SolarWinds Q2 2013 Revenue Miss: N-able Parent Stock Falls 20%
SolarWinds (SWI), which acquired N-able Technologies in May, announced weaker than expected Q2 2013 financial results today. SolarWinds’ stock fell roughly 22 percent in after hours trading. CEO Kevin Thompson conceded a shortfall in license software sales, but said there are growth opportunities ahead — especially in the MSP tools business (N-able‘s core focus). Here’s the recap.
UPDATE, 11:33pm ET, July 25, 2013: SolarWinds says the N-able business is performing even better than expected, and the company is raising 2H 2013 revenue expectations for N-able.
For its Q2 2013, SolarWinds said:
- Revenue was $77.5 million, up 21% vs Q2 2012. For most companies that would be impressive. But analysts were expecting revenues of $78.9 million, according to Reuters.
- Net income was $22.8 million, up from $19.4 million in Q2 2012.
- Thompson conceded that “license sales results did not meet our expectations.”
Despite the shortfall in license sales, Thompson said SolarWinds “delivered solid year-over-year total revenue growth of 21% and non-GAAP operating margins and non-GAAP EPS well ahead of our outlook.”
Looking ahead, Thompson vowed that the company has “a large and growing market opportunity across our network management, systems management, and MSP tools businesses that remains largely untapped.”
Still, today’s earnings shook investors. According to the Associated Press, SolarWinds for the full year forecast adjusted earnings per share from $1.51 to $1.54, on revenue between $322.7 million and $327.7 million. That also fell short of Wall Street’s projections, which call for adjusted earnings of $1.56 per share on $337.3 million in revenue, AP said.
