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NETSUITE ANNOUNCES RECORD FIRST QUARTER 2010 FINANCIAL RESULTS
SAN MATEO, Calif. —May 3, 2010—NetSuite Inc. (NYSE: N), a leading vendor of cloud computing business management software suites, today announced operating results for its first quarter ended March 31, 2010.
Total revenue for the first quarter of 2010 was $43.9 million. Revenue from the Americas for the first quarter of 2010 was $35.5 million, while revenue from international regions was $8.4 million.
GAAP operating loss for the first quarter of 2010 was $6.6 million, compared to a GAAP operating loss of $4.0 million in the first quarter of 2009. On a GAAP basis, net loss for the first quarter of 2010 was $7.1 million, or $(0.11) per share, compared to a net loss of $3.7 million, or $(0.06) per share in the first quarter of 2009.
Non-GAAP operating income for the first quarter of 2010 improved 81% year-over-year, growing to $1.4 million, compared to a non-GAAP operating income of $790,000 in the first quarter of 2009. Non-GAAP net income for the first quarter of 2010 was $930,000, or $0.01 per share, as compared to a non-GAAP net income of $1.0 million, or $0.02 per share, for the first quarter of 2009.
Calculated bookings for the quarter reached $47 million, representing the highest total for a quarter in the company's history and growing 27% year-over-year and 2.5% sequentially. The year-over-year growth represents the fastest calculated bookings growth in more than a year. This sequential growth represents the first time in the company's history as a public company that calculated bookings have grown Q1 over Q4. Calculated bookings are defined as the change in total deferred revenue plus revenue.
"Even in the face of traditional seasonal Q1 headwinds, NetSuite reported its strongest first quarter results as a public company. Revenue, non-GAAP operating income, operating cash flow and calculated bookings all reached record levels," said Zach Nelson, CEO of NetSuite. "These results show NetSuite's strong momentum in delivering solutions that meet customer requirements to run complex, mission-critical business processes in the cloud."
CFO Transition Plan Announced: Jim McGeever to be Promoted to COO; Ron Gill to be Promoted to CFO
"Jim has served as NetSuite's CFO for the past decade. His dedication and deep knowledge of NetSuite's cloud computing solutions, customers and vertical strategy will make him invaluable in his newly expanded role as COO," stated Zach Nelson, CEO of NetSuite.
Ron Gill, 44, has been responsible for NetSuite's accounting and finance functions since joining the company in 2007. Prior to joining NetSuite, Ron was Vice President, Finance at Hyperion Solutions. Prior to Hyperion, he held a variety of financial positions with several of the world's largest technology companies including SAP, Dell and Sony. Ron holds a Master of International Business Studies from the University of South Carolina and a B.A. from Baylor University. He is a member of the Board of Regents of the Institute of Certified Management Accountants.
"Ron is an exceptional financial executive who has provided significant leadership in NetSuite's worldwide finance organization. As we continue to expand our leadership in cloud computing, Ron is the ideal executive to help us capitalize on the global opportunities that NetSuite is pursuing," said Zach Nelson, CEO of NetSuite.
Cautionary Note Regarding Forward-Looking Statements
In particular, the following factors, among others, could cause results to differ materially from those expressed or implied by such forward-looking statements: the market for on-demand services may develop more slowly than expected or than it has in the past; continued adverse and unpredictable macro-economic conditions or reduced investments in on-demand applications and information technology spending; quarterly operating results may fluctuate more than expected; unexpected disruptions of service at the Company's data center may occur; a security breach may impact operations; risks associated with material defects or errors in the Company's software or the effect of undetected computer viruses could impact operations; the risk of technological developments and innovations by others; our ability to successfully identify other businesses and technologies for acquisition that will complement our business and the ability to successfully acquire and integrate those businesses and technologies; the risk of loss of power or disruption in Internet service; failure to manage growth; failure to protect and enforce our intellectual property rights; the ability to manage operations when faced with competitive pricing and marketing strategies by competitors or changing macro-economic conditions; the risk of losing key employees; the transition of Messrs. McGeever and Gill to their new roles within NetSuite; increased demands on employees and costs associated with operating as a public company; evolving government regulation of the Internet and Ecommerce; changes to current accounting rules; and general political or destabilizing events, including war, conflict or acts of terrorism; and other risks and uncertainties.
Customers who purchase our services should make sure the decisions are based on features that are currently available. Please be advised that any unreleased services or features from NetSuite referenced in today's discussion or other public statements are not currently available and may not be delivered on time or at all.
For a detailed discussion of these and other cautionary statements, please refer to the risk factors discussed in filings with the U.S. Securities and Exchange Commission ("SEC"), including but not limited to the Company's Annual Report on Form 10-K filed on March 15, 2010, and any subsequently filed reports on Forms 10-Q and 8-K. All documents are available through the SEC's Electronic Data Gathering Analysis and Retrieval system ("EDGAR") at www.sec.gov or NetSuite's Web site at www.netsuite.com.
Non-GAAP Financial Measures
The Company considers these non-GAAP financial measures to be important because they provide useful measures of the operating performance of the Company and are used by the Company's management for that purpose. In addition, investors often use measures such as these to evaluate the operating performance of a company. Non-GAAP results are presented for supplemental informational purposes only for understanding the Company's operating results. The non-GAAP results should not be considered a substitute for financial information presented in accordance with generally accepted accounting principles, and may be different from non-GAAP measures used by other companies.
A copy of this press release can be found on the Company's Investor Relations Web site at www.netsuite.com/investors. The contents of the Web site are not incorporated by reference into this press release.
Click here to download the press release, financial tables and non-GAAP reconciliation.
NetSuite and the NetSuite logo are registered service marks of NetSuite Inc.