Veeva Reports Strong Q4 Performance and Growth Potential

Brian Van Wagener — Chief Financial Officer

Thank you, Saket. We won’t delve into the specific billing figures by product category, but generally, our expectations for CDMS are being met. Much of the growth in CDMS is from planned, multiyear increases, which are on track.

Looking ahead to Q4 and beyond, our overall growth in billings will come from a wide range of products rather than a single major product.

Saket Kalia — Analyst

That’s really helpful. Thank you.

Operator

Your next question comes from Ken Wong at Oppenheimer. Please go ahead.

Kenneth Wong — Analyst

Thanks for taking my question. This is directed to Peter or Paul.

You mentioned MLR Bot as a separate license. Can you share any early interest you’ve seen? Additionally, regarding its monetization potential, will it be comparable to your commercial modules, where you’ve mentioned a 10% to 15% uplift, or could it be priced higher due to its added value?

Paul Shawah — Executive Vice President, Commercial Strategy

Hi Ken, thanks for your question. I recently attended our Europe Summit where we introduced MLR Bot, a project we’ve been evaluating for some time. We believe this tool can enhance how our customers approve commercial content and do so more effectively. The use of GenAI will help identify content areas that need additional attention versus those that can be processed quickly. There is considerable enthusiasm surrounding this core process for life sciences companies.

We’re planning for this to be an add-on to what we provide in PromoMats. As for monetization, we’re still working out the specifics, but there is significant interest from our existing customers.

Kenneth Wong — Analyst

Understood. moving on to Brian, in your earlier remarks, you highlighted an increase in services influence on billings. Considering the year has seen some service delays, should we interpret this as an improved outlook or more of a one-time timing effect?

Brian Van Wagener — Chief Financial Officer

Thanks, Ken. I’m pleased with how our team has executed on both subscription and services this quarter. We’ve seen multiple projects finish or move ahead of schedule, which is driving our revenue and billing growth for services. Earlier this year, various challenges affected performance, particularly in subcontractor revenue. However, we’re now seeing a stabilization trend, and I’m optimistic about our team’s achievements in Q3 and moving forward.

Operator

Your next question comes from Joe Vruwink of Baird. Please proceed.

Joe Vruwink — Analyst

Thanks for taking my questions. In your prepared remarks, you mentioned Veeva’s progress on several large strategic partnership opportunities in development cloud. Are these comparable to past collaborations with companies like Merck and BI? If so, can you share any common themes regarding these discussions or the goals that sponsors aim to achieve?

Peter P. Gassner — Co-Founder and Chief Executive Officer

This is Peter, and I’ll address that. I would say these opportunities are similar but distinct from our work with BI and Merck. They are at a strategic level and span multiple product lines. Each collaboration is unique, largely due to our now broader range of mature products compared to when we first partnered with BI on the One Medicine program. Today, we have more established products in both clinical and quality areas, leading to broader discussions than we experienced in the past.

However, the nature of discussions can differ significantly; some might focus solely on clinical areas, while others may encompass various clinical products or regulatory and operational aspects. Overall, while there are commonalities, each client and situation presents unique elements.

Joe Vruwink — Analyst

Acknowledged, thank you, Peter. I’d like to address my annual question regarding customer budgets as the new year approaches. How does your visibility into expected outcomes for 2026 compare to what you typically experience at this time? Is your outlook any better or worse due to planned agreements or ongoing customer engagements?

Peter P. Gassner — Co-Founder and Chief Executive Officer

I would say our visibility is marginally improved compared to last year. Customers have become more comfortable with the current macro environment, and we are in a better position now with our products. Each year provides us with better insight. Therefore, while we see enhanced visibility, it is not dramatically different, with the added benefit of the ongoing ramp of agreements contributing positively.

Joe Vruwink — Analyst

Thank you very much.

Operator

The next question comes from Brian Peterson of Raymond James. Your line is open.

Brian Peterson — Analyst

Thank you for your time. Congratulations on an excellent quarter. Peter, I’d like to discuss the regulatory landscape.

With several changes discussed under the Trump administration, could you share customer feedback on these topics and the implications you foresee for Veeva in a new administration?

Peter P. Gassner — Co-Founder and Chief Executive Officer

Paul, can you address that point?

Paul Shawah — Executive Vice President, Commercial Strategy

Yes,

Veeva Systems Discusses Recent Developments Amid Administration Changes

Management Highlights Stability as Customers Focus on Immediate Needs

Addressing a question about recent administration changes, Veeva’s leadership emphasized that it’s still early in the process. Key decisions, such as confirmations of new nominations and setting priorities, are yet to occur. Customers are familiar with transitions and maintain their focus on urgent tasks. Executives noted that many of their projects have been planned well ahead and are critical for operations. As a result, decision-making and project progress appear unaffected at this stage.

“Our customers are not exhibiting any significant shifts in how they are making project decisions. They’re focused on executing established plans,” a representative stated. This consistency aligns with past transitions, as clients have weathered similar changes before.

The team expects that as the political landscape stabilizes, the industry will adjust accordingly, but for now, operations continue as usual.

Q3 Financial Performance: Strong Margins and Expense Timing

Brian Peterson — Analyst

Brian Peterson questioned the remarkable margin improvement in the recent quarter. CFO Brian Van Wagener responded, detailing that the revenue outperformance stemmed from various factors, including revenue growth, timing of expenses, and disciplined cost management. He noted that some expenses anticipated in Q3 would now shift to Q4 or Q1, although no specific items were called out for delay.

Analyst Insights on Boehringer Ingelheim Deal

Ryan MacDonald — Analyst

Analyst Ryan MacDonald inquired about the extensive evaluation process that Boehringer Ingelheim conducted prior to their significant contract with Veeva. Paul Shawah, Executive Vice President, Commercial Strategy, characterized the deal as exciting, highlighting the innovative drive within Boehringer and their need for a reliable partner. They sought consistency and execution assurance from Veeva, which has consistently delivered on promises, a key factor that distinguished Veeva from competitors.

Shawah acknowledged that the evaluation process varied among customers, with each having unique decision-making criteria. Nonetheless, he confirmed that Boehringer undertook thorough analysis to ensure they chose the best partnership moving forward.

Generative AI and Margin Impact: A Future Perspective

Ryan MacDonald — Analyst

MacDonald shifted the conversation to generative AI applications introduced by Veeva, particularly focusing on their influence on gross margins in the upcoming year. CFO Van Wagener remarked that two generative AI solutions were announced, with MLR Bot set to incur costs due to hosting requirements, while CRM Bot would not result in additional charges.

Peter P. Gassner — Co-Founder and Chief Executive Officer

Gassner reassured that these changes would not materially impact gross margins. He reiterated existing guidance for gross margin profiles, where the integration of AI tools was already anticipated.

Upcoming Innovations in Safety Solutions

Anne Samuel — Analyst

Finally, Anne Samuel raised questions regarding Veeva’s safety solutions, which Gassner described as approaching a tipping point. He pointed to increased customer engagement and the fading of legacy systems as key indicators. Veeva has enhanced its offerings to include core safety applications and advanced tools like Safety Signal and Safety Workbench, which modernize clients’ experiences.

Modernization and automation are vital in drawing clients away from outdated systems. Veeva is positioned to cater to this need by providing cloud-based solutions that streamline operations, minimize manual intervention, and innovate across data management systems.

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Uncertainty as the New Standard: Industry Leaders Discuss Stabilizing Trends

Anne Samuel — Analyst

That’s really helpful. Thank you. Now one last question. You mentioned that your customers are getting comfortable with the current macroeconomic environment. Are you viewing this as the new normal? If not, what indicators are you watching for signs of change, and which areas of your business might feel the impact first? Thanks.

Peter P. Gassner — Co-Founder and Chief Executive Officer

Yes, this level of uncertainty seems to be what people are now used to. While changes could occur, we won’t be aware of them until they happen. We haven’t detected any shifts yet.

Customers are settling into their routines. Not long ago, the sudden switch to remote work was a significant disruption. Then we faced two international conflicts, which also created instability. However, people are becoming accustomed to these circumstances now.

High interest rates are another factor. For years, the focus was on low interest rates, but now, businesses are adapting to a new reality where borrowing costs are higher. Although I hesitate to label this as the new normal, it certainly represents a changed environment.

Anne Samuel — Analyst

Really helpful. Thank you.

Operator

Your next question comes from Dave Windley of Jefferies. Your line is open.

David Windley — Analyst

Hi, thank you. I appreciate your earlier insights about potential administrative changes. Hypothetically, if new appointments were approved and they moved towards restricting direct-to-consumer advertising, how might that impact your business model? Thanks.

Paul Shawah — Executive Vice President, Commercial Strategy

Thanks for your question, Dave. It’s interesting because there are many hypothetical scenarios you’re presenting. A lot would need to happen for that situation to become real, including nominations, priorities, policies, and potential legislation.

If such changes were to occur, they would take considerable time due to challenges that would arise, particularly around patient access to information. I don’t foresee any immediate impact on our business from these discussions, and our customers do not seem to be reacting negatively to the current climate.

So, the prevailing sentiment appears to be one of focus on the immediate future rather than potential distant challenges.

Operator

Your next question comes from Kirk Materne of Evercore ISI. Your line is open.

Bill McNamara — Analyst

Hi. This is Bill for Kirk. Thanks for taking my question. In your prepared remarks, you mentioned that Crossix has been contributing to commercial growth. What do you believe is driving this performance?

Peter P. Gassner — Co-Founder and Chief Executive Officer

The success primarily stems from effective execution by the Crossix team. They are introducing innovative strategies, particularly in audience targeting with micro audiences. Additionally, our data network continues to expand, allowing us to offer improved services through Compass and Crossix.

We do face competition, but some of our competitors have struggled recently, making grand promises that they couldn’t fulfill. Whenever a new player enters the market and doesn’t deliver, it creates opportunities for Veeva.

While Crossix plays a role in our commercial strength, it’s just one of several factors. Our CRM products and commercial content products also contributed positively this quarter.

Bill McNamara — Analyst

Thank you for addressing my question.

Operator

Your next question comes from Gabriela Borges of Goldman Sachs. Your line is open.

Gabriela Borges — Analyst

Hi, good afternoon. This one’s for Paul. Could you update us on the dynamics of seat count growth, particularly concerning add-ons and upsells? Are you still facing pressure on seat count, and how confident are you that you can offset this with additional sales? Thank you.

Paul Shawah — Executive Vice President, Commercial Strategy

Yes, your question touches on our seat count and core CRM in relation to add-ons. Overall, the market has stabilized. While some companies might still adjust their representative counts, the average across the industry remains steady.

Our add-on products are steadily gaining traction, with higher attaching rates reported each quarter. Some products show particularly high attach rates, while others still have growth potential. Consequently, I anticipate a stable environment over the next few years as we navigate this landscape.

Gabriela Borges — Analyst

That makes sense. Thank you. My follow-up is about the CRM conversions to Vault. What lessons have you learned over the past couple of years that can help ease customer transitions to Vault?

Paul Shawah — Executive Vice President, Commercial Strategy

We’ve made significant progress since our initial strategy was just an idea a few years ago. Today, we have a fully functional product, and we’ve started our first migrations, which have provided valuable insights into easing customer transitions.

“`

Veeva Systems Shows Strong Performance with Successful Migration Tools and Commitment Growth

Upcoming Technical Go-Lives and Innovations

Veeva Systems has ambitious plans for this year, focusing on live technical go-lives and some major migrations that will take place next year. The company has made significant progress with its migration tools, leading to an increased level of confidence in their functionality. :

As we navigate through the migration process, new challenges often arise. Veeva has encountered issues but has quickly addressed them to enhance their migration technology, making it less disruptive for customers. This careful approach boosts the company’s confidence in the migration process.

Empowering Small and Midsized Customers

Another key focus is on helping small and mid-sized customers transition smoothly to Vault CRM. This transition allows these customers to quickly utilize new innovations, such as Service Center and Campaign Manager. Additionally, Veeva is working on tighter integrations with platforms like Microsoft Teams and Outlook to enhance connectivity for users. The company has learned valuable lessons along the way, improving its execution each quarter.

Analyst Insights

Gabriela Borges — Analyst

Great to hear. Thanks for the call.

Operator

Your next question comes from the line of Brent Bracelin of Piper Sandler. Your line is open.

Growth in Client Engagement with Veeva’s Portfolio

Brent Bracelin — Analyst

Thank you. Good afternoon. Based on the insights shared in the remarks, there seems to be an increased interest among the Top 20 clients to explore Veeva’s broader offerings. Historically, these clients tended to adopt only one product per year, but there appears to be a sense of urgency to move away from legacy systems and adopt multiple products concurrently. Could you elaborate on this trend?

Peter P. Gassner — Co-Founder and Chief Executive Officer

Indeed, this observation seems particularly true for our development cloud segment, where our suite has significantly matured. While the uptake isn’t dramatically faster, it is noticeable compared to last year, driven by our consistent delivery of high-quality products, which fosters trust among our clients. The feedback we receive, such as from Boehringer Ingelheim’s CIO emphasizing reliability, underscores the responsibility we feel to maintain this trust. Over time, this trust catalyzes business growth.

Strong Financial Results and Cost Management

Brent Bracelin — Analyst

Appreciate the clarity. Additionally, can you comment on the impressive operating margin of 43.5%, the highest recorded by Veeva, and the cost discipline that contributed to this result? How should investors interpret this in light of projected increased expenses for Q4?

Brian Van Wagener — Chief Financial Officer

Thanks for the question, Brent. This strong start is largely due to the excellent performance from the Veeva team. Our revenue achievements greatly contributed to our margin outperformance. We stay committed to managing costs effectively and investing for growth when necessary. We did experience some expenses shift across quarters, which aligns with our ongoing cost discipline.

Continued Progress with Top Clients

Brent Bracelin — Analyst

Thank you for the insights.

Operator

Your next question comes from the line of Stan Berenshteyn of Wells Fargo. Your line is open.

Commitments and Challenges with Vault CRM

Stan Berenshteyn — Analyst

Hi. Thanks for taking my questions. Following up on Vault CRM, you mentioned that additional commitments from the Top 20 clients are expected in the coming months. As discussions progress, what barriers have you encountered, and has the introduction of Vault CRM changed the dynamics of these commitments?

Paul Shawah — Executive Vice President, Commercial Strategy

We are thrilled about our fourth Top 20 commitment and expect more in the near future. Having a live product creates significant advantages. With customers actively using and migrating to it, we are innovating continuously. Positive feedback from clients at our recent summit highlights this success. While every customer has unique needs, we aim to win the majority of opportunities and are optimistic about our progress with the Top 20 and beyond.

Future Directions for Product Strategy

Stan Berenshteyn — Analyst

That’s great to hear. Lastly, regarding your shift toward horizontal enterprise applications, when can we anticipate more detailed information about your product strategy?

Peter P. Gassner — Co-Founder and Chief Executive Officer

We’re adopting a platform-specific approach for these new markets. However, there is no specific timeline for when we will share updates on application areas or customer segments. We’ll communicate as more information becomes available.

Stan Berenshteyn — Analyst

Thank you.

Operator

Your next question…

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Financial Insights from Key Analysts: Growth Strategies and Market Competition Unpacked

Tyler Radke — Analyst

Thank you for the opportunity to ask a question. Looking ahead to FY ’26, while I understand you’re not sharing formal guidance, could you provide some context on how we might view growth relative to this year and your broader long-term targets? Given your resilient performance in the current market, have you noticed any shifts in the early stages of larger deals that might influence the latter half of next year? Thank you.

Brian Van Wagener — Chief Financial Officer

Hi Tyler, as Peter mentioned, we do have slightly better visibility for next year compared to previous years, but we aren’t providing FY ’26 guidance just yet. We’ll offer those details after the Q4 results. For now, our updated guidance indicates a subscription growth rate of around 15%, which we are pleased with given our long-term growth objectives.

Tyler Radke — Analyst

Understood.

Operator

Your next question comes from Craig Hettenbach of Morgan Stanley. Your line is open.

Craig Hettenbach — Analyst

Thank you. Returning to your horizontal strategy and the strong margins of your core business, how does this strength provide you leverage to invest further in these areas?

Peter P. Gassner — Co-Founder and Chief Executive Officer

Thanks for asking, Craig. Our main priority is serving our customers effectively by maintaining lean teams, excelling in product development, and delivering substantial value. This is reflected in our financial approach, where we invest almost twice as much in product development as we do in sales and marketing. Our focus remains on maximizing efficiency. While we have the necessary capital to fund our new market initiatives, particularly in horizontal business applications, our additional revenue will mostly enhance customer support, product development, and existing offerings in the life sciences sector.

Craig Hettenbach — Analyst

That makes sense. I also wanted to follow up regarding services. As this market appears to be stabilizing, what is your outlook for growth in this area over the next few years?

Brian Van Wagener — Chief Financial Officer

Hi Craig, this is Brian again. Like with our revenue outlook, we will reserve specific guidance on services revenue until after our Q4 results. However, we are satisfied with the team’s performance and the momentum we’ve seen coming into Q4.

Craig Hettenbach — Analyst

Understood. Thank you.

Operator

Your next question comes from DJ Hynes of Canaccord. Your line is open.

DJ Hynes — Analyst

Hi folks, great quarter. Paul, I’ve observed that Salesforce recently highlighted life sciences cloud as part of three of their top ten deals. Although I understand you’re not in a position to speak on their behalf, have you noticed Salesforce becoming more prevalent among your customer base?

Paul Shawah — Executive Vice President, Commercial Strategy

Certainly, Salesforce is prevalent among our larger customers, which is to be expected. However, I wouldn’t say their frequency has changed significantly. They continue to be a key competitor; with IQVIA out of the picture, our principal competitor remains Salesforce, who currently does not have an equivalent product.

DJ Hynes — Analyst

Got it. And Brian, could you explain the impact of TFC on margins this year, and what normalization or changes we should consider for our models next year?

Brian Van Wagener — Chief Financial Officer

Absolutely. The TFC mainly affects revenue normalization, so it does influence margins to an extent. However, we’re looking forward to transitioning into next year without having to differentiate between TFC and non-TFC results in our reports. On a year-over-year basis, TFC impacted our growth rate by about 2%.

DJ Hynes — Analyst

Thank you for that clarification.

Operator

Your next question comes from Jailendra Singh of Truist Securities. Your line is open.

Jailendra Singh — Analyst

Thank you, and I appreciate the answers so far. I wanted to revisit Vault CRM. Congratulations on securing the fourth commitment from a top biopharma company. Can you clarify whether this is an existing CRM customer or a new one? Furthermore, what’s the typical timeline from customer commitment to migration and full activation on the platform?

Paul Shawah — Executive Vice President, Commercial Strategy

Sure, Jailendra. Regarding the migration process, it really varies based on the customer’s size and complexity. For smaller clients, the migration could take about four to six weeks. In contrast, larger clients, particularly those in the Top 20, might take closer to two years. The timing of commitments is largely left to their discretion, involving considerations around their business schedules and product launches to determine when they should migrate.

Jailendra Singh — Analyst

And could you specify if the Top 20 commitment is from a new or existing customer?

Peter P. Gassner — Co-Founder and Chief Executive Officer

The question was about whether the Top 20 commitment comes from a new customer or an existing one.

Paul Shawah — Executive Vice President, Commercial Strategy

Yes, the commitment comes from an existing customer.

“`

Veeva’s Strategic Moves and Headcount Growth Mark a Successful Quarter

# Existing Customer Announcement: Boehringer Ingelheim

Jailendra Singh — Analyst

Could you clarify the recent announcement regarding Boehringer Ingelheim?

Paul Shawah — Executive Vice President, Commercial Strategy

Yes, Boehringer Ingelheim has been a loyal customer of Veeva for many years. They started with our commercial solutions and more recently began using our R&D services as well. We have helped them succeed with Veeva CRM, and now they are transitioning to Vault CRM for their long-term needs. They are indeed one of our existing customers.

# Positive Headcount Increase: Insights on Growth

Jailendra Singh — Analyst

I’ve noticed a noteworthy increase in your net headcount this quarter. What does that indicate? Are there specific areas of focus for these new hires?

Brian Van Wagener — Chief Financial Officer

It’s great to see our headcount grow this quarter as we continue to invest in growth. Our hiring is quite broad, particularly emphasizing our product areas as we prepare for the coming year.

# Customer Migration to Vault CRM: Impacts on Gross Margin

Andrew DeGasperi — Analyst

Will the migration of customers to Vault CRM have an impact on gross margins, particularly regarding royalties paid for Veeva CRM?

Brian Van Wagener — Chief Financial Officer

Yes, we anticipate some changes in gross margins moving forward. However, these migrations are typically long-term processes, so improvements may take time to fully reflect in our financials. The transition will span several years, with expected gains becoming clearer as we approach 2030.

# Direct-to-Consumer Advertising and Crossix’s Role

Andrew DeGasperi — Analyst

Is Crossix the primary product focused on direct-to-consumer advertising, and have you seen any strength compared to the previous year?

Peter P. Gassner — Co-Founder and Chief Executive Officer

Crossix is indeed the main product we utilize for direct-to-consumer advertising. It tracks measurement and audience engagement, catering not only to consumers but also to healthcare providers. Crossix is performing well along with our CRM and other data products, showcasing overall strength in our commercial segment.

# The Difference Between Veeva and CRO Challenges

David Larsen — Analyst

Congratulations on a strong quarter! Can you explain why CROs are facing challenges while Veeva is not, particularly regarding products related to clinical trials?

Peter P. Gassner — Co-Founder and Chief Executive Officer

CROs tend to derive most of their revenue from specific studies. Delays in study approvals can significantly impact their earnings, whereas Veeva’s revenues are often on a long-term, enterprise license basis. Although there is some connection to study volumes, our diversified product line for trials helps buffer us from these fluctuations.

# Vault CRM Wins: Consistent Growth

David Larsen — Analyst

I’ve noticed 14 Vault CRM wins last quarter. Is this a new norm for you, and what’s behind this increase?

Paul Shawah — Executive Vice President, Commercial Strategy

While I believe we secured 13 Vault CRM wins, this level of success is indeed consistent. Most of the new wins are with pre-commercial companies preparing for market launches. We have a high success rate in these deals, suggesting promising growth as they transition from pre-launch to commercial stages.

# Walgreens Partnership Update

Charles Rhyee — Analyst

Could you share more details about your partnership with Walgreens and where you currently see it heading?

Veeva CEO Discusses Data Partnerships and Competitive Position

Peter P. Gassner — Co-Founder and Chief Executive Officer

We are always on the lookout for new data sources, and we take our time when evaluating them. When a reasonable opportunity presents itself, like our recent partnership with Walgreens, we are open to adding to our data network. This kind of opportunity helps us stay competitive.

Regarding our competitive position in the market, I believe we have the strongest data network in the industry. Our network supports both Compass and Crossix, focusing on patient-first data, not just retail pharmacy data. I feel confident about our current standing and the accuracy of our patient data matching across various sources.

This robust data network enables us to create innovative products in both Compass, particularly for Patient and Prescriber applications, and Crossix. Our approach disrupts traditional methods that have existed for years. Change can be gradual, but we are consistently adding more customers for our Compass solutions, creating a positive momentum.

Charles Rhyee — Analyst

That’s helpful. Could you provide an update on Crossix? It seems to be a significant growth driver for our commercial operations. How does its growth rate compare to the reported 11% growth in commercial so far?

Brian Van Wagener — Chief Financial Officer

Hi, this is Brian. While I can’t disclose specific growth rates for Crossix, I’m pleased with how the team has performed this year. The market is robust, and we are capturing more market share, which we expect will continue.

Charles Rhyee — Analyst

Thank you.

Operator

Your next question comes from Brad Sills of Bank of America. Your line is open.

Brad Sills — Analyst

Thank you. I wanted to ask about the demand environment. It appears stable, but are there any promising signs in the big pharma sector or R&D business indicating positive trends in spending?

Peter P. Gassner — Co-Founder and Chief Executive Officer

It’s a favorable environment for Veeva. While “great” isn’t the word I would choose, the situation has improved compared to last year. Our focus remains on long-term capabilities, especially within the development cloud. Change in this area is not typically abrupt but steady as we help our customers achieve their 2030 goals.

I’m encouraged by discussions with senior executives within the Veeva team. There has been substantial momentum this past quarter, and I am optimistic about our prospects.

Brad Sills — Analyst

That’s encouraging. Can you update us on your replatforming efforts? Are you prepared to present this to larger accounts, and how is this initiative progressing?

Peter P. Gassner — Co-Founder and Chief Executive Officer

We are confident about the transition of Veeva CRM to Vault CRM. This was announced two years ago, and while it involved significant risks, we’ve made substantial progress. We currently have live customers and have incorporated essential product features into the new platform. The existing CRM has been adapted to align with our requirements, and Vault CRM now boasts complete functionality compared to its predecessor. We are also excited about our two new applications, campaign manager and service center. Looking back, I would have embraced this progress two years ago; it confirms our successful navigation through challenges.

Brad Sills — Analyst

Thank you for the update, Peter.

Operator

Your next question comes from Steven Valiquette of Mizuho Securities. Your line is open.

Steven Valiquette — Analyst

Thank you. I have two questions. First, regarding the development cloud, I’ve noticed that global clinical trial starts have seen growth over the past two quarters after declining for a couple of years. Does Veeva monitor such data points, or do you primarily rely on customer interactions for market assessments? Additionally, during the recent analyst day, I noticed a change in how you break down your total revenue by customer type. Could you reiterate what percentage of your total revenue comes from CRO customers? I believe it was under 5% last year.

Paul Shawah — Executive Vice President, Commercial Strategy

Yes, Steven, we do keep an eye on clinical trial starts. It’s one of many metrics we monitor, but I advise against focusing too narrowly on a single indicator. Peter has mentioned that we are somewhat insulated from short-term shifts in clinical trial volumes.

Veeva Systems Reflects on CRO Revenue and Customer Engagement in Earnings Call

Brian Van Wagener — Chief Financial Officer

In response to the question about CRO revenue, Brian noted that during the recent investor day, the CRO channel was included in the reporting for the Top 20 enterprise and SMB sectors. This makes year-over-year comparisons a bit more complex. Previously, CRO revenue accounted for around 5% of overall revenue, and this figure has remained stable.

Got it. OK. All right. Thank you.

Operator

This concludes our Q&A session. I will now turn the conference back over to Veeva’s CEO, Peter Gassner, for closing remarks.

Peter P. Gassner — Co-Founder and Chief Executive Officer

Thank you, everyone, for joining the call today. I also want to express my gratitude to our customers for their ongoing support and to the Veeva team for their exceptional work this quarter. Thank you.

Operator

[Operator signoff]

Duration: 0 minutes

Participants in the Call

Gunnar Hansen — Senior Director, Investor Relations

Peter P. Gassner — Co-Founder and Chief Executive Officer

Saket Kalia — Analyst

Brian Van Wagener — Chief Financial Officer

Kenneth Wong — Analyst

Paul Shawah — Executive Vice President, Commercial Strategy

Ken Wong — Analyst

Joe Vruwink — Analyst

Brian Peterson — Analyst

Ryan MacDonald — Analyst

Anne Samuel — Analyst

David Windley — Analyst

Bill McNamara — Analyst

Gabriela Borges — Analyst

Brent Bracelin — Analyst

Stan Berenshteyn — Analyst

Tyler Radke — Analyst

Craig Hettenbach — Analyst

DJ Hynes — Analyst

Jailendra Singh — Analyst

Andrew DeGasperi — Analyst

David Larsen — Analyst

Charles Rhyee — Analyst

Brad Sills — Analyst

Steven Valiquette — Analyst

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