Veeva Systems Inc. 2027 Q2 Earnings Call

Gunnar, please go ahead. Good afternoon, and welcome to Veeva's fiscal 2027 second quarter earnings conference call for the quarter ended July 31st, 2026.

As a reminder, we posted prepared remarks on Veeva's investor relations website just after 1:00 P.M. Pacific today. We hope you've had a chance to read them before the call. Today's call will be used primarily for Q&A. With me today for Q&A are Peter Gassner, our chief executive officer, Paul Shawah, EVP, strategy, and Brian Van Wagener, our chief financial officer. During this call, we may make forward-looking statements regarding trends or strategies and the anticipated performance of the business, including guidance regarding future financial results. These forward-looking statements will be based on our current views and expectations and are subject to various risks and uncertainties. Our actual results may differ materially.

Please refer to the risks listed in our earnings release and the risk factors included in our most recent filing on Form 10-Q. Forward-looking statements made during the call are being made as of today, August 26th, 2026, based on the facts available to us today. If this call is replayed or reviewed after today, the information presented during the call may not contain current or accurate information. Veeva disclaims any obligation to update or revise any forward-looking statement. We may discuss guidance on today's call, but we will not provide any further guidance or updates on our performance during the quarter unless we do so in a public forum.

On the call, we may also discuss certain non-GAAP metrics that we believe aid in the understanding of our financial results. A reconciliation to comparable GAAP metrics can be found in today's earnings release and in the supplemental investor presentation, both of which are available on our website. With that, thank you for joining us, and I'll turn the call over to Peter.

Thank you, Gunnar, and welcome everyone to the call. Q2 was another strong quarter, delivering results ahead of our guidance. Total revenue in the quarter was $928 million, with non-GAAP operating income of $416 million. Execution was exceptional this quarter as we made strong progress in many key areas. It was our best CRM quarter ever. We also are accelerating rapidly in AI overall, and especially with Veeva Falcon. Our focused acquisition strategy is working, bringing great people and capabilities to Veeva. It's an exciting time. AI is enabling the next big chapter for Veeva and the industry. We'll now open up the call to your questions.

I'll take that one. Yeah, there are a lot of things going on, right? The funding environment is relatively good. There's a lot of changes with AI and sciences moving ahead, so there's a lot of priorities for the customers. When that happens, they can't do all things at once, and they generally try to pick some things that they can do and that are high priority. Your question was related to Falcon. I think Falcon has a lot of interest right now because it's very clear that that's high priority. Quick cost savings and compliance and efficiency. That's high on everybody's priority. I think there's a lot of interest in Falcon. We're the rate limiter right now. We have to get that product ready, start working with the early adopters, but interest in Falcon is very high.

Yes, it is a major change for Veeva. Falcon is agentic labor. That's something different than we've done before. We've done cloud software, data consulting. Now we have this fourth thing, agentic labor. It is transforming the discussion. There's two different things you could do with Veeva. You can do some agentic labor, you can do core applications. That was never the case before. The important point is Veeva, it fits very well. It's a structural advantage for Veeva to both have the agentic labor across multiple areas in life sciences, and have the core applications across multiple of those areas in life sciences. That's why I feel like we're very well-positioned, and the conversations are very rich. Gosh, I just hope we got to get that product going as soon as we can.

If we had our early adopters live and successful right now, I don't want it be hyperbole, but Falcon would be flying off the shelf if that was the case. One thing to know is there's not an extensive Falcon implementation. There's not a data mapping from one system to the other. There's not a cut-over process. There's not ETL to do. This implementation, the full value is faster with Falcon, but the tech underneath it is newer, and we have to get our motion down there. If you can tell, I hope you can tell, I'm pretty excited about Falcon. I really think we're onto something.