VEEVA SYSTEMS INC

Veeva Systems Inc. is the leading provider of industry cloud solutions for the global life sciences industry, with offerings spanning cloud software, data, and business consulting designed to meet the unique needs of customers from research and development through commercialization. The company's solutions help life sciences companies develop and bring products to market faster and more efficiently, market and sell more effectively, and maintain compliance with government regulations. Veeva is a Delaware public benefit corporation whose public benefit purpose is to provide products and services intended to help make the industries it serves more productive and to create high-quality employment opportunities in the communities in which it operates.

The markets for Veeva's solutions are global, rapidly evolving, and highly competitive. In new sales cycles, the company generally competes with other cloud-based solutions from providers making applications geared toward the life sciences industry. Veeva's CRM solutions primarily compete with Salesforce, which has developed a life sciences industry-specific CRM application. IQVIA, which historically offered a competitive CRM solution, has licensed its CRM software to Salesforce. Veeva's Data Cloud products and Crossix compete with IQVIA, Ipsos Group S.A., Definitive Health Corp., and smaller data and data analytics providers. IQVIA, Dassault Systèmes, OpenText Corporation, Oracle Corporation, Honeywell International Inc., and other smaller application providers offer applications that compete with certain of Veeva's Development Cloud or Quality Cloud applications. The company believes it generally competes favorably on factors including level of customer satisfaction, regulatory compliance functionality, domain expertise with respect to life sciences, and breadth and depth of solution functionality.

Veeva generates revenue primarily from subscription fees and professional services fees. Subscription revenues consist of fees from customers accessing the company's software and data solutions, while professional services and other revenues consist primarily of fees from implementation services, configuration, managed services, speakers bureau logistics, and the Veeva Business Consulting offering. For the fiscal year ended January 31, 2026, subscription revenues constituted 84% of total revenues and professional services and other revenues constituted 16% of total revenues. The company's industry cloud solutions are grouped into four major product categories: Veeva Development Cloud, Veeva Quality Cloud, Veeva Commercial Cloud, and Veeva Data Cloud. For financial reporting purposes, Commercial Solutions revenues refer to revenues associated with Veeva Commercial Cloud and Veeva Data Cloud solutions, and R&D and Quality Solutions revenues refer to revenues associated with Veeva Development Cloud and Veeva Quality Cloud solutions.

Veeva Development Cloud includes application suites for the clinical, regulatory, and safety functions of life sciences companies, all built on the Veeva Vault platform. This includes Veeva Clinical Platform for advancing clinical trial execution, Veeva Clinical Data Management for designing and running trials, Veeva Safety for proactive patient safety, and Veeva RIM for regulatory information management. Veeva Quality Cloud unifies quality applications, processes, and partners across content management, training, quality assurance, and quality control lab solutions on the Veeva Vault platform, including Veeva QMS and Veeva Quality Docs. Veeva Commercial Cloud comprises software and analytics solutions for sales, marketing, and medical affairs, including Veeva Vault CRM Suite, Veeva Medical, Veeva PromoMats, and Veeva Crossix. Veeva Data Cloud is a modern data platform comprised of connected reference data, deep data, and transaction data, including Veeva OpenData, Veeva Link applications, Veeva Compass, and Veeva HCP Access. Veeva AI adds agentic artificial intelligence to the proprietary Veeva Vault platform and deep, industry-specific agents for Veeva applications.

In the fiscal year ended January 31, 2026, Veeva derived approximately 47% and 53% of its subscription revenues and 45% and 55% of its total revenues from Commercial Solutions and R&D and Quality Solutions, respectively. For the fiscal year ended January 31, 2025, the company derived approximately 48% and 52% of its subscription revenues and 47% and 53% of its total revenues from Commercial Solutions and R&D and Quality Solutions, respectively. Revenues associated with R&D and Quality Solutions are expected to increase as a percentage of both subscription revenues and total revenues in the future. As of January 31, 2026, Veeva served 1,552 customers, compared to 1,477 customers as of January 31, 2025, and 1,432 customers as of January 31, 2024.

On August 13, 2025, Veeva and IQVIA entered into a settlement agreement that resolved all ongoing litigations between the two companies. Under the terms of the settlement agreement, neither party paid damages to the other party and both parties agreed to dismiss with prejudice all claims and counterclaims currently pending. Veeva paid approximately $31 million to certain law firms with which it had entered into partial contingency fee arrangements. In January 2026, Veeva's board of directors authorized a share repurchase program of up to $2 billion of the company's outstanding shares of common stock. During the fiscal year ended January 31, 2026, Veeva repurchased and subsequently retired 801,735 shares of its common stock for an aggregate amount of approximately $180 million. On March 10, 2026, Veeva acquired all outstanding stock of Rise Healthcare Tech, Inc. (Ostro) for approximately $100 million in cash and long-term equity retention grants.

For the fiscal year ended January 31, 2026, Veeva's total revenues were $3,195 million, representing year-over-year growth of 16% compared to total revenues of $2,747 million in the prior fiscal year. Subscription revenues were $2,684 million, growing 17% year-over-year from $2,285 million. Net income was $909 million, compared to $714 million in the prior year. Diluted net income per share was $5.44, compared to $4.32 in the prior year. Gross profit was $2,413 million, with a total gross margin percentage of 76%, compared to $2,047 million and 75% in the prior year. Operating income was $916 million, compared to $691 million in the prior year. Net cash provided by operating activities was $1,415 million, compared to $1,090 million in the prior year.

Veeva's management has not provided specific quantitative revenue, margin, or EPS guidance for the upcoming period in the filing.

A key growth vector for Veeva is the migration of its CRM customers from the legacy Veeva CRM application, built on the Salesforce platform, to Vault CRM applications built on Veeva's own Veeva Vault platform. Veeva CRM will be supported until December 31, 2029. The migration processes are complex and the company cannot be certain it will be successful. Certain customers have chosen, and other customers may in the future choose, to purchase CRM solutions from a competitor, and Salesforce has announced that certain large Veeva CRM customers have committed to purchasing its CRM solutions. A number of Veeva's customers have informed the company of their intent to move to Salesforce as their CRM provider.

Another significant growth vector is the continued expansion of Veeva's R&D and Quality Solutions, which are expected to increase as a percentage of both subscription revenues and total revenues in the future. The company also offers certain of its R&D and Quality Solutions to industries outside the life sciences industry, primarily in North America and Europe. Veeva's newer solutions, including AI technologies, are critical to its continued growth and profitability, though the company cannot be certain that these newer solutions will continue to grow as a percentage of revenues at a pace significant enough to support expected overall growth. The company's growth strategy also includes further expansion of its international operations and worldwide customer base, with customers outside North America accounting for approximately 40% of total revenues in the fiscal year ended January 31, 2026.

Veeva expects its future expenses to increase as it continues to invest in and grow its business. The company expects to incur significant future expenditures related to developing new solutions and enhancing existing solutions, investment in product development teams, data acquisition costs associated with the Veeva Compass offering, costs incurred with the use of large language models associated with the Veeva AI offering, improving technology infrastructure, sales and marketing including expansion of the direct sales organization, expansion of the professional services organization, acquisitions and investments, and general operations. The company expects cost of subscription to increase in absolute dollars in the future due to increased usage of subscription services and continued investment in data solutions, and cost of professional services and other to increase in absolute dollars as the company continues to invest in its services organization. Research and development expenses are expected to increase primarily due to employee compensation-related costs and hosting fees, and sales and marketing expenses are expected to increase primarily due to employee compensation-related costs and increases in marketing program costs related to events. General and administrative expenses are expected to decrease in the next fiscal year due to litigation settlement-related charges.

Veeva expects to expand its facilities capacity in certain field locations during its fiscal year ending January 31, 2027 and may further expand facilities capacity after that date as its employee base grows. The company's products are hosted in data centers located in the United States, the European Union, Japan, South Korea, Singapore, Australia, and Brazil, with products used only within China hosted in data centers located in China. Veeva utilizes third parties to provide computing infrastructure, including Amazon Web Services for Veeva Vault applications and Salesforce for Veeva CRM and certain multichannel CRM applications. The company's agreement with Salesforce expired on September 1, 2025, and during the wind-down period from September 1, 2025 to September 1, 2030, Veeva may not sell applications that utilize the Salesforce platform to new customers, and sales to existing customers may not exceed 150% of the seats in use by each such customer as of September 1, 2025. After September 1, 2030, Veeva will not be able to sell applications that utilize the Salesforce platform to any customers.

In January 2026, Veeva's board of directors authorized a share repurchase program of up to $2 billion of the company's outstanding shares of common stock, with a term of two years. The company does not intend to pay dividends on its capital stock for the foreseeable future. Veeva's research and development expenses were $767 million for the fiscal year ended January 31, 2026, compared to $693 million in the prior year. Capital expenditures, reflected in long-term assets on the cash flow statement, were $29 million for the fiscal year ended January 31, 2026, compared to $21 million in the prior year.

Veeva faces structural headwinds from intense competition, particularly in the CRM market as it transitions customers from the legacy Veeva CRM application to Vault CRM. The company's historic growth rates of total revenues and subscription revenues should not be viewed as indicative of future performance, and revenue growth rates have declined in the past and may decline in the future. Total revenues grew by 16%, 16%, and 10% in fiscal years 2026, 2025, and 2024 respectively, while subscription revenues grew by 17%, 20%, and 10% respectively. Over the longer term, revenue growth rates are likely to fluctuate from year to year and may decline. The company also faces headwinds from uncertain macroeconomic and geopolitical factors, including changes in trade policies and practices, worldwide inflationary pressures, currency exchange fluctuations, changes in interest rates, geopolitical conflicts, and concerns about a possible domestic or global recession.

Management has identified several constraints to the growth plan, including the concentration of revenues within a small number of key customers, with the top 10 customers accounting for 28% of total revenues in each of the fiscal years ended January 31, 2026, 2025, and 2024. The loss of one or more key customers could slow the growth rate of revenues or cause revenues to decline. Nearly all of Veeva's revenues are generated by sales to customers in the life sciences industry, and factors that adversely affect this industry, including regulatory changes, government policies, drug pricing regulation, consolidation of companies within the industry, changes in the funding environment, and changes in market conditions and practices, could also adversely affect the company. The company's sales cycles can be long and unpredictable, often spanning 12 months or longer, and the company has experienced increased scrutiny for certain potential projects, particularly for professional services offerings.

Veeva faces intense competition in the CRM market as it transitions customers from the legacy Veeva CRM application to Vault CRM, with Salesforce having announced that certain large Veeva CRM customers have committed to purchasing its CRM solutions and a number of customers having informed Veeva of their intent to move to Salesforce as their CRM provider. The company's revenues are relatively concentrated, with the top 10 customers accounting for 28% of total revenues in each of the fiscal years ended January 31, 2026, 2025, and 2024. Nearly all revenues are generated from the life sciences industry, exposing the company to risks from regulatory changes including drug pricing reforms in the Inflation Reduction Act, consolidation within the industry, and changes in the funding environment for early-stage life sciences companies. The company relies on third-party providers for computing infrastructure, including Amazon Web Services for Veeva Vault applications and Salesforce for Veeva CRM, and the agreement with Salesforce expired on September 1, 2025, with a wind-down period through September 1, 2030, after which Veeva will not be able to sell applications that utilize the Salesforce platform. The company's subscription agreements are typically for one-year terms, and the EU Data Act, which came into effect September 12, 2025, allows EU customers to cancel their subscriptions without cause.

Management's message emphasizes Veeva's position as the leading provider of industry cloud solutions for the global life sciences industry, with a focus on customer success as a core value that has allowed the company to deepen and expand strategic relationships with customers over time. The filing highlights that total revenues grew 16% to $3,195 million in the fiscal year ended January 31, 2026, subscription revenues grew 17% to $2,684 million, and net income was $909 million. Management notes that revenues associated with R&D and Quality Solutions are expected to increase as a percentage of both subscription revenues and total revenues in the future. The strategic priorities emphasized for the period ahead include the migration of CRM customers from the legacy Veeva CRM application to Vault CRM built on the Veeva Vault platform, continued investment in new solutions including AI technologies, and further expansion of international operations and the worldwide customer base.