Delaware | 001-36766 | 26-2017431 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Emerging growth company | ☐ |
(d) | Exhibits |
Exhibit Number | Description | |
Press release, dated November 7, 2017, issued by New Relic, Inc. |
New Relic, Inc. | |||
Date: | November 7, 2017 | By: | /s/ Mark Sachleben |
Mark Sachleben | |||
Chief Financial Officer |
• | Revenue of $84.7 million, growing 33% year-over-year, and up 6% sequentially from the first quarter of fiscal 2018. |
• | GAAP loss from operations was $(14.8) million for the second quarter of fiscal 2018, compared to $(14.3) million for the second quarter of fiscal 2017. Non-GAAP loss from operations was $(3.5) million for the second quarter of fiscal 2018, compared to $(4.9) million for the second quarter of fiscal 2017. |
• | GAAP net loss per share was $(0.27) for the second quarter of fiscal 2018 based on 54.7 million weighted-average shares outstanding, compared to $(0.28) for the second quarter of fiscal 2017 based on 51.3 million weighted-average shares outstanding. Non-GAAP net loss per share was $(0.06) for the second quarter of fiscal 2018, compared to $(0.09) for the second quarter of fiscal 2017. |
• | Cash, cash equivalents and short-term investments were $227.5 million at the end of the second quarter of fiscal 2018, compared with $227.3 million at the end of the first quarter of fiscal 2018. |
• | Paid Business Accounts as of September 30, 2017 of approximately 15,900. |
• | 51% of ARR from Enterprise Paid Business Accounts. |
• | Dollar-Based Net Expansion Rate for the second quarter of fiscal 2018 of 123%. |
• | New or expanded customers in the second quarter of fiscal 2018 included: 21st Century Fox, Absa Bank, Ancestry, Carnival Corporation, Dominion Enterprises, Dunkin Brands Group, East Carolina University, Expedia, Farm Credit Services of America, John Hancock Financial, Kurt Geiger Limited, MercadoLibre, Morningstar, MuleSoft, Nationwide Mutual Insurance Company, Norwegian Cruise Lines, Pearson, Procore Technologies, Red Hat Inc., Reed Elsevier, Scripps Network, Testo SE & Co. KGaA. |
• | Held two-day, flagship FutureStack [http://www.futurestack.com/newyork/apex/newrelicnewyorkindex] user event in New York, on September 13-14, and introduced the New Relic Platform Associate Certification, with a special Application Performance Monitoring (APM) certification course. |
• | Announced expanded library of integrations [http://ir.newrelic.com/press-releases/Press-Release-Details/2017/New-Relic-Announces-New-Infrastructure-Integrations-to-Help-Customers-Monitor-Workloads-On-Premise-or-in-the-Cloud/] with leading infrastructure components to Apache, Cassandra, MySQL, NGINX Plus, RabbitMQ, Redis, and StatsD through an updated release of the New Relic Infrastructure SDK. |
• | Introduced new and expanded support for Microsoft Azure and Amazon Web Services [http://ir.newrelic.com/press-releases/Press-Release-Details/2017/New-Relic-Announces-New-Capabilities-to-Help-Customers-Understand-their-Complex-Distributed-Architectures/] (AWS) technologies for New Relic APM and New Relic Infrastructure, providing DevOps teams the ability to correlate, analyze, and alert on application and infrastructure performance from a single source. |
• | Announced the New Relic Navigators Partner Program [http://ir.newrelic.com/press-releases/Press-Release-Details/2017/New-Relic-Builds-Partnerships-to-Accelerate-Cloud-Migration-and-Digital-Transformation-Projects/] to |
• | Launched New Relic Radar, NRQL Baseline Alerting, and New Relic APM Error Profiles, powered by New Relic Applied Intelligence (NRAI) [http://ir.newrelic.com/press-releases/Press-Release-Details/2017/New-Relics-Applied-Intelligence-Helps-Enterprises-Discover-and-Resolve-Critical-Operations-Issues-Faster/] to help customers use monitoring data to uncover and resolve problems faster. |
• | Showcased plans to offer enhanced Distributed Tracing [http://ir.newrelic.com/press-releases/Press-Release-Details/2017/New-Relic-Announces-New-Capabilities-to-Help-Customers-Understand-their-Complex-Distributed-Architectures/] – a new way to provide end-to-end visibility into how code performs across the customer experience with distributed, multi-tier application architectures. |
• | Third Quarter Fiscal 2018 Outlook: |
• | Revenue between $88.3 million and $89.8 million, representing year-over-year growth of between 30% and 32%, respectively. |
• | Non-GAAP loss from operations of between $(4.0) million and $(5.0) million. |
• | Non-GAAP net loss per share of between $(0.07) and $(0.09). This assumes 55.3 million weighted average common shares outstanding. |
• | Updated Full Year Fiscal 2018 Outlook: |
• | Revenue between $346.5 million and $349.5 million, representing year-over-year growth of between 31% and 33%, and an increase from prior guidance of between $344.0 million and $348.0 million that was issued on August 3, 2017. |
• | Non-GAAP loss from operations of between $(13.0) million and $(14.0) million, an improvement from prior guidance of between $(14.0) million and $(17.0) million that was issued on August 3, 2017. |
• | Non-GAAP net loss per share of between $(0.21) and $(0.22), an improvement from prior guidance of between $(0.23) and $(0.28) that was issued on August 3, 2017. This assumes 55.4 million weighted average common shares outstanding. |
• | What: New Relic financial results for the second quarter fiscal 2018 and outlook for the third quarter and the full year of fiscal 2018 |
• | When: November 7, 2017 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 (833) 241-7256, and for international callers, please dial (647) 689-4220. Callers may provide confirmation number 92748961 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 November 11, 2017, a telephone replay will be available by dialing (800) 585-8367 from the United States or (416) 621-4642 internationally with conference ID 92748961. |
Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenue | $ | 84,685 | $ | 63,440 | $ | 164,783 | $ | 122,047 | |||||||
Cost of revenue | 15,694 | 11,778 | 30,671 | 23,433 | |||||||||||
Gross profit | 68,991 | 51,662 | 134,112 | 98,614 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development | 18,266 | 14,741 | 36,532 | 30,710 | |||||||||||
Sales and marketing | 51,261 | 40,382 | 100,622 | 79,168 | |||||||||||
General and administrative | 14,305 | 10,833 | 28,247 | 21,069 | |||||||||||
Total operating expenses | 83,832 | 65,956 | 165,401 | 130,947 | |||||||||||
Loss from operations | (14,841 | ) | (14,294 | ) | (31,289 | ) | (32,333 | ) | |||||||
Other income (expense): | |||||||||||||||
Interest income | 512 | 250 | 969 | 471 | |||||||||||
Interest expense | (21 | ) | (21 | ) | (43 | ) | (42 | ) | |||||||
Other income (expense), net | (152 | ) | (126 | ) | 162 | (237 | ) | ||||||||
Loss before income taxes | (14,502 | ) | (14,191 | ) | (30,201 | ) | (32,141 | ) | |||||||
Income tax provision (benefit) | 189 | (61 | ) | 424 | 60 | ||||||||||
Net loss | $ | (14,691 | ) | $ | (14,130 | ) | $ | (30,625 | ) | $ | (32,201 | ) | |||
Net loss per share, basic and diluted | $ | (0.27 | ) | $ | (0.28 | ) | $ | (0.57 | ) | $ | (0.63 | ) | |||
Weighted-average shares used to compute net loss per share, basic and diluted | 54,699 | 51,328 | 54,201 | 50,779 |
September 30, 2017 | March 31, 2017 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 110,716 | $ | 88,305 | |||
Short-term investments | 116,743 | 118,101 | |||||
Accounts receivable, net of allowance for doubtful accounts of $1,004 and $1,117, respectively | 39,510 | 62,032 | |||||
Prepaid expenses and other current assets | 10,857 | 8,169 | |||||
Total current assets | 277,826 | 276,607 | |||||
Property and equipment, net | 53,528 | 50,728 | |||||
Restricted cash | 8,024 | 8,115 | |||||
Goodwill | 11,828 | 11,828 | |||||
Intangible assets, net | 1,705 | 2,499 | |||||
Other assets | 5,531 | 2,492 | |||||
Total assets | $ | 358,442 | $ | 352,269 | |||
Liabilities and stockholders’ equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 4,830 | $ | 6,522 | |||
Accrued compensation and benefits | 17,131 | 15,935 | |||||
Other current liabilities | 8,510 | 7,607 | |||||
Deferred revenue | 122,373 | 125,269 | |||||
Total current liabilities | 152,844 | 155,333 | |||||
Deferred rent, non-current | 7,685 | 8,272 | |||||
Deferred revenue, non-current | 578 | 1,135 | |||||
Other liabilities, non-current | 721 | 685 | |||||
Total liabilities | 161,828 | 165,425 | |||||
Stockholders’ equity: | |||||||
Common stock, $0.001 par value | 55 | 53 | |||||
Treasury stock - at cost (260 shares) | (263 | ) | (263 | ) | |||
Additional paid-in capital | 487,705 | 447,314 | |||||
Accumulated other comprehensive loss | (94 | ) | (96 | ) | |||
Accumulated deficit | (290,789 | ) | (260,164 | ) | |||
Total stockholders’ equity | 196,614 | 186,844 | |||||
Total liabilities and stockholders’ equity | $ | 358,442 | $ | 352,269 |
Six Months Ended September 30, | |||||||
2017 | 2016 | ||||||
Cash flows from operating activities: | |||||||
Net loss: | $ | (30,625 | ) | $ | (32,201 | ) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
Depreciation and amortization | 11,553 | 8,533 | |||||
Stock-based compensation expense | 19,845 | 15,601 | |||||
Other | 384 | 508 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 22,522 | 5,492 | |||||
Prepaid expenses and other assets | (5,450 | ) | (2,758 | ) | |||
Accounts payable | (530 | ) | 757 | ||||
Accrued compensation and benefits and other liabilities | 2,786 | (743 | ) | ||||
Deferred revenue | (3,453 | ) | 5,654 | ||||
Deferred rent | (431 | ) | 2,994 | ||||
Net cash provided by operating activities | 16,601 | 3,837 | |||||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | (14,394 | ) | (8,490 | ) | |||
Decrease in restricted cash | 91 | — | |||||
Purchases of short-term investments | (55,126 | ) | (65,404 | ) | |||
Proceeds from sale and maturity of short-term investments | 56,432 | 87,415 | |||||
Capitalized software development costs | (1,486 | ) | (1,733 | ) | |||
Net cash provided by (used in) investing activities | (14,483 | ) | 11,788 | ||||
Cash flows from financing activities: | |||||||
Proceeds from employee stock purchase plan | 3,029 | 2,504 | |||||
Proceeds from exercise of employee stock options | 17,264 | 9,902 | |||||
Net cash provided by financing activities | 20,293 | 12,406 | |||||
Net increase in cash and cash equivalents | 22,411 | 28,031 | |||||
Cash and cash equivalents, beginning of period | 88,305 | 65,914 | |||||
Cash and cash equivalents, end of period | $ | 110,716 | $ | 93,945 |
Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Reconciliation of gross profit and gross margin: | |||||||||||||||
GAAP gross profit | $ | 68,991 | $ | 51,662 | $ | 134,112 | $ | 98,614 | |||||||
Plus: Stock-based compensation | 603 | 513 | 1,129 | 894 | |||||||||||
Plus: Amortization of purchased intangibles | 397 | 200 | 794 | 400 | |||||||||||
Plus: Amortization of stock-based compensation capitalized in software development costs | 238 | 169 | 474 | 334 | |||||||||||
Plus: Employer payroll tax on employee equity incentive plans | 39 | 30 | 85 | 52 | |||||||||||
Non-GAAP gross profit | $ | 70,268 | $ | 52,574 | $ | 136,594 | $ | 100,294 | |||||||
GAAP gross margin | 81 | % | 81 | % | 81 | % | 81 | % | |||||||
Non-GAAP adjustments | 2 | % | 2 | % | 2 | % | 1 | % | |||||||
Non-GAAP gross margin | 83 | % | 83 | % | 83 | % | 82 | % | |||||||
Reconciliation of operating expenses: | |||||||||||||||
GAAP research and development | $ | 18,266 | $ | 14,741 | $ | 36,532 | $ | 30,710 | |||||||
Less: Stock-based compensation | (3,305 | ) | (2,522 | ) | (6,141 | ) | (5,063 | ) | |||||||
Less: Employer payroll tax on employee equity incentive plans | (169 | ) | (88 | ) | (431 | ) | (216 | ) | |||||||
Non-GAAP research and development | $ | 14,792 | $ | 12,131 | $ | 29,960 | $ | 25,431 | |||||||
GAAP sales and marketing | $ | 51,261 | $ | 40,382 | $ | 100,622 | $ | 79,168 | |||||||
Less: Stock-based compensation | (3,875 | ) | (3,409 | ) | (8,181 | ) | (6,171 | ) | |||||||
Less: Amortization of purchased intangibles | — | (14 | ) | — | (25 | ) | |||||||||
Less: Employer payroll tax on employee equity incentive plans | (218 | ) | (148 | ) | (594 | ) | (277 | ) | |||||||
Non-GAAP sales and marketing | $ | 47,168 | $ | 36,811 | $ | 91,847 | $ | 72,695 | |||||||
GAAP general and administrative | $ | 14,305 | $ | 10,833 | $ | 28,247 | $ | 21,069 | |||||||
Less: Stock-based compensation | (2,439 | ) | (1,819 | ) | (4,394 | ) | (3,473 | ) | |||||||
Less: Lawsuit litigation | — | (2 | ) | — | (4 | ) | |||||||||
Less: Amortization of purchased intangibles | — | (41 | ) | — | (75 | ) | |||||||||
Less: Employer payroll tax on employee equity incentive plans | (65 | ) | (395 | ) | (138 | ) | (605 | ) | |||||||
Non-GAAP general and administrative | $ | 11,801 | $ | 8,576 | $ | 23,715 | $ | 16,912 | |||||||
Reconciliation of loss from operations and operating margin: | |||||||||||||||
GAAP loss from operations | $ | (14,841 | ) | $ | (14,294 | ) | $ | (31,289 | ) | $ | (32,333 | ) | |||
Plus: Stock-based compensation | 10,222 | 8,263 | 19,845 | 15,601 | |||||||||||
Plus: Lawsuit litigation | — | 2 | — | 4 | |||||||||||
Plus: Amortization of purchased intangibles | 397 | 255 | 794 | 500 | |||||||||||
Plus: Amortization of stock-based compensation capitalized in software development costs | 238 | 169 | 474 | 334 | |||||||||||
Plus: Employer payroll tax on employee equity incentive plans | 491 | 661 | 1,248 | 1,150 | |||||||||||
Non-GAAP loss from operations | $ | (3,493 | ) | $ | (4,944 | ) | $ | (8,928 | ) | $ | (14,744 | ) | |||
GAAP operating margin | (18 | %) | (23 | %) | (19 | %) | (26 | %) | |||||||
Non-GAAP adjustments | 14 | % | 15 | % | 14 | % | 14 | % | |||||||
Non-GAAP operating margin | (4 | %) | (8 | %) | (5 | %) | (12 | %) | |||||||
Reconciliation of net loss: | |||||||||||||||
GAAP net loss | $ | (14,691 | ) | $ | (14,130 | ) | $ | (30,625 | ) | $ | (32,201 | ) | |||
Plus: Stock-based compensation | 10,222 | 8,263 | 19,845 | 15,601 | |||||||||||
Plus: Lawsuit litigation | — | 2 | — | 4 | |||||||||||
Plus: Amortization of purchased intangibles | 397 | 255 | 794 | 500 | |||||||||||
Plus: Amortization of stock-based compensation capitalized in software development costs | 238 | 169 | 474 | 334 | |||||||||||
Plus: Employer payroll tax on employee equity incentive plans | 491 | 661 | 1,248 | 1,150 | |||||||||||
Non-GAAP net loss | $ | (3,343 | ) | $ | (4,780 | ) | $ | (8,264 | ) | $ | (14,612 | ) | |||
Reconciliation of net loss per share, basic and diluted: | |||||||||||||||
GAAP net loss per share, basic and diluted | $ | (0.27 | ) | $ | (0.28 | ) | $ | (0.57 | ) | $ | (0.63 | ) | |||
Non-GAAP adjustments to net loss | 0.21 | 0.19 | 0.42 | 0.34 | |||||||||||
Non-GAAP net loss per share, basic and diluted | $ | (0.06 | ) | $ | (0.09 | ) | $ | (0.15 | ) | $ | (0.29 | ) |
Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net cash provided by (used in) operating activities | $ | (1,080 | ) | $ | 431 | $ | 16,601 | $ | 3,837 | ||||||
Capital expenditures | (6,980 | ) | (6,963 | ) | (14,394 | ) | (8,490 | ) | |||||||
Capitalized software development costs | (754 | ) | (1,021 | ) | (1,486 | ) | (1,733 | ) | |||||||
Free cash flows (Non-GAAP) | $ | (8,814 | ) | $ | (7,553 | ) | $ | 721 | $ | (6,386 | ) | ||||
Net cash provided by (used in) investing activities | $ | (2,423 | ) | $ | 3,128 | $ | (14,483 | ) | $ | 11,788 | |||||
Net cash provided by financing activities | $ | 8,921 | $ | 8,731 | $ | 20,293 | $ | 12,406 |