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Veeva Systems (VEEV) Q1 Earnings and Revenues Beat Estimates

Zacks Equity Research

Veeva Systems, Inc. VEEV reported first-quarter fiscal 2021 adjusted earnings per share (EPS) of 66 cents, beating the Zacks Consensus Estimate of 58 cents by 13.8%.  The metric surged 32% on a year-over-year basis.

The company’s revenues totaled $337.1 million outpaced the Zacks Consensus Estimate by 3.8%. On a year-over-year basis, the top line improved 37.7%.

Segmental Details

Subscription Service

Fiscal first-quarter subscription service revenues summed $270.2 million, up 36% year over year.

Professional Service and Others

Professional Service revenues rose almost 43.6% to $66.9 million from the year-ago figure.

Per management, outperformance by Veeva Commercial Cloud and Veeva Vault drove revenues across all segments.

Margin Details

In the reported quarter, gross profit increased 35.1% year over year to $242.2 million. Gross margin was 71.9%, which contracted 138 basis points (bps).

Operating profit totaled $87.6 million, up 23% year over year. In the quarter under review, adjusted operating margin fell 310 bps to 25.9%.

Veeva Systems Inc. Price, Consensus and EPS Surprise


Veeva Systems Inc. Price, Consensus and EPS Surprise

Veeva Systems Inc. price-consensus-eps-surprise-chart | Veeva Systems Inc. Quote


For the second quarter of fiscal 2021, Veeva Systems expects revenues between $339 million and $341 million. The Zacks Consensus Estimate for the same stands at $335.1 million.

Adjusted EPS is projected between 63 and 64 cents. The Zacks Consensus Estimate for the metric is pegged at 60cents.

Adjusted operating income is estimated between $126 million and $128 million.

For fiscal 2021, revenues are expected within $1.38-$1.39 billion. The Zacks Consensus Estimate for the same is pinned at $1.38 billion.

Adjusted EPS is expected in the range of $2.50-$2.55. The Zacks Consensus Estimate for the same stands at $2.46.

Adjusted operating income is expected between $500 million and $510 million.

Wrapping Up

Veeva Systems ended the fiscal first quarter on a strong note. The core Subscription business segment performed impressively. A solid guidance for fiscal 2021 buoys optimism as well. Apart from these, the company continues to benefit from its flagship Vault platform. In fact, Veeva Vault’s customer count has increased manifold in recent times. Markedly, Veeva Systems’ unique solutions include Veeva Vault, Veeva CRM, Veeva Network and Veeva OpenData. The company’s new CRM Sunrise UI and Nitro look promising as well.

In Commercial Cloud, Veeva Systems secured a number of deals. The company is confident about growth in new markets, with products like EDC, Safety, Nitro and Vault. The addition of Veeva CRM Engage Meeting, new remote monitoring capabilities in Veeva SiteVault Free and Telehealth Metrics  to the Crossix Data Platform raises optimism.

On the flip side, high expenses on the operational side dented both margins in the quarter. Also, intense competition and a saturating life sciences market are concerning. Volatility in the foreign currency exchange rate is an added woe.

Zacks Rank and Key Picks

Veeva currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the broader medical space are Aphria Inc. APHA, Biogen Inc. BIIB and Eli Lilly and Company LLY.

Aphria reported third-quarter fiscal 2020 adjusted EPS of 2 cents against the Zacks Consensus Estimate of a loss of 4 cents. Net revenues of $64.4 million outpaced the consensus estimate by 14.6%. The company carries a Zacks Rank #2 (Buy) at present.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Biogen currently carries a Zacks Rank #2. It reported first-quarter 2020 adjusted EPS of $9.14, surpassing the Zacks Consensus Estimate by 18.1%. Revenues of $3.53 billion outpaced the consensus mark by 3.2%.

Eli Lilly delivered first-quarter 2020 EPS of $1.75, outpacing the Zacks Consensus Estimate by 12.9%. Revenues of $145.3 million surpassed the consensus estimate by 6.3%. The company currently sports a Zacks Rank #1.

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