Veeva FY4Q'26 Update

Veeva had a really fine quarter. While the consensus was expecting $811 Million revenue in FY4Q’26, Veeva posted $836 Million revenue. As you can see below, revenue growth of 16% in Q4 comfortably surpassed opex growth of only ~7% which led Veeva to post their highest ever LTM GAAP operating margin of 28.7%!

Gross margin went down slightly due to professional services related margin which has bit of a seasonality but subscription margins remain stable and above mid-80s. Stock-based compensation (SBC) as a percentage of revenue went down by almost two percentage point YoY. I will note, however, that during FY16 to FY19 period, Veeva’s SBC as a percentage revenue used to be only MSD to HSD level. SBC intensity crept up materially post-pandemic, but now that tech companies are operating in a different talent market environment, it won’t surprise me at all if SBC intensity in the next 5 years keeps going down every year.

Of course, software investors are hardly appeased these days with trailing performance. The question of AI loomed large during the Q&A which I will elaborate more behind the paywall.

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