Veeva's Q2 2026: Contradictions Emerge on Vault CRM Migration, AI Strategy, and Competitor Stance

The above is the analysis of the conflicting points in this earnings call

Date of Call: August 27, 2025

Financials Results

• Revenue: $789M, ahead of guidance

Guidance:

• Annual billings guidance raised by $35M, roughly aligned with the revenue increase.
• Quarterly billings remain lumpy; management focuses on annual view.
• Q3 and Q4 outlook firming with strengthening second-half pipeline.
• No material FY26 revenue impact from the IQVIA resolution; benefits expected in coming years.
• Veeva AI: no material revenue contribution expected in FY26 or FY27; long-term TAM expansion anticipated.
• Crossix expected to remain a meaningful growth driver through the balance of the year, with normal seasonality (heavier in Q1).
• R&D subscriptions showing strong execution and expected to pick up in the second half.

Business Commentary:

* Record Revenue and Strong Performance: - Veeva Systems reported total revenue of $789 million for the quarter, exceeding guidance, with non-GAAP operating income of $353 million. - The growth was driven by the company's vision for an industry cloud, including strong performance in quality cloud subscriptions and services alongside R&D subscriptions.

• IQVIA Dispute Resolution and New Opportunities:
• Veeva resolved a decade-long dispute with IQVIA, opening new commercial opportunities with IQVIA data integration.

• This resolution allows Veeva's CRM and other commercial products to access IQVIA's industry-leading data, enhancing Veeva's offerings and market potential.

• AI and Agentic Computing Strategy:

• Veeva's AI initiatives are expected to transform the industry, aiming to reduce costs and improve efficiency.

• The focus is on developing deep industry-specific agents to enhance workflows, with anticipated significant value creation over time.

• CRM Migration and Market Penetration:

• The transition to Vault CRM from Salesforce is underway, with top 20 customers committed to the platform, indicating strong market traction.
• This move is expected to drive growth in the commercial cloud, providing customers with improved operational efficiency and effectiveness.

Sentiment Analysis:

• “We had another strong quarter, delivering Q2 results ahead of our guidance. Total revenue…was $789 million.” “Pleased with the $35 million raise [to] full year [billings] guidance.” “Firming up of the view for Q3 and Q4.” “Great quarter for Crossix in Q2…expected to continue to be a meaningful driver of growth.”

Q&A:

• Question from Hoi-Fung Wong (Oppenheimer): What drove the IQVIA legal resolution and what opportunities does it unlock? Also, why raise annual billings after an in-line 2Q?
  Response: Landscape changed; restrictions with IQVIA data and Salesforce are gone, enabling full Commercial Cloud (e.g., Network, Nitro) integration; annual billings raised by $35M as the better indicator, while quarterly billings are lumpy.

• Question from Joseph D. Vruwink (Baird): How is Quality Cloud evolving and will it be a bigger driver? And how will AI be monetized near term?
  Response: Quality is now a full cloud (LIMS, batch release, validation) and on plan; Veeva AI sells platform plus industry agents, but no material revenue expected in FY26–FY27.

• Question from Brent Alan Bracelin (Piper Sandler): Customer reaction to IQVIA settlement and current CRM competitive dynamics?
  Response: Customer response is overwhelmingly positive; IQVIA no longer sells CRM; Veeva still competes with IQVIA in select data areas but partners broadly.

• Question from Dylan Tyler Becker (William Blair): What gives Veeva a right to win in AI, and how are top-20 CRM go-lives resonating?
  Response: Structural advantage from system-of-record apps and broad Vault platform; 9 top-20s committed to Vault CRM vs Salesforce’s 3, with Veeva go-lives occurring now while Salesforce timelines stretch to 2026–2029.

• Question from Brian Christopher Peterson (Raymond James): Early agentic AI opportunities across R&D vs Commercial and update on horizontal software?
  Response: Commercial boosts productivity; in safety/clinical, agents can replace significant outsourced processing (e.g., TMF filing/QA); horizontal CRM use case starting this year, fuller update at Investor Day.

• Question from Stanislav Berenshteyn (Wells Fargo): Size of Nitro/Network opportunity post-IQVIA and why were Commercial Cloud subs flattish?
  Response: Nitro/Network similar to large add-ons but mainly a catalyst for broader commercial pull-through (≈25% direct/75% network effect); Crossix is the principal growth driver, with mixed factors keeping commercial subs flattish near term.

• Question from David Howard Windley (Jefferies): Path to expanding CRM product breadth and any IQVIA-related restrictions?
  Response: AI plus newly built apps (Campaign Manager, Service Center, Patient CRM, Network, Nitro) can now pull through; no restrictions in the IQVIA agreement—open to compete/partner.

• Question from Tyler Maverick Radke (Citi): Any immediate revenue unlocks from IQVIA this year and what is Vault’s architectural advantage for AI?
  Response: No material FY26 revenue from IQVIA; advantage is deep, embedded application agents with security and transactional control inside Vault, unlike toolkit/call-center-centric approaches.

• Question from Rishi Nitya Jaluria (RBC): Will agents interoperate outside Veeva and can agents ease Vault CRM migrations?
  Response: Yes, designed for MCP-based agent-to-agent interoperability across vendors; agents won’t materially ease migrations—tooling/process does; AI pull likely accelerates migrations with most in 2026–2027.

• Question from Ryan Michael MacDonald (Needham): Role of Veeva Business Consulting in AI adoption and update on Compass prescribers?
  Response: Every AI project requires process change; consulting is key and already engaged with early adopters; Compass prescribers faced change resistance but is improving with differentiated procedural projections.

• Question from Craig Matthew Hettenbach (Morgan Stanley): Any macro changes and areas of resilience?
  Response: Macro uncertainty is stable; customers progressing deals; pipeline build supports firmer Q3/Q4 across the business.

• Question from William Joseph McNamara (Evercore ISI): Are you seeing internal margin benefits from AI?
  Response: No near-term margin impact; AI is a productivity/quality tool across functions, not a driver of sudden headcount changes.

• Question from David E. Hynes (Canaccord Genuity): Economics of early large Vault CRM customers vs legacy Veeva CRM?
  Response: Pricing/revenue similar; near-term COGS higher due to transition, but long-term COGS lower on Vault.

• Question from Jailendra P. Singh (Truist Securities): Crossix trends vs Q1 and growth drivers?
  Response: Continued strength with audiences as the faster-growing usage-based component; gaining share and expanding into HCP marketing; normal seasonality with heavier Q1.

• Question from Steven James Valiquette (Mizuho): Crossix lumpiness and ability to sustain >30% growth?
  Response: Both measurement and audiences grew; audiences remains the higher-growth segment; not disclosing exact growth rates, usage-based dynamics drive variability.

• Question from Andrew Lodovico DeGasperi (BNP Paribas Exane): Any EDC verbal commitments and color on headcount growth?
  Response: No EDC verbal details; hiring in line with plan with a larger Generation Veeva graduate class feeding services and engineering.

• Question from David Michael Larsen (BTIG): How many Vault CRM wins this quarter and mix?
  Response: 13 total wins, a mix of new first-CRM customers and migrations; migrations expected to ramp materially in 2026–2028.