SolarWinds Reports $796.9 Million Revenue and $111.9 Million Net Income for Fiscal Year 2024

SolarWinds Corporation reported a total revenue of $796.9 million for the fiscal year ended December 31, 2024, marking a 5% increase from $758.7 million in the previous year. The growth was primarily driven by a significant rise in subscription revenue, which increased by 30% to $304.5 million, compared to $234.2 million in 2023. This shift reflects the company's ongoing transition to a subscription-first model, with subscription revenue now constituting 38.2% of total revenue, up from 30.9% the previous year. However, maintenance revenue saw a decline of 4.6%, totaling $440.6 million, attributed to customers transitioning to subscription products.

In terms of profitability, SolarWinds achieved a net income of $111.9 million, a notable recovery from a net loss of $9.1 million in 2023. This turnaround was supported by a decrease in total operating expenses, which fell to $505.2 million from $521.4 million, largely due to reduced sales and marketing costs. The company also reported a gross profit of $713.6 million, resulting in a gross margin of 89.5%, slightly improved from 88.5% in the prior year.

Operationally, SolarWinds expanded its customer base, ending the year with 1,148 customers generating over $100,000 in Total Annual Recurring Revenue (ARR), up from 979 in 2023. The company reported a total of over 300,000 customers worldwide, reflecting its broad market reach. The firm continues to focus on enhancing its product offerings, particularly in observability and IT management, as it aims to capture a larger share of the growing market.

Looking ahead, SolarWinds is navigating a pending merger with Starlight Parent, LLC, an affiliate of Turn/River Capital, which is expected to close in 2025. The merger agreement stipulates that shareholders will receive $18.50 per share in cash. The company anticipates that this transaction will allow it to focus on long-term growth strategies without the pressures of public market fluctuations. However, the ongoing geopolitical tensions and macroeconomic conditions, including inflation and rising interest rates, may pose challenges to its operational performance and market conditions.

In summary, SolarWinds has demonstrated a solid financial performance in 2024, with significant growth in subscription revenue and a return to profitability, while also preparing for a strategic merger that could reshape its future operations.