Veeva Systems Inc. (VEEV) Earnings & Analysis

Latest quarter

Veeva reported Q2 FY2027 revenue of $928.0 million, compared with the consensus of $904.1 million. The company reported adjusted EPS, as the consensus counts it, of $2.35, compared with the consensus of $2.22.

The filing shows revenue rose 17.6% from $789.1 million in Q2 FY2026. The filing attributes the increase in subscription revenue to $68 million from R&D and Quality Solutions and $40 million from Commercial Solutions, driven by expanding use among existing customers and annual inflation adjustments. The filing says professional services and other revenue increased primarily because of implementation services and business consulting.

Veeva reported diluted EPS of $1.66, up from $1.19 a year earlier. The company reported a 75.0% gross margin, versus 75.3% a year earlier, while operating margin was 29.6%, versus 24.8%. The filing reported free cash flow of $230.7 million, compared with $232.1 million in Q2 FY2026.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

Chief Executive Officer Peter Gassner said Q2 revenue was $928 million and non-GAAP operating income was $416 million, with results ahead of the company’s guidance. He said the quarter included progress in CRM, artificial intelligence and the company’s acquisition strategy.

On demand for Falcon, Gassner said customers are prioritizing cost savings, compliance and efficiency, and that interest is high. He said Veeva is currently the limiting factor because it must prepare the product and work with early adopters. Gassner said Falcon is not included in the company’s revenue plans at this time, while Chief Financial Officer Brian Van Wagener said incremental Falcon investment would not be material in FY2027 and is included in updated guidance.

When asked about customers transitioning away from Veeva CRM, Gassner said some projects have encountered difficulties and that Veeva could win back some customers in 2027 and 2028. He said the company’s priority is to make existing CRM customers successful and improve its product.

Van Wagener said R&D is transitioning from established products toward EDC, eCOA, RTSM, safety and LIMS. He said these newer products are early in their development and adoption, and that differences in their growth curves are reflected in guidance for the remainder of the year. He did not provide year-by-year guidance beyond FY2027.

Gassner said Data Cloud is an accelerator rather than a prerequisite for AI, and cited momentum in OpenData, Compass and LINK. He described data as a long-term business and said Veeva’s applications, data, consulting and agents are designed to work together.

On Aspen pricing, Gassner described a simpler model of $50 a user a month, with usage overage charges for resources beyond expected use. He said Veeva would listen to early customers on pricing. Gassner also said Falcon’s gross margins should be roughly similar to the company’s software margins, while declining model costs are the company’s belief rather than a prediction he would quantify.

Guidance

Veeva raised FY2027 revenue guidance to $3.68 billion to $3.69 billion from its June guide of $3.64 billion. The company raised FY2027 non-GAAP operating income guidance to $1.64 billion from $1.61 billion. Veeva also raised its FY2027 non-GAAP fully diluted net income per share outlook to approximately $9.21 from $9.05.