November 29, 2007

Netezza has another big October quarter

Netezza reported a big October quarter, ahead of expectations. And official guidance for next quarter is essentially flat quarter-over-quarter, suggesting Q3 was indeed surprisingly big. However, Netezza’s year-over-year growth for Q3 was a little under 50%, suggesting the quarter wasn’t so remarkable after all. (Netezza has a January fiscal year.)

Tentative conclusion: Netezza just tends to have big October quarters, perhaps by timing sales cycles to finish soon after the late September user conference. If Netezza’s user conference ever moves to later in the fall, expect Q3 to be weak that year.

Netezza reported 18 new customers, double last year’s figure. And if next quarter’s overall revenue is sequentially flat, then new customer revenue (vs. add-on and some services) will surely be down. 8-12 new customers/quarter is Netezza’s stated guidance, but given that the company is growing rapidly, I imagine the high end of that range would be more sincere. (Similarly, official guidance on Q4 revenue may be a bit lowballed.)

And — many compliments to them for their specificity — Netezza gave an aggregate figure of 127 recognized-revenue customers over the life of the company. (That excludes a few recent closed deals where the boxes haven’t shipped yet or whatever.) I doubt any of DATAllegro, Vertica, the HP Neoview product line, etc. would be much over 10% of that figure. Greenplum might be a bit higher than the others, since they led with a low-cost rental option for a while (now deemphasized) and if I recall correctly got 20ish deals for same. But leave those out and they surely don’t have many customers yet either. Similar things could be said of Kognitio/White Cross (again going from memory here.)

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3 Responses to “Netezza has another big October quarter”

  1. Tom Briggs on December 3rd, 2007 11:43 am

    Call me a conspiracy theorist, but I’d guess that this has more to do with the end of the government’s fiscal year than the user conference…

  2. Curt Monash on December 3rd, 2007 2:52 pm

    The company probably discloses government vs. commercial business breakdowns.


  3. Curt Monash on December 6th, 2007 11:04 pm

    I just talked with the company. Contrary to what intuition might suggest, it turns out that government business does not (and did not) spike in the October quarter.

    And yeah, I think they’re playing the game that so many other companies play of “We’ll give understated guidance and then admit that our guidance is ‘conservative'”. Blech. As much as I understand why companies do that, I don’t like it. Anyhow, Netezza is FAR from being an isolated offender. I’ve actually seen analyst reports in which it is said that a company is “expected to exceed expectations.”


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