Total revenue of $242.6 million, up 12% year
over year
GAAP operating margin of (14)%, non-GAAP
operating margin of 15%
Enters into definitive agreement to be acquired
by Francisco Partners and TPG for $6.5 billion
New Relic, Inc. (NYSE: NEWR), the all-in-one observability
platform for every engineer, announced financial results for the
first quarter of fiscal year 2024.
Fiscal 2024 First Quarter Results:
- Revenue: Total revenue was $242.6 million, up 12% from
$216.5 million one year ago. Consumption revenue was $213.9
million, up 39% year over year.
- Gross Margin and Non-GAAP Gross Margin(1): Gross margin
was 77.6%, compared to 70.5% one year ago. Non-GAAP gross margin
was 79.4%, compared to 72.5% one year ago.
- Operating Income and Non-GAAP Operating Income(1): Loss
from operations was $(33.0) million, compared to $(55.7) million
one year ago. Non-GAAP operating income was $36.4 million, compared
to $(17.2) million loss one year ago.
- Operating Margin and Non-GAAP Operating Margin(1):
Operating margin was (13.6)%, compared to (25.7)% one year ago.
Non-GAAP operating margin was 15.0%, compared to (7.9)% one year
ago.
- Net Income Per Share and Non-GAAP Net Income Per
Share(1): Fully diluted net loss per share was $(0.54),
compared to $(0.76) one year ago, while non-GAAP fully diluted net
income per share was $0.43, compared to $(0.26) one year ago. Fully
diluted share count was 71.5 million.
- Cash, Cash Equivalents and Short-Term Investments: Cash,
cash equivalents and short-term investments were $457.0 million as
of June 30, 2023.
- Cash Flows From Operating Activities and Free Cash Flow:
Trailing four quarter cash flows from operating activities was
$89.1 million, compared to $36.8 million one year ago. Trailing
four quarter free cash flow was $69.0 million, compared to $18.7
million one year ago.
Recent Business Highlights:
- Recognized for Technology Leadership – Gartner named New
Relic a leader in 2023 Gartner® Magic Quadrant™ for APM and
Observability for the 11th consecutive time. GigaOm named New Relic
a Leader and Fast Mover in the 2023 GigaOm Radar for AIOps.
- Redefining Application Performance Monitoring (APM) –
New Relic’s recently launched APM 360 capability empowers all
engineers to make APM a daily practice with insights from every
development stage and every part of the application stack.
- Deepening Security Capabilities – New Relic launched the
public preview of Interactive Application Security Testing (IAST)
capabilities to accelerate security testing and enable dev, ops,
and security teams to ship secure code faster.
- Growing its Technology Partner Ecosystem – New Relic
continued to grow its technology partner ecosystem, and now offers
integrations with 650+ cloud services, open source tools, and
enterprise technologies. The Company also deepened its partnership
with AWS by providing integration with Amazon Security Lake log
data and events.
- Broadening Environmental, Social, and Governance (ESG)
Commitment – New Relic published its second annual ESG impact
report for 2023. The full report can be accessed at
https://newrelic.com/about/environmental-social-governance.
Transaction with Francisco Partners and TPG
In a separate press release issued today, New Relic announced it
has entered into a definitive agreement to be acquired by Francisco
Partners and TPG. A copy of the press release can be found on New
Relic’s investor relations website at http://ir.newrelic.com. The
additional details and information about the terms and conditions
of the definitive agreement and the transactions contemplated today
are available in the Current Report on Form 8-K filed by New Relic
with the Securities and Exchange Commission (SEC).
Given the announced transaction, New Relic will not host an
earnings conference call or provide financial guidance in
conjunction with this earnings release. New Relic is also
withdrawing its previous financial guidance for fiscal year 2024
and has suspended any further updates as a result of the pending
transaction. In addition, New Relic will no longer attend the
Canaccord Genuity 43rd Annual Growth Conference on August 10, 2023
in light of the pending transaction. For further detail and
discussion of New Relic’s financial performance please refer to New
Relic’s Quarterly Report on Form 10-Q for the quarter ended June
30, 2023, which will be filed later today with the SEC.
_______
(1) This press release uses non-GAAP financial metrics that are
adjusted for the impact of various GAAP items. See the section
titled “Non-GAAP Financial Measures” and the tables entitled
“Reconciliation from GAAP to Non-GAAP Results” below for
details.
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 adidas
Runtastic, American Red Cross, Australia Post, Banco Inter, Chegg,
GoTo Group, Ryanair, Sainsbury’s, Signify Health, TopGolf, and
World Fuel Services (WFS) improve uptime, reliability, and
operational efficiency to deliver exceptional customer experiences
that fuel innovation and growth. www.newrelic.com.
Important Information and Where to Find It
This communication is being made in respect of the proposed
transaction involving New Relic, FP and TPG. A special stockholder
meeting will be announced soon to obtain stockholder approval in
connection with the proposed transaction. New Relic expects to file
with the Securities and Exchange Commission (the “SEC”) a proxy
statement and other relevant documents in connection with the
proposed merger. The definitive proxy statement will be sent or
given to the stockholders of New Relic and will contain important
information about the proposed transaction and related matters.
INVESTORS OF NEW RELIC ARE URGED TO READ THE DEFINITIVE PROXY
STATEMENT AND OTHER RELEVANT MATERIALS CAREFULLY AND IN THEIR
ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND RELATED
MATTERS. Investors may obtain a free copy of these materials (when
they are available) and other documents filed by the Company with
the SEC at the SEC’s website at www.sec.gov, at New Relic’s website
at ir.newrelic.com/financial-information.
Participants in the Solicitation
New Relic and certain of its directors, executive officers and
other members of management and employees may be deemed to be
participants in the solicitation of proxies from its stockholders
in connection with the proposed merger. Information regarding the
persons who may, under the rules of the SEC, be considered to be
participants in the solicitation of New Relic’s stockholders in
connection with the proposed merger will be set forth in New
Relic’s definitive proxy statement for its special stockholder
meeting. Additional information regarding these individuals and any
direct or indirect interests they may have in the proposed merger
will be set forth in the definitive proxy statement when and if it
is filed with the SEC in connection with the proposed merger.
Forward-Looking Statements
This communication contains “forward-looking statements” within
the meaning of federal securities laws, including Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking
statements are based on New Relic’s current expectations, estimates
and projections about the expected date of closing of the proposed
transaction and the potential benefits thereof, its business and
industry, management’s beliefs and certain assumptions made by New
Relic, FP and TPG, all of which are subject to change. Words such
as “may,” “will,” “should,” “would,” “might,” “expects,” “plans,”
“anticipates,” “could,” “intends,” “target,” “projects,”
“contemplates,” “believes,” “estimates,” “predicts,” “potential,”
or “continue” or the negative of these words or other similar terms
or expressions that concern our expectations, estimates and
projections. The forward-looking statements in this communication
include statements regarding the transaction and the ability to
consummate the transaction. Forward-looking statements speak only
as of the date they are made, and New Relic undertakes no
obligation to update any of them publicly in light of new
information or future events. Actual results could differ
materially from those contained in any forward-looking statement as
a result of various factors, including, without limitation: (i) the
completion of the proposed transaction on anticipated terms and
timing, including obtaining stockholder and regulatory approvals,
anticipated tax treatment, unforeseen liabilities, future capital
expenditures, revenues, expenses, earnings, synergies, economic
performance, indebtedness, financial condition, losses, future
prospects, business and management strategies for the management,
expansion and growth of New Relic’s business and other conditions
to the completion of the transaction; (ii) conditions to the
closing of the transaction may not be satisfied; (iii) the
transaction may involve unexpected costs, liabilities or delays;
(iv) the outcome of any legal proceedings related to the
transaction; (v) the failure by FP and TPG to obtain the necessary
debt financing arrangements set forth in the commitment letters
received in connection with the transaction; (vi) New Relic’s
ability to implement its business strategy; (vii) significant
transaction costs associated with the proposed transaction; (viii)
potential litigation relating to the proposed transaction; (ix) the
risk that disruptions from the proposed transaction will harm New
Relic’s business, including current plans and operations; (x) the
ability of New Relic to retain and hire key personnel; (xi)
potential adverse reactions or changes to business relationships
resulting from the announcement or completion of the proposed
transaction; (xii) legislative, regulatory and economic
developments affecting New Relic’s business; (xiii) general
economic and market developments and conditions; (xiv) the evolving
legal, regulatory and tax regimes under which New Relic operates;
(xv) potential business uncertainty, including changes to existing
business relationships, during the pendency of the merger that
could affect New Relic’s financial performance; (xvi) restrictions
during the pendency of the proposed transaction that may impact New
Relic’s ability to pursue certain business opportunities or
strategic transactions; and (xvii) unpredictability and severity of
catastrophic events, including, but not limited to, acts of
terrorism or outbreak of war or hostilities, as well as New Relic’s
response to any of the aforementioned factors. While the list of
factors presented here is considered representative, such list
should not be considered to be a complete statement of all
potential risks and uncertainties. Unlisted factors may present
significant additional obstacles to the realization of
forward-looking statements. Consequences of material differences in
results as compared with those anticipated in the forward-looking
statements could include, among other things, business disruption,
operational problems, financial loss, legal liability to third
parties and similar risks, any of which could have a material
adverse effect on New Relic’s financial condition, results of
operations, or liquidity. New Relic does not assume any obligation
to publicly provide revisions or updates to any forward-looking
statements, whether as a result of new information, future
developments or otherwise, should circumstances change, except as
otherwise required by securities and other applicable laws.
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 operating income (loss), non-GAAP gross profit,
non-GAAP gross margin, non-GAAP operating expenses (research and
development, sales and marketing, and general and administrative),
non-GAAP operating margin, non-GAAP net income (loss), non-GAAP net
income (loss) per diluted share, non-GAAP net income (loss) 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, or superior to, 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), non-GAAP net income (loss) per diluted share and non-GAAP
net income (loss) per basic share as the respective GAAP balances,
adjusted for, as applicable: (1) stock-based compensation-related
expenses, (2) the amortization of purchased intangibles, (3)
amortization of debt discount and issuance costs, (4) lawsuit
litigation cost and other expense, (5) restructuring charges, and
(6) non-GAAP tax adjustment. Non-GAAP net income (loss) per basic
and diluted share is calculated as non-GAAP net income (loss)
divided by weighted-average shares used to compute net income
(loss) 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-related expenses. New Relic’s
stock-based compensation-related expenses include stock-based
compensation expense, amortization of stock-based compensation
capitalized in software development costs and employer payroll tax
expense on equity incentive plans. New Relic utilizes share-based
compensation to attract and retain employees. It is principally
aimed at aligning their interests with those of the Company’s
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. The Company further 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 the Company’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 the
Company’s business.
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. Amortization of purchased
intangibles varies in amount and frequency and is significantly
impacted by the timing and size of the Company’s acquisitions.
Management finds it useful to exclude these non-cash charges from
operating expenses to assist in budgeting, planning, and
forecasting future periods. The use of intangible assets
contributed to the Company’s revenues during the periods presented
and will also contribute to its revenues in future periods.
Amortization of purchased intangible assets will recur in future
periods.
Amortization of debt discount and issuance costs. In May 2018,
New Relic issued $500.25 million of its 0.50% convertible senior
notes due 2023 (the “Notes”), which bore interest at an annual
fixed rate of 0.5%. The Notes matured and were repaid in cash on
May 1, 2023. 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 its
operational performance in different periods.
Lawsuit litigation cost and other expense. New Relic may from
time to time incur charges or benefits related to litigation or
transactions 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.
Restructuring charges. In August 2022, New Relic commenced a
restructuring plan to realign its cost structure with its business
needs as the Company moved to focus resources on top priorities,
and in March 2023, the Company approved a new restructuring plan in
connection with the reduction of its global real estate footprint
in line with its Flex First philosophy. In the first fiscal quarter
of 2024, the Company announced the adoption of a new restructuring
plan focused on realigning resources with the Company’s business
needs in driving the growth of its consumption business. As a
result of this and previously announced restructuring plans, New
Relic incurred charges of approximately $21.7 million consisting of
employee wages, termination benefits, and lease exit costs for the
three months ended June 30, 2023. New Relic believes it is
appropriate to exclude the restructuring charges because they are
not indicative of future operating results.
Non-GAAP tax adjustment. The Company used a long-term projected
non-GAAP tax rate to provide consistency across interim reporting
periods with non-GAAP net income. As the Company was forecasted to
be non-GAAP profitable on an annual basis starting in fiscal year
2024, New Relic applied the non-GAAP tax rate prospectively in the
first fiscal quarter of 2024. In determining the non-GAAP tax rate,
New Relic excluded the impact of nonrecurring items and made
assumptions including those about tax legislation and its tax
positions. New Relic projected a 24.0% non-GAAP tax rate based on
non-GAAP financial projections and applied it to the non-GAAP
profit before tax.
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.
New Relic, Inc.
Condensed Consolidated
Statements of Operations
(In thousands, except per share
data; unaudited)
Three Months Ended June
30,
2023
2022
Revenue
$
242,628
$
216,459
Cost of revenue
54,440
63,893
Gross profit
188,188
152,566
Operating expenses:
Research and development
80,310
64,769
Sales and marketing
94,019
104,420
General and administrative
46,849
39,030
Total operating expenses
221,178
208,219
Loss from operations
(32,990
)
(55,653
)
Other income (expense):
Interest income
4,593
1,110
Interest expense
(429
)
(1,232
)
Other expense, net
(1,666
)
(209
)
Loss before income taxes
(30,492
)
(55,984
)
Income tax provision
2,830
267
Net loss
$
(33,322
)
$
(56,251
)
Net loss and adjustment attributable to
redeemable non-controlling interest
(4,109
)
6,012
Net loss attributable to New Relic
$
(37,431
)
$
(50,239
)
Net loss attributable to New Relic per
share, basic and diluted
$
(0.54
)
$
(0.76
)
Weighted-average shares used to compute
net loss per share, basic and diluted
69,546
66,421
New Relic, Inc.
Supplemental Revenue
Disaggregation
(In thousands; unaudited)
Three Months Ended June
30,
2023
2022
Subscription
$
28,720
$
63,080
Consumption
213,908
153,379
Total revenue
$
242,628
$
216,459
New Relic, Inc.
Condensed Consolidated Balance
Sheets
(In thousands, except par value;
unaudited)
June 30, 2023
March 31, 2023
Assets
Current assets:
Cash and cash equivalents
$
240,699
$
625,727
Short-term investments
216,285
254,085
Accounts receivable, net of allowances of
$2,576 and $3,121, respectively
132,002
234,287
Prepaid expenses and other current
assets
19,678
17,747
Deferred contract acquisition costs
13,203
14,962
Total current assets
621,867
1,146,808
Property and equipment, net
48,141
48,509
Restricted cash
5,805
5,795
Goodwill
172,298
172,298
Intangible assets, net
10,128
11,603
Deferred contract acquisition costs,
non-current
10,831
8,558
Lease right-of-use assets
16,641
19,678
Other assets, non-current
5,573
5,759
Total assets
$
891,284
$
1,419,008
Liabilities, redeemable non-controlling
interest and stockholders’ equity
Current liabilities:
Accounts payable
$
39,356
$
29,452
Accrued compensation and benefits
43,970
37,552
Other current liabilities
33,076
39,424
Convertible senior notes, current
—
500,044
Deferred revenue
313,139
370,987
Lease liabilities
8,992
10,928
Total current liabilities
438,533
988,387
Lease liabilities, non-current
35,846
38,384
Deferred revenue, non-current
6,374
3,800
Other liabilities, non-current
30,430
24,897
Total liabilities
511,183
1,055,468
Redeemable non-controlling interest
27,214
23,105
Stockholders’ equity:
Common stock, $0.001 par value
70
69
Treasury stock - at cost (260 shares)
(263
)
(263
)
Additional paid-in capital
1,360,656
1,311,615
Accumulated other comprehensive loss
(6,591
)
(7,432
)
Accumulated deficit
(1,000,985
)
(963,554
)
Total stockholders’ equity
352,887
340,435
Total liabilities, redeemable
non-controlling interest, and stockholders’ equity
$
891,284
$
1,419,008
New Relic, Inc.
Condensed Consolidated
Statements of Cash Flows
(In thousands; unaudited)
Three Months Ended June
30,
2023
2022
Cash flows from operating
activities:
Net loss attributable to New Relic
$
(37,431
)
$
(50,239
)
Net loss and adjustment attributable to
redeemable non-controlling interest
$
4,109
$
(6,012
)
Net loss:
$
(33,322
)
$
(56,251
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
6,727
10,644
Amortization of deferred contract
acquisition costs
5,190
7,224
Stock-based compensation expense
46,437
34,882
Amortization of debt discount and issuance
costs
206
593
Non-cash charges related to restructuring
activities
3,167
—
Other
829
(352
)
Changes in operating assets and
liabilities, net of acquisition of business:
Accounts receivable, net
102,285
116,545
Prepaid expenses and other assets
(2,984
)
(147
)
Deferred contract acquisition costs
(5,704
)
(416
)
Lease right-of-use assets
1,629
2,562
Accounts payable
10,124
2,650
Accrued compensation and benefits and
other liabilities
(191
)
(4,562
)
Lease liabilities
(810
)
(4,457
)
Deferred revenue
(55,274
)
(65,906
)
Net cash provided by operating
activities
78,309
43,009
Cash flows from investing
activities:
Purchases of property and equipment
(515
)
(1,294
)
Proceeds from sale of property and
equipment
415
943
Purchases of short-term investments
—
(50,373
)
Proceeds from sale and maturity of
short-term investments
38,500
44,175
Capitalized software development costs
(4,279
)
(3,387
)
Net cash provided by (used in)
investing activities
34,121
(9,936
)
Cash flows from financing
activities:
Payment of convertible senior notes
(500,250
)
—
Proceeds from exercise of employee stock
options
2,802
1,725
Net cash provided by (used in)
financing activities
(497,448
)
1,725
Net increase (decrease) in cash, cash
equivalents and restricted cash
(385,018
)
34,798
Cash, cash equivalents and restricted cash
at beginning of period
631,522
274,470
Cash, cash equivalents and restricted cash
at end of period
$
246,504
$
309,268
New Relic, Inc.
Reconciliation from GAAP to
Non-GAAP Results
(In thousands, except per share
data; unaudited)
Three Months Ended June
30,
2023
2022
Reconciliation of gross profit and
gross margin:
GAAP gross profit
$
188,188
$
152,566
Plus: Stock-based compensation-related
expenses
1,850
2,137
Plus: Amortization of purchased
intangibles
1,475
2,291
Plus: Restructuring charges
1,060
—
Non-GAAP gross profit
$
192,573
$
156,994
GAAP gross margin
77.6
%
70.5
%
Non-GAAP adjustments
1.8
%
2.0
%
Non-GAAP gross margin
79.4
%
72.5
%
Reconciliation of operating
expenses:
GAAP research and development
$
80,310
$
64,769
Less: Stock-based compensation-related
expenses
(17,259
)
(13,525
)
Less: Restructuring charges
(8,821
)
—
Non-GAAP research and
development
$
54,230
$
51,244
GAAP sales and marketing
$
94,019
$
104,420
Less: Stock-based compensation-related
expenses
(12,304
)
(10,751
)
Less: Restructuring charges
(7,785
)
—
Non-GAAP sales and marketing
$
73,930
$
93,669
GAAP general and administrative
$
46,849
$
39,030
Less: Stock-based compensation-related
expenses
(12,307
)
(9,966
)
Less: Lawsuit litigation cost and other
expense
(2,573
)
174
Less: Restructuring charges
(3,991
)
—
Non-GAAP general and
administrative
$
27,978
$
29,238
Reconciliation of income (loss) from
operations and operating margin:
GAAP loss from operations
$
(32,990
)
$
(55,653
)
Plus: Stock-based compensation-related
expenses
43,720
36,379
Plus: Amortization of purchased
intangibles
1,475
2,291
Plus: Lawsuit litigation cost and other
expense
2,573
(174
)
Plus: Restructuring charges
21,657
—
Non-GAAP income (loss) from
operations
$
36,435
$
(17,157
)
GAAP operating margin
(13.6
)%
(25.7
)%
Non-GAAP adjustments
28.6
%
17.8
%
Non-GAAP operating margin
15.0
%
(7.9
)%
Reconciliation of net income
(loss):
GAAP net loss
$
(33,322
)
$
(56,251
)
Plus: Stock-based compensation-related
expenses
43,720
36,379
Plus: Amortization of purchased
intangibles
1,475
2,291
Plus: Lawsuit litigation cost and other
expense
2,573
(174
)
Plus: Amortization of debt discount and
issuance costs
206
593
Plus: Restructuring charges
21,657
—
Less: Non-GAAP tax adjustment
(5,884
)
—
Non-GAAP net income (loss)
$
30,425
$
(17,162
)
Non-GAAP net income (loss) per
share:
Basic
$
0.44
$
(0.26
)
Diluted
$
0.43
$
(0.26
)
Shares used in non-GAAP per share
calculations:
Basic
69,546
66,421
Diluted
71,525
66,421
New Relic, Inc.
Reconciliation of GAAP Cash
Flows from Operating Activities to Free Cash Flow
(In thousands; unaudited)
Three Months Ended June
30,
2023
2022
Net cash provided by operating
activities
$
78,309
$
43,009
Capital expenditures
(515
)
(1,294
)
Capitalized software development costs
(4,279
)
(3,387
)
Free cash flow (Non-GAAP)
$
73,515
$
38,328
Net cash provided by (used in)
investing activities
$
34,121
$
(9,936
)
Net cash provided by (used in)
financing activities
$
(497,448
)
$
1,725
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230730575209/en/
Investor Contact Ingo Friedrichowitz New Relic, Inc.
IR@newrelic.com
Media Contact Elena Keamy New Relic, Inc
PR@newrelic.com
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