NetSuite Reports 50-Percent Channel Sales Growth In Q1


NetSuite's channel sales grew 50 percent in its first quarter, contributing heavily to the cloud application vendor's 32-percent growth in the period.

CEO Zach Nelson, on an earnings call with financial analysts Thursday, said NetSuite continues to recruit solution providers that are adding the company's cloud computing software and services to their offerings.

For the first fiscal quarter ended March 31, NetSuite reported sales of $91.6 million, up 32 percent from $69.3 million in the same period last year. The company's net loss also increased, however, to just over $13.0 million from $7.7 million last year.

 

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Subscription revenue was nearly $74.0 million in the quarter, while professional services and other revenue totaled $17.7 million.

"This growth was driven by excellent performance across the company with revenue in each major vertical, geography and channel growing in double-digits," Nelson said. "Q1 was a strong quarter on the new customer front," Nelson said. "We added roughly 325 total new customers and we did it with an average [deal] selling price that was 14 percent higher than the prior year."

"Our channel sales efforts continue to show great success and accelerated to 50 percent growth year-over-year," the CEO said. That included growth from what he called "the classic VAR channel" that services SMB customers and systems integrators that work with enterprise customers.

"I think the really exciting thing about the channel is, we've always managed the business on things that we feel that we can control pretty tightly, which is really our direct sales and service efforts. The beauty of what's happening now is some of these things that are outside of our control, which are really demand-driven, and by that I mean things that are going through the channel are really starting to grow very nicely, both in the mid-market and in the enterprise."

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