SolarWinds Corporation, a leading provider of simple, powerful, and secure IT management software, today reported results for its first quarter ended March 31, 2022.

First Quarter Financial Highlights From Continuing Operations

• Total revenue for the first quarter of $176.9 million, representing 1.7% year-over-year growth and total recurring revenue representing 87.2% of total revenue.

• Net loss for the first quarter of $4.7 million.

• Adjusted EBITDA for the first quarter of $68.8 million, representing a margin of 38.9% of total revenue.

"In the first quarter, we made significant progress on our key priorities of customer retention, increased focus on subscription revenue growth, and our accelerated evolution to platform-based solutions with the April launch of Hybrid Observability solutions. Our teams achieved impressive results despite a challenging macro environment, due to the relevance of our solutions, the trust our customers place in us, and the customer success mindset and commitment of our Partners and the entire SolarWinds team," said Sudhakar Ramakrishna, President and Chief Executive Officer, SolarWinds. "Continuing in 2022, we remain focused on growth by helping customers accelerate their business transformation with simple, powerful, and secure solutions."

First Quarter Business Highlights

• The 2022 GigaOm^® Radar for Cloud Observability Solutions rated SolarWinds^® Hybrid Cloud Observability as a Leader and Fast Mover due to our strengths across all key criteria of evaluation, including: reporting and dashboards, user interaction performance, multi-cloud resource view, predictive analysis, and licensing flexibility.

• SolarWinds hosted THWACKcamp^TM 2022 on March 2-3, a virtual event with over 2,200 attendees and marking our tenth year of this event. A key source of primary research and customer preferences, our vibrant THWACK^® community of more than 180,000 registered members continues to grow with IT, Dev, Sec, and Cloud Ops professionals.

• SolarWinds announced the acquisition of Monalytic, a provider of monitoring, analytics, and professional services to the public sector, which helps SolarWinds provide federal customers with around-the-clock support to help optimize and secure their dynamic IT environments.

• SolarWinds hosted its EMEA Virtual Partner Summit February 8-10, the APJ Partner Summit February 15-17, Government and Education Virtual User Group March 22, and North American Virtual Partner Summit March 22-24.

• SolarWinds sponsored and participated in several key industry events including AFCEA West in San Diego, California and SQLBits in London.

• SolarWinds announced key findings from its seventh Public Sector Cybersecurity Survey report, including a shift to external threats as the leading public sector security concern for the first time in five years.

• CRN^®, a brand of The Channel Company, named Jeff McCullough, SolarWinds' Vice President, Worldwide Partner Sales as one of its 50 Most Influential Channel Chiefs, an award bestowed upon an elite subset of the prestigious 2022 CRN Channel Chiefs list.

• SolarWinds made elements of its comprehensive database management portfolio-SolarWinds Database Performance Analyzer (DPA), SolarWinds SQL Sentry^®, and SolarWinds Database Insights for SQL Server^®- available as fully-transactable solutions in the Microsoft^® Azure^® Marketplace.

• SolarWinds introduced Dynamic Forms support in SolarWinds Service Desk, a modern IT service management (ITSM) solution, allowing agents to collect vital information relevant to customer issues quickly and efficiently, accelerating problem resolution.

Balance Sheet

At March 31, 2022, total cash and cash equivalents were $751.2 million and total debt was $1.9 billion.

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 non-GAAP financial measures is provided below under "Non-GAAP Financial Measures."

SolarWinds completed the previously announced separation and distribution of its managed service provider ("N-able") business into a newly created and separately traded public company, N-able, Inc. on July 19, 2021. N‑able's historical financial results through July 19, 2021, are reflected in SolarWinds' consolidated financial statements as discontinued operations. Effective July 30, 2021, SolarWinds effected a 2:1 reverse stock split of its common stock. As a result of the reverse stock split, all share and per share figures contained in the financial statements have been retroactively restated as if the reverse stock split occurred at the beginning of the periods presented.

Financial Outlook

As of May 5, 2022, SolarWinds is providing its financial outlook for the second quarter and full year of 2022. The financial information below represents forward-looking non-GAAP financial information, including an estimate of adjusted EBITDA margin and non-GAAP diluted earnings per share. These non-GAAP financial measures exclude, among other items mentioned below, stock-based compensation expense and related employer-paid payroll taxes, amortization, certain expenses related to the cyberattack that occurred in December 2020 (the "Cyber Incident"), restructuring costs and other costs related to non-recurring items. We have not reconciled our estimates of these non-GAAP financial measures to their most directly comparable GAAP measure as a result of uncertainty regarding, and the potential variability of, these excluded items in future periods. Accordingly, reconciliation is not available without unreasonable effort, although it is important to note that these excluded items could be material to our results computed in accordance with GAAP in future periods. Our reported results provide reconciliations of non-GAAP financial measures to their nearest GAAP equivalents.

Financial Outlook for Second Quarter of 2022

SolarWinds' management currently expects to achieve the following results for the second quarter of 2022:

• Total revenue in the range of $174 to $177 million, representing a decline of 2% to flat as compared to the second quarter of 2021 total revenue from continuing operations.

• Adjusted EBITDA margin of approximately 37% to 38% of total revenue.

• Non-GAAP diluted earnings per share of $0.20.

• Weighted average outstanding diluted shares of approximately 161.6 million.

Financial Outlook for Full Year of 2022

SolarWinds' management currently expects to achieve the following results for the full year of 2022:

• Total revenue in the range of $730 to $750 million, representing growth of 2% to 4% over the full year of 2021 total revenue from continuing operations.

• Adjusted EBITDA margin of approximately 41% of total revenue.

• Non-GAAP diluted earnings per share of $0.88 to $0.95.

• Weighted average outstanding diluted shares of approximately 162.6 million.