solarwinds(US:SWI)2024-10-31 12:01Financial Performance - Total revenue for Q3 2024 was $200.0 million, representing a 6% year-over-year growth, with total recurring revenue accounting for 94% of total revenue[2] - Net income for Q3 2024 was $12.6 million, and adjusted EBITDA was $96.0 million, reflecting a margin of 48% and a 13% year-over-year growth[2] - Subscription Annual Recurring Revenue (ARR) reached $289.5 million, marking a 36% year-over-year growth, while Total ARR was $724.1 million, representing an 8% year-over-year growth[2] - For Q4 2024, total revenue is expected to be in the range of $201 to $204 million, indicating approximately 2% growth compared to Q4 2023[7] - Adjusted EBITDA for Q4 2024 is projected to be approximately $95 to $98 million, representing an 11% growth over Q4 2023[7] - For the full year 2024, total revenue is anticipated to be between $788 to $791 million, reflecting a 4% growth over the full year 2023[8] - Adjusted EBITDA for the full year 2024 is expected to be approximately $376 to $379 million, indicating a 15% growth over the full year 2023[8] - Subscription revenue for Q3 2024 reached $76,463, up 30% from $58,764 in Q3 2023[28] - Total recurring revenue increased to $187,095 in Q3 2024, a 7% rise from $175,179 in Q3 2023[28] - Total revenue for the nine months ended September 30, 2024, was $586,586, compared to $560,601 for the same period in 2023[28] - Total revenue for the three months ended September 30, 2024, was $200,025 thousand, representing a growth rate of 5.5% compared to $189,591 thousand for the same period in 2023[34] - Non-GAAP total revenue on a constant currency basis for the nine months ended September 30, 2024, was $585,944 thousand, reflecting a growth rate of 4.5% from $560,601 thousand in 2023[34] - Total revenue for the nine months ended September 30, 2024, was $586,586 thousand, showing a growth rate of 4.6% from $560,601 thousand in 2023[34] Cash and Debt Management - As of September 30, 2024, total cash and cash equivalents were $199.2 million, while total debt stood at $1.2 billion[5] - Cash and cash equivalents decreased from $284,695 million to $193,017 million, a drop of about 32.3%[27] - Long-term debt increased slightly from $1,190,934 million to $1,195,846 million, indicating a marginal rise[27] - Total liabilities decreased from $1,808,871 million to $1,754,061 million, a decline of approximately 3.0%[27] - Total stockholders' equity decreased from $1,442,044 million to $1,364,363 million, a decline of approximately 5.4%[27] Operating Performance - Operating income for Q3 2024 was $51,684, significantly higher than $38,525 in Q3 2023[28] - Cash flows from operating activities for the nine months ended September 30, 2024, totaled $115,518, slightly down from $118,189 in the same period last year[29] - Total operating expenses for the nine months ended September 30, 2024, were $376,420, a decrease from $388,441 in the same period last year[28] - Cash paid for income taxes increased to $51,704 for the nine months ended September 30, 2024, compared to $32,477 in 2023[30] Profitability Metrics - GAAP gross profit for Q3 2024 was $179,012 thousand, compared to $168,222 thousand in Q3 2023, representing a 1.0% increase[31] - Non-GAAP gross profit for Q3 2024 was $180,957 thousand, up from $172,153 thousand in Q3 2023, reflecting a 5.2% growth[31] - GAAP operating income increased to $51,684 thousand in Q3 2024 from $38,525 thousand in Q3 2023, marking a 34.0% rise[32] - Non-GAAP operating income for Q3 2024 was $88,705 thousand, compared to $81,162 thousand in Q3 2023, indicating a 9.4% increase[32] - GAAP net income for Q3 2024 was $12,570 thousand, recovering from a net loss of $3,172 thousand in Q3 2023[32] - Non-GAAP net income for Q3 2024 reached $46,863 thousand, up from $38,013 thousand in Q3 2023, a 23.5% increase[32] - Adjusted EBITDA for Q3 2024 was $96,036 thousand, compared to $85,062 thousand in Q3 2023, reflecting a 12.0% growth[33] - Adjusted EBITDA margin improved to 48.0% in Q3 2024 from 44.9% in Q3 2023[33] - GAAP diluted earnings per share for Q3 2024 was $0.07, compared to a loss of $0.02 per share in Q3 2023[32] - Non-GAAP diluted earnings per share increased to $0.27 in Q3 2024 from $0.23 in Q3 2023, a 17.4% rise[32] Asset Management - Total assets decreased from $3,250,915 million as of December 31, 2023, to $3,118,424 million as of September 30, 2024, representing a decline of approximately 4.1%[27] - Current assets decreased from $421,327 million to $325,839 million, a reduction of about 22.7%[27] Future Outlook - The company expects to incur significant legal and professional service expenses related to a Cyber Incident in future periods, impacting operational costs[21] - Recent product enhancements include expanded capabilities in SolarWinds Observability offerings, including AI-driven features and improved cloud monitoring[4] - SolarWinds received multiple industry recognitions, including the 2024 GigaOm Radar Reports for Network and Cloud Observability[4] Cash Flow Analysis - Free cash flow for the nine months ended September 30, 2024, was $100,004 thousand, down from $104,785 thousand in 2023[36] - Unlevered free cash flow for the nine months ended September 30, 2024, was $174,195 thousand, compared to $171,037 thousand in 2023[36] - Cash paid for acquisition and other costs for the nine months ended September 30, 2024, was $18,180 thousand, significantly higher than $8,370 thousand in 2023[36] - Capital expenditures for the nine months ended September 30, 2024, totaled $(15,514) thousand, compared to $(13,404) thousand in 2023[36] - Forfeited tax shield related to interest payments for the nine months ended September 30, 2024, was $(21,036) thousand, compared to $(21,660) thousand in 2023[36]