Veeva Systems Q1 2026 slides: Revenue jumps 17% as operating margins hit 46%

Introduction & Market Context

Veeva Systems Inc. (NYSE:VEEV) released its Q1 fiscal year 2026 quarterly results on May 28, 2025, showcasing continued strong performance in the life sciences cloud software sector. The company’s stock surged 11.04% in after-hours trading, reaching $261, reflecting investor enthusiasm for results that exceeded expectations.

The quarterly presentation revealed robust revenue growth and exceptional operating margins, building on the momentum from the company’s strong Q4 2025 performance. Veeva continues to benefit from what its executives previously described as the life sciences sector being "generally more resilient to economic cycles."

Quarterly Performance Highlights

Veeva reported total revenue of $759 million for Q1 2026, representing a 17% year-over-year increase. This performance continues the company’s pattern of double-digit growth, with subscription revenue remaining the primary driver.

As shown in the following quarterly revenue breakdown:

Subscription revenue reached $635 million in Q1 2026, up 19% year-over-year, while services revenue contributed $124 million, growing at 7% compared to the same period last year. The company’s subscription business continues to demonstrate strong momentum, particularly in its R&D Solutions segment.

The most impressive aspect of Veeva’s Q1 performance was its profitability metrics. Non-GAAP operating income reached $350 million, representing an exceptional operating margin of 46.1% - the highest in recent quarters.

The following chart illustrates this margin expansion:

This margin performance represents a significant improvement from the 40.1% reported in Q1 2025, demonstrating Veeva’s ability to scale efficiently while continuing to grow revenue.

Detailed Financial Analysis

Looking at Veeva’s longer-term financial trajectory, the company has maintained consistent growth in both revenue and profitability. Annual revenue has grown from $1,465 million in FY21 to $2,747 million in FY25, with guidance for FY26 at approximately $3,090-3,100 million.

The following chart shows this multi-year revenue progression:

Subscription revenue continues to account for an increasing proportion of total revenue, representing approximately 84% of the total in Q1 2026. Within the subscription segment, R&D Solutions is now the larger component, with FY26 guidance of approximately $1,400 million compared to Commercial Solutions at approximately $1,225 million.

Veeva’s cash generation capabilities remain strong, with operating cash flow showing steady improvement. The company’s annual operating cash flow has increased from $551 million in FY21 to $1,090 million in FY25, with FY26 guidance of approximately $1,210 million.

This cash flow progression is illustrated below:

The company’s normalized billings, an important forward-looking indicator, reached $2,951 million in FY25 and is projected to grow to approximately $3,320 million in FY26, representing about 12% year-over-year growth.

Forward-Looking Guidance

Veeva provided comprehensive guidance for both Q2 2026 and the full fiscal year. For Q2, the company expects:

For the full fiscal year 2026, Veeva projects:

The company’s FY26 guidance suggests continued strong performance, with total revenue growth of approximately 13% and subscription revenue growth of around 15%. The non-GAAP operating margin is expected to reach approximately 44% for the full year, reflecting continued efficiency improvements.

These projections align with Veeva’s previously stated long-term goal of reaching $6 billion in revenue by 2030, which would require a compound annual growth rate of approximately 14% from FY25 levels.

Strategic Initiatives

The presentation highlighted changes to Veeva’s customer contracting approach, specifically regarding Termination for Convenience (TFC) rights. Effective February 1, 2023, the company standardized TFC rights for customers with multi-year ramping deals, creating more consistency in revenue recognition.

As explained in the presentation:

The company emphasized that this change is not expected to impact cash flows, billings, or total expected revenue on multi-year deals, but it does affect the timing of revenue recognition in some cases.

The presentation also included normalized results for FY24 and FY25 to illustrate the impact of these TFC changes, showing that the underlying business performance remains strong when adjusted for these accounting effects.

Veeva continues to focus on expanding its product portfolio, with previous earnings calls highlighting investments in AI-driven products like Veeva Pulse. The company’s strategic alignment with customers remains a key focus, as it continues to expand its suite of cloud solutions for the life sciences industry.

With strong Q1 2026 results, robust guidance, and a clear strategic direction, Veeva Systems appears well-positioned to maintain its growth trajectory and market leadership in the life sciences cloud software sector.

Full presentation:

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