SolarWinds Corporation

Q3 2024 total revenue was $200 million, up 6% year over year and above the prior outlook of $196 million. Subscription revenue was $76 million, up 30% year over year; maintenance revenue was $111 million, down 5%; and license revenue was $13 million, down 10%. Total ARR was $724 million, up 8% year over year, and subscription ARR was $289 million, up 36%. Adjusted EBITDA was $96 million, up 13% year over year, with a 48% margin; non-GAAP diluted EPS was $0.27 versus guidance of $0.24 to $0.26. For Q4, SolarWinds expects revenue of $201 million to $204 million, adjusted EBITDA of about $95 million to $98 million, and non-GAAP EPS of $0.27 to $0.28. For full-year 2024, it raised revenue guidance to $788 million to $791 million, adjusted EBITDA to $376 million to $379 million, and non-GAAP EPS to $1.08 to $1.09.

Sudhakar Ramakrishna framed the quarter as another validation of SolarWinds’ Subscription First strategy and the value of its platform. He emphasized that observability, database, and service management offerings are helping customers reduce tool sprawl, lower costs, and improve visibility across hybrid environments. His tone was confident and upbeat, but still measured, repeatedly noting prudent spending, selective investment, and a disciplined go-to-market approach.

Lewis Black highlighted that the business remains highly recurring, with 94% of total revenue now recurring, and pointed to strong profitability as a key feature of the model. He cited $96 million of adjusted EBITDA in Q3, $115.5 million of operating cash flow in the first nine months, $199.2 million of cash and short-term investments at quarter-end, and net leverage of about 2.8x trailing 12-month adjusted EBITDA, down from 3x last quarter. He also said the company expects to pay about $9 million in cash taxes in Q4 and is watching interest rates for opportunities to reduce variable-rate debt further.

Analysts focused on where product traction is strongest, the demand environment, 2025 modeling, margin versus investment tradeoffs, and how Gen AI and SaaS/observability pricing might evolve. Management said demand has been stable rather than dramatically improving or worsening, and that growth is coming from both the install base and some new customer wins, especially where SolarWinds helps bridge on-premises and cloud. On pricing, Sudhakar said consumption-based models are being considered but are not part of the model today, while Gen AI features are being monetized mainly through premium packages and ASP uplift. Lewis said 2025 should be modeled off the implied Q4 exit growth rate and reiterated a focus on platform extension, selective investment, expense discipline, subscription ARR, and profitability.