VEEVA SYSTEMS INC Q3 FY2025 earnings call

• Q3 was a strong quarter with total revenue of $699 million and non-GAAP operating income of $304 million. • Broad-based adoption in Development Cloud and significant milestones in commercial, including progress on CRM. • Innovation such as Vault CRM and MLR Bot, with MLR Bot being a separate license and generating early interest. • Progress in large strategic partnerships in Development Cloud, similar but not identical to previous ones with BI and Merck, involving more mature products and broader discussions across product lines. • Crossix driving commercial growth due to good execution, innovation in audiences, and integration with the data network.

No specific detailed breakdown of product segments with revenue contribution percentages provided in the transcript. Total revenue for the quarter was $699 million.

• Won't provide further guidance or updates on performance during the quarter unless in a public forum. • Q4 billings driven by a broad base of products. • CVMS ramps proceeding as expected, with predefined multi-year ramps largely going as planned.

• Forward-looking statements subject to various risks and uncertainties, refer to earnings release and Form 10-Q for risks. • Regulatory changes and macroeconomic uncertainties, such as potential impacts from administration changes and their uncertain timelines and implications.

Q: Saket Kalia asked about migration to Vault CRM and CBMS ramps.

A: Peter Gassner discussed benefits of Vault CRM like continuous innovation and a platform for customer-centricity, while Brian Van Wagener said CBMS ramps are proceeding as expected and growth/billings driven by a broad base of products.

Q: Ken Wong asked about MLR Bot interest and monetization.

A: Paul Shawah said there's early interest in MLR Bot, it's a separate license, and they're still working through monetization details.

Q: Joe Vruwink asked about large strategic partnerships in Development Cloud.

A: Peter Gassner said they're similar but not identical to previous ones, with more mature products now available for broader discussions.

Q: Brian Peterson asked about regulatory backdrop and margin upside.

A: Paul Shawah said regulatory changes are early and customers are focused on current work, while Brian Van Wagener discussed margin upside with revenue outperformance and timing of expenses.

Q: Ryan MacDonald asked about Boehringer deal and GenAI impact.

A: Paul Shawah talked about thorough evaluation in Boehringer deal, and Peter Gassner discussed GenAI impacts on margins with MLR Vault likely charged and CRM Vault not charged.

Q: Anne Samuel asked about safety solutions and macro environment.

A: Peter Gassner discussed safety solutions approaching a tipping point and macro environment being settled in, not a new normal yet.

Q: Dave Windley asked about administration changes impact.

A: Brian Van Wagener said significant changes would take years and no near-term impact on business.

Q: Unidentified Analyst asked about Crossix driving commercial growth.

A: Peter Gassner said Crossix's performance due to good execution, innovation, and data network growth.

Q: Gabriela Borges asked about commercial growth and CRM conversions.

A: Paul Shawah talked about stable market and learned migration tooling, and Paul Shawah discussed CRM conversion learnings.

Q: Brent Bracelin asked about top 20 appetite for broader Veeva portfolio.

A: Peter Gassner said more comprehensive dialog in development cloud area, with trust increasing due to delivery.

Q: Stan Berenshteyn asked about Vault CRM and horizontal enterprise apps.

A: Paul Shawah said more top 20 commitments expected with live customers, and no specific timeline for horizontal enterprise app product strategy.

Q: Tyler Radke asked about FY ‘26 guidance.

A: Brian Van Wagener said marginally better visibility but no formal guidance yet, with updated guidance reflecting ~15% subscription growth.

Q: Craig Hettenbach asked about horizontal strategy and margin profile.

A: Peter Gassner said revenue in Life Sciences stays in Life Sciences for investments.

Q: DJ Hynes asked about Salesforce in Life Sciences and TFC impact.

A: Paul Shawah said Salesforce is a primary competitor, and Brian Van Wagener discussed TFC impact on margins.

Q: Jailendra Singh asked about Vault CRM customer type and headcount.

A: Brian Van Wagener said Boehringer Ingelheim is an existing customer, and Brian Van Wagener talked about broad-based headcount investments.

Q: Andrew DeGasperi asked about Vault CRM margin impact and Crossix in direct-to-consumer.

A: Brian Van Wagener said margin impact takes time, and Peter Gassner discussed Crossix's role in direct-to-consumer and commercial cloud strength.

Q: David Larsen asked about CRO challenges and Vault CRM wins.

A: Peter Gassner said Veeva insulated from CRO study ups and downs, and Paul Shawah talked about Vault CRM wins being ~13 and pre-commercial companies.

Q: Charles Rhyee asked about Crossix growth and re-platforming.

A: Brian Van Wagener said no specific growth rates, and Peter Gassner talked about comfortable re-platforming of Vault CRM.

Q: Brad Sills asked about R&D spending and re-platforming.

A: Peter Gassner said R&D environment stabilized, and re-platforming ready with live customers and new applications.

Q: Steven Valiquette asked about clinical trial trends and CRO revenue.

A: Paul Shawah said Veeva pays attention to clinical trial trends but doesn't over-index on single metrics, and Brian Van Wagener said CRO revenue remains ~5% of total revenue.