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SolarWinds Announces First Quarter 2015 Results

SolarWinds (NYSE: SWI), a leading provider of powerful and affordable IT management software, today reported results for its first quarter ended March 31, 2015.

Financial Results

SolarWinds reported total revenue for the first quarter of 2015 of $116.8 million, a 22% increase on a reported basis over total revenue for the first quarter of 2014. Total revenue on a constant currency basis for the first quarter was $121.4 million, a 27% increase over total revenue for the first quarter of 2014. Record total recurring revenue, comprised of maintenance revenue of $63.7 million and subscription revenue of $10.7 million, reached $74.4 million, increasing by 25% on a reported basis over the first quarter of 2014 and increasing by 31% on a constant currency basis, and represents 64% of total revenue. License revenue was $42.4 million for the first quarter of 2015, representing a 17% increase on a reported basis over license revenue for the first quarter of 2014 and a 19% increase on a constant currency basis.

On a GAAP basis, diluted earnings per share were $0.24 for the first quarter of 2015 compared to $0.23 for the first quarter of 2014. Non-GAAP diluted earnings per share were $0.46 for the first quarter of 2015, compared to $0.41 for the first quarter of 2014.

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 quarterly report on Form 10-Q for the period. Information about SolarWinds' use of these non-GAAP financial measures is provided below under "Non-GAAP Financial Measures."

Recent Business Highlights

"The first quarter was a solid start to 2015. We drove strong growth in our core network and systems management products, and in our MSP business, which contributed to healthy overall new business sales growth. We also continued to execute on our goal of becoming the IT management vendor of choice for addressing the complex, connected set of performance problems in today's increasingly hybrid IT infrastructures by acquiring a Cloud-based log management company. We are excited about the numerous opportunities for growth that we believe lie ahead of us," said Kevin Thompson, SolarWinds' President and Chief Executive Officer.

Recent SolarWinds business highlights include:

"We are pleased with our first quarter revenue growth of 27% on a constant currency basis. We believe these results illustrate the strength of our hybrid financial model, highlighted by a growing mix of predictable, recurring revenue, which grew 31% on a constant currency basis," said Jason Ream, SolarWinds' Executive Vice President and Chief Financial Officer.

"In addition, despite the increased level of investment we have made in our business and in our hybrid IT management software strategy, the inherent leverage in our business model was once again reflected in non-GAAP operating margins that exceeded our outlook for the first quarter," added Ream.

Financial Outlook

As of April 28, 2015, SolarWinds is providing its financial outlook for its second quarter of 2015 and full year of 2015. The financial information below represents forward-looking non-GAAP financial information, including an estimate of non-GAAP operating income as a percentage of revenue and non-GAAP diluted earnings per share, for the second quarter of 2015 and for the full year 2015. These non-GAAP financial measures exclude, among other items mentioned below, stock-based compensation expense and related employer-paid payroll taxes. SolarWinds cannot reasonably estimate the expected stock-based compensation expense and related employer-paid payroll taxes for these future periods as the amounts depend upon such factors as the future price of SolarWinds' stock for purposes of computation. In addition, costs related to non-recurring items and acquisitions are not costs that SolarWinds can estimate because they are a function of what non-recurring items and acquisitions, if any, occur and the kind of costs incurred in connection with any such non-recurring items or acquisitions. To determine projected revenue growth rates on a constant currency basis for the second quarter and full year 2015, expected revenue from entities reporting in foreign currencies was translated into U.S. dollars using the comparable prior year period's average foreign currency exchange rates.

Financial Outlook for the Second Quarter of 2015

SolarWinds' management currently expects to achieve the following results for the second quarter of 2015:

Financial Outlook for Full Year 2015

SolarWinds' management currently expects to achieve the following results for the full year 2015:

Conference Call and Webcast

In conjunction with this announcement, SolarWinds will host a conference call today to discuss its financial results, financial outlook and other business at 4:00pm CT (5:00pm ET/2:00pm PT). A live webcast of the event, including any supplemental information, will be available on the SolarWinds Investor Relations website at http://ir.solarwinds.com. A live dial-in will be available domestically at 888-218-8170 and internationally at +1-913-981-5518. To access the live call, please dial in 5-10 minutes before the scheduled start time. A replay of the webcast will be available on a temporary basis shortly after the event on the SolarWinds Investor Relations website.

Published Tuesday, April 28, 2015 5:55 PM by David Marshall
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