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SolarWinds plans to invest between $ 20 million and $ 25 million in security-related initiatives this year following a massive cyber attack that compromised many high-profile customers.
According to CFO Barton Kalsu, the besieged IT infrastructure management vendor said the money would be invested in security initiatives and used to cover the higher costs of insurance and professional fees resulting from the violation. SolarWinds admitted on December 13 that nation-state hackers injected malicious code into its Orion network monitoring product from March 2020 to June 2020.
“These [costs] are not necessarily related to remediation as much as we see them as extensions and investments for us for the future, ”SolarWinds Chairman and CEO Sudhakar Ramakrishna told investors on Thursday. “Our aspiration is to meet the broader needs of IT,[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 CIOs and CISOs of SolarWinds’ federal government and private sector clients highlighting the findings of their investigation into the cyberattack as well as the corrective steps. The vast majority of customers understood that an attack like this could have happened to any widely deployed vendor, he said.
“Some customers have taken a wait-and-see attitude, but not necessarily focused on churn or replacement right now,” Ramakrishna said. “The vast majority of clients I’ve spoken to, and with whom we continue to engage, haven’t just upgraded. In fact, many of them have also renewed their contracts. ”
SolarWinds received a lot of questions about the cyberattack from customers when they renewed, Kalsu said. According to Kalsu, customers who take a wait-and-see approach don’t immediately turn off SolarWinds or renew their maintenance contracts.
Kalsu said there was a slight impact on SolarWinds’ MSP business in January, as some of the company’s MSP partners and their end customers assessed the potential impact of the cyber attack. But after SolarWinds was able to assure MSPs that none of the company’s MSP products were affected by the breach, Kalsu said the company began to see its MSP business revive.
“We did not find anything [in the attack] it was idiosyncratic for the SolarWinds environment, ”Ramakrishna said. “And if anything, our safety hygiene, our safety posture and our safety tools are consistent with what is practiced in the industry.”
Revenue for the quarter ended Dec.31 climbed to $ 265.3 million, up 7.2% from $ 247.5 million the year before. That beat Seeking Alpha’s estimate by $ 259.5 million.
Net income soared to $ 132.7 million, or $ 0.42 per diluted share, up 904% from $ 13.2 million, or $ 0.04 per diluted share, the last year. On a non-GAAP basis, net income jumped to $ 82.1 million, or $ 0.26 per diluted share, up 8% from $ 76 million, or $ 0.24 per share, the previous year. This slightly exceeded Seeking Alpha’s non-GAAP earnings estimate of $ 0.25 per share.
SolarWinds stock is down $ 0.04 (0.25%) to $ 15.68 per share in morning trading. The profits were announced before the market opened on Wednesday.
On an annual basis, 2020 sales climbed to $ 1.02 billion, up 9.3% from $ 932.5 million in 2019. And net profit climbed to $ 158.5 million. dollars, or $ 0.50 per diluted share, up 750% from $ 18.6 million, or $ 0.06 per diluted share, the previous year.
For the quarter ending March 31, SolarWinds expects to post diluted non-GAAP earnings or $ 0.19 to $ 0.20 per share on total non-GAAP income of $ 247 million to $ 252 million. Analysts were expecting non-GAAP earnings of $ 0.21 per share on non-GAAP sales of $ 251.3 million, according to Seeking Alpha.
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