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NetSuite Reports Strong Revenues, Continuing Losses

Despite all the red ink, NetSuite had a successful initial public offering of stock in December, since many investors think the company eventually will be profitable.
NetSuite continues to grow its customer base but still must prove it can make money in the fledgling software-as-a-service market.

The company announced Thursday a net loss of $3.3 million for its fourth quarter ended Dec. 31, compared with a loss of $8.1 million in last year's fourth quarter. Its fourth-quarter revenue was $31.7 million, up 57% compared with last year's quarter.

For the year, NetSuite lost $23.9 million, compared with a loss of $35.7 million the previous year. Its revenue, though, was up 62% to $108.5 million for the year. Despite all the red ink, NetSuite had a successful initial public offering of stock in December, since many investors think the company eventually will be profitable.

"Our fourth-quarter and fiscal year 2007 results capped off the best year in our history by every measure," said CEO Zach Nelson in a statement. "We head into 2008 with tremendous market, customer and product momentum, not just in the U.S. but around the world."

NetSuite said it added 430 new customers in the fourth quarter and ended the year with more than 5,600 customers. In terms of its user base, NetSuite said it had more than 930,000 unique log-ins in the fourth quarter.

NetSuite expects it will continue to lose money for some time, but that those losses will drop sharply in 2008. For the full year, NetSuite expects total revenue up around 45%, in the range of $153 million to $156 million.

In a filing with the Securities and Exchange Commission last year, the provider of on-demand ERP software reported revenue of $17.7 million in 2004, $36.4 million in 2005, and $67.2 million in 2006.

Oracle CEO Larry Ellison started NetSuite in 1998 and remains its majority shareholder.

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