Q4 2025 Veeva Systems Inc Earnings Call

David Hynes, David

Abby: Ladies and gentlemen, thank you for standing by. My name is Abby and I will be your conference operator today. At this time I would like to welcome everyone to the Veeva Systems fiscal 2025 fourth quarter and full year results conference call.

Abby: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one a second time. [inaudible]

Gunnar Hansen: Thank you, and I would now like to turn the conference over to Gunnar Hansen, Director of Investor Relations. You may begin.

Speaker Change: Good afternoon and welcome to Veeva's fiscal 2025 fourth quarter and full year earnings conference call for the quarter and fiscal year ended January 31st, 2025. As a reminder, we posted prepared remarks on Veeva's Investor Relations website just after 1 p.m. Pacific today. We hope you have had a chance to read them before the call. Thank you very much.

Today's call will be used primarily for Q&A. [inaudible]

Speaker Change: With me today for Q&A, our Peter Gassner, our Chief Executive Officer, Paul Shawah, EVP Strategy, and Brian Ben Wagener, our Chief Financial Officer.

Speaker Change: During this call, we may make four looking statements regarding trends, our strategies, and the anticipated performance of the business including guidance regarding future financial results.

Speaker Change: These four voting statements will be based on our current views and expectations and our subject to various risks and uncertainties. Our actual results may differ materially.

Speaker Change: Please refer to the risks listed in our earnings release and the risk factors included in our most recent filing on Form 10Q.

Speaker Change: or looking statements made during the call or being made as of today, March 5th, 2025, based on the class available to us today.

Speaker Change: If this call is replayed or viewed after today, the information presented during the call may not contain current or accurate information. David disclambed any obligation to update or revise any four looking statements.

Speaker Change: We may discuss our guidance on today's call but we will not provide any further guidance or updates on our performance during the quarter unless we do so in a public forum.

Speaker Change: On the call, we may also discuss certain non-GAAP metrics that we believe aid in the understanding of our financial results. A reconciliation to comparable gap metrics can be found in today's earnings release, and in the supplemental investor presentation, but with your available on our website.

Speaker Change: With that, thank you for joining us and I'll turn the call over to Peter. Peter.

Peter Gassner: Thank you, Gunner, and welcome everyone to the call. The fourth quarter was a strong finish to a great beer for Veeva, with strength across the business and results above guidance.

Speaker Change: Total revenue in the quarter was $721 million with non-GAAP operating income of $308 million.

Speaker Change: For the year, total revenue was 2.75 billion and non-GAAP operating income was 1.15 billion [inaudible]

Speaker Change: This past year was a significant year for Veeva. We executed well and delivered significant innovations across all product areas and made great progress on our AI strategy. [inaudible]

Speaker Change: The year was also about looking forward. We set our 2030 revenue goal of $6 billion which reflects the significant opportunity we have ahead, and we announced our planned expansion into new markets.

We're now opening up the call to your question.

Speaker Change: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue.

Speaker Change: If you would like to withdraw your question, press star one a second time.

Speaker Change: If you're called upon to ask your question and are listening via speakerphone on your device, please pick up your handset and ensure that your phone is not on mute when asking your question.

Speaker Change: To be able to take as many questions as possible, we ask that you please limit yourself to one question and one follow-up

Speaker Change: Again, it is Star One if you would like to join the queue. [inaudible]

Speaker Change: And your first question comes from the line of Joe Vruwink with Baird. Your line is open.

Joe Ruink: Hi, great, good afternoon. I get spurs congrats on the top 20 customers that went all in with Veeva and clinical after you mentioned seeing these opportunities last quarter.

Joe Ruink: One else, I think there's maybe a trend in the large pharma community to perhaps reduce procurement risk and consolidate around strategic vendors.

Joe Ruink: Is that part of why these opportunities are now arising and how do you generally think about large strategic transactions like those when thinking about what you might see in the upcoming year? [inaudible]

Joe Ruink: I think this is really about, for this particular customer and this is really about speed.

Joe Ruink: Just more efficient to make a combined decision for the full Chronicle platform.

Joe Ruink: For the top 20 farmer there, more with us focusing on competitive advantage, speed, compliance, not really risk it as...

Joe Ruink: Not really a risk of avoidance, also there's some desire to somewhat standardize because they know in the clinical area the more they standardize together, it'll make it easier for the clinical research sites they deal with. [inaudible]

No

Joe Ruink: I wouldn't draw any particular conclusions to other customers. The one pattern would be we are getting more strategic with our customers as we have more product solutions and more of our product solutions are proven, but each of the top 20 is going to take a different path. This is due to there. [inaudible]

Joe Ruink: They're just where they are in their technology journey and also where they're at in their pipeline and the things that need to accomplish. [inaudible]

Speaker Change: Okay, that's great Peter, thank you. And then I wanted to ask just on recent industry development, even though I think recently there was even some news over my just now in terms of

Speaker Change: I guess along those same lines, if there are changes to indirect research funding, how do you think about potentials, knock-on effects over time? What customers might be thinking about and then how that ultimately impacts Veeva?

Speaker Change: Yeah, hey Joe, it's Paul, and yeah, we're certainly paying attention to what's happening around research funding, but I'll take your question maybe a little bit more broadly. There's certainly a lot that's happening, right? There's a lot of proposed changes across many different areas. We're seeing changes in the news daily about FDA or NIH or price negotiations, so there's a whole lot going on. [inaudible]

Speaker Change: It's early. It's a little bit early to predict exactly what the impact may or may not be. One thing I can tell you is our customers are there's really no impact that to our customer decision making process so far. So we're not really seeing any change there. [inaudible]

Speaker Change: We're going to have to see how things play out, particularly as it relates to NIH. There's just a lot of factors that come into play, it's a super early to predict. I guess maybe two things that I might point out for you though. Life sciences is generally more resilient to economic cycles or potential changes that you're talking about because it's an adaptable industry that are accustomed to these kinds of changes. And then as it flows through to Veeva, our revenue tends to be more predictable. All right, it's core systems, it's annual subscription. Thank you.

Speaker Change: Projects may get delayed, but if there is disruption due to something like this, those projects typically come back. So it's it's early to give you a detailed assessment of what the impact looks like, but it's something we're keeping our eye on closely. Thank you very much.

Speaker Change: And your next question comes from the line of Saket Kalia with Barclays. Your line is open.

Okay, great. Hey guys, thanks for taking my question here.

Speaker Change: Peter, maybe for you. I thought it was interesting in the prepared comments how you called out 17 of the top 20s using CTMS, which I think replicates some of the success that you've had with ETMF.

Speaker Change: As you think about the growing success with different parts of the development cloud, what are the products could that success in an ETF and CTMS maybe pull through as you think about sort of the next the next sort of product cycles here? [inaudible]

Peter Gassner: Thanks, Saket. Yeah, that's, that's very, you know, insightful of you to let out the industry, the top 20 seem to be standardizing on our EGMS and CGMS.

Peter Gassner: And if we step back, that was an innovation that Veeva created. These systems never got together before Veeva. It was a document system way over someplace else and that transactional system, someplace else, the Veeva Vault Platform enabled this.

Speaker Change: transition and I was there in the beginning when people sort of called us heretics right these things don't you know you cannot put peanut butter and jelly together it's not going to be good right. Let's go ahead and see what happens.

Speaker Change: But now, it obviously enables this seamless flow, so they are standardizing on that, and we have to keep up the good work and the customer's success, we can't rest on our laurels at all, and we're not so far.

Speaker Change: But your question is what can it lead to? That leads to the broader clinical suite and you saw that with one top 20, which is things like study training and site connect. These are both major applications very deeply, very deeply connected with. [inaudible]

Speaker Change: CTMS, CTMS, the payments module and we'll be doing further investments there. That payments product can become a suite of products for Veeva.

Speaker Change: and then that also leads into the clinical data management, the EDC, CDB, also these big new areas of RTSM, randomization and trial supply management, and also the ECOA, the clinical outcomes assessment.

Speaker Change: Just to give a perspective, roughly speaking, you know, I wouldn't hold a ruler up to this, but roughly speaking, EDC is one of our larger product line areas, larger opportunities, but RTSM is roughly equivalent to EDC.

Speaker Change: and Ekoa is on its own is roughly equivalent to EEC. So these are not small areas, big areas . . . .

Speaker Change: Klankel is roughly one-third of our of our of our opportunity, our camp because it's such an important area and there's a long way to go and E.K.M.F. and C.K.M.S.

Speaker Change: Success, not just selling the product in, but the success and the fact that our implementations are getting faster and faster.

Speaker Change: Our implementations now are faster than they were before and that's really what people are looking often to be but I know I'm going a little long on this but it's a such an insightful question.

Speaker Change: Sometimes the question is, I'm going to go to Veeva, but how can I get there the fastest and the most economically and the most accurately? And we're much better at that than when we were two or three or four years ago? [inaudible]

Speaker Change: It makes a ton of sense. Brian , maybe for my fall-up for you, just building off of what Peter talked through. I was running if he could just touch on CDMS or EDC. I was running if he could just touch on how that's contributing to Billings in fiscal 26. [inaudible]

Speaker Change: You know, you had some some big top 20 wins in EDC a couple of years ago and if I recall correctly, those are ramping contracts . . .

Speaker Change: How do you kind of think about that contribution in fiscal 26? And maybe the corollary that since we're at the end of the year and to make sure the question is asked, as you build scale in that EDC business, is there anything that is there a finer point that you could give us just on relative size of that business? Yes.

Speaker Change: Hey, Saket, thanks for the question. So, you know, as you just heard Peter speak to, about a third of our overall tab is in the clinical space, so it's certainly a large opportunity and within that EDC is a pretty significant component.

Speaker Change: So, you know, from a ramp perspective, there are ramps that are steadily contributing to our revenue base, both the buildings and the revenue. And ramps are not limited to EDC, so we see that dynamic with top 20 customers in really all of our R&D products.

Speaker Change: There's no one product, no one customer, no one year with that really spikes, but it's factored into our guidance for FY26.

Brent Braceland: And your next question comes from the line of Brent Bracelin with Piper Sandler. Your line is open.

Brent Braceland: Thank you for taking the question here. Peter, great to see the momentum. Great to hear the peanut butter and jelly narrative is actually starting to work.

Brent Braceland: I wanted to drill down into data cloud. You really brought up the point in the prepared remarks that Compass represents the biggest single data opportunity for you. You got over a hundred brands here. I think a year ago, nine months ago, you talked about your first seven-figure

Speaker Change: Obviously, a lot of those compass customers can start small, but would love to get any color you had on larger transactions, any sort of expansion opportunities you're seeing, thanks.

Speaker Change: We've organized internally a little bit more around data class, which is that's compass, that's open data, that's link, and that's pulse.

Speaker Change: that a new product we just announced. So I think that we're getting that vision out there and I think that's starting to resonate. You know, that's like going back to ETMF and CTMFs back in...

Speaker Change: 2018, that's sort of the way I feel that people are starting to get the glimmer of oh okay that might really work. [inaudible]

Speaker Change: Now, in terms of compass, most of our progress and compass is on, we have two main products here, compass patient and the compass prescriber. Most of our progress and revenue in our earlier product is in the compass patient. And now we haven't seen really a trend to ELAs yet. We're still on the brand by brand.

Speaker Change: I think that trend to ELA's, you know, large enterprise ELA's, we might be a year or so out for that, but the trend is kind of escapeable. I also think I'm very excited about bringing this value of data cloud into the smaller market. [inaudible]

companies of under

Speaker Change: 50 employees, because when you think about it, they critically need data. They have to decide, are they going to run this clinical trial? Which indication are they going after? How are they going to do this? What's the patient pathway? They really don't have a good source of that data. So...

Speaker Change: I want to make something great for these small companies. Really great, really easy, integrated patient and prescriber data. I think we've been really help boost the last time to minister on that. So, as you can tell,

I really think we've got something in Data Cloud. . . . .

But the adoption is early.

Speaker Change: Color there. And then Brian , just to follow up for you, the full-year margin guide here, highest we've ever seen, that comes at a time where you're investing in R&D, you have kind of the whole investment focus around a vault CRM additional products here. What's driving the guide here above 42% out margin? Thanks.

Speaker Change: Yeah, great question to the, you know, the main way that we think about margin is investing the right amount in the business. So we've always thought about growth and profitability and don't really view those in conflict with each other.

Speaker Change: So what you're seeing is that we're always trying to get more efficient, and it's because that efficiency allows us to execute better and faster. We find that...

Speaker Change: Lean teams are more agile, they've got better speed. And so we think there's going to continue to be efficiency in economies of scale, but what we're optimizing for and what you're seeing reflected in the guide is they're optimizing for speed and execution, not margin.

Speaker Change: We're continuing to invest in the business for growth. We're spending about twice on product, but we do on sales and marketing and keeping that focus on product excellence and innovation in our products.

Speaker Change: And your next question comes from the line of Rishi Jaluria with RBC Capital Markets. Your line is open.

Speaker Change: customer feedback in use case has been and then I've got a quick follow up.

Yeah, AI strategy, certainly a captivating technology, right? [inaudible]

Speaker Change: So much money going into it, so much progress and so much hype. And if we just...

Speaker Change: At that level, I'm really pleased that things are starting to shake out. You know, roughly how we thought they were going to shake out.

Speaker Change: There's not going to be one large language model, there's going to be multiple, there's not going to be 50, but there's going to be a good handful and they're going to specialize in different areas. And you know, it's not so unstable anymore where you wake up and everything changes, right? Deep seat, come out, came out, yes, well guess what, the world keeps turning. [inaudible]

Speaker Change: You know, Enzivi is going to have their own model. Okay, that's okay, and the world keeps turning. So I think it's starting to settle out that an Amazon, you know.

Speaker Change: People were counting them out on AI for a while. Well, okay, they're back in the game in a major way. So it's settling out that these core large language models are going to be at the platform level and a real a lot of core value, and that's super valuable, right? That's not where companies like...

Veeva Play at that core and pre-structure level, it's very valuable.

Speaker Change: But there's a lot of great value on the specific use cases on top.

Speaker Change: that can be used in the workflow. So that's what we're doing now, focusing on our AI solutions. We have our TMM, TMF to class by documents. That was a very early sort of experiment.

Speaker Change: Now, with CRM voice control that we'll be bringing out this year.

Speaker Change: We're putting more investment in AI solutions. We centralize the group around that so we can develop, I have a strong leader there and develop more car competency around around AI. And I think our timing is just right because the base...

Speaker Change: of the technology is now stable enough, and while that base was getting stable instead of running around and hyping things, we were focusing on things like EDC and TMS, etc. So I'm pretty happy with our how things are playing out with AI.

Joe Ruink: All right, wonderful, that's really helpful, Peter, thanks. And then maybe wanted to get a sense. I know it's still really early, but the analyst day prior to the last quarter, you did talk about this potential move or plan to move into horizontal apps. Now that we've got three or four months under our belt, you know, and you've been talking to your gist of customer base, I imagine, you know, your engineering team, just how have those discussions shaped out? Where have you seen where there's opportunity for

for more information.

Yeah, I'll start with our existing customers. [inaudible]

Joe Ruink: They've asked a little bit what will we do in new markets, but not so much because they know we have a dedicated almost everybody in the companies on life sciences, so they really, I think, are Veeva in life sciences and are more curious in anything else, what will we come up with? [inaudible]

Joe Ruink: And then in terms of the product areas, we're just doing a lot of great work on the platform. It's a really lean, really great team, you know, very close to me. I have a good leader there, you know, I'm having so much fun, you know.

Joe Ruink: You know, reviewing the individual engineers that grow into that group and making sure we get the special sauce of the right seven people, the right twelve people doing what and what order. So I'm really enjoying that.

Joe Ruink: and we're focused on innovation in that platform. If you look at the application tech platforms and that's something I know about all the way back from people saw Salesforce etc.

Joe Ruink: Most of the Cloud Platforms now are really version one. And...

Joe Ruink: You know, maybe there's a need for a version two type of thing, maybe or maybe not, but that's the risk we're taking that we think there's a version two type of thing that can come out. That's where we're focused and we haven't, we don't have anything to announce at this time about which application area we're going into. [inaudible]

Speaker Change: Great, thanks for taking my question. Peter, good to see the momentum on the EDC side with another all-in customer. Just wanted to circle up on just a competitive landscape there. You had a competitor call out a potential wind back. Are you guys sensing any changes in the customer conviction for EDC, CDMS? Any color there would be great.

Peter Gassner: Yeah, in terms of the competition there, you know, in the clinical...

Peter Gassner: You know, there's been metadata in Oracle and the EDC area, not so much in the clinical operations area.

Peter Gassner: I think increasingly people, they do want an integrated system between clinical operations and clinical data management or the EDC area. I think that gives us a bit of a structural advantage over our competitors. We have 9 out of the top 20 doing an EDC now and about half came from

Peter Gassner: and there was Oracle on mediator about half came from each. [inaudible]

Peter Gassner: So, but we try not to focus on that a lot, right? We really need to focus on the value of sometimes I look at all the clinical trials that are running on our platforms and some of the really innovative companies that are growing so much and doing so many clinical trials.

and really starting to think about... [inaudible]

Peter Gassner: If we would have most of the market in the EDC one day.

Peter Gassner: What kind of innovation can we do to put on top of that to really, really fundamentally change clinical trials?

Peter Gassner: So our focus is not on the competitor. It's on us doing a great job, catching the remaining part of that market share, but I'm already thinking ahead, what amazing innovation can we put on top of that once we've standardized this core EDC a little bit more? [inaudible]

Got it!

and Brian , just a quick question on cash flow guidance.

Um...

Speaker Change: It looked a little light relative to the building strokes. I think we're casting about 8% growth on cashflow versus you got 10% on buildings and some slight margin expansion. Any one-time items or some working capital movements that we should be aware of there? Yes.

Thank you. Take care.

Speaker Change: SBC, Stockbase Comp, but the one time difference we had last year is we had about a $50 million impact of collections pushing from the prior year, so what you're really seeing is just a harder year over your compare rather than anything else. [inaudible]

Speaker Change: And your next question comes from the line of Brian Peterson with Raymond James. Your line is open.

Brian Peterson: Thanks, guys, congrats on the solid buildings. It definitely sounds like it's peanut butter jelly time. But I'll keep it to one. Paul, the prepared remarks referenced some expected vaults here in commitments from top 20 customers in 2025.

Brian Peterson: I'm curious, how have the decision timelines gone versus your initial expectations? And would you expect 2025 to maybe be a bigger year or 2026? Any color there? Thanks, guys.

Yes, I'm sure, Brian .

Brian Peterson: So first, it's going along as exactly as we expected, right? We're not forcing customers and doing anything unnatural, and of course customers into a specific...

Timeline,

Brian Peterson: We want to do this in a very customer-friendly way. Having said that, we're in discussions with all of top 20, and we're progressing in every month, every week that goes by. We progress those conversations. There's a lot that they're excited about. Everything from our delivery or consistent execution, the migration progress that we've made.

Brian Peterson: So there's a lot of really good momentum. Also the road map of our products, innovation, road map, everything that we're doing. Thanks so much.

Brian Peterson: The conversations are going very, very well. What we wanted to happen on the customer's timeframe, and having said that, we expect more announcements in 2025, and I expect the vast majority of decisions, particularly in top 20, will happen by the end of 2026.

Brian Peterson: So that's how to think about it. We're not forcing anything, but we're excited and we're excited that the momentum's in our direction and we'll win most of the decisions. We still expect to win the vast majority.

Thank you.

Speaker Change: Customers are starting to get aware of a conflict of a red zone. You can't let this decision go too long because then you won't have enough time.

Speaker Change: 25-26 is reasonable for many customers depending on the complexity of what they're doing, maybe the early part of 27 could be there, but after that you really started getting into the red zone for most customers, so that's why we...

Speaker Change: Even though we will support Veeva here, I'm all the way till 2030, you know, when you're talking about change management with, you know, well over 10,000 people and functions and decustomizing and repointing integrations, it's not something you can do in six months [inaudible]

Speaker Change: And your next question comes from the line of Dylan Becker with William Blair. Your line is open.

Speaker Change: Hey gentlemen, Paul, maybe pulling on that thread on the CRM front, you kind of touched on the accelerated innovation cadence, right? We've seen a number of new product releases within the CRM suite.

Speaker Change: I'm wondering how much that is driving this appetite and interest obviously in the platform as well too with there's clarity kind of in the product roadmap how that's helping kind of give confidence and this decision in cadence maybe over the next two years or so.

Speaker Change: Across all of our customers, top 20 all the way down to SMB because we are making really for the first time in life sciences.

This idea of customer centricity. [inaudible]

Speaker Change: simpler, easier, everything in one database, that's never been done before. [inaudible]

Speaker Change: So there is a sense of, we have a clear vision, our customers see a path to getting there, and they see Vault CRM as the foundation to making that happen. So that's not the only part of the decision making process, but it's a key thing, and we're bringing this customer centricity of life sort of excited about the new potential there. [inaudible]

Speaker Change: And then of course it unlocks potential for these new markets, new expansion opportunities to sell additional products as customers migrate over.

Speaker Change: Okay, that's a total call. Thank you. Maybe, um, for Peter and, and or, Brian , here to, going back to the topic of AI as well too, you announced the direct data API and kind of the value of interoperability wondering.

Speaker Change: If you're seeing any kind of accelerated momentum around kind of being able to build on top of the accessibility of your data sets and maybe if that's the view externally, how you're leaning into kind of internal utilization too if we think about kind of some of the margin strength you're delivering throughout the business. Thank you.

Sure.

Brian Peterson: Let's see, in terms of margin of vinyl, I'll leave that one to you. Thank you.

Brian Peterson: Yeah, we are seeing a good uptake of the Direct Data API and we, as you mentioned, we recently announced that that's going to be free to all of our customers and the reason there is we want everybody building on that type of API. It's just a much better faster API for many use cases and we found the way to do it.

Brian Peterson: where it was not going to consume as many compute resources as we thought it was. So, we're pretty excited about that. We're using it internally, for example, for connecting different parts of our clinical suite, different parts of our safety suite together. .

Brian Peterson: It takes some time because it's a different paradigm for integration. People have been using a hammer for a long time and now you're giving them a jackhammer and they got to learn how to use it, but we are super-enthused. It's a fundamental new type of API where you can get...

Like all of the data out of your vault. [inaudible]

Brian Peterson: Super-quickly in one S3 file every night and transactionally sound deltas every 15 minutes

In one file, nobody has that type of thing and... [inaudible]

Brian Peterson: AI is just pumping up the demand for data everywhere, AI and data science, and overall that's just the trend, that's these compute powers getting more and more

Brian Peterson: Accessible, people want that data in more and more places all the time. [inaudible]

Brian Peterson: So I'm really enthused about what we're doing for the lifetime through the industry because many of their core systems are Veeva and now

Brian Peterson: Their courses are going to be enabled with this fundamental new AI. Fundamental new API that's going to allow them to leverage their core data faster than any other industry. So hopefully we're doing our part to help the life sciences industry grow and that will be good for you.

Brian Peterson: Bill, Mrs. Brian , you would ask the second part of the question around the internal use of AI and the extent to which that was contributing to margins, I think.

Brian Peterson: And I think the short answer there is it's an area that we're really excited about internally as well we're building strategies around but it's not a major contributor to the margin expansion that we saw in Q4 or in the coming year so something we're we're looking into we're you know building strategies around it's not something we're counting on though to deliver on this year's guidance. Thank you for joining us today.

Speaker Change: All right, thanks for taking my questions. I want to go back to the prepared remarks. I believe you called out positive moments in variety of products, including site connect, study startup, RTSM, E-Cola.

Speaker Change: Now to me that seems that these are precisely the products that a customer would want to buy if they were ramping in EDC. So my question is, are these atoms being sold in parallel to when you're selling EDC or are these? [inaudible]

Speaker Change: Opportunities kind of emerging once these clients are starting to ramp their EDC and therefore, you know, is there more to come in that regard. Thanks.

Speaker Change: Yeah, I'll take that one. In general, I wouldn't say connected to EDC. EDC is kind of a, in some ways a special area of a life science company is pretty specific, pretty stand alone.

Speaker Change: Hey, we're going to invest in modernizing our clinical tech because sometimes they may not want to do that. Sometimes they want to have a taste status quo. We've got other things going on. We don't want to move one thing because it might break another thing. [inaudible]

Speaker Change: But, so they may be in that mode or they may be, hey, I'm going to invest in our clinical tech [inaudible]

The other one would be...

Speaker Change: Yeah, we've decided Veeva is a very strategic partner. Maybe we're not buying all things at once, like that one customer did, but we've decided, well, that's where we're going.

Speaker Change: So when we do modernize, we'll get Veeva. So those two trends more than any type of the EDC attachment is what's causing those other products to move.

Speaker Change: Got it. And then a quick follow-up on the top 20 announcement. I'm just curious how long will it take for this to fully ramp and revenue, and can you ballpark the size of this contract once it's fully ramped? Thank you.

Speaker Change: Yeah, I want ballpark the size of that contract. It's, you know, it's a...

Speaker Change: And your next question comes from the line of David Windley with Jeffries. Your line is open.

David Windley: Thanks for taking my question. Perhaps a good segue from the last one, Peter.

Speaker Change: We recently surveyed clinical development folks about their tech stack, and they said...

Speaker Change: They're very fragmented today and would desperately like to move to an integrated solution which is I'm sure music to your ears. I'm wondering in your answer about this all-in client and speed being a driving factor, is that speed? You need it.

Speaker Change: to get the full implementation, or is that efficiency and speed of their organization once they are fully implemented on a more integrated system like yours?

Speaker Change: and then part B of the question would be to what degree can you measure? I don't know.

Speaker Change: and use that as your selling point, how you're enhancing the efficiency of your clients when they do move to an integrated technology stack like yours.

Speaker Change: Together. Now, what it could have been instead, and in a very quick, not very quick, but over a set of months really looking at a wood-like and integrated system, who is a partner we can depend on, who has these things, who have the track record of success. Okay, that's Veeva, let's go that way. And that was driven from...

Speaker Change: The high level of the organization, not from within one of...

One of the sub-department

Speaker Change: If the customer doesn't go that way, there might be an 18-month sales cycle for each of those applications in each of those departments with a different start date with independent projects planned and temporary integrations. So you double your speed of evaluation and implementation when you go all at once. [inaudible]

Speaker Change: So, that's the main thing that I was referring to. Speed to value and cost, eliminate these RFPs, these seven RFPs. Don't do that. Go with Veeva, make it easy. Now, in terms of quantifying,

Speaker Change: You know, the value when they get in there, that's something that is not so easy, because different customers, different measure value differently. Generally, what people do is...

Speaker Change: They will ask for references. They will ask each other. Hey, we're thinking of using Veeva.

Okay, I know.

Speaker Change: This person at that other company is using Veeva, you know, and I'll ask him, hey, how's it going? Do they like it? Are they getting what they expect? So it's really that and I I think those are actually more accurate because those are leading indicators versus depending on them.

Speaker Change: A lagging measurement and did you measure it correctly? So, for better or for worse, that's how that usually goes. [inaudible]

Speaker Change: Got a quick follow up on on compass. You in the past have used what I think are the magic words of compensation grade data.

Speaker Change: Where would you say you are in terms of validating at that level a compensation grade data set that could begin to displace the competitor at that important level of consideration? Thanks.

Speaker Change: Yeah, the compensation incentive compensation grade, sometimes we shorten it to IC incentive compensation grade data.

Speaker Change: There's a few things, our two main products encompass our patient and prescriber, patient data and prescriber data. For some types of products, they really...

Speaker Change: Because of the complexity of the products, they're really paying on the individual patient data.

So...

They will view that over time. Hey, how is Veeva's? [inaudible]

Speaker Change: But in the meantime, for prescriber, there's another great use for which is segmentation and targeting at the prescriber level. And sometimes there we're going to have better coverage than our competitors. So it's a long, long road for compass, but we're definitely starting down that path. Thank you.

So we'll see how it goes.

Speaker Change: And your next question. I guess one thing I could tell you is we're not giving up on it. That's for sure, right? It's just a matter of how long it can take.

Speaker Change: And your next question comes from the line of Kirk Materne with Evercore ISI. Your line is open.

Kirk Madden: Yeah, thanks, and congrats on a nice fourth quarter. I don't know if this is for Peter Paul, but I was wondering if you guys could just talk about

Speaker Change: You know, any potential risk in terms of the amount of consultants needed to help your clients move on to vault CRM?

Speaker Change: or what that dynamic looks like in the industry right now, as I know, as everybody's making a decision around this, they obviously need help, you know, making this transition. How do you feel about sort of the bandwidth being there to help them get over from the other system on the vault serum? Yeah.

Yeah, that's a good question [inaudible]

Speaker Change: Veeva, right, we have our products, our software data products, our data products, Jail Sommer Services team.

Speaker Change: and we have our consulting team and then we have a network of partners. [inaudible]

Speaker Change: One thing to know about Veeva and it gets to core to who we are.

Speaker Change: But it won't last forever, just get through it. So, our serves team, I would say, is amazing and complex and complex very well. You also see that in our partner ecosystem, like Accenture. [inaudible]

Speaker Change: They are the masters of flexing to meet demand, much more so even than Veeva, right, and they can do that scale so...

Speaker Change: I really honestly don't worry about that. They have a lot of Veeva expertise. Accenture does. We do too. Both of us kind of flex and we're not the only one. So, I don't minimize the hard work and your question is very good. We can flex. [inaudible]

Speaker Change: And it's not just the initial migration, it's the Delta migrations, etc. That's a lot of work which is largely going to be automated in here because we control both the source and the target. [inaudible]

Speaker Change: And then just one last one through your peer, obviously in the life sciences industry, people are thinking a lot about tariffs and how they have to move things around potentially in terms of their supply chain. Do you worry at all about those kind of decisions distracting from, say, signing new contracts with you all, or where do you think that stands right now? I know it's sort of in flux, but I'm just curious on your opinion on that. Thanks. Thank you very much.

Speaker Change: He has very early and seems to, you know, there's different announcements every day and Paul alluded to that [inaudible]

Speaker Change: If there ends up being a lot of destruction, that can cause loss back of focus in the way contracts. We haven't seen that yet, but that could happen.

Speaker Change: It's just too early to know whether that's really going to happen. You've seen no sign yet. And again, what Paul mentioned is if that were happened, the nice thing is it really just delays things. You know, it may push it out a little bit. It's not a consumable product where you lose the opportunity. I hope it doesn't happen. Thank you very much.

But we just don't have enough data yet to know. [inaudible]

Speaker Change: And your next question comes from the line of Anne Samuel with JP Morgan. Your line is open.

Anne Samuel: Hi, thanks so much for the question. You know, you highlighted in your prepared remarks that safety was an area with a lot of opportunity for AI innovation. I was hoping maybe you could just speak to, you know, kind of why that is and maybe just expand on that, you know, maybe provide some examples of what, you know, what kind of technologies you might be able to use there. Thanks. Thank you.

Anne Samuel: I can take that one. I guess I'm doing a lot of talking today but it seems to be a lot of product related questions, Ryan, and I love that. Well, it's not that complicated in the safety area. We are the first true cloud integrated set of safety applications. So the core safety processing, safety signaling, the safety workbench reporting. Thank you very much.

Anne Samuel: Nobody has had that in the cloud before. And when you have it in the cloud, there's benefits. There's benefits of performance. You don't have to manage the infrastructure. You don't have to manage the upgrade. You can configure it. So that's...

Anne Samuel: Probably, honestly, the main thing. There are some other benefits with the Veeva system. I think it's a better safety system than what's out there. There's different features and functions, things like that.

Anne Samuel: For some, they're really induced about the connection into clinical, which is a real cost saver.

Anne Samuel: But I'll bring it back to the number one basics is they'd like to have a cloud-based safety system that's high quality and finally they can have it now.

Great, thank you.

Speaker Change: and your next question comes from the line of Ryan MacDonald with Needham. Your line is open.

Ryan McDonald: Hi, thanks for taking my questions. Maybe I'll start with one for Brian just to get him in the action here. Brian , as you think about the strong op-margin guide for to start the year, can you kind of call out maybe the areas where you expect to get sort of the most incremental leverage? It sounds like R&D is going to be a continued area of focus from an investment perspective, but how should we think about sort of those incremental leverage points?

Speaker Change: Brian , thanks for getting me in here. Peter was on a roll though, but I'll do my best to jump in.

Speaker Change: And then beyond that on the op-x side, it's quite broad-based. It's just us looking to be efficient and execute better across the business. That's in our sales teams, it's in our marketing teams, it's in our product teams, so looking to be efficient and effective and execute well across the business.

Speaker Change: You know if I could just touch a little bit of the why

So why on that?

Speaker Change: As we get more products, as you know that the field tends to get a little bit more efficient. There's relationships you can leverage. Sometimes there's a broader decision made rather than fixed decisions, so that's where efficiencies in the field come. Also, every year, and we have to keep it up, but every year if we execute well, we develop more trust.

and we need to go more trust that.

Speaker Change: That translates into more efficient sales because communication is higher fidelity. So that's on the sales side. On the product side, there's more, there's more of a mathematical reason.

Speaker Change: The more products we develop on deep evolved, the more efficient we get, the more economies of scales we drive out of the platform.

Speaker Change: If we have 20 applications on that platform, it's an efficiency of one thing. If we have 40, it's an efficiency of another, and if we have 80, it's a whole efficiency of another thing. So that one's just more mechanical on that side.

Speaker Change: Super helpful color there. Paul, maybe a fault for you. Cross-ex obviously continues to perform really well but as you're getting into the new calendar year, we started to hear maybe a little bit more sort of pull forward of spend like to early in the year or more upfront, purchasing around marketing spend. Are you seeing similar trends within Cross-ex at all or any reason to think that we see a greater mix of sort of upfront or sort of beginning of the year spend versus years past. Thanks.

Speaker Change: Brian , why don't I pick up that one, Paul? So on Crossroads, obviously, very pleased with the result that we had last year was the major driver of the outperformance that we saw in commercial throughout the year and feeling really good about the trajectory there. I think no change that we're seeing to the overall shape of a revenue in Crossroads if you're asking about linearity there. We saw a strong close to Q4 and expecting continued growth out of that business in the year ads. [inaudible]

Speaker Change: And your next question comes from a line of Craig Hettenbach with Morgan Stanley . Your line is open.

Speaker Change: Yes, thank you. Peter, just going back to the commentary around AI and the strategy there. Any milestones to watch for this year? Is that business develops? And then also from a customer base? I think last year there was a bit of applause and customers are evaluating new technologies like AI. Like, where are their heads at in terms of what they're most focused on today? Yeah, that's right.

Speaker Change: Neumostos to look for the releases of our CRM bots and our MLR bots and the success we start having with customers.

Speaker Change: Those are really the milestones and it could be new products that we announced because there are new AI solutions so those are the things to look for.

and in terms of...

Speaker Change: I believe we called it before AI disruption, maybe that was 18 months or so a year ago. I think that's largely behind us. Our customers have settled into what AI is and what it does. They're still doing some innovation projects, but it's not consuming them or distracting from the core work. So I think we're. [inaudible]

largely through that area of AI distraction now. [inaudible]

Okay, that's helpful, thanks.

Speaker Change: And your next question comes from the line of Gabriela Borges with Goldman Sachs. Your line is open.

Gabriella Borges: Hey, good afternoon. Thank you for taking the question and thanks for all the product detail on the call. Paul, I want to follow up on your earlier comment on commercial. You mentioned that, and there are several customers that you've been speaking with that are looking to make decisions in 2025 and ideally before the set by the start on 2027. The customers that you're talking to. Thank you.

Gabriella Borges: What do they tell you are there reasons for hesitation, meaning if they're telling you, hey, we're not ready to make a decision yet? What are some of the reasons that they tell you that is? And what do you do then to help them feel better about making a decision, or to help them along in that discussion? I don't know if I can make a decision.

Gabriella Borges: really frankly focused on other priorities, right? It may be something related to the launch of the medicine coming up and...

2025 or 2026 and they want to...

Gabriella Borges: kind of focused the resources there and then think more deeply about the CRM decision. So I would say there's no single answer. It varies, certainly varies by customer.

Gabriella Borges: Deliver new products, deliver innovation, deliver on the CRM bot that Peter just talked about.

Deliver on the Migrations.

Gabriella Borges: And that's our answer is delivering our customers are looking for delivery. They're not looking for kind of big bold statement and type, that sort of thing. So...

Gabriella Borges: Again, we're not forcing them down a path and we're I think it's it's a customer friendly way of approaching the market [inaudible]

Speaker Change: Absolutely, thank you. Peter, the follow-up is for you. You made an earlier comment on-

Speaker Change: You're thinking around horizontal applications long-determined, version 1 versus version 2. I'd love to hear your thoughts with you willing to share them. What do you think the limitations are from the version 1 cloud SaaS applications today, and where do you think version 2 from an innovation standpoint could really shine? Thank you. Thank you.

Speaker Change: I don't think there's any one particular area. I think there's a core set of things that are better, stronger, faster, right, accumulation of...

Speaker Change: 5678 things that have been core learning and then putting that together and so when you when you put those together it has a compounding effect I would say that. Also, you know AI will change.

Speaker Change: We'll change the user interfaces on the operating systems over time, not tonight, but sometimes over the next five years, there'll be some fundamental change just in the way that the graphical user interface or the browser base interface change things.

Speaker Change: I think a platform that's designed with that in mind that has but knows, it's...

Speaker Change: Yes, it's going to be used as a core system of records. Some of us have heard this thing from Microsoft's CEO about, you know, these...

System of Record Application, SAS Applications are going away.

Speaker Change: But there is going to be a way to use AI to dip into multiple of these applications and add value and that's going to be a critical component. I think the newer SAS platforms are going to be designed with that in mind because it's obvious that's coming. I think it's pretty hard to retrofit.

Pretty hard [inaudible]

Speaker Change: Hi, thanks for taking my question. This is Jenny Chapp, on floor to Linda Singh. Just a quick question on your guidance. I think your guidance assumes no major changes in the macro environment. And...

Speaker Change: But I think fiscal 26th Guide reflects maybe a little bit of growth deceleration, particularly in the subscription business from 20% growth last year, in fiscal 25 to 13% growth this year, Clyde & Guide.

Speaker Change: Can you help us break down the key factors in the movie pieces there? [inaudible]

Speaker Change: Hey, Jenny, so first off on the guide, you're exactly right, we've not factored in any macro changes into the guide. And as Paul touched on, obviously aware of all the shifting government policies, there's a lot of discussion around it, but we just haven't seen any impact yet in our customer's decision making. So it doesn't reflect any change in macro.

Speaker Change: and then excluding effects. It's about 14% this year. So it's a minor deceleration. It's mostly driven by commercial and within commercial, it's cross sex.

Speaker Change: and that cross-execeleration is mostly a function of last year's very strong outperformance making for a hard year over your compare. So we're feeling really great about the momentum of the business, about the execution of the Veeva teams, being very strong growth in R&D and good growth and commercial as well.

Speaker Change: And your next question comes from the line of Jeff Garrow with Stevens, your line is open!

Speaker Change: Good afternoon, thanks for taking the question. I want to ask another one on the new CRM and post-products.

Speaker Change: and clearly unique in how Veeva Systems are originating in the data there. I want to ask about the differentiation from the global scope that you are already offering on launch, and then the release mentions additional countries being added to this scope. And what looks like you have most of Europe going to follow up on adding additional Asian countries and how much of a catalyst that could be down the line. Thanks. Thank you.

Yeah, I'm very excited about these impulses, Peter. Thank you very much.

Speaker Change: I have a pharmaceutical company has a field force of a certain size in a certain country and they want to be very effective on where where do they tell those people to go so they do what's called segmentation and targeting

Speaker Change: But they don't have any feedback into how the industry does it so they're not able to catch their own internal errors that creep up over time. So with polls, they can get a privacy-safe industry view of the

Speaker Change: of the urologists in this country, you know, who did the industry generally call on? And am I calling on them? And in what way? What touch of access?

Pattern

That's what it's used for. [inaudible]

Speaker Change: It's very unique and it's going to be a great compliment to CRM and to Datacop. The countries we'll add are you write some Southeast Asian countries and then also Japan. And we may add a Europe country or two, one of the other Europe countries or two, we'll see by 2026.

Speaker Change: It's early, we've signed our first deal, actually, for Paul's kind of roughly right before it was available. It was for a top-20 farmer in the U.S. and the country's been to know that's one of our first products where the...

Speaker Change: The first deal was actually a, you know, with a seven figure deal. So pulses is a very interesting product and unique product from Veeva.

Speaker Change: And through our next question comes from the line of Stephen Valakette with Mizzouho Securities. Your line is open.

Speaker Change: No, great, thanks. Yeah, most of my product questions were answered, so maybe just a financial question here. With the fiscal 26 EPS guidance coming in, you're well above street consentist, but revenue growth kind of more in line. If you did call out that 1% revenue growth headwind from FX, which was probably not baked into the street view before today, so.

Speaker Change: He's like ex that, you know, I've guidance, Rev guidance also about the street people but really my question is can you just remind us how much of that affects revenue headwind fall to the bottom line versus some natural offsets in the cost lines that might mitigate some of that? Thanks.

Speaker Change: It's even so, it is primarily a revenue side impact. There's kind of a natural hedge built in on expenses because we have some expenses that are not denominated in dollars as well. And so there's not as much of an impact on operating income. There's been a revenue headwind, but it shakes out on the up and come line.

Just any color there would be very helpful, thank you.

Thank you.

David Windley: David Wheat, Dustin Fagwright, 20 Fault CRM, New Customers, and think of most of these companies as first the vast majority of them in the US market, a small member in Europe , and then most of them small inside companies, the vast majority selecting their first CRM system.

So...

David Windley: Virtually all of those deals. So yeah, we did, we did well there. This is, that's a chunky number. It's an unusually high number, but we're virtually winning every one of us. [inaudible]

Speaker Change: And your next question comes from the line of Andrew Degasparri with BNP Paraba. Your line is open.

Speaker Change: Thanks. Maybe on the trial starts, we've seen an inflexion since October , just in terms of how that's growing, and I was just wondering, is that part of what's given confidence in terms of the R&D growth for the year? And just any comments on that would be great thanks.

Speaker Change: Yeah, I'm the child starts. It's not, you know, our confidence in our clinical performance is not related to that. Remember, the way to think about our clinical businesses that...

Speaker Change: Most of our contracts are enterprise license agreements, particularly as you look at the enterprise side, which is the vast majority of the contribution to clinical today.

So, given that the enterprise agreements are not...

Speaker Change: really impacted by clinical trial volumes, whether that goes up or down. [inaudible]

Thank you for watching!

Speaker Change: And your next question comes from the line of Alan Verkowski with Scotiabank. Your line is open.

Hey guys, thanks for squeezing me in here [inaudible]

Speaker Change: and Congrats on the strong end of the year. Peter, is it interesting to hear you say how you could be through the period of customers being distracted by AI? Can you talk about, you know, kind of what your top learnings were in the past three months in the conversations you have with top 20 CRM customers? Thank you very much, and thank you very much for your time.

Speaker Change: And to just kind of close the loop here on AI. It's just how important is having a strong AI product road map in customer's decisions whether or not to move to Baltimore's year. Thanks.

Speaker Change: So I guess what I've been seeing and I think the learnings and the customers is that you know AI is one part of the technology strategy that did quite many of them did quite a few experience in quite a few areas and rightfully so they wanted to really learn that and see where they could apply things.

Speaker Change: So what they're finding is they need to be focused. They need to focus on the few areas that can really um...

Drawing out

Speaker Change: Newly returned on investment, and they can't ignore the core capabilities in just the execution, so they're kind of segregating things, doing a little bit less experimentation and segregating that. So...

Speaker Change: And I think that's normal, that's a part of the process. And in terms of the vaults here, I'm about AI and how that plays into things.

Speaker Change: Well, it will depend on that size of the customer. For the smaller biotech, they have a lot of things going on and they get a lot of things.

Speaker Change: Prom Viva, and boy, their first launch is critical. It'll be a make a break for their company. It'll either go or it'll go out of business.

Speaker Change: There they don't want risk and they don't want messing around. They can't go from an unproven product on Salesforce.com and some sort of kind of custom build and then piece it together with content and this and that. They just don't have the people. So there it's

Speaker Change: I get Veeva, that's one thing I don't have to worry about and I'm moving on. [inaudible]

Speaker Change: I would think, you know, a couple things, AI is certainly a big part of it, and what we believe is, for the case for Veeva's CRM is there's two things, one,

Speaker Change: Most customers don't want that. Some customers do, but most customers don't want that. And then the second turns out, Veeva is the fastest path to AI that you can use in CRM because it has to be done in the workflow of what you're doing. This is not some generic AI. This is AI for

Speaker Change: Pre-Call planning for compliance, for how to, you know, for the things that a pharmaceutical rep does in a compliant way based on the data sources.

Speaker Change: Veeva is the fastest path to AI, and so I think that's why Veeva, you know, Walt Jerem is appealing.

Speaker Change: And your next question comes from the line of Charles Rea with TD Cowan. Your line is open.

Charles Ree: Yeah, thanks for taking the question. Peter, I wanted to follow up, I think it was David's question earlier, maybe ask it in a slightly different way. Obviously in the last year plus we've seen many large pharma companies. [inaudible]

Charles Ree: You know, undertake significant restructurings of their development processes and in many cases, taking more of those capabilities in house and moving to more of a functional FST model of development, which certainly should give them greater control and engage in efficiency through standardization.

Has this been maybe part of the drive? [inaudible]

Charles Ree: A driver of growth for Development Cloud, or maybe it's the reverse, finally having something like Development Cloud available to them allows them to

Charles Ree: To start this process, take more in-house, whereas in the past, maybe the efficiencies weren't there for them and so they kind of maintain these more broader CO relationships and really outsourcing development.

Charles Ree: Yeah, I think in an interesting way, I think the Veeva Development Cloud has played a small part in the move.

Charles Ree: from the large pharma to do more functional outsourcing rather than full service because they're able to get a bit more efficiency and have an integrated tech stack.

Charles Ree: So they want to take advantage of that now that doesn't apply to many small biotechs right they need to speed and they use

Charles Ree: and they want to detect in the process and everything all together. So...

I think...

It's

Charles Ree: In general, I wouldn't say it's driving the large percentage of the Veeva development cloud, you know, uptake . . . .

Speaker Change: And your final question comes from the line of Peter Griffith with City. Your line is open.

Speaker Change: Hey, it's Peter on the line here for Tyler Radke, congrats on the great quarter . . .

Speaker Change: So EDC has been really strong here over the past few years and it still seems like there's a good opportunity for a tax-racing cynical. I believe you touched on a bit, but we'd like to get some detail on what products you usually see customers choosing to adopt in the clinical suite after choosing EDC, just trying to understand through a typical pathway for product adoption or if it varies by customer. Thanks.

Speaker Change: It is going to vary by customer. Oftentimes our EDC and our CDB are clinical database, they go together. Then I think, you know, the typical things after that would be

Speaker Change: Well, I'll start looking at Etoa a little bit more. I think it would be a…

Speaker Change: is, you know, it started much later than our EDC, and it's not as mature, and those two departments are highly close to each other, the ECO and the EDC. So I think EDC success will be a good indicator of WTOA success.

Speaker Change: I don't think it informs the other ones too much, really. I think those are independent groups when you look at RTSM, study training, site connect payments, those are more influenced by the ETMF and CTMS.

Speaker Change: And ladies and gentlemen, that concludes our question and answer session. I will now turn the conference back over to Mr. Peter Gassner for closing remarks.

Peter Gassner: Thank you everyone for joining the call today and thank you to our customers for your trust and partnership.

Speaker Change: And thanks for the Veeva team for your outstanding work in the quarter and year. You're the best, and I love working with you.

Thank you [inaudible]

Speaker Change: Ladies and gentlemen, this concludes today's call, and we thank you for your participation. You may now disconnect.