NetSuite Annual Revenue Crosses The Half-Billion-Dollar Threshold

Cloud application vendor NetSuite recorded its seventh straight quarter of 30 percent-plus growth in its fourth quarter -- and the company's burgeoning partner ecosystem has been a major factor in that growth.

"The fourth quarter was a strong finish to the best year in our history," President and CEO Zach Nelson said in a conference call with financial analysts Thursday after the company announced its fourth-quarter and fiscal 2014 financial results. He noted that during the year the company broke through the half-billion-dollar revenue mark "on the road to $1 billion of revenue."

For the fourth quarter ended Dec. 31, NetSuite reported revenue of $157.9 million, up 37 percent from $115.0 million in the fourth quarter of 2013.

[Related: NetSuite Taps Former Microsoft Marketing Exec As New CMO]

The company added more than 500 customers to its client roster during the quarter -- more than any quarter since the company went public in 2007, Nelson said -- bringing the vendor's total customer base to some 24,000.

NetSuite reported a net loss of $25.3 million for the quarter, up 25 percent from a loss of $20.2 million one year earlier, as NetSuite remains focused on growth rather than profitability. But cash flow increased 20 percent to $74.9 million in the quarter, and NetSuite now has roughly $460 million in cash.

"We're going to maintain our focus on adding great people companywide and building out the infrastructure we'll need as a much larger company, even as we continue to invest most aggressively in the product and sales teams," CFO Ron Gill said on the earnings call.

Nelson contrasted NetSuite's results with those of competitors SAP and Microsoft, which he called "leaders in the last generation of software technologies," that have been making the transformation from on-premises and client-server software to cloud computing.

The CEO also acknowledged the role NetSuite's channel partners have played in the company's growth.

"Our success has been greatly aided by an ecosystem of partners, from our growing third-party reseller channels that provide local services and advice to NetSuite customers, to third-party software developers that create add-on solutions that are sold alongside NetSuite to the majority of our new customers, to large systems integrators that help NetSuite deliver to the largest and most demanding customers in the world," he said. "This growing ecosystem is required as tens of thousands of enterprises, nonprofits and multilanguage, multicurrency organizations move to NetSuite to bring their businesses to the cloud and to the future."

This week, NetSuite announced that it recruited Net@Work, a leading national business technology solutions consulting company, to join the NetSuite Solution Provider Program. Net@Work is one of Sage Software's biggest resellers.

In the fourth quarter, 27 percent of NetSuite's revenue was generated outside the U.S., Gill said, and in 2014 the average new business deal size grew 30 percent.

For all of 2014, NetSuite reported sales of $556.3 million, up 34 percent from $414.5 million in 2013. The company's net loss grew 42 percent to $100.0 million.

For the current first fiscal quarter of 2015, NetSuite is forecasting sales in the range of $160 million to $162 million. For all of 2015, sales are expected to be in the range of $715 million to $725 million.

PUBLISHED JAN. 30, 2015