Veeva Systems Inc. (VEEV) Earnings Call Transcript & Summary

Thank you for joining us on the webcast today for our 2025 Investor Day. I'm Gunnar Hansen, Head of Investor Relations here at Veeva. Feel free to contact me if you need anything during today's event or if you have any questions in the future. Some quick notes before we begin. [Operator Instructions] If you have any technical questions, please submit them through the Q&A widget or e-mail them to [email protected]. Before we get started, I'll read a quick disclaimer. During the course of today's presentations, we will make forward-looking statements, including statements regarding trends, our strategies, market size and opportunities and the anticipated performance of our business, including guidance regarding future financial results. These forward-looking statements are based on management's current views and expectations and are subject to various risks and uncertainties. Actual results may differ materially. Please refer to the risk factors included in our most recent filing on Form 10-Q. Forward-looking statements made during today's presentations are being made as of today, October 16, 2025. If the presentations are replayed or viewed after today, the information presented may not contain current or accurate information. We disclaim any obligation to update or revise any forward-looking statements. In the presentations, we will 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 the appendix of today's presentation, which will be posted on our website. And with that, I'll turn it over to our Founder and CEO, Peter Gassner.

Thanks, Gunnar, and welcome, everyone. As we get started, I'll take a minute on our vision and values. This is how we operate the company and how we make decisions. We're building the industry cloud for life sciences. That means cloud software, data and consulting to help the life sciences industry get more efficient and effective. We want to help the industry grow and bring better treatments to more patients. Our values help us make decisions. The first is do the right thing. This is about actively knowing what the right thing is and then going out there and doing it. customer success that comes in 3 parts. First, it's for the people in life sciences. They have to work -- enjoy working with our people and products. Second is for the companies in life sciences. Our products and services have to deliver positive ROI. And third is for the industry overall, Veeva has to be a positive force for the industry and help the industry grow. Employee success, that's for our people. Veeva has to be a positive place for them. and speed is remind us to get things done quickly and correctly with high quality, the first time and to retain that speed even as we grow. And finally, Veeva is a public benefit corporation. We have to balance the interest of customers, employees and shareholders. You'll see 4 themes today. First, Veeva is a very durable company with a clear product strategy, and we're on track with our $6 billion revenue goal for calendar year 2030. Veeva AI is a significant opportunity, and we're also making great progress on new markets. First, we serve a big market. Life Sciences is a $2 trillion industry that continues to grow. And we have a big opportunity in Life Sciences. The reasoning behind our [ $20 billion ] TAM is very simple. Industry-specific software and data is critical to life sciences. It's really the only way in the long term that the industry can drive efficiency and some level of standardization and automation that helps the industry grow. Spending 1% on industry-specific technology to get more efficient is certainly reasonable. And that should be a win-win for Veeva, our customers and the industry. for every dollar of revenue we take in, we want to create at least $2 of value. Today, we're about 16% penetrated in our TAM based on our estimated revenue for this year. So we have a long runway of growth ahead. Last year, we set out 3 goals for 2030. The first is to achieve a $6 billion revenue run rate in calendar 2030. The second is to enter new markets. We started that initiative last year, and I'll give an update on our progress. And the third is still Veeva to still live our common values as one team and to retain our ability to change. Setting long-term goals, that's something we have done before. It's part of the way we work. It helps us execute. We have annual plans each year, and we have 5-year milestone plans that we work towards. We achieved our 2025 revenue goal last quarter, and I'm happy to report that we are on track for our 2030 goal. We've executed well in the past year across all product areas. This includes shorter-term things like sales cycles and customer projects as well as long-term things like product innovation and improving our operating model. This 2030 revenue plan considers mostly organic revenue, mainly in life sciences and mainly from existing products. We have to execute well in many areas over the coming years to make this happen, and there are certainly a lot of unknowns. But we have the right team and the right product strategy to do it. All right. Let's talk about our products, the industry cloud for life sciences. That's Development Cloud, Quality Cloud, Commercial Cloud and Data Cloud, all supported by business consulting to help companies with the digital transformation that's enabled by our products. Development Cloud is going really well, and it's our largest cloud opportunity with plenty of room for growth. Development Cloud is pretty amazing. 19 great applications all integrated together on a common platform. There's really nothing like it. We have a mix of established applications with higher market share and newer applications that are earlier in their cycle. Development Cloud is modular. So customers can start in any area. It's configurable enough to work for a very large pharma company and simple enough, just work out of the box for a biotech with 100 employees, and that thanks to our Veeva Basics offering, which we're really excited about. QualityDocs is also going well in the quality assurance area, QualityDocs, QMS and training. These are leading applications and validation and batch release, those are gaining tractions. LIMS is in the early days, and it opens up a whole new area for us, the area of quality control. We expect to add more products in this area over time as LIMS gains traction. Commercial Cloud is a really exciting and a broad area with lots of room to grow. In CRM suite, it's all about moving customers to Vault CRM and then bringing in the add-on products. In the medical area, we're investing with 2 new applications and our recent partnership with IQVIA opens up more potential and data management with Nitro and network. Crossix continues to do very well, both in measurement and in audiences. We have a really compelling vision for Commercial Cloud, but a critical step along the way is the migration of our current customers from Veeva CRM to [ Volturo ]. I'll give a brief update on that progress. In short, things are going well and going to plan. Over 100 customers are live on Vault CRM, including 2 of the top 20, we have done over 25 migrations. We have many more migrations to go over the coming years. and we have the experienced team and the tooling to do that. Our competition here is Salesforce. We're winning most customers, and they're winning somes. Customer success and product excellence that will win the market over time, and we believe we're well positioned for that. Data Cloud is also doing well. In Data Cloud, you can think of OpenData as the base. OpenData is the global reference data for health care providers and health care organizations covering over 100 countries. Connected to that is HCP 360, which is detailed metrics at the HCP level, the individual level, and that's used for segmentation, targeting and access. Link is deep data on the most important people and accounts to life sciences encompasses very detailed patient and prescriber data specific to the U.S. market. As you can see, we're investing in data cloud with new products, especially in the HCP 360 area. Our recent IQVIA partnership that will also be a positive for Data Cloud because it makes it easier for customers to use IQVIA data and Veeva Data together. Business Consulting is an important area for Veeva. We started this 6 years ago, and we've grown it organically to over 400 people and about a $90 million run rate. Business consulting that helps customers with change management, business process design and analytics. AI requires change management and process design to get the most value out of AI. So AI is a growth area for business consulting. Now let's talk about AI and AI in general in life sciences. AI is bringing change to life sciences in many ways. In drug discovery, AI capabilities are well known and improving rapidly fundamentally changing drug discovery. In commercial, doctors are starting to use AI at the point of care with solutions like open evidence. And that's going to change so many things over time. And in all areas of life sciences from clinical to manufacturing to commercial companies are looking to AI for greater efficiency in operations. Veeva AI is our identic AI offering for life sciences, and there are 2 parts to Veeva AI. [ GenAI ] in the Vault platform and AI agents in all of the Veeva [indiscernible]. The goal of AI is to increase industry productivity, and we think that can be very significant over time. Let's get into the details and start at the platform level. The defining feature of the Vault platform has always been that it handles data and content together in a seamless way. Vault is still unique in this way in that it makes it the ideal application platform for the life sciences industry. This is why we can create content-rich applications like eTMF and submissions, but also data-rich applications. like CTMS and QMS, now we're adding agents into the platform, data content and agents. This means that users can work with content and data and agents. And those agents will be able to do some of the work for the users. This is a fundamental change in the platform, the biggest change we've ever had. Veeva will deliver standard AI agents that run in Veeva applications and they get improved 3 times a year with every release, they keep getting better and better. Customers can configure our agents or they can create their own agents, their own custom agents using the tools in the Vault platform. Agents can answer questions for users, generate insights, take care of a workflow step or respond to requests from other agents. So it's really broad what agents can do. The best way to understand Veeva AI is through a demo. Let's have a look at a short demo involving Veeva CRM and Veeva AI. [Video Presentation] The first release of Veeva AI is this December with the commercial products, followed by the other Vault areas throughout 2026. Next year, '26, that's going to be a busy year for Veeva AI. Veeva AI is a significant opportunity for the industry and for Veeva. For our early customers, we will require business consulting projects to make sure we have success and get the right feedback into our product team. So we have to get this right. Veeva AI has usage-based pricing based on tokens. This allows customers to start small and pay according to their usage, and that should align to value delivered over time. Veeva AI is a really big initiative for Veeva, and we're very integrated with our core business. We need focus on Veeva AI in all areas in products, in services, in consulting, strategy and sales, all areas. That's why I call it everything, everywhere all at once with Veeva AI. Lots of things going on, very busy. Now Veeva AI, that's a really big opportunity for Veeva and the industry because our applications are all on a common platform spanning from clinical to quality to commercial we can have a broad impact fairly quickly, and we are committed to making Veeva AI a very positive force for the industry and a very significant opportunity for Veeva. Now let's talk about new markets. We announced new markets last year, and I called it the next big leap for Veeva. The first leap was starting Veeva in pharma CRM, and the second was starting Vault and building the industry cloud for life sciences. And the third is horizontal enterprise applications. That's what we call new markets. As you can see, each leap has bigger potential than the previously, and that's hard to do. But that's what we're going for. We have a small and focused team on new markets, and we're taking a platform-first approach. The team has a lot of autonomy from the rest of Veeva and they operate on 90-day plans. We will operate in the Veeva Way in new markets just as we do overall in Veeva. We'll think about growth and profit, customer success and taking the long-term view. It won't be flasher high, it's about product excellence innovation customer success and reference selling. In terms of progress, the platform work is coming along well. I'm really excited about the innovation there. The first application will be in the CRM area and we're starting to work with early customers and hope to have some live in Q1. We'll keep the number of customers small. We won't have a sales team. It will only be word of mouth with a small number of customers. It's not about revenue at this stage. It's about product excellence, innovation and we're working very closely with early customers. I expect that to continue for the next year or 2. When you're making these kinds of core applications and going for greatness, that's really how long it takes. There aren't any shortcuts. Our company priorities for the coming year are pretty simple. We need to execute on our 2030 goals. We need to focus on Veeva AI and new markets. and these are big goals. These are lots of work. We have the right product strategy and operating model. We have to execute. And we always look for the right acquisitions. We have a good track record there. but it takes time and it takes discipline. You never know when the right thing comes along, either inside of life sciences or outside. This could be an incremental acquisition or a transformative one. We need a culture fit, a product strategy fit and a willing seller. You just can't force it. And of course, capital return is always an option, although not something we're planning on in the coming year. In summary, it's an exciting time for Veeva. Veeva is a very durable company, and we're on track with our 2030 revenue goal. Veeva AI is a significant opportunity and new markets is off to a great start. With that, I'll hand it over to Brian to give some detail on our financials.

Thanks, Peter. I'll share more detail on our progress towards our 2030 goal, the opportunity we see ahead and our continued focus on growth and profitability. Now before I dive in there, I'll give you a quick update on Q3. We've got about 2 weeks left in the quarter, and the team is executing well. We expect to meet or exceed our prior guidance across all metrics. We'll provide full Q3 results and updated fiscal '26 guidance on our Q3 earnings call on November 20. Now coming back to the big picture. First, just to ground us, the bulk of our revenue is from life sciences, 92% from biopharma and 5% for med tech. Within biopharma, the top [ 20% ] are about half of our revenue. And if you expand that to the top [ 50% ] or so along with the large CROs, it's about 65%. SMB is the remaining 35% and is a diverse group. It runs all the way from midsized firms with billions in revenue through to pre-commercial companies with less than 100 employees. And there's room to grow in all of these segments, and we expect the revenue mix to be fairly consistent in the coming years. Now last year's Investor Day, we introduced the goal to grow our revenue run rate to $6 billion by the end of calendar 2030. We've made great progress towards that goal in the past year, and we're on track to meet it. It implies an annual growth rate of about 13%, driven by subscription revenue, particularly in R&D. Our expectation is to reach $6 billion largely from organic growth in existing products. Our 2030 goal does not include contribution from our new markets initiative or Veeva AI. And Veeva AI is progressing faster than we expected. We now plan to start charging for it next year, but it's still a bit too early to forecast. And our focus right now is on getting the product excellence and customer success. Our AI pricing model will be usage-based and we'll share more information as we progress. Our non-GAAP operating margins were 45% in Q2 and the 35% that you see here for 2030 is a floor and not a target. It gives us room for outsized investment if we see significant opportunity and so it's important to keep in mind, our approach is that we have a long-range revenue goal, but not a long-range margin goal, and we provide margin targets annually. We have a very large market opportunity in life sciences to fuel that continued growth. Our TAM today is about $20 billion. And of the $20 billion commercial and clinical are each about 35%. The remaining 30% is quality, regulatory and safety. Our existing products address more than 50% of the TAM. And yes, we're only 16% penetrated to that $20 billion. So there's a lot of opportunity to grow, both within our existing products and also through new product development. We have a broad portfolio of more than 50 products and expect each area of our business to grow through 2030 with clinical growing the fastest. Commercial has higher share today, and so growth is a bit lower, and the other areas are roughly proportional. The main takeaway here is that our growth through 2030 will be broad-based with each product area contributing meaningfully. Our product quadrant gives you a sense of where our major suites are in terms of market share and product maturity. And starting in the upper right, you see commercial content, regulatory and CRM, which are our most mature and have the highest market share. CRM is a large area today, and our main focus there is successfully migrating customers to Vault CRM. As we complete those migrations, we can grow with newer add-ons like campaign manager, service center and patient CRM. Crossix, which have been growing more than 30% and has been a key driver of overall commercial subscription growth. We continue to invest in Crossix and expect it to continue growing over time. There are 2 major areas in clinical here, clinical operations and clinical data. In clinical operations, we have mature and highly penetrated products like eTMF and CTMS but also large products with a lot of room to grow, like RTSM, Site Connect and study training. Clinical data also has a long runway for growth, in particular, with EDC, CDB and [ Eco ], and this is a key focus through 2030. In quality, QualityDocs and QMS are market leaders and still growing, and we also expect strong growth from newer products like limbs, validation management, batch release and training. And then lastly, on the bottom left, you see safety and 2 key areas of Data Cloud, Link and Compass. These are all large markets that will contribute to growth in the coming years, but we are still maturing and expanding the product suites. Our growing product portfolio and customer success has allowed us to consistently deliver strong growth on both top and bottom line. Through product excellence and effective multiproduct operating model and financial discipline, we've delivered leading operating margins and have grown non-GAAP operating income by about 140% over the past 5 years. We focus on keeping our teams lean so they can innovate and execute with speed. Product is our main area of investment, and product excellence allows us to deliver customer success. And customer success and delivering on our commitments over time builds confidence and trust in Veeva. So we focused on execution, not hype, and a result, our sales and marketing expenses are fairly low. That's been our approach since the beginning, and it's also how we will operate and compete in new markets and with Veeva AI. We remain excited about the path ahead. The Veeva team is executing well on an ambitious 2030 goal. We have a long runway for growth, and we're continuing to deliver strong profitability. We're excited to continue expanding the value we bring to the life sciences industry and to its patients. Now we'll take a 10-minute break before we turn to Paul to get a customer's perspective. [Break]

Welcome back, everyone. I have the pleasure of introducing Dr. Evan Bailey, who's the Chief Medical Officer at Applied Therapeutics, which is an emerging biotech Dr. Bailey has a very deep and a broad perspective, having worked at in multiple biotechs, both large and small. He's also run a number of major technology projects across his career. And all along the way, he's been a practicing physician. Applied Therapeutics, now they're developing new medicines for metabolic disorders that address high unmet medical needs. So Dr. Bailey has a very deep and first-hand appreciation of the urgent need that the industry has to be more efficient in how they bring medicines to market. Now in past Investor Days, you've heard us talk to many large biopharma companies. And now you're going to get a view from an emerging biotech. These companies are certainly critically important in terms of the science that they bring and the innovation but also in terms of how they use technology and how they're able to operate. And that's what we're going to focus on today. Welcome, Dr. Bailey.

Thank you.

All right. So we know that there's a significant need in the industry to drive greater efficiency in drug development. The new medicines taking multiple years, billions of dollars. Can we start with your perspective on what's your view of the challenges and the opportunities in getting drugs to market today?

Of course. So first of all, as a physician and someone who's treated a multitude of rare diseases and other diseases first hand, the high unmet need is really what drives all of us to get new therapies that have the potential to be safe and effective to patients who have no treatment options. So in order to do that, you want to do it as quickly and as efficiently as you can. There are myriads and hundreds of steps in different studies that have to be conducted to file a new drug application and anything that delays that or any errors along the way is a delay for the drug potentially getting to that patient and having them experience potential efficacy as soon as they could. So when you look across the industry, it overall is just not efficient. A lot of the companies use a variety of different CROs. They're using different databases. Their safety system is it necessarily connected to their their clinical trial database, like their clinical trial management system may not be connected to their safety database. And when you're planning also for a potential launch, if everything goes well, you're able to submit a new drug application, [indiscernible] up be planning for the other functions that are involved with that in terms of medical affairs, commercial, pharmacovigilance is a huge one. And so thinking about this globally is where you can find efficiencies and really have one source of truth, I think having worked in medicine and practicing still the EMRs or electronic metal proctors that are out there as one source of truth, they've been incredibly good for patient care and patient safety. And the biggest thing is patient safety on that. Then when you do all you take a holistic look and try to get one source of treat with one system, you really start to eat away at cost, you either way at delays. And those are all things that can make you more successful in getting a drug that's efficacious and safe to patients in the end. Then I think for me, one of the biggest things is leveraging technology as a tool and what you can do with that technology to not just make things better for you as a person working in your company, but for the patients at the end of it for the regulators who are trying to evaluate your program for investors who may be looking at your company and what your systems are.

I love the perspective there and thinking about technology as a tool and enabler productivity. Now where do you think -- based on that, where do you see things headed? And more specifically, what approach did you take out in therapeutics?

Yes. So when I started here 4.5 years ago now, we had a couple of different CROs, a couple of different EDCs that have been used across the same program or multiple programs. And when it comes time to do a new drug application, you have to do all of these integrated analyses, et cetera. Now -- the problem is when things aren't integrated, you're pulling data from a multitude of sources and that means that the the different databases may not have included the exact same information and you're trying to put together apples, oranges and pears to come out with one end product, and it doesn't always line up and you end up wasting a lot of a lot of time going back and looking at coding and figuring out how why this was coded them. Was it a version difference? I don't know there was an error in the original database, how this come across. So for us, we stepped back and we said, well, we need to implement our own system. We were paying CROs to manage databases. That won't even their own databases doing program management that they weren't actually programming, we still were. So we looked at what was available. We had already had a couple of Veeva instances that we had implemented. And we decided to go kind of full in. So we started with EDC, CTMS. And been expanding from there, including safety for safety valuation, pharmacovigilance. And then on the other sides of the business, we've implemented a myriad of other Veeva modules basically all because they all speak to each other, the data can flow from one system to the other. You're not reentering things, you're able to pull appropriate reports, whatever your subfunction is or if you have a request from an agency, et cetera. then all of that has really reduced costs, and it's really improved the efficiency of the team. We run very lean. We're a very small company, and we're able to do large CROs with multitudes of people to just in-house, and we have that control and insight into everything there.

I'd love for you to share, if you can, some specific examples of how that comes to life just for the investment community who may not have the visibility and the specific process knowledge that you have?

Yes. So kind of picking up on what I was saying before, when you have a new drug application, you have to do an integrated safety summary, it's one of the core things, they want to see all the safety together in one group to look for any major safety seen those that may not have been picked up in 1 trial that you may pick up when you look at 3 or 4 trials combined together. Now when you go to do this, which I have lived through in submitting a new drug application and there are multiple EDCs and you get those data sets things don't line up, and it literally added weeks to our time line for the ISS [indiscernible] 3 to be completed and it's going back to the original CRO, going back to the original database, going back to the original listings and trying to figure out why things aren't lining up or what the coating was and what the issues were. And that's one part of it. And then you're trying to assess adverse events, and you want to know the total if you have everything already in one system, you literally hit run and you get the totals of on an adverse event that you're curious of in particular. Let's say, upper respiratory infections. You look at it, you pull it out, you see it, you see this is what you had across our studies. It's all in one system, and that's why we've been doing this with Veeva. Now for where we are, we do have to go back and back data enter the other EDCs that we had from older studies. But for the last couple of years, we've been in Veeva EDC just added on the functionality from the other modules. So with all of that, you know everything in the system is true. You're now looking at multiple systems. You're not missing a coding or missing the database line or a column in some output. And in the end, when you have all that at your fingertips when you submit a new drug application, A, you've got the economies of scale and efficiency before that. But when you get information requests from the agency, you're able to go back and ask those specific questions from the system you already have. Respond to the timely manner and get like reliable accurate data out of it. And that's the biggest thing because have to be able to convey reliable, accurate data to the agency because the patients are waiting there for it, right? And we want this to be the most successful system that we can have and implement it from there. The final thing I'd say for Veeva is -- it's a validated standardized compliance system for regulatory authorities. So you basically say we use Veeva. They know it's valid issues, all of that's in place. So it's not this huge discussion in showing 8,000 supporting documents to prove it. So it's an added benefit of using a verified Value Data system that's compliant that the agencies know about and say, okay, that box is chat.

Awesome. And you talked about the connectivity across all of these different areas, drug development process. You highlighted even medical, how that's connected in you're not at a commercial stage yet, but as you look ahead into commercial, do you see some of those same benefits? How do you think about that?

Yes. What I'd say is as a physician in doing drug development and then knowing what it's like to write a prescription getting covered by getting covered by insurance. I try to look at everything from start to finish. And one of the best things that you can do with one system is look, start to finish and say, well, that's available within that system for where we hopefully will be in the future. So -- by implementing the safety module, we already are set up to do pharmacovigilance in a post-marketing setting should we be there. We already have medical affairs, MSLs out in the field visiting [ KOLs ] were we have the CRM, we have promo mats to approve their materials. And now we're implementing medical information. And all of those materials and recordings and visits, they all get tied together. If medical information gets to call out an adverse event that gets entered it goes right over to our safety system. When the MSLs gets called, they directly have the material approved and pro on that out. If they have to make a medical information request that goes right into the medical information database with cone login that's all right there. So when the -- if the hope that we were able to have something approved in the future when you do, you need commercial on board too. And then you already have all those systems in place here have that info from that's all speaking to each other. So we're not working and doing that work at that time for launch readiness because it's there and done.

So you've spoken very clearly about a lot of the benefits of having a single source and the connectivity across these different systems. Is there any way to quantify that? How would you measure the impact of this asset on your company?

I think dollar-wise, we've saved millions just knowing what our CRO contracts were before, database maintenance fees, pass-through fees. Knowing that when we use an out-of-the-box solution and don't try to modify it, like Veeva we don't spend all that money on customization and we don't increase our risk of breaking the system that's already been validated and known. So right off the bat, we saved millions by getting rid of almost all CROs from there is the efficiency. Anyone on the team who has access to EDC, it's one log in their hand. They can look at a patient lab value if they need to or whatever the efficacy assessment was done or not done. And data management people are right in that system and then everyone is trained on it, right? So everyone is familiar with Veeva. You're not saying for this, you log into this system, for this to log into this system, like you are log in to Veeva and click whatever function you need and you're in that already. So there's also a lot of automation for notifications when things come up. So basically, it streamlines a lot of our work. And as a small group of people, we need that efficiency because we're a lot of people wearing a lot of different hats. So to have one place to go, knowing where it is and now you can get whatever you need out of it whenever it's needed is a huge timesaver. And so it's not just the cost, it's just like the people time, which is important because people work hard and they're devoted to getting the drug to patients.

I mean remarkable results, of course, given what your company is trying to accomplish, bringing new medicines to the market, but also given the size of your company and the stage that you're at, being able to have that kind of impact. When we talk a lot about that being attributed to kind of the depths and the breadth and the connection of a lot of these pieces and giving you the ability to kind of change your operating model and make it more efficient. And that, of course, aligns with getting medicines to patients faster, less transition to the relationship that you have with Veeva. Can you talk a little bit about what that experience has been like for you?

Yes. No. I think that's been one of the more positive aspects of this. So it's one thing to get one solution that can cover a multitude of functions for you, but you need to kind of customer support and service for that. And our experience has just been excellent, no matter what function or what part of Veeva worked with, whether it's an inflammation team, implementation team or the sales team or some technical database back end group, it's always been positive professional and responsive. So I don't know you -- everyone's probably experienced this when you call for get a call center and you got on hold and you can't get to the right number, and you're waiting to hear back. You've messaged the CRO 10 times. They still haven't replied back, but you have a data inquiry for the agency and at the time clicking and there's something wrong with the database with Veeva like you get a response right away. And even if their response is, we're going to have to look into this, they give you a time line, they're going to get back to you and they do get back to you. I think for me, it's one of the rare times when you work with a vendor that they actually are that responsive and available. And that's just been a huge plus. I think they're also -- Veeva in general is really good for taking feedback. So like I said, I don't like to break systems when they come out of the box. Like I want out of the box. It's already been proven. It's been validated like they have done the UAT testing like in the sandbox everything is done before production, right? But with Veeva, if you find something with a workflow that's weird or you think it could be done better, they actually will take that feedback, assess it. screening across other customers. And then that will all of a sudden show up in an update. So with their scheduled updates for the different systems, like you get the benefit of all of the customers using it and ways of improving workflows because just because I think I know how to do something, doesn't mean there isn't a more efficient way or a better way of not missing something, right? Maybe there's an extra step to throw in to make sure you're not missing checking on A, B or C. And I think that's one of the biggest things is it's an iterative process that is collaborative. And those are the 2 biggest things to have with a vendor, especially when you're going to rely on them for a multitude of your functions within their one system.

You certainly hit on a couple of our core values that we talk about all the time, customer success and speed, and it's great to see that playing out every day at your company. Your story is a perfect example of bringing out to life and making it real. So with that, I just want to thank you again so much for taking the time to share thoughts about you and your company and the journey that you've been on, I wish you all the very best going forward. Thank you again. All right. And with that, we'll turn it back over to Peter.

Thanks, Paul and Evan, and thank you to our customers for your partnership and to the Veeva team for your outstanding work and your dedication to customer success. We'll now open it up for questions.

[Operator Instructions] To kick us off, our first question will come from Saket Kalia with Barclays.

Okay. Great. Thanks and thanks for hosting this super helpful. Peter, maybe just to start us off, I know you spend a lot of time with customers. Maybe you could just talk a little bit about sort of the relative health of your end markets right now, just in terms of overall spending -- and there was a lot of focus on AI in the session, which I certainly appreciate. Maybe you can also touch on their appetite for investing in AI based on those conversations?

Thanks, Saket. The relative health is good, I would say. It's -- the macro environment, it is what it is. The political environment is what it is, but our customers are used to it, and they're executing. I don't feel a lot of delay or anything like that. We've got to remember that the science is still moving forward rapidly. There's therapies all the time, right? It's exciting times in life sciences. So that's good. The macro environment is good from the big pharma, big biotech, big biopharmas to the small biotechs. And then in terms of the appetite for AI, yes, everybody is looking for efficiency. So there's good appetite for that. But I think it's more pragmatic than it was 2 years ago. There's a little less experimentation and I would say there's more realization that the process change has to happen with it. So there's an appetite for high-wind AI, there's less appetite for sort of speculation.

Our next question comes from Jeff Garro at Stephens.

Yes. I wanted to ask about the open evidence partnership announced this morning. Just welcome your comments there, but a few topics in particular would for you to touch on would be just who's going to be the main user of the products that come out of this partnership -- is this partnership exclusive one way or another? And any details you can provide on how the economic model is going to work for this partnership would be helpful, too?

Very good. Thanks, Jeff. Let's see, a couple of questions there. The users of this -- or the -- I guess, the beneficiaries of this would be the life sciences companies from large biopharma to small biotechs. So you wouldn't see the Veeva itself or our open Vista partnership, most likely not so much directly in front of the doctors. I would say the use cases, that's a better way to think about it. The use cases you're -- for example, if you're trying to enroll in a clinical trial, I think between Veeva and open evidence, we can help reach the doctors at the point of treatment, so they can be more aware of a clinical trial. That does help the doctor that does really help the patient if they can -- if that's a critical thing for them. but the economic benefit probably goes to the life sciences company. So there is a good example. And then in terms of the economic model behind the partnership for the specifics there or the exclusivity -- those are details we're not getting into this that at this time, and it's very early days for that. We're focused on bridging the gap. Open evidence has a lot of doctors using AI we have a lot of pharmaceutical companies using our systems, how can we bridge the gap to provide better care in a more efficient ecosystem.

Our next question will come from Ken Wong with Oppenheimer.

Peter, Paul or I guess maybe even Brian, you guys touched on AI monetization. I know that details are still to come, but I would love to get a sense for how the token model will get kind of embedded into your current licensing model. And then Paul, specifically for you, like you guys are talking about productivity gains from we kind of just went through a cycle where digital engagement drove down head count across pharma sales. Like how should we think about the impact on head count as you guys kind of drive these productivity gains into the end market?

Okay. I can take that one on tokens and monetization and Paul, you can take the headcount. In terms of the model, we will give the -- well -- first of all, it will be we'll be billing in arrears for these services based on how many tokens, which it's approximation for use that our customers use will give them visibility to which agents are consuming which amount of tokens so that they can help the health plan, and that will be on top of the normal what they pay us for our applications. So the idea with the token-based usage is so that customers can start small in areas and align the value to the use. So a pretty simple model. It's very familiar to anybody when -- it's a web service. It's how you build web services based on usage. This is -- you could consider it that way. Did that make sense? .

Yes. Thanks a lot, Peter.

And then, Paul, do you want to take that in terms of the field sizes?

Yes. Your question is about the head count and AI productivity gains. And you're right. I mean we just saw that cycle play out over the last handful of years, it took about 3 years as we help the industry become more digital. They took some of those productivity gains. We had predicted roughly a 10% reduction, and we saw slightly less than that. So there was already a very recent reset I don't expect that same kind of reset to happen going forward with AI and the productivity gains. There will be some natural ups and downs. But I don't expect that same kind of reset in. And the reasoning is, yes, they will be more efficient. Yes, they'll be more productive. But in large companies take the enterprise companies, they still need a level of coverage for these HCPs. They've got to maintain these relationships they're very thoughtful and cautious about dramatically changing the size of the sales force is expensive. Sometimes they go down only to go back up maybe in the next year to launch a medicine. So they have to be very thoughtful. I think it will be very stable. On average in the enterprise. And then, of course, with the emerging biotechs, these are companies that may be launching their medicines, they need the coverage. They need to break into a new market and establish those relationships. And I think AI will add to their productivity and not necessarily, they won't think about it as, hey, we need fewer of these people to go launch a medicine. So I see it being relatively stable over the next several years.

Our next question will come from Brian Peterson with Raymond James.

Thanks, guys. So I don't know who wants to take this, but I'd love to understand as AI and a genetic functionality comes into the development cloud what can that do to modernize applications that may still be on legacy or may still be on greenfield where that may drive people to a cloud refresh. And I guess if that is going to happen, where would we see that across the portfolio? Any thoughts there?

I can take that one. I don't think AI can do very well in modernizing legacy applications. I think that you need a current application, a good application with the right business rules. So Will it drive some upgrade cycles? Potentially -- potentially, it could do that. So for example, I could see that happening in the pharmacovigilance area, right? That area has been a little bit slow to change. So I could see that happening there over time. I could see it driving people to a more integrated clinical environment as well. If we have a an AI agent for a clinical research associate that has to use a modern -- they want to use a modern CTMS. They have to get into the EDC system, it's going to be better if that's all connected by a common AI. So I think those are the types of things that we'll see. They might want to connect the business process from the regulatory system to the quality management system. Well, if you're on a legacy quality management system or legacy laboratory information system, it's harder to get the data out. So I do think it will cause modernization. Now not dramatically, not all at once, but I think it will happen over time.

Great. Peter?

Sorry, I just realized my video is off somehow.

I think we've just flipped off there for a second. Our next question comes from Andrew DeGasperi from BNP.

Maybe a question about the customer presentation earlier. I thought it was interesting in terms of how he was saving a lot of cost on the CRO side in terms of the pass-through and the database maintenance. And I was just wondering -- how typical is that -- do you think is happening in the near term? And is this something that changes your relationship with the CRO in any way?

Paul, do you want to take that one?

Yes. I'll give my thoughts on it. So he talked about a couple of things driving some of those efficiencies. And some of them were just core to centralizing data across multiple different CROs and all of the efficiencies associated with that. They got to do reporting. You talked about this integrated safety report as an example. In centralizing and standardizing what we talk about all the time, simplify, standardize and doing that across all your partners creates a lot of value. That in and of itself is a very significant value driver, the second piece you talked about, I think, is more -- maybe more related to what you're referring to, which is some of the, hey, we can maybe in-source some of this work -- and I think in some cases, I think they were leading and they were kind of innovating where they took some of that work in-house and they were able to do that and operate more efficiently. It remains to be seen if that will be trend CROs are a very important partner to the industry. So yes, there's been some success there, but I don't know that yet, that will translate into a dramatic shift in all the CROs. I think we'll continue to remain important for a very long time.

Our next question will come from Matthew Matthew Shea of Needham. Matt, I think you're still on mute.

Thanks, Gunnar. Sorry I did not realize that was up -- maybe on the data side, remains a large opportunity, especially with Compass. And in the past, you've noticed that Compass is in part based on the Crossix data platform to source your data and match it I'm curious, has the recent strength in Crossix Enhanced Compass, is that the right way to think about it? And maybe more broadly, are there any interesting network effects or cross-sell opportunities to call out that the Crossix strength has created?

Yes. Great question, Matthew. The way to think about it is the data network that we source from all these different sources, it comes in, in a standardized way, and then it powers it provides the data needed for Crossix and it provides the data needed for Compass. So there's no direct correlation really between the success of Crossix and the success of Compass. There are 2 separate things, although they share the same data network. So they're independent businesses. Of course, when Veeva has success in one area of a company that reflects well on our other products, so there's reference selling there, but there's no direct connection, but you think there would be, but -- now they're same data network use for different purposes.

Next question comes from Craig Hettenbach with Morgan Stanley.

Great. Two questions actually. First is just on margins. You've seen really great operating leverage in the last couple of years. So Brian, how are you thinking about maybe additional efficiencies -- and then understanding the 35% is kind of a floor target. Do you think over time, maybe that even rises as the organization gets more efficient? And then second question on Vault CRM. Salesforce has won a couple of big customers -- how are you thinking about that process? I know there's a lot that still has to play out. But in the event that you do lose some additional share -- are there other parts of the business where you feel really good in terms of to kind of mitigate that on the path to the 2030 targets.

Great. Why don't I start with the margins question, Craig. Nice to see you. So on the 35%, you really do need to think about that as a floor. We don't adjust it year-to-year because it's more of a guardrail or the third rail, if you will, that we don't cross over. We think hard about balancing growth and profitability. And so we set our margin targets annually based on what we think is the best way to grow the business at that time. There are inevitably going to be puts and takes as we look at margins out through 2030. We've got the sales force royalties that will wind down. We'll have some AWS costs that come in. We've got the data cloud network we've got to build. We'll continue to make investments in new product development and Veeva AI and new markets. So we balance all those factors, but I think you've always seen from us, too, that focus on lean team. So we think a lot about having both innovation and efficiency and hopefully, our margins reflect that.

Yes. And then Craig, on your question with regards to Vault CRM, just first, to kind of level set on the overall state of the market. We've always talked about the fact that we wouldn't win every deal. We've referenced it as kind of winning the vast majority. We're on track for that. It's playing out largely as we expected. So I think we're executing well in the market. We're super excited by that. But your point is, yes, they may take some share, potentially, that could be a short-term thing. It could be a longer-term thing that remains to be seen. But -- and how do we mitigate that? There's upside potential in every Vault CRM deal that we win. There's upside potential in one, winning some new customers that we didn't have but also in the customers that commit to Vault CRM now have multiple additional products that we can sell into them that we weren't able to sell into them just a few years ago. And that includes some of the new areas that we've talked about in our service center and our marketing solution and patient and then even somewhat unrelated to Salesforce thing, but opening up in data management with areas like Network and Nitro. So the breadth of the commercial cloud in a sense, has expanded -- and we have a lot of upside opportunity in addition to some potential new customers that we could also win. So we -- I think we'll mitigate that and I feel good about the competitive positioning and the potential to -- to keeping grow the business.

Our next question will come from David Larsen at BTIG.

Can you talk a little bit about your relationship with IQVIA and how you're sharing data with them? How is that progressing? And then Paul, I was pretty surprised to hear of the client talking about how effective and useful the single source of truth is. And it all sounds like you're taking share from the CROs , can you maybe just talk about how the CROs themselves are doing with all of the pricing activity that's going on from a regulatory perspective?

I'll take that one as it relates to IQVIA. We're happy with that partnership. Really happy. You can either fight our partner, and we are fighting for about 10 years and boy, partnering is a lot better. We've been doing that for a couple of months now, and it's just much better. We don't actually share data with IQVIA, right? They have their own data sets. We have our own data sets, but the customers can use those together. So that's the really nice thing. It used to be before the customers knew if they were getting data from IQVIA and some data from Veeva, they might have [ Ajita ] in their teams because IQVIA people not getting along with Veeva people. That's not the case anymore. So this partnership opens up new opportunities for us in data buy some data from Veeva some data from IQVIA. And between the 2 of us, we're going to have most of the data that the customer need. They don't need a lot of third-party band aids. And then as Paul mentioned, the software, right? We have our data management software network in Nitro, which we effectively couldn't sell before the IQVIA agreement now we can. So it just opens up a new potential. Not to mention on the clinical side, right, there's partnership opportunities that we're working on there with IQVIA on the clinical side, they can provide services on top of our software, and we sure would like IQVIA to become a customer of our core clinical applications over time. So that's all to the positive.

David, on your question as it relates to our customer speaker and CROs, he did -- he attributed a lot of value, especially for a very small company. If you think about their size and scale are very small. They do obviously have a fair amount of spend in the clinical space. and clinical safety and beyond. The single source of truth offers a lot of value in connecting all of his departments and streamlining how they operate in many, many different ways, and I think he kind of spoke about that very clearly. And then he did talk a little bit about the kind of the -- in their specific situation, they were able to do some of the work on their own. That -- I would say that's something that's somewhat leading in the industry. I don't know that that's not a standard practice yet. There's a very heavy reliance on the CROs. And I think there will continue to be for a very long time. They're required to help the industry move faster and provide critical services. And I think at certain parts of the market, companies may kind of take the same approach that apply therapeutics did, but I don't know yet that it's a -- I wouldn't call that a trend yet. But obviously, a lot of opportunity can be created.

How would you estimate the pace of clinical trials are now relative to the earlier part of the year?

I'm sorry, can you repeat that?

The pace of clinical trial activity?

Yes, the number of trials that are actually being run relatively stable. We watch it quarter-by-quarter and there's slight ups and slight downs, but it's relatively stable.

Our next question will come from Max Persico with RBC.

I wanted to kind of dig deeper into the capital allocation portion. And just thinking about the balance sheet, you guys have like $6 billion of net cash on the balance sheet. If you were to pursue inorganic opportunities, could you maybe just unpack what those look like and kind of what adjacencies or product or said differently, like gaps in the product portfolio where it might make sense to pursue something that's inorganic versus to build it internally?

Well, I can take that. We're always looking for a need, where do customers have a need. And then when we identify that, then it's either, hey, we don't have the capacity to do anything or maybe we do. And if we do, it's -- we're always evaluating first, is there something we can buy to give us a head start or critical, maybe it's a head start or maybe it's more than a head start. So it just depends on the areas we want to get into. So I would say we're still investing in the clinical area -- in the regulatory area, there are some things we're looking at, I would say, also in the new markets area, right? That's a brand new greenfield. So we may look at things there. But there's not there's not one particular thing that we're looking at. I would say there's new opportunities in AI as well. That's going to open up some very interesting areas, and that could be something interesting as well. There's also tuck-ins, right, where we know that there's a stand-alone company that would just fit better inside of Veeva and be more efficient channel efficiency. So we'll look at those as well. Those would be inside of life sciences. I would say, Max, sometimes it can be transformative too, right? You saw that when we bought Crossix, great business. Now that business is well, I guess, roughly more than tripled since the 5-plus years it's been in Veeva, but that business spawned off a whole new business in Compass. So those kind of things can happen as well.

Our next question will come from Jailendra Singh with Truist. Maybe we'll come back to Jailendra. Our next question will come from David Windley at Jefferies.

This is going to be a good one because I'm in a car. Can you hear me okay? .

We can. And you look sideways, David, but that's okay.

How about that? Okay. So I'll ask 2, Peter, if I can. I believe since the last quarter, you've had a couple of the verbal CRM deals confirm and [indiscernible] Maybe 12 total decisions, 9 for you all and 3 for Salesforce. It seems that those decisions are coming in pretty well, as was described earlier, but maybe the pace is running a little ahead of expectations. I wondered if there was an update on that by the end of [ '26 ] time and it has any implications for your forward look. And then my other question would be on the clinical side in EDC, you've been at kind of 9 there for a while. Is there something in the EDC market that has clients kind of standing pat with where they are?

Paul, do you want to take that CRM one? I can take the EDC one.

Yes, sure. So thanks for the question, David. So yes, you're right. We've -- we're making great progress in top 20. I talked -- I mentioned earlier, just looking across -- broadly across our customer base, we expect to retain the vast majority of customers -- if you look more specifically in top 20, we have 9 wins. I'd actually break top 20 down into 2 buckets. There's a win and there's a go live. And the wins we have 9 wins. Committed to us already. The companies that still need to make a decision will likely make a decision by the early part of 2026 in the -- at least in the top 20 segment of the market. So those are still playing out, they'll play out over the next several months. And then in terms of go lives, we've had 2 top 20s go live already in major markets in Europe and all across Europe and the U.S. will have our first top 20 customer go at globally, will have multiple additional top 20s go live throughout next year, throughout 2026. So we're executing really well, and we're converting wings into go-lives. And I think that's -- it's just a different story. I want you to understand the nuance and there may be wins on the other side on the sales force side, but they're very different in terms of their risk profile in terms of turning them into a go-live. Because it's going to take multiple years to mature the product, if they get to the point where it's mature for what the industry actually needs. Which means when they have a win, the burden is on the customer or the customer's systems integrator to build out everything that they do need. And we know that, that's custom software. We know how hard that is, we know that a lot of that gets abandoned. So it's unlikely that all of those customers go live in all regions, and we think that opens the potential for us to win some of those customers back. So yes, there are numbers. We're going to be transparent about those where we post the latest on a blog on our website. So you can see the very latest kind of scoreboard day by day, but I wanted you to have that full context because there's a lot -- a lot behind there. And I think the long-term winner in the market, and Peter alluded to this is the one who's focused on product excellence and customer success, and I think we're very well positioned there.

All right.

And then, David, you had a question about EDC. Yes, we have 9 of the top 20. I think that's just a natural sort of break point in the market. We have some momentum with some other customers. Hopefully, we have some things to announce announce soon. We'll see about that. But there's no structural thing. I think the idea of having clinical operations and clinical data management, all in one platform together, that's a powerful thing. And that's what's that's what's motivating customers. So we're still very happy with our EDC and the innovation is strong there.

Our next question, we'll come back to Jailendra Singh. Are you there?

And sorry for the technical issue earlier. Thank -- so I actually want to follow up on open evidence partnership -- 2 parts there, are you guys building any incremental tailwinds in your 2030 road map app from the open Vista product offerings or that will be more incremental -- and related to that, the partnership seems to be focused on clinical trials today, but is there an opportunity to expand this partnership to other solutions such as digital marketing costs given the traction open evidence is getting with HCPs?

Yes. I'll take that one. Clearly, any -- nothing of that is figured into our 2030. So any of that would be incremental. As is Veeva AI, right, in our 2030 goal and Veeva AI revenue is also incremental or any major acquisitions would be incremental. Yes, we're focusing on the clinical trial area first. I also think Market Insights will be a great joint offering. We'll develop over time. Crossix. We have established a Crossix partnership already with open evidence. That's around measurement because as doctors are using AI. Pharmaceutical companies want to measure the effectiveness of that AI as a way to disseminate information. So we have a measurement partnership already. So yes, it's early days in the partnership. I love working with those guys because it's -- their customers are doctors, they are using all the time, and that's not our customers, our customers are life sciences companies. Between the two of us, we can really create value.

Our next question will come from Stan Berenshteyn with Wells Fargo.

I want to focus on Data Cloud here. First, on Compass is just going back here, obviously, it's our biggest opportunity. I'm curious if you can give us an update on the progress of your data build-out? And if you can also comment on how receptive clients are here? And are there any hurdles for clients adopting this solution?

For Data Cloud overall, we'll talk about Compass specifically. We're always increasing our data network incrementally. I don't expect any dramatic shifts in our data network. We have overlapping data strategy. So we buy pieces of data that we know are overlapping and then we match in together some emerging. So it's -- I don't expect anything dramatic there in terms of cost or data network. The main barrier, I guess, to adoption [ Encompass ] is just change management with companies, right? Just change management. Do they want to do that change? I think some of the things that will work in our favor now are our partnership with IQVIA because I think customers will be more comfortable using Veeva Data and IQVIA data together and they'll be less likely to sort of use Band-Aid third-party solutions. I think between Veeva and IQVIA, you can get most of the data you need, just fit that together and move on. That -- there's also a trend for people to be economical, right, to not want to spend on too many different vendors, that would play in our favor as well. Now in terms of Data Cloud overall, one of the exciting things is HCP 360. That's a newer offering. We're doing detailed level at the doctor at the health care provider level detailed metrics. That's a newer offering over time, that one can be significant. That, over time, may rival the value of Compass. That's a very significant thing that we couldn't really embark upon without the IQVIA partnership because, again, a customer might have the IQVIA data for certain things. Now that we can make HCP 360 and sell that in on top of the IQVIA data. The customers can match things together easily. We can match things together easily. That can be a growth driver as well.

So that was actually my follow-up question. Was that a rebrand of your Pulse product? And it looks like you have some new products, subproducts announced under the HCP 360 category? Comment on that as well.

Yes. We used to talk about CRM Pulse. We have rebranded that as ACP Access, but those other 2 products -- those are brand new. Those are -- the only thing they're not related to HCP Access is just they're related to the HCP level. So HCP metrics that's detailed topics on doctors around the world, 16,000 detailed topics having to do with what we call [ D4B ], drugs, diseases, devices, diagnoses and biomarkers. So this is used for advanced segmentation and targeting. If you have a very detailed topic of a biopark marker, and you want to know who in France is dealing with this. That's what HCP metric. HCP consent is a really groundbreaking thing that we're starting off actually in Asia, Southeast Asia is where it's starting off. That's where we're gathering industry consent at the HCP level so that a large pharma doesn't have to contact the doctor and say, "Hey, is it okay if we contact you? We get the industry-wide consent, and that makes it hold much more efficient for the whole industry. That's an extremely valuable offering as well. I think you'll see more in the HCP 360 area from Veeva over time. On me a little bit in I wouldn't say an explosion. We're not going to have 10 products in there. But there's not great individual doctor-level data that's outside of the U.S. that's available very much. that's what we're going to focus on real innovation there. AI could power that as well, right? When you think about how AI how you can determine what doctors are doing with AI, you can really power a lot of individual metrics there.

Our next question will come from Steve Valiquette with Mizuho?

I guess if you you could touch on this, and I missed it, I apologize. But just given the token-based economic model that you talked about for the AI agents, just curious among those 4 stepper rollouts that you are kind of planning between now and December of '26. Is there any way to rank order those for the greatest amount of revenue or monetization for Veeva or at a minimum, is there one that maybe just stands out more than the others, the way you see it right now just from a revenue potential?

That's an excellent question. Yes. The real answer is we don't quite know yet. I think one of the heavier usage is going to be in the safety area. Right. Because in that that will be a heavy usage of AI. It could be a significant labor savings for pharmaceutical companies. I would say CRM will be a little bit less so because that's more automation and helping the field teams do what they do. I think in the clinical area, not right away, but over time, it can be significant, particularly the clinical operations. One of the things we're looking at is can we make a self-managing trial master file, what's called an eTMF. That would require a lot of processing and tremendous amount of value there. So long term, I think clinical and safety probably, in my mind, have the most automation, but we have to wait and see how that all plays out. Part of it is we have to develop excellent agents, right? We have to really do that. If they're excellent, people will use them a lot. If they're not, they won't. And I think you're seeing that in AI overall. Right? Anybody can introduce something and with a lot of hype and get somebody to experiment. But is it really repeatable? Is it a no-brainer to drive to drive value, then they'll use more of it. And that's -- Steven, that's why I like our pricing model because the more value the customer gets the more money we get. And that's how it should be. Otherwise, you're selling ferry tails and that comes home to roost over time.

Our next question will come from Charles Rhyee at TD Callon.

Thanks for taking the questions -- maybe if I could ask, obviously, with this administration -- two questions,. The first one is, if you think about the administration and a lot of focus on more restrictive to direct-to-consumer advertising -- can you talk to sort of what kind of impact could have to something like process? And I know the little pivot you talked about HCP 360 as another option here and some of the work we do with open evidence, maybe talk to so what we could foresee maybe over the next 2 years if such things kind of in place. Secondly, on Clinical Cloud here. I've done a great job. And obviously, the side have been one of the big growth areas and expect the 2030 plan -- how much of that you take is we see this impact, particularly in [indiscernible] in-sourcing. And I would think that would supplier pharma to really build up their internal technology erector. When we look at spend of growth expectations, how much of are you baking into that the assumption you're going to have more companies like maybe like Merck? And I think you announced a I know the top comment slows, that was going forward -- how much of that trend do you see continuing in to go in a -- so we think of that as a potential big driver of growth going forward?

Paul, can you hear that .

Yes. There's a little bit of feedback there. So maybe if everybody mutes. Peter, if you want me to -- if you want to take the fire, you want me to take the first one and you take the second?

I can take them. The first was a question about Crossix and the limitation related to the administration digital media, we haven't really seen an impact there. That's pretty targeted. They're talking about some things as it relates to TV ads. Of course, we have to see how that plays out. But remember Crossix is pretty broad. It's measurement of all types of digital information, right? So -- and that's not anything that the government is trying to stop or clamp down on. So we see the Crossix business is really growing. And AI, as more information is disseminated through AI, the measurement is going to be even more important there. And it's not only measurement with Crossix is also audiences. So what are the audiences you're going to target that media at you feel that. So Crossix growth, we don't see impact there. Then your other question was with the large pharma companies, would they in-source more things or outsource more things. That's you call it FSP. For those who don't know about that, right? Sometimes phmcompanies will either in-source and run their own tech or they're outsourced, and they use clinical tech from a CRO. That -- that doesn't matter so much to our market. All of the large, let's say, the top 30 certainly all in-source their tech, even though they do some outsourcing. I think most of the smallest biotechs will outsource their tech -- but that won't impact Veeva because you -- hopefully, you're using [ VeevaTech ] either way. And now, your specific question was, is that anything that's driving the 2030 clinical growth No, not really what's driving that 2030 clinical growth, which, as you rightly pointed out, that's our biggest area of growth, both percentage-wise, volume-wise, et cetera. It's our depth of products. So if you look at our clinical operations suite, for example, that's our -- it's a pretty well established, right? We've had eTMF and CTMS but that's actually the biggest single area of contracted backlog that we have. based on all those new applications, CTMS, Site Connect, study training. They've got disclosures in their payments, right? So there's a big backlog there. And then also in the EDC area. We have a large backlog there and we have eCOA coming in, and we're quite bullish on our randomization and trial supply management as well. So that's where it's coming from. It's broad product portfolio. And we're not done yet in clinical. There's more things to do. So that's where it's coming from.

And our next question will come from Bill McNamara with Evercore.

This is Dan for Kirk. Circling back to AI tokenization, how should we think about the margin profile? Do you see a lot of pricing power as capabilities improve over time?

I'll pick that one up?

Yes, anything that says margin, Brian, takes that. .

We've got our algorithm. Don't need the agent for that one. So on AI, I think a little bit too early to say, Bill. So what we've talked about is that we do expect our pricing will be usage based. And so to some degree, that aligns the revenue and the cost side. But very early days, right? We haven't even gotten into general availability for these yet, haven't started charging for it yet. So we're going to have to see how that plays out a bit. No impact this year and then for next year as we start to get our arms around, and we'll factor that into our guidance at that point.

I would say, Bill, in general, we focus on industry-specific things, right? We're not ChatGPT or Gemini to have thing consumer there. You do have to really watch your margins because it's very, very broad, right? Compute-intensive -- what we're doing is very specific, right, and very high value to the people that were doing it. So the value is not so much in the compute power. It's in the specific logic, the specific way the agents works. So I'm not that concerned about our margin profile really. I think it will be better than the horizontal applications. And you see that all right, you see that in general in industry-specific software. It's harder to make. There's fewer people you can sell it to, but it's a good, profitable business if you make a high-quality product. .

And our next and potential last question will come from Saket Kalia with Barclays.

Okay. Great. Guys, thanks for letting me back in queue here. I want to tuck on just one of the threads earlier on an earlier question. And Brian, maybe the question is for you. The bar chart that sort of showed the breakout of the 4 different product families was super helpful. So thanks very much for that disclosure. I'd love to maybe just dig into the clinical mix at about 21%. Maybe the first part of the question is how do you sort of rank order the products within that 21% in terms of size, qualitatively, of course, and maybe the follow-up to that is, I know that Peter dug into sort of the breadth of product there. But how do we sort of think about which of today's products are going to be the biggest drivers of taking that 21% to call it 30% of that $6 billion run rate in 2030. Sorry, there's a lot there, but does that make sense? .

Yes, a lot there. I think what I heard was what's the main driver of the growth, especially in clinical. And can we put a little more texture on that? I think part of what you're getting at, Saket, is just a big part of what makes Veeva unique, and that's the breadth of the product portfolio. So we'll dive into clinical here, but I think our intention in that chart was really to show how many areas are contributing so significantly to growth out through 2030. Commercial is still a very significant contributor to growth. The other areas outside clinical, quality, regulatory, safety, med tech, all growing proportionally with our overall growth rate. So it's a pretty significant growth story. And then as you touched on clinical, if you run the quick numbers, I don't know if everybody probably had their model handy like you did it implies a clinical growth rate of about 21% per year out through 2030. And so that's the outsized driver of growth over this period. It is, as Peter touched on, it's such a broad growth story. There are so many products that are very significant market sizes. And significant in their growth contribution out through 2030. So in clinical operations, I'd point to RTSM, I would point to Site Connect. I would point to even CTMS and eTMF. Peter touched on some of our largest backlog, which has not yet converted into revenue is in the clean off space and CTMS specifically. So there are a lot of areas contributing there. Study training is quite new, but progressing very quickly. So it's a broad growth story within [ Clin data ]. It's really 3 major products. It's EDC, ECOA and then [ CVB ] are the 3 to watch and all pretty significant contributors out through 2030.

Thanks, Saket. And with that, we reached the end of the Q&A portion of the event. Peter, I'll turn it back over to you for any closing comments.

All right. Thanks, everyone, for joining today. I really appreciated your questions and thanks to the Veeva team and our customers for helping us build this great company and we'll see you on our Q3 earnings call. Thanks.