According to a recent report, the Global Healthcare Cloud Computing market is estimated to grow to $15.8 billion by the year 2025 from $4.5 billion in 2016. Pleasanton, California-based Veeva (NYSE: VEEV), a leading player in the industry, recently announced stellar quarterly results.
Veeva was initially founded as a cloud-based customer relationship management and regulated content management solutions vendor for the biotechnology industry. While remaining focused on the industry, Veeva has expanded to help health care providers with access to payroll management, expense management, and customer relationship management services over the cloud. For its recently reported fourth quarter results, Veeva saw revenues grow 23% over the year to $184.9 million, ahead of the Street’s forecast of $180.1 million. Adjusted EPS of $0.23 was also ahead of the market’s forecast of $0.21 for the quarter.
By segment, revenues from subscription services grew 26% to $150.9 million. Revenues from professional services grew 11% over the year to $34.03 million.
Veeva ended the year with revenues of $685.57 million, compared with $544.04 million reported a year ago. Net income for the year nearly doubled over the year to $1.01.
For the current quarter, Veeva forecast revenues of $188-$189 million compared with the market’s forecast of $187 million. It expects to earn $0.30-$0.31 per share, which is significantly ahead of the Street’s forecast of $0.23 per share for the quarter. Veeva expects to end the current year with revenues of $815-$820 million with an EPS of $1.30-$1.33. The market was looking for revenues of $807 million and an adjusted profit of $1.01 per share.
Veeva’s Product Expansion
During the quarter, Veeva continued to upgrade its product offering. It recently announced the release of a new digital asset management capability, Veeva Vault PromoMats. The enhancement simplifies the process of creating portals and organizing and showcasing content within these portals for brand managers. With Veeva Vault PromoMats Brand Portal, marketing teams will now be able to share digital assets and campaigns in one place to help employees, affiliates, and agencies easily find and leverage existing content. This is its first application that integrates digital asset management with medical, legal, regulatory review capabilities in a single solution for the life sciences industry. The solution helps eliminate the need for duplication of content that leads to wastage of time and money.
Veeva also announced its plans to partner with interactive response technology (IRT) vendors to provide advanced randomization and trial supply management capabilities with Veeva Vault EDC. Veeva is integrating a modern Electronic Data Capture (EDC) cloud solution with randomization and trial supply software to help the life sciences industry improve data quality and accelerate execution for managing complex clinical trials. Its open partnership approach will allow customers to use Vault EDC with the IRT solutions that best meets their needs. With the integration, customers will be able to assign patient treatments and supply investigator sites, while ensuring that accurate data flows seamlessly with Vault EDC to streamline trial design and execution.
Questions for Veeva’s Board
Veeva has an unprecedented opportunity within SaaS in the Life Sciences domain. The Healthcare IT field has been rife with startup activity and numerous entrepreneurs are currently developing various kinds of niche SaaS applications that could be great acquisitions for Veeva. I am looking forward to sitting down with Veeva’s CEO Peter Gassner this month to understand how he is thinking about the innovation framework (both internal and external innovation) to expand the company’s product portfolio. Its suite of significant customers is an incredible asset that Veeva has built already. What is the product strategy and innovation strategy that feeds additional compelling products that Veeva can upsell into this tremendous customer base?
The market is pleased with Veeva’s performance. Its stock is trading at $62.07 with a market capitalization of $8.8 billion. It has recovered from the year low of $41.30 it had fallen to in February last year. It is still short of the year high of $68.07 it had touched in May last year.