Veeva Earnings: Strong Quarter Fueled by Commercial Excellence Ignites Investor Appetite

Key Morningstar Metrics for Veeva Systems

• Fair Value Estimate: $282
• Morningstar Rating: ★★★★
• Morningstar Economic Moat Rating: Wide
• Morningstar Uncertainty Rating: High

What We Thought of Veeva Systems’ Earnings

Wide-moat Veeva VEEV started the year on a solid note with results better than our expectations. Total sales of $760 million were up 16.7% year over year, higher than our $730 million estimate, and adjusted earnings per share of $1.97 was up 31.3%, above our $1.75 estimate. This quarter’s performance suggests that the 2025 revenue target of $3 billion, set in 2019, will be met. It also reinforces our conviction that the 2030 goal of $6 billion in revenue, established in November 2024, is well within reach. Against the backdrop of strong results, full-year revenue and EPS guidance was raised 2% and 4%, respectively. After raising our near-term assumptions, we are increasing our fair value estimate to $282 per share from $275.

Commercial solutions delivered a robust performance and grew by 16.9% against last year. This is a mature business mainly comprised of CRM and add-ons, which has seen a growth slowdown in recent years, but Crossix (about 15% of the business) was highlighted as a main growth driver during the quarter. We see this is a testament to Veeva’s ability to turn a small product into a fast-growing asset by both customer penetration and new customer wins. Research and development solutions were up over 20% as Veeva had a number of top 20 pharma wins across the platform, namely in clinical operations and regulatory. We think the momentum in business is showing nothing but green lights and continue to see the business as the main growth driver over the long term.

On tariffs, we don’t anticipate any material impact on Veeva’s near-term financials. Veeva’s subscription services (85% of sales and 90% of operating income) are set up either on an annual or long-term basis, so they are largely immune to volatility. Remaining business comes from professional services which we think could be a bit more exposed to macro uncertainty but the strong first-quarter numbers don’t signal any weakness for the year; in fact, guidance for professional services was raised slightly.