SWI - Earnings call 1 2021 | SolarWinds Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and thank you for standing by. Welcome to the SolarWinds First Quarter 2021 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Howard Ma, Senior Director of Investor Relations. ahead. go Please

Howard Ma

and Good Quarter Summer. Sudhakar and to of our welcome our Pagliuca, and Thank and EVP Earnings morning, Call. First President EVP Kalsu, Bart XXXX and are Financial With SolarWinds' Officer; President John you, N-able. CEO; everyone, Chief me Ramakrishna, today

brief Following a question-and-answer remarks, prepared have session. we'll

summary can call. website slide remarks release our Investor On call being webcast simultaneously investors.solarwinds.com. intended press is is which during earnings on website, deck, at also you to This and prepared our a our Investor Relations our find Relations supplement today's

Please during updates outlook, as of economic environment by statements, the our forward-looking available certain market on on remember based financial the no the duty the this business including global statements of to of and undertake our potential that currently impact incident These cyber statements business. our this we required call the the update impact on our law. except on our and N-able made are those information assumptions, and concerning spin-off information, business, are opportunities,

are risks statements cyber to subject These business. and risks number our incident of potential N-able related the spinoff the the including to and uncertainties, of also numerous a

from risks SEC concerning and website. in available with today's SEC. or information in the Relations and earnings on Investor our statements Additional the and them these are the Copies release associated our uncertainties is highlighted filings with

discussed on call and the measures various financial earnings GAAP and in website. referring page on non-GAAP refer otherwise press financial of to available deck call, non-GAAP between the be of slide our financial today's discuss financial differences A When will will are Investor to Relations non-GAAP reconciliation measures. we summary our we Furthermore, we today's on release specified. measures, measures unless the

that, will over Sudhakar. the now call turn And to with I

Sudhakar Ramakrishna

first completed and in to you're trust safe. for faster tremendous thanking full inspired doing them for at accelerate us, we want to our for place today. help well the thank deliver competence, and commitment by Secure commitment Thank and not I've SolarWinds, we morning, joining to our our that dedication start increasingly for by I and have my partners first customers, partners to the you, something execute in of displayed you cherish SolarWinds. witnessed granted and initiative shareholders and results, and us staying quarter firsthand transform to deeply our and on customer customers to energized do Howard. employees ongoing their journey as I everyone, our the their Good employees, IT world. support attitude I'm I success, an take Design and commitment hybrid as and and demonstrable our hope

the we Design of and earlier what employees, our safety conclude them to our a end my and happened. our spend bolstering I on ensure With this how customers continue even provide of of investigation will further. incident, customers. our customers, to expand environment with initiatives learned our also in Secure and with in the In to have a Increasingly, we are this to conversations were whereas are coming us thereby, those of by quarter the can time we conversations respect updates the regard, conversations learned and what more incident we focused largely itself broader as what continue and have much have relevance on the about we cyber them. enabling the the our apply I'll to to are lot partners, minute. to cyber

and highlights in financial touch now on QX. will I operational few a

job on customer excellent an maintaining delivering did focus teams Our of success.

customers. as a role support Assistance our Program of the Our Orion in we executed played pivotal partners

of end first XX%. the a delivered of million, For quarter, growth above non-GAAP of year-over-year ending high we our $XXX quarter well total representing the outlook with at the the revenue range revenues

$XXX.X million, the EBITDA XX%, EBITDA adjusted quarter. high adjusted quarter representing margin first First an end was our of of exceeding outlook for the

Our rate we the February. higher management we maintenance renewal XX% year to we results rates our XXXX mid-XX% of in renewal than IT expected is discussed full QX core noted when in low-

We renewal continue hope on a of back as to rates to and to historical customer key grow XX%. focus retention priority and our over best-in-class

largest us increasing their license while with also renewed Our customer count.

investments and the federal wins also but sustained these have SolarWinds We including powerful We that secure. our first team's industry-leading other validation deliver are to customers, their proactive only efforts with the not solutions in sector, seen in affordable see also as those expand quarter. of and

business, N-able to in expand growth of our customers. MSP we QX, revenue double continue delivered partners support in Our and and again, portfolio SME digit, our XX%

the this Pagliuca spin-off call. business, Given potential provide on will business update John of a this

we performance in monitoring billion. with dedicated We us what of database of are accelerating segment opportunity were application monitoring our core by the monitoring, believe growing market us business. large the a Quadrant alongside over Gartner another future help pillar database of for is Magic momentum our and potential capture the recognized team to $X for We formation a in growth

We with capabilities, expanded helps to remediation as an on alerting a digital via needs techniques automation, AI/ML unified customers the cloud we IT deployments. to platform leveraging of monitoring, our integrated and to offerings a that stack support continue hybrid accelerate full observability our platform QX in evolve transformation company

Chief Officer; and the management Webb as Customer Officer. of expanded our Officer; We Information Chief Chief our Security and with team Rohini Kasturi as Brown Andrea appointment as Tim Product our our

Administrative Chief assumed legal corporate HR, IT. development, the Bliss functions Additionally, the Jason and of of corporate Officer, integrating role

N-able N-able basis. added the and Officer, Officer Product on Technology General management Chief members Counsel, as a operate In Customer including and to a addition, stand-alone People business, to a Chief Officer, we key Chief prepares

concerning supply industry. customers recent reality turn me against incident and an a new SolarWinds, The let the update together widely to by the providers initiatives. on is share we by used on Secure software our public technology and need Design rely our infrastructure Now which real-time work used increasingly to to information. and our for for on cyber and sophisticated chain their illustrate This industry the represents all the sector and and the novel [indiscernible] space actions

SolarWinds is learnings in sharing broadly our the about industry development and cooperation this are industry-wide help that against protect and to given our secure practices model as products. And that and industry's to transparency opportunity tools and SolarWinds software help belief believe see future committed the for prevent attack environment, position lead common -- development attacks. to to an the a our we effort help will we industry processes an best

discussion closely more partners. and In our with fact, engage this as is increasingly the customers of I topic

security our with IT, past committed further potential application have environment actions third-party access. the that system our and risks against to teams adopting least enhance product of of a months, including Over series development further designed and been X to the attacks, and privilege associated implementing access addressing are mechanisms

also We that our are and dependent at recognize people procedures security on the posture SolarWinds.

So training for we security investing employees. in are our additional rigorous

Our goal as these with initiatives and as partners, proliferate being it goal secure well a continue initiatives solution. possible. investments We of customers to our powerful, my consistent and affordable best-in-class of provider is being see and them resonate with to and as [indiscernible]

call N-able John? update the turn on to business. provide over the me let John Now to an

John Pagliuca

of I'll XX, our quarter QX, announce performance. we Also, solutions, minutes across rebrand that equity partner the on an hosted analysts. I'm next and first new Day Sudhakar. Thank in you, and X Analyst on update excited the completed N-able the website community giving business April to an sites. platform spend for N-able we

presentation. from start want our some recapping by points to key I

$X opportunity trillion the the but IT First, competencies with [indiscernible] of small market SMEs. IT for as and a is globally SMEs are growing. core most enterprise and management security complexity much larger IT which N-able medium over and as starts spending, not enterprises,

can effectively SMEs is As evolution. customer SME be in be to a MSPs their have increasingly result, trusted technology through partner the effectively -- can needs. their MSP to address And turn, turned digital that

purpose-built software IT approximately role for offerings in market an SME $XX MSPs our by able just also double our play We believe billion increasingly software but successful to shaping decisions. Using opportunity expected are spending is important solutions build XXXX. service and to not platform, nearly the

for are their effectively do why because pillars. the win? to win them Second, and X we're scale architected across to MSP we purpose-built businesses We enable

is always a been strength both and first breadth and has our N-able depth, monitoring SolarWinds. which of The

the Our live in that view thousands of MSP and on platform hundreds we on partners devices. environments centralized alerts our provide end rely and day customer and day different out in of

partners went perform to In with management QX, functions MSP the N-able our Intune monitoring Intune we integration, platform. depth. device directly expanded allowing Microsoft with our We GA

to extended into remote network coverage also workstations, types our map device access devices. of capabilities We additional adding iOS

MSP our and protecting strength is our partners are via approach of protection layered RMM our which truly area cloud-based and solutions, second their and platform give Our security seamlessly delivered a customers. to fully data

partners of access the our important. into our customer our because addition, In environments, end platform extremely platform gives is security

by Secure SSH and Sudhakar the and single for devices. that of authentication, as light have Design to detail, products, multifactor in implement network our enhancements product continue sign-on end In enabled security to we has initiatives such discussed

This partner Third, become that business train resources we business build our helps platform. believe what to partners expansion how on and we of operators. offer on efficiency, retention improve best-in-class success better books our stronger our drive and technician

they and look quarter, the Empower with later how face. have We we'll trends our forward this partners industry our discussions solve global the and hosting challenges to event on to

with company spin-off heavier to model unique MSP As towards of a We the potential partners a growth the our the I growth that Rule MSP partner new add help XX aspect lean to when enabled of expansion. model. transaction, grow our grow. we become fuel That's we propelled want and partners from highlight the strive stand-alone called

Through of grow an This partners powered More power partners new when platform. when model solutions by devices significantly, management. additional biggest of We solutions. those adds add this employees grow and deliver our our the that force. technicians we sell-through grow driver of net sales our when SME our again new and rate. as sell-through when activity, our SMEs MSPs our use essentially also the extension we partner, retention the [indiscernible] partner act partner-enabled under is and our add customers the

We Turning revenue XX% solid of especially delivered growth, a couple total and N-able's revenue worth QX considering headwinds subscription XX% to performance. noting. growth a

before and the end in the returning normalized February of our after at demand impacted in March. activity, generation we to January which levels cyber sales First, slowed more additions December, and and new partner expansions incident

Second, remains modest to of year-over-year our on year. of the the which impact last continued began although QX has initial rates growth to revenue we since in impact experience the during subscription headwind, last QX deceleration continuing of COVID, a year, improve

ahead, Looking conditions balance optimistic the XXXX. for we're improving of cautiously about

occurs spin outlook Day for months. provided revenue for QX an assuming improvement QX, in our over XX% and the coming N-able we approximately XX% the Analyst As full presentation, year, was at the growth over to our growth XX%

We are we're excited planned making months. international will spin investments for R&D, We of N-able, the success which growth the us and that still as we partner believe exit acceleration we position coming go-to-market remain growth in over complete for to targeting XXXX. about

With that, on I'll it outlook. and provide performance more turn to our to details Bart over financial

J. Kalsu

thanks and us to call. again joining John, Thanks, everyone today's on

Our was finished business. end is well above representing or about -- resiliency year-over-year XX%. reflect growth million. a was sustainability first our management piece quarter revenue our revenue quarter quarter Total of non-GAAP X%. the $XXX for results million, what had And of while IT of than N-able range total execution much better ending the demonstrating representing We with million, driving of high talked and the core growth the and revenue that $XXX solid model. of just quarter the total over our John at $XX financial outlook first of anticipated

down versus and prior X.X% maintenance revenue Maintenance quarter, year. prior million revenue million first in the versus $XXX.X was year. in Total up the X% the was license $XXX quarter, the first

XX-month the disclose our perpetual trailing products typically license renewal on maintenance We for a rate basis.

was XX-month XX%. Our QX rate trailing

provided rates exceeded rate However, heightened incident, expectations performance approximately mid-XX% windows focus renewal since earnings low- our on the QX, on XX%. given provide of we the range the in throughout for we smaller our in-quarter which call. last want This to cyber XXXX, to for the renewal was which

post of In this trends XX% we quarter to by increase end. factoring after renewal percentage addition, renewals rate based occur on that in few points that expire expect historical a bookings

first quarter, cyber to as license first was COVID-XX continuing the is continued revenue our revenue million, of XX% The the the a which the impact in the XXXX. for result the of on-premises impact and evolution a the of of pandemic decline our products. to combination approximately $XX.X For license compared subscription decline sales of quarter represents of incident,

headwind for to X the subscription sales point percentage quarter. in our Our on-premises license resulted revenue approximately

the first substantially the activities that believe parts early our quarter demand relates efforts the we should the to the believe this particular. December and our first the quarter from our license of quarter said, be year-over-year We halted impacted We That new negatively of it customers. through gen bookings the in portion the as negatively on we focused assisting as early quarter impacted growth. in most in first

in working through year. acceleration our move quarter, to we continue as as the through rest the trend we are of and the saw We move -- we the throughout business first that

ahead, Looking have to our we on expect to business. headwinds continue near-term

ARR reached million ARR quarter. million year-over-year grew reflecting $XXX Total reaching at March as Subscription end the approximately of of of $XXX XX, XX%, XX%. growth the

subscription to Moving revenue. our

core in N-able's management $XXX.X year-over-year million, subscription as subscription revenue non-GAAP XX% revenue. XX% quarter was driven subscription First growth was as well performance up by solid revenue IT which year-over-year,

has We XXXX growth the successfully -- first finished quarter is XX% that customers quarter months, year X,XXX and last with improvement sustained retain the since XX than we in Our $XXX,XXX more with driven more customer land, model year-end. XX% over previous finished our and which have spent the of relationships. us in the expand a

relationships build customers. our to enterprise continuing We larger with efforts are our

solid first the non-GAAP also quarter. in We profitability a quarter had of

margin quarter the for of free million, of totaled quarter end flow EBITDA quarter. adjusted outlook million. first cash representing exceeding first Unlevered $XX high EBITDA the was First $XXX.X adjusted an the for the XX%,

remediation, and $XX costs, and million to free containment, are included -- spin-off-related costs unlevered flow cyber-related professional clarify of EBITDA and of cash from investigation of proceeds. flow want cyber-related Excluded fees, cash $XX $XX do unlevered million, of costs They enhancing be process. cost insurance security will $XX net and chain approximately recurring million including supply these that our million I structure by of in go-forward adjusted onetime part basis. $XX costs from a IT EBITDA, and to at million our Secure the aimed are onetime nonrecurring. initiatives, are which separate Design distinct on These and of are not

We near with costs the fines of expect that quarter. litigation, to incurred fees. first conclude These forensic in difficult in less are in significant future, efforts expecting associated not onetime to predict. however, cyber but amount future and also are, judgments ongoing the only quarters or and we the be cyber-related future to include the the government our but professional costs potential investigation investigations costs periods than They to onetime fluctuate in related costs

coverage a insurance of We expenses. expect portion our these to offset

coming costs subside to the the which We spin-off, targeting of following to expect spend-related our are onetime completion we months. complete in the

adjusted in future at leverage our we March EBITDA. trailing are March at financial continue Net XX-month With our we to a $XXX.X business. in positioned growth to from million standpoint cash XX invest the well was XX, X.Xx believe of

for you through thoughts. walk it now will some final to our before Sudhakar outlook I turning over

the renewals level range we the feel a business, with impact is customer past. early of from While indicators provided our around still continuing on of pandemic global in ongoing pipeline top and are of uncertainty too outcomes the that the precision the health have predict we enough is growth the of impact of cyber incident still of the there that

second As revenue, only earnings prudent such, we share. is outlook to per for quarter of adjusted EBITDA total believe it and XXXX provide

the second XXXX, expect growth of For to million, $XXX $XXX revenue X%. million representing of in non-GAAP the X% quarter range be to to year-over-year of total we

implies second million EBITDA be approximately is quarter million, the adjusted $XXX for Adjusted to an EBITDA expected $XXX which to margin. XX%

impacted first of N-able reminder, that the that implementing and potential Design the incremental is initiative executing growth quarter in As EBITDA in team the the we as began were spin-off. spending as the margin a with Secure anticipation associated John adjusted the initiatives our being well by by

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

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

first we continue will all so versus through that to the to year as regions. renewal While what say are move further historical we outlook, I year consolidated in we expect be are seen not maintenance we return license the security the mid-XXs performance on Based quarter, as expect full far QX our that and we've rates providing in we to ensure performance targeting work and we XXXX, we as to their in portfolio. success and for enhance XXXX with our product continue customers the of rest in to will improve to

new X of is Increasing total years, the and down of expand priority and percentage the has that of make past continue over in revenue subscription our revenue a our sales team. been XX% XXXX a our with our on-premises We revenue. to these intend subscription offerings to products focus recurring sales recurring

And EBITDA of respect to free finally, adjusted to with our flow. conversion cash

was shift for as was by below and payments, well lower ongoing rate quarter. annual subscription our trends. which rate first higher maintenance as renewal to license first the seasonally Our bookings. in well impacted conversion historical The the are negatively The quarter bonus mix more revenue

expect conversion be low We above the full grow in to for XX% and XX% to rate year the our XXXX. range

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

Sudhakar Ramakrishna

you, Thank Bart.

competence, commitment delivered I'm attitude needs customers. QX confident our platforms team's and even will customer make evident that and the us success in of evolving and delivered evolve strong IT our both results Our our performance and a was as EBITDA. on more focus we continued our relevant exceeding outlook revenue as serve we hybrid

across towards We will remediation. ITOps, configuration, and and subscription our of to mix and visibility, moves to These progress a and greater DevOps recurring alerting enable professionals automation SecOps revenues. integrated experiences expect have monitoring, accelerate further

call, I progress that outlined in and and all the executing focus on and during the to sectors. license will our our of across growth XXXX, subscription, continue geographies on retention ongoing initiatives maintenance earnings QX customer remainder focusing on For demonstrating be

and partners and commitment growth our support SolarWinds. demonstrate portfolio with of progress our again our employees, to along needs to customer hope thanking the to progress dimensions customers. We conclude growing accelerating customers I'll for and support license to by in continue of their retention, and and strategic maintenance

I happy now and address questions. will be Bart your John, to

Howard Ma

for questions. ready are we Operator,

Operator

question first comes from of Your Instructions] Capital Hedberg [Operator RBC Matt Markets.

Matthew Hedberg

start Sudhakar, I want you. with to

But hear, have I both and business are a and XX% bit between the quarter renewal wanted customers, unwilling the Now breach where given dig to we distance year. today. side. Obviously, are were be look do potentially more Just products about into the existing were in that really SolarWinds nice new on little we helpful. customers, to at now to new would the the expectations or coming that into both any you bit are a where breach? some hearing renewals following now detail

Sudhakar Ramakrishna

Matt. Sure,

I I well happened across would I sectors as way of of And what it sizes. as understand customers like As with the and my incident. lot prepared in a quarter, in a the I definitely the around mentioned describe happened. remarks, that earlier lot questions The to geographies is were mentioned spent with time base want customers security what

say customers vendors, just some out about not more that coming going standpoint a large level to of could a breaches their lot the would know. vendors are and that that them happen a happened speaking you us there's appreciate to curiosity in very as what I on from including breach security environment, of also Now but see

that. doesn't proposition and the the instead, of value like that the about main So discussion, become it's things portfolio, topic and

that examples to seen So of want don't they I saying haven't us. customers evaluate

more them increasingly, so. are that having doing and In conversations. of would broader are that what say And find fact, is I I we more

networking the we with, had the say, CIOs So whereas we a and with now are may discussions have a having discussion CSOs. previously, engineer, let's

have relevant conversations us strategic gives that with So more them. and more opportunity to the

Matthew Hedberg

the lot thinking you other detail cyber a I provide and sense. be makes throughout guess you of then we year Bart, but costs. takes year. some a should puts this us didn't That move any And it. that margin Are side incremental on some thinking I'm as did outlook, give Super helpful. specifically full Got on there we about?

J. Kalsu

we over Yes. what originally Matt. a little QX EBITDA margin was had expected,

that still quarter. we I we're We're -- in it came a still in -- like so second to lot XX%. have the And of think facing some close headwinds

quarters of we back in talk half to increase of if the to performance, half that are lot And for about of the from is margins in revenue of year you us. would standpoint. in improve at revenue half QX for If the back year, well. look the tend license seasonality, but as margins and a of second our then QX like case year. because us the in We this the better to historical that's expect typically rise the year don't our back the A

Operator

Your comes JPMorgan. from Auty next question of Sterling

Sterling Auty

costs will spend? that in there there is incremental a to time I'm and Or the et leverage will that variable incurring going so margins security will need you that that level mentioned just -- which degree? of So curious, to over you're impair portion need is that the be you a level operations, maintain? for you is grow mentioned that some is Meaning to permanently this to component maybe cetera, continue, understandable,

J. Kalsu

that Really, $XX a on Sterling. fairly business. million that basis. increases, it's There's revenue. the $XX increase things testings portfolio rest to going like IT our as as are in to are slightly may as number $XX not going stagnant and that Yes, of scale far few or as -- not are things base penetration what our our But our time. million, increases million going scale a to over that $XX million be our that, with costs the the like footprint IT customer it's go-forward few as a It's to to with

Sterling Auty

And is improvement new the kind hangovers that breach? then still look finding customer from are lagging because product in rebounding the anything at the And Great. there within of purchases, you're new line parts or particular the when are line there that product first? of of you

J. Kalsu

what being revenue. see standpoint, product in -- toughest our across Obviously, the first as you much a product our the about saw down scrutinized. the But Sterling, was being we it board. obviously, across our in the first XXXX. year-over-year. board even from is product as quarter license Orion pretty quarter portfolio a -- From was the it really most far was standpoint, wouldn't we was quarter that just And really, talked the And

Operator

question next Oliver Baird. Rob from of Your comes

Robert Oliver

X questions.

First for Bart. Sudhakar or for

little a -- it prepared remarks up. quarter. the sales this Bart, said bit team. had did you're Maintenance, subscription that license growth Just priority a making priority pick making the for on obviously, you slower in the

to the So just be of had folks with to easing as wondering, customers bit as on had has in goal then customers? know you perhaps some for of SaaS renewals, has IT since approach John. changes, of I happening arrival And And been the I subscription. convert in guys portfolio? there Sudhakar, some maybe barriers your your not to that been to the follow-up X But approach And to as some proved well subscription? renewal a about that perhaps is the core

J. Kalsu

Rob, for first from you attractive our and a the as standpoint. said, foremost, financial existing maintenance is more customers, renewal

our products database our priority of subscription areas that hard year, existing maintenance base the And So is that's to our the -- And all Sudhakar subscription portfolio from making making make standpoint that we're may as subscription. we're The for on-premise the done us. sales go of from our we with we of second really, into SentryOne half a the to of we're still of priority Especially starting products. that's We're on. case on-premise customers. shift that are customer What today. product focusing subscription seeing have a initial not as I most market. a new we harder a one that move into think sales that Sudhakar? move to acquisition, the product with

Sudhakar Ramakrishna

Absolutely.

there don't speak, specifically on make for we reimpose packaging half want so integration some as that unnatural portfolio year. Bart more to to logical opportunities and very into in and for on explore the the as front. us and translate our portfolio, database And options moves, point, the options with additional we to back of more to that Just are subscription, mentioned,

of train our to in as also and our for greater continue that subscription, incentives that more additional, are delivering value function do context, [indiscernible] is have even it, of teams But subscription, customers, something functionality We that in sell amplify. most a then we of those to leaning to and more towards sales offering context. sellers indicators we and call that a

Robert Oliver

Great. That's X follow-up And you. helpful. Okay. really John, for then, had I

profitability any thinking be XX you're just -- Can really there least kind a weeks the couple how stepping just know Just change of that all get were you I you're you that, could event the and company. a guys sell-side Rule better and moved appreciate from from things, maybe some at [indiscernible] little if community, puts in and I analyst emerging of versus did you're that does the know, kind color. of through frame along obviously, you thinking given as how start opportunity said, any particularly is of about meaningful expansion like a It you think, about desire as now, TAM I of sound, profile back the I with, XXXX, COVID investment guys without providing to takes, here, profile doubling specifics can't, think, growth recent you here, there the and growth. we weeks around to impact? a there's growth of some bit kind from

John Pagliuca

Rob. Thanks, Yes.

progress horizon. As I to success. outlined the if customer prepared And our investment sales, some to continue to return international we're partners. already. X I plant expect a begin see to in geographies flag larger in the via I shorter world those those WANs of to our international about in and think different a return. those R&D, parts you we're of remarks, Each sales there actually it, of going increase also and other have areas MSPs have our channel starting investing across to and mean, of we're

the So that say, will shorter return. I have, would

one second success. customer The around

customers to resources a and they grow help for to help grow, we scalable we business more add to for continue medium-term has and We as services, a have grow. them at technology add a to return our That partners because processes and MSP them to grow, bit their add way. and them little of

And then the around last product. one

on of MSPs to for new and brought Chief to Officer. clip. ways bunch we a help improve looking but at -- he's at little mentioned, And the how services of As scalability our platform, these different a add our Sudhakar to us Technology faster a also of CTPO, Product bit our

their one think going And So it adding service is view, can one adding we to services bit into the our to with quarter to MSPs to jobs of time build this develop because, X. cohort product you then the takes have demonstrated and and strategy them And One more is a integration. That we for the efficiently. our about ready. that we're on more these things platform, make course, as second service a of them we SMEs continue do area to Intune monitor, and to expand from begins little MSP point that that add. of have protect we

those different slightly So say, for I'd each it's return -- are X the of areas horizons them. with,

Operator

Management. Next question comes Berenberg Capital from Crane Kingsley of

William Kingsley Crane

to coming of What It's from? management us these you creation teams this bit team traction continued team? see Great. a about dedicated database great within members of little tell may the business from more other portion. Can the the be

Sudhakar Ramakrishna

Yes.

very it was in specific I team. core So a calling

But more development so have. not is because all want the we functionally lot functional product and the say, a that here to much have we off across the from let's idea functions teams. board the organized create to So marketing we in leverage, and hive

in leader, sense, a Potter, is done core built on day-to-day a business. team we've that focused this driving cross-functional a essentially virtual and appointed Bob is what that being However, team

functional ways, core teams, also So the preserve we team. in create of but of the many focus our a integrity

scalable And that's from idea this very experience. initiative. So behind the this my particular a model is

William Kingsley Crane

positive that. That's appreciate commentary And helpful. drivers I then John. for the of N-able. very on very one growth Okay. That's

provided Analyst Day. growth recent Just to touch wanted the that most outlook you on at the

the be half guess year, it there's I the And in the for in we so else what we year, back XX% if XX% growth this we implied implies guidance should should anything and the make growth of outlook? what of that if terms of considering XX% and the [indiscernible] the look the at XX% QX, QX growth with and full results with generation, the for guidance growth the for by then to demand

John Pagliuca

Yes.

throughout So the for expecting guided the so see, just remind And added year, to some -- a we're depth it the million through. you to would of pretty to -- the $XX.X to you million. million. we guided we $XXX audience, that the $XXX continue go $XX returns million year, and I That's as to pickup from XX%. acceleration get say, and we consistent investment see and through on the of we What QX go

We'll of So the we're some it. in to that's products. thinking how invest continue about

MSPs some that as can have that, the begin hopefully to a that couple in continue DNS to begin we see filtering that get to more will for offerings our expect offering on will that us our a with new recently platform. that -- come add bit they type our to We And a you'll service, little integrated add our of to return both the to investments, for those MSPs. be help of announced, with hope and

Operator

of Your next Securities. question JMP from Erik comes Suppiger

Erik Suppiger

there that comments What during breach? anticipating? your do about liability is some fines you're are judgments what the liabilities and mentioned I have costs you think for Or the onetime that you had costs.

observability how comment just started or these the performing in your that's you of about the days. market of ago. those think year can secondly, slowly performance I so products? get I'm wondering kind then And a

J. Kalsu

the the on this observability relates fairly to March if don't kind around it products? our standpoint at to second end. process early of XX, was in there question, nothing your recorded think cyber Erik, liabilities, of as there's that? think And the as the fading right have of we incident. of the you We at from question, now, out liability I investigation. anything as we just were the point. But something a it first we're accrued relates -- we've you repeat could And were -- I that as it

Erik Suppiger

Yes, competitive a you vis-à-vis ago. the or like back for environment at Datadog so if do were how start, Dynatrace? wondering to starting just pick the think, observability or And Relic those if year are I products to you slow go New Or or you. look up I'm

J. Kalsu

piece us the So back moving going going we're for product of That to is to year. in things for portfolio. yes, the half a one evolving core of that yes, priority still the revenue be on subscription our the the obviously that on. we're business, We're focus IT That's into side, of that space. still

our been well. half XXXX, that Analyst So in in our second spend XXXX, later this the focus we'll when about observability talk then probably a the make that Sudhakar Day we and year priority of the of products, the the something year, and something as back is I a have the will And has on lot half of of N-able XXXX into Erik, business.

Operator

comes Singh. Your next question Sanjit from

Melissa Dunn

for Morgan This from on Melissa is Sanjit Dunn Stanley.

talk to monitoring. the hoping So about network

to So how modernize how and might the is monitoring Orion these cases. address platform given network need to the use to shift cloud changing

Sudhakar Ramakrishna

Definitely.

a So highlight facts of there's that here. couple I'll

the to a That's is shift segments, long in a the is way certain is there about period world to definitely hybrid step be world for While time. think to of a going cloud very that X. better

that albeit premises pure monitoring on fast-growing, let's is cloud-only as is you basis, even think not network still X market. Step market, if that a a a about growth say,

able leverage our deployment. be our to support of needs to of So platform to the strategy kinds both is

the And platform platform is in platform that with is integrated monitoring, remediation monitoring Desk the Service Orion system, also as then application supports will our evolving and mentioned, be database network the not but and monitoring, single which automation, the through itself products. only that support alerting I way

of growing lot and we that's needs So relevant think the that's customers. to that evolution to more the gives support confidence us of about, what become a our

Melissa Dunn

end. That's Okay. just my And last helpful. one then on really

guys investment forward the are As of we IT management core the are cloud strategy there that areas you within specific the focused on? think about business, of going side

Sudhakar Ramakrishna

areas investments in functionality A the and way that database our is about integrated some getting across how are I focusing that we are we space. of the functionality, with the the then X discussed. APM that I mentioned, spoke dimensions to we couple recognition platform Increasingly, the of think integrated about on the

IT, at specific, SecOps we'll professionals. So instead be looking and needs looking DevOps of product of the broader at

Operator

Tillman Truist. comes of next Terry from question Your

Terrell Tillman

The Sudhakar John. believe, IT idea cycles I N-able. core both I'd for management Because a focus your bit in the or move the we Maybe could activities, and sides of on be sales of if returning pretty quick, little that. can to reality business, curious generation more is demand

in are return the demand seeing that et cetera? some and what cadence of demand could from And quickly and I So normal early And terms a get on related then of you're how of the follow-up. have activity pipeline, generation volumes? back the things rebuilding to to kind

Sudhakar Ramakrishna

Sure.

what the in on prepared which sides continue I'll to the our First, that throughout quarter is of improve quarter. both his Bart business the highlighted performance through comments, reiterate

So than March gen to applies was better And better than February, demand that which engine was well. January. as the

our know, And customers customers that even hands try much the you was not many When deck to cyber we impact. customers understand help our were make on were it and they could incident from vast partners our so, side we our safe to of majority essentially sure all as hit impacted, and touch us, as secure. pretty the as to but the

we're to we demand in traditional then know, gen our we continue sides that although to growth on focus. turned is and So describe both gen we things the it standpoint high-velocity both investment as But focus stabilizing of continue normalizing, help I a demand aspirations to And areas you grow demand it have is to because we of activity main an business. engine. QX, our demand from have gen. as fairly on on way would the not attention it started And and activities, the we

Terrell Tillman

And are renewal this and see. in-quarter question sector know be -- providing of year you other half seasonal What kind federal curious, the we I'd who strength into great Got do the back sector the going Bart, And industries? for, typically? the that second your of in and to has how it. That's part where of specifically I have rate don't big of the was is it the is thinking versus business. been a the resiliency question XX%. helpful that And what

J. Kalsu

So yes.

provided, that Terry, as XX% a well. I as that actually I little expect more through move said, bit the like to improve So federal we includes our customers we QX. that

about our business we the slightly past, QX. we also about talked the So in that will number that getting fact fed our customer that's and renewed than lower there commercial our fed But that we've was that's [indiscernible] and And for that deal well. QX. customers. as both I biggest say talked in had we're customer the

So we customers. our fed seeing are with engagement

customer little to harder bit that We with base that probably are renewing work as base, are having a well. but we

Sudhakar Ramakrishna

continue amount of that scope many have the of and on the to be Bob's really sector I size the And time And back to don't things talking customer rates have break the on, of expand. it base, to certain renewed, segment, my also renewal been a and We [indiscernible] selling number proportionate have commercial. have customers, or specific public customers them. with including by point, down given we

add to about in we'll the think continue us as blended So go. context. we And commentary

Operator

are no I'll remarks. you turn for to further questions. And there it back closing

Sudhakar Ramakrishna

I done. folks. Thank think you, we're

Operator

you call. participating. conference for today's concludes Thank This

disconnect. You may now

SolarWinds (SWI) 29 Apr 212021 Q1 Earnings call transcript