Despite the pressure on IT spending, NetSuite (NYSE: N) posted a fairly solid Q1 on Monday. Revenues came to $41.6 million, up 22% over the past year. There was also a net loss of $3.7 million, or 6 cents per share. Although, NetSuite showed a $3.1 million improvement in cash flows (compared to Q4 last year).
The fact that NetSuite has shown any growth is an achievement. That is, if you look at the general market for enterprise resource planning (ERP) software companies, the results have been lackluster.
Keep in mind that NetSuite has a disruptive business model. Basically, the software is on-demand and it is easier to provide updates as well as offer lower price points. It also helps that the software can integrate with other legacy ERP systems (because of its subsidiary management and business consolidation capabilities).
Although, Wall Street is selling shares of NetSuite on the news -- with the stock price down 16% to $12. Then again, the stock has spiked recently.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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