SolarWinds’ Stock Recovers Monday’s Lost Ground Amid 4Q 2011 Results

During yesterday’s market session, shares of SolarWinds, Inc. (NYSE:SWI) gapped up at the morning open which surely was a welcomed occurrence to long-positioned traders.  Trouble is, shares fell below where they closed the previous day of trading (Friday).

Now all of the traders who sold heavily during yesterday’s session get to observe SWI shares rise again today, above Monday’s high, amid positive 4Q earnings.

Here are some details regarding SolarWinds’ 4Q:

Record total revenue for the full year of 2011 of $198.4 million,  representing 30% year-over-year growth.

Fourth quarter GAAP operating income of $22.3 million and non-GAAP operating income of $29.3 million, or a non-GAAP operating margin for
the fourth quarter of 53%.

Fourth quarter GAAP diluted earnings per share of $0.22 and non-GAAP diluted earnings per share of $0.29.
Fourth quarter free cash flow of $36.6 million, representing 28% year-over-year growth.

4Q 2011 revenue reached $55.6 million which is a 34% increase over 4Q 2010.  Revenue from licensing totaled $25.3 million which was a 27% increase over the same quarter of the previous year.  Assets from DameWare Development met company expectations and earned SolarWinds about $200,000 dollars.  Revenue coming from maintenance turned out to be a company record, $30.3 million dollars during this quarter, which is a 41% increase over the previous yearly quarter.

Solarwinds released the following statements regarding today’s 4Q 2011 results:

Kevin Thompson, SolarWinds’ President and Chief Executive Officer said the following, “The SolarWinds team had a very strong performance in the fourth quarter, driving solid results across the board and a great finish to an important year for our company.”

In 2011, we successfully executed against an aggressive plan to extend our unique brand of powerful, affordable, and easy to use IT management software far beyond our traditional network management roots. We entered into the systems and application management space with the release of two new productsSolarWinds Application Performance Monitor and Synthetic End-User Monitorand entered the virtualization management and log & event management markets through two complementary acquisitions,” continued Thompson.

In the process, we estimate that we more than doubled our total addressable market opportunity, by dramatically increasing the range of IT management problems our products can solve and our relevancy to IT professionals in any size of business. In 2012, we plan to continue disrupting the IT management space, by reshaping expectations around how enterprise software is built, purchased, and used, in order to drive another year of success at SolarWinds.”

SolarWinds’ Chief Financial Officer, Mike Berry, noted the following, “In 2011, we successfully demonstrated that periods of significant investment in new products and acquisitions can coincide with periods of strong growth and strong profitability and cash flow generation.  By leveraging our unique financial model and maintaining a sharp focus on ROI, we expect to continue to deliver this combination of solid revenue growth, profit, and cash flow as we move into 2012.”

Performance of SWI shares are pressing onward into uncharted territory, as no higher historical price exists to benchmark against.