cut its yearly revenue outlook on Monday and said two top executives had departed. The cloud company, whose software helps website and app owners track the performance of their services, said on Monday that technology chief
and Chief Revenue Officer
have resigned. New Relic also cut its yearly revenue forecast to between $586 million and $593 million from its previous guidance of $600 million to $607 million. Shares of New Relic closed down 0.4%, paring a midday loss of 13%. The company’s stock is down roughly 28% this year and roughly 46% over the past 12 months.
The San Francisco-based company said one of its board members,
a former managing director at the private investment firm Allen & Co., will take over as president and the newly created position of chief operating officer on Oct. 1. He will continue to serve on the company’s board. Ms. Schultz and Mr. Gochee notified New Relic of their intent to resign last week, the company said in a Monday securities filing. New Relic founder and Chief Executive
said in a statement that he has confidence the management shake-up will improve the company’s execution. Shares of New Relic, which went public in 2014, fell sharply last month after the company reported disappointing sales for its fiscal first quarter that ended June 30 and posted weaker-than-expected guidance. DA Davidson analysts wrote in a research note that the executive resignations suggest the company’s product road map may be rockier than previously expected and more changes could be on the horizon. “Appointing a banker to the number two position at New Relic, especially given the confluence of factors weighing on shares, does suggest more broad changes coming, versus a traditional COO/President appointment, including the potential for investors to hear the phrase ‘review of strategic alternatives,’” the analysts said. “While the announcements certainly come as a surprise, we believe lowering guidance is the right move.” Wedbush analyst
said New Relic’s recent struggles are another example of a disappointing cloud company.
Inc. recently lowered its fiscal-year earnings outlook and
Inc. gave downbeat guidance in its latest quarter. “This follows [New Relic’s] ugly miss from early August due to weak execution accompanied [by] a large-scale reorganization of the sales force into regions and leadership changes in the product and sales groups,” Mr. Kulina said. Write to Patrick Thomas at Patrick.Thomas@wsj.com
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