Should Veeva Do A PaaS Strategy?

According to a Zion market research report, the global healthcare cloud computing market is estimated to grow 19% annually over the next few years to $61.84 billion by 2025 from $18.85 billion in 2018 driven by the continued adoption of IoT, wearable devices, and big data analytics in the healthcare sector, and the continued demand for regulatory compliance. Pleasanton, California-based Veeva (NYSE: VEEV) recently announced its quarterly results that continued to benefit from this rapid growth.

Veeva’s Financials

For the fourth quarter, Veeva’s revenues grew 25% over the year to $232.3 million, significantly ahead of the Street’s forecast of $228 million. Adjusted earnings grew 88% over the year to $0.45 per share and were far ahead of the market’s forecast of $0.31 per share for the quarter.

By segment, revenues from subscription services grew 26% to $190.7 million driven by the growing bookings for Vault. For the current quarter, Vault accounted for 45% of its subscription revenues compared with 39% a year ago. Professional services revenues grew 22% to $41.7 million.

Veeva ended the fiscal year with revenues growing 25% to $862.2 million driven by Subscription Services Revenues growing 24% to $694.5 million. Net income for the year grew 52% to $229.8 million. On an adjusted basis, the company reported an EPS of $1.63 compared with $0.96 a year ago.

Among key operating metrics, Veeva’s annual customer count grew to 715, from 625 a year ago and included 332 Veeva Commercial Cloud customers, up from 311, and 572 Veeva Vault customers, up from 449 a year ago.

For the current quarter, Veeva forecast revenues of $238-$239 million with an adjusted EPS of $0.44-$0.45. The market was looking for revenues of $234.2 million with an EPS of $0.40. Veeva expects to end the current year with revenues of $1.02-$1.03 billion and an EPS of $1.91-$.94. The market was looking for revenues of $1.02 billion with an adjusted EPS of $1.79 for the year. Veeva is crossing the billion dollar revenue milestone a year ahead of its plans.

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