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Investing.com -- Veeva Systems (NYSE:VEEV) surged more than 16% in premarket trading Thursday after posting stronger-than-expected first-quarter results, driven by growth in its Crossix analytics platform and Vault CRM, and raising full-year guidance despite macroeconomic caution.
The company reported first-quarter revenue of $759 million, a 17% year-over-year increase, and 4% ahead of consensus estimates.
Subscription revenue reached $634 million, beating the Street’s estimate of $615 million. Services revenue totaled $124 million, surpassing the consensus of $112 million.
Non-GAAP earnings per share came in at $1.97, well above the $1.75 expected by analysts.
Billings for the quarter were $714 million, exceeding the consensus estimate of $680 million.
The company attributed the beat to strength in Crossix and favorable timing of services revenue, which boosted billings.
Crossix grew 30% year-over-year, reaching an annual run rate of approximately $200 million, now representing nearly 7% of Veeva’s total revenue, up from 5% a few years ago.
In commercial subscriptions, Veeva reported $305 million in revenue, a 17% year-over-year increase.
The company flagged broad-based growth, with particular strength in Crossix, driven by usage. The Vault CRM pipeline also remained strong, with additions split equally between new customers and expansions, including several top 20 pharmaceutical companies.
R&D subscription revenue totaled $329 million, surpassing the consensus estimate of $324 million. Veeva added another top 20 pharmaceutical customer to its Development Cloud, bringing penetration to 19 of the top 20.
Veeva raised its full-year fiscal 2026 revenue guidance by $45 million, though $20 million of the increase came from foreign exchange tailwinds.
The company now expects revenue of $3.32 billion, a 2% increase from prior consensus, and billings of $3.32 billion, reflecting a $40 million FX benefit. Second-quarter billings were guided at $663 million, in line with expectations.
Operating income for fiscal 2026 is projected at $1.36 billion, or a margin of 43.9%, exceeding the consensus estimate of $1.3 billion.
Veeva expects 19% year-over-year growth in R&D subscriptions, 11% growth in commercial subscriptions, and 2% growth in services.
While Veeva’s subscription-based business model offers some protection from broader market volatility, management acknowledged challenges in the macro environment, particularly regarding FDA staffing cuts and pressures on funding for early-stage biotech companies.
However, management has not seen a material impact on the pipeline and expects no significant changes in market conditions for the remainder of the year.
Analysts at TD Cowen raised their fiscal 2026 and fiscal 2027 revenue estimates to $3.10 billion and $3.49 billion, respectively, from $3.05 billion and $3.44 billion.
Adjusted operating income projections were raised to $1.36 billion for FY26 and $1.58 billion for FY27.
TD Cowen also increased its price target to $284 from $261, based on a discounted cash flow analysis.
Despite the strong results, analysts at Morgan Stanley (NYSE:MS) maintained an “underweight” rating, citing competitive risks in the CRM market, which accounts for about 25% of Veeva’s revenue.
Salesforce (NYSE:CRM)’s growing presence in the life sciences CRM space was noted as a key risk. BofA Securities reiterated its “neutral” rating, pointing to the stock’s valuation and increasing competition.