Cloud-based life sciences solution provider Veeva (NYSE: VEEV) recently announced its second quarter results that outpaced market expectations. The company’s robust performance has helped its stock nearly double since the start of the year.
Veeva’s revenues grew 25% to $209.6 million, ahead of the Street’s forecast of $203.7 million. Adjusted EPS of $0.39 was also ahead of the market’s forecast of $0.34 for the quarter.
By segment, revenues from subscription services grew 25% to $169.6 million. Subscription gross margin improved 220 bps to 83.6%. It continued to see strong momentum in bookings across all areas of Vault, which accounted for 42% of subscription revenues compared with 36% a year ago. Revenues from professional services grew 24% over the year to $40 million.
For the current quarter, Veeva forecast revenues of $215-$216 million with an adjusted EPS of $0.38. Veeva expects to end the current year with revenues of $840-$843 million with an EPS of $1.47-$1.48. The market was looking for revenues of $210.8 million for the quarter with an adjusted EPS of $0.35. For the year, the Street had forecast revenues of $829.4 million with an EPS of $1.37.
Veeva’s Product Expansion
Veeva continued to see strong adoption of its new product offerings. During the quarter, it signed its first early adopter customer for Veeva Nitro. Veeva Nitro is a next-generation commercial data warehouse built specifically for the life sciences industry. It also added its first top 20 bio pharmaceutical client in Europe for Veeva Vault Quality Docs.
Veeva continued to expand its market with the release of several new offerings. Last month, it released a major user interface refresh of its CRM product Sunrise. Sunrise is an adaptive, multi-device design that provides the users with a consistent experience across devices. It is also improving its adoption of the Commercial Cloud usage for CRM customers by adding additional products such as Veeva Events Management, Veeva Align, and Veeva OpenData.
Veeva Events Management is a single solution to plan and execute all events across the enterprise that gives users seamless control and complete visibility of all speakers, attendees, activities, and spend. Veeva Align gives commercial teams direct control of the business process by reducing the administrative burden of alignments and accurately allocating resources to support customer engagement and enhancing the rep experience. Veeva OpenData provides users with access to over than 16 million healthcare professionals, organizations, and their affiliations worldwide so that commercial teams can connect on all engagement channels.
Veeva has successfully leveraged the unprecedented opportunity within SaaS. The nature of its services ensures long-term contracts with high retention rates. Earlier this year, it reported a retention rate of 121% over the year. Some believe that Veeva has the ability to become the Microsoft Office of the bio pharma industry.
Veeva’s stock is trading at $102.72 with a market capitalization of $14.7 billion. It had climbed to a 52-week high of $103.49 earlier this week soon after the result announcement. The stock has recovered from the 52-weel low of $52.17 it had fallen to in December last year.