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New Relic, Inc. (NEWR) Stock Sliding Sharply in Premarket, Here’s the Reason

New Relic, Inc. (NEWR), a software-as-a-service company, has plunged 23.52% in premarket trading session and is trading at $83.5 at the time of the writing. On Tuesday, the stock gained a slight increase of 1.66% and closed the day at $109.18. The stock slid in the aftermarket as soon as the company announced results for Q3 2022, reflecting an increase in loss per share.

NEWR Q3 2022 Results

On Tuesday, NEWR reported the results for Q3 2021. The Company generated revenue of $204 million against $166 million for Q3 2021. The GAAP gross margin for the period was 66%, while the non-GAAP gross margin hovered around 68%. The GAAP net loss per basic and diluted share for the three months was $0.96 as compared to the GAAP net loss per basic and diluted share of $0.88 for Q3 2021. The non-GAAP net loss per basic and diluted share for Q3 2022 was $0.18 against $0.14 for Q3 2021.

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Outlook for Q4 and FY2022

Alongside, NEWR released the fiscal outlook for Q4 and FY 2022. The company expected the revenue to stand between $204 and $206 million during Q4 2022. The expected non-GAAP loss from operations would be between $12 (loss per diluted share of $0.19) and $14 million ($0.22). For the full year 2022, the expected revenue range is $784 to $786 million, while the range for non-GAAP loss from operations stands between $45 (loss per diluted share of $0.72) and $47 million ($0.75).

Executive Commentary

While commenting on the development, CEO of NEWR, Bill Staples said that the company re-accelerated its revenue sequentially during the quarter, reflecting a strong execution of strategic priorities. The company is focused on delivering on its mission of making observability a routine for engineers across the software domain.

What’s Next for NEWR?

The last three months have seen NEWR stock gaining an increase of approximately 20%. Looking ahead, the stock holds several positive indicators at this point, and hence, currently, there is an excellent opportunity for investors to buy the stock.

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