In its recently released Q2 financial results for 2014 NetSuite revenue has gone up by $100m for the quarter. Overall though, the enterprise solutions company reported a net loss of over $23m.
The 2014 Q2 earnings represent a 30% increase over the previous year’s Q2 Netsuite revenue numbers, for a total earning of $131.8m. Net losses however, also increased – by $3m – from the 2013 numbers
NetSuite’s Spending Habits Contribute to Its Q2 Losses
These net losses could be attributed to several factors, chief among them NetSuite’s recent acquisition of Venda. On a conference call, Ronald Gill, NetSuite CFO revealed that the acquisition cost the company more than $50m in a combination of cash and stocks. Other loss sources include a $60m budget applied to sales and marketing.
A significant portion of that sales and marketing expenditure was the company’s SuiteWorld event. In defense of that vast outlay, Gill remarked, “The team did a good job of managing that spend and strong attendance and partnership participation helped offset the cost as well.”
Despite the large net losses, NetSuite offered the big uptick in Netsuite revenues, including a 19% increase in operating cash flow as proof the company is on target.
NetSuite CEO: The Cloud-based Enterprise Solutions We Offer Will Power Us to Reach Our Netsuite Revenue Goals
Zach Nelson, CEO of NetSuite, touted the $100m recurring Netsuite revenue as a “break-out moment”. In his mind the company’s future earnings will be propelled by its central offering which is delivering a complete cloud-based operations solution for businesses of all sizes. In his words, “We are well on our way [to] achieving our goal to be the leading provider of next-generation business systems and to achieve $1bn and beyond in annual revenue,” added Nelson.
Nelson’s predictions aren’t entirely based on prognostication. Other outlets have found that “The Cloud” is powering the healthy second-quarter Netsuite revenues of several companies, including retail giant Amazon.