Software analytics company New Relic, Inc. (NYSE: NEWR) today announced financial results for the fourth quarter and fiscal year ended March 31, 2015.
“Our fourth quarter results capped off an incredible year of growth and innovation for New Relic. We successfully drove new business across organizations of all sizes – especially in the enterprise, and added three entirely new products to our cloud-based New Relic Software Analytics Platform,” said Lew Cirne, CEO and founder, New Relic. "As we enter FY16, we are focused on continuing to empower companies of all sizes to deliver great software that drives their business through world-class customer experiences."
Fourth Quarter 2015 Financial Highlights:
● Revenue of $33.4 million, up 68% compared with the fourth quarter of fiscal 2014 and 15% from the third quarter of fiscal 2015.
● GAAP loss from operations was $14.7 million for the fourth quarter of fiscal 2015, compared with GAAP loss from operations of $9.5 million for the fourth quarter of fiscal 2014. Non-GAAP loss from operations was $10.2 million for the fourth quarter of fiscal 2015, compared with non-GAAP loss from operations of $6.5 million for the fourth quarter of fiscal 2014.
● GAAP net loss per share was $0.32 for the fourth quarter of fiscal 2015 based on 47.0 million weighted-average shares outstanding, compared with GAAP net loss per share of $0.62 for the fourth quarter of fiscal 2014 based on 15.7 million weighted-average shares outstanding. Non-GAAP net loss per share was $0.22 for the fourth quarter of fiscal 2015 based on 47.0 million non-GAAP weighted-average shares outstanding, compared with non-GAAP net loss per share of $0.18 for the fourth quarter of fiscal 2014 based on 37.1 million non-GAAP weighted-average shares outstanding.
● Cash, cash equivalents and short-term investments were $200.8 million at the end of the fourth quarter of fiscal 2015, compared with $204.8 million at the end of the third quarter of fiscal 2015.
Fiscal Year 2015 Financial Highlights:
● Revenue of $110.4 million, up 75% compared with fiscal year 2014.
● GAAP loss from operations was $49.9 million for fiscal year 2015, compared with GAAP loss from operations of $39.4 million for fiscal year 2014. Non-GAAP loss from operations was $36.2 million for fiscal year 2015, compared with non-GAAP loss from operations of $28.0 million for fiscal year 2014.
● GAAP net loss per share was $1.98 for fiscal year 2015 based on 25.3 million weighted-average shares outstanding, compared with GAAP net loss per share of $2.58 for fiscal year 2014 based on 15.6 million weighted-average shares outstanding. Non-GAAP net loss per share was $0.85 for fiscal year 2015 based on 42.7 million non-GAAP weighted-average shares outstanding, compared with non-GAAP net loss per share of $0.78 for fiscal year 2014 based on 37.0 million non-GAAP weighted-average shares outstanding.
● Paid Business Accounts as of March 31, 2015 of 11,910.
● Dollar-Based Net Expansion Rate for the quarter ended March 31, 2015 of 130%.
● New customers in the quarter included: Aramark, Bauer Digital, Carfax, CitySprint (UK), Eastern Bank, Energy Saving Trust, Jet.com, Ladbrokes Digital Australia, NGA Human Resources, NRK A/S, Panasonic Europe, Property Solutions International, REI, TrustPilot, STATS LLC, Webroot and Weight Watchers International.
● Expanded customer relationships in the quarter included: Airbnb, Atlassian, Centers for Medicare and Medicaid Services, Delivery Hero Holding GmbH, Docker, Flight Centre, GE Capital, GrubHub, Kochava, National Geographic Society, TangoME, Sanoma Oyj, Trek Bicycle Corporation, Veracode, Vungle, Wellcentive, WeWork Companies and Wizz Air Hungary.
Fourth Quarter & Recent Business Highlights:
● Expanded Insights offering with the addition of key new features: Data Apps and Browser Instrumentation.
● Announced that Insights will extend its capabilities to provide real-time insights about mobile application data for customers.
● Launched New Relic Non-Profit Program, which offers qualifying 501(c)(3) non-profit organizations up to five hosts of New Relic APM Pro for free, with significant discounts on additional APM hosts and other New Relic products.
● Welcomed John Gray to the company as SVP of Business Development to lead partner strategy, building out the company’s global ecosystem of alliances and channel partners.
New Relic is initiating its outlook for its first quarter of fiscal 2016, as well as the full fiscal year 2016.
● First Quarter Fiscal 2016 Outlook:
o Revenue between $34.5 million and $35.5 million, representing year-over-year growth of between 53% and 57%.
o Non-GAAP loss from operations of between $11.0 million and $12.0 million.
o Non-GAAP net loss per share of between $0.23 and $0.26. This assumes 47.3 million non-GAAP weighted average common shares outstanding.
● Full Year Fiscal 2016 Outlook:
o Revenue between $155.0 million and $159.0 million, representing year-over-year growth of between 40% and 44%.
o Non-GAAP loss from operations of between $46.0 million and $50.0 million.
o Non-GAAP net loss per share of between $0.95 and $1.03. This assumes 49.0 million non-GAAP weighted average common shares outstanding.
Conference Call Details:
● What: New Relic financial results for the fourth quarter and full fiscal year 2015 and outlook for the first quarter of fiscal 2016 and the full year of fiscal 2016
● When: May 12, 2015 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 (877) 201-0168, and for international callers, please dial (647) 788-4901. Callers may provide confirmation number 20799417 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 PM Eastern Time on May 19, 2015, a telephone replay will be available by dialing (855) 859-2056 from the United States or (404) 537-3406 internationally with conference ID 20799417.
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 expected financial results for the first quarter of fiscal year 2016 and for the full fiscal year 2016, market trends and opportunity, customer adoption and momentum of New Relic’s products, competitive advantages, New Relic’s ability to execute and empower thousands of businesses in their move to the cloud. 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 rapid recent growth; fluctuation of New Relic’s quarterly results; 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; New Relic’s ability to persuade New Relic’s customers to expand their use of New Relic’s products to additional 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, which could result in additional cost and liability to New Relic or inhibit sales; changes in privacy laws, regulations and standards; 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; 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; 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; 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 is included in the filings we make 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 that certain Quarterly Report on Form 10-Q for the quarter ended December 31, 2014. 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.
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 release and the earnings call referencing this press release: non-GAAP loss from operations, non-GAAP net loss, non-GAAP gross profit, non-GAAP sales and marketing, non-GAAP research and development, non-GAAP general and administrative and non-GAAP weighted average shares outstanding. New Relic uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating its ongoing operational performance. New Relic believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends.
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. Investors are encouraged to review the reconciliation of these historical non-GAAP financial measures to their most directly comparable GAAP financial measures.
New Relic defines non-GAAP gross profit, non-GAAP sales and marketing, non-GAAP research and development, non-GAAP general and administrative, non-GAAP loss from operations and non-GAAP net loss as the respective GAAP balances, adjusted for: (1) stock-based compensation, (2) amortization of stock-based compensation capitalized in software development costs, (3) the amortization of purchased intangibles, (4) lawsuit litigation and (5) the transaction costs related to acquisition. Non-GAAP net loss per share is calculated as non-GAAP net loss divided by the non-GAAP weighted average shares outstanding that are adjusted to assume the conversion of outstanding preferred shares to common shares as of the beginning of the period.
With respect to New Relic’s outlook under "Outlook" above, New Relic has not reconciled its expectations as to non-GAAP loss from operations to GAAP loss from operations or non-GAAP net loss per share to GAAP net loss per share because certain items such as stock-based compensation and lawsuit litigation expenses are out of New Relic’s control or cannot be reasonably predicted. Accordingly, reconciliation is not available without unreasonable effort.
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.