NetSuite hits numbers, plays whack-a-mole with SAP

by admin on May 4, 2010

in Cloud Computing/SaaS

Earnings calls are usually such dull affairs with corporate executives rarely straying far from the script. NetSuite calls on the other hand are increasingly becoming something which one can look forward to in the certain knowledge CEO Zach Nelson of NetSuite will have a crack at any of Oracle/SAP or Microsoft. This last quarter’s term report was a great example of how you deliver on Wall Street’s expectations and then use that to clobber the opposition. First up – the numbers:

NetSuite delivered a credible if not wholly exceptional quarter, broadly in line with market analyst expectations. From the release:

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.

Unusually for a public company, NetSuite kept the numbers element of the webcast short giving Nelson time to lace into SAP and Microsoft. Among other gems, he said: “Microsoft announced a bizarre offering to wind the clock back 15 years.” Of SAP he referred to Bill McDermott’s appearance on Reuters where he said that SAP was about to deliver a 99 mile an hour curve ball aimed at NetSuite. That’s a reference to Business ByDesign. Continuing the baseball metaphor in regard to customer numbers, Nelson said: “The current score is NetSuite 6,600, SAP 100″ and in regard to SAP validating the market, he added: “I’d like to thank SAP for being our IBM.” All good knockabout stuff.

There was one comment which, while said in jocular tones has the ring of truth: “NetSuite is causing irrational behavior among competitors.” That’s an interesting take and reflective of some of the things I’ve heard privately about Sage’s response to Kashflow’s continued barbs. It is coming to something when giants are goaded into making statements or taking actions that the little guys can use to their advantage. And a little humour along the way always adds a touch of much needed spice to the otherwise dull world of enterprise computing.

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