Financial Data and Key Metrics Changes - Total revenue for Q2 2024 was $193 million, representing a year-over-year growth of 4% and exceeding the high end of the guidance range [6][15] - Subscription revenue grew by 31% year-over-year, reaching $70 million, while total ARR increased by 7% year-over-year to $705 million [7][15] - Adjusted EBITDA for Q2 2024 was $92.5 million, reflecting a 17% year-over-year growth and an adjusted EBITDA margin of 48% [17] Business Line Data and Key Metrics Changes - Subscription ARR grew by 36% year-over-year, reaching $270 million, with a maintenance renewal rate of 97% [7][15] - Maintenance revenue decreased by 5% year-over-year to $110 million, as the company continued to convert customers to subscription products [16] - License revenue was $13 million, down 17% from the previous year, impacted by the subscription-first strategy [17] Market Data and Key Metrics Changes - The company reported a strong performance in hybrid cloud observability solutions, surpassing $100 million in total ARR for this segment [7] - The customer base included 1,042 customers with over $100,000 in total ARR, marking a 16% growth year-over-year [15] Company Strategy and Development Direction - The company is focused on a subscription-first strategy, emphasizing customer success and product innovation to drive growth [5][6] - Ongoing product enhancements aim to improve productivity, reduce complexity, and lower costs for customers [8][10] - The company is committed to expanding its hybrid visibility solutions and investing selectively while maintaining expense discipline [13] Management's Comments on Operating Environment and Future Outlook - Management noted that there has been no significant change in the macro environment from Q1 to Q2, with a strong value proposition resonating with customers [25] - The company is confident in its ability to meet financial goals for the remainder of 2024, raising revenue guidance for the full year to a range of $778 million to $788 million [20][22] - Management expressed optimism about the ongoing transformation efforts and the ability to adapt to evolving customer needs [23] Other Important Information - The company refinanced its debt in July 2024, reducing the interest rate by 50 basis points and extending the maturity to February 2030 [18] - Bart Kalsu, the CFO, announced his departure, with Lewis Black set to take over the role [14] Q&A Session Summary Question: What did you see during the quarter regarding the macro environment? - Management indicated no meaningful difference in the macro environment from Q1 to Q2, with strong customer value propositions driving performance [25] Question: How significant is the hybrid cloud observability solution for large customers? - Management stated that the hybrid cloud observability solution is a significant driver for customer adoption, particularly for larger enterprises [30] Question: Why is the Q3 guidance lower than the first half growth? - Management explained that the guidance is consistent with previous performance and reflects a prudent approach to forecasting [31] Question: What gives confidence to raise guidance despite others cutting it? - Management cited strong internal demand and the value customers see in their products as reasons for raising guidance [37] Question: Is there an increase in the pace of maintenance to subscription migration? - Management confirmed that they are achieving their plans and expanding market opportunities, with consistent results across geographies [38]

Group 1: Earnings Performance - SolarWinds reported quarterly earnings of $0.26 per share, exceeding the Zacks Consensus Estimate of $0.22 per share, and up from $0.21 per share a year ago, representing an earnings surprise of 18.18% [1] - The company has surpassed consensus EPS estimates for four consecutive quarters [2] - SolarWinds posted revenues of $193.25 million for the quarter ended June 2024, surpassing the Zacks Consensus Estimate by 2.51%, and up from $185.03 million year-over-year [2] Group 2: Stock Performance and Outlook - SolarWinds shares have declined approximately 4.5% since the beginning of the year, while the S&P 500 has gained 15.8% [3] - The company's future stock performance will largely depend on management's commentary during the earnings call and the earnings outlook [4][6] - The current consensus EPS estimate for the upcoming quarter is $0.25 on revenues of $194.23 million, and for the current fiscal year, it is $1.03 on revenues of $778.91 million [7] Group 3: Industry Context - The Internet - Software industry, to which SolarWinds belongs, is currently ranked in the top 36% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact SolarWinds' stock performance [5]

Core Thesis - SolarWinds is strategically repositioning towards integrated AI technologies and subscription-based models, aligning with trends in automation solutions and recurring revenue streams in the IT sector, which is expected to enhance operational efficiency and customer satisfaction [3]. Company Overview - SolarWinds, founded in 1999, is a leading IT management software provider serving over 300,000 customers globally, including 499 of the Fortune 500 companies, with solutions tailored for various industries such as healthcare, finance, and government [4]. New Initiatives and Vulnerabilities - The introduction of SolarWinds AI technology aims to facilitate IT transitions, reducing resolution time by up to 40%, while the Database Performance Analyzer enhances PostgreSQL support, improving query performance by up to 30% [5]. - Despite these advancements, there are concerns regarding data privacy and security risks associated with AI technologies, necessitating robust security measures and continuous monitoring to maintain customer trust [6]. Financial Performance - In Q1 2024, SolarWinds reported total revenue of $193.31 million, a 4% increase year-over-year, driven by a shift to subscription models, although net income fluctuated from a loss of $5.62 million in Q1 2023 to a profit of $15.56 million in Q1 2024 [7]. - The stock price exhibited volatility over the past year, reflecting the company's financial performance and strategic initiatives, with a notable recovery in December [8]. Competitive Landscape - SolarWinds faces competition from significant rivals such as Progress Software, Rapid7, and Appian, which creates diverse competitive dynamics in the market [9]. Future Outlook - The adoption of AI technologies and upgrades to existing products are expected to drive significant growth for SolarWinds in the coming year, with revenue growth projected at approximately 5% and profit growth potentially improving to around 9-10% [10]. - Analysts estimate a revenue growth of 4.29% and an earnings growth of 8.53% for the upcoming year, indicating a positive outlook despite the competitive challenges [12]. Valuation Metrics - SolarWinds has a gross margin of 90.42%, significantly higher than the industry median of 49.23%, indicating strong cost management [12]. - The company's P/S ratio of 2.55 suggests it is undervalued compared to the sector median of 3.11, while the high P/E ratio of 188.98 indicates it may be overvalued in terms of earnings [12].

The company creates products that can power the secure monitoring and management of IT environments in multi-cloud or hybrid environments. Its overall goal is to help their customers strengthen and transform their businesses' digital capabilities with simple and secure solutions. SolarWinds' Industry Competition Datadog (DDOG) Dynatrace (DT) New Relic Quest Redgate SolarWinds generates revenue from fees for subscriptions to its software-as-a-service (SaaS) and time-based license agreements. Maintenance and ...

Shares of SolarWinds (SWI) have gained 7.8% over the past four weeks to close the last trading session at $11.88, but there could still be a solid upside left in the stock if short-term price targets of Wall Street analysts are any indication. Going by the price targets, the mean estimate of $15.36 indicates a potential upside of 29.3%. The mean estimate comprises seven short-term price targets with a standard deviation of $4.85. While the lowest estimate of $11.50 indicates a 3.2% decline from the current ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38711 SolarWinds Corporation (Exact name of registrant as specified in its charter) Delaware 81-0753267 (State or other jurisdic ...

SolarWinds Corporation (NYSE:SWI) Q1 2024 Earnings Conference Call May 2, 2024 8:30 AM ET Company Participants Tim Karaca - Group Vice President of Finance Sudhakar Ramakrishna - President and Chief Executive Officer Bart Kalsu - Chief Financial Officer Conference Call Participants Matt Hedberg - RBC Capital Markets Sanjit Singh - Morgan Stanley Pinjalim Bora - JPMorgan Miller Jump - Truist Securities Operator Thank you for standing by. My name is Kathleen and I will be your conference operator today. At th ...

This presentation and the accompanying oral presentation contain "forward-looking" statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding our financial outlook, our market opportunities, our evolution to a subscription-first mentality, the SolarWinds Platform, our product development in 2024 and beyond, expectations regarding customer retention, revenue growth and market expansion, and the impact of the global econo ...

Recent Business Highlights Balance Sheet At March 31, 2024, total cash and cash equivalents and short-term investments were $312.8 million, and total debt was $1.2 billion. The special cash dividend of $168.2 million declared in March and reflected as a current liability on our balance sheet as of March 31, 2024 was paid on April 15, 2024. The financial results included in this press release are preliminary and pending final review by the company and its external auditors. Financial results will not be fina ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 10-K (Mark One) ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38711 SolarWinds Corporation (Exact name of registrant as specified in its charter) Delaware 81-0753267 (State or other jurisdiction ...