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, with an opportunity for questions- and- answers at the end. If you'd like to ask a question, please press star one on your telephone keypad. I would now like to pass the conference over to our host, Peter Goldmacher, Vice President of Investor Relations. Hi, everyone, and thanks for joining our Q1 fiscal 2023 earnings call. We published a presentation on our investor relations website about an hour ago and hope everyone has had a chance to review it together with today's earnings press release. Today's call will begin with prepared comments from Bill and Mark, and then we'll open up the line for your questions. During this call, we will make forward-looking statements, including about our business outlook and strategies, which we base on our predictions and expectations as of today. Actual results could differ materially due to a number of risks and uncertainties, including the risk factors in our most recent 10-K and upcoming 10-Q to be filed with the SEC. Also, during this call, we will discuss certain non-GAAP financial measures. We have reconciled those to the most directly comparable GAAP financial measures in our earnings release. These non-GAAP measures are not intended to be a substitute for our GAAP results. Finally, this call in its entirety is being webcast from our investor relations website, and an audio replay will be available there in a few hours. With that, I'd like to turn it over to Bill. Thank you, Peter, and good afternoon, everyone. Thanks for joining us for our Q1 FY 2023 earnings call. I'd like to update you on how our first quarter of the fiscal year played out, including CRR trends and what we're doing to accelerate the business before handing over to Mark for an update on the financials. As a reminder, we entered FY 2023 with four key priorities. First, return revenue to market growth rates. Second, improve our non-GAAP growth margins to the mid-70s and achieve modest non-GAAP profitability exiting FY 2023. Third, accelerate the number of new paying customers. Fourth, drive increased platform adoption across our customer base. Our first quarter of FY 2023 is off to a strong start against each of our top priorities. Q1 revenue is $216.5 million, representing 20% year-over-year growth and beating the high end of our guidance by $2.5 million. Our Q1 non-GAAP gross margin is 72.5%, a solid improvement versus Q4 at 71% and more than four points higher than our Q3, which was 68.2%, and we plan to continue to make progress toward our target throughout the year. Our Q1 non-GAAP operating loss was $17.2 million, beating our guidance of $23 million-$25 million loss. Additionally, we are revising our guidance today to reflect actions we are taking to improve our cost structure. We now expect to generate positive full year FY 2023 non-GAAP operating profit of $5 million-$10 million. We recognize the importance of driving profitability in our business, and we do not view cost discipline as a choice versus continued investment to accelerate our growth. We can and will pursue both. Additionally, while we have not yet seen meaningful impact from the macro environment in our business results, we recognize the uncertainty of the current economic climate and believe these steps advantage us regardless of what the future holds. We're confident we can achieve this from actions fully within our control. We've also begun delivering on our third priority of accelerated account growth. Total active customer accounts are up nearly 300 in Q1, net of churn, compared to a cumulative net increase of 700 accounts across the three fiscal quarters preceding it. I'm really pleased that we've added 1,000 paying customers to our base over the last year net of churn. As we shared at the Analyst Day in May, churn has been steadily declining since introducing the platform, and our Q1 churn number was 6%, a slight increase over Q4 as a result of a few deals that slipped into July and was in line with our internal forecast. Account growth acceleration is due to continued improvements in our product-led growth funnel and the new inside sales program. It's also encouraging to see that our number of active customer accounts with revenue greater than $100,000 grew by 38, double the number of additions we had in Q1 last year. Not only are we adding more paying customers, but they're graduating to higher levels of spend faster as well. Our fourth and final priority is to drive platform adoption across our customer base. We continue to see steady progress. Last quarter, we were able to spotlight many enterprise customer success stories at FutureStack, including McDonald's, Verizon, MercadoLibre, and Foot Locker, just to name a few, who joined me in the keynote and shared their enthusiasm for New Relic's all-in-one platform and how it's propelling their digital transformations and unlocking greater productivity for their engineering teams. We're grateful for the support from such world-class customers and partners. As we track success in driving platform adoption, there are two primary metrics to discuss. First, the percentage of customers utilizing multiple capabilities, and second, our consumption run rate or CRR. On the first metric of capability usage, we saw increased platform adoption in Q1 as the number of customers using our top four capabilities, APM, infrastructure, logs, and browser, grew from 26% to 31% in the quarter. As customers adopt more of the platform, their consumption generally increases, as does our revenue. The more of the platform our customers adopt, the more value they get. The growth in platform adoption speaks to the strength of our product offerings beyond our traditional APM product and the attractiveness of our all-in-one platform model. Last quarter, we supplemented our discussion regarding consumption by introducing you to a new metric, consumption run rate, or CRR. As a reminder, CRR is a real-time annualized measure of the business that takes into account buying program, price, and usage amount on a per customer basis, and something we expect to closely correlate with revenue over time. We track it daily. Monthly average CRR growth for April was strong, and while it also grew in May and June, it grew at a slower pace. Importantly, monthly average CRR growth re-accelerated from June to July. At a high level, CRR in the first quarter tells a positive story. However, underneath the surface, we think CRR tells a more complex story that also shows areas of strength in our model and places of opportunity that have emerged as we mature in our transition to a consumption business. For customers whose burn rate is below 130% of their commitment, we see healthy and predictable growth. However, when customers' run rate exceeds 130% of their commitment, their consumption begins to materially differ from their budgeted spend, and they moderate consumption. This might seem counterintuitive as these customers are our best evidence for product market fit and have garnered the most value from New Relic relative to their starting expectations. In fact, this group includes some of our largest and most passionate customers. Our opportunity as customers expand with New Relic is to support their increased consumption with budget on an ongoing basis. In Q1, we started taking action on this dynamic and partnering with a limited number of customers on early renewals. Let me share with you a few highlights from our initial pilot. Currys plc, a customer since 2016, renewed flat in December 2021 at $73,000. This customer re-platformed their website to Salesforce Commerce Cloud, and New Relic was chosen as the strategic partner to monitor their new Salesforce-based front end and back end. In addition, they chose New Relic as their standard for observability, expanding their usage to cover their hybrid cloud environment, spanning legacy applications on IBM mainframes, where they're moving off one of our competitors, to major hyperscale environments in the public cloud. This customer now uses APM, logs, infrastructure, metrics, events, and traces and had driven their consumption to $625,000 and agreed in Q1 to an early renewal of $921,000, more than 10x their commitment and a healthy uplift on their current burn rate. Another customer had originally agreed to $295,000, but had ramped consumption to $434,000. This customer decided to take advantage of our strategic agreement with AWS and renew early at $550,000 through the AWS Marketplace, an uplift of 27% above their already high consumption rate. Last, our last example demonstrates our ability to drive increased consumption and early renewal with multi-year contracts. This customer signed a three-year legacy deal in March 2020 for $450,000 before we announced the platform offering in July. Given their recent agreement, which was a long-term agreement, they were initially reluctant to convert to the platform, but our sales and technical services teams demonstrated the advantages of the full platform and created a value plan in partnership with the customer. The plan includes projects that drive tool consolidation, improve alert quality, and training and enablement. Their consumption run rate peaked at $1 million, and they agreed to renew two quarters in advance at $794,000, an uplift of 76% over their prior contract, although under their peak run rate. We are now ready to scale this early renewal pilot across many more customers, and we've already begun executing a scaled-out campaign in Q2. In closing, let's step back for a minute and look at the big picture. Over the last year, we have accelerated revenue growth, nearly doubling the year-over-year growth rate in the last year. We've inverted the multi-year decline in paid customer accounts with consistent new paid customers for the last four quarters. We are growing the large accounts faster than before, and net revenue retention has also re-accelerated from a low point of 110% just five quarters ago to now 120% this quarter. Product market fit and consumption patterns are in fact so strong that many customers are consuming at an unexpectedly high rate relative to their original plan. Something we're now ready to tackle with the right programs and incentives in place to help customers top off their contracts with additional budget or replace agreements with early renewals. We've also aligned our go-to-market team with additional incentives and negotiation levers to help customers unlock their budgets with early renewals. We're growing stronger inside the company as well, including progress on non-financial metrics. I had some of the very best recruiting conversations in my tenure at New Relic this quarter, with several additions of new executives onboarding from leading companies like Salesforce, AWS, Microsoft, and more. I was proud to see the results of our annual employee engagement survey as our overall employee engagement jumped 17 points since last April. We're performing better, and we're a much stronger company inside and out than just a year ago. No wonder we were recently recognized in Forbes Best Workplaces for Millennials. I'm so proud of the thousands of Relics who work every day to make this possible. Finally, we're now committed to another financial milestone, a non-GAAP profitable business this year, and a clear opportunity to accelerate revenue and non-GAAP profitability as we head into the next. Before I hand it over to Mark, I want to provide an update on the search for our next CFO. As you know, Mark announced his retirement last quarter, and we've been conducting a public search since that time. I'm pleased to announce that we have found New Relic's next CFO, and his name is David Barter. David laid the foundation of his career at world-class companies like GE and Microsoft, where he mastered the fundamentals of business and finance and established himself as a business leader. He has since led finance teams at multiple companies, including leading one company through a successful IPO. Dave has seen many of the challenges New Relic faces and brings fresh perspective, proven experience, and a focus on driving growth and profitability. This will be his third stint as a public CFO, and many I have spoken with who have worked around and under Dave speak highly of his integrity, the clarity and decisiveness he brings to organizations, and the accountability he holds himself and teams against. We are onboarding Dave now, and he will officially transition to the CFO role after the shareholder meeting on August seventeenth. Mark has generously offered to assist Dave for as long as needed to ensure a smooth transition. Given this will be Mark's last earnings call, I want to close my remarks with a heartfelt expression of gratitude to him for his many years of service to New Relic, our customers, and shareholders, and wish him the best in his future endeavors. With that, over to you, Mark. Thanks, Bill, and good afternoon and good evening to everyone on the call. I'd like to cover four topics. Briefly recap our first quarter financial results, provide some commentary on the macro environment as we see it, provide Q 2 guidance, and update our full- year guidance. I'll start with the first quarter recap. For Q1, we reported revenue of $216 million, representing year-over-year growth of 20% and above the high end of the guidance we provided on our Q4 fiscal 2022 earnings call. Q1 got off to a strong start in April, as we shared with you on the Q4 call in May. As Bill mentioned, CRR growth slowed in the latter part of the quarter. Growth and consumption run rate in July is up from June. Non-GAAP loss in operations was $17 million, beating the high end of the guidance we provided for a loss of between $23 million and $25 million. Non-GAAP gross margins were 72.5% in line with the expectations we set in May for incremental quarterly improvement, which keeps us on track to exit the year with non-GAAP gross margins in the mid-70% range. Non-GAAP EPS was a loss of $0.26, better than our guidance for a loss of between $0.35 and $0.38. I'd like to spend a few minutes sharing some thoughts on the macro environment. Deals are still getting done. We added about 300 net customers last quarter, and customers continue to grow their consumption and adopt more of the platform. We've effectively introduced a data price increase. As highlighted at our FutureStack conference, this will take effect upon renewal for most customers. Thus, the near term gains on the price increase will be modest but will grow each quarter. We are keeping a close eye on the business climate, which on the margin seems a little tougher, but we aren't going to confuse the macro with opportunities for us to improve sales execution. Just to put a fine point on this, as Bill shared with you in his comments, when our customers' actual consumption exceeds their commit by a material amount, which tends to be in the 30% range, it creates internal budgeting issues for them and causes them to artificially constrain consumption to more align with their internal budgets. This impacts CRR and revenue. As a result, we continue to refine our go-to-market motion to do a better job balancing our drive for consumption growth with increasing commitments, as the two are inevitably tethered. If the macro environment does indeed get more challenging, we believe the transformation we have gone through over the past two years will serve us well. First, our platform-based approach to observability should help us compete well in vendor consolidation opportunities, which is a tried and true method for customers to reduce spend. Second, our value-based pricing model offers customers better value as they adopt more of our platform. Finally, our consumption model allows customers direct control over their spend. Changing gears to the bottom line, we are taking the opportunity to layer in a greater focus on non-GAAP profitability into our operating plan. The focus for the last two years has been on re-accelerating growth, but we now see a path to refine our focus and improve our execution on activities that will drive growth as well as non-GAAP profitability. As I'll share in a moment, we are now looking to improve our full year bottom line from an adjusted non-GAAP loss of close to $50 million last year to modest non-GAAP profit this year, even as we continue to invest in the business to re-accelerate top line growth. Before sharing our guidance, I'd like to share a few thoughts on the assumptions that inform our financial outlook. For Q2, we're assuming overall CRR growth is modest given the current burn rate dynamics Bill described while our go-to-market efforts to drive early renewals take hold. Also, we're assuming the macro environment climate continues to put focus on expense control. Our full year guidance reflects the following. We believe our early renewal efforts will unlock an increase in consumption commitments as well as CRR. We expect account growth will continue to accelerate and bring new customers and revenue to the platform. We expect customers to continue to adopt more capabilities of the platform. We are forecasting lower churn for the remainder of the year, and we've begun to increase data pricing in Q1, which will feather in as customers renew. Now on to the numbers. For the second quarter of fiscal year 2023, we expect revenue between $219 million and $224 million, representing year-over-year growth of between 12% and 14% respectively. I remind everyone that last year in Q2, we had a positive variance in revenue due to our model change, making Q2 a tough compare. I'm sure you've noted that our guidance range is wider than in the past. This is driven both by the growth and size of the business and the uncertainty in factors discussed earlier. As I mentioned previously, we don't think it is prudent at this time to assume the environment improves near term. We expect a non-GAAP operating loss from operations of between $3 million and $5 million. We expect a non-GAAP net loss attributable to New Relic per diluted share between $0.04 and $0.07. For the full year fiscal 2023, we expect revenue between $920 million and $930 million, representing year-over-year growth of between 17% and 18% respectively. We expect non-GAAP net income between $5 million and $10 million, and we expect non-GAAP earnings attributable to New Relic per diluted share between $0.10 and $0.17. We set the expectation last quarter that we'd be modestly profitable on a non-GAAP basis exiting fiscal 2023. We now see a path to be profitable on a non-GAAP basis for the full year. Given the climate, we feel the best strategy is to operate such that we can fund our own growth. Lastly, as this is my final earnings call with New Relic, I just want to take a moment to thank everyone I've had the good fortune to meet along the way, and I also want to extend a warm welcome to Dave. I look forward to working with him on the transition. With that, operator, please open up the line for Q&A. Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If you'd like to remove that question, press star followed by two. Again, to ask a question, please press star one. As a reminder, if you're using a speakerphone, please remember to pick up your handset before asking your question. Our first question comes from Kingsley Crane with Canaccord. Please go ahead. Hey, guys, Kingsley here. For Bill, there's a lot of debate right now between consumption models and subscription models. We think for investors it could be helpful. If you were to go a year back, would you make the same decision now? Why? If so, why is the consumption model the right choice for New Relic and for its customers? Hey, Kingsley. Thanks for the question. I absolutely would make the same decision around business model. We feel like it's a great alignment of interests between our customers and our company, and we think it actually helps us in this macro environment we're in. As Mark described, we see this as a really vibrant end market. You look at CIO surveys, they continue to highlight the importance of cloud adoption and digital transformation. They're the main drivers of our business. Customers really need to make sure that their digital assets are available and performant, and that's what we're excellent at. Our business model is created with really value-based pricing that puts the technology in the hands of more developers and engineers more affordably than anyone else in the market. While the majority of our opportunity is still greenfield, we also see the competitive replacements of point product providers as our more sophisticated customers start consolidating spend and standardizing on our platform. Finally, we believe the consumption model, as I said, is the best alignment between us and our customers because it's We're not really great at helping our customers be successful, they won't continue to consume. We're motivated to help them, and they're motivated to bring more of their spend to us. I would absolutely make the transition that we have, and we've seen the success in doubling our revenue growth rate as a result of it, and I think we're only getting started. Yeah, that's great to hear, and customer alignment makes a lot of sense. So for Mark, you've had such a great run at New Relic, certainly a lot to be proud of. As we look forward, significant improvement in profitability is implied by the guide. Can you offer any specifics on the improvement to the cost structure? Then how these can be accomplished with an ongoing goal of revenue acceleration? Sure. Thanks, Kingsley. When we look back at Q1, we beat our bottom line guide by quite a bit, and we expect to continue to do that through the rest of the year, to the point where we expect to be profitable for the year. Those things, those cost savings are coming in a number of areas. Obviously, gross margin, we showed good improvement this past quarter. We expect that to continue, and we said we've guided to exiting the year in the mid-70s%, so that gives us a continued improvement. Lower OPEX due to hiring. We are continuing to hire, we're continuing to invest, but I would say we're being more selective around our hiring and people. I think that hiring will be a little bit slower than we had thought, you know, probably 6-9 months ago in sort of the rest of 2023. When we look at sales and marketing, our yield is getting more efficient with our PLG spend and go-to-market. Overall, we do continue to expect go-to-market efficiencies to take hold throughout the rest of the year. We feel like we can achieve these cost savings really by investing more in the places where we are seeing results and we are getting good productivity and good efficiency. You know, savings in some of the other areas we're not getting as good a return. We do feel like we can achieve these savings while still accelerate growth. Okay. Really helpful. Thanks again. Thank you. Our next question comes from Sanjit Singh with Morgan Stanley. Please proceed. Hi, everyone. Thank you so much for taking this question. I'm speaking for Sanjit Singh, who is my analyst. One question for you guys is, the pricing for data that took effect in June 1st, how have customers responded to higher data ingest pricing, and what contribution does the price increase have on the fiscal year 2023 revenue guide? Thank you so much. Thanks, Sanjit. Yeah, as you noted, the price increase was effective June first, so just the last month of the quarter. We did notify customers of that at the FutureStack conference and in advance as well. As Mark noted, the price increase for most of our customer revenue only takes effect upon renewal. So for the Q1 renewal, just that last month was captured. It performed actually very nicely. In fact, the vast majority of our customers accepted the price increase at the $0.30 Level for our standard data price change. We also introduced at the same time a Data Plus offering and saw healthy uptake from several customers on that in that last few weeks of the quarter as well. So while it's early days there, we're excited by that opportunity. In terms of how it impacts revenues, as we've noted before, it will be phased in throughout the year as renewals take place. The majority of the impact will be felt in the FY 2024 timeframe, but we'll see cumulative effects throughout the year. Perfect. Thank you. Thank you. Our next question comes from Derrick Wood with Cowen. Please proceed. Oh, great. Thanks, guys. It's Andrew in for Derrick. Nice quarter. Mark, maybe just on the components you outlined in the full year rev guide, can you just help us understand the visibility you have into those and maybe rank order the biggest drivers of growth that you laid out there? Sure. What I went through, I'll just read them or go through them in order in which I expressed them. You know, I think the biggest one is the early renewal efforts that Bill mentioned. You know, we're seeing an issue with budget and consumption, you know, commitment and consumption. Where that gets too far out of line, there's inevitable pressure on consumption. These are our best customers that we wanna make sure they have enough budget to go and continue to accelerate their consumption rates. That's something that we're working on. Bill mentioned the pilot, gave some examples. We're seeing positive results from that. We're now rolling it out to the entire go-to-market org and to our customer base. We think over, you know, this is gonna take time to get hold, but we think over the course of the next three quarters, that's going to be pretty meaningful in terms of the overall impact on our results. We expect account growth to continue to improve. We've been we had 300 or so this past quarter, and that's been growing. We expect that to continue to happen. We do expect continued adoption of more and more capabilities. That growth's been going on, and so we expect that to continue. And then the churn rates, we expressed that we of course see an improvement in churn over the course of the next few quarters. In Q1, Bill mentioned that it was ticked up. It was up to 6% from 5.3%. That was related to just a couple renewals, or a handful of renewals that slipped to July. They have now closed. Had they closed in the June quarter, our renewal would have been an improvement over Q4. We feel good about our ability to continue to improve churn over the rest of the year. Finally, just as mentioned in the last question, the data price increase, which we have effectively rolled out, very modest, you know, virtually no impact in the Q1 numbers. We'll get a little bit in Q2, and then as more and more customers hit the renewals and we get through the rest of the year, that'll have a greater impact, over the course of the rest of fiscal 2023. Great. Is there any follow-up to that? Is there any summer seasonality consumption factored into the guidance? No, we don't expect summer seasonality. Last year when you look at our CRR, which we gave a visibility into last quarter, we did not see any sort of slowdown. Our customer base is diverse enough where some are go up, some are down, and that generally continues. I think the only seasonal slowdown that we see is really at the end of the year, a modest one at the end of the year as overall you kind of overall, I guess, the economy sort of shuts down a bit at the tail end of December. Okay. Thanks, Mark, and best wishes. For Bill, maybe just talk about the user adoption you're seeing and if the growth of data consumption has led to more users yet? Do you see that continuing throughout this year? Or maybe just shed some color on that. Yeah. As we've talked about before, we believe pricing our data offering at a very low price makes it easier for our customers to cover more of their estate to expand with the platform at lower incremental costs. That increase in data leads to increase in users over time. That is a long-term strategy, to be clear, so I expect it to play out over multiple years. As for this quarter, we actually did see very healthy user growth in the quarter. I think we mentioned in the Q4 call or Investor Day following that where we saw customers' consumption exceeding commitments, they were managing spend down about 50/50, users and data. This quarter, where we saw that happening, it was a little more on the data. User growth continued and was actually fairly strong. Great. Thanks, guys. Thank you for your questions. Our next question comes from Yoon Kim with Loop Capital Markets. Please go ahead. Thank you. First, Bill, in the morning, one of your peers commented that there was some slowdown in certain areas where people were being cost-conscious. You know, I think the company specifically indicated that log ingestion was the area of softness as they try to be cost-conscious. Are you seeing any of that trend within your product portfolio at all? No, we don't see any trends specific to a particular product or platform capability or data type. As we've stated earlier in the prepared remarks, we see the moderated usage really isolated to those customers whose consumption run rate is far in excess of their previous commitments. That's where we're focused in terms of helping our customers shore up that consumption with additional budget. Otherwise, the, you know, impact of whatever macro situation is not specific to any particular product or platform capability. Okay, great. Just a hypothetical question. Obviously, you are proactively approaching customers whose consumption run rate is running hot. I think you mentioned 130% run rate. Are you introducing the price increase at that time, or are you keeping the same price until the end of the contract? Yeah. As we go up for early renewal, the price points and quantities are part of that discussion as well as the new contract date. We are bringing the new price into that negotiation, and helping customers understand the transition point. Okay, great. Thank you. Bill, I'm sorry, Mark, you know, great working with you. Looks like you're finishing off your last quarter with a spectacular cash flow. You know, obviously, with the focus on early renewals, do you expect the quarterly cash flow seasonality to be more balanced throughout the year? Or do you know, experience some of the renewals kind of earlier in the year rather than, you know, back and loaded towards the second half? I think it's tough to say. You know, it depends a bit on whether customers are paying for the entire renewal upfront or how they're managing that renewal. For some customers, it's easier to budget with renewal dates and the big cash outlay still being at their renewal time. We are not looking at, you know, dramatically changed cash flow based on the early renewals. You know, I think that remains to be seen how that plays out. All right. Thank you so much. Good luck, Mark. Thank you. Thank you for your questions. Our next question comes from Michael Turits with KeyBanc Capital Markets. Please proceed. Hey, thanks for taking the question. This is Eric Heath on for Michael. Bill, on for the customers that are consistently running hot, I mean, what is it you have to do at the time of renewal to get those commitments levels higher? Because if I recall correctly, I believe the customer isn't necessarily incented to kind of commit at a higher level because kind of the price per gig, if they go over is the same, so there's not like a penalty for going over. What is it you have to do to drive those renewals higher and be in excess of where they start and where they might actually get to by the end of the contract? Yeah, good question. You know, first thing to remember is with the consumption model, it's all underlaid with value. The first thing we do is we go into our customers to help them understand their consumption and the value they're getting out of it, the ROI for the business. Most of our customers, we have an agreed set of metrics that we're helping drive for them, whether that's accelerated innovation, improved SLAs, you know, progress on cloud migration, et cetera. We help bring that value, discussion, to light, and we talk about their consumption rates. This quarter in particular, we're unlocking some pretty exciting improvements to our, buying program. We've been able to take advantage of several of the features that other leading consumption companies like Snowflake, Mongo, Azure, AWS, have available for customers. For example, our new buying program support the ability for customers to top off the contract with additional budget at any time, to renew early, as well as to roll over any unused commitments for an additional year at the end of the contract. That gives them a lot of security that, by putting up budget, they're not at risk of shelfware, because if they don't end up using it all in the contract period, they get one additional year to use it, for consumption. We also have unlocked tiered pricing for our customers, both user and data pricing, which allows for them and us to reach a price point that incentivizes additional growth. You can imagine, for example, they're currently paying a certain price for users and data. We secure that budget with them, but then unlock additional savings at volume if they add more users and data beyond the current levels. Yeah. That's actually very helpful. I appreciate that. Just on the macro, I'm trying to square some of the comments. You did note some slipped deals, and granted they closed in July. We also noted some moderated consumption in May and June, and talked about customers kind of throttling consumption. Could you just help us with a macro phenomenon and kind of some isolated incidents? Sorry. You broke up there. The question, you were asking about the macro, and then didn't quite hear the question. Could you repeat it? Yeah. There was just I mean, the comments of the slipped deals, the slowdown in consumption in May and June, and some customers kind of throttling consumption 'cause they're running hot. Just kinda square those comments and why you're not necessarily seeing macro despite kinda these comments. Yeah. In terms of customer slowing consumption, we have a very good visibility into where that's happening. It is most dramatic in cases where the customer's consumption is far in excess of their commitment. For customers who are at a run rate below 130%, CRR growth is actually very healthy and they're continuing to accelerate their adoption of the platform. In aggregate, you see, you know, those increases and decreases leading to slower CRR for the last two months of the quarter. Although we ended, you know, at a higher mark than when we started the quarter, and then it re-accelerated again in July. In terms of the few deals that slipped out past the quarter, that occasionally happens, as you know, customers come under time pressure to get the contract signed and the POs sent. As Mark shared, those deals did land in the first few days of July, and had they come in a few days earlier, we would've actually achieved record churn. We feel good about our ability to continue to decrease churn in the following quarters. Yeah. Very helpful. Thanks, Bill. Thank you. Our next question comes from Mike Cikos with Needham. Please proceed Great. Thanks for taking the questions here, guys. I did wanna start out, off the back of Eric's questions with respect to the CRR trends that you guys had discussed. If I had it right, April was a strong quarter. You saw some moderation in May and June, and then a recovery in July. I just wanna get a sense, can you help me understand the magnitude of those shifts on a month by month basis? Like, if I'm looking at the strength that we're seeing in July now, is it at the levels that you guys were exhibiting in April? Then how much of a moderation was there in May or June when I'm trying to think about those consumption trends from your customers? Yeah, you know, the July recovery was not to the level that we saw in April, but it was a nice bump up from the May/June numbers. We don't wanna get too fine with our analysis of $1 million or $2 million here or there because things are, you know, variable. You know, we're being cautious with our guidance about what we expect for the near term. You know, I think given the environment, there is gonna continue to be a focus on budgets, so we're expecting CRR to, you know, we're not expecting CR to go up to the increase at the levels we saw in the March and April timeframe. That's great. Thank you. I also just wanted to focus on the revenue guidance for a second. Kudos on the outperformance in Q1 coming in, call it about $2.5 million north of the high end of your guidance. If I look at the maintained guidance for the year, can you help me understand what's behind that maintained guidance if macro is not impacting you? The second thing is, it looks like you guys are baking in, I guess, stronger growth in the back half of the year versus what we're seeing in Q2 despite the year-over-year comparisons becoming more difficult as well. Any color there would be beneficial as far as we're looking on the remainder of the year. Yeah. I think our toughest compare is this quarter, given last year's Q2. For Q2, for the near term, you know, we talked about the dynamics of the consumption and when consumption exceeds commit by more than 130%, you know, that's an issue for customers because that starts to put a greater focus on consumption, and we're seeing moderation at that point. We're working on that. We talked about the pilots. You know, we're getting there. We think that's gonna take time to really show up in the revenue numbers. We're thinking that is going to have a pretty modest impact or minimal impact in Q2, but will have an impact in Q3 and Q4. Also, we're not assuming any change in the macro environment in Q2, so we expect that to continue. Our you know that leads us to our Q2 guide. For the year, mentioned those other things earlier that we're seeing will continue to happen. To just point out on the data price increase, because of the way we're implementing it at renewal time, you know, it's really we'll get the next big chunk of renewals that come in sort of in the September timeframe. That'll be pretty modest impact this quarter, but we'll get the Q1, at least one renewal impact this quarter in revenue. In Q3, we'll get the first six months of renewals or thereabouts will have an impact in Q3. Q4, it'll be you know the December renewals have an impact. That impact will help as well. You know, the cumulative effect of that will be greater as we go throughout the year. We expect increased or improved revenue performance over the course of the year, and we think there's good reason for that when we look out at these assumptions. Great. Just one more question, if I could. If I'm looking at the upgrade to guidance when thinking about that non-GAAP profitability, and happy to see that guidance come out today. Just working through the year, it does put your OpEx, depending on how we model the revenue and the gross margins obviously, but in a relatively tight range versus where we're looking for Q2 to shake out currently. I'm just curious, can you help us think about the cost structure here? Are you guys really? Should we be thinking about headcount? Is there the shelving of projects? Is it negotiating with your vendors? Like, where are the majority of these savings coming with the fact that you've now maintained your revenue guide for the full year but are jumping up that profitability goal dramatically from where we were last quarter? Yeah. We saw significant bottom line improvements as we've noted in Q1 and continue to expect those throughout the year. In terms of the other cost savings, they're really across the board. All of our leaders are prioritizing and focusing on strategic projects that really help accelerate our growth and increase efficiency. In the first quarter, you know, the majority of our cost savings were better gross margin. Like I said, we expect that to continue. Lower OPEX due to hiring. Our sales and marketing yields is continuing to get more and more efficient with our Product-led growth go to market at least on the low end with new customer acquisition. We expect those to continue, and we're looking across the board for how we can be more efficient and run a profitable company. Thank you. I'll leave it there. Thank you, guys. Thank you for your questions. Our next question comes from Rishi Jaluria with RBC Capital Markets. Please go ahead. Hi, this is Richard Poland on for Rishi Jaluria. Thanks for taking my question. I appreciate the commentary and color on the June first pricing change and just kind of around how the cadence of that should impact the revenue line. Just as a follow-up, did you see any impact in May in terms of customers looking to try and renew early ahead of that price change just in order to kinda lock in lower pricing for an extra year or any, I guess, was there anything around that? We had a couple customers, you know, bring that to us. You know, but it was not at all material. You know, folks see that and they say, "Oh, geez, can I get in under the wire and do something like that?" Generally speaking, we, you know, would prefer that they got to their renewal and then renewed in ordinary course. But it was not a significant number at all. It was primarily the people that were kind of early June and missed it by a couple days. Thanks. Very helpful. Just in terms of the net adds, it continues to sit in that 200-300 per quarter range. Is that kinda what we could expect as the new normal? Have you know, looked at just kind of in June how customer adds tracked with the new pricing and just if there's any relationship there? Yeah. We've been steadily adding new customers for the last four quarters. Again, those numbers are net of churn. We did not see any significant change in terms of new customer acquisition with the price change. If anything, we're getting more effective at helping bring customers into the platform and pay for the value. Got it. Thank you. Thank you for your questions. As a reminder, it is star one if you'd like to ask a question. That is star one to ask a question. There are no questions waiting at this time, so I'll pass the conference back over to the management team for any further remarks. All right. Thank you everyone for your time today. We're pleased with the quarter results and look forward to connecting with you throughout the quarter, and see you next time. That concludes the New Relic first quarter fiscal 2023 financial results conference call. Thank you for your participation. You may now disconnect your lines.