New Relic, Inc.

Q4 revenue was $242.5 million, up 18% year over year. Non-GAAP EPS was $0.42 on 70.2 million diluted shares. Operating income was $26.1 million, or 10.7% margin, and gross margin was 79%, up 1.4 points from last quarter and 8 points year over year. For the full year, management said revenue was about $700 million. Q1 FY24 guidance is $238 million to $240 million in revenue, up about 10% to 11%, with non-GAAP operating income of $26 million to $28 million. Full-year FY24 guidance is $1.02 billion to $1.03 billion in revenue, also up about 10% to 11%, with non-GAAP operating income of $145 million to $155 million.

Bill Staples framed FY23 as a year of strong execution, product innovation, and a successful shift toward profitable growth. He emphasized that more than 80% of revenue now comes from consumption, that over 800 net new paid platform customers were added in Q4, and that New Relic is first to market in areas like OpenAI monitoring and an observability assistant. His tone was confident but pragmatic: he repeatedly noted cloud optimization and subscription migration pressure, while arguing the company is exiting the year better positioned to take share and simplify the business.

David Barter emphasized that New Relic exceeded the top end of guidance, with $242.5 million of revenue, $26.1 million of operating income, and $0.42 EPS in Q4. He highlighted gross margin of 79%, cash and investments of $880 million at quarter end, and more than $425 million after repaying a convertible note; he also said the company is not pursuing additional financing. He guided to roughly $150 million of free cash flow by fiscal year-end and said the company expects to end with approximately $500 million or more in cash, while continuing to invest about 25% of revenue in R&D.

Analysts focused heavily on the FY24 guide, especially the impact of churn, cloud optimization, and the subscription-to-consumption transition. Management said churn is explicitly baked into guidance and may be higher than before, with migrations clustered in Q2 and Q3, and also said some lower-end subscription customers may simply move to the free tier. On the consumption side, David said management is assuming about 20% growth excluding migrations, down from the prior year’s higher rate, and that customers who expanded in December and March are not yet consuming in line with commitments. Questions also probed generative AI, OpenTelemetry, pricing/Data Plus, and the newly integrated infrastructure/APM offering; management said these are early but structurally positive, and that some benefits are not yet explicitly modeled in the guide.