NetSuite reported better-than-expected second quarter earnings as the company grew sales 30 percent from a year ago. NetSuite's sales growth has been at least 30 percent for eight consecutive quarters.
The company delivered a net loss of $23.2 million, or 31 cents a share, in the second quarter on sales of $131.8 million. Non-GAAP earnings were 6 cents a share.
Wall Street was looking for non-GAAP earnings of 3 cents a share on revenue of $131.87 billion.
In a statement, CEO Zach Nelson touted NetSuite's first $100 million recurring revenue quarter as a sign that more companies are moving enterprise resource planning applications to the cloud.
On a conference call with analysts, Nelson was upbeat about NetSuite's latest services resource planning (SRP) suite, which includes project management, billing, analytics, expense, accounting and timesheet management.
We're seeing significant upsell and new customer wins from customers who either bought the entire SRP in the past or bought modules such as advanced projects resource allocation, job costing and budgeting. We're in the process of growing SRP out globally.
As for the outlook, NetSuite projected third quarter revenue between $140 million and $142 million with non-GAAP earnings of 3 cents a share to 4 cents a share. Wall Street was expecting earnings of 8 cents a share on revenue of $140 million. NetSuite's recent acquisition of Venda will dilute earnings somewhat.
For 2014, NetSuite said it expects revenue between $545 million and $550 million with non-GAAP earnings between 24 cents a share and 26 cents a share.
By the numbers:
Subscription and support revenue was $105.85 million with services revenue of $25.94 million.
Product development expenses for the second quarter were $25.37 million, up from $18.8 billion a year ago. Sales and marketing expenses were $69.73 million, up $53.96 million.
Deferred revenue as of June 30 was $247.93 million, up from $211.7 million on Dec. 31.
NetSuite ended the quarter with $479.2 million in cash and equivalents.