VEEV Q3 Deep Dive: CRM Transitions and AI Progress Shape Mixed Market Response

Life sciences cloud software provider Veeva Systems (NYSE:VEEV) reported revenue ahead of Wall Streets expectations in Q3 CY2025, with sales up 16% year on year to $811.2 million. Guidance for next quarter’s revenue was better than expected at $808.5 million at the midpoint, 1% above analysts’ estimates. Its non-GAAP profit of $2.04 per share was 4.5% above analysts’ consensus estimates.

Is now the time to buy VEEV? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

Veeva Systems’ third quarter saw revenue and adjusted earnings surpass Wall Street’s expectations, but the market responded negatively. Management attributed the results to ongoing strength in its Crossix data analytics business, improved R&D product demand, and steady services growth. CEO Peter Gassner addressed concerns about customer transitions in its core CRM segment, noting, “CRM is about 20% of total revenue today, down from about 25% two years ago,” and highlighting stability in broader business lines despite individual client shifts. The quarter also featured continued investment in artificial intelligence across product lines, with Gassner describing Veeva AI as “a major initiative” that is delivering “significant innovation across all product areas.”

Looking forward, Veeva’s raised outlook is underpinned by management’s belief in diversified growth from both established and emerging solutions. Gassner emphasized expanding opportunities in clinical and quality management software, citing “momentum in the safety area” and the addition of new applications to the Development Cloud. The company’s AI strategy remains a central focus, with plans for AI-powered agents across software applications by the end of 2026. CFO Brian Van Wagener outlined that the revised guidance reflects “earlier timing of deal closure” and “broad strength across the business,” while cautioning that CRM migration projects and evolving customer adoption patterns could temporarily affect segment performance. Management views integrated platform adoption and successful cross-sell of adjacent products as key to sustaining growth.

Key Insights from Management’s Remarks

Veeva’s call highlighted product diversification, AI development, and customer shifts in CRM as primary themes impacting the quarter’s performance and shaping its near-term outlook.

• CRM migration dynamics: Management addressed customer attrition in its flagship CRM business, noting six of the top 20 customers may opt for alternative solutions. Van Wagener emphasized that CRM now represents a smaller portion of total revenue and that “no impact is expected this year and likely nothing material for next year either.”
• Crossix drives commercial strength: The Crossix data analytics platform continued to perform above expectations, benefiting from increased digital marketing spend in healthcare. Management described Crossix as “becoming more of a standard,” noting its compounding value due to investments in its data network shared with Compass.
• AI initiatives accelerate: Veeva AI is now central to the company’s roadmap, with Gassner stating that AI-powered functionality will span all software applications by 2026. Early customer feedback highlighted demand for “practical solutions,” pushing Veeva to accelerate the rollout of domain-specific AI agents in areas like CRM, safety, and clinical operations.
• Services and consulting expansion: Expanded hiring in product and services teams supported growth, especially in business consulting, which helps customers manage complex change during CRM migrations and broader platform adoption. Van Wagener explained new hires impacted services margins in the short term but are expected to support revenue growth as projects ramp.
• Quality and Development Cloud opportunities: Veeva’s Quality Cloud and Development Cloud saw ongoing adoption across regulated life sciences and manufacturing. Gassner pointed to unique platform breadth—combining quality documentation, management systems, and GXP training—as key differentiators, with new applications (e.g., laboratory information management) opening additional growth avenues.

Drivers of Future Performance

Management expects broader platform adoption, AI integration, and new product launches to drive revenue and margin performance in upcoming quarters, while CRM transitions and industry shifts present both challenges and opportunities.

• AI deployment across offerings: Veeva’s accelerated timeline for AI agent rollout is expected to drive client adoption and efficiency, particularly in clinical and commercial applications. Management views AI as “potentially transformative” for productivity but cautions that change management and robust deployment will take time.
• Commercial cloud and CRM transitions: The migration of major clients to Vault CRM is creating both slowdowns and expansion opportunities. Some customers are considering alternative solutions, but management believes the majority will remain with Veeva, especially as AI and integrated product suites provide additional value.
• Quality, manufacturing, and new markets: Expansion in Quality Cloud and new applications targeting manufacturing and laboratory management are positioned as long-term growth drivers. Gassner cited new wins in laboratory information management and emphasized “greenfield opportunity” as regulated industry needs evolve.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will monitor (1) the pace and success of CRM customer migrations and potential win-backs, (2) the adoption and monetization of new AI-powered features across product lines, and (3) continued growth in Crossix and Quality Cloud offerings. Execution on platform integration and expansion into manufacturing and laboratory management will also be important markers for Veeva’s progress.

Veeva Systems currently trades at $240.42, down from $270.73 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).

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