Veeva Systems $VEEV Q1'26 Results:

↗️$882.9M rev (+16.3% YoY, +5.6% QoQ) beat est by 3.0%

↘️GM* (76.9%, -2.3 PPs YoY)🟡

↗️Operating Margin* (44.8%, +14.0 PPs YoY)

↗️OCF Margin (127.7%, +12.1 PPs YoY)🟢

↘️Net Margin (29.6%, -0.5 PPs YoY)🟡

↗️EPS* $2.24 beat est by 5.2%🟢

*non-GAAP

Key Metrics

↗️Billings $871M (+19.1% YoY)

Revenue By Segments

Subscription services

➡️$730.2M Subscription services rev (+15.0% YoY)🟡

↘️GM* (86.8%, -1.3 PPs YoY)

Professional services

↗️$152.8M Professional services rev (+22.9% YoY)🟢

↘️GM* (29.5%, -4.0 PPs YoY)

Operating expenses

↘️S&M*/Revenue 9.5% (-0.1 PPs YoY)

↘️R&D*/Revenue 17.8% (-0.2 PPs YoY)

↘️G&A*/Revenue 4.8% (-0.7 PPs YoY)

Quarterly Performance Highlights

↘️Net New ARR $89,720M (-14.4% YoY)

↘️CAC* Payback Period 6.9 Months (-0.5 YoY)🟢

↗️R&D* Index (RDI) 0.89 (+0.01 YoY)🟢

Dilution

↘️SBC/rev 14%, -0.6 PPs QoQ

↘️Basic shares up 0.4% YoY, -0.8 PPs QoQ🟢

↘️Diluted shares down -0.1% YoY, -1.7 PPs QoQ🟢

Guidance

➡️Q2'26 $902.0 - $905.0M guide (+14.5% YoY) in line with est

➡️$3,635.0 - $3,645.0M FY guide (+13.9% YoY) raised by 1.3% in line with est

Pros

Revenue growth remains robust at 16.3% YoY

EPS beat indicates resilient earnings quality

Operating leverage expanded materially

Billings growth signals durable demand

Vault CRM migration momentum remains strong

Falcon broadens the long-term AI labor TAM

Cons

Gross margin compression warrants monitoring

Subscription growth is only mid-teens

Net new ARR declined 14.4% YoY

Services margin fell despite strong revenue

AI monetization remains mostly immaterial

Guidance implies limited near-term upside