SWI - Earnings call transcript Q3 2024

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Operator

Ladies and gentlemen, thank you for standing by. My name is Krista, and I will be your conference operator today. At this time, I would like to welcome everyone to SolarWinds Third Quarter 2024 Earnings Conference Call. [Operator Instructions]. I would now like to turn the conference over to Tim Karaca, Vice President of Finance.

begin. may You

Tim Karaca

me morning Third Good President and to are welcome CEO; Thank XXXX to Earnings SolarWinds with CFO, our Quarter Lewis our Call. the and you. Black, everyone, today. Sudhakar and Ramakrishna,

Following website This webcast is session. a call investors.solarwinds.com. remarks, our Investor being Relations we prepared our have question-and-answer will on at simultaneously

financial certain our and expectations enforcement a statements regarding Please SEC our to which is our our deck, concerning a outlook, can find customer evolution economic also slide the call. call ecosystem, action, those our this the our market You our during continued expectations today's to made partner earnings prepared gross supplement regarding impact Investor opportunities, update are summary business subscription-first based duty and our remember to on on environment statements law. except of from number SEC including to the are during including available our These and press and that mentality, release global retention, and risks statements, we information remarks the intended currently SEC. numerous are filings geopolitical today's and of are and assumptions, this highlighted required as and risks in Copies available subject the uncertainties our debt. Â These earnings our by statements no with uncertainties, on release of information, Relations undertake level a website. our the forward-looking

that on non-GAAP are the and slide financial call. between our on press call definition results final reconciliation otherwise financial and will we'll only A on external XX-Q. refer over measures We when various us metrics are other referring file financial earnings release now turn financial once Investor the today's final Unless financial in our Relations call quarterly be on website. Â Finally, measures. financial and will measures and differences summary that, and call discussed of Form will our deck be non-GAAP non-GAAP report discuss today's of GAAP Sudhakar. preliminary auditors available earnings the of measures, by I and to specified, and the discussed to we our release today's in on we note pending to page our the review we With

Sudhakar Ramakrishna

everyone. and morning, you, Thank Tim, good

As thank partners commitment once quarter, exceeding their to to our to guidance always, metrics. strong I'd shareholders another report our like for customers, I'm we and key employees, across SolarWinds. delivered ongoing our that pleased again

Our with in success, which from that and results our testify turning and business the our EBITDA and pleased strong growth. Â Now offerings this quarter. trust the depth top to to the of us. customer I'm execution our the place adjusted highlights line to to continue team's of in teams, commitment breadth customers resulted

subscription and strategy. First, ARR we our again revenue delivered the growth, of subscription-first momentum sustained strong highlighting

continues October Observability our second. on portfolio, adoption a of Second, revenue we this significant updates to growth. Xnd, Solutions more our this just On the increased announced drive to part of in

operations representing continue now the for time extend to continue sizes believe X% balance range. will some to Lewis quarter growth, customer the more outlook the our Third, to customers. Â I continue financial $XXX the and million, highlights call Fourth, high portfolio of end turning and the our and of for XXXX, before delivered QX on total over to to of time balance We with financial regions the revenue issues year. our resolve year-over-year above of In and touch for good on of our detect underpin customer market our guidance delivering we QX segments. the experience of our solutions we criticality concentration across deal solutions our the to value we our goal best low a and to performance. color

the and flat year. quarter XX-month quarter of third subscription strategy was to renewal up XX% rate XX% XX% in renewal revenue growth subscription-first XX% maintenance and our growth of quarter. Â Our and year-over-year our in-quarter QX was and XX% We XX% in last from third rate last trailing subscription execute delivered maintenance of continue ARR from

highlighting solutions. quarter robust, was remained Total margins. We representing value compelling metrics the retention with an X% of growth third delivered EBITDA in our of the ARR proposition $XXX of year-over-year increase customer XX% $XX adjusted million, Our year-over-year. million, XX%

and their to we complexity, lives We unmatched remediate time as to cloud to across enriching needs. and value, continue their previously across and them environments, hybrid monitoring best detect time of decisions cost Rule for adapting central cost XX portfolio total costs and remain productivity from believe complexities customers' our their array our management continue database our across the We discussed, our on-premises, all visibility evolution. for a increasing of our and while higher their facing make consolidate issues. serve be observability, Customers to customers use solutions customers hybrid purpose to ownership key to the do. to and deliver to portfolio, Reducing of multiple our I've evolving of time company. Â Turning factors lowering vendors organizations motivating their diverse of service performance empowering to environments. I is lower product to increase tools, our platform

The and customer a and cause times growth. and technology SLAs. missed line ROI prolonged a customer resolution with both both resulting by future further challenges issues and traction gap declining of bottom distributed private can organizations cause Most the can organizations. Â Turning tech on-premises environments Observability. degraded and key assets and to hybrid These lost have encouraged gap. even performance, cloud. are observability company's hybrid in these damaged and in This leads here, We complexity experience public highlighted the to from impacting SolarWinds from wins identification by sector business reduced visibility QX satisfaction,

forced try course, to limitations or tool cloud other prioritize tools, of due solutions. software many customers either gap with to draw. Of hybrid to the workloads counter are to observability Often, they vendor leading on-premises the

growing organizations that approach are offerings environments.Â It to as customers increasingly our on-premises visibility platform validation their gap now cloud designed TCO give month, as their we close and the across collectively see consolidate known solutions our However, increase unified and and our to observability to in across tools, lower to our gratifying visibility our observability SolarWinds we observability hybrid Observability. environments.Â Â Earlier this turn announced is

offering, AWS tools SD-WAN footprint customers thereby support SaaS previously previously points hybrid extensions, cost as SaaS, Observability observability customers access more customers total issues. enhancements This XX%, landing arrays. which their their solutions competitiveness is evolved to with wireless as progress as to Day to help around hybrid workloads, in by be our storage and we versatile native improving system in anomaly-based known SolarWinds tightly on as their aligned We October at with including end change, ownership; reduce market expanded SolarWinds reduce capabilities, continue discussed our detect these new known Azure solutions reducing to alert cloud eliminate and readily incident market enhancements reduce offering, management. our to scalability SolarWinds comprehensive key customers.Â Â We and believe we will and Observability, now improve help from.Â Â We our for much further of our as can X, AIOps observability These self-hosted SolarWinds to Our observability our extend how alerts cloud time and the resolve time and help as our improve fatigue Observability to known respectively. customers we

great to value management to deliver and our performance database a work observability, together solutions service customers. Our

Management. and teams, face.Â Â Turning customers, of the told our with confident offer to improvements SolarWinds by and they We are visibility customers problems to are energy solutions excited our we these the in bringing Service sharing we the have our

capabilities generative AI leveraging to accelerating remediation We are capabilities, run extend generate customers allowing to time and auto savings. books, further our

our organization. service enabling We desk department journey management continued also to our the with help expansion enterprise provide our in any across solutions platforms, customers

our the customers meaningful meantime have features year-over-year resolve AI Gen who to in enabled achieved ITSM SolarWinds issues. improvement

higher these sales We premium seeing capabilities, AI our greater package result of performance service solutions are prices.Â Â Now to part management adoption and solutions. in database of which are turning Gen average our desk

solutions. We packaging of the database pricing continue to simplify our and

Analogous always, over to while reduce the Now X-plus experience, this our opportunity believe and the transformation. We their year.Â Â First, further expand choose the Observability and platform and further believe to will manage we their hybrid in changes progress last delivering freedom tools. the solution we years, and achieve consolidate on footprint the we flexibility in customers to multi-cloud for our announcements their recent we achievements right have dedicated effective for extending the them adoption helping solutions against customer the built observability priorities them simplify business are represent SolarWinds us The higher costs have to ASP.Â As we their customers implemented give our remain resulting this environments the help hybrid environment. accelerate significant milestone customers and these and environments. visibility enabling SolarWinds will greater to priority. solutions we proud customers' I'm the help of In start of against provided at made to closing,

full while Second, creating our growth and and expand customers. continuing financial strong success value customer commitment deliver top that, our bottom in solutions portfolio to retention, fourth will exercise compelling evolution, and over provide year and outlook. now evidenced focusing of line discipline by investing to turn selectively quarter ARR teams ability value more on continue our growth, I expanded profitability profitability.Â Third, gives The seeking Louis and profitability shareholders. line the it a to and of XXXX our expense to and to confidence me total With relevance our high our subscription to QX. growing deliver our and as We performance for to aim Lewis? on

Lewis Black

here with the am momentum Sudhakar, our half delivered We business SolarWinds financial call. XXXX. of third in and goals I'm Thank first first thrilled continued confident of earnings I the on and to built you, Like you a year. we in my today to the our ability Sudhakar. of in be strong remainder achieve all the quarter

the of have total total X% we prior sustained growth million IT We the ARR $XXX provided see last environment that a challenging, outlook now above year of growth. Â Â I'll third up quarter. the to and high recurring we million, of continue increase with $XXX revenue $XXX to the the to finished a total the be Although to the third ended the compared predictable quarter year-over-year. and spending of of numbers. delivered ARR end We quarter revenue with for X% revenue turn mix continues in million,

of million, year. for was the Maintenance XX% a We maintenance million, our products.Â Our X% representing $XXX XX% customers third growth This maintenance rate recurring revenue reflect revenue. the ARR down prior This X,XXX our $XXX to over customers of renewal was rate observability the this to growth strategy, is subscription from maintenance third as To by an our with and of revenue customers subscription-first was in our base to the XX% those on Digging convert products. continue exclude revenue strong subscription details, continues to converting third subscription-first compared to maintenance our quarter. year. in Due convert we $XX we prior success XX% subscription portion total and decline was was up the subscriptions, subscription year-over-year.Â Â The to quarter, quarter which subscription revenue revenue revenue third our to you, into to customers of the million renewal the basis XX-month as expected remind total trailing end increase now increase the the we of includes rates, a our existing renewal calculations. is SolarWinds ARR, quarter continues over year-over-year. XX% of growth the of $XXX,XXX execution be XX% Our had driven at strategy.

the For million of quarter, down XXXX. license in $XX $XX XX% revenue third third the quarter was million, from

strong a drive focus non-GAAP to continues affect of profitability. to continue subscription-first quarter results, focus and sales our As will operating on our we and performance.Â Â Our another has delivered discipline reminder, license

million EBITDA and high million, quarter adjusted the Third of representing for adjusted of coming was outlook in gave million year-over-year, quarter. margin end above the $XX XX% we XX% an $X growing $XX EBITDA the

Turning balance sheet. to our

leverage September at was approximately to ratio trailing compared net adjusted Our X.Xx the quarter. XX-month at Xx XX end EBITDA our last of

cash in further in and in rate to reduce We September variable from always, $XXX.X the future. we the will interest for environment interest opportunities XX. look As rate flow generated our ended operations X months the million monitor

and our through the million.Â Our before now improved thoughts. investment walk non-GAAP diluted quarter balance earnings final equivalents Our with for $X.XX was range for beat cash was to our cash above and at the fourth of largely quarter to turning and updated our due per will short-term $X.XX. share end were it start guidance guidance $XXX.X which was This will Sudhakar our I discuss to then outlook outlook you profitability.Â I over year. $X.XX,

at million quarter $XXX to range fourth be is approximately X% expect the the revenue the million, For fourth growth we representing of quarter, midpoint. Adjusted to to for in be expected total $XXX the fully per be to the $XX $X.XX are midpoint. $XX XX% representing assuming shares to million per diluted an earnings outstanding. at growth projected share share, Non-GAAP fully estimated diluted million million, to $X.XX XXX EBITDA

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

are of million, year-over-year year, to guidance estimated $XXX midpoint.Â We representing to approximately per which projected be fully to earnings $XXX For midpoint. now XX% million be we expect for $XXX outstanding. million, the is EBITDA adjusted an year, range year-over-year total revenue growth the expected are pleased Non-GAAP $XXX.X to at assuming shares to our diluted the the $X.XX diluted to per million $XXX X% full revenue share, raising the share representing are $X.XX be growth in to and at million raise the

fourth assumes Sudhakar to With return the year a euro I'll $X.XX quarter exchange to full his closing X. dollar call to and guidance EUR of that, Our remarks. rate for

Sudhakar Ramakrishna

pleased delivered QX, you, years a that strategy, third than strong QX the set needs. customers' XXXX and confident on address a I'm high our Thank progress our continue and we Lewis. We we platform critical execute note evolving evidenced and the more X strong I'm to closing performance about which our by quarter, updates and as with financial ago. in our

was out.Â Second, ARR and proves ability this the allowing I our of premise our As our platform while beginning continue This of to base several retention fruit. optimistic I future, to of We always diversified a mature, at in enhancing functionality a relevance. add growing SolarWinds with a our wallet customer a serve large, increase lower continues look our and strong the R&D to and bear reasons.Â First, growth believe share to we to the growing building broad it solutions, customer array to marginal platform, is remain cost. for us

sales on strong the our the committed our Fourth, to cloud and cost-effective inside needs.Â We to like customer-relevant our recent Third, and customer and reach Day spanning strong believe partners heritage our from evolving in partner of teams, portfolio sources increases events go-to-market with fantastic great continue our managed broaden trends emerging are SolarWinds community ability more providers broader ecosystem and service grow efforts. distributors, deliver understanding Tack base, a this derisk customer customer for way. development partner a These service our success X solutions efforts resellers, and October and providers.

we importantly, in environments, to the and remaining their proud the our Finally, most of of our I'm our reduce questions. for of help to I reduce teams shareholders lives their for steadfast enriching are to to SolarWinds. and your partners, positioned best believe the purpose and customers increase address now I customers. happy productivity are costs.Â Again, visibility, commitment thank complexity of and customers Lewis continued hybrid employees, want improve I their

Operator

the from comes question of first Baird. Your Instructions] line Oliver Rob [Operator with

Robert Oliver

maybe also now, And you're with area database activity had one their around products Louis kind where impressive, of in most pull very curious, cloud in observability, to areas, then and well. Sudhakar, product but these call from know seeing observability early still some if ton hybrid and most across follow-up progress as areas, October made out signs it increased you all I hearing at of seeing what you a of opportunity your product be different of to the right around particularly the different new your be attend the traction there's we partners activity and from enhancements. when they're whether I have or or I'd for of look any pipeline? earlier the a the rollout it's where the had and quick your functionality, with you're cloud guys

Sudhakar Ramakrishna

for customer we the could be assets Sounds a And that from journey with to customer who that good, in the and is committed and the start or be And with have that it. your them cloud able to a be thank on on-premises solutions to fully Rob. a taken is evolve in cloud. the to support. able help might you again some ongoing the their intersect platform approach customer integrated SolarWinds

So flexibility. it of us we all architected about doesn't really solutions. have our to in them terms how It's matter providing

our do your it the of a particular customer. one functionality, That's you're see continuing number and our And suggest use as point not able they consolidate how a context bridge we it. increase looking pull, speak. to customers. broader are ARR with I do be should where instead at I $XXX,XXX-plus tools. vendor to they're address to only so but about a the the cloud would reason Now to looking customers hybrid Today, tools get of seeing visibility, divide, why And solutions, on-premises most in we at also looking at of the

we customer, and it quickly. And able on really the with platform intersect but have, flexibility very are address so the depends we that to very,

Robert Oliver

an helpful. your And bit over in a very thoughts, of little to Louis, That's from kind of obviously, that Okay. SolarWinds, a a seat a for then, wanted open-ended just quarter, just now profitable. from now you been you. financial you've highly your sense powerful But question of at model I get

in of over changes observations a a investors guide we when you what when line to here, your not look when the goals quarter, seat. at some your You're in to growth But certainly could the some from of of you've priorities 'XX. here I positive pick some asking seen think what you hear up? -- perhaps being often top on is model and now seat lot or

Lewis Black

you question. the for Thank Sure. Okay.

great a value to business had for. to needs. is the saw to market develop, would an strategy.Â Â It reason market customer incredible customer thing the base continue and deliver attractive And an grow company, had I company I that and joined that first the the the that So and the align

of all I've kind of business beliefs very the So company, done the that model, in is into powerful. into company.Â In coming the I've the model validated I further assumptions terms these coming is business of all had the

I going of think where is the strategy needs aligned and is the to market the both the customer. clearly

as sustaining. So I long-term and it see

expanding are continue to long base a still to customers, lot early a the is I'm the of and installed it the sustained We to delivered, ahead. of the continued capabilities value the and days But future have opportunity we leveraging transformation A value that thesis broadening terms go. then be long-term a the platform, way developing to play. in excited journey, very will of and about deliver of and

Sudhakar Ramakrishna

Rob, mentioned he Louis continue. will background, addition significant were able growth before. in profitable than operational but journey investments in our on this, significant will efficiently capabilities also and do to Han allow hone us brings to the table. targeted financial to specific and of expertise to And we more That

As you just and recurring. is know, reported our X% we business of growth ARR XX% now

foundation solid gives continue that are a prudent super the So to how think to journey, about our we us also about but very future.

Operator

Markets. from Your Matt line RBC next question comes Hedberg Capital the of with

Matthew Hedberg

Congrats your I It's the kind this was to curious the good And results feel what beats certainly you see said it year. than point better tick but the demand of year I environment? a rate earlier really finer here could know saw put on growth stable, the stable. of sort are I'm larger you just to continues we this getting are results. to up momentum. guess, on the doctor, relative and the

that if could of So just kind understand you you're trends us the help demand seeing. curious of some

Sudhakar Ramakrishna

Matt. Definitely,

of and demand an as large execution thanks regards diversified ongoing customer ongoing is that both base, very the we simply the their as segment. from all, support a as reduce their simplify fair pleased have A and that. been a have or progress it and our very our productivity.Â So also for comes definitely But say, by your again increase growth lot lot market of we from I our I or well their should you delivered, support with solutions, comes of results environment, and them customers and SolarWinds. their, validation geo of share abilities. strategy First expansion broader consolidate of well. getting of new installed as our to as ability we indication our With with know, am we to cost, demand base more of platforms,

demand huge macro future of and -- prudent reporting, we uncertainty, terms I given in the say like we down that about seen itself, I've variations up would continue trends the and be In been quarters consistently or haven't to demand. the in years. as And

Matthew Hedberg

stable. follow-up I'm in then little were guess question. October. Lewis to And it. prospects one of bit be And I embedded know guess just to like I just more about of budget flush of But you bit a maybe of I curious think Got they're on the your for last building continuing a how again. don't assume a about I'm the guidance? approach XQ like role forecast. a philosophy. sort curious the sort do guidance trends your to sort out a little on the of I how in And

Lewis Black

So One a is the is how play into number that. performing business factors today. of

that believe sure deliver, determine with guide and be we forward in an what to of forecast then able performing, is can make deliver.Â So to out we and of external to is. are the approach can what and are state, playing tempered been to be it's seeing And that the a we I apply Secondly that historically. what terms that We we what what market. information level going applied that of the we believe market course, as make or consistent market try to as see what has will, will business appropriate fairly prudence to And confidence have sure that the other we able with is we're in seeing can apply we of we that much the are the how things validate. what from well. and see get combination we a companies sources

we has of I a has it a my great And the been been the that goal able to has is and guidance company will that continue had think that. that record our solid given And know approach. expectation I being deliver historically.

Operator

from Stanley. comes Singh Morgan line question the Sanjit of with next Your

Sanjit Singh

solid the results. QX On

and Lewis, a addition Officer. the Revenue new Officer, Chief onboarding you on role, Lewis Chief also to In the Financial as brought new on congrats,

particular So, I insight magnitude us expect sense a capabilities what to was force. wondering if give going of to Obviously, then change you on should this coming the be some going the of executive going if XXXX, you of into board. could priorities And we just give up year? in is that his and sales we're on But to coming the into next QX. us objectives

Sudhakar Ramakrishna

Sanjit. again, in. joined hear you has Thank to right Andrew and Good our jumped company you. has from

In be inside suggest in laid major of our of expand terms of the, very strategic market cloud robust build. Â At opinion, of and providers that system the to has opportunities emulate. partners, lot everyone with sense of service integrator Andrew that experience integrators, a with market rest you system sales working foundations shifts we is ecosystem it significant in working the scalable and global tried most to our is continue. in I'll that there be go-to-market, in time, motion And with areas, not that the something go-to-market partner one will the we my comes global I our can foundations the would that the a out, models the with in the will any have That same that those saw space. reach. remind

expense-to-bookings But always that resources financial we'll with and we will ensure we and very as skills current careful beyond be go-to-market into into hoping I'm our those. and what XXXX ratios is are vast bring go-to-market and Andrew his deploy So get goals. extend models consistent our with that how expecting our

Sanjit Singh

was That Understood. clear. very

AI of a a relates had As as the I on follow-up, Gen going forward. AI it strategy and to question sort Gen pricing

sort of X-parter. it's so And a

service script in you about enterprise your So, management. mentioned

Gen management, enterprise to sort AI management offering?Â And in service of models definitely anticipate debate pricing mature sort are customers broadly, How take Winds Solar on you layer relative about consumption-based more push observability mature. type more models.Â Should you consumptive more of what utility in the thinking gets standard service more within your over more are pricing? that gets to As within seeing uplift and Service of a Now, more versus those seat-based on models time? capabilities then start those There's sorry, we as

Sudhakar Ramakrishna

to enterprise our consumption-based things and models, but are I regards part buy our premium value consumptive or continue script, service there. management is you should the monetization model noted uplift. not And see the modeled in my point AI have books, automated we time. at and have With Sanjit, of AI should that contemplate, they in ASP pricing idea we something automatic it, to we like cetera, things run that and this that, that models Gen as of et more we Gen compelling especially capabilities, package. an get customers of extended the And are there as

uplift, for progressing towards is early indicators but enterprise be us the of AI management that something not product it's GenAI where how capability we we a that service significant are a will as Gen of way there's delivery premium lot on So approach enhancements we a there, charge will referring is much for the to the take.Â And package, as which is and, course, GenAI. leaning to we'll value keep ASP the monetize to more and customers,

Operator

next Bora with Your of line Pinjalim JPMorgan. comes from the question

Pinjalim Bora

you. It seems Sudhakar, happening that adoption sequentially. into that the customers pillars? in Maybe that. question premium a just It XXX,XXX driver? Is product into like across seems SKUs? just about bump more Maybe of X main Is for said one or the kind up talk that nice consolidation. like the double-click the Is skewing drivers. there you also

Sudhakar Ramakrishna

Absolutely.

ongoing subscription. highlight I conversion driver first to is the The would

our as there's noted transition to transition transition. business model that maintenance to converted value subscription is As with as an as it subscription, our model remember, discuss not we I opportunity have the value a base have always is the simply a you customer. And much

many in customers' tools. conversations, we those So consolidate of

piece aspect second So us That of are it.Â Â The visibility enabling third gaps that we through but what a of unified a spans share That's larger that, win which more especially an increasingly a is is early fact requirements, we into customer hybrid mentioned, that's go essence, means to trend, factor. upstream have the deals. the as contributing is contributing enterprise cloud that's the the partners, definitely and of some selectively getting also solution observability we one the is definitely is And larger in closes trend. that upstream and you a that GSI wallet. on-premises

Operator

line question Securities. comes Miller Jump of the next Truist with Your from

William Miller Jump

on solid theme on has to will of my of I up double-click echo congrats actually wanted some call. on times the come consolidation execution. the a also couple the I that

a on just customers reaching is could coming this color your between then Just and kind cycles? it to any motion at cycle wondering there is driving consolidation? out if one? your team little sales that you these versus really proactively deals. difference Is give more And renewal you a where maybe traditional of sales Are

Sudhakar Ramakrishna

the instigator Definitely, cycle a But we to cycle, renewal in is a broader touch. of are restricted and only for it conversation. is the renewal spirit continuous not an

strong As a we evolution motion touch we have go-to-market more last continuous X had been over of to historically, transactional motion. our part years, that discussing of motion evolve very the transactional while a as we done what is have

about the ongoing success We with have well. is spoke customer out that incredibly pulse effect touch figuring an doing community And understanding, customers, needs. team strong in I as their regularly checks,

and push there So both a a is here. pull

William Miller Jump

year, ongoing at any drivers in I you're know you if if for talk the 'XX, catalyst key for for you maybe the thinking next curious see about Louis, particular, guiding could high in given of transition. model transformation, level about not just but the acceleration interested then And a you're

Lewis Black

earlier, we building said model long-term that are into. a I it's As

we'll the Solar growth to a profitability. continuing customer platform. expense grow priority we'll continue And opportunities while the standpoint, on subscription We'll exercise So Winds around success, to and invest selectively from continuing focus potential to extend ARR, discipline.

these to give although next So QX call on that the going And year. guidance year. all next we will we focusing give we're going are be areas not into during guidance, will for the

a As about proxy to implied think next should year. growth think the you you for is which about XXXX, thinking how for look kind exit QX you modeling good should baseline and of be I rate,

Operator

Your of next Patrick with the line Scotiabank. comes from question Colville

Patrick Edwin Colville

margin from received thinking EBITDA But margin. balancing ask you we versus record our to market of EBITDA launch, to the product in given questions be how pleasure real in Solar a investments and the which highlighted. see. XQ, go-to-market investors I the development want hit one a margin is opportunity to Winds quite is guess Winds It's kind story. impressive was very of part I of undoubtedly about the frequently about high, Solar In

do to that kind that, profitability about a So of you I go-forward balance qualitatively mind just and talking how investment kind on between think guess, of you basis? of

Lewis Black

that, I'll take Sure. Sudhakar.

a have a and to strategy will balance and profitability, do we clearly, and to we growth So policy continue that.

to drive opportunities will to for us. always coming profitability. looking we're clear we're see factor and growth to on But investments a more focused that where Profitability making. highly be continue return important So on we continues we're we also do there's that consider the an back to

the as balance to continue going as more the growth simplify are efficient. we So well and our business investments to streamline and opportunity to make

Patrick Edwin Colville

SaaS. to ton I provide in quantitative sense kind And you'd of is adoption? ask progressing are of then Winds to us Winds the XQ? that of to Understood. order metrics SaaS want be Solar Solar to guess in simplify of adoption makes there as I of us to willing a terms How to in nenclature. any And understand terms Okay. changes, mean, about that I allow name think the product I of

Sudhakar Ramakrishna

do or touch consumption. into it X cloud, October be helping Luis on-premises customers out well. and as actively and announcements, we a those observability as SaaS are on have to our elaborate. not solutions, consumed we are both primary we bridge they The lots them of have our There side looked SaaS is, continuum. where at as self-hosted break other noted might the and to Patrick, types on We I'll reason on it, of want

say becomes their expectation So of to What to be the continued is difficult is where plan I continue a to qualitatively out. split are it progress can kind they strong those evolve of will my And in in how progression that the journey it. dimension. we customers function make that that and

Operator

session. will question-and-answer now Sudhakar the our And closing comments. And that turn conclude for to over conference I does back

Sudhakar Ramakrishna

questions. Thank attendance and you today appreciate again, and I the everyone's

keep you progress. posted will our We on

Operator

that and and you now your Thank you does conference conclude today's Ladies disconnect. call. gentlemen, may for participation,

SolarWinds (SWI) 31 Oct 242024 Q3 Earnings call transcript