SolarWinds: A Great Business Model, And Tremendous Upside
Benjamin Sinclair • 22 Comments
Benjamin Sinclair • 22 Comments
Oct. 21, 2015, 12:49 PM
Oct. 21, 2015, 9:46 AM
- Thoma Bravo and Silver Lake are buying SolarWinds (NYSE:SWI) for $4.5B, or $60.10/share, in cash. The price represents a 20% premium to Tuesday's close, and a 43% premium to where the systems/app management software firm traded before Reuters first reported of sale talks on Oct. 9.
- The deal, the latest in a string of P-E purchases of enterprise tech companies, is expected to close in Q1 2016. SolarWinds is halted.
- Update (10:01AM ET): SolarWinds has come off its halt. Shares are up 15.8% to $58.14.
Oct. 9, 2015, 11:43 AM
- Less than two hours after Reuters reported the company is in talks with P-E firms about potentially selling itself, SolarWinds (SWI +6.5%) announces it "has commenced a review of its strategic alternatives," including a possible sale or other business combination. JPMorgan and law firm DLA Piper have been hired to help out.
- Shares have pared the initial gains seen following Reuters' report, but remain sharply higher.
- Update (12:02PM ET): SolarWinds is now up 12.7%.
Oct. 9, 2015, 10:29 AM
- Reuters reports SolarWinds (SWI) is talking with several P-E firms about potentially selling itself.
- The systems/app management software vendor's shares have spiked higher. They're still more than $7 below a 52-week high of $53.44.
- A slew of enterprise tech firms have been acquired by P-E over the last two years. Examples include Riverbed, Tibco, and Informatica.
Jul. 17, 2015, 12:44 PM
Jul. 17, 2015, 9:22 AM
Jul. 16, 2015, 5:41 PM
Jul. 16, 2015, 4:56 PM
- In addition to missing Q2 revenue estimates (while beating on EPS), SolarWinds (NYSE:SWI) is guiding for Q3 revenue of $130M-$134M (+15%-19% Y/Y, below a $136.1M consensus) and 2015 revenue of $502M-$512M (+17%-19% Y/Y, below a $519.7M consensus).
- EPS guidance is better: $0.49-$0.53 for Q3 (consensus is at $0.52) and $2.00-$2.08 for 2015 (consensus is at $2.00). Forex is expected to have an $18M-$19M impact on 2015 revenue.
- Weighing on Q2 sales: License revenue rose only 3% Y/Y to $38.6M. Maintenance revenue (driven by older license deals) rose 17% to $67.6M; subscription revenue (cloud software-related) rose 122% to $12.9M.
- Shares have fallen to $42.00 AH.
- Q2 results, PR
Apr. 28, 2015, 6:49 PM
- With forex taking a toll, SolarWinds (NYSE:SWI) expects Q2 revenue of $120.6M-$123.8M (+19%-22% Y/Y) and EPS of $0.45-$0.47, mostly below a consensus of $124.3M and $0.47. Full-year guidance is a little better: Revenue of $512M-$527M (+19%-23% Y/Y) and EPS of $1.92-$2.04 vs. a consensus of $521.3M and $2.00.
- The systems management software vendor also announces it's buying Papertrail, a provider of cloud-data log data management software tools, for $41M in cash. Papertrail's products are used by IT pros and developers to monitor/troubleshoot websites and cloud apps; machine data/IT operational intelligence analytics leader Splunk is a rival.
- SolarWinds already offers log management tools for on-premise software installations. The Papertrail deal follows SolarWinds' 2014 acquisition of website monitoring software firm Pingdom.
- License revenue rose 17% Y/Y in Q1 to $42.4M, and maintenance/subscription revenue 25% to $74.4M. Total revenue growth was 22% in actual dollars, and 27% in constant currency.
- Shares are unchanged in AH trading for now.
- Q1 results, PR
Mar. 4, 2015, 3:01 PM
- Today's notable tech gainers include Chinese online classifieds leader 58.com (WUBA +5.9%), CDN owner Limelight (LLNW +6.5%), account-protection software provider CyberArk (CYBR +3.2%), flash storage array vendor Violin Memory (VMEM +3.8%), online video ad platform Tremor Video (TRMR +4%), and Chinese mobile game publisher Sky-mobi (MOBI +11.9%).
- Notable decliners include cloud HR/financials software leader Workday (WDAY -5.8%), systems management software vendor SolarWinds (SWI -3.8%), chip packaging IP firm Tessera (TSRA -4.3%), security hardware/software provider KEYW Holding (KEYW -3.7%), and Chinese online real estate play E-House (EJ -4%). The Nasdaq is down 0.2%.
- Sky-mobi has flown higher since Rosenblatt Securities pounded the table for the company last week. Workday has fallen sharply since last week's FQ4 revenue beat. E-House has gradually declined this week since 58.com announced the purchase of Chinese real estate site Anjuke.
- Previously covered: Neustar, AeroVironment, Alibaba, SanDisk, Autohome/Bitauto, ReneSola, Trina, Ambarella/GoPro, Bazaarvoice, Veeva
Jan. 16, 2015, 9:46 AM
- FBR's Daniel Ives has upgraded SolarWinds (SWI +2.5%) ahead of its Jan. 29 Q4 report, and hiked his target by $12 to $60 (29x 2015E EPS).
- Ives cites "improving execution, a broader product suite, strong secular tailwinds (e.g., public/ private cloud build, SaaS adoption), and incrementally positive customer feedback over the past couple of months that we believe will translate into improved deal flow over the next 12 to 18 months."
- He reports positive checks for SolarWinds' core network/systems management software offerings, with growing interest and deal activity related to newer products. The Pingdom acquisition, rising international sales, and "a focus on key markets" (inc. SMBs, hosting firms, SaaS, Web sites, and Web application management) are seen as growth drivers, and 2015 op. margin guidance of 40%-41% is viewed as conservative.
- Shares are up 16% since SolarWinds posted a Q3 beat on Oct. 28.
Oct. 29, 2014, 12:45 PM
Jul. 24, 2014, 5:59 PM
- SolarWinds (NYSE:SWI) expects Q3 revenue of $109M-$111.5M and EPS of $0.42-$0.44, mostly above a consensus of $107.2M and $0.42.
- Full-year guidance is for revenue of $420.5M-$426.5M and EPS of $1.68-$1.72, above a consensus of $416.6M and $1.65.
- Q2 license revenue +21% Y/Y to $37.6M. Maintenance revenue (driven by past licenses) +28% to $58M. Subscription revenue rose over 6x to $5.8M.
- Q2 results, PR
Apr. 29, 2014, 5:13 PM
- CRAY still expects 2014 revenue of $600M, of which only $75M will be in Q2 (below a $95.9M consensus). Full-year gross margin is still expected to be in the mid-30s. Shares -2.1% AH. (Q1 results, PR)
- Dolby (DLB) expects FQ3 revenue of $205M-$215M and EPS of $0.38-$0.43 vs. a consensus of $216.9M and $0.32. FY14 (ends in September) guidance is for revenue of $930M-$950M, above a $921.8M consensus. Shares +1.3% AH. (FQ2 results, PR)
- SolarWinds (SWI) expects Q2 revenue of $96.5M-$98.5M and EPS of $0.35-$0.37, below a consensus of $98.8M and $0.38. Full-year guidance is better: revenue of $409M-$421M and EPS of $1.60-$1.70 vs. a consensus of $415.6M and $1.61. Shares roughly unchanged for now. (Q1 results, PR)
Mar. 6, 2014, 2:49 PM
- Jefferies' Aaron Schwartz has upped his SolarWinds (SWI +2.7%) PT to $57 from $51, and calls the company's EPS/free cash flow upside "underappreciated" at a valuation of 16x FCF.
- Schwartz foresees the systems management software firm delivering 20% Y/Y license growth in "a baseline scenario," and thinks sales hiring, cross-selling, and higher transaction volumes could yield upside.
- SolarWinds has moved higher since posting a Q4 beat (featured 20% license growth) and solid guidance a month ago. Earnings disappointments led shares to underperform in 2013, after entering the year carrying steep multiples.
Feb. 5, 2014, 4:56 PM
- TriQuint (TQNT) expects Q1 revenue of $170M-$180M and EPS of -$0.11 to $0.13, below a consensus of $223.6M and $0.04. The company blames an inventory correction by a large mobile customer (almost certainly Apple). The company says it still thinks full-year EPS will meet or beat a $0.49 consensus. Shares -1.1% AH. (Q4 results, PR)
- iRobot (IRBT) expects Q1 revenue of $110M-$113M and EPS of $0.13-$0.17, below a consensus of $121.2M and $0.28. Full-year guidance is for revenue of $560M-$570M and EPS of $1-$1.15 vs. a consensus of $555.3M and $1.14. Shares -6.3% AH. (Q4 results, PR)
- SolarWinds (SWI) expects Q1 revenue of $92M-$94M and EPS of $0.34-$0.36 vs. a consensus of $91.8M and $0.35. Full-year guidance is for revenue of $408M-$420M and EPS of $1.55-$1.65, mostly above a consensus of $404.6M and $1.55. Shares +2.1% AH. (Q4 results, PR)
SolarWinds Inc designs, develops, markets, sells and supports enterprise-class IT infrastructure management software to IT professionals. Its product offerings range from individual software tools to more comprehensive software products.
Industry: Application Software
Country: United States
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