TLDR
- Q2 revenue rose 17% to $789 million, above forecasts.
- Adjusted EPS of $1.99 beat consensus of $1.90.
- Subscription services revenue grew 17% to $659 million.
- Guidance raised with FY26 revenue projected up to $3.14 billion.
- Stock fell 3.6% despite strong results due to no buyback plan.
Veeva Systems Inc. (NYSE: VEEV) closed at $293.59 on August 27, 2025, before dropping 4.23% to $281.58 in pre-market trading.
The company released its Q2 fiscal 2026 results on August 27, delivering an earnings beat and raised guidance, but shares slipped as investors reacted negatively to the absence of a share repurchase program.
Strong Quarterly Results
For the quarter ended July 31, Veeva reported revenue of $789.1 million, representing a 16.7% increase from $676.2 million in the prior year and ahead of Wall Street’s $768.3 million estimate. Adjusted earnings per share were $1.99, surpassing the $1.90 consensus. GAAP earnings came in at $200.3 million, or $1.19 per share, compared with $171 million, or $1.04 per share, a year ago.
Subscription services revenue, which makes up the bulk of Veeva’s business, rose 17% year over year to $659.2 million. Non-GAAP operating income increased 26% to $352.6 million, reflecting the company’s ability to scale efficiently while investing in growth initiatives.
Guidance and Outlook
For Q3 fiscal 2026, Veeva projects revenue between $790 million and $793 million, exceeding analyst expectations of $779.3 million. Adjusted EPS guidance of $1.94 to $1.95 also exceeded consensus estimates of $1.89.
The company raised its full-year fiscal 2026 outlook. Revenue is expected to reach between $3.134 billion and $3.140 billion, supported by non-GAAP operating income of approximately $1.388 billion. Full-year adjusted EPS is forecast around $7.78, signaling steady earnings expansion.
Strategic Developments
Veeva announced progress in its artificial intelligence efforts, with plans to integrate AI agents into its Vault platform. The company emphasized AI’s role in transforming life sciences and strengthening its structural advantage in consulting and implementation.
The quarter also marked significant milestones for its Vault CRM Suite, which is gradually replacing legacy systems. Transition costs remain a short-term expense, but management expects long-term benefits in efficiency and adoption.
In a significant development, Veeva resolved its longstanding legal dispute with IQVIA and entered a global partnership, enabling closer integration with Veeva’s Commercial Cloud. While not expected to impact revenue this year materially, the agreement sets the stage for stronger collaboration.
Market Performance
Despite the strong quarter, Veeva’s stock declined as investors focused on the lack of a buyback plan. Still, performance remains solid with year-to-date returns of 39.6% and one-year gains of 46.6%, both well above the S&P 500. Over three years, VEEV has gained 42.2%, while its five-year return stands at 8.7%, lagging broader market performance.
Veeva’s continued execution, AI innovation, and strategic partnerships support its long-term growth outlook, though near-term investor sentiment remains cautious.
