Record 2007 Revenue of $108.5M, up 62% year-over-year
Record Q4 2007 Revenue of $31.7M, up 13% quarter-over-quarter
Record Q4 2007 Cash Flow from Operations of $3.7M
Record Q4 2007 Unique Log-ins of 930,000
SAN MATEO, Calif.—February 14, 2008—NetSuite Inc. (NYSE: N) , a leading vendor of on-demand, integrated business management application suites that include Accounting / Enterprise Resource Planning (ERP), Customer Relationship Management (CRM) and Ecommerce software for small and medium-sized businesses and divisions of large companies, today announced operating results for its fourth quarter and fiscal year ended December 31, 2007.
NetSuite announced record revenue for the fourth quarter and fiscal year ended December 31, 2007. Total revenue for the year was $108.5 million, a year-over-year increase of 62%. Total revenue for the fourth quarter was $31.7 million, a 57% increase over the fourth quarter of 2006, and a 13% increase over the third quarter of 2007. The fourth quarter of 2007 marked the 33rd consecutive quarter of increased revenue for NetSuite.
On a GAAP basis, net loss for the fourth quarter of 2007 was $(3.3 million), or $(0.22) per share, compared to $(8.1 million), or $(1.25) per share in the fourth quarter of 2006. On a GAAP basis, net loss for the year ended December 31, 2007 was $(23.9 million), or $(2.45) per share, compared to $(35.7 million), or $(6.42) per share, in 2006.
Net loss on a non-GAAP basis for the fourth quarter of 2007 was $(842,000), or $(0.01) per share, compared with $(3.9 million), or $(0.07) per share in the fourth quarter of 2006, an improvement of 78%. Net loss on a non-GAAP basis for the year ended December 31, 2007 was $(5.7 million), or $(0.10) per share, compared to $(20.4 million), or $(0.36) per share, in 2006, an improvement of 72%.
Net loss on a non-GAAP basis excludes stock-based compensation. Net loss per share on a non-GAAP basis also includes certain adjustments to outstanding shares of common stock based upon the conversion of convertible preferred stock to common stock and the issuance of common stock in connection with the Company's Q4 07 initial public offering. 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.
"Our fourth quarter and fiscal year 2007 results capped off the best year in our history by every measure," said Zach Nelson, CEO of NetSuite. "We head into 2008 with tremendous market, customer and product momentum, not just in the U.S. but around the world."
Revenue from the Americas for the year ended 2007 was $89.3 million, while revenue from international regions doubled to $19.2 million. The Company added approximately 430 new customers in the fourth quarter and ended the year with over 5,600 active customers. The NetSuite platform had more than 930,000 unique log-ins during the fourth quarter, making it one of the most widely used software as a service applications in the world.
In addition, NetSuite's Board of Directors recently elected Ms. Deborah Farrington as the Board's Lead Independent Director. Ms. Farrington is expected to serve in this capacity for two years following the annual stockholder meeting expected to take place in May 2008.
Based on information as of February 14, 2008, NetSuite is providing the following outlook for its first quarter of 2008 and its full fiscal year 2008:
Full Year FY08: For the full year 2008, NetSuite expects total revenue in the range of $153 million to $156 million. Non-GAAP net loss, which excludes the non-cash impact of stock-based compensation expense, is expected to be in the range of $(2.5 million) to $(0.5 million). Non-GAAP 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 fourth quarter and full fiscal year 2007 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 investors section of the Company's web site at 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 888-727-7693 domestically and 913-312-1481 internationally. A replay of the call will be available at 888-203-1112 or 719-457-0820, passcode 6478447, until midnight (PST) February 16, 2008.
NetSuite Inc. is a leading vendor of on-demand, integrated business management application suites for small and medium-sized 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 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 February 14, 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 e-commerce; 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 Registration Statement on Form S-1/A filed on December 19, 2007, and any subsequently filed reports on Forms 10-K and 10-Q. 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 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. 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 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.
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