Record Revenue of $34.1M, up 47% over Q1 2007
Record Unique Log-ins Exceeding 1 million
SAN MATEO, Calif.—May 1, 2008—NetSuite Inc. (NYSE: N), a leading vendor of on-demand, integrated business management software suites that provide Accounting / ERP (Enterprise Resource Planning), CRM (Customer Relationship Management) and Ecommerce software for small businesses, medium-sized organisations and divisions of large companies today announced operating results for its first quarter ended March 31, 2008.
NetSuite announced record revenue for the first quarter ended March 31, 2008. Total revenue for the first quarter was $34.1 million, a 47% increase over the first quarter of 2007, and an 8% increase over the fourth quarter of 2007. The first quarter of 2008 marked the 34th consecutive quarter of increased revenue for NetSuite.
On a GAAP basis, net loss for the first quarter of 2008 was $(2.0 million), or $(0.03) per share, compared to $(9.3 million), or $(1.24) per share in the first quarter of 2007, an improvement of 78%.
Net loss on a non-GAAP basis for the first quarter of 2008 was $(420,000), or $(0.01) per share, compared with $(2.3 million), or $(0.04) per share in the first quarter of 2007, an improvement of 82%.
Net loss on a non-GAAP basis excludes stock-based compensation. A reconciliation of net loss and net loss per share on a non-GAAP basis to their comparable measures on a GAAP basis is provided below in a table immediately following the Condensed Consolidated Statements of Operations.
Revenue from the Americas for the first quarter of 2008 was $27.8 million, while revenue from international regions outside of the Americas was $6.3 million. The Company added more than 400 new customers in the first quarter. The NetSuite platform had in excess of one million unique log-ins during the first quarter, making it one of the most widely used software-as-a-service applications in the world.
"Our first quarter 2008 results and record financial performance are the result of continued execution against our product, distribution and partnership strategies," said Zach Nelson, CEO of NetSuite. "With the recent introduction of NetSuite OneWorld and our groundbreaking alliance with BT, we continue to extend our leadership in cloud computing and set the stage for continued success."
Based on information as of May 1, 2008, NetSuite is providing the following outlook for its second quarter of 2008 and its full fiscal year 2008:
Q2 FY08: For thesecond quarter of2008, NetSuite expects total revenue in the range of $36.0 million to $36.7 million. Non-GAAP net loss, which excludes the impact of stock-based compensation expense, is expected to be in the range of $(1.0 million) to $(250,000). Non-GAAP net loss per share is expected to be in the range of approximately $(0.02) to $(0.00). Weighted average shares for the quarter are estimated to be approximately 60.6 million shares.
Full Year FY08: For thefull year 2008, NetSuite expects total revenue in the range of $154 million to $157 million. Non-GAAP net loss, which excludes the impact of stock-based compensation expense, is expected to be in the range of $(2.5 million) to $(0.5 million). Non-GAAP net loss per share is expected to be in the range of approximately $(0.04) to $(0.01). Weighted average shares for the year are estimated to be approximately 61.3 million shares.
NetSuite will host a conference call to discuss its first quarter 2008 results at 2:00 p.m. Pacific Standard Time today. A live audio webcast of the conference call, together with detailed financial information, can be accessed through the company's Investor Relations Website at http://www.netsuite.co.uk/investors. In addition, an archive of the webcast can be accessed through the same link for at least 30 days. Participants may also call into the conference call by calling 800-896-8445 domestically and 785-830-1916 internationally. A replay of the call will be available at 888-203-1112 or 719-457-0820, passcode 8009849, until midnight (PST) May 2, 2008.
NetSuite Inc. is a leading vendor of on-demand, integrated business management software suites for small and midsized businesses. NetSuite enables companies to manage core business operations in a single system, which includes Accounting / Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), and Ecommerce. NetSuite's patent-pending "real-time dashboard" technology provides an easy-to-use view into up-to-date, role-specific business information.
Cautionary Note Regarding Forward-Looking Statements
This press release and the scheduled conference call contain forward-looking statements relating to expectations, plans, prospects, or financial results for NetSuite, which include but are not limited to the outlook stated above. These forward-looking statements are based upon current expectations and beliefs of NetSuite's management as of May 1, 2008 and are subject to certain risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. All forward-looking statements in this press release are based on information available to the Company as of the date hereof, and NetSuite disclaims any obligation to update these 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; quarterly operating results may fluctuate more than expected; unexpected disruptions of service at the Company's data centre 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; the risk of loss of power or disruption in Internet service; failure to manage growth; the ability to manage operations when faced with competitive pricing and marketing strategies by competitors; the risk of losing key employees; 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; general political, economic and market conditions and events, including war, conflict or acts of terrorism; and other risks and uncertainties.
For a detailed discussion of these and other cautionary statements, please refer to the risk factors discussed in filings with U.S. Securities and Exchange Commission ("SEC"), including but not limited to the Company's Annual Report on Form 10-K filed on March 26, 2008, 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 website at www.netsuite.co.uk.
Non-GAAP Financial Measures
The Company's stated results include certain non-GAAP financial measures, including net loss, weighted average shares outstanding, and net loss per share. Non-GAAP net loss excludes stock-based compensation as these expenses are non-cash items that are difficult to predict and are often excluded by other companies. Additionally, non-GAAP weighted average shares outstanding, the denominator for the non-GAAP net loss per share calculation, assumes the conversion of preferred stock and the issuance of common stock as part of the Company's Initial Public Offering had occurred at the beginning of the applicable period for the periods during 2007. The Company considers these events to be non-routine, and believes these adjustments provide useful comparative information to investors.
The Company considers these non-GAAP financial measures to be important because they provide useful measures of the operational 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 financial 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 Website at www.netsuite.co.uk/investors.
Click here to download press release, financial tables, and non-GAAP reconciliation.
NOTE:NetSuite and the NetSuite logo are registered service marks of NetSuite Inc.