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Netezza Corporation
200 Crossing Boulevard
5th Floor
Framingham, MA 01702
United States - Map
Phone: 508-665-6800
Fax: 508-665-6811
Web Site: http://www.netezza.com

DETAILS  
Index Membership: N/A
Sector: Technology
Industry: Diversified Computer Systems
Full Time Employees: 243


BUSINESS SUMMARY  
Netezza Corporation provides data warehouse appliances worldwide. The company offers Netezza Performance Server that integrates database, server, and storage platforms in a purpose-built unit to enable detailed queries and analyses on stored data. This queries and analyses, referred to as business intelligence, provide organizations with actionable information to improve their business operations. It serves companies in telecommunications, e-business, retail, financial services, analytic service providers, government, and healthcare sectors. The company was founded in August 2000 under the name Intelligent Data Engines, Inc. and changed its name to Netezza Corporation in November 2000. Netezza Corporation is headquartered in Framingham, Massachusetts.

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Financial Results
Wednesday November 28, 8:00 am ET  
Third quarter performance driven by revenue increase of 44% over prior year
GAAP diluted EPS increases to $0.02


FRAMINGHAM, Mass.--(BUSINESS WIRE)--Netezza Corporation (NYSE Arca: NZ) today announced its financial results for the third fiscal quarter ended October 31, 2007.
Jit Saxena, Netezza's Chairman and Chief Executive Officer, stated, "We are extremely pleased with Netezza's solid performance in our third quarter with record revenues, new customer growth and increased earnings."


Highlights:

Revenue for the third quarter of fiscal 2008 increased 44% to $33.4 million compared with $23.2 million for the same period one year ago. Revenue for the first three quarters of fiscal 2008 increased 65% to $87.2 million compared with $53.0 million for the same period one year ago.

GAAP net income attributable to common stockholders for the third quarter of fiscal 2008 was $1.6 million compared with a GAAP net loss attributable to common stockholders of $3.0 million for the same period one year ago. Non-GAAP net income attributable to common stockholders for the third quarter of fiscal 2008 was $2.9 million compared with a non-GAAP net loss attributable to common stockholders of $1.2 million for the same period one year ago. Non-GAAP net income (loss) attributable to common stockholders and non-GAAP diluted net income per share (reported below) exclude non-cash stock based compensation and accretion of preferred stock dividends. A reconciliation of GAAP to non-GAAP results has been provided in the financial statements included in this press release. An explanation of these measures is also included below under the heading "Use of Non-GAAP Financial Measures."

GAAP diluted net income per share for the third quarter of fiscal 2008 was $0.02 compared with a GAAP diluted net loss per share of $0.20 for the same period one year ago. Non-GAAP diluted net income per share for the third quarter of fiscal 2008 was $0.04 compared with a non-GAAP diluted net loss per share of $0.08 for the same period one year ago.

At October 31, 2007, total cash and marketable securities were $123.2 million, compared with $5.0 million at January 31, 2007. Netezza's initial public offering in July 2007 raised proceeds of $112.9 million, net of expenses. The company had no outstanding debt at October 31, 2007, compared with $6.5 million at January 31, 2007.

Netezza acquired 18 new customers in the third quarter of fiscal 2008, an increase of 100% over the nine new customers acquired in the third quarter of fiscal 2007 and representing the best quarter of new customer growth in Netezza's history.

Financial Guidance:

"We are pleased with the third quarter financial results which demonstrated continued momentum in our business analytics strategy. We continue to invest in sales and research and development to further penetrate targeted vertical markets and expect revenues of approximately $120 million for fiscal 2008 in total. We further estimate revenues for the next fiscal year to be approximately $160 million, while maintaining our goal to continue to increase profitability," said Patrick Scannell, Senior Vice President and Chief Financial Officer of Netezza.

Use of Non-GAAP Financial Measures:

To supplement Netezza's unaudited condensed consolidated financial statements presented in accordance with GAAP, Netezza uses certain non-GAAP measures of financial performance. The presentation of these non-GAAP measures is not intended to be considered in isolation from, as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Netezza's results of operations as determined in accordance with GAAP. The non-GAAP financial measures used by Netezza include non-GAAP gross profit, non-GAAP operating expenses, non-GAAP operating income (loss), non-GAAP net income (loss) attributable to common stockholders and non-GAAP net income (loss) per share. These non-GAAP measures exclude non-cash stock-based compensation and, where applicable, accretion of preferred stock dividends.

Netezza believes that these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding Netezza's performance by excluding certain non-cash items that may not be indicative of Netezza's core business, operating results or future outlook. Because of the varying valuation methodologies and assumptions that companies use under FAS123R, Netezza's management believes that excluding non-cash stock-based compensation allows investors to analyze Netezza's recurring business over multiple periods and provide more meaningful comparison with other companies. Upon the closing of Netezza's public offering, accretion of preferred dividends was no longer applicable due to the conversion of preferred stock to common stock, and is therefore excluded to aid in comparing current and future operating results with those of past periods. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures provided in the financial statements included in this press release.

Third Quarter Conference Call:

Netezza will host a conference call and webcast at 8:30 AM Eastern Time (5:30 AM Pacific Time) on November 28, 2007 to discuss its third fiscal quarter results and business outlook.

The conference call can be accessed by dialing +1 800 561-2731 for participants in the United States and by dialing +1 617 614-3528 for participants outside the United States. The passcode for the conference call is 68188954. A telephonic replay of the conference call will also be available two hours after the call and will run for two weeks. The replay can be accessed by dialing +1 888 286-8010 for participants in the United States and by dialing +1 617 801-6888 for participants outside the United States. The passcode for the replay is 49374446.

The webcast will be accessible from the "Investor Relations" section of Netezza's website (http://www.netezza.com). The webcast will be archived on Netezza's website for a period of one year.

About Netezza Corporation:

Netezza is the global leader in analytic appliances that dramatically simplify high-performance analytics for business users across the extended enterprise, delivering significant competitive and operational advantage in today's information-intensive marketplaces. The Netezza Performance Server® (NPS®) family of streaming analytic™ appliances brings appliance simplicity to a broad range of complex data warehouse and analytic challenges. Based in Framingham, Mass., Netezza has offices in Washington, DC, the United Kingdom and Asia Pacific. For more information about Netezza, please visit www.netezza.com.

For Netezza Investors:

The statements set forth above include forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to Netezza's future financial performance and Netezza's business prospects. These statements involve risk and uncertainties, including: market demand for our products; our limited operating history and history of losses; quarterly fluctuation of our business; our ability to attract and retain key personnel; competition in the data warehouse market; our dependence on certain key customers; our ability to protect our patents and intellectual property; our ability to defend against third party infringement claims, other litigation and contingent liabilities; and risks relating to operating internationally. For a further list and description of risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements in this release, we refer you to the "Risk Factors" section of Netezza's Quarterly Report on Form 10-Q for the quarter ended July 31, 2007, which is on file with the SEC and is available in the investor relations section of Netezza's website at http://www.netezza.com and on the SEC website at http://www.sec.gov. In addition, the forward-looking statements included in this press release represent our views as of November 28, 2007. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to November 28, 2007.

Netezza Corporation  
Condensed Consolidated Balance Sheet

(in thousands)  
       
 October 31,   January 31,  
    2007      2007    
 (unaudited)    
Assets      
     
Current assets      
Cash and cash equivalents   $  38,701   $  5,018  
Short term marketable securities    84,480    -  
Accounts receivable    23,224    31,834  
Inventory    33,659    26,239  
Other current assets      4,992      1,370    
Total current assets    185,056    64,461  
     
Property and equipment, net    5,051    4,228  
Restricted cash    379    379  
Other long-term assets      160      131    
     
     
Total assets   $  190,646   $  69,199    
     
     
     
Liabilities, convertible redeemable preferred stock and stockholders' equity (deficit)      
     
Current liabilities      
Accounts payable   $
3,565   $
12,683  
Accrued expenses    9,386    8,678  
Current portion of note payable to bank    -    2,436  
Refundable exercise price for restricted stock    -    24  
Deferred revenue      33,562      14,741    
Total current liabilities    46,513    38,562  
Long-term deferred revenue    12,781    9,765  
Note payable to bank, net of current portion    -    4,099  
Preferred stock warrant liability      -      765    
   
Total liabilities    59,294    53,191  
     
Total convertible redeemable preferred stock    -    97,131  
     
Total stockholders' equity (deficit)      131,352      (81,123  )  
     
Total liabilities, convertible redeemable preferred stock and stockholders' equity (deficit)
 $  190,646   $  69,199    
Netezza Corporation  
Condensed Consolidated Statement of Operations

(in thousands, except per share amounts)  
(unaudited)  
               
         
 For the three months ended   For the nine months ended  
 October 31   October 31  
    2007      2006         2007         2006    
         
Revenue          
Product   $  27,319   $  19,359    $  70,830    $  42,637  
Services      6,099      3,812         16,330         10,316    
Total revenue    33,418    23,171     87,160     52,953  
         
Cost of revenue          
Product    11,355    8,127     29,231     17,738  
Services      1,969      1,448         5,573         3,882    
Total cost of revenue      13,324      9,575         34,804         21,620    
         
Gross Profit    20,094    13,596     52,356     31,333  
         
Operating Expenses          
Sales and marketing    11,128    9,281     30,759     22,871  
Research and development    5,682    4,667     16,738     13,214  
General and administrative      2,661      1,135         6,394         3,234    
Total operating expenses    19,471    15,083     53,891     39,319  
               
Operating income (loss)    623    (1,487  )    (1,535  )    (7,986  )  
         
Interest income    1,214    136     1,431     355  
Interest expense    2    215     717     503  
Other income, net      29      72         249         617    
         
Income (loss) before income taxes   $  1,864   $  (1,494  )   $  (572  )   $  (7,517  )  
         
Provision for income taxes      278      -         843         -    
       
Net income (loss)   $  1,586   $  (1,494  )   $  (1,415  )   $  (7,517  )  
         
Accretion to preferred stock      -      1,483         2,853         4,448    
         
Net income (loss) attributable to common stockholders   $  1,586   $  (2,977  )   $  (4,268  )   $  (11,965  )  
         
         
Net income (loss) per common share:          
Basic   $  0.03   $  (0.20  )   $  (0.16  )   $  (0.82  )  
Diluted   $  0.02   $  (0.20  )   $  (0.16  )   $  (0.82  )  
         
Shares used in per common share calculations:          
Basic    57,434    14,690     26,419     14,538  
Diluted    63,804    14,690     26,419     14,538  
Netezza Corporation  
Reconciliation of GAAP to Non-GAAP Financial Measures  
(in thousands, except per share amounts and percentages)  
(unaudited)  
 
      For the three months ended October 31
      For the nine months ended October 31
      % Change for the three months ended October 31, 2007 as compared with the three months ended October 31, 2006

  2007        2006      2007           2006        

                   
Non-GAAP financial measures and reconciliation:                    
                   
GAAP cost of product revenue    $  11,355   $  8,127    $  29,231    $  17,738    
Non-cash stock-based compensation (1)       26      3         71         9      
Non-GAAP cost of product revenue    $  11,329   $  8,124      $  29,160      $  17,729      
                   
GAAP cost of service revenue    $  1,969   $  1,448    $  5,573    $  3,882    
Non-cash stock-based compensation (1)       31      6         84         10      
Non-GAAP cost of service revenue    $  1,938   $  1,442      $  5,489      $  3,872      
                   
GAAP gross profit    $  20,094   $  13,596    $  52,356    $  31,333    
Non-cash stock-based compensation (1)       57      9         155         19      
Non-GAAP gross profit    $  20,151   $  13,605      $  52,511      $  31,352      
                   
GAAP sales and marketing expenses    $  11,128   $  9,281    $  30,759    $  22,871    20  %  
Non-cash stock-based compensation (1)       362      63         868         132      
Non-GAAP sales and marketing expenses    $  10,766   $  9,218      $  29,891      $  22,739      17  %  
                   
GAAP research and development expenses    $  5,682   $  4,667    $  16,738    $  13,214    22  %  
Non-cash stock-based compensation (1)       332      34         657         86      
Non-GAAP research and development expenses    $  5,350   $  4,633      $  16,081      $  13,128      15  %  
                   
GAAP general and administrative expenses    $  2,661   $  1,135    $  6,394    $  3,234    134  %  
Non-cash stock-based compensation (1)       515      195         1,401         281      
Non-GAAP general and administrative expenses    $  2,146   $  940      $  4,993      $  2,953      128  %  
                   
GAAP operating expenses    $  19,471   $  15,083    $  53,891    $  39,319    29  %  
Non-cash stock-based compensation (1)       1,209      292         2,926         499      
Non-GAAP operating expenses    $  18,262   $  14,791      $  50,965      $  38,820      23  %  
                   
GAAP operating income (loss)    $  623   $  (1,487  )   $  (1,535  )   $  (7,986  )    
Non-cash stock-based compensation (1)       1,266      301         3,081         518      
Non-GAAP operating income (loss)    $  1,889   $  (1,186  )   $  1,546      $  (7,468  )    
                   
GAAP net income (loss) attributable to common                    
stockholders    $  1,586   $  (2,977  )   $  (4,268  )   $  (11,965  )    
Non-cash stock-based compensation (1)     1,266    301     3,081     518    
Accretion to preferred stock (2)       -      1,483         2,853         4,448      
Non-GAAP net income (loss) attributable to common                    
stockholders    $  2,852   $  (1,193  )   $  1,666      $  (6,999  )    
                   
                   
GAAP net income (loss) per common share - basic    $  0.03   $  (0.20  )   $  (0.16  )   $  (0.82  )    
Non-cash stock-based compensation (1)     0.02    0.02     0.12     0.03    
Accretion to preferred stock (2)       -      0.10         0.10         0.31      
Non-GAAP net income (loss) per common share -basic    $  0.05   $  (0.08  )   $  0.06      $  (0.48  )    
                   
GAAP net income (loss) per common share - diluted    $  0.02   $  (0.20  )   $  (0.16  )   $  (0.82  )    
Non-cash stock-based compensation (1)     0.02    0.02     0.12     0.03    
Accretion to preferred stock (2)       -      0.10         0.10         0.31      
Non-GAAP net income (loss) per common share - diluted    $  0.04   $  (0.08  )   $  0.06      $  (0.48  )    
                   
Shares used in per common share calculations:                    
Basic     57,434    14,690     26,419     14,538    
Diluted     63,804    14,690     26,419     14,538    
                   
                   
Footnotes - Adjustments                    
                   
(1) Represents non-cash compensation charges associated with stock options granted as follows:  
                   
  For the three months ended    For the nine months ended    
  October 31      October 31      
  2007      2006      2007         2006      
                   
Cost of product revenue    $  26   $  3    $  71    $  9    
Cost of services revenue     31    6     84     10    
Sales and marketing     362    63     868     132    
Research and development     332    34     657     86    
General and administrative       515      195         1,401         281      
Total non-cash stock-based compensation expense    $  1,266   $  301      $  3,081      $  518      
                   
                   
(2) Represents accretion of preferred stock dividends on Netezza's Series A through D convertible redeemable preferred stock prior to its conversion to common stock on July 24, 2007.  




Contact:
Netezza Corporation
Investor Contact:
Patrick J. Scannell, Jr., +1-508-665-4623
Senior Vice President & Chief Financial Officer
[email protected]
or
Media Contact:
Virginia Lux, +1-508-665-5794
Director of Marketing Communications
[email protected]
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Netezza Announces Fourth Quarter and Full Fiscal Year 2008 Financial Results
Thursday February 28, 8:00 am ET 
Fourth Quarter Performance Driven by Revenue Increase of 48% over Prior Year
Fourth Quarter GAAP Diluted EPS Increases to $0.05


FRAMINGHAM, Mass.--(BUSINESS WIRE)--Netezza Corporation (NYSE Arca: NZ), the global leader in analytic appliances, today announced its financial results for the fourth quarter and fiscal year ended January 31, 2008.
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Jit Saxena, Netezza's Chairman and Chief Executive Officer, stated, "We are very pleased with our fourth quarter and our fiscal year 2008 results. Throughout the year we saw accelerating momentum in our business both from our current customers and with new customers. This momentum allows us to continue to invest in our product development and distribution channels to better address our customers' needs and the market opportunity in front of us."

Results for the Fourth Quarter of Fiscal Year 2008

Total revenue for the fourth quarter of fiscal 2008 increased 48% to $39.5 million compared with $26.7 million for the same period one year ago. GAAP net income attributable to common stockholders for the fourth quarter of fiscal 2008 was $3.4 million compared with a GAAP net loss attributable to common stockholders of $1.9 million for the same period one year ago. Non-GAAP net income attributable to common stockholders for the fourth quarter of fiscal 2008 was $4.6 million compared with a non-GAAP net loss attributable to common stockholders of $0.1 million for the same period one year ago. GAAP diluted net income per share for the fourth quarter of fiscal 2008 was $0.05 compared with a GAAP diluted net loss per share of $0.26 for the same period one year ago. Non-GAAP diluted net income per share for the fourth quarter of fiscal 2008 was $0.07 compared with a non-GAAP diluted net loss per share of $0.01 for the same period one year ago.

Results for Fiscal Year 2008

Total revenue for fiscal year 2008 increased 59% to $126.7 million compared with $79.6 million for fiscal year 2007. GAAP net loss attributable to common stockholders for fiscal year 2008 was $0.9 million compared with a GAAP net loss attributable to common stockholders of $13.9 million for fiscal year 2007. Non-GAAP net income attributable to common stockholders for fiscal year 2008 was $6.3 million compared with a non-GAAP net loss attributable to common stockholders of $7.1 million for fiscal year 2007. GAAP diluted net loss per share for fiscal year 2008 was $0.03 compared with a GAAP diluted net loss per share of $1.90 for fiscal year 2007. Non-GAAP diluted net income per share for fiscal year 2008 was $0.18 compared with a non-GAAP diluted net loss per share of $0.97 for fiscal year 2007.

Non-GAAP net income (loss) attributable to common stockholders, non-GAAP diluted net income per share and non-GAAP operating income exclude non-cash stock based compensation and, where applicable, accretion of preferred stock dividends. A reconciliation of GAAP to non-GAAP results has been provided in the financial statements included in this press release. An explanation of these measures is also included below under the heading "Use of Non-GAAP Financial Measures."

At January 31, 2008, total cash and marketable securities were $137.1 million, compared with $5.0 million at January 31, 2007. Netezza's initial public offering in July 2007 raised proceeds of $113.0 million, net of expenses. The company had no outstanding debt at January 31, 2008, compared with $6.5 million at January 31, 2007.

Financial Guidance:

"We are extremely pleased with our fourth quarter and fiscal year 2008 financial results, which demonstrated continued momentum across all dimensions of our business," said Patrick Scannell, Senior Vice President and Chief Financial Officer of Netezza. "For fiscal year 2008, we recorded non-GAAP operating income of 4% and GAAP operating income was approximately break-even. Based upon our traction in the marketplace, we are raising our fiscal year 2009 revenue guidance from $160 million to $165 - $168 million. As we continue to accelerate top line revenue growth, while aggressively investing in all disciplines across our business to support this growth, for fiscal year 2009, we are targeting non-GAAP operating income of 7-9% and GAAP operating income of 1-2%."

Use of Non-GAAP Financial Measures:

To supplement Netezza's unaudited condensed consolidated financial statements presented in accordance with GAAP, Netezza is presenting certain non-GAAP measures of financial performance. Netezza believes that these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding Netezza's performance by excluding certain non-cash items that may not be indicative of Netezza's core business or future outlook. The presentation of these non-GAAP measures is not intended to be considered in isolation from, as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Netezza's results of operations as determined in accordance with GAAP.

The non-GAAP financial measures presented by Netezza exclude non-cash stock-based compensation and, where applicable, accretion of preferred stock dividends. Because of the varying valuation methodologies and assumptions that companies use under FAS123R, Netezza's management believes that excluding non-cash stock-based compensation allows investors to analyze Netezza's recurring business over multiple periods and provide more meaningful comparison with other companies. Upon the closing of Netezza's public offering, accretion of preferred dividends was no longer applicable due to the conversion of preferred stock to common stock, and is therefore excluded to aid in comparing current and future operating results with those of past periods. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures provided in the financial statements included in this press release.

Fourth Quarter Conference Call:

Netezza will host a conference call and webcast at 8:30 AM Eastern Time (5:30 AM Pacific Time) on February 28, 2008 to discuss its fourth quarter and full fiscal year 2008 results and business outlook.

The conference call can be accessed by dialing +1 866 356-3095 for participants in the United States and by dialing +1 617 597-5391 for participants outside the United States. The passcode for the conference call is 19087295. A telephonic replay of the conference call will also be available two hours after the call and will run for two weeks. The replay can be accessed by dialing +1 888 286-8010 for participants in the United States and by dialing +1 617 801-6888 for participants outside the United States. The passcode for the replay is 73192491.

The webcast will be accessible from the "Investor Relations" section of Netezza's website (http://www.netezza.com). The webcast will be archived on Netezza's website for a period of one year.

About Netezza Corporation:

Netezza is the global leader in analytic appliances that dramatically simplify high-performance analytics for business users across the extended enterprise, delivering significant competitive and operational advantage in today's information-intensive marketplaces. The Netezza Performance Server® (NPS®) family of streaming analytic™ appliances brings appliance simplicity to a broad range of complex data warehouse and analytic challenges. Based in Framingham, Mass., Netezza has offices in Washington, DC, the United Kingdom and Asia Pacific. For more information about Netezza, please visit www.netezza.com.

For Netezza Investors:

The statements set forth above include forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to Netezza's future financial performance and Netezza's business prospects. These statements involve risk and uncertainties, including: market demand for our products; our limited operating history and history of losses; quarterly fluctuation of our business; our ability to attract and retain key personnel; competition in the data warehouse market; our dependence on certain key customers; our ability to protect our patents and intellectual property; our ability to defend against third party infringement claims, other litigation and contingent liabilities; and risks relating to operating internationally. For a further list and description of risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements in this release, we refer you to the "Risk Factors" section of Netezza's Quarterly Report on Form 10-Q for the quarter ended October 31, 2007, which is on file with the SEC and is available in the investor relations section of Netezza's website at http://www.netezza.com and on the SEC website at http://www.sec.gov. In addition, the forward-looking statements included in this press release represent our views as of February 28, 2008. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to February 28, 2008.

Netezza Corporation 
Condensed Consolidated Balance Sheets 
(in thousands) 
         
  January 31,   January 31, 
     2008      2007     
  (unaudited)   
Assets     
       
Current assets     
Cash and cash equivalents   $  46,184   $  5,018   
Short term marketable securities    90,924    -   
Accounts receivable    19,999    31,834   
Inventory    31,611    26,239   
Restricted cash    379    -   
Other current assets      4,038      1,370     
Total current assets    193,135    64,461   
       
Property and equipment, net    5,467    4,228   
Restricted cash    -    379   
Other long-term assets      150      131     
       
       
Total assets   $  198,752   $  69,199     
       
       
       
Liabilities, convertible redeemable preferred stock and stockholders' equity (deficit)     
       
Current liabilities     
Accounts payable    5,533    12,683   
Accrued expenses    5,494    4,290   
Accrued compensation and benefits    5,244    4,388   
Current portion of note payable to bank    -    2,436   
Refundable exercise price for restricted stock    -    24   
Deferred revenue      30,588      14,741     
Total current liabilities    46,859    38,562   
Long-term deferred revenue    15,418    9,765   
Note payable to bank, net of current portion    -    4,099   
Preferred stock warrant liability      -      765     
     
Total liabilities    62,277    53,191   
       
Total convertible redeemable preferred stock    -    97,131   
       
Total stockholders' equity (deficit)      136,475      (81,123  ) 
       
Total liabilities, convertible redeemable preferred stock and stockholders' equity (deficit)
  $  198,752   $  69,199     
Netezza Corporation 
Consolidated Statements of Operations 
(in thousands, except per share amounts) 
(unaudited) 
                 
           
  For the three months ended   For the twelve months ended 
  January 31   January 31 
     2008      2007         2008         2007     
           
Revenue         
Product   $  32,164   $  21,995    $  102,994    $  64,632   
Services      7,362      4,673         23,692         14,989     
Total revenue    39,526    26,668     126,686     79,621   
           
Cost of revenue         
Product    13,296    8,959     42,527     26,697   
Services      2,143      1,521         7,716         5,403     
Total cost of revenue      15,439      10,480         50,243         32,100     
           
Gross Profit    24,087    16,188     76,443     47,521   
           
Operating Expenses         
Sales and marketing    12,451    10,039     43,210     32,908   
Research and development    7,142    4,823     23,880     18,037   
General and administrative      2,556      1,591         8,950         4,827     
Total operating expenses    22,149    16,453     76,040     55,772   
                 
Operating income (loss)    1,938    (265  )    403     (8,251  ) 
           
Interest income    1,540    59     2,971     414   
Interest expense    -    261     717     765   
Other income, net      49      10         298         627     
           
Income (loss) before income taxes   $  3,527   $  (457  )   $  2,955    $  (7,975  ) 
           
Provision for income taxes      118      -         961         -     
         
Net income (loss)   $  3,409   $  (457  )   $  1,994    $  (7,975  ) 
           
Accretion to preferred stock      -      1,483         2,853         5,931     
           
Net income (loss) attributable to common stockholders   $  3,409   $  (1,940  )   $  (859  )   $  (13,906  ) 
           
           
Net income (loss) per common share:         
Basic   $  0.06   $  (0.26  )   $  (0.03  )   $  (1.90  ) 
Diluted   $  0.05   $  (0.26  )   $  (0.03  )   $  (1.90  ) 
           
Shares used in per common share calculations:         
Basic    57,505    7,469     33,989     7,319   
Diluted    63,484    7,469     33,989     7,319   
Netezza Corporation 
Reconciliation of GAAP to Non-GAAP Financial Measures 
(in thousands, except per share amounts and percentages) 
(unaudited) 
                         
               
  For the three months ended   % Change for   For the twelve months ended   % Change for 
  January 31   three months   January 31   twelve months

     2008      2007      (1)      2008         2007      (2) 
               
Non-GAAP financial measures and reconciliation:             
               
GAAP cost of product revenue   $  13,296   $  8,959      $  42,527    $  26,697     
Non-cash stock-based compensation (3)      23      3           94         12       
Non-GAAP cost of product revenue   $  13,273   $  8,956        $  42,433      $  26,685       
               
GAAP cost of services revenue   $  2,143   $  1,521      $  7,716    $  5,403     
Non-cash stock-based compensation (3)      32      9           116         19       
Non-GAAP cost of services revenue   $  2,111   $  1,512        $  7,600      $  5,384       
               
GAAP gross profit   $  24,087   $  16,188      $  76,443    $  47,521     
Non-cash stock-based compensation (3)      55      12           210         31       
Non-GAAP gross profit   $  24,142   $  16,200        $  76,653      $  47,552       
               
GAAP sales and marketing expenses   $  12,451   $  10,039    24  %   $  43,210    $  32,908    31  % 
Non-cash stock-based compensation (3)      354
     75           1,222         207       
Non-GAAP sales and marketing expenses   $  12,097   $  9,964      21  %   $  41,988      $  32,701      28  % 
               
GAAP research and development expenses   $  7,142   $  4,823    48  %   $  23,880    $  18,037    32  % 
Non-cash stock-based compensation (3)      350
     74           1,007
        160       
Non-GAAP research and development expenses   $  6,792
  $  4,749      43  %   $  22,873
     $  17,877      28  % 
               
GAAP general and administrative expenses   $  2,556   $  1,591    61  %   $  8,950    $  4,827    85  % 
Non-cash stock-based compensation (3)      431      198           1,832         479       
Non-GAAP general and administrative expenses   $  2,125   $  1,393      53  %   $  7,118      $  4,348      64  % 
               
GAAP operating expenses   $  22,149   $  16,453    35  %   $  76,040    $  55,772    36  % 
Non-cash stock-based compensation (3)      1,135
     347           4,061
        846       
Non-GAAP operating expenses   $  21,014
  $  16,106      30  %   $  71,979
     $  54,926      31  % 
               
GAAP operating income (loss)   $  1,938   $  (265  )     $  403    $  (8,251  )   
Non-cash stock-based compensation (3)      1,190
     359           4,271
        877       
Non-GAAP operating income (loss)   $  3,128
  $  94        $  4,674
     $  (7,374  )   
               
GAAP net income (loss) attributable to common stockholders
  $  3,409   $  (1,940  )     $  (859  )   $  (13,906  )   
Non-cash stock-based compensation (3)    1,190
   359       4,271
    877     
Accretion to preferred stock (4)      -      1,483           2,853         5,931       
Non-GAAP net income (loss) attributable to common stockholders
  $  4,599
  $  (98  )     $  6,265
     $  (7,098  )   
               
               
GAAP net income (loss) per common share - basic   $  0.06   $  (0.26  )     $  (0.03  )   $  (1.90  )   
Non-cash stock-based compensation (3)    0.02    0.05       0.13     0.12     
Accretion to preferred stock (4)      -      0.20           0.08         0.81       
Non-GAAP net income (loss) per common share - basic
  $  0.08   $  (0.01  )     $  0.18      $  (0.97  )   
               
GAAP net income (loss) per common share - diluted   $  0.05   $  (0.26  )     $  (0.03  )   $  (1.90  )   
Non-cash stock-based compensation (3)    0.02    0.05       0.13     0.12     
Accretion to preferred stock (4)      -      0.20           0.08         0.81       
Non-GAAP net income (loss) per common share - diluted   $  0.07   $  (0.01  )     $  0.18      $  (0.97  )   
               
Shares used in per common share calculations:             
Basic    57,505    7,469       33,989     7,319     
Diluted    63,484    7,469       33,989     7,319     
               
Notes: 
               
(1) Percentage change for the three months ended January 31, 2008 as compared with the three months ended January 31, 2007. 
(2) Percentage change for the twelve months ended January 31, 2008 as compared with the twelve months ended January 31, 2007. 
               
Footnotes - Adjustments: 
               
(3) Represents non-cash compensation charges associated with stock options granted as follows: 
               
  For the three months ended     For the twelve months ended   
  January 31     January 31   
     2008      2007           2008         2007       
               
Cost of product revenue   $  23   $  3      $  94    $  12     
Cost of services revenue    32    9       116     19     
Sales and marketing    354    75       1,222     207     
Research and development    350
   74       1,007
    160     
General and administrative      431      198           1,832         479       
Total non-cash stock-based compensation expense   $  1,190
  $  359        $  4,271
     $  877       
               
               
(4) Represents accretion of preferred stock dividends on Netezza's Series A through D convertible redeemable preferred stock prior to its conversion to common stock on July 24, 2007. 

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