Veeva Systems (VEEV) Q2 2025 earnings summary

Executive summary

• Q2 FY2025 revenue reached $676.2 million, up 15% year-over-year, with subscription services revenue at $561.3 million and services revenue at $114.9 million.

• Net income grew 53% year-over-year to $171 million; non-GAAP operating income was $279.8 million with a margin of 41.4%.

• Major product advances included the launch of Vault CRM Service Center, Site Connect, and new clinical platform capabilities, with 14 new Vault CRM customers and 12 Vault Basics customers added.

• Strategic customer wins included top 20 biopharma standardizing on Vault RIM Suite and Vault CTMS, and strong adoption in R&D Solutions.

• The company maintains a strong liquidity position with $4.9 billion in cash, cash equivalents, and short-term investments as of July 31, 2024.

Financial highlights

• Subscription services revenue grew 19% year-over-year to $561.3 million; professional services revenue declined 4% to $114.9 million.

• Non-GAAP total gross margin for Q2 FY2025 was 77.2%; subscription services gross margin was 86.5%.

• GAAP operating margin was 24.6%; non-GAAP operating margin was 41.4%.

• Net cash provided by operating activities for the six months ended July 31, 2024, was $856.4 million.

• Diluted EPS was $1.04 (GAAP) and $1.62 (non-GAAP) for the quarter.

Outlook and guidance

• Q3 FY2025 revenue guidance is $682–$685 million, with non-GAAP operating income of $273–$275 million and non-GAAP EPS of $1.57–$1.58.

• FY2025 revenue guidance is $2,704–$2,710 million, with non-GAAP operating income of ~$1,080 million and non-GAAP EPS of ~$6.22.

• FY2025 normalized billings are guided at ~$2,880 million, up ~11% year-over-year, including a $15 million tailwind from customer billing term changes.

• Management expects higher costs in subscription services, R&D, and sales and marketing due to increased compensation and investment.

• Cash flows from operating activities are expected to be lower in future quarters due to seasonality and tax law changes.