Veeva Systems, a cloud operator focused on the life sciences industry, has been on a roller coaster ride since its IPO in October. On its first day of trading, the stock shot up 85.8% to $37 -- and it would go on to a high of $49.
Unfortunately, the stock has not been spared from the recent sell-off in the cloud sector. Currently, VEEV trades at $18, which is actually below the IPO price, which was $20.
Despite all this, the co-founder and CEO, Peter Gassner, continues to focus on building a lasting business. “We cannot control the stock price in the short-term,” he said. “But we can control it over the long-term if we continue to grow.”
And so far, things are running nicely. Then again, VEEV offers mission-critical software that’s tailored to the complicated needs of the healthcare industry, such as with CRM and content management. The company has also been getting traction with Veeva Network, which is a Big Data system.
As for the financial performance, there is little to quibble about. In the latest quarter, revenues shot up by 58% to $62.8 million and the company is even profitable, with operating margins at a juicy 23%. This also means cash flows remain robust. For fiscal 2014, they came to $41.8 million, up by 36%.
To make sure the success continues, Peter also extended a critical partnership with
Now all this does not mean Peter has ignored Wall Street. Far from it. He knows that market volatility can have a negative impact on employees. So during the recent quarterly meeting with employees (there are over 500), he talked about the stock price.
But the focus, of course, was still on the long-term mission. “With a fast growing company,” he said, “you need to continually reinforce things because you are always hiring new people. For my presentation, the first and last slides are about the mission.”
In fact, for every meeting he invites a customer. “This is a great way to understand what customers like or do not like,” said Peter. “We also get a better idea of what they want to see.”
No doubt, this is a powerful way of getting the troops to be enthused about the opportunity, which is certainly massive. After all, healthcare spending comes to about $1.6 trillion a year in the US and is growing at a 6% clip. “Healthcare is a great place to be,” said Peter, “regardless of the mood swings on Wall Street.”
Tom Taulli (@ttaulli) is an advisor of tech companies and author of books on venture capital, M&A and IPOs.
