NetSuite Q2 fares well with 192% increase in net income

Summary:UPDATED: NetSuite raises full-year outlook for revenue and earnings.

Overall, NetSuite's second quarter was nothing to complain about.

First, the cloud management software provider reported a net loss of $9.9 million, or 14 cents a share, for the second quarter (statement) on a GAAP basis.

But NetSuite really fared better when looking at earnings on a non-GAAP basis, with that net income rising 192 percent year-over-year to $4.8 million, or 6 cents a share -- up from $1.6 million the same time last year.

That's on top of a revenue of $74.7 million, a 29 percent increase from Q2 2011.

Wall Street was expecting NetSuite to report profit of 4 cents a share on a revenue of $73.38 million.

Much like Western Digital executives boasted on Wednesday, NetSuite CEO Zach Nelson commented in prepared remarks that Netsuite shined in a "quarter that saw many enterprise software companies struggle."

We saw continued improvements across our financial metrics and exceeded our previously stated outlook on revenue, cash flow and non-GAAP EPS significantly.  And the continued execution against our core strategies allows us to increase our full-year outlook for revenue and non-GAAP EPS.

For the outlook, NetSuite executives will provide guidance for the third quarter of 2012 during a conference call this afternoon.

Q2, by the numbers:

  • Subscription and support revenue was $61.0 million, a 27 percent increase on an annual basis
  • Cash flows from operations were $15.2 million, up by 80 percent from Q2 2011

UPDATE: NetSuite executives waited until the quarterly conference call on Thursday afternoon to provide guidance for the third quarter of 2012.

Chief financial officer Ron Gill announced that NetSuite is projecting a revenue of $77.5 million to $78 million for the third quarter of 2012 with non-GAAP earnings between 5 and 6 cents per share.

For 2012 overall, NetSuite raised its outlook significantly. The original forecast was revenue falling between $295 million to $300 million with earnings between 19 and 21 cents per share.

NetSuite is now expecting earnings of 21 to 22 cents per share on a revenue falling between $300 million and $305 million.

Topics: Tech Industry, Cloud, Enterprise Software


Rachel King is a staff writer for CBS Interactive based in San Francisco, covering business and enterprise technology for ZDNet, CNET and SmartPlanet. She has previously worked for The Business Insider,, CNN's San Francisco bureau and the U.S. Department of State. Rachel has also written for, Irish Americ... Full Bio

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