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Veeva Systems (VEEV) Q3 Earnings and Revenues Beat Estimates

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Veeva Systems, Inc. (VEEV - Free Report) reported third-quarter fiscal 2021 adjusted earnings per share (EPS) of 78 cents, beating the Zacks Consensus Estimate by 14.7%.  Moreover, the metric surged 30% on a year-over-year basis.

Further, the company’s revenues totaled $377.5 million, outpacing the Zacks Consensus Estimate by 4.4%. On a year-over-year basis, the top line also improved 34.4%.

Segmental Details

Subscription Service

Subscription service revenues in the fiscal third quarter summed $302.9 million, up 34% year over year.

Professional Service and Others

Professional Service revenues rose 37.6% to $74.6 million from the year-ago figure.

Per management, a solid performance by Veeva Commercial Cloud and Veeva Vault drove revenues across all segments.

Margin Details

In the reported quarter, gross profit increased 32.2% year over year to $274.5 million. Gross margin was 72.7%, which contracted 118 basis points (bps).

Total operating cost came in at $173.2 million, up 36.6%.

Operating profit totaled $101.3 million, up 25.4% year over year. In the quarter under review, operating margin fell 193 bps to 26.8%.

 

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

 

Cash Position

The company exited the fiscal third quarter with cash and cash equivalents of $634.3 million compared with $795.8 million at the end of the fiscal second quarter.

Cumulative net cash provided by operating activities came in at $482.9 million, up from $398.3 million at the end of the year-ago period.

Guidance

For the fourth quarter of fiscal 2021, Veeva Systems expects revenues between $378 and $380 million. The Zacks Consensus Estimate for the same stands at $367.9 million.

Adjusted EPS is projected between 67 and 68 cents. The Zacks Consensus Estimate for the metric is pegged at 62 cents.

Adjusted operating income is estimated between $136 and $138 million.

For fiscal 2021, revenues are expected within $1.44-$1.45 billion (up from the previously-issued guided range of $1.41-$1.42 billion). The Zacks Consensus Estimate for the same is pegged at $1.42 billion.

Adjusted EPS is expected in the range of $2.83-$2.84 (up from the past guided range of $2.64-$2.67). The Zacks Consensus Estimate for the same stands at $2.68.

Adjusted operating income is expected between $566 and $568 million (up from the earlier projection of $540-$545 million).

For fiscal 2022, revenues are expected within $1.70-$1.72 billion.The Zacks Consensus Estimate for the same stands at $1.70 billion.

Wrapping Up

Veeva Systems ended the third quarter of fiscal 2021 on a strong note. The core Subscription Service and Professional Service segments performed impressively. A raised guidance for the full fiscal buoys optimism as well. Apart from these upsides, the company continues to benefit from its flagship Vault platform. In fact, Veeva Vault’s customer count 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 too.

In Commercial Cloud, Veeva Systems secured a number of deals. The company is confident about growth in new markets with strength in 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 stock.

On the flip side, contraction of both margins in the quarter is a headwind. 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 Systems currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader medical space that already announced quarterly results are Thermo Fisher Scientific Inc. (TMO - Free Report) , Align Technology, Inc. (ALGN - Free Report) and BioRad Laboratories, Inc. (BIO - Free Report) , each presently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Thermo Fisher reported third-quarter 2020 adjusted EPS of $5.63, beating the Zacks Consensus Estimate by 28.8%. Revenues of $8.52 billion also surpassed the consensus mark by 10%.

Align Technology reported third-quarter 2020 adjusted EPS of $2.25, which surpassed the Zacks Consensus Estimate by 281.4%. Revenues of $734.1 million too outpaced the consensus mark by 38%.

BioRad reported third-quarter 2020 adjusted EPS of $3, which exceeded the Zacks Consensus Estimate by 62.2%. Moreover, revenues of $647.3 million in the quarter topped the Zacks Consensus Estimate by 14.5%.

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