The economic downturn in the U.S. and now abroad tends to dominate the news these days, masking positive news from companies that are doing well financially. A recent example of positive news came in the form of NetSuite’s (News - Alert) third quarter 2008 results, released Monday.

 

NetSuite is a business software vendor that offers a suite designed for mid-sized companies. Its software integrates accounting, enterprise resource planning (ERP), customer relationship management (CRM) and e-commerce into a single system delivered in an “on-demand” format.

 

By focusing on the specific needs of its target clients, NetSuite has achieved considerable success. The company understands that mid-size businesses — or mid-sized divisions of enterprise — value solutions that are robust in functionality without requiring huge investments of either time or money.

 

NetSuite’s operating results for third quarter 2008, ended September 30, clearly indicate that the company is well-positioned despite fluctuations in the overall economy. Total revenue for Q308 was $40.4 million, up 44 percent from the same period a year ago. This number also represented an 11 percent increase over second quarter 2008. Even more significantly, Q308 marked the 36^th consecutive period of revenue growth for NetSuite.

 

During Q308, NetSuite added more than 300 new customers to its base. Most of the revenue came from customers in the Americas ($33.2 million), but the company is growing internationally as well; non-Americas revenue was $7.2 million for the period, representing 18 percent of the total.

 

“We are pleased with our record third quarter results, and we believe our top-line growth makes us the fastest-growing ERP-based suite in the market,” said Zach Nelson (News - Alert), NetSuite’s CEO, in a statement. “While market conditions remain unpredictable, we believe that the cost-reduction and productivity enhancements provided by NetSuite's on-demand integrated suite will be highly sought after by customers as they navigate through these turbulent times.”

Based on generally accepted accounting principles (GAAP), NetSuite’s net loss for Q308 was $(6.2 million) or $(0.10) per share. That can be compared to net losses of $(1.8 million) or $(0.21) for the same period in 2007.

 

On a non-GAAP basis, net loss was $(1.7 million) or $(0.03) per share. Same period last year: $(1.2 million) or $(0.02) per share.

 

NetSuite reported $874,000 in net foreign exchange rates losses, due to the strengthening of the U.S. dollar. These losses were related to revaluation of assets and liabilities. When these foreign exchange losses are excluded, the company’s Q308 non-GAAP loss was $(826,00) or $(0.01) per share. NetSuite mentioned in its earnings report that the company has implemented hedging strategies to minimize impact from exchange rate fluctuations in future quarters.

 

NetSuite has had a busy 2008 so far, with a variety of actions taken being in line with its growth strategy. In March, the company rolled out its Business Operating System and appointed a former Oracle (News - Alert) executive to head up operations for the new division. March also saw the introduction of two new NetSuite integrated software suites designed for the e-commerce vertical.

 

In April, NetSuite introduced a cloud computing solution called OneWorld, geared toward small and medium-sized divisions of large companies. A couple of months later, the company acquired OpenAir, a vendor of on-demand project management software.

 

NetSuite’s successes were recognized in July when it won a 2007 Communications Solutions Product of the Year Award from Technology Marketing Corporation. The award acknowledged the company’s Web-based business application, NetSuite 2007.

 

Last month, NetSuite introduced yet another new product, Service Resource Planning. This is an on-demand enterprise application for managing professional services business. Also in October, the company began a motivated campaign to acquire new customers by demonstrating how its CRM solutions offer better value than those from Salesforce.com (News - Alert).

 

Clearly, 2008 has been a busy year for NetSuite so far, and the company is showing no signs of slowing down its growth strategy. Whatever problems might affect the broader economy, NetSuite is staying on top of its game and is in a good position to ride out the storm, likely come out ahead of competitors.