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SolarWinds Announces Fourth Quarter and Full Year 2013 Results

SolarWinds, a leading provider of powerful and affordable IT management software, today reported results for its fourth quarter and full year ended December 31, 2013.

  • Total revenue for the fourth quarter of $97.1 million, representing 32.0% year-over-year growth.
  • Combined maintenance and subscription revenue for the fourth quarter of $57.6 million, representing 42.2% year-over-year growth in recurring revenue.
  • License revenue for the fourth quarter of $39.5 million, representing 19.6% year-over-year growth.
  • GAAP diluted earnings per share of $0.29 and non-GAAP diluted earnings per share of $0.41 for the fourth quarter.
  • GAAP operating income of $30.4 million, or a GAAP operating margin of 31.3%, and non-GAAP operating income of $43.6 million, or a non-GAAP operating margin of 44.9% for the fourth quarter.

Financial Results SolarWinds reported total revenue for the fourth quarter of 2013 of $97.1 million, a 32.0% increase over total revenue for the fourth quarter of 2012. Total recurring revenue, comprised of subscription revenue of $3.9 million and record maintenance revenue of $53.7 million, reached $57.6 million, increasing by 42.2% over the fourth quarter of 2012 and now represents over 59.3% of total revenue. License revenue increased to a record $39.5 million for the fourth quarter of 2013.

On a GAAP basis, diluted earnings per share were $0.29 for the fourth quarter of 2013, in line with $0.29 for the fourth quarter of 2012. Non-GAAP diluted earnings per share were $0.41 for the fourth quarter of 2013 compared to $0.36 for the fourth quarter of 2012.

Net cash provided by operating activities was $49.7 million for the fourth quarter of 2013 compared to $47.2 million for the fourth quarter of 2012, representing a year-over-year increase of 5.3%. Free cash flow was $49.2 million for the fourth quarter of 2013 compared to $48.0 million for the fourth quarter of 2012.

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 final until SolarWinds files its annual report on Form 10-K for the period. Information about SolarWinds' use of these non-GAAP financial measures is provided below under "Non-GAAP Financial Measures."

Recent Business Highlights

"I am pleased to report that we delivered a strong performance in the fourth quarter. After a challenging start to the year, we implemented a number of improvements in our business focused on the ways in which we generate and respond to demand within our marketing and sales organizations. We believe those improvements, along with the continued efforts of the entire SolarWinds team, translated into a solid level of license and recurring revenue outperformance relative to our outlook for the fourth quarter," said Kevin Thompson, SolarWinds' President and Chief Executive Officer.

"Although we have a number of initiatives we are working on in order to enhance our execution, we believe the investments that we made in sales and marketing have already started to pay dividends. We feel positive about the momentum we have created in our business exiting 2013 and we are focused on driving strong growth in new business, both license and subscription, in 2014," added Thompson.

Recent SolarWinds business highlights include:

  • SolarWinds announced a strategic partnership with AppNeta, a leading provider of cloud-based application performance management solutions. The partnership will enable the two companies to explore opportunities to meaningfully connect IT infrastructure to application delivery to drive an improvement in the overall performance and value of mission-critical business applications.
  • SolarWinds continues to receive honors from the IT community for its portfolio of IT management products. Fourth quarter accolades included the 2013 Windows IT Pro Community Choice Awards which recognized SolarWinds Network Performance Monitor (NPM), Server & Application Monitor (SAM), Database Performance Analyzer (formerly Confio Ignite(R)), Patch Manager, Virtualization Manager, and Mobile Admin(R) with top honors. Awards from TechGenix, Government Security News, and SC Magazine also recognized NPM, SAM, Network Topology Mapper (NTM), Log & Event Manager (LEM), and Network Configuration Manager (NCM).
  • SolarWinds maintained its track record of delivering a wealth of new features and functionality to customers via several product updates. Fourth quarter updates included increased flow processing speed and granularity into network utilization for SolarWinds NetFlow Traffic Analyzer (NTA). SolarWinds also made key enhancements to its security management product portfolio including SolarWinds Log & Event Manager (LEM), Firewall Security Manager (FSM), and Patch Manager. LEM now offers improved automation features to help ensure security and compliance monitoring practices are met on an ongoing basis. Patch Manager now ships with improved setup wizards speeding time to value while FSM is now integrated with SolarWinds' centralized management console providing a single pane of glass between firewall change and configuration management and SolarWinds products for managing networks, systems, and security.
"We are excited about our accomplishments in the fourth quarter and are encouraged by the trajectory of our business. We believe our fourth quarter results reflect an acceleration in our business, but also show a significant increase in investment in an effort to capitalize on the opportunity we see before us," said Jason Ream, SolarWinds' Executive Vice President and Chief Financial Officer. "For 2014, we plan to continue to pursue that opportunity through a number of initiatives intended to improve our rate of new business growth while maintaining a go-to-market approach that is consistent with SolarWinds' efficient business model," added Ream.
Published Wednesday, February 05, 2014 6:45 PM by David Marshall
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