Second quarter revenue increased 14%
year-over-year to $166 million Quarterly GAAP operating loss of
$(42.9) million; Non-GAAP operating loss of $(5.3) million
New Relic, Inc. (NYSE: NEWR), the observability platform
company, today announced financial results for the second quarter
of fiscal year 2021.
“In 2Q, we delivered a radically simplified version of the New
Relic One observability platform to the market, and the early
response from customers has been encouraging,” said Lew Cirne, CEO
and founder, New Relic. “At the low end of the market, we're seeing
a whole new generation of individual developers adopt our free
offering. And, at the high end of the market, companies of all
sizes have been leveraging our offer of free and full entitlements
to evaluate New Relic as their complete observability platform.
While customer experimentation with the new product and pricing
model slowed sales cycles in the quarter, on average, customers
that are renewing on the new pricing model are growing their
commitment to New Relic by double digits.”
Second Quarter Fiscal Year 2021 Financial Highlights:
- Revenue of $166 million, compared to $146 million for the
second quarter of fiscal 2020.
- GAAP gross margin of 73% and non-GAAP gross margin of 75%.
- GAAP loss from operations was $(42.9) million, compared to
$(16.9) million for the second quarter of fiscal 2020.
- Non-GAAP income (loss) from operations was $(5.3) million,
compared to $11.2 million for the second quarter of fiscal
2020.
- GAAP net loss attributable to New Relic per basic share was
$(0.79), compared to a loss of $(0.32) per basic share for the
second quarter of fiscal 2020.
- Non-GAAP net income (loss) attributable to New Relic per
diluted share was $(0.07), compared to $0.24 per diluted share for
the second quarter of fiscal 2020.
- Cash provided by operating activities was $12.9 million and
free cash flow was $5.3 million for the second quarter of fiscal
2021.
- Cash, cash equivalents and short-term investments were $840
million at the end of the second quarter of fiscal 2021, compared
with $829 million at the end of the first quarter of fiscal
2021.
- Remaining performance obligations were $602 million at the end
of the second quarter of fiscal 2021, compared with $635 million at
the end of the first quarter of fiscal 2021. This represents the
aggregate unrecognized transaction price of remaining performance
obligations as of each of September 30, 2020 and June 30,
2020.
Key Operating Metrics*:
Jun-19
Sep-19
Dec-19
Mar-20
Jun-20
Sep-20
1Q20
2Q20
3Q20
4Q20
1Q21
2Q21
Annual Recurring Revenue, or ARR (in
millions)
$569
$591
$608
$642
$648
$649
Dollar-Based Net Expansion Rate
109%
112%
109%
116%
100%
98%
Percentage of ARR from Paid Business
Accounts > $100,000
70%
71%
72%
75%
76%
77%
Paid Business Accounts > $100,000
881
908
927
995
1,025
1,039
* In the fourth quarter of fiscal 2020, we
adjusted the way we define ARR to include partner revenue and
revenue from support subscriptions. This change results in
immaterial differences in the presentation of some numbers in the
chart above compared to our disclosures in historical filings.
Please refer to our Annual Report on Form 10-K for the fiscal year
ended March 31, 2020 for our definition of ARR and the differences
between these disclosures.
Recent Business Highlights:
- Expanded Global Strategic Collaboration Agreement with AWS to
Help Companies Accelerate Their Cloud Adoption Journey.
- Rated highest in 2020 Gartner Peer Insights “Voice of the
Customer”: Application Performance Monitoring Suites.
- Introduced “Observability for Good” Nonprofit Donation
Program.
- Partnered with Grafana Labs to Advance Open
Instrumentation.
- Appointed Anne DelSanto and David Henshall to the Board of
Directors; Hope Cochran Named Chair of the Board.
- Delivered Reimagined Observability Platform With Unified User
Experience, and Simple, Predictable Pricing to Help Companies
Create More Perfect Software.
Outlook:
- Third Quarter Fiscal 2021 Outlook:
- Revenue between $163 million and $165 million, representing
year-over-year growth of approximately 7%.
- Non-GAAP loss from operations of between $(9.0) million and
$(11.0) million.
- Non-GAAP net loss attributable to New Relic per diluted share
between $(0.13) and $(0.17).
- ARR between $661 million and $663 million, representing
year-over-year growth of approximately 9%, compared to $608 million
as of December 31, 2019.
New Relic has not reconciled its expectations as to non-GAAP
income (loss) from operations or non-GAAP net income (loss) 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.
Conference Call and Investor Letter Details:
- What: New Relic financial results for the second quarter
of fiscal year 2021 and outlook for the third quarter of fiscal
2021.
- When: November 5, 2020 at 2:00 P.M. Pacific Time (5:00
P.M. Eastern Time)
- Dial in: To access the call in the United States, please
dial (866) 652-5200, and for international callers, please dial
(412) 317-6060. Callers may provide confirmation number 10148780 to
access the call more quickly, and are encouraged to dial into the
call at least 15 minutes prior to the start to prevent any delay in
joining.
- Webcast: http://ir.newrelic.com (live and replay)
- Investor Letter: Available at
http://ir.newrelic.com
- Replay: Following the completion of the call through
11:59 PM Eastern Time on November 12, 2020, a telephone replay will
be available by dialing (877) 344-7529 from the United States or
(412) 317-0088 internationally with conference ID 10148780.
About New Relic
The world’s best engineering teams rely on New Relic to
visualize, analyze and troubleshoot their software. New Relic One
is the most powerful cloud-based observability platform built to
help companies create more perfect software. Learn why customers
trust New Relic for improved uptime and performance, greater scale
and efficiency, and accelerated time to market 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
third quarter of fiscal 2021, such as revenue, non-GAAP loss from
operations, non-GAAP net loss attributable to New Relic per diluted
share, ARR, gross margins, free cash flows; potential improvements
in customer churn, dollar based net expansion rate and sales
momentum; anticipated customer commitments to New Relic’s new
pricing model; and expectations that New Relic’s simplified pricing
and transition to a consumption-based pricing model will accelerate
demand, make observability more affordable and broaden its
prospective market opportunities. 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 determine optimal prices for
its products and the potential challenges presented by New Relic’s
evolving pricing models; the effect of the COVID-19 pandemic on New
Relic’s business and on global economies and financial markets
generally; 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 dependence of New Relic’s business
on its customers remaining on its platform and increasing their
spend with New Relic; 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
expand its marketing and sales capabilities and increase sales of
its solutions; 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 and expenditures on cloud hosting providers;
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; risks
related to sales to government entities and highly regulated
organizations; 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 (loss) 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
(loss) attributable to New Relic, non-GAAP net income (loss)
attributable to New Relic per diluted share, non-GAAP net income
(loss) 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 (loss) 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 (loss) 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
(loss) attributable to New Relic, non-GAAP net income (loss)
attributable to New Relic per diluted share and non-GAAP net income
(loss) 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 (loss)
per basic and diluted share is calculated as non-GAAP net income
(loss) attributable to New Relic divided by weighted-average shares
used to compute net income (loss) 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. In fiscal year
2020, 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 (loss) 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’s monthly recurring revenue represents the revenue
that New Relic would contractually expect to receive from those
customers over the following month, including partner revenue or
revenue from support subscriptions, without any increase or
reduction in any of their subscriptions.
Similarly, annual recurring revenue (“ARR”) represents the
revenue New Relic would contractually expect to receive from those
customers over the following 12-month period, including partner
revenue or revenue from support subscriptions, without any increase
or reduction in any of their contractual commitments. The net
change New Relic reports in ARR reflects any increase in ARR from
existing customers and new customers, which is referred to as “new
ARR,” as well as any reduction in ARR from customers who reduced
their spend or terminated their relationship with New Relic, which
is referred to as “lost ARR.”
For contracts entered into under the new pricing model announced
on July 30, 2020, New Relic only recognizes as ARR the committed
contractual amount for customers under the Annual Pool of Funds
model; therefore, the definition of ARR would not include contracts
under the Pay as You Go model. Meanwhile, ARR for contracts under
Annual Pool of Funds is calculated as the original dollar
commitment for the annual contract period, plus any incremental
additional dollar commitments added during the term of the period.
ARR is measured without reference or adjustments for historic data
usage, and therefore excludes assumptions related to overage spend
or expected or received overages above committed amounts.
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 or use additional products. New Relic’s
dollar-based net expansion rate is reduced when customers decrease
their use of New Relic’s products or use fewer products.
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 September
30,
Six Months Ended September
30,
2020
2019
2020
2019
Revenue
$
166,054
$
145,815
$
328,639
$
286,825
Cost of revenue
45,198
25,149
78,471
48,762
Gross profit
120,856
120,666
250,168
238,063
Operating expenses: Research and development
44,628
34,132
85,472
68,471
Sales and marketing
89,378
80,157
174,514
157,007
General and administrative
29,798
23,278
59,232
46,378
Total operating expenses
163,804
137,567
319,218
271,856
Loss from operations
(42,948)
(16,901)
(69,050)
(33,793)
Other income (expense): Interest income
2,220
4,011
5,001
8,151
Interest expense
(6,216)
(5,888)
(12,320)
(11,707)
Other income (expense), net
(604)
315
(999)
3,293
Loss before income taxes
(47,548)
(18,463)
(77,368)
(34,056)
Income tax provision
380
660
712
624
Net loss
$
(47,928)
$
(19,123)
$
(78,080)
$
(34,680)
Net loss attributable to redeemable non-controlling interest
377
509
773
897
Net loss attributable to New Relic
$
(47,551)
$
(18,614)
$
(77,307)
$
(33,783)
Net loss attributable to New Relic per share, basic and diluted
$
(0.79)
$
(0.32)
$
(1.28)
$
(0.58)
Weighted-average shares used to compute net loss per share, basic
and diluted
60,545
58,372
60,237
58,161
Condensed Consolidated Balance Sheets (In thousands, except
par value; unaudited)
September 30, 2020
March 31, 2020
Assets Current assets: Cash and cash equivalents
$
276,843
$
292,523
Short-term investments
562,939
512,574
Accounts receivable, net of allowances of $2,709 and $3,636,
respectively
101,381
147,361
Prepaid expenses and other current assets
14,202
15,979
Deferred contract acquisition costs
33,319
32,016
Total current assets
988,684
1,000,453
Property and equipment, net
98,718
100,294
Restricted cash
5,642
5,641
Goodwill
45,112
45,112
Intangible assets, net
11,139
13,691
Deferred contract acquisition costs, non-current
28,016
28,141
Lease right-of-use assets
58,769
57,777
Other assets, non-current
7,397
7,325
Total assets
$
1,243,477
$
1,258,434
Liabilities, redeemable non-controlling interest and
stockholders’ equity Current liabilities: Accounts payable
$
26,132
$
12,565
Accrued compensation and benefits
24,255
29,054
Other current liabilities
14,059
13,120
Deferred revenue
273,610
313,161
Lease liabilities
5,858
8,682
Total current liabilities
343,914
376,582
Convertible senior notes, net
438,054
427,044
Lease liabilities, non-current
61,226
57,394
Deferred revenue, non-current
1,988
3,166
Other liabilities, non-current
10,004
1,940
Total liabilities
855,186
866,126
Redeemable non-controlling interest
896
1,669
Stockholders’ equity: Common stock, $0.001 par value
61
60
Treasury stock - at cost (260 shares)
(263)
(263)
Additional paid-in capital
857,011
780,479
Accumulated other comprehensive income
2,399
4,869
Accumulated deficit
(471,813)
(394,506)
Total stockholders’ equity
387,395
390,639
Total liabilities, redeemable non-controlling interest, and
stockholders’ equity
$
1,243,477
$
1,258,434
Condensed Consolidated Statements of Cash Flows (In
thousands; unaudited)
Six Months Ended September
30,
2020
2019
Cash flows from operating activities: Net loss attributable
to New Relic
$
(77,307)
$
(33,783)
Net loss attributable to redeemable non-controlling interest
$
(773)
$
(897)
Net loss:
$
(78,080)
$
(34,680)
Adjustments to reconcile net loss to net cash provided by operating
activities: Depreciation and amortization
43,404
37,268
Stock-based compensation expense
66,575
44,546
Amortization of debt discount and issuance costs
11,010
10,404
Gain on lease modification
-
(3,006)
Other
2,354
(1,465)
Changes in operating assets and liabilities: Accounts receivable,
net
45,980
43,651
Prepaid expenses and other assets
473
368
Deferred contract acquisition costs
(19,662)
(18,038)
Lease right-of-use assets
(1,086)
17,512
Accounts payable
14,870
3,208
Accrued compensation and benefits and other liabilities
1,941
275
Lease liabilities
1,008
(16,157)
Deferred revenue
(40,729)
(38,382)
Net cash provided by operating activities
48,058
45,504
Cash flows from investing activities: Purchases of property
and equipment
(12,641)
(31,570)
Purchases of short-term investments
(227,347)
(263,321)
Proceeds from sale and maturity of short-term investments
173,950
247,379
Capitalized software development costs
(6,843)
(3,053)
Net cash used in investing activities
(72,881)
(50,565)
Cash flows from financing activities: Investment from
redeemable non-controlling interest
-
978
Proceeds from employee stock purchase plan
6,494
5,933
Proceeds from exercise of employee stock options
2,650
3,054
Net cash provided by financing activities
9,144
9,965
Net increase (decrease) in cash, cash equivalents and restricted
cash
(15,679)
4,904
Cash, cash equivalents and restricted cash at beginning of period
298,164
243,161
Cash, cash equivalents and restricted cash at end of period
$
282,485
$
248,065
Reconciliation from GAAP to Non-GAAP Results (In thousands,
except per share data; unaudited)
Three Months Ended September
30,
Six Months Ended September
30,
2020
2019
2020
2019
Reconciliation of gross profit and gross
margin: GAAP gross profit
$
120,856
$
120,666
$
250,168
$
238,063
Plus: Stock-based compensation expense
1,622
1,300
3,124
2,522
Plus: Lease exit costs and accelerated depreciation expense
-
73
-
73
Plus: Amortization of purchased intangibles
1,276
440
2,552
880
Plus: Amortization of stock-based compensation capitalized in
software development costs
265
227
504
434
Plus: Employer payroll tax on employee equity incentive plans
50
49
141
153
Non-GAAP gross profit
$
124,069
$
122,755
$
256,489
$
242,125
GAAP gross margin
73%
83%
76%
83%
Non-GAAP adjustments
2%
1%
2%
1%
Non-GAAP gross margin
75%
84%
78%
84%
Reconciliation of operating
expenses: GAAP research and development
$
44,628
$
34,132
$
85,472
$
68,471
Less: Stock-based compensation expense
(10,450)
(7,434)
(19,254)
(14,462)
Less: Lease exit costs and accelerated depreciation expense
-
(326)
-
(326)
Less: Employer payroll tax on employee equity incentive plans
(210)
(153)
(559)
(521)
Non-GAAP research and development
$
33,968
$
26,219
$
65,659
$
53,162
GAAP sales and marketing
$
89,378
$
80,157
$
174,514
$
157,007
Less: Stock-based compensation expense
(14,537)
(10,533)
(27,845)
(19,592)
Less: Lease exit costs and accelerated depreciation expense
-
(2,240)
-
(2,240)
Less: Employer payroll tax on employee equity incentive plans
(157)
(123)
(516)
(438)
Non-GAAP sales and marketing
$
74,684
$
67,261
$
146,153
$
134,737
GAAP general and administrative
$
29,798
$
23,278
$
59,232
$
46,378
Less: Stock-based compensation expense
(8,758)
(4,091)
(16,352)
(7,970)
Less: Lease exit costs and accelerated depreciation expense
-
(1,002)
-
(1,002)
Less: Lawsuit litigation cost and other expense
(37)
-
(37)
(1,521)
Less: Employer payroll tax on employee equity incentive plans
(294)
(61)
(443)
(192)
Non-GAAP general and administrative
$
20,709
$
18,124
$
42,400
$
35,693
Reconciliation of income (loss) from
operations and operating margin: GAAP loss from
operations
$
(42,948)
$
(16,901)
$
(69,050)
$
(33,793)
Plus: Stock-based compensation expense
35,367
23,358
66,575
44,546
Plus: Lease exit costs and accelerated depreciation expense
-
3,641
-
3,641
Plus: Amortization of purchased intangibles
1,276
440
2,552
880
Plus: Amortization of stock-based compensation capitalized in
software development costs
265
227
504
434
Plus: Lawsuit litigation cost and other expense
37
-
37
1,521
Plus: Employer payroll tax on employee equity incentive plans
711
386
1,659
1,304
Non-GAAP income (loss) from operations
$
(5,292)
$
11,151
$
2,277
$
18,533
GAAP operating margin
(26)%
(12)%
(21)%
(12)%
Non-GAAP adjustments
23 %
20 %
22 %
18 %
Non-GAAP operating margin
(3)%
8 %
1 %
6 %
Reconciliation of net income
(loss): GAAP net loss attributable to New Relic
$
(47,551)
$
(18,614)
$
(77,307)
$
(33,783)
Plus: Stock-based compensation expense
35,367
23,358
66,575
44,546
Plus: Lease exit costs and accelerated depreciation expense
-
3,641
-
3,641
Plus: Amortization of purchased intangibles
1,276
440
2,552
880
Plus: Amortization of stock-based compensation capitalized in
software development costs
265
227
504
434
Plus: Lawsuit litigation cost and other expense
37
-
37
1,521
Plus: Employer payroll tax on employee equity incentive plans
711
386
1,659
1,304
Plus: Amortization of debt discount and issuance costs
5,544
5,239
11,010
10,404
Less: Gain on lease modification
-
-
-
(3,006)
Non-GAAP net income (loss) attributable to New Relic
$
(4,351)
$
14,677
$
5,030
$
25,941
Non-GAAP net income (loss) attributable to New Relic per
share: Basic
$
(0.07)
$
0.25
$
0.08
$
0.45
Diluted
$
(0.07)
$
0.24
$
0.08
$
0.43
Shares used in non-GAAP per share calculations: Basic
60,545
58,372
60,237
58,161
Diluted
60,545
60,174
61,567
60,246
Reconciliation of GAAP Cash Flows from Operating Activities to
Free Cash Flow (In thousands; unaudited)
Three Months Ended September
30,
Six Months Ended September
30,
2020
2019
2020
2019
Net cash provided by operating activities
$
12,910
$
8,988
$
48,058
$
45,504
Capital expenditures
(4,416)
(15,336)
(12,641)
(31,570)
Capitalized software development costs
(3,175)
(1,670)
(6,843)
(3,053)
Free cash flow (Non-GAAP)
$
5,319
$
(8,018)
$
28,574
$
10,881
Net cash used in investing activities
$
(666)
$
(5,176)
$
(72,881)
$
(50,565)
Net cash provided by financing activities
$
7,720
$
7,694
$
9,144
$
9,965
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201105006088/en/
Investor Contact Peter Goldmacher New Relic, Inc.
503-336-9280 IR@newrelic.com
Media Contact Andrew Schmitt New Relic, Inc. 415-869-7109
PR@newrelic.com
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