Veeva Earnings: Company Unveils Vault CRM and Enters AI Trend With Announcement of CRM Bot

Wide-moat Veeva Systems VEEV reported first-quarter results that were slightly ahead of our expectations. Total sales were up 4.2% year over year driven from customer wins across its suite of applications. We maintain our fair value estimate of $275 per share.

Veeva unveiled Vault CRM, its traditional customer relationship management system built on the Vault platform, at its Commercial Summit which took place in early May. Along with this, Veeva introduced two new applications for the platform: CRM Bot and Service Center. CRM Bot is an artificial intelligence application powered by data from Link and Compass (applications within Veeva Data Cloud) and helps field teams. Initial adoption of Vault CRM is expected to start in 2024 by new customers. This timeline is what we had expected and management’s commentary around the transition has been favorable. While technical migrations require work from Veeva, existing customers are not expected to see any meaningful changes as Veeva is working on keeping the same mobile apps and data model.

Veeva continues to focus on expanding its data offerings. It launched Compass Prescriber and Compass National, two applications that will provide prescription data on various levels. While we appreciate Veeva’s efforts at fostering its data business, we see a tough landscape in the business given IQVIA’s dominance in the industry. But as the company works on ramping up its data assets, we believe the company can reap synergies as its proprietary data helps expand the services that its AI application can offer.

The funding environment remains challenging for smaller biotechnology companies. Low venture capital funding, high interest rates, and the competitive landscape from a growing number of biotech firms put pressures on Veeva’s smaller customers. But we see Veeva showing its resilience boasting its wide switching-costs moat by adding new customers in many of its applications including Vault Quality, Vault Safety, and Vault EDC.