NetSuite: Global Leader in Cloud ERP



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Transcription:

NetSuite: Global Leader in Cloud ERP NYSE : N As of April 28, 2015

Safe Harbor Statement This presentation contains forward-looking statements that involve risks, uncertainties and assumptions relating to expectations, plans, and prospects including expectations relating to NetSuite s future growth and the future growth of the cloud computing market. These statements are based on information available to NetSuite management at the time of this presentation. Actual results could differ materially from our current expectations as a result of many factors, including, but not limited to: the market for on-demand services may develop more slowly than expected or than it has in the past; and adverse or unpredictable macro-economic conditions or reduced investments in on-demand applications and information technology spending. These and other risks and uncertainties associated with our business are described in our annual report on Form 10-K for the period ending December 31, 2014 and any subsequently filed periodic reports on Form 10-K or 10-Q. We assume no obligation to, and do not intend to, update any forward looking statements. Customers who purchase our services should make sure that their decisions are based on features that are currently available. Please be advised that any unreleased services or features from NetSuite referenced in this presentation or other public statements are not currently available and may not be delivered on time or at all. 2

Investment Highlights The World s Leading Pure-play Software-as-a-Service (SaaS) Provider of ERP Software Suites - >24,000 customer organizations across 160+ countries Large and Expanding Addressable Market - ERP has largest TAM of any business app category - Suite approach expands TAM to multiple categories Decade of Sustained Revenue Growth - 12+ year head-start, not even a close #2 - Powerful SaaS financial model; high visibility; strong renewals Winning Growth Strategy - Verticalization of the suite - Moving up market and going global with OneWorld - Platform Expanded to OmniChannel with SuiteCommerce - Large and growing partner ecosystem 3

Software-As-A-Service (SaaS) Adoption Disrupting Enterprise Software Landscape 40% Fiscal YOY Revenue Growth % 35% 34% 32% 30% 25% 24% 20% 15% 16% 16% 13% 13% 10% 5% 8% 8% 7% 5% 4% 3% 3% 0% Source: Companies with dark blue bars represent the thirteen largest enterprise software vendors by total annual revenue according to Gartner March 2014 report; listed in order of respective growth rates YoY Revenue growth figures are based on Bloomberg data consensus estimates for company s current year as of January 29, 2015 4

NetSuite: World s #1 Cloud ERP Background Founded 1998; IPO in 2007 Publicly traded on NYSE: N 3,500+ employees Offices in 12 countries $556.3M revenue in FY14 Performance World s most deployed cloud ERP Used by >24,000 organizations Fastest growing top 10 Financial Management Software Worldwide Used across 160+ countries #1 Cloud ERP Suite 5

NetSuite: Fastest Growing Top 10 Financial Management System Vendor Worldwide 60.0% Top 10 WW FMS Vendors: 2014 YoY Market Share Growth Rate % 50.0% 40.0% 30.0% 20.0% 46.6% NetSuite is the only pure Cloud vendor in Top 20 NetSuite is #8 overall by Market Share 10.0% 0.0% -10.0% 7.5% 4.5% 1.6% Market Share: All Software Markets, Worldwide, 2014, Published on March 28, 2015 Chart created by NetSuite based on Gartner Market Share Note -1.3% -1.4% -1.8% -3.0% -6.7% -6.8% NetSuite Deltek Unit4 Microsoft Infor Sage SAP Yonyou Oracle Visma Software 6

In Billions Cloud Opportunity: The Big Land Grab Massive Market Opportunity $40 ERP $20 $25 $27 $29 $31 $33 $0 2013 2014 2015 2016 2017 Source: Gartner, Total Enterprise Software Markets Worldwide, 1Q14 Update Rapid Cloud ERP Growth HR 7% Cloud Payments 13% CRM 16% Cloud Advertising 17% ERP 23% 0% 5% 10% 15% 20% 25% Source: Gartner, Feb 2013, Public Cloud Service Subsegment, CAGR% (2011-16) 4x Faster growth than worldwide IT market Cloud is the Future Sources: Gartner 2011 CIO Survey; Forrester The ROI of Cloud Apps, June 2011; IDC WW and Regional Public IT Cloud Service Forecast 2011-15 Fortune 5 Million: US Enterprise & Mid-Market SMBs Enterprise >1,000 employees ~9,000 firms Mid-Market 100-1,000 employees ~116,000 firms Small <100 employees ~6,000,000 Source: BofA Report, The Cloud Wars, May 2013 50+ % #1 Of companies plan to increase cloud spend over next 12 months Technology affecting IT Target Market 7

NetSuite SuiteCommerce: Addresses Accelerating Global Shift to Ecommerce Global Ecommerce Sales Forecast: 2012-2016 % = Year-over-Year Growth Rate (in $billions) 2012 2013 2014 2015 2016 $1,600 $1,400 $1,200 US Ecommerce US Europe 16% 16% 15% 13% 12% 9% 15% 15% 13% 12% $1,000 Europe Ecommerce China 45% 43% 30% 20% 17% $800 $600 China Ecommerce Latam Ecommerce Latam 11% 14% 11% 9% 9% $400 ROW Ecommerce ROW 107% 17% 16% 15% 15% $200 ROW = Australia, Japan, Russia, India and Other ROW $0 2012 2013 2014 2015 2016 Source: BAML Ecommerce /Industry Forecast, Dec 2013 8

A Decade in Cloud Leadership In Millions $800 $700 $720M Outlook** $600 $556 $500 $415 $400 $309 $300 NetSuite IPO $236 $193 $200 $153 $167 $109 $100 $67 $36 $8 $18 $0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E NetSuite Fiscal Year Annual Revenue (M) **Midpoint of the range of FY2015 outlook of $715 to $725 million provided on NetSuite s Q1 2015 earnings call as of April 23, 2015 9

Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Accelerating Recurring Revenue In Millions $140 $447.8M 34% YoY $120 $333.6M $100 $252.9M 32% YoY $80 $60 $40 $139.1M 16% YoY $163.9M 18% YoY $199.6M 22% YoY 27% YoY $20 $ NetSuite Annual Recurring Revenue Growth 10

Leading Businesses Choose NetSuite Total # of Companies, Subs and Organizations (NetSuite Customers) Leading Brands Across Industries 30,000 25,000 >24,000 20,000 15,000 10,000 10,000 12,000 16,000 20,000 5,000 0 2010 2011 2012 2013 2014 Source: NetSuite public disclosure of customer count 11

Best Known Brands Run NetSuite Selected NetSuite OneWorld for business management in subsidiaries and emerging markets. Expanded to international markets with NetSuite OneWorld in under four months. Girl Scouts has made NetSuite SuiteCommerce central to its strategy to grow its online business while delivering a cohesive Web experience for all customers. Saving $360,000 annually on IT costs over on-premise ERP, and reduced order management response times more than sixteen-fold. Using NetSuite across 2,700+ users in 15+ countries and across 3,000+ client projects and 1,500+ products and skills. 12

NetSuite Solution

Today s Businesses Struggle with an Application Hairball 14

NetSuite: One System for Running a Business External Systems Customers CEO ERP SRP CFO Shipping Manager WAREHOUSE MANAGEMENT INVENTORY MANAGEMENT CORE BUSINESS CUSTOMER MANAGEMENT ORDER MANAGEMENT GLOBAL FINANCIAL MANAGEMENT BILLING MANAGEMENT REVENUE MANAGEMENT PROJECT MANAGEMENT RESOURCE MANAGEMENT Sales Rep/ Manager Ecommerce Manager MANUFACTURING SUPPLY CHAIN MANAGEMENT PROJECT ACCOUNTING TIME & EXPENSE Support Manager 15 Vendors Partners

Solution Overview NetSuite: Modular cloud business suite - ERP, CRM, Ecommerce, PSA - For midsize companies to large enterprises NetSuite OneWorld: Global management NetSuite SuiteCommerce: Ecommerce NetSuite OpenAir: Enterprise PSA NetSuite SuiteCloud Platform 16

Global Business Management The Undisputed Cloud ERP Leader NetSuite is the most successful ERP suite SaaS provider operating in terms of active customers, international presence and functionality offered across the product. Source: Gartner 17

Local Currency Quota Forecast Orders Taxation Partners Language Website Global Consolidation Sales Revenue Dashboards Currency Management Compliance Control Multiple Websites 19+ Languages, 190+ Currencies 18

Why Businesses Choose NetSuite Last ever ERP upgrade No version-lock Eliminates application hairball Deploys in months, not years Modern, flexible and evolving Dramatically lowers IT cost 19

Enterprise Opportunity: Two-Tier

The Two-Tier Opportunity A tiered ERP suite strategy is the use of ERP suites from different vendors in two or more levels of the organization for example, corporate headquarters and local subsidiary operations. 1 The concept of a single ERP suite that meets all of an enterprise's needs, particularly in large, complex and diverse organizations, is no longer tenable. 2 Adopting a two-tier ERP strategy can dramatically reduce regional business unit implementation times, provide greater agility and improve operational costs. CIOs understanding its definition, the rationale for selection and the diverse deployment options is key to a successful implementation. 3 Rise of the Two-Tier 48% enterprises now opting for two-tier 24% 48% 2009 2011 1: Source: Develop a Strategic Road Map for Postmodern ERP in 2013 and Beyond 2: Source: How to Evaluate a Vendor's Commitment to the Cloud and SaaS 3: Source: Understand the Deployment Options for a TwoTier ERP Suite Strategy, May 2013 21

NetSuite s Two-Tier Solution NetSuite Cloud Running NetSuite OneWorld NetSuite Cloud Running NetSuite OneWorld CORPORATE Running Oracle/SAP E-Business Suite Financials SuiteCloud Connect Worldwide Operations US Operations China Vietnam 22

Two-Tier: Driving Business Velocity Emerging Markets & Products: Rapidly deploy ERP with minimal CapEx and IT Mergers and Acquisitions: Cost effective ERP within subsidiaries Divestitures: Shed legacy ERP with lean, customizable cloud ERP 23

Enterprise Partnerships to Drive Success Accenture s unmatched industry expertise and NetSuite s sophisticated cloud leadership pave the way forward for global enterprises. Paul Daugherty Chief Technology Architect 24

SuiteCommerce

Commerce is Changing Every Industry Retail: Omnichannel as a matter of survival Manufacturing: Direct access to customers - Sell B2B, B2C, retail, on marketplaces Wholesale Distributor: B2B, digital supply chain and B2C Software: Subscription management, Usage-based billing Services: Unified billing, Internet and new media Products are becoming services 26

Transforms the NetSuite Operational System Into a Commerce Platform That Provides Complete Flexibility to: Support Multiple Touchpoints Support Any Business Model Integrate the Back-office Commerce Operation Innovate Rapidly to Embrace an Ever-changing Landscape 27

SuiteCommerce Powers Global Expansion of Omnichannel 28

Financial Highlights

Q1 2015 Financial Highlights Record Q1 2015 revenue of $164.8 Million, a 34% increase Year-over-Year Record Q1 2015 recurring revenue of $133.0 Million, a 34% increase Year-over-Year Record Q1 Operating Cash Flow of $28.0 Million, a 46% increase Year-over-Year Eight consecutive quarters of more than 30% Yearover-Year recurring revenue growth Note: Reconciliation of Non-GAAP measures to the comparable GAAP measures are available in the quarterly results press releases which can be found on NetSuite s website in the investor relations section. 30

Key Financial Trends Non-GAAP Net Income ($ Millions) Non-GAAP Recurring Revenue Gross Margin % $30.0 $25.0 $20.0 $15.0 $10.0 $5.0 $3.4 $8.5 $10.8 $19.1 $19.9 $25.0 100.0% 80.0% 60.0% 40.0% 20.0% 84.3% 85.8% 85.2% 85.3% 85.3% 85.8% $0.0 2009 2010 2011 2012 2013 2014 0.0% 2009 2010 2011 2012 2013 2014 Total Deferred Revenue ($ Millions) $350.0 $300.0 $250.0 $200.0 $150.0 $100.0 $50.0 $0.0 $161.4 $72.7 $81.1 $111.7 $224.6 $314.5 2009 2010 2011 2012 2013 2014 Cash Flow from Operations ($ Millions) $74.9 $80.0 $62.2 $60.0 $54.3 $36.3 $40.0 $18.2 $20.0 $4.7 $0.0 2009 2010 2011 2012 2013 2014 Note: Reconciliation of Non-GAAP measures to the comparable GAAP measures are available in the quarterly results press releases which can be found on NetSuite s website in the investor relations section. 31

Q2 15 and FY2015 Outlook Q2 2015 FY2015 Revenue $170M to $172M $715M to $725M Non-GAAP EPS $0.03 to $0.04 $0.32 Operating Cash Flow $20M to $22M $90M to $95M Q2 15 and FY2015 Outlook ranges provided on NetSuite s Q1 2015 earnings call as of April 23, 2015. Note: Reconciliation of Non-GAAP measures to the comparable GAAP measures are available in the quarterly results press releases which can be found on NetSuite s website in the investor relations section. 32

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