New Relic, Inc. (NYSE: NEWR) operates an innovative platform for engineers to utilize the data-approach to building, sharing and utilizing great software. Shares of the software engineering technology company are rallying 20% through early trading on Wednesday, February 8, 2023. Over the past three months, New Relic has seen average daily volume of 506,970 shares. However, volume of 2.15 million shares or dollar volume of around $164.48 million, has already exchanged hands through early trading.
Shares of New Relic are gaining after the company released financial results for its fiscal third quarter of 2023. The company reported total revenue of $239.8 million, up 18% year-over-year. Gross margins improved 8.2 percentage points to 74.4%, non-GAAP gross margins improved 9.4 percentage points to 77.6%.
New Relic reported an operating loss of $29.1 million, but this was an improvement from a loss of $51.9 million last year. New Relic reported a fully diluted net loss per share of $0.38, which was an improvement from a loss of $0.96 last year. Cash, equivalents and short-term investments totaled $800.2 million for the fiscal third quarter.
During the fiscal third quarter, New Relic completed several business highlights that helped drive improved results. The company says its product-led growth engine added an additional 800 net new paid customers during the quarter. New Relic expanded its services into DevSecOps, launched its Azure Native service to allow Microsoft Azure customers to easily install supported New Relic apps into the cloud service, and expanded its platform breadth.
For the fiscal fourth quarter of 2023 for the period ending March 31, 2023, management has issued the following guidance:
- Revenue: $240 million and $242 million (16.6% to 17.6% year-over-year growth projected)
- Non-GAAP operating income: $12 million and $14 million
- Non-GAAP net income per diluted share: $0.20 and $0.23
New Relic management raised its guidance for the fiscal year 2023 ending on March 31, 2023 as well:
- Revenue: $923.1 million and $925.1 million (17.5% to 17.8% y/y growth)
- Non-GAAP operating income: $20.4 million and $22.4 million
- Non-GAAP net income per diluted share: $0.40 and $0.43
“We executed the quarter with relentless focus on our customers, product innovation and operations, and beat the high end of our guidance for revenue and profitability,” said New Relic CEO Bill Staples. “We are well positioned for continued growth with our all-in-one observability platform and consumption business model. We are attracting new customers at a rapid pace and growing with our existing customer base as they expand their observability practices and continue with their digital transformation and cloud adoption. Profitability is turning into a strength for New Relic as we continue to accelerate our focus on profitable growth.”
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