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Class A shares of Veeva Systems (NYSE:VEEV) on Wednesday fell as much as 7% in extended trading, after the company provided a sales outlook for the current quarter that came in below estimates, nearly a month after trimming its full year revenue guidance.
VEEV stock was last down 3.3% to $172.55 after hours.
Veeva (VEEV) reported FQ3 2024 adjusted earnings per share of $1.34, beating consensus by 5 cents. Revenue rose nearly 12% Y/Y to $616.51M, coming in-line with expectations.
Pleasanton, Calif.-based VEEV provides cloud-based software solutions to primarily life sciences companies, along with firms in other industries such as consumer packaged goods, food and beverage and specialty chemicals.
“Normalized billings were $429M, up 15% year over year. The underperformance compared to our guidance was primarily due to the negative impact of macroeconomic factors on our professional services business … and, to a lesser extent, a smaller-than expected FX tailwind,” Veeva (VEEV) finance chief Brent Bowman said in prepared remarks.
Executives at VEEV’s investor day call last month said that macroeconomic conditions had caused clients to tighten spending, impacting services revenue.
“As I shared at our investor day in early November, the macro environment remains challenging as the industry continues to navigate inflation, higher interest rates, global conflicts, and the Inflation Reduction Act. These headwinds are having an impact on our services revenue, as companies look for cost reductions by delaying services engagements or using more internal resources,” VEEV top boss Peter Gassner said.
Mainly due to a lower-than-expected services outlook, Veeva (VEEV) had cut its total full year revenue guidance to $2.353B-$2.355B. Its prior revenue outlook was $2.365B-$2.37B. The consensus estimate is $2.36B.
On Wednesday, the company provided FQ4 revenue guidance of $620M to $622M, versus a consensus estimate of $622.48M.
“For Q4, we expect normalized billings of about $1.040B. This includes the impact of the revised services outlook, a lower-than-expected proportion of anticipated new business having annual billing terms, and deal timing,” Veeva (VEEV) CFO Bowman said.