SWI Earnings Prediction
The chart below shows how SWI performed 10 days before and after its earnings report, based on data from the past quarters. Typically, SWI sees a -1.60% change in stock price 10 days leading up to the earnings, and a -1.60% change 10 days following the report. On the earnings day itself, the stock moves by +0.01%. This data can give you a slight idea of what to expect for the next quarter's release.
SWI Key Earning Data
2024/Q4
Year Over Year
Quarter Over Quarter
Total Revenue
200.03M
5.50%
3.51%
Gross Margin
83.77%
1.42%
0.23%
Operating Margin
25.84%
27.17%
0.90%
Net Margin
6.28%
476.05%
9.22%
EPS
0.07
450.00%
16.67%
No Data Available
SWI Earnings Analysis
SolarWinds Corporation Common Stock Corporation (SWI.N) Earnings Conference Call
Positive
Q3 Revenue Surge: 1. Strong Revenue Growth: SolarWinds reported total revenue of $200 million for Q3 2024, reflecting a 6% year-over-year increase, surpassing the high end of their guidance range.
Subscription Revenue Surge: 2. Robust Subscription Revenue: The company achieved a 30% year-over-year growth in subscription revenue, totaling $76 million in Q3 2024, driven by their Subscription First strategy.
Annual Recurring Revenue Increase: 3. High Annual Recurring Revenue (ARR): Total ARR reached $724 million, an 8% increase year-over-year, with subscription ARR growing by 36% to $289 million.
Customer Loyalty Metrics: 4. Strong Customer Retention: The maintenance renewal rate was 96% for Q3 2024, with a trailing 12-month renewal rate of 97%, indicating strong customer loyalty and satisfaction.
Profitability Improvement: 5. Increased Profitability: Adjusted EBITDA for the quarter was $96 million, representing a 13% year-over-year growth and an impressive 48% margin.
Negative
Maintenance Revenue Decline: 1. Decline in Maintenance Revenue: Maintenance revenue decreased by 5% year-over-year to $111 million, reflecting the ongoing transition of customers to subscription products.
License Revenue Decline: 2. Drop in License Revenue: License revenue fell by 10% from $14 million in Q3 2023 to $13 million in Q3 2024, indicating challenges in the traditional licensing model due to the Subscription First strategy.
Net Leverage Analysis: 3. High Net Leverage Ratio: The net leverage ratio was approximately 2.8 times trailing 12-month adjusted EBITDA, which, while improved from 3 times, still indicates a significant level of debt relative to earnings.
Total ARR Growth Slowdown: 4. Limited Growth in Total ARR: Total ARR growth was only 8% year-over-year, suggesting a slowdown in the expansion of recurring revenue streams compared to previous quarters.
Cautious Demand Outlook: 5. Cautious Outlook on Demand Environment: Despite reporting strong results, management indicated a prudent approach to future quarters due to ongoing macroeconomic uncertainties, suggesting potential challenges ahead.
SWI FAQs
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SWI Earning Call Sentiment
SolarWinds Corporation (SWI) Q3 2024 Earnings Call Transcript
1.0x
00:00
00:00
SWI.N
0.05%Positive
The earnings call presents a positive outlook with strong subscription revenue growth (30% YoY), increased ARR, and an EBITDA margin of 48%. Despite a slight decrease in maintenance and license revenues, the focus on subscription strategy and improved profitability (EPS above guidance) are favorable. The Q&A reveals confidence in market alignment and a prudent demand outlook. Furthermore, the raised full-year revenue guidance supports a positive sentiment. Given the company's market cap of around $2 billion, we predict a positive stock price movement of 2% to 8% over the next two weeks.
