Application and DevOps monitoring company New Relic Inc. saw its shares fall almost 4% in after-hours trading today despite posting second-quarter financial results that beat expectations on earnings and revenue.

The company reported a profit before certain costs such as stock compensation of 24 cents per diluted share on revenue of $145.8 million, up from $114.9 million in the same period last year. New Relic’s net loss for the quarter came to $16.9 million

Wall Street was looking for a 15-cent profit per diluted share on revenue of $143.4 million.

“We delivered a record number of platform innovations on top of the New Relic One observability platform during the second fiscal quarter, including New Relic Logs, New Relic Metrics, New Relic Traces and programmability,” New Relic founder and Chief Executive Officer Lew Cirne (pictured) said in a statement. “The reaction to these capabilities during our global FutureStack events over the past two months has been incredibly positive. Field training and enablement is underway and we are committed to engaging our significant base and improving execution in the second half.”

Cirne was referring to the September launch of the company’s revamped New Relic One platform, which is a web application performance monitoring service that works in real time and enables information technology teams to see deep inside their apps and gain a full understanding of any performance issues.

The new release was significant because it introduced what New Relic calls “programmability” features that enable developers to build native apps atop of the platform. The idea is to help developers build new applications atop of New Relic One, using the popular React.js and GraphQL programming languages. Those apps can integrate New Relic’s observability data with their company’s own business data. Such applications might include customized data visualizations or workflow integrations that enable companies to take action on their application data

The release also added new capabilities that enable it to connect to more data sources and a new artificial intelligence tool for troubleshooting and resolving problems.

Cirne talked more about New Relic One when he made an appearance on theCUBE, SiliconANGLE Media’s mobile livestreaming studio, during the New Relic FutureStack event in New York City:

The new release was certainly well-received if New Relic’s customer growth is any indication. At the end of the second quarter, New Relic said it has 906 business accounts worth $100,000 or more, up from 786 accounts a year ago.

For the third quarter, New Relic said it’s expecting earnings of between 12 and 13 cents per share on revenue of $148 million to $150 million. Wall Street has New Relic’s third quarter earnings pegged at 11 cents per share.

Holger Mueller, an analyst with Constellation Research Inc., said the stock drop was likely because New Relic posted an overall net loss for the quarter.

“New Relic keeps growing nicely with its focus on observability and support for DevOps teams,” the analyst said. “The product roadmap is attractive and executives are relying more on New Relic to successfully manage their application workloads. But the company needs to come up with a plan to achieve profitability. The next quarters will be key to see if it can move into the black, or not.”

Photo: SiliconANGLE