According to a recent report, the global healthcare cloud computing market is estimated to grow by $25.5 billion, or 23% annually over the next four years. Earlier this week, Veeva (NYSE: VEEV) announced its fourth quarter results that surpassed market expectations, once again.

Veeva’s Financials

Veeva’s revenues for 4Q20 grew 34% over the year to $311.51 million, ahead of the Street’s forecast of $298 million. Net income fell 7% over the year to $66.2 million. On an adjusted basis, net income grew 20% to $85.5 millio or $0.54 per share, compared to $0.45 a year ago, and ahead of the market’s estimated $0.52.

By segment, revenues from subscription services grew 33% to $254.1 million. Professional services revenues grew to $57.4 million from $41.7 million a year ago.

Among key metrics, Subscription revenue retention was 121% for the year and customer count grew to 861, from 719 a year ago. Veeva Commercial Cloud customers grew from 335 a year ago to 390. Veeva Vault added 141 new customers for the period, ending the year with 715 customers.

For FY20, revenues grew 28% to $1.1 billion. Net income grew 31% to $301.1 million and adjusted net income was $1.90 per share compared to $1.47 a year ago.

For the first quarter, Veeva forecast revenues of $327-$328 million with an adjusted EPS of $0.59-$0.60. The market was looking for revenues of $315 million with an EPS of $0.41. Veeva expects to end FY21 with revenues of $1.4-$1.41 billion and an EPS of $2.50. The market was looking for revenues of $1.39 billion with an adjusted EPS of $1.92 for the year.

Veeva’s Product Upgrades

During the fourth quarter, Veeva has been boosting its product offering through the addition of several new applications. One such addition was the introduction of Veeva Vault Payments, an add-on application for Veeva Vault Clinical Trial Management System (CTMS), which will help manage the payment and reimbursement process to clinical research sites. Besides providing financial visibility to all study partners, Vault Payments will support complex clinical trials and streamline payments to sites. It has been introduced as part of the Veeva Vault Clinical Suite to facilitate clinical operations and data management. The application will allow sponsors and Contract Research Organizations to expedite payments to clinical research sites and automatically create, track, and report payments.

Veeva’s PaaS Strategy

Veeva has a broad range of IT partners that support product development. It currently operates three tiers of technology partners – Basic where Veeva provides tools, training, and support so they can build and productize integrated solutions; Silver Certified who have Veeva trained employees, reference-able customers, and are working with Veeva’s product team to maintain their integration; and an invitation-only Gold Certified where partners maintain certified integrations and customer references across multiple Veeva product areas. Partners can use its REST-based API that is available in either JSON or XML formats to create custom applications that are powered by Vault Platform and offer integrations and other tools such as data loaders of schema visualization. Veeva does not have an App Marketplace as such, but it showcases the integrations built by these partners.

Veeva has built a very successful platform on top of Salesforce’s PaaS capabilities. By leveraging Salesforce’s platform, it has built a $20+ billion dollar company in a very capital efficient way. It is a very unique example of how a company that is built on another company’s PaaS is trying to put together its own PaaS strategy and App Marketplace. For now, Veeva appears to be building a marketplace around its API-based integration partners – that may well be the route that SaaS companies built on a PaaS model need to follow.

Veeva’s stock is trading at $144.12 with a market capitalization of $21.41 billion. It had peaked to a record high of $176.90 in July last year. It hit a 52-week low of $110.23 a year ago.