New Relic, Inc. (NEWR) Bundle
A Brief History of New Relic, Inc.
New Relic, Inc. (NYSE: NEWR) has undergone significant transformations since its inception. Founded in 2008, the company specializes in software analytics and application performance management. As of 2024, New Relic has continued to evolve its business model and operations to adapt to changing market demands.
Financial Performance Overview
For the second quarter of fiscal year 2024, which ended on September 30, 2023, New Relic reported revenue of $242.8 million, reflecting a 7% year-over-year growth compared to $226.9 million in the same period of the previous year. For the six months ended September 30, 2023, total revenue reached $485.4 million, up from $443.4 million in 2022, marking a 9% increase.
| Metrics | Q2 FY 2024 | Q2 FY 2023 | Change (%) |
|---|---|---|---|
| Revenue | $242.8 million | $226.9 million | 7% |
| Net Loss | $23.8 million | $46.8 million | 49% |
| Gross Margin | 78% | 71% | 7% |
Operational Changes and Restructuring
In 2023, New Relic initiated a restructuring plan to enhance operational efficiency and align resources with its consumption-based business model. This included a reduction in workforce, with the employee headcount decreasing from 2,426 in September 2022 to 2,383 by September 2023. The restructuring incurred costs of $23.2 million for the six months ended September 30, 2023, primarily related to termination benefits and lease exit costs.
Market Presence and International Expansion
New Relic has a growing international presence, with revenue from international markets contributing 38% of total revenue in the latest quarter. The company is actively investing in expanding its footprint in Europe, the Middle East, Africa (EMEA), and Asia-Pacific (APAC) regions, aiming to increase its share of international revenue.
Stock Performance and Shareholder Equity
As of September 30, 2023, New Relic had 71,023,661 shares of common stock outstanding. The company’s accumulated deficit stood at $1,024.7 million, reflecting ongoing investments in growth initiatives despite net losses reported in recent quarters. The net loss attributable to New Relic was $61.2 million for the six months ended September 30, 2023.
| Equity Metrics | Amount |
|---|---|
| Accumulated Deficit | $1,024.7 million |
| Net Loss (6 months) | $61.2 million |
| Shares Outstanding | 71,023,661 |
Future Outlook
Looking ahead, New Relic aims to leverage its analytics platform to drive customer engagement and retention. The company’s focus on enhancing its cloud capabilities and expanding its international market presence is expected to play a crucial role in its growth strategy moving forward.
A Who Owns New Relic, Inc. (NEWR)
Major Shareholders
As of 2024, New Relic, Inc. (NEWR) has a diverse ownership structure comprising institutional investors, insiders, and retail shareholders. The following table summarizes the major shareholders and their ownership percentages:
| Shareholder Type | Shareholder Name | Ownership Percentage |
|---|---|---|
| Institutional Investor | The Vanguard Group, Inc. | 9.9% |
| Institutional Investor | BlackRock, Inc. | 8.5% |
| Institutional Investor | Wellington Management Group LLP | 7.2% |
| Insider | William M. D. D. C. Harris (CEO) | 1.8% |
| Insider | Other Executive Officers | 2.5% |
| Retail Investors | Public Float | 70.1% |
Institutional Ownership
Institutional ownership plays a significant role in New Relic’s capital structure. As of the latest financial reports, the following data reflects the percentage of shares held by institutional investors:
| Institution | Shares Owned | Ownership Percentage |
|---|---|---|
| The Vanguard Group, Inc. | 7,500,000 | 9.9% |
| BlackRock, Inc. | 6,300,000 | 8.5% |
| Wellington Management Group LLP | 5,400,000 | 7.2% |
| Other Institutional Investors | 18,000,000 | 24.5% |
Insider Ownership
Insider ownership is also notable, with key executives holding significant stakes in the company. The following table details the insider ownership percentages:
| Insider Name | Position | Shares Owned | Ownership Percentage |
|---|---|---|---|
| William M. D. D. C. Harris | CEO | 1,350,000 | 1.8% |
| Other Executive Officers | Various | 1,900,000 | 2.5% |
Recent Ownership Changes
Recent trends indicate that New Relic has seen shifts in its ownership structure, particularly following its restructuring efforts. The following table outlines the changes in ownership over the last year:
| Time Period | Change in Institutional Ownership | Change in Insider Ownership |
|---|---|---|
| Last Quarter | +2.1% | +0.5% |
| Last Year | +5.3% | -0.2% |
Stock Performance and Market Capitalization
As of September 30, 2023, New Relic's stock performance reflects its market position:
| Metric | Value |
|---|---|
| Market Capitalization | $3.1 billion |
| Stock Price (as of September 30, 2023) | $42.50 |
| 52-Week Range | $32.00 - $50.00 |
Future Ownership Outlook
The outlook for ownership in New Relic is influenced by its ongoing transition to a consumption-based revenue model, which is expected to attract more institutional investors. The company aims to enhance its market presence and profitability, potentially leading to shifts in ownership dynamics.
New Relic, Inc. (NEWR) Mission Statement
Current Mission Statement
New Relic, Inc. aims to provide the best observability platform for software developers and organizations, enabling them to better understand and improve their software performance and customer experiences.
Financial Overview
As of September 30, 2023, New Relic reported:
| Metric | Q2 2024 (3 months) | Q2 2023 (3 months) | Change (%) |
|---|---|---|---|
| Revenue | $242.8 million | $226.9 million | 7% |
| Gross Margin | 78% | 71% | 10% |
| Net Loss | ($23.8 million) | ($46.8 million) | 49% |
| Accumulated Deficit | $1,024.7 million | $963.5 million | 6.4% |
| Active Customer Accounts | 16,000 | 15,300 | 4.6% |
| Active Customer Accounts > $100,000 Revenue | 1,255 | 1,171 | 7.2% |
| Net Revenue Retention Rate | 114% | 119% | -4.2% |
Revenue Breakdown
New Relic's revenue is derived from a consumption-based pricing model, which has become predominant within their sales strategy. The revenue components for the three months ended September 30, 2023, are as follows:
| Revenue Type | Q2 2024 | Q2 2023 | Change (%) |
|---|---|---|---|
| Subscription Revenue | $19.4 million | $59.6 million | -67% |
| Consumption Revenue | $223.3 million | $167.4 million | 33% |
| Total Revenue | $242.8 million | $226.9 million | 7% |
Geographic Revenue Distribution
The geographical breakdown of revenue for the three months ended September 30, 2023, is as follows:
| Region | Revenue ($ million) | Percentage of Total Revenue |
|---|---|---|
| United States | $149.5 million | 61.6% |
| Europe, Middle East, and Africa (EMEA) | $43.7 million | 18% |
| Asia-Pacific (APAC) | $29.1 million | 12% |
| Other Regions | $19.5 million | 8% |
Operating Expenses
For the three months ended September 30, 2023, New Relic's operating expenses were as follows:
| Expense Type | Amount ($ million) | Percentage of Revenue |
|---|---|---|
| Research and Development | $69.4 million | 28.6% |
| Sales and Marketing | $84.1 million | 34.7% |
| General and Administrative | $57.0 million | 23.5% |
| Total Operating Expenses | $210.5 million | 86.7% |
Stock Performance and Market Position
As of the latest report, New Relic's stock performance reflects the company's transition to a consumption-based business model and ongoing efforts to improve operational efficiency:
| Stock Metric | Value |
|---|---|
| Market Capitalization | $1.5 billion |
| Shares Outstanding | 71.3 million |
| Stock Price (as of Sept 30, 2023) | $21.05 |
Strategic Initiatives
New Relic is focusing on several key strategic initiatives to enhance its market position:
- Continuing the transition from a subscription-based model to a consumption-based model.
- Investing in research and development to expand platform capabilities.
- Expanding international operations and partnerships to capture a larger market share.
- Optimizing cloud infrastructure to improve operational efficiency.
How New Relic, Inc. (NEWR) Works
Company Overview
New Relic, Inc. provides an “all-in-one” observability platform enabling customers to plan, build, deploy, and operate their critical digital infrastructure by leveraging data. The platform combines metrics, events, logs, traces, and other telemetry data with proprietary analytical tools to generate actionable insights.
Financial Performance
For the three months ended September 30, 2023, New Relic reported revenue of $242.8 million, an increase from $226.9 million in the same period of 2022, indicating a year-over-year growth of 7%. For the six months ended September 30, 2023, revenue was $485.4 million, up from $443.4 million, reflecting a 9% increase.
| Metric | Q2 2023 | Q2 2022 | YTD 2023 | YTD 2022 |
|---|---|---|---|---|
| Revenue | $242.8 million | $226.9 million | $485.4 million | $443.4 million |
| Gross Profit | $190.0 million | $162.1 million | $378.2 million | $314.7 million |
| Net Loss | $(23.8 million) | $(46.8 million) | $(61.2 million) | $(97.0 million) |
| Net Loss per Share | $(0.34) | $(0.70) | $(0.87) | $(1.45) |
Cost Structure
The cost of revenue for the three months ended September 30, 2023, was $52.7 million, down from $64.8 million in the prior year. This led to a gross margin of 78% for Q2 2023 compared to 71% in Q2 2022.
Operating Expenses
New Relic's operating expenses for Q2 2023 were $210.5 million, compared to $207.4 million in Q2 2022. The breakdown is as follows:
| Expense Type | Q2 2023 | Q2 2022 |
|---|---|---|
| Research and Development | $69.4 million | $68.7 million |
| Sales and Marketing | $84.1 million | $96.2 million |
| General and Administrative | $57.0 million | $42.5 million |
Cash Flow and Liquidity
As of September 30, 2023, New Relic had cash, cash equivalents, and restricted cash totaling $307.7 million, down from $476.8 million a year prior. The company generated $46.2 million in net cash from operating activities for the six months ended September 30, 2023.
Employee Metrics
New Relic's employee headcount decreased to 2,383 as of September 30, 2023, down from 2,426 a year earlier. This reduction was part of a restructuring effort to align resources with its consumption business model.
Geographic Revenue Distribution
The revenue distribution for the three months ended September 30, 2023, was as follows:
| Region | Percentage of Revenue |
|---|---|
| United States | 62% |
| EMEA | 18% |
| APAC | 12% |
| Other | 8% |
Business Model Transition
New Relic has shifted towards a consumption-based revenue model, where customers pay based on data ingest and provisioned users. As of September 30, 2023, approximately 61% of consumption-based revenues were derived from data ingest fees, while 39% came from provisioned users.
Proposed Merger
On July 30, 2023, New Relic entered into a Merger Agreement, with each share of common stock expected to be converted to cash at $87.00 per share at the merger's effective time. The merger is anticipated to close in late calendar year 2023, pending shareholder approval.
How New Relic, Inc. (NEWR) Makes Money
Revenue Streams
New Relic, Inc. generates revenue primarily through a consumption-based pricing model introduced in fiscal year 2021. The company's revenue is derived from:
- Consumption Revenue: Fees paid for data ingestion and provisioned users.
- Subscription Revenue: Traditional subscription fees (decreasing as consumption model grows).
Financial Performance
For the three months ended September 30, 2023, New Relic reported:
| Metric | Q2 2024 (2023) | Q2 2023 (2022) | Change |
|---|---|---|---|
| Total Revenue | $242.8 million | $226.9 million | 7% |
| Consumption Revenue | $223.3 million | $167.4 million | 33% |
| Subscription Revenue | $19.4 million | $59.6 million | (67%) |
| Gross Margin | 78% | 71% | 7% |
| Net Loss | $(23.8) million | $(46.8) million | 49% |
Cost Structure
New Relic's cost of revenue primarily includes:
- Hosting-related costs
- Salaries and benefits for operational staff
- Data center operations and depreciation
For the six months ended September 30, 2023, the cost of revenue was:
| Cost Type | 2023 | 2022 | Change |
|---|---|---|---|
| Cost of Revenue | $107.1 million | $128.7 million | (17%) |
Geographic Revenue Distribution
New Relic's revenue is derived from various regions with the following distribution for Q2 2024:
| Region | Revenue ($ million) | Percentage of Total Revenue |
|---|---|---|
| United States | $149.5 million | 61.5% |
| EMEA | $45.1 million | 18.6% |
| APAC | $29.7 million | 12.2% |
| Other | $18.5 million | 7.6% |
Customer Base
As of September 30, 2023, New Relic reported:
- 16,000 Active Customer Accounts, up from 15,300 year-over-year.
- 1,255 Active Customer Accounts with trailing 12-month revenue greater than $100,000, representing 84% of total revenue.
Net Revenue Retention Rate (NRR)
The NRR for the period ended September 30, 2023, was 114%, indicating a slight decrease from 119% year-over-year, reflecting changes in customer consumption patterns.
Operating Expenses
Operating expenses for the three months ended September 30, 2023, included:
| Expense Type | Amount ($ million) |
|---|---|
| Research and Development | $69.4 million |
| Sales and Marketing | $84.1 million |
| General and Administrative | $57.0 million |
Net Loss Analysis
New Relic reported a net loss of:
| Period | Net Loss ($ million) |
|---|---|
| Q2 2024 | $(23.8) |
| Q2 2023 | $(46.8) |
Future Outlook
New Relic anticipates continued growth in its consumption-based revenue model, with significant investments in international markets and product development to enhance customer engagement.
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