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  • SolarWinds Inc (SWI) Generates 61% Recurring Revenue With Growing Customer Retention Rates And New Subscription Model

    SolarWinds Inc (NYSE:SWI) hit a record level of recurring revenue in Q3, and what is driving the high growth is an increase in customer retention rates, a unique pricing model and a new subscription revenue stream from the company's acquisition of N-able, says Kevin Thompson, President and CEO of SolarWinds Inc.

    "We've seen a couple of things over the last 24 months that are really driving that very high growth in recurring revenues. First, we've always had very high customer retention rate, so once you're a customer of ours, you generally stay a customer for very long time, and you continue to pay us maintenance revenue every year because we deliver a lot of value to you for that maintenance revenue. In general, we're going to release two new versions of our products every 12 months, and your maintenance contract is for 12 months, so unlike a lot of companies that have a new release every two or three years, we're going to put new technology in your hands a couple of times every 12 months while you're under maintenance with us," Thompson said.


    Thompson also points to the company's unique pricing and packaging model, which is focused on the long-term value of a customer, as another area that is driving the growth in recurring revenue. Additionally, with SWI's acquisition of N-able, they are also seeing revenues from a monthly subscription service.

    "We acquired a company called N-able back about five months ago now, and they sell a set of technologies through MSP channel to a bunch of very small businesses around the world that have anywhere between 15 employees and maybe a couple hundred employees, and they sell all in a subscription model. So that technology is delivered in a fast way from the cloud. Some of that technology is deployed on premise, but it's all sold in a monthly subscription, so when you combine increasing customer retention rate with the subscription revenue model we added to the business, we now have 61% of our total revenue, which is recurring, which is really unusual for a license model-based software company," Thompson said.

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    Tags: SWI, Software
    Nov 15 3:59 PM | Link | Comment!
  • Hasbro, Inc. (HAS) Faces Impact From New Xbox And Playstation Consoles As Toys And Games Take A Cyclical Dip

    Hasbro, Inc. (NASDAQ:HAS), along with other major toy companies in the sector, will see an impact from the release of new Xbox and Playstation consoles while already battling with the tablet and smartphone market, as the toy retail space faces a weak season ahead, says Gerrick Johnson, Analyst at BMO Capital Markets Corp.

    "More than video games, tablets and smartphones and their apps have had an impact on this market. We are living in the era of free apps, so the consumption of that product for a child is pretty inexpensive," Johnson said. "We also expect to see some impact when the new Xbox and Playstation consoles come out late next month. If you ask an 8-year-old boy if he would rather play a physical game or the new video game, he's likely going to pick the video game."


    With few hot trends and no must-have toy coming from the major toy companies, Johnson is not recommending any stock in the sector, and has a "sell" on Hasbro specifically, because he believes it is overvalued. In order for toy retail to recover, Johnson is looking for an improvement in the economy as well as better products on the line.

    "It's all cyclical. So what needs to change is, one, the economy needs to do better so people feel more confident about spending a little bit more when they go to a retailer or a shop for the holiday season. Two, you need to see better products out there to attract the attention of the consumer, so more innovative products. There are some innovative things, but they come from the private companies, the smaller companies," Johnson said. "Most of my stocks are neutral. I have a 'sell' on Hasbro because I believe they are overvalued…overall, the space just frankly isn't that appealing right now."

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    Tags: HAS, Toys, Games
    Nov 15 9:08 AM | Link | Comment!
  • Hasbro, Inc. (HAS) To Benefit From Merchandising Relationship With Disney (DIS) Ahead Of Major 2014, 2015 Movie Releases

    Hasbro, Inc. (NASDAQ:HAS) is in front of a significant pipeline of movie content for 2014 and 2015, and with its strategic merchandising relationship with The Walt Disney Company (NYSE:DIS) is expected to benefit considerably from the release of Marvel movies as well as the highly anticipated Star Wars, says Stephanie S. Wissink, Principal, Senior Research Analyst and Co-Director at Piper Jaffray & Co.

    "We actually tend to bias toward the Hasbro model, which is start with the brand, invest in the brand and allow toys to just be one component of how that brand is actually consumed," Wissink said. "We are in front of a very significant pipeline of movie content that they have the master licenses for in 2014, and one of those key properties is Transformer, which is actually a Hasbro-owned brand…They also have the license for Marvel, which would includes Spiderman, The Avengers, Captain America, and a new property called Guardians of the Galaxy also coming next year."


    Wissink is also looking forward to the monumental Star Wars release, in which Hasbro should benefit due to their strategic relationship with Disney, a company that has been highly successful at turning entertainment properties into global brands.

    "The godfather of them all is 'Star Wars,' which in the entertainment business right now is the most anticipated movie in 2015…This is actually being projected to potentially be the largest-grossing movie in history, so it's massive," Wissink said. "It will be a global release, and Disney also bought Lucas this year, and if I know Disney well enough and working with our media team, Disney doesn't just monetize movies when they are in theater. Disney turns entertainment properties into global, in some cases lifestyle, brands…it's going to be a several hundred million dollar event."

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    Nov 15 8:51 AM | Link | Comment!
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