NetSuite Announces Fourth Quarter and Fiscal 2009 Financial Results


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Reports Record Revenue of $43.0 Million for the Fourth Quarter of 2009

SAN MATEO, Calif. – February 4, 2010 – NetSuite Inc. (NYSE: N), a leading vendor of cloud computing business management software suites, today announced operating results for its fourth quarter and fiscal year ended December 31, 2009.

Total revenue for the year was $166.5 million, a year-over-year increase of
9%. Total revenue for the fourth quarter was $43.0 million. Revenue from
the Americas for the fourth quarter of 2009 was $35.0 million, while revenue
from international regions was $8.0 million. NetSuite added approximately
295 new customers in the fourth quarter.

On a GAAP basis, net loss for the fourth quarter of 2009 was $6.5 million,
or $(0.10) per share, compared to a net loss of $4.5 million, or $(0.07) per
share in the fourth quarter of 2008. On a GAAP basis, net loss for the year
ended December 31, 2009 was $23.3 million, or $(0.38) per share, compared to
a net loss of $15.9 million, or $(0.26) per share in 2008. GAAP operating
loss for the year ended December 31, 2009 was $23.5 million, compared to a
GAAP operating loss of $18.4 million in 2008.

Non-GAAP net income for the fourth quarter of 2009 was $1.3 million, or
$0.02 per share, as compared to a non-GAAP net income of $534,000, or $0.01
per share, for the fourth quarter of 2008. Non-GAAP net income for the year
ended December 31, 2009 improved 236% to $3.4 million, or $0.05 per share,
compared to a non-GAAP net loss of $2.5 million, or $(0.04) per share in
2008. Non-GAAP operating income for the year ended December 31, 2009 was
$3.2 million, compared to a non-GAAP operating loss of $5.0 million in 2008.

Items presented on a non-GAAP basis exclude expenses related to stock-based
compensation, the amortization of intangible assets, and transaction costs
for business combinations. A reconciliation of GAAP net income/(loss) to
non-GAAP net income/(loss) and GAAP operating income/(loss) to non-GAAP
operating income/(loss) is provided below in a table immediately following
the Condensed Consolidated Statements of Operations, along with an
explanation of why these non-GAAP financial measures are useful to investors
and how they are used by management.

“In a year that saw many of our ERP competitors’ sales decline, NetSuite
achieved record financial results,” said Zach Nelson, CEO of NetSuite. “Our
ten year head start in delivering cloud computing business applications
bodes well for us in 2010 as companies continue to move their core business
applications from 1990’s style client-server offerings to NetSuite solutions
that have cloud computing at their core.”

Conference Call

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 2009 financial results. 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 Web site at The live call can be accessed by dialing
877-419-6593 (U.S.) or 719-325-4793 (outside the U.S.) and referencing
passcode: 319-4008. 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: 319-4008.

About NetSuite
NetSuite Inc. is a leading vendor of cloud computing business management
software suites for mid-sized businesses and divisions of large enterprises.
NetSuite enables companies to manage core key business operations in a
single system, which includes accounting/ERP, customer relationship management (CRM), and
Ecommerce. NetSuite’s patent-pending “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

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 stated
expectation for 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
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 during the
conference call will be 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; 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; 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 13, 2009, 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

Wl0ZS5jb20*&url=> or NetSuite’s Web site at


Non-GAAP Financial Measures
The Company’s stated results include certain non-GAAP financial measures,
including non-GAAP operating income/(loss), net income/(loss), weighted
average shares outstanding, and net income/(loss) per share. Non-GAAP net
income/(loss) excludes expenses related to stock-based compensation expense,
amortization of intangible assets and transaction costs for business
combinations. Non-GAAP net income/(loss) excludes 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

Wl0ZS5jb20*&url=> The contents of the Web site are not
incorporated by reference into this press release.

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