Q4 2026 Earnings Call Transcript

Good afternoon, and welcome to Veeva's Fiscal 2026 Fourth Quarter and Full Year Earnings Conference Call for the quarter and fiscal year ended January 31, 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 have 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, our 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, March 4, 2026, based on the facts available to us today. If this call is replayed or viewed 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 statements.

We may discuss our 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.

I'll turn the call over to Peter.

Thank you, Gunnar, and welcome, everyone, to the call. We had a strong finish to the year, delivering results ahead of our guidance. Total revenue in the quarter was $836 million with non-GAAP operating income of $366 million. For the year, total revenue was $3.195 billion and non-GAAP operating income was $1.434 billion. 2025 was an outstanding year for Veeva.

We surpassed our $3 billion revenue run rate goal and deepened our strategic partnerships across the life sciences industry through innovation and customer success. We'll now open up for your questions.

[Operator Instructions] Your first question is from Joe Vruwink with Baird.

I wanted to ask if Veeva is starting to see some programs funded maybe in the name of AI readiness. I would imagine for a top 20 to commit to Veeva in any of the R&D areas, RTSM, quality, safety, it would seem you're going eyes wide open into really viewing Veeva as a future foundation for everything AI related that is to come. And so I'm wondering if there's an AI influence that you're starting to see that's contributing to the strong demand here at year-end.

This is Peter. I wouldn't say that's a broad theme. There are cases, and it varies by area. More of the theme is, hey, we need core systems that will scale, either their existing systems are aging.

So we talked about a top 20 safety win. There, their existing systems, because they were doing other things over the past years and just lots of deferred maintenance and that was going to become a critical risk for the company, so they have to get that in. There are sometimes where it will help our data business. They're trying to clean up their clean reference data because they know AI is not going to work because, okay, garbage in, garbage out.

So there's a little bit of that, but more it's just modernizing, getting rid of legacy and looking for increased automation. AI is -- really, the goal there is automation, right? That's the goal. But AI is not the only way you do automation.

Part of it is you do automation through a system to have clean workflow. So it's a driver, but I wouldn't say it's a major driver.

Okay. Great. On CRM, Brian made, I thought, interesting comments at a January conference around how that business is going to become about 10% of Veeva in 2030, so call it a $600 million run rate. I think that's a bigger number than many would have penciled in at the start of events and transitions happening there.

Are there things like service center or campaign manager that are adding incrementally to the forecast? And how would you think about those increments rolling in versus the timing of what you know will roll off in probably that '28 and '29 time frame?

Yes, Joe, that's right. We did talk about CRM being roughly 20% of our total revenue today, going to about 10% by the 2030 time frame. And that's primarily driven by a lot of the growth that you're going to see. We have a broad, diverse business that's growing along multiple dimensions.

So -- and CRM is relatively stable, so we project CRM will be a nice stable business for us over the long term. And that includes, to your question, some of the add-on products that you've mentioned like Campaign Manager and additional revenue from Service Center and other things that we may create over time, we may develop over time. But yes, that's -- think about that as the total kind of CRM seat-based revenue in 2030.

I'll just put a few puts and takes on that. The add-on products, Patient CRM, Service Center, Campaign Manager, those can grow. And also, there are some puts and takes in the core CRM. So a couple of the large top 20, for example, were on IQVIA.

Okay. Those are going on over to Veeva. We didn't have those before. Some med tech companies, yes, and Salesforce is getting a few of those as well.

So there's puts and -- there's -- we might focus on the takes, which -- but there's puts and takes in that area and then the add-ons will grow.

Your next question is from Saket Kalia with Barclays.

Okay. Great. Can you hear me okay?

Yes.

Nice finish to the year. Peter, maybe if I could start with you, just to stay on the AI theme a little bit. You spend a lot of time with customers on both the R&D and commercial sides of the house. What are they saying about AI adoption right now within the life sciences industry?

Maybe what role do they see the big LLM providers playing? And what role do they see Veeva playing, if that makes sense?

Yes. And Saket, you're right. I do spend a lot of time with customers. I was just reflecting when you asked that.

It's one of the best parts of my day. And every day, at least I'm talking to one customer or another. It might be an individual person by text or a conference call or e-mail or whatever it is. So what -- first of all, there's extreme interest in AI because they're getting pressured by their bosses and their peers, right, to be, okay, how do we get more efficient with AI because it's a new computing paradigm.

And I would say they bucket into 3 -- maybe 4 types of people that might be able to help them. One is the infrastructure providers, the LLM providers themselves, Anthropic, OpenAI, Microsoft in that camp, Amazon, NVIDIA, those types of things, what -- how can they be leveraged there? And then they would look for point solution providers. There's a specialized group of people in the specialized department, and they can do this proof of concept or maybe you scale it for me here.

And then there's their own employees doing custom software, and then there's system integrators. And then you get the core application people like Veeva, like Workday, like SAP. And so when they're generally talking to us, they want us to provide more AI solutions that are tightly integrated with their core systems because they trust Veeva, and they know we deliver quality and really know when we say something is going to work, it's going to work, right, because our reputation is on the line versus a small start-up can just say whatever they want, right? It doesn't really matter.

So they want us to get in there and make it work, and they want us always to go faster. So I feel that we have -- our customers really want us to win in AI applications. And so we have a right to win, and we just have to execute. So it's pretty exciting.

And then some of them have projects going with us, for example, in the promotional materials management area, and they're pretty excited like that I can have a winning AI application that really works and is really durable and is from Veeva because they've been -- a lot of them have been burned on a lot of experiments, but it's not easy for customers to admit failed experiments because that's just the dynamics. You don't like to admit that. And failed is too hard of a word. Sometimes the experiment doesn't work out, but it's not a failure.

You got a lot of learnings. But the experiments that can actually scale, they're rare so far, and they know Veeva's -- we won't do things unless we can scale them.

That's great and very, very helpful perspective, Peter. Brian, maybe for my follow-up for you, I was wondering if we could talk about the Crossix business here a little bit in fiscal '27. Obviously, you had a fantastic year in '26. So should we think about this year as a tough comp year? Or do you see some of the same trends continuing into '27?

Saket, I think both of those can be true. Crossix had an outstanding year last year, and it certainly exceeded our expectations. We're starting to lap some of those in Q4 and certainly into Q1. You'll recall that was the major driver of outperformance in Q1 of last year. So the compares do get tougher, but that is a business that's executing really well with a long runway for growth.

And so we continue to expect very healthy growth from the Crossix team.

Your next question is from Brian Peterson with Raymond James.

Congrats on the very strong quarter. So Brian, I wanted to start with you. I've got the question. Any help on bridging the gap between the 13% growth for subscription in fiscal year 2027 versus the 11% growth in normalized billings?

For FY '27?

Yes, for fiscal year '27.

Yes. I think the main thing as you think about subs growth in '27, Brian, is we've got some -- we just talked about Crossix. So we've got a little bit of slowing growth in commercial, very healthy growth but just as Crossix laps some of those harder compares, and we've talked about CRM being a more mature business. In R&D, you'll see that the growth rate shifts a bit, and that's really driven by the shift from growth coming from our mature products like eTMF to the really big new products like RTSM and EDC and safety and LIMS.

And so those products are very large and growing fast but still early and getting to scale. And so you're primarily seeing the effect of that mix shift in the delta there between subs and billings. But it's not a major effect, and we remain very pleased with the progress and trajectory and the path towards our 2030 goals.

Got it. And maybe a follow-up for Paul. I know you have 125-plus customers live on Vault CRM. I'd love to understand, for that customer cohort and even some that are looking at the transition, what are you seeing in terms of pipeline development of some of the other products and would be curious about that cross-sell opportunity.

Yes, Brian, you're right. In the prepared remarks, I think we said 125-plus live. Actually, it's -- the actual number is closer to 140. So we're doing just really, really well in Vault CRM. Pleased with our execution from the very largest of companies all the way to the very smallest and pretty much across every region.

And yes, what we are seeing is, in some cases, when those migrations happen, it creates an opportunity to add a new product that they didn't have before. We've seen that in examples with Network and OpenData, a couple of the top 20s that we've announced. As they went to Vault CRM, they expanded globally with Network and OpenData. And then also with some of the newer add-ons, some of the small and midsized companies, they're adopting some of the new products that we have.

Like they're turning on Service Center. They're turning on Campaign Manager. So it's absolutely an opportunity for us to pull a lot of that through, and I expect that's going to continue over time.

Your next question is from Alexei Gogolev with JPMorgan.

Peter, building on the AI theme, Veeva clearly has mission-critical software, strong network effect, proprietary data and domain expertise. How do your customers rank those key elements when they consider Veeva's right to win against those LLM infrastructure peers?

Yes. I'm not sure how they would really rank that. I think they would kind of view it as altogether. Veeva understands our systems.

They understand our processes. They understand our technology, but -- and more so, many of them think of Veeva as a company that's delivered on everything we've said we would do over the last 15 years. So the trust is there. And it's not just buying trust.

It's earned trust. We're a company that really -- we really take customer success seriously. So when we commit to do something, we're going to do it. And we won't get a sale by committing to something we can't do.

That's what we don't want to do. So I would say trust is the #1. And obviously, they know that we know our business, and we're tech experts. So that's kind of how they see it. It's pretty straightforward.

And Brian, Appreciate that you and Peter have confirmed the target of top 20 that you hope will switch to Vault CRM. Do you still think you may get the commitment from the remaining 4 customers by mid of calendar '26? And also related to the customer topic, it looks like customer growth has accelerated to 5%. What drove that?

Yes. So we -- as it relates to top 20, so most of the decisions have been made. There's a handful, roughly 5 that are left. We do expect -- we've said roughly 14 of 20 where we expect it will end up to be, and we still -- we're on track for that.

Nothing has changed there. Maybe it's 13, maybe it's 15, but we think 14 is closest to the pin. Those decisions will play out this year. Some of them will happen over the next couple of months.

There may be a few that go later in the year for no other reason than company-specific things. Like there's a couple of customers that have some launches that are upcoming, so they're obviously prioritizing that over anything else. So yes, we're on track in top 20. We think it will end up at roughly 14 of top 20. We're doing well there.

And then I think the second part of your question was around the growth rate in customer count. Did I hear that correctly? I think so. I think you asked about the 5% growth in customer count.

And I think what you're seeing there is just really strong execution from the team. We talked over the past few cycles about the progress we're making in the basics area, which is meant for some of the small emerging biotechs, and we've seen really good execution with that team in both commercial and R&D.

Your next question is from Ken Wong with Oppenheimer & Co.

Hoi-Fung Wong: I wanted to maybe touch on professional services. It looks like there was some outperformance there. Can you talk about what segment saw that outperformance? And then as we think about fiscal '27, should we assume the gross margin profile of that services pipeline is consistent with '26?

Ken, this is Brian. I'll pick that one up. So yes, very strong execution from the team in FY '26 and going into FY '27 on services. The main driver of growth there continues to be business consulting but also the R&D team growing very healthily as well as other areas like our digital events business and commercial as well.

We've had some of the uptick that we expected in CRM migration activity, and so you see that reflected in the top line. And we've been hiring to support that demand. You can see that in the margin profile over Q3 and Q4 continuing to run very profitably and expect that to continue over the coming year.

Hoi-Fung Wong: Got it. And then just a quick follow-up on the -- you mentioned on billings, no longer giving the quarterly guide. I guess as we think about our models, is it at least loosely fair to assume typical seasonality that we've seen these last few years?

Yes. Thanks for that question, Ken. So yes, our plan for the coming years, we'll continue to provide annual normalized billings. We'll update that on a quarterly basis alongside our other metrics.

You've heard us say for several cycles, we think that's the better indicator of the underlying momentum of the business. So we're not going to give quarterly guidance, but with that said, we do expect the seasonality to be directionally similar to last year.

Your next question is from Stan Berenshteyn with Wells Fargo Securities.

So in the prepared remarks, you mentioned a top 20 standardizing on RTSM. I'm curious, will RTSM have a similar ramp to EDC? Or is there a different consideration there? And I want to understand the selling motion here. Was this a competitive takeaway? Does this top 20 standardize on any other major solutions for you?

Let's see. The selling motion there and the ramping, these are long-term ramping deals with RTSM. RTSM is a significant product area. You could think of it as significant as the EDC area.

So it's -- because it's very critical in what it does, shipping around drug supplies and blinded drug supplies to research sites all around the world and randomizing the patients into the right cohorts. This is extremely detailed and critical work. The selling motion there is different than many of other products because our -- especially the top 20s, they buy the RTSM solutions and services almost on a study-by-study or therapeutic-area-by-therapeutic-area basis. And we think Veeva can be just the enterprise solution for that.

We have the scale to do that. We're not a small stand-alone RTSM vendor. We're a big Veeva that has a lot of scale and flex, but we have an outstanding stand-alone RTSM product. It's the best product in the business.

So now you can standardize on Veeva and get a lot of synergies. So the selling motion is often showing people that you don't have to do it the old way. You don't have to have an RTSM procurement department in your company. So it's a different selling motion.

You asked if the customer -- about other products that the customer has. The customer has been a long-standing clinical customer. They did actually buy some other clinical products from us in the clinical operations area at the same time as this. But these are -- I wouldn't say they're completely separate sales cycles, but it definitely -- this was an RTSM sales cycle, and we're really happy with that.

It's a milestone deal for Veeva and for the industry. And I hope to have more of those over the next year or 2. Now our focus right there in the RTSM is going to be delivering on that promise for the customers so that they see these synergies of standardizing. That's #1 thing we got to do.

And then a quick follow-up on AI. So obviously, some of your clients are helping solutions that maybe are not widely available yet. Can you maybe speak to early proof points that you're seeing on AI agents that, I guess, you're planning to roll out over the course of the year? Are there any sort of ROI or tidbits from clients that you're hearing that you can kind of comment on ahead of these releases?

Yes. The one that's farthest along, and we have multiple projects underway, is the commercial content area. And that -- the ROI is just very clear. It's faster content, lower cost to create that content, and that's what it's all about.

Lower cost to create that content, I won't quote specific numbers, but that's pretty clear to quantify. Faster content just means better launches. That means that drives the top line before the patent on that product expires. So I get asked by that -- by customers all the time.

They know in the age of really omni-channel experience for their customers, which are patients and health care providers, omni-channel experience that includes AI doctors and large language models, the speed that you can get your content out there in a compliant way is just going to be critical. So the old way of approving content is just not going to suffice anymore. You need to approve it. You can't do this -- it's not legal to just throw content out there that's not compliant.

They need to do it. But the old way of doing it is just not going to suffice, so there's intense interest in that area.

Your next question is from Rishi Jaluria with RBC.

Nice to see continued momentum in the business. Two questions. Maybe first, would love to start out by exploring a little bit more. Obviously, Anthropic made a lot of noise when they launched Claude for Life Sciences and signed up a lot of deals and maybe lost in that was Veeva is an enabling and launch partner of Claude for Life Sciences.

So Peter, how should we be thinking about the opportunity for Veeva to work with Anthropic, OpenAI, all the different kind of model providers out there, provide your domain expertise, provide the workflow expertise and kind of have a rising tide lifts all boats situation rather than obviously the current market view of it being more cannibalistic? And then I got a quick follow-up.

Yes. I certainly don't view it being cannibalistic for Veeva, absolutely not. I mean let me state that clearly. AI is a very positive thing.

So I'll get back to that in a minute. But address the higher level, AI is not replacing software. That's just not happening. And not all software is the same.

I'll make a point on that. So AI, that's not going to replace things like Windows, iOS, Excel or core systems of record like SAP, Workday or Veeva. These core systems, they're essential. And we'll add core AI systems, as will SAP, as will Workday.

And these core systems are going to be used by agents as well as human users. Yes, that's new. But these systems are essential, and they're not going away. But AI is going to enable a lot of new kinds of long-tail software.

It's software could be only used by a few people or a specific software group in a company, company-specific software or types of software that couldn't be done before, self-driving cars and trucks, dramatically better coding tools, better Google search and then in our case, industry-specific AI applications. So we're really in these early days of AI and people get a lot of hyper and they think it's going to play out over 1 or 2 months. It's not. It's going to play out over 10 or 20 years.

Now for Veeva, specifically for Veeva, AI, that's going to help us create and improve our core systems faster than before. So that's where it will help our software development but not at the expense of quality, predictability, regulatory compliance and the real value that customers depend on. Now as it relates to Anthropic or OpenAI and others, that's an engine, and their engine will be used for a lot of things. They will be used by the Veeva applications or by custom applications that customers develop.

So yes, it's good for those large model providers. Now they have to watch their profitability, et cetera, but they're an engine in the new wave of cloud computing. So that's the new AWS, et cetera. So it's a good business there.

But just as AWS itself and also Microsoft Azure, Google Cloud, et cetera, that was very good business for those hyperscalers. But I think what sometimes gets lost, that actually enabled Veeva. You couldn't have built the industry Claude for Life Sciences. You couldn't have built those long tail of applications without those cloud infrastructure providers.

And it's the same way here with these large language models. Veeva could not build the AI applications that we're going to build without these foundational LLMs. So I don't know if I'll use this word correctly. I think the word is symbiotic.

I think so. I'm more of a short -- I'm more of a Hemingway really than anything else, but I think it's very symbiotic. And at times, especially in the early days, it can be chaotic. As people are bumping around, that's okay, but the large -- I should write a poem, I guess.

But the large patterns are very clear, and it will be very symbiotic.

Very helpful. And then just quickly as a follow-up on that kind of thought experiment, Peter, and looking forward to a collection of poems soon after this. But as we think about -- you talked about using AI for automating a lot within Veeva. Maybe building on top of that, given how mission-critical this is and maybe how much it can be tied not just to better revenue outcomes but more importantly, better patient and better health care outcomes and better societal outcomes, do you see an opportunity to not just automate and drive faster time to value and efficiency but even leveraging AI within the Veeva platform to allow for better drug development, safer drugs out of the market, basically better outcomes rather than just faster time to value?

Yes. Excellent question, and I hope I don't go too long on this because I have a real passion for this area. After working 18 years in this industry, I really know about it, I feel. And I really care about the people in it, and I see how it impacts patients.

It's a real thing. Drug discovery is one thing, and there's a lot of focus on that. And yes, that will get faster, but that's not the real bottleneck. The real bottleneck is the clinical trial, the experiment that's done in the human.

And we're always going to have to do those experiments in the human, and the human biology runs at the same speed. So that always has to be done, and the bottleneck now is finding the patients around the world that can get in those trials. So that's one. But the biggest bottleneck by far is there's a patient somewhere out there in the world.

They're diagnosed with something by a doctor. How long did it take them to get diagnosed? And when did they get the right medicine that will best treat them? That's where 90% of the value in life sciences is lost, because of that impediment, the basics of is the patient informed.

Can they get to the right doctor? Is the right doctor informed? Is the payer informed? It's -- that's where 90% of the value is lost.

And I said value is lost, but on the other side, there's a lot of people who don't get treated correctly or timely around the world. And that affects productivity. That affects their family. And some of -- not all of these people are in their 90s.

Some of them are young parents or just young children. If you saw our partnership with BioMarin and you look at what they're doing, they're treating genetic diseases primarily in young and disadvantaged children who have parents and brothers and sisters. So this is really important for us, and AI can definitely, definitely, definitely bridge that gap. AI doctors and large language models can help bridge that gap between doctors and patients, so maybe that 90% inefficiency goes down to 50%, and that will be a tremendous boom.

And yes, Veeva will definitely play a part in that by connecting our customers, the industry to its external ecosystem. And its external ecosystems are clinical researchers, patients and doctors and regulators. And the industry is not well connected, and AI is going to provide a better method to do that. So I think what people are missing is the benefit of AI over the next 10, 20 years on the life sciences industry because we'll be able to treat more patients faster, and that will transfer into our revenue and societal benefits.

Your next question is from Jailendra Singh with Truist Securities.

Congrats on a strong quarter. I want to talk about your comment that guidance assumes no significant changes in the macro environment. Just curious with pharma companies having some clarity on MFN, tariff and with some deals with current administration over the last 6 months or so. Why you don't think trends could start moving in the right direction as these large pharma companies now have some more clarity?

Are you just being more prudent in your guidance? Or do you still see some cost trends pharma clients have to navigate?

Yes, Jailendra, the uncertainty has been out there for some time. We've been tracking it. The industry has been tracking it. You're right.

There has been a trend towards things becoming more certain across a number of different dimensions, but I think there's some cautious optimism about what's happening. Certainty is always better than uncertainty. And I think in a number of areas, things have become more certain. I think that's generally good for the industry.

But we're in conversations with our customers. We know how they're thinking. We know how they're planning for the next year, so we provide guidance that's best in line what we anticipate the projects that they'll be focused on and less related to the specific ups and downs of the macro environment because they're -- over the short term, they're generally less influenced by that. They're more influenced by these longer planning cycles, so we do our best to incorporate kind of the discussions and conversations in the guidance more so than the overall macro environment.

Got it. And a quick follow-up on the CRM side. You recently moved the CRM end of support date from September of 2030 to December '29. What were the key drivers there? Are you still contractually paying Salesforce through 2030?

And then related to that, I mean, you guys talked about a lot of other wins outside of top 20. Can you give us some number around your -- what is your win rate in that midsized pharma segment? Is it better than 70% lower? Can you give some color about the midsized pharma, how fast that's moving on CRM?

Yes. So the drivers, you're right. We moved the date to December of '29. It used to be roughly September of 2030. So we pulled it in about 8 or 9 months. The reason we did that is one is Vault CRM is going well.

I mentioned earlier, we're close to 140 customers live on Vault CRM. The momentum there is fantastic. The product is actually better than Veeva CRM and the migrations are going well. So we're executing well there.

And we don't have any customers with projects planned into that 2030 time frame, so what we want to do -- the further you get out, there's more uncertainty. So what we want to do is make sure there's no stragglers that go into 2030. So that was the intent there, and we think that's good for the industry and good for customers. You also asked about the royalty payments to Salesforce, and those will wind down as customers roll off of Salesforce. So once everybody is off, then those payments will stop.

And then I think you had -- a last question, I think, was about win rates and win rates specifically outside of the top 20. We spent a lot of time talking about top 20. Outside of top 20, we expect the win rates to be even higher than inside of top 20, mainly because those companies, they want a product that they know will work. They want a trusted partner, a strategic partner, somebody who's innovating and actually delivering agentic CRM today. This -- that was our promise, was that our customers can innovate, get to CRM, get to agentic CRM fast, and now it's available with Veeva. So I think it's a big advantage for Veeva with those small and midsized companies just going with somebody that they trust and that they know will work.

Your next question is from Dylan Becker with William Blair.

Maybe, Peter, sticking with the AI theme and topic, you kind of called out the value of platforms versus point solutions. I wonder -- and it kind of ties into trust, I guess, as well, too. But I wonder how you kind of delineate between those and how you think about your ability serving kind of the end-to-end workflow across the industry to maybe help solve the opaqueness or the uncertainty around the perception of AI and how that relates to maybe your ability to kind of quantify the value relative to a point solution that's maybe looking at the market, if that makes sense, and maybe how that kind of ties into your ability to -- as a right to win, if you will, in that intelligence layer.

Yes. I would say trust certainly has something to do with it. So we have deep customer relationships. We have the trust of the customers so we can get the requirements quickly.

But it's also just a skill and an operating model. So we have the skills that know about the industry and have the operating model of discipline and pricing and account management, et cetera. And then I always view Veeva, we're developing pieces of a puzzle that the customers may purchase and they put in. But also and sometimes not as relevant to the customers, we're developing a plan and continually maintaining a plan about how the puzzle pieces fit together.

So every time they get more Veeva pieces, it more fits together in their puzzle. Let's say they're doing something with us in safety and they start doing an AI solution with us in safety. And 2 years from now, they go with us in clinical data management, and a year later, they put in an AI solution for clinical data management. Well, that AI solution is going to work with their safety solution pretty much out of the box.

And that's a benefit they never planned for they're going to get. So I think customers start to see that it kind of fits together with Veeva. I think the -- way back in the day, you saw this with Microsoft on the desktop, too. Way back in the day, they start to see, oh, it kind of fits together with Microsoft.

Microsoft will take responsibility for fitting things together, and there's value in that alignment. That's our right to win. And what gives us the ability to execute is just our operating model and our discipline for making great software.

Very helpful. And then I'm not sure if this is maybe for Paul or Brian here as well, but I think there were comments in the prepared remarks as well, too, around the opportunity to maybe lean more aggressively into the CRO channel. This might be a little bit more down market. It might be tied to Veeva Basics.

But any kind of color on what you're seeing with traction and adoption of kind of bundling more services and software to tie into kind of Peter's point right there and maybe how you can kind of leverage that and lean more into the enterprise segment if that is tailored down market today?

Yes. I'll take that one. This is Peter. This is about the CRO or contract research organization basically using them as a channel for what we call the study-by-study business.

So when a small biotech -- usually, when they run a clinical trial, they will get those services from a contract research organization. And with those clinical services, the CRO will provide technology as well. And so far, we have not participated too much in that. The CROs have had their established patterns, and they've used a different variety of vendors and some homegrown things to provide to their customers.

But we're putting an effort now, and we're making -- starting to make progress where they would offer the Veeva technology as they would OEM the Veeva technology to their customers for that study. And sometimes this can be significant, right? It's not unheard of for this technology if a lot of it is from Veeva. On a big study, that might be $500,000. That might be $1 million.

And there's a lot of studies that start every year. So this can be a very -- the study-by-study business internally at Veeva, we know that can be a $1 billion business for a couple of reasons, the breadth of products we have. So the EDC is sold study by study. The RTSM's sold study by study.

The eCOA's sold study by study. Those are 3 very, very big product areas. So that's what we're talking about there. It's a new -- not new products, although we will adjust our products a little bit for that market.

It's more a new focus on a go-to-market motion and operating model inside of our company.

Your next question is from David Hindley (sic) [ David Windley ]. [Operator Instructions]

So Peter, I wanted to come back to some of your comments on automation. So it seems like to me that, maybe to the point that you also just made around standardizing on, and I'm focused particularly on Development Cloud, should drive a lot of automation. You highlighted that AI is a way to automate but not the only way. I guess I'm wondering if AI is shining a brighter light on the benefits of standardizing on Veeva for that automation.

And in that context, I'm going to ask kind of the flip side of the question, would be why do you -- what's your view of the EDC market, submarket within your Development Cloud portfolio. And why hasn't that been moving in your direction more lately?

Well, let's see. Automate -- well, standardization and standardizing on Veeva, I haven't really seen that as a theme to say, hey, standardizing on Veeva is a way we can accelerate with AI in a few pockets but not as a theme. Now I think that theme is probably coming, but we have to really prove out that Veeva AI is just available this year, right? But once we start really proving out the value and some of these point solutions start not doing so well, et cetera, that's, I think, where it can really accelerate.

When we -- a year from now, 2 years from now, when we have companies thinking -- a big company thinking, "I increased my revenue by $40 million because I lowered the time of drug approvals because the Veeva regulatory solution allowed me to get back faster to the health authorities around the world," that's when things really start coming, so -- but we have to deliver on that. The promise is there, but I think I put in my prepared remarks, I used the words it's hard. This is very hard stuff. It's not simple, and so we have to get it right.

And then -- so you -- I talked about standardization. And then I did not write down the second part of your question. Could you ask that again? I'm sorry, David.

Just the EDC component of standardizing on Development Cloud and I think you've been relatively stable, flat, but that's an area where you could penetrate more top 20s, it would seem.

Yes. I would say, yes, hit a bit of an air pocket there in the EDC, and that's just the random timings of life, I guess. So we certainly hope to make progress there in the coming years. And I think we have a structural advantage because the customers really -- they really want the combined clinical operations and clinical data management to work together, and we announced a real groundbreaking thing on our eSource initiative.

So we have some late adopters there, and they also have other priorities that they have to get after, right? So it's a question of priorities. I think we'll -- arguably, we're the leader now. It's us and Medidata.

Although they do better in the study-by-study area. But I think we're on a path to leadership. I guess that's one high-level thing to know. Our competitive environment has never been stronger, so I can -- I feel like I can see where we're going.

As long as we don't get arrogant, as long as we keep executing, we will complete that vision. But do you complete it -- do you complete that in 5 years, in 7 years? When does the EDC breakthrough come? Does it come in 2 years or 1 year or 4 years?

Those things are hard to predict, David, but I -- we're well set up to get there because we have a structural advantage.

Your next question is from Andrew DeGasperi with BNP Paribas.

I just wanted a sort of a two-part question, if I may, on the Vault CRM, the 10 that you said will stick with Vault CRM. I just wondered how firm are those commitments. I mean we've been hearing some questions from investors that some could still decide to move despite signing with you. And then separately, as the services revenue picks up, it sounds like those are tied to the 2 go-live decisions.

Should we expect that to ramp up this year in fiscal '27 as more of those customers go live? And if so, have you accounted for that in the guidance?

Yes. I'll take the first part of that question, and I'll leave the services revenue part of it to Brian. So your question is how firm are those commitments. I think with Veeva commitments, they're generally pretty firm.

Nothing is ever set in stone or final, but I feel really confident about the decisions that have already been made. Why? Because we have close to 140 customers live. We have 2 top 20s, big complex companies operating in all of the major markets who are now live on Vault CRM.

So we've proven that this is the fastest path to get to CRM and agentic CRM. So I feel really confident we're executing well. I don't see any risk there. I think actually, there's a greater risk that a customer that decided to do Salesforce and tries to go down the path of a custom build project, a big systems integrator project, I think there's greater risk that those companies see how difficult it is and come back to Veeva.

So I think that's our opportunity over the next few years.

And then, Andrew, on the second question around...

To put a fine point on that -- I'll just put a fine point on that. It's Peter. So those top -- those 10 customers that have picked us, all those projects were started and they're all going. And they're all going to a very stable product that's already live, so I think those are pretty clear.

Now on the other hand, not all of Salesforce projects are going so well, and they're different. So I know of 1 top 20 that has -- I won't say the exact number, but they have a large number of development team contracted in India from a third-party system integrator. They're coding basically a custom solution. And that may work out well or that may not work out well.

And at some point, there may be a new regime in, and they might not want that custom build. So there's a complete difference in certainty. Those Salesforce projects, they might work well. But even the customers, they know it's going on to a speculative product.

That's not the case with Veeva, so it's very different.

And Andrew, I'll jump in quickly. This is Brian. Yes, I think you hit for the cycle with all 3 of us in your question. Nice job. On the services guide, the short answer is yes. The -- we've got top 20 projects at various phases wrapping up, well underway, kicking off over the course of the year, and that's all factored into our guidance for FY '27.

Your next question is from Ryan MacDonald with Needham.

Congrats on the nice quarter. This is Matt Shea on for Ryan. Maybe sticking with the AI theme. You've noted in the past how AI could be a game changer in safety and how you potentially see faster adoption there than quality.

But maybe if we take a step back, could you comment on why you're leaning into agent development and safety given how historically reluctant to change that segment of the market has been? And then do you think these 2 new agents in April can unlock demand? Or do you envision this -- or how do you ultimately envision this market adopting AI?

Yes. Safety momentum, we internally call it the safety surge. We've been winning some deals, and the projects are going well. We had another top 20 win this quarter, and we had our first top 20 go live with Signal and Workbench.

Now in terms of AI, it's pretty clear there in -- there's a lot of human processing of case intake and case narrative generation that's done by people. That's not necessarily that high risk, but it has to be done well. And it's expensive to hire those people, and it's not easy. So in safety, it's just very clear.

It's about replacing that type of labor with automation, with AI software. Now what is risky for the customers or what they would claim is really important is when they switch from their current core safety system to Veeva, that project has to go really well, right? That's not easy to do. So that's more where the risk aversion is.

But I think they're starting to realize if you if you want to have a potential future where you have a great core safety system that has safety AI on top of it and is connected to your other systems in your company, Veeva is the only place you're going to do that unless you're going to build it yourself. I think most people are starting also to realize now that it's not that easy to build and maintain these things themselves. So that's kind of what's leaning into our favor on the AI. Now of course, we have to deliver it.

But what does make that market slow is people are very reluctant to change their core safety database because they have to report to health authorities all around the world, and if they can't do that, they have to pull their products off the market. So it's serious. I think that sometimes people don't understand. We're not making systems that help people write better e-mails or better spell checker.

It's a big deal for a pharmaceutical company if your products get pulled off the market. So that's -- these things are very critical.

Your next question is from Adam Hotchkiss with Goldman Sachs.

Two-parter, if I can, just to follow up on Rishi's from earlier. As AI speeds up clinical trial time lines and trial success rates, I'm curious, first, how this dynamic impacts how customers use Veeva's R&D products. And then second, maybe for Brian. I know that pricing models differ within the R&D portfolio. But how could this impact, if at all, customer spend on Veeva?

About AI speeding up clinical trials, I think AI can speed up some maybe in the start-up and in the close down but not that much really. It's still based on the clinical protocol of the medicine, which is based on the time of the human body it takes to deal with that medicine and to prove it out and then the patient recruitment, which I don't think is actually an AI problem, the patient recruitment. So speed it up some but not so much in clinical trials. And then in terms of how -- so I don't think that really impacts their view of the core Veeva systems.

Brian, did you want to follow up on that one?

Yes. I think the second part of the question was around how this can impact spend over time. And Adam, it's still very early there. What we're really focused on is product excellence and customer success right now.

Last year was about putting the foundation in and the platform and the first agents. This year is about rolling out agents in all of our product areas, getting customers live, refining the product, really creating a lot of value. And then I think that we don't really expect it to be a major financial contributor this year. It's more in the out years and still pretty early down that journey.

Your next question is from Craig Hettenbach with Morgan Stanley.

Peter, I wanted to ask the AI question maybe in a different way. If I look at some of the success you've had in the R&D business, the breadth of the product offerings as you continue to layer on new capabilities, being able to bundle those products, offer a platform to customers, when we think about the LLM providers introducing some tools for clinical workflows, how do you think about the customer base if they were to go direct to customer in terms of doing some things piecemeal on that versus working with kind of one large vendor with Veeva? Does that carry over in terms of the AI world, in terms of how the opportunity set may evolve?

I think that's very similar, right? Some people will want to experiment and do solutions on their own and see if they can get that up working in scale. But I don't think the AI vendors are really making industry-specific software applications, right? It takes a lot of dedication and effort to do that.

So I think it's a very symbiotic relationship. Just like the cloud area, yes, Amazon didn't make industry-specific applications either. I don't really see -- why would somebody like Anthropic do that, right? They're going to make broad applications and applications for coding itself, et cetera.

That's what I feel would happen. And this is our domain. We know how to do this stuff. It takes software, data, consulting together.

And so I think it's going to be a very symbiotic relationship.

Our next question is from DJ Hynes with Canaccord Genuity.

Brian, I'm going to take another cut at an AI finance question with you, realizing just how early everything is here. But based on the adoption trends you're seeing, kind of customer willingness to pay, how you're thinking about pricing, do you expect your agentic AI offerings to be immediately accretive to margins? Or will that take time? Like help us think about the kind of the curve to profitability.

You're already at 45% margins. Like how does that ramp happen as the portfolio matures?

DJ, yes, it's a great question. And it is, as you said, still quite early. As we're starting this year, we're really expecting to be using a token-based pricing model, and so that gives us a little bit of predictability around the margin profile. But that may evolve over time.

And it's really more around getting to product excellence and value creation and sort of less about pricing, revenue, exact margin structure. So it's not a material impact on FY '27, and let's see how it plays out in the forward years.

Your next question is from Karl Keirstead with UBS.

Okay. Great. Maybe, Brian, just back to the numbers and the total revenue guide of 13% for fiscal '27. A year ago, you started the total revenue guide at 11%, and you just finished with 16%, a really strong 5 point beat. So as we all assess your 13% starting point for this fiscal year, is there anything about the fiscal '26 5 point outperformance that in retrospect strikes you as somewhat nonrecurring and a reason to be a little bit more cautious in terms of modeling any upside this year?

Karl, the way we think about guidance is giving the best information we've got and calling it based on that. And so as we went into last year, I think we provided that guidance and then had pretty strong outperformance, in particular, out of Crossix. So that was really a major driver of the beat over the course of the year. We do expect to see continued healthy growth out of Crossix.

I think we would be surprised at the same level of outperformance. But our guidance philosophy last year as this year is to give the best information that we've got and to call it closest to the pin. So no change in the approach and not expecting specific outperformance in any area like we saw last year.

Your next question is from Hannah Rudoff with Piper Sandler.

Within Veeva AI, what is the mix of customer adoption you're seeing right now between prepackaged agents that you've built and custom agents that they're building using Veeva AI? And kind of by extension of that, I know you have plans to roll out a lot of the R&D agents this year. Are you seeing any customers that are so eager that they're building out these agents and workflows ahead of you launching them?

Yes. The bulk of it is with our agents that we're designing. So part of it is our -- I guess, our agents are probably a little more robust than our custom tooling right now. But if you look at our agents, there's detailed work in the agents, right?

There's detailed data curation. There's detailed testing pipelines. There's a lot of logic in the agents, right? When we talk about AI agents, there's a lot of logic, specific logic written in our Java code that's hard that needs great product management.

So in general, customers would rather get that solution rather than build that themselves. I think we'll see some adoption in the custom agents around lighter use cases where they're doing little helper applications. And I think that will start, and we'll have a good amount of that in the second half of this year.

Our last question for today will be from Tyler Radke with Citi.

So going to the R&D business, a lot of great top 20 wins. It looks like the revenue outperformance on subscription was a bit stronger than normal. And I guess I'm wondering, are you seeing -- I know you've gotten half -- more than half the questions on AI, but just given the success in migration tools, code completion tools, are you seeing any acceleration in implementation times driven by AI or other things? And just sort of what drove that outperformance, whether it was timing or anything you'd call out?

I'll take that one actually. It was just good execution, and some of the balls bounced our way -- more of the balls bounced our way than bounced against us. So I really appreciate your question about whether implementation time lines are shortening. A couple of things are, I would say, yes, but that's natural as our products get better and our services people get better.

We do have a push on -- a big push on tech enabling our services. That really hasn't borne a lot of fruit just yet, but I do expect it to in the next year or 2. So for example, we're working with a customer where actually they do have -- they don't have Medidata. They have a different EDC system. They've moved on to Veeva.

They want to migrate their studies, and AI is helping us -- will help us do that faster than we could have before. So I think that's not only specific to Veeva. I think system migration is a great use case for AI automation to cut down the time and reduce the cost of system migration, and we'll do our part in that, too, but it's early days.

The Q&A is now finished. I will turn the call back over to CEO Peter Gassner for closing remarks.

Thank you, everyone, for joining the call today, and thank you to our customers for your continued partnership and to the Veeva team for your outstanding work in the quarter and the year. Thank you.

This concludes today's call. Thank you for attending. You may now disconnect.