Third quarter revenue increased 23%
year-over-year to $153.0 million
Quarterly GAAP operating loss of $(24.2)
million; Non-GAAP operating income of $3.0 million
New Relic, Inc. (NYSE: NEWR), the industry’s largest and most
comprehensive cloud-based observability platform built to help
customers create more perfect software, today announced financial
results for the third quarter of fiscal year 2020.
“We’re pleased with the feedback and early signs of success
we’ve seen from customers adopting the new capabilities across the
New Relic One platform,” said Lew Cirne, CEO and founder, New
Relic. “With the recent introduction of our platform innovations
and new executives, we have the pieces of our strategy in place to
capitalize on our immense opportunity to help customers create more
perfect software.”
Third Quarter Fiscal Year 2020 Financial Highlights:
- Revenue of $153.0 million, compared to $124.0 million for the
third quarter of fiscal 2019.
- GAAP loss from operations was $(24.2) million, compared to
$(8.5) million for the third quarter of fiscal 2019.
- Non-GAAP income from operations was $3.0 million, compared to
$7.8 million for the third quarter of fiscal 2019.
- GAAP net loss attributable to New Relic per basic share was
$(0.46), compared to a loss of $(0.18) per basic share for the
third quarter of fiscal 2019.
- Non-GAAP net income attributable to New Relic per diluted share
was $0.09, compared to $0.19 per diluted share for the third
quarter of fiscal 2019.
- Cash, cash equivalents and short-term investments were $736.7
million at the end of the third quarter of fiscal 2020, compared
with $771.5 million at the end of the second quarter of fiscal
2020.
Third Quarter & Recent Business Highlights:
- $100K+ Paid Business Accounts as of December 31, 2019 of 926,
compared to 816 as of December 31, 2018.
- 62% of ARR from Enterprise Paid Business Accounts as of
December 31, 2019, compared to 56% as of December 31, 2018.
- Dollar-Based Net Expansion Rate for the third quarter of fiscal
2020 of 109%, compared to 122% as of the third quarter of fiscal
2019.
- Acquired technology and team members from IOpipe, Inc. to
advance serverless monitoring.
- Bill Staples announced as Chief Product Officer.
- Dmitri Chen joined as EVP and General Manager, Asia-Pacific and
Japan.
- Gregory Ouillon joined as EMEA Field Chief Technology
Officer.
Outlook:
New Relic has not reconciled its expectations as to non-GAAP
income from operations or non-GAAP net income per diluted share to
their most directly comparable GAAP measures as a result of
uncertainty regarding, and the potential variability of,
reconciling items such as stock-based compensation expense, lawsuit
litigation cost and other expense, employer payroll taxes on equity
incentive plans and gain or loss from lease modification.
Accordingly, reconciliation is not available without unreasonable
effort, although it is important to note that these factors could
be material to New Relic’s results computed in accordance with
GAAP.
- Fourth Quarter Fiscal 2020 Outlook:
- Revenue between $154.0 million and $156.0 million, representing
year-over-year growth of between 17% and 18%, respectively.
- Non-GAAP income (loss) from operations of between $(2.0)
million and break even.
- Non-GAAP net income attributable to New Relic per diluted share
between $0.02 and $0.06.
- Full Year Fiscal 2020 Outlook:
- Revenue between $594.0 million and $596.0 million (up from $588
million and $593 million), representing year-over-year growth of
24%.
- Non-GAAP income from operations of between $19.0 million and
$21.0 million (down from $21 million and $25 million).
- Non-GAAP net income attributable to New Relic per diluted share
between $0.54 and $0.59 (down from $0.60 and $0.67).
Conference Call Details:
- What: New Relic financial results for the third quarter
of fiscal year 2020 and outlook for the fourth quarter and the full
year of fiscal 2020.
- When: February 4, 2020 at 2:00 P.M. Pacific Time (5:00
P.M. Eastern Time)
- Dial in: To access the call in the U.S., please dial
(833) 241-7256, and for international callers, please dial (647)
689-4220. Callers may provide confirmation number 7390353 to access
the call more quickly, and are encouraged to dial into the call 10
to 15 minutes prior to the start to prevent any delay in
joining.
- Webcast: http://ir.newrelic.com (live and replay)
- Replay: Following the completion of the call through
11:59 p.m. Eastern Time on February 11, 2020, a telephone replay
will be available by dialing (800) 585-8367 from the United States
or (416) 621-4642 internationally with conference ID 7390353.
About New Relic
New Relic is the industry’s largest and most comprehensive
cloud-based observability platform built to help customers create
more perfect software. The world’s best software and DevOps teams
rely on New Relic to move faster, make better decisions and create
best-in-class digital experiences. If you run software, you need to
run New Relic. Learn why more than 50% of the Fortune 100 trust New
Relic to make the world’s software run at newrelic.com.
Forward-Looking Statements
This press release and the earnings call referencing this press
release contain “forward-looking” statements, as that term is
defined under the federal securities laws, including but not
limited to statements regarding: New Relic’s future financial
performance, including its outlook on financial results for the
fourth quarter and for the full year of fiscal 2020, such as
revenue, non-GAAP income from operations, non-GAAP net income
attributable to New Relic per diluted share, cash from operations,
free cash flow, gross margins, operating margins, deferred revenue,
capital expenditures and capitalized software; New Relic’s targets
for ARR for fiscal year 2020, ARR growth in fiscal year 2021 of at
least 200 basis points year over year and the resulting impact on
operating cash flows and New Relic’s ability to hit its long-term
targets for fiscal year 2023; anticipated metrics transitions; the
success and capabilities of the New Relic One platform; planned
product initiatives and launches; New Relic’s ability to capitalize
on its immense opportunity to help customers create more perfect
software; New Relic making it easier for customers to adopt its
full platform of products; and management changes and the expected
benefits from these changes. These forward-looking statements are
based on New Relic’s current assumptions, expectations and beliefs
and are subject to substantial risks, uncertainties, assumptions
and changes in circumstances that may cause New Relic’s actual
results, performance or achievements to differ materially from
those expressed or implied in any forward-looking statement.
The risks and uncertainties referred to above include, but are
not limited to, New Relic’s ability to generate sufficient revenue
to achieve and sustain profitability, particularly in light of its
significant ongoing expenses; New Relic’s short operating history
in an evolving industry; New Relic’s ability to manage its
significant recent growth; the development of the overall market
for SaaS business software; the dependence of New Relic’s business
on its customers purchasing additional subscriptions and products
from it and renewing their subscriptions; New Relic’s ability to
develop enhancements to its products, increase adoption and usage
of its products and introduce new products that achieve market
acceptance; the dependence on customers expanding their use of New
Relic’s products beyond the current predominant use cases; New
Relic’s ability to determine optimal prices for its products; New
Relic’s ability to expand its marketing and sales capabilities and
increase sales of its solutions to large enterprises while
mitigating the risks associated with serving such customers;
privacy concerns, including changes in privacy laws and
regulations, which could result in additional cost and liability to
New Relic or inhibit sales; New Relic’s ability to effectively
compete in intensely competitive markets and respond effectively to
rapidly changing technology, evolving industry standards and
changing customer needs, requirements or preferences; fluctuation
of New Relic’s quarterly results; New Relic’s dependence on lead
generation strategies to drive sales and revenue; interruptions or
performance problems associated with New Relic’s technology and
infrastructure; New Relic’s dependence on SaaS technologies and
related services from third parties; defects or disruptions in New
Relic’s products; the expense and complexity of New Relic’s ongoing
and planned investments in data center hosting facilities; risks
associated with international operations; New Relic’s ability to
protect its intellectual property rights; risks related to the
acquisition and integration of businesses or technologies; certain
risks associated with incurring indebtedness, including risks
related to servicing New Relic’s convertible senior notes and
related capped call transactions; and other “Risk Factors” set
forth in New Relic’s most recent filings with the Securities and
Exchange Commission (the “SEC”).
Further information on these and other factors that could affect
New Relic’s financial results and the forward-looking statements in
this press release and in the earnings call referencing this press
release is included in the filings New Relic makes with the SEC
from time to time, particularly under the captions “Risk Factors”
and “Management’s Discussion and Analysis of Financial Condition
and Results of Operations,” including our Annual Report on Form
10-K and subsequent Quarterly Reports on Form 10-Q and subsequent
filings. Copies of these documents may be obtained by visiting New
Relic’s Investor Relations website at http://ir.newrelic.com or the
SEC’s website at www.sec.gov.
All information provided in this press release and in the
earnings call is as of the date hereof and New Relic assumes no
obligation and does not intend to update these forward-looking
statements, except as required by law.
Non-GAAP Financial Measures
New Relic discloses the following non-GAAP financial measures in
this press release and the earnings call referencing this press
release: non-GAAP income from operations, non-GAAP gross profit,
non-GAAP gross margin, non-GAAP operating expenses (sales and
marketing, research and development, general and administrative),
non-GAAP operating margin, non-GAAP net income attributable to New
Relic, non-GAAP net income attributable to New Relic per diluted
share, non-GAAP net income attributable to New Relic per basic
share and free cash flow. New Relic uses each of these non-GAAP
financial measures internally to understand and compare operating
results across accounting periods, for internal budgeting and
forecasting purposes, for short- and long-term operating plans, and
to evaluate New Relic’s financial performance. In addition, New
Relic’s bonus plan for eligible employees and executives is based
in part on non-GAAP income from operations. New Relic believes
these non-GAAP financial measures are useful to investors, as a
supplement to GAAP measures, in evaluating its operational
performance, as further discussed below. New Relic’s non-GAAP
financial measures may not provide information that is directly
comparable to that provided by other companies in its industry, as
other companies in its industry may calculate non-GAAP financial
results differently, particularly related to non-recurring and
unusual items. In addition, there are limitations in using non-GAAP
financial measures because the non-GAAP financial measures are not
prepared in accordance with GAAP and may be different from non-GAAP
financial measures used by other companies and exclude expenses
that may have a material impact on New Relic’s reported financial
results.
Non-GAAP financial measures should not be considered in
isolation from, or as a substitute for, financial information
prepared in accordance with GAAP. A reconciliation of the
historical non-GAAP financial measures to their most directly
comparable GAAP measures has been provided in the financial
statement tables included below in this press release.
New Relic defines non-GAAP income from operations, non-GAAP
gross profit, non-GAAP gross margin, non-GAAP operating expenses
(sales and marketing, research and development, general and
administrative), non-GAAP operating margin, non-GAAP net income
attributable to New Relic, non-GAAP net income attributable to New
Relic per diluted share and non-GAAP net income attributable to New
Relic per basic share as the respective GAAP balances, adjusted
for, as applicable: (1) stock-based compensation expense, (2) lease
exit costs and accelerated depreciation, (3) amortization of
stock-based compensation capitalized in software development costs,
(4) the amortization of purchased intangibles, (5) employer payroll
tax expense on equity incentive plans, (6) amortization of debt
discount and issuance costs, and in certain periods (7) the
transaction costs related to acquisitions, (8) lawsuit litigation
cost and other expense and (9) gain or loss from lease
modification. Non-GAAP net income per basic and diluted share is
calculated as non-GAAP net income attributable to New Relic divided
by weighted-average shares used to compute net income attributable
to New Relic per share, basic and diluted, with the number of
weighted-average shares decreased to reflect the anti-dilutive
impact of the capped call transactions entered into in connection
with the 0.50% Convertible Senior Notes due 2023 issued in May
2018. New Relic defines free cash flow as GAAP cash from
operations, minus capital expenditures and minus capitalized
software. Investors are encouraged to review the reconciliation of
these historical non-GAAP financial measures to their most directly
comparable GAAP financial measures.
Management believes these non-GAAP financial measures are useful
to investors and others in assessing New Relic’s operating
performance due to the following factors:
Stock-based compensation expense and amortization of stock-based
compensation capitalized in software development costs. New Relic
utilizes share-based compensation to attract and retain employees.
It is principally aimed at aligning their interests with those of
its stockholders and at long-term retention, rather than to address
operational performance for any particular period. As a result,
share-based compensation expenses vary for reasons that are
generally unrelated to financial and operational performance in any
particular period.
Lease exit costs and accelerated depreciation. New Relic entered
into an agreement to exit the lease of its 123 Mission premises in
San Francisco, California. In connection with this agreement and
subsequent relocation, New Relic accelerated depreciation and other
expenses associated with the remaining lease term. New Relic
believes it is useful to exclude this depreciation and these other
expenses because it does not consider such amounts to be part of
the ongoing operation of its business.
Amortization of purchased intangibles and transaction costs
related to acquisitions. New Relic views amortization of purchased
intangible assets as items arising from pre-acquisition activities
determined at the time of an acquisition. While these intangible
assets are evaluated for impairment regularly, amortization of the
cost of purchased intangibles is an expense that is not typically
affected by operations during any particular period. Similarly, New
Relic views acquisition-related expenses as events that are not
necessarily reflective of operational performance during a
period.
Lawsuit litigation cost and other expense. New Relic may from
time to time incur charges or benefits related to litigation that
are outside of the ordinary course of New Relic’s business. New
Relic believes it is useful to exclude such charges or benefits
because it does not consider such amounts to be part of the ongoing
operation of New Relic’s business and because of the singular
nature of the claims underlying the matter.
Employer payroll tax expense on equity incentive plans. New
Relic excludes employer payroll tax expense on equity incentive
plans as these expenses are tied to the exercise or vesting of
underlying equity awards and the price of New Relic’s common stock
at the time of vesting or exercise. As a result, these taxes may
vary in any particular period independent of the financial and
operating performance of New Relic’s business.
Amortization of debt discount and issuance costs. In May 2018,
New Relic issued $500.25 million of convertible senior notes due in
2023, which bear interest at an annual fixed rate of 0.50%. The
effective interest rate of the convertible senior notes was
approximately 5.74%. This is a result of the debt discount recorded
for the conversion feature that is required to be separately
accounted for as equity, and debt issuance costs, which reduce the
carrying value of the convertible debt instrument. The debt
discount is amortized as interest expense together with the
issuance costs of the debt. The expense for the amortization of
debt discount and debt issuance costs is a non-cash item, and we
believe the exclusion of this interest expense will provide for a
more useful comparison of our operational performance in different
periods.
Gain or loss from lease modification. New Relic may incur a gain
or loss from modification related to lease agreements. New Relic
believes it is useful to exclude such charges or benefits because
it does not consider such amounts to be part of the ongoing
operation of New Relic’s business and because of the singular
nature of benefit or charge from such events.
Anti-dilutive impact of capped call transactions. In connection
with the issuance of its convertible senior notes due in 2023, New
Relic entered into capped call transactions to offset potential
dilution from the embedded conversion feature in the notes.
Although New Relic cannot reflect the anti-dilutive impact of the
capped call transactions under GAAP, New Relic does reflect the
anti-dilutive impact of the capped call transactions in non-GAAP
net income attributable to New Relic per share, basic and diluted,
to provide investors with useful information in evaluating the
financial performance of the company on a per share basis.
Additionally, New Relic’s management believes that the non-GAAP
financial measure free cash flow is meaningful to investors because
management reviews cash flows generated from operations after
taking into consideration capital expenditures and the
capitalization of software development costs due to the fact that
these expenditures are considered to be a necessary component of
ongoing operations.
Operating Metrics
New Relic defines the number of paid business accounts at the
end of any particular period as the number of accounts at the end
of the period as identified by a unique account identifier for
which New Relic has recognized revenue on the last day of the
period indicated. A single organization or customer may have
multiple paid business accounts for separate divisions, segments,
or subsidiaries. New Relic defines an enterprise paid business
account as a paid business account that New Relic measures to have
over 1,000 employees.
New Relic’s monthly recurring revenue represents the revenue
that New Relic would contractually expect to receive from those
customers over the following month, without any increase or
reduction in any of their subscriptions. Similarly, annual
recurring revenue represents the revenue that New Relic would
contractually expect to receive from those customers over the
following 12-month period, without any increase or reduction in any
of their subscriptions.
New Relic’s dollar-based net expansion rate compares its
recurring subscription revenue from customers from one period to
the next. It is increased when customers increase their use of New
Relic’s products, use additional products, or upgrade to a higher
subscription tier. New Relic’s dollar-based net expansion rate is
reduced when customers decrease their use of New Relic’s products,
use fewer products, or downgrade to a lower subscription tier.
New Relic is a registered trademark of New Relic, Inc.
All product and company names herein may be trademarks of their
registered owners.
Condensed Consolidated Statements of Operations (In
thousands, except per share data; unaudited)
Three Months Ended December
31,
Nine Months Ended December
31,
2019
2018
2019
2018
Revenue
$
153,028
$
124,011
$
439,853
$
347,128
Cost of revenue
26,402
20,206
75,164
55,703
Gross profit
126,626
103,805
364,689
291,425
Operating expenses:
Research and development
38,387
26,182
106,858
72,747
Sales and marketing
87,704
66,461
244,711
185,091
General and administrative
24,751
19,702
71,129
51,293
Total operating expenses
150,842
112,345
422,698
309,131
Loss from operations
(24,216
)
(8,540
)
(58,009
)
(17,706
)
Other income (expense):
Interest income
3,793
3,922
11,944
9,026
Interest expense
(5,953
)
(5,669
)
(17,660
)
(13,932
)
Other income (expense), net
(465
)
(8
)
2,828
(1,285
)
Loss before income taxes
(26,841
)
(10,295
)
(60,897
)
(23,897
)
Income tax provision (benefit)
894
(106
)
1,518
440
Net loss
$
(27,735
)
$
(10,189
)
$
(62,415
)
$
(24,337
)
Net loss attributable to redeemable non-controllinginterest
540
86
1,437
283
Net loss attributable to New Relic
$
(27,195
)
$
(10,103
)
$
(60,978
)
$
(24,054
)
Net loss attributable to New Relic per share, basic anddiluted
$
(0.46
)
$
(0.18
)
$
(1.05
)
$
(0.42
)
Weighted-average shares used to compute net loss pershare, basic
and diluted
58,733
57,096
58,352
56,663
Condensed Consolidated Balance Sheets(In thousands, except
par value; unaudited)
December 31,
March 31,
2019
2019
Assets Current assets:
Cash and cash equivalents
$
178,997
$
234,356
Short-term investments
557,662
510,372
Accounts receivable, net of allowance for doubtful accounts of
$2,025 and $2,457,respectively
110,590
120,605
Prepaid expenses and other current assets
18,872
21,838
Deferred contract acquisition costs
29,799
27,161
Total current assets
895,920
914,332
Property and equipment, net
105,040
80,742
Restricted cash
5,639
8,805
Goodwill
45,112
41,512
Intangible assets, net
14,059
13,855
Deferred contract acquisition costs, non-current
25,315
26,218
Lease right-of-use assets
59,838
— Other assets, non-current
7,270
4,763
Total assets
$
1,158,193
$
1,090,227
Liabilities, redeemable non-controlling interest, and
stockholders’ equity Current liabilities:
Accounts payable
$
15,582
$
10,249
Accrued compensation and benefits
25,550
23,537
Other current liabilities
12,508
14,572
Deferred revenue
236,897
267,000
Lease liabilities
8,789
— Total current liabilities
299,326
315,358
Convertible senior notes, net
421,655
405,937
Lease liabilties, non-current
59,849
— Deferred rent, non-current —
11,025
Deferred revenue, non-current
110
4,597
Other liabilities, non-current
1,460
947
Total liabilities
782,400
737,864
Redeemable non-controlling interest
2,274
2,733
Stockholders’ equity: Common stock, $0.001 par
value
59
58
Treasury stock - at cost (260 shares)
(263
)
(263
)
Additional paid-in capital
738,363
654,759
Accumulated other comprehensive income
1,907
645
Accumulated deficit
(366,547
)
(305,569
)
Total stockholders’ equity
373,519
349,630
Total liabilities, redeemable non-controlling interest, and
stockholders’ equity
$
1,158,193
$
1,090,227
Condensed Consolidated Statements of Cash Flows(In
thousands; unaudited)
Nine Months Ended December
31,
2019
2018
Cash flows from operating activities:
Net loss attributable to New Relic
$
(60,978
)
$
(24,054
)
Net loss attributable to redeemable non-controlling interest
(1,437
)
(283
)
Net loss:
$
(62,415
)
$
(24,337
)
Adjustments to reconcile net loss to net cash provided by operating
activities: Depreciation and amortization
56,237
38,585
Stock-based compensation expense
70,496
39,624
Amortization of debt discount and issuance costs
15,718
12,313
Gain (loss) on lease modification
(3,006
)
— Other
(2,919
)
(800
)
Changes in operating assets and liabilities, net of acquisition of
business: Accounts receivable, net
10,015
(3,411
)
Prepaid expenses and other assets
(204
)
3,262
Deferred contract acquisition costs
(25,786
)
(27,689
)
Lease right-of-use assets
19,539
— Accounts payable
4,257
3,850
Accrued compensation and benefits and other liabilities
1,136
7,771
Lease liabilities
(16,812
)
— Deferred revenue
(34,590
)
16,827
Deferred rent —
899
Net cash provided by operating activities
31,666
66,894
Cash flows from investing activities:
Purchases of property and equipment
(49,705
)
(29,715
)
Cash paid for acquisitions, net of cash acquired
(4,250
)
(5,556
)
Purchases of short-term investments
(337,070
)
(581,504
)
Proceeds from sale and maturity of short-term investments
292,409
161,237
Capitalized software development costs
(4,463
)
(3,810
)
Net cash used in investing activities
(103,079
)
(459,348
)
Cash flows from financing activities:
Investment from redeemable non-controlling interest
978
3,596
Proceeds from issuance of convertible senior notes, net of issuance
costs —
488,669
Purchase of capped call related to convertible senior notes —
(63,182
)
Proceeds from employee stock purchase plan
5,933
4,887
Proceeds from exercise of employee stock options
5,977
11,519
Net cash provided by financing activities
12,888
445,489
Net increase (decrease) in cash, cash equivalents and restricted
cash
(58,525
)
53,035
Cash, cash equivalents and restricted cash at beginning of period
243,161
140,681
Cash, cash equivalents and restricted cash at end of period
$
184,636
$
193,716
Reconciliation from GAAP to
Non-GAAP Results (In thousands, except per share data;
unaudited)
Three Months Ended December
31,
Nine Months Ended December
31,
2019
2018
2019
2018
Reconciliation of gross profit and gross
margin: GAAP gross profit
$
126,626
$
103,805
$
364,689
$
291,425
Plus: Stock-based compensation expense
1,315
934
3,837
2,522
Plus: Lease exit costs and accelerated depreciation expense —
—
73
— Plus: Amortization of purchased intangibles
415
440
1,295
833
Plus: Amortization of stock-based compensation capitalized in
softwaredevelopment costs
219
192
653
555
Plus: Employer payroll tax on employee equity incentive plans
33
44
186
228
Non-GAAP gross profit
$
128,608
$
105,415
$
370,733
$
295,563
GAAP gross margin
83
%
84
%
83
%
84
%
Non-GAAP adjustments
1
%
1
%
1
%
1
%
Non-GAAP gross margin
84
%
85
%
84
%
85
%
Reconciliation of operating
expenses:
GAAP research and development
$
38,387
$
26,182
$
106,858
$
72,747
Less: Stock-based compensation expense
(8,611
)
(4,322
)
(23,073
)
(11,443
)
Less: Lease exit costs and accelerated depreciation expense —
—
(326
)
— Less: Employer payroll tax on employee equity
incentive plans
(120
)
(170
)
(641
)
(787
)
Non-GAAP research and development
$
29,656
$
21,690
$
82,818
$
60,517
GAAP sales and marketing
$
87,704
$
66,461
$
244,711
$
185,091
Less: Stock-based compensation expense
(11,090
)
(6,222
)
(30,682
)
(17,040
)
Less: Lease exit costs and accelerated depreciation expense —
—
(2,240
)
— Less: Employer payroll tax on employee equity
incentive plans
(177
)
(167
)
(615
)
(729
)
Non-GAAP sales and marketing
$
76,437
$
60,072
$
211,174
$
167,322
GAAP general and administrative
$
24,751
$
19,702
$
71,129
$
51,293
Less: Stock-based compensation expense
(4,934
)
(3,286
)
(12,904
)
(8,620
)
Less: Lease exit costs and accelerated depreciation expense —
—
(1,002
)
— Less: Transaction costs related to acquisitions
(251
)
(476
)
(251
)
(806
)
Less: Lawsuit litigation cost and other expense —
—
(1,521
)
— Less: Employer payroll tax on employee equity
incentive plans
(52
)
(76
)
(244
)
(308
)
Non-GAAP general and administrative
$
19,514
$
15,864
$
55,207
$
41,559
Reconciliation of income (loss) from
operations and operating margin:
GAAP loss from operations
$
(24,216
)
$
(8,540
)
$
(58,009
)
$
(17,706
)
Plus: Stock-based compensation expense
25,950
14,764
70,496
39,624
Plus: Lease exit costs and accelerated depreciation expense —
—
3,641
— Plus: Amortization of purchased intangibles
415
440
1,295
833
Plus: Transaction costs related to acquisitions
251
476
251
806
Plus: Amortization of stock-based compensation capitalized in
softwaredevelopment costs
219
192
653
555
Plus: Lawsuit litigation cost and other expense —
—
1,521
— Plus: Employer payroll tax on employee equity
incentive plans
382
457
1,686
2,052
Non-GAAP income from operations
$
3,001
$
7,789
$
21,534
$
26,164
GAAP operating margin
-16
%
-7
%
-13
%
-5
%
Non-GAAP adjustments
18
%
13
%
18
%
13
%
Non-GAAP operating margin
2
%
6
%
5
%
8
%
Reconciliation of net income
(loss):
GAAP net loss attributable to New Relic
$
(27,195
)
$
(10,103
)
$
(60,978
)
$
(24,054
)
Plus: Stock-based compensation expense
25,950
14,764
70,496
39,624
Plus: Lease exit costs and accelerated depreciation expense —
—
3,641
— Plus: Amortization of purchased intangibles
415
440
1,295
833
Plus: Transaction costs related to acquisitions
251
476
251
806
Plus: Amortization of stock-based compensation capitalized in
softwaredevelopment costs
219
192
653
555
Plus: Lawsuit litigation cost and other expense —
—
1,521
— Plus: Employer payroll tax on employee equity
incentive plans
382
457
1,686
2,052
Plus: Amortization of debt discount and issuance costs
5,314
5,021
15,718
12,312
Less: Gain on lease modification — —
(3,006
)
—
Non-GAAP net income attributable to New Relic
$
5,336
$
11,247
$
31,277
$
32,128
Non-GAAP net income attributable to New Relic per share:
Basic
$
0.09
$
0.20
$
0.54
$
0.57
Diluted
$
0.09
$
0.19
$
0.52
$
0.54
Shares used in non-GAAP per share calculations:
Basic
58,733
57,096
58,352
56,663
Diluted
60,358
59,702
60,299
59,675
Reconciliation of GAAP Cash
Flows from Operating Activities to Free Cash Flows (In
thousands; unaudited)
Three Months Ended December
31,
Nine Months Ended December
31,
2019
2018
2019
2018
Net cash provided by (used in) operating activities
$
(13,838
)
$
8,680
$
31,666
$
66,894
Capital expenditures
(18,135
)
(15,460
)
(49,705
)
(29,715
)
Capitalized software development costs
(1,410
)
(748
)
(4,463
)
(3,810
)
Free cash flows (Non-GAAP)
$
(33,383
)
$
(7,528
)
$
(22,502
)
$
33,369
Net cash used in investing activities
$
(52,514
)
$
(22,485
)
$
(103,079
)
$
(459,348
)
Net cash provided by financing activities
$
2,923
$
2,521
$
12,888
$
445,489
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200204005978/en/
Investors Greg McDowell ICR, LLC 503-336-9280
IR@newrelic.com
Media Andrew Schmitt New Relic, Inc. 415-869-7109
PR@newrelic.com
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