NetSuite: Global Leader in Cloud ERP · Cloud ERP Leader Source: Gartner NetSuite is the most...

NetSuite: Global Leader in Cloud ERP NYSE : N

Updated as of April 28, 2014

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, 2013 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.

Safe Harbor Statement

© NetSuite Inc. 2014 2

Investment Highlights

The World’s Leading Pure-play Software-as-a-Service (SaaS) Provider of ERP

Software Suites

– >20,000 customer organizations across 100+ 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


35% 34%

17% 15%

13% 13% 12%

10% 10% 10% 10%

6% 4% 4%

0%

5%

10%

15%

20%

25%

30%

35%

40%

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

Revenue growth figures have been retrieved from the publicly filed annual reports of the above companies

Consensus estimates have been used for those companies yet to report FY13 results.

Software-As-A-Service (SaaS) Adoption

Disrupting Enterprise Software Landscape

FY 2013 YOY Revenue Growth %


Background

NetSuite: World’s #1 Cloud ERP

Founded 1998; IPO in 2007

Publicly traded on NYSE: “N”

2500+ employees

Offices in 11 countries

$414M revenue in FY13

World’s most deployed cloud ERP

Used by 20,000+ organizations

Fastest growing top 10 Financial

Management Software Worldwide

Used across 100+ countries


Performance

#1 Cloud ERP Suite

41.6%

11.5% 7.7%

5.2% 5.3% 0.9% 0.0% 0.0% -1.5% -4.0%

-10%

0%

10%

20%

30%

40%

50%

NetSuite Unit4 VismaSoftware

Microsoft Deltek Sage InforGlobal

Solutions

Yonyou SAP Oracle

Top 10 WW FMS Vendors: 2013 YoY Market Share Growth Rate %

• NetSuite is the only pure Cloud vendor in Top 20

• NetSuite is #10 overall by Market Share

Market Share: All Software Markets, Worldwide, 2013, Published on March 28, 2014

Chart created by NetSuite based on Gartner Market Share Note

NetSuite: Fastest Growing Top 10 Financial

Management System Vendor Worldwide


Source: Gartner, WW Enterprise Application Market Q4’13

23%

17%

16%

13%

7%

0% 10% 20% 30%

ERP

Cloud Advertising

CRM

Cloud Payments

HR

Cloud is the Future

Source: BofA Report, The Cloud Wars, May 2013

Enterprise

>1,000 employees

Mid-Market

100 - 1,000 employees

Small

<100 employees

~9,000 firms

~116,000 firms

~6,000,000

Fortune 5 Million:

US Enterprise & Mid-Market SMBs

Target

Market

$17 $18 $19 $20 $21 $23

$7 $8 $8 $9 $9 $10 $18 $21 $24

$27 $30

$36

$0

$20

$40

$60

$80

2012 2013 2014 2015 2016 2017

ERP HCM CRM

Massive Market Opportunity

Source: Gartner, Enterprise Application Market, 2013

In B

illi

on

s

Source: Gartner, Feb 2013, Public Cloud Service Subsegment, CAGR% (2011-16)

Cloud Opportunity: The Big Land Grab

Rapid Cloud ERP Growth


Forecast: US Online Retail Forecast, 2010 To 2015

2009 2010

% change

February 2011 “US Online Retail Forecast, 2010 To 2015”

2011 2012 2013 2014 2015

$259

$279

$240 $218

$197

$176 $157

(in billions)

Source: Forrester Research Online Retail Forecast , 2010 To 2015 (US)

11% 13% 12% 10% 10% 8% 8%

8% 8% 9% 10% 10% 11% 11%

11% 11% 12% 13% 14% 15% 15%

NetSuite SuiteCommerce:

Addresses Accelerating Move to Online Retail


% of total retail

% of total retail

(excluding grocery)

$8 $18 $36

$67

$109

$153 $167

$193

$236

$309

$415

$542.5M

$0

$100

$200

$300

$400

$500

$600

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Outlook*

NetSuite IPO

In Millions

NetSuite Annual Revenue (M)

*Midpoint of FY2014 outlook range of $540M - $545M reported on April 28, 2014 NetSuite conference call

Decade of Sustained Revenue Growth


Accelerating Recurring Revenue

NetSuite Recurring Revenue Growth


18% YoY

22% YoY

27% YoY

32% YoY

16% YoY

$139.1M

$163.9M

$199.6M

$252.9M

$333.6M

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

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

Leading Businesses Choose NetSuite

10,000

12,000

16,000

>20,000

0

5,000

10,000

15,000

20,000

25,000

2010 2011 2012 2013

Source: NetSuite public disclosure of customer count


Total # of Companies, Subs and Organizations (NetSuite Customers)

Leading Brands Across Industries

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.


NetSuite Solution

Today’s Businesses Struggle with

an Application Hairball


NetSuite: One System for Running a Business


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



The Undisputed

Cloud ERP Leader

Source: Gartner

NetSuite is the most

successful ERP suite SaaS

provider operating in terms of

active customers, international

presence and functionality

offered across the product.

Global Business Management

Currency

Quota

Forecast

Orders

Taxation

Partners

Language

Website

LOCAL

Consolidation

Sales

Revenue

Dashboards

Currency

Management

Compliance

Control

Multiple Websites

GLOBAL

19+ Languages, 190+ Currencies


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


Enterprise Opportunity:

Two-Tier

The Two-Tier Opportunity:

The Rise of Two-Tier

2009 2011

60

50

40

30

20

10

0

enterprises now opting

for two-tier

48%

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

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

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

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


NetSuite’s Two-Tier Solution

China Vietnam

Worldwide

Operations

CORPORATE Running Oracle/SAP

E-Business Suite Financials

US Operations

NetSuite Cloud Running

NetSuite OneWorld SuiteCloud

Connect

NetSuite Cloud Running

NetSuite OneWorld


Two-Tier: Driving Business Velocity


Divestitures:

Shed legacy ERP with lean, customizable cloud ERP

Mergers and Acquisitions:

Cost effective ERP within subsidiaries

Emerging Markets & Products:

Rapidly deploy ERP with minimal CapEx and IT

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

SuiteCommerce

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

Commerce is Changing Every Industry


Support Multiple Touchpoints

Support Any Business Model

Innovate Rapidly to Embrace an Ever-changing Landscape

Integrate the Back-office Commerce Operation

Transforms the NetSuite Operational System Into a

Commerce Platform That Provides Complete Flexibility to:


SuiteCommerce Powers Global Expansion of

Omnichannel


Financial Highlights

Q1 2014 Financial Highlights

Record Q1 2014 revenue of $123.0 million, a 34% increase Year-

over-Year.

Record Q1 2014 operating cash flow of $19.1 million, a 30%

increase Year-over-Year

Non-GAAP net income for the first quarter of 2014 was $4.4

million, or $0.06 per share, as compared to non-GAAP net income

of $2.8 million, or $0.04 per share, in the first quarter of 2013.


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.

Key Financial Trends

$3.4

$8.5 $10.8

$19.1 $19.9

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

2009 2010 2011 2012 2013

Non-GAAP Net Income ($ Thousands)

$4.7

$18.2

$36.3

$54.3

$62.2

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

2009 2010 2011 2012 2013

Cash Flow from Operations ($ Thousands)

$66 $76

$106

$154

$212

$0

$50

$100

$150

$200

$250

2009 2010 2011 2012 2013

Short-Term Deferred Revenue ($ Thousands)

31

84.3% 85.8% 85.2% 85.3% 85.3%

0.0%

50.0%

100.0%

2009 2010 2011 2012 2013

Non-GAAP Recurring Revenue Gross Margin %



Q2 2014 And FY 2014 Outlook

Q2 2014 FY 2014

Revenue $130M to $132M $540M to $545M

Non-GAAP EPS $0.02 to $0.03 $0.24 to $0.26

Operating Cash Flow $14M to $15M $65M to $70M




NYSE: N

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