Analysis of the Form 10-K | Fiscal year ended January 31, 2026
FY2026, ended January 31, 2026. All figures are in US$ million unless stated otherwise, converted from the thousands reported in the 10-K. Share data are in units or thousands as labelled. The closing price of $207.36 on January 31, 2026 and the 163,330,933 shares outstanding at March 17, 2026 were supplied with the request; every other number comes from the 10-K filed on March 20, 2026.
The question here is what Veeva sells, to whom, and how the revenue is put together.
Veeva sells cloud software, data and consulting almost exclusively to pharmaceutical, biotechnology and medical device companies. Development Cloud (clinical, regulatory, safety) and Quality Cloud are reported together as "R&D and Quality Solutions". Commercial Cloud (the CRM used by sales reps, content management, Crossix marketing analytics) and Data Cloud (reference and patient data) are reported as "Commercial Solutions". Subscriptions are billed annually or quarterly in advance and recognized ratably over terms that are usually one year; professional services are mostly billed on time and materials. Veeva reports a single operating segment.
| Revenue by product area | FY2026 | % of total | FY2025 | FY2024 | YoY FY2026 | YoY FY2025 |
|---|---|---|---|---|---|---|
| R&D and Quality — subscription | 1,426.6 | 44.6% | 1,179.8 | 905.8 | 20.9% | 30.2% |
| Commercial — subscription | 1,257.6 | 39.4% | 1,104.9 | 995.8 | 13.8% | 11.0% |
| R&D and Quality — services | 321.8 | 10.1% | 276.7 | 276.1 | 16.3% | 0.2% |
| Commercial — services | 189.3 | 5.9% | 185.3 | 186.0 | 2.2% | −0.4% |
| Total | 3,195.3 | 100.0% | 2,746.6 | 2,363.7 | 16.3% | 16.2% |
R&D and Quality overtook Commercial as the larger subscription area during the three years shown: it was 38.3% of total revenue in FY2024 and 44.6% in FY2026, and management expects its share to keep rising. The two professional services lines moved apart in FY2026: R&D and Quality services grew 16.3% while Commercial services were nearly flat.
| Revenue by geography | FY2026 | % of total | FY2025 | FY2024 | YoY FY2026 | YoY FY2025 |
|---|---|---|---|---|---|---|
| North America | 1,903.3 | 59.6% | 1,621.7 | 1,387.4 | 17.4% | 16.9% |
| Europe | 939.6 | 29.4% | 790.8 | 662.6 | 18.8% | 19.4% |
| Asia Pacific | 280.2 | 8.8% | 265.7 | 250.6 | 5.4% | 6.0% |
| Other international | 72.2 | 2.3% | 68.4 | 63.1 | 5.5% | 8.4% |
| Total | 3,195.3 | 100.0% | 2,746.6 | 2,363.7 | 16.3% | 16.2% |
Asia Pacific grew at about a third of the group rate in both years, so its share fell from 10.6% to 8.8%. The 10-K does not explain the gap. About 83% of revenue and 80% of expenses are denominated in US dollars. United States revenue is not disclosed separately.
Veeva had 7,928 employees at year end, 637 more than a year earlier. It had 1,552 customers, of whom 767 in Commercial and 1,196 in R&D and Quality; some buy from both. The ten largest customers were 28% of revenue in each year, none above 10%. The 10-K is signed by Peter Gassner as founder and CEO, Brian Van Wagener as CFO and Gordon Ritter as Chair; it does not report management changes.
Several facts are dated inside this fiscal year by the document itself. The reseller agreement with Salesforce, on whose platform the legacy Veeva CRM runs, expired on September 1, 2025 and entered a five-year wind-down. The IQVIA litigation, running since 2017, was settled on August 13, 2025. The EU Data Act took effect on September 12, 2025 and allows EU customers to cancel subscriptions without cause after a notice and transition period. The One Big Beautiful Bill Act changed the tax deduction of domestic R&D. In January 2026 the board authorized a $2 billion share repurchase program; no repurchases appear in the two earlier years shown. These facts change how the rest of the numbers read: the Commercial business is going through a platform change under competitive pressure, and the cash pile has begun to be deployed.
The category decides which questions the rest of the analysis must answer.
Veeva is classified as a stalwart. Revenue grew 16.3% in FY2026 and 16.2% in FY2025, and the operating margin was 28.7% in FY2026. The growth rate is double-digit, which would point to a fast grower. That category does not fit, for three reasons. First, the business does not need capital to grow: capital expenditure was 0.9% of revenue. Second, net operating assets fell by $8.1 million while operating profit rose. Third, the cash generated piles up in a securities portfolio instead of being reinvested. A fast grower is defined by heavy reinvestment and margins still forming. Veeva shows neither.
Three questions decide this case.
Several standard metrics are mute for Veeva and are not calculated. Debt-to-EBITDA, interest coverage and the debt maturity profile do not apply because there is no borrowing; lease liabilities of $95.9 million are the only debt-like item. There is no inventory, so inventory days do not apply. The goodwill test is less relevant because there were no acquisitions in the three years shown. The capex-to-depreciation ratio says little about the business, because growth spending sits in R&D and sales costs that are expensed.
The question is what the 10-K shows, rather than asserts, about the durability of Veeva's position.
Four pieces of evidence come from the filing. Customers keep expanding: management attributes subscription growth in both areas "primarily" to "expanding use by existing customers." The customer count grew 5.1% while revenue per customer rose from $1.86 million to $2.06 million. Concentration is stable: the top ten customers held at 28% of revenue for three years, which says the large accounts neither left nor grew to dominate. The products sit inside regulated processes. Validation under FDA and EU rules is part of what Veeva sells, and the 10-K lists the regulations its systems must satisfy. That makes replacement a regulatory project as well as a software one, although the 10-K does not quantify switching costs. Finally, R&D spending rose in each year while margins expanded; as a share of revenue it was 24.0% in FY2026 against 26.6% in FY2024.
The counter-evidence comes from the same document. Salesforce, named as the main CRM competitor and now licensee of IQVIA's CRM software, has announced wins among large Veeva CRM customers (section 4, risk 1). On the R&D side, the 10-K names IQVIA, Dassault Systèmes, OpenText, Oracle and Honeywell as competitors for individual applications, with no single competitor across the whole suite.
The Commercial data available do not yet show erosion in aggregate. Commercial subscription revenue accelerated from 11.0% growth in FY2025 to 13.8% in FY2026. Commercial customers rose from 730 to 767, and subscription revenue per Commercial customer grew 8.3%. Because the 10-K does not separate CRM from data products, this aggregate cannot tell whether CRM is holding while data products grow, or whether both are growing. Whether the advantage is widening or narrowing cannot be established from the filing.
Some contracts carry an annual inflation adjustment at "the lower of 4% or the Consumer Price Index," and management says price contributed to subscription growth "to a lesser extent" than usage, without quantifying it. The 10-K also records pressure the other way: competitors' price concessions and rising purchasing scrutiny at large renewals. Pricing power is documented as a capped contractual mechanism whose yield is not disclosed.
Growth in the three years shown is organic. There is no acquisition line in the cash flow statement, and goodwill was unchanged at $439.9 million. The effect of currency on growth is not disclosed, although the 83% of revenue billed in dollars limits it. The Ostro acquisition (March 10, 2026, about $100 million) falls after the year and will be the first change in scope.
Revenue grew 16.3%. Every cost line grew more slowly: cost of subscription 12.3%, R&D 10.7%, sales and marketing 8.1%. General and administrative costs rose 13.2%, but most of the increase came from $26 million more in litigation settlement charges. Headcount grew 8.7%. The subscription gross margin rose from 84.7% in FY2024 to 86.5% in FY2026. The services margin stayed between 16.3% and 18.5%. Operating leverage is the main source of profit growth: the operating margin went from 18.2% to 28.7% in two years. The 10-K expects operating costs to keep growing "primarily due to employee compensation-related costs."
The filing shows the evidence for durability in numbers and the evidence against only in words.
The question is where the profit comes from and how much of it is operating.
| $ million | FY2026 | FY2025 | FY2024 | YoY FY2026 | YoY FY2025 |
|---|---|---|---|---|---|
| Subscription revenue | 2,684.2 | 2,284.7 | 1,901.6 | 17.5% | 20.1% |
| Professional services and other | 511.1 | 462.0 | 462.1 | 10.6% | 0.0% |
| Total revenues | 3,195.3 | 2,746.6 | 2,363.7 | 16.3% | 16.2% |
| Cost of revenues | 782.0 | 699.6 | 677.3 | 11.8% | 3.3% |
| Gross profit | 2,413.3 | 2,047.0 | 1,686.4 | 17.9% | 21.4% |
| Research and development | 767.4 | 693.1 | 629.0 | 10.7% | 10.2% |
| Sales and marketing | 428.8 | 396.7 | 381.5 | 8.1% | 4.0% |
| General and administrative | 300.7 | 265.7 | 246.5 | 13.2% | 7.8% |
| Operating income | 916.4 | 691.4 | 429.3 | 32.5% | 61.0% |
| Other income, net | 278.1 | 227.9 | 158.7 | 22.0% | 43.6% |
| Income before taxes | 1,194.5 | 919.4 | 588.0 | 29.9% | 56.4% |
| Income tax provision | 285.6 | 205.2 | 62.3 | 39.2% | 229.4% |
| Net income | 908.9 | 714.1 | 525.7 | 27.3% | 35.8% |
| Diluted EPS ($) | 5.44 | 4.32 | 3.22 | 25.9% | 34.2% |
| Diluted shares (thousands) | 166,995 | 165,232 | 163,486 | 1.1% | 1.1% |
| Stock-based compensation (in costs) | 472.7 | 437.4 | 393.7 | 8.1% | 11.1% |
| Gross margin | 75.5% | 74.5% | 71.3% | ||
| Operating margin | 28.7% | 25.2% | 18.2% | ||
| Effective tax rate | 23.9% | 22.3% | 10.6% |
Net income grew less than operating income in FY2026 for two reasons. Other income grew more slowly, and the tax rate rose. Over two years the picture flips: FY2024 net income was supported by a 10.6% tax rate, helped by $71.0 million of excess tax benefits on equity awards. That makes FY2024 a poor base for measuring earnings-per-share growth.
Other income is almost entirely interest on the securities portfolio: $267.2 million of net interest income out of $278.1 million. It is the return on cash, not on software.
| $ million | Jan 31, 2026 | Jan 31, 2025 | Change |
|---|---|---|---|
| Cash and cash equivalents | 1,421.2 | 1,118.8 | 27.0% |
| Short-term investments | 5,139.6 | 4,031.4 | 27.5% |
| Cash and short-term investments | 6,560.8 | 5,150.2 | 27.4% |
| Accounts receivable, net | 1,259.7 | 1,016.4 | 23.9% |
| Goodwill and intangibles | 470.2 | 484.3 | −2.9% |
| Deferred tax assets | 273.4 | 343.9 | −20.5% |
| Total assets | 8,979.3 | 7,339.8 | 22.3% |
| Deferred revenue | 1,488.8 | 1,274.0 | 16.9% |
| Borrowings | 0.0 | 0.0 | — |
| Lease liabilities, current | 12.2 | 10.0 | |
| Lease liabilities, long-term | 83.7 | 65.8 | |
| Gross debt (leases only) | 95.9 | 75.8 | 26.5% |
| Net cash (cash and investments − gross debt) | 6,465.0 | 5,074.5 | 27.4% |
| Total stockholders' equity | 7,214.8 | 5,832.4 | 23.7% |
Gross debt is leases only. Equity is 80.3% of total assets, and the largest liability is deferred revenue: money customers paid for service still to be delivered.
The question is how much of the reported cash belongs to shareholders once the cost of paying employees in stock is counted.
| $ million | FY2026 | FY2025 | FY2024 |
|---|---|---|---|
| Cash from operations | 1,415.2 | 1,090.1 | 911.3 |
| Capital expenditure ("long-term assets") | 29.1 | 20.5 | 26.2 |
| Free cash flow | 1,386.1 | 1,069.5 | 885.1 |
| Stock-based compensation | 472.7 | 437.4 | 393.7 |
| Free cash flow after SBC | 913.4 | 632.2 | 491.4 |
| Cash taxes paid | 230.0 | 322.0 | 134.5 |
| Share repurchases (cash) | 169.9 | 0.0 | 0.0 |
| Proceeds from option exercises | 253.9 | 105.5 | 62.7 |
| Taxes paid on net share settlement | 93.2 | 79.4 | 78.9 |
| Dividends | 0.0 | 0.0 | 0.0 |
Free cash flow of $1,386.1 million is 1.53 times net income. The gap with profit is almost entirely stock-based compensation, which is added back in operating cash flow because it is not paid in cash. It is paid in shares, though, and the cost shows up in the share count. Measured after SBC, free cash flow is $913.4 million, close to net income.
Owner earnings are not reported by Veeva; they are our construction. They equal net income plus non-cash items other than SBC, minus capital expenditure, minus the working capital absorbed in the year. They answer how much cash the year produced for owners if stock compensation is treated as a cost. Their limit is that capital expenditure stands in for all reinvestment, while Veeva's growth spending is expensed in R&D and sales. Excluding working capital they are $1,005.3 million; including it they are $913.4 million. The figure with working capital is the one used in the judgment. Owner earnings are $472.7 million below free cash flow, and the gap equals SBC to the dollar: the definition does not add back SBC because net income already deducts it. Non-cash items include a $65.1 million deferred tax charge and $9.7 million of non-cash accretion income, which is subtracted.
Stock-based compensation is recorded on two bases. The cash flow statement shows $472.7 million. The equity statement credits $476.5 million to paid-in capital. The $3.8 million difference recurs in all three years ($7.4 million in FY2025, $5.8 million in FY2024) and is not explained in the 10-K. The cash flow figure is used throughout.
| Metric | FY2026 | FY2025 | FY2024 |
|---|---|---|---|
| Gross margin | 75.5% | 74.5% | 71.3% |
| Subscription gross margin | 86.5% | 85.9% | 84.7% |
| Operating margin | 28.7% | 25.2% | 18.2% |
| Net margin | 28.4% | 26.0% | 22.2% |
| SBC / revenue | 14.8% | 15.9% | 16.7% |
| FCF / net income | 1.53x | 1.50x | 1.68x |
| ROIC (year-end net operating assets) | 93.0% | 70.9% | not available |
| ROE (year-end equity) | 12.6% | 12.2% | not available |
| Other income / pre-tax income | 23.3% | 24.8% | 27.0% |
ROIC is our construction, defined in 3-quinquies, together with its limit. The debt ratios are mute (1-bis). Lease liabilities equal 10.5% of one year's operating income. In words, Veeva could pay off every lease obligation with about five weeks of operating profit.
The multiples use the closing price of $207.36 on January 31, 2026, the last trading day of the fiscal year, so that price and earnings refer to the same date. The share count is the 163,330,933 on the 10-K cover at March 17, 2026, as supplied. It is 447,338 shares (0.27%) below the year-end count of 163,778,271; the 10-K does not explain the decrease.
| Price-based measure | Value |
|---|---|
| Market capitalization | $33,868.3 million |
| Enterprise value (market cap − cash and investments + leases) | $27,403.3 million |
| Price / diluted EPS | 38.1x |
| Market cap / net income | 37.3x |
| Market cap / free cash flow | 24.4x (yield 4.1%) |
| Market cap / free cash flow after SBC | 37.1x (yield 2.7%) |
| EV / EBITDA | 28.7x |
| EV / EBIT | 29.9x |
| EV / NOPAT | 39.3x |
| Price / tangible book value per share | 5.0x |
The two price-to-earnings figures differ because of the share base: 166,995 thousand weighted diluted shares against 163,331 thousand on the cover. The more important gap is between 24.4x free cash flow and 37.1x free cash flow after SBC. At this price the multiple depends almost entirely on whether stock compensation is counted as a cost.
The question is how much of each important number rests on management judgment.
The 10-K lists four estimates: standalone selling prices, the benefit period for deferred commissions, the realizability of deferred tax assets, and the fair value of stock awards.
Revenue and deferred revenue (Critical Audit Matter). KPMG's only Critical Audit Matter is "evaluation of the sufficiency of audit evidence over revenue," covering all $3,195.3 million. The reason given is not a judgment call on timing. It is the number of service offerings and of IT systems involved in recognizing revenue. The management discretion lies in allocating contract prices to separate obligations at standalone selling prices, set "based on our overall pricing objectives." The 10-K does not say how much revenue depends on that allocation. Deferred revenue rose to $1,488.8 million, up 16.9%, in line with subscription revenue (up 17.5%). Of the opening balance, $1,226 million (96.2%) was recognized during the year. Remaining performance obligations beyond one year are "not significant." Visibility therefore extends about one year. What would move this: changes in standalone selling prices would shift timing between periods; a shift from annual to quarterly billing would shrink deferred revenue without touching revenue. The 10-K warns about the second.
Income taxes. The tax provision of $285.6 million (23.9%) differs from cash taxes of $230.0 million by $55.6 million. The cause is the One Big Beautiful Bill Act, which restored immediate expensing of domestic R&D and allowed accelerated deduction of amounts capitalized in earlier years. The deferred tax asset for capitalized expenditures fell from $326.5 million to $246.0 million; the drop is cash taxes saved now, and the 10-K expects further benefit without sizing it. The relationship ran the other way in FY2025, when cash taxes exceeded the provision by $116.8 million. A valuation allowance of $79.5 million (18.3% of gross deferred tax assets) relates mainly to US state deferred tax assets. Its line in the rate reconciliation is a $0.7 million benefit, although the balance rose by $2.4 million; the 10-K does not reconcile the two. Unrecognized tax benefits are $41.5 million, of which $26 million would lower the rate if recognized.
Stock-based compensation. Unrecognized cost is about $482 million, close to one year of current expense. Of that, $417 million relates to options and will be expensed over a weighted 2.0 years; the remaining $65 million relates to RSUs, over 0.6 years. This is future dilution already contracted. Options outstanding cover 15,134,876 shares at a weighted exercise price of $181.99, or 9.2% of year-end shares. The CEO grant of 2,650,000 options at $236.90 has met its market condition and vests over time until 2030. Its grant-date fair value was about $172 million, and its exercise price is above the $207.36 year-end close. The discretion is in the Black-Scholes and Monte Carlo inputs (volatility 39–40%, expected term 6.3–7.0 years). These affect the expense but not the number of shares issued.
Short-term investments and fair value. Investments of $5,139.6 million are 57.2% of total assets. All are Level 2, priced from "non-binding consensus prices" corroborated by market data; Level 1 holdings are $286.5 million of money-market funds. There are no Level 3 assets. Corporate bonds are the largest holding at $3,154.6 million. Of the portfolio, $4,113.7 million matures after one year but is classified as current because it can be sold at any time. The 10-K gives a sensitivity: 100 basis points higher rates would cut market value by $88 million, booked in other comprehensive income unless sold. Interest income is what moves profit, and lower rates would reduce it. The 10-K does not give an income sensitivity.
Goodwill. Goodwill of $439.9 million (4.9% of assets) is tested qualitatively at the level of the single reporting unit, the whole company, and no impairment is reported. Headroom is not disclosed, but with a market value far above book equity the test carries little information either way.
Litigation. The IQVIA disputes ended with no damages paid either way. Veeva paid about $31 million in success fees to law firms that worked partly on contingency. The 10-K mentions a non-practicing entity alleging patent infringement but gives no accrual or loss range. For other matters, management states that no proceeding would have a material effect. No reasonably possible additional loss is disclosed.
Deferred commissions. Capitalized sales commissions of $30.0 million are amortized over three years, an estimate set by reference to renewal patterns and technology life. The amount is small (0.3% of assets), but the direction is in section 3-sexies.
Pension plans. Not applicable. Veeva runs only defined contribution plans (401(k) and a Canadian RRSP, $18 million of expense in FY2026).
Related parties and subsequent events. Related-party transactions are incorporated by reference to the proxy statement, which is not attached. The only subsequent event is the Ostro acquisition for about $100 million "in cash and long-term equity retention grants," with purchase accounting still in progress.
The question is what sits inside the large balance sheet lines and how much of the asset base rests on an estimate.
Six items exceed 5% of total assets or of total liabilities and equity. On the asset side they are cash (15.8%), short-term investments (57.2%) and receivables (14.0%). On the other side they are deferred revenue (16.6%), paid-in capital (31.7%) and retained earnings (48.6%). Goodwill is just below, at 4.9%.
Liquidity. Of the $6,560.8 million, $86 million in cash is held outside the United States; most foreign cash is not designated as indefinitely reinvested. Restricted cash is $2.2 million and sits in other long-term assets. Net cash in section 3 is therefore calculated on the full amount. The 10-K does not designate any part of it for specific obligations.
Receivables. Receivables of $1,259.7 million carry an allowance of $0.26 million, 0.02% of the gross amount (FY2025: $0.06 million). The 10-K states that Q1 is "seasonally the strongest quarter for cash inflows due to the collections from our annual subscription billings," which is consistent with a large share of annual billing sitting in receivables at the January year end. Days sales outstanding on year-end balances were 143.9 against 135.1 a year earlier, while payment terms are 30 to 60 days. The increase is discussed in 3-sexies.
Deferred revenue. At $1,488.8 million, deferred revenue equals 170 days of revenue (169 a year earlier). It finances the receivables and more. A working-capital cycle built by us as receivable days minus payable days minus deferred-revenue days gives −43.8 days against −50.1. In both years customers fund operations before Veeva is paid, but slightly less so in FY2026. All day counts use year-end balances; the business has no inventory.
Intangibles and capitalized software. Acquired intangibles of $30.3 million, mostly customer relationships, will be fully amortized by FY2030. Internal-use software is capitalized and amortized over three years, but the amount is not disclosed; the balance sits without breakdown inside other long-term assets of $62.3 million.
Deferred tax assets. Deferred tax assets of $273.4 million on the balance sheet ($272.9 million net of deferred tax liabilities, Note 7) rest mainly on capitalized R&D, which unwinds under the new tax law (3-bis), and on future US taxable income.
Equity. There are no minority interests. Repurchased shares are retired against paid-in capital, so there is no treasury-stock line. Other liabilities (accruals and tax payable of $98.4 million, other long-term liabilities of $43.3 million) are small and not broken down further.
Return on equity, with and without buybacks. Return on year-end equity is 12.6% (13.9% on average equity). Adding back the $179.9 million of repurchases, which reduced equity, gives 12.3%. The buyback correction is small. What matters is that 91% of equity is cash and investments. The 12.6% blends a return of about 93% on the operating capital (section 3-quinquies) with an after-tax yield of about 3.2% on the portfolio.
Retained earnings. Retained earnings rose from $3,454.6 million to $4,363.5 million, and no dividend has ever been paid. In a company that distributes everything, flat retained earnings would say nothing bad. Here every dollar has been retained, and section 3-quinquies shows that almost none of it went back into operations.
Observable vs estimated. $6,560.8 million of assets (73.1%) are cash or securities priced from observable market inputs. Another $1,310.3 million (14.6%) are receivables at invoice value. Assets that depend on a management estimate (goodwill, intangibles, deferred tax assets) total $743.6 million, 8.3% of the total.
The question is how much of the $1,415.2 million of operating cash comes from the business itself.
Operating cash starts from net income of $908.9 million and adds back SBC of $472.7 million. Other non-cash items add $125.6 million, and working capital absorbs $91.9 million. Within working capital, receivables absorbed $244.7 million, and the increase in deferred revenue supplied $213.1 million.
Third-party money. Deferred revenue, payables and accrued liabilities together rose by $222.1 million, equal to 16.0% of free cash flow; deferred revenue alone accounts for $213.1 million. Its weight on free cash flow fell: in FY2025 the same items added $224.5 million, 21.0% of free cash flow.
Taxes paid against taxes booked. Cash taxes were $55.6 million lower than the provision, against $116.8 million higher in FY2025. This reversal, a tax timing effect created by a change in law, explains why operating cash grew 29.8% while revenue grew 16.3%. Before cash taxes, operating cash grew 16.5%, in line with revenue. The 10-K expects that effect to continue but cannot size it. Excess tax benefits on equity awards, $25.3 million, also lowered cash taxes; management removes them from its non-GAAP operating cash.
Is capex the whole investment? No. Capex of $29.1 million excludes $24.0 million of new leases, $20.0 million of capitalized commissions, and the expensed R&D and sales spending that drives growth. Operating cash also contains about $203 million of after-tax interest, a return on the portfolio rather than on software.
The growth in free cash flow from $1,069.5 million to $1,386.1 million is $316.6 million. Of that, $92.1 million came from lower cash taxes and $59.2 million from higher interest income. Working capital moved against cash by $99.6 million. Lower taxes and higher interest together explain 47.8% of the increase, so nearly half of it did not come from the operating business before tax. Section 9 lists this as a weakness.
This is the core of question 2. The question is what rate the operating business earns, how much of the profit it can redeploy, and what happens to the rest.
Per-share values. Computed on diluted weighted shares, per-share figures trail the totals by about one point, because diluted shares grew 1.1% a year; growth in this period was not paid for by issuing shares.
| Per diluted share ($) | FY2026 | FY2025 | FY2024 | FY2026 change |
|---|---|---|---|---|
| Revenue | 19.13 | 16.62 | 14.46 | 15.1% |
| Net income | 5.44 | 4.32 | 3.22 | 25.9% |
| Free cash flow | 8.30 | 6.47 | 5.41 | 28.3% |
| Free cash flow after SBC | 5.47 | 3.83 | 3.01 | 43.0% |
| Equity | 43.20 | 35.30 | 28.41 | 22.4% |
Return on invested capital. This measure is not in the financial statements; it is our construction. Invested capital is equity plus lease liabilities minus cash and investments, which equals net operating assets ($749.8 million). The return is operating income after tax at each year's effective rate (NOPAT of $697.3 million). On year-end capital the return is 93.0% (70.9% in FY2025); on average capital it is 92.5%. The figure is high because the operating capital is almost nothing but goodwill, intangibles and deferred tax assets. Excluding those three items, net operating assets were $6.2 million at year end and −$70.3 million a year earlier. Customer prepayments fund all the working capital. The rate is real, but it does not mean the business could absorb more capital at that return. It means the business needs almost none.
Return on incremental capital. Not calculable. Over FY2026, NOPAT rose by $160.2 million while invested capital fell by $8.1 million; the ratio has a negative denominator. With two balance sheets this is a single data point in any case.
Reinvestment rate and implied growth. Our construction counts capex minus depreciation, plus acquisitions, plus working capital absorbed, all over NOPAT. That gives 11.9% in FY2026 and −4.9% in FY2025. Multiplied by the 93.0% return, it implies 11.1% growth in operating profit. Actual growth was 32.5%. The difference came from margin: revenue grew 16.3% on a cost base growing 10.9%. It did not come from capital. That source has a limit, and the 10-K expects costs to keep rising with pay. The measure also understates real reinvestment, because Veeva's growth spending is expensed: R&D at 24.0% of revenue and sales and marketing at 13.4%. The 10-K does not separate maintenance from growth in either line.
How much of the profit can be redeployed. Veeva earns about 93% on operating capital and retains 100% of its profit, but it redeploys about a tenth of NOPAT into operations. Over the three years, operating cash totalled $3,416.6 million. Net purchases of securities absorbed $2,805.0 million of it (82.1%) and capex $75.8 million. Retained profit therefore compounds at the portfolio rate, not at the operating rate: net interest income of $267.2 million on average cash and investments of $5,855.5 million is about 4.6% before tax. The high return is a rent on a business that needs no capital, not a rate at which retained earnings compound. The $2 billion buyback and the Ostro acquisition are the first moves away from that pattern (section 5-bis).
Self-financing. Over three years, equity flows (option proceeds minus buybacks and net-settlement taxes) net to $0.6 million, no debt was raised, and cumulative free cash flow was $3,340.8 million. Veeva is entirely self-financed.
Capital intensity. Cumulative capex of $75.8 million compares with cumulative net income of $2,148.7 million. Capex divided by depreciation and amortization was 0.77 in FY2026, 0.52 in FY2025 and 0.80 in FY2024. The ratio is depressed by amortization of intangibles acquired before FY2024; excluding it, the ratio is 1.22 in FY2026 and 0.99 in FY2025.
Operating return on enterprise value. EBIT over EV is 3.3%. This is the pre-tax, pre-financing return earned by a buyer of the whole operating business at $207.36, with the cash taken out.
What the price implies, with and without the cash. Removing the cash makes the business look slightly more expensive, not cheaper: EV/NOPAT is 39.3x against 37.3x for market capitalization over net income. After tax, the portfolio yields about 3.2%, more than the company's 2.7% earnings yield at the given price, so the cash pulls the overall multiple down. The same convergence appears on cash flow. EV over free cash flow, after removing after-tax interest, is 23.2x. EV over the same flow minus SBC is 38.6x. On every basis that treats SBC as a cost and separates the cash, the price is about 38–39 times what the operating business earned in FY2026.
A price-to-earnings-to-growth ratio is not calculated. Earnings-per-share growth over the two available years is distorted by the 10.6% FY2024 tax rate and by a 10.5-point margin expansion, so the ratio would not measure anything stable.
Research productivity. Cumulative R&D over FY2024–FY2026 was $2,089.5 million. Revenue in the same period rose by $831.6 million. All R&D is expensed except internal-use software, whose capitalized amount is not disclosed.
From the shareholder's side, the return on retained earnings is therefore set by what is done with the portfolio, not by the 93% the operations earn.
The question is whether any balance sheet line is moving ahead of revenue in a direction that weakens later results. Each gap is shown in percentage points; gaps above 5 points are flagged.
| Comparison | Growth A | Growth B | Gap (pp) | Flag |
|---|---|---|---|---|
| Inventory vs revenue | not applicable | 16.3% | — | — |
| Gross receivables vs revenue | 24.0% | 16.3% | +7.6 | yes |
| Allowance vs gross receivables | 349% | 24.0% | +325 | yes, prudent direction |
| Payables vs cost of revenues | 23.6% | 11.8% | +11.9 | yes |
| Unbilled receivables vs services revenue | 24.2% | 10.6% | +13.5 | yes |
| Deferred commissions balance vs sales and marketing | 13.6% | 8.1% | +5.5 | yes |
| Commissions capitalized in year vs sales and marketing | 11.1% | 8.1% | +3.1 | no |
| Deferred revenue vs subscription revenue | 16.9% | 17.5% | −0.6 | no |
| Operating cash vs revenue | 29.8% | 16.3% | +13.5 | yes, favourable direction |
Receivables grew faster than revenue and faster than deferred revenue (16.9%). If more was billed in advance around year end, deferred revenue should have grown at a similar pace to receivables. It did not, so either collections slowed or more of the year-end billing related to services already recognized. The 10-K does not allow a choice. It notes that competitors have offered "delayed payment terms" and that international customers have "longer accounts receivable payment cycles," but does not link either to Veeva's own balance. The allowance for credit losses is not shrinking: it rose 4.5 times, but at $0.26 million it remains negligible against receivables of $1,260.0 million. The 10-K gives no allowance roll-forward.
The other flags are small in absolute terms. Payables rose $7.2 million, unbilled receivables $9.8 million and deferred commissions $3.6 million. None changes the cash picture.
The operating cash gap runs in Veeva's favour, and section 3-quater traced it to cash taxes; before tax the two grew in line. The receivables gap is the only signal to carry forward. Section 9 lists it as a weakness.
The question is which software metrics the 10-K provides and which it withholds. Veeva is a vertical software and data company.
Recurring revenue. Subscription revenue was $2,684.2 million, growing 17.5%. It was 84.0% of the total, against 83.2% in FY2025. Most subscription orders have one-year terms, and multi-year agreements generally include a right to terminate for convenience. The recurring base is therefore renewed every year, not locked in.
Deferred revenue and performance obligations. Deferred revenue was $1,488.8 million, up 16.9%. It equals 55.5% of annual subscription revenue (55.8% in FY2025). The 10-K notes that quarterly billing for many large customers means deferred revenue understates annual contract value. Remaining performance obligations beyond twelve months are "not significant," so there is no multi-year backlog.
Renewal rate and net revenue retention. Not disclosed. Subscription revenue per customer is our substitute: $1.64 million per Commercial customer (up 8.3%) and $1.19 million per R&D and Quality customer (up 13.7%).
Gross margin by line. Subscription 86.5% (85.9%); services 18.0% (18.5%). Cost of subscription for Veeva CRM includes fees paid to Salesforce for platform and hosting. The amount is not disclosed, so the effect of migrating to Veeva's own platform on margin cannot be estimated.
Customer counts. Commercial 767 (+37); R&D and Quality 1,196 (+71); total 1,552 (+75). The 10-K notes that many R&D customers are "smaller, earlier-stage, pre-commercial companies," which explains why that area has more customers but lower revenue per customer.
Metrics that do not apply. Inventory days, debt ratios, interest coverage, capex-to-depreciation as a measure of asset renewal, and the debt maturity schedule.
Veeva therefore discloses recurring revenue, deferred revenue, margin by line and customer counts. It does not disclose retention, revenue by product, or annual recurring revenue. For a company whose central question is a product migration, revenue by product is the missing piece.
These are the risks the 10-K declares, in order of severity, separated into those that have already materialized and those that are potential.
The first three risks share a single cause, the CRM transition, and together bear on 39.4% of revenue. The others are common to the industry or to cloud software. Only the first two carry dates in the filing.
The comparison is not possible. The 10-K does not mark which risk factors are new or removed, and the prior year's 10-K was not attached. Section 1 lists the facts the document itself dates within FY2026.
The question is who controls Veeva and under which rules. Veeva is a Delaware public benefit corporation. The board must balance shareholders' financial interests with those of customers, employees, partners and communities, and with a public benefit purpose written into the charter. The 10-K says this may lead the board to accept an offer "that does not maximize short-term stockholder value" in a change of control. Shareholders holding at least 2% of shares, or shares worth at least $2 million, can sue to enforce the balancing duty.
Since Class B shares converted on October 15, 2023, there is one class of stock with one vote per share. Directors are elected annually, but removal requires a 66⅔% majority. The board signing the 10-K consists of Gordon Ritter (Chair), Peter Gassner (CEO), Tim Cabral, Mark Carges, Mary Lynne Hedley, Priscilla Hung, Marshall Mohr, Paul Sekhri and Matthew J. Wallach. KPMG has audited Veeva since 2010.
Director and officer shareholdings are not in the 10-K. They are incorporated by reference to the proxy statement, which was not attached. The 10-K says only that the CEO "holds a significant portion of our outstanding common stock and a significant number of vested options," without numbers. Related-party transactions are also deferred to the proxy. One trading plan was adopted in the fourth quarter: director Priscilla Hung, for up to 1,500 shares.
This is the core of question 3. The question is what management did with the capital in the three years shown, and what the shareholder kept.
Capital allocation. Over FY2024–FY2026, operating cash of $3,416.6 million went first to net purchases of securities ($2,805.0 million). Then came net-settlement taxes on equity awards ($251.5 million), buybacks ($169.9 million) and capex ($75.8 million). Option exercises brought in $422.1 million. There were no acquisitions, dividends or debt. The only change in the mix occurred in the last month of the period, when buybacks began. No acquisition was made in the comparative years, so there are no post-acquisition write-downs to report.
Share repurchases. In January 2026 Veeva bought 801,735 shares for $179.9 million, an average of $224.43 excluding commissions. That is 8.2% above the $207.36 year-end close. The price paid is 27.0 times FY2026 free cash flow per diluted share. On free cash flow after SBC the multiple is 41.0x (our construction; the inverses are yields of 3.7% and 2.4%). The repurchase cost appears on three bases. The equity statement and Note 10 (excluding commissions) both show $179.9 million; the cash flow statement shows $169.9 million. The $10.0 million difference between the equity and cash figures is not explained in the 10-K. The Note 10 figure is used for the price paid and the cash figure for cash flows. $1.82 billion of the authorization remains.
Net dilution. In FY2026, 2,362,682 shares were issued on option exercises and RSU vesting, 366,465 were withheld for taxes, and 801,735 were repurchased. The net increase was 1,194,482 shares, 0.73% of opening shares. The buyback offset 40.2% of the net shares issued as compensation. The buyback did not return capital. It partly offset dilution. In cash terms the two flows almost cancel: buybacks and net-settlement taxes cost $263.2 million, and option exercises brought in $253.9 million.
Accounting aggressiveness. Management's non-GAAP measures exclude SBC, intangibles amortization and litigation settlement charges. The segment note gives the excluded items for all three years: $1,391.6 million in total, 1.53 times FY2026 GAAP net income. SBC accounts for 93.7% of the total and recurs every year. Management describes litigation settlement charges as "non-recurring and outside the ordinary course of business." They appear in both years for which the MD&A gives the detail ($5.0 million and $30.6 million). Non-GAAP diluted EPS of $8.10 is 1.49 times GAAP EPS of $5.44.
Governance signals in the document. Internal control was found effective with no material weaknesses. There was no change of auditor, no restatement, and no disclosed pledge of shares.
Remuneration and incentives. The proxy was not attached, so performance metrics and pay horizons are not analyzed. The 10-K contains one fact on its own: the CEO's FY2025 option grant, described in 3-bis, carries a market condition that "has been achieved" and now vests by service only.
The year's decisions read together. Five decisions, in five different notes, change next year's balance sheet. Veeva let the Salesforce agreement run out and must move its CRM base onto its own platform by the end of 2029. It settled IQVIA without damages. It authorized $2 billion of buybacks and spent $179.9 million in January. It bought Ostro, an AI-driven patient and doctor engagement platform, for about $100 million in March 2026. Its board added 6,503,351 shares to the equity plan, leaving 51.3 million available (31.3% of shares outstanding). After three years of storing most of its cash in bonds, Veeva began spending it on its own shares and on products, while rebuilding the platform under its largest Commercial product. What changes is that capital allocation, absent from the comparative years, will become visible in the FY2027 statements through the repurchase line and goodwill. The 10-K states no intention behind these moves.
The question is whether the 10-K admits setbacks.
It does, but only in the risk factors. There the 10-K states that "certain customers have chosen" a competitor's CRM, that sales-rep cuts hurt Veeva CRM sales, and that Veeva has "limited experience in acquiring other businesses." The MD&A, where results are explained, does not mention lost CRM customers. It attributes Commercial growth to expanding use and price increases. The cause of a known headwind sits in the risk section, while the discussion of results describes only the tailwinds. No write-down, impairment or lowered target is reported.
The question is which accounting choices move reported profit and how much.
Standards adopted and pending. ASU 2023-09 on tax disclosures was adopted prospectively, which is why the FY2026 rate reconciliation has a different format from the prior years. ASU 2025-06 on internal-use software will be early-adopted in Q1 FY2027 with no material effect expected. ASU 2024-03 will add expense detail from FY2028. There were no restatements.
Critical Audit Matter. One CAM, on revenue, covered in 3-bis.
Choices that shift profit. Capitalized commissions amortized over three years and capitalized internal-use software amortized over three years are the two places where cost moves between years. The first is quantified and small: $20.0 million capitalized against $16.4 million amortized, a $3.6 million benefit to the year. The second is not quantified. The difference between SBC on the two bases ($3.8 million) may relate to it, but the 10-K does not say so.
GAAP vs non-GAAP. Non-GAAP operating income was $1,433.8 million against GAAP $916.4 million; the excluded items are listed and summed in 5-bis. Non-GAAP operating income is also the measure the CEO uses to evaluate the single segment. The tax effect on adjustments uses a fixed 21% rate, not the 23.9% actual rate.
Taxes. The effective rate of 23.9% exceeds the 21% federal rate. The main additions are state taxes (3.5 points), non-deductible SBC (2.7 points) and capped executive pay (1.2 points). The main reductions are R&D credits (1.9 points), excess tax benefits on equity awards (1.4 points) and the FDII deduction (1.1 points). The FDII deduction fell from $30.5 million to $13.1 million, because accelerated R&D deductions under the new law reduced the taxable income on which it is calculated. Faster deductions saved cash and raised the book rate in the same year.
Net income is a fair measure of operating performance once two items are recognized. A quarter of pre-tax income is interest, and the tax rate will keep responding to stock-price-driven excess tax benefits, which management itself excludes because they fluctuate.
These are drivers the 10-K documents, each tied to a figure in the filing.
Only the second and third catalysts have a figure attached in the 10-K. The others are directions the company has declared, and their financial effect will first be measurable in the FY2027 statements.
The comparison is not possible. The 10-K contains no targets set in the prior year: the MD&A covers FY2025 against FY2024 only by reference to last year's filing, and guidance is published elsewhere. The one prior-period commitment the document lets us check is the CEO option's market condition, which "has been achieved." The forward statements in this filing will be checkable next year: G&A expected to fall, cost of subscription and R&D to rise, operating cash to benefit from the tax law, and $1.82 billion of buyback capacity.
The question is what would have to happen for this investment to produce a permanent loss of capital within three years. Three mechanisms in the 10-K could get there.
1. The CRM base erodes faster than the rest grows. The mechanism: during the forced migration to Vault CRM, large customers choose Salesforce, which already has named wins, and the top-ten concentration means a few decisions move the total. The figure today is Commercial subscription revenue of $1,257.6 million, 39.4% of total revenue, growing 13.8%. The top ten customers account for 28% of revenue. The early signal would be Commercial subscription growth falling below the growth in Commercial customers, together with deferred revenue growing more slowly than subscription revenue. Because terms are one year, a lost customer shows up in deferred revenue at the next renewal date.
2. The multiple prices operating profit as if margin expansion continues. The mechanism: the price is 38–39 times FY2026 operating earnings after SBC and without the cash. The profit growth behind it came mostly from costs growing slower than revenue, not from capital. The 10-K expects costs to keep rising with compensation, and to include new language-model expenses. The figure today is an operating margin of 28.7%, up from 18.2% in two years. The signal would be operating expense growth catching up with revenue growth.
3. The cash pile is deployed at returns below what it earns today. The mechanism: the portfolio, earning about 4.6% before tax, is turned into buybacks above the year-end price or into acquisitions in an area where the 10-K admits "limited experience." The figures today are the $224.43 paid per share against $207.36 at year end. A first post-year acquisition cost about $100 million. The signal would be goodwill growing without a matching increase in revenue, or buyback volume rising while dilution from equity awards continues at about two million net shares a year.
The question is what the shareholder would keep if growth stopped.
Tangible equity, which is equity minus goodwill and intangibles, is $6,744.6 million. Per share it is $41.29 on cover shares, or $41.18 on year-end shares. Net working capital is $6,360.6 million and the current ratio is 4.9. Cash and investments are $40.17 per cover share, or $39.58 after deducting all lease liabilities. Of total assets, 73.1% are cash or securities at observable prices, and 8.3% depend on a management estimate.
If revenue stopped growing and margins went back to the average of the three years (24.0%), the securities portfolio would protect the shareholder. It accounts for about a fifth of the price. The rest of the price would rest on an operating business whose earnings would fall, and that portion has no asset backing beyond receivables funded by customer prepayments.
Commercial exposure. The document answers the aggregate and leaves the specific open. Commercial subscription growth accelerated to 13.8% while a named competitor was winning large CRM accounts, so whatever was lost in FY2026 was more than offset inside the Commercial line. Whether CRM itself held cannot be read, because Veeva does not split it out. The reading holds as long as Commercial subscription growth stays above Commercial customer growth and deferred revenue keeps pace with subscription revenue. It fails if those two lines slow at the same time, because that is how one-year contracts would show non-renewals.
What the price buys. Separating the cash does not make the stock cheaper: the operating business alone is priced at about 39 times FY2026 NOPAT. It earns roughly 93% on capital it barely needs, while 82% of three years of operating cash went into securities earning about 4.6% before tax. The price is paying for a high-return business whose surplus has so far earned a bond return. The reading holds if the repurchase and acquisition activity begun in January–March 2026 earns more than the portfolio does. It fails if capital goes out at prices that the operating cash flow per share does not cover.
What the shareholder keeps. The answer is free cash flow after SBC, $5.47 per diluted share against $8.30 before SBC. The share count still grew after the first buyback, and about $482 million of unrecognized SBC means the cost continues. The reading holds if the buyback reduces the diluted count. It fails if repurchases only absorb new grants, because then the cash spent on them is a compensation cost by another route.
The FY2027 annual report will allow five checks. Commercial subscription revenue, today $1,257.6 million with 767 customers, will show in the first full year after the Salesforce agreement expired whether the aggregate keeps outgrowing the customer count. Deferred revenue, today $1,488.8 million, is the earliest place non-renewals appear under one-year terms. The diluted share count, today 166,995 thousand, read with the use of the $1.82 billion authorization, will show whether buybacks reduce the count or offset grants. Cash taxes against the provision, today $230.0 million against $285.6 million, will show how much operating cash growth is tax timing. Goodwill, unchanged at $439.9 million at both year ends shown and with no acquisition in the three years, will measure what Ostro and any later deal cost, against the revenue they add.
How much of Commercial subscription revenue is Veeva CRM, and how much of it has already migrated or been lost? How large are the Salesforce fees inside cost of subscription? What explains receivables growing faster than deferred revenue? How much internal-use software is capitalized each year? How much of the tax cash benefit remains under the new law? How many shares do the CEO and directors own (in the proxy, not attached)? What revenue and profit does Ostro bring for its roughly $100 million?
Based on the Form 10-K of Veeva Systems Inc. for the fiscal year ended January 31, 2026, filed with the SEC on March 20, 2026. Price-based measures use the closing price of $207.36 on January 31, 2026 and the 163,330,933 shares outstanding at March 17, 2026, both supplied with the request. This analysis is for information purposes only and does not constitute investment advice.
All inputs are in US$ thousands unless stated; results are rounded.
Section 1 — Company profile
1.1 R&D and Quality subscription growth = 1,426,626 / 1,179,771 − 1 = 20.92%
1.2 Commercial subscription growth = 1,257,568 / 1,104,888 − 1 = 13.82%
1.3 R&D and Quality services growth = 321,810 / 276,658 − 1 = 16.32%
1.4 Commercial services growth = 189,307 / 185,302 − 1 = 2.16%
1.5 R&D and Quality share of revenue FY2024 = (905,790 + 276,099) / 2,363,673 = 50.00%; subscription only = 905,790 / 2,363,673 = 38.32%
1.6 R&D and Quality subscription share FY2026 = 1,426,626 / 3,195,311 = 44.65%
1.7 Asia Pacific growth = 280,162 / 265,735 − 1 = 5.43%; share FY2024 = 250,600 / 2,363,673 = 10.60%; FY2026 = 280,162 / 3,195,311 = 8.77%
1.8 Employees FY2025 = 7,928 − 637 = 7,291
1.9 Asia Pacific growth / group growth: FY2026 = 5.43 / 16.34 = 0.33; FY2025 = 6.04 / 16.20 = 0.37
Section 1-bis — Classification
1b.1 Revenue growth = 3,195,311 / 2,746,619 − 1 = 16.34%; FY2025 = 2,746,619 / 2,363,673 − 1 = 16.20%
1b.2 Operating margin = 916,369 / 3,195,311 = 28.68%
1b.3 Capex / revenue = 29,131 / 3,195,311 = 0.91%
1b.4 Change in net operating assets = 749,797 − 757,921 = −8,124
1b.5 Cash and investments / total assets = 6,560,814 / 8,979,343 = 73.06%
1b.6 Other income / pre-tax income = 278,139 / 1,194,508 = 23.28%
1b.7 SBC / revenue = 472,703 / 3,195,311 = 14.79%
Section 2 — Business quality
2.1 Customer growth = 1,552 / 1,477 − 1 = 5.08%
2.2 Revenue per customer FY2026 = 3,195,311 / 1,552 = 2,058.8; FY2025 = 2,746,619 / 1,477 = 1,859.6
2.3 R&D / revenue FY2026 = 767,386 / 3,195,311 = 24.02%; FY2024 = 629,031 / 2,363,673 = 26.61%
2.4 Commercial subscription per customer = (1,257,568 / 767) / (1,104,888 / 730) − 1 = 1,639.6 / 1,513.5 − 1 = 8.33%
2.5 Cost growth FY2026: cost of subscription 362,888 / 323,070 − 1 = 12.32%; R&D 767,386 / 693,078 − 1 = 10.72%; S&M 428,798 / 396,726 − 1 = 8.08%; G&A 300,739 / 265,744 − 1 = 13.17%
2.6 Headcount growth = 637 / 7,291 = 8.74%
2.7 Subscription gross margin FY2026 = 1 − 362,888 / 2,684,194 = 86.48%; FY2024 = 1 − 290,577 / 1,901,593 = 84.72%
2.8 Services margin FY2026 = 1 − 419,131 / 511,117 = 18.00%; FY2025 = 18.49%; FY2024 = 16.31%
2.9 Operating margin FY2024 = 429,334 / 2,363,673 = 18.16%
Section 3 — Financial analysis
3.0 Income statement growth FY2026 / FY2025: subscription 2,684,194 / 2,284,659 − 1 = 17.49%, 2,284,659 / 1,901,593 − 1 = 20.14%; gross profit 2,413,292 / 2,046,983 − 1 = 17.90%, 2,046,983 / 1,686,382 − 1 = 21.38%; operating income 916,369 / 691,435 − 1 = 32.53%, 691,435 / 429,334 − 1 = 61.05%; other income 278,139 / 227,946 − 1 = 22.02%, 227,946 / 158,689 − 1 = 43.64%; pre-tax 1,194,508 / 919,381 − 1 = 29.93%, 919,381 / 588,023 − 1 = 56.35%; tax 285,602 / 205,243 − 1 = 39.15%, 205,243 / 62,318 − 1 = 229.35%; net income 908,906 / 714,138 − 1 = 27.27%, 714,138 / 525,705 − 1 = 35.84%; diluted EPS 5.44 / 4.32 − 1 = 25.93%, 4.32 / 3.22 − 1 = 34.16%; SBC 472,703 / 437,350 − 1 = 8.08%, 437,350 / 393,733 − 1 = 11.08%
3.0b Balance sheet changes: short-term investments 5,139,581 / 4,031,442 − 1 = 27.49%; equity 7,214,752 / 5,832,373 − 1 = 23.70%; gross debt 95,859 / 75,775 − 1 = 26.50%; net cash FY2025 = 5,150,227 − 75,775 = 5,074,452
3.1 Gross margin = 2,413,292 / 3,195,311 = 75.53%; FY2025 74.53%; FY2024 71.35%
3.2 Net margin = 908,906 / 3,195,311 = 28.44%; FY2025 26.00%; FY2024 22.24%
3.3 Effective tax rate = 285,602 / 1,194,508 = 23.91%; FY2025 = 205,243 / 919,381 = 22.32%; FY2024 = 62,318 / 588,023 = 10.60%
3.4 Interest share of other income = 267,219 / 278,139 = 96.1%
3.5 Other income / pre-tax FY2024 = 158,689 / 588,023 = 26.99%; FY2025 = 227,946 / 919,381 = 24.79%
3.6 Gross debt = 0 + 12,153 + 83,706 = 95,859
3.7 Net cash = 6,560,814 − 95,859 = 6,464,955
3.8 Equity / total assets = 7,214,752 / 8,979,343 = 80.35%
3.9 Free cash flow = 1,415,225 − 29,131 = 1,386,094; FY2025 = 1,090,051 − 20,519 = 1,069,532; FY2024 = 911,339 − 26,196 = 885,143
3.10 FCF after SBC = 1,386,094 − 472,703 = 913,391; FY2025 = 632,182; FY2024 = 491,410
3.11 FCF / net income = 1,386,094 / 908,906 = 1.525; FY2025 = 1,069,532 / 714,138 = 1.498; FY2024 = 885,143 / 525,705 = 1.684; subscription gross margin FY2025 = 1 − 323,070 / 2,284,659 = 85.86%
3.12 Non-cash items excluding SBC = 37,972 + 12,499 − 9,693 + 16,423 + 65,094 + 3,259 = 125,554
3.13 Working capital absorbed = −244,704 − 9,848 − 20,001 − 33,825 + 6,080 + 2,982 − 2,326 + 213,056 − 5,822 + 2,470 = −91,938
3.14 Owner earnings without working capital = 908,906 + 125,554 − 29,131 = 1,005,329
3.15 Owner earnings with working capital = 1,005,329 − 91,938 = 913,391
3.16 FCF − owner earnings = 1,386,094 − 913,391 = 472,703 = SBC
3.17 SBC basis difference = 476,538 − 472,703 = 3,835; FY2025 = 444,768 − 437,350 = 7,418; FY2024 = 399,513 − 393,733 = 5,780
3.18 Leases / operating income = 95,859 / 916,369 = 10.46%; × 52 weeks = 5.4 weeks
3.19 NOPAT FY2026 = 916,369 × (1 − 0.23910) = 697,269; FY2025 = 691,435 × (1 − 0.22324) = 537,079
3.20 ROIC (year-end) = 697,269 / 749,797 = 93.0%; FY2025 = 537,079 / 757,921 = 70.9%
3.21 ROE (year-end) = 908,906 / 7,214,752 = 12.60%; FY2025 = 714,138 / 5,832,373 = 12.24%
3.22 Share difference cover vs year-end = 163,330,933 − 163,778,271 = −447,338; −447,338 / 163,778,271 = −0.27%
3.23 Market capitalization = 163,330,933 × $207.36 = $33,868,302,267
3.24 Enterprise value = 33,868.3 − 6,560.8 + 95.9 = $27,403.3 million
3.25 Price / diluted EPS = 207.36 / 5.44 = 38.12x
3.26 Market cap / net income = 33,868.3 / 908.9 = 37.26x
3.27 Market cap / FCF = 33,868.3 / 1,386.1 = 24.43x; yield = 1,386.1 / 33,868.3 = 4.09%
3.28 Market cap / FCF after SBC = 33,868.3 / 913.4 = 37.08x; yield = 913.4 / 33,868.3 = 2.70%
3.29 EBITDA = 916,369 + 37,972 = 954,341; EV / EBITDA = 27,403.3 / 954.3 = 28.71x
3.30 EV / EBIT = 27,403.3 / 916.4 = 29.90x
3.31 EV / NOPAT = 27,403.3 / 697.3 = 39.30x
3.32 Tangible book value per share = (7,214,752 − 439,877 − 30,314) / 163,330.933 = 6,744,561 / 163,330.933 = $41.29; price / TBV = 207.36 / 41.29 = 5.02x
Section 3-bis — Notes
3b.1 Revenue recognized from opening deferred revenue = 1,226 / 1,274.0 = 96.2%
3b.2 Deferred revenue growth = 1,488,819 / 1,273,978 − 1 = 16.86%
3b.3 Provision − cash taxes = 285,602 − 229,965 = 55,637; FY2025 = 322,048 − 205,243 = 116,805 (cash above provision)
3b.4 Three-year provision = 285,602 + 205,243 + 62,318 = 553,163; cash = 229,965 + 322,048 + 134,473 = 686,486
3b.5 Valuation allowance / gross DTA = 79,495 / 435,130 = 18.27%; change in balance = 79,495 − 77,056 = 2,439; rate reconciliation line = (655)
3b.6 Unrecognized SBC = 417 + 65 = $482 million
3b.7 Options / year-end shares = 15,134,876 / 163,778,271 = 9.24%
3b.8 Investments / total assets = 5,139,581 / 8,979,343 = 57.24%
3b.9 Goodwill / total assets = 439,877 / 8,979,343 = 4.90%
3b.10 Deferred commissions / total assets = 29,961 / 8,979,343 = 0.33%
Section 3-ter — Balance sheet
3t.1 Weights on total assets: cash 1,421,233 / 8,979,343 = 15.83%; investments 57.24%; receivables 1,259,737 / 8,979,343 = 14.03%; deferred revenue 1,488,819 / 8,979,343 = 16.58%; APIC 2,843,089 / 8,979,343 = 31.66%; retained earnings 4,363,501 / 8,979,343 = 48.59%
3t.2 Allowance / gross receivables = 256 / 1,259,993 = 0.020%
3t.3 DSO = 1,259,737 / 3,195,311 × 365 = 143.9 days; FY2025 = 1,016,356 / 2,746,619 × 365 = 135.1 days
3t.4 DPO = 37,644 / 782,019 × 365 = 17.6 days; FY2025 = 30,447 / 699,636 × 365 = 15.9 days
3t.5 Deferred revenue days = 1,488,819 / 3,195,311 × 365 = 170.1; FY2025 = 1,273,978 / 2,746,619 × 365 = 169.3
3t.6 Working-capital cycle (our construction) = 143.9 − 17.6 − 170.1 = −43.8 days; FY2025 = 135.1 − 15.9 − 169.3 = −50.1 days
3t.7 Other current liabilities = 45,857 + 45,885 + 6,698 = 98,440
3t.8 ROE on average equity = 908,906 / ((7,214,752 + 5,832,373) / 2) = 13.93%
3t.9 ROE with repurchases added back = 908,906 / (7,214,752 + 179,942) = 12.29%
3t.10 Cash and investments / equity = 6,560,814 / 7,214,752 = 90.9%
3t.11 After-tax portfolio yield = 278,139 × (1 − 0.2391) / 6,560,814 = 211,637 / 6,560,814 = 3.23%
3t.12 Retained earnings change = 4,363,501 − 3,454,595 = 908,906 = net income
3t.12b Net deferred tax assets (N7) = 273,417 − 558 = 272,859
3t.13 Estimate-based assets = 439,877 + 30,314 + 273,417 = 743,608; / 8,979,343 = 8.28%
3t.14 Receivables at invoice incl. unbilled = 1,259,737 + 50,609 = 1,310,346; / 8,979,343 = 14.59%
Section 3-quater — Cash flow quality
3q.1 Third-party money = 213,056 + 6,080 + 2,982 = 222,118; / 1,386,094 = 16.02%; FY2025 = 227,838 − 1,961 − 1,414 = 224,463; / 1,069,532 = 20.99%
3q.2 Operating cash growth = 1,415,225 / 1,090,051 − 1 = 29.83%
3q.3 Operating cash before taxes = 1,415,225 + 229,965 = 1,645,190; FY2025 = 1,090,051 + 322,048 = 1,412,099; growth = 16.51%
3q.4 After-tax interest = 267,219 × (1 − 0.2391) = 203,328
3q.5 FCF increase = 1,386,094 − 1,069,532 = 316,562; lower cash taxes = 322,048 − 229,965 = 92,083; higher interest = 267,219 − 207,987 = 59,232; working capital swing = −91,938 − 7,620 = −99,558
3q.6 Tax plus interest share of FCF increase = (92,083 + 59,232) / 316,562 = 47.8%
Section 3-quinquies — Returns and reinvestment
3qq.1 Per diluted share FY2026: revenue 3,195,311 / 166,995 = $19.13; FCF 1,386,094 / 166,995 = $8.30; FCF after SBC 913,391 / 166,995 = $5.47; equity 7,214,752 / 166,995 = $43.20
3qq.2 Same, FY2025: revenue $16.62; FCF $6.47; FCF after SBC $3.83; equity $35.30. FY2024: $14.46; $5.41; $3.01; $28.41
3qq.3 Diluted share growth = 166,995 / 165,232 − 1 = 1.07%; FCF per share growth = 8.30 / 6.47 − 1 = 28.3%; equity per share growth = 43.20 / 35.30 − 1 = 22.4%; S&M / revenue = 428,798 / 3,195,311 = 13.42%
3qq.4 Invested capital = 7,214,752 + 95,859 − 6,560,814 = 749,797; FY2025 = 5,832,373 + 75,775 − 5,150,227 = 757,921
3qq.5 ROIC on average capital = 697,269 / ((749,797 + 757,921) / 2) = 92.5%
3qq.6 Operating capital excl. goodwill, intangibles, DTA = 749,797 − 439,877 − 30,314 − 273,417 = 6,189; FY2025 = 757,921 − 439,877 − 44,460 − 343,919 = −70,335
3qq.7 Incremental ROIC = (697,269 − 537,079) / (749,797 − 757,921) = 160,190 / −8,124 → not meaningful
3qq.8 Reinvestment rate = (29,131 − 37,972 + 0 + 91,938) / 697,269 = 83,097 / 697,269 = 11.92%; FY2025 = (20,519 − 39,383 + 0 − 7,620) / 537,079 = −4.93%
3qq.9 Implied growth = 11.92% × 93.0% = 11.08%; actual operating income growth = 916,369 / 691,435 − 1 = 32.53%; total cost base growth = (782,019 + 1,496,923) / (699,636 + 1,355,548) − 1 = 2,278,942 / 2,055,184 − 1 = 10.89%
3qq.10 Cumulative operating cash = 1,415,225 + 1,090,051 + 911,339 = 3,416,615
3qq.11 Net securities purchases = (3,133,080 − 2,057,849) + (2,581,968 − 1,902,349) + (2,697,968 − 1,647,813) = 2,805,005; / 3,416,615 = 82.10%
3qq.12 Average liquidity = (6,560,814 + 5,150,227) / 2 = 5,855,521; interest yield = 267,219 / 5,855,521 = 4.56%
3qq.13 Equity flows = 422,088 − 169,949 − 251,545 = 594; cumulative FCF = 1,386,094 + 1,069,532 + 885,143 = 3,340,769
3qq.14 Cumulative capex = 75,846; cumulative net income = 2,148,749
3qq.15 Capex / D&A = 29,131 / 37,972 = 0.77; FY2025 = 0.52; FY2024 = 0.80; excluding intangibles amortization = 29,131 / (37,972 − 14,146) = 1.22; FY2025 = 20,519 / (39,383 − 18,558) = 0.99
3qq.16 EBIT / EV = 916.4 / 27,403.3 = 3.34%
3qq.17 NOPAT = net income − after-tax other income = 908,906 − 211,637 = 697,269
3qq.18 Earnings yield = 908.9 / 33,868.3 = 2.68%
3qq.19 FCF excluding after-tax interest = 1,386,094 − 203,328 = 1,182,766; EV / that = 27,403.3 / 1,182.8 = 23.17x
3qq.20 Same, minus SBC = 1,182,766 − 472,703 = 710,063; EV / that = 27,403.3 / 710.1 = 38.59x
3qq.21 Cumulative R&D = 767,386 + 693,078 + 629,031 = 2,089,495; revenue increase = 3,195,311 − 2,363,673 = 831,638
Section 3-sexies — Early signals
3s.1 Gross receivables growth = 1,259,993 / 1,016,413 − 1 = 23.96%; gap vs revenue = 23.96 − 16.34 = 7.62 pp
3s.2 Allowance growth = 256 / 57 − 1 = 349%
3s.3 Payables growth = 37,644 / 30,447 − 1 = 23.64%; cost of revenues growth = 782,019 / 699,636 − 1 = 11.78%; gap 11.86 pp
3s.4 Unbilled growth = 50,609 / 40,761 − 1 = 24.16%; services growth = 511,117 / 461,960 − 1 = 10.64%; gap 13.52 pp
3s.5 Deferred commissions balance growth = 29,961 / 26,383 − 1 = 13.56%; S&M growth = 8.08%; gap 5.48 pp
3s.6 Commissions capitalized growth = 20,001 / 17,995 − 1 = 11.15%; gap 3.07 pp
3s.7 Subscription revenue growth = 2,684,194 / 2,284,659 − 1 = 17.49%; deferred revenue gap = 16.86 − 17.49 = −0.63 pp
3s.8 Operating cash gap = 29.83 − 16.34 = 13.49 pp
3s.9 Absolute increases: payables 37,644 − 30,447 = 7,197; unbilled 50,609 − 40,761 = 9,848; deferred commissions 29,961 − 26,383 = 3,578
3s.10 Allowance multiple = 256 / 57 = 4.49
Section 3-septies — Sector metrics
3sp.1 Subscription share = 2,684,194 / 3,195,311 = 84.00%; FY2025 = 2,284,659 / 2,746,619 = 83.18%
3sp.2 Deferred revenue / subscription revenue = 1,488,819 / 2,684,194 = 55.47%; FY2025 = 1,273,978 / 2,284,659 = 55.76%
3sp.3 R&D and Quality subscription per customer = (1,426,626 / 1,196) / (1,179,771 / 1,125) − 1 = 1,192.8 / 1,048.7 − 1 = 13.7%
Section 5-bis — Management's record
5b.1 Net-settlement taxes, three years = 93,247 + 79,423 + 78,875 = 251,545; option proceeds = 253,863 + 105,538 + 62,687 = 422,088
5b.2 Average repurchase price = 179,930 / 801,735 = $224.43
5b.3 Premium to year-end close = 224.43 / 207.36 − 1 = 8.23%
5b.4 Repurchase price / FCF per share = 224.43 / 8.30 = 27.04x (yield 3.70%); / FCF after SBC per share = 224.43 / 5.47 = 41.03x (yield 2.44%)
5b.5 Repurchase basis difference = 179,942 − 169,949 = 9,993
5b.6 Shares issued = 1,374,104 + 988,578 = 2,362,682; net shares for compensation = 2,362,682 − 366,465 = 1,996,217
5b.7 Net share change = 1,996,217 − 801,735 = 1,194,482; / 162,583,789 = 0.73%
5b.8 Buyback offset = 801,735 / 1,996,217 = 40.16%
5b.9 Cash: 169,949 + 93,247 = 263,196 vs proceeds 253,863
5b.10 Excluded items, three years (N14 "other segment items") = 517,476 + 460,908 + 413,192 = 1,391,576; / 908,906 = 1.531. FY2026 and FY2025 detail (MD&A): 472,703 + 14,146 + 30,627 = 517,476; 437,350 + 18,558 + 5,000 = 460,908
5b.11 SBC share of exclusions = (472,703 + 437,350 + 393,733) / 1,391,576 = 1,303,786 / 1,391,576 = 93.7%
5b.12 Non-GAAP / GAAP EPS = 8.10 / 5.44 = 1.49
5b.13 Plan shares available / shares outstanding = 51,279,704 / 163,778,271 = 31.31%
Section 6 — Accounting
6.1 Commissions net benefit = 20,001 − 16,423 = 3,578
6.2 Non-GAAP − GAAP operating income = 1,433,845 − 916,369 = 517,476
Section 8-bis — Pre-mortem
8b.1 Commercial subscription share = 1,257,568 / 3,195,311 = 39.36%
Section 8-ter — Downside
8t.1 Tangible equity = 7,214,752 − 439,877 − 30,314 = 6,744,561; per cover share $41.29; per year-end share = 6,744,561 / 163,778.271 = $41.18
8t.2 Net working capital = 7,997,630 − 1,637,056 = 6,360,574; current ratio = 7,997,630 / 1,637,056 = 4.89
8t.3 Cash per cover share = 6,560,814 / 163,330.933 = $40.17; net of leases = 6,464,955 / 163,330.933 = $39.58
8t.4 Three-year average operating margin = (28.68 + 25.17 + 18.16) / 3 = 24.00%
8t.5 Cash and investments / market cap = 6,560.8 / 33,868.3 = 19.37%
Section 9 — Synthesis
9.1 Net cash / total assets = 6,464,955 / 8,979,343 = 72.0% (gross cash and investments 73.1%)
9.2 Tax and interest share of FCF increase = 47.8% (see 3q.6)
The full data table behind this report — every line item with its source in the filing and the arithmetic checks — is published separately: Veeva Systems Inc. FY2026 data table.