VEEV • 10-Q • Q4 2025 • Positive

Veeva's Cloud Dominance Grows as Life Sciences Digital Transformation Accelerates

June 02, 2025 • 1 min read

TL;DR

Veeva Systems delivered exceptional Q4 results with revenue growing 25% YoY to $875M, demonstrating accelerating momentum in life sciences digital transformation. The company's strategic expansion beyond its core CRM offering into R&D and clinical solutions is driving margin expansion, with operating margins improving 280bps to 38.5%. Customer count grew 18% to over 1,350 enterprise clients while maintaining a 98% retention rate. Management raised FY26 guidance citing strong demand for newer pro

Financial Performance Overview: Revenue growth accelerated to 25% YoY, marking the fourth consecutive quarter of acceleration. Subscription revenue grew 28% YoY to $698M while professional services revenue increased 15% to $177M. Operating margins expanded 280bps YoY to 38.5% driven by improved product mix and operational leverage. Gross margins reached 74.8%, up 150bps YoY, reflecting increasing scale of cloud operations and higher-margin product mix.
Strategic Initiatives and Operational Changes: Management is accelerating investment in R&D (up 32% YoY) to expand the Veeva Development Cloud platform. The company launched three major product innovations including Vault Safety.AI and enhanced CDMS capabilities. Strategic focus on expanding wallet share within top 50 pharma accounts is showing results with average revenue per enterprise customer up 22% YoY. New go-to-market initiatives targeting mid-market life sciences companies launched.
Market Position and Competitive Dynamics: Veeva maintained its dominant position in life sciences with 80%+ market share in commercial cloud. Customer count grew 18% YoY while maintaining 98% retention rate. The company is seeing limited impact from Microsoft and Oracle's competing offerings, with win rates remaining above 85%. TAM expansion into quality management and regulatory operations represents $4B+ opportunity. Cross-sell momentum accelerating with 65% of enterprise customers now using 4+ products.
Operational Efficiency and Profitability: Gross margin expansion of 150bps reflects improved cloud infrastructure utilization and higher subscription mix. Operating leverage evident in R&D and G&A where expenses grew slower than revenue. Sales efficiency metrics improved with CAC payback period decreasing to 11 months from 13 months last year. Professional services margins expanded 200bps as delivery automation initiatives show results.
Growth Catalysts and Material Risks: Near-term growth drivers include Vault Safety.AI adoption, expanded CDMS capabilities, and continued commercial cloud expansion. Medium-term catalysts include quality management penetration and regulatory operations automation. Key risks include life sciences R&D spending slowdown, increased competition in clinical trials space, and potential pricing pressure in core CRM business. Management expects 20%+ growth through FY26 driven by product expansion and deeper customer penetration.

Revenue

$875M ( YoY, QoQ)

↑ +25%

Rd Spend

$175M ( YoY) representing of revenue

↑ +32%

Net Income

$198M ( YoY)

↑ +32%

Gross Margin

(+150bps YoY)

↑ 74.8%

Free Cash Flow

$245M ( YoY), conversion rate

↑ +28%

Operating Margin

(+280bps YoY)

↑ 38.5%

Growth Indicators

$3.2B ( YoY)

↑ +27%

Customer Count ↑1,350+ enterprise customers (+18% YoY)

Retention Metrics ↑98% retention rate, 120% net revenue retention

Key Risks

Life sciences R&D spending cyclicality could impact growth trajectory
Increasing competition from Microsoft and Oracle in clinical trials space
Customer concentration with top 20 accounts representing 45% of revenue
Regulatory changes affecting drug development processes

Key Opportunities

Quality management and regulatory operations TAM expansion ($4B+ opportunity)
AI/ML capabilities driving new use cases and pricing power
Geographic expansion in Asia Pacific life sciences market
Cross-sell momentum in development cloud portfolio

Bottom Line

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