SolarWinds posts higher 1Q net income, revenue

AUSTIN, Texas (AP) -- SolarWinds said Tuesday that its first-quarter net income jumped 34 percent, aided by growth in the software company's license and maintenance revenue.

Even so, its second-quarter earnings and revenue outlook fell short of Wall Street expectations.

Management acknowledged that SolarWinds' core products failed to generate the level of new license sales that the company anticipated. The company also did not deliver the level of new license sales and revenue growth it expected for the quarter, CEO Kevin Thompson added.

Investors reacted by sending shares of the company down nearly 8 percent in after-market trading.

SolarWinds reported net income of $23 million, or 30 cents per share, for the three months ended March 31. That compares with net income of $17.1 million, or 23 cents per share, in the same period last year.

Excluding the impact of stock-based pay expenses and other special items, the SolarWinds' earnings amounted to 41 cents per share.

On that basis, the company exceeded analysts' consensus forecast, which called for earnings of 37 cents per share, according to FactSet.

Revenue rose to $72.9 million, an increase of 22 percent from $59.7 million a year earlier, but below the $75.6 million analysts had expected.

SolarWinds said its license revenue rose 12 percent to $30.7 million, while maintenance revenue grew 31 percent to $42.2 million.

Looking ahead to the second quarter, the company expects to post an adjusted profit of 37 cents to 38 cents per share on $77.8 million to $78.8 million in revenue. Analysts expect a profit of 39 cents per share on $80.6 million in revenue.

For the full year, SolarWinds anticipates adjusted profit will range from $1.59 or $1.65 per share on $326.5 million to $334 million in revenue. Analysts expect a profit of $1.62 per share on $336.1 million in revenue.

SolarWinds shares ended regular trading down 60 cents at $50.85. The stock tumbled $3.65, or 7.2 percent, to $47.20 in extended trading.