SAN MATEO, Calif.—October 21, 2016 —NetSuite Inc. (NYSE: N), the industry's leading provider of cloud financials / ERP and omnichannel commerce software suites, today announced results for its third quarter ended September 30, 2016.
Total revenue for the third quarter of 2016 was $243.9 million, representing a 26% increase over the same period in the prior year.
Recurring revenue from subscription and support was $190.0 million, a 23% increase over the third quarter of last year. Non-recurring revenue from professional services and other was $53.9 million, a 41% increase over the same period in the prior year.
Cash flows from operations were $62.0 million in the third quarter of 2016, a 126% increase over the same period in the prior year.
On a GAAP basis, net loss for the third quarter of 2016 was $34.1 million, or $(0.42) per share, as compared to a net loss of $37.3 million, or $(0.47) per share, in the third quarter of 2015.
Non-GAAP net income for the third quarter of 2016 was $16.1 million, or $0.20 per share, as compared to a non-GAAP net income of $2.6 million or $0.03 per share, in the third quarter of 2015.
Outlook
As with Q2, following the announcement made on July 28, 2016 regarding NetSuite's entry into a definitive agreement to be acquired by Oracle, the Company will not provide outlook for its fourth quarter 2016 financial results. Furthermore, the Company does not expect to achieve its previously-issued full year revenue outlook range of $955 million to $975 million and is withdrawing all previously-issued financial outlook for the full year 2016.
Conference Call Details
Given the announcement made on July 28, 2016 regarding NetSuite's entry into a definitive agreement to be acquired by Oracle, NetSuite will not be hosting a conference call to discuss the third quarter 2016 financial results.
About NetSuite
In 1998, NetSuite pioneered the Cloud Computing revolution, establishing the world's first company dedicated to delivering business applications over the Internet. Today, NetSuite provides a suite of cloud financials/Enterprise Resource Planning (ERP) and omnichannel commerce software that runs the business of more than 30,000 companies, organisations, and subsidiaries in more than 100 countries.
For more information about NetSuite, please visit www.netsuite.co.uk.
Cautionary Note Regarding Forward-Looking Statements
This press release contains 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 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 are based on information available to us 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; 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 one or more of our data centers may occur; a security breach may impact operations; risks associated with material defects or errors in our 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 and effectively scale the organisation; 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; evolving government regulation of the Internet, data privacy and ecommerce; changes to current accounting rules; changes in foreign exchange rates; and general political or destabilising 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 our Annual Report on Form 10-K filed on February 24, 2016 and any subsequently filed reports on Forms 10-K, 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
Our 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 excludes expenses related to stock-based compensation expense, amortisation of intangible assets, transaction costs for business combinations and costs associated with Oracle's pending purchase of NetSuite. Non-GAAP net income excludes expenses related to stock-based compensation expense, amortisation of intangible assets, transaction costs for business combinations, costs associated with Oracle's pending purchase of NetSuite, non-cash interest expense on convertible debt and income tax benefit associated with business combination. 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. We believe these adjustments provide useful comparative information to investors.
We consider these non-GAAP financial measures to be important because they provide useful measures of our operating performance and are used by our 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 our 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 our Investor Relations website at www.netsuite.com/investors. The contents of the website are not incorporated by reference into this press release.
NOTE: NetSuite and the NetSuite logo are registered service marks of NetSuite Inc.