New Relic reported fiscal third-quarter results late Tuesday that topped revenue estimates but fell short on earnings, as did its outlook. New Relic stock cratered.
The company reported an adjusted loss of 18 cents a share on revenue of $204 million. Analysts expected New Relic to report a loss of 17 cents on revenue of $200.3 million, according to FactSet.
Revenue climbed 22% from the year-earlier period, marking its fourth quarter in a row of acceleration.
For its current quarter, New Relic expects an adjusted loss in the range of 19 cents to 22 cents a share, vs. expectations of a five-cent loss. It expects revenue in the range of $204 million to $206 million. The consensus was $204.2 million.
New Relic Stock Action
New Relic stock plunged 19% to 88.05 in after-hours trading on the stock market today.
The company provides data analytics, Big Data and cloud monitoring software. Companies use its cloud-based platform to visualize, analyze and troubleshoot their own software.
Moreover, the massive volumes of information generated and used for decision-making in business today fuel the booming business of data analytics and Big Data companies.
"We're executing well against our strategic priorities," Chief Executive Bill Staples said in written comments with the New Relic earnings report. "We've successfully migrated 80% of our business to a consumption model one quarter ahead of schedule, and we're growing the total number of paid accounts getting value from New Relic One."
New Relic expects to complete its transition to the cloud over the next two years. When the transition is complete, it expects non-GAAP gross margins to be back in the high 70% to low 80% range, the company said in its letter to shareholders.
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