SolarWinds (SWI) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached $200 million, up 6% year-over-year, exceeding guidance, with 94% recurring revenue and strong subscription-first momentum.

• Adjusted EBITDA grew 13% year-over-year to $96 million, with a 48% margin, and net income was $12.6 million, reversing a prior-year loss.

• Subscription ARR rose 36% year-over-year to $289.5 million; total ARR increased 8% to $724.1 million, with 1,100 customers over $100K ARR.

• Recognized for IT management excellence, expanded observability and AI-driven features, and continued product innovation.

• Maintained a diversified customer base and low concentration, supporting retention and growth.

Financial highlights

• Q3 2024 total revenue: $200 million, up from $189.6 million in Q3 2023, with 94% recurring revenue.

• Adjusted EBITDA: $96 million, up from $85.1 million in Q3 2023, with a 48% margin.

• Subscription revenue grew 30% year-over-year to $76 million; subscription ARR rose 36% to $289 million.

• Net income for Q3 2024 was $12.6 million, compared to a net loss of $3.2 million in Q3 2023.

• Unlevered free cash flow for the nine months ended September 30, 2024 was $174.2 million.

Outlook and guidance

• Q4 2024 revenue expected between $201–$204 million (2% growth at midpoint); adjusted EBITDA $95–$98 million (11% growth at midpoint); non-GAAP EPS $0.27–$0.28.

• Full-year 2024 revenue guidance raised to $788–$791 million (4% growth at midpoint); adjusted EBITDA $376–$379 million (15% growth at midpoint); non-GAAP EPS $1.08–$1.09.

• Strategic focus on accelerating subscription adoption and achieving $1B ARR with mid-40s adjusted EBITDA margins.