Ladies and gentlemen, thank you for standing by. My name is Abby, and I will be your conference operator today. At this time, I would like to welcome everyone to the Veeva Systems Fiscal 2026 First Quarter Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during that time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one a second time. Thank you. I would now like to turn the conference over to Gunnar Hansen, Senior Director, Investor Relations. You may begin. Good afternoon, and welcome to Veeva's Fiscal 2026 First Quarter Earnings Conference Call for the quarter ending April 30th, 2025. As a reminder, we posted prepared remarks on Veeva's Investor Relations website just after 1:00 P.M. Pacific today. We hope you have had a chance to read them before the call. Today's call will be used primarily for Q&A. With me today for Q&A are Peter Gassner, our Chief Executive Officer; Paul Shawah, EVP Strategy; and Brian Van Wagener, our Chief Financial Officer. During this call, we may make forward-looking statements regarding the trends, our strategies, and the anticipated performance of the business, including guidance regarding future financial results. These forward-looking statements will be based on our current views and expectations and are subject to various risks and uncertainties. Our actual results may differ materially. Please refer to the risks listed in our earnings release and the risk factors included in our most recent filing on Form 10-K. Forward-looking statements made during the call are being made as of today, May 28th, 2025, based on the facts available to us today. If this call is replayed or reviewed after today, the information presented during the call may not contain current or accurate information. Veeva disclaims any obligation to update or revise any forward-looking statements. We may discuss our guidance on today's call, but we will not provide any further guidance or updates on our performance during the quarter unless we do so in a public forum. On the call, we may 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 today's earnings release and in the supplemental investor presentation, both of which are available on our website. With that, thank you for joining us, and I'll turn the call over to Peter. Thank you, Gunnar, and welcome everyone to the call. It was a strong start to the year with results above our guidance. Total revenue in the quarter was $759 million and non-GAAP operating margin of 46%. Thanks to the team and our customers, we have now achieved our calendar 2025 revenue run rate goal of $3 billion. Although the macro environment is more uncertain today compared to 90 days ago, we have not seen a material change to our financial results or pipeline at this time. Setting our sights on our 2030 goals last year has really aligned and energized Veeva. I consider this our best first quarter ever in how we're executing across the company. Veeva AI is a major initiative and off to a good start. I'm especially excited about the positive impact Veeva AI can have on the life sciences industry. We'll now open up the call to your questions. Thank you. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. To be able to take as many questions as possible, we ask that you please limit yourself to one question and one follow-up. Again, it is star one if you would like to join the queue. Our first question comes from the line of Joe Vruwink with Baird. Your line is open. Great. Thanks for taking my questions. I wanted to start with your perspective on the 200 customers moving to Vault or considering Vault CRM for next year. I would imagine many of these are migrations. Have the reasons customers cited behind migration decisions changed at all? The reason I ask is it seems like Veeva at this point has really delivered on a product roadmap once shared. Customers can now see things like Service Center and Campaign Manager. You also now have, I would say, more fidelity behind the AI strategy. Are these starting to factor into why now, why the decisions? Maybe on the flip side, when customers are not moving with you, what is coming up in those decisions? Hey, Joe, this is Paul. Thanks for getting us kicked off here. Just to be clear on that, remember one year ago we were at a handful of customers live. Today we're at about, we're over 80 customers live. I think the number you're referencing is about one year from now where we're on track to be about 200 customers live on Vault CRM. Vault CRM is going really well. It's working. Now, the why. Why is that? It's better than Veeva CRM. Customers like Veeva CRM, but it's better. What makes up that 200 number are really two things. It's new customers and it's migrations. In the quarter, as an example, we added 28 Vault CRM customers to that number. We added 28 Vault CRM customers total, and about half of those were migrations, and the other half were net new customers to Veeva. That is how to think about what will make up that 200: new customers and migrations. The reasons are everything that we have talked about. It is better. Our AI strategy. We will have agents in the product by the end of the year. It is the bringing sales, marketing, and medical together. We are innovating in a lot of different ways. New companies want to get started there, and other customers want to migrate. In terms of why customers may not make a decision for Veeva, and we have seen some of this, some companies want more of a custom-type product. I do not expect that to be the path. We expect to win and retain the vast majority. Okay. That's great. Thank you, Paul. I guess on the go-forward forecast, it's an interesting contrast when you get a more dynamic macro but outright strength for Veeva. When you may be honing in on some of the more discretionary aspects of your revenue model, and I'm thinking about services or maybe the prospects audience building, would you expect to see those weaken at this point if there were maybe looming signs of pressure for the second half? Is the fact that maybe that pressure isn't being seen factoring into how you think about the rest of the year? That's a pretty nuanced question. As Peter, I'll take that one. As we mentioned in the prepared remarks, the macro environment is uncertain, and there's some uncertainty largely caused by the dynamics in the U.S. administration. Now, we haven't seen that in our results, and we haven't seen that in our pipelines. Not to say that we would or we wouldn't going forward, but we haven't seen it so far. Generally, what we could see is funding issues could come. If there's uncertainty, that could come in the small market, the smaller side of the biopharma. That could delay projects and things like that and could cause some conservatism in large pharma. Certain things like Crossix may not be affected by that because Crossix has a sort of shorter business cycle, and it's really humming along. It's a way to get quick ROI. I actually don't think it would affect Crossix that much, but we'll just have to wait and see how things play out. Thank you. Our next question comes from the line of Ken Wong with Oppenheimer. Your line is open. Fantastic. Peter, I wanted to perhaps address the comment you called out in the prepared remarks in terms of the horizontal market. It seems like you guys have made at least some progress there, and you're moving forward on horizontal CRM. Could you provide us just a little more color in terms of how you're thinking about the approach there, the potential differentiation, and to the extent there's any kind of timeline? That'd be much appreciated. Yeah. We're pretty excited about that new market, so horizontal business applications, which we announced last year. Now, what we said in the prepared remarks is that we're focusing in for our first area in the horizontal CRM. Now, when we look at that, there are many areas. The exact product area, that's something we have to determine inside CRM. The exact customer segments, that's something we have to determine as well. We'll go through those motions and figure that out. I'm excited about getting customers. I hope to have first customers by the end of the year. I hope to have that. You start making the customer successful, and that's really how we've grown our business. It's outside of life sciences, this new market. It's a different team. It's not going to be confused with life sciences. It's a different operating model. The one thing that is common is we can live our values of customer success and employee success and speed and focus just on customer success and product excellence. I'm pretty excited about it, actually, what we're going to do out there. It's a whole new Veeva out there. Appreciate the color. We're looking forward to it as well. Paul, I wanted to maybe dive into the commercial strength, meaningful acceleration there. I guess fairly surprising considering most of us view that as maybe a more mature business. Where are you seeing this outsized growth? You called out Crossix. Are there other areas of the business, whether it's cross-selling something or new products, that's really driving that upside? Yeah. So you're right. I mean, we're executing well across the entire commercial area, but I would specifically call out Crossix. We invested heavily in the product over the last couple of years, and that's paying off both in the marketing and optimization space, also in audiences. I remember that can be a little lumpy. There can be ups and downs quarter by quarter, but over the long term, that will be a really nice growth business for us. Crossix did well. Of course, we're executing well in all the other areas. CRM is relatively stable, which is nice momentum as we look across Data Cloud, including Link, Compass, early days in those areas, but we're executing well. Fantastic. Thanks, Paul. Our next question comes from the line of Brent Bracelin with Piper Sandler. Your line is open. Thank you. Good afternoon. Maybe for Brian, sticking with commercial strength here, this is the highest growth rate we've seen in kind of three years. As we double-click, you flag Crossix. Any other drivers you would flag? I know Data Cloud's early, but is there a contribution there? Any color, just given the magnitude of acceleration and highest growth in three years? Any other color would be appreciated. Thanks. Yeah. Hey, Brent. Really happy with the execution across the business in Q1, and the revenue growth rate that we saw really reflects, I think, broad-based execution. We saw strong growth out of our R&D business as well with guidance for the year now at 19%. That remains a really strong growth engine for the business. The outperformance in the quarter, as we called out in some of the prepared remarks and you mentioned, was really driven by Crossix, which outperformed our expectations. Within Crossix, predominantly driven by the usage-based area of that business. That can be a little bit lumpy from quarter to quarter, and that's reflected in our guide for the full year. We're seeing really strong growth out of that business over the long term. It's a business that's growing at more than 30% year- over -year. We think it can continue to contribute meaningfully to our growth over the long term. Got it. Over 30% growth. Super helpful color there. Peter, just to follow up on horizontal CRM, again, it's your first area. Sounds like you're very excited. Why the excitement? I ask why because you have Salesforce that's kind of a dominant player in the large enterprise space, and then you have HubSpot that's kind of emerged on the scene here in SMB. What's unique about horizontal CRM that gets you excited about what Veeva is thinking about here? Thanks. It's just unique in that there's so many things we can do. Now, I would say Veeva is more expert at large markets as well, large enterprises than we would be in the QuickBooks type or HubSpot area. Yeah, I think you'll see us target there, but there's many, many entry points we can go after. We just think it's in need of innovation when we look at the technology that we can bring to it and our business model, our public benefit corporation orientation. We'll be a very differentiated offering. We're excited about it. It's this excitement of getting close to getting our first customers and our first product and knowing that we have a great team on it. I think something what you're hearing is the excitement of some of the fundamental technology breakthroughs, which we're not going to go into on this call. I think people got used to that there's nothing new that you could do. Actually, there is something new that you can do. We're pretty excited about it. Call me intrigued. We'll be interested to watch. Thank you so much. Thanks. Our next question comes from the line of Saket Kalia with Barclays. Your line is open. Okay. Great. Hey, guys. Thanks for taking my questions here and nice start to the year. Peter, maybe for you, just to dig into the Crossix business because it's been mentioned a few times, and it seems like it was one of the main drivers to some of the billing strength outside of FX. Can we just dig into that? I mean, it seems like you're gaining market share. There have been questions just around macro uncertainty and whether customers would be willing to invest as much in tools like that. But this seems to be bucking the trend. Can you go one level deeper into what you think is really driving that strength in Crossix? Yeah. At the highest level, I would say we're growing the product. When we started with clinical back in the day, we had one application, and then we had two in the clinical operations, being eTMF and CTMS. Now we have about five major applications in there. The same thing with Crossix. Crossix started historically with digital consumer measurement and optimization. Now we're starting to get very strong in A2P, healthcare provider measurement and optimization, and then audiences across both segments. Our offering is getting more broad and getting more valuable. When we sell a pretty comprehensive Crossix deal, that value is maybe double in the size of what it was three years ago because of the value we can provide. We also are seeing companies really, and it's a trend that continues, lean into leveraging their digital spend. In the United States, if a company could spend, let's say, $500 million in digital advertising, if they could double the value of that, that's very fast ROI. That's not a 12-month implementation. That's a very quick implementation. You're seeing that. Also, you're seeing us take a more strategic approach, meaning the integration with our CRM products and optimizing more for long-term agreements rather than shorter-term agreements, and just getting higher in the account. It's a combination of factors. I'll honestly say it's about a great team on Crossix too. Great leadership all the way down to the analyst level and the leadership. They're just executing. They're humming along. They're kind of winning the race. Got it. That was a super helpful answer. Brian, maybe for my follow-up for you, it's great to see the higher billings guide for the year. I don't think a lot of folks were expecting that, even excluding the FX tailwind. Can you just maybe dig into some of the drivers there? Maybe we hit on some of it here with Crossix, but also some of the other drivers there, maybe like billings duration or any other things that you want to flag as we thought about the slightly higher guide for billings for the year. Yeah. Hey, Saket. So yeah, two major factors, as you mentioned. One is the FX guidance that's flowing through to billings, but then the other is largely the revenue outperformance that we saw in Q1 from the subscription side coming through to billings. There's always a little bit of timing and duration things at the margin, and there's some of that in there. The main two factors are FX and then the revenue beat. Super helpful. Thanks, guys. Our next question comes from the line of Rishi Jaluria with RBC. Your line is open. Oh, wonderful. Thanks so much for taking my questions. Maybe two strategically focused ones. Number one, look, I wanted to think about the CRM business. You've talked about getting into marketing and service, and you came out with some initial applications there. Maybe can you talk about what you're seeing from early customer feedback and adoption of these? At what point, whether it's in the next year, three years, five years, can we see those actually become share gainers in the space? I have a quick follow-up. Yeah. Hey, Rishi. We're early in both of those areas. To your point, since we made the move to Vault CRM, we've been able to innovate in totally different ways, new ways. That includes bringing sales and marketing and service all together in a single customer database. That hasn't been done in life sciences. That's resonating. That's really good for customers. It'll help customers become more customer-centric. This is a significant value proposition, but we're very early days. The exciting news is we have some early customers in both of those areas. We're just getting started. Remember, the requirement is that they're on Vault CRM. For someone to get started with, let's say, Campaign Manager or Service Center, the first step is moving up, migrating to Vault CRM or getting started on Vault CRM. It's a smaller pool to play in, at least today, and we're going to focus, which means we'll largely focus on some smaller and mid-sized customers. But then over time, I expect that we'll make even more progress in the mid-size and even in the large company. There's a long journey, but we're innovating in a really different way. It's something to be excited about. All right. Wonderful. That's really helpful. And then, Peter, on the AI front, look, I appreciate that you're taking a more gradual and slow approach to AI versus kind of over-promising and under-delivering, which I think is always the fear with any new technological wave. Maybe can you walk us through, number one, how you're kind of thinking on AI in life sciences and the willingness to adopt it has evolved? And number two, if we think about kind of what this can really unlock for customers over time, where do you kind of see it shaking out other than the typical efficiency gains? Because I'm sure that there's a major unlock that you can see over time using AI. Thanks. Yeah. I do. I'm very bullish about what Veeva can bring with AI to the life sciences industry. I think if you look over the next three, four, five years out to 2030, I think Veeva can help increase life sciences efficiency by 15% or so with Veeva AI. That's a huge number when you look at that. I really think it will be a step change. Why I'm so bullish on it? Because Veeva has the core applications, and we're building the AI very deeply embedded in the core applications. When we build AI, we're not building a generic AI. We're building a medical, legal, regulatory approval agent, a CRM agent that does pre-call planning, a safety AI agent that can transcribe pretext into a safety case. Deep AI applications. You need the deep core applications and the AI working together. That's where the magic will happen. It's just very, very clear to me. That's what I'm excited about. I think the core technology has settled down a little bit in terms of the large language models, what's going on there. It's very clear that this AI is a new computing paradigm. It's something that can automate certain things that humans can do, which basic software, traditional software, can do that. It doesn't work like a human. This is non-deterministic computing. It can automate some things that a human can do, but it doesn't obviate the need for a core application. We let the core get settled down, of the large language models get settled down. We developed our partner program. We developed our direct data API. Now we got a specific and separate team working on Veeva AI. I couldn't be more pleased with our positioning where we're at right now with AI. Very helpful. Thank you so much. Our next question comes from the line of Brian Peterson with Raymond James. Your line is open. Thanks, gentlemen. Congrats on the strong quarter. Paul, I know you talk with a lot of customers and how they're thinking about their go-to-market motion. I'm curious, on the relative prioritization of IT spend, if we think about it in the lens of sales versus marketing versus customer service, are any of those areas seeing increased or decreased prioritization in kind of a Gen AI world? Any thoughts on that? Yeah. Hey, Brian. Thanks for the question. Yeah. So where is AI likely to be across sales, marketing, or service? Yeah. It's a good question. Overall, the way to think about the pharma industry is the human relationships, the sales organizations, the spend on the sales force is very significant and very meaningful. If you can provide productivity gains and effectiveness gains for the field team, you have a very significant impact. I think we're seeing a lot of focus in the sales side, which is why one of our first agents will be in the core CRM space, the CRM bot. We think we can make customers significantly more productive from a field team perspective. It's not to say that we're not seeing investment in other areas. Certainly, customer service, case intake is an example. There are a lot of examples on the marketing side. I would prioritize sales higher given the size, the importance, the relationships, and the potential impact we're to have. Got it. Appreciate the call. Brian, I know in the prepared remarks, Peter mentioned some of the ease from some of the customers. I'm curious, as you think about the outlook for the remainder of the year, was there any incremental caution that you factored into the guidance? Thanks, guys. Thanks, Brian. Without a doubt, I'd say there's more uncertainty today than 90 days ago. If that persists, it's not going to have a positive impact on the life sciences industry or on patients. With that said, so much of our business is subscription-based. It's in mission-critical areas. The industry that we serve is more long-term oriented. In the short term, we're a bit more insulated from some of those pressures. As we said in the prepared remarks, we're not really seeing any material impact to our financials or pipeline yet. We've got deals progressing as expected. Contracts are renewing. Projects are proceeding on or ahead of schedule. Given all that, our guidance right now assumes that things continue roughly as they are now. That means that there's more uncertainty in the world and the unease that comes with that, but that customers continue to navigate it effectively. Thanks, Brian. Our next question comes from Stan Berenshteyn with Wells Fargo Securities. Your line is open. Hi. Thanks for taking my questions. First, maybe going back to Crossix, we heard recently that maybe there's been some pull forward in commercial activity by BioPharma into the first half of the year. I'm just curious if you're seeing any signs of this within Crossix. Maybe you can square that with how Crossix has performed year to date versus same time last year. Yeah. I'll take that one. This is Peter. I wouldn't say any particular pull forward we're seeing. I think we're seeing, in the case of Crossix, customers just wanting to build up their digital marketing capabilities. Part of that is being more effective on where they're putting their campaigns and their audiences. I wouldn't say any particular pull forward. Okay. Then a follow-up on the Compass product. I think it's been a little bit more than a year since you launched Prescriber, a national Compass product. We're just hoping to get an update on the adoption and momentum trends under the segment. Thanks. Yeah. Compass is doing well. We added about 10 brands this quarter, mostly in the patient area, and that continues to grow. I've often said Compass is a marathon. The industry is used to doing things in a certain way with data, and it's a hard business to get into. We're making good progress there. In terms of Prescriber national, I would say we're still definitely in the early adopter area. We've got a few early adopters. Pipeline's getting a bit bigger. We're focused on adding to our data network and also focusing on customer success. In Prescriber national, it's just not a mature business yet. It's not a business to scale yet. We're encouraged by what we see from early adopters. All right. Thanks so much. Our next question comes from the line of Tyler Radke with Citi. Your line is open. Thank you for taking the questions. Peter, wanted to start with you on the macro environment. You talked about some of the tariff uncertainty not being great for business, which I think we can all appreciate. One of the things that we have heard is some signs of potential reshoring in terms of the manufacturing within the pharma industry. To what extent do you—how do you view this opportunity? Is this a potential tailwind? I know it's potentially a ways away, but we'd just love to hear the conversations you're having with customers and how Veeva could potentially benefit from that. Specifically about the tariffs and the potential reshoring, I would not say that is a headwind or a tailwind for Veeva, actually. There, we are really looking at enterprise type of capabilities in our large customers. And then for small customers, for small biotech, they would not generally have multiple manufacturing sites, and they would use contract manufacturers. I think it is not a headwind. There could be a tailwind if they have to do things—sorry, there could be a headwind if they have to do things that take higher priority. Let's say they have some long-term capabilities projects in the quality area that they want to get started on, but there is some emergency reshoring that they have to do that could take strategic focus and delay projects. Now, having said that, we have seen no evidence of that so far. Okay. Great. A follow-up on the—I guess on the updated guidance for the full year. An earlier question was sort of asked, but I guess if we think about the change versus 90 days ago on the revenue and billings guide, are you increasing discount rates or any type of deterioration in close rate assumptions, or are you assuming a consistent macro environment versus 90 days ago? I think what investors are trying to understand is this was a very solid quarter, but would the raise be even greater had you not seen kind of the macro and tariff uncertainty play out in the quarter? Yeah. I think we really have not seen any impact from the macro on the velocity of business, on close rates, or those kinds of things. What you're seeing in Q1 is, again, that outperformance largely of the Crossix segment and then the timing of services revenue. That timing, we expect to kind of normalize back out as we go through Q2 to Q4 on services. The beat on the Q1 Crossix side really pulls through to the balance of the year, and you see that reflected in the billings guide going up as well. Outside of those factors, I would say the business is largely as we expected it to be 90 days ago. We're seeing really good execution in all the areas of the business and feeling really good about the trajectory going forward for the year. Okay. Great. Thank you. Our next question comes from the line of Craig Hettenbach with Morgan Stanley. Your line is open. Great. Thank you. Just following up on the macro, what do you think would prove to be most insulated? If things do get more difficult into the back half, are there parts of the business you'd expect to be kind of most insulated versus some areas that you'd expect to maybe see some impact if things were to deteriorate? I'll take that one. Hard to estimate too much because there are multiple ways that things could deteriorate. It could be interest rates. It could be drug pricing. It could be specific to one country or another. It could be geopolitical conflict. Hard to really speculate there. The most durable part of the business is our long-term subscription contracts because they just do not really get affected by things. Business consulting engagements, services engagements, those are quicker to get impacted. If things get very tough, which we saw a number of years ago, it can impact our really small emerging biotechs because they cannot get funding, and projects would stop. Sometimes they make a lot of business if the funding environment is dire enough. The bulk of our business is in these long-term subscription projects, and those just aren't susceptible to those short-term swings. That's helpful. Thanks. Just as a follow-up, Peter, understanding it's Veeva AI just recently kind of rolled out, any initial feedback from customers and how you think in the coming years how it might impact your overall business? Yeah. The reception from customers is very positive because it just makes sense. It's not a lot of hype. They need the AI working with the core applications. They know Veeva cares about the industry, will be responsible with the data. And they can see the tangible use cases. There is a lot of excitement. How it can move our business forward, I think Veeva AI is something that we will charge an appropriate license fee for. I think it'll be in that positive for Veeva. We don't have that packaging worked out yet. We do want to price it so that it can be very reasonable and broadly adopted, help the industry move forward. Yes, it certainly helps our revenue all the time, but we don't have any specific projections at this time. Understood. Thank you. Thanks. Our next question comes from the line of Kirk Materne with Evercore ISI. Your line is open. This is Bill on for Kirk, and thanks for taking my question. Peter, can you highlight some of the key takeaways from you from the commercial summit last week? Sure. Commercial summit, I would say first thing I would take away, it sounds very basic, but the customer's feeling is good. I probably had more than 50 one-on-one conversations that were each of 5 to 10 minutes or more each. That is a pretty representative sample size and non-scripted. Customer's feeling is good. That means we're executing well. We are hiring good people that have the right customer relationships, that are competent, that are bringing value in our sales, services, business consulting, product management. That is number one. I think that is not to be underrated because that is the gift that will bring value over the next 5 to 10 years. The next one is a whole different vibe around Veeva's era, around Vault's era. 80 customers live this time versus just a handful last year. Products mature. A couple of big top 20 customers midway in flight. We had one of them Zoom into the—couldn't actually be there. The person had some things where they couldn't be there at the summit. They Zoomed in. This is the person, the SVP of digital from a top 20 pharma that's confirmed, "Yes, we'll be live here in a month or so and fully live in all of our multiple close to 20,000 people around the world by the end of the year." That was a whole different vibe there. Veeva AI, making it real. When I showed the demo of Veeva AI, one example of what Veeva AI can do with CRM bot, you could just see the aha moment go with the customers because what they want is they want AI to help them with the engagement planning, right? Do all that work. All the data entry afterwards, do that work so they can focus on the engagement in their field. You just see the light bulbs going on. That is what I am excited about, about Veeva AI. I want to be known as the company that, wow, they really did AI right. They did it in a durable way. It is adding a ton of value where Veeva is bringing in $1 and customers are getting $4 of value. Wow, that was done right. There was that feeling for the first time of somewhat relief because we have been measuring carefully on AI and not jumping in and the hyping. You could see that relief from the customers. Yeah, this is the Veeva. Here it goes, right? They have a plan. Now they are starting to execute and making plans around it. That was the excitement. The last thing I'll mention is that our data business, Data Cloud, is becoming really real. People are starting to understand, "Hey, we have Commercial Cloud and Data Cloud, and they work together. They're modular, but you can connect them." That is what our commercial solutions are. Veeva is not just the CRM company anymore. I remember some years ago on an earnings call, multiple years ago, I said, "Hey, CRM over time will be not the major part of our commercial solutions." You could see that at Summit. The CRM add-on products, marketing, Service Center, Data Cloud, Crossix, business consulting. CRM is the start of our commercial core CRM. That was. You asked a small question. I guess you got more of an answer than you were looking for. You can tell the excitement about Commercial Summit. About 2,000 people there and so many ideas exchanged. It was wonderful. I think we should keep doing it. Paul, do you think we should keep doing our summits? Count me in. Paul's not. Absolutely. You think we count you in? Okay. We're going to keep doing them. Yeah. Great. Thanks for that answer. Thank you. Thank you. Our next question comes from the line of Jailendra Singh with Truist Securities. Your line is open. Yeah. Thank you. Thanks for taking my questions. And congrats on a strong quarter. I wanted to ask about the CRM conversion to Veeva Vault CRM. I understand these top 20 pharma companies still have some time before they can decide, and you have three top 20 going live in 2026. But compared to your internal expectations, I mean, expectations you had maybe 18, 24 months back, are you surprised by the pace at which these top 20 are coming through? What are the most common decision-making drivers you come across in terms of these top 20 pharma companies? Yeah. First, I would say overall, we're making great progress in top 20, and we're on track with our expectations as I think back a year or two years ago on track, maybe even a little bit ahead of what our expectations were. Now, you think about what does that timing look like and what makes up that decision-making process. Customers are happy with Veeva CRM. We're not pushing anybody to move, so there's not really that urgency. Now, eventually, there will be. We've talked about the red zone, which starts to kick in in that 2027 timeframe, particularly if you're a large customer, a top 20 company. You want to make a decision before that 2027 timeframe, which is why we've said most large companies will make decisions either in 2025 or in 2026. They'll have plenty of time to migrate and move. Customers are happy. They're going to make that decision when they're ready. We're not doing anything unnatural to force them into a specific timeline. Now, the ones that have made decisions already, and there's four that have publicly announced, or four top 20s, I should say, that have publicly announced their decision, they want to move fast. They want to get to all of the innovation that you heard us talking about, and they want to get this behind them and be able to take advantage of things like Veeva AI, our sales and marketing and medical, and bringing all those pieces together and all the innovation, all the excitement. We're doing this in a customer-friendly way. We're excited with the progress. I think we're very much on track. Okay. And then a quick follow-up on the topic of takeaways from the Veeva Commercial Summit. Thanks for all the color. Very helpful. As you compare to the conversations you were having last year's summit, did you guys come across pharma executives having increased focus on ROI, budget priorities, or is it more or less same as compared to last year? In terms of the feeling from the customers, similar to last year. I think they have last year, there was still some uncertainty how the administration was going to fold. There was a U.S. presidential election, things like that. That uncertainty in a way is gone because they have a new environment that they're working in. Similar in that they're focused on execution. I think leaning into the digital a bit more. That's one thing I noticed, leaning into the digital marketing a bit more and the data and analytics. Getting more systematic, a bit more systematic in commercial. Got it. Thank you. Ladies and gentlemen, to be able to take all of our remaining questions in the time we have left, we ask that you please limit yourself to one question going forward. Our next question comes from the line of Jeff Garro with Stephens. Your line is open. Yeah. Good afternoon. Thanks for taking the question. Follow-up on that last one and also some earlier ones on the momentum for Crossix. I was hoping you could discuss the mix of customers' commercial focus on digital versus in-person spend and how Veeva is particularly differentiated there to enable both digital and in-person commercial activities and help your customers evaluate the effectiveness of both. Thanks. Yeah. In terms of the mix, I didn't notice or sense any broad change in mix. Now, we're not always in those discussions, but I didn't notice them anymore. What I did notice is, hey, using technology, particularly Crossix, can I have the same amount of spend in digital and double the impact? That's really what Crossix is about. Now, in terms of the field or the CRM, I think there's a lot of excitement about AI to say it's not easy to ramp up or ramp down my field force. What I can do is I'd like to keep that field force the same, roughly, and just get more productivity out of my team as I have more launches and more content. I think that's what I'm seeing there. Our next question comes from the line of Andrew DeGasperi with BNP Paribas. Your line is open. Thanks for taking my question. Maybe as a follow-up to the horizontal CRM product, you mentioned it's a different team. I guess I'm wondering, number one is, have those investments been made in terms of people and headcount? Is that already in place? Secondly, is M&A on the horizon for this particular product, or is this something probably related to another opportunity? Thanks. Yeah. The core team is in place. Of course, we'll be adding to that team incrementally. You have to keep the team small at first so it can execute with really fast speed and quality on the foundations. Then you incrementally add to that team, and I'm sure we'll be doing that over the next two, three years, two, three, four years. That is normal. We have a heartbeat for that. I'm sorry. That was about the team. You asked the second question. I didn't catch it. It was on M&A. I know you mentioned this would be an area that you would focus on. I'm just wondering if the M&A will be focused on the CRM product, or would it be for other areas? Yeah. For M&A, we're keeping a really wide aperture on that. If we can see something that would be synergistic with Veeva, most likely that would be in the area that is horizontal applications. It could be CRM, could be other things. We would look at that. We've been very disciplined on our acquisitions, and we have not had any failed acquisitions, and that's unusual. We like acquisitions like Crossix where we can really create a lot of value and create a lot of innovation. That is the type of thing that we'd be looking for outside of life sciences. It could be in CRM. It could be in a different area. Thanks. Our next question comes from the line of Gabriela Borges with Goldman Sachs. Your line is open. Hi. Good afternoon. Thank you for taking the question. I'd like to follow up on some of the positive commentary on eTMF with asking about an update for EDC. Peter, perhaps you could comment, how are some of those conversations progressing on new customers for EDC and any updated color on how we should think about the ramp of revenue for the customer wins that you've already announced? Thank you. Yeah. You touched on the eTMF, and I'll just spend a little bit there. I'm really excited about that. The 19th top 20, and we feel like we have a pretty good path to have 20 of the top 20 on eTMF. That's just amazing, and we view that as just an honor. What we want to do when we get that simplification and standardization for the industry is just double down and invest and help the industry be more efficient. I want the whole Veeva team to know, and yourselves as investors and our customers to know is that's a signal to Veeva to really double down on investment. That's the type of company Veeva is. We view that as a privilege. eTMF is there, and I'm confident over time, actually, EDC will get there. I think. It will take time. Today, we have nine out of the top 20 are using our EDC. Now, some of those are very early, and those are multi-year ramp deals. I think we have a path to additional top 20s in EDC. I do not see anything imminent right away, but I am sure customer success will get there over time because we have a structural advantage. People want to integrate a clinical platform from the clinical operations to the clinical data management, even reaching out to the research site. If we keep executing, our future is very bright in clinical. Thank you for the color. Congratulations on a strong Q1. Thank you. Our next question comes from the line of Allan Verkhovski with Scotiabank. Your line is open. Hey, guys. Fingers out for me as well in the great quarter. I want to just double-click on how you mentioned discussions with customers are starting to reflect the general unease. Can you share more color on how that developed through the quarter? What types of customers are expressing this more? I would just, in general, appreciate more color on this. Thank you. Yeah. Now, that color is things that we get in personal conversations, mainly one-on-one conversations, sometimes by Zoom, sometimes in person. It is not anything that shows up in the financial results or the pipeline. As you would expect, it is multifaceted. Some people are concerned about drug launches, and they are concerned about what is called their PDUFA date, their approvals. They see some open vacancies in the FDA, and they wonder who is going to fill those and whether they are going to fill those in time. They have a little logic there. There are people concerned about what types of acquisitions they might do. If they might do them, is there going to be an impact on drug pricing due to the executive order because that may deter or accelerate their plans for acquisitions? It is just broad-based across life sciences. For the smaller biotechs, what they would be wondering about is how's this going to affect the funding environment because it's pretty dynamic with which way will interest rates go and how will this affect funding. They're watching the price of bonds and things, and they're wondering, when we need another round, are we going to get it? Do we need to be more conservative or not? Those are the type of discussions. It's varied, not dominated by one particular topic. Our next question comes from the line of Steven Valiquette with Mizuho Securities. Your line is open. Good afternoon, Peter and Brian. Let me offer my congrats on the strong results as well. Really, for me, just a financial question. The 79% non-GAAP gross margin and 46% operating margin were obviously pretty strong in the fiscal first quarter. The guidance for the fiscal second quarter and for the full year implied that the margins will come back down a little bit relative to the F1Q trend. I guess just without getting too specific, is there anything high-level you can point out, one or two factors that just mechanically might bring the margins back down in the remainder of the year versus fiscal 1 Q? Thanks. Yeah. Hey, Steven. Q1 was a great quarter for the collective Veeva team, and you saw that reflected in the margins. The part that does not always show up in the margins is the impact that we will see in years to come. When you look at the margins specifically in the quarter, about three-quarters of the outperformance was driven by revenue. That was mostly the usage-based elements of Crossix and the faster timing of services delivery. Things that we do not expect to be a recurring benefit to margins through the balance of the year. We also saw some benefit from expenses, which was really timing-related factors as well, things that occurred later than we had otherwise expected. When you put all that together, we saw a high watermark for margins in Q1, and then we see it return back to 44% in Q2, which is about what we expect for the balance of the year. Okay. Thanks. Our next question comes from the line of David Larsen with BTIG. Your line is open. Hi. With regards to Crossix, you mentioned investments into Crossix, and you mentioned the word provider. Just with respect to the actual data itself, does it include obviously the retail sort of data, but does it also include the specialty script data for medications that could be supplied in a hospital? Does it include part B drugs, drugs administered in a clinic, in a skilled nursing facility? When you use the word provider, would that also include facility data? If a hospital wanted to look at all of their volumes, inpatient, ambulatory, and so forth, is that also included in Crossix, or are there plans to eventually include it there? Thank you. Yeah. The data sources, the data network, which supports Crossix, and it also supports Compass, it does work for retail, specialty drugs, specialty pharmacy administered in the hospital, all the types of drugs. Especially, it's good at what we call complex therapies. Those are definitely ones that you're not just going to the retail pharmacy and picking them up. That's one of the very unique things about our data sourcing strategy. For example, in Compass, I know you asked about Crossix, but for example, in Compass, we can project data, sales data for about 4,000 brands across retail and non-retail. We can do that because of our data sourcing strategy. That data sourcing strategy makes us able to do great measurement and audiences also on Crossix. In Crossix, what you're trying to do is figure out what segments you want to expose to media, and then was that effective? At which media points was that effective at driving visits to healthcare providers and then resulting in the uptake of the right medicine? It is a pretty comprehensive data network. That is what we set out to build when we acquired Crossix about five years ago. It is really great to see it coming to fruition now. Okay. Great. Thanks very much. Thank you. Our next question comes from the line of Faith Brunner with William Blair. Your line is open. Hey, guys. Thanks for taking my question. I guess just diving into some of it again, you said that customers are feeling good about Veeva, but maybe from a broader industry perspective, what challenges were they bringing to you? What's top of mind for them? Has there been any shift when you compare the conversations you've had back in April to maybe more recent conversations you've had recently as we continue to try to navigate the changing effects? Yeah. I'll take that. Yeah. It's a good one. Challenges and how's that shifted over time? Remember where the industry is. They've been in a place where on the commercial side, we've helped many companies be able to connect up a lot of their software systems. Now we're going through the migration process, so that's certainly a big topic of conversation. The industry still has fragmented data. Getting the data to work together, getting the data into the software so you can make decisions and you can get insights fast about that, that is still a challenge for the industry. It's not a solved problem yet. The topic of our—you heard Peter talk about this—connected software, connected data, that's resonating. It's a challenge that is very clearly an unsolved problem in the industry. Our approach to that, harmonizing the data sets, harmonizing it with the software, fundamentally solving it at a very foundational level, the data model, consistency of data, attributes and elements across all these different data sets, creating this connected environment. That is top of mind, and that leads to things like helping them be more efficient, helping them get insights to the right people faster to make decisions, helping them do AI. That is an area. Second, we talk a lot about the excitement around AI, but there are also a lot of unsolved problems in the AI space. Part of that is bringing together, or the industry has not yet been able to bring together very industry-specific processes with deep industry-specific AI. That is a problem that they have made investments in. They have not often seen the full return on their investment in some of the AI projects. I think that's another area where they're excited about our ability to help them over time. Those are some specific examples. That's helpful. Thank you. That concludes our question and answer session. I will now turn the conference back over to Mr. Peter Gassner for closing remarks. Thank you, everyone, for joining the call today. Thank you to our customers for your continued partnership and to the Veeva team for your outstanding work in the quarter. Thank you. Ladies and gentlemen, this concludes today's call, and we thank you for your participation. You may now disconnect.