Why Is SolarWinds Stock Trading Higher Thursday?

SolarWinds Corp SWI stock climbed after it reported a fourth-quarter FY23 revenue growth of 6% year-on-year to $198.14 million, beating the consensus of $190.44 million. 

Adjusted EPS of $0.24 beat the consensus of $0.21.

Maintenance revenue remained flat Y/Y at $115.1 million. Subscription revenue climbed 36.3% Y/Y to $67.7 million, while License revenue declined 31.5% to $15.3 million.

The adjusted gross margin was flatish at 90.8%, and the adjusted EBITDA margin increased by 410 bps to 43.9%.

SolarWinds held $289.2 million in cash and equivalents.

CEO Sudhakar Ramakrishna said, “Our year-over-year growth in full-year revenue, total ARR, subscription revenue, and adjusted EBITDA represent significant progress towards the priorities we set forth at the beginning of 2023, including our subscription-first strategy, continued focus on customer success and retention, innovation on the SolarWinds Platform, and strong operating discipline.”

Outlook: SolarWinds sees first-quarter revenue of $187.0 million – $192.0 million, versus the consensus of $191.80 million. It sees Q1 adjusted EPS of $0.20 – $0.22 versus the consensus of $0.22.

SolarWinds expects FY24 revenue of $771 million – $786 million versus the consensus of $779.74 million.

SolarWinds expects FY24 adjusted EPS outlook of $0.95 – $1.00 versus the consensus of $0.95.

Price Action: SWI shares traded higher by 4.83% at $13.03 premarket at the last check Thursday.