Q1 2013 Earnings Call
April 25, 2013 5:00 pm ET
Ronald Gill - Chief Financial Officer and Principal Accounting Officer
Zachary Nelson - Chief Executive Officer, President and Director
Jason Maynard - Wells Fargo Securities, LLC, Research Division
Brendan Barnicle - Pacific Crest Securities, Inc., Research Division
Philip Winslow - Crédit Suisse AG, Research Division
Gregory Dunham - Goldman Sachs Group Inc., Research Division
Laura Lederman - William Blair & Company L.L.C., Research Division
Patrick D. Walravens - JMP Securities LLC, Research Division
Scott R. Berg - Northland Capital Markets, Research Division
David M. Hilal - FBR Capital Markets & Co., Research Division
Michael Huang - Needham & Company, LLC, Research Division
Matthew J. Coss - Piper Jaffray Companies, Research Division
Jennifer Swanson Lowe - Morgan Stanley, Research Division
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Thank you, operator. Good afternoon, everyone, and welcome to NetSuite's First Quarter 2013 Financial Results Conference Call. A more complete disclosure of our results can be found in our press release issued about an hour ago, as well as in our related Form 8-K furnished to the SEC earlier today. To access the press release and the financial details, please see the Investor Relations section of our website. As a reminder, today's call is being recorded, and a replay will be available following the conclusion of the call. On the call with me today is Zach Nelson, our Chief Executive Officer. Zach and I will begin with prepared remarks, and then we'll open up the line for questions.
During the call today, we'll be referring to both GAAP and non-GAAP financial measures. The reconciliation of our GAAP to non-GAAP financial information is provided in our press release, which is available on our website. All of the nonrevenue financial measures we will discuss today are non-GAAP, unless we state that the measure is a GAAP measure.
The primary purpose of today's call is to discuss our first quarter 2013 results. However, some of the information discussed during this call, including any financial outlook we provide, may constitute forward-looking statements within the meaning of the U.S. federal securities laws. These statements are subject to risks, uncertainties and assumptions and are based on financial information available as of today. We disclaim any obligation to update any forward-looking statements or outlook. Risks and uncertainties that would cause our results to differ materially from those expressed or implied by any such forward-looking statements include those summarized in today's press release. These risks and additional risks are also described in detail in our reports that we file from time to time with the SEC, including our most recent 10-K and 10-Q filings, which I encourage you to read.
With that, I'll now turn the call over to Zach.
Thank you, Ron, and thank you, all, for joining us today. It is indeed a pleasure to speak with you and provide our first report on the 2013 fiscal year. As I stated at the end of our Q4 call, while Q4 was a record quarter, our pipeline was by no means drained as we went into Q1. Our results during the quarter bear out that assessment as we had one of our best new business quarters in recent memory. And that is saying a lot given the roll we've been on for the last several years. In addition to exceeding outlook for the quarter on every metric, the great start allows us to raise substantially our revenue guidance for the year.
For the quarter, on the revenue front, year-over-year our top line grew by 32% to a record $91.6 million, above our previously stated outlook of $90.5 million to $91 million. This growth was driven by excellent performance across the company with revenue in each major vertical, geography and channel growing in double digits. And in the installed base, we once again saw record revenue retention, continuing the trends in customer satisfaction that we have experienced over the past several years. Our non-GAAP earnings came in at $0.04 per share, above our previously stated outlook of $0.02 to $0.03 per share for the quarter.
As we said last quarter when we gave our outlook for this fiscal year, 2013 would be a year of investment to take advantage of the opportunity that we have in front of us. And during the quarter, we did kick off significant advertising and hiring campaigns. On the hiring front, we did very well by adding 175 net new employees. Over the past year, we have added more than 600 net new employees, bringing our total headcount to more than 2,000 today.
Much of that hiring is going into the onboarding of quota-bearing sales reps, and our calculated billing results for the quarter gives some insight into the productivity of the capacity we have added over the last year. In Q1, calculated billings, defined as the change in deferred revenue plus revenue, grew by 32% over Q1 of 2012. And as you'll recall, Q1 of 2012 was a great quarter, so it's a tough comparison. These results are indicative of the excellent execution of our global sales organization, and productivity is up substantially year-over-year. And as we discussed on the Q4 call, the seamless transition of sales leadership in North America from James Ramsey to Jeff Honeycomb happened flawlessly during the quarter, as evidenced by these strong results.