Billion Dollar Unicorns: New Relic’s Enterprise Focus Pays Off

Software application management tools vendor New Relic (NYSE: NEWR) recently announced a strong fourth quarter. Apart from beating analyst estimates, the Billion Dollar Unicorn reported the second straight quarter of non-GAAP profit.

New Relic’s Financials

New Relic’s fourth quarter revenues grew 34% to $98.4 million, ahead of the market’s forecast of $96.2 million. GAAP loss from operations was $(7.5) million or $(0.13) per share, compared to $(15.1) million or $(0.28) per share a year ago. Non-GAAP income was $4.8 million or $0.09 per share compared to analyst estimate of $0.05 per share.

Cash, cash equivalents, and short-term investments were $247.9 million at the end of the fourth quarter of fiscal 2018, compared with $233 million at the end of the third quarter of fiscal 2018.

Paid Business Accounts as of March 31, 2018, were over 17,000. $100K+ Paid Business Accounts increased to 703 from 517 a year ago.

For fiscal 2018, New Relic reported revenues of $355.1 million, up 35%. GAAP loss from operations was $(46.8) million for fiscal 2018, compared with $(61.3) million for fiscal 2017.

For the first quarter, New Relic expects revenue between $104.5 million and $106.5 million, representing y-o-y growth of between 30% and 32%. Non-GAAP income from operations is expected between $5.5 million or $0.10 per share and $6.5 million or $0.12 per share. The Street was looking for revenues of $103 million and EPS of $0.05.

New Relic forecast Full Year Fiscal 2019 revenue between $452 and $458 million, representing y-o-y growth of between 27% and 29%. Non-GAAP income is expected between $15 million or $0.29 per share and $20 million or $0.37 per share. The Street was looking for revenues of $457.5 million and EPS of $0.36.

New Relic’s Enterprise Focus

Over the past few years, New Relic has increased its focus on the enterprise segment. To cater to the segment, New Relic has announced new product capabilities, customer enablement, and best practice guidance for organizations leveraging Amazon Web Services. New Relic’s platform integrates real-time metrics from all the components of the application with application and customer experience data to help organizations understand how the configuration and deployment of AWS services impacts the rest of their technology stack.

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Financial Zonked Talk 4 weeks ago Member's comment

Impressive!