Healthcare software provider Veeva Systems (NASDAQ:VEEV) beat analyst expectations in Q1 FY2023 quarter, with revenue up 16.4% year on year to $505.1 million. The company expects that next quarter's revenue would be around $530 million, which is the midpoint of the guidance range. That was in roughly line with analyst expectations. Veeva Systems made a GAAP profit of $100.1 million, down on its profit of $115.5 million, in the same quarter last year.
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Veeva Systems (VEEV) Q1 FY2023 Highlights:
- Revenue: $505.1 million vs analyst estimates of $495.8 million (1.85% beat)
- EPS (non-GAAP): $0.99 vs analyst estimates of $0.92 (7.34% beat)
- Revenue guidance for Q2 2023 is $530 million at the midpoint, roughly in line with what analysts were expecting
- The company reconfirmed revenue guidance for the full year, at $2.17 billion at the midpoint
- Free cash flow of $478.6 million, up from $50.1 million in previous quarter
- Gross Margin (GAAP): 72.3%, down from 73.2% same quarter last year
Built on top of Salesforce as one of the first vertical-focused cloud platforms, Veeva (NYSE:VEEV) provides data and customer relationship management (CRM) software for organizations in the life sciences industry.
The coronavirus pandemic has underscored the importance of high-quality health infrastructure in times of crisis. Coupled with intense competition between drugmakers and the growing volume of data in the health care sector, demand for data management solutions in the healthcare space is expected to remain strong in the years ahead.
Sales Growth
As you can see below, Veeva Systems's revenue growth has been strong over the last year, growing from quarterly revenue of $433.5 million, to $505.1 million.
This quarter, Veeva Systems's quarterly revenue was once again up 16.4% year on year. We can see that the company increased revenue by $19.6 million quarter on quarter. That's a solid improvement on the $9.38 million increase in Q4 2022, so shareholders should appreciate the acceleration of growth.
Guidance for the next quarter indicates Veeva Systems is expecting revenue to grow 16.3% year on year to $530 million, slowing down from the 28.8% year-over-year increase in revenue the company had recorded in the same quarter last year. Ahead of the earnings results the analysts covering the company were estimating sales to grow 17.3% over the next twelve months.
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Key Takeaways from Veeva Systems's Q1 Results
With a market capitalization of $26.3 billion, more than $2.83 billion in cash and with free cash flow over the last twelve months being positive, the company is in a very strong position to invest in growth.
Veeva Systems topped analysts’ revenue expectations this quarter, even if just narrowly. That feature of these results really stood out as a positive. On the other hand, revenue growth is overall a bit slower these days. Zooming out, we think this was still a decent, albeit mixed, quarter, showing the company is staying on target. The company is up 1.31% on the results and currently trades at $170 per share.
Should you invest in Veeva Systems right now? It is important that you take into account its valuation and business qualities, as well as what happened in the latest quarter. We look at that in our actionable report which you can read here, it's free.
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The author has no position in any of the stocks mentioned.