SolarWinds Clocks Flat Revenue Growth In Q4

  • SolarWinds Corp SWI reported a fourth-quarter FY22 revenue growth of 0.2% year-on-year to $187.1 million, beating the consensus of $180.2 million.
  • Maintenance revenue fell 2.9% Y/Y to $115.1 million. Subscription revenue climbed 44.6% Y/Y to $49.7 million.
  • License revenue declined 34% to $22.3 million.
  • Margins: Non-GAAP gross margin was flattish at 90.6%, and the adjusted EBITDA margin contracted 220 bps to 39.8%.
  • Non-GAAP EPS of $0.19 missed the consensus of $0.20.
  • SolarWinds held $148.9 million in cash and equivalents.
  • CEO Sudhakar Ramakrishna said, "Our fourth quarter demonstrated ongoing progress with the priorities we laid out at the beginning of 2022, including growing traction with our observability solutions and partner ecosystem, continued execution on customer retention, and healthy adjusted EBITDA margins. As we look to 2023, we remain focused on helping customers accelerate their digital transformation journeys while we seek to balance growth with profitability."
  • Outlook: SolarWinds sees Q1 revenue of $177 million- $182 million, versus the consensus of $178.85 million.
  • It sees Q1 non-GAAP EPS of $0.15 - $0.17, below the consensus of $0.21.
  • SolarWinds sees FY23 revenue of $725 million - $740 million versus the consensus of $733.69 million.
  • SolarWinds sees FY23 non-GAAP EPS of $0.69 - $0.74, below the consensus of $0.93.
  • Price Action: SWI shares traded lower by 1.88% at $10.45 on the last check Thursday.
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