Summary
Veeva Systems reported total revenues of $676.2 million for the fiscal 2025 second quarter ended July 31, 2024, up 14.6% from $590.2 million in the prior-year quarter. Subscription services revenue of $561.3 million, up 19% year over year, did the heavy lifting, while professional services and other revenue slipped on lower implementation and deployment work. Subscription services made up 83% of total revenues in the quarter, against 80% a year ago. The six-month mix shows where growth is coming from: subscription revenue rose $160 million from R&D Solutions and $50 million from Commercial Solutions, the 10-Q states.
Profitability improved faster than the top line. Gross profit rose 20.1% to $505.8 million, and gross margin of 74.8% was up 3.4 percentage points from 71.4%. Operating income climbed 60.0% to $166.5 million, lifting operating margin to 24.6% from 17.6%, a gain of 7.0 percentage points. Net income of $171.0 million was up 53.2%, and diluted earnings per share of $1.04 rose 52.9% from $0.68. Stock-based compensation of $108.4 million remains the large bridge to non-GAAP results, where operating income of $279.8 million was up 32% and diluted EPS of $1.62 came in well above the GAAP figure.
The first half tells the same story. Total revenues of $1.33 billion were up 18.8% from $1.12 billion a year earlier. Six-month operating income of $321.7 million was up 94.3%, net income of $332.7 million rose 36.8%, and diluted EPS of $2.02 rose 35.6% from $1.49.
Cash generation is the soft spot. Operating cash flow for the quarter was $92.9 million, down 65.0% from $265.0 million a year earlier, which the 10-Q attributes mainly to the timing of cash paid for income taxes. The first quarter is seasonally the strongest for collections. Six-month operating cash flow of $856.4 million was up 11.1% from $771.0 million, and management expects operating cash flow to be substantially lower in the remaining quarters of the fiscal year. Deferred revenue, current portion, stood at $956.4 million, up 14.3% from $836.5 million a year ago. Cash, cash equivalents and short-term investments totaled $4.9 billion at July 31, 2024, with $67 million of cash and cash equivalents held outside the United States.
Product news leaned toward clinical and CRM. Veeva released Vault CRM Service Center and added 14 new Vault CRM customers during the quarter. Site Connect picked up its seventh top 20 biopharma win, and seven top 20 biopharmas selected Veeva Clinical Database. One top 20 biopharma with a single prior Development Cloud product standardized on the full Vault RIM Suite and Vault CTMS. Veeva also added 12 Vault Basics customers after the April release.
Guidance for the next quarter and the full year frames the rest of fiscal 2025. For the fiscal third quarter ending October 31, 2024, Veeva guides non-GAAP operating income of $273 million to $275 million and non-GAAP diluted EPS of $1.57 to $1.58. For the full fiscal year ending January 31, 2025, the outlook is non-GAAP operating income of about $1,080 million and non-GAAP diluted EPS of approximately $6.22. Revenue guidance for both periods was also provided in the release. No GAAP targets are given because the company says it cannot reasonably predict items such as stock-based compensation.
Risks are a familiar mix with a couple of specific tax items. The company flags issues with product performance, availability, security and privacy, competitive factors, customer decisions and priorities, events that hit the life sciences industry, and general macroeconomic and geopolitical conditions including inflationary pressures, interest rates, currency exchange fluctuations, the Russia-Ukraine war and the Israel-Hamas conflict. It also cites hiring and retention of employees. The effective tax rate rose to 24.0% for the quarter from 21.9%, and capitalization requirements for research and development expenditures under the Tax Cuts and Jobs Act of 2017 are expected to reduce operating cash flow in the fiscal year ending January 31, 2025.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2025 | Q1 FY2025 | QoQ | Q2 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $676.2M | $650.3M | +4.0% | $590.2M | +14.6% |
| Gross profit | $505.8M | $476.5M | +6.2% | $421.2M | +20.1% |
| Gross margin | 74.8% | 73.3% | +1.5 pp | 71.4% | +3.4 pp |
| Research & development | $176.4M | $162.7M | +8.4% | $157.2M | +12.2% |
| Sales & marketing | $101.5M | $97.3M | +4.3% | $97.0M | +4.7% |
| General & administrative | $61.4M | $61.3M | +0.1% | $62.9M | -2.5% |
| Total operating expenses | $339.3M | $321.3M | +5.6% | $317.2M | +7.0% |
| Operating income (loss) | $166.5M | $155.2M | +7.3% | $104.0M | +60.0% |
| Operating margin | 24.6% | 23.9% | +0.8 pp | 17.6% | +7.0 pp |
| Net income (loss) | $171.0M | $161.7M | +5.8% | $111.6M | +53.2% |
| Net margin | 25.3% | 24.9% | +0.4 pp | 18.9% | +6.4 pp |
| Diluted EPS | $1.04 | $0.98 | +$0.06 | $0.68 | +$0.36 |
| Customers | 1,205 | 1,205 | ±0.0% | 993 | +21.3% |
Risks
Salesforce and IQVIA announced an expanded CRM partnership in April 2024 under which IQVIA will license its CRM software to Salesforce and both will jointly market a life sciences-specific CRM that competes with Veeva. Salesforce is no longer prohibited from promoting third-party products competitive to Veeva CRM or developing a competing CRM.
Veeva plans to migrate Veeva CRM customers from the Salesforce platform to Vault CRM on its own Veeva Vault platform, and does not intend to renew the Salesforce agreement after September 1, 2025. The migration may cause customer disruptions, loss of customers to competitors, and Vault CRM may not be ready on the intended timeline.
IQVIA will not consent to customers uploading its healthcare professional or healthcare organization data to Veeva Network, has restricted use of its data with Veeva Nitro and certain other applications, and has stated it will deny customer requests for new IQVIA data types in Veeva applications. These restrictions have negatively affected sales and adoption and may continue to harm Veeva's business.
Veeva's sales cycle for new customers can span 12 months or longer and is difficult to predict for newer applications or markets. The filing states Veeva has recently experienced increased scrutiny for certain potential projects, particularly professional services offerings, which may continue.
Top 10 customers accounted for 28% of total revenues in the fiscal year ended January 31, 2024. Loss of key customers, failure to renew or expand user subscriptions, or acquisitions involving customers could slow revenue growth or cause revenue to decline.
Since 2022 there has been a reduction in funding for early-stage life sciences companies, which has resulted in reduced sales and adversely affected financial results and may continue. High interest rates may also make debt and other financing more difficult for customers.
In China, certain Veeva CRM customers had requests to transfer personal data outside China denied by the Cyberspace Administration of China in 2023. Customers may need a CRM solution that does not transfer data outside China or may choose another provider; China is approximately 2% of total revenue.
The Washington My Health My Data Act became effective March 21, 2024 and restricts how businesses collect, use, and disclose consumer health data. Veeva modified its Crossix audience segments in response, which may reduce demand for Crossix products.
Competitors may build more capable products through new or better use of evolving AI technologies. New or evolving regulations on data in AI and machine learning, such as the EU AI Act, may require product or operational changes and may limit adoption.
Veeva has been defending trade secret misappropriation claims from IQVIA since January 2017 and may face future IP infringement or misappropriation claims. Such litigation could require substantial damages, ongoing royalties, prevent offering services, or require unfavorable terms.
Total revenue growth declined to 10% in FY2024 from 16% in FY2023 and 26% in FY2022, and subscription services revenue growth similarly declined. Although Veeva expects growth to accelerate in FY2025 partly due to a prior-year reduction, longer term revenue growth rates may fluctuate and decline as costs increase.
SaaS KPIs
All quarters →Non-GAAP Operating Margin
Non-GAAP Operating Income
Non-GAAP Gross Margin
Non-GAAP subscription services gross margin
Summary, forecast, risks and KPIs are extracted from VEEVA SYSTEMS INC's SEC filings for Q2 FY2025 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 6, 2026.