SolarWinds growth slumped for the first time ever since they went public. The Q1 2013 result shows revenue of $72.93 M that is lower than the previous quarter. SolarWinds had always grown Q-O-Q. But this quarter they had a drop of 1% Q-O-Q.
The growth is mainly from the smaller end products like Log & Event Management product, Web Help Desk and Serv -U Managed File Transfer. The main products of SolarWinds sales have gone down in this quarter compared to last year same period.
The smaller end products need more sales people and that has become a limitation in the growth, as they are good at selling higher value products.
Yesterday Zacks Investments Research downgraded SolarWinds rank to #5 (Strong Sell) from rank #3 (Buy).
This year is going to be a challenging year for companies that are doing business on IT Enterprise Management especially on Network Performance domain and System Management domain.
Saravanan
They have grown Y-O-Y by 22%. Their Q1 2013 was greatly affected by the drop in their bigger deals. The revenue per customer has gone down in Q1 compared to the previous quarters. Below is the statement made by Kevin CEO of SolarWinds.
a decline in the number of transactions that we closed in the size range of $20,000 to $75,000.
The growth is mainly from the smaller end products like Log & Event Management product, Web Help Desk and Serv -U Managed File Transfer. The main products of SolarWinds sales have gone down in this quarter compared to last year same period.
The smaller end products need more sales people and that has become a limitation in the growth, as they are good at selling higher value products.
a reduction in the number of core products per invoice of approximately 8% as compared to the first quarter 2012In the recent past they have acquired N-Able for $120 M that will bring around $10 M revenue this year. This also affected their stock, as there is a big drop in the cash balance. From mid May onwards the stock value started dropping. It has dropped by 30% in the last Three months.
Yesterday Zacks Investments Research downgraded SolarWinds rank to #5 (Strong Sell) from rank #3 (Buy).
All the revenue-bringing products (Web Help Desk, Log & Event Management & Serv -U Managed File Transfer) of Q1 2013 are from their acquisition companies (Web Help Desk Software, Dameware, Serv-U). This shows, if they didn't go for acquisition, they would have ended with stagnant in growth in Q1 2013.
This year is going to be a challenging year for companies that are doing business on IT Enterprise Management especially on Network Performance domain and System Management domain.
Saravanan
