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Veeva is an American developer of digital solutions for the healthcare sector. The group was founded in 2007 in California, like countless players in the digital transition. Its workforce has grown in fifteen years from a few people to more than 6,000 employees. It is therefore a great entrepreneurial adventure, which can boast of having exceeded the milestone of 1,000 customers and 2 billion dollars in annual turnover, while being profitable for ten years already.
Concretely, Veeva responds to two types of needs of companies in the health sector: on the one hand, the management of their customer relations (Veeva Commercial Cloud); on the other hand, the management of their clinical developments (Vault). To these two main professions are added various solutions, such as tools for scientific communication, data analysis, optimization or quality control in production. Veeva products enjoy fairly wide recognition in the profession, which guarantees it an interesting market share in the field of health CRM, behind the major generalist players and its compatriot Iqvia. Clinical trial monitoring solutions are also quite widespread, without being at the level of commercial tools. The clientele is made up of 93% of pharmaceutical or biopharmaceutical laboratories. The balance is split between medtechs and consumer goods. The geographical footprint is mainly American (58% of revenues), while Europe accounts for 28% of sales and the rest of the world 14%.
Veeva passed the billion dollar mark in revenue in 2019 and that of 2 billion dollars in the last fiscal year ended at the end of January. The group expects to reach 3 billion dollars in 2025, one year ahead of its initial ambitions. This growth has been accompanied, so far, by an at least as strong increase in results. The operating margin has not fallen below 35% for four financial years and the generation of free cash flow is particularly impressive. $450 million on average each year. Like many technology companies that have found their place, Veeva is sitting on a substantial war chest, which guarantees both its independence and the resources necessary to fuel its internal growth and, possibly, its external growth.
Above the greenwashing ambient
We will add a singularity to the American societal landscape. Veeva is the first listed company to convert to the legal status of Public Benefit Corporation (PBC), in 2021. It retains a profit-making purpose but is legally required to maintain a balance between the interests of several stakeholders (customers, employees , shareholders, etc.). As such, we can consider that the company goes beyond the greenwashing by imposing structural constraints on themselves, since PBCs are legally bound to pursue their social and environmental mission, even if this goes against the interests of shareholders. It won’t change the world with the snap of a finger, but it’s rare enough to be underlined. It remains to be seen whether the market deems this to be compatible with its stock market intentions.
For now, it works. On the side of financial multiples, we are, as often in this section, faced with a very well valued company. Being at the crossroads of technology and health with high profitability is a sign of a certain scarcity, and what is rare is expensive. The file weighs 26.5 billion dollars on Wall Street, even if we are very far from the heights reached during the bubble of tech stocks in 2021. For those seeking long-term exposure to a buoyant market, Veeva is a well run, very profitable business with the added bonus of PBC.