The 10-second takeaway
For the quarter ended March 31 (Q1), NetSuite met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased significantly. Non-GAAP earnings per share contracted. GAAP loss per share grew.
Margins contracted across the board.
NetSuite booked revenue of $91.6 million. The 23 analysts polled by S&P Capital IQ hoped for a top line of $91.0 million on the same basis. GAAP reported sales were 32% higher than the prior-year quarter's $69.3 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.04. The 23 earnings estimates compiled by S&P Capital IQ averaged $0.03 per share. Non-GAAP EPS of $0.04 for Q1 were 33% lower than the prior-year quarter's $0.06 per share. GAAP EPS were -$0.18 for Q1 compared to -$0.11 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 67.6%, 240 basis points worse than the prior-year quarter. Operating margin was -14.4%, 410 basis points worse than the prior-year quarter. Net margin was -14.2%, 310 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $98.2 million. On the bottom line, the average EPS estimate is $0.02.
Next year's average estimate for revenue is $406.6 million. The average EPS estimate is $0.27.
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 234 members out of 326 rating the stock outperform, and 92 members rating it underperform. Among 87 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 59 give NetSuite a green thumbs-up, and 28 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on NetSuite is hold, with an average price target of $73.83.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool recommends Netsuite. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.