New Relic (NEWR) 5 Aug 222023 Q1 Earnings call transcript

Good afternoon. Thank you for attending today's New Relic First Quarter Fiscal 2023 Financial Results Conference Call. My name is Francis, and I'll be your moderator today. All lines will be muted during the presentation portion of the call within opportunity for questions and answer at the end. [Operator Instructions] I would now like to pass the conference over to our host, Peter Goldmacher, Vice President of Investor Relations.

for QX thanks call. 'XX and everyone, joining fiscal our earnings Hi, chance together published Investor hope ago a our presentation everyone review website had We on hour Relations a press today's with earnings about an has to release. it and begin will from comments we'll prepared and your questions. Bill line up the with for Mark, then call Today's and open .

as results based During outlook and business differ this about on predictions to including our our a call, Actual we statements, will of and due materially expectations and, risks and to the of SEC. which we measures. could make our in most we today. with forward-looking certain filed XX-K number uncertainties Also, XX-Q including upcoming discuss risk this call, financial will factors and during the recent non-GAAP be strategies,

being Investor comparable results. those like to in measures over this in are And I'd not a We to financial that, webcast there its earnings These substitute directly a Bill. with And GAAP to be most from few the for available non-GAAP GAAP and entirety Relations release. reconciled an our finally, intended turn replay measures be our in have our call is hours. will to audio website, it

fiscal an to and we're over to update afternoon, played to what Peter, the earnings business call. first out, Thanks for update our and us for I'd the financials. including trends, doing you joining year on our you, before Thank good of Mark quarter like QX everyone. CRR for FY 'XX accelerate on the handing how

drive to mid-XXs number third, platform FY growth to adoption our profitability non-GAAP base. non-GAAP priorities: entered and first, fourth, As our achieve across increased of customers; four 'XX; revenue the with modest margins improve second, we key and paying the a reminder, gross rates; customer new accelerate market FY 'XX exiting return

year-over-year to revenue is growth of $XXX.X million, quarter first 'XX priorities. XX% QX against representing guidance FY the of by high is our end of start million. top a our off and strong beating Our each $X.X

is and points a XX.X% improvement QX, make margin Our to XX% which QX solid target than the QX X gross our plan we year. toward throughout at to versus non-GAAP continue and XX.X%, progress higher than was our more

operating million, beating our loss. non-GAAP was to $XX loss $XX QX million Our of $XX.X guidance million

are we we recognize We driving reflect cost growth. Additionally, both. structure. business, improve taking and in now cost continued positive $X the million. not investment our to versus $XX of guidance view to expect full of generate choice to revising 'XX discipline as profitability today accelerate FY a actions to importance our will year operating our are profit million non-GAAP We we our pursue do and can We to

our churn. not of we uncertainty we in in net I'm the also and the on of seen QX, pleased across Total of of that really compared added accounts of fiscal are cumulative customers net account net a priority active nearly XXX it. we've third our preceding XXX last paying customer three churn growth. quarters over increase accelerated X,XXX to up the the control. economic the our year to actions accounts future what holds. base yet within climate these believe macro have current Additionally, business recognize meaningful confident from begun while the achieve this We've environment results, fully we advantage can delivering our from impact steps of regardless We're us

revenue line as over with number Account to steadily forecast. last Day had a product-led July the at inside a number internal has churn encouraging sales in since and few greater accounts see May, new program. grew a deals been It's that QX our than QX funnel continued slipped due our declining with increase $XXX,XXX in XX, we growth year. to additions double was and growth the of also platform number active QX shared was the we slight our acceleration in that is improvements of result Analyst the into and by customer churn As X%, introducing of our in

more as are they're customers, levels higher adding graduating not So but of spend well. paying to only we faster

Our drive adoption final and base. our across fourth customer priority to is platform

world-class to McDonald's, quarter, few, Foot continue see and We stack, such for the it's greater for success New name from unlocking many a their just enthusiasm Libre propelling Last and future support were keynote steady transformations for able and who We're spotlight me or progress. and in the Relic's productivity their partners. platform and grateful to Locker, we digital Mercado how shared customer to customers stories teams. their including All-in-One engineering enterprise joined Verizon,

are success track adoption, there discuss. we metrics two in driving to platform primary As

customers percentage CRR. of the run multiple and or capabilities; First, consumption rate second, utilizing our

XX% On in using capability browser customers top of to the as in the first we metric usage, of our increased capabilities, platform saw from number the adoption APM, quarter. infrastructure, XX% and QX logs grew X

get. the platform, introducing our product attractiveness metric, product consumption consumption increases we you does rate platform our of platform and to The the the they beyond or our of quarter, Last adopt, traditional of our regarding supplemented platform model. more CRR. adopt their in discussion APM growth consumption more speaks run customers a of adoption our offerings As strength all-in-one by generally The the customers value revenue. the more as our to new

revenue track a at grew what over We grew and May and growth CRR with takes expect closely time. basis we a on a daily. it June, reminder, that pace. strong and account customer also slower something real-time price Monthly it program, was As per into annualized average measure of to and a in usage CRR business correlate buying amount for would is the April

to CRR July. At first positive from the a monthly June tells average growth level, in Importantly, story. high CRR reaccelerated a quarter

transition think strength opportunity our to also in business. However, that and our of as complex areas tells consumption emerged we CRR a more that a model surface, places underneath we mature the shows in story of have

see predictable growth. healthy commitment, is For run below customers of rate whose and XXX% their we

counterintuitive exceeds consumption our from rate they New budgeted run commitment, their their their product customers are customers market seem might expectations. starting consumption. as to and their these have when to Relic relative of the value XXX% evidence and garnered most differ begins This materially from fit However, for moderate best spend

of and In includes some customers. most fact, our passionate group largest this

Our of customers budget renewals. partnering this opportunity limited as and we is expand consumption an on In basis. with Relic on on QX, action with their support a dynamic early increased with number customers New ongoing started taking to

you to renewed and Salesforce XXXX back sales New $XX,XXX. monitor Relic new at their Cloud, me pilot. their initial few our customer Curry's a customer partner highlights and end. chosen replatformed Commerce in the was website strategic December base front share end Let flat XXXX of with from since as a force plc, to This

infrastructure, uses commitment on and now agreed rate. one they where on major driven an addition, expanding off their had $XXX,XXX they're APM, as for moving legacy public IBM their chose cover customer hyperscale and our in their more uplift current to In of This XX a and spanning their events traces run competitors times in observability, logs, usage their Relic environment, to mainframes standard environments than $XXX,XXX, hybrid and applications New consumption of metrics, to healthy to early their cloud cloud. renewal the QX

in and take Another $XXX,XXX AWS decided agreement uplift but our to with their offering legacy advantage originally Last ability customer the deal contracts. multiyear -- AWS early signed above to last of agreed for our marketplace, through strategic before consumption rate. three-year This renew increased July. XXX,XXX, our customer have demonstrates in early a consumption consumption of platform ramped XX% already example $XXX,XXX we XXXX XXX,XXX. March the had and drive at to renewal to high announced an This with of customer

that value reluctant projects renew prior convert sales a to improve and demonstrated agreement, uplift run the they $XXX,XXX, to the were customer. The peaked they the contract, $X services in with plan tool million, plan training full partnership initially of rate. enablement. in alert although the platform recent advance drive XX% advantages and long-term to technical our platform, consumption Given peak agreed agreement, quarters traced an includes their at their two their quality and over rate Their of teams under which and was and consolidation, run but a at

are ready pilot begun across for QX. we've a and minute out renewal at this campaign executing picture. to step many early already a in more scale look customers, big and scaled We the In back now closing, let's

accounts last with customers the inverted consistent we quarters. year, growth, customer paid growth doubling decline year. last the year-over-year Over have nearly the new accelerated last rate paid in the four the for multiyear revenue We've in

are, in unexpectedly point this customers ago market accounts net relative a before, so than are are that to Product strong faster plan. XXX% from also rate at original the We to XXX% has an consumption of revenue reaccelerated fit high and patterns retention growing consuming quarter. low X quarters just large now many fact, and their

to team now with help we're tackle renewals. with ready to right budget in price early incentives of while additional contracts customers their Something our with top place with the agreements additional

overall metrics. budgets inside on with growing than to some annual to XX this engagement incentives we Best stronger of since levers well, of in a had Salesforce, the wonder renewals. and Relics much Relic with Millennials. now financial next. I'm early and our and additional nonfinancial inside now to proud head of to employee see thousands of aligned into performing possible. also ago. results leading more. so profitability for points unlock every revenue go-to-market clear our this year customers of the AWS, just this engagement progress survey tenure opportunity a as several companies from negotiation executives recently new best Microsoft committed stronger recognized to onboarding we're team I with employee another and And non-GAAP company We’re our help as like we a who the proud year in their We're a conversations jumped Forbes finally, No including New accelerate was quarter at better, day as we're the make milestone, my We're and additions very profitable Workplaces were business I non-GAAP last recruiting company April. work the

hand the I it over provide on search Mark, CFO. next an Before to update want our to for I

the will foundation as and and his public He like leader. search and This through and since fresh a stint Relic's to next that faces himself companies know, CFO retirement of he led himself and his profitability. Relic brings experience focus Dave a New name public a and accountability IPO. career conducting who am Barter. is since worked companies, be New quarter, Microsoft, his the a challenges where finance driving as Dave I third brings GE company of with of seen his and been found and at have to CFO, have I'm integrity, leading and many finance the mastered multiple a proven last successful growth the around clarity his has fundamentals and time. the one decisiveness on business he led including Dave spoken has perspective, holds organizations you we world-class that many under of highly Dave speaks established announce and against. As business we've announced and pleased Mark at teams teams he and

now, We August Dave to Dave are XX. the as a assist the long after transition Mark to and he to generously shareholder needed smooth transition. has will for on CFO as officially ensure onboarding offered meeting role

for expression to close to of will self in and him this a Relic, want over shareholders customers many I gratitude And call, years his his to with with of earnings be service our New future last Mark. and wish endeavors. you, my that, best the Given hard him Mark's to remarks

I'd provide evening our XQ call. quarter and Thanks, guidance. update as we cover the Bill, to our year financial recap. and everyone some and it, good commentary the X full quarter macro provide briefly with good see like results, topics: I'll start on afternoon on first recap to the environment guidance first

the rate end as slowed loss a April, $XXX reported end QX growth exit on improvement, guidance and set gross for call. $XX the the margins as in strong in we loss $XX and in you of XQ 'XX track and done. QX, up are We've million, Non-GAAP net $XX adopt $X.XX. about $X.XX incremental start the run spend of of for last consumption June. from of Bill I'd May. a customers with Non-GAAP platform. the shared beating For minutes representing provided macro the in provided the were year-over-year Non-GAAP some price We to the loss XQ margins the guidance we few a the us on May environment. better in million, mid-XX% to Deals XX% the the of fiscal quarterly in off a $X.XX, above to mentioned, was sharing operations between a latter high consumption got July revenue But our for on call XXX with added and growth quarter, EPS on more high the their of was we like million continue than expectations thoughts our part quarter. year between of guidance range. introduced of with to XX.X%, which gross from line is customers CR data effectively we we loss and getting Growth increase. million. keeps still grow of in in earnings non-GAAP

will the renewal will but upon highlighted from customers. in each FutureStack quarter. price conference, near-term for Thus, most increase As our the modest, will gains grow be take effect this

close the going with margin We a tougher, which are sales aren't climate, to macro improve keeping business little on to us the we confuse execution. opportunities a the for eye seems but on

Just this. to fine on put a point

environment gone As when budgeting tends which This two amount, issues our XX% artificially do to a consumption actual well. indeed our If go-to-market as for their motion years the . the be with get Bill continue the two balancing with transformation result, to more budgets. a we better range, are over revenue. our internal exceeds impacts to for comments, creates past the And his their more as CRR cause by shared them inevitably believe it with macro commit consumption to have through we job and material does challenging, increasing on serve consumption refine internal constrain commitments we tethered. customers' to them in in align the growth will drive a us you

a help should and consolidation is approach observability well to platform-based method in spend. for to our compete true opportunities, reduce vendor tried First, us which customers

on the better our we see profitability Second, been our execution non-GAAP our into direct they focus opportunity as consumption a to as to growth to value-based two will years operating layer the the well pricing has their of value non-GAAP reaccelerating line, Changing The last now drive greater adopt bottom more customers model focus but improve path our on for our on spend. finally, focus customers as taking And allows model in profitability. refine a growth, that and over offers control gears plan. our we platform. are activities

to As our year from I'll growth. continue to reaccelerate to line the we even a profit are in invest moment, we year, non-GAAP as share non-GAAP looking adjusted to of now top an improve line last million business close full in to year modest loss $XX this bottom

financial to Before few that a sharing our the share guidance, thoughts our inform like on assumptions outlook. I'd

continues environment CRR put drive to Bill the growth For we're the QX, to overall assuming right we is dynamics efforts are burn expense control. climate assuming take go-to-market macro given Also, on hold. while early modest current our renewals described focus

will renewal CRR. Our the an as guidance reflects as following: early our consumption increase full unlock well commitments efforts in believe We year

expect the We new to accelerate and will bring continue customers platform. to account and growth revenue

to customers platform. expect We continue more adopt to capabilities to the

We churn the which the year. price in we've begun are and lower for renew. of forecasting customers to in And as QX increase will remainder feather data

on the Now numbers. to

of and million year-over-year I $XXX year in respectively. year of For that a variance noted revenue compare. between factors XX% XXXX, Also, everyone QX the had is growth and between and XX%, revenue the making model the sure past. uncertainty in QX, change, wider the guidance in business million, the expect fiscal both This growth our $XXX discussed is we positive you've our second of than size by last we quarter representing earlier. that due a driven and remind range I'm to tough

is As to mentioned think I environment assume near this it previously, we term. improves time at don't prudent the

a expect $X between We million from loss non-GAAP million. $X operations and of

per attributable and loss a We diluted New Relic to non-GAAP net between $X.XX share expect $X.XX.

year representing $XXX a growth revenue expect and between full we respectively. of $XXX XX%, 'XX, the million between For and million, fiscal XX% year-over-year

million. million share be path quarter profitable We basis exiting we'd we non-GAAP on be the $XX and $X non-GAAP expect to a year. that New per profitable 'XX. modestly on now We $X.XX earnings And non-GAAP attributable basis set net full $X.XX. and last to see diluted fiscal expect between income Relic the We a non-GAAP between expectation a for

our Given the climate, best own feel to the growth. we we can such fund that is strategy operate

New the Relic, just line to up that, take also forward with look meet extend final welcome to And I And on I've to Lastly, earnings want open I everyone working along for to transition. with him my with call a as fortune want had the a to the is moment Q&A. Dave. warm good I operator, thank way. please to this the

ahead. question Instructions] from Crane comes with [Operator Our first go Kingsley Canaccord. Please

So for between Bill, and now there's think investors, it We debate models. right of a be consumption lot helpful. models could for subscription

decision to is you the and its if choice the year Relic customers? right New now? And If for why the a you go back, same model would for then were so, make consumption

for the feel customers I business and a thanks We this helps it us would our between in actually alignment same around of like Kingsley, company. model. question. decision absolutely we're our think macro we the And environment it's great interest make in.

as this Mark As market. really described, vibrant a see we end

adoption business. sure assets to are you Customers surveys, transformation at we're If the what our digital importance their need at. excellent drivers digital and that really of that's highlight to look main cloud make and performing, CIO the available they and of continue are

else as and developers of engineers, our while still created see the spend model, model point the on continue competitive and that more won't of the customers start of replacements to great our is pricing affordably consume. the puts product standardizing believe really our also we business more because opportunity our customers best customers at finally, Our providers between value-based the alignment be platform. the as And not they sophisticated I and successful, majority And with us anyone greenfield, than market. consolidating more hands is in is the in really we're technology consumption said, helping we our if

bring they're their help us. spend and So more to to motivated to motivated we're them of

getting I So it. have, success make our the doubling we result rate I we're seen think transition only in the that a And absolutely and revenue growth would as we've of started.

alignment Customer of lot makes a sense.

Mark, to Relic. be at a such of. lot proud for New Certainly, you great So a run had

in look goal by guide. Can we As forward, to structure? on you significant improvement the improvement implied cost be is ongoing profitability revenue acceleration? of then accomplished these an with any the offer how the can specifics And

cost look where year. And number of quite to those in the beat year do Obviously, we bit. are we savings areas. bottom be that past will point to by quarter. at the back margin, we we When gross our those QX, continue things a coming the for we guide through to . line profitable good rest this the showed -- a expect And of improvement

said We we guided expect the in exiting mid-XXs. and year the we've to to continue, that

So that gives us OpEx a continued improvement, hiring. to due lower

to are hire. We continuing

We continue I selective more and people. being we're say to would invest our hiring but around

X our ago is be getting fiscal our yield with PLG spend thought than we then think bit And and marketing, hiring in we and little months that more so efficient when go-to-market. probably look I slower And a will 'XX. to sales at X had

take go-to-market And we hold throughout rest of to the year. efficiencies do so to the expect that continue -- overall,

these good we really not like return. So are savings seeing areas, some feel we results, we the of other And we are where then good good investing places we're more in getting as a and getting productivity efficiency. in and the cost can savings by achieve

like still savings do feel we can So achieve accelerate these while we growth.

with from question Angie Stanley. next comes Morgan Please Our proceed. Ng

for Sanjit guys and contribution have on my June data speaking effect guide? have Singh for 'XX the I'm data question to how the pricing? higher customers what took increase one revenue is And that year just the does fiscal price X, is pricing who analyst and you responded for in

June quarter. of effective that as Thanks, We price just did the conference Angie. month customers well. as so in was last FutureStack noted, the notify at of the increase X, advance Yes, you the

upon noted, As revenue only price takes most the Mark our increase customer effect renewals. for of

QX the just performed month for actually The nicely. last that So -- renewals it very captured. was

majority the at data change. vast accepted of fact, increase price price our standard for In the $X.XX customers the level our

well. Plus at We Data that time also and from healthy customers weeks introduced saw several same in last few on the of a the uptake as that offering quarter

it's early we're while excited by opportunity. So there, days that

how place. it In noted as feathered the renewals as it throughout before, in revenues, year terms will of impacts take we've be

the the of in we'll impacts year. the be frame, majority And the effects but FY 'XX so throughout cumulative felt will see time

question comes with Please next from Our Cowen. Wood proceed. Derrick

full Derrick. rev the for components in you maybe of and the on have laid understand Andrew can biggest rank you you growth help those us drivers you out on It's Nice just visibility year there? Mark, just into quarter. maybe guide, the the outlined order that

Sure.

just I them in or went I'll them through when go in read expressed which I So through, order them.

renewal efforts biggest with budget consumption. the on one is issue too commitment the out of early think that far that and consumption, there's Where and mentioned. pressure inevitable We're consumption. line, gets seeing an Bill I

our consumption budget rates. and are to to their best accelerate they these sure have so enough continue to that we make go customers want And

rolling out on. the that's Bill the to seeing and positive mentioned gave entire from that. that We're our So results base. we're pilot, customer now working to examples. go-to-market something org some We're it

think And be terms course the so our results. going quarters, the get we the we think overall three to on over pretty But in to -- over time of to next hold. it's impact take of going that's meaningful

been to and growth so been past growing. to continue improve. account or expect we We've -- quarter, this added that's XXX We

It course And do that adoption to that was the growth X.X%. we more an quarters. in continue. see a from as up the was in slipped just course, handful expressed mentioned renewals of then going renewals was up. few our that over we picked on more in and related now would Bill closed In capabilities. That happen. rates to the July. an been to of was that expect of of renewal has continue improvement have That We have QX. QX, been We Had couple churn quarter, next the or expect over that we, closed. improvement They it to to they churn X% continued it expect June

the QX numbers. about have over to We'll feel And the the to rest modest. rest the the fiscal through improve 'XX. get greater a little our good ability in the bit rest data churn then and the continue the as in in that we of rolled QX. So effectively we mentioned we impact of customers out, more Virtually increase And get question, year. of price the just impact last the and year, no very then a of which as hit more have renewals will course over finally,

to into Is the summer there guidance? any follow-up And any consumption factored that? there is seasonality

any No. last sort When slowdown. not to expect visibility of you see seasonality last We our we year. don't summer quarter, look we CRR, gave did at which

diverse generally base up, some enough go down Our that is are customer continues. and where some

the at the the seasonal that the the a down as slowdown the of end sort over a one at the think bit of end I only economy at year of shuts tail is really of end kind of year, December. overall modest we see

continuing has that. this throughout just growth and data users Or maybe more of maybe user talk some year? And -- adoption consumption color about just to for seeing to the see led has that that Bill, on yet? shed you're And do led you the

Yes.

expand increase our easier offering believe time. is at leads our makes customers data talked increase a very for to As strategy at pricing clear. to to more data we costs and long-term in before, that over low cover with estate it the a to of their about platform That we've lower users be in incremental price

out it play So expect I years. to over multiple

see As quarter, we growth quarter. in for healthy this the very actually user did

exceeding in I down or XX-XX saw were consumption we Day they users data. the spend managing mentioned QX think following commitments, about that where call Investor and customers we

data, more user happening, and fairly continued saw on little actually was a growth where quarter, was This the we it strong. that

comes with Capital ahead. Our Yun Please Markets. next from question Kim go Loop

morning, commented areas that some First, one are certain who slowdown cost was being Bill, the peers in your people of where in conscious. there

think within ingestion that the log all? of area softness of specifically product company any trend your indicated seeing I Are be you conscious. they try or the cost that portfolio to at of

stated see don't really see or those a customers we've we -- consumption earlier to excess far is in the capability is in the consumption specific commitments. trends any prepared run we No, whose their moderated remarks, usage type. isolated to rate platform previous data We as particular -- of

So of helping Otherwise, budget. of is shore our additional consumption platform that's macro capability. product focused where with in specific we're that impact particular whatever up terms or any customers situation the not to

are And running rate customers consumption a just whose you is then hypothetical question. run hard. Obviously, approaching proactively

of the I keeping think until you XXX% end you you contract? Are are Or the same increase price mentioned run rate. the price introducing the at that time?

Yes.

up price are part that as and early the discussion points as the new well of renewal, date. go for we As quantities contract

transition into bringing customers are understand point. new price and the we that So helping the negotiation

or the year you. expect than loaded quarter the Obviously, seasonality renewals I'm kind with cash -- whether half? balanced cash flow quarterly sorry, of last renewals, your do back-end focus throughout off experience early more you Bill finishing then, a flow. in on do you like with And to the It the working of Mark, you're with towards the spectacular great a be second looks some earlier year,

renewal. tough or bit are paying that for managing upfront renewal it's customers entire to think whether they're say. It the how depends on I a

dates cash easier with some being For at the renewal budget outlay to big it's still customers, and their renewal time.

that flow early renewals. how But on we be seen I based plays changed dramatically are the remains looking at think to So cash not out. that

Michael with proceed. Our Please next Turits Markets. question KeyBanc comes from Capital

same. higher? of if you I go do per Eric -- is hot, recall get I to kind consistently higher Because have are if Michael. the commit for believe with customers renewal the on the Heath running levels correctly, over because to time Bill, kind commitment necessarily the level what mean, of it to the This at is they I intended that is of those for customer price a gig isn't on

over. penalty like it's for So going not a

So might have excess get start drive where be and they do it actually what higher in to is you to contract? and of to where end those the of the they renewals by

good Yes, question.

remember to with with value. underlaid model, thing it's consumption is First the all

So our SLAs, we of helping of improved we the consumption accelerated help business. of we're customers is . Most cloud they're go -- and for the do them their first whether migration, innovation, the value thing haven't that's out metrics et ROI progress into agreed understand we our that the getting cetera. them customers, to drive on to for

And that to and so pretty in companies of their And to we're help features have several value improvements the for about to that like customers. discussion consumption Snowflake, consumption we programs. unlocking available particular, AWS, been quarter, leading advantage some other able Mongo, light, of talk rates. We've buying this our then we take Azure, bring exciting

our it example, roll contract to using of any that shelfware buying commitments additional the to contract. For budget, early it new top of year customers off year not That gives with them consumption. at risk well additional the they over by all an time up ability the don't additional the for the end because renew period, use for a at support get if they lot in unused to programs as one any contract end at to budget of up putting security they're as for

data our tiered and that customers, growth. point pricing, allows which reach have unlocked both a for price and also We us additional incentivizes user pricing them to for

volume, unlock more certain imagine, budget price users current for they're the example, data and at additional beyond you them, levels. they with So and paying for secure data. can We a but if add that users then currently savings

just then on of to macro, some And the trying comments. the square I'm

note we And granted July. deals talked and So noticed and closed have June you in consumption some they some did in of kind moderated about slip May customers consumption. throttling also and

So us and phenomenon just [Indiscernible] some help isolated of you macro could incidents? a kind

-- you there. Sorry, broke the question up

the were . hear You didn't question. I the Could it? about macro asking quite repeat and you

it out. I throttling just and consumption slip Yes. they're in because May the There deals, customers kind June of slowdown is the -- running of the consumption in comments some the and mean,

of you're kind those square kind and macro comments necessarily these just not comments. So of despite why seeing

Yes.

customer that's in where very of customer's their is consumption into far consumption, dramatic most excess is in have and of a the support good commitment. visibility terms It where happening. In we cases

growth For customers their they're CRR actually very of platform. healthy run at and below to the XXX%, rate accelerate are a who adoption continuing is

increases when So to we CRR you slower And then quarter, although the months mark July. and the it than last the in again quarter. see we a started higher reaccelerated aggregate, in ended two those decreases at of leading for

earlier, happens occasionally of PO out Mark days few the few come the record days But of few a as under contracts terms And quarter. July. That first have actually and time have that to In the the shared, did in signed the customers would in deals they pressure we sent. deals churn. slipped land get past those come achieved as

So feel our in churn to following continue we the quarters. good about decrease ability to

Our comes Cikos question next proceed. from Mike Please Needham. with

the I to respect have right, strong Eric's back if was want guys of to I it With off the questions. start quarter. so that a CRR April you trends had And discussed. out did

were July. shifts June of in can in trying much me if And or customers? in is month-by-month moderation you a some on and and then then basis? April? seeing I'm exhibiting Like get the think we're strength in June to guys want just May help May how your You the about a now, at recovery I those at that the saw of in there it from looking consumption understand that And magnitude sense, those was to a a when moderation you July I'm trends levels

Yes.

what the -- to July get things we are variable. our recovery saw a for cautious May, These it in with up the our June nice guidance it with million too fine term. or $X we're analysis $X because bump expect April. the being for there But the we But here or to -- we of level next about numbers. -- near that not -- from the was -- don't was was we it So want

think going budgets. I continue is be a environment, given the to focus to there on

-- to increase to at the frame. CRR time are So not saw go to we we we're March and CRR up the expecting expecting April in the levels

seeing you? if about the growth look guidance. million the a difficult the baking help outperformance understand not $X.X at guidance the the stronger in I of of high as maintained guess, half in, focus kudos are impacting it, we're versus year in I great. just thing If the also is, is it wanted year-over-year what me macro the guidance what's call behind coming on north the second. That's second despite And that maintained you . XQ revenue in, back becoming more comparisons And your guidance QX year, for then I And guys then in of on like looks the for could well. to you end

as any look we of there year. remainder as the So far think be our on color -- the would beneficial

think of our we're more when we moderation by QX, year's exceeds compare because is that's the that And point. XXX%, this last the consumption. I consumption. given for seeing commit for put on And talked the at QX. consumption greater a near quarter that dynamics customers But toughest for than term, the an Yes, issue to focus about starts

So that. But about up We we pilots. there. really working the show revenue to the that's in we're take numbers. going getting We're talked time to think on

or that minimal in in in we not thinking so And pretty QX change modest is an impact a have macro environment we're but and we're to that will continue. going to assuming QX. in have Also, QX expect so any impact QX, impact the

guide. to our QX us So leads that

out the get sort to For point frame. time, in mentioned the of we're other it And way things then those we'll we're of implementing chunk the renewal continue of -- really year, seeing on the data happen. increase that it's in time renewals September at next come that price just will the earlier because big I

will the And But impact or that months an QX. in will Q, then impact. be QX, this then we'll quarter So get of but have first X pretty impact it revenue. thereabouts we'll a the renewals quarter, this one an have in will get QX, be modest impact renewal the least in at the December renewals

that help of as go cumulative effect will the throughout greater will we that as year. So The impact well. be

of increased think course out that the we So -- when good year, expect revenue we we look at there's the for improved and assumptions. we do over these expect performance reason or

these it your we curious, really us you year, to think guys shelfing can And of you we're range the about question, If of we profitability there out looking guidance coming fact the and here? could. that if looking the were Is OpEx, for help your it that -- are happy with you've Like the to just about shake maintained through see upgrade guidance your just up the quarter? cost when goal the Is for where are we last where come revenue on guide gross I to tight I'm more working savings one non-GAAP just headcount? be profitability thinking from out does But model the Are revenue should I'm And about at thinking a currently. structure dramatically today. and in put versus but the majority obviously, where with that XQ full jumping how year, negotiating the that vendors? now margins, projects? relatively depending but .

line continue the in those bottom a as noted year. expect interest, and significant we've to XQ Yes, we throughout saw

low I our to and all savings least the leaders And on Lower projects other In increase with majority product-led new strategic quarter, board, were cost growth across customer marketing expect with more market, continue. efficient yields sales our our growth really efficiency. of and the Like the that our to prioritizing said, help terms focusing go-to OpEx first of of acquisition. more is to get accelerate cost the really our the due continuing at we and on gross and savings, end that better hiring. are In margin.

can we're across and board expect the and we a continue, run how we efficient company. be for to those more profitable So looking

Jaluria Our RBC go Capital next Please Rishi ahead. question with comes Markets. from

This is Rishi Jaluria. Poland Richard on for

the commentary the just around should follow-up, But change any around of that? extra X appreciate lower for June pricing of did you and and pricing in I ahead that a the just renew in any So terms just I to of cadence and or impact impact -- how kind as color anything May the to see an line. looking in that on there kind early in guess, of year of lock customers try change order price was revenue

people bring and like and not say, that couple at it speaking, I a it oh, got something of that had missed number then by material. but We in they wire their they and it do a is didn't significant that the renewed prefer it -- couple and not renewal of ordinary to to customers in days. all that. geez, was of early kind us all. it course. was Folks we the that But primarily see can get a at were Generally would June under

with XXX any expect normal? relationship And have that XXX continues in customer kind the per terms And sit in you tracked could Is at we of new then adds kind there's just the just if how looked that there? it of as the of to in June, new adds, net what and range. just to quarter pricing

And we're getting customer price steadily the We adding terms change value. with platform see in If churn. four those been quarters. again, the change. We've anything, bring new helping any customers net for of the acquisition last numbers and not of did the customers at Yes. effective into are pay new more significant for

are this [Operator questions to further no pass I'll Instructions] at waiting time, over team so any conference management the back There remarks. for the

time Thank you right. All the results with next forward and time. We're today. your you see look quarter, everyone, you, connecting pleased the for throughout with quarter to and

results Relic financial quarter Thank you conference the New call. participation. XXXX for your fiscal concludes That first

lines. You may now your disconnect