AUSTIN, Texas, Feb. 07, 2019 (GLOBE NEWSWIRE) — SolarWinds Corporation (NYSE: SWI), a leading provider of powerful and affordable IT management software, today reported results for its fourth quarter ended December 31, 2018.
Financial Results
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||||
| 2018 | 2017 | Change | 2018 | 2017 | Change | ||||||||||||||||
| (in thousands, except per share data and percentages) | |||||||||||||||||||||
| GAAP Results | |||||||||||||||||||||
| Total revenue | $ | 221,181 | $ | 198,339 | 11.5 | % | $ | 833,089 | $ | 728,017 | 14.4 | % | |||||||||
| Total recurring revenue | 174,941 | 154,521 | 13.2 | % | 668,529 | 571,384 | 17.0 | % | |||||||||||||
| Net loss | (14,743 | ) | (39,761 | ) | (62.9 | )% | (102,066 | ) | (83,866 | ) | 21.7 | % | |||||||||
| Diluted earnings (loss) per share | $ | 2.60 | $ | (1.09 | ) | (338.5 | )% | $ | 2.56 | $ | (3.50 | ) | (173.1 | )% | |||||||
| Non-GAAP Results(1) | |||||||||||||||||||||
| Non-GAAP total revenue | $ | 221,608 | $ | 199,769 | 10.9 | % | $ | 836,805 | $ | 740,998 | 12.9 | % | |||||||||
| Non-GAAP total recurring revenue | 175,368 | 155,951 | 12.5 | % | 672,245 | 584,362 | 15.0 | % | |||||||||||||
| Adjusted EBITDA | 111,855 | 100,067 | 11.8 | % | 407,511 | 361,871 | 12.6 | % | |||||||||||||
| Non-GAAP diluted earnings per share, pro forma(2) | $ | 0.19 | $ | 0.02 | 850.0 | % | $ | 0.60 | $ | 0.42 | 42.9 | % | |||||||||
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- For a reconciliation of our GAAP to non-GAAP results, please see tables below.
- For an explanation of the pro forma calculation, please see “Reconciliation of GAAP to Non-GAAP Weighted-Average Outstanding Diluted Common Shares” below.
Recent Business Highlights
“We’re pleased to report that we closed out 2018 with solid fourth quarter results that exceeded the high end of our outlook for total non-GAAP revenue and adjusted EBITDA,” said Kevin Thompson, SolarWinds’ President and Chief Executive Officer. “Total non-GAAP revenue for the fourth quarter of 2018 of $221.6 million, represented year-over-year growth of 11%, which on a constant currency basis would have been 1% higher. Non-GAAP recurring revenue was $175.4 million for the fourth quarter, grew 12% year-over-year and represented 79% of total non-GAAP revenue in the period, led by non-GAAP subscription revenue growth of 19%, which would have been 2% higher on a constant currency basis. For the full year 2018, total non-GAAP revenue of $836.8 million grew 13% year-over-year. Non-GAAP recurring revenue grew 15% year-over-year, led by non-GAAP subscription revenue growth of 24% year-over-year and accounted for 80% of our total non-GAAP revenue. The increased mix towards a greater percentage of recurring revenue in our business underscores the significant work we have done over the last three years since our take private transaction in early 2016 to maintain a stable maintenance revenue stream with high renewal rates while building a fast-growing subscription revenue stream that is well-positioned to benefit from two significant trends in IT management – the growing adoption of MSPs among small and medium-sized businesses and the need to monitor the health and performance of public cloud IT infrastructure,” added Thompson.
“Adjusted EBITDA for the fourth quarter of 2018 was $111.9 million, representing a margin of 50.5% on total non-GAAP revenue. Adjusted EBITDA was well ahead of our outlook for the quarter, highlighting the leverage inherent in our model with revenue outperformance translating into bottom line outperformance and fourth quarter unlevered free cash flow of $111.1 million reflecting a 99% conversion rate of adjusted EBITDA to cash flow during the period,” said Bart Kalsu, SolarWinds’ Executive Vice President and Chief Financial Officer.
“For the full year, adjusted EBITDA of $407.5 million represented a margin of 48.7% of total non-GAAP revenue. We also converted a high percentage of adjusted EBITDA into cash flow in 2018, as $370.8 million of unlevered free cash flow for the full year represented a 91.0% conversion rate of adjusted EBITDA,” added Kalsu.
Additional highlights for the fourth quarter of 2018 include:
- SolarWinds introduced SolarWinds APM (Application Performance Monitor) to deliver application support for IT Operations and DevOps teams. SolarWinds APM extends the application monitoring capabilities of SolarWinds Server & Application Monitor (SAM) to provide in-depth, code-level monitoring of custom applications. The new solution is designed to deliver deeper performance insights and distributed transaction tracing capabilities across applications hosted in or across on-premise, hybrid IT, and cloud environments.
- SolarWinds released Database Performance Analyzer v12.0, a powerful database and query performance monitoring, analysis, and tuning tool built for many of today’s popular databases. The latest enhancements are designed to help database professionals quickly identify and pinpoint the root cause of slow database queries, and easily optimize database tables to help ensure the speed of business-critical applications that rely on them.
- SolarWinds also expanded its RMM capabilities for managed service providers (MSPs) with enhanced Network Device Monitoring based on technology from SolarWinds NPM. Network Device Monitoring is built to give MSPs the visibility they need to monitor customer switches, printers, routers, and firewalls—in addition to servers and workstations—from a single pane of glass. With greater visibility into the complete network, MSPs can proactively maintain network devices by getting information on hardware health, performance, and utilization.
Initial Public Offering
On October 23, 2018, SolarWinds Corporation successfully closed its initial public offering (IPO) of 25 million shares of common stock at a public offering price of $15.00 per share. SolarWinds received $353.0 million in net proceeds, after deducting underwriting discounts and commissions and estimated offering expenses, from the IPO.
Balance Sheet
At December 31, 2018, total cash and cash equivalents were $382.6 million and total debt was $1.9 billion. Using net proceeds from the IPO, SolarWinds fully repaid the $315.0 million of debt outstanding under its second lien term loan.
The financial results included in this press release are preliminary and pending final review by the company and its external auditors. Financial results will not be final until SolarWinds files its annual report on Form 10-K for the period. Information about SolarWinds’ use of non-GAAP financial measures is provided below under “Non-GAAP Financial Measures.”
Financial Outlook
As of February 7, 2019, SolarWinds is providing its financial outlook for the first quarter of 2019 and full year 2019. The financial information below represents forward-looking non-GAAP financial information, including an estimate of non-GAAP revenue growth, non-GAAP revenue growth on a constant currency basis, adjusted EBITDA and non-GAAP diluted earnings per share, for the first quarter of 2019 and for the full year 2019. These non-GAAP financial measures exclude, among other items mentioned below, stock-based compensation expense, amortization, costs related to non-recurring items and acquisitions and the effect of foreign currency rate fluctuations. We have not reconciled our estimates of these non-GAAP financial measures to their most directly comparable GAAP measure as a result of uncertainty regarding, and the potential variability of, these excluded items in future periods. Accordingly, reconciliation is not available without unreasonable effort, although it is important to note that these excluded items could be material to our results computed in accordance with GAAP in future periods. Our reported results provide reconciliations of non-GAAP financial measures to their nearest GAAP equivalents.
The following financial outlook does not reflect the impact of the new revenue recognition accounting standard that we adopted in the first quarter of 2019. The implementation of the new revenue recognition standard is not expected to have a material impact on total revenue. See additional details provided below under “New Revenue Recognition Standard.”
Financial Outlook for Full Year 2019
SolarWinds’ management is raising its outlook for the year and currently expects to achieve the following results for the full year 2019:
- Total revenue in the range of $921 to $936 million, representing growth over 2018 non-GAAP revenue of 10% to 12% or 11% to 13% on a constant currency basis assuming the same average foreign currency exchange rates as those in 2018.
- Adjusted EBITDA in the range of $448 to $456 million, representing approximately 48.7% of total revenue.
- Non-GAAP diluted earnings per share of $0.78 to $0.80.
- Weighted average outstanding diluted shares of approximately 311.5 million.
Financial Outlook for First Quarter of 2019
SolarWinds’ management currently expects to achieve the following results for the first quarter of 2019:
- Total revenue in the range of $215 to $218 million, representing growth over the first quarter of 2018 non-GAAP revenue of 8% to 10% or 11% to 12% on a constant currency basis assuming the same average foreign currency exchange rates as those in the first quarter of 2018.
- Adjusted EBITDA in the range of $101 to $103 million, representing approximately 47% of total revenue.
- Non-GAAP diluted earnings per share of $0.16 to $0.18.
- Weighted average outstanding diluted shares of approximately 309.8 million.
Additional details on our outlook will be provided on the conference call.
Conference Call and Webcast
In conjunction with this announcement, SolarWinds will host a conference call to discuss its financial results and its business at 4:00 p.m. CT (5:00 p.m. ET/2:00 p.m. PT). A live webcast of the call will be available on the SolarWinds Investor Relations website at http://investors.solarwinds.com. A live dial-in will be available domestically at (877) 823-8676 and internationally at +1 (647) 689-4178. To access the live call, please dial in 5-10 minutes before the scheduled start time. A replay of the webcast will be available on a temporary basis shortly after the event on the SolarWinds Investor Relations website.
Forward-Looking Statements
This press release contains “forward-looking” statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding our financial outlook for the first quarter and full year 2019 and our expectations regarding the impact of the new revenue recognition standard. These forward-looking statements are based on management’s beliefs and assumptions and on information currently available to management. Forward-looking statements include all statements that are not historical facts and may be identified by terms such as “aim,” “anticipate,” “believe,” “can,” “could,” “seek,” “should,” “feel,” “expect,” “will,” “would,” “plan,” “intend,” “estimate,” “continue,” or similar expressions and the negatives of those terms. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the following: (a) the inability to generate significant volumes of high quality sales leads from our digital marketing initiatives and convert such leads into new business at acceptable conversion rates; (b) the inability to sell products to new customers or to sell additional products or upgrades to our existing customers; (c) any decline in our renewal or net retention rates; (d) our inability to successfully identify, complete, and integrate acquisitions and manage our growth effectively; (e) risks associated with our international operations; (f) our status as a controlled company; (g) the possibility that general economic conditions or uncertainty cause information technology spending to be reduced or purchasing decisions to be delayed; (h) the timing and success of new product introductions and product upgrades by SolarWinds or its competitors; (i) the possibility that our operating income could fluctuate and may decline as percentage of revenue as we make further expenditures to expand our operations in order to support additional growth in our business; (j) potential foreign exchange gains and losses related to expenses and sales denominated in currencies other than the functional currency of an associated entity; and (k) such other risks and uncertainties described more fully in documents filed with or furnished to the Securities and Exchange Commission, including the risk factors discussed in our final prospectus dated October 18, 2018 and filed with the SEC on October 22, 2018 pursuant to Rule 424(b) of the Securities Act of 1933, as amended, and the Form 10-K that SolarWinds anticipates filing on or before April 1, 2019. All information provided in this release is as of the date hereof and SolarWinds undertakes no duty to update this information except as required by law.
New Revenue Recognition Standard
In May 2014, FASB issued “Revenue from Contracts with Customers,” which replaced all existing revenue guidance, including prescriptive industry-specific guidance. This standard’s core principle is that an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Entities will need to apply more judgment and make more estimates than under the previous guidance. We will adopt the new standard effective first quarter 2019 using the modified-retrospective method for adoption.
The most significantly impacted areas are the following:
- License and Recurring Revenue. We expect that adoption of the new standard will result in changes to the classification and timing of our revenue recognition. Under the new guidance, the requirement to establish VSOE to recognize license revenue separately from the other elements is eliminated. This change is expected to impact the allocation of the transaction price and timing of our revenue recognition between deliverables, or performance obligations, within an arrangement. In addition, we will recognize time-based license revenue upon the transfer of the license and the associated maintenance revenue over the contract period under the new standard instead of recognizing both the license and maintenance revenue ratably over the contract period. We expect the overall adoption impact to total revenue to be immaterial, though we do expect some changes to the timing and classification between license and recurring revenue. Additionally, some historical deferred revenue, primarily from arrangements involving time-based licenses, will never be recognized as revenue and instead will be a cumulative effect adjustment within accumulated deficit. We expect a reduction of approximately $2.8 million to the deferred revenue balance as a cumulative effect adjustment as of January 1, 2019.
- Contract Acquisition Costs. We expense all sales commissions as incurred under current guidance. The new guidance requires the deferral and amortization of certain incremental costs incurred to obtain a contract. This guidance will require us to capitalize and amortize certain sales commission costs over the remaining contractual term or over an expected period of benefit, which we have determined to be approximately six years. As part of the transition to the new guidance, we expect to recognize a contract asset of approximately $5.2 million as of January 1, 2019 as a cumulative effect adjustment.
- Other Items. The impact of the adoption of the new standard on income taxes will result in an increase of deferred income tax liabilities of approximately $1.7 million as of January 1, 2019. We do not expect that the adoption of this standard will impact our operating cash flows.
We do not expect the changes described above to have a material impact on our quarterly or annual consolidated financial statements, however the exact impact of the new standard will be dependent on facts and circumstances that could vary from period to period. The quantitative amounts provided above are estimates of the expected effects of our adoption of the new standard. These amounts represent our best estimates of the effects of adopting the new standard and the actual impact of the new revenue standard is subject to change from these estimates and such change may be significant.
Non-GAAP Financial Measures
In addition to financial measures prepared in accordance with GAAP, we use certain non-GAAP financial measures to clarify and enhance our understanding, and aid in the period-to-period comparison, of our performance. We believe that these non-GAAP financial measures provide supplemental information that is meaningful when assessing our operating performance because they exclude the impact of certain amounts that our management and board of directors do not consider part of core operating results when assessing our operational performance, allocating resources, preparing annual budgets and determining compensation. Accordingly, these non-GAAP financial measures may provide insight to investors into the motivation and decision-making of management in operating the business. Set forth in the table below are the corresponding GAAP financial measures for each non-GAAP financial measure presented. Investors are encouraged to review the reconciliation of each of these non-GAAP financial measures to its most comparable GAAP financial measure included below.
SolarWinds also believes that these non-GAAP financial measures are used by investors and security analysts to (a) compare and evaluate its performance from period to period and (b) compare its performance to those of its competitors. These non-GAAP measures exclude certain items that can vary substantially from company to company depending upon their financing and accounting methods, the book value of their assets, their capital structures and the method by which their assets were acquired.
There are limitations associated with the use of these non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with GAAP, do not reflect a comprehensive system of accounting and may not be completely comparable to similarly titled measures of other companies due to potential differences in the exact method of calculation between companies. Certain items that are excluded from these non-GAAP financial measures can have a material impact on operating and net income.
As a result, these non-GAAP financial measures have limitations and should not be considered in isolation from, or as a substitute for, the most comparable GAAP measures. SolarWinds’ management and board of directors compensate for these limitations by using these non-GAAP financial measures as supplements to GAAP financial measures and by reviewing the reconciliations of the non-GAAP financial measures to their most comparable GAAP financial measure. Investors are encouraged to review the reconciliations of these non-GAAP financial measures to their most comparable GAAP financial measures that are set forth in the tables below.
Non-GAAP Revenue. We define non-GAAP subscription revenue, non-GAAP maintenance revenue, non-GAAP license revenue, and non-GAAP total revenue as subscription revenue, maintenance revenue, license revenue, and total revenue, respectively, excluding the impact of purchase accounting primarily from our take private transaction in early 2016 and the acquisition of LOGICnow. We monitor these measures to assess our performance because we believe our revenue growth rates would be overstated without these adjustments. We believe presenting non-GAAP subscription revenue, non-GAAP maintenance revenue, non-GAAP license revenue and non-GAAP total revenue for periods prior to 2019 aids in the comparability between periods and in assessing our overall operating performance.
Non-GAAP Revenue on a Constant Currency Basis. We provide our revenue outlook on a constant currency basis to provide a framework for assessing how we expect our business to perform excluding the effect of foreign currency rate fluctuations. To present this information, future period estimated results for entities reporting in currencies other than U.S. Dollars are converted into U.S. Dollars at the average exchange rates in effect during the corresponding prior period presented. We believe that providing financial outlook for revenue on a constant currency basis facilitates the comparison of non-GAAP revenue to prior periods.
Non-GAAP Revenue Growth Rates. The non-GAAP revenue growth rates provided in our financial outlook are calculated using non-GAAP revenue from the comparable prior period. We provide our financial outlook for non-GAAP revenue growth rates to provide a framework for assessing how we expect our business to perform excluding the purchase accounting related impact to revenue following our take private transaction in February 2016. This adjustment to GAAP revenue impacted our revenue through the fourth quarter of 2018. Our 2019 revenue results will no longer be impacted by this adjustment. We believe providing non-GAAP revenue growth rates facilitates the comparison of our revenue outlook to prior periods.
Non-GAAP Cost of Revenue and Non-GAAP Operating Income. We provide non-GAAP cost of revenue and non-GAAP operating income and related non-GAAP margins using non-GAAP revenue as discussed above and excluding such items as the write-down of deferred revenue related to purchase accounting, amortization of acquired intangible assets, stock-based compensation expense, acquisition and Sponsor related costs and restructuring charges and other. Management believes these measures are useful for the following reasons:
- Amortization of Acquired Intangible Assets. We provide non-GAAP information that excludes expenses related to purchased intangible assets associated with our acquisitions. We believe that eliminating this expense from our non-GAAP measures is useful to investors, because the amortization of acquired intangible assets can be inconsistent in amount and frequency and is significantly impacted by the timing and magnitude of our acquisition transactions, which also vary in frequency from period to period. Accordingly, we analyze the performance of our operations in each period without regard to such expenses.
- Stock-Based Compensation Expense. We provide non-GAAP information that excludes expenses related to stock-based compensation. We believe that the exclusion of stock-based compensation expense provides for a better comparison of our operating results to prior periods and to our peer companies as the calculations of stock-based compensation vary from period to period and company to company due to different valuation methodologies, subjective assumptions and the variety of award types. Because of these unique characteristics of stock-based compensation, management excludes these expenses when analyzing the organization’s business performance.
- Acquisition and Sponsor Related Costs. We exclude certain expense items resulting from our take private transaction in early 2016 and other acquisitions, such as legal, accounting and advisory fees, changes in fair value of contingent consideration, costs related to integrating the acquired businesses, deferred compensation, severance and retention expense. We consider these adjustments, to some extent, to be unpredictable and dependent on a significant number of factors that are outside of our control. Furthermore, acquisitions result in operating expenses that would not otherwise have been incurred by us in the normal course of our organic business operations. We believe that providing these non-GAAP measures that exclude acquisition and Sponsor related costs, allows users of our financial statements to better review and understand the historical and current results of our continuing operations, and also facilitates comparisons to our historical results and results of less acquisitive peer companies, both with and without such adjustments.
- Restructuring Charges and Other. We provide non-GAAP information that excludes restructuring charges such as severance and the estimated costs of exiting and terminating facility lease commitments, as they relate to our corporate restructuring and exit activities. These restructuring charges are inconsistent in amount and are significantly impacted by the timing and nature of these events. Therefore, although we may incur these types of expenses in the future, we believe that eliminating these charges for purposes of calculating the non-GAAP financial measures facilitates a more meaningful evaluation of our operating performance and comparisons to our past operating performance.
Non-GAAP net income (loss) and non-GAAP net income (loss) per diluted share. We believe that the use of non-GAAP net income (loss) and non-GAAP net income (loss) per diluted share is helpful to our investors to clarify and enhance their understanding of past performance and future prospects. Non-GAAP net income (loss) is calculated as net income (loss) excluding the adjustments to non-GAAP revenue, non-GAAP cost of revenue and non-GAAP operating income, losses on extinguishment of debt, certain other non-operating gains and losses and the income tax effect of the non-GAAP exclusions. We define non-GAAP net income (loss) per diluted share as non-GAAP net income (loss) divided by the non-GAAP weighted average outstanding common shares, proforma, which is calculated as if to reflect the conversion of Class A Common Stock and shares issued for accrued dividends and shares issued at our initial public offering as if each occurred at the beginning of each respective period.
Adjusted EBITDA and Adjusted EBITDA Margin. We regularly monitor adjusted EBITDA and adjusted EBITDA margin, as it is a measure we use to assess our operating performance. We define adjusted EBITDA as net income or loss, excluding the impact of purchase accounting on total revenue, amortization of acquired intangible assets and developed technology, depreciation expense, stock-based compensation expense, restructuring and other charges, acquisition and Sponsor related costs, interest expense, net, debt extinguishment and refinancing costs, unrealized foreign currency (gains) losses, and income tax expense (benefit). We define adjusted EBITDA margin as adjusted EBITDA divided by non-GAAP revenue. Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are: although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; adjusted EBITDA excludes the impact of the write-down of deferred revenue due to purchase accounting in connection with our acquisition, and therefore includes revenue that will never be recognized under GAAP; adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; adjusted EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debt; adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us; and other companies, including companies in our industry, may calculate adjusted EBITDA differently, which reduces its usefulness as a comparative measure.
Unlevered Free Cash Flow. Unlevered free cash flow is a measure of our liquidity used by management to evaluate our business prior to the impact of our capital structure, purchases of property and equipment, acquisition and sponsor related costs, restructuring costs and other one time items, that can be used by us for strategic opportunities and strengthening our balance sheet. However, given our debt obligations, unlevered free cash flow does not represent residual cash flow available for discretionary expenses.
#SWIfinancial
About SolarWinds
SolarWinds (NYSE:SWI) is a leading provider of powerful and affordable IT infrastructure management software. Our products give organizations worldwide, regardless of type, size or IT infrastructure complexity, the power to monitor and manage the performance of their IT environments, whether on-premises, in the cloud, or in hybrid models. We continuously engage with all types of technology professionals—IT operations professionals, DevOps professionals, and managed service providers (MSPs)—to understand the challenges they face maintaining high-performing and highly available IT infrastructures. The insights we gain from engaging with them, in places like our THWACK online community, allow us to build products that solve well-understood IT management challenges in ways that technology professionals want them solved. This focus on the user and commitment to excellence in end-to-end hybrid IT performance management has established SolarWinds as a worldwide leader in network management software and MSP solutions. Learn more today at www.solarwinds.com.
The SolarWinds, SolarWinds & Design, Orion, and THWACK trademarks are the exclusive property of SolarWinds Worldwide, LLC or its affiliates, are registered with the U.S. Patent and Trademark Office, and may be registered or pending registration in other countries. All other SolarWinds trademarks, service marks, and logos may be common law marks or are registered or pending registration. All other trademarks mentioned herein are used for identification purposes only and are trademarks of (and may be registered trademarks of) their respective companies.
© 2019 SolarWinds Worldwide, LLC. All rights reserved.
CONTACTS:
| Investors: | Media: | ||
| Dave Hafner Phone: 385.374.7059 [email protected] |
Tiffany Nels Phone: 512.682.9535 [email protected] |
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SolarWinds Corporation
Consolidated Balance Sheets
(In thousands, except share and per share information)
(Unaudited)
| December 31, | December 31, | ||||||
| 2018 | 2017 | ||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 382,620 | $ | 277,716 | |||
| Accounts receivable, net of allowances of $3,196 and $2,065 as of December 31, 2018 and December 31, 2017, respectively | 100,528 | 85,133 | |||||
| Income tax receivable | 893 | 1,713 | |||||
| Prepaid and other current assets | 16,267 | 24,331 | |||||
| Total current assets | 500,308 | 388,893 | |||||
| Property and equipment, net | 35,864 | 34,209 | |||||
| Deferred taxes | 6,873 | 4,425 | |||||
| Goodwill | 3,683,961 | 3,695,640 | |||||
| Intangible assets, net | 956,261 | 1,194,499 | |||||
| Other assets, net | 11,382 | 9,398 | |||||
| Total assets | $ | 5,194,649 | $ | 5,327,064 | |||
| Liabilities, redeemable convertible common stock and stockholders’ equity (deficit) | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 9,742 | $ | 9,657 | |||
| Accrued liabilities and other | 52,055 | 39,593 | |||||
| Accrued interest payable | 290 | 11,632 | |||||
| Income taxes payable | 15,682 | 9,049 | |||||
| Current portion of deferred revenue | 273,106 | 241,513 | |||||
| Current debt obligation | 19,900 | 16,950 | |||||
| Total current liabilities | 370,775 | 328,394 | |||||
| Long-term liabilities: | |||||||
| Deferred revenue, net of current portion | 23,026 | 20,278 | |||||
| Non-current deferred taxes | 147,144 | 167,523 | |||||
| Other long-term liabilities | 133,532 | 148,121 | |||||
| Long-term debt, net of current portion | 1,904,072 | 2,245,622 | |||||
| Total liabilities | 2,578,549 | 2,909,938 | |||||
| Commitments and contingencies | |||||||
| Redeemable convertible Class A common stock, $0.001 par value: no shares authorized, issued or outstanding at December 31, 2018; 5,755,000 shares authorized and 2,661,030 shares issued and outstanding as of December 31, 2017 | — | 3,146,887 | |||||
| Stockholders’ equity (deficit): | |||||||
| Common stock, $0.001 par value: 1,000,000,000 shares authorized and 304,942,415 shares issued and outstanding as of December 31, 2018; 233,000,000 shares authorized and 100,734,056 shares issued and outstanding as of December 31, 2017 | 305 | 101 | |||||
| Preferred stock, $0.001 par value: 50,000,000 shares authorized and no shares issued and outstanding as of December 31, 2018; no shares authorized, issued and outstanding as of December 31, 2017 | — | — | |||||
| Additional paid-in capital | 3,011,080 | — | |||||
| Accumulated other comprehensive income | 17,043 | 75,294 | |||||
| Accumulated deficit | (412,328 | ) | (805,156 | ) | |||
| Total stockholders’ equity (deficit) | 2,616,100 | (729,761 | ) | ||||
| Total liabilities, redeemable convertible common stock and stockholders’ equity (deficit) | $ | 5,194,649 | $ | 5,327,064 | |||
SolarWinds Corporation
Consolidated Statements of Operations
(In thousands, except per share information)
(Unaudited)
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
| Revenue: | |||||||||||||||
| Subscription | $ | 69,587 | $ | 58,352 | $ | 265,591 | $ | 213,754 | |||||||
| Maintenance | 105,354 | 96,169 | 402,938 | 357,630 | |||||||||||
| Total recurring revenue | 174,941 | 154,521 | 668,529 | 571,384 | |||||||||||
| License | 46,240 | 43,818 | 164,560 | 156,633 | |||||||||||
| Total revenue | 221,181 | 198,339 | 833,089 | 728,017 | |||||||||||
| Cost of revenue: | |||||||||||||||
| Cost of recurring revenue | 18,127 | 15,819 | 70,744 | 60,698 | |||||||||||
| Amortization of acquired technologies | 43,870 | 43,252 | 175,991 | 171,033 | |||||||||||
| Total cost of revenue | 61,997 | 59,071 | 246,735 | 231,731 | |||||||||||
| Gross profit | 159,184 | 139,268 | 586,354 | 496,286 | |||||||||||
| Operating expenses: | |||||||||||||||
| Sales and marketing | 61,446 | 53,561 | 227,468 | 205,631 | |||||||||||
| Research and development | 24,472 | 23,204 | 96,272 | 86,618 | |||||||||||
| General and administrative | 20,792 | 16,438 | 80,641 | 67,303 | |||||||||||
| Amortization of acquired intangibles | 16,500 | 17,170 | 66,788 | 67,080 | |||||||||||
| Total operating expenses | 123,210 | 110,373 | 471,169 | 426,632 | |||||||||||
| Operating income | 35,974 | 28,895 | 115,185 | 69,654 | |||||||||||
| Other income (expense): | |||||||||||||||
| Interest expense, net | (29,905 | ) | (42,768 | ) | (142,008 | ) | (169,786 | ) | |||||||
| Other income (expense), net | (20,411 | ) | 8,979 | (94,887 | ) | 38,664 | |||||||||
| Total other income (expense) | (50,316 | ) | (33,789 | ) | (236,895 | ) | (131,122 | ) | |||||||
| Loss before income taxes | (14,342 | ) | (4,894 | ) | (121,710 | ) | (61,468 | ) | |||||||
| Income tax expense (benefit) | 401 | 34,867 | (19,644 | ) | 22,398 | ||||||||||
| Net loss | $ | (14,743 | ) | $ | (39,761 | ) | $ | (102,066 | ) | $ | (83,866 | ) | |||
| Net income (loss) available to common stockholders (1) | $ | 668,426 | $ | (109,563 | ) | $ | 364,635 | $ | (351,873 | ) | |||||
| Net income (loss) per share: | |||||||||||||||
| Basic earnings (loss) per share | $ | 2.63 | $ | (1.09 | ) | $ | 2.60 | $ | (3.50 | ) | |||||
| Diluted earnings (loss) per share | $ | 2.60 | $ | (1.09 | ) | $ | 2.56 | $ | (3.50 | ) | |||||
| Weighted-average shares used to compute net income (loss) per share: | |||||||||||||||
| Shares used in computation of basic earnings (loss) per share | 254,209 | 100,737 | 140,301 | 100,433 | |||||||||||
| Shares used in computation of diluted earnings (loss) per share | 256,711 | 100,737 | 142,541 | 100,433 | |||||||||||
____________
- Net income (loss) available to common stockholders is calculated as follows:
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
| Net loss | $ | (14,743 | ) | $ | (39,761 | ) | $ | (102,066 | ) | $ | (83,866 | ) | |||
| Accretion of dividends on Class A common stock | (14,928 | ) | (69,802 | ) | (231,549 | ) | (268,007 | ) | |||||||
| Gain on conversion of Class A common stock | 711,247 | — | 711,247 | — | |||||||||||
| Earnings allocated to unvested restricted stock | (13,150 | ) | — | (12,997 | ) | — | |||||||||
| Net income (loss) available to common stockholders | $ | 668,426 | $ | (109,563 | ) | $ | 364,635 | $ | (351,873 | ) | |||||
SolarWinds Corporation
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
| (in thousands, except margin data) | |||||||||||||||
| Revenue: | |||||||||||||||
| GAAP subscription revenue | $ | 69,587 | $ | 58,352 | $ | 265,591 | $ | 213,754 | |||||||
| Impact of purchase accounting | 50 | 296 | 1,166 | 1,464 | |||||||||||
| Non-GAAP subscription revenue | 69,637 | 58,648 | 266,757 | 215,218 | |||||||||||
| GAAP maintenance revenue | 105,354 | 96,169 | 402,938 | 357,630 | |||||||||||
| Impact of purchase accounting | 377 | 1,134 | 2,550 | 11,514 | |||||||||||
| Non-GAAP maintenance revenue | 105,731 | 97,303 | 405,488 | 369,144 | |||||||||||
| GAAP total recurring revenue | 174,941 | 154,521 | 668,529 | 571,384 | |||||||||||
| Impact of purchase accounting | 427 | 1,430 | 3,716 | 12,978 | |||||||||||
| Non-GAAP total recurring revenue | 175,368 | 155,951 | 672,245 | 584,362 | |||||||||||
| GAAP license revenue | 46,240 | 43,818 | 164,560 | 156,633 | |||||||||||
| Impact of purchase accounting | — | — | — | 3 | |||||||||||
| Non-GAAP license revenue | 46,240 | 43,818 | 164,560 | 156,636 | |||||||||||
| Total GAAP revenue | $ | 221,181 | $ | 198,339 | $ | 833,089 | $ | 728,017 | |||||||
| Impact of purchase accounting | $ | 427 | $ | 1,430 | $ | 3,716 | $ | 12,981 | |||||||
| Total non-GAAP revenue | $ | 221,608 | $ | 199,769 | $ | 836,805 | $ | 740,998 | |||||||
| GAAP cost of revenue | $ | 61,997 | $ | 59,071 | $ | 246,735 | $ | 231,731 | |||||||
| Stock-based compensation expense | (272 | ) | (1 | ) | (279 | ) | (4 | ) | |||||||
| Amortization of acquired technologies | (43,870 | ) | (43,252 | ) | (175,991 | ) | (171,033 | ) | |||||||
| Acquisition and Sponsor related costs | (101 | ) | (92 | ) | (336 | ) | (371 | ) | |||||||
| Restructuring costs and other | — | (12 | ) | — | (12 | ) | |||||||||
| Non-GAAP cost of revenue | $ | 17,754 | $ | 15,714 | $ | 70,129 | $ | 60,311 | |||||||
| GAAP gross profit | $ | 159,184 | $ | 139,268 | $ | 586,354 | $ | 496,286 | |||||||
| Impact of purchase accounting | 427 | 1,430 | 3,716 | 12,981 | |||||||||||
| Stock-based compensation expense | 272 | 1 | 279 | 4 | |||||||||||
| Amortization of acquired technologies | 43,870 | 43,252 | 175,991 | 171,033 | |||||||||||
| Acquisition and Sponsor related costs | 101 | 92 | 336 | 371 | |||||||||||
| Restructuring costs and other | — | 12 | — | 12 | |||||||||||
| Non-GAAP gross profit | $ | 203,854 | $ | 184,055 | $ | 766,676 | $ | 680,687 | |||||||
| GAAP gross margin | 72.0 | % | 70.2 | % | 70.4 | % | 68.2 | % | |||||||
| Non-GAAP gross margin | 92.0 | % | 92.1 | % | 91.6 | % | 91.9 | % | |||||||
| GAAP sales and marketing expense | $ | 61,446 | $ | 53,561 | $ | 227,468 | $ | 205,631 | |||||||
| Stock-based compensation expense | (2,061 | ) | (18 | ) | (2,295 | ) | (44 | ) | |||||||
| Acquisition and Sponsor related costs | (1,132 | ) | (925 | ) | (3,250 | ) | (3,836 | ) | |||||||
| Restructuring costs and other | (193 | ) | (3 | ) | (238 | ) | (170 | ) | |||||||
| Non-GAAP sales and marketing expense | $ | 58,060 | $ | 52,615 | $ | 221,685 | $ | 201,581 | |||||||
| GAAP research and development expense | $ | 24,472 | $ | 23,204 | $ | 96,272 | $ | 86,618 | |||||||
| Stock-based compensation expense | (1,282 | ) | (7 | ) | (1,330 | ) | (21 | ) | |||||||
| Acquisition and Sponsor related costs | (547 | ) | (857 | ) | (2,527 | ) | (3,951 | ) | |||||||
| Restructuring costs and other | — | (117 | ) | (201 | ) | (262 | ) | ||||||||
| Non-GAAP research and development expense | $ | 22,643 | $ | 22,223 | $ | 92,214 | $ | 82,384 | |||||||
| GAAP general and administrative expense | $ | 20,792 | $ | 16,438 | $ | 80,641 | $ | 67,303 | |||||||
| Stock-based compensation expense | (1,886 | ) | (5 | ) | (1,929 | ) | (11 | ) | |||||||
| Acquisition and Sponsor related costs | (2,260 | ) | (3,543 | ) | (14,288 | ) | (15,422 | ) | |||||||
| Restructuring costs and other | (1,312 | ) | (82 | ) | (2,560 | ) | (2,414 | ) | |||||||
| Non-GAAP general and administrative expense | $ | 15,334 | $ | 12,808 | $ | 61,864 | $ | 49,456 | |||||||
| GAAP operating expenses | $ | 123,210 | $ | 110,373 | $ | 471,169 | $ | 426,632 | |||||||
| Stock-based compensation expense | (5,229 | ) | (30 | ) | (5,554 | ) | (76 | ) | |||||||
| Amortization of acquired intangibles | (16,500 | ) | (17,170 | ) | (66,788 | ) | (67,080 | ) | |||||||
| Acquisition and Sponsor related costs | (3,939 | ) | (5,325 | ) | (20,065 | ) | (23,209 | ) | |||||||
| Restructuring costs and other | (1,505 | ) | (202 | ) | (2,999 | ) | (2,846 | ) | |||||||
| Non-GAAP operating expenses | $ | 96,037 | $ | 87,646 | $ | 375,763 | $ | 333,421 | |||||||
| GAAP operating income | $ | 35,974 | $ | 28,895 | $ | 115,185 | $ | 69,654 | |||||||
| Impact of purchase accounting | 427 | 1,430 | 3,716 | 12,981 | |||||||||||
| Stock-based compensation expense | 5,501 | 31 | 5,833 | 80 | |||||||||||
| Amortization of acquired technologies | 43,870 | 43,252 | 175,991 | 171,033 | |||||||||||
| Amortization of acquired intangibles | 16,500 | 17,170 | 66,788 | 67,080 | |||||||||||
| Acquisition and Sponsor related costs | 4,040 | 5,417 | 20,401 | 23,580 | |||||||||||
| Restructuring costs and other | 1,505 | 214 | 2,999 | 2,858 | |||||||||||
| Non-GAAP operating income | $ | 107,817 | $ | 96,409 | $ | 390,913 | $ | 347,266 | |||||||
| GAAP operating margin | 16.3 | % | 14.6 | % | 13.8 | % | 9.6 | % | |||||||
| Non-GAAP operating margin | 48.7 | % | 48.3 | % | 46.7 | % | 46.9 | % | |||||||
| GAAP net loss | $ | (14,743 | ) | $ | (39,761 | ) | $ | (102,066 | ) | $ | (83,866 | ) | |||
| Impact of purchase accounting | 427 | 1,430 | 3,716 | 12,981 | |||||||||||
| Stock-based compensation expense | 5,501 | 31 | 5,833 | 80 | |||||||||||
| Amortization of acquired technologies | 43,870 | 43,252 | 175,991 | 171,033 | |||||||||||
| Amortization of acquired intangibles | 16,500 | 17,170 | 66,788 | 67,080 | |||||||||||
| Acquisition and Sponsor related costs | 4,040 | 5,417 | 20,401 | 23,580 | |||||||||||
| Restructuring costs and other | 1,505 | 214 | 2,999 | 2,858 | |||||||||||
| Loss on extinguishment of debt | 19,547 | — | 80,137 | 18,559 | |||||||||||
| Other (gain) loss | — | (3,009 | ) | — | (3,009 | ) | |||||||||
| Tax benefits associated with above adjustments | (18,966 | ) | (17,216 | ) | (69,713 | ) | (80,908 | ) | |||||||
| Non-GAAP net income | $ | 57,681 | $ | 7,528 | $ | 184,086 | $ | 128,388 | |||||||
Reconciliation of GAAP to Non-GAAP Weighted-Average Outstanding Diluted Common Shares
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
| (in thousands, except per share information) | |||||||||||||||
| GAAP weighted-average shares used in computing diluted earnings (loss) per share available to common shareholders | 256,711 | 100,737 | 142,541 | 100,433 | |||||||||||
| Pro forma dilutive shares: | |||||||||||||||
| Weighted-average pro forma adjustment to reflect conversion of redeemed convertible Class A Common Stock and shares issued for accrued dividends(1) | 44,453 | 177,812 | 144,198 | 177,812 | |||||||||||
| Shares issued at offering(2) | 6,250 | 25,000 | 20,274 | 25,000 | |||||||||||
| Non-GAAP weighted-average shares used in computing diluted earnings (loss) per share, pro forma(3) | 307,414 | 303,549 | 307,013 | 303,245 | |||||||||||
| GAAP diluted earnings (loss) per share | $ | 2.60 | $ | (1.09 | ) | $ | 2.56 | $ | (3.50 | ) | |||||
| Non-GAAP diluted earnings per share, pro forma | $ | 0.19 | $ | 0.02 | $ | 0.60 | $ | 0.42 | |||||||
_____________
- Adjustment to give effect to the conversion of 2,661,015 shares of Class A Common Stock that were outstanding immediately prior to the closing of the initial public offering into 140,053,370 shares of common stock and the conversion of $717.4 million of accrued and unpaid dividends on the Class A Common Stock into 37,758,109 shares of common stock equal to the result of the accrued and unpaid dividends on each share of Class A Common Stock, divided by $19.00 per share, as if the shares had been issued at the beginning of the period.
- Adjustment to give effect to 25.0 million shares issued in connection with the initial public offering retroactively applied as if the shares had been issued at the beginning of each period.
- Does not give effect to anti-dilutive incentive stock awards including 7.3 million of equity awards issued in connection with the initial public offering in October 2018.
Reconciliation of GAAP Net Loss to Adjusted EBITDA
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
| (in thousands) | |||||||||||||||
| Net loss | $ | (14,743 | ) | $ | (39,761 | ) | $ | (102,066 | ) | $ | (83,866 | ) | |||
| Amortization and depreciation | 64,459 | 63,790 | 258,362 | 250,876 | |||||||||||
| Income tax expense (benefit) | 401 | 34,867 | (19,644 | ) | 22,398 | ||||||||||
| Interest expense, net | 29,905 | 42,768 | 142,008 | 169,786 | |||||||||||
| Impact of purchase accounting on total revenue | 427 | 1,430 | 3,716 | 12,981 | |||||||||||
| Unrealized foreign currency (gains) losses(1) | 663 | (8,817 | ) | 14,367 | (56,368 | ) | |||||||||
| Acquisition and Sponsor related costs | 4,040 | 5,417 | 20,401 | 23,580 | |||||||||||
| Debt related costs(2) | 19,697 | 128 | 81,535 | 19,546 | |||||||||||
| Stock-based compensation expense | 5,501 | 31 | 5,833 | 80 | |||||||||||
| Restructuring costs and other | 1,505 | 214 | 2,999 | 2,858 | |||||||||||
| Adjusted EBITDA | $ | 111,855 | $ | 100,067 | $ | 407,511 | $ | 361,871 | |||||||
| Adjusted EBITDA margin | 50.5 | % | 50.1 | % | 48.7 | % | 48.8 | % | |||||||
_______________
- Unrealized foreign currency (gains) losses primarily relate to the remeasurement of our intercompany loans and to a lesser extent, unrealized foreign currency (gains) losses on selected assets and liabilities.
- Debt related costs include fees related to our credit agreements, debt refinancing costs and the related write-off of debt issuance costs.
Reconciliation of Non-GAAP Revenue Outlook
| Full Year 2019 | |||||||||||||
| Low | High | Low(2) | High(2) | ||||||||||
| (in millions, except year-over-year percentages) | |||||||||||||
| Total revenue | $ | 921 | $ | 936 | 10.0 | % | 12.0 | % | |||||
| Estimated foreign currency impact | 9 | 9 | 1.0 | 1.0 | |||||||||
| Non-GAAP total revenue on a constant currency basis(1) | $ | 930 | $ | 945 | 11.0 | % | 13.0 | % | |||||
| Q1 2019 | |||||||||||||
| Low | High | Low(2) | High(2) | ||||||||||
| (in millions, except year-over-year percentages) | |||||||||||||
| Total revenue | $ | 215 | $ | 218 | 8.0 | % | 10.0 | % | |||||
| Estimated foreign currency impact | 5 | 5 | 3.0 | 2.0 | |||||||||
| Non-GAAP total revenue on a constant currency basis(1) | $ | 220 | $ | 223 | 11.0 | % | 12.0 | % | |||||
| Full Year 2019(2) | Q1 2019(2) | ||||
| Non-GAAP subscription revenue growth | 19.0 | % | 12.5 | % | |
| Estimated foreign currency impact | 1.0 | % | 3.5 | % | |
| Non-GAAP subscription revenue growth on a constant currency basis(1) | 20.0 | % | 16.0 | % | |
| Non-GAAP license and maintenance revenue growth | 7.0 | % | 7.5 | % | |
| Estimated foreign currency impact | 1.0 | % | 1.5 | % | |
| Non-GAAP license and maintenance revenue growth on a constant currency basis(1) | 8.0 | % | 9.0 | % | |
________
- Non-GAAP revenue on a constant currency basis is calculated using the average foreign currency exchange rates in the comparable prior year periods and applying those rates to the estimated foreign-denominated revenue in the corresponding periods rather than the forecasted foreign currency exchange rates for the future periods.
- Revenue growth rates are calculated using non-GAAP revenue from the comparable prior period.
Reconciliation of Unlevered Free Cash Flow
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
| (in thousands) | |||||||||||||||
| Net cash provided by operating activities | $ | 88,060 | $ | 96,794 | $ | 254,142 | $ | 232,693 | |||||||
| Capital expenditures(1) | (3,756 | ) | (2,882 | ) | (18,632 | ) | (12,380 | ) | |||||||
| Cash paid for interest, net and other debt related items | 28,477 | 37,911 | 143,071 | 151,305 | |||||||||||
| Cash paid for acquisition and sponsor related costs, restructuring costs and other one time items | 4,788 | 9,309 | 24,387 | 30,089 | |||||||||||
| One time tax refund | — | (35,500 | ) | — | (35,500 | ) | |||||||||
| Unlevered free cash flow (excluding forfeited tax shield) | 117,569 | 105,632 | 402,968 | 366,207 | |||||||||||
| Forfeited tax shield related to interest payments(2) | (6,479 | ) | (14,024 | ) | (32,162 | ) | (54,429 | ) | |||||||
| Unlevered free cash flow | $ | 111,090 | $ | 91,608 | $ | 370,806 | $ | 311,778 | |||||||
_______________
- Includes purchases of property and equipment and purchases of intangible assets.
- Forfeited tax shield related to interest payments assumes a statutory rate of 22.5% for the three and twelve months ended December 31, 2018 and 37.0% for the three and twelve months ended December 31, 2017.
SolarWinds Corporation
Consolidated Statements of Cash Flows
(In thousands) (Unaudited)
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
| Cash flows from operating activities | |||||||||||||||
| Net loss | $ | (14,743 | ) | $ | (39,761 | ) | $ | (102,066 | ) | $ | (83,866 | ) | |||
| Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||||||
| Depreciation and amortization | 64,459 | 63,790 | 258,362 | 250,876 | |||||||||||
| Provision for doubtful accounts | 507 | 349 | 2,498 | 2,489 | |||||||||||
| Stock-based compensation expense | 5,501 | 31 | 5,833 | 80 | |||||||||||
| Amortization of debt issuance costs | 2,403 | 4,633 | 11,675 | 18,859 | |||||||||||
| Loss on extinguishment of debt | 19,547 | — | 80,137 | 18,559 | |||||||||||
| Deferred taxes | (8,016 | ) | (81,746 | ) | (22,101 | ) | (101,522 | ) | |||||||
| (Gain) loss on foreign currency exchange rates | 663 | (5,227 | ) | 13,410 | (54,875 | ) | |||||||||
| Other non-cash expenses (benefits) | 1,992 | (7,206 | ) | 3,443 | (3,754 | ) | |||||||||
| Changes in operating assets and liabilities, net of assets acquired and liabilities assumed in business combinations: | |||||||||||||||
| Accounts receivable | (4,047 | ) | (6,509 | ) | (18,010 | ) | (2,358 | ) | |||||||
| Income taxes receivable | 838 | 33,535 | 707 | 35,005 | |||||||||||
| Prepaid and other current assets | (2,566 | ) | 1,687 | (4,497 | ) | 6,184 | |||||||||
| Accounts payable | 3,930 | 3,423 | (28 | ) | 293 | ||||||||||
| Accrued liabilities and other | 31 | 1,239 | 9,776 | (7,544 | ) | ||||||||||
| Accrued interest payable | (826 | ) | 354 | (11,342 | ) | 609 | |||||||||
| Income taxes payable | 5,439 | 118,826 | (10,673 | ) | 119,594 | ||||||||||
| Deferred revenue | 13,216 | 9,794 | 35,507 | 34,043 | |||||||||||
| Other long-term liabilities | (268 | ) | (418 | ) | 1,511 | 21 | |||||||||
| Net cash provided by operating activities | 88,060 | 96,794 | 254,142 | 232,693 | |||||||||||
| Cash flows from investing activities | |||||||||||||||
| Maturities of investments | — | — | — | 2,000 | |||||||||||
| Purchases of property and equipment | (3,151 | ) | (1,254 | ) | (15,945 | ) | (7,594 | ) | |||||||
| Purchases of intangible assets | (605 | ) | (1,628 | ) | (2,687 | ) | (4,786 | ) | |||||||
| Acquisitions, net of cash acquired | — | — | (60,578 | ) | (23,999 | ) | |||||||||
| Proceeds from sale of cost method investment and other | 502 | — | 11,217 | — | |||||||||||
| Net cash used in investing activities | (3,254 | ) | (2,882 | ) | (67,993 | ) | (34,379 | ) | |||||||
| Cash flows from financing activities | |||||||||||||||
| Proceeds from issuance of common stock and incentive restricted stock | 357,188 | 205 | 358,911 | 313 | |||||||||||
| Repurchase of common stock and incentive restricted stock | (10 | ) | (556 | ) | (578 | ) | (930 | ) | |||||||
| Exercise of stock options | 3 | 1 | 16 | 1 | |||||||||||
| Premium paid on debt extinguishment | (14,175 | ) | — | (36,900 | ) | — | |||||||||
| Proceeds from credit agreement | — | — | 626,950 | 3,500 | |||||||||||
| Repayments of borrowings from credit agreement | (319,975 | ) | (4,236 | ) | (1,014,900 | ) | (36,950 | ) | |||||||
| Payment of debt issuance costs | — | — | (5,561 | ) | (1,288 | ) | |||||||||
| Payment for offering costs | (1,468 | ) | — | (3,662 | ) | — | |||||||||
| Net cash provided by (used in) financing activities | 21,563 | (4,586 | ) | (75,724 | ) | (35,354 | ) | ||||||||
| Effect of exchange rate changes on cash and cash equivalents | (2,082 | ) | 5,071 | (5,521 | ) | 13,113 | |||||||||
| Net increase in cash and cash equivalents | 104,287 | 94,397 | 104,904 | 176,073 | |||||||||||
| Cash and cash equivalents | |||||||||||||||
| Beginning of period | 278,333 | 183,319 | 277,716 | 101,643 | |||||||||||
| End of period | $ | 382,620 | $ | 277,716 | $ | 382,620 | $ | 277,716 | |||||||
| Supplemental disclosure of cash flow information | |||||||||||||||
| Cash paid for interest | $ | 28,796 | $ | 37,903 | $ | 142,944 | $ | 147,106 | |||||||
| Cash paid (received) for income taxes | $ | 905 | $ | (35,810 | ) | $ | 8,950 | $ | (32,069 | ) | |||||
