Netsuite bags Hailo as business continues to grow

Against a background of significant growth in both revenue and market uptake for its SaaS-delivered financials and ERP services, NetSuite has also picked up new business switching from financial management software rival, Sage.

The maker of a rapidly growing international taxi app, Hailo, has moved from SageLine 50 to NetSuite OneWorld in order to consolidate all of its global accounting systems, across seven subsidiaries, onto a single platform.

Netsuite’s results for the second quarter of this year beat analyst expectations, with non-GAAP net income for the second quarter of 2013 was $4.0 million, or $0.05 per share, as compared to non-GAAP net income of $4.8 million, or $0.06 per share, in the second quarter of 2012. This was on a total second quarter revenue of $101.0 million, which represents a 35% increase over the same period in the prior year.

On a GAAP basis, however, there was a net loss for the second quarter of $20.4 million, or $(0.28) per share, as compared to a net loss of $9.9 million, or $(0.14) per share, in the second quarter of 2012. In a fast growing market sector such as SaaS- delivered services, however, a GAAP loss is not considered overly significant. It also does not take account of underlying trends in the way a business or market sector is growing.

This point was emphasised by Netsuite CEO, Zach Nelson, in a prepared statement on the quarter’s results.

"If there was any question that mission-critical business applications were moving to NetSuite, this quarter should provide the answer.  In Q2, SAP actually reported software revenues down 7% year-over-year, while NetSuite reported recurring subscription and support revenue growing by 31%, total revenue up 35%, deferred revenue growing 39%, average selling price growing by more than 20%, and sales through our channel partners up more than 70% year-over-year," he observed.

An example of this is the move by Hailo away from Sage. Its mobile phone app – which it dubs the evolution for hailing a taxi – is already available in 11 major cities around the world. This is a situation that creates a nice, but difficult to manage problem of consolidating financial results using currencies such as Sterling, Euros, Dollars and Yen.

This is the particular balliwick of Netsuite’s OneWorld service, which is specifically designed to manage financial consolidation, multi-currency, reporting, multi-language and multi-taxation in one unified cloud business management system. By switching to it, Hailo expects to be able to readily add new subsidiaries in line with its aggressive expansion plans.  

Hailo enables people to hail a licensed cab with just two taps on their smartphone, bringing an end to that years-old tradition of standing on the pavement, frantically waving one’s arms at passing taxies. It comes in two parts, both of which are available free. One part is the end user’s app, loaded on to individual handsets. The complementary part is the taxi driver’s app.

Launched in late 2011 in London, Hailo has already expanded into Boston, Chicago, Washington, New York, Toronto, Cork, Dublin, Barcelona, and Madrid. Building on this success, the company is looking to expand into dozens of cities over the next 12 to 18 months. Moving from Sage’s on-premise solution to NetSuite’s SaasS-delivered OneWorld service is seen by the company as crucial to achieving this ambition.  

OneWorld’s core capability is to deliver real-time global business management and financial consolidation services to rapidly growing organisations with multi-national and multi-subsidiary operations. It enables businesses to automate complex, mission-critical business processes in the cloud from ERP, to CRM, to Ecommerce, readily handling different currencies, taxation rules, and reporting requirements. It can also deliver an accurate view of the international financial position of a business in near real time, and at a fraction of the cost, compared to traditional on-premise ERP solutions.

“Pulling business information together from multiple systems including Sage and QuickBooks from our offices around the world was a painstaking task. It took the team ten or so days of manual spreadsheet entry to generate a month-end report which was far too slow, not to mention the worry of manual errors,” said Nick Lally, Financial Director at Hailo.

“We quickly realised that the Sage and QuickBooks solutions weren’t going to scale with our growth plans, but NetSuite could. NetSuite OneWorld is run entirely in the cloud, just like the rest of our business, making us much more agile and saving us the money and time that would be spent on maintaining hardware and IT specialists. We were also really impressed with the speed of the NetSuite implementation. We were live within three months of signing on the dotted line, which is at least three times faster than what we would have expected for an equivalent on-premise solution. This meant we could grow even faster than we originally anticipated. For a fast-moving international business like us, NetSuite is perfect.”