Back to top

Image: Bigstock

Veeva Systems (VEEV) Q3 Earnings and Revenues Beat Estimates

Read MoreHide Full Article

Veeva Systems Inc. (VEEV - Free Report) reported third-quarter fiscal 2020 earnings per share (EPS) of 60 cents, well ahead of the Zacks Consensus Estimate of 54 cents. The metric shot up 33.3% on a year-over-year basis.

This Zacks Rank #3 (Hold) company’s revenues totaled $280.9 million, outpacing the Zacks Consensus Estimate of $275.4 million. On a year-over-year basis, the top line improved 25%.

Segmental Details

Subscription Service

Third-quarter subscription service revenues summed $226.8 million, up 27.2% year over year. Per management, the solid momentum in bookings was maintained in the quarter.

Professional Service and Others

Professional Service revenues rose almost 16.4% to $54.2 million from the figure registered in the year-ago quarter.

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

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

Margin Details

In the reported quarter, adjusted gross profit increased 27.8% year over year to $213.7 million. Adjusted gross margin was 76.1%, which expanded 170 basis points (bps).

Adjusted operating income totaled $111.6 million, up 31.7% year over year. In the quarter under review, adjusted operating margin improved 200 bps to 39.7%.

Meanwhile, operating expenses totaled $102.1 million, up 23.7% year over year.

Guidance

For the fiscal fourth quarter, Veeva expects revenues between $296 million and $299 million. The Zacks Consensus Estimate is pegged at $281.5 million, much below the projected range.

Adjusted EPS is anticipated within 51-52 cents. The Zacks Consensus Estimate is pinned at 53 cents, higher than the guided range.

For fiscal 2020, Veeva has raised its revenue guidance.

Notably, the company projects revenues within $1,088 million and $1,091 million, higher than the earlier projected range of $1,062 million to $1,065 million. The Zacks Consensus Estimate stands at $1.07 billion, below the guided range.

Adjusted EPS is anticipated within $2.16 and $2.17. The Zacks Consensus Estimate is pinned at $2.12, much below the guided range.

Wrapping Up

Veeva Systems ended the fiscal third quarter on a strong note. Core Subscription business segment performed impressively in the quarter. An impressive guidance and a raised view for fiscal 2020 buoy optimism in the stock.

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 has secured a number of deals. The company 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 the foreign currency exchange rate is an added concern.

Earnings of MedTech Majors at a Glance

Some better-ranked companies which posted solid results this earnings season are NuVasive, Inc (NUVA - Free Report) , Thermo Fisher Scientific Inc (TMO - Free Report) and CONMED Corporation (CNMD - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

NuVasive’s third-quarter 2019 adjusted EPS of 59 cents beat the consensus estimate by 9.3%. Revenues of $290.8 million outpaced the consensus mark by 2.4%.

Thermo Fisher delivered third-quarter 2019 adjusted EPS of $2.94, beating the Zacks Consensus Estimate by 2.1%. Revenues of $6.27 billion exceeded the Zacks Consensus Estimate by 1.3%.

CONMED reported third-quarter 2019 adjusted EPS of 62 cents, which beat the Zacks Consensus Estimate of 56 cents by 10.7%. Revenues of $233.6 million surpassed the Zacks Consensus Estimate of $228.3 million by 2.3%.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>