NEWR
$57.00
New Relic
($.40)
(.70%)
Earnings Details
1st Quarter June 2019
Tuesday, August 6, 2019 4:05:00 PM
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Summary

New Relic Misses

New Relic (NEWR) reported 1st Quarter June 2019 earnings of $0.11 per share on revenue of $141.0 million. The consensus earnings estimate was $0.09 per share on revenue of $139.6 million. The Earnings Whisper number was $0.12 per share. Revenue grew 30.3% on a year-over-year basis.

The company said it expects second quarter earnings of $0.14 to $0.16 per share on revenue of $143.0 million to $145.0 million. The current consensus earnings estimate is $0.12 per share on revenue of $145.4 million for the quarter ending September 30, 2019. The company said it now expects fiscal 2020 earnings of $0.55 to $0.63 per share and continues to expect revenue of $600.0 million to $607.0 million. The company's previous guidance was earnings of $0.54 to $0.62 per share and the current consensus earnings estimate is $0.56 per share on revenue of $605.6 million for the year ending March 31, 2020.

New Relic Inc is a software-as-a-service provider of software analytics products which allow users to monitor software performance with .NET, Java, JavaScript, Node.js, PHP, Python, and Ruby applications deployed in a cloud or in a data center.

Results
Reported Earnings
$0.11
Earnings Whisper
$0.12
Consensus Estimate
$0.09
Reported Revenue
$141.0 Mil
Revenue Estimate
$139.6 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

New Relic Announces First Quarter Fiscal Year 2020 Results

First quarter revenue increased 30% year-over-year to $141.0 million

Quarterly GAAP operating loss of $(16.9) million; Non-GAAP operating income of $7.4 million

SAN FRANCISCO--(BUSINESS WIRE)--New Relic, Inc. (NYSE: NEWR), the industry’s largest and most comprehensive cloud-based instrumentation platform built to help customers create more perfect software, today announced financial results for the first quarter of fiscal year 2020 ended June 30, 2019.

“We launched New Relic One, released monitoring for AWS Lambda, and finalized operating model enhancements to product and sales organizations during the first quarter,” said Lew Cirne, CEO and founder of New Relic, Inc. “Navigating these changes proved challenging and impacted our Q1 results. However, we believe that these strategic initiatives will enable us to drive sustainable growth by delivering incredible products that delight our customers.”

First Quarter Fiscal Year 2020 Financial Highlights:

  • Revenue of $141.0 million, compared to $108.2 million for the first quarter of fiscal 2019.
  • GAAP loss from operations was $(16.9) million, compared to $(3.6) million for the first quarter of fiscal 2019.
  • Non-GAAP income from operations was $7.4 million, compared to $8.7 million for the first quarter of fiscal 2019.
  • GAAP net loss attributable to New Relic per basic share was $(0.26), compared to a loss of $(0.10) per basic share for the first quarter of fiscal 2019.
  • Non-GAAP net income attributable to New Relic per diluted share was $0.19, compared to $0.15 per diluted share for the first quarter of fiscal 2019.
  • Cash, cash equivalents and short-term investments were $768.9 million at the end of the first quarter of fiscal 2020, compared with $744.7 million at the end of the fourth quarter of fiscal 2019.

First Quarter & Recent Business Highlights:

  • $100K+ Paid Business Accounts as of June 30, 2019 of 881, compared to 748 as of June 30, 2018.
  • 62% of ARR from Enterprise Paid Business Accounts as of June 30, 2019, compared to 55% as of June 30, 2018.
  • Dollar-Based Net Expansion Rate for the first quarter of fiscal 2020 of 109%, compared to 118% as of the first quarter of fiscal 2019.
  • Andrew Lawson joined New Relic as Executive Vice President and General Manager of EMEA.
  • Introduced New Relic One, empowering teams to accelerate innovation and deliver more perfect software faster.

Outlook:

New Relic has not reconciled its expectations as to non-GAAP income from operations or non-GAAP net income per diluted share to their most directly comparable GAAP measures as a result of uncertainty regarding, and the potential variability of, reconciling items such as stock-based compensation expense, lawsuit litigation cost and other expense, employer payroll taxes on equity incentive plans and gain or loss from lease modification. Accordingly, reconciliation is not available without unreasonable effort, although it is important to note that these factors could be material to New Relic’s results computed in accordance with GAAP.

  • Second Quarter Fiscal 2020 Outlook:
    • Revenue between $143.0 million and $145.0 million, representing year-over-year growth of between 25% and 26%, respectively.
    • Non-GAAP income from operations of between $5.0 million and $6.0 million.
    • Non-GAAP net income attributable to New Relic per diluted share between $0.14 and $0.16.
  • Full Year Fiscal 2020 Outlook:
    • Revenue between $600.0 million and $607.0 million, representing year-over-year growth of between 25% and 27%, and unchanged from prior guidance that was issued on May 14, 2019.
    • Non-GAAP income from operations of between $20.0 million and $25.0 million, unchanged from prior guidance that was issued on May 14, 2019.
    • Non-GAAP net income attributable to New Relic per diluted share between $0.55 and $0.63.

Conference Call Details:

  • What: New Relic financial results for the first quarter of fiscal year 2020 and outlook for the second quarter and the full year of fiscal 2020.
  • When: August 6, 2019 at 2:00 P.M. Pacific Time (5:00 P.M. Eastern Time)
  • Dial in: To access the call in the U.S., please dial (833) 241-7256, and for international callers, please dial (647) 689-4220. Callers may provide confirmation number 7637649 to access the call more quickly, and are encouraged to dial into the call 10 to 15 minutes prior to the start to prevent any delay in joining.
  • Webcast: http://ir.newrelic.com (live and replay)
  • Replay: Following the completion of the call through 11:59 p.m. Eastern Time on August 13, 2019, a telephone replay will be available by dialing (800) 585-8367 from the United States or (416) 621-4642 internationally with conference ID 7637649.

About New Relic

New Relic is the industry’s largest and most comprehensive cloud-based instrumentation platform built to help customers create more perfect software. The world’s best software and DevOps teams rely on New Relic to move faster, make better decisions and create best-in-class digital experiences. If you run software, you need to run New Relic. Learn why more than 50% of the Fortune 100 trust New Relic to make the world’s software run at newrelic.com.

Forward-Looking Statements

This press release and the earnings call referencing this press release contain “forward-looking” statements, as that term is defined under the federal securities laws, including but not limited to statements regarding New Relic’s future financial performance, including its outlook on financial results for the second quarter and for the full year of fiscal 2020, such as revenue, non-GAAP income from operations, non-GAAP net income attributable to New Relic per diluted share, cash from operations, free cash flow, gross margins, operating margins, deferred revenue, capital expenditures and capitalized software; and market trends and opportunity, including New Relic’s market position and competitive advantage, expectations of long-term benefits from early investments and operational initiatives, New Relic’s future innovation and growth as a result of New Relic One, New Relic’s ability to increase innovation velocity to address the growing market, the anticipated growth in international markets and ability to realize improvements from current initiatives, the value proposition of New Relic’s products and features to customers, benefits from and investments in New Relic One, including future product features and their contributions to New Relic’s overall business growth, and anticipated headcount. These forward-looking statements are based on New Relic’s current assumptions, expectations and beliefs and are subject to substantial risks, uncertainties, assumptions and changes in circumstances that may cause New Relic’s actual results, performance or achievements to differ materially from those expressed or implied in any forward-looking statement.

The risks and uncertainties referred to above include, but are not limited to, New Relic’s ability to generate sufficient revenue to achieve and sustain profitability, particularly in light of its significant ongoing expenses; New Relic’s short operating history in an evolving industry; New Relic’s ability to manage its significant recent growth; the development of the overall market for SaaS business software; the dependence of New Relic’s business on its customers purchasing additional subscriptions and products from it and renewing their subscriptions; New Relic’s ability to develop enhancements to its products, increase adoption and usage of its products and introduce new products that achieve market acceptance; the dependence on customers expanding their use of New Relic’s products beyond the current predominant use cases; New Relic’s ability to determine optimal prices for its products; New Relic’s ability to expand its marketing and sales capabilities and increase sales of its solutions to large enterprises while mitigating the risks associated with serving such customers; privacy concerns, including changes in privacy laws and regulations, which could result in additional cost and liability to New Relic or inhibit sales; New Relic’s ability to effectively compete in the intensely competitive market for application performance monitoring solutions and respond effectively to rapidly changing technology, evolving industry standards and changing customer needs, requirements or preferences; fluctuation of New Relic’s quarterly results; New Relic’s dependence on lead generation strategies to drive sales and revenue; interruptions or performance problems associated with New Relic’s technology and infrastructure; New Relic’s dependence on SaaS technologies and related services from third parties; defects or disruptions in New Relic’s products; the expense and complexity of New Relic’s ongoing and planned investments in data center hosting facilities; risks associated with international operations; New Relic’s ability to protect its intellectual property rights; risks related to the acquisition and integration of businesses or technologies; certain risks associated with incurring indebtedness, including risks related to servicing New Relic’s convertible senior notes and related capped call transactions; and other “Risk Factors” set forth in New Relic’s most recent filings with the Securities and Exchange Commission (the “SEC”).

Further information on these and other factors that could affect New Relic’s financial results and the forward-looking statements in this press release and in the earnings call referencing this press release is included in the filings New Relic makes with the SEC from time to time, particularly under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” including our Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and subsequent filings. Copies of these documents may be obtained by visiting New Relic’s Investor Relations website at http://ir.newrelic.com or the SEC’s website at www.sec.gov.

All information provided in this press release and in the earnings call is as of the date hereof and New Relic assumes no obligation and does not intend to update these forward-looking statements, except as required by law.

Non-GAAP Financial Measures

New Relic discloses the following non-GAAP financial measures in this press release and the earnings call referencing this press release: non-GAAP income from operations, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses (sales and marketing, research and development, general and administrative), non-GAAP operating margin, non-GAAP net income attributable to New Relic, non-GAAP net income attributable to New Relic per diluted share, non-GAAP net income attributable to New Relic per basic share and free cash flow. New Relic uses each of these non-GAAP financial measures internally to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, for short- and long-term operating plans, and to evaluate New Relic’s financial performance. In addition, New Relic’s bonus plan for eligible employees and executives is based in part on non-GAAP income from operations. New Relic believes these non-GAAP financial measures are useful to investors, as a supplement to GAAP measures, in evaluating its operational performance, as further discussed below. New Relic’s non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in its industry, as other companies in its industry may calculate non-GAAP financial results differently, particularly related to non-recurring and unusual items. In addition, there are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies and exclude expenses that may have a material impact on New Relic’s reported financial results.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. A reconciliation of the historical non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included below in this press release.

New Relic defines non-GAAP income from operations, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses (sales and marketing, research and development, general and administrative), non-GAAP operating margin, non-GAAP net income attributable to New Relic, non-GAAP net income attributable to New Relic per diluted share and non-GAAP net income attributable to New Relic per basic share as the respective GAAP balances, adjusted for, as applicable: (1) stock-based compensation expense, (2) 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 and (5) amortization of debt discount and issuance costs, and in certain periods (6) the transaction costs related to acquisitions (7) lawsuit litigation cost and other expense and (8) gain or loss from lease modification. Non-GAAP net income per basic and diluted share is calculated as non-GAAP net income attributable to New Relic divided by weighted-average shares used to compute net income attributable to New Relic per share, basic and diluted, with the number of weighted-average shares decreased to reflect the anti-dilutive impact of the capped call transactions entered into in connection with the 0.50% Convertible Senior Notes due 2023 issued in May 2018. New Relic defines free cash flow as GAAP cash from operations, minus capital expenditures and minus capitalized software. Investors are encouraged to review the reconciliation of these historical non-GAAP financial measures to their most directly comparable GAAP financial measures.

Management believes these non-GAAP financial measures are useful to investors and others in assessing New Relic’s operating performance due to the following factors:

Stock-based compensation expense and amortization of stock-based compensation capitalized in software development costs. New Relic utilizes share-based compensation to attract and retain employees. It is principally aimed at aligning their interests with those of its stockholders and at long-term retention, rather than to address operational performance for any particular period. As a result, share-based compensation expenses vary for reasons that are generally unrelated to financial and operational performance in any particular period.

Amortization of purchased intangibles and transaction costs related to acquisitions. New Relic views amortization of purchased intangible assets as items arising from pre-acquisition activities determined at the time of an acquisition. While these intangible assets are evaluated for impairment regularly, amortization of the cost of purchased intangibles is an expense that is not typically affected by operations during any particular period. Similarly, New Relic views acquisition-related expenses as events that are not necessarily reflective of operational performance during a period.

Lawsuit litigation cost and other expense. New Relic may from time to time incur charges or benefits related to litigation that are outside of the ordinary course of New Relic’s business. New Relic believes it is useful to exclude such charges or benefits because it does not consider such amounts to be part of the ongoing operation of New Relic’s business and because of the singular nature of the claims underlying the matter.

Employer payroll tax expense on equity incentive plans. New Relic excludes employer payroll tax expense on equity incentive plans as these expenses are tied to the exercise or vesting of underlying equity awards and the price of New Relic’s common stock at the time of vesting or exercise. As a result, these taxes may vary in any particular period independent of the financial and operating performance of New Relic’s business.

Amortization of debt discount and issuance costs. In May 2018, New Relic issued $500.25 million of convertible senior notes due in 2023, which bear interest at an annual fixed rate of 0.50%. The effective interest rate of the convertible senior notes was approximately 5.74%. This is a result of the debt discount recorded for the conversion feature that is required to be separately accounted for as equity, and debt issuance costs, which reduce the carrying value of the convertible debt instrument. The debt discount is amortized as interest expense together with the issuance costs of the debt. The expense for the amortization of debt discount and debt issuance costs is a non-cash item, and we believe the exclusion of this interest expense will provide for a more useful comparison of our operational performance in different periods.

Gain or loss from lease modification. New Relic may incur a gain or loss from modification related to lease agreements. New Relic believes it is useful to exclude such charges or benefits because it does not consider such amounts to be part of the ongoing operation of New Relic’s business and because of the singular nature of benefit or charge from such events.

Anti-dilutive impact of capped call transactions. In connection with the issuance of its convertible senior notes due in 2023, New Relic entered into capped call transactions to offset potential dilution from the embedded conversion feature in the notes. Although New Relic cannot reflect the anti-dilutive impact of the capped call transactions under GAAP, New Relic does reflect the anti-dilutive impact of the capped call transactions in non-GAAP net income attributable to New Relic per share, basic and diluted, to provide investors with useful information in evaluating the financial performance of the company on a per share basis.

Additionally, New Relic’s management believes that the non-GAAP financial measure free cash flow is meaningful to investors because management reviews cash flows generated from operations after taking into consideration capital expenditures and the capitalization of software development costs due to the fact that these expenditures are considered to be a necessary component of ongoing operations.

Operating Metrics

New Relic defines the number of paid business accounts at the end of any particular period as the number of accounts at the end of the period as identified by a unique account identifier for which New Relic has recognized revenue on the last day of the period indicated. A single organization or customer may have multiple paid business accounts for separate divisions, segments, or subsidiaries. New Relic defines an enterprise paid business account as a paid business account that New Relic measures to have over 1,000 employees.

New Relic’s monthly recurring revenue represents the revenue that New Relic would contractually expect to receive from those customers over the following month, without any increase or reduction in any of their subscriptions. Similarly, annual recurring revenue represents the revenue that New Relic would contractually expect to receive from those customers over the following 12-month period, without any increase or reduction in any of their subscriptions.

New Relic’s dollar-based net expansion rate compares its recurring subscription revenue from customers from one period to the next. It is increased when customers increase their use of New Relic’s products, use additional products, or upgrade to a higher subscription tier. New Relic’s dollar-based net expansion rate is reduced when customers decrease their use of New Relic’s products, use fewer products, or downgrade to a lower subscription tier.

New Relic is a registered trademark of New Relic, Inc.

All product and company names herein may be trademarks of their registered owners.

Condensed Consolidated Statements of Operations
(In thousands, except per share data; unaudited)
Three Months Ended June 30,

2019

2018

Revenue

$

141,010

 

$

108,221

 

Cost of revenue

 

23,613

 

 

17,050

 

Gross profit

 

117,397

 

 

91,171

 

Operating expenses:
Research and development

 

34,339

 

 

22,603

 

Sales and marketing

 

76,850

 

 

57,488

 

General and administrative

 

23,100

 

 

14,711

 

Total operating expenses

 

134,289

 

 

94,802

 

Loss from operations

 

(16,892

)

 

(3,631

)

Other income (expense):
Interest income

 

4,140

 

 

1,845

 

Interest expense

 

(5,819

)

 

(2,666

)

Other income (expense), net

 

2,978

 

 

(842

)

Loss before income taxes

 

(15,593

)

 

(5,294

)

Income tax provision (benefit)

 

(36

)

 

321

 

Net loss

$

(15,557

)

$

(5,615

)

Net loss attributable to redeemable non-controlling interest

 

388

 

 

-

 

Net loss attributable to New Relic

$

(15,169

)

$

(5,615

)

Net loss attributable to New Relic per share, basic and diluted

$

(0.26

)

$

(0.10

)

Weighted-average shares used to compute net loss per share, basic and diluted

 

57,944

 

 

56,183

 

 
 
Condensed Consolidated Balance Sheets
(In thousands, except par value; unaudited)
June 30,March 31,

 

2019

 

 

2019

 

Assets
Current assets:
Cash and cash equivalents

$

228,140

 

$

234,356

 

Short-term investments

 

540,795

 

 

510,372

 

Accounts receivable, net of allowance for doubtful accounts of $2,258 and $2,457, respectively

 

84,173

 

 

120,605

 

Prepaid expenses and other current assets

 

18,878

 

 

21,838

 

Deferred contract acquisition costs

 

28,572

 

 

27,161

 

Total current assets

 

900,558

 

 

914,332

 

Property and equipment, net

 

92,336

 

 

80,742

 

Restricted cash

 

8,419

 

 

8,805

 

Goodwill

 

41,512

 

 

41,512

 

Intangible assets, net

 

13,415

 

 

13,855

 

Deferred contract acquisition costs, non-current

 

27,018

 

 

26,218

 

Lease right-of-use assets

 

64,177

 

Other assets, non-current

 

5,731

 

 

4,763

 

Total assets

$

1,153,166

 

$

1,090,227

 

Liabilities, redeemable non-controlling interest, and stockholders’ equity
Current liabilities:
Accounts payable

$

14,513

 

$

10,249

 

Accrued compensation and benefits

 

23,831

 

 

23,537

 

Other current liabilities

 

13,652

 

 

14,572

 

Deferred revenue

 

253,200

 

 

267,000

 

Lease liabilities

 

7,361

 

Total current liabilities

 

312,557

 

 

315,358

 

Convertible senior notes, net

 

411,102

 

 

405,937

 

Lease liabilties, non-current

 

64,283

 

Deferred rent, non-current

 

11,025

 

Deferred revenue, non-current

 

2,186

 

 

4,597

 

Other liabilities, non-current

 

962

 

 

947

 

Total liabilities

 

791,090

 

 

737,864

 

Redeemable non-controlling interest

 

2,345

 

 

2,733

 

Stockholders’ equity:
Common stock, $0.001 par value

 

58

 

 

58

 

Treasury stock - at cost (260 shares)

 

(263

)

 

(263

)

Additional paid-in capital

 

678,533

 

 

654,759

 

Accumulated other comprehensive income

 

2,141

 

 

645

 

Accumulated deficit

 

(320,738

)

 

(305,569

)

Total stockholders’ equity

 

359,731

 

 

349,630

 

Total liabilities, redeemable non-controlling interest and stockholders’ equity

$

1,153,166

 

$

1,090,227

 

 
Condensed Consolidated Statements of Cash Flows
(In thousands; unaudited)
Three Months Ended June 30,

2019

2018

Cash flows from operating activities:
Net loss attributable to New Relic:

$

(15,169)

$

(5,615)

Net loss attributable to redeemable non-controlling interest

$

(388)

$

Net loss:

$

(15,557)

$

(5,615)

Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization

 

16,170

 

12,201

Stock-based compensation expense

 

21,188

 

11,027

Amortization of debt discount and issuance costs

 

5,165

 

2,340

Gain on lease modification

 

(3,006)

Other

 

(2,477)

 

842

Changes in operating assets and liabilities:
Accounts receivable, net

 

36,432

 

40,123

Prepaid expenses and other assets

 

459

 

933

Deferred contract acquisition costs

 

(9,819)

 

(7,444)

Lease right-of-use assets

 

14,923

Accounts payable

 

2,532

 

1,116

Accrued compensation and benefits and other liabilities

 

523

 

1,506

Lease liabilities

 

(13,806)

Deferred revenue

 

(16,211)

 

(7,157)

Deferred rent

 

512

Net cash provided by operating activities

 

36,516

 

50,384

Cash flows from investing activities:
Purchases of property and equipment

 

(16,234)

 

(7,040)

Purchases of short-term investments

 

(149,102)

 

(76,179)

Proceeds from sale and maturity of short-term investments

 

121,330

 

25,800

Capitalized software development costs

 

(1,383)

 

(1,850)

Net cash used in investing activities

 

(45,389)

 

(59,269)

Cash flows from financing activities:
Proceeds from issuance of convertible senior notes, net of issuance costs

 

488,669

Purchase of capped call related to convertible senior notes

 

(63,182)

Proceeds from exercise of employee stock options

 

2,271

 

5,794

Net cash provided by financing activities

 

2,271

 

431,281

Net increase (decrease) in cash, cash equivalents and restricted cash

 

(6,602)

 

422,396

Cash, cash equivalents and restricted cash at beginning of period

 

243,161

 

140,681

Cash, cash equivalents and restricted cash at end of period

$

236,559

$

563,077

 
Reconciliation from GAAP to Non-GAAP Results
(In thousands, except per share data; unaudited)
Three Months Ended June 30,

2019

2018

Reconciliation of gross profit and gross margin:
GAAP gross profit

$

 

117,397

$

 

91,171

Plus: Stock-based compensation expense

 

1,222

 

693

Plus: Amortization of purchased intangibles

 

440

 

197

Plus: Amortization of stock-based compensation capitalized in software development costs

 

207

 

189

Plus: Employer payroll tax on employee equity incentive plans

 

104

 

97

Non-GAAP gross profit

$

 

119,370

$

 

92,347

GAAP gross margin

 

83%

 

84%

Non-GAAP adjustments

 

2%

 

1%

Non-GAAP gross margin

 

85%

 

85%

Reconciliation of operating expenses:
GAAP research and development

$

 

34,339

$

 

22,603

Less: Stock-based compensation expense

 

(7,028)

 

(3,263)

Less: Employer payroll tax on employee equity incentive plans

 

(368)

 

(348)

Non-GAAP research and development

$

 

26,943

$

 

18,992

GAAP sales and marketing

$

 

76,850

$

 

57,488

Less: Stock-based compensation expense

 

(9,059)

 

(4,790)

Less: Employer payroll tax on employee equity incentive plans

 

(315)

 

(352)

Non-GAAP sales and marketing

$

 

67,476

 

52,346

GAAP general and administrative

$

 

23,100

$

 

14,711

Less: Stock-based compensation expense

 

(3,879)

 

(2,281)

Less: Lawsuit litigation cost and other expense

 

(1,521)

 

-

Less: Employer payroll tax on employee equity incentive plans

 

(131)

 

(138)

Non-GAAP general and administrative

$

 

17,569

$

 

12,292

Reconciliation of income (loss) from operations and operating margin:
GAAP loss from operations

$

 

(16,892)

$

 

(3,631)

Plus: Stock-based compensation expense

 

21,188

 

11,027

Plus: Amortization of purchased intangibles

 

440

 

197

Plus: Amortization of stock-based compensation capitalized in software development costs

 

207

 

189

Plus: Lawsuit litigation cost and other expense

 

1,521

 

-

Plus: Employer payroll tax on employee equity incentive plans

 

918

 

935

Non-GAAP income from operations

$

 

7,382

$

 

8,717

GAAP operating margin

 

-12%

 

-3%

Non-GAAP adjustments

 

17%

 

11%

Non-GAAP operating margin

 

5%

 

8%

Reconciliation of net income (loss):
GAAP net loss attributable to New Relic

$

 

(15,169)

$

 

(5,615)

Plus: Stock-based compensation expense

 

21,188

 

11,027

Plus: Amortization of purchased intangibles

 

440

 

197

Plus: Amortization of stock-based compensation capitalized in software development costs

 

207

 

189

Plus: Lawsuit litigation cost and other expense

 

1,521

 

-

Plus: Employer payroll tax on employee equity incentive plans

 

918

 

935

Plus: Amortization of debt discount and issuance costs

 

5,165

 

2,340

Less: Gain on lease modification

 

(3,006)

 

-

Non-GAAP net income attributable to New Relic

$

 

11,264

$

 

9,073

Non-GAAP net income attributable to New Relic per share:
Basic

$

 

0.19

$

 

0.16

Diluted

$

 

0.19

$

 

0.15

Shares used in non-GAAP per share calculations:
Basic

 

57,944

 

56,183

Diluted

 

60,294

 

59,448

 
Reconciliation of GAAP Cash Flows from Operating Activities to Free Cash Flows
(In thousands; unaudited)
Three Months Ended June 30,

2019

2018

Net cash provided by operating activities

$

36,516

$

50,384

Capital expenditures

 

(16,234)

 

(7,040)

Capitalized software development costs

 

(1,383)

 

(1,850)

Free cash flows (Non-GAAP)

$

18,899

$

41,494

Net cash used in investing activities

$

(45,389)

$

(59,269)

Net cash provided by financing activities

$

2,271

$

431,281

 

 

Investors
Tony Righetti
New Relic, Inc.
503-336-9280
IR@newrelic.com

Media
Andrew Schmitt
New Relic, Inc.
415-869-7109
pr@newrelic.com

Source: New Relic Corporate Communications