Gross Margin % is calculated as gross profit divided by its revenue. New Relic's Gross Profit for the
three
months ended in Sep. 2023 was $190.0 Mil. New Relic's Revenue for the
three
months ended in Sep. 2023 was $242.8 Mil. Therefore, New Relic's Gross Margin % for the quarter that ended in Sep. 2023 was 78.29%.
Warning Sign:
New Relic Inc gross margin has been in long-term decline. The average rate of decline per year is -3.8%.
The historical rank and industry rank for New Relic's Gross Margin % or its related term are showing as below:
NEWR'
s Gross Margin % Range Over the Past 10 Years
Min: 67.37 Med: 80.64 Max: 83.85
Current: 76.69
During the past 12 years, the highestGross Margin % of New Relic was 83.85%. The lowest was 67.37%. And the median was 80.64%.
NEWR's Gross Margin % is not ranked
in the Software industry.
Industry Median: 41.74
vs NEWR: 76.69
New Relic had a gross margin of 78.29% for the quarter that ended in Sep. 2023 => Durable competitive advantage
The 5-Year average Growth Rate of Gross Margin for New Relic was -3.80% per year.
New Relic Gross Margin % Historical Data
The historical data trend for New Relic's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of New Relic's Gross Margin %
For the Software - Application subindustry, New Relic's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
New Relic's Gross Margin % Distribution in the Software Industry
For the Software industry and Technology sector, New Relic's Gross Margin % distribution charts can be found below:
* The bar in red indicates where New Relic's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
New Relic (NYSE:NEWR) Gross Margin % Explanation
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
New Relic had a gross margin of 78.29% for the quarter that ended in Sep. 2023 => Durable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
New Relic Gross Margin % Related Terms
Thank you for viewing the detailed overview of New Relic's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.
New Relic Inc is a provider of software analytics solutions for organizations to collect, store, and analyze massive amounts of software data in real-time. The firm's flagship New Relic Software Analytics Cloud is made up of a suite of products, a Big Data database, and an open platform. Its solutions include diagnostics, reporting and alerting, transaction monitoring, and performance monitoring capabilities. The firm generates revenue from subscription-based arrangements for software offerings, typically for a year. A majority of the firm's revenue is generated in the United States, and the rest from Europe, the Middle East, and Africa; the Asia-Pacific; and other regions.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
Portfolio Contest
NEWR has been successfully added to your 