Healthcare software provider Veeva Systems (NASDAQ: VEEV) missed Wall Street’s revenue expectations in Q1 CY2025, but sales rose 16.7% year on year to $759 million. Its non-GAAP EPS of $1.97 per share was 13% above analysts’ consensus estimates.
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Veeva Systems (VEEV) Q1 CY2025 Highlights:
- Revenue: $759 million (16.7% year-on-year growth)
- Adjusted EPS: $1.97 vs analyst estimates of $1.74 (13% beat)
- Adjusted Operating Income: $349.9 million vs analyst estimates of $308 million (46.1% margin, 13.6% beat)
- Revenue Guidance for Q2 CY2025 is $767.5 million at the midpoint, above analyst estimates of $751.5 million
- Adjusted EPS guidance for the full year is $7.63 at the midpoint, beating analyst estimates by 4.5%
- Operating Margin: 30.8%, up from 23.9% in the same quarter last year
- Market Capitalization: $38.21 billion
StockStory’s Take
Veeva Systems' first quarter results reflected solid demand for its core life sciences software, with management attributing momentum to ongoing Vault CRM adoption and strong Crossix analytics growth. CEO Peter Gassner highlighted over 80 customers are now live on Vault CRM, up from a handful a year ago, describing it as “better than Veeva CRM” due to expanded functionality and AI integration. The Crossix business benefited from customers’ increasing focus on maximizing digital marketing effectiveness, with Gassner noting its rapid ROI. Management also pointed to broad-based performance across commercial and R&D segments, supported by stable renewals and expanding customer relationships.
Looking ahead, Veeva’s leadership expects continued growth as the company invests in AI-driven product enhancements and expands into new market segments, including a forthcoming horizontal CRM offering outside of life sciences. Gassner emphasized the company’s commitment to deeply embedding AI within its core applications, predicting, “Veeva can help increase life sciences efficiency by 15% or so with deep AI.” Management also highlighted plans to have 200 customers live on Vault CRM within a year and expressed optimism about the initial customer interest in its new AI agents and data cloud products. However, executives acknowledged persistent macroeconomic uncertainty and noted that while the current pipeline remains stable, caution is warranted for smaller biotech clients that may face funding challenges if broader conditions deteriorate.
Key Insights from Management’s Remarks
Management attributed the quarter’s performance to expanded Vault CRM adoption, strong Crossix analytics growth, and early traction with AI-driven product development.
- Vault CRM adoption accelerates: The number of customers live on Vault CRM grew to over 80, driven both by migrations from legacy Veeva CRM and new client wins. Management cited innovation, integration of sales and marketing functions, and the roadmap for embedded AI agents as key differentiators driving customer decisions.
- Crossix analytics powers commercial gains: Crossix, Veeva’s analytics tool for measuring digital marketing performance, saw robust demand as clients sought to optimize digital spend. The value of comprehensive Crossix deals has doubled over three years, according to Gassner, due to expanded offerings and rapid implementation timelines.
- AI initiatives gain momentum: Veeva AI, a suite of embedded artificial intelligence tools, is being developed to automate core industry processes such as medical, legal, and safety workflows. Management described customer feedback as highly positive and expects to introduce AI agents into products by year-end.
- Horizontal CRM market entry: The company is preparing to launch a CRM product targeted beyond the life sciences sector, marking a significant strategic expansion. The initial focus will be on large enterprises, with a distinct team and operating model, and management aims to secure first customers by the end of the year.
- Stable performance amid macro uncertainty: While acknowledging increased economic and geopolitical uncertainty, management reported no material impact on current results or pipeline. The subscription-based revenue model and mission-critical nature of Veeva’s solutions provide insulation, though small biotech clients could be more exposed to funding headwinds.
Drivers of Future Performance
Veeva’s guidance for the next quarter and full year is driven by continued Vault CRM migration, growing AI adoption, and an expanding product portfolio, though management remains cautious given macroeconomic uncertainty.
- Vault CRM and AI adoption: Management expects ongoing Vault CRM migrations and the rollout of AI agents to drive customer wins and expand existing relationships. The ability to integrate sales, marketing, and service data is viewed as a long-term differentiator.
- Growth in Crossix and data cloud: Crossix remains a key growth engine, with management projecting sustained double-digit expansion as clients prioritize digital marketing measurement. Early success in the data cloud business is expected to supplement this momentum.
- Macro and funding risks: Leadership warned that persistent uncertainty, particularly for smaller biotech customers, could delay projects or impact funding. However, Veeva’s high proportion of long-term subscription contracts and focus on mission-critical applications is expected to provide resilience in most scenarios.
Catalysts in Upcoming Quarters
In the coming quarters, StockStory analysts will monitor (1) the pace of Vault CRM migrations and new customer additions, (2) tangible revenue contributions and customer adoption of Veeva AI and related agents, and (3) the initial impact of the horizontal CRM launch beyond life sciences. The progress of Crossix and data cloud businesses will also be closely watched as indicators of broader market momentum.
Veeva Systems currently trades at a forward price-to-sales ratio of 12.5×. In the wake of earnings, is it a buy or sell? Find out in our full research report (it’s free).
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