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press release

May 12, 2022, 4:06 p.m. EDT

New Relic Announces Fourth Quarter and Full Fiscal Year 2022 Results

Fourth quarter revenue increased 19% year-over-year to $206 million Quarterly GAAP operating loss of $(56) million; Non-GAAP operating loss of $(16) million Fiscal 2022 revenue increased 18% year-over-year to $786 million Fiscal 2022 GAAP operating loss of $(229) million; Non-GAAP operating loss of $(49) million

SAN FRANCISCO, (BUSINESS WIRE) -- New Relic, Inc. /zigman2/quotes/202610309/composite NEWR +3.36% , the observability company, today announced financial results for the fourth quarter and full fiscal year 2022 ended March 31, 2022.

“We finished FY22 with revenues of $786 million, well above the guidance of $710 million we set a year ago,” said New Relic CEO Bill Staples. “This was a transformative year for New Relic and I’m very proud of all the hard work our people put in to get here. I am excited to continue to execute against our top priority of revenue growth as we build on the progress we made in FY22."

Fourth Quarter Fiscal Year 2022 Financial Highlights:

  • Revenue of $206 million, compared to $173 million for the fourth quarter of fiscal 2021.

  • GAAP gross margin of 69% and non-GAAP gross margin of 71%.

  • GAAP loss from operations was $(56) million, compared to $(54) million for the fourth quarter of fiscal 2021.

  • Non-GAAP loss from operations was $(16) million, compared to $(18) million for the fourth quarter of fiscal 2021.

  • GAAP net loss attributable to New Relic per basic share was $(0.84), compared to $(0.98) per basic share for the fourth quarter of fiscal 2021.

  • Non-GAAP net loss attributable to New Relic per diluted share was $(0.24), compared to $(0.27) per diluted share for the fourth quarter of fiscal 2021.

  • Cash provided by operating activities was $50 million and free cash flow was $44 million for the fourth quarter of fiscal 2022.

  • Cash, cash equivalents and short-term investments were $829 million at the end of the fourth quarter of fiscal 2022, compared with $780 million at the end of the third quarter of fiscal 2022.

  • Remaining performance obligations were $706 million at the end of the fourth quarter of fiscal 2022, compared with $610 million at the end of the third quarter of fiscal 2022. This represents the aggregate unrecognized transaction price of remaining performance obligations as of each of March 31, 2022 and December 31, 2021.

Fiscal 2022 Financial Highlights:

  • Revenue of $786 million, up 18% compared with fiscal 2021.

  • GAAP loss from operations was $(229) million, compared with $(171) million for fiscal 2021.

  • Non-GAAP loss from operations was $(49) million, compared with $(25) million for fiscal 2021.

  • GAAP net loss attributable to New Relic per basic share was $(3.88), compared with $(3.15) per basic share for fiscal 2021.

  • Non-GAAP net loss attributable to New Relic per diluted share was $(0.77), compared to $(0.33) per diluted share for fiscal 2021.

Key Operating Metrics*:

  Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22
1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22
Active Customer Accounts 15,400 14,500 13,900 14,100 14,100 14,300 14,600 14,800
Active Customer Accounts >$100,000 862 894 913 945 964 1,011 1,064 1,099
Percentage of Revenue from Active Customer Accounts >$100,000 76% 77% 78% 79% 79% 81% 81% 82%
Net Revenue Retention Rate (NRR) 122% 119% 115% 112% 111% 112% 116% 119%

* Beginning with the first quarter of fiscal 2022, we introduced new key operating metrics and changed the methodology we use to count customer accounts. Total customer accounts are now aggregated at the parent hierarchy level and include any account for which we have recognized any revenue in the fiscal quarter. Please refer to the appendix for the definitions of these new key operating metrics.

Recent Business Highlights:

Outlook:

  • First Quarter Fiscal 2023 Outlook:

  • Full Year Fiscal 2023 Outlook:

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

Conference Call and Investor Letter Details:

  • What: New Relic financial results for the fourth quarter and full fiscal 2022 and outlook for the first quarter and the full year of fiscal 2023.

  • When: May 12, 2022 at 2:00 P.M. Pacific Time (5:00 P.M. Eastern Time)

  • Dial in: To access the call in the United States, please dial (646) 904-5544, and for international callers, please dial (929) 526-1599. Callers may provide confirmation number 988319 to access the call more quickly and are encouraged to dial into the call at least 15 minutes prior to the start to prevent any delay in joining.

  • Webcast: http://ir.newrelic.com (live and replay)

  • Investor Letter: Available at http://ir.newrelic.com

  • Replay: Following the completion of the call through 11:59 P.M. Eastern Time on May 19, 2022, a telephone replay will be available by dialing (866) 813-9403 from the United States or +44-204-525-0658 internationally with conference ID 505458.

About New Relic

As a leader in observability, New Relic empowers engineers with a data-driven approach to planning, building, deploying, and running great software. New Relic delivers the only unified data platform that empowers engineers to get all telemetry—metrics, events, logs, and traces—paired with powerful full stack analysis tools to help engineers do their best work with data, not opinions. Delivered through the industry’s first usage-based consumption pricing that’s intuitive and predictable, New Relic gives engineers more value for the money by helping improve planning cycle times, change failure rates, release frequency, and mean time to resolution. This helps the world’s leading brands including American Red Cross, Australia Post, Banco Inter, Chegg, Gojek, Signify Health, TopGolf, World Fuel Services (WFS), and Zalora improve uptime, reliability, and operational efficiency to deliver exceptional customer experiences that fuel innovation and growth. Uncover the ‘why’ with New Relic at www.newrelic.com .

Forward-Looking Statements

This press release and the earnings call referencing this press release contain “forward-looking” statements, as that term is defined under the federal securities laws, including but not limited to statements regarding: New Relic’s future financial performance, including its outlook on financial results for the first quarter and the full year of fiscal 2023, such as revenue, non-GAAP loss from operations, non-GAAP net loss attributable to New Relic per diluted share, accelerating revenue growth and non-GAAP profitability in fiscal 2023, relationship between data ingest, profitable growth and value creation in the long-term, non-GAAP gross margins in the first quarter and full year fiscal 2023, completion of New Relic’s transition to the cloud by the end of fiscal 2023 and impact on gross margins, potential trends in commitments and consumption over commitments going forward, anticipation of 25% market growth rates in the intermediate term, New Relic's intent to improve operating margins and target to exit fiscal 2023 with modest non-GAAP profitability, data ingest trends in the intermediate term, New Relic’s competitive advantage obtained by its new data-centric approach, New Relic’s unique positioning to help developers and engineers communicate about relevant data sets, expectation that near term investments will improve internal execution efficiency, New Relic's efforts to drive breadth and depth of adoption across our customer base. These forward-looking statements are based on New Relic’s current assumptions, expectations and beliefs and are subject to substantial risks, uncertainties, assumptions and changes in circumstances that may cause New Relic’s actual results, performance or achievements to differ materially from those expressed or implied in any forward-looking statement.

The risks and uncertainties referred to above include, but are not limited to, New Relic’s ability to determine optimal prices for its products and the potential challenges presented by New Relic’s evolving pricing models; the effect of the COVID-19 pandemic on New Relic’s business and on global economies and financial markets generally; New Relic’s ability to generate sufficient revenue to achieve and sustain profitability, particularly in light of its significant ongoing expenses; New Relic’s short operating history in an evolving industry; New Relic’s ability to manage its significant recent growth; the dependence of New Relic’s business on its customers remaining on its platform and increasing their spend with New Relic; New Relic’s ability to develop enhancements to its products, increase adoption and usage of its products and introduce new products that achieve market acceptance; the dependence on customers expanding their use of New Relic’s products beyond the current predominant use cases; New Relic’s ability to expand its marketing and sales capabilities and increase sales of its solutions; privacy concerns, including changes in privacy laws and regulations, which could result in additional cost and liability to New Relic or inhibit sales; New Relic’s ability to effectively compete in intensely competitive markets and respond effectively to rapidly changing technology, evolving industry standards and changing customer needs, requirements or preferences; fluctuation of New Relic’s quarterly results; New Relic’s dependence on lead generation strategies to drive sales and revenue; interruptions or performance problems associated with New Relic’s technology and infrastructure; New Relic’s dependence on SaaS technologies and related services from third parties; defects or disruptions in New Relic’s products; estimates or judgments relating to New Relic’s critical accounting policies; the expense and complexity of New Relic’s ongoing and planned investments in cloud hosting providers and expenditures on transitioning its services and customers from its data center hosting facilities to public cloud providers; risks associated with international operations; New Relic’s ability to protect its intellectual property rights; risks related to the acquisition and integration of businesses or technologies; risks related to sales to government entities and highly regulated organizations; certain risks associated with incurring indebtedness, including risks related to servicing New Relic’s convertible senior notes and related capped call transactions; and other “Risk Factors” set forth in New Relic’s most recent filings with the Securities and Exchange Commission (the “SEC”).

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

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

Non-GAAP Financial Measures

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

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

New Relic defines non-GAAP loss from operations, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses (sales and marketing, research and development, general and administrative), non-GAAP operating margin, non-GAAP net loss attributable to New Relic, non-GAAP net loss attributable to New Relic per diluted share and non-GAAP net loss attributable to New Relic per basic share as the respective GAAP balances, adjusted for, as applicable: (1) stock-based compensation expense, (2) amortization of stock-based compensation capitalized in software development costs, (3) the amortization of purchased intangibles, (4) employer payroll tax expense on equity incentive plans, (5) amortization of debt discount and issuance costs, (6) the transaction costs related to acquisitions, (7) lawsuit litigation cost and other expense, (8) gain or loss from lease modification, (9) adjustment to redeemable non-controlling interest, and (10) restructuring charges. Non-GAAP net loss per basic and diluted share is calculated as non-GAAP net loss attributable to New Relic divided by weighted-average shares used to compute net loss attributable to New Relic per share, basic and diluted, with the number of weighted-average shares decreased to reflect the anti-dilutive impact of the capped call transactions entered into in connection with the 0.50% Convertible Senior Notes due 2023 issued in May 2018. New Relic defines free cash flow as GAAP cash from operations, minus capital expenditures and minus capitalized software. Investors are encouraged to review the reconciliation of these historical non-GAAP financial measures to their most directly comparable GAAP financial measures.

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

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

Amortization of purchased intangibles. New Relic views amortization of purchased intangible assets as items arising from pre-acquisition activities determined at the time of an acquisition. While these intangible assets are evaluated for impairment regularly, amortization of the cost of purchased intangibles is an expense that is not typically affected by operations during any particular period.

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

Amortization of debt discount and issuance costs. In May 2018, New Relic issued $500.25 million of convertible senior notes due in 2023, which bear interest at an annual fixed rate of 0.50%. The effective interest rate of the convertible senior notes was approximately 5.74%. Effective April 1, 2021, New Relic adopted ASU No. 2020-06, Accounting for Convertible Instruments and Contract on an Entity’s Own Equity . As a result of the adoption, the debt conversion option and debt issuance costs previously attributable to the equity component are no longer presented in equity. Similarly, the debt discount, which was equal to the carrying value of the embedded conversion feature upon issuance, is no longer amortized into income as interest expense over the life of the instrument. The debt issuance costs are amortized as interest expense. The expense for the amortization of debt issuance costs is a non-cash item, and New Relic believes the exclusion of this interest expense will provide for a more useful comparison of our operational performance in different periods.

Transaction costs related to acquisitions. New Relic may from time to time incur direct transaction costs related to acquisitions. New Relic believes it is useful to exclude such charges because it does not consider such amounts to be part of the ongoing operation of New Relic’s business.

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

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

Adjustment to redeemable non-controlling interest. New Relic adjusts the value of redeemable non-controlling interest in connection with its joint venture in New Relic K.K. New Relic believes it is useful to exclude the adjustment to redeemable non-controlling interest because it may not be indicative of future operating results and that investors benefit from an understanding of the company’s operating results without giving effect to this adjustment.

Restructuring charges. In April 2021, New Relic commenced a restructuring plan to realign its cost structure to better reflect significant product and business model innovation over the past 12 months. As a result of the restructuring plan, New Relic incurred charges of approximately $13.0 million for employee terminations and other costs associated with the restructuring plan. Most of these charges consisted of cash expenditures and stock-based compensation expense and were recognized in the first quarter of fiscal 2022. New Relic believes it is appropriate to exclude the restructuring charges because it is not indicative of its future operating results.

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

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

Operating Metrics

Active Customer Accounts. New Relic defines an Active Customer Account at the end of any period as an individual account, as identified by a unique account identifier, aggregated at the parent hierarchy level, for which New Relic has recognized any revenue in the fiscal quarter. The number of Active Customer Accounts that is reported as of a particular date is rounded down to the nearest hundred.

Number of Active Customer Accounts with Revenue Greater than $100,000. As a measure of New Relic’s ability to scale with its customers and attract large enterprises to its platform, New Relic counts the number of Active Customer Accounts for which it has recognized greater than $100,000 in revenue in the trailing 12 months.

Percentage of Revenue from Active Customer Accounts Greater than $100,000 . New Relic also looks at its percentage of overall revenue it receives from its Active Customer Accounts with revenue greater than $100,000 in any given quarter as an indicator of its relative performance when selling to New Relic’s large customer relationships or its smaller revenue accounts.

Net Revenue Retention Rate (“NRR”). NRR monitors the growth in use of New Relic’s platform by its existing active customer accounts and allows New Relic to measure the health of its business and future growth prospects. To calculate NRR, New Relic first identifies the cohort of Active Customer Accounts that were Active Customer Accounts in the same quarter of the prior fiscal year. Next, New Relic identifies the measurement period as the 12-month period ending with the period reported and the prior comparison period as the corresponding period in the prior year. NRR is the quotient obtained by dividing the revenue generated from a cohort of Active Customer Accounts in the measurement period by the revenue generated from that same cohort in the prior comparison period.

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

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

Condensed Consolidated Statements of Operations
 
Three Months Ended March 31, Twelve Months Ended March 31,
2022 2021 2022 2021
Revenue $ 205,752   $ 172,669   $ 785,521   $ 667,648  
Cost of revenue   63,960     57,125     256,279     181,564  
Gross profit   141,792     115,544     529,242     486,084  
Operating expenses:
Research and development   58,396     43,606     211,856     174,851  
Sales and marketing   100,424     94,796     394,027     361,702  
General and administrative   38,719     31,450     151,912     120,931  
Total operating expenses   197,539     169,852     757,795     657,484  
Loss from operations   (55,747 )   (54,308 )   (228,553 )   (171,400 )
Other income (expense):
Interest income   625     1,153     2,862     7,888  
Interest expense   (1,239 )   (6,352 )   (4,921 )   (24,901 )
Other expense   (523 )   (108 )   (1,170 )   (1,918 )
Loss before income taxes   (56,884 )   (59,615 )   (231,782 )   (190,331 )
Income tax provision (benefit)   (493 )   (717 )   323     559  
Net loss $ (56,391 ) $ (58,898 ) $ (232,105 ) $ (190,890 )
Net loss and adjustment attributable to redeemable non-controlling interest $ 878   $ (2,779 ) $ (18,297 ) $ (1,720 )
Net loss attributable to New Relic $ (55,513 ) $ (61,677 ) $ (250,402 ) $ (192,610 )
Net loss attributable to New Relic per share, basic and diluted $ (0.84 ) $ (0.98 ) $ (3.88 ) $ (3.15 )
Weighted-average shares used to compute net loss per share, basic and diluted   65,780     62,621     64,592     61,070  
 
Condensed Consolidated Balance Sheets
 
March 31, 2022 March 31, 2021
Assets
Current assets:
Cash and cash equivalents $ 268,695   $ 240,821  
Short-term investments   559,984     575,254  
Accounts receivable, net of allowance for doubtful accounts of $3,703 and $2,633 respectively   226,182     174,027  
Prepaid expenses and other current assets   29,447     21,944  
Deferred contract acquisition costs   24,058     36,210  
Total current assets   1,108,366     1,048,256  
Property and equipment, net   68,368     91,308  
Restricted cash   5,775     5,642  
Goodwill   163,677     144,253  
Intangible assets, net   15,636     12,986  
Deferred contract acquisition costs, non-current   10,463     32,579  
Lease right-of-use assets   50,465     57,425  
Other assets, non-current   4,916     6,170  
Total assets $ 1,427,666   $ 1,398,619  
Liabilities, redeemable non-controlling interest, and stockholders’ equity
Current liabilities:
Accounts payable $ 32,545   $ 24,171  
Accrued compensation and benefits   37,023     37,196  
Other current liabilities   36,098     19,174  
Deferred revenue   398,754     373,594  
Lease liabilities   11,103     7,886  
Total current liabilities   515,523     462,021  
Convertible senior notes, net   497,663     449,380  
Lease liabilities, non-current   49,809     59,924  
Deferred revenue, non-current   108     1,674  
Other liabilities, non-current   20,173     8,256  
Total liabilities   1,083,276     981,255  
Redeemable non-controlling interest   21,686     3,389  
Stockholders’ equity:
Common stock, $0.001 par value   66     64  
Treasury stock - at cost (260 shares)   (263 )   (263 )
Additional paid-in capital   1,114,221     1,001,309  
Accumulated other comprehensive loss   (8,012 )   (19 )
Accumulated deficit   (783,308 )   (587,116 )
Total stockholders’ equity   322,704     413,975  
Total liabilities, redeemable non-controlling interest and stockholders’ equity $ 1,427,666   $ 1,398,619  
 
Condensed Consolidated Statements of Cash Flows
 
Twelve Months Ended March 31,
2022 2021
Cash flows from operating activities:
Net loss attributable to New Relic: $ (250,402 ) $ (192,610 )
Net loss and adjustment attributable to redeemable non-controlling interest $ 18,297   $ 1,720  
Net loss: $ (232,105 ) $ (190,890 )
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization   86,065     89,312  
Amortization of debt discount and issuance costs   2,357     22,336  
Stock-based compensation expense   153,039     135,143  
Other   1,429     3,610  
Changes in operating assets and liabilities, net of acquisition of businesses:
Accounts receivable, net   (53,319 )   (27,084 )
Prepaid expenses and other assets   (5,796 )   (7,571 )
Deferred contract acquisition costs   (2,345 )   (46,953 )
Lease right-of-use assets   8,294     959  
Accounts payable   9,745     11,766  
Accrued compensation and benefits and other liabilities   19,564     18,778  
Lease liabilities   (6,898 )   1,519  
Deferred revenue   23,594     58,941  
Net cash provided by operating activities   3,624     69,866  
Cash flows from investing activities:
Purchases of property and equipment   (5,778 )   (18,737 )
Proceeds from sale of property and equipment   1,001     -  
Cash paid for acquisition, net of cash acquired   (7,192 )   (41,536 )
Purchases of short-term investments   (301,068 )   (405,054 )
Proceeds from sale and maturity of short-term investments   305,942     335,964  
Capitalized software development costs   (12,662 )   (13,494 )
Net cash used in investing activities   (19,757 )   (142,857 )
Cash flows from financing activities:
Proceeds from employee stock purchase plan
  12,272     14,425  
Proceeds from exercise of employee stock options   31,868     6,865  
Net cash provided by financing activities   44,140     21,290  
Net increase (decrease) in cash, cash equivalents and restricted cash   28,007     (51,701 )
Cash, cash equivalents and restricted cash at beginning of period   246,463     298,164  
Cash, cash equivalents and restricted cash at end of period $ 274,470   $ 246,463  
 
Reconciliation from GAAP to Non-GAAP Results
 
Three Months Ended March 31, Twelve Months Ended March 31,
2022 2021 2022 2021
Reconciliation of gross profit and gross margin:
GAAP gross profit $ 141,792   $ 115,544   $ 529,242   $ 486,084  
Plus: Stock-based compensation   1,285     1,343     5,042     5,939  
Plus: Amortization of purchased intangibles   2,291     1,676     7,649     5,505  
Plus: Amortization of stock-based compensation capitalized in software development costs   722     379     2,402     1,222  
Plus: Employer payroll tax on employee equity incentive plans   75     100     243     277  
Non-GAAP gross profit $ 146,165   $ 119,042   $ 544,578   $ 499,027  
GAAP gross margin   69 %   67 %   67 %   73 %
Non-GAAP adjustments   2 %   2 %   2 %   2 %
Non-GAAP gross margin   71 %   69 %   69 %   75 %
Reconciliation of operating expenses:
GAAP research and development $ 58,396   $ 43,606   $ 211,856   $ 174,851  
Less: Stock-based compensation expense   (12,127 )   (10,750 )   (48,355 )   (40,964 )
Less: Employer payroll tax on employee equity incentive plans   (571 )   (637 )   (1,432 )   (1,350 )
Non-GAAP research and development $ 45,698   $ 32,219   $ 162,069   $ 132,537  
GAAP sales and marketing $ 100,424   $ 94,796   $ 394,027   $ 361,702  
Less: Stock-based compensation expense   (11,367 )   (11,735 )   (48,986 )   (54,695 )
Less: Employer payroll tax on employee equity incentive plans   (374 )   (601 )   (944 )   (1,272 )
Less: Restructuring charges (1)   -     -     (10,925 )   -  
Non-GAAP sales and marketing $ 88,683   $ 82,460   $ 333,172   $ 305,735  
GAAP general and administrative $ 38,719   $ 31,450   $ 151,912   $ 120,931  
Less: Stock-based compensation expense   (10,711 )   (8,271 )   (50,656 )   (33,545 )
Less: Transaction costs related to acquisition   -     -     (361 )   (885 )
Less: Lawsuit litigation expense   69     -     10     (254 )
Less: Employer payroll tax on employee equity incentive plans   (339 )   (342 )   (1,292 )   (901 )
Less: Restructuring charges (1)   -     -     (1,194 )   -  
Non-GAAP general and administrative $ 27,738   $ 22,837   $ 98,419   $ 85,346  
Reconciliation of loss from operations and operating margin:
GAAP loss from operations $ (55,747 ) $ (54,308 ) $ (228,553 ) $ (171,400 )
Plus: Stock-based compensation expense   35,490     32,099     153,039     135,143  
Plus: Amortization of purchased intangibles   2,291     1,676     7,649     5,505  
Plus: Transaction costs related to acquisition   -     -     361     885  
Plus: Amortization of stock-based compensation capitalized in software development costs   722     379     2,402     1,222  
Plus: Lawsuit litigation expense   (69 )   -     (10 )   254  
Plus: Employer payroll tax on employee equity incentive plans   1,359     1,680     3,911     3,800  
Plus: Restructuring charges (1)   -     -     12,119     -  
Non-GAAP loss from operations $ (15,954 ) $ (18,474 ) $ (49,082 ) $ (24,591 )
GAAP operating margin   -27 %   -31 %   -29 %   -26 %
Non-GAAP adjustments   19 %   20 %   23 %   22 %
Non-GAAP operating margin   -8 %   -11 %   -6 %   -4 %
Reconciliation of net loss:
GAAP net loss attributable to New Relic $ (55,513 ) $ (61,677 ) $ (250,402 ) $ (192,610 )
Plus: Stock-based compensation expense   35,490     32,099     153,039     135,143  
Plus: Amortization of purchased intangibles   2,291     1,676     7,649     5,505  
Plus: Transaction costs related to acquisition   -     -     361     885  
Plus: Amortization of stock-based compensation capitalized in software development costs   722     379     2,402     1,222  
Plus: Lawsuit litigation expense   (69 )   -     (10 )   254  
Plus: Employer payroll tax on employee equity incentive plans   1,359     1,680     3,911     3,800  
Plus: Amortization of debt discount and issuance costs   591     5,704     2,357     22,336  
Plus: Adjustment to redeemable non-controlling interest   (871 )   3,141     18,579     3,141  
Plus: Restructuring charges (1)   -     -     12,119     -  
Non-GAAP net loss attributable to New Relic $ (16,000 ) $ (16,998 ) $ (49,995 ) $ (20,324 )
Non-GAAP net loss attributable to New Relic per share:
Basic $ (0.24 ) $ (0.27 ) $ (0.77 ) $ (0.33 )
Diluted $ (0.24 ) $ (0.27 ) $ (0.77 ) $ (0.33 )
Shares used in non-GAAP per share calculations:
Basic   65,780     62,621     64,592     61,070  
Diluted   65,780     62,621     64,592     61,070  
(1) Restructuring related charge for the stock-based compensation expense of $0.5 million is included on its respective line items.
Reconciliation of GAAP Cash Flows from Operating Activities to Free Cash Flow
 
Three Months Ended March 31, Twelve Months Ended March 31,
2022 2021 2022 2021
Net cash provided by operating activities $ 49,952   $ 28,481   $ 3,624   $ 69,866  
Capital expenditures   (2,601 )   (2,938 )   (5,778 )   (18,737 )
Capitalized software development costs   (3,256 )   (3,755 )   (12,662 )   (13,494 )
Free cash flows (Non-GAAP) $ 44,095   $ 21,788   $ (14,816 ) $ 37,635  
Net cash used in investing activities $ (36,642 ) $ (9,989 ) $ (19,757 ) $ (142,857 )
Net cash provided by financing activities $ 9,558   $ 11,164   $ 44,140   $ 21,290  

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220511006174/en/

SOURCE: New Relic Corporate Communications

Investor Contact
Peter Goldmacher
New Relic, Inc.
503-336-9280
IR@newrelic.com Media Contact
New Relic, Inc
PR@newrelic.com

COMTEX_407111639/2456/2022-05-12T16:05:36

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+1.68 +3.36%
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July 1, 2022 4:00p
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