According to a Global Market Insights report, the global healthcare cloud computing market is estimated to grow 15.5% annually over the next few years to reach $55 billion by 2025. Pleasanton, California-based Veeva (NYSE: VEEV) recently reported its second quarter results that continued to surpass all market expectations.
Veeva’s Q2 revenues grew 27% over the year to $267 million, ahead of the Street’s forecast of $259 million. Veeva Vault now accounted for more than half of the company’s revenues for the quarter. It ended the quarter with earnings of $79.2 million, compared with $50.3 million reported a year ago. On an adjusted basis, it reported an EPS of $0.55, compared with $0.39 a year ago and significantly ahead of the Street’s estimate of $0.49 for the quarter.
By segment, revenues from subscription services grew 28% to $217.3 million. Professional services revenues grew 24% to $49.6 million.
For the third quarter, Veeva forecast revenues of $274-$275 million with an adjusted EPS of $0.54-$0.55. The market was looking for revenues of $268.87 million with an EPS of $0.51. Veeva expects to end the current year with revenues of $1.062-$1.065 billion and an EPS of $2.11-$2.13. The market was looking for revenues of $1.05 billion with an adjusted EPS of $2.02 for the year.
Veeva’s Growth Focus
Veeva continues to drive market expansion and product adoption through the integration of its platform. Recently it announced the availability of the MuleSoft Connector for the Vault platform. The integration will allow healthcare companies to connect Veeva Vault applications with other enterprise systems and thus expand Veeva’s capabilities to Veeva and Salesforce’s joint customers.
Veeva Vault is a cloud-based content management platform that helps healthcare companies increase business agility by managing regulated documents and tracking critical information ranging from product development to commercialization.
Veeva is looking to add several new capabilities within Vault CDMS this year. Analysts believe that some of these features would be game changers for the life sciences industry, giving Veeva an additional push into the segment. In June this year, it announced the release of Veeva Vault Safety, which provides real-time management of adverse events. It already has four early adopters of the service including Apellis Pharmaceuticals and Catalyst Clinical Research. Vault Safety ensures drug safety, and pharma covigilance organizations stay current on regulatory changes across global agencies and eliminates the costly upgrades of legacy on-premise safety solutions.
AI remains another focus area for Veeva. It recently announced plans for Vault Safety.AI, a new AI application, that will offer the first integrated suite of cloud applications on a common platform to manage the end-to-end drug safety lifecycle. It will automate case intake to reduce the time and effort of manual data entry and accelerate case processing.
Veeva believes that life sciences companies are collecting an increasing volume of adverse events from an expanding number of sources, including social media, fax, email, literature, and call center notes. The launch of Safety.AI will reduce manual data entry during case intake by automatically converting text from these sources into the required fields in a drug safety case. The application will be released to the market by April 2020.
Veeva’s stock is currently trading at $163.41 with a market capitalization of $24.1 billion. It had peaked to a record high of $176.90 last month. It hit a 52-week low of $79.26 in December last year.