Investor relations (4 q18) (1)

©2008–18 New Relic, Inc. All rights reserved.
Investor Presentation
4Q18
May 8, 2018

©2008–18 New Relic, Inc. All rights reserved
Forward-Looking Statements and Non-GAAP Financial
Measures
2
This presentation contains “forward-looking” statements, as that term is defined under the federal securities laws. Any statement that refers to expectations,
projections or other characterizations of future events, including financial projections and future market conditions, is a forward-looking statement. Statements
included in this presentation that are forward-looking statements include but are not limited to statements regarding market trends and opportunity, our future
financial performance, such as our outlook on financial results for the first quarter of fiscal year 2019 and for the full fiscal year 2019, and the expected impact of
Accounting Standards Codification (ASC) 606 on those financial results, such as revenue, non-GAAP operating income, non-GAAP earnings per share, deferred
revenue, operating cash flow, free cash flow, gross margin, capital expenditures, and expenses as a percentage of revenue. These forward-looking statements
are based on our assumptions, expectations and beliefs as of the date of this presentation and are subject to substantial risks, uncertainties, assumptions, and
changes in circumstances that may cause our actual results, performance, or achievements to differ materially from those expressed or implied in any
forward-looking statement. We assume no obligation and do not intend to update these forward-looking statements, except as required by law. For more
information about factors that may cause actual results to differ materially from forward-looking statements, please refer to our May 8, 2018 press release, as
well as the risks described in our filings with the Securities and Exchange Commission (“SEC”), including our most recent Form 10-Q filed with the SEC,
particularly in the section titled Risk Factors.
This presentation also contains certain non-GAAP financial measures as defined by SEC rules. These non-GAAP financial measures are in addition to, and not a
substitute for or superior to, measures of financial performance prepared in accordance with GAAP. There are a number of limitations related to the use of these
non-GAAP financial measures versus their nearest GAAP equivalents. For example, other companies may calculate non-GAAP financial measures differently or
may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison.
Please refer to our May 8, 2018 press release for additional information as to why we believe these non-GAAP financial measures are useful to investors and
others in assessing our operating performance. As required by Regulation G, we have provided a reconciliation of those measures to their most directly
comparable GAAP measures, which is available in the appendix to this presentation. However, we have not reconciled our expectations as to non-GAAP
operating loss and income, non-GAAP earnings per share, gross margin, operating margin, non-GAAP expenses as a percentage of revenue, or free cash flow in
future periods to their most directly comparable GAAP measure because certain items, namely stock-based compensation, lawsuit litigation expenses and
employer payroll taxes on equity incentive plans, are out of our control or cannot be reasonably predicted. Accordingly, reconciliation is not available without
unreasonable effort, although it is important to note that these factors could be material to our results computed in accordance with GAAP.

New Relic, Inc. (NEWR)
3
New Relic provides the real-time insights that software-driven businesses need to
innovate faster. New Relic’s cloud platform is designed to make every aspect of
modern software and infrastructure observable, so companies can find and fix
problems faster, build high-performing DevOps teams, and speed up software
projects.
Multi-tenant
native cloud
Recurring revenue,
SaaS model with
best-in-class
gross margins
Gartner Magic
Quadrant Leader
2012 to present
Multi-billion dollar
market opportunity

Modern Software is Changing Businesses
4
Technology
New technology and
dynamic infrastructure
Cloud
Multi-cloud
Serverless computing
Processes
New processes and
faster velocity
Containerization
Continuous integration
Continuous deployment
DevOps
Business Models
New business models
and revenue streams
IoT
Omnichannel
Mobile first
Digital transformation

Dynamics Impacting Broad Range of Industries
5
>75%
of customer interactions with
Capital One are digital
10Mstreaming sessions per day
60%
of US sales from digital channels in 2017

Trends Driving Major Market Opportunities
6
Technology
$125B
Global 2017 Cloud Spend 1
Processes
85%
Multi-Cloud Deployment 2
Business Models
$1.3T
Global IT spending on Digital
Transformations 3
Mission critical to all industries
1
IDC, Worldwide Semiannual Public Cloud Services Spending Guide, Dec 2017
2
IDC, Predominance of Multicloud Environments Among Cloud Users, IDC #US42830417, June 2017. Respondents identifying multi-cloud as their current or near-term cloud deployment option. n=6,084
worldwide respondents, weighted by country, company size and industry
3
IDC, Welcome to the 3rd Platform's Second Chapter, IDC #DR2018_GS1_FG, Feb 2018

Key Performance Indicators
7
If it’s not measured, it’s not managed
Service
Reliability
DevOps
Transformation
Accelerate Cloud
Adoption
Customer
Experience
Modern Software

Software Environments are Complex
8
Visibility not included

Software Businesses Require Real-Time Insights
9
Business
Outcomes
Application and
Infrastructure
Performance
Customer
Experience
How are customers engaging?
What is the page load time to
initial experience?
Am I open for business?
Is the application working?
How is my business doing?
What changes influence business
success?

The New Relic Platform
10
End-to-end visibility to continuously observe, adapt, align ...
KPIs
Web and Mobile Concurrent Users
QoS – Process Abandons
Sessions by Geography or Product
# of Visitors, Views by Visitor Load Times
Trends (social, content, geography)
KPIs
Multi-Product Subscriptions
Feature Uptake
Conversion Rate
Revenue at Risk
Revenue per Streaming Video
Business Outcomes Customer Experience
KPIs
Transaction Times
Error Rates
Application Bottlenecks
On-Prem vs. Cloud
Application Performance
KPIs
Infrastructure Status and Changes
Server Downtime
Host Health
Database Performance
Cloud Spend
Infrastructure Performance

An Enterprise Platform @ Cloud Scale
11
All 6 paid SKUs are equipped with New Relic Applied Intelligence
1.8B Events & Metrics per Minute
✓ SSAE-16/SOC II New Relic Platform
✓ SSAE-16/SOC II Data Center
✓ CSA-STAR
Enterprise security
7 Programming Languages Cloud & On-Host Integrations
Pending

Designed to Win the Cloud
12
The future of enterprise workloads
Massive
Scalability
Easy to
Use
Quick Time
to Value
SaaS
Delivery
Full Stack
Visibility

Growth Drivers
13
Expand the platform:
new products, deeper
integrations, and
innovative features
and use cases
Add new enterprise
logos and extend
breadth within
existing ones
Increase non-APM
adoption to raise
annualized revenue
per average paid business
account
Further penetrate
international markets

Land and Expand … Standardize Business Model
14
“Land” application usage swells
Multiple applications
New digital /
software initiative
Enterprise: $50K - 100K+
Land
Expand
software applications
Expand
platform
Standardize
Enterprise: $100K - 500K+
All new software applications
On-premises displacement
Enterprise: $1M+
Customers adopt multiple
paid products
Deployment across all
cloud applications
Replacing point solutions
Enterprise: $500K - 1M+
1
2
1
2
3
1
2

Financial Highlights
15
34%
Year-Over-Year
4Q18 Revenue Growth
85%
Non-GAAP
4Q18 Gross Margin
5%
Non-GAAP
4Q18 Operating Margin
3%
Non-GAAP FY18 Free
Cash Flow Margin
4Q18
See appendix for reconciliation.
* Mid-point of FY19 guidance
*

Key Operating Metrics
16
4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18
Annualized
Dollar-Based Net
Expansion Rate
140% 118% 116% 125% 133% 113% 123% 125% 141%
% ARR from
Enterprise Paid
Business Accounts
42%* 43% 43% 44% 46% 49%* 51% 52% 54%
Paid Business
Accounts >$100K
367 398 427 478 517 555 586 629 703
Paid Business
Accounts
>13,500 >14,000 >14,500 >14,900 >15,200 >15,400 ~15,900 >16,600 >17,000
Annualized
Revenue / Avg. Paid
Business Account
>$15,500 >$17,000 >$17,500 >$18,000 >$19,000 >$20,500 >$21,500 >$22,500 >$23,000
* Period included changes to the categorization of existing paid business accounts to reflect that they had expanded beyond the 1,000 employee threshold. See appendix for definitions.
4Q18

Improving Operating Leverage
17
4Q18
See appendix for non-GAAP reconciliations.

Target Operating Model*
18
* Metrics are non-GAAP and calculated prior to adoption of ASC 606. See appendix for reconciliation.
** At $1B revenue run-rate for period ending March 31, 2022.
(% of Revenue) FY15 FY16 FY17 FY18 FY22** Driver
Long-Term
Target
Gross Margin 81% 81% 82% 84% 78–82%
Continued investments
in delivery, support
and services
78–82%
Sales & Marketing 76% 66% 59% 53% 40–42%
Increased mix of
productive reps,
renewals, installed base
35–38%
Research &
Development
20% 22% 19% 17% 17–19%
Maturation of
product portfolio
15–18%
General &
Administrative
18% 16% 14% 14% 10–12% Economies of scale 7–9%
Operating Margin (33%) (23%) (10%) - % 8–12% 20–25%
4Q18

First Quarter and Fiscal 2019 Outlook* (May 8, 2018)
19
Q1 FY19 Guidance
Revenue: $104.5M – $106.5M Operating income: $5.5M – $6.5M EPS: $0.10 – $0.12
Deferred revenue to sequentially decline mid-to-high single digits
FY19 Guidance
Revenue: $452.0M – $458.0M Operating income: $15.0M – $20.0M EPS: $0.29 – $0.37
Gross Margin ~83%
Operating cash flow: $70.0M – $80.0M; Free cash flow: $30.0M – $40.0M
Calculated billings of at least $525.0M
ASC 606 (adopted on April 1, 2018)
No material impact on revenue, operating cash flow, nor free cash flow
Expense benefit of ~$1.0M in Q1 and ~$10.0M for FY19
* Operating income, earnings per share, gross margin, and free cash flow presented on a non-GAAP adjusted basis; Q1 FY19 EPS assumes 59.3M weighted
average diluted shares outstanding; FY19 EPS assumes 60.2M weighted average common shares outstanding; See appendix for reconciliations and how we
define free cash flow. Calculated billings defined as revenue plus the change in quarterly deferred revenue.

Confidential ©2008–17 New Relic, Inc. All rights reserved
Key Business Highlights
20
Annual revenue:
$355.1M, up 35% YoY
Non-APM as a % of total ARR:
28%, up from 23% in FY17
4Q18: 60% YoY increase
in six-figure transactions
Number of enterprise paid
business accounts: >2,100,
up from >1,700 in FY17
Install base billing duration: 8.1
months, up from 7.2 in FY17
Number of million dollar ARR paid
business accounts: >40, up from
>20 in FY17
FY18

Investment Highlights
21
Best-in-class SaaS
gross margins help
drive significant
operating leverage
Large, underpenetrated,
expanding multi-billion
dollar opportunity
Technological
competitive advantage →
$200M+ invested in R&D
building massively
scalable 100% SaaS
multi-tenant platform
Strong combination of
revenue growth and
non-GAAP profitability

Appendix
22

Best-in-Class Gross Margin
23
GAAP Gross Margin vs. SaaS Peers
Peer Average = 68%
NEWR
Source: Company earnings releases filed with the SEC covering the most recent quarter reported as of May 3, 2018. Peers identified based on Wall Street Research comparable SaaS company groupings.

Non-GAAP to GAAP Reconciliation
24
4Q18

Definitions
25
Monthly and Annual Recurring Revenue (MRR and ARR)
Our monthly recurring revenue represents the revenue that we would contractually expect to receive from those customers over the following month, without any increase or
reduction in any of their subscriptions. Similarly, annual recurring revenue represents the revenue that New Relic would contractually expect to receive from those customers
over the following 12-month period, without any increase or reduction in any of their subscriptions.
Enterprise ARR is defined as ARR from paid business accounts with >1,000 employees.
Number of Paid Business Accounts
We define the number of paid business accounts at the end of any particular period as the number of accounts at the end of the period as identified by a unique account identifier
for which we have recognized revenue on the last day of the period indicated. A single organization or customer may have multiple paid business accounts for separate divisions,
segments, or subsidiaries. We define an enterprise paid business account as a paid business account that we measure to have over 1,000 employees.
>$100K and >$1M / year paid business accounts represents paid business accounts who have ARR greater than $100,000 or $1,000,000, respectively.
We define our annualized revenue per average paid business account as the annualized revenue for the current period divided by the average of the number of paid business
accounts at the end of the current period and the end of the prior period.
Dollar-Based Net Expansion Rate
Our dollar-based net expansion rate compares our recurring subscription revenue from customers from one period to the next. We measure our dollar-based net expansion
rate on a monthly basis because many of our customers change their subscriptions more frequently than quarterly or annually.
To calculate our annual dollar-based net expansion rate, we first establish the base period monthly recurring revenue from all our customers at the end of a month. This represents
the revenue we would contractually expect to receive from those customers over the following month, without any increase or reduction in any of their subscriptions.
We then (i) calculate the actual monthly recurring revenue from those same customers at the end of that following month; then (ii) divide that following month’s recurring revenue
by the base month’s recurring revenue to arrive at our monthly net expansion rate; then (iii) calculate a quarterly net expansion rate by compounding the net expansion rates
of the three months in the quarter; and then (iv) calculate our annualized net expansion rate by compounding our quarterly net expansion rate over an annual period.
Free Cash Flow
We define free cash flow as cash from operating activities minus purchases of property and equipment and capitalized software development costs.

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