Back to top

Veeva Systems (VEEV) Q3 Earnings & Revenues Beat Estimates

Read MoreHide Full Article

Veeva Systems Inc. (VEEV - Free Report) reported third-quarter fiscal 2019 adjusted earnings of 45 cents per share, which surpassed the Zacks Consensus Estimate of 38 cents. Adjusted earnings increased a whopping 80% on a year-over-year basis.

Total revenues came in at $224.7 million, outpacing the Zacks Consensus Estimate of $216.23 million. On a year-over-year basis, the top line improved 27%.

The company has a Zacks Rank #2 (Buy).

Veeva Systems Inc. Price and Consensus

 

Segmental Details

Subscription Service

Fiscal third-quarter subscription service revenues summed $178.2 million, up 25% year over year. On an adjusted basis, subscription gross margin came in at 84.8%, which expanded 320 basis points (bps).

Per management, solid momentum in bookings continued across all areas of Vault, which was 44% of subscription revenues compared with 36% a year ago.

Professional Service and Others

Professional Service revenues rose almost 35.9% to $46.5 million from the figure registered in the year-ago quarter. The segment’s gross margin in the quarter under review was 35%, which expanded 280 bps.

According to Veeva Systems, this improvement in revenues can be attributed to continued strong demand within Veeva Vault R&D (research and development). Management also remains optimistic about the segment’s impressive performance in the fiscal fourth quarter.

Margin Details

In the reported quarter, adjusted gross profit increased 31.2% to $167.4 million. Adjusted gross margin was 74.5%, which expanded 240 bps.

Adjusted operating income totaled $84.4 million, up 44.5% year over year. In the reported quarter, adjusted operating margin was 37.6%, which expanded 460 bps. Per management, the expansion was driven by impressive top-line performance.

However, adjusted operating expenses rose 20% year over year to $83 million. R&D expenses too shot up 17.4% year over year to $34.6 million.

Guidance

For fourth-quarter fiscal 2019, Veeva Systems expects total revenues to be between $226 million and $227 million. The Zacks Consensus Estimate for the same is pegged at $ 222.1 million, below the guided range.

Adjusted earnings are expected to be 40 cents per share. The Zacks Consensus Estimate is pinned at 37 cents per share, below the projected figure. Adjusted operating income is expected in the $77-$78 million band.

Veeva Systems raised the guidance for fiscal 2019. Revenues are expected to be between $855.8 million and $856.8 million, up from the previously anticipated range of $840-$843 million. The Zacks Consensus Estimate for the same stands at 843.3 million, below the guided range.

For the fiscal year, adjusted earnings are anticipated to be $1.58 per share, up from the previous guidance of $1.47-$1.48. The Zacks Consensus Estimate for earnings is pegged at $1.48, below the projected figure.

In Conclusion

Veeva Systems ended the fiscal third quarter on a solid note, with both earnings and revenues exceeding the respective consensus mark. Impressive performance by the Subscription business segment buoys optimism. Meanwhile, the company continues benefiting from its flagship Vault platform. In recent times, Veeva Vault’s customers have increased manifold.

Furthermore, the company’s unique solutions include Veeva Vault, Veeva CRM, Veeva Network and Veeva OpenData. Veeva’s new CRM Sunrise UI and Nitro look promising. In Commercial Cloud, Veeva Systems had a number of wins and expansions in all market segments and regions

Moving ahead,Veeva Systems is confident about growth in new markets with products like EDC, Safety, Nitro and Vault. On the flip side, high expenses on the operational side are worrisome. Also, intense competition and a saturating life sciences market remain potent threats. Volatility in foreign currency exchange rate is an added concern.

Earnings of MedTech Majors at a Glance

A few top-ranked stocks in the broader medical space are Genomic Health, Inc. (GHDX - Free Report) , Illumina, Inc. (ILMN - Free Report) and Hill-Rom Holdings Inc. (HRC - Free Report) .

Genomic Health sports a Zacks Rank #1 (Strong Buy), Illumina and Hill-Rom carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Genomic Health reported adjusted EPS of 35 cents in the third quarter of 2018, which outpaced the Zacks Consensus Estimate of 7 cents.

Illumina reported adjusted EPS of $1.52, which surpassed the consensus mark by 21.6%.

Hill-Rom Holdings posted adjusted EPS of $1.63 in fourth-quarter fiscal 2018, which exceeded the Zacks Consensus Estimate by 7.9%.

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>



More from Zacks Analyst Blog

You May Like