New Relic Announces Fourth Quarter and Full Fiscal Year 2022 Results

Rhea-AI Summary

New Relic, Inc. (NYSE: NEWR) reported a 19% increase in fourth quarter revenue, reaching $206 million, and an 18% rise in fiscal 2022 revenue to $786 million. Despite this growth, the company faced a GAAP operating loss of $(56) million for Q4, totaling $(229) million for the year. The non-GAAP losses were $(16) million in Q4 and $(49) million for fiscal 2022. Cash flow from operations stood at $50 million, with cash reserves of $829 million. The outlook for Q1 FY2023 predicts revenue between $212 million and $214 million, while full-year guidance anticipates revenue between $920 million and $930 million.

Positive

• Fourth quarter revenue increased 19% to $206 million.
• Fiscal 2022 revenue rose 18% to $786 million, surpassing guidance of $710 million.
• Cash provided by operating activities was $50 million.
• End of Q4 cash, cash equivalents, and short-term investments totaled $829 million.
• Remaining performance obligations reached $706 million, up from $610 million.

Negative

• Fourth quarter GAAP operating loss was $(56) million, worsening from $(54) million year-over-year.
• Fiscal 2022 GAAP operating loss increased to $(229) million from $(171) million in fiscal 2021.
• Non-GAAP losses of $(16) million in Q4 and $(49) million for the fiscal year reflect ongoing operational challenges.

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. (NYSE: NEWR), 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:

• Named a Leader in the 2022 GigaOm Radar for Cloud Observability Solutions.
• Launched API Monitoring with Postman.
• Launched Service Level Management.
• Launched new Kubernetes experience to help developers build more performant applications.

Outlook:

• First Quarter Fiscal 2023 Outlook:
  • Revenue between $212 million and $214 million, representing year-over-year growth of between 18% and 19%, respectively.
  • Non-GAAP loss from operations of between $(23) million and $(25) million.
  • Non-GAAP net loss attributable to New Relic per diluted share between $(0.35) and $(0.38).
• Full Year Fiscal 2023 Outlook:
  • Revenue between $920 million and $930 million, representing year-over-year growth of between 17% and 18%, respectively.
  • Non-GAAP loss from operations of between $(20) million and $(25) million.
  • Non-GAAP net loss attributable to New Relic per diluted share between $(0.31) and $(0.37).

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 (In thousands, except per share data; unaudited)
	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 (In thousands, except par value; unaudited)
	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 (In thousands; unaudited)
	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 (In thousands, except per share data; unaudited)
	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 (In thousands; unaudited)
	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

 

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Investor Contact

Peter Goldmacher

New Relic, Inc.

503-336-9280

IR@newrelic.com

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New Relic, Inc

PR@newrelic.com

Source: New Relic Corporate Communications

FAQ

What were New Relic's revenue figures for the fourth quarter of fiscal 2022?

New Relic reported fourth quarter revenue of $206 million, a 19% increase year-over-year.

What is the outlook for New Relic's revenue in the first quarter of fiscal 2023?

New Relic expects revenue between $212 million and $214 million for the first quarter of fiscal 2023.

What were the operating losses for New Relic in fiscal 2022?

New Relic reported a GAAP operating loss of $(229) million for fiscal 2022, compared to $(171) million in the previous year.

How much cash did New Relic have at the end of Q4 fiscal 2022?

At the end of the fourth quarter of fiscal 2022, New Relic had cash, cash equivalents, and short-term investments totaling $829 million.

What were the non-GAAP net losses per diluted share for New Relic in Q4 fiscal 2022?

The non-GAAP net loss per diluted share for New Relic in Q4 fiscal 2022 was $(0.24).