Why Did SolarWinds Shares Plunge 10% Today?

SolarWinds Corp SWI reported a third-quarter FY21 revenue decline of 2.1% year-on-year to $181.3 million, beating the consensus of $178.6 million.
Maintenance revenue was flat at $119.7 million. Subscription revenue climbed 20.2% Y/Y to $32.3 million.
Margins: The non-GAAP gross margin contracted 210 bps to 90.9%, and the non-GAAP EBITDA margin contracted 1,150 bps to 41.5%.
Non-GAAP EPS of $0.37 beat the consensus of $0.27.
SolarWinds generated $81.9 million in operating cash flow during the nine months ended September 30 and held $708.9 million in cash and equivalents.
We continue to make significant progress on a number of key priorities, including customer retention, due to our employees' dedication, the relevance of our solutions, and our partners' and customers' commitment to SolarWinds, CEO Sudhakar Ramakrishna said.
Outlook: SolarWinds sees Q4 revenue of $180 million- $184 million, below the consensus of $184.6 million.
It sees a Q4 EPS of $0.25 - $0.26 below the consensus of $0.29.
SolarWinds sees FY21 revenue of $712 million - $716 million below the consensus of $849.2 million.
It sees an FY21 EPS of $1.14 - $1.15 below the consensus of $1.47.
Price action: SWI shares closed lower by 9.42% at $16.63 on Thursday.

Momentum94.60

Growth99.10

Quality45.43

Value20.23

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