Veeva Systems Inc(NYSE: VEEV) stock lost over 6% in the after-hours session on December 5th, 2017 post their lower than expected third quarter of 2018 performance. The group expects a subscription revenue growth of at least 20% through 2020. This forecast is lower than the Subscription revenue growth of 25% and their non-GAAP operating margin of 33% during the third quarter of 2018 performance.
Total revenue was $176 million, up 23% year-over-year. The group expects a steady progress over the coming years of the commercial cloud. They witnessed the biggest booking quarters ever with events management and made major new regional wins including three with top 50 global pharma who had not purchased events management in any region before.
As per their commercial Vault business, they witnessed a strong bookings quarter with contributions from large and small customers and across all geographies. Migrations from Zinc to Vault PromoMats are on track with 2018 and 2019 shaping up to be the major years for Zinc migrations.
The major target market for Vault is on the R&D side of life sciences, where the group has applications for the clinical, quality, and regulatory areas. The group is the only firm to provide solutions in all these areas on a single cloud platform. Systems for product development and life sciences are not well integrated as clients have systems from several vendors and many of them are legacy client-server systems. Vault CTMS is their most mature application in clinical and has over 170 customers globally. Vault eTMF is becoming the global standard for clinical document management and is also playing an integral part in serving as the strategic entry point for their broader suite of unified clinical products.
They are also offering Vault QualityOne for outside of life sciences. During the quarter, they added a few early adopter customers, most importantly their projects with early customers are going well and in many cases, early adopters are already expanding. The group continues to leverage their leadership position in a commercial cloud.
The shares of VEEV stock rallied over 42% in this year to date (As of December 5th, 2017; Source: Google finance).