Veeva 2Q’26: "SaaSpocalypse" Cancelled
Early this year when most investors were grappling with “SaaSpocalypse”, I started buying Veeva when the stock was trading at $220. As the SaaSpocalypse mania spread like a virus in investors minds, Veeva stock went into a tailspin for a few months. As I averaged down a couple of times when the stock was in a free fall, my average cost came to be $198/share. Following its FY 2Q’26 (or FY 2Q’27) earnings, the shares ended last week at ~$277/share, ~40% higher than what I paid for the shares. This is a victory lap, right? Right??
Regular readers may remember that after going through a psychologically torturous process of moving my assets from Canada to the US, most of the stocks I owned went up so much that I didn’t have enough cash to buyback everything I used to own. As I had to make a difficult decision in terms of what not to buyback, I made the unfortunate decision not to buy back Veeva. So instead of making ~40% return on Veeva, I actually ended up taking a loss while selling my assets in Canada. Active investing is challenging as it is, but this year continues to be marred by this completely random event in my life. I promise this is the last time you’ll be hearing about this BS; I just wanted to share some pain to feel a little lighter instead of pretending deep stoicism that I haven’t reached.
Okay, let’s move on from the self-pity and focus on Veeva’s quarter.
Against a $905 Mn revenue guide on the high end, Veeva reported $928 Mn, up ~17.6% YoY which is their fastest topline growth in nine quarters. Subscription revenue growth accelerated to 16.3% (from 15.0% last quarter), and normalized billings were up 19%. If that weren’t impressive enough, such revenue growth acceleration happened despite opex growing only 5.8% YoY. As a result, GAAP EBIT margin came in at 29.6% for the quarter, and LTM GAAP EBIT margin reached 29.9%, yet another all-time high.
I will discuss the the key takeaways from the call behind the paywall.
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