SWI - Earnings call transcript Q4 2019

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the SolarWinds Fourth Quarter 2019 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions]

to conference like speaker to now Ms. today, would hand over the your I

you. ahead, Please Thank Hook. Ashley go ma’am.

Ashley Hook

Thompson, me Thanks, Elaine. quarter are and With fourth our CFO. Executive to welcome and Vice Kevin Bart today President Kalsu, Good afternoon, XXXX everyone, earnings and our CEO; President and SolarWinds’ call.

and Following Kevin have brief Bart, prepared remarks question-and-answer a we’ll from session.

those simultaneously remember Please note this concerning investors.solarwinds.com. Investor Please that Relations expectations growth statements our financial regarding call, that this our and including share, webcast call drivers flow, of collections of strategy areas our our investment, outlook, website growth, statements. our on is cash during and and expectations certain being profitability and made forward-looking and market our our are focus and M&A market at opportunities regarding

forward-looking required forward-looking also law. adversely and our be differ release. These and company are in by statements no incorrect, duty described subject from was a assumptions or Form and February statements undertake including XXXX. risks the these the any we based further information uncertainties risks, uncertainty are on March these our filings are statements. our statements materialize these of as those The this Should in filed results plan assumptions XX-K materially that discussed X, any we statements of to except on currently anticipated Form included of information and in SEC should number could XX-K or today’s on risk – to in actual file to described prove XXXX available regarding update These press to XX, cautionary factors

a a these results and by impacted a adjustments will will on XXX be press XXX of include XXXX ASC XXX release basis. measures and the noted. accompanying on unless basis. will be otherwise discussed today in Unless adjustments otherwise noted, of adoption XXXX comparisons year-over-year our presentation The all tables XXXX on today’s for presented XXX discussed today’s financial a all call be All XXXX will include results

rates We will for constant also we provide currency basis currency our effect results assessing growth excluding provide expect and our framework perform, and to our foreign performance fluctuations. of how for on a revenue to business the outlook a

calculations release of in ASC in the the a between are each full use measures provided measure accompanying further adjustments corresponding is impact and explained non-GAAP of release, today’s these GAAP financial press for the and Our non-GAAP including and its press measure tables XXX. reconciliation

because the However, forward-looking provide that outlook GAAP in item and each of changes income has in balance individual comparable our outlook basis. would is non-GAAP financial providing and release an not we reconciled such been today a amount reconciliations item projections otherwise to to non-GAAP not possible statement of references such to refer unreasonable measures effort precision. on profitability degree and imply of sheet Unless measures comparable without inappropriate indicated,

With to that, now I’ll turn Kevin. the call over

Kevin Thompson

Ashley. Thanks,

on of would say the that had back December comments to New to which us, come XX bit I shorter a what fourth from you fact expect you’ve First, quarter on Analyst our call City, like be this given York attended. we will that than in our many Day forward-looking

a shared event. that about amount strategy growth the at We company and of our tremendous information

IR webcast, section stream and get the the to from available to our a presentation of not event, replay as website. our did you chance the If both attend of well are download as the

constant growth. reflecting approximately XX% $XXX million, in fourth currency on had $XXX year This million, total non-GAAP we to to report, a a growth. full-year constant quarter of currency year-over-year finish basis revenue on resulted solid revenue non-GAAP XXXX, year-over-year of or pleased XXXX XX% in successful total I’m delivering a basis XXXX

non-GAAP the fourth outlook provided. had we of range Our the previously quarter was within performance total revenue

the future, today its highest and is in to reported and range, in the quarter. our overall accelerating driver on above growth primary the basis year-over-year a level growth, subscription However, XXXX outlook of rate which with high-end continue for the be our of in revenue came growth will XX% to growth

the also profit note. finished strong year a on very We

As impact EBITDA XXXX adjusted mid-year the XX%, the XXXX the growth, resulted provided an totaled as EBITDA previously XXXX, Samanage or finish and the of of strong outlook the exceeding to adjusted EBITDA $XXX in million, margin fourth quarter compared despite XX% over acquisition. for of The $XXX quarter. the our range of of million dilutive year high-end full-year to adjusted

Our I’d We dominated as like strategic profile be and the has to operating of. a note that business to the highlights revenue recurring and full-year model of our tremendous and show resilience, continued number for make fourth as revenue. had by has to evolved the has operating grown quarter

First, quickly for revenue the driven to recurring in grew non XXXX, growth year. compared total XX% as to our as GAAP for we have recurring XX% XX% a basis our in XXXX, revenue business outpacing revenue our on XXXX, by

total growth the was of prior private for increasing million, by $XX quarter the revenue, a in compared totaled component fourth XXXX XX% XXXX, of basis quarter of and revenue the take million, fourth which subscription $XXX our full-year, small reflecting Non-GAAP currency early XXXX. a XX%, on ending as to to constant for

cloud-based in growth of expect XXXX. first accelerating slightly to growth in We and see saw the we pleased similar products of quarter revenue to our are subscription with a level higher the from

in have that annualized of agreements. which our as we value of annual in products acquired, revenue, defined contracts, subscription resulted also growth recurring maintenance we’ve bookings, our both plus annualized organically value we subscription driven rapid through has growth the The of and

in $XXX of million, of end of ARR, the XX% Total of year-over-year XX% increase at $XXX an $XXX XXXX. ARR, XXXX. an Subscription replacing is and in a was what to rate we acceleration saw XX, even total XXXX, as growth, an of compared at ARR the XXXX, to at component more December end reaching at million in impressive as million which XXXX compared grew

customers, over $XXX,XXX the of the growth. relationships in a of us number increased also who we approximately reaching spent large had, last reflects XX we XXXX, year-over-year XX% have customer with months, which During XXX total

over additions, new XXXX. driving adding We this new strong in XX,XXX have done while customers customer still

Given the and large maintaining we a of have of are to model. the We number characteristic a business portfolio strength customer our already build we large ability of enterprises, is fact have significant the the at in relationships and continue double-digit deployed relationships, build of to products we rate. still that to our go-to-market opportunity unique shows number our our large in see product believe a while the customer velocity breadth

continued during software best We the to among believe XXXX. retention our rates in be have customer

at the of net retention XX% full-year stream revenue delivered our As and demonstrated rate full-year or above by our on reaching maintenance MSP XXX%, the in net by renewal rates XXX%. rate which for a retention business, coming subscription led

the We to in these to rate for our XX% driving net range renewal the be above goals and achievable. XXX%, continue maintenance believe retention subscription on on our that XX% overall are and rates focused long-term revenues maintaining

We’re rates pleased the with and XXXX, growth delivering growth increased our in XXXX, our of long-term million on the of license is are part which revenues, X%, $XXX of full-year in reflecting within non-GAAP this maintenance the to we as in focused range growth business. which compared to

infrastructure, and core of on-premise in overall base a of of portfolio our sustainable is the IT our trust the model, in IT our reach of of we the believe XXXX the for customer growth sales portfolio, and rate the strength deployed of on go-to-market trends Based our performance management in range product loyalty that long-term. our

are over XXX,XXX all to list, total and customers indirectly directly XXX,XXX serve direct almost grew The number managed Fortune customers. being currently SolarWinds the XXXX. or our We XXXX has XXX a of of customer our partners, based of total products, through count whose one XXX by on environments MSP the Fortune companies XXX reached either during

enterprise is reach companies a in few the of software very motions group shown with large. to go-to-market their are this that products have There users and ability

footprint and of our management acquisition fourth We through portfolio which also product the during the late added through acquisition Samanage management Operations service completed VividCortex Management XXXX picture. in of to continue which our the in our application infrastructure quarter, and quarter, IT to second in IT the expand

today’s pros components identified the applications to improve to operations. their all the in and manage infrastructure, of key to efficiency on through all are including that IT issues manage now databases key hybrid technical with applications We rely resolution tools addition technology of providing that those and the to

positioned application We our across and strong year believe that We in regions. we’ve the with modern the and company XXXX believe market. performance a perspective of operating coverage ITOM lines another environment strong seeing ITOM have the Overall, assembled I’m pleased metrics infrastructure we an and the IT broadest from are in coverage market in we geographic different XXXX. for performance and product year delivered

our fourth detailed our performance the and call will provide the With first provide details who will additional XXXX. and for on to over view that, Bart, thoughts turn full-year a and of outlook quarter I’ll quarter

Barton Kalsu

everyone today’s joining on Thanks, call. Kevin, and us again thanks to

Our results in quarter fourth we model. leverage reflect that our the have solid significant financial quarter execution, of while another will demonstrating

on outlook XX% As million of currency quarter reported Kevin currency constant on constant for basis, revenue million with both within the representing growth year a his in provided and the basis, indicated remarks, for finishing were reported previously total in on approximately the our fourth $XXX we non-GAAP basis. range or of revenue, a year-over-year a $XXX.X

or basis. on strong a basis which from revenue grew and on $XX.X was by driven Service reported business total growth constant solid performance contribution MSP billion, led SolarWinds our subscription was currency by XX% Desk, subscription the in growth by The in revenue fourth non-GAAP quarter non-GAAP a Fourth revenue product. year-over-year of XX% a quarter ITSM and

fourth currency on bookings. fourth growth maintenance was currency reported in reported $XXX.X and million million basis XX% license Non-GAAP X% was X% on $XXX.X maintenance constant revenue in a basis and quarter, and strong basis, by the renewal continued constant X% a on revenue reflecting driven Non-GAAP quarter, increasing at maintenance the by a basis. on a

quarter decline For driving in we was business compared an non-GAAP on annual X% million, earnings to which as of of call, third represents growth approximately a to basis. range $XX.X the X% fourth deliver X.X%, And fourth our quarter license on to indicated the are Kevin license the the quarter, XXXX. revenue sales

our while not with was fourth license sales as performance and license was full-year we performance sales strong are of we pleased range that So it quarter wanted level as performance, be. full-year within to the that

sales of license include: in being fourth acceleration quarter XXXX which driven meaningful quarter in our sales performance, stronger improvement it by in of said, we This international the sales license XXXX. we at However, with in third was level that fourth new our highlights, of a much than performance quarter EMEA. was several license saw look the as was

continued similar level a the see performance expect business As improvement growth saw our to from Asia and stabilization in of operational we international across region market XXXX. Pacific, positive we and from

performance sales were week license We also areas American had offset growth a – by strong several in fourth quarter our performance. the of unfortunately and that North of in single area

businesses local, positive our On in education the our delivering customer the quarter new federal state, were year-over-year growth. fourth in strong front, business and

In meaningfully majority the at of our growth the addition, customer we of the American of our sequentially, large customer reaching with relationships by sales grew the North end driven XXX customers year, this being approximately number teams.

these positive issues global quarter to installed our caused and in area American our areas sales base was portion quarter execution area teams. performance, American fourth North Among North one related of of This there be weakness where we the that license lower fourth expected. than sales to a weakness of of

annually. I’ve this level at We’re and already meaningful a actively seen performance issue improvement of addressing in

XXXX revenue of basis. currency XX% prior for the non-GAAP $XXX.X a a year, the $XXX.X on the reported a amount prior million, constant on December year XX, basis million XX% Total and over ended which year increase was is

was which of growth ended business ITSM from $XXX.X got the was For led million, XX, million was we solid products. which and a represents the our subscription growth XX%. $XXX.X contribution XX% represents MSP The year Service currency by basis, on from of SolarWinds revenue XXXX, December or constant year-over-year Desk, growth and non-GAAP

retaining landing, relationships. growth at success and our Our customers has subscription consistent of customer expanding translated into

XXX%, retention by led rate the net was net subscription XXX% MSP retention rate business. our year for a Our for

of evidenced year-over-year X% have at range indicated reaching should XX%, $XXX of renewal full-year. to by revenue driven expect. a Non-GAAP for a maintenance high-end million rate Non-GAAP for customer investors strong license the grew by very XX%, at and the rates we was which This growth $XXX.X XXXX increased revenue as of performance maintenance maintenance retention, of the was million. over

X.X% that approximately revenue currency a at License performance. X.X% the on of and approximately on grew solid basis year-over-year basis, range is within constant we to consider a reported X% X% which growth

second representing quarter. for Fourth ended was of $XXX.X the $XXX.X dilutive the of margin fourth had EBITDA an XX.X%. We the results adjusted also non-GAAP adjusted And million, defined quarter an very which as the a adjusted Samanage EBITDA XXXX, profitability was EBITDA million, are adjusted over strong of December year of acquisition, representing These closed quarter. XX, XX%. EBITDA in quarter was margin impact in

The standard, another yet as is high growth of non-GAAP and we still year that profitability combination puts well a of industry basis. XXXX our the revenue us above even with on above XX ended rule

Unlevered reflected which million as million, resulted in which we XX, historical full-year approximately of bit our later license XX the accounts totaled at our The an end XXXX DSO $XXX XX expectation than reflected came balance fourth the fourth rate, is was compared in December at days, the the free rate cash flow we XXXX year, of while the $XX of very had XX%. for slightly which that days. of in solid had expected higher to for quarter than bookings trends, anticipated, a in conversion a conversion receivable quarter lower of

to in in expect QX receivables We XXXX. flow which the cash these help should performance our collect quarter, first

cash approximately year, the million. forecasted higher for were fourth originally taxes $X by as for addition, quarter, In a result and the than

was December in rapidly, of our months end times delever times, following leverage June XX trailing XX Net to to acquisition Samanage reflects of adjusted continue the the X.X our quarter. which second at leverage ratio our X.X at was the XXXX as EBITDA, ability

cited in our S&P that ratings and recent our upgraded reasons strong upgrade. Another the agencies cycle. as fact for and were performance review is Both the flows by highlight consistent recent most we Moody’s cash both

through on back and the over to thoughts. outlook that you you final outlook December. XXXX walk now for Kevin we will subsequently in start full-year will turning our I first before it gave some outlook I quarter expand with

quarter constant range currency million, to first growth expect $XXX.X basis of $XXX.X in million would XX% representing XX% be a which the of the XX%. revenue year-over-year to XX%, non-GAAP of we For XXXX, to to be on

representing Total projected $XXX non-GAAP revenue basis. X% is X.X% million, a to of growth currency approximately reported million be and X% of year-over-year on and basis the to license a maintenance range constant $XXX to in X.X% on to

to $XX.X quarter expected to of for of on currency $XX.X in XX% on Non-GAAP the representing is reported XX% constant subscription basis. revenue to first be or XX% a growth the to XX% million million, a range basis,

as our levels, the higher meaningfully impactful the the million. course $XXX will quarter Consistent be XXXX for result XXXX EBITDA efficiencies, less trends, historical will Adjusted operational of a become EBITDA as first up dilutive to a result – build as to the adjusted is expected with of acquisitions of our million to than percentage impact expect which end a operational throughout trend we we of the as year. in QX and year $XXX revenue a move the over of the made as we and

estimated shares outstanding. $XXX.X Non-GAAP assuming an per fully $X.XX to be fully to million is share, diluted per projected earnings $X.XX share diluted

of the and to Our $XX of pay during non-GAAP taxes million expect assumes a rate quarter in we for first the tax XX%, quarter first cash XXXX. approximately outlook

U.S. Last, rate outlook dollar first rate X.XX. our pound rate dollar X.XX exchange assumes to quarter US exchange dollar and euro the a exchange of to – of

outlook, to as is Our for the relates as follows. full-year XXXX it

to XX.X% of and billion, We $X.XXX expect the range currency growth representing be constant of total XX.X% to revenue billion non-GAAP reported a approximately $X.XXX to in on basis.

currency is rate representing and revenue range assumes to to XX% to basis. of expected $XXX a reported to X% range maintenance maintenance million on and renewal a license approximately of XX%. non-GAAP Total X% This the $XXX in growth be of million, constant

XX% assumes net of to range $XXX to be rate and product million, subscription expected reported a XXX% is $XXX growth of of our basis. XX% on XXX% range approximately in currency lines. to across representing constant a revenue subscription This to the Non-GAAP different of retention

Adjusted be EBITDA to to expected $XXX millions. is $XXX million

level where – adjusted As a expect than we meaningful a at about we profitability began year. to meaningfully quarterly you think EBITDA higher XXXX the on exit basis, of

the will of expectation We the initiatives quarter, subsequent level expect bonuses, those that is of to in kick year-end growth deliver with with several on at of has including to rise year now the trend of initiatives year. of levels factors, that did taxes higher quarter each off our and the results second-half lower been due profitability taxes historical growth and our first begin of social in a level year third an we payroll delivering our early by quarter Our to highest levels fourth a profitability each profitability.

Non-GAAP fully per $X.XX is to XXXX. diluted an assuming estimated XXX.X earnings outstanding share, expected per shares to share million for $X.XX be

a like outlook, pound rate outlook exchange a U.S. of first rate our and assumes full-year to to X.XX dollar X.XX. dollar quarter exchange euro of Our U.S.

As our is flow unlevered than rate long-term Day, we growth. to for stated revenue to in the the cash EBITDA goal of free slightly grow faster Analyst conversion

be conversion large several one one-time major impact on fastest-growing Manila our the next expansion our includes flows few our will in acquisitions locations believe XXXX be office, will of years, However, rate of over negatively as Samanage a it as items, in XXXX we cash and of the dilutive well which from impacted VividCortex. by XXXX our as the

our to to These earnings we XXXX, our in the in outside tax United XXXX to of will in the which relate total range. historical addition, In have conversion continue make XXXX, mid-XX% payments, rate items additional will like in keep States.

and in at be cash will due to of growth continue XXXX, our times decline XXXX. three Finally, activity approximately to absent and M&A leverage will net earnings flow expected any end the

to turn will I that, Kevin call back remarks. for closing his the over now With

Kevin Thompson

Thanks, Bart.

in December, our to at current Investor and the the for infrastructure data IT take have trends deployed you center the future comments, believe and applications we and this of both used. Analyst our and hear from and and advantage on and we market historical SolarWinds made in and IT architected, infrastructure Day that can we comments deployment on-premises As and how positioned hybrid both models and trends call we

facts. This belief by supported several is

First, IDC, last this market and the three have in in according for market and to we management is leader years, been our lead network the growing.

Second, operations application market. number as network the the in taking and systems management market we market IT to three had, we have share in software which Gartner’s position, XXXX, from rankings analysis moved well success four as performance the reflects markets, the management in management spot the number

to namely infrastructure positioned We also and and market application service IT IT ITOM we its of in hybrid SolarWinds infrastructure market, The and application management fast-growing believe IT the cycle. have parts several disruptive be maturity early in is management. still hybrid

the the However, want problems and be understanding defined. continue the of way need the problems to solved the that addressed to be pros technology be to

management We have and taking to focus on and levels, use market believe us created priced interest we share will only markets, who meaningful a enable the deals. easy product the have IT into models big large portfolio powerful only infrastructure and go-to-market their pivoted which to hybrid begin of already at disruptive from early customers

of leaves market us, for of. wide ultimately a large portion open the This

we of player management of meaningful You’re confident cloud on-premises and in be and but the management applications, also only standalone infrastructure the time, infrastructure to not a in that native over will continue applications. hybrid and IT

to issues market, believe be IT that service successfully facing the and teams same the are that all challenges. In well are to sizes management understood, of able manage we companies the then need IT

use we in product to currently of deliver bringing ITSM small intuitive easy the can to focused compelling the the price at points. power are with business We mid-market an on

new entire be plan Consistent the driver needs long-term ultimately growth and Service us with last SolarWinds each We the SolarWinds our serve however, business. Service adding Desk the allow ideas with to believe for capabilities market. features Desk we a will improve XX the our approach years, and of over and release, to

investment plan With the hot market, new We believe at years, three the in the those is invest been size not market before where MSP a really a one also large over to of last in all. We well continue leader really companies other MSP opportunity round markets understood new of it it. we becoming is this have that recognized a of market, new to XXXX. any in since in

for in continue We most to market. in MSP well-positioned believe the take that set products share are of broadest, this to and we market to leader the be compelling a

a – we can business As our revenue XX% we sustained or foreseeable on and at of stated a Analyst for in future. level We are focused Investor the building greater grow Day, market. MSP the our subscription and

And, decade few Next, third I is into a I strategy competency in and SolarWinds SolarWinds’ or, in and the demonstrated adapt what we made ability products thought profitability. decade. comments history. revenue additional share on as would them to quickly cases, M&A We core M&A and move we our have a acquire have high some the driving that believe of level fact, growth new business to our just of model, acquire the companies and of a

will our to to to opportunities telling us them. they look a to for capabilities aggressively We our are environments customers want from allow manage us their way that product add to IT to manage continue portfolios, need they them that in

a being companies rate a on on focus that course, deliver of we will, technologies these and ensure to return investments. disciplined acquirer high We of of

specifically year adjusted Last, thoughts believe on will on and to XXXX. We growth solid total that we revenue non-GAAP deliver XXXX. turning in a EBITDA a our

position to least the parts the the fast-growing of some business investing of CAGR five time years. next SolarWinds at at grow of our same XX% in While over a at

hallmark and SolarWinds We of entered customer of entered for and the net million level our at customer we renewal relationships been XX% velocity lines; from additions, model. while ARR, XXXX which maintaining high high large a have, strong has solid which across a all meaningfully are retention of international position of strength, number product the rates, with subscription is XXXX; $XXX new increased momentum we maintenance where in which of have level; than historically higher

MSP which business, on infrastructure XXXX, drive can our revenue Service growth in Bart stream and to management from tell our our provided, in As subscription Desk outlook, SolarWinds we product. cloud accelerated you by expect growth driven the strong

up open for we’ll that, the call now questions. With

Operator

your Auty JPMorgan. first from line Sterling comes [Operator question the from of And Instructions]

Sterling Auty

Yes, guys. thanks. Hi,

into maybe peel already mentioned optimal Can made kind us changes. the the back sales you So give on of you to get bit actually North productivity? you’ve base license take have on that onion, and how some in in better it’ll long installed the what clarity focusing think America, little that back made just to a you for you changes just

Kevin Thompson

Sure.

Pacific Bart what we really had had across the In of indicated, So with Sterling, EMEA which to educational is in growth deliver most the business, state, most America quarter, a we performance our great; and performance delivering and good Asia quarter, the continuing in again really growth. and great fourth Federal, EMEA, America. our local strong in sales team. North new did of strong customer North team across customer very them

geographic of just have regions very well. We our that perform did not one

the in a quarter, of strong made team made had with expect we that be the we changes performance make changes managing rest I sure way January that in In they’re we’re approach, very to in the performing kind by customer consistently – business. fourth to we And sales. of

problem addressed we’ve in this the in already corrected we quarter, seeing we’re the the and performance XX in we’ve So improvement feel first year. like saw already the that fourth we days of issues

Sterling Auty

And quarter about the think guidance, relation how follow-up, inorganic it. acquisition the for contribution the first one Got versus do we to in organic then quarter?

Kevin Thompson

Yes.

we as examples, fourth you made in level material driven the quarter quarter, So third the of and of I inorganic look any last impact second acquisition, by the if of think, which really is Samanage year. the at kind really

continuing is QX. QX, you’ve what QX really in what’s into seen So

fourth performed indicated to this Bart contributed did comments, in as Samanage, really the maybe positively and so, it well quarter. in And also, growth our and I

great at rate it we back is that the consistent market your made that in So acquisition, to that was when acquisition great continuing we performing range. grow that said opportunity, with very product, the expectations. which would team, our Great XX%-plus

material that’s that the into is really built XXXX outlook. So in our contribution only inorganic

Sterling Auty

you. Thank it. Got

Kevin Thompson

Sterling. right. All Thanks,

Operator

question And your from the line of Suisse. from Zelnick Brad next comes Credit

Brad Zelnick

Okta, in impressed a to tool much, it. it’s the the especially great guys, we if that see as recently up And recent I to Pingdom and big sense the from of suite and of note, is business. report see On subscription how within that popular Great. the Pingdom XX know you developer ramping, products guys other were seen side a a in – can momentum Kevin? top Thanks so versus are cloud most But us out have solutions? how other give you the don’t showed

Kevin Thompson

Yes.

We cloud relationships also So, few our terms products. customers we their there’s financial are and application but infrastructure growing. across of said, XX,XXX, customers paying we talked with annual things. have those But relatively who about management are relationship a in small us,

Pingdom $XXX see the as – it’s well pricing a as product other at and developers, is product the month website development the you from month. of on most teams. the widely look to the XX,XXX But users a if total the far Pingdom, pricing of ranges about a $X.XX that well-known, by out both It’s has by brand, lines. web a incredibly used it’s brand that

So you that large. see not very is ASP can the

be users. Management the infrastructure double be you’re Loggly, is of and to It’s where always going management our to decent growing driver infrastructure driver is see a portfolio. then going is user The product. our So of Log to very be which our for that ultimately dollar the growth does the growth is number of it’s application developer, Papertrail, which nicely, stream And product. growth, of which that’s have AppOptics, in Log Pingdom digits large will product going but growth. revenue more have which Management not of But will

market, us have. a at users and in to the across market, cloud DevOps brought the in awareness So has for great that look brand great the of lot we bringing product, other products

a way volume marketing high profitable think really is about great to it’s So great, it.

Brad Zelnick

on net follow-up sure could the question XXXX, Analyst if retention rehash to make your facts follows, got at is with which, question not a Day, again, XXX% to that if bottom embedded completely XXX% I’m just assumption And but Excellent. of end and subscription on I XXX% not the net business a for the mistaken, ask straight retention, in guidance? XXXX my I’ve to

Kevin Thompson

Yes.

Brad Zelnick

confirm just things us to able that can to also talked I’ve that that you’re to get the you the motions being already XXX% you But be give confidence and right; that optimism get should and confidence and over you’re going the B, to about seeing you XXX%. there? get got it to in A, able that

Kevin Thompson

Yes.

our recently product we product, above our is net tiny right, that long product and – you that now all full-year XXX%. been XXX% added today, and XX-month we buyer, for based pretty it right retention which the products. of that But XXX% and retention very, for trailing net much revenue ITSM you’re management we’re the already year on database MSP average. we’re XXX% strong and across of a business of matter, all above will basis have the already is in then we’ve believe also have So XXX% our were a And subscription – does very very our on we characteristics XXXX,

parts right it And our already one MSP it so stream, When XX revenue revenue our at product fact look part has been last that net it when you than that now. you look XXX%, above is subscription line increasing fact fastest-growing XXX% at less of months, retention was is over now. of the XX the that of the ago, XXX% instead subscription months our is of faster-growing the ITSM the

confidence Those we range. much know XXX% to XXX%, – not to to do drive Once and to that it get that that get have XXX%. things don’t then give I we actually believe on good making do have said what of we’re is to possible. and XXX%, the lot us we are we’re to I’d path as that can we’re just a get above really get I’ve I a like to try us and XXX%. going XXX% XXX% the into XXX%, path and really done, to XXX%. as between visibility I and that’s progress to we we to

The other in thing know XXXX. negatively impacted the XXX% by to is was MSP

more constant currency it’s So XXX% like a on basis.

than a little XXX%. So it’s better the

favorite to to get we XXX% ones have to think way sales XXX% visibility leaders sell then a used we’ll all terms to but of visibility to to and the still the we get get how can And we’re to much path the to But have there. first got believe I one and XX%. I XXX%. how we leaders So we in we’ll beyond get – the got from get XXX%, we $X. in. is my that XXX% to on XXX%, got get good yet know XXX% get hopefully say, of get We $X we

Brad Zelnick

the Awesome color. Thank other Really you, the and transparency. appreciate for thanks all disclosure.

Kevin Thompson

Brad. Thanks, right. All

Operator

Citi. And the our Walter next of comes question line Pritchard from from

Walter Pritchard

had little bit question. been Hi, an the before questions. Analyst product as update then Analyst Day. seeing spend us marketing on follow-up And on to update few just months talking Day just the thanks. I Can you about Two of sort there? incremental a a last then of you’ve you’re One, over the and returns what

Kevin Thompson

Yes.

So the we returns end the are of year. seeing positive through that investment on

have given of we view a the December, indicated, cycle time. February, of average of decent As end kind by end we’d view our by better have the

like at to it We’re seeing be a It’s level yet. return positive investment. on that I’d the not

a it tweak to have to going little we’re bit. So

executing in some We little our those January in terms bit are of marketing tweaking it a campaigns. of on

the of So and what in have and at ROI and going all XXXX sit – not we It’s not we’re positive is, increase to because it. we we’re point, back XXXX it’s of but through say generally said, the positive, seeing I built XXXX, the to through where not our why through marketing we’re see just not we Bart seeing past, we’re expect. return at all XXXX, than level want Okay, the spend of I’d

in keep it campaign we’re terms we’re quarter. So to of in activities in running going first tweaking the the

to try built when did at the spend specifically in cloud management fourth level the is infrastructure around up. that We’re to we assumption an our to outlook, application our really we’ll got quarter. it’s But This going we in not continue drive products. ROI and

we’re what level in we spend So to a in XXXX higher until fourth ROI saw than going we the XXXX the not right in the quarter. see quarter now of spend to we fourth

people. we know, we would probably put positive. other – company it So were bucket crazy and of If a we like it’s any dump you out money and spend in software

level. because make bit profit that disciplined positive of than have an higher just run ROI I’ll in a on it’s we a good level the got business But that spend. little enough, is – It’s our to better dollar than I not

where at. a delivers to it’s tweak bit. not It to it in it little to than So we’re costs, works. going wanted revenue but have I be It dollars more

Walter Pritchard

And update Kevin, thinking how security about the curious you’re but work M&A area, any – the then any how on product side, to so as some you’ve done and there update? and forth,

Kevin Thompson

Yes.

you or well added, XXXX. have product in one now endpoint It’s to basis by amount if of portfolio. a product in we products growth XXXX, offering protection of security. decent to XXXX. product to In it in be continued right an That’s expect of accepted we our advanced remember, a a MSP MSPs. work been driver fastest-growing incredibly on we do continue MSP So We our percentage the in

so And capabilities added there. we’ve

expanded different kind with XX, our products. capabilities, of, couple our like management call to infrastructure have I’d We – what security a of infrastructure the

have called Loggly, SIM companies, We lightweight products of product in sophistication is wholesale. performing XXXX. both security those the of a security the some used are for a which have in we product well a a have used cases which who one and back-half And is manager, in don’t event compliance

think the I attached tightly network. security, really I about infrastructure into that’s to security like As

from to rest product, security expect either the that, level the of So what the where you infrastructure server product opportunities us for most is our customers. value build that’s look the to and/or the we our level, creates because at connection acquire will the either at should network portfolios for or only

we’re space, to to definitely a continue in. And going so expand

budgets decisions and MSP the then buy, endpoint kind with we in build brought And what we engage make we market XXXX, like understand we to behave, buyer, We’re hopefully, same going a with understand the really make we did the the a product we protection market. the until in little have at how to time product. We control, about dynamics want intelligent the have they the do they XXXX. how they of sure this of bit results like it that so

Walter Pritchard

Great. Thank you.

Kevin Thompson

All right. Thank you.

Operator

And your Stanley. next question comes from the line of Sanjit Morgan Singh from

Keith Weiss

good quarter, guys have side. the this that guys, in of lot a seeing really Very see Weiss great investments and sitting experimental nice Hey, been that acceleration traction actually the you making Sanjit. particularly It’s is on in for to there you’re through subscription XXXX. Keith

weakness towards understanding kind that. of more kind like you you demand business going the going and kind Two on, do out of of sort areas parse a are more One subscription-focused? how questions overall? that license revenues, of trend just subscriptions this of weaker kind around license weakness terms more in towards of be versus sort Why of coming if cloud one. kind shift will, more license forward, more the as the of durable shouldn’t Number from

space. the little increased you And then starting MSP competition that talked or a number to see about some within bit two, incremental some business, in

front-end today You idea guys your over competitors what like building platform? MSPs you’ve talk good get some of on had competing to just – us gotten that you’re how environment a been more of you sort up time. of had to and looks sort on Can

Kevin Thompson

going products nailed kind are down to Yes. to today Analyst license. our we And on-premise do at relates the grow the and have yet. about some in don’t it that to of point we we and that for the Keith, at date license Day XXXX, in opportunity question, continue then of talked sell to kind we regard to us first

demand that We our on-premise most as a way. as to products are beginning still get we working see some buy on also subscription, are both offer it products to to level of

we growth license X% is, revenue. which consistently X.X% believe can and on perform. where we the between we on a and – year-over-year We X% in basis basis said an delivered annual we believe growth is level, What we license constant can about currency anywhere

had most and do think our that quarter core on of of product in that growth quarter. sustainable on-premise side a weakness on for the customer – for the the bit on little good had the we across matter, in teams base of We can we’ve most for And really basis we a customer the year the part on longer-term. our sales fourth and

something environments built you them. And things MSP seen businesses that’s that are manage What happening. in at stop look themselves begin Without buying our a environments those we to look when doubt, and is, some happening small we’ve I business we’ve as to manage technology what’s forward. ask tell I for model to some into infrastructure,

of anymore. And thrown growth small I why it’s a their one we increasing and because portion know business X% of to up do that of is an don’t the hands and is, portion we X% small myself reasons business market license can’t that said, it expect market

that market the we me, as of invested why market. to that heavily seeing why as for in have the MSP we’re which really we’ve growth and part do is strong got it the Somebody needs we’ve in

which technology vendor portfolio level product on-premise. However, in that new tremendous a level market market, perspective from at their there’s their turn reduced well-positioned areas big things profit, on take share for and a little we be of that time, to where they’re those And level have have almost companies investment that what or just a higher for that to still has got because bit looking think areas. when deployed is same focus of other companies to real reduced they have on-premise, any of We the of every technologies able profitability they invest lot of focus, and acquired harvest growth, there’s those either, still need difficult. by to we’re technology get that, in a amount the seen deployed easier because they because really don’t is being simply tend has

actually product of which of as pretty built have large in we’re customers still customers. market as some seeing lot in SolarWinds adding of portfolio companies, been our customers So they’re number a still we’re The growing. of ways, we that relationships declining. new cases, expanding is and ours, And the many large dramatic is in of are we who large that The competitors also is growing. has shrinking, of market strength why footprint lot not those competitors actually their a

couple think, at of XXXX. of kind can I look XXXX a through So things, we as happen

will more historically. have build You’re start we to going to accounts increasing an in relationships we’re see large level of than those rapidly us customers the with initial large small with going number continue transaction. very at that But to ground grow

one added but it put increase I – ways. our there’s new in of a guess, footprints already, footprints accounts, at and we way trying many we’ve haven’t to motions, It’s we And really rapidly lot has really got of meaningful Analyst intentionally anymore. Day, to an are opportunity deep, us talked bag still those want that about sales the do large over motion they’re There sales expand and to are because to that else you we’ve And having last years. they’re more we’re to products no our allow to five strong, those abroad, because success. relationships, a happening,

give X% to at on a allows combined license We range, XX%. so What is that in saying We not we’re X% that to which range confidence total level there the competition comfortable picked basis. in few us X% In at a is license saying. XXXX, maintenance because we’re And those revenue and we’re just to us X% range, to absolutely that a there XXXX. were strong. got maybe that, X% the going grow very saying is grow is are that things

an market. that MSP market interesting your question, On is

any So I of that there one that yes, no in market market. of think, number are There’s really size. knew competitors a in

larger companies been of the that market, into funded the are a IDC, players. who by the smaller lot in that have investment last some of either PE players, [ph] that by bought the five Over or of just years, some there’s firms

So that strong going of number where is technology an had we’re competitors in I a strength, to market, advantage, competitors But new portfolio. breadth the are to and advantage there’s have we’ve a of not market. there where overall SolarWinds lot depth that of the think in continue an

have products on have happen their infrastructure XX the environments, MSP has environments None that in the managing and for of to the breadth know-how we’ve we have ITS, we wherever the by those nobody last of years infrastructure knowledge In the space that today. And had capabilities we competitors the sit. platform have

the XX%-plus to We last we accelerated continue as long as to years continue have, improve IP and we leaders So which as growth. we’re that MSP to to as deliver had the one bring doing we’ve market the the we’re we’ve of bear long going the to on at XX for continue products we believe rate problem, that. able market in the we’re be to

We’re really as out see. we far can

Keith Weiss

you, Thank helpful. super guys. That’s it. Got

Kevin Thompson

Thank you.

Operator

from of Jefferies. Brent line comes question from next Your Thill the

Luv Sodha

investments Sodha to This this onion Thill. quarter. the Hi. a little that and on Brent peel is Luv marketing I you back maybe ask, wanted sales made for just the on bit

Kevin Thompson

Yes.

Luv Sodha

that Maybe could in to like what those returns? about you terms about you’ve up it was had competitive the how didn’t the of – talk expectations investments that sort environment, of live

Kevin Thompson

Yes.

So of look, here is a couple things.

in So because the demand the we’re exists that maturity – level level one, quarter’s at call, market, when is still mentioned of of early relatively on last web. I a there that the is

start rapid you’re While seeing decent at people the as – up a market a if to start you the pace. to to it’s level, to more that at that trying not spend demand, will, so money, go you click, high cost pretty rate, per

that goes see up, we click, as web-based just reality cost the conversion. test limit, push the dollar That’s will declining we as as conversion as you dollar marketing what you per you does per of of per is, push were to because math. So is, we rate some volume things level the one a rate get rate click What’s deploy the of dollars, go of cost up? trying the

while spend. what spend what how we test our to opportunity? sales Board we’re revenue opportunity XX% at is get dollars the if look closed of spend many so is, does dollar historically, you And cost hurdle to in rate the of about don’t to they those we for my like But conversion marketing do rates then in – What established to meet And look that terms like And in conversion trying and what XX% and how deals. to that dollars profitably, I’ve we every goes revenue the marketing combined. can up. rate want look

however, hurdle and can level our meets hurdle that rate, high even in have. a So at other much cloud we’ve than market do that got I drive a companies demand infrastructure of that absolutely management profitability rate believe, we rate. pretty application hurdle higher

our the growth that at we we’re rate. new increase of customers of rate and increase So business, increase that level in driving, demand the adding part our can which we’re

So said, I’m the just up Okay, math confidence our where gotten We now any vault to we in of give more open going that to haven’t the haven’t Bart you that. money. and lost equation

You good it to them. that prove on point, this for vault vault him a was money at still it that taking the locked from got to investment give them waiting to and

in it we’ll quarter. just I’m not didn’t to get that the fourth solve So equation. our completely We there. about ability math solve worried

Luv Sodha

And Got a for quick it. me. follow-up

mentioning on the XXXX? know an – of international you it growth? think do sort Manila. you’re your in you’re forward year And you. think In how that I international open next going in about progress about – how we terms that Is planning to office of should markets, Thank

Kevin Thompson

Yes.

in Manila that to in to work. level have really and high Manila Bart maybe already. size of the double is, meaningfully we increase incredibly an So committed big we What are operation, we’re down indicated operation clarify, attitude, the of to the because company, truly had a incredibly going do great employees phenomenal,

for a And in of so run operation. it’s us home really that terms been

we that, of to to than we’re of that in size more operation do footprint XX So double terms In order months. have the planning the to of size over down, we Manila. had facilities the do next double double in the really

value and I’m enthusiastic delivers tremendous that for been of the that company. just location that’s one one us, So a great, great incredibly amount about, to

the Pacific, in we focused kind of saw the middle was XXXX. market. indicated, quarter. in in on We we’re you good to growth, EMEA, cracking saw performance invest that international started performance. it of the From From of code in good terms Asia still continued really German we In the fourth a

continue We to invest German the market. in

in some seeing fourth in Germany, quarter. improvement in performance the We’re particularly

push that. we’re to should fourth push the going though growing We grow we on able much where performance, we to believe be that. should than continue going saw a we’re be on even larger, much and to to faster in market We’re a that’s we quarter,

deployed second get products Europe because our management continue streams. ITSM the product are mainly into Asia, international in and this We’re get – year going cloud American those to revenue North of application first; push to to our and terms hard our market, to infrastructure get product really to

than year, employees talk from some efforts. positive we office we late last in see got and then And about traction today opened it’s so guess, less when small in I we’re Japan XXXX. Japanese beginning to a their We’ve a five handful,

And I be said, will for so market that as a but going was ultimately slow us. good to work, really be,

about we’re So thinking how now. international right that’s

Luv Sodha

Got it. Thank you, guys.

Kevin Thompson

you. Thank

Operator

comes question line from Matt from RBC Markets. of next your the And Hedberg Capital

Matt Hedberg

Day, to a date on taking …for And the sort it call from Bart, thoughts are Is more, is really selling a note out? I’m if something cannibalistic perspective? have offered curious outlook you this on mean, your you that, I guide? revenue effect, does – we you’ll any XXXX just of at as it you on the really back wanted there’s in you questions. circle Analyst I said not you talked when at I’m do introducing I about But guess, core how that yet. wondering, know, some my think I about subscriptions IT Kevin, point XXXX. that

Barton Kalsu

Yes.

for talked gave subscription we quarter, for transition as for I first guide well subscription story not the us. full-year So XXXX again, doesn’t Analyst at Once of that the the as about a include the Day. any it’s

IT model. We’re products under just subscription our to core offer pricing going a

the the We’re of going putting and offer the scenes subscriptions. systems work together process the all through order in other behind to

how we the we rolled impact income statement. on quarter about that’s to going that obviously talk that and in our will our So guidance out, adjust

Kevin Thompson

from product companies when make at you license. then And you buy competitors decisions and conversations the points And of customers, as a done, or done, small at a a that the we’ve pick both going have kind can companies pay on worry of in not at, level. lines, work level not to thousands some kind do lower-end where are terms volume buy I of upfront research might that with can see of we’re believe the hundreds, from business the particularly perspective, based a year, we’ve of and subscription had $X,XXX about we’ve look $X,XXX competitive up, if I our of to smaller some of price our momentum small they’ll prospects our

do we our is believe that smaller of it version So a products.

will a to in so of subscription We subscription. buy or the some a market, up license volume we once do pick want buy I I level offering do see choose, a want get to

launch we’re So update down, get that then do done got it doing our we’ll date nailed all announce we’ll we obviously the the once we’ll a we’ve work outlook. and and

Matt Hedberg

you in year last lot then know And about your with prepared there. helpful. remarks, pleased investments That’s it. Got the Kevin, you’re I success ITOM, a lot of talked a and

competitive of the certainly there? the who had a product rates? running ITSM now. your you’ve quarters that little Can landscape? you Now you’re detail couple about surprised up win bit against Just by watch you more under Are maybe talk a for maybe

Kevin Thompson

Yes.

So we’re of thought against companies group running would. up we kind of we

people So kind we’re have running up against of who ITSM products deployed. legacy

that like others. from and products CA remedy and and So BMC HP

products out a needs ITSM our that meet design, there’s that really cloud on anymore. to we old is to something those use. They against, was really desk they so of much it modern more bunch run So that a deployed, modern, their product there up service don’t need not customer easier something infrastructure. easy, have don’t that are much deploy want much They more

Set competitors in that fresh different names. lot some private of companies so of got players are Fresh whatever, – We’re also the larger of and the or Cherwell fresh, like some a seeing space, they the

of of they because a service out desk. bump we there, that of cheerful when up and revenue help this provide we’ll $X there cheap maybe were little shocked a million very started at million companies bunch bit so $X space, literally against of to research there’s $X we help really are them, revenue, And our and number for desk hundreds billion companies that the them then small out actually kind desks, are

are there’s functionality than just run something trying So gives against up or help customer, that’s competitively. want to decide, I move those need customers do where desk, we actually I bunch and that of there to prospects a much that? So me a to more do who out potential

I reach think have. competitive that don’t the have, have pretty any enterprise is small we are that I and go definitely the a strong, and to think competitors a open customer wide perspective. market they have they to from particularly even we don’t the mid-market base of don’t

anyone thought lot – product management which seeing connect interest more by we’d we We’re you SolarWinds that in a with else infrastructure we operational than much our can IT can. can now team. provide you the rate connect management product, the we tightly customer because of see, the ITSM management operational of And that your

every – Because up very business that we the in they’ve that service in running some But – We deployed somebody against can going easily. we’re case. got in So believe most don’t I’m against often. cases, now there, we Why? relatively not high market almost not win – today.

my the indicated, on really were business. small I mid-market, As comments small focused enterprise,

level Our really that products company. of for are good

if will who you’re have IT, large really we complex, we’re scale If you business, yet, we you’re complex for to large. not really the doesn’t right but a very But solution be.

the will time, really the stronger. be short doing and large from to some we And the now So of compete whether a will months that’s XX get to ServiceNow all stronger point we we’re against going But product period with every and be months opportunities. we’re from XX today. make, now, relatively or that’s can those we – of where release over

Matt Hedberg

Thanks guys. it. lot, Got a

Operator

your next And of JMP. from the question from comes line Erik Suppiger

Erik Suppiger

Yes. question. Thanks for the taking

at you a the the can success bit what $XXX,XXX a Just quick On question. end customers, that you the of year? little with generated you talk had your larger customers, volume about of kind

Kevin Thompson

Sure.

a companies of trends volume large with most a one SolarWinds in We’ve technologies the of world lot we in the we’re Erik, got deployed. footprint So seeing, think companies a some I that, of the have is around of the world. around footprint

licenses. of or about maybe are $XX,XXX footprints So small, $XX,XXX

organizations footprints our there any size million licenses. of of maybe that’s some few $X customer where managing environment. But There So bought large, are their distinct or minority the are and but we are million very are anyway, $X.X of some, entire they base.

number really over the relationships seeing They’re companies And is last the we’ve we seen XX XXXX, coming months. XXXX large we over building dramatically increased the And last XX trend infrastructure. to really months, of those legacy trend what need needed infrastructure already us we deployed. our us area not all products these the of until of got in we’re because are using has to to say, a and visibility, meeting certain been the our customer have definitely, In the products the in us other we coming level we’ve okay, have order give a anymore.

manage large that not be medium-sized companies dealing and modern with They’re help able smaller, the from to are need deploying. relationship go these and us to we want IT to you a architecture We very relationships. to creating that

number the XX So we’ve large of in built last a relationships really significant months.

And in to the the interest larger brand-new we’re that created building, large there, that why who and accelerate Day, job handling with relationships for capturing new activity of on he which now team’s the meaningful David customers, in which much But level those opportunity go level talked we rest in team. at rate there’s is which of that place is to opportunity. a have us. into large And the put January motion, a try sales teams know we Analyst is place in about

able So give be months. we’ll six to us

telling of to having. the talk typical approach, the going be new the second cases sure it’s but many in the which organizations our in that SolarWinds’ from still, capabilities, about So inside think, bigger much touch, approach, don’t. to selling these a able and story, going sales it’s making breadth we’re a by proactive what of quarter, With still know more of they we’re end success kind I

and they And ROI less going which then – much older showing the of deployed would can the our products then them, organization is to be that they and the rapid, they’ve maintenance buy they’re rapidly paying than maintenance the can of our maintenance that actually give cheaper than have because how as we some licenses be for relationships have ones got to an we’re generally today. we value incredibly deliver

intentionally level we’re because So significant excited haven’t a really it’s seeing about, really that very success now. a big success of and already opportunity, we’re on we one driving until focused

Erik Suppiger

Can customers I the of XXX end was think end update you it what you QX? at us QX. at of had the

Kevin Thompson

XXX at a over QX. had we and XXX over the little end QX, end we at the of So of had

adding been on anywhere kind XX XX-month anywhere basis, level quarter trailing kind with that a between us. we’ve reached of to spend XX between that of a So been we’ve adding of

Erik Suppiger

Very Thank right. All good. you.

Kevin Thompson

going question. to more take We’re one

Operator

Okay.

question the Goldman Heather Your Bellini Sachs. comes line next of from from

Heather Bellini

make Thank I’ll you. it quick. Thanks, Kevin.

comments the back-end on about the follow-up to quarter. wanted load Just

where any of in seeing pockets that had you weakness, UK, wondering is know weakness in mentioned you’re mostly U.S., or a cited was QX particular focused Just you to related quarter? in the markets, the couple it if where your you of it I

been just I comment renewal high. the to obviously, your rates, then is on just second topic And maintenance wanted running get very the

caused and You the gives – spike I’m you it’s had XX% makes sense to you, fully gives – XX% what XX% it’s guess going what QX feel to down. wondering, been what like in XX%?Thanks. I And ticking to to guide in the QX? it just to you being

Kevin Thompson

even saw quarter fourth in in a have Fourth is more we quarter towards days the the quarter, shifted than Yes, fourth visits of always Yes. in more last definitely terms seen, the of the linearity XX we typically quarter. back-end. the

DSOs Our XX, days XX quarter, XX the Every quarter. to up they run in fourth bounce typically kind days. of other typically

in, year. last of more than the fourth seen other consistently, the days quarters XX we’ve the in business So quarter in come

fourth fourth a However, saw loading that in little we quarter, on little this the the the definitely side. heavier year, a bit federal in was quarter

Europe is nor indicated more quarter, federal, Asia was strong that a been we North of We federal really in We plan. the we a side, U.S. has that fourth it to historically significantly So from a less Pac. had less American a the on quarter more linear doesn’t the bit bit more little in, not really commercial saw saw predictable in coming. terms American. then a late North than perspective, had timing. federal in business fourth It’s quarter. And tend of be and come little

much had January, what a We already we October trend indicated, quarter. is strong of expectation linearity. better our this terms expect reversal from a and I and we in of than performance that As saw which

is which a most more feels linear it’s So in fourth a quarter software. bit blip, still than we’re little like companies

in XX% by. of December. ARR fourth in historically less that’s And and I’m not the what the said, But linear $XX XX% by what about Bart quarter fourth up of my getting in than we’ve seen our million bookings. quarter year went

So that’s kind of the shift in linearity.

we of you is over That’s to long were XX% periods we’ve long XX%, of a where bank it trended where On maintenance – of on really renewals two XX% XX%. we really, One, kind is, maintenance renewal be. And said all believe historically we consistently time. had don’t things. XX%, – then year what couple will performance. strong

fact, In had a that first because a came that some which way talked first renewal, the all the maintenance quarter, quarter. renewal in expect. is very rates through right impact the about range in renewal of XX% the XX-month boosted in XX% we the do the we And trailing first rate We disclosed we the mathematical basis, very, had large to believe part – quarter, this which federal our first the maintenance year in, on year. to

XX% baked our to XX% into got We’ve view.

hopefully do But if For good than higher-end we And able felt a doing to XXXX, of But the we and job. methodology that did the deliver that. really at of great of XXXX. that’s and to can in kind that we XX% range. that XX%, we’ve anywhere a deliver between job. process got And we’ve higher XX% really – track get what got be higher, little XX% happened like feel XX% record we’re hopefully a the we that to we maybe we’re and better XX%, to than bit

Heather Bellini

Thank you so much.

Kevin Thompson

questions Thanks. going We we the And call with and we’re end call got. appreciate that, the to operator, everyone’s the attendance for for today. on

Operator

call. Ladies concludes you and for participating. this today’s gentlemen, Thank conference

may now disconnect. You

SolarWinds (SWI) 4 Feb 202019 Q4 Earnings call transcript