Veeva Systems Inc (NYSE: VEEV) stock rose over 3.6% on May 29th, 2020 (as of 10:22 am GMT-4; Source: Google finance) after the company posted better than expected results for the first quarter of FY 21. The company generated strong cash flow quarter with cash from operations coming in at $282 million, including $20 million in excess tax benefit related to equity compensation.
VEEV in the first quarter of FY 21 has reported the adjusted earnings per share of 66 cents, beating the analysts’ estimates for the adjusted earnings per share of 58 cents, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 38 percent to $337.11 million in the first quarter of FY 21, beating the analysts’ estimates for revenue by 3.82%. Subscription revenue rose by 36% year-over-year and the company posted the non-GAAP operating margin of 39%. The subscription revenue grew due to strong bookings in both Commercial Cloud and Vault. Services had a record quarter mainly due to Vault demand with good contribution from Veeva CRM Engage Meeting projects. This was partially offset by cancellations related to in-person speaker events, which had affected the recently acquired Physicians World business.
The company has slightly decreased the top end of the full-year total revenue guidance by $10 million to $1,395 million, and raising the full-year top end operating income guidance by $10 million to $510 million. This is due to changes on the back of COVID-19 in certain segments of the business, mainly in the Physicians World and the Crossix areas where in-person events have largely stopped and advertising is down. This also reflects lower costs related to travel. The company intends to achieve the $3 billion revenue target in 2025. For the full year, the company expects the total revenue to be in the range of $1,380 million to $1,395 million. Subscription revenue is projected to be about $1,135 million for the full year. Commercial Cloud is expected to contribute about $580 million in subscription revenue. This includes $76 million to $78 million from Crossix. Vault subscription revenue is now projected to be about $555 million, with the reduction of $5 million driven by the customer segments. Professional services is expected to be in the range of $245 million to $260 million. For the full year, the company expects non-GAAP operating income to be between $500 million and $510 million and a non-GAAP operating margin of over 36%.
Further, Q2 calculated billings is expected to be about $280 million with Q4 billings expected to make up more than 40% of this year’s totals. In Q2, the company expects total revenue to be in the range of $339 million to $341 million and professional services of $63 million to $64 million.