Group 1: Fund Performance - Baron Asset Fund achieved a return of 7.89% in Q4 2025, outperforming the Russell Midcap Growth Index by 11.59 percentage points, which ended the quarter down 3.70% [1] - The Fund held a total of 53 positions as of December 31, 2025, with the 10 largest holdings representing 52.8% of net assets and the 20 largest holdings representing 73.3% of net assets [1] Group 2: Veeva Systems Inc. Analysis - Veeva Systems Inc. (NYSE:VEEV) was highlighted as a notable detractor for the Baron Asset Fund, with a one-month return of -19.20% and a 12-month decline of 21.22% [2] - The company's market capitalization is reported at $30.347 billion [2] - Following a quarterly update in November, Veeva's management tempered expectations for customer retention, expecting only 14 of the top 20 global pharmaceutical companies to adopt its next-generation Vault CRM product, down from 18 for the legacy Veeva CRM [3] - The termination of Veeva's long-standing partnership with Salesforce has allowed for greater control over its product roadmap but has also introduced direct competition with Salesforce, which has announced its own product development efforts [3] - Despite recent challenges, the company retains long-term conviction in Veeva due to favorable secular tailwinds and confidence in its 2030 financial targets [3]

Market Overview - U.S. equity markets ended the fourth quarter positively, with the S&P 500 and Nasdaq 100 rising 2.4% and 2.6% respectively, while the Dow Jones Industrial Average led with a 3.6% return [2] - The Russell 1000 Growth Index lagged, increasing only 1.1% as investors shifted from high-growth technology stocks to more defensive sectors [2] - The quarter was marked by significant volatility, influenced by a 43-day government shutdown that affected market transparency and risk appetite [2] Economic and Monetary Policy - Approximately 83% of S&P 500 companies reported positive earnings surprises, indicating a broadening economic recovery beyond the "Magnificent Seven" [4] - The Federal Reserve implemented two 25-basis point cuts, bringing the federal funds rate to a range of 3.50% to 3.75% by year-end, and concluded its quantitative tightening program [4] - The Fed's balance sheet expanded by approximately $100 billion to $6.6 trillion, reflecting a shift from "abundant" to "ample" bank reserves [4] Sector Performance - Ithaka's portfolio underperformed the Russell 1000 Growth Index by 700 basis points, with stock selection detracting 740 basis points from relative performance [6] - Positive relative returns were generated in the Materials and Processing sector, while Technology and Consumer Discretionary sectors were significant sources of underperformance [7] - Weakness in Technology was attributed to fears of AI disintermediating software stocks, while Consumer Discretionary faced pressures from consumer spending concerns [7] Top Contributors and Detractors - Top contributors included Intuitive Surgical (26.6% return), Advanced Micro Devices (32.4%), and Alphabet (28.9%), driven by strong earnings and positive investor sentiment [9][10][12] - Major detractors were ServiceNow (-16.8%), Netflix (-21.8%), and Veeva Systems (-25.1%), with concerns over AI impacts and unexpected financial disclosures affecting stock performance [9][15][16] Investment Strategy and Outlook - Ithaka initiated three new positions and eliminated four during the quarter, with a trailing 12-month turnover of 22.1% [17] - The investment approach focuses on long-term wealth creation through concentrated positions in high-quality companies with strong management and favorable market conditions [4][19] - The narrative around AI is shifting towards tangible productivity gains, suggesting that the economic opportunities from AI will continue to expand [18]

Veeva Systems FY Conference Summary Company Overview - **Company**: Veeva Systems (NYSE: VEEV) - **Industry**: Life Sciences Software and Consulting - **Market Opportunity**: Approximately $20 billion market with 16% penetration, indicating significant growth potential [6][7] Core Business Model and Vision - **Vision**: To build the industry cloud for life sciences, integrating software, data, and consulting to enhance efficiency across R&D, manufacturing, and commercial sectors [3][6] - **Values**: Emphasis on integrity, customer success, employee success, and speed [4][5] - **Public Benefit Corporation**: Veeva is the first public company to convert to a Public Benefit Corporation, balancing the interests of shareholders, customers, employees, and society [6] Product Portfolio - **Product Suites**: Veeva offers over 10 product suites and more than 50 products, categorized into: - Development Cloud: Clinical, regulatory, and safety management - Quality Cloud: Manufacturing quality assurance - Commercial Cloud: Sales, medical, and marketing solutions - Data Cloud: Data management and analytics [7][9] - **Unique Selling Proposition**: The "suite effect" allows customers to benefit from interconnected products, reducing integration complexities [10][11] Market Dynamics and Trends - **AI Integration**: AI is becoming integral in life sciences, enhancing productivity in drug discovery and clinical trials [17][18] - **Industry Connectivity**: Increased collaboration among stakeholders, leading to faster and more inclusive clinical trials [18] - **Changing Commercial Models**: Shift towards ongoing care and precision medicine as standard practice [18] Financial Performance and Growth Strategy - **Revenue Growth**: Expected revenue of $3.17 billion for the current fiscal year, representing a 15% growth rate [30] - **Long-term Goals**: Targeting $6 billion in revenue by 2030, implying a 13% annual growth rate [27] - **Investment Focus**: Significant investment in product development, with a commitment to maintaining high operating margins (expected 45% non-GAAP) [30][31] Competitive Landscape - **Main Competitors**: Salesforce in CRM and Medidata in clinical areas, with many competitors being niche providers [36][37] - **Market Share**: Veeva holds over 80% market share in biopharma CRM, expecting to maintain over 70% post-migration to Vault CRM [23][24] Capital Allocation and M&A Strategy - **Cash Position**: Over $6.5 billion in cash with no debt, allowing for both M&A and shareholder returns [32][33] - **Share Repurchase Program**: Announced a $2 billion share repurchase over two years to return value to shareholders [33] - **M&A Focus**: Targeting strategic acquisitions to enhance product excellence and expand into cross-industry software [39][40] Customer Engagement and Consulting - **Customer Success**: Veeva's products are designed to be mission-critical, leading to high customer retention and advocacy [14][45] - **Business Consulting**: Growing segment focused on helping customers optimize business processes and implement technology effectively [50][51] Crossix Business Insights - **Digital Marketing Growth**: Crossix continues to show strong growth in digital marketing and measurement, with potential to match CRM size in the future [52][54] - **Market Leadership Potential**: Positioned to gain further market share in a growing digital marketing landscape [53][54] Profitability and Margin Management - **Profitability Strategy**: Focus on sustainable growth without artificial margin targets, allowing for necessary investments in innovation [55][56] - **Operating Leverage**: Anticipated improvements in margins as Salesforce royalties decline and investments in AI and data products yield returns [56] This summary encapsulates the key points from the Veeva Systems FY Conference, highlighting the company's strategic vision, product offerings, market dynamics, financial performance, and future growth opportunities.

Veeva Systems Conference Summary Company Overview - **Company**: Veeva Systems (NYSE: VEEV) - **Date of Conference**: December 08, 2025 Key Highlights Industry and Market Position - Veeva Systems operates in the life sciences industry, focusing on cloud-based software solutions for clinical, regulatory, and commercial operations [2][6][32] - The company has established itself as a leader in the clinical space, with over 10 applications and significant market share in areas like EDC (Electronic Data Capture) and CRM (Customer Relationship Management) [2][35] Financial Performance - Veeva reported strong fiscal third-quarter results, exceeding all guidance numbers, indicating robust execution across all business segments [2][4] Product Innovations - **Veeva AI**: The introduction of Veeva AI in commercial products is a significant development, with early customers already live on the commercial content side [3][4] - **Vault Platform**: All applications are built on the Vault Platform, allowing for seamless integration and connectivity across clinical operations, data management, and commercial activities [5][6][38] Growth Opportunities - The clinical segment is expected to drive significant growth, with a focus on improving productivity and efficiency in drug development processes [5][6] - Veeva aims to leverage AI to enhance operational efficiencies in clinical trials, with potential productivity improvements of 10% to 30% [28][29] Customer Dynamics - Veeva retains approximately 14 of the top 20 pharmaceutical companies as clients, with a focus on innovation and stability as key factors for customer retention [9][10] - Smaller and mid-sized companies are increasingly attracted to Veeva's proven solutions, preferring reliable and trusted partners over custom projects [12][13] Competitive Landscape - Veeva differentiates itself from competitors like Salesforce by offering a more integrated and efficient migration process to Vault CRM, reducing risks and costs associated with implementation [20][22] - The partnership with IQVIA enhances Veeva's data strategy, allowing for interoperability between Veeva's software and IQVIA's data solutions, providing customers with more choices [40][41] Future Outlook - Veeva plans to expand AI capabilities across all applications, including clinical, quality, regulatory, and safety by 2026, positioning itself for continued growth [29][30] - The company is focused on building a next-generation cloud-based platform with a platform-first approach, aiming to address existing shortcomings in enterprise platforms [47][48] Additional Insights - The Crossix business segment, which focuses on measurement and optimization, has been a strong growth driver, with significant market share gains [24][25] - Veeva's commitment to product excellence and innovation is evident in its ongoing development of interconnected applications across various operational areas [32][38] This summary encapsulates the key points discussed during the Veeva Systems conference, highlighting the company's strong market position, innovative product offerings, and future growth strategies.

Investment Rating - The report maintains a "Buy" rating for Veeva Systems, suggesting to seize buying opportunities after recent price declines [2][4][8]. Core Insights - Veeva Systems reported strong Q3 FY26 results, with total revenue reaching $811.2 million, representing a 16% year-over-year increase, exceeding market expectations [2][12]. - The company raised its Q4 guidance due to accelerated transactions and strong performance across multiple business lines, particularly in AI and CRM [3][4]. - Veeva's AI initiatives are progressing, with the first AI agents for CRM and commercial content set to launch in December, and further expansion into R&D and quality areas planned for FY26 [3][4]. Financial Performance - Q3 FY26 total revenue was $811.2 million, surpassing the forecast by $9.6 million, with subscription revenue at $682.5 million and professional services at $128.7 million [12]. - Adjusted operating profit margin reached 45%, reflecting a solid profitability performance [2][12]. - The company’s gross margin remained stable at 75%, indicating strong operational efficiency [2]. Market Position and Valuation - Veeva's stock demonstrated resilience, with a smaller decline compared to peers in the AI SaaS sector, highlighting its robust fundamentals [4]. - The intrinsic value of Veeva is estimated at $350.3 per share, indicating a potential upside of approximately 29.5% from the current price of $270.5 [8][28]. - The report notes that Veeva's adjusted P/E ratios for FY26E and FY27E are 44.5x and 38.2x, respectively, which are below the industry average, suggesting a favorable valuation [29]. Growth Outlook - The company aims for a revenue target of $6 billion by 2030, supported by strong demand in the life sciences sector and high customer retention rates [3][4]. - Veeva's growth is expected to be driven by its expanding AI capabilities and the increasing adoption of its cloud solutions in the pharmaceutical industry [3][4].

Core Insights - Major U.S. equities indexes experienced gains, driven by comments from a Federal Reserve official suggesting a potential interest rate cut in December [1] Company Performance - Ross Stores (ROST) emerged as the best-performing stock in the S&P 500, with shares increasing by 7% after surpassing earnings and revenue estimates, and raising its outlook due to strong customer demand [2] - Gap Inc. saw its shares rise by 8% following better-than-expected results and an optimistic guidance, attributed to robust demand across its brands [2] - Intuit (INTU) reported a 6% surge in shares, benefiting from strong quarterly results and increased demand for its artificial intelligence tools [3] - Veeva Systems (VEEV) experienced a decline of over 10% as it warned of reduced usage of its Vault CRM system by biopharmaceutical firms [4] Market Trends - Oil futures declined while gold prices increased, indicating a shift in commodity markets [4] - The yield on the 10-year Treasury note decreased to 4.08%, reflecting changes in investor sentiment [4] - The U.S. dollar showed mixed performance against major currencies, gaining against the euro but losing ground to the pound and yen [4]

Core Insights - Veeva Systems, Inc. reported adjusted earnings per share (EPS) of $2.04 for Q3 fiscal 2026, a 16.6% increase from $1.75 year-over-year, surpassing the Zacks Consensus Estimate by 4.62% [1] - Total revenues for the quarter reached $811.2 million, exceeding the Zacks Consensus Estimate by 2.4% and reflecting a 16% year-over-year growth [2] Revenue Details - Subscription services revenues rose 17.5% year-over-year to $682.5 million, driven by both established and new solutions, compared to an estimate of $671 million [3] - Professional services and other revenues increased 13% year-over-year to $128.7 million, surpassing the estimate of $120.1 million [4] Margin Performance - Gross profit improved 16.6% year-over-year to $611.8 million, with a gross margin expansion of 30 basis points to 75.4%, slightly above the predicted 75.3% [5] - Operating profit totaled $240.9 million, a 32.8% increase from the prior year, with an operating margin expansion of 380 basis points to 29.7%, exceeding the predicted 26.7% [7] Financial Position - At the end of Q3 fiscal 2026, the company had cash and cash equivalents and short-term investments of $6.64 billion, up from $6.40 billion at the end of Q2 [8] - Cumulative net cash provided by operating activities was $1.31 billion, compared to $1.02 billion a year ago [8] Guidance - For Q4 fiscal 2026, Veeva expects total revenues between $807 million and $810 million, with subscription revenues estimated at approximately $696 million [11] - The company raised its fiscal 2026 revenue outlook to between $3,166 million and $3,169 million, up from previous guidance of $3,134 million to $3,140 million [12] - Adjusted EPS for fiscal 2026 is now expected to be $7.93, an increase from the previous guidance of $7.78 [14] Strategic Developments - Veeva AI achieved significant milestones during Q3, with plans to release AI agents for CRM and commercial content in early December, and additional agents for R&D and quality in development for 2026 [16][18] - The company strengthened its leadership in CRM, adding 23 new customers, including a major rollout for a top-20 biopharma company in Japan [19] - Veeva Development Cloud saw three top-20 biopharma companies select its applications as their enterprise standard, indicating rising industry confidence [20]

Financial Data and Key Metrics Changes - Total revenue for Q3 was $811 million, with non-GAAP operating income at $365 million, exceeding guidance [6] - CRM now constitutes about 20% of total revenue, down from 25% two years ago, indicating growth in other product areas [9] Business Line Data and Key Metrics Changes - Veeva AI is highlighted as a major initiative, with significant progress expected to benefit customers and the industry [6] - Crossix continues to perform well, with expectations for it to remain a growth driver in the coming years [34][39] Market Data and Key Metrics Changes - The overall health of the pharmaceutical industry remains strong, with no significant changes in customer buying behaviors noted [31] - Digital marketing spending is increasing, which positively impacts Crossix's business [39] Company Strategy and Development Direction - The company is focused on delivering integrated solutions across clinical operations and clinical data to drive efficiency [11] - Veeva aims to leverage its consulting, data, and software capabilities to provide comprehensive solutions for life sciences [47][48] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the industry, citing ongoing demand for innovative solutions to address uncured diseases [31] - The company anticipates no material impact on its 2030 goals despite some customer attrition in the CRM segment [9][75] Other Important Information - The company is investing in product and services teams, which may impact margins in the short term but is expected to yield positive results over time [58] - The partnership with IQVIA is seen as beneficial, enhancing customer confidence and operational capabilities [41][42] Q&A Session Summary Question: Concerns about CRM customer migration - Management acknowledged that CRM is about 20% of total revenue and that attrition is expected to have no immediate impact on 2030 goals [9][75] Question: Competitive landscape in EDC market - Management noted that while one customer returned to a previous provider, overall trends in clinical remain positive with opportunities for growth [11] Question: Impact of AI on sales force efficiency - Management indicated that while there have been some reductions in sales force size, the industry is cautious about making significant changes [28] Question: Demand environment in pharma - Management reported that the industry is healthy, with no significant changes in customer buying behaviors despite external political factors [31] Question: Crossix performance and future growth - Management confirmed that Crossix continues to perform well and is expected to be a strong growth driver moving forward [34][39] Question: Quality cloud expansion - Management highlighted that the quality cloud opportunity is expanding through reaching new customer types and product expansion [80]

Financial Data and Key Metrics Changes - Total revenue for Q3 was $811 million, with non-GAAP operating income at $365 million, exceeding guidance [6] - CRM now constitutes about 20% of total revenue, down from 25% two years ago, indicating growth in other product areas [9] Business Line Data and Key Metrics Changes - Veeva AI is highlighted as a major initiative with significant progress, expected to add value across various product areas including Vault CRM, Crossix, clinical, and safety [6] - Crossix continues to perform well, with expectations for it to remain a growth driver in the coming years [34] Market Data and Key Metrics Changes - The overall health of the pharmaceutical industry remains strong despite political chaos, with no significant changes in customer buying behaviors noted [31] - Digital marketing spending is increasing, which benefits Crossix as it becomes a standard for measurement and optimization [39] Company Strategy and Development Direction - The company is focused on delivering integrated solutions across clinical operations and clinical data, emphasizing efficiency as a key driver [11] - Veeva aims to be a comprehensive provider in the life sciences sector, integrating software, data, and consulting services [47] Management's Comments on Operating Environment and Future Outlook - Management expresses optimism about the industry, citing ongoing demand for innovative solutions to address uncured diseases [31] - The company anticipates no material impact on its 2030 goals despite some customer attrition in the CRM segment, as the business is diverse and has multiple growth paths [75][76] Other Important Information - The company is investing in product and services teams, with a focus on business consulting and professional services to enhance customer engagement [59] - The partnership with IQVIA is seen as a positive trend, enhancing customer confidence and operational capabilities [42] Q&A Session Summary Question: Concerns about CRM customer migration - Management noted that CRM is currently about 20% of total revenue, down from 25% two years ago, and emphasized that no immediate impact is expected from customer migrations [9][19] Question: Competitive landscape in EDC market - Management acknowledged a competitor winning back a top 20 customer but expressed confidence in their own pipeline and opportunities in the EDC market [10][11] Question: Impact of AI on sales force efficiency - Management indicated that while there have been some reductions in sales force size, the industry remains cautious about significant changes due to the need for relationship building [28] Question: Demand environment and financial health of pharma market - Management reported that the pharmaceutical industry is healthy, with no significant changes in demand or buying behavior observed [31] Question: Crossix performance and future growth - Management confirmed that Crossix continues to perform well and is expected to be a strong growth driver in the future [34][70] Question: Insights from customer-specific factors affecting CRM wins - Management stated that customer-specific dynamics are at play, with no overarching pattern, and emphasized the health of the overall CRM business [56][57]

Financial Data and Key Metrics Changes - Total revenue for the quarter was $811 million, with non-GAAP operating income at $365 million, exceeding guidance [5] - CRM revenue has decreased to about 20% of total revenue, down from 25% two years ago, indicating growth in other product areas [8] Business Line Data and Key Metrics Changes - Veeva AI is highlighted as a major initiative, with significant progress expected to benefit customers and the industry [5] - Crossix continues to perform well, contributing to overall revenue growth, with expectations for it to remain a strong growth driver [32][37] Market Data and Key Metrics Changes - The overall health of the pharmaceutical industry remains strong, with no significant changes in customer buying behaviors noted [28] - Digital marketing spending is increasing, which positively impacts Crossix's performance and growth potential [36] Company Strategy and Development Direction - The company is focused on integrating its software, data, and consulting services to provide comprehensive solutions for life sciences [44] - There is an emphasis on innovation in clinical and safety areas, with expectations for AI to drive efficiency and effectiveness [19][48] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the industry, citing ongoing demand for solutions to uncured diseases and a stable market environment [28] - The company expects to continue to meet its 2030 goals despite some customer attrition in the CRM segment, due to the diverse nature of its business [73] Other Important Information - The company is investing in hiring for product and services teams to support growth and innovation [55] - The partnership with IQVIA is seen as beneficial, enhancing customer confidence and providing opportunities for joint solutions [40] Q&A Session Summary Question: Concerns about CRM customer migration - Management acknowledged that CRM is currently about 20% of total revenue and that attrition is not expected to impact long-term goals [8][73] Question: Competitive landscape in EDC market - Management noted that while one customer returned to a previous provider, overall trends in clinical operations remain positive, with opportunities for growth [10] Question: Impact of AI on sales force efficiency - Management indicated that while there have been some reductions in sales force size, the industry is cautious about making significant changes [26] Question: Demand environment in pharma - Management reported that the industry is healthy, with no significant changes in customer buying behaviors despite political and economic challenges [28] Question: Crossix performance and future growth - Management confirmed that Crossix continues to perform well and is expected to be a strong growth driver moving forward [32][37] Question: Balancing go-to-market initiatives - Management stated that dedicated teams are in place to focus on various product areas, allowing for simultaneous advancement in multiple initiatives [68]