Why New Relic Inc (NYSE: NEWR) stock is under pressure

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New Relic Inc (NYSE: NEWR) stock lost over 5.1% on May 15th, 2019 (As of 1:06 pm GMT-4; Source: Google finance). And total paid business accounts declined modestly and ended the year at more than 16,900, which is down slightly from over 17,000 a year ago. The lower total is primarily due to our emphasis on the upmarket opportunities with greater expansion potential and to a lesser extent due to account consolidation within the enterprise business.

On the other hand, the company had exceeded the guidance ranges with revenue of $132.1 million and non-GAAP operating income of $3.8 million. NEWR has ended Q4 with 858 paid business accounts with ARR over $100,000, up 22% to a year ago. This growth represents both new logos landed as well as install base expansions derived from increased usage, expanded application coverage, and the cross-sell of additional products. The annualized dollar-based net expansion rate in Q4 was 131%, compared with 141% from the year ago period. At the end of Q4, enterprise business was approximately 61% of ARR, up from around 54% as of the same period last year. Non-APM bookings during the quarter were approximately 40% of new ARR with contributions from New Relic Insights of over 10% and New Relic Infrastructure slightly below 10%.

Moreover, Enterprise paid business accounts surpassed 2,300, up from more than 2,100 a year ago. Average ARR from enterprise paid business accounts was greater than $140,000, up from more than $100,000. The number of accounts paying at least $1 million per year increased to 72, up from 41 a year ago. The percent of ARR from non-APM increased to 34%, up from 28%. The install base invoicing duration increased to nine months, up from 8.1.

NEWR in the fourth quarter of FY 19 has reported the adjusted earnings per share of 13 cents. The company had reported the adjusted revenue growth of 34 percent to $132.10 million in the fourth quarter of FY 19

Additionally, U.S. revenue was $90.2 million for the quarter, up 34% year-over-year, while non-US revenue for the quarter grew to $41.9 million, up 34% year-over-year. For Q4, our non-GAAP gross margin was 85%. The cash from operations was $48.6 million and free cash flow, was $33.7 million.

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