Netezza Announces Fourth Quarter and Full Fiscal Year 2008 Financial Results

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.

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(R) (NPS(R)) family of streaming
analytic(TM) 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.

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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
=========== ===========
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Netezza Corporation
Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)

For the three For the twelve
months ended 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
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Netezza Corporation
Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands, except per share amounts and percentages)
(unaudited)

% %
For the three Change For the twelve Change
months ended for months ended for
January 31 three January 31 twelve
months 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 For the twelve
months ended 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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