Life sciences cloud software provider Veeva Systems (NYSE: VEEV) reported revenue ahead of Wall Street’s expectations in Q2 CY2025, with sales up 16.7% year on year to $789.1 million. Guidance for next quarter’s revenue was better than expected at $791.5 million at the midpoint, 1.7% above analysts’ estimates. Its non-GAAP profit of $1.99 per share was 4.7% above analysts’ consensus estimates.

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StockStory’s Take

Veeva Systems’ second quarter results drew a negative market reaction despite the company beating Wall Street’s expectations on revenue and non-GAAP profit. Management attributed the quarter’s performance to strong execution across its R&D and commercial product lines, including continued momentum in Crossix and Vault CRM. CEO Peter Gassner highlighted the resolution of the long-standing dispute with IQVIA as a major step forward, stating, “We can begin to learn about each other and partner for the benefit of customers.” The team also pointed to broad-based customer adoption and stable demand across its core markets, though some products like Compass faced resistance to change.

Looking ahead, Veeva Systems’ updated guidance reflects management’s optimism around further adoption of its AI-driven solutions and the expanded opportunities unlocked by the IQVIA partnership. CEO Peter Gassner emphasized the company’s structural advantage in embedding AI deeply into its Vault platform, noting that early adopter projects are already underway. While management does not expect material revenue from AI agents in the current year, they view these initiatives as critical to expanding Veeva’s total market opportunity and driving productivity gains for customers over the long term. The company remains focused on delivering value to early users and developing a robust pipeline for future growth.

Key Insights from Management’s Remarks

Management attributed the quarter’s outperformance to the resolution of key commercial barriers, expanded product adoption, and progress in AI integration across the platform.

• IQVIA partnership resolution: The end of Veeva’s dispute with IQVIA removed long-standing restrictions, enabling integration of IQVIA’s industry-leading data into Veeva’s commercial analytics products and opening new partnership possibilities. Gassner described customer reactions as “overwhelmingly positive,” highlighting reduced friction and improved interoperability for joint clients.

• AI integration and platform vision: Veeva accelerated its focus on industry-specific AI agents, with foundational work to embed these capabilities in the Vault platform. Management believes this will create a new layer of automation, allowing customers to build custom agents and benefit from interoperability with other enterprise systems.

• Vault CRM adoption milestones: Two top-20 pharmaceutical customers went live on Vault CRM in major markets, with a total of nine top-20 commitments. EVP Paul Shawah noted that Veeva’s wins are “not equal” to those of its competitors, given faster time to value and ongoing global rollouts, which management views as a key competitive advantage.

• Crossix and commercial suite momentum: The Crossix business continued to drive commercial segment growth, benefiting both from deeper market penetration and the expansion of new measurement and audience products. Management cited increasing market share and product breadth as underlying drivers.

• Business consulting as AI enabler: Management highlighted Veeva Business Consulting as a structural advantage in driving AI adoption, with consulting-led engagements serving as a leading indicator for future AI agent deployments. CEO Gassner emphasized that every AI project requires business process transformation, reinforcing the importance of consulting services.

Drivers of Future Performance

Veeva’s outlook centers on broadening AI-led product adoption, leveraging new partnerships, and maturing recently launched offerings to drive future growth and profitability.

• AI-driven product expansion: Management sees long-term opportunity in embedding AI agents within core applications, supporting automation in clinical, quality, and commercial workflows. Although material AI revenue is not expected in the next two years, these initiatives are set to expand Veeva’s addressable market and drive customer productivity.

• Commercial cloud growth post-IQVIA: The resolution with IQVIA unlocks the ability to fully integrate leading data products into Veeva’s commercial suite, which management expects to enhance stickiness and accelerate customer adoption. This is anticipated to benefit both core CRM and associated products like Nitro and Network.

• Execution risk and customer migration: Management acknowledged that the pace of customer migration to Vault CRM and adoption of new AI features will be gradual, with most migrations expected in 2026-2027. Execution on product maturity and customer success remains a key focus, especially as some customers hesitate to move from legacy systems.

Catalysts in Upcoming Quarters

In the coming quarters, our analysts will closely monitor (1) progress on early AI agent deployments and customer feedback, (2) tangible revenue contribution from the expanded IQVIA partnership and new commercial suite integrations, and (3) the pace of Vault CRM migrations among large pharmaceutical clients. Continued strength in Crossix and the ability to scale business consulting alongside new AI projects will also be important markers of execution.

Veeva Systems currently trades at $277.69, down from $294.12 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).

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