Conference Transcript - VEEV 2026-09-09

Stan Bernstein, Analyst — Wells Fargo

My name is Stan Berenstein. I cover healthcare technology at Wells Fargo. With me is Paul Schiawe. He is the EVP of Strategy and Gunnar Hansen. He's the head of IR. Welcome. Paul, maybe before we begin, you want to just give us a quick overview of what's happening, and then we'll dive into some questions.

Paul Shawah

Yeah, sure. Sounds good. I'll give you a brief overview of Viva. So Viva, we're building the industry cloud for life sciences, and that means applications and agents and data and consulting specifically for the life sciences business. Our business is spread across two primary areas, R&D and commercial. R&D is a little bit of the larger portion of the overall business. And within each of those areas, we have suites of products and software products and data products and agents. And that includes in areas like R&D, clinical, quality, regulatory, safety, and then in commercial, a number of different areas from core CRM, commercial content, a number of data products that we call data cloud. And we're helping to make the industry more efficient in how we operate. We're a public benefit corporation, so we serve the life sciences companies, the people in them, but also we're trying to advance the overall industry. And we're relatively early on our journey. Each quarter we make more progress in terms of building the industry cloud and the adoption of that, but we're excited. We have a lot of opportunity and runway, particularly now with our focus on building agents for the industry.

Stan Bernstein, Analyst — Wells Fargo

You've been around for a while, and you've started out as purely a CRM for life sciences. You've broadened that out into the R&D clinical cloud. You've then tacked on data solutions. You know, where the company sits today, there's been a lot of change over the last, I guess, 12 months or 24 months. What are you most excited about right now? What has your attention when you go into work? Like, what are you working on?

Paul Shawah

Yeah, I mean, our vision is broad. It is this industry cloud, and that means building these suites of applications that all work together. The core enterprise software, the core data, and business consulting that all works together. The major shift that's happened over the last couple of years is now this agentic layer, which is super exciting. And I think this is a core part of Viva's advantage, a structural advantage in having the foundation that we have in the core enterprise applications. but also the agentic labor that will work interoperably with the core applications. And we're just in the early stages of building that out. We've announced a broad AI strategy, AI in all of our applications. We call that Vault AI. Now, you've probably heard us talk about something called Falcon, and Falcon is the agentic labor that actually does work, and that works very closely with the core applications. So I'm excited about continuing to expand out the industry cloud, these suites of applications, but also AI enabling the industry. And we're in the early days, but super promising, just really over the last several months, seeing kind of the excitement and progress with the product, but also excitement and demand from the customer side.

Stan Bernstein, Analyst — Wells Fargo

If we can unpack the AI product suite a little bit, and maybe layer that into the discussion of revenue. So you have given a 2030 target, I think a year or two ago, hitting $6 billion in revenue by 2030. First question, is AI in any way part of that target, or is that a layer on top of your longer term targets?

Paul Shawah

Yeah, that's right. So we gave a 2030 revenue target about two years ago, and that's a $6 billion target. And it was, AI is largely incremental to that. So when we gave that target, it was largely the products that we, existing products that we had and with maybe some additional growth of products, and primarily life sciences. So think about it as life sciences, core enterprise applications, things like agents and Falcon would be incremental to that. Also areas of our business like in horizontal markets that we are entering, that's also incremental.

Stan Bernstein, Analyst — Wells Fargo

So when we've had discussions with your customers, they've basically said, look, AI is new. You've just launched a bunch of AI products this year, effectively. A lot of these are early adopters. They're using these products, but they're not necessarily paying for these products. So if we start thinking about the monetization of AI, what are you, I guess, envision happens in terms of monetizing? Is this become an unlock next year? And then to the extent that it is, what are the monetization models that can potentially drive the revenue here?

Paul Shawah

So I alluded to our overall AI strategy. And I'll reference that again, because we think about monetization very differently in different parts of our AI strategy. So there's Vault AI. And again, that's AI in the core Vault applications. It's in every Vault application there is across CRM and commercial content and regulatory quality, clinical safety. Every area will have Vault AI enabled in the application. And that's AI to help the users of the applications, help them go faster, make better decisions, summarize things faster. It's making users more efficient. And in most cases, that will be more consumption based, based on just token usage. and so as as we increase adoption and utilization we'll expect to see additional monetization there then there's Falcon and Falcons the agentic labor it's the labor the the layer that actually does the work for replaces in a sense it replaces humans and users and that's the user of the application and we expect in those cases it to be more outcome based so based on let's say a number of documents processed, as an example. So a specific business transaction. I could also anticipate in Falcon, we may have more enterprise license agreements. We may shift to a model that's more based on ELA. That is something, we're still early days, we're working that out. Part of what we're doing with early adopters is establishing value for the products. Our main focus, maturing the products, establishing the right value proposition, and then we think the right licensing model will follow. So we may end up having multiple, in all likelihood, multiple licensing models based upon the specific use case, based upon the type of AI that a customer is using.

Stan Bernstein, Analyst — Wells Fargo

And if we think about the way that AI is monetized, right, there's, I guess, multiple vectors of value extraction. Gunnar, do you want to maybe comment on, you know, how AI can be monetized? Is it just a cost arbitrage or is it something else that can be involved here?

Gunnar Hansen, Head of Investor Relations

Yeah, we get questions all the time of what use cases we're looking to solve for with things like Falcon. And the reality, as Paul mentioned, is that it's going to be very use case specific. There are certainly areas where we can help drive more efficiencies and potentially reduce some of the labor that's being done or used for some of these processes. But it also, there's an element of getting things through the process faster, and that means getting to market faster. So there's both kind of the cost arbitrage element, but there's also the ability to monetize and get to market faster. And so I think our focus in the interim with AI is really about getting AI out the door in the hands of customers delivering value. If we can deliver on that, you know, we think we're confident in figuring out the licensing model and the revenue should follow thereafter.

Stan Bernstein, Analyst — Wells Fargo

Can you give us some examples of, you know, how can you get a drug to market faster using Falcon as an example?

Paul Shawah

Yeah, one example in one of the areas we're focused on is in the regulatory side, health authority, communication. So when you're going through the drug approval process, the regulatory authorities, like let's say the FDA in the U.S., will have questions about your process. And when they ask a question, they generally stop. It puts a pause on the approval process. And you have to respond to those questions. And that doesn't only happen in one country. It may happen in multiple countries, in different regions. in different parts of the world, you have to answer those questions consistently and accurately. And today, people answer those questions. They formulate the answers. They may do translations. They may make sure that it's consistent. And that slows down the approval process. So if you can condense the time to respond to those health authority questions, you actually, what you're doing is you're getting the drug approved faster. You may have more time in market. So when you think about, let's say, a potential blockbuster drug, a drug that has the potential to be over a billion dollars in sales, getting that into market 30 days or 60 days or 90 days faster can be millions and millions of dollars to the life sciences company. One, it can get that drug to patients that need it sooner, but it also creates a significant revenue opportunity. So to Gunnar's point, yes you're reducing labor, yes you're shifting labor from people over to agents, but more importantly, you're having an impact on how fast can I get that drug into the marketplace.

Stan Bernstein, Analyst — Wells Fargo

Okay. And Falcon, as you point out, is an AI that's replacing labor. We know that CROs are a labor-heavy industry, very necessary to conduct drug trials. You rely on CROs. Where does Falcon sit? Is Falcon displacing CROs at all? Is it displacing something else? Obviously, headcount is being displayed. So where is that headcount coming from, and how are CROs in that picture?

Paul Shawah

Yeah, it's very broad. If you think about the use cases we're focused on with Falcon, it's everything from the commercial side of a company, so things like commercial content process, where CROs play no role at There's certain areas in R&D, like safety, very minimal role, and clinical, to some extent, there's a role they play, and oftentimes that's work that is done by the sponsor themselves directly or other types of service providers. So I think it's a relatively narrow place that may impact CROs, and it actually may be good for CROs over the longer term, as CROs may be customers of EVA. We're not focused on that part of the market yet. We're focused on directly selling into the sponsors, but they sell a portfolio of services and this could be labor that they provide. I think we'll see how that plays out over time.

Stan Bernstein, Analyst — Wells Fargo

And maybe one final question related on AI. Maybe there's more, I can't promise. But just if you think about the customers that are using AI right now, the products that you've rolled out, I know Falcon is still up and coming. Can you just talk about how the reception has been? Are they using it? Are they using it more intently? Do they say that, okay, this is very valuable to my workflow?

Paul Shawah

Yeah, all signs so far, and we do have a number of customers using AI from Viva in its different forms, the things that I talked about, Vault AI in the core applications and CRM and our commercial content business, and then also Falcon, Falcon MLR. We have a bit of a head start there that came, it started as an acquisition with a company called Coply, where they're using agents for the review and approval process of commercial content. Somewhat early days, but the reception has been great. We're seeing increased utilization, increased adoption, and I think there's, we just had our first top 20 pharma company start small and expand to their U.S. field force for using our agentic call report in CRM. So we're excited about all of the early signals. And, you know, we're excited to kind of continue to expand that out over the next several months as we get more and more early adopters and more and more agents in the market.

Stan Bernstein, Analyst — Wells Fargo

Okay. And I want to talk about some other areas of your portfolio. Maybe we'll pivot here to R&D and clinical cloud. So you've, in recent quarters, as you've described, that more of your mature products are, because they're more mature, they're kind of slowing. And then you have these other more nascent products that maybe haven't really reached the S-curve of adoption. How should investors think about the dynamic between the maturing products and the time lag between when these more nascent products can start to accelerate and maybe show up in the numbers?

Paul Shawah

Yeah. And maybe a level set a little bit, Just so people understand, we have those core markets that I talked about, clinical quality, regulatory safety, and they're all suites of products. And they all have a portfolio of products, some which were started many, many years ago and that have become more mature, and some which we've started over the last couple of years. And in all of the cases, they're either really significant markets, some are smaller add-on type products. There's just a broad mix across all of those different areas. We've called out historically a handful of those that have contributed a significant part of our growth over the last several years. They will continue to contribute. They're not completely sold out. Those products aren't going away. We don't have 100% adoption in all those products. So they will continue to contribute. But there's also a number of products that we've announced over the last handful of years, and we've called out some of the larger ones, EDC, Safety, RTSM. I think you probably, many of you know this industry well. You know a lot of those acronyms. ECOA is another example. They're in the earlier stage of that ramp. You know, the ramps don't necessarily line up perfectly. The ramp, the S-curves don't line up exactly perfectly, but we've called this out as something that we see that's happening, and it's a broad portfolio of products where we believe we have a unique advantage in all of them, the core underlying Vault platform. In general, we're replacing either legacy applications or we're becoming the standard. We're creating a market that didn't exist before. And we have a very broad and strong value proposition by all these products working together. So we believe we have the right to win. And we call that out and we see some of that transition happening already starting this year. So I think this is something we'll see play out over the next several years as we start to see that transition fully take place.

Stan Bernstein, Analyst — Wells Fargo

Okay. And you've also called out a $1 billion opportunity selling trial-based solutions, like trial-by-trial solutions through the CRO channel. Historically, you've been primarily an ELA type of business where you get the enterprise contract and the visibility is there. You don't have that variability. Are you seeing traction in this new sales motion selling through the CROs? Can you just talk about what you're seeing, a level of excitement, and how you expect that to progress over the next couple of years?

Paul Shawah

It is an exciting opportunity for us. When you look at our revenue mix today, the majority of our revenue mix comes from ELAs, from larger companies. There is a segment of the market that tends to buy the technology that we've been talking about, everything from EDC to the trial supplies and RTSM. They tend to buy it more trial by trial. And we are approaching that market more cohesively in terms of how we position and sell the suite of products to that segment that buys for the trial, but also in terms of the importance of the relationships that we have with the CROs. The CROs are not only a customer of Viva, but they're also a really core partner. And they can be an important channel to entering that market. They have, particularly for small and midsize companies. They have an outsized influence in the decisions that those companies make. So we're still in the early days as they become more adopted. They have to shift over. Remember they've been used to, in many cases, using legacy technology for a long period of time. So they may have thousands of people that are very comfortable with the legacy technology. And even though we provide technology that may be better, significantly better, they have to go through that change management process to move their teams over, to change how they position and how they think and how they interact. So we're in that early stage, but it's great. It's a great longer-term opportunity for us to continue to sell through the CROs and to become the standard, hopefully across many, if not all, of the CROs over time. Adding IQVIA was a really nice advantage. They're one of the largest CROs, as you know, and we're in the early stages of, you know, starting to see some of the benefits of that partnership play through.

Stan Bernstein, Analyst — Wells Fargo

So now it seems like all of the top CROs are channel partners, potentially for you. And you're saying you have to have the sales motion, you have to, you know, these people have to be trained and understand how to maybe position Viva as part of the sales discussion. What is going on right now? Like is when a trial sponsor goes to the CROs, is it just they declare who they want to use for their software and that's basically what the CRO does? Or does the CRO actually have a preferred vendor that they recommend? Can you just take us through what's actually happening right now and how do you expect that to change?

Paul Shawah

Yeah. In some cases, the sponsor themselves would make a decision on the core technology. And in other cases, particularly the lower and smaller end of the market, the CRO would make a recommendation on the technology. And we're in different stages with different CROs in terms of some have standardized and they tend to recommend Viva as a standard and others haven't yet, and they may do it more surgically or precisely. And our expectation over time is that more and more CROs adopt the best technology in Viva as the standard when they do their proposal. So that's a journey. That's something that takes a long time. We don't take that lightly. It's on us to make sure that we continue to have the very best products Technology that will help them deliver more effectively deliver more efficiently and that's what they want They want to look to a provider and a partner who can help them provide their services more efficiently Now prior to the relationship with IQV becoming aligned commercially I think historically you you've been you've butted head so to speak and And, you know, IQVIA's data solutions were not allowed in your platform, right?

Stan Bernstein, Analyst — Wells Fargo

That has obviously changed. What does that mean for certain add-on products that you have related to data? And what does that mean for your own data product, which effectively competes with IQVIA and continues to compete? Is this now a headwind that IQVIA can be integrated as a tailwind? Can you unpack that for us?

Paul Shawah

Yeah, it really helps both areas. It's good for IQVIA and Viva. it's also, it's great for the industry. So historically, our customers were, they weren't able to buy some of our software products because they had standardized on IQVIA data and it just, it wasn't going to work. So we actually stopped selling some of these products in different segments of the market. And now we're re, we're ramping that up. We're building connectors between our software and IQVIA data. So we're able to create more value. They can continue to standardize on IQVIA. They can use Viva software now. And master data management's a good example of that. Master data, you master customer information, and they have a lot of that customer information we're able to work together. So that market, we are kind of restarting. We're kick-starting that market again, and that is a nice opportunity for us. It's a nice add-on that we didn't really, we're really selling, and now we can continue to sell. And then from a data perspective, there are areas where we compete, and we'll both compete respectfully, and customers may make a single source decision, but I think what's also common is customers make more of like a dual source decision where they may have picked either IQVIA and other data providers or Viva and other data providers. Now they just may pick Viva and IQVIA together because our data is able to work well together. So I think it does create an opportunity for both companies to become more of that standard for data sourcing rather than relying on, you know, one in a portfolio or a niche, a set of niche data providers.

Stan Bernstein, Analyst — Wells Fargo

Okay. And I did say I'm not going to ask an AI question, but I'm going to renege on that. I'm going to ask another AI question. From a margin standpoint, I think historically, maybe, well, historically, a quarter or two ago, maybe you have said that AI margins are going to be between services margin and software margin. Now that your thinking has evolved on this, where do you think the AI margins can actually get to?

Gunnar Hansen, Head of Investor Relations

Yeah. Yeah. I mean, I think it's still a little bit early, quite frankly. I think, you know, Peter made some comments more recently on the call about how, you know, Falcon margins may be more comparable to our subscription margins. I think we'll have to see how that plays out. But I think the underlying assumptions there was with Falcon, the ability to use more deterministic software for certain parts of the process. And then secondarily, to the extent that you see a reduction in token cost over time. We think we can, because of the value we're delivering and because of those two points I just made, margins may be more comparable to our subscription. But again, it's still pretty early days with Falcon. I think we're expected to have our first customer go live later this year and our first top 20 to go live in the first half of next year. We're really excited about it, but it still is a little bit early days, certainly when you think about the margin profile. Okay.

Stan Bernstein, Analyst — Wells Fargo

So let's pivot to the CRM side of the business. Within the top 20, you're now at 12. I think there's been six confirmed takeaways by Salesforce. There's two outstanding to be determined. Can you just talk about, so that's pretty much already settled. We want to talk about winbacks in a second. But outside of the top 20, can you just talk about what's your win rate there? What's your traction there? And how does that compare to Salesforce?

Paul Shawah

Yeah, the win rate is very, very high. You've heard us talk about where we are in top 20. There's only two decisions left and the two kind of outstanding. In top 20, we're making a lot of progress on both those. So we feel really good there. But outside of top 20, we're winning the vast majority. And this includes really two groups. One, it's companies that are on Viva CRM that are making a decision to migrate. We win the vast majority of those decisions. In addition to companies that are selecting a CRM for the first time, these are net new logos, companies that didn't have anything in many cases before and they're choosing Viva for the first time. And we've said our win rate is in both those areas is over 80 percent this year. That remains the same. That's unchanged. So we're becoming. And we've also just to frame the whole thing, kind of where is this whole thing going to land? We've talked about over 70 percent market share in the CRM space is what Viva will retain over time. So it's the market spoken. This is very clear where we are the market share leader. we will continue to be the market share leader.

Stan Bernstein, Analyst — Wells Fargo

And just maybe tying in this recent quarter, Core CRM was really strong. It seems like it's a legacy product. Why was this quarter actually a strong quarter for Core CRM?

Paul Shawah

Well, it includes what we're doing with Vault CRM. So it was, in fact, we said it was our best quarter ever in CRM, And this includes decisions from some top 20s and in some large enterprise customers, companies like Lilly and Biogen and Regeneron have made decisions to continue with Vault CRM. And then we now have over 180 customers live on Vault CRM. So more migrations done successfully. We have we've gotten the migration process down to a science on time. These are on budget. They're very, very efficient. So we've executed really well in the migrations, but it's also in the product progress. We had our first top 20 go live in all of the U.S. market with the agentic call report in Vault CRM. So we've talked about the promise of AI in Vault CRM, and now it's becoming a reality with some significant companies. We expect more and more of that as companies go live on Vault CRM. We expect some will turn AI on on day one, which is a, that's always been the promise of more innovation and it's becoming a reality. So we're just executing well on all cylinders in Sierra.

Stan Bernstein, Analyst — Wells Fargo

And within the top 20, Salesforce did have, you know, six wins. What gives you confidence that maybe some of those are going to come back to you? And if that does happen, do you have some kind of line of sight of potentially when that could happen?

Paul Shawah

Yeah, I mean, we've talked about that for a number of quarters now. We do have confidence and conviction. And I think what's becoming more and more clear is as more time passes, there's a clear, there's more and more evidence that supports Viva's execution compared to what's happening on the other side. Salesforce, a number of projects have been struggled. They've been delayed. On the Viva side, we're executing, as I've talked about, getting customers live, getting them to turn on new innovation. We are in discussion with all of these customers, these companies that have made a Salesforce decision. They're very significant and meaningful customers of Viva across many, many different areas. We stay close. We're working with them. And that's what gives us the confidence, the difference in execution with Viva versus what they're running up against. in Salesforce. And as more and more time passes, that becomes more and more clear to the overall market.

Stan Bernstein, Analyst — Wells Fargo

And on CRM front, you recently introduced Aspen CRM, which is your pursuit of the horizontal app strategy you've called out previously. I guess, what do you think gives you the right to win in the horizontal space? You know, CRM is a very crowded market, highly competitive. Can you just lay out your strategy and your vision here?

Paul Shawah

Yeah, sure. It's certainly, it's a very significant market, which I think speaks to the fact that it's crowded and there is a lot of competition. I think there's still a big opportunity to do CRM really well. And I think historically, if you look back at the ROI that companies have, the investments they've made in CRM have been disproportionate to the ROI that they've achieved. We think we can do something that's better, it's faster, it's cheaper. Like a CRM that you can get up and running very, very quickly, that you can get a lot of value from. We would love nothing more than companies to say, hey, I love my CRM system. I'm getting all the value that I had anticipated out of that. That's uncommon today. And we think it's uncommon, but unnecessary also. So our opportunity is not only to deliver the next generation of platform and technology, but also to be a more friendly company, a more transparent company to be easier to do business with. And you see that even on the website. It's just very clear what our licensing model is, how it's going to be. It's super transparent. And we want to do that from a partner and a company that people can trust, which Viva has earned that right for sure in the life sciences industry. We think we can do it horizontally also.

Stan Bernstein, Analyst — Wells Fargo

Okay. And your CRM business, it's about 50% of your commercial cloud business. So Commercial Cloud obviously has CrossX, has Data Cloud, has all these other products, I think Promomats, Medcoms. If we think about this other bucket outside of CRM, what are you excited about there? Where are you seeing traction and momentum in the business?

Paul Shawah

Yeah, first and foremost, CrossX has been a very strong performer. You know, after we made that acquisition about six years ago, we've continued to make investments in a lot of their products. those investments are paying off. And the products also in the go-to-market focus on focusing on broader segments of the market. So from a product perspective, it's measurement and audiences. We made huge investments in audiences. We've become the market share leader, the very best product and measurement. We're doing the same in the audience side. So we're increasing share in that part of the market. So CrossX has been a very nice and strong and will be a durable grower over many, many years to come, particularly as digital becomes more of an important channel to the market, a way that companies are investing in new digital engagements. They need to measure that effectiveness. Beyond CrossX, we've seen strength really in all parts of the business. Commercial content, we're the established market share leader, but we're also innovating there, and Falcon MLR is yet another layer to that, connecting the agentic layer that does the review and approval process with the core underlying enterprise application. Big advantage for Viva, so I see that as a continued area of growth. And then in the data products, and Link has led the way from a data side for one of the first Link products was called Linky People, and we've become the market share leader in that space, and there's a series of additional products that follow that, that are much earlier stage in the market, but we feel really confident in those. And then some earlier stage products like Compass, Compass patient data, Compass prescriber data, very significant market opportunities for us. These are markets that play out over a long period of time, but the early parts of the market, we're doing well and we're getting those early customers. We're establishing the right to win in the broader market.

Stan Bernstein, Analyst — Wells Fargo

So 12 months from now, Now, if you're back here, hopefully, and you're kind of recapping the success that you've seen over the previous 12 months, what do you think would be the two, three things that you would highlight that really demonstrated that you've executed against your vision?

Paul Shawah

Yeah, I think it will continue to be broad-based. I think you'll hear me talk about CrossX again. I think you'll hear us talking more about the agentic layer. So what we're doing with Falcon and Falcon MLR is the one that's available today. There may or may not be more in the commercial space. And I think you'll hear us talk about continued progress in data. Every quarter that goes by, we're making more and more progress from a product perspective, but also a market adoption perspective. So I think it will be more of the same and maybe even some new announcements.

Stan Bernstein, Analyst — Wells Fargo

That'd be great. Awesome. Well, thanks so much. Thanks, everybody, for joining us.