Q2 2027 Veeva Systems Inc Earnings Call

August 26, 2026

Operator 1: Everyone, thank you for joining us and welcome to the Veeva Systems Fiscal 2027 second quarter results conference call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Gunnar Hansen, senior director, investor relations. Gunnar, please go ahead.

Operator: Everyone, thank you for joining us and welcome to the Veeva Systems Fiscal 2027 second quarter results conference call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Gunnar Hansen, senior director, investor relations. Gunnar, please go ahead.

Speaker #1: If you would like to ask a question, please press *1 to raise your hand. To withdraw your question, press *1 again. I will now hand the conference over to Gunnar Hansen.

Speaker #1: Senior Director, Investor Relations. Gunnar, please go ahead.

Speaker #2: Good afternoon. Welcome to Veeva's fiscal 2027 second quarter earnings conference call for the quarter ended July 31, 2026. As a reminder, we posted prepared remarks on Veeva's investor relations website just after 1:00 p.m. Pacific today.

Gunnar Hansen: Good afternoon and welcome to Veeva's fiscal 2027 second quarter earnings conference call for the quarter ended 31 July 2026. As a reminder, we posted prepared remarks on Veeva's investor relations website just after 1:00 PM Pacific today. We hope you've had a chance to read them before the call. Today's call will be used primarily for Q&A. With me today for Q&A are Peter Gassner, our chief executive officer, Paul Shawah, EVP, strategy, and Brian Van Wagener, our chief financial officer. During this call, we may make forward-looking statements regarding trends or strategies and the anticipated performance of the business, including guidance regarding future financial results. These forward-looking statements will be based on our current views and expectations and are subject to various risks and uncertainties. Our actual results may differ materially.

Speaker #2: We hope you've had a chance to read them before the call. Today's call will be used primarily for Q&A. With me today for Q&A are Peter Gassner, our Chief Executive Officer; Paul Shawa, EVP, Strategy; and Brian Van Wagner, our Chief Financial Officer.

Speaker #2: During this call, we may make forward-looking statements regarding trends or strategies and the anticipated performance of the business, including guidance regarding future financial results.

Speaker #2: Each forward-looking statement will be made based on our current views and expectations, and is subject to various risks and uncertainties. Our actual results may differ materially.

Speaker #2: Please refer to the risks listed in our earnings release and the risk factors included in our most recent filing on Form 10-Q. Forward-looking statements made during the call are being made as of today, August 26, 2026, based on the facts available to us today.

Gunnar Hansen: Please refer to the risks listed in our earnings release and the risk factors included in our most recent filing on Form 10-Q. Forward-looking statements made during the call are being made as of today, 26 August 2026, based on the facts available to us today. If this call is replayed or reviewed after today, the information presented during the call may not contain current or accurate information. Veeva disclaims any obligation to update or revise any forward-looking statement. We may discuss 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. On the call, we may also discuss certain non-GAAP metrics that we believe aid in the understanding of our financial results.

Speaker #2: If this call is replayed or reviewed after today, the information presented during the call may not contain current or accurate information. Veeva disclaims any obligation to update or revise any forward-looking statement.

Speaker #2: We may discuss 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 #2: 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 GAAP metrics can be found in today's earnings release and in a supplemental investor presentation, both of which are available on our website.

Gunnar Hansen: A reconciliation to comparable GAAP metrics can be found in today's earnings release and in the supplemental investor presentation, both of which are available on our website. With that, thank you for joining us, and I will turn the call over to Peter.

Speaker #2: With that, thank you for joining us, and I'll turn the call over to Peter.

Speaker #3: Thank you, Gunnar, and welcome, everyone, to the call. Q2 was another strong quarter, delivering results ahead of our guidance. Total revenue in the quarter was $928 million, with non-GAAP operating income of $416 million.

Peter Gassner: Thank you, Gunnar, and welcome everyone to the call. Q2 was another strong quarter, delivering results ahead of our guidance. Total revenue in the quarter was $928 million, with non-GAAP operating income of $416 million. Execution was exceptional this quarter as we made strong progress in many key areas. It was our best CRM quarter ever. We also are accelerating rapidly in AI overall and especially with Veeva Falcon. Our focused acquisition strategy is working, bringing great people and capabilities to Veeva. It is an exciting time. AI is enabling the next big chapter for Veeva and the industry. We will now open up the call to your questions.

Speaker #3: Execution was exceptional this quarter, as we made strong progress in many key areas. It was our best CRM quarter ever. We are also accelerating rapidly in AI overall, and especially with Veeva Falcon.

Speaker #3: And our focused acquisition strategy is working, bringing great people and capabilities to Veeva. It's an exciting time. AI is enabling the next big chapter for Veeva and the industry.

Speaker #3: We'll now open up the call to your questions.

Speaker #1: You will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press *1 to raise your hand.

Operator 2: We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Joe Vruwink with Baird. Joe, your line is now open.

Operator: We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Joe Vruwink with Baird. Joe, your line is now open.

Speaker #1: To withdraw your question, press *1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality.

Speaker #1: If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Joe Ruwink with Baird.

Speaker #1: Joe, your line is now open.

Speaker #3: Great. Thank you for your time today. I think it's evident over the past few months that biopharma R&D spending is headed in a positive direction, and that's also showing up at Veeva.

Joe Vruwink: Great. Thank you for the time today. I think it is evident over the past few months that biopharma R&D spending is headed in a positive direction, and that also is showing up at Veeva. As pipelines move forward, what are you finding the mentality to be at customers around assessing and adopting something that is brand new with thinking about the Vault application agents or even Veeva Falcon? I am interested in levels of early interest taking place amidst what seems like a busier environment, and whether that is a reflection of the value customers are seeing pretty quickly when they start looking at the new Veeva offerings.

Speaker #3: As pipelines move forward, what are you finding the mentality to be of customers around assessing and adopting something that’s brand new, thinking about the Vault application agents or even Veeva Falcon?

Speaker #3: I'm interested in the levels of early interest taking place amidst what seems like a busier environment, and whether that's a reflection of the value customers are seeing pretty quickly when they start looking at the new Veeva offerings.

Speaker #4: I'll take that one. Yeah, there are a lot of things going on, right? The funding environment is relatively good. There are a lot of changes with AI.

Peter Gassner: I will take that one. Yes, there are a lot of things going on, right? The funding environment is relatively good. There is a lot of changes with AI and sciences moving ahead, so there is a lot of priorities for the customers. When that happens, they cannot do all things at once, and they generally try to pick some things that they can do and that are high priority. Your question was related to Falcon. I think Falcon has a lot of interest right now because it is very clear that that is high priority. Quick cost savings and compliance and efficiency. That is high on everybody's priority. I think there is a lot of interest in Falcon. We are the rate limiter right now. We have to get that product ready, start working with the early adopters, but interest in Falcon is very high.

Speaker #4: And science is moving ahead, so there are a lot of priorities for the customers. And so when that happens, they can't do all things at once.

Speaker #4: And they generally try to pick some things that they can do and that are high priority. Your question was related to Falcon. I think Falcon has a lot of interest right now because it's very clear that that's high priority.

Speaker #4: Quick, cost savings, compliance, and efficiency—that's high on everybody's priority. So I think there's a lot of interest in Falcon. We are the rate limiter right now.

Speaker #4: We have to get that product ready, start working with the early adopters, but interest in Falcon is very high.

Speaker #3: That's great. And then maybe, as you think about how customers can now engage with Veeva in an AI framework, you have the application agents.

Joe Vruwink: That is great. Then maybe as you think about how customers can now engage with Veeva in an AI framework, you have the application agents, you have Falcon, you have a custom development framework that you have introduced. Are any of those modes of engagement maybe becoming larger or a bigger piece of the conversation? Do any of those modes matter more or less as you think about how your financial model evolves and what the impact might end up being to Veeva?

Speaker #3: You have Falcon. You have a custom development framework that you've introduced. Are any of those modes of engagement conversational? And do any of those modes matter more or less as you think about how your financial model evolves and what the impact might end up being to Veeva?

Peter Gassner: Yes, it is a major change for Veeva. Falcon is agentic labor. That is something different than we have done before, right? We have done cloud software, data consulting, now we have this fourth thing, agentic labor. It is transforming the discussion. There are two different things you could do with Veeva. You can do some agentic labor, you can do core applications. That was never the case before. The important point is, Veeva, it fits very well. It is a structural advantage for Veeva to both have the agentic labor across multiple areas in life sciences and have the core applications across multiple of those areas in life sciences. That is why I feel like we are very well-positioned, and the conversations are very rich. Gosh, I just hope, we got to get that product going as soon as we can.

Speaker #4: Yes, it is a major change for Veeva. So Falcon is agentic labor—that's something different from what we've done before, right? We've done cloud software, data, consulting.

Speaker #4: Now we have this fourth thing, agentic labor. So it is transforming the discussion. There are two different things you could do with Veeva. You can do some agentic labor.

Speaker #4: You can do core applications—that was never the case before. The important point is Veeva: it fits very well. It's a structural advantage for Veeva to both have the agentic labor across multiple areas in life sciences, and have the core applications across multiple of those areas in life sciences.

Speaker #4: So that's why I feel like we're very well positioned, and the conversations are very rich. Gosh, I just hope we can get that product going as soon as we can.

Speaker #4: If we had our early adopters live and successful right now, I don't want to be hyperbolic, but Falcon would be flying off the shelf if that was the case.

Peter Gassner: If we had our early adopters live and successful right now, I do not want to be hyperbole, but Falcon would be flying off the shelf if that was the case. One thing to know is there is not an extensive Falcon implementation. There is not a data mapping from one system to the other. There is not a cut-over process. There is not ETL to do. This implementation to full value is faster with Falcon, but the tech underneath it is newer, and we have to get our motion down there. If you can tell, I hope you can tell, I am pretty excited about Falcon. I really think we are onto something.

Speaker #4: Because one thing to know is there's not an extensive Falcon implementation. There's not a data mapping from one system to the other. There's not a cutover process.

Speaker #4: There's not ETL to do. So this implementation, the full value, is faster with Falcon. But the tech underneath it is newer, and we have to get our motion down there.

Speaker #3: If you can tell, I hope you can tell. I'm pretty excited about Falcon. I really think we're on to something.

Speaker #5: That's great. Thank

Joe Vruwink: That's great. Thank you.

Speaker #3: you.

Speaker #1: Your next question comes from the line of Brian Peterson with Raymond James. Brian, your line is now open.

Operator 2: Your next question comes from the line of Brian Peterson with Raymond James. Brian, your line is now open.

Operator: Your next question comes from the line of Brian Peterson with Raymond James. Brian, your line is now open.

Speaker #5: Hey, gentlemen. Thanks for taking the questions, and congrats on a strong quarter. So, the commercial segment was really strong this quarter. I know you called out a record result.

Brian Peterson: Hey, gentlemen. Thanks for taking the question, and congrats on a strong quarter. The Commercial segment was really strong this quarter. I know you called out record results. Could you maybe unpack what drove that acceleration in the subscription line item? Would love to get some more color there.

Speaker #5: Could you maybe unpack what drove that acceleration in the subscription line item? We'd love to get some more color there.

Speaker #3: Yeah, hey Brian, this is Brian. I'll take that one. Commercial subs, yeah, very strong quarter. I think the culmination of many quarters of execution, but you see them showing up in the results here.

Brian Van Wagener: Yeah. Hey, Brian, this is Brian. I'll take that one. Commercial subs, yeah, very strong quarter. I think the culmination of many quarters of execution, but you see them showing up in the results here. Up about 13% year-over-year. Even when we back out Crossix, it's double digits in the rest of Commercial. It's quite a broad-based strength in the Commercial offering across CRM, content, data, Crossix, Ostro most recently. We feel very good about the execution. Crossix continues to be a strong performer with a lot of headroom for growth. We're continuing to see growth in CRM, which I think a lot of the conversation has been, is that going to go down? It's actually going up. We're continuing to see a lot of room to continue growing in a healthy market in Crossix as well as the other areas.

Speaker #3: Up about 13% year over year. Even when we back out Crossix, it's double digits in the rest of commercial. So it's quite broad-based.

Speaker #3: Strength in the commercial offering across CRM, Content, Data, and Crossix. Ostro most recently, so we feel very good about the execution. Crossix continues to be a strong performer with a lot of headroom for growth.

Speaker #3: We're continuing to see growth in CRM, which I think a lot of the conversation has been, is that going to go down? It's actually going up.

Speaker #3: And we're continuing to see a lot of room to continue growing in a healthy market, in cross-ex, as well as the other areas.

Speaker #5: Great, I appreciate the color. I just want to follow up on Aspen. I know you guys are excited about that as well. How should we be thinking about that market opportunity and some of the investments that you're making to enable that revenue stream?

Brian Peterson: Great. Appreciate the color. I just want to follow up on Aspen. I know you guys are excited about that as well. How should we be thinking about that market opportunity in some of the investments that you are taking to kind of enable that revenue stream? Thanks, guys.

Speaker #5: Thanks, guys.

Peter Gassner: Aspen, I think it is very early, right? That is the thing to know. This is a startup inside of Veeva. It is moving very rapidly. It is on 90-day plans. We have a core market that we are going after, the horizontal CRM in a new way, in a new way that really enables AI and is built on modern technology. The thing to know that it is very agile now. What we are focused on is getting the product right, working with our early adopter customers. I am 100% convinced that there is a market for what we are making in Aspen. Can we execute well enough? That is always the hard thing in a startup. Can you do it? Can you do it better than your competition? What kind of luck do you have along the way? That plays into it. I have done the startup thing before, starting Veeva.

Speaker #3: Aspen, I think it's

Speaker #4: Very early, right? That's the thing to know. This is a startup inside of Veeva. It's moving very rapidly. It's on 90-day plans. So, we have a core market that we're going after—the horizontal CRM—and in a new way.

Speaker #4: In a new way that really enables AI and is built on modern technology. So, the thing to know is that it is very agile now.

Speaker #4: So what we're focused on right now is working with our early adopter customers. I'm 100% convinced that there's a market for what we're making in Aspen.

Speaker #4: Can we execute well enough? That's always the hard thing in a startup. Can you do it? Can you do it better than your competition?

Speaker #4: And what kind of luck do you have along the way? That plays into it. I've done the startup thing before—starting Veeva; I've done the startup thing when we started Vault inside of Veeva.

Peter Gassner: I have done the startup thing when we started Vault inside of Veeva. We are doing it again, and I have lots of friends that have done it, and it is just like that. Can you execute well? Really, really well. What kind of luck do you have on the way? Sometimes you are wondering whether the market is there or not. You could say maybe we were wondering that when we were getting new markets going 18 months ago, et cetera. Right now, we have enough product, and we are working with some early customers. We are 100% clear that the market is there. 100% clear. It is just whether we can execute, and we will see. Your question was about how to size the investment as well. Investment is very small on the Veeva scale.

Speaker #4: We're doing it again, and I have lots of friends that have done it, and it's just like that. Can you execute well—really, really well?

Speaker #4: And what kind of luck do you have on the way? But sometimes you're wondering whether the market is there or not. You could say maybe we were wondering that when we were getting new markets going 18 months ago, etc.

Speaker #4: Right now, we have enough product, and we're working with some early customers. We're 100% clear that the market is there—100% clear. It's just whether we can execute, and we'll see.

Speaker #4: So your question was about how to size the investment as well. The investment is very small on the Veeva scale. It's not something that Brian or our CFO notices, really, on the Veeva scale.

Peter Gassner: It is not something that Brian, our CFO, notices really on the Veeva scale, because you have to keep that very small when you are working with early customers and you are iterating an early product. Actually, these days, you keep it smaller than normal because the pace of development is faster with AI. You actually need a smaller amount of developers, very skilled as well. It is not a financial drain on the company, it is not a focus drain, and it is certainly not any kind of revenue that is figured into our plans at this time.

Speaker #4: Because you have to keep that very small when you're working with early customers and you're iterating an early product. And actually, these days, you keep it smaller than normal because the pace of development is faster with AI.

Speaker #4: You actually need a smaller number of developers—very, very, very skilled as well. So it's not a financial drain on the company, and it's not a focus drain.

Speaker #4: And it's certainly not any kind of revenue that's figured into our plans at this time.

Speaker #1: Your next question comes from the line of Ken Wong with Oppenheimer. Ken, your line is now open.

Operator 2: Your next question comes from the line of Ken Wong with Oppenheimer. Ken, your line is now open.

Operator: Your next question comes from the line of Ken Wong with Oppenheimer. Ken, your line is now open.

Speaker #3: All right. Fantastic. Thanks for taking my question. I wanted to circle back on Falcon, Peter. It was great to hear about the customer interest, and also great to hear it's not an extensive implementation process.

Ken Wong: All right. Fantastic. Thanks for taking my question. I wanted to circle back on Falcon, Peter. It was great to hear the customer interest, also great to hear it's not an extensive implementation process. But what I didn't get a sense for was, as you're trying to introduce virtual labor to your customers, is that a different counterparty that you're selling to versus maybe the CMO or the CIO? Secondarily, how difficult do you expect it to be to maybe work through the inner politics of shifting the budgets from an IT wallet to maybe an HR labor wallet? Any help in helping us think through that?

Speaker #3: But what I didn't get a sense for was, as you're trying to introduce virtual labor to your customers, is that a different counterparty that you're selling to versus maybe the CMO or the CIO?

Speaker #3: And then, secondarily, how difficult do you expect it to be to maybe work through the interpolitics of shifting the budgets from an IT wallet to maybe an HR labor wallet?

Speaker #3: Any help in helping us think through that?

Speaker #4: Ken, great question. Now, I'll be able to tell you this definitively in a couple of years when we're selling lots of Falcon. I'll be able to give you the readout.

Peter Gassner: Ken, great question. I'll be able to tell you this definitively in a couple of years when we're selling lots of Falcon, I'll be able to give you the readout. So I'm going to gauge into the future and tell you what we know so far. First off, it's actually going to be an easier selling cycle because IT is really not involved in agentic labor. That's not something they're involved in, because it's not like that. If you're selling a solution to safety, this is about the budget of the safety team. So it's really the head of the unit, the business unit, and the head of the operations of that business unit. So that's super clear. The other question is, yes, it is a very related buyer.

Speaker #4: So I'm going to gaze into the future and tell you what we know so far. First off, it's actually going to be an easier selling cycle because IT is really not involved in agentic labor.

Speaker #4: That's not something they're involved in, because it's not like that. If you're selling a solution to safety, this is about the budget of the safety team.

Speaker #4: So it's really the head of the unit, the business unit, and the head of, sort of, the operations of that business unit. So that's super clear.

Speaker #4: And the other question is, yes, it is a very related buyer. Actually, we have not hit the case for Falcon where we're selling into a buyer that we are not already selling into.

Peter Gassner: We have not hit the case for Falcon where we're selling into a buyer that we are not selling into, because we're always selling into the business side with our business applications. Sometimes more or less. For example, in the areas of Falcon, where Falcon is playing, for example, safety, clinical, regulatory, that's always been somewhat more of a business sell. IT involved, but somewhat more of a business sell. CRM is the most IT-heavy sell that we have in general. So these areas where we're doing Falcon, they were ready, I would say, on the average, 60% of business selling. Those are people that we've been selling into for 10 years.

Speaker #4: Because we're always selling into the business side with our business applications. Now, sometimes more or less. For example, in the areas of Falcon, where Falcon is playing, for example, safety, clinical regulatory, that's always been somewhat more of a business sell.

Speaker #4: IT is involved, but it's somewhat more of a business sell. CRM is the most IT-heavy sell that we have in general. So in these areas where we're doing Falcon, they were ready, I would say, on average, for 60% of a business sell.

Speaker #4: And those are people that we've been selling into for 10 years.

Speaker #3: Understood. And then, Brian, just a follow-up on some of the investments. It sounds like with Aspen, it might be sort of small upfront, but as we think about you guys ramping on Falcon, ramping on Aspen, ramping on some Vault, Vault Agents, Vault AI, I mean, should we expect maybe an uptick in terms of sales investments, R&D investments? Is there anything we should be thinking about relative to how you guys are spending today?

Ken Wong: Understood. Brian, just a follow-up on some of the investments. It sounds like with Aspen, it might be small up front, but as we think about you guys ramping on Falcon, ramping on Aspen, ramping on some Vault agents, Vault AI, should we expect maybe an uptick in terms of sales investments, R&D investments, anything we should be thinking about relative to how you guys are spending today?

Brian Van Wagener: As Peter talked about, Ken, we're very excited about Falcon and the path that it can be on. But you've also seen us over time consistently think about both growth and profitability. It's not different entering a new market like Falcon. Maybe the dynamics of the market are very slightly different, but it's the same overall approach that we're taking there. We scale investment as we scale revenue. There's certainly nothing material that I would call out for this fiscal year. It's all factored into the guidance that we've updated for FY 2027. As we get another couple of quarters ahead and gaze into the future of next year, we'll factor that into our guidance for next year.

Speaker #4: As Peter talked about, Ken, we're very excited about Falcon and the path that it can be on. But you've also seen us, over time, consistently think about both growth and profitability.

Speaker #4: And so it's not different entering a new market like Falcon. Maybe the dynamics of the market are very slightly different, but it's the same overall approach that we're taking there.

Speaker #4: And so, we scale investment as we scale revenue. There's certainly nothing material that I would call out for this fiscal year. It's all factored into the guidance that we've updated for FY27.

Speaker #4: And as we get another couple of quarters ahead and gaze into the future of next year, we'll factor that into our guidance for next year.

Speaker #3: Okay, great. Thanks a lot, guys.

Ken Wong: Okay, great. Thanks a lot, guys.

Speaker #1: Your next question comes from the line of Saketh Kaliya with Barclays. Saketh, your line is now open.

Operator 2: Your next question comes from the line of Saket Kalia with Barclays. Saket, your line is now open.

Operator: Your next question comes from the line of Saket Kalia with Barclays. Saket, your line is now open.

Speaker #5: Hey, good evening, everybody. This is Ryan Pavilion for Saketh. Thanks for taking the question. Peter, maybe my first for you: From the customers that are planning to transition to Salesforce away from Veeva CRM, what do you hear from those customers?

Ryan Kalia: Hey, good evening, everybody. This is Ryan Kalia on for Saket tonight. Thanks for taking the question. Peter, maybe my first for you. From the customers that are planning to transition to Salesforce away from Veeva CRM, what do you hear from those customers? What are they saying right now about the decision? Do you think, longer term, it could be possible for Veeva to win some of those back?

Ryan Powderly-Gross: Hey, good evening, everybody. This is Ryan Kalia on for Saket tonight. Thanks for taking the question. Peter, maybe my first for you. From the customers that are planning to transition to Salesforce away from Veeva CRM, what do you hear from those customers? What are they saying right now about the decision? Do you think, longer term, it could be possible for Veeva to win some of those back?

Speaker #5: What are they saying right now about the decision? And do you think, longer-term, it could be possible for Veeva to win some of those back?

Speaker #4: Yeah, Ryan, I do. There's a handful of customers—large customers—that did select Salesforce. Many of them, even two years ago, those projects are—they're having troubles, right?

Peter Gassner: Yeah, Ryan, I do. There's a handful of large customers that did select Salesforce, many of them maybe even 2 years ago. Those projects, they're having troubles, right? They're not going smooth, and we have some project delays because it turns out the product is very deep, and you need that. Yeah, I think we can win back some of those customers, maybe some of them completely, others of them in some certain regions and not others. I think the bulk of that win-back would probably be in 2027 and 2028 because Veeva CRM, they have that backstop until the end of 2029. This is the time when it starts really to get real, right? Because during 2029, there's no more backstop of, oh, we can keep using Veeva CRM because they know they have to go to Vault CRM. Yeah, so we're very optimistic about that.

Speaker #4: They're not going smoothly, and we have some project delays because it turns out the product is very deep, and you need that. So yeah, I think we can win back some of those customers—maybe some of them completely, others of them in certain regions.

Speaker #4: And not others. I think the bulk of that win-back would probably be in 2027 and 2028, because Veeva CRM—they have that backstop until the end of 2029.

Speaker #4: So, this is the time when it really starts to get real, right? Because during 2029, there's no more backstop of, "Oh, we can keep using Veeva CRM," because they know they have to go to Vault CRM.

Speaker #4: Yeah, so we're very optimistic about that. And the best thing we can do there to help that is really focus on our existing customers that did decide to go with us for CRM, and make them very successful and improve the product.

Peter Gassner: The best thing we can do there to help that is really focus on our existing customers that did decide to go with us for CRM and make them very successful and improve the product. For the customers that didn't choose Veeva, we have a good relationship with them, and they've told us that, "Hey, we said, 'Hey, we want to be your plan B.'" They really embrace that, and that's the way they view that, because these customers, they have businesses to run, right? They got to get their medicines to patients. It's great. They love having a backup option if their plan A doesn't work out.

Speaker #4: And for the customers that didn't choose Veeva, we have a good relationship with them, and they've told us that, hey, we said, hey, we want to be your plan B.

Speaker #4: And they really embrace that, and that's the way they view that, because these customers have businesses to run, right? They've got to get their medicines to patients.

Speaker #4: It's great. They love having a backup option if their plan A doesn't work out.

Speaker #3: Really interesting. I appreciate that. Brian, maybe my follow-up for you: could you just talk a little bit about what you're seeing on the R&D subscription line, and maybe specifically where you see Veeva in the journey between some of the, let's call them, 'old guard' products versus some of the newer growth areas that you're investing in, just as we think about that revenue mix shift and how it's unfolding?

Ryan Kalia: Really interesting. I appreciate that. Brian, maybe my follow-up for you. Could you just talk a little bit about what you're seeing on the R&D subscription line and maybe specifically where you see Veeva in the journey between some of the, let's call them old guard products versus some of the newer growth areas that you're investing in, just as we think about that revenue mix shift and how it's unfolding?

Ryan Powderly-Gross: Really interesting. I appreciate that. Brian, maybe my follow-up for you. Could you just talk a little bit about what you're seeing on the R&D subscription line and maybe specifically where you see Veeva in the journey between some of the, let's call them old guard products versus some of the newer growth areas that you're investing in, just as we think about that revenue mix shift and how it's unfolding?

Speaker #4: Yeah, it's a great question, Ryan, because we're right in the middle of that transition that you pointed to. And I think we're very pleased with the progress and the execution that we're making.

Brian Van Wagener: Yes, it's a great question, Ryan, because we're right in the middle of that transition that you pointed to. I think very pleased with the progress and the execution that we're making. The old guard that you're referring to would be things like, I guess, Vault eTMF and Vault CTMS and QualityDocs and Veeva QMS and our regulatory suite that have fueled a lot of the growth in R&D to date. A lot of the growth as you look out over the next few years to 2030 and beyond, is being driven by a different set of products, Veeva EDC, eCOA, Veeva RTSM, Veeva Safety, Veeva LIMS. These are big, very strategic products with a ton of headroom, but they're very early. So we're excited about that. We're executing really well against that. There's a little bit of a changing of the guards that's happening there.

Speaker #4: But the old guard that you're referring to would be things like, I guess, EPMF and CTMF, and QDOX and QMS, and our regulatory suite that have fueled a lot of the growth in R&D to date.

Speaker #4: And a lot of the growth, as you look out over the next few years to 2030 and beyond, is being driven by a different set of products: EDC, eCOA, RTSM, Safety, LIMS.

Speaker #4: And these are big, very strategic products with a ton of headroom, but they're very early. So we're excited about that. We're executing really well against that.

Speaker #4: But there's a little bit of a changing of the guard that's happening there. And the S-curves don't stack up exactly, so you see some of that factored into the guidance for the balance of the year.

Brian Van Wagener: The S-curves don't stack up exactly. So you see some of that factored into the guidance for the balance of the year. We're very confident and excited about the long-term trajectory of the PR&D business and obviously pleased to be raising the guide again here in Q2.

Speaker #4: But we're very confident and excited about the long-term trajectory of the R&D business, and obviously pleased to be raising the guide again here in Q2.

Speaker #3: Very helpful. Thanks, guys.

Ryan Kalia: Very helpful. Thanks, guys.

Ryan Powderly-Gross: Very helpful. Thanks, guys.

Speaker #1: Your next question comes from the line of Alexi Gogolev with JP Morgan. Alexi, your line is now open.

Operator 2: Your next question comes from the line of Alexei Gogolev with JP Morgan. Alexei, your line is now open.

Operator: Your next question comes from the line of Alexei Gogolev with JP Morgan. Alexei, your line is now open.

Speaker #6: Hello, everyone. I wanted to go back to the Falcon discussion. So, with five Falcon early adopters, first of all, as expected this year, what are the key readiness gates you must clear, and how do you expect the human-in-the-loop requirement to evolve by workflow type?

Alexei Gogolev: Hello, everyone. I wanted to go back to the Falcon discussion. With five Falcon early adopters and first go-lives expected this year, what are the key regulatory gates you must clear, and how do you expect the human in the loop requirement to evolve by workflow type?

Speaker #4: I'm sorry, Alexi, there was a breakup, and it said, what are the key—you have to clear? And I didn't hear the word in the middle.

Peter Gassner: I am sorry, Aleksey, there was a breakup, and it said, "What are the key you have to clear?" And I did not hear the word in the middle.

Speaker #6: Peter, I was talking about the key readiness gates you must clear, and how you expect the human-in-the-loop requirement to evolve by workflow type?

Alexei Gogolev: Peter, I was talking about the key regulatory gates you must clear, and how do you expect the human in the loop requirement to evolve by workflow type?

Peter Gassner: Hmm. The key sort of regulatory hurdles, if I heard correctly? Yeah. Agentic labor is like human labor in a way. It is non-deterministic, so you have to prove that you have the right training and guardrails around humans, and that is the same thing we have to do around our agents and the human. We provide for the human in the loop with Falcon as well, because you can see the outcome of what the agent did and does inside of the Vault application. From what we can see, it is working very well. This approach is completely similar to what customers are doing today on certain internal projects. The difference is they would like to be able to do it at scale in a very repeatable motion.

Speaker #4: The key sort of regulatory hurdles, if I heard correctly—yeah. Agentic labor is like human labor in a way. It's non-deterministic, so you have to prove that you have the right training and guardrails around humans.

Speaker #4: And that's the same thing we have to do around our agents, and for the human, we provide for the human-in-the-loop with Falcon as well, because you can see the outcome of what the agent did and does.

Speaker #4: Inside of the Vault application. So from what we can see, it's working very well. This approach is quite similar to what customers are doing today on certain internal projects.

Speaker #4: The difference is, they would like to be able to do it at scale in a very repeatable motion. So, I would guess three years ago, we would probably have to be teaching the customers a lot about what is AI, what is agentic labor, how do you do this, how do you do that?

Peter Gassner: So, I would guess three years ago, we would probably have to be teaching the customers a lot about what is AI, what is agentic labor, how do you do this, how do you do that? We really don't have to do that so much anymore. The customers know how to deal with it. They just want a partner that can scale it across multiple areas.

Speaker #4: We really don't have to do that so much anymore. The customers know how to deal with it; they just want a partner that can scale it across multiple areas.

Speaker #6: Thank you, Peter. And also on the Data Cloud topic, you added 14 Data Cloud customers. Where is Data Cloud proving most differentiated? And how are you positioning connected data as a prerequisite for AI outcomes in commercial workflows?

Alexei Gogolev: Thank you, Peter. Also on the Data Cloud topic, so you added 14 Data Cloud customers. Where is Data Cloud proving most differentiated, and how are you positioning connected data as a prerequisite for AI outcomes in commercial workflows?

Speaker #4: So, we don't position Data Cloud as a prerequisite for AI. It's more of an accelerator. The cleaner your data is, the better your AI processes are going to work, especially in certain areas.

Peter Gassner: We don't position Data Cloud as a prerequisite for AI. It's more of an accelerator. The cleaner your data is, the better your AI processes are going to work, especially in certain areas. What's working well for us in Data Cloud is OpenData, so clean reference data. Now, that's a hard project to do because it involves changing a lot of things in downstream systems. But we have some momentum there, and I think that's going to continue. We have strong momentum in Compass for certain therapeutic areas of complex therapies where our Compass products can see different things in the flow of complex products in the US that other offerings can't see. Then we have real market leadership with our Link product and Link Key People, and we're expanding there with the add-on products of Link.

Speaker #4: What's working well for us in Data Cloud is open data, so clean reference data. Now, that's a hard project to do because it involves changing a lot of things in downstream systems.

Speaker #4: But we have some momentum there, and I think that's going to continue. We have strong momentum in Compass for certain therapeutic areas of complex therapies, where our Compass products can see different things in the flow of complex products in the US.

Speaker #4: That other people, other offerings, can't see. And then we have real market leadership with our Link product and Link key people, and we're expanding there with the add-on products of Link.

Speaker #4: So, link medical insights, link key accounts for the US, link workflow for congresses. So, overall, data is not a thing that can accelerate very, very fast.

Peter Gassner: Link Medical Insights, Link Key Accounts for the US, Link Workflow for congresses. Overall, data is not a thing that can accelerate very fast. It's not like selling fast fashion on Instagram, right? That can accelerate fast and then disappear. Data is not like that. It's a long, slow grind. But we're certainly happy with our progress, and it's very synergistic with Veeva. If you look at why is Veeva being successful, we have a very synergistic product plan. We have software applications that work with our data and consulting that knows about our software and data, and we have agents that work with our applications that are known by our consulting and that leverage our data. So it's not a random set of products.

Speaker #4: It's not like selling fast fashion on Instagram, right? That can accelerate quickly and then disappear. Data is not like that. It's a long, slow grind.

Speaker #4: But we're certainly happy with our progress, and it's very synergistic with Veeva. If you look at what Veeva—why is Veeva being successful? We have a very synergistic product plan.

Speaker #4: We have software applications that work with our data, consulting that knows about our software and data, and agents that work with our applications that are known by our consulting.

Speaker #4: And that leverages our data. So it's not a random set of products. We're building the industry cloud, and the more our customers realize it, the more benefits they get because things fit together.

Peter Gassner: We're building the industry cloud, and the more our customers realize it, the more benefits they get because things fit together.

Speaker #6: Thank you, Peter.

Alexei Gogolev: Thank you, Peter.

Speaker #4: Thanks.

Speaker #1: Your next question comes from the line of David Winley with Jefferies. David, your line is now open.

Operator 2: Your next question comes from the line of David Windley with Jefferies. David, your line is now open.

Operator: Your next question comes from the line of David Windley with Jefferies. David, your line is now open.

Speaker #7: Hi, good afternoon. Thanks for taking my question. I wanted to ask Peter, on Falcon quickly, are your early adopters exclusively sponsors or OEMs, or are you also seeing some service providers approach you to adopt Falcon capabilities?

David Windley: Hi, good afternoon. Thanks for taking my question. I wanted to ask Peter on Falcon quickly, are your early adopters exclusively sponsors or OEMs, or are you also seeing some service providers approach you to adopt Falcon capabilities?

Speaker #4: Our early adopters are with sponsors. Now, we have had some interest from service providers. And I say that carefully—interest. They're interested, but we really haven't engaged heavily there yet, because you have to be focused when you start working with your first customers.

Peter Gassner: Our early adopters are with sponsors. Now we have had some interest with service providers. I say that carefully, interest. They are interested, but we really have not engaged heavily there yet because you have to be focused when you start working with your first customers. Service providers will have similar needs to sponsors, but not the same. We are focusing on the sponsors first, and I fully expect over time that this will be useful for outsourced service providers. But we have to work on the sponsors first.

Speaker #4: Service providers will have similar needs to sponsors, but not the same. So we're focusing on the sponsors first, and I fully expect over time that this will be useful for outsourced service providers.

Speaker #4: But we have to work on the sponsors first.

Speaker #7: Great. And pivoting from my follow-up, there are a lot of moving parts in China. Over the course of this year—and maybe over the last several years—regulatorily and in terms of drug development, how do you see the China market as an opportunity for Veeva right now?

David Windley: Great. Pivoting for my follow-up. A lot of moving parts in China over the course of this year, maybe over the course of the last several years, regulatorily, drug development-wise, et cetera. How do you see the China market as an opportunity for Veeva right now?

Speaker #4: Yeah, China is certainly moving fast. I mean, when we look at my track career, standing—or it's over 30 years here—it's just astounding, the transformation in China and what it means for the global economy and what can be accomplished.

Peter Gassner: Yeah, China is certainly moving fast. When we look at my tech career spanning over 30 years here, it is just astounding the transformation in China and what it means for the global economy and what can be accomplished and the whole notion of a parallel tech stack in China. Yes, it has moved so fast and it continues and it is great to see that from my perspective. It brings variety. Our opportunities there, we have quite a few products that are made by our Veeva China team in China for China. So we have our Veeva China CRM suite, and that is gaining market share that is written on the China tech stack, et cetera. We have our data products made in China, specific for the China market. There are other things that we can do in China there, in China for China.

Speaker #4: And the whole notion of a parallel tech stack in China—so yes, it's moved so fast, and it continues. And it's great to see that from my perspective.

Speaker #4: It brings variety. So, our opportunities there—we have quite a few products that are made by our Veeva China team in China, for China.

Speaker #4: So we have our China CRM suite, and that's gaining market share. That's written on the China tech stack, etc. We have our data products made in China, specific for China.

Speaker #4: Market. And there are other things that we can do in China there—in China, for China. But one of the big benefits is those products fit with our global products.

Peter Gassner: But one of the big benefits is those products fit with our global products. For example, Veeva China CRM fits with our global PromoMats products. So there is a synergy there. China is good business for us, and we are proud to do that in China, and it is profitable for us there, and it is growing, but it is also synergistic with our global business because our global customers, when they have their headquarters in the US or Japan or Europe, they want a team, a global Veeva team, that can help them with China also. So it is very synergistic. We really love our China business.

Speaker #4: For example, China CRM fits with our global promo mats, so there's a synergy there. China's good business for us, and we're proud to do that in China. It's profitable for us there, and it's growing.

Speaker #4: But it's also synergistic with our global business because our global customers, when they have their headquarters in the US or Japan or Europe, want a global Veeva team that can help them with China also.

Speaker #4: So it's very synergistic. We really love our China business.

Speaker #7: Thank you.

David Windley: Thank you.

Speaker #1: Your next question comes from the line of Rishi Jalleria with RBC. Rishi, your line is now open.

Operator 2: Your next question comes from the line of Rishi Jaluria with RBC. Rishi, your line is now open.

Operator: Your next question comes from the line of Rishi Jaluria with RBC. Rishi, your line is now open.

Speaker #7: Wonderful, thanks. Thanks so much for taking my questions. Nice to see continued strength in the business. I want to start with a question on Aspen and the pricing model.

Rishi Jaluria: Wonderful. Thanks so much for taking my questions. Nice to see continued strength in the business. I want to start with a question on Aspen and the pricing model. I think the publicly posted pricing model is really interesting and compelling as application software companies sort of figure out the pivot to more consumption, et cetera, and you are talking about charging per human or per agent. Can you maybe walk us through how you see that pricing model starting, the puts and takes of that, and what lessons or learnings can be picked up from that as you see more Falcon adoption, more AI adoption within the broader Veeva suite, and trying to price accordingly for this new AI world? Then I have got a quick follow-up.

Speaker #7: I can think the publicly posted pricing model is really interesting and compelling as application software companies are kind of figure out kind of the pivot to more consumption, etc.

Speaker #7: And you're talking about charging per human or per agent. Can you maybe walk us through how you see that pricing model starting, how the puts and takes of that, and what lessons or learnings can kind of be picked up from that as you see more Falcon adoption, more AI adoption within the broader VEEVA suite, and trying to kind of price accordingly for this new AI world?

Speaker #7: And then I've got a quick follow-up.

Speaker #6: Yeah. So cloud software, we’ve got to remember it hasn’t been around for 50 years, right? I was working on it in the early days of Salesforce.com, and that was not even 25 years ago, right?

Peter Gassner: Well, cloud software, we got to remember, it has not been around for 50 years, right? I was working on it in the early days of Salesforce, and that was not even 25 years ago, right? For me, it was 23 years ago. So very early, and the pricing model sort of arrived, and a technology model arrived, and the way we do things arrived, and you see that all in the first generation, big cloud companies, big cloud application companies. There is a way you do things, right? So Aspen is taking a different approach that may or may not prove effective. It is to say, well, it is a different approach, a different technical stack, a different approach there, and a different pricing approach. It is just much more simple. You get your productivity, $50 a user a month.

Speaker #6: For me, it was 23 years ago, so very early. And the pricing model sort of arrived, the technology model arrived, and the way we do things arrived.

Speaker #6: And you see that in all the first-generation big cloud companies, big cloud application companies, there's a way you do things, right? So Aspen is taking a different approach that may or may not prove effective.

Speaker #6: It's to say, well, it's a different approach—a different technical stack, a different approach there, and a different pricing approach. It's just much more simple.

Speaker #6: You get your predictivity—$50. $50 a user, a month. So it's not this crazy price where you don't know what it is, and you have to haggle with your sales rep for discounts.

Peter Gassner: So it's not this crazy price, and you don't know what it is, and you have to haggle with your sales rep for discounts, and if you're a big company, it's this and that and 14 different editions. No. It's more like modeled off of Amazon Web Services. There's a price, okay? It's a good product. You can buy it. You don't have to buy it. It's a good product. So we will lean into that, and then there's, of course, usage overage. Okay, let's say you buy 5 users, it's $50 a month, and you put a terabyte of data in there for some reason. Well, okay. Well, that's not anything that anybody thought about. Those are the overage charges that you will pay monthly on the overage. So it's a mix.

Speaker #6: And if you're a big company, it's this and that and fourteen different additions. No, it's more like modeled off of Amazon Web Services. There's a price.

Speaker #6: Okay. And it's a good product. You can buy it. You don't have to buy it. It's a good product, so we will lean into that.

Speaker #6: And then there's, of course, usage overage. Okay, let's say you buy five users, it's $50 a month, and you put a terabyte of data in there for some reason.

Speaker #6: Well, okay. Well, that's not anything that anybody thought about. So there will be overage charges that you will pay monthly on an overage. So it's kind of a mix. I would say we're shooting for mostly predictable, because at the end of the day, large businesses would really want mostly predictable.

Peter Gassner: I would say we're shooting for mostly predictable, because at the end of the day, large businesses would really want mostly predictable. But you have to have this escape hatch to say, "Yeah, I can't use unlimited compute because that doesn't make sense." So now we're also going to listen to our early customers, and we're a very customer-friendly company, and if there's a better way to do it, we'll certainly do that. We're after, authentically, customer success. You got to remember, we're a public benefit corporation. We're after success for our customers, the industries we serve, and Veeva Systems and our investors. So the thing is, make it simple, get rid of all this noise that have built up in the systems over time.

Speaker #6: But you have to have this escape hatch to say, yeah, I can't use unlimited compute, because that doesn't make sense. So now we're also going to listen to our early customers, and we're a very customer-friendly company.

Speaker #6: And if there's a better way to do it, we'll certainly do that. We're after authentic customer success. You got to remember, we're a public benefit corporation.

Speaker #6: We're after success for our customers, the industry we serve, Veeva, and our investors. So the thing is, make it simple. Get rid of all this noise that has built up in the systems over time.

Speaker #7: All right. No, that's really helpful. And then, maybe just thinking through — as Falcon and kind of your AI products grow, can you talk a little bit about, under the hood, what sort of the AI stack looks like?

Rishi Jaluria: All right. No, that's really helpful. Then maybe just thinking through, as Falcon and your AI products grow, can you talk a little bit about, under the hood, what the AI stack looks like? Maybe more importantly, as these become a bigger portion of the business, drive greater usage, and obviously, as you pointed out, Peter, greater customer success, how should we be thinking about the impact on margins, both gross margins as well as free cash flow margins? Is there opportunity over time to leverage more multimodality and even some of the open weight models as they improve to control some of that potential gross margin headwind? Thank you.

Speaker #7: And maybe more importantly, as these become a bigger portion of the business, drive greater usage, and obviously, as you pointed out, Peter, greater customer success.

Speaker #7: How should we be thinking about the impact on margins—both gross margins as well as free cash flow margins? And is there opportunity over time to leverage more multimodality, and even some of the open-weight models as they improve, to control some of that potential gross margin headwind?

Speaker #7: Thank you.

Speaker #6: Yeah. Again, I don't really want to make predictions on Falcon because it's early, but in general, I don't think we're going to have a gross margin problem.

Peter Gassner: Yeah. Again, I don't really want to make predictions on Falcon because it's early, but in general, I don't think we're going to have a gross margin problem. I think the gross margins will be roughly similar to our software. Here's why. When we really go deep into Falcon, and we have what we call Falcon copies, where we have the real customer data that we're testing, the agents with, and developing the agents with. We know what's going on, so more and more and more of that work goes into the deterministic software. We use the non-deterministic models, the Anthropic models, et cetera, when we need to. So a lot of this value is going into the agent, and then I believe everybody knows that the cost of these models are going to go down, whether they're with better hardware or open weight models or et cetera.

Speaker #6: I think the gross margins will be roughly similar to our software, and here is why. When we really go deep into Falcon, and we have what we call Falcon copies, where we have the real customer data that we're testing the agents with and developing the agents with, we know what's going on.

Speaker #6: So more and more of that work goes into the deterministic software, and we use the non-deterministic models—the Anthropic models, etc.—when we need to.

Speaker #6: So, it's not a lot of this value that is going into the agent. And then, I believe everybody knows, the cost of these models is going to go down, whether that's with better hardware or open-weight models, etc., etc.

Speaker #6: The current cost of the models is not sustainable—not based on what we're doing, but based on this notion of what software development is doing.

Peter Gassner: The current cost of the models is not sustainable, not based on what we're doing, but based on this notion of what software development is doing, eating up 50% of the tokens in the world and hundreds of billions of USD. Somebody's going to build a better mousetrap for that over time, and that'll compress the prices. That's our belief. But even if that wouldn't happen, I think Falcon would be a great business because we're pushing a lot of things into the deterministic layer.

Speaker #6: Eating up 50% of the tokens in the world and hundreds of billions of dollars. Somebody's going to build a better mousetrap for that over time, and that'll compress the prices.

Speaker #6: That's our belief. But even if that didn't happen, I think Falcon would be a great business because we're pushing a lot of things into the deterministic layer.

Speaker #7: All right. Very helpful. Thank you so much, Peter.

Rishi Jaluria: All right. Very helpful. Thank you so much, Peter.

Speaker #1: So, next question comes from the line of Tyler Radkey with Citi. Tyler, your line is now open.

Operator 2: Your next question comes from the line of Tyler Radke with Citi. Tyler, your line is now open.

Operator: Your next question comes from the line of Tyler Radke with Citi. Tyler, your line is now open.

Speaker #5: Yeah. Thank you for taking the question. Brian, just going back to your comments on the R&D side of the business and talking about kind of the stacking of those S-curves, I was wondering if you could just be a bit more precise in terms of the timing and when you see the kind of the growth inflection happening from those S-curves.

Tyler Radke: Yeah. Thank you for taking the question. Brian, just going back to your comments on the R&D side of the business and talking about the stacking of those S-curves. I was wondering if you could just be a bit more precise in terms of the timing, and when you see the growth inflection happening from those S-curves. If you were to just stack rank those products you mentioned, what sort of have the biggest opportunity to be the next $500 million or billion dollar products within R&D?

Speaker #5: And if you were to just sort of stack rank those products you mentioned, what sort of have the biggest opportunity to be the next $500 million or billion-dollar products within R&D?

Speaker #6: Yeah. Thanks for the question, Tyler. I think we are really excited about all of those products—all five that I mentioned: EDC, eCOA, RTSM, Safety, LIMS.

Brian Van Wagener: Yeah. Thanks for the question, Tyler. I think we are excited, really, about all of those products, all the five that I mentioned, Veeva EDC, eCOA, Veeva RTSM, Veeva Safety, Veeva LIMS. Every one of those is very large and very strategic in their area. Few of them are around clinical. Veeva Safety is its own big space. Veeva LIMS is in quality. So each of these is very significant opportunities. And it is slightly different stages as you look across them, but all of them pretty early. And so I think that is what gives us the confidence as we look out to 2030, for example, that we are on track for those goals, is we are making great progress in the product, great progress in the execution, great progress getting customers live and happy and successful in reference selling. We do not put exact timing on that.

Speaker #6: Every one of those is very large and very strategic in their area. A few of them are around clinical; safety is its own big space. LIMs is in quality.

Speaker #6: So each of these is a very significant opportunity. And they're at slightly different stages as you look across them, but all of them are pretty early. And so I think that's what gives us the confidence as we look out to 2030, for example—that we're on track for those goals, as we're making great progress in the product, great progress in the execution, and great progress getting customers live, happy, successful, and reference selling.

Speaker #6: We don't put exact timing on that, right? We don't generally talk year by year, so I'm not going to give guidance out beyond this year.

Brian Van Wagener: We do not generally talk year by year, so I am not going to give guidance out beyond this year. But I think we feel very confident in the trajectory that we are on with those products in R&D.

Speaker #6: But I think we feel very confident in the trajectory that we're on with those products in R&D.

Speaker #5: Got it. And then in terms of Aspen and sort of your broader ambitions across industries outside of your traditional segments, can you just remind us of the sort of ICP there?

Tyler Radke: Got it. And then in terms of Aspen and your broader ambitions across industries outside of your traditional segments, can you just remind us the ICT there? Is it smaller organizations or how do you. Clearly such a broad opportunity. So how do you start and prioritize that and staff it?

Speaker #5: Is it smaller organizations, or how do you... I mean, it's clearly such a broad opportunity, so how do you start and prioritize that, and staff it?

Speaker #6: I think about a few different dimensions.

Peter Gassner: There is a few different dimensions.

Speaker #5: Go ahead, Peter.

Brian Van Wagener: Go ahead, Peter.

Speaker #6: For clarity, ICP—what is ICP?

Peter Gassner: For clarity, ICT, what is ICT?

Speaker #5: Oh, like the.

Tyler Radke: Oh, like the ideal customer profile.

Speaker #6: Ideal customer profile. Oh, okay. I'll take that one. Yeah. The ideal customer profile when you're just starting out is really a nimble-type company that really wants to work with you.

Paul Shawah: Yeah.

Tyler Radke: Yeah.

Peter Gassner: I will take that one. The ideal customer profile when you are just starting out is really a nimble type company that really wants to work with you. I think in this area, we are going to probably get a lot of young tech startups, right? Because they are doing something really innovative in what they are doing, and they do not really want to do the same old thing in CRM for core account contact opportunity management. I think we have early indications that they will be great companies to work with, but we will see. Again, I will let you know a lot more in a year.

Speaker #6: And I think in this area, we're going to probably get a lot of young tech startups, right? Because they're doing something really innovative in what they're doing.

Speaker #6: And they don't really want to do the same old thing in CRM for core account, contact, opportunity management. So, I think we have early indications that they'll be great companies to work with.

Speaker #6: But we'll see. Again, I'll let you know a lot more in a year.

Speaker #5: All right. Thanks. And sorry to throw in another.

Paul Shawah: All right. Thanks, and sorry to throw in an-

Speaker #1: Your next question comes from the line of Jalendra Singh with Truist. Jalendra, your line is now open.

Operator 2: Your next question comes from the line of Jailendra Singh with Truist. Jailendra, your line is now open.

Operator: Your next question comes from the line of Jailendra Singh with Truist. Jailendra, your line is now open.

Speaker #6: Yeah, thank you, and thanks for taking my questions. I want to go back to the Falcon discussion and the five early adopters there. It seems one of them is a top 20 pharma company.

Jailendra Singh: Thank you, and thanks for taking my questions. I want to go back to Falcon discussion and the five early adopters there. It seems one of them is a top 20 pharma company. Based on your conversation with these top pharma companies around Falcon, do you believe that the work will be shifting to Falcon is something they were outsourcing to other partners such as CROs, or should we think about something they were doing in-house and now they are leveraging Falcon for that? Related to that, any incremental color on the pricing of the Falcon product?

Speaker #6: Based on your conversations with these top pharma companies around Falcon, do you believe that the work shifting to Falcon is something they were previously outsourcing to other partners, such as CROs, or should we think of it as work they were doing in-house and are now leveraging Falcon for?

Speaker #6: And related to that, any incremental color on the pricing of the Falcon product? In terms of where labor is done or where it will be displaced, I think there'll be a combination of internal and outsourced.

Peter Gassner: In terms of where the labor is done or where it will be displaced, I think there will be a combination of internal and outsourced, although generally not the CROs. That is not what I see. It is a different type of outsourcing, some of it from the CROs, but not most of it. In terms of the pricing, it is very early for that. I know we have been in discussions with customers and their desire is for predictability. That is for sure, right? They want predictability for that because, for one thing, they get that predictability when they either hire or outsource labor. It is quite predictable and it is better for them. It is actually better for us, too.

Speaker #6: Although generally not the CROs—that's not what I see. It's a different type of outsourcing. Some of it is from the CROs, but not most of it.

Speaker #6: And then, in terms of the pricing, it's very early for that. I know we've been in discussions with customers and their desires for predictability.

Speaker #6: That's for sure, right? They want predictability for that, because for one thing, they get that predictability when they either hire or outsource labor. It's quite predictable.

Speaker #6: And it's better for them. It's actually better for us too. But what gets in the way of that a little bit is, well, Falcon is quite early now.

Peter Gassner: Well, what gets in the way of that a little bit is, Falcon is quite early now, so it can do certain things, but it cannot do the things that it will do three years from now. So how do you have a fixed price when your capabilities are rapidly improving? So I think with some of our customers, we will end up having enterprise license agreements, enterprise subscription agreement for the labor based on the size of their company or their function, but it will probably escalate over time. It will be lower in the beginning when Falcon is less mature. So if you want a teenage Falcon, it costs you X, and if you want a Falcon that is 25 years old, it costs you a bit more. I think it is going to be like that.

Speaker #6: So it can do certain things, but it can't do the things that it will do three years from now. So how do you have a fixed price when your capabilities are rapidly improving?

Speaker #6: So, I think with some of our customers, we'll end up having enterprise license agreements—enterprise subscription agreements—for the labor, based on the size of their company or their function.

Speaker #6: But it will probably escalate over time. It will be lower in the beginning when Falcon is less mature. So, if you want a teenage Falcon, that costs you X, and if you want a Falcon that's 25 years old, it costs you a bit more.

Speaker #6: I think it's going to be like that. But again, this is the type of thing you work out with the early adopters. The nice thing here, and the structural advantage that we have, is this is the same buyer-facing applications.

Peter Gassner: But again, this is the type of thing you work out with the early adopters. The nice thing here and the structural advantage that we have is this is the same buyer facing the same business problems as our applications. These are people we know deeply. The trust is there. You will hear people say business moves at the speed of trust, and there is a lot to that. And we have the trust with these customers, so we will get to the right story pretty quickly. All this hinges on having a product that works well, and that is really where our focus is. I would say our early signs are good. When I talk to the engineering and the product management people on Falcon, there is an optimism.

Speaker #6: These are people we know deeply—that trust is there. You will hear people say business moves at the speed of trust, and there's a lot to that.

Speaker #6: And we have the trust with these customers, so we'll get to the right story pretty quickly. All of this hinges on having a product that works well.

Speaker #6: And that's really where our focus is. I would say our early signs are good. When I talk to the engineering and product management people on Falcon, there's an optimism.

Peter Gassner: You will see even the pessimistic ones saying, "Oh, my goodness, this could really work." And in some early test runs, it is like, wow, we tested this against the humans, what the humans did, and Falcon is already better than what the humans did. So there is this sense of optimism, but it is too early to declare success. We have to be very paranoid and pessimistic because we are going into something we have not done before. Veeva has never done agentic labor, and the whole motion is new. That is why the leader of Falcon reports right to me. This is a complete new market and a new motion for Veeva, so we do not have all the answers yet.

Speaker #6: You'll see even the pessimistic ones saying, like, "Oh my goodness, this could really work." And in some early test runs, it's like, "Wow, we tested this against the humans."

Speaker #6: What the humans did, and Falcon's already better than what the humans did. So there's this sense of optimism, but it's too early to declare a success.

Speaker #6: We have to be very paranoid and pessimistic because we're going into something we haven't done before. Veeva has never done agentic labor, and the whole motion is new.

Speaker #6: That's why the leader of Falcon reports right to me. This is a completely new market and a new motion for Veeva. So you don't have all the answers yet.

Speaker #5: That makes sense. It might be a follow-up on other points you raised in your prepared remarks, and somebody asked that earlier about your focus on CRM winbacks among the top 20 companies that did not select Veeva CRM.

Jailendra Singh: That makes sense. My quick follow-up on other points you raised in your prepared remarks, and somebody asked that earlier about your focus on CRM win backs among top 20 companies that did not select Vault CRM. I understand your point that you want to share success stories with them, but just curious, have there been any developments or conversations with customers who have picked Salesforce that is driving that confidence that these opportunities are more actionable, or is it more around delays in rollout by Salesforce that are giving you confidence or opening a window? Just curious, it seems like you are a lot more explicit this time around than the past.

Speaker #5: I understand your point that you want to share success stories with them, but just curious, have there been any developments or conversations with customers who have picked Salesforce that are driving that confidence that these opportunities are more actionable?

Speaker #5: Or is it more about delays and rollout by Salesforce that are giving you confidence or opening a window? Just curious—it seems like you're a lot more explicit this time around than in the past.

Speaker #6: Yeah, it's based on our execution and what we're seeing with Salesforce as well. I think Peter alluded earlier to how Salesforce has been struggling with some of the larger projects that they have.

Paul Shawah: Yeah. It's based on our execution and what we're seeing with Salesforce as well. I think Peter alluded to earlier how Salesforce has been struggling with some of the larger projects that they have, and they don't really have any customers live. When you look at what Veeva's doing, it contrasts pretty significantly. We have over 180 customers live. We have customers that are turning AI on. We had a big milestone in CRM this quarter where one of our top 20s turned AI on in CRM for their entire field force, so really significant milestone. So the contrast between how Veeva is executing and what we're seeing on the other side is very significant. As Peter mentioned, we're very close with these customers. They buy a lot of products from Veeva. We have deep relationships.

Speaker #6: And they don't really have any customers live. And when you look at what Veeva is doing, it contrasts pretty significantly. We have over 180 customers live.

Speaker #6: We have customers that are turning AI on. We had a big milestone in CRM this quarter where one of our top 20s turned AI on in CRM for their entire field force.

Speaker #6: So, really significant milestone. The contrast between how Veeva is executing and what we're seeing on the other side is very significant. As Peter mentioned, we're very close with these customers.

Speaker #6: They buy a lot of products from Veeva. We have deep relationships. We stay very close with them, and that's what gives us the confidence—our execution, our innovation, getting customers live—that trust.

Paul Shawah: We stay very close with them, and that's what gives us the confidence, our execution, our innovation, getting customers live, that trust, and that's why you hear the bullishness and the confidence in those win backs. Just more broadly in the overall market, we're executing

Speaker #6: And that's why you hear the bullishness and the confidence in those winbacks. Just more broadly, in the overall market, we're executing very, very well in CRM.

Paul Shawah: very well in CRM. It's really clear that we are the market leader. We're going to maintain the market leadership position. Just to paint what we view as the end state, we see Veeva maintaining over 70% share in the CRM space, which means we'll continue to execute, we'll continue to drive innovation for our customers. So we feel really good about how CRM is playing out.

Speaker #6: It's really clear that we are the market leader. We're going to maintain the market leadership position. And just to paint a picture of what we view as the end state, we see Veeva maintaining over 70% share in the CRM space, which means we'll continue to execute.

Speaker #6: We'll continue to drive innovation for our customers, so we feel really good about how CRM is playing out. Yeah, I would say you asked about our customer interactions there.

Peter Gassner: Yeah.

Jailendra Singh: Great. Thanks a lot.

Peter Gassner: I would say you asked about our customer interactions there. Yes, we have customer interactions, and lots of people at Veeva deal with these customers, and I personally do at times, too. A common thing you might hear from a customer is, "We're not ready to make that decision yet." They're open to it, they're looking to it, they're not ready yet. Those types of things give us confidence.

Speaker #6: Yes, we have customer actions. Lots of people at Veeva do with these customers, and I personally do at times too. A common thing you might hear from a customer is, "We're not ready to make that decision yet," right?

Speaker #6: So, they're open to it. They're looking into it. They're not ready yet. So those types of things give us confidence.

Speaker #5: Great. Thanks a lot.

Jailendra Singh: Great. Thanks a lot.

Speaker #1: Your next question comes from the line of Craig Hattenbach with Morgan Stanley. Craig, your line is now open.

Operator 2: Your next question comes from the line of Craig Hettenbach with Morgan Stanley. Craig, your line is now open.

Operator: Your next question comes from the line of Craig Hettenbach with Morgan Stanley. Craig, your line is now open.

Speaker #7: Thanks. And great discussion around all the AI developments. Peter, from a macro perspective, after a couple of volatile years—whether it was IRA, MFN pricing, tariffs—the backdrop has steadied.

Craig Hettenbach: Thanks, and great discussion around all the AI developments. Peter, from a macro perspective, after a couple of volatile years, whether it was IRA, MFN pricing, tariffs, the backdrop has steadied. I'm curious, outside of agentic, in your customer discussions, what are they most focused on? What areas in terms of are they leaning into investments that you're seeing in the business?

Speaker #7: So, I'm curious—outside of agentic, in your customer discussions, what are they most focused on? What areas, in terms of, are they leaning into investments that you're seeing in the business?

Speaker #6: Yeah. Craig, it is interesting. We think things have steadied. It is an interesting comment on the world, right? We have two kind of major wars going on.

Peter Gassner: Yeah, Craig, it is interesting. We think things have steadied. It is an interesting comment on the world, right? We had two kind of major wars going on. We have a complete tech disruption in AI that is going on, and I think what happened is the life sciences industry has gotten used to, hey, the world is going to have a lot of moving parts, and they are just moving forward. I think you are good to point this out. They are not being disrupted by these disruptions. If we would have something really catastrophic in the future, that can always disrupt things. For example, if we had a major shift in interest rates, well, life sciences is a capital-intensive industry, that can do things. If major escalations in war, that can do things.

Speaker #6: We've got a complete tech disruption in AI that's going on, and I think what happened is, the last time, this industry has gotten used to, "Hey, the world is going to have a lot of moving parts." And they're just moving forward.

Speaker #6: So, I think it's good that you pointed this out. They're not being disrupted by these disruptions. If we were to have something really catastrophic in the future, that would be disruptive.

Speaker #6: So, for example, if we had a major, major shift in interest rates—well, life sciences and capital-intensive industries, that can do things.

Speaker #6: If there are major escalations in war, that can do things. But so far, industry seems to be executing pretty well and focusing on the jobs to get done.

Peter Gassner: But so far, the industry seems to be executing pretty well and focusing on the jobs to get done.

Speaker #7: Got it. And then, just on my follow-up for the EDC segment: compared to one or two years ago, as that was ramping, that got a lot of attention.

Craig Hettenbach: Got it. Then just on my follow-up for the EDC segment, compared to one or 2 years ago, as that was ramping, that got a lot of attention. Can you just maybe give us an update on just how those ramping deals are progressing and then just the opportunity to capture additional top 20 over time?

Speaker #7: Can you just maybe give us an update on how those ramping deals are progressing, and then the opportunity to capture additional top 20 over time?

Speaker #6: Yeah, the EDC is one of the larger areas, and it's certainly a long implementation cycle. So some of our wins are still ramping, and we're working with the other ones.

Peter Gassner: Yeah. The EDC is one of the larger areas, and it is certainly a long implementation cycle, so some of our wins are still ramping. We are working with the other ones we have. I believe it is nine out of the top 20. Most of the other ones are with Medidata, not all. We are working on those over time, but it is not the right time for all customers to change out all systems at one time, getting back to they have many other things to do. I would go back to the structural advantage we have. In the Development Cloud, applications all on a common platform, and then with Falcon as well, the structural advantage with Falcon is more things to bring to the same buyer. Especially in clinical, having the clinical operations, clinical data management, and our site solutions.

Speaker #6: We have, I believe, nine out of the top 20. Most of the other ones are with metadata—not all. And we're working on those over time, but it's not the right time for all customers to change out all systems at once, getting back to the fact that they have many other things to do.

Speaker #6: I would go back to this structural advantage we have in the development cloud—applications all on a common platform, and then with Falcon as well.

Speaker #6: The structural advantage with Falcon is having more things to bring to the same buyer. And especially in clinical, having clinical operations, clinical data management, and our site solutions.

Speaker #6: That site solution is very strategic to us, and we're introducing eSource there. So I feel confident on EDC over time. It just takes a while.

Peter Gassner: The site solutions is very strategic to us, and we're introducing Veeva eSource there. I think confident on Veeva EDC over time, it just takes a while, and that's something that I think you'll see progress in the next couple of years there.

Speaker #6: And that's something that I think you'll see progress on in the coming couple of years there.

Speaker #7: Helpful. Thank you.

Craig Hettenbach: Helpful. Thank you.

Speaker #1: Your next question comes from the line of Andrew DeGasperi with BNP Paribas. Andrew, your line is now open.

Operator 2: Your next question comes from the line of Andrew Di Gaspari with BNP Paribas. Andrew, your line is now open.

Operator: Your next question comes from the line of Andrew Di Gaspari with BNP Paribas. Andrew, your line is now open.

Speaker #8: Thanks for fitting me in. I just wanted to ask, first—I think you're coming up to the one-year anniversary of your partnership with IQVIA and the settlement with them.

Andrew Di Gaspari: Thanks for fitting me in. I just wanted to ask, first, I think you're coming up to the one-year anniversary of your partnership with IQVIA and the settlement with them. I just wanted to understand how is that going. Have you seen any momentum? We haven't heard much from that deal, and wanted to know if it is going ahead of expectations or in line or below?

Andrew DeGasperi: Thanks for fitting me in. I just wanted to ask, first, I think you're coming up to the one-year anniversary of your partnership with IQVIA and the settlement with them. I just wanted to understand how is that going. Have you seen any momentum? We haven't heard much from that deal, and wanted to know if it is going ahead of expectations or in line or below?

Speaker #8: So I just wanted to understand, how is that going? Have you seen any more of them? Because we haven't heard much from that deal.

Speaker #8: And I wanted to know if they're going ahead of expectations, in line, or below.

Speaker #6: We're really happy with that IQVIA partnership. Gosh, that's — and I discussed it with the management team at IQVIA, and I can represent that they conveyed to me that they're very happy with the partnership as well.

Peter Gassner: We're really happy with that IQVIA partnership. Gosh. I discuss with the management team of IQVIA, and I can represent that they represent to me that they're very happy with the partnership as well. Yes, and customers are especially appreciative of it, right? Much less hassle working with Veeva and IQVIA. I think great things are going to come out of that partnership. They're already starting to come, and I think there's more to come. When you look at it, IQVIA and Veeva, we're both major players to the life sciences industry. We are the two major players, I think it's fair to say, by far. AI is transforming the industry, and for AI, you need services, you need data, you need software. The more Veeva and IQVIA can collaborate, the better it is for the industry.

Speaker #6: So yes. And customers are especially appreciative of it, right? Much less hassle working with Veeva and IQVIA. I think great things are going to come out of that partnership.

Speaker #6: They're already starting to come, and I think there's more to come. When you look at it, IQVIA and Veeva were both major players in the life sciences industry.

Speaker #6: We are the two major players. I think it's fair to say by far. And AI is transforming the industry. For AI, you need services.

Speaker #6: You need data. You need software. So the more even IQVIA can collaborate, the better it is for the industry. It helps the industry grow. It helps Veeva grow.

Peter Gassner: Helps the industry grow, it helps Veeva grow, it helps IQVIA grow. I couldn't be more happy with that. If you ask me, I feel 500% better about our IQVIA relationship now than I did two years ago. It's probably the best thing that happened to our company 12 months ago, and that was just outstanding. Super happy with that.

Speaker #6: It helps IQVIA grow, so I couldn't be happier with that. If you ask me, I feel 500% better about our IQVIA relationship now than I did two years ago.

Speaker #6: It's probably the best thing that happened to our company 12 months ago, and that was just outstanding. So, super happy with that.

Speaker #8: Thanks. And then I'm curious about the double-digit growth you mentioned in the commercial cloud business, even excluding Crossix. And I just want to unpack that.

Andrew Di Gaspari: Thanks. I'm curious about the double-digit growth you mentioned in the Commercial Cloud business, even excluding Crossix. I just want to unpack that. Did it come from PromoMats and some of the other marketing tools, or was there something unique about the CRM side that was giving you that acceleration?

Andrew DeGasperi: Thanks. I'm curious about the double-digit growth you mentioned in the Commercial Cloud business, even excluding Crossix. I just want to unpack that. Did it come from PromoMats and some of the other marketing tools, or was there something unique about the CRM side that was giving you that acceleration?

Speaker #8: In terms of that, did it come from PromoMats or some of the other marketing tools, or was there something unique about the CRM side that was giving you that acceleration?

Brian Van Wagener: Not really any one factor that I'd point to, Andrew, and I think that's part of what actually makes us feel so much excitement and the results is that it was CRM, it was add-ons and new customers and content. It was new customers and brands in Data Cloud. It was continued growth in Crossix on both the measurement and the audiences side. It really was broad-based growth around commercial. I guess what I'd point to is some of what Peter and Paul have mentioned is that full commercial story and full capability of all those products on one platform from one provider really resonating in the market and driving growth. Very strong quarter from commercial.

Speaker #6: Not really any one factor that I'd point to, Andrew. And I think that's part of what actually makes us feel so much excitement and why the result is that it was CRM.

Speaker #6: It was add-ons and new customers and content. It was new customers and brands in Data Cloud. It was continued growth in CrossX on both the measurement and the audience side.

Speaker #6: It really was broad-based growth around commercial. And I think—I guess what I'd point to is, as Peter and Paul have mentioned, that full commercial story and full capability of all those products on one platform from one provider are really resonating in the market and driving growth.

Speaker #6: So, very strong quarter from Commercial.

Speaker #8: Thank you.

Andrew Di Gaspari: Thank you.

Andrew DeGasperi: Thank you.

Speaker #1: Due to time, we ask that you limit yourself to one question. Thank you so much for understanding. Our next question comes from the line of Dylan Becker with William Blair.

Operator 2: Due to time, we ask that you limit yourself to one question. Thank you so much for understanding. Our next question comes from the line of Dylan Becker with William Blair. Dillon, your line is now open.

Operator: Due to time, we ask that you limit yourself to one question. Thank you so much for understanding. Our next question comes from the line of Dylan Becker with William Blair. Dillon, your line is now open.

Speaker #1: Dylan, your line is now open.

Speaker #9: Hey, guys, appreciate it. Maybe, Peter, if we touch on the strength in consulting and services. I know that there's kind of several—you classify kind of the value of efficiency, of kind of being able to do more with the same kind of amount of your existing resources versus the efficiency gains you're seeing there, enabling your customers to go faster and capitalize on kind of more of the AI opportunities, maybe meet their kind of increasing willingness, if that makes sense?

Dylan Becker: Hey, guys. Appreciate it. Maybe Peter, if we touch on the strength in consulting and services, I know that there's several components to that, but how would you classify the value of efficiency of being able to do more with the same amount of your existing resources versus the efficiency gains you're seeing there enabling your customers to go faster and capitalize on more of the AI opportunities, maybe meet their increasing willingness, if that makes sense? Because it does seem like that's another area I know it's not perfectly correlated to the subscription side, but continue to see healthy momentum in driving that change management for a lot of these enterprises.

Speaker #9: Because it does seem like that's another area. I know it's not perfectly correlated to the subscription side, but it continues to see healthy momentum and is driving that change management for a lot of these enterprises.

Speaker #6: Right. I think that the big benefit for Veeva that we will hopefully see over time here is that by more tech-enabling our consulting and especially our services, our software will become more valuable.

Peter Gassner: I think that the big benefit for Veeva that we will hopefully see over time here is that by more tech enabling our consulting and especially our services, our software will become more valuable. So for example, if somebody wanted to buy our Veeva EDC and if it took 1 billion USD to implement, nobody would buy it. But if it took 10 USD and a week, everybody would buy it. So the faster you can have your implementations go and the more accurate, the less cost, the more valuable your applications become. So that's the big driver. Yes, it probably means growth for us in services because people will buy more services. But it's about customer success and the industry's success and driving our application business.

Speaker #6: So, for example, if somebody wanted to buy our EDC, and if it took a billion dollars to implement, nobody would buy it. But if it took $10 and a week, everybody would buy it.

Speaker #6: So, the faster you can have your implementations go and the more accurate, the less cost, the more valuable your applications become. So that's the big driver.

Speaker #6: Yes, it probably means growth for us in services because people will buy more services. But it's about customer success and industry success, and driving our application business.

Speaker #8: I overall think it'll be a renaissance for services and consulting companies as we go forward, because I think this notion of tech-enabled services—specialized tech-enabled services—is really going to drive growth, rather than going to generalists that say, "Hey, I have people that can do a lot of things." No, you have a job to get done.

Brian Van Wagener: I overall think it will be a renaissance for services and consulting companies as we go forward, because I think this notion of tech-enabled services, specialized tech-enabled services, is really going to drive growth rather than going to generalists that say, "Hey, I have people that can do a lot of things." No, you have a job to get done. You will probably go to the specialist that has a tech-enabled service that can get that done. And I think that will actually lead many companies to do more with partners rather than doing it internally, because they can get the outcome quicker and better with a tech-enabled service.

Peter Gassner: I overall think it will be a renaissance for services and consulting companies as we go forward, because I think this notion of tech-enabled services, specialized tech-enabled services, is really going to drive growth rather than going to generalists that say, "Hey, I have people that can do a lot of things." No, you have a job to get done. You will probably go to the specialist that has a tech-enabled service that can get that done. And I think that will actually lead many companies to do more with partners rather than doing it internally, because they can get the outcome quicker and better with a tech-enabled service.

Speaker #8: You'll probably go to the specialist that has a tech-enabled service that can get that done. And I think that will actually lead many companies to do more with partners, rather than doing it internally.

Speaker #8: Because they can get the outcome quicker and better with the tech-enabled service.

Speaker #1: Your next question comes from the line of Tamji Chowdhury with Guggenheim Securities. Tamji, your line is now open.

Operator 2: Your next question comes from the line of Tamjid Chowdhury with Guggenheim Securities. Tamji, your line is now open.

Operator: Your next question comes from the line of Tamjid Chowdhury with Guggenheim Securities. Tamji, your line is now open.

Speaker #8: Thanks for taking my questions. I guess, Peter, I wanted to ask you a question on a recent management change. It was announced that Tom Schwenger will be leaving the company to go to a long-standing partner of yours.

Tamjid Chowdhury: Thanks for taking my question. I guess, Peter, I wanted to ask you a question on a recent management change. It was announced that Tom Schwenger will be leaving the company to go to a long-standing partner of yours. And we understand that he played a pivotal role in many of the company's top 20 biopharma wins. How should we be thinking about the current transition of his responsibilities and maybe the impact of his exit on the relationship he has helped curate over the years, if any?

Speaker #8: And we understand that he played a pivotal role in many of the company’s top 20 biopharma wins. So, how should we be thinking about the current transition of his responsibilities, and maybe the impact of his exit on the relationships he has helped curate over the years, if any?

Speaker #6: Yeah. Tom, for Sanjay Singhal, Tom, go ahead. Tom was at Accenture before he came to Veeva many years ago and was a great Veeva partner at Accenture.

Peter Gassner: Yeah, Tom, we of course, sad to see Tom go. Tom was at Accenture before he came to Veeva many years ago and was a great Veeva partner at Accenture. Tom is going to go on to be a CEO of a services type partner, and we think that he will be a great partner for us there now. All good there. Those relationships do not go away that Tom has, so he will keep those. And in terms of Veeva, especially when you mention CRM, gosh, that is a business-critical decision that lasts for 10 years. There are many people involved in that, and there is a product involved with that. So Tom's departure will not have effect on our CRM business because it is an enduring, long-standing thing. It is different than maybe consulting type work or something like that. This is a product attachment, so that is not going to affect our business.

Speaker #6: And Tom's going to go on to be a CEO of a services-type partner, and we think that he will be a great partner for us there now.

Speaker #6: So all good there. Those relationships don't go away that Tom has, so he will keep those. And in terms of Veeva, when customers—especially when you mention CRM—gosh, that's a business-critical decision that lasts for 10 years.

Speaker #6: It's involved. There are many, many people involved in that. And there's a product involved with that. So I don't—that won't—Tom's departure won't have an effect on our CRM business because that's more of a—it's an enduring, long-standing thing.

Speaker #6: It's different than maybe consulting-type work or something like that. This is a product attachment, so that's not going to affect our business.

Speaker #1: Your next question comes from the line of Billy Fitzsimmons with Piper Sandler. Billy, your line is now open.

Operator 2: Your next question comes from the line of Billy Fitzsimmons with Piper Sandler. Billy, your line is now open.

Operator: Your next question comes from the line of Billy Fitzsimmons with Piper Sandler. Billy, your line is now open.

Speaker #2: Perfect. Thanks so much for taking the question here. Congrats on the two big top 20 biopharma wins for Vault CRM in the quarter. Could you give a little more color on how those deals played out?

Billy Fitzsimmons: Perfect. Thanks so much for taking the question here. Congrats on the two big top 20 biopharma wins for Vault CRM in the quarter. Could you give a little more color on how those deals played out? What ultimately drove them to Veeva over Salesforce? And for the

Speaker #2: What ultimately drove them to Veeva over Salesforce? And for the top 20 vendors that have not decided yet, has your level of confidence changed in potentially winning those versus, say, 90 days ago?

Billy Fitzsimmons: top 20 vendors that have not decided yet, has your level of confidence changed in potentially winning those, versus, say, 90 days ago? Thank you.

Speaker #2: Thank you.

Speaker #3: Yeah. So first, we're excited about the exceptional quarter that we had, and that was one of the headlines. You heard us talk about three large companies, out of two in the top 20.

Peter Gassner: Yeah. So first, we're excited about the exceptional quarter that we had, and that was one of the headlines. You heard us talk about three large companies, two in the top 20, Eli Lilly and Company selecting Vault CRM, Biogen selecting Vault CRM, and then of course, we have Regeneron Pharmaceuticals as well. The why is pretty simple, and I think we touched on it on this call, right? It goes back to trust. So they trust Veeva to be able to deliver. And then product excellence. The product is working. We are delivering on the promise of all the innovation that we've told the market we would execute on, and that's playing out in the marketplace. So it's trust and it's great product. It simply comes down to those two things. In terms of the remaining top 20 commitments that are out there's only two left.

Paul Shawah: Yeah. So first, we're excited about the exceptional quarter that we had, and that was one of the headlines. You heard us talk about three large companies, two in the top 20, Eli Lilly and Company selecting Vault CRM, Biogen selecting Vault CRM, and then of course, we have Regeneron Pharmaceuticals as well. The why is pretty simple, and I think we touched on it on this call, right? It goes back to trust. So they trust Veeva to be able to deliver. And then product excellence. The product is working. We are delivering on the promise of all the innovation that we've told the market we would execute on, and that's playing out in the marketplace. So it's trust and it's great product. It simply comes down to those two things. In terms of the remaining top 20 commitments that are out there's only two left.

Speaker #3: Lilly selecting Vault CRM, Biogen selecting Vault CRM, and then, of course, we had Regeneron as well. The why is pretty simple, and I think we touched on it on this call, right?

Speaker #3: It goes back to trust. So, they trust Veeva to be able to deliver. And then product—product excellence. The product is working. We are delivering on the promise of all the innovation that we've told the market we would execute on.

Speaker #3: And that's playing out in the marketplace. So it's trust and it's a great product. I mean, it really simply comes down to those two things.

Speaker #3: In terms of the remaining top 20 commitments that are out there, there's only two left. So, we have 12 of the top 20, and there are two remaining.

Paul Shawah: We have 12 of top 20, and there are two remaining. They will play out by the end of this year, but we feel good about both of them. They still need to be finalized, but we like our chances in both, and we will update you as things play out.

Speaker #3: And they'll play out by the end of this year, but we feel good about both of them. They still need to be finalized, but we like our chances in both.

Speaker #3: And we'll update you as things play out.

Speaker #1: Your next question comes from the line of Ryan McDonald with Needham & Company. Ryan, your line is now open.

Operator 2: Your next question comes from the line of Ryan MacDonald with Needham & Company. Ryan, your line is now open.

Operator: Your next question comes from the line of Ryan MacDonald with Needham & Company. Ryan, your line is now open.

Speaker #8: All right. Thanks for taking my questions, and congrats on a nice quarter. Peter, an emerging trend that we've been seeing across large healthcare and life sciences organizations within the industry this year is one in which customers want to embrace AI, but they don't want to take the risk on a new and unproven entrant that offers AI for only a specific point solution or a niche use case, as they don't have the time to evaluate hundreds of new vendors.

Ryan MacDonald: Thanks for taking my questions and congrats on a nice quarter. Peter, an emerging trend that we have been seeing across large healthcare and life sciences organizations within the industry this year is one in which customers want to embrace AI, but they do not want to take the risk on a new and unproven entrant that offers AI for only a specific point solution or a niche use case as they do not have the time to evaluate hundreds of new vendors. It sounds like they would rather consume AI from the incumbent platform vendors that they are already deeply embedded with. So one, are you getting this same feedback from your customers?

Speaker #8: And it sounds like they'd rather consume AI from the incumbent platform vendors that they're already deeply embedded with. So, one, are you getting this sort of same feedback from your customers?

Speaker #8: And two, does this dynamic create an opportunity for you to perhaps ramp up the M&A activity? Acquire similar types of AI point solutions like Copely and sell it into your existing base faster than what one of these smaller AI solutions could do on their own?

Ryan MacDonald: And two, does this dynamic create an opportunity for you to perhaps ramp up the M&A activity, acquire similar types of AI point solutions like Copilot, and sell it into your existing base faster than what one of these smaller AI solutions could do on their own? Thanks.

Speaker #8: Thanks.

Speaker #6: Sorry, I was giving a great answer on mute. The customers want to be out of the experimentation phase. They definitely want to be out of that.

Peter Gassner: Sorry, I was giving a great answer on mute. The customers want to be out of the experimentation phase. They definitely want to be out of that. Some months ago, when we first introduced Falcon, I had customers come up to me personally. We were at an event, and they said, "Oh, thank goodness you're announcing that because that's. Thank goodness you're announcing that because I didn't want to evaluate all these small vendors. So now that you have an offering, that helps me not have to go and look at all these small vendors." Yes, it's absolutely what customers want. In terms of acquisitions, we may find others that are a cultural fit, but we'll be very discerning.

Speaker #6: So some months ago when we first introduced Falcon, I had customers come up to me personally. We were at an event and they said, "Oh, thank goodness you're—that's—thank goodness you're announcing that, because I didn't want to evaluate all these small vendors." So, now that you have an offering, that helps me not have to go and look at all these small vendors.

Speaker #6: So yes, it's absolutely what customers want. In terms of acquisitions, we may find others that are a cultural fit, but we'll be very discerning. Coply was an excellent acquisition for us.

Peter Gassner: Copely was an excellent acquisition for us, and by the way, the Falcon, which is now Veeva Falcon MLR, our sales cycles there are probably more advanced than in any other part. That market is very ripe for things. But in these other areas, we're getting started, and we're making a lot of progress with Falcon. If we're going to do an acquisition there, it would be more for talent acquisition and not for product, because we've put a real good base in the Falcon product and Falcon platform. I don't think we'll need acquisitions for product anymore. We did look at some when we were just starting Falcon. We looked at a number. I would say at least 20 companies to look at.

Speaker #6: And by the way, the Falcon, which is now Falcon MLR, maybe our sales cycles there are probably more advanced than in any other part.

Speaker #6: That market is very, very ripe for things. But in these other areas, we're just getting started, and we're making a lot of progress with Falcon.

Speaker #6: So, if we're going to do an acquisition there, it would be more for talent acquisition and not for product, because we've put a really good base in the Falcon product.

Speaker #6: And Falcon platform, I don't think we'll need acquisitions for product anymore. We did look at some when we were just starting Falcon. We looked at a number.

Speaker #6: I would say there were at least 20 companies to look at. We found one that was the right fit of culture, product, and willingness to be acquired.

Peter Gassner: We found one that was the right fit of culture, product, and of willingness to be acquired, and we found that in Copely, so it's sometimes like that. For Falcon, I don't actually expect us to find another acquisition that fits, and we're not dependent on any acquisition, but we'll see what happens.

Speaker #6: And we found that in Coply. So it's sometimes like that. For Falcon, I don't actually expect us to find another acquisition that fits.

Speaker #6: And we're not dependent on any acquisition. But we'll see what happens.

Speaker #1: Your next question comes from the line of Gabriella Borjas with Goldman Sachs. Gabriella, your line is now open.

Operator 2: Your next question comes from the line of Gabriela Borges with Goldman Sachs. Gabriela, your line is now open.

Operator: Your next question comes from the line of Gabriela Borges with Goldman Sachs. Gabriela, your line is now open.

Speaker #5: Hi, everyone. This is Grayson on for Gabriella. Thank you for taking our question. I just wanted to ask on Aspen—what are the specific customer problems that Aspen is aiming to solve that maybe the existing horizontal CRM platforms struggle with?

Grayson: Hi, everyone. This is Grayson on for Gabriela. Thank you for taking our question. Just one on Aspen. What are the specific customer problems that Aspen is aiming to solve that maybe the existing horizontal CRM platforms struggle with? What are the milestones that you would point investors to watch for over the next year? Thank you.

Greyson Sklba: Hi, everyone. This is Grayson on for Gabriela. Thank you for taking our question. Just one on Aspen. What are the specific customer problems that Aspen is aiming to solve that maybe the existing horizontal CRM platforms struggle with? What are the milestones that you would point investors to watch for over the next year? Thank you.

Speaker #5: And what are the milestones that you would point investors to watch for over the next year? Thank you.

Speaker #6: In terms of milestones, I think it's probably just the things that we say on our earnings calls and things like that. That would be because there aren't really going to be visible milestones, I would say.

Peter Gassner: In terms of milestones, I think it's probably just the things that we say on our earnings calls and things like that. There's not going to really be visible milestones, I would say. We'll probably give you updates when the time is there. Your other question was basically how will things be better? Is that what the question is? If you could rephrase that again.

Speaker #6: We'll probably give you updates when the time is right. And your other question was basically, how will things be better? Is that the question?

Speaker #6: If you could rephrase that again.

Speaker #5: Yeah, just what are the specific customer problems that you're aiming to solve with Aspen versus what some of the existing horizontal CRM platforms struggle with today?

Grayson: Yeah. Just what are the specific customer problems that you're aiming to solve with Aspen, versus what some of the existing horizontal CRM platforms struggle with today?

Greyson Sklba: Yeah. Just what are the specific customer problems that you're aiming to solve with Aspen, versus what some of the existing horizontal CRM platforms struggle with today?

Speaker #6: Yeah, there's a couple. One is price being unpredictable—getting out of control. That would be one. The other one would be just sort of dependability of the vendors, right? That you can really count on the vendor to be on your side.

Peter Gassner: Yeah. There's a couple. One is price. Price being unpredictable, getting out of control. That would be one. The other one would be just sort of dependability of the vendors, right? You can really count on the vendor to be on your side. Scalability of the vendor, right? Sometimes they want something that really works for a small company that can scale up to a very large. Now in the market, you have to pick, like, do I want something that works for a small company or do I get something that's too big for me now, but I can scale up? Other things are just data entry. The existing CRM systems really, if you get into them, okay, they require a heck of a lot of data entry. Most of that with AI doesn't need to be done anymore.

Speaker #6: Scalability of the vendor, right? Sometimes they want something that really works for a small company but can scale up to a very large one. Now, in the market, you have to pick—do I want something that works for a small company, or do I get something that's too big for me now, but I can scale up?

Speaker #6: Other things are just like data entry. The existing CRM systems, if you really get into them, require a heck of a lot of data entry.

Speaker #6: Most of that with AI doesn't need to be done anymore. And then I just think there's this other fundamental thing of a better CRM system.

Peter Gassner: I just think there is this other fundamental thing of better CRM system, and that is just the details of a fundamentally better data model, better business logic, better just details like how do you handle multicurrency? How do you handle forecasting? How do you handle implementation so that you can get the CRM you want for your company in 3 months, rather than getting half of what you want in 3 years? I was on the board of Zoom for many, many years and Zoom was a very small company when I joined, and very few investors wanted to invest in Zoom because they thought, "Well, there is already Webex, there are all these other things." But Eric had an idea, "But mine will be fundamentally better, better." That is the same idea here.

Speaker #6: And that's just the details of a fundamentally better data model, better business logic, better details like how do you handle multi-currency? How do you handle forecasting?

Speaker #6: How do you handle implementation so that you can get the CRM you want for your company in three months, rather than getting half of what you want in three years?

Speaker #6: So, I was on the board of Zoom for many, many years. And Zoom was a very small company when I joined, and very few investors wanted to invest in Zoom because they thought, well, there's already Webex.

Speaker #6: There’s all these other things. But Eric had an idea, but mine will be fundamentally better, better, better. And that’s the same idea here. Now, that’s unusual—that that could be disruptive—but I think in this case, it will be.

Peter Gassner: Now, that is unusual that that could be disruptive, but I think in this case it will be better, nicer, less expensive, more predictable, faster. I think all those things add up.

Speaker #6: Better, nicer, less expensive, more predictable, faster—I think all those things add up.

Speaker #1: Our last question comes from the line of Scott Schoenhaus with KeyBank. Scott, your line is now open.

Operator 1: Our last question comes from the line of Scott Schoenhaus with KeyBank. Scott, your line is now open.

Operator: Our last question comes from the line of Scott Schoenhaus with KeyBank. Scott, your line is now open.

Speaker #5: Thanks, guys, for squeezing me in. I wanted to drill more into CrossEx. From 90 days ago, are you seeing, from your purview of CrossEx, are you seeing pharma marketing advertising budgets become better than they were 90 days ago?

Scott Schoenhaus: Thanks, guys, for squeezing me in. I wanted to drill more into Crossix. From 90 days ago, are you seeing from your purview from Crossix, are you seeing pharma marketing advertising budgets become better than they were 90 days ago? Do you think that AI is helping to act as a catalyst for pharma budgets, not only across Crossix but the overall pharma digital advertising space? Thank you.

Speaker #5: And do you think that AI is helping to act as a catalyst for pharma budgets, not only across cross-ex, but overall in the pharma digital advertising space?

Speaker #5: Thank you.

Speaker #2: Yeah. We continue to see strength in the pharma marketing budgets and spend on digital, and that's playing out in Crossix. We had another strong quarter of performance in Crossix.

Paul Shawah: Yeah. We continue to see strength in the pharma marketing budgets and spend on digital, and that is playing out in Crossix. We had another strong quarter of performance in Crossix. AI, what role is that playing? I think that is a nice long-term benefit and driver of what we are doing in Crossix as companies. You probably heard us talk a little about helping companies become an agentic commercial, engage with doctors via AI. They are turning more and more to AI. As that becomes a more important channel, Crossix becomes more important in terms of measuring and understanding and optimizing against that spend. Yeah, absolutely. AI will be a nice tailwind for the foreseeable future for Crossix.

Speaker #2: AI, what role is that playing? I think that's a nice long-term benefit and driver of what we're doing in cross-ex as companies, and you've probably heard us talk a little bit about helping companies become agentic, commercially engage with doctors via AI.

Speaker #2: They're turning more and more to AI. And as that becomes a more important channel, cross-ex becomes more important in terms of measuring, understanding, and optimizing against that spend.

Speaker #2: So yeah, absolutely. AI will be a nice tailwind for the foreseeable future for cross-ex.

Speaker #1: We have reached the end of the Q&A session. I will now turn the call back to Peter Gassner for closing remarks.

Operator 1: We have reached the end of the Q&A session. I will now turn the call back to Peter Gassner for closing remarks.

Operator: We have reached the end of the Q&A session. I will now turn the call back to Peter Gassner for closing remarks.

Speaker #6: Thank you, everyone, for joining the call today. And thank you to our customers for your continued partnership, and to the Veeva team for your outstanding work in the quarter.

Peter Gassner: Thank you everyone for joining the call today, and thank you to our customers for your continued partnership and to the Veeva team for your outstanding work in the quarter. I am looking forward to speaking with you again on our upcoming Investor Day on 5 November.

Speaker #6: I'm looking forward to speaking with you again at our upcoming Investor Day on November 5th. Thank you.

Speaker #1: This concludes today's call. Thank you for attending. You may now disconnect.

Operator 1: This concludes today's call. Thank you for attending. You may now disconnect. This event has now concluded. Access the Veeva Systems Inc. IR website for more information. This line will now disconnect.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.