Summary
Veeva reported total revenues of $928.0 million for the fiscal 2027 second quarter, up 17.6% from the prior-year quarter. Subscription revenues came in at $766.8 million, up 16% year over year, and professional services and other revenue also grew. Revenue for the first six months reached $1.81 billion, up 17.0% from the same period a year earlier. Management attributed the subscription gains to expanding use by existing customers and the annual inflation adjustment applied to product prices. The geographic mix of subscription revenue held steady at 60% North America, 29% Europe, and 11% other regions, primarily Asia Pacific. R&D and Quality Solutions remain the larger side of the subscription base and are expected to keep rising as a share of total revenue.
Profitability grew faster than the top line. GAAP gross profit was $695.95 million for the quarter, up 17.2%, while gross margin of 75.0% was down 0.3 percentage points year over year as computing infrastructure, data, and services costs rose. Operating income climbed 40.4% to $275.0 million, pushing operating margin to 29.6%, up 4.8 percentage points. Part of that improvement is a comparison effect, since the prior-year quarter carried $31 million of litigation settlement-related charges that depressed general and administrative expense. Net income was $273.4 million, up 36.5%, and diluted earnings per share of $1.66 rose 39.5%. Stock-based compensation of $136.8 million remains a material non-cash cost. On a non-GAAP basis, operating income was $415.9 million, net income was $387.4 million, and diluted earnings per share was $2.35. Through six months, gross margin of 75.0% was down 1.2 percentage points and operating margin of 30.3% was up 2.5 percentage points.
Cash generation was steady rather than dramatic in the quarter. Operating cash flow was $238.7 million, flat against the prior-year quarter. For the six months, operating cash flow of $1.37 billion was up 22.4%, helped by collections on annual billings and lower cash tax payments. Management notes that the first quarter is seasonally the strongest for collections, so cash flow is expected to be substantially lower in the remaining quarters of the fiscal year. Deferred revenue, current portion only, was $1.31 billion, up 18.3% year over year. Cash, cash equivalents, and short-term investments totaled $7.2 billion as of July 31, 2026, with $102 million of that cash and equivalents held outside the United States. The company repurchased and retired 2,663,443 shares for roughly $467 million during the first six months, and closed acquisitions of Copli and Rise Healthcare Tech, or Ostro.
Guidance points to continued expansion. For the fiscal third quarter ending October 31, 2026, Veeva guides total revenues in a range above the just-reported quarter, non-GAAP operating income of $417 million to $420 million, and non-GAAP diluted earnings per share of $2.33 to $2.34. For the full fiscal year ending January 31, 2027, the company guides total revenues in a range above the first-half run rate, non-GAAP operating income of about $1,640 million, and non-GAAP diluted earnings per share of approximately $9.21. No GAAP targets are given for operating income or earnings per share because items excluded from the non-GAAP measures, such as stock-based compensation, are difficult to estimate.
Product momentum centered on Vault CRM and the newer AI offerings. More than 180 customers are live on Vault CRM, including five top 20 biopharmas, and two top 20 biopharmas plus one large enterprise biopharma committed in August, lifting total top 20 commitments to 12 worldwide. Veeva Falcon, the agentic labor platform for clinical, regulatory, and safety work, has five early adopters and is on track for initial go-lives this year. Veeva Safety passed 100 total customers, and Quality added more than 30 new customers, with 20 or more wins each across QualityDocs, QMS, and Training. The risk list is familiar for this franchise: product performance, availability, security, and privacy problems, competitive pressure, changing customer priorities, life sciences regulatory, funding, or policy shifts, and macro or geopolitical shocks such as trade policy changes, inflation, currency swings, interest rates, and geopolitical conflicts. Hiring and retention of talent also remains a stated risk. Operating margin expansion of this size is flattered by the prior-year litigation charge, so the underlying cost trend is worth watching as headcount and AI investment build.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2027 | Q1 FY2027 | QoQ | Q2 FY2026 | YoY |
|---|---|---|---|---|---|
| Revenue | $928.0M | $882.9M | +5.1% | $789.1M | +17.6% |
| Gross profit | $696.0M | $662.0M | +5.1% | $593.8M | +17.2% |
| Gross margin | 75.0% | 75.0% | +0.0 pp | 75.3% | -0.3 pp |
| Research & development | $222.9M | $208.3M | +7.0% | $192.7M | +15.7% |
| Sales & marketing | $126.7M | $111.1M | +14.0% | $109.4M | +15.8% |
| General & administrative | $71.3M | $69.5M | +2.7% | $95.8M | -25.6% |
| Total operating expenses | $420.9M | $388.9M | +8.2% | $397.9M | +5.8% |
| Operating income (loss) | $275.0M | $273.1M | +0.7% | $195.9M | +40.4% |
| Operating margin | 29.6% | 30.9% | -1.3 pp | 24.8% | +4.8 pp |
| Net income (loss) | $273.4M | $260.9M | +4.8% | $200.3M | +36.5% |
| Net margin | 29.5% | 29.6% | -0.1 pp | 25.4% | +4.1 pp |
| Diluted EPS | $1.66 | $1.57 | +$0.09 | $1.19 | +$0.47 |
Risks
Salesforce, Veeva's primary CRM competitor, has announced that certain large Veeva CRM customers have committed to purchasing its CRM solutions, and a number of Veeva customers have informed the company of their intent to move to Salesforce as their CRM provider. The migration to Vault CRM is complex, Veeva CRM support ends December 31, 2029, and the Salesforce agreement wind-down restricts sales of Salesforce-based applications to existing customers through September 1, 2030.
Nearly all revenues are generated by sales to life sciences customers, exposing Veeva to drug pricing reforms such as the Inflation Reduction Act, proposed administration drug pricing reforms, reductions in funding or staffing for the FDA, NIH, and Medicaid, and limits on direct-to-consumer advertising that could reduce demand for Crossix and other offerings. Consolidation in the industry could also reduce user subscriptions or lead to non-renewal of orders.
The EU Data Act, effective September 12, 2025, allows EU customers to cancel subscriptions without cause after notice and transition, and the My Health My Data Act led Veeva to add limitations to audience segments on Veeva Crossix. Compliance with GDPR, PIPL, HIPAA, and U.S. state privacy laws increases costs and may reduce demand for solutions.
Veeva's AI products, including Veeva AI and Aspen CRM, depend on third-party large language models such as Anthropic, and access to frontier models may be suspended or restricted by providers or governments. AI errors or perceived privacy, bias, or ethical harms could trigger regulatory scrutiny, reduce adoption, and increase compliance costs under evolving rules like the EU AI Act.
Veeva relies on Amazon Web Services for Vault applications and on Salesforce for Veeva CRM, and it does not control these third-party facilities or AI models. Service outages, inability to renew agreements on commercially reasonable terms, or provider financial difficulties could interrupt services and subject Veeva to liability.
Top 10 customers accounted for 28% of total revenues in each of fiscal years ended January 31, 2026, 2025, and 2024, so the loss or consolidation of a key customer could significantly reduce revenue growth. Purchasing scrutiny at renewal of large subscription orders may result in reduced user subscriptions or increased pricing pressure.
The sales cycle for a new customer may span 12 months or longer, and sales cycles for newer applications, markets, or industries are also lengthy and difficult to predict. If the sales cycle lengthens or Veeva invests substantial resources in unsuccessful sales opportunities, operating results and growth would be harmed.
Competition for highly skilled employees is intense, and Veeva continues to experience difficulty hiring and retaining employees, with sales professionals taking six to nine months or longer to become fully productive. A decline in the perceived value of equity awards could further impair recruitment and retention.
Total revenue growth was 16% in fiscal 2026, 16% in fiscal 2025, and 10% in fiscal 2024, while subscription revenue growth was 17%, 20%, and 10% over the same periods, and Veeva states longer-term growth rates may decline. As expenses increase, Veeva may not sustain the same level of profitability achieved in the past.
SaaS KPIs
All quarters →Total Customers
Non-GAAP Operating Margin
Non-GAAP Gross Margin
Non-GAAP Subscription Gross Margin
Summary, forecast, risks and KPIs are extracted from VEEVA SYSTEMS INC's SEC filings for Q2 FY2027 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 6, 2026.