First quarter revenue increased 20%
year-over-year to $216 million
New Relic, Inc. (NYSE: NEWR), the observability company, today
announced financial results for the first quarter of fiscal year
2023.
“Q1 was a strong start for New Relic as we beat both top and
bottom line expectations,” said New Relic CEO Bill Staples. “We
continue to execute well against the four priorities we articulated
on the last earnings call, and we are updating guidance to reflect
our added focus on achieving non-GAAP profitability for the full
year.”
First Quarter Fiscal Year 2023 Financial Highlights:
- Revenue of $216 million, compared to $180 million for the first
quarter of fiscal 2022.
- GAAP gross margin of 71% and non-GAAP gross margin of 73%.
- GAAP loss from operations was $(56) million, compared to $(74)
million for the first quarter of fiscal 2022.
- Non-GAAP loss from operations was $(17) million, compared to
$(16) million for the first quarter of fiscal 2022.
- Cash, cash equivalents and short-term investments were $867
million at the end of the first quarter of fiscal 2023, compared
with $829 million at the end of the fourth quarter of fiscal
2022.
Key Operating Metrics*:
Jun-21
Sep-21
Dec-21
Mar-22
Jun-22
1Q22
2Q22
3Q22
4Q22
1Q23
Active Customer Accounts
14,100
14,300
14,600
14,800
15,100
Active Customer Accounts >$100,000
964
1,011
1,064
1,099
1,137
Percentage of Revenue from Active Customer
Accounts >$100,000
79%
81%
81%
82%
83%
Net Revenue Retention Rate (NRR)
111%
112%
116%
119%
120%
* 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:
- Announced multi-year commercial partnership with Microsoft
Azure including product integrations, adding New Relic to the Azure
Marketplace and enabling Azure customers to use credits to buy New
Relic Products.
- Named a Leader in the 2022 Gartner Magic Quadrant for
Application Performance Monitoring and Observability for the 10th
consecutive time.
- Appointed Pali Bhat, Kevin Galligan, and Susan Arthur to the
Board of Directors and elevated David Henshall, the former CEO and
CFO of Citrix, to Audit Committee Chair.
- Expanded Instant Observability ecosystem which now offers
almost 500 integrations to empower every engineer to get started
with observability in minutes.
- Achieved HITRUST certification for New Relic’s observability
platform, meeting industry-defined regulations to secure patient
Protected Health Information (PHI) when managing telemetry
data.
- Launched agentless monitoring for SAP Solutions, empowering IT
teams to better support business operations by harnessing SAP data
sources, enabling faster root cause analysis.
Outlook:
- Second Quarter Fiscal 2023 Outlook:
- Revenue between $219 million and $224 million, representing
year-over-year growth of approximately 12% and 14%.
- Non-GAAP loss from operations between $(3) million and $(5)
million.
- Non-GAAP net loss attributable to New Relic per diluted share
between $(0.04) and $(0.07).
- Full-Year Fiscal 2023 Outlook:
- Revenue between $920 million and $930 million, representing
year-over-year growth of approximately 17% and 18%.
- Non-GAAP income from operations between $5 million and $10
million.
- Non-GAAP net income attributable to New Relic per diluted share
between $0.10 and $0.17.
New Relic has not reconciled its expectations as to non-GAAP
loss from operations or non-GAAP net 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 first quarter
of fiscal year 2023 and outlook for the second quarter and the full
year of fiscal 2023.
- When: August 4, 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 conference ID 673873 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 August 11, 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 283140.
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
second 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 second quarter and full year fiscal
2023, potential trends in commitments and consumption over
commitments going forward, anticipated market growth rates in the
intermediate term, anticipated impacts of the macroeconomic
environment on New Relic’s business, New Relic's intent to improve
operating margins, data ingest trends in the intermediate term, New
Relic’s competitive advantage obtained by its new data-centric
approach, New Relic’s 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; macroeconomic conditions; 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 were 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 $12.6 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
June 30,
2022
2021
Revenue
$
216,459
$
180,484
Cost of revenue
63,893
59,264
Gross profit
152,566
121,220
Operating expenses: Research and development
64,769
48,730
Sales and marketing
104,420
102,813
General and administrative
39,030
43,565
Total operating expenses
208,219
195,108
Loss from operations
(55,653
)
(73,888
)
Other income (expense): Interest income
1,110
938
Interest expense
(1,232
)
(1,226
)
Other expense
(209
)
(336
)
Loss before income taxes
(55,984
)
(74,512
)
Income tax provision (benefit)
267
(453
)
Net loss
$
(56,251
)
$
(74,059
)
Net loss and adjustment attributable to redeemable non-controlling
interest
6,012
(4,355
)
Net loss attributable to New Relic
$
(50,239
)
$
(78,414
)
Net loss attributable to New Relic per share, basic and diluted
$
(0.76
)
$
(1.24
)
Weighted-average shares used to compute net loss per share, basic
and diluted
66,421
63,339
Condensed Consolidated Balance Sheets(In thousands, except
par value; unaudited)
June 30, 2022 March 31,
2022 Assets Current assets: Cash and cash equivalents
$
303,493
$
268,695
Short-term investments
563,831
559,984
Accounts receivable, net of allowances of $2,870 and $3,073,
respectively
109,637
226,182
Prepaid expenses and other current assets
28,239
29,447
Deferred contract acquisition costs
20,903
24,058
Total current assets
1,026,103
1,108,366
Property and equipment, net
65,501
68,368
Restricted cash
5,775
5,775
Goodwill
163,677
163,677
Intangible assets, net
13,344
15,636
Deferred contract acquisition costs, non-current
6,810
10,463
Lease right-of-use assets
48,093
50,465
Other assets, non-current
5,640
4,916
Total assets
$
1,334,943
$
1,427,666
Liabilities, redeemable non-controlling interest, and
stockholders’ equity Current liabilities: Accounts payable
$
35,260
$
32,545
Accrued compensation and benefits
35,486
37,023
Other current liabilities
33,985
36,098
Convertible senior notes, net
498,256
-
Deferred revenue
332,882
398,754
Lease liabilities
10,237
11,103
Total current liabilities
946,106
515,523
Convertible senior notes, net
-
497,663
Lease liabilities, non-current
46,218
49,809
Deferred revenue, non-current
74
108
Other liabilities, non-current
17,949
20,173
Total liabilities
1,010,347
1,083,276
Redeemable non-controlling interest
15,674
21,686
Stockholders’ equity: Common stock, $0.001 par value
67
66
Treasury stock - at cost (260 shares)
(263
)
(263
)
Additional paid-in capital
1,152,613
1,114,221
Accumulated other comprehensive loss
(9,948
)
(8,012
)
Accumulated deficit
(833,547
)
(783,308
)
Total stockholders’ equity
308,922
322,704
Total liabilities, redeemable non-controlling interest and
stockholders’ equity
$
1,334,943
$
1,427,666
Condensed Consolidated Statements of Cash Flows(In
thousands; unaudited)
Three Months Ended June 30,
2022
2021
Cash flows from operating activities: Net loss attributable
to New Relic:
$
(50,239
)
$
(78,414
)
Net loss and adjustment attributable to redeemable non-controlling
interest
(6,012
)
4,355
Net loss:
$
(56,251
)
$
(74,059
)
Adjustments to reconcile net loss to net cash provided by operating
activities: Depreciation and amortization
17,868
23,025
Stock-based compensation expense
34,882
42,187
Amortization of debt discount and issuance costs
593
587
Other
(352
)
(922
)
Changes in operating assets and liabilities, net of acquisition of
businesses: Accounts receivable, net
116,545
80,550
Prepaid expenses and other assets
(147
)
18
Deferred contract acquisition costs
(416
)
(190
)
Lease right-of-use assets
2,562
2,692
Accounts payable
2,650
4,894
Accrued compensation and benefits and other liabilities
(4,562
)
(8,627
)
Lease liabilities
(4,457
)
(2,517
)
Deferred revenue
(65,906
)
(57,766
)
Net cash provided by operating activities
43,009
9,872
Cash flows from investing activities: Purchases of property
and equipment
(1,294
)
(2,226
)
Proceeds from sale of property and equipment
943
-
Cash paid for acquisition, net of cash acquired
-
(7,192
)
Purchases of short-term investments
(50,373
)
(23,828
)
Proceeds from sale and maturity of short-term investments
44,175
40,513
Capitalized software development costs
(3,387
)
(2,860
)
Net cash provided by (used in) investing activities
(9,936
)
4,407
Cash flows provided by financing activities: Proceeds from
exercise of employee stock options
1,725
4,797
Net cash provided by financing activities
1,725
4,797
Net increase in cash, cash equivalents and restricted cash
34,798
19,076
Cash, cash equivalents and restricted cash at beginning of period
274,470
246,463
Cash, cash equivalents and restricted cash at end of period
309,268
265,539
Reconciliation from GAAP to Non-GAAP Results(In thousands,
except per share data; unaudited)
Three Months Ended June
30,
2022
2021
Reconciliation of gross profit and gross
margin: GAAP gross profit
$
152,566
$
121,220
Plus: Stock-based compensation expense
1,344
1,072
Plus: Amortization of purchased intangibles
2,291
1,676
Plus: Amortization of stock-based compensation capitalized in
software development costs
745
420
Plus: Employer payroll tax on employee equity incentive plans
48
52
Non-GAAP gross profit
$
156,994
$
124,440
GAAP gross margin
71
%
67
%
Non-GAAP adjustments
2
%
2
%
Non-GAAP gross margin
73
%
69
%
Reconciliation of operating
expenses: GAAP research and development
$
64,769
$
48,730
Less: Stock-based compensation expense
(13,286
)
(10,964
)
Less: Employer payroll tax on employee equity incentive plans
(239
)
(299
)
Non-GAAP research and development
$
51,244
$
37,467
GAAP sales and marketing
$
104,420
$
102,813
Less: Stock-based compensation expense
(10,583
)
(11,534
)
Less: Employer payroll tax on employee equity incentive plans
(168
)
(245
)
Less: Restructuring charges (1)
-
(11,071
)
Non-GAAP sales and marketing
$
93,669
$
79,963
GAAP general and administrative
$
39,030
$
43,565
Less: Stock-based compensation expense
(9,669
)
(18,617
)
Less: Transaction costs related to acquisition
-
(361
)
Less: Lawsuit litigation cost and other expense
174
-
Less: Employer payroll tax on employee equity incentive plans
(297
)
(217
)
Less: Restructuring charges (1)
-
(1,208
)
Non-GAAP general and administrative
$
29,238
$
23,162
Reconciliation of loss from operations and
operating margin: GAAP loss from operations
$
(55,653
)
$
(73,888
)
Plus: Stock-based compensation expense
34,882
42,187
Plus: Amortization of purchased intangibles
2,291
1,676
Plus: Transaction costs related to acquisition
-
361
Plus: Amortization of stock-based compensation capitalized in
software development costs
745
420
Plus: Lawsuit litigation cost and other expense
(174
)
-
Plus: Employer payroll tax on employee equity incentive plans
752
813
Plus: Restructuring charges (1)
-
12,279
Non-GAAP loss from operations
$
(17,157
)
$
(16,152
)
GAAP operating margin
-26
%
-41
%
Non-GAAP adjustments
18
%
32
%
Non-GAAP operating margin
-8
%
-9
%
Reconciliation of net loss:
GAAP net loss attributable to New Relic
$
(50,239
)
$
(78,414
)
Plus: Stock-based compensation expense
34,882
42,187
Plus: Amortization of purchased intangibles
2,291
1,676
Plus: Transaction costs related to acquisition
-
361
Plus: Amortization of stock-based compensation capitalized in
software development costs
745
420
Plus: Lawsuit litigation cost and other expense
(174
)
-
Plus: Employer payroll tax on employee equity incentive plans
752
813
Plus: Amortization of debt discount and issuance costs
593
587
Plus: Adjustment to redeemable non-controlling interest
(5,866
)
4,395
Plus: Restructuring charges (1)
-
12,279
Non-GAAP net loss attributable to New Relic
$
(17,016
)
$
(15,696
)
Non-GAAP net loss attributable to New Relic per share: Basic
$
(0.26
)
$
(0.25
)
Diluted
$
(0.26
)
$
(0.25
)
Shares used in non-GAAP per share calculations: Basic
66,421
63,339
Diluted
66,421
63,339
(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
June 30,
2022
2021
Net cash provided by operating activities
$
43,009
$
9,872
Capital expenditures
(1,294
)
(2,226
)
Capitalized software development costs
(3,387
)
(2,860
)
Free cash flows (Non-GAAP)
$
38,328
$
4,786
Net cash provided by (used in) investing activities
$
(9,936
)
$
4,407
Net cash provided by financing activities
$
1,725
$
4,797
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220803006048/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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