Veeva Systems (NYSE:VEEV) Surprises With Q1 Sales

Adam Hejl /
2022/06/01 4:21 pm EDT
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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.

Is now the time to buy Veeva Systems? Access our full analysis of the earnings results here, it's free.

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.

Veeva Systems Total Revenue

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.

In volatile times like these we look for robust businesses with strong pricing power. Unknown to most investors, this company is one of the highest-quality software companies in the world, and their software products have been the default standard in critical industries for decades. The result is an impressive business that is up an incredible 18,152% since the IPO. You can find it on our platform for free.

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.