Old Revenue Is New Again

New Relic’s (NEWR) YoY revenue growth of 17.8% in 2Q22 (Sep.) benefitted from $9.7m in revenue recognized from performance obligations satisfied in prior periods; without these benefits revenue growth may have only been 12.0%, a deceleration from the prior quarter (vs. an optical +680bps acceleration). The business model transition has turned Company’s free cash flow negative on a trailing twelvemonth (TTM) basis. The Company has also seen turnover in the CEO and COO positions. For these reasons we are adding NEWR to the Biggest Concerns list.