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NetSuite Announces Fourth Quarter and Fiscal 2011 Financial Results
Feb 02, 2012 (03:02 PM EST)
- Record Q4 Revenue of $64.1 Million, a 23% Year-over-Year Increase
- Record 2011 Revenue of $236.3 Million, 22% Growth over Prior Year
- Q4 Calculated Billings Grow 36% Year-over-Year
- Record 2011 Operating Cash Flow of $36.3 Million, 99% Growth over Prior Year
SAN MATEO, Calif., Feb. 2, 2012 /PRNewswire/ -- NetSuite Inc. (NYSE: N), the industry's leading provider of cloud-based financials / ERP software suites, today announced operating results for its fourth quarter and fiscal year ended December 31, 2011.
Total revenue for the fourth quarter of 2011 was $64.1 million, representing a 23% increase over the prior year. Subscription and support revenue for the fourth quarter was $54.2 million, representing 23% growth over the same period in the prior year. Total revenue for the year was $236.3 million, a year-over-year increase of 22%.
Calculated billings, defined as revenue plus the change in deferred revenue, were $78.8 million for the quarter, a 36% increase over the fourth quarter of 2010. For the year, calculated billings were $266.9 million, an increase of 32% over 2010.
Cash flow from operations was $11.7 million in the fourth quarter of 2011, an increase of $7.1 million, or 156%, over the same period last year. Cash flow from operations was $36.3 million for the year, an increase of $18.0 million, or 99%, over the prior year.
On a GAAP basis, net loss for the fourth quarter of 2011 was $7.6 million, or $(0.11) per share, as compared to a net loss of $6.4 million, or $(0.10) per share, in the fourth quarter of 2010. GAAP net loss for the year ended December 31, 2011 was $32.0 million, or $(0.48) per share, as compared to a GAAP net loss of $27.5 million, or $(0.43) per share, in 2010.
Non-GAAP net income for the fourth quarter of 2011 was $3.4 million, or $0.05 per share, as compared to non-GAAP net income of $2.8 million, or $0.04 per share, in the fourth quarter of 2010. Non-GAAP net income for the year ended December 31, 2011 was $10.8 million, or $0.15 per share, as compared to non-GAAP net income of $8.5 million, or $0.13 per share, in 2010.
"NetSuite's Q4 showed the benefit of being the disrupter rather than a disruptee, as our Cloud Computing suite continued to take market share from traditional mid-market and enterprise ERP vendors. The acceleration of our business that we saw throughout the year continued into Q4, and we turned in a Q4 that could be considered our best quarter ever as a public company," said Zach Nelson, CEO of NetSuite. "As we enter 2012, I believe we are the best positioned company to benefit from the shift to the Cloud as customers abandon aging mission critical systems designed before the Web existed and move to NetSuite."
In conjunction with this announcement, NetSuite will host a conference call at 2:00 p.m. PST (5:00 p.m. EST) today to discuss the Company's fourth quarter and fiscal 2011 financial results, and our outlook for the first quarter and fiscal 2012. 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 www.netsuite.com/investors. The live call can be accessed by dialing 888-287-5529 (U.S.) or 719-325-2482 (outside the U.S.) and referencing passcode: 6557474. 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: 6557474.
NetSuite Inc. is the industry's leading provider of cloud-based financials / Enterprise Resource Planning (ERP) software suites. In addition to financials/ERP software suites, NetSuite offers a broad suite of applications, including accounting, Customer Relationship Management (CRM), Professional Services Automation (PSA) and Ecommerce that enables companies to manage most of their core business operations in its single integrated suite. NetSuite's "real-time dashboard" technology provides an easy-to-use view into up-to-date, role-specific business information. For more information about NetSuite, please visit www.netsuite.com.
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 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; assertions by third parties that we infringe their 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; 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; changes in foreign exchange rates, 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 3, 2011, 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's stated results include certain non-GAAP financial measures, including non-GAAP operating income, net income, weighted average shares outstanding, and net income per share. Non-GAAP operating income and non-GAAP net income exclude expenses related to stock-based compensation expense, amortization of intangible assets, transaction costs for business combinations and costs associated with the settlement of a patent dispute. Non-GAAP operating income and non-GAAP net income exclude 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 Web site at www.netsuite.com/investors. The contents of the Web site are not incorporated by reference into this press release.
NOTE: NetSuite and the NetSuite logo are service marks of NetSuite Inc.
Use of Non-GAAP Financial Measures
To supplement our condensed consolidated financial statements presented on a GAAP basis, NetSuite uses non-GAAP measures of operating income, net income, weighted average shares outstanding and net income per share, which are adjusted to exclude stock-based compensation expense, amortization of acquisition-related intangible assets, transaction costs for business combinations and costs associated with the settlement of a patent dispute and includes dilutive shares where applicable. We believe these adjustments are appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future. These adjustments to our current period GAAP results are made with the intent of providing both management and investors a more complete understanding of NetSuite's underlying operating results and trends and our marketplace performance.
The non-GAAP results are an indication of our baseline performance that are considered by management for the purpose of making operational decisions. In addition, these non-GAAP results are the primary indicators management uses as a basis for our planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for operating loss, net loss or basic and diluted net loss per share prepared in accordance with generally accepted accounting principles in the United States. Non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles and are subject to limitations.
While a large component of our expense in certain periods, we believe investors may want to exclude the effects of these items in order to compare our financial performance with that of other companies and between time periods:
SOURCE NetSuite Inc.