The 10-second takeaway
For the quarter ended March 31 (Q1), SolarWinds missed estimates on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly. Non-GAAP earnings per share expanded significantly. GAAP earnings per share expanded significantly.
Gross margins dropped, operating margins increased, net margins expanded.
SolarWinds booked revenue of $72.9 million. The 12 analysts polled by S&P Capital IQ anticipated sales of $75.7 million on the same basis. GAAP reported sales were 22% higher than the prior-year quarter's $59.7 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.41. The 14 earnings estimates compiled by S&P Capital IQ forecast $0.37 per share. Non-GAAP EPS of $0.41 for Q1 were 37% higher than the prior-year quarter's $0.30 per share. GAAP EPS of $0.30 for Q1 were 30% higher than the prior-year quarter's $0.23 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 92.3%, 50 basis points worse than the prior-year quarter. Operating margin was 40.2%, 50 basis points better than the prior-year quarter. Net margin was 31.5%, 280 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $78.3 million. On the bottom line, the average EPS estimate is $0.38.
Next year's average estimate for revenue is $330.8 million. The average EPS estimate is $1.63.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 130 members out of 161 rating the stock outperform, and 31 members rating it underperform. Among 37 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 30 give SolarWinds a green thumbs-up, and seven give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on SolarWinds is outperform, with an average price target of $60.29.
Software and computerized services are being consumed in radically different ways, on new and increasingly mobile devices. Many old leaders will be left behind. Whether or not SolarWinds makes the coming cut, you should check out the company that Motley Fool analysts expect to lead the pack in "The Next Trillion-dollar Revolution." Click here for instant access to this free report.
- Add SolarWinds to My Watchlist.
Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.