Going Private: New Relic, the all-in-one observability platform, has entered into a definitive agreement to be acquired by Francisco Partners and TPG for $6.5 billion. The move towards privatization comes alongside strong first-quarter results for fiscal year 2024.
In Q2 2023, Total revenue for the quarter reached $242.6 million, up 12% YOY with consumption revenue rising 39%. Gross margins improved significantly to 77.6% from 70.5%the previous year, with non-GAAP gross margin at 79.4%.
Operational Shift: The company reported a decrease in the loss from operations to $(33.0) million from $(55.7) million and saw a non-GAAP operating income of $36.4 million. The transformation is also marked by an enhancement in operating margins and growth in free cash flow.
New Relic withdrawn of fiscal 2024 guidance due to the pending transaction.
Acquisition Approval: Broadcom, a global manufacturer of hardware components for computer servers, has received clearance to acquire VMware. The deal, scrutinized by the UK's Competition and Markets Authority (CMA), has been valued at $69 billion and raises no concerns regarding competition or innovation in the UK market.
VMware is a leader in server virtualization technology, VMware creates software that enhances server efficiency.
Why This Acquisition? The merger aligns with Broadcom's hardware expertise, promising to innovate and provide complete solutions in the industry.
Q1 Performance: VMware's first quarter of fiscal 2024 showcased total revenue of $3.28 billion, a 6% increase from the previous year. Subscription and SaaS revenue saw a remarkable 35% year-over-year growth.
Boosting Cloud Spending: HashiCorp's State of Cloud Strategy Survey 2023 shows that 48% of tech industry respondents have increased their cloud spending despite worldwide macroeconomic uncertainty.
Platform Teams are Pivotal: A standout observation is that 91% of tech firms rely on centralized platform teams to enable cloud adoption and operation. This reflects a major organizational approach and offers efficiency, standardization, security, and improved collaboration.
Challenges and Opportunities: The survey also sheds light on barriers such as compliance and risk management (29%), skills shortages (28%), and team silos. However, the benefits of uptime, infrastructure scaling, budget considerations, and security highlight the transformative potential of multi-cloud in the tech industry.