Healthcare software provider Veeva Systems (NASDAQ:VEEV) reported Q4 CY2024 results exceeding the market’s revenue expectations, with sales up 14.3% year on year to $720.9 million. The company expects next quarter’s revenue to be around $727.5 million, close to analysts’ estimates. Its non-GAAP profit of $1.74 per share was 10.1% above analysts’ consensus estimates.
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Veeva Systems (VEEV) Q4 CY2024 Highlights:
- Revenue: $720.9 million vs analyst estimates of $699.1 million (14.3% year-on-year growth, 3.1% beat)
- Adjusted EPS: $1.74 vs analyst estimates of $1.58 (10.1% beat)
- Adjusted Operating Income: $307.7 million vs analyst estimates of $277.9 million (42.7% margin, 10.7% beat)
- Management’s revenue guidance for the upcoming financial year 2026 is $3.05 billion at the midpoint, in line with analyst expectations and implying 11% growth (vs 16.5% in FY2025)
- Management’s operating profit (non-GAAP) guidance for the upcoming financial year 2026 is $1.30 billion at the midpoint, above analyst expectations
- Operating Margin: 26.1%, up from 21.4% in the same quarter last year
- Free Cash Flow Margin: 9%, down from 22.9% in the previous quarter
- Market Capitalization: $35.47 billion
"It was an outstanding quarter and year of execution and innovation in software, data, and business consulting," said CEO Peter Gassner.
Company Overview
Built on top of Salesforce as one of the first vertical-focused cloud platforms, Veeva (NYSE:VEEV) provides data and customer relationship management (CRM) software for organizations in the life sciences industry.
Healthcare And Life Sciences Software
The coronavirus pandemic has underscored the importance of high-quality health infrastructure in times of crisis. Coupled with intense competition between drugmakers and the growing volume of data in the health care sector, demand for data management solutions in the healthcare space is expected to remain strong in the years ahead.
Sales Growth
A company’s long-term performance is an indicator of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last three years, Veeva Systems grew its sales at a 14.1% annual rate. Although this growth is acceptable on an absolute basis, it fell short of our standards for the software sector, which enjoys a number of secular tailwinds. Luckily, there are other things to like about Veeva Systems.
This quarter, Veeva Systems reported year-on-year revenue growth of 14.3%, and its $720.9 million of revenue exceeded Wall Street’s estimates by 3.1%. Company management is currently guiding for a 11.9% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 11.4% over the next 12 months, a slight deceleration versus the last three years. Despite the slowdown, this projection is above average for the sector and suggests the market is baking in some success for its newer products and services.
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Customer Acquisition Efficiency
The customer acquisition cost (CAC) payback period measures the months a company needs to recoup the money spent on acquiring a new customer. This metric helps assess how quickly a business can break even on its sales and marketing investments.
Veeva Systems is extremely efficient at acquiring new customers, and its CAC payback period checked in at 17.9 months this quarter. The company’s rapid recovery of its customer acquisition costs means it can attempt to spur growth by increasing its sales and marketing investments. 
Key Takeaways from Veeva Systems’s Q4 Results
It was encouraging to see Veeva Systems beat analysts’ revenue and adjusted operating profit expectations this quarter. Looking ahead, while full-year revenue guidance was just in line with Wall Street’s estimates, full-year operating profit guidance was above. Overall, this was a solid quarter. The stock traded up 7.8% to $237 immediately following the results.
Is Veeva Systems an attractive investment opportunity right now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free.
