• Reports Record Quarterly Revenue of $43.9 Million.
• Reports Record Quarterly Operating Cash Flow of $4.7 Million, an Improvement of $6.9 Million versus Q1 of 2009.
• Reports Record Calculated Bookings, Increasing 27% Year-over-Year.
• Effective July 1, 2010 Jim McGeever to be Promoted to Chief Operating Officer; Ron Gill to be Promoted to Chief Financial Officer.
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
NetSuite also announced that, effective July 1, 2010, current Chief Financial Officer Jim McGeever, 43, will be promoted to Chief Operating Officer, at which time NetSuite's Senior Vice President of Finance, Ron Gill, will become the Company's Chief Financial Officer.
"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.
In conjunction with this announcement, NetSuite will host a conference call at 2:00 p.m. PDT (5:00 p.m. EDT) today to discuss the company's first quarter 2010 financial results. A live audio webcast and replay of the call, together with detailed financial information, will be available in the Investor Relations section of NetSuite's Website at netsuite.com/investors. The live call can be accessed by dialing 888-287-5535 (U.S.) or 719-325-2176 (outside the U.S.) and referencing passcode: 689-2344. A replay of the call can also be accessed by dialing 888-203-1112 (U.S.) or 719-457-0820 (outside the U.S.), and referencing passcode: 689-2344.
NetSuite, Inc. (netsuite.com) is a leading vendor of cloud computing business management software suites for mid-sized businesses and divisions of large enterprises. NetSuite enables companies to manage core key business operations in a single system, which includes accounting/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 NetSuite's scheduled conference call contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 relating to, among other things, expectations, plans, prospects and financial results for NetSuite, including, but not limited to, our expectations regarding the impact of these changes in management on Suite and our business, and our expectations regarding our products, market demand, future earnings, revenue and market share growth. These forward-looking statements are based upon the current expectations and beliefs of NetSuite's management as of the date of this press release and conference call, 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 made in this press release and during the conference call are based on information available to the Company as of the date thereof, 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 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 sec.gov or NetSuite's Website.
Non-GAAP Financial Measures
The Company's stated results include certain non-GAAP financial measures, including non-GAAP operating income/(loss), net income/(loss), weighted average shares outstanding, and net income/(loss) per share. Non-GAAP operating income/(loss) and Non-GAAP net income/(loss) excludes expenses related to stock-based compensation expense, amortization of intangible assets and transaction costs for business combinations. Non-GAAP operating income/(loss) and Non-GAAP net income/(loss) excludes these expenses as they are often excluded by other companies to help investors understand the operational performance of their business, and in the case of stock-based compensation, can be difficult to predict. The Company 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 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 Website at netsuite.com/investors. The contents of the Website are not incorporated by reference into this press release.
NetSuite and the NetSuite logo are registered service marks of NetSuite, Inc.
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