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.