Hi friends, since I know some of you will be interested in this, I thought I’d post it here as well…
New Relic Q1 2019
Brief Summary
The quarter looks pretty good overall. Revenue up 35%, a slight acceleration from last quarter’s growth of 34%. The biggest eye-catcher was the operating leverage on the non-GAAP operating margin. From -7% a year ago to 8% this year. Operating expenses only grew 16% so a lot of that revenue growth dropped to the bottom line.
Fourth Quarter Fiscal 2018 Financial Highlights:
Revenue: $98.4 million, growing 34% year-over-year, and up 7% sequentially from the third quarter of fiscal 2018.
Operating Loss: GAAP loss from operations was $(7.5) million for the fourth quarter of fiscal 2018, compared to $(15.1) million for the fourth quarter of fiscal 2017.
Non-GAAP income from operations was $4.8 million for the fourth quarter of fiscal 2018, compared to a loss of $(5.8) million for the fourth quarter of fiscal 2017.
Cash: Cash, cash equivalents and short-term investments were $247.9 million at the end of the fourth quarter of fiscal 2018, compared with $233.0 million at the end of the third quarter of fiscal 2018.
Customer Highlights
$100K+ Paid Business Accounts as of March 31, 2018 of 703, compared to 517 as of March 31, 2017.
Paid Business Accounts as of March 31, 2018 of over 17,000, compared to over 15,200 as of March 31, 2017.
54% of ARR from Enterprise Paid Business Accounts as of March 31, 2018, compared to 46% as of March 31, 2017.
Dollar-Based Net Expansion Rate for the fourth quarter of fiscal 2018 of 141%, compared to 133% as of the fourth quarter of fiscal 2017.
First Quarter Fiscal 2019 Financial Highlights:
Revenue: Grew 35% year-over-year and 10% sequentially to $108.2 million, compared to $80.1 million for the first quarter of fiscal 2018.
Operating Loss: GAAP loss from operations was $(3.6) million for the first quarter of fiscal 2019, compared to $(16.4) million for the first quarter of fiscal 2018.
Non-GAAP income from operations was $8.7 million for the first quarter of fiscal 2019, compared to a loss of $(5.4) million for the first quarter of fiscal 2018.
Cash: Cash, cash equivalents and short-term investments were $720.9 million at the end of the first quarter of fiscal 2019, compared with $247.9 million at the end of the fourth quarter of fiscal 2018.
Customer Highlights
$100K+ Paid Business Accounts as of June 30, 2018 of 748, compared to 555 as of June 30, 2017.
55% of ARR from Enterprise Paid Business Accounts as of June 30, 2018, compared to 49% as of June 30, 2017.
Dollar-Based Net Expansion Rate for the first quarter of fiscal 2019 of 118%, compared to 113% as of the first quarter of fiscal 2018.
Second Quarter Fiscal 2019 Outlook:
Revenue between $110.5 million and $112.5 million, representing year-over-year growth of between 30% and 33%, respectively.
Non-GAAP income from operations of between $4.5 million and $5.5 million.
My Thoughts
I like this earnings report a lot. Revenue accelerating, huge operating leverage. 16% growth in operating expenses is awfully low. What’s more, historically, the first quarter is the biggest spending quarter so it looks like it could get even better in the next couple quarters.
It is kind of surprising that sales and marketing expenses as a % of revenue only grew 17% as the company is going upstream with bigger enterprises.
Another thing is cash flow. On a non-GAAP basis, free cash flow grew over 300%. No that is not a typo. For some reason, the company didn’t put that figure out in the open on the press release. A lot of that is from accounts receivable, not stock based compensation also. Which is good in my opinion.
All in all, I was very surprised by the strength of operating leverage New Relic dispayed.
Very best,
CMFish: NEWR Ticker Guide