Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2024 | Apr. 30, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-38711 | |
Entity Registrant Name | SolarWinds Corp | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 81-0753267 | |
Entity Address, Address Line One | 7171 Southwest Parkway | |
Entity Address, Address Line Two | Building 400 | |
Entity Address, City or Town | Austin | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 78735 | |
City Area Code | 512 | |
Local Phone Number | 682.9300 | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Trading Symbol | SWI | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 168,191,919 | |
Entity Central Index Key | 0001739942 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 304,431 | $ 284,695 |
Short-term investments | 8,382 | 4,477 |
Accounts receivable, net of allowances of $776 and $743 as of March 31, 2024 and December 31, 2023, respectively | 102,752 | 103,455 |
Income tax receivable | 603 | 459 |
Prepaid and other current assets | 26,451 | 28,241 |
Total current assets | 442,619 | 421,327 |
Property and equipment, net | 18,641 | 19,669 |
Operating lease assets | 39,848 | 43,776 |
Deferred taxes | 133,288 | 133,224 |
Goodwill | 2,384,077 | 2,397,545 |
Intangible assets, net | 168,624 | 183,688 |
Other assets, net | 51,567 | 51,686 |
Total assets | 3,238,664 | 3,250,915 |
Current liabilities: | ||
Accounts payable | 9,541 | 9,701 |
Accrued liabilities and other | 40,516 | 56,643 |
Current operating lease liabilities | 14,762 | 14,925 |
Accrued interest payable | 1,182 | 942 |
Dividends payable | 168,162 | 0 |
Income taxes payable | 38,038 | 29,240 |
Current portion of deferred revenue | 344,292 | 344,907 |
Current debt obligation | 9,267 | 12,450 |
Total current liabilities | 625,760 | 468,808 |
Long-term liabilities: | ||
Deferred revenue, net of current portion | 41,920 | 42,070 |
Non-current deferred taxes | 1,904 | 1,933 |
Non-current operating lease liabilities | 46,366 | 49,848 |
Other long-term liabilities | 41,795 | 55,278 |
Long-term debt, net of current portion | 1,195,800 | 1,190,934 |
Total liabilities | 1,953,545 | 1,808,871 |
Commitments and contingencies (Note 9) | ||
Stockholders’ equity: | ||
Common stock, $0.001 par value: 1,000,000,000 shares authorized and 168,161,987 and 166,637,506 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively | 168 | 167 |
Preferred stock, $0.001 par value: 50,000,000 shares authorized and no shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively | 0 | 0 |
Additional paid-in capital | 2,532,169 | 2,688,854 |
Accumulated other comprehensive loss | (43,903) | (28,103) |
Accumulated deficit | (1,203,315) | (1,218,874) |
Total stockholders’ equity | 1,285,119 | 1,442,044 |
Total liabilities and stockholders’ equity | $ 3,238,664 | $ 3,250,915 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Assets | ||
Allowance for credit loss, accounts receivable | $ 776 | $ 743 |
Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, issued (in shares) | 168,161,987 | 166,637,506 |
Common stock, outstanding (in shares) | 168,161,987 | 166,637,506 |
Preferred Stock | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenue: | ||
Total revenue | $ 193,311 | $ 185,976 |
Cost of revenue: | ||
Cost of recurring revenue | 18,172 | 18,394 |
Amortization of acquired technologies | 2,664 | 3,436 |
Total cost of revenue | 20,836 | 21,830 |
Gross profit | 172,475 | 164,146 |
Operating expenses: | ||
Sales and marketing | 54,921 | 65,916 |
Research and development | 27,828 | 23,791 |
General and administrative | 31,308 | 25,601 |
Amortization of acquired intangibles | 11,519 | 13,005 |
Total operating expenses | 125,576 | 128,313 |
Operating income | 46,899 | 35,833 |
Other income (expense): | ||
Interest expense, net | (26,830) | (28,581) |
Other income (expense), net | 51 | (89) |
Total other expense | (26,779) | (28,670) |
Income before income taxes | 20,120 | 7,163 |
Income tax expense | 4,561 | 12,784 |
Net income (loss) | 15,559 | (5,621) |
Net income (loss) available to common stockholders | 15,559 | (5,621) |
Net income (loss) available to common stockholders | $ 15,559 | $ (5,621) |
Net income (loss) available to common stockholders per share: | ||
Basic income (loss) per share (in dollars per share) | $ 0.09 | $ (0.03) |
Diluted income (loss) per share (in dollars per share) | $ 0.09 | $ (0.03) |
Weighted-average shares used to compute net income (loss) available to common stockholders per share: | ||
Shares used in computation of basic income (loss) per share (in shares) | 167,419 | 162,773 |
Shares used in computation of diluted income (loss) per share (in shares) | 171,169 | 162,773 |
Recurring Revenue | ||
Revenue: | ||
Total revenue | $ 180,477 | $ 168,835 |
Subscription | ||
Revenue: | ||
Total revenue | 68,757 | 54,357 |
Cost of revenue: | ||
Amortization of acquired technologies | 1,741 | 2,514 |
Maintenance | ||
Revenue: | ||
Total revenue | 111,720 | 114,478 |
License | ||
Revenue: | ||
Total revenue | 12,834 | 17,141 |
Cost of revenue: | ||
Amortization of acquired technologies | $ 923 | $ 922 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 15,559 | $ (5,621) |
Other comprehensive income (loss): | ||
Foreign currency translation adjustment | (15,800) | 10,383 |
Unrealized gains on investments, net of income tax expense of $— and $21 for the three months ended March 31, 2024 and 2023, respectively | 0 | 83 |
Other comprehensive income (loss) | (15,800) | 10,466 |
Comprehensive income (loss) | $ (241) | $ 4,845 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Statement of Comprehensive Income [Abstract] | ||
Tax expense on unrealized gains on investments | $ 0 | $ 21 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit |
Balance at beginning of period (in shares) at Dec. 31, 2022 | 161,929,000 | ||||
Balance at beginning of period at Dec. 31, 2022 | $ 1,369,653 | $ 162 | $ 2,627,370 | $ (48,114) | $ (1,209,765) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Foreign currency translation adjustment | 10,383 | 10,383 | |||
Unrealized (loss) gain on investments, net of taxes | 83 | 83 | |||
Net income (loss) | (5,621) | (5,621) | |||
Comprehensive income (loss) | 4,845 | ||||
Exercise of stock options (in shares) | 6,000 | ||||
Exercise of stock options | 8 | 8 | |||
Restricted stock units issued, net of shares withheld for taxes (in shares) | 1,531,000 | ||||
Restricted stock units issued, net of shares withheld for taxes | (6,991) | $ 2 | (6,993) | ||
Issuance of stock (in shares) | 3,000 | ||||
Issuance of stock | 18 | 18 | |||
Issuance of stock under employee stock purchase plan (in shares) | 198,000 | ||||
Issuance of stock under employee stock purchase plan | 1,711 | 1,711 | |||
Stock-based compensation | 16,556 | 16,556 | |||
Balance at end of period (in shares) at Mar. 31, 2023 | 163,667,000 | ||||
Balance at end of period at Mar. 31, 2023 | $ 1,385,800 | $ 164 | 2,638,670 | (37,648) | (1,215,386) |
Balance at beginning of period (in shares) at Dec. 31, 2023 | 166,637,506 | 166,638,000 | |||
Balance at beginning of period at Dec. 31, 2023 | $ 1,442,044 | $ 167 | 2,688,854 | (28,103) | (1,218,874) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Foreign currency translation adjustment | (15,800) | (15,800) | |||
Unrealized (loss) gain on investments, net of taxes | 0 | ||||
Net income (loss) | 15,559 | 15,559 | |||
Comprehensive income (loss) | (241) | ||||
Exercise of stock options (in shares) | 2,000 | ||||
Exercise of stock options | 8 | 8 | |||
Restricted stock units issued, net of shares withheld for taxes (in shares) | 1,354,000 | ||||
Restricted stock units issued, net of shares withheld for taxes | (8,289) | $ 1 | (8,290) | ||
Issuance of stock under employee stock purchase plan (in shares) | 168,000 | ||||
Issuance of stock under employee stock purchase plan | 1,594 | 1,594 | |||
Special dividend declared ($1.00 per share) | (168,162) | (168,162) | |||
Stock-based compensation | $ 18,165 | 18,165 | |||
Balance at end of period (in shares) at Mar. 31, 2024 | 168,161,987 | 168,162,000 | |||
Balance at end of period at Mar. 31, 2024 | $ 1,285,119 | $ 168 | $ 2,532,169 | $ (43,903) | $ (1,203,315) |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cash flows from operating activities | ||
Net loss | $ 15,559 | $ (5,621) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 19,277 | 22,018 |
Provision for losses on accounts receivable | 62 | 594 |
Stock-based compensation expense | 17,881 | 16,234 |
Amortization of debt issuance costs | 2,657 | 2,666 |
Deferred taxes | (3,043) | 1,906 |
(Gain) loss on foreign currency exchange rates | (230) | 184 |
Lease impairment charges | 1,381 | 5,754 |
Other non-cash expenses (benefit) | (36) | 166 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (327) | (7,930) |
Income taxes receivable | (155) | (312) |
Prepaid and other assets | 2,315 | (6,339) |
Accounts payable | (139) | (5,205) |
Accrued liabilities and other | (16,823) | (33,587) |
Accrued interest payable | 240 | (273) |
Income taxes payable | (4,690) | 3,485 |
Deferred revenue | 2,345 | 7,059 |
Net cash provided by operating activities | 36,274 | 799 |
Cash flows from investing activities | ||
Purchases of investments | (8,311) | 0 |
Maturities of investments | 4,500 | 15,035 |
Purchases of property and equipment | (1,411) | (342) |
Capitalized software development costs | (3,310) | (3,087) |
Purchases of intangible assets | (54) | (51) |
Other investing activities | 0 | 564 |
Net cash provided by (used in) investing activities | (8,586) | 12,119 |
Cash flows from financing activities | ||
Proceeds from issuance of common stock under employee stock purchase plan | 1,594 | 1,711 |
Repurchase of common stock | (8,289) | (6,991) |
Exercise of stock options | 8 | 8 |
Payment of debt issuance costs | (1,036) | 0 |
Net cash used in financing activities | (7,723) | (5,272) |
Effect of exchange rate changes on cash and cash equivalents | (229) | (204) |
Net increase in cash and cash equivalents | 19,736 | 7,442 |
Cash and cash equivalents | ||
Beginning of period | 284,695 | 121,738 |
End of period | 304,431 | 129,180 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 27,083 | 26,740 |
Cash paid for income taxes | 11,144 | 6,566 |
Non-cash investing and financing transactions | ||
Stock-based compensation included in capitalized software development costs | 284 | 322 |
Dividends declared but not paid | $ 168,162 | $ 0 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements Stockholders' Equity (Parentheticals) - $ / shares | 3 Months Ended | |
Mar. 15, 2024 | Mar. 31, 2024 | |
Statement of Stockholders' Equity [Abstract] | ||
Special dividend declared (in dollars per share) | $ 1 | $ 1 |
Organization and Nature of Oper
Organization and Nature of Operations | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Operations | Organization and Nature of OperationsSolarWinds Corporation, a Delaware corporation, and its subsidiaries (“Company,” “we,” “us” and “our”) is a leading provider of simple, powerful and secure observability and information technology, or IT, management software. Our solutions are designed to give organizations worldwide, regardless of type, size or complexity, with a comprehensive and unified view of today’s modern, distributed and hybrid network environments. Our business is focused on building products to enable technology professionals and leaders to securely monitor and manage the performance of their IT environments, whether they be on-premises, in the cloud or in hybrid deployments. Our approach has enabled us to serve the entire IT market and our customers include network and systems engineers, database administrators, storage administrators, DevOps, SecOps and service desk professionals. We sell our products for use in organizations across industries ranging in size from very small businesses to large enterprises. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies We prepared our interim condensed consolidated financial statements in conformity with United States of America generally accepted accounting principles ("GAAP"), and the reporting regulations of the Securities and Exchange Commission (the "SEC"). They do not include all of the information and footnotes required by GAAP for complete financial statements. The accompanying condensed consolidated financial statements include the accounts of SolarWinds Corporation and the accounts of its wholly owned subsidiaries. We have eliminated all intercompany balances and transactions. The interim financial information is unaudited, but reflects all normal adjustments that are, in our opinion, necessary to provide a fair statement of results for the interim periods presented. This interim information should be read in conjunction with the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023. Special Cash Dividend On March 15, 2024, our Board of Directors declared a special cash dividend of $1.00 per share of common stock issued and outstanding as of April 3, 2024. The dividend payable of $168.2 million is recorded on our condensed consolidated balance sheet as of March 31, 2024 and was paid on April 15, 2024. Reclassifications Certain reclassifications have been made to the prior period condensed consolidated statements of cash flows to conform to the current period presentation. These reclassifications did not impact previously reported net income (loss), total assets or net operating, investing or financing cash flows. Use of Estimates The preparation of financial statements in conformity with GAAP requires our management to make estimates and assumptions that affect the reported amounts and the disclosure of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. The actual results that we experience may differ materially from our estimates. The accounting estimates that require our most significant, difficult and subjective judgments include: • the valuation of goodwill, intangibles, long-lived assets and contingent consideration; • revenue recognition; • stock-based compensation; • income taxes; and • loss contingencies. Recently Issued Accounting Pronouncements In November 2023, the FASB issued Accounting Standards Update ("ASU") No. 2023-07 "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures." The updated guidance expands segment disclosures by requiring additional disclosure of significant segment expenses included within segment profit or loss along with other segment information. The updated guidance is effective for public companies for fiscal years beginning after December 15, 2023, and for interim periods beginning after December 15, 2024, and early adoption is permitted. We currently operate as a single reportable segment and while we do not expect the adoption of this guidance to have a material impact on our consolidated financial statements, we will be required to provide enhanced segment disclosures beginning in our Annual Report for the fiscal year ended December 31, 2024 and subsequent interim periods. In December 2023, the FASB issued ASU No. 2023-09 "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. The updated guidance is effective for public companies for fiscal years beginning after December 15, 2024 and early adoption permitted. We currently do not expect that the adoption of this guidance will have a material impact on our consolidated financial statements. Fair Value Measurements We apply the authoritative guidance on fair value measurements for financial assets and liabilities that are measured at fair value on a recurring basis and non-financial assets and liabilities, such as goodwill, intangible assets and property, plant and equipment that are measured at fair value on a non-recurring basis. The guidance establishes a three-tiered fair value hierarchy that prioritizes inputs to valuation techniques used in fair value calculations. The three levels of inputs are defined as follows: Level 1: Unadjusted quoted prices for identical assets or liabilities in active markets accessible by us. Level 2: Inputs that are observable in the marketplace other than those inputs classified as Level 1. Level 3: Inputs that are unobservable in the marketplace and significant to the valuation. We determine the fair value of our available-for-sale securities based on inputs obtained from multiple pricing vendors, who may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs) in determining fair value. However, we classify all of our available-for-sale securities as being valued using Level 2 inputs. The valuation techniques used to determine the fair value of our financial instruments having Level 2 inputs are derived from unadjusted, non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricing models. Our procedures include controls to ensure that appropriate fair values are recorded by a review of the valuation methods and assumptions. See Note 5. Fair Value Measurements for a summary of our financial instruments accounted for at fair value on a recurring basis. The carrying amounts reported in our condensed consolidated balance sheets for cash, accounts receivable, accounts payable and other accrued expenses approximate fair value due to relatively short periods to maturity. Accumulated Other Comprehensive Income (Loss) Changes in accumulated other comprehensive income (loss) by component are summarized below: Foreign Currency Accumulated Other Comprehensive (in thousands) Balance at December 31, 2023 $ (28,103) $ (28,103) Other comprehensive loss before reclassification (15,800) (15,800) Amount reclassified from accumulated other comprehensive income (loss) — — Net current period other comprehensive loss (15,800) (15,800) Balance at March 31, 2024 $ (43,903) $ (43,903) Disaggregation of Revenue The following summarizes the revenue we recognized at a point in time and over time: Three Months Ended March 31, 2024 2023 (in thousands) Revenue recognized at a point in time $ 43,629 $ 37,991 Revenue recognized over time 149,682 147,985 Total revenue recognized $ 193,311 $ 185,976 Deferred Revenue Details of our total deferred revenue balance are as follow s: Total Deferred Revenue (in thousands) Balance at December 31, 2023 $ 386,977 Deferred revenue recognized (132,594) Additional amounts deferred 131,829 Balance at March 31, 2024 $ 386,212 We expect to recognize revenue related to these remaining performance obligations as of March 31, 2024 as follows: Revenue Recognition Expected by Period Total Less than 1-3 years More than (in thousands) Expected recognition of deferred revenue $ 386,212 $ 344,292 $ 40,946 $ 974 Deferred Commissions Details of our deferred commissions balance are as follow s: Deferred Commissions (in thousands) Balance at December 31, 2023 $ 23,563 Commissions capitalized 2,169 Amortization recognized (2,284) Balance at March 31, 2024 $ 23,448 March 31, December 31, 2024 2023 (in thousands) Classified as: Current $ 8,024 $ 7,926 Non-current 15,424 15,637 Total deferred commissions $ 23,448 $ 23,563 Cost of Revenue Amortization of Acquired Technologies. Amortization of acquired technologies included in cost of revenue relate to our licensed products and subscription offerings as follows: Three Months Ended March 31, 2024 2023 (in thousands) Amortization of acquired license technologies $ 923 $ 922 Amortization of acquired subscription technologies 1,741 2,514 Total amortization of acquired technologies $ 2,664 $ 3,436 |
Investments
Investments | 3 Months Ended |
Mar. 31, 2024 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments The following table summarizes our short-term investments: March 31, 2024 Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in thousands) Short-term investments: Available-for-sale securities: U.S. Treasury securities $ 6,966 $ — $ — $ 6,966 Commercial paper 1,416 — — 1,416 Total short-term investments $ 8,382 $ — $ — $ 8,382 December 31, 2023 Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in thousands) Short-term investments: Available-for-sale securities: U.S. Treasury securities $ 3,979 $ 1 $ — $ 3,980 Commercial paper 497 — — 497 Total short-term investments $ 4,476 $ 1 $ — $ 4,477 The following table summarizes the contractual underlying maturities of our available-for-sale securities: March 31, 2024 Cost Fair Value (in thousands) Due in one year or less $ 8,382 $ 8,382 |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The following table reflects the changes in goodwill for the three months ended March 31, 2024: (in thousands) Balance at December 31, 2023 $ 2,397,545 Foreign currency translation (13,468) Balance at March 31, 2024 $ 2,384,077 Accumulated goodwill impairment on our condensed consolidated balance sheet was $894.0 million and $897.2 million as of March 31, 2024 and December 31, 2023, respectively, and is impacted by changes in foreign currency exchange rates. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following table summarizes the fair value of our financial assets that were measured on a recurring basis as of March 31, 2024 and December 31, 2023. There have been no transfers between fair value measurement levels during the three months ended March 31, 2024. Fair Value Measurements at March 31, 2024 Using Quoted Prices in Significant Significant Total (in thousands) Cash equivalents: Money market funds $ 215,718 $ — $ — $ 215,718 U.S. Treasury securities — 997 — 997 Commercial paper — 29,047 — 29,047 Total cash equivalents 215,718 30,044 — 245,762 Short-term investments: U.S. Treasury securities — 6,966 — 6,966 Commercial paper — 1,416 — 1,416 Total short-term investments — 8,382 — 8,382 Total assets $ 215,718 $ 38,426 $ — $ 254,144 Fair Value Measurements at December 31, 2023 Using Quoted Prices in Significant Significant Total (in thousands) Cash equivalents: Money market funds $ 195,017 $ — $ — $ 195,017 U.S. Treasury securities — 1,987 — 1,987 Commercial paper — 31,586 — 31,586 Total cash equivalents 195,017 33,573 — 228,590 Short-term investments: U.S. Treasury securities — 3,980 — 3,980 Commercial paper — 497 — 497 Total short-term investments — 4,477 — 4,477 Total assets $ 195,017 $ 38,050 $ — $ 233,067 As of March 31, 2024 and December 31, 2023, the carrying value of our long-term debt approximates its estimated fair value as the interest rate on the debt agreements is adjusted for changes in the market rates. See Note 6. Debt for additional information regarding our debt. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Debt | Debt The following table summarizes information relating to our debt: March 31, December 31, 2024 2023 Amount Effective Rate Amount Effective Rate (in thousands, except interest rates) Revolving credit facility $ — — % $ — — % First Lien Term Loan (as amended) due Feb 2027 1,235,662 8.58 % 1,235,662 9.11 % Total principal amount 1,235,662 1,235,662 Unamortized discount and debt issuance costs (30,595) (32,278) Total debt 1,205,067 1,203,384 Less: Current portion of long-term debt (9,267) (12,450) Total long-term debt $ 1,195,800 $ 1,190,934 Senior Secured First Lien Credit Facilities In connection with the February 2016 take private transaction, we entered into a first lien credit agreement with a syndicate of institutional lenders and financial institutions (the "Credit Agreement"). In January 2024, we entered into Amendment No. 7 to the Credit Agreement to, among other things, (i) refinance the first lien term loans, (ii) decrease the applicable margin for the existing first lien term loans with respect to secured overnight financing rate (“SOFR”) borrowings and (iii) remove the first lien net leverage ratio component of determining the applicable margin. As a result of the refinancing, the required quarterly principal payments were deferred until the third quarter of 2024. The Credit Agreement, as amended, consisted of the following as of March 31, 2024: • a $1.236 billion U.S. dollar term loan, or First Lien Term Loan, with a final maturity date of February 5, 2027; and • a $130.0 million revolving credit facility (with a letter of credit sub-facility in the amount of $35.0 million), or the Revolving Credit Facility, consisting of (i) a $112.5 million multicurrency tranche and (ii) a $17.5 million tranche available only in U.S. dollars, with a final maturity of the earlier of: November 23, 2027 or, in the event that there are more than $150.0 million of the First Lien Term Loan outstanding on the 91st day prior to maturity date of the first lien term loans, the 91st day prior to the maturity date of the First Lien Term Loan. Borrowings under our Revolving Credit Facility bear interest at a floating rate which is, at our option, either (1) a SOFR rate for a specified interest period plus an applicable margin of 2.25% or (2) a base rate plus an applicable margin of 1.25%, respectively. The SOFR rate applicable to the Revolving Credit Facility is subject to a “floor” of 0.0%. Borrowings under our First Lien Term Loan bear interest at a floating rate which is, at our option, either (1) a SOFR rate for a specified interest period plus an applicable margin of 3.25% or (2) a base rate plus an applicable margin of 2.25%. The SOFR rate applicable to the First Lien Term Loan is subject to a “floor” of 0.0%. The base rate for any day is a fluctuating rate per annum equal to the highest of (a) the rate of interest in effect for such day as publicly announced by the administrative agent, JPMorgan Chase, as its “prime rate” and (b) the federal funds effective rate in effect on such day plus 0.50% and (c) the one-month SOFR rate plus 1.0% per annum. The First Lien Term Loan requires equal quarterly repayments equal to 0.25% of the amended principal amount. In addition to paying interest on loans outstanding under the Revolving Credit Facility and the First Lien Term Loan, we are required to pay a commitment fee of 0.375% per annum of unused commitments under the Revolving Credit Facility. The Credit Agreement contains a number of covenants that, among other things, restrict, subject to certain exceptions, our ability to: incur additional indebtedness; incur liens; engage in mergers, consolidations, liquidations or dissolutions; pay dividends and distributions on, or redeem, repurchase or retire our capital stock; and make certain investments, acquisitions, loans, or advances. In addition, the terms of the Credit Agreement include a financial covenant which requires that, at the end of each fiscal quarter, if the aggregate amount of borrowings under the Revolving Credit Facility exceeds 35% of the aggregate commitments under the Revolving Credit Facility, our first lien net leverage ratio cannot exceed 7.40 to 1.00. The Credit Agreement also contains certain customary representations and warranties, affirmative covenants and events of default. As of March 31, 2024, we were in compliance with all covenants of the Credit Agreement. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Earnings (Loss) Per Share A reconciliation of the number of shares in the calculation of basic and diluted income (loss) per share follows: Three Months Ended March 31, 2024 2023 (in thousands) Basic income (loss) per share Numerator: Net income (loss) $ 15,559 $ (5,621) Earnings allocated to unvested restricted stock (1) — — Net income (loss) available to common stockholders $ 15,559 $ (5,621) Denominator: Weighted-average shares used in computing basic income (loss) per share 167,419 162,773 Diluted income (loss) per share Numerator: Net income (loss) available to common stockholders $ 15,559 $ (5,621) Denominator: Weighted-average shares used in computing basic income (loss) per share 167,419 162,773 Add dilutive impact of employee equity plans 3,750 — Weighted-average shares used in computing diluted income (loss) per share 171,169 162,773 ______ (1) There was no unvested restricted stock outstanding during the three months ended March 31, 2024. The following weighted-average outstanding shares of common stock equivalents were excluded from the computation of the diluted net income (loss) per share attributable to common stockholders for the periods presented because their effect would have been anti-dilutive or the performance condition had not been met at the end of the period: Three Months Ended March 31, 2024 2023 (in thousands) Total anti-dilutive shares 2,574 12,699 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We compute our interim provision for income taxes by applying the estimated annual effective tax rate to year-to-date income before income tax and adjust the provision for discrete tax items recorded in the period. In each quarter, we update the estimated annual effective tax rate and make a year-to-date adjustment to the provision. The estimated annual effective tax rate is subject to volatility due to several factors, including changes in our domestic and foreign earnings, changes to our valuation allowances, material discrete tax items, and the effects of tax law changes. For the three months ended March 31, 2024 and 2023, we recorded income tax expense of $4.6 million and $12.8 million, respectively, resulting in an effective tax rate of 22.7% and 178.5%, respectively. The decrease in the effective tax rates for the three months ended March 31, 2024 compared to the same period in 2023 was primarily a result of the impact of valuation allowances recorded during the periods, changes in our reserves for uncertain tax positions and an increase in our income before income taxes, specifically foreign income, which reduces the estimated annual effective tax rate for the current period. Our policy is to include interest and penalties related to unrecognized tax benefits as a component of income tax expense. At March 31, 2024, we had accrued interest and penalties related to unrecognized tax benefits of approximately $0.5 million. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Cyber Incident As previously disclosed, we were the victim of a cyberattack on our Orion Software Platform and internal systems, or the Cyber Incident. We, together with our partners, have undertaken extensive measures to investigate, contain, eradicate, and remediate the Cyber Incident. Expenses Incurred Expenses incurred as a result of the Cyber Incident for the three months ended March 31, 2024 and 2023 are presented net of insurance proceeds and recorded within general and administrative expense in our condensed consolidated statements of operations. Expenses include costs of lawsuits and investigations related thereto, including legal and other professional services, which are expensed as incurred. We recorded pre-tax expenses (proceeds) related to the Cyber Incident as follows: Three Months Ended March 31, 2024 2023 (in thousands) Gross expenses related to the Cyber Incident $ 3,005 $ 2,028 Less: proceeds received or expected to be received under our insurance coverage — (9,798) Total net expenses (proceeds) related to the Cyber Incident $ 3,005 $ (7,770) Litigation, Claims and Government Investigations As a result of the Cyber Incident, we have been subject to multiple lawsuits and investigations. A consolidated putative class action lawsuit alleging violations of the federal securities laws was filed against us and certain of our current and former officers. The complainants sought certification of a class of all persons who purchased or otherwise acquired our common stock between October 18, 2018 and December 17, 2020 and sought unspecified monetary damages, costs and attorneys’ fees. On October 28, 2022, the parties entered into a binding settlement term sheet with respect to the securities class action lawsuit, and lead plaintiff filed the parties’ Stipulation and Agreement of Settlement with the court on December 8, 2022. On March 2, 2023, we paid $26 million to fund claims submitted by class members, the legal fees of plaintiffs’ counsel and the costs of administering the settlement. On July 28, 2023, the court held a final settlement hearing after which the court entered an order and final judgment approving the settlement. The settlement resolved all claims asserted against us and the other named defendants in connection with the securities class action litigation and contained provisions that the settlement does not constitute an admission, concession, or finding of any fault, liability, or wrongdoing of any kind by us or any defendant. The settlement sum was reimbursed entirely by applicable directors’ and officers’ liability insurance. In addition, two shareholder derivative actions were filed, purportedly on behalf of the Company, one in the Western District of Texas and one in the Delaware Court of Chancery, in each case asserting breach of duty and other claims against certain of our current and former officers and directors in connection with the Cyber Incident. On October 13, 2022, the Delaware Court of Chancery entered an order dismissing the case in that court with prejudice, and on May 17, 2023, the Supreme Court of the State of Delaware entered an order affirming the Delaware Court of Chancery’s judgment. On July 12, 2023, the United States District Court for the Western District of Texas entered a final judgment dismissing the case in that court without prejudice. In addition, we have been subject to several investigations and inquiries by U.S. regulatory authorities related to the Cyber Incident, including from the Department of Justice and the SEC, although currently the only active matter relates to the SEC litigation. On October 30, 2023, the SEC filed a civil complaint, or the SEC Complaint, in the United States District Court for the Southern District of New York naming us and our Chief Information Security Officer, or CISO, as defendants. The SEC Complaint alleges violations of the Exchange Act and the Securities Act relating to our cybersecurity disclosures and public statements, as well as our internal controls and disclosure controls and procedures. The SEC Complaint seeks permanent injunctions against the Company and our CISO, disgorgement of profits, civil penalties and a permanent officer-and-director bar against our CISO. We accrued an immaterial loss contingency related to the SEC investigation during the year ended December 31, 2023. We maintain that our disclosures, public statements, controls and procedures were appropriate, and intend to continue to vigorously defend ourselves. We have incurred, and expect to continue to incur, costs and other expenses in connection with this matter, and the ultimate results of the action initiated by the SEC Complaint are unknown at this time. The Company will continue to evaluate information as it becomes known and will adjust our estimate for losses or will record additional losses at the time or times when it is both probable that a loss has been incurred and the amount of the loss is reasonably estimable. Losses associated with any adverse judgments, settlements, penalties or other resolutions of the SEC Complaint could be material to our business, results of operations, financial condition or cash flows in future periods. Additional lawsuits and claims related to the Cyber Incident may be asserted by or on behalf of customers, stockholders or others seeking damages or other related relief and additional inquiries from governmental agencies may be received or investigations by governmental agencies commenced. Insurance Coverage We maintain $15 million of cybersecurity insurance coverage which renews annually. In addition, we maintain $50 million of directors and officers liability insurance coverage to reduce our exposure to our indemnification obligations for certain expenses incurred by our directors and officers which renews annually. All proceeds from our cybersecurity insurance and our directors and officers liability insurance relating to the losses incurred as a result of the Cyber Incident have been received. Indemnification In connection with the separation and distribution of our managed service provider ("N-able") business into a newly created and separately traded public company, N-able, Inc. (the "Separation"), we entered into a separation and distribution agreement and related agreements with N‑able to govern the Separation and related transactions and the relationship between the respective companies going forward. The separation and distribution agreement provides for certain indemnity and liability obligations, including that we will indemnify N-able for all liabilities based upon, arising out of or related to the Cyber Incident other than certain specified expenses for which N-able will be responsible. The amount of the indemnification liability, if any, cannot be determined and has not been recorded in our condensed consolidated financial statements as of March 31, 2024. Other Matters In addition to the Cyber Incident described above, from time to time we are involved in litigation arising from the normal course of business. In management's opinion, this litigation is not expected to have a material adverse effect on our consolidated financial condition, results of operations or cash flows. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Accounting | We prepared our interim condensed consolidated financial statements in conformity with United States of America generally accepted accounting principles ("GAAP"), and the reporting regulations of the Securities and Exchange Commission (the "SEC"). They do not include all of the information and footnotes required by GAAP for complete financial statements. The accompanying condensed consolidated financial statements include the accounts of SolarWinds Corporation and the accounts of its wholly owned subsidiaries. We have eliminated all intercompany balances and transactions. |
Reclassifications | Certain reclassifications have been made to the prior period condensed consolidated statements of cash flows to conform to the current period presentation. These reclassifications did not impact previously reported net income (loss), total assets or net operating, investing or financing cash flows. |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires our management to make estimates and assumptions that affect the reported amounts and the disclosure of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. The actual results that we experience may differ materially from our estimates. The accounting estimates that require our most significant, difficult and subjective judgments include: • the valuation of goodwill, intangibles, long-lived assets and contingent consideration; • revenue recognition; • stock-based compensation; • income taxes; and • |
Recently Issued Accounting Pronouncements | In November 2023, the FASB issued Accounting Standards Update ("ASU") No. 2023-07 "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures." The updated guidance expands segment disclosures by requiring additional disclosure of significant segment expenses included within segment profit or loss along with other segment information. The updated guidance is effective for public companies for fiscal years beginning after December 15, 2023, and for interim periods beginning after December 15, 2024, and early adoption is permitted. We currently operate as a single reportable segment and while we do not expect the adoption of this guidance to have a material impact on our consolidated financial statements, we will be required to provide enhanced segment disclosures beginning in our Annual Report for the fiscal year ended December 31, 2024 and subsequent interim periods. In December 2023, the FASB issued ASU No. 2023-09 "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. The updated guidance is effective for public companies for fiscal years beginning after December 15, 2024 and early adoption permitted. We currently do not expect that the adoption of this guidance will have a material impact on our consolidated financial statements. |
Fair Value Measurements | We apply the authoritative guidance on fair value measurements for financial assets and liabilities that are measured at fair value on a recurring basis and non-financial assets and liabilities, such as goodwill, intangible assets and property, plant and equipment that are measured at fair value on a non-recurring basis. The guidance establishes a three-tiered fair value hierarchy that prioritizes inputs to valuation techniques used in fair value calculations. The three levels of inputs are defined as follows: Level 1: Unadjusted quoted prices for identical assets or liabilities in active markets accessible by us. Level 2: Inputs that are observable in the marketplace other than those inputs classified as Level 1. Level 3: Inputs that are unobservable in the marketplace and significant to the valuation. We determine the fair value of our available-for-sale securities based on inputs obtained from multiple pricing vendors, who may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs) in determining fair value. However, we classify all of our available-for-sale securities as being valued using Level 2 inputs. The valuation techniques used to determine the fair value of our financial instruments having Level 2 inputs are derived from unadjusted, non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricing models. Our procedures include controls to ensure that appropriate fair values are recorded by a review of the valuation methods and assumptions. See Note 5. Fair Value Measurements for a summary of our financial instruments accounted for at fair value on a recurring basis. The carrying amounts reported in our condensed consolidated balance sheets for cash, accounts receivable, accounts payable and other accrued expenses approximate fair value due to relatively short periods to maturity. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Changes in Accumulated Other Comprehensive Income (Loss) by Component | Changes in accumulated other comprehensive income (loss) by component are summarized below: Foreign Currency Accumulated Other Comprehensive (in thousands) Balance at December 31, 2023 $ (28,103) $ (28,103) Other comprehensive loss before reclassification (15,800) (15,800) Amount reclassified from accumulated other comprehensive income (loss) — — Net current period other comprehensive loss (15,800) (15,800) Balance at March 31, 2024 $ (43,903) $ (43,903) |
Disaggregation of Revenue | The following summarizes the revenue we recognized at a point in time and over time: Three Months Ended March 31, 2024 2023 (in thousands) Revenue recognized at a point in time $ 43,629 $ 37,991 Revenue recognized over time 149,682 147,985 Total revenue recognized $ 193,311 $ 185,976 |
Details of Total Deferred Revenue Balance | Details of our total deferred revenue balance are as follow s: Total Deferred Revenue (in thousands) Balance at December 31, 2023 $ 386,977 Deferred revenue recognized (132,594) Additional amounts deferred 131,829 Balance at March 31, 2024 $ 386,212 |
Remaining Performance Obligations For Revenue Recognition | We expect to recognize revenue related to these remaining performance obligations as of March 31, 2024 as follows: Revenue Recognition Expected by Period Total Less than 1-3 years More than (in thousands) Expected recognition of deferred revenue $ 386,212 $ 344,292 $ 40,946 $ 974 |
Details of Contract Acquisition Cost | Details of our deferred commissions balance are as follow s: Deferred Commissions (in thousands) Balance at December 31, 2023 $ 23,563 Commissions capitalized 2,169 Amortization recognized (2,284) Balance at March 31, 2024 $ 23,448 March 31, December 31, 2024 2023 (in thousands) Classified as: Current $ 8,024 $ 7,926 Non-current 15,424 15,637 Total deferred commissions $ 23,448 $ 23,563 |
Amortization of Acquired Technologies | Amortization of Acquired Technologies. Amortization of acquired technologies included in cost of revenue relate to our licensed products and subscription offerings as follows: Three Months Ended March 31, 2024 2023 (in thousands) Amortization of acquired license technologies $ 923 $ 922 Amortization of acquired subscription technologies 1,741 2,514 Total amortization of acquired technologies $ 2,664 $ 3,436 |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Available-for-Sale Securities Reconciliation | The following table summarizes our short-term investments: March 31, 2024 Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in thousands) Short-term investments: Available-for-sale securities: U.S. Treasury securities $ 6,966 $ — $ — $ 6,966 Commercial paper 1,416 — — 1,416 Total short-term investments $ 8,382 $ — $ — $ 8,382 December 31, 2023 Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in thousands) Short-term investments: Available-for-sale securities: U.S. Treasury securities $ 3,979 $ 1 $ — $ 3,980 Commercial paper 497 — — 497 Total short-term investments $ 4,476 $ 1 $ — $ 4,477 |
Schedule of Investments Classified by Contractual Maturity Date | The following table summarizes the contractual underlying maturities of our available-for-sale securities: March 31, 2024 Cost Fair Value (in thousands) Due in one year or less $ 8,382 $ 8,382 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table reflects the changes in goodwill for the three months ended March 31, 2024: (in thousands) Balance at December 31, 2023 $ 2,397,545 Foreign currency translation (13,468) Balance at March 31, 2024 $ 2,384,077 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Assets Measured on a Recurring Basis | The following table summarizes the fair value of our financial assets that were measured on a recurring basis as of March 31, 2024 and December 31, 2023. There have been no transfers between fair value measurement levels during the three months ended March 31, 2024. Fair Value Measurements at March 31, 2024 Using Quoted Prices in Significant Significant Total (in thousands) Cash equivalents: Money market funds $ 215,718 $ — $ — $ 215,718 U.S. Treasury securities — 997 — 997 Commercial paper — 29,047 — 29,047 Total cash equivalents 215,718 30,044 — 245,762 Short-term investments: U.S. Treasury securities — 6,966 — 6,966 Commercial paper — 1,416 — 1,416 Total short-term investments — 8,382 — 8,382 Total assets $ 215,718 $ 38,426 $ — $ 254,144 Fair Value Measurements at December 31, 2023 Using Quoted Prices in Significant Significant Total (in thousands) Cash equivalents: Money market funds $ 195,017 $ — $ — $ 195,017 U.S. Treasury securities — 1,987 — 1,987 Commercial paper — 31,586 — 31,586 Total cash equivalents 195,017 33,573 — 228,590 Short-term investments: U.S. Treasury securities — 3,980 — 3,980 Commercial paper — 497 — 497 Total short-term investments — 4,477 — 4,477 Total assets $ 195,017 $ 38,050 $ — $ 233,067 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Summary of Debt | The following table summarizes information relating to our debt: March 31, December 31, 2024 2023 Amount Effective Rate Amount Effective Rate (in thousands, except interest rates) Revolving credit facility $ — — % $ — — % First Lien Term Loan (as amended) due Feb 2027 1,235,662 8.58 % 1,235,662 9.11 % Total principal amount 1,235,662 1,235,662 Unamortized discount and debt issuance costs (30,595) (32,278) Total debt 1,205,067 1,203,384 Less: Current portion of long-term debt (9,267) (12,450) Total long-term debt $ 1,195,800 $ 1,190,934 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Shares in Calculation of Basic and Diluted Income (Loss) Per Share | A reconciliation of the number of shares in the calculation of basic and diluted income (loss) per share follows: Three Months Ended March 31, 2024 2023 (in thousands) Basic income (loss) per share Numerator: Net income (loss) $ 15,559 $ (5,621) Earnings allocated to unvested restricted stock (1) — — Net income (loss) available to common stockholders $ 15,559 $ (5,621) Denominator: Weighted-average shares used in computing basic income (loss) per share 167,419 162,773 Diluted income (loss) per share Numerator: Net income (loss) available to common stockholders $ 15,559 $ (5,621) Denominator: Weighted-average shares used in computing basic income (loss) per share 167,419 162,773 Add dilutive impact of employee equity plans 3,750 — Weighted-average shares used in computing diluted income (loss) per share 171,169 162,773 ______ (1) There was no unvested restricted stock outstanding during the three months ended March 31, 2024. |
Weighted Average Shares Excluded From Computation of the Diluted Net Income (Loss) | The following weighted-average outstanding shares of common stock equivalents were excluded from the computation of the diluted net income (loss) per share attributable to common stockholders for the periods presented because their effect would have been anti-dilutive or the performance condition had not been met at the end of the period: Three Months Ended March 31, 2024 2023 (in thousands) Total anti-dilutive shares 2,574 12,699 |
Commitment and Contingencies (T
Commitment and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Loss Contingencies Pre-Tax Expenses (Proceeds) | We recorded pre-tax expenses (proceeds) related to the Cyber Incident as follows: Three Months Ended March 31, 2024 2023 (in thousands) Gross expenses related to the Cyber Incident $ 3,005 $ 2,028 Less: proceeds received or expected to be received under our insurance coverage — (9,798) Total net expenses (proceeds) related to the Cyber Incident $ 3,005 $ (7,770) |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |||
Apr. 15, 2024 | Mar. 15, 2024 | Mar. 31, 2024 | Dec. 31, 2023 | |
Dividends Payable [Line Items] | ||||
Special dividend declared (in dollars per share) | $ 1 | $ 1 | ||
Dividends payable | $ 168,162 | $ 0 | ||
Subsequent Event | ||||
Dividends Payable [Line Items] | ||||
Special dividend paid (in dollars per share) | $ 1 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Changes in Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | $ 1,442,044 | $ 1,369,653 |
Other comprehensive loss before reclassification | (15,800) | |
Amount reclassified from accumulated other comprehensive income (loss) | 0 | |
Other comprehensive income (loss) | (15,800) | 10,466 |
Balance at end of period | 1,285,119 | 1,385,800 |
Accumulated Other Comprehensive Income (Loss) | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | (28,103) | (48,114) |
Balance at end of period | (43,903) | $ (37,648) |
Foreign Currency Translation Adjustments | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | (28,103) | |
Other comprehensive loss before reclassification | (15,800) | |
Amount reclassified from accumulated other comprehensive income (loss) | 0 | |
Other comprehensive income (loss) | (15,800) | |
Balance at end of period | $ (43,903) |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Revenue Recognized at a Point In Time and Over Time (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Total revenue | $ 193,311 | $ 185,976 |
Transferred at Point in Time | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Total revenue | 43,629 | 37,991 |
Transferred over Time | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Total revenue | $ 149,682 | $ 147,985 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Changes in Deferred Revenue (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Movement in Deferred Revenue [Roll Forward] | |
Beginning balance | $ 386,977 |
Deferred revenue recognized | (132,594) |
Additional amounts deferred | 131,829 |
Ending balance | $ 386,212 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Expected Recognition of Deferred Revenue (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected recognition of deferred revenue | $ 386,212 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected recognition of deferred revenue | $ 344,292 |
Remaining revenue performance obligation, expected timing of satisfaction, period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected recognition of deferred revenue | $ 40,946 |
Remaining revenue performance obligation, expected timing of satisfaction, period | 2 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected recognition of deferred revenue | $ 974 |
Remaining revenue performance obligation, expected timing of satisfaction, period |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Change in Contract Acquisition Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | |
Deferred Commissions, Roll Forward [Roll Forward] | ||
Beginning balance | $ 23,563 | |
Commissions capitalized | 2,169 | |
Amortization recognized | (2,284) | |
Ending balance | 23,448 | |
Current | 8,024 | $ 7,926 |
Non-current | 15,424 | 15,637 |
Total deferred commissions | $ 23,448 | $ 23,563 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Cost of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Product Information [Line Items] | ||
Amortization of acquired subscription technologies | $ 2,664 | $ 3,436 |
License | ||
Product Information [Line Items] | ||
Amortization of acquired subscription technologies | 923 | 922 |
Subscription | ||
Product Information [Line Items] | ||
Amortization of acquired subscription technologies | $ 1,741 | $ 2,514 |
Investments - Available-For-Sal
Investments - Available-For-Sale Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Short-term investments: | ||
Cost | $ 8,382 | $ 4,476 |
Gross Unrealized Gains | 0 | 1 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 8,382 | 4,477 |
U.S. Treasury securities | ||
Short-term investments: | ||
Cost | 6,966 | 3,979 |
Gross Unrealized Gains | 0 | 1 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 6,966 | 3,980 |
Commercial paper | ||
Short-term investments: | ||
Cost | 1,416 | 497 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | $ 1,416 | $ 497 |
Investments - Maturity Dates Of
Investments - Maturity Dates Of Available-For-Sale Securities (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Cost | |
Due in one year or less | $ 8,382 |
Fair Value | |
Due in one year or less | $ 8,382 |
Goodwill - Schedule of Goodwill
Goodwill - Schedule of Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Goodwill [Roll Forward] | |
Balance at beginning of period | $ 2,397,545 |
Foreign currency translation | (13,468) |
Balance at end of period | $ 2,384,077 |
Goodwill - Narrative (Details)
Goodwill - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Accumulated goodwill impairment | $ 894 | $ 897.2 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Recurring - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 245,762 | $ 228,590 |
Short-term investments: | 8,382 | 4,477 |
Total assets | 254,144 | 233,067 |
U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments: | 6,966 | 3,980 |
Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments: | 1,416 | 497 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 215,718 | 195,017 |
Short-term investments: | 0 | 0 |
Total assets | 215,718 | 195,017 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments: | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments: | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 30,044 | 33,573 |
Short-term investments: | 8,382 | 4,477 |
Total assets | 38,426 | 38,050 |
Significant Other Observable Inputs (Level 2) | U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments: | 6,966 | 3,980 |
Significant Other Observable Inputs (Level 2) | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments: | 1,416 | 497 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Short-term investments: | 0 | 0 |
Total assets | 0 | 0 |
Significant Unobservable Inputs (Level 3) | U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments: | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments: | 0 | 0 |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 215,718 | 195,017 |
Money market funds | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 215,718 | 195,017 |
Money market funds | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Money market funds | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 997 | 1,987 |
U.S. Treasury securities | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
U.S. Treasury securities | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 997 | 1,987 |
U.S. Treasury securities | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 29,047 | 31,586 |
Commercial paper | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Commercial paper | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 29,047 | 31,586 |
Commercial paper | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 0 | $ 0 |
Debt - Summary of Debt (Details
Debt - Summary of Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Amount | ||
Total principal amount | $ 1,235,662 | $ 1,235,662 |
Unamortized discount and debt issuance costs | (30,595) | (32,278) |
Total debt | 1,205,067 | 1,203,384 |
Less: Current portion of long-term debt | (9,267) | (12,450) |
Total long-term debt | 1,195,800 | 1,190,934 |
Secured Debt | First Lien Term Loan (as amended) due Feb 2027 | ||
Amount | ||
Total principal amount | $ 1,235,662 | $ 1,235,662 |
Effective Rate | 8.58% | 9.11% |
Revolving credit facility | Line of Credit | ||
Amount | ||
Total principal amount | $ 0 | $ 0 |
Effective Rate | 0% | 0% |
Debt - Narrative (Details)
Debt - Narrative (Details) - Credit Suisse | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |
Debt Instrument [Line Items] | |
Basis spread on variable rate | 1% |
Federal Funds Effective Rate | |
Debt Instrument [Line Items] | |
Basis spread on variable rate | 0.50% |
Line of Credit | Revolving credit facility | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 130,000,000 |
Commitment fee percentage | 0.375% |
Covenant, borrowing percentage of commitments, maximum | 35% |
Line of Credit | Revolving credit facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |
Debt Instrument [Line Items] | |
Basis spread on variable rate | 2.25% |
Covenant, floor interest rate | 0% |
Line of Credit | Revolving credit facility | Base Rate | |
Debt Instrument [Line Items] | |
Basis spread on variable rate | 1.25% |
Line of Credit | Letter of Credit | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 35,000,000 |
First Lien Term Loan (as amended) due Feb 2027 | Secured Debt | |
Debt Instrument [Line Items] | |
Face amount of debt | $ 1,236,000,000 |
Quarterly periodic payment, as a percentage of original principal | 0.25% |
Covenant, leverage ratio, maximum | 7.40 |
First Lien Term Loan (as amended) due Feb 2027 | Secured Debt | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |
Debt Instrument [Line Items] | |
Basis spread on variable rate | 3.25% |
Covenant, floor interest rate | 0% |
First Lien Term Loan (as amended) due Feb 2027 | Secured Debt | Base Rate | |
Debt Instrument [Line Items] | |
Basis spread on variable rate | 2.25% |
Multi-Currency Tranche | Line of Credit | Revolving credit facility | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 112,500,000 |
Single Currency Tranche | Line of Credit | Revolving credit facility | US Dollars | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | 17,500,000 |
First Lien Term Loan Mature 91 Days Prior to Maturity Date | Secured Debt | |
Debt Instrument [Line Items] | |
Maturity date covenant, amount outstanding threshold | $ 150,000,000 |
Earnings (Loss) Per Share - Rec
Earnings (Loss) Per Share - Reconciliation of Shares in the Calculation of Basic and Diluted Earning (Loss) Per Share (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Basic income (loss) per share | ||
Net income (loss) | $ 15,559 | $ (5,621) |
Earnings allocated to unvested restricted stock | 0 | 0 |
Net income (loss) available to common stockholders | 15,559 | (5,621) |
Diluted income (loss) per share | ||
Net income (loss) available to common stockholders | $ 15,559 | $ (5,621) |
Weighted-average shares used in computing basic income (loss) per share (in shares) | 167,419 | 162,773 |
Add dilutive impact of employee equity plans (in shares) | 3,750 | 0 |
Weighted-average shares used in computing diluted net income (loss) per share (in shares) | 171,169 | 162,773 |
Earnings (Loss) Per Share - Wei
Earnings (Loss) Per Share - Weighted Average Outstanding Shares of Common Stock Equivalents Excluded (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Earnings Per Share [Abstract] | ||
Total anti-dilutive shares (in shares) | 2,574 | 12,699 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense | $ 4,561 | $ 12,784 |
Effective income tax rate | 22.70% | 178.50% |
Unrecognized tax benefits, income tax penalties and interest accrued | $ 500 |
Commitments and Contingencies -
Commitments and Contingencies - Loss Contingencies Pre-Tax Expenses (Proceeds) (Details) - Cyber Incident - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Loss Contingencies [Line Items] | ||
Gross expenses related to the Cyber Incident | $ 3,005 | $ 2,028 |
Less: proceeds received or expected to be received under our insurance coverage | 0 | (9,798) |
Total net expenses (proceeds) related to the Cyber Incident | $ 3,005 | $ (7,770) |
Commitments and Contingencies_2
Commitments and Contingencies - Narrative (Details) $ in Millions | 3 Months Ended | ||
Mar. 02, 2023 USD ($) | Mar. 31, 2024 USD ($) | Oct. 28, 2022 shareholderDerivativeAction | |
Loss Contingencies [Line Items] | |||
Loss contingency, damages paid, value | $ 26 | ||
Cyber Incident | |||
Loss Contingencies [Line Items] | |||
Cybersecurity insurance coverage amount | $ 15 | ||
Loss contingency, receivable, proceeds | 15 | ||
Director and officer liability insurance | $ 50 | ||
Shareholder derivative actions filed | shareholderDerivativeAction | 2 | ||
Cyber Incident | TEXAS | |||
Loss Contingencies [Line Items] | |||
Shareholder derivative actions filed | shareholderDerivativeAction | 1 | ||
Cyber Incident | DELAWARE | |||
Loss Contingencies [Line Items] | |||
Shareholder derivative actions filed | shareholderDerivativeAction | 1 |