New Relic Experiences Growing Pains

New Relic (NYSE: NEWR), a software-as-a-service (SaaS) company that focuses on application-performance management, reported its fiscal first-quarter 2020 results on Tuesday. On the surface, the headline numbers continue to look great. Revenue grew 30%, to $141 million, while adjusted earnings per share (EPS) expanded 26%, to $0.19. Both of these figures exceeded the high end of management's guidance range.

However, the company's dollar-based net expansion rate (DBNE), which measures existing customer spending from period to period, dropped to just 109%. That represents a significant slowdown from the 131% that was reported last quarter.Deferred revenue dropped 6% sequentially, which suggests that customer demand wasn't as robust as investors are used to seeing.

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