The 10-second takeaway
For the quarter ended June 30 (Q2), NetSuite met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly. Non-GAAP earnings per share shrank. GAAP loss per share expanded.
Margins dropped across the board.
NetSuite chalked up revenue of $101.0 million. The 24 analysts polled by S&P Capital IQ predicted net sales of $100.6 million on the same basis. GAAP reported sales were 35% higher than the prior-year quarter's $74.7 million.
EPS came in at $0.05. The 24 earnings estimates compiled by S&P Capital IQ predicted $0.02 per share. Non-GAAP EPS of $0.05 for Q2 were 17% lower than the prior-year quarter's $0.06 per share. GAAP EPS were -$0.28 for Q2 against -$0.14 per share for the prior-year quarter.
For the quarter, gross margin was 66.9%, 280 basis points worse than the prior-year quarter. Operating margin was -18.4%, 780 basis points worse than the prior-year quarter. Net margin was -20.2%, 690 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $105.0 million. On the bottom line, the average EPS estimate is $0.08.
Next year's average estimate for revenue is $408.0 million. The average EPS estimate is $0.26.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 241 members out of 335 rating the stock outperform, and 94 members rating it underperform. Among 97 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 71 give NetSuite a green thumbs-up, and 26 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on NetSuite is outperform, with an average price target of $81.50.
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