Veeva again did a 23% revenue growth this quarter and I think this is just the beginning of the next stretch for the. Veeva’s platforms are used by most of the largest enterprises in life sciences (think pharma as an example) and as Veeva has grown its suite of offerings all of which are on the cloud and sold on a subscription model. They invest a lot on R&D and started of with a CRM product but have added clinical, quality, and regulatory processes and now adding Safety. Their second product the Vault now has 449 customers in just under 3 years since launch and is generating almost 42% of revenue today up from 35% last Q4. Their revenue retention rate was an incredible 121% because they keep adding new products to the existing client base. Look at their quarterly growth numbers and due to Vault the margins have also started increasing because they have to share some licensing costs with Salesforce for the CRM piece.
2016 yearly Rev of 409 m and Net Income 54.6 m
Q3 2017 - 34% yoy
Q4 2017 - 31%, 2017 Rev of 544 m and Net Inc 68.8 m or 26% yoy NI growth
Q1 2018 - 32%
Q2 2018 - 27%
Q3 2018 - 23%
Q4 2018 - 26% - 2018 Rev of 685 m and Net Inc 141.9 m or 100% yoy
The last jump probably due to taxes situation and Op. income increased by 42% and they are project 820+ m next year which I am sure is sandbagged given their history and revenue predictability.
They spend a good 20% ~ of their revenue in R & D and have been spending a similar amount on marketing thous the marketing spend has slowed down this year to just about 10% yoy which means going forward the operating margins should start seeing more traction as the revenue grows.
They have 600 customers and call out at least 10,000 as their TAM (8 B +) , as they go to the smaller players the revenue per client may not be as much but even if we assume 60% as that revenue we are still looking at a 2.5 - 3 B market because at the moment I don’t believe they have any competition with the legacy systems out in these industries. Recently they started on a new industry segment in Chemicals processing which is again heavily regulated but this industry according has 2000 companies with 100 million in revenue and includes Chemicals | CPG | Cosmetics | Nutraceuticals | Food & Beverage | Industrial Products | Oil & Gas etc and if we assume that these companies generate an additional 1 – 2 billion USD in the next 5 years we are looking at a total 3.5 - 5 Billion run rate for this company in the next 5 – 6 years at a minimum and assuming a Net margin of 25% it will be 900 m – 1250 m in Net Income and giving a 20 times P/E should get a market cap of 18 B – 25 B market cap.
I believe I am very conservative but typically when any business creates a new segment and learns from it the second play is always faster and more efficient because of learning curve advantages and next double in revenue should be faster . I believe they should hit the 1 B run rate by end of 2019. So net net I think this stock should be a double or a triple in the next 5 years even if they don’t hit a home run but are close to that in execution
Comments welcome because I know this group has started to expect a double EVERY year 
Rajesh
check out their investor prsentation from Oct 2017 on their website.