Veeva Systems (NYSE:VEEV) reported a strong start to the year, with Chief Executive Officer and Co-Founder Peter Gassner saying the company delivered results ahead of guidance as it expands its focus on artificial intelligence for the life sciences industry.
On the earnings call, Gassner said total revenue in the quarter was $883 million, while non-GAAP operating income was $395 million. He said execution remained strong across the business and described the current period as “an exciting time for Veeva and for life sciences overall” as the company pursues what it calls “industry AI.”
Veeva Details Falcon AI Strategy
Much of the call centered on Veeva Falcon, a new AI initiative that Gassner described as a major new area for the company. Responding to a question from Baird analyst Joe Vruwink, Gassner said Falcon represents “the next chapter of Veeva” as the company expands from applications, data and consulting to “software, AI, data, and consulting.”
Gassner said Falcon is focused on the “agent layer,” or what he called “agentic labor,” with AI agents designed to fully replace certain jobs that people previously performed using Veeva applications. He said this is disruptive because it requires Veeva applications to operate effectively in a “headless” manner, with agents acting as users of the company’s systems.
At the same time, Veeva is adding AI agents inside its Vault applications through Vault AI. Gassner said those tools are intended to help human users work more efficiently, while Falcon is aimed at standardized, high-volume tasks in life sciences that AI agents can complete directly.
Gassner cited clinical trial documentation and safety case processing as early targets for Falcon. He said clinical research sites generate large volumes of documents that must be checked for quality, categorized, have metadata extracted and be filed properly. He also pointed to safety cases that require triage, categorization and collection. Regulatory health authority correspondence is another area Veeva plans to address.
Gassner said pricing has not been finalized, but Falcon may be charged by document for clinical documentation work and by case for safety work.
Company Says AI Revenue Will Be Limited Near Term
While Veeva executives emphasized the long-term potential of AI, Chief Financial Officer Brian Van Wagener said AI revenue outside of the company’s recent Ostro acquisition is expected to be “fairly immaterial” this year. He said the focus is currently on getting AI live across customer areas, achieving product excellence and driving customer success.
Van Wagener also said he does not expect AI to have a material impact on margins this year. For Vault AI, he said usage-based token dynamics are understood and included in Veeva’s guidance.
Internally, Van Wagener said Veeva is using AI throughout the company, with the most significant use in product engineering. He said tools such as Claude Code are helping improve efficiency, allowing the company to “hire a little less,” accomplish more and move faster.
R&D, Crossix and Services Show Momentum
Asked about Veeva’s R&D business, Van Wagener said the company was pleased with first-quarter growth across Development Cloud and Quality Cloud. He said several large products remain early in their lifecycle, including eCOA, RTSM, EDC, Safety and LIMS, and that their ongoing scaling is shaping the full-year growth outlook.
Gassner said the Development Cloud pipeline is strong, ranging from smaller biotech customers using Veeva Basics to discussions involving some of the most strategic deals the company has pursued. He said Veeva did not have any particular large top-20 wins in Development Cloud during the quarter, but characterized that as a timing issue.
Crossix also continued to perform well. Paul Shawah, executive vice president of strategy, said the digital market remains healthy as pharmaceutical companies spend more across digital channels. He said Veeva is investing in Crossix product innovation, including measurement for newer channels such as OpenEvidence and Meta, which he said is helping drive share gains.
Van Wagener said Crossix has become a diversified business across measurement and audiences, with no major customer concentration risk that would affect the business over time.
Veeva also reported strength in professional services. Van Wagener said services had a record quarter, with outperformance driven by strong project execution in R&D and business consulting. He cautioned that services revenue should not be viewed as a leading indicator of subscription revenue because much of the work is not tied directly to subscription implementations.
Vault CRM Migration Progress Continues
Shawah said Veeva continues to make progress with Vault CRM. He noted recent global wins with Teva and Merck KGaA, though he clarified that those companies are not included in Veeva’s internally defined top-20 list, which was established about five years ago.
Among that top-20 group, Shawah said Veeva has won 10 decisions so far, Salesforce has won six, and four decisions remain. He said Veeva expects to win the majority of the remaining four decisions. Shawah also said Veeva’s overall win rate this year is above 80%, with more than 150 customers live on Vault CRM and more than 40 migrations completed.
Ostro Acquisition Expected to Add to Commercial Growth
Executives also discussed Veeva’s acquisition of Ostro, which Shawah described as a brand engagement platform for biopharma companies that allows healthcare professionals and patients to ask questions and receive compliant answers quickly. He said Ostro fits into Veeva’s broader commercial strategy as digital channels expand.
Shawah said Ostro can help biopharma companies better understand what healthcare professionals and patients are asking about, contributing to what Veeva calls “Commercial Evidence.” He said that information can help identify barriers to getting medicines to patients.
Van Wagener said Veeva acquired Ostro late in the first quarter and expects it to contribute about $10 million over the remaining three quarters of the year. He said that represents roughly two-thirds of the $15 million increase in commercial subscription revenue guidance.
On margins, Van Wagener said Veeva continues to invest across the business, including in its data network for Data Cloud, Ostro, Falcon and Vault AI. He said the company is comfortable with the efficiency of the business and its guidance for the balance of the year.
About Veeva Systems (NYSE:VEEV)
Veeva Systems (NYSE: VEEV) is a cloud software company that develops industry-specific applications and data solutions for the global life sciences sector. Founded in 2007 and headquartered in Pleasanton, California, Veeva focuses on helping pharmaceutical, biotechnology, medical device and consumer health companies manage regulated content, clinical and regulatory processes, quality systems, and commercial operations in a compliant, cloud-native environment. The company completed its initial public offering in 2013 and has since expanded its product suite and international footprint.
Veeva's product portfolio centers on its Vault platform and related application suites, which provide content and data management, clinical trial and regulatory workflows, quality management, and structured commercial capabilities such as customer relationship management and promotional content management.
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