What To Expect From New Relic’s (NEWR) Q1 Earnings

Kayode Omotosho /
2022/08/03 4:18 am EDT

Application performance management software company New Relic (NYSE:NEWR) will be announcing earnings results tomorrow after market close. Here's what to expect.

Last quarter New Relic reported revenues of $205.7 million, up 19.1% year on year, in line with analyst expectations. It was a mixed quarter for the company, with a significant improvement in gross margin but decelerating growth in large customers. The company added 35 enterprise customers paying more than $100,000 annually to a total of 1,099.

Is New Relic buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting New Relic's revenue to grow 18% year on year to $213.1 million, improving on the 11% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.36 per share.

New Relic Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 2.66%.

Looking at New Relic's peers in the software development segment, only F5 Networks has so far reported results, delivering top-line growth of 3.52% year on year, and beating analyst estimates by 0.99%. The stock traded up 10.8% on the results. Read our full analysis of F5 Networks's earnings results here.

Investors in the software segment have had steady hands going into the earnings, with the stocks down on average 0.79% over the last month. New Relic is up 14.9% during the same time, and is heading into the earnings with with analyst price target of $65.8, compared to share price of $61.04.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.