Veeva Systems Inc. (NYSE: VEEV) Q3 2021 Earnings Highlights
CEO Peter Gassner
“…We had another quarter of consistent execution and results ahead of guidance. Total revenue was $378 million, up 34% year-over-year. Subscription revenue also grew 34% year-over-year and non-GAAP operating margin was 41%.
We are pleased with our results and how we’re expanding customer relationships during a major digital transformation. We’ve been able to help customers with immediate needs to open up digital channels in commercial and clinical, and we’re also helping them to find the right digital models for the long-term.
For example, on the commercial side, we recently announced the strategic partnership with an emerging biopharma to help them define and execute an innovative digital-first commercial model. They will utilize the full commercial cloud, including Veeva CRM, Data Cloud, Veeva Link, MyVeeva, and Business Consulting. That level of trust and confidence in our ability to deliver came through strongly in our Q3 new wins and expansions. We added 19 new CRM customers, our biggest quarterly increase yet. We continue to grow market share and had multiple international expansions in CRM with existing customers.
We also progressed well in our newer areas, including Data Cloud, MyVeeva for Doctors, and Veeva Link. We expect these products will set us up for a long runway of growth in commercial. It’s an exciting time in commercial and a time of change. We think our customers can generate meaningful productivity gains over the coming years as they increasingly leverage digital.
We’re excited to enable that transformation through our technology. With Veeva Vault, we’ve seen significant progress in Development Cloud adoption. Customers are increasingly purchasing multiple products at once, including our recently announced top five pharma, who selected Veeva Vault products in clinical operations, quality, and regulatory. This is a major transformation, which they will implement over the next two to three years.
We’re also seeing more customers expand Vault usage within each area of Development Cloud. In clinical operations, Vault CTMS had a standout quarter. We now have more than 75 customers, including six of the top 20 that have chosen to standardize on Vault CTMS. This is a remarkable pace of adoption, given the product was launched just over three years ago. This rapid uptake is based on the trust we’ve built in clinical operations with Vault eTMF, and the power of having a unified suite for clinical operations.
In the area of clinical I am particularly excited about is Veeva Clinical Network, where we’re bringing real innovation to the industry to help advance the move to paperless and patient-centric clinical trials. Clinical Network connects sponsors, sites, and patients, and has the potential to fundamentally change how the industry conducts trials.
We announced our first Clinical Network application, Veeva Site Connect, to connect sites and sponsors, and in Q3 closed our first top 20 customer for Site Connect. In Quality, we had 20 net new customers select Vault QualityDocs, and we now have 12 of the top 20 pharmas as QualityDocs customers. Safety also continues to progress well with our early adopters, and we added four new customers. We also started our first Safety AI project in the quarter.
Outside of life sciences, as the pandemic continues to drive changes in consumer goods and cosmetics, companies are looking to us for agile global solutions that can help them quickly adapt. This dynamic drove a major win in Q3 with another large CPG customer. We also brought together nearly 800 liters from across consumer goods, cosmetics, and chemicals for an Online Quality and Regulatory Summit to share best practices and insights. Overall, we are pleased with our growing reach and momentum in these industries.
Now, I’ll share some additional thoughts as we look ahead to next year. On the Commercial Cloud side of the business, customers will find new ways to be more efficient by adopting our digital solutions. We believe this will likely drive field force reductions in the neighborhood of 10% over the coming year. At the same time, we expect to increase market share in CRM and see further adoption of CRM add-on products such as Engage, Events, and Align. We also expect greater adoption for Veeva Link, and it will be an important early adopter year for Data Cloud and MyVeeva.
We expect Vault to continue its strong growth, particularly Development Cloud, with progress across the Board in clinical, quality, and regulatory. It’s still early in terms of revenue for CDMS and Safety, but we have very strong early adopter momentum and broad customer interest, which will serve us well in these large markets in the coming years. We’re also excited about the future of Clinical Network, and we expect another year of consistent growth outside of life sciences in CPG, chemicals, and cosmetics…”