Summary
Veeva Systems reported FY2022 third quarter revenue of $476.1 million, up 26.1% from the prior-year quarter. Gross profit was $346.5 million, up 26.2%, and gross margin was 72.8%, flat versus the prior-year quarter. Operating income was $132.7 million, up 31%, and operating margin was 27.9%, up 1.0 percentage point. Net income was $105.9 million, up 9.2%, and diluted EPS was $0.65, up 8.3%. On a non-GAAP basis, operating income was $199.4 million, compared to $155.5 million one year ago. Non-GAAP net income was $158.2 million, compared to $125.6 million one year ago. Non-GAAP diluted EPS was $0.97, compared to $0.78 one year ago.
Year to date, revenue was $1.37 billion, up 27.8%. Gross profit was $997.5 million, up 29.0%. Operating income was $385.8 million, up 38.3%. Net income was $330.3 million, up 19.2%. Diluted EPS was $2.03, up 17.3%. Operating cash flow was $710.41 million, up 47.1% year to date. For the quarter, operating cash flow was $112.96 million, up 18.4%. Deferred revenue was $417.76 million, up 26.1% from the prior-year quarter. The geographic mix of subscription services revenues was 57% from North America and 27% from Europe for the quarter, unchanged from the prior-year quarter. Veeva changed its product area reporting to Commercial Solutions and R&D Solutions during the quarter. The subscription services revenue retention rate was 124% for the fiscal year ended January 31, 2021.
Veeva provided revenue guidance for the fiscal fourth quarter ending January 31, 2022, for the full fiscal year ending January 31, 2022, and for the full fiscal year ending January 31, 2023. For the fiscal fourth quarter ending January 31, 2022, the company guided non-GAAP operating income of about $181 million and non-GAAP fully diluted net income per share of approximately $0.88. For the full fiscal year ending January 31, 2022, Veeva guided non-GAAP operating income of about $753 million and non-GAAP fully diluted net income per share of approximately $3.69. For the full fiscal year ending January 31, 2023, the company guided non-GAAP operating margin of roughly 38%. Veeva does not provide GAAP targets for these non-GAAP measures because items such as stock-based compensation cannot be reasonably predicted. The company said it is investing aggressively across people and products to support strong growth in the years ahead.
Operational highlights included a new self-service portal for Veeva Data Cloud and new early adopters for its patient data offering in the quarter. Vault RIM had its first enterprise customer live with all four Vault RIM Suite applications, plus two top 20 wins, one for Vault Registrations and one for Vault Publishing. Commercial Cloud saw seven 7-figure deals across Veeva CRM, Veeva Crossix, and Veeva Link. Veeva CRM added 15 new SMB wins, enterprise expansions, and two major field forces in Asia standardizing on the product. The company said it saw share gains through new wins and as existing customers expanded within Veeva Commercial Cloud.
Management expects life sciences companies to reduce sales representatives by roughly 10% over the next one to two years, which could hurt demand for Veeva CRM and other Commercial Solutions. The company also warns that its future revenue growth rate will decline, competition and pricing pressures may increase, and it could lose one or more large customers. It faces risks from COVID-19, system unavailability, failure to sustain profitability as costs increase, legal proceedings, and its conversion to a Delaware public benefit corporation. The company also faces risks from breaches in security measures or unauthorized access to customer data, and from the rate of adoption of newer solutions. Operating expenses are expected to rise in absolute dollars, and research and development is expected to increase as a percentage of revenue, which could pressure operating margin. The effective tax rate increased primarily due to a reduction in excess tax benefits related to equity compensation and an increase in valuation allowance within certain jurisdictions. Professional services are expected to decline as a proportion of total revenues over time. The company expects its headcount to increase as a result of investments in growth. It also expects cash flows from operating activities to be substantially less in future quarterly periods during this fiscal year. Veeva's results are subject to fluctuations due to changes in foreign currency exchange rates, particularly the Euro, British Pound Sterling, Japanese Yen, Chinese Yuan, and Canadian Dollar. The company may also experience requests from customers for lengthened payment terms or less favorable billing terms.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2022 | Q2 FY2022 | QoQ | Q3 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $476.1M | $455.6M | +4.5% | $377.5M | +26.1% |
| Gross profit | $346.5M | $333.5M | +3.9% | $274.5M | +26.2% |
| Gross margin | 72.8% | 73.2% | -0.4 pp | 72.7% | +0.1 pp |
| Research & development | $98.6M | $94.9M | +3.9% | $80.0M | +23.3% |
| Sales & marketing | $72.4M | $71.8M | +0.9% | $58.0M | +24.9% |
| General & administrative | $42.8M | $42.2M | +1.4% | $35.2M | +21.4% |
| Total operating expenses | $213.8M | $208.9M | +2.4% | $173.2M | +23.5% |
| Operating income (loss) | $132.7M | $124.6M | +6.5% | $101.3M | +31.0% |
| Operating margin | 27.9% | 27.4% | +0.5 pp | 26.8% | +1.0 pp |
| Net income (loss) | $105.9M | $108.9M | -2.7% | $97.0M | +9.2% |
| Net margin | 22.2% | 23.9% | -1.7 pp | 25.7% | -3.4 pp |
| Diluted EPS | $0.65 | $0.67 | -$0.02 | $0.60 | +$0.05 |
| Customers | 719 | 719 | ±0.0% | 625 | +15.0% |
Risks
Veeva expects longer-term total revenue and subscription services revenue growth rates to decline, and MD&A states operating expenses will increase in absolute dollars and as a percentage of revenue, including a 5% salary increase for most employees effective September 1, 2021. Current quarter revenue was up 26.1% vs the prior-year quarter and year-to-date revenue was up 27.8%, but past growth is not indicative of future performance.
Nearly all revenues are generated from life sciences customers, and Veeva expects life sciences companies to reduce sales representatives by roughly 10% over the next one to two years, which could negatively impact Veeva CRM and certain other Commercial Solutions. Life sciences consolidation and regulatory changes could also reduce demand.
IQVIA will not consent to customers uploading its healthcare professional or healthcare organization data to Veeva Network Customer Master and has restricted use of its data in Veeva Nitro and Veeva Andi, which has negatively affected sales and customer adoption. If third-party data providers do not allow uploads, demand for Veeva solutions may decrease.
Veeva CRM and portions of the multichannel CRM applications are built on salesforce.com's Salesforce Platform, and the agreement expires on September 1, 2025, with salesforce.com able to terminate in certain circumstances. Termination would prevent customer access to Veeva CRM and certain other applications, and the agreement limits sales to drug makers in the pharmaceutical and biotechnology industries.
Veeva faces intense competition from IQVIA, Dassault Systemes through Medidata, OpenText, Oracle, and Microsoft, and it is in active litigation with IQVIA and Medidata for alleged trade secret misappropriation. Competitive pressure and litigation could increase costs, reduce sales, and harm margins.
Top 10 customers accounted for 36%, 36%, and 39% of total revenues in fiscal years ended January 31, 2021, 2020, and 2019, respectively. Loss, non-renewal, or reduced subscriptions from key customers could slow revenue growth or cause revenues to decline.
Growth depends on newer solutions such as Veeva Data Cloud, MyVeeva for Patients, and Veeva Engage Connect, but Veeva has limited experience selling them. If these or future solutions do not gain market acceptance in a timely manner, revenue growth and operating results will be adversely affected.
Competition for skilled employees is intense, and Veeva increased salaries for the majority of employees by 5% effective September 1, 2021, which increases expenses. Declines in the perceived value of equity awards could also hurt recruiting, retention, and motivation of employees.
Increasingly complex data protection and privacy regulations, including GDPR, CCPA, CPRA, China's PIPL effective November 2021, and data localization requirements, may require changes to Veeva's data practices and expose it to significant fines, penalties, and customer claims.
The effective tax rate increased to 20.7% for the three months ended October 31, 2021 from 7.4% in the prior-year period, and to 15.9% for the nine months ended October 31, 2021 from 4.0%, due to reduced excess tax benefits from equity compensation and increased valuation allowances. The OECD global minimum 15% corporate tax agreement starting in 2023 could further increase Veeva's effective tax rate.
As a Delaware public benefit corporation and the first publicly traded company to convert to a PBC, Veeva's directors must balance stockholder financial interests, stakeholder interests, and its public benefit purpose. This may lead to decisions that do not maximize short-term stockholder value and creates limited legal precedent and potential litigation risk.
The dual-class structure concentrates voting control with CEO Peter Gassner, who holds approximately 45.8% of voting power, and Class B holders collectively hold approximately 51.5% until October 15, 2023. This limits or precludes investor ability to influence corporate matters and may depress the market value of Class A common stock.
SaaS KPIs
All quarters →Total Customers
Commercial Solutions customers
R&D Solutions customers
Summary, forecast, risks and KPIs are extracted from VEEVA SYSTEMS INC's SEC filings for Q3 FY2022 (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.