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Investor Presentation
November 2015
New Relic Confidential | 2
SafeHarbor
This presentation and the inf ormation contained herein (including any inf ormation that may be incorporated by ref erence) is prov ided f or inf ormational purposes only and should not be construed as an of f er,
commitment, promise or obligation on behalf of New Relic, Inc. (“New Relic”) to sell securities or deliv er any product, material, code, f unctionality or other f eature. Any inf ormation prov ided hereby is proprietary to
New Relic and may not be replicated or disclosed without New Relic’s express written permission.
Such inf ormation may contain f orward-looking statements within the meaning of f ederal securities laws. Any statement that is not a historical f act or ref ers to expectations, projections, f uture plans, objectiv es,
estimates, goals, or other characterizations of f uture ev ents is a f orward-looking statement. These f orward-looking statements can of ten be identif ied as such because the context of the statement will include
words such as “believ es,” “anticipates,” “expects” or words of similar import. Forward-looking statements contained in this presentation include, but are not limited to, statements concerning New Relic's f uture
f inancial perf ormance, growth prospects, ability to attract and retain customers, ability to execute on its product strategy and ability to successf ully expand in its existing markets and into new markets.Actual
results may dif f er materially from those expressed in these f orward-looking statements, which speak only as of the date hereof , and are subject to change at any time without notice. Existing and prospectiv e
inv estors, customers and other third parties transacting business with New Relic are cautioned not to place undue reliance on this f orward-looking inf ormation. The achiev ement or success of the matters cov ered
by such f orward-looking statements are based on New Relic’s current assumptions, expectations and belief s and are subject to substantial risks, uncertainties, assumptions and changes in circumstances that
may cause the actual results, perf ormance or achiev ements to dif f er materially from those expressed or implied in any f orward-looking statement. Further inf ormation on f actors that could af f ect such f orward-
looking statements is included in the f ilings New Relic makes with the SEC f rom time to time. Copies of these documents may be obtained by v isiting New Relic’s Inv estor Relations website
at http://ir.newrelic.com or the SEC’s website at www.sec.gov . New Relic assumes no obligation and does not intend to update these f orward-looking statements, except as required by law. New Relic makes no
warranties, expressed or implied, in this presentation or otherwise, with respect to the inf ormation prov ided.
New Relic's f iscal y ear ends March 31. This presentation includes certain non-GAAP f inancial measures as def ined by the SEC rules. These non-GAAP f inancial measures are in addition to, and not as a
substitute f or or superior to, measures of f inancial perf ormance prepared in accordance with GAAP. There are a number of limitations related to the use of these non-GAAP f inancial measures v ersus their
nearest GAAP equiv alents. For example, other companies may calculate non-GAAP f inancial measures dif f erently or may use other measures to ev aluate their perf ormance, all of which could reduce the
usef ulness of New Relic's non-GAAP f inancial measures as tools f or comparison. As required by Regulation G, New Relic has prov ided a reconciliation of those measures to the most directly comparable GAAP
measures, which is av ailable in the appendix.
New Relic Confidential | 3
NEW RELIC HIGHLIGHTS
Intuitive Products Deliver Ease-
of-Use, Strong Results and
HighAdoption
Built on100% SaaS,
Multi-Tenant Cloud Platform with
Enterprise-Grade Security
Integrated SoftwareAnalytics
Cloud for Developers,
IT and Business Users
New Relic Confidential | 4
STRONGFINANCIALPERFORMANCE
• Land and expand model driven by increasing penetration of the enterprise and expanding product portfolio
• Recurring revenue model with industry leading revenue retention metrics
• Growing, multibillion dollar market opportunity
$11.7
$29.7
$63.2
$110.4
$175.0
FY12 FY13 FY14 FY15 FY16E
Note: FY16 Revenue Based on Midpoint of Guidance
Historical Revenue ($MM)
Q2’13 Q2’16
$6.6M Revenue $42.9M
3,847 Paid Business Accounts 12,840
~$7,600
Revenue per Average
Paid Business Account
~$13,600
<25
$100K+ Subscription
/Year Customers
>250
1 # of Paid Products 5
New Relic Confidential | 5
software
business
Every business
is becoming a
New Relic Confidential | 5
New Relic Confidential | 6
RulesoftheGameHaveChanged:ModernSoftwareisDifferent
But to support this transformation, IT is under the gun
Yesterday’sSoftware
DevelopmentTeam
App
• Back-Office Applications
• Periodic Releases, Static
• On-Premise
Single Code Base
One Language
Operations Team
Data Deluge
ModernSoftware
Multiple
Components
Multiple, Dispersed
Development
Teams • Customer-facing Applications –
higher stakes
• Fast, Iterative Release Cycles
• Modern Stack: Cloud, Mobile
• Real-Time
Multi-language Applications
Ruby/ Node.js/ Java/ .NET/ PHP/ Python
Private CloudPublic Cloud
Multiple interfaces
mobile, tablet, browser
App
Security
Operations
Teams
Digital Business Managers
New Relic Confidential | 7
ENTER SOFTWARE ANALYTICS
New Relic Confidential | 8
Software Analytics is the category of analytics
that gathers metrics in real-time from live production
software and transforms them into actionable data
010000100101001001010100101010100101000000001010
0101010110000010101000000010101010111110101010101
0111111010101010000101100100100101010101001010101
00101111101001010100101000001010101011101111111110
New Relic Confidential | 9
Businesses Requires Software Analytics to Answer:
Business
Outcome
Application
Performance
Customer
Experience
How are customers engaging?
What is the page load time to
initial experience?
Am I open forbusiness?
Is the application working?
How is my business doing?
What changes influence
business success?
New Relic Confidential | 10
Application
performance
Customer
experience
Business
outcome
NRDB
New Relic Confidential | 11
2007 2015
>500,000+ Users
>12,000 Paid BusinessAccounts
Our History of Innovation and Growth
New Relic Confidential | 12
New Relic’s Integrated Full-StackSolution
Software Data
Collect
New Relic Cloud
Database
Store
Analyze
Servers Mobile Plugins Brow ser Apps
New Relic Confidential | 13
How New Relic Works
We collect 700+ Billion
data points each day
New Relic Agent is
inserted into app code
Transaction events are
collected and sent to New
Relic Data Cloud
Brow ser
Web Server Back-end Server
New Relic
Data Cloud
Mobile
New Relic Confidential | 14
Same Data Many Use Cases
IT operations
Developers
SecurityFinance
Sales
Marketing
New Relic Confidential | 15
Creating a Global Movement - #customerlove
New Relic Confidential | 15
New Relic Confidential | 16
New Economy Disruptors and Enterprises are Solving the Problem
Disruptors LargeGlobal Enterprises
New Relic Confidential | 17
New Relic isAll In on SaaS
Isolate IT
complexity
Rapid Deployment:
value in hours
Continuous Release
Cycles
New Relic SaaS Service
and Business Model Is the Foundation
SaaS
Speed to innovation, low TCO, enterprise-grade security
New Relic Confidential | 18
We TakeSecuritySeriously
Service Compliance (Not Just The Data Center)
• TRUSTe, SOC2 Type II, SSA-16, US/UE Safe Harbor
• Regular 3rd party security assessments
Mature Security Program
• Dedicated security team from Amazon, Intuit, Mozilla, PwC
• Go beyond SSA-16: audit our own apps, infrastructure and network
• Published Cloud Security Alliance questionnaire
New Relic Confidential | 19
INVESTING TO CAPITALIZE ON SOFTWARE ANALYTICS OPPORTUNITY
SIGNIFICANT OPERATING LEVERAGE WITH GROWING SCALE
INCREASING ENTERPRISE PENETRATION
LAND AND EXPAND MODEL
GROSS MARGINS OF 80%+
STRONG REVENUE GROWTH
NEWRELICFINANCIALHIGHLIGHTS
New Relic Confidential | 20
$12
$30
$63
$110
$175
FY12 FY13 FY14 FY15 FY16E
Historical Revenue ($MM) Historical Quarterly Revenue ($MM)
RAPIDREVENUEGROWTH
Note: FY16 Revenue Based on Midpoint of Guidance
$12
$14
$17
$20
$23
$25
$29
$33
$38
$43
Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16
New Relic Confidential | 21
2,000
2,500
3,000
3,500
4,000
4,500
5,000
5,500
Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16
Paid Business Accounts > $5K in Annual Subscription Revenue
Please refer to Appendix for definition of Paid Business Accounts
Land: Increasing focus on high-value accountsINCREASINGFOCUSON HIGH-VALUEACCOUNTS
New Relic Confidential | 22
Growing with a customer’s
environment
Expanding across
business units
Expanding product
footprint
EXPANSIONVECTORSWITHININSTALLEDBASE
New Relic Confidential | 23
5/13/2011 9/27/2011 3/5/2012 7/24/2012 5/30/2013 3/31/2015FY12 FY13 FY14
Current Products Evaluating
Number of APM Subscriptions Annual Subscription Value
16x
Repeat Purchaser Since Initial
Subscription Purchase in 2011
FY12 FY13 FY14FY15 FY15
InternetCompany
GROWINGWITHACUSTOMER’SENVIRONMENT
FY16
New Relic Confidential | 24
Product Usage
December
2013
September
2014
March 2015 September
2015
Annual Subscription Value
September 2014
Added
March 2015
Committed
Increase
TravelCompany
EXPANDINGPRODUCTFOOTPRINT
December 2013
September 2015
Added
New Relic Confidential | 25
Number of APM Subscriptions
Current Products
Annual SubscriptionValue
11/21/121/29/143/31/2015
>50x
Increase in #
Subscriptions
FY13 FY15FY14
Evaluating
FY13 FY15FY14 FY16 FY16
Media Company
EXPANDINGACROSSBUSINESSUNITS
New Relic Confidential | 26
50%
75%
100%
125%
150%
Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15
STRONGEXPANSIONRATES
26
100%
Dollar-BasedNetExpansionRates
See Appendix for an explanation of how we calculate Dollar-Based Net Expansion rate
New Relic Confidential | 27
0% 25% 50% 100%75%
% of Ending MRR by
segment
% of Total paid business
accounts by segment
11%
35%
16%
28%
73%
37%
Enterprise
(1000+ employees)
Mid-Market
(100-1000 employees)
SMB
(0-100 employees)
SUCCESSACROSSALLCUSTOMERSEGMENTS
Developer
Data as of September 30, 2015
New Relic Confidential | 28
STEADYGROWTHOFLARGEPAID BUSINESSACCOUNTS
Note: Annualized subscription revenue calculated as quarterly revenue multiplied by 4 for each quarterly period. See Appendix for an explanation of how we define a Paid Business Account
0
300
Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15
FiscalQuarter
Paid Business Accounts > $100k in Annual Subscription Revenue
New Relic Confidential | 29
AnnualizedSubscriptionRevenue/AveragePaidBusinessAccount
PaidBusinessAccounts
ADDINGCUSTOMERSAT HIGHERAVERAGEREVENUES
$6,000
$8,000
$10,000
$12,000
$14,000
3,000
5,000
7,000
9,000
11,000
13,000
Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16
AnnualizedSubscriptionRevenue/AveragePaidBusinessAccount
PaidBusinessAccounts
12,840
6,634
$13,585
$7,649
New Relic Confidential | 30
LARGEINTERNATIONALCUSTOMERFOOTPRINT
50%50%
FY2015 Paid
Business Accounts
by Region
66%
34%
FY2015 Revenue
By Region
US
International
New Relic Confidential | 31
INCREASEDSCALEDELIVERINGOPERATINGLEVERAGE
Expenses as a Percentage of Revenue (%)
31
Note: Metrics are Non-GAAP and exclude stock-based compensation, litigation and acquisition-related expenses. See Appendix for reconciliation. FY16 Based on
Midpoint of Guidance.
91% 89% 90%
76%
36%
23% 24%
20%
16%
17% 14%
18%
16%
16% 17%
19%
159%
146% 144%
133%
126%
0%
50%
100%
150%
200%
FY12 FY13 FY14 FY15 FY16E
S&M R&D G&A COGS
New Relic Confidential | 32
(% of Revenue) FY’14 FY’15
Gross Margin 83% 81%
Sales & Marketing 90% 76%
Research &
Development
24% 20%
General &
Administrative
14% 18%
Operating Margin (44%) (33%)
LT Target *
78% – 82%
35% – 38%
15% – 18%
7% – 9%
20% – 25%
LONG-TERMTARGETOPERATINGMODEL
Note: Metrics are Non-GAAP and exclude stock-based compensation, amortization of purchased intangibles, litigation and acquisition-related expenses. See Appendix for reconciliation.
New Relic Confidential | 33
GROWTHSTRATEGIES
Deliver greatproductsthatdelight customers
Increasevaluefor existing customerssothey expand
Drive salesgrowth by building a strong brand
33
New Relic Confidential | 34
Number of Paid Business Accounts
We define the number of paid business accounts atthe end of any particular period as the number ofaccounts at the end of th e period as identified by a
unique accountidentifier for which we have recognized revenue on the lastday of the period indicated.
A single organization or customer mayhave multiple paid business accounts for separate divisions,segments,or subsidiaries
Dollar-Based Net ExpansionRate
Our dollar-based netexpansion rate compares our recurring subscription revenue from customers from one period to the next. We m easure our dollar-based
net expansion rate on a monthlybasis because manyof our customers change their subscriptions more frequentlythan quarterly or annually.
To calculate our annual dollar-based netexpansion rate,we first establish the base period monthlyrecurring revenue from all our customers atthe end of a
month.This represents the revenue we would contractually expect to receive from those customers over the following month,wi thoutany increase or
reduction in any of their subscriptions.
We then (i) calculate the actual monthlyrecurring revenue from those same customers atthe 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 monthlynet expansion rate; then (iii) calculate a quarterly net expansion rate by
compounding the netexpansion rates of the three months in the quarter;and then (iv) calculate our annualized netexpansion rate by compounding our
quarterly net expansion rate over an annual period
APPENDIX-DEFINITIONS
34
New Relic Confidential | 35
The company has not reconciled any of the non-GAAP measures referenced above to the most comparable GAAP measure in its long-term target non-GAAP operating model because
certain items are out of the company's control and/or cannot be reasonably predicted. Accordingly, a reconciliation is not available without unreasonable effort.
NON-GAAPTOGAAPRECONCILIATION
($000s, Except for %) FY12 FY13 FY14 FY15
Gross Profit (GAAP) 9,759 24,586 52,394 88,589
Stock-Based Compensation 11 212 159 591
Amortization of Purchased Intangibles 400
Amortization of Stock-Based Compensation in Software Development 54 179
Gross Profit (Non-GAAP) 9,770 24,798 52,607 89,759
Gross Margin (Non-GAAP) 83.8% 83.6% 83.3% 81.3%
Cost of Goods Sold (GAAP) 1,904 5,078 10,780 21,802
Stock-Based Compensation 11 212 159 591
Amortization of Purchased Intangibles 400
Amortization of Stock-Based Compensation in Software Development 54 179
Cost of Goods Sold (Non-GAAP) 1,893 4,866 10,567 20,631
Sales & Marketing (GAAP) 10,748 28,365 58,156 89,162
Stock-Based Compensation 143 2,060 1,373 5,108
Amortization of Purchased Intangibles 25
Sales & Marketing (Non-GAAP) 10,605 26,305 56,783 84,029
Research & Development (GAAP) 4,300 8,565 16,496 24,024
Stock-Based Compensation 126 1,620 1,425 2,055
Research & Development (Non-GAAP) 4,174 6,945 15,071 21,969
General & Administrative (GAAP) 2,180 10,053 17,178 25,319
Stock-Based Compensation 323 4,794 3,263 3,912
Litigation Expenses 0 154 5,135 1,322
Amortization of Purchased Intangibles 75
Transaction Costs Related to Acquisition 71
General & Administrative (Non-GAAP) 1,857 5,105 8,780 19,939
Operating Loss (GAAP) ($7,469) ($22,397) ($39,436) ($49,916)
Stock-Based Compensation 603 8,686 6,220 11,666
Litigation Expenses 0 154 5,135 1,322
Amortization of Purchased Intangibles 500
Transaction Costs Related to Acquisition 71
Amortization of Stock-Based Compensation in Software Development 54 179
Operating Loss (Non-GAAP) (6,866) (13,557) (28,027) (36,178)
Operating Margin (Non-GAAP) (58.9%) (45.7%) (44.4%) (32.8%)

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Investor Deck - Q2 2015

  • 2. New Relic Confidential | 2 SafeHarbor This presentation and the inf ormation contained herein (including any inf ormation that may be incorporated by ref erence) is prov ided f or inf ormational purposes only and should not be construed as an of f er, commitment, promise or obligation on behalf of New Relic, Inc. (“New Relic”) to sell securities or deliv er any product, material, code, f unctionality or other f eature. Any inf ormation prov ided hereby is proprietary to New Relic and may not be replicated or disclosed without New Relic’s express written permission. Such inf ormation may contain f orward-looking statements within the meaning of f ederal securities laws. Any statement that is not a historical f act or ref ers to expectations, projections, f uture plans, objectiv es, estimates, goals, or other characterizations of f uture ev ents is a f orward-looking statement. These f orward-looking statements can of ten be identif ied as such because the context of the statement will include words such as “believ es,” “anticipates,” “expects” or words of similar import. Forward-looking statements contained in this presentation include, but are not limited to, statements concerning New Relic's f uture f inancial perf ormance, growth prospects, ability to attract and retain customers, ability to execute on its product strategy and ability to successf ully expand in its existing markets and into new markets.Actual results may dif f er materially from those expressed in these f orward-looking statements, which speak only as of the date hereof , and are subject to change at any time without notice. Existing and prospectiv e inv estors, customers and other third parties transacting business with New Relic are cautioned not to place undue reliance on this f orward-looking inf ormation. The achiev ement or success of the matters cov ered by such f orward-looking statements are based on New Relic’s current assumptions, expectations and belief s and are subject to substantial risks, uncertainties, assumptions and changes in circumstances that may cause the actual results, perf ormance or achiev ements to dif f er materially from those expressed or implied in any f orward-looking statement. Further inf ormation on f actors that could af f ect such f orward- looking statements is included in the f ilings New Relic makes with the SEC f rom time to time. Copies of these documents may be obtained by v isiting New Relic’s Inv estor Relations website at http://ir.newrelic.com or the SEC’s website at www.sec.gov . New Relic assumes no obligation and does not intend to update these f orward-looking statements, except as required by law. New Relic makes no warranties, expressed or implied, in this presentation or otherwise, with respect to the inf ormation prov ided. New Relic's f iscal y ear ends March 31. This presentation includes certain non-GAAP f inancial measures as def ined by the SEC rules. These non-GAAP f inancial measures are in addition to, and not as a substitute f or or superior to, measures of f inancial perf ormance prepared in accordance with GAAP. There are a number of limitations related to the use of these non-GAAP f inancial measures v ersus their nearest GAAP equiv alents. For example, other companies may calculate non-GAAP f inancial measures dif f erently or may use other measures to ev aluate their perf ormance, all of which could reduce the usef ulness of New Relic's non-GAAP f inancial measures as tools f or comparison. As required by Regulation G, New Relic has prov ided a reconciliation of those measures to the most directly comparable GAAP measures, which is av ailable in the appendix.
  • 3. New Relic Confidential | 3 NEW RELIC HIGHLIGHTS Intuitive Products Deliver Ease- of-Use, Strong Results and HighAdoption Built on100% SaaS, Multi-Tenant Cloud Platform with Enterprise-Grade Security Integrated SoftwareAnalytics Cloud for Developers, IT and Business Users
  • 4. New Relic Confidential | 4 STRONGFINANCIALPERFORMANCE • Land and expand model driven by increasing penetration of the enterprise and expanding product portfolio • Recurring revenue model with industry leading revenue retention metrics • Growing, multibillion dollar market opportunity $11.7 $29.7 $63.2 $110.4 $175.0 FY12 FY13 FY14 FY15 FY16E Note: FY16 Revenue Based on Midpoint of Guidance Historical Revenue ($MM) Q2’13 Q2’16 $6.6M Revenue $42.9M 3,847 Paid Business Accounts 12,840 ~$7,600 Revenue per Average Paid Business Account ~$13,600 <25 $100K+ Subscription /Year Customers >250 1 # of Paid Products 5
  • 5. New Relic Confidential | 5 software business Every business is becoming a New Relic Confidential | 5
  • 6. New Relic Confidential | 6 RulesoftheGameHaveChanged:ModernSoftwareisDifferent But to support this transformation, IT is under the gun Yesterday’sSoftware DevelopmentTeam App • Back-Office Applications • Periodic Releases, Static • On-Premise Single Code Base One Language Operations Team Data Deluge ModernSoftware Multiple Components Multiple, Dispersed Development Teams • Customer-facing Applications – higher stakes • Fast, Iterative Release Cycles • Modern Stack: Cloud, Mobile • Real-Time Multi-language Applications Ruby/ Node.js/ Java/ .NET/ PHP/ Python Private CloudPublic Cloud Multiple interfaces mobile, tablet, browser App Security Operations Teams Digital Business Managers
  • 7. New Relic Confidential | 7 ENTER SOFTWARE ANALYTICS
  • 8. New Relic Confidential | 8 Software Analytics is the category of analytics that gathers metrics in real-time from live production software and transforms them into actionable data 010000100101001001010100101010100101000000001010 0101010110000010101000000010101010111110101010101 0111111010101010000101100100100101010101001010101 00101111101001010100101000001010101011101111111110
  • 9. New Relic Confidential | 9 Businesses Requires Software Analytics to Answer: Business Outcome Application Performance Customer Experience How are customers engaging? What is the page load time to initial experience? Am I open forbusiness? Is the application working? How is my business doing? What changes influence business success?
  • 10. New Relic Confidential | 10 Application performance Customer experience Business outcome NRDB
  • 11. New Relic Confidential | 11 2007 2015 >500,000+ Users >12,000 Paid BusinessAccounts Our History of Innovation and Growth
  • 12. New Relic Confidential | 12 New Relic’s Integrated Full-StackSolution Software Data Collect New Relic Cloud Database Store Analyze Servers Mobile Plugins Brow ser Apps
  • 13. New Relic Confidential | 13 How New Relic Works We collect 700+ Billion data points each day New Relic Agent is inserted into app code Transaction events are collected and sent to New Relic Data Cloud Brow ser Web Server Back-end Server New Relic Data Cloud Mobile
  • 14. New Relic Confidential | 14 Same Data Many Use Cases IT operations Developers SecurityFinance Sales Marketing
  • 15. New Relic Confidential | 15 Creating a Global Movement - #customerlove New Relic Confidential | 15
  • 16. New Relic Confidential | 16 New Economy Disruptors and Enterprises are Solving the Problem Disruptors LargeGlobal Enterprises
  • 17. New Relic Confidential | 17 New Relic isAll In on SaaS Isolate IT complexity Rapid Deployment: value in hours Continuous Release Cycles New Relic SaaS Service and Business Model Is the Foundation SaaS Speed to innovation, low TCO, enterprise-grade security
  • 18. New Relic Confidential | 18 We TakeSecuritySeriously Service Compliance (Not Just The Data Center) • TRUSTe, SOC2 Type II, SSA-16, US/UE Safe Harbor • Regular 3rd party security assessments Mature Security Program • Dedicated security team from Amazon, Intuit, Mozilla, PwC • Go beyond SSA-16: audit our own apps, infrastructure and network • Published Cloud Security Alliance questionnaire
  • 19. New Relic Confidential | 19 INVESTING TO CAPITALIZE ON SOFTWARE ANALYTICS OPPORTUNITY SIGNIFICANT OPERATING LEVERAGE WITH GROWING SCALE INCREASING ENTERPRISE PENETRATION LAND AND EXPAND MODEL GROSS MARGINS OF 80%+ STRONG REVENUE GROWTH NEWRELICFINANCIALHIGHLIGHTS
  • 20. New Relic Confidential | 20 $12 $30 $63 $110 $175 FY12 FY13 FY14 FY15 FY16E Historical Revenue ($MM) Historical Quarterly Revenue ($MM) RAPIDREVENUEGROWTH Note: FY16 Revenue Based on Midpoint of Guidance $12 $14 $17 $20 $23 $25 $29 $33 $38 $43 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16
  • 21. New Relic Confidential | 21 2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Paid Business Accounts > $5K in Annual Subscription Revenue Please refer to Appendix for definition of Paid Business Accounts Land: Increasing focus on high-value accountsINCREASINGFOCUSON HIGH-VALUEACCOUNTS
  • 22. New Relic Confidential | 22 Growing with a customer’s environment Expanding across business units Expanding product footprint EXPANSIONVECTORSWITHININSTALLEDBASE
  • 23. New Relic Confidential | 23 5/13/2011 9/27/2011 3/5/2012 7/24/2012 5/30/2013 3/31/2015FY12 FY13 FY14 Current Products Evaluating Number of APM Subscriptions Annual Subscription Value 16x Repeat Purchaser Since Initial Subscription Purchase in 2011 FY12 FY13 FY14FY15 FY15 InternetCompany GROWINGWITHACUSTOMER’SENVIRONMENT FY16
  • 24. New Relic Confidential | 24 Product Usage December 2013 September 2014 March 2015 September 2015 Annual Subscription Value September 2014 Added March 2015 Committed Increase TravelCompany EXPANDINGPRODUCTFOOTPRINT December 2013 September 2015 Added
  • 25. New Relic Confidential | 25 Number of APM Subscriptions Current Products Annual SubscriptionValue 11/21/121/29/143/31/2015 >50x Increase in # Subscriptions FY13 FY15FY14 Evaluating FY13 FY15FY14 FY16 FY16 Media Company EXPANDINGACROSSBUSINESSUNITS
  • 26. New Relic Confidential | 26 50% 75% 100% 125% 150% Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 STRONGEXPANSIONRATES 26 100% Dollar-BasedNetExpansionRates See Appendix for an explanation of how we calculate Dollar-Based Net Expansion rate
  • 27. New Relic Confidential | 27 0% 25% 50% 100%75% % of Ending MRR by segment % of Total paid business accounts by segment 11% 35% 16% 28% 73% 37% Enterprise (1000+ employees) Mid-Market (100-1000 employees) SMB (0-100 employees) SUCCESSACROSSALLCUSTOMERSEGMENTS Developer Data as of September 30, 2015
  • 28. New Relic Confidential | 28 STEADYGROWTHOFLARGEPAID BUSINESSACCOUNTS Note: Annualized subscription revenue calculated as quarterly revenue multiplied by 4 for each quarterly period. See Appendix for an explanation of how we define a Paid Business Account 0 300 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 FiscalQuarter Paid Business Accounts > $100k in Annual Subscription Revenue
  • 29. New Relic Confidential | 29 AnnualizedSubscriptionRevenue/AveragePaidBusinessAccount PaidBusinessAccounts ADDINGCUSTOMERSAT HIGHERAVERAGEREVENUES $6,000 $8,000 $10,000 $12,000 $14,000 3,000 5,000 7,000 9,000 11,000 13,000 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 AnnualizedSubscriptionRevenue/AveragePaidBusinessAccount PaidBusinessAccounts 12,840 6,634 $13,585 $7,649
  • 30. New Relic Confidential | 30 LARGEINTERNATIONALCUSTOMERFOOTPRINT 50%50% FY2015 Paid Business Accounts by Region 66% 34% FY2015 Revenue By Region US International
  • 31. New Relic Confidential | 31 INCREASEDSCALEDELIVERINGOPERATINGLEVERAGE Expenses as a Percentage of Revenue (%) 31 Note: Metrics are Non-GAAP and exclude stock-based compensation, litigation and acquisition-related expenses. See Appendix for reconciliation. FY16 Based on Midpoint of Guidance. 91% 89% 90% 76% 36% 23% 24% 20% 16% 17% 14% 18% 16% 16% 17% 19% 159% 146% 144% 133% 126% 0% 50% 100% 150% 200% FY12 FY13 FY14 FY15 FY16E S&M R&D G&A COGS
  • 32. New Relic Confidential | 32 (% of Revenue) FY’14 FY’15 Gross Margin 83% 81% Sales & Marketing 90% 76% Research & Development 24% 20% General & Administrative 14% 18% Operating Margin (44%) (33%) LT Target * 78% – 82% 35% – 38% 15% – 18% 7% – 9% 20% – 25% LONG-TERMTARGETOPERATINGMODEL Note: Metrics are Non-GAAP and exclude stock-based compensation, amortization of purchased intangibles, litigation and acquisition-related expenses. See Appendix for reconciliation.
  • 33. New Relic Confidential | 33 GROWTHSTRATEGIES Deliver greatproductsthatdelight customers Increasevaluefor existing customerssothey expand Drive salesgrowth by building a strong brand 33
  • 34. New Relic Confidential | 34 Number of Paid Business Accounts We define the number of paid business accounts atthe end of any particular period as the number ofaccounts at the end of th e period as identified by a unique accountidentifier for which we have recognized revenue on the lastday of the period indicated. A single organization or customer mayhave multiple paid business accounts for separate divisions,segments,or subsidiaries Dollar-Based Net ExpansionRate Our dollar-based netexpansion rate compares our recurring subscription revenue from customers from one period to the next. We m easure our dollar-based net expansion rate on a monthlybasis because manyof our customers change their subscriptions more frequentlythan quarterly or annually. To calculate our annual dollar-based netexpansion rate,we first establish the base period monthlyrecurring revenue from all our customers atthe end of a month.This represents the revenue we would contractually expect to receive from those customers over the following month,wi thoutany increase or reduction in any of their subscriptions. We then (i) calculate the actual monthlyrecurring revenue from those same customers atthe 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 monthlynet expansion rate; then (iii) calculate a quarterly net expansion rate by compounding the netexpansion rates of the three months in the quarter;and then (iv) calculate our annualized netexpansion rate by compounding our quarterly net expansion rate over an annual period APPENDIX-DEFINITIONS 34
  • 35. New Relic Confidential | 35 The company has not reconciled any of the non-GAAP measures referenced above to the most comparable GAAP measure in its long-term target non-GAAP operating model because certain items are out of the company's control and/or cannot be reasonably predicted. Accordingly, a reconciliation is not available without unreasonable effort. NON-GAAPTOGAAPRECONCILIATION ($000s, Except for %) FY12 FY13 FY14 FY15 Gross Profit (GAAP) 9,759 24,586 52,394 88,589 Stock-Based Compensation 11 212 159 591 Amortization of Purchased Intangibles 400 Amortization of Stock-Based Compensation in Software Development 54 179 Gross Profit (Non-GAAP) 9,770 24,798 52,607 89,759 Gross Margin (Non-GAAP) 83.8% 83.6% 83.3% 81.3% Cost of Goods Sold (GAAP) 1,904 5,078 10,780 21,802 Stock-Based Compensation 11 212 159 591 Amortization of Purchased Intangibles 400 Amortization of Stock-Based Compensation in Software Development 54 179 Cost of Goods Sold (Non-GAAP) 1,893 4,866 10,567 20,631 Sales & Marketing (GAAP) 10,748 28,365 58,156 89,162 Stock-Based Compensation 143 2,060 1,373 5,108 Amortization of Purchased Intangibles 25 Sales & Marketing (Non-GAAP) 10,605 26,305 56,783 84,029 Research & Development (GAAP) 4,300 8,565 16,496 24,024 Stock-Based Compensation 126 1,620 1,425 2,055 Research & Development (Non-GAAP) 4,174 6,945 15,071 21,969 General & Administrative (GAAP) 2,180 10,053 17,178 25,319 Stock-Based Compensation 323 4,794 3,263 3,912 Litigation Expenses 0 154 5,135 1,322 Amortization of Purchased Intangibles 75 Transaction Costs Related to Acquisition 71 General & Administrative (Non-GAAP) 1,857 5,105 8,780 19,939 Operating Loss (GAAP) ($7,469) ($22,397) ($39,436) ($49,916) Stock-Based Compensation 603 8,686 6,220 11,666 Litigation Expenses 0 154 5,135 1,322 Amortization of Purchased Intangibles 500 Transaction Costs Related to Acquisition 71 Amortization of Stock-Based Compensation in Software Development 54 179 Operating Loss (Non-GAAP) (6,866) (13,557) (28,027) (36,178) Operating Margin (Non-GAAP) (58.9%) (45.7%) (44.4%) (32.8%)