Exchange: XETRA | Sector: Healthcare | Industry: Medical Healthcare Information Services
Q2 2025
Published: Sep 4, 2024
Earnings Highlights
Revenue of $676.18M up 14.6% year-over-year
EPS of $1.04 increased by 51.4% from previous year
Gross margin of 74.8%
Net income of 171.04M
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Veeva Systems Inc (VEE.DE) QQ2 2025 Results — Cloud-Based Life Sciences Software Delivers Robust Revenue Growth, Margin Expansion, and Pristine Balance Sheet
Executive Summary
Veeva Systems reported a solid QQ2 2025 quarter with revenue of USD 676.2 million, marking a year-over-year increase of approximately 14.6% and a quarter-over-quarter rise of about 4.0%. The company posted a gross margin of 74.8% and an operating margin of 24.6%, yielding an operating income of USD 166.5 million. Net income reached USD 171.0 million, translating to a net margin near 25.3% and earnings per diluted share of USD 1.04 (basic USD 1.06). Free cash flow was USD 92.9 million, underscoring the company’s strong cash-generation profile in a capital-light, subscription-backed model. Veeva finished the period with a robust balance sheet: cash and short-term investments of USD 4.89 billion and a small net debt position (net cash) of approximately USD 1.11 billion, highlighting substantial liquidity to fund ongoing product development and strategic M&A or investments in data assets.
The quarterly results reflect sustained demand for Veeva’s cloud-platform suite (Commercial Cloud, Vault, OpenData, and Data Cloud) with meaningful backlog evidenced by deferred revenue of USD 956.4 million, implying revenue visibility into future periods. Margins expanded on favorable mix and scale, while cash flow remained constructive despite investing activity in securities. Absent formal forward-looking guidance in the provided materials, the implied trajectory appears favorable given renewal strength and cross-sell opportunities across the installed base. Investors should monitor platform adoption (Vault/Data Cloud), cadence of renewals, and competitive dynamics in life sciences IT spend as key swing factors for the back-half of 2025 and beyond.
Key Performance Indicators
Revenue
676.18M
QoQ: 3.97% | YoY:14.56%
Gross Profit
505.81M
74.80% margin
QoQ: 6.16% | YoY:20.09%
Operating Income
166.49M
QoQ: 7.29% | YoY:60.01%
Net Income
171.04M
QoQ: 5.80% | YoY:53.22%
EPS
1.06
QoQ: 6.00% | YoY:51.43%
Revenue Trend
Margin Analysis
Key Insights
Net cash provided by operating activities: USD 92.874 million; Free cash flow: USD 92.874 million; Capex: USD 3.052 million.
Investing activities: Purchases of investments USD (614.466) million; Sales of investments USD 503.676 million; Net investing cash flow USD (113.842) million.
Financing activities: USD (11.484) million. Net change in cash: USD (32.447) million; Cash at end of period: USD 1.168 billion; Cash & short-term investments: USD 4.885 billion.
Balance Sheet: Total assets USD 6.331 billion; Total liabilities USD 1.147 billion; Total stockholders’ equity USD 5.184 billion. Cash and cash equivalents USD 1.166 billion; Short-term investments USD 3.719 billion; Deferred revenue current USD 956.381 million; Long-term debt USD 43.912 million; Net debt USD (1.111) billion (i.e., net cash).
Price to sales: ~47.7x; Price to book: ~6.22x; Enterprise value multiple: ~175.33x; Price to FCF: ~359x; Operating cash flow per share: USD 0.57; Free cash flow per share: USD 0.55. Dividend yield: 0% (no dividend).
Cash Flow and Balance Sheet:
- Net cash provided by operating activities: USD 92.874 million; Free cash flow: USD 92.874 million; Capex: USD 3.052 million.
- Investing activities: Purchases of investments USD (614.466) million; Sales of investments USD 503.676 million; Net investing cash flow USD (113.842) million.
- Financing activities: USD (11.484) million. Net change in cash: USD (32.447) million; Cash at end of period: USD 1.168 billion; Cash & short-term investments: USD 4.885 billion.
- Balance Sheet: Total assets USD 6.331 billion; Total liabilities USD 1.147 billion; Total stockholders’ equity USD 5.184 billion. Cash and cash equivalents USD 1.166 billion; Short-term investments USD 3.719 billion; Deferred revenue current USD 956.381 million; Long-term debt USD 43.912 million; Net debt USD (1.111) billion (i.e., net cash).
Valuation and Efficiency:
- Price to sales: ~47.7x; Price to book: ~6.22x; Enterprise value multiple: ~175.33x; Price to FCF: ~359x; Operating cash flow per share: USD 0.57; Free cash flow per share: USD 0.55. Dividend yield: 0% (no dividend).
- Cash conversion metrics indicate a healthy working capital profile with a solid current ratio (~5.01x) and a cash conversion cycle around 38.8 days. Revenue per employee and asset turnover metrics are favorable for a high-margin software provider.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
676.18M
14.56%
3.97%
Gross Profit
505.81M
20.09%
6.16%
Operating Income
166.49M
60.01%
7.29%
Net Income
171.04M
53.22%
5.80%
EPS
1.06
51.43%
6.00%
Key Financial Ratios
currentRatio
5.01
grossProfitMargin
74.8%
operatingProfitMargin
24.6%
netProfitMargin
25.3%
returnOnAssets
2.7%
returnOnEquity
3.3%
debtEquityRatio
0.01
operatingCashFlowPerShare
$0.57
freeCashFlowPerShare
$0.55
priceToBookRatio
6.22
priceEarningsRatio
47.11
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Note: The earnings transcript was not provided in the input. As a result, this section cannot quote management verbatim. The analysis below synthesizes observed financial performance with typical sector commentary and the qualitative signals investors generally expect, pending access to the actual call transcript.
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Forward Guidance
No explicit forward guidance was provided in the supplied materials. Based on the QQ2 2025 results and historical operating characteristics, the following forward-looking themes are prudent to monitor:
- Revenue trajectory: Maintain mid-to-high single-digit to low double-digit growth supported by continued adoption of Vault, data cloud capabilities, and cross-sell from Commercial Cloud to Vault/Data Cloud modules.
- Margin trajectory: With a high gross margin (~75%) and operating leverage from scale, expect stable to modest margin expansion if the mix remains favorable and R&D investments translate into higher customer retention and ARR expansion.
- Backlog and visibility: Deferred revenue of USD 956.4 million suggests strong visibility. Watch renewal rates, duration of multi-year contracts, and the pace of new module uptake to sustain visibility into late 2025 and 2026.
- Investment strategy: Large cash position enables continued investment in product development, data assets, and potential strategic acquisitions or partnerships to accelerate platform integrations.
- Market and competitive dynamics: Monitor healthcare IT budget cycles, regulatory changes, and competing cloud platforms expanding into life sciences; competitive differentiation remains anchored in domain depth, data assets, and a diversified product suite.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
VEE.DE Focus
74.80%
24.60%
3.30%
47.11%
RIO1.DE
32.50%
28.80%
10.50%
4.67%
FVJ.F
40.20%
31.40%
8.08%
5.60%
CPA.DE
60.60%
21.60%
5.94%
27.27%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Veeva remains a high-quality SaaS franchise rooted in the life sciences domain, with durable profitability, a large deferred revenue backlog, and a substantial net cash position. The QQ2 2025 results reinforce a favorable business model characterized by sticky subscriptions, strong gross margins, and prudent capital allocation. However, the current valuation levels imply modest downside protection absent continued growth momentum or significant acceleration in cross-sell across Vault/Data Cloud platforms.
Investment thesis: Favorable long-term confidence in Veeva’s platform strategy and execution, balanced by a wait-and-see stance on multiple expansion given elevated multiples. Approach: a strategic long-term holding with emphasis on monitoring (i) renewal and expansion rates across modules, (ii) progression of international growth, and (iii) any shifts in competitive dynamics and regulatory spending envelopes.
Key monitoring factors for investors:
- Renewal rates and multi-year contract renewals across Commercial Cloud and Vault.
- Adoption of Vault/Data Cloud and cross-sell yields to ARR growth.
- Backlog evolution and deferred revenue as indicators of revenue visibility.
- Competitive positioning and any material shifts in market share in life sciences IT software.
- Currency and macro environment effects on international demand and pricing power.
Key Investment Factors
Growth Potential
Sustained demand for cloud-based life sciences software with opportunity to expand Vault adoption, Data Cloud services, and cross-sell across Veeva’s suite (CRM, OpenData, Network). Large deferred revenue backlog signals revenue visibility and potential acceleration as contracts renew and expand.
Profitability Risk
Valuation richness raises sensitivity to any accelerations in competition or macro softness in pharma/biotech IT spend. Dependence on enterprise software budgets and regulatory-cycle timing could influence renewal velocity. Currency exposure exists for non-USD listings, though the QQ2 data is USD-based; ongoing economic volatility could impact customer capex timing.
Financial Position
Very strong liquidity with USD 4.885B in cash and short-term investments and a modest debt burden (USD 54.1M total debt; net cash position ~USD 1.111B). Deferred revenue provides revenue visibility; minimal dividend activity preserves capital for growth and buybacks (if any).
SWOT Analysis
Strengths
Dominant cloud-based platform for life sciences (CRM, Vault, OpenData, Data Cloud) with strong cross-sell opportunities.
Robust gross margin (~74.8%) and high operating margin (~24.6%), indicating scalable SaaS economics.
Strong liquidity and net cash position (cash and ST investments ≈ USD 4.89B; total debt USD 54.1M).
Deferred revenue backlog signals revenue visibility and durable contract structures.
Global reach across North America, Europe, and APAC with diversified revenue streams.
Weaknesses
High valuation metrics relative to many benchmarks (P/S ~47.7x, P/E ~47.1x), which elevates sensitivity to any growth deceleration.
Concentration in life sciences IT spend; cyclical or regulatory changes could impact new bookings.
Limited dividend yield; income-focused investors may seek higher cash returns.
Opportunities
Expansion of Vault and Data Cloud offerings with deeper data integration and analytics capabilities.
Increased international penetration, especially in Europe and APAC, supported by local partner ecosystems.
Further product innovation and AI-enabled insights within MyVeeva and other data assets to improve time-to-value for customers.
Backlog-driven revenue visibility supports forecasting accuracy and optionality for accelerated growth.
Threats
Regulatory or policy shifts in healthcare IT that alter IT spend trajectories.
Competitive pressure from large cloud incumbents expanding into life sciences (e.g., Salesforce, Oracle, SAP), potentially affecting pace of new deals.
Macro headwinds affecting enterprise IT budgets and longer sales cycles in some regions.
FX volatility for non-USD listings and customers; although USD results are primary, global exposure remains meaningful.