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 Inc. (VEEV) is positioned for growth due to its strong product portfolio and solid first-quarter fiscal 2026 performance, despite concerns over rising operational costs [1][12]. Financial Performance - Veeva's shares have increased by 31.7% year-to-date, outperforming the industry growth of 19.9% and contrasting with the S&P 500's decline of 8.5% [2]. - The company has a market capitalization of $46.1 billion and anticipates a growth rate of 26.2% over the next five years, with a trailing four-quarter average earnings surprise of 10% [3]. Product and Service Developments - Veeva continues to drive the adoption of its next-gen Vault CRM, with 20 new customers, particularly from small and mid-sized biotech firms [5]. - The introduction of AI-driven innovations, such as CRM Voice Control and MLR Bot, aims to enhance efficiency and compliance [6]. - Veeva's Data Cloud solutions are gaining traction, with significant contracts and partnerships, including a long-term collaboration with Walgreens Boots Alliance [7][9]. Strategic Initiatives - The company has secured key deals, including Boehringer Ingelheim's migration to Veeva Vault CRM and partnerships to enhance generative AI capabilities [9]. - Veeva's first-quarter fiscal 2026 results exceeded expectations, driven by strong performance in subscription and professional services [10]. Cost Management - Operating costs have risen, with general and administrative expenses increasing by 12.3% year-over-year in the first quarter of fiscal 2026 [12]. - Total operating expenses increased by 9.4% year-over-year, with expectations for further increases due to employee compensation-related costs [13]. Future Outlook - The Zacks Consensus Estimate for fiscal 2026 earnings per share has increased by 3 cents to $7.64, with second-quarter revenue estimates indicating a 13.5% improvement year-over-year [14].

Core Insights - Veeva Systems (VEEV) is experiencing strong momentum in its next-gen Vault CRM, with significant customer adoption and strategic positioning highlighted in fiscal Q1 2026 results [1][3] - The platform has over 80 live deployments, with 28 new customers added or migrated in the quarter, indicating a market shift towards Vault's life sciences functionality [1][7] - Veeva aims to exceed 200 Vault CRM customers by the end of fiscal 2026, a notable increase from previous years, with three of the top 20 global biopharma companies now using Vault CRM [1][7] Product Developments - Veeva Systems introduced CRM Pulse, a new data layer to enhance segmentation and targeting, enriching the CRM experience [2] - Upcoming features such as CRM Bot, voice control, and natural language search are expected to launch by the end of 2025, enhancing the platform's AI capabilities [2][7] Financial Performance - Subscription revenues for Q1 grew 19% year over year to $634.8 million, with Vault CRM significantly contributing to this growth as it replaces legacy systems and captures market share [3] - The stock has gained 32.8% year-to-date, outperforming the industry growth of 8.5% [6] Valuation and Estimates - Veeva Systems trades at a forward price-to-sales ratio of 13.99, above the industry average, and carries a Value Score of C [9] - The Zacks Consensus Estimate for fiscal 2026 earnings implies a 15.8% increase from the previous year [10]

Core Insights - The year 2025 is expected to be a turning point in global healthcare, driven by digital transformation and operational pressures, with significant backing from initiatives like Trump's $500 billion Stargate AI project [1][6] - The Medical Info Systems industry is projected to grow rapidly, with the health tech market anticipated to expand from $880 billion in 2025 to $3.3 trillion by 2034, driven by demand for telehealth, AI, IoMT, and cybersecurity [1][2] Industry Overview - The Zacks Medical Info Systems industry includes companies that develop healthcare information systems, providing software and hardware solutions for secure access to real-time data [3] - The focus on patient satisfaction and data security has increased the demand for big data, cloud computing, blockchain, and AI solutions [3] Trends Impacting the Industry - AI adoption in healthcare is significant, with applications in drug synthesis, diagnostics, and patient monitoring, supported by initiatives like the Stargate project [4] - The global AI in healthcare market is projected to reach $95.65 billion by 2025, indicating strong growth potential [4] - The demand for remote healthcare is increasing, with the smart healthcare products market valued at $145.9 billion in 2023 and expected to grow to $485.71 billion by 2032, at a CAGR of 12.78% [5] Challenges Facing the Industry - The $500 billion Stargate AI initiative faces challenges from new tariffs, which have increased costs for critical AI infrastructure by 10-25%, leading to delays in hardware upgrades [6] - Tariffs on copper, aluminum, and steel are expected to raise production costs, with 88% of healthcare executives anticipating price hikes of at least 18% [6] Industry Performance - The Zacks Medical Info Systems industry ranks 88, placing it in the top 36% of over 250 Zacks industries, indicating strong near-term prospects [8] - The industry has outperformed the S&P 500 and the Zacks Medical sector over the past year, gaining 12% compared to the sector's decline of 15.4% [10] Current Valuation - The industry is currently trading at a forward price-to-sales (P/S) ratio of 5.54X, compared to the S&P 500's 5.25X and the sector's 2.23X [13] Investment Opportunities - Companies like Veeva Systems, 10x Genomics, and Insight Molecular Diagnostics are highlighted as potential investment opportunities, with strong earnings outlooks [2][18][21][25] - Veeva Systems is expected to report a 15.8% improvement in fiscal 2026 earnings, with revenue growth of 12.8% [19] - 10x Genomics anticipates a 27.8% jump in earnings for 2026, with revenue growth of 5.8% [22] - Insight Molecular Diagnostics projects a 43.5% increase in earnings for 2025 [26]

Core Insights - Veeva Systems (VEEV) is strategically expanding its partnerships in 2025, enhancing its integration within the life sciences sector and driving growth [1][3][7] Partnerships and Collaborations - In June 2025, Veeva partnered with the Sarah Cannon Research Institute to implement its Clinical Platform at over 200 oncology research sites, validating its technology for cancer trials [1] - Astellas selected Veeva's Vault CRM as its global standard for commercial operations, including a version tailored for China [1] - Veeva collaborated with Zifo in January 2025 to facilitate the integration of lab quality data into Veeva LIMS, expediting system rollouts [1] - EVERSANA joined Veeva's partner program in April 2025 to co-develop generative AI tools for content creation and customer engagement [2] - Partnerships with DNAnexus and Accumulus Synergy have enhanced Veeva's regulatory capabilities, aiding pharma companies in managing global filings [2] Market Position and Performance - Veeva's partnerships are accelerating adoption, strengthening customer relationships, and creating new growth avenues in clinical research, AI engagement, and regulatory compliance [3] - VEEV shares have increased by 33.5% year-to-date, significantly outperforming the industry growth of 8.1% [6][7] Valuation and Earnings Estimates - Veeva trades at a forward price-to-sales ratio of 14.25, which is above the industry average [8] - The Zacks Consensus Estimate for VEEV's fiscal 2026 earnings suggests a 15.8% increase compared to the previous year [9] - Current earnings estimates for the upcoming quarters indicate a year-over-year growth of 17.28% for the current quarter and 15.76% for the current year [10]

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 - Salesforce, Inc. and Veeva Systems Inc. are prominent players in the cloud customer relationship management market, with Salesforce serving a broad range of industries and Veeva focusing exclusively on the life sciences sector [1][2] Salesforce Overview - Salesforce maintains a dominant position in the CRM market, surpassing competitors like Microsoft, Oracle, and SAP, and is transitioning to a broader enterprise software provider with a focus on AI, data, and collaboration [3][4] - The introduction of Einstein GPT in 2023 has integrated generative AI into Salesforce's platform, enhancing automation, decision-making, and customer experiences [4] - The recent launch of Agentforce, which has achieved $100 million in annualized revenues within two quarters, demonstrates Salesforce's growth momentum, with its Data Cloud also experiencing over 120% year-over-year growth in annual recurring revenues [5] - However, Salesforce is facing a slowdown in sales growth, with a revenue increase of only 7.7% and non-GAAP EPS growth of 5.7% in Q1 of fiscal 2026, attributed to cautious enterprise spending amid economic uncertainties [6][7] Veeva Systems Overview - Veeva Systems adopts a focused strategy, exclusively serving life sciences companies, which allows it to create specialized tools that are difficult to replace [8] - In Q1 of fiscal 2026, Veeva reported a non-GAAP EPS growth of 31.3% and a revenue increase of 16.7%, alongside a robust operating margin of 46.1% [9][11] - Veeva's Vault CRM, tailored for regulatory and healthcare needs, is currently utilized by over 80 clients and is expected to grow to 200 clients by next year, with ongoing expansion into data analytics and AI tools [10][12] - The company is expected to maintain strong demand for its products due to the essential nature of clinical trials and regulatory compliance in the pharmaceutical sector, even during economic downturns [12][13] Comparative Analysis - Veeva Systems is projected to have stronger growth potential, with Zacks Consensus Estimates indicating a revenue growth of 12.7% and EPS growth of 14.6% for fiscal 2026, compared to Salesforce's expected revenue growth of 8.6% and EPS growth of 10.8% [14] - In terms of valuation, Veeva trades at 35.92 times forward earnings, while Salesforce trades at 22.98 times, reflecting Veeva's higher growth momentum justifying its premium [15] - Year-to-date stock performance shows Veeva Systems has risen by 34%, while Salesforce shares have declined by 18.9%, indicating differing investor sentiment towards the two companies [16] Conclusion - Veeva Systems is positioned as the better investment choice currently, with its specialized tools, strong margins, and consistent growth in the life sciences sector, despite a higher valuation compared to Salesforce [19][20]

Core Viewpoint - Veeva Systems Inc. (NYSE: VEEV) is rated as a hold, with the stock price nearing the new intrinsic value of approximately $275 per share [1]. Group 1: Investment Strategy - The investment approach is focused on a fundamental standpoint, emphasizing a "buy & hold" strategy for the long term [1]. - The analyst highlights a long-term investment horizon, concentrating on price and margin of safety while considering risks often overlooked by short-term analysts [1]. Group 2: Performance Metrics - According to TipRanks, a success rate of 77% indicates that copying Mario Silva's trades and holding each position for one year would yield 76.92% of transactions generating a profit, with an average return of 12.20% per rating [1].

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]