NetSuite Details $50.5M Deal For Venda In Q2 Results
NetSuite CEO Zach Nelson sought to quash chatter around the company's recent acquisition of London-based e-commerce company Venda when he revealed some of the deal's financial details in a call with analysts Thursday.
San Mateo, Calif.-based NetSuite, a cloud-based software vendor, paid $50.5 million in a combination of cash and stock for the company it hopes will help it establish a stronger footprint in Europe and eventually grow the company's revenue stream from there.
Buzz following news of the Venda buy pegged the purchase price as high as several hundreds of millions of dollars and Venda's sales around $40 million.
[Related: NetSuite Buys Venda, a London-Based E-Commerce Leader]
Disclosure of the actual purchase price shows speculation on Venda's revenue were "well off," Nelson said during the call.
Nelson compared Venda to the company's 2008 acquisition of OpenAir in that it added additional talent to the company's ranks, he said. However, both companies "had almost non-existent sales team," indicating neither were actually growing at the time of their purchase.
"It's safe to say Venda was not growing when we acquired them," Nelson said.
Venda instead brings to NetSuite a portfolio of services, support team and customers that is expected to make it easier for NetSuite to grow within the European marketplace beginning with a workforce that speaks the language of customers there along with knowledge around shipping and payments that are substantially different than in the U.S., Nelson said.
Integration of NetSuite's SuiteCommerce product is already happening and integration with Venda is possible, depending on the customer. It's more likely Venda would be deployed with legacy systems, such as SAP, but it depends on the customer, Nelson said.
SuiteCommerce customers are now about evenly spread between the original install base, seen as early adopters, and new customers.
NetSuite, along with companies such as Workday and Salesforce.com, are often seen by some industry watchers as bellwethers of the broader shift to the cloud. And NetSuite delivered largely positive news to company watchers.
The quarter was marked by several NetSuite deployments, including one for a $1 billion software company. NetSuite also said Thursday that Fremont, Calif.-based Penguin Computing replaced its SAP system with NetSuite's cloud suite. Oceanport, N.J.-based CommVault is also using NetSuite's OneWorld to handle billing, budgeting and other business operations worldwide.
Details on the Venda acquisition and the customer announcements came the same day the company reported its second-quarter results and the news it surpassed the $100 million mark for quarterly recurring revenue.
NetSuite had adjusted second-quarter profit of $4.8 million, up 20 percent from the year-ago period and beating Wall Street analyst estimates of $2.4 million.
The company's second-quarter revenue rose 30% from a year earlier to $131.8 million, in line with analyst estimates.
The company guided revenue for the current quarter of $140 million to $142 million and an adjusted profit in the range of $2.4 million to $3.2 million.
NetSuite shares were up nearly 1 percent in after-hours trading Thursday to a market value of $6.42 billion.
PUBLISHED JULY 24, 2014