Netezza Announces Fourth Quarter And Full Fiscal Year 2009 Financial Results

Revenues increased 48% over the prior year and 28% over the prior year quarter

Marlborough, Mass. — March 3, 2009 — Netezza Corporation (NYSE Arca: NZ), the global leader in data warehouse appliances, today reported its financial results for the fourth quarter and full fiscal year ended January 31, 2009.

“I am very pleased with the continued progress that we have demonstrated in the marketplace over this past year and in our fourth quarter,” said Jim Baum, Netezza’s Chief Executive Officer. “We added 22 new customers over this past quarter covering each of our key vertical markets, evidencing continued demand and expansion of our customer base. We believe we continue to be very well positioned to benefit from the growth of the data warehousing and analytics market.”

Total revenue for the fourth quarter of fiscal 2009 increased 28% to $50.6 million compared with $39.5 million for the same period one year ago. GAAP net income for the fourth quarter of fiscal 2009 was $22.8 million, which includes a significant tax benefit related to the release of a valuation allowance on deferred tax assets, compared with $3.4 million for the same period one year ago. GAAP diluted net income per share for the fourth quarter of fiscal 2009 was $0.37 compared with $0.05 for the same period one year ago. Non-GAAP net income for the fourth quarter of fiscal 2009 was $5.3 million compared with $4.6 million for the same period one year ago. Non-GAAP diluted net income per share for the fourth quarter of fiscal 2009 was $0.09 compared with $0.07 for the same period one year ago.

Total revenue for the full fiscal year 2009 increased 48% to $187.8 million compared with $126.7 million for fiscal year 2008. GAAP net income attributable to common stockholders for the full fiscal year 2009 was $31.5 million compared with a GAAP net loss attributable to common stockholders of $0.9 million for fiscal year 2008. GAAP diluted net income per share for the full fiscal year 2009 was $0.50 compared to a GAAP diluted net loss per share of $0.03 for fiscal year 2008. Non-GAAP net income attributable to common stockholders for the full fiscal year 2009 was $20.0 million compared with $6.3 million for fiscal year 2008. Non-GAAP diluted net income per share for the full fiscal year 2009 was $0.32 compared with $0.18 for fiscal year 2008.

Non-GAAP operating income, non-GAAP net income, non-GAAP net income attributable to common stockholders and non-GAAP diluted net income per share exclude non-cash stock-based compensation, amortization of acquired intangible assets, the net mark-to-market impact related to an unrealized gain on a put option received for Auction Rate Securities (ARS) offset by the unrealized loss on the underlying ARS, an income tax benefit resulting from the release of a valuation allowance on deferred tax assets 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.”

Financial Guidance:

“We are very pleased with our fourth quarter and year-end results,” said Patrick Scannell, Senior Vice President and Chief Financial Officer of Netezza. “We have strengthened our business on multiple fronts over the course of this past year. We are very well positioned competitively and we continue to gain market share. During the year we added 88 new customers, and have built a maintenance revenue stream in excess of $44 million annually, with 99% of our customers on that program. We have continued to invest in both product and our channels while showing both gross margin and operating margin expansion, while also generating cash from operations. We believe that we have positioned the company for substantial growth when the external macro conditions improve. However, while our very near term visibility remains good, we are not in a position to comment on the year’s outlook, given the macro economic uncertainty that is evident today in the marketplace.”

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, amortization of acquired intangible assets, the net mark-to-market impact related to an unrealized gain on a put option received for ARS offset by the unrealized loss on the underlying ARS, an income tax benefit resulting from the release of a valuation allowance on deferred tax assets and, where applicable, accretion of preferred stock dividends. Because of the varying valuation methodologies and assumptions that companies use under FAS123(R) and that companies use to value and amortize acquired intangible assets, 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 comparisons with other companies. In addition, since Netezza had no amortization of acquired intangible assets in fiscal 2008, Netezza is presenting its operating results for fiscal 2009 without this charge to allow for a more meaningful comparison of current periods to prior year periods. During the fourth fiscal quarter of 2009, a net mark-to-market charge related to an unrealized gain on a put option received in the quarter for ARS offset by the unrealized loss on the underlying ARS was recorded to other income (expense), net. This amount is excluded to aid in comparing current and future operating results with those of past periods. During the fourth fiscal quarter of 2009, an income tax benefit was realized upon the release of a valuation allowance on specific deferred tax assets that was no longer required. This income tax benefit is excluded from non-GAAP operating results to aid in comparing current and future operating results with those of past periods. Upon the closing of Netezza’s initial public offering, accretion of preferred dividends was no longer applicable due to the conversion of preferred stock to common stock, and Netezza believes that excluding accretion of preferred dividends from non-GAAP operating results will 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.

Quarterly Conference Call:

Netezza will host a conference call and webcast at 4:30 PM Eastern Time (1:30 PM Pacific Time) on March 3, 2009 to discuss its fourth quarter and full fiscal year 2009 results and business outlook.

The conference call can be accessed by dialing +1 866 783-2141 for participants in the United States and by dialing +1 857 350-1600 for participants outside the United States. The passcode for the conference call is 72117215. 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 16386554.

The webcast will be accessible from the “Investor Relations” section of Netezza’s Web site (http://www.netezza.com). The webcast will be archived on Netezza’s Web site for a period of one year.

About Netezza Corporation:

Netezza is the global leader in data warehouse and 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 appliances brings appliance simplicity to a broad range of complex data warehouse and analytic challenges. Customers who have realized the benefits of Netezza appliances include Ahold, Amazon.com, CNET Networks, Debenhams, Department of Veterans Affairs, Epsilon, iBasis, Nationwide, Neiman Marcus, Orange UK, Premier, Inc., Ross Stores, Ryder System, Inc., The Carphone Warehouse and Virgin Media. Based in Marlborough, Mass., Netezza has offices in Washington, DC, the United Kingdom and the Asia Pacific region. For more information about Netezza, please visit www.netezza.com.

Netezza Performance Server and NPS are trademarks of Netezza Corporation. Other names may be trademarks of their respective owners.

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 Annual Report on Form 10-K for the year ended January 31, 2008, and most recent Quarterly Report on Form 10-Q, each of which is on file with the SEC and available in the investor relations section of Netezza’s Web site at http://www.netezza.com and on the SEC Web site at http://www.sec.gov. In addition, the forward-looking statements included in this press release represent our views as of March 3, 2009. 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 March 3, 2009.