第99.1展示文本
SolarWinds宣布2024年第三季度业绩
德克萨斯州奥斯汀 - 2024年10月31日 - solarwinds公司（纽交所：SWI）是一家领先的简单、强大、安全的可观察性和IT管理软件提供商，今天公布了截至2024年9月30日的第三财季业绩报告。
第三季度财务亮点
•第三季度总营业收入为20000万美元，同比增长6％，总循环营业收入占总营业收入的94％。
•第三季度净利润为1260万美元。
•第三季度调整后的EBITDA为9600万美元，占总营业收入的48%，同比增长13%。
•订阅年度循环收入（ARR）为28950万美元，同比增长36％，总ARR为72410万美元，同比增长8％。
请查看以下表格，了解我们的GAAP与非GAAP结果的调解。
“我们再次取得了出色的季度业绩，特别是第三季度的总营业收入和调整后的EBITDA均超出了我们指导区间的高端，”SolarWinds总裁兼首席执行官Sudhakar Ramakrishna表示。“我们专注于客户成功以及平台解决方案为客户带来的价值继续产生强劲的业绩。我对我们在第三季度的表现感到满意，并对我们实现2024年目标的能力保持信心，同时坚定地致力于丰富客户的生活。”
最新业务亮点
•7月，solarwinds宣布其强大的IT管理解决方案和行业卓越性获得全球认可，包括The Globee。® 网络安全概念奖、2024年BIG创新奖、CRN的2024年渠道首席和多个创新领域的Stevie大奖。® 创新奖。
•今年八月，solarwinds宣布其在2024年GigaOm雷达报告中荣获网络和云观测的领导者称号。
•九月份，solarwinds 庆祝了它的第十个年度IT专业人员日，这是一个表彰那些做着至关重要但常常不为人所见工作的IT专业人员的日子，他们保持着我们的网络和应用程序运行。
•十月初，solarwinds宣布其solarwinds Observability自托管和solarwinds Observability SaaS产品的功能得到拓展，包括更强大的本地网络和制造行业监控、拓展的云监控功能、新的和扩展的人工智能和AIOps驱动功能，以及拓展的网络设备支持。
资产负债表：
截至2024年9月30日，现金及现金等价物和短期投资总额为19920万美元，总债务为12亿美元。
本新闻稿中包含的财务结果为初步数据，需公司及其外部审计师最终审核。财务结果直至solarwinds提交该季度10-Q表报之前都不会是最终数据。有关solarwinds使用非GAAP财务指标的信息请参阅下文“非GAAP财务指标”。
财务展望
截至2024年10月31日，solarwinds提供了2024年第四季度的财务展望以及全年2024年的更新财务展望。以下财务信息代表前瞻性的非GAAP财务信息，包括调整后的EBITDA估计和非GAAP摊薄每股收益。这些非GAAP
财务措施不包括以下提及的其他项目，例如，基于股票的补偿费用和相关由雇主支付的工资税、摊销、与发生在2020年12月的网络攻击事件（“网络事件”）相关的某些费用、重组费用以及与非经常性项目相关的某些其他成本。由于对未来期间中这些排除的项目的不确定性和潜在变动性，我们尚未调和我们对这些前瞻性的非GAAP财务措施的估计与最直接可比的GAAP措施。因此，未经不合理的努力，无法提供调和，尽管重要的是要注意，在未来期间，这些排除的项目可能对我们按照GAAP计算的结果具有重大影响。我们的报告结果提供了非GAAP财务措施与其最接近的GAAP等效措施的调和。
2024年第四季度财务展望
solarwinds目前管理层预计2024年第四季度将取得以下成果：
•营业收入在201到20400万美元区间内，与2023年第四季度营业收入相比增长约2%，位于区间中点。
•调整后的EBITDA约为9500万至9800万美元，较2023年第四季度调整后EBITDA增长约11%，位于区间中点。
•每股非通用会计准则摊薄收益在0.27至0.28美元之间。
•约17500万股加权平均摊薄已发行股份
2024年全年财务展望
SolarWinds的管理层目前预计将在2024年全年实现以下结果：
•2023年全年总营业收入在区间$788到$79100万之间，较区间中点的全年总营业收入增长约4%。
•调整后的EBITDA约为376美元至37900万美元，增长约为15%，比2023全年调整后的EBITDA区间中点增长。
•非通用会计净每股收益为1.08至1.09美元。
•约合17390万股稀释后加权平均流通股
电话会议将提供有关公司展望的更多细节。
电话会议和网络直播
与此公告同时，solarwinds将于今天上午7:30（中部时间8:30/东部时间5:30/太平洋时间5:30）举行电话会议，讨论其财务业绩、业务和业务展望。电话会议的现场网络广播和会议期间提供的材料将在solarwinds投资者关系网站（http://investors.solarwinds.com）上提供。国内拨入电话+1（888）510-2008，国际拨入电话+1（646）960-0306。欲参与电话会议，请在计划开始时间的5-10分钟前拨入并输入会议密码2975715。在活动结束后不久，solarwinds投资者关系网站将提供网络广播的重播。
前瞻性声明
本新闻稿包含“前瞻性”声明，受1995年《私人证券诉讼改革法案》的安全港条款约束，包括关于我们2024年第四季度和全年财务展望的声明。这些前瞻性声明基于管理层的信仰和假设，以及目前管理层掌握的信息。前瞻性声明包括所有非历史事实的陈述，可能被识别为“旨在”，“预期”，“相信”，“can”，“could”，“寻求”，“应该”，“感觉”，“期望”，“将”，“会”，“计划”，“项目”，“打算”，“估计”，“继续”，“可能” 或类似表达，以及这些术语的否定形式。前瞻性声明涉及已知和未知的风险、不确定性和其他因素，可能导致实际结果、表现或成就与前瞻性声明中表达或暗示的任何未来结果、表现或成就有实质不同。可能导致或有助于产生这种差异的因素包括但不限于：(a)与网络安全事件相关的风险，包括关于网络安全事件的诉讼和调查风险，包括因证券交易委员会对我们和我们的首席信息安全官提起的民事诉讼以及我们已经和可能继续承担重大责任。
costs in defending ourselves and may be unsuccessful in doing so, resulting in exposure to potential penalties, judgements, fines, settlement-related costs and other costs and liabilities related thereto, (2) numerous financial, legal, reputational and other risks to us related to the Cyber Incident, including risks that the incident, SolarWinds’ response thereto or litigation related to the Cyber Incident has and may in the future result in the loss of business as a result of termination or non-renewal of agreements, or reduced purchases or upgrades of our products, reputational damage adversely affecting customer, partner, and vendor relationships and investor confidence, increased attrition of personnel and distraction of key and other personnel, indemnity obligations, penalties for violation of applicable laws or regulations, and the incurrence of other liabilities and risks related to the impact of any such costs and liabilities, and (3) the possibility that our steps to secure our internal environment, improve our product development environment, and ensure the security and integrity of the software that we deliver to our customers may not be successful or sufficient to protect against future threat actors or attacks, or be perceived by existing and prospective customers as sufficient to address the harm caused by the Cyber Incident; (b) other risks related to cybersecurity, including that we have experienced and may in the future experience other security incidents and have had and may in the future have vulnerabilities in our systems and services, including to a greater degree, with respect to our legacy products, which vulnerabilities have been and may in the future be exploited, whether through the actions or inactions of our employees, our customers, insider threats or otherwise, which may result in compromises or breaches of our and our customers’ systems or, theft or misappropriation of our and our customers’ confidential, proprietary or personal information, as well as exposure to legal and other liabilities, including the related risk of higher customer, employee and partner attrition and the loss of key personnel, as well as negative impacts to our sales, renewals and upgrades; (c) risks related to the evolving breadth of our sales motion and challenges, investments and additional costs associated with increased selling efforts toward enterprise customers and adopting a subscription first approach; (d) risks relating to increased investments in, and the timing and success of, our transformation from monitoring to observability; (e) risks related to any shifts in our revenue mix and the timing of how we recognize revenue as we transition to subscription; (f) risks related to using artificial intelligence (“AI”) in our business and our solutions, including risks related to evolving laws and regulations regarding the use of AI, machine learning and the receipt, collection, storage, processing and transfer of data as well as the threat of cyberattacks created through AI or leveraging AI; (g) potential foreign exchange gains and losses related to expenses and sales denominated in currencies other than the functional currency of an associated entity; (h) any of the following factors either generally or as a result of the impacts of global macroeconomic conditions, the wars in Israel and Ukraine, geopolitical tensions involving China, disruptions in the global supply chain and energy markets, inflation, recession or recessionary concerns, uncertainty over liquidity concerns in the broader financial services industry and foreign currency exchange rates and their impact on the global economy or on our business operations and financial condition or on the business operations and financial conditions of our customers, their end-customers and our prospective customers: (1) reductions in information technology spending or delays in purchasing decisions by our customers, their end-customers and our prospective customers, (2) the inability to sell products to new customers or to sell additional products or upgrades to our existing customers or to convert our maintenance customers to subscription products, (3) any decline in our renewal or net retention rates or any delay or loss of U.S. government sales, (4) the inability to generate significant volumes of high quality sales leads from our digital marketing initiatives and convert such leads into new business at acceptable conversion rates, (5) the timing and adoption of new products, product upgrades or pricing model changes by us or our competitors, (6) changes in interest rates, (7) risks associated with our international operations and any international expansion efforts and (8) ongoing sanctions and export controls; (i) the possibility that our operating income could fluctuate and may decline as percentage of revenue as we make further expenditures to expand our infrastructure, product offerings and sales motion in order to support additional growth in our business; (j) our ability to compete effectively in the markets we serve and the risks of increased competition as we enter new markets; (k) our ability to attract, retain and motivate employees; (l) any violation of legal and regulatory requirements or any misconduct by our employees or partners; (m) risks associated with increased efforts and costs to comply with ongoing changes in applicable laws and regulations; (n) our inability to successfully identify, complete, and integrate acquisitions and manage our growth effectively; (o) risks associated with our status as a controlled company; and (p) such other risks and uncertainties described more fully in documents filed with or furnished to the Securities and Exchange Commission, including the risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2023 filed on February 16, 2024, our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 filed on August 2, 2024 and our Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 that SolarWinds anticipates filing on or before November 12, 2024. All information provided in this release is as of the date hereof, and SolarWinds undertakes no duty to update this information except as required by law.
Non-GAAP Financial Measures
In addition to financial measures prepared in accordance with GAAP, we use certain non-GAAP financial measures to clarify and enhance our understanding, and aid in the period-to-period comparison, of our performance. We believe that these non-GAAP financial measures provide supplemental information that is meaningful when assessing our operating performance because they exclude the impact of certain amounts that our management and board of directors do not consider part of core operating results when assessing our operational performance, allocating resources, preparing annual budgets and determining compensation. Accordingly, these non-GAAP financial measures may provide insight to investors into the motivation and decision-making of management in operating the business.
SolarWinds also believes that investors and securities analysts use these non-GAAP financial measures to (a) compare and evaluate its performance from period to period and (b) compare its performance to those of its competitors.
There are limitations associated with the use of these non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with GAAP, do not reflect a comprehensive system of accounting and may not be completely comparable to similarly titled measures of other companies due to potential differences in the exact calculation method between companies. Further, these non-GAAP measures exclude certain items that can vary substantially from company to company depending upon their financing and accounting methods, the book value of their assets, their capital structures, and the method by which their assets were acquired. Certain items that are excluded from these non-GAAP financial measures can have a material impact on operating and net income (loss).
As a result, these non-GAAP financial measures have limitations and should not be considered in isolation from, or as a substitute for, the most comparable GAAP measures. SolarWinds' management and board of directors compensate for these limitations by using these non-GAAP financial measures as supplements to GAAP financial measures and by reviewing the reconciliations of the non-GAAP financial measures to their most comparable GAAP financial measure. Set forth in the tables below are the corresponding GAAP financial measures for each non-GAAP financial measure presented. Investors are encouraged to review the reconciliations of these non-GAAP financial measures to their most comparable GAAP financial measures that are set forth in the tables below.
Non-GAAP Revenue on a Constant Currency Basis. We provide non-GAAP revenue on a constant currency basis to provide a framework for assessing our performance, excluding the effect of foreign currency rate fluctuations. To present this information, current period results for entities reporting in currencies other than U.S. Dollars are converted into U.S. Dollars at the average exchange rates in effect during the corresponding prior period presented. We believe that providing non-GAAP revenue on a constant currency basis facilitates the comparison of revenue to prior periods.
Non-GAAP Cost of Revenue and Non-GAAP Operating Income. We provide non-GAAP cost of revenue and non-GAAP operating income and related non-GAAP margins excluding such items as amortization of acquired intangible assets, stock-based compensation expense and related employer-paid payroll taxes, acquisition and other costs, restructuring costs, and Cyber Incident costs. Management believes these measures are useful for the following reasons:
•Amortization of Acquired Intangible Assets. We provide non-GAAP information that excludes expenses related to purchased intangible assets associated with our acquisitions including our acquired technologies. We believe that eliminating this expense from our non-GAAP measures is useful to investors because the amortization of acquired intangible assets can be inconsistent in amount and frequency and is significantly impacted by the timing and magnitude of our acquisition transactions, which also vary in frequency from period to period. Accordingly, we analyze the performance of our operations in each period without regard to such expenses.
•Stock-Based Compensation Expense and Related Employer-Paid Payroll Taxes. We provide non-GAAP information that excludes expenses related to stock-based compensation and related employer-paid payroll taxes. We believe that the exclusion of stock-based compensation expense provides for a better comparison of our operating results to prior periods and to our peer companies as the calculations of stock-based compensation vary from period to period and company to company due to different valuation methodologies, subjective assumptions, and the variety of award types. Employer-paid payroll taxes on stock-based compensation is dependent on our stock price and the timing of the taxable events related to
the equity awards, over which our management has little control and does not correlate to the core operation of our business. Because of these unique characteristics of stock-based compensation and related employer-paid payroll taxes, management excludes these expenses when analyzing the organization’s business performance.
•Acquisition and Other Costs. We exclude certain expense items resulting from acquisitions, such as legal, accounting and advisory fees, changes in fair value of contingent consideration, costs related to integrating the acquired businesses, deferred compensation, severance and retention expense. In addition, we exclude certain costs that are non-recurring, including internal investigation costs. We consider these adjustments, to some extent, to be unpredictable and dependent on a significant number of factors that are outside of our control. Furthermore, acquisitions result in operating expenses we would not have otherwise incurred in the normal course of our organic business operations. We believe that providing these non-GAAP measures that exclude acquisition and other costs allows users of our financial statements to better review and understand the historical and current results of our operations, and also facilitates comparisons to our historical results and results of less acquisitive peer companies, both with and without such adjustments.
•Restructuring Costs. We provide non-GAAP information that excludes restructuring costs such as severance paid in connection with corporate restructuring activities, as well as costs related to the separation of employment with executives of the company. In addition, we exclude lease impairments and other costs incurred in connection with the exiting of certain leased facilities and other contracts as they relate to our corporate restructuring and exit activities. These costs are infrequent, inconsistent in amount and are significantly impacted by the timing and nature of these events. Therefore, although we may incur these types of expenses in the future, we believe that eliminating these costs for purposes of calculating the non-GAAP financial measures facilitates a more meaningful evaluation of our operating performance and comparisons to our past operating performance.
•Cyber Incident Costs. We exclude certain expenses resulting from the Cyber Incident. Expenses include costs to investigate and remediate the Cyber Incident, costs of lawsuits and investigations related thereto, including settlement costs and legal and other professional services, and estimated loss contingencies. Cyber Incident costs are provided net of insurance reimbursements, although the timing of recognizing insurance reimbursements has differed from the timing of recognizing the associated expenses. We expect to incur significant legal and other professional services expenses associated with the Cyber Incident in future periods. The Cyber Incident results in operating expenses that we would not have otherwise incurred by us in the normal course of our organic business operations. We believe that providing non-GAAP measures that exclude these costs facilitates a more meaningful evaluation of our operating performance and comparisons to our past operating performance. We expect to continue to invest significantly in cybersecurity, and such additional investments are not included in the net Cyber Incident costs reported.
Non-GAAP Net Income (Loss) and Non-GAAP Net Income (Loss) Per Diluted Share. We believe that the use of non-GAAP net income (loss) and non-GAAP net income (loss) per diluted share is helpful to our investors to clarify and enhance their understanding of past performance and future prospects. Non-GAAP net income (loss) is calculated as net income (loss) excluding the adjustments to non-GAAP cost of revenue and non-GAAP operating income, certain other non-operating gains and losses and the income tax effect of the non-GAAP exclusions. We define non-GAAP net income (loss) per diluted share as non-GAAP net income (loss) divided by the weighted average outstanding diluted common shares.
Adjusted EBITDA and Adjusted EBITDA Margin. We regularly monitor adjusted EBITDA and adjusted EBITDA margin, as it is a measure we use to assess our operating performance. We define adjusted EBITDA as net income (loss), excluding amortization of acquired intangible assets and developed technology, depreciation expense, stock-based compensation expense and related employer-paid payroll taxes, restructuring costs, acquisition and other costs, Cyber Incident costs, net, interest expense, net, debt-related costs including fees related to our credit agreements, debt extinguishment and refinancing costs, unrealized foreign currency (gains) losses, and income tax expense (benefit). We define adjusted EBITDA margin as adjusted EBITDA divided by total revenue. Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are: although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements. Additionally, adjusted EBITDA: excludes the impact of restructuring impairment charges related to exited leased facilities which may continue to require future cash rent payments;
does not reflect changes in, or cash requirements for, our working capital needs; does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debt; and does not reflect tax payments that may represent a reduction in cash available to us. Other companies, including companies in our industry, may calculate adjusted EBITDA differently, which reduces its usefulness as a comparative measure.
Unlevered Free Cash Flow. Unlevered free cash flow is a measure of our liquidity used by management to evaluate cash flow from operations after the deduction of capital expenditures and prior to the impact of our capital structure, acquisition and other costs, restructuring costs, Cyber Incident costs, net, employer-paid payroll taxes on stock awards and other one-time items, that can be used by us for strategic opportunities and strengthening our balance sheet. However, given our debt obligations, unlevered free cash flow does not represent residual cash flow available for discretionary expenses.
Other Defined Terms
Subscription Annual Recurring Revenue (Subscription ARR). Subscription ARR represents the annualized recurring value of all active subscription contracts at the end of a reporting period.
Total Annual Recurring Revenue (Total ARR). Total ARR represents the sum of Subscription ARR and the annualized value of all maintenance contracts related to perpetual licenses active at the end of a reporting period assuming those contracts are renewed at their existing terms.
We use Subscription ARR and Total ARR to better understand and assess the performance of our business, as our mix of revenue generated from recurring revenue has increased in recent years. Subscription ARR and Total ARR each provides a normalized view of customer retention, renewal and expansion, as well as growth from new customers. Subscription ARR and Total ARR should each be viewed independently of revenue and deferred revenue and are not intended to be combined with or to replace either of those items.
#SWIfinancials
About SolarWinds
SolarWinds (NYSE:SWI) is a leading provider of simple, powerful, secure observability and IT management software built to enable customers to accelerate their digital transformation. Our solutions provide organizations worldwide—regardless of type, size, or complexity—with a comprehensive and unified view of today’s modern, distributed, and hybrid network environments. We continuously engage IT service and operations professionals, DevOps and SecOps professionals, and Database Administrators (DBAs) to understand the challenges they face in maintaining high-performing and highly available IT infrastructures, applications, and environments. The insights we gain from them, in places like our THWACK® community, allow us to address customers’ needs now, and in the future. Our focus on the user and our commitment to excellence in end-to-end hybrid IT management have established SolarWinds as a worldwide leader in solutions for observability, IT service management, application performance, and database management. Learn more today at www.solarwinds.com.
The SolarWinds, SolarWinds & Design, Orion, and THWACK trademarks are the exclusive property of SolarWinds Worldwide, LLC or its affiliates, are registered with the U.S. Patent and Trademark Office, and may be registered or pending registration in other countries. All other SolarWinds trademarks, service marks, and logos may be common law marks or are registered or pending registration. All other trademarks mentioned herein are used for identification purposes only and are trademarks of (and may be registered trademarks of) their respective companies.
© 2024 SolarWinds Worldwide, LLC. All rights reserved.
CONTACTS:
| Media: | Investors: | ||||
Dillon Townsel Phone: 512.571.3455 Media: pr@solarwinds.com | Tim Karaca Phone: 512.498.6739 Investors: ir@solarwinds.com | ||||
SolarWinds Corporation
Condensed Consolidated Balance Sheets
(In thousands, except share and per share information)
(Unaudited)
| September 30, | December 31, | ||||||||||
| 2024 | 2023 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 193,017 | $ | 284,695 | |||||||
| Short-term investments | 6,176 | 4,477 | |||||||||
Accounts receivable, net of allowances of $932 and $743 as of September 30, 2024 and December 31, 2023, respectively | 100,188 | 103,455 | |||||||||
| Income tax receivable | 1,426 | 459 | |||||||||
| Prepaid and other current assets | 25,032 | 28,241 | |||||||||
| Total current assets | 325,839 | 421,327 | |||||||||
| Property and equipment, net | 17,210 | 19,669 | |||||||||
| Operating lease assets | 34,325 | 43,776 | |||||||||
| Deferred taxes | 137,931 | 133,224 | |||||||||
| Goodwill | 2,405,876 | 2,397,545 | |||||||||
| Intangible assets, net | 143,764 | 183,688 | |||||||||
| Other assets, net | 53,479 | 51,686 | |||||||||
| Total assets | $ | 3,118,424 | $ | 3,250,915 | |||||||
| Liabilities and stockholders’ equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 9,406 | $ | 9,701 | |||||||
| Accrued liabilities and other | 44,348 | 56,643 | |||||||||
| Current operating lease liabilities | 14,224 | 14,925 | |||||||||
| Accrued interest payable | 262 | 942 | |||||||||
| Income taxes payable | 44,335 | 29,240 | |||||||||
| Current portion of deferred revenue | 335,384 | 344,907 | |||||||||
| Current debt obligation | 9,267 | 12,450 | |||||||||
| Total current liabilities | 457,226 | 468,808 | |||||||||
| Long-term liabilities: | |||||||||||
| Deferred revenue, net of current portion | 43,548 | 42,070 | |||||||||
| Non-current deferred taxes | 1,955 | 1,933 | |||||||||
| Non-current operating lease liabilities | 39,900 | 49,848 | |||||||||
| Other long-term liabilities | 15,586 | 55,278 | |||||||||
| Long-term debt, net of current portion | 1,195,846 | 1,190,934 | |||||||||
| Total liabilities | 1,754,061 | 1,808,871 | |||||||||
| Commitments and contingencies | |||||||||||
| Stockholders’ equity: | |||||||||||
Common stock, $0.001 par value: 1,000,000,000 shares authorized and 170,541,946 and 166,637,506 shares issued and outstanding as of September 30, 2024 and December 31, 2023 respectively | 171 | 167 | |||||||||
Preferred stock, $0.001 par value: 50,000,000 shares authorized and no shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively | — | — | |||||||||
| Additional paid-in capital | 2,561,560 | 2,688,854 | |||||||||
| Accumulated other comprehensive loss | (17,727) | (28,103) | |||||||||
| Accumulated deficit | (1,179,641) | (1,218,874) | |||||||||
| Total stockholders’ equity | 1,364,363 | 1,442,044 | |||||||||
| Total liabilities and stockholders’ equity | $ | 3,118,424 | $ | 3,250,915 | |||||||
SolarWinds Corporation
Condensed Consolidated Statements of Operations
(In thousands, except per share information)
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Subscription | $ | 76,463 | $ | 58,764 | $ | 215,253 | $ | 166,510 | |||||||||||||||
| Maintenance | 110,632 | 116,415 | 332,658 | 346,949 | |||||||||||||||||||
| Total recurring revenue | 187,095 | 175,179 | 547,911 | 513,459 | |||||||||||||||||||
| License | 12,930 | 14,412 | 38,675 | 47,142 | |||||||||||||||||||
| Total revenue | 200,025 | 189,591 | 586,586 | 560,601 | |||||||||||||||||||
| Cost of revenue: | |||||||||||||||||||||||
| Cost of recurring revenue | 19,692 | 17,957 | 56,345 | 54,884 | |||||||||||||||||||
| Amortization of acquired technologies | 1,321 | 3,412 | 5,752 | 10,273 | |||||||||||||||||||
| Total cost of revenue | 21,013 | 21,369 | 62,097 | 65,157 | |||||||||||||||||||
| Gross profit | 179,012 | 168,222 | 524,489 | 495,444 | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Sales and marketing | 56,954 | 59,675 | 167,179 | 185,429 | |||||||||||||||||||
| Research and development | 26,354 | 27,308 | 80,581 | 75,180 | |||||||||||||||||||
| General and administrative | 32,563 | 31,101 | 94,192 | 91,120 | |||||||||||||||||||
| Amortization of acquired intangibles | 11,457 | 11,613 | 34,468 | 36,712 | |||||||||||||||||||
| Total operating expenses | 127,328 | 129,697 | 376,420 | 388,441 | |||||||||||||||||||
Operating income | 51,684 | 38,525 | 148,069 | 107,003 | |||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||
| Interest expense, net | (25,970) | (29,314) | (80,847) | (87,338) | |||||||||||||||||||
Other expense, net | (704) | (121) | (714) | (197) | |||||||||||||||||||
| Total other expense | (26,674) | (29,435) | (81,561) | (87,535) | |||||||||||||||||||
Income before income taxes | 25,010 | 9,090 | 66,508 | 19,468 | |||||||||||||||||||
| Income tax expense | 12,440 | 12,262 | 27,275 | 28,001 | |||||||||||||||||||
Net income (loss) | $ | 12,570 | $ | (3,172) | $ | 39,233 | $ | (8,533) | |||||||||||||||
Net income (loss) available to common stockholders | $ | 12,570 | $ | (3,172) | $ | 39,233 | $ | (8,533) | |||||||||||||||
Net income (loss) available to common stockholders per share: | |||||||||||||||||||||||
Basic income (loss) per share | $ | 0.07 | $ | (0.02) | $ | 0.23 | $ | (0.05) | |||||||||||||||
Diluted income (loss) per share | $ | 0.07 | $ | (0.02) | $ | 0.23 | $ | (0.05) | |||||||||||||||
Weighted-average shares used to compute net income (loss) available to common stockholders per share: | |||||||||||||||||||||||
Shares used in computation of basic income (loss) per share | 169,971 | 165,275 | 168,724 | 164,089 | |||||||||||||||||||
Shares used in computation of diluted income (loss) per share | 173,900 | 165,275 | 173,071 | 164,089 | |||||||||||||||||||
SolarWinds Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
| Nine Months Ended September 30, | |||||||||||
| 2024 | 2023 | ||||||||||
| Cash flows from operating activities | |||||||||||
Net income (loss) | $ | 39,233 | $ | (8,533) | |||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 56,029 | 62,810 | |||||||||
| Provision for losses on accounts receivable | 267 | 300 | |||||||||
| Stock-based compensation expense | 57,221 | 55,103 | |||||||||
| Amortization of debt issuance costs | 7,132 | 8,050 | |||||||||
| Deferred taxes | (2,921) | (1,532) | |||||||||
(Gain) loss on foreign currency exchange rates | 377 | (614) | |||||||||
| Lease impairment charges | 2,148 | 11,685 | |||||||||
Other non-cash expenses | 200 | 359 | |||||||||
Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | 3,331 | 7,908 | |||||||||
| Income taxes receivable | (925) | (171) | |||||||||
| Prepaid and other assets | 4,549 | 24,057 | |||||||||
| Accounts payable | (300) | (5,020) | |||||||||
| Accrued liabilities and other | (16,211) | (25,025) | |||||||||
| Accrued interest payable | (680) | 47 | |||||||||
| Income taxes payable | (24,142) | (6,024) | |||||||||
| Deferred revenue | (9,790) | (5,211) | |||||||||
| Net cash provided by operating activities | 115,518 | 118,189 | |||||||||
| Cash flows from investing activities | |||||||||||
| Purchases of investments | (25,064) | (3,948) | |||||||||
| Maturities of investments | 23,699 | 27,535 | |||||||||
| Purchases of property and equipment | (4,457) | (3,000) | |||||||||
Capitalized software development costs | (10,823) | (10,232) | |||||||||
| Purchases of intangible assets | (234) | (172) | |||||||||
| Other investing activities | — | 564 | |||||||||
| Net cash provided by (used in) investing activities | (16,879) | 10,747 | |||||||||
| Cash flows from financing activities | |||||||||||
| Proceeds from issuance of common stock under employee stock purchase plan | 3,262 | 3,377 | |||||||||
Repurchase of common stock | (20,516) | (14,696) | |||||||||
| Exercise of stock options | 42 | 114 | |||||||||
| Dividends paid | (168,162) | — | |||||||||
| Proceeds from credit agreement | 10,001 | — | |||||||||
| Repayments of borrowings from credit agreement | (10,001) | (6,226) | |||||||||
| Payment of debt issuance costs | (5,657) | — | |||||||||
| Net cash used in financing activities | (191,031) | (17,431) | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | 714 | (1,012) | |||||||||
Net increase (decrease) in cash and cash equivalents | (91,678) | 110,493 | |||||||||
| Cash and cash equivalents | |||||||||||
| Beginning of period | 284,695 | 121,738 | |||||||||
| End of period | $ | 193,017 | $ | 232,231 | |||||||
| Nine Months Ended September 30, | |||||||||||
| 2024 | 2023 | ||||||||||
| Supplemental disclosure of cash flow information | |||||||||||
| Cash paid for interest | $ | 80,907 | $ | 83,308 | |||||||
| Cash paid for income taxes | $ | 51,704 | $ | 32,477 | |||||||
| Non-cash investing and financing transactions | |||||||||||
| Stock-based compensation included in capitalized software development costs | $ | 863 | $ | 946 | |||||||
SolarWinds Corporation
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| (in thousands, except margin data) | |||||||||||||||||||||||
| GAAP cost of revenue | $ | 21,013 | $ | 21,369 | $ | 62,097 | $ | 65,157 | |||||||||||||||
| Stock-based compensation expense and related employer-paid payroll taxes | (624) | (519) | (1,831) | (1,589) | |||||||||||||||||||
| Amortization of acquired technologies | (1,321) | (3,412) | (5,752) | (10,273) | |||||||||||||||||||
| Restructuring costs | — | — | (39) | (377) | |||||||||||||||||||
| Non-GAAP cost of revenue | $ | 19,068 | $ | 17,438 | $ | 54,475 | $ | 52,918 | |||||||||||||||
| GAAP gross profit | $ | 179,012 | $ | 168,222 | $ | 524,489 | $ | 495,444 | |||||||||||||||
| Stock-based compensation expense and related employer-paid payroll taxes | 624 | 519 | 1,831 | 1,589 | |||||||||||||||||||
| Amortization of acquired technologies | 1,321 | 3,412 | 5,752 | 10,273 | |||||||||||||||||||
| Restructuring costs | — | — | 39 | 377 | |||||||||||||||||||
| Non-GAAP gross profit | $ | 180,957 | $ | 172,153 | $ | 532,111 | $ | 507,683 | |||||||||||||||
| GAAP gross margin | 89.5 | % | 88.7 | % | 89.4 | % | 88.4 | % | |||||||||||||||
| Non-GAAP gross margin | 90.5 | % | 90.8 | % | 90.7 | % | 90.6 | % | |||||||||||||||
| GAAP sales and marketing expense | $ | 56,954 | $ | 59,675 | $ | 167,179 | $ | 185,429 | |||||||||||||||
| Stock-based compensation expense and related employer-paid payroll taxes | (6,178) | (7,236) | (17,275) | (18,962) | |||||||||||||||||||
| Acquisition and other costs | — | (213) | — | (213) | |||||||||||||||||||
| Restructuring costs | (537) | (240) | (1,599) | (2,857) | |||||||||||||||||||
| Non-GAAP sales and marketing expense | $ | 50,239 | $ | 51,986 | $ | 148,305 | $ | 163,397 | |||||||||||||||
| GAAP research and development expense | $ | 26,354 | $ | 27,308 | $ | 80,581 | $ | 75,180 | |||||||||||||||
| Stock-based compensation expense and related employer-paid payroll taxes | (3,535) | (3,347) | (10,620) | (9,772) | |||||||||||||||||||
| Restructuring costs | — | (1,703) | (889) | (1,945) | |||||||||||||||||||
| Non-GAAP research and development expense | $ | 22,819 | $ | 22,258 | $ | 69,072 | $ | 63,463 | |||||||||||||||
| GAAP general and administrative expense | $ | 32,563 | $ | 31,101 | $ | 94,192 | $ | 91,120 | |||||||||||||||
| Stock-based compensation expense and related employer-paid payroll taxes | (9,694) | (9,785) | (29,114) | (26,264) | |||||||||||||||||||
| Acquisition and other costs | 32 | (1,591) | (960) | (1,715) | |||||||||||||||||||
| Restructuring costs | (1,175) | (77) | (4,300) | (15,035) | |||||||||||||||||||
| Cyber Incident costs, net | (2,532) | (2,901) | (7,641) | 4,289 | |||||||||||||||||||
| Non-GAAP general and administrative expense | $ | 19,194 | $ | 16,747 | $ | 52,177 | $ | 52,395 | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| (in thousands, except margin data) | |||||||||||||||||||||||
| GAAP operating expenses | $ | 127,328 | $ | 129,697 | $ | 376,420 | $ | 388,441 | |||||||||||||||
| Stock-based compensation expense and related employer-paid payroll taxes | (19,407) | (20,368) | (57,009) | (54,998) | |||||||||||||||||||
| Amortization of acquired intangibles | (11,457) | (11,613) | (34,468) | (36,712) | |||||||||||||||||||
| Acquisition and other costs | 32 | (1,804) | (960) | (1,928) | |||||||||||||||||||
| Restructuring costs | (1,712) | (2,020) | (6,788) | (19,837) | |||||||||||||||||||
| Cyber Incident costs, net | (2,532) | (2,901) | (7,641) | 4,289 | |||||||||||||||||||
| Non-GAAP operating expenses | $ | 92,252 | $ | 90,991 | $ | 269,554 | $ | 279,255 | |||||||||||||||
| GAAP operating income | $ | 51,684 | $ | 38,525 | $ | 148,069 | $ | 107,003 | |||||||||||||||
| Stock-based compensation expense and related employer-paid payroll taxes | 20,031 | 20,887 | 58,840 | 56,587 | |||||||||||||||||||
| Amortization of acquired technologies | 1,321 | 3,412 | 5,752 | 10,273 | |||||||||||||||||||
| Amortization of acquired intangibles | 11,457 | 11,613 | 34,468 | 36,712 | |||||||||||||||||||
| Acquisition and other costs | (32) | 1,804 | 960 | 1,928 | |||||||||||||||||||
| Restructuring costs | 1,712 | 2,020 | 6,827 | 20,214 | |||||||||||||||||||
| Cyber Incident costs, net | 2,532 | 2,901 | 7,641 | (4,289) | |||||||||||||||||||
| Non-GAAP operating income | $ | 88,705 | $ | 81,162 | $ | 262,557 | $ | 228,428 | |||||||||||||||
| GAAP operating margin | 25.8 | % | 20.3 | % | 25.2 | % | 19.1 | % | |||||||||||||||
| Non-GAAP operating margin | 44.3 | % | 42.8 | % | 44.8 | % | 40.7 | % | |||||||||||||||
| GAAP net income (loss) | $ | 12,570 | $ | (3,172) | $ | 39,233 | $ | (8,533) | |||||||||||||||
| Stock-based compensation expense and related employer-paid payroll taxes | 20,031 | 20,887 | 58,840 | 56,587 | |||||||||||||||||||
| Amortization of acquired technologies | 1,321 | 3,412 | 5,752 | 10,273 | |||||||||||||||||||
| Amortization of acquired intangibles | 11,457 | 11,613 | 34,468 | 36,712 | |||||||||||||||||||
| Acquisition and other costs | (32) | 1,804 | 960 | 1,928 | |||||||||||||||||||
| Restructuring costs | 1,712 | 2,020 | 6,827 | 20,214 | |||||||||||||||||||
| Cyber Incident costs, net | 2,532 | 2,901 | 7,641 | (4,289) | |||||||||||||||||||
| Loss on extinguishment of debt | 211 | — | 276 | — | |||||||||||||||||||
Tax benefits associated with above adjustments | (2,939) | (1,452) | (13,003) | (7,930) | |||||||||||||||||||
| Non-GAAP net income | $ | 46,863 | $ | 38,013 | $ | 140,994 | $ | 104,962 | |||||||||||||||
GAAP diluted earnings (loss) per share | $ | 0.07 | $ | (0.02) | $ | 0.23 | $ | (0.05) | |||||||||||||||
| Non-GAAP diluted earnings per share | $ | 0.27 | $ | 0.23 | $ | 0.81 | $ | 0.64 | |||||||||||||||
Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| (in thousands, except margin data) | |||||||||||||||||||||||
Net income (loss) | $ | 12,570 | $ | (3,172) | $ | 39,233 | $ | (8,533) | |||||||||||||||
| Amortization and depreciation | 18,235 | 19,678 | 55,673 | 60,636 | |||||||||||||||||||
| Income tax expense | 12,440 | 12,262 | 27,275 | 28,001 | |||||||||||||||||||
| Interest expense, net | 25,970 | 29,314 | 80,847 | 87,338 | |||||||||||||||||||
Unrealized foreign currency (gains) losses | 539 | (730) | 377 | (614) | |||||||||||||||||||
| Acquisition and other costs | (32) | 1,804 | 960 | 1,928 | |||||||||||||||||||
Debt-related costs | 2,039 | 98 | 2,929 | 301 | |||||||||||||||||||
| Stock-based compensation expense and related employer-paid payroll taxes | 20,031 | 20,887 | 58,840 | 56,587 | |||||||||||||||||||
Restructuring costs(1) | 1,712 | 2,020 | 6,827 | 20,214 | |||||||||||||||||||
| Cyber Incident costs, net | 2,532 | 2,901 | 7,641 | (4,289) | |||||||||||||||||||
| Adjusted EBITDA | $ | 96,036 | $ | 85,062 | $ | 280,602 | $ | 241,569 | |||||||||||||||
| Adjusted EBITDA margin | 48.0 | % | 44.9 | % | 47.8 | % | 43.1 | % | |||||||||||||||
_______
(1)Restructuring costs include non-cash lease impairment and other charges incurred in connection with the exiting of certain leased facilities of $2.8 million and $13.9 million for the nine months ended September 30, 2024 and 2023, respectively.
Reconciliation of Revenue to Non-GAAP Revenue
on a Constant Currency Basis
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2024 | 2023 | Growth Rate | 2024 | 2023 | Growth Rate | ||||||||||||||||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||||||||||||||||||||
| Total revenue | $ | 200,025 | $ | 189,591 | 5.5 | % | $ | 586,586 | $ | 560,601 | 4.6 | % | |||||||||||||||||||||||
Estimated foreign currency impact(1) | (488) | — | (0.3) | (642) | — | (0.1) | |||||||||||||||||||||||||||||
| Non-GAAP total revenue on a constant currency basis | $ | 199,537 | $ | 189,591 | 5.2 | % | $ | 585,944 | $ | 560,601 | 4.5 | % | |||||||||||||||||||||||
_______
(1)The estimated foreign currency impact is calculated using the average foreign currency exchange rates in the comparable prior year monthly periods and applying those rates to foreign-denominated revenue in the corresponding monthly periods in the three and nine months ended September 30, 2024.
Reconciliation of Unlevered Free Cash Flow
(Unaudited)
| Nine Months Ended September 30, | |||||||||||
| 2024 | 2023 | ||||||||||
| (in thousands) | |||||||||||
| Net cash provided by operating activities | $ | 115,518 | $ | 118,189 | |||||||
Capital expenditures(1) | (15,514) | (13,404) | |||||||||
| Free cash flow | 100,004 | 104,785 | |||||||||
| Cash paid for interest and other debt related items | 77,047 | 79,542 | |||||||||
Cash paid for acquisition and other costs, restructuring costs, Cyber Incident costs, net, employer-paid payroll taxes on stock awards and other one-time items | 18,180 | 8,370 | |||||||||
| Unlevered free cash flow (excluding forfeited tax shield) | 195,231 | 192,697 | |||||||||
Forfeited tax shield related to interest payments(2) | (21,036) | (21,660) | |||||||||
Unlevered free cash flow | $ | 174,195 | $ | 171,037 | |||||||
(1)Includes purchases of property and equipment, capitalized software development costs and purchases of intangible assets.
(2)Forfeited tax shield related to interest payments assumes a statutory rate of 26.0% for both the nine months ended September 30, 2024 and 2023.