VEEVA SYSTEMS INC VEEV

Veeva announced the resolution of its 10-year dispute with IQVIA, which Peter Gassner described as a natural evolution given changes in both companies' market positions. This resolution removes two 'artificial barriers' for Veeva's Commercial Cloud: the prior Salesforce OEM agreement (now resolved by moving to Vault) and restrictions on using IQVIA data in Veeva Network and Nitro products. This is expected to unlock significant opportunities, allowing Veeva to offer a more complete commercial solution and drive broader adoption of its commercial suite.

Veeva is making rapid progress on its AI strategy, focusing on industry-specific agents built deeply into the Vault platform. Peter Gassner emphasized that Veeva's structural advantage as a system of record, with deep industry applications, positions it to lead in industry-specific agents. While no material revenue contribution is expected from AI in FY26 or FY27, it is anticipated to significantly increase Veeva's market size over many years by creating billions of dollars of value for the life sciences industry through increased efficiency and productivity. The company is taking a platform-first approach, enabling agents to interact with content, data, and other agents seamlessly.

Veeva reported that 9 of the Top 20 pharma companies are now committed to Vault CRM, with 2 of these customers already live in major markets. This contrasts with Salesforce, which has 3 Top 20 commitments but is not expected to have a go-live until late 2026 at the earliest. Paul Shawah highlighted that Veeva's wins are more certain and faster to implement, while Salesforce's projects are riskier and require extensive custom work. The company expects the pull of AI and the general passage of time to accelerate Vault CRM migrations, with the bulk anticipated in FY26 and FY27.

R&D subscriptions and services experienced strong, broad-based growth in Q2 FY26, with the team executing well in a stable environment. Quality Cloud has received elevated focus within Veeva, with products like LIMS (Laboratory Information Management), batch release, and validation management. Peter Gassner noted that Quality Cloud is on track with the company's 5-year plan and represents a significant business opportunity, though its impact on the overall plan is not considered material.

Crossix, a key driver of commercial growth, continued its strong performance in Q2 FY26, building on several consecutive strong quarters. This growth is attributed to both increasing market share and expanding product footprint, particularly in audiences and HCP (Healthcare Provider) marketing. Both the measurement business and the usage-based audiences business contributed to growth, with audiences being the smaller but higher-growth segment. Management expects Crossix to remain a meaningful growth driver for the balance of the year.

Veeva is pursuing horizontal software ambitions with a platform-first approach, with initial projects in the CRM area expected to start this year. Peter Gassner emphasized the company's commitment to product excellence and authenticity in this new market. Internally, Veeva is leveraging AI tools to drive productivity and quality across its teams, including engineers and those integrated with email systems. While not expected to lead to sudden headcount changes, AI is viewed as a transformational tool for long-term productivity.