SolarWinds plans to invest between $ 20 million and $ 25 million in security-related initiatives this year following a massive cyberattack that affected many high-profile customers.
The embattled IT infrastructure management vendor said the money directed to additional security initiatives will be used to cover higher costs around both insurance and professional fees arising from the bankruptcy, according to CFO Barton Kalsu. SolarWinds December 13 admitted that national state hackers had infected malicious code into their Orion network exploration product from March 2020 to June 2020.
“They are [costs] we are not necessarily tied to medicine as much as we see these as expansion and investment for us going forward, ”SolarWinds President and CEO Sudhakar Ramakrishna told investors on Thursday. “Our desire is to support the broad needs of IT, Dev[elopement] and SecOps [security operations] protection. ”
[Related: Partners: AWS Must Come Clean On Role In SolarWinds Hack]
Since taking over as CEO in early 2021, Ramakrishna said he has spent a lot of time with federal government SolarWinds CIOs and CISOs and private sector customers clarifying the results of their investigation into the cyberattack as well as treatment measures. Most buyers have realized that such an attack could have happened to any wide seller, he said.
“Some customers have a wait-and-see attitude, but they may not be focusing on mashing or refreshing at this time,” Ramakrishna said. “Most of the customers I’ve talked to, and we keep communicating, not just updating. Of course, many of them have also renewed their contracts. ”
SolarWinds has been getting a lot of questions about the cyberattack from customers when they are up for an update, Kalsu said. Those customers who use a wait-and-see approach don’t immediately turn SolarWinds on or fail their maintenance contracts, according to Kalsu.
Kalsu said SolarWinds MSP business had some impact in January as some of the company’s MSP partners and end customers were assessing the potential impact of the cyberattack. But once SolarWinds was able to convince MSPs that the outage did not affect any of the company ‘s MSP results, Kalsu said the company began to see their MSP business return to form.
“We couldn’t find anything [in the attack] that was special to the SolarWinds environment, ”said Ramakrishna. “And if anything, we have both security hygiene, security setup and security equipment in line with what is used in the industry.”
Revenue for the quarter rose Dec. 31 to $ 265.3 million, up 7.2 percent from $ 247.5 million a year earlier. That surpassed Seeking Alpha’s estimate of $ 259.5 million.
Net income came to $ 132.7 million, or $ 0.42 per diluted share, up 904 percent from $ 13.2 million, or $ 0.04 per diluted share, the prior year. On a non-GAAP basis, net income jumped to $ 82.1 million, or $ 0.26 per narrowed share, up 8 percent from $ 76 million, or $ 0.24 per share, the prior year. That put out a non-GAAP Seeking Alpha earnings estimate of $ 0.25 per share.
SolarWinds stock is down $ 0.04 (0.25 percent) to $ 15.68 per share in morning trading. Earnings were announced before the market opened on Wednesday.
On a full-year basis, 2020 sales climbed to $ 1.02 billion, up 9.3 percent from $ 932.5 million in 2019. And net revenue rose to $ 158.5 million, or $ 0.50 per narrowed share, up 750 percent from $ 18.6 million, or $ 0.06 per diluted share, the prior year.
For the quarter ended March 31, SolarWinds expects to record non-GAAP diluted earnings of $ 0.19 to $ 0.20 per share on non-GAAP total revenue of $ 247 million to $ 252 million. Analysts had expected non-GAAP earnings of $ 0.21 per share on non-GAAP sales of $ 251.3 million, according to Seeking Alpha.