Cloud Earnings Highlights: Salesforce (CRM), Workday (WDAY), Veeva Systems (VEEV)

Tom Paine

Salesforce slightly beat expectations for Q1 of its 2021 fiscal year, reporting net income of 70 cents per share on revenue of $4.87 billion, up 30% from the prior year. The company dropped its revenue forecast for the full year by $1 billion to $20 billion.

Salesforce expects earnings between $2.93 and $2.95 per share, down from previous expectations 0f $3.10 per share.

Salesforce’s deal with AT&T (Wireless) is one of the ‘largest transactions we’ve ever done,’ says Salesforce CEO Marc Benioff.

Workday showed profits of 44 cents per share (excluding certain items) on revenue of $1.02 billion, up 23% from a year ago. It also lowered its forecast for the year.

Workday will offer a new integration with Salesforce’s Work.com to help joint customers plan for the safe reopening of their workplaces in the wake of the COVID-19 pandemic.

I find it intruiging to see the two companies working together, and wonder if that collaboration might lead to bigger thing in the future.

Pleasanton, CA-based Veeva Systems, Inc., with east coast offices in Radnor, had a tremendous start to its fiscal year 2021. Revenue was up 38% from the prior year to $337.1M, while net income was $86.6 million, up 18%. Veeva benefited from customer activity created by Covid-19, the general pace of change in the industry, and the continued fleshing out of its product line.

Matt Wallach, who retired from his role as president of Veeva Systems as of June 2019, returned as a non-managerial board member in January as planned. Wallach is also involved in the startup community, such as serving on the board of HealthVerity.

Veeva R&D Summit draws life sciences leaders to Philly

Tom Paine

California-based Veeva Systems was showing some of its Philadelphia ties this week, hosting a major conference in the city. The 2019 Veeva R&D Summit took place Sept. 8-10, 2019 in Philadelphia, and was expected to draw 1,700 life sciences professionals and industry experts. Former Novartis CEO Joe Jimenez and Lilly’s Drug Development leader were featured keynote speakers.

While Silicon Valley is Veeva’s base for managing one of the most sophisticated cloud operations around, it needs to stay close to its major customers on the east coast, as it does through its Radnor office. The R&D summit focused on Veeva’ clinical data side, as Veeva Vault now makes up a majority of its revenues.

Veeva has achieved an important financial milestone in the 2nd calendar quarter of 2019, reporting revenue of $267 million (up 27.3 year over year), assuring a billion dollar run rate for its 2020 fiscal year ending this coming January. Veeva is forecasting total revenues between $1,062 and $1,065 million and non-GAAP operating income between $401 and $404 million for FY 2020.

Veeva says that the number of Vault CTMS customers has doubled in less than a year to 50 (see my earlier article, Veeva Vault has traction in CTMS). Veeeva, among others, is trying to redefine the CTMS category, which is a critical bottleneck in the industry’s need to get products to market in a safe and timely manner.

Veeva also announced today that it will host a 2020 Medical Device & Diagnostics Summit June 1-2, 2020 in Minneapolis, reflecting an increased focus on that segment.

Veeva (NYSE: VEEV) has continued a remarkable stretch of market and financial performance. It currently has a Price/Sales (not P/E) ratio of 21, and its shares have risen almost 80% during 2019.

“The life sciences industry is transforming to precision medicine and software is transforming along with it to the cloud,” CEO Peter Gassner, who was an executive at Salesforce.com Inc. and Peoplesoft Inc. before co-founding Veeva in 2007, recently told Bloomberg. “The stars are aligning.”

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