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VEEVA SYSTEMS INC (VEEV)·Q2 2026 Earnings Summary

Executive Summary

  • Q2 FY26 delivered broad-based strength: revenue $789.1M (+17% YoY) and non-GAAP diluted EPS $1.99, both above internal guidance and Wall Street consensus; GAAP diluted EPS was $1.19 (Revenue Consensus Mean $768.7M*, Primary EPS Consensus Mean $1.90*).
  • Guidance raised: FY26 revenue to $3.134–$3.140B (from $3.090–$3.100B), non-GAAP operating income to ~$1.388B (from ~$1.360B), and non-GAAP EPS to ~$7.78 (from ~$7.63) .
  • Strategic catalysts: long-term global partnership with IQVIA resolving all disputes, unlocking data/software interoperability in commercial and clinical; two top 20 biopharmas went live on Vault CRM in major markets; now >100 customers live and nine top 20 commitments to Vault CRM .
  • Management tone: confident on multi-year AI agent roadmap (first agents in December for CRM and commercial content; additional agents across clinical/regulatory/quality in 2026), while noting near-term AI revenue immaterial but enlarging TAM over time .

What Went Well and What Went Wrong

What Went Well

  • Vault CRM adoption and execution: “two top 20 biopharmas successfully went live with Vault CRM in major markets and Vault CRM now has more than 100 customers live”; plus Patient CRM, Campaign Manager, and Service Center expanding suite .
  • IQVIA partnership removes structural barriers: enables IQVIA data in Veeva Network, Nitro, and AI; customers “overwhelmingly positive” and energized by joint integration potential .
  • AI strategy clarity and cadence: “first Veeva AI agents are planned for release in December for CRM and commercial content… new agents for clinical operations, regulatory, safety, quality, medical, and commercial in 2026” . CEO: “We will create billions of dollars of value for the industry… I don’t expect any material revenue contribution for ’26 or ’27” .

What Went Wrong

  • Compass Prescriber adoption slower than expected due to resistance to change; management “underestimated… resistance” and is “turning the corner,” emphasizing product improvements and early adopters .
  • GAAP G&A inflated by one-time litigation settlement-related charges ($30.6M), excluded from non-GAAP results; highlights sensitivity of GAAP comparability to non-recurring items .
  • Analyst concerns on commercial subscriptions’ sequential shape; management pointed to Crossix strength and usage-based lumpiness, stressing annual view over quarterly billings volatility .

Financial Results

Revenue and EPS vs Prior Periods and Estimates

MetricQ2 2025Q1 2026Q2 2026
Revenue ($USD Millions)$676.2 $759.0 $789.1
Diluted EPS (GAAP, $)$1.04 $1.37 $1.19
Diluted EPS (Non-GAAP, $)$1.62 $1.97 $1.99
Consensus Revenue Mean ($USD Millions)*$667.8$728.4$768.7
Consensus Primary EPS Mean ($)*$1.53$1.74$1.90

Values retrieved from S&P Global.*

Margins (GAAP and Non-GAAP)

MetricQ2 2025Q1 2026Q2 2026
Gross Margin % (GAAP)74.8% 77.1% 75.3%
Gross Margin % (Non-GAAP)77.2% 79.2% 77.5%
Operating Margin % (GAAP)24.6% 30.8% 24.8%
Operating Margin % (Non-GAAP)41.4% 46.1% 44.7%

Segment Breakdown

Metric ($USD Millions)Q2 2025Q1 2026Q2 2026
Subscription Services$561.3 $634.8 $659.2
Professional Services & Other$114.9 $124.3 $129.9
Subscription Services by Product ($USD Millions)Q2 2025Q1 2026Q2 2026
Veeva Commercial Solutions$271.8 $305.4 $307.5
Veeva R&D Solutions$289.5 $329.4 $351.7

KPI Margins by Line of Business

KPIQ2 2025Q1 2026Q2 2026
Subscription Gross Margin % (GAAP)86.0% 87.7% 85.8%
Subscription Gross Margin % (Non-GAAP)86.5% 88.1% 86.2%
Professional Services Gross Margin % (GAAP)20.3% 23.2% 21.9%
Professional Services Gross Margin % (Non-GAAP)31.9% 33.6% 33.4%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Revenues ($USD Millions)FY 2026$3,090–$3,100 $3,134–$3,140 Raised
Non-GAAP Operating Income ($USD Millions)FY 2026~$1,360 ~$1,388 Raised
Non-GAAP Diluted EPS ($)FY 2026~$7.63 ~$7.78 Raised
Total Revenues ($USD Millions)Q3 2026N/A$790–$793 New
Non-GAAP Operating Income ($USD Millions)Q3 2026N/A$348–$350 New
Non-GAAP Diluted EPS ($)Q3 2026N/A$1.94–$1.95 New

Note: Company does not provide GAAP guidance for operating income and diluted EPS due to difficulty estimating stock-based compensation and other excluded items .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 FY25, Q1 FY26)Current Period (Q2 FY26)Trend
AI/technology initiativesFormalized Veeva AI; Direct Data API made free; emphasis on embedded, workflow-specific agents and platform-first approach First agents in December (CRM Bot, voice, compliant free text, MLR Bot); broader agents in 2026; near-term revenue immaterial; long-term TAM expansion Building momentum, execution-focused
Macro/tariffsUncertainty noted but no impact to pipeline/financials; subscription model resilient Macro uncertainty “stable”; deals progressing; guidance assumes current environment persists Stable uncertainty, limited operational impact
Commercial product performance (Crossix)Usage-based strength (>30% YoY), lumpy; strategic integration into CRM; audience growth “Great quarter for Crossix”; driver for commercial growth; audiences higher-growth segment; some seasonality Sustained growth, usage-led
Vault CRM migrations/adoption>80 customers live; 20 new Vault CRM in Q4; migrations accelerating in 2026–2027 Two top 20 go-lives; >100 live; nine top 20 commitments; expect bulk migrations 2026–2027 Accelerating scale and proof points
Regulatory/legal resolutionNo earlier resolution; ongoing IQVIA constraints referenced historically Long-term partnership with IQVIA; disputes resolved; TPAs eased; unlocks data/software interoperability Major structural positive
R&D executionTop 20 eTMF/CTMS standardization; steady EDC ramps; clinical suite expansions (RTSM, eCOA, Site Connect) Strong R&D subscriptions; stable environment; ninth top 20 on EDC; enterprise agreements drive durability Durable multi-product expansion

Management Commentary

  • CEO (press release): “It’s exciting to see our vision of connected software, data, and business consulting for life sciences becoming a reality… excited about the power of Veeva AI and Veeva Data Cloud” .
  • CFO (press release): “We delivered another strong quarter, with results for all metrics outperforming our guidance” .
  • CEO (on IQVIA resolution): “There’s no reason for this conflict anymore… restrictions resolved… biggest news in commercial, for a long time” .
  • CEO (on AI monetization): “I don’t expect any material revenue contribution for ’26 or ’27… significant increase in our market size… will play out over many years” .
  • EVP Commercial Strategy (Vault CRM commitments): “Total of nine top twenties committed to Vault CRM… earliest Salesforce go-live in a single region is 2026, possibly finishing 2029… chance all three Salesforce customers go live in all regions is actually low” .

Q&A Highlights

  • IQVIA partnership: Removes data restrictions in Network/Nitro, simplifies TPAs, energizes joint customer integration; revenue unlock not material in FY26 but important in out-years .
  • AI agents: Platform-first embedding in Vault, agent-to-agent interoperability via MCP; deep domain agents across CRM/safety/clinical; TAM expansion with measured rollout and consulting-led change management .
  • Crossix: Continued outperformance; audiences are higher-growth usage-based segment; expanding HCP marketing measurement; increasing market share and product footprint .
  • Vault CRM economics: Pricing roughly similar to legacy CRM; short-term COGS higher during transition; long-term COGS lower .
  • R&D subscriptions: Broad-based strength; steady environment; EDC ramps continue across top 20; clinical suite adoption tied to modernization and Veeva strategic selection .

Estimates Context

  • Q2 FY26 results beat consensus: revenue $789.1M vs $768.7M*; non-GAAP diluted EPS $1.99 vs $1.90* .
  • Q1 FY26 also beat: revenue $759.0M vs $728.4M*; non-GAAP diluted EPS $1.97 vs $1.74* .
  • FY26 consensus revenue ~$3.139B* is consistent with company’s raised range $3.134–$3.140B; consensus non-GAAP EPS ~$7.81* vs company guidance ~$7.78, implying minor fine-tuning rather than major revisions .
    Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Durable growth with expanding strategic moat: R&D subscriptions and Vault CRM adoption underpin double-digit revenue growth and high-teens non-GAAP margins; IQVIA partnership structurally enhances commercial suite competitiveness .
  • Near-term beats driven by execution (Crossix, services timing); watch usage-based lumpiness but annual view remains strong .
  • AI agents are a medium-term TAM catalyst rather than FY26 earnings lever; early adopters and consulting-led change are key leading indicators .
  • Guidance raised across FY26 revenue, non-GAAP operating income, and EPS; Q3 outlook implies steady momentum into 2H .
  • CRM migrations accelerating with proof points (top 20 go-lives); product suite breadth (Patient CRM, Campaign Manager, Service Center) should improve attach and ASPs .
  • Watch Compass Prescriber trajectory—management acknowledged slower adoption; improvement could add incremental commercial data tailwinds .
  • Stock reaction catalysts: estimate beats, FY guide raise, and IQVIA resolution; continued top 20 CRM go-lives and AI agent launches (December) are upcoming catalysts .

Additional Data Exhibits

Balance Sheet Highlights (Q2 FY26 snapshot)

  • Cash & equivalents: $1,930.4M; Short-term investments: $4,473.3M; Deferred revenue: $1,107.7M .
  • Stockholders’ equity: $6,638.5M .

Cash Flow (Six months ended July 31, 2025)

  • Operating cash flow: $1,115.6M (GAAP) .
  • Non-GAAP OCF removes excess tax benefits; reconciliation provided .