According to a Market Watch report published recently, the global cloud-based healthcare computing market is estimated to grow 20% annually over the next few years to $11 billion by 2022. Veeva (NYSE: VEEV) continues to ride high on this growth.

Veeva’s Financials

For the third quarter, Veeva’s revenues grew 27% over the year to $224.7 million, significantly ahead of the Street’s forecast of $216.2 million. Net income was $64.1 million. Adjusted EPS of $0.45 grew from $0.20 a year ago, and was ahead of the market’s forecast of $0.38 for the quarter. This was the fourth consecutive quarter that Veeva surpassed market expectations.

By segment, revenues from subscription services grew 25% to $178.2 million. On an adjusted basis, its subscription gross margin grew 320 basis points to 84.8%. Revenues from professional services grew 36% over the year to $46.5 million. The growth in revenue was attributed to continued strong demand within Veeva Vault R&D.

For the current quarter, Veeva forecast revenues of $226-$227 million with an adjusted EPS of $0.40. It expects to end the current year with revenues of $855.8-$856.8 million with an EPS of $1.58. The market was looking for revenues of $222.11 million for the quarter with an adjusted EPS of $0.37. For the year, the Street had forecast revenues of $843.3 million with an EPS of $1.48.

Veeva’s Vault Growth

Veeva continues to invest and develop its Vault offering. Vault is Veeva’s cloud enterprise content management platform and suite of applications built for the life sciences industry. Veeva continues to see strong momentum in bookings across all areas of Vault. Vault accounted for 44% of subscription revenues compared with 36% a year ago.

Veeva recently introduced its Vault Digital Publishing, a new digital asset management (DAM) capability in Vault PromoMats and Vault MedComms. The new service will allow brand marketing teams to publish and withdraw approved assets from a central location to any digital channel for faster publishing. Organizations will have access to a single view of content performance across digital channels with a single click from Vault PromoMats or Vault MedComms. Additionally, it will leverage the Amazon CloudFront to deliver high availability and optimal performance.

According to a recent report, the global Clinical Trial Management (CTM) market size is estimated to grow 13% annually over the next seven years to $1.7 billion by the year 2025 from $630 million in 2018. Veeva is one of the leading players in the clinical trials market. Earlier this year, it released Veeva Vault EDC, 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. The solution has helped Veeva offer new services to biotech startups. It is seeing strong revenue pipeline with both big pharma and small health-science startups. Additionally, as clinical trials end, Veeva has been able to renew contracts to cater to new projects that start with these customers.

Its services are attracting some big names as well. Recently, Veeva announced that its Vault electronic Trial Master Files (eTMF) added another top-seven contract research organization (CRO). Veeva now has three of the top seven CROs as its customers. It did not divulge the number of customers it added to its Vault Clinical Trial Master Systems, but it did mention that it added a top-20 global pharmaceutical company to the service.

Veeva is enjoying the first-mover’s advantage in its niche market of cloud services for drug companies. It already had big names like GlaxoSmithKline, AstraZeneca, and Novartis as its customers, and it doesn’t face serious competition in the segment. Given Veeva’s growth in the cloud market, analysts have compared it to Salesforce.com. I would like to know what else, besides content management, is on the wish list of customers? What are those other opportunities where Veeva can create another significant, high growth business around, like the Clinical Trials market?

Veeva’s stock has done well this year, having grown nearly 65% over the last twelve months. But recently, macro-economic conditions, coupled with analyst ratings have caused the stock to stumble. The stock is currently trading at $86.02 with a market capitalization of $12.5 billion. It had peaked to $109.05 in October this year.It had fallen to a 52-week low of $52.17 in December last year.