Press Release: New Relic Announces Third Quarter Fiscal Year 2021 Results

· 02/04/2021 16:05

-- What: New Relic financial results for the third quarter of fiscal year 2021 and outlook for the fourth quarter of fiscal 2021. -- When: February 4, 2021 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 (844) 757-5730, and for international callers, please dial (412) 542-4120. Callers may provide confirmation number 10151250 to access the call more quickly, and are encouraged to dial into the call at least 15 minutes prior to the start to prevent any delay in joining. -- Webcast: http://ir.newrelic.com (live and replay) -- Investor Letter: Available at http://ir.newrelic.com -- Replay: Following the completion of the call through 11:59 PM Eastern Time on February 11, 2021, a telephone replay will be available by dialing (877) 344-7529 from the United States or (412) 317-0088 internationally with conference ID 10151250.-- Fourth Quarter Fiscal 2021 Outlook: -- Revenue between $166 million and $167 million, representing year-over-year growth of approximately 4%. -- Non-GAAP loss from operations between $(29.0) million and $(31.0) million. -- Non-GAAP net loss attributable to New Relic per diluted share between $(0.45) and $(0.49). -- ARR of approximately $669 million, flat sequentially, and representing year-over-year growth of approximately 4%, compared to $642 million as of March 31, 2020.-- Acquired Pixie Labs, a Next Generation Machine Intelligence Observability Solution for Developers Using Kubernetes. -- Promoted Bill Staples to President. -- Expanded Global Strategic Collaboration Agreement with AWS to Help Companies Accelerate Their Cloud Adoption Journey. -- Rated highest in 2020 Gartner Peer Insights "Voice of the Customer": Application Performance Monitoring Suites.Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 --------------- 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 --------------- ------- ------- ------- ------- ------- ------- ------- Annual Recurring Revenue, or ARR (in millions) $569 $591 $608 $642 $648 $649 $669 --------------- ------- ------- ------- ------- ------- ------- ------- Dollar-Based Net Expansion Rate 109% 112% 109% 116% 100% 98% 108% --------------- ------- ------- ------- ------- ------- ------- ------- Percentage of ARR from Paid Business Accounts > $100,000 70% 71% 72% 75% 76% 77% 79% --------------- ------- ------- ------- ------- ------- ------- ------- Paid Business Accounts > $100,000 881 908 927 995 1,025 1,039 1,051 --------------- ------- ------- ------- ------- ------- ------- --------- Revenue of $166 million, compared to $153 million for the third quarter of fiscal 2020. -- GAAP gross margin of 72% and non-GAAP gross margin of 74%. -- GAAP loss from operations was $(48.0) million, compared to $(24.2) million for the third quarter of fiscal 2020. -- Non-GAAP income (loss) from operations was $(8.4) million, compared to $3.0 million for the third quarter of fiscal 2020. -- GAAP net loss attributable to New Relic per basic share was $(0.88), compared to a loss of $(0.46) per basic share for the third quarter of fiscal 2020. -- Non-GAAP net income (loss) attributable to New Relic per diluted share was $(0.14), compared to $0.09 per diluted share for the third quarter of fiscal 2020. -- Cash used in operating activities was $(6.7) million and free cash flow was $(12.7) million for the third quarter of fiscal 2021. -- Cash, cash equivalents and short-term investments were $785 million at the end of the third quarter of fiscal 2021, compared with $840 million at the end of the second quarter of fiscal 2021. -- Remaining performance obligations were $648 million at the end of the third quarter of fiscal 2021, compared with $602 million at the end of the second quarter of fiscal 2021. This represents the aggregate unrecognized transaction price of remaining performance obligations as of each of December 31, 2020 and September 30, 2020.SAN FRANCISCO--(BUSINESS WIRE)--February 04, 2021--

New Relic Announces Third Quarter Fiscal Year 2021 Results

Third quarter revenue increased 9% year-over-year to $166 million

Quarterly GAAP operating loss of $(48.0) million; Non-GAAP operating loss of $(8.4) million

New Relic, Inc. (NYSE: NEWR), a leader in observability, today announced financial results for the third quarter of fiscal year 2021.

"Our financial results for the third quarter reflect the positive early reception we're seeing from our customers to the changes we've made across our go-to-market and platform strategies," said Lew Cirne, CEO and founder, New Relic. "We are successfully migrating the majority of our larger customers onto the new model and engagement is increasing as evidenced by steady growth in data ingest, two positive signs of momentum from our customers."

Third Quarter Fiscal Year 2021 Financial Highlights:

Key Operating Metrics*:

* In the fourth quarter of fiscal 2020, we adjusted the way we define ARR to include partner revenue and revenue from support subscriptions. This change results in immaterial differences in the presentation of some numbers in the chart above compared to our disclosures in historical filings. Please refer to our Annual Report on Form 10-K for the fiscal year ended March 31, 2020 for our definition of ARR and the differences between these disclosures.

Recent Business Highlights:

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:

About New Relic

The world's best engineering teams rely on New Relic to visualize, analyze and troubleshoot their software. New Relic One is the most powerful cloud-based observability platform built to help companies create more perfect software. Learn why developers trust New Relic for improved uptime and performance, greater scale and efficiency, and accelerated time to market 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 fourth quarter of fiscal 2021, such as revenue, non-GAAP loss from operations, non-GAAP net loss attributable to New Relic per diluted share, ARR, market opportunities, the value proposition behind the reimagined New Relic One platform, the ongoing success of our entitlements program and overall growth in data ingest, our continued rollout of product enhancements and layering of new functionalities into existing products, expectations of continued refinement of New Relic's product and sales execution, expectations that the recent acquisition of Pixie Labs will accelerate Kubernetes adoption and allow New Relic to be a primary beneficiary of incremental growth in that space, expectations that the reimagined New Relic One platform and move to a consumption pricing model will accelerate demand and change the way customers purchase and consume software, help New Relic step up in growth, shift New Relic's existing business metrics to other metrics better suited to tracking the consumption model, and increase New Relic's presence and standing in the observability market, and any expected financial impacts and increase in customer usage, adoption and aggregate spend as a result of these changes. 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

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February 04, 2021 16:05 ET (21:05 GMT)