Fourth quarter revenue increased 19%
year-over-year to $206 million Quarterly GAAP operating loss of
$(56) million; Non-GAAP operating loss of $(16) million Fiscal 2022
revenue increased 18% year-over-year to $786 million Fiscal 2022
GAAP operating loss of $(229) million; Non-GAAP operating loss of
$(49) million
New Relic, Inc. (NYSE: NEWR), the observability company, today
announced financial results for the fourth quarter and full fiscal
year 2022 ended March 31, 2022.
“We finished FY22 with revenues of $786 million, well above the
guidance of $710 million we set a year ago,” said New Relic CEO
Bill Staples. “This was a transformative year for New Relic and I’m
very proud of all the hard work our people put in to get here. I am
excited to continue to execute against our top priority of revenue
growth as we build on the progress we made in FY22."
Fourth Quarter Fiscal Year 2022 Financial Highlights:
- Revenue of $206 million, compared to $173 million for the
fourth quarter of fiscal 2021.
- GAAP gross margin of 69% and non-GAAP gross margin of 71%.
- GAAP loss from operations was $(56) million, compared to $(54)
million for the fourth quarter of fiscal 2021.
- Non-GAAP loss from operations was $(16) million, compared to
$(18) million for the fourth quarter of fiscal 2021.
- GAAP net loss attributable to New Relic per basic share was
$(0.84), compared to $(0.98) per basic share for the fourth quarter
of fiscal 2021.
- Non-GAAP net loss attributable to New Relic per diluted share
was $(0.24), compared to $(0.27) per diluted share for the fourth
quarter of fiscal 2021.
- Cash provided by operating activities was $50 million and free
cash flow was $44 million for the fourth quarter of fiscal
2022.
- Cash, cash equivalents and short-term investments were $829
million at the end of the fourth quarter of fiscal 2022, compared
with $780 million at the end of the third quarter of fiscal
2022.
- Remaining performance obligations were $706 million at the end
of the fourth quarter of fiscal 2022, compared with $610 million at
the end of the third quarter of fiscal 2022. This represents the
aggregate unrecognized transaction price of remaining performance
obligations as of each of March 31, 2022 and December 31,
2021.
Fiscal 2022 Financial Highlights:
- Revenue of $786 million, up 18% compared with fiscal 2021.
- GAAP loss from operations was $(229) million, compared with
$(171) million for fiscal 2021.
- Non-GAAP loss from operations was $(49) million, compared with
$(25) million for fiscal 2021.
- GAAP net loss attributable to New Relic per basic share was
$(3.88), compared with $(3.15) per basic share for fiscal
2021.
- Non-GAAP net loss attributable to New Relic per diluted share
was $(0.77), compared to $(0.33) per diluted share for fiscal
2021.
Key Operating Metrics*:
Jun-20
Sep-20
Dec-20
Mar-21
Jun-21
Sep-21
Dec-21
Mar-22
1Q21
2Q21
3Q21
4Q21
1Q22
2Q22
3Q22
4Q22
Active Customer Accounts
15,400
14,500
13,900
14,100
14,100
14,300
14,600
14,800
Active Customer Accounts >$100,000
862
894
913
945
964
1,011
1,064
1,099
Percentage of Revenue from Active Customer
Accounts >$100,000
76%
77%
78%
79%
79%
81%
81%
82%
Net Revenue Retention Rate (NRR)
122%
119%
115%
112%
111%
112%
116%
119%
* Beginning with the first quarter of fiscal 2022, we introduced
new key operating metrics and changed the methodology we use to
count customer accounts. Total customer accounts are now aggregated
at the parent hierarchy level and include any account for which we
have recognized any revenue in the fiscal quarter. Please refer to
the appendix for the definitions of these new key operating
metrics.
Recent Business Highlights:
- Named a Leader in the 2022 GigaOm Radar for Cloud Observability
Solutions.
- Launched API Monitoring with Postman.
- Launched Service Level Management.
- Launched new Kubernetes experience to help developers build
more performant applications.
Outlook:
- First Quarter Fiscal 2023 Outlook:
- Revenue between $212 million and $214 million, representing
year-over-year growth of between 18% and 19%, respectively.
- Non-GAAP loss from operations of between $(23) million and
$(25) million.
- Non-GAAP net loss attributable to New Relic per diluted share
between $(0.35) and $(0.38).
- Full Year Fiscal 2023 Outlook:
- Revenue between $920 million and $930 million, representing
year-over-year growth of between 17% and 18%, respectively.
- Non-GAAP loss from operations of between $(20) million and
$(25) million.
- Non-GAAP net loss attributable to New Relic per diluted share
between $(0.31) and $(0.37).
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 fourth quarter
and full fiscal 2022 and outlook for the first quarter and the full
year of fiscal 2023.
- When: May 12, 2022 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 (646) 904-5544, and for international callers, please dial
(929) 526-1599. Callers may provide confirmation number 988319 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 P.M. Eastern Time on May 19, 2022, a telephone replay will be
available by dialing (866) 813-9403 from the United States or
+44-204-525-0658 internationally with conference ID 505458.
About New Relic
As a leader in observability, New Relic empowers engineers with
a data-driven approach to planning, building, deploying, and
running great software. New Relic delivers the only unified data
platform that empowers engineers to get all telemetry—metrics,
events, logs, and traces—paired with powerful full stack analysis
tools to help engineers do their best work with data, not opinions.
Delivered through the industry’s first usage-based consumption
pricing that’s intuitive and predictable, New Relic gives engineers
more value for the money by helping improve planning cycle times,
change failure rates, release frequency, and mean time to
resolution. This helps the world’s leading brands including
American Red Cross, Australia Post, Banco Inter, Chegg, Gojek,
Signify Health, TopGolf, World Fuel Services (WFS), and Zalora
improve uptime, reliability, and operational efficiency to deliver
exceptional customer experiences that fuel innovation and growth.
Uncover the ‘why’ with New Relic at www.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
first quarter and the full year of fiscal 2023, such as revenue,
non-GAAP loss from operations, non-GAAP net loss attributable to
New Relic per diluted share, accelerating revenue growth and
non-GAAP profitability in fiscal 2023, relationship between data
ingest, profitable growth and value creation in the long-term,
non-GAAP gross margins in the first quarter and full year fiscal
2023, completion of New Relic’s transition to the cloud by the end
of fiscal 2023 and impact on gross margins, potential trends in
commitments and consumption over commitments going forward,
anticipation of 25% market growth rates in the intermediate term,
New Relic's intent to improve operating margins and target to exit
fiscal 2023 with modest non-GAAP profitability, data ingest trends
in the intermediate term, New Relic’s competitive advantage
obtained by its new data-centric approach, New Relic’s unique
positioning to help developers and engineers communicate about
relevant data sets, expectation that near term investments will
improve internal execution efficiency, New Relic's efforts to drive
breadth and depth of adoption across our customer base. 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; estimates or judgments
relating to New Relic’s critical accounting policies; the expense
and complexity of New Relic’s ongoing and planned investments in
cloud hosting providers and expenditures on transitioning its
services and customers from its data center hosting facilities to
public cloud 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 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 loss attributable to New
Relic, non-GAAP net loss attributable to New Relic per diluted
share, non-GAAP net 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 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 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 loss
attributable to New Relic, non-GAAP net loss attributable to New
Relic per diluted share and non-GAAP net loss attributable to New
Relic per basic share as the respective GAAP balances, adjusted
for, as applicable: (1) stock-based compensation expense, (2)
amortization of stock-based compensation capitalized in software
development costs, (3) the amortization of purchased intangibles,
(4) employer payroll tax expense on equity incentive plans, (5)
amortization of debt discount and issuance costs, (6) the
transaction costs related to acquisitions, (7) lawsuit litigation
cost and other expense, (8) gain or loss from lease modification,
(9) adjustment to redeemable non-controlling interest, and (10)
restructuring charges. Non-GAAP net loss per basic and diluted
share is calculated as non-GAAP net loss attributable to New Relic
divided by weighted-average shares used to compute net 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.
Amortization of purchased intangibles. 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.
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%. Effective April 1, 2021, New Relic adopted ASU
No. 2020-06, Accounting for Convertible Instruments and Contract on
an Entity’s Own Equity. As a result of the adoption, the debt
conversion option and debt issuance costs previously attributable
to the equity component are no longer presented in equity.
Similarly, the debt discount, which was equal to the carrying value
of the embedded conversion feature upon issuance, is no longer
amortized into income as interest expense over the life of the
instrument. The debt issuance costs are amortized as interest
expense. The expense for the amortization of debt issuance costs is
a non-cash item, and New Relic believes the exclusion of this
interest expense will provide for a more useful comparison of our
operational performance in different periods.
Transaction costs related to acquisitions. New Relic may from
time to time incur direct transaction costs related to
acquisitions. New Relic believes it is useful to exclude such
charges because it does not consider such amounts to be part of the
ongoing operation of New Relic’s business.
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.
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.
Adjustment to redeemable non-controlling interest. New Relic
adjusts the value of redeemable non-controlling interest in
connection with its joint venture in New Relic K.K. New Relic
believes it is useful to exclude the adjustment to redeemable
non-controlling interest because it may not be indicative of future
operating results and that investors benefit from an understanding
of the company’s operating results without giving effect to this
adjustment.
Restructuring charges. In April 2021, New Relic commenced a
restructuring plan to realign its cost structure to better reflect
significant product and business model innovation over the past 12
months. As a result of the restructuring plan, New Relic incurred
charges of approximately $13.0 million for employee terminations
and other costs associated with the restructuring plan. Most of
these charges consisted of cash expenditures and stock-based
compensation expense and were recognized in the first quarter of
fiscal 2022. New Relic believes it is appropriate to exclude the
restructuring charges because it is not indicative of its future
operating results.
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 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
Active Customer Accounts. New Relic defines an Active Customer
Account at the end of any period as an individual account, as
identified by a unique account identifier, aggregated at the parent
hierarchy level, for which New Relic has recognized any revenue in
the fiscal quarter. The number of Active Customer Accounts that is
reported as of a particular date is rounded down to the nearest
hundred.
Number of Active Customer Accounts with Revenue Greater than
$100,000. As a measure of New Relic’s ability to scale with its
customers and attract large enterprises to its platform, New Relic
counts the number of Active Customer Accounts for which it has
recognized greater than $100,000 in revenue in the trailing 12
months.
Percentage of Revenue from Active Customer Accounts Greater than
$100,000. New Relic also looks at its percentage of overall revenue
it receives from its Active Customer Accounts with revenue greater
than $100,000 in any given quarter as an indicator of its relative
performance when selling to New Relic’s large customer
relationships or its smaller revenue accounts.
Net Revenue Retention Rate (“NRR”). NRR monitors the growth in
use of New Relic’s platform by its existing active customer
accounts and allows New Relic to measure the health of its business
and future growth prospects. To calculate NRR, New Relic first
identifies the cohort of Active Customer Accounts that were Active
Customer Accounts in the same quarter of the prior fiscal year.
Next, New Relic identifies the measurement period as the 12-month
period ending with the period reported and the prior comparison
period as the corresponding period in the prior year. NRR is the
quotient obtained by dividing the revenue generated from a cohort
of Active Customer Accounts in the measurement period by the
revenue generated from that same cohort in the prior comparison
period.
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 March 31, Twelve Months Ended
March 31,
2022
2021
2022
2021
Revenue
$
205,752
$
172,669
$
785,521
$
667,648
Cost of revenue
63,960
57,125
256,279
181,564
Gross profit
141,792
115,544
529,242
486,084
Operating expenses: Research and development
58,396
43,606
211,856
174,851
Sales and marketing
100,424
94,796
394,027
361,702
General and administrative
38,719
31,450
151,912
120,931
Total operating expenses
197,539
169,852
757,795
657,484
Loss from operations
(55,747
)
(54,308
)
(228,553
)
(171,400
)
Other income (expense): Interest income
625
1,153
2,862
7,888
Interest expense
(1,239
)
(6,352
)
(4,921
)
(24,901
)
Other expense
(523
)
(108
)
(1,170
)
(1,918
)
Loss before income taxes
(56,884
)
(59,615
)
(231,782
)
(190,331
)
Income tax provision (benefit)
(493
)
(717
)
323
559
Net loss
$
(56,391
)
$
(58,898
)
$
(232,105
)
$
(190,890
)
Net loss and adjustment attributable to redeemable non-controlling
interest
$
878
$
(2,779
)
$
(18,297
)
$
(1,720
)
Net loss attributable to New Relic
$
(55,513
)
$
(61,677
)
$
(250,402
)
$
(192,610
)
Net loss attributable to New Relic per share, basic and diluted
$
(0.84
)
$
(0.98
)
$
(3.88
)
$
(3.15
)
Weighted-average shares used to compute net loss per share, basic
and diluted
65,780
62,621
64,592
61,070
Condensed Consolidated Balance Sheets
(In thousands, except par value; unaudited)
March 31, 2022 March 31, 2021 Assets
Current assets: Cash and cash equivalents
$
268,695
$
240,821
Short-term investments
559,984
575,254
Accounts receivable, net of allowance for doubtful accounts of
$3,703 and $2,633 respectively
226,182
174,027
Prepaid expenses and other current assets
29,447
21,944
Deferred contract acquisition costs
24,058
36,210
Total current assets
1,108,366
1,048,256
Property and equipment, net
68,368
91,308
Restricted cash
5,775
5,642
Goodwill
163,677
144,253
Intangible assets, net
15,636
12,986
Deferred contract acquisition costs, non-current
10,463
32,579
Lease right-of-use assets
50,465
57,425
Other assets, non-current
4,916
6,170
Total assets
$
1,427,666
$
1,398,619
Liabilities, redeemable non-controlling interest, and
stockholders’ equity Current liabilities: Accounts payable
$
32,545
$
24,171
Accrued compensation and benefits
37,023
37,196
Other current liabilities
36,098
19,174
Deferred revenue
398,754
373,594
Lease liabilities
11,103
7,886
Total current liabilities
515,523
462,021
Convertible senior notes, net
497,663
449,380
Lease liabilities, non-current
49,809
59,924
Deferred revenue, non-current
108
1,674
Other liabilities, non-current
20,173
8,256
Total liabilities
1,083,276
981,255
Redeemable non-controlling interest
21,686
3,389
Stockholders’ equity: Common stock, $0.001 par value
66
64
Treasury stock - at cost (260 shares)
(263
)
(263
)
Additional paid-in capital
1,114,221
1,001,309
Accumulated other comprehensive loss
(8,012
)
(19
)
Accumulated deficit
(783,308
)
(587,116
)
Total stockholders’ equity
322,704
413,975
Total liabilities, redeemable non-controlling interest and
stockholders’ equity
$
1,427,666
$
1,398,619
Condensed Consolidated Statements of Cash Flows
(In thousands; unaudited)
Twelve Months Ended March 31,
2022
2021
Cash flows from operating activities: Net loss attributable
to New Relic:
$
(250,402
)
$
(192,610
)
Net loss and adjustment attributable to redeemable non-controlling
interest
$
18,297
$
1,720
Net loss:
$
(232,105
)
$
(190,890
)
Adjustments to reconcile net loss to net cash provided by operating
activities: Depreciation and amortization
86,065
89,312
Amortization of debt discount and issuance costs
2,357
22,336
Stock-based compensation expense
153,039
135,143
Other
1,429
3,610
Changes in operating assets and liabilities, net of acquisition of
businesses: Accounts receivable, net
(53,319
)
(27,084
)
Prepaid expenses and other assets
(5,796
)
(7,571
)
Deferred contract acquisition costs
(2,345
)
(46,953
)
Lease right-of-use assets
8,294
959
Accounts payable
9,745
11,766
Accrued compensation and benefits and other liabilities
19,564
18,778
Lease liabilities
(6,898
)
1,519
Deferred revenue
23,594
58,941
Net cash provided by operating activities
3,624
69,866
Cash flows from investing activities: Purchases of property
and equipment
(5,778
)
(18,737
)
Proceeds from sale of property and equipment
1,001
-
Cash paid for acquisition, net of cash acquired
(7,192
)
(41,536
)
Purchases of short-term investments
(301,068
)
(405,054
)
Proceeds from sale and maturity of short-term investments
305,942
335,964
Capitalized software development costs
(12,662
)
(13,494
)
Net cash used in investing activities
(19,757
)
(142,857
)
Cash flows from financing activities: Proceeds from employee
stock purchase plan
12,272
14,425
Proceeds from exercise of employee stock options
31,868
6,865
Net cash provided by financing activities
44,140
21,290
Net increase (decrease) in cash, cash equivalents and restricted
cash
28,007
(51,701
)
Cash, cash equivalents and restricted cash at beginning of period
246,463
298,164
Cash, cash equivalents and restricted cash at end of period
$
274,470
$
246,463
Reconciliation from GAAP to Non-GAAP Results
(In thousands, except per share data; unaudited)
Three Months Ended March 31, Twelve Months Ended
March 31,
2022
2021
2022
2021
Reconciliation of gross profit and gross
margin: GAAP gross profit
$
141,792
$
115,544
$
529,242
$
486,084
Plus: Stock-based compensation
1,285
1,343
5,042
5,939
Plus: Amortization of purchased intangibles
2,291
1,676
7,649
5,505
Plus: Amortization of stock-based compensation capitalized in
software development costs
722
379
2,402
1,222
Plus: Employer payroll tax on employee equity incentive plans
75
100
243
277
Non-GAAP gross profit
$
146,165
$
119,042
$
544,578
$
499,027
GAAP gross margin
69
%
67
%
67
%
73
%
Non-GAAP adjustments
2
%
2
%
2
%
2
%
Non-GAAP gross margin
71
%
69
%
69
%
75
%
Reconciliation of operating
expenses: GAAP research and development
$
58,396
$
43,606
$
211,856
$
174,851
Less: Stock-based compensation expense
(12,127
)
(10,750
)
(48,355
)
(40,964
)
Less: Employer payroll tax on employee equity incentive plans
(571
)
(637
)
(1,432
)
(1,350
)
Non-GAAP research and development
$
45,698
$
32,219
$
162,069
$
132,537
GAAP sales and marketing
$
100,424
$
94,796
$
394,027
$
361,702
Less: Stock-based compensation expense
(11,367
)
(11,735
)
(48,986
)
(54,695
)
Less: Employer payroll tax on employee equity incentive plans
(374
)
(601
)
(944
)
(1,272
)
Less: Restructuring charges (1)
-
-
(10,925
)
-
Non-GAAP sales and marketing
$
88,683
$
82,460
$
333,172
$
305,735
GAAP general and administrative
$
38,719
$
31,450
$
151,912
$
120,931
Less: Stock-based compensation expense
(10,711
)
(8,271
)
(50,656
)
(33,545
)
Less: Transaction costs related to acquisition
-
-
(361
)
(885
)
Less: Lawsuit litigation expense
69
-
10
(254
)
Less: Employer payroll tax on employee equity incentive plans
(339
)
(342
)
(1,292
)
(901
)
Less: Restructuring charges (1)
-
-
(1,194
)
-
Non-GAAP general and administrative
$
27,738
$
22,837
$
98,419
$
85,346
Reconciliation of loss from operations and
operating margin: GAAP loss from operations
$
(55,747
)
$
(54,308
)
$
(228,553
)
$
(171,400
)
Plus: Stock-based compensation expense
35,490
32,099
153,039
135,143
Plus: Amortization of purchased intangibles
2,291
1,676
7,649
5,505
Plus: Transaction costs related to acquisition
-
-
361
885
Plus: Amortization of stock-based compensation capitalized in
software development costs
722
379
2,402
1,222
Plus: Lawsuit litigation expense
(69
)
-
(10
)
254
Plus: Employer payroll tax on employee equity incentive plans
1,359
1,680
3,911
3,800
Plus: Restructuring charges (1)
-
-
12,119
-
Non-GAAP loss from operations
$
(15,954
)
$
(18,474
)
$
(49,082
)
$
(24,591
)
GAAP operating margin
-27
%
-31
%
-29
%
-26
%
Non-GAAP adjustments
19
%
20
%
23
%
22
%
Non-GAAP operating margin
-8
%
-11
%
-6
%
-4
%
Reconciliation of net loss:
GAAP net loss attributable to New Relic
$
(55,513
)
$
(61,677
)
$
(250,402
)
$
(192,610
)
Plus: Stock-based compensation expense
35,490
32,099
153,039
135,143
Plus: Amortization of purchased intangibles
2,291
1,676
7,649
5,505
Plus: Transaction costs related to acquisition
-
-
361
885
Plus: Amortization of stock-based compensation capitalized in
software development costs
722
379
2,402
1,222
Plus: Lawsuit litigation expense
(69
)
-
(10
)
254
Plus: Employer payroll tax on employee equity incentive plans
1,359
1,680
3,911
3,800
Plus: Amortization of debt discount and issuance costs
591
5,704
2,357
22,336
Plus: Adjustment to redeemable non-controlling interest
(871
)
3,141
18,579
3,141
Plus: Restructuring charges (1)
-
-
12,119
-
Non-GAAP net loss attributable to New Relic
$
(16,000
)
$
(16,998
)
$
(49,995
)
$
(20,324
)
Non-GAAP net loss attributable to New Relic per share: Basic
$
(0.24
)
$
(0.27
)
$
(0.77
)
$
(0.33
)
Diluted
$
(0.24
)
$
(0.27
)
$
(0.77
)
$
(0.33
)
Shares used in non-GAAP per share calculations: Basic
65,780
62,621
64,592
61,070
Diluted
65,780
62,621
64,592
61,070
(1) Restructuring related charge for the stock-based compensation
expense of $0.5 million is included on its respective line items.
Reconciliation of GAAP Cash Flows from Operating Activities
to Free Cash Flow
(In thousands; unaudited)
Three Months Ended March 31, Twelve Months Ended
March 31,
2022
2021
2022
2021
Net cash provided by operating activities
$
49,952
$
28,481
$
3,624
$
69,866
Capital expenditures
(2,601
)
(2,938
)
(5,778
)
(18,737
)
Capitalized software development costs
(3,256
)
(3,755
)
(12,662
)
(13,494
)
Free cash flows (Non-GAAP)
$
44,095
$
21,788
$
(14,816
)
$
37,635
Net cash used in investing activities
$
(36,642
)
$
(9,989
)
$
(19,757
)
$
(142,857
)
Net cash provided by financing activities
$
9,558
$
11,164
$
44,140
$
21,290
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220511006174/en/
Investor Contact Peter Goldmacher New Relic, Inc.
503-336-9280 IR@newrelic.com
Media Contact New Relic, Inc PR@newrelic.com
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