According to a Technavio report, the global healthcare cloud computing market is estimated to grow by $25.5 billion or 23% CAGR over the period 2020-2024. Veeva (NYSE: VEEV) recently reported its fourth-quarter results that continued to surpass all market expectations. The company recently transformed into a Public Benefit Corporation, becoming the first public company ever to do so.

Veeva’s Financials

Veeva’s Q4 revenues grew 34% over the year to $396.8 million, ahead of the Street’s forecast by 4.4%. On an adjusted basis, EPS was $0.78, surpassing the Street’s estimates of $0.18

For the year, Veeva reported revenues of $1.47 billion and EPS of $2.94.

By segment, revenues from subscription services grew 27% to $322.8 million. Professional services revenues grew 28.7% to $73.9 million.

For the first quarter, Veeva forecast revenues of $408-$410 million with an adjusted EPS of $0.77-$0.78. The market was looking for revenues of $400.4 million with an EPS of $0.74.

Veeva expects to end the current year with revenues of $1.76-$1.77 billion and an EPS of $3.20. The market was looking for revenues of $1.72 billion with an adjusted EPS of $3.11 for the year.

Veeva’s Growth Focus

Meanwhile, Veeva continued to see strong growth. Billings for the quarter grew 30% over the year to $688 million, ahead of the Street’s estimated $640 million. Vault’s subscription revenue growth accelerated to 37% from 35% a quarter ago. On the Commercial Cloud front, the company added 17 new CRM logos in the quarter. It is also seeing a stronger pro services utilization with a $4 million increase in revenues driven by the transition of customers from quarterly to annual billings. Veeva’s Engage platform is seeing a strong adoption rate primarily because the entire pharma industry migrated to a remote selling model on account of the pandemic.

Veeva Data Cloud has also made significant progress. Earlier last year, Veeva Data Cloud had begun including longitudinal patient and prescriber data offerings that covered retail and specialty distribution channels, initially tailored for commercial use cases such as launch planning, patient segmentation, commercial analytics, AI, territory design, targeting, and incentive compensation. Last quarter, it released this patient data for the US and already has five early adopter customers. It is also previewing its data with other customers and is getting positive feedback.

It expects to have prescriber and sales data available for the US by the end of the year with other countries being added over time. By providing the industry with access to important data, software and business consulting, Veeva is able to build deeper partnerships with the industry.

Veeva is not the only player in the space. Its big rival remains Medidata, a company with which it is already battling an IP trial case. New York-based Medidata has focused on developing digital transformation solutions that address the requirements for clinical development, commercial, and real-world data. The company was founded in 1999 and was acquired by Dassault in 2019. It had last reported quarterly revenue run rate of $180.5 million in the second quarter of 2019. Medidata and Veeva are fighting a legal case where Medidata has accused Veeva of stealing trade secrets by poaching five of its key employees.

2020 has been an intense year for MedTech companies. Reports reveal that nearly 1,800 medical trials were disrupted last year due to COVID19 as the researchers focused on addressing the most pressing need of the year. The pandemic and related lockdown conditions accelerated the digital transformation for these players. Medical providers and developers have to gather data not only from connected devices such as a smartwatch but also from virtual visits. Besides data collection, digital consent forms are being used to manage patient permissions.

The FDA is also helping accelerate digital research by publishing revised guidelines geared toward digital alternatives. All these steps require improved collaboration across multiple stakeholders. Companies are looking for ways to accelerate product development lifecycle to bring the product to market faster. Cloud-based solutions are needed that can connect medical providers, researchers and systems with pharmaceutical companies. Veeva is focusing on bringing all these players together through its connected systems as MedTech moves towards paperless, patient-centric trials.

Veeva has built a successful platform on top of Salesforce’s PaaS capabilities. It is a stellar example of a capital-efficient company that has built a platform on top of the Force platform. Read my thoughts on how PaaS-focused companies can help grow the ecosystem for small businesses, developers and ISVs, thus in turn creating over 10 million jobs here. I strongly believe that any SaaS player who wants to win in PaaS would need to have a strategy especially catered to the small ISVs. For now, Veeva does not as yet, or plan to have an ISV-focused platform. Its platform strategy focuses on allowing customers to build extensions. It continues to partner with other tech players to rapidly build applications that can meet specific customer needs.

Veeva’s Status Change

Earlier this month, Veeva became a Public Benefit Corporation (PBC). A PBC is a for-profit corporation that also adopts a public benefit purpose. They consider their public benefit purpose and the interests of those materially affected by the corporation’s conduct — including customers, employees, and the community — besides keeping shareholder interests in mind. For PBCs, maximizing shareholder returns is not the only duty of the board.

I spoke with Veeva’s CEO earlier last month, and he, rightly, believes that it is time that more companies go beyond their normal corporate pledges and do something real by adopting this PBC structure. I have been of the opinion that SaaS companies can play a meaningful role in contributing towards the common good – especially by working to help smaller businesses grow and thus promote economic development. Veeva’s move to a PBC is in the right direction. Not all corporations have managed to convince their board to transition to this form of an entity. But Veeva’s transition suggests there is still hope.

Its stock is currently trading at $250.9 with a market capitalization of $38 billion. It had peaked to a record high of $325.54 in February this year and a 52-week low of $118.11 in March last year.