Exhibit 99.1
New Relic Announces Third Quarter of Fiscal Year 2015 Results
Revenue increased 69% year-over-year to $29.0 million
Dollar-Based Net Expansion Rate of 132%
San Francisco – February 12, 2015 -Software analytics company New Relic, Inc. (NYSE: NEWR), today announced financial results for the third fiscal quarter ended December 31, 2014.
“New Relic’s strong quarter was the result of our passion for delivering beautiful products that our customers love to use,” said Lew Cirne, founder and CEO, New Relic. “Today, we believe every business is becoming a software business. And, that’s why companies of all sizes are rapidly turning to New Relic’s highly-differentiated software analytics platform to get lightning-fast answers to their important business questions.”
Third Quarter 2015 Financial Highlights:
| • | Revenue of $29.0 million, up 69% compared with the third quarter of fiscal 2014 and 14% from the second quarter of fiscal 2015. |
| • | GAAP loss from operations was $15.6 million for the third quarter of fiscal 2015, compared with GAAP loss from operations of $11.7 million for the third quarter of fiscal 2014. Non-GAAP loss from operations was $11.8 million for the third quarter of fiscal 2015, compared with non-GAAP loss from operations of $8.5 million for the third quarter of fiscal 2014. |
| • | GAAP net loss per share was $0.70 for the third quarter of fiscal 2015 based on 22.8 million weighted-average shares outstanding, compared with GAAP net loss per share of $0.76 for the third quarter of fiscal 2014 based on 15.6 million weighted-average shares outstanding. Non-GAAP net loss per share was $0.28 for the third quarter of fiscal 2015 based on 42.3 million non-GAAP weighted-average shares outstanding, compared with non-GAAP net loss per share of $0.23 for the third quarter of fiscal 2014 based on 37.9 million non-GAAP weighted-average shares outstanding. |
| • | Cash, cash equivalents and short-term investments were $204.8 million at the end of the third quarter of fiscal 2015, compared with $92.4 million at the end of the second quarter of fiscal 2015. |
Customer Highlights:
| • | Paid Business Accounts as of December 31, 2014 of 11,270. |
| • | Dollar-Based Net Expansion Rate for the quarter ended December 31, 2014 of 132%. |
| • | New customers in the quarter included: Capital One Services, CarAdvice.com.au, Casting Networks, Hootsuite Media, Interactive Intelligence Group, Liazon, LiveAuctioneers, Oportun, Slacker, Socialware, Verafin and Walgreens Boots Alliance. |
| • | Expanded customer relationships in the quarter included: Adobe Systems Incorporated, Betfair, Bloom That, Citrix Systems, Condé Nast, Coupa, E*TRADE Financial, Gilt Groupe, HolidayCheck AG, LendingClub, Lowcost Travel Group, Manheim, Hautelook, Scholastic and Zendesk. |
Third Quarter & Recent Business Highlights:
| • | Completed initial public offering on the New York Stock Exchange, raising $119.9 million in net proceeds. |
| • | Recognized as a “Leader” in Gartner’s Magic Quadrant for Application Performance Monitoring for the third year in a row, with the highest position for ability to execute. |
| • | Acquired Few Ducks, S.L. (Ducksboard), a Barcelona-based provider of real-time dashboards for tracking business metrics from a broad set of application sources. |
| • | Hosted a highly successful FutureStack 2014, New Relic’s second annual user conference, attracting more than 1,200 developers and customers of all sizes. |
| • | Announced the general availability of New Relic Browser and New Relic Synthetics, adding to New Relic’s suite of advanced Software Analytics products. |
Outlook:
New Relic is initiating its outlook for its fourth quarter of fiscal 2015, as well as the full fiscal year 2015.
| • | Fourth Quarter Fiscal 2015 Outlook: |
| • | Revenue between $30.0 million and $30.5 million, representing year-over-year growth of between 51% and 54%. |
| • | Non-GAAP loss from operations of between $11.0 million and $12.0 million. |
| • | Non-GAAP net loss per share of between $0.23 and $0.25. This assumes 47.2 million non-GAAP weighted average common shares outstanding. |
| • | Full Year Fiscal 2015 Outlook: |
| • | Revenue between $107.0 million and $107.5 million, representing year-over-year growth of between 69% and 70%. |
| • | Non-GAAP loss from operations of between $37.0 million and $38.0 million. |
| • | Non-GAAP net loss per share of between $0.90 and $0.92. This assumes 41.3 million non-GAAP weighted average common shares outstanding. |
Conference Call Details:
| • | What: New Relic financial results for the third quarter of fiscal 2015 and outlook for the fourth quarter of fiscal 2015 and the full year of fiscal 2015 |
| • | When: February 12, 2015 at 2:00 P.M. Pacific Time (5:00 P.M. Eastern Time) |
| • | Dial in: To access the call in the U.S., please dial (877) 201-0618, and for international callers, please dial (647) 788-4901. Callers may provide confirmation number 65846910 to access the call more quickly, and are encouraged to dial into the call 10 to 15 minutes prior to the start to prevent any delay in joining. |
| • | Webcast:http://ir.newrelic.com (live and replay) |
| • | Replay:Following the completion of the call through 11:59 PM Eastern Time on February 19, 2015, a telephone replay will be available by dialing (855) 859-2056 from the United States or (404) 537-3406 internationally with conference ID 65846910. |
About New Relic
New Relic is a software analytics company that makes sense of billions of data points about millions of applications in real time. New Relic’s comprehensive SaaS-based solution provides one powerful interface for web and native mobile applications and consolidates the performance monitoring data for any chosen technology in your environment. More than 250,000 users and 11,000 paid business accounts trust New Relic to tap into the billions of real-time metrics from inside their production software — and provide answers to their important business questions. When your brand and customer experience depend on the performance of modern software, New Relic provides insight into your overall environment. Learn more at http://newrelic.com.
Forward-Looking Statements
This press release contains “forward-looking” statements, as that term is defined under the federal securities laws, including but are not limited to statements regarding New Relic’s future financial performance, including its expected financial results for the fourth quarter of fiscal year 2015 and for the full fiscal year 2015, market trends, customer adoption of New Relic’s products, New Relic’s ability to execute and New Relic’s belief that every business is becoming a software business. These forward-looking statements are based on New Relic’s current assumptions, expectations and beliefs and are subject to substantial risks, uncertainties, assumptions and changes in circumstances that may cause New Relic’s actual results, performance or achievements to differ materially from those expressed or implied in any forward-looking statement.
The risks and uncertainties referred to above include, but are not limited to, New Relic’s ability to generate sufficient revenue to achieve and sustain profitability, particularly in light of its significant ongoing expenses; New Relic’s short operating history in an evolving industry; New Relic’s ability to manage its rapid recent growth; fluctuation of New Relic’s quarterly results; the dependence of New Relic’s business on its customers purchasing additional subscriptions and products from it and renewing their subscriptions; New Relic’s ability to develop enhancements to its products, increase adoption and usage of its products and introduce new products that achieve market acceptance; New Relic’s ability to persuade New Relic’s customers to expand their use of New Relic’s products to additional use cases; New Relic’s ability to determine optimal prices for its products; New Relic’s ability to expand its marketing and sales capabilities and increase sales of its solutions to large enterprises while mitigating the risks associated with serving such customers; privacy concerns, which could result in additional cost and liability to New Relic or inhibit sales; changes in privacy laws, regulations and standards; New Relic’s ability to effectively compete in the intensely competitive market for application performance monitoring solutions and respond effectively to rapidly changing technology, evolving industry
standards and changing customer needs, requirements or preferences; New Relic’s dependence on lead generation strategies to drive sales and revenue; interruptions or performance problems associated with New Relic’s technology and infrastructure; defects or disruptions in New Relic’s products; the expense and complexity of New Relic’s ongoing and planned investments in data center hosting facilities; risks associated with international operations; New Relic’s ability to protect its intellectual property rights; and other “Risk Factors” set forth in New Relic’s most recent filings with the Securities and Exchange Commission (the “SEC”).
Further information on these and other factors that could affect New Relic’s financial results and the forward-looking statements in this press release is included in the filings we make with the SEC from time to time, particularly under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Copies of these documents may be obtained by visiting New Relic’s Investor Relations website athttp://ir.newrelic.com or the SEC’s website atwww.sec.gov.
New Relic assumes no obligation and does not intend to update these forward-looking statements, except as required by law.
Non-GAAP Financial Measures
New Relic discloses the following non-GAAP financial measures in this release: non-GAAP loss from operations, non-GAAP net loss, non-GAAP gross profit, non-GAAP sales and marketing, non-GAAP research and development, non-GAAP general and administrative and non-GAAP weighted average shares outstanding. New Relic uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating its ongoing operational performance. New Relic believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends.
Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. A reconciliation of the non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included below in this press release. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures.
New Relic defines non-GAAP gross profit, non-GAAP sales and marketing, non-GAAP research and development, non-GAAP general and administrative, non-GAAP loss from operations and non-GAAP net loss as the respective GAAP balances, adjusted for: (1) stock-based compensation, (2) amortization of stock-based compensation capitalized in software development costs, (3) the amortization of purchased intangibles, (4) lawsuit litigation and (5) the transaction costs related to acquisition. Non-GAAP net loss per share is calculated as non-GAAP net loss divided by the non-GAAP weighted average shares outstanding that are adjusted to assume the conversion of outstanding preferred shares to common shares as of the beginning of the period.
With respect to New Relic’s outlook under “Outlook” above, New Relic has not reconciled non-GAAP loss from operations to GAAP loss from operations or non-GAAP net loss per share to GAAP net loss per share because certain items such as stock-based compensation and lawsuit litigation expenses are out of New Relic’s control or cannot be reasonably predicted. Accordingly, reconciliation is not available without unreasonable effort.
Operating Metrics
New Relic’s dollar-based net expansion rate compares its recurring subscription revenue from customers from one period to the next. It is increased when customers increase their use of New Relic’s products, use additional products, or upgrade to a higher subscription tier. New Relic’s dollar-based net expansion rate is reduced when customers decrease their use of New Relic’s products, use fewer products, or downgrade to a lower subscription tier.
Investor Relations Contact:
Jonathan Parker, New Relic, Inc.
503-336-9280
IR@newrelic.com
Media Contact:
Andrew Schmitt, New Relic, Inc.
415-869-7109
aschmitt@newrelic.com
Condensed Consolidated Statements of Operations
(In thousands, except per share data; unaudited)
| Three Months Ended, | Nine Months Ended, | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
Revenue | $ | 29,029 | $ | 17,185 | $ | 77,003 | $ | 43,331 | ||||||||
Cost of revenue | 5,940 | 2,935 | 15,001 | 7,402 | ||||||||||||
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Gross profit | 23,089 | 14,250 | 62,002 | 35,929 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 6,410 | 4,478 | 16,659 | 12,212 | ||||||||||||
Sales and marketing | 25,460 | 17,084 | 63,094 | 42,091 | ||||||||||||
General and administrative | 6,864 | 4,396 | 17,464 | 11,557 | ||||||||||||
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Total operating expenses | 38,734 | 25,958 | 97,217 | 65,860 | ||||||||||||
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Loss from operations | (15,645 | ) | (11,708 | ) | (35,215 | ) | (29,931 | ) | ||||||||
Other income (expense): | ||||||||||||||||
Interest income | 47 | 3 | 65 | 13 | ||||||||||||
Interest expense | (54 | ) | (15 | ) | (83 | ) | (49 | ) | ||||||||
Other (expense), net | (381 | ) | (181 | ) | (195 | ) | (503 | ) | ||||||||
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Loss before income taxes | (16,033 | ) | (11,901 | ) | (35,428 | ) | (30,470 | ) | ||||||||
Benefit from income taxes | (104 | ) | — | (104 | ) | — | ||||||||||
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Net loss | $ | (15,929 | ) | $ | (11,901 | ) | $ | (35,324 | ) | $ | (30,470 | ) | ||||
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Net loss per share attributable to common stockholders, basic and diluted | $ | (0.70 | ) | $ | (0.76 | ) | $ | (1.94 | ) | $ | (1.96 | ) | ||||
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Weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted | 22,847 | 15,626 | 18,182 | 15,561 | ||||||||||||
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Condensed Consolidated Balance Sheets
(In thousands, except par value; unaudited)
| December 31, 2014 | March 31, 2014 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 167,740 | $ | 19,453 | ||||
Short-term investments | 37,045 | — | ||||||
Accounts receivable, net of allowance for doubtful accounts of $246 and $84, respectively | 12,057 | 5,532 | ||||||
Prepaid expenses and other current assets | 4,068 | 2,491 | ||||||
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Total current assets | 220,910 | 27,476 | ||||||
Property and equipment, net | 33,782 | 20,183 | ||||||
Restricted cash | 5,626 | 5,601 | ||||||
Goodwill and intangible assets, net | 4,606 | — | ||||||
Other assets | 636 | 1,948 | ||||||
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Total assets | $ | 265,560 | $ | 55,208 | ||||
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Liabilities, convertible preferred stock and stockholders’ equity (deficit) | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 3,814 | $ | 4,109 | ||||
Accrued compensation and benefits | 5,180 | 2,822 | ||||||
Other current liabilities | 3,189 | 2,160 | ||||||
Deferred revenue | 23,458 | 10,359 | ||||||
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Total current liabilities | 35,641 | 19,450 | ||||||
Deferred rent, non-current | 4,455 | 3,606 | ||||||
Other liabilities, non-current | 592 | 900 | ||||||
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Total liabilities | 40,688 | 23,956 | ||||||
Convertible preferred stock: | ||||||||
Convertible preferred stock, $0.001 par value | — | 95,917 | ||||||
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Stockholders’ equity (deficit): | ||||||||
Common stock, $0.001 par value | 47 | 16 | ||||||
Treasury stock - at cost (260 shares) | (263 | ) | (263 | ) | ||||
Additional paid-in capital | 341,915 | 17,033 | ||||||
Accumulated other comprehensive loss | (52 | ) | — | |||||
Accumulated deficit | (116,775 | ) | (81,451 | ) | ||||
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Total stockholders’ equity (deficit) | 224,872 | (64,665 | ) | |||||
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Total liabilities, convertible preferred stock and stockholders’ equity (deficit) | $ | 265,560 | $ | 55,208 | ||||
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Condensed Consolidated Statements of Cash Flows
(In thousands; unaudited)
| Nine Months Ended | ||||||||
| December 31, | ||||||||
| 2014 | 2013 | |||||||
Cash flows from operating activities: | ||||||||
Net loss: | $ | (35,324 | ) | $ | (30,470 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 6,089 | 3,133 | ||||||
Stock-based compensation expense | 7,592 | 4,724 | ||||||
Deferred tax | (125 | ) | — | |||||
Change in fair value of preferred stock warrant liability | 82 | 488 | ||||||
Other | 251 | 182 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (6,754 | ) | (3,165 | ) | ||||
Prepaid expenses and other assets | (1,443 | ) | (338 | ) | ||||
Accounts payable | (777 | ) | 821 | |||||
Accrued compensation and benefits and other liabilities | 2,936 | 1,170 | ||||||
Deferred revenue | 13,273 | 4,402 | ||||||
Deferred rent | 771 | 1,324 | ||||||
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Net cash used in operating activities: | (13,429 | ) | (17,729 | ) | ||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment | (10,628 | ) | (8,326 | ) | ||||
Cash paid for the acquisition of Few Ducks, S.L., net of cash acquired | (2,262 | ) | — | |||||
Increase in restricted cash | (25 | ) | (1,268 | ) | ||||
Purchases of short-term investments | (37,189 | ) | — | |||||
Capitalized software development costs | (6,667 | ) | (3,476 | ) | ||||
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Net cash used in investing activities | (56,771 | ) | (13,070 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from issuances of preferred stock, net of issuance costs | 97,243 | — | ||||||
Proceeds from initial public offering, net of issuance costs | 120,601 | — | ||||||
Principal payments on debt | (271 | ) | — | |||||
Proceeds from issuance of common stock | 914 | 201 | ||||||
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Net cash provided by financing activities | 218,487 | 201 | ||||||
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Net increase (decrease) in cash and cash equivalents | 148,287 | (30,598 | ) | |||||
Cash and cash equivalents, beginning of period | 19,453 | 57,099 | ||||||
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Cash and cash equivalents, end of period | $ | 167,740 | $ | 26,501 | ||||
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Reconciliation from GAAP to Non-GAAP Results
(In thousands, except per share data; unaudited)
| Three Months Ended, | Nine Months Ended, | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
Reconciliation of gross profit and gross margin: | ||||||||||||||||
GAAP gross profit | $ | 23,089 | $ | 14,250 | $ | 62,002 | $ | 35,929 | ||||||||
Plus: Stock-based compensation | 166 | 43 | 359 | 101 | ||||||||||||
Plus: Amortization of purchased intangibles | 198 | — | 198 | — | ||||||||||||
Plus: Amortization of stock-based compensation capitalized in software development costs | 51 | 14 | 113 | 32 | ||||||||||||
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Non-GAAP gross profit | $ | 23,504 | $ | 14,307 | $ | 62,672 | $ | 36,062 | ||||||||
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Reconciliation of operating expenses: | ||||||||||||||||
GAAP research and development | $ | 6,410 | $ | 4,478 | $ | 16,659 | $ | 12,212 | ||||||||
Less: Stock-based compensation | (721 | ) | (206 | ) | (1,178 | ) | (1,194 | ) | ||||||||
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Non-GAAP research and development | $ | 5,689 | $ | 4,272 | $ | 15,481 | $ | 11,018 | ||||||||
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GAAP sales and marketing | $ | 25,460 | $ | 17,084 | $ | 63,094 | $ | 42,091 | ||||||||
Less: Stock-based compensation | (1,474 | ) | (609 | ) | (3,378 | ) | (999 | ) | ||||||||
Less: Amortization of purchased intangibles | (12 | ) | — | (12 | ) | — | ||||||||||
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Non-GAAP sales and marketing | $ | 23,974 | $ | 16,475 | $ | 59,704 | $ | 41,092 | ||||||||
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GAAP general and administrative | $ | 6,864 | $ | 4,396 | $ | 17,464 | $ | 11,557 | ||||||||
Less: Stock-based compensation | (1,065 | ) | (427 | ) | (2,677 | ) | (2,430 | ) | ||||||||
Less: Lawsuit litigation | (94 | ) | (1,865 | ) | (1,217 | ) | (3,686 | ) | ||||||||
Less: Amortization of purchased intangibles | (37 | ) | — | (37 | ) | — | ||||||||||
Less: Transaction costs related to acquisition | (71 | ) | — | (71 | ) | — | ||||||||||
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Non-GAAP general and administrative | $ | 5,597 | $ | 2,104 | $ | 13,462 | $ | 5,441 | ||||||||
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Reconciliation of operating loss and operating margin: | ||||||||||||||||
GAAP operating loss | $ | (15,645 | ) | $ | (11,708 | ) | $ | (35,215 | ) | $ | (29,931 | ) | ||||
Plus: Stock-based compensation | 3,426 | 1,285 | 7,592 | 4,724 | ||||||||||||
Plus: Lawsuit litigation | 94 | 1,865 | 1,217 | 3,686 | ||||||||||||
Plus: Amortization of purchased intangibles | 247 | — | 247 | — | ||||||||||||
Plus: Transaction costs related to acquisition | 71 | — | 71 | — | ||||||||||||
Plus: Amortization of stock-based compensation capitalized in software development costs | 51 | 14 | 113 | 32 | ||||||||||||
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Non-GAAP operating loss | $ | (11,756 | ) | $ | (8,544 | ) | $ | (25,975 | ) | $ | (21,489 | ) | ||||
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Reconciliation of net loss attributable to common stockholders: | ||||||||||||||||
GAAP net loss attributable to common stockholders | $ | (15,929 | ) | $ | (11,901 | ) | $ | (35,324 | ) | $ | (30,470 | ) | ||||
Plus: Stock-based compensation | 3,426 | 1,285 | 7,592 | 4,724 | ||||||||||||
Plus: Lawsuit litigation | 94 | 1,865 | 1,217 | 3,686 | ||||||||||||
Plus: Amortization of purchased intangibles | 247 | — | 247 | — | ||||||||||||
Plus: Transaction costs related to acquisition | 71 | — | 71 | — | ||||||||||||
Plus: Amortization of stock-based compensation capitalized in software development costs | 51 | 14 | 113 | 32 | ||||||||||||
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Non-GAAP net loss attributable to common stockholders | $ | (12,040 | ) | $ | (8,737 | ) | $ | (26,084 | ) | $ | (22,028 | ) | ||||
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Reconciliation of net loss per share attributable to common stockholders, basic and diluted: | ||||||||||||||||
GAAP net loss per share attributable to common stockholders, basic and diluted | $ | (0.70 | ) | $ | (0.76 | ) | $ | (1.94 | ) | $ | (1.96 | ) | ||||
Non-GAAP adjustments to net loss | 0.17 | 0.20 | 0.51 | 0.54 | ||||||||||||
Non-GAAP adjustment to weighted-average shares used to compute net loss per share | 0.25 | 0.33 | 0.80 | 0.84 | ||||||||||||
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Non-GAAP net loss per share attributable to common stockholders, basic and diluted | (0.28 | ) | (0.23 | ) | (0.63 | ) | (0.58 | ) | ||||||||
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Reconciliation of weighted-average shares used to compute net loss per share attributable to common stockholders: | ||||||||||||||||
GAAP weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted | ||||||||||||||||
Conversion of preferred stock | 22,847 | 15,626 | 18,182 | 15,561 | ||||||||||||
Non-GAAP weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted | 19,476 | 22,323 | 23,076 | 22,323 | ||||||||||||
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| 42,323 | 37,949 | 41,258 | 37,884 | |||||||||||||
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