienced a stock increase of nearly 29% over the past three months, driven by strong Q1 fiscal 2026 earnings with revenues of $759 million, a 17% year-over-year increase, and a 46% adjusted operating margin, indicating efficient growth and profitability [1][8][12] - The company is on track to meet the Zacks Consensus Estimate of $3.09 billion in revenues for fiscal 2026, reinforcing confidence in its long-term growth trajectory [1] Growth Drivers - A significant portion of Veeva's growth is attributed to the rollout of its next-generation customer relationship management platform, Vault CRM, which has over 80 customers and is expected to more than double by the end of 2026 [2][9] - Veeva is preparing to launch new AI features aimed at enhancing productivity and streamlining workflows, including tools like the MLR Bot and CRM Bot [10] - The adoption of data and analytics tools such as Crossix and CRM Pulse is increasing, further solidifying Veeva's position as a trusted partner in the life sciences sector [11] Market Performance - Veeva Systems' shares have outperformed the Zacks Medical Market sector and industry peers, with a 29.5% increase over the past three months compared to 12.4% for Certara and 3.5% for IQVIA, while Health Catalyst shares have decreased by 1.7% [3][4] - The Zacks Medical Information System industry has improved by 12.3% during the same period, indicating Veeva's strong relative performance [4] Financial Projections - Veeva Systems is projected to achieve a sales growth of 12.7% in fiscal 2026 and 11.7% in fiscal 2027, with earnings per share expected to increase by 15.8% in fiscal 2026 and 8.9% in fiscal 2027, reflecting improved operational efficiency [12] Competitive Landscape - The life sciences industry is facing market saturation, which may limit Veeva's ability to maintain historical CRM sales growth rates as many large enterprises have already adopted CRM solutions [15][16] - Increased competition from traditional CRM providers and emerging AI-powered platforms poses additional challenges for Veeva Systems [15][16] Valuation Concerns - VEEV stock is currently trading at a forward price-to-sales (P/S) ratio of 14.1X, significantly higher than the industry average of 5.81X, suggesting that the stock may be overvalued [17]

Core Insights - Doximity, Inc. has developed a client engagement and retention strategy centered on integrated, physician-first tools across its Marketing, Hiring, and Workflow Solutions, resulting in over 620,000 unique providers using its clinical tools in Q4 of fiscal 2025 [1] Group 1: Marketing Solutions - Doximity's Marketing Solutions utilize AI and machine learning to deliver personalized campaigns, enabling pharmaceutical and health system clients to effectively reach specific clinician segments with relevant content [2] - This targeted approach has led to measurable engagement, prompting clients to broaden their usage across various brands or service lines [2] Group 2: Customer Retention Strategies - The company invests in a robust customer success team that collaborates with clients to optimize campaigns and provide ongoing analytics, which has fostered upsell opportunities and long-term relationships [3] - Clients benefit from a self-serve portal that offers real-time insights, enhancing the overall customer experience [3] Group 3: Workflow Solutions - Doximity's Workflow Solutions, such as Dialer Enterprise and AMiON, have gained significant traction and are now integrated into hospital operations, reducing the likelihood of clients transitioning away from the platform [4] - Recent innovations like Doximity GPT, an AI-powered writing assistant, further alleviate administrative burdens for clients [4] Group 4: Competitive Landscape - GoodRx Holdings, Inc. has launched Community Link to enhance pharmacy engagement through cost-plus pricing, while also introducing a new erectile dysfunction subscription service to streamline consumer access [5] - Veeva Systems Inc. is enhancing client engagement through its Vault CRM Suite, which integrates medical, sales, and service teams, and has reported momentum in products that provide real-time insights [6] Group 5: Financial Performance - Doximity's shares have increased by 9.6% year-to-date, contrasting with the industry's decline of 0.9% [7] - The Zacks Consensus Estimate indicates a 3.5% improvement in Doximity's earnings per share for fiscal 2026 compared to fiscal 2025 [9] - The company's forward 12-month P/E ratio stands at 39.4X, higher than the industry average of 14.6X but lower than its three-year median of 48.9X [12]

Veeva Systems (VEEV) FY Conference Summary Company Overview - Veeva Systems was founded in 2007 by Peter Gassner as a vertical CRM company focused on the life sciences industry, evolving into a vertically driven software business with over 50 products across eight different suites [4][5] - The company achieved a revenue run rate of $3 billion in the past fiscal quarter and aims to reach $6 billion by 2030, indicating a strong growth trajectory [5][6] Industry Context - The life sciences industry is currently facing macroeconomic uncertainties, but Veeva's subscription-based model has insulated it from some of these effects [9][10] - Customers in the life sciences sector are adapting to macro disruptions post-COVID, becoming more confident in navigating uncertainties [9][10] Business Segments - Veeva's business is divided into two main segments: commercial and R&D, with both segments contributing roughly equally to revenue [13][14] - The commercial side includes CRM, marketing analytics (Crossix), and data cloud products, while the R&D side focuses on clinical trials, regulatory management, and safety [13][14][27] Product Differentiation - The Crossix business, which focuses on marketing analytics, has been a significant contributor to recent growth, utilizing a technology platform that allows for precise targeting in healthcare marketing [17][18] - Veeva is migrating customers from Salesforce-based CRM to its own Vault CRM, with a goal to complete this transition by September 2030 [20][21] Market Position and Competition - Veeva faces competition from various companies in different areas, such as IQVIA in data and Medidata in clinical data, but it is unique in offering an integrated platform across multiple applications [32][33] - The total addressable market (TAM) for Veeva in life sciences is estimated at $20 billion, with significant room for growth as the company currently operates at a $3 billion run rate [37][38] Financial Performance and Growth Strategy - Veeva has maintained a strong profitability profile, with a non-GAAP operating margin of 46% in Q1, and guidance for 44% for the year [40][41] - The company is focused on disciplined capital allocation, primarily considering M&A opportunities to support new market entries [67][68] Future Outlook - Veeva aims to build an "industry cloud" for life sciences, integrating various applications to enhance operational efficiency [30][50] - The company is also exploring horizontal software opportunities, starting with CRM, which is seen as a potential growth engine beyond 2030 [52][54] Key Takeaways - Veeva's strong focus on the life sciences sector, combined with its subscription-based model and integrated product offerings, positions it well for future growth despite current market uncertainties [9][10][37] - The company's commitment to innovation, customer partnerships, and operational efficiency is expected to drive its long-term success [70][71]

Financial Data and Key Metrics Changes - Total revenue for the quarter was $759 million, with a non-GAAP operating margin of 46% [9] - The company achieved its calendar 2025 revenue run rate goal of $3 billion [9] Business Line Data and Key Metrics Changes - The Vault CRM business is performing well, with over 80 customers live, and the expectation to reach about 200 customers live in the next year [13][14] - Crossix is a significant growth driver, with over 30% year-over-year growth, particularly in the usage-based area [32][41] Market Data and Key Metrics Changes - The macro environment is more uncertain compared to 90 days ago, but there has been no material change in financial results or pipeline [9][18] - The company is seeing strong growth in its R&D business, with guidance for the year at 19% [31] Company Strategy and Development Direction - The company is focusing on horizontal CRM applications, with plans to have first customers by the end of the year [22][24] - The AI initiative, Veeva.ai, is expected to significantly enhance efficiency in the life sciences industry, with a potential 15% increase in efficiency by 2030 [57][58] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the uncertainty in the macro environment but emphasizes that the subscription-based model provides insulation from short-term pressures [68][88] - There is optimism about the company's ability to navigate the current environment effectively, with ongoing projects and contract renewals proceeding as expected [68][88] Other Important Information - The company is excited about the integration of AI into core applications, which is expected to create significant value for customers [59][90] - The Commercial Summit revealed positive customer sentiment and excitement around new product offerings, particularly in the CRM space [96][100] Q&A Session Summary Question: Customer migration to Vault CRM - Management noted that the migration to Vault CRM is driven by its superior capabilities compared to Veeva CRM, with a mix of new customers and migrations contributing to growth [12][14] Question: Impact of macroeconomic factors on revenue - Management indicated that while there is uncertainty in the macro environment, it has not yet impacted financial results or pipeline, and they remain optimistic about the year ahead [18][68] Question: Horizontal CRM strategy - The company is excited about the horizontal CRM market and is focusing on customer success and product excellence, with plans to identify specific customer segments [22][24] Question: Drivers of Crossix's growth - Crossix's growth is attributed to a broader product offering and a strategic approach to integrating with CRM products, leading to higher value deals [41][42] Question: AI integration and customer feedback - Initial feedback on Veeva.ai has been positive, with customers appreciating the practical applications of AI in enhancing productivity and engagement [90][99] Question: CRM conversion pace among top pharma companies - Management is pleased with the progress among top 20 pharma companies, noting that customers are happy with Veeva CRM and are making decisions at their own pace [108][110] Question: Focus on ROI and budget priorities - There is a continued focus on execution and digital marketing, with customers becoming more systematic in their approach to commercial strategies [112][113]

Financial Data and Key Metrics Changes - Total revenue for the quarter was $759 million, with a non-GAAP operating margin of 46%, marking a strong start to the year and exceeding guidance [9][10] - The company achieved its calendar 2025 revenue run rate goal of $3 billion [9] Business Line Data and Key Metrics Changes - The Vault CRM is performing well, with over 80 customers live, and the company expects to reach about 200 customers live on Vault CRM within a year [13][14] - Crossix has shown strong growth, with a year-over-year growth rate exceeding 30%, driven by usage-based areas of the business [32][42] Market Data and Key Metrics Changes - The macro environment remains uncertain, but there has been no material change in financial results or pipeline at this time [9][18] - The company is seeing strong demand for its digital marketing capabilities, particularly in the Crossix segment, which is gaining market share [40][42] Company Strategy and Development Direction - The company is focusing on horizontal CRM applications, with plans to have first customers by the end of the year [22][24] - Veeva is committed to integrating AI deeply into its core applications, aiming to enhance efficiency in the life sciences industry by approximately 15% over the next few years [58][60] Management's Comments on Operating Environment and Future Outlook - Management acknowledges increased uncertainty in the macro environment but has not seen a significant impact on business operations or customer pipelines [68][70] - The company remains optimistic about its subscription-based business model, which is less susceptible to short-term market fluctuations [88][90] Other Important Information - The company is excited about the potential of Veeva.ai, which aims to provide significant value to customers by automating various tasks [100][101] - The recent Commercial Summit highlighted positive customer sentiment and the growing maturity of the Vault CRM product [96][98] Q&A Session Summary Question: Customer migration to Vault CRM - Management noted that the number of customers migrating to Vault CRM has increased, with reasons for migration including better product features and AI integration [12][14] Question: Impact of macroeconomic factors on revenue - Management indicated that while there is uncertainty in the macro environment, it has not yet affected financial results or pipeline [17][70] Question: Horizontal CRM strategy - The company is excited about the horizontal CRM market and is focusing on customer success and product excellence [22][24] Question: Drivers of growth in Crossix - Crossix's growth is attributed to an expanded product offering and a strategic approach to customer engagement [40][42] Question: AI integration in life sciences - Management expressed confidence in the potential of AI to enhance operational efficiency and provide significant value to customers [58][60] Question: Customer feedback on new products - Initial feedback from customers regarding new products, including Veeva.ai, has been positive, indicating a strong demand for integrated solutions [90][100]

Financial Data and Key Metrics Changes - Total revenue for Q1 2026 was $759 million, with a non-GAAP operating margin of 46%, exceeding guidance [7] - The company achieved a revenue run rate goal of $3 billion for calendar year 2025 [7] Business Line Data and Key Metrics Changes - Vault CRM is performing well, with over 80 customers live, and the expectation to reach about 200 customers live in the next year [12][13] - Crossix is highlighted as a significant growth driver, with strong performance in marketing and optimization, growing over 30% year-over-year [32][43] Market Data and Key Metrics Changes - The macro environment is described as more uncertain compared to the previous quarter, but no material changes in financial results or pipeline have been observed [7][17] - The company is seeing strong growth in its R&D business, with guidance for the year set at 19% [32] Company Strategy and Development Direction - The company is focusing on horizontal CRM applications, with plans to have first customers by the end of the year [22][25] - The AI initiative, Veeva.ai, is expected to significantly enhance efficiency in the life sciences industry, with a target of increasing efficiency by 15% over the next few years [58][60] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the uncertainty in the macro environment but emphasizes that the business remains insulated due to long-term subscription contracts [68][85] - There is optimism regarding the integration of AI into core applications, which is expected to provide substantial value to customers [60][88] Other Important Information - The company is committed to maintaining a disciplined approach to acquisitions, focusing on synergistic opportunities in horizontal applications [121] - The recent Commercial Summit indicated strong customer sentiment and excitement around new product offerings, particularly in CRM and AI [91][96] Q&A Session Summary Question: Customer migration to Vault CRM - Management noted that the migration to Vault CRM is driven by its superior capabilities compared to Veeva CRM, with a mix of new customers and migrations contributing to growth [12][14] Question: Impact of macroeconomic factors on revenue - Management stated that while there is uncertainty in the macro environment, it has not yet impacted financial results or pipeline, with ongoing projects proceeding as expected [17][70] Question: Horizontal CRM strategy - The company is excited about the potential of horizontal CRM applications, with plans to identify customer segments and product areas [22][25] Question: Drivers of Crossix's growth - Crossix's growth is attributed to its expanded product offerings and the increasing demand for digital marketing effectiveness among clients [32][43] Question: AI integration and customer feedback - Initial customer feedback on Veeva.ai has been positive, with expectations that it will enhance operational efficiency and provide significant value [88][96] Question: CRM conversion pace among top pharma companies - Management indicated that progress with top 20 pharma companies is on track, with no urgency to migrate as customers are satisfied with existing solutions [107][109] Question: Customer focus on ROI and budget priorities - There is a noted increase in focus on digital marketing and analytics among pharma executives, reflecting a systematic approach to commercial strategies [111]